SF 930

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

  1.1                          A bill for an act 
  1.2             relating to energy; establishing renewable energy 
  1.3             standard; increasing funding for renewable energy 
  1.4             development and conservation improvement; requiring 
  1.5             rulemaking; repealing green pricing; making clarifying 
  1.6             changes; amending Minnesota Statutes 2002, sections 
  1.7             116C.779; 216B.02, by adding a subdivision; 216B.1611, 
  1.8             subdivision 2; 216B.1645, subdivision 1; 216B.241, 
  1.9             subdivisions 1a, 2; proposing coding for new law in 
  1.10            Minnesota Statutes, chapter 216B; repealing Minnesota 
  1.11            Statutes 2002, sections 216B.169; 216B.1691. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  Minnesota Statutes 2002, section 116C.779, is 
  1.14  amended to read: 
  1.15     116C.779 [FUNDING FOR RENEWABLE DEVELOPMENT.] 
  1.16     (a) The public utility that operates the Prairie Island 
  1.17  nuclear generating plant must transfer to a renewable 
  1.18  development account $500,000 $1,000,000 each year for each dry 
  1.19  cask containing spent fuel that is located at the independent 
  1.20  spent fuel storage installation at Prairie Island after January 
  1.21  1, 1999.  The fund transfer must be made if waste is stored in a 
  1.22  cask for any part of a year.  Funds in the account may be 
  1.23  expended only for development of renewable energy sources and 
  1.24  energy storage technologies that facilitate the development of 
  1.25  intermittent renewable energy sources.  Preference must be given 
  1.26  to development of renewable energy source projects located 
  1.27  within the state.  
  1.28     (b) Expenditures from the account may only be made after 
  2.1   approval by order of the public utilities commission upon a 
  2.2   petition by the public utility. 
  2.3      Sec. 2.  Minnesota Statutes 2002, section 216B.02, is 
  2.4   amended by adding a subdivision to read: 
  2.5      Subd. 1b.  [COMMISSIONER.] "Commissioner" means the 
  2.6   commissioner of commerce. 
  2.7      Sec. 3.  Minnesota Statutes 2002, section 216B.1611, 
  2.8   subdivision 2, is amended to read: 
  2.9      Subd. 2.  [DISTRIBUTED GENERATION; GENERIC PROCEEDING.] (a) 
  2.10  The commission shall initiate a proceeding within 30 days of 
  2.11  July 1, 2001, to establish, by order, generic standards for 
  2.12  utility tariffs for the interconnection and parallel operation 
  2.13  of distributed generation fueled by natural gas or a renewable 
  2.14  fuel, or another similarly clean fuel or combination of fuels of 
  2.15  no more than ten megawatts of interconnected capacity.  At a 
  2.16  minimum, these tariff standards must:  
  2.17     (1) to the extent possible, be consistent with industry and 
  2.18  other federal and state operational and safety standards; 
  2.19     (2) provide for the low-cost, safe, and standardized 
  2.20  interconnection of facilities; 
  2.21     (3) take into account differing system requirements and 
  2.22  hardware, as well as the overall demand load requirements of 
  2.23  individual utilities; 
  2.24     (4) allow for reasonable terms and conditions, consistent 
  2.25  with the cost and operating characteristics of the various 
  2.26  technologies, so that a utility can reasonably be assured of the 
  2.27  reliable, safe, and efficient operation of the interconnected 
  2.28  equipment; and 
  2.29     (5) establish (i) a standard interconnection agreement that 
  2.30  sets forth the contractual conditions under which a company and 
  2.31  a customer agree that one or more facilities may be 
  2.32  interconnected with the company's utility system, and (ii) a 
  2.33  standard application for interconnection and parallel operation 
  2.34  with the utility system. 
  2.35     (b) The commission may develop financial incentives based 
  2.36  on a public utility's performance in encouraging residential and 
  3.1   small business customers to participate in on-site generation. 
  3.2      (c) Distributed generation customers with electric 
  3.3   generation facilities of less than or equal to 10,000 kilowatts 
  3.4   are exempt from utility standby charges.  
  3.5      Sec. 4.  Minnesota Statutes 2002, section 216B.1645, 
  3.6   subdivision 1, is amended to read: 
  3.7      Subdivision 1.  [COMMISSION AUTHORITY.] Upon the petition 
  3.8   of a public utility, the public utilities commission shall 
  3.9   approve or disapprove power purchase contracts, investments, or 
  3.10  expenditures entered into or made by the utility to satisfy the 
  3.11  wind and biomass mandates contained in sections 
  3.12  216B.169 216B.1685, 216B.2423, and 216B.2424, including 
  3.13  reasonable investments and expenditures made to transmit the 
  3.14  electricity generated from sources developed under those 
  3.15  sections that is ultimately used to provide service to the 
  3.16  utility's retail customers, or to develop renewable energy 
  3.17  sources from the account required in section 116C.779. 
  3.18     Sec. 5.  [216B.1685] [RENEWABLE ENERGY STANDARD.] 
  3.19     Subdivision 1.  [DEFINITIONS.] For purposes of this 
  3.20  section, the terms defined in this subdivision have the meanings 
  3.21  given them.  
  3.22     (a) "Renewable energy credit" means a tradable certificate 
  3.23  of proof that one kilowatt-hour of renewable energy resource 
  3.24  electricity from a facility placed in operation after December 
  3.25  31, 2002, was either (i) sold to or generated by a retail 
  3.26  electricity supplier that sells to end-users, (ii) sold to a 
  3.27  utility distribution company that sells to end-users, or (iii) 
  3.28  produced by a self-generator.  Renewable energy credits are 
  3.29  denominated in kilowatt-hours. 
  3.30     (b) "Renewable energy resource" means a technology that 
  3.31  exclusively relies on an energy source that is naturally and 
  3.32  sustainably regenerated over a short time and derived directly 
  3.33  from the sun, indirectly from the sun, or from moving water or 
  3.34  other natural movements and mechanisms of the environment.  
  3.35  Renewable energy technologies include solar, wind, hydroelectric 
  3.36  with a capacity of less than 60 megawatts, or solid fuel biomass 
  4.1   farm-grown as a dedicated energy crop.  A renewable energy 
  4.2   technology does not rely on energy resources derived from fossil 
  4.3   fuels, waste products from fossil fuels, or waste products from 
  4.4   inorganic sources with the exception of landfill gas.  
  4.5      (c) "Renewable energy standard" means the percentage of 
  4.6   electric power consumed in the state that must be derived from 
  4.7   renewable energy resources.  
  4.8      (d) "Retail electricity supplier" means any entity that 
  4.9   sells electric power not for resale to an end-user, including, 
  4.10  but not limited to, electricity providers that are affiliates or 
  4.11  generating companies of public utilities, municipalities, 
  4.12  electric cooperative associations, local governments, special 
  4.13  districts, or direct access suppliers.  
  4.14     Subd. 2.  [ESTABLISHMENT OF RENEWABLE ENERGY STANDARD.] A 
  4.15  renewable energy standard is established at a level equivalent 
  4.16  to all of the electric energy provided to end-users during 2002 
  4.17  that was derived from renewable energy resources, as determined 
  4.18  by the department, commencing January 1, 2004.  The renewable 
  4.19  energy standard shall rise by no less than an additional 1.25 
  4.20  percent of the total state electricity consumption annually by 
  4.21  no later than January 1, 2005, and each year thereafter through 
  4.22  December 31, 2019, and by 0.25 percent in 2020 as follows: 
  4.23     (1) by December 31, 2005, 2002 renewable level plus 1.25 
  4.24  percent; 
  4.25     (2) by December 31, 2006, 2002 renewable level plus 2.5 
  4.26  percent; 
  4.27     (3) by December 31, 2007, 2002 renewable level plus 3.75 
  4.28  percent; 
  4.29     (4) by December 31, 2008, 2002 renewable level plus 5.0 
  4.30  percent; 
  4.31     (5) by December 31, 2009, 2002 renewable level plus 6.25 
  4.32  percent; 
  4.33     (6) by December 31, 2010, 2002 renewable level plus 7.5 
  4.34  percent; 
  4.35     (7) by December 31, 2011, 2002 renewable level plus 8.75 
  4.36  percent; 
  5.1      (8) by December 31, 2012, 2002 renewable level plus 10.0 
  5.2   percent; 
  5.3      (9) by December 31, 2013, 2002 renewable level plus 11.25 
  5.4   percent; 
  5.5      (10) by December 31, 2014, 2002 renewable level plus 12.5 
  5.6   percent; 
  5.7      (11) by December 31, 2015, 2002 renewable level plus 13.75 
  5.8   percent; 
  5.9      (12) by December 31, 2016, 2002 renewable level plus 15.0 
  5.10  percent; 
  5.11     (13) by December 31, 2017, 2002 renewable level plus 16.25 
  5.12  percent; 
  5.13     (14) by December 31, 2018, 2002 renewable level plus 17.5 
  5.14  percent; 
  5.15     (15) by December 31, 2019, 2002 renewable level plus 18.75 
  5.16  percent; and 
  5.17     (16) by December 31, 2020, 2002 renewable level plus 19.0 
  5.18  percent.  
  5.19     Subd. 3.  [RENEWABLE ENERGY CREDITS.] (a) Renewable energy 
  5.20  credits must be certified by the commission.  A certification 
  5.21  fee may be charged for the sole purpose of covering reasonable 
  5.22  costs of certification.  The commission or its duly authorized 
  5.23  agent shall have full inspection and audit rights for the 
  5.24  purpose of verifying certification claims. 
  5.25     (b) The department shall implement a system of cost 
  5.26  containment that does not undermine the market for renewable 
  5.27  energy credits.  If renewable energy credits are not available 
  5.28  on the market for a "cap price" of 4.75 cents or less, the 
  5.29  department shall sell "proxy" credits at the cap price to any 
  5.30  retail electricity supplier.  Retail electricity suppliers may 
  5.31  request any number of either type of credit.  The department 
  5.32  shall use proceeds from sales of proxy credits to purchase 
  5.33  renewable energy credits in the market, lowest prices first, 
  5.34  until the proceeds are expended.  
  5.35     (c) Upon the passage of a renewable energy standard in a 
  5.36  bordering state that includes the same definition of renewable 
  6.1   energy resource and that begins at a level commensurate to the 
  6.2   existing level of renewable energy resources in that state, the 
  6.3   commissioner may facilitate the trading of renewable energy 
  6.4   credits between retail electricity suppliers located in 
  6.5   Minnesota and the bordering state. 
  6.6      (d) Each retail electricity supplier and utility 
  6.7   distribution company shall provide evidence, on an annual basis 
  6.8   to the department, of ownership of renewable energy credits 
  6.9   equal to the product of its total electricity sales to 
  6.10  end-users, denominated in kilowatt-hours, and the renewable 
  6.11  energy standard.  
  6.12     (e) All retail electricity suppliers shall disclose in 
  6.13  their customer bills the fraction of sales that are accompanied 
  6.14  by renewable energy credits.  
  6.15     Subd. 4.  [RULES.] The commissioner shall adopt rules 
  6.16  necessary to implement this section.  It is not the intent of 
  6.17  this section to preclude commission oversight of the performance 
  6.18  of regulated utilities in meeting the requirements of this 
  6.19  section.  
  6.20     Subd. 5.  [EVALUATION.] The department shall gather 
  6.21  available data and devise measures to evaluate the 
  6.22  implementation of this section.  The commissioner shall report 
  6.23  on an annual basis by March 15 of each year on compliance with 
  6.24  the renewable energy standards.  
  6.25     Subd. 6.  [ENFORCEMENT.] (a) The false representation or 
  6.26  false certification of renewable energy credits is punishable as 
  6.27  a misdemeanor.  
  6.28     (b) If a retail electricity supplier or utility 
  6.29  distribution company fails to produce the number of renewable 
  6.30  energy credits required under this section, the retail 
  6.31  electricity supplier or utility distribution company is subject 
  6.32  to a civil penalty of up to three times the market value of a 
  6.33  renewable energy credit for each credit that is not produced.  
  6.34     Sec. 6.  Minnesota Statutes 2002, section 216B.241, 
  6.35  subdivision 1a, is amended to read: 
  6.36     Subd. 1a.  [INVESTMENT, EXPENDITURE, AND CONTRIBUTION; 
  7.1   PUBLIC UTILITY.] (a) For purposes of this subdivision and 
  7.2   subdivision 2, "public utility" has the meaning given it in 
  7.3   section 216B.02, subdivision 4.  Each public utility shall spend 
  7.4   and invest for energy conservation improvements under this 
  7.5   subdivision and subdivision 2 the following amounts: 
  7.6      (1) for a utility that furnishes gas service, 0.5 percent 
  7.7   of its gross operating revenues from service provided in the 
  7.8   state; 
  7.9      (2) for a utility that furnishes electric service, 1.5 two 
  7.10  percent of its gross operating revenues from service provided in 
  7.11  the state; and 
  7.12     (3) for a utility that furnishes electric service and that 
  7.13  operates a nuclear-powered electric generating plant within the 
  7.14  state, two three percent of its gross operating revenues from 
  7.15  service provided in the state. 
  7.16  For purposes of this paragraph (a), "gross operating revenues" 
  7.17  do not include revenues from large electric customer facilities 
  7.18  exempted by the commissioner under paragraph (b). 
  7.19     (b) The owner of a large electric customer facility may 
  7.20  petition the commissioner to exempt both electric and gas 
  7.21  utilities serving the large energy customer facility from the 
  7.22  investment and expenditure requirements of paragraph (a) with 
  7.23  respect to retail revenues attributable to the facility.  At a 
  7.24  minimum, the petition must be supported by evidence relating to 
  7.25  competitive or economic pressures on the customer and a showing 
  7.26  by the customer of reasonable efforts to identify, evaluate, and 
  7.27  implement cost-effective conservation improvements at the 
  7.28  facility.  If a petition is filed on or before October 1 of any 
  7.29  year, the order of the commissioner to exempt revenues 
  7.30  attributable to the facility can be effective no earlier than 
  7.31  January 1 of the following year.  The commissioner shall not 
  7.32  grant an exemption if the commissioner determines that granting 
  7.33  the exemption is contrary to the public interest.  The 
  7.34  commissioner may, after investigation, rescind any exemption 
  7.35  granted under this paragraph upon a determination that 
  7.36  cost-effective energy conservation improvements are available at 
  8.1   the large electric customer facility.  For the purposes of this 
  8.2   paragraph, "cost-effective" means that the projected total cost 
  8.3   of the energy conservation improvement at the large electric 
  8.4   customer facility is less than the projected present value of 
  8.5   the energy and demand savings resulting from the energy 
  8.6   conservation improvement.  For the purposes of investigations by 
  8.7   the commissioner under this paragraph, the owner of any large 
  8.8   electric customer facility shall, upon request, provide the 
  8.9   commissioner with updated information comparable to that 
  8.10  originally supplied in or with the owner's original petition 
  8.11  under this paragraph. 
  8.12     (c) The commissioner may require investments or spending 
  8.13  greater than the amounts required under this subdivision for a 
  8.14  public utility whose most recent advance forecast required under 
  8.15  section 216B.2422 or 216C.17 projects a peak demand deficit of 
  8.16  100 megawatts or greater within five years under mid-range 
  8.17  forecast assumptions.  
  8.18     (d) A public utility or owner of a large electric customer 
  8.19  facility may appeal a decision of the commissioner under 
  8.20  paragraph (b) or (c) to the commission under subdivision 2.  In 
  8.21  reviewing a decision of the commissioner under paragraph (b) or 
  8.22  (c), the commission shall rescind the decision if it finds that 
  8.23  the required investments or spending will: 
  8.24     (1) not result in cost-effective energy conservation 
  8.25  improvements; or 
  8.26     (2) otherwise not be in the public interest. 
  8.27     (e) Each utility shall determine what portion of the amount 
  8.28  it sets aside for conservation improvement will be used for 
  8.29  conservation improvements under subdivision 2 and what portion 
  8.30  it will contribute to the energy and conservation account 
  8.31  established in subdivision 2a.  A public utility may propose to 
  8.32  the commissioner to designate that all or a portion of funds 
  8.33  contributed to the account established in subdivision 2a be used 
  8.34  for research and development projects that can best be 
  8.35  implemented on a statewide basis.  Contributions must be 
  8.36  remitted to the commissioner by February 1 of each year.  
  9.1   Nothing in this subdivision prohibits a public utility from 
  9.2   spending or investing for energy conservation improvement more 
  9.3   than required in this subdivision. 
  9.4      Sec. 7.  Minnesota Statutes 2002, section 216B.241, 
  9.5   subdivision 2, is amended to read: 
  9.6      Subd. 2.  [PROGRAMS.] (a) The commissioner may require 
  9.7   public utilities to make investments and expenditures in energy 
  9.8   conservation improvements, explicitly setting forth the interest 
  9.9   rates, prices, and terms under which the improvements must be 
  9.10  offered to the customers.  The required programs must cover a 
  9.11  two-year period.  Public utilities shall file conservation 
  9.12  improvement plans by June 1, on a schedule determined by order 
  9.13  of the commissioner.  Plans received by a public utility by June 
  9.14  1 must be approved or approved as modified by the commissioner 
  9.15  by December 1 of that same year.  The commissioner shall give 
  9.16  special consideration and encouragement to programs that bring 
  9.17  about significant net savings through the use of 
  9.18  energy-efficient lighting.  The commissioner shall evaluate the 
  9.19  program on the basis of cost effectiveness and the reliability 
  9.20  of technologies employed.  The commissioner's order must provide 
  9.21  to the extent practicable for a free choice, by consumers 
  9.22  participating in the program, of the device, method, material, 
  9.23  or project constituting the energy conservation improvement and 
  9.24  for a free choice of the seller, installer, or contractor of the 
  9.25  energy conservation improvement, provided that the device, 
  9.26  method, material, or project seller, installer, or contractor is 
  9.27  duly licensed, certified, approved, or qualified, including 
  9.28  under the residential conservation services program, where 
  9.29  applicable.  
  9.30     (b) The commissioner may require a utility to make an 
  9.31  energy conservation improvement investment or expenditure 
  9.32  whenever the commissioner finds that the improvement will result 
  9.33  in energy savings at a total cost to the utility less than the 
  9.34  cost to the utility to produce or purchase an equivalent amount 
  9.35  of new supply of energy.  The commissioner shall nevertheless 
  9.36  ensure that every public utility operate one or more programs 
 10.1   under periodic review by the department.  
 10.2      (c) Each public utility subject to subdivision 1a may spend 
 10.3   and invest annually up to ten percent of the total amount 
 10.4   required to be spent and invested on energy conservation 
 10.5   improvements under this section by the utility on research and 
 10.6   development projects that meet the definition of energy 
 10.7   conservation improvement in subdivision 1 and that are funded 
 10.8   directly by the public utility.  
 10.9      (d) A public utility may not spend for or invest in energy 
 10.10  conservation improvements that directly benefit a large electric 
 10.11  customer facility for which the commissioner has issued an 
 10.12  exemption pursuant to subdivision 1a, paragraph (b).  The 
 10.13  commissioner shall consider and may require a utility to 
 10.14  undertake a program suggested by an outside source, including a 
 10.15  political subdivision or a nonprofit or community organization. 
 10.16     (e) The commissioner may, by order, establish a list of 
 10.17  programs that may be offered as energy conservation improvements 
 10.18  by a public utility, municipal utility, cooperative electric 
 10.19  association, or other entity providing conservation services 
 10.20  pursuant to this section.  The list of programs may include 
 10.21  rebates for high-efficiency appliances, rebates or subsidies for 
 10.22  high-efficiency lamps, small business energy audits, and 
 10.23  building recommissioning.  The commissioner may, by order, 
 10.24  change this list to add or subtract programs as the commissioner 
 10.25  determines is necessary to promote efficient and effective 
 10.26  conservation programs. 
 10.27     (f) The commissioner shall ensure that a portion of the 
 10.28  money spent on residential conservation improvement programs is 
 10.29  devoted to programs that directly address the needs of renters 
 10.30  and low-income persons, in proportion to the amount the utility 
 10.31  has historically spent on such programs based on the most recent 
 10.32  three-year average relative to the utility's total conservation 
 10.33  spending under this section, unless an insufficient number of 
 10.34  appropriate programs are available. 
 10.35     (g) A utility, a political subdivision, or a nonprofit or 
 10.36  community organization that has suggested a program, the 
 11.1   attorney general acting on behalf of consumers and small 
 11.2   business interests, or a utility customer that has suggested a 
 11.3   program and is not represented by the attorney general under 
 11.4   section 8.33 may petition the commission to modify or revoke a 
 11.5   department decision under this section, and the commission may 
 11.6   do so if it determines that the program is not cost effective, 
 11.7   does not adequately address the residential conservation 
 11.8   improvement needs of low-income persons, has a long-range 
 11.9   negative effect on one or more classes of customers, or is 
 11.10  otherwise not in the public interest.  The commission shall 
 11.11  reject a petition that, on its face, fails to make a reasonable 
 11.12  argument that a program is not in the public interest. 
 11.13     (h) The commissioner may order a public utility to include, 
 11.14  with the filing of the utility's proposed conservation 
 11.15  improvement plan under paragraph (a), the results of an 
 11.16  independent audit of the utility's conservation improvement 
 11.17  programs and expenditures performed by the department or an 
 11.18  auditor with experience in the provision of energy conservation 
 11.19  and energy efficiency services approved by the commissioner and 
 11.20  chosen by the utility.  The audit must specify the energy 
 11.21  savings or increased efficiency in the use of energy within the 
 11.22  service territory of the utility that is the result of the 
 11.23  spending and investments.  The audit must evaluate the cost 
 11.24  effectiveness of the utility's conservation programs. 
 11.25     (i) Up to three percent of a utility's conservation 
 11.26  spending obligation under this section may be used for program 
 11.27  pre-evaluation, testing, and monitoring and program audit and 
 11.28  evaluation.  
 11.29     (j) At least 33 percent of a utility's conservation 
 11.30  spending obligation under subdivision 1a, paragraph (a), clauses 
 11.31  (2) and (3), must be targeted to reduce base-load energy use as 
 11.32  defined by the commissioner.  Priorities for the expenditure of 
 11.33  funds under this paragraph are to reduce the energy costs of 
 11.34  schools and government buildings and to promote economic 
 11.35  development by reducing the energy costs of businesses.  
 11.36     Sec. 8.  [REPEALER.] 
 12.1      Minnesota Statutes 2002, sections 216B.169 and 216B.1691, 
 12.2   are repealed.