1.1 	CONFERENCE COMMITTEE REPORT ON H. F. No. 164
1.2 	A bill for an act
1.3 	relating to energy; establishing the Energy Conservation and Optimization Act of 
1.4 	2021;amending Minnesota Statutes 2020, sections 216B.2401; 216B.241, 
1.5 	subdivisions 1a, 1c, 1d, 1f, 1g, 2, 2b, 3, 5, 7, 8, by adding subdivisions; proposing 
1.6 	coding for new law in Minnesota Statutes, chapter 216B; repealing Minnesota 
1.7 	Statutes 2020, section 216B.241, subdivisions 1, 1b, 2c, 4, 10.
1.8 	May 14, 2021
1.9 	The Honorable Melissa Hortman
1.10 	Speaker of the House of Representatives
1.11 	The Honorable Jeremy R. Miller
1.12 	President of the Senate
1.13 	We, the undersigned conferees for H. F. No. 164 report that we have agreed upon the 
1.14 	items in dispute and recommend as follows:
1.15 	That the Senate recede from its amendments and that H. F. No. 164 be further amended 
1.16 	as follows:
1.17 	Delete everything after the enacting clause and insert:

1.18 	Section 1. TITLE.
 1.19 	Sections 2 to 18 may be cited as the "Energy Conservation and Optimization Act of 
1.20 	2021."

1.21 	EFFECTIVE DATE. This section is effective the day following final enactment.

1.22 	Sec. 2. Minnesota Statutes 2020, section 216B.2401, is amended to read:
1.23 	216B.2401 ENERGY SAVINGS AND OPTIMIZATION POLICY GOAL.
1.24 	(a) The legislature finds that energy savings are an energy resource, and that cost-effective 
1.25 	energy savings are preferred over all other energy resources. In addition, the legislature 
1.26 	finds that optimizing the timing and method used by energy consumers to manage energy 
2.1 	use provides significant benefits to the consumers and to the utility system as a whole. The 
2.2 	legislature further finds that cost-effective energy savings and load management programs
2.3 	should be procured systematically and aggressively in order to reduce utility costs for 
2.4 	businesses and residents, improve the competitiveness and profitability of businesses, create 
2.5 	more energy-related jobs, reduce the economic burden of fuel imports, and reduce pollution 
2.6 	and emissions that cause climate change. Therefore, it is the energy policy of the state of 
2.7 	Minnesota to achieve annual energy savings equal equivalent to at least 1.5 2.5 percent of 
2.8 	annual retail energy sales of electricity and natural gas through cost-effective energy 
2.9 	conservation improvement programs and rate design, energy efficiency achieved by energy 
2.10 	consumers without direct utility involvement, energy codes and appliance standards, programs 
2.11 	designed to transform the market or change consumer behavior, energy savings resulting 
2.12 	from efficiency improvements to the utility infrastructure and system, and other efforts to 
2.13 	promote energy efficiency and energy conservation. multiple measures, including but not 
2.14 	limited to:
2.15 	(1) cost-effective energy conservation improvement programs and efficient fuel-switching 
2.16 	utility programs under sections 216B.2402 to 216B.241;
2.17 	(2) rate design;
2.18 	(3) energy efficiency achieved by energy consumers without direct utility involvement;
2.19 	(4) advancements in statewide energy codes and cost-effective appliance and equipment 
2.20 	standards;
2.21 	(5) programs designed to transform the market or change consumer behavior;
2.22 	(6) energy savings resulting from efficiency improvements to the utility infrastructure 
2.23 	and system; and
2.24 	(7) other efforts to promote energy efficiency and energy conservation.
2.25 	(b) A utility is encouraged to design and offer to customers load management programs 
2.26 	that enable: (1) customers to maximize the economic value gained from the energy purchased 
2.27 	from the customer's utility service provider; and (2) utilities to optimize the infrastructure 
2.28 	and generation capacity needed to effectively serve customers and facilitate the integration 
2.29 	of renewable energy into the energy system.
2.30 	(c) The commissioner must provide a reasonable estimate of progress made toward the 
2.31 	statewide energy-savings goal under paragraph (a) in the annual report required under section 
2.32 	216B.241, subdivision 1c, and make recommendations for administrative or legislative 
2.33 	initiatives to increase energy savings toward that goal. The commissioner must also annually 
3.1 	report on the energy productivity of the state's economy by estimating the ratio of economic 
3.2 	output produced in the most recently completed calendar year to the primary energy inputs 
3.3 	used in that year.

3.4 	EFFECTIVE DATE. This section is effective the day following final enactment.

3.5 	Sec. 3. [216B.2402] DEFINITIONS.
3.6 		Subdivision 1.Definitions. For the purposes of section 216B.16, subdivision 6b, and 
3.7 	sections 216B.2401 to 216B.241, the following terms have the meanings given them.
3.8 		Subd. 2.Consumer-owned utility. "Consumer-owned utility" means a municipal gas 
3.9 	utility, a municipal electric utility, or a cooperative electric association.
3.10 		Subd. 3.Cumulative lifetime savings. "Cumulative lifetime savings" means the total 
3.11 	electric energy or natural gas savings in a given year from energy conservation improvements 
3.12 	installed in that given year and energy conservation improvements installed in previous 
3.13 	years that are still in operation.
3.14 		Subd. 4.Efficient fuel-switching improvement. "Efficient fuel-switching improvement" 
3.15 	means a project that:
3.16 	(1) replaces a fuel used by a customer with electricity or natural gas delivered at retail 
3.17 	by a utility subject to section 216B.2403 or 216B.241;
3.18 	(2) results in a net increase in the use of electricity or natural gas and a net decrease in 
3.19 	source energy consumption on a fuel-neutral basis;
3.20 	(3) otherwise meets the criteria established for consumer-owned utilities in section 
3.21 	216B.2403, subdivision 8, and for public utilities under section 216B.241, subdivisions 11 
3.22 	and 12; and
3.23 	(4) requires the installation of equipment that utilizes electricity or natural gas, resulting 
3.24 	in a reduction or elimination of the previous fuel used.
3.25 	An efficient fuel-switching improvement is not an energy conservation improvement or 
3.26 	energy efficiency even if the efficient fuel-switching improvement results in a net reduction 
3.27 	in electricity or natural gas use. An efficient fuel-switching improvement does not include, 
3.28 	and must not count toward any energy savings goal from, energy conservation improvements 
3.29 	when fuel switching would result in an increase of greenhouse gas emissions into the 
3.30 	atmosphere on an annual basis.
4.1 		Subd. 5.Energy conservation. "Energy conservation" means an action that results in 
4.2 	a net reduction in electricity or natural gas consumption. Energy conservation does not 
4.3 	include an efficient fuel-switching improvement.
4.4 		Subd. 6.Energy conservation improvement. "Energy conservation improvement" 
4.5 	means a project that results in energy efficiency or energy conservation. Energy conservation 
4.6 	improvement may include waste heat that is recovered and converted into electricity or used 
4.7 	as thermal energy, but does not include electric utility infrastructure projects approved by 
4.8 	the commission under section 216B.1636.
4.9 		Subd. 7.Energy efficiency. "Energy efficiency" means measures or programs, including 
4.10 	energy conservation measures or programs, that: (1) target consumer behavior, equipment, 
4.11 	processes, or devices; (2) are designed to reduce the consumption of electricity or natural 
4.12 	gas on either an absolute or per unit of production basis; and (3) do not reduce the quality 
4.13 	or level of service provided to an energy consumer.
4.14 		Subd. 8.Fuel. "Fuel" means energy, including electricity, propane, natural gas, heating 
4.15 	oil, gasoline, diesel fuel, or steam, consumed by a retail utility customer.
4.16 		Subd. 9.Fuel neutral. "Fuel neutral" means an approach that compares the use of various 
4.17 	fuels for a given end use, using a common metric.
4.18 		Subd. 10.Gross annual retail energy sales. "Gross annual retail energy sales" means 
4.19 	a utility's annual electric sales to all Minnesota retail customers, or natural gas throughput 
4.20 	to all retail customers, including natural gas transportation customers, on a utility's 
4.21 	distribution system in Minnesota. Gross annual retail energy sales does not include:
4.22 	(1) gas sales to:
4.23 	(i) a large energy facility;
4.24 	(ii) a large customer facility whose natural gas utility has been exempted by the 
4.25 	commissioner under section 216B.241, subdivision 1a, paragraph (a), with respect to natural 
4.26 	gas sales made to the large customer facility; and
4.27 	(iii) a commercial gas customer facility whose natural gas utility has been exempted by 
4.28 	the commissioner under section 216B.241, subdivision 1a, paragraph (b), with respect to 
4.29 	natural gas sales made to the commercial gas customer facility;
4.30 	(2) electric sales to a large customer facility whose electric utility has been exempted 
4.31 	by the commissioner under section 216B.241, subdivision 1a, paragraph (a), with respect 
4.32 	to electric sales made to the large customer facility; or
5.1 	(3) the amount of electric sales prior to December 31, 2032, that are associated with a 
5.2 	utility's program, rate, or tariff for electric vehicle charging based on a methodology and 
5.3 	assumptions developed by the department in consultation with interested stakeholders no 
5.4 	later than December 31, 2021. After December 31, 2032, incremental sales to electric 
5.5 	vehicles must be included in calculating a utility's gross annual retail sales.
5.6 		Subd. 11.Investments and expenses of a public utility.  "Investments and expenses of 
5.7 	a public utility" means the investments and expenses incurred by a public utility in connection 
5.8 	with an energy conservation improvement.
5.9 		Subd. 12.Large customer facility. "Large customer facility" means all buildings, 
5.10 	structures, equipment, and installations at a single site that in aggregate: (1) impose a peak 
5.11 	electrical demand on an electric utility's system of at least 20,000 kilowatts, measured in 
5.12 	the same way as the utility that serves the customer facility measures electric demand for 
5.13 	billing purposes; or (2) consume at least 500,000,000 cubic feet of natural gas annually. 
5.14 	When calculating peak electrical demand, a large customer facility may include demand 
5.15 	offset by on-site cogeneration facilities and, if engaged in mineral extraction, may include 
5.16 	peak energy demand from the large customer facility's mining processing operations.
5.17 		Subd. 13.Large energy facility. "Large energy facility" has the meaning given in section 
5.18 	216B.2421, subdivision 2, clause (1).
5.19 		Subd. 14.Lifetime energy savings. "Lifetime energy savings" means the amount of 
5.20 	savings a particular energy conservation improvement is projected to produce over the 
5.21 	improvement's effective useful lifetime.
5.22 		Subd. 15.Load management. "Load management" means an activity, service, or 
5.23 	technology that changes the timing or the efficiency of a customer's use of energy that allows 
5.24 	a utility or a customer to: (1) respond to local and regional energy system conditions; or (2) 
5.25 	reduce peak demand for electricity or natural gas. Load management that reduces a customer's 
5.26 	net annual energy consumption is also energy conservation.
5.27 		Subd. 16.Low-income household. "Low-income household" means a household whose 
5.28 	household income is 60 percent or less of the state median household income.
5.29 		Subd. 17.Low-income programs. "Low-income programs" means energy conservation 
5.30 	improvement and efficient fuel-switching programs that directly serve the needs of 
5.31 	low-income households, including low-income renters.
5.32 		Subd. 18.Member. "Member" has the meaning given in section 308B.005, subdivision 
5.33 	15.
6.1 		Subd. 19.Multifamily building. "Multifamily building" means a residential building 
6.2 	containing five or more dwelling units.
6.3 		Subd. 20.Preweatherization measure. "Preweatherization measure" means an 
6.4 	improvement that is necessary to allow energy conservation improvements to be installed 
6.5 	in a home.
6.6 		Subd. 21.Qualifying utility. "Qualifying utility" means a utility that supplies a customer 
6.7 	with energy that enables the customer to qualify as a large customer facility.
6.8 		Subd. 22.Waste heat recovered and used as thermal energy. "Waste heat recovered 
6.9 	and used as thermal energy" means capturing heat energy that would be exhausted or 
6.10 	dissipated to the environment from machinery, buildings, or industrial processes, and 
6.11 	productively using the recovered thermal energy where it was captured or distributing it as 
6.12 	thermal energy to other locations where it is used to reduce demand-side consumption of 
6.13 	natural gas, electric energy, or both.
6.14 		Subd. 23.Waste heat recovery converted into electricity.  "Waste heat recovery 
6.15 	converted into electricity" means an energy recovery process that converts to electricity 
6.16 	energy from the heat of exhaust stacks or pipes used for engines or manufacturing or 
6.17 	industrial processes, or from the reduction of high pressure in water or gas pipelines, that 
6.18 	would otherwise be lost.

6.19 	EFFECTIVE DATE. This section is effective the day following final enactment.

6.20 	Sec. 4. [216B.2403] CONSUMER-OWNED UTILITIES; ENERGY CONSERVATION 
6.21 	AND OPTIMIZATION.
6.22 		Subdivision 1.Applicability. This section applies to:
6.23 	(1) a cooperative electric association that provides retail service to more than 5,000 
6.24 	members;
6.25 	(2) a municipality that provides electric service to more than 1,000 retail customers; and
6.26 	(3) a municipality with more than 1,000,000,000 cubic feet in annual throughput sales 
6.27 	to natural gas retail customers.
6.28 		Subd. 2.Consumer-owned utility; energy-savings goal. (a) Each individual 
6.29 	consumer-owned utility subject to this section has an annual energy-savings goal equivalent 
6.30 	to 1.5 percent of gross annual retail energy sales, to be met with a minimum of energy 
6.31 	savings from energy conservation improvements equivalent to at least 0.95 percent of the 
6.32 	consumer-owned utility's gross annual retail energy sales. The balance of energy savings 
7.1 	toward the annual energy-savings goal may be achieved only by the following 
7.2 	consumer-owned utility activities:
7.3 	(1) energy savings from additional energy conservation improvements;
7.4 	(2) electric utility infrastructure projects, as defined in section 216B.1636, subdivision 
7.5 	1, that result in increased efficiency greater than would have occurred through normal 
7.6 	maintenance activity;
7.7 	(3) net energy savings from efficient fuel-switching improvements that meet the criteria 
7.8 	under subdivision 8, which may contribute up to 0.55 percent of the goal; or
7.9 	(4) subject to department approval, demand-side natural gas or electric energy displaced 
7.10 	by use of waste heat recovered and used as thermal energy, including the recovered thermal 
7.11 	energy from a cogeneration or combined heat and power facility.
7.12 	(b) The energy-savings goals specified in this section must be calculated based on 
7.13 	weather-normalized sales averaged over the most recent three years. A consumer-owned 
7.14 	utility may elect to carry forward energy savings in excess of 1.5 percent for a year to the 
7.15 	next three years, except that energy savings from electric utility infrastructure projects may 
7.16 	be carried forward for five years. A particular energy savings can only be used to meet one 
7.17 	year's goal.
7.18 	(c) A consumer-owned utility subject to this section is not required to make energy 
7.19 	conservation improvements that are not cost-effective, even if the improvement is necessary 
7.20 	to attain the energy-savings goal. A consumer-owned utility subject to this section must 
7.21 	make reasonable efforts to implement energy conservation improvements that exceed the 
7.22 	minimum level established under this subdivision if cost-effective opportunities and funding 
7.23 	are available, considering other potential investments the consumer-owned utility intends 
7.24 	to make to benefit customers during the term of the plan filed under subdivision 3.
7.25 	(d) Notwithstanding any provision to the contrary, until July 1, 2026, spending by a 
7.26 	consumer-owned utility subject to this section on efficient fuel-switching improvements 
7.27 	implemented to meet the annual energy savings goal under this section must not exceed 
7.28 	0.55 percent per year, averaged over a three-year period, of the consumer-owned utility's 
7.29 	gross annual retail energy sales.
7.30 		Subd. 3.Consumer-owned utility; energy conservation and optimization plans. (a) 
7.31 	By June 1, 2022, and at least every three years thereafter, each consumer-owned utility must 
7.32 	file with the commissioner an energy conservation and optimization plan that describes the 
7.33 	programs for energy conservation, efficient fuel-switching, load management, and other 
8.1 	measures the consumer-owned utility intends to offer to achieve the utility's energy savings 
8.2 	goal.
8.3 	(b) A plan's term may extend up to three years. A multiyear plan must identify the total 
8.4 	energy savings and energy savings resulting from energy conservation improvements that 
8.5 	are projected to be achieved in each year of the plan. A multiyear plan that does not, in each 
8.6 	year of the plan, meet both the minimum energy savings goal from energy conservation 
8.7 	improvements and the total energy savings goal of 1.5 percent, or lower goals adjusted by 
8.8 	the commissioner under paragraph (k), must:
8.9 	(1) state why each goal is projected to be unmet; and
8.10 	(2) demonstrate how the consumer-owned utility proposes to meet both goals on an 
8.11 	average basis over the duration of the plan.
8.12 	(c) A plan filed under this subdivision must provide:
8.13 	(1) for existing programs, an analysis of the cost-effectiveness of the consumer-owned 
8.14 	utility's programs offered under the plan, using a list of baseline energy- and capacity-savings 
8.15 	assumptions developed in consultation with the department; and
8.16 	(2) for new programs, a preliminary analysis upon which the program will proceed, in 
8.17 	parallel with further development of assumptions and standards.
8.18 	(d) The commissioner must evaluate a plan filed under this subdivision based on the 
8.19 	plan's likelihood to achieve the energy-savings goals established in subdivision 2. The 
8.20 	commissioner may make recommendations to a consumer-owned utility regarding ways to 
8.21 	increase the effectiveness of the consumer-owned utility's energy conservation activities 
8.22 	and programs under this subdivision. The commissioner may recommend that a 
8.23 	consumer-owned utility implement a cost-effective energy conservation program, including 
8.24 	an energy conservation program suggested by an outside source such as a political 
8.25 	subdivision, nonprofit corporation, or community organization.
8.26 	(e) Beginning June 1, 2023, and every June 1 thereafter, each consumer-owned utility 
8.27 	must file: (1) an annual update identifying the status of the plan filed under this subdivision, 
8.28 	including: (i) total expenditures and investments made to date under the plan; and (ii) any 
8.29 	intended changes to the plan; and (2) a summary of the annual energy-savings achievements 
8.30 	under a plan. An annual filing made in the last year of a plan must contain a new plan that 
8.31 	complies with this section.
8.32 	(f) When evaluating the cost-effectiveness of a consumer-owned utility's energy 
8.33 	conservation programs, the consumer-owned utility and the commissioner must consider 
9.1 	the costs and benefits to ratepayers, the utility, participants, and society. The commissioner 
9.2 	must also consider the rate at which the consumer-owned utility is increasing energy savings 
9.3 	and expenditures on energy conservation, and lifetime energy savings and cumulative energy 
9.4 	savings.
9.5 	(g) A consumer-owned utility may annually spend and invest up to ten percent of the 
9.6 	total amount spent and invested on energy conservation improvements on research and 
9.7 	development projects that meet the definition of energy conservation improvement.
9.8 	(h) A generation and transmission cooperative electric association or municipal power 
9.9 	agency that provides energy services to consumer-owned utilities may file a plan under this 
9.10 	subdivision on behalf of the consumer-owned utilities to which the association or agency 
9.11 	provides energy services and may make investments, offer conservation programs, and 
9.12 	otherwise fulfill the energy-savings goals and reporting requirements of this subdivision 
9.13 	for those consumer-owned utilities on an aggregate basis.
9.14 	(i) A consumer-owned utility is prohibited from spending for or investing in energy 
9.15 	conservation improvements that directly benefit a large energy facility or a large electric 
9.16 	customer facility the commissioner has exempted under section 216B.241, subdivision 1a.
9.17 	(j) The energy conservation and optimization plan of a consumer-owned utility may 
9.18 	include activities to improve energy efficiency in the public schools served by the utility. 
9.19 	These activities may include programs to:
9.20 	(1) increase the efficiency of the school's lighting and heating and cooling systems;
9.21 	(2) recommission buildings;
9.22 	(3) train building operators; and
9.23 	(4) provide opportunities to educate students, teachers, and staff regarding energy 
9.24 	efficiency measures implemented at the school.
9.25 	(k) A consumer-owned utility may request that the commissioner adjust the 
9.26 	consumer-owned utility's minimum goal for energy savings from energy conservation 
9.27 	improvements under subdivision 2, paragraph (a), for the duration of the plan filed under 
9.28 	this subdivision. The request must be made by January 1 of the year when the 
9.29 	consumer-owned utility must file a plan under this subdivision. The request must be based 
9.30 	on:
9.31 	(1) historical energy conservation improvement program achievements;
9.32 	(2) customer class makeup;
10.1 	(3) projected load growth;
10.2 	(4) an energy conservation potential study that estimates the amount of cost-effective 
10.3 	energy conservation potential that exists in the consumer-owned utility's service territory;
10.4 	(5) the cost-effectiveness and quality of the energy conservation programs offered by 
10.5 	the consumer-owned utility; and
10.6 	(6) other factors the commissioner and consumer-owned utility determine warrant an 
10.7 	adjustment.
10.8 	The commissioner must adjust the energy savings goal to a level the commissioner determines 
10.9 	is supported by the record, but must not approve a minimum energy savings goal from 
10.10 	energy conservation improvements that is less than an average of 0.95 percent per year over 
10.11 	the consecutive years of the plan's duration, including the year the minimum energy savings 
10.12 	goal is adjusted.
10.13 	(l) A consumer-owned utility filing a conservation and optimization plan that includes 
10.14 	an efficient fuel-switching program to achieve the utility's energy savings goal must, as part 
10.15 	of the filing, demonstrate by a comparison of greenhouse gas emissions between the fuels 
10.16 	that the requirements of subdivision 8 are met, using a full fuel-cycle energy analysis.
10.17 		Subd. 4.Consumer-owned utility; energy savings investment. (a) Except as otherwise 
10.18 	provided, a consumer-owned utility that the commissioner determines falls short of the 
10.19 	minimum energy savings goal from energy conservation improvements established in 
10.20 	subdivision 2, paragraph (a), for three consecutive years during which the utility has annually 
10.21 	spent on energy conservation improvements less than 1.5 percent of the utility's gross 
10.22 	operating revenues for an electric utility or less than 0.5 percent of the utility's gross operating 
10.23 	revenues for a natural gas utility, must spend no less than the following amounts for energy 
10.24 	conservation improvements:
10.25 	(1) for a municipality, 0.5 percent of the municipality's gross operating revenues from 
10.26 	the sale of gas and 1.5 percent of the municipality's gross operating revenues from the sale 
10.27 	of electricity, excluding gross operating revenues from electric and gas service provided in 
10.28 	Minnesota to large electric customer facilities; and
10.29 	(2) for a cooperative electric association, 1.5 percent of the association's gross operating 
10.30 	revenues from service provided in the state, excluding gross operating revenues from service 
10.31 	provided in Minnesota to large electric customers facilities indirectly through a distribution 
10.32 	cooperative electric association.
11.1 	(b) The commissioner may not impose the spending requirement under this subdivision 
11.2 	if the commissioner has determined that the utility has followed the commissioner's 
11.3 	recommendations, if any, provided under subdivision 3, paragraph (d).
11.4 	(c) Upon request of a consumer-owned utility, the commissioner may reduce the amount 
11.5 	or duration of the spending requirement imposed under this subdivision, or both, if the 
11.6 	commissioner determines that the consumer-owned utility's failure to maintain the minimum 
11.7 	energy savings goal is the result of:
11.8 	(1) a natural disaster or other emergency that is declared by the executive branch through 
11.9 	an emergency executive order that affects the consumer-owned utility's service area;
11.10 	(2) a unique load distribution experienced by the consumer-owned utility; or
11.11 	(3) other factors that the commissioner determines justifies a reduction.
11.12 	(d) Unless the commissioner reduces the duration of the spending requirement under 
11.13 	paragraph (c), the spending requirement under this subdivision remains in effect until the 
11.14 	consumer-owned utility has met the minimum energy savings goal for three consecutive 
11.15 	years.
11.16 		Subd. 5.Energy conservation programs for low-income households. (a) A 
11.17 	consumer-owned utility subject to this section must provide energy conservation programs 
11.18 	to low-income households. The commissioner must evaluate a consumer-owned utility's 
11.19 	plans under this section by considering the consumer-owned utility's historic spending on 
11.20 	energy conservation programs directed to low-income households, the rate of customer 
11.21 	participation in and the energy savings resulting from those programs, and the number of 
11.22 	low-income persons residing in the consumer-owned utility's service territory. A municipal 
11.23 	utility that furnishes natural gas service must spend at least 0.2 percent of the municipal 
11.24 	utility's most recent three-year average gross operating revenue from residential customers 
11.25 	in Minnesota on energy conservation programs for low-income households. A 
11.26 	consumer-owned utility that furnishes electric service must spend at least 0.2 percent of the 
11.27 	consumer-owned utility's gross operating revenue from residential customers in Minnesota 
11.28 	on energy conservation programs for low-income households. The requirement under this 
11.29 	paragraph applies to each generation and transmission cooperative association's aggregate 
11.30 	gross operating revenue from the sale of electricity to residential customers in Minnesota 
11.31 	by all of the association's member distribution cooperatives.
11.32 	(b) To meet all or part of the spending requirements of paragraph (a), a consumer-owned 
11.33 	utility may contribute money to the energy and conservation account established in section 
11.34 	216B.241, subdivision 2a. An energy conservation optimization plan must state the amount 
12.1 	of contributions the consumer-owned utility plans to make to the energy and conservation 
12.2 	account. Contributions to the account must be used for energy conservation programs serving 
12.3 	low-income households, including renters, located in the service area of the consumer-owned 
12.4 	utility making the contribution. Contributions must be remitted to the commissioner by 
12.5 	February 1 each year.
12.6 	(c) The commissioner must establish energy conservation programs for low-income 
12.7 	households funded through contributions to the energy and conservation account under 
12.8 	paragraph (b). When establishing energy conservation programs for low-income households, 
12.9 	the commissioner must consult political subdivisions, utilities, and nonprofit and community 
12.10 	organizations, including organizations providing energy and weatherization assistance to 
12.11 	low-income households. The commissioner must record and report expenditures and energy 
12.12 	savings achieved as a result of energy conservation programs for low-income households 
12.13 	funded through the energy and conservation account in the report required under section 
12.14 	216B.241, subdivision 1c, paragraph (f). The commissioner may contract with a political 
12.15 	subdivision, nonprofit or community organization, public utility, municipality, or 
12.16 	consumer-owned utility to implement low-income programs funded through the energy and 
12.17 	conservation account.
12.18 	(d) A consumer-owned utility may petition the commissioner to modify the required 
12.19 	spending under this subdivision if the consumer-owned utility and the commissioner were 
12.20 	unable to expend the amount required for three consecutive years.
12.21 	(e) The commissioner must develop and establish guidelines for determining the eligibility 
12.22 	of multifamily buildings to participate in energy conservation programs provided to 
12.23 	low-income households. Notwithstanding the definition of low-income household in section 
12.24 	216B.2402, a consumer-owned utility or association may apply the most recent guidelines 
12.25 	published by the department for purposes of determining the eligibility of multifamily 
12.26 	buildings to participate in low-income programs. The commissioner must convene a 
12.27 	stakeholder group to review and update these guidelines by August 1, 2021, and at least 
12.28 	once every five years thereafter. The stakeholder group must include but is not limited to 
12.29 	representatives of public utilities; municipal electric or gas utilities; electric cooperative 
12.30 	associations; multifamily housing owners and developers; and low-income advocates.
12.31 	(f) Up to 15 percent of a consumer-owned utility's spending on low-income energy 
12.32 	conservation programs may be spent on preweatherization measures. A consumer-owned 
12.33 	utility is prohibited from claiming energy savings from preweatherization measures toward 
12.34 	the consumer-owned utility's energy savings goal.
13.1 	(g) The commissioner must, by order, establish a list of preweatherization measures 
13.2 	eligible for inclusion in low-income energy conservation programs no later than March 15, 
13.3 	2022.
13.4 	(h) A Healthy AIR (Asbestos Insulation Removal) account is established as a separate 
13.5 	account in the special revenue fund in the state treasury. A consumer-owned utility may 
13.6 	elect to contribute money to the Healthy AIR account to provide preweatherization measures 
13.7 	for households eligible for weatherization assistance from the state weatherization assistance 
13.8 	program in section 216C.264. Remediation activities must be executed in conjunction with 
13.9 	federal weatherization assistance program services. Money contributed to the account by a 
13.10 	consumer-owned utility counts toward: (1) the minimum low-income spending requirement 
13.11 	under paragraph (a); and (2) the cap on preweatherization measures under paragraph (f). 
13.12 	Money in the account is annually appropriated to the commissioner of commerce to pay for 
13.13 	Healthy AIR-related activities.
13.14 		Subd. 6.Recovery of expenses. The commission must allow a cooperative electric 
13.15 	association subject to rate regulation under section 216B.026 to recover expenses resulting 
13.16 	from: (1) a plan under this section; and (2) assessments and contributions to the energy and 
13.17 	conservation account under section 216B.241, subdivision 2a.
13.18 		Subd. 7.Ownership of preweatherization measure or energy conservation 
13.19 	improvement. (a) A preweatherization measure or energy conservation improvement 
13.20 	installed in a building under this section, excluding a system owned by a consumer-owned 
13.21 	utility that is designed to turn off, limit, or vary the delivery of energy, is the exclusive 
13.22 	property of the building owner, except to the extent that the improvement is subject to a 
13.23 	security interest in favor of the consumer-owned utility in case of a loan to the building 
13.24 	owner for the improvement.
13.25 	(b) A consumer-owned utility has no liability for loss, damage, or injury directly or 
13.26 	indirectly caused by a preweatherization measure or energy conservation improvement, 
13.27 	unless a consumer-owned utility is determined to have been negligent in purchasing, 
13.28 	installing, or modifying a preweatherization measure or energy conservation improvement.
13.29 		Subd. 8.Criteria for efficient fuel-switching improvements. (a) A fuel-switching 
13.30 	improvement is deemed efficient if, applying the technical criteria established under section 
13.31 	216B.241, subdivision 1d, paragraph (e), the improvement, relative to the fuel being 
13.32 	displaced:
13.33 	(1) results in a net reduction in the amount of source energy consumed for a particular 
13.34 	use, measured on a fuel-neutral basis;
14.1 	(2) results in a net reduction of statewide greenhouse gas emissions, as defined in section 
14.2 	216H.01, subdivision 2, over the lifetime of the improvement. For an efficient fuel-switching 
14.3 	improvement installed by an electric consumer-owned utility, the reduction in emissions 
14.4 	must be measured based on the hourly emissions profile of the consumer-owned utility or  
14.5 	the utility's electricity supplier, as reported in the most recent resource plan approved by 
14.6 	the commission under section 216B.2422. If the hourly emissions profile is not available, 
14.7 	the commissioner must develop a method consumer-owned utilities must use to estimate 
14.8 	that value;
14.9 	(3) is cost-effective, considering the costs and benefits from the perspective of the 
14.10 	consumer-owned utility, participants, and society; and
14.11 	(4) is installed and operated in a manner that improves the consumer-owned utility's 
14.12 	system load factor.
14.13 	(b) For purposes of this subdivision, "source energy" means the total amount of primary 
14.14 	energy required to deliver energy services, adjusted for losses in  generation, transmission, 
14.15 	and distribution, and expressed on a fuel-neutral basis.
14.16 		Subd. 9.Manner of filing and service. (a) A consumer-owned utility must submit the 
14.17 	filings required under this section to the department using the department's electronic filing 
14.18 	system. The commissioner may approve an exemption from this requirement if an affected 
14.19 	consumer-owned utility is unable to submit filings via the department's electronic filing 
14.20 	system. All other interested parties must submit filings to the department via the department's 
14.21 	electronic filing system whenever practicable but may also file by personal delivery or by 
14.22 	mail.
14.23 	(b) The submission of a document to the department's electronic filing system constitutes 
14.24 	service on the department. If a department rule requires service of a notice, order, or other 
14.25 	document by the department, a consumer-owned utility, or an interested party upon persons 
14.26 	on a service list maintained by the department, service may be made by personal delivery, 
14.27 	mail, or electronic service. Electronic service may be made only to persons on the service 
14.28 	list that have previously agreed in writing to accept electronic service at an e-mail address 
14.29 	provided to the department for electronic service purposes.
14.30 		Subd. 10.Assessment. The commission or department may assess consumer-owned 
14.31 	utilities subject to this section to carry out the purposes of section 216B.241, subdivisions 
14.32 	1d, 1e, and 1f. An assessment under this subdivision must be proportionate to a 
14.33 	consumer-owned utility's gross operating revenue from sales of gas or electric service in 
14.34 	Minnesota during the previous calendar year, as applicable. Assessments under this 
15.1 	subdivision are not subject to the cap on assessments under section 216B.62 or any other 
15.2 	law.

15.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

15.4 	Sec. 5. Minnesota Statutes 2020, section 216B.241, subdivision 1a, is amended to read:
15.5 		Subd. 1a.Investment, expenditure, and contribution; public utility Large customer 
15.6 	facility. (a) For purposes of this subdivision and subdivision 2, "public utility" has the 
15.7 	meaning given it in section 216B.02, subdivision 4. Each public utility shall spend and 
15.8 	invest for energy conservation improvements under this subdivision and subdivision 2 the 
15.9 	following amounts:
15.10 	(1) for a utility that furnishes gas service, 0.5 percent of its gross operating revenues 
15.11 	from service provided in the state;
15.12 	(2) for a utility that furnishes electric service, 1.5 percent of its gross operating revenues 
15.13 	from service provided in the state; and
15.14 	(3) for a utility that furnishes electric service and that operates a nuclear-powered electric 
15.15 	generating plant within the state, two percent of its gross operating revenues from service 
15.16 	provided in the state.
15.17 	For purposes of this paragraph (a), "gross operating revenues" do not include revenues 
15.18 	from large customer facilities exempted under paragraph (b), or from commercial gas 
15.19 	customers that are exempted under paragraph (c) or (e).
15.20 	(b) (a) The owner of a large customer facility may petition the commissioner to exempt 
15.21 	both electric and gas utilities serving the large customer facility from the investment and 
15.22 	expenditure requirements of paragraph (a) contributing to investments and expenditures 
15.23 	made under an energy and conservation optimization plan filed under subdivision 2 or 
15.24 	section 216B.2403, subdivision 3, with respect to retail revenues attributable to the large 
15.25 	customer facility. The filing must include a discussion of the competitive or economic 
15.26 	pressures facing the owner of the facility and the efforts taken by the owner to identify, 
15.27 	evaluate, and implement energy conservation and efficiency improvements. A filing 
15.28 	submitted on or before October 1 of any year must be approved within 90 days and become 
15.29 	effective January 1 of the year following the filing, unless the commissioner finds that the 
15.30 	owner of the large customer facility has failed to take reasonable measures to identify, 
15.31 	evaluate, and implement energy conservation and efficiency improvements. If a facility 
15.32 	qualifies as a large customer facility solely due to its peak electrical demand or annual 
15.33 	natural gas usage, the exemption may be limited to the qualifying utility if the commissioner 
16.1 	finds that the owner of the large customer facility has failed to take reasonable measures to 
16.2 	identify, evaluate, and implement energy conservation and efficiency improvements with 
16.3 	respect to the nonqualifying utility. Once an exemption is approved, the commissioner may 
16.4 	request the owner of a large customer facility to submit, not more often than once every 
16.5 	five years, a report demonstrating the large customer facility's ongoing commitment to 
16.6 	energy conservation and efficiency improvement after the exemption filing. The 
16.7 	commissioner may request such reports for up to ten years after the effective date of the 
16.8 	exemption, unless the majority ownership of the large customer facility changes, in which 
16.9 	case the commissioner may request additional reports for up to ten years after the change 
16.10 	in ownership occurs. The commissioner may, within 180 days of receiving a report submitted 
16.11 	under this paragraph, rescind any exemption granted under this paragraph upon a 
16.12 	determination that the large customer facility is not continuing to make reasonable efforts 
16.13 	to identify, evaluate, and implement energy conservation improvements. A large customer 
16.14 	facility that is, under an order from the commissioner, exempt from the investment and 
16.15 	expenditure requirements of paragraph (a) as of December 31, 2010, is not required to 
16.16 	submit a report to retain its exempt status, except as otherwise provided in this paragraph 
16.17 	with respect to ownership changes. No exempt large customer facility may participate in a 
16.18 	utility conservation improvement program unless the owner of the facility submits a filing 
16.19 	with the commissioner to withdraw its exemption.
16.20 	(c) (b) A commercial gas customer that is not a large customer facility and that purchases 
16.21 	or acquires natural gas from a public utility having fewer than 600,000 natural gas customers 
16.22 	in Minnesota may petition the commissioner to exempt gas utilities serving the commercial 
16.23 	gas customer from the investment and expenditure requirements of paragraph (a) contributing 
16.24 	to investments and expenditures made under an energy and conservation optimization plan 
16.25 	filed under subdivision 2 or section 216B.2403, subdivision 3, with respect to retail revenues 
16.26 	attributable to the commercial gas customer. The petition must be supported by evidence 
16.27 	demonstrating that the commercial gas customer has acquired or can reasonably acquire 
16.28 	the capability to bypass use of the utility's gas distribution system by obtaining natural gas 
16.29 	directly from a supplier not regulated by the commission. The commissioner shall grant the 
16.30 	exemption if the commissioner finds that the petitioner has made the demonstration required 
16.31 	by this paragraph.
16.32 	(d) The commissioner may require investments or spending greater than the amounts 
16.33 	required under this subdivision for a public utility whose most recent advance forecast 
16.34 	required under section 216B.2422 or 216C.17 projects a peak demand deficit of 100 
16.35 	megawatts or greater within five years under midrange forecast assumptions.
17.1 	(e) (c) A public utility, consumer-owned utility, or owner of a large customer facility 
17.2 	may appeal a decision of the commissioner under paragraph (a) or (b), (c), or (d) to the 
17.3 	commission under subdivision 2. In reviewing a decision of the commissioner under 
17.4 	paragraph (a) or (b), (c), or (d), the commission shall rescind the decision if it finds that the 
17.5 	required investments or spending will:
17.6 	(1) not result in cost-effective energy conservation improvements; or
17.7 	(2) otherwise the decision is not be in the public interest.
17.8 	(d) Notwithstanding paragraph (a), a large customer facility or commercial gas customer 
17.9 	that is exempt from the investment and expenditure requirements of this section pursuant 
17.10 	to an order from the commissioner as of December 31, 2020, is not required to submit 
17.11 	additional documentation to maintain the exemption and must not be assessed any costs 
17.12 	related to any energy conservation and optimization plan filed under this section or section 
17.13 	216B.2403, including but not limited to costs, incentives, or rates of return associated with 
17.14 	investments in programs for efficient fuel-switching improvements.
17.15 	(e) A public utility is prohibited from spending for or investing in energy conservation 
17.16 	improvements that directly benefit a large energy facility or a large electric customer facility 
17.17 	the commissioner has issued an exemption to under this section.

17.18 	EFFECTIVE DATE. This section is effective the day following final enactment.

17.19 	Sec. 6. Minnesota Statutes 2020, section 216B.241, subdivision 1c, is amended to read:
17.20 		Subd. 1c.Public utility; energy-saving goals. (a) The commissioner shall establish 
17.21 	energy-saving goals for energy conservation improvement expenditures improvements and 
17.22 	shall evaluate an energy conservation improvement program on how well it meets the goals 
17.23 	set.
17.24 	(b) Each individualA public utility and association shall have providing electric service 
17.25 	has an annual energy-savings goal equivalent to 1.5 1.75 percent of gross annual retail 
17.26 	energy sales unless modified by the commissioner under paragraph (d).(c). A public utility 
17.27 	providing natural gas service has an annual energy-savings goal equivalent to one percent 
17.28 	of gross annual retail energy sales, which cannot be lowered by the commissioner. The 
17.29 	savings goals must be calculated based on the most recent three-year weather-normalized 
17.30 	average. A public utility or association providing electric service may elect to carry forward 
17.31 	energy savings in excess of 1.5 1.75 percent for a year to the succeeding three calendar 
17.32 	years, except that savings from electric utility infrastructure projects allowed under paragraph 
17.33 	(d) may be carried forward for five years. A public utility providing natural gas service may 
18.1 	elect to carry forward energy savings in excess of one percent for a year to the succeeding 
18.2 	three calendar years. A particular energy savings can only be used only for to meet one 
18.3 	year's goal.
18.4 	(c) The commissioner must adopt a filing schedule that is designed to have all utilities 
18.5 	and associations operating under an energy-savings plan by calendar year 2010.
18.6 	(d) (c) In its energy conservation improvement and optimization plan filing, a public 
18.7 	utility or association may request the commissioner to adjust its annual energy-savings 
18.8 	percentage goal based on its historical conservation investment experience, customer class 
18.9 	makeup, load growth, a conservation potential study, or other factors the commissioner 
18.10 	determines warrants an adjustment.
18.11 	(d) The commissioner may not approve a plan of a public utility that provides for an 
18.12 	annual energy-savings goal of less than one percent of gross annual retail energy sales from 
18.13 	energy conservation improvements.
18.14 	A utility or association may include in its energy conservation plan energy savings from
18.15 	The balance of the 1.75 percent annual energy savings goal may be achieved through energy 
18.16 	savings from:
18.17 	(1) additional energy conservation improvements;
18.18 	(2) electric utility infrastructure projects approved by the commission under section 
18.19 	216B.1636 or waste heat recovery converted into electricity projects that may count as 
18.20 	energy savings in addition to a minimum energy-savings goal of at least one percent for 
18.21 	energy conservation improvements. Energy savings from electric utility infrastructure 
18.22 	projects, as defined in section 216B.1636, may be included in the energy conservation plan 
18.23 	of a municipal utility or cooperative electric association. Electric utility infrastructure projects 
18.24 	must result in increased energy efficiency greater than that which would have occurred 
18.25 	through normal maintenance activity. that result in increased efficiency greater than would 
18.26 	have occurred through normal maintenance activity; or
18.27 	(3) subject to department approval, demand-side natural gas or electric energy displaced 
18.28 	by use of waste heat recovered and used as thermal energy, including the recovered thermal 
18.29 	energy from a cogeneration or combined heat and power facility.
18.30 	(e) An energy-savings goal is not satisfied by attaining the revenue expenditure 
18.31 	requirements of subdivisions 1a and 1b, but can only be satisfied by meeting the 
18.32 	energy-savings goal established in this subdivision.
19.1 	(f) An association or (e) A public utility is not required to make energy conservation 
19.2 	investments to attain the energy-savings goals of this subdivision that are not cost-effective 
19.3 	even if the investment is necessary to attain the energy-savings goals. For the purpose of 
19.4 	this paragraph, in determining cost-effectiveness, the commissioner shall consider: (1) the 
19.5 	costs and benefits to ratepayers, the utility, participants, and society. In addition, the 
19.6 	commissioner shall consider; (2) the rate at which an association or municipal a public
19.7 	utility is increasing both its energy savings and its expenditures on energy conservation; 
19.8 	and (3) the public utility's lifetime energy savings and cumulative energy savings.
19.9 	(g)(f) On an annual basis, the commissioner shall produce and make publicly available 
19.10 	a report on the annual energy and capacity savings and estimated carbon dioxide reductions 
19.11 	achieved by the energy conservation improvement programs under this section and section 
19.12 	216B.2403 for the two most recent years for which data is available. The report must also 
19.13 	include information regarding any annual energy sales or generation capacity increases 
19.14 	resulting from efficient fuel-switching improvements. The commissioner shall report on 
19.15 	program performance both in the aggregate and for each entity filing an energy conservation 
19.16 	improvement plan for approval or review by the commissioner, and must estimate progress 
19.17 	made toward the statewide energy-savings goal under section 216B.2401.
19.18 	(h) By January 15, 2010, the commissioner shall report to the legislature whether the 
19.19 	spending requirements under subdivisions 1a and 1b are necessary to achieve the 
19.20 	energy-savings goals established in this subdivision.
19.21 	(i) This subdivision does not apply to:
19.22 	(1) a cooperative electric association with fewer than 5,000 members;
19.23 	(2) a municipal utility with fewer than 1,000 retail electric customers; or
19.24 	(3) a municipal utility with less than 1,000,000,000 cubic feet in annual throughput sales 
19.25 	to retail natural gas customers.
19.26 	(g) Notwithstanding any provision to the contrary, until July 1, 2026, spending by a 
19.27 	public utility subject to this section on efficient fuel-switching improvements to meet energy 
19.28 	savings goals under this section must not exceed 0.35 percent per year, averaged over three 
19.29 	years, of the public utility's gross annual retail energy sales.

19.30 	EFFECTIVE DATE. This section is effective the day following final enactment.

20.1 	Sec. 7. Minnesota Statutes 2020, section 216B.241, subdivision 1d, is amended to read:
20.2 		Subd. 1d.Technical assistance. (a) The commissioner shall evaluate energy conservation 
20.3 	improvement programs filed under this section and section 216B.2403 on the basis of 
20.4 	cost-effectiveness and the reliability of the technologies employed. The commissioner shall, 
20.5 	by order, establish, maintain, and update energy-savings assumptions that must be used by 
20.6 	utilities when filing energy conservation improvement programs. The department must track 
20.7 	a public utility's or consumer-owned utility's lifetime energy savings and cumulative lifetime 
20.8 	energy savings reported in plans submitted under this section and section 216B.2403.
20.9 	(b) The commissioner shall establish an inventory of the most effective energy 
20.10 	conservation programs, techniques, and technologies, and encourage all Minnesota utilities 
20.11 	to implement them, where appropriate, in their service territories. The commissioner shall 
20.12 	describe these programs in sufficient detail to provide a utility reasonable guidance 
20.13 	concerning implementation. The commissioner shall prioritize the opportunities in order of 
20.14 	potential energy savings and in order of cost-effectiveness.
20.15 	(c) The commissioner may contract with a third party to carry out any of the 
20.16 	commissioner's duties under this subdivision, and to obtain technical assistance to evaluate 
20.17 	the effectiveness of any conservation improvement program.
20.18 	(d) The commissioner may assess up to $850,000 annually for the purposes of this 
20.19 	subdivision. The assessments must be deposited in the state treasury and credited to the 
20.20 	energy and conservation account created under subdivision 2a. An assessment made under 
20.21 	this subdivision is not subject to the cap on assessments provided by section 216B.62, or 
20.22 	any other law.
20.23 	(b) Of the assessment authorized under paragraph (a), the commissioner may expend 
20.24 	up to $400,000 annually for the purpose of developing, operating, maintaining, and providing 
20.25 	technical support for a uniform electronic data reporting and tracking system available to 
20.26 	all utilities subject to this section, in order to enable accurate measurement of the cost and 
20.27 	energy savings of the energy conservation improvements required by this section. This 
20.28 	paragraph expires June 30, 2018.
20.29 	(e) The commissioner must work with stakeholders to develop technical guidelines that 
20.30 	public utilities and consumer-owned utilities must use to:
20.31 	(1) determine whether deployment of a fuel-switching improvement meets the criteria 
20.32 	established in subdivision 11, paragraph (d); subdivision 12, paragraph (a); or section 
20.33 	216B.2403, subdivision 8, as applicable; and
21.1 	(2) calculate the amount of energy saved due to the deployment of a fuel-switching 
21.2 	improvement.
21.3 	The guidelines must be issued by the commissioner by order no later than March 15, 2022, 
21.4 	and must be updated as the commissioner determines is necessary.

21.5 	EFFECTIVE DATE. This section is effective the day following final enactment.

21.6 	Sec. 8. Minnesota Statutes 2020, section 216B.241, subdivision 1f, is amended to read:
21.7 		Subd. 1f.Facilities energy efficiency. (a) The commissioner of administration and the 
21.8 	commissioner of commerce shall maintain and, as needed, revise the sustainable building 
21.9 	design guidelines developed under section 16B.325.
21.10 	(b) The commissioner of administration and the commissioner of commerce shall maintain 
21.11 	and update the benchmarking tool developed under Laws 2001, chapter 212, article 1, section 
21.12 	3, so that all public buildings can use the benchmarking tool to maintain energy use 
21.13 	information for the purposes of establishing energy efficiency benchmarks, tracking building 
21.14 	performance, and measuring the results of energy efficiency and conservation improvements.
21.15 	(c) The commissioner shall require that utilities include in their conservation improvement 
21.16 	plans programs that facilitate professional engineering verification to qualify a building as 
21.17 	Energy Star-labeled, Leadership in Energy and Environmental Design (LEED) certified, or 
21.18 	Green Globes-certified. The state goal is to achieve certification of 1,000 commercial 
21.19 	buildings as Energy Star-labeled, and 100 commercial buildings as LEED-certified or Green 
21.20 	Globes-certified by December 31, 2010.
21.21 	(d) The commissioner may assess up to $500,000 annually for the purposes of this 
21.22 	subdivision. The assessments must be deposited in the state treasury and credited to the 
21.23 	energy and conservation account created under subdivision 2a. An assessment made under 
21.24 	this subdivision is not subject to the cap on assessments provided by section 216B.62, or 
21.25 	any other law.

21.26 	EFFECTIVE DATE. This section is effective the day following final enactment.

21.27 	Sec. 9. Minnesota Statutes 2020, section 216B.241, subdivision 1g, is amended to read:
21.28 		Subd. 1g.Manner of filing and service. (a) A public utility, generation and transmission 
21.29 	cooperative electric association, municipal power agency, cooperative electric association, 
21.30 	and municipal utility shall submit filings to the department via the department's electronic 
21.31 	filing system. The commissioner may approve an exemption from this requirement in the 
21.32 	event an affecteda public utility or association is unable to submit filings via the department's 
22.1 	electronic filing system. All other interested parties shall submit filings to the department 
22.2 	via the department's electronic filing system whenever practicable but may also file by 
22.3 	personal delivery or by mail.
22.4 	(b) Submission of a document to the department's electronic filing system constitutes 
22.5 	service on the department. Where department rule requires service of a notice, order, or 
22.6 	other document by the department, public utility, association, or interested party upon 
22.7 	persons on a service list maintained by the department, service may be made by personal 
22.8 	delivery, mail, or electronic service, except that electronic service may only be made upon 
22.9 	persons on the service list who have previously agreed in writing to accept electronic service 
22.10 	at an electronic address provided to the department for electronic service purposes.

22.11 	EFFECTIVE DATE. This section is effective the day following final enactment.

22.12 	Sec. 10. Minnesota Statutes 2020, section 216B.241, subdivision 2, is amended to read:
22.13 		Subd. 2.Programs Public utility; energy conservation and optimization plans. (a) 
22.14 	The commissioner may require a public utilities utility to make investments and expenditures 
22.15 	in energy conservation improvements, explicitly setting forth the interest rates, prices, and 
22.16 	terms under which the improvements must be offered to the customers. The required 
22.17 	programs must cover no more than a three-year period.
22.18 	(b) A public utilities utility shall file an energy conservation improvement plans and 
22.19 	optimization plan by June 1, on a schedule determined by order of the commissioner, but 
22.20 	at least every three years. Plans received As provided in subdivisions 11 to 13, plans may 
22.21 	include programs for efficient fuel-switching improvements and load management. An 
22.22 	individual utility program may combine elements of energy conservation, load management, 
22.23 	or efficient fuel-switching. The plan must estimate the lifetime energy savings and cumulative 
22.24 	lifetime energy savings projected to be achieved under the plan. A plan filed by a public 
22.25 	utility by June 1 must be approved or approved as modified by the commissioner by 
22.26 	December 1 of that same year.
22.27 	(c) The commissioner shall evaluate the program plan on the basis of cost-effectiveness 
22.28 	and the reliability of technologies employed. The commissioner's order must provide to the 
22.29 	extent practicable for a free choice, by consumers participating in the an energy conservation
22.30 	program, of the device, method, material, or project constituting the energy conservation 
22.31 	improvement and for a free choice of the seller, installer, or contractor of the energy 
22.32 	conservation improvement, provided that the device, method, material, or project seller, 
22.33 	installer, or contractor is duly licensed, certified, approved, or qualified, including under 
22.34 	the residential conservation services program, where applicable.
23.1 	(b) (d) The commissioner may require a utility subject to subdivision 1c to make an 
23.2 	energy conservation improvement investment or expenditure whenever the commissioner 
23.3 	finds that the improvement will result in energy savings at a total cost to the utility less than 
23.4 	the cost to the utility to produce or purchase an equivalent amount of new supply of energy. 
23.5 	The commissioner shall nevertheless ensure that every public utility operate one or more 
23.6 	programs under periodic review by the department.
23.7 	(c) (e) Each public utility subject to this subdivision 1a may spend and invest annually 
23.8 	up to ten percent of the total amount required to be spent and invested on energy conservation 
23.9 	improvements under this section by the public utility on research and development projects 
23.10 	that meet the definition of energy conservation improvement in subdivision 1 and that are 
23.11 	funded directly by the public utility.
23.12 	(d) A public utility may not spend for or invest in energy conservation improvements 
23.13 	that directly benefit a large energy facility or a large electric customer facility for which the 
23.14 	commissioner has issued an exemption pursuant to subdivision 1a, paragraph (b).
23.15 	(f) The commissioner shall consider and may require a public utility to undertake a an 
23.16 	energy conservation program suggested by an outside source, including a political 
23.17 	subdivision, a nonprofit corporation, or community organization.
23.18 	(e) (g) A public utility, a political subdivision, or a nonprofit or community organization 
23.19 	that has suggested a an energy conservation program, the attorney general acting on behalf 
23.20 	of consumers and small business interests, or a public utility customer that has suggested a
23.21 	an energy conservation program and is not represented by the attorney general under section 
23.22 	8.33 may petition the commission to modify or revoke a department decision under this 
23.23 	section, and the commission may do so if it determines that the energy conservation program 
23.24 	is not cost-effective, does not adequately address the residential conservation improvement 
23.25 	needs of low-income persons, has a long-range negative effect on one or more classes of 
23.26 	customers, or is otherwise not in the public interest. The commission shall reject a petition 
23.27 	that, on its face, fails to make a reasonable argument that a an energy conservation program 
23.28 	is not in the public interest.
23.29 	(f) (h) The commissioner may order a public utility to include, with the filing of the 
23.30 	public utility's annual status report, the results of an independent audit of the public utility's 
23.31 	conservation improvement programs and expenditures performed by the department or an 
23.32 	auditor with experience in the provision of energy conservation and energy efficiency 
23.33 	services approved by the commissioner and chosen by the public utility. The audit must 
23.34 	specify the energy savings or increased efficiency in the use of energy within the service 
24.1 	territory of the public utility that is the result of the public utility's spending and investments. 
24.2 	The audit must evaluate the cost-effectiveness of the public utility's conservation programs.
24.3 	(g) A gas utility may not spend for or invest in energy conservation improvements that 
24.4 	directly benefit a large customer facility or commercial gas customer facility for which the 
24.5 	commissioner has issued an exemption pursuant to subdivision 1a, paragraph (b), (c), or 
24.6 	(e). The commissioner shall consider and may require a utility to undertake a program 
24.7 	suggested by an outside source, including a political subdivision, a nonprofit corporation, 
24.8 	or a community organization.
24.9 	(i) The energy conservation and optimization plan of each public utility subject to this 
24.10 	section must include activities to improve energy efficiency in public schools served by the 
24.11 	utility. As applicable to each public utility, at a minimum the activities must include programs 
24.12 	to increase the efficiency of the school's lighting and heating and cooling systems, and to 
24.13 	provide for building recommissioning, building operator training, and opportunities to 
24.14 	educate students, teachers, and staff regarding energy efficiency measures implemented at 
24.15 	the school.
24.16 	(j) The commissioner may require investments or spending greater than the amounts 
24.17 	proposed in a plan filed under this subdivision or section 216C.17 for a public utility whose 
24.18 	most recent advanced forecast required under section 216B.2422 projects a peak demand 
24.19 	deficit of 100 megawatts or more within five years under midrange forecast assumptions.
24.20 	(k) A public utility filing a conservation and optimization plan that includes an efficient 
24.21 	fuel-switching program to achieve the utility's energy savings goal must, as part of the filing, 
24.22 	demonstrate by a comparison of greenhouse gas emissions between the fuels that the 
24.23 	requirements of subdivisions 11 or 12 are met, as applicable, using a full fuel-cycle energy 
24.24 	analysis.

24.25 	EFFECTIVE DATE. This section is effective the day following final enactment.

24.26 	Sec. 11. Minnesota Statutes 2020, section 216B.241, subdivision 2b, is amended to read:
24.27 		Subd. 2b.Recovery of expenses. (a) The commission shall allow a public utility to 
24.28 	recover expenses resulting from a an energy conservation improvement program required
24.29 	and optimization plan approved by the department under this section and contributions and 
24.30 	assessments to the energy and conservation account, unless the recovery would be 
24.31 	inconsistent with a financial incentive proposal approved by the commission. The commission 
24.32 	shall allow a cooperative electric association subject to rate regulation under section 
24.33 	216B.026, to recover expenses resulting from energy conservation improvement programs, 
25.1 	load management programs, and assessments and contributions to the energy and 
25.2 	conservation account unless the recovery would be inconsistent with a financial incentive 
25.3 	proposal approved by the commission. In addition,
25.4 	(b) A public utility may file annually, or the Public Utilities Commission may require 
25.5 	the public utility to file, and the commission may approve, rate schedules containing 
25.6 	provisions for the automatic adjustment of charges for utility service in direct relation to 
25.7 	changes in the expenses of the public utility for real and personal property taxes, fees, and 
25.8 	permits, the amounts of which the public utility cannot control. A public utility is eligible 
25.9 	to file for adjustment for real and personal property taxes, fees, and permits under this 
25.10 	subdivision only if, in the year previous to the year in which it files for adjustment, it has 
25.11 	spent or invested at least 1.75 percent of its gross revenues from provision of electric service, 
25.12 	excluding gross operating revenues from electric service provided in the state to large electric 
25.13 	customer facilities for which the commissioner has issued an exemption under subdivision 
25.14 	1a, paragraph (b), and 0.6 percent of its gross revenues from provision of gas service, 
25.15 	excluding gross operating revenues from gas services provided in the state to large electric 
25.16 	customer facilities for which the commissioner has issued an exemption under subdivision 
25.17 	1a, paragraph (b), for that year for energy conservation improvements under this section.

25.18 	EFFECTIVE DATE. This section is effective the day following final enactment.

25.19 	Sec. 12. Minnesota Statutes 2020, section 216B.241, subdivision 3, is amended to read:
25.20 		Subd. 3.Ownership of preweatherization measure or energy conservation 
25.21 	improvement. An (a) A preweatherization measure or energy conservation improvement 
25.22 	made to or installed in a building in accordance with this section, except systems owned by 
25.23 	thea public utility and designed to turn off, limit, or vary the delivery of energy, are the 
25.24 	exclusive property of the owner of the building except to the extent that the improvement 
25.25 	is subjected to a security interest in favor of the public utility in case of a loan to the building 
25.26 	owner.
25.27 	The(b) A public utility has no liability for loss, damage or injury caused directly or 
25.28 	indirectly by an a preweatherization measure or energy conservation improvement except 
25.29 	for negligence by the utility in purchase, installation, or modification of the product.
25.30 	purchasing, installing, or modifying a preweatherization measure or energy conservation 
25.31 	improvement.

26.1 	Sec. 13. Minnesota Statutes 2020, section 216B.241, subdivision 5, is amended to read:
26.2 		Subd. 5.Efficient lighting program. (a) Each public utility, cooperative electric 
26.3 	association, and municipal and consumer-owned utility that provides electric service to 
26.4 	retail customers and is subject to subdivision 1c or section 216B.2403 shall include as part 
26.5 	of its conservation improvement activities a program to strongly encourage the use of LED 
26.6 	lamps LEDs. The program must include at least a public information campaign to encourage 
26.7 	use of LED lamps LEDs and proper management of spent lamps and LEDs by all customer 
26.8 	classifications.
26.9 	(b) A public utility that provides electric service at retail to 200,000 or more customers 
26.10 	shall establish, either directly or through contracts with other persons, including lamp 
26.11 	manufacturers, distributors, wholesalers, and retailers and local government units, a system 
26.12 	to collect for delivery to a reclamation or recycling facility spent fluorescent and 
26.13 	high-intensity discharge lamps from households and from small businesses as defined in 
26.14 	section 645.445 that generate an average of fewer than ten spent lamps per year.
26.15 	(c) A collection system must include establishing reasonably convenient locations for 
26.16 	collecting spent lamps from households and financial incentives sufficient to encourage 
26.17 	spent lamp generators to take the lamps to the collection locations. Financial incentives may 
26.18 	include coupons for purchase of new LED lamps LEDs, a cash back system, or any other 
26.19 	financial incentive or group of incentives designed to collect the maximum number of spent 
26.20 	lamps from households and small businesses that is reasonably feasible.
26.21 	(d) A public utility that provides electric service at retail to fewer than 200,000 customers, 
26.22 	a cooperative electric association, or a municipal or a consumer-owned utility that provides 
26.23 	electric service at retail to customers may establish a collection system under paragraphs 
26.24 	(b) and (c) as part of conservation improvement activities required under this section.
26.25 	(e) The commissioner of the Pollution Control Agency may not, unless clearly required 
26.26 	by federal law, require a public utility, cooperative electric association, or municipality or 
26.27 	consumer-owned utility that establishes a household fluorescent and high-intensity discharge 
26.28 	lamp collection system under this section to manage the lamps as hazardous waste as long 
26.29 	as the lamps are managed to avoid breakage and are delivered to a recycling or reclamation 
26.30 	facility that removes mercury and other toxic materials contained in the lamps prior to 
26.31 	placement of the lamps in solid waste.
26.32 	(f) If a public utility, cooperative electric association, or municipal or consumer-owned
26.33 	utility contracts with a local government unit to provide a collection system under this 
27.1 	subdivision, the contract must provide for payment to the local government unit of all the 
27.2 	unit's incremental costs of collecting and managing spent lamps.
27.3 	(g) All the costs incurred by a public utility, cooperative electric association, or municipal
27.4 	or consumer-owned utility to promote the use of LED lamps LEDs and to collect fluorescent 
27.5 	and high-intensity discharge lamps collect LEDs under this subdivision are conservation 
27.6 	improvement spending under this section.
27.7 	(h) For the purposes of this subdivision, "LED lamp" "LED" means a light-emitting 
27.8 	diode lamp that consists of a solid state device that emits visible light when an electric 
27.9 	current passes through a semiconductor bulb or lighting product.

27.10 	EFFECTIVE DATE. This section is effective the day following final enactment.

27.11 	Sec. 14. Minnesota Statutes 2020, section 216B.241, subdivision 7, is amended to read:
27.12 		Subd. 7.Low-income programs. (a) The commissioner shall ensure that each public 
27.13 	utility and association subject to subdivision 1c provides low-income energy conservation 
27.14 	and efficient fuel-switching programs to low-income households. When approving spending 
27.15 	and energy-savings goals for low-income programs, the commissioner shall consider historic 
27.16 	spending and participation levels, energy savings for achieved by low-income programs, 
27.17 	and the number of low-income persons residing in the utility's service territory. Beginning 
27.18 	January 1, 2022, a municipal utility that furnishes gas service must spend at least 0.2 percent, 
27.19 	and a public utility furnishing gas service must spend at least 0.4 one percent, of its most 
27.20 	recent three-year average gross operating revenue from residential customers in the state 
27.21 	on low-income programs. A public utility or association that furnishes electric service must 
27.22 	spend at least 0.10.4 percent of its gross operating revenue from residential customers in 
27.23 	the state on low-income programs. For a generation and transmission cooperative association, 
27.24 	this requirement shall apply to each association's members' aggregate gross operating revenue 
27.25 	from sale of electricity to residential customers in the state. Beginning in 2010 2024, a 
27.26 	public utility or association that furnishes electric service must spend 0.2 0.6 percent of its
27.27 	the public utility's gross operating revenue from residential customers in the state on 
27.28 	low-income programs.
27.29 	(b) To meet the requirements of paragraph (a), a public utility or association may 
27.30 	contribute money to the energy and conservation account established under subdivision 2a. 
27.31 	An energy conservation improvement plan must state the amount, if any, of low-income 
27.32 	energy conservation improvement funds the public utility or association will contribute to 
27.33 	the energy and conservation account. Contributions must be remitted to the commissioner 
27.34 	by February 1 of each year.
28.1 	(c) The commissioner shall establish low-income energy conservation programs to utilize 
28.2 	money contributed contributions made to the energy and conservation account under 
28.3 	paragraph (b). In establishing low-income programs, the commissioner shall consult political 
28.4 	subdivisions, utilities, and nonprofit and community organizations, especially organizations 
28.5 	engaged in providing energy and weatherization assistance to low-income persons
28.6 	households. Money contributed Contributions made to the energy and conservation account 
28.7 	under paragraph (b) must provide programs for low-income persons households, including 
28.8 	low-income renters, in the service territory of the public utility or association providing the 
28.9 	money. The commissioner shall record and report expenditures and energy savings achieved 
28.10 	as a result of low-income programs funded through the energy and conservation account in 
28.11 	the report required under subdivision 1c, paragraph (g) (f). The commissioner may contract 
28.12 	with a political subdivision, nonprofit or community organization, public utility, municipality,
28.13 	or cooperative electric association consumer-owned utility to implement low-income 
28.14 	programs funded through the energy and conservation account.
28.15 	(d) A public utility or association may petition the commissioner to modify its required 
28.16 	spending under paragraph (a) if the utility or association and the commissioner have been 
28.17 	unable to expend the amount required under paragraph (a) for three consecutive years.
28.18 	(e) Representatives of each public utility must participate in the stakeholder group on 
28.19 	multifamily building eligibility for low-income energy conservation programs, as provided 
28.20 	under section 216B.2403, subdivision 5, paragraph (e). Notwithstanding  the definition of 
28.21 	low-income household under section 216B.2402, a public utility may apply the most recent 
28.22 	guidelines for eligibility of multifamily buildings to participate in low-income energy 
28.23 	conservation programs published by the commissioner under section 216B.2403, subdivision 
28.24 	5, paragraph (e).
28.25 	(f) Up to 15 percent of a public utility's spending on low-income programs may be spent 
28.26 	on preweatherization measures. A public utility is prohibited from claiming energy savings 
28.27 	from preweatherization measures toward the public utility's energy savings goal.
28.28 	(g) The commissioner must, by order, establish a list of preweatherization measures 
28.29 	eligible for inclusion in low-income programs no later than March 15, 2022.
28.30 	(h) A public utility may elect to contribute money to the Healthy AIR account under 
28.31 	section 216B.2403, subdivision 5, paragraph (h), to provide preweatherization measures to 
28.32 	households eligible for weatherization assistance under section 216C.264. Remediation 
28.33 	activities must be executed in conjunction with federal weatherization assistance program 
28.34 	services. Money contributed to the account counts toward: (1) the minimum low-income 
29.1 	spending requirement in paragraph (a); and (2) the cap on preweatherization measures under 
29.2 	paragraph (f).
29.3 	(e) (i) The costs and benefits associated with any approved low-income gas or electric 
29.4 	conservation improvement program that is not cost-effective when considering the costs 
29.5 	and benefits to the public utility may, at the discretion of the utility, be excluded from the 
29.6 	calculation of net economic benefits for purposes of calculating the financial incentive to 
29.7 	the public utility. The energy and demand savings may, at the discretion of the public utility, 
29.8 	be applied toward the calculation of overall portfolio energy and demand savings for purposes 
29.9 	of determining progress toward annual goals and in the financial incentive mechanism.

29.10 	EFFECTIVE DATE. This section is effective the day following final enactment.

29.11 	Sec. 15. Minnesota Statutes 2020, section 216B.241, subdivision 8, is amended to read:
29.12 		Subd. 8.Assessment. The commission or department may assess public utilities subject 
29.13 	to this section in proportion to their respectiveto carry out the purposes of subdivisions 1d, 
29.14 	1e, and 1f. An assessment under this subdivision must be proportionate to a public utility's
29.15 	gross operating revenue from sales of gas or electric service within the state Minnesota
29.16 	during the last calendar year to carry out the purposes of subdivisions 1d, 1e, and 1f. Those 
29.17 	assessments, as applicable. Assessments made under this subdivision are not subject to the 
29.18 	cap on assessments provided by section 216B.62, or any other law.

29.19 	EFFECTIVE DATE. This section is effective the day following final enactment.

29.20 	Sec. 16. Minnesota Statutes 2020, section 216B.241, is amended by adding a subdivision 
29.21 	to read:
29.22 		Subd. 11.Programs for efficient fuel-switching improvements; electric utilities. (a) 
29.23 	A public utility providing electric service at retail may include in the plan required under 
29.24 	subdivision 2 programs to implement efficient fuel-switching improvements or combinations 
29.25 	of energy conservation improvements, fuel-switching improvements, and load management. 
29.26 	For each program, the public utility must provide a proposed budget, an analysis of the 
29.27 	program's cost-effectiveness, and estimated net energy and demand savings.
29.28 	(b) The department may approve proposed programs for efficient fuel-switching 
29.29 	improvements if the department determines the improvements meet the requirements of 
29.30 	paragraph (d). For fuel-switching improvements that require the deployment of electric 
29.31 	technologies, the department must also consider whether the fuel-switching improvement 
29.32 	can be operated in a manner that facilitates the integration of variable renewable energy 
30.1 	into the electric system. The net benefits from an efficient fuel-switching improvement that 
30.2 	is integrated with an energy efficiency program approved under this section may be counted 
30.3 	toward the net benefits of the energy efficiency program, if the department determines the 
30.4 	primary purpose and effect of the program is energy efficiency.
30.5 	(c) A public utility may file a rate schedule with the commission that provides for annual 
30.6 	cost recovery of reasonable and prudent costs to implement and promote efficient 
30.7 	fuel-switching programs. The commission may not approve a financial incentive to encourage 
30.8 	efficient fuel-switching programs operated by a public utility providing electric service.
30.9 	(d) A fuel-switching improvement is deemed efficient if, applying the technical criteria 
30.10 	established under section 216B.241, subdivision 1d, paragraph (e), the improvement meets 
30.11 	the following criteria, relative to the fuel that is being displaced:
30.12 	(1) results in a net reduction in the amount of source energy consumed for a particular 
30.13 	use, measured on a fuel-neutral basis;
30.14 	(2) results in a net reduction of statewide greenhouse gas emissions as defined in section 
30.15 	216H.01, subdivision 2, over the lifetime of the improvement. For an efficient fuel-switching 
30.16 	improvement installed by an electric utility, the reduction in emissions must be measured 
30.17 	based on the hourly emission profile of the electric utility, using the hourly emissions profile 
30.18 	in the most recent resource plan approved by the commission under section 216B.2422;
30.19 	(3) is cost-effective, considering the costs and benefits from the perspective of the utility, 
30.20 	participants, and society; and
30.21 	(4) is installed and operated in a manner that improves the utility's system load factor.
30.22 	(e) For purposes of this subdivision, "source energy" means the total amount of primary 
30.23 	energy required to deliver energy services, adjusted for losses in generation, transmission, 
30.24 	and distribution, and expressed on a fuel-neutral basis.

30.25 	EFFECTIVE DATE. This section is effective the day following final enactment.

30.26 	Sec. 17. Minnesota Statutes 2020, section 216B.241, is amended by adding a subdivision 
30.27 	to read:
30.28 		Subd. 12.Programs for efficient fuel-switching improvements; natural gas 
30.29 	utilities. (a) As part of a public utility's plan filed under subdivision 2, a public utility that 
30.30 	provides natural gas service to Minnesota retail customers may propose one or more programs 
30.31 	to install electric technologies that reduce the consumption of natural gas by the utility's 
30.32 	retail customers as an energy conservation improvement. The commissioner may approve 
31.1 	a proposed program if the commissioner, applying the technical criteria developed under 
31.2 	section 216B.241, subdivision 1d, paragraph (e), determines that:
31.3 	(1) the electric technology to be installed meets the criteria established under section 
31.4 	216B.241, subdivision 11, paragraph (d), clauses (1) and (2); and
31.5 	(2) the program is cost-effective, considering the costs and benefits to ratepayers, the 
31.6 	utility, participants, and society.
31.7 	(b) If a program is approved by the commission under this subdivision, the public utility 
31.8 	may count the program's energy savings toward its energy savings goal under section 
31.9 	216B.241, subdivision 1c. Notwithstanding section 216B.2402, subdivision 4, efficient 
31.10 	fuel-switching achieved through programs approved under this subdivision is energy 
31.11 	conservation.
31.12 	(c) A public utility may file rate schedules with the commission that provide annual 
31.13 	cost-recovery for programs approved by the department under this subdivision, including 
31.14 	reasonable and prudent costs to implement and promote the programs.
31.15 	(d) The commission may approve, modify, or reject a proposal made by the department 
31.16 	or a utility for an incentive plan to encourage efficient fuel-switching programs approved 
31.17 	under this subdivision, applying the considerations established under section 216B.16, 
31.18 	subdivision 6c, paragraphs (b) and (c). The commission may approve a financial incentive 
31.19 	mechanism that is calculated based on the combined energy savings and net benefits that 
31.20 	the commission has determined have been achieved by a program approved under this 
31.21 	subdivision, provided the commission determines that the financial incentive mechanism 
31.22 	is in the ratepayers' interest.
31.23 	(e) A public utility is not eligible for a financial incentive for an efficient fuel-switching 
31.24 	program under this subdivision in any year in which the utility achieves energy savings 
31.25 	below one percent of gross annual retail energy sales, excluding savings achieved through 
31.26 	fuel-switching programs.

31.27 	EFFECTIVE DATE. This section is effective the day following final enactment.

31.28 	Sec. 18. Minnesota Statutes 2020, section 216B.241, is amended by adding a subdivision 
31.29 	to read:
31.30 		Subd. 13.Cost-effective load management programs. (a) A public utility may include 
31.31 	in the utility's plan required under subdivision 2 programs to implement load management 
31.32 	activities, or combinations of energy conservation improvements, fuel-switching 
31.33 	improvements, and load management activities. For each program the public utility must 
32.1 	provide a proposed budget, cost-effectiveness analysis, and estimated net energy and demand 
32.2 	savings.
32.3 	(b) The commissioner may approve a proposed program if the commissioner determines 
32.4 	the program is cost-effective, considering the costs and benefits to ratepayers, the utility, 
32.5 	participants, and society.
32.6 	(c) A public utility providing retail electric service to Minnesota customers may file rate 
32.7 	schedules with the commission that provide for annual cost recovery of reasonable and 
32.8 	prudent costs incurred to implement and promote cost-effective load management programs 
32.9 	approved by the department under this subdivision.
32.10 	(d) The commission may approve, modify, or reject a proposal made by the department 
32.11 	or a public utility for an incentive plan to encourage investments in load management 
32.12 	programs. The commission may approve a proposal that the commission determines:
32.13 	(1) is needed to increase the public utility's investment in cost-effective load management;
32.14 	(2) is compatible with the interest of the public utility's ratepayers; and
32.15 	(3) links the incentive to the public utility's performance in achieving cost-effective load 
32.16 	management.
32.17 	(e) The commission may structure an incentive plan to encourage cost-effective load 
32.18 	management programs as an asset on which a public utility earns a rate of return at a level 
32.19 	the commission determines is reasonable and in the public interest.
32.20 	(f) The commission may include the net benefits from a load management activity 
32.21 	integrated with an energy efficiency program approved under this section in the net benefits 
32.22 	of the energy efficiency program for purposes of a financial incentive program under section 
32.23 	216B.16, subdivision 6c, if the department determines the primary purpose of the load 
32.24 	management activity is energy efficiency.
32.25 	(g) A public utility is not eligible for a financial incentive for a load management program 
32.26 	in any year in which the utility achieves energy savings below one percent of gross annual 
32.27 	retail energy sales, excluding savings achieved through load management programs.
32.28 	(h) The commission may include net benefits from a particular load management activity 
32.29 	in an incentive plan under this subdivision or section 216B.16, subdivision 6c, but not both.

32.30 	EFFECTIVE DATE. This section is effective the day following final enactment.

33.1 	Sec. 19. REPEALER.
 33.2 	Minnesota Statutes 2020, section 216B.241, subdivisions 1, 1b, 2c, 4, and 10, are 
33.3 	repealed.

33.4 	EFFECTIVE DATE. This section is effective the day following final enactment.
33.5 	Delete the title and insert:
33.6 	A bill for an act
33.7 	relating to energy; establishing an Energy Conservation and Optimization Act of 
33.8 	2021;amending Minnesota Statutes 2020, sections 216B.2401; 216B.241, 
33.9 	subdivisions 1a, 1c, 1d, 1f, 1g, 2, 2b, 3, 5, 7, 8, by adding subdivisions; proposing 
33.10 	coding for new law in Minnesota Statutes, chapter 216B; repealing Minnesota 
33.11 	Statutes 2020, section 216B.241, subdivisions 1, 1b, 2c, 4, 10.

34.1	We request the adoption of this report and repassage of the bill.
	
34.2	House Conferees:
........			
34.3	........
		........
	
34.4	Zack Stephenson
		Jamie Long
	
34.5	........
			
34.6	Jordan Rasmusson
			
34.7	Senate Conferees:
........			
34.8	........
		........
	
34.9	Jason Rarick
		David Osmek
	
34.10	........
			
34.11	Nick Frentz