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SF 2710

as introduced - 90th Legislature (2017 - 2018) Posted on 02/27/2018 09:08am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to energy; requiring energy storage systems to be considered in integrated
resource plans and in certificate of need proceedings; amending Minnesota Statutes
2016, sections 216B.2422, subdivision 1, by adding a subdivision; 216B.243,
subdivision 3.

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

Section 1.

Minnesota Statutes 2016, 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 capable of (1)
absorbing and storing electrical energy, and (2) dispatching stored electrical energy for use
at a later time.
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 2016, section 216B.2422, is amended by adding a subdivision
to read:


new text begin Subd. 4a. new text end

new text begin Preference for energy storage systems. new text end

new text begin (a) The commission is prohibited
from (1) approving a new or refurbished energy facility in an integrated resource plan or a
certificate of need under section 216B.243, or (2) allowing rate recovery under section
216B.16 for a new or refurbished energy facility, unless the utility has demonstrated that
the deployment of one or more energy storage systems on the utility's grid is not in the
public interest.
new text end

new text begin (b) When making the public interest determination, the commission must consider:
new text end

new text begin (1) whether the energy storage systems can replace part or all of the energy provided by
the proposed facility;
new text end

new text begin (2) whether the energy storage systems are economically competitive compared to the
proposed facility;
new text end

new text begin (3) the value of energy storage systems approved by the commission under paragraph
(c);
new text end

new text begin (4) whether the deployment of energy storage systems helps the utility achieve the
greenhouse gas reduction goals under section 216H.02;
new text end

new text begin (5) impacts on local and regional grid reliability; and
new text end

new text begin (6) any other utility, ratepayer, and societal impacts resulting from the deployment of
energy storage systems.
new text end

new text begin (c) The commissioner of commerce must develop a methodology a utility must use to
calculate the value of energy to the utility, to ratepayers, and to society resulting from the
operation of energy storage systems deployed on the utility's electrical grid. In developing
the energy storage system value methodology, the commissioner must:
new text end

new text begin (1) consult stakeholders with experience and expertise in power systems, energy storage
systems, and electric utility ratemaking;
new text end

new text begin (2) include in the methodology a means of calculating the value attained by deploying
energy storage systems, including at a minimum the value of the stored energy and its
delivery, generation and transmission capacity, transmission and distribution line losses,
reduced costs of providing ancillary services, reduced curtailment of renewable energy
generators, environmental costs, and other values deemed relevant by the commissioner;
and
new text end

new text begin (3) submit the methodology to the commission for approval.
new text end

new text begin (d) A utility must use the methodology approved by the commission under this section
when evaluating and selecting resource options in a utility's integrated resource plan under
section 216B.2422 and certificate of need proceedings under section 216B.243.
new text end

new text begin EFFECTIVE DATE; APPLICATION. new text end

new text begin This section is effective the day following
final enactment. The commissioner of commerce must submit the value of energy storage
methodology to the Public Utilities Commission by December 31, 2018.
new text end

Sec. 3.

Minnesota Statutes 2016, section 216B.243, subdivision 3, is amended to read:


Subd. 3.

Showing required for construction.

new text begin (a) new text end No proposed large energy facility
shall be certified for construction unless the applicant can show that demand for electricity
cannot be met more cost effectively through energy conservationnew text begin , energy storage,new text end and
load-management measures and unless the applicant has otherwise justified its need. In
assessing need, the commission shall evaluate:

(1) the accuracy of the long-range energy demand forecasts on which the necessity for
the facility is based;

(2) the effect of existing or possible energy conservation programs under sections 216C.05
to 216C.30 and this section or other federal or state legislation on long-term energy demand;

(3) the relationship of the proposed facility to overall state energy needs, as described
in the most recent state energy policy and conservation report prepared under section
216C.18, or, in the case of a high-voltage transmission line, the relationship of the proposed
line to regional energy needs, as presented in the transmission plan submitted under section
216B.2425;

(4) promotional activities that may have given rise to the demand for this facility;

(5) benefits of this facility, including its uses to protect or enhance environmental quality,
and to increase reliability of energy supply in Minnesota and the region;

(6) possible alternatives for satisfying the energy demand or transmission needs including
but not limited to potential for increased efficiency and upgrading of existing energy
generation and transmission facilities, new text begin energy storage systems, new text end load-management programs,
and distributed generation;

(7) the policies, rules, and regulations of other state and federal agencies and local
governments;

(8) any feasible combination of energy conservation improvements, required under
section 216B.241, new text begin or energy storage systems new text end that can (i) replace part or all of the energy to
be provided by the proposed facility, and (ii) compete with it economically;

(9) with respect to a high-voltage transmission line, the benefits of enhanced regional
reliability, access, or deliverability to the extent these factors improve the robustness of the
transmission system or lower costs for electric consumers in Minnesota;

(10) whether the applicant or applicants are in compliance with applicable provisions
of sections 216B.1691 and 216B.2425, subdivision 7, and have filed or will file by a date
certain an application for certificate of need under this section or for certification as a priority
electric transmission project under section 216B.2425 for any transmission facilities or
upgrades identified under section 216B.2425, subdivision 7;

(11) whether the applicant has made the demonstrations required under subdivision 3a;
and

(12) if the applicant is proposing a nonrenewable generating plant, the applicant's
assessment of the risk of environmental costs and regulation on that proposed facility over
the expected useful life of the plant, including a proposed means of allocating costs associated
with that risk.

new text begin (b) For the purposes of this subdivision, "energy storage system" means a commercially
available technology capable of (1) absorbing and storing electrical energy, and (2)
dispatching stored electrical energy for use at a later time.
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