SF 3838

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 03/31/2022 08:21am

A bill for an act
relating to energy; authorizing customer heating cost bill relief; providing
reimbursement to municipal utilities for reserve funds; allowing a tax credit for
excess energy costs for municipal utility customers; appropriating money.

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

Section 1. new text begin CUSTOMER HEATING COSTS BILL RELIEF.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Commission" means the Public Utilities Commission.
new text end

new text begin (c) "Commissioner" means the commissioner of commerce.
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new text begin (d) "Supplier" means a person who furnishes propane or heating oil at retail to customers
in Minnesota as their primary heat source.
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new text begin (e) "Residential customer" means a residential customer of a utility who is subject to
the surcharge authorized by the commission in Docket No. G999/CI-21-135.
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new text begin (f) "Utility" means a public utility as defined in Minnesota Statutes, section 216B.02,
subdivision 4, that furnishes natural gas at retail to customers in Minnesota.
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new text begin (g) "Small business customer" means a commercial customer consuming an average of
1500 therms per month or less.
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new text begin Subd. 2. new text end

new text begin Purpose. new text end

new text begin The legislature recognizes that costs for natural gas, propane, and
heating oil have increased to levels that have become unaffordable. In order to address the
issue of heating affordability, the customer heating costs bill relief described in this section
is provided as a mechanism for relief to customers of utilities and suppliers in this state.
new text end

new text begin Subd. 3. new text end

new text begin Allocation of appropriation; implementation. new text end

new text begin (a) The commissioner shall
allocate at least 90 percent of the amount appropriated in section 4 among utilities as provided
in paragraph (c) for bill credits to residential and small business customers of a utility to
address heating cost affordability.
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new text begin (b) The amounts not allocated for bill credits under paragraph (a) shall be allocated to
suppliers to address heating cost affordability for supplier customers and for administrative
costs for the commissioner.
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new text begin (c) To implement the bill credits and relief authorized by this section, the commissioner
shall work with utilities and suppliers to ensure timely distribution of benefits. Funding for
utility customers shall be distributed in proportion to each utility's share of total gas
consumption for residential and small business customers and shall be distributed between
residential and small business customers in proportion to each customer class' share of total
gas consumption.
new text end

new text begin Subd. 4. new text end

new text begin Utility plans. new text end

new text begin A utility shall file a plan to implement customer heating costs
bill relief with the commission. The commission shall approve plans submitted to the
commission by each utility.
new text end

new text begin Subd. 5. new text end

new text begin Apportionment of bill credits. new text end

new text begin A bill credit issued under this section may be
apportioned to customers over a period of up to 12 months if deemed appropriate by the
commission. Bill credits must be applied to customer bills beginning no later than September
1, 2022.
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. new text begin MUNICIPAL UTILITIES; DISCLOSURE OF COSTS; REIMBURSEMENT
FOR RESERVE FUNDS.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
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new text begin (b) "Critical period" means the period beginning February 12, 2021, and ending February
17, 2021.
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new text begin (c) "Incremental cost" means the incremental cost of natural gas purchased during the
critical period, calculated by multiplying the utility's incremental price by its impacted
volume.
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new text begin (d) "Incremental price" means the average unit price a utility paid for natural gas
purchased for immediate delivery during the critical period, minus the average natural gas
unit price for wholesale natural gas the utility paid during the period between February 5,
2021, and February 10, 2021.
new text end

new text begin (e) "Impacted volume" means the volume of natural gas a utility purchased for immediate
delivery in Minnesota during the critical period.
new text end

new text begin (f) "Utility" means a nonprofit municipal utility established under Minnesota Statutes,
chapter 412, that (1) is owned by the city to which it provides service, and (2) sells natural
gas to retail customers in Minnesota.
new text end

new text begin Subd. 2. new text end

new text begin Utilities must disclose increased energy costs. new text end

new text begin No later than July 1, 2022, a
utility must calculate, for each of its customers that received natural gas service during the
critical period, the incremental price multiplied by the volume of natural gas consumed by
the customer during the critical period. The utility must certify and forward that calculation
in a written notice to each customer.
new text end

new text begin Subd. 3. new text end

new text begin Reimbursement for reserve revenues. new text end

new text begin A utility that paid for wholesale natural
gas purchased during the critical period, in whole or in part, by drawing down accumulated
reserve revenues may apply to the commissioner of commerce for a rebate equal to its
incremental cost minus any payment of its incremental cost by natural gas customers. The
commissioner shall require a utility to submit evidence supporting the rebate request amount
with a rebate application.
new text end

new text begin Subd. 4. new text end

new text begin Appropriation. new text end

new text begin $35,000,000 in fiscal year 2023 is appropriated from the general
fund to the commissioner of commerce for the purpose of making rebates to municipal
utilities under subdivision 3. This is a onetime appropriation. Any unexpended funds
remaining on December 31, 2022, cancel to the general fund.
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. 3. new text begin TAX CREDIT FOR EXCESS ENERGY COSTS FOR MUNICIPAL UTILITY
CUSTOMERS.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Excess energy costs" means the amount of energy costs disclosed to a taxpayer by
a utility under section 2, subdivision 2.
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new text begin (c) The definitions in section 2, subdivision 1, and Minnesota Statutes, section 290.01,
apply for this section.
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new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin (a) An individual income taxpayer is allowed a credit against
the tax due under Minnesota Statutes, chapter 290, equal to the amount of the taxpayer's
excess energy costs.
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new text begin (b) Credits allowed to a partnership, a limited liability company taxed as a partnership,
or an S corporation are passed through pro rata to the partners, members, or shareholders
based on their share of the entity's income for the taxable year.
new text end

new text begin Subd. 3. new text end

new text begin Credit refundable. new text end

new text begin (a) If the amount of credit which a taxpayer would be
eligible to receive under this section exceeds the claimant's tax liability under Minnesota
Statutes, chapter 290, the excess amount of the credit shall be refunded to the claimant by
the commissioner of revenue.
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new text begin (b) An amount sufficient to pay the refunds required by this section is appropriated to
the commissioner of revenue from the general fund.
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new text begin Subd. 4. new text end

new text begin Denial of double benefit. new text end

new text begin For a taxpayer who deducted excess energy costs in
calculating adjusted gross income and claimed the credit under this section, the amount of
excess energy costs is an addition, as defined in Minnesota Statutes, section 290.0131,
subdivision 1. The rules governing additions in that section apply for this subdivision.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2020, and before January 1, 2022.
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Sec. 4. new text begin APPROPRIATION; CUSTOMER HEATING COSTS BILL RELIEF.
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new text begin $....... in fiscal year 2023 is appropriated from the general fund to the commissioner of
commerce to address heating cost affordability for customers as described in section 1. Of
this amount, up to $150,000 is for the commissioner for costs to administer section 1. This
is a onetime appropriation. Any unexpended funds remaining at the end of the biennium
cancel to the general fund.
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