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Minnesota Legislature

Office of the Revisor of Statutes

SF 3230

as introduced - 86th Legislature (2009 - 2010) Posted on 03/12/2010 03:34pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to energy; abolishing 2025 renewable energy standards; making
clarifying changes; amending Minnesota Statutes 2008, sections 3.8851,
subdivision 3; 216B.1691, as amended.

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

Section 1.

Minnesota Statutes 2008, section 3.8851, subdivision 3, is amended to read:


Subd. 3.

Duties.

(a) The commission shall continuously evaluate the energy policies
of this state and the degree to which they promote an environmentally and economically
sustainable energy future. The commission shall monitor the state's progress in achieving
its goals to develop renewable sources of electric energy under section 216B.1691,
deleted text begin subdivision 2adeleted text end
deleted text begin,deleted text end and the progress of energy-related sectors in reducing greenhouse gas
emissions under the state's greenhouse gas emissions-reductions goals established in
section 216H.02, subdivision 1. The commission may review proposed energy legislation
and may recommend legislation. The commission shall when feasible solicit and consider
public testimony regarding the economic, environmental, and social implications of state
energy plans and policies. Notwithstanding any other law to the contrary the commission's
evaluations and reviews under this subdivision shall include new and existing technologies
for nuclear power.

(b) The commission may study, analyze, hold hearings, and make legislative
recommendations regarding the following issues:

(1) the generation, transmission, and distribution of electricity;

(2) the reduction of greenhouse gas emissions;

(3) the conservation of energy;

(4) alternative energy sources available to replace dwindling fossil fuel and other
nonrenewable fuel sources;

(5) the development of renewable energy supplies;

(6) the economic development potential associated with issues described in clauses
(1) to (5); and

(7) other energy-related subjects the commission finds significant.

Sec. 2.

Minnesota Statutes 2008, section 216B.1691, as amended by Laws 2009,
chapter 110, section 13, is amended to read:


216B.1691 RENEWABLE ENERGY OBJECTIVES.

Subdivision 1.

Definitions.

(a) Unless otherwise specified in law, "eligible energy
technology" means an energy technology that generates electricity from the following
renewable energy sources: (1) solar; (2) wind; (3) hydroelectric with a capacity of less
than 100 megawatts; (4) hydrogen, provided that after January 1, 2010, the hydrogen must
be generated from the resources listed in this clause; or (5) biomass, which includes,
without limitation, landfill gas; an anaerobic digester system; the predominantly organic
components of wastewater effluent, sludge, or related byproducts from publicly owned
treatment works, but not including incineration of wastewater sludge to produce electricity;
and an energy recovery facility used to capture the heat value of mixed municipal solid
waste or refuse-derived fuel from mixed municipal solid waste as a primary fuel.

(b) "Electric utility" means a public utility providing electric service, a generation
and transmission cooperative electric association, a municipal power agency, or a power
district.

(c) "Total retail electric sales" means the kilowatt-hours of electricity sold in a year
by an electric utility to retail customers of the electric utility or to a distribution utility for
distribution to the retail customers of the distribution utility.

Subd. 2.

Eligible energy objectives.

Each electric utility shall make a good
faith effort to generate or procure sufficient electricity generated by an eligible energy
technology to provide its retail consumers, or the retail customers of a distribution utility
to which the electric utility provides wholesale electric service, so that commencing
in 2005, at least one percent of the electric utility's total retail electric sales to retail
customers in Minnesota is generated by eligible energy technologies and seven percent of
the electric utility's total retail electric sales to retail customers in Minnesota by 2010 is
generated by eligible energy technologies.

deleted text begin Subd. 2a. deleted text end

deleted text begin Eligible energy technology standard. deleted text end

deleted text begin (a) Except as provided in
paragraph (b), each electric utility shall generate or procure sufficient electricity generated
by an eligible energy technology to provide its retail customers in Minnesota, or the
retail customers of a distribution utility to which the electric utility provides wholesale
electric service, so that at least the following standard percentages of the electric utility's
total retail electric sales to retail customers in Minnesota are generated by eligible energy
technologies by the end of the year indicated:
deleted text end

deleted text begin (1)
deleted text end
deleted text begin 2012
deleted text end
deleted text begin 12 percent
deleted text end
deleted text begin (2)
deleted text end
deleted text begin 2016
deleted text end
deleted text begin 17 percent
deleted text end
deleted text begin (3)
deleted text end
deleted text begin 2020
deleted text end
deleted text begin 20 percent
deleted text end
deleted text begin (4)
deleted text end
deleted text begin 2025
deleted text end
deleted text begin 25 percent.
deleted text end

deleted text begin (b) An electric utility that owned a nuclear generating facility as of January 1, 2007,
must meet the requirements of this paragraph rather than paragraph (a). An electric utility
subject to this paragraph must generate or procure sufficient electricity generated by
an eligible energy technology to provide its retail customers in Minnesota or the retail
customer of a distribution utility to which the electric utility provides wholesale electric
service so that at least the following percentages of the electric utility's total retail electric
sales to retail customers in Minnesota are generated by eligible energy technologies by the
end of the year indicated:
deleted text end

deleted text begin (1)
deleted text end
deleted text begin 2010
deleted text end
deleted text begin 15 percent
deleted text end
deleted text begin (2)
deleted text end
deleted text begin 2012
deleted text end
deleted text begin 18 percent
deleted text end
deleted text begin (3)
deleted text end
deleted text begin 2016
deleted text end
deleted text begin 25 percent
deleted text end
deleted text begin (4)
deleted text end
deleted text begin 2020
deleted text end
deleted text begin 30 percent.
deleted text end

deleted text begin Of the 30 percent in 2020, at least 25 percent must be generated by solar energy
or wind energy conversion systems and the remaining five percent by other eligible
energy technology. Of the 25 percent that must be generated by wind or solar, no more
than one percent may be solar generated and the remaining 24 percent or greater must
be wind generated.
deleted text end

deleted text begin Subd. 2b. deleted text end

deleted text begin Modification or delay of standard. deleted text end

deleted text begin (a) The commission shall modify or
delay the implementation of a standard obligation, in whole or in part, if the commission
determines it is in the public interest to do so. The commission, when requested to modify
or delay implementation of a standard, must consider:
deleted text end

deleted text begin (1) the impact of implementing the standard on its customers' utility costs, including
the economic and competitive pressure on the utility's customers;
deleted text end

deleted text begin (2) the effects of implementing the standard on the reliability of the electric system;
deleted text end

deleted text begin (3) technical advances or technical concerns;
deleted text end

deleted text begin (4) delays in acquiring sites or routes due to rejection or delays of necessary siting or
other permitting approvals;
deleted text end

deleted text begin (5) delays, cancellations, or nondelivery of necessary equipment for construction or
commercial operation of an eligible energy technology facility;
deleted text end

deleted text begin (6) transmission constraints preventing delivery of service; and
deleted text end

deleted text begin (7) other statutory obligations imposed on the commission or a utility.
deleted text end

deleted text begin The commission may modify or delay implementation of a standard obligation under
clauses (1) to (3) only if it finds implementation would cause significant rate impact,
requires significant measures to address reliability, or raises significant technical issues.
The commission may modify or delay implementation of a standard obligation under
clauses (4) to (6) only if it finds that the circumstances described in those clauses were due
to circumstances beyond an electric utility's control and make compliance not feasible.
deleted text end

deleted text begin (b) When considering whether to delay or modify implementation of a standard
obligation, the commission must give due consideration to a preference for electric
generation through use of eligible energy technology and to the achievement of the
standards set by this section.
deleted text end

deleted text begin (c) An electric utility requesting a modification or delay in the implementation of a
standard must file a plan to comply with its standard obligation in the same proceeding
that it is requesting the delay.
deleted text end

deleted text begin Subd. 2c. deleted text end

deleted text begin Use of integrated resource planning process. deleted text end

deleted text begin The commission may
exercise its authority under subdivision 2b to modify or delay implementation of a standard
obligation as part of an integrated resource planning proceeding under section 216B.2422.
The commission's authority must be exercised according to subdivision 2b. The order to
delay or modify shall not be considered advisory with respect to any electric utility. This
subdivision is in addition to and does not limit the commission's authority to modify or
delay implementation of a standard obligation in other proceedings before the commission.
deleted text end

Subd. 2d.

Commission order.

The commission shall issue necessary orders
detailing the criteria deleted text beginand standardsdeleted text end by which it will measure an electric utility's efforts to
meet the renewable energy objectives of deleted text beginsubdivision 2deleted text endnew text begin this sectionnew text end to determine whether
the utility is making the required good faith effort. In this order, the commission shall
include criteria deleted text beginand standardsdeleted text end that protect against undesirable impacts on the reliability
of the utility's system and economic impacts on the utility's ratepayers and that consider
technical feasibility.

Subd. 3.

Utility plans filed with commission.

(a) Each electric utility shall report
on its plans, activities, and progress with regard to the new text begingood faith new text endobjectives deleted text beginand standardsdeleted text end
of this section in its filings under section 216B.2422 or in a separate report submitted
to the commission every two years, whichever is more frequent, demonstrating to the
commission the utility's new text begingood faith new text endeffort to deleted text begincomply with this sectiondeleted text endnew text begin generate or procure
electricity generated by an eligible energy technology
new text end. In its resource plan or a separate
report, each electric utility shall provide a description of:

(1) the status of the utility's renewable energy mix relative to the new text begingood faith new text endobjective
deleted text begin and standardsdeleted text end;

(2) efforts taken to meet the objective deleted text beginand standardsdeleted text end;

(3) any obstacles encountered or anticipated in meeting the objective deleted text beginor standardsdeleted text end;
and

(4) potential solutions to the obstacles.

(b) The commissioner shall compile the information provided to the commission
under paragraph (a), and report to the chairs of the house of representatives and senate
committees with jurisdiction over energy and environment policy issues as to the
progress of utilities in the state, including the progress of each individual electric utility,
in increasing the amount of renewable energy provided to retail customers, with any
recommendations for regulatory or legislative action, by January 15 of each odd-numbered
year.

Subd. 4.

Renewable energy credits.

(a) To facilitate compliance with this section,
the commission, by rule or order, shall establish by January 1, 2008, a program for
tradable renewable energy credits for electricity generated by eligible energy technology.
The credits must represent energy produced by an eligible energy technology, as defined in
subdivision 1. Each kilowatt-hour of renewable energy credits must be treated the same as
a kilowatt-hour of eligible energy technology generated or procured by an electric utility if
it is produced by an eligible energy technology. The program must permit a credit to be
used only once. The program must treat all eligible energy technology equally and shall
not give more or less credit to energy based on the state where the energy was generated or
the technology with which the energy was generated. The commission must determine the
period in which the credits may be used for purposes of the program.

(b) In lieu of generating or procuring energy directly to satisfy the eligible energy
technology objective deleted text beginor standarddeleted text end of this section, an electric utility may utilize renewable
energy credits allowed under the program to satisfy the objective deleted text beginor standarddeleted text end.

(c) The commission shall facilitate the trading of renewable energy credits between
states.

(d) The commission shall require all electric utilities to participate in a
commission-approved credit-tracking system or systems. Once a credit-tracking system is
in operation, the commission shall issue an order establishing protocols for trading credits.

deleted text begin (e) An electric utility subject to subdivision 2a, paragraph (b), may not sell renewable
energy credits to an electric utility subject to subdivision 2a, paragraph (a), until 2021.
deleted text end

Subd. 5.

Technology based on fuel combustion.

(a) Electricity produced by fuel
combustion through fuel blending or co-firing under paragraph (b) may only count toward
a utility's objectives deleted text beginor standardsdeleted text end if the generation facility:

(1) was constructed in compliance with new source performance standards
promulgated under the federal Clean Air Actnew text begin, United States Code, title 42, chapter 85,new text end for
a generation facility of that type; or

(2) employs the maximum achievable or best available control technology available
for a generation facility of that type.

(b) An eligible energy technology may blend or co-fire a fuel listed in subdivision 1,
paragraph (a), clause (5), with other fuels in the generation facility, but only the percentage
of electricity that is attributable to a fuel listed in that clause can be counted toward an
electric utility's renewable energy objectives.

Subd. 7.

Compliance.

The commission must regularly investigate whether an
electric utility is in compliance with its good faith objective under subdivision 2 deleted text beginand
standard obligation under subdivision 2a
deleted text end. If the commission finds noncompliance, it may
order the electric utility to construct facilities, purchase energy generated by eligible
energy technology, purchase renewable energy credits, or engage in other activities
to achieve compliance. If an electric utility fails to comply with an order under this
subdivision, the commission may impose a financial penalty on the electric utility in an
amount not to exceed the estimated cost of the electric utility to achieve compliance. The
penalty may not exceed the lesser of the cost of constructing facilities or purchasing
credits. The commission must deposit financial penalties imposed under this subdivision
in the energy and conservation account established in the special revenue fund under
section 216B.241, subdivision 2a. This subdivision is in addition to and does not limit any
other authority of the commission to enforce this section.

Subd. 8.

Relation to other law.

This section does not limit the authority of the
commission under any other law, including, without limitation, sections 216B.2422 and
216B.243.

Subd. 9.

Local benefits.

The commission shall take all reasonable actions within
its statutory authority to ensure this section is implemented to maximize benefits to
Minnesota citizens, balancing factors such as local ownership of or participation in
energy production, development and ownership of eligible energy technology facilities by
independent power producers, Minnesota utility ownership of eligible energy technology
facilities, the costs of energy generation to satisfy the deleted text beginrenewable standarddeleted text endnew text begin good faith
objective
new text end, and the reliability of electric service to Minnesotans.

Subd. 10.

Utility acquisition of resources.

A competitive resource acquisition
process established by the commission prior to June 1, 2007, shall not apply to a utility
for the construction, ownership, and operation of generation facilities used to satisfy the
requirements of this section unless, upon a finding that it is in the public interest, the
commission issues an order on or after June 1, 2007, that requires compliance by a utility
with a competitive resource acquisition process. A utility that owns a nuclear generation
facility and intends to construct, own, or operate facilities under this section shall file with
the commission on or before March 1, 2008, a renewable energy plan setting forth the
manner in which the utility proposes to meet the requirements of this section, including
a proposed schedule for purchasing renewable energy from C-BED and non-C-BED
projects. The utility shall update the plan as necessary in its filing under section
216B.2422. The commission shall approve the plan unless it determines, after public
hearing and comment, that the plan is not in the public interest. As part of its determination
of public interest, the commission shall consider the plan's allocation of projects among
C-BED, non-C-BED, and utility-owned projects, balancing the state's interest in:

(1) promoting the policy of economic development in rural areas through the
development of renewable energy projects, as expressed in subdivision 9;

(2) maintaining the reliability of the state's electric power grid; and

(3) minimizing cost impacts on ratepayers.