3rd Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to energy; enacting the Minnesota Energy 1.3 Security and Reliability Act; requiring an energy 1.4 security blueprint and a state transmission plan; 1.5 establishing position of reliability administrator; 1.6 providing for essential energy infrastructure; 1.7 modifying provisions for siting, routing, and 1.8 determining the need for large electric power 1.9 facilities; regulating conservation expenditures by 1.10 energy utilities and eliminating state pre-approval of 1.11 conservation plans by public utilities; encouraging 1.12 regulatory flexibility in supplying and obtaining 1.13 energy; regulating interconnection of distributed 1.14 utility resources; providing for safety and service 1.15 standards from distribution utilities; clarifying the 1.16 state cold weather disconnection requirements; 1.17 authorizing municipal utilities, municipal power 1.18 agencies, cooperative utilities, and investor-owned 1.19 utilities to form joint ventures to provide utility 1.20 services; eliminating the requirement for individual 1.21 utility resource plans; requiring reports; making 1.22 technical, conforming, and clarifying changes; 1.23 appropriating money; amending Minnesota Statutes 2000, 1.24 sections 16B.32, subdivision 2; 116C.52, subdivisions 1.25 4, 10; 116C.53, subdivisions 2, 3; 116C.57, 1.26 subdivisions 1, 2, 4, by adding subdivisions; 116C.58; 1.27 116C.59, subdivisions 1, 4; 116C.60; 116C.61, 1.28 subdivisions 1, 3; 116C.62; 116C.64; 116C.645; 1.29 116C.65; 116C.66; 116C.69; 216B.095; 216B.097, 1.30 subdivision 1; 216B.16, subdivision 15; 216B.1645; 1.31 216B.241, subdivisions 1, 1a, 1b, 2; 216B.2421, 1.32 subdivision 2; 216B.243, subdivisions 3, 4, 8; 1.33 216B.62, subdivision 5; 216C.051, subdivisions 6, 9; 1.34 216C.41, subdivisions 3, 5, by adding a subdivision; 1.35 proposing coding for new law in Minnesota Statutes, 1.36 chapters 16B; 116C; 216B; 216C; 452; repealing 1.37 Minnesota Statutes 2000, sections 116C.55, 1.38 subdivisions 2, 3; 116C.57, subdivisions 3, 5, 5a; 1.39 116C.67; 216B.2421, subdivision 3. 1.40 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.41 ARTICLE 1 1.42 PUBLIC BUILDING ENERGY CONSERVATION 2.1 Section 1. Minnesota Statutes 2000, section 16B.32, 2.2 subdivision 2, is amended to read: 2.3 Subd. 2. [ENERGY CONSERVATION GOALS
; EFFICIENCY2.4 PROGRAM.] (a)The commissioner of administration in consultation 2.5 with the department of public servicecommerce, in cooperation 2.6 with one or more public utilities or comprehensive energy 2.7 services providers, may conduct a shared-savings program 2.8 involving energy conservation expenditures on state-owned and 2.9 wholly state-leased buildings. The public utility or energy 2.10 services provider shall contract with appropriate state agencies 2.11 to implement energy efficiency improvements in the selected 2.12 buildings. A contract must require the public utility or energy 2.13 services provider to include all energy efficiency improvements 2.14 in selected buildings that are calculated to achieve a cost 2.15 payback within ten years. The contract must require that the 2.16 public utility or energy services provider be repaid solely from 2.17 energy cost savings and only to the extent of energy cost 2.18 savings. Repayments must be interest-free. The goal of the 2.19 program in this paragraph is to demonstrate that through 2.20 effective energy conservation the total energy consumption per 2.21 square foot of state-owned and wholly state-leased buildings 2.22 could be reducedexceed existing energy code by at least 2530 2.23 percent from consumption in the base year of 1990. All agencies 2.24 participating in the programmust report to the commissioner of 2.25 administration their monthly energy usage, building schedules, 2.26 inventory of energy-consuming equipment, and other information 2.27 as needed by the commissioner to manage and evaluate the program. 2.28 (b) The commissioner may exclude from the program of2.29 paragraph (a) a building in which energy conservation measures2.30 are carried out. "Energy conservation measures" means measures2.31 that are applied to a state building that improve energy2.32 efficiency and have a simple return of investment in ten years2.33 or within the remaining period of a lease, whichever time is2.34 shorter, and involves energy conservation, conservation2.35 facilities, renewable energy sources, improvements in operations2.36 and maintenance efficiencies, or retrofit activities.3.1 (c) This subdivision expires January 1, 2001.3.2 Sec. 2. [16B.325] [SUSTAINABLE BUILDING GUIDELINES.] 3.3 The department of administration and the department of 3.4 commerce, with the assistance of other agencies, shall develop 3.5 sustainable building design guidelines for all new state 3.6 buildings by January 15, 2003. The primary objectives of these 3.7 guidelines are to ensure that all new state buildings initially 3.8 exceed existing energy code, as established in Minnesota Rules, 3.9 chapter 7676, by at least 30 percent. The guidelines must focus 3.10 on achieving the lowest possible lifetime cost for new buildings 3.11 and allow for changes in the guidelines that encourage continual 3.12 energy conservation improvements in new buildings. The design 3.13 guidelines must establish sustainability guidelines that include 3.14 air quality and lighting standards and that create and maintain 3.15 a healthy environment and facilitate productivity improvements; 3.16 specify ways to reduce material costs; and must consider the 3.17 long-term operating costs of the building, including the use of 3.18 renewable energy sources and distributed electric energy 3.19 generation that uses a renewable source or natural gas or a fuel 3.20 that is as clean or cleaner than natural gas. In developing the 3.21 guidelines, the departments shall use an open process, including 3.22 providing the opportunity for public comment. The guidelines 3.23 established under this section are mandatory for all new 3.24 buildings receiving funding from the bond proceeds fund after 3.25 January 1, 2004. 3.26 Sec. 3. [BENCHMARKS FOR EXISTING PUBLIC BUILDINGS.] 3.27 The department of administration shall maintain information 3.28 on energy usage in all public buildings for the purpose of 3.29 establishing energy efficiency benchmarks and energy 3.30 conservation goals. The department shall report preliminary 3.31 energy conservation goals to the chairs of the senate 3.32 telecommunications, energy and utilities committee and the house 3.33 regulated industries committee by January 15, 2002. The 3.34 department shall develop a comprehensive plan by January 15, 3.35 2003, to maximize electrical and thermal energy efficiency in 3.36 existing public buildings through conservation measures having a 4.1 simple payback within ten to 15 years. The plan must detail the 4.2 steps necessary to implement the conservation measures and 4.3 include the projected costs of these measures. The owner or 4.4 operator of a public building subject to this section shall 4.5 provide information to the department of administration 4.6 necessary to accomplish the purposes of this section. 4.7 ARTICLE 2 4.8 JOINT VENTURES 4.9 Section 1. [452.25] [JOINT VENTURES BY UTILITIES.] 4.10 Subdivision 1. [APPLICABILITY.] This section applies to 4.11 all home rule charter and statutory cities, except as provided 4.12 in section 2. 4.13 Subd. 2. [DEFINITIONS.] For purposes of this section: 4.14 (a) "City" means a statutory or home rule charter city, 4.15 section 410.015 to the contrary notwithstanding. 4.16 (b) "Cooperative association" means a cooperative 4.17 association organized under chapter 308A. 4.18 (c) "Governing body" means (1) the city council in a city 4.19 that operates a municipal utility, or (2) a board, commission, 4.20 or body empowered by law, city charter, or ordinance or 4.21 resolution of the city council to control and operate the 4.22 municipal utility. 4.23 (d) "Investor-owned utility" means an entity that provides 4.24 utility services to the public under chapter 216B and that is 4.25 owned by private persons. 4.26 (e) "Municipal power agency" means an organization created 4.27 under sections 453.51 to 453.62. 4.28 (f) "Municipal utility" means a utility owned, operated, or 4.29 controlled by a city to provide utility services. 4.30 (g) "Public utility" or "utility" means a provider of 4.31 electric or water facilities or services or an entity engaged in 4.32 other similar or related operations authorized by law or charter. 4.33 Subd. 3. [AUTHORITY.] (a) Upon the approval of its elected 4.34 utilities commission or, if there be none, its city council, a 4.35 municipal utility may enter into a joint venture with other 4.36 municipal utilities, municipal power agencies, cooperative 5.1 associations, or investor-owned utilities to provide utility 5.2 services. Retail electric utility services provided by a joint 5.3 venture must be within the boundaries of each utility's 5.4 exclusive electric service territory as shown on the map of 5.5 service territories maintained by the department of commerce. 5.6 The terms and conditions of the joint venture are subject to 5.7 ratification by the governing bodies of the respective utilities 5.8 and may include the formation of a corporate or other separate 5.9 legal entity with an administrative and governance structure 5.10 independent of the respective utilities. 5.11 (b) A corporate or other separate legal entity, if formed: 5.12 (1) has the authority and legal capacity and, in the 5.13 exercise of the joint venture, the powers, privileges, 5.14 responsibilities, and duties authorized by this section; 5.15 (2) is subject to the laws and rules applicable to the 5.16 organization, internal governance, and activities of the entity; 5.17 (3) in connection with its property and affairs and in 5.18 connection with property within its control, may exercise any 5.19 and all powers that may be exercised by a natural person or a 5.20 private corporation or other private legal entity in connection 5.21 with similar property and affairs; and 5.22 (4) a joint venture that does not include an investor-owned 5.23 utility may elect to be deemed a municipal utility or a 5.24 cooperative association for purposes of chapter 216B or other 5.25 federal or state law regulating utility operations; and 5.26 (5) for a joint venture that includes an investor-owned 5.27 utility, the commission has authority over the activities, 5.28 services and rates of the joint venture, and may exercise that 5.29 authority, to the same extent the commission has authority over 5.30 the activities, services and rates of the investor-owned utility 5.31 itself. 5.32 (c) Any corporation, if formed, must comply with section 5.33 465.719, subdivisions 9, 10, 11, 12, 13, and 14. The term 5.34 "political subdivision," as it is used in section 465.719, shall 5.35 refer to the city council of a city. 5.36 Subd. 4. [RETAIL CUSTOMERS.] Unless the joint venture's 6.1 retail electric rates, as defined in section 216B.02, 6.2 subdivision 5, of a joint venture that does not include an 6.3 investor-owned utility, are approved by the governing body of 6.4 each municipal utility or municipal power agency and the board 6.5 of directors of each cooperative association that is party to 6.6 the joint venture, the retail electric customers of the joint 6.7 venture, if their number be more than 25, may elect to become 6.8 subject to electric rate regulation by the public utilities 6.9 commission as provided in chapter 216B. The election is subject 6.10 to and must be carried out according to the procedures in 6.11 section 216B.026 and, for these purposes, each retail electric 6.12 customer of the joint venture is deemed a member or stockholder 6.13 as referred to in section 216B.026. 6.14 Subd. 5. [POWERS.] (a) A joint venture under this section 6.15 has the powers, privileges, responsibilities, and duties of the 6.16 separate utilities entering into the joint venture as the joint 6.17 venture agreement may provide, including the powers under 6.18 paragraph (b), except that: 6.19 (1) with respect to retail electric utility services, a 6.20 joint venture shall not enlarge or extend the service territory 6.21 served by the joint venture by virtue of the authority granted 6.22 in sections 216B.44, 216B.45, and 216B.47; 6.23 (2) a joint venture may extend service to an existing 6.24 connected load of 2,000 kilowatts or more, pursuant to section 6.25 216B.42, when the load is outside of the assigned service area 6.26 of the joint venture, or of the electric utilities party to the 6.27 joint venture, only if the load is already being served by one 6.28 of the electric utilities party to the joint venture; and 6.29 (3) a privately owned utility, as defined in section 6.30 216B.02, may extend service to an existing connected load of 6.31 2,000 kilowatts or more, pursuant to section 216B.42, when the 6.32 load is located within the assigned service territory of the 6.33 joint venture, or of the electric utilities party to the joint 6.34 venture, only if the load is already being served by that 6.35 privately owned utility. 6.36 The limitations of clauses (1) to (3) do not apply if written 7.1 consent to the action is obtained from the electric utility 7.2 assigned to and serving the affected service territory or 7.3 connected load. 7.4 (b) Joint venture powers include, but are not limited to, 7.5 the authority to: 7.6 (1) finance, own, acquire, construct, and operate 7.7 facilities necessary to provide utility services to retail 7.8 customers of the joint venture, including generation, 7.9 transmission, and distribution facilities, and like facilities 7.10 used in other utility services; 7.11 (2) combine assigned service territories, in whole or in 7.12 part, upon notice to, hearing by, and approval of the public 7.13 utilities commission; 7.14 (3) serve customers in the utilities' service territories 7.15 or in the combined service territory; 7.16 (4) combine, share, or employ administrative, managerial, 7.17 operational, or other staff if combining or sharing will not 7.18 degrade safety, reliability, or customer service standards; 7.19 (5) provide for joint administrative functions, such as 7.20 meter reading and billings; 7.21 (6) purchase or sell utility services at wholesale for 7.22 resale to customers; 7.23 (7) provide conservation programs, other utility programs, 7.24 and public interest programs, such as cold weather shut-off 7.25 protection and conservation spending programs, as required by 7.26 law and rule; and 7.27 (8) participate as the parties deem necessary in providing 7.28 utility services with other municipal utilities, cooperative 7.29 utilities, investor-owned utilities, or other entities, public 7.30 or private. 7.31 (c) Notwithstanding any contrary provision within this 7.32 section, a joint venture formed under this section may engage in 7.33 wholesale utility services unless the municipal utility, 7.34 municipal power agency, cooperative association, or 7.35 investor-owned utility party to the joint venture is prohibited 7.36 under current law from conducting that activity; but, in any 8.1 case, the joint venture may provide wholesale services to a 8.2 municipal utility, a cooperative association, or an 8.3 investor-owned utility that is party to the joint venture. 8.4 (d) This subdivision does not limit the authority of a 8.5 joint venture to exercise rights of eminent domain for other 8.6 utility purposes to the same extent as is permitted of those 8.7 utilities party to the joint venture. 8.8 Subd. 6. [CONSTRUCTION.] (a) The powers conferred by this 8.9 section are in addition to the powers conferred by other law or 8.10 charter. A joint venture under this section, and a municipal 8.11 utility with respect to any joint venture under this section, 8.12 have the powers necessary to effect the intent and purpose of 8.13 this section, including, but not limited to, the expenditure of 8.14 public funds and the transfer of real or personal property in 8.15 accordance with the terms and conditions of the joint venture 8.16 and the joint venture agreement. This section is complete in 8.17 itself with respect to the formation and operation of a joint 8.18 venture under this section and with respect to a municipal 8.19 utility, a cooperative association, or an investor-owned utility 8.20 party to a joint venture related to their creation of and 8.21 dealings with the joint venture, without regard to other laws or 8.22 city charter provisions that do not specifically address or 8.23 refer to this section or a joint venture created under this 8.24 section. 8.25 (b) This section must not be construed to supersede or 8.26 modify: 8.27 (1) the power of a city council conferred by charter to 8.28 overrule or override any action of a governing body other than 8.29 the actions of the joint venture; 8.30 (2) chapter 216B; 8.31 (3) any referendum requirements applicable to the creation 8.32 of a new electric utility by a municipality under section 8.33 216B.46 or 216B.465; or 8.34 (4) any powers, privileges, or authority or any duties or 8.35 obligations of a municipal utility, municipal power agency, or 8.36 cooperative association acting as a separate legal entity 9.1 without reference to a joint venture created under this section. 9.2 Sec. 2. [EXCEPTION.] 9.3 Laws 1996, chapter 300, section 1, as amended by Laws 1997, 9.4 chapter 232, section 1, shall govern joint ventures created 9.5 under it and those joint ventures are not governed by section 1. 9.6 Sec. 3. [EFFECTIVE DATE.] 9.7 Sections 1 and 2 are effective the day following final 9.8 enactment. 9.9 ARTICLE 3 9.10 MISCELLANEOUS 9.11 Section 1. [216B.1611] [INTERCONNECTION OF ON-SITE 9.12 DISTRIBUTED GENERATION.] 9.13 Subdivision 1. [PURPOSE.] The purpose of this section is 9.14 to: (1) establish the terms and conditions that govern the 9.15 interconnection and parallel operation of on-site distributed 9.16 generation; (2) to provide cost savings and reliability benefits 9.17 to customers; (3) to establish technical requirements that will 9.18 promote the safe and reliable parallel operation of on-site 9.19 distributed generation resources; (4) to enhance both the 9.20 reliability of electric service and economic efficiency in the 9.21 production and consumption of electricity; and (5) to promote 9.22 the use of distributed resources in order to provide electric 9.23 system benefits during periods of capacity constraints. 9.24 Subd. 2. [DISTRIBUTED GENERATION; GENERIC PROCEEDING.] (a) 9.25 The commission shall initiate a proceeding within 30 days of the 9.26 effective date of this section, to establish, by order, generic 9.27 standards for utility tariffs for the interconnection and 9.28 parallel operation of distributed generation fueled by natural 9.29 gas or a renewable fuel, or another similarly clean fuel or 9.30 combination of fuels of no more than ten megawatts of 9.31 interconnected capacity. At a minimum, these tariff standards 9.32 must: 9.33 (1) to the extent possible, be consistent with industry and 9.34 other federal and state operational and safety standards; 9.35 (2) provide for the low-cost, safe, and standardized 9.36 interconnection of facilities; 10.1 (3) take into account differing system requirements and 10.2 hardware, as well as the overall demand load requirements of 10.3 individual utilities; 10.4 (4) allow for reasonable terms and conditions, consistent 10.5 with the cost and operating characteristics of the various 10.6 technologies, so that a utility can reasonably be assured of the 10.7 reliable, safe, and efficient operation of the interconnected 10.8 equipment; and 10.9 (5) establish: (i) a standard interconnection agreement 10.10 that sets forth the contractual conditions under which a company 10.11 and a customer agree that one or more facilities may be 10.12 interconnected with the company's utility system; and (ii) a 10.13 standard application for interconnection and parallel operation 10.14 with the utility system. 10.15 (b) The commission may develop financial incentives based 10.16 on a public utility's performance in encouraging residential and 10.17 small business customers to participate in on-site generation. 10.18 Subd. 3. [DISTRIBUTED GENERATION TARIFF.] Within 90 days 10.19 of the issuance of an order under subdivision 2: 10.20 (1) each public utility providing electric service at 10.21 retail shall file a distributed generation tariff consistent 10.22 with that order, for commission approval or approval with 10.23 modification; and 10.24 (2) each municipal utility and cooperative electric 10.25 association shall adopt a distributed generation tariff that 10.26 addresses the issues included in the commission's order. 10.27 Subd. 4. [REPORTING REQUIREMENTS.] (a) Each electric 10.28 utility shall maintain records concerning applications received 10.29 for interconnection and parallel operation of distributed 10.30 generation. The records must include the date each application 10.31 is received, documents generated in the course of processing 10.32 each application, correspondence regarding each application, and 10.33 the final disposition of each application. 10.34 (b) Every electric utility shall file with the commissioner 10.35 a distributed generation interconnection report for the 10.36 preceding calendar year that identifies each distributed 11.1 generation facility interconnected with the utility's 11.2 distribution system. The report must list the new distributed 11.3 generation facilities interconnected with the system since the 11.4 previous year's report, any distributed generation facilities no 11.5 longer interconnected with the utility's system since the 11.6 previous report, the capacity of each facility, and the feeder 11.7 or other point on the company's utility system where the 11.8 facility is connected. The annual report must also identify all 11.9 applications for interconnection received during the previous 11.10 one-year period, and the disposition of the applications. 11.11 Sec. 2. [216B.79] [PREVENTATIVE MAINTENANCE.] 11.12 The commission may order public utilities to make adequate 11.13 infrastructure investments and undertake sufficient preventative 11.14 maintenance with regard to generation, transmission, and 11.15 distribution facilities. 11.16 Sec. 3. [ALTERNATIVE AND RENEWABLE ENERGY SOURCE 11.17 DEVELOPMENT.] 11.18 The legislative electric energy task force shall evaluate 11.19 options and priorities related to energy source development of 11.20 resources derived from agricultural production and to energy 11.21 options available in rural parts of the state. These energy 11.22 sources include, but are not limited to: 11.23 (1) alternative diesel engine fuels derived from soybean 11.24 and other agricultural plant oils or animal fats; 11.25 (2) ethanol derived from grains or other agricultural 11.26 products or by-products; 11.27 (3) methane or other combustible gases derived from the 11.28 processing of plant or animal wastes; 11.29 (4) biomass fuels such as short-rotation woody or fibrous 11.30 agricultural crops produced for conversion to useful energy; 11.31 (5) use of corn and corn by-products as a fuel for electric 11.32 generation, including for cogeneration facilities; and 11.33 (6) further development of the solar, wind, and biomass 11.34 energy potential in the state. 11.35 ARTICLE 4 11.36 CONSUMER PROTECTION 12.1 Section 1. Minnesota Statutes 2000, section 216B.095, is 12.2 amended to read: 12.3 216B.095 [DISCONNECTION DURING COLD WEATHER.] 12.4 The commission shall amend its rules governing 12.5 disconnection of residential utility customers who are unable to 12.6 pay for utility service during cold weather to include the 12.7 following: 12.8 (1) coverage of customers whose household income is less 12.9 than 185 percent of the federal poverty level50 percent of the 12.10 state median income; 12.11 (2) a requirement that a customer who pays the utility at 12.12 least ten percent of the customer's income or the full amount of 12.13 the utility bill, whichever is less, in a cold weather month 12.14 cannot be disconnected during that month. The customer's income 12.15 means the actual monthly income of the customer or the average 12.16 monthly income of the customer computed on an annual calendar 12.17 year, whichever is less, and does not include any amount 12.18 received for energy assistance; 12.19 (3) that the ten percent figure in clause (2) must be 12.20 prorated between energy providers proportionate to each 12.21 provider's share of the customer's total energy costs where the 12.22 customer receives service from more than one provider; 12.23 (4) that a customer's household income does not include any12.24 amount received for energy assistance;12.25 (5)verification of income by the local energy assistance 12.26 provider or the utility, unless the customer is automatically 12.27 eligible for protection against disconnection as a recipient of 12.28 any form of public assistance, including energy assistance, that 12.29 uses income eligibility in an amount at or below the income 12.30 eligibility in clause (1); and12.31 (6)(5) a requirement that the customer receive , from the12.32 local energy assistance provider or other entity, budget12.33 counseling and referralreferrals to energy assistance, 12.34 weatherization, conservation, or other programs likely to reduce 12.35 the customer's consumption ofenergy bills; and 12.36 (6) a requirement that customers who have demonstrated an 13.1 inability to pay on forms provided for that purpose by the 13.2 utility, and who make reasonably timely payments to the utility 13.3 under a payment plan that considers the financial resources of 13.4 the household, cannot be disconnected from utility service from 13.5 October 15 through April 15. A customer who is receiving energy 13.6 assistance is deemed to have demonstrated an inability to pay. 13.7 For the purpose of clause (2), the "customer's income" means the13.8 actual monthly income of the customer except for a customer who13.9 is normally employed only on a seasonal basis and whose annual13.10 income is over 135 percent of the federal poverty level, in13.11 which case the customer's income is the average monthly income13.12 of the customer computed on an annual calendar year basis.13.13 Sec. 2. Minnesota Statutes 2000, section 216B.097, 13.14 subdivision 1, is amended to read: 13.15 Subdivision 1. [APPLICATION; NOTICE TO RESIDENTIAL 13.16 CUSTOMER.] (a) A municipal utility or a cooperative electric 13.17 association must not disconnect the utility service of a 13.18 residential customer during the period between October 15 and 13.19 April 15 if the disconnection affects the primary heat source 13.20 for the residential unit when the following conditions are met: 13.21 (1) the disconnection would occur during the period between13.22 October 15 and April 15;13.23 (2)the customer has declared inability to pay on forms 13.24 provided by the utility. For the purposes of this clause, a 13.25 customer that is receiving energy assistance is deemed to have 13.26 demonstrated an inability to pay; 13.27 (3)(2) the household income of the customer is less than 13.28 185 percent of the federal poverty level, as documented by the13.29 customer to the utility; and50 percent of the state median 13.30 income; 13.31 (3) verification of income may be conducted by the local 13.32 energy assistance provider or the utility, unless the customer 13.33 is automatically eligible for protection against disconnection 13.34 as a recipient of any form of public assistance, including 13.35 energy assistance that uses income eligibility in an amount at 13.36 or below the income eligibility in clause (2); 14.1 (4) the customer'sa customer whose account is current for 14.2 the billing period immediately prior to October 15 or the14.3 customer has enteredwho, at any time, enters into a payment 14.4 schedule that considers the financial resources of the household 14.5 and is reasonably current with payments under the schedule; and 14.6 (5) the customer receives referrals to energy assistance 14.7 programs, weatherization, conservation, or other programs likely 14.8 to reduce the customer's energy bills. 14.9 (b) A municipal utility or a cooperative electric 14.10 association must, between August 15 and October 15 of each year, 14.11 notify all residential customers of the provisions of this 14.12 section. 14.13 Sec. 3. [216B.098] [RESIDENTIAL CUSTOMER PROTECTIONS.] 14.14 Subdivision 1. [APPLICABILITY.] The provisions of this 14.15 section apply to residential customers of public utilities, 14.16 municipal utilities, and cooperative electric associations. 14.17 Each municipal utility and cooperative electric association may 14.18 establish terms and conditions for the plans and agreements 14.19 required under subdivisions 2 and 3. 14.20 Subd. 2. [BUDGET BILLING PLANS.] A utility shall offer a 14.21 customer a budget billing plan for payment of charges for 14.22 service, including adequate notice to customers prior to 14.23 changing budget payment amounts. Municipal utilities having 14.24 3,000 or fewer customers are exempt from this requirement. 14.25 Municipal utilities having more than 3,000 customers shall 14.26 implement this requirement within two years of the effective 14.27 date of this chapter. 14.28 Subd. 3. [PAYMENT AGREEMENTS.] A utility shall offer a 14.29 payment agreement for the payment of arrears. 14.30 Subd. 4. [UNDERCHARGES.] A utility shall offer a payment 14.31 agreement to customers who have been undercharged if no culpable 14.32 conduct by the customer or resident of the customer's household 14.33 caused the undercharge. The agreement must cover a period equal 14.34 to the time over which the undercharge occurred or a different 14.35 time period that is mutually agreeable to the customer and the 14.36 utility. No interest or delinquency fee may be charged under 15.1 this agreement. 15.2 Subd. 5. [MEDICALLY NECESSARY EQUIPMENT.] A utility shall 15.3 reconnect or continue service to a customer's residence where a 15.4 medical emergency exists or where medical equipment requiring 15.5 electricity is necessary to sustain life is in use, provided 15.6 that the utility receives from a medical doctor written 15.7 certification, or initial certification by telephone and written 15.8 certification within five business days, that failure to 15.9 reconnect or continue service will impair or threaten the health 15.10 or safety of a resident of the customer's household. The 15.11 customer must enter into a payment agreement. 15.12 Subd. 6. [COMMISSION AUTHORITY.] In addition to any other 15.13 authority, the commission has the authority to resolve customer 15.14 complaints against a public utility, as defined in section 15.15 216B.02, subdivision 4, whether or not the complaint involves a 15.16 violation of this chapter. The commission may delegate this 15.17 authority to commission staff as it deems appropriate. 15.18 Sec. 4. Minnesota Statutes 2000, section 216B.16, 15.19 subdivision 15, is amended to read: 15.20 Subd. 15. [LOW-INCOME RATEPROGRAMS ; REPORT.] (a) The 15.21 commission may consider ability to pay as a factor in setting 15.22 utility rates and may establish programs for low-income 15.23 residential ratepayers in order to ensure affordable, reliable, 15.24 and continuous service to low-income utility customers. The15.25 commission shall order a pilot program for at least one15.26 utility. In ordering pilot programs, the commission shall15.27 consider the following:15.28 (1) the potential for low-income programs to provide15.29 savings to the utility for all collection costs including but15.30 not limited to: costs of disconnecting and reconnecting15.31 residential ratepayers' service, all activities related to the15.32 utilities' attempt to collect past due bills, utility working15.33 capital costs, and any other administrative costs related to15.34 inability to pay programs and initiatives;15.35 (2) the potential for leveraging federal low-income energy15.36 dollars to the state; and16.1 (3) the impact of energy costs as a percentage of the total16.2 income of a low-income residential customer.16.3 (b) In determining the structure of the pilot utility16.4 program, the commission shall:16.5 (1) consult with advocates for and representatives of16.6 low-income utility customers, administrators of energy16.7 assistance and conservation programs, and utility16.8 representatives;16.9 (2) coordinate eligibility for the program with the state16.10 and federal energy assistance program and low-income residential16.11 energy programs, including weatherization programs; and16.12 (3) evaluate comprehensive low-income programs offered by16.13 utilities in other states.The purpose of the low-income 16.14 programs is to lower the percentage of income that low-income 16.15 households devote to energy bills, to increase customer 16.16 payments, and to lower the utility costs associated with 16.17 customer account collection activities. In ordering low-income 16.18 programs, the commission may require public utilities to file 16.19 program evaluations, including the coordination of other 16.20 available low-income bill payment and conservation resources and 16.21 the effect of the program on: 16.22 (1) reducing the percentage of income that participating 16.23 households devote to energy bills; 16.24 (2) service disconnections; and 16.25 (3) customer payment behavior, utility collection costs, 16.26 arrearages, and bad debt. 16.27 (c) The commission shall implement at least one pilot16.28 project by January 1, 1995, and shall allow a utility required16.29 to implement a pilot project to recover the net costs of the16.30 project in the utility's rates.16.31 (d) The commission, in conjunction with the commissioner of16.32 the department of public service and the commissioner of16.33 economic security, shall review low-income rate programs and16.34 shall report to the legislature by January 1, 1998. The report16.35 must include:16.36 (1) the increase in federal energy assistance money17.1 leveraged by the state as a result of this program;17.2 (2) the effect of the program on low-income customer's17.3 ability to pay energy costs;17.4 (3) the effect of the program on utility customer bad debt17.5 and arrearages;17.6 (4) the effect of the program on the costs and numbers of17.7 utility disconnections and reconnections and other costs17.8 incurred by the utility in association with inability to pay17.9 programs;17.10 (5) the ability of the utility to recover the costs of the17.11 low-income program without a general rate change;17.12 (6) how other ratepayers have been affected by this17.13 program;17.14 (7) recommendations for continuing, eliminating, or17.15 expanding the low-income pilot program; and17.16 (8) how general revenue funds may be utilized in17.17 conjunction with low-income programs.17.18 ARTICLE 5 17.19 INCENTIVE PAYMENTS 17.20 Section 1. Minnesota Statutes 2000, section 216C.41, 17.21 subdivision 3, is amended to read: 17.22 Subd. 3. [ELIGIBILITY WINDOW.] Payments may be made under 17.23 this section only for electricity generated: 17.24 (1) from a qualified hydroelectric facility that is 17.25 operational and generating electricity before December 31, 17.26 20012002; or 17.27 (2) from a qualified wind energy conversion facility that 17.28 is operational and generating electricity before January 1, 2005. 17.29 Sec. 2. Minnesota Statutes 2000, section 216C.41, 17.30 subdivision 5, is amended to read: 17.31 Subd. 5. [AMOUNT OF PAYMENT.] (a) An incentive payment is 17.32 based on the number of kilowatt hours of electricity generated. 17.33 The amount of the payment is 1.5 cents per kilowatt hour. For 17.34 electricity generated by qualified wind energy conversion 17.35 facilities, the incentive payment under this section is limited 17.36 to no more than 100 megawatts of nameplate capacity. During any 18.1 period in which qualifying claims for incentive payments exceed 18.2 100 megawatts of nameplate capacity, the payments must be made 18.3 to producers in the order in which the production capacity was 18.4 brought into production. 18.5 (b) Beginning January 1, 2002, the total size of a wind 18.6 energy conversion system under this section must be determined 18.7 according to this paragraph. Unless the systems are 18.8 interconnected with different distribution systems, the 18.9 nameplate capacity of one wind energy conversion system must be 18.10 combined with the nameplate capacity of any other wind energy 18.11 conversion system that is: 18.12 (1) located within five miles of the wind energy conversion 18.13 system; 18.14 (2) constructed within the same calendar year as the wind 18.15 energy conversion system; and 18.16 (3) under common ownership. 18.17 In the case of a dispute, the commissioner of commerce shall 18.18 determine the total size of the system, and shall draw all 18.19 reasonable inferences in favor of combining the systems. 18.20 (c) In making a determination under paragraph (b), the 18.21 commissioner of commerce may determine that two wind energy 18.22 conversion systems are under common ownership when the 18.23 underlying ownership structure contains similar persons or 18.24 entities, even if the ownership shares differ between the two 18.25 systems. Wind energy conversion systems are not under common 18.26 ownership solely because the same person or entity provided 18.27 equity financing for the systems. 18.28 Sec. 3. Minnesota Statutes 2000, section 216C.41, is 18.29 amended by adding a subdivision to read: 18.30 Subd. 6. [OWNERSHIP; FINANCING; CURE.] (a) For the 18.31 purposes of subdivision 1, paragraph (c), clause (2), a wind 18.32 energy conversion facility qualifies if it is owned at least 51 18.33 percent by one or more of any combination of the entities listed 18.34 in that clause. 18.35 (b) A subsequent owner of a qualified facility may continue 18.36 to receive the incentive payment for the duration of the 19.1 original payment period if the subsequent owner qualifies for 19.2 the incentive under subdivision 1. 19.3 (c) Nothing in this section may be construed to deny 19.4 incentive payment to an otherwise qualified facility that has 19.5 obtained debt or equity financing for construction or operation 19.6 as long as the ownership requirements of subdivision 1 and this 19.7 subdivision are met. If, during the incentive payment period 19.8 for a qualified facility, the owner of the facility is in 19.9 default of a lending agreement and the lender takes possession 19.10 of and operates the facility and makes reasonable efforts to 19.11 transfer ownership of the facility to an entity other than the 19.12 lender, the lender may continue to receive the incentive payment 19.13 for electricity generated and sold by the facility for a period 19.14 not to exceed 18 months. A lender who takes possession of a 19.15 facility shall notify the commissioner immediately on taking 19.16 possession and, at least quarterly, document efforts to transfer 19.17 ownership of the facility. 19.18 (d) If, during the incentive payment period, a qualified 19.19 facility loses the right to receive the incentive because of 19.20 changes in ownership, the facility may regain the right to 19.21 receive the incentive upon cure of the ownership structure that 19.22 resulted in the loss of eligibility and may reapply for the 19.23 incentive, but in no case may the payment period be extended 19.24 beyond the original ten-year limit. 19.25 (e) A subsequent or requalifying owner under paragraph (b) 19.26 or (d) retains the facility's original priority order for 19.27 incentive payments as long as the ownership structure 19.28 requalifies within two years from the date the facility became 19.29 unqualified or two years from the date a lender takes possession. 19.30 Sec. 4. [EFFECTIVE DATE.] 19.31 This article is effective the day following final enactment. 19.32 ARTICLE 6 19.33 DISTRIBUTION RELIABILITY 19.34 Section 1. [216B.81] [STANDARDS FOR DISTRIBUTION 19.35 UTILITIES.] 19.36 Subdivision 1. [STANDARDS.] (a) The commission and each 20.1 cooperative electric association and municipal utility shall 20.2 adopt standards for safety, reliability, and service quality for 20.3 distribution utilities. Standards for cooperative electric 20.4 associations and municipal utilities should be as consistent as 20.5 possible with the commission standards. 20.6 (b) Reliability standards must be based on the system 20.7 average interruption frequency index, system average 20.8 interruption duration index, and customer average interruption 20.9 duration index measurement indices. Service quality standards 20.10 must specify, if technically and administratively feasible: 20.11 (1) average call center response time; 20.12 (2) customer disconnection rate; 20.13 (3) meter-reading frequency; 20.14 (4) complaint resolution response time; 20.15 (5) service extension request response time; 20.16 (6) recording of service and circuit interrupter data; 20.17 (7) summary reporting; 20.18 (8) historical reliability performance reporting; 20.19 (9) notices of interruptions of bulk power supply 20.20 facilities and other interruptions of power; and 20.21 (10) customer complaints. 20.22 (c) Minimum performance standards developed under this 20.23 section must treat similarly situated distribution systems 20.24 similarly and recognize differing characteristics of system 20.25 design and hardware. 20.26 (d) Electric distribution utilities shall comply with all 20.27 applicable governmental and industry standards required for the 20.28 safety, design, construction, and operation of electric 20.29 distribution facilities, including section 326.243. 20.30 Subd. 2. [DEFINITIONS.] For the purpose of this section, 20.31 the terms defined in this subdivision have the meanings given 20.32 them. 20.33 (a) The "system average interruption frequency index" is 20.34 the average number of interruptions per customer per year. It 20.35 is determined by dividing the total annual number of customer 20.36 interruptions by the average number of customers served during 21.1 the year. 21.2 (b) The "system average interruption duration index" is the 21.3 average customer-minutes of interruption per customer. It is 21.4 determined by dividing the annual sum of customer-minutes of 21.5 interruption by the average number of customers served during 21.6 the year. 21.7 (c) The "customer average interruption duration index" is 21.8 the average customer-minutes of interruption per customer 21.9 interruption. It approximates the average length of time 21.10 required to complete service restoration. It is determined by 21.11 dividing the annual sum of all customer-minutes of interruption 21.12 durations by the annual number of customer interruptions. 21.13 Sec. 2. [COST BENEFIT ANALYSIS.] 21.14 The commissioner of commerce shall provide an analysis of 21.15 the costs and benefits to consumers and utilities of the 21.16 provisions of section 216B.81, including any recommended changes 21.17 to those provisions, to the chairs of the house of 21.18 representatives and senate policy and finance committees with 21.19 jurisdiction over electric utility issues by February 1, 2003. 21.20 Sec. 3. [EFFECTIVE DATE.] 21.21 Section 1 is effective July 1, 2001. Section 2 is 21.22 effective the day following final enactment. 21.23 ARTICLE 7 21.24 SITING AND ROUTING OF 21.25 POWER PLANTS AND TRANSMISSION LINES 21.26 Section 1. Minnesota Statutes 2000, section 116C.52, 21.27 subdivision 4, is amended to read: 21.28 Subd. 4. [HIGH VOLTAGE TRANSMISSION LINE.] "High voltage 21.29 transmission line" means a conductor of electric energy and 21.30 associated facilities designed for and capable of operation at a 21.31 nominal voltage of 200100 kilovolts or more , except that the21.32 board, by rule, may exempt lines pursuant to section 116C.57,21.33 subdivision 5. 21.34 Sec. 2. Minnesota Statutes 2000, section 116C.52, 21.35 subdivision 10, is amended to read: 21.36 Subd. 10. [UTILITY.] "Utility" shall mean any entity 22.1 engaged or intending to engage in this state in the generation, 22.2 transmission or distribution of electric energy including, but 22.3 not limited to, a private investor owned utility, cooperatively 22.4 owned utility, and a public or municipally owned utility. 22.5 Sec. 3. Minnesota Statutes 2000, section 116C.53, 22.6 subdivision 2, is amended to read: 22.7 Subd. 2. [JURISDICTION.] The board is hereby given the 22.8 authority to provide for site and route selection for large 22.9 electric power facilities. The board shall issue permits for 22.10 large electric power facilities in a timely fashion. When the 22.11 public utilities commission has determined the need for the 22.12 project under section 216B.243 or 216B.2425, questions of need, 22.13 including size, type, and timing; alternative system 22.14 configurations; and voltage are not within the board's siting 22.15 and routing authority and must not be included in the scope of 22.16 environmental review conducted under sections 116C.51 to 116C.69. 22.17 Sec. 4. Minnesota Statutes 2000, section 116C.53, 22.18 subdivision 3, is amended to read: 22.19 Subd. 3. [INTERSTATE ROUTES.] If a route is proposed in 22.20 two or more states, the board shall attempt to reach agreement 22.21 with affected states on the entry and exit points prior 22.22 to authorizing the construction of thedesignating a route. The 22.23 board, in discharge of its duties pursuant to sections 116C.51 22.24 to 116C.69 may make joint investigations, hold joint hearings 22.25 within or without the state, and issue joint or concurrent 22.26 orders in conjunction or concurrence with any official or agency 22.27 of any state or of the United States. The board may negotiate 22.28 and enter into any agreements or compacts with agencies of other 22.29 states, pursuant to any consent of Congress, for cooperative 22.30 efforts in certifying the construction, operation, and 22.31 maintenance of large electric power facilities in accord with 22.32 the purposes of sections 116C.51 to 116C.69 and for the 22.33 enforcement of the respective state laws regarding such 22.34 facilities. 22.35 Sec. 5. Minnesota Statutes 2000, section 116C.57, 22.36 subdivision 1, is amended to read: 23.1 Subdivision 1. [ DESIGNATION OF SITES SUITABLE FOR SPECIFIC23.2 FACILITIES; REPORTSSITE PERMIT.] A utility must apply to the23.3 board in a form and manner prescribed by the board for23.4 designation of a specific site for a specific size and type of23.5 facility. The application shall contain at least two proposed23.6 sites. In the event a utility proposes a site not included in23.7 the board's inventory of study areas, the utility shall specify23.8 the reasons for the proposal and shall make an evaluation of the23.9 proposed site based upon the planning policies, criteria and23.10 standards specified in the inventory. Pursuant to sections23.11 116C.57 to 116C.60, the board shall study and evaluate any site23.12 proposed by a utility and any other site the board deems23.13 necessary which was proposed in a manner consistent with rules23.14 adopted by the board concerning the form, content, and23.15 timeliness of proposals for alternate sites. No site23.16 designation shall be made in violation of the site selection23.17 standards established in section 116C.55. The board shall23.18 indicate the reasons for any refusal and indicate changes in23.19 size or type of facility necessary to allow site designation.23.20 Within a year after the board's acceptance of a utility's23.21 application, the board shall decide in accordance with the23.22 criteria specified in section 116C.55, subdivision 2, the23.23 responsibilities, procedures and considerations specified in23.24 section 116C.57, subdivision 4, and the considerations in23.25 chapter 116D which proposed site is to be designated. The board23.26 may extend for just cause the time limitation for its decision23.27 for a period not to exceed six months. When the board23.28 designates a site, it shall issue a certificate of site23.29 compatibility to the utility with any appropriate conditions.23.30 The board shall publish a notice of its decision in the State23.31 Register within 30 days of site designation. No large electric23.32 power generating plant shall be constructed except on a site23.33 designated by the board.No person may construct a large 23.34 electric generating plant without a site permit from the board. 23.35 A large electric generating plant may be constructed only on a 23.36 site approved by the board. The board must incorporate into one 24.1 proceeding the route selection for a high voltage transmission 24.2 line that is directly associated with and necessary to 24.3 interconnect the large electric generating plant to the 24.4 transmission system and whose need is certified as part of the 24.5 generating plant project by the public utilities commission. 24.6 Sec. 6. Minnesota Statutes 2000, section 116C.57, 24.7 subdivision 2, is amended to read: 24.8 Subd. 2. [ DESIGNATION OF ROUTES; PROCEDUREROUTE 24.9 PERMIT.] A utility shall apply to the board in a form and manner24.10 prescribed by the board for a permit for the construction of a24.11 high voltage transmission line. The application shall contain24.12 at least two proposed routes. Pursuant to sections 116C.57 to24.13 116C.60, the board shall study, and evaluate the type, design,24.14 routing, right-of-way preparation and facility construction of24.15 any route proposed in a utility's application and any other24.16 route the board deems necessary which was proposed in a manner24.17 consistent with rules adopted by the board concerning the form,24.18 content, and timeliness of proposals for alternate routes24.19 provided, however, that the board shall identify the alternative24.20 routes prior to the commencement of public hearings thereon24.21 pursuant to section 116C.58. Within one year after the board's24.22 acceptance of a utility's application, the board shall decide in24.23 accordance with the criteria and standards specified in section24.24 116C.55, subdivision 2, and the considerations specified in24.25 section 116C.57, subdivision 4, which proposed route is to be24.26 designated. The board may extend for just cause the time24.27 limitation for its decision for a period not to exceed 90 days.24.28 When the board designates a route, it shall issue a permit for24.29 the construction of a high voltage transmission line specifying24.30 the type, design, routing, right-of-way preparation and facility24.31 construction it deems necessary and with any other appropriate24.32 conditions. The board may order the construction of high24.33 voltage transmission line facilities which are capable of24.34 expansion in transmission capacity through multiple circuiting24.35 or design modifications. The board shall publish a notice of24.36 its decision in the state register within 30 days of issuance of25.1 the permit. No high voltage transmission line shall be25.2 constructed except on a route designated by the board, unless it25.3 was exempted pursuant to subdivision 5.No person may construct 25.4 a high voltage transmission line without a route permit from the 25.5 board. A high voltage transmission line may be constructed only 25.6 along a route approved by the board. 25.7 Sec. 7. Minnesota Statutes 2000, section 116C.57, is 25.8 amended by adding a subdivision to read: 25.9 Subd. 2a. [APPLICATION.] Any person seeking to construct a 25.10 large electric power generating plant or a high voltage 25.11 transmission line must apply to the board for a site or route 25.12 permit. The application shall contain such information as the 25.13 board may require. The applicant shall propose at least two 25.14 sites for a large electric power generating plant and two routes 25.15 for a high voltage transmission line. The chair of the board 25.16 shall determine whether an application is complete and advise 25.17 the applicant of any deficiencies within ten days of receipt. 25.18 An application is not incomplete if information not in the 25.19 application can be obtained from the applicant during the first 25.20 phase of the process and that information is not essential for 25.21 notice and initial public meetings. 25.22 Sec. 8. Minnesota Statutes 2000, section 116C.57, is 25.23 amended by adding a subdivision to read: 25.24 Subd. 2b. [NOTICE OF APPLICATION.] Within 15 days after 25.25 submission of an application to the board, the applicant shall 25.26 publish notice of the application in a legal newspaper of 25.27 general circulation in each county in which the site or route is 25.28 proposed and send a copy of the application by certified mail to 25.29 any regional development commission, county, incorporated 25.30 municipality, and township in which any part of the site or 25.31 route is proposed. Within the same 15 days, the applicant shall 25.32 also send a notice of the submission of the application and 25.33 description of the proposed project to each owner whose property 25.34 is on or adjacent to any of the proposed sites for the power 25.35 plant or along any of the proposed routes for the transmission 25.36 line. The notice shall identify a location where a copy of the 26.1 application can be reviewed. For the purpose of giving mailed 26.2 notice under this subdivision, owners shall be those shown on 26.3 the records of the county auditor or, in any county where tax 26.4 statements are mailed by the county treasurer, on the records of 26.5 the county treasurer; but other appropriate records may be used 26.6 for this purpose. The failure to give mailed notice to a 26.7 property owner, or defects in the notice, shall not invalidate 26.8 the proceedings, provided a bona fide attempt to comply with 26.9 this subdivision has been made. Within the same 15 days, the 26.10 applicant shall also send the same notice of the submission of 26.11 the application and description of the proposed project to those 26.12 persons who have requested to be placed on a list maintained by 26.13 the board for receiving notice of proposed large electric 26.14 generating power plants and high voltage transmission lines. 26.15 Sec. 9. Minnesota Statutes 2000, section 116C.57, is 26.16 amended by adding a subdivision to read: 26.17 Subd. 2c. [ENVIRONMENTAL REVIEW.] The board shall prepare 26.18 an environmental impact statement on each proposed large 26.19 electric generating plant or high voltage transmission line for 26.20 which a complete application has been submitted. For any 26.21 project that has obtained a certificate of need from the public 26.22 utilities commission, the board shall not consider whether or 26.23 not the project is needed. No other state environmental review 26.24 documents shall be required. The board shall study and evaluate 26.25 any site or route proposed by an applicant and any other site or 26.26 route the board deems necessary that was proposed in a manner 26.27 consistent with rules adopted by the board concerning the form, 26.28 content, and timeliness of proposals for alternate sites or 26.29 routes. 26.30 Sec. 10. Minnesota Statutes 2000, section 116C.57, is 26.31 amended by adding a subdivision to read: 26.32 Subd. 2d. [PUBLIC HEARING.] The board shall hold a public 26.33 hearing on an application for a site permit for a large electric 26.34 power generating plant or a route permit for a high voltage 26.35 transmission line. All hearings held for designating a site or 26.36 route shall be conducted by an administrative law judge from the 27.1 office of administrative hearings pursuant to the contested case 27.2 procedures of chapter 14. Notice of the hearing shall be given 27.3 by the board at least ten days in advance but no earlier than 45 27.4 days prior to the commencement of the hearing. Notice shall be 27.5 by publication in a legal newspaper of general circulation in 27.6 the county in which the public hearing is to be held and by 27.7 certified mail to chief executives of the regional development 27.8 commissions, counties, organized towns, townships, and the 27.9 incorporated municipalities in which a site or route is 27.10 proposed. Any person may appear at the hearings and offer 27.11 testimony and exhibits without the necessity of intervening as a 27.12 formal party to the proceedings. The administrative law judge 27.13 may allow any person to ask questions of other witnesses. The 27.14 administrative law judge shall hold a portion of the hearing in 27.15 the area where the power plant or transmission line is proposed 27.16 to be located. 27.17 Sec. 11. Minnesota Statutes 2000, section 116C.57, 27.18 subdivision 4, is amended to read: 27.19 Subd. 4. [CONSIDERATIONS IN DESIGNATING SITES AND ROUTES.] 27.20 The board's site and route permit determinations must be guided 27.21 by the state's goals to conserve resources, minimize 27.22 environmental impacts, minimize human settlement and other land 27.23 use conflicts, and ensure the state's electric energy security 27.24 through efficient, cost-effective power supply and electric 27.25 transmission infrastructure. To facilitate the study, research, 27.26 evaluation and designation of sites and routes, the board shall 27.27 be guided by, but not limited to, the 27.28 following responsibilities, procedures, andconsiderations: 27.29 (1) Evaluation of research and investigations relating to 27.30 the effects on land, water and air resources of large electric 27.31 power generating plants and high voltage transmission line27.32 routeslines and the effects of water and air discharges and 27.33 electric and magnetic fields resulting from such facilities on 27.34 public health and welfare, vegetation, animals, materials and 27.35 aesthetic values, including base line studies, predictive 27.36 modeling, and monitoring of the water and air mass at proposed28.1 and operating sites and routes,evaluation of new or improved 28.2 methods for minimizing adverse impacts of water and air 28.3 discharges and other matters pertaining to the effects of power 28.4 plants on the water and air environment; 28.5 (2) Environmental evaluation of sites and routes proposed 28.6 for future development and expansion and their relationship to 28.7 the land, water, air and human resources of the state; 28.8 (3) Evaluation of the effects of new electric power 28.9 generation and transmission technologies and systems related to 28.10 power plants designed to minimize adverse environmental effects; 28.11 (4) Evaluation of the potential for beneficial uses of 28.12 waste energy from proposed large electric power generating 28.13 plants; 28.14 (5) Analysis of the direct and indirect economic impact of 28.15 proposed sites and routes including, but not limited to, 28.16 productive agricultural land lost or impaired; 28.17 (6) Evaluation of adverse direct and indirect environmental 28.18 effects whichthat cannot be avoided should the proposed site 28.19 and route be accepted; 28.20 (7) Evaluation of alternatives to the applicant's proposed 28.21 site or route proposed pursuant to subdivisions 1 and 2; 28.22 (8) Evaluation of potential routes whichthat would use or 28.23 parallel existing railroad and highway rights-of-way; 28.24 (9) Evaluation of governmental survey lines and other 28.25 natural division lines of agricultural land so as to minimize 28.26 interference with agricultural operations; 28.27 (10) Evaluation of the future needs for additional high 28.28 voltage transmission lines in the same general area as any 28.29 proposed route, and the advisability of ordering the 28.30 construction of structures capable of expansion in transmission 28.31 capacity through multiple circuiting or design modifications; 28.32 (11) Evaluation of irreversible and irretrievable 28.33 commitments of resources should the proposed site or route be 28.34 approved; and 28.35 (12) WhereWhen appropriate, consideration of problems 28.36 raised by other state and federal agencies and local entities. 29.1 (13)If the board's rules are substantially similar to 29.2 existing rules andregulations of a federal agency to which the 29.3 utility in the state is subject, the federal rules and29.4 regulations shallmust be applied by the board. 29.5 (14)No site or route shall be designated which violates 29.6 state agency rules. 29.7 Sec. 12. Minnesota Statutes 2000, section 116C.57, is 29.8 amended by adding a subdivision to read: 29.9 Subd. 7. [TIMING.] The board shall make a final decision 29.10 on an application within 60 days after receipt of the report of 29.11 the administrative law judge. A final decision on the request 29.12 for a site permit or route permit shall be made within one year 29.13 after the chair's determination that an application is 29.14 complete. The board may extend this time limit for up to three 29.15 months for just cause or upon agreement of the applicant. 29.16 Sec. 13. Minnesota Statutes 2000, section 116C.57, is 29.17 amended by adding a subdivision to read: 29.18 Subd. 8. [FINAL DECISION.] (a) No site permit shall be 29.19 issued in violation of the site selection standards and criteria 29.20 established in this section and in rules adopted by the board. 29.21 When the board designates a site, it shall issue a site permit 29.22 to the applicant with any appropriate conditions. The board 29.23 shall publish a notice of its decision in the State Register 29.24 within 30 days of issuance of the site permit. 29.25 (b) No route permit shall be issued in violation of the 29.26 route selection standards and criteria established in this 29.27 section and in rules adopted by the board. When the board 29.28 designates a route, it shall issue a permit for the construction 29.29 of a high voltage transmission line specifying the design, 29.30 routing, right-of-way preparation, and facility construction it 29.31 deems necessary, and with any other appropriate conditions. The 29.32 board may order the construction of high voltage transmission 29.33 line facilities that are capable of expansion in transmission 29.34 capacity through multiple circuiting or design modifications. 29.35 The board shall publish a notice of its decision in the State 29.36 Register within 30 days of issuance of the permit. 30.1 Sec. 14. [116C.575] [ALTERNATIVE REVIEW OF APPLICATIONS.] 30.2 Subdivision 1. [ALTERNATIVE REVIEW.] An applicant who 30.3 seeks a site permit or route permit for one of the projects 30.4 identified in this section shall have the option of following 30.5 the procedures in this section rather than the procedures in 30.6 section 116C.57. The applicant shall notify the chair at the 30.7 time the application is submitted which procedure the applicant 30.8 chooses to follow. 30.9 Subd. 2. [APPLICABLE PROJECTS.] The requirements and 30.10 procedures in this section apply to the following projects: 30.11 (1) large electric power generating plants with a capacity 30.12 of less than 80 megawatts; 30.13 (2) large electric power generating plants that are fueled 30.14 by natural gas; 30.15 (3) high voltage transmission lines of between 100 and 200 30.16 kilovolts; 30.17 (4) high voltage transmission lines in excess of 200 30.18 kilovolts and less than five miles in length in Minnesota; 30.19 (5) high voltage transmission lines in excess of 200 30.20 kilovolts if at least 80 percent of the distance of the line in 30.21 Minnesota will be located along existing high voltage 30.22 transmission line right-of-way; 30.23 (6) a high voltage transmission line service extension to a 30.24 single customer between 200 and 300 kilovolts and less than ten 30.25 miles in length; and 30.26 (7) a high voltage transmission line rerouting to serve the 30.27 demand of a single customer when the rerouted line will be 30.28 located at least 80 percent on property owned or controlled by 30.29 the customer or the owner of the transmission line. 30.30 Subd. 3. [APPLICATION.] The applicant for a site or route 30.31 permit for any of the projects listed in subdivision 2 who 30.32 chooses to follow these procedures shall submit information as 30.33 the board may require, but the applicant shall not be required 30.34 to propose a second site or route for the project. The 30.35 applicant shall identify in the application any other sites or 30.36 routes that were rejected by the applicant and the board may 31.1 identify additional sites or routes to consider during the 31.2 processing of the application. The chair of the board shall 31.3 determine whether an application is complete and advise the 31.4 applicant of any deficiencies. 31.5 Subd. 4. [NOTICE OF APPLICATION.] Upon submission of an 31.6 application under this section, the applicant shall provide the 31.7 same notice as required by section 116C.57, subdivision 2b. 31.8 Subd. 5. [ENVIRONMENTAL REVIEW.] For the projects 31.9 identified in subdivision 2 and following these procedures, the 31.10 board shall prepare an environmental assessment. The 31.11 environmental assessment shall contain information on the human 31.12 and environmental impacts of the proposed project and other 31.13 sites or routes identified by the board and shall address 31.14 mitigating measures for all of the sites or routes considered. 31.15 The environmental assessment shall be the only state 31.16 environmental review document required to be prepared on the 31.17 project. 31.18 Subd. 6. [PUBLIC HEARING.] The board shall hold a public 31.19 hearing in the area where the facility is proposed to be 31.20 located. The board shall give notice of the public hearing in 31.21 the same manner as notice under section 116C.57, subdivision 31.22 2d. The board shall conduct the public hearing under procedures 31.23 established by the board. The applicant shall be present at the 31.24 hearing to present evidence and to answer questions. The board 31.25 shall provide opportunity at the public hearing for any person 31.26 to present comments and to ask questions of the applicant and 31.27 board staff. The board shall also afford interested persons an 31.28 opportunity to submit written comments into the record. 31.29 Subd. 7. [TIMING.] The board shall make a final decision 31.30 on an application within 60 days after completion of the public 31.31 hearing. A final decision on the request for a site permit or 31.32 route permit under this section shall be made within six months 31.33 after the chair's determination that an application is 31.34 complete. The board may extend this time limit for up to three 31.35 months for just cause or upon agreement of the applicant. 31.36 Subd. 8. [CONSIDERATIONS.] The considerations in section 32.1 116C.57, subdivision 4, shall apply to any projects subject to 32.2 this section. 32.3 Subd. 9. [FINAL DECISION.] (a) No site permit shall be 32.4 issued in violation of the site selection standards and criteria 32.5 established in this section and in rules adopted by the board. 32.6 When the board designates a site, it shall issue a site permit 32.7 to the applicant with any appropriate conditions. The board 32.8 shall publish a notice of its decision in the State Register 32.9 within 30 days of issuance of the site permit. 32.10 (b) No route designation shall be made in violation of the 32.11 route selection standards and criteria established in this 32.12 section and in rules adopted by the board. When the board 32.13 designates a route, it shall issue a permit for the construction 32.14 of a high voltage transmission line specifying the design, 32.15 routing, right-of-way preparation, and facility construction it 32.16 deems necessary and with any other appropriate conditions. The 32.17 board may order the construction of high voltage transmission 32.18 line facilities that are capable of expansion in transmission 32.19 capacity through multiple circuiting or design modifications. 32.20 The board shall publish a notice of its decision in the State 32.21 Register within 30 days of issuance of the permit. 32.22 Sec. 15. [116C.576] [LOCAL REVIEW OF APPLICATIONS.] 32.23 Subdivision 1. [LOCAL REVIEW.] (a) Notwithstanding the 32.24 requirements of sections 116C.57 and 116C.575, an applicant who 32.25 seeks a site or route permit for one of the projects identified 32.26 in this section shall have the option of applying to those local 32.27 units of government that have jurisdiction over the site or 32.28 route for approval to build the project. If local approval is 32.29 granted, a site or route permit is not required from the board. 32.30 If the applicant files an application with the board, the 32.31 applicant shall be deemed to have waived its right to seek local 32.32 approval of the project. 32.33 (b) A local unit of government with jurisdiction over a 32.34 project identified in this section to whom an applicant has 32.35 applied for approval to build the project may request the board 32.36 to assume jurisdiction and make a decision on a site or route 33.1 permit under the applicable provisions of sections 116C.52 to 33.2 116C.69. A local unit of government must file the request with 33.3 the board within 60 days after an application for the project 33.4 has been filed with any one local unit of government. If one of 33.5 the local units of government with jurisdiction over the project 33.6 requests the board to assume jurisdiction, jurisdiction over the 33.7 project transfers to the board. If the local units of 33.8 government maintain jurisdiction over the project, the board 33.9 shall select the appropriate local unit of government to be the 33.10 responsible governmental unit to conduct environmental review of 33.11 the project. 33.12 Subd. 2. [APPLICABLE PROJECTS.] Applicants may seek 33.13 approval from local units of government to construct the 33.14 following projects: 33.15 (1) large electric power generating plants with a capacity 33.16 of less than 80 megawatts; 33.17 (2) large electric power generating plants of any size that 33.18 burn natural gas and are intended to be a peaking plant; 33.19 (3) high voltage transmission lines of between 100 and 200 33.20 kilovolts; 33.21 (4) substations with a voltage designed for and capable of 33.22 operation at a nominal voltage of 100 kilovolts or more; 33.23 (5) a high voltage transmission line service extension to a 33.24 single customer between 200 and 300 kilovolts and less than ten 33.25 miles in length; and 33.26 (6) a high voltage transmission line rerouting to serve the 33.27 demand of a single customer when the rerouted line will be 33.28 located at least 80 percent on property owned or controlled by 33.29 the customer or the owner of the transmission line. 33.30 Subd. 3. [NOTICE OF APPLICATION.] Within ten days of 33.31 submission of an application to a local unit of government for 33.32 approval of an eligible project, the applicant shall notify the 33.33 board that the applicant has elected to seek local approval of 33.34 the proposed project. 33.35 Sec. 16. [116C.577] [EMERGENCY PERMIT.] 33.36 (a) Any utility whose electric power system requires the 34.1 immediate construction of a large electric power generating 34.2 plant or high voltage transmission line due to a major 34.3 unforeseen event may apply to the board for an emergency permit 34.4 after providing notice in writing to the public utilities 34.5 commission of the major unforeseen event and the need for 34.6 immediate construction. The permit must be issued in a timely 34.7 manner, no later than 195 days after the board's acceptance of 34.8 the application and upon a finding by the board that (1) a 34.9 demonstrable emergency exists, (2) the emergency requires 34.10 immediate construction, and (3) adherence to the procedures and 34.11 time schedules specified in section 116C.57 would jeopardize the 34.12 utility's electric power system or would jeopardize the 34.13 utility's ability to meet the electric needs of its customers in 34.14 an orderly and timely manner. 34.15 (b) A public hearing to determine if an emergency exists 34.16 must be held within 90 days of the application. The board, 34.17 after notice and hearing, shall adopt rules specifying the 34.18 criteria for emergency certification. 34.19 Sec. 17. Minnesota Statutes 2000, section 116C.58, is 34.20 amended to read: 34.21 116C.58 [ PUBLIC HEARINGS; NOTICEANNUAL HEARING.] 34.22 The board shall hold an annual public hearing at a time and 34.23 place prescribed by rule in order to afford interested persons 34.24 an opportunity to be heard regarding its inventory of study34.25 areas and any other aspects of the board's activities and duties34.26 or policies specified in sections 116C.51 to 116C.69. The board34.27 shall hold at least one public hearing in each county where a34.28 site or route is being considered for designation pursuant to34.29 section 116C.57. Notice and agenda of public hearings and34.30 public meetings of the board held in each county shall be given34.31 by the board at least ten days in advance but no earlier than 4534.32 days prior to such hearings or meetings. Notice shall be by34.33 publication in a legal newspaper of general circulation in the34.34 county in which the public hearing or public meeting is to be34.35 held and by certified mailed notice to chief executives of the34.36 regional development commissions, counties, organized towns and35.1 the incorporated municipalities in which a site or route is35.2 proposed. All hearings held for designating a site or route or35.3 for exempting a route shall be conducted by an administrative35.4 law judge from the office of administrative hearings pursuant to35.5 the contested case procedures of chapter 14. Any person may35.6 appear at the hearings and present testimony and exhibits and35.7 may question witnesses without the necessity of intervening as a35.8 formal party to the proceedingsany matters relating to the 35.9 siting of large electric generating power plants and routing of 35.10 high voltage transmission lines. At the meeting, the board 35.11 shall advise the public of the permits issued by the board in 35.12 the past year. The board shall provide at least ten days but no 35.13 more than 45 days' notice of the annual meeting by mailing 35.14 notice to those persons who have requested notice and by 35.15 publication in the EQB Monitor. 35.16 Sec. 18. Minnesota Statutes 2000, section 116C.59, 35.17 subdivision 1, is amended to read: 35.18 Subdivision 1. [ADVISORY TASK FORCE.] The board may 35.19 appoint one or more advisory task forces to assist it in 35.20 carrying out its duties. Task forces appointed to evaluate 35.21 sites or routes considered for designation shall be comprised of 35.22 as many persons as may be designated by the board, but at least 35.23 one representative from each of the following: Regional 35.24 development commissions, counties and municipal corporations and 35.25 one town board member from each county in which a site or route 35.26 is proposed to be located. No officer, agent, or employee of a 35.27 utility shall serve on an advisory task force. Reimbursement 35.28 for expenses incurred shall be made pursuant to the rules 35.29 governing state employees. The task forces expire as provided 35.30 in section 15.059, subdivision 6. At the time the task force is 35.31 appointed, the board shall specify the charge to the task 35.32 force. The task force shall expire upon completion of its 35.33 charge, upon designation by the board of alternative sites or 35.34 routes to be included in the environmental impact statement, or 35.35 upon the specific date identified by the board in the charge, 35.36 whichever occurs first. 36.1 Sec. 19. Minnesota Statutes 2000, section 116C.59, 36.2 subdivision 4, is amended to read: 36.3 Subd. 4. [SCIENTIFIC ADVISORY TASK FORCE.] The board may 36.4 appoint one or more advisory task forces composed of technical 36.5 and scientific experts to conduct research and make 36.6 recommendations concerning generic issues such as health and 36.7 safety, underground routes, double circuiting and long-range 36.8 route and site planning. Reimbursement for expenses incurred 36.9 shall be made pursuant to the rules governing reimbursement of 36.10 state employees. The task forces expire as provided in section 36.11 15.059, subdivision 6. The time allowed for completion of a 36.12 specific site or route procedure may not be extended to await 36.13 the outcome of these generic investigations. 36.14 Sec. 20. Minnesota Statutes 2000, section 116C.60, is 36.15 amended to read: 36.16 116C.60 [PUBLIC MEETINGS; TRANSCRIPT OF PROCEEDINGS; 36.17 WRITTEN RECORDS.] 36.18 Meetings of the board, including hearings, shall be open to 36.19 the public. Minutes shall be kept of board meetings and a 36.20 complete record of public hearings shall be kept. All books, 36.21 records, files, and correspondence of the board shall be 36.22 available for public inspection at any reasonable time. The 36.23 councilboard shall also be subject to chapter 13D. 36.24 Sec. 21. Minnesota Statutes 2000, section 116C.61, 36.25 subdivision 1, is amended to read: 36.26 Subdivision 1. [REGIONAL, COUNTY AND LOCAL ORDINANCES, 36.27 RULES, REGULATIONS; PRIMARY RESPONSIBILITY AND REGULATION OF 36.28 SITE DESIGNATION, IMPROVEMENT AND USE.] To assure the paramount 36.29 and controlling effect of the provisions herein over other state 36.30 agencies, regional, county and local governments, and special 36.31 purpose government districts, the issuance of a certificate of36.32 site permit compatibilityor transmission line36.33 constructionroute permit and subsequent purchase and use of 36.34 such site or route locations for large electric power generating 36.35 plant and high voltage transmission line purposes shall be the 36.36 sole site or route approval required to be obtained by the 37.1 utility. Such certificate orpermit shall supersede and preempt 37.2 all zoning, building, or land use rules, regulations, or 37.3 ordinances promulgated by regional, county, local and special 37.4 purpose government. 37.5 Sec. 22. Minnesota Statutes 2000, section 116C.61, 37.6 subdivision 3, is amended to read: 37.7 Subd. 3. [STATE AGENCY PARTICIPATION.] State agencies 37.8 authorized to issue permits required for construction or 37.9 operation of large electric power generating plants or high 37.10 voltage transmission lines shall participate in and present the37.11 position of the agencyduring routing and siting at public 37.12 hearings and all other activities of the board on specific site 37.13 or route designations and design considerations of the board, 37.14 which positionand shall clearly state whether the site or route 37.15 being considered for designation or permit and other design 37.16 matters under consideration for approval for a certain size and37.17 type of facilitywill be in compliance with state agency 37.18 standards, rules or policies. 37.19 Sec. 23. Minnesota Statutes 2000, section 116C.62, is 37.20 amended to read: 37.21 116C.62 [IMPROVEMENT OF SITES AND ROUTES.] 37.22 Utilities whichthat have acquired a site or route in 37.23 accordance with sections 116C.51 to 116C.69 may proceed to 37.24 construct or improve the site or route for the intended purposes 37.25 at any time, subject to section 116C.61, subdivision 2, provided 37.26 that if the construction and improvement commences more thanhas 37.27 not commenced within four years after a certificate orpermit 37.28 for the site or route has been issued, then the utility must 37.29 certify to the board that the site or route continues to meet 37.30 the conditions upon which the certificate ofsite compatibility37.31 or transmission line constructionor route permit was issued. 37.32 Sec. 24. Minnesota Statutes 2000, section 116C.64, is 37.33 amended to read: 37.34 116C.64 [FAILURE TO ACT.] 37.35 If the board fails to act within the times specified in 37.36 section 116C.57, the applicant or any affected utilityperson 38.1 may seek an order of the district court requiring the board to 38.2 designate or refuse to designate a site or route. 38.3 Sec. 25. Minnesota Statutes 2000, section 116C.645, is 38.4 amended to read: 38.5 116C.645 [REVOCATION OR SUSPENSION.] 38.6 A site certificateor constructionroute permit may be 38.7 revoked or suspended by the board after adequate notice of the 38.8 alleged grounds for revocation or suspension and a full and fair 38.9 hearing in which the affected utility has an opportunity to 38.10 confront any witness and respond to any evidence against it and 38.11 to present rebuttal or mitigating evidence upon a finding by the 38.12 board of: 38.13 (1) Any false statement knowingly made in the application 38.14 or in accompanying statements or studies required of the 38.15 applicant, if a true statement would have warranted a change in 38.16 the board's findings; 38.17 (2) Failure to comply with material conditions of the site 38.18 certificate or construction permit, or failure to maintain 38.19 health and safety standards; or 38.20 (3) Any material violation of the provisions of sections 38.21 116C.51 to 116C.69, any rule promulgated pursuant thereto, or 38.22 any order of the board. 38.23 Sec. 26. Minnesota Statutes 2000, section 116C.65, is 38.24 amended to read: 38.25 116C.65 [JUDICIAL REVIEW.] 38.26 Any utilityapplicant, party or person aggrieved by the 38.27 issuance of a certificatesite or route permit or emergency 38.28 certificate of site compatibility or transmission line38.29 constructionpermit from the board or a certification of 38.30 continuing suitability filed by a utility with the board or by a 38.31 final order in accordance with any rules promulgated by the 38.32 board, may appeal to the court of appeals in accordance with 38.33 chapter 14. The appeal shall be filed within 6030 days after 38.34 the publication in the State Register of notice of the issuance 38.35 of the certificate orpermit by the board or certification filed 38.36 with the board or the filing of any final order by the board. 39.1 Sec. 27. Minnesota Statutes 2000, section 116C.66, is 39.2 amended to read: 39.3 116C.66 [RULES.] 39.4 The board, in order to give effect to the purposes of 39.5 sections 116C.51 to 116C.69, shall prior to July 1, 1978,may 39.6 adopt rules consistent with sections 116C.51 to 116C.69, 39.7 including promulgation of site and route designation criteria, 39.8 the description of the information to be furnished by the 39.9 utilities, establishment of minimum guidelines for public 39.10 participation in the development, revision, and enforcement of 39.11 any rule, plan or program established by the board, procedures 39.12 for the revocation or suspension of a constructionsite or route 39.13 permit or a certificate of site compatibility, and the procedure 39.14 and timeliness for proposing alternative routes and sites , and39.15 route exemption criteria and procedures. No rule adopted by the 39.16 board shall grant priority to state-owned wildlife management 39.17 areas over agricultural lands in the designation of route 39.18 avoidance areas. The provisions of chapter 14 shall apply to 39.19 the appeal of rules adopted by the board to the same extent as 39.20 it applies to review of rules adopted by any other agency of 39.21 state government. 39.22 The chief administrative law judge shall , prior to January39.23 1, 1978,adopt procedural rules for public hearings relating to 39.24 the site and route designationpermit process and to the route39.25 exemption process. The rules shall attempt to maximize citizen 39.26 participation in these processes consistent with the time limits 39.27 for board decision established in sections 116C.57, subdivision 39.28 8, and 116C.575, subdivision 7. 39.29 Sec. 28. Minnesota Statutes 2000, section 116C.69, is 39.30 amended to read: 39.31 116C.69 [BIENNIAL REPORT; APPLICATION FEES; APPROPRIATION; 39.32 FUNDING.] 39.33 Subdivision 1. [BIENNIAL REPORT.] Before November 15 of 39.34 each even-numbered year the board shall prepare and submit to 39.35 the legislature a report of its operations, activities, findings 39.36 and recommendations concerning sections 116C.51 to 116C.69. The 40.1 report shall also contain information on the board's biennial 40.2 expenditures, its proposed budget for the following biennium, 40.3 and the amounts paid in certificate andpermit application fees 40.4 pursuant to subdivisions 2 and 2aand in assessments pursuant to 40.5 subdivision 3this section. The proposed budget for the 40.6 following biennium shall be subject to legislative review. 40.7 Subd. 2. [SITE APPLICATION FEE.] Every applicant for a 40.8 site certificatepermit shall pay to the board a fee in an 40.9 amount equal to $500 for each $1,000,000 of production plant 40.10 investment in the proposed installation as defined in the 40.11 Federal Power Commission Uniform System of Accounts. The board 40.12 shall specify the time and manner of payment of the fee. If any 40.13 single payment requested by the board is in excess of 25 percent 40.14 of the total estimated fee, the board shall show that the excess 40.15 is reasonably necessary. The applicant shall pay within 30 days 40.16 of notification any additional fees reasonably necessary for 40.17 completion of the site evaluation and designation process by the 40.18 board. In no event shall the total fees required of the 40.19 applicant under this subdivision exceed an amount equal to 0.001 40.20 of said production plant investment ($1,000 for each 40.21 $1,000,000). All money received pursuant to this subdivision 40.22 shall be deposited in a special account. Money in the account 40.23 is appropriated to the board to pay expenses incurred in 40.24 processing applications for certificatessite permits in 40.25 accordance with sections 116C.51 to 116C.69 and in the event the 40.26 expenses are less than the fee paid, to refund the excess to the 40.27 applicant. 40.28 Subd. 2a. [ROUTE APPLICATION FEE.] Every applicant for a 40.29 transmission line constructionroute permit shall pay to the 40.30 board a base fee of $35,000 plus a fee in an amount equal to 40.31 $1,000 per mile length of the longest proposed route. The board 40.32 shall specify the time and manner of payment of the fee. If any 40.33 single payment requested by the board is in excess of 25 percent 40.34 of the total estimated fee, the board shall show that the excess 40.35 is reasonably necessary. In the event the actual cost of 40.36 processing an application up to the board's final decision to 41.1 designate a route exceeds the above fee schedule, the board may 41.2 assess the applicant any additional fees necessary to cover the 41.3 actual costs, not to exceed an amount equal to $500 per mile 41.4 length of the longest proposed route. All money received 41.5 pursuant to this subdivision shall be deposited in a special 41.6 account. Money in the account is appropriated to the board to 41.7 pay expenses incurred in processing applications for 41.8 constructionroute permits in accordance with sections 116C.51 41.9 to 116C.69 and in the event the expenses are less than the fee 41.10 paid, to refund the excess to the applicant. 41.11 Subd. 3. [FUNDING; ASSESSMENT.] The board shall finance 41.12 its base line studies, general environmental studies, 41.13 development of criteria, inventory preparation, monitoring of 41.14 conditions placed on site certificatesand constructionroute 41.15 permits, and all other work, other than specific site and route 41.16 designation, from an assessment made quarterly, at least 30 days 41.17 before the start of each quarter, by the board against all 41.18 utilities with annual retail kilowatt-hour sales greater than 41.19 4,000,000 kilowatt-hours in the previous calendar year. 41.20 Each share shall be determined as follows: (1) the ratio 41.21 that the annual retail kilowatt-hour sales in the state of each 41.22 utility bears to the annual total retail kilowatt-hour sales in 41.23 the state of all these utilities, multiplied by 0.667, plus (2) 41.24 the ratio that the annual gross revenue from retail 41.25 kilowatt-hour sales in the state of each utility bears to the 41.26 annual total gross revenues from retail kilowatt-hour sales in 41.27 the state of all these utilities, multiplied by 0.333, as 41.28 determined by the board. The assessment shall be credited to 41.29 the special revenue fund and shall be paid to the state treasury 41.30 within 30 days after receipt of the bill, which shall constitute 41.31 notice of said assessment and demand of payment thereof. The 41.32 total amount which may be assessed to the several utilities 41.33 under authority of this subdivision shall not exceed the sum of 41.34 the annual budget of the board for carrying out the purposes of 41.35 this subdivision. The assessment for the second quarter of each 41.36 fiscal year shall be adjusted to compensate for the amount by 42.1 which actual expenditures by the board for the preceding fiscal 42.2 year were more or less than the estimated expenditures 42.3 previously assessed. 42.4 Sec. 29. Minnesota Statutes 2000, section 216B.2421, 42.5 subdivision 2, is amended to read: 42.6 Subd. 2. [LARGE ENERGY FACILITY.] "Large energy facility" 42.7 means: 42.8 (1) any electric power generating plant or combination of 42.9 plants at a single site with a combined capacity of 80,00042.10 kilowatts or more, or any facility of50,000 kilowatts or more 42.11 which requires oil, natural gas, or natural gas liquids as a42.12 fuel and for which an installation permit has not been applied42.13 for by May 19, 1977 pursuant to Minn. Reg. APC 3(a)and 42.14 transmission lines directly associated with the plant that are 42.15 necessary to interconnect the plant to the transmission system; 42.16 (2) any high voltage transmission line with a capacity of 42.17 200 kilovolts or more and with more than 50 miles of its length42.18 in Minnesota; or,42.19 (3) any high voltage transmission line with a capacity of 42.20 300100 kilovolts or more with more than 25ten miles of its 42.21 length in Minnesota or that crosses a state line; 42.22 (3)(4) any pipeline greater than six inches in diameter 42.23 and having more than 50 miles of its length in Minnesota used 42.24 for the transportation of coal, crude petroleum or petroleum 42.25 fuels or oil or their derivatives; 42.26 (4)(5) any pipeline for transporting natural or synthetic 42.27 gas at pressures in excess of 200 pounds per square inch with 42.28 more than 50 miles of its length in Minnesota; 42.29 (5)(6) any facility designed for or capable of storing on 42.30 a single site more than 100,000 gallons of liquefied natural gas 42.31 or synthetic gas; 42.32 (6)(7) any underground gas storage facility requiring 42.33 permit pursuant to section 103I.681; 42.34 (7)(8) any nuclear fuel processing or nuclear waste 42.35 storage or disposal facility; and 42.36 (8)(9) any facility intended to convert any material into 43.1 any other combustible fuel and having the capacity to process in 43.2 excess of 75 tons of the material per hour. 43.3 Sec. 30. [216B.2425] [STATE TRANSMISSION PLAN.] 43.4 Subdivision 1. [LIST.] The commission shall maintain a 43.5 list of certified high voltage transmission line projects. 43.6 Subd. 2. [LIST DEVELOPMENT.] (a) By November 1 of each 43.7 odd-numbered year, each public utility, municipal utility, and 43.8 cooperative electric association, or the generation and 43.9 transmission organization that serves each utility or 43.10 association, that owns or operates electric transmission lines 43.11 in Minnesota shall jointly or individually submit a transmission 43.12 projects report to the commission. The report must: 43.13 (1) list specific present and reasonably foreseeable future 43.14 inadequacies in the transmission system in Minnesota; 43.15 (2) identify alternative means of addressing each 43.16 inadequacy listed; 43.17 (3) identify general economic, environmental, and social 43.18 issues associated with each alternative; and 43.19 (4) provide a summary of public input the utilities and 43.20 associations have gathered related to the list of inadequacies 43.21 and the role of local government officials and other interested 43.22 persons in assisting to develop the list and analyze 43.23 alternatives. 43.24 (b) To meet the requirements of this subdivision, entities 43.25 may rely on available information and analysis developed by a 43.26 regional transmission organization or any subgroup of a regional 43.27 transmission organization and may develop and include additional 43.28 information as necessary. 43.29 Subd. 3. [COMMISSION APPROVAL.] By June 1 of each 43.30 even-numbered year, the commission shall adopt a state 43.31 transmission project list and shall certify, certify as 43.32 modified, or deny certification of the projects proposed under 43.33 subdivision 2. The commission may only certify a project that 43.34 is a high voltage transmission line as defined in section 43.35 216B.2421, subdivision 2, that the commission finds is: 43.36 (1) necessary to maintain or enhance the reliability of 44.1 electric service to Minnesota consumers; 44.2 (2) needed, applying the criteria in section 216B.241, 44.3 subdivision 3; and 44.4 (3) in the public interest, taking into account electric 44.5 energy system needs and economic, environmental, and social 44.6 interests affected by the project. 44.7 Subd. 4. [LIST; EFFECT.] Certification of a project as a 44.8 priority electric transmission project satisfies section 44.9 216B.243. A certified project on which construction has not 44.10 begun more than six years after being placed on the list, must 44.11 be reapproved by the commission. 44.12 Subd. 5. [TRANSMISSION INVENTORY.] The department of 44.13 commerce shall create, maintain, and update annually an 44.14 inventory of transmission lines in the state. 44.15 Subd. 6. [EXCLUSION.] This section does not apply to any 44.16 transmission line proposal that has been approved, or was 44.17 pending before a local unit of government, the environmental 44.18 quality board, or the public utilities commission on August 1, 44.19 2001. 44.20 Sec. 31. Minnesota Statutes 2000, section 216B.243, 44.21 subdivision 3, is amended to read: 44.22 Subd. 3. [SHOWING REQUIRED FOR CONSTRUCTION.] No proposed 44.23 large energy facility shall be certified for construction unless 44.24 the applicant can show that demand for electricity cannot be met 44.25 more cost-effectively through energy conservation and 44.26 load-management measures and unless the applicant has otherwise 44.27 justified its need. In assessing need, the commission shall 44.28 evaluate: 44.29 (1) the accuracy of the long-range energy demand forecasts 44.30 on which the necessity for the facility is based; 44.31 (2) the effect of existing or possible energy conservation 44.32 programs under sections 216C.05 to 216C.30 and this section or 44.33 other federal or state legislation on long-term energy demand; 44.34 (3) the relationship of the proposed facility to overall 44.35 state energy needs, as described in the most recent state energy 44.36 policy and conservation report prepared under section 216C.18; 45.1 (4) promotional activities that may have given rise to the 45.2 demand for this facility; 45.3 (5) socially beneficial uses of the outputbenefits of this 45.4 facility, including its uses to protect or enhance environmental 45.5 quality, and to increase reliability of energy supply in 45.6 Minnesota and the region; 45.7 (6) the effects of the facility in inducing future45.8 development;45.9 (7)(6) possible alternatives for satisfying the energy 45.10 demand or transmission needs including but not limited to 45.11 potential for increased efficiency and upgrading of existing 45.12 energy generation and transmission facilities, load management 45.13 programs, and distributed generation; 45.14 (8)(7) the policies, rules, and regulations of other state 45.15 and federal agencies and local governments; and 45.16 (9)(8) any feasible combination of energy conservation 45.17 improvements, required under section 216B.241, that can (i) 45.18 replace part or all of the energy to be provided by the proposed 45.19 facility, and (ii) compete with it economically. 45.20 Sec. 32. Minnesota Statutes 2000, section 216B.243, 45.21 subdivision 4, is amended to read: 45.22 Subd. 4. [APPLICATION FOR CERTIFICATE; HEARING.] Any 45.23 person proposing to construct a large energy facility shall 45.24 apply for a certificate of need prior to construction of the45.25 facilityapplying for a site or route permit under sections 45.26 116C.51 to 116C.69 or construction of the facility. The 45.27 application shall be on forms and in a manner established by the 45.28 commission. In reviewing each application the commission shall 45.29 hold at least one public hearing pursuant to chapter 14. The 45.30 public hearing shall be held at a location and hour reasonably 45.31 calculated to be convenient for the public. An objective of the 45.32 public hearing shall be to obtain public opinion on the 45.33 necessity of granting a certificate of need. The commission 45.34 shall designate a commission employee whose duty shall be to 45.35 facilitate citizen participation in the hearing process. If the 45.36 commission and the environmental quality board determine that a 46.1 joint hearing on siting and need under this subdivision and 46.2 section 116C.57, subdivision 2d, is feasible, more efficient, 46.3 and may further the public interest, a joint hearing under those 46.4 subdivisions may be held. 46.5 Sec. 33. Minnesota Statutes 2000, section 216B.243, 46.6 subdivision 8, is amended to read: 46.7 Subd. 8. [EXEMPTIONS.] This section does not apply to: 46.8 (1) cogeneration or small power production facilities as 46.9 defined in the Federal Power Act, United States Code, title 16, 46.10 sections 796(18)(A) and 796(17)(A), and having a combined 46.11 capacity at a single site of less than 80,000 kilowatts or to 46.12 plants or facilities for the production of ethanol or fuel 46.13 alcohol nor in any case where the commission shall determine 46.14 after being advised by the attorney general that its application 46.15 has been preempted by federal law; 46.16 (2) a high voltage transmission line proposed primarily to 46.17 distribute electricity to serve the demand of a single customer 46.18 at a single location, unless the applicant opts to request that 46.19 the commission determine need under this section or section 46.20 216B.2425; 46.21 (3) the upgrade to a higher voltage of an existing 46.22 transmission line that serves the demand of a single customer 46.23 that primarily uses existing rights-of-way, unless the applicant 46.24 opts to request that the commission determine need under this 46.25 section or section 216B.2425; 46.26 (4) conversion of the fuel source of an existing electric 46.27 generating plant to using natural gas; or 46.28 (5) modification of an existing electric generating plant 46.29 to increase efficiency, as long as the capacity of the plant is 46.30 not increased more than ten percent or more than 100 megawatts, 46.31 whichever is greater. 46.32 Sec. 34. Minnesota Statutes 2000, section 216B.62, 46.33 subdivision 5, is amended to read: 46.34 Subd. 5. [ASSESSING COOPERATIVES AND MUNICIPALS.] The 46.35 commission and department may charge cooperative electric 46.36 associations and municipal electric utilities their 47.1 proportionate share of the expenses incurred in the review and 47.2 disposition of resource plans, adjudication of service area 47.3 disputes, proceedings under section 216B.2425, and the costs 47.4 incurred in the adjudication of complaints over service 47.5 standards, practices, and rates. Cooperative electric 47.6 associations electing to become subject to rate regulation by 47.7 the commission pursuant to section 216B.026, subdivision 4, are 47.8 also subject to this section. Neither a cooperative electric 47.9 association nor a municipal electric utility is liable for costs 47.10 and expenses in a calendar year in excess of the limitation on 47.11 costs that may be assessed against public utilities under 47.12 subdivision 2. A cooperative electric association or municipal 47.13 electric utility may object to and appeal bills of the 47.14 commission and department as provided in subdivision 4. 47.15 The department shall assess cooperatives and municipalities 47.16 for the costs of alternative energy engineering activities under 47.17 section 216C.261. Each cooperative and municipality shall be 47.18 assessed in proportion that its gross operating revenues for the 47.19 sale of gas and electric service within the state for the last 47.20 calendar year bears to the total of those revenues for all 47.21 public utilities, cooperatives, and municipalities. 47.22 Sec. 35. [STATE ENERGY PLANNING REPORT.] 47.23 (a) The commissioner of the department of commerce shall 47.24 prepare a state energy planning report and submit it to the 47.25 legislature by December 15, 2001 and update the report by 47.26 December 15, 2002. The report must identify important trends 47.27 and issues in energy consumption, supply, technologies, 47.28 conservation, environmental effects, and economics, and must 47.29 recommend energy goals relating to the energy needs of the 47.30 state. The report must recommend goals for the role of energy 47.31 conservation, utilization of renewable energy resources, 47.32 deployment of distributed generation resources, other modern 47.33 energy technologies, and traditional energy technologies, and 47.34 affordability of energy services for all Minnesotans. The 47.35 report must recommend strategies to reach the recommended goals, 47.36 including recommendations for amendments to state law. 48.1 (b) The report must address, among other issues: 48.2 (1) projected energy consumption over the next ten years; 48.3 (2) the need for new energy production and transportation 48.4 facilities; 48.5 (3) options for streamlining of the procedures for 48.6 certification of need, routing and siting, environmental review, 48.7 and permitting of energy facilities; 48.8 (4) the potential role of energy conservation, modern and 48.9 emerging energy technologies, and renewable generation; 48.10 (5) the role for traditional energy technologies; 48.11 (6) the environmental effects of energy consumption, 48.12 including an analysis of the costs associated with reducing 48.13 those effects; and 48.14 (7) projected energy costs over the next ten years. 48.15 (c) In preparing the report, the commissioner shall invite 48.16 public participation and shall consult with other state 48.17 agencies, including the environmental quality board staff, the 48.18 public utilities commission staff, the pollution control agency, 48.19 the department of health and other relevant agencies, local 48.20 government units, regional energy planning groups, energy 48.21 utilities, and other interested persons. Not later than October 48.22 1, 2001, the commissioner shall issue a draft report. The 48.23 commissioner shall accept written comments and hold at least one 48.24 public meeting to gather additional public input on the draft 48.25 report. 48.26 Sec. 36. [REPEALER.] 48.27 Minnesota Statutes 2000, sections 116C.55, subdivisions 2 48.28 and 3; 116C.57, subdivisions 3, 5, and 5a; 116C.67; and 48.29 216B.2421, subdivision 3, are repealed. 48.30 Sec. 37. [EFFECTIVE DATE.] 48.31 This article is effective for certificates of need and 48.32 route and site permits applied for on or after August 1, 2001. 48.33 ARTICLE 8 48.34 RENEWABLE ENERGY AND CONSERVATION 48.35 Section 1. Minnesota Statutes 2000, section 216B.1645, is 48.36 amended to read: 49.1 216B.1645 [POWER PURCHASE CONTRACT OR INVESTMENT.] 49.2 Upon the petition of a public utility, the public utilities 49.3 commission shall approve or disapprove power purchase contracts, 49.4 investments, or expenditures entered into or made by the utility 49.5 to satisfy the wind and biomass mandates contained in sections 49.6 216B.2423 and, 216B.2424, and 216B.169, including reasonable 49.7 investments and expenditures made to transmit the electricity 49.8 generated from sources developed under those sections that is 49.9 ultimately used to provide service to the utility's retail 49.10 customers, or to develop renewable energy sources from the 49.11 account required in section 116C.779. The expenses incurred by 49.12 the utility over the duration of the approved contract or useful 49.13 life of the investment and expenditures made pursuant to section 49.14 116C.779 shall be recoverable from the ratepayers of the 49.15 utility, to the extent they are not offset by utility revenues 49.16 attributable to the contracts, investments, or expenditures. 49.17 Upon petition by a public utility, the commission shall approve 49.18 or approve as modified a rate schedule providing for the 49.19 automatic adjustment of charges to recover the expenses or costs 49.20 approved by the commission, which, in the case of transmission 49.21 expenditures, are limited to the portion of actual transmission 49.22 costs that are directly allocable to the need to transmit power 49.23 from the renewable sources of energy. The commission may not 49.24 approve recovery of the costs for that portion of the power 49.25 generated from sources governed by this section that the utility 49.26 sells into the wholesale market. Nothing in this section shall 49.27 be construed to determine the manner or extent to which revenues 49.28 derived from other generation facilities of the utility may be 49.29 considered in determining the recovery of the approved cost or 49.30 expenses associated with the mandated contracts, investments, or 49.31 expenditures in the event there is retail competition for 49.32 electric energy. 49.33 Sec. 2. [216B.169] [RENEWABLE AND HIGH-EFFICIENCY ENERGY 49.34 RATE OPTIONS.] 49.35 Subdivision 1. [DEFINITIONS.] For the purposes of this 49.36 section, the following terms have the meanings given them. 50.1 (a) "Utility" means a public utility, municipal utility, or 50.2 cooperative electric association providing electric service at 50.3 retail to Minnesota consumers. 50.4 (b) "Renewable energy" has the meaning given in section 50.5 216B.2422, subdivision 1, paragraph (c). 50.6 (c) "High-efficiency, low emissions, distributed generation" 50.7 means a distributed generation facility of no more than ten 50.8 megawatts of interconnected capacity that is certified by the 50.9 commissioner under subdivision 3 as a high-efficiency, low 50.10 emissions facility. 50.11 Subd. 2. [RENEWABLE AND HIGH-EFFICIENCY ENERGY RATE 50.12 OPTIONS.] (a) Each utility shall offer its customers, and shall 50.13 advertise the offer at least annually, one or more options that 50.14 allow a customer to determine that a certain amount of the 50.15 electricity generated or purchased on behalf of the customer is 50.16 renewable energy or energy generated by high-efficiency, low 50.17 emissions, distributed generation such as fuel cells and 50.18 microturbines fueled by a renewable fuel. 50.19 (b) Each public utility shall file an implementation plan 50.20 within 90 days of the effective date of this section to 50.21 implement paragraph (a). 50.22 (c) Rates charged to customers must be calculated using the 50.23 utility's cost of acquiring the energy for the customer and must: 50.24 (1) reflect the difference between the cost of generating 50.25 or purchasing the renewable energy and the cost of generating or 50.26 purchasing the same amount of nonrenewable energy; and 50.27 (2) be distributed on a per kilowatt-hour basis among all 50.28 customers who choose to participate in the program. 50.29 (d) Implementation of these rate options may reflect a 50.30 reasonable amount of lead time necessary to arrange acquisition 50.31 of the energy. The utility may acquire the energy demanded by 50.32 customers, in whole or in part, through procuring or generating 50.33 the renewable energy directly, or through the purchase of 50.34 credits from a provider that has received certification of 50.35 eligible power supply pursuant to subdivision 3. If a utility 50.36 is not able to arrange an adequate supply of renewable or 51.1 high-efficiency energy to meet its customers' demand under this 51.2 section, the utility must file a report with the commission 51.3 detailing its efforts and reasons for its failure. 51.4 Subd. 3. [CERTIFICATION AND TRADEABLE CREDITS.] (a) The 51.5 commissioner shall certify a power supply or supplies as 51.6 eligible to satisfy customer requirements under this section 51.7 upon finding: 51.8 (1) the power supply is renewable energy or energy 51.9 generated by high-efficiency, low emissions, distributed 51.10 generation; and 51.11 (2) the sales arrangements of energy from the supplies are 51.12 such that the power supply is only sold once to retail consumers. 51.13 (b) To facilitate compliance with this section, the 51.14 commission may, by order, establish a program for tradeable 51.15 credits for eligible power supplies. 51.16 Sec. 3. [216B.1691] [RENEWABLE ENERGY OBJECTIVES.] 51.17 Subdivision 1. [DEFINITIONS.] (a) "Eligible energy 51.18 technology" means: 51.19 (1) an energy technology that generates electricity from 51.20 the following renewable energy sources: solar, wind, 51.21 hydroelectric with a capacity of less than 60 megawatts, or 51.22 biomass; and 51.23 (2) was not mandated by state law or commission order. 51.24 (b) "electric utility" means a public utility providing 51.25 electric service, a generation and transmission cooperative 51.26 electric association, or a municipal power agency. 51.27 Subd. 2. [ELIGIBLE ENERGY OBJECTIVES.] (a) Each electric 51.28 utility shall make a good faith effort to generate or procure 51.29 sufficient electricity generated by an eligible energy 51.30 technology to provide its retail consumers, or the retail 51.31 members of a distribution utility to which the electric utility 51.32 provides wholesale electric service, so that: 51.33 (1) commencing in 2005, at least one percent of the 51.34 electric energy provided to those retail customers is generated 51.35 by eligible energy technologies; 51.36 (2) the amount provided under clause (1) is increased by 52.1 one percent each year until 2015; 52.2 (3) ten percent of the electric energy provided to retail 52.3 customers in Minnesota is generated by eligible energy 52.4 technologies; and 52.5 (4) of the eligible energy technology generation required 52.6 under clauses (1) and (2), at least 0.5 percent of the energy 52.7 must be generated by biomass energy technologies by 2010 and one 52.8 percent by 2015. 52.9 (b) Each electric utility shall report on its activities 52.10 and progress with regard to these objectives in their filings 52.11 under section 216B.2422. 52.12 (c) The commission, in consultation with the commissioner 52.13 of commerce, shall compile the information provided to the 52.14 commission under paragraph (b), and report to the chairs of the 52.15 house of representatives and senate committees with jurisdiction 52.16 over energy and environment policy issues as to the progress of 52.17 utilities in the state in increasing the amount of renewable 52.18 energy provided to retail customers, with any recommendations 52.19 for regulatory or legislative action, by January 15, 2002. 52.20 Sec. 4. Minnesota Statutes 2000, section 216B.241, 52.21 subdivision 1, is amended to read: 52.22 Subdivision 1. [DEFINITIONS.] For purposes of this section 52.23 and section 216B.16, subdivision 6b, the terms defined in this 52.24 subdivision have the meanings given them. 52.25 (a) "Commission" means the public utilities commission. 52.26 (b) "Commissioner" means the commissioner of public service. 52.27 (c) "Customer facility" means all buildings, structures, 52.28 equipment, and installations at a single site. 52.29 (d) "Department" means the department of public service. 52.30 (e) "Energy conservation" means demand-side management of 52.31 energy supplies resulting in a net reduction in energy use. 52.32 Load management that reduces overall energy use is energy 52.33 conservation. 52.34 (f) "Energy conservation improvement" means the purchase or52.35 installation of a device, method, material, or project that:52.36 (1) reduces consumption of or increases efficiency in the53.1 use of electricity or natural gas, including but not limited to53.2 insulation and ventilation, storm or thermal doors or windows,53.3 caulking and weatherstripping, furnace efficiency modifications,53.4 thermostat or lighting controls, awnings, or systems to turn off53.5 or vary the delivery of energy;53.6 (2) creates, converts, or actively uses energy from53.7 renewable sources such as solar, wind, and biomass, provided53.8 that the device or method conforms with national or state53.9 performance and quality standards whenever applicable;53.10 (3) seeks to provide energy savings through reclamation or53.11 recycling and that is used as part of the infrastructure of an53.12 electric generation, transmission, or distribution system within53.13 the state or a natural gas distribution system within the state;53.14 or53.15 (4) provides research or development of new means of53.16 increasing energy efficiency or conserving energy or research or53.17 development of improvement of existing means of increasing53.18 energy efficiency or conserving energya project that results in 53.19 energy conservation. 53.20 (f)(g) "Investments and expenses of a public utility" 53.21 includes the investments and expenses incurred by a public 53.22 utility in connection with an energy conservation improvement, 53.23 including but not limited to: 53.24 (1) the differential in interest cost between the market 53.25 rate and the rate charged on a no-interest or below-market 53.26 interest loan made by a public utility to a customer for the 53.27 purchase or installation of an energy conservation improvement; 53.28 (2) the difference between the utility's cost of purchase 53.29 or installation of energy conservation improvements and any 53.30 price charged by a public utility to a customer for such 53.31 improvements. 53.32 (g)(h) "Large electric customer facility" means a customer 53.33 facility that imposes a peak electrical demand on an electric 53.34 utility's system of not less than 20,000 kilowatts, measured in 53.35 the same way as the utility that serves the customer facility 53.36 measures electrical demand for billing purposes, and for which 54.1 electric services are provided at retail on a single bill by a 54.2 utility operating in the state. 54.3 (i) "Load management" means an activity, service, or 54.4 technology to change the timing or the efficiency of a 54.5 customer's use of energy that allows a utility or a customer to 54.6 respond to wholesale market fluctuations or to reduce the 54.7 overall demand for energy or capacity. 54.8 Sec. 5. Minnesota Statutes 2000, section 216B.241, 54.9 subdivision 1a, is amended to read: 54.10 Subd. 1a. [INVESTMENT, EXPENDITURE, AND CONTRIBUTION; 54.11 PUBLIC UTILITY.] (a) For purposes of this subdivision and 54.12 subdivision 2, "public utility" has the meaning given it in 54.13 section 216B.02, subdivision 4. Each public utility shall spend 54.14 and invest for energy conservation improvements under this 54.15 subdivision and subdivision 2 the following amounts: 54.16 (1) for a utility that furnishes gas service, 0.5 percent 54.17 of its gross operating revenues from service provided in the 54.18 state; 54.19 (2) for a utility that furnishes electric service, 1.5 54.20 percent of its gross operating revenues from service provided in 54.21 the state; and 54.22 (3) for a utility that furnishes electric service and that 54.23 operates a nuclear-powered electric generating plant within the 54.24 state, two percent of its gross operating revenues from service 54.25 provided in the state. 54.26 For purposes of this paragraph (a), "gross operating revenues" 54.27 do not include revenues from large electric customer facilities 54.28 exempted by the commissioner of the department of public service54.29 pursuant tounder paragraph (b). 54.30 (b) The owner of a large electric customer facility may 54.31 petition the commissioner of the department of public serviceto 54.32 exempt both electric and gas utilities serving the large energy 54.33 customer facility from the investment and expenditure 54.34 requirements of paragraph (a) with respect to retail revenues 54.35 attributable to the facility. At a minimum, the petition must 54.36 be supported by evidence relating to competitive or economic 55.1 pressures on the customer and a showing by the customer of 55.2 reasonable efforts to identify, evaluate, and implement 55.3 cost-effective conservation improvements at the facility. If a 55.4 petition is filed on or before October 1 of any year, the order 55.5 of the commissioner to exempt revenues attributable to the 55.6 facility can be effective no earlier than January 1 of the 55.7 following year. The commissioner shall not grant an exemption 55.8 if the commissioner determines that granting the exemption is 55.9 contrary to the public interest. The commissioner may, after 55.10 investigation, rescind any exemption granted under this 55.11 paragraph upon a determination that cost-effective energy 55.12 conservation improvements are available at the large electric 55.13 customer facility. For the purposes of this paragraph, 55.14 "cost-effective" means that the projected total cost of the 55.15 energy conservation improvement at the large electric customer 55.16 facility is less than the projected present value of the energy 55.17 and demand savings resulting from the energy conservation 55.18 improvement. For the purposes of investigations by the 55.19 commissioner under this paragraph, the owner of any large 55.20 electric customer facility shall, upon request, provide the 55.21 commissioner with updated information comparable to that 55.22 originally supplied in or with the owner's original petition 55.23 under this paragraph. 55.24 (c) The commissioner may require investments or spending 55.25 greater than the amounts required under this subdivision for a 55.26 public utility whose most recent advance forecast required under 55.27 section 216B.2422 or 216C.17 projects a peak demand deficit of 55.28 100 megawatts or greater within five years under mid-range 55.29 forecast assumptions. 55.30 (d) A public utility or owner of a large electric customer 55.31 facility may appeal a decision of the commissioner under 55.32 paragraph (b) or (c) to the commission under subdivision 2. In 55.33 reviewing a decision of the commissioner under paragraph (b) or 55.34 (c), the commission shall rescind the decision if it finds that 55.35 the required investments or spending will: 55.36 (1) not result in cost-effective energy conservation 56.1 improvements; or 56.2 (2) otherwise not be in the public interest. 56.3 (e) Each utility shall determine what portion of the amount 56.4 it sets aside for conservation improvement will be used for 56.5 conservation improvements under subdivision 2 and what portion 56.6 it will contribute to the energy and conservation account 56.7 established in subdivision 2a. A public utility may propose to 56.8 the commissioner to designate that all or a portion of funds 56.9 contributed to the account established in subdivision 2a be used 56.10 for research and development projects that can best be 56.11 implemented on a statewide basis. Contributions must be 56.12 remitted to the commissioner of public service by February 1 of 56.13 each year. Nothing in this subdivision prohibits a public 56.14 utility from spending or investing for energy conservation 56.15 improvement more than required in this subdivision. 56.16 Sec. 6. Minnesota Statutes 2000, section 216B.241, 56.17 subdivision 1b, is amended to read: 56.18 Subd. 1b. [CONSERVATION IMPROVEMENT BY COOPERATIVE 56.19 ASSOCIATION OR MUNICIPALITY.] (a) This subdivision applies to: 56.20 (1) a cooperative electric association that generates and56.21 transmits electricity to associations that provide electricity56.22 at retail including a cooperative electric association not56.23 located in this state that serves associations or others in the56.24 stateprovides retail service to its members; 56.25 (2) a municipality that provides electric service to retail 56.26 customers; and 56.27 (3) a municipality with gross operating revenues in excess 56.28 of $5,000,000 from sales of natural gas to retail customers. 56.29 (b) Each cooperative electric association and municipality 56.30 subject to this subdivision shall spend and invest for energy 56.31 conservation improvements under this subdivision the following 56.32 amounts: 56.33 (1) for a municipality, 0.5 percent of its gross operating 56.34 revenues from the sale of gas and one1.5 percent of its gross 56.35 operating revenues from the sale of electricity not purchased56.36 from a public utility governed by subdivision 1a or a57.1 cooperative electric association governed by this subdivision, 57.2 excluding gross operating revenues from electric and gas service 57.3 provided in the state to large electric customer facilities; and 57.4 (2) for a cooperative electric association, 1.5 percent of 57.5 its gross operating revenues from service provided in the state, 57.6 excluding gross operating revenues from service provided in the 57.7 state to large electric customer facilities indirectly through a 57.8 distribution cooperative electric association. 57.9 (c) Each municipality and cooperative electric association 57.10 subject to this subdivision shall identify and implement energy 57.11 conservation improvement spending and investments that are 57.12 appropriate for the municipality or association, except that a 57.13 municipality or association may not spend or invest for energy 57.14 conservation improvements that directly benefit a large electric 57.15 customer facility for which the commissioner has issued an 57.16 exemption under subdivision 1a, paragraph (b). 57.17 (d) Each municipality and cooperative electric association 57.18 subject to this subdivision may spend and invest annually up 57.19 to 15ten percent of the total amount required to be spent and 57.20 invested on energy conservation improvements under this 57.21 subdivision on research and development projects that meet the 57.22 definition of energy conservation improvement in subdivision 1 57.23 and that are funded directly by the municipality or cooperative 57.24 electric association. Load management may be used to meet the57.25 requirements of this subdivision if it reduces the demand for or57.26 increases the efficiency of electric services.57.27 (e) Load management activities that do not reduce energy 57.28 use but that increase the efficiency of the electric system may 57.29 be used to meet the following percentage of the conservation 57.30 investment and spending requirements of this subdivision: 57.31 (1) 2002 - 90 percent; 57.32 (2) 2003 - 80 percent; 57.33 (3) 2004 - 65 percent; and 57.34 (4) 2005 and thereafter - 50 percent. 57.35 (f) A generation and transmission cooperative electric 57.36 association may include as spending and investment required58.1 under this subdivision conservation improvement spending and58.2 investment bythat provides energy services to cooperative 58.3 electric associations that provide electric service at retail to 58.4 consumers and that are served by the generation and transmission58.5 associationmay invest in energy conservation improvements on 58.6 behalf of the associations it serves and may fulfill the 58.7 conservation, spending, reporting, and energy savings goals on 58.8 an aggregate basis. A municipal power agency or other 58.9 not-for-profit entity that provides energy service to municipal 58.10 utilities that provide electric service at retail may invest in 58.11 energy conservation improvements on behalf of the municipal 58.12 utilities it serves and may fulfill the conservation, spending, 58.13 reporting, and energy savings goals on an aggregate basis, under 58.14 an agreement between the municipal power agency or 58.15 not-for-profit entity and each municipal utility for funding the 58.16 investments. 58.17 (d)(g) By February 1 of each yearJune 1, 2002, and every 58.18 two years thereafter, each municipality or cooperative 58.19 shall reportfile an overview of its conservation improvement 58.20 plan with the commissioner. With this overview, the 58.21 municipality or cooperative shall also provide an evaluation to 58.22 the commissioner detailing its energy conservation improvement 58.23 spending and investments with a brief analysis of effectiveness58.24 in reducing consumption of electricity or gasfor the previous 58.25 period. The evaluation must briefly describe each conservation 58.26 program and must specify the energy savings or increased 58.27 efficiency in the use of energy within the service territory of 58.28 the utility or association that is the result of the spending 58.29 and investments. The evaluation must analyze the 58.30 cost-effectiveness of the utility's or association's 58.31 conservation programs, using a list of baseline energy and 58.32 capacity savings assumptions developed in consultation with the 58.33 department. 58.34 The commissioner shall review each reportevaluation and make 58.35 recommendations, where appropriate, to the municipality or 58.36 association to increase the effectiveness of conservation 59.1 improvement activities. Up to three percent of a utility's 59.2 conservation spending obligation under this section may be used 59.3 for program pre-evaluation, testing, and monitoring and program 59.4 evaluation. 59.5 (h) The commissioner shall also review each 59.6 reportevaluation for whether a portion of the money spent on 59.7 residential conservation improvement programs is devoted to 59.8 programs that directly address the needs of renters and 59.9 low-income persons unless an insufficient number of appropriate 59.10 programs are available. For the purposes of this subdivision 59.11 and subdivision 2, "low-income" means an income of less than 18559.12 percent of the federal poverty levelat or below 50 percent of 59.13 the state median income. 59.14 (e)(i) As part of its spending for conservation 59.15 improvement, a municipality or association may contribute to the 59.16 energy and conservation account. A municipality or association 59.17 may propose to the commissioner to designate that all or a 59.18 portion of funds contributed to the account be used for research 59.19 and development projects that can best be implemented on a 59.20 statewide basis. Any amount contributed must be remitted to the 59.21 commissioner of public service by February 1 of each year. 59.22 Sec. 7. Minnesota Statutes 2000, section 216B.241, 59.23 subdivision 2, is amended to read: 59.24 Subd. 2. [PROGRAMS.] (a) The commissioner may by rule59.25 require public utilities to make investments and expenditures in 59.26 energy conservation improvements, explicitly setting forth the 59.27 interest rates, prices, and terms under which the improvements 59.28 must be offered to the customers. The required programs must 59.29 cover a two-year period. Public utilities shall file 59.30 conservation improvement plans by June 1, on a schedule 59.31 determined by order of the commissioner. Plans received by a 59.32 public utility by June 1 must be approved or approved as 59.33 modified by the commissioner by December 1 of that same year. 59.34 The commissioner shall require at least one public utility to59.35 establish a pilot program to make investments in and59.36 expenditures for energy from renewable resources such as solar,60.1 wind, or biomass and shallgive special consideration and 60.2 encouragement to programs that bring about significant net 60.3 savings through the use of energy-efficient lighting. The 60.4 commissioner shall evaluate the program on the basis of 60.5 cost-effectiveness and the reliability of technologies 60.6 employed. The rules of the departmentcommissioner's order must 60.7 provide to the extent practicable for a free choice, by 60.8 consumers participating in the program, of the device, method, 60.9 material, or project constituting the energy conservation 60.10 improvement and for a free choice of the seller, installer, or 60.11 contractor of the energy conservation improvement, provided that 60.12 the device, method, material, or project seller, installer, or 60.13 contractor is duly licensed, certified, approved, or qualified, 60.14 including under the residential conservation services program, 60.15 where applicable. 60.16 (b) The commissioner may require a utility to make an 60.17 energy conservation improvement investment or expenditure 60.18 whenever the commissioner finds that the improvement will result 60.19 in energy savings at a total cost to the utility less than the 60.20 cost to the utility to produce or purchase an equivalent amount 60.21 of new supply of energy. The commissioner shall nevertheless 60.22 ensure that every public utility operate one or more programs 60.23 under periodic review by the department. Load management may be60.24 used to meet the requirements for energy conservation60.25 improvements under this section if it results in a demonstrable60.26 reduction in consumption of energy.60.27 (c) Each public utility subject to subdivision 1a may spend 60.28 and invest annually up to 15ten percent of the total amount 60.29 required to be spent and invested on energy conservation 60.30 improvements under this section by the utility on research and 60.31 development projects that meet the definition of energy 60.32 conservation improvement in subdivision 1 and that are funded 60.33 directly by the public utility. 60.34 (d) A public utility may not spend for or invest in energy 60.35 conservation improvements that directly benefit a large electric 60.36 customer facility for which the commissioner has issued an 61.1 exemption pursuant to subdivision 1a, paragraph (b). The 61.2 commissioner shall consider and may require a utility to 61.3 undertake a program suggested by an outside source, including a 61.4 political subdivision or a nonprofit or community organization. 61.5 (c) No utility may make an energy conservation improvement61.6 under this section to a building envelope unless:61.7 (1) it is the primary supplier of energy used for either61.8 space heating or cooling in the building;61.9 (2) the commissioner determines that special circumstances,61.10 that would unduly restrict the availability of conservation61.11 programs, warrant otherwise; or61.12 (3) the utility has been awarded a contract under61.13 subdivision 2a.61.14 (d)(e) The commissioner may, by order, establish a list of 61.15 programs that may be offered as energy conservation improvements 61.16 by a public utility, municipal utility, cooperative electric 61.17 association, or other entity providing conservation services 61.18 pursuant to this section. The list of programs may include 61.19 rebates for high-efficiency appliances, rebates or subsidies for 61.20 high-efficiency lamps, small business energy audits, and 61.21 building recommissioning. The commissioner may, by order, 61.22 change this list to add or subtract programs as the commissioner 61.23 determines is necessary to promote efficient and effective 61.24 conservation programs. 61.25 (f) The commissioner shall ensure that a portion of the 61.26 money spent on residential conservation improvement programs is 61.27 devoted to programs that directly address the needs of renters 61.28 and low-income persons, in proportion to the amount the utility 61.29 has historically spent on such programs based on the most recent 61.30 three-year average relative to the utility's total conservation 61.31 spending under this section, unless an insufficient number of 61.32 appropriate programs are available. 61.33 (e)(g) A utility, a political subdivision, or a nonprofit 61.34 or community organization that has suggested a program, the 61.35 attorney general acting on behalf of consumers and small 61.36 business interests, or a utility customer that has suggested a 62.1 program and is not represented by the attorney general under 62.2 section 8.33 may petition the commission to modify or revoke a 62.3 department decision under this section, and the commission may 62.4 do so if it determines that the program is not cost-effective, 62.5 does not adequately address the residential conservation 62.6 improvement needs of low-income persons, has a long-range 62.7 negative effect on one or more classes of customers, or is 62.8 otherwise not in the public interest. The person petitioning62.9 for commission review has the burden of proof.The commission 62.10 shall reject a petition that, on its face, fails to make a 62.11 reasonable argument that a program is not in the public interest. 62.12 (h) The commissioner may order a public utility to include, 62.13 with the filing of the utility's proposed conservation 62.14 improvement plan under paragraph (a), the results of an 62.15 independent audit of the utility's conservation improvement 62.16 programs and expenditures performed by the department or an 62.17 auditor with experience in the provision of energy conservation 62.18 and energy efficiency services approved by the commissioner and 62.19 chosen by the utility. The audit must specify the energy 62.20 savings or increased efficiency in the use of energy within the 62.21 service territory of the utility that is the result of the 62.22 spending and investments. The audit must evaluate the 62.23 cost-effectiveness of the utility's conservation programs. 62.24 Up to three percent of a utility's conservation spending 62.25 obligation under this section may be used for program 62.26 pre-evaluation, testing, and monitoring and program audit and 62.27 evaluation. 62.28 Sec. 8. Minnesota Statutes 2000, section 216C.051, 62.29 subdivision 6, is amended to read: 62.30 Subd. 6. [ASSESSMENT; APPROPRIATION.] On request by the 62.31 cochairs of the legislative task force and after approval of the 62.32 legislative coordinating commission, the commissioner of the62.33 department of public servicecommerce shall assess from electric62.34 utilitiesall public utilities, generation and transmission 62.35 cooperative electric associations, and municipal power agencies 62.36 providing electric or natural gas services in Minnesota, in 63.1 addition to assessments made under section 216B.62, the amount 63.2 requested for the operation of the task force not to 63.3 exceed $700,000$150,000 in a fiscal year. This authority to63.4 assess continues until the commissioner has assessed a total of63.5 $700,000.The amount assessed under this section is 63.6 appropriated to the director of the legislative coordinating 63.7 commission for those purposes, and is available until expended. 63.8 The department shall apportion those costs among all energy 63.9 utilities in proportion to their respective gross operating 63.10 revenues from the sale of gas or electric service within the 63.11 state during the last calendar year. For the purposes of 63.12 administrative efficiency, the department shall assess energy 63.13 utilities and issue bills in accordance with the billing and 63.14 assessment procedures provided in section 216B.62, to the extent 63.15 that these procedures do not conflict with this subdivision. 63.16 Sec. 9. Minnesota Statutes 2000, section 216C.051, 63.17 subdivision 9, is amended to read: 63.18 Subd. 9. [EXPIRATION.] This section is repealed March 15,63.19 2001June 30, 2005. 63.20 Sec. 10. [216C.052] [RELIABILITY ADMINISTRATOR.] 63.21 Subdivision 1. [RESPONSIBILITIES.] (a) There is 63.22 established the position of reliability administrator in the 63.23 department of commerce. The administrator shall act as a source 63.24 of independent expertise and a technical advisor to the 63.25 commissioner, the commission, the public, and the legislative 63.26 electric energy task force on issues related to the reliability 63.27 of the electric system. In conducting its work, the 63.28 administrator shall: 63.29 (1) model and monitor the use and operation of the energy 63.30 infrastructure in the state, including generation facilities, 63.31 transmission lines, natural gas pipelines, and other energy 63.32 infrastructure; 63.33 (2) develop and present to the commission and parties 63.34 technical analyses of proposed infrastructure projects, and 63.35 provide technical advice to the commission; 63.36 (3) present independent, factual, expert, and technical 64.1 information on infrastructure proposals and reliability issues 64.2 at public meetings hosted by the task force, the environmental 64.3 quality board, the department, or the commission. 64.4 (b) Upon request and subject to resource constraints, the 64.5 administrator shall provide technical assistance regarding 64.6 matters unrelated to applications for infrastructure 64.7 improvements to the task force, the department, or the 64.8 commission. 64.9 (c) The administrator may not advocate for any particular 64.10 outcome in a commission proceeding, but may give technical 64.11 advice to the commission as to the impact on the reliability of 64.12 the energy system of a particular project or projects. The 64.13 administrator must not be considered a party or a participant in 64.14 any proceeding before the commission. 64.15 Subd. 2. [ADMINISTRATIVE ISSUES.] (a) The commissioner may 64.16 select the administrator who shall serve for a four-year term. 64.17 The commissioner shall oversee and direct the work of the 64.18 administrator, annually review the expenses of the 64.19 administrator, and annually approve the budget of the 64.20 administrator. The administrator may hire staff and may 64.21 contract for technical expertise in performing duties when 64.22 existing state resources are required for other state 64.23 responsibilities or when special expertise is required. The 64.24 salary of the administrator is governed by section 15A.0815, 64.25 subdivision 2. 64.26 (b) Costs relating to a specific proceeding, analysis, or 64.27 project are not general administrative costs. For purposes of 64.28 this section, "energy utility" means public utilities, 64.29 generation and transmission cooperative electric associations, 64.30 and municipal power agencies providing natural gas or electric 64.31 service in the state. 64.32 (c) The department of commerce shall pay: 64.33 (1) the general administrative costs of the administrator, 64.34 not to exceed $1,500,000 in a fiscal year, and shall assess 64.35 energy utilities for reimbursement for those administrative 64.36 costs. These costs must be consistent with the budget approved 65.1 by the commissioner under paragraph (a). The department shall 65.2 apportion the costs among all energy utilities in proportion to 65.3 their respective gross operating revenues from sales of gas or 65.4 electric service within the state during the last calendar year, 65.5 and shall then render a bill to each utility on a regular basis; 65.6 and 65.7 (2) costs relating to a specific proceeding analysis or 65.8 project and shall render a bill for reimbursement to the 65.9 specific energy utility or utilities participating in the 65.10 proceeding, analysis, or project directly, either at the 65.11 conclusion of a particular proceeding, analysis, or project, or 65.12 from time to time during the course of the proceeding, analysis, 65.13 or project. 65.14 (d) For purposes of administrative efficiency, the 65.15 department shall assess energy utilities and issue bills in 65.16 accordance with the billing and assessment procedures provided 65.17 in section 216B.62, to the extent that these procedures do not 65.18 conflict with this subdivision. The amount of the bills 65.19 rendered by the department under paragraph (c) must be paid by 65.20 the energy utility into an account in the special revenue fund 65.21 in the state treasury within 30 days from the date of billing 65.22 and is appropriated to the commissioner for the purposes 65.23 provided in this section. The commission shall approve or 65.24 approve as modified a rate schedule providing for the automatic 65.25 adjustment of charges to recover amounts paid by utilities under 65.26 this section. All amounts assessed under this section are in 65.27 addition to amounts appropriated to the commission and the 65.28 department by other law. 65.29 Subd. 3. [EXPIRATION.] This section expires June 30, 2006. 65.30 Sec. 11. [CONSERVATION IMPROVEMENT PLAN; EVALUATION OF 65.31 COOPERATIVE AND MUNICIPAL PROGRAMS.] 65.32 (a) In consultation with the department of commerce, 65.33 cooperative electric associations and municipal utilities shall 65.34 evaluate their energy and capacity conservation programs, 65.35 develop plans for future programs, and report their findings and 65.36 plans to the chairs of the house of representatives and senate 66.1 committees with jurisdiction over energy issues by June 1, 2002. 66.2 Evaluations may be conducted jointly with other entities subject 66.3 to this section, and shall address: 66.4 (1) whether the utility or association has implemented and 66.5 is implementing cost-effective energy conservation programs; 66.6 (2) the availability of basic conservation services and 66.7 programs to customers; 66.8 (3) methodologies that best quantify energy savings, 66.9 cost-effectiveness, and the potential for cost-effective 66.10 conservation improvements; 66.11 (4) the role of capacity conservation in meeting utility 66.12 planning needs and state energy goals; and 66.13 (5) the ability of energy conservation programs to avoid 66.14 the need for construction of generation facilities and 66.15 transmission lines. 66.16 (b) The evaluation must develop program and performance 66.17 goals that recognize customer class, utility service area 66.18 demographics, cost of program delivery, regional economic 66.19 indicators, and utility load shape. The cost of the evaluation 66.20 may be deducted from the utility's or association's conservation 66.21 spending obligation under Minnesota Statutes 2000, section 66.22 216B.241. 66.23 Sec. 12. [COOPERATIVE CONSERVATION INVESTMENT INCREASE 66.24 PHASE-IN.] 66.25 The increase in required conservation improvement 66.26 expenditures by a cooperative electric association that results 66.27 from the amendments in section 5 to Minnesota Statutes, section 66.28 216B.241, subdivision 1b, paragraph (a), clause (1), must be 66.29 phased in as follows: 66.30 (1) at least 25 percent shall be effective in year 2002; 66.31 (2) at least 50 percent shall be effective in year 2003; 66.32 (3) at least 75 percent shall be effective in year 2004; 66.33 and 66.34 (4) all of the increase shall be effective in year 2005 and 66.35 thereafter. 66.36 Sec. 13. [DISTRIBUTED ENERGY RESOURCES.] 67.1 (a) To the extent that cost-effective projects are 67.2 available in the service territory of a utility or association 67.3 providing conservation services under Minnesota Statutes, 67.4 section 216B.241, the utility or association shall use five 67.5 percent of the total amount to be spent on energy conservation 67.6 improvements under Minnesota Statutes, section 216B.241, on: 67.7 (1) projects to construct an electric generating facility 67.8 that utilizes renewable fuels as defined in Minnesota Statutes, 67.9 section 216B.2422, subdivision 1, such as methane or other 67.10 combustible gases derived from the processing of plant or animal 67.11 wastes, biomass fuels such as short-rotation woody or fibrous 67.12 agricultural crops, or other renewable fuel, as its primary fuel 67.13 source; or 67.14 (2) projects to install a distributed generation facility 67.15 of ten megawatts or less of interconnected capacity that is 67.16 fueled by natural gas, renewable fuels, or another similarly 67.17 clean fuel. 67.18 (b) For public utilities, as defined under Minnesota 67.19 Statutes, section 216B.02, subdivision 4, projects under this 67.20 section must be considered energy conservation improvements as 67.21 defined in Minnesota Statutes, section 216B.241. For 67.22 cooperative electric associations and municipal utilities, 67.23 projects under this section must be considered load management 67.24 activities described in Minnesota Statutes, section 216B.241, 67.25 subdivision 1, paragraph (i). 67.26 (c) This section expires May 30, 2006. 67.27 Sec. 14. [TRANSITION.] 67.28 The commission may provide an alternative recovery 67.29 mechanism for the expense of continuing existing approved 67.30 cost-effective projects by a rate-regulated distribution 67.31 cooperative electric association. 67.32 Sec. 15. [CONSERVATION INVESTMENT PROGRAM STUDY.] 67.33 (a) The commissioner of commerce shall study the 67.34 conservation investment program created under Minnesota 67.35 Statutes, section 216B.241, and make recommendations to the 67.36 legislature on changes in the program that will assist the 68.1 program to obtain the maximum energy savings possible from 68.2 spending and investments under the program. The study must 68.3 include, at a minimum: 68.4 (1) a review of administrative burdens imposed by the 68.5 program with the goal to reduce them to the maximum extent 68.6 consistent with ensuring that the program will meet its goal of 68.7 maximum energy savings with program funds; 68.8 (2) identification of spending and investments with high 68.9 potential for saving energy and suggestions for targeting the 68.10 program at those expenditures and investments; and 68.11 (3) appropriate levels of spending and investment under the 68.12 program. 68.13 (b) The commissioner shall solicit written public comment 68.14 on the study and submit a report and a copy of the written 68.15 comments to the committees of the legislature having principal 68.16 jurisdiction on energy matters by November 15, 2001. 68.17 Sec. 16. [EXEMPTION EXTENDED.] 68.18 (a) The commissioner of commerce shall not review the 68.19 exemption under Minnesota Statutes, section 216B.241, 68.20 subdivision 1a, paragraph (b), of a large electric customer 68.21 facility, as defined in Minnesota Statutes, section 216B.241, 68.22 subdivision 1, paragraph (g), from the investment and 68.23 expenditure requirements of Minnesota Statutes, section 68.24 216B.241, subdivision 1a, paragraph (b), for five years from the 68.25 date the exemption was granted, provided the exemption was 68.26 granted before April 15, 2001. 68.27 (b) A large electric customer facility as defined in 68.28 Minnesota Statutes, section 216B.241, subdivision 1, that is 68.29 exempt from the investment and expenditure requirements of 68.30 Minnesota Statutes, section 216B.241, by virtue of a contract 68.31 approved by the public utilities commission prior to April 15, 68.32 2001, under Minnesota Statutes, section 216B.162, shall remain 68.33 exempt from those requirements until April 15, 2006. 68.34 (c) This section does not apply if the customer facility's 68.35 monthly peak measured demand for three consecutive months 68.36 exceeds 110 percent of the annual peak measured demand of the 69.1 facility in the year the exemption was granted. 69.2 Sec. 17. [UNIVERSAL ENERGY SERVICE PROGRAM.] 69.3 The department of commerce shall report to the legislature 69.4 by January 15, 2002, regarding the development of a universal 69.5 energy service program. The purpose of the program is to 69.6 provide energy bill payment and conservation assistance to low- 69.7 and moderate-income energy customers. The report shall include 69.8 proposals for implementing the program, including, but not 69.9 limited to, proposals to establish income eligibility, estimate 69.10 the percentage of income that eligible customers devote to 69.11 energy costs, determine the level of funding required to 69.12 significantly lower the energy burden of eligible customers, 69.13 establish funding collection and distribution methods, and 69.14 measure the impact of charges for the program on all Minnesota 69.15 energy consumers. 69.16 Sec. 18. [APPROPRIATION.] 69.17 The commissioner of commerce shall transfer up to $500,000 69.18 annually of the amounts provided for in section 11, subdivision 69.19 2, to the commissioner of administration for the purposes 69.20 provided in article 1, section 2, as needed to implement that 69.21 section. 69.22 Sec. 19. [EFFECTIVE DATE.] 69.23 Sections 14, 15, and 16 are effective the day following 69.24 final enactment. Sections 4 to 7, 10, 12, 13, and 18 are 69.25 effective January 1, 2002. Section 9 is effective retroactively 69.26 from March 1, 2001. Section 8 is effective July 1, 2001.