HF 3814

as introduced - 86th Legislature (2009 - 2010) Posted on 04/28/2010 12:52pm

A bill for an act
relating to energy; modifying provisions related to electricity generated from
anaerobic digester systems; amending Minnesota Statutes 2008, section
216B.164, subdivisions 3, 4.

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

Section 1.

Minnesota Statutes 2008, section 216B.164, subdivision 3, is amended to
read:

Subd. 3.

Purchases; small facilities.

(a) For a qualifying facility having less than
40-kilowatt capacity, new text begin and for base-load facilities that generate electricity from an anaerobic
digester system, new text end 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 new text begin or a base-load facility that generates electricity from an anaerobic digester
system new text end , compensation to the customer shall be at a per kilowatt-hour rate determined
under paragraph (b) or (c).

(b) 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.

(c) Notwithstanding any provision in this chapter to the contrary, a qualifying facility
having less than 40-kilowatt capacity new text begin or a base-load facility that generates electricity
from an anaerobic digester system, 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.
"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.

(d) If the qualifying 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
having less than 40-kilowatt capacity new text begin and base-load facilities that generate electricity
from an anaerobic digester system new text end may, at the customer's option, elect to be governed by
the provisions of subdivision 4.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2010, and applies to
electricity produced by base-load facilities that generate electricity from anaerobic digester
systems after January 1, 2011.
new text end

Sec. 2.

Minnesota Statutes 2008, section 216B.164, subdivision 4, is amended to read:

Subd. 4.

Purchases; wheeling; costs.

(a) Except as otherwise provided in
paragraph (c), this subdivision shall apply to all qualifying facilities having 40-kilowatt
capacity or more new text begin , except base-load facilities that generate electricity from an anaerobic
digester system, new text end as well as qualifying facilities as defined in subdivision 3 which elect
to be governed by its provisions.

(b) The utility to which the qualifying facility is interconnected shall purchase all
energy and capacity made available by the qualifying facility. The qualifying facility shall
be paid the utility's full avoided capacity and energy costs as negotiated by the parties, as
set by the commission, or as determined through competitive bidding approved by the
commission. The full avoided capacity and energy costs to be paid a qualifying facility
that generates electric power by means of a renewable energy source are the utility's least
cost renewable energy facility or the bid of a competing supplier of a least cost renewable
energy facility, whichever is lower, unless the commission's resource plan order, under
section 216B.2422, subdivision 2, provides that the use of a renewable resource to meet
the identified capacity need is not in the public interest.

(c) For all qualifying facilities having 30-kilowatt capacity or more, new text begin and for a
base-load facility that generates electricity from an anaerobic digester system, new text end the utility
shall, at the qualifying facility's or the utility's request, provide wheeling or exchange
agreements wherever practicable to sell the qualifying facility's output to any other
Minnesota utility having generation expansion anticipated or planned for the ensuing ten
years. The commission shall establish the methods and procedures to insure that except
for reasonable wheeling charges and line losses, the qualifying facility receives the full
avoided energy and capacity costs of the utility ultimately receiving the output.

(d) The commission shall set rates for electricity generated by renewable energy.

new text begin (e) For the purposes of this section, "anaerobic digester system" has the meaning
given in section 216C.41, subdivision 1, paragraph (e).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2010, and applies to
electricity produced by base-load facilities that generate electricity from anaerobic digester
systems after January 1, 2011.
new text end