SF 876

as introduced - 88th Legislature (2013 - 2014) Posted on 03/01/2013 09:19am

A bill for an act
relating to energy; providing for economic development rate plans for public
utilities; amending Minnesota Statutes 2012, section 216B.161.

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

Section 1.

Minnesota Statutes 2012, section 216B.161, is amended to read:

216B.161 AREA new text begin AND ECONOMIC new text end DEVELOPMENT RATE deleted text begin PLAN deleted text end new text begin PLANS new text end .

Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms
have the meanings given them in this subdivision.

(b) "Area development rate" means a rate schedule established by a utility that
provides customers within an area development zone service under a base utility rate
schedule, except that charges may be reduced from the base rate as agreed upon by the
utility and the customer consistent with this section.

(c) "Area development zone" means a contiguous or noncontiguous area designated
by an authority or municipality for development or redevelopment and within which one
of the following conditions exists:

(1) obsolete buildings not suitable for improvement or conversion or other identified
hazards to the health, safety, and general well-being of the community;

(2) buildings in need of substantial rehabilitation or in substandard condition; or

(3) low values and damaged investments.

(d) "Authority" means a rural development financing authority established under
sections 469.142 to 469.151; a housing and redevelopment authority established under
sections 469.001 to 469.047; a port authority established under sections 469.048 to
469.068; an economic development authority established under sections 469.090
to 469.108; a redevelopment agency as defined in sections 469.152 to 469.165; the
Iron Range Resources and Rehabilitation Board established under section 298.22; a
municipality that is administering a development district created under sections 469.124
to 469.134 or any special law; a municipality that undertakes a project under sections
469.152 to 469.165, except a town located outside the metropolitan area as defined
in section 473.121, subdivision 2, or with a population of 5,000 persons or less; or a
municipality that exercises the powers of a port authority under any general or special law.

(e) new text begin "Economic development customer" means a business of at least 350 kilowatts of
peak demand at a single site that provides a utility with a sworn affidavit that it is likely to
expand operations within the state or likely to relocate operations to the state if the utility
offers the business a discounted rate under subdivision 5.
new text end

new text begin (f) "Economic development expenses" mean expenses incurred by a utility to attract
business expansion or relocation in the service area of a utility.
new text end

new text begin (g) "Economic development rate" means a rate schedule established by a utility that
provides service to customers designated as economic development customers under a
base utility rate schedule, except that charges may be reduced from the base rate as agreed
upon by the utility and the customer consistent with this section.
new text end

new text begin (h) new text end "Municipality" means a city, however organized, and, with respect to a project
undertaken under sections 469.152 to 469.165, "municipality" has the meaning given in
sections 469.152 to 469.165, and, with respect to a project undertaken under sections
469.142 to 469.151 or a county or multicounty project undertaken under sections 469.004
to 469.008, also includes any county.

Subd. 2.

Area development rate.

The commission may allow gas or electric public
utilities to offer area development rates. The program must be designed to assist industrial
revitalization projects located within the service area of the participating utility.

Subd. 3.

Terms and conditions of rate.

An area development rate offered under
this section must:

(1) be offered for a specified length of time to be determined by the commission;

(2) be offered as a supplement to other development incentives offered by the
authority or municipality in which the rate is available;

(3) be available only to new or expanding manufacturing or wholesale trade
customers;

(4) be designed to recover at least the incremental cost of providing service to the
participating customers;

(5) be offered in a fixed number of area development zones; and

(6) include a provision that the utility provide participating customers with an
energy audit and inform those customers of all existing energy conservation programs
available from the utility.

Recovery of costs under clause (4) must not be from residential customers. A utility
within a general rate case, may seek recovery of the difference in revenue collected under
the area development plan rate and what would have been collected under the standard
tariff.

new text begin Subd. 5. new text end

new text begin Economic development rate. new text end

new text begin (a) The commission may allow gas or
electric public utilities to offer economic development rates, subject to the requirements of
this section. Prior to implementing an economic development rate, the utility must file with
the commission for approval a description of the programs and services the utility will offer
to support economic development within its service territory including, but not limited to,
business location consultation, infrastructure availability, rate design options, a description
of the utility's plans for economic development within its service territory, and proposed
economic development expenses and activities. The plan must include a provision that the
utility provide economic development customers with an energy audit and inform those
customers of all existing energy conservation programs available from the utility. The
commission may approve the plan if it finds that the plan is consistent with the public
interest, likely to support business and jobs growth, and is cost-effective for the utility's
customers. Upon approval of the plan, the commission will require the utility to submit
annual reports summarizing the costs and benefits of the economic development rate.
new text end

new text begin (b) An economic development rate offered under this section is subject to the
approval of the commission and must:
new text end

new text begin (1) be offered for a specified length of time to be determined by the commission;
new text end

new text begin (2) be granted only to economic development customers that are expanding within
the utility's service territory or are relocating operations to the state; and
new text end

new text begin (3) recover incremental revenues from an economic development customer that
exceed the incremental cost of providing service to that customer over the term the rate
will be offered.
new text end

new text begin (c) A utility with an approved economic development plan under paragraph (a)
may seek recovery of:
new text end

new text begin (1) the difference in revenue collected from customers with economic development
rates and what would have been collected from those customers under the base utility
rate schedule; and
new text end

new text begin (2) the utility's economic development expenses incurred under the plan. The
commission shall recognize and include these costs in the determination of just and
reasonable rates under section 216B.16, as if the investments and expenses were directly
made or incurred by the utility in furnishing utility service.
new text end