HF 3542

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to energy; increasing renewable energy production incentives;
providing for early identification and reconnection of heat-disconnected
customers; requiring affordability programs for low-income natural gas heating
customers; modifying provisions for determining required investments in energy
conservation improvements and renewable energy projects; providing for
payments to certain qualified energy facilities; regulating deliveries of fuel oil
and propane gas to low-income customers; exempting certain biomass generation
facility and renewable generation facility from utility regulations; authorizing
use of petroleum violation escrow funds for energy grants; requiring a study;
appropriating money; amending Minnesota Statutes 2004, sections 216B.16,
subdivision 15; 216B.241, subdivision 1a, by adding a subdivision; 216C.37,
subdivision 1; 216C.41, subdivision 4, by adding a subdivision; Minnesota
Statutes 2005 Supplement, sections 116C.779, subdivision 2; 216B.241,
subdivisions 1b, 2; 216C.41, subdivisions 3, 5a; proposing coding for new law
in Minnesota Statutes, chapters 216B; 216C; 325E.

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

Section 1.

Minnesota Statutes 2005 Supplement, 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 $11,840,000 new text end annually must be allocated from available funds in the
account to fund renewable energy production incentives new text begin and grants for qualified on-farm
biogas recovery facilities new text end . deleted text begin $9,400,000 deleted text end new text begin $10,340,000 new text end 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 $500,000 new text end annually, may be used for production incentives for on-farm
biogas recovery facilities that are eligible for the incentive under section 216C.41 deleted text begin or
for production incentives for other renewables, to be provided in the same manner as
under section 216C.41 deleted text end new text begin . 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
$11,840,000 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.

new text begin [216B.096] EARLY IDENTIFICATION OF HEAT-DISCONNECTED
CUSTOMERS.
new text end

new text begin 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 this section, the terms defined in this
subdivision have the meanings given them:
new text end

new text begin (a) "Heat-affected customer" means a residential customer heating with electricity
or natural gas.
new text end

new text begin (b) "Heating season" means the period between October 15 and the following
April 15.
new text end

new text begin (c) "Utility" means a public utility serving residential customers who heat with
electricity or natural gas.
new text end

new text begin Subd. 2. new text end

new text begin Early identification. new text end

new text begin Beginning no later than September 15, a utility
must attempt to contact heat-affected customers in occupied dwellings whose service
was disconnected after the previous heating season to establish payment arrangements
or a reconnection plan in order to restore service. A record must be made of all contacts
and attempted contacts.
new text end

new text begin Subd. 3. new text end

new text begin Report to commission. new text end

new text begin Annually on November 1, a utility must file with
the commission a report specifying the number of heat-affected customers in occupied
dwellings whose service is disconnected on October 1 and on October 15. If heat-affected
customers remain disconnected on October 15, each utility shall file a weekly report,
beginning November 1, specifying the number of heat-affected customers that are or
remain disconnected from service during the current heating season.
new text end

Sec. 3.

Minnesota Statutes 2004, section 216B.16, subdivision 15, is amended to read:

Subd. 15.

Low-income programs.

(a) The commission may consider ability to
pay as a factor in setting utility rates and deleted text begin may deleted text end new text begin must new text end establish programs for low-income
residential ratepayers in order to ensure affordable, reliable, and continuous service
to low-income utility customers. new text begin By September 1, 2006, public utilities that serve
low-income natural gas heating customers, except any public utility operating a
low-income program under subdivision 14, must file an affordability program with the
commission. A program must be implemented upon approval by the commission.
new text end

(b) The purpose of the low-income programs is to lower the percentage of income
that new text begin participating new text end low-income households devote to energy bills, to increase new text begin participating
new text end customer payments, new text begin to decrease or eliminate participating customer arrears, new text end and to lower
the utility costs associated with new text begin participating new text end customer account collection activities.
In ordering low-income programs, the commission may require public utilities to file
program evaluations, including the coordination of other available low-income bill
payment and conservation resources and the effect of the program on:

(1) reducing the percentage of income that participating households devote to energy
bills;

(2) service disconnections; and

(3) customer payment behavior, utility collection costs, arrearages, and bad debt.

new text begin (c) The commission shall issue orders necessary to implement, administer, and
recover the costs, including administrative costs, of a program on a timely basis.
new text end

Sec. 4.

Minnesota Statutes 2004, section 216B.241, subdivision 1a, is amended to read:

Subd. 1a.

Investment, expenditure, and contribution; public utility.

(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:

(1) for a utility that furnishes gas service, 0.5 percent of its gross operating revenues
from service provided in the state;

(2) for a utility that furnishes electric service, 1.5 percent of its gross operating
revenues from service provided in the state; and

(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.

For purposes of this paragraph (a), "gross operating revenues" do not include
revenues from large electric customer facilities exempted by the commissioner under
paragraph (b).

new text begin The gross operating revenue to be used in determining the amount of spending
and investment required under this subdivision is the revenue for the year preceding the
year that a proposed plan is filed with the commissioner. The commissioner may adjust
the spending required after the first or subsequent year of a plan to reflect more recent
available revenue figures.
new text end

(b) The owner of a large electric customer facility may petition the commissioner
to exempt both electric and gas utilities serving the large energy customer facility from
the investment and expenditure requirements of paragraph (a) with respect to retail
revenues attributable to the facility. At a minimum, the petition must be supported by
evidence relating to competitive or economic pressures on the customer and a showing
by the customer of reasonable efforts to identify, evaluate, and implement cost-effective
conservation improvements at the facility. If a petition is filed on or before October 1 of
any year, the order of the commissioner to exempt revenues attributable to the facility can
be effective no earlier than January 1 of the following year. The commissioner shall not
grant an exemption if the commissioner determines that granting the exemption is contrary
to the public interest. The commissioner may, after investigation, rescind any exemption
granted under this paragraph upon a determination that cost-effective energy conservation
improvements are available at the large electric customer facility. For the purposes of this
paragraph, "cost-effective" means that the projected total cost of the energy conservation
improvement at the large electric customer facility is less than the projected present value
of the energy and demand savings resulting from the energy conservation improvement.
For the purposes of investigations by the commissioner under this paragraph, the owner
of any large electric customer facility shall, upon request, provide the commissioner
with updated information comparable to that originally supplied in or with the owner's
original petition under this paragraph.

(c) 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.

(d) A public utility or owner of a large electric customer facility may appeal
a decision of the commissioner under paragraph (b) or (c) to the commission under
subdivision 2. In reviewing a decision of the commissioner under paragraph (b) or (c),
the commission shall rescind the decision if it finds that the required investments or
spending will:

(1) not result in cost-effective energy conservation improvements; or

(2) otherwise not be in the public interest.

(e) Each utility shall determine what portion of the amount it sets aside for
conservation improvement will be used for conservation improvements under subdivision
2 and what portion it will contribute to the energy and conservation account established in
subdivision 2a. A public utility may propose to the commissioner to designate that all
or a portion of funds contributed to the account established in subdivision 2a be used
for research and development projects that can best be implemented on a statewide
basis. Contributions must be remitted to the commissioner by February 1 of each year.
Nothing in this subdivision prohibits a public utility from spending or investing for energy
conservation improvement more than required in this subdivision.

Sec. 5.

Minnesota Statutes 2005 Supplement, section 216B.241, subdivision 1b,
is amended to read:

Subd. 1b.

Conservation improvement by cooperative association or
municipality.

(a) This subdivision applies to:

(1) a cooperative electric association that provides retail service to its members;

(2) a municipality that provides electric service to retail customers; and

(3) a municipality with gross operating revenues in excess of $5,000,000 from sales
of natural gas to retail customers.

(b) Each cooperative electric association and municipality subject to this subdivision
shall spend and invest for energy conservation improvements under this subdivision
the following amounts:

(1) for a municipality, 0.5 percent of its gross operating revenues from the sale of
gas and 1.5 percent of its gross operating revenues from the sale of electricity, excluding
gross operating revenues from electric and gas service provided in the state to large
electric customer facilities; and

(2) for a cooperative electric association, 1.5 percent of its gross operating revenues
from service provided in the state, excluding gross operating revenues from service
provided in the state to large electric customer facilities indirectly through a distribution
cooperative electric association.

new text begin The gross operating revenue to be used in determining the amount of spending
and investment required under this subdivision is the revenue for the year preceding the
year that a proposed plan is filed with the commissioner. The commissioner may adjust
the spending required after the first or subsequent year of a plan to reflect more recent
available revenue figures.
new text end

(c) Each municipality and cooperative electric association subject to this subdivision
shall identify and implement energy conservation improvement spending and investments
that are appropriate for the municipality or association, except that a municipality or
association may not spend or invest for energy conservation improvements that directly
benefit a large electric customer facility for which the commissioner has issued an
exemption under subdivision 1a, paragraph (b).

(d) Each municipality and cooperative electric association subject to this subdivision
may spend and invest annually up to ten percent of the total amount required to be spent
and invested on energy conservation improvements under this subdivision on research
and development projects that meet the definition of energy conservation improvement
in subdivision 1 and that are funded directly by the municipality or cooperative electric
association.

(e) Load-management activities that do not reduce energy use but that increase the
efficiency of the electric system may be used to meet 50 percent of the conservation
investment and spending requirements of this subdivision.

(f) A generation and transmission cooperative electric association that provides
energy services to cooperative electric associations that provide electric service at retail to
consumers may invest in energy conservation improvements on behalf of the associations
it serves and may fulfill the conservation, spending, reporting, and energy savings goals on
an aggregate basis. A municipal power agency or other not-for-profit entity that provides
energy service to municipal utilities that provide electric service at retail may invest in
energy conservation improvements on behalf of the municipal utilities it serves and may
fulfill the conservation, spending, reporting, and energy savings goals on an aggregate
basis, under an agreement between the municipal power agency or not-for-profit entity
and each municipal utility for funding the investments.

(g) At least every four years, on a schedule determined by the commissioner, each
municipality or cooperative shall file an overview of its conservation improvement plan
with the commissioner. With this overview, the municipality or cooperative shall also
provide an evaluation to the commissioner detailing its energy conservation improvement
spending and investments for the previous period. The evaluation must briefly describe
each conservation program and must specify the energy savings or increased efficiency in
the use of energy within the service territory of the utility or association that is the result
of the spending and investments. The evaluation must analyze the cost-effectiveness
of the utility's or association's conservation programs, using a list of baseline energy
and capacity savings assumptions developed in consultation with the department.
The commissioner shall review each evaluation and make recommendations, where
appropriate, to the municipality or association to increase the effectiveness of conservation
improvement activities. Up to three percent of a utility's conservation spending obligation
under this section may be used for program pre-evaluation, testing, and monitoring and
program evaluation. The overview and evaluation filed by a municipality with less than
60,000,000 kilowatt hours in annual retail sales of electric service may consist of a letter
from the governing board of the municipal utility to the department providing the amount
of annual conservation spending required of that municipality and certifying that the
required amount has been spent on conservation programs pursuant to this subdivision.

(h) The commissioner shall also review each evaluation for whether a portion of the
money spent on residential conservation improvement programs is devoted to programs
that directly address the needs of renters and low-income persons unless an insufficient
number of appropriate programs are available. For the purposes of this subdivision and
subdivision 2, "low-income" means an income at or below 50 percent of the state median
income.

(i) As part of its spending for conservation improvement, a municipality or
association may contribute to the energy and conservation account. A municipality or
association may propose to the commissioner to designate that all or a portion of funds
contributed to the account be used for research and development projects that can best
be implemented on a statewide basis. Any amount contributed must be remitted to the
commissioner by February 1 of each year.

(j) A municipality may spend up to 50 percent of its required spending under this
section to refurbish an existing district heating or cooling system. This paragraph expires
July 1, 2007. new text begin After July 1, 2007, and until July 1, 2011, expenditures made to refurbish
an existing heating or cooling system are considered to be load-management activities
under paragraph (e).
new text end

Sec. 6.

Minnesota Statutes 2005 Supplement, section 216B.241, subdivision 2, is
amended to read:

Subd. 2.

Programs.

(a) The commissioner may require public utilities 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. The required programs must cover no more than a four-year period. Public
utilities shall file conservation improvement plans by June 1, on a schedule determined
by order of the commissioner, but at least every four years. Plans received by a public
utility by June 1 must be approved or approved as modified by the commissioner by
December 1 of that same year. The commissioner shall give special consideration and
encouragement to programs that bring about significant net savings through the use of
energy-efficient lighting. The commissioner shall evaluate the program 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 choice, by consumers participating in the
program, 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.

(b) The commissioner may require a utility 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. The
commissioner shall nevertheless ensure that every public utility operate one or more
programs under periodic review by the department.

(c) Each public utility subject to subdivision 1a may spend and invest annually up to
ten percent of the total amount required to be spent and invested on energy conservation
improvements under this section by the utility on research and development projects
that meet the definition of energy conservation improvement in subdivision 1 and that
are funded directly by the public utility.

(d) A public utility may not spend for or invest in energy conservation improvements
that directly benefit a large electric customer facility for which the commissioner has
issued an exemption pursuant to subdivision 1a, paragraph (b). The commissioner shall
consider and may require a utility to undertake a program suggested by an outside source,
including a political subdivision or a nonprofit or community organization.

(e) The commissioner may, by order, establish a list of programs that may be
offered as energy conservation improvements by a public utility, municipal utility,
cooperative electric association, or other entity providing conservation services pursuant
to this section. The list of programs may include rebates for high-efficiency appliances,
rebates or subsidies for high-efficiency lamps, small business energy audits, and building
recommissioning. The commissioner may, by order, change this list to add or subtract
programs as the commissioner determines is necessary to promote efficient and effective
conservation programs.

(f) The commissioner shall ensure that a portion of the money spent on residential
conservation improvement programs is devoted to programs that directly address the
needs of deleted text begin renters and deleted text end low-income persons, deleted text begin in proportion to the amount the utility has
historically spent on such programs based on the most recent three-year average relative to
the utility's total conservation spending under this section, unless an insufficient number
of appropriate programs are available. deleted text end new text begin including low-income renters. In approving
spending and energy savings goals for conservation improvement programs targeted to
low-income persons, the commissioner shall consider historic spending levels, the number
of participating households, and energy savings achieved under these programs targeted
to low-income persons and the number of low-income persons residing in the utility's
service area. A utility that furnishes gas service must spend at least 0.2 percent of its
gross operating revenues from service provided to residential customers in this state on
conservation improvement programs targeted to low-income persons.
new text end

(g) A utility, a political subdivision, or a nonprofit or community organization
that has suggested a program, the attorney general acting on behalf of consumers and
small business interests, or a utility customer that has suggested a 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 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 a program is not in the public interest.

(h) The commissioner may order a public utility to include, with the filing of the
utility's proposed conservation improvement plan under paragraph (a), the results of an
independent audit of the 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 utility. The audit must specify the energy savings or increased efficiency in the use
of energy within the service territory of the utility that is the result of the spending and
investments. The audit must evaluate the cost-effectiveness of the utility's conservation
programs.

(i) Up to three percent of a utility's conservation spending obligation under this
section may be used for program pre-evaluation, testing, and monitoring and program
audit and evaluation.

Sec. 7.

Minnesota Statutes 2004, 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 Up to five percent of a utility's conservation
spending obligation under this section may be used for a project located in this state that
produces electricity from an eligible energy technology as defined in section 216B.1691,
subdivision 1, paragraph (a), clauses (1) and (2), provided that:
new text end

new text begin (1) the project is 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 (2) the project produces electricity continuously at an essentially constant rate; and
new text end

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

Sec. 8.

Minnesota Statutes 2004, section 216C.37, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

In this section:

(a) "Commissioner" means the commissioner of commerce.

(b) "Energy conservation investments" means all capital expenditures that are
associated with conservation measures identified in an energy project study, new text begin including
renewable energy measures, new text end and that have a ten-year or less payback period.

(c) "Municipality" means any county, statutory or home rule charter city, town,
school district, or any combination of those units operating under an agreement to jointly
undertake projects authorized in this section.

(d) "Energy project study" means a study of one or more energy-related capital
improvement projects analyzed in sufficient detail to support a financing application. At a
minimum, it must include one year of energy consumption and cost data, a description
of existing conditions, a description of proposed conditions, a detailed description of the
costs of the project, and calculations sufficient to document the proposed energy savings.

Sec. 9.

Minnesota Statutes 2005 Supplement, section 216C.41, subdivision 3, is
amended to read:

Subd. 3.

Eligibility window.

new text begin (a) Except as provided in subdivision 3a, new text end payments
may be made under this section only for electricity generated:

(1) from a qualified hydroelectric facility that is operational and generating
electricity before December 31, deleted text begin 2007 deleted text end new text begin 2009 new text end ;

(2) from a qualified wind energy conversion facility that is operational and
generating electricity before January 1, 2007 new text begin ; or, from a qualified wind energy conversion
facility that is owned by a school district and that begins generating electricity after
January 1, 2007, and before January 1, 2012 new text end ; or

(3) from a qualified on-farm biogas recovery facility from July 1, 2001, through
December 31, 2017.

new text begin (b) The provisions of section 123B.02, subdivision 21, apply to wind energy
conversion systems owned by school districts eligible to receive payments under this
subdivision.
new text end

Sec. 10.

Minnesota Statutes 2004, section 216C.41, is amended by adding a
subdivision to read:

new text begin Subd. 3a. new text end

new text begin Payments for gas production. new text end

new text begin A qualified on-farm biogas recovery
facility is eligible to receive renewable energy production incentives if it produces gas.
The amount of the incentive paid to a qualified on-farm biogas recovery facility shall be
equivalent, on a per million Btu basis, to 1.5 cents per kilowatt hour, as determined by the
Department of Commerce. No qualified on-farm biogas recovery facility may receive an
annual incentive payment in excess of $250,000.
new text end

Sec. 11.

Minnesota Statutes 2004, section 216C.41, subdivision 4, is amended to read:

Subd. 4.

Payment period.

(a) A facility may receive payments under this section for
a ten-year period. No payment under this section may be made for electricity generated:

(1) by a qualified hydroelectric facility after December 31, deleted text begin 2017 deleted text end new text begin 2019 new text end ;

(2) by a qualified wind energy conversion facility after December 31, 2017 new text begin , except
that a qualified wind energy conversion facility owned by a school district may receive
payments until December 31, 2022 new text end ; or

(3) by a qualified on-farm biogas recovery facility after December 31, 2015.

(b) The payment period begins and runs consecutively from the date the facility
begins generating electricity or, in the case of refurbishment of a hydropower facility, after
substantial repairs to the hydropower facility dam funded by the incentive payments are
initiated.

Sec. 12.

Minnesota Statutes 2005 Supplement, section 216C.41, subdivision 5a,
is amended to read:

Subd. 5a.

Renewable development account.

The Department of Commerce
shall authorize payment of the renewable energy production incentive to wind energy
conversion systems for 200 megawatts of nameplate capacity new text begin , and for an additional 20
megawatts of nameplate capacity for wind energy conversion systems owned by school
districts that begin generating electricity after January 1, 2007, new text end and to on-farm biogas
recovery facilities. Payment of the incentive shall be made from the renewable energy
development account as provided under section 116C.779, subdivision 2.

Sec. 13.

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 (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 shall
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 shall be made by a
qualified owner to the commissioner on a form the commissioner prescribes by rule. The
commissioner shall 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 shall adopt rules necessary to implement this
section. The rules shall 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 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. 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 as part of the utility's good faith effort to meet its renewable energy
objective under section 216B.1691, subdivision 2.
new text end

new text begin Subd. 8. 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. 14.

new text begin [325E.027] LOW-INCOME CUSTOMERS; DELIVERED HEATING
FUEL VENDOR'S OBLIGATION.
new text end

new text begin A dealer or distributor of liquid propane gas or number 1 or number 2 fuel oil may
not refuse to deliver liquid propane gas or number 1 or number 2 fuel oil within their
normal delivery area to any person who receives direct grants under the low-income
home energy assistance program if that person has requested delivery, the dealer or
distributor has product available, and the person requesting delivery is capable of making
full payment at the time of delivery and is not in arrears regarding any previous fuel
purchase from that dealer or distributor. A distributor or dealer making delivery to a
person receiving direct grants from the low-income home energy assistance program may
not charge that person any additional costs or fees that would not be charged to any other
customer and shall make available to that person any discount programs on the same basis
as the dealer or distributor makes available to any other customer.
new text end

Sec. 15. new text begin BIOMASS GENERATION FACILITY AGREEMENT.
new text end

new text begin The Department of Commerce may facilitate the development of an agreement
between the owners of a biomass-fueled electric generation facility located in Scott
County and the electric utility in whose service area the facility is located. The facility
must be adjacent to an agricultural product processing plant that uses heat from the
biomass facility in its production process. Electricity produced by the biomass-fueled
electric generation facility must be used only for the operations of the owners of the
biomass facility and for wholesale sales.
new text end

Sec. 16. new text begin ETHANOL PLANT; RENEWABLE GENERATION FACILITY
CLARIFICATION.
new text end

new text begin Consistent with Minnesota Statutes, section 216B.02, subdivision 4, which provides
that no person shall be deemed a public utility if it produces or furnishes service to less
than 25 persons, the owner and operator of an electric generation facility, which is located
in Faribault County and consists of two wind turbines, adjacent to an ethanol plant,
is not a public utility if the electricity produced by the turbines is used solely for the
operations of the ethanol plant. The providing of electric service by those two turbines
to the ethanol plant does not require the consent of the electric utility in whose service
area the plant is located.
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. new text begin PETROLEUM VIOLATION ESCROW FUNDS.
new text end

new text begin 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 may also be used for energy grants to those entities.
new text end

Sec. 18. new text begin PROMOTING CONSERVATION THROUGH UTILITY RATES;
STUDY.
new text end

new text begin The Legislative Electric Energy Task Force must study the issue of the use of
utility rates as an incentive to conservation, including the separation of utility revenues
from sales. The study may include both gas and electric utility rates. The task force may
contract for all or part of the study, including contracting with other state agencies. The
study must be completed by January 15, 2007.
new text end