SF 1426

as introduced - 91st Legislature (2019 - 2020) Posted on 02/18/2019 03:24pm

A bill for an act
relating to energy; terminating ongoing payment obligations connected to continued
nuclear waste storage and restricting future account expenditures to previous
legislative mandates; amending Minnesota Statutes 2018, sections 116C.779,
subdivisions 1, 2; 116C.7792.

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

Section 1.

Minnesota Statutes 2018, section 116C.779, subdivision 1, is amended to read:

Subdivision 1.

Renewable development account.

(a) The renewable development
account is established as a separate account in the special revenue fund in the state treasury.
Appropriations and transfers to the account shall be credited to the account. Earnings, such
as interest, dividends, and any other earnings arising from assets of the account, shall be
credited to the account. Funds remaining in the account at the end of a fiscal year are not
canceled to the general fund but remain in the account until expended. The account shall
be administered by the commissioner of management and budget as provided under this
section.

(b) On July 1, 2017, the public utility that owns the Prairie Island nuclear generating
plant must transfer all funds in the renewable development account previously established
under this subdivision and managed by the public utility to the renewable development
account established in paragraph (a). Funds awarded to grantees in previous grant cycles
that have not yet been expended and unencumbered funds required to be paid in calendar
year 2017 under paragraphs deleted text begin (f) deleted text end new text begin (d) new text end and deleted text begin (g) deleted text end new text begin (e) new text end , and sections 116C.7792 and 216C.41, are
not subject to transfer under this paragraph.

(c) deleted text begin Except as provided in subdivision 1a, deleted text end Beginning January 15, deleted text begin 2018 deleted text end new text begin 2020 new text end , and
continuing each January 15 thereafter new text begin through 2022 new text end , the public utility that owns the Prairie
Island nuclear generating plant must transfer to the renewable development account deleted text begin $500,000
each year for each dry cask containing spent fuel that is located at the Prairie Island power
plant for each year the plant is in operation, and $7,500,000 each year the plant is not in
operation if ordered by the commission pursuant to paragraph (i). The fund transfer must
be made if nuclear waste is stored in a dry cask at the independent spent-fuel storage facility
at Prairie Island for any part of a year.
deleted text end

deleted text begin (d) Except as provided in subdivision 1a, beginning January 15, 2018, and continuing
each January 15 thereafter, the public utility that owns the Monticello nuclear generating
plant must transfer to the renewable development account $350,000 each year for each dry
cask containing spent fuel that is located at the Monticello nuclear power plant for each
year the plant is in operation, and $5,250,000 each year the plant is not in operation if ordered
by the commission pursuant to paragraph (i). The fund transfer must be made if nuclear
waste is stored in a dry cask at the independent spent-fuel storage facility at Monticello for
any part of a year.
deleted text end

deleted text begin (e) Each year, the public utility shall withhold from the funds transferred to the renewable
development account under paragraphs (c) and (d) deleted text end the amount necessary to pay its obligations
under paragraphs deleted text begin (f) deleted text end new text begin (d) new text end and deleted text begin (g) deleted text end new text begin (e) new text end , and sections 116C.7792 and 216C.41, for that calendar
year.

deleted text begin (f) deleted text end new text begin (d) new text end If the commission approves a new or amended power purchase agreement, the
termination of a power purchase agreement, or the purchase and closure of a facility under
section 216B.2424, subdivision 9, with an entity that uses poultry litter to generate electricity,
the public utility subject to this section shall enter into a contract with the city in which the
poultry litter plant is located to provide grants to the city for the purposes of economic
development on the following schedule: $4,000,000 in fiscal year 2018; $6,500,000 each
fiscal year in 2019 and 2020; and $3,000,000 in fiscal year 2021. The grants shall be paid
by the public utility from funds deleted text begin withheld from the transfer deleted text end new text begin transferred new text end to the renewable
development account, as provided in deleted text begin paragraphs (b) and (e) deleted text end new text begin paragraph (c) new text end .

deleted text begin (g) deleted text end new text begin (e) new text end If the commission approves a new or amended power purchase agreement, or the
termination of a power purchase agreement under section 216B.2424, subdivision 9, with
an entity owned or controlled, directly or indirectly, by two municipal utilities located north
of Constitutional Route No. 8, that was previously used to meet the biomass mandate in
section 216B.2424, the public utility that owns a nuclear generating plant shall enter into a
grant contract with such entity to provide $6,800,000 per year for five years, commencing
30 days after the commission approves the new or amended power purchase agreement, or
the termination of the power purchase agreement, and on each June 1 thereafter through
2021, to assist the transition required by the new, amended, or terminated power purchase
agreement. The grant shall be paid by the public utility from funds deleted text begin withheld from the transfer deleted text end new text begin
transferred new text end to the renewable development account as provided in deleted text begin paragraphs (b) and (e) deleted text end new text begin
paragraph (c) new text end .

deleted text begin (h) deleted text end new text begin (f) new text end The collective amount paid under the grant contracts awarded under paragraphs
deleted text begin (f) deleted text end new text begin (d) new text end and deleted text begin (g) deleted text end new text begin (e) new text end is limited to the amount deposited into the renewable development account,
and its predecessor, the renewable development account, established under this section, that
was not required to be deposited into the account under Laws 1994, chapter 641, article 1,
section 10.

deleted text begin (i) After discontinuation of operation of the Prairie Island nuclear plant or the Monticello
nuclear plant and each year spent nuclear fuel is stored in dry cask at the discontinued
facility, the commission shall require the public utility to pay $7,500,000 for the discontinued
Prairie Island facility and $5,250,000 for the discontinued Monticello facility for any year
in which the commission finds, by the preponderance of the evidence, that the public utility
did not make a good faith effort to remove the spent nuclear fuel stored at the facility to a
permanent or interim storage site out of the state. This determination shall be made at least
every two years.
deleted text end

deleted text begin (j) Funds in the account may be expended only for any of the following purposes:
deleted text end

deleted text begin (1) to stimulate research and development of renewable electric energy technologies;
deleted text end

deleted text begin (2) to encourage grid modernization, including, but not limited to, projects that implement
electricity storage, load control, and smart meter technology; and
deleted text end

deleted text begin (3) to stimulate other innovative energy projects that reduce demand and increase system
efficiency and flexibility.
deleted text end

deleted text begin Expenditures from the fund must benefit Minnesota ratepayers receiving electric service
from the utility that owns a nuclear-powered electric generating plant in this state or the
Prairie Island Indian community or its members.
deleted text end

deleted text begin The utility that owns a nuclear generating plant is eligible to apply for grants under this
subdivision.
deleted text end

deleted text begin (k) For the purposes of paragraph (j), the following terms have the meanings given:
deleted text end

deleted text begin (1) "renewable" has the meaning given in section 216B.2422, subdivision 1, paragraph
(c), clauses (1), (2), (4), and (5); and
deleted text end

deleted text begin (2) "grid modernization" means:
deleted text end

deleted text begin (i) enhancing the reliability of the electrical grid;
deleted text end

deleted text begin (ii) improving the security of the electrical grid against cyberthreats and physical threats;
and
deleted text end

deleted text begin (iii) increasing energy conservation opportunities by facilitating communication between
the utility and its customers through the use of two-way meters, control technologies, energy
storage and microgrids, technologies to enable demand response, and other innovative
technologies.
deleted text end

deleted text begin (l) A renewable development account advisory group that includes, among others,
representatives of the public utility and its ratepayers, and includes at least one representative
of the Prairie Island Indian community appointed by that community's tribal council, shall
develop recommendations on account expenditures. The advisory group must design a
request for proposal and evaluate projects submitted in response to a request for proposals.
The advisory group must utilize an independent third-party expert to evaluate proposals
submitted in response to a request for proposal, including all proposals made by the public
utility. A request for proposal for research and development under paragraph (j), clause (1),
may be limited to or include a request to higher education institutions located in Minnesota
for multiple projects authorized under paragraph (j), clause (1). The request for multiple
projects may include a provision that exempts the projects from the third-party expert review
and instead provides for project evaluation and selection by a merit peer review grant system.
In the process of determining request for proposal scope and subject and in evaluating
responses to request for proposals, the advisory group must strongly consider, where
reasonable, potential benefit to Minnesota citizens and businesses and the utility's ratepayers.
deleted text end

deleted text begin (m) The advisory group shall submit funding recommendations to the public utility,
which has full and sole authority to determine which expenditures shall be submitted by
the advisory group to the legislature. The commission may approve proposed expenditures,
may disapprove proposed expenditures that it finds not to be in compliance with this
subdivision or otherwise not in the public interest, and may, if agreed to by the public utility,
modify proposed expenditures. The commission shall, by order, submit its funding
recommendations to the legislature as provided under paragraph (n).
deleted text end

deleted text begin (n) The commission shall present its recommended appropriations from the account to
the senate and house of representatives committees with jurisdiction over energy policy and
finance annually by February 15. Expenditures from the account must be appropriated by
law. In enacting appropriations from the account, the legislature:
deleted text end

deleted text begin (1) may approve or disapprove, but may not modify, the amount of an appropriation for
a project recommended by the commission; and
deleted text end

deleted text begin (2) may not appropriate money for a project the commission has not recommended
funding.
deleted text end

deleted text begin (o) A request for proposal for renewable energy generation projects must, when feasible
and reasonable, give preference to projects that are most cost-effective for a particular energy
source.
deleted text end

deleted text begin (p) The advisory group must annually, by February 15, report to the chairs and ranking
minority members of the legislative committees with jurisdiction over energy policy on
projects funded by the account for the prior year and all previous years. The report must,
to the extent possible and reasonable, itemize the actual and projected financial benefit to
the public utility's ratepayers of each project.
deleted text end

deleted text begin (q) By February 1, 2018, and each February 1 thereafter, the commissioner of
management and budget shall submit a written report regarding the availability of funds in
and obligations of the account to the chairs and ranking minority members of the senate
and house committees with jurisdiction over energy policy and finance, the public utility,
and the advisory group.
deleted text end

deleted text begin (r) A project receiving funds from the account must produce a written final report that
includes sufficient detail for technical readers and a clearly written summary for nontechnical
readers. The report must include an evaluation of the project's financial, environmental, and
other benefits to the state and the public utility's ratepayers.
deleted text end

deleted text begin (s) Final reports, any mid-project status reports, and renewable development account
financial reports must be posted online on a public website designated by the commissioner
of commerce.
deleted text end

deleted text begin (t) All final reports must acknowledge that the project was made possible in whole or
part by the Minnesota renewable development account, noting that the account is financed
by the public utility's ratepayers.
deleted text end

deleted text begin (u) Of the amount in the renewable development account, priority must be given to
making the payments required under section 216C.417.
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. 2.

Minnesota Statutes 2018, section 116C.779, subdivision 2, is amended to read:

Subd. 2.

Renewable energy production incentive.

(a) Until January 1, 2021, new text begin up to
new text end $10,900,000 annually must be allocated from available funds in the account new text begin established in
subdivision 1 new text end to fund renewable energy production incentives. new text begin Up to new text end $9,400,000 of this
annual amount is for incentives for electricity generated by wind energy conversion systems
that are eligible for the incentives under section 216C.41 or Laws 2005, chapter 40.

(b) The balance of this amount, up to $1,500,000 annually, may be used for production
incentives for on-farm biogas recovery facilities and hydroelectric facilities that are eligible
for the incentive under section 216C.41 or for production incentives for other renewables,
to be provided in the same manner as under section 216C.41.

(c) Any portion of the deleted text begin $10,900,000 deleted text end new text begin funds allocated but new text end not expended new text begin under this
subdivision new text end in any calendar year for the incentive is available for other spending purposes
under subdivision 1. This subdivision does not create an obligation to contribute funds to
the account.

(d) The Department of Commerce shall determine eligibility of projects under section
216C.41 for the purposes of this subdivision. At least quarterly, the Department of Commerce
shall notify the public utility of the name and address of each eligible project owner and
the amount due to each project under section 216C.41. The public utility shall make payments
within 15 working days after receipt of notification of payments due.

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 116C.7792, is amended to read:

116C.7792 SOLAR ENERGY INCENTIVE PROGRAM.

The utility subject to section 116C.779 shall operate a program to provide solar energy
production incentives for solar energy systems of no more than a total aggregate nameplate
capacity of 40 kilowatts direct current per premise. The owner of a solar energy system
installed before June 1, 2018, is eligible to receive a production incentive under this section
for any additional solar energy systems constructed at the same customer location, provided
that the aggregate capacity of all systems at the customer location does not exceed 40
kilowatts. The program shall be operated for eight consecutive calendar years commencing
in 2014. $5,000,000 shall be allocated in each of the first four years, $15,000,000 in the
fifth year, $10,000,000 in each of the sixth and seventh years, and $5,000,000 in the eighth
year from funds deleted text begin withheld from transfer deleted text end new text begin transferred new text end to the renewable development account
under section 116C.779, subdivision 1, deleted text begin paragraphs (b) and (e) deleted text end new text begin paragraph (c) new text end , and placed in
a separate account for the purpose of the solar production incentive program operated by
the utility and not for any other program or purpose. Any unspent amount allocated in the
fifth year is available until December 31 of the sixth year. Any unspent amount remaining
at the end of any other allocation year must be transferred to the renewable development
account. The solar system must be sized to less than 120 percent of the customer's on-site
annual energy consumption when combined with other distributed generation resources and
subscriptions provided under section 216B.1641 associated with the premise. The production
incentive must be paid for ten years commencing with the commissioning of the system.
The utility must file a plan to operate the program with the commissioner of commerce.
The utility may not operate the program until it is approved by the commissioner. A change
to the program to include projects up to a nameplate capacity of 40 kilowatts or less does
not require the utility to file a plan with the commissioner. Any plan approved by the
commissioner of commerce must not provide an increased incentive scale over prior years
unless the commissioner demonstrates that changes in the market for solar energy facilities
require an increase.

new text begin EFFECTIVE DATE. new text end

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