HF 421

as introduced - 88th Legislature (2013 - 2014) Posted on 02/07/2013 02:10pm

A bill for an act
relating to energy; hydroelectric energy; establishing a revolving loan fund to
facilitate the dredging of lakes to improve water flow for hydroelectric projects;
requiring a report; appropriating money; amending Minnesota Statutes 2012,
section 116C.779, subdivision 1; proposing coding for new law in Minnesota
Statutes, chapter 216C.

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

Section 1.

Minnesota Statutes 2012, section 116C.779, subdivision 1, is amended to
read:

Subdivision 1.

Renewable development account.

(a) The public utility that owns
the Prairie Island nuclear generating plant must transfer to a renewable development
account $500,000 each year for each dry cask containing spent fuel that is located at the
Prairie Island power plant for each year the plant is in operation, and $7,500,000 each
year the plant is not in operation if ordered by the commission pursuant to paragraph (c).
The fund transfer must be made if nuclear waste is stored in a dry cask at the independent
spent-fuel storage facility at Prairie Island for any part of a year.

(b) The public utility that owns the Monticello nuclear generating plant must transfer
to the renewable development account $350,000 each year for each dry cask containing
spent fuel that is located at the Monticello nuclear power plant for each year the plant is
in operation, and $5,250,000 each year the plant is not in operation if ordered by the
commission pursuant to paragraph (c). The fund transfer must be made if nuclear waste
is stored in a dry cask at the independent spent-fuel storage facility at Monticello for
any part of a year.

(c) After discontinuation of operation of the Prairie Island nuclear plant or the
Monticello nuclear plant and each year spent nuclear fuel is stored in dry cask at the
discontinued facility, the commission shall require the public utility to pay $7,500,000 for
the discontinued Prairie Island facility and $5,250,000 for the discontinued Monticello
facility for any year in which the commission finds, by the preponderance of the evidence,
that the public utility did not make a good faith effort to remove the spent nuclear
fuel stored at the facility to a permanent or interim storage site out of the state. This
determination shall be made at least every two years.

(d) Funds in the account may be expended only for any of the following purposes:

(1) to increase the market penetration within the state of renewable electric energy
resources at reasonable costs;

(2) to promote the start-up, expansion, and attraction of renewable electric energy
projects and companies within the state;

(3) to stimulate research and development within the state into renewable electric
energy technologies; and

(4) to develop near-commercial and demonstration scale renewable electric projects
or near-commercial and demonstration scale electric infrastructure delivery projects if
those delivery projects enhance the delivery of renewable electric energy.

The utility that owns a nuclear generating plant is eligible to apply for renewable
development account grants.

(e) Expenditures authorized by this subdivision from the account may be made only
after approval by order of the Public Utilities Commission upon a petition by the public
utility. The commission may approve proposed expenditures, may disapprove proposed
expenditures that it finds to be not in compliance with this subdivision or otherwise
not in the public interest, and may, if agreed to by the public utility, modify proposed
expenditures. The commission may approve reasonable and necessary expenditures
for administering the account in an amount not to exceed five percent of expenditures.
Commission approval is not required for expenditures required under subdivisions 2
and 3, section 116C.7791, or other law.

(f) The account shall be managed by the public utility but the public utility must
consult about account expenditures with an advisory group that includes, among others,
representatives of its ratepayers. The commission may require that other interests be
represented on the advisory group. The advisory group must be consulted with respect to
the general scope of expenditures in designing a request for proposal and in evaluating
projects submitted in response to a request for proposals. In addition to consulting with the
advisory group, the public utility must utilize an independent third-party expert to evaluate
proposals submitted in response to a request for proposal, including all proposals made by
the public utility. A request for proposal for research and development under paragraph (d),
clause (3), may be limited to or include a request to higher education institutions located in
Minnesota for multiple projects authorized under paragraph (d), clause (3). The request for
multiple projects may include a provision that exempts the projects from the third-party
expert review and instead provides for project evaluation and selection by a merit peer
review grant system. The utility should attempt to reach agreement with the advisory
group after consulting with it but the utility has full and sole authority to determine which
expenditures shall be submitted to the commission for commission approval. In the
process of determining request for proposal scope and subject and in evaluating responses
to request for proposals, the public utility must strongly consider, where reasonable,
potential benefit to Minnesota citizens and businesses and the utility's ratepayers.

(g) deleted text begin Funds in the account may not be directly appropriated by the legislature by a law
enacted after January 1, 2012, and unless appropriated by a law enacted prior to that date
may be expended only pursuant to an order of the commission according to this subdivision.
deleted text end

deleted text begin (h) deleted text end A request for proposal for renewable energy generation projects must, when
feasible and reasonable, give preference to projects that are most cost-effective for a
particular energy source.

deleted text begin (i) deleted text end new text begin (h) new text end The public utility must annually, by February 15, report to the chairs and
ranking minority members of the legislative committees with jurisdiction over energy
policy on projects funded by the account for the prior year and all previous years. The
report must, to the extent possible and reasonable, itemize the actual and projected
financial benefit to the public utility's ratepayers of each project.

deleted text begin (j) deleted text end new text begin (i) new text end A project receiving funds from the account must produce a written final report
that includes sufficient detail for technical readers and a clearly written summary for
nontechnical readers. The report must include an evaluation of the project's financial,
environmental, and other benefits to the state and the public utility's ratepayers.

deleted text begin (k) deleted text end new text begin (j) new text end Final reports, any mid-project status reports, and renewable development
account financial reports must be posted online on a public Web site designated by the
commission.

deleted text begin (l) deleted text end new text begin (k) new text end All final reports must acknowledge that the project was made possible in
whole or part by the Minnesota renewable development fund, noting that the fund is
financed by the public utility's ratepayers.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

new text begin [216C.391] DEFINITIONS.
new text end

new text begin (a) For the purposes of section 216C.392, the following terms have the meanings
given them.
new text end

new text begin (b) "Small hydroelectric project" means a project that:
new text end

new text begin (1) is generating electricity from the force of falling water from a lake located in
Minnesota as of the effective date of this act; and
new text end

new text begin (2) has a capacity of less than 100 megawatts.
new text end

new text begin (c) "Dredge" means to remove or excavate sedimentary material, including silt,
gravel, and rocks, from a lakebed.
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. 3.

new text begin [216C.392] HYDROELECTRIC REVITALIZATION REVOLVING
LOAN PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Loan program established. new text end

new text begin A hydroelectric revitalization revolving
loan program account is established in the special revenue fund. Money in the account
is appropriated to the commissioner of commerce to make loans to owners of small
hydroelectric projects as provided in this section and to pay reasonable and actual costs
of administering the loan program. The commissioner of management and budget must
credit to the account all interest and investment income earned on money in the account
and all repayments of principal. Money in the account at the end of a fiscal year does not
cancel to the general fund but remains in the account.
new text end

new text begin Subd. 2. new text end

new text begin Purpose. new text end

new text begin The hydroelectric revitalization revolving loan program is
created to provide financial assistance to owners of small hydroelectric projects to dredge
the bed of the lake in which those projects operate so as to increase the flow of water and
the amount of electricity generated and to extend the life of the project.
new text end

new text begin Subd. 3. new text end

new text begin Applications. new text end

new text begin An owner of a small hydroelectric project applying for a
loan must submit an application to the commissioner of commerce in the manner and
on forms prescribed by the commissioner. An applicant must submit the following
information to the commissioner:
new text end

new text begin (1) the name and address of the owner of the small hydroelectric project and contact
information for the person responsible for loan administration and project implementation;
new text end

new text begin (2) a description of the activities proposed to be carried out with the loan funds;
new text end

new text begin (3) a map depicting where dredging will occur and an estimate of the volume
of material that will be dredged;
new text end

new text begin (4) an estimate of the total cost of the project;
new text end

new text begin (5) the source and amount of any additional funds that will be used for the project;
new text end

new text begin (6) a history of the amount of electricity generated by the project in past years;
new text end

new text begin (7) an estimate of the increase in electric generation that will result from completion
of the project activities;
new text end

new text begin (8) a description of how and where the dredged material will be disposed of; and
new text end

new text begin (9) any additional information requested by the commissioner.
new text end

new text begin Subd. 4. new text end

new text begin Program administration. new text end

new text begin The Department of Commerce shall administer
the hydroelectric revitalization revolving loan project. The commissioner of commerce
shall make loans on a first-come, first-served basis.
new text end

new text begin Subd. 5. new text end

new text begin Loan conditions. new text end

new text begin A loan made under this section must:
new text end

new text begin (1) carry an interest rate of zero; and
new text end

new text begin (2) have a repayment term no longer than 20 years.
new text end

new text begin Subd. 6. new text end

new text begin Loan repayment. new text end

new text begin (a) An applicant receiving a loan under this section must
agree to repay the full amount of the loan as provided under this subdivision.
new text end

new text begin (b) A loan received under this section shall be repaid at the rate of 1.5 cents for
each kilowatt-hour of electricity produced by the small hydroelectric project following
completion of the project activities funded by the loan until the full amount of the loan is
repaid. Payments shall be made quarterly to the commissioner of commerce, who shall
deposit them upon receipt in the account created under subdivision 1.
new text end

new text begin Subd. 7. new text end

new text begin Report. new text end

new text begin The commissioner of commerce shall report by February 1 of
each odd-numbered year to the chairs and ranking minority members of the legislative
committees with primary jurisdiction over energy policy and finance. The report must
identify the small hydroelectric projects that received loans under the program, the amount
of the loans, the total project costs, the amount of loans repaid, an estimate of the increase
in electricity generation realized as a result of the projects, if possible, and any other
information the commissioner of commerce determines would be useful to the legislature.
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. 4. new text begin HYDROELECTRIC REVITALIZATION REVOLVING LOAN
PROGRAM; TRANSFER; APPROPRIATION.
new text end

new text begin (a) Beginning July 1, 2013, and continuing through July 1, 2016, the public utility
that contributes to the account established in Minnesota Statutes, section 116C.779, shall
transfer $5,000,000 from the account to the commissioner of commerce for the purposes
described in section 216C.392. Upon receipt, the commissioner of commerce shall deposit
the transferred funds in the account established in Minnesota Statutes, section 216C.392,
subdivision 1.
new text end

new text begin (b) An amount necessary to pay the full costs of the loan program created in
Minnesota Statutes, section 216C.392, is annually appropriated to the commissioner
of commerce.
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