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SF 113

as introduced - 85th Legislature (2007 - 2008) Posted on 06/21/2017 11:31am

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Current Version - as introduced

A bill for an act
relating to energy; establishing renewable energy standard; amending Minnesota
Statutes 2006, section 216B.1691.

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

Section 1.

Minnesota Statutes 2006, section 216B.1691, is amended to read:


216B.1691 RENEWABLE ENERGY OBJECTIVES.

Subdivision 1.

Definitions.

(a) Unless otherwise specified in law, "eligible energy
technology" means an energy technology that:

(1) generates electricity from the following renewable energy sources: solar; wind;
hydroelectric with a capacity of less than 60 100 megawatts; hydrogen, provided that
after January 1, 2010, the hydrogen must be generated from the resources listed in this
clause; or biomass, which includes 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; and

(2) was not mandated by Laws 1994, chapter 641, or by commission order issued
pursuant to that chapter prior to August 1, 2001.

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

(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.

Subd. 2.

Eligible energy objectives.

(a) Each electric utility shall make a good
faith effort to generate or procure sufficient electricity generated by an eligible energy
technology to provide its retail consumers, or the retail customers of a distribution utility
to which the electric utility provides wholesale electric service, so that:

(1) commencing in 2005, at least one percent of the electric utility's total retail
electric sales is generated by eligible energy technologies;

(2) the amount provided under clause (1) is increased by one percent of the utility's
total retail electric sales each year until 2015 2010; and

(3) ten five percent of the electric energy provided to retail customers in Minnesota
by 2010
is generated by eligible energy technologies.

(b) Of the eligible energy technology generation required under paragraph (a),
clauses (1) and (2), not less than 0.5 percent of the energy must be generated by biomass
energy technologies, including 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, by 2005. By 2010, one percent of the eligible technology generation
required under paragraph (a), clauses (1) and (2), shall be generated by biomass energy
technologies. An energy recovery facility used to capture the heat value of mixed
municipal solid waste or refuse-derived fuel from mixed municipal solid waste, with a
power sales agreement in effect as of May 29, 2003, that terminates after December 31,
2010, does not qualify as an eligible energy technology unless the agreement provides for
rate adjustment in the event the facility qualifies as a renewable energy source.

Subd. 2a.

Eligible energy standard.

Each electric utility shall generate or procure
sufficient electricity generated by an eligible energy technology to provide its retail
customers, or the retail customers of a distribution utility to which the electric utility
provides wholesale electric service, so that at least the following percentages of the
electric utility's total retail electric sales is generated by eligible energy technologies
by the end of the year indicated:

(1)
2013
11 percent
(2)
2015
15 percent
(3)
2020
25 percent

To be counted toward satisfying the standard, energy, other than energy generated within
the state by an eligible energy technology using hydroelectric or biomass as an energy
source, must be generated by a facility originally placed in service after January 1, 1975.
The commission must delay or modify the standard for an electric utility if it finds that
compliance with a standard is not in the public interest because compliance will either
produce undesirable impacts on the reliability of the utility's system or on the utility's
ratepayers or if it finds that compliance is not technically feasible. The standard is both
an individual electric utility standard and a statewide standard so that by the end of 2020
at least 25 percent of the electric energy provided to retail customers in Minnesota is
generated by eligible energy technologies.

(c) Subd. 2b.

Commission order.

By June 1, 2004, and as needed thereafter, the
commission shall issue an order detailing the criteria and standards by which it will
measure an electric utility's efforts to meet the renewable energy objectives of this section
to determine whether the utility is making the required good faith effort. In this order, the
commission shall include criteria and standards that protect against undesirable impacts
on the reliability of the utility's system and economic impacts on the utility's ratepayers
and that consider technical feasibility.

(d) In its order under paragraph (c), the commission shall provide for a weighted
scale of how energy produced by various eligible energy technologies shall count toward a
utility's objective. In establishing this scale, the commission shall consider the attributes
of various technologies and fuels, and shall establish a system that grants multiple credits
toward the objectives for those technologies and fuels the commission determines is in
the public interest to encourage.

Subd. 3.

Utility plans filed with commission.

(a) Each electric utility shall report
on its plans, activities, and progress with regard to these objectives and standards in its
filings under section 216B.2422 or in a separate report submitted to the commission every
two years, whichever is more frequent, demonstrating to the commission that the utility is
making the required good faith
utility's effort to comply with this section. In its resource
plan or a separate report, each electric utility shall provide a description of:

(1) the status of the utility's renewable energy mix relative to the good faith objective
and standards
;

(2) efforts taken to meet the objective and standards;

(3) any obstacles encountered or anticipated in meeting the objective or standards;
and

(4) potential solutions to the obstacles.

(b) The commissioner shall compile the information provided to the commission
under paragraph (a), and report to the chairs of the house of representatives and senate
committees with jurisdiction over energy and environment policy issues as to the progress
of utilities in the state in increasing the amount of renewable energy provided to retail
customers, with any recommendations for regulatory or legislative action, by January
15 of each odd-numbered year.

Subd. 4.

Renewable energy credits.

(a) To facilitate compliance with this section,
the commission, by rule or order, may establish a program for tradable credits for
electricity generated by an eligible energy technology. In doing so, the commission shall
implement a system that constrains or limits the cost of credits, taking care to ensure that
such a system does not undermine the market for those credits.

(b) In lieu of generating or procuring energy directly to satisfy the renewable energy
objective and standard of this section, an electric utility may purchase sufficient renewable
energy credits, issued pursuant to this subdivision, to meet its objective and standard.

(c) Upon the passage of a renewable energy standard, portfolio, or objective in
a bordering state that includes a similar definition of eligible energy technology or
renewable energy, the commission may facilitate the trading of renewable energy credits
between states.

Subd. 5.

Technology based on fuel combustion.

(a) Electricity produced by fuel
combustion may only count toward a utility's objectives or standards if the generation
facility:

(1) was constructed in compliance with new source performance standards
promulgated under the federal Clean Air Act for a generation facility of that type; or

(2) employs the maximum achievable or best available control technology available
for a generation facility of that type.

(b) An eligible energy technology may blend or co-fire a fuel listed in subdivision 1,
paragraph (a), clause (1), with other fuels in the generation facility, but only the percentage
of electricity that is attributable to a fuel listed in that clause can be counted toward an
electric utility's renewable energy objectives.

Subd. 6.

Electric utility that owns nuclear generation facility.

(a) An electric
utility that owns a nuclear generation facility, as part of its good faith effort under this
subdivision and subdivision 2, shall deploy an additional 300 megawatts of nameplate
capacity of wind energy conversion systems by 2010, beyond the amount of wind energy
capacity to which the utility is required by law or commission order as of May 1, 2003.
At least 100 megawatts of this capacity are to be wind energy conversion systems of two
megawatts or less, which shall not be eligible for the production incentive under section
216C.41. To the greatest extent technically feasible and economic, these 300 megawatts
of wind energy capacity are to be distributed geographically throughout the state. The
utility may opt to own, construct, and operate up to 100 megawatts of this wind energy
capacity, except that the utility may not own, construct, or operate any of the facilities
that are under two megawatts of nameplate capacity. The deployment of the wind energy
capacity under this subdivision must be consistent with the outcome of the engineering
study required under Laws 2003, First Special Session chapter 11, article 2, section 21.

(b) The renewable energy objective set forth in subdivision 2 shall be a requirement
for the public utility that owns the Prairie Island nuclear generation plant. The objective is
a requirement subject to resource planning and least-cost planning requirements in section
216B.2422 , unless implementation of the objective can reasonably be shown to jeopardize
the reliability of the electric system. The least-cost planning analysis must include the
costs of ancillary services and other necessary generation and transmission upgrades.

(c) (b) Also as part of its good faith effort under this section, the utility that owns
a nuclear generation facility is to enter into a power purchase agreement by January 1,
2004, for ten to 20 megawatts of biomass energy and capacity at an all-inclusive price
not to exceed $55 per megawatt-hour, for a project described in section 216B.2424,
subdivision 5
, paragraph (e), clause (2). The project must be operational and producing
energy by June 30, 2005.

Subd. 7.

Compliance.

The commission must regularly investigate whether an
electric utility is in compliance with its standard obligation under subdivision 2a and if
it finds noncompliance must order the electric utility to construct facilities or purchase
credits to achieve compliance. If an electric utility fails to comply with an order under
this subdivision, the commission must impose a financial penalty on the electric utility
in an amount of five cents for each kilowatt hour the electric utility is out of compliance
with its standard obligation.

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700 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155 ♦ Phone: (651) 296-2868 ♦ TTY: 1-800-627-3529 ♦ Fax: (651) 296-0569