SF 1018

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 04/07/2021 09:39am

A bill for an act
relating to energy; creating the 2021 polar vortex loan account; eliminating the
sunset for recovery of gas utility infrastructure costs; appropriating money;
repealing Laws 2005, chapter 97, article 10, section 3, as amended.

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

Section 1. new text begin MUNICIPAL NATURAL GAS UTILITIES; 2021 POLAR VORTEX
LOAN ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Commissioner" means the commissioner of commerce.
new text end

new text begin (c) "Critical period" means the period beginning February 12, 2021, and ending February
17, 2021.
new text end

new text begin (d) "Incremental cost" means the average unit price a utility paid for natural gas purchased
for immediate delivery during the critical period, minus the average natural gas unit price
for wholesale natural gas the utility paid during the period between February 5, 2021, and
February 10, 2021.
new text end

new text begin (e) "Incremental volume" means the difference between the volume of gas a utility
purchased for immediate delivery in Minnesota during the critical period and the volume
of gas a utility distributed in Minnesota between February 5, 2021, and February 10, 2021.
new text end

new text begin (f) "Spot price" means the price paid per unit for an immediate delivery of natural gas.
new text end

new text begin (g) "Utility" means a nonprofit municipal utility established under Minnesota Statutes,
chapter 412, that (1) is owned by the city to which it provides service, and (2) sells natural
gas to retail customers in Minnesota.
new text end

new text begin Subd. 2. new text end

new text begin Establishment of account; expenditures. new text end

new text begin The 2021 polar vortex loan account
is established in a special revenue fund. The commissioner must manage the account. Money
in the account may be used to make loans under this section.
new text end

new text begin Subd. 3. new text end

new text begin Purpose. new text end

new text begin The 2021 polar vortex loan account is established to alleviate cash
flow problems experienced by Minnesota municipal gas utilities that purchased natural gas
supplies for immediate delivery at unusually high prices during the extreme cold weather
in February 2021.
new text end

new text begin Subd. 4. new text end

new text begin Eligible applicants. new text end

new text begin A utility that purchased natural gas for immediate delivery
during the critical period to distribute the natural gas to Minnesota retail natural gas customers
is eligible to receive a loan under this section.
new text end

new text begin Subd. 5. new text end

new text begin Applications. new text end

new text begin (a) An applicant for a loan under this section must file an
application with the commissioner on a form developed by the commissioner. The application
must require an applicant to supply:
new text end

new text begin (1) the utility's incremental cost and incremental volume;
new text end

new text begin (2) evidence indicating the prices and volumes of natural gas purchased by the utility
during the critical period that the utility used to calculate the utility's incremental cost and
incremental volume; and
new text end

new text begin (3) any additional information required by the commissioner.
new text end

new text begin (b) The commissioner must develop procedures governing the filing of applications,
review of applications, and awarding of loans under this section.
new text end

new text begin Subd. 6. new text end

new text begin Loan terms; limits; repayment. new text end

new text begin (a) A loan made under this section must be
a zero-interest loan with a term not exceeding five years.
new text end

new text begin (b) The commissioner must determine the amount of a loan based on the information
provided in an application filed under this section. A utility's loan must not exceed the
utility's incremental cost multiplied by its incremental volume. The commissioner may
reduce the amount of loans proportionately if the demand for loan assistance exceeds the
funds available for loans.
new text end

new text begin (c) Loan principal repayments must be made to the commissioner. The commissioner
must deposit money received from loan principal repayments in the general fund.
new text end

new text begin Subd. 7. new text end

new text begin Use of loan funds. new text end

new text begin (a) A utility awarded a loan under this section must use the
loan funds to pay for natural gas purchased during the critical period for immediate delivery.
The utility must submit to the commissioner evidence that the full loan amount was used
to pay for natural gas as provided in this section. The evidence must be submitted to the
commissioner within ten days of the date the payment was made.
new text end

new text begin (b) A utility that is issued a loan under this section and that also receives funding from
another source that is meant to be used for the purpose described in subdivision 3 must
remit an amount equal to the additional funding received to the commissioner within ten
days of the date the utility received the additional funding or received a loan under this
section, whichever is later.
new text end

new text begin Subd. 8. new text end

new text begin Account expiration. new text end

new text begin The account established under subdivision 2 expires the
day after the last loan to a utility under this section is awarded.
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. new text begin APPROPRIATIONS.
new text end

new text begin $15,000,000 in fiscal year 2021 is appropriated from the general fund to the commissioner
of commerce to make loans to eligible municipal utilities under section 1. Of this amount,
up to $150,000 is for costs to administer section 1. This is a onetime appropriation. Any
unexpended funds remaining at the end of the biennium cancel to the general fund.
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. new text begin REPEALER.
new text end

new text begin Laws 2005, chapter 97, article 10, section 3, as amended by Laws 2013, chapter 85,
article 7, section 9, new text end new text begin is repealed.
new text end

APPENDIX

Repealed Minnesota Session Laws: S1018-1

Laws 2005, chapter 97, article 10, section 3, as amended by Laws 2013, chapter 85, article 7, section 9

Sec. 9.

Laws 2005, chapter 97, article 10, section 3, is amended to read:

Sec. 3. SUNSET.

Sections 1 and 2 shall expire on June 30, 2023.