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HF 880

as introduced - 88th Legislature (2013 - 2014) Posted on 02/25/2013 05:52pm

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

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Engrossments

Introduction Pdf Posted on 02/25/2013

Current Version - as introduced

A bill for an act
relating to energy; increasing and extending the renewable energy standard
to 2030; establishing a solar energy standard; exempting renewable energy
projects from the certificate of need process; requiring uniform reporting of rate
impacts of meeting the renewable energy standard; modifying the treatment
and trading of renewable energy credits;amending Minnesota Statutes 2012,
sections 216B.1645, subdivision 2a; 216B.1691, subdivisions 2a, 2e, 4, by
adding a subdivision; 216B.243, subdivision 8; repealing Minnesota Statutes
2012, section 216B.243, subdivision 9.

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

Section 1.

Minnesota Statutes 2012, section 216B.1645, subdivision 2a, is amended to
read:


Subd. 2a.

Cost recovery for utility's renewable facilities.

(a) A utility may petition
the commission to approve a rate schedule that provides for the automatic adjustment of
charges to recover prudently incurred investments, expenses, or costs associated with
facilities constructed, owned, or operated by a utility to satisfy the requirements of section
216B.1691, provided those facilities were previously approved by the commission under
section 216B.2422 or 216B.243, or were determined by the commission to be reasonable
and prudent under section 216B.243, subdivision 9
. For facilities not subject to review
by the commission under section 216B.2422 or 216B.243, a utility shall petition the
commission for eligibility for cost recovery under this section prior to requesting cost
recovery for the facility. The commission may approve, or approve as modified, a rate
schedule that:

(1) allows a utility to recover directly from customers on a timely basis the costs of
qualifying renewable energy projects, including:

(i) return on investment;

(ii) depreciation;

(iii) ongoing operation and maintenance costs;

(iv) taxes; and

(v) costs of transmission and other ancillary expenses directly allocable to
transmitting electricity generated from a project meeting the specifications of this
paragraph;

(2) provides a current return on construction work in progress, provided that recovery
of these costs from Minnesota ratepayers is not sought through any other mechanism;

(3) allows recovery of other expenses incurred that are directly related to a
renewable energy project, including expenses for energy storage, provided that the utility
demonstrates to the commission's satisfaction that the expenses improve project economics,
ensure project implementation, advance research and understanding of how storage devices
may improve renewable energy projects, or facilitate coordination with the development
of transmission necessary to transport energy produced by the project to market;

(4) allocates recoverable costs appropriately between wholesale and retail customers;

(5) terminates recovery when costs have been fully recovered or have otherwise
been reflected in a utility's rates.

(b) A petition filed under this subdivision must include:

(1) a description of the facilities for which costs are to be recovered;

(2) an implementation schedule for the facilities;

(3) the utility's costs for the facilities;

(4) a description of the utility's efforts to ensure that costs of the facilities are
reasonable and were prudently incurred; and

(5) a description of the benefits of the project in promoting the development of
renewable energy in a manner consistent with this chapter.

Sec. 2.

Minnesota Statutes 2012, section 216B.1691, subdivision 2a, is amended to read:


Subd. 2a.

Eligible energy technology standard.

(a) Except as provided in
paragraph (b), each electric utility shall generate or procure sufficient electricity generated
by an eligible energy technology to provide 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 eligible energy
technologies by the end of the year indicated:

(1)
2012
12 percent
(2)
2016
1719 percent
(3)
2020
20 22 percent
(4)
2025
25 percent.
(5)
2030
40 percent.

(b) An electric utility that owned a nuclear generating facility as of January 1, 2007,
must meet the requirements of this paragraph rather than paragraph (a). An electric utility
subject to this paragraph must generate or procure sufficient electricity generated by
an eligible energy technology to provide its retail customers in Minnesota or the retail
customer of a distribution utility to which the electric utility provides wholesale electric
service so that at least the following percentages of the electric utility's total retail electric
sales to retail customers in Minnesota are generated by eligible energy technologies by the
end of the year indicated:

(1)
2010
15 percent
(2)
2012
18 percent
(3)
2016
25 percent
(4)
2020
30 percent.
(5)
2025
35 percent
(6)
2030
40 percent.

Of the 30 percent in 2020, at least 25 percent must be generated by solar energy
or wind energy conversion systems and the remaining five percent by other eligible
energy technology. Of the 25 percent that must be generated by wind or solar, no more
than one percent may be solar generated and the remaining 24 percent or greater must
be wind generated.

By 2016, at least 20 percent of total retail electric sales must be generated by wind
energy conversion systems. By 2020, at least 25 percent of total retail electric sales must
be generated by wind energy conversion systems.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 3.

Minnesota Statutes 2012, section 216B.1691, subdivision 2e, is amended to read:


Subd. 2e.

Rate impact of standard compliance; report.

Each electric utility must
submit to the commission and the legislative committees with primary jurisdiction over
energy policy a report containing an estimation of the rate impact of activities of the
electric utility necessary to comply with this section. In consultation with the Department
of Commerce, the commission shall determine a uniform reporting system to ensure that
individual utility reports are consistent and comparable, and shall, by order, require each
electric utility subject to this section to use that reporting system.
The rate impact estimate
must be for wholesale rates and, if the electric utility makes retail sales, the estimate
shall also be for the impact on the electric utility's retail rates. Those activities include,
without limitation, energy purchases, generation facility acquisition and construction, and
transmission improvements. An initial report must be submitted within 150 days of May
28, 2011. After the initial report, a report must be updated and submitted as part of each
integrated resource plan or plan modification filed by the electric utility under section
216B.2422. The reporting obligation of an electric utility under this subdivision expires
December 31, 2025, for an electric utility subject to subdivision 2a, paragraph (a), and
December 31, 2020, for an electric utility subject to subdivision 2a, paragraph (b).

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 4.

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


Subd. 2f.

Solar energy standard.

(a) Each electric utility shall generate or procure
sufficient electricity generated by solar energy technology to provide 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 technologies by the end of the year indicated:

(1)
2014
... percent
(2)
2016
... percent
(3)
2020
... percent
(4)
2025
... percent.

(b) An electric utility may elect to apply electricity generated using solar energy
technology and purchased under a single power purchase agreement to either its standard
obligation under subdivision 2a or 2b or its solar energy standard under this subdivision,
but not to both.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 5.

Minnesota Statutes 2012, section 216B.1691, subdivision 4, is amended to read:


Subd. 4.

Renewable energy credits.

(a) To facilitate compliance with this section,
the commission, by rule or order, shall establish by January 1, 2008, a program for
tradable renewable energy credits for electricity generated by eligible energy technology.
The credits must represent energy produced by an eligible energy technology, as defined in
subdivision 1. Each kilowatt-hour of renewable energy credits must be treated the same as
a kilowatt-hour of eligible energy technology generated or procured by an electric utility
if it is produced by an eligible energy technology, except that only credits representing
electricity generated from solar energy may be used to meet the solar energy standard
under subdivision 2b
. The program must permit a credit to be used only once. The
program must treat all eligible energy technology equally and shall not give more or less
credit to energy based on the state where the energy was generated or the technology with
which the energy was generated. The commission must determine the period in which the
may not allow credits may held for longer than one year beyond the year in which they
were generated to
be used for purposes of the program.

(b) In lieu of generating or procuring energy directly to satisfy the eligible energy
technology objective or standard of this section, an electric utility may utilize renewable
energy credits allowed under the program to satisfy the objective or standard.

(c) The commission shall facilitate the trading of renewable energy credits between
Minnesota and states with renewable energy standard goals comparable to those in
subdivisions 2a and 2b and states that allow the purchase of Minnesota-generated
renewable energy credits
.

(d) The commission shall require all electric utilities to participate in a
commission-approved credit-tracking system or systems. Once a credit-tracking system is
in operation, the commission shall issue an order establishing protocols for trading credits.

(e) An electric utility subject to subdivision 2a, paragraph (b), may not sell renewable
energy credits to an electric utility subject to subdivision 2a, paragraph (a), until 2021.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 6.

Minnesota Statutes 2012, section 216B.243, subdivision 8, is amended to read:


Subd. 8.

Exemptions.

This section does not apply to:

(1) cogeneration or small power production facilities as defined in the Federal Power
Act, United States Code, title 16, section 796, paragraph (17), subparagraph (A), and
paragraph (18), subparagraph (A), and having a combined capacity at a single site of less
than 80,000 kilowatts; plants or facilities for the production of ethanol or fuel alcohol; or
any case where the commission has determined after being advised by the attorney general
that its application has been preempted by federal law;

(2) a high-voltage transmission line proposed primarily to distribute electricity to
serve the demand of a single customer at a single location, unless the applicant opts to
request that the commission determine need under this section or section 216B.2425;

(3) the upgrade to a higher voltage of an existing transmission line that serves the
demand of a single customer that primarily uses existing rights-of-way, unless the applicant
opts to request that the commission determine need under this section or section 216B.2425;

(4) a high-voltage transmission line of one mile or less required to connect a new or
upgraded substation to an existing, new, or upgraded high-voltage transmission line;

(5) conversion of the fuel source of an existing electric generating plant to using
natural gas; or

(6) the modification of an existing electric generating plant to increase efficiency,
as long as the capacity of the plant is not increased more than ten percent or more than
100 megawatts, whichever is greater; or

(7) a wind energy conversion system or solar electric generation facility.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 7. REPEALER.

Minnesota Statutes 2012, section 216B.243, subdivision 9, is repealed.

EFFECTIVE DATE.

This section is effective the day following final enactment.

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