HF 3026

as introduced - 88th Legislature (2013 - 2014) Posted on 03/13/2014 02:41pm

A bill for an act
relating to energy; utilities; amending rates governing compensation by
utilities for certain small power generators; amending Minnesota Statutes 2013
Supplement, section 216B.164, subdivision 3.

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

Section 1.

Minnesota Statutes 2013 Supplement, section 216B.164, subdivision 3,
is amended to read:

Subd. 3.

Purchases; small facilities.

(a) This paragraph applies to cooperative
electric associations and municipal utilities. For a qualifying facility having less than
40-kilowatt capacity, the customer shall be billed for the net energy supplied by the utility
according to the applicable rate schedule for sales to that class of customer. In the case
of net input into the utility system by a qualifying facility having less than 40-kilowatt
capacity, compensation to the customer shall be at a per kilowatt-hour rate determined
under paragraph (c) or (d).

(b) This paragraph applies to public utilities. For a qualifying facility having less
than 1,000-kilowatt capacity, the customer shall be billed for the net energy supplied by
the utility according to the applicable rate schedule for sales to that class of customer. In
the case of net input into the utility system by a qualifying facility having: (1) more than
40-kilowatt but less than 1,000-kilowatt capacity, compensation to the customer shall be
at a per kilowatt-hour rate determined under paragraph (c); or (2) less than 40-kilowatt
capacity, compensation to the customer shall be at a per-kilowatt rate determined under
paragraph (d).

(c) In setting rates, the commission shall consider the fixed distribution costs to the
utility not otherwise accounted for in the basic monthly charge and shall ensure that the
costs charged to the qualifying facility are not discriminatory in relation to the costs
charged to other customers of the utility. The commission shall set the rates for net
input into the utility system based on avoided costs as defined in the Code of Federal
Regulations, title 18, section 292.101, paragraph (b)(6), the factors listed in Code of
Federal Regulations, title 18, section 292.304, and all other relevant factors.

(d) Notwithstanding any provision in this chapter to the contrary, a qualifying facility
having less than 40-kilowatt capacity new text begin if interconnected with a cooperative association or
municipal utility, or a qualifying facility having less than a 1,000-kilowatt capacity if
interconnected with a public utility, new text end may elect that the compensation for net input by
the qualifying facility into the utility system shall be at the average retail utility energy
rate new text begin , except as provided in paragraph (f) new text end . "Average retail utility energy rate" is defined
as the average of the retail energy rates, exclusive of special rates based on income, age,
or energy conservation, according to the applicable rate schedule of the utility for sales
to that class of customer.

(e) If the qualifying facility or net metered facility is interconnected with a
nongenerating utility which has a sole source contract with a municipal power agency or a
generation and transmission utility, the nongenerating utility may elect to treat its purchase
of any net input under this subdivision as being made on behalf of its supplier and shall
be reimbursed by its supplier for any additional costs incurred in making the purchase.
Qualifying facilities or net metered facilities having less than 1,000-kilowatt capacity if
interconnected to a public utility, or less than 40-kilowatt capacity if interconnected to a
cooperative electric association or municipal utility may, at the customer's option, elect to
be governed by the provisions of subdivision 4.

new text begin (f) A qualifying facility interconnected with a cooperative association or a municipal
utility providing electric service to customers located outside of a metropolitan county, as
defined in section 473.121, may not be paid more than the interconnecting utility's avoided
cost rate under paragraph (c) or subdivision 4, paragraph (b), as applicable.
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