SF 3870

1st Engrossment - 90th Legislature (2017 - 2018) Posted on 04/19/2018 04:24pm

A bill for an act
relating to energy; amending the renewable development account utility annual
contribution; modifying the solar energy incentive program; establishing a pension
rate base; establishing criteria for utility cost recovery of energy storage system
pilot projects; establishing a utility stakeholder group; requiring investor-owned
utilities to include in integrated resource plans an assessment of energy storage
systems; extending the expiration date for an assessment; requiring creation of an
excavation notice system contact information database; requiring a cost-benefit
analysis of energy storage systems; appropriating money; amending Minnesota
Statutes 2016, sections 216B.16, by adding a subdivision; 216B.1645, by adding
a subdivision; 216B.2422, subdivision 1, by adding a subdivision; 216D.03, by
adding a subdivision; Minnesota Statutes 2017 Supplement, sections 116C.779,
subdivision 1; 116C.7792; 216B.1691, subdivision 2f; 216B.241, subdivision 1d;
216B.62, subdivision 3b.

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

ARTICLE 1

ENERGY

Section 1. new text begin APPROPRIATIONS. new text end

new text begin The sums shown in the columns marked "Appropriations" are added to the appropriations
in Laws 2017, chapter 94, or appropriated to the agencies and for the purposes specified in
this article. The appropriations are from the general fund, or another named fund, and are
available for the fiscal year indicated for each purpose. The figures "2018" and "2019" used
in this article mean that the addition to the appropriations listed under them are available
for the fiscal year ending June 30, 2018, or June 30, 2019, respectively. "The first year" is
fiscal year 2018. "The second year" is fiscal year 2019. Appropriations for fiscal year 2018
are effective June 1, 2018.
new text end

			new text begin APPROPRIATIONS new text end
			new text begin Available for the Year new text end
			new text begin Ending June 30 new text end
				new text begin 2018 new text end		new text begin 2019 new text end

Sec. 2. new text begin DEPARTMENT OF COMMERCE new text end

new text begin Subdivision 1. new text end new text begin Total Appropriation new text end

new text begin $ new text end

new text begin -0- new text end

new text begin $ new text end

new text begin 150,000 new text end

new text begin Appropriations by Fund new text end
	new text begin 2018 new text end	new text begin 2019 new text end
new text begin Special Revenue new text end	new text begin -0- new text end	new text begin 150,000 new text end

new text begin Subd. 2. new text end new text begin Energy Resources new text end

new text begin $ new text end

new text begin -0- new text end

new text begin $ new text end

new text begin 150,000 new text end

new text begin Appropriations by Fund new text end
	new text begin 2018 new text end	new text begin 2019 new text end
new text begin Special Revenue new text end	new text begin -0- new text end	new text begin 150,000 new text end

new text begin $150,000 the second year is from the
renewable development account in the special
revenue fund established in Minnesota
Statutes, section 116C.779, subdivision 1, to
conduct an energy storage systems cost-benefit
analysis. This is a onetime appropriation.
new text end

ARTICLE 2

ENERGY POLICY

Section 1.

Minnesota Statutes 2017 Supplement, section 116C.779, subdivision 1, is
amended to read:

Subdivision 1.

Renewable development account.

(a) The renewable development
account is established as a separate account in the special revenue fund in the state treasury.
Appropriations and transfers to the account shall be credited to the account. Earnings, such
as interest, dividends, and any other earnings arising from assets of the account, shall be
credited to the account. Funds remaining in the account at the end of a fiscal year are not
canceled to the general fund but remain in the account until expended. The account shall
be administered by the commissioner of management and budget as provided under this
section.

(b) On July 1, 2017, the public utility that owns the Prairie Island nuclear generating
plant must transfer all funds in the renewable development account previously established
under this subdivision and managed by the public utility to the renewable development
account established in paragraph (a). Funds awarded to grantees in previous grant cycles
that have not yet been expended and unencumbered funds required to be paid in calendar
year 2017 under paragraphs deleted text begin (f) deleted text end new text begin (e) new text end and deleted text begin (g) deleted text end new text begin (f) new text end , and sections 116C.7792 and 216C.41, are
not subject to transfer under this paragraph.

(c) Except as provided in subdivision 1a, beginning January 15, deleted text begin 2018 deleted text end new text begin 2022 new text end , and
continuing each January 15 thereafter, the public utility that owns the Prairie Island new text begin and
Monticello new text end nuclear generating deleted text begin plant deleted text end new text begin plants new text end must transfer to the renewable development
account deleted text begin $500,000 each year for each dry cask containing spent fuel that is located at the
Prairie Island power plant for deleted text end new text begin $16,000,000 new text end each year deleted text begin the deleted text end new text begin either new text end plant is in operation, and
deleted text begin $7,500,000 each year the plant is not in operation deleted text end new text begin , new text end if ordered by the commission pursuant
to paragraph deleted text begin (i) deleted text end new text begin (h), $7,5000,000 each year the Prairie Island plant is not in operation and
$5,250,000 each year the Monticello plant is not in operation new text end . The fund transfer must be
made if nuclear waste is stored in a dry cask at the independent spent-fuel storage facility
at Prairie Island new text begin or Monticello new text end for any part of a year.

deleted text begin (d) Except as provided in subdivision 1a, beginning January 15, 2018, and continuing
each January 15 thereafter, the public utility that owns the Monticello nuclear generating
plant must transfer to the renewable development account $350,000 each year for each dry
cask containing spent fuel that is located at the Monticello nuclear power plant for each
year the plant is in operation, and $5,250,000 each year the plant is not in operation if ordered
by the commission pursuant to paragraph (i). The fund transfer must be made if nuclear
waste is stored in a dry cask at the independent spent-fuel storage facility at Monticello for
any part of a year.
deleted text end

deleted text begin (e) deleted text end new text begin (d) new text end Each year, the public utility shall withhold from the funds transferred to the
renewable development account under deleted text begin paragraphs deleted text end new text begin paragraph new text end (c) deleted text begin and (d) deleted text end the amount necessary
to pay its obligations under paragraphs new text begin (e), new text end (f) deleted text begin and (g) deleted text end new text begin , (j), and (n) new text end , and sections 116C.7792
and 216C.41, for that calendar year.

deleted text begin (f) deleted text end new text begin (e) new text end If the commission approves a new or amended power purchase agreement, the
termination of a power purchase agreement, or the purchase and closure of a facility under
section 216B.2424, subdivision 9, with an entity that uses poultry litter to generate electricity,
the public utility subject to this section shall enter into a contract with the city in which the
poultry litter plant is located to provide grants to the city for the purposes of economic
development on the following schedule: $4,000,000 in fiscal year 2018; $6,500,000 each
fiscal year in 2019 and 2020; and $3,000,000 in fiscal year 2021. The grants shall be paid
by the public utility from funds withheld from the transfer to the renewable development
account, as provided in paragraphs (b) and deleted text begin (e) deleted text end new text begin (d) new text end .

deleted text begin (g) deleted text end new text begin (f) new text end If the commission approves a new or amended power purchase agreement, or the
termination of a power purchase agreement under section 216B.2424, subdivision 9, with
an entity owned or controlled, directly or indirectly, by two municipal utilities located north
of Constitutional Route No. 8, that was previously used to meet the biomass mandate in
section 216B.2424, the public utility that owns a nuclear generating plant shall enter into a
grant contract with such entity to provide $6,800,000 per year for five years, commencing
30 days after the commission approves the new or amended power purchase agreement, or
the termination of the power purchase agreement, and on each June 1 thereafter through
2021, to assist the transition required by the new, amended, or terminated power purchase
agreement. The grant shall be paid by the public utility from funds withheld from the transfer
to the renewable development account as provided in paragraphs (b) and deleted text begin (e) deleted text end new text begin (d) new text end .

deleted text begin (h) deleted text end new text begin (g) new text end The collective amount paid under the grant contracts awarded under paragraphs
deleted text begin (f) deleted text end new text begin (e) new text end and deleted text begin (g) deleted text end new text begin (f) new text end is limited to the amount deposited into the renewable development account,
and its predecessor, the renewable development account, established under this section, that
was not required to be deposited into the account under Laws 1994, chapter 641, article 1,
section 10.

deleted text begin (i) deleted text end new text begin (h) new text end After discontinuation of operation of the Prairie Island nuclear plant or the
Monticello nuclear plant and each year spent nuclear fuel is stored in dry cask at the
discontinued facility, the commission shall require the public utility to pay $7,500,000 for
the discontinued Prairie Island facility and $5,250,000 for the discontinued Monticello
facility for any year in which the commission finds, by the preponderance of the evidence,
that the public utility did not make a good faith effort to remove the spent nuclear fuel stored
at the facility to a permanent or interim storage site out of the state. This determination shall
be made at least every two years.

deleted text begin (j) deleted text end new text begin (i) The utility shall file annually with the commission a petition for the recovery of
all funds required to be transferred or withheld under paragraphs (c), (d), and (h), for the
next year through a rider mechanism. The commission shall approve a reasonable cost
recovery schedule for all such funds.
new text end

new text begin (j) On or before January 15 of each year, the utility shall file a petition with the
commission setting forth the amounts withheld by the utility in the prior year under paragraph
(d) and the amount actually paid in that year for obligations identified in paragraph (d). If
the amount actually paid is less than the amount withheld, the utility shall deduct the surplus
from the amount withheld for the current year under paragraph (d). If the amount actually
paid is more than the amount withheld, the utility shall add the deficit to the amount withheld
in the current year under paragraph (d). Any surplus at the end of all programs identified
in paragraph (d) shall be returned to the customers of the utility.
new text end

new text begin (k) new text end Funds in the account may be expended only for any of the following purposes:

(1) to stimulate research and development of renewable electric energy technologies;

(2) to encourage grid modernization, including, but not limited to, projects that implement
electricity storage, load control, and smart meter technology; and

(3) to stimulate other innovative energy projects that reduce demand and increase system
efficiency and flexibility.

Expenditures from the fund must benefit Minnesota ratepayers receiving electric service
from the utility that owns a nuclear-powered electric generating plant in this state or the
Prairie Island Indian community or its members.

The utility that owns a nuclear generating plant is eligible to apply for grants under this
subdivision.

deleted text begin (k) deleted text end new text begin (l) new text end For the purposes of paragraph deleted text begin (j) deleted text end new text begin (k) new text end , the following terms have the meanings
given:

(1) "renewable" has the meaning given in section 216B.2422, subdivision 1, paragraph
(c), clauses (1), (2), (4), and (5); and

(2) "grid modernization" means:

(i) enhancing the reliability of the electrical grid;

(ii) improving the security of the electrical grid against cyberthreats and physical threats;
and

(iii) increasing energy conservation opportunities by facilitating communication between
the utility and its customers through the use of two-way meters, control technologies, energy
storage and microgrids, technologies to enable demand response, and other innovative
technologies.

deleted text begin (l) deleted text end new text begin (m) new text end A renewable development account advisory group that includes, among others,
representatives of the public utility and its ratepayers, and includes at least one representative
of the Prairie Island Indian community appointed by that community's tribal council, shall
develop recommendations on account expenditures. new text begin Members of the advisory group shall
be chosen by the public utility unless another method of selection is provided under this
section. new text end The advisory group must design a request for proposal and evaluate projects
submitted in response to a request for proposals. The advisory group must utilize an
independent third-party expert to evaluate proposals submitted in response to a request for
proposal, including all proposals made by the public utility. A request for proposal for
research and development under paragraph deleted text begin (j) deleted text end new text begin (k) new text end , clause (1), may be limited to or include
a request to higher education institutions located in Minnesota for multiple projects authorized
under paragraph deleted text begin (j) deleted text end new text begin (k) new text end , clause (1). The request for multiple projects may include a provision
that exempts the projects from the third-party expert review and instead provides for project
evaluation and selection by a merit peer review grant system. In the process of determining
request for proposal scope and subject and in evaluating responses to request for proposals,
the advisory group must strongly consider, where reasonable, potential benefit to Minnesota
citizens and businesses and the utility's ratepayers.

deleted text begin (m) deleted text end new text begin (n) The cost of acquiring the services of the independent third-party expert described
in paragraph (m) and any other costs incurred in administering the advisory group and its
actions as required by this section shall be paid from funds withheld by the public utility
under paragraph (d).
new text end

new text begin (o) new text end The advisory group shall submit funding recommendations to the public utility,
which has full and sole authority to determine which expenditures shall be submitted by
the advisory group to the deleted text begin legislature deleted text end new text begin commission new text end . The commission may approve proposed
expenditures, may disapprove proposed expenditures that it finds not to be in compliance
with this subdivision or otherwise not in the public interest, and may, if agreed to by the
public utility, modify proposed expenditures. The commission shall, by order, submit its
funding recommendations to the legislature as provided under paragraph deleted text begin (n) deleted text end new text begin (m) new text end .

deleted text begin (n) deleted text end new text begin (p) new text end The commission shall present its recommended appropriations from the account
to the senate and house of representatives committees with jurisdiction over energy policy
and finance annually by February 15. Expenditures from the account must be appropriated
by law. In enacting appropriations from the account, the legislature:

(1) may approve or disapprove, but may not modify, the amount of an appropriation for
a project recommended by the commission; and

(2) may not appropriate money for a project the commission has not recommended
funding.

deleted text begin (o) deleted text end new text begin (q) new text end A request for proposal for renewable energy generation projects must, when
feasible and reasonable, give preference to projects that are most cost-effective for a particular
energy source.

deleted text begin (p) deleted text end new text begin (r) new text end The advisory group must annually, by February 15, report to the chairs and ranking
minority members of the legislative committees with jurisdiction over energy policy on
projects funded by the account for the prior year and all previous years. The report must,
to the extent possible and reasonable, itemize the actual and projected financial benefit to
the public utility's ratepayers of each project.

deleted text begin (q) deleted text end new text begin (s) new text end By February 1, 2018, and each February 1 thereafter, the commissioner of
management and budget shall submit a written report regarding the availability of funds in
and obligations of the account to the chairs and ranking minority members of the senate
and house committees with jurisdiction over energy policy and finance, the public utility,
and the advisory group.

deleted text begin (r) deleted text end new text begin (t) new text end A project receiving funds from the account must produce a written final report
that includes sufficient detail for technical readers and a clearly written summary for
nontechnical readers. The report must include an evaluation of the project's financial,
environmental, and other benefits to the state and the public utility's ratepayers.

deleted text begin (s) deleted text end new text begin (u) new text end Final reports, any mid-project status reports, and renewable development account
financial reports must be posted online on a public Web site designated by the commissioner
of commerce.

deleted text begin (t) deleted text end new text begin (v) new text end All final reports must acknowledge that the project was made possible in whole
or part by the Minnesota renewable development account, noting that the account is financed
by the public utility's ratepayers.

deleted text begin (u) deleted text end new text begin (w) new text end Of the amount in the renewable development account, priority must be given to
making the payments required under section 216C.417.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 1, 2018.
new text end

Sec. 2.

Minnesota Statutes 2017 Supplement, section 116C.7792, is amended to read:

116C.7792 SOLAR ENERGY INCENTIVE PROGRAM.

The utility subject to section 116C.779 shall operate a program to provide solar energy
production incentives for solar energy systems of no more than a total nameplate capacity
of deleted text begin 20 deleted text end new text begin 40 new text end kilowatts direct current new text begin or less new text end . The program shall be operated for eight consecutive
calendar years commencing in 2014. $5,000,000 shall be allocated in each of the first four
years, $15,000,000 in the fifth year, $10,000,000 in each of the sixth and seventh years, and
$5,000,000 in the eighth year from funds withheld from transfer to the renewable
development account under section 116C.779, subdivision 1, deleted text begin paragraphs (b) and (e) deleted text end new text begin paragraph
(d) new text end , and placed in a separate account for the purpose of the solar production incentive
program new text begin operated by the utility and not for any other program or purpose. Any unspent
amount allocated in the fifth year is available until December 31 of the sixth year. Beginning
with the allocation in the sixth year and thereafter, any unspent amount remaining at the
end of an allocation year must be transferred to the renewable development account.
Applications submitted in the fifth year may be amended without reapplication for that
portion of a project over a nameplate capacity of 20 kilowatts new text end . The solar system must be
sized to less than 120 percent of the customer's on-site annual energy consumption new text begin when
combined with other distributed generation resources and subscriptions provided under
section 216B.1641 associated with the premise new text end . The production incentive must be paid for
ten years commencing with the commissioning of the system. The utility must file a plan
to operate the program with the commissioner of commerce. The utility may not operate
the program until it is approved by the commissioner. new text begin A change to the program to include
projects up to a nameplate capacity of 40 kilowatts or less does not require the utility to file
a plan with the commissioner. Any plan approved by the commissioner of commerce must
not provide an increased incentive scale over prior years unless the commissioner
demonstrates that changes in the market for solar energy facilities require an increase.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 1, 2018.
new text end

Sec. 3.

Minnesota Statutes 2016, section 216B.16, is amended by adding a subdivision to
read:

new text begin Subd. 13b. new text end

new text begin Pension rate base. new text end

new text begin The commission must allow a public utility to include
in the rate base and recover from ratepayers the costs incurred to contribute to employee
pensions, including (1) accumulated contributions in excess of net periodic benefit costs,
and (2) contributions necessary to comply with the federal Pension Protection Act of 2006
and other applicable federal and state pension funding requirements. A public utility is
authorized to track for future recovery any unrecoverable return of pension rate base costs
and investments at the return on investment level established in the public utility's last
general rate case that have been incurred during the period between general rate cases.
new text end

Sec. 4.

Minnesota Statutes 2016, section 216B.1645, is amended by adding a subdivision
to read:

new text begin Subd. 2b. new text end

new text begin Energy storage system pilot projects. new text end

new text begin (a) A public utility may petition the
commission as provided in subdivision 2a to recover costs associated with the implementation
of an energy storage system pilot project, provided the following conditions are met:
new text end

new text begin (1) the public utility has submitted a report to the commission containing, at a minimum,
the following information regarding the proposed energy storage system pilot project:
new text end

new text begin (i) the storage technology utilized;
new text end

new text begin (ii) the energy storage capacity and the duration of output at that capacity;
new text end

new text begin (iii) the proposed location;
new text end

new text begin (iv) the purchasing and installation costs;
new text end

new text begin (v) how the project will interact with existing distributed generation resources on the
utility's grid; and
new text end

new text begin (vi) the goals the project proposes to achieve, including controlling frequency or voltage,
mitigating transmission congestion, providing emergency power supplies during outages,
reducing curtailment of existing renewable energy generators, and reducing peak power
costs;
new text end

new text begin (2) the utility has adequately responded to any commission requests for additional
information regarding the energy storage system pilot project; and
new text end

new text begin (3) the commission has determined that the energy storage system pilot project is in the
public interest.
new text end

new text begin (b) The commission may modify a proposed energy storage system pilot project the
commission approves for rate recovery.
new text end

new text begin (c) For the purposes of this subdivision:
new text end

new text begin (1) "energy storage system" has the meaning given in section 216B.2422, subdivision
1, paragraph (f); and
new text end

new text begin (2) "pilot project" means a project deployed at a limited number of locations in order to
assess the technical and economic effectiveness of its operations.
new text end

Sec. 5.

Minnesota Statutes 2017 Supplement, section 216B.1691, subdivision 2f, is amended
to read:

Subd. 2f.

Solar energy standard.

(a) In addition to the requirements of subdivisions 2a
and 2b, each public utility shall generate or procure sufficient electricity generated by solar
energy to serve its retail electricity customers in Minnesota so that by the end of 2020, at
least 1.5 percent of the utility's total retail electric sales to retail customers in Minnesota is
generated by solar energy.

(b) For a public utility with more than 200,000 retail electric customers, at least ten
percent of the 1.5 percent goal must be met by solar energy generated by or procured from
solar photovoltaic devices with a nameplate capacity of deleted text begin 20 deleted text end new text begin 40 new text end kilowatts or less.

(c) A public utility with between 50,000 and 200,000 retail electric customers:

(1) must meet at least ten percent of the 1.5 percent goal with solar energy generated by
or procured from solar photovoltaic devices with a nameplate capacity of 40 kilowatts or
less; and

(2) may apply toward the ten percent goal in clause (1) individual customer subscriptions
of 40 kilowatts or less to a community solar garden program operated by the public utility
that has been approved by the commission.

(d) The solar energy standard established in this subdivision is subject to all the provisions
of this section governing a utility's standard obligation under subdivision 2a.

(e) It is an energy goal of the state of Minnesota that, by 2030, ten percent of the retail
electric sales in Minnesota be generated by solar energy.

(f) For the purposes of calculating the total retail electric sales of a public utility under
this subdivision, there shall be excluded retail electric sales to customers that are:

(1) an iron mining extraction and processing facility, including a scram mining facility
as defined in Minnesota Rules, part 6130.0100, subpart 16; or

(2) a paper mill, wood products manufacturer, sawmill, or oriented strand board
manufacturer.

Those customers may not have included in the rates charged to them by the public utility
any costs of satisfying the solar standard specified by this subdivision.

(g) A public utility may not use energy used to satisfy the solar energy standard under
this subdivision to satisfy its standard obligation under subdivision 2a. A public utility may
not use energy used to satisfy the standard obligation under subdivision 2a to satisfy the
solar standard under this subdivision.

(h) Notwithstanding any law to the contrary, a solar renewable energy credit associated
with a solar photovoltaic device installed and generating electricity in Minnesota after
August 1, 2013, but before 2020 may be used to meet the solar energy standard established
under this subdivision.

(i) Beginning July 1, 2014, and each July 1 through 2020, each public utility shall file
a report with the commission reporting its progress in achieving the solar energy standard
established under this subdivision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 1, 2018.
new text end

Sec. 6.

Minnesota Statutes 2017 Supplement, section 216B.241, subdivision 1d, is amended
to read:

Subd. 1d.

Technical assistance.

(a) The commissioner shall evaluate energy conservation
improvement programs on the basis of cost-effectiveness and the reliability of the
technologies employed. The commissioner shall, by order, establish, maintain, and update
energy-savings assumptions that must be used when filing energy conservation improvement
programs. The commissioner shall establish an inventory of the most effective energy
conservation programs, techniques, and technologies, and encourage all Minnesota utilities
to implement them, where appropriate, in their service territories. The commissioner shall
describe these programs in sufficient detail to provide a utility reasonable guidance
concerning implementation. The commissioner shall prioritize the opportunities in order of
potential energy savings and in order of cost-effectiveness. The commissioner may contract
with a third party to carry out any of the commissioner's duties under this subdivision, and
to obtain technical assistance to evaluate the effectiveness of any conservation improvement
program. The commissioner may assess up to $850,000 annually for the purposes of this
subdivision. The assessments must be deposited in the state treasury and credited to the
energy and conservation account created under subdivision 2a. An assessment made under
this subdivision is not subject to the cap on assessments provided by section 216B.62, or
any other law.

(b) Of the assessment authorized under paragraph (a), the commissioner may expend
deleted text begin up to $400,000 annually deleted text end new text begin $800,000 each biennium new text end for the purpose of developing, operating,
maintaining, and providing technical support for a uniform electronic data reporting and
tracking system available to all utilities subject to this section, in order to enable accurate
measurement of the cost and energy savings of the energy conservation improvements
required by this section. This paragraph expires June 30, deleted text begin 2018 deleted text end new text begin 2022 new text end .

new text begin (c) The commissioner must establish a utility stakeholder group to direct development
and maintenance of the tracking system available to all utilities. The utility stakeholder
group will direct 50 percent of the biennium expenditures. The utility stakeholder group
shall include, but is not limited to, stakeholders representative of the Minnesota Rural
Electric Association, the Minnesota Municipal Utility Association, investor-owned utilities,
municipal power agencies, energy conservation organizations, and businesses that work in
energy efficiency. One of the stakeholder members must serve as chair. The utility
stakeholder group must develop and submit its work plan to the commissioner. The utility
stakeholder group shall study alternative tracking system options, which shall be submitted
with the work plan to the commissioner by January 15, 2020. The utility stakeholder group
must meet regularly at the call of the chair. Meetings of the utility stakeholder group are
subject to chapter 13D.
new text end

Sec. 7.

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 commercially available technology capable of
absorbing and storing energy, and delivering stored energy for use at a later time. For
purposes of this section, energy storage systems must be from a stationary source. For
purposes of this section:
new text end

new text begin (1) an energy storage system may be:
new text end

new text begin (i) either centralized or distributed; or
new text end

new text begin (ii) owned by a load-serving entity or local publicly owned electric utility, a customer
of a load-serving entity or local publicly owned electric utility, a third party, or jointly owned
by two or more of the entities under this item or any other entity;
new text end

new text begin (2) an energy storage system must:
new text end

new text begin (i) reduce demand for peak electrical generation;
new text end

new text begin (ii) defer or substitute for an investment in generation, transmission, or distribution
assets; or
new text end

new text begin (iii) improve the reliable operation of the electrical transmission or distribution grid;
and
new text end

new text begin (3) an energy storage system must:
new text end

new text begin (i) use mechanical, chemical, or thermal processes to store energy that was generated
at one time for use at a later time;
new text end

new text begin (ii) store thermal energy for direct use for heating or cooling at a later time in a manner
that reduces the demand for electricity at that later time;
new text end

new text begin (iii) use mechanical, chemical, or thermal processes to store energy generated from
renewable resources for use at a later time; or
new text end

new text begin (iv) use mechanical, chemical, or thermal processes to store energy generated from
mechanical processes that would otherwise be wasted for delivery at a later time.
new text end

new text begin (g) "Investor-owned utility" means a utility, as defined in paragraph (b), that is owned
by private persons.
new text end

Sec. 8.

Minnesota Statutes 2016, section 216B.2422, is amended by adding a subdivision
to read:

new text begin Subd. 7. new text end

new text begin Energy storage systems assessment. new text end

new text begin (a) Each investor-owned utility must
include as part of an integrated resource plan or plan modification filed by the investor-owned
utility an assessment of energy storage systems. The assessment must:
new text end

new text begin (1) consider energy storage systems as both transmission and distribution-interconnected
resources;
new text end

new text begin (2) analyze energy storage systems both as an alternative for and as an adjunct to
generation resources for ancillary services and resource adequacy; and
new text end

new text begin (3) require that in any prudence determination for a new resource acquisition that resource
options analysis must include a storage alternative.
new text end

new text begin (b) In approving a resource plan, the commission must determine, with respect to the
assessment required in paragraph (a), whether:
new text end

new text begin (1) the utility's forecast requirements are based on substantially accurate data and an
adequate forecasting method;
new text end

new text begin (2) the plan identifies and takes into account any present and projected reductions in
energy demand that may result from measures to improve energy efficiency in the industrial,
commercial, residential, and energy-producing sectors of the area being served; and
new text end

new text begin (3) the plan includes appropriate and up-to-date methods for modeling resources,
including the modeling and valuing of flexible operations.
new text end

Sec. 9.

Minnesota Statutes 2017 Supplement, section 216B.62, subdivision 3b, is amended
to read:

Subd. 3b.

Assessment for department regional and national duties.

In addition to
other assessments in subdivision 3, the department may assess up to $500,000 per fiscal
year for performing its duties under section 216A.07, subdivision 3a. The amount in this
subdivision shall be assessed to energy utilities in proportion to their respective gross
operating revenues from retail sales of gas or electric service within the state during the last
calendar year and shall be deposited into an account in the special revenue fund and is
appropriated to the commissioner of commerce for the purposes of section 216A.07,
subdivision 3a. An assessment made under this subdivision is not subject to the cap on
assessments provided in subdivision 3 or any other law. For the purpose of this subdivision,
an "energy utility" means public utilities, generation and transmission cooperative electric
associations, and municipal power agencies providing natural gas or electric service in the
state. This subdivision expires June 30, deleted text begin 2018 deleted text end new text begin 2019 new text end .

Sec. 10.

Minnesota Statutes 2016, section 216D.03, is amended by adding a subdivision
to read:

new text begin Subd. 5. new text end

new text begin Contact information database. new text end

new text begin The notification center must create a database
to collect, maintain, and annually update the contact information for each operator in
Minnesota. At a minimum, the contact information stored in the database must include the
name, telephone number, mailing address, and e-mail address, if available, for the operator
responsible for emergency response related to each underground facility 24 hours per day
and seven days per week. The information contained in the database must be made available
to an excavator upon request.
new text end

Sec. 11. new text begin COST-BENEFIT ANALYSIS OF ENERGY STORAGE SYSTEMS.
new text end

new text begin (a) The commissioner of commerce must contract with an independent consultant selected
through a request for proposal process to produce a report analyzing the potential costs and
benefits of energy storage systems, as defined in Minnesota Statutes, section 216B.2422,
subdivision 1, in Minnesota. In examining the cost-effectiveness of energy storage systems,
the study must analyze:
new text end

new text begin (1) cost savings to ratepayers from the provision of services, including but not limited
to energy price arbitrage, ancillary services, resource adequacy, and transmission and
distribution asset deferral or substitution;
new text end

new text begin (2) direct-cost savings to customers that deploy energy storage systems;
new text end

new text begin (3) an improved ability to integrate renewable resources;
new text end

new text begin (4) improved reliability and power quality;
new text end

new text begin (5) the effect on retail electric rates over the useful life of a given energy storage system
compared to the impact on retail electric rates using a nonenergy storage system alternative
over the useful life of the nonenergy storage system alternative;
new text end

new text begin (6) reduced greenhouse gas emissions; and
new text end

new text begin (7) any other value reasonably related to the application of energy storage system
technology.
new text end

new text begin (b) By April 1, 2019, the commissioner of commerce shall submit the study to the chairs
and ranking minority members of the legislative committees with jurisdiction over energy
policy and finance.
new text end