HF 2246

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to energy; amending allocations from the renewable development
account for renewable energy production incentive payments and grants;
establishing ownership criteria for projects to contribute to a utility's renewable
energy standard; requiring a proportion of conservation improvement program
funds to be spent on renewable energy projects; establishing rebates for home
furnaces burning biomass; requiring electric cooperatives and municipal
utilities to transfer a proportion of conservation improvement program funds
to the University of Minnesota; making landfill gas and gas generated from
anaerobic digesters eligible for renewable energy production incentive payments;
establishing a grant program for on-farm anaerobic digesters; establishing a
rebuttable presumption that a wind energy conversion system is not a public or
private nuisance two years after it begins operations; directing that petroleum
violation escrow funds be used for grants to K-12 schools to develop conservation
and renewable energy projects; appropriating money; amending Minnesota
Statutes 2006, sections 116C.779, subdivision 2; 216B.1691, as amended, by
adding a subdivision; 216B.241, subdivision 6, by adding subdivisions; 216C.41,
subdivisions 1, 2, 3; proposing coding for new law in Minnesota Statutes,
chapters 216C; 561.

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

Section 1.

Minnesota Statutes 2006, section 116C.779, subdivision 2, is amended to
read:

Subd. 2.

Renewable energy production incentive.

(a) Until January 1, 2018, up to
deleted text begin $10,900,000 deleted text end new text begin $11,400,000 new text end annually must be allocated from available funds in the account
to fund renewable energy production incentives. $9,400,000 of this annual amount is for
incentives for up to 200 megawatts of electricity generated by wind energy conversion
systems that are eligible for the incentives under section 216C.41. deleted text begin The balance of this
amount, deleted text end Up to deleted text begin $1,500,000 deleted text end new text begin $1,000,000 new text end annually deleted text begin , deleted text end may be used for production incentives for
on-farm biogas recovery facilities new text begin and landfill gas recovery facilities new text end that are eligible for
the incentive under section 216C.41 or for production incentives for other renewables, to
be provided in the same manner as under section 216C.41. new text begin Of this amount, no more than
$500,000 may be used for production incentives for landfill gas recovery facilities. Up
to $1,000,000 may be used for grants for qualified on-farm biogas recovery facilities as
provided in section 216C.42. new text end Any portion of the deleted text begin $10,900,000 deleted text end new text begin $11,400,000 new text end not expended
in any calendar year for the incentive is available for other spending purposes under this
section. This subdivision does not create an obligation to contribute funds to the account.

(b) The Department of Commerce shall determine eligibility of projects under
section 216C.41 for the purposes of this subdivision. At least quarterly, the Department of
Commerce shall notify the public utility of the name and address of each eligible project
owner and the amount due to each project under section 216C.41. The public utility shall
make payments within 15 working days after receipt of notification of payments due.

Sec. 2.

Minnesota Statutes 2006, section 216B.1691, as amended by Laws 2007,
chapter 3, section 1, is amended by adding a subdivision to read:

new text begin Subd. 2e. new text end

new text begin Project location; ownership. new text end

new text begin Electricity generated by an eligible energy
technology must meet the following conditions in order to be counted toward satisfying a
utility's standard obligation under subdivision 2a:
new text end

new text begin (1) at least 50 percent of the electricity must be generated in Minnesota; and
new text end

new text begin (2) at least 25 percent of the electricity generated in Minnesota and in a state other
than Minnesota must be owned by a qualifying owner as defined in section 216B.1612,
subdivision 2, paragraph (c).
new text end

Sec. 3.

Minnesota Statutes 2006, section 216B.241, is amended by adding a
subdivision to read:

new text begin Subd. 2c. new text end

new text begin Renewable energy projects. new text end

new text begin A utility must spend five percent, and
may spend up to ten percent, of its conservation spending obligation under this section
to develop one or more projects located in this state that:
new text end

new text begin (1) produce electricity from an eligible energy technology as defined in section
216B.1691, subdivision 1, paragraph (a), clauses (1) and (2);
new text end

new text begin (2) are eligible to be counted toward a utility's renewable energy objective, as
defined in section 216B.1691, subdivision 2, paragraph (a);
new text end

new text begin (3) produce electricity continuously at an essentially constant rate; and
new text end

new text begin (4) are owned by a qualifying owner as defined in section 216B.1612, subdivision 2,
paragraph (c).
new text end

Sec. 4.

Minnesota Statutes 2006, section 216B.241, is amended by adding a
subdivision to read:

new text begin Subd. 2d. new text end

new text begin Homeowner rebates. new text end

new text begin A utility may spend up to ten percent of its
conservation spending obligation under this section to provide rebates to homeowners
who install a heating unit in a dwelling unit in this state that burns shelled corn, trees
or other woody crops, or biomass grown in Minnesota. Rebates may be provided
under this paragraph only for a heating unit purchased after July 1, 2007, that is listed
by Underwriters Laboratories. A rebate must not exceed the lesser of 25 percent of
the purchase and installation costs of the heating unit or $500. For purposes of this
subdivision, "biomass" means agricultural crops, agricultural waste, trees and other woody
crops, and aquatic plant matter that is processed into a solid fuel for use as a heating fuel,
but does not include trees and other woody crops.
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 2006, section 216B.241, subdivision 6, is amended to read:

Subd. 6.

Renewable energy research.

(a) A deleted text begin public deleted text end utility deleted text begin that owns a nuclear
generation facility in the state deleted text end shall spend five percent of the total amount deleted text begin that utility deleted text end new text begin
it new text end is required to spend under this section to support basic and applied research and
demonstration activities at the University of Minnesota Initiative for Renewable Energy
and the Environment for the development of renewable energy sources and technologies.
The utility shall transfer the required amount to the University of Minnesota on or before
July 1 of each year and that annual amount shall be deducted from the amount of money the
utility is required to spend under this section. The University of Minnesota shall transfer
at least ten percent of these funds to at least one rural campus or experiment station.

(b) Research funded under this subdivision shall include:

(1) development of environmentally sound production, distribution, and use of
energy, chemicals, and materials from renewable sources;

(2) processing and utilization of agricultural and forestry plant products and other
bio-based, renewable sources as a substitute for fossil-fuel-based energy, chemicals, and
materials using a variety of means including biocatalysis, biorefining, and fermentation;

(3) conversion of state wind resources to hydrogen for energy storage and
transportation to areas of energy demand;

(4) improvements in scalable hydrogen fuel cell technologies; and

(5) production of hydrogen from bio-based, renewable sources; and sequestration
of carbon.

(c) Notwithstanding other law to the contrary, the utility may, but is not required to,
spend more than two percent of its gross operating revenues from service provided in this
state under this section or section 216B.2411.

(d) This subdivision expires June 30, deleted text begin 2008 deleted text end new text begin 2020 new text end .

Sec. 6.

Minnesota Statutes 2006, section 216C.41, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) new text begin Unless otherwise provided, new text end the definitions in this
subdivision apply to this section.

(b) "Qualified hydroelectric facility" means a hydroelectric generating facility in
this state that:

(1) is located at the site of a dam, if the dam was in existence as of March 31,
1994; and

(2) begins generating electricity after July 1, 1994, or generates electricity after
substantial refurbishing of a facility that begins after July 1, 2001.

(c) "Qualified wind energy conversion facility" means a wind energy conversion
system in this state that:

(1) produces two megawatts or less of electricity as measured by nameplate rating
and begins generating electricity after December 31, 1996, and before July 1, 1999;

(2) begins generating electricity after June 30, 1999, produces two megawatts or
less of electricity as measured by nameplate rating, and is:

(i) owned by a resident of Minnesota or an entity that is organized under the laws
of this state, is not prohibited from owning agricultural land under section 500.24, and
owns the land where the facility is sited;

(ii) owned by a Minnesota small business as defined in section 645.445;

(iii) owned by a Minnesota nonprofit organization;

(iv) owned by a tribal council if the facility is located within the boundaries of
the reservation;

(v) owned by a Minnesota municipal utility or a Minnesota cooperative electric
association; or

(vi) owned by a Minnesota political subdivision or local government, including,
but not limited to, a county, statutory or home rule charter city, town, school district, or
any other local or regional governmental organization such as a board, commission, or
association; or

(3) begins generating electricity after June 30, 1999, produces seven megawatts or
less of electricity as measured by nameplate rating, and:

(i) is owned by a cooperative organized under chapter 308A other than a Minnesota
cooperative electric association; and

(ii) all shares and membership in the cooperative are held by an entity that is not
prohibited from owning agricultural land under section 500.24.

(d) "Qualified on-farm biogas recovery facility" means an anaerobic digester system
that:

(1) is located at the site of an agricultural operation; and

(2) is owned by an entity that is not prohibited from owning agricultural land under
section 500.24 and that owns or rents the land where the facility is located.

(e) "Anaerobic digester system" means a system of components that processes
animal waste based on the absence of oxygen and produces gas used to generate electricity.

new text begin (f) "Qualified landfill gas recovery facility" means a landfill that is operating or
closed, that generates gas from the decomposition of organic matter, and that installs a
system to collect the gas after July 1, 2007.
new text end

Sec. 7.

Minnesota Statutes 2006, section 216C.41, subdivision 2, is amended to read:

Subd. 2.

Incentive payment; appropriation.

(a) Incentive payments must be made
according to this section to (1) a qualified on-farm biogas recovery facility, (2) the owner
or operator of a qualified hydropower facility or qualified wind energy conversion facility
for electric energy generated and sold by the facility, (3) a publicly owned hydropower
facility for electric energy that is generated by the facility and used by the owner of the
facility outside the facility, deleted text begin or deleted text end (4) the owner of a publicly owned dam that is in need of
substantial repair, for electric energy that is generated by a hydropower facility at the
dam and the annual incentive payments will be used to fund the structural repairs and
replacement of structural components of the dam, or to retire debt incurred to fund those
repairs new text begin , or (5) a qualified landfill gas recovery facility new text end .

(b) Payment may only be made upon receipt by the commissioner of commerce of
an incentive payment application that establishes that the applicant is eligible to receive an
incentive payment and that satisfies other requirements the commissioner deems necessary.
The application must be in a form and submitted at a time the commissioner establishes.

(c) There is annually appropriated from the renewable development account
under section 116C.779 to the commissioner of commerce sums sufficient to make the
payments required under this section, in addition to the amounts funded by the renewable
development account as specified in subdivision 5a.

Sec. 8.

Minnesota Statutes 2006, section 216C.41, subdivision 3, is amended to read:

Subd. 3.

Eligibility window.

Payments may be made under this section only for new text begin :
new text end

new text begin (a) new text end electricity generated new text begin from new text end :

(1) deleted text begin from deleted text end a qualified hydroelectric facility that is operational and generating
electricity before December 31, 2009;

(2) deleted text begin from deleted text end a qualified wind energy conversion facility that is operational and
generating electricity before January 1, 2008; or

(3) deleted text begin from deleted text end a qualified on-farm biogas recovery facility from July 1, 2001, through
December 31, 2017 new text begin ; and
new text end

new text begin (b) gas generated from:
new text end

new text begin (1) a qualified on-farm biogas recovery facility from July 1, 2007, through December
31, 2017; or
new text end

new text begin (2) a qualified landfill gas recovery facility from July 1, 2007 through December
31, 2017 new text end .

Sec. 9.

new text begin [216C.42] ON-FARM BIOGAS RECOVERY GRANTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purpose of this section, the following terms
have the meanings given.
new text end

new text begin (a) "Qualified on-farm biogas recovery facility" means an anaerobic digester system
that:
new text end

new text begin (1) is located at the site of an agricultural operation;
new text end

new text begin (2) is owned by an entity that is not prohibited from owning agricultural land under
section 500.24 and that owns or rents the land where the facility is located; and
new text end

new text begin (3) is owned by a qualified owner as defined in section 216B.1612, subdivision 2,
paragraph (c).
new text end

new text begin (b) "Anaerobic digester system" means a system of components that processes
animal waste based on the absence of oxygen and produces gas.
new text end

new text begin (c) "Commissioner" means the commissioner of agriculture.
new text end

new text begin Subd. 2. new text end

new text begin Eligibility. new text end

new text begin Subject to the availability of funds, the commissioner must
approve grants to a qualified owner of a qualified on-farm biogas recovery facility for the
total installed costs of capital investments associated with the facility, up to a maximum of
$500,000.
new text end

new text begin Subd. 3. new text end

new text begin Application. new text end

new text begin Application for a grant under this section must be made by a
qualified owner to the commissioner on a form the commissioner prescribes by rule. The
commissioner must review each application to determine:
new text end

new text begin (1) whether the application is complete;
new text end

new text begin (2) whether the information, calculations, and estimates contained in the application
are appropriate, accurate, and reasonable;
new text end

new text begin (3) whether the project is eligible for a grant;
new text end

new text begin (4) the amount of the grant for which the project is eligible; and
new text end

new text begin (5) other funding sources the owner proposes to use to finance the project in addition
to a grant authorized by this section.
new text end

new text begin An applicant may submit only one grant application each year under this section.
new text end

new text begin Subd. 4. new text end

new text begin Additional information. new text end

new text begin During application review, the commissioner
may request additional information about a proposed project, including information on
project cost. Failure to provide information requested disqualifies a grant application.
new text end

new text begin Subd. 5. new text end

new text begin Public accessibility of grant application data. new text end

new text begin Data contained in an
application submitted to the commissioner for a grant under this section, including
supporting technical documentation, is classified as public data not on individuals under
section 13.02, subdivision 14.
new text end

new text begin Subd. 6. new text end

new text begin Rules. new text end

new text begin The commissioner must adopt rules necessary to implement this
section. The rules must contain at a minimum:
new text end

new text begin (1) standards for project eligibility;
new text end

new text begin (2) criteria for reviewing grant applications; and
new text end

new text begin (3) procedures and guidelines for program monitoring and evaluation.
new text end

new text begin Subd. 7. new text end

new text begin Right of first refusal. new text end

new text begin A utility that provides electric service at retail in
the area where the qualified on-farm biogas recovery facility is located has the right of
first refusal for any gas produced by a qualified on-farm biogas recovery facility that has
received a grant under this section. A utility's right of first refusal expires if:
new text end

new text begin (1) within 45 days after the qualified owner files an incentive payment application
with the commissioner, the utility fails to send a letter of intent to the qualified owner
indicating the utility's willingness to negotiate a purchase agreement; or
new text end

new text begin (2) the parties enter negotiations but fail to reach agreement within 120 days after
the qualified owner files an incentive payment application with the commissioner.
new text end

new text begin Subd. 8. new text end

new text begin Eligibility toward renewable energy objective. new text end

new text begin Any gas generated by
a qualified on-farm biogas recovery facility awarded a grant under this section that is
purchased by a utility may be counted toward the utility's renewable energy objective
under section 216B.1691, subdivision 2.
new text end

new text begin Subd. 9. new text end

new text begin Appropriation. new text end

new text begin Up to $1,000,000 is appropriated annually from the
renewable development account through fiscal year 2015 to the commissioner of
agriculture for the purpose of providing grants to qualified on-farm biogas recovery
facilities.
new text end

Sec. 10.

new text begin [561.20] NUISANCE LIABILITY OF WIND ENERGY CONVERSION
SYSTEMS.
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, "wind energy conversion
system" has the meaning given in section 216C.06.
new text end

new text begin Subd. 2. new text end

new text begin Wind energy conversion system not a nuisance. new text end

new text begin (a) A wind energy
conversion system is not and does not become a private or public nuisance after two years
from the date it begins generating electricity as a matter of law if the system:
new text end

new text begin (1) complies with all applicable federal, state, or county laws, regulations, rules, and
ordinances and any permits issued for it; and
new text end

new text begin (2) operates according to generally accepted practices.
new text end

new text begin (b) For a period of two years from the date it begins generating electricity, there is
a rebuttable presumption that a wind energy conversion system in compliance with the
requirements of paragraph (a) is not a public or private nuisance.
new text end

new text begin (c) This subdivision does not apply:
new text end

new text begin (1) to any prosecution for the crime of public nuisance as provided in section
609.74 or to an action by a public authority to abate a particular condition that is a public
nuisance; or
new text end

new text begin (2) to any enforcement action brought by a local unit of government related to
zoning under chapter 394 or 462.
new text end

new text begin Subd. 3. new text end

new text begin Existing contracts. new text end

new text begin This section must not be construed to invalidate any
contracts or commitments made before the effective date of this section.
new text end

new text begin Subd. 4. new text end

new text begin Severability. new text end

new text begin If a provision of this section, or application thereof to any
person or set of circumstances, is held invalid or unconstitutional, the invalidity does not
affect other provisions or applications of this section that can be given effect without the
invalid provision or application. To that end, the provisions of this section are declared to
be severable.
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. new text begin PETROLEUM VIOLATION ESCROW FUNDS.
new text end

new text begin (a) Petroleum violation escrow funds appropriated to the commissioner of commerce
by Laws 1988, chapter 686, article 1, section 38, for state energy loan programs for
schools, hospitals, and public buildings must be used for grants to K-12 schools to develop
energy conservation or renewable energy projects. A grant may not exceed $500,000. The
commissioner must endeavor to award grants throughout the regions of the state. No more
than one grant may be awarded in a county, unless an insufficient number of applications
is received from schools located in other counties to exhaust available funds.
new text end

new text begin (b) The commissioner of commerce must petition the federal Department of Energy
for a waiver from any federal regulation that limits the proportion of federal funds
expended on state energy programs that may be spent on energy efficiency.
new text end

new text begin (c) For purposes of this subdivision, "renewable energy" means wind, solar,
hydroelectric with a capacity of less than 60 megawatts, geothermal, hydrogen, fuel cells
made from renewable resources, herbaceous crops, agricultural crops, agricultural waste,
and aquatic plant matter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the commissioner of
commerce receives the waiver described in paragraph (b).
new text end