Minnesota Legislature
SF 3758
2nd Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am
Current Version - 2nd Engrossment
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A bill for an act
relating to energy; modifying provisions relating to power transmission lines,
renewable energy obligations, and related activities and costs; amending
Minnesota Statutes 2006, sections 216B.16, subdivision 7b; 216B.1645,
subdivisions 1, 2; 216B.243, by adding a subdivision; Minnesota Statutes 2007
Supplement, section 216B.1645, subdivision 2a.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2006, section 216B.16, subdivision 7b, is amended to
read:
Subd. 7b.
Transmission cost adjustment.
(a) Notwithstanding any other provision
of this chapter, the commission may approve a tariff mechanism for the automatic annual
adjustment of charges for the Minnesota jurisdictional costs ofnew text begin : (i)new text end new transmission
facilities that have been separately filed and reviewed and approved by the commission
under section 216B.243 deleted text begin ordeleted text end are certified as a priority project or deemed to be a priority
transmission project under section 216B.2425new text begin ; and (ii) charges incurred by a utility that
accrue from other transmission owners' regionally planned transmission projects that have
been determined by the Midwest Independent System Operator to benefit the utility, as
provided for under a federally approved tariffnew text end .
(b) Upon filing by a public utility or utilities providing transmission service, the
commission may approve, reject, or modify, after notice and comment, a tariff that:
(1) allows the utility to recover on a timely basis the costs net of revenues of
facilities approved under section 216B.243 or certified or deemed to be certified under
section 216B.2425new text begin or exempt from the requirements of section 216B.243new text end ;
(2) new text begin allows the charges incurred by a utility that accrue from other transmission
owners' regionally planned transmission projects that have been determined by the
Midwest Independent System Operator to benefit the utility, as provided for under a
federally approved tariff;
new text end
new text begin (3) new text end allows a return on investment at the level approved in the utility's last general
rate case, unless a different return is found to be consistent with the public interest;
deleted text begin (3)deleted text end new text begin (4)new text end provides a current return on construction work in progress, provided that
recovery from Minnesota retail customers for the allowance for funds used during
construction is not sought through any other mechanism;
deleted text begin (4)deleted text end new text begin (5)new text end allows for recovery of other expenses if shown to promote a least-cost project
option or is otherwise in the public interest;
deleted text begin (5)deleted text end new text begin (6)new text end allocates project costs appropriately between wholesale and retail customers;
deleted text begin (6)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 project or projects or is otherwise in the public interest; and
deleted text begin (7)deleted text end new text begin (8)new text end terminates recovery once costs have been fully recovered or have otherwise
been reflected in the utility's general rates.
(c) A public utility may file annual rate adjustments to be applied to customer bills
paid under the tariff approved in paragraph (b). In its filing, the public utility shall provide:
(1) a description of and context for the facilities included for recovery;
(2) a schedule for implementation of applicable projects;
(3) the utility's costs for these projects;
(4) a description of the utility's efforts to ensure the lowest costs to ratepayers for
the project; and
(5) calculations to establish that the rate adjustment is consistent with the terms
of the tariff established in paragraph (b).
(d) Upon receiving a filing for a rate adjustment pursuant to the tariff established in
paragraph (b), the commission shall approve the annual rate adjustments provided that,
after notice and comment, the costs included for recovery through the tariff were or are
expected to be prudently incurred and achieve transmission system improvements at the
lowest feasible and prudent cost to ratepayers.
Sec. 2.
Minnesota Statutes 2006, 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, and
to satisfy the renewable energy deleted text begin objectivesdeleted text end new text begin obligationsnew text end set forth in section 216B.1691,
including reasonable investments and expenditures made to:
(1) transmit the electricity generated from sources developed under those sections
that is ultimately used to provide service to the utility's retail customers, 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 deleted text begin objectivesdeleted text end new text begin obligationsnew text end , 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 or for certification as a priority project under section 216B.2425 for the
new transmission facilities identified in the studies;
new text begin (2) provide storage facilities for renewable energy generation facilities that
contribute to the reliability, efficiency, or cost-effectiveness of the renewable facilities;new text end or
deleted text begin (2)deleted text end new text begin (3)new text end develop renewable energy sources from the account required in section
116C.779.
Sec. 3.
Minnesota Statutes 2006, section 216B.1645, subdivision 2, is amended to read:
Subd. 2.
Cost recovery.
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 commissionnew text begin under subdivision 1new text end , 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.
Sec. 4.
Minnesota Statutes 2007 Supplement, section 216B.1645, subdivision 2a,
is amended to read:
Subd. 2a.
Cost recovery for owned renewable facilities.
(a) A utility may petition
the commission to approve a rate schedule that provides for the automatic adjustment of
charges to recover prudently incurred investments, expenses, or costs associated with
facilities constructed, owned, or operated by a utility to satisfy the requirements of section
216B.1691, provided those facilities were previously approved by the commission under
section 216B.2422 or new text begin 216B.243, or were determined by the commission to be reasonable
and prudent under section new text end 216B.243new text begin , subdivision 9new text end . The commission may approve, ornew text begin
new text end approve as modified, a rate schedule that:
(1) allows a utility to recover directly from customers on a timely basis the costs of
qualifying renewable energy projects, including:
(i) return on investment;
(ii) depreciation;
(iii) ongoing operation and maintenance costs;
(iv) taxes; and
(v) costs of transmission and other ancillary expenses directly allocable to
transmitting electricity generated from a project meeting the specifications of this
paragraph;
(2) provides a current return on construction work in progress, provided that recovery
of these costs from Minnesota ratepayers is not sought through any other mechanism;
(3) allows recovery of other expenses incurred that are directly related to a
renewable energy project, new text begin including expenses for energy storage, new text end provided that the
utility demonstrates to the commission's satisfaction that the expenses improve project
economics, ensure project implementation, or facilitate coordination with the development
of transmission necessary to transport energy produced by the project to market;
(4) allocates recoverable costs appropriately between wholesale and retail customers;
(5) terminates recovery when costs have been fully recovered or have otherwise
been reflected in a utility's rates.
(b) A petition filed under this subdivision must include:
(1) a description of the facilities for which costs are to be recovered;
(2) an implementation schedule for the facilities;
(3) the utility's costs for the facilities;
(4) a description of the utility's efforts to ensure that costs of the facilities are
reasonable and were prudently incurred; and
(5) a description of the benefits of the project in promoting the development of
renewable energy in a manner consistent with this chapter.
Sec. 5.
Minnesota Statutes 2006, section 216B.243, is amended by adding a
subdivision to read:
new text begin Subd. 9. new text end
new text begin Renewable energy standard facilities. new text end
new text begin
The requirements of this section
do not apply to a wind energy conversion system or a solar electric generation facility that
is intended to be used to meet or exceed the obligations of section 216B.1691; provided
that, after notice and comment, the commission determines that the facility is a reasonable
and prudent approach to meeting a utility's obligations under that section. When making
this determination, the commission may consider the size of the facility relative to a
utility's total need for renewable resources and alternative approaches for supplying
the renewable energy to be supplied by the proposed facility, and must consider the
facility's ability to promote economic development, as required under section 216B.1691,
subdivision 9, maintain electric system reliability and consider impacts on ratepayers, and
other criteria as the commission may determine are relevant.
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