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Minnesota Legislature

Office of the Revisor of Statutes

SF 100

1st Engrossment - 91st Legislature (2019 - 2020) Posted on 01/25/2019 03:37pm

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.16, 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.16, is amended by adding a subdivision
to read:


new text begin Subd. 7e. 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 this section to recover costs associated with the implementation of an
energy storage system pilot project. As part of the petition, the public utility must submit 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 (1) the storage technology utilized;
new text end

new text begin (2) the energy storage capacity and the duration of output at that capacity;
new text end

new text begin (3) the proposed location;
new text end

new text begin (4) the purchase and installation costs;
new text end

new text begin (5) how the project will interact with existing distributed generation resources on the
utility's grid; and
new text end

new text begin (6) the goals the project proposes to achieve, which may include 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 (b) A utility may petition the commission to approve a rate schedule that provides for
the automatic adjustment of charges to recover prudently incurred investments, expenses,
or costs associated with energy storage system pilot projects approved by the commission
under this subdivision. A petition filed under this subdivision must include the elements
listed in section 216B.1645, subdivision 2a, paragraph (b), clauses (1) to (4), and must
describe the benefits of the pilot project.
new text end

new text begin (c) The commission may approve, or approve as modified, a rate schedule filed under
this subdivision if it determines the proposed energy storage system pilot project is in the
public interest. A rate schedule filed under this subdivision may include the elements listed
in section 216B.1645, subdivision 2a, paragraph (a), clauses (1) to (5).
new text end

new text begin (d) The commission must make its determination under paragraph (c) within 90 days of
the filing under paragraph (a).
new text end

new text begin (e) Nothing in this subdivision prohibits or deters the deployment of energy storage
systems.
new text end

new text begin (f) 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; and
new text end

new text begin (2) "pilot project" means a project that is owned, operated, and controlled by a public
utility to optimize safe and reliable system operations and is deployed at a limited number
of locations in order to assess the technical and economic effectiveness of its operations.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
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 a commercially available technology that:
new text end

new text begin (1) uses mechanical, chemical, or thermal processes to:
new text end

new text begin (i) store energy, including energy generated from renewable resources and energy that
would otherwise be wasted, and deliver the stored energy for use at a later time; or
new text end

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

new text begin (2) is composed of stationary equipment;
new text end

new text begin (3) if being used for electric grid benefits, is operationally visible and capable of being
controlled by the distribution or transmission entity managing it, to enable and optimize the
safe and reliable operation of the electric system; and
new text end

new text begin (4) achieves any of the following:
new text end

new text begin (i) reduces peak or electrical demand;
new text end

new text begin (ii) defers the need or substitutes for an investment in electric generation, transmission,
or distribution assets;
new text end

new text begin (iii) improves the reliable operation of the electrical transmission or distribution systems,
while ensuring transmission or distribution needs are not created; or
new text end

new text begin (iv) lowers customer costs by storing energy when the cost of generating or purchasing
it is low and delivering it to customers when those costs are high.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
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) Each public utility required to file a
resource plan under subdivision 2 must include in the filing an assessment of energy storage
systems that analyzes how the deployment of energy storage systems contributes to:
new text end

new text begin (1) meeting identified generation and capacity needs; and
new text end

new text begin (2) evaluating ancillary services.
new text end

new text begin (b) The assessment must employ appropriate modeling methods to enable the analysis
required in paragraph (a).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4. new text beginREPORT; COST-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. The study may also include scenarios examining energy storage
systems that are not capable of being controlled by a utility. The commissioner must engage
a broad group of Minnesota stakeholders, including electric utilities and others, to develop
and provide information for the report. The study must:
new text end

new text begin (1) identify and measure the different potential costs and savings produced by energy
storage system deployment, including but not limited to:
new text end

new text begin (i) generation, transmission, and distribution facilities asset deferral or substitution;
new text end

new text begin (ii) impacts on ancillary services costs;
new text end

new text begin (iii) impacts on transmission and distribution congestion;
new text end

new text begin (iv) impacts on peak power costs;
new text end

new text begin (v) impacts on emergency power supplies during outages;
new text end

new text begin (vi) impacts on curtailment of renewable energy generators; and
new text end

new text begin (vii) reduced greenhouse gas emissions;
new text end

new text begin (2) analyze and estimate the:
new text end

new text begin (i) costs and savings to customers that deploy energy storage systems;
new text end

new text begin (ii) impact on the utility's ability to integrate renewable resources;
new text end

new text begin (iii) impact on grid reliability and power quality; and
new text end

new text begin (iv) effect on retail electric rates over the useful life of a given energy storage system
compared to providing the same services using other facilities or resources;
new text end

new text begin (3) consider the findings of analysis conducted by the Midcontinent Independent System
Operator on energy storage capacity accreditation and participation in regional energy
markets, including updates of the analysis; and
new text end

new text begin (4) include case studies of existing energy storage applications currently providing the
benefits described in clauses (1) and (2).
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 senate and house of representatives
committees with jurisdiction over energy policy and finance.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
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 the commissioner of commerce, to conduct the energy storage systems cost-benefit
analysis required under section 4.
new text end