SF 3052

as introduced - 89th Legislature (2015 - 2016) Posted on 03/22/2016 09:37am

A bill for an act
relating to energy; modifying qualifying projects that may be approved for
an emissions-reduction rider; amending Minnesota Statutes 2014, section
216B.1692, subdivisions 1, 1a, 5, 8.

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

Section 1.

Minnesota Statutes 2014, section 216B.1692, subdivision 1, is amended to
read:

Subdivision 1.

Qualifying projects.

(a) Projects that may be approved for the
emissions reduction-rate rider allowed in this section must:

(1) be installed on existing large electric generating power plants, as defined in
section 216B.2421, subdivision 2, clause (1), that are located in the state and that are
currently not subject to emissions limitations for new power plants under the federal Clean
Air Act, United States Code, title 42, section 7401 et seq.;

(2) not increase the new text begin accredited new text end capacity new text begin , as determined by the Midcontinent
Independent System Operator, new text end of the existing electric generating power plant new text begin by new text end more than
ten percent or more than 100 megawatts, whichever is greater; and

(3) result in the existing plant either:

(i) complying with applicable new source review standards under the federal Clean
Air Act; or

(ii) emitting air contaminants at levels substantially lower than allowed for new
facilities by the applicable new source performance standards under the federal Clean
Air Act; or

(iii) reducing emissions from current levels at a unit to the lowest cost-effective level
when, due to the age or condition of the generating unit, the public utility demonstrates
that it would not be cost-effective to reduce emissions to the levels in item (i) or (ii).

(b) Notwithstanding paragraph (a), a project may be approved for the emission
reduction rate rider allowed in this section if new text begin :
new text end

new text begin (1) new text end the project is to be installed on existing large electric generating power plants,
as defined in section 216B.2421, subdivision 2, clause (1), that are located outside the
state and are needed to comply with state or federal air quality standards, but only if the
project has received an advance determination of prudence from the commission under
section 216B.1695 deleted text begin . deleted text end new text begin ;
new text end

new text begin (2) the project includes a utility ceasing operations of one or more coal-fired units
with a combined capacity of greater than 500 megawatts at an existing large electric
generating power plant, provided that the project includes the addition of one or more
utility-owned natural gas-fired units, or the repowering of one or more existing coal-fired
units to natural gas, or both, at the same existing large electric generation power plant
where the coal-fired unit or units were located; or
new text end

new text begin (3) the project includes a utility ceasing operations of one or more coal-fired units
with a combined capacity of 500 megawatts or less at an existing large electric generation
power plant, provided that the project includes the addition of one or more utility-owned
renewable energy facilities that are an eligible energy technology under section
216B.1691, subdivision 1, or the repowering of one or more existing coal-fired units to an
eligible energy technology, or both, at the same existing large electric generation power
plant where the coal unit or units were located.
new text end

new text begin (c) A project approved under paragraph (b), clause (2), must not exceed the capacity
limitation under paragraph (a), clause (2). A project approved under paragraph (b),
clause (3), must not increase the accredited capacity, as determined by the Midcontinent
Independent System Operator, of the existing large electric generating power plant by
more than 200 megawatts.
new text end

new text begin (d) A project approved under paragraph (b), clause (2) or (3), that does not exceed
the accredited capacity limits set forth in paragraph (c) may also include the addition of a
utility-owned natural gas-fired unit, or utility-owned renewable resources, or both, in any
location, provided that the total accredited capacity of the project not exceed the limit.
new text end

new text begin (e) A utility proposing generation resources in a project approved under paragraph
(b), clause (2) or (3), including generation resources described in paragraph (d), shall use a
competitive process to acquire the utility-owned generation units.
new text end

Sec. 2.

Minnesota Statutes 2014, section 216B.1692, subdivision 1a, is amended to read:

Subd. 1a.

Exemption.

Subdivisions 2 deleted text begin , deleted text end new text begin ; 3, paragraph (a), clause (4); new text end 4 deleted text begin , deleted text end new text begin ; new text end and 5,
paragraph deleted text begin (c) deleted text end new text begin (d) new text end , clause (1), do not apply to projects qualifying under subdivision 1,
deleted text begin paragraph deleted text end new text begin paragraphs new text end (b) new text begin and (c) new text end .

Sec. 3.

Minnesota Statutes 2014, section 216B.1692, subdivision 5, is amended to read:

Subd. 5.

Proposal approval.

(a) After receiving the Pollution Control Agency's
environmental assessment, new text begin if any, new text end the commission shall allow opportunity for written and
oral comment on the proposed emissions reduction-rate rider proposal. The commission
must assess the costs of an emissions-reduction project on a stand-alone basis and
may approve, modify, or reject the proposed emissions-reduction rider. In making its
determination, the commission shall consider whether the project, proposed cost recovery,
and any proposed recovery above cost appropriately achieves environmental benefits
without unreasonable consumer costs.

(b) The commission may approve a rider that:

(1) allows the utility to recover costs of qualifying emissions-reduction projects
net of revenues attributable to the project;

(2) allows deleted text begin an appropriate deleted text end new text begin a new text end return on investment deleted text begin associated with qualifying
emissions-reduction projects at the level established in the public utility's last general rate
case deleted text end new text begin at the level approved in the utility's last general rate case, unless a different return is
deemed consistent with the public interest new text end ;

(3) new text begin provides a current return on construction work in progress, provided that
recovery for the allowance of funds used during construction is not sought from Minnesota
retail customers through any other mechanism;
new text end

new text begin (4) allows for recovery of other expenses, if the expenses are shown to promote a
least-cost project option or are otherwise in the public interest;
new text end

new text begin (5) allows for ongoing associated operation and maintenance costs;
new text end

new text begin (6) new text end allocates project costs appropriately between wholesale and retail customers;

deleted text begin (4) deleted text end new text begin (7) new text end provides a mechanism for recovery above cost, if necessary to improve the
overall economics of the qualifying projects to ensure implementation;

deleted text begin (5) deleted text end new text begin (8) new text end recovers costs from retail customer classes in proportion to class energy
consumption; and

deleted text begin (6) deleted text end new text begin (9) new text end terminates recovery once the costs of qualifying projects have been fully
recovered.

(c) new text begin If a utility proposes the addition of utility-owned renewable resources under
subdivision 1, paragraph (b), clause (3), or subdivision 1, paragraph (c), the utility may
elect to seek recovery of costs under section 216B.1645 or this section.
new text end

new text begin (d) new text end The commission must not approve an emissions-reduction project and its
associated rate rider if:

(1) the emissions-reduction project is needed to comply with new state or federal
air quality standards; or

(2) the emissions-reduction project is required as a corrective action as part of any
state or federal enforcement action.

deleted text begin (d) deleted text end new text begin (e) new text end The commission may not include any costs of a proposed project in the
emissions-reduction rider that are not directly allocable to reduction of emissions.

Sec. 4.

Minnesota Statutes 2014, section 216B.1692, subdivision 8, is amended to read:

Subd. 8.

Sunset.

This section is effective until December 31, deleted text begin 2020 deleted text end new text begin 2030 new text end , and
applies to plans, projects, and riders approved before that date and modifications made to
them after that date.