HF 1605

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:53am

A bill for an act
relating to utilities; regulating incentive rate plans for conservation investments;
amending Minnesota Statutes 2008, sections 216B.16, subdivision 6c; 216B.241,
subdivision 5a.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2008, section 216B.16, subdivision 6c, is amended to
read:

Subd. 6c.

Incentive plan for energy conservation improvement.

(a) The
commission may order public utilities to develop and submit for commission approval
incentive plans that describe the method of recovery and accounting for utility
conservation expenditures and savings. In developing the incentive plans the commission
shall ensure the effective involvement of interested parties.

(b) In approving incentive plans, the commission shall consider:

(1) whether the plan is likely to increase utility investment in cost-effective energy
conservation;

(2) whether the plan is compatible with the interest of utility ratepayers and other
interested parties;

(3) whether the plan links the incentive to the utility's performance in achieving
cost-effective conservation; and

(4) whether the plan is in conflict with other provisions of this chapter.

(c) The commission may set rates to encourage the vigorous and effective
implementation of utility conservation programs. The commission may:

(1) increase or decrease any otherwise allowed rate of return on net investment based
upon the utility's skill, efforts, and success in conserving energy;

(2) share between ratepayers and utilities the net savings resulting from energy
conservation programs to the extent justified by the utility's skill, efforts, and success in
conserving energy; and

(3) deleted text begin compensate the utility for earnings lost as a result of its conservation programs deleted text end new text begin
adopt any mechanism that satisfies the criteria of this subdivision new text end .

new text begin (d) In a review of an incentive plan, including a review under section 216B.241,
subdivision 2c, the commission shall ensure that any changes to the incentive plan will
encourage public utilities to achieve or exceed the state's energy conservation goals
and maintain the cost-effectiveness of its programs. The commission shall provide the
utility with a reasonable opportunity to improve its overall profitability by effective
implementation of energy conservation programs, taking into consideration earnings lost
as a result of the conservation program. The commission shall ensure that cost-effective
conservation is the most profitable resource option for public utilities.
new text end

Sec. 2.

Minnesota Statutes 2008, section 216B.241, subdivision 5a, is amended to read:

Subd. 5a.

Qualifying solar energy project.

(a) A utility or association may include
in its conservation plan programs for the installation of qualifying solar energy projects as
defined by section 216B.2411 to the extent of the spending allowed for generation projects
by section 216B.2411. The cost-effectiveness of a qualifying solar energy project may
be determined by a different standard than for other energy conservation improvements
under this section if the commissioner determines it is in the public interest to do so to
encourage solar energy projects. Energy savings from qualifying solar energy projects
may not be counted toward the minimum energy-savings goal of at least one percent
for energy conservation improvements required under subdivision 1c, but may, if the
conservation plan is approved:

(1) be counted toward energy savings above that minimum percentage; and

(2) be deleted text begin considered when establishing performance incentives under section 216B.241,
subdivision 2c deleted text end new text begin eligible for a performance incentive under section 216B.16, subdivision 6c,
or 216B.241, subdivision 2c, that is distinct from the incentive for energy conservation
and is based on the competitiveness and cost-effectiveness of solar projects in relation to
other potential solar projects available to the utility new text end .

(b) Qualifying solar energy projects may not be considered when establishing
demand-side management targets under section 216B.2422, 216B.243, or any other
section of this chapter.