SF 1330

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:20am

A bill for an act
relating to energy; providing cost recovery for utility's renewable facilities;
providing for high-efficiency utility rate options; amending Minnesota Statutes
2008, sections 216B.1645, subdivision 2a; 216B.169, subdivision 2; repealing
Laws 2007, chapter 3, section 3.

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

Section 1.

Minnesota Statutes 2008, section 216B.1645, subdivision 2a, is amended to
read:

Subd. 2a.

Cost recovery for utility's renewable facilities.

(a) 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
facilities constructed, owned, or operated by a utility to satisfy the requirements of section
216B.1691, provided those facilities were previously approved by the commission under
section 216B.2422 or 216B.243, or were determined by the commission to be reasonable
and prudent under section 216B.243, subdivision 9. The commission may approve, or
approve as modified, a rate schedule that:

(1) allows a utility to recover directly from customers on a timely basis the costs of
qualifying renewable energy projects, including:

(i) return on investment;

(ii) depreciation;

(iii) ongoing operation and maintenance costs;

(iv) taxes; and

(v) costs of transmission and other ancillary expenses directly allocable to
transmitting electricity generated from a project meeting the specifications of this
paragraph;

(2) provides a current return on construction work in progress, provided that recovery
of these costs from Minnesota ratepayers is not sought through any other mechanism;

(3) allows recovery of other expenses incurred that are directly related to a
renewable energy project, including expenses for energy storage, provided that the
utility demonstrates to the commission's satisfaction that the expenses improve project
economics, ensure project implementation, new text begin advance research and understanding of how
storage devices may improve renewable energy projects, new text end or facilitate coordination with
the development of transmission necessary to transport energy produced by the project
to market;

(4) allocates recoverable costs appropriately between wholesale and retail customers;

(5) terminates recovery when costs have been fully recovered or have otherwise
been reflected in a utility's rates.

(b) A petition filed under this subdivision must include:

(1) a description of the facilities for which costs are to be recovered;

(2) an implementation schedule for the facilities;

(3) the utility's costs for the facilities;

(4) a description of the utility's efforts to ensure that costs of the facilities are
reasonable and were prudently incurred; and

(5) a description of the benefits of the project in promoting the development of
renewable energy in a manner consistent with this chapter.

Sec. 2.

Minnesota Statutes 2008, section 216B.169, subdivision 2, is amended to read:

Subd. 2.

Renewable and high-efficiency energy rate options.

(a) deleted text begin Each deleted text end new text begin A new text end utility
deleted text begin shall deleted text end new text begin may new text end offer its customers deleted text begin , and shall advertise the offer at least annually, deleted text end one or
more options that allow a customer to determine that a certain amount of the electricity
generated or purchased on behalf of the customer is renewable energy or energy
generated by high-efficiency, low-emissions, distributed generation such as fuel cells and
microturbines fueled by a renewable fuel.

(b) deleted text begin Each deleted text end new text begin A new text end public utility new text begin that offers a rate option under this subdivision new text end shall file an
implementation plan within 90 days of July 1, deleted text begin 2001 deleted text end new text begin 2009 new text end , to implement paragraph (a).

(c) Rates charged to customers must be calculated using the utility's cost of acquiring
the energy for the customer and must:

(1) reflect the difference between the cost of generating or purchasing the renewable
energy and the cost of generating or purchasing the same amount of nonrenewable energy;
and

(2) be distributed on a per kilowatt-hour basis among all customers who choose to
participate in the program.

(d) deleted text begin Implementation of these rate options may reflect a reasonable amount of
lead time necessary to arrange acquisition of the energy. deleted text end The utility may acquire the
energy demanded by customers, in whole or in part, through procuring or generating the
renewable energy directly, or through the purchase of credits from a provider that has
received certification of eligible power supply pursuant to subdivision 3. deleted text begin If a utility is not
able to arrange an adequate supply of renewable or high-efficiency energy to meet its
customers' demand under this section, the utility must file a report with the commission
detailing its efforts and reasons for its failure.
deleted 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 2007, chapter 3, section 3, new text end new text begin is repealed.
new text end