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Minnesota Legislature

Office of the Revisor of Statutes

HF 1619

as introduced - 87th Legislature (2011 - 2012) Posted on 04/20/2012 04:24pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 05/02/2011

Current Version - as introduced

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A bill for an act
relating to energy; creating solar energy standard for utilities; regulating solar
energy; amending Minnesota Statutes 2010, section 216B.1691, subdivision 4,
by adding subdivisions.

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

Section 1. new text beginCITATION; PURPOSES.
new text end

new text begin Subdivision 1. new text end

new text begin Citation. new text end

new text begin Sections 1 to 5 may be cited as the Minnesota Solar Energy
Act.
new text end

new text begin Subd. 2. new text end

new text begin Purposes. new text end

new text begin The purposes of sections 1 to 5 are to:
new text end

new text begin (1) provide for the orderly incorporation of solar-generated electricity into the mix
of electricity sources that serve Minnesota consumers to ensure greater diversity among
those sources;
new text end

new text begin (2) increase in-state economic development of Minnesota energy resources;
new text end

new text begin (3) reduce Minnesota's heavy reliance on non-Minnesota fuels for electricity
generation and decrease the economic drain of Minnesota financial resources to pay for
those fuels;
new text end

new text begin (4) increase energy security for Minnesota;
new text end

new text begin (5) develop new, and encourage growth of existing, solar energy businesses in
Minnesota;
new text end

new text begin (6) develop a strong manufacturing base for solar equipment in Minnesota;
new text end

new text begin (7) develop a strong base for solar energy-related jobs in Minnesota;
new text end

new text begin (8) develop a robust private market for solar-generated electricity; and
new text end

new text begin (9) reduce and eliminate insufficient, unreliable, and unsustainable financial
mechanisms to support solar energy development.
new text end

Sec. 2.

Minnesota Statutes 2010, section 216B.1691, is amended by adding a
subdivision to read:


new text begin Subd. 2e. new text end

new text begin Solar energy standard. new text end

new text begin (a) In addition to the requirements of subdivision
2a, each electric utility subject to subdivision 2a shall generate or procure sufficient
electricity generated by solar energy to serve its direct or indirect retail customers in
Minnesota so that at least the following standard percentages of the electric utility's total
retail electric sales to retail customers in Minnesota are generated by solar energy by the
end of the year indicated:
new text end

new text begin (1)
new text end
new text begin 2012
new text end
new text begin 0.1 percent;
new text end
new text begin (2)
new text end
new text begin 2016
new text end
new text begin 0.4 percent;
new text end
new text begin (3)
new text end
new text begin 2020
new text end
new text begin 1 percent;
new text end
new text begin (4)
new text end
new text begin 2025
new text end
new text begin 5 percent; and
new text end
new text begin (5)
new text end
new text begin 2030
new text end
new text begin 10 percent.
new text end

new text begin (b) The commissioner of commerce may adjust a goal for a specific electric utility
under paragraph (a) or delay its implementation after:
new text end

new text begin (1) receipt of a petition from an electric utility that clearly shows that the utility's
average retail rates, or the utility's members' average retail rates, must increase by more
than two percent in order to meet a specified goal;
new text end

new text begin (2) notice to interested persons with at least 60 days for them to submit comments
and at least one public meeting to discuss the petition; and
new text end

new text begin (3) analysis of the petition and all comment by department staff in light of the utility's
then existing rate structure and a staff recommendation for action by the commissioner.
new text end

new text begin The commissioner shall publish the final decision in the State Register and on the
department's Web site and shall transmit the final decision to the commission and the chairs
and ranking minority members of the legislative committees with primary jurisdiction
over energy policy. In no case may a goal for any utility drop below 7.5 percent in 2030.
new text end

Sec. 3.

Minnesota Statutes 2010, section 216B.1691, is amended by adding a
subdivision to read:


new text begin Subd. 2f. new text end

new text begin Solar energy standard; compliance. new text end

new text begin (a) To meet the standard and
benchmarks in subdivision 2e, a utility may:
new text end

new text begin (1) construct and own solar energy installations;
new text end

new text begin (2) purchase electricity and solar renewable energy credits from independent solar
energy power producers or utility customers;
new text end

new text begin (3) purchase solar renewable energy credits from any renewable energy credit
market approved by the commission that separately tags solar renewable energy credits; or
new text end

new text begin (4) remit to the commissioner an amount equal to the number of solar renewable
energy credits the utility needs to comply with a benchmark, times the average market
price of a credit at the time the benchmark must be met, plus 25 percent.
new text end

new text begin (b) The commissioner shall deposit funds remitted under paragraph (a) in the
energy and conservation account in the state treasury established in section 216B.241,
subdivision 2a. The commissioner shall account for money in the fund deposited under
this paragraph by the source of the funds and shall make every reasonable effort to use
the money to provide incentives for solar energy installations in that specific utility's
service territory. If the commissioner is unable, after a three-year period, to fully expend
a utility's payment to the fund in that utility's service territory, the commissioner may
aggregate all such funds and provide incentives for solar energy installations statewide on
a first-come, first-served basis.
new text end

Sec. 4.

Minnesota Statutes 2010, section 216B.1691, subdivision 4, is amended to read:


Subd. 4.

Renewable energy credits.

(a) To facilitate compliance with this section,
the commission, by rule or order, shall establish by January 1, 2008, a program for
tradable renewable energy credits for electricity generated by eligible energy technology.
The credits must represent energy produced by an eligible energy technology, as defined in
subdivision 1. Each kilowatt-hour of renewable energy credits must be treated the same as
a kilowatt-hour of eligible energy technology generated or procured by an electric utility if
it is produced by an eligible energy technology. The program must permit a credit to be
used only once. The program must treat all eligible energy technology equally and shall
not give more or less credit to energy based on the state where the energy was generated or
the technology with which the energy was generated. The commission must determine the
period in which the credits may be used for purposes of the program.

(b) In lieu of generating or procuring energy directly to satisfy the eligible energy
technology objective or standard of this section, an electric utility may utilize renewable
energy credits allowed under the program to satisfy the objective or standard.

(c) The commission shall facilitate the trading of renewable energy credits between
states.

(d) The commission shall require all electric utilities to participate in a
commission-approved credit-tracking system or systems. Once a credit-tracking system is
in operation, the commission shall issue an order establishing protocols for trading credits.

(e) An electric utility subject to subdivision 2a, paragraph (b), may not sell renewable
energy credits to an electric utility subject to subdivision 2a, paragraph (a), until 2021.

new text begin (f) The commission shall ensure that solar renewable energy credits used to meet
the standards in subdivision 2e are separately tagged. Any utility may purchase and any
utility or other person may sell solar renewable energy credits at any time for the purposes
of compliance with subdivision 2e. Solar renewable energy credits may be used to
meet either the standards in subdivision 2a or those in subdivision 2e, but not both. In
all instances, solar renewable energy credits belong to the project owner and must be
purchased separately from the energy, although they may be purchased under the same
contract, power purchase agreement, or other transaction. The commission shall establish
guidelines and a methodology for retail electricity customers who generate solar electric
or thermal energy that is used by the customer and not sold to a utility, so that those
self-generators may sell solar renewable energy credits in the renewable energy credit
market like any other solar electric or solar thermal energy producer.
new text end

new text begin (g) By January 31, 2012, and every two years thereafter, for residential solar
installations with a rated or converted capacity of 100 kilowatts or smaller, the
commissioner of commerce shall determine and publish a base price for solar renewable
energy credits for sale through the program established under paragraph (a) that ensures
that the minimum purchase price reflects at least the average price paid by public utilities
to purchase solar renewable energy credits, determined by the most recent two-year time
period. The commissioner shall ensure that the price is sufficient, when added to the price
of the energy produced by solar projects, to cover the costs of the projects and provide a
reasonable return on investment to the project owner and may:
new text end

new text begin (1) require any Minnesota electric utility to provide specific cost and price data the
utility may have to assist in determining base price;
new text end

new text begin (2) include cost and price data from states with similar insolation levels, particularly
states within the Midwest/Great Plains region, to the extent that data is available to the
commissioner; and
new text end

new text begin (3) adjust the base price downward more often as the private market becomes
functional.
new text end

new text begin The commissioner shall treat as trade secret all cost and price data from a utility or
from any other source that is not otherwise available to a member of the public. The
commissioner shall solicit advice from all interested stakeholders, including, but not
limited to, utilities, solar energy and other businesses, ratepayer advocates, and energy and
environmental policy advocates and shall require confidentiality agreements from each
entity or individual who requests to participate in the determination of base prices and
who seeks access to trade secret data. The commissioner shall determine appropriate
project size groupings within each different solar electric generation technology and
determine base prices for each. The size groupings may change over time when data exist
to support the changes.
new text end

Sec. 5.

Minnesota Statutes 2010, section 216B.1691, is amended by adding a
subdivision to read:


new text begin Subd. 4a. new text end

new text begin Solar electricity; public property. new text end

new text begin (a) An electric utility subject to this
section shall purchase electricity generated by a solar energy project with a rated capacity
of two megawatts or less that is located on property owned by the state, any local unit of
government, or any tribe in Minnesota, or a project that is owned by the state, local unit of
government, or tribe and located on property in Minnesota that is leased by the state, local
unit of government, or tribe. A power purchase agreement must be for a period of at least
20 years, or 30 years if the installation is owned by the public or a tribe.
new text end

new text begin (b) The utility shall pay the following amounts per kilowatt hour of electricity
generated by a project governed by this section that is in excess of what the public facility
at which the project is located can use at any given time:
new text end

new text begin (1)
new text end
new text begin 27.1 cents for a project with a capacity of ten kilowatts or less;
new text end
new text begin (2)
new text end
new text begin 20.3 cents for a project with a capacity of between 11 and 100 kilowatts;
new text end
new text begin (3)
new text end
new text begin 18.7 cents for a project with a capacity of between 101 and 300 kilowatts; and
new text end
new text begin (4)
new text end
new text begin 0.9 cents for a project with a capacity of 301 kilowatts or more.
new text end

new text begin (c) Solar renewable energy credits associated with the electricity produced and
used on site may be marketed through renewable energy credit markets approved by the
commission. For ground-mounted photovoltaic systems, the minimum amount to be paid
by a utility is 20 percent less than the amount listed in paragraph (b).
new text end

new text begin (d) Beginning in 2014, the commissioner of commerce shall, not later than December
31 of each year, reevaluate the price schedule in paragraph (b) and shall adjust prices
downward as the costs of solar energy projects decrease, but not below an amount to
ensure that the electricity sales from a project can, within 20 years, or 30 years for a project
that is owned by the public or a tribe, at least pay for the costs to install and maintain the
project. When the commissioner determines that the private market is fully functional for
certain types of installations, the commissioner shall no longer determine prices for those
types of installations and shall provide notice to utilities, the commission, and interested
stakeholders of the types of installations no longer governed by the minimum prices in
this section. Lack of an identified minimum price does not affect the responsibility of any
utility to continue to purchase electricity from projects that are governed by this section.
new text end