SF 4942

1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 04/23/2024 03:09pm

A bill for an act
relating to state government; appropriating money for energy, utilities, environment,
and climate; requiring utilities to accept an individual taxpayer identification
number when new customers apply for utility service; allowing public utilities
providing electric service to propose goals for efficient fuel-switching improvement
achievements to the commissioner of commerce; modifying the commercial
property assessed clean energy program; making technical changes to various
provisions governing or administered by the Department of Commerce; amending
Minnesota Statutes 2022, sections 216B.098, by adding a subdivision; 216B.16,
subdivisions 6c, 8; 216B.2402, subdivision 10, by adding a subdivision; 216B.2403,
subdivisions 2, 3, 5, 8; 216B.241, subdivisions 2, 11, 12; 216C.10; 216C.435,
subdivisions 3a, 3b, 4, 10, by adding subdivisions; 216C.436, subdivisions 1, 4,
7, 8, 10; Minnesota Statutes 2023 Supplement, sections 116C.779, subdivision 1;
216C.08; 216C.09; 216C.435, subdivision 8; 216C.436, subdivisions 1b, 2;
proposing coding for new law in Minnesota Statutes, chapter 216C.

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

ARTICLE 1

CLIMATE AND ENERGY FINANCE

Section 1. new text begin APPROPRIATIONS. new text end

new text begin The sums shown in the columns marked "Appropriations" are 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 years indicated for each purpose.
The figures "2024" and "2025" used in this article mean that the appropriations listed under
them are available for the fiscal year ending June 30, 2024, or June 30, 2025, respectively.
"The first year" is fiscal year 2024. "The second year" is fiscal year 2025. "The biennium"
is fiscal years 2024 and 2025.
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 2024 new text end		new text begin 2025 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 1,000,000 new text end

new text begin The amounts that may be spent for each
purpose are specified in the following
subdivisions.
new text end

new text begin Subd. 2. new text end new text begin Advanced Nuclear Technologies Study new text end

new text begin $300,000 the second year is for the advanced
nuclear technologies study under article 3,
section 34. This is a onetime appropriation.
new text end

new text begin Subd. 3. new text end new text begin Thermal Energy Network Site Suitability Study new text end

new text begin $500,000 the second year is for the thermal
energy network site suitability study under
article 3, section 36. This is a onetime
appropriation.
new text end

new text begin Subd. 4. new text end new text begin Grant Development Assistance new text end

new text begin $200,000 the second year is transferred to the
state competitiveness fund account under
Minnesota Statutes, section 216C.391, for
grant development assistance under Minnesota
Statutes, section 216C.391, subdivision 4. This
is a onetime transfer.
new text end

Sec. 3. new text begin PUBLIC UTILITIES COMMISSION 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 39,000 new text end

new text begin $39,000 the second year is for the thermal
energy network deployment work group under
article 3, section 35. The base budget for this
appropriation is $39,000 in fiscal year 2026
and $0 in fiscal year 2027.
new text end

ARTICLE 2

RENEWABLE DEVELOPMENT ACCOUNT APPROPRIATIONS

Section 1. new text begin APPROPRIATIONS. new text end

new text begin The sums shown in the columns marked "Appropriations" are appropriated to the agencies
and for the purposes specified in this article. Notwithstanding Minnesota Statutes, section
116C.779, subdivision 1, paragraph (j), the appropriations are from the renewable
development account in the special revenue fund established in Minnesota Statutes, section
116C.779, subdivision 1, and are available for the fiscal years indicated for each purpose.
The figures "2024" and "2025" used in this article mean that the appropriations listed under
them are available for the fiscal year ending June 30, 2024, or June 30, 2025, respectively.
"The first year" is fiscal year 2024. "The second year" is fiscal year 2025. "The biennium"
is fiscal years 2024 and 2025.
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 2024 new text end		new text begin 2025 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 13,650,000 new text end

new text begin The amounts that may be spent for each
purpose are specified in the following
subdivisions.
new text end

new text begin Subd. 2. new text end new text begin Geothermal Energy System; Sabathani Community Center new text end

new text begin (a) $6,000,000 the second year is for a grant
to the Sabathani Community Center in
Minneapolis to construct a geothermal energy
system that provides space heating and cooling
to the center. This is a onetime appropriation
and is available until June 30, 2027.
new text end

new text begin (b) For the purposes of this subdivision,
"geothermal energy system" means a system
composed of: a heat pump that moves a
heat-transferring fluid through piping
embedded in the earth and absorbs the earth's
constant temperature; a heat exchanger; and
ductwork to distribute heated and cooled air
to a building.
new text end

new text begin Subd. 3. new text end new text begin Energy Efficiency Projects; Dakota County new text end

new text begin (a) $500,000 the second year is for a grant to
Dakota County for energy efficiency projects
that are located in the service area of the public
utility subject to Minnesota Statutes, section
116C.779. This appropriation is available until
June 30, 2027. The base budget for this
appropriation is $500,000 in fiscal year 2026
and $0 in fiscal year 2027.
new text end

new text begin (b) For purposes of this subdivision, "energy
efficiency project" includes but is not limited
to: (1) LED lighting, as defined under
Minnesota Statutes, section 216B.241,
subdivision 5; (2) solar arrays; or (3) heating,
ventilating, or air conditioning system
improvements.
new text end

new text begin Subd. 4. new text end new text begin Anaerobic Digester Energy System new text end

new text begin (a) $5,000,000 the second year is for a grant
to Recycling and Energy, in partnership with
Dem-Con HZI Bioenergy, LLC, to construct
an anaerobic energy system in Louisville
Township. This appropriation is available until
June 30, 2027. The base budget for this
appropriation is $5,000,000 in fiscal year 2026
and $0 in fiscal year 2027.
new text end

new text begin (b) For the purposes of this subdivision,
"anaerobic energy system" means a facility
that uses diverted food and organic waste to
create renewable natural gas and biochar.
new text end

new text begin Subd. 5. new text end new text begin Wildlife Rehabilitation Center of Minnesota new text end

new text begin $400,000 the second year is for a grant to the
Wildlife Rehabilitation Center of Minnesota
to install solar panels. This is a onetime
appropriation and is available until June 30,
2027.
new text end

new text begin Subd. 6. new text end new text begin Ultraefficient Vehicle Development Grants new text end

new text begin $250,000 the second year is transferred to the
ultraefficient vehicle development grant
account under section 4, subdivision 4, to
provide grants for developers and producers
of ultraefficient vehicles. This is a onetime
transfer.
new text end

new text begin Subd. 7. new text end new text begin Geothermal Heat Exchange System Rebate Program new text end

new text begin $1,500,000 the second year is transferred to
the geothermal heat exchange system rebate
account established under Minnesota Statutes,
section 216C.47, to provide rebates for
geothermal heat exchange systems for eligible
applicants. This is a onetime transfer.
new text end

new text begin Subd. 8. new text end new text begin Administrative Costs new text end

new text begin (a) Notwithstanding Minnesota Statutes,
section 16B.98, subdivision 14, the
commissioner may use up to two percent of
the appropriations in subdivisions 2 to 5 for
administrative costs.
new text end

new text begin (b) Notwithstanding Minnesota Statutes,
section 16B.98, subdivision 14, the
commissioner may use up to five percent of
the appropriations in subdivisions 6 and 7 for
administrative costs.
new text end

Sec. 3.

new text begin [216C.47] GEOTHERMAL HEAT EXCHANGE SYSTEM REBATE
PROGRAM.
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) "Eligible applicant" means a person, business, nonprofit, government entity, federally
recognized Tribe in Minnesota, or religious institution who provides evidence to the
commissioner's satisfaction demonstrating that the person has received or has applied for
a geothermal heat exchange system rebate available from the federal Department of Treasury
under the Inflation Reduction Act of 2022, Public Law 117-189, for a commercial or
multifamily building located in Minnesota.
new text end

new text begin (c) "Geothermal heat exchange system" means a heating or cooling exchange mechanism
composed of a mechanism to collect or reject heat from or to the underground.
new text end

new text begin (d) "Commissioner" means the commissioner of the Department of Commerce.
new text end

new text begin Subd. 2. new text end

new text begin Establishment. new text end

new text begin A geothermal heat exchange system rebate program is
established in the department to provide financial assistance to eligible applicants that install
geothermal heat exchange technology in the applicant's building.
new text end

new text begin Subd. 3. new text end

new text begin Application. new text end

new text begin (a) An application for a rebate under this section must be made
to the commissioner on a form developed by the commissioner. The application must be
accompanied by documentation, as required by the commissioner, demonstrating:
new text end

new text begin (1) that the applicant is an eligible applicant;
new text end

new text begin (2) that the applicant owns the Minnesota building in which the geothermal exchange
system is to be installed;
new text end

new text begin (3) that an energy audit of the building in which the geothermal exchange system is to
be installed has been conducted within the 18 months preceding the application date by a
person with a building analyst technician certification issued by the Building Performance
Institute, Inc., or an equivalent certification as determined by the commissioner;
new text end

new text begin (4) that the applicant has installed a geothermal heat exchange system of the capacity
recommended by the auditor or contractor, and has had the heat pump installed by a
contractor with sufficient training and experience in installing heat pumps, as determined
by the commissioner; and
new text end

new text begin (5) the total cost to install the geothermal heat exchange system in the applicant's building
and the associated geothermal loop installed and located outside of the building.
new text end

new text begin (b) The commissioner must develop administrative procedures governing the application
and rebate award processes.
new text end

new text begin (c) The commissioner may modify program requirements under this section when
necessary to align with comparable federal programs administered by the department under
the federal Inflation Reduction Act of 2022, Public Law 117-189.
new text end

new text begin Subd. 4. new text end

new text begin Rebate amount. new text end

new text begin A rebate awarded under this section must not exceed the lower
of:
new text end

new text begin (1) ten percent of geothermal heat exchange system costs, not to exceed $100,000 for a
single project; or
new text end

new text begin (2) the total cost to purchase and install the heat exchange system in an eligible applicant's
building net of any financial support received for the system from other federal, state, or
utility programs.
new text end

new text begin Subd. 5. new text end

new text begin Prioritization. new text end

new text begin In evaluating applications under this program, the commissioner
must give priority to applications that:
new text end

new text begin (1) are located in environmental justice communities, as defined by section 115A.03,
subdivision 10b;
new text end

new text begin (2) have submitted a workforce plan demonstrating the intention to use registered
apprenticeships; or
new text end

new text begin (3) are multifamily housing or commercial buildings that:
new text end

new text begin (i) are owned by a non-profit or government entity; and
new text end

new text begin (ii) meet the definition of low-income rental property under section 273.128.
new text end

new text begin Subd. 6. new text end

new text begin Account established. new text end

new text begin (a) The geothermal heat exchange system rebate account
is established as a separate account in the special revenue fund in the state treasury. The
commissioner must credit appropriations and transfers to the account. Earnings, including
interest, dividends, and any other earnings arising from assets of the account, must be
credited to the account. Money remaining in the account at the end of a fiscal year does not
cancel to the general fund, but remains in the account until expended. The commissioner
must manage the account.
new text end

new text begin (b) Money in the account is appropriated to the commissioner for the purposes of this
section and to reimburse the reasonable costs incurred by the department to administer this
section. Any money remaining in the account on January 1, 2033, cancels to the renewable
development account.
new text end

Sec. 4. new text begin ULTRAEFFICIENT VEHICLE DEVELOPMENT GRANTS.
new text end

new text begin Subdivision 1. new text end

new text begin Program establishment. new text end

new text begin (a) A grant program is established in the
Department of Commerce to provide financial assistance to developers and producers of
ultraefficient vehicles that use proprietary technology.
new text end

new text begin (b) For purposes of this section, "ultraefficient vehicle" means a fully closed compartment
vehicle designed to carry at least one adult passenger that achieves:
new text end

new text begin (1) at least 75 miles per gallon while operating on gasoline;
new text end

new text begin (2) at least 75 miles per gallon equivalent while operating as a hybrid electric-gasoline;
or
new text end

new text begin (3) at least 75 miles per gallon equivalent while operating as a fully electric vehicle.
new text end

new text begin Subd. 2. new text end

new text begin Application process. new text end

new text begin Applicants seeking a grant under this section must submit
an application to the commissioner of commerce on a form developed by the commissioner.
The commissioner is responsible for receiving and reviewing grant applications and awarding
grants under this subdivision. The commissioner must develop administrative procedures
to govern the application, evaluation, and grant-award process.
new text end

new text begin Subd. 3. new text end

new text begin Grant awards. new text end

new text begin The maximum grant award for each eligible applicant awarded
a grant under this section is $250,000. In awarding grants under this section, the department
must:
new text end

new text begin (1) give priority to ultraefficient vehicle projects that are deemed to be near production
ready; and
new text end

new text begin (2) give priority to ultraefficient vehicle projects that maximize the use of electricity to
charge and run the vehicle.
new text end

new text begin Subd. 4. new text end

new text begin Account established. new text end

new text begin An ultraefficient vehicle development grant account is
established in the special revenue fund in the state treasury. The commissioner of commerce
must credit to the account appropriations made for ultraefficient vehicle development grants.
Earnings, including interest, arising from assets in the account, must be credited to the
account. Money in the account is available until June 30, 2028. Any amount in the account
after June 30, 2028, cancels to the renewable development account. The commissioner of
commerce must manage the account.
new text end

new text begin Subd. 5. new text end

new text begin Appropriation; expenditures. new text end

new text begin Money in the account established in subdivision
4 is appropriated to the commissioner of commerce and must be used only:
new text end

new text begin (1) to make grant awards under this section; and
new text end

new text begin (2) to pay the reasonable costs incurred by the department to administer this section.
new text end

new text begin Subd. 6. new text end

new text begin Report. new text end

new text begin On January 15, 2026, and on January 15, 2029, the commissioner of
commerce must submit a report to the chairs and ranking minority members of the legislative
committees with jurisdiction over energy policy and finance on the grant awards under this
section.
new text end

ARTICLE 3

ENERGY, UTILITIES, ENVIRONMENT, AND CLIMATE POLICY

Section 1.

Minnesota Statutes 2023 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 (f) and (g), 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, 2018, and continuing
each January 15 thereafter, the public utility that owns the Prairie Island nuclear generating
plant must transfer to the renewable development account $500,000 each year for each dry
cask containing spent fuel that is located at the Prairie Island power plant for each year the
plant is in operation, and $7,500,000 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 Prairie Island for any
part of a year. The total amount transferred annually under this paragraph must be reduced
by $3,750,000.

(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.

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

(f) 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 (e).

(g) 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 (e).

(h) The collective amount paid under the grant contracts awarded under paragraphs (f)
and (g) 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.

(i) 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.

(j) 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.

(k) For the purposes of paragraph (j), 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.

(l) 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. 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 (j), clause (1),
may be limited to or include a request to higher education institutions located in Minnesota
for multiple projects authorized under paragraph (j), 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:

(1) potential benefit to Minnesota citizens and businesses and the utility's ratepayers;
and

(2) the proposer's commitment to increasing the diversity of the proposer's workforce
and vendors.

(m) 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 legislature. 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 (n).

(n) 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.

(o) 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.

(p) 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) 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 end

deleted text begin (r) deleted text end new text begin (q) 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. A project
receiving funds from the account must submit a report that meets the requirements of section
216C.51, subdivisions 3 and 4, each year the project funded by the account is in progress.

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

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

deleted text begin (v) deleted text end new text begin (u) new text end Construction projects receiving funds from this account are subject to the
requirement to pay the prevailing wage rate, as defined in section 177.42 and the requirements
and enforcement provisions in sections 177.27, 177.30, 177.32, 177.41 to 177.435, and
177.45.

Sec. 2.

Minnesota Statutes 2022, section 216B.098, is amended by adding a subdivision
to read:

new text begin Subd. 7. new text end

new text begin Social Security number and individual taxpayer identification number. new text end

new text begin If
a utility requires a new customer to provide a Social Security number on an application for
utility service, the utility must accept an individual taxpayer identification number in lieu
of a Social Security number. The utility application must indicate that the utility accepts an
individual taxpayer identification number.
new text end

Sec. 3.

Minnesota Statutes 2022, section 216B.16, subdivision 6c, is amended to read:

Subd. 6c.

Incentive plan for energy conservation new text begin and efficient fuel-switching
new text end improvement.

(a) The commission may order public utilities to develop and submit for
commission approval incentive plans that describe the method of recovery and accounting
for utility conservation new text begin and efficient fuel-switching new text end expenditures and savings. new text begin For public
utilities that provide electric service, the commission must develop and implement incentive
plans designed to promote energy conservation separately from the plans designed to promote
efficient fuel-switching. new text end In developing the incentive plans the commission shall ensure the
effective involvement of interested parties.

(b) In approving incentive plans, the commission shall consider:

(1) whether the plan is likely to increase utility investment in cost-effective energy
conservation new text begin or efficient fuel switching new text end ;

(2) whether the plan is compatible with the interest of utility ratepayers and other
interested parties;

(3) whether the plan links the incentive to the utility's performance in achieving
cost-effective conservation new text begin or efficient fuel switching new text end ; deleted text begin and
deleted text end

(4) whether the plan is in conflict with other provisions of this chapter deleted text begin . deleted text end new text begin ;
new text end

new text begin (5) whether the plan conflicts with other provisions of this chapter; and
new text end

new text begin (6) the likely financial impacts of the conservation and efficient fuel-switching programs
on the utility.
new text end

(c) The commission may set rates to encourage the vigorous and effective implementation
of utility conservation new text begin and efficient fuel-switching new text end programs. The commission may:

(1) increase or decrease any otherwise allowed rate of return on net investment based
upon the utility's skill, efforts, and success in deleted text begin conserving deleted text end new text begin improving the efficient use of new text end
energy new text begin through energy conservation or efficient fuel switching new text end ;

(2) share between ratepayers and utilities the net savings resulting from energy
conservation new text begin and efficient fuel-switching new text end programs to the extent justified by the utility's
skill, efforts, and success in deleted text begin conserving deleted text end new text begin improving the efficient use of new text end energy; and

(3) adopt any mechanism that satisfies the criteria of this subdivision, such that
implementation of cost-effective conservation new text begin or efficient fuel switching new text end is a preferred
resource choice for the public utility considering the impact of conservation new text begin or efficient fuel
switching new text end on earnings of the public utility.

new text begin (d) Any incentives offered to electric utilities under this subdivision for efficient-fuel
switching projects expire December 31, 2032.
new text end

Sec. 4.

Minnesota Statutes 2022, section 216B.16, subdivision 8, is amended to read:

Subd. 8.

Advertising expense.

(a) The commission shall disapprove the portion of any
rate which makes an allowance directly or indirectly for expenses incurred by a public utility
to provide a public advertisement which:

(1) is designed to influence or has the effect of influencing public attitudes toward
legislation or proposed legislation, or toward a rule, proposed rule, authorization or proposed
authorization of the Public Utilities Commission or other agency of government responsible
for regulating a public utility;

(2) is designed to justify or otherwise support or defend a rate, proposed rate, practice
or proposed practice of a public utility;

(3) is designed primarily to promote consumption of the services of the utility;

(4) is designed primarily to promote good will for the public utility or improve the
utility's public image; or

(5) is designed to promote the use of nuclear power or to promote a nuclear waste storage
facility.

(b) The commission may approve a rate which makes an allowance for expenses incurred
by a public utility to disseminate information which:

(1) is designed to encourage deleted text begin conservation deleted text end new text begin efficient use new text end of energy supplies;

(2) is designed to promote safety; or

(3) is designed to inform and educate customers as to financial services made available
to them by the public utility.

(c) The commission shall not withhold approval of a rate because it makes an allowance
for expenses incurred by the utility to disseminate information about corporate affairs to its
owners.

Sec. 5.

Minnesota Statutes 2022, section 216B.2402, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Data mining facility. new text end

new text begin "Data mining facility" means all buildings, structures,
equipment, and installations at a single site where electricity is used primarily by computers
to process transactions involving digital currency not issued by a central authority.
new text end

Sec. 6.

Minnesota Statutes 2022, section 216B.2402, subdivision 10, is amended to read:

Subd. 10.

Gross annual retail energy sales.

"Gross annual retail energy sales" means
a utility's annual electric sales to all Minnesota retail customers, or natural gas throughput
to all retail customers, including natural gas transportation customers, on a utility's
distribution system in Minnesota. Gross annual retail energy sales does not include:

(1) gas sales to:

(i) a large energy facility;

(ii) a large customer facility whose natural gas utility has been exempted by the
commissioner under section 216B.241, subdivision 1a, paragraph (a), with respect to natural
gas sales made to the large customer facility; and

(iii) a commercial gas customer facility whose natural gas utility has been exempted by
the commissioner under section 216B.241, subdivision 1a, paragraph (b), with respect to
natural gas sales made to the commercial gas customer facility;

(2) electric sales to new text begin :
new text end

new text begin (i) new text end a large customer facility whose electric utility has been exempted by the commissioner
under section 216B.241, subdivision 1a, paragraph (a), with respect to electric sales made
to the large customer facility; deleted text begin or deleted text end new text begin and
new text end

new text begin (ii) a data mining facility, if the facility:
new text end

new text begin (A) has provided a signed letter to the utility verifying the facility meets the definition
of a data mining facility; and
new text end

new text begin (B) imposes a peak electrical demand on a consumer-owned utility's system equal to or
greater than 40 percent of the peak electrical demand of the system, measured in the same
manner as the utility that serves the customer facility measures electric demand for billing
purposes; or
new text end

(3) the amount of electric sales prior to December 31, 2032, that are associated with a
utility's program, rate, or tariff for electric vehicle charging based on a methodology and
assumptions developed by the department in consultation with interested stakeholders no
later than December 31, 2021. After December 31, 2032, incremental sales to electric
vehicles must be included in calculating a new text begin public new text end utility's gross annual retail sales.

Sec. 7.

Minnesota Statutes 2022, section 216B.2403, subdivision 2, is amended to read:

Subd. 2.

Consumer-owned utility; energy-savings goal.

(a) Each individual
consumer-owned new text begin electric new text end utility subject to this section has an annual energy-savings goal
equivalent to 1.5 percent of gross annual retail energy sales new text begin and each individual
consumer-owned natural gas utility subject to this section has an annual energy-savings
goal equivalent to one percent of gross annual retail energy sales new text end , to be met with a minimum
of energy savings from energy conservation improvements equivalent to at least deleted text begin 0.95 deleted text end new text begin 0.90 new text end
percent of the consumer-owned utility's gross annual retail energy sales. The balance of
energy savings toward the annual energy-savings goal may be achieved only by the following
consumer-owned utility activities:

(1) energy savings from additional energy conservation improvements;

(2) electric utility infrastructure projects, as defined in section 216B.1636, subdivision
1, that result in increased efficiency greater than would have occurred through normal
maintenance activity;

(3) net energy savings from efficient fuel-switching improvements that meet the criteria
under subdivision 8, which may contribute up to deleted text begin 0.55 deleted text end new text begin 0.60 new text end percent of the goal; or

(4) subject to department approval, demand-side natural gas or electric energy displaced
by use of waste heat recovered and used as thermal energy, including the recovered thermal
energy from a cogeneration or combined heat and power facility.

(b) The energy-savings goals specified in this section must be calculated based on
weather-normalized sales averaged over the most recent three years. A consumer-owned
utility may elect to carry forward energy savings in excess of 1.5 percent for a year to the
next three years, except that energy savings from electric utility infrastructure projects may
be carried forward for five years. A particular energy savings can only be used to meet one
year's goal.

(c) A consumer-owned utility subject to this section is not required to make energy
conservation improvements that are not cost-effective, even if the improvement is necessary
to attain the energy-savings goal. A consumer-owned utility subject to this section must
make reasonable efforts to implement energy conservation improvements that exceed the
minimum level established under this subdivision if cost-effective opportunities and funding
are available, considering other potential investments the consumer-owned utility intends
to make to benefit customers during the term of the plan filed under subdivision 3.

(d) Notwithstanding any provision to the contrary, until July 1, 2026, spending by a
consumer-owned utility subject to this section on efficient fuel-switching improvements
implemented to meet the annual energy savings goal under this section must not exceed
deleted text begin 0.55 deleted text end new text begin 0.6 new text end percent per year, averaged over a three-year period, of the consumer-owned utility's
gross annual retail energy sales.

Sec. 8.

Minnesota Statutes 2022, section 216B.2403, subdivision 3, is amended to read:

Subd. 3.

Consumer-owned utility; energy conservation and optimization plans.

(a)
By June 1, 2022, and at least every three years thereafter, each consumer-owned utility must
file with the commissioner an energy conservation and optimization plan that describes the
programs for energy conservation, efficient fuel-switching, load management, and other
measures the consumer-owned utility intends to offer to achieve the utility's energy savings
goal.

(b) A plan's term may extend up to three years. A multiyear plan must identify the total
energy savings and energy savings resulting from energy conservation improvements that
are projected to be achieved in each year of the plan. A multiyear plan that does not, in each
year of the plan, meet both the minimum energy savings goal from energy conservation
improvements and the total energy savings goal of 1.5 percent, or lower goals adjusted by
the commissioner under paragraph (k), must:

(1) state why each goal is projected to be unmet; and

(2) demonstrate how the consumer-owned utility proposes to meet both goals on an
average basis over the duration of the plan.

(c) A plan filed under this subdivision must provide:

(1) for existing programs, an analysis of the cost-effectiveness of the consumer-owned
utility's programs offered under the plan, using a list of baseline energy- and capacity-savings
assumptions developed in consultation with the department; and

(2) for new programs, a preliminary analysis upon which the program will proceed, in
parallel with further development of assumptions and standards.

(d) The commissioner must evaluate a plan filed under this subdivision based on the
plan's likelihood to achieve the energy-savings goals established in subdivision 2. The
commissioner may make recommendations to a consumer-owned utility regarding ways to
increase the effectiveness of the consumer-owned utility's energy conservation activities
and programs under this subdivision. The commissioner may recommend that a
consumer-owned utility implement a cost-effective energy conservation new text begin or efficient
fuel-switching new text end program deleted text begin , including an energy conservation program deleted text end suggested by an outside
source such as a political subdivision, nonprofit corporation, or community organization.

(e) Beginning June 1, 2023, and every June 1 thereafter, each consumer-owned utility
must file: (1) an annual update identifying the status of the plan filed under this subdivision,
including: (i) total expenditures and investments made to date under the plan; and (ii) any
intended changes to the plan; and (2) a summary of the annual energy-savings achievements
under a plan. An annual filing made in the last year of a plan must contain a new plan that
complies with this section.

(f) When evaluating the cost-effectiveness of a consumer-owned utility's energy
conservation programs, the consumer-owned utility and the commissioner must consider
the costs and benefits to ratepayers, the utility, participants, and society. The commissioner
must also consider the rate at which the consumer-owned utility is increasing energy savings
and expenditures on energy conservation, and lifetime energy savings and cumulative energy
savings.

(g) A consumer-owned utility may annually spend and invest up to ten percent of the
total amount spent and invested on energy conservation new text begin , efficient fuel-switching, or load
management new text end improvements on research and development projects that meet the new text begin applicable
new text end definition of energy conservation new text begin , efficient fuel-switching, or load management new text end improvement.

(h) A generation and transmission cooperative electric association or municipal power
agency that provides energy services to consumer-owned utilities may file a plan under this
subdivision on behalf of the consumer-owned utilities to which the association or agency
provides energy services and may make investments, offer conservation programs, and
otherwise fulfill the energy-savings goals and reporting requirements of this subdivision
for those consumer-owned utilities on an aggregate basis.

(i) A consumer-owned utility is prohibited from spending for or investing in energy
conservation improvements that directly benefit a large energy facility or a large electric
customer facility the commissioner has exempted under section 216B.241, subdivision 1a.

(j) The energy conservation and optimization plan of a consumer-owned utility may
include activities to improve energy efficiency in the public schools served by the utility.
These activities may include programs to:

(1) increase the efficiency of the school's lighting and heating and cooling systems;

(2) recommission buildings;

(3) train building operators; and

(4) provide opportunities to educate students, teachers, and staff regarding energy
efficiency measures implemented at the school.

(k) A consumer-owned utility may request that the commissioner adjust the
consumer-owned utility's minimum goal for energy savings from energy conservation
improvements under subdivision 2, paragraph (a), for the duration of the plan filed under
this subdivision. The request must be made by January 1 of the year when the
consumer-owned utility must file a plan under this subdivision. The request must be based
on:

(1) historical energy conservation improvement program achievements;

(2) customer class makeup;

(3) projected load growth;

(4) an energy conservation potential study that estimates the amount of cost-effective
energy conservation potential that exists in the consumer-owned utility's service territory;

(5) the cost-effectiveness and quality of the energy conservation programs offered by
the consumer-owned utility; and

(6) other factors the commissioner and consumer-owned utility determine warrant an
adjustment.

The commissioner must adjust the energy savings goal to a level the commissioner determines
is supported by the record, but must not approve a minimum energy savings goal from
energy conservation improvements that is less than an average of 0.95 percent per year over
the consecutive years of the plan's duration, including the year the minimum energy savings
goal is adjusted.

(l) A consumer-owned utility filing a conservation and optimization plan that includes
an efficient fuel-switching program deleted text begin to achieve the utility's energy savings goal deleted text end must, as part
of the filing, demonstrate deleted text begin by a comparison of greenhouse gas emissions between the fuels deleted text end
that the requirements of subdivision 8 are met, using a full fuel-cycle energy analysis.

Sec. 9.

Minnesota Statutes 2022, section 216B.2403, subdivision 5, is amended to read:

Subd. 5.

Energy conservation programs for low-income households.

(a) A
consumer-owned utility subject to this section must provide energy conservation programs
to low-income households. The commissioner must evaluate a consumer-owned utility's
plans under this section by considering the consumer-owned utility's historic spending on
energy conservation programs directed to low-income households, the rate of customer
participation in and the energy savings resulting from those programs, and the number of
low-income persons residing in the consumer-owned utility's service territory. A municipal
utility that furnishes natural gas service must spend at least 0.2 percent of the municipal
utility's most recent three-year average gross operating revenue from residential customers
in Minnesota on energy conservation programs for low-income households. A
consumer-owned utility that furnishes electric service must spend at least 0.2 percent of the
consumer-owned utility's gross operating revenue from residential customers in Minnesota
on energy conservation programs for low-income households. The requirement under this
paragraph applies to each generation and transmission cooperative association's aggregate
gross operating revenue from the sale of electricity to residential customers in Minnesota
by all of the association's member distribution cooperatives.

(b) To meet all or part of the spending requirements of paragraph (a), a consumer-owned
utility may contribute money to the energy and conservation account established in section
216B.241, subdivision 2a. An energy conservation optimization plan must state the amount
of contributions the consumer-owned utility plans to make to the energy and conservation
account. Contributions to the account must be used for energy conservation programs serving
low-income households, including renters, located in the service area of the consumer-owned
utility making the contribution. Contributions must be remitted to the commissioner by
February 1 each year.

(c) The commissioner must establish energy conservation programs for low-income
households funded through contributions to the energy and conservation account under
paragraph (b). When establishing energy conservation programs for low-income households,
the commissioner must consult political subdivisions, utilities, and nonprofit and community
organizations, including organizations providing energy and weatherization assistance to
low-income households. The commissioner must record and report expenditures and energy
savings achieved as a result of energy conservation programs for low-income households
funded through the energy and conservation account in the report required under section
216B.241, subdivision 1c, paragraph (f). The commissioner may contract with a political
subdivision, nonprofit or community organization, public utility, municipality, or
consumer-owned utility to implement low-income programs funded through the energy and
conservation account.

(d) A consumer-owned utility may petition the commissioner to modify the required
spending under this subdivision if the consumer-owned utility and the commissioner were
unable to expend the amount required for three consecutive years.

(e) The commissioner must develop and establish guidelines for determining the eligibility
of multifamily buildings to participate in energy conservation programs provided to
low-income households. Notwithstanding the definition of low-income household in section
216B.2402, a consumer-owned utility or association may apply the most recent guidelines
published by the department for purposes of determining the eligibility of multifamily
buildings to participate in low-income programs. The commissioner must convene a
stakeholder group to review and update these guidelines by August 1, 2021, and at least
once every five years thereafter. The stakeholder group must include but is not limited to
representatives of public utilities; municipal electric or gas utilities; electric cooperative
associations; multifamily housing owners and developers; and low-income advocates.

(f) Up to 15 percent of a consumer-owned utility's spending on low-income energy
conservation programs may be spent on preweatherization measures. A consumer-owned
utility is prohibited from claiming energy savings from preweatherization measures toward
the consumer-owned utility's energy savings goal.

(g) The commissioner must, by order, establish a list of preweatherization measures
eligible for inclusion in low-income energy conservation programs no later than March 15,
2022.

(h) A Healthy AIR (Asbestos Insulation Removal) account is established as a separate
account in the special revenue fund in the state treasury. A consumer-owned utility may
elect to contribute money to the Healthy AIR account to provide preweatherization measures
for households eligible for weatherization assistance from the state weatherization assistance
program in section 216C.264. Remediation activities must be executed in conjunction with
federal weatherization assistance program services. Money contributed to the account by a
consumer-owned utility counts toward: (1) the minimum low-income spending requirement
under paragraph (a); and (2) the cap on preweatherization measures under paragraph (f).
Money in the account is annually appropriated to the commissioner of commerce to pay for
Healthy AIR-related activities.

new text begin (i) This paragraph applies to a consumer-owned utility that supplies electricity to a
low-income household whose primary heating fuel is supplied by an entity other than a
public utility. Any spending on space and water heating energy conservation improvements
and efficient fuel-switching by the consumer-owned utility on behalf of the low-income
household may be applied to the consumer owned utility's spending requirement under
paragraph (a). To the maximum extent possible, a consumer-owned utility providing services
under this paragraph must offer the services in conjunction with weatherization services
provided under section 216C.264.
new text end

Sec. 10.

Minnesota Statutes 2022, section 216B.2403, subdivision 8, is amended to read:

Subd. 8.

Criteria for efficient fuel-switching improvements.

(a) A fuel-switching
improvement is deemed efficient if, applying the technical criteria established under section
216B.241, subdivision 1d, paragraph (e), the improvement, relative to the fuel being
displaced:

(1) results in a net reduction in the amount of source energy consumed for a particular
use, measured on a fuel-neutral basis new text begin , using (i) the consumer-owned utility's or the utility's
electricity supplier's annual system average efficiency, or (ii) if the utility elects, a seasonal,
monthly, or more granular level of analysis for the electric utility system over the measure's
life new text end ;

(2) results in a net reduction of statewide greenhouse gas emissions, as defined in section
216H.01, subdivision 2, over the lifetime of the improvement. For an efficient fuel-switching
improvement installed by an electric consumer-owned utility, the reduction in emissions
must be measured deleted text begin based on the hourly emissions profile of the consumer-owned utility or
the utility's electricity supplier, as reported in the most recent resource plan approved by
the commission under section 216B.2422. If the hourly emissions profile is not available,
the commissioner must develop a method consumer-owned utilities must use to estimate
that value deleted text end new text begin using (i) the consumer-owned utility's or the utility's electricity supplier's annual
average emissions factor, or (ii) if the utility elects, the seasonal, monthly, or more granular
level of analysis for the electric utility system over the measure's life new text end ; new text begin and
new text end

(3) is cost-effective, considering the costs and benefits from the perspective of the
consumer-owned utility, participants, and society deleted text begin ; and deleted text end new text begin .
new text end

deleted text begin (4) is installed and operated in a manner that improves the consumer-owned utility's
system load factor.
deleted text end

(b) For purposes of this subdivision, "source energy" means the total amount of primary
energy required to deliver energy services, adjusted for losses in generation, transmission,
and distribution, and expressed on a fuel-neutral basis.

Sec. 11.

Minnesota Statutes 2022, section 216B.241, subdivision 2, is amended to read:

Subd. 2.

Public utility; energy conservation and optimization plans.

(a) The
commissioner may require a public utility to make investments and expenditures in energy
conservation improvements, explicitly setting forth the interest rates, prices, and terms under
which the improvements must be offered to the customers.

(b) A public utility shall file an energy conservation and optimization plan by June 1,
on a schedule determined by order of the commissioner, but at least every three years. As
provided in subdivisions 11 to 13, plans may include programs for efficient fuel-switching
improvements and load management. An individual utility program may combine elements
of energy conservation, load management, or efficient fuel-switching. The plan must estimate
the lifetime energy savings and cumulative lifetime energy savings projected to be achieved
under the plan. A plan filed by a public utility by June 1 must be approved or approved as
modified by the commissioner by December 1 of that same year.

(c) The commissioner shall evaluate the plan on the basis of cost-effectiveness and the
reliability of technologies employed. The commissioner's order must provide to the extent
practicable for a free choice, by consumers participating in an energy conservation program,
of the device, method, material, or project constituting the energy conservation improvement
and for a free choice of the seller, installer, or contractor of the energy conservation
improvement, provided that the device, method, material, or project seller, installer, or
contractor is duly licensed, certified, approved, or qualified, including under the residential
conservation services program, where applicable.

(d) The commissioner may require a utility subject to subdivision 1c to make an energy
conservation improvement investment or expenditure whenever the commissioner finds
that the improvement will result in energy savings at a total cost to the utility less than the
cost to the utility to produce or purchase an equivalent amount of new supply of energy.

(e) Each public utility subject to this subdivision may spend and invest annually up to
ten percent of the total amount deleted text begin spent and invested deleted text end new text begin that the public utility spends and invests new text end
on energy conservation new text begin , efficient fuel-switching, or load management new text end improvements under
this section deleted text begin by the public utility deleted text end on research and development projects that meet the new text begin applicable
new text end definition of energy conservation new text begin , efficient fuel-switching, or load management new text end improvement.

(f) The commissioner shall consider and may require a public utility to undertake an
energy conservation deleted text begin program deleted text end new text begin or efficient fuel-switching program, subject to the requirements
of subdivisions 11 and 12, that is new text end suggested by an outside source, including a political
subdivision, a nonprofit corporation, or community organization. new text begin In approving a proposal
under this paragraph, the commissioner must consider the qualifications and experience of
the entity proposing the program and any other criteria the commissioner deems relevant.
new text end

(g) A public utility, a political subdivision, or a nonprofit or community organization
that has suggested an energy conservation program, the attorney general acting on behalf
of consumers and small business interests, or a public utility customer that has suggested
an energy conservation program and is not represented by the attorney general under section
8.33 may petition the commission to modify or revoke a department decision under this
section, and the commission may do so if it determines that the energy conservation program
is not cost-effective, does not adequately address the residential conservation improvement
needs of low-income persons, has a long-range negative effect on one or more classes of
customers, or is otherwise not in the public interest. The commission shall reject a petition
that, on its face, fails to make a reasonable argument that an energy conservation program
is not in the public interest.

(h) The commissioner may order a public utility to include, with the filing of the public
utility's annual status report, the results of an independent audit of the public utility's
conservation improvement programs and expenditures performed by the department or an
auditor with experience in the provision of energy conservation and energy efficiency
services approved by the commissioner and chosen by the public utility. The audit must
specify the energy savings or increased efficiency in the use of energy within the service
territory of the public utility that is the result of the public utility's spending and investments.
The audit must evaluate the cost-effectiveness of the public utility's conservation programs.

(i) The energy conservation and optimization plan of each public utility subject to this
section must include activities to improve energy efficiency in public schools served by the
utility. As applicable to each public utility, at a minimum the activities must include programs
to increase the efficiency of the school's lighting and heating and cooling systems, and to
provide for building recommissioning, building operator training, and opportunities to
educate students, teachers, and staff regarding energy efficiency measures implemented at
the school.

(j) The commissioner may require investments or spending greater than the amounts
proposed in a plan filed under this subdivision or section 216C.17 for a public utility whose
most recent advanced forecast required under section 216B.2422 projects a peak demand
deficit of 100 megawatts or more within five years under midrange forecast assumptions.

(k) A public utility filing a conservation and optimization plan that includes an efficient
fuel-switching program deleted text begin to achieve the utility's energy savings goal deleted text end must, as part of the filing,
demonstrate deleted text begin by a comparison of greenhouse gas emissions between the fuels deleted text end that the
requirements of subdivisions 11 or 12 are met, as applicable, using a full fuel-cycle energy
analysis.

Sec. 12.

Minnesota Statutes 2022, section 216B.241, subdivision 11, is amended to read:

Subd. 11.

Programs for efficient fuel-switching improvements; electric utilities.

(a)
A public utility providing electric service at retail may include in the plan required under
subdivision 2 new text begin a proposed goal for efficient fuel-switching improvements that the utility
expects to achieve under the plan and the new text end programs to implement efficient fuel-switching
improvements or combinations of energy conservation improvements, fuel-switching
improvements, and load management. For each program, the public utility must provide a
proposed budget, an analysis of the program's cost-effectiveness, and estimated net energy
and demand savings.

(b) The department may approve proposed programs for efficient fuel-switching
improvements if the department determines the improvements meet the requirements of
paragraph (d). deleted text begin For fuel-switching improvements that require the deployment of electric
technologies, the department must also consider whether the fuel-switching improvement
can be operated in a manner that facilitates the integration of variable renewable energy
into the electric system. The net benefits from an efficient fuel-switching improvement that
is integrated with an energy efficiency program approved under this section may be counted
toward the net benefits of the energy efficiency program, if the department determines the
primary purpose and effect of the program is energy efficiency.
deleted text end

(c) A public utility may file a rate schedule with the commission that provides for annual
cost recovery of reasonable and prudent costs to implement and promote efficient
fuel-switching programs. The new text begin utility, department, or other entity may propose, and the
new text end commission may deleted text begin not deleted text end approve new text begin , modify, or reject, new text end a new text begin proposal for a new text end financial incentive to
encourage efficient fuel-switching programs operated by a public utility providing electric
service new text begin approved under this subdivision. When making a decision on the financial incentive
proposal, the commission must apply the considerations established in section 216B.16,
subdivision 6c, paragraphs (b) and (c) new text end .

(d) A fuel-switching improvement is deemed efficient if, applying the technical criteria
established under section 216B.241, subdivision 1d, paragraph (e), the improvement meets
the following criteria, relative to the fuel that is being displaced:

(1) results in a net reduction in the amount of source energy consumed for a particular
use, measured on a fuel-neutral basis new text begin , using (i) the utility's annual system average efficiency,
or (ii) if the utility elects, a seasonal, monthly, or more granular level of analysis for the
electric utility system over the measure's life new text end ;

(2) results in a net reduction of statewide greenhouse gas emissions as defined in section
216H.01, subdivision 2, over the lifetime of the improvement. For an efficient fuel-switching
improvement installed by an electric utility, the reduction in emissions must be measured
deleted text begin based on the hourly emission profile of the electric utility, using the hourly emissions profile
in the most recent resource plan approved by the commission under section 216B.2422 deleted text end new text begin
using (i) the utility's annual average emissions factor, or (ii) if the utility elects, a seasonal,
monthly, or more granular level of analysis for the electric utility system over the measure's
life new text end ; new text begin and
new text end

(3) is cost-effective, considering the costs and benefits from the perspective of the utility,
participants, and society deleted text begin ; and deleted text end new text begin .
new text end

deleted text begin (4) is installed and operated in a manner that improves the utility's system load factor.
deleted text end

(e) For purposes of this subdivision, "source energy" means the total amount of primary
energy required to deliver energy services, adjusted for losses in generation, transmission,
and distribution, and expressed on a fuel-neutral basis.

Sec. 13.

Minnesota Statutes 2022, section 216B.241, subdivision 12, is amended to read:

Subd. 12.

Programs for efficient fuel-switching improvements; natural gas
utilities.

(a) As part of a public utility's plan filed under subdivision 2, a public utility that
provides natural gas service to Minnesota retail customers may propose one or more programs
to install electric technologies that reduce the consumption of natural gas by the utility's
retail customers as an energy conservation improvement. The commissioner may approve
a proposed program if the commissioner, applying the technical criteria developed under
section 216B.241, subdivision 1d, paragraph (e), determines that:

(1) the electric technology to be installed meets the criteria established under section
216B.241, subdivision 11, paragraph (d), clauses (1) and (2); and

(2) the program is cost-effective, considering the costs and benefits to ratepayers, the
utility, participants, and society.

(b) If a program is approved by the commission under this subdivision, the public utility
may count the program's energy savings toward its energy savings goal under section
216B.241, subdivision 1c. Notwithstanding section 216B.2402, subdivision 4, efficient
fuel-switching achieved through programs approved under this subdivision is energy
conservation.

(c) A public utility may file rate schedules with the commission that provide annual
cost-recovery for programs approved by the department under this subdivision, including
reasonable and prudent costs to implement and promote the programs.

(d) The commission may approve, modify, or reject a proposal made by the department
or a utility for an incentive plan to encourage efficient fuel-switching programs approved
under this subdivision, applying the considerations established under section 216B.16,
subdivision 6c, paragraphs (b) and (c). The commission may approve a financial incentive
mechanism that is calculated based on the combined energy savings and net benefits that
the commission has determined have been achieved by a program approved under this
subdivision, provided the commission determines that the financial incentive mechanism
is in the ratepayers' interest.

deleted text begin (e) A public utility is not eligible for a financial incentive for an efficient fuel-switching
program under this subdivision in any year in which the utility achieves energy savings
below one percent of gross annual retail energy sales, excluding savings achieved through
fuel-switching programs.
deleted text end

Sec. 14.

Minnesota Statutes 2023 Supplement, section 216C.08, is amended to read:

216C.08 JURISDICTION.

new text begin (a) new text end The commissioner has sole authority and responsibility deleted text begin for the administration of
sections 216C.05 to 216C.30 and 216C.375 deleted text end new text begin to administer this chapter new text end . Other laws
notwithstanding, the authority granted new text begin to new text end the commissioner deleted text begin shall supersede deleted text end new text begin under this section
supersedes new text end the authority given any other agency whenever overlapping, duplication, or
additional administrative or legal procedures might occur in deleted text begin the administration of sections
216C.05 to 216C.30 and 216C.375 deleted text end new text begin administering this chapter new text end . The commissioner shall
consult with other state departments or agencies in matters related to energy and shall
contract with deleted text begin them deleted text end new text begin the other state departments or agencies new text end to provide appropriate services
to effectuate the purposes of deleted text begin sections 216C.05 to 216C.30 and 216C.375 deleted text end new text begin this chapter new text end . Any
other department, agency, or official of this state or political subdivision thereof which
would in any way affect the administration or enforcement of deleted text begin sections 216C.05 to 216C.30
and 216C.375 deleted text end new text begin this chapter new text end shall cooperate and coordinate all activities with the commissioner
to assure orderly and efficient administration and enforcement of deleted text begin sections 216C.05 to
216C.30 and 216C.375 deleted text end new text begin this chapter new text end .

new text begin (b) new text end The commissioner shall designate a liaison officer whose duty shall be to insure the
maximum possible consistency in procedures and to eliminate duplication between the
commissioner and the other agencies that may be involved in energy.

Sec. 15.

Minnesota Statutes 2023 Supplement, section 216C.09, is amended to read:

216C.09 COMMISSIONER DUTIES.

(a) The commissioner shall:

(1) manage the department as the central repository within the state government for the
collection of data on energy;

(2) prepare and adopt an emergency allocation plan specifying actions to be taken in the
event of an impending serious shortage of energy, or a threat to public health, safety, or
welfare;

(3) undertake a continuing assessment of trends in the consumption of all forms of energy
and analyze the social, economic, and environmental consequences of these trends;

(4) carry out energy deleted text begin conservation deleted text end measures as specified by the legislature and recommend
to the governor and the legislature additional energy policies and conservation measures as
required to meet the objectives of deleted text begin sections 216C.05 to 216C.30 and 216C.375 deleted text end new text begin this chapter new text end ;

(5) collect and analyze data relating to present and future demands and resources for all
sources of energy;

(6) evaluate policies governing the establishment of rates and prices for energy as related
to energy conservation, and other goals and policies of deleted text begin sections 216C.05 to 216C.30 and
216C.375 deleted text end new text begin this chapter new text end , and make recommendations for changes in energy pricing policies
and rate schedules;

(7) study the impact and relationship of the state energy policies to international, national,
and regional energy policies;

(8) design and implement a state program for the conservation of energy; this program
shall include but not be limited to, general commercial, industrial, and residential, and
transportation areas; such program shall also provide for the evaluation of energy systems
as they relate to lighting, heating, refrigeration, air conditioning, building design and
operation, and appliance manufacturing and operation;

(9) inform and educate the public about the sources and uses of energy and the ways in
which persons can conserve energy;

(10) dispense funds made available for the purpose of research studies and projects of
professional and civic orientation, which are related to either energy conservation, resource
recovery, or the development of alternative energy technologies which conserve
nonrenewable energy resources while creating minimum environmental impact;

(11) charge other governmental departments and agencies involved in energy-related
activities with specific information gathering goals and require that those goals be met;

(12) design a comprehensive program for the development of indigenous energy
resources. The program shall include, but not be limited to, providing technical,
informational, educational, and financial services and materials to persons, businesses,
municipalities, and organizations involved in the development of solar, wind, hydropower,
peat, fiber fuels, biomass, and other alternative energy resources. The program shall be
evaluated by the alternative energy technical activity; and

(13) dispense loans, grants, or other financial aid from money received from litigation
or settlement of alleged violations of federal petroleum-pricing regulations made available
to the department for that purpose.

(b) Further, the commissioner may participate fully in hearings before the Public Utilities
Commission on matters pertaining to rate design, cost allocation, efficient resource utilization,
utility conservation investments, small power production, cogeneration, and other rate issues.
The commissioner shall support the policies stated in section 216C.05 and shall prepare
and defend testimony proposed to encourage energy conservation improvements as defined
in section 216B.241.

Sec. 16.

Minnesota Statutes 2022, section 216C.10, is amended to read:

216C.10 COMMISSIONER POWERS.

(a) The commissioner may:

(1) adopt rules under chapter 14 as necessary to carry out the purposes of deleted text begin sections
216C.05 to 216C.30 deleted text end new text begin this chapter new text end ;

(2) make all contracts under deleted text begin sections 216C.05 to 216C.30 deleted text end new text begin this chapter new text end and do all things
necessary to cooperate with the United States government, and to qualify for, accept, and
disburse any grant intended deleted text begin for the administration of sections 216C.05 to 216C.30 deleted text end new text begin to
administer this chapter new text end ;

(3) provide on-site technical assistance to units of local government in order to enhance
local capabilities for dealing with energy problems;

(4) administer for the state, energy programs under federal law, regulations, or guidelines,
and coordinate the programs and activities with other state agencies, units of local
government, and educational institutions;

(5) develop a state energy investment plan with yearly energy conservation and alternative
energy development goals, investment targets, and marketing strategies;

(6) perform market analysis studies relating to conservation, alternative and renewable
energy resources, and energy recovery;

(7) assist with the preparation of proposals for innovative conservation, renewable,
alternative, or energy recovery projects;

(8) manage and disburse funds made available for the purpose of research studies or
demonstration projects related to energy conservation or other activities deemed appropriate
by the commissioner;

(9) intervene in certificate of need proceedings before the Public Utilities Commission;

(10) collect fees from recipients of loans, grants, or other financial aid from money
received from litigation or settlement of alleged violations of federal petroleum-pricing
regulations, which fees must be used to pay the department's costs in administering those
financial aids; and

(11) collect fees from proposers and operators of conservation and other energy-related
programs that are reviewed, evaluated, or approved by the department, other than proposers
that are political subdivisions or community or nonprofit organizations, to cover the
department's cost in making the reviewal, evaluation, or approval and in developing additional
programs for others to operate.

(b) Notwithstanding any other law, the commissioner is designated the state agent to
apply for, receive, and accept federal or other funds made available to the state for the
purposes of deleted text begin sections 216C.05 to 216C.30 deleted text end new text begin this chapter new text end .

Sec. 17.

Minnesota Statutes 2022, section 216C.435, subdivision 3a, is amended to read:

Subd. 3a.

deleted text begin Cost-effective deleted text end Energy improvements.

" deleted text begin Cost-effective deleted text end Energy improvements"
means:

(1) any new construction, renovation, or retrofitting of qualifying commercial real
property to improve energy efficiency that new text begin : (i) new text end is permanently affixed to the property deleted text begin , deleted text end new text begin ; and
(ii) new text end results in a net reduction in energy consumption deleted text begin without altering the principal source
of energy, and has been identified deleted text end new text begin or greenhouse gas emissions, as documented new text end in an energy
audit deleted text begin as repaying the purchase and installation costs in 20 years or less, deleted text end based on the amount
of future energy saved deleted text begin and estimated future energy prices deleted text end new text begin or emissions avoided new text end ;

(2) any renovation or retrofitting of qualifying residential real property that is permanently
affixed to the property and is eligible to receive an incentive through a program offered by
the electric or natural gas utility that provides service under section 216B.241 to the property
or is otherwise determined to be deleted text begin a cost-effective deleted text end new text begin an eligible new text end energy improvement by the
commissioner under section 216B.241, subdivision 1d, paragraph (a);

(3) permanent installation of new or upgraded electrical circuits and related equipment
to enable electrical vehicle charging; or

(4) a solar voltaic or solar thermal energy system attached to, installed within, or
proximate to a building that generates electrical or thermal energy from a renewable energy
source that has been deleted text begin identified deleted text end new text begin documented new text end in an energy audit or renewable energy system
feasibility study deleted text begin as repaying their purchase and installation costs in 20 years or less, based
on the amount of future energy saved and estimated future energy prices deleted text end new text begin , along with the
estimated amount of related renewable energy production new text end .

Sec. 18.

Minnesota Statutes 2022, section 216C.435, subdivision 3b, is amended to read:

Subd. 3b.

Commercial PACE loan contractor.

"Commercial PACE loan contractor"
means a person or entity that installs deleted text begin cost-effective energy deleted text end new text begin eligible new text end improvements financed
under a commercial PACE loan program.

Sec. 19.

Minnesota Statutes 2022, section 216C.435, is amended by adding a subdivision
to read:

new text begin Subd. 3e. new text end

new text begin Eligible improvement. new text end

new text begin "Eligible improvement" means one or more energy
improvements, resiliency improvements, or water improvements made to qualifying real
property.
new text end

Sec. 20.

Minnesota Statutes 2022, section 216C.435, subdivision 4, is amended to read:

Subd. 4.

Energy audit.

"Energy audit" means a formal evaluation of the energy
consumption of a building by a certified energy auditor, whose certification is approved by
the commissioner, for the purpose of identifying appropriate energy improvements that
could be made to the building and including an estimate of the deleted text begin length of time a specific
energy improvement will take to repay its purchase and installation costs, based on the
amount of energy saved and estimated future energy prices deleted text end new text begin effective useful life, the reduction
of energy consumption, and the related avoided greenhouse gas emissions resulting from
the proposed eligible improvements new text end .

Sec. 21.

Minnesota Statutes 2023 Supplement, section 216C.435, subdivision 8, is amended
to read:

Subd. 8.

Qualifying commercial real property.

"Qualifying commercial real property"
means a multifamily residential dwelling, a commercial or industrial building, or farmland,
as defined in section 216C.436, subdivision 1b, that the implementing entity has determined,
after review of an energy audit, renewable energy system feasibility study, new text begin water
improvement study, resiliency improvement study, new text end or agronomic assessment, as defined in
section 216C.436, subdivision 1b, can benefit from deleted text begin the installation of cost-effective energy deleted text end new text begin
installing eligible new text end improvements or land and water improvements, as defined in section
216C.436, subdivision 1b. Qualifying commercial real property includes new construction.

Sec. 22.

Minnesota Statutes 2022, section 216C.435, subdivision 10, is amended to read:

Subd. 10.

Renewable energy system feasibility study.

"Renewable energy system
feasibility study" means a written study, conducted by a contractor trained to perform that
analysis, for the purpose of determining the feasibility of installing a renewable energy
system in a building, including an estimate of the deleted text begin length of time a specific deleted text end new text begin effective useful
life, the production of renewable energy, and any related avoided greenhouse gas emissions
of the proposed new text end renewable energy system deleted text begin will take to repay its purchase and installation
costs, based on the amount of energy saved and estimated future energy prices. For a
geothermal energy improvement, the feasibility study must calculate net savings in terms
of nongeothermal energy and costs deleted text end .

Sec. 23.

Minnesota Statutes 2022, section 216C.435, is amended by adding a subdivision
to read:

new text begin Subd. 11a. new text end

new text begin Resiliency improvement. new text end

new text begin "Resiliency improvement" means one or more
installations or modifications to eligible commercial real property that are designed to
improve a property's resiliency by improving the eligible real property's:
new text end

new text begin (1) structural integrity for seismic events;
new text end

new text begin (2) indoor air quality;
new text end

new text begin (3) durability to resist wind, fire, and flooding;
new text end

new text begin (4) ability to withstand an electric power outage;
new text end

new text begin (5) stormwater control measures, including structural and nonstructural measures to
mitigate stormwater runoff;
new text end

new text begin (6) ability to mitigate the impacts of extreme temperatures; or
new text end

new text begin (7) ability to mitigate greenhouse gas embodied emissions from the eligible real property.
new text end

Sec. 24.

Minnesota Statutes 2022, section 216C.435, is amended by adding a subdivision
to read:

new text begin Subd. 11b. new text end

new text begin Resiliency improvement feasibility study. new text end

new text begin "Resiliency improvement
feasibility study" means a written study that is conducted by a contractor trained to perform
the analysis to: (1) determine the feasibility of installing a resiliency improvement; (2)
document the improved resiliency capabilities of the property; and (3) estimate the effective
useful life of the proposed resiliency improvements.
new text end

Sec. 25.

Minnesota Statutes 2022, section 216C.435, is amended by adding a subdivision
to read:

new text begin Subd. 14. new text end

new text begin Water improvement. new text end

new text begin "Water improvement" means one or more installations
or modifications to qualifying commercial real property that are designed to improve water
efficiency or water quality by:
new text end

new text begin (1) reducing water consumption;
new text end

new text begin (2) improving the quality, potability, or safety of water for the qualifying property; or
new text end

new text begin (3) conserving or remediating water, in whole or in part, on qualifying real property.
new text end

Sec. 26.

Minnesota Statutes 2022, section 216C.435, is amended by adding a subdivision
to read:

new text begin Subd. 15. new text end

new text begin Water improvement feasibility study. new text end

new text begin "Water improvement feasibility study"
means a written study that is conducted by a contractor trained to perform the analysis to:
(1) determine the appropriate water improvements that could be made to the building; and
(2) estimate the effective useful life, the reduction of water consumption, and any
improvement in water quality resulting from the proposed water improvements.
new text end

Sec. 27.

Minnesota Statutes 2022, section 216C.436, subdivision 1, is amended to read:

Subdivision 1.

Program purpose and authority.

An implementing entity may establish
a commercial PACE loan program to finance deleted text begin cost-effective deleted text end energy new text begin , water, and resiliency new text end
improvements to enable owners of qualifying commercial real property to pay for deleted text begin the
cost-effective energy deleted text end new text begin eligible new text end improvements to the qualifying real property with the net
proceeds and interest earnings of revenue bonds authorized in this section. An implementing
entity may limit the number of qualifying commercial real properties for which a property
owner may receive program financing.

Sec. 28.

Minnesota Statutes 2023 Supplement, section 216C.436, subdivision 1b, is
amended to read:

Subd. 1b.

Definitions.

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

(b) "Agronomic assessment" means a study by an independent third party that assesses
the environmental impacts of proposed land and water improvements on farmland.

(c) "Farmland" means land classified as 2a, 2b, or 2c for property tax purposes under
section 273.13, subdivision 23.

(d) "Land and water improvement" means:

(1) an improvement to farmland that:

(i) is permanent;

(ii) results in improved agricultural profitability or resiliency;

(iii) reduces the environmental impact of agricultural production; and

(iv) if the improvement affects drainage, complies with the most recent versions of the
applicable following conservation practice standards issued by the United States Department
of Agriculture's Natural Resources Conservation Service: Drainage Water Management
(Code 554), Saturated Buffer (Code 604), Denitrifying Bioreactor (Code 605), and
Constructed Wetland (Code 656); or

(2) water conservation and quality measures, which include permanently affixed
equipment, appliances, or improvements that reduce a property's water consumption or that
enable water to be managed more efficiently.

(e) "Resiliency" means new text begin :
new text end

new text begin (1) new text end the ability of farmland to maintain and enhance profitability, soil health, and water
quality deleted text begin . deleted text end new text begin ;
new text end

new text begin (2) the ability to mitigate greenhouse gas embodied emissions from an eligible real
property; or
new text end

new text begin (3) an increase in building resilience through flood mitigation, stormwater management,
wildfire and wind resistance, energy storage use, or microgrid use.
new text end

Sec. 29.

Minnesota Statutes 2023 Supplement, section 216C.436, subdivision 2, is amended
to read:

Subd. 2.

Program requirements.

A commercial PACE loan program must:

(1) impose requirements and conditions on financing arrangements to ensure timely
repayment;

(2) require an energy audit, renewable energy system feasibility study, new text begin resiliency
improvement study, water improvement study, new text end or agronomic or soil health assessment to
be conducted on the qualifying commercial real property and reviewed by the implementing
entity prior to approval of the financing;

(3) require the inspection new text begin or verification new text end of all deleted text begin installations and a performance verification
of at least ten percent of the cost-effective energy deleted text end new text begin eligible new text end improvements or land and water
improvements financed by the program;

(4) not prohibit the financing of all deleted text begin cost-effective energy deleted text end new text begin eligible new text end improvements or land
and water improvements not otherwise prohibited by this section;

(5) require that all deleted text begin cost-effective energy deleted text end new text begin eligible new text end improvements or land and water
improvements be made to a qualifying commercial real property prior to, or in conjunction
with, an applicant's repayment of financing for deleted text begin cost-effective energy deleted text end new text begin eligible new text end improvements
or land and water improvements for deleted text begin that deleted text end new text begin the qualifying commercial real new text end property;

(6) have deleted text begin cost-effective energy deleted text end new text begin eligible new text end improvements or land and water improvements
financed by the program performed by a licensed contractor as required by chapter 326B
or other law or ordinance;

(7) require disclosures in the loan document to borrowers by the implementing entity
of: (i) the risks involved in borrowing, including the risk of foreclosure if a tax delinquency
results from a default; and (ii) all the terms and conditions of the commercial PACE loan
and the installation of deleted text begin cost-effective energy deleted text end new text begin eligible new text end improvements or land and water
improvements, including the interest rate being charged on the loan;

(8) provide financing only to those who demonstrate an ability to repay;

(9) not provide financing for a qualifying commercial real property in which the owner
is not current on mortgage or real property tax payments;

(10) require a petition to the implementing entity by all owners of the qualifying
commercial real property requesting collections of repayments as a special assessment under
section 429.101;

(11) provide that payments and assessments are not accelerated due to a default and that
a tax delinquency exists only for assessments not paid when due;

(12) require that liability for special assessments related to the financing runs with the
qualifying commercial real property; and

(13) prior to financing any improvements to or imposing any assessment upon qualifying
commercial real property, require notice to and written consent from the mortgage lender
of any mortgage encumbering or otherwise secured by the qualifying commercial real
property.

Sec. 30.

Minnesota Statutes 2022, section 216C.436, subdivision 4, is amended to read:

Subd. 4.

Financing terms.

Financing provided under this section must have:

(1) a cost-weighted average maturity not exceeding the useful life of the deleted text begin energy deleted text end new text begin eligible new text end
improvements installed, as determined by the implementing entity, but in no event may a
term exceed deleted text begin 20 deleted text end new text begin 30 new text end years;

(2) a principal amount not to exceed the lesser of:

(i) the greater of deleted text begin 20 deleted text end new text begin 30 new text end percent of the assessed value of the real property on which the
improvements are to be installed or deleted text begin 20 deleted text end new text begin 30 new text end percent of the real property's appraised value,
accepted or approved by the mortgage lender; or

(ii) the actual cost of installing the deleted text begin energy deleted text end new text begin eligible new text end improvements, including the costs of
necessary equipment, materials, and labor deleted text begin , deleted text end new text begin ; new text end the costs of each related energy audit deleted text begin or deleted text end new text begin , new text end
renewable energy system feasibility study, new text begin water improvement study, or resiliency
improvement study; new text end and the cost of verification of installation; and

(3) an interest rate sufficient to pay the financing costs of the program, including the
issuance of bonds and any financing delinquencies.

Sec. 31.

Minnesota Statutes 2022, section 216C.436, subdivision 7, is amended to read:

Subd. 7.

Repayment.

An implementing entity that finances an deleted text begin energy deleted text end new text begin eligible new text end
improvement under this section must:

(1) secure payment with a lien against the qualifying commercial real property; and

(2) collect repayments as a special assessment as provided for in section 429.101 or by
charter, provided that special assessments may be made payable in up to deleted text begin 20 deleted text end new text begin 30 new text end equal annual
installments.

If the implementing entity is an authority, the local government that authorized the
authority to act as implementing entity shall impose and collect special assessments necessary
to pay debt service on bonds issued by the implementing entity under subdivision 8, and
shall transfer all collections of the assessments upon receipt to the authority.

Sec. 32.

Minnesota Statutes 2022, section 216C.436, subdivision 8, is amended to read:

Subd. 8.

Bond issuance; repayment.

(a) An implementing entity may issue revenue
bonds as provided in chapter 475 for the purposes of this section and section 216C.437,
provided the revenue bond must not be payable more than deleted text begin 20 deleted text end new text begin 30 new text end years from the date of
issuance.

(b) The bonds must be payable as to both principal and interest solely from the revenues
from the assessments established in subdivision 7 and section 216C.437, subdivision 28.

(c) No holder of bonds issued under this subdivision may compel any exercise of the
taxing power of the implementing entity that issued the bonds to pay principal or interest
on the bonds, and if the implementing entity is an authority, no holder of the bonds may
compel any exercise of the taxing power of the local government. Bonds issued under this
subdivision are not a debt or obligation of the issuer or any local government that issued
them, nor is the payment of the bonds enforceable out of any money other than the revenue
pledged to the payment of the bonds.

Sec. 33.

Minnesota Statutes 2022, section 216C.436, subdivision 10, is amended to read:

Subd. 10.

Improvements; real property or fixture.

deleted text begin A cost-effective energy deleted text end new text begin An eligible new text end
improvement financed under a PACE loan program, including all equipment purchased in
whole or in part with loan proceeds under a loan program, is deemed real property or a
fixture attached to the real property.

Sec. 34. new text begin ADVANCED NUCLEAR TECHNOLOGIES STUDY.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, the following terms have
the meanings given:
new text end

new text begin (1) "advanced nuclear reactor" means a small modular reactor or a molten sodium reactor;
new text end

new text begin (2) "molten sodium reactor" means a nuclear fission reactor that uses a fluid fuel in the
form of very hot fluoride or chloride salt; and
new text end

new text begin (3) "small modular reactor" means a nuclear fission reactor that (i) has a capacity of 300
megawatts or less, and (ii) can be factory assembled and transported as a unit.
new text end

new text begin Subd. 2. new text end

new text begin Study required. new text end

new text begin (a) The commissioner of commerce must conduct a study
evaluating the potential costs, benefits, and impacts of advanced nuclear reactors operating
in Minnesota.
new text end

new text begin (b) At a minimum, the study must analyze the impacts the operation of advanced nuclear
reactors have on:
new text end

new text begin (1) air emissions from electric generating facilities in Minnesota;
new text end

new text begin (2) retail electricity prices;
new text end

new text begin (3) reliability of Minnesota's electric grid;
new text end

new text begin (4) the state's air resources, water resources, land resources, and public health, including
the impact of any waste material generated by the reactors;
new text end

new text begin (5) new employment opportunities for Minnesota workers;
new text end

new text begin (6) local economic development;
new text end

new text begin (7) Minnesota's eligible energy technology standard under Minnesota Statutes, section
216B.1691, subdivision 2a; and
new text end

new text begin (8) Minnesota's carbon-free standard under Minnesota Statutes, section 216B.1691,
subdivision 2g.
new text end

new text begin (c) The study must also identify Minnesota statutes and administrative rules that would
require modifications in order to enable the construction and operation of advanced nuclear
reactors.
new text end

new text begin (d) The study must evaluate the technologies and methods most likely to minimize the
environmental impacts of nuclear waste and the costs of managing nuclear waste.
new text end

new text begin Subd. 3. new text end

new text begin Report. new text end

new text begin The commissioner of commerce must submit the results of the study
under subdivision 2 to the chairs and ranking minority members of the legislative committees
having jurisdiction over energy finance and policy no later than January 31, 2025.
new text end

Sec. 35. new text begin THERMAL ENERGY NETWORK DEPLOYMENT WORK GROUP.
new text end

new text begin Subdivision 1. new text end

new text begin Direction. new text end

new text begin The Public Utilities Commission must establish and appoint
a thermal energy network deployment work group to examine the potential regulatory
opportunities for regulated natural gas utilities to deploy thermal energy networks and
potential barriers to development. The work group must examine the public benefits, costs,
and impacts of deployment of thermal energy networks, as well as examine rate design
options.
new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin (a) The work group consists of at least the following:
new text end

new text begin (1) representatives of the Department of Commerce;
new text end

new text begin (2) representatives of the Department of Health;
new text end

new text begin (3) representatives of the Pollution Control Agency;
new text end

new text begin (4) representatives of the Department of Natural Resources;
new text end

new text begin (5) representatives of the Office of the Attorney General;
new text end

new text begin (6) representatives from utilities;
new text end

new text begin (7) representatives from clean energy advocacy organizations;
new text end

new text begin (8) representatives from labor organizations;
new text end

new text begin (9) geothermal technology providers;
new text end

new text begin (10) representatives from consumer protection organizations;
new text end

new text begin (11) representatives from cities; and
new text end

new text begin (12) representatives from low-income communities.
new text end

new text begin (b) The executive director may invite others to participate in one or more meetings of
the work group.
new text end

new text begin Subd. 3. new text end

new text begin Duties. new text end

new text begin The work group must prepare a report containing findings and
recommendations regarding how to deploy thermal energy networks within a regulated
context in a manner that protects the public interest and considers reliability, affordability,
environmental impacts, and socioeconomic impacts.
new text end

new text begin Subd. 4. new text end

new text begin Report to legislature. new text end

new text begin The work group must submit a report detailing the work
group's findings and recommendations to the chairs and ranking minority members of the
legislative committees and divisions with jurisdiction over energy policy and finance by
December 31, 2025. The work group terminates the day after the report under this subdivision
is submitted.
new text end

new text begin Subd. 5. new text end

new text begin Notice and comment period. new text end

new text begin The executive secretary of the Public Utilities
Commission must file the completed report in Public Utilities Commission Docket No.
G-999/CI-21-565 and provide notice to all docket participants and other interested persons
that comments on the findings and recommendations may be filed in the docket.
new text end

new text begin Subd. 6. new text end

new text begin Definition. new text end

new text begin For the purposes of this section, "thermal energy network" means
a project that provides heating and cooling to multiple buildings connected via underground
piping containing fluids that, in concert with heat pumps, exchange thermal energy from
the earth and underground or surface waters.
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. 36. new text begin THERMAL ENERGY NETWORK SITE SUITABILITY STUDY.
new text end

new text begin (a) The Department of Commerce must conduct or contract for a study to determine the
suitability of sites to deploy thermal energy networks statewide.
new text end

new text begin (b) The study must:
new text end

new text begin (1) identify areas more and less suitable for deployment of thermal energy networks
statewide; and
new text end

new text begin (2) identify potential barriers to thermal energy networks and potential ways to address
the barriers.
new text end

new text begin (c) In determining site suitability, the study must consider:
new text end

new text begin (1) geologic or hydrologic access to thermal storage;
new text end

new text begin (2) existing built environment, including but not limited to age, density, building uses,
existing heating and cooling systems, and existing electrical services;
new text end

new text begin (3) the condition of existing natural gas infrastructure;
new text end

new text begin (4) road and street conditions, including planned replacement or maintenance;
new text end

new text begin (5) local land use regulation;
new text end

new text begin (6) area permitting requirements; and
new text end

new text begin (7) whether the area is an environmental justice area, as defined in Minnesota Statutes,
section 116.065, subdivision 1, paragraph (e).
new text end

new text begin (c) No later than January 15, 2026, the Department of Commerce must submit a written
report documenting the study's findings to the chairs and ranking minority members of the
senate and house of representatives committees with jurisdiction over energy policy and
finance.
new text end