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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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Engrossments

Introduction Pdf Posted on 02/21/2013

Current Version - as introduced

A bill for an act
relating to energy; establishing a solar value rate utilities may pay to owners
of solar photovoltaic systems; establishing a solar energy standard for certain
utilities; making certain solar photovoltaic systems eligible to receive a renewable
energy production incentive payment; establishing an account; requiring studies;
appropriating money;amending Minnesota Statutes 2012, sections 216B.03;
216B.16, by adding a subdivision; 216B.1691, by adding a subdivision; 216B.23,
subdivision 1a; 216B.241, subdivision 5c; 216B.2411, subdivision 3; proposing
coding for new law in Minnesota Statutes, chapters 216B; 216C.

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

Section 1. TITLE.

This act may be cited as the Solar Energy Jobs Act of 2013.

Sec. 2.

Minnesota Statutes 2012, section 216B.03, is amended to read:


216B.03 REASONABLE RATE.

Every rate made, demanded, or received by any public utility, or by any two or
more public utilities jointly, shall be just and reasonable. Rates shall not be unreasonably
preferential, unreasonably prejudicial, or discriminatory, but shall be sufficient, equitable,
and consistent in application to a class of consumers. To the maximum reasonable extent,
the commission shall set rates to encourage energy conservation and renewable energy use
and to further the goals of sections 216B.164, 216B.241, 216B.411, and 216C.05. Any
doubt as to reasonableness should be resolved in favor of the consumer. For rate-making
purposes a public utility may treat two or more municipalities served by it as a single class
wherever the populations are comparable in size or the conditions of service are similar.

Sec. 3.

Minnesota Statutes 2012, section 216B.16, is amended by adding a subdivision
to read:


Subd. 6e.

Solar energy production incentive.

(a) Except as otherwise provided in
this subdivision, all assessments authorized by section 216B.411 incurred in connection
with the solar energy production incentive shall be recognized and included by the
commission in the determination of just and reasonable rates as if the expenses were
directly made or incurred by the utility in furnishing utility service.

(b) The commission shall not include expenses for the solar energy production
incentive in determining just and reasonable electric rates for retail electric service
provided to customers eligible for the low-income electric rate discount authorized by
subdivision 14.

Sec. 4.

[216B.1641] VALUE OF SOLAR RATE.

Subdivision 1.

Definition.

For the purposes of this section, "solar photovoltaic
device" has the meaning given in section 216C.06, subdivision 16, and must meet the
requirements of section 216C.25.

Subd. 2.

Applicability.

(a) This section, as well as any rules adopted by the
commission or the Department of Commerce to implement this section, shall apply:

(1) beginning with the effective date of this section, to the two public utilities
with the highest Minnesota retail electricity sales and the generation and transmission
cooperative with the highest Minnesota wholesale electricity sales; and

(2) beginning July 1, 2015, to all Minnesota electric utilities, including cooperative
electric associations and municipal electric utilities.

(b) Notwithstanding section 216B.164, an owner of a solar photovoltaic device may,
with respect to the purchase price paid by a utility to an owner of a solar photovoltaic device,
elect to be governed under this section or section 216B.164. All other provisions of section
216B.164, except those in subdivision 3 and subdivision 4, paragraphs (a) to (c), shall
apply to an owner of a solar photovoltaic device electing to be governed under this section.

Subd. 3.

Interconnection.

Utilities shall be required to connect with a solar
photovoltaic device whose owner offers to provide available energy or capacity and elects
to be governed under this section.

Subd. 4.

Standard contract.

The commission shall establish a statewide uniform
form of contract that must be used by a purchasing utility and an owner of a solar
photovoltaic device with a capacity greater than 40 kilowatts. The term of a power
purchase agreement entered into under this section must be no less than 20 years.

Subd. 5.

Purchases.

The utility to which an owner of a solar photovoltaic device
electing to be governed under this section is interconnected shall purchase, throughout
the term of the power purchase agreement, all energy and capacity made available by the
owner of the solar photovoltaic device. All purchases must be made at the value of solar
rate determined by the Department of Commerce under this section that is current as of
the date the power purchase agreement is effective.

Subd. 6.

Value of solar rate; calculation.

By October 1, 2013, the Department of
Commerce shall calculate the value of solar rate for each utility subject to the provisions
of this section. The value of solar rate is expressed on a per kilowatt-hour basis and is
equal to the sum of the following components:

(1) line loss savings equal to the value of the average amount of electricity lost
through transmission and distribution when electricity is generated by the utility's nonsolar
photovoltaic generators;

(2) transmission and distribution capacity savings equal to the value of delaying
the need for capital investment in a utility's transmission and distribution system by
contracting to purchase energy from solar photovoltaic devices;

(3) energy savings equal to the reduction in a utility's wholesale energy costs realized
as a result of energy purchases from solar photovoltaic devices;

(4) generation capacity savings equal to the value of the benefit of the capacity
added to the utility's system by solar photovoltaic devices;

(5) fuel price hedge value equal to the value of eliminating price uncertainty
associated with the utility's purchases of fuel for electricity generation;

(6) environmental benefits equal to the premium retail customers are willing to pay
to consume energy produced from renewable resources; and

(7) economic development benefits equal to the net increase in local employment and
taxes generated from the manufacture, operation, and maintenance of solar photovoltaic
devices compared with the same measures associated with nonsolar photovoltaic devices.

Subd. 7.

Value of solar rate; information.

The Department of Commerce shall
solicit information from each utility subject to the provisions of this section to assist it in
calculating the value of solar rate. A utility shall provide the information requested by the
department in a timely fashion.

Subd. 8.

Value of solar rate; process.

The Department of Commerce shall solicit
comments and recommendations from utilities, ratepayers, and other interested parties
regarding the calculation of the value of solar rate.

Subd. 9.

Value of solar rate; adjustments.

By January 1, 2015, and every January
1 thereafter through 2044, the commissioner shall make a determination as to whether
the value of solar rate needs to be adjusted in order to reflect current conditions in energy
markets or changes in the value of the components calculated in subdivision 6. In making
that determination, the commissioner shall solicit comments and recommendations from
interested parties in the same manner as required under subdivision 8. After considering
the comments and recommendations, the commissioner may adjust the value of solar rate.

Subd. 10.

Value of solar rate; billing.

Notwithstanding section 216B.164, an
owner of a solar photovoltaic device who elects to receive the value of solar rate for
electricity generated by the system that is sold to a utility must be:

(1) charged by the utility the applicable rate schedule for sales to that class of
customer for all electricity consumed by the customer;

(2) paid the value of solar rate by the utility for all electricity generated by the
solar photovoltaic device;

(3) provided by the utility with a monthly bill that contains, in addition to the
amounts in clauses (1) and (2), the net amount owed to the utility or net credit realized by
the owner for that month and on a year-to-date basis; and

(4) provided by the utility with a meter that allows for the separate calculation of the
amount of electricity consumed and generated at the property.

Subd. 11.

Commission review; approval.

(a) The commissioner shall submit the
value of solar rate calculated under subdivision 6 and the comments and recommendations
received under subdivisions 7 and 8 to the commission for its review and approval. The
commission shall review the rate and the comments and recommendations and may, at its
discretion, solicit additional comments and recommendations from utilities, ratepayers,
and other interested parties regarding the calculation of the value of solar rate.

(b) By January 1 of 2014, and each January 1 thereafter through 2044, the
commission shall approve or modify the value of solar rate submitted to it by the
commissioner. The commission shall, by order, direct all electric utilities subject to this
section to begin paying the value of solar rate most recently approved by the commission
to owners of solar photovoltaic devices who elect to be paid under this section on the first
day of the first month following the effective date of the order.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 5.

Minnesota Statutes 2012, section 216B.1691, is amended by adding a
subdivision to read:


Subd. 2f.

Solar energy standard.

(a) In addition to the requirements of subdivision
2a, each electric utility shall generate or procure sufficient electricity generated by solar
energy to serve its retail customers in Minnesota or the retail customers of a distribution
utility to which the electric utility provides wholesale electric service, so that at least the
following standard percentages of the electric utility's total retail electric sales to retail
customers in Minnesota are generated by solar energy by the end of the year indicated:

(1)
2016
0.52 percent
(2)
2020
1.56 percent
(3)
2025
4.02 percent
(4)
2030
10.06 percent

(b) The solar energy standard established in this subdivision is subject to all the
provisions of this section governing a utility's standard obligation under subdivision 2a.

(c) Electricity generated by a solar energy project may apply towards a utility's
solar energy standard.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 6.

Minnesota Statutes 2012, section 216B.23, subdivision 1a, is amended to read:


Subd. 1a.

Authority to issue refund.

(a) On determining that a public utility has
charged a rate in violation of this chapter, a commission rule, or a commission order, the
commission, after conducting a proceeding, may require the public utility to refund to its
customers, in a manner approved by the commission, any revenues the commission finds
were collected as a result of the unlawful conduct. Any refund authorized by this section
is permitted in addition to any remedies authorized by section 216B.16 or any other law
governing rates. Exercising authority under this section does not preclude the commission
from pursuing penalties under sections 216B.57 to 216B.61 for the same conduct.

(b) This section must not be construed as allowing:

(1) retroactive ratemaking;

(2) refunds based on claims that prior or current approved rates have been unjust,
unreasonable, unreasonably preferential, discriminatory, insufficient, inequitable, or
inconsistent in application to a class of customers; or

(3) refunds based on claims that approved rates have not encouraged energy
conservation or renewable energy use, or have not furthered the goals of section 216B.164,
216B.241, 216B.411, or 216C.05.

(c) A refund under this subdivision does not apply to revenues collected more than
six years before the date of the notice of the commission proceeding required under this
subdivision.

Sec. 7.

Minnesota Statutes 2012, section 216B.241, subdivision 5c, is amended to read:


Subd. 5c.

Large solar electric generating plant.

(a) For the purpose of this
subdivision:

(1) "project" means a solar electric generation project consisting of arrays of solar
photovoltaic cells with a capacity of up to two megawatts located on the site of a closed
landfill in Olmsted County owned by the Minnesota Pollution Control Agency; and

(2) "cooperative electric association" means a generation and transmission
cooperative electric association that has a member distribution cooperative association to
which it provides wholesale electric service in whose service territory a project is located.

(b) A cooperative electric association may elect to count all of its purchases of
electric energy from a project toward only one of the following:

(1) its energy-savings goal under subdivision 1c; or

(2) its energy objective or solar energy standard under section 216B.1691.

(c) A cooperative electric association may include in its conservation plan purchases
of electric energy from a project. The cost-effectiveness of project purchases may be
determined by a different standard than for other energy conservation improvements
under this section if the commissioner determines that doing so is in the public interest
in order to encourage solar energy. The kilowatt hours of solar energy purchased by a
cooperative electric association from a project may count for up to 33 percent of its one
percent savings goal under subdivision 1c or up to 22 percent of its 1.5 percent savings
goal under that subdivision. Expenditures made by a cooperative association for the
purchase of energy from a project may not be used to meet the revenue expenditure
requirements of subdivisions 1a and 1b.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 8.

Minnesota Statutes 2012, section 216B.2411, subdivision 3, is amended to read:


Subd. 3.

Other provisions.

(a) Electricity generated by a facility constructed with
funds provided under this section and using an eligible renewable energy source may be
counted toward the renewable energy objectives solar energy standard, as applicable, in
section 216B.1691, subject to the provisions of that section.

(b) Two or more entities may pool resources under this section to provide assistance
jointly to proposed eligible renewable energy projects. The entities shall negotiate and
agree among themselves for allocation of benefits associated with a project, such as the
ability to count energy generated by a project toward a utility's renewable energy objectives
solar energy standard, as applicable, under section 216B.1691. The entities shall provide a
summary of the allocation of benefits to the commissioner. A utility may spend funds under
this section for projects in Minnesota that are outside the service territory of the utility.

Sec. 9.

[216B.2413] SOLAR ENERGY PRODUCTION INCENTIVE ACCOUNT.

Subdivision 1.

Definitions.

For the purposes of this section, the terms defined in this
subdivision have the meanings given them.

(a) "Commission" means the Public Utilities Commission.

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

(c) "Department" means the Department of Commerce.

(d) "Gross annual retail electricity sales" means annual electric sales to all retail
customers in a public utility's Minnesota service territory.

(e) "Public utility" has the same meaning as provided in section 216B.02,
subdivision 4.

Subd. 2.

Account established; account management.

A solar energy production
incentive account is established as a separate account in the special revenue fund in the
state treasury. The commissioner of management and budget shall credit to the account
the amounts authorized under this section and appropriations and transfers to the account.
Earnings, such as interest, dividends, and any other earnings arising from account assets,
must be credited to the account. Funds remaining in the account at the end of a fiscal
year are not canceled to the general fund but remain in the account. The commissioner
shall manage the account.

Subd. 3.

Purpose.

The purpose of the account is to pay the solar renewable energy
production incentive to owners of qualified solar photovoltaic devices, including related
administrative costs, under section 216C.411.

Subd. 4.

Assessment.

Beginning January 1, 2014, and each January 1 thereafter
through January 1, 2049, the department shall assess each public utility an amount, not to
exceed 1.33 percent of its gross annual retail electricity sales within the state during the
preceding calendar year, as required to carry out the purpose of section 216C.411. Such
assessments are not subject to the cap on assessments provided by section 216B.62, or
any other law.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 10.

[216C.411] SOLAR ENERGY PRODUCTION INCENTIVE.

Subdivision 1.

Incentive payment; appropriation.

(a) Incentive payments may be
made under this section only to an owner of a solar photovoltaic device who has:

(1) submitted to the commissioner, on a form prescribed by the commissioner, an
application to receive the incentive; and

(2) received from the commissioner in writing a determination that the solar
photovoltaic device qualifies for the incentive.

(b) There is annually appropriated from the solar energy production incentive
account established under section 216B.2413 to the commissioner of commerce sums
sufficient to make the payments required under this section.

Subd. 2.

Eligibility window; payment duration.

(a) Payments may be made
under this section only for electricity generated from a solar photovoltaic device that is
operational and generating electricity from January 1, 2014, through December 31, 2044.

(b) Payment of the incentive begins and runs consecutively from the date the solar
photovoltaic device begins generating electricity.

(c) A solar photovoltaic device may receive payments under this section for a period
of 20 years. No payment may be made under this section for electricity generated after
December 31, 2044.

Subd. 3.

Amount of payment.

(a) An incentive payment is based on the number of
kilowatt hours of electricity generated. The per-kilowatt amount of the payment for each
qualified solar photovoltaic device nameplate capacity category listed below is equal to
the applicable reference price specified in this subdivision minus the value of solar rate
determined by the commissioner of commerce under section 216B.1641.

Nameplate Capacity
Reference Price
Under ten kilowatts
....... cents
ten to 99.9 kilowatts
....... cents
100 to 999.9 kilowatts
....... cents
one megawatt or more
....... cents

(b) By January 1, 2015, and every January 1 thereafter through 2044, the
commissioner shall make a determination as to whether the reference price needs to
be adjusted in order to reflect current conditions in energy markets. In making the
determination, the commissioner shall solicit comments and recommendations from
utilities, ratepayers, and other interested parties regarding the calculation of the reference
price. After considering the comments and recommendations, the commissioner may
adjust the reference price.

(c) For the purposes of this subdivision, "reference price" means the lowest
per-kilowatt price for electricity generated by a qualified solar photovoltaic system the
commissioner determines is sufficient to provide an economic incentive that will result
in the development of aggregate capacity in this state to meet the solar energy standard
established in section 216B.1691, subdivision 2f.

Subd. 4.

Allocation of payments.

... percent of the payments made under this
subdivision shall be allocated to solar photovoltaic devices that are manufactured in
Minnesota. For the purposes of this subdivision, "manufactured in Minnesota" means the
manufacture in this state of solar photovoltaic modules that:

(1) are manufactured at a manufacturing facility that is registered with and authorized
by Underwriters Laboratory (UL), CSA International, or Intertek to manufacture and
apply the UL 1703 certification mark to those solar photovoltaic modules;

(2) bear UL 1703 certification marks from Underwriters Laboratory, CSA
International, Intertek, or an equivalent UL-approved independent certification agency;

(3) involve the material production of solar photovoltaic modules, including the
tabbing, stringing, and lamination processes; or

(4) involve the material production in this state of interconnections of low-voltage
photovoltaic elements that produce the final useful photovoltaic output of the modules.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 11. STUDY OF POTENTIAL FOR SOLAR ENERGY INSTALLATIONS
ON PUBLIC BUILDINGS.

(a) The commissioner of commerce shall contract with an independent consultant
selected through a request for proposal process to produce a report analyzing the potential
for electricity generation resulting from the installation of solar photovoltaic devices on
and adjacent to public buildings in this state. The study must:

(1) determine, for buildings identified under the process initiated in Laws 2001,
chapter 212, article 1, section 3, commonly referred to as the B3 program, the amount
of space available for the installation of solar photovoltaic devices and the maximum
solar electricity generation potential; and

(2) utilize existing data on energy efficiency potential developed under the B3
program and determine how investments in energy efficiency for these buildings could
be combined with solar photovoltaic systems to enhance a building's overall energy
efficiency. The analysis must include a schedule for installing solar photovoltaic systems
on public buildings at a rate of four percent of available space per year and must prioritize
installations that result in the largest benefits with the shortest payback periods.

(b) By January 1, 2014, the commissioner of commerce shall submit a copy of the
report to the chairs and ranking minority members of the legislative committees with
primary jurisdiction over energy policy and state government finance.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 12. SOLAR INTERCONNECTION STUDY.

Each public utility, cooperative association, and municipal utility selling electricity
shall, by November 1, 2013, provide to the commissioner of commerce an assessment
of the capacity available on its electric distribution system for interconnecting solar
photovoltaic devices installed on or adjacent to nonresidential buildings in the utility's
service area. For each such potential interconnection point, the utility must calculate the
maximum capacity of solar photovoltaic devices that could be installed on or adjacent to
nearby nonresidential buildings, the amount of available capacity that could be installed
without upgrading the utility's distribution system, and the cost of the upgrade necessary
to accommodate the installation of the maximum capacity and lesser amounts.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 13. VALUE OF ON-SITE ENERGY STORAGE STUDY.

The commissioner of commerce shall contract with an independent consultant
selected through a request for proposal process to produce a report analyzing the potential
costs and benefits of installing utility-managed energy storage devices in residential and
commercial buildings in this state. The study must:

(1) estimate the potential value of on-site energy storage devices as a
load-management tool to reduce costs for individual customers and for the utility,
including, but not limited to, reductions in energy, particularly peaking, costs, and
capacity costs;

(2) examine the interaction of energy storage devices with on-site solar photovoltaic
devices; and

(3) analyze existing barriers to the installation of on-site energy storage devices by
utilities, and examine strategies and design potential economic incentives to overcome
those barriers.

By January 1, 2014, the commissioner of commerce shall submit the study to the chairs
and ranking minority members of the legislative committees with jurisdiction over energy
policy and finance.

Sec. 14. VALUE OF SOLAR THERMAL STUDY.

The commissioner of commerce shall contract with an independent consultant
selected through a request for proposal process to produce a report analyzing the potential
costs and benefits of expanding the installation of solar thermal projects, as defined in
Minnesota Statutes, section 216B.2411, subdivision 2, in residential and commercial
buildings in this state. The study must examine the potential for solar thermal projects
to reduce heating and cooling costs for individual customers and to reduce costs at the
utility level as well. The study must also analyze existing barriers to the installation of
on-site energy storage devices by utilities, and examine strategies and design potential
economic incentives to overcome those barriers. By January 1, 2014, the commissioner
of commerce shall submit the study to the chairs and ranking minority members of the
legislative committees with jurisdiction over energy policy and finance.

EFFECTIVE DATE.

This section is effective the day following final enactment.

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