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HF 773

as introduced - 88th Legislature (2013 - 2014) Posted on 02/22/2013 01:35pm

KEY: stricken = removed, old language. underscored = added, new language.

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Introduction Pdf Posted on 02/21/2013

Current Version - as introduced

1.1A bill for an act
1.2relating to energy; establishing a solar value rate utilities may pay to owners
1.3of solar photovoltaic systems; establishing a solar energy standard for certain
1.4utilities; making certain solar photovoltaic systems eligible to receive a renewable
1.5energy production incentive payment; establishing an account; requiring studies;
1.6appropriating money;amending Minnesota Statutes 2012, sections 216B.03;
1.7216B.16, by adding a subdivision; 216B.1691, by adding a subdivision; 216B.23,
1.8subdivision 1a; 216B.241, subdivision 5c; 216B.2411, subdivision 3; proposing
1.9coding for new law in Minnesota Statutes, chapters 216B; 216C.
1.10BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.11    Section 1. TITLE.
1.12This act may be cited as the Solar Energy Jobs Act of 2013.

1.13    Sec. 2. Minnesota Statutes 2012, section 216B.03, is amended to read:
1.14216B.03 REASONABLE RATE.
1.15Every rate made, demanded, or received by any public utility, or by any two or
1.16more public utilities jointly, shall be just and reasonable. Rates shall not be unreasonably
1.17preferential, unreasonably prejudicial, or discriminatory, but shall be sufficient, equitable,
1.18and consistent in application to a class of consumers. To the maximum reasonable extent,
1.19the commission shall set rates to encourage energy conservation and renewable energy use
1.20and to further the goals of sections 216B.164, 216B.241, 216B.411, and 216C.05. Any
1.21doubt as to reasonableness should be resolved in favor of the consumer. For rate-making
1.22purposes a public utility may treat two or more municipalities served by it as a single class
1.23wherever the populations are comparable in size or the conditions of service are similar.

2.1    Sec. 3. Minnesota Statutes 2012, section 216B.16, is amended by adding a subdivision
2.2to read:
2.3    Subd. 6e. Solar energy production incentive. (a) Except as otherwise provided in
2.4this subdivision, all assessments authorized by section 216B.411 incurred in connection
2.5with the solar energy production incentive shall be recognized and included by the
2.6commission in the determination of just and reasonable rates as if the expenses were
2.7directly made or incurred by the utility in furnishing utility service.
2.8(b) The commission shall not include expenses for the solar energy production
2.9incentive in determining just and reasonable electric rates for retail electric service
2.10provided to customers eligible for the low-income electric rate discount authorized by
2.11subdivision 14.

2.12    Sec. 4. [216B.1641] VALUE OF SOLAR RATE.
2.13    Subdivision 1. Definition. For the purposes of this section, "solar photovoltaic
2.14device" has the meaning given in section 216C.06, subdivision 16, and must meet the
2.15requirements of section 216C.25.
2.16    Subd. 2. Applicability. (a) This section, as well as any rules adopted by the
2.17commission or the Department of Commerce to implement this section, shall apply:
2.18(1) beginning with the effective date of this section, to the two public utilities
2.19with the highest Minnesota retail electricity sales and the generation and transmission
2.20cooperative with the highest Minnesota wholesale electricity sales; and
2.21(2) beginning July 1, 2015, to all Minnesota electric utilities, including cooperative
2.22electric associations and municipal electric utilities.
2.23(b) Notwithstanding section 216B.164, an owner of a solar photovoltaic device may,
2.24with respect to the purchase price paid by a utility to an owner of a solar photovoltaic device,
2.25elect to be governed under this section or section 216B.164. All other provisions of section
2.26216B.164, except those in subdivision 3 and subdivision 4, paragraphs (a) to (c), shall
2.27apply to an owner of a solar photovoltaic device electing to be governed under this section.
2.28    Subd. 3. Interconnection. Utilities shall be required to connect with a solar
2.29photovoltaic device whose owner offers to provide available energy or capacity and elects
2.30to be governed under this section.
2.31    Subd. 4. Standard contract. The commission shall establish a statewide uniform
2.32form of contract that must be used by a purchasing utility and an owner of a solar
2.33photovoltaic device with a capacity greater than 40 kilowatts. The term of a power
2.34purchase agreement entered into under this section must be no less than 20 years.
3.1    Subd. 5. Purchases. The utility to which an owner of a solar photovoltaic device
3.2electing to be governed under this section is interconnected shall purchase, throughout
3.3the term of the power purchase agreement, all energy and capacity made available by the
3.4owner of the solar photovoltaic device. All purchases must be made at the value of solar
3.5rate determined by the Department of Commerce under this section that is current as of
3.6the date the power purchase agreement is effective.
3.7    Subd. 6. Value of solar rate; calculation. By October 1, 2013, the Department of
3.8Commerce shall calculate the value of solar rate for each utility subject to the provisions
3.9of this section. The value of solar rate is expressed on a per kilowatt-hour basis and is
3.10equal to the sum of the following components:
3.11(1) line loss savings equal to the value of the average amount of electricity lost
3.12through transmission and distribution when electricity is generated by the utility's nonsolar
3.13photovoltaic generators;
3.14(2) transmission and distribution capacity savings equal to the value of delaying
3.15the need for capital investment in a utility's transmission and distribution system by
3.16contracting to purchase energy from solar photovoltaic devices;
3.17(3) energy savings equal to the reduction in a utility's wholesale energy costs realized
3.18as a result of energy purchases from solar photovoltaic devices;
3.19(4) generation capacity savings equal to the value of the benefit of the capacity
3.20added to the utility's system by solar photovoltaic devices;
3.21(5) fuel price hedge value equal to the value of eliminating price uncertainty
3.22associated with the utility's purchases of fuel for electricity generation;
3.23(6) environmental benefits equal to the premium retail customers are willing to pay
3.24to consume energy produced from renewable resources; and
3.25(7) economic development benefits equal to the net increase in local employment and
3.26taxes generated from the manufacture, operation, and maintenance of solar photovoltaic
3.27devices compared with the same measures associated with nonsolar photovoltaic devices.
3.28    Subd. 7. Value of solar rate; information. The Department of Commerce shall
3.29solicit information from each utility subject to the provisions of this section to assist it in
3.30calculating the value of solar rate. A utility shall provide the information requested by the
3.31department in a timely fashion.
3.32    Subd. 8. Value of solar rate; process. The Department of Commerce shall solicit
3.33comments and recommendations from utilities, ratepayers, and other interested parties
3.34regarding the calculation of the value of solar rate.
3.35    Subd. 9. Value of solar rate; adjustments. By January 1, 2015, and every January
3.361 thereafter through 2044, the commissioner shall make a determination as to whether
4.1the value of solar rate needs to be adjusted in order to reflect current conditions in energy
4.2markets or changes in the value of the components calculated in subdivision 6. In making
4.3that determination, the commissioner shall solicit comments and recommendations from
4.4interested parties in the same manner as required under subdivision 8. After considering
4.5the comments and recommendations, the commissioner may adjust the value of solar rate.
4.6    Subd. 10. Value of solar rate; billing. Notwithstanding section 216B.164, an
4.7owner of a solar photovoltaic device who elects to receive the value of solar rate for
4.8electricity generated by the system that is sold to a utility must be:
4.9(1) charged by the utility the applicable rate schedule for sales to that class of
4.10customer for all electricity consumed by the customer;
4.11(2) paid the value of solar rate by the utility for all electricity generated by the
4.12solar photovoltaic device;
4.13(3) provided by the utility with a monthly bill that contains, in addition to the
4.14amounts in clauses (1) and (2), the net amount owed to the utility or net credit realized by
4.15the owner for that month and on a year-to-date basis; and
4.16(4) provided by the utility with a meter that allows for the separate calculation of the
4.17amount of electricity consumed and generated at the property.
4.18    Subd. 11. Commission review; approval. (a) The commissioner shall submit the
4.19value of solar rate calculated under subdivision 6 and the comments and recommendations
4.20received under subdivisions 7 and 8 to the commission for its review and approval. The
4.21commission shall review the rate and the comments and recommendations and may, at its
4.22discretion, solicit additional comments and recommendations from utilities, ratepayers,
4.23and other interested parties regarding the calculation of the value of solar rate.
4.24(b) By January 1 of 2014, and each January 1 thereafter through 2044, the
4.25commission shall approve or modify the value of solar rate submitted to it by the
4.26commissioner. The commission shall, by order, direct all electric utilities subject to this
4.27section to begin paying the value of solar rate most recently approved by the commission
4.28to owners of solar photovoltaic devices who elect to be paid under this section on the first
4.29day of the first month following the effective date of the order.
4.30EFFECTIVE DATE.This section is effective the day following final enactment.

4.31    Sec. 5. Minnesota Statutes 2012, section 216B.1691, is amended by adding a
4.32subdivision to read:
4.33    Subd. 2f. Solar energy standard. (a) In addition to the requirements of subdivision
4.342a, each electric utility shall generate or procure sufficient electricity generated by solar
4.35energy to serve its retail customers in Minnesota or the retail customers of a distribution
5.1utility to which the electric utility provides wholesale electric service, so that at least the
5.2following standard percentages of the electric utility's total retail electric sales to retail
5.3customers in Minnesota are generated by solar energy by the end of the year indicated:
5.4
(1)
2016
0.52 percent
5.5
(2)
2020
1.56 percent
5.6
(3)
2025
4.02 percent
5.7
(4)
2030
10.06 percent
5.8(b) The solar energy standard established in this subdivision is subject to all the
5.9provisions of this section governing a utility's standard obligation under subdivision 2a.
5.10(c) Electricity generated by a solar energy project may apply towards a utility's
5.11solar energy standard.
5.12EFFECTIVE DATE.This section is effective the day following final enactment.

5.13    Sec. 6. Minnesota Statutes 2012, section 216B.23, subdivision 1a, is amended to read:
5.14    Subd. 1a. Authority to issue refund. (a) On determining that a public utility has
5.15charged a rate in violation of this chapter, a commission rule, or a commission order, the
5.16commission, after conducting a proceeding, may require the public utility to refund to its
5.17customers, in a manner approved by the commission, any revenues the commission finds
5.18were collected as a result of the unlawful conduct. Any refund authorized by this section
5.19is permitted in addition to any remedies authorized by section 216B.16 or any other law
5.20governing rates. Exercising authority under this section does not preclude the commission
5.21from pursuing penalties under sections 216B.57 to 216B.61 for the same conduct.
5.22(b) This section must not be construed as allowing:
5.23(1) retroactive ratemaking;
5.24(2) refunds based on claims that prior or current approved rates have been unjust,
5.25unreasonable, unreasonably preferential, discriminatory, insufficient, inequitable, or
5.26inconsistent in application to a class of customers; or
5.27(3) refunds based on claims that approved rates have not encouraged energy
5.28conservation or renewable energy use, or have not furthered the goals of section 216B.164,
5.29216B.241 , 216B.411, or 216C.05.
5.30    (c) A refund under this subdivision does not apply to revenues collected more than
5.31six years before the date of the notice of the commission proceeding required under this
5.32subdivision.

5.33    Sec. 7. Minnesota Statutes 2012, section 216B.241, subdivision 5c, is amended to read:
6.1    Subd. 5c. Large solar electric generating plant. (a) For the purpose of this
6.2subdivision:
6.3(1) "project" means a solar electric generation project consisting of arrays of solar
6.4photovoltaic cells with a capacity of up to two megawatts located on the site of a closed
6.5landfill in Olmsted County owned by the Minnesota Pollution Control Agency; and
6.6(2) "cooperative electric association" means a generation and transmission
6.7cooperative electric association that has a member distribution cooperative association to
6.8which it provides wholesale electric service in whose service territory a project is located.
6.9(b) A cooperative electric association may elect to count all of its purchases of
6.10electric energy from a project toward only one of the following:
6.11(1) its energy-savings goal under subdivision 1c; or
6.12(2) its energy objective or solar energy standard under section 216B.1691.
6.13(c) A cooperative electric association may include in its conservation plan purchases
6.14of electric energy from a project. The cost-effectiveness of project purchases may be
6.15determined by a different standard than for other energy conservation improvements
6.16under this section if the commissioner determines that doing so is in the public interest
6.17in order to encourage solar energy. The kilowatt hours of solar energy purchased by a
6.18cooperative electric association from a project may count for up to 33 percent of its one
6.19percent savings goal under subdivision 1c or up to 22 percent of its 1.5 percent savings
6.20goal under that subdivision. Expenditures made by a cooperative association for the
6.21purchase of energy from a project may not be used to meet the revenue expenditure
6.22requirements of subdivisions 1a and 1b.
6.23EFFECTIVE DATE.This section is effective the day following final enactment.

6.24    Sec. 8. Minnesota Statutes 2012, section 216B.2411, subdivision 3, is amended to read:
6.25    Subd. 3. Other provisions. (a) Electricity generated by a facility constructed with
6.26funds provided under this section and using an eligible renewable energy source may be
6.27counted toward the renewable energy objectives solar energy standard, as applicable, in
6.28section 216B.1691, subject to the provisions of that section.
6.29(b) Two or more entities may pool resources under this section to provide assistance
6.30jointly to proposed eligible renewable energy projects. The entities shall negotiate and
6.31agree among themselves for allocation of benefits associated with a project, such as the
6.32ability to count energy generated by a project toward a utility's renewable energy objectives
6.33 solar energy standard, as applicable, under section 216B.1691. The entities shall provide a
6.34summary of the allocation of benefits to the commissioner. A utility may spend funds under
6.35this section for projects in Minnesota that are outside the service territory of the utility.

7.1    Sec. 9. [216B.2413] SOLAR ENERGY PRODUCTION INCENTIVE ACCOUNT.
7.2    Subdivision 1. Definitions. For the purposes of this section, the terms defined in this
7.3subdivision have the meanings given them.
7.4(a) "Commission" means the Public Utilities Commission.
7.5(b) "Commissioner" means the commissioner of commerce.
7.6(c) "Department" means the Department of Commerce.
7.7(d) "Gross annual retail electricity sales" means annual electric sales to all retail
7.8customers in a public utility's Minnesota service territory.
7.9(e) "Public utility" has the same meaning as provided in section 216B.02,
7.10subdivision 4.
7.11    Subd. 2. Account established; account management. A solar energy production
7.12incentive account is established as a separate account in the special revenue fund in the
7.13state treasury. The commissioner of management and budget shall credit to the account
7.14the amounts authorized under this section and appropriations and transfers to the account.
7.15Earnings, such as interest, dividends, and any other earnings arising from account assets,
7.16must be credited to the account. Funds remaining in the account at the end of a fiscal
7.17year are not canceled to the general fund but remain in the account. The commissioner
7.18shall manage the account.
7.19    Subd. 3. Purpose. The purpose of the account is to pay the solar renewable energy
7.20production incentive to owners of qualified solar photovoltaic devices, including related
7.21administrative costs, under section 216C.411.
7.22    Subd. 4. Assessment. Beginning January 1, 2014, and each January 1 thereafter
7.23through January 1, 2049, the department shall assess each public utility an amount, not to
7.24exceed 1.33 percent of its gross annual retail electricity sales within the state during the
7.25preceding calendar year, as required to carry out the purpose of section 216C.411. Such
7.26assessments are not subject to the cap on assessments provided by section 216B.62, or
7.27any other law.
7.28EFFECTIVE DATE.This section is effective the day following final enactment.

7.29    Sec. 10. [216C.411] SOLAR ENERGY PRODUCTION INCENTIVE.
7.30    Subdivision 1. Incentive payment; appropriation. (a) Incentive payments may be
7.31made under this section only to an owner of a solar photovoltaic device who has:
7.32(1) submitted to the commissioner, on a form prescribed by the commissioner, an
7.33application to receive the incentive; and
7.34(2) received from the commissioner in writing a determination that the solar
7.35photovoltaic device qualifies for the incentive.
8.1(b) There is annually appropriated from the solar energy production incentive
8.2account established under section 216B.2413 to the commissioner of commerce sums
8.3sufficient to make the payments required under this section.
8.4    Subd. 2. Eligibility window; payment duration. (a) Payments may be made
8.5under this section only for electricity generated from a solar photovoltaic device that is
8.6operational and generating electricity from January 1, 2014, through December 31, 2044.
8.7(b) Payment of the incentive begins and runs consecutively from the date the solar
8.8photovoltaic device begins generating electricity.
8.9(c) A solar photovoltaic device may receive payments under this section for a period
8.10of 20 years. No payment may be made under this section for electricity generated after
8.11December 31, 2044.
8.12    Subd. 3. Amount of payment. (a) An incentive payment is based on the number of
8.13kilowatt hours of electricity generated. The per-kilowatt amount of the payment for each
8.14qualified solar photovoltaic device nameplate capacity category listed below is equal to
8.15the applicable reference price specified in this subdivision minus the value of solar rate
8.16determined by the commissioner of commerce under section 216B.1641.
8.17
Nameplate Capacity
Reference Price
8.18
Under ten kilowatts
....... cents
8.19
ten to 99.9 kilowatts
....... cents
8.20
100 to 999.9 kilowatts
....... cents
8.21
one megawatt or more
....... cents
8.22(b) By January 1, 2015, and every January 1 thereafter through 2044, the
8.23commissioner shall make a determination as to whether the reference price needs to
8.24be adjusted in order to reflect current conditions in energy markets. In making the
8.25determination, the commissioner shall solicit comments and recommendations from
8.26utilities, ratepayers, and other interested parties regarding the calculation of the reference
8.27price. After considering the comments and recommendations, the commissioner may
8.28adjust the reference price.
8.29(c) For the purposes of this subdivision, "reference price" means the lowest
8.30per-kilowatt price for electricity generated by a qualified solar photovoltaic system the
8.31commissioner determines is sufficient to provide an economic incentive that will result
8.32in the development of aggregate capacity in this state to meet the solar energy standard
8.33established in section 216B.1691, subdivision 2f.
8.34    Subd. 4. Allocation of payments. ... percent of the payments made under this
8.35subdivision shall be allocated to solar photovoltaic devices that are manufactured in
8.36Minnesota. For the purposes of this subdivision, "manufactured in Minnesota" means the
8.37manufacture in this state of solar photovoltaic modules that:
9.1(1) are manufactured at a manufacturing facility that is registered with and authorized
9.2by Underwriters Laboratory (UL), CSA International, or Intertek to manufacture and
9.3apply the UL 1703 certification mark to those solar photovoltaic modules;
9.4(2) bear UL 1703 certification marks from Underwriters Laboratory, CSA
9.5International, Intertek, or an equivalent UL-approved independent certification agency;
9.6(3) involve the material production of solar photovoltaic modules, including the
9.7tabbing, stringing, and lamination processes; or
9.8(4) involve the material production in this state of interconnections of low-voltage
9.9photovoltaic elements that produce the final useful photovoltaic output of the modules.
9.10EFFECTIVE DATE.This section is effective the day following final enactment.

9.11    Sec. 11. STUDY OF POTENTIAL FOR SOLAR ENERGY INSTALLATIONS
9.12ON PUBLIC BUILDINGS.
9.13(a) The commissioner of commerce shall contract with an independent consultant
9.14selected through a request for proposal process to produce a report analyzing the potential
9.15for electricity generation resulting from the installation of solar photovoltaic devices on
9.16and adjacent to public buildings in this state. The study must:
9.17(1) determine, for buildings identified under the process initiated in Laws 2001,
9.18chapter 212, article 1, section 3, commonly referred to as the B3 program, the amount
9.19of space available for the installation of solar photovoltaic devices and the maximum
9.20solar electricity generation potential; and
9.21(2) utilize existing data on energy efficiency potential developed under the B3
9.22program and determine how investments in energy efficiency for these buildings could
9.23be combined with solar photovoltaic systems to enhance a building's overall energy
9.24efficiency. The analysis must include a schedule for installing solar photovoltaic systems
9.25on public buildings at a rate of four percent of available space per year and must prioritize
9.26installations that result in the largest benefits with the shortest payback periods.
9.27(b) By January 1, 2014, the commissioner of commerce shall submit a copy of the
9.28report to the chairs and ranking minority members of the legislative committees with
9.29primary jurisdiction over energy policy and state government finance.
9.30EFFECTIVE DATE.This section is effective the day following final enactment.

9.31    Sec. 12. SOLAR INTERCONNECTION STUDY.
9.32Each public utility, cooperative association, and municipal utility selling electricity
9.33shall, by November 1, 2013, provide to the commissioner of commerce an assessment
10.1of the capacity available on its electric distribution system for interconnecting solar
10.2photovoltaic devices installed on or adjacent to nonresidential buildings in the utility's
10.3service area. For each such potential interconnection point, the utility must calculate the
10.4maximum capacity of solar photovoltaic devices that could be installed on or adjacent to
10.5nearby nonresidential buildings, the amount of available capacity that could be installed
10.6without upgrading the utility's distribution system, and the cost of the upgrade necessary
10.7to accommodate the installation of the maximum capacity and lesser amounts.
10.8EFFECTIVE DATE.This section is effective the day following final enactment.

10.9    Sec. 13. VALUE OF ON-SITE ENERGY STORAGE STUDY.
10.10The commissioner of commerce shall contract with an independent consultant
10.11selected through a request for proposal process to produce a report analyzing the potential
10.12costs and benefits of installing utility-managed energy storage devices in residential and
10.13commercial buildings in this state. The study must:
10.14(1) estimate the potential value of on-site energy storage devices as a
10.15load-management tool to reduce costs for individual customers and for the utility,
10.16including, but not limited to, reductions in energy, particularly peaking, costs, and
10.17capacity costs;
10.18(2) examine the interaction of energy storage devices with on-site solar photovoltaic
10.19devices; and
10.20(3) analyze existing barriers to the installation of on-site energy storage devices by
10.21utilities, and examine strategies and design potential economic incentives to overcome
10.22those barriers.
10.23By January 1, 2014, the commissioner of commerce shall submit the study to the chairs
10.24and ranking minority members of the legislative committees with jurisdiction over energy
10.25policy and finance.

10.26    Sec. 14. VALUE OF SOLAR THERMAL STUDY.
10.27The commissioner of commerce shall contract with an independent consultant
10.28selected through a request for proposal process to produce a report analyzing the potential
10.29costs and benefits of expanding the installation of solar thermal projects, as defined in
10.30Minnesota Statutes, section 216B.2411, subdivision 2, in residential and commercial
10.31buildings in this state. The study must examine the potential for solar thermal projects
10.32to reduce heating and cooling costs for individual customers and to reduce costs at the
10.33utility level as well. The study must also analyze existing barriers to the installation of
11.1on-site energy storage devices by utilities, and examine strategies and design potential
11.2economic incentives to overcome those barriers. By January 1, 2014, the commissioner
11.3of commerce shall submit the study to the chairs and ranking minority members of the
11.4legislative committees with jurisdiction over energy policy and finance.
11.5EFFECTIVE DATE.This section is effective the day following final enactment.

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