HF 2375

1st Engrossment - 88th Legislature (2013 - 2014) Posted on 03/13/2014 03:44pm

A bill for an act
relating to energy; providing for on-bill loan repayment programs; requiring
long-range emission reduction planning; amending Minnesota Statutes 2012,
sections 216B.241, by adding a subdivision; 216B.2422, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2012, section 216B.241, is amended by adding a
subdivision to read:

new text begin Subd. 5d. new text end

new text begin On-bill loan repayment programs. new text end

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

new text begin (1) "utility" means a public utility, municipal utility, or cooperative electric
association that provides electric or natural gas service to retail customers; and
new text end

new text begin (2) "on-bill loan repayment program" means a program in which a utility collects
on a customer's bill repayment of a loan to the customer by an eligible lender to finance
the customer's investment in eligible energy conservation or renewable energy projects,
and remits loan repayments to the lender.
new text end

new text begin (b) A utility may include as part of its conservation improvement plan an on-bill
loan repayment program to enable a customer to finance eligible projects with installment
loans originated by an eligible lender. An eligible project is one that is either an energy
conservation improvement, or a project that uses an eligible renewable energy source as
that term is defined in section 216B.2411, subdivision 2, paragraph (b), but does not
include mixed municipal solid waste or refuse-derived fuel from mixed municipal solid
waste. An eligible renewable energy source also includes solar thermal technology that
collects the sun's radiant energy and transfers it to a storage medium for distribution as
energy to heat or cool air or water, and meets the requirements of section 216C.25. To be
an eligible lender, a lender must:
new text end

new text begin (1) have a federal or state charter and be eligible for federal deposit insurance; or
new text end

new text begin (2) be a government entity, including an entity established under chapter 469, that
has authority to provide financial assistance for energy efficiency and renewable energy
projects.
new text end

new text begin The commissioner must allow a utility broad discretion in designing and implementing an
on-bill loan repayment program, provided that the program complies with this subdivision.
new text end

new text begin (c) A utility may establish an on-bill loan repayment program for all customer
classes or for a specific customer class.
new text end

new text begin (d) A public utility that implements an on-bill repayment program under this
subdivision must enter into a contract with one or more eligible lenders that complies
with the requirements of this subdivision and contains provisions addressing capital
commitments, loan origination, transfer of loans to the public utility for on-bill loan
repayment, and acceptance of loans returned due to delinquency or default.
new text end

new text begin (e) A public utility's contract with a lender must require the lender to comply with all
applicable federal and state laws, rules, and regulations related to lending practices and
consumer protection, and to conform to reasonable and prudent lending standards.
new text end

new text begin (f) A public utility's contract with a lender may provide:
new text end

new text begin (1) for the public utility to purchase loans from the lender with a condition that the
lender must purchase back loans in delinquency or default; or
new text end

new text begin (2) for the lender to retain ownership of loans with the public utility servicing the
loans through on-bill repayment as long as payments are current.
new text end

new text begin The risk of default must remain with the lender. The lender shall not have recourse against
the public utility except in the event of negligence or breach of contract by the utility.
new text end

new text begin (g) If a public utility customer makes a partial payment on a utility bill that includes
a loan installment, the partial payment must be credited first to the amount owed for
utility service, including taxes and fees. A public utility may not suspend or terminate
a customer's utility service for delinquency or default on a loan that is being serviced
through the public utility's on-bill loan repayment program.
new text end

new text begin (h) An outstanding balance on a loan being repaid under this subdivision is a financial
obligation only of the customer who is signatory to the loan, and not to any subsequent
customer occupying the property associated with the loan. If the utility purchases loans
from the lender as authorized under paragraph (f), clause (1), the utility must return to the
lender a loan not repaid when a customer borrower no longer occupies the property.
new text end

new text begin (i) Costs incurred by a public utility under this subdivision are recoverable as provided
in section 216B.16, subdivision 6b, paragraph (c), including reasonable incremental costs
for billing system modifications necessary to implement and operate an on-bill loan
repayment program and for ongoing costs to operate the program. Approved costs may be
counted toward a utility's conservation spending requirements under subdivisions 1a and
1b. Energy savings from energy conservation improvements resulting from this section
may be counted toward satisfying a utility's energy-savings goals under subdivision 1c.
new text end

new text begin (j) This subdivision does not require a utility to terminate or modify an existing
financing program and does not prohibit a utility from establishing an on-bill financing
program in which the utility provides the financing capital.
new text end

new text begin (k) A municipal utility or cooperative electric association that implements an on-bill
loan repayment program shall design the program to address the issues identified in
paragraphs (d) to (h) as determined by the governing board of the utility or association.
new text end

Sec. 2.

Minnesota Statutes 2012, section 216B.2422, is amended by adding a
subdivision to read:

new text begin Subd. 2c. new text end

new text begin Long-range emission reduction planning. new text end

new text begin Each utility required to file
a resource plan under this section shall include in the filing a narrative identifying and
describing the costs, opportunities, and technical barriers to the utility continuing to make
progress on its system toward achieving the state greenhouse gas emission reduction goals
established in section 216H.02, subdivision 1, and the technologies, alternatives, and steps
the utility is considering to address those opportunities and barriers.
new text end