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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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Introduction Pdf Posted on 02/25/2013

Current Version - as introduced

1.1A bill for an act
1.2relating to energy; increasing and extending the renewable energy standard
1.3to 2030; establishing a solar energy standard; exempting renewable energy
1.4projects from the certificate of need process; requiring uniform reporting of rate
1.5impacts of meeting the renewable energy standard; modifying the treatment
1.6and trading of renewable energy credits;amending Minnesota Statutes 2012,
1.7sections 216B.1645, subdivision 2a; 216B.1691, subdivisions 2a, 2e, 4, by
1.8adding a subdivision; 216B.243, subdivision 8; repealing Minnesota Statutes
1.92012, section 216B.243, subdivision 9.
1.10BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.11    Section 1. Minnesota Statutes 2012, section 216B.1645, subdivision 2a, is amended to
1.12read:
1.13    Subd. 2a. Cost recovery for utility's renewable facilities. (a) A utility may petition
1.14the commission to approve a rate schedule that provides for the automatic adjustment of
1.15charges to recover prudently incurred investments, expenses, or costs associated with
1.16facilities constructed, owned, or operated by a utility to satisfy the requirements of section
1.17216B.1691 , provided those facilities were previously approved by the commission under
1.18section 216B.2422 or 216B.243, or were determined by the commission to be reasonable
1.19and prudent under section 216B.243, subdivision 9. For facilities not subject to review
1.20by the commission under section 216B.2422 or 216B.243, a utility shall petition the
1.21commission for eligibility for cost recovery under this section prior to requesting cost
1.22recovery for the facility. The commission may approve, or approve as modified, a rate
1.23schedule that:
1.24    (1) allows a utility to recover directly from customers on a timely basis the costs of
1.25qualifying renewable energy projects, including:
1.26    (i) return on investment;
2.1    (ii) depreciation;
2.2    (iii) ongoing operation and maintenance costs;
2.3    (iv) taxes; and
2.4    (v) costs of transmission and other ancillary expenses directly allocable to
2.5transmitting electricity generated from a project meeting the specifications of this
2.6paragraph;
2.7    (2) provides a current return on construction work in progress, provided that recovery
2.8of these costs from Minnesota ratepayers is not sought through any other mechanism;
2.9    (3) allows recovery of other expenses incurred that are directly related to a
2.10renewable energy project, including expenses for energy storage, provided that the utility
2.11demonstrates to the commission's satisfaction that the expenses improve project economics,
2.12ensure project implementation, advance research and understanding of how storage devices
2.13may improve renewable energy projects, or facilitate coordination with the development
2.14of transmission necessary to transport energy produced by the project to market;
2.15    (4) allocates recoverable costs appropriately between wholesale and retail customers;
2.16    (5) terminates recovery when costs have been fully recovered or have otherwise
2.17been reflected in a utility's rates.
2.18    (b) A petition filed under this subdivision must include:
2.19    (1) a description of the facilities for which costs are to be recovered;
2.20    (2) an implementation schedule for the facilities;
2.21    (3) the utility's costs for the facilities;
2.22    (4) a description of the utility's efforts to ensure that costs of the facilities are
2.23reasonable and were prudently incurred; and
2.24    (5) a description of the benefits of the project in promoting the development of
2.25renewable energy in a manner consistent with this chapter.

2.26    Sec. 2. Minnesota Statutes 2012, section 216B.1691, subdivision 2a, is amended to read:
2.27    Subd. 2a. Eligible energy technology standard. (a) Except as provided in
2.28paragraph (b), each electric utility shall generate or procure sufficient electricity generated
2.29by an eligible energy technology to provide its retail customers in Minnesota, or the
2.30retail customers of a distribution utility to which the electric utility provides wholesale
2.31electric service, so that at least the following standard percentages of the electric utility's
2.32total retail electric sales to retail customers in Minnesota are generated by eligible energy
2.33technologies by the end of the year indicated:
2.34
(1)
2012
12 percent
2.35
(2)
2016
1719 percent
3.1
(3)
2020
20 22 percent
3.2
(4)
2025
25 percent.
3.3
(5)
2030
40 percent.
3.4    (b) An electric utility that owned a nuclear generating facility as of January 1, 2007,
3.5must meet the requirements of this paragraph rather than paragraph (a). An electric utility
3.6subject to this paragraph must generate or procure sufficient electricity generated by
3.7an eligible energy technology to provide its retail customers in Minnesota or the retail
3.8customer of a distribution utility to which the electric utility provides wholesale electric
3.9service so that at least the following percentages of the electric utility's total retail electric
3.10sales to retail customers in Minnesota are generated by eligible energy technologies by the
3.11end of the year indicated:
3.12
(1)
2010
15 percent
3.13
(2)
2012
18 percent
3.14
(3)
2016
25 percent
3.15
(4)
2020
30 percent.
3.16
(5)
2025
35 percent
3.17
(6)
2030
40 percent.
3.18Of the 30 percent in 2020, at least 25 percent must be generated by solar energy
3.19or wind energy conversion systems and the remaining five percent by other eligible
3.20energy technology. Of the 25 percent that must be generated by wind or solar, no more
3.21than one percent may be solar generated and the remaining 24 percent or greater must
3.22be wind generated.
3.23By 2016, at least 20 percent of total retail electric sales must be generated by wind
3.24energy conversion systems. By 2020, at least 25 percent of total retail electric sales must
3.25be generated by wind energy conversion systems.
3.26EFFECTIVE DATE.This section is effective the day following final enactment.

3.27    Sec. 3. Minnesota Statutes 2012, section 216B.1691, subdivision 2e, is amended to read:
3.28    Subd. 2e. Rate impact of standard compliance; report. Each electric utility must
3.29submit to the commission and the legislative committees with primary jurisdiction over
3.30energy policy a report containing an estimation of the rate impact of activities of the
3.31electric utility necessary to comply with this section. In consultation with the Department
3.32of Commerce, the commission shall determine a uniform reporting system to ensure that
3.33individual utility reports are consistent and comparable, and shall, by order, require each
3.34electric utility subject to this section to use that reporting system. The rate impact estimate
3.35must be for wholesale rates and, if the electric utility makes retail sales, the estimate
4.1shall also be for the impact on the electric utility's retail rates. Those activities include,
4.2without limitation, energy purchases, generation facility acquisition and construction, and
4.3transmission improvements. An initial report must be submitted within 150 days of May
4.428, 2011. After the initial report, a report must be updated and submitted as part of each
4.5integrated resource plan or plan modification filed by the electric utility under section
4.6216B.2422 . The reporting obligation of an electric utility under this subdivision expires
4.7December 31, 2025, for an electric utility subject to subdivision 2a, paragraph (a), and
4.8December 31, 2020, for an electric utility subject to subdivision 2a, paragraph (b).
4.9EFFECTIVE DATE.This section is effective the day following final enactment.

4.10    Sec. 4. Minnesota Statutes 2012, section 216B.1691, is amended by adding a
4.11subdivision to read:
4.12    Subd. 2f. Solar energy standard. (a) Each electric utility shall generate or procure
4.13sufficient electricity generated by solar energy technology to provide its retail customers
4.14in Minnesota, or the retail customers of a distribution utility to which the electric utility
4.15provides wholesale electric service, so that at least the following standard percentages of
4.16the electric utility's total retail electric sales to retail customers in Minnesota are generated
4.17by solar energy technologies by the end of the year indicated:
4.18
(1)
2014
... percent
4.19
(2)
2016
... percent
4.20
(3)
2020
... percent
4.21
(4)
2025
... percent.
4.22(b) An electric utility may elect to apply electricity generated using solar energy
4.23technology and purchased under a single power purchase agreement to either its standard
4.24obligation under subdivision 2a or 2b or its solar energy standard under this subdivision,
4.25but not to both.
4.26EFFECTIVE DATE.This section is effective the day following final enactment.

4.27    Sec. 5. Minnesota Statutes 2012, section 216B.1691, subdivision 4, is amended to read:
4.28    Subd. 4. Renewable energy credits. (a) To facilitate compliance with this section,
4.29the commission, by rule or order, shall establish by January 1, 2008, a program for
4.30tradable renewable energy credits for electricity generated by eligible energy technology.
4.31The credits must represent energy produced by an eligible energy technology, as defined in
4.32subdivision 1. Each kilowatt-hour of renewable energy credits must be treated the same as
4.33a kilowatt-hour of eligible energy technology generated or procured by an electric utility
5.1if it is produced by an eligible energy technology, except that only credits representing
5.2electricity generated from solar energy may be used to meet the solar energy standard
5.3under subdivision 2b. The program must permit a credit to be used only once. The
5.4program must treat all eligible energy technology equally and shall not give more or less
5.5credit to energy based on the state where the energy was generated or the technology with
5.6which the energy was generated. The commission must determine the period in which the
5.7 may not allow credits may held for longer than one year beyond the year in which they
5.8were generated to be used for purposes of the program.
5.9    (b) In lieu of generating or procuring energy directly to satisfy the eligible energy
5.10technology objective or standard of this section, an electric utility may utilize renewable
5.11energy credits allowed under the program to satisfy the objective or standard.
5.12    (c) The commission shall facilitate the trading of renewable energy credits between
5.13Minnesota and states with renewable energy standard goals comparable to those in
5.14subdivisions 2a and 2b and states that allow the purchase of Minnesota-generated
5.15renewable energy credits.
5.16    (d) The commission shall require all electric utilities to participate in a
5.17commission-approved credit-tracking system or systems. Once a credit-tracking system is
5.18in operation, the commission shall issue an order establishing protocols for trading credits.
5.19(e) An electric utility subject to subdivision 2a, paragraph (b), may not sell renewable
5.20energy credits to an electric utility subject to subdivision 2a, paragraph (a), until 2021.
5.21EFFECTIVE DATE.This section is effective the day following final enactment.

5.22    Sec. 6. Minnesota Statutes 2012, section 216B.243, subdivision 8, is amended to read:
5.23    Subd. 8. Exemptions. This section does not apply to:
5.24(1) cogeneration or small power production facilities as defined in the Federal Power
5.25Act, United States Code, title 16, section 796, paragraph (17), subparagraph (A), and
5.26paragraph (18), subparagraph (A), and having a combined capacity at a single site of less
5.27than 80,000 kilowatts; plants or facilities for the production of ethanol or fuel alcohol; or
5.28any case where the commission has determined after being advised by the attorney general
5.29that its application has been preempted by federal law;
5.30(2) a high-voltage transmission line proposed primarily to distribute electricity to
5.31serve the demand of a single customer at a single location, unless the applicant opts to
5.32request that the commission determine need under this section or section 216B.2425;
5.33(3) the upgrade to a higher voltage of an existing transmission line that serves the
5.34demand of a single customer that primarily uses existing rights-of-way, unless the applicant
5.35opts to request that the commission determine need under this section or section 216B.2425;
6.1(4) a high-voltage transmission line of one mile or less required to connect a new or
6.2upgraded substation to an existing, new, or upgraded high-voltage transmission line;
6.3(5) conversion of the fuel source of an existing electric generating plant to using
6.4natural gas; or
6.5(6) the modification of an existing electric generating plant to increase efficiency,
6.6as long as the capacity of the plant is not increased more than ten percent or more than
6.7100 megawatts, whichever is greater; or
6.8(7) a wind energy conversion system or solar electric generation facility.
6.9EFFECTIVE DATE.This section is effective the day following final enactment.

6.10    Sec. 7. REPEALER.
6.11Minnesota Statutes 2012, section 216B.243, subdivision 9, is repealed.
6.12EFFECTIVE DATE.This section is effective the day following final enactment.

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