Engrossments
Introduction		Posted on 03/10/2021
1st Engrossment		Posted on 04/12/2021

ARTICLE 1

ENERGY CONSERVATION AND STORAGE

Section 1.

Minnesota Statutes 2020, section 16B.86, is amended to read:

16B.86 deleted text begin PRODUCTIVITYdeleted text end new text begin STATE BUILDING ENERGY CONSERVATION
IMPROVEMENT REVOLVINGnew text end LOAN ACCOUNT.

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section and section 16B.87, the
following terms have the meanings given.
new text end

new text begin (b) "Energy conservation" has the meaning given in section 216B.241, subdivision 1,
paragraph (d).
new text end

new text begin (c) "Energy conservation improvement" has the meaning given in section 216B.241,
subdivision 1, paragraph (e).
new text end

new text begin (d) "Energy efficiency" has the meaning given in section 216B.241, subdivision 1,
paragraph (f).
new text end

new text begin (e) "Project" means the energy conservation improvements financed by a loan made
under this section.
new text end

new text begin (f) "State building" means an existing building owned by the state of Minnesota.
new text end

new text begin Subd. 2. new text end

new text begin Account established. new text end

The deleted text begin productivitydeleted text end new text begin state building energy conservation
improvement revolvingnew text end loan account is new text begin established as new text end a deleted text begin specialdeleted text end new text begin separatenew text end account in the state
treasury. new text begin The commissioner shall manage the account and shall credit to the account
investment income, repayments of principal and interest, and any other earnings arising
from assets of the account. new text end Money in the account is appropriated to the commissioner of
administration to make loans to deleted text begin finance agency projects that will result in either reduced
operating costs or increased revenues, or both, for a state agencydeleted text end new text begin state agencies to implement
energy conservation and energy efficiency improvements in state buildings under section
16B.87new 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. 2.

Minnesota Statutes 2020, section 16B.87, is amended to read:

16B.87 AWARD AND REPAYMENT OF deleted text begin PRODUCTIVITYdeleted text end new text begin STATE BUILDING
ENERGY IMPROVEMENT CONSERVATIONnew text end LOANS.

Subdivision 1.

Committee.

The deleted text begin Productivitydeleted text end new text begin State Building Energy Conservation
Improvementnew text end Loan Committee consists of the commissioners of administration, management
and budget, and deleted text begin revenuedeleted text end new text begin commercenew text end . The commissioner of administration serves as chair of
the committee. The members serve without compensation or reimbursement for expenses.

Subd. 2.

Award and terms of loans.

new text begin (a) new text end An agency shall apply for a loan on a form
deleted text begin provideddeleted text end new text begin developednew text end by the commissioner of administrationdeleted text begin .deleted text end new text begin that requires an applicant to
submit the following information:
new text end

new text begin (1) a description of the proposed project, including existing equipment, structural
elements, operating characteristics, and other conditions affecting energy use that the energy
conservation improvements financed by the loan modify or replace;
new text end

new text begin (2) the total estimated project cost and the loan amount sought;
new text end

new text begin (3) a detailed project budget;
new text end

new text begin (4) projections of the proposed project's expected energy and monetary savings;
new text end

new text begin (5) information demonstrating the agency's ability to repay the loan;
new text end

new text begin (6) a description of the energy conservation programs offered by the utility providing
service to the state building from which the applicant seeks additional funding for the project;
and
new text end

new text begin (7) any additional information requested by the commissioner.
new text end

new text begin (b)new text end The committee shall review applications for loans and shall award a loan based upon
criteria adopted by the committee. deleted text begin The committee shall determine the amount, interest, and
other terms of the loan. The time for repayment of a loan may not exceed five years.deleted text end new text begin A loan
made under this section must:
new text end

new text begin (1) be at or below the market rate of interest, including a zero interest loan; and
new text end

new text begin (2) have a term no longer than seven years.
new text end

new text begin (c) In making awards, the committee shall give preference to:
new text end

new text begin (1) applicants that have sought funding for the project through energy conservation
projects offered by the utility serving the state building that is the subject of the application;
and
new text end

new text begin (2) to the extent feasible, applications for state buildings located within the electric retail
service area of the utility that is subject to section 116C.779.
new text end

Subd. 3.

Repayment.

An agency receiving a loan under this section shall repay the loan
according to the terms of the loan agreement. The principal and interest must be paid to the
commissioner of administrationnew text begin ,new text end who shall deposit it in the deleted text begin productivitydeleted text end new text begin state building energy
conservation improvement revolvingnew text end loan deleted text begin funddeleted text end new text begin account. Payments of loan principal and
interest must begin no later than one year after the project is completednew text end .

Sec. 3.

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 that benefit the public
utility's 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 are innovative clean technologies;
new text end

new text begin (2) the investment in an innovative clean energy technology is likely to provide benefits
to customers that exceed the technology's cost;
new text end

new text begin (3) the public utility is meeting its energy conservation goals under section 216B.241;
and
new text end

new text begin (4) the project complies with the spending limits under paragraph (d).
new text end

new text begin (d) Over any three consecutive years, a public utility must not spend more on innovative
clean technologies under this section than:
new text end

new text begin (1) for a public utility providing service to 200,000 or more retail Minnesota customers,
$6,000,000; or
new text end

new text begin (2) for a public utility providing service to fewer than 200,000 retail Minnesota customers,
$3,000,000.
new text end

new text begin (e) The commission may authorize a public utility to file a rate schedule containing
provisions that automatically adjust charges for public utility service in direct relation to
changes in prudent costs incurred by a public utility under this section, up to the amounts
allowed under paragraph (d).To the extent the public 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

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2020, 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 the timing and method used by energy consumers to manage energy
use provides significant benefits to the consumers and to the utility system as a whole. new text end The
legislature further finds that cost-effective energy savingsnew text begin and load management programsnew 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 equaldeleted text end new text begin equivalentnew text end to at least deleted text begin 1.5deleted text end new text begin 2.5new 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 measures, 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 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.
new text end

new text begin (c) The commissioner must provide a reasonable estimate of progress made toward the
statewide energy-savings goal under paragraph (a) in the annual report required under section
216B.241, subdivision 1c, and make recommendations for administrative or legislative
initiatives to increase energy savings toward that goal. The commissioner must annually
report on the energy productivity of the state's economy by estimating the ratio of economic
output produced in the most recently completed calendar year to the primary energy inputs
used in that year.
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.

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

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of section 216B.16, subdivision 6b, and
sections 216B.2401 to 216B.241, the following terms have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Consumer-owned utility. new text end

new text begin "Consumer-owned utility" means a municipal gas
utility, a municipal electric utility, or a cooperative electric association.
new text end

new text begin Subd. 3. new text end

new text begin Cumulative lifetime savings. new text end

new text begin "Cumulative lifetime savings" means the total
electric energy or natural gas savings in a given year from energy conservation improvements
installed in that given year and energy conservation improvements installed in previous
years that are still in operation.
new text end

new text begin Subd. 4. new text end

new text begin Efficient fuel-switching improvement. new text end

new text begin "Efficient fuel-switching improvement"
means a project that:
new text end

new text begin (1) replaces a fuel used by a customer with electricity or natural gas delivered at retail
by a utility subject to section 216B.2403 or 216B.241;
new text end

new text begin (2) results in a net increase in the use of electricity or natural gas and a net decrease in
source energy consumption on a fuel-neutral basis;
new text end

new text begin (3) otherwise meets the criteria established for consumer-owned utilities in section
216B.2403, subdivision 8, and for public utilities under section 216B.241, subdivisions 11
and 12; and
new text end

new text begin (4) requires the installation of equipment that utilizes electricity or natural gas, resulting
in a reduction or elimination of the previous fuel used.
new text end

new text begin An efficient fuel-switching improvement is not an energy conservation improvement or
energy efficiency even if it results in a net reduction in electricity or natural gas consumption.
new text end

new text begin Subd. 5. new text end

new text begin Energy conservation. new text end

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

new text begin Subd. 6. new text end

new text begin Energy conservation improvement. new text end

new text begin "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 or used
as thermal energy, but does not include electric utility infrastructure projects approved by
the commission under section 216B.1636.
new text end

new text begin Subd. 7. new text end

new text begin Energy efficiency. new text end

new text begin "Energy efficiency" means measures or programs, including
energy conservation measures or programs, that: (1) target consumer behavior, equipment,
processes, or devices; (2) are designed to reduce the consumption of electricity or natural
gas on either an absolute or per unit of production basis; and (3) do not reduce the quality
or level of service provided to an energy consumer.
new text end

new text begin Subd. 8. new text end

new text begin Fuel. new text end

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

new text begin Subd. 9. new text end

new text begin Fuel neutral. new text end

new text begin "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 Subd. 10. new text end

new text begin Gross annual retail energy sales. new text end

new text begin "Gross annual retail energy sales" means
a utility's annual electric sales to all Minnesota retail customers, 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 (a), with respect to natural
gas sales made to the large customer facility; or
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 (b), with respect to
natural gas sales made to the commercial gas customer facility;
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 (a), with respect
to electric sales made to the large customer facility; or
new text end

new text begin (3) the amount of electric sales prior to December 31, 2032, that are associated with a
utility's program, rate, or tariff for electric vehicle charging based on a methodology and
assumptions developed by the department in consultation with interested stakeholders no
later than December 31, 2021. After December 31, 2032, incremental sales to electric
vehicles must be included in calculating a utility's gross annual retail sales.
new text end

new text begin Subd. 11. new text end

new text begin Investments and expenses of a public utility. new text end

new text begin "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 Subd. 12. new text end

new text begin Large customer facility. new text end

new text begin "Large customer facility" means all buildings,
structures, equipment, and installations at a single site that in aggregate: (1) impose a peak
electrical demand on an electric utility's system of at least 20,000 kilowatts, measured in
the same manner 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 include
peak energy demand from the large customer facility's mining processing operations.
new text end

new text begin Subd. 13. new text end

new text begin Large energy facility. new text end

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

new text begin Subd. 14. new text end

new text begin Lifetime energy savings. new text end

new text begin "Lifetime energy savings" means the amount of
savings a particular energy conservation improvement is projected to produce over the
improvement's effective useful lifetime.
new text end

new text begin Subd. 15. new text end

new text begin Load management. new text end

new text begin "Load management" means an activity, service, or
technology that changes 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 electricity or natural gas. Load management that reduces a customer's
net annual energy consumption is also energy conservation.
new text end

new text begin Subd. 16. new text end

new text begin Low-income household. new text end

new text begin "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 Subd. 17. new text end

new text begin Low-income programs. new text end

new text begin "Low-income programs" means energy conservation
improvement programs that directly serve the needs of low-income households, including
low-income renters.
new text end

new text begin Subd. 18. new text end

new text begin Member. new text end

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

new text begin Subd. 19. new text end

new text begin Multifamily building. new text end

new text begin "Multifamily building" means a residential building
containing five or more dwelling units.
new text end

new text begin Subd. 20. new text end

new text begin Preweatherization measure. new text end

new text begin "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 Subd. 21. new text end

new text begin Qualifying utility. new text end

new text begin "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 Subd. 22. new text end

new text begin Waste heat recovered and used as thermal energy. new text end

new text begin "Waste heat recovered
and used as thermal energy" means the capture of heat energy that would otherwise 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 Subd. 23. new text end

new text begin Waste heat recovery converted into electricity. new text end

new text begin "Waste heat recovery
converted into electricity" means an energy recovery process that converts to electricity
energy from the heat of exhaust stacks or pipes used for engines or manufacturing or
industrial processes, or from the reduction of high pressure in water or gas pipelines, that
would otherwise be lost.
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. 6.

new text begin [216B.2403] CONSUMER-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, which 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 may be achieved only by the following
consumer-owned 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, that result in increased efficiency greater than would have occurred through normal
maintenance activity;
new text end

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

new text begin (4) 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.
new text end

new text begin (b) The energy-savings goals specified in this section must be calculated based on
weather-normalized sales averaged over the most recent three years. A consumer-owned
utility may elect to carry forward energy savings in excess of 1.5 percent for a year to the
next three years, except that energy savings from electric utility infrastructure projects may
be carried forward for five years. A particular energy savings can only be used to meet one
year's goal.
new text end

new text begin (c) 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 that exceed the
minimum level established under this subdivision if cost-effective opportunities and funding
are available, considering other potential investments the consumer-owned utility intends
to make to benefit customers during the term of the plan filed under subdivision 3.
new text end

new text begin Subd. 3. new text end

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

new text begin (a)
By June 1, 2022, and at least every three years thereafter, 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, load management, and other
measures the consumer-owned utility intends to offer to achieve the utility's energy savings
goal.
new text end

new text begin (b) A plan's term may extend up to three years. A multiyear plan must identify the total
energy savings and energy savings resulting from energy conservation improvements that
are projected to be achieved in each year of the plan. A multiyear plan that does not, in each
year of the plan, meet both the minimum energy savings goal from energy conservation
improvements and the total energy savings goal of 1.5 percent, or lower goals adjusted by
the commissioner under paragraph (k), must:
new text end

new text begin (1) state why each goal is projected to be unmet; and
new text end

new text begin (2) demonstrate how the consumer-owned utility proposes to meet both goals on an
average basis over the duration of the plan.
new text end

new text begin (c) A plan filed under this subdivision must provide:
new text end

new text begin (1) for existing programs, 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; and
new text end

new text begin (2) for new programs, a preliminary analysis upon which the program will proceed, in
parallel with further development of assumptions and standards.
new text end

new text begin (d) The commissioner must evaluate a plan filed under this subdivision based on the
plan's likelihood to achieve the energy-savings goals established in subdivision 2. The
commissioner may make recommendations to a consumer-owned utility regarding ways to
increase the effectiveness of the consumer-owned utility's energy conservation activities
and programs under this subdivision. The commissioner may recommend that a
consumer-owned utility implement a cost-effective energy conservation program, including
an energy conservation program suggested by an outside source, including but not limited
to a political subdivision, nonprofit corporation, or community organization.
new text end

new text begin (e) Beginning June 1, 2023, and every June 1 thereafter, each consumer-owned utility
must file: (1) an annual update identifying the status of the plan filed under this subdivision,
including: (i) total expenditures and investments made to date under the plan; and (ii) any
intended changes to the plan; and (2) a summary of the annual energy-savings achievements
under a plan. An annual filing made in the last year of a plan must contain a new plan that
complies with this section.
new text end

new text begin (f) When evaluating the cost-effectiveness of a consumer-owned utility's energy
conservation programs, the consumer-owned utility and the commissioner must consider
the costs and benefits to ratepayers, the utility, participants, and society. The commissioner
must also consider the rate at which the consumer-owned utility is increasing energy savings
and expenditures on energy conservation, and lifetime energy savings and cumulative energy
savings.
new text end

new text begin (g) A consumer-owned utility may annually spend and invest up to ten percent of the
total amount spent and invested on energy conservation improvements on research and
development projects that meet the definition of energy conservation improvement.
new text end

new text begin (h) A generation and transmission cooperative electric association or municipal power
agency that provides energy services to consumer-owned utilities may file a plan under this
subdivision on behalf of the consumer-owned utilities to which the association or agency
provides energy services and may make investments, offer conservation programs, and
otherwise fulfill the energy-savings goals and reporting requirements under this subdivision
for the consumer-owned utilities on an aggregate basis.
new text end

new text begin (i) 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 exempted under section 216B.241, subdivision 1a.
new text end

new text begin (j) The energy conservation and optimization plan of a consumer-owned utility may
include activities to improve energy efficiency in the public schools served by the utility.
These activities may include programs to:
new text end

new text begin (1) increase the efficiency of the school's lighting and heating and cooling systems;
new text end

new text begin (2) recommission buildings;
new text end

new text begin (3) train building operators; and
new text end

new text begin (4) provide opportunities to educate students, teachers, and staff regarding energy
efficiency measures implemented at the school.
new text end

new text begin (k) A consumer-owned utility may request that the commissioner adjust the
consumer-owned utility's minimum goal for energy savings from energy conservation
improvements under subdivision 2, paragraph (a), for the duration of the plan filed under
this subdivision. The request must be made by January 1 of the year the consumer-owned
utility is required to file a plan under this subdivision. 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 consumer-owned utility's service territory;
new text end

new text begin (5) the cost-effectiveness and quality of the energy conservation programs offered by
the consumer-owned 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 energy 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 an average of one percent per year over
the consecutive years of the plan's duration, including the year the minimum energy savings
goal is adjusted.
new text end

new text begin Subd. 4. new text end

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

new text begin (a) Except as otherwise
provided, a consumer-owned utility that the commissioner determines falls short of the
minimum energy savings goal from energy conservation improvements established in
subdivision 2, paragraph (a), for three consecutive years during which the utility has annually
spent on energy conservation improvements less than 1.5 percent of gross operating revenues
for an electric utility, or less than 0.5 percent of gross operating revenues for a natural gas
utility, must spend no less than the following amounts for energy conservation improvements:
new text end

new text begin (1) for a municipality, 0.5 percent of gross operating revenues from the sale of gas and
1.5 percent of 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 gross operating revenues from
service provided in Minnesota, excluding gross operating revenues from service provided
in Minnesota to large electric customers facilities indirectly through a distribution cooperative
electric association.
new text end

new text begin (b) The commissioner must not impose the spending requirement under this subdivision
if the commissioner has determined that the utility has followed the commissioner's
recommendations, if any, provided under subdivision 3, paragraph (d).
new text end

new text begin (c) Upon request of a consumer-owned utility, the commissioner may reduce the amount
or duration of the spending requirement imposed under this subdivision, or both, if the
commissioner determines that the consumer-owned utility's failure to maintain the minimum
energy savings goal is the result of:
new text end

new text begin (1) a natural disaster or other emergency that is declared by the executive branch through
an emergency executive order that affects the consumer-owned utility's service area;
new text end

new text begin (2) a unique load distribution experienced by the consumer-owned utility; or
new text end

new text begin (3) other factors that the commissioner determines justifies a reduction.
new text end

new text begin (d) Unless the commissioner reduces the duration of the spending requirement under
paragraph (c), the spending requirement under this subdivision remains in effect until the
consumer-owned utility has met the minimum energy savings goal for three consecutive
years.
new text end

new text begin Subd. 5. new text end

new text begin Energy conservation programs for low-income households. new text end

new text begin (a) A
consumer-owned utility subject to this section must provide energy conservation programs
to low-income households. The commissioner must evaluate a consumer-owned utility's
plans under this section by considering the consumer-owned utility's historic spending on
energy conservation programs directed to low-income households, the rate of customer
participation in and the energy savings resulting from those programs, and the number of
low-income persons residing in the consumer-owned utility's service territory. A municipal
utility that furnishes natural gas service must spend at least 0.2 percent of the municipal
utility's most recent three-year average gross operating revenue from residential customers
in Minnesota on energy conservation programs for low-income households. A
consumer-owned utility that furnishes electric service must spend at least 0.2 percent of the
consumer-owned utility's gross operating revenue from residential customers in Minnesota
on energy conservation programs for low-income households. The requirement under this
paragraph applies to each generation and transmission cooperative association's aggregate
gross operating revenue from the sale of electricity to residential customers in Minnesota
by all of the association's member distribution cooperatives.
new text end

new text begin (b) To meet all or part of the spending requirements of paragraph (a), a consumer-owned
utility may contribute money to the energy and conservation account established in section
216B.241, subdivision 2a. An energy conservation optimization plan must state the amount
of contributions the consumer-owned utility plans to make to the energy and conservation
account. Contributions to the account must be used for energy conservation programs serving
low-income households, including renters, located in the service area of the consumer-owned
utility making the contribution. Contributions must be remitted to the commissioner by
February 1 each year.
new text end

new text begin (c) The commissioner must establish energy conservation programs for low-income
households funded through contributions made to the energy and conservation account
under paragraph (b). When establishing energy conservation programs for low-income
households, the commissioner must consult political subdivisions, utilities, and nonprofit
and community organizations, including organizations providing energy and weatherization
assistance to low-income households. The commissioner must record and report expenditures
and energy savings achieved as a result of energy conservation programs for low-income
households funded through the energy and conservation account in the report required under
section 216B.241, subdivision 1c, paragraph (f). The commissioner may contract with a
political subdivision, nonprofit or community organization, public utility, municipality, or
consumer-owned utility 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 the required
spending under this subdivision if the consumer-owned utility and the commissioner were
unable to expend the amount required for three consecutive years.
new text end

new text begin (e) The commissioner must develop and establish guidelines for determining the eligibility
of multifamily buildings to participate in energy conservation programs provided to
low-income households. Notwithstanding the definition of low-income household in section
216B.2402, a consumer-owned utility or association may apply the most recent guidelines
published by the department for purposes of determining the eligibility of multifamily
buildings to participate in low-income programs. The commissioner must convene a
stakeholder group to review and update these guidelines by July 1, 2022, and at least once
every five years thereafter. The stakeholder group must include but is not limited to
representatives of public utilities; municipal electric or gas utilities; electric cooperative
associations; multifamily housing owners and developers; and low-income advocates.
new text end

new text begin (f) Up to 15 percent of a consumer-owned utility's spending on low-income energy
conservation programs may be spent on preweatherization measures. A consumer-owned
utility is prohibited from claiming energy savings from preweatherization measures toward
the consumer-owned utility's energy savings goal.
new text end

new text begin (g) The commissioner must, by order, establish a list of preweatherization measures
eligible for inclusion in low-income energy conservation programs no later than March 15,
2022.
new text end

new text begin (h) A Healthy AIR (Asbestos Insulation Removal) account is established as a separate
account in the special revenue fund in the state treasury. A consumer-owned utility may
elect to contribute money to the Healthy AIR account to provide preweatherization measures
for households eligible for weatherization assistance from the state weatherization assistance
program in section 216C.264. Remediation activities must be executed in conjunction with
federal weatherization assistance program services. Money contributed to the account by a
consumer-owned utility counts toward: (1) the minimum low-income spending requirement
under paragraph (a); and (2) the cap on preweatherization measures under paragraph (f).
Money in the account is annually appropriated to the commissioner of commerce to pay for
Healthy AIR-related activities.
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 section; 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 preweatherization measure or energy conservation
improvement. new text end

new text begin (a) A preweatherization measure or energy conservation improvement
installed in a building under this section, excluding a system owned by a 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 consumer-owned utility in case of a loan to the building
owner for the improvement.
new text end

new text begin (b) A consumer-owned utility has no liability for loss, damage, or injury directly or
indirectly caused by a preweatherization measure or energy conservation improvement,
unless a consumer-owned utility is determined to have been negligent in purchasing,
installing, or modifying a preweatherization measure or energy conservation improvement.
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) A fuel-switching
improvement is deemed efficient if, applying the technical criteria established under section
216B.241, subdivision 1d, paragraph (b), the improvement, relative to the fuel being
displaced:
new text end

new text begin (1) results in a net reduction in the 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 consumer-owned utility, the reduction in emissions
must be measured based on the hourly emissions profile of the consumer-owned utility or
the utility's electricity supplier, as reported in the most recent resource plan approved by
the commission under section 216B.2422. If the hourly emissions profile is not available,
the commissioner must develop a method consumer-owned utilities must use to estimate
that value;
new text end

new text begin (3) is cost-effective, considering the costs and benefits from the perspective of the
consumer-owned utility, participants, and society; and
new text end

new text begin (4) is installed and operated in a manner that improves the consumer-owned utility's
system load factor.
new text end

new text begin (b) For purposes of this subdivision, "source energy" means the total amount of primary
energy required to deliver energy services, adjusted for losses in generation, transmission,
and distribution, and expressed on a fuel-neutral basis.
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 under this section to the department using the department's electronic filing
system. The commissioner may approve an exemption from this requirement if a
consumer-owned utility is unable to submit filings via the department's electronic filing
system. All other interested parties must submit filings to the department via the department's
electronic filing system whenever practicable but may also file by personal delivery or by
mail.
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, a consumer-owned utility, or an 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 e-mail 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 consumer-owned
utilities subject to this section to carry out the purposes of section 216B.241, subdivisions
1d, 1e, and 1f. An assessment under this subdivision must be proportionate to a
consumer-owned utility's gross operating revenue from sales of gas or electric service in
Minnesota during the previous calendar year, as applicable. 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 EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2020, section 216B.241, subdivision 1a, is amended to read:

Subd. 1a.

deleted text begin Investment, expenditure, and contribution; public utilitydeleted text end new text begin Large customer
facilitynew 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 deleted text begin the investment and
expenditure requirements of paragraph (a)deleted text end new text begin contributing to investments and expenditures
made under an energy and conservation optimization plan filed under subdivision 2 or
section 216B.2403, subdivision 3,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 deleted text begin the investment and expenditure requirements of paragraph (a)deleted text end new text begin contributing
to investments and expenditures made under an energy and conservation optimization plan
filed under subdivision 2 or section 216B.2403, subdivision 3,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) 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 end

deleted text begin (e)deleted text end new text begin (c)new text end A public utilitynew text begin , consumer-owned utility,new text end 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
paragraphnew text begin (a) ornew 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) otherwisedeleted text end new text begin the decision isnew text end not deleted text begin bedeleted text end in the public interest.

new text begin (d) 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
to which the commissioner has issued an exemption under 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. 8.

Minnesota Statutes 2020, 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 deleted text begin improvement expendituresdeleted text end new text begin improvementsnew text end and
shall evaluate an energy conservation improvement program on how well it meets the goals
set.

(b) deleted text begin Each individualdeleted text end new text begin A public new text end utility deleted text begin and association shall havedeleted text end new text begin providing electric service
hasnew text end an annual energy-savings goal equivalent to deleted text begin 1.5deleted text end new text begin 1.75new 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). A public utility
providing natural gas service has an annual energy-savings goal equivalent to one percent
of gross annual retail energy sales, which must not be lowered by the commissioner.new text end The
savings goals must be calculated based on the most recent three-year weather-normalized
average. Anew text begin publicnew text end utility deleted text begin or associationdeleted text end new text begin providing electric servicenew text end may elect to carry forward
energy savings in excess of deleted text begin 1.5deleted text end new text begin 1.75new text end percent for a year to the succeeding three calendar
years, except that savings from electric utility infrastructure projects allowed under paragraph
(d) may be carried forward for five years.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 new text begin only new text end be used deleted text begin only fordeleted text end new text begin to meetnew text end 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 improvementdeleted text end new text begin and optimizationnew text end plan filing, a new text begin public
new text end utility deleted text begin or associationdeleted 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.

new text begin (d)new text end 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.

deleted text begin A utility or association may include in its energy conservation plan energy savings from deleted text end new text begin
The balance of the 1.75 percent annual energy savings goal may be achieved through energy
savings from:
new text end

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

new text begin (2)new text end electric utility infrastructure projects approved by the commission under section
216B.1636 new text begin that result in increased efficiency greater than would have occurred through
normal maintenance activity; new text end or deleted text begin 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. 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. Electric utility
infrastructure projects must result in increased energy efficiency greater than that which
would have occurred through normal maintenance activity
deleted text end

new text begin (3) 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 facilitynew text end .

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 ordeleted text end new text begin (e) A publicnew 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 considernew text begin : (1)new text end the
costs and benefits to ratepayers, the utility, participants, and societydeleted text begin . In addition, the
commissioner shall considerdeleted text end new text begin ; (2)new text end the rate at which deleted text begin an association or municipaldeleted text end new text begin a publicnew text end
utility is increasing new text begin both new text end its energy savings and its expenditures on energy conservationnew text begin ;
and (3) the public utility's lifetime energy savings and cumulative energy savingsnew 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 energynew text begin and capacitynew text end savings and estimated carbon dioxide reductions
achieved by the deleted text begin energy conservation improvementdeleted text end programsnew text begin under this section and section
216B.2403new 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 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 commissionernew text begin , and must estimate progress
made toward the statewide energy-savings goal under section 216B.2401new 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

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

Minnesota Statutes 2020, 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 filed 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 new text begin by
utilities new text end 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 reported in plans submitted under this section and section 216B.2403.
new text end

new text begin (b)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 appropriatedeleted text begin , in their service territoriesdeleted text end . 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.

new text begin (c)new text end 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.

new text begin (d)new text end 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.

deleted text begin (b) 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
energy savings of the energy conservation improvements required by this section. This
paragraph expires June 30, 2018.
deleted text end

new text begin (e) The commissioner must work with stakeholders to develop technical guidelines that
public utilities and consumer-owned utilities must use to:
new text end

new text begin (1) determine whether deployment of a fuel-switching improvement meets the criteria
established in subdivision 11, paragraph (e), or section 216B.2403, subdivision 8, as
applicable; and
new text end

new text begin (2) calculate the amount of energy saved by deploying a fuel-switching improvement.
new text end

new text begin The guidelines under this paragraph must be issued by the commissioner by order no later
than March 15, 2022, and must be updated as the commissioner determines is necessary.
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. 10.

Minnesota Statutes 2020, 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.

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 2020, section 216B.241, subdivision 1g, is amended to read:

Subd. 1g.

Manner of filing and service.

(a) A public utilitydeleted text begin , generation and transmission
cooperative electric association, municipal power agency, cooperative electric association,
and municipal utilitydeleted text end shall submit filings to the department via the department's electronic
filing system. The commissioner may approve an exemption from this requirement in the
event deleted text begin an affecteddeleted text end new text begin a public new text end utility deleted text begin or associationdeleted text end is unable to submit filings via the department's
electronic filing system. All other interested parties shall submit filings to the department
via the department's electronic filing system whenever practicable but may also file by
personal delivery or by mail.

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

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 2020, section 216B.241, subdivision 2, is amended to read:

Subd. 2.

deleted text begin Programsdeleted text end new text begin Public utility; energy conservation and optimization plansnew text end .

(a)
The commissioner may require new text begin a new text end public deleted text begin utilitiesdeleted text end new text begin utilitynew text end 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. deleted text begin The required
programs must cover no more than a three-year period.
deleted text end

new text begin (b) Anew text end public deleted text begin utilitiesdeleted text end new text begin utilitynew text end shall filenew text begin an energynew text end conservation deleted text begin improvement plansdeleted text end new text begin and
optimization plannew text end by June 1, on a schedule determined by order of the commissioner, but
at least every three years. deleted text begin Plans receiveddeleted text end new text begin As provided in subdivisions 11 to 13, 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. The plan must estimate the lifetime energy savings and cumulative
lifetime energy savings projected to be achieved under the plan. A plan filednew text end 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 (c)new text end The commissioner shall evaluate the deleted text begin programdeleted text end new text begin plannew text end 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 choicedeleted text begin ,deleted text end by consumers participating in deleted text begin thedeleted text end new text begin an energy conservationnew text end
programdeleted text begin ,deleted text end 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.

deleted text begin (b)deleted text end new text begin (d)new text end 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

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

deleted text begin (d) 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

new text begin (f)new text end The commissioner shall consider and may require a new text begin public new text end utility to undertake deleted text begin adeleted text end new text begin an
energy conservationnew text end program suggested by an outside source, including a political
subdivision, a nonprofit corporation, or community organization.

deleted text begin (e)deleted text end new text begin (g)new text end A new text begin public new text end utility, a political subdivision, or a nonprofit or community organization
that has suggested deleted text begin adeleted text end new text begin an energy conservationnew text end program, the attorney general acting on behalf
of consumers and small business interests, or a new text begin public new text end utility customer that has suggested deleted text begin adeleted text end new text begin
an energy conservationnew text end 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 new text begin energy conservation new text end 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 deleted text begin adeleted text end new text begin an energy conservationnew text end program
is not in the public interest.

deleted text begin (f)deleted text end new text begin (h)new text end The commissioner may order a public utility to include, with the filing of the
new text begin public new text end utility's annual status report, the results of an independent audit of the new text begin public new text end 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 new text begin public new text end utility. The audit must
specify the energy savings or increased efficiency in the use of energy within the service
territory of the new text begin public new text end utility that is the result of the new text begin public utility's new text end spending and investments.
The audit must evaluate the cost-effectiveness of the new text begin public new text end 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 (i) The energy conservation and optimization plan of each public utility subject to this
section must include activities to improve energy efficiency in public schools served by the
utility. As applicable to each public utility, at a minimum the activities must include programs
to increase the efficiency of the school's lighting and heating and cooling systems, and to
provide for building recommissioning, building operator training, and opportunities to
educate students, teachers, and staff regarding energy efficiency measures implemented at
the school.
new text end

new text begin (j) The commissioner may require investments or spending greater than the amounts
proposed in a plan filed under this subdivision or section 216C.17 for a public utility whose
most recent advanced forecast required under section 216B.2422 projects a peak demand
deficit of 100 megawatts or more within five years under midrange forecast assumptions.
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 2020, section 216B.241, subdivision 2b, is amended to read:

Subd. 2b.

Recovery of expenses.

new text begin (a) new text end The commission shall allow a new text begin public new text end utility to
recover expenses resulting from deleted text begin adeleted text end new text begin an energynew text end conservation deleted text begin improvement program requireddeleted text end new text begin
and optimization plan approvednew text end by the departmentnew text begin under this sectionnew 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 the energy and
conservation account unless the recovery would be inconsistent with a financial incentive
proposal approved by the commission. In addition,
deleted text end

new text begin (b)new text end A new text begin public new text end utility may file annually, or the Public Utilities Commission may require
the new text begin public new text end utility to file, and the commission may approvedeleted text begin ,deleted text end rate schedules containing
provisions for the automatic adjustment of charges for utility service in direct relation to
changes in the expenses of the new text begin public new text end utility for real and personal property taxes, fees, and
permits, the amounts of which the new text begin public new text end 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.

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.

Minnesota Statutes 2020, section 216B.241, subdivision 3, is amended to read:

Subd. 3.

Ownership of new text begin preweatherization measure or new text end energy conservation
improvement.

deleted text begin Andeleted text end new text begin (a) A preweatherization measure ornew text end energy conservation improvement
made to or installed in a building in accordance with this section, except systems owned by
deleted text begin thedeleted text end new text begin a public new text end 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 new text begin public new text end utility in case of a loan to the building
owner. deleted text begin The
deleted text end

new text begin (b) A publicnew text end utility has no liability for loss, damagenew text begin ,new text end or injury caused directly or indirectly
by deleted text begin andeleted text end new text begin a preweatherization measure ornew text end energy conservation improvement except for negligence
by the utility in deleted text begin purchase, installation, or modification of the product.deleted text end new text begin purchasing, installing,
or modifying a preweatherization measure or energy conservation improvement.
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.

Minnesota Statutes 2020, section 216B.241, subdivision 5, is amended to read:

Subd. 5.

Efficient lighting program.

(a) Each public utilitydeleted text begin , cooperative electric
association, and municipaldeleted text end new text begin and consumer-ownednew text end utility that provides electric service to
retail customers and is subject to subdivision 1c new text begin or section 216B.2403 new text end shall include as part
of its conservation improvement activities a program to strongly encourage the use of LED
lamps. The program must include at least a public information campaign to encourage use
of LED 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 LED 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,
deleted text begin a cooperative electric association, or a municipaldeleted text end new text begin or a consumer-ownednew text end 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 utilitydeleted text begin , cooperative electric association, or municipalitydeleted text end new text begin or
consumer-owned utilitynew text end 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 utilitydeleted text begin , cooperative electric association, or municipaldeleted text end new text begin or consumer-ownednew text end
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 utilitydeleted text begin , cooperative electric association, or municipaldeleted text end new text begin
or consumer-ownednew text end utility to promote the use of LED lamps and to deleted text begin collect fluorescent and
high-intensity dischargedeleted text end new text begin collect LEDnew text end lamps under this subdivision are conservation
improvement spending under this section.

(h) For the purposes of this subdivision, "LED lamp" means a light-emitting diode deleted text begin lamp
that consists of a solid state device that emits visible light when an electric current passes
through a semiconductordeleted text end new text begin bulb or lighting productnew 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. 16.

Minnesota Statutes 2020, 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 associationdeleted text end subject to subdivision 1c provides deleted text begin low-incomedeleted text end new text begin energy conservationnew text end
programsnew text begin to low-income householdsnew text end . When approving spending and energy-savings goals
for low-income programs, the commissioner shall consider historic spending and participation
levels, energy savings deleted text begin fordeleted text end new text begin achieved bynew text end 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 adeleted text end public utility furnishing gas service must spend at
least deleted text begin 0.4deleted text end new text begin 0.8new text end percentdeleted text begin ,deleted text end of its most recent three-year average gross operating revenue from
residential customers in the state on low-income programs. A new text begin publicnew text end utility deleted text begin or associationdeleted text end
that furnishes electric service must spend at least deleted text begin 0.1deleted text end new text begin 0.4 new text end percent of its gross operating
revenue from residential customers in the state on low-income programs. 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 associationdeleted text end may
contribute money to the energy and conservation accountnew text begin established under subdivision 2anew text end .
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 associationdeleted 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 new text begin energy conservation new text end programs to utilize
deleted text begin money contributeddeleted text end new text begin contributions madenew text end 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
deleted text begin engaged indeleted text end providing energy and weatherization assistance to low-income deleted text begin personsdeleted text end new text begin
householdsnew text end . deleted text begin Money contributeddeleted text end new text begin Contributions madenew text end to the energy and conservation account
under paragraph (b) must provide programs for low-income deleted text begin personsdeleted text end new text begin householdsnew text end , including
low-income renters, in the service territory of the new text begin public new text end utility deleted text begin or associationdeleted 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 deleted text begin (g)deleted text end new text begin (f)new text end . The commissioner may contract
with a political subdivision, nonprofit or community organization, public utility, deleted text begin municipality,deleted text end
or deleted text begin cooperative electric associationdeleted text end new text begin consumer-owned utilitynew text end 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 associationdeleted text end may petition the commissioner to modify its required
spending under paragraph (a) if the utility deleted text begin or associationdeleted text end and the commissioner have been
unable to expend the amount required under paragraph (a) for three consecutive years.

new text begin (e) The commissioner must develop and establish guidelines to determine the eligibility
of multifamily buildings to participate in low-income energy conservation programs.
Notwithstanding the definition of low-income household in section 216B.2402, for purposes
of determining the eligibility of multifamily buildings for low-income programs a public
utility may apply the most recent guidelines published by the department. The commissioner
must convene a stakeholder group to review and update guidelines by July 1, 2022, and at
least once every five years thereafter. The stakeholder group must include but is not limited
to representatives of public utilities as defined in section 216B.02, subdivision 4; municipal
electric or gas utilities; electric cooperative associations; multifamily housing owners and
developers; and low-income advocates.
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. A public utility is prohibited from claiming energy savings
from preweatherization measures toward the public utility's energy savings goal.
new text end

new text begin (g) The commissioner must, by order, establish a list of preweatherization measures
eligible for inclusion in low-income programs no later than March 15, 2022.
new text end

new text begin (h) A Healthy AIR (Asbestos Insulation Removal) account is established as a separate
account in the special revenue fund in the state treasury. A public utility may elect to
contribute money to the Healthy AIR account to provide preweatherization measures to
households eligible for weatherization assistance under section 216C.264. Remediation
activities must be executed in conjunction with federal weatherization assistance program
services. Money contributed to the account counts toward: (1) the minimum low-income
spending requirement in paragraph (a); and (2) the cap on preweatherization measures under
paragraph (f). Money in the account is annually appropriated to the commissioner of
commerce to pay for Healthy AIR-related activities.
new text end

deleted text begin (e)deleted text end new text begin (i)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 new text begin public new text end 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 new text begin public new text end utility. The energy and demand savings may, at the discretion of the new text begin public new text end 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.

new text begin EFFECTIVE DATE. new text end

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

Sec. 17.

Minnesota Statutes 2020, section 216B.241, subdivision 8, is amended to read:

Subd. 8.

Assessment.

The commission or department may assessnew text begin publicnew text end utilities subject
to this section deleted text begin in proportion to their respectivedeleted text end new text begin to carry out the purposes of subdivisions 1d,
1e, and 1f. An assessment under this subdivision must be proportionate to a public utility'snew text end
gross operating revenue from sales of gas or electric service within deleted text begin the statedeleted text end new text begin Minnesotanew text end
during the last calendar year deleted text begin to carry out the purposes of subdivisions 1d, 1e, and 1f. Those
assessmentsdeleted text end new text begin , as applicable. Assessments made under this subdivisionnew text end are not subject to the
cap on assessments provided by section 216B.62, or any other law.

new text begin EFFECTIVE DATE. new text end

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

Sec. 18.

Minnesota Statutes 2020, 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; electric utilities. new text end

new text begin (a)
A public utility providing electric service at retail may include in the plan required under
subdivision 2 programs to implement efficient fuel-switching improvements or combinations
of energy conservation improvements, fuel-switching improvements, and load management.
For each program, the public utility must provide a proposed budget, an analysis of the
program's cost-effectiveness, 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 the department determines the improvements meet the requirements of
paragraph (d). For fuel-switching improvements that require 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 if the department determines the
primary purpose and effect of the program is energy efficiency.
new text end

new text begin (c) A public utility may file a rate schedule with the commission that provides for annual
cost recovery of reasonable and prudent costs incurred to implement and promote efficient
fuel-switching programs. The commission may not approve a financial incentive to encourage
efficient fuel-switching programs operated by a public utility providing electric service.
new text end

new text begin (d) A fuel-switching improvement is deemed efficient if, applying the technical criteria
established under section 216B.241, subdivision 1d, paragraph (b), the improvement meets
the following criteria, relative to the fuel that is being displaced:
new text end

new text begin (1) results in a net reduction in the 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 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, considering the costs and benefits from the perspective of the utility,
participants, and society; and
new text end

new text begin (4) is installed and operated in a manner that improves the utility's system load factor.
new text end

new text begin (e) For purposes of this subdivision, "source energy" means the total amount of primary
energy required to deliver energy services, adjusted for losses in generation, transmission,
and distribution, and expressed on a fuel-neutral basis.
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. 19.

Minnesota Statutes 2020, section 216B.241, is amended by adding a subdivision
to read:

new text begin Subd. 12. new text end

new text begin Programs for efficient fuel-switching improvements; natural gas
utilities. new text end

new text begin (a) As part of a public utility's plan filed under subdivision 2, a public utility that
provides natural gas service to Minnesota retail customers may propose as an energy
conservation improvement one or more programs to install electric technologies that reduce
the consumption of natural gas by the utility's retail customers. The commissioner may
approve a proposed program if the commissioner, applying the technical criteria developed
under section 216B.241, subdivision 1d, paragraph (b), determines:
new text end

new text begin (1) the electric technology to be installed meets the criteria established under section
216B.241, subdivision 11, paragraph (d), clauses (1) and (2); and
new text end

new text begin (2) the program is cost-effective, considering the costs and benefits to ratepayers, the
utility, participants, and society.
new text end

new text begin (b) If a program is approved by the commission under this subdivision, the public utility
may count the program's energy savings toward the public utility's energy savings goal
under section 216B.241, subdivision 1c. Notwithstanding section 216B.2402, subdivision
4, efficient fuel-switching achieved through programs approved under this subdivision is
energy conservation.
new text end

new text begin (c) A public utility may file rate schedules with the commission that provide annual
cost-recovery for programs approved by the department under this subdivision, including
reasonable and prudent costs incurred to implement and promote the programs.
new text end

new text begin (d) The commission may approve, modify, or reject a proposal made by the department
or a utility for an incentive plan to encourage efficient fuel-switching programs approved
under this subdivision, applying the considerations established under section 216B.16,
subdivision 6c, paragraphs (b) and (c). The commission may approve a financial incentive
mechanism that is calculated based on the combined energy savings and net benefits that
the commission determines have been achieved by a program approved under this
subdivision, provided the commission determines that the financial incentive mechanism
is in the ratepayers' interest.
new text end

new text begin (e) A public utility is not eligible for a financial incentive for an efficient fuel-switching
program under this subdivision in any year in which the utility achieves energy savings
below one percent of gross annual retail energy sales, excluding savings achieved through
fuel-switching programs.
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. 20.

Minnesota Statutes 2020, section 216B.241, is amended by adding a subdivision
to read:

new text begin Subd. 13. new text end

new text begin Cost-effective load management programs. new text end

new text begin (a) A public utility may include
in the utility's plan required under subdivision 2 programs to implement load management
activities, or combinations of energy conservation improvements, fuel-switching
improvements, and load management activities. For each program the public utility must
provide a proposed budget, cost-effectiveness analysis, and estimated net energy and demand
savings.
new text end

new text begin (b) The commissioner may approve a proposed program if the commissioner determines
the program is cost-effective, considering the costs and benefits to ratepayers, the utility,
participants, and society.
new text end

new text begin (c) A public utility providing retail service to Minnesota customers may file rate schedules
with the commission that provide for annual cost recovery of reasonable and prudent costs
incurred to implement and promote cost-effective load management programs approved by
the department under this subdivision.
new text end

new text begin (d) In determining whether to approve, modify, or reject a proposal made by the
department or a public utility for an incentive plan to encourage investments in load
management programs, the commission shall consider whether the plan:
new text end

new text begin (1) is needed to increase the public utility's investment in cost-effective load management;
new text end

new text begin (2) is compatible with the interest of the public utility's ratepayers; and
new text end

new text begin (3) links the incentive to the public utility's performance in achieving cost-effective load
management.
new text end

new text begin (e) The commission may structure an incentive plan to encourage cost-effective load
management programs as an asset on which a public utility earns a rate of return at a level
the commission determines is reasonable and in the public interest.
new text end

new text begin (f) The commission may include the net benefits from a load management activity
integrated with an energy efficiency program approved under this section in the net benefits
of the energy efficiency program for purposes of a financial incentive program under section
216B.16, subdivision 6c, if the department determines the primary purpose of the load
management activity is energy efficiency.
new text end

new text begin (g) A public utility is not eligible for a financial incentive for a load management program
in any year in which the utility achieves energy savings below one percent of gross annual
retail energy sales, excluding savings achieved through load management programs.
new text end

new text begin (h) The commission may include net benefits from a particular load management activity
in an incentive plan under this subdivision or section 216B.16, subdivision 6c, but not both.
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. 21.

Minnesota Statutes 2020, section 216B.241, is amended by adding a subdivision
to read:

new text begin Subd. 14. new text end

new text begin Minnesota efficient technology accelerator. new text end

new text begin (a) A nonprofit organization
with extensive experience implementing energy efficiency programs and conducting
energy-efficient technology research in Minnesota may file a proposal with the commissioner
for a program to accelerate deployment and reduce the cost of emerging and innovative
efficient technologies and approaches and result in lower energy costs for Minnesota
ratepayers. The program must include strategic initiatives with technology manufacturers
to improve the efficiency and performance of products, and with equipment installers and
other key actors in the technology supply chain. The program's goals are to achieve
cost-effective energy savings for Minnesota utilities, provide bill savings to Minnesota
utility consumers, enhance employment opportunities in Minnesota, and avoid greenhouse
gas emissions.
new text end

new text begin (b) Prior to developing and filing a proposal, the nonprofit must submit to the
commissioner a notice of intent to file a proposal under this subdivision that describes the
nonprofit's eligibility with respect to the requirements of paragraph (a). The commissioner
shall review the notice of intent and issue a determination of eligibility within 30 days of
the date the notice of intent is filed.
new text end

new text begin (c) Upon receiving approval from the commissioner to file a proposal under this section,
a nonprofit organization must engage interested stakeholders in discussions regarding, at a
minimum, the following elements required of a program proposal under this subdivision:
new text end

new text begin (1) a proposed budget and operational guidelines for the accelerator;
new text end

new text begin (2) proposed methodologies to estimate, evaluate, and allocate energy savings and net
benefits from program activities. Energy savings and net benefits from program activities
must be allocated to participating utilities and must be considered when determining the
cost-effectiveness of energy savings achieved by the program and related incentives;
new text end

new text begin (3) a process to identify and select technologies that:
new text end

new text begin (i) address energy use in residential, commercial, and industrial buildings; and
new text end

new text begin (ii) benefit utility customers in proportion to the funds contributed to the program by
electric and natural gas utilities, respectively; and
new text end

new text begin (4) a process to identify and track performance metrics for each technology selected so
that progress toward achieving energy savings can be measured, including one or more
methods to evaluate cost-effectiveness.
new text end

new text begin (d) No earlier than 180 days from the date of the commissioner's eligibility determination
under paragraph (b), the nonprofit may file a program proposal under this subdivision. The
filing must address each of the elements listed in paragraph (c), clauses (1) to (4), and the
recommendations and concerns identified in the stakeholder engagement process required
under paragraph (c). Within 90 days of the filing of the proposal, after notice and comment,
and after the commissioner has considered the estimated program costs and benefits from
the perspectives of ratepayers, utilities, and society, the commissioner shall approve, modify,
or reject the proposal. An approved program may have a term extending up to five years,
and may be renewed by the commissioner one or more times for additional terms of up to
five years.
new text end

new text begin (e) Upon approval of a program under paragraph (d), each public utility with over 30,000
customers must participate in the program and contribute to the approved program budget
in proportion to the public utility's gross operating revenue from sales of gas or electric
service in Minnesota, excluding revenues from large customer facilities exempted under
subdivision 1a. A participating utility is not required to contribute more than the following
percentages of the utility's spending approved by the commission in the plan filed under
subdivision 2: (1) two percent in the program's initial two years; (2) 3.5 percent in the
program's third and fourth years; and (3) five percent each year thereafter. Other utilities
may elect to participate in an approved program.
new text end

new text begin (f) A participating utility may request the commissioner to adjust its approved annual
budget under subdivision 2, if necessary to meet approved energy savings goals under
subdivision 2. Other utilities may elect to participate in the accelerator program.
new text end

new text begin (g) Costs incurred by a public utility under this subdivision are recoverable under
subdivision 2b as an assessment to the energy and conservation account. Amounts provided
to the account under this subdivision are not subject to the cap on assessments in section
216B.62. The commissioner may make expenditures from the account for the purposes of
this subdivision, including amounts necessary to reimburse administrative costs incurred
by the department under this subdivision. Costs for research projects under this subdivision
that the commissioner determines may be duplicative to projects that would be eligible for
funding under subdivision 1e, paragraph (a), may be deducted from the assessment under
subdivision 1e for utilities participating in the accelerator.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective immediately upon enactment.
new text end

Sec. 22.

Minnesota Statutes 2020, section 216B.2412, subdivision 3, is amended to read:

Subd. 3.

Pilot programs.

The commission shall allow one or more rate-regulated utilities
to participate in a pilot program to assess the merits of a rate-decoupling strategy to promote
energy efficiency and conservation. Each pilot program must utilize the criteria and standards
established in subdivision 2 and be designed to determine whether a rate-decoupling strategy
achieves energy savings. On or before a date established by the commission, the commission
shall require electric and gas utilities that intend to implement a decoupling program to file
a decoupling pilot plan, which shall be approved or approved as modified by the commission.
A pilot program may not exceed three years in length. Any extension beyond three years
can only be approved in a general rate case, unless that decoupling program was previously
approved as part of a general rate case. deleted text begin The commission shall report on the programs annually
to the chairs of the house of representatives and senate committees with primary jurisdiction
over energy policy.
deleted 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. 23.

Minnesota Statutes 2020, section 216B.2422, is amended by adding a subdivision
to read:

new text begin Subd. 7a. new text end

new text begin Energy storage systems; installation. new text end

new text begin The commission shall, as part of an
order with respect to a public utility's integrated resource plan filed under this section,
require a public utility to install one or more energy storage systems, provided that the
commission finds the investments are reasonable, prudent, and in the public interest. In
determining the aggregate capacity of the energy storage systems ordered under this
subdivision, the commission must consider the public utility's assessment of energy storage
systems contained in the public utility's integrated resource plan, as required under
subdivision 7.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and
applies to any order issued to a public utility by the commission in an integrated resource
plan proceeding after July 1, 2021.
new text end

Sec. 24.

new text begin [216B.2427] 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" has
the meaning given in section 216B.2422, subdivision 1, paragraph (f).
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 one year following the commission's
order to a public utility in an integrated resource plan proceeding under section 216B.2422,
the public utility must submit an application to the commission for review and approval to
install one or more energy storage systems whose aggregate capacity meets or exceeds that
ordered by the commission in the public utility's most recent integrated resource plan
proceeding under section 216B.2422, subdivision 7a.
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 shall
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 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) a description of the public utility's electric system needs that the proposed energy
storage system address;
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 cost-effectiveness of the energy storage system;
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 the most recent integrated resource plan submitted under section
216B.2422 to meet expected demand with the least 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 the 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 shall review each proposal submitted
under this section and may approve, reject, or modify the proposal. The commission shall
approve a proposal the commission 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. 25.

Minnesota Statutes 2020, section 216C.05, subdivision 2, is amended to read:

Subd. 2.

Energy policy goals.

It is the energy policy of the state of Minnesota that:

(1) annual energy savings equal to at least 1.5 percent of annual retail energy sales of
electricity and natural gas deleted text begin bedeleted text end new text begin isnew text end achieved through cost-effective energy efficiency;

(2) the per capita use of fossil fuel as an energy input deleted text begin bedeleted text end new text begin isnew text end reduced by 15 percent by the
year 2015, through increased reliance on energy efficiency and renewable energy alternatives;

(3) 25 percent of the total energy used in deleted text begin the state bedeleted text end new text begin Minnesota isnew text end derived from renewable
energy resources by the year 2025; deleted text begin and
deleted text end

new text begin (4) statewide greenhouse gas emissions from energy use in existing commercial and
residential buildings is reduced by 50 percent by 2035 through: (i) continued use of the
most effective current energy-saving incentives programs, evaluated by participation and
efficacy; and (ii) development and implementation of new programs, prioritizing solutions
that achieve the highest overall carbon reduction; and
new text end

deleted text begin (4)deleted text end new text begin (5)new text end retail electricity rates for each customer class deleted text begin bedeleted text end new text begin arenew text end at least five percent below
the national average.

Sec. 26.

new text begin [216C.402] REBUILD RIGHT 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) "Cold climate air-source heat pump" means a mechanism that heats and cools indoor
air by transferring heat from outdoor or indoor air using a fan, a refrigerant-filled heat
exchanger, and an inverter-driven compressor that varies the pressure of the refrigerant to
warm or cool the refrigerant vapor.
new text end

new text begin (c) "Commercial building" means a building:
new text end

new text begin (1) with an occupant that is (i) engaged in wholesale or retail trade or the provision of
services, or (ii) a restaurant; or
new text end

new text begin (2) that contains four or more dwelling units.
new text end

new text begin (d) "Energy conservation" has the meaning given in section 216B.241, subdivision 1,
paragraph (e).
new text end

new text begin (e) "Energy efficiency" has the meaning given in section 216B.241, subdivision 1,
paragraph (f).
new text end

new text begin (f) "Energy storage system" has the meaning given in section 216B.2422, subdivision
1, paragraph (f).
new text end

new text begin (g) "Envelope" means the physical elements separating a building's interior and exterior.
new text end

new text begin (h) "Grantee" means a person awarded a grant by the commissioner under this section.
new text end

new text begin (i) "Ground-source heat pump" means an earth-coupled heating or cooling device
consisting of a sealed closed-loop piping system installed in the ground to transfer heat
between the surrounding earth and a building.
new text end

new text begin (j) "Institutional building" means a building with occupants that provide health care,
educational, or government services.
new text end

new text begin (k) "Preweatherization measure" means a general repair or measure that affects the health
or safety of residents of a dwelling unit and that is required under federal law in order for
weatherization services to be provided to the dwelling unit.
new text end

new text begin (l) "Qualified energy technology" means:
new text end

new text begin (1) a solar energy system;
new text end

new text begin (2) a measure installed in a building that results in energy efficiency or energy
conservation, excluding a natural gas furnace that does not function solely as a backup to
a primary heating system utilizing a ground-source heat pump or a cold climate air-source
heat pump; or
new text end

new text begin (3) an energy storage system.
new text end

new text begin (m) "Residential building" means a building containing one to three residential units.
new text end

new text begin (n) "Solar energy system" has the meaning given in section 216C.06, subdivision 17.
new text end

new text begin Subd. 2. new text end

new text begin Program establishment. new text end

new text begin A rebuild right grant program is established in the
Department of Commerce to award grants to incorporate qualified energy technologies as
part of the renovation or new construction of buildings damaged or destroyed by civil unrest
in May and June 2020.
new text end

new text begin Subd. 3. new text end

new text begin Application. new text end

new text begin (a) An application for a grant under this section must be made to
the commissioner on a form developed by the commissioner. The application must include:
new text end

new text begin (1) evidence substantiating the applicant's experience required under subdivision 4,
paragraph (b);
new text end

new text begin (2) information detailing how property owners are notified that financial assistance is
available;
new text end

new text begin (3) the geographic area within which an applicant proposes to target financial assistance;
new text end

new text begin (4) information detailing (i) how the applicant determines whether a proposed project
meets the applicable energy standards required under subdivision 5, and (ii) what
post-implementation methods are used to assess whether the standards have been met;
new text end

new text begin (5) information detailing how the applicant evaluates and ranks project proposals; and
new text end

new text begin (6) any other information required by the commissioner.
new text end

new text begin (b) The commissioner must develop administrative procedures and processes to review
applications and award grants under this section.
new text end

new text begin Subd. 4. new text end

new text begin Eligible applicants. new text end

new text begin (a) Multiple organizations, including political subdivisions
and nonprofit organizations, may jointly file a single application for a grant award under
this section.
new text end

new text begin (b) Applicants for a grant awarded under this section must have experience:
new text end

new text begin (1) analyzing the energy and economic impacts of installing qualified energy technologies
in buildings;
new text end

new text begin (2) working with contractors to implement projects that install qualified energy
technologies in buildings; and
new text end

new text begin (3) successfully working with small businesses, community groups, and residents of
neighborhoods where a preponderance of the total number of households are low-income
households.
new text end

new text begin Subd. 5. new text end

new text begin Eligible activities; energy standards. new text end

new text begin (a) Except as provided in paragraph (b),
a renovated or newly constructed commercial or institutional building awarded grant funds
under this section must meet, at a minimum, the current Sustainable Building 2030 energy
performance standards adopted under section 216B.241, subdivision 9.
new text end

new text begin (b) A renovated or newly constructed residential building or a commercial building
containing four or more dwelling units awarded grant funds under this section must meet,
at a minimum, the current energy performance standards for new residential construction
or renovations, as applicable, contained in the International Passive House Standard promoted
by the North American Passive House Network or the United States Department of Energy's
Zero Energy Ready Home.
new text end

new text begin Subd. 6. new text end

new text begin Eligible properties. new text end

new text begin A property is eligible to receive a grant awarded under
this section if the property: (1) was damaged or destroyed by civil unrest that occurred in
the state in May and June 2020; and (2) is being renovated or constructed to operate as a
residential, commercial, or institutional property.
new text end

new text begin Subd. 7. new text end

new text begin Eligible expenditures. new text end

new text begin An appropriation made to support activities under this
section may be used to:
new text end

new text begin (1) conduct outreach activities to:
new text end

new text begin (i) cities and business associations affected by the civil unrest that occurred in Minnesota
in May and June 2020;
new text end

new text begin (ii) persons listed in subdivision 8, clause (1), items (i) to (iv); and
new text end

new text begin (iii) potential building owners who may receive services under the program;
new text end

new text begin (2) purchase and install qualified energy technologies in buildings;
new text end

new text begin (3) pay the reasonable costs incurred by the department to administer this section; and
new text end

new text begin (4) compensate task force members under subdivision 12.
new text end

new text begin Subd. 8. new text end

new text begin Grant priorities. new text end

new text begin When awarding grants under this section, the commissioner
must give priority to applications that:
new text end

new text begin (1) commit to conduct aggressive outreach programs to provide assistance under this
section to eligible owners of buildings:
new text end

new text begin (i) located in census tracts in which 50 percent or more of households have household
incomes at or below 60 percent of the state median household income;
new text end

new text begin (ii) located in census tracts designated by the governor as Opportunity Zones under
United States Code, title 26, section 1400Z-1, et. seq.;
new text end

new text begin (iii) containing minority-owned businesses, as defined in section 116J.8737; or
new text end

new text begin (iv) containing women-owned businesses, as defined in section 116J.8737;
new text end

new text begin (2) commit to employ contractors that pay employees a wage comparable to, as
determined by the commissioner, the prevailing wage rate, as defined in section 177.42; or
new text end

new text begin (3) leverage additional funding to be used for the purposes of this section.
new text end

new text begin Subd. 9. new text end

new text begin Limits. new text end

new text begin Grant funds awarded under this section to support the renovation or
construction of building envelopes and energy systems in commercial or institutional
buildings may be used to pay the difference between (1) the cost to renovate or construct a
building's envelope or energy system to meet the current applicable energy code, and (2)
the cost to meet the standards required under subdivision 5. The commissioner must develop
a methodology to calculate the cost to renovate or construct a commercial or institutional
building's envelope and energy system to meet current applicable energy code standards,
which must be used by a grantee to determine the amount awarded to a building owner.
new text end

new text begin Subd. 10. new text end

new text begin Awards to building owners. new text end

new text begin A commercial or institutional building owner
seeking funding from a grant awarded under this section must submit an application to the
grantee that includes:
new text end

new text begin (1) evidence that the building is eligible to receive a grant under this section, including
documentation of damage done to the building;
new text end

new text begin (2) a description of the project, including cost estimates for major project elements;
new text end

new text begin (3) documentation that the measures funded result in the building meeting the applicable
energy standards of subdivision 5; and
new text end

new text begin (4) any other information required by a grantee.
new text end

new text begin Subd. 11. new text end

new text begin Grantee reports. new text end

new text begin Recipients of a grant awarded under this section must file
semiannual reports with the commissioner containing:
new text end

new text begin (1) a list of properties where grant funds have been expended, the amount of the
expenditures, and the nature of the energy efficiency measures and renewable energy systems
installed;
new text end

new text begin (2) estimated energy savings and greenhouse gas emissions reductions resulting from
expenditures made under this section compared with estimated levels of energy use and
greenhouse gas emissions associated with those properties in 2019; and
new text end

new text begin (3) any other information required by the commissioner.
new text end

new text begin Subd. 12. new text end

new text begin Advisory task force. new text end

new text begin (a) Within 60 days of the effective date of this act, the
commissioner must select and appoint eight members to a Rebuild Right Advisory Task
Force and must convene the initial meeting of the task force. The advisory task force must
include:
new text end

new text begin (1) one representative of the public utility subject to section 116C.779, subdivision 1;
new text end

new text begin (2) one representative of the Prairie Island Indian Community;
new text end

new text begin (3) one representative of organized labor;
new text end

new text begin (4) two representatives of organizations with expertise installing energy conservation
measures and renewable energy programs in buildings;
new text end

new text begin (5) one representative of organizations that advocate for energy policies addressing
low-income households; and
new text end

new text begin (6) two representatives of organizations representing businesses located in areas that
experienced extensive property damage from civil unrest in Minnesota in May and June
2020.
new text end

new text begin (b) Within 60 days of the effective date of this act, the state senators and state
representatives representing Minneapolis neighborhoods that suffered extensive property
damage from civil unrest in May and June 2020 must jointly appoint as task force members
two residents who live in the neighborhoods where the property damage occurred.
new text end

new text begin (c) Within 60 days of the effective date of this act, the state senators and state
representatives representing St. Paul neighborhoods that suffered extensive property damage
from civil unrest in May and June 2020 must jointly appoint as task force members two
residents who live in the neighborhoods where the property damage occurred.
new text end

new text begin (d) Members of the advisory task force appointed under paragraph (a), clauses (1) to
(3), are nonvoting members. All other members are voting members.
new text end

new text begin (e) The Department of Commerce must serve as staff and provide administrative support
to the advisory task force.
new text end

new text begin (f) The advisory task force must advise the commissioner throughout the development
of the request for proposal and grant award process, and may recommend funding priorities
in addition to those listed in subdivision 8. Within 60 days of the initial meeting, the advisory
task force must present recommendations to the commissioner regarding the content of the
request for proposal.
new text end

new text begin (g) An organization that is represented on the advisory task force must not be awarded
a grant under this section.
new text end

new text begin (h) Notwithstanding section 15.059, subdivision 6, advisory task force members may
be compensated as provided under section 15.059, subdivision 3.
new text end

new text begin (i) The advisory task force established under this subdivision expires two years after the
effective date of this act.
new text end

new text begin Subd. 13. new text end

new text begin Report. new text end

new text begin Beginning January 15, 2022, and continuing each January 15 through
2026, the commissioner must submit a report to the chairs and ranking minority members
of the senate and house of representatives committees with jurisdiction over energy policy.
The report must contain:
new text end

new text begin (1) a list of the grant awards made under this section;
new text end

new text begin (2) summaries of the grantee reports submitted under subdivision 10; and
new text end

new text begin (3) other information deemed relevant by the commissioner.
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. 27.

Minnesota Statutes 2020, section 326B.106, subdivision 1, is amended to read:

Subdivision 1.

Adoption of code.

(a) Subject to paragraphs (c) and (d) and sections
326B.101 to 326B.194, the commissioner shall by rule and in consultation with the
Construction Codes Advisory Council establish a code of standards for the construction,
reconstruction, alteration, and repair of buildings, governing matters of structural materials,
design and construction, fire protection, health, sanitation, and safety, including design and
construction standards regarding heat loss control, illumination, and climate control. The
code must also include duties and responsibilities for code administration, including
procedures for administrative action, penalties, and suspension and revocation of certification.
The code must conform insofar as practicable to model building codes generally accepted
and in use throughout the United States, including a code for building conservation. In the
preparation of the code, consideration must be given to the existing statewide specialty
codes presently in use in the state. Model codes with necessary modifications and statewide
specialty codes may be adopted by reference. The code must be based on the application
of scientific principles, approved tests, and professional judgment. To the extent possible,
the code must be adopted in terms of desired results instead of the means of achieving those
results, avoiding wherever possible the incorporation of specifications of particular methods
or materials. To that end the code must encourage the use of new methods and new materials.
Except as otherwise provided in sections 326B.101 to 326B.194, the commissioner shall
administer and enforce the provisions of those sections.

(b) The commissioner shall develop rules addressing the plan review fee assessed to
similar buildings without significant modifications including provisions for use of building
systems as specified in the industrial/modular program specified in section 326B.194.
Additional plan review fees associated with similar plans must be based on costs
commensurate with the direct and indirect costs of the service.

(c) Beginning with the 2018 edition of the model building codes and every six years
thereafter, the commissioner shall review the new model building codes and adopt the model
codes as amended for use in Minnesota, within two years of the published edition date. The
commissioner may adopt amendments to the building codes prior to the adoption of the
new building codes to advance construction methods, technology, or materials, or, where
necessary to protect the health, safety, and welfare of the public, or to improve the efficiency
or the use of a building.

(d) Notwithstanding paragraph (c), the commissioner shall act on each new model
residential energy code and the new model commercial energy code in accordance with
federal law for which the United States Department of Energy has issued an affirmative
determination in compliance with United States Code, title 42, section 6833. new text begin Beginning in
2022, the commissioner shall act on the new model commercial energy code by adopting
each new published edition of ASHRAE 90.1 or a more efficient standard, and amending
the standard as necessary to achieve a minimum of eight percent energy efficiency with
each edition, as measured against energy consumption by an average building in each
applicable building sector in 2003. These amendments must achieve a net zero energy
standard for new commercial buildings by 2036 and thereafter. new text end The commissioner may
adopt amendments prior to adoption of the new energy codes, as amended for use in
Minnesota, to advance construction methods, technology, or materials, or, where necessary
to protect the health, safety, and welfare of the public, or to improve the efficiency or use
of a building.

Sec. 28. new text begin SUPPLEMENTING WEATHERIZATION SERVICES.
new text end

new text begin (a) The state may implement preweatherization measures and qualified energy
technologies in dwelling units of low-income households that are: (1) receiving
weatherization services delivered under the federal Weatherization Assistance Program
authorized under United States Code, title 42, section 6861, et. seq.; and (2) located in
neighborhoods adjacent to areas that experienced property damage resulting from civil
unrest in May and June 2020, as determined by the commissioner of commerce.
new text end

new text begin (b) Minnesota Statutes, section 216C.264, subdivisions 1 to 3 and 6, apply to assistance
provided under this section.
new text end

new text begin (c) The commissioner of commerce may require the design heating load of a dwelling
unit receiving assistance under this section to be no more than 12 British Thermal Units per
hour per square foot after all preweatherization measures financed under this section,
qualified energy technologies financed under this section, and weatherization measures
provided under the federal weatherization program are implemented.
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. 29. new text begin TASK FORCE ON EXPANDING THE PROVISION OF
WEATHERIZATION SERVICES.
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) "Commissioner" means the commissioner of commerce.
new text end

new text begin (c) "Weatherization Assistance Program" means the federal program described in Code
of Federal Regulations, title 10, part 440 et. seq., designed to assist low-income households
to cost-effectively reduce energy use.
new text end

new text begin (d) "Weatherization service providers" means the network of contracted entities that
administer the Weatherization Assistance Program.
new text end

new text begin (e) "Weatherization assistance services" means the energy conservation measures installed
in households under the Weatherization Assistance Program.
new text end

new text begin Subd. 2. new text end

new text begin Establishment. new text end

new text begin A task force is established to explore ways to expand existing
funding sources and identify potential new funding sources in order to increase the number
of low-income Minnesota households served or the scope of services provided by the
Weatherization Assistance Program.
new text end

new text begin Subd. 3. new text end

new text begin Membership. new text end

new text begin (a) No later than August 1, 2021, the commissioner must appoint
members to the task force representing the following stakeholders:
new text end

new text begin (1) a statewide association representing Weatherization Assistance Program providers;
new text end

new text begin (2) individual Weatherization Assistance Program service providers;
new text end

new text begin (3) investor-owned utilities;
new text end

new text begin (4) electric cooperatives and municipal utilities;
new text end

new text begin (5) low-income energy advocates;
new text end

new text begin (6) Tribal nations; and
new text end

new text begin (7) delivered fuel dealers.
new text end

new text begin (b) Task force members serve without compensation.
new text end

new text begin (c) The commissioner must fill task force vacancies to maintain the representation
required under paragraph (a).
new text end

new text begin Subd. 4. new text end

new text begin Meetings; officers. new text end

new text begin (a) The commissioner must convene the first meeting of
the task force no later than August 15, 2021.
new text end

new text begin (b) At the first meeting, the task force must elect a chair and vice-chair from among the
task force's members and may elect other officers as necessary.
new text end

new text begin (c) The task force must meet according to a schedule determined by the task force and
may also meet at the call of the chair. The task force must meet as often as necessary to
accomplish the duties listed under subdivision 5.
new text end

new text begin (d) Task force meetings are subject to the open meeting provisions of Minnesota Statutes,
chapter 13D.
new text end

new text begin Subd. 5. new text end

new text begin Duties. new text end

new text begin The task force must:
new text end

new text begin (1) develop a strategy to reduce, each year, a targeted number of eligible households
denied weatherization services due to unaddressed health, environmental, or structural
hazards in the home;
new text end

new text begin (2) explore new sources of funding in order to increase the number of households
receiving weatherization assistance services;
new text end

new text begin (3) analyze existing program models in other states that offer services that complement
the Weatherization Assistance Program;
new text end

new text begin (4) analyze the current distribution of weatherization services across ethnic groups;
among different regions of Minnesota; in urban, suburban, and rural areas; and with respect
to other demographic factors in order to determine how to distribute weatherization services
more equitably throughout Minnesota;
new text end

new text begin (5) discuss how additional funding would impact the ability of weatherization assistance
service providers to provide weatherization assistance services to more eligible households;
new text end

new text begin (6) identify services that a supplemental funding program could provide to address
necessary repairs to homes that the federal Weatherization Assistance Program requires
before weatherization assistance is provided, but which cannot be funded with federal
Weatherization Assistance Program funds; and
new text end

new text begin (7) examine other related issues the task force deems relevant.
new text end

new text begin Subd. 6. new text end

new text begin Administrative support. new text end

new text begin The commissioner must provide administrative
support and physical or virtual meeting space needed to complete the task force's work.
new text end

new text begin Subd. 7. new text end

new text begin Report. new text end

new text begin No later than February 1, 2022, the task force must submit a report on
the task force's findings and recommendations to the chairs and ranking minority members
of the senate and house of representatives committees with jurisdiction over energy. The
report must include recommendations for legislation to supplement funding for the
Weatherization Assistance Program.
new text end

new text begin Subd. 8. new text end

new text begin Expiration. new text end

new text begin This section expires April 15, 2022.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 30. new text begin TRANSFER.
new text end

new text begin Notwithstanding Minnesota Statutes, section 116C.779, subdivision 1, paragraph (j),
$5,000,000 in fiscal year 2022 and $5,000,000 in fiscal year 2023 are transferred from the
renewable development account established under Minnesota Statutes, section 116C.779,
subdivision 1, to the commissioner of administration for deposit in the state building energy
conservation improvement account established in Minnesota Statutes, section 16B.86, to
provide loans to state agencies for energy conservation projects under Minnesota Statutes,
section 16B.87.
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. 31. new text begin APPROPRIATION.
new text end

new text begin Subdivision 1. new text end

new text begin State building energy conservation loan account. new text end

new text begin Notwithstanding
Minnesota Statutes, section 116C.779, subdivision 1, paragraph (j), $249,000 in fiscal year
2022 and $137,000 in fiscal year 2023 are appropriated from the renewable development
account to the commissioner of administration for software and administrative costs
associated with the state building energy conservation improvement revolving loan program
under Minnesota Statutes, section 16B.87. The base in fiscal years 2024 and 2025 is
$117,000.
new text end

new text begin Subd. 2. new text end

new text begin Building energy codes. new text end

new text begin $146,000 in fiscal year 2023 is appropriated from the
general fund to the commissioner of labor and industry to implement new commercial
energy codes, as described in Minnesota Statutes, section 326B.106, subdivision 1. This is
a onetime appropriation.
new text end

new text begin Subd. 3. new text end

new text begin Rebuild right grants. new text end

new text begin Notwithstanding Minnesota Statutes, section 116C.779,
subdivision 1, paragraph (j), $3,000,000 in fiscal year 2022 is appropriated from the
renewable development account established under Minnesota Statutes, section 116C.779,
subdivision 1, to the commissioner of commerce to award rebuild right grants to building
owners, as described in Minnesota Statutes, section 216C.402. This is a onetime
appropriation.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2021.
new text end

Sec. 32. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2020, section 216B.241, subdivisions 1, 1b, 2c, 4, and 10, new text end new text begin are
repealed.
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

ARTICLE 2

ENERGY TRANSITION

Section 1.

new text begin [116J.5491] ENERGY TRANSITION OFFICE.
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 sections 116J.5491 to 116J.5493, the
following terms have the meanings given.
new text end

new text begin (b) "Impacted facility" means an electric generating unit that is or was owned by a public
utility, as defined in section 216B.02, subdivision 4, and that:
new text end

new text begin (1) is currently operating and (i) is scheduled to cease operations, or (ii) whose cessation
of operations has been proposed in an integrated resource plan filed with the Public Utilities
Commission under section 216B.2422; or
new text end

new text begin (2) ceased operations or was removed from the local property tax base no earlier than
five years before the effective date of this section.
new text end

new text begin (c) "Impacted community" means a municipality, Tribal government, or county in which
an impacted facility is located.
new text end

new text begin (d) "Impacted worker" means a Minnesota resident:
new text end

new text begin (1) employed at an impacted facility and who is facing the loss of employment as a result
of the impacted facility's retirement; or
new text end

new text begin (2) employed by a company that, under contract, regularly performs construction,
maintenance, or repair work at an impacted facility, and who is facing the loss of employment
or of work opportunities as a result of the impacted facility's retirement.
new text end

new text begin Subd. 2. new text end

new text begin Office established; director. new text end

new text begin (a) The Energy Transition Office is established
in the Department of Employment and Economic Development.
new text end

new text begin (b) The director of the Energy Transition Office is appointed by the governor. The
director must be qualified by experience in issues related to energy, economic development,
and the environment.
new text end

new text begin (c) The office may employ staff necessary to carry out the duties required in this section.
new text end

new text begin Subd. 3. new text end

new text begin Purpose. new text end

new text begin The purpose of the office is to:
new text end

new text begin (1) address economic dislocations experienced by impacted workers after an impacted
facility is retired;
new text end

new text begin (2) implement recommendations of the Minnesota energy transition plan developed in
section 116J.5493;
new text end

new text begin (3) improve communication among local, state, federal, and private entities regarding
impacted facility retirement planning and implementation;
new text end

new text begin (4) address local tax and fiscal issues related to the impacted facility's retirement and
develop strategies to reduce economic dislocations of impacted communities and impacted
workers; and
new text end

new text begin (5) assist the establishment and implementation of economic support programs, including
but not limited to property tax revenue replacement, community energy transition programs,
and economic development tools, for impacted communities and impacted workers.
new text end

new text begin Subd. 4. new text end

new text begin Duties. new text end

new text begin The office is authorized to:
new text end

new text begin (1) administer programs to support impacted communities and impacted workers;
new text end

new text begin (2) coordinate resources at local, state, and federal levels to support impacted communities
and impacted workers that are subject to significant economic transition;
new text end

new text begin (3) coordinate the development of a statewide policy on impacted communities and
impacted workers;
new text end

new text begin (4) deliver programs and resources to impacted communities and impacted workers;
new text end

new text begin (5) support impacted workers by establishing benefits and educating impacted workers
on applying for benefits;
new text end

new text begin (6) act as a liaison among impacted communities, impacted workers, and state agencies;
new text end

new text begin (7) assist state agencies to (i) address local tax, land use, economic development, and
fiscal issues related to an impacted facility's retirement, and (ii) develop strategies to support
impacted communities and impacted workers;
new text end

new text begin (8) review existing programs supporting impacted workers and identify gaps that need
to be addressed;
new text end

new text begin (9) support the activities of the energy transition advisory committee members;
new text end

new text begin (10) monitor transition efforts in other states and localities;
new text end

new text begin (11) identify impacted facility closures and estimate job losses and the effect on impacted
communities and impacted workers;
new text end

new text begin (12) maintain communication regarding closure dates with all affected parties; and
new text end

new text begin (13) monitor and participate in administrative proceedings that affect the office's activities,
including matters before the Public Utilities Commission, the Department of Commerce,
the Department of Revenue, and other entities.
new text end

new text begin Subd. 5. new text end

new text begin Reporting. new text end

new text begin (a) Beginning January 15, 2023, and each year thereafter, the Energy
Transition Office must submit a written report to the chairs and ranking minority members
of the legislative committees with jurisdiction over energy, economic development, and tax
policy and finance on the office's activities during the previous year.
new text end

new text begin (b) The report must contain:
new text end

new text begin (1) a list of impacted facility closures, projected associated job losses, and the effect on
impacted communities and impacted workers;
new text end

new text begin (2) recommendations to support impacted communities and impacted workers;
new text end

new text begin (3) information on the administration of assistance programs administered by the office;
and
new text end

new text begin (4) updates on implementation of the Minnesota energy transition plan.
new text end

new text begin Subd. 6. new text end

new text begin Gifts; grants; donations. new text end

new text begin The office may accept gifts and grants on behalf of
the state that constitute donations to the state. Funds received under this subdivision are
appropriated to the commissioner of employment and economic development to support
the purposes of the office.
new text end

Sec. 2.

new text begin [116J.5492] ENERGY TRANSITION ADVISORY COMMITTEE.
new text end

new text begin Subdivision 1. new text end

new text begin Creation; purpose. new text end

new text begin The Energy Transition Advisory Committee is
established to develop a statewide energy transition plan and to advise the governor, the
commissioner, and the legislature on transition issues, established transition programs,
economic initiatives, and transition policy.
new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin (a) The advisory committee consists of 19 voting members and
six ex officio nonvoting members.
new text end

new text begin (b) The voting members of the advisory committee are appointed by the commissioner
of employment and economic development, except as specified below:
new text end

new text begin (1) two members of the senate, one appointed by the majority leader of the senate and
one appointed by the minority leader of the senate;
new text end

new text begin (2) two members of the house of representatives, one appointed by the speaker of the
house of representatives and one appointed by the minority leader of the house of
representatives;
new text end

new text begin (3) the commissioner of commerce, or the commissioner's designee;
new text end

new text begin (4) one representative of the Prairie Island Indian community;
new text end

new text begin (5) four representatives of impacted communities, of which two must represent counties
and two must represent municipalities, and, to the extent possible, of the impacted facilities
in those communities, at least one must be a coal plant, at least one must be a nuclear plant,
and at least one must be a natural gas plant;
new text end

new text begin (6) three representatives of impacted workers at impacted facilities;
new text end

new text begin (7) one representative of impacted workers employed by companies that, under contract,
regularly perform construction, maintenance, or repair work at an impacted facility;
new text end

new text begin (8) one representative with professional economic development or workforce retraining
experience;
new text end

new text begin (9) two representatives of utilities that operate an impacted facility;
new text end

new text begin (10) one representative from a nonprofit organization with expertise and experience
delivering energy efficiency and conservation programs; and
new text end

new text begin (11) one representative from the Coalition of Utility Cities.
new text end

new text begin (c) The ex officio nonvoting members of the advisory committee consist of:
new text end

new text begin (1) the governor or the governor's designee;
new text end

new text begin (2) the commissioner of employment and economic development or the commissioner's
designee;
new text end

new text begin (3) the commissioner of labor and industry or the commissioner's designee;
new text end

new text begin (4) the commissioner of revenue or the commissioner's designee;
new text end

new text begin (5) the executive secretary of the Public Utilities Commission or the secretary's designee;
and
new text end

new text begin (6) the commissioner of the Pollution Control Agency or the commissioner's designee.
new text end

new text begin Subd. 3. new text end

new text begin Initial appointments and first meeting. new text end

new text begin The appointing authorities must
appoint the members of the advisory committee by August 1, 2021. The commissioner of
employment and economic development must convene the first meeting by September 1,
2021, and must act as chair until the advisory committee elects a chair at the first meeting.
new text end

new text begin Subd. 4. new text end

new text begin Officers. new text end

new text begin The committee must elect a chair and vice-chair from among the
voting members for terms of two years.
new text end

new text begin Subd. 5. new text end

new text begin Open meetings. new text end

new text begin Advisory committee meetings are subject to chapter 13D.
new text end

new text begin Subd. 6. new text end

new text begin Conflict of interest. new text end

new text begin An advisory committee member is prohibited from
discussing or voting on issues relating to an organization in which the member has either a
direct or indirect financial interest.
new text end

new text begin Subd. 7. new text end

new text begin Gifts; grants; donations. new text end

new text begin The advisory committee may accept gifts and grants
on behalf of the state and that constitute donations to the state. Funds received under this
subdivision are appropriated to the commissioner of employment and economic development
to support the activities of the advisory committee.
new text end

new text begin Subd. 8. new text end

new text begin Meetings. new text end

new text begin The advisory committee must meet monthly until the energy transition
plan is submitted to the governor and the legislature. The chair may call additional meetings
as necessary.
new text end

new text begin Subd. 9. new text end

new text begin Staff. new text end

new text begin The Department of Employment and Economic Development shall serve
as staff for the advisory committee.
new text end

new text begin Subd. 10. new text end

new text begin Expiration. new text end

new text begin This section expires the day after the Minnesota energy transition
plan required under section 116J.5493 is submitted to the legislature and the governor.
new text end

Sec. 3.

new text begin [116J.5493] MINNESOTA ENERGY TRANSITION PLAN.
new text end

new text begin (a) By July 1, 2022, the Energy Transition Advisory Committee established in section
116J.5492 must submit a statewide energy transition plan to the governor and the chairs
and ranking minority members of the legislative committees having jurisdiction over
economic development and energy.
new text end

new text begin (b) The energy transition plan must, at a minimum, for each impacted facility:
new text end

new text begin (1) identify the timing and location of impacted facility retirements and projected job
losses in communities;
new text end

new text begin (2) analyze the estimated fiscal impact of impacted facility retirements on local
governments;
new text end

new text begin (3) describe the statutes and administrative processes that govern how retired utility
property impacts a local government tax base;
new text end

new text begin (4) review existing state programs that might support impacted communities and impacted
workers, and a projection of how effective or ineffective the programs might be in responding
to the effects of impacted facility retirements; and
new text end

new text begin (5) recommend how to effectively respond to the economic effects of impacted facility
retirements.
new text end

Sec. 4.

new text begin [116J.5501] MINNESOTA INNOVATION FINANCE AUTHORITY.
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) "Authority" means the Minnesota Innovation Finance Authority.
new text end

new text begin (c) "Clean energy project" has the meaning given to qualified project in paragraph (j),
clauses (1) to (4).
new text end

new text begin (d) "Credit enhancement" means a pool of capital set aside to cover potential losses on
loans made by private lenders, including but not limited to loan loss reserves and loan
guarantees.
new text end

new text begin (e) "Energy storage system" has the meaning given in section 216B.2422, subdivision
1, paragraph (f).
new text end

new text begin (f) "Fuel cell" means a cell that converts the chemical energy of hydrogen directly into
electricity through electrochemical reactions.
new text end

new text begin (g) "Greenhouse gas emissions" has the meaning given to statewide greenhouse gas
emissions in section 216H.01, subdivision 2.
new text end

new text begin (h) "Loan loss reserve" means a pool of capital set aside to reimburse a private lender
if a customer defaults on a loan, up to an agreed upon percentage of loans originated by the
private lender.
new text end

new text begin (i) "Microgrid system" means an electrical grid that serves a discrete geographical area
from distributed energy resources and can operate independently from the central electric
grid on a temporary basis.
new text end

new text begin (j) "Qualified project" means:
new text end

new text begin (1) a project, technology, product, service, or measure that:
new text end

new text begin (i) reduces energy use while providing the same level and quality of service or output
obtained before the application of the project;
new text end

new text begin (ii) shifts the use of electricity by retail customers in response to changes in the price of
electricity that vary over time, or other incentives designed to shift electricity demand from
times when market prices are high or when system reliability is jeopardized; or
new text end

new text begin (iii) significantly reduces greenhouse gas emissions relative to greenhouse gas emissions
produced before implementing the project, excluding projects that generate power from the
combustion of fossil fuels;
new text end

new text begin (2) the development, construction, deployment, alteration, or repair of any:
new text end

new text begin (i) project, technology, product, service, or measure that generates electric power from
renewable energy; or
new text end

new text begin (ii) distributed generation system, energy storage system, smart grid technology, microgrid
system, fuel cell system, or combined heat and power system;
new text end

new text begin (3) the installation, construction, or use of end-use electric technology that replaces
existing fossil fuel-based technology;
new text end

new text begin (4) a project, technology, product, service, or measure that supports the development
and deployment of electric vehicle charging stations and associated infrastructure;
new text end

new text begin (5) agriculture projects that reduce net greenhouse gas emissions or improve climate
resiliency, including but not limited to reforestation, afforestation, forestry management,
and regenerative agriculture;
new text end

new text begin (6) the construction or enhancement of infrastructure that is planned, designed, and
operated in a manner that anticipates, prepares for, and adapts to current and projected
changing climate conditions so that the infrastructure withstands, responds to, and more
readily recovers from disruptions caused by the current and projected changing climate
conditions; and
new text end

new text begin (7) the development, construction, deployment, alteration, or repair of any project,
technology, product, service, or measure that:
new text end

new text begin (i) reduces water use while providing the same or better level and quality of service or
output that was obtained before implementing the water-saving approach; or
new text end

new text begin (ii) protects, restores, or preserves the quality of groundwater and surface waters,
including but not limited to actions that further the purposes of the Clean Water Legacy
Act, as provided in section 114D.10, subdivision 1.
new text end

new text begin (k) "Regenerative agriculture" means the deployment of farming methods that reduce
agriculture's contribution to climate change by increasing the soil's ability to absorb
atmospheric carbon and convert the atmospheric carbon to soil carbon.
new text end

new text begin (l) "Renewable energy" means energy generated from the following sources:
new text end

new text begin (1) solar;
new text end

new text begin (2) wind;
new text end

new text begin (3) geothermal;
new text end

new text begin (4) hydro;
new text end

new text begin (5) trees or other vegetation;
new text end

new text begin (6) anaerobic digestion of organic waste streams; and
new text end

new text begin (7) fuel cells using energy sources listed in this paragraph.
new text end

new text begin (m) "Smart grid" means a digital technology that allows for two-way communication
between a utility and the utility's customers that enables the utility to control power flow
and load in real time.
new text end

new text begin (n) "Task force" means the task force of the Minnesota Innovation Finance Authority.
new text end

new text begin Subd. 2. new text end

new text begin Establishment; purpose. new text end

new text begin (a) By October 15, 2021, the Minnesota Innovation
Finance Authority Task Force established in this section must establish the Minnesota
Innovation Finance Authority as a nonprofit corporation under chapter 317A and must seek
designation as a charitable tax-exempt organization under section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
new text end

new text begin (b) When incorporated, the authority's purpose is to accelerate the deployment of clean
energy and other qualified projects by reducing the upfront and total cost of adoption, which
the authority achieves by leveraging existing public sources and additional private sources
of capital through the strategic deployment of public funds in the form of loans, credit
enhancements, and other financing mechanisms. The initial directors of the nonprofit
corporation must include at least a majority of the members of the task force and must
include, as nonvoting ex officio members, the commissioner of commerce or the
commissioner's designee and the commissioner of employment and economic development
or the commissioner's designee. The task force must engage independent legal counsel with
relevant experience in nonprofit corporation law and clean energy financing.
new text end

new text begin (c) The Minnesota Innovation Finance Authority must:
new text end

new text begin (1) identify underserved markets for qualified projects in Minnesota, develop programs
to overcome market impediments, and provide access to financing to serve the projects and
underserved markets;
new text end

new text begin (2) strategically use authority funds to leverage private investment in qualified projects,
achieving a high ratio of private to public funds invested through funding mechanisms that
support, enhance, and complement private investment;
new text end

new text begin (3) coordinate with existing government- and utility-based programs to make the most
efficient use of the authority's funds, ensure that financing terms and conditions offered are
well-suited to qualified projects, and ensure the authority's activities add to and complement
the efforts of these partners;
new text end

new text begin (4) stimulate demand for qualified projects by serving as a single point of access for a
customer to obtain technical information on energy conservation and renewable energy
measures, for contractors who install energy conservation and renewable energy measures,
and for financing to reduce the upfront and total costs to borrowers, including through:
new text end

new text begin (i) serving as a clearinghouse for information about federal, state, and utility financial
assistance for qualifying projects in targeted underserved markets, including coordinating
efforts with the energy conservation programs administered by the customer's utility under
section 216B.241 and other programs offered to low-income households;
new text end

new text begin (ii) forming partnerships with contractors and educating contractors regarding the
authority's financing programs;
new text end

new text begin (iii) coordinating multiple contractors on projects that install multiple qualifying
technologies; and
new text end

new text begin (iv) developing innovative marketing strategies to stimulate project owner interest in
targeted underserved markets;
new text end

new text begin (5) develop rules, policies, and procedures specifying borrower eligibility and other
terms and conditions of financial support offered by the authority;
new text end

new text begin (6) develop consumer protection standards governing the authority's investments to
ensure the authority and partners provide financial support in a responsible and transparent
manner that is in the financial interest of participating project owners;
new text end

new text begin (7) develop and administer policies to collect reasonable fees for authority services that
are sufficient to support ongoing authority activities;
new text end

new text begin (8) develop and adopt a workplan to accomplish all of the activities required of the
authority, and update the workplan on an annual basis; and
new text end

new text begin (9) establish and maintain a comprehensive website providing access to all authority
programs and financial products, including rates, terms, and conditions of all financing
support programs, unless disclosure of the information constitutes a trade secret or
confidential commercial or financial information.
new text end

new text begin Subd. 3. new text end

new text begin Additional authorized activities. new text end

new text begin The authority is authorized to:
new text end

new text begin (1) engage in any activities of a Minnesota nonprofit corporation operating under chapter
317A;
new text end

new text begin (2) develop and employ the following financing methods to support qualified projects:
new text end

new text begin (i) credit enhancement mechanisms that reduce financial risk for private lenders by
providing assurance that a limited portion of a loan is assumed by the authority by means
of a loan loss reserve, loan guarantee, or other mechanism;
new text end

new text begin (ii) co-investment, in which the authority invests directly in a clean energy project
through the provision of senior or subordinated debt, equity, or other mechanisms in
conjunction with a private financier's investment; and
new text end

new text begin (iii) serve as an aggregator of many small and geographically dispersed qualified projects,
in which the authority may provide direct lending, investment, or other financial support in
order to diversify risk;
new text end

new text begin (3) serve as the designated state entity to apply for and accept federal funds authorized
by Congress under a federal climate bank, federal green bank, or other similar entity, provided
that the commissioner of commerce authorizes the application; and
new text end

new text begin (4) seek to qualify as a Community Development Financial Institution under United
States Code, title 12, section 4702, in which case the authority must be treated as a qualified
community development entity for the purposes of sections 45D and 1400(m) of the Internal
Revenue Code.
new text end

new text begin Subd. 4. new text end

new text begin Task force; membership. new text end

new text begin (a) The task force of the Minnesota Innovation
Finance Authority is established and consists of nine members as follows:
new text end

new text begin (1) the commissioner of commerce or the commissioner's designee, as a nonvoting ex
officio member;
new text end

new text begin (2) the commissioner of employment and economic development or the commissioner's
designee, as a nonvoting ex officio member;
new text end

new text begin (3) three additional members appointed by the governor;
new text end

new text begin (4) two additional members appointed by the speaker of the house of representatives;
and
new text end

new text begin (5) two additional members appointed by the president of the senate.
new text end

new text begin (b) The members appointed to the task force under paragraph (a), clauses (3) to (5), must
have expertise in matters relating to energy conservation, clean energy, economic
development, banking, law, finance, or other matters relevant to the work of the task force.
When appointing a member to the task force, consideration must be given to whether the
task force members collectively reflect the geographical and ethnic diversity of Minnesota.
new text end

new text begin (c) Task force members must be appointed by August 15, 2021.
new text end

new text begin (d) The task force expires when the authority is established as a nonprofit corporation
under chapter 317A.
new text end

new text begin Subd. 5. new text end

new text begin Report. new text end

new text begin By June 30, 2022, and by June 30 each year thereafter, the authority
must submit a comprehensive annual report on the authority's activities to the governor and
to the chairs and ranking minority members of the legislative committees with primary
jurisdiction over energy policy. The report must contain, at a minimum, information on:
new text end

new text begin (1) the amount of authority capital invested, by project type;
new text end

new text begin (2) the amount of private capital leveraged as a result of authority investments, by project
type;
new text end

new text begin (3) the number of qualified projects supported, by project type, and the location of the
projects within Minnesota;
new text end

new text begin (4) the estimated number of jobs created and tax revenue generated as a result of the
authority's activities;
new text end

new text begin (5) the number of clean energy projects financed in low- and moderate-income
households; and
new text end

new text begin (6) the authority's financial statements.
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 2020, section 216B.16, subdivision 6, is amended to read:

Subd. 6.

Factors considered, generally.

The commission, in the exercise of its powers
under this chapter to determine just and reasonable rates for public utilities, shall give due
consideration to the public need for adequate, efficient, and reasonable service and to the
need of the public utility for revenue sufficient to enable it to meet the cost of furnishing
the service, including adequate provision for depreciation of its utility property used and
useful in rendering service to the public, and to earn a fair and reasonable return upon the
investment in such property. In determining the rate base upon which the utility is to be
allowed to earn a fair rate of return, the commission shall give due consideration to evidence
of the cost of the property when first devoted to public use, to prudent acquisition cost to
the public utility less appropriate depreciation on each, to construction work in progress, to
offsets in the nature of capital provided by sources other than the investors, and to other
expenses of a capital nature. For purposes of determining rate base, the commission shall
consider the original cost of utility property included in the base and shall make no allowance
for its estimated current replacement value. If the commission orders a generating facility
to terminate its operations before the end of the facility's physical life in order to comply
with a specific state or federal energy deleted text begin statute ordeleted text end policy, the commission may allow the public
utility to recover any positive net book value of the facility as determined by the commission.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2020, 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 thenew text begin reasonablenew text end expenses incurrednew text begin (1)new text end for economic
and community developmentnew text begin , and (2) to employ local workers to construct and maintain
generation facilities that supply power to the utility's customersnew text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2021, and applies to dockets
initiated at the Public Utilities Commission on or after that date.
new text end

Sec. 7.

Minnesota Statutes 2020, 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, deleted text begin anddeleted text end to satisfy the renewable
new text begin and solarnew text end energy deleted text begin objectives anddeleted text end standards set forth in section 216B.1691, new text begin and to provide
additional clean energy resources beyond the proportions required by the mandates and
standards,new text end including reasonable investments and expendituresnew 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2021, and applies to dockets
initiated at the Public Utilities Commission on or after that date.
new text end

Sec. 8.

Minnesota Statutes 2020, 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 anddeleted text end new text begin ,new text end expenditures made pursuant to section
116C.779 deleted text begin shall bedeleted text end new text begin , and the expenses incurred to employ local workers to construct and
maintain generation facilities that supply power to the utility's customers arenew text end recoverable
from the ratepayers of the utilitydeleted text begin ,deleted text end to the extent deleted text begin theydeleted text end new text begin the expenses or expendituresnew text end are not
offset by utility revenues attributable to the contracts, investments, or expendituresnew text begin , and if
the expenses or expenditures are deemed reasonable by the commissionnew text end . 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2021, and applies to dockets
initiated at the Public Utilities Commission on or after that date.
new text end

Sec. 9.

Minnesota Statutes 2020, 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) hydrogendeleted text begin , provided that after January 1, 2010, the hydrogen must bedeleted text end 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; andnew text begin , except as provided in subdivision 1a,new text end 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 (e) "Area of concern for environmental justice" means an area in Minnesota that meets
one or more of the following conditions:
new text end

new text begin (1) 50 percent or more of the population is nonwhite, based on the most recent data
published by the United States Census Bureau;
new text end

new text begin (2) 40 percent or more of the households have an income at or below 185 percent of the
federal poverty level, based on the most recent data published by the United States Census
Bureau; or
new text end

new text begin (3) is within Indian country, as defined in United State Code, title 18, section 1151.
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. 10.

Minnesota Statutes 2020, section 216B.1691, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Exception; solid waste incinerators. new text end

new text begin (a) 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 is not an eligible energy technology, as defined in
subdivision 1, if:
new text end

new text begin (1) air pollutants emitted by the facility are deposited in an environmental justice area;
and
new text end

new text begin (2) the facility has a permitted maximum capacity of 1,000 tons per day or more.
new text end

new text begin (b) For the purposes of this subdivision, "environmental justice area" has the meaning
given to area of concern for environmental justice under subdivision 1, paragraph (e).
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 2020, section 216B.1691, subdivision 2a, is amended to read:

Subd. 2a.

Eligible energy technology standard.

deleted text begin (a) Except as provided in paragraph
(b),deleted text end Each electric utility shall generate or procure sufficient electricity generated by an
eligible energy technology to provide its retail customers in Minnesota, or the retail customers
of a distribution utility to which the electric utility provides wholesale electric service, so
that at least the following standard percentages of the electric utility's total retail electric
sales to retail customers in Minnesota are generated by eligible energy technologies by the
end of the year indicated:

(1)	2012	12 percent
(2)	2016	17 percent
(3)	2020	20 percent
(4)	2025	deleted text begin 25deleted text end new text begin 40new text end percentdeleted text begin . deleted text end
new text begin (5) new text end	new text begin 2035 new text end	new text begin 55 percent. new text end

deleted text begin (b) An electric utility that owned a nuclear generating facility as of January 1, 2007,
must meet the requirements of this paragraph rather than paragraph (a). An electric utility
subject to this paragraph must generate or procure sufficient electricity generated by an
eligible energy technology to provide its retail customers in Minnesota or the retail customer
of a distribution utility to which the electric utility provides wholesale electric service so
that at least the following percentages of the electric utility's total retail electric sales to
retail customers in Minnesota are generated by eligible energy technologies by the end of
the year indicated:
deleted text end

deleted text begin (1) deleted text end	deleted text begin 2010 deleted text end	deleted text begin 15 percent deleted text end
deleted text begin (2) deleted text end	deleted text begin 2012 deleted text end	deleted text begin 18 percent deleted text end
deleted text begin (3) deleted text end	deleted text begin 2016 deleted text end	deleted text begin 25 percent deleted text end
deleted text begin (4) deleted text end	deleted text begin 2020 deleted text end	deleted text begin 30 percent. deleted text end

deleted text begin Of the 30 percent in 2020, at least 25 percent must be generated by solar energy or wind
energy conversion systems and the remaining five percent by other eligible energy
technology. Of the 25 percent that must be generated by wind or solar, no more than one
percent may be solar generated and the remaining 24 percent or greater must be wind
generated.
deleted 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. 12.

Minnesota Statutes 2020, 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 obligationnew text begin under subdivision 2a, 2f, or 2gnew text end , 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;

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

deleted text begin (2)deleted 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; deleted text begin and
deleted text end

deleted text begin (7)deleted text end new text begin (8)new text end other statutory obligations imposed on the commission or a utilitynew text begin ; and
new text end

new text begin (9) impacts on areas of concern for environmental justicenew text end .

The commission may modify or delay implementation of a standard obligation under
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, or raises significant technical issues.
The commission may modify or delay implementation of a standard obligation under 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 (b) When evaluating transmission capacity constraints under paragraph (a), clause (7),
the commission must consider whether the utility has:
new text end

new text begin (1) undertaken reasonable measures under the utility's control and consistent with the
utility's obligations under local, state, and federal laws and regulations, and the utility's
obligations as a member of a regional transmission organization or 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) 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 (c)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 (d)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 deleted text begin thatdeleted text end new text begin
in whichnew text end it deleted text begin is requestingdeleted text end new text begin requestsnew text end 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. 13.

Minnesota Statutes 2020, section 216B.1691, subdivision 2d, is amended to read:

Subd. 2d.

Commission order.

The commission shall issue necessary orders detailing
the criteria and standards deleted text begin by which it willdeleted text end new text begin used tonew text end measure an electric utility's efforts to meet
the renewable energy deleted text begin objectives of subdivision 2deleted text end new text begin standards under subdivisions 2a, 2f, and
2g, andnew text end to determine whether the utility is deleted text begin making the required good faith effortdeleted text end new text begin achieving
the standardsnew text end . In this order, the commission shall include criteria and standards that protect
against undesirable impacts on the reliability of the utility's system and economic impacts
on the utility's ratepayers and that consider technical feasibility.

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.

Minnesota Statutes 2020, section 216B.1691, subdivision 2e, is amended to read:

Subd. 2e.

Rate impact of standard compliance; report.

Each electric utility must
submit to the commission and the legislative committees with primary jurisdiction over
energy policy a report containing an estimation of the rate impact of activities of the electric
utility necessary to comply with this section. In consultation with the Department of
Commerce, the commission shall determine a uniform reporting system to ensure that
individual utility reports are consistent and comparable, and shall, by order, require each
electric utility subject to this section to use that reporting system. The rate impact estimate
must be for wholesale rates and, if the electric utility makes retail sales, the estimate shall
also be for the impact on the electric utility's retail rates. Those activities include, without
limitation, energy purchases, generation facility acquisition and construction, and
transmission improvements. deleted text begin An initial report must be submitted within 150 days of May
28, 2011. After the initial report,deleted text end A report must be updated and submitted as part of each
integrated resource plan or plan modification filed by the electric utility under section
216B.2422. The reporting obligation of an electric utility under this subdivision expires
December 31, deleted text begin 2025, for an electric utility subject to subdivision 2a, paragraph (a), and
December 31, 2020, for an electric utility subject to subdivision 2a, paragraph (b)deleted text end new text begin 2040new 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.

Minnesota Statutes 2020, section 216B.1691, subdivision 2f, is amended to read:

Subd. 2f.

Solar energy standard.

(a) In addition to the requirements of subdivisions 2a
and deleted text begin 2bdeleted text end new text begin 2gnew text end , each public utility shall generate or procure sufficient electricity generated by
solar energy to serve its retail electricity customers in Minnesota so that by the end of 2020,
at least 1.5 percent of the utility's total retail electric sales to retail customers in Minnesota
is generated by solar energy.

(b) For a public utility with more than 200,000 retail electric customers, at least ten
percent of the 1.5 percent goal must be met by solar energy generated by or procured from
solar photovoltaic devices with a nameplate capacity of 40 kilowatts or less.

(1) must meet at least ten percent of the 1.5 percent goal with solar energy generated by
or procured from solar photovoltaic devices with a nameplate capacity of 40 kilowatts or
less; and

(2) may apply toward the ten percent goal in clause (1) individual customer subscriptions
of 40 kilowatts or less to a community solar garden program operated by the public utility
that has been approved by the commission.

(d) The solar energy standard established in this subdivision is subject to all the provisions
of this section governing a utility's standard obligation under subdivision 2a.

(e) It is an energy goal of the state of Minnesota that, by 2030, ten percent of the retail
electric sales in Minnesota be generated by solar energy.

(f) For the purposes of calculating the total retail electric sales of a public utility under
this subdivision, there shall be excluded retail electric sales to customers that are:

(1) an iron mining extraction and processing facility, including a scram mining facility
as defined in Minnesota Rules, part 6130.0100, subpart 16; or

(2) a paper mill, wood products manufacturer, sawmill, or oriented strand board
manufacturer.

Those customers may not have included in the rates charged to them by the public utility
any costs of satisfying the solar standard specified by this subdivision.

(g) A public utility may not use energy used to satisfy the solar energy standard under
this subdivision to satisfy its standard obligation under subdivision 2a. A public utility may
not use energy used to satisfy the standard obligation under subdivision 2a to satisfy the
solar standard under this subdivision.

(h) Notwithstanding any law to the contrary, a solar renewable energy credit associated
with a solar photovoltaic device installed and generating electricity in Minnesota after
August 1, 2013, but before 2020 may be used to meet the solar energy standard established
under this subdivision.

deleted text begin (i) Beginning July 1, 2014, and each July 1 through 2020, each public utility shall file
a report with the commission reporting its progress in achieving the solar energy standard
established under this subdivision.
deleted 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. 16.

Minnesota Statutes 2020, 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 In addition to the requirements under subdivisions
2a and 2f, each electric utility must generate or procure sufficient electricity generated from
a carbon-free energy technology to provide the utility's retail customers in Minnesota, or
the retail customers of a distribution utility to which the electric utility provides wholesale
electric service, so that at least the following standard percentages of the electric utility's
total retail electric sales to retail customers in Minnesota are generated from carbon-free
energy technologies by the end of the year indicated:
new text end

new text begin (1) new text end	new text begin 2025 new text end	new text begin 65 percent new text end
new text begin (2) new text end	new text begin 2030 new text end	new text begin 80 percent new text end
new text begin (3) new text end	new text begin 2035 new text end	new text begin 90 percent new text end
new text begin (4) new text end	new text begin 2040 new text end	new text begin 100 percent. 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. 17.

Minnesota Statutes 2020, section 216B.1691, subdivision 3, is amended to read:

Subd. 3.

Utility plans filed with commission.

(a) Each electric utility shall report on
its plans, activities, and progress with regard to the deleted text begin objectives and standards ofdeleted text end new text begin standard
obligations undernew text end this section in its filings under section 216B.2422 or in a separate report
submitted to the commission every two years, whichever is more frequent, demonstrating
to the commission the utility's effort to comply with this section. In its resource plan or a
separate report, each electric utility shall provide a description of:

(1) the status of the utility's renewable energy mix relative to the deleted text begin objective and standardsdeleted text end new text begin
standard obligationsnew text end ;

(2) efforts taken to meet the deleted text begin objective and standardsdeleted text end new text begin standard obligationsnew text end ;

(3) any obstacles encountered or anticipated in meeting the deleted text begin objective or standards; anddeleted text end new text begin
standard obligations;
new text end

(4) potential solutions to the obstaclesdeleted text begin .deleted text end new text begin ;
new text end

new text begin (5) the number of Minnesotans employed to construct facilities designed to meet the
utility's standard obligations under this section;
new text end

new text begin (6) efforts taken to retain and retrain workers employed at electric generating facilities
that the utility has ceased operating or designated to cease operating for new positions
constructing or operating facilities to meet a utility's standard obligation;
new text end

new text begin (7) impacts of facilities designed to meet the utility's standard obligations under this
section on areas of concern for environmental justice; and
new text end

new text begin (8) efforts to increase the diversity of both its workforce and vendors.
new text end

(b) The commissioner shall compile the information provided to the commission under
paragraph (a), and report to the chairs of the house of representatives and senate committees
with jurisdiction over energy and environment policy issues as to the progress of utilities
in the state, including the progress of each individual electric utility, in increasing the amount
of renewable energy provided to retail customers, with any recommendations for regulatory
or legislative action, by January 15 of each odd-numbered year.

new text begin EFFECTIVE DATE. new text end

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

Sec. 18.

Minnesota Statutes 2020, section 216B.1691, subdivision 4, is amended to read:

Subd. 4.

Renewable energy credits.

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

(b) In lieu of generating or procuring energy directly to satisfy deleted text begin the eligible energy
technology objective ordeleted text end new text begin anew text end standard deleted text begin ofdeleted text end new text begin obligation undernew text end this section, an electric utility may
utilize renewable energy credits allowed under the program to satisfy the deleted text begin objective ordeleted text end
standard.

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

deleted text begin (e) An electric utility subject to subdivision 2a, paragraph (b), may not sell renewable
energy credits to an electric utility subject to subdivision 2a, paragraph (a), until 2021.
deleted 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. 19.

Minnesota Statutes 2020, section 216B.1691, subdivision 5, is amended to read:

Subd. 5.

Technology based on fuel combustion.

(a) Electricity produced by fuel
combustion through fuel blending or co-firing under paragraph (b) may only count toward
a utility's deleted text begin objectives or standardsdeleted text end new text begin standard obligationnew text end if the generation facility:

(1) was constructed in compliance with new source performance standards promulgated
under the federal Clean Air Act, United States Code, title 42, section 7401 et seq., for a
generation facility of that type; or

(2) employs the maximum achievable or best available control technology available for
a generation facility of that type.

(b) An eligible energy technology may blend or co-fire a fuel listed in subdivision 1,
paragraph (a), clause (5), with other fuels in the generation facility, but only the percentage
of electricity that is attributable to a fuel listed in that clause can be counted toward an
electric utility's deleted text begin renewable energy objectivesdeleted text end new text begin standard obligationnew 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. 20.

Minnesota Statutes 2020, section 216B.1691, subdivision 7, is amended to read:

Subd. 7.

Compliance.

The commission must regularly investigate whether an electric
utility is in compliance with its deleted text begin good faith objective under subdivision 2 anddeleted text end standard
obligation under deleted text begin subdivisiondeleted text end new text begin subdivisionsnew text end 2anew text begin , 2f, and 2gnew text end . If the commission finds
noncompliance, it may order the electric utility to construct facilities, purchase energy
generated by eligible energy technology, purchase renewable energy credits, or engage in
other activities to achieve compliance. If an electric utility fails to comply with an order
under this subdivision, the commission may impose a financial penalty on the electric utility
in an amount not to exceed the estimated cost of the electric utility to achieve compliance.
The penalty may not exceed the lesser of the cost of constructing facilities or purchasing
credits. The commission must deposit financial penalties imposed under this subdivision
in the energy and conservation account established in the special revenue fund under section
216B.241, subdivision 2a. This subdivision is in addition to and does not limit any other
authority of the commission to enforce 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. 21.

Minnesota Statutes 2020, 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 maximizedeleted text end new text begin in a manner that
maximizes netnew text end benefits to new text begin all new text end Minnesota citizensdeleted text begin , balancingdeleted text end new text begin throughout the state, including
but not limited to:
new text end

new text begin (1) the creation of high-quality jobs in Minnesota paying 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 that workers have the necessary tools, opportunities, and economic assistance
to adapt successfully during the energy transition, particularly in areas of concern for
environmental justice;
new text end

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

new text begin (5) ensuring that statewide air emissions are reduced, particularly in areas of concern
for environmental justice; and
new text end

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

new text begin (b) The commission must also implement this section in a manner that balancesnew text end factors
such as local ownership of or participation in energy production, 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 standarddeleted text end new text begin and carbon-free standardsnew text end , and the reliability of electric service to
Minnesotans.

new text begin (c) When making investments to meet the requirements under this section, utilities are
encouraged to locate new energy generating facilities in Minnesota communities where
fossil-fuel generating plants have been retired or are scheduled for retirement.
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. 22.

Minnesota Statutes 2020, section 216B.1691, subdivision 10, is amended to read:

Subd. 10.

Utility acquisition of resources.

A competitive resource acquisition process
established by the commission prior to June 1, 2007, shall not apply to a utility for the
construction, ownership, and operation of generation facilities used to satisfy the requirements
of this section unless, upon a finding that it is in the public interest, the commission issues
an order on or after June 1, 2007, that requires compliance by a utility with a competitive
resource acquisition process. A utility that owns a nuclear generation facility and intends
to construct, own, or operate facilities under this section shall file with the commission deleted text begin on
or before March 1, 2008,deleted text end new text begin as part of the utility's filing under section 216B.2422new text end a renewable
energy plan setting forth the manner in which the utility proposes to meet the requirements
of this section. deleted text begin The utility shall update the plan as necessary in its filing under section
216B.2422.deleted text end The commission shall approve the plan unless it determines, after public hearing
and comment, that the plan is not in the public interest. As part of its determination of public
interest, the commission shall consider the plan's impact on balancing the state's interest in:

(1) promoting the policy of economic development in rural areas through the development
of renewable energy projects, as expressed in subdivision 9;

(2) maintaining the reliability of the state's electric power grid; and

(3) minimizing cost impacts on ratepayers.

new text begin EFFECTIVE DATE. new text end

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

Sec. 23.

Minnesota Statutes 2020, 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.

(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.

(f) "Energy storage system" means a commercially available technology that:

(1) uses mechanical, chemical, or thermal processes to:

(i) store energy, deleted text begin including energy generated from renewable resources and energy that
would otherwise be wasted,deleted text end and deliver the stored energy for use at a later time; or

(ii) 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;

deleted text begin (2) is composed of stationary equipment;
deleted text end

deleted text begin (3)deleted text end new text begin (2)new text end if being used for electric grid benefits, isnew text begin (i)new text end operationally visiblenew text begin to the distribution
or transmission entity managing it,new text end andnew text begin (ii)new text end capable of being controlled by the distribution
or transmission entity deleted text begin managing it,deleted text end to enable and optimize the safe and reliable operation
of the electric system; and

deleted text begin (4)deleted text end new text begin (3)new text end achieves any of the following:

(i) reduces peak or electrical demand;

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

(iii) improves the reliable operation of the electrical transmission or distribution systemsdeleted text begin ,
while ensuring transmission or distribution needs are not createddeleted text end ; deleted text begin ordeleted text end new text begin and
new text end

(iv) deleted text begin lowers customer costsdeleted text end new text begin produces a net ratepayer benefitnew text end by storing energy when the
cost of generating or purchasing deleted text begin itdeleted text end new text begin energynew text end is low and delivering deleted text begin itdeleted text end new text begin energynew text end to customers when
the costs are high.

new text begin (g) Clean energy resource means:
new text end

new text begin (1) renewable energy, as defined in section 216B.2422, subdivision 1, paragraph (c);
new text end

new text begin (2) an energy storage system storing energy generated by renewable energy or a
carbon-free resource;
new text end

new text begin (3) energy efficiency, as defined in section 216B.241, subdivision 1;
new text end

new text begin (4) load management, as defined in section 216B.241, subdivision 1; or
new text end

new text begin (5) a carbon-free resource that the commission has determined is cost competitive under
subdivision 4, paragraph (g).
new text end

new text begin (h) "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.
new text end

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2021, and applies to dockets
initiated at the Public Utilities Commission on or after that date.
new text end

Sec. 24.

Minnesota Statutes 2020, 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 anddeleted text end new text begin ,new text end 75new text begin , and 100new text end percent of all energy needs from both new and refurbished
generating facilities through a combination of deleted text begin conservation and renewabledeleted text end new text begin cleannew text end energynew text begin and
carbon-freenew text end resources.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2021, and applies to dockets
initiated at the Public Utilities Commission on or after that date.
new text end

Sec. 25.

Minnesota Statutes 2020, section 216B.2422, is amended by adding a subdivision
to read:

new text begin Subd. 2d. new text end

new text begin Plan to minimize impacts to workers due to facility retirement. new text end

new text begin A utility
required to file a resource plan under subdivision 2 that has scheduled the retirement of an
electric generating facility located in Minnesota must include in the filing a narrative
describing the utility's efforts, in conjunction with the utility's workers and the workers'
designated representatives, to develop a plan to minimize the dislocations employees may
suffer as a result of the facility's retirement. The narrative must address, at a minimum,
plans to:
new text end

new text begin (1) minimize financial losses to workers;
new text end

new text begin (2) provide a transition timeline to ensure certainty for workers;
new text end

new text begin (3) protect pension benefits;
new text end

new text begin (4) extend or replace health insurance, life insurance, and other employment benefits;
new text end

new text begin (5) identify and maximize employment opportunities within the utility for dislocated
workers, including providing incentives for the utility to retain as many workers as possible;
new text end

new text begin (6) provide training and skill development for workers who must or choose to leave the
utility;
new text end

new text begin (7) create targeted transition plans for workers at all locations impacted by the facility
retirement; and
new text end

new text begin (8) quantify any additional costs the utility would incur and specifying what costs, if
any, the utility would request be recovered in the utility's rates as a result of efforts made
under this subdivision to minimize impacts to workers.
new text end

Sec. 26.

Minnesota Statutes 2020, section 216B.2422, subdivision 3, is amended to read:

Subd. 3.

Environmental costs.

(a) The commission shall, deleted text begin to the extent practicabledeleted text end new text begin using
the best available scientific and economic information and datanew text end , quantify and establish a
range of environmental costs associated with each method of electricity generation. new text begin The
commission shall adopt and apply the interim cost of greenhouse gas emissions valuations
presented in Technical Support Document: Social Cost of Carbon, Methane, and Nitrous
Oxide Interim Estimates, released by the federal government in February 2021, adopting
the 300-year time horizon and the full range of discount rates from 2.5 to five percent, with
three percent as the central estimate, and shall update the parameters as necessary to conform
with updates released by the federal Interagency Working Group on the Social Cost of
Greenhouse Gases or successors that are above the February 2021 interim valuations.
new text end

new text begin (b) When evaluating and selecting resource options in all proceedings before the
commission, including but not limited to proceedings regarding power purchase agreements,
resource plans, and certificates of need, new text end a utility deleted text begin shalldeleted text end new text begin mustnew text end use the values established by
the commission deleted text begin in conjunction with other external factors, including socioeconomic costs,
when evaluating and selecting resource options in all proceedings before the commission,
including resource plan and certificate of need proceedings.deleted text end new text begin under this subdivision to quantify
and monetize greenhouse gas and other emissions from the full lifecycle of fuels used for
in-state or imported electricity generation, including extraction, processing, transport, and
combustion.
new text end

new text begin (c) 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 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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2021, and applies to dockets
initiated at the Public Utilities Commission on or after that date.
new text end

Sec. 27.

Minnesota Statutes 2020, section 216B.2422, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

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

new text begin It is the policy of the state that: (1)
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 (2) given the significant
and continuing reductions in the cost of wind technologies, solar technologies, energy
storage systems, demand-response technologies, and energy efficiency technologies and
strategies, the favored method to meet electricity 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 August 1, 2021, and applies to dockets
initiated at the Public Utilities Commission on or after that date.
new text end

Sec. 28.

Minnesota Statutes 2020, section 216B.2422, subdivision 4, is amended to read:

Subd. 4.

Preference for deleted text begin renewabledeleted text end new text begin cleannew text end energy deleted text begin facilitydeleted text end new text begin resourcesnew text end .

new text begin (a) 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, pursuant to section 216B.243, nor shall the commissionnew text begin approve
a power purchase agreement ornew text end allow rate recovery pursuant to section 216B.16 for deleted text begin suchdeleted text end a
nonrenewable energy facility, unless the utility has demonstratednew text begin by clear and convincing
evidencenew text end that a renewable energy facilitynew 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, thedeleted text end
deleted text begin 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 determine 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 using renewable or clean energy resources to meet the need
for resources is not affordable or reliable when compared with a nonrenewable energy
facility or nonclean energy resource.
new text end

new text begin (c) When determining whether a renewable or clean energy resource is not affordable,
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 cost to purchase wholesale electricity in the market and the cost 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 resulting from a nonrenewable energy facility, as determined
by the commission under subdivision 3.
new text end

new text begin (d) When determining whether a renewable or clean energy resource is reliable, the
commission must consider, to the extent reasonable, the ability of the resources or facilities
of the utility and the regional electric grid to provide essential reliability services, including
frequency response, balancing services, and voltage control.
new text end

new text begin (e) The commission must make a written determination describing the commission's
findings and the reasoning behind the conclusions regarding whether a renewable or clean
energy resource is affordable and reliable under this subdivision. When making the public
interest determination under paragraph (a), the commission must also consider and make a
written determination as to whether the energy resources approved by the commission:
new text end

new text begin (1) help the state achieve the greenhouse gas reduction goals under section 216H.02;
and
new text end

new text begin (2) help the utility achieve the renewable energy standard under section 216B.1691,
subdivision 2a, or the solar energy standard under section 216B.1691, subdivision 2f.
new text end

new text begin (f) Nothing in this section impacts a decision to continue operating a nuclear facility
that is generating energy in Minnesota as of June 1, 2020. If a decision is made to retire an
existing nuclear electric generating unit, paragraphs (a) to (e) govern the process to identify
replacement resources.
new text end

new text begin (g) The commission may, by order, add to the list of resources the commission determines
are clean energy resources for the purposes of this section upon finding that the resource is
carbon-free and cost competitive when compared with other carbon-free alternatives.
new text end

new text begin (h) If the commission approves a public utility's integrated resource plan that includes
the retirement of a facility that contributes to statewide greenhouse gas emissions, the public
utility is entitled to own at least a portion of the generation, transmission, and other facilities
necessary to replace the accredited capacity and energy of the retiring facility, as determined
by the commission, provided that:
new text end

new text begin (1) for a public utility with more than 200,000 retail electric customers in Minnesota,
the approved resource plan projects that the public utility's contribution to statewide
greenhouse gas emissions are reduced by 80 percent or more, measured from 2005 to 2030;
new text end

new text begin (2) for a public utility with more than 100,000 but fewer than 200,000 retail electric
customers, the approved resource plan projects that the public utility's contribution to
statewide greenhouse gas emissions are reduced by 80 percent or more, measured from
2005 to 2035;
new text end

new text begin (3) for a public utility with fewer than 100,000 retail electric customers in Minnesota,
the approved resource plan projects that the public utility's contribution to statewide
greenhouse gas emissions are reduced by 65 percent or more, measured from 2005 to 2030;
and
new text end

new text begin (4) the commission determines that the public utility's ownership of clean energy and
carbon-free resources that replace retired facilities is reasonable and in the public interest.
new text end

new text begin (i) Utility purchases or contracts to purchase capacity, energy, or ancillary services from
an independent systems operator, an auction, or other market administered by an independent
systems operator, and whose term is one year or less, are not subject to this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2021, and applies to dockets
initiated at the Public Utilities Commission on or after that date.
new text end

Sec. 29.

Minnesota Statutes 2020, 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 part of a resource plan filing, a utility
must report on associated local job impacts and the steps the utility and the utility's 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 an integrated resource plan, a
certificate of need, a power purchase agreement, or commission approval of a new or
refurbished electric generation facility. The commission must, to the maximum extent
possible, prioritize the hiring of workers from communities hosting retiring electric generation
facilities, including workers previously employed at those facilities.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2021, and applies to dockets
initiated at the Public Utilities Commission on or after that date.
new text end

Sec. 30.

Minnesota Statutes 2020, 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 deleted text begin indeleted text end new text begin and consider local job impacts whennew text end 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2021, and applies to dockets
initiated at the Public Utilities Commission on or after that date.
new text end

Sec. 31.

Minnesota Statutes 2020, section 216B.2422, is amended by adding a subdivision
to read:

new text begin Subd. 8. new text end

new text begin Transmission planning in advance of generation retirement. new text end

new text begin A utility must
identify in a resource plan each nonrenewable energy facility on the utility's system that
has a depreciation term, probable service life, or operating license term that ends within 15
years of the resource plan filing date. For each nonrenewable energy facility identified, the
utility must include in the resource plan an initial plan to: (1) replace the nonrenewable
energy facility; and (2) upgrade any transmission or other grid capabilities needed to support
the retirement of that nonrenewable energy facility.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2021, and applies to dockets
initiated at the Public Utilities Commission on or after that date.
new text end

Sec. 32.

new text begin [216B.2427] NATURAL GAS UTILITY INNOVATION PLANS.
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 216B.2428,
the following terms have the meanings given.
new text end

new text begin (b) "Biogas" means gas produced by the anaerobic digestion of biomass, gasification of
biomass, or other effective conversion processes.
new text end

new text begin (c) "Carbon capture" means the capture of greenhouse gas emissions that would otherwise
be released into the atmosphere.
new text end

new text begin (d) "Carbon-free resource" means an electricity generation facility whose operation does
not contribute to statewide greenhouse gas emissions, as defined in section 216H.01,
subdivision 2.
new text end

new text begin (e) "District energy" means a heating or cooling system that is solar thermal powered
or that uses the constant temperature of the earth or underground aquifers as a thermal
exchange medium to heat or cool multiple buildings connected through a piping network.
new text end

new text begin (f) "Energy efficiency" has the meaning given in section 216B.241, subdivision 1,
paragraph (f), but does not include energy conservation investments that the commissioner
determines could reasonably be included in a utility's conservation improvement program.
new text end

new text begin (g) "Greenhouse gas emissions" means emissions of carbon dioxide, methane, nitrous
oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride emitted by
anthropogenic sources within Minnesota and from the generation of electricity imported
from outside the state and consumed in Minnesota, excluding carbon dioxide that is injected
into geological formations to prevent its release to the atmosphere in compliance with
applicable laws.
new text end

new text begin (h) "Innovative resource" means biogas, renewable natural gas, power-to-hydrogen,
power-to-ammonia, carbon capture, strategic electrification, district energy, and energy
efficiency.
new text end

new text begin (i) "Lifecycle greenhouse gas emissions" means the aggregate greenhouse gas emissions
resulting from the production, processing, transmission, and consumption of an energy
resource.
new text end

new text begin (j) "Lifecycle greenhouse gas emissions intensity" means lifecycle greenhouse gas
emissions per unit of energy.
new text end

new text begin (k) "Nonexempt customer" means a utility customer that has not been included in a
utility's innovation plan under subdivision 3, paragraph (f).
new text end

new text begin (l) "Power-to-ammonia" means the production of ammonia from hydrogen produced
via power-to-hydrogen using a process that has a lower lifecycle greenhouse gas intensity
than does natural gas produced from conventional geologic sources.
new text end

new text begin (m) "Power-to-hydrogen" means the use of electricity generated by a carbon-free resource
to produce hydrogen.
new text end

new text begin (n) "Renewable energy" has the meaning given in section 216B.2422, subdivision 1.
new text end

new text begin (o) "Renewable natural gas" means biogas that has been processed to be interchangeable
with, and that has a lower lifecycle greenhouse gas intensity than, natural gas produced
from conventional geologic sources.
new text end

new text begin (p) "Solar thermal" has the meaning given to qualifying solar thermal project in section
216B.2411, subdivision 2, paragraph (d).
new text end

new text begin (q) "Strategic electrification" means the installation of electric end-use equipment in an
existing building in which natural gas is a primary or back-up fuel source, or in a newly
constructed building in which a customer receives natural gas service for one or more
end-uses, provided that the electric end-use equipment:
new text end

new text begin (1) results in a net reduction in statewide greenhouse gas emissions, as defined in section
216H.01, subdivision 2, over the life of the equipment when compared to the most efficient
commercially available natural gas alternative; and
new text end

new text begin (2) is installed and operated in a manner that improves the load factor of the customer's
electric utility.
new text end

new text begin Strategic electrification does not include investments that the commissioner determines
could reasonably be included in the natural gas utility's conservation improvement program
under section 216B.241.
new text end

new text begin (r) "Total incremental cost" means the calculation of the following components of a
utility's innovation plan approved by the commission under subdivision 2:
new text end

new text begin (1) the sum of:
new text end

new text begin (i) return of and on capital investments for the production, processing, pipeline
interconnection, storage, and distribution of innovative resources;
new text end

new text begin (ii) incremental operating costs associated with capital investments in infrastructure for
the production, processing, pipeline interconnection, storage, and distribution of innovative
resources;
new text end

new text begin (iii) incremental costs to procure innovative resources from third parties;
new text end

new text begin (iv) incremental costs to develop and administer programs; and
new text end

new text begin (v) incremental costs for research and development related to innovative resources;
new text end

new text begin (2) less the sum of:
new text end

new text begin (i) value received by the utility upon the resale of innovative resources or innovative
resource by-products, including any environmental credits included with the resale of
renewable gaseous fuels or value received by the utility when innovative resources are used
as vehicle fuel;
new text end

new text begin (ii) cost savings achieved through avoidance of purchases of natural gas produced from
conventional geologic sources, including but not limited to avoided commodity purchases
or avoided pipeline costs; and
new text end

new text begin (iii) other revenues received by the utility that are directly attributable to the utility's
implementation of an innovation plan.
new text end

new text begin (s) "Utility" means a public utility, as defined in section 216B.02, subdivision 4, that
provides natural gas sales or natural gas transportation services to customers in Minnesota.
new text end

new text begin Subd. 2. new text end

new text begin Innovation plans. new text end

new text begin (a) A natural gas utility may file an innovation plan with
the commission. The utility's plan must include, as applicable, the following components:
new text end

new text begin (1) the innovative resource or resources the utility plans to implement to contribute to
meeting the state's greenhouse gas and renewable energy goals, including those established
in section 216C.05, subdivision 2, clause (3), and section 216H.02, subdivision 1, within
the requirements and limitations set forth in this section;
new text end

new text begin (2) research and development investments related to innovative resources the utility
plans to undertake;
new text end

new text begin (3) total lifecycle greenhouse gas emissions that the utility projects are reduced or avoided
through implementing the plan;
new text end

new text begin (4) a comparison of the estimate in clause (3) to total emissions from natural gas use by
utility customers in 2020;
new text end

new text begin (5) a description of each pilot program included in the plan that is related to the
development or provision of innovative resources, and an estimate of the total incremental
costs to implement each element;
new text end

new text begin (6) the cost-effectiveness of innovative resources calculated from the perspective of the
utility, society, the utility's nonparticipating customers, and the utility's participating
customers compared to other innovative resources that could be deployed to reduce or avoid
the same greenhouse gas emissions targeted for reduction by the utility's proposed innovative
resource;
new text end

new text begin (7) for any pilot program not previously approved as part of the utility's most recent
innovation plan, a third-party analysis of:
new text end

new text begin (i) the lifecycle greenhouse gas emissions intensity of the proposed innovative resources;
and
new text end

new text begin (ii) the forecasted lifecycle greenhouse gas emissions reduced or avoided if the proposed
pilot program is implemented;
new text end

new text begin (8) an explanation of the methodology used by the utility to calculate the lifecycle
greenhouse gas emissions avoided or reduced by each pilot program included in the plan,
including descriptions of how the utility's method deviated, if at all, from the carbon
accounting frameworks established by the commission under section 216B.2428;
new text end

new text begin (9) a discussion of whether the plan supports the development and use of alternative
agricultural products, waste reduction, reuse, or anaerobic digestion of organic waste, and
the recovery of energy from wastewater, and, if it does, a description of the geographic
areas of the state in which the benefits are realized;
new text end

new text begin (10) a description of third-party systems and processes the utility plans to use to:
new text end

new text begin (i) track the innovative resources included in the plan so that environmental benefits
produced by the plan are not claimed for any other program; and
new text end

new text begin (ii) verify the environmental attributes and greenhouse gas emissions intensity of
innovative resources included in the plan;
new text end

new text begin (11) projected local job impacts resulting from implementation of the plan and a
description of steps the utility and the utility's energy suppliers and contractors are taking
to maximize the availability of construction employment opportunities for local workers;
new text end

new text begin (12) a description of how the utility proposes to recover annual total incremental costs
of the plan;
new text end

new text begin (13) steps the utility has taken or proposes to take to reduce the expected cost of the plan
on low- and moderate-income residential customers and to ensure that low- and
moderate-income residential customers benefit from innovative resources included in the
plan;
new text end

new text begin (14) a report on the utility's progress toward implementing the utility's previously
approved innovation plan, if applicable;
new text end

new text begin (15) a report of the utility's progress toward achieving the cost-effectiveness objectives
established by the commission with respect to the utility's previously approved innovation
plan, if applicable; and
new text end

new text begin (16) collections of pilot programs that the utility estimates would, if implemented, provide
approximately 50 percent, 150 percent, and 200 percent of the greenhouse gas reduction or
avoidance benefits of the utility's proposed plan.
new text end

new text begin (b) The commission must approve, modify, or reject a plan. The commission must not
approve an innovation plan unless the commission finds:
new text end

new text begin (1) the size, scope, and scale of the plan produces net benefits under the cost-benefit
framework established by the commission in section 216B.2428;
new text end

new text begin (2) the plan promotes the use of renewable energy resources and reduces or avoids
greenhouse gas emissions at a cost level consistent with subdivision 3;
new text end

new text begin (3) the plan promotes local economic development;
new text end

new text begin (4) the innovative resources included in the plan have a lower lifecycle greenhouse gas
intensity than natural gas produced from conventional geologic sources;
new text end

new text begin (5) the systems used to track and verify the environmental attributes of the innovative
resources included in the plan are reasonable, considering available third-party tracking and
verification systems;
new text end

new text begin (6) the costs and revenues projected under the plan are reasonable in comparison to other
innovative resources the utility could deploy to reduce greenhouse gas emissions, considering
other benefits of the innovative resources included in the plan;
new text end

new text begin (7) the total amount of estimated greenhouse gas emissions reduction or avoidance to
be achieved under the plan is reasonable considering the state's greenhouse gas and renewable
energy goals, including those established in section 216C.05, subdivision 2, clause (3), and
section 216H.02, subdivision 1; customer cost; and the total amount of greenhouse gas
emissions reduction or avoidance achieved under the utility's previously approved plans, if
applicable; and
new text end

new text begin (8) any renewable natural gas purchased by a utility under the plan that is produced from
the anaerobic digestion of manure is certified as being produced at an agricultural livestock
production facility that does not increase the number of animal units at the facility solely
or primarily to produce renewable natural gas for the plan.
new text end

new text begin (c) In seeking to recover costs under a plan approved by the commission under this
section, the utility must demonstrate to the satisfaction of the commission that the actual
total incremental costs incurred to implement the approved innovation plan are reasonable.
Prudently incurred costs under an approved plan, including prudently incurred costs to
obtain the third-party analysis required in paragraph (a), clauses (6) and (7), are recoverable
either:
new text end

new text begin (1) under section 216B.16, subdivision 7, clause (2), via the utility's purchased gas
adjustment;
new text end

new text begin (2) in the utility's next general rate case; or
new text end

new text begin (3) via annual adjustments, provided that after notice and comment the commission
determines that the costs included for recovery through rates are prudently incurred. Annual
adjustments must include a rate of return, income taxes on the rate of return, incremental
property taxes, incremental depreciation expense, and incremental operation and maintenance
expenses. The rate of return must be at the level approved by the commission in the utility's
last general rate case, unless the commission determines that a different rate of return is in
the public interest.
new text end

new text begin (d) Upon approval of a utility's plan, the commission shall establish cost-effectiveness
objectives for the plan based on the cost-benefit test for innovative resources developed
under section 216B.2428. The cost-effectiveness objective for each plan must demonstrate
incremental progress from the previously approved plan's cost-effectiveness objective.
new text end

new text begin (e) A utility operating under an approved plan must file annual reports to the commission
on work completed under the plan, including:
new text end

new text begin (1) costs incurred;
new text end

new text begin (2) lifecycle greenhouse gas emissions reductions or avoidance achieved;
new text end

new text begin (3) a description of the processes used to track and verify the innovative resources and
to retire the associated environmental attributes;
new text end

new text begin (4) an assessment of the degree to which the lifecycle greenhouse gas accounting
methodology is consistent with current science;
new text end

new text begin (5) the economic impact of the plan, including job creation;
new text end

new text begin (6) the utility's progress toward achieving the cost-effectiveness objectives established
by the commission; and
new text end

new text begin (7) modifications to elements of the plan proposed by the utility.
new text end

new text begin (f) When evaluating a utility's annual report, the commission may:
new text end

new text begin (1) approve the continuation of a pilot program included in the plan, with or without
modifications;
new text end

new text begin (2) require the utility to file a new or modified pilot program or plan; or
new text end

new text begin (3) disapprove the continuation of a pilot program or plan.
new text end

new text begin (g) An innovation plan has a term of five years. A subsequent innovation plan must be
filed no later than four years after the previous plan was approved by the commission so
that, if approved, the new plan takes effect immediately upon expiration of the previous
plan.
new text end

new text begin (h) For purposes of this section and the commission's lifecycle carbon accounting
framework and cost-benefit test for innovative resources under section 216B.2428, any
required analysis of lifecycle greenhouse gas emissions reductions or avoidance, or lifecycle
greenhouse gas intensity:
new text end

new text begin (1) must include but is not limited to estimates of:
new text end

new text begin (i) avoided or reduced greenhouse gas emissions attributable to utility operations;
new text end

new text begin (ii) avoided or reduced greenhouse gas emissions from the production, processing, and
transmission of fuels prior to receipt by the utility; and
new text end

new text begin (iii) avoided or reduced greenhouse gas emissions at the point of end use;
new text end

new text begin (2) must not count any unit of greenhouse gas emissions avoidance or reduction more
than once; and
new text end

new text begin (3) may, where direct measurement is not technically or economically feasible, rely on
emissions factors, default values, or engineering estimates from a publicly accessible source
accepted by a federal or state government agency, provided that the emissions factors,
default values, or engineering estimates can be demonstrated to the satisfaction of the
commission to produce a reasonable estimate of greenhouse gas emissions reductions,
avoidance, or intensity.
new text end

new text begin (i) Strategic electrification implemented in a plan approved by the commission under
this section is not eligible for a financial incentive under section 216B.241, subdivision 2c.
Electric end-use equipment installed under a plan approved by the commission under this
section is the exclusive property of the building owner.
new text end

new text begin Subd. 3. new text end

new text begin Limitations on utility customer costs. new text end

new text begin (a) Except as provided in paragraph
(b), the first innovation plan submitted to the commission by a utility must not propose, and
the commission must not approve, annual total incremental costs exceeding the lesser of:
new text end

new text begin (1) 1.75 percent of the utility's gross operating revenues from natural gas service provided
in Minnesota at the time of plan filing; or
new text end

new text begin (2) $20 per nonexempt customer, based on the proposed annual total incremental costs
for each year of the plan divided by the total number of nonexempt utility customers.
new text end

new text begin (b) The commission may approve additional annual costs up to the lesser of:
new text end

new text begin (1) an additional 0.25 percent of the utility's gross operating revenues from service
provided in Minnesota at the time of plan filing; or
new text end

new text begin (2) $5 per nonexempt customer, based on the proposed annual total incremental costs
for each year of the plan divided by the total number of nonexempt utility customers of
incremental costs, provided that the additional costs under this paragraph are associated
exclusively with the purchase of renewable natural gas produced from:
new text end

new text begin (i) food waste diverted from a landfill;
new text end

new text begin (ii) a municipal wastewater treatment system; or
new text end

new text begin (iii) an organic mixture that includes at least 15 percent, by volume, sustainably harvested
native prairie grasses or locally appropriate cover crops, as determined by a local soil and
water conservation district or the United States Department of Agriculture, Natural Resources
Conservation Service.
new text end

new text begin (c) If the commission determines that the utility has successfully achieved the
cost-effectiveness objectives established in the utility's most recently approved innovation
plan, except as provided in paragraph (d), the next subsequent plan filed by the utility under
this section is subject to the provisions of paragraphs (a) and (b), except that:
new text end

new text begin (1) the cap on total incremental costs in paragraph (a) with respect to the second plan is
the lesser of:
new text end

new text begin (i) 2.75 percent of the utility's gross operating revenues from natural gas service in
Minnesota at the time of the plan's filing; or
new text end

new text begin (ii) $35 per nonexempt customer; and
new text end

new text begin (2) the cap on additional costs in paragraph (b) is the lesser of:
new text end

new text begin (i) an additional 0.75 percent of the utility's gross operating revenues from natural gas
service in Minnesota at the time of the plan's filing; or
new text end

new text begin (ii) $10 per nonexempt customer.
new text end

new text begin (d) If the commission determines that the utility has successfully achieved the
cost-effectiveness objectives established in two of the same utility's previously approved
innovation plans, all subsequent plans filed by the utility under this section are subject to
the provisions of paragraphs (a) and (b), except that:
new text end

new text begin (1) the cap on total incremental costs in paragraph (a) with respect to the third or
subsequent plan is the lesser of:
new text end

new text begin (i) four percent of the utility's gross operating revenues from natural gas service in
Minnesota at the time of the plan's filing; or
new text end

new text begin (ii) $50 per nonexempt customer; and
new text end

new text begin (2) the cap on additional costs in paragraph (b) is the lesser of:
new text end

new text begin (i) an additional 1.5 percent of the utility's gross operating revenues from natural gas
service in Minnesota at the time of the plan's filing; or
new text end

new text begin (ii) $20 per nonexempt customer.
new text end

new text begin (e) For purposes of paragraphs (a) to (d), the limits on annual total incremental costs
must be calculated at the time the innovation plan is filed as the average of the utility's
forecasted total incremental costs over the five-year term of the plan.
new text end

new text begin (f) A large customer facility that the commissioner of commerce has exempted from a
utility's conservation improvement program under section 216B.241, subdivision 1a,
paragraph (b), is exempt from the utility's innovation plan offerings and must not be charged
any costs incurred to implement an approved innovation plan unless the large customer
facility files a request with the commissioner to be included in a utility's innovation plan.
The commission may prohibit large customer facilities exempt from innovation plan costs
from participating in innovation plans.
new text end

new text begin (g) A utility filing an innovation plan may include annual spending and investments on
research and development of up to ten percent of the proposed total incremental costs related
to innovative plans, subject to the limitations in paragraphs (a) to (e).
new text end

new text begin (h) For purposes of this subdivision, gross operating revenues do not include revenues
from large customer facilities exempt from innovation plan costs.
new text end

new text begin Subd. 4. new text end

new text begin Innovative resources procured outside of an innovation plan. new text end

new text begin (a) Without
filing an innovation plan, a natural gas utility may propose and the commission may approve
cost recovery for:
new text end

new text begin (1) innovative resources acquired to satisfy a commission-approved green tariff program
that allows customers to choose to meet a portion of the customers' energy needs through
innovative resources; or
new text end

new text begin (2) utility expenditures for innovative resources procured at a cost that is within five
percent of the average of Ventura and Demarc index prices for natural gas produced from
conventional geologic sources at the time of the transaction per unit of natural gas that the
innovative resource displaces.
new text end

new text begin (b) An approved green tariff program must include provisions to ensure that reasonable
systems are used to track and verify the environmental attributes of innovative resources
included in the program, taking into account any available third-party tracking or verification
systems.
new text end

new text begin (c) For the purposes of this subdivision, "Ventura and Demarc index prices" means the
daily index price of wholesale natural gas sold at the Northern Natural Gas Company's
Ventura trading hub in Hancock County, Iowa, and its demarcation point in Clifton, Kansas.
new text end

new text begin Subd. 5. new text end

new text begin Power-to-ammonia. new text end

new text begin When determining whether to approve a power-to-ammonia
pilot program as part of an innovative plan, the commission must consider:
new text end

new text begin (1) the risk of exposing any person to unhealthy concentrations of ammonia;
new text end

new text begin (2) the risk that any home or business might be affected by ammonia odors;
new text end

new text begin (3) whether the greenhouse gas emissions addressed by the proposed power-to-ammonia
project could be more efficiently addressed using power-to-hydrogen; and
new text end

new text begin (4) whether the power-to-ammonia project achieves lifecycle greenhouse gas emissions
reductions in the agricultural sector more effectively than power-to-hydrogen.
new text end

new text begin Subd. 6. new text end

new text begin Thermal energy audits. new text end

new text begin The first innovation plan filed under this section by
a utility with more than 800,000 customers must include a pilot program to provide thermal
energy audits to small- and medium-sized business in order to identify opportunities to
reduce or avoid greenhouse gas emissions from natural gas use. The pilot program must
provide incentives for businesses to implement recommendations made by the audit. The
utility must develop criteria to identify businesses that achieve significant emissions
reductions by implementing audit recommendations and must recognize the businesses as
thermal energy leaders.
new text end

new text begin Subd. 7. new text end

new text begin Innovative resources for certain industrial processes. new text end

new text begin The first innovation
plan filed under this section by a utility with more than 800,000 customers must include a
pilot program to provide innovative resources to industrial facilities whose manufacturing
processes, for technical reasons, are not amenable to electrification. A large customer facility
exempt from innovation plan offerings under subdivision 3, paragraph (f), is not eligible to
participate in the pilot program under this subdivision.
new text end

new text begin Subd. 8. new text end

new text begin Electric cold climate air-source heat pumps. new text end

new text begin (a) The first innovation plan
filed under this section by a utility with more than 800,000 customers must include a pilot
program that facilitates deep energy retrofits and the installation of cold climate electric
air-source heat pumps in existing residential homes that have natural gas heating systems.
new text end

new text begin (b) For purposes of this subdivision, "deep energy retrofit" means the installation of any
measure or combination of measures, including air sealing and addressing thermal bridges,
that under normal weather and operating conditions can reasonably be expected to reduce
a building's calculated design load to ten or fewer British Thermal Units per hour per square
foot of conditioned floor area. Deep energy retrofit does not include the installation of
photovoltaic electric generation equipment, but may include the installation of a qualifying
solar thermal energy project.
new text end

new text begin Subd. 9. new text end

new text begin District energy. new text end

new text begin The first innovation plan filed under this section by a utility
with more than 800,000 customers must include a pilot program to facilitate the development,
expansion, or modification of district energy systems in Minnesota. This subdivision does
not require the utility to propose, construct, maintain, or own district energy infrastructure.
new text end

new text begin Subd. 10. new text end

new text begin Throughput goal. new text end

new text begin It is the goal of the state of Minnesota that through the
Natural Gas Innovation Act and Conservation Improvement Program, utilities reduce the
overall amount of natural gas produced from conventional geologic sources delivered to
customers.
new text end

new text begin Subd. 11. new text end

new text begin Utility system report and forecasts. new text end

new text begin (a) A public utility filing an innovation
plan shall concurrently submit a report to the commission containing the following
information:
new text end

new text begin (1) methane gas emissions attributed to venting or leakage across the utility's system,
including emissions information reported to the Environmental Protection Agency and gas
leaks considered to be hazardous or nonhazardous, and a narrative description of the utility's
expectations regarding the cost and performance of the utility's leakage reduction programs
over the next five years;
new text end

new text begin (2) total system greenhouse gas emissions and greenhouse gas emissions projected to
be reduced or avoided through innovative resource investments and energy conservation
investments, and a narrative description of the costs required to achieve the reductions over
the next five years through investments in innovative resources and energy conservation;
new text end

new text begin (3) the quantity of pipe in service in the utility's natural gas network in Minnesota, by
material, size, coating, operating pressure, and decade of installation, based on utility
information reported to the United States Department of Transportation;
new text end

new text begin (4) a narrative description of other significant equipment owned and operated by the
utility through which gas is transported or stored, including regulator stations and storage
facilities, a discussion of the function of the equipment, how the equipment is maintained,
and utility efforts to prevent leaks from the equipment;
new text end

new text begin (5) a five-year forecast of fuel prices and anticipated purchases including, as available,
natural gas produced from conventional geologic sources, renewable natural gas, and
alternative fuels;
new text end

new text begin (6) a five-year forecast of potential capital investments by the utility in existing
infrastructure and new infrastructure for natural gas produced from conventional geologic
sources and for innovative resources; and
new text end

new text begin (7) an inventory of the utility's current financial incentive programs for natural gas,
including rebates and incentives offered for new and existing buildings and a description
of the utility's projected changes in incentives the utility is likely to implement over the next
five years.
new text end

new text begin (b) Information filed under this subdivision is intended to be used by the commission
to evaluate a utility's innovation plan in the context of the utility's other planned investments
and activities with respect to natural gas produced from conventional geologic sources.
Information filed under this subdivision must not be used by the commission to set or limit
utility rate recovery.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 1, 2022.
new text end

Sec. 33.

new text begin [216B.2428] LIFECYCLE GREENHOUSE GAS EMISSIONS
ACCOUNTING FRAMEWORK; COST-BENEFIT TEST FOR INNOVATIVE
RESOURCES.
new text end

new text begin By June 1, 2022, the commission shall, by order, issue frameworks the commission must
use to calculate lifecycle greenhouse gas emissions intensities of each innovative resource,
as follows:
new text end

new text begin (1) a general framework to compare the lifecycle greenhouse gas emissions intensities
of power-to-hydrogen, strategic electrification, renewable natural gas, district energy, energy
efficiency, biogas, carbon capture, and power-to-ammonia; and
new text end

new text begin (2) a cost-benefit analytic framework to be applied to innovative resources and innovation
plans filed under section 216B.2427 that the commission must use to compare the
cost-effectiveness of those resources and plans. This analytic framework must take into
account:
new text end

new text begin (i) the total incremental cost of the plan or resource and the lifecycle greenhouse gas
emissions avoided or reduced by the innovative resource or plan, using the framework
developed under clause (1);
new text end

new text begin (ii) additional economic costs and benefits, programmatic costs and benefits, additional
environmental costs and benefits, and other costs or benefits that may be expected under a
plan; and
new text end

new text begin (iii) baseline cost-effectiveness criteria against which an innovation plan should be
compared. When establishing baseline criteria, the commission must take into account
options available to reduce lifecycle greenhouse gas emissions from natural gas end uses
and the goals in section 216C.05, subdivision 2, clause (3), and section 216H.02, subdivision
1. To the maximum reasonable extent, the cost-benefit framework must be consistent with
environmental cost values established under section 216B.2422, subdivision 3, and other
calculations of the social value of greenhouse gas emissions reductions used by the
commission. The commission may update frameworks established under this section as
necessary.
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.

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

new text begin (a) It is the goal of the state of Minnesota to promote energy end uses powered by
electricity in the building sector 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
in the building sector should prioritize investment and activity in low-income and
under-resourced 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. 35.

new text begin [216B.248] PUBLIC UTILITY BENEFICIAL BUILDING
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 the public utility's service area in residential and commercial
buildings. To the maximum reasonable extent, a plan must:
new text end

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

new text begin (2) mitigate cost and avoid duplication with the utility's conservation improvement plan
under section 216B.241;
new text end

new text begin (3) maintain or enhance the reliability of electricity service;
new text end

new text begin (4) quantify the acres of land needed for new generation, transmission, and distribution
facilities to provide the additional electricity required under the plan;
new text end

new text begin (5) maintain or enhance public health and safety when temperatures fall below 25 degrees
below zero Fahrenheit;
new text end

new text begin (6) support the integration of renewable and carbon-free resources;
new text end

new text begin (7) encourage demand response and load shape management opportunities and the use
of energy storage that reduce overall system costs;
new text end

new text begin (8) prioritize electrification projects in economically disadvantaged communities;
new text end

new text begin (9) consider cost protections for low- and moderate-income customers;
new text end

new text begin (10) produce a net reduction in greenhouse gas emissions, based on the electricity
generation portfolio of the public utility proposing the plan, or based on the electricity
serving the end-use in the event that a public utility providing retail natural gas service
proposes the plan, either over the lifetime of the conversion or by 2050, whichever is sooner;
and
new text end

new text begin (11) consider local job impacts and give preference to proposals that maximize the
creation of construction employment opportunities for local workers.
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. 36.

new text begin [216B.491] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For the purposes of sections 216B.491 to 216B.4991, the terms
defined in this subdivision have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Ancillary agreement. new text end

new text begin "Ancillary agreement" means any bond, insurance policy,
letter of credit, reserve account, surety bond, interest rate lock or swap arrangement, liquidity
or credit support arrangement, or other financial arrangement entered into in connection
with energy transition bonds that is designed to promote the credit quality and marketability
of energy transition bonds or to mitigate the risk of an increase in interest rates.
new text end

new text begin Subd. 3. new text end

new text begin Assignee. new text end

new text begin "Assignee" means any person to which an interest in energy transition
property is sold, assigned, transferred, or conveyed, other than as security, and any successor
to or subsequent assignee of the person.
new text end

new text begin Subd. 4. new text end

new text begin Bondholder. new text end

new text begin "Bondholder" means any holder or owner of energy transition
bonds.
new text end

new text begin Subd. 5. new text end

new text begin Clean energy resource. new text end

new text begin "Clean energy resource" means:
new text end

new text begin (1) renewable energy, as defined in section 216B.2422, subdivision 1;
new text end

new text begin (2) an energy storage system; or
new text end

new text begin (3) energy efficiency and load management, as defined in section 216B.241, subdivision
1.
new text end

new text begin Subd. 6. new text end

new text begin Customer. new text end

new text begin "Customer" means a person who takes electric service from an
electric utility for consumption of electricity in Minnesota.
new text end

new text begin Subd. 7. new text end

new text begin Electric generating facility. new text end

new text begin "Electric generating facility" means a facility that
generates electricity, is owned in whole or in part by an electric utility, and is used to serve
customers in Minnesota. Electric generating facility includes any interconnected infrastructure
or facility used to transmit or deliver electricity to Minnesota customers.
new text end

HF 2110

Bill Text Versions

ARTICLE 1

ENERGY CONSERVATION AND STORAGE

Section 1.

16B.86 deleted text begin PRODUCTIVITYdeleted text end new text begin STATE BUILDING ENERGY CONSERVATION IMPROVEMENT REVOLVINGnew text end LOAN ACCOUNT.

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin Subd. 2. new text end

new text begin Account established. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 2.

16B.87 AWARD AND REPAYMENT OF deleted text begin PRODUCTIVITYdeleted text end new text begin STATE BUILDING ENERGY IMPROVEMENT CONSERVATIONnew text end LOANS.

Subdivision 1.

Committee.

Subd. 2.

Award and terms of loans.

Subd. 3.

Repayment.

Sec. 3.

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

new text begin EFFECTIVE DATE. new text end

Sec. 4.

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

new text begin EFFECTIVE DATE. new text end

Sec. 5.

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

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin Subd. 2. new text end

new text begin Consumer-owned utility. new text end

new text begin Subd. 3. new text end

new text begin Cumulative lifetime savings. new text end

new text begin Subd. 4. new text end

new text begin Efficient fuel-switching improvement. new text end

new text begin Subd. 5. new text end

new text begin Energy conservation. new text end

new text begin Subd. 6. new text end

new text begin Energy conservation improvement. new text end

new text begin Subd. 7. new text end

new text begin Energy efficiency. new text end

new text begin Subd. 8. new text end

new text begin Fuel. new text end

new text begin Subd. 9. new text end

new text begin Fuel neutral. new text end

new text begin Subd. 10. new text end

new text begin Gross annual retail energy sales. new text end

new text begin Subd. 11. new text end

new text begin Investments and expenses of a public utility. new text end

new text begin Subd. 12. new text end

new text begin Large customer facility. new text end

new text begin Subd. 13. new text end

new text begin Large energy facility. new text end

new text begin Subd. 14. new text end

new text begin Lifetime energy savings. new text end

new text begin Subd. 15. new text end

new text begin Load management. new text end

new text begin Subd. 16. new text end

new text begin Low-income household. new text end

new text begin Subd. 17. new text end

new text begin Low-income programs. new text end

new text begin Subd. 18. new text end

new text begin Member. new text end

new text begin Subd. 19. new text end

new text begin Multifamily building. new text end

new text begin Subd. 20. new text end

new text begin Preweatherization measure. new text end

new text begin Subd. 21. new text end

new text begin Qualifying utility. new text end

new text begin Subd. 22. new text end

new text begin Waste heat recovered and used as thermal energy. new text end

new text begin Subd. 23. new text end

new text begin Waste heat recovery converted into electricity. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 6.

new text begin [216B.2403] CONSUMER-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 Subd. 2. new text end

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

16B.86 deleted text begin PRODUCTIVITYdeleted text end new text begin STATE BUILDING ENERGY CONSERVATION
IMPROVEMENT REVOLVINGnew text end LOAN ACCOUNT.

16B.87 AWARD AND REPAYMENT OF deleted text begin PRODUCTIVITYdeleted text end new text begin STATE BUILDING
ENERGY IMPROVEMENT CONSERVATIONnew text end LOANS.

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

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

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

new text begin Ownership of preweatherization measure or energy conservation
improvement. new text end

deleted text begin Investment, expenditure, and contribution; public utilitydeleted text end new text begin Large customer
facilitynew text end .

Ownership of new text begin preweatherization measure or new text end energy conservation
improvement.

new text begin Programs for efficient fuel-switching improvements; natural gas
utilities. new text end