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Minnesota Legislature

Office of the Revisor of Statutes

HF 1025

1st Engrossment - 87th Legislature (2011 - 2012) Posted on 05/02/2011 03:10pm

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to energy; modifying provisions relating to energy rates, energy
conservation and savings programs, utility cost recovery and investments,
qualifying facilities and nongenerating utilities, energy-related rate impacts,
large energy customers, cold weather notices to energy consumers, hydropower,
an innovative energy project, transmission lines, Public Utilities Commission
approval for security issuance by utilities, assessments, establishment of Energy
Reliability and Intervention Office, the Energy Conservation Information Center
and residential weatherization programs, and membership in the Melrose Public
Utilities Commission; making technical and clarifying changes;amending
Minnesota Statutes 2010, sections 16E.15, subdivision 2; 216B.03; 216B.07;
216B.096, subdivision 3; 216B.16, subdivisions 6b, 7, 9, 15, by adding
subdivisions; 216B.1636, subdivision 1; 216B.164, subdivision 3; 216B.1691,
subdivision 1, by adding a subdivision; 216B.1694, by adding a subdivision;
216B.2401; 216B.241, subdivisions 1, 1a, 1b, 1c, 2; 216B.2425, subdivision
2; 216B.49, subdivision 3; 216B.62, subdivisions 2, 3; 216C.052; 216C.11;
216C.264, subdivision 2; 216E.18, subdivision 3; repealing Minnesota Statutes
2010, sections 216A.085; 216B.242; 216C.264, subdivision 4.

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

ARTICLE 1

ENERGY RATES

Section 1.

Minnesota Statutes 2010, 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 consumersnew text begin and among classes of consumersnew text end.
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, 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.

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.

Minnesota Statutes 2010, section 216B.07, is amended to read:


216B.07 RATE PREFERENCE PROHIBITED.

No public utility shall, as to rates or service, make or grant any unreasonable
preference or advantage to any person new text beginor class of consumers new text endor subject any person new text beginor class
of consumers
new text endto any unreasonable prejudice or disadvantage.

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.

Minnesota Statutes 2010, section 216B.16, subdivision 6b, is amended to read:


Subd. 6b.

Energy conservation improvement.

(a) Except as otherwise provided
in this subdivision, all investments and expenses of a public utility as defined in section
216B.241, subdivision 1, deleted text beginparagraph (i),deleted text end incurred in connection with energy conservation
improvements shall be recognized and included by the commission in the determination of
just and reasonable rates as if the investments and expenses were directly made or incurred
by the utility in furnishing utility service.

(b) new text beginThe commission shall not include new text endinvestments and expenses for energy
conservation improvements deleted text beginshall not be included by the commissiondeleted text end in deleted text beginthe determination
of (i)
deleted text endnew text begin determining:
new text end

new text begin (1)new text end just and reasonable electric and gas rates for retail electric and gas service
provided to large deleted text beginelectric customer facilities that have been exempted by the commissioner
of the department pursuant to
deleted text endnew text begin energy customers exempted undernew text end section 216B.241,
subdivision 1a
, paragraph (b)new text begin or (e)new text end; or deleted text begin(ii)
deleted text end

new text begin (2)new text end just and reasonable gas rates for large energy facilitiesnew text begin or commercial gas
customers that are not large energy customers that have been exempted under section
216B.241, subdivision 1a, paragraph (c) or (e)
new text end.

(c) The commission may permit a public utility to file rate schedules providing for
annual recovery of the costs of energy conservation improvements. These rate schedules
may be applicable to less than all the customers in a class of retail customers if necessary to
reflect the requirements of section 216B.241. The commission shall allow a public utility,
without requiring a general rate filing under this section, to reduce the electric and gas
rates applicable to new text begina new text endlarge deleted text beginelectricdeleted text end new text beginenergy new text endcustomer deleted text beginfacilitiesdeleted text end that deleted text beginhavedeleted text endnew text begin hasnew text end been exempted
by the commissioner deleted text beginof the department pursuant todeleted text endnew text begin undernew text end section 216B.241, subdivision
1a
, paragraph (b)new text begin or (e)new text end, and to reduce the gas rate applicable to a large energy facilitynew text begin or
to a commercial gas customer that is not a large energy customer that has been exempted
under section 216B.241, subdivision 1a, paragraph (c) or (e),
new text end by an amount that reflects
the elimination of energy conservation improvement investments or expenditures for those
facilities. In the event that the commission has set electric or gas rates based on the use of
an accounting methodology that results in the cost of conservation improvements being
recovered from utility customers over a period of years, the rate reduction may occur in a
series of steps to coincide with the recovery of balances due to the utility for conservation
improvements made by the utility on or before December 31, 2007.

(d) Investments and expenses of a public utility deleted text beginshalldeleted text end new text begindo new text endnot include electric utility
infrastructure costs as defined in section 216B.1636, subdivision 1, paragraph (b).

new text begin (e) Notwithstanding any provision in this chapter, a power plant using natural gas
as a primary fuel to generate electricity by means of cogeneration, as defined in section
216B.166, subdivision 2, and whose construction began after July 1, 1994, and before
July 1, 1997, is exempt from any charges from a public utility serving the power plant
to recover costs incurred by the public utility to meet the requirements to make energy
conservation improvements under section 216B.241.
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.

Minnesota Statutes 2010, section 216B.16, is amended by adding a subdivision
to read:


new text begin Subd. 6e. new text end

new text begin Revenue allocation among consumer classes. new text end

new text begin Cost of service must
be the primary consideration in the commission's determination of revenue allocation
among consumer classes. Factors other than cost of service, including impact on business
development and job growth, may also be considered and evaluated by the commission
in determining revenue allocation. Factors used in determining revenue allocation must
be supported by record evidence.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to filings for rate changes filed on and after that date.
new text end

Sec. 5.

Minnesota Statutes 2010, section 216B.16, subdivision 7, is amended to read:


Subd. 7.

Energy new text beginand emission-control products new text endcost adjustment.

Notwithstanding any other provision of this chapter, the commission may permit a public
utility to file rate schedules containing provisions for the automatic adjustment of charges
for public utility service in direct relation to changes in:

(1) federally regulated wholesale rates for energy delivered through interstate
facilities;

(2) direct costs for natural gas delivered; deleted text beginor
deleted text end

(3) costs for fuel used in generation of electricity or the manufacture of gasnew text begin; or
new text end

new text begin (4) prudent costs incurred by a public utility for sorbents, reagents, or chemicals
used to control emissions from an electric generation facility, provided that these costs are
not recovered elsewhere in rates. The utility shall track and report annually the volumes
and costs of sorbents, reagents, or chemicals using separate accounts by generating plant
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. 6.

Minnesota Statutes 2010, section 216B.16, subdivision 9, is amended to read:


Subd. 9.

Charitable contribution.

The commission shall allow as operating
expenses only those charitable contributions deleted text beginwhichdeleted text end new text beginthat new text endthe commission deems prudent and
deleted text begin whichdeleted text end new text beginthat new text endqualify under section deleted text begin290.21, subdivision 3, clause (b)deleted text endnew text begin 300.66, subdivision 3new text end.
Only 50 percent of the qualified contributions deleted text beginshall bedeleted text end new text beginare new text endallowed as operating expenses.

Sec. 7.

Minnesota Statutes 2010, section 216B.16, subdivision 15, is amended to read:


Subd. 15.

Low-income affordability programs.

(a) The commission must
consider ability to pay as a factor in setting utility rates and may establish affordability
programs for low-income residential ratepayers in order to ensure affordable, reliable,
and continuous service to low-income utility customers. deleted text beginAffordability programs may
include inverted block rates in which lower energy prices are made available to lower
usage customers. By September 1, 2007,
deleted text end A public utility serving low-income residential
ratepayers who use natural gas for heating must file an affordability program with the
commission. For purposes of this subdivision, "low-income residential ratepayers" means
ratepayers who receive energy assistance from the low-income home energy assistance
program (LIHEAP).

(b) Any affordability program the commission orders a utility to implement must:

(1) lower the percentage of income that participating low-income households devote
to energy bills;

(2) increase participating customer payments over time by increasing the frequency
of payments;

(3) decrease or eliminate participating customer arrears;

(4) lower the utility costs associated with customer account collection activities; and

(5) coordinate the program with other available low-income bill payment assistance
and conservation resources.

(c) In ordering affordability programs, the commission may require public utilities to
file program evaluations that measure the effect of the affordability program on:

(1) the percentage of income that participating households devote to energy bills;

(2) service disconnections; and

(3) frequency of customer payments, utility collection costs, arrearages, and bad
debt.

(d) The commission must issue orders necessary to implement, administer, and
evaluate affordability programs, and to allow a utility to recover program costs, including
administrative costs, on a timely basis. The commission may not allow a utility to recover
administrative costs, excluding start-up costs, in excess of five percent of total program
costs, or program evaluation costs in excess of two percent of total program costs. The
commission must permit deferred accounting, with carrying costs, for recovery of program
costs incurred during the period between general rate cases.

(e) Public utilities may use information collected or created for the purpose of
administering energy assistance to administer affordability programs.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2010, section 216B.16, is amended by adding a subdivision
to read:


new text begin Subd. 19. new text end

new text begin Multiyear rate plan. new text end

new text begin (a) A public utility may propose, and the
commission may approve, approve as modified, or reject, a multiyear rate plan as provided
in this subdivision. The term "multiyear rate plan" refers to a plan establishing the rates
the utility may charge for each year of the specified period of years, which cannot exceed
four years, to be covered by the plan. The commission may approve a multiyear rate plan
only if it finds that the plan establishes just and reasonable rates for the utility, applying
the factors described in subdivisions 6 and 6e. Consistent with subdivision 4, the burden
of proof to demonstrate that the multiyear rate plan is just and reasonable is on the public
utility proposing the plan.
new text end

new text begin (b) Rates charged under the multiyear rate plan must be based only upon the utility's
reasonable and prudent costs of service over the term of the plan, as determined by the
commission, provided that the costs are not being recovered elsewhere in rates. Rate
adjustments authorized under subdivisions 6b and 7 may continue outside of a plan
authorized under this subdivision.
new text end

new text begin (c) The commission may, by order, establish terms, conditions, and procedures for a
multiyear rate plan necessary to implement this section and ensure that rates remain just
and reasonable during the course of the plan, including terms and procedures for rate
adjustment. At any time prior to conclusion of a multiyear rate plan, the commission has
the discretion to hear and consider a petition by any party to examine the reasonableness
of the utility's rates under the plan, and adjust rates as necessary.
new text end

new text begin (d) In reviewing a multiyear rate plan proposed in a general rate case under
this section, the commission may extend the time requirements for issuance of a final
determination prescribed in this section by an additional 90 days beyond its existing
authority under subdivision 2, paragraph (f).
new text end

Sec. 9.

Minnesota Statutes 2010, section 216B.164, subdivision 3, is amended to read:


Subd. 3.

Purchases; small facilities.

(a) For a qualifying facility having less than
40-kilowatt capacity, the customer shall be billed for the net energy supplied by the utility
according to the applicable rate schedule for sales to that class of customer. In the case
of net input into the utility system by a qualifying facility having less than 40-kilowatt
capacity, compensation to the customer shall be at a per kilowatt-hour rate determined
under paragraph (b) or (c)new text begin or subdivision 4new text end.

(b) In setting rates, the commission shall consider the fixed distribution costs to the
utility not otherwise accounted for in the basic monthly charge and shall ensure that the
costs charged to the qualifying facility are not discriminatory in relation to the costs
charged to other customers of the utility. The commission shall set the rates for net
input into the utility system based on avoided costs as defined in the Code of Federal
Regulations, title 18, section 292.101, paragraph (b)(6), the factors listed in Code of
Federal Regulations, title 18, section 292.304, and all other relevant factors.

(c) Notwithstanding any provision in this chapter to the contrary, a qualifying facility
having less than 40-kilowatt capacitynew text begin that is interconnected with a nongenerating utilitynew text end
may elect deleted text beginthat the compensationdeleted text endnew text begin to be compensatednew text end for net input deleted text beginby the qualifying facilitydeleted text end
into the utility system deleted text beginshall bedeleted text end at the average deleted text beginretail utility energy rate. "Average retail
utility energy rate" is defined as the average of the retail energy rates, exclusive of special
rates based on income, age, or energy conservation, according to the applicable rate
schedule of the utility for sales to that class of customer
deleted text endnew text begin rate the nongenerating utility pays
a generating utility or utilities to supply electricity to the nongenerating utility, including,
but not limited to, energy, capacity, and transmission costs
new text end.

(d) If the qualifying facility is interconnected with a nongenerating utility which has
a sole source contract with a municipal power agency or a generation and transmission
utility, the nongenerating utility may elect to treat its purchase of any net input under this
subdivision as being made on behalf of its supplier and shall be reimbursed by its supplier
for any additional costs incurred in making the purchase.new text begin Anew text end qualifying deleted text beginfacilitiesdeleted text endnew text begin facilitynew text end
having less than 40-kilowatt capacity maydeleted text begin, at the customer's option,deleted text end elect to be governed
by the provisions of subdivision 4.

new text begin (e) For the purposes of this section, "nongenerating utility" has the meaning given in
Minnesota Rules, part 7835.0100.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to power purchase agreements signed after June 30, 2011.
new text end

Sec. 10.

Minnesota Statutes 2010, section 216B.1691, is amended by adding a
subdivision to read:


new text begin Subd. 2e. new text end

new text begin Rate impact of standard compliance; report. new text end

new text begin (a) Each electric utility
must submit to the commission and to the chairs and ranking minority members of the
legislative committees with primary jurisdiction over energy policy a report containing an
estimation of the rate impact on wholesale rates and, if applicable, retail rates, of activities
of the electric utility necessary to comply with this section. 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 the effective date of this section. 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.
new text end

new text begin (b) 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).
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. 11. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, section 216B.242, new text end new text begin is repealed.
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

ARTICLE 2

ENERGY CONSERVATION

Section 1.

Minnesota Statutes 2010, section 216B.2401, is amended to read:


216B.2401 ENERGY CONSERVATION POLICY GOAL.

It is the energy policy of the state of Minnesota to achieve annual energy savings
equal to 1.5 percent of annual retail energy sales of electricity and natural gas directly
through new text begincustomer-initiated conservation activities and new text endenergy conservation improvement
programs and rate design, deleted text beginsuch as inverted block rates in which lower energy prices
are made available to lower-usage residential customers,
deleted text end and indirectly through energy
codes and appliance standards, programs designed to transform the market or change
consumer behavior, energy savings resulting from efficiency improvements to the utility
infrastructure and system, and other efforts to promote energy efficiency and energy
conservation.

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.

Minnesota Statutes 2010, section 216B.241, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

For purposes of this section and section 216B.16,
subdivision 6b
, 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.

deleted text begin (c) "Customer facility" means all buildings, structures, equipment, and installations
at a single site.
deleted text end

deleted text begin (d)deleted text endnew text begin (c)new text end "Department" means the Department of Commerce.

deleted text begin (e)deleted text endnew text begin (d)new text end "Energy conservation" means demand-side management of energy supplies
resulting in a net reduction in energy use. Load management that reduces overall energy
use is energy conservation.

deleted text begin (f)deleted text endnew text begin (e)new text end "Energy conservation improvement" means a project that results in energy
efficiency or energy conservation. Energy conservation improvement may include waste
heat recovery converted into electricity but does not include electric utility infrastructure
projects approved by the commission under section 216B.1636.

deleted text begin (g)deleted text endnew text begin (f)new text end "Energy efficiency" means measures or programs, including energy
conservation measures or programs, that target consumer behavior, equipment, processes,
or devices designed to produce either an absolute decrease in consumption of electric
energy or natural gas or a decrease in consumption of electric energy or natural gas on a
per unit of production basis without a reduction in the quality or level of service provided
to the energy consumer.

deleted text begin (h)deleted text endnew text begin (g)new text end "Gross annual retail energy sales" means annual electric sales to all retail
customers in a utility's or association's Minnesota service territory or natural gas
throughput to all retail customers, including natural gas transportation customers, on a
utility's distribution system in Minnesota. For purposes of this section, gross annual
retail energy sales excludenew text begin:
new text end

new text begin (1)new text end gas sales to a large energy facility new text beginor a commercial gas customer that is not a
large energy customer and is exempted under subdivision 1a, paragraph (c) or (e);
new text endand

new text begin (2) new text endgas and electric sales to a large deleted text beginelectricdeleted text endnew text begin energynew text end customer deleted text beginfacilitydeleted text end exempted deleted text beginby the
commissioner
deleted text end under subdivision 1a, paragraph (b).

deleted text begin (i)deleted text endnew text begin (h)new text end "Investments and expenses of a public utility" includes the investments
and expenses incurred by a public utility in connection with an energy conservation
improvement, including but not limited to:

(1) the differential in interest cost between the market rate and the rate charged on a
no-interest or below-market interest loan made by a public utility to a customer for the
purchase or installation of an energy conservation improvement;

(2) the difference between the utility's cost of purchase or installation of energy
conservation improvements and any price charged by a public utility to a customer for
such improvements.

deleted text begin (j)deleted text endnew text begin (i)new text end "Large deleted text beginelectricdeleted text endnew text begin energynew text end customer deleted text beginfacilitydeleted text end" means a customer new text beginwith a new text endfacility
that imposes a peak electrical demand on an electric utility's system of not less than
20,000 kilowatts, measured in the same way as the utility that serves the customer facility
measures electrical demand for billing purposesdeleted text begin, and for which electric services are
provided at retail on a single bill by a utility operating in the state
deleted text endnew text begin or a customer with a
facility that consumes not less than 500,000,000 cubic feet of natural gas annually. When
calculating peak demand, a large energy customer may:
new text end

new text begin (1) include demand offset by on-site cogeneration facilities; and
new text end

new text begin (2) if engaged in mineral extraction, aggregate peak energy demand from the
customer's mining and processing facilities
new text end.

deleted text begin (k)deleted text endnew text begin (j)new text end "Large energy facility" has the meaning given it in section 216B.2421,
subdivision 2, clause (1).

deleted text begin (l)deleted text endnew text begin (k)new text end "Load management" means an activity, service, or technology to change the
timing or the efficiency of a customer's use of energy that allows a utility or a customer to
respond to wholesale market fluctuations or to reduce peak demand for energy or capacity.

deleted text begin (m)deleted text endnew text begin (l)new text end "Low-income programs" means energy conservation improvement programs
that directly serve the needs of low-income persons, including low-income renters.

deleted text begin (n)deleted text endnew text begin (m)new text end "Waste heat recovery converted into electricity" means an energy recovery
process that converts otherwise lost energy from the heat of exhaust stacks or pipes used
for engines or manufacturing or industrial processes, or the reduction of high pressure
in water or gas pipelines.

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.

Minnesota Statutes 2010, section 216B.241, subdivision 1a, is amended to read:


Subd. 1a.

Investment, expenditure, and contribution; public utility.

(a) For
purposes of this subdivision and subdivision 2, "public utility" has the meaning given it
in section 216B.02, subdivision 4. Each public utility shall spend and invest for energy
conservation improvements under this subdivision and subdivision 2 the following
amounts:

(1) for a utility that furnishes gas service, 0.5 percent of its gross operating revenues
from service provided in the state;

(2) for a utility that furnishes electric service, 1.5 percent of its gross operating
revenues from service provided in the state; and

(3) for a utility that furnishes electric service and that operates a nuclear-powered
electric generating plant within the state, two percent of its gross operating revenues
from service provided in the state.

For purposes of this paragraph (a), "gross operating revenues" do not include revenues
from large deleted text beginelectric customer facilitiesdeleted text endnew text begin energy customersnew text end exempted deleted text beginby the commissionerdeleted text end
under paragraph (b)new text begin, or from commercial gas customers that are not large energy
customers and that are exempted under paragraph (c) or (e)
new text end.

(b) deleted text beginThe owner ofdeleted text end A large deleted text beginelectricdeleted text endnew text begin energynew text end customer deleted text beginfacilitydeleted text end may deleted text beginpetitiondeleted text endnew text begin file withnew text end the
commissioner to exempt both electric and gas utilities serving the large energy customer
deleted text begin facilitydeleted text end from the investment and expenditure requirements of paragraph (a) with respect
to retail revenues attributable to the deleted text beginfacilitydeleted text endnew text begin customernew text end. deleted text beginAt a minimum,deleted text end The deleted text beginpetition must
be supported by evidence relating to
deleted text endnew text begin filing must include a discussion of thenew text end competitive
or economic pressures on the customer and deleted text begina showing by the customer of reasonabledeleted text endnew text begin
of the
new text end effortsnew text begin taken by the customernew text end to identify, evaluate, and implement cost-effective
conservation improvements deleted text beginat the facilitydeleted text endnew text begin and an audit or other report prepared by an
independent third party with expertise in energy conservation verifying that the customer
has taken reasonable and appropriate measures to implement cost-effective conservation
improvements
new text end. deleted text beginIf a petition is filed on or before October 1 of any year, the order of the
commissioner to exempt revenues attributable to the facility can be effective no earlier
than January 1 of the following year. The commissioner shall not grant an exemption if
the commissioner determines that granting the exemption is contrary to the public interest.
The commissioner may, after investigation, rescind any exemption granted under this
paragraph upon a determination that the customer is not continuing to make reasonable
efforts to identify, evaluate, and implement energy conservation improvements at the
large electric customer facility. For the purposes of investigations by the commissioner
under this paragraph, the owner of any large electric customer facility shall, upon request,
provide the commissioner with updated information comparable to that originally supplied
in or with the owner's original petition under this paragraph.
deleted text endnew text begin The filing must be approved
and become effective January 1 of the year following the filing. A large energy customer
that is exempt from the investment and expenditure requirements of paragraph (a) under
an order from the commissioner issued before the effective date of this section does not
need to resubmit a petition to retain its exempt status. No exempt large energy customer
may participate in a utility conservation improvement program unless the large energy
customer files with the commissioner to withdraw its exemption.
new text end

(c) new text beginA commercial gas customer that is not a large energy customer and that purchases
natural gas from a public utility having fewer than 300,000 natural gas customers in
Minnesota may petition the commissioner to exempt gas utilities serving the commercial
gas customer from the investment and expenditure requirements of paragraph (a) with
respect to retail revenues attributable to the commercial gas customer. The petition must
be supported by evidence demonstrating that the commercial gas customer has acquired or
can reasonably acquire the capability to bypass use of the utility's gas distribution system
by obtaining natural gas directly from a supplier not regulated by the commission.
new text end

new text begin (d) new text endThe commissioner may require investments or spending greater than the amounts
required under this subdivision for a public utility whose most recent advance forecast
required under section 216B.2422 or 216C.17 projects a peak demand deficit of 100
megawatts or greater within five years under midrange forecast assumptions.

deleted text begin (d)deleted text endnew text begin (e)new text end A public utility deleted text beginor owner of a large electric customer facilitydeleted text end may appeal a
decision of the commissioner under paragraph (b) deleted text beginordeleted text endnew text begin,new text end (c)new text begin, or (d)new text end to the commission under
subdivision 2. In reviewing a decision of the commissioner under paragraph (b) deleted text beginordeleted text endnew text begin,new text end (c)new text begin, or
(d)
new text end, the commission shall rescind the decision if it finds that the required investments or
spending will:

(1) not result in cost-effective energy conservation improvements; or

(2) otherwise not be in the public interest.

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.

Minnesota Statutes 2010, section 216B.241, subdivision 1b, is amended to read:


Subd. 1b.

Conservation improvement by cooperative association or
municipality.

(a) This subdivision applies to:

(1) a cooperative electric association that provides retail service to its members;

(2) a municipality that provides electric service to retail customers; and

(3) a municipality with more than 1,000,000,000 cubic feet in annual throughput
sales to natural gas to retail customers.

(b) Each cooperative electric association and municipality subject to this subdivision
shall spend and invest for energy conservation improvements under this subdivision
the following amounts:

(1) for a municipality, 0.5 percent of its gross operating revenues from the sale of
gas and 1.5 percent of its gross operating revenues from the sale of electricity, excluding
gross operating revenues from electric and gas service provided in the state to large
electric customer facilities; and

(2) for a cooperative electric association, 1.5 percent of its gross operating revenues
from service provided in the state, excluding gross operating revenues from service
provided in the state to large electric customer facilities indirectly through a distribution
cooperative electric association.

(c) new text beginEach municipality and cooperative electric association subject to this subdivision:
new text end

new text begin (1) shall make a good-faith effort to meet an annual energy-savings goal equivalent
to 1.5 percent gross annual retail energy sales, although no municipality or cooperative
association is required to spend more than the proportion of gross operating revenues cited
in paragraph (b) to achieve the energy-savings goal;
new text end

new text begin (2) may, if it experiences zero or negative growth in gross retail energy sales, be
deemed to satisfy the energy-savings goal if it achieves savings equal to 0.75 percent of
gross retail energy sales;
new text end

new text begin (3) shall calculate the energy-savings goal based on weather-normalized average
gross retail energy sales during the three most recent calendar years;
new text end

new text begin (4) may elect to carry forward energy savings in excess of 1.5 percent to apply to the
energy-savings goal in subsequent years;
new text end

new text begin (5) may use a particular energy savings only for one year's goal;
new text end

new text begin (6) may apply toward its energy-savings goal energy saved from electric utility
infrastructure projects as defined in section 216B.1636, provided that the projects result
in increased efficiency greater than that which would have occurred through normal
maintenance activity; and
new text end

new text begin (7) may apply toward its energy-savings goal five kilowatt-hours per dollar spent,
including labor and administrative costs, to educate customers about energy conservation
and to educate and train utility employees, contractors, and others to perform energy
audits, install conservation measures, and conduct other activities directly related to
conservation investments.
new text end

new text begin (d) new text endEach municipality and cooperative electric association subject to this subdivision
shall identify and implement energy conservation improvement spending and investments
that are appropriate for the municipality or association, except that a municipality or
association may not spend or invest for energy conservation improvements that directly
benefit a large energy facility or a large deleted text beginelectricdeleted text endnew text begin energynew text end customer deleted text beginfacility for which the
commissioner has issued an exemption
deleted text endnew text begin exemptednew text end under subdivision 1a, paragraph (b).new text begin A
municipality or cooperative electric association whose annual gross retail energy sales
increase by ten percent or more over the previous year as the result of the addition of a
single new customer or increased demand from a single existing customer may petition
the commissioner to exclude all sales from that customer from its energy-savings goal.
If the commissioner approves the exclusion, the municipality or cooperative electric
association may petition the commissioner annually to extend the exclusion, even if the
incremental sales added by the customer no longer increase gross retail energy sales by ten
percent or more over the previous year. The commissioner shall approve the extension if
the commissioner determines that the petition contains sufficient evidence to demonstrate
that the customer whose sales are sought to be excluded continues to make reasonable
efforts to identify, evaluate, and implement energy conservation improvements at the
customer's facility. A municipality or cooperative electric association may petition for an
exemption under this paragraph regarding an eligible sales increase that occurred in 2008,
2009, or 2010, but any exemption approved for an eligible sales increase in those years
may apply only to the municipality's or cooperative electric association's energy-savings
goal for 2012 and, if extended by the commissioner, thereafter.
new text end

new text begin (e) A municipality or cooperative electric association subject to this subdivision
is not required to make energy conservation investments to attain the energy-savings
goal of this subdivision that are not cost-effective even if the investment is necessary
to attain the energy-savings goal. For the purpose of this paragraph, in determining
cost-effectiveness, the commissioner shall consider the costs and benefits to ratepayers,
the cooperative electric association or municipality, participants, and society. In addition,
the commissioner shall consider the rate at which a cooperative electric association or
municipality is increasing its energy savings and its expenditures on energy conservation.
new text end

deleted text begin (d)deleted text endnew text begin (f)new text end Each municipality and cooperative electric association subject to this
subdivision may spend and invest annually up to ten percent of the total amount required
to be spent and invested on energy conservation improvements under this subdivision
on research and development projects that meet the definition of energy conservation
improvement in subdivision 1 and that are funded directly by the municipality or
cooperative electric association.

deleted text begin (e)deleted text endnew text begin (g)new text end Load-management activities may be used to meet 50 percent of the
conservation investment and spending requirements of this subdivision.new text begin The amount
of energy a utility shifts from peak daily demand by implementing load-management
activities may count for up to 50 percent of the energy-savings goal of a municipality or
cooperative electric association.
new text end

deleted text begin (f)deleted text endnew text begin (h)new text end A generation and transmission cooperative electric association that provides
energy services to cooperative electric associations that provide electric service at retail to
consumers may invest in energy conservation improvements on behalf of the associations
it serves and may fulfill the conservation, spending, reporting, and energy-savings goals on
an aggregate basis. A municipal power agency or other not-for-profit entity that provides
energy service to municipal utilities that provide electric service at retail may invest in
energy conservation improvements on behalf of the municipal utilities it serves and may
fulfill the conservation, spending, reporting, and energy-savings goals on an aggregate
basis, under an agreement between the municipal power agency or not-for-profit entity
and each municipal utility for funding the investments.

deleted text begin (g)deleted text end new text begin(i) new text endEach municipality or cooperative new text beginelectric association new text endshall file energy
conservation improvement plans new text beginor a summary of the plans new text endby June 1 on a schedule
determined by order of the commissioner, but at least every three years. Plans new text beginor
summaries
new text endreceived by June 1 must be deleted text beginapproved or approved as modifieddeleted text endnew text begin reviewednew text end by the
commissioner new text beginand the commissioner's comments must be submitted to the municipality
or cooperative electric association
new text endby December 1 of the same year. The municipality or
cooperative new text beginelectric association new text endshall provide an evaluation to the commissioner deleted text begindetailingdeleted text endnew text begin
summarizing
new text end its energy conservation improvement spending and investments for the
previous period. The evaluation must briefly describe each conservation program and must
specify the energy savings or increased efficiency in the use of energy within the service
territory of the deleted text beginutilitydeleted text endnew text begin municipalitynew text end or new text begincooperative electric new text endassociation that is the result of
the spending and investments. The evaluation must analyze the cost-effectiveness of the
deleted text begin utility'sdeleted text endnew text begin municipality'snew text end or new text begincooperative electric new text endassociation's conservation programs, using a
list of baseline energy and capacity savings assumptions developed in consultation with the
department. The commissioner shall review each evaluation and make recommendations,
where appropriate, to the municipality or new text begincooperative electric new text endassociation to increase the
effectiveness of conservation improvement activities.new text begin In making recommendations, the
commissioner may consider the municipality's or cooperative electric association's rate of
conservation spending and energy savings, historical conservation investment experience,
impact on rates of conservation spending and energy savings, customer class profile,
load growth trends, conservation potential, and customers' ability to pay, as well as local
economic conditions, advancing technology, and other relevant factors.
new text end

deleted text begin (h)deleted text endnew text begin (j)new text end A municipality may spend up to 50 percent of its required spending under this
section to refurbish an existing district heating or cooling system until July 1, 2007. From
July 1, 2007, through June 30, 2011, expenditures made to refurbish a district heating or
cooling system are considered to be load-management activities under paragraph deleted text begin(e)deleted text endnew text begin (g)new text end.
This paragraph expires July 1, 2011.

deleted text begin (i)deleted text endnew text begin (k)new text end The commissioner shall consider and may require a utility, association, or
other entity providing energy efficiency and conservation services under this section to
undertake a program suggested by an outside source, including a political subdivision,
nonprofit corporation, or community organization.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2010, section 216B.241, subdivision 1c, is amended to read:


Subd. 1c.

Energy-saving goalsnew text begin; public utilitynew text end.

(a) The commissioner shall
establish energy-saving goals for energy conservation improvement expenditures and shall
evaluate an energy conservation improvement program on how well it meets the goals set.

(b) Each individual new text beginpublic new text endutility deleted text beginand associationdeleted text end shall have an annual energy-savings
goal equivalent to 1.5 percent of gross annual retail energy sales unless modified by the
commissioner under paragraph (d). The savings goals must be calculated based on the
most recent three-year weathernew text begin-new text endnormalized average. A new text beginpublic new text endutility deleted text beginor associationdeleted text end may
elect to carry forward energy savings in excess of 1.5 percent for a year to the succeeding
three calendar years, except that savings from electric utility infrastructure projects
allowed under paragraph (d) may be carried forward for five years. A particular energy
savings can be used only for one year's goal.

(c) The commissioner must adopt a filing schedule that is designed to have all
utilities and associations operating under an energy-savings plan by calendar year 2010.

(d) In its energy conservation improvement plan filing, a new text beginpublic new text endutility deleted text beginor associationdeleted text end
may request the commissioner to adjust its annual energy-savings percentage goal based
on its historical conservation investment experience, customer class makeup, load growth,
a conservation potential study, or other factors the commissioner determines warrants
an adjustment. The commissioner may not approve a plan that provides for an annual
energy-savings goal of less than one percent of gross annual retail energy sales from
energy conservation improvements.

A new text beginpublic new text endutility deleted text beginor associationdeleted text end may include in its energy conservation plan energy
savings from electric utility infrastructure projects approved by the commission under
section 216B.1636 or waste heat recovery converted into electricity projects that may
count as energy savings in addition to the minimum energy-savings goal of at least one
percent for energy conservation improvements. Electric utility infrastructure projects
must result in increased energy efficiency greater than that which would have occurred
through normal maintenance activity.

(e) An energy-savings goal is not satisfied by attaining the revenue expenditure
requirements of subdivisions 1a and 1b, but can only be satisfied by meeting the
energy-savings goal established in this subdivision.

(f) deleted text beginAn association ordeleted text endnew text begin A publicnew text end utility is not required to make energy conservation
investments to attain the energy-savings goals of this subdivision that are not cost-effective
even if the investment is necessary to attain the energy-savings goals. For the purpose
of this paragraph, in determining cost-effectiveness, the commissioner shall consider
the costs and benefits to ratepayers, the utility, participants, and society. deleted text beginIn addition,
the commissioner shall consider the rate at which an association or municipal utility is
increasing its energy savings and its expenditures on energy conservation.
deleted text end

(g) On an annual basis, the commissioner shall produce and make publicly available
a report on the annual energy savings and estimated carbon dioxide reductions achieved
by the energy conservation improvement programs for the two most recent years for
which data is available. The commissioner shall report on program performance both in
the aggregate and for each entity filing an energy conservation improvement plan for
approval or review by the commissioner.

(h) By January 15, 2010, the commissioner shall report to the legislature whether
the spending requirements under subdivisions 1a and 1b are necessary to achieve the
energy-savings goals established in this subdivision.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2010, section 216B.241, subdivision 2, is amended to read:


Subd. 2.

Programs.

(a) The commissioner may require public utilities to make
investments and expenditures in energy conservation improvements, explicitly setting
forth the interest rates, prices, and terms under which the improvements must be offered to
the customers. The required programs must cover no more than a three-year period. Public
utilities shall file conservation improvement plans by June 1, on a schedule determined by
order of the commissioner, but at least every three years. Plans received by a public utility
by June 1 must be approved or approved as modified by the commissioner by December
1 of that same year. The commissioner shall evaluate the program on the basis of
cost-effectiveness and the reliability of technologies employed. The commissioner's order
must provide to the extent practicable for a free choice, by consumers participating in the
program, of the device, method, material, or project constituting the energy conservation
improvement and for a free choice of the seller, installer, or contractor of the energy
conservation improvement, provided that the device, method, material, or project seller,
installer, or contractor is duly licensed, certified, approved, or qualified, including under
the residential conservation services program, where applicable.

(b) The commissioner may require a utility to make an energy conservation
improvement investment or expenditure whenever the commissioner finds that the
improvement will result in energy savings at a total cost to the utility less than the cost
to the utility to produce or purchase an equivalent amount of new supply of energy. The
commissioner shall nevertheless ensure that every public utility operate one or more
programs under periodic review by the department.

(c) Each public utility subject to subdivision 1a may spend and invest annually up to
ten percent of the total amount required to be spent and invested on energy conservation
improvements under this section by the utility on research and development projects
that meet the definition of energy conservation improvement in subdivision 1 and that
are funded directly by the public utility.

(d) A public utility may not spend for or invest in energy conservation improvements
that directly benefit a large energy facility deleted text beginordeleted text endnew text begin,new text end a large deleted text beginelectricdeleted text endnew text begin energynew text end customer deleted text beginfacility
for which the commissioner has issued an exemption pursuant to
deleted text endnew text begin, or a commercial gas
customer that is not a large energy customer exempted under
new text end subdivision 1a, paragraph
(b)new text begin, (c), or (e)new text end. The commissioner shall consider and may require a utility to undertake
a program suggested by an outside source, including a political subdivision, a nonprofit
corporation, or community organization.

(e) A utility, a political subdivision, or a nonprofit or community organization
that has suggested a program, the attorney general acting on behalf of consumers and
small business interests, or a utility customer that has suggested a program and is not
represented by the attorney general under section 8.33 may petition the commission to
modify or revoke a department decision under this section, and the commission may do
so if it determines that the program is not cost-effective, does not adequately address the
residential conservation improvement needs of low-income persons, has a long-range
negative effect on one or more classes of customers, or is otherwise not in the public
interest. The commission shall reject a petition that, on its face, fails to make a reasonable
argument that a program is not in the public interest.

(f) The commissioner may order a public utility to include, with the filing of the
utility's deleted text beginproposed conservation improvement plan under paragraph (a),deleted text endnew text begin program status
report required under Minnesota Rules, part 7690.0550,
new text end the results of an independent audit
of the utility's conservation improvement programs and expenditures performed by the
department or an auditor with experience in the provision of energy conservation and
energy efficiency services approved by the commissioner and chosen by the utility. The
audit must specify the energy savings or increased efficiency in the use of energy within
the service territory of the utility that is the result of the spending and investments. The
audit must evaluate the cost-effectiveness of the utility's conservation programs.

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 3

MISCELLANEOUS

Section 1.

Minnesota Statutes 2010, section 16E.15, subdivision 2, is amended to read:


Subd. 2.

Software sale fund.

(a) Except as provided in deleted text beginparagraphsdeleted text endnew text begin paragraphnew text end (b)
deleted text begin and (c)deleted text end, proceeds of the sale or licensing of software products or services by the chief
information officer must be credited to the enterprise technology revolving fund. If a state
agency other than the Office of Enterprise Technology has contributed to the development
of software sold or licensed under this section, the chief information officer may reimburse
the agency by discounting computer services provided to that agency.

(b) Proceeds of the sale or licensing of software products or services developed by
the Pollution Control Agency, or custom developed by a vendor for the agency, must be
credited to the environmental fund.

deleted text begin (c) Proceeds of the sale or licensing of software products or services developed by
the Department of Education, or custom developed by a vendor for the agency, to support
the achieved savings assessment program, must be appropriated to the commissioner of
education and credited to the weatherization program to support weatherization activities.
deleted text end

Sec. 2.

Minnesota Statutes 2010, section 216B.096, subdivision 3, is amended to read:


Subd. 3.

Utility obligations before cold weather period.

Each year, between
September 1 and October 15, each utility must provide all customers, personally deleted text beginordeleted text endnew text begin,new text end by
first class mail, new text beginor electronically for those requesting electronic billing, new text enda summary of
rights and responsibilities. The summary must also be provided to all new residential
customers when service is initiated.

Sec. 3.

Minnesota Statutes 2010, section 216B.1636, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) "Electric utility" means a public utility as defined in
section 216B.02, subdivision 4, that furnishes electric service to retail customers.

(b) "Electric utility infrastructure costs" or "EUIC" means costs for electric utility
infrastructure projects that were not included in the electric utility's rate base in its most
recent general rate case.

(c) "Electric utility infrastructure projects" means projects owned by an electric
utility that:

(1) replace or modify existing electric utility infrastructure, including utility-owned
buildings, if the replacement or modification is shown to conserve energy or use energy
more efficiently, consistent with section 216B.241, subdivision 1c; or

(2) conserve energy or use energy more efficiently by using waste heat recovery
converted into electricity as defined in section 216B.241, subdivision 1deleted text begin, paragraph (n)deleted text end.

Sec. 4.

Minnesota Statutes 2010, section 216B.1691, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) Unless otherwise specified in law, "eligible energy
technology" means an energy technology that generates electricity from the following
renewable energy sources:

(1) solar;

(2) wind;

(3) hydroelectric with a capacity of less than 100 megawatts;

(4) hydrogen, provided that after January 1, 2010, the hydrogen must be generated
from the resources listed in this paragraph; or

(5) biomass, which includes, without limitation, landfill gas; an anaerobic digester
system; the predominantly organic components of wastewater effluent, sludge, or related
by-products from publicly owned treatment works, but not including incineration of
wastewater sludge to produce electricity; and an energy recovery facility used to capture
the heat value of mixed municipal solid waste or refuse-derived fuel from mixed municipal
solid waste as a primary fuel.

(b) "Electric utility" means a public utility providing electric service, a generation
and transmission cooperative electric association, a municipal power agency, or a power
district.

(c) "Total retail electric sales" means the kilowatt-hours of electricity sold in a year
by an electric utility to retail customers of the electric utility or to a distribution utility for
distribution to the retail customers of the distribution utility.new text begin Total retail electric sales does
not include the sale of electricity generated by hydropower by a federal power agency.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from March 19, 2010.
new text end

Sec. 5.

Minnesota Statutes 2010, section 216B.1694, is amended by adding a
subdivision to read:


new text begin Subd. 3. new text end

new text begin Staging and permitting. new text end

new text begin (a) A natural gas-fired plant that is located
on one site designated as an innovative energy project site under subdivision 1, clause
(3), is accorded the regulatory incentives granted to an innovative energy project under
subdivision 2, clauses (1) through (3), and may exercise the authorities therein.
new text end

new text begin (b) Following issuance of a final state or federal environmental impact statement for
an innovative energy project that was a subject of contested case proceedings before an
administrative law judge:
new text end

new text begin (1) site and route permits and water appropriation approvals for an innovative energy
project must also be deemed valid for a plant meeting the requirements of paragraph (a)
and shall remain valid until the earlier of (i) four years from the date the final required
state or federal preconstruction permit is issued or (ii) June 30, 2019; and
new text end

new text begin (2) no air, water, or other permit issued by a state agency that is necessary for
constructing an innovative energy project may be the subject of contested case hearings,
notwithstanding Minnesota Rules, parts 7000.1750 to 7000.2200.
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. 6.

Minnesota Statutes 2010, section 216B.2425, subdivision 2, is amended to read:


Subd. 2.

List development; transmission projects report.

(a) By November
1 of each odd-numbered year, a transmission projects report must be submitted to the
commission by each utility, organization, or company that:

(1) is a public utility, a municipal utility, a cooperative electric association, the
generation and transmission organization that serves each utility or association, or a
transmission company; and

(2) owns or operates electric transmission lines in Minnesotanew text begin, except a company or
organization that owns a transmission line that serves a single customer or interconnects a
single generating facility
new text end.

(b) The report may be submitted jointly or individually to the commission.

(c) The report must:

(1) list specific present and reasonably foreseeable future inadequacies in the
transmission system in Minnesota;

(2) identify alternative means of addressing each inadequacy listed;

(3) identify general economic, environmental, and social issues associated with
each alternative; and

(4) provide a summary of public input related to the list of inadequacies and the role
of local government officials and other interested persons in assisting to develop the list
and analyze alternatives.

(d) To meet the requirements of this subdivision, reporting parties may rely on
available information and analysis developed by a regional transmission organization
or any subgroup of a regional transmission organization and may develop and include
additional information as necessary.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2010, section 216B.49, subdivision 3, is amended to read:


Subd. 3.

Commission approval required.

It deleted text beginshall bedeleted text end new text beginis new text endunlawful for any public
utility organized under the laws of this state to offer or sell any security or, if organized
under the laws of any other state or foreign country, to subject property in this state to
an encumbrance for the purpose of securing the payment of any indebtedness unless the
security issuance of the public utility deleted text beginshalldeleted text end new text beginis new text endfirst deleted text beginbedeleted text end approved by the commissionnew text begin, either
as an individual issuance or as one of multiple possible issuances approved in the course
of a periodic proceeding reviewing the utility's proposed sources and uses of capital funds
new text end.
Approval by the commission deleted text beginshalldeleted text end new text beginmust new text endbe by formal written order.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2010, section 216B.62, subdivision 2, is amended to read:


Subd. 2.

Assessing specific utility.

Whenever the commission or department,
in a proceeding upon its own motion, on complaint, or upon an application to it, deleted text beginshall
deem
deleted text end new text begindeems new text endit necessary, in order to carry out the duties imposed under this chapter
and section deleted text begin216A.085deleted text endnew text begin 216A.14new text end (1) to investigate the books, accounts, practices, and
activities of, or make appraisals of the property of, any public utility, (2) to render any
engineering or accounting services to any public utility, or (3) to intervene before an
energy regulatory agency, the public utility shall pay the expenses reasonably attributable
to the investigation, appraisal, service, or intervention. The commission and department
shall ascertain the expenses, and the department shall render a bill therefor to the public
utility, either at the conclusion of the investigation, appraisal, or services, or from time to
time during its progress, which bill shall constitute notice of the assessment and a demand
for payment. The amount of the bills so rendered by the department shall be paid by the
public utility into the state treasury within 30 days from the date of rendition. The total
amount, in any one calendar year, for which any public utility shall become liable, by
reason of costs incurred by the commission within that calendar year, shall not exceed
two-fifths of one percent of the gross operating revenue from retail sales of gas, or electric
service by the public utility within the state in the last preceding calendar year. Where,
pursuant to this subdivision, costs are incurred within any calendar year which are in
excess of two-fifths of one percent of the gross operating revenues, the excess costs shall
not be chargeable as part of the remainder under subdivision 3, but shall be paid out of the
general appropriation to the department and commission. In the case of public utilities
offering more than one public utility service only the gross operating revenues from the
public utility service in connection with which the investigation is being conducted shall
be considered when determining this limitation.

Sec. 9.

Minnesota Statutes 2010, section 216B.62, subdivision 3, is amended to read:


Subd. 3.

Assessing all public utilities.

The department and commission shall
quarterly, at least 30 days before the start of each quarter, estimate the total of their
expenditures in the performance of their duties relating to public utilities under sections
deleted text begin 216A.085deleted text endnew text begin 216A.14new text end and 216B.01 to 216B.67, other than amounts chargeable to public
utilities under subdivision 2, 6, 7, or 8. The remainder shall be assessed by the commission
and department to the several public utilities in proportion to their respective gross
operating revenues from retail sales of gas or electric service within the state during the
last calendar year. The assessment shall be paid into the state treasury within 30 days
after the bill has been transmitted via mail, personal delivery, or electronic service to the
several public utilities, which shall constitute notice of the assessment and demand of
payment thereof. The total amount which may be assessed to the public utilities, under
authority of this subdivision, shall not exceed one-sixth of one percent of the total gross
operating revenues of the public utilities during the calendar year from retail sales of gas
or electric service within the state. The assessment for the third quarter of each fiscal
year shall be adjusted to compensate for the amount by which actual expenditures by
the commission and department for the preceding fiscal year were more or less than the
estimated expenditures previously assessed.

Sec. 10.

Minnesota Statutes 2010, section 216C.052, is amended to read:


216C.052 new text beginENERGY new text endRELIABILITY deleted text beginADMINISTRATORdeleted text endnew text begin AND
INTERVENTION OFFICE
new text end.

Subdivision 1.

Responsibilities.

(a) deleted text beginThere is established the position of reliability
administrator
deleted text endnew text begin The Energy Reliability and Intervention Office is establishednew text end in the
Department of Commercenew text begin to represent the interests of Minnesota residents, businesses,
and governments before bodies and agencies outside the state that make, interpret, or
implement regional, national, and international energy policy and regulate and implement
regional or national energy planning or infrastructure development
new text end. The deleted text beginadministratordeleted text endnew text begin
office
new text end shall act as a source of independent expertise and deleted text begina technical advisor todeleted text endnew text begin advice fornew text end
the commissionernew text begin of commercenew text end, the new text beginPublic Utilities new text endCommissionnew text begin,new text end and the public on issues
related to the reliability new text beginand economics new text endof the electric system. new text beginUnder the guidance of the
commissioner and the commission, the office shall also participate and advocate for the
state's interests in other regional, national, and international energy matters potentially
impacting Minnesota.
new text endIn conducting its work, the deleted text beginadministratordeleted text endnew text begin officenew text end shall provide
assistance to the commissioner new text beginand the commission, as requested, new text endin administering
and implementing the department's duties under new text beginthis section and new text endsections 216B.1612,
216B.1691, 216B.2422, 216B.2425, and 216B.243; chapters 216E, 216F, and 216G; and
rules associated with deleted text beginthose provisionsdeleted text endnew text begin these sectionsnew text end and shall also:

(1) model and monitor new text beginin the state as well as regionally, nationally, and
internationally, as appropriate,
new text endthe use and operation of the energy infrastructure deleted text beginin the
state, including
deleted text endnew text begin, which includesnew text end generation facilities, transmission lines, natural gas
pipelines, new text beginnew and emerging energy technologies, demand response and energy efficiency
technologies,
new text endand other energy infrastructure;

(2) develop and present to the new text begincommissioner and the new text endcommission deleted text beginand partiesdeleted text end
technicalnew text begin advice andnew text end analyses deleted text beginofdeleted text endnew text begin onnew text end proposed infrastructure projectsdeleted text begin,deleted text end and provide technical
advice to the commissionnew text begin within and outside of the state that could impact the statenew text end;

(3) present independent, factual, expert, and technical information on infrastructure
proposals and reliability issues at public meetings deleted text beginhosted by the task force, the
Environmental Quality Board, the department, or the commission
deleted text end.

(b) Upon request and subject to resource constraints, the administrator shall
provide technical assistance regarding matters unrelated to applications for infrastructure
improvements to the task force, the department, or the commission.

(c) The deleted text beginadministrator may not advocate for any particular outcome in a commission
proceeding, but
deleted text endnew text begin officenew text end may give new text beginpolicy or new text endtechnical advice to the commission as to the
impact on the reliability new text beginand economic viability new text endof the energy system of a particular project
or projectsnew text begin of any state, region, or nationnew text end.

Subd. 2.

Administrative issues.

(a) deleted text beginThe commissioner may select the administrator.
The administrator must have at least five years of experience working as a power systems
engineer or transmission planner, or in a position dealing with power system reliability
issues, and may not have been a party or a participant in a commission energy proceeding
for at least one year prior to selection by the commissioner.
deleted text end The commissioner shall
oversee and direct the work of the deleted text beginadministratordeleted text endnew text begin officenew text end, annually review deleted text beginthedeleted text end new text beginits new text endexpenses
deleted text begin of the administratordeleted text end, and annually approve deleted text beginthedeleted text end new text beginits new text endbudget deleted text beginof the administratordeleted text end. The
deleted text begin administratordeleted text end new text begincommissioner new text endmay hire staff and may contract for technical expertise in
performing duties when existing state resources are required for other state responsibilities
or when special expertise is required. deleted text beginThe salary of the administrator is governed by
section 15A.0815, subdivision 2.
deleted text end

(b) Costs relating to a specific proceeding, analysis, or project are not general
administrative costs. For purposes of this section, "energy utility" means public utilities,
generation and transmission cooperative electric associations, and municipal power
agencies providing natural gas or electric service in the state.

(c) The Department of Commerce shall pay:

(1) the general administrative costs of the deleted text beginadministratordeleted text endnew text begin officenew text end, not to exceed
$1,000,000 in a fiscal year, and shall assess energy utilities for those administrative costs.
These costs must be consistent with the budget approved by the commissioner under
paragraph (a). The department shall apportion the costs among all energy utilities in
proportion to their respective gross operating revenues from sales of gas or electric service
within the state during the last calendar year, and shall then render a bill to each utility on
a regular basis; and

(2) costs relating to a specific proceeding analysis or project and shall render a bill to
the specific energy utility or utilities participating in the proceeding, analysis, or project
directly, either at the conclusion of a particular proceeding, analysis, or project, or from
time to time during the course of the proceeding, analysis, or project.

(d) For purposes of administrative efficiency, the department shall assess energy
utilities and issue bills in accordance with the billing and assessment procedures provided
in section 216B.62, to the extent that these procedures do not conflict with this subdivision.
The amount of the bills rendered by the department under paragraph (c) must be paid by
the energy utility into an account in the special revenue fund in the state treasury within
30 days from the date of billing and is appropriated to the department for the purposes
provided in this section. The commission shall approve or approve as modified a rate
schedule providing for the automatic adjustment of charges to recover amounts paid by
utilities under this section. All amounts assessed under this section are in addition to
amounts appropriated to the commission and the department by other law.

deleted text begin Subd. 4. deleted text end

deleted text begin Expiration. deleted text end

deleted text begin Subdivisions 1 and 2 expire June 30, 2012. Subdivision
3 expires June 30, 2008.
deleted text end

Sec. 11.

Minnesota Statutes 2010, section 216C.11, is amended to read:


216C.11 ENERGY CONSERVATION INFORMATION CENTER.

The commissioner shall establish an Energy Information Center in the department's
offices in St. Paul. The information center shall maintain a toll-free telephone information
service and disseminate printed materials on energy conservation topics, including but
not limited to, availability of loans and other public and private financing methods
for energy conservation physical improvements, the techniques and materials used to
conserve energy in buildings, including retrofitting or upgrading insulation and installing
weatherstripping, the projected prices and availability of different sources of energy,
and alternative sources of energy.

The Energy Information Center shall serve as the official Minnesota Alcohol Fuels
Information Center and shall disseminate information, printed, by the toll-free telephone
information service, or otherwise on the applicability and technology of alcohol fuels.

The information center shall include information on the potential hazards of energy
conservation techniques and improvements in the printed materials disseminated. The
commissioner shall not be liable for damages arising from the installation or operation of
equipment or materials recommended by the information center.

The information center shall use the information collected under section 216C.02,
subdivision 1
, to maintain a central source of information on conservation and other
energy-related programs, including both programs required by law or rule and programs
developed and carried on voluntarily. deleted text beginIn particular, the information center shall compile
and maintain information on policies covering disconnections or denials of fuel during
cold weather adopted by public utilities and other fuel suppliers not governed by section
216B.096 or 216B.097, including the number of households disconnected or denied fuel
and the duration of the disconnections or denials.
deleted text end

Sec. 12.

Minnesota Statutes 2010, section 216C.264, subdivision 2, is amended to read:


Subd. 2.

Grants.

The commissioner must make grants of federal and state money
to community action agencies and other public or private nonprofit agencies for the
purpose of weatherizing the residences of low-income persons. deleted text beginGrant applications must
be submitted in accordance with rules promulgated by the commissioner.
deleted 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. 13.

Minnesota Statutes 2010, section 216E.18, subdivision 3, is amended to read:


Subd. 3.

Funding; assessment.

The commission shall finance its baseline studies,
general environmental studies, development of criteria, inventory preparation, monitoring
of conditions placed on site and route permits, and all other work, other than specific site
and route designation, from an assessment made quarterly, at least 30 days before the start
of each quarter, by the commission against all utilities with annual retail kilowatt-hour
sales greater than 4,000,000 kilowatt-hours in the previous calendar year.

Each share shall be determined as follows: (1) the ratio that the annual retail
kilowatt-hour sales in the state of each utility bears to the annual total retail kilowatt-hour
sales in the state of all these utilities, multiplied by 0.667, plus (2) the ratio that the annual
gross revenue from retail kilowatt-hour sales in the state of each utility bears to the annual
total gross revenues from retail kilowatt-hour sales in the state of all these utilities,
multiplied by 0.333, as determined by the commission. The assessment shall be credited
to the special revenue fund and shall be paid to the state treasury within 30 days after
receipt of the bill, which shall constitute notice of said assessment and demand of payment
thereof. The total amount which may be assessed to the several utilities under authority
of this subdivision shall not exceed the sum of the annual budget of the commission
for carrying out the purposes of this subdivision. The assessment for the deleted text beginseconddeleted text endnew text begin thirdnew text end
quarter of each fiscal year shall be adjusted to compensate for the amount by which actual
expenditures by the commission for the preceding fiscal year were more or less than the
estimated expenditures previously assessed.

new text begin EFFECTIVE DATE. new text end

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

Sec. 14. new text beginMELROSE PUBLIC UTILITIES COMMISSION MEMBERSHIP.
new text end

new text begin Notwithstanding Minnesota Statutes, section 412.341, subdivision 1, the city
of Melrose may by ordinance increase the membership of the city's public utilities
commission to a maximum of seven members. The ordinance may also provide for the
terms of the commission members and the terms must be staggered, provide that residency
within the city is not a qualification for serving on the commission, and permit one or
more members of the city council to serve on the commission.
new text end

new text begin EFFECTIVE DATE; LOCAL APPROVAL. new text end

new text begin This section is effective the day after
the governing body of the city of Melrose and its chief clerical officer complete in timely
fashion their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.
new text end

Sec. 15. new text beginREVISOR'S INSTRUCTION.
new text end

new text begin The revisor of statutes shall renumber Minnesota Statutes, section 216C.052, as
Minnesota Statutes, section 216A.14, and also make necessary cross-reference changes
consistent with this renumbering.
new text end

Sec. 16. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2010, section 216A.085 new text end new text begin is repealed.
new text end

new text begin (b) new text end new text begin Minnesota Statutes 2010, section 216C.264, subdivision 4, new text end new text begin is repealed effective
the day following final enactment.
new text end