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Minnesota Legislature

Office of the Revisor of Statutes

SF 550

1st Unofficial Engrossment - 86th Legislature (2009 - 2010) Posted on 12/26/2012 11:17pm

KEY: stricken = removed, old language.
underscored = added, new language.
1.1A bill for an act
1.2relating to energy; modifying or adding provisions relating to renewable energy
1.3production incentives and initiatives, C-BED contracts, renewable energy
1.4purchases, certain appraisal fees, energy conservation, utility costs and refunds,
1.5renewable and high-efficiency energy rate options, solar energy, utility energy
1.6savings, renewable residential heating, biomethane purchases, Sustainable
1.7Building 2030, power purchase agreements, power transmission, certificate
1.8of need exemptions, energy facilities, renewable development account, the
1.9reliability administrator, wind energy conversion systems, and Mountain Iron
1.10Economic Development Authority; requiring legislative reports and proposals;
1.11appropriating money;amending Minnesota Statutes 2008, sections 116C.779,
1.12subdivision 2, by adding a subdivision; 117.189; 216B.16, subdivision 6c,
1.13by adding a subdivision; 216B.1645, subdivision 2a; 216B.169, subdivision
1.142; 216B.1691, subdivision 2a; 216B.23, by adding a subdivision; 216B.241,
1.15subdivisions 1c, 9, by adding subdivisions; 216B.2411, subdivisions 1, 2;
1.16216B.2424, subdivision 5a; 216B.2425, subdivision 3; 216B.243, subdivisions
1.178, 9; 216C.052, subdivision 2; 216C.41, subdivision 5a; 216F.01, subdivisions
1.182, 3; 216F.012; 216F.02; 216F.08; proposing coding for new law in Minnesota
1.19Statutes, chapters 216B; 216C; repealing Laws 2007, chapter 3, section 3.
1.20BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.21    Section 1. Minnesota Statutes 2008, section 116C.779, subdivision 2, is amended to
1.22read:
1.23    Subd. 2. Renewable energy production incentive. (a) Until January 1, 2018 2021,
1.24up to $10,900,000 annually must be allocated from available funds in the account to
1.25fund renewable energy production incentives. $9,400,000 of this annual amount is for
1.26incentives for up to 200 megawatts of electricity generated by wind energy conversion
1.27systems that are eligible for the incentives under section 216C.41 or Laws 2005, chapter
1.2840.
1.29(b) The balance of this amount, up to $1,500,000 annually, may be used for
1.30production incentives for on-farm biogas recovery facilities and hydroelectric facilities
2.1that are eligible for the incentive under section 216C.41 or for production incentives for
2.2other renewables, to be provided in the same manner as under section 216C.41.
2.3(c) Any funds allocated to incentive payments for wind energy conversion systems
2.4under paragraph (a) that are not expended for that purpose must be allocated to incentive
2.5payments under paragraph (b) if necessary to fully pay eligible claims for incentive
2.6payments to qualified on-farm biogas recovery facilities and hydroelectric facilities.
2.7(d) If funds allocated in calendar year 2010 under paragraphs (b) and (c) are
2.8insufficient to fully pay eligible claims for incentive payments to qualified on-farm biogas
2.9recovery facilities and hydroelectric facilities, up to $500,000 of additional funds in the
2.10renewable development account must be allocated to make up the insufficiency.
2.11(e) Any portion of the $10,900,000 not expended in any calendar year for the
2.12incentive is available for other spending purposes under this section. This subdivision
2.13does not create an obligation to contribute funds to the account.
2.14(b) (f) The Department of Commerce shall determine eligibility of projects under
2.15section 216C.41 for the purposes of this subdivision. At least quarterly, the Department of
2.16Commerce shall notify the public utility of the name and address of each eligible project
2.17owner and the amount due to each project under section 216C.41. The public utility shall
2.18make payments within 15 working days after receipt of notification of payments due.

2.19    Sec. 2. Minnesota Statutes 2008, section 116C.779, is amended by adding a subdivision
2.20to read:
2.21    Subd. 3. Initiative for Renewable Energy and the Environment (a) Beginning
2.22July 1, 2011, and each July 1 thereafter, $5,000,000 must be allocated from the renewable
2.23development account to fund a grant to the Board of Regents of the University of
2.24Minnesota for the Initiative for Renewable Energy and the Environment for the purposes
2.25described in paragraph (b). The Initiative for Renewable Energy and the Environment
2.26must set aside at least 15 percent of the funds received annually under the grant for
2.27qualified projects conducted at a rural campus or experiment station. Any set-aside funds
2.28not awarded to a rural campus or experiment station at the end of the fiscal year revert
2.29back to the Initiative for Renewable Energy and the Environment for its exclusive use.
2.30This subdivision does not create an obligation to contribute funds to the account.
2.31(b) Activities funded under this grant may include, but are not limited to:
2.32(1) environmentally sound production of energy from a renewable energy source,
2.33including biomass;
2.34(2) environmentally sound production of hydrogen from biomass and any other
2.35renewable energy source for energy storage and energy utilization;
3.1(3) development of energy conservation and efficient energy utilization technologies;
3.2(4) energy storage technologies; and
3.3(5) analysis of policy options to facilitate adoption of technologies that use or
3.4produce low-carbon renewable energy.
3.5(c) For the purposes of this subdivision:
3.6(1) "biomass" means plant and animal material, agricultural and forest residues,
3.7mixed municipal solid waste, and sludge from wastewater treatment; and
3.8(2) "renewable energy source" means hydro, wind, solar, biomass, and geothermal
3.9energy, and microorganisms used as an energy source.

3.10    Sec. 3. Minnesota Statutes 2008, section 117.189, is amended to read:
3.11117.189 PUBLIC SERVICE CORPORATION EXCEPTIONS.
3.12Sections 117.031; 117.036; 117.055, subdivision 2, paragraph (b); 117.186; 117.187;
3.13117.188 ; and 117.52, subdivisions 1a and 4, do not apply to public service corporations.
3.14For purposes of an award of appraisal fees under section 117.085, the fees awarded may
3.15not exceed $500 $1,500 for all types of property.

3.16    Sec. 4. Minnesota Statutes 2008, section 216B.16, subdivision 6c, is amended to read:
3.17    Subd. 6c. Incentive plan for energy conservation improvement. (a) The
3.18commission may order public utilities to develop and submit for commission approval
3.19incentive plans that describe the method of recovery and accounting for utility
3.20conservation expenditures and savings. In developing the incentive plans the commission
3.21shall ensure the effective involvement of interested parties.
3.22(b) In approving incentive plans, the commission shall consider:
3.23(1) whether the plan is likely to increase utility investment in cost-effective energy
3.24conservation;
3.25(2) whether the plan is compatible with the interest of utility ratepayers and other
3.26interested parties;
3.27(3) whether the plan links the incentive to the utility's performance in achieving
3.28cost-effective conservation; and
3.29(4) whether the plan is in conflict with other provisions of this chapter.
3.30(c) The commission may set rates to encourage the vigorous and effective
3.31implementation of utility conservation programs. The commission may:
3.32(1) increase or decrease any otherwise allowed rate of return on net investment based
3.33upon the utility's skill, efforts, and success in conserving energy;
4.1(2) share between ratepayers and utilities the net savings resulting from energy
4.2conservation programs to the extent justified by the utility's skill, efforts, and success in
4.3conserving energy; and
4.4(3) compensate the utility for earnings lost as a result of its conservation programs
4.5adopt any mechanism that satisfies the criteria of this subdivision.
4.6(d) In its review under section 216B.241, subdivision 2c, the commission shall
4.7provide an incentive that makes effective implementation of cost-effective conservation
4.8the most profitable resource choice for public utilities.

4.9    Sec. 5. Minnesota Statutes 2008, section 216B.16, is amended by adding a subdivision
4.10to read:
4.11    Subd. 7d. University Avenue light rail transit utility zone cost adjustment. (a)
4.12"University Avenue light rail transit utility zone" or "utility zone" means an area extending
4.13no more than one-half mile on either side of the route for the planned light rail transit
4.14system connecting the cities of Minneapolis and St. Paul along University Avenue.
4.15(b) A public utility that provides retail electric service within the utility zone,
4.16and which is required to replace, relocate, construct, or install facilities because of the
4.17mass transit system, may apply to the commission for approval of new facilities in the
4.18utility zone. Facilities proposed under this subdivision are not limited to those facilities
4.19that actually replace dislocated facilities and may include any transmission facilities,
4.20distribution facilities, generation facilities, advanced technology-assisted efficiency
4.21devices, and energy storage facilities within the utility zone. Upon approval under
4.22paragraph (c), the utility may construct and install the facilities.
4.23(c) The commission may approve the construction and installation of facilities in a
4.24mass transit utility zone proposed by a utility under paragraph (b) upon a finding:
4.25(1) that the facilities:
4.26(i) are necessary to provide electric service;
4.27(ii) assist future development of renewable energy, conservation, electric vehicles, or
4.28advanced technology-assisted efficiency programs and devices; or
4.29(iii) are exploratory, experimental, or research facilities to advance the use of
4.30renewable energy, conservation, electric vehicles, or advanced technology-assisted
4.31efficiency programs and devices;
4.32(2) that the utility has engaged in a cooperative process with affected local and state
4.33government agencies in the design, planning, or construction of the utility zone project
4.34and changes to utility facilities;
5.1(3) that the utility and local units of government have made reasonable efforts to seek
5.2federal, state, or private funds that may be available to mass transit and energy projects;
5.3(4) that the utility has made reasonable efforts to minimize the costs and maximize
5.4the value to customers of the facilities;
5.5(5) that the utility has a plan to offer a comprehensive array of programs for
5.6residential, commercial, and industrial customers located within the mass transit zone;
5.7(6) that the utility direct existing and planned solar energy programs to develop solar
5.8energy along the mass transit utility zone; and
5.9(7) that the utility has made reasonable efforts to apply for federal funds to develop
5.10technology-assisted efficiency programs and devices within the mass transit utility zone.
5.11(d) Notwithstanding any other provision of this chapter, the commission may approve
5.12a tariff mechanism for automatic adjustment of charges for new, replaced, or relocated
5.13facilities installed under this subdivision in a manner consistent with this subdivision and
5.14the standards and procedures contained in subdivision 7b, except that no approval under
5.15section 216B.243 or certification under section 216B.2425 is required unless otherwise
5.16required by law. This section does not authorize a city-requested facilities surcharge.
5.17(e) For the purpose of this subdivision, "technology-assisted efficiency programs and
5.18devices" includes, but is not limited to, infrastructure that integrates digital information and
5.19controls technology to improve the reliability, security, and efficiency of the electric grid.

5.20    Sec. 6. [216B.1613] STANDARDIZED C-BED CONTRACT.
5.21(a) Within 60 days of the effective date of this section, the commission shall initiate
5.22a proceeding to standardize all contract provisions, except those establishing the power
5.23purchase price, for two classes of C-BED projects:
5.24(1) projects with a nameplate capacity of five megawatts or less; and
5.25(2) projects with a nameplate capacity of greater than five megawatts.
5.26    (b) The proceeding shall provide for participation by the public and stakeholders.
5.27The commission shall issue an order containing standardized contract language for each
5.28class of C-BED project identified in this section no later than 90 days after the opening of
5.29the proceeding. The standardized contract form must be similar in all material respects to
5.30the standard contract form previously filed with the commission under section 216B.2423,
5.31subdivision 3, including any revisions to that contract on file with the commission as of
5.32the effective date of this section. Any applicable C-BED contract signed after the date of
5.33the commission's order whose provisions are not identical to the standardized contract
5.34contained in the commission's order is invalid.
5.35EFFECTIVE DATE.This section is effective the day following final enactment.

6.1    Sec. 7. [216B.1614] SMALL RENEWABLE PROJECTS PURCHASE.
6.2Between the effective date of this section and December 31, 2010, electric utilities,
6.3as defined in section 216B.1691, subdivision 1, paragraph (b), must purchase or contract to
6.4purchase energy from a sufficient number of renewable energy projects with a nameplate
6.5capacity of five megawatts or less so as to total at least 200 megawatts in the aggregate.
6.6Such projects must be constructed or under construction by December 31, 2010, and must
6.7meet the eligibility requirements for a renewable energy incentive under the American
6.8Recovery and Reinvestment Act of 2009, the federal Rural Energy for America Program,
6.9or other renewable energy incentive program. Before December 31, 2010, an electric
6.10utility must undertake such projects in approximate proportion to its share of the total
6.11amount of electrical energy sold within this state. This requirement does not prevent an
6.12electric utility from developing or acquiring electrical energy from other sources either
6.13within or outside the state regardless of whether such sources use renewable energy.

6.14    Sec. 8. Minnesota Statutes 2008, section 216B.1645, subdivision 2a, is amended to
6.15read:
6.16    Subd. 2a. Cost recovery for utility's renewable facilities. (a) A utility may petition
6.17the commission to approve a rate schedule that provides for the automatic adjustment of
6.18charges to recover prudently incurred investments, expenses, or costs associated with
6.19facilities constructed, owned, or operated by a utility to satisfy the requirements of section
6.20216B.1691 , provided those facilities were previously approved by the commission under
6.21section 216B.2422 or 216B.243, or were determined by the commission to be reasonable
6.22and prudent under section 216B.243, subdivision 9. For a facility not subject to review
6.23by the commission under section 216B.2422 or 216B.243, a utility shall first petition
6.24the commission to determine the utility's eligibility to apply for cost recovery for the
6.25facility under this section. The commission may approve, or approve as modified, a
6.26rate schedule that:
6.27    (1) allows a utility to recover directly from customers on a timely basis the costs of
6.28qualifying renewable energy projects, including:
6.29    (i) return on investment;
6.30    (ii) depreciation;
6.31    (iii) ongoing operation and maintenance costs;
6.32    (iv) taxes; and
6.33    (v) costs of transmission and other ancillary expenses directly allocable to
6.34transmitting electricity generated from a project meeting the specifications of this
6.35paragraph;
7.1    (2) provides a current return on construction work in progress, provided that recovery
7.2of these costs from Minnesota ratepayers is not sought through any other mechanism;
7.3    (3) allows recovery of other expenses incurred that are directly related to a
7.4renewable energy project, including expenses for energy storage, provided that the
7.5utility demonstrates to the commission's satisfaction that the expenses improve project
7.6economics, ensure project implementation, advance research and understanding of how
7.7storage devices may improve renewable energy projects, or facilitate coordination with
7.8the development of transmission necessary to transport energy produced by the project
7.9to market;
7.10    (4) allocates recoverable costs appropriately between wholesale and retail customers;
7.11    (5) terminates recovery when costs have been fully recovered or have otherwise
7.12been reflected in a utility's rates.
7.13    (b) A petition filed under this subdivision must include:
7.14    (1) a description of the facilities for which costs are to be recovered;
7.15    (2) an implementation schedule for the facilities;
7.16    (3) the utility's costs for the facilities;
7.17    (4) a description of the utility's efforts to ensure that costs of the facilities are
7.18reasonable and were prudently incurred; and
7.19    (5) a description of the benefits of the project in promoting the development of
7.20renewable energy in a manner consistent with this chapter.

7.21    Sec. 9. Minnesota Statutes 2008, section 216B.169, subdivision 2, is amended to read:
7.22    Subd. 2. Renewable and high-efficiency energy rate options. (a) Each A
7.23utility shall may offer its customers, and shall advertise the offer at least annually,
7.24one or more options that allow a customer to determine that a certain amount of the
7.25electricity generated or purchased on behalf of the customer is renewable energy or energy
7.26generated by high-efficiency, low-emissions, distributed generation such as fuel cells and
7.27microturbines fueled by a renewable fuel.
7.28(b) Each public utility shall file an implementation plan within 90 days of July 1,
7.292001, to implement paragraph (a).
7.30(c) (b) Rates charged to customers must be calculated using the utility's cost of
7.31acquiring the energy for the customer and must:
7.32(1) reflect the difference between the cost of generating or purchasing the
7.33additional renewable energy and the cost of generating or purchasing the same amount
7.34of nonrenewable energy and the cost that would otherwise be attributed to the customer
8.1for the same amount of energy based on the utility's mix of renewable and nonrenewable
8.2energy sources; and
8.3(2) be distributed on a per kilowatt-hour basis among all customers who choose to
8.4participate in the program.
8.5(d) Implementation of these rate options may reflect a reasonable amount of
8.6lead time necessary to arrange acquisition of the energy. The utility may acquire the
8.7energy demanded by customers, in whole or in part, through procuring or generating the
8.8renewable energy directly, or through the purchase of credits from a provider that has
8.9received certification of eligible power supply pursuant to subdivision 3. If a utility is not
8.10able to arrange an adequate supply of renewable or high-efficiency energy to meet its
8.11customers' demand under this section, the utility must file a report with the commission
8.12detailing its efforts and reasons for its failure.
8.13EFFECTIVE DATE.This section is effective the day following final enactment.

8.14    Sec. 10. Minnesota Statutes 2008, section 216B.1691, subdivision 2a, is amended to
8.15read:
8.16    Subd. 2a. Eligible energy technology standard. (a) Except as provided in
8.17paragraph (b), each electric utility shall generate or procure sufficient electricity generated
8.18by an eligible energy technology to provide its retail customers in Minnesota, or the
8.19retail customers of a distribution utility to which the electric utility provides wholesale
8.20electric service, so that at least the following standard percentages of the electric utility's
8.21total retail electric sales to retail customers in Minnesota are generated by eligible energy
8.22technologies by the end of the year indicated:
8.23
(1)
2012
12 percent
8.24
(2)
2016
17 percent
8.25
(3)
2020
20 percent
8.26
(4)
2025
25 percent.
8.27    (b) An electric utility that owned a nuclear generating facility as of January 1, 2007,
8.28must meet the requirements of this paragraph rather than paragraph (a). An electric utility
8.29subject to this paragraph must generate or procure sufficient electricity generated by
8.30an eligible energy technology to provide its retail customers in Minnesota or the retail
8.31customer of a distribution utility to which the electric utility provides wholesale electric
8.32service so that at least the following percentages of the electric utility's total retail electric
8.33sales to retail customers in Minnesota are generated by eligible energy technologies by the
8.34end of the year indicated:
9.1
(1)
2010
15 percent
9.2
(2)
2012
18 percent
9.3
(3)
2016
25 percent
9.4
(4)
2020
30 percent.
9.5Of the 30 percent in 2020, at least 25 percent must be generated by wind or solar
9.6energy conversion systems and the remaining five percent by other eligible energy
9.7technology.

9.8    Sec. 11. Minnesota Statutes 2008, section 216B.23, is amended by adding a subdivision
9.9to read:
9.10    Subd. 1a. Authority to issue refund. (a) On determining that a public utility has
9.11charged a rate in violation of this chapter, a commission rule, or a commission order, the
9.12commission, after conducting a proceeding, may require the public utility to refund to its
9.13customers, in a manner approved by the commission, any revenues the commission finds
9.14were collected as a result of the unlawful conduct. Any refund authorized by this section
9.15is permitted in addition to any remedies authorized by section 216B.16 or any other law
9.16governing rates. Exercising authority under this section does not preclude the commission
9.17from pursuing penalties under sections 216B.57 to 216B.61 for the same conduct.
9.18(b) This section must not be construed as allowing:
9.19(1) retroactive ratemaking;
9.20(2) refunds based on claims that prior or current approved rates have been unjust,
9.21unreasonable, unreasonably preferential, discriminatory, insufficient, inequitable, or
9.22inconsistent in application to a class of customers; or
9.23(3) refunds based on claims that approved rates have not encouraged energy
9.24conservation or renewable energy use, or have not furthered the goals of section 216B.164,
9.25216B.241, or 216C.05.
9.26    (c) A refund under this subdivision does not apply to revenues collected more than
9.27six years before the date of the notice of the commission proceeding required under this
9.28subdivision.

9.29    Sec. 12. Minnesota Statutes 2008, section 216B.241, subdivision 1c, is amended to
9.30read:
9.31    Subd. 1c. Energy-saving goals. (a) The commissioner shall establish energy-saving
9.32goals for energy conservation improvement expenditures and shall evaluate an energy
9.33conservation improvement program on how well it meets the goals set.
10.1    (b) Each individual utility and association shall have an annual energy-savings
10.2goal equivalent to 1.5 percent of gross annual retail energy sales unless modified by the
10.3commissioner under paragraph (d). The savings goals must be calculated based on the
10.4most recent three-year weather normalized average. A utility or association may elect to
10.5carry forward energy savings in excess of 1.5 percent for a year to the succeeding three
10.6calendar years, provided that a particular energy savings can apply only to one year's goal.
10.7    (c) The commissioner must adopt a filing schedule that is designed to have all
10.8utilities and associations operating under an energy-savings plan by calendar year 2010.
10.9    (d) In its energy conservation improvement plan filing, a utility or association may
10.10request the commissioner to adjust its annual energy-savings percentage goal based on
10.11its historical conservation investment experience, customer class makeup, load growth,
10.12a conservation potential study, or other factors the commissioner determines warrants
10.13an adjustment. The commissioner may not approve a plan that provides for an annual
10.14energy-savings goal of less than one percent of gross annual retail energy sales from
10.15energy conservation improvements.
10.16A utility or association may include in its energy conservation plan energy savings
10.17from electric utility infrastructure projects approved by the commission under section
10.18216B.1636 or waste heat recovery converted into electricity projects that may count as
10.19energy savings in addition to the minimum energy-savings goal of at least one percent for
10.20energy conservation improvements. Electric utility infrastructure projects must result in
10.21increased energy efficiency greater than that which would have occurred through normal
10.22maintenance activity.
10.23    (e) An energy-savings goal is not satisfied by attaining the revenue expenditure
10.24requirements of subdivisions 1a and 1b, but can only be satisfied by meeting the
10.25energy-savings goal established in this subdivision.
10.26    (f) An association or utility is not required to make energy conservation investments
10.27to attain the energy-savings goals of this subdivision that are not cost-effective even
10.28if the investment is necessary to attain the energy-savings goals. For the purpose of
10.29this paragraph, in determining cost-effectiveness, the commissioner shall consider the
10.30costs and benefits to ratepayers, the utility, participants, and society. In addition, the
10.31commissioner shall consider the rate at which an association or municipal utility is
10.32increasing its energy savings and its expenditures on energy conservation.
10.33    (g) On an annual basis, the commissioner shall produce and make publicly available
10.34a report on the annual energy savings and estimated carbon dioxide reductions achieved
10.35by the energy conservation improvement programs for the two most recent years for
10.36which data is available. The commissioner shall report on program performance both in
11.1the aggregate and for each entity filing an energy conservation improvement plan for
11.2approval or review by the commissioner.
11.3    (h) By January 15, 2010, the commissioner shall report to the legislature whether
11.4the spending requirements under subdivisions 1a and 1b are necessary to achieve the
11.5energy-savings goals established in this subdivision.
11.6EFFECTIVE DATE.This section is effective the day following final enactment.

11.7    Sec. 13. Minnesota Statutes 2008, section 216B.241, is amended by adding a
11.8subdivision to read:
11.9    Subd. 2d. Renewable residential heating. (a) Up to five percent of a utility's
11.10conservation spending obligation under subdivision 1a or any amount expended in order
11.11to satisfy a utility's energy-savings goal under subdivision 1c may be used for a project
11.12located in this state that provides rebates to homeowners who install the following types of
11.13projects to heat the homeowner's primary residence:
11.14(1) a solar thermal project, as defined in section 216B.2411, subdivision 2, paragraph
11.15(e);
11.16(2) a geothermal project;
11.17(3) a heating unit that burns exclusively either biodiesel, shelled corn, or wood chips
11.18or wood pellets, provided that the heating unit is listed by Underwriters Laboratories.
11.19    (b) A rebate awarded under this subdivision must not exceed the lesser of 25 percent
11.20of the purchase and installation costs of the project or $500.
11.21EFFECTIVE DATE.This section is effective the day following final enactment.

11.22    Sec. 14. Minnesota Statutes 2008, section 216B.241, is amended by adding a
11.23subdivision to read:
11.24    Subd. 5b. Biomethane purchases. (a) A natural gas utility may include in its
11.25conservation plan purchases of biomethane, and may use up to five percent of the total
11.26amount to be spent on energy conservation improvements under this section for that
11.27purpose. The cost-effectiveness of biomethane purchases may be determined by a
11.28different standard than for other energy conservation improvements under this section if
11.29the commissioner determines that doing so is in the public interest in order to encourage
11.30biomethane purchases. Energy savings from purchasing biomethane may not be counted
11.31toward the minimum energy-savings goal of at least one percent for energy conservation
11.32improvements required under subdivision 1c, but may, if the conservation plan is approved:
11.33(1) be counted toward energy savings above that minimum percentage; and
12.1(2) be considered when establishing performance incentives under subdivision 2c.
12.2(b) For the purposes of this subdivision, "biomethane" means biogas produced
12.3through anaerobic digestion of biomass, gasification of biomass, or other effective
12.4conversion processes, that is cleaned and purified into biomethane that meets natural gas
12.5utility quality specifications for use in a natural gas utility distribution system.
12.6EFFECTIVE DATE.This section is effective the day following final enactment.

12.7    Sec. 15. Minnesota Statutes 2008, section 216B.241, subdivision 9, is amended to read:
12.8    Subd. 9. Building performance standards; Sustainable Building 2030. (a) The
12.9purpose of this subdivision is to establish cost-effective energy-efficiency performance
12.10standards for new and substantially reconstructed commercial, industrial, and institutional
12.11buildings that can significantly reduce carbon dioxide emissions by lowering energy use in
12.12new and substantially reconstructed buildings. For the purposes of this subdivision, the
12.13establishment of these standards may be referred to as Sustainable Building 2030.
12.14    (b) The commissioner shall contract with the Center for Sustainable Building
12.15Research at the University of Minnesota to coordinate development and implementation
12.16of energy-efficiency performance standards, strategic planning, research, data analysis,
12.17technology transfer, training, and other activities related to the purpose of Sustainable
12.18Building 2030. The commissioner and the Center for Sustainable Building Research
12.19shall, in consultation with utilities, builders, developers, building operators, and experts
12.20in building design and technology, develop a Sustainable Building 2030 implementation
12.21plan that must address, at a minimum, the following issues:
12.22    (1) training architects to incorporate the performance standards in building design;
12.23    (2) incorporating the performance standards in utility conservation improvement
12.24programs; and
12.25    (3) developing procedures for ongoing monitoring of energy use in buildings that
12.26have adopted the performance standards.
12.27The plan must be submitted to the chairs and ranking minority members of the senate and
12.28house of representatives committees with primary jurisdiction over energy policy by
12.29July 1, 2009.
12.30    (c) Sustainable Building 2030 energy-efficiency performance standards must be firm,
12.31quantitative measures of total building energy use and associated carbon dioxide emissions
12.32per square foot for different building types and uses, that allow for accurate determinations
12.33of a building's conformance with a performance standard. The energy-efficiency
12.34performance standards must be updated every three or five years to incorporate all
13.1cost-effective measures. The performance standards must reflect the reductions in carbon
13.2dioxide emissions per square foot resulting from actions taken by utilities to comply
13.3with the renewable energy standards in section 216B.1691. The performance standards
13.4should be designed to achieve reductions equivalent to the following reduction schedule,
13.5measured against energy consumption by an average building in each applicable building
13.6sector in 2003: (1) 60 percent in 2010; (2) 70 percent in 2015; (3) 80 percent in 2020;
13.7and (4) 90 percent in 2025. A performance standard must not be established or increased
13.8absent a conclusive engineering analysis that it is cost-effective based upon established
13.9practices used in evaluating utility conservation improvement programs.
13.10    (d) The annual amount of the contract with the Center for Sustainable Building
13.11Research is up to $500,000. The Center for Sustainable Building Research shall expend
13.12no more than $150,000 of this amount each year on administration, coordination, and
13.13oversight activities related to Sustainable Building 2030. The balance of contract funds
13.14must be spent on substantive programmatic activities allowed under this subdivision
13.15that may be conducted by the Center for Sustainable Building Research and for
13.16subcontracts with not-for-profit energy organizations, architecture and engineering firms,
13.17and other qualified entities to undertake technical projects and activities in support of
13.18Sustainable Building 2030. The primary work to be accomplished each year by qualified
13.19technical experts under subcontracts is the development and thorough justification of
13.20recommendations for specific energy-efficiency performance standards. Additional work
13.21may include:
13.22    (1) research, development, and demonstration of new energy-efficiency technologies
13.23and techniques suitable for commercial, industrial, and institutional buildings;
13.24    (2) analysis and evaluation of practices in building design, construction,
13.25commissioning and operations, and analysis and evaluation of energy use in the
13.26commercial, industrial, and institutional sectors;
13.27    (3) analysis and evaluation of the effectiveness and cost-effectiveness of Sustainable
13.28Building 2030 performance standards, conservation improvement programs, and building
13.29energy codes;
13.30    (4) development and delivery of training programs for architects, engineers,
13.31commissioning agents, technicians, contractors, equipment suppliers, developers, and
13.32others in the building industries; and
13.33    (5) analyze and evaluate the effect of building operations on energy use.
13.34    (e) The commissioner shall require utilities to develop and implement conservation
13.35improvement programs that are expressly designed to achieve energy efficiency goals
13.36consistent with the Sustainable Building 2030 performance standards. These programs
14.1must include offerings of design assistance and modeling, financial incentives, and the
14.2verification of the proper installation of energy-efficient design components in new and
14.3substantially reconstructed buildings. A utility's design assistance program must consider
14.4the strategic planting of trees and shrubs around buildings as an energy conservation
14.5strategy for the designed project. A utility making an expenditure under its conservation
14.6improvement program that results in a building meeting the Sustainable Building 2030
14.7performance standards may claim the energy savings toward its energy-savings goal
14.8established in subdivision 1c.
14.9    (f) The commissioner shall report to the legislature every three years, beginning
14.10January 15, 2010, on the cost-effectiveness and progress of implementing the Sustainable
14.11Building 2030 performance standards and shall make recommendations on the need to
14.12continue the program as described in this section.
14.13EFFECTIVE DATE.This section is effective the day following final enactment.

14.14    Sec. 16. Minnesota Statutes 2008, section 216B.2411, subdivision 1, is amended to
14.15read:
14.16    Subdivision 1. Generation projects. (a) Any municipality or rural electric
14.17association providing electric service and subject to section 216B.241 may, and each
14.18public utility may, use five percent of the total amount to be spent on energy conservation
14.19improvements under section 216B.241, on:
14.20    (1) projects in Minnesota to construct an electric generating facility that utilizes
14.21eligible renewable energy sources as defined in subdivision 2, such as methane or other
14.22combustible gases derived from the processing of plant or animal wastes, biomass fuels
14.23such as short-rotation woody or fibrous agricultural crops, or other renewable fuel, as
14.24its primary fuel source;
14.25    (2) projects in Minnesota to install a distributed generation facility of ten megawatts
14.26or less of interconnected capacity that is fueled by natural gas, renewable fuels, or another
14.27similarly clean fuel; or
14.28    (3) projects in Minnesota to install a qualifying solar energy project as defined in
14.29subdivision 2.
14.30    (b) A utility that offers a program to customers to promote installing qualifying solar
14.31energy projects may request authority from the commissioner to exceed the five percent
14.32limit in paragraph (a) to meet customer demand for installation of qualifying solar energy
14.33projects. In considering this request, the commissioner shall consider customer interest in
14.34qualifying solar energy and the impact on other customers.
15.1For public utilities, as defined under section 216B.02, subdivision 4, (c) For a utility
15.2subject to this section, projects under this section must be considered energy conservation
15.3improvements as defined in section 216B.241. For cooperative electric associations and
15.4municipal utilities, projects under this section must be considered load-management
15.5activities described in section 216B.241, subdivision 1.

15.6    Sec. 17. Minnesota Statutes 2008, section 216B.2411, subdivision 2, is amended to
15.7read:
15.8    Subd. 2. Definitions. (a) For the purposes of this section, the terms defined in this
15.9subdivision and section 216B.241, subdivision 1, have the meanings given them.
15.10    (b) "Eligible renewable energy sources" means fuels and technologies to generate
15.11electricity through the use of any of the resources listed in section 216B.1691, subdivision
15.121
, paragraph (a), except that the incineration of wastewater sludge is not an eligible
15.13renewable energy source, "biomass" has the meaning provided under paragraph (c), and
15.14"solar" must be from a qualified solar energy project as defined in paragraph (d).
15.15    (c) "Biomass" includes:
15.16    (1) methane or other combustible gases derived from the processing of plant or
15.17animal material;
15.18    (2) alternative fuels derived from soybean and other agricultural plant oils or animal
15.19fats;
15.20    (3) combustion of barley hulls, corn, soy-based products, or other agricultural
15.21products;
15.22    (4) wood residue from the wood products industry in Minnesota or other wood
15.23products such as short-rotation woody or fibrous agricultural crops;
15.24    (5) landfill gas;
15.25(6) the predominantly organic components of wastewater effluent, sludge, or related
15.26byproducts from publicly owned treatment works; and
15.27(7) mixed municipal solid waste, and refuse-derived fuel from mixed municipal
15.28solid waste.
15.29    (d) "Qualifying solar energy project" means a qualifying solar thermal project or
15.30qualifying solar electric project.
15.31    (e) "Qualifying solar thermal project" means a flat plate or evacuated tube that meets
15.32the requirements of section 216C.25 with a fixed orientation that collects the sun's radiant
15.33energy and transfers it to a storage medium for distribution as energy to heat or cool air or
15.34water, but does not include equipment used to heat water at a residential property (1) for
16.1domestic use if less than one-half of the energy used for that purpose is derived from the
16.2sun or (2) for use in a hot tub or swimming pool.
16.3    (f) "Qualifying solar electric project" means:
16.4(1) solar electric equipment that: (i) meets the requirements of section 216C.25
16.5with a total; (ii) has a peak generating capacity of 100 kilowatts or less; and (iii) is
16.6used for generating to generate electricity primarily for use in a residential property or
16.7small business to reduce the effective electric load for that residence or small business,
16.8commercial, or publicly owned building or facility; and
16.9(2) if applicable, equipment that is used to store the electricity generated by a
16.10qualified solar electric project under clause (1) and that is located proximate to the
16.11building or facility using the electricity.
16.12    (g) "Residential property building" means the principal residence of a homeowner at
16.13the time the solar equipment is placed in service.
16.14    (h) "Small business" has the meaning given to it in section 645.445.
16.15EFFECTIVE DATE.This section is effective the day following final enactment.

16.16    Sec. 18. Minnesota Statutes 2008, section 216B.2424, subdivision 5a, is amended to
16.17read:
16.18    Subd. 5a. Reduction of biomass mandate. (a) Notwithstanding subdivision 5, the
16.19biomass electric energy mandate must be reduced from 125 megawatts to 110 megawatts.
16.20(b) The Public Utilities Commission shall approve a request pending before the
16.21commission as of May 15, 2003, for amendments to and assignment of a power purchase
16.22agreement with the owner of a facility that uses short-rotation, woody crops as its primary
16.23fuel previously approved to satisfy a portion of the biomass mandate if the owner of
16.24the project agrees to reduce the size of its project from 50 megawatts to 35 megawatts,
16.25while maintaining an average price for energy in nominal dollars measured over the term
16.26of the power purchase agreement at or below $104 per megawatt-hour, exclusive of any
16.27price adjustments that may take effect subsequent to commission approval of the power
16.28purchase agreement, as amended. The commission shall also approve, as necessary, any
16.29subsequent assignment or sale of the power purchase agreement or ownership of the
16.30project to an entity owned or controlled, directly or indirectly, by two municipal utilities
16.31located north of Constitutional Route No. 8, as described in section 161.114, which
16.32currently own electric and steam generation facilities using coal as a fuel and which
16.33propose to retrofit their existing municipal electrical generating facilities to utilize biomass
16.34fuels in order to perform the power purchase agreement.
17.1(c) If the power purchase agreement described in paragraph (b) is assigned to an
17.2entity that is, or becomes, owned or controlled, directly or indirectly, by two municipal
17.3entities as described in paragraph (b), and the power purchase agreement meets the
17.4price requirements of paragraph (b), the commission shall approve any amendments to
17.5the power purchase agreement necessary to reflect the changes in project location and
17.6ownership and any other amendments made necessary by those changes. The commission
17.7shall also specifically find that:
17.8(1) the power purchase agreement complies with and fully satisfies the provisions of
17.9this section to the full extent of its 35-megawatt capacity;
17.10(2) all costs incurred by the public utility and all amounts to be paid by the public
17.11utility to the project owner under the terms of the power purchase agreement are fully
17.12recoverable pursuant to section 216B.1645;
17.13(3) subject to prudency review by the commission, the public utility may recover
17.14from its Minnesota retail customers the Minnesota jurisdictional portion of the amounts
17.15that may be incurred and paid by the public utility during the full term of the power
17.16purchase agreement; and
17.17(4) if the purchase power agreement meets the requirements of this subdivision,
17.18it is reasonable and in the public interest.
17.19(d) The commission shall specifically approve recovery by the public utility of
17.20any and all Minnesota jurisdictional costs incurred by the public utility to improve,
17.21construct, install, or upgrade transmission, distribution, or other electrical facilities owned
17.22by the public utility or other persons in order to permit interconnection of the retrofitted
17.23biomass-fueled generating facilities or to obtain transmission service for the energy
17.24provided by the facilities to the public utility pursuant to section 216B.1645, and shall
17.25disapprove any provision in the power purchase agreement that requires the developer
17.26or owner of the project to pay the jurisdictional costs or that permit the public utility to
17.27terminate the power purchase agreement as a result of the existence of those costs or the
17.28public utility's obligation to pay any or all of those costs.
17.29(e) Upon request by the project owner, the public utility shall agree to amend the
17.30power purchase agreement described in paragraph (b) and approved by the commission
17.31as required by paragraph (c). The amendment must be negotiated and executed within
17.3245 days of the effective date of this section and must apply to prices paid after January
17.331, 2009. The average price for energy in nominal dollars measured over the term of the
17.34power purchase agreement must not exceed $104 per megawatt hour by more than five
17.35percent. The public utility shall request approval of the amendment by the commission
17.36within 30 days of execution of the amended power purchase agreement. The amendment
18.1is not effective until approval by the commission. The commission shall act on the
18.2amendment within 90 days of submission of the request by the public utility. Upon
18.3approval of the amended power purchase agreement, the commission shall allow the
18.4public utility to recover the costs of the amended power purchase agreement, as provided
18.5in section 216B.1645.
18.6EFFECTIVE DATE.This section is effective the day following final enactment.

18.7    Sec. 19. Minnesota Statutes 2008, section 216B.2425, subdivision 3, is amended to
18.8read:
18.9    Subd. 3. Commission approval; order. (a) By June 1 of each even-numbered
18.10year, the commission shall adopt a state transmission project list and shall certify, certify
18.11as modified, or deny certification of the projects proposed under subdivision 2. The
18.12commission may only certify a project that is a high-voltage transmission line as defined
18.13in section 216B.2421, subdivision 2, that the commission finds is:
18.14(1) necessary to maintain or enhance the reliability of electric service to Minnesota
18.15consumers;
18.16(2) needed, applying the criteria in section 216B.243, subdivision 3; and
18.17(3) in the public interest, taking into account electric energy system needs and
18.18economic, environmental, and social interests affected by the project.
18.19(b) In its order adopting a statewide transmission project list, the commission shall
18.20summarize the present and future inadequacies of the transmission system identified in
18.21the utilities' transmission project reports, plans to address those inadequacies, and any
18.22barriers that may prevent those inadequacies from being addressed. Within ten days of
18.23issuing the order, the commission shall send a copy of the order to the chairs and ranking
18.24minority members of the senate and house of representatives committees with primary
18.25jurisdiction over energy policy.

18.26    Sec. 20. Minnesota Statutes 2008, section 216B.243, subdivision 8, is amended to read:
18.27    Subd. 8. Exemptions. This section does not apply to:
18.28(1) cogeneration or small power production facilities as defined in the Federal Power
18.29Act, United States Code, title 16, section 796, paragraph (17), subparagraph (A), and
18.30paragraph (18), subparagraph (A), and having a combined capacity at a single site of less
18.31than 80,000 kilowatts; plants or facilities for the production of ethanol or fuel alcohol; or
18.32any case where the commission has determined after being advised by the attorney general
18.33that its application has been preempted by federal law;
19.1(2) a high-voltage transmission line proposed primarily to distribute electricity to
19.2serve the demand of a single customer at a single location, unless the applicant opts to
19.3request that the commission determine need under this section or section 216B.2425;
19.4(3) the upgrade to a higher voltage of an existing transmission line that serves
19.5the demand of a single customer that primarily uses existing rights-of-way, unless the
19.6applicant opts to request that the commission determine need under this section or section
19.7216B.2425 ;
19.8(4) a high-voltage transmission line of one mile or less required to connect a new or
19.9upgraded substation to an existing, new, or upgraded high-voltage transmission line;
19.10(5) conversion of the fuel source of an existing electric generating plant to using
19.11natural gas;
19.12(6) the modification of an existing electric generating plant to increase efficiency,
19.13as long as the capacity of the plant is not increased more than ten percent or more than
19.14100 megawatts, whichever is greater; or
19.15(7) a large energy facility that:
19.16(i) generates electricity from wind energy conversion systems,;
19.17(ii) will serve retail customers in Minnesota,; and
19.18(iii) meets any of the following conditions:
19.19(A) is specifically intended to be used to meet the renewable energy objective under
19.20section 216B.1691 or;
19.21(B) addresses a resource need identified in a current commission-approved or
19.22commission-reviewed resource plan under section 216B.2422, and (iv); or
19.23(C) derives at least ten percent of the total nameplate capacity of the proposed project
19.24from one or more C-BED projects, as defined under section 216B.1612, subdivision 2,
19.25paragraph (f)
.

19.26    Sec. 21. Minnesota Statutes 2008, section 216B.243, subdivision 9, is amended to read:
19.27    Subd. 9. Renewable energy standard facilities. The requirements of this section
19.28do not apply to a wind energy conversion system or a solar electric generation facility that
19.29is intended to be used to meet or exceed the obligations of section 216B.1691; provided
19.30that, after notice and comment, the commission determines that the facility is a reasonable
19.31and prudent approach to meeting a utility's obligations under that section. When making
19.32this determination, the commission may consider:
19.33(1) the size of the facility relative to a utility's total need for renewable resources and;
19.34(2) alternative approaches for supplying the renewable energy to be supplied by
19.35the proposed facility, and must consider;
20.1(3) the facility's ability to promote economic development, as required under section
20.2216B.1691 , subdivision 9, maintain;
20.3(4) maintenance of electric system reliability and consider;
20.4(5) impacts on ratepayers, ; and
20.5(6) other criteria as that the commission may determine determines are relevant.

20.6    Sec. 22. Minnesota Statutes 2008, section 216C.052, subdivision 2, is amended to read:
20.7    Subd. 2. Administrative issues. (a) The commissioner may select the administrator.
20.8The administrator must have at least five years of experience working as a power systems
20.9engineer planner or transmission planner, or in a position dealing with power system
20.10reliability issues, and may not have been a party or a participant in a commission energy
20.11proceeding for at least one year prior to selection by the commissioner. The commissioner
20.12shall oversee and direct the work of the administrator, annually review the expenses of the
20.13administrator, and annually approve the budget of the administrator. The administrator
20.14may hire staff and may contract for technical expertise in performing duties when existing
20.15state resources are required for other state responsibilities or when special expertise is
20.16required. The salary of the administrator is governed by section 15A.0815, subdivision 2.
20.17    (b) Costs relating to a specific proceeding, analysis, or project are not general
20.18administrative costs. For purposes of this section, "energy utility" means public utilities,
20.19generation and transmission cooperative electric associations, and municipal power
20.20agencies providing natural gas or electric service in the state.
20.21    (c) The Department of Commerce shall pay:
20.22    (1) the general administrative costs of the administrator, not to exceed $1,000,000
20.23in a fiscal year, and shall assess energy utilities for those administrative costs. These
20.24costs must be consistent with the budget approved by the commissioner under paragraph
20.25(a). The department shall apportion the costs among all energy utilities in proportion to
20.26their respective gross operating revenues from sales of gas or electric service within
20.27the state during the last calendar year, and shall then render a bill to each utility on a
20.28regular basis; and
20.29    (2) costs relating to a specific proceeding analysis or project and shall render a bill to
20.30the specific energy utility or utilities participating in the proceeding, analysis, or project
20.31directly, either at the conclusion of a particular proceeding, analysis, or project, or from
20.32time to time during the course of the proceeding, analysis, or project.
20.33    (d) For purposes of administrative efficiency, the department shall assess energy
20.34utilities and issue bills in accordance with the billing and assessment procedures provided
20.35in section 216B.62, to the extent that these procedures do not conflict with this subdivision.
21.1The amount of the bills rendered by the department under paragraph (c) must be paid by
21.2the energy utility into an account in the special revenue fund in the state treasury within
21.330 days from the date of billing and is appropriated to the department for the purposes
21.4provided in this section. The commission shall approve or approve as modified a rate
21.5schedule providing for the automatic adjustment of charges to recover amounts paid by
21.6utilities under this section. All amounts assessed under this section are in addition to
21.7amounts appropriated to the commission and the department by other law.

21.8    Sec. 23. [216C.055] KEY ROLE OF SOLAR AND BIOMASS RESOURCES IN
21.9PRODUCING THERMAL ENERGY.
21.10The legislature recognizes that the use of solar energy and the combustion of grasses,
21.11agricultural wastes, trees, and other vegetation to produce thermal energy for heating
21.12commercial, industrial, and residential buildings and for industrial process can play a
21.13significant role in helping Minnesota meet its future energy needs and its greenhouse gas
21.14emissions reduction goals. The annual legislative proposals required to be submitted by
21.15the commissioners of commerce and the Pollution Control Agency under section 216H.07,
21.16subdivision 4, must include proposals regarding the use of the renewable energy sources
21.17described in this section if the commissioners determine that such policies are appropriate
21.18to achieve the state's greenhouse gas emissions reduction goals. No legal claim against
21.19any person is allowed under this section. The combustion of municipal solid waste or
21.20refuse-derived fuel to produce thermal energy is not addressed under this section. For
21.21purposes of this section, removal of woody biomass from publicly owned forests must be
21.22consistent with the principles of sustainable forest management.

21.23    Sec. 24. Minnesota Statutes 2008, section 216C.41, subdivision 5a, is amended to read:
21.24    Subd. 5a. Renewable development account. The Department of Commerce
21.25shall authorize payment of the renewable energy production incentive to wind energy
21.26conversion systems for 200 megawatts of nameplate capacity and that are eligible under
21.27this section or Laws 2005, chapter 40, to on-farm biogas recovery facilities, and to
21.28hydroelectric facilities. Payment of the incentive shall be made from the renewable energy
21.29development account as provided under section 116C.779, subdivision 2.

21.30    Sec. 25. Minnesota Statutes 2008, section 216F.01, subdivision 2, is amended to read:
21.31    Subd. 2. Large wind energy conversion system or LWECS. "Large wind energy
21.32conversion system" or "LWECS" means any combination of WECS with a combined
21.33nameplate capacity of 5,000 greater than 25,000 kilowatts or more.
22.1EFFECTIVE DATE.This section is effective the day following final enactment.

22.2    Sec. 26. Minnesota Statutes 2008, section 216F.01, subdivision 3, is amended to read:
22.3    Subd. 3. Small wind energy conversion system or SWECS. "Small wind energy
22.4conversion system" or "SWECS" means any combination of WECS with a combined
22.5nameplate capacity of less than 5,000 or equal to 25,000 kilowatts.
22.6EFFECTIVE DATE.This section is effective the day following final enactment.

22.7    Sec. 27. Minnesota Statutes 2008, section 216F.012, is amended to read:
22.8216F.012 SIZE ELECTION.
22.9    (a) A wind energy conversion system of less than 25 megawatts of nameplate
22.10capacity as determined under section 216F.011 is a small wind energy conversion system
22.11if, by July 1, 2009, the owner so elects in writing and submits a completed application for
22.12zoning approval and the written election to the county or counties in which the project is
22.13proposed to be located. The owner must notify the Public Utilities Commission of the
22.14election at the time the owner submits the election to the county.
22.15    (b) Notwithstanding paragraph (a), A wind energy conversion system with a
22.16nameplate capacity exceeding five megawatts that is proposed to be located wholly or
22.17partially within a wind access buffer adjacent to state lands that are part of the outdoor
22.18recreation system, as enumerated in section 86A.05, is a large wind energy conversion
22.19system. The Department of Natural Resources shall negotiate in good faith with a system
22.20owner regarding siting and may support the system owner in seeking a variance from the
22.21system setback requirements if it determines that a variance is in the public interest.
22.22    (c) (b) The Public Utilities Commission shall issue an annual report to the chairs
22.23and ranking minority members of the house of representatives and senate committees
22.24with primary jurisdiction over energy policy and natural resource policy regarding any
22.25variances applied for and not granted for systems subject to paragraph (b).
22.26EFFECTIVE DATE.This section is effective July 1, 2009.

22.27    Sec. 28. Minnesota Statutes 2008, section 216F.02, is amended to read:
22.28216F.02 EXEMPTIONS.
22.29(a) The requirements of chapter 216E do not apply to the siting of LWECS a WECS
22.30with a combined nameplate greater than 5,000 kilowatts that applies to the commission for
22.31a site permit, except for sections 216E.01; 216E.03, subdivision 7; 216E.08; 216E.11;
22.32216E.12 ; 216E.14; 216E.15; 216E.17; and 216E.18, subdivision 3, which do apply.
23.1(b) Any person may construct an SWECS with a combined nameplate capacity less
23.2than or equal to 5,000 kilowatts without complying with chapter 216E or this chapter.
23.3(c) Nothing in this chapter shall preclude precludes a local governmental unit from
23.4establishing requirements for the siting and construction of SWECS.
23.5EFFECTIVE DATE.This section is effective the day following final enactment.

23.6    Sec. 29. Minnesota Statutes 2008, section 216F.08, is amended to read:
23.7216F.08 PERMIT AUTHORITY; ASSUMPTION BY COUNTIES.
23.8    (a) A county board may, by resolution and upon written notice to the Public Utilities
23.9Commission, assume responsibility for processing applications for permits required under
23.10this chapter for LWECS with a combined nameplate capacity of less than 25,000 kilowatts
23.11SWECS. The responsibility for permit application processing, if assumed by a county,
23.12may be delegated by the county board to an appropriate county officer or employee.
23.13Processing by A county shall be done process applications in accordance with procedures
23.14and processes established under chapter 394.
23.15    (b) A county board that exercises its option under paragraph (a) may issue, deny,
23.16modify, impose conditions upon, or revoke permits pursuant to this section. The action of
23.17the a county board about with respect to a permit application is final, subject to appeal as
23.18provided in section 394.27.
23.19    (c) The commission shall, by order, establish general permit standards, including
23.20appropriate property line set-backs, governing site permits for LWECS under this section
23.21and SWECS. The order must consider existing and historic commission standards for
23.22wind permits issued by the commission. The general permit standards shall may apply
23.23to permits issued by counties and must apply to permits issued by the commission for
23.24LWECS with a combined nameplate capacity of less than 25,000 kilowatts and SWECS.
23.25The general permit standards must establish a setback for a SWECS from a road or
23.26property line equal to 1.1 times the maximum tip height of a rotor blade measured from
23.27ground level when the blade is in a vertical position. Counties are encouraged to consider
23.28an identical setback standard in permits they issue. The commission or a county may grant
23.29a variance from a general permit standard if the variance is found to be in the public
23.30interest. Permit standards established by a county under this section supersede general
23.31permit standards established by the commission.
23.32    (d) Upon request by a county, the commission and the commissioner of commerce
23.33shall provide technical assistance to a county with respect to the processing of LWECS
23.34SWECS site permit applications.
24.1EFFECTIVE DATE.This section is effective the day following final enactment.

24.2    Sec. 30. MOUNTAIN IRON ECONOMIC DEVELOPMENT AUTHORITY;
24.3WIND ENERGY PROJECT.
24.4(a) The Mountain Iron Economic Development Authority may form or become a
24.5member of a limited liability company organized under Minnesota Statutes, chapter 322B,
24.6for the purpose of developing a community-based energy development project pursuant
24.7to Minnesota Statutes, section 216B.1612. A limited liability company formed or joined
24.8under this section is subject to the open meeting requirements established in Minnesota
24.9Statutes, chapter 13D. A project authorized by this section may not sell, transmit, or
24.10distribute the electrical energy at retail or provide for end use of the electricity to an
24.11off-site facility of the economic development corporation or the limited liability company.
24.12Nothing in this section modifies the exclusive service territories or exclusive right to serve
24.13as provided in Minnesota Statutes, sections 216B.37 to 216B.43.
24.14(b) The authority may acquire a leasehold interest in property outside its corporate
24.15boundaries for the purpose of developing a community-based energy development project
24.16as provided in Minnesota Statutes, section 216B.1612.
24.17EFFECTIVE DATE.This section is effective the day after the city of Mountain
24.18Iron and its chief clerical officer comply with Minnesota Statutes, section 645.021,
24.19subdivisions 2 and 3.

24.20    Sec. 31. SOLAR CITIES REPORT.
24.21The cities of Minneapolis and St. Paul, designated as solar cities under the federal
24.22Department of Energy's Solar America Initiative, shall, by October 1, 2009, and October
24.231, 2010, submit a report to the cochairs of the Legislative Energy Committee containing
24.24strategies to accelerate the rate of solar thermal and solar electric energy installations
24.25in all building types throughout the state. The report must, at a minimum, address the
24.26following issues:
24.27(1) identify legal, administrative, financial, and operational barriers to increasing the
24.28installation of solar energy, and measures to overcome them;
24.29(2) identify financial and regulatory mechanisms that stimulate the development of
24.30solar energy;
24.31(3) identify ways to link solar energy development with energy conservation and
24.32energy efficiency strategies and programs;
24.33(4) how efforts and initiatives undertaken by St. Paul and Minneapolis can be
24.34integrated with activities undertaken in other parts of the state; and
25.1(5) how projected trends in solar technologies and the costs of solar generation can
25.2be integrated into the state's strategy to advance adoption of solar energy.
25.3In preparing these reports, the cities may confer with any person whose experience
25.4and expertise will assist in preparing the reports, including utilities, businesses providing
25.5solar energy installation services, nonprofit organizations promoting solar energy, and
25.6others.

25.7    Sec. 32. NATURAL GAS UTILITIES; INTERIM ENERGY SAVINGS PLAN.
25.8(a) The commissioner of commerce may approve an energy conservation
25.9improvement plan under Minnesota Statutes, section 216B.241, subdivision 1c, paragraph
25.10(d), that:
25.11(1) is submitted to the commissioner in calendar year 2009 by a utility that provides
25.12natural gas service at retail;
25.13(2) governs the conservation improvements to be undertaken by the utility over the
25.14next three-year time period; and
25.15(3) is accompanied by a study that specifies how the utility may:
25.16(i) average savings of at least 0.75 percent over the three years following submission
25.17of the plan;
25.18(ii) meet and exceed the minimum energy savings goal of one percent of gross
25.19annual retail sales within five years of submission of the plan; and
25.20(iii) achieve average annual savings of at least one percent over the nine years
25.21following submission of the plan.
25.22(b) The plan must include projections of the total amount spent by the utility to
25.23achieve energy savings each year and the cost per unit of energy saved.
25.24(c) Nothing in this section precludes the commissioner from requiring additional
25.25energy conservation improvement activities and programs beyond those proposed by a
25.26utility in its proposed plan so long as those additional activities and programs meet the
25.27requirements of Minnesota Statutes, section 216B.241. The commissioner shall require
25.28all reasonable actions by a utility that will increase the likelihood of the utility's meeting
25.29and exceeding the minimum one percent energy savings goal and the 1.5 percent goal
25.30as soon as reasonably feasible.

25.31    Sec. 33. CLEAN ENERGY RESOURCE TEAMS; APPROPRIATION.
25.32The utility subject to Minnesota Statutes, section 116C.779, shall transfer $563,000
25.33in fiscal year 2010 and $563,000 in fiscal year 2011 from the renewable development
25.34account established in Minnesota Statutes, section 116C.779, to the Department of
26.1Commerce on a schedule to be determined by the commissioner of commerce. The funds
26.2must be deposited in the special revenue fund and are appropriated to the commissioner
26.3for the purposes of this section.
26.4$563,000 in fiscal year 2010 and $563,000 in fiscal year 2011 are for continued
26.5funding of community energy technical assistance and outreach on renewable energy and
26.6energy efficiency, as described in Minnesota Statutes, section 216C.385. Of this amount,
26.7$113,000 each year is for technical assistance in the metropolitan area.

26.8    Sec. 34. REPEALER.
26.9Laws 2007, chapter 3, section 3, is repealed.