SF 693

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to the metropolitan council; authorizing the 
  1.3             use of energy forward pricing mechanisms; proposing 
  1.4             coding for new law in Minnesota Statutes, chapter 473. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  [473.1293] [ENERGY FORWARD PRICING MECHANISMS.] 
  1.7      Subdivision 1.  [DEFINITIONS.] The following definitions 
  1.8   apply in this section. 
  1.9      (a) "Energy" means natural gas, heating oil, diesel fuel, 
  1.10  or any other energy source used in metropolitan council 
  1.11  operations. 
  1.12     (b) "Forward pricing mechanism" means either: 
  1.13     (1) a contract or financial instrument that obligates an 
  1.14  entity to buy or sell a specified amount of an energy commodity 
  1.15  at a future date and at a set price; or 
  1.16     (2) an option to buy or sell the contract or financial 
  1.17  instrument. 
  1.18     Subd. 2.  [AUTHORITY PROVIDED.] Notwithstanding any other 
  1.19  law to the contrary, the council may use forward pricing 
  1.20  mechanisms for budget risk reduction. 
  1.21     Subd. 3.  [CONDITIONS.] (a) Forward pricing transactions 
  1.22  made under this section must be made only under the conditions 
  1.23  in paragraphs (b), (c), and (d). 
  1.24     (b) The amount of energy forward priced must not exceed the 
  1.25  estimated energy usage for council operations for the period of 
  2.1   time covered by the forward pricing mechanism. 
  2.2      (c) The holding period and expiration date for any forward 
  2.3   pricing mechanism must not exceed 24 months from the trade date 
  2.4   of the transaction. 
  2.5      (d) Separate accounts must be established for each 
  2.6   operational energy for which forward pricing mechanisms are used 
  2.7   under this section. 
  2.8      Subd. 4.  [WRITTEN POLICIES AND PROCEDURES.] Before 
  2.9   exercising authority under subdivision 2, the council must have 
  2.10  written policies and procedures governing the use of forward 
  2.11  pricing mechanisms. 
  2.12     Subd. 5.  [OVERSIGHT PROCESS.] (a) Before exercising 
  2.13  authority under subdivision 2, the governing body of the council 
  2.14  must establish an oversight process that provides for review of 
  2.15  the council's use of forward pricing mechanisms.  
  2.16     (b) The process must include: 
  2.17     (1) internal or external audit reviews; 
  2.18     (2) quarterly reports to, and review by, an internal 
  2.19  investment committee; and 
  2.20     (3) internal management control. 
  2.21     Sec. 2.  [APPLICATION.] 
  2.22     Section 1 applies in the counties of Anoka, Carver, Dakota, 
  2.23  Hennepin, Ramsey, Scott, and Washington. 
  2.24     Sec. 3.  [EFFECTIVE DATE.] 
  2.25     This act is effective the day following its final enactment.