SF 1502

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to energy; exempting certain wind energy
facilities from obtaining a certificate of need;
providing for automatic recovery of certain
electricity transmission costs; requiring owners of
certain wind transmission facilities to apply for a
certificate of need; requiring a study; amending
Minnesota Statutes 2004, sections 216B.1645,
subdivisions 1, 2; 216B.2425, subdivision 7; 216B.243,
subdivision 8.

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

Section 1.

Minnesota Statutes 2004, section 216B.1645,
subdivision 1, is amended to read:

Subdivision 1.

Commission authority.

Upon the petition
of a public utility, the Public Utilities Commission shall
approve or disapprove power purchase contracts, investments, or
expenditures entered into or made by the utility to satisfy the
wind and biomass mandates contained in sections 216B.169,
216B.2423, and 216B.2424, new text begin and to satisfy the renewable energy
objectives set forth in section 216B.1691, new text end including reasonable
investments and expenditures made to new text begin ;
new text end

new text begin (1) new text end transmit the electricity generated from sources
developed under those sections that is ultimately used to
provide service to the utility's retail customers, deleted text begin or to
deleted text end new text begin including studies necessary to identify new transmission
facilities needed to transmit electricity to Minnesota retail
customers from generating facilities constructed to satisfy the
renewable energy objectives, provided that the costs of the
studies have not been recovered previously under existing
tariffs and the utility has filed an application for a
certificate of need for the new transmission facilities
identified in the studies;
new text end

new text begin (2) manage the intermittent nature of wind energy resources
it owns or has contracted for; or
new text end

new text begin (3) new text end develop renewable energy sources from the account
required in section 116C.779.

Sec. 2.

Minnesota Statutes 2004, section 216B.1645,
subdivision 2, is amended to read:

Subd. 2.

Cost recovery.

new text begin (a) new text end The expenses incurred by the
utility over the duration of the approved contract or useful
life of the investment and expenditures made pursuant to section
116C.779 shall be recoverable from the ratepayers of the
utility, to the extent they are not offset by utility revenues
attributable to the contracts, investments, or expenditures.
Upon petition by a public utility, the commission shall approve
or approve as modified a rate schedule providing for the
automatic adjustment of charges to recover the expenses or costs
approved by the commission, which, in the case of transmission
expenditures, are limited to the portion of actual transmission
costs that are directly allocable to the need to transmit power
from the renewable sources of energy. The commission may not
approve recovery of the costs for that portion of the power
generated from sources governed by this section that the utility
sells into the wholesale market.

new text begin (b) Upon petition of any utility, the commission shall
approve or approve as modified a rate schedule providing for the
automatic adjustment of charges to recover the expenses or costs
approved by the commission for construction of transmission
facilities necessary to satisfy the utility's renewable energy
objectives, as set forth in subdivision 1, provided that the
utility has met all of the following conditions:
new text end

new text begin (1) demonstrated that the proposed transmission facilities
will transmit electricity primarily from renewable sources of
energy to Minnesota retail customers;
new text end

new text begin (2) signed power purchase agreements with electricity
generators supplying resources to meet the utility's renewable
energy objectives that will utilize the new transmission
resources to serve Minnesota retail customers, or made a
commitment to sign power purchase agreements prior to the
in-service date of the transmission line; and
new text end

new text begin (3) demonstrated that the proposed commercial operation
date of the generation resources matches the planned in-service
date of the new transmission facilities.
new text end

Sec. 3.

Minnesota Statutes 2004, section 216B.2425,
subdivision 7, is amended to read:

Subd. 7.

Transmission needed to support renewable
resources.

Each entity subject to this section shall determine
necessary transmission upgrades to support development of
renewable energy resources required to meet objectives under
section 216B.1691 and shall include those upgrades in its report
under subdivision 2. new text begin By December 31, 2005, each entity shall
file an application for a certificate of need, if applicable,
with the Minnesota Public Utilities Commission for the necessary
transmission upgrades and new transmission facilities identified
in its most recent report under subdivision 2. If the
identified transmission facilities require approval from
multiple jurisdictions, each entity or group of entities shall
work with the applicable regulatory authorities to receive
approval to construct the transmission facilities.
new text end

Sec. 4.

Minnesota Statutes 2004, section 216B.243,
subdivision 8, is amended to read:

Subd. 8.

Exemptions.

This section does not apply to:

(1) cogeneration or small power production facilities as
defined in the Federal Power Act, United States Code, title 16,
section 796, paragraph (17), subparagraph (A), and paragraph
(18), subparagraph (A), and having a combined capacity at a
single site of less than 80,000 kilowatts or to plants or
facilities for the production of ethanol or fuel alcohol nor in
any case where the commission shall determine after being
advised by the attorney general that its application has been
preempted by federal law;

(2) a high-voltage transmission line proposed primarily to
distribute electricity to serve the demand of a single customer
at a single location, unless the applicant opts to request that
the commission determine need under this section or section
216B.2425;

(3) the upgrade to a higher voltage of an existing
transmission line that serves the demand of a single customer
that primarily uses existing rights-of-way, unless the applicant
opts to request that the commission determine need under this
section or section 216B.2425;

(4) a high-voltage transmission line of one mile or less
required to connect a new or upgraded substation to an existing,
new, or upgraded high-voltage transmission line;

(5) conversion of the fuel source of an existing electric
generating plant to using natural gas; deleted text begin or
deleted text end

(6) modification of an existing electric generating plant
to increase efficiency, as long as the capacity of the plant is
not increased more than ten percent or more than 100 megawatts,
whichever is greater new text begin ; or
new text end

new text begin (7) an aggregation of proximate wind energy conversion
systems as defined in section 216C.06, subdivision 19, that has
a combined capacity of 50 megawatts or more and that serves
Minnesota retail customers new text end .

Sec. 5. new text begin WIND INTEGRATION STUDY.
new text end

new text begin The commission shall order all electric utilities, as
defined in Minnesota Statutes, section 216B.1691, subdivision 1,
paragraph (b), to participate in a statewide wind integration
study. Utilities shall jointly contract with an independent
firm selected by the commissioner of commerce through a
competitive bidding process to conduct an engineering study of
the impacts on reliability and operating costs of increasing
wind capacity to comprise 20 percent of Minnesota retail
electric energy sales by the year 2020, and to identify and
develop options for utilities to use to manage the intermittent
nature of wind resources. Utilities shall cooperate with the
firm conducting the study by providing data requested. The
Department of Commerce shall manage the study process and shall
appoint a group of stakeholders with experience in engineering
and expertise in power systems or wind energy to review the
study's proposed methods and assumptions and preliminary data.
The study must be completed by November 30, 2006. Electric
utilities shall incorporate the study's findings into their
utility integrated resource plans prepared under Minnesota
Statutes, section 216B.2422. The costs of the study are
recoverable under Minnesota Statutes, section 216B.1645,
subdivision 1.
new text end

Sec. 6. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 5 are effective the day following final
enactment.
new text end