HF 1833

1st Division Engrossment - 91st Legislature (2019 - 2020) Posted on 04/05/2019 10:45am

A bill for an act
relating to energy; modifying and establishing various provisions governing energy
policy and finance; strengthening requirements for clean energy and energy
conservation in Minnesota; appropriating money; requiring reports; amending
Minnesota Statutes 2018, sections 13.685; 116C.7792; 216B.16, subdivision 13,
by adding a subdivision; 216B.1641; 216B.1645, subdivisions 1, 2; 216B.1691,
subdivisions 1, 2b, 9, by adding a subdivision; 216B.2401; 216B.241, subdivisions
1a, 1c, 1d, 1f, 2, 2b, 3, 5, 7, 9, by adding a subdivision; 216B.2422, subdivisions
1, 2, 3, 4, 5, by adding subdivisions; 216B.243, subdivisions 3, 3a; 216C.435,
subdivisions 3a, 8; 216C.436, subdivision 4, by adding a subdivision; 216F.04;
216F.08; 326B.106, by adding a subdivision; proposing coding for new law in
Minnesota Statutes, chapters 216B; 216C; repealing Minnesota Statutes 2018,
section 216B.241, subdivisions 1, 2c, 4.

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

Section 1.

Minnesota Statutes 2018, section 13.685, is amended to read:

13.685 MUNICIPAL UTILITY CUSTOMER DATA.

Data on customers of municipal electric utilities are private data on individuals or
nonpublic data, but may be released to:

(1) a law enforcement agency that requests access to the data in connection with an
investigation;

(2) a school for purposes of compiling pupil census data;

(3) the Metropolitan Council for use in studies or analyses required by law;

(4) a public child support authority for purposes of establishing or enforcing child support;
deleted text begin or
deleted text end

new text begin (5) a person authorized to receive the data under section 216B.078; or
new text end

deleted text begin (5) deleted text end new text begin (6) new text end a person where use of the data directly advances the general welfare, health, or
safety of the public; the commissioner of administration may issue advisory opinions
construing this clause pursuant to section 13.072.

Sec. 2.

Minnesota Statutes 2018, section 116C.7792, is amended to read:

116C.7792 SOLAR ENERGY INCENTIVE PROGRAM.

The utility subject to section 116C.779 shall operate a program to provide solar energy
production incentives for solar energy systems of no more than a total aggregate nameplate
capacity of 40 kilowatts deleted text begin direct deleted text end new text begin alternating new text end current per premise. The owner of a solar energy
system installed before June 1, 2018, is eligible to receive a production incentive under this
section for any additional solar energy systems constructed at the same customer location,
provided that the aggregate capacity of all systems at the customer location does not exceed
40 kilowatts. The program shall be operated for deleted text begin eight deleted text end new text begin nine new text end consecutive calendar years
commencing in 2014. $5,000,000 shall be allocated in each of the first four years,
$15,000,000 in new text begin each of new text end the fifth deleted text begin year, $10,000,000 deleted text end new text begin and sixth years, $14,000,000 new text end in each of
the deleted text begin sixth and deleted text end seventh new text begin and eighth new text end years, and $5,000,000 in the deleted text begin eighth deleted text end new text begin ninth new text end year from funds
withheld from transfer to the renewable development account under section 116C.779,
subdivision 1, paragraphs (b) and (e), and placed in a separate account for the purpose of
the solar production incentive program operated by the utility and not for any other program
or purpose. Any unspent amount allocated in the fifth year is available until December 31
of the sixth year. Any unspent amount remaining at the end of any other allocation year
must be transferred to the renewable development account. The solar system must be sized
to less than 120 percent of the customer's on-site annual energy consumption when combined
with other distributed generation resources and subscriptions provided under section
216B.1641 associated with the premise. The production incentive must be paid for ten years
commencing with the commissioning of the system. The utility must file a plan to operate
the program with the commissioner of commerce. The utility may not operate the program
until it is approved by the commissioner. A change to the program to include projects up
to a nameplate capacity of 40 kilowatts or less does not require the utility to file a plan with
the commissioner. Any plan approved by the commissioner of commerce must not provide
an increased incentive scale over prior years unless the commissioner demonstrates that
changes in the market for solar energy facilities require an increase.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

new text begin [216B.078] CUSTOMER ENERGY DATA.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Customer" means a person contracting for or purchasing electric or natural gas
service from a utility.
new text end

new text begin (c) "Customer data" means all data a utility collects, creates, receives, or maintains in
which a customer is identified or can be identified as the subject of the data. Customer data
includes energy usage data.
new text end

new text begin (d) "Energy usage data" means a customer's account information and the data a utility
collects from the customer's meter that reflects the quantity, quality, or timing of the
customer's natural gas use, electricity use, or electricity production. Customer energy usage
data includes but is not limited to data regarding:
new text end

new text begin (1) the amount and timing of energy use and production;
new text end

new text begin (2) energy outages, frequency, intermittency, or shutoffs;
new text end

new text begin (3) pricing and rate data applicable to the customer; and
new text end

new text begin (4) any other energy usage data used to calculate the customer's bill.
new text end

new text begin (e) "Summary energy usage data" means statistical records and reports derived from
energy usage data that do not contain a customer's personally identifiable information.
new text end

new text begin (f) "Personally identifiable information" means any data in which a customer is identified
or can be identified as the subject of the data.
new text end

new text begin (g) "Third party" means a person, other than a customer, who requests customer energy
usage data or summary energy usage data from the utility that maintains the data.
new text end

new text begin (h) "Utility" means a public utility, retail municipal utility, or retail cooperative
association that provides electric or natural gas service to Minnesota customers.
new text end

new text begin Subd. 2. new text end

new text begin Customer access to energy usage data. new text end

new text begin (a) A utility must provide a customer
with access to the customer's own energy usage data.
new text end

new text begin (b) Access must be convenient for the typical customer. A utility's procedure to access
energy usage data must be user-friendly. The utility must present the energy usage data in
a format comprehensible to the typical customer.
new text end

new text begin (c) A utility must provide access to energy usage data in as close to real-time as
practicable.
new text end

new text begin (d) Access to energy usage data must be provided free of charge to the customer, except
that a utility may charge a fee if a customer requests access to energy usage data in a format
or standard that differs from the format or standard the utility generally offers to customers.
new text end

new text begin (e) A utility must notify a customer if it substantially modifies the customer's energy
usage data. The notification must include a detailed explanation of the changes made to the
customer's energy usage data.
new text end

new text begin Subd. 3. new text end

new text begin Third-party access to energy usage data. new text end

new text begin (a) If a customer provides
authorization, a utility must provide one or more third parties with access to the customer's
energy usage data.
new text end

new text begin (b) The procedure a utility uses to allow a customer to authorize third-party access to
energy usage data must be (1) convenient for the typical customer, and (2) available on the
utility's website and in physical form by mail.
new text end

new text begin (c) The scope of the authorization may limit a third party's access to specific elements
of the customer's energy usage data.
new text end

new text begin (d) An authorization to access energy usage data is valid for the period of time specified
in the written authorization. An authorization may include a period without a specified end
date.
new text end

new text begin (e) A customer may revoke an authorization for third-party access at any time. The
utility's procedure to revoke authorization must be (1) convenient for the typical customer,
and (2) available on the utility's website and in physical form by mail.
new text end

new text begin (f) Subject to the scope of the authorization, an authorized third party must have the
same level of access to the customer's energy usage data as the customer.
new text end

new text begin (g) To the extent a third party with access to energy usage data under this subdivision
maintains the data independent of the utility providing access, the third party is subject to
the data security and privacy requirements under subdivision 6.
new text end

new text begin Subd. 4. new text end

new text begin Public access to summary energy data. new text end

new text begin (a) A utility must prepare and make
available summary energy usage data upon the written request of any person. The procedure
a utility uses to allow a person to request summary energy data must be (1) convenient for
the typical customer, and (2) available on the utility's website. A utility may charge the
requester a fee to prepare and supply summary energy data.
new text end

new text begin (b) Summary energy usage data provided under this subdivision may include aggregated
sets of customer energy usage data from no less than 15 customers. A single customer's
energy use must not constitute more than 15 percent of total energy consumption for the
requested data set. Summary energy usage data may be disaggregated on a per-customer
basis, provided that the customer's identity is not ascertainable.
new text end

new text begin (c) Within ten days of the date a request for summary energy data is received, a utility
must respond by providing the requester with:
new text end

new text begin (1) the summary energy data requested or a reference to responsive summary energy
data published under paragraph (d);
new text end

new text begin (2) a written statement that describes any fee charged and a time schedule for preparing
the requested summary energy data, including reasons for any time delays; or
new text end

new text begin (3) a written statement stating reasons why the utility has determined the requested
summary energy data cannot be prepared.
new text end

new text begin (d) A utility may make summary energy data publicly available on its website.
new text end

new text begin Subd. 5. new text end

new text begin Fees charged for data. new text end

new text begin A utility charging a data access fee authorized by this
section must:
new text end

new text begin (1) base the fee amount on the actual costs incurred by the utility to create and deliver
the requested data;
new text end

new text begin (2) consider the reasonable value to the utility of the data prepared and, if appropriate,
reduce the fee assessed to the requesting person;
new text end

new text begin (3) provide the requesting person with an estimate and explanation of the fee; and
new text end

new text begin (4) collect the fee before preparing or supplying the requested data.
new text end

new text begin Subd. 6. new text end

new text begin Data security and privacy. new text end

new text begin (a) A utility must establish appropriate,
industry-standard safeguards to protect the security of energy usage data it maintains. A
utility is prohibited from selling, sharing, licensing, or disseminating energy usage data,
except as authorized under this section or by state or federal law.
new text end

new text begin (b) Utilities must implement risk management practices to protect customer data. Risk
management practices must include but are not limited to practices that:
new text end

new text begin (1) identify, analyze, and mitigate cybersecurity risks to customer data;
new text end

new text begin (2) reasonably protect against loss and unauthorized use, access, or dissemination of
customer data;
new text end

new text begin (3) implement employee training measures to preserve data integrity; and
new text end

new text begin (4) maintain a comprehensive data breach response program to identify, mitigate, and
resolve an incident that causes or results in the unauthorized use, access, or dissemination
of customer data. The data breach response program must provide for complete, accurate,
and timely notice to customers whose customer data may have been compromised.
new text end

new text begin (c) If a utility uses a third-party service to maintain or store customer data, the utility
must ensure that the third-party service implements risk management practices that meet
the requirements under paragraph (b).
new text end

new text begin Subd. 7. new text end

new text begin Enforcement. new text end

new text begin The commissioner may enforce this section as provided under
section 45.027.
new text end

Sec. 4.

Minnesota Statutes 2018, section 216B.16, is amended by adding a subdivision to
read:

new text begin Subd. 7e. new text end

new text begin Energy storage system pilot projects. new text end

new text begin (a) A public utility may petition the
commission under this section to recover costs associated with implementing an energy
storage system pilot project. As part of the petition, the public utility must submit a report
to the commission containing, at a minimum, the following information regarding the
proposed energy storage system pilot project:
new text end

new text begin (1) the storage technology utilized;
new text end

new text begin (2) the energy storage capacity and the duration of output at that capacity;
new text end

new text begin (3) the proposed location;
new text end

new text begin (4) the purchase and installation costs;
new text end

new text begin (5) how the project will interact with existing distributed generation resources on the
utility's grid; and
new text end

new text begin (6) the goals the project proposes to achieve, which may include controlling frequency
or voltage, mitigating transmission congestion, providing emergency power supplies during
outages, reducing curtailment of existing renewable energy generators, and reducing peak
power costs.
new text end

new text begin (b) A utility may petition the commission to approve a rate schedule that provides for
the automatic adjustment of charges to recover prudently incurred investments, expenses,
or costs associated with energy storage system pilot projects approved by the commission
under this subdivision. A petition filed under this subdivision must include the elements
listed in section 216B.1645, subdivision 2a, paragraph (b), clauses (1) to (4), and must
describe the benefits of the pilot project.
new text end

new text begin (c) The commission may approve, or approve as modified, a rate schedule filed under
this subdivision. The rate schedule filed by the public utility may include the elements listed
in section 216B.1645, subdivision 2a, paragraph (a), clauses (1) to (5).
new text end

new text begin (d) For each pilot project that the commission has determined is in the public interest,
the commission must determine the specific amounts that are eligible for recovery under
the approved rate schedule within 90 days of the date the specific pilot program receives
final approval or within 90 days of the date the public utility files for approval of cost
recovery for the specific pilot program, whichever is later.
new text end

new text begin (e) Nothing in this subdivision prohibits or deters the deployment of energy storage
systems.
new text end

new text begin (f) For the purposes of this subdivision:
new text end

new text begin (1) "energy storage system" has the meaning given in section 216B.2422, subdivision
1; and
new text end

new text begin (2) "pilot project" means a project that is (i) owned, operated, and controlled by a public
utility to optimize safe and reliable system operations, and (ii) deployed at a limited number
of locations in order to assess the technical and economic effectiveness of its operations.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2018, section 216B.16, subdivision 13, is amended to read:

Subd. 13.

Economic and community development.

The commission may allow a
public utility to recover from ratepayers the expenses incurred new text begin (1) new text end for economic and
community development new text begin , and (2) to employ local workers to construct and maintain
generation facilities that supply power to the utility's customers new text end .

Sec. 6.

Minnesota Statutes 2018, section 216B.1641, is amended to read:

216B.1641 COMMUNITY SOLAR GARDEN.

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Subscriber" means a retail customer of a utility who owns one or more subscriptions
to a community solar garden interconnected with that utility.
new text end

new text begin (c) "Subscription" means a contract between a subscriber and the owner of a community
solar garden.
new text end

new text begin Subd. 2. new text end

new text begin Solar garden; project requirements. new text end

(a) The public utility subject to section
116C.779 shall file by September 30, 2013, a plan with the commission to operate a
community solar garden program which shall begin operations within 90 days after
commission approval of the plan. Other public utilities may file an application at their
election. The community solar garden program must be designed to offset the energy use
of not less than five subscribers in each community solar garden facility of which no single
subscriber has more than a 40 percent interest. The owner of the community solar garden
may be a public utility or any other entity or organization that contracts to sell the output
from the community solar garden to the utility under section 216B.164. There shall be no
limitation on the number or cumulative generating capacity of community solar garden
facilities other than the limitations imposed under section 216B.164, subdivision 4c, or
other limitations provided in law or regulations.

(b) A solar garden is a facility that generates electricity by means of a ground-mounted
or roof-mounted solar photovoltaic device whereby subscribers receive a bill credit for the
electricity generated in proportion to the size of their subscription. The solar garden must
have a nameplate capacity of no more than deleted text begin one megawatt deleted text end new text begin three megawatts new text end . Each subscription
shall be sized to represent at least 200 watts of the community solar garden's generating
capacity and to supply, when combined with other distributed generation resources serving
the premises, no more than 120 percent of the average annual consumption of electricity
by each subscriber at the premises to which the subscription is attributed.

(c) The solar generation facility must be located in the service territory of the public
utility filing the plan. Subscribers must be retail customers of the public utility new text begin . Subscribers
must be new text end located in the same county new text begin as the solar garden new text end or new text begin in new text end a new text begin contiguous new text end county deleted text begin contiguous
to where the facility is located. deleted text end new text begin , unless:
new text end

new text begin (1) the solar garden has a minimum setback of 100 feet from the nearest residential
property; and
new text end

new text begin (2) the owner or operator of the solar garden provides written certification to the
commission that at least ten percent of the solar garden's electric generating capacity is
reserved for residential subscribers.
new text end

(d) The public utility must purchase from the community solar garden all energy generated
by the solar garden. new text begin Except as provided under subdivision 7, new text end the purchase shall be at the
new text begin most recent three-year average of the new text end rate calculated new text begin annually new text end under section 216B.164,
subdivision 10, or, until that rate for the public utility has been approved by the commission,
the applicable retail rate. A solar garden is eligible for any incentive programs offered under
deleted text begin either deleted text end section 116C.7792 deleted text begin or section 216C.415 deleted text end . A subscriber's portion of the purchase shall
be provided by a credit on the subscriber's bill.

new text begin (e) Beginning January 1, 2020, any solar garden application filed with a utility must
certify that all workers constructing the solar garden will be paid at the prevailing wage
rate, as defined in section 177.42, subdivision 6.
new text end

new text begin Subd. 3. new text end

new text begin Solar garden plan; requirements; nonutility status. new text end

deleted text begin (e) deleted text end new text begin (a) new text end The commission
may approve, disapprove, or modify a community solar garden deleted text begin program deleted text end new text begin plan new text end . Any plan
approved by the commission must:

(1) reasonably allow for the creation, financing, and accessibility of community solar
gardens;

(2) establish uniform standards, fees, and processes for the interconnection of community
solar garden facilities that allow the utility to recover reasonable interconnection costs for
each community solar garden;

(3) not apply different requirements to utility and nonutility community solar garden
facilities;

(4) be consistent with the public interest;

(5) identify the information that must be provided to potential subscribers to ensure fair
disclosure of future costs and benefits of subscriptions;

(6) include a program implementation schedule;

(7) identify all proposed rules, fees, and charges; and

(8) identify the means by which the program will be promoted.

deleted text begin (f) deleted text end new text begin (b) new text end Notwithstanding any other law, neither the manager of nor the subscribers to a
community solar garden facility shall be considered a utility solely as a result of their
participation in the community solar garden facility.

deleted text begin (g) deleted text end new text begin (c) new text end Within 180 days of commission approval of a plan under this section, a utility
shall begin crediting subscriber accounts for each community solar garden facility in its
service territory, and shall file with the commissioner of commerce a description of its
crediting system.

deleted text begin (h) For the purposes of this section, the following terms have the meanings given:
deleted text end

deleted text begin (1) "subscriber" means a retail customer of a utility who owns one or more subscriptions
of a community solar garden facility interconnected with that utility; and
deleted text end

deleted text begin (2) "subscription" means a contract between a subscriber and the owner of a solar garden.
deleted text end

new text begin Subd. 4. new text end

new text begin Program administration; enforcement. new text end

new text begin (a) The Department of Commerce
must administer the community solar garden program and is responsible for implementing
all elements of the program. The department's duties under this section include:
new text end

new text begin (1) processing community solar garden applications;
new text end

new text begin (2) establishing and accepting program fees from applicants and solar garden managers;
new text end

new text begin (3) calculating the rate paid to subscribers and submitting the rate to the commission for
approval;
new text end

new text begin (4) ensuring that community solar garden program documents and protocols are available
to subscribers;
new text end

new text begin (5) ensuring that solar garden managers provide adequate notice to subscribers of changes
in solar garden operations, including but not limited to adjustments in subscriber bill credit
rates;
new text end

new text begin (6) ensuring that a utility conducts the interconnection process in a timely fashion;
new text end

new text begin (7) ensuring that the actions of solar garden owners, operators, and subscribers comply
with this section and orders of the commission; and
new text end

new text begin (8) other administrative tasks as determined by the commissioner.
new text end

new text begin (b) The commissioner may use the authority granted under section 45.027 to enforce
any violations related to the duties and responsibilities entrusted to the commissioner under
this subdivision.
new text end

new text begin Subd. 5. new text end

new text begin Account established. new text end

new text begin A solar garden administrative account is established in
the special revenue fund. Fees collected under this section must be deposited in and credited
to the account. Money in the account, including interest, is appropriated to the commissioner
to administer this section.
new text end

new text begin Subd. 6. new text end

new text begin Community access project; eligibility. new text end

new text begin Any community solar garden established
under a plan approved by the commission may petition the commission to be designated as
a community access project. The commission must designate a solar garden as a community
access project if the solar garden meets the following conditions:
new text end

new text begin (1) at least 50 percent of the solar garden's generating capacity is subscribed by residential
customers;
new text end

new text begin (2) the contract between an owner of the solar garden and the public utility that purchases
the garden's electricity, and any agreement between the utility or owner of the solar garden
and subscribers, states (i) the owner of the solar garden does not discriminate against or
screen subscribers based on income or credit score, and (ii) any customer of a utility whose
community solar garden plan has been approved by the commission under subdivision 3 is
eligible to become a subscriber;
new text end

new text begin (3) the solar garden is operated by an entity that maintains a physical address in Minnesota
and has designated a contact person in Minnesota who responds to subscriber inquiries; and
new text end

new text begin (4) the agreement between the owner of the solar garden and subscribers states the owner
will adequately publicize and convene at least one meeting annually to provide an opportunity
for subscribers to address questions to the manager or owner.
new text end

new text begin Subd. 7. new text end

new text begin Community access project; financial arrangements. new text end

new text begin (a) If a solar garden is
approved by the commission as a community access project:
new text end

new text begin (1) the public utility purchasing the electricity generated by the community access project
may charge the owner of the community access project no more than one cent per watt
alternating current, based on the solar garden's generating capacity, for any refundable
deposit the utility requires of a solar garden during the application process;
new text end

new text begin (2) notwithstanding subdivision 2, paragraph (d), the public utility must purchase all
energy generated by the community access project at the retail rate;
new text end

new text begin (3) a subscriber's portion of the energy purchased from a community access project by
a public utility must be credited to the subscriber's bill; and
new text end

new text begin (4) all renewable energy credits generated by the community access project belong to
subscribers unless the operator:
new text end

new text begin (i) contracts to sell the renewable energy credits to a third party, or sell or transfer the
renewable energy credits to the utility; and
new text end

new text begin (ii) discloses the sale or transfer to a subscriber at the time the subscriber enters into a
subscription.
new text end

new text begin (b) If at any time a solar garden approved by the commission as a community access
project fails to meet the conditions under subdivision 4, the solar garden is no longer subject
to subdivisions 5 and 6 and must operate under the program rules established by the
commission for a solar garden that does not qualify as a community access project.
new text end

new text begin (c) An owner of a solar garden whose designation as a community access project is
revoked under this subdivision may reapply to the commission at any time to have its
designation as a community access project reinstated under subdivision 4.
new text end

new text begin Subd. 8. new text end

new text begin Community access project; reporting. new text end

new text begin (a) The owner of a community access
project must include the following information in an annual report to the subscribers of the
community access project and the utility:
new text end

new text begin (1) a description of the process by which subscribers can provide input to solar garden
policy and decision-making;
new text end

new text begin (2) the amount of revenues received by the solar garden in the previous year that were
allocated to categories that include but are not limited to operating costs, debt service, profits
distributed to subscribers, and profits distributed to others; and
new text end

new text begin (3) an analysis of the proportion of subscribers that are low- and moderate-income, and
a description of one or more of the following methods used to calculate that proportion:
new text end

new text begin (i) income verification by subscribers;
new text end

new text begin (ii) subscriber evidence that the subscriber or a member of the subscriber's household
receives assistance from any of the following sources:
new text end

new text begin (A) the low-income home energy assistance program;
new text end

new text begin (B) Section 8 housing assistance;
new text end

new text begin (C) medical assistance;
new text end

new text begin (D) the Supplemental Nutrition Assistance Program; or
new text end

new text begin (E) the National School Lunch Program;
new text end

new text begin (iii) characterization of the census tract in which the subscriber resides as low- or
moderate-income by the Federal Financial Institutions Examination Council; or
new text end

new text begin (iv) other methods approved by the commission.
new text end

new text begin Subd. 9. new text end

new text begin Commission order. new text end

new text begin Within 180 days of the effective date of this act, the
commission must issue an order incorporating the provisions of this act.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Subdivisions 4 and 5 are effective January 1, 2020. Subdivisions
1 to 3 and 6 to 9 are effective the day following final enactment.
new text end

Sec. 7.

new text begin [216B.1643] SOLAR GARDEN GRANT PROGRAM FOR LOW-INCOME
HOUSEHOLDS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given them.
new text end

new text begin (b) "Eligible entity" means a community action agency, as defined in section 256E.31,
a tribal or county governmental agency, or a non-profit governmental organization that
administers low-income energy programs for the Department of Commerce.
new text end

new text begin (c) "Income-eligible residential household" means a household with an annual income
that is (1) 50 percent or less of the state median income, or (2) 200 percent or less of the
federal poverty level.
new text end

new text begin (d) "Solar garden" has the meaning given in section 216B.1641.
new text end

new text begin Subd. 2. new text end

new text begin Establishment; purpose. new text end

new text begin A solar garden grant program for income-eligible
residential households is established in the Department of Commerce to award grants that
promote the development of solar gardens for income-eligible residential households. Funds
in the account are reserved for the purpose of this section and do not lapse.
new text end

new text begin Subd. 3. new text end

new text begin Eligibility. new text end

new text begin (a) A solar garden owner is eligible to receive a grant under this
section if:
new text end

new text begin (1) the new solar garden capacity is 500 kilowatts or less;
new text end

new text begin (2) all of the solar garden subscribers are income-eligible residential households, as
defined through a yearly application provided by the Department of Commerce; and
new text end

new text begin (3) the solar garden is operated by an eligible entity or by a third party performing the
duties under a contract with an eligible entity.
new text end

new text begin (b) An eligible entity is responsible for managing the solar garden and must annually
certify to the commissioner that the solar garden complies with paragraph (a).
new text end

new text begin Subd. 4. new text end

new text begin Application process; content. new text end

new text begin (a) An eligible applicant must submit an
application to the commissioner on a form designated by the commissioner. The
commissioner must develop administrative procedures that govern the application, grant
award process, and ongoing solar garden management requirements.
new text end

new text begin (b) An application for a grant under this section must include:
new text end

new text begin (1) evidence that the solar garden meets the eligibility requirements under subdivision
3; and
new text end

new text begin (2) any other information requested by the commissioner.
new text end

new text begin Subd. 5. new text end

new text begin Limitations. new text end

new text begin A grant awarded under this section must not exceed 60 percent
of the total cost to develop the community solar garden.
new text end

new text begin Subd. 6. new text end

new text begin Eligible expenditures. new text end

new text begin Grants awarded under this section may be expended to
(1) finance, purchase, and install facilities necessary to operate a solar garden, and (2) pay
reasonable expenses incurred by the department to administer the program and certify
applicant eligibility on an ongoing basis.
new text end

Sec. 8.

Minnesota Statutes 2018, section 216B.1645, subdivision 1, is amended to read:

Subdivision 1.

Commission authority.

Upon the petition of a public utility, the Public
Utilities Commission shall approve or disapprove power purchase contracts, investments,
or expenditures entered into or made by the utility to satisfy the wind and biomass mandates
contained in sections 216B.169, 216B.2423, and 216B.2424, and to satisfy the renewable
energy objectives and standards set forth in section 216B.1691, including reasonable
investments and expenditures new text begin , net of revenues, new text end made to:

(1) transmit the electricity generated from sources developed under those sections that
is ultimately used to provide service to the utility's retail customers, including studies
necessary to identify new transmission facilities needed to transmit electricity to Minnesota
retail customers from generating facilities constructed to satisfy the renewable energy
objectives and standards, provided that the costs of the studies have not been recovered
previously under existing tariffs and the utility has filed an application for a certificate of
need or for certification as a priority project under section 216B.2425 for the new
transmission facilities identified in the studies;

(2) provide storage facilities for renewable energy generation facilities that contribute
to the reliability, efficiency, or cost-effectiveness of the renewable facilities; or

(3) develop renewable energy sources from the account required in section 116C.779.

Sec. 9.

Minnesota Statutes 2018, section 216B.1645, subdivision 2, is amended to read:

Subd. 2.

Cost recovery.

The expenses incurred by the utility over the duration of the
approved contract or useful life of the investment deleted text begin and deleted text end new text begin , new text end expenditures made pursuant to section
116C.779 deleted text begin shall be deleted text end new text begin , and employment of local workers to construct and maintain generation
facilities that supply power to the utility's customers are new text end recoverable from the ratepayers of
the utility, to the extent they are not offset by utility revenues attributable to the contracts,
investments, or expenditures. Upon petition by a public utility, the commission shall approve
or approve as modified a rate schedule providing for the automatic adjustment of charges
to recover the expenses or costs approved by the commission under subdivision 1, which,
in the case of transmission expenditures, are limited to the portion of actual transmission
costs that are directly allocable to the need to transmit power from the renewable sources
of energy. The commission may not approve recovery of the costs for that portion of the
power generated from sources governed by this section that the utility sells into the wholesale
market.

Sec. 10.

Minnesota Statutes 2018, section 216B.1691, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) Unless otherwise specified in law, "eligible energy
technology" means an energy technology that generates electricity from the following
renewable energy sources:

(1) solar;

(2) wind;

(3) hydroelectric with a capacity of less than 100 megawatts;

(4) hydrogen, provided that after January 1, 2010, the hydrogen must be generated from
the resources listed in this paragraph; or

(5) biomass, which includes, without limitation, landfill gas; an anaerobic digester
system; the predominantly organic components of wastewater effluent, sludge, or related
by-products from publicly owned treatment works, but not including incineration of
wastewater sludge to produce electricity; and an energy recovery facility used to capture
the heat value of mixed municipal solid waste or refuse-derived fuel from mixed municipal
solid waste as a primary fuel.

(b) "Electric utility" means a public utility providing electric service, a generation and
transmission cooperative electric association, a municipal power agency, or a power district.

(c) "Total retail electric sales" means the kilowatt-hours of electricity sold in a year by
an electric utility to retail customers of the electric utility or to a distribution utility for
distribution to the retail customers of the distribution utility. "Total retail electric sales"
does not include the sale of hydroelectricity supplied by a federal power marketing
administration or other federal agency, regardless of whether the sales are directly to a
distribution utility or are made to a generation and transmission utility and pooled for further
allocation to a distribution utility.

new text begin (d) "Carbon-free" means a technology that generates electricity without emitting carbon
dioxide.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 11.

Minnesota Statutes 2018, section 216B.1691, subdivision 2b, is amended to read:

Subd. 2b.

Modification or delay of standard.

(a) The commission shall modify or delay
the implementation of a standard obligation, in whole or in part, if the commission determines
it is in the public interest to do so. The commission, when requested to modify or delay
implementation of a standard, must consider:

(1) the impact of implementing the standard on its customers' utility costs, including the
economic and competitive pressure on the utility's customers;

(2) new text begin the environmental costs incurred as a result of a delay or modification, based on the
environmental cost values established in section 216B.2422, subdivision 3;
new text end

new text begin (3) new text end the effects of implementing the standard on the reliability of the electric system;

deleted text begin (3) deleted text end new text begin (4) new text end technical advances or technical concerns;

deleted text begin (4) deleted text end new text begin (5) new text end delays in acquiring sites or routes due to rejection or delays of necessary siting
or other permitting approvals;

deleted text begin (5) deleted text end new text begin (6) new text end delays, cancellations, or nondelivery of necessary equipment for construction or
commercial operation of an eligible energy technology facility;

deleted text begin (6) deleted text end new text begin (7) new text end transmission constraints preventing delivery of service; and

deleted text begin (7) deleted text end new text begin (8) new text end other statutory obligations imposed on the commission or a utility.

new text begin (b) new text end The commission may modify or delay implementation of a standard obligation under
new text begin paragraph (a), new text end clauses (1) to deleted text begin (3) deleted text end new text begin (4), new text end only if it finds implementation would cause significant
rate impact, requires significant measures to address reliability, new text begin would cause significant
environmental costs, new text end or raises significant technical issues. The commission may modify or
delay implementation of a standard obligation under new text begin paragraph (a), new text end clauses deleted text begin (4) deleted text end new text begin (5) new text end to deleted text begin (6) deleted text end new text begin
(7), new text end only if it finds that the circumstances described in those clauses were due to
circumstances beyond an electric utility's control and make compliance not feasible.

new text begin (c) When evaluating transmission capacity constraints under paragraph (a), clause (7),
the commission must consider:
new text end

new text begin (1) whether the utility has, in a timely fashion, undertaken reasonable measures under
its control and consistent with its obligations under local, state, and federal laws and
regulations, and its obligations as a member of the Midcontinent Independent System
Operator, to acquire sites, necessary permit approvals, and necessary equipment to develop
and construct new transmission lines or upgrade existing transmission lines to transmit
electricity generated by eligible energy technologies; and
new text end

new text begin (2) whether the utility has taken all reasonable operational measures to maximize
cost-effective electricity delivery from eligible energy technologies in advance of
transmission availability.
new text end

deleted text begin (b) deleted text end new text begin (d) new text end When considering whether to delay or modify implementation of a standard
obligation, the commission must give due consideration to a preference for electric generation
through use of eligible energy technology and to the achievement of the standards set by
this section.

deleted text begin (c) deleted text end new text begin (e) new text end An electric utility requesting a modification or delay in the implementation of a
standard must file a plan to comply with its standard obligation in the same proceeding that
it is requesting the delay.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 12.

Minnesota Statutes 2018, section 216B.1691, is amended by adding a subdivision
to read:

new text begin Subd. 2g. new text end

new text begin Carbon-free standard. new text end

new text begin By 2050, 100 percent of the electricity each electric
utility subject to subdivision 2a directly provides to Minnesota retail customers, or indirectly
provides through wholesale sales to a distribution utility serving Minnesota retail customers,
must be generated by a technology that is carbon-free.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 13.

Minnesota Statutes 2018, section 216B.1691, subdivision 9, is amended to read:

Subd. 9.

Local benefits.

new text begin (a) new text end The commission shall take all reasonable actions within its
statutory authority to ensure this section is implemented deleted text begin to maximize deleted text end new text begin in a manner that
maximizes new text end benefits to new text begin all new text end Minnesota citizens deleted text begin , balancing deleted text end new text begin and local workers throughout the
state. Benefits under this subdivision include but are not limited to:
new text end

new text begin (1) the creation of high-quality jobs in Minnesota that pay wages that support families;
new text end

new text begin (2) recognition of the rights of workers to organize and unionize;
new text end

new text begin (3) ensuring workers have the necessary tools, opportunities, and economic assistance
to adapt successfully during the energy transition, particularly in communities that host
retiring power plants or that contain historically marginalized and underrepresented
populations;
new text end

new text begin (4) ensuring all Minnesotans share (i) the benefits of clean and renewable energy, and
(ii) the opportunity to participate fully in the clean energy economy;
new text end

new text begin (5) ensuring air emissions are reduced in communities historically burdened by pollution
and the impacts of climate change; and
new text end

new text begin (6) the provision of affordable electric service to Minnesotans, and particularly to
low-income consumers.
new text end

new text begin (b) The commission must also implement this section in a manner that balances new text end factors
such as local ownership of or participation in energy production, new text begin local job impacts, new text end
development and ownership of eligible energy technology facilities by independent power
producers, Minnesota utility ownership of eligible energy technology facilities, the costs
of energy generation to satisfy the renewable deleted text begin standard deleted text end new text begin and carbon-free standards new text end , and the
reliability of electric service to Minnesotans.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 14.

new text begin [216B.1697] ENERGY STORAGE SYSTEM; APPLICATION.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin For the purposes of this section, "energy storage system"
means a commercially available technology that uses mechanical, chemical, or thermal
processes to:
new text end

new text begin (1) store energy and deliver the stored energy for use at a later time; or
new text end

new text begin (2) store thermal energy for direct use for heating or cooling at a later time in a manner
that reduces the demand for electricity at the later time.
new text end

new text begin Subd. 2. new text end

new text begin Application requirement. new text end

new text begin No later than January 1, 2021, each public utility
providing retail electric service in Minnesota must submit to the commission for review
and approval an application to install one or more energy storage systems.
new text end

new text begin Subd. 3. new text end

new text begin Application contents. new text end

new text begin (a) Each application submitted under this section must
contain the following information:
new text end

new text begin (1) technical specifications of the energy storage system, including but not limited to:
new text end

new text begin (i) the maximum amount of electric output that the energy storage system can provide;
new text end

new text begin (ii) the length of time the energy storage system can sustain its maximum output;
new text end

new text begin (iii) the location of the project and a description of the analysis conducted to determine
the location;
new text end

new text begin (iv) the needs of the public utility's electric system the proposed energy storage system
addresses;
new text end

new text begin (v) a description of the types of services the energy storage system is expected to provide;
and
new text end

new text begin (vi) a description of the technology required to construct, operate, and maintain the
energy storage system, including any data or communication system necessary to operate
the energy storage system;
new text end

new text begin (2) the estimated cost of the project, including:
new text end

new text begin (i) capital costs;
new text end

new text begin (ii) the estimated cost per unit of energy delivered by the energy storage system; and
new text end

new text begin (iii) an evaluation of the energy storage system's cost-effectiveness;
new text end

new text begin (3) the estimated benefits of the energy storage system to the public utility's electric
system, including but not limited to:
new text end

new text begin (i) deferred investments in generation, transmission, or distribution capacity;
new text end

new text begin (ii) reduced need for electricity during times of peak demand;
new text end

new text begin (iii) improved reliability of the public utility's transmission or distribution system; and
new text end

new text begin (iv) improved integration of the public utility's renewable energy resources;
new text end

new text begin (4) how the addition of an energy storage system complements proposed actions of the
public utility described in its most recent integrated resource plan submitted under section
216B.2422, to meet expected demand with the lowest-cost combination of resources; and
new text end

new text begin (5) any additional information required by the commission.
new text end

new text begin (b) A public utility must include in its application an evaluation of the potential to store
energy in the public utility's electric system, and must identify geographic areas in the public
utility's service area where the deployment of energy storage systems has the greatest
potential to achieve the economic benefits identified in paragraph (a), clause (3).
new text end

new text begin Subd. 4. new text end

new text begin Commission review. new text end

new text begin The commission must review each proposal submitted
under this section, and may approve, reject, or modify the proposal. The commission must
approve a proposal it determines is in the public interest and reasonably balances the value
derived from the deployment of an energy storage system for ratepayers and the public
utility's operations with the costs of procuring, constructing, operating, and maintaining the
energy storage system.
new text end

new text begin Subd. 5. new text end

new text begin Cost recovery. new text end

new text begin A public utility may recover from ratepayers all costs prudently
incurred by the public utility to deploy an energy storage system approved by the commission
under this section, net of any revenues generated by the operation of the energy storage
system.
new text end

new text begin Subd. 6. new text end

new text begin Commission authority; orders. new text end

new text begin The commission may issue orders necessary
to implement and administer this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 15.

new text begin [216B.1698] INNOVATIVE CLEAN TECHNOLOGIES.
new text end

new text begin (a) For purposes of this section, "innovative clean technology" means advanced energy
technology that is:
new text end

new text begin (1) environmentally superior to technologies currently in use;
new text end

new text begin (2) expected to offer energy-related, environmental, or economic benefits; and
new text end

new text begin (3) not widely deployed by the utility industry.
new text end

new text begin (b) A public utility may petition the commission for authorization to invest in a project
or projects to deploy one or more innovative clean technologies to further the development,
commercialization, and deployment of innovative clean technologies for the benefit of utility
customers.
new text end

new text begin (c) The commission may approve a petition under paragraph (b) if it finds:
new text end

new text begin (1) the technologies proposed to be deployed are innovative clean technologies;
new text end

new text begin (2) the utility is meeting its energy conservation goals under section 216B.241; and
new text end

new text begin (3) the petition does not result in a utility spending greater than $5,000,000 per year on
innovative clean technologies under this section.
new text end

new text begin (d) The commission may also permit a public utility to file rate schedules containing
provisions to automatically adjust charges for public utility service in direct relation to
changes in prudent costs incurred by a utility under this section, up to $5,000,000 each year.
To the extent the utility investment under this section is for a capital asset, the utility may
request that the asset be included in the utility's rate base.
new text end

Sec. 16.

Minnesota Statutes 2018, section 216B.2401, is amended to read:

216B.2401 ENERGY SAVINGS new text begin AND OPTIMIZATION new text end POLICY GOAL.

new text begin (a) new text end The legislature finds that energy savings are an energy resource, and that cost-effective
energy savings are preferred over all other energy resources. new text begin In addition, the legislature
finds that optimizing when and how energy consumers manage energy use can provide
significant benefits to the consumers and to the utility system as a whole. new text end The legislature
further finds that cost-effective energy savings new text begin and load management programs new text end should be
procured systematically and aggressively in order to reduce utility costs for businesses and
residents, improve the competitiveness and profitability of businesses, create more
energy-related jobs, reduce the economic burden of fuel imports, and reduce pollution and
emissions that cause climate change. Therefore, it is the energy policy of the state of
Minnesota to achieve annual energy savings deleted text begin equal deleted text end new text begin equivalent new text end to at least deleted text begin 1.5 deleted text end new text begin 2.5 new text end percent of
annual retail energy sales of electricity and natural gas through deleted text begin cost-effective energy
conservation improvement programs and rate design, energy efficiency achieved by energy
consumers without direct utility involvement, energy codes and appliance standards, programs
designed to transform the market or change consumer behavior, energy savings resulting
from efficiency improvements to the utility infrastructure and system, and other efforts to
promote energy efficiency and energy conservation. deleted text end new text begin multiple means, including but not
limited to:
new text end

new text begin (1) cost-effective energy conservation improvement programs and efficient fuel-switching
utility programs under sections 216B.2402 to 216B.241;
new text end

new text begin (2) rate design;
new text end

new text begin (3) energy efficiency achieved by energy consumers without direct utility involvement;
new text end

new text begin (4) advancements in statewide energy codes and cost-effective appliance and equipment
standards;
new text end

new text begin (5) programs designed to transform the market or change consumer behavior;
new text end

new text begin (6) energy savings resulting from efficiency improvements to the utility infrastructure
and system; and
new text end

new text begin (7) other efforts to promote energy efficiency and energy conservation.
new text end

new text begin (b) A utility is encouraged to design and offer to its customers load management programs
that enable (1) customers to maximize the economic value gained from the energy purchased
from the customer's utility service provider, and (2) utilities to optimize the infrastructure
and generation capacity needed to effectively serve customers and facilitate the integration
of renewable energy into the energy system. The commissioner must provide a reasonable
estimate for progress toward this statewide energy-savings goal in the annual report required
under section 216B.241, subdivision 1c, along with recommendations for administrative or
legislative initiatives to increase energy savings toward that goal. The commissioner must
also annually report on the energy productivity of the state's economy by providing an
estimate of the ratio of economic output produced in a previous year to the primary energy
inputs used in the current year.
new text end

Sec. 17.

new text begin [216B.2402] DEFINITIONS.
new text end

new text begin (a) For the purposes of section 216B.16, subdivision 6b, and sections 216B.2401 to
216B.241, the terms defined in this section have the meanings given them.
new text end

new text begin (b) "Consumer-owned utility" means a municipal utility or a cooperative electric
association.
new text end

new text begin (c) "Cumulative lifetime savings" means the total electric energy or natural gas savings
in a given year from energy conservation improvements installed in the given year or in
previous years that are still operational and providing savings because the measures have
not reached the end of the measure's useful life.
new text end

new text begin (d) "Efficient fuel-switching improvement" means a project that (1) converts a customer
from use of a fuel to the use of electric energy or natural gas delivered at retail by a utility
subject to this section, resulting in a net increase in the use of electric energy or natural gas
and a net decrease in source energy consumption on a fuel-neutral basis, and (2) otherwise
meets the criteria established in section 216B.2403, subdivision 8. An efficient fuel-switching
improvement requires the installation of equipment that utilizes electric energy or natural
gas, resulting in a reduction or elimination of use of the previous fuel. An efficient
fuel-switching improvement is not an energy conservation improvement even if it results
in a net reduction in electricity or natural gas.
new text end

new text begin (e) "Energy conservation" means an action that results in a net reduction in electric
energy or natural gas consumption. Energy conservation does not include an efficient
fuel-switching improvement.
new text end

new text begin (f) "Energy conservation improvement" means a project that results in energy efficiency
or energy conservation. Energy conservation improvement may include waste heat that is
recovered and converted into electricity, but does not include electric utility infrastructure
projects approved by the commission under section 216B.1636. Energy conservation
improvement includes waste heat recovered and used as thermal energy.
new text end

new text begin (g) "Energy efficiency" means measures or programs, including energy conservation
measures or programs, that target consumer behavior, equipment, processes, or devices
designed to produce either an absolute decrease in consumption of electric energy or natural
gas or a decrease in consumption of electric energy or natural gas on a per unit of production
basis, without reducing the quality or level of service provided to the energy consumer.
new text end

new text begin (h) "Fuel" means energy consumed by a retail utility customer. Fuel includes electricity,
propane, natural gas, heating oil, gasoline, diesel fuel, or steam.
new text end

new text begin (i) "Fuel neutral" means an approach that compares the use of various fuels for a given
end use, using a common metric.
new text end

new text begin (j) "Gross annual retail energy sales" means the annual electric sales to all retail customers
in a utility's or association's Minnesota service territory or natural gas throughput to all retail
customers, including natural gas transportation customers, on a utility's distribution system
in Minnesota. Gross annual retail energy sales does not include:
new text end

new text begin (1) gas sales to:
new text end

new text begin (i) a large energy facility;
new text end

new text begin (ii) a large customer facility whose natural gas utility has been exempted by the
commissioner under section 216B.241, subdivision 1a, paragraph (b), with respect to natural
gas sales made to the large customer facility; and
new text end

new text begin (iii) a commercial gas customer facility whose natural gas utility has been exempted by
the commissioner under section 216B.241, subdivision 1a, paragraph (c), with respect to
natural gas sales made to the commercial gas customer facility; or
new text end

new text begin (2) electric sales to a large customer facility whose electric utility has been exempted
by the commissioner under section 216B.241, subdivision 1a, paragraph (b), with respect
to electric sales made to the large facility.
new text end

new text begin (k) "Investments and expenses of a public utility" means the investments and expenses
incurred by a public utility in connection with an energy conservation improvement.
new text end

new text begin (l) "Large customer facility" means all buildings, structures, equipment, and installations
at a single site that collectively (1) impose a peak electrical demand on an electric utility's
system of at least 20,000 kilowatts, measured in the same way as the utility that serves the
customer facility measures electric demand for billing purposes, or (2) consume at least
500,000,000 cubic feet of natural gas annually. When calculating peak electrical demand,
a large customer facility may include demand offset by on-site cogeneration facilities and,
if engaged in mineral extraction, may aggregate peak energy demand from the large customer
facility's mining processing operations.
new text end

new text begin (m) "Large energy facility" has the meaning given in section 216B.2421, subdivision 2,
clause (1).
new text end

new text begin (n) "Lifetime energy savings" means the amount of savings a particular energy
conservation improvement produces over the improvement's effective useful lifetime.
new text end

new text begin (o) "Load management" means an activity, service, or technology to change the timing
or the efficiency of a customer's use of energy that allows a utility or a customer to (1)
respond to local and regional energy system conditions, or (2) reduce peak demand for
electric energy or natural gas. Load management that reduces the customer's net annual
energy consumption is also energy conservation.
new text end

new text begin (p) "Low-income household" means a household whose household income is 60 percent
or less of the state median household income.
new text end

new text begin (q) "Low-income programs" means energy conservation improvement programs that
directly serve the needs of low-income persons, including low-income renters. Multifamily
buildings of five units or more that are rented by low-income persons are eligible to be
served through low-income programs, which may include upgrading appliances, upgrading
heating and air conditioning equipment, and building envelope improvements.
new text end

new text begin (r) "Member" has the meaning given in section 308B.005, subdivision 15.
new text end

new text begin (s) "Qualifying utility" means a utility that supplies a customer with energy that enables
the customer to qualify as a large customer facility.
new text end

new text begin (t) "Source energy" means the total amount of fuel required for a given purpose,
considering energy losses in the production, transmission, and delivery of the energy.
new text end

new text begin (u) "Waste heat recovered and used as thermal energy" means capturing heat energy
that would be exhausted or dissipated to the environment from machinery, buildings, or
industrial processes, and productively using the recovered thermal energy where it was
captured or distributing it as thermal energy to other locations where it is used to reduce
demand-side consumption of natural gas, electric energy, or both.
new text end

new text begin (v) "Waste heat recovery converted into electricity" means an energy recovery process
that converts otherwise lost energy from the heat of exhaust stacks or pipes used for engines
or manufacturing or industrial processes, or the reduction of high pressure in water or gas
pipelines.
new text end

Sec. 18.

new text begin [216B.2403] CUSTOMER-OWNED UTILITIES; ENERGY
CONSERVATION AND OPTIMIZATION.
new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin This section applies to:
new text end

new text begin (1) a cooperative electric association that provides retail service to more than 5,000
members;
new text end

new text begin (2) a municipality that provides electric service to more than 1,000 retail customers; and
new text end

new text begin (3) a municipality with more than 1,000,000,000 cubic feet in annual throughput sales
to natural gas retail customers.
new text end

new text begin Subd. 2. new text end

new text begin Consumer-owned utility; energy-savings goal. new text end

new text begin (a) Each individual
consumer-owned utility subject to this section has an annual energy-savings goal equivalent
to 1.5 percent of gross annual retail energy sales. The annual energy-savings goal must be
met with a minimum of energy savings from energy conservation improvements equivalent
to at least one percent of the consumer-owned utility's gross annual retail energy sales. The
balance of energy savings toward the annual energy-savings goal must be achieved by the
following utility activities:
new text end

new text begin (1) energy savings from additional energy conservation improvements;
new text end

new text begin (2) electric utility infrastructure projects, as defined in section 216B.1636, subdivision
1; or
new text end

new text begin (3) net energy savings from efficient fuel-switching improvements that meet the criteria
under subdivision 8.
new text end

new text begin (b) Nothing in this section limits a utility's ability to report and recognize savings from
activities under paragraph (a), clauses (2) and (3), in excess of the utility's annual energy
savings, provided the utility has met the minimum energy-savings goal from energy
conservation improvements.
new text end

new text begin (c) The energy-savings goals specified in this section must be calculated based on the
most recent three-year, weather-normalized average. A consumer-owned utility that elects
to file annual plans may carry forward for up to three years any energy savings in excess
of its 1.5 percent energy-savings goal in a single year.
new text end

new text begin (d) A consumer-owned utility subject to this section is not required to make energy
conservation improvements that are not cost-effective, even if the improvement is necessary
to attain the energy-savings goal. A consumer-owned utility subject to this section must
make reasonable efforts to implement energy conservation improvements above the minimum
level set under this subdivision if cost-effective opportunities and utility funding are available,
considering other potential investments the utility plans to make for the benefit of customers
during the term of the plan filed under subdivision 4.
new text end

new text begin (e) A consumer-owned utility may request that the commissioner adjust its minimum
goal for energy savings from energy conservation improvements specified under paragraph
(a) for the period of the plan filed under subdivision 4. The request must be made by January
1 of a year when the utility must file a plan under subdivision 4. The request must be based
on:
new text end

new text begin (1) historical energy conservation improvement program achievements;
new text end

new text begin (2) customer class makeup;
new text end

new text begin (3) projected load growth;
new text end

new text begin (4) an energy conservation potential study that estimates the amount of cost-effective
energy conservation potential that exists in the utility's service territory;
new text end

new text begin (5) the cost-effectiveness and quality of the energy conservation programs offered by
the utility; and
new text end

new text begin (6) other factors the commissioner and consumer-owned utility determine warrant an
adjustment.
new text end

new text begin The commissioner must adjust the savings goal to a level the commissioner determines is
supported by the record, but must not approve a minimum energy-savings goal from energy
conservation improvements that is less than one percent of gross annual retail energy sales.
new text end

new text begin Subd. 3. new text end

new text begin Consumer-owned utility; energy savings investments. new text end

new text begin (a) Each cooperative
electric association and municipality subject to subdivision 2 must spend and invest in the
following amounts for energy conservation improvements under this subdivision:
new text end

new text begin (1) for a municipality, 0.5 percent of its gross operating revenues from the sale of gas
and 1.5 percent of its gross operating revenues from the sale of electricity, excluding gross
operating revenues from electric and gas service provided in Minnesota to large electric
customer facilities; and
new text end

new text begin (2) for a cooperative electric association, 1.5 percent of its gross operating revenues
from service provided in the state, excluding gross operating revenues from service provided
in the state to large electric customer facilities indirectly through a distribution cooperative
electric association.
new text end

new text begin (b) Each municipality and cooperative electric association subject to this subdivision
must identify and implement energy conservation improvement spending and investments
that are appropriate for the municipality or association, except that a municipality or
association must not spend or invest for energy conservation improvements that directly
benefit a large energy facility or a large electric customer facility that the commissioner has
issued an exemption to under section 216B.241, subdivision 1a, paragraph (b).
new text end

new text begin Subd. 4. new text end

new text begin Consumer-owned utility; energy conservation and optimization plans. new text end

new text begin (a)
By June 1, 2021, each consumer-owned utility must file with the commissioner an energy
conservation and optimization plan that describes the programs for energy conservation,
efficient fuel-switching improvements and load management programs, and other processes
and programs the utility plans to use to achieve its energy-savings goal. The plan may cover
a period not to exceed two years. The plan must provide an analysis of the cost-effectiveness
of the consumer-owned utility's programs offered under the plan, using a list of baseline
energy- and capacity-savings assumptions developed in consultation with the department.
An individual utility program may combine elements of energy conservation, load
management, or efficient fuel-switching. Plans received by June 1 must be evaluated by the
commissioner based on how well the plan meets the goals set under subdivision 2 by
December 1 of the same year, including the commissioner's assessment of whether the plan
is likely to achieve the goals. Beginning June 1, 2022, and every June 1 thereafter, each
consumer-owned utility must file: (1) an annual update identifying the status of its annual
plan filed under this subdivision, including (i) total expenditures and investments made to
date, and (ii) any intended changes to the plan; and (2) a summary of the annual
energy-savings achievements under a completed plan and a new plan that complies with
this section.
new text end

new text begin (b) In the filings required under paragraph (a), the consumer-owned utility must describe
and evaluate the programs offered by the utility under the plan, including:
new text end

new text begin (1) energy conservation improvements in the previous period and its progress toward
the minimum energy-savings goal from energy conservation improvements described in
subdivision 2, including accounting for lifetime savings and cumulative lifetime energy
savings under the plan. The evaluation must briefly describe each conservation program
the utility offers or plans to offer, and must specify the energy savings or increased efficiency
in the use of energy within the service territory of the utility that is the result of the program.
The commissioner must review each evaluation and make recommendations, where
appropriate, to the consumer-owned utility to increase the effectiveness of conservation
improvement activities. The commissioner must consider and may require a consumer-owned
utility to undertake a cost-effective program suggested by an outside source, including a
political subdivision, nonprofit corporation, or community organization;
new text end

new text begin (2) load management activities, including an analysis of the reduction in peak load
resulting from the program and an assessment of the cost-effectiveness of each program;
and
new text end

new text begin (3) efficient fuel-switching improvement activities, including an analysis regarding how
each program meets the criteria specified in subdivision 8 and an assessment of the
cost-effectiveness of each program. For improvements requiring the deployment of electric
technologies, the plan must also provide an analysis regarding how the fuel-switching
improvement is operated in order to facilitate the integration of variable renewable energy
into the electric system.
new text end

new text begin (c) When evaluating the cost-effectiveness of utility programs, the consumer-owned
utility and the commissioner must consider the costs and benefits to ratepayers, the utility,
participants, and society. In addition, the commissioner must consider the rate at which the
consumer-owned utility is increasing its energy savings and expenditures on energy
conservation, as well as the lifetime energy savings and cumulative energy savings of the
consumer-owned utility.
new text end

new text begin (d) Each consumer-owned utility subject to this subdivision may annually spend and
invest up to ten percent of the total amount spent and invested on energy conservation
improvements under this subdivision on research and development projects that meet the
definition of energy conservation improvement and that are funded directly by the
consumer-owned utility.
new text end

new text begin (e) A generation and transmission cooperative electric association or municipal power
agency that provides energy services to consumer-owned utilities may invest in energy
conservation improvements on behalf of consumer-owned utilities it serves and may fulfill
the conservation, reporting, and energy-savings goals for any of those consumer-owned
utilities on an aggregate basis. For consumer-owned utilities electing to aggregate services
under this paragraph, multiyear plans up to three years may be filed with the department
under subdivision 3 activities with continued annual performance reporting.
new text end

new text begin (f) A consumer-owned utility is prohibited from spending for or investing in energy
conservation improvements that directly benefit a large energy facility or a large electric
customer facility the commissioner has issued an exemption to under section 216B.241,
subdivision 1a.
new text end

new text begin (g) The energy conservation and optimization plan of each consumer-owned utility
subject to this section must have a component focused on improving the energy efficiency
in the public schools served by the utility. At a minimum, the efficiency in schools component
must consist of programs to update lighting in the school, update the heating and cooling
systems of the school, provide for building recommissioning, provide building operator
training, and provide opportunities to educate students, teachers, and staff regarding energy
efficiency measures implemented at that school, including associated benefits for improved
learning resulting from the measures.
new text end

new text begin Subd. 5. new text end

new text begin Low-income programs. new text end

new text begin (a) Each consumer-owned utility subject to this section
must provide energy conservation programs to low-income households. The commissioner
must evaluate a utility's plans under this section, considering the utility's historic spending
and participation levels, energy savings for low-income programs, and the number of
low-income persons residing in the utility's service territory. A municipal utility that furnishes
gas service must spend at least 0.4 percent of its most recent three-year average gross
operating revenue from residential customers in Minnesota on low-income programs. A
consumer-owned utility that furnishes electric service must spend at least 0.4 percent of its
gross operating revenue from residential customers in Minnesota on low-income programs.
This requirement applies to each generation and transmission cooperative association's
members' aggregate gross operating revenue from the sale of electricity to residential
customers in Minnesota.
new text end

new text begin (b) To meet the requirements of paragraph (a), a consumer-owned utility may contribute
money to the energy and conservation account in section 216B.241, subdivision 2a. An
energy conservation improvement plan must state the amount, if any, of low-income energy
conservation improvement funds the utility plans to contribute to the energy and conservation
account. Contributions must be remitted to the commissioner by February 1 each year.
new text end

new text begin (c) The commissioner must establish low-income programs to use money contributed
to the energy and conservation account under paragraph (b). When establishing low-income
programs, the commissioner must consult political subdivisions, utilities, and nonprofit and
community organizations, including organizations engaged in providing energy and
weatherization assistance to low-income households. Money contributed to the energy and
conservation account under paragraph (b) must provide programs for low-income households,
including low-income renters, located in the service territory of the utility or association
providing the money. The commissioner must record and report expenditures and energy
savings achieved as a result of low-income programs funded through the energy and
conservation account in the report required under section 216B.241, subdivision 1c, paragraph
(g). The commissioner may contract with a political subdivision, nonprofit or community
organization, public utility, municipality, or cooperative electric association to implement
low-income programs funded through the energy and conservation account.
new text end

new text begin (d) A consumer-owned utility may petition the commissioner to modify its required
spending under this subdivision if the utility and the commissioner were unable to expend
the amount required for three consecutive years.
new text end

new text begin (e) For purposes of this subdivision, "multifamily building" means a residential building
with five or more dwelling units. Notwithstanding the definition of low-income household
in section 216B.2402, for purposes of determining eligibility for multifamily buildings in
low-income programs, a utility or association may use one or more of the following:
new text end

new text begin (1) information demonstrating a multifamily building's units are rented to households
meeting one of the following criteria:
new text end

new text begin (i) household income at or below 200 percent of federal poverty level;
new text end

new text begin (ii) household income at or below 60 percent of area median income;
new text end

new text begin (iii) occupancy within a building that is certified on the Low Income Rental Classification
(LIRC) Assessor Report compiled annually by the Minnesota Housing Finance Agency; or
new text end

new text begin (iv) occupancy within a building that has a declaration against the property requiring
that a portion of the units are rented to tenants with an annual household income less than
or equal to 60 percent of area median income;
new text end

new text begin (2) a property's participation in an affordable housing program, including low-income
housing tax credits (LIHTC), United States Department of Housing and Urban Development
(HUD) assistance, United States Department of Agriculture (USDA) assistance, Minnesota
Housing Finance Agency assistance, or local tax abatement for low-income properties; or
new text end

new text begin (3) documentation demonstrating that the property is on the waiting list for or currently
participating in the United States Department of Energy Weatherization Assistance Program.
new text end

new text begin Subd. 6. new text end

new text begin Recovery of expenses. new text end

new text begin The commission must allow a cooperative electric
association subject to rate regulation under section 216B.026 to recover expenses resulting
from (1) a plan under this subdivision, and (2) assessments and contributions to the energy
and conservation account under section 216B.241, subdivision 2a.
new text end

new text begin Subd. 7. new text end

new text begin Ownership of energy conservation improvement. new text end

new text begin An energy conservation
improvement to or installed in a building under this section, excluding a system owned by
the consumer-owned utility that is designed to turn off, limit, or vary the delivery of energy,
is the exclusive property of the building owner, except to the extent that the improvement
is subject to a security interest in favor of the utility in case of a loan to the building owner.
new text end

new text begin Subd. 8. new text end

new text begin Criteria for efficient fuel-switching improvements. new text end

new text begin A fuel-switching
improvement is deemed efficient if the commissioner finds the improvement, relative to
the fuel being displaced:
new text end

new text begin (1) results in a net reduction in the cost and amount of source energy consumed for a
particular use, measured on a fuel-neutral basis;
new text end

new text begin (2) results in a net reduction of statewide greenhouse gas emissions, as defined in section
216H.01, subdivision 2, over the lifetime of the improvement. For an efficient fuel-switching
improvement installed by an electric utility, the reduction in emissions must be measured
based on the hourly emissions profile of the utility or the utility's wholesale provider. Where
applicable, the hourly emissions profile used must be the most recent resource plan accepted
by the commission under section 216B.2422;
new text end

new text begin (3) is cost-effective from a societal perspective, considering the costs associated with
both the fuel used in the past and the fuel used in the future; and
new text end

new text begin (4) is installed and operated in a manner that does not unduly increase the utility's system
peak demand or require significant new investment in utility infrastructure.
new text end

new text begin Subd. 9. new text end

new text begin Manner of filing and service. new text end

new text begin (a) A consumer-owned utility must submit the
filings required by this section to the department using the department's electronic filing
system.
new text end

new text begin (b) The submission of a document to the department's electronic filing system constitutes
service on the department. If a department rule requires service of a notice, order, or other
document by the department, utility, or interested party upon persons on a service list
maintained by the department, service may be made by personal delivery, mail, or electronic
service. Electronic service may be made only to persons on the service list that have
previously agreed in writing to accept electronic service at an electronic address provided
to the department for electronic service purposes.
new text end

new text begin Subd. 10. new text end

new text begin Assessment. new text end

new text begin The commission or department may assess utilities subject to
this section to carry out the purposes of section 216B.241, subdivisions 1d, 1e, and 1f. An
assessment under this paragraph must be proportionate to the utility's respective gross
operating revenue from sales of gas or electric service in Minnesota during the previous
calendar year. Assessments under this subdivision are not subject to the cap on assessments
under section 216B.62 or any other law.
new text end

new text begin Subd. 11. new text end

new text begin Waste heat recovery; thermal energy distribution. new text end

new text begin Subject to department
approval, demand-side natural gas or electric energy displaced by use of waste heat recovered
and used as thermal energy, including the recovered thermal energy from a cogeneration
or combined heat and power facility, is eligible to be counted toward a consumer-owned
utility's natural gas or electric savings goals.
new text end

Sec. 19.

Minnesota Statutes 2018, section 216B.241, subdivision 1a, is amended to read:

Subd. 1a.

deleted text begin Investment, expenditure, and contribution; public utility deleted text end new text begin Large customer
facility new text end .

deleted text begin (a) For purposes of this subdivision and subdivision 2, "public utility" has the
meaning given it in section 216B.02, subdivision 4. Each public utility shall spend and
invest for energy conservation improvements under this subdivision and subdivision 2 the
following amounts:
deleted text end

deleted text begin (1) for a utility that furnishes gas service, 0.5 percent of its gross operating revenues
from service provided in the state;
deleted text end

deleted text begin (2) for a utility that furnishes electric service, 1.5 percent of its gross operating revenues
from service provided in the state; and
deleted text end

deleted text begin (3) for a utility that furnishes electric service and that operates a nuclear-powered electric
generating plant within the state, two percent of its gross operating revenues from service
provided in the state.
deleted text end

deleted text begin For purposes of this paragraph (a), "gross operating revenues" do not include revenues
from large customer facilities exempted under paragraph (b), or from commercial gas
customers that are exempted under paragraph (c) or (e).
deleted text end

deleted text begin (b) deleted text end new text begin (a) new text end The owner of a large customer facility may petition the commissioner to exempt
both electric and gas utilities serving the large customer facility from the investment and
expenditure requirements of deleted text begin paragraph (a) deleted text end new text begin a utility's plan under this section or section
216B.2403 new text end with respect to retail revenues attributable to the large customer facility. The
filing must include a discussion of the competitive or economic pressures facing the owner
of the facility and the efforts taken by the owner to identify, evaluate, and implement energy
conservation and efficiency improvements. A filing submitted on or before October 1 of
any year must be approved within 90 days and become effective January 1 of the year
following the filing, unless the commissioner finds that the owner of the large customer
facility has failed to take reasonable measures to identify, evaluate, and implement energy
conservation and efficiency improvements. If a facility qualifies as a large customer facility
solely due to its peak electrical demand or annual natural gas usage, the exemption may be
limited to the qualifying utility if the commissioner finds that the owner of the large customer
facility has failed to take reasonable measures to identify, evaluate, and implement energy
conservation and efficiency improvements with respect to the nonqualifying utility. Once
an exemption is approved, the commissioner may request the owner of a large customer
facility to submit, not more often than once every five years, a report demonstrating the
large customer facility's ongoing commitment to energy conservation and efficiency
improvement after the exemption filing. The commissioner may request such reports for
up to ten years after the effective date of the exemption, unless the majority ownership of
the large customer facility changes, in which case the commissioner may request additional
reports for up to ten years after the change in ownership occurs. The commissioner may,
within 180 days of receiving a report submitted under this paragraph, rescind any exemption
granted under this paragraph upon a determination that the large customer facility is not
continuing to make reasonable efforts to identify, evaluate, and implement energy
conservation improvements. A large customer facility that is, under an order from the
commissioner, exempt from the investment and expenditure requirements of paragraph (a)
as of December 31, 2010, is not required to submit a report to retain its exempt status, except
as otherwise provided in this paragraph with respect to ownership changes. No exempt large
customer facility may participate in a utility conservation improvement program unless the
owner of the facility submits a filing with the commissioner to withdraw its exemption.

deleted text begin (c) deleted text end new text begin (b) new text end A commercial gas customer that is not a large customer facility and that purchases
or acquires natural gas from a public utility having fewer than 600,000 natural gas customers
in Minnesota may petition the commissioner to exempt gas utilities serving the commercial
gas customer from the investment and expenditure requirements of deleted text begin paragraph (a) deleted text end new text begin new text end new text begin a utility's
plan under this section or section 216B.2403 new text end with respect to retail revenues attributable to
the commercial gas customer. The petition must be supported by evidence demonstrating
that the commercial gas customer has acquired or can reasonably acquire the capability to
bypass use of the utility's gas distribution system by obtaining natural gas directly from a
supplier not regulated by the commission. The commissioner shall grant the exemption if
the commissioner finds that the petitioner has made the demonstration required by this
paragraph.

deleted text begin (d) deleted text end new text begin (c) new text end The commissioner may require investments or spending greater than the amounts
required under this subdivision for a public utility whose most recent advance forecast
required under section 216B.2422 or 216C.17 projects a peak demand deficit of 100
megawatts or greater within five years under midrange forecast assumptions.

deleted text begin (e) deleted text end new text begin (d) new text end A public utility or owner of a large customer facility may appeal a decision of
the commissioner under paragraph new text begin (a) or new text end (b) deleted text begin , (c), or (d) deleted text end to the commission under subdivision
2. In reviewing a decision of the commissioner under paragraph new text begin (a) or new text end (b), deleted text begin (c), or (d), deleted text end the
commission shall rescind the decision if it finds deleted text begin that the required investments or spending
will:
deleted text end

deleted text begin (1) not result in cost-effective energy conservation improvements; or
deleted text end

deleted text begin (2) otherwise deleted text end new text begin the decision is new text end not deleted text begin be deleted text end in the public interest.

new text begin (e) A public utility is prohibited from spending for or investing in energy conservation
improvements that directly benefit a large energy facility or a large electric customer facility
the commissioner has issued an exemption to under this section.
new text end

Sec. 20.

Minnesota Statutes 2018, section 216B.241, subdivision 1c, is amended to read:

Subd. 1c.

new text begin Public utility; new text end energy-saving goals.

(a) The commissioner shall establish
energy-saving goals for energy conservation improvement expenditures and shall evaluate
an energy conservation improvement program on how well it meets the goals set.

(b) Each individual new text begin public new text end utility deleted text begin and association shall have deleted text end new text begin providing electric service
has new text end an annual energy-savings goal equivalent to deleted text begin 1.5 deleted text end new text begin 1.75 new text end percent of gross annual retail
energy sales unless modified by the commissioner under paragraph deleted text begin (d) deleted text end new text begin (c) new text end . new text begin A public utility
providing natural gas service has an annual energy-savings goal equivalent to one percent
of gross annual retail energy sales, which cannot be modified by the commissioner. new text end The
savings goals must be calculated based on the most recent three-year weather-normalized
average. A new text begin public new text end utility deleted text begin or association deleted text end new text begin providing electric service new text end may elect to carry forward
energy savings in excess of deleted text begin 1.5 deleted text end new text begin 1.75 new text end percent for a year to the succeeding three calendar
years deleted text begin , except that savings from electric utility infrastructure projects allowed under paragraph
(d) may be carried forward for five years deleted text end . new text begin A public utility providing natural gas service may
elect to carry forward energy savings in excess of one percent for a year to the succeeding
three calendar years. new text end A particular energy savings can be used only for one year's goal.

deleted text begin (c) The commissioner must adopt a filing schedule that is designed to have all utilities
and associations operating under an energy-savings plan by calendar year 2010.
deleted text end

deleted text begin (d) deleted text end new text begin (c) new text end In its energy conservation deleted text begin improvement deleted text end new text begin and optimization new text end plan filing, a new text begin public
new text end utility deleted text begin or association deleted text end may request the commissioner to adjust its annual energy-savings
percentage goal based on its historical conservation investment experience, customer class
makeup, load growth, a conservation potential study, or other factors the commissioner
determines warrants an adjustment. The commissioner may not approve a plan of a public
utility that provides for an annual energy-savings goal of less than one percent of gross
annual retail energy sales from energy conservation improvements.

new text begin (d) new text end A new text begin public new text end utility deleted text begin or association deleted text end may include in its energy conservation new text begin and optimization new text end
plan energy savings from electric utility infrastructure projects approved by the commission
under section 216B.1636 or waste heat recovery converted into electricity projects that may
count as energy savings in addition to a minimum energy-savings goal of at least one percent
for energy conservation improvements. deleted text begin Energy savings from electric utility infrastructure
projects, as defined in section 216B.1636, may be included in the energy conservation plan
of a municipal utility or cooperative electric association. deleted text end Electric utility infrastructure projects
must result in increased energy efficiency greater than that which would have occurred
through normal maintenance activity.

deleted text begin (e) An energy-savings goal is not satisfied by attaining the revenue expenditure
requirements of subdivisions 1a and 1b, but can only be satisfied by meeting the
energy-savings goal established in this subdivision.
deleted text end

deleted text begin (f) An association or deleted text end new text begin (e) A public new text end utility is not required to make energy conservation
investments to attain the energy-savings goals of this subdivision that are not cost-effective
even if the investment is necessary to attain the energy-savings goals. For the purpose of
this paragraph, in determining cost-effectiveness, the commissioner shall consider the costs
and benefits to ratepayers, the utility, participants, and society. In addition, the commissioner
shall consider the rate at which deleted text begin an association or deleted text end new text begin a new text end municipal utility is increasing its energy
savings and its expenditures on energy conservation new text begin , as well as the public utility's lifetime
energy savings and cumulative energy savings new text end .

deleted text begin (g) deleted text end new text begin (f) new text end On an annual basis, the commissioner shall produce and make publicly available
a report on the annual energy new text begin and capacity new text end savings and estimated carbon dioxide reductions
achieved by the deleted text begin energy conservation improvement deleted text end programs new text begin under this section and section
216B.2403 new text end for the two most recent years for which data is available. new text begin The report must also
include information regarding any annual energy sales or generation capacity increases
resulting from any efficient fuel-switching improvements. new text end The commissioner shall report
on program performance both in the aggregate and for each entity filing an energy
conservation improvement plan for approval or review by the commissioner new text begin , and must
provide an estimate for progress toward the statewide energy-savings goal under section
216B.2401 new text end .

deleted text begin (h) By January 15, 2010, the commissioner shall report to the legislature whether the
spending requirements under subdivisions 1a and 1b are necessary to achieve the
energy-savings goals established in this subdivision.
deleted text end

deleted text begin (i) This subdivision does not apply to:
deleted text end

deleted text begin (1) a cooperative electric association with fewer than 5,000 members;
deleted text end

deleted text begin (2) a municipal utility with fewer than 1,000 retail electric customers; or
deleted text end

deleted text begin (3) a municipal utility with less than 1,000,000,000 cubic feet in annual throughput sales
to retail natural gas customers.
deleted text end

Sec. 21.

Minnesota Statutes 2018, section 216B.241, subdivision 1d, is amended to read:

Subd. 1d.

Technical assistance.

(a) The commissioner shall evaluate energy conservation
improvement programs new text begin under this section and section 216B.2403 new text end on the basis of
cost-effectiveness and the reliability of the technologies employed. The commissioner shall,
by order, establish, maintain, and update energy-savings assumptions that must be used
when filing energy conservation improvement programs. new text begin The department must track a public
utility's or consumer-owned utility's lifetime energy savings and cumulative lifetime energy
savings provided to the commissioner in plans submitted under this section. new text end The
commissioner shall establish an inventory of the most effective energy conservation
programs, techniques, and technologies, and encourage all Minnesota utilities to implement
them, where appropriate, in their service territories. The commissioner shall describe these
programs in sufficient detail to provide a utility reasonable guidance concerning
implementation. The commissioner shall prioritize the opportunities in order of potential
energy savings and in order of cost-effectiveness. The commissioner may contract with a
third party to carry out any of the commissioner's duties under this subdivision, and to obtain
technical assistance to evaluate the effectiveness of any conservation improvement program.
The commissioner may assess up to $850,000 annually for the purposes of this subdivision.
The assessments must be deposited in the state treasury and credited to the energy and
conservation account created under subdivision 2a. An assessment made under this
subdivision is not subject to the cap on assessments provided by section 216B.62, or any
other law.

(b) deleted text begin Of the assessment authorized under paragraph (a), the commissioner may expend
up to $400,000 annually for the purpose of developing, operating, maintaining, and providing
technical support for a uniform electronic data reporting and tracking system available to
all utilities subject to this section, in order to enable accurate measurement of the cost and
deleted text end deleted text begin energy savings of the energy conservation improvements required by this section. This
paragraph expires June 30, 2018. deleted text end new text begin By March 15 of the year following the enactment of this
section, the commissioner must, by order, develop and publish technical information
necessary to evaluate whether deployment of a fuel-switching improvement meets the
criteria established under subdivision 11, paragraph (c), and section 216B.2403, subdivision
8, including the formula to account for the energy saved by a fuel-switching improvement
on a fuel-neutral basis. The commissioner must update the technical information as necessary.
new text end

Sec. 22.

Minnesota Statutes 2018, section 216B.241, subdivision 1f, is amended to read:

Subd. 1f.

Facilities energy efficiency.

(a) The commissioner of administration and the
commissioner of commerce shall maintain and, as needed, revise the sustainable building
design guidelines developed under section 16B.325.

(b) The commissioner of administration and the commissioner of commerce shall maintain
and update the benchmarking tool developed under Laws 2001, chapter 212, article 1, section
3, so that all public buildings can use the benchmarking tool to maintain energy use
information for the purposes of establishing energy efficiency benchmarks, tracking building
performance, and measuring the results of energy efficiency and conservation improvements.

(c) The commissioner shall require that utilities include in their conservation improvement
plans programs that facilitate professional engineering verification to qualify a building as
Energy Star-labeled, Leadership in Energy and Environmental Design (LEED) certified, or
Green Globes-certified. deleted text begin The state goal is to achieve certification of 1,000 commercial
buildings as Energy Star-labeled, and 100 commercial buildings as LEED-certified or Green
Globes-certified by December 31, 2010.
deleted text end

(d) The commissioner may assess up to $500,000 annually for the purposes of this
subdivision. The assessments must be deposited in the state treasury and credited to the
energy and conservation account created under subdivision 2a. An assessment made under
this subdivision is not subject to the cap on assessments provided by section 216B.62, or
any other law.

Sec. 23.

Minnesota Statutes 2018, section 216B.241, subdivision 2, is amended to read:

Subd. 2.

deleted text begin Programs deleted text end new text begin Public utility; energy conservation and optimization plans new text end .

(a)
The commissioner may require public utilities to make investments and expenditures in
energy conservation improvements, explicitly setting forth the interest rates, prices, and
terms under which the improvements must be offered to the customers. The required
programs must cover no more than a three-year period. Public utilities shall file new text begin energy new text end
conservation deleted text begin improvement deleted text end new text begin and optimization new text end plans by June 1, on a schedule determined by
order of the commissioner, but at least every three years. new text begin As provided in subdivision 11,
plans may include programs for efficient fuel-switching improvements and load management.
An individual utility program may combine elements of energy conservation, load
management, or efficient fuel-switching. new text end Plans received by a public utility by June 1 must
be approved or approved as modified by the commissioner by December 1 of that same
year. new text begin The plan must account for the lifetime energy savings and cumulative lifetime savings
under the plan. new text end The commissioner shall evaluate the program on the basis of
cost-effectiveness and the reliability of technologies employed. The commissioner's order
must provide to the extent practicable for a free choice, by consumers participating in the
program, of the device, method, material, or project constituting the energy conservation
improvement and for a free choice of the seller, installer, or contractor of the energy
conservation improvement, provided that the device, method, material, or project seller,
installer, or contractor is duly licensed, certified, approved, or qualified, including under
the residential conservation services program, where applicable.

(b) The commissioner may require a utility subject to subdivision 1c to make an energy
conservation improvement investment or expenditure whenever the commissioner finds
that the improvement will result in energy savings at a total cost to the utility less than the
cost to the utility to produce or purchase an equivalent amount of new supply of energy.
deleted text begin The commissioner shall nevertheless ensure that every public utility operate one or more
programs under periodic review by the department.
deleted text end

(c) Each public utility subject to new text begin this new text end subdivision deleted text begin 1a deleted text end may spend and invest annually up
to ten percent of the total amount deleted text begin required to be deleted text end spent and invested on energy conservation
improvements under this section by the utility on research and development projects that
meet the definition of energy conservation improvement in subdivision 1 and that are funded
directly by the public utility.

(d) deleted text begin A public utility may not spend for or invest in energy conservation improvements
that directly benefit a large energy facility or a large electric customer facility for which the
commissioner has issued an exemption pursuant to subdivision 1a, paragraph (b). deleted text end The
commissioner shall consider and may require a new text begin public new text end utility to undertake a program
suggested by an outside source, including a political subdivision, a nonprofit corporation,
or community organization.

(e) A utility, a political subdivision, or a nonprofit or community organization that has
suggested a program, the attorney general acting on behalf of consumers and small business
interests, or a utility customer that has suggested a program and is not represented by the
attorney general under section 8.33 may petition the commission to modify or revoke a
department decision under this section, and the commission may do so if it determines that
the program is not cost-effective, does not adequately address the residential conservation
improvement needs of low-income persons, has a long-range negative effect on one or more
classes of customers, or is otherwise not in the public interest. The commission shall reject
a petition that, on its face, fails to make a reasonable argument that a program is not in the
public interest.

(f) The commissioner may order a public utility to include, with the filing of the utility's
annual status report, the results of an independent audit of the utility's conservation
improvement programs and expenditures performed by the department or an auditor with
experience in the provision of energy conservation and energy efficiency services approved
by the commissioner and chosen by the utility. The audit must specify the energy savings
or increased efficiency in the use of energy within the service territory of the utility that is
the result of the spending and investments. The audit must evaluate the cost-effectiveness
of the utility's conservation programs.

deleted text begin (g) A gas utility may not spend for or invest in energy conservation improvements that
directly benefit a large customer facility or commercial gas customer facility for which the
commissioner has issued an exemption pursuant to subdivision 1a, paragraph (b), (c), or
(e). The commissioner shall consider and may require a utility to undertake a program
suggested by an outside source, including a political subdivision, a nonprofit corporation,
or a community organization.
deleted text end

new text begin (g) The energy conservation and optimization plan for each public utility subject to this
section must include a component focused on improving energy efficiency in public schools
served by the utility. At a minimum, the efficiency in schools component must consist of
programs to update lighting in schools, update heating and cooling systems in schools,
provide for building recommissioning, provide building operator training, and provide
opportunities to educate students, teachers, and staff regarding energy efficiency measures
implemented at the school, including the associated benefits for improved learning resulting
from the measures.
new text end

Sec. 24.

Minnesota Statutes 2018, section 216B.241, subdivision 2b, is amended to read:

Subd. 2b.

Recovery of expenses.

The commission shall allow a new text begin public new text end utility to recover
expenses resulting from deleted text begin a deleted text end new text begin an energy new text end conservation deleted text begin improvement program required deleted text end new text begin and
optimization plan approved new text end by the department new text begin under this section new text end and contributions and
assessments to the energy and conservation account, unless the recovery would be
inconsistent with a financial incentive proposal approved by the commission. deleted text begin The commission
shall allow a cooperative electric association subject to rate regulation under section
216B.026, to recover expenses resulting from energy conservation improvement programs,
load management programs, and assessments and contributions to deleted text end deleted text begin the energy and
conservation account unless the recovery would be inconsistent with a financial incentive
proposal approved by the commission. deleted text end In addition, a new text begin public new text end utility may file annually, or the
Public Utilities Commission may require the utility to file, and the commission may approve,
rate schedules containing provisions for the automatic adjustment of charges for utility
service in direct relation to changes in the expenses of the utility for real and personal
property taxes, fees, and permits, the amounts of which the utility cannot control. A public
utility is eligible to file for adjustment for real and personal property taxes, fees, and permits
under this subdivision only if, in the year previous to the year in which it files for adjustment,
it has spent or invested at least 1.75 percent of its gross revenues from provision of electric
service, excluding gross operating revenues from electric service provided in the state to
large electric customer facilities for which the commissioner has issued an exemption under
subdivision 1a, paragraph (b), and 0.6 percent of its gross revenues from provision of gas
service, excluding gross operating revenues from gas services provided in the state to large
electric customer facilities for which the commissioner has issued an exemption under
subdivision 1a, paragraph (b), for that year for energy conservation improvements under
this section.

Sec. 25.

Minnesota Statutes 2018, section 216B.241, subdivision 3, is amended to read:

Subd. 3.

Ownership of energy conservation improvement.

deleted text begin An deleted text end new text begin A preweatherization
measure or new text end energy conservation improvement made to or installed in a building in accordance
with this section, except systems owned by the utility and designed to turn off, limit, or vary
the delivery of energy, are the exclusive property of the owner of the building except to the
extent that the improvement is subjected to a security interest in favor of the utility in case
of a loan to the building owner. The utility has no liability for loss, damage or injury caused
directly or indirectly by deleted text begin an deleted text end new text begin a preweatherization measure or new text end energy conservation improvement
except for negligence by the utility in purchase, installation, or modification of the product.

Sec. 26.

Minnesota Statutes 2018, section 216B.241, subdivision 5, is amended to read:

Subd. 5.

Efficient lighting program.

(a) Each public utility, cooperative electric
association, and municipal utility that provides electric service to retail customers and is
subject to subdivision 1c shall include as part of its conservation improvement activities a
program to strongly encourage the use of deleted text begin fluorescent and high-intensity discharge lamps deleted text end new text begin
light-emitting diode lighting products new text end . The program must include at least a public information
campaign to encourage use of the lamps and proper management of spent lamps by all
customer classifications.

(b) A public utility that provides electric service at retail to 200,000 or more customers
shall establish, either directly or through contracts with other persons, including lamp
manufacturers, distributors, wholesalers, and retailers and local government units, a system
to collect for delivery to a reclamation or recycling facility spent fluorescent and
high-intensity discharge lamps from households and from small businesses as defined in
section 645.445 that generate an average of fewer than ten spent lamps per year.

(c) A collection system must include establishing reasonably convenient locations for
collecting spent lamps from households and financial incentives sufficient to encourage
spent lamp generators to take the lamps to the collection locations. Financial incentives may
include coupons for purchase of new fluorescent or high-intensity discharge lamps, a cash
back system, or any other financial incentive or group of incentives designed to collect the
maximum number of spent lamps from households and small businesses that is reasonably
feasible.

(d) A public utility that provides electric service at retail to fewer than 200,000 customers,
a cooperative electric association, or a municipal utility that provides electric service at
retail to customers may establish a collection system under paragraphs (b) and (c) as part
of conservation improvement activities required under this section.

(e) The commissioner of the Pollution Control Agency may not, unless clearly required
by federal law, require a public utility, cooperative electric association, or municipality that
establishes a household fluorescent and high-intensity discharge lamp collection system
under this section to manage the lamps as hazardous waste as long as the lamps are managed
to avoid breakage and are delivered to a recycling or reclamation facility that removes
mercury and other toxic materials contained in the lamps prior to placement of the lamps
in solid waste.

(f) If a public utility, cooperative electric association, or municipal utility contracts with
a local government unit to provide a collection system under this subdivision, the contract
must provide for payment to the local government unit of all the unit's incremental costs of
collecting and managing spent lamps.

(g) All the costs incurred by a public utility, cooperative electric association, or municipal
utility for promotion and collection of fluorescent and high-intensity discharge lamps under
this subdivision are conservation improvement spending under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 27.

Minnesota Statutes 2018, section 216B.241, subdivision 7, is amended to read:

Subd. 7.

Low-income programs.

(a) The commissioner shall ensure that each new text begin public
new text end utility deleted text begin and association deleted text end subject to subdivision 1c provides deleted text begin low-income deleted text end new text begin energy conservation new text end
programs new text begin to low-income households new text end . When approving spending and energy-savings goals
for low-income programs, the commissioner shall consider historic spending and participation
levels, energy savings for low-income programs, and the number of low-income persons
residing in the utility's service territory. A deleted text begin municipal utility that furnishes gas service must
spend at least 0.2 percent, and a deleted text end public utility furnishing gas service must spend at least deleted text begin 0.4 deleted text end new text begin
0.8 new text end percent, of its most recent three-year average gross operating revenue from residential
customers in the state on low-income programs. deleted text begin A utility or association that furnishes electric
service must spend at least deleted text end deleted text begin 0.1 deleted text end deleted text begin percent of its gross operating revenue from residential
customers in the state on low-income deleted text end deleted text begin programs. deleted text end deleted text begin For a generation and transmission
cooperative association, this requirement shall apply to each association's members' aggregate
gross operating revenue from sale of electricity to residential customers in the state.
Beginning in 2010, A utility or association that furnishes electric service must spend 0.2
percent of its gross operating revenue from residential customers in the state on low-income
programs.
deleted text end

(b) To meet the requirements of paragraph (a), a new text begin public new text end utility deleted text begin or association deleted text end may
contribute money to the energy and conservation account. An energy conservation
improvement plan must state the amount, if any, of low-income energy conservation
improvement funds the new text begin public new text end utility deleted text begin or association deleted text end will contribute to the energy and
conservation account. Contributions must be remitted to the commissioner by February 1
of each year.

(c) The commissioner shall establish low-income programs to utilize money contributed
to the energy and conservation account under paragraph (b). In establishing low-income
programs, the commissioner shall consult political subdivisions, utilities, and nonprofit and
community organizations, especially organizations engaged in providing energy and
weatherization assistance to low-income deleted text begin persons deleted text end new text begin households new text end . Money contributed to the
energy and conservation account under paragraph (b) must provide programs for low-income
deleted text begin persons deleted text end new text begin households new text end , including low-income renters, in the service territory of the new text begin public
new text end utility deleted text begin or association deleted text end providing the money. The commissioner shall record and report
expenditures and energy savings achieved as a result of low-income programs funded
through the energy and conservation account in the report required under subdivision 1c,
paragraph (g). The commissioner may contract with a political subdivision, nonprofit or
community organization, public utility, municipality, or cooperative electric association to
implement low-income programs funded through the energy and conservation account.

(d) A new text begin public new text end utility deleted text begin or association deleted text end may petition the commissioner to modify its required
spending under paragraph (a) if the utility or association and the commissioner have been
unable to expend the amount required under paragraph (a) for three consecutive years.

new text begin (e) For purposes of this subdivision, "multifamily building" is defined as a residential
building with five or more dwelling units. Notwithstanding the definition of low-income
household in section 216B.2402, for purposes of determining eligibility for multifamily
buildings in low-income programs, a utility or association may use one or more of the
following:
new text end

new text begin (1) information demonstrating a multifamily building's units are rented to households
meeting one of the following criteria:
new text end

new text begin (i) household income at or below 200 percent of federal poverty level;
new text end

new text begin (ii) household income at or below 60 percent of area median income;
new text end

new text begin (iii) occupancy within a building that is certified on the Low Income Renter Classification
(LIRC) Assessor Report compiled annually by Minnesota Housing Finance Agency; or
new text end

new text begin (iv) occupancy within a building which has a declaration against the property requiring
that a portion of the units are rented to tenants with an annual household income less than
or equal to 60 percent of area median income;
new text end

new text begin (2) a property's participation in an affordable housing program, including low-income
housing tax credits (LIHTC), United States Department of Housing and Urban Development
(HUD) assistance, United States Department of Agriculture (USDA) assistance, state housing
finance agency assistance, or local tax abatement for low-income properties; or
new text end

new text begin (3) documentation demonstrating that the property is on the waiting list for or currently
participating in the United States Department of Energy Weatherization Assistance Program.
new text end

new text begin (f) Up to 15 percent of a public utility's spending on low-income programs may be spent
on preweatherization measures. For purposes of this section and section 216B.241,
subdivision 3, "preweatherization measure" means an improvement that is necessary to
allow energy conservation improvements to be installed in a home.
new text end

new text begin (1) The commissioner must, by order, establish a list of qualifying preweatherization
measures eligible for inclusion in low-income programs no later than March 15 of the year
following enactment of this section.
new text end

new text begin (2) A public utility may elect to contribute money to the Healthy Asbestos Insulation
Removal (AIR) program administered by the department. Money contributed to the fund
counts toward the minimum low-income spending requirement in paragraph (a) and toward
the cap on preweatherization measures.
new text end

deleted text begin (e) deleted text end new text begin (g) new text end The costs and benefits associated with any approved low-income gas or electric
conservation improvement program that is not cost-effective when considering the costs
and benefits to the utility may, at the discretion of the utility, be excluded from the calculation
of net economic benefits for purposes of calculating the financial incentive to the utility.
The energy and demand savings may, at the discretion of the utility, be applied toward the
calculation of overall portfolio energy and demand savings for purposes of determining
progress toward annual goals and in the financial incentive mechanism.

Sec. 28.

Minnesota Statutes 2018, section 216B.241, subdivision 9, is amended to read:

Subd. 9.

Building performance standards; Sustainable Building 2030.

(a) The purpose
of this subdivision is to establish cost-effective energy-efficiency performance standards
for new and substantially reconstructed commercial, industrial, and institutional buildings
that can significantly reduce carbon dioxide emissions by lowering energy use in new and
substantially reconstructed buildings. For the purposes of this subdivision, the establishment
of these standards may be referred to as Sustainable Building 2030.

(b) The commissioner shall contract with the Center for Sustainable Building Research
at the University of Minnesota to coordinate development and implementation of
energy-efficiency performance standards, strategic planning, research, data analysis,
technology transfer, training, and other activities related to the purpose of Sustainable
Building 2030. The commissioner and the Center for Sustainable Building Research shall,
in consultation with utilities, builders, developers, building operators, and experts in building
design and technology, develop a Sustainable Building 2030 implementation plan that must
address, at a minimum, the following issues:

(1) training architects to incorporate the performance standards in building design;

(2) incorporating the performance standards in utility conservation improvement
programs; and

(3) developing procedures for ongoing monitoring of energy use in buildings that have
adopted the performance standards.

The plan must be submitted to the chairs and ranking minority members of the senate and
house of representatives committees with primary jurisdiction over energy policy by July
1, 2009.

(c) Sustainable Building 2030 energy-efficiency performance standards must be firm,
quantitative measures of total building energy use and associated carbon dioxide emissions
per square foot for different building types and uses, that allow for accurate determinations
of a building's conformance with a performance standard. Performance standards must
address energy use by electric vehicle charging infrastructure in or adjacent to buildings as
that infrastructure begins to be made widely available. The energy-efficiency performance
standards must be updated every three or five years to incorporate all cost-effective measures.
The performance standards must reflect the reductions in carbon dioxide emissions per
square foot resulting from actions taken by utilities to comply with the renewable energy
standards in section 216B.1691. The performance standards should be designed to achieve
reductions equivalent to the following reduction schedule, measured against energy
consumption by an average building in each applicable building sector in 2003: (1) 60
percent in 2010; (2) 70 percent in 2015; (3) 80 percent in 2020; and (4) 90 percent in 2025.
A performance standard must not be established or increased absent a conclusive engineering
analysis that it is cost-effective based upon established practices used in evaluating utility
conservation improvement programs.

(d) The annual amount of the contract with the Center for Sustainable Building Research
is up to $500,000. The Center for Sustainable Building Research shall expend no more than
$150,000 of this amount each year on administration, coordination, and oversight activities
related to Sustainable Building 2030. new text begin Up to an additional $150,000 of this amount may be
used by the Center for Sustainable Building Research to provide technical assistance to
local jurisdictions that adopt a voluntary stretch code under section 326B.106, subdivision
16, that conforms to Sustainable Building 2030. new text end The balance of contract funds must be spent
on substantive programmatic activities allowed under this subdivision that may be conducted
by the Center for Sustainable Building Research and others, and for subcontracts with
not-for-profit energy organizations, architecture and engineering firms, and other qualified
entities to undertake technical projects and activities in support of Sustainable Building
2030. The primary work to be accomplished each year by qualified technical experts under
subcontracts is the development and thorough justification of recommendations for specific
energy-efficiency performance standards. Additional work may include:

(1) research, development, and demonstration of new energy-efficiency technologies
and techniques suitable for commercial, industrial, and institutional buildings;

(2) analysis and evaluation of practices in building design, construction, commissioning
and operations, and analysis and evaluation of energy use in the commercial, industrial, and
institutional sectors;

(3) analysis and evaluation of the effectiveness and cost-effectiveness of Sustainable
Building 2030 performance standards, conservation improvement programs, and building
energy codes;

(4) development and delivery of training programs for architects, engineers,
commissioning agents, technicians, contractors, equipment suppliers, developers, and others
in the building industries; and

(5) analysis and evaluation of the effect of building operations on energy use.

(e) The commissioner shall require utilities to develop and implement conservation
improvement programs that are expressly designed to achieve energy efficiency goals
consistent with the Sustainable Building 2030 performance standards. These programs must
include offerings of design assistance and modeling, financial incentives, and the verification
of the proper installation of energy-efficient design components in new and substantially
reconstructed buildings. new text begin The programs must be available to customers in local jurisdictions
that adopt a voluntary stretch code under section 326B.106, subdivision 16. new text end A utility's design
assistance program must consider the strategic planting of trees and shrubs around buildings
as an energy conservation strategy for the designed project. A utility making an expenditure
under its conservation improvement program that results in a building meeting the Sustainable
Building 2030 performance standards may claim the energy savings toward its energy-savings
goal established in subdivision 1c.

(f) The commissioner shall report to the legislature every three years, beginning January
15, 2010, on the cost-effectiveness and progress of implementing the Sustainable Building
2030 performance standards and shall make recommendations on the need to continue the
program as described in this section.

Sec. 29.

Minnesota Statutes 2018, section 216B.241, is amended by adding a subdivision
to read:

new text begin Subd. 11. new text end

new text begin Programs for efficient fuel-switching improvements and load
management. new text end

new text begin (a) A public utility subject to this section may include in its plan required
under subdivision 2 programs for (1) efficient fuel-switching improvements and load
management, or (2) combinations of energy conservation improvements, fuel-switching
improvements, and load management. For each program, the utility must provide proposed
budgets, cost-effectiveness analyses, and estimated net energy and demand savings.
new text end

new text begin (b) The department may approve proposed programs for efficient fuel-switching
improvements if it finds the improvements meet the requirements of paragraph (e). For
improvements requiring the deployment of electric technologies, the department must also
consider whether the fuel-switching improvement can be operated in a manner that facilitates
the integration of variable renewable energy into the electric system. The net benefits from
an efficient fuel-switching improvement that is integrated with an energy efficiency program
approved under this section may be counted toward the net benefits of the energy efficiency
program, provided the department finds the primary purpose and effect of the program is
energy efficiency.
new text end

new text begin (c) The department may approve a proposed program in load management if it finds the
program investment is cost-effective after considering the costs and benefits of the proposed
investment to ratepayers, the utility, participants, and society. The net benefits from a load
management activity that is integrated with an energy efficiency program approved under
this section may be counted toward the net benefits of the energy efficiency program,
provided the department finds the primary purpose and effect of the program is energy
efficiency.
new text end

new text begin (d) The commission may permit a public utility to file rate schedules that provide for
annual cost recovery for efficient fuel-switching improvements and cost-effective load
management programs approved by the department, including reasonable and prudent costs
to implement and promote programs approved under this subdivision. The commission may
approve, modify, or reject a proposal made by the department or a utility for an incentive
plan to encourage investments in load management programs, applying the considerations
established under section 216B.16, subdivision 6c, paragraphs (b) and (c). The commission
must not approve a financial incentive to encourage efficient fuel-switching programs. An
incentive plan to encourage cost-effective load management programs may be structured
as a regulatory asset on which a public utility could earn a rate of return. A utility is not
eligible for a financial incentive under this subdivision in any year the utility or association
does not achieve its minimum energy-savings goal.
new text end

new text begin (e) A fuel-switching improvement is deemed efficient if the commissioner finds the
improvement, relative to the fuel that is being displaced, meets the following criteria:
new text end

new text begin (1) results in a net reduction in the cost and amount of source energy consumed for a
particular use, measured on a fuel-neutral basis;
new text end

new text begin (2) results in a net reduction of statewide greenhouse gas emissions as defined in section
216H.01, subdivision 2, over the lifetime of the improvement. For an efficient fuel-switching
improvement installed by an electric utility, the change in emissions must be measured
based on the hourly emission profile of the electric utility, using the hourly emissions profile
in the most recent resource plan approved by the commission under section 216B.2422;
new text end

new text begin (3) is cost-effective from a societal perspective, considering the costs associated with
both the fuel that was used and the fuel that will be used; and
new text end

new text begin (4) is installed and operated in a manner that does not unduly increase the utility's system
peak demand or require significant new investment in utility infrastructure.
new text end

Sec. 30.

Minnesota Statutes 2018, section 216B.2422, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, the terms defined in this
subdivision have the meanings given them.

(b) "Utility" means an entity with the capability of generating 100,000 kilowatts or more
of electric power and serving, either directly or indirectly, the needs of 10,000 retail
customers in Minnesota. Utility does not include federal power agencies.

(c) "Renewable energy" means electricity generated through use of any of the following
resources:

(1) wind;

(2) solar;

(3) geothermal;

(4) hydro;

(5) trees or other vegetation;

(6) landfill gas; or

(7) predominantly organic components of wastewater effluent, sludge, or related
by-products from publicly owned treatment works, but not including incineration of
wastewater sludge.

(d) "Resource plan" means a set of resource options that a utility could use to meet the
service needs of its customers over a forecast period, including an explanation of the supply
and demand circumstances under which, and the extent to which, each resource option
would be used to meet those service needs. These resource options include using,
refurbishing, and constructing utility plant and equipment, buying power generated by other
entities, controlling customer loads, and implementing customer energy conservation.

(e) "Refurbish" means to rebuild or substantially modify an existing electricity generating
resource of 30 megawatts or greater.

new text begin (f) "Clean energy resource" means renewable energy, an energy storage system, energy
efficiency, as defined in section 216B.2402, paragraph (g), or load management, as defined
in section 216B.2402, paragraph (o).
new text end

new text begin (g) "Carbon-free resource" means a generation technology that, when operating, does
not contribute to statewide greenhouse gas emissions, as defined in section 216H.01,
subdivision 2. Carbon-free resource does not include a nuclear-powered electric generation
facility operating in Minnesota on the effective date of this act.
new text end

new text begin (h) "Energy storage system" means a commercially available technology that:
new text end

new text begin (1) uses mechanical, chemical, or thermal processes to:
new text end

new text begin (i) store energy and deliver the stored energy for use at a later time; or
new text end

new text begin (ii) store thermal energy for direct use for heating or cooling at a later time in a manner
that reduces the demand for energy at the later time;
new text end

new text begin (2) if being used for electric grid benefits, is:
new text end

new text begin (i) operationally visible to the distribution or transmission entity managing it; and
new text end

new text begin (ii) capable of being controlled by the distribution or transmission entity to enable and
optimize the safe and reliable operation of the electric system; and
new text end

new text begin (3) achieves any of the following:
new text end

new text begin (i) reduces peak electrical demand;
new text end

new text begin (ii) defers the need or substitutes for an investment in electric generation, transmission,
or distribution assets;
new text end

new text begin (iii) improves the reliable operation of the electrical transmission or distribution systems;
or
new text end

new text begin (iv) lowers customer costs by storing energy when the cost of generating or purchasing
energy is low and delivering energy to customers when costs are high.
new text end

new text begin (i) "Nonrenewable energy facility" means a generation facility, other than a nuclear
facility, that does not use a renewable energy or other clean energy resource.
new text end

new text begin (j) "Local job impacts" means the impacts of an integrated resource plan, a certificate
of need, a power purchase agreement, or commission approval of a new or refurbished
electric generation facility on the availability of high-quality construction and mining
employment opportunities for local workers.
new text end

new text begin (k) "Local workers" means workers employed to construct and maintain energy
infrastructure, or employed in a mining industry, that are Minnesota residents, residents of
the utility's service territory, or who permanently reside within 150 miles of a proposed new
or refurbished energy facility.
new text end

Sec. 31.

Minnesota Statutes 2018, section 216B.2422, subdivision 2, is amended to read:

Subd. 2.

Resource plan filing and approval.

(a) A utility shall file a resource plan with
the commission periodically in accordance with rules adopted by the commission. The
commission shall approve, reject, or modify the plan of a public utility, as defined in section
216B.02, subdivision 4, consistent with the public interest.

(b) In the resource plan proceedings of all other utilities, the commission's order shall
be advisory and the order's findings and conclusions shall constitute prima facie evidence
which may be rebutted by substantial evidence in all other proceedings. With respect to
utilities other than those defined in section 216B.02, subdivision 4, the commission shall
consider the filing requirements and decisions in any comparable proceedings in another
jurisdiction.

(c) As a part of its resource plan filing, a utility shall include the least cost plan for
meeting 50 deleted text begin and deleted text end new text begin , new text end 75 new text begin , and 100 new text end percent of all energy needs from both new and refurbished
generating facilities through a combination of deleted text begin conservation deleted text end new text begin clean energy new text end and deleted text begin renewable
energy deleted text end new text begin carbon-free new text end resources.

Sec. 32.

Minnesota Statutes 2018, section 216B.2422, subdivision 3, is amended to read:

Subd. 3.

Environmental costs.

deleted text begin (a) deleted text end The commission shall, to the extent practicable,
quantify and establish a range of environmental costs associated with each method of
electricity generation. A utility shall use the values established by the commission in
conjunction with other external factors, including socioeconomic costs, when evaluating
and selecting resource options in all proceedings before the commission, including new text begin power
purchase agreement, new text end resource plan new text begin , new text end and certificate of need proceedings. new text begin When evaluating
resource options, the commission must include and consider the environmental cost values
adopted under this subdivision. When considering the costs of a nonrenewable energy
facility under this section, the commission must consider only nonzero values for the
environmental costs that must be analyzed under this subdivision, including both the low
and high values of any cost range adopted by the commission.
new text end

deleted text begin (b) The commission shall establish interim environmental cost values associated with
each method of electricity generation by March 1, 1994. These values expire on the date
the commission establishes environmental cost values under paragraph (a).
deleted text end

Sec. 33.

Minnesota Statutes 2018, section 216B.2422, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Favored energy resources; state policy. new text end

new text begin It is the policy of the state that, in
order to hasten the achievement of the greenhouse gas reduction goals under section 216H.02,
the renewable energy standard under section 216B.1691, subdivision 2a, and the solar energy
standard under section 216B.1691, subdivision 2f, and given the significant and continuing
reductions in the cost of wind technologies, solar technologies, energy storage systems, and
demand-response technologies, the favored method to meet energy demand in Minnesota
is a combination of clean energy resources.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 34.

Minnesota Statutes 2018, section 216B.2422, is amended by adding a subdivision
to read:

new text begin Subd. 3b. new text end

new text begin Nonrenewable energy facility; required analysis. new text end

new text begin (a) In its application
requesting commission approval of the construction, refurbishing, or purchase of energy or
capacity from a nonrenewable energy facility in an integrated resource plan, a power purchase
agreement, or any other proceeding, a utility must include, at a minimum, the information
required under this subdivision.
new text end

new text begin (b) A utility must include plans to meet 50, 75, and 100 percent of the energy or capacity
provided by the proposed nonrenewable energy facility using the least costly combination
of clean energy resources.
new text end

new text begin (c) When analyzing costs under this subdivision, a utility must include the environmental
costs most recently adopted by the commission for carbon dioxide emissions and criteria
air pollutants, and socioeconomic costs required under subdivision 3, using both the low
and high ends of any cost range adopted by the commission. When considering the costs
of a nonrenewable energy facility under this section, the commission must consider only
nonzero values for the environmental costs that must be analyzed under subdivision 3,
including both the low and high values of any cost range adopted by the commission.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 35.

Minnesota Statutes 2018, section 216B.2422, subdivision 4, is amended to read:

Subd. 4.

Preference for deleted text begin renewable energy facility deleted text end new text begin clean energy resources new text end .

new text begin (a) In order
to achieve the greenhouse gas reduction goals under section 216H.02, and the carbon-free
standard under section 216B.1691, new text end the commission shall not approve a new or refurbished
nonrenewable energy facility in an integrated resource plan or a certificate of need, deleted text begin pursuant
to deleted text end new text begin under new text end section 216B.243 deleted text begin , deleted text end new text begin or in any proceeding in which a utility seeks to construct an
electric generating facility or procure electricity or capacity, new text end nor shall the commission new text begin
approve a power purchase agreement for power with a nonrenewable energy facility, or new text end
allow rate recovery deleted text begin pursuant to deleted text end new text begin under new text end section 216B.16 for such a nonrenewable energy
facility, unless the utility has demonstrated new text begin by clear and convincing evidence new text end that a renewable
energy facility new text begin , alone or in combination with other clean energy resources, new text end is not in the
public interest. deleted text begin When making the public interest determination, the commission must
consider:
deleted text end

deleted text begin (1) whether the resource plan helps the utility achieve the greenhouse gas reduction
goals under section 216H.02, the renewable energy standard under section 216B.1691, or
the solar energy standard under section 216B.1691, subdivision 2f;
deleted text end

deleted text begin (2) impacts on local and regional grid reliability;
deleted text end

deleted text begin (3) utility and ratepayer impacts resulting from the intermittent nature of renewable
energy facilities, including but not limited to the costs of purchasing wholesale electricity
in the market and the costs of providing ancillary services; and
deleted text end

deleted text begin (4) utility and ratepayer impacts resulting from reduced exposure to fuel price volatility,
changes in transmission costs, portfolio diversification, and environmental compliance
costs.
deleted text end

new text begin (b) In order to find that a renewable energy facility, alone or in combination with other
clean energy resources, is not in the public interest, the commission must find by clear and
convincing evidence that utilizing renewable or clean energy resources to meet the need
for resources cannot be done affordably or reliably.
new text end

new text begin (c) To determine affordability, the commission must consider utility and ratepayer effects
resulting from:
new text end

new text begin (1) the intermittent nature of renewable energy facilities, including but not limited to
the costs to purchase wholesale electricity in the market and the costs to provide ancillary
services;
new text end

new text begin (2) reduced exposure to fuel price volatility, changes in transmission and distribution
costs, portfolio diversification, and environmental compliance costs; and
new text end

new text begin (3) other environmental costs of a nonrenewable energy facility, as determined by the
commission under subdivision 3.
new text end

new text begin (d) To determine reliability, the commission must consider:
new text end

new text begin (1) effects on regional grid reliability; and
new text end

new text begin (2) the ability of the proposed energy resources or facilities to provide:
new text end

new text begin (i) essential reliability services, including frequency response, balancing services, and
voltage control; and
new text end

new text begin (ii) energy and capacity.
new text end

new text begin (e) When considering the costs of a nonrenewable energy facility under this section, the
commission must consider only nonzero values for the environmental costs that must be
analyzed under subdivision 3, including both the low and high values of any cost range
adopted by the commission.
new text end

new text begin (f) The commission must make a written determination of its findings and conclusions
regarding affordability and reliability under this subdivision. The commission must also
make a written determination as to whether the energy resources approved by the
commission: (1) help the state achieve the greenhouse gas reduction goals under section
216H.02; and (2) help the utility achieve the renewable energy standard under section
216B.1691, or the solar energy standard under section 216B.1691, subdivision 2f.
new text end

new text begin (g) If the commission approves a resource plan that includes the retirement of a
nonrenewable energy facility owned by a public utility, the public utility owns at least an
amount of the accredited capacity of clean energy resources equal to the percentage of the
retiring nonrenewable energy facility that remains undepreciated multiplied by the accredited
capacity of the retiring facility, and owns the transmission and other facilities necessary to
replace the accredited capacity of the retiring facility, provided:
new text end

new text begin (1) the utility demonstrates its ownership of replacement resources is in the public
interest, considering customer impacts and benefits; and
new text end

new text begin (2) the resource plan results in the utility meeting the standards described below:
new text end

new text begin (i) for an electric utility that owned a nuclear generating facility as of January 1, 2007,
at least 85 percent of its electric supply by the year 2030 and thereafter, and 100 percent of
its electric supply by the year 2045, from resources that do not contribute to statewide
greenhouse gas emissions, as defined in section 216H.01, subdivision 2; and
new text end

new text begin (ii) for an electric utility that did not own a nuclear generating facility as of January 1,
2007, at least 80 percent of its electric supply by the year 2030 and thereafter, and 100
percent of its electric supply by the year 2050, from resources that do not contribute to
statewide greenhouse gas emissions, as defined in section 216H.01, subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 36.

Minnesota Statutes 2018, section 216B.2422, is amended by adding a subdivision
to read:

new text begin Subd. 4a. new text end

new text begin Preference for local job creation. new text end

new text begin As a part of its resource plan filing, a utility
must report on associated local job impacts and the steps the utility and its energy suppliers
and contractors are taking to maximize the availability of construction employment
opportunities for local workers. The commission must consider local job impacts and give
preference to proposals that maximize the creation of construction employment opportunities
for local workers, consistent with the public interest, when evaluating any utility proposal
that involves the selection or construction of facilities used to generate or deliver energy to
serve the utility's customers, including but not limited to a certificate of need, a power
purchase agreement, or commission approval of a new or refurbished electric generation
facility.
new text end

Sec. 37.

Minnesota Statutes 2018, section 216B.2422, subdivision 5, is amended to read:

Subd. 5.

Bidding; exemption from certificate of need proceeding.

(a) A utility may
select resources to meet its projected energy demand through a bidding process approved
or established by the commission. A utility shall use the environmental cost estimates
determined under subdivision 3 new text begin and consider local job impacts new text end in evaluating bids submitted
in a process established under this subdivision.

(b) Notwithstanding any other provision of this section, if an electric power generating
plant, as described in section 216B.2421, subdivision 2, clause (1), is selected in a bidding
process approved or established by the commission, a certificate of need proceeding under
section 216B.243 is not required.

(c) A certificate of need proceeding is also not required for an electric power generating
plant that has been selected in a bidding process approved or established by the commission,
or such other selection process approved by the commission, to satisfy, in whole or in part,
the wind power mandate of section 216B.2423 or the biomass mandate of section 216B.2424.

Sec. 38.

Minnesota Statutes 2018, section 216B.2422, is amended by adding a subdivision
to read:

new text begin Subd. 7. new text end

new text begin Energy storage systems assessment. new text end

new text begin (a) Each public utility required to file a
resource plan under subdivision 2 must include in the filing an assessment of energy storage
systems that analyzes how the deployment of energy storage systems contributes to:
new text end

new text begin (1) meeting identified generation and capacity needs; and
new text end

new text begin (2) evaluating ancillary services.
new text end

new text begin (b) The assessment must employ appropriate modeling methods to enable the analysis
required in paragraph (a).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 39.

new text begin [216B.2427] ELECTRIC UTILITIES; ANCILLARY SERVICES COST
REPORT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Ancillary services" means services that help maintain the reliability of the electrical
grid by maintaining the proper flow and direction of electricity, addressing temporary
imbalances of supply and demand, and helping the electrical grid to recover after a power
failure. Ancillary services include but are not limited to spinning reserves, nonspinning
reserves, voltage regulation, load following, and black start capability.
new text end

new text begin (c) "Black start capability" means the provision of the initial energy needed to start up
and begin operation of an electricity generator.
new text end

new text begin (d) "Load following" means the matching, within five minutes or less, of electricity
supply to demand as demand fluctuates.
new text end

new text begin (e) "Nonspinning reserves" means electric generation capacity that is not connected to
the electric grid, but is capable of:
new text end

new text begin (1) being connected, ramped to capacity, and synchronized to the electric grid within
ten minutes; and
new text end

new text begin (2) maintaining a specified output level for at least two hours.
new text end

new text begin (f) "Spinning reserves" means reserve electric generation capacity that is connected and
synchronized to the electric grid and can meet electric demand within ten minutes.
new text end

new text begin (g) "Voltage regulation" means the maintenance of voltage levels on the electric grid.
new text end

new text begin Subd. 2. new text end

new text begin Report. new text end

new text begin By October 1, 2019, and each April 1 thereafter, each electric utility
must report to the commission on a form developed by the commission the total cost to
purchase or self-provide ancillary services throughout the previous calendar year. For each
type of ancillary service, the utility must report:
new text end

new text begin (1) the entity providing the ancillary service;
new text end

new text begin (2) the amount, duration, and frequency of the ancillary service provided; and
new text end

new text begin (3) the cost to purchase or provide the ancillary service.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 40.

Minnesota Statutes 2018, section 216B.243, subdivision 3, is amended to read:

Subd. 3.

Showing required for construction.

new text begin (a) new text end No proposed large energy facility
shall be certified for construction unless the applicant can show that demand for electricity
cannot be met more cost effectively through energy conservation new text begin , energy storage, new text end and
load-management measures and unless the applicant has otherwise justified its need. In
assessing need, the commission shall evaluate:

(1) the accuracy of the long-range energy demand forecasts on which the necessity for
the facility is based;

(2) the effect of existing or possible energy conservation programs under sections 216C.05
to 216C.30 and this section or other federal or state legislation on long-term energy demand;

(3) the relationship of the proposed facility to overall state energy needs, as described
in the most recent state energy policy and conservation report prepared under section
216C.18, or, in the case of a high-voltage transmission line, the relationship of the proposed
line to regional energy needs, as presented in the transmission plan submitted under section
216B.2425;

(4) promotional activities that may have given rise to the demand for this facility;

(5) benefits of this facility, including its uses to protect or enhance environmental quality,
and to increase reliability of energy supply in Minnesota and the region;

(6) possible alternatives for satisfying the energy demand or transmission needs including
but not limited to potential for increased efficiency and upgrading of existing energy
generation and transmission facilities, new text begin energy storage systems, new text end load-management programs,
and distributed generation;

(7) the policies, rules, and regulations of other state and federal agencies and local
governments;

(8) any feasible combination of energy conservation improvements, required under
section 216B.241, new text begin or energy storage systems new text end that can (i) replace part or all of the energy to
be provided by the proposed facility, and (ii) compete with it economically;

(9) with respect to a high-voltage transmission line, the benefits of enhanced regional
reliability, access, or deliverability to the extent these factors improve the robustness of the
transmission system or lower costs for electric consumers in Minnesota;

(10) whether the applicant or applicants are in compliance with applicable provisions
of sections 216B.1691 and 216B.2425, subdivision 7, and have filed or will file by a date
certain an application for certificate of need under this section or for certification as a priority
electric transmission project under section 216B.2425 for any transmission facilities or
upgrades identified under section 216B.2425, subdivision 7;

(11) whether the applicant has made the demonstrations required under subdivision 3a;
and

(12) if the applicant is proposing a nonrenewable generating plant, the applicant's
assessment of the risk of environmental costs and regulation on that proposed facility over
the expected useful life of the plant, including a proposed means of allocating costs associated
with that risk.

new text begin (b) "Energy storage system" means a commercially available technology that uses
mechanical, chemical, or thermal processes to:
new text end

new text begin (1) store energy and deliver the stored energy for use at a later time; or
new text end

new text begin (2) store thermal energy for direct use for heating or cooling at a later time in a manner
that reduces the demand for electricity at the later time.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 41.

Minnesota Statutes 2018, section 216B.243, subdivision 3a, is amended to read:

Subd. 3a.

Use of deleted text begin renewable deleted text end new text begin nonrenewable new text end resource.

The commission deleted text begin may deleted text end new text begin must new text end not
issue a certificate of need under this section for a large energy facility that generates electric
power by means of a nonrenewable energy source, or that transmits electric power generated
by means of a nonrenewable energy source, unless the applicant for the certificate has
demonstrated new text begin by clear and convincing evidence new text end to the commission's satisfaction new text begin under
section 216B.2422, subdivision 4, new text end that deleted text begin it deleted text end new text begin the applicant new text end has deleted text begin explored the possibility of deleted text end new text begin
conducted the analysis required under section 216B.2422, subdivision 3b, regarding new text end
generating power by means of deleted text begin renewable deleted text end new text begin clean new text end energy deleted text begin sources deleted text end new text begin resources, as defined in
section 216B.2422, subdivision 1, new text end and deleted text begin has demonstrated deleted text end that the deleted text begin alternative selected is less
expensive (including environmental costs) than power generated by a renewable energy
source. For purposes of this subdivision, "renewable energy source" includes hydro, wind,
solar, and geothermal energy and the use of trees or other vegetation as fuel. deleted text end new text begin nonrenewable
energy source is in the public interest.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 42.

new text begin [216B.247] BENEFICIAL ELECTRIFICATION.
new text end

new text begin (a) It is the goal of the state to promote energy end uses powered by electricity that result
in a net reduction in greenhouse gas emissions and improvements to public health, consistent
with the goal established under section 216H.02, subdivision 1.
new text end

new text begin (b) To the maximum reasonable extent, the implementation of beneficial electrification
should prioritize investment and activity in low-income and underresourced communities,
maintain or improve the quality of electricity service, maximize customer savings, improve
the integration of renewable and carbon-free resources, and prioritize job creation.
new text end

Sec. 43.

new text begin [216B.248] PUBLIC UTILITY BENEFICIAL ELECTRIFICATION.
new text end

new text begin (a) A public utility may submit to the commission a plan to promote energy end uses
powered by electricity within its service area. To the maximum reasonable extent, the plans
must:
new text end

new text begin (1) maximize consumer savings over the lifetime of the investment;
new text end

new text begin (2) maintain or enhance the reliability of electricity service;
new text end

new text begin (3) quantify the acres of land that will be needed for new generation, transmission, and
distribution facilities to provide the additional electricity required under the plan;
new text end

new text begin (4) maintain or enhance public health and safety when temperatures fall below 25 degrees
below zero Fahrenheit;
new text end

new text begin (5) support the integration of renewable and carbon-free resources;
new text end

new text begin (6) encourage load shape management and energy storage that reduce overall system
costs;
new text end

new text begin (7) prioritize electrification projects in economically disadvantaged communities; and
new text end

new text begin (8) produce a net reduction in greenhouse gas emissions, based on the electricity
generation portfolio of the public utility proposing the plan either over the lifetime of the
conversion or by 2050, whichever is sooner.
new text end

new text begin (b) The commission must approve, reject, or modify the public utility's plan, consistent
with the public interest. Plans approved by the commission under this subdivision are eligible
for cost recovery under section 216B.1645.
new text end

Sec. 44.

new text begin [216C.375] SOLAR FOR SCHOOLS PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section and section 216C.376,
the following terms have the meanings given them.
new text end

new text begin (b) "Developer" means an entity that installs a solar energy system on a school building
awarded a grant under this section.
new text end

new text begin (c) "Energy storage system" means a commercially available technology capable of:
new text end

new text begin (1) absorbing and storing electrical energy; and
new text end

new text begin (2) dispatching stored electrical energy at a later time.
new text end

new text begin (d) "Photovoltaic device" has the meaning given in section 216C.06, subdivision 16.
new text end

new text begin (e) "School" means a school that operates as part of an independent or special school
district.
new text end

new text begin (f) "School district" means an independent or special school district.
new text end

new text begin (g) "Solar energy system" means photovoltaic or solar thermal devices installed alone
or in combination with an energy storage system.
new text end

new text begin Subd. 2. new text end

new text begin Establishment; purpose. new text end

new text begin A solar for schools program is established in the
Department of Commerce. The purpose of the program is to provide grants to (1) stimulate
the installation of solar energy systems on or adjacent to school buildings by reducing costs,
and (2) enable schools to use the solar energy system as a teaching tool that is integrated
into the school's curriculum.
new text end

new text begin Subd. 3. new text end

new text begin Establishment of account. new text end

new text begin (a) A solar for schools program account is
established in the special revenue fund. Money received from the general fund must be
transferred to the commissioner of commerce and credited to the account. Money deposited
in the account remains in the account until expended and does not cancel to the general
fund.
new text end

new text begin (b) When a grant is awarded under this section, the commissioner must reserve the grant
amount in the account.
new text end

new text begin Subd. 4. new text end

new text begin Expenditures. new text end

new text begin (a) Money in the account may be used only:
new text end

new text begin (1) for grant awards made under this section; and
new text end

new text begin (2) to pay the reasonable costs incurred by the department to administer this section.
new text end

new text begin (b) Grant awards made with funds in the account must be used only for grants for solar
energy systems installed on or adjacent to school buildings receiving retail electric service
from a utility that is not subject to section 116C.779, subdivision 1.
new text end

new text begin Subd. 5. new text end

new text begin Eligible system. new text end

new text begin (a) A grant may be awarded to a school under this section
only if the solar energy system that is the subject of the grant:
new text end

new text begin (1) is installed on or adjacent to the school building that consumes the electricity generated
by the solar energy system, on property within the service territory of the utility currently
providing electric service to the school building; and
new text end

new text begin (2) has a capacity that does not exceed the lesser of 40 kilowatts or 120 percent of the
estimated annual electricity consumption of the school building where the solar energy
system is installed.
new text end

new text begin (b) A school district that receives a rebate or other financial incentive under section
216B.241 for a solar energy system and that demonstrates considerable need for financial
assistance, as determined by the commissioner, is eligible for a grant under this section for
the same solar energy system.
new text end

new text begin Subd. 6. new text end

new text begin Application process. new text end

new text begin (a) The commissioner must issue a request for proposals
to utilities, schools, and developers who wish to apply for a grant under this section on
behalf of a school.
new text end

new text begin (b) A utility or developer must submit an application to the commissioner on behalf of
a school on a form prescribed by the commissioner. The form must include, at a minimum,
the following information:
new text end

new text begin (1) the capacity of the proposed solar energy system and the amount of electricity that
is expected to be generated;
new text end

new text begin (2) the current energy demand of the school building on which the solar energy generating
system is to be installed and information regarding any distributed energy resource, including
subscription to a community solar garden, that currently provides electricity to the school
building;
new text end

new text begin (3) the size of any energy storage system proposed to be installed as part of a solar energy
system;
new text end

new text begin (4) a description of any solar thermal devices proposed as part of the solar energy system;
new text end

new text begin (5) the total cost to purchase and install the solar energy system and the solar energy
system's life-cycle cost, including the cost to remove and dispose the system at the end of
its life;
new text end

new text begin (6) a copy of the proposed contract agreement between the school and the public utility
or developer, including provisions addressing responsibility for maintaining the solar energy
system;
new text end

new text begin (7) the school's plan to make the solar energy system serve as a visible learning tool for
students, teachers, and visitors to the school, including how the solar energy system may
be integrated into the school's curriculum;
new text end

new text begin (8) information that demonstrates the school district's level of need for financial assistance
available under this section;
new text end

new text begin (9) information that demonstrates the school's readiness to implement the project,
including but not limited to the availability of the site where the solar energy system is to
be installed, and the level of the school's engagement with the utility providing electric
service to the school building on which the solar energy system is to be installed on issues
relevant to the implementation of the project, including metering and other issues;
new text end

new text begin (10) with respect to the installation and operation of the solar energy system, the
willingness and ability of the developer or the public utility to:
new text end

new text begin (i) pay employees and contractors a prevailing wage rate, as defined in section 177.42,
subdivision 6; and
new text end

new text begin (ii) adhere to the provisions of section 177.43;
new text end

new text begin (11) how the developer or public utility plans to reduce the school's initial capital expense
to purchase and install the solar energy system, and to provide financial benefits to the
school from the utilization of federal and state tax credits, utility incentives, and other
financial incentives; and
new text end

new text begin (12) any other information deemed relevant by the commissioner.
new text end

new text begin (c) The commissioner must administer an open application process under this section
at least twice annually.
new text end

new text begin (d) The commissioner must develop administrative procedures governing the application
and grant award process.
new text end

new text begin Subd. 7. new text end

new text begin Energy conservation review. new text end

new text begin At the commissioner's request, a school awarded
a grant under this section must provide the commissioner information regarding energy
conservation measures implemented at the school building where the solar energy system
is to be installed. The commissioner may make recommendations to the school regarding
cost-effective conservation measures it can implement, and may provide technical assistance
and direct the school to available financial assistance programs.
new text end

new text begin Subd. 8. new text end

new text begin Technical assistance. new text end

new text begin The commissioner must provide technical assistance to
schools to develop and execute projects under this section.
new text end

new text begin Subd. 9. new text end

new text begin Grant payments. new text end

new text begin The commissioner must award a grant from the account
established under subdivision 3 to a school for the necessary costs associated with the
purchase and installation of a solar energy system. The amount of the grant must be based
on the commissioner's assessment of the school's need for financial assistance.
new text end

new text begin Subd. 10. new text end

new text begin Limitations. new text end

new text begin (a) No more than 50 percent of the grant payments awarded to
schools under this section may be awarded to schools where the proportion of students
eligible for free and reduced-price lunch under the National School Lunch Program is less
than 50 percent.
new text end

new text begin (b) No more than ten percent of the total amount of grants awarded under this section
may be awarded to schools that are part of the same school district.
new text end

new text begin Subd. 11. new text end

new text begin Application deadline. new text end

new text begin No application may be submitted under this section
after December 31, 2023.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 45.

new text begin [216C.376] SOLAR FOR SCHOOLS PROGRAM FOR CERTAIN UTILITY
SERVICE TERRITORY.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment; purpose. new text end

new text begin The utility subject to section 116C.779 must
operate a program to develop, and to supplement with additional funding, financial
arrangements that allow schools to benefit from state and federal tax and other financial
incentives that schools are ineligible to receive directly, in order to enable schools to install
and operate solar energy systems that can be used as teaching tools and integrated into the
school curriculum.
new text end

new text begin Subd. 2. new text end

new text begin Required plan. new text end

new text begin (a) By October 1, 2019, the public utility must file a plan for
the solar for schools program with the commissioner. The plan must contain but is not
limited to the following elements:
new text end

new text begin (1) a description of how entities that are eligible to take advantage of state and federal
tax and other financial incentives that reduce the cost to purchase, install, and operate a
solar energy system that schools are ineligible to take advantage of directly can share a
portion of the financial benefits with schools where a solar energy system is proposed to
be installed;
new text end

new text begin (2) a description of how the public utility intends to use funds appropriated to the program
under this section to provide additional financial assistance to schools where a solar energy
system is proposed to be installed;
new text end

new text begin (3) certification that the financial assistance provided under this section to a school by
the public utility must include the full value of the renewable energy certificates associated
with the generation of electricity by the solar energy system receiving financial assistance
under this section over the lifetime of the solar energy system;
new text end

new text begin (4) an estimate of the amount of financial assistance that the public utility provides to a
school under clauses (1) to (3) on a per kilowatt-hour produced basis, and the length of time
financial assistance is provided;
new text end

new text begin (5) certification that the transaction between the public utility and the school for electricity
is the buy-all/sell-all method by which the public utility charges the school for all electricity
the school consumes at the applicable retail rate schedule for sales to the school based on
the school's customer class, and credits or pays the school at the rate established in
subdivision 5;
new text end

new text begin (6) administrative procedures governing the application and financial benefit award
process, and the costs the public utility and the department are projected to incur to administer
the program;
new text end

new text begin (7) the public utility's proposed process for periodic reevaluation and modification of
the program; and
new text end

new text begin (8) any additional information required by the commissioner.
new text end

new text begin (b) The public utility must not implement the program until the commissioner approves
the public utility's plan submitted under this subdivision. The commissioner must approve
a plan under this subdivision that the commissioner determines is in the public interest no
later than December 31, 2019. Any proposed modifications to the plan approved under this
subdivision must be approved by the commissioner.
new text end

new text begin Subd. 3. new text end

new text begin System eligibility. new text end

new text begin A solar energy system is eligible to receive financial benefits
under this section if it meets all of the following conditions:
new text end

new text begin (1) the solar energy system must be located on or adjacent to a school building receiving
retail electric service from the public utility and completely located within the public utility's
electric service territory, provided that any land situated between the school building and
the site where the solar energy system is installed is owned by the school district where the
school building operates;
new text end

new text begin (2) any energy storage system that is part of a solar energy system may only store energy
generated by an existing solar energy system serving the school or the solar energy system
receiving financial assistance under this section; and
new text end

new text begin (3) the total aggregate nameplate capacity of all distributed generation serving the school
building, including any subscriptions to a community solar garden under section 216B.1641,
does not exceed the lesser of one megawatt alternating current or 120 percent of the school
building's average annual electric energy consumption.
new text end

new text begin Subd. 4. new text end

new text begin Application process. new text end

new text begin (a) A school seeking financial assistance under this section
must submit an application to the public utility, including a plan for how the school plans
to use the solar energy system as a visible learning tool for students, teachers, and visitors
to the school, and how the solar energy system may be integrated into the school's curriculum.
new text end

new text begin (b) The public utility must award financial assistance under this section on a first-come,
first-served basis.
new text end

new text begin (c) The public utility must discontinue accepting applications under this section after
all funds appropriated under subdivision 5 are allocated to program participants, including
funds from canceled projects.
new text end

new text begin Subd. 5. new text end

new text begin Benefits information. new text end

new text begin Before signing an agreement with the public utility to
receive financial assistance under this section, a school must obtain from the developer and
provide to the public utility information the developer shared with potential investors in the
project regarding future financial benefits to be realized from installation of a solar energy
system at the school, and potential financial risks.
new text end

new text begin Subd. 6. new text end

new text begin Purchase rate; cost recovery; renewable energy credits. new text end

new text begin (a) The public utility
must purchase all of the electricity generated by a solar energy system receiving financial
assistance under this section at a rate of $0.105 per kilowatt-hour generated.
new text end

new text begin (b) Payments by the public utility of the rate established under this subdivision to a
school receiving financial assistance under this section are fully recoverable by the public
utility through the public utility's fuel clause adjustment.
new text end

new text begin (c) The renewable energy credits associated with the electricity generated by a solar
energy system installed under this section are the property of the public utility that is subject
to this section.
new text end

new text begin Subd. 7. new text end

new text begin Limitation. new text end

new text begin (a) No more than 50 percent of the financial assistance provided
by the public utility to schools under this section may be provided to schools where the
proportion of students eligible for free and reduced-price lunch under the National School
Lunch Program is less than 50 percent.
new text end

new text begin (b) No more than ten percent of the total amount of financial assistance provided by the
public utility to schools under this section may be provided to schools that are part of the
same school district.
new text end

new text begin Subd. 8. new text end

new text begin Technical assistance. new text end

new text begin The commissioner must provide technical assistance to
schools to develop and execute projects under this section.
new text end

new text begin Subd. 9. new text end

new text begin Application deadline. new text end

new text begin No application may be submitted under this section
after December 31, 2023.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 46.

new text begin [216C.401] ELECTRIC VEHICLE REBATES.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Electric vehicle" has the meaning given in section 169.011, subdivision 26a,
paragraphs (a) and (b), clause (3).
new text end

new text begin (c) "New eligible electric vehicle" means an eligible electric vehicle that has not been
registered in any state.
new text end

new text begin (d) "Used eligible electric vehicle" means an eligible electric vehicle that has previously
been registered in a state.
new text end

new text begin Subd. 2. new text end

new text begin Eligibility. new text end

new text begin The purchaser of an electric vehicle is eligible for a rebate, subject
to the amounts and limits in subdivisions 3 and 4, if:
new text end

new text begin (1) the electric vehicle:
new text end

new text begin (i) has not been modified from the original manufacturer's specifications; and
new text end

new text begin (ii) is purchased after the effective date of this act for use by the purchaser and not for
resale;
new text end

new text begin (2) the purchaser:
new text end

new text begin (i) is a resident of Minnesota, as defined in section 290.01, subdivision 7, paragraph (a),
when the electric vehicle is purchased;
new text end

new text begin (ii) is a business that has a valid address in Minnesota from which business is conducted;
new text end

new text begin (iii) is a nonprofit corporation incorporated under chapter 317A; or
new text end

new text begin (iv) is a political subdivision of the state; and
new text end

new text begin (3) the purchaser:
new text end

new text begin (i) has not received a rebate or tax credit for the purchase of an electric vehicle from
Minnesota; and
new text end

new text begin (ii) registers the electric vehicle in Minnesota.
new text end

new text begin Subd. 3. new text end

new text begin Rebate amounts. new text end

new text begin (a) A $2,500 rebate may be issued under this section to an
eligible purchaser for the purchase of a new eligible electric vehicle.
new text end

new text begin (b) A $500 rebate may be issued under this section to an eligible purchaser for the
purchase of a used eligible electric vehicle, provided the electric vehicle has not previously
been registered in Minnesota.
new text end

new text begin Subd. 4. new text end

new text begin Limits. new text end

new text begin (a) The number of rebates allowed under this section are limited to:
new text end

new text begin (1) no more than one rebate per resident per household; and
new text end

new text begin (2) no more than one rebate per business entity per year.
new text end

new text begin (b) A rebate must not be issued under this section for an electric vehicle with a
manufacturer's suggested retail price that exceeds $60,000.
new text end

new text begin Subd. 5. new text end

new text begin Program administration. new text end

new text begin (a) Rebate applications under this section must be
filed with the commissioner on a form developed by the commissioner.
new text end

new text begin (b) The commissioner must develop administrative procedures governing the application
and rebate award process. Applications must be reviewed and rebates awarded by the
commissioner on a first-come, first-served basis.
new text end

new text begin (c) The commissioner may reduce the rebate amounts provided under subdivision 3 or
restrict program eligibility based on fund availability or other factors.
new text end

new text begin Subd. 6. new text end

new text begin Expiration. new text end

new text begin This section expires June 30, 2024.
new text end

Sec. 47.

new text begin [216C.402] ELECTRIC VEHICLE PUBLIC CHARGING GRANT
PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Electric vehicle" has the meaning given in section 169.011, subdivision 26a.
new text end

new text begin (c) "Electric vehicle charging station" means infrastructure that recharges an electric
vehicle's batteries by connecting the electric vehicle to:
new text end

new text begin (1) a level two charger that provides a 208- or 240-volt alternating current power source;
or
new text end

new text begin (2) a DC fast charger that has an electric output of 20 kilowatts or greater.
new text end

new text begin (d) "Park-and-ride facility" has the meaning given in section 174.256, subdivision 2,
paragraph (b).
new text end

new text begin (e) "Public electric vehicle charging station" means an electric charging station located
at a publicly available parking space.
new text end

new text begin Subd. 2. new text end

new text begin Program. new text end

new text begin (a) The commissioner must award grants to help fund the installation
of a network of public electric vehicle charging stations in Minnesota, including locations
in state and regional parks, trailheads, and park-and-ride facilities. The commissioner must
issue a request for proposals to entities that have experience installing, owning, operating,
and maintaining electric vehicle charging stations. The request for proposal must establish
technical specifications that electric vehicle charging stations are required to meet.
new text end

new text begin (b) The commissioner must consult with the commissioner of natural resources to develop
optimal locations for electric vehicle charging stations in state and regional parks, and with
the commissioner of transportation to develop optimal locations for electric vehicle charging
stations at park-and-ride facilities.
new text end

new text begin Subd. 3. new text end

new text begin Electricity supplier. new text end

new text begin Electricity dispensed from an electric vehicle charging
station funded under this act must be purchased from the public utility subject to section
116C.779, subdivision 1.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 48.

Minnesota Statutes 2018, section 216C.435, subdivision 3a, is amended to read:

Subd. 3a.

Cost-effective energy improvements.

"Cost-effective energy improvements"
mean:

(1) any new text begin new construction, new text end renovation new text begin , new text end or retrofitting of deleted text begin :
deleted text end

deleted text begin (i) deleted text end qualifying commercial real property to improve energy efficiency that is permanently
affixed to the property, results in a net reduction in energy consumption without altering
the principal source of energy, and has been identified in an energy audit as repaying the
purchase and installation costs in 20 years or less, based on the amount of future energy
saved and estimated future energy prices; deleted text begin or
deleted text end

deleted text begin (ii) deleted text end new text begin (2) any renovation or retrofitting of new text end qualifying residential real property that is
permanently affixed to the property and is eligible to receive an incentive through a program
offered by the electric or natural gas utility that provides service under section 216B.241
to the property or is otherwise determined to be a cost-effective energy improvement by
the commissioner under section 216B.241, subdivision 1d, paragraph (a);

deleted text begin (2) deleted text end new text begin (3) new text end permanent installation of new or upgraded electrical circuits and related equipment
to enable electrical vehicle charging; or

deleted text begin (3) deleted text end new text begin (4) new text end a solar voltaic or solar thermal energy system attached to, installed within, or
proximate to a building that generates electrical or thermal energy from a renewable energy
source that has been identified in an energy audit or renewable energy system feasibility
study as repaying their purchase and installation costs in 20 years or less, based on the
amount of future energy saved and estimated future energy prices.

Sec. 49.

Minnesota Statutes 2018, section 216C.435, subdivision 8, is amended to read:

Subd. 8.

Qualifying commercial real property.

"Qualifying commercial real property"
means a multifamily residential dwelling, or a commercial or industrial building, that the
implementing entity has determined, after review of an energy audit or renewable energy
system feasibility study, can be benefited by installation of cost-effective energy
improvements. new text begin Qualifying commercial real property includes new construction.
new text end

Sec. 50.

Minnesota Statutes 2018, section 216C.436, subdivision 4, is amended to read:

Subd. 4.

Financing terms.

Financing provided under this section must have:

(1) a cost-weighted average maturity not exceeding the useful life of the energy
improvements installed, as determined by the implementing entity, but in no event may a
term exceed 20 years;

(2) a principal amount not to exceed the lesser of new text begin :
new text end

new text begin (i) the greater of new text end 20 percent of the assessed value of the real property on which the
improvements are to be installed new text begin or 20 percent of the real property's appraised value, accepted
or approved by the mortgage lender; new text end or

new text begin (ii) new text end the actual cost of installing the energy improvements, including the costs of necessary
equipment, materials, and labor, the costs of each related energy audit or renewable energy
system feasibility study, and the cost of verification of installation; and

(3) an interest rate sufficient to pay the financing costs of the program, including the
issuance of bonds and any financing delinquencies.

Sec. 51.

Minnesota Statutes 2018, section 216C.436, is amended by adding a subdivision
to read:

new text begin Subd. 10. new text end

new text begin Improvements; real property or fixture. new text end

new text begin A cost-effective energy improvement
financed under a PACE loan program, including all equipment purchased in whole or in
part with loan proceeds under a loan program, is deemed real property or a fixture attached
to the real property.
new text end

Sec. 52.

new text begin [216C.45] POWER PLANT HOST COMMUNITY TRANSITION
PLANNING.
new text end

new text begin The commissioner of commerce must coordinate with the commissioner of labor and
industry and the commissioner of employment and economic development to develop plans,
programs, and recommendations to mitigate the impacts on host communities and workers
resulting from the retirement of large electric generation facilities. The commissioners must
confer with stakeholders in preparing these plans and programs, including representatives
of local government units that host large electric generation facilities, workers and contractors
at large generation facilities, and the utilities that own large electric generation facilities.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 53.

Minnesota Statutes 2018, section 216F.04, is amended to read:

216F.04 SITE PERMIT.

(a) No person may construct an LWECS without a site permit issued by the Public
Utilities Commission.

(b) Any person seeking to construct an LWECS shall submit an application to the
commission for a site permit in accordance with this chapter and any rules adopted by the
commission. The permitted site need not be contiguous land.

(c) The commission shall make a final decision on an application for a site permit for
an LWECS within 180 days after acceptance of a complete application by the commission.
The commission may extend this deadline for cause.

(d) The commission may place conditions in a permit and may deny, modify, suspend,
or revoke a permit.

new text begin (e) The commission may require, as a condition of permit issuance, that the recipient of
a site permit to construct an LWECS with a nameplate capacity above 25,000 kilowatts and
all of the permit recipient's construction contractors and subcontractors on the project pay
the prevailing wage rate, as defined in section 177.42. The commission may also require,
as a condition of modifying a site permit for an LWECS repowering project as defined in
section 216B.243, subdivision 8, paragraph (b), that the recipient of the site permit and all
of the recipient's construction contractors and subcontractors on the repowering project pay
the prevailing wage rate as defined in section 177.42.
new text end

Sec. 54.

Minnesota Statutes 2018, section 216F.08, is amended to read:

216F.08 PERMIT AUTHORITY; ASSUMPTION BY COUNTIES.

(a) A county board may, by resolution and upon written notice to the Public Utilities
Commission, assume responsibility for processing applications for permits required under
this chapter for LWECS with a combined nameplate capacity of less than 25,000 kilowatts.
The responsibility for permit application processing, if assumed by a county, may be
delegated by the county board to an appropriate county officer or employee. Processing by
a county shall be done in accordance with procedures and processes established under
chapter 394.

(b) A county board that exercises its option under paragraph (a) may issue, deny, modify,
impose conditions upon, or revoke permits pursuant to this section. The action of the county
board about a permit application is final, subject to appeal as provided in section 394.27.

(c) The commission shall, by order, establish general permit standards, including
appropriate property line set-backs, governing site permits for LWECS under this section.
The order must consider existing and historic commission standards for wind permits issued
by the commission. The general permit standards shall apply to permits issued by counties
and to permits issued by the commission for LWECS with a combined nameplate capacity
of less than 25,000 kilowatts. The commission or a county may grant a variance from a
general permit standard if the variance is found to be in the public interest new text begin , provided all
LWECS site permits issued by the commission or a county and all modifications of site
permits issued by the commission or a county for repowering projects comply with the
prevailing wage rate requirements under section 216F.04, paragraph (e) new text end .

(d) The commission and the commissioner of commerce shall provide technical assistance
to a county with respect to the processing of LWECS site permit applications.

Sec. 55.

Minnesota Statutes 2018, section 326B.106, is amended by adding a subdivision
to read:

new text begin Subd. 16. new text end

new text begin Voluntary adoption of stretch code. new text end

new text begin The Construction Codes Advisory
Council must establish a voluntary code of standards for the construction, reconstruction,
and alteration of public and private commercial and multifamily residential buildings, as
an appendix to the State Building Code. This voluntary code of standards must conform to
Sustainable Building 2030 standards, as defined in section 216B.241, subdivision 9, which
applies additional performance requirements without altering any underlying codes or safety
standards. The code sections contained in this appendix may be adopted by a local jurisdiction
at its election and become an official addendum to the baseline energy code in the
jurisdictions adopting them. When adopting the code sections contained in the appendix,
the local jurisdiction must not amend the code sections, but may specify a minimum size
for the buildings the stretch code will apply to. The minimum size must be at least 10,000
square feet.
new text end

Sec. 56. new text begin METROPOLITAN COUNCIL; ELECTRIC BUS PURCHASES.
new text end

new text begin After the effective date of this act and until the appropriation made in section 62,
subdivision 5, is exhausted, any bus purchased by the Metropolitan Council for Metro
Transit bus service must operate solely on electricity provided by rechargeable on-board
batteries. The appropriation in section 62, subdivision 5, must be used to pay the incremental
cost of buses that operate solely on electricity provided by rechargeable on-board batteries
over diesel-operated buses that are otherwise comparable in size, features, and performance.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 57. new text begin ELECTRIC SCHOOL BUS DEMONSTRATION GRANT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Electric school bus" means a school bus powered solely by an electric motor drawing
current from rechargeable storage batteries, fuel cells, or other portable sources of electric
current.
new text end

new text begin (c) "Electric vehicle charging station" means infrastructure that recharges an electric
vehicle's batteries by connecting the electric vehicle to:
new text end

new text begin (1) a level 2 charger that provides a 240-volt alternating current power source; or
new text end

new text begin (2) a DC fast charger that has an electric output of 20 kilowatts or greater.
new text end

new text begin (d) "Private school bus contractor" means a person who contracts with a school district
to transport school district students to and from school and school activities on school buses
owned and operated by the person.
new text end

new text begin (e) "School bus" has the meaning given in Minnesota Statutes, section 169.011,
subdivision 71. School bus does not include a Type III vehicle, as defined in Minnesota
Statutes, section 169.011, paragraph (h).
new text end

new text begin (f) "School district" means an independent or special school district.
new text end

new text begin Subd. 2. new text end

new text begin Purpose. new text end

new text begin The commissioner of education must award a grant to a school district
to purchase an electric school bus as a demonstration project to enable the school district,
the electric utility serving the school district, and, if applicable, the private school bus
contractor providing transportation services to the school district to gain experience operating
an electric school bus and to assess its performance.
new text end

new text begin Subd. 3. new text end

new text begin Eligibility. new text end

new text begin A school district located within the electric retail service area of
the public utility subject to Minnesota Statutes, section 116C.779, subdivision 1, that owns
and operates school buses or contracts with a private school bus contractor is eligible to
apply for a grant under this section.
new text end

new text begin Subd. 4. new text end

new text begin Application process. new text end

new text begin An eligible applicant must submit an application to the
commissioner of education on a form designed by the commissioner of education. The
commissioner of education must develop administrative procedures governing the application
and grant award process.
new text end

new text begin Subd. 5. new text end

new text begin Application content. new text end

new text begin An application for a grant under this section must include:
new text end

new text begin (1) the name of the school district or districts where the electric school bus is proposed
to operate;
new text end

new text begin (2) a description of the route, timing of operation, number of students to be transported,
and other factors affecting the performance characteristics that an electric school bus
performance must meet;
new text end

new text begin (3) certification from the electric utility serving the school district, and, if applicable,
the private school bus contractor providing transportation services to the school district,
that the electric utility and private school bus contractor fully support and are full partners
in implementing the demonstration project, including a list of tasks the electric utility and
private school bus contractor commit to conduct and any voluntary financial contributions
to the project;
new text end

new text begin (4) certification from the electric utility serving the school district that it commits to pay
the costs to purchase and install an electric vehicle charging station in a convenient location
to recharge the batteries of the electric school bus;
new text end

new text begin (5) evidence that the proposed electric school bus has access to an electric vehicle
charging station at a convenient location;
new text end

new text begin (6) if the school district contracts with a private school bus contractor:
new text end

new text begin (i) a copy of a signed agreement between the school district and the private school bus
contractor that protects the state's interest in the electric school bus purchased with the grant
in the case of the termination of the private school bus contractor's contract with the school
district or other contingencies; and
new text end

new text begin (ii) written certification that any revenues paid to the private school bus contractor by
the utility providing retail electric service to the private school bus contractor that result
from the purchase of or access to the electricity stored in the batteries of the electric school
bus purchased with a grant under this section must be forwarded to the school district; and
new text end

new text begin (7) any additional information required by the commissioner of education.
new text end

new text begin Subd. 6. new text end

new text begin Eligible expenditures. new text end

new text begin Grant funds awarded under this section may be expended
to:
new text end

new text begin (1) purchase an electric school bus;
new text end

new text begin (2) pay the cost of electricity to charge the batteries of the electric school bus; and
new text end

new text begin (3) pay repair and maintenance costs for the electric school bus.
new text end

new text begin Subd. 7. new text end

new text begin Reports. new text end

new text begin On or before the first anniversary of the initial operation of a school
bus funded by a grant under this section, and on or before the same date in each of the
following two years, the school district awarded the grant, in collaboration with the electric
utility serving the school district, and, if applicable, the private school bus contractor
providing transportation services to the school district, must submit a report describing the
performance of the electric school bus to the chairs and ranking minority members of the
senate and house of representatives committees with primary jurisdiction over energy policy,
transportation policy, and education policy, and to the commissioner of education. At a
minimum, the report must contain the following information regarding the performance of
the electric school bus:
new text end

new text begin (1) the number of miles traveled per day and per year;
new text end

new text begin (2) the cost of recharging, and any steps taken to minimize the costs by charging at
off-peak times;
new text end

new text begin (3) operating costs per mile;
new text end

new text begin (4) miles driven per kilowatt hour;
new text end

new text begin (5) the number of days the electric school bus was out of service for repairs;
new text end

new text begin (6) discussion of the qualitative aspects of performance, including the impact of extreme
cold on bus performance; and
new text end

new text begin (7) any other information deemed relevant by the school district.
new text end

Sec. 58. new text begin GREENHOUSE GAS EMISSIONS REDUCTION STRATEGY; REPORT.
new text end

new text begin (a) The commissioner of commerce must develop benchmarks and strategies designed
to significantly accelerate the reduction in greenhouse gas emissions in Minnesota by 2030,
including strategies to:
new text end

new text begin (1) increase energy efficiency in all buildings, including residential;
new text end

new text begin (2) provide consumers with tools to manage personal energy use automatically, remotely,
and electronically;
new text end

new text begin (3) present consumers with financial incentives to shift energy use to periods when
systemwide demand and the cost of generation are low;
new text end

new text begin (4) work toward electrifying all sectors of the economy currently powered by fossil
fuels;
new text end

new text begin (5) increase carbon sequestration in Minnesota lands and wetlands;
new text end

new text begin (6) incentivize the adoption of energy storage systems to accelerate the use of wind and
solar resources; and
new text end

new text begin (7) modernize the electric grid and promote the use of distributed energy resources.
new text end

new text begin (b) By November 30, 2019, the commissioner must submit a report containing the
benchmarks and strategies to the chairs and ranking minority members of the senate and
house of representatives committees with primary jurisdiction over energy policy.
new text end

Sec. 59.

new text begin PRAIRIE ISLAND RENEWABLE ENERGY.
new text end

new text begin Subdivision 1. new text end

new text begin Program established. new text end

new text begin The Prairie Island Renewable Energy Project is
established to enable the Prairie Island Indian Community to develop renewable energy
systems.
new text end

new text begin Subd. 2. new text end

new text begin Grant. new text end

new text begin The commissioner of employment and economic development must
enter into a grant contract with the Prairie Island Indian Community to provide funding to
stimulate implementation of renewable energy projects benefiting the Prairie Island Indian
Community or its members. Renewable energy projects under this section include but are
not limited to geothermal energy and on-site community solar gardens at Prairie Island,
Upper Island, Mount Frontenac, the assisted living center located near the intersection of
Highway 361 and signed U.S. Highway 61, and any residential development on land owned
by the Prairie Island Indian Community in West Lakeland Township. Any examination
conducted by the commissioner of employment and economic development to determine
the sufficiency of the financial stability and capacity of the Prairie Island Indian Community
to carry out the purposes of this grant is limited to the Community Services Department of
the Prairie Island Indian Community.
new text end

new text begin Subd. 3. new text end

new text begin Report. new text end

new text begin The Prairie Island Indian Community must file a report on July 1,
2020, and each July 1 thereafter until the project is complete, describing the progress made
in implementing the project and the uses of expended funds. A final report must be completed
within 90 days of the date the project is complete.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 1, 2019.
new text end

Sec. 60. new text begin COORDINATED ELECTRIC TRANSMISSION STUDY.
new text end

new text begin (a) Each entity subject to Minnesota Statutes, section 216B.2425, must participate in a
coordinated engineering study to identify transmission network enhancements necessary to
maintain system reliability in the event large generation resources are retired. Specifically,
the study must evaluate what enhancements are necessary in the event large generation
resources that reach the end of the large generation resource's depreciation term or operating
license term within 20 years of the effective date of this section are retired. The study must
also evaluate the transmission enhancements that may be necessary to interconnect
replacement generation, including but not limited to:
new text end

new text begin (1) 7,000 megawatts of generation from eligible energy technologies, as defined in
Minnesota Statutes, section 216B.1691, subdivision 1, by 2025; and
new text end

new text begin (2) any replacement generation and renewable resource additions, including generation
tie lines, anticipated to occur by 2035 in any utility's integrated resource plan filed with or
approved by the Public Utilities Commission.
new text end

new text begin (b) When setting the scope for the study and as needed while the study is being conducted,
utilities must consult with the commissioner of commerce, technical representatives of
renewable energy resource developers, and other interested entities to discuss and identify
needed generation tie lines to support the continued orderly development of renewable
resources in Minnesota. The study must include any analysis performed by the Midcontinent
Independent System Operator.
new text end

new text begin (c) A report on the study must be completed and submitted to the Public Utilities
Commission by November 1, 2020, and include a preliminary plan to build the needed
transmission network enhancements. Reasonable and prudent costs for the study are
recoverable through the mechanism provided under Minnesota Statutes, section 216B.1645,
subdivision 2.
new text end

Sec. 61. new text begin ENERGY UTILITY DIVERSITY STAKEHOLDER GROUP; REPORT.
new text end

new text begin (a) The Public Utilities Commission must convene a stakeholder group to examine the
challenges and opportunities for Minnesota's energy utilities to attract a diverse workforce
with the skills needed to advance a 21st century industry and to increase the supplier diversity
of energy utilities. The stakeholder group must include but is not limited to stakeholders
representative of public utilities as defined in Minnesota Statutes, section 216B.02,
subdivision 4, municipal, electric, or gas utilities, and electric or gas cooperative associations.
The executive director of the commission must convene the first meeting of the stakeholder
group.
new text end

new text begin (b) The stakeholder group must:
new text end

new text begin (1) examine current and projected employment in the energy utility sector;
new text end

new text begin (2) provide information on possible approaches to assist workers and energy utilities to
develop a diverse workforce that has the skills to build, maintain, and operate the electricity
system of the future;
new text end

new text begin (3) review key trends that have shaped employment in this sector and the demographics
of the sector, including the underrepresentation of women, veterans, and minorities in
employment and leadership;
new text end

new text begin (4) identify the challenges to replacing retiring workers;
new text end

new text begin (5) examine the imbalance of available worker skills to utility workforce needs; and
new text end

new text begin (6) identify the challenges and possible approaches to increasing supplier diversity.
new text end

new text begin (c) The stakeholder group must also consider whether information regarding workforce
and supplier diversity should be included and considered as part of any resource plan filed
by a utility with the commission.
new text end

new text begin (d) By January 15, 2020, the stakeholder group must issue a report to the chairs and
ranking minority members of the house of representatives and senate committees with
jurisdiction over energy policy and finance identifying its findings and recommendations
for establishing a more diverse workforce and increasing supplier diversity within the electric
energy sector.
new text end

Sec. 62. new text begin APPROPRIATION.
new text end

new text begin Subdivision 1. new text end

new text begin University of Minnesota renewable energy transition. new text end

new text begin (a)
Notwithstanding Minnesota Statutes, section 116C.779, subdivision 1, paragraph (j),
$6,000,000 in fiscal year 2020 is appropriated from the renewable development account
established under Minnesota Statutes, section 116C.779, subdivision 1, to the Board of
Regents of the University of Minnesota to establish goals and benchmarks and implement
a rapid transition toward the use of renewable fuels for electricity and thermal energy in
campus buildings by 2030. This appropriation may only be expended on activities located
within the electric service area of the public utility subject to Minnesota Statutes, section
116C.779, subdivision 1. This appropriation is available until December 31, 2024.
new text end

new text begin (b) As a condition of receiving the appropriation under paragraph (a), the Board of
Regents of the University of Minnesota must submit a report by January 15, 2020, and
biennially thereafter until January 15, 2030, on the progress made toward the goals and
benchmarks established under paragraph (a) to the chairs and ranking minority members
of the senate and house of representatives committees and divisions with jurisdiction over
energy, climate, the environment, and natural resources.
new text end

new text begin Subd. 2. new text end

new text begin Minnesota State Colleges and Universities renewable energy transition. new text end

new text begin (a)
Notwithstanding Minnesota Statutes, section 116C.779, subdivision 1, paragraph (j),
$6,000,000 in fiscal year 2020 is appropriated from the renewable development account
established in Minnesota Statutes, section 116C.779, subdivision 1, to the Board of Trustees
of the Minnesota State Colleges and Universities to establish goals and benchmarks and
implement a rapid transition toward the use of renewable fuels for electricity and thermal
energy in campus buildings by 2030. This appropriation may only be expended on activities
located within the electric service area of the public utility subject to Minnesota Statutes,
section 116C.779, subdivision 1. This appropriation is available until December 31, 2024.
new text end

new text begin (b) As a condition of receiving the appropriation provided under paragraph (a), the Board
of Trustees of the Minnesota State Colleges and Universities must submit a report by January
15, 2020, and biennially thereafter until January 15, 2030, on the steps taken and progress
made toward achieving the goals and benchmarks established under paragraph (a) to the
chairs and ranking minority members of the senate and house of representatives committees
and divisions with jurisdiction over energy, climate, the environment, and natural resources.
new text end

new text begin Subd. 3. new text end

new text begin Solar devices. new text end

new text begin Notwithstanding Minnesota Statutes, section 116C.779,
subdivision 1, paragraph (j), $2,000,000 in fiscal year 2020 is appropriated from the
renewable development account established in Minnesota Statutes, section 116C.779,
subdivision 1, to the commissioner of natural resources to install and expand solar
photovoltaic or solar thermal energy devices in state parks served with electricity by the
public utility subject to Minnesota Statutes, section 116C.779, subdivision 1. The department
owns any renewable energy credits associated with the electricity generated by a solar
photovoltaic device funded with this appropriation. This appropriation is available until
December 31, 2024.
new text end

new text begin Subd. 4. new text end

new text begin Solar for schools. new text end

new text begin (a) Notwithstanding Minnesota Statutes, section 116C.779,
subdivision 1, paragraph (j), $16,000,000 in fiscal year 2020 is appropriated from the
renewable development account established under Minnesota Statutes, section 116C.779,
subdivision 1, to the commissioner of commerce for transfer to the public utility that is
subject to Minnesota Statutes, section 216C.376, to award grants and financial assistance
to schools under the solar for schools program under Minnesota Statutes, section 216C.376.
This appropriation is available until December 31, 2024.
new text end

new text begin (b) This appropriation may be used by the commissioner to reimburse the reasonable
costs incurred by the department to administer the solar for schools program under Minnesota
Statutes, section 216C.375, and to review and approve the public utility's plan, and any
proposed modifications to that plan and to provide technical assistance, under Minnesota
Statutes, section 216C.376, subdivisions 2 and 8. This appropriation is available until
December 31, 2024.
new text end

new text begin Subd. 5. new text end

new text begin Metropolitan Council; electric buses. new text end

new text begin Notwithstanding Minnesota Statutes,
section 116C.779, subdivision 1, paragraph (j), $5,000,000 in fiscal year 2019 is appropriated
from the renewable development account under Minnesota Statutes, section 116C.779,
subdivision 1, to the Metropolitan Council to defray the cost of purchasing electric buses,
as described in section 56. Any funds remaining from this appropriation that are insufficient
to fully fund the incremental cost of purchasing an electric bus rather than a diesel-operated
bus cancel back to the renewable development account. This appropriation is available until
December 31, 2020.
new text end

new text begin Subd. 6. new text end

new text begin Electric school bus grant. new text end

new text begin Notwithstanding Minnesota Statutes, section
116C.779, subdivision 1, paragraph (j), $500,000 in fiscal year 2020 is appropriated from
the renewable development account under Minnesota Statutes, section 116C.779, subdivision
1, to the commissioner of education to award a grant to a school district located within the
retail electric service area of the public utility subject to Minnesota Statutes, section
116C.779, subdivision 1, to purchase an electric school bus. This appropriation is available
until December 31, 2024.
new text end

new text begin Subd. 7. new text end

new text begin Community solar garden administration. new text end

new text begin (a) Notwithstanding Minnesota
Statutes, section 116C.779, subdivision 1, paragraph (j), $750,000 in fiscal year 2020 and
$750,000 in fiscal year 2021 are appropriated from the renewable development account
established in Minnesota Statutes, section 116C.779, subdivision 1, to the commissioner of
commerce for the purpose of funding the Department of Commerce's administrative and
enforcement activities under Minnesota Statutes, section 216B.1641, subdivision 4.
new text end

new text begin (b) Notwithstanding Minnesota Statutes, section 116C.779, subdivision 1, paragraph
(j), $1,000,000 in fiscal year 2020 and $1,000,000 in fiscal year 2021 are appropriated from
the renewable development account established in Minnesota Statutes, section 116C.779,
subdivision 1, to the commissioner of commerce for grants under Minnesota Statutes, section
216B.1643.
new text end

new text begin (c) Up to three percent of the appropriation made in paragraph (b) is available to the
commissioner of commerce for the reasonable costs of administrating the grant program in
Minnesota Statutes, section 216B.1643.
new text end

new text begin Subd. 8. new text end

new text begin Prairie Island Renewable Energy project. new text end

new text begin Notwithstanding Minnesota
Statutes, section 116C.779, subdivision 1, paragraph (j), $2,000,000 in fiscal year 2020 and
$3,000,000 in fiscal year 2021 are appropriated from the renewable development account
under Minnesota Statutes, section 116C.779, subdivision 1, to the commissioner of
employment and economic development for a grant to the Prairie Island Indian Community
to implement the Prairie Island Renewable Energy project under section 59. This
appropriation is available until December 31, 2024.
new text end

new text begin Subd. 9. new text end

new text begin Electric vehicle rebates. new text end

new text begin Notwithstanding Minnesota Statutes, section 116C.779,
subdivision 1, paragraph (j), $6,900,000 in fiscal year 2020 is appropriated from the
renewable development account established in Minnesota Statutes, section 116C.779,
subdivision 1, to the commissioner of commerce to award rebates to eligible electric vehicle
purchasers under Minnesota Statutes, section 216C.401. Appropriations from this paragraph
must be used to award rebates to eligible purchasers who reside within the retail electric
service area of the public utility subject to Minnesota Statutes, section 116C.779, subdivision
1. This appropriation is available until December 31, 2024.
new text end

new text begin Subd. 10. new text end

new text begin Electric vehicle charging stations. new text end

new text begin Notwithstanding Minnesota Statutes,
section 116C.779, subdivision 1, paragraph (j), $2,500,000 in fiscal year 2020 is appropriated
from the renewable development account established in Minnesota Statutes, section
116C.779, subdivision 1, to the commissioner of commerce to award grants to install electric
vehicle charging stations under Minnesota Statutes, section 216C.402. Appropriations from
this paragraph must be used to award grants to install electric vehicle charging stations
within the retail electric service area of the public utility subject to Minnesota Statutes,
section 116C.779, subdivision 1. Up to $600,000 of this appropriation may be used to fund
electric vehicle charging stations in state and regional parks and up to $100,000 may be
used to fund electric vehicle charging stations in park-and-ride facilities. Unexpended funds
from this $700,000 may be used to fund electric vehicle charging stations in either location.
This appropriation is available until December 31, 2024.
new text end

new text begin Subd. 11. new text end

new text begin Stretch code. new text end

new text begin Notwithstanding Minnesota Statutes, section 116C.779,
subdivision 1, paragraph (j), $100,000 in fiscal year 2020 is appropriated from the renewable
development account established in Minnesota Statutes, section 116C.779, subdivision 1,
to the commissioner of commerce for transfer to the Center for Sustainable Building Research
at the University of Minnesota to provide technical assistance to local jurisdictions that
adopt a voluntary stretch code under Minnesota Statutes, section 326B.106, subdivision 16.
This is a onetime appropriation. This appropriation is available until December 31, 2024.
new text end

new text begin Subd. 12. new text end

new text begin Coordinated electric transmission study. new text end

new text begin Notwithstanding section 116C.779,
subdivision 1, paragraph (j), $1,000,000 in fiscal year 2020 is appropriated from the
renewable development account established in Minnesota Statutes, section 116C.779,
subdivision 1, to the commissioner of commerce to conduct the transmission study required
under section 60.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 63. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2018, section 216B.241, subdivisions 1, 2c, and 4, new text end new text begin are repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: DIVH1833-1

216B.241 ENERGY CONSERVATION IMPROVEMENT.

Subdivision 1.

Definitions.

For purposes of this section and section 216B.16, subdivision 6b, the terms defined in this subdivision have the meanings given them.

(a) "Commission" means the Public Utilities Commission.

(b) "Commissioner" means the commissioner of commerce.

(c) "Department" means the Department of Commerce.

(d) "Energy conservation" means demand-side management of energy supplies resulting in a net reduction in energy use. Load management that reduces overall energy use is energy conservation.

(e) "Energy conservation improvement" means a project that results in energy efficiency or energy conservation. Energy conservation improvement may include waste heat that is recovered and converted into electricity, but does not include electric utility infrastructure projects approved by the commission under section 216B.1636. Energy conservation improvement also includes waste heat recovered and used as thermal energy.

(f) "Energy efficiency" means measures or programs, including energy conservation measures or programs, that target consumer behavior, equipment, processes, or devices designed to produce either an absolute decrease in consumption of electric energy or natural gas or a decrease in consumption of electric energy or natural gas on a per unit of production basis without a reduction in the quality or level of service provided to the energy consumer.

(g) "Gross annual retail energy sales" means annual electric sales to all retail customers in a utility's or association's Minnesota service territory or natural gas throughput to all retail customers, including natural gas transportation customers, on a utility's distribution system in Minnesota. For purposes of this section, gross annual retail energy sales exclude:

(1) gas sales to:

(i) a large energy facility;

(ii) a large customer facility whose natural gas utility has been exempted by the commissioner under subdivision 1a, paragraph (b), with respect to natural gas sales made to the large customer facility; and

(iii) a commercial gas customer facility whose natural gas utility has been exempted by the commissioner under subdivision 1a, paragraph (c), with respect to natural gas sales made to the commercial gas customer facility; and

(2) electric sales to a large customer facility whose electric utility has been exempted by the commissioner under subdivision 1a, paragraph (b), with respect to electric sales made to the large customer facility.

(h) "Investments and expenses of a public utility" includes the investments and expenses incurred by a public utility in connection with an energy conservation improvement, including but not limited to:

(1) the differential in interest cost between the market rate and the rate charged on a no-interest or below-market interest loan made by a public utility to a customer for the purchase or installation of an energy conservation improvement;

(2) the difference between the utility's cost of purchase or installation of energy conservation improvements and any price charged by a public utility to a customer for such improvements.

(i) "Large customer facility" means all buildings, structures, equipment, and installations at a single site that collectively (1) impose a peak electrical demand on an electric utility's system of not less than 20,000 kilowatts, measured in the same way as the utility that serves the customer facility measures electrical demand for billing purposes or (2) consume not less than 500 million cubic feet of natural gas annually. In calculating peak electrical demand, a large customer facility may include demand offset by on-site cogeneration facilities and, if engaged in mineral extraction, may aggregate peak energy demand from the large customer facility's mining and processing operations.

(j) "Large energy facility" has the meaning given it in section 216B.2421, subdivision 2, clause (1).

(k) "Load management" means an activity, service, or technology to change the timing or the efficiency of a customer's use of energy that allows a utility or a customer to respond to wholesale market fluctuations or to reduce peak demand for energy or capacity.

(l) "Low-income programs" means energy conservation improvement programs that directly serve the needs of low-income persons, including low-income renters.

(m) "Qualifying utility" means a utility that supplies the energy to a customer that enables the customer to qualify as a large customer facility.

(n) "Waste heat recovered and used as thermal energy" means capturing heat energy that would otherwise be exhausted or dissipated to the environment from machinery, buildings, or industrial processes and productively using such recovered thermal energy where it was captured or distributing it as thermal energy to other locations where it is used to reduce demand-side consumption of natural gas, electric energy, or both.

(o) "Waste heat recovery converted into electricity" means an energy recovery process that converts otherwise lost energy from the heat of exhaust stacks or pipes used for engines or manufacturing or industrial processes, or the reduction of high pressure in water or gas pipelines.

Subd. 2c.

Performance incentives.

By December 31, 2008, the commission shall review any incentive plan for energy conservation improvement it has approved under section 216B.16, subdivision 6c, and adjust the utility performance incentives to recognize making progress toward and meeting the energy-savings goals established in subdivision 1c.

Subd. 4.

Federal law prohibitions.

If investments by public utilities in energy conservation improvements are in any manner prohibited or restricted by federal law and there is a provision under which the prohibition or restriction may be waived, then the commission, the governor, or any other necessary state agency or officer shall take all necessary and appropriate steps to secure a waiver with respect to those public utility investments in energy conservation improvements included in this section.