HF 2532

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to energy; modifying provisions relating to
renewable energy; amending Minnesota Statutes 2004,
section 216B.1691.

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

Section 1.

Minnesota Statutes 2004, section 216B.1691, is
amended to read:

216B.1691 RENEWABLE ENERGY STANDARDS AND OBJECTIVES.

Subdivision 1.

Definitions.

(a) Unless otherwise
specified in law, "eligible energy technology" means an energy
technology that:

(1) generates electricity from the following renewable
energy sources: solar; wind; hydroelectric with a capacity of
less than 60 megawatts; hydrogen, provided that after January 1,
2010, the hydrogen must be generated from the resources listed
in this clause; or biomass, which includes 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; and

(2) was not mandated by Laws 1994, chapter 641, or by
commission order issued pursuant to that chapter prior to August
1, 2001.

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

(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.

Subd. 2.

Eligible energy objectives.

(a) Each electric
utility shall make a good faith effort to generate or procure
sufficient electricity generated by an eligible energy
technology to provide its retail consumers, or the retail
customers of a distribution utility to which the electric
utility provides wholesale electric service, so that:

(1) commencing in 2005, at least one percent of the
electric utility's total retail electric sales is generated by
eligible energy technologies;

(2) the amount provided under clause (1) is increased by
one percent of the utility's total retail electric sales each
year until 2015 2010; and

(3) ten five percent of the electric energy provided to
retail customers in Minnesota by 2010 is generated by eligible
energy technologies.

(b) Of the eligible energy technology generation required
under paragraph (a), clauses (1) and (2), not less than 0.5
percent of the energy must be generated by biomass energy
technologies, including 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, by 2005. By 2010, one percent of the eligible
technology generation required under paragraph (a), clauses (1)
and (2), shall be generated by biomass energy technologies. An
energy recovery facility used to capture the heat value of mixed
municipal solid waste or refuse-derived fuel from mixed
municipal solid waste, with a power sales agreement in effect as
of May 29, 2003, that terminates after December 31, 2010, does
not qualify as an eligible energy technology unless the
agreement provides for rate adjustment in the event the facility
qualifies as a renewable energy source.

Subd. 2a.

Eligible energy standard.

Each electric
utility shall generate or procure sufficient electricity
generated by an eligible energy technology to provide its retail
customers, or the retail customers 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 is generated by eligible
energy technologies by the end of the year indicated:

(1) 2013 ten percent

(2) 2015 15 percent

(3) 2020 20 percent

To be counted toward satisfying the standard, energy must
be generated by a facility originally placed in service after
January 1, 1975. The commission must delay or modify the
standard for an electric utility if it finds that compliance
with a standard is not in the public interest because compliance
will either produce undesirable impacts on the reliability of
the utility's system or on the utility's ratepayers or if it
finds that compliance is not technically feasible. In
determining whether a standard must be delayed or modified, the
commission must consider an electric utility's load growth as
forecasted in its integrated resource plan filed under section
216B.2422. The standard is both an individual electric utility
standard and a statewide standard so that by the end of 2020 at
least 20 percent of the electric energy provided to retail
customers in Minnesota is generated by eligible energy
technologies.

(c) Subd. 2b.[COMMISSION ORDER.] By June 1, 2004, and as
needed thereafter, the commission shall issue an order detailing
the criteria and standards by which it will measure an electric
utility's efforts to meet the renewable energy objectives and
standards of this section to determine whether the utility is
making the required good faith effort and is meeting the
standards. 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.

(d) In its order under paragraph (c), the commission shall
provide for a weighted scale of how energy produced by various
eligible energy technologies shall count toward a utility's
objective. In establishing this scale, the commission shall
consider the attributes of various technologies and fuels, and
shall establish a system that grants multiple credits toward the
objectives for those technologies and fuels the commission
determines is in the public interest to encourage.

Subd. 3.

Utility plans filed with commission.

(a) Each
electric utility shall report on its plans, activities, and
progress with regard to these objectives and standards 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 that the utility is
making the required good faith 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 good faith objective and standards;

(2) efforts taken to meet the objective and standards;

(3) any obstacles encountered or anticipated in meeting the
objective or standards; and

(4) potential solutions to the obstacles.

(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 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.

Subd. 4.

Renewable energy credits.

(a) To facilitate
compliance with this section, the commission, by rule or order,
may establish a program for tradable credits for electricity
generated by an eligible energy technology. In doing so, the
commission shall implement a system that constrains or limits
the cost of credits, taking care to ensure that such a system
does not undermine the market for those credits.

(b) In lieu of generating or procuring energy directly to
satisfy the renewable energy objective and standard of this
section, an electric utility may purchase sufficient renewable
energy credits, issued pursuant to this subdivision, to meet its
objective and standard.

(c) Upon the passage of a renewable energy standard,
portfolio, or objective in a bordering state that includes a
similar definition of eligible energy technology or renewable
energy, the commission may facilitate the trading of renewable
energy credits between states.

Subd. 5.

Technology based on fuel combustion.

(a)
Electricity produced by fuel combustion may only count toward a
utility's objectives or standards if the generation facility:

(1) was constructed in compliance with new source
performance standards promulgated under the federal Clean Air
Act 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 (1), 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 renewable
energy objectives or standards.

Subd. 6.

Electric utility that owns nuclear generation
facility.

(a) An electric utility that owns a nuclear
generation facility, as part of its good faith effort under this
subdivision and subdivision 2, shall deploy an additional 300
megawatts of nameplate capacity of wind energy conversion
systems by 2010, beyond the amount of wind energy capacity to
which the utility is required by law or commission order as of
May 1, 2003. At least 100 megawatts of this capacity are to be
wind energy conversion systems of two megawatts or less, which
shall not be eligible for the production incentive under section
216C.41. To the greatest extent technically feasible and
economic, these 300 megawatts of wind energy capacity are to be
distributed geographically throughout the state. The utility
may opt to own, construct, and operate up to 100 megawatts of
this wind energy capacity, except that the utility may not own,
construct, or operate any of the facilities that are under two
megawatts of nameplate capacity. The deployment of the wind
energy capacity under this subdivision must be consistent with
the outcome of the engineering study required under Laws 2003,
First Special Session chapter 11, article 2, section 21.

(b) The renewable energy objective set forth in subdivision
2 shall be a requirement for the public utility that owns the
Prairie Island nuclear generation plant. The objective is a
requirement subject to resource planning and least-cost planning
requirements in section 216B.2422, unless implementation of the
objective can reasonably be shown to jeopardize the reliability
of the electric system. The least-cost planning analysis must
include the costs of ancillary services and other necessary
generation and transmission upgrades.

(c) Also as part of its good faith effort under this
section, the utility that owns a nuclear generation facility is
to enter into a power purchase agreement by January 1, 2004, for
ten to 20 megawatts of biomass energy and capacity at an
all-inclusive price not to exceed $55 per megawatt-hour, for a
project described in section 216B.2424, subdivision 5, paragraph
(e), clause (2). The project must be operational and producing
energy by June 30, 2005.

Subd. 7.

Compliance.

The commission, on its own motion
or upon petition, may investigate whether an electric utility is
in compliance with its standard obligation under subdivision 2a
and if it finds noncompliance may order the electric utility to
construct facilities or purchase credits 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 up to the electric utility's
estimated cost of compliance.