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Minnesota Legislature

Office of the Revisor of Statutes

SF 100

as introduced - 91st Legislature (2019 - 2020) Posted on 01/16/2019 03:36pm

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to energy; establishing criteria for utility cost recovery of energy storage
system pilot projects; requiring investor-owned utilities to include in integrated
resource plans an assessment of energy storage systems; requiring a cost-benefit
analysis of energy storage systems; appropriating money; requiring a report;
amending Minnesota Statutes 2018, sections 216B.1645, by adding a subdivision;
216B.2422, subdivision 1, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2018, section 216B.1645, is amended by adding a subdivision
to read:


new text begin Subd. 2b. new text end

new text begin Energy storage system pilot projects. new text end

new text begin (a) A public utility may petition the
commission under subdivision 2a to recover costs incurred to implement an energy storage
system pilot project, provided the following conditions are met:
new text end

new text begin (1) the public utility has submitted a report to the commission containing, at a minimum,
the following information regarding the proposed energy storage system pilot project:
new text end

new text begin (i) the storage technology utilized;
new text end

new text begin (ii) the energy storage capacity and the duration of output at that capacity;
new text end

new text begin (iii) the proposed location;
new text end

new text begin (iv) the purchasing and installation costs;
new text end

new text begin (v) how the project will interact with existing distributed generation resources on the
utility's grid; and
new text end

new text begin (vi) the goals the project proposes to achieve, including controlling frequency or voltage,
mitigating transmission congestion, providing emergency power supplies during outages,
reducing curtailment of existing renewable energy generators, and reducing peak power
costs;
new text end

new text begin (2) the utility has adequately responded to any commission requests for additional
information regarding the energy storage system pilot project; and
new text end

new text begin (3) the commission has determined that the energy storage system pilot project is in the
public interest.
new text end

new text begin (b) The commission may modify a proposed energy storage system pilot project the
commission approves for rate recovery.
new text end

new text begin (c) For the purposes of this subdivision:
new text end

new text begin (1) "energy storage system" has the meaning given in section 216B.2422, subdivision
1, paragraph (f); and
new text end

new text begin (2) "pilot project" means a project deployed at a limited number of locations in order to
assess the technical and economic effectiveness of its operations.
new text end

Sec. 2.

Minnesota Statutes 2018, section 216B.2422, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

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

(b) "Utility" means an entity with the capability of generating 100,000 kilowatts or more
of electric power and serving, either directly or indirectly, the needs of 10,000 retail
customers in Minnesota. Utility does not include federal power agencies.

(c) "Renewable energy" means electricity generated through use of any of the following
resources:

(1) wind;

(2) solar;

(3) geothermal;

(4) hydro;

(5) trees or other vegetation;

(6) landfill gas; or

(7) predominantly organic components of wastewater effluent, sludge, or related
by-products from publicly owned treatment works, but not including incineration of
wastewater sludge.

(d) "Resource plan" means a set of resource options that a utility could use to meet the
service needs of its customers over a forecast period, including an explanation of the supply
and demand circumstances under which, and the extent to which, each resource option
would be used to meet those service needs. These resource options include using,
refurbishing, and constructing utility plant and equipment, buying power generated by other
entities, controlling customer loads, and implementing customer energy conservation.

(e) "Refurbish" means to rebuild or substantially modify an existing electricity generating
resource of 30 megawatts or greater.

new text begin (f) "Energy storage system" means commercially available technology capable of
absorbing and storing energy, then delivering the stored energy for use at a later time. For
purposes of this section, energy storage systems must be from a stationary source. For
purposes of this section:
new text end

new text begin (1) an energy storage system may be:
new text end

new text begin (i) either centralized or distributed; or
new text end

new text begin (ii) owned by a load-serving entity or local publicly owned electric utility, a customer
of a load-serving entity or local publicly owned electric utility, a third party, or jointly owned
by two or more of the entities under this item or any other entity;
new text end

new text begin (2) an energy storage system must:
new text end

new text begin (i) reduce demand for peak electrical generation;
new text end

new text begin (ii) defer or substitute for an investment in generation, transmission, or distribution
assets; or
new text end

new text begin (iii) improve the reliable operation of the electrical transmission or distribution grid;
and
new text end

new text begin (3) an energy storage system must:
new text end

new text begin (i) use mechanical, chemical, or thermal processes to store energy that was generated
at one time for use at a later time;
new text end

new text begin (ii) store thermal energy for direct use to heat or cool at a later time in a manner that
reduces the demand for electricity at the later time;
new text end

new text begin (iii) use mechanical, chemical, or thermal processes to store energy generated from
renewable resources for use at a later time; or
new text end

new text begin (iv) use mechanical, chemical, or thermal processes to store energy generated from
mechanical processes that would otherwise be wasted for delivery at a later time.
new text end

new text begin (g) "Investor-owned utility" means a utility, as defined in paragraph (b), that is owned
by private persons.
new text end

Sec. 3.

Minnesota Statutes 2018, section 216B.2422, is amended by adding a subdivision
to read:


new text begin Subd. 7. new text end

new text begin Energy storage systems assessment. new text end

new text begin (a) An investor-owned utility must include
an assessment of energy storage systems as part of each integrated resource plan or plan
modification filed under subdivision 2. The assessment must:
new text end

new text begin (1) consider energy storage systems as both transmission and distribution-interconnected
resources;
new text end

new text begin (2) analyze energy storage systems both as an alternative for and as an adjunct to
generation resources for ancillary services and resource adequacy; and
new text end

new text begin (3) require that in any prudence determination for a new resource acquisition, the resource
options analysis must include a storage alternative.
new text end

new text begin (b) When approving a resource plan, the commission must determine whether, with
respect to the assessment required in paragraph (a):
new text end

new text begin (1) the utility's forecast requirements are based on substantially accurate data and an
adequate forecasting method;
new text end

new text begin (2) the plan identifies and accounts for any present and projected reductions in energy
demand that may result from measures to improve energy efficiency in the industrial,
commercial, residential, and energy-producing sectors of the area being served; and
new text end

new text begin (3) the plan includes appropriate and up-to-date methods for modeling resources,
including the modeling and valuing of flexible operations.
new text end

Sec. 4. new text beginCOST-BENEFIT ANALYSIS OF ENERGY STORAGE SYSTEMS.
new text end

new text begin (a) The commissioner of commerce must contract with an independent consultant selected
through a request for proposal process to produce a report analyzing the potential costs and
benefits of energy storage systems, as defined in Minnesota Statutes, section 216B.2422,
subdivision 1, in Minnesota. When examining the cost-effectiveness of energy storage
systems, the study must analyze:
new text end

new text begin (1) cost savings to ratepayers from the provision of services, including but not limited
to energy price arbitrage, ancillary services, resource adequacy, and transmission and
distribution asset deferral or substitution;
new text end

new text begin (2) direct-cost savings to customers that deploy energy storage systems;
new text end

new text begin (3) an improved ability to integrate renewable resources;
new text end

new text begin (4) improved reliability and power quality;
new text end

new text begin (5) the effect on retail electric rates over the useful life of a given energy storage system
compared to the impact on retail electric rates using nonenergy storage system alternative
over the useful life of the nonenergy storage system alternative;
new text end

new text begin (6) reduced greenhouse gas emissions; and
new text end

new text begin (7) any other value reasonably related to the application of energy storage system
technology.
new text end

new text begin (b) By December 31, 2019, the commissioner of commerce must submit the study to
the chairs and ranking minority members of the legislative committees with jurisdiction
over energy policy and finance.
new text end

Sec. 5. new text beginAPPROPRIATION.
new text end

new text begin $150,000 in fiscal year 2020 is appropriated from the renewable development account
in the special revenue fund established in Minnesota Statutes, section 116C.779, subdivision
1, to conduct the energy storage systems cost-benefit analysis required under section 4.
new text end