2nd Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to energy; providing for comprehensive energy 1.3 conservation, production, and regulatory changes; 1.4 amending Minnesota Statutes 2000, sections 16B.32, 1.5 subdivision 2; 116C.52, subdivisions 4, 10; 116C.53, 1.6 subdivisions 2, 3; 116C.57, subdivisions 1, 2, 4, by 1.7 adding subdivisions; 116C.58; 116C.59, subdivisions 1, 1.8 4; 116C.60; 116C.61, subdivisions 1, 3; 116C.62; 1.9 116C.63, subdivision 2; 116C.645; 116C.65; 116C.66; 1.10 116C.69; 216B.095; 216B.097, subdivision 1; 216B.16, 1.11 subdivision 15; 216B.241, subdivisions 1, 1a, 1b, 1c, 1.12 2; 216B.2421, subdivision 2; 216B.243, subdivisions 3, 1.13 4, 8; 216B.62, subdivision 5; 216C.41; proposing 1.14 coding for new law in Minnesota Statutes, chapters 1.15 16B; 116C; 216B; 452; repealing Minnesota Statutes 1.16 2000, sections 116C.55, subdivisions 2, 3; 116C.57, 1.17 subdivisions 3, 5, 5a; 116C.67; 216B.2421, subdivision 1.18 3. 1.19 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.20 ARTICLE 1 1.21 PUBLIC BUILDING ENERGY CONSERVATION 1.22 Section 1. Minnesota Statutes 2000, section 16B.32, 1.23 subdivision 2, is amended to read: 1.24 Subd. 2. [ENERGY CONSERVATION GOALS
; EFFICIENCY1.25 PROGRAM.] (a)The commissioner of administration in consultation 1.26 with the department of public servicecommerce, in cooperation 1.27 with one or more public utilities or comprehensive energy 1.28 services providers, may conduct a shared-savings program 1.29 involving energy conservation expenditures on state-owned and 1.30 wholly state-leased buildings. The public utility or energy 1.31 services provider shall contract with appropriate state agencies 1.32 to implement energy efficiency improvements in the selected 2.1 buildings. A contract must require the public utility or energy 2.2 services provider to include all energy efficiency improvements 2.3 in selected buildings that are calculated to achieve a cost 2.4 payback within ten years. The contract must require that the 2.5 public utility or energy services provider be repaid solely from 2.6 energy cost savings and only to the extent of energy cost 2.7 savings. Repayments must be interest-free. The goal of the 2.8 program in this paragraph is to demonstrate that through 2.9 effective energy conservation the total energy consumption per 2.10 square foot of state-owned and wholly state-leased buildings 2.11 could be reducedexceed existing energy code by at least 2530 2.12 percent from consumption in the base year of 1990. All agencies 2.13 participating in the programmust report to the commissioner of 2.14 administration their monthly energy usage, building schedules, 2.15 inventory of energy-consuming equipment, and other information 2.16 as needed by the commissioner to manage and evaluate the program. 2.17 (b) The commissioner may exclude from the program of2.18 paragraph (a) a building in which energy conservation measures2.19 are carried out. "Energy conservation measures" means measures2.20 that are applied to a state building that improve energy2.21 efficiency and have a simple return of investment in ten years2.22 or within the remaining period of a lease, whichever time is2.23 shorter, and involves energy conservation, conservation2.24 facilities, renewable energy sources, improvements in operations2.25 and maintenance efficiencies, or retrofit activities.2.26 (c) This subdivision expires January 1, 2001.2.27 Sec. 2. [16B.325] [SUSTAINABLE BUILDING GUIDELINES.] 2.28 The department of administration and the department of 2.29 commerce, with the assistance of other agencies, shall develop 2.30 sustainable building design standards for all new state 2.31 buildings by January 15, 2003. The primary objectives of these 2.32 standards are to ensure that all new state buildings initially 2.33 exceed existing energy code, as established in Minnesota Rules, 2.34 chapter 7676, by 30 percent. The standards must focus on 2.35 achieving the lowest possible lifetime cost for new buildings 2.36 and allow for changes in the standards that encourage continual 3.1 energy conservation improvements in new buildings. The design 3.2 standards must establish sustainability guidelines that include 3.3 air quality and lighting standards and that create and maintain 3.4 a healthy environment and facilitate productivity improvements; 3.5 specify ways to reduce material costs; and must consider the 3.6 long-term operating costs of the building, including the use of 3.7 renewable energy sources and distributed electric energy 3.8 generation that uses a renewable source or natural gas or a fuel 3.9 that is as clean or cleaner than natural gas. The standards 3.10 established under this section are mandatory for all new 3.11 buildings receiving funding from the bond proceeds fund after 3.12 January 1, 2004. 3.13 Sec. 3. [BENCHMARKS FOR EXISTING PUBLIC BUILDINGS.] 3.14 The department of administration shall maintain information 3.15 on energy usage in all public buildings for the purpose of 3.16 establishing energy efficiency benchmarks and energy 3.17 conservation goals. The department shall report preliminary 3.18 energy conservation goals to the chairs of the senate 3.19 telecommunications, energy and utilities committee and the house 3.20 regulated industries committee by January 15, 2002. The 3.21 department shall develop a comprehensive plan by January 15, 3.22 2003, to maximize electrical and thermal energy efficiency in 3.23 existing public buildings through conservation measures having a 3.24 simple payback within ten to 15 years. The plan must detail the 3.25 steps necessary to implement the conservation measures and 3.26 include the projected costs of these measures. The owner or 3.27 operator of a public building subject to this section shall 3.28 provide information to the department of administration 3.29 necessary to accomplish the purposes of this section. 3.30 ARTICLE 2 3.31 JOINT VENTURES 3.32 Section 1. [452.25] [JOINT VENTURES BY UTILITIES.] 3.33 Subdivision 1. [APPLICABILITY.] This section applies to 3.34 all home rule charter and statutory cities, except as provided 3.35 in section 2. 3.36 Subd. 2. [DEFINITIONS.] For purposes of this section: 4.1 (a) "City" means a statutory or home rule charter city, 4.2 section 410.015 to the contrary notwithstanding. 4.3 (b) "Cooperative association" means a cooperative 4.4 association organized under chapter 308A. 4.5 (c) "Governing body" means (1) the city council in a city 4.6 that operates a municipal utility, or (2) a board, commission, 4.7 or body empowered by law, city charter, or ordinance or 4.8 resolution of the city council to control and operate the 4.9 municipal utility. 4.10 (d) "Investor-owned utility" means an entity that provides 4.11 utility services to the public under chapter 216B and that is 4.12 owned by private persons. 4.13 (e) "Municipal power agency" means an organization created 4.14 under sections 453.51 to 453.62. 4.15 (f) "Municipal utility" means a utility owned, operated, or 4.16 controlled by a city to provide utility services. 4.17 (g) "Public utility" or "utility" means a provider of 4.18 electric or water facilities or services or an entity engaged in 4.19 other similar or related operations authorized by law or charter. 4.20 Subd. 3. [AUTHORITY.] (a) Upon the approval of its elected 4.21 utilities commission or, if there be none, its city council, a 4.22 municipal utility may enter into a joint venture with other 4.23 municipal utilities, municipal power agencies, cooperative 4.24 associations, or investor-owned utilities to provide utility 4.25 services. Retail electric utility services provided by a joint 4.26 venture must be within the boundaries of each utility's 4.27 exclusive electric service territory as shown on the map of 4.28 service territories maintained by the department of commerce. 4.29 The terms and conditions of the joint venture are subject to 4.30 ratification by the governing bodies of the respective utilities 4.31 and may include the formation of a corporate or other separate 4.32 legal entity with an administrative and governance structure 4.33 independent of the respective utilities. 4.34 (b) A corporate or other separate legal entity, if formed: 4.35 (1) has the authority and legal capacity and, in the 4.36 exercise of the joint venture, the powers, privileges, 5.1 responsibilities, and duties authorized by this section; 5.2 (2) is subject to the laws and rules applicable to the 5.3 organization, internal governance, and activities of the entity; 5.4 (3) in connection with its property and affairs and in 5.5 connection with property within its control, may exercise any 5.6 and all powers that may be exercised by a natural person or a 5.7 private corporation or other private legal entity in connection 5.8 with similar property and affairs; 5.9 (4) a joint venture that does not include an investor-owned 5.10 utility, may elect to be deemed a municipal utility or a 5.11 cooperative association for purposes of chapter 216B or other 5.12 federal or state law regulating utility operations; and 5.13 (5) a joint venture that includes an investor-owned utility 5.14 must notify the public utilities commission 30 days in advance 5.15 of offering services. Upon a finding by the commission, such 5.16 joint venture will be subject to regulation under chapter 216B. 5.17 (c) Any corporation, if formed, must comply with section 5.18 465.719, subdivisions 9, 10, 11, 12, 13, and 14. The term 5.19 "political subdivision," as it is used in section 465.719, shall 5.20 refer to the city council of a city. 5.21 Subd. 4. [RETAIL CUSTOMERS.] Unless the joint venture's 5.22 retail electric rates, as defined in section 216B.02, 5.23 subdivision 5, of a joint venture that does not include an 5.24 investor-owned utility, are approved by the governing body of 5.25 each municipal utility or municipal power agency and the board 5.26 of directors of each cooperative association that is party to 5.27 the joint venture, the retail electric customers of the joint 5.28 venture, if their number be more than 25, may elect to become 5.29 subject to electric rate regulation by the public utilities 5.30 commission as now provided in chapter 216B. The election is 5.31 subject to and must be carried out according to the procedures 5.32 in section 216B.026 and, for these purposes, each retail 5.33 electric customer of the joint venture is deemed a member or 5.34 stockholder as referred to in section 216B.026. 5.35 Subd. 5. [POWERS.] (a) A joint venture under this section 5.36 has those powers, privileges, responsibilities, and duties of 6.1 the separate utilities entering into the joint venture as the 6.2 joint venture agreement may provide, including the powers under 6.3 paragraph (b), except that: 6.4 (1) with respect to retail electric utility services, a 6.5 joint venture shall not enlarge or extend the service territory 6.6 served by the joint venture, by virtue of the authority granted 6.7 in sections 216B.44, 216B.45, and 216B.47; 6.8 (2) a joint venture may extend service to an existing 6.9 connected load of 2,000 kilowatts or more, pursuant to section 6.10 216B.42, when the load is outside of the assigned service area 6.11 of the joint venture, or of the electric utilities party to the 6.12 joint venture, only if the load is already being served by one 6.13 of the electric utilities party to the joint venture; and 6.14 (3) a privately owned utility, as defined in section 6.15 216B.02, may extend service to an existing connected load of 6.16 2,000 kilowatts or more, pursuant to section 216B.42, when the 6.17 load is located within the assigned service territory of the 6.18 joint venture, or of the electric utilities party to the joint 6.19 venture, only if the load is already being served by that 6.20 privately owned utility. 6.21 The limitations of clauses (1) to (3) do not apply if written 6.22 consent to the action is obtained from the electric utility 6.23 assigned to and serving the affected service territory or 6.24 connected load. 6.25 (b) Joint venture powers include, but are not limited to, 6.26 the authority to: 6.27 (1) finance, own, acquire, construct, and operate 6.28 facilities necessary to provide utility services to retail 6.29 customers of the joint venture, including generation, 6.30 transmission, and distribution facilities, and like facilities 6.31 used in other utility services; 6.32 (2) combine assigned service territories, in whole or in 6.33 part, upon notice to, hearing by, and approval of the public 6.34 utilities commission; 6.35 (3) serve customers in the utilities' service territories 6.36 or in the combined service territory; 7.1 (4) combine, share, or employ administrative, managerial, 7.2 operational, or other staff if combining or sharing will not 7.3 degrade safety, reliability, or customer service standards; 7.4 (5) provide for joint administrative functions, such as 7.5 meter reading and billings; 7.6 (6) purchase or sell utility services at wholesale for 7.7 resale to customers; 7.8 (7) provide conservation programs, other utility programs, 7.9 and public interest programs, such as cold weather shut-off 7.10 protection and conservation spending programs, as required by 7.11 law and rule; and 7.12 (8) participate as the parties deem necessary in providing 7.13 utility services with other municipal utilities, cooperative 7.14 utilities, investor-owned utilities, or other entities, public 7.15 or private. 7.16 (c) Notwithstanding any contrary provision within this 7.17 section, a joint venture formed under this section may engage in 7.18 wholesale utility services unless the municipal utility, 7.19 municipal power agency, cooperative association, or 7.20 investor-owned utility party to the joint venture is prohibited 7.21 under current law from conducting that activity; but, in any 7.22 case, the joint venture may provide wholesale services to a 7.23 municipal utility, a cooperative association, or an 7.24 investor-owned utility that is party to the joint venture. 7.25 (d) This subdivision does not limit the authority of a 7.26 joint venture to exercise rights of eminent domain for other 7.27 utility purposes to the same extent as is permitted of those 7.28 utilities party to the joint venture. 7.29 Subd. 6. [CONSTRUCTION.] (a) The powers conferred by this 7.30 section are in addition to the powers conferred by other law or 7.31 charter. A joint venture under this section, and a municipal 7.32 utility with respect to any joint venture under this section, 7.33 has the powers necessary to effect the intent and purpose of 7.34 this section, including, but not limited to, the expenditure of 7.35 public funds and the transfer of real or personal property in 7.36 accordance with the terms and conditions of the joint venture 8.1 and the joint venture agreement. This section is complete in 8.2 itself with respect to the formation and operation of a joint 8.3 venture under this section and with respect to a municipal 8.4 utility, a cooperative association, or an investor-owned utility 8.5 party to a joint venture related to their creation of and 8.6 dealings with the joint venture, without regard to other laws or 8.7 city charter provisions that do not specifically address or 8.8 refer to this section or a joint venture created under this 8.9 section. 8.10 (b) This section must not be construed to supersede or 8.11 modify: 8.12 (1) the power of a city council conferred by charter to 8.13 overrule or override any action of a governing body other than 8.14 the actions of the joint venture; 8.15 (2) chapter 216B; 8.16 (3) any referendum requirements applicable to the creation 8.17 of a new electric utility by a municipality under section 8.18 216B.46 or 216B.465; or 8.19 (4) any powers, privileges, or authority or any duties or 8.20 obligations of a municipal utility, municipal power agency, or 8.21 cooperative association acting as a separate legal entity 8.22 without reference to a joint venture created under this section. 8.23 Sec. 2. [EXCEPTION.] 8.24 Laws 1996, chapter 300, section 1, as amended by Laws 1997, 8.25 chapter 232, section 1, shall govern joint ventures created 8.26 under it and those joint ventures are not governed by this 8.27 section. 8.28 Sec. 3. [EFFECTIVE DATE.] 8.29 Sections 1 and 2 are effective the day following final 8.30 enactment. 8.31 ARTICLE 3 8.32 MISCELLANEOUS 8.33 Section 1. [216B.1611] [INTERCONNECTION OF ON-SITE 8.34 DISTRIBUTED GENERATION.] 8.35 Subdivision 1. [PURPOSE.] The purpose of this section is 8.36 to: (1) establish the terms and conditions that govern the 9.1 interconnection and parallel operation of on-site distributed 9.2 generation; (2) to provide cost savings and reliability benefits 9.3 to customers; (3) to establish technical requirements that will 9.4 promote the safe and reliable parallel operation of on-site 9.5 distributed generation resources; (4) to enhance both the 9.6 reliability of electric service and economic efficiency in the 9.7 production and consumption of electricity; and (5) to promote 9.8 the use of distributed resources in order to provide electric 9.9 system benefits during periods of capacity constraints. 9.10 Subd. 2. [DISTRIBUTED GENERATION; GENERIC PROCEEDING.] (a) 9.11 The commission shall initiate a proceeding within 30 days of the 9.12 effective date of this section, to establish, by order, generic 9.13 standards for utility tariffs for the interconnection and 9.14 parallel operation of distributed generation of no more than ten 9.15 megawatts of interconnected capacity. At a minimum, these 9.16 tariff standards must be consistent with federal requirements 9.17 and any distributed generation interconnection operational and 9.18 safety standards adopted by the institute of electrical and 9.19 electronics engineers, and must: 9.20 (1) provide for the low-cost, safe, and standardized 9.21 interconnection of facilities fueled by natural gas or a 9.22 renewable fuel, or another similarly clean fuel or combination 9.23 of fuels. These facilities may include, but are not limited to, 9.24 fuel cells, microturbines, wind turbines, or solar modules; 9.25 (2) take into account differing system requirements and 9.26 hardware, as well as the overall demand load requirements of 9.27 individual utilities; 9.28 (3) encourage and compensate for the addition of 9.29 distributed generation power resources while reducing the cost 9.30 to the utility's customers for energy, capacity, transmission, 9.31 and distribution; 9.32 (4) minimize and avoid increases in the rates of other 9.33 customers on the utility's system; 9.34 (5) allow for reasonable terms and conditions, consistent 9.35 with the cost and operating characteristics of the various 9.36 technologies, so that a utility can reasonably be assured of the 10.1 reliable, safe, and efficient operation of the interconnected 10.2 equipment; 10.3 (6) ensure that backup power, supplemental power, and 10.4 maintenance power are available to all customers and customer 10.5 classes that desire this service; and 10.6 (7) establish: (i) a standard interconnection agreement 10.7 that sets forth the contractual conditions under which a company 10.8 and a customer agree that one or more facilities may be 10.9 interconnected with the company's utility system; and (ii) a 10.10 standard application for interconnection and parallel operation 10.11 with the utility system. 10.12 (b) The commission may develop financial incentives based 10.13 on a public utility's performance in encouraging residential and 10.14 small business customers to participate in on-site generation. 10.15 Subd. 3. [DISTRIBUTED GENERATION TARIFF.] Within 90 days 10.16 of the issuance of an order under subdivision 2: 10.17 (1) each public utility providing electric service at 10.18 retail shall file a distributed generation tariff consistent 10.19 with that order, for commission approval or approval with 10.20 modification; and 10.21 (2) each municipal utility and cooperative electric 10.22 association shall adopt a distributed generation tariff that 10.23 addresses the issues included in the commission's order. 10.24 Sec. 2. [ALTERNATIVE AND RENEWABLE ENERGY SOURCE 10.25 DEVELOPMENT.] 10.26 The legislative electric energy task force shall evaluate 10.27 options and priorities related to energy source development of 10.28 resources derived from agricultural production and to energy 10.29 options available in rural parts of the state. These energy 10.30 sources include, but are not limited to: 10.31 (1) alternative diesel engine fuels derived from soybean 10.32 and other agricultural plant oils or animal fats; 10.33 (2) ethanol derived from grains or other agricultural 10.34 products or by-products; 10.35 (3) methane or other combustible gases derived from the 10.36 processing of plant or animal wastes; 11.1 (4) biomass fuels such as short-rotation woody or fibrous 11.2 agricultural crops produced for conversion to useful energy; 11.3 (5) use of corn and corn by-products as a fuel for electric 11.4 generation, including for cogeneration facilities; and 11.5 (6) further development of the solar, wind, and biomass 11.6 energy potential in the state. 11.7 ARTICLE 4 11.8 CONSUMER PROTECTION 11.9 Section 1. Minnesota Statutes 2000, section 216B.095, is 11.10 amended to read: 11.11 216B.095 [DISCONNECTION DURING COLD WEATHER.] 11.12 The commission shall amend its rules governing 11.13 disconnection of residential utility customers who are unable to 11.14 pay for utility service during cold weather to include the 11.15 following: 11.16 (1) coverage of customers whose household income is less 11.17 than 185 percent of the federal poverty level50 percent of the 11.18 state median income; 11.19 (2) a requirement that a customer who pays the utility at 11.20 least ten percent of the customer's income or the full amount of 11.21 the utility bill, whichever is less, in a cold weather month 11.22 cannot be disconnected during that month. The customer's income 11.23 means the actual monthly income of the customer or the average 11.24 monthly income of the customer computed on an annual calendar 11.25 year, whichever is less, and does not include any amount 11.26 received for energy assistance; 11.27 (3) that the ten percent figure in clause (2) must be 11.28 prorated between energy providers proportionate to each 11.29 provider's share of the customer's total energy costs where the 11.30 customer receives service from more than one provider; 11.31 (4) that a customer's household income does not include any11.32 amount received for energy assistance;11.33 (5)verification of income by the local energy assistance 11.34 provider or the utility, unless the customer is automatically 11.35 eligible for protection against disconnection as a recipient of 11.36 any form of public assistance, including energy assistance, that 12.1 uses income eligibility in an amount at or below the income 12.2 eligibility in clause (1); and12.3 (6)(5) a requirement that the customer receive , from the12.4 local energy assistance provider or other entity, budget12.5 counseling and referralreferrals to weatherization, 12.6 conservation, or other programs likely to reduce the 12.7 customer's consumption ofenergy bills; and 12.8 (6) a requirement that customers who have demonstrated an 12.9 inability to pay on forms provided for that purpose by the 12.10 utility, and who make reasonably timely payments to the utility 12.11 under a payment plan that considers the financial resources of 12.12 the household, cannot be disconnected from utility service from 12.13 October 15 through April 15. A customer who is receiving energy 12.14 assistance is deemed to have demonstrated an inability to pay. 12.15 For the purpose of clause (2), the "customer's income" means the 12.16 actual monthly income of the customer except for a customer who 12.17 is normally employed only on a seasonal basis and whose annual 12.18 income is over 135 percent of the federal poverty level, in 12.19 which case the customer's income is the average monthly income 12.20 of the customer computed on an annual calendar year basis. 12.21 Sec. 2. Minnesota Statutes 2000, section 216B.097, 12.22 subdivision 1, is amended to read: 12.23 Subdivision 1. [APPLICATION; NOTICE TO RESIDENTIAL 12.24 CUSTOMER.] (a) A municipal utility or a cooperative electric 12.25 association must not disconnect the utility service of a 12.26 residential customer during the period between October 15 and 12.27 April 15 if the disconnection affects the primary heat source 12.28 for the residential unit when the following conditions are met: 12.29 (1) the disconnection would occur during the period between12.30 October 15 and April 15;12.31 (2)the customer has declared inability to pay on forms 12.32 provided by the utility. For the purposes of this clause, a 12.33 customer that is receiving energy assistance is deemed to have 12.34 demonstrated an inability to pay; 12.35 (3)(2) the household income of the customer is less than 12.36 185 percent of the federal poverty level, as documented by the13.1 customer to the utility; and50 percent of the state median 13.2 income; 13.3 (3) verification of income may be conducted by the local 13.4 energy assistance provider or the utility, unless the customer 13.5 is automatically eligible for protection against disconnection 13.6 as a recipient of any form of public assistance, including 13.7 energy assistance that uses income eligibility in an amount at 13.8 or below the income eligibility in clause (2); 13.9 (4) the customer'sa customer whose account is current for 13.10 the billing period immediately prior to October 15 or the13.11 customer has enteredwho, at any time, enters into a payment 13.12 schedule that considers the financial resources of the household 13.13 and is reasonably current with payments under the schedule; and 13.14 (5) the customer receives referrals to energy assistance 13.15 programs, weatherization, conservation, or other programs likely 13.16 to reduce the customer's energy bills. 13.17 (b) A municipal utility or a cooperative electric 13.18 association must, between August 15 and October 15 of each year, 13.19 notify all residential customers of the provisions of this 13.20 section. 13.21 Sec. 3. [216B.098] [RESIDENTIAL CUSTOMER PROTECTIONS.] 13.22 Subdivision 1. [APPLICABILITY.] The provisions of this 13.23 section apply to residential customers of public utilities, 13.24 municipal utilities, and cooperative electric associations. 13.25 Each municipal utility and cooperative electric association may 13.26 establish terms and conditions for the plans and agreements 13.27 required under subdivisions 2, 3, and 4. 13.28 Subd. 2. [BUDGET BILLING PLANS.] A utility shall offer a 13.29 customer a budget billing plan for payment of charges for 13.30 service, including adequate notice to customers prior to 13.31 changing budget payment amounts. Municipal utilities having 13.32 3,000 or fewer customers are exempt from this requirement. 13.33 Municipal utilities having more than 3,000 customers shall 13.34 implement this requirement within two years of the effective 13.35 date of this chapter. 13.36 Subd. 3. [PAYMENT AGREEMENTS.] A utility shall offer a 14.1 payment agreement for the payment of arrears. 14.2 Subd. 4. [UNDERCHARGES.] A utility shall offer a payment 14.3 agreement to customers who have been undercharged if no culpable 14.4 conduct by the customer or resident of the customer's household 14.5 caused the undercharge. The agreement must cover a period equal 14.6 to the time over which the undercharge occurred or a different 14.7 time period that is mutually agreeable to the customer and the 14.8 utility. No interest or delinquency fee may be charged under 14.9 this agreement. 14.10 Subd. 5. [MEDICALLY NECESSARY EQUIPMENT.] A utility shall 14.11 reconnect or continue service to a customer's residence where a 14.12 medical emergency exists or where medical equipment requiring 14.13 electricity is necessary to sustain life is in use, provided 14.14 that the utility receives from a medical doctor written 14.15 certification, or initial certification by telephone and written 14.16 certification within five business days, that failure to 14.17 reconnect or continue service will impair or threaten the health 14.18 or safety of a resident of the customer's household. The 14.19 customer must enter into a payment agreement. 14.20 Subd. 6. [COMMISSION AUTHORITY.] In addition to any other 14.21 authority, the commission has the authority to resolve customer 14.22 complaints against a public utility, as defined in section 14.23 216B.02, subdivision 4, whether or not the complaint involves a 14.24 violation of this chapter. The commission may delegate this 14.25 authority to commission staff as it deems appropriate. 14.26 Sec. 4. Minnesota Statutes 2000, section 216B.16, 14.27 subdivision 15, is amended to read: 14.28 Subd. 15. [LOW-INCOME RATEPROGRAMS ; REPORT.] (a) The 14.29 commission may consider ability to pay as a factor in setting 14.30 utility rates and may establish programs for low-income 14.31 residential ratepayers in order to ensure affordable, reliable, 14.32 and continuous service to low-income utility customers. The14.33 commission shall order a pilot program for at least one14.34 utility. In ordering pilot programs, the commission shall14.35 consider the following:14.36 (1) the potential for low-income programs to provide15.1 savings to the utility for all collection costs including but15.2 not limited to: costs of disconnecting and reconnecting15.3 residential ratepayers' service, all activities related to the15.4 utilities' attempt to collect past due bills, utility working15.5 capital costs, and any other administrative costs related to15.6 inability to pay programs and initiatives;15.7 (2) the potential for leveraging federal low-income energy15.8 dollars to the state; and15.9 (3) the impact of energy costs as a percentage of the total15.10 income of a low-income residential customer.15.11 (b) In determining the structure of the pilot utility15.12 program, the commission shall:15.13 (1) consult with advocates for and representatives of15.14 low-income utility customers, administrators of energy15.15 assistance and conservation programs, and utility15.16 representatives;15.17 (2) coordinate eligibility for the program with the state15.18 and federal energy assistance program and low-income residential15.19 energy programs, including weatherization programs; and15.20 (3) evaluate comprehensive low-income programs offered by15.21 utilities in other states.The purpose of the low-income 15.22 programs is to lower the percentage of income that low-income 15.23 households devote to energy bills, to increase customer 15.24 payments, and to lower the utility costs associated with 15.25 customer account collection activities. In ordering low-income 15.26 programs, the commission may require public utilities to file 15.27 program evaluations, including the coordination of other 15.28 available low-income bill payment and conservation resources and 15.29 the effect of the program on: 15.30 (1) reducing the percentage of income that participating 15.31 households devote to energy bills; 15.32 (2) service disconnections; and 15.33 (3) customer payment behavior, utility collection costs, 15.34 arrearages, and bad debt. 15.35 (c) The commission shall implement at least one pilot15.36 project by January 1, 1995, and shall allow a utility required16.1 to implement a pilot project to recover the net costs of the16.2 project in the utility's rates.16.3 (d) The commission, in conjunction with the commissioner of16.4 the department of public service and the commissioner of16.5 economic security, shall review low-income rate programs and16.6 shall report to the legislature by January 1, 1998. The report16.7 must include:16.8 (1) the increase in federal energy assistance money16.9 leveraged by the state as a result of this program;16.10 (2) the effect of the program on low-income customer's16.11 ability to pay energy costs;16.12 (3) the effect of the program on utility customer bad debt16.13 and arrearages;16.14 (4) the effect of the program on the costs and numbers of16.15 utility disconnections and reconnections and other costs16.16 incurred by the utility in association with inability to pay16.17 programs;16.18 (5) the ability of the utility to recover the costs of the16.19 low-income program without a general rate change;16.20 (6) how other ratepayers have been affected by this16.21 program;16.22 (7) recommendations for continuing, eliminating, or16.23 expanding the low-income pilot program; and16.24 (8) how general revenue funds may be utilized in16.25 conjunction with low-income programs.16.26 ARTICLE 5 16.27 INCENTIVE PAYMENTS 16.28 Section 1. Minnesota Statutes 2000, section 216C.41, is 16.29 amended to read: 16.30 216C.41 [RENEWABLE ENERGY PRODUCTION INCENTIVE.] 16.31 Subdivision 1. [DEFINITIONS.] (a) The definitions in this 16.32 subdivision apply to this section. 16.33 (b) "Qualified hydroelectric facility" means a 16.34 hydroelectric generating facility in this state that: 16.35 (1) is located at the site of a dam, if the dam was in 16.36 existence as of March 31, 1994; and 17.1 (2) either (i) begins generating electricity after July 1, 17.2 1994; or (ii) is generating electricity as of June 30, 2001, and 17.3 undergoes substantial refurbishing after that date, to be 17.4 completed by December 31, 2005. 17.5 (c) "Qualified wind energy conversion facility" means a 17.6 wind energy conversion system that: 17.7 (1) produces two megawatts or less of electricity as 17.8 measured by nameplate rating and begins generating electricity 17.9 after June 30, 1997, and before July 1, 1999; 17.10 (2) begins generating electricity after June 30, 1999, 17.11 produces two megawatts or less of electricity as measured by 17.12 nameplate rating, and is: 17.13 (i) located within one county and owned by a natural person 17.14 who owns the land where the facility is sited; 17.15 (ii) owned, in whole or in part, but in no event less than 17.16 51 percent by aone or more Minnesota small 17.17 businessbusinesses as defined in section 645.445; 17.18 (iii) owned by a nonprofit organization; or 17.19 (iv) owned by a tribal council if the facility is located 17.20 within the boundaries of the reservation; or 17.21 (3) begins generating electricity after June 30, 1999, 17.22 produces seven megawatts or less of electricity as measured by 17.23 nameplate rating, and: 17.24 (i) is owned by a cooperative organized under chapter 308A; 17.25 and 17.26 (ii) all shares and membership in the cooperative are held 17.27 by natural persons or estates, at least 51 percent of whom 17.28 reside in a county or contiguous to a county where the wind 17.29 energy production facilities of the cooperative are located. 17.30 (d) "Qualified on-farm biogas recovery facility" means an 17.31 anaerobic digester system that: 17.32 (1) is located at the site of an agricultural operation; 17.33 (2) is owned by a natural person, or an entity that is 17.34 qualified to own and operate a farm under section 500.24, who or 17.35 that owns or rents the land where the facility is located; and 17.36 (3) begins generating electricity after July 1, 2001. 18.1 (e) "Anaerobic digester system" means a system of 18.2 components that processes animal waste based on the absence of 18.3 oxygen and produces gas used to generate electricity. 18.4 Subd. 2. [INCENTIVE PAYMENT.] (a) Incentive payments shall18.5 must be made according to this section to (1) the owner of a 18.6 qualified on-farm biogas recovery facility; (2) the owner or 18.7 operator of a qualified hydropower facility or qualified wind 18.8 energy conversion facility for electric energy generated and 18.9 sold by the facility; or , for(3) except as provided in 18.10 paragraph (b), a publicly owned hydropower facility ,for 18.11 electric energy that is generated by the facility and used by 18.12 the owner of the facility outside the facility. 18.13 (b) For a facility that is publicly owned and in need of 18.14 substantial refurbishment and repair, the incentive payment 18.15 shall be made to the public owner of the facility to finance 18.16 structural repairs and replacement of structural components. 18.17 (c) Payment may only be made upon receipt by the 18.18 commissioner of finance of an incentive payment application that 18.19 establishes that the applicant is eligible to receive an 18.20 incentive payment and that satisfies other requirements the 18.21 commissioner deems necessary. The application shallmust be in 18.22 a form and submitted at a time the commissioner establishes. 18.23 (d) There is annually appropriated from the general fund 18.24 sums sufficient to make the payments required under this section. 18.25 Subd. 3. [ELIGIBILITY WINDOW.] Payments may be made under 18.26 this section only for electricity generated: 18.27 (1) from a qualified hydroelectric facility that is 18.28 operational and generating electricity before December 31, 18.29 20012002, or that undergoes substantial refurbishing after June 18.30 30, 2001, to be completed by December 31, 2005; or18.31 (2) from a qualified wind energy conversion facility that 18.32 is operational and generating electricity before January 1, 18.33 2005; or 18.34 (3) from a qualified on-farm biogas recovery facility from 18.35 July 1, 2001, through December 31, 2015. 18.36 Subd. 4. [PAYMENT PERIOD.] A facility may receive payments 19.1 under this section for a ten-year period. No payment under this 19.2 section may be made for electricity generated: 19.3 (1) by a qualified hydroelectric facility after December 19.4 31, 2010, or December 31, 2015, if the facility undergoes 19.5 substantial refurbishing after June 30, 2001; or19.6 (2) by a qualified wind energy conversion facility after 19.7 December 31, 2015; or 19.8 (3) by a qualified on-farm biogas recovery facility after 19.9 December 31, 2015. 19.10 The payment period begins and runs consecutively from the 19.11 first year in which electricity generated from the facility is 19.12 eligible for incentive payment. 19.13 Subd. 5. [AMOUNT OF PAYMENT.] (a) An incentive payment is 19.14 based on the number of kilowatt hours of electricity generated. 19.15 The amount of the payment is 1.5 cents per kilowatt hour. For 19.16 electricity generated by qualified wind energy conversion 19.17 facilities, the incentive payment under this section is limited 19.18 to no more than 100125 megawatts of nameplate capacity. During 19.19 any period in which qualifying claims for incentive payments 19.20 exceed 100125 megawatts of nameplate capacity, the payments 19.21 must be made to producers in the order in which the production 19.22 capacity was brought into production. 19.23 (b) Beginning January 1, 2002, a qualified wind energy 19.24 conversion facility defined under subdivision 1, paragraph (c), 19.25 clause (1), (2), or (3), may not be located within five miles of 19.26 another qualified wind energy conversion facility constructed 19.27 within the same calendar year and owned by the same person. For 19.28 the purposes of this paragraph, the department shall determine 19.29 that the same person owns two qualified wind energy conversion 19.30 facilities when the underlying ownership structure contains 19.31 similar persons or entities, other than a person or entity that 19.32 provides equity financing, even if the ownership shares differ 19.33 between the facilities. 19.34 Subd. 6. [CURE RIGHTS.] If, during the incentive payment 19.35 period, a qualified facility loses the right to receive 19.36 incentive payments because of noncompliance with this section, 20.1 the qualified facility need only file an application to be 20.2 eligible to again receive the incentive payments upon cure of 20.3 the noncompliance. 20.4 [EFFECTIVE DATE.] This section is effective July 1, 2001. 20.5 ARTICLE 6 20.6 DISTRIBUTION RELIABILITY 20.7 Section 1. [216B.81] [STANDARDS FOR DISTRIBUTION 20.8 UTILITIES.] 20.9 Subdivision 1. [STANDARDS.] (a) The commission and each 20.10 cooperative electric association and municipal utility shall 20.11 adopt standards for safety, reliability, and service quality for 20.12 distribution utilities. Standards for cooperative electric 20.13 associations and municipal utilities should be as consistent as 20.14 possible with the commission standards. 20.15 (b) Reliability standards must be based on the system 20.16 average interruption frequency index, system average 20.17 interruption duration index, and customer average interruption 20.18 duration index measurement indices. Service quality standards 20.19 must specify, if technically and administratively feasible: 20.20 (1) average call center response time; 20.21 (2) customer disconnection rate; 20.22 (3) meter-reading frequency; 20.23 (4) complaint resolution response time; and 20.24 (5) service extension request response time. 20.25 (c) Minimum performance standards developed under this 20.26 section must treat similarly situated distribution systems 20.27 similarly and recognize differing characteristics of system 20.28 design and hardware. 20.29 (d) Electric distribution utilities shall comply with all 20.30 applicable governmental and industry standards required for the 20.31 safety, design, construction, and operation of electric 20.32 distribution facilities, including section 326.243. 20.33 Subd. 2. [DEFINITIONS.] For the purpose of this section, 20.34 the terms defined in this subdivision have the meanings given 20.35 them. 20.36 (a) The "system average interruption frequency index" is 21.1 the average number of interruptions per customer per year. It 21.2 is determined by dividing the total annual number of customer 21.3 interruptions by the average number of customers served during 21.4 the year. 21.5 (b) The "system average interruption duration index" is the 21.6 average customer-minutes of interruption per customer. It is 21.7 determined by dividing the annual sum of customer-minutes of 21.8 interruption by the average number of customers served during 21.9 the year. 21.10 (c) The "customer average interruption duration index" is 21.11 the average customer-minutes of interruption per customer 21.12 interruption. It approximates the average length of time 21.13 required to complete service restoration. It is determined by 21.14 dividing the annual sum of all customer-minutes of interruption 21.15 durations by the annual number of customer interruptions. 21.16 ARTICLE 7 21.17 SITING AND ROUTING OF 21.18 POWER PLANTS AND TRANSMISSION LINES 21.19 Section 1. Minnesota Statutes 2000, section 116C.52, 21.20 subdivision 4, is amended to read: 21.21 Subd. 4. [HIGH VOLTAGE TRANSMISSION LINE.] "High voltage 21.22 transmission line" means a conductor of electric energy and 21.23 associated facilities designed for and capable of operation at a 21.24 nominal voltage of 200100 kilovolts or more , except that the21.25 board, by rule, may exempt lines pursuant to section 116C.57,21.26 subdivision 5. 21.27 Sec. 2. Minnesota Statutes 2000, section 116C.52, 21.28 subdivision 10, is amended to read: 21.29 Subd. 10. [UTILITY.] "Utility" shall mean any entity 21.30 engaged or intending to engage in this state in the generation, 21.31 transmission or distribution of electric energy including, but 21.32 not limited to, a private investor owned utility, cooperatively 21.33 owned utility, and a public or municipally owned utility. 21.34 Sec. 3. Minnesota Statutes 2000, section 116C.53, 21.35 subdivision 2, is amended to read: 21.36 Subd. 2. [JURISDICTION.] The board is hereby given the 22.1 authority to provide for site and route selection for large 22.2 electric power facilities. The board shall issue permits for 22.3 large electric power facilities in a timely fashion. When the 22.4 public utilities commission has determined the need for the 22.5 project under section 216B.243 or 216B.2425, questions of need, 22.6 including size, type, and timing; alternative system 22.7 configurations; and voltage are not within the board's siting 22.8 and routing authority and must not be included in the scope of 22.9 environmental review conducted under sections 116C.51 to 116C.69. 22.10 Sec. 4. Minnesota Statutes 2000, section 116C.53, 22.11 subdivision 3, is amended to read: 22.12 Subd. 3. [INTERSTATE ROUTES.] If a route is proposed in 22.13 two or more states, the board shall attempt to reach agreement 22.14 with affected states on the entry and exit points prior 22.15 to authorizing the construction of thedesignating a route. The 22.16 board, in discharge of its duties pursuant to sections 116C.51 22.17 to 116C.69 may make joint investigations, hold joint hearings 22.18 within or without the state, and issue joint or concurrent 22.19 orders in conjunction or concurrence with any official or agency 22.20 of any state or of the United States. The board may negotiate 22.21 and enter into any agreements or compacts with agencies of other 22.22 states, pursuant to any consent of Congress, for cooperative 22.23 efforts in certifying the construction, operation, and 22.24 maintenance of large electric power facilities in accord with 22.25 the purposes of sections 116C.51 to 116C.69 and for the 22.26 enforcement of the respective state laws regarding such 22.27 facilities. 22.28 Sec. 5. Minnesota Statutes 2000, section 116C.57, 22.29 subdivision 1, is amended to read: 22.30 Subdivision 1. [ DESIGNATION OF SITES SUITABLE FOR SPECIFIC22.31 FACILITIES; REPORTSSITE PERMIT.] A utility must apply to the22.32 board in a form and manner prescribed by the board for22.33 designation of a specific site for a specific size and type of22.34 facility. The application shall contain at least two proposed22.35 sites. In the event a utility proposes a site not included in22.36 the board's inventory of study areas, the utility shall specify23.1 the reasons for the proposal and shall make an evaluation of the23.2 proposed site based upon the planning policies, criteria and23.3 standards specified in the inventory. Pursuant to sections23.4 116C.57 to 116C.60, the board shall study and evaluate any site23.5 proposed by a utility and any other site the board deems23.6 necessary which was proposed in a manner consistent with rules23.7 adopted by the board concerning the form, content, and23.8 timeliness of proposals for alternate sites. No site23.9 designation shall be made in violation of the site selection23.10 standards established in section 116C.55. The board shall23.11 indicate the reasons for any refusal and indicate changes in23.12 size or type of facility necessary to allow site designation.23.13 Within a year after the board's acceptance of a utility's23.14 application, the board shall decide in accordance with the23.15 criteria specified in section 116C.55, subdivision 2, the23.16 responsibilities, procedures and considerations specified in23.17 section 116C.57, subdivision 4, and the considerations in23.18 chapter 116D which proposed site is to be designated. The board23.19 may extend for just cause the time limitation for its decision23.20 for a period not to exceed six months. When the board23.21 designates a site, it shall issue a certificate of site23.22 compatibility to the utility with any appropriate conditions.23.23 The board shall publish a notice of its decision in the State23.24 Register within 30 days of site designation. No large electric23.25 power generating plant shall be constructed except on a site23.26 designated by the board.No person may construct a large 23.27 electric generating plant without a site permit from the board. 23.28 A large electric generating plant may be constructed only on a 23.29 site approved by the board. The board must incorporate into one 23.30 proceeding the route selection for a high voltage transmission 23.31 line that is directly associated with and necessary to 23.32 interconnect the large electric generating plant to the 23.33 transmission system and whose need is certified as part of the 23.34 generating plant project by the public utilities commission. 23.35 Sec. 6. Minnesota Statutes 2000, section 116C.57, 23.36 subdivision 2, is amended to read: 24.1 Subd. 2. [ DESIGNATION OF ROUTES; PROCEDUREROUTE 24.2 PERMIT.] A utility shall apply to the board in a form and manner24.3 prescribed by the board for a permit for the construction of a24.4 high voltage transmission line. The application shall contain24.5 at least two proposed routes. Pursuant to sections 116C.57 to24.6 116C.60, the board shall study, and evaluate the type, design,24.7 routing, right-of-way preparation and facility construction of24.8 any route proposed in a utility's application and any other24.9 route the board deems necessary which was proposed in a manner24.10 consistent with rules adopted by the board concerning the form,24.11 content, and timeliness of proposals for alternate routes24.12 provided, however, that the board shall identify the alternative24.13 routes prior to the commencement of public hearings thereon24.14 pursuant to section 116C.58. Within one year after the board's24.15 acceptance of a utility's application, the board shall decide in24.16 accordance with the criteria and standards specified in section24.17 116C.55, subdivision 2, and the considerations specified in24.18 section 116C.57, subdivision 4, which proposed route is to be24.19 designated. The board may extend for just cause the time24.20 limitation for its decision for a period not to exceed 90 days.24.21 When the board designates a route, it shall issue a permit for24.22 the construction of a high voltage transmission line specifying24.23 the type, design, routing, right-of-way preparation and facility24.24 construction it deems necessary and with any other appropriate24.25 conditions. The board may order the construction of high24.26 voltage transmission line facilities which are capable of24.27 expansion in transmission capacity through multiple circuiting24.28 or design modifications. The board shall publish a notice of24.29 its decision in the state register within 30 days of issuance of24.30 the permit. No high voltage transmission line shall be24.31 constructed except on a route designated by the board, unless it24.32 was exempted pursuant to subdivision 5.No person may construct 24.33 a high voltage transmission line without a route permit from the 24.34 board. A high voltage transmission line may be constructed only 24.35 along a route approved by the board. 24.36 Sec. 7. Minnesota Statutes 2000, section 116C.57, is 25.1 amended by adding a subdivision to read: 25.2 Subd. 2a. [APPLICATION.] Any person seeking to construct a 25.3 large electric power generating plant or a high voltage 25.4 transmission line must apply to the board for a site or route 25.5 permit. The application shall contain such information as the 25.6 board may require. The applicant shall propose at least two 25.7 sites for a large electric power generating plant and two routes 25.8 for a high voltage transmission line. The chair of the board 25.9 shall determine whether an application is complete and advise 25.10 the applicant of any deficiencies within ten days of receipt. 25.11 An application is not incomplete if information not in the 25.12 application can be obtained from the applicant during the first 25.13 phase of the process and that information is not essential for 25.14 notice and initial public meetings. 25.15 Sec. 8. Minnesota Statutes 2000, section 116C.57, is 25.16 amended by adding a subdivision to read: 25.17 Subd. 2b. [NOTICE OF APPLICATION.] Within 15 days after 25.18 submission of an application to the board, the applicant shall 25.19 publish notice of the application in a legal newspaper of 25.20 general circulation in each county in which the site or route is 25.21 proposed and send a copy of the application by certified mail to 25.22 any regional development commission, county, incorporated 25.23 municipality, and township in which any part of the site or 25.24 route is proposed. Within the same 15 days, the applicant shall 25.25 also send a notice of the submission of the application and 25.26 description of the proposed project to each owner whose property 25.27 is on or adjacent to any of the proposed sites for the power 25.28 plant or along any of the proposed routes for the transmission 25.29 line. The notice shall identify a location where a copy of the 25.30 application can be reviewed. For the purpose of giving mailed 25.31 notice under this subdivision, owners shall be those shown on 25.32 the records of the county auditor or, in any county where tax 25.33 statements are mailed by the county treasurer, on the records of 25.34 the county treasurer; but other appropriate records may be used 25.35 for this purpose. The failure to give mailed notice to a 25.36 property owner, or defects in the notice, shall not invalidate 26.1 the proceedings, provided a bona fide attempt to comply with 26.2 this subdivision has been made. Within the same 15 days, the 26.3 applicant shall also send the same notice of the submission of 26.4 the application and description of the proposed project to those 26.5 persons who have requested to be placed on a list maintained by 26.6 the board for receiving notice of proposed large electric 26.7 generating power plants and high voltage transmission lines. 26.8 Sec. 9. Minnesota Statutes 2000, section 116C.57, is 26.9 amended by adding a subdivision to read: 26.10 Subd. 2c. [ENVIRONMENTAL REVIEW.] The board shall prepare 26.11 an environmental impact statement on each proposed large 26.12 electric generating plant or high voltage transmission line for 26.13 which a complete application has been submitted. For any 26.14 project that has obtained a certificate of need from the public 26.15 utilities commission, the board shall not consider whether or 26.16 not the project is needed. No other state environmental review 26.17 documents shall be required. The board shall study and evaluate 26.18 any site or route proposed by an applicant and any other site or 26.19 route the board deems necessary that was proposed in a manner 26.20 consistent with rules adopted by the board concerning the form, 26.21 content, and timeliness of proposals for alternate sites or 26.22 routes. 26.23 Sec. 10. Minnesota Statutes 2000, section 116C.57, is 26.24 amended by adding a subdivision to read: 26.25 Subd. 2d. [PUBLIC HEARING.] The board shall hold a public 26.26 hearing on an application for a site permit for a large electric 26.27 power generating plant or a route permit for a high voltage 26.28 transmission line. All hearings held for designating a site or 26.29 route shall be conducted by an administrative law judge from the 26.30 office of administrative hearings pursuant to the contested case 26.31 procedures of chapter 14. Notice of the hearing shall be given 26.32 by the board at least ten days in advance but no earlier than 45 26.33 days prior to the commencement of the hearing. Notice shall be 26.34 by publication in a legal newspaper of general circulation in 26.35 the county in which the public hearing is to be held and by 26.36 certified mail to chief executives of the regional development 27.1 commissions, counties, organized towns, townships, and the 27.2 incorporated municipalities in which a site or route is 27.3 proposed. Any person may appear at the hearings and offer 27.4 testimony and exhibits without the necessity of intervening as a 27.5 formal party to the proceedings. The administrative law judge 27.6 may allow any person to ask questions of other witnesses. The 27.7 administrative law judge shall hold a portion of the hearing in 27.8 the area where the power plant or transmission line is proposed 27.9 to be located. 27.10 Sec. 11. Minnesota Statutes 2000, section 116C.57, 27.11 subdivision 4, is amended to read: 27.12 Subd. 4. [CONSIDERATIONS IN DESIGNATING SITES AND ROUTES.] 27.13 The board's site and route permit determinations must be guided 27.14 by the state's goals to conserve resources, minimize 27.15 environmental impacts, minimize human settlement and other land 27.16 use conflicts, and ensure the state's electric energy security 27.17 through efficient, cost-effective power supply and electric 27.18 transmission infrastructure. To facilitate the study, research, 27.19 evaluation and designation of sites and routes, the board shall 27.20 be guided by, but not limited to, the 27.21 following responsibilities, procedures, andconsiderations: 27.22 (1) Evaluation of research and investigations relating to 27.23 the effects on land, water and air resources of large electric 27.24 power generating plants and high voltage transmission line27.25 routeslines and the effects of water and air discharges and 27.26 electric and magnetic fields resulting from such facilities on 27.27 public health and welfare, vegetation, animals, materials and 27.28 aesthetic values, including base line studies, predictive 27.29 modeling, and monitoring of the water and air mass at proposed27.30 and operating sites and routes,evaluation of new or improved 27.31 methods for minimizing adverse impacts of water and air 27.32 discharges and other matters pertaining to the effects of power 27.33 plants on the water and air environment; 27.34 (2) Environmental evaluation of sites and routes proposed 27.35 for future development and expansion and their relationship to 27.36 the land, water, air and human resources of the state; 28.1 (3) Evaluation of the effects of new electric power 28.2 generation and transmission technologies and systems related to 28.3 power plants designed to minimize adverse environmental effects; 28.4 (4) Evaluation of the potential for beneficial uses of 28.5 waste energy from proposed large electric power generating 28.6 plants; 28.7 (5) Analysis of the direct and indirect economic impact of 28.8 proposed sites and routes including, but not limited to, 28.9 productive agricultural land lost or impaired; 28.10 (6) Evaluation of adverse direct and indirect environmental 28.11 effects whichthat cannot be avoided should the proposed site 28.12 and route be accepted; 28.13 (7) Evaluation of alternatives to the applicant's proposed 28.14 site or route proposed pursuant to subdivisions 1 and 2; 28.15 (8) Evaluation of potential routes whichthat would use or 28.16 parallel existing railroad and highway rights-of-way; 28.17 (9) Evaluation of governmental survey lines and other 28.18 natural division lines of agricultural land so as to minimize 28.19 interference with agricultural operations; 28.20 (10) Evaluation of the future needs for additional high 28.21 voltage transmission lines in the same general area as any 28.22 proposed route, and the advisability of ordering the 28.23 construction of structures capable of expansion in transmission 28.24 capacity through multiple circuiting or design modifications; 28.25 (11) Evaluation of irreversible and irretrievable 28.26 commitments of resources should the proposed site or route be 28.27 approved; and 28.28 (12) WhereWhen appropriate, consideration of problems 28.29 raised by other state and federal agencies and local entities. 28.30 (13)If the board's rules are substantially similar to 28.31 existing rules andregulations of a federal agency to which the 28.32 utility in the state is subject, the federal rules and28.33 regulations shallmust be applied by the board. 28.34 (14)No site or route shall be designated which violates 28.35 state agency rules. 28.36 Sec. 12. Minnesota Statutes 2000, section 116C.57, is 29.1 amended by adding a subdivision to read: 29.2 Subd. 7. [TIMING.] The board shall make a final decision 29.3 on an application within 60 days after receipt of the report of 29.4 the administrative law judge. A final decision on the request 29.5 for a site permit or route permit shall be made within one year 29.6 after the chair's determination that an application is 29.7 complete. The board may extend this time limit for up to three 29.8 months for just cause or upon agreement of the applicant. 29.9 Sec. 13. Minnesota Statutes 2000, section 116C.57, is 29.10 amended by adding a subdivision to read: 29.11 Subd. 8. [FINAL DECISION.] (a) No site permit shall be 29.12 issued in violation of the site selection standards and criteria 29.13 established in this section and in rules adopted by the board. 29.14 When the board designates a site, it shall issue a site permit 29.15 to the applicant with any appropriate conditions. The board 29.16 shall publish a notice of its decision in the State Register 29.17 within 30 days of issuance of the site permit. 29.18 (b) No route permit shall be issued in violation of the 29.19 route selection standards and criteria established in this 29.20 section and in rules adopted by the board. When the board 29.21 designates a route, it shall issue a permit for the construction 29.22 of a high voltage transmission line specifying the design, 29.23 routing, right-of-way preparation, and facility construction it 29.24 deems necessary, and with any other appropriate conditions. The 29.25 board may order the construction of high voltage transmission 29.26 line facilities that are capable of expansion in transmission 29.27 capacity through multiple circuiting or design modifications. 29.28 The board shall publish a notice of its decision in the State 29.29 Register within 30 days of issuance of the permit. 29.30 Sec. 14. [116C.575] [ALTERNATIVE REVIEW OF APPLICATIONS.] 29.31 Subdivision 1. [ALTERNATIVE REVIEW.] An applicant who 29.32 seeks a site permit or route permit for one of the projects 29.33 identified in this section shall have the option of following 29.34 the procedures in this section rather than the procedures in 29.35 section 116C.57. The applicant shall notify the chair at the 29.36 time the application is submitted which procedure the applicant 30.1 chooses to follow. 30.2 Subd. 2. [APPLICABLE PROJECTS.] The requirements and 30.3 procedures in this section may apply to the following projects: 30.4 (1) large electric power generating plants with a capacity 30.5 of less than 80 megawatts; 30.6 (2) large electric power generating plants that are fueled 30.7 by natural gas; 30.8 (3) high voltage transmission lines of between 100 and 200 30.9 kilovolts; 30.10 (4) high voltage transmission lines in excess of 200 30.11 kilovolts and less than five miles in length in Minnesota; 30.12 (5) high voltage transmission lines in excess of 200 30.13 kilovolts if at least 80 percent of the distance of the line in 30.14 Minnesota will be located along existing high voltage 30.15 transmission line right-of-way; 30.16 (6) a high voltage transmission line service extension to a 30.17 single customer between 200 and 300 kilovolts and less than ten 30.18 miles in length; and 30.19 (7) a high voltage transmission line rerouting to serve the 30.20 demand of a single customer when the rerouted line will be 30.21 located at least 80 percent on property owned or controlled by 30.22 the customer or the owner of the transmission line. 30.23 Subd. 3. [APPLICATION.] The applicant for a site or route 30.24 permit for any of the projects listed in subdivision 2 who 30.25 chooses to follow these procedures shall submit information as 30.26 the board may require, but the applicant shall not be required 30.27 to propose a second site or route for the project. The 30.28 applicant shall identify in the application any other sites or 30.29 routes that were rejected by the applicant and the board may 30.30 identify additional sites or routes to consider during the 30.31 processing of the application. The chair of the board shall 30.32 determine whether an application is complete and advise the 30.33 applicant of any deficiencies. 30.34 Subd. 4. [NOTICE OF APPLICATION.] Upon submission of an 30.35 application under this section, the applicant shall provide the 30.36 same notice as required by section 116C.57, subdivision 2b. 31.1 Subd. 5. [ENVIRONMENTAL REVIEW.] For the projects 31.2 identified in subdivision 2 and following these procedures, the 31.3 board shall prepare an environmental assessment. The 31.4 environmental assessment shall contain information on the human 31.5 and environmental impacts of the proposed project and other 31.6 sites or routes identified by the board and shall address 31.7 mitigating measures for all of the sites or routes considered. 31.8 The environmental assessment shall be the only state 31.9 environmental review document required to be prepared on the 31.10 project. 31.11 Subd. 6. [PUBLIC HEARING.] The board shall hold a public 31.12 hearing in the area where the facility is proposed to be 31.13 located. The board shall give notice of the public hearing in 31.14 the same manner as notice under section 116C.57, subdivision 31.15 2d. The board shall conduct the public hearing under procedures 31.16 established by the board. The applicant shall be present at the 31.17 hearing to present evidence and to answer questions. The board 31.18 shall provide opportunity at the public hearing for any person 31.19 to present comments and to ask questions of the applicant and 31.20 board staff. The board shall also afford interested persons an 31.21 opportunity to submit written comments into the record. 31.22 Subd. 7. [TIMING.] The board shall make a final decision 31.23 on an application within 60 days after completion of the public 31.24 hearing. A final decision on the request for a site permit or 31.25 route permit under this section shall be made within six months 31.26 after the chair's determination that an application is 31.27 complete. The board may extend this time limit for up to three 31.28 months for just cause or upon agreement of the applicant. 31.29 Subd. 8. [CONSIDERATIONS.] The considerations in section 31.30 116C.57, subdivision 4, shall apply to any projects subject to 31.31 this section. 31.32 Subd. 9. [FINAL DECISION.] (a) No site permit shall be 31.33 issued in violation of the site selection standards and criteria 31.34 established in this section and in rules adopted by the board. 31.35 When the board designates a site, it shall issue a site permit 31.36 to the applicant with any appropriate conditions. The board 32.1 shall publish a notice of its decision in the State Register 32.2 within 30 days of issuance of the site permit. 32.3 (b) No route designation shall be made in violation of the 32.4 route selection standards and criteria established in this 32.5 section and in rules adopted by the board. When the board 32.6 designates a route, it shall issue a permit for the construction 32.7 of a high voltage transmission line specifying the design, 32.8 routing, right-of-way preparation, and facility construction it 32.9 deems necessary and with any other appropriate conditions. The 32.10 board may order the construction of high voltage transmission 32.11 line facilities that are capable of expansion in transmission 32.12 capacity through multiple circuiting or design modifications. 32.13 The board shall publish a notice of its decision in the State 32.14 Register within 30 days of issuance of the permit. 32.15 Sec. 15. [116C.576] [LOCAL REVIEW OF APPLICATIONS.] 32.16 Subdivision 1. [LOCAL REVIEW.] (a) Notwithstanding the 32.17 requirements of sections 116C.57 and 116C.575, an applicant who 32.18 seeks a site or route permit for one of the projects identified 32.19 in this section shall have the option of applying to those local 32.20 units of government that have jurisdiction over the site or 32.21 route for approval to build the project. If local approval is 32.22 granted, a site or route permit is not required from the board. 32.23 If the applicant files an application with the board, the 32.24 applicant shall be deemed to have waived its right to seek local 32.25 approval of the project. 32.26 (b) A local unit of government with jurisdiction over a 32.27 project identified in this section to whom an applicant has 32.28 applied for approval to build the project may request the board 32.29 to assume jurisdiction and make a decision on a site or route 32.30 permit under the applicable provisions of sections 116C.52 to 32.31 116C.69. A local unit of government must file the request with 32.32 the board within 60 days after an application for the project 32.33 has been filed with any one local unit of government. If one of 32.34 the local units of government with jurisdiction over the project 32.35 requests the board to assume jurisdiction, jurisdiction over the 32.36 project transfers to the board. If the local units of 33.1 government maintain jurisdiction over the project, the board 33.2 shall select the appropriate local unit of government to be the 33.3 responsible governmental unit to conduct environmental review of 33.4 the project. 33.5 Subd. 2. [APPLICABLE PROJECTS.] Applicants may seek 33.6 approval from local units of government to construct the 33.7 following projects: 33.8 (1) large electric power generating plants with a capacity 33.9 of less than 80 megawatts; 33.10 (2) large electric power generating plants of any size that 33.11 burn natural gas and are intended to be a peaking plant; 33.12 (3) high voltage transmission lines of between 100 and 200 33.13 kilovolts; 33.14 (4) substations with a voltage designed for and capable of 33.15 operation at a nominal voltage of 100 kilovolts or more; 33.16 (5) a high voltage transmission line service extension to a 33.17 single customer between 200 and 300 kilovolts and less than ten 33.18 miles in length; and 33.19 (6) a high voltage transmission line rerouting to serve the 33.20 demand of a single customer when the rerouted line will be 33.21 located at least 80 percent on property owned or controlled by 33.22 the customer or the owner of the transmission line. 33.23 Subd. 3. [NOTICE OF APPLICATION.] Within ten days of 33.24 submission of an application to a local unit of government for 33.25 approval of an eligible project, the applicant shall notify the 33.26 board that the applicant has elected to seek local approval of 33.27 the proposed project. 33.28 Sec. 16. [116C.577] [EMERGENCY PERMIT.] 33.29 Any utility whose electric power system requires the 33.30 immediate construction of a large electric power generating 33.31 plant or high voltage transmission line may make application to 33.32 the board for an emergency permit, which permit shall be issued 33.33 in a timely manner no later than 195 days after the board's 33.34 acceptance of the application and upon a finding by the board 33.35 that a demonstrable emergency exists, which requires immediate 33.36 construction, and that adherence to the procedures and time 34.1 schedules specified in this section would jeopardize the 34.2 utility's electric power system or would jeopardize the 34.3 utility's ability to meet the electric needs of its customers in 34.4 an orderly and timely manner. A public hearing to determine if 34.5 an emergency exists shall be held within 90 days of the 34.6 application. The board shall, after notice and hearing, 34.7 promulgate rules specifying the criteria for emergency 34.8 certification. 34.9 Sec. 17. Minnesota Statutes 2000, section 116C.58, is 34.10 amended to read: 34.11 116C.58 [ PUBLIC HEARINGS; NOTICEANNUAL HEARING.] 34.12 The board shall hold an annual public hearing at a time and 34.13 place prescribed by rule in order to afford interested persons 34.14 an opportunity to be heard regarding its inventory of study34.15 areas and any other aspects of the board's activities and duties34.16 or policies specified in sections 116C.51 to 116C.69. The board34.17 shall hold at least one public hearing in each county where a34.18 site or route is being considered for designation pursuant to34.19 section 116C.57. Notice and agenda of public hearings and34.20 public meetings of the board held in each county shall be given34.21 by the board at least ten days in advance but no earlier than 4534.22 days prior to such hearings or meetings. Notice shall be by34.23 publication in a legal newspaper of general circulation in the34.24 county in which the public hearing or public meeting is to be34.25 held and by certified mailed notice to chief executives of the34.26 regional development commissions, counties, organized towns and34.27 the incorporated municipalities in which a site or route is34.28 proposed. All hearings held for designating a site or route or34.29 for exempting a route shall be conducted by an administrative34.30 law judge from the office of administrative hearings pursuant to34.31 the contested case procedures of chapter 14. Any person may34.32 appear at the hearings and present testimony and exhibits and34.33 may question witnesses without the necessity of intervening as a34.34 formal party to the proceedingsany matters relating to the 34.35 siting of large electric generating power plants and routing of 34.36 high voltage transmission lines. At the meeting, the board 35.1 shall advise the public of the permits issued by the board in 35.2 the past year. The board shall provide at least ten days but no 35.3 more than 45 days' notice of the annual meeting by mailing 35.4 notice to those persons who have requested notice and by 35.5 publication in the EQB Monitor. 35.6 Sec. 18. Minnesota Statutes 2000, section 116C.59, 35.7 subdivision 1, is amended to read: 35.8 Subdivision 1. [ADVISORY TASK FORCE.] The board may 35.9 appoint one or more advisory task forces to assist it in 35.10 carrying out its duties. Task forces appointed to evaluate 35.11 sites or routes considered for designation shall be comprised of 35.12 as many persons as may be designated by the board, but at least 35.13 one representative from each of the following: Regional 35.14 development commissions, counties and municipal corporations and 35.15 one town board member from each county in which a site or route 35.16 is proposed to be located. No officer, agent, or employee of a 35.17 utility shall serve on an advisory task force. Reimbursement 35.18 for expenses incurred shall be made pursuant to the rules 35.19 governing state employees. The task forces expire as provided 35.20 in section 15.059, subdivision 6. At the time the task force is 35.21 appointed, the board shall specify the charge to the task 35.22 force. The task force shall expire upon completion of its 35.23 charge, upon designation by the board of alternative sites or 35.24 routes to be included in the environmental impact statement, or 35.25 upon the specific date identified by the board in the charge, 35.26 whichever occurs first. 35.27 Sec. 19. Minnesota Statutes 2000, section 116C.59, 35.28 subdivision 4, is amended to read: 35.29 Subd. 4. [SCIENTIFIC ADVISORY TASK FORCE.] The board may 35.30 appoint one or more advisory task forces composed of technical 35.31 and scientific experts to conduct research and make 35.32 recommendations concerning generic issues such as health and 35.33 safety, underground routes, double circuiting and long-range 35.34 route and site planning. Reimbursement for expenses incurred 35.35 shall be made pursuant to the rules governing reimbursement of 35.36 state employees. The task forces expire as provided in section 36.1 15.059, subdivision 6. The time allowed for completion of a 36.2 specific site or route procedure may not be extended to await 36.3 the outcome of these generic investigations. 36.4 Sec. 20. Minnesota Statutes 2000, section 116C.60, is 36.5 amended to read: 36.6 116C.60 [PUBLIC MEETINGS; TRANSCRIPT OF PROCEEDINGS; 36.7 WRITTEN RECORDS.] 36.8 Meetings of the board, including hearings, shall be open to 36.9 the public. Minutes shall be kept of board meetings and a 36.10 complete record of public hearings shall be kept. All books, 36.11 records, files, and correspondence of the board shall be 36.12 available for public inspection at any reasonable time. The 36.13 councilboard shall also be subject to chapter 13D. 36.14 Sec. 21. Minnesota Statutes 2000, section 116C.61, 36.15 subdivision 1, is amended to read: 36.16 Subdivision 1. [REGIONAL, COUNTY AND LOCAL ORDINANCES, 36.17 RULES, REGULATIONS; PRIMARY RESPONSIBILITY AND REGULATION OF 36.18 SITE DESIGNATION, IMPROVEMENT AND USE.] To assure the paramount 36.19 and controlling effect of the provisions herein over other state 36.20 agencies, regional, county and local governments, and special 36.21 purpose government districts, the issuance of a certificate of36.22 site permit compatibilityor transmission line36.23 constructionroute permit and subsequent purchase and use of 36.24 such site or route locations for large electric power generating 36.25 plant and high voltage transmission line purposes shall be the 36.26 sole site or route approval required to be obtained by the 36.27 utility. Such certificate orpermit shall supersede and preempt 36.28 all zoning, building, or land use rules, regulations, or 36.29 ordinances promulgated by regional, county, local and special 36.30 purpose government. 36.31 Sec. 22. Minnesota Statutes 2000, section 116C.61, 36.32 subdivision 3, is amended to read: 36.33 Subd. 3. [STATE AGENCY PARTICIPATION.] State agencies 36.34 authorized to issue permits required for construction or 36.35 operation of large electric power generating plants or high 36.36 voltage transmission lines shall participate in and present the37.1 position of the agencyduring routing and siting at public 37.2 hearings and all other activities of the board on specific site 37.3 or route designations and design considerations of the board, 37.4 which positionand shall clearly state whether the site or route 37.5 being considered for designation or permit and other design 37.6 matters under consideration for approval for a certain size and37.7 type of facilitywill be in compliance with state agency 37.8 standards, rules or policies. 37.9 Sec. 23. Minnesota Statutes 2000, section 116C.62, is 37.10 amended to read: 37.11 116C.62 [IMPROVEMENT OF SITES AND ROUTES.] 37.12 Utilities whichthat have acquired a site or route in 37.13 accordance with sections 116C.51 to 116C.69 may proceed to 37.14 construct or improve the site or route for the intended purposes 37.15 at any time, subject to section 116C.61, subdivision 2, provided 37.16 that if the construction and improvement commences more thanhas 37.17 not commenced within four years after a certificate orpermit 37.18 for the site or route has been issued, then the utility must 37.19 certify to the board that the site or route continues to meet 37.20 the conditions upon which the certificate ofsite compatibility37.21 or transmission line constructionor route permit was issued. 37.22 Sec. 24. Minnesota Statutes 2000, section 116C.63, 37.23 subdivision 2, is amended to read: 37.24 Subd. 2. In eminent domain proceedings by a utility, 37.25 receipt of a site permit is the limited granting of eminent 37.26 domain authority for the sole purpose of implementing the 37.27 decision of the environmental quality board. For the 37.28 acquisition of real property proposed for construction of a 37.29 route or a site, the proceedings shall be conducted in the 37.30 manner prescribed in chapter 117, except as otherwise 37.31 specifically provided in this section. 37.32 Sec. 25. Minnesota Statutes 2000, section 116C.645, is 37.33 amended to read: 37.34 116C.645 [REVOCATION OR SUSPENSION.] 37.35 A site certificateor constructionroute permit may be 37.36 revoked or suspended by the board after adequate notice of the 38.1 alleged grounds for revocation or suspension and a full and fair 38.2 hearing in which the affected utility has an opportunity to 38.3 confront any witness and respond to any evidence against it and 38.4 to present rebuttal or mitigating evidence upon a finding by the 38.5 board of: 38.6 (1) Any false statement knowingly made in the application 38.7 or in accompanying statements or studies required of the 38.8 applicant, if a true statement would have warranted a change in 38.9 the board's findings; 38.10 (2) Failure to comply with material conditions of the site 38.11 certificate or construction permit, or failure to maintain 38.12 health and safety standards; or 38.13 (3) Any material violation of the provisions of sections 38.14 116C.51 to 116C.69, any rule promulgated pursuant thereto, or 38.15 any order of the board. 38.16 Sec. 26. Minnesota Statutes 2000, section 116C.65, is 38.17 amended to read: 38.18 116C.65 [JUDICIAL REVIEW.] 38.19 Any utilityapplicant, party or person aggrieved by the 38.20 issuance of a certificatesite or route permit or emergency 38.21 certificate of site compatibility or transmission line38.22 constructionpermit from the board or a certification of 38.23 continuing suitability filed by a utility with the board or by a 38.24 final order in accordance with any rules promulgated by the 38.25 board, may appeal to the court of appeals in accordance with 38.26 chapter 14. The appeal shall be filed within 6030 days after 38.27 the publication in the State Register of notice of the issuance 38.28 of the certificate orpermit by the board or certification filed 38.29 with the board or the filing of any final order by the board. 38.30 Sec. 27. Minnesota Statutes 2000, section 116C.66, is 38.31 amended to read: 38.32 116C.66 [RULES.] 38.33 The board, in order to give effect to the purposes of 38.34 sections 116C.51 to 116C.69, shall prior to July 1, 1978,may 38.35 adopt rules consistent with sections 116C.51 to 116C.69, 38.36 including promulgation of site and route designation criteria, 39.1 the description of the information to be furnished by the 39.2 utilities, establishment of minimum guidelines for public 39.3 participation in the development, revision, and enforcement of 39.4 any rule, plan or program established by the board, procedures 39.5 for the revocation or suspension of a constructionsite or route 39.6 permit or a certificate of site compatibility, and the procedure 39.7 and timeliness for proposing alternative routes and sites , and39.8 route exemption criteria and procedures. No rule adopted by the 39.9 board shall grant priority to state-owned wildlife management 39.10 areas over agricultural lands in the designation of route 39.11 avoidance areas. The provisions of chapter 14 shall apply to 39.12 the appeal of rules adopted by the board to the same extent as 39.13 it applies to review of rules adopted by any other agency of 39.14 state government. 39.15 The chief administrative law judge shall , prior to January39.16 1, 1978,adopt procedural rules for public hearings relating to 39.17 the site and route designationpermit process and to the route39.18 exemption process. The rules shall attempt to maximize citizen 39.19 participation in these processes consistent with the time limits 39.20 for board decision established in sections 116C.57, subdivision 39.21 8, and 116C.575, subdivision 7. 39.22 Sec. 28. Minnesota Statutes 2000, section 116C.69, is 39.23 amended to read: 39.24 116C.69 [BIENNIAL REPORT; APPLICATION FEES; APPROPRIATION; 39.25 FUNDING.] 39.26 Subdivision 1. [BIENNIAL REPORT.] Before November 15 of 39.27 each even-numbered year the board shall prepare and submit to 39.28 the legislature a report of its operations, activities, findings 39.29 and recommendations concerning sections 116C.51 to 116C.69. The 39.30 report shall also contain information on the board's biennial 39.31 expenditures, its proposed budget for the following biennium, 39.32 and the amounts paid in certificate andpermit application fees 39.33 pursuant to subdivisions 2 and 2aand in assessments pursuant to 39.34 subdivision 3this section. The proposed budget for the 39.35 following biennium shall be subject to legislative review. 39.36 Subd. 2. [SITE APPLICATION FEE.] Every applicant for a 40.1 site certificatepermit shall pay to the board a fee in an 40.2 amount equal to $500 for each $1,000,000 of production plant 40.3 investment in the proposed installation as defined in the 40.4 Federal Power Commission Uniform System of Accounts. The board 40.5 shall specify the time and manner of payment of the fee. If any 40.6 single payment requested by the board is in excess of 25 percent 40.7 of the total estimated fee, the board shall show that the excess 40.8 is reasonably necessary. The applicant shall pay within 30 days 40.9 of notification any additional fees reasonably necessary for 40.10 completion of the site evaluation and designation process by the 40.11 board. In no event shall the total fees required of the 40.12 applicant under this subdivision exceed an amount equal to 0.001 40.13 of said production plant investment ($1,000 for each 40.14 $1,000,000). All money received pursuant to this subdivision 40.15 shall be deposited in a special account. Money in the account 40.16 is appropriated to the board to pay expenses incurred in 40.17 processing applications for certificatessite permits in 40.18 accordance with sections 116C.51 to 116C.69 and in the event the 40.19 expenses are less than the fee paid, to refund the excess to the 40.20 applicant. 40.21 Subd. 2a. [ROUTE APPLICATION FEE.] Every applicant for a 40.22 transmission line constructionroute permit shall pay to the 40.23 board a base fee of $35,000 plus a fee in an amount equal to 40.24 $1,000 per mile length of the longest proposed route. The board 40.25 shall specify the time and manner of payment of the fee. If any 40.26 single payment requested by the board is in excess of 25 percent 40.27 of the total estimated fee, the board shall show that the excess 40.28 is reasonably necessary. In the event the actual cost of 40.29 processing an application up to the board's final decision to 40.30 designate a route exceeds the above fee schedule, the board may 40.31 assess the applicant any additional fees necessary to cover the 40.32 actual costs, not to exceed an amount equal to $500 per mile 40.33 length of the longest proposed route. All money received 40.34 pursuant to this subdivision shall be deposited in a special 40.35 account. Money in the account is appropriated to the board to 40.36 pay expenses incurred in processing applications for 41.1 constructionroute permits in accordance with sections 116C.51 41.2 to 116C.69 and in the event the expenses are less than the fee 41.3 paid, to refund the excess to the applicant. 41.4 Subd. 3. [FUNDING; ASSESSMENT.] The board shall finance 41.5 its base line studies, general environmental studies, 41.6 development of criteria, inventory preparation, monitoring of 41.7 conditions placed on site certificatesand constructionroute 41.8 permits, and all other work, other than specific site and route 41.9 designation, from an assessment made quarterly, at least 30 days 41.10 before the start of each quarter, by the board against all 41.11 utilities with annual retail kilowatt-hour sales greater than 41.12 4,000,000 kilowatt-hours in the previous calendar year. 41.13 Each share shall be determined as follows: (1) the ratio 41.14 that the annual retail kilowatt-hour sales in the state of each 41.15 utility bears to the annual total retail kilowatt-hour sales in 41.16 the state of all these utilities, multiplied by 0.667, plus (2) 41.17 the ratio that the annual gross revenue from retail 41.18 kilowatt-hour sales in the state of each utility bears to the 41.19 annual total gross revenues from retail kilowatt-hour sales in 41.20 the state of all these utilities, multiplied by 0.333, as 41.21 determined by the board. The assessment shall be credited to 41.22 the special revenue fund and shall be paid to the state treasury 41.23 within 30 days after receipt of the bill, which shall constitute 41.24 notice of said assessment and demand of payment thereof. The 41.25 total amount which may be assessed to the several utilities 41.26 under authority of this subdivision shall not exceed the sum of 41.27 the annual budget of the board for carrying out the purposes of 41.28 this subdivision. The assessment for the second quarter of each 41.29 fiscal year shall be adjusted to compensate for the amount by 41.30 which actual expenditures by the board for the preceding fiscal 41.31 year were more or less than the estimated expenditures 41.32 previously assessed. 41.33 Sec. 29. Minnesota Statutes 2000, section 216B.2421, 41.34 subdivision 2, is amended to read: 41.35 Subd. 2. [LARGE ENERGY FACILITY.] "Large energy facility" 41.36 means: 42.1 (1) any electric power generating plant or combination of 42.2 plants at a single site with a combined capacity of 80,00042.3 kilowatts or more, or any facility of50,000 kilowatts or more 42.4 which requires oil, natural gas, or natural gas liquids as a42.5 fuel and for which an installation permit has not been applied42.6 for by May 19, 1977 pursuant to Minn. Reg. APC 3(a)and 42.7 transmission lines directly associated with the plant that are 42.8 necessary to interconnect the plant to the transmission system; 42.9 (2) any high voltage transmission line with a capacity of 42.10 200 kilovolts or more and with more than 50 miles of its length42.11 in Minnesota; or,42.12 (3) any high voltage transmission line with a capacity of 42.13 300100 kilovolts or more with more than 25ten miles of its 42.14 length in Minnesota or that crosses a state line; 42.15 (3)(4) any pipeline greater than six inches in diameter 42.16 and having more than 50 miles of its length in Minnesota used 42.17 for the transportation of coal, crude petroleum or petroleum 42.18 fuels or oil or their derivatives; 42.19 (4)(5) any pipeline for transporting natural or synthetic 42.20 gas at pressures in excess of 200 pounds per square inch with 42.21 more than 50 miles of its length in Minnesota; 42.22 (5)(6) any facility designed for or capable of storing on 42.23 a single site more than 100,000 gallons of liquefied natural gas 42.24 or synthetic gas; 42.25 (6)(7) any underground gas storage facility requiring 42.26 permit pursuant to section 103I.681; 42.27 (7)(8) any nuclear fuel processing or nuclear waste 42.28 storage or disposal facility; and 42.29 (8)(9) any facility intended to convert any material into 42.30 any other combustible fuel and having the capacity to process in 42.31 excess of 75 tons of the material per hour. 42.32 Sec. 30. [216B.2425] [ELECTRIC TRANSMISSION; PRIORITY 42.33 PROJECTS.] 42.34 Subdivision 1. [LIST.] The commission shall maintain a 42.35 list of certified priority electric transmission projects. A 42.36 project is eligible for the list if it is a high voltage 43.1 transmission line as defined in section 216B.2421, subdivision 43.2 2, and the commission finds that the project is necessary to 43.3 maintain or enhance the reliability of the electric transmission 43.4 system and is in the public interest, taking into account 43.5 electric energy system needs and economic, environmental, and 43.6 social interests affected by the project. 43.7 Subd. 2. [LIST; DEVELOPMENT.] (a) By November 1, 2001, and 43.8 every two years thereafter, each public utility, municipal 43.9 utility, and cooperative electric association, or the generation 43.10 and transmission organization that serves each utility or 43.11 association, that owns or operates electric transmission lines 43.12 in Minnesota shall jointly or individually submit a transmission 43.13 projects report to the commission, the department, and the 43.14 environmental quality board. The report must: 43.15 (1) list specific present and reasonably foreseeable future 43.16 inadequacies in the transmission system in Minnesota; 43.17 (2) identify alternative means of addressing each 43.18 inadequacy listed; 43.19 (3) identify general economic, environmental, and social 43.20 issues associated with each alternative; and 43.21 (4) provide a summary of public input the utilities and 43.22 associations have gathered related to the list of inadequacies 43.23 and the role of local government officials and other interested 43.24 persons in assisting to develop the list and analyze 43.25 alternatives. 43.26 (b) To meet the requirements of this subdivision, entities 43.27 may rely on available information and analysis developed by a 43.28 regional transmission organization or any subgroup of a regional 43.29 transmission organization and may develop and include additional 43.30 information as necessary. 43.31 (c) The department, in coordination with the staff of the 43.32 environmental quality board, shall: 43.33 (1) hold regional public meetings, in coordination with 43.34 affected local government units, to gather additional public 43.35 input for projects contained in the report or reports; 43.36 (2) provide public notice of the public meetings by 44.1 publication in a newspaper with local or regional distribution 44.2 and in other forms reasonably certain to provide actual notice; 44.3 and 44.4 (3) within 90 days of submission of the transmission 44.5 projects report or reports, recommend to the commission either 44.6 approval, modification, or denial for certification as a 44.7 priority transmission project for each project proposed in the 44.8 report or reports, including analysis and reasons for each 44.9 recommendation. 44.10 (d) The department shall provide a copy of its 44.11 recommendations to all affected local government units and all 44.12 other interested parties. 44.13 (e) Within 120 days of submission of the department's 44.14 recommendations, the commission shall certify, certify as 44.15 modified, or deny certification for each project proposed in a 44.16 transmission projects report. The commission may extend this 44.17 time limit for up to 90 days for just cause or upon agreement of 44.18 the applicant. The commission shall follow its regular 44.19 procedural rules in making determinations under this section and 44.20 shall hold at least one public hearing prior to making its final 44.21 decisions. 44.22 Subd. 3. [LIST; EFFECT.] Certification of a project as a 44.23 priority electric transmission project satisfies section 44.24 216B.243. A certified project on which construction has not 44.25 begun more than four years after being placed on the list, must 44.26 certify to the commission that the project remains consistent 44.27 with the commission's order. 44.28 Subd. 4. [TRANSMISSION INVENTORY.] The department of 44.29 commerce shall create, maintain, and update annually an 44.30 inventory of transmission lines in the state. 44.31 Subd. 5. [EXCLUSION.] This section does not apply to any 44.32 transmission line proposal that has been approved, or was 44.33 pending before a local unit of government, the environmental 44.34 quality board, or the public utilities commission on August 1, 44.35 2001. 44.36 Sec. 31. Minnesota Statutes 2000, section 216B.243, 45.1 subdivision 3, is amended to read: 45.2 Subd. 3. [SHOWING REQUIRED FOR CONSTRUCTION.] No proposed 45.3 large energy facility shall be certified for construction unless 45.4 the applicant can show that demand for electricity cannot be met 45.5 more cost-effectively through energy conservation and 45.6 load-management measures and unless the applicant has otherwise 45.7 justified its need. In assessing need, the commission shall 45.8 evaluate: 45.9 (1) the accuracy of the long-range energy demand forecasts 45.10 on which the necessity for the facility is based; 45.11 (2) the effect of existing or possible energy conservation 45.12 programs under sections 216C.05 to 216C.30 and this section or 45.13 other federal or state legislation on long-term energy demand; 45.14 (3) the relationship of the proposed facility to overall 45.15 state energy needs, as described in the most recent state energy 45.16 policy and conservation report prepared under section 216C.18; 45.17 (4) promotional activities that may have given rise to the45.18 demand for this facility;45.19 (5) socially beneficial uses of the outputenvironmental 45.20 and socioeconomic benefits of this facility, including its uses 45.21 to protect or enhance environmental quality, and to increase 45.22 reliability of energy supply in Minnesota and the region; 45.23 (6) the effects of the facility in inducing future45.24 development;45.25 (7)(5) possible alternatives for satisfying the energy 45.26 demand including but not limited to potential for increased 45.27 efficiency of existing energy generation facilities; 45.28 (8)(6) the policies, rules, and regulations of other state 45.29 and federal agencies and local governments; and 45.30 (9)(7) any feasible combination of energy conservation 45.31 improvements, required under section 216B.241, that can (i) 45.32 replace part or all of the energy to be provided by the proposed 45.33 facility, and (ii) compete with it economically. 45.34 Sec. 32. Minnesota Statutes 2000, section 216B.243, 45.35 subdivision 4, is amended to read: 45.36 Subd. 4. [APPLICATION FOR CERTIFICATE; HEARING.] Any 46.1 person proposing to construct a large energy facility shall 46.2 apply for a certificate of need prior to construction of the46.3 facilityapplying for a site or route permit under sections 46.4 116C.51 to 116C.69 or construction of the facility. The 46.5 application shall be on forms and in a manner established by the 46.6 commission. In reviewing each application the commission shall 46.7 hold at least one public hearing pursuant to chapter 14. The 46.8 public hearing shall be held at a location and hour reasonably 46.9 calculated to be convenient for the public. An objective of the 46.10 public hearing shall be to obtain public opinion on the 46.11 necessity of granting a certificate of need. The commission 46.12 shall designate a commission employee whose duty shall be to 46.13 facilitate citizen participation in the hearing process. 46.14 Sec. 33. Minnesota Statutes 2000, section 216B.243, 46.15 subdivision 8, is amended to read: 46.16 Subd. 8. [EXEMPTIONS.] This section does not apply to: 46.17 (1) cogeneration or small power production facilities as 46.18 defined in the Federal Power Act, United States Code, title 16, 46.19 sections 796(18)(A) and 796(17)(A), and having a combined 46.20 capacity at a single site of less than 80,000 kilowatts or to 46.21 plants or facilities for the production of ethanol or fuel 46.22 alcohol nor in any case where the commission shall determine 46.23 after being advised by the attorney general that its application 46.24 has been preempted by federal law; 46.25 (2) a high voltage transmission line proposed primarily to 46.26 distribute electricity to serve the demand of a single customer 46.27 at a single location, unless the applicant opts to request that 46.28 the commission determine need under this section or section 46.29 216B.2425; 46.30 (3) the upgrade to a higher voltage of an existing 46.31 transmission line that serves the demand of a single customer 46.32 that primarily uses existing rights-of-way, unless the applicant 46.33 opts to request that the commission determine need under this 46.34 section or section 216B.2425; 46.35 (4) conversion of the fuel source of an existing electric 46.36 generating plant to using natural gas; or 47.1 (5) modification of an existing electric generating plant 47.2 to increase efficiency, as long as the capacity of the plant is 47.3 not increased more than ten percent or more than 100 megawatts, 47.4 whichever is greater. 47.5 Sec. 34. Minnesota Statutes 2000, section 216B.62, 47.6 subdivision 5, is amended to read: 47.7 Subd. 5. [ASSESSING COOPERATIVES AND MUNICIPALS.] The 47.8 commission and department may charge cooperative electric 47.9 associations and municipal electric utilities their 47.10 proportionate share of the expenses incurred in the review and 47.11 disposition of resource plans, adjudication of service area 47.12 disputes, proceedings under section 216B.2425, and the costs 47.13 incurred in the adjudication of complaints over service 47.14 standards, practices, and rates. Cooperative electric 47.15 associations electing to become subject to rate regulation by 47.16 the commission pursuant to section 216B.026, subdivision 4, are 47.17 also subject to this section. Neither a cooperative electric 47.18 association nor a municipal electric utility is liable for costs 47.19 and expenses in a calendar year in excess of the limitation on 47.20 costs that may be assessed against public utilities under 47.21 subdivision 2. A cooperative electric association or municipal 47.22 electric utility may object to and appeal bills of the 47.23 commission and department as provided in subdivision 4. 47.24 The department shall assess cooperatives and municipalities 47.25 for the costs of alternative energy engineering activities under 47.26 section 216C.261. Each cooperative and municipality shall be 47.27 assessed in proportion that its gross operating revenues for the 47.28 sale of gas and electric service within the state for the last 47.29 calendar year bears to the total of those revenues for all 47.30 public utilities, cooperatives, and municipalities. 47.31 Sec. 35. [STATE ENERGY PLANNING REPORT.] 47.32 (a) The commissioner of the department of commerce shall 47.33 prepare a state energy planning report and submit it to the 47.34 legislature by December 15, 2001. The report must identify 47.35 important trends and issues in energy consumption, supply, 47.36 technologies, conservation, environmental effects, and 48.1 economics, and must recommend energy goals relating to the 48.2 energy needs of the state. The report must recommend goals for 48.3 the role of energy conservation, utilization of renewable energy 48.4 resources, deployment of distributed generation resources, other 48.5 modern energy technologies, and traditional energy technologies, 48.6 and affordability of energy services for all Minnesotans. The 48.7 report must recommend strategies to reach the recommended goals, 48.8 including recommendations for amendments to state law. 48.9 (b) The report must analyze: 48.10 (1) projected energy consumption over the next ten years; 48.11 (2) the need for new energy production and transportation 48.12 facilities; 48.13 (3) options for streamlining of the procedures for 48.14 certification of need, routing and siting, environmental review, 48.15 and permitting of energy facilities; 48.16 (4) the potential role of energy conservation, modern and 48.17 emerging energy technologies, and renewable generation; 48.18 (5) the role for traditional energy technologies; 48.19 (6) the environmental effects of energy consumption, 48.20 including an analysis of the costs associated with reducing 48.21 those effects; and 48.22 (7) projected energy costs over the next ten years. 48.23 (c) In preparing the report, the commissioner shall invite 48.24 public participation and shall consult with other state 48.25 agencies, including the environmental quality board staff, the 48.26 public utilities commission staff, the pollution control agency, 48.27 the department of health and other relevant agencies, local 48.28 government units, regional energy planning groups, energy 48.29 utilities, and other interested persons. Not later than October 48.30 1, 2001, the commissioner shall issue a draft report. The 48.31 commissioner shall accept written comments and hold at least one 48.32 public meeting to gather additional public input on the draft 48.33 report. 48.34 Sec. 36. [REPEALER.] 48.35 Minnesota Statutes 2000, sections 116C.55, subdivisions 2 48.36 and 3; 116C.57, subdivisions 3, 5, and 5a; 116C.67; and 49.1 216B.2421, subdivision 3, are repealed. 49.2 Sec. 37. [EFFECTIVE DATE.] 49.3 This article is effective for certificates of need and 49.4 route and site permits applied for on or after August 1, 2001. 49.5 ARTICLE 8 49.6 RENEWABLE ENERGY DEVELOPMENT 49.7 Section 1. [216B.169] [RENEWABLE ENERGY.] 49.8 Subdivision 1. [RENEWABLE ENERGY TECHNOLOGY.] "Renewable 49.9 energy technology" means a technology that exclusively relies on 49.10 an energy source that is naturally and sustainably regenerated 49.11 over a short time and derived directly from the sun, indirectly 49.12 from the sun, or from moving water or other natural movements 49.13 and mechanisms of the environment. Renewable energy 49.14 technologies include solar, wind, hydroelectric with a capacity 49.15 of less than 60 megawatts, or biomass. For the purpose of this 49.16 section, "biomass" does not include municipal solid waste. A 49.17 renewable energy technology may not rely on energy resources 49.18 derived from fossil fuels or waste products from fossil fuels. 49.19 Subd. 2. [RENEWABLE ENERGY REQUIREMENTS.] (a) Unless the 49.20 commission or governing body of a municipal utility or 49.21 cooperative electric association acts under paragraph (b), each 49.22 public utility, municipal utility, or cooperative electric 49.23 association providing electric service to retail consumers in 49.24 the state must comply with clauses (1) and (2): 49.25 (1) commencing in 2005, at least one percent of the 49.26 electric energy the entity provides to its retail customers in 49.27 Minnesota must be generated by renewable energy technologies and 49.28 that amount must be increased by one percent each year until 49.29 2015 so that in 2015 at least ten percent of the energy it 49.30 provides to its retail customers in Minnesota is generated by 49.31 renewable energy technologies; and 49.32 (2) of the renewable energy technology generation required 49.33 under clause (1), at least 0.5 percent of the energy must be 49.34 generated by biomass energy technologies by 2010 and one percent 49.35 by 2015. 49.36 Fifty percent of the renewable energy generated by wind energy 50.1 facilities operational on or before December 31, 2000, and by 50.2 biomass energy facilities operational on or before December 31, 50.3 2002, may be counted as renewable energy for purposes of 50.4 determining compliance with this paragraph. 50.5 (b) The commission or governing body shall review the 50.6 requirement established in paragraph (a) annually and may 50.7 decrease the requirement in any year if the commission or 50.8 governing body finds the requirement will: 50.9 (1) cause rate increases to retail customers that exceed 50.10 the benefits of utilizing renewable energy technology; or 50.11 (2) jeopardize electric supply reliability. 50.12 An action to decrease the requirements of this section by a 50.13 governing body of a municipal utility or cooperative electric 50.14 association may be appealed to the commission based on a 50.15 petition signed by five percent or more of an association's 50.16 membership or municipal utility's customers. The commission may 50.17 approve, modify, or disapprove the action of the municipal 50.18 utility or cooperative electric association. 50.19 Subd. 3. [TRADEABLE CREDITS.] To facilitate compliance 50.20 with this section, the commission shall, by order, establish a 50.21 program for tradeable credits for renewable energy under this 50.22 section. For renewable energy other than biomass energy, the 50.23 renewable credit program must allow for trading of credits for 50.24 energy generated from renewable energy generation facilities 50.25 operational after January 1, 2000. For biomass energy, the 50.26 credit program shall allow for trading of credits for energy 50.27 generated by renewable energy generation facilities operational 50.28 on or after January 1, 2002. The commission shall establish 50.29 separate prices for biomass renewable energy credits and 50.30 nonbiomass renewable energy credits. 50.31 Upon passage of a renewables portfolio standard in another 50.32 state that includes the same definition of renewable energy 50.33 technology and begins at a level commensurate to the existing 50.34 level of renewables in that state, the department may facilitate 50.35 the trading of renewable energy credits between parties located 50.36 in this and that state. 51.1 ARTICLE 9 51.2 CONSERVATION INVESTMENT PROGRAM 51.3 Section 1. Minnesota Statutes 2000, section 216B.241, 51.4 subdivision 1, is amended to read: 51.5 Subdivision 1. [DEFINITIONS.] For purposes of this section 51.6 and section 216B.16, subdivision 6b, the terms defined in this 51.7 subdivision have the meanings given them. 51.8 (a) "Commission" means the public utilities commission. 51.9 (b) "Commissioner" means the commissioner of public service51.10 commerce. 51.11 (c) "Customer facility" means all buildings, structures, 51.12 equipment, and installations at a single site. 51.13 (d) "Department" means the department of public51.14 servicecommerce. 51.15 (e) "Energy conservation" means demand-side management of 51.16 energy supplies resulting in a net reduction in energy use. 51.17 Load management that reduces overall energy use is energy 51.18 conservation. 51.19 (f) "Energy conservation improvement" means the purchase or51.20 installation of a device, method, material, or project that:51.21 (1) reduces consumption of or increases efficiency in the51.22 use of electricity or natural gas, including but not limited to51.23 insulation and ventilation, storm or thermal doors or windows,51.24 caulking and weatherstripping, furnace efficiency modifications,51.25 thermostat or lighting controls, awnings, or systems to turn off51.26 or vary the delivery of energy;51.27 (2) creates, converts, or actively uses energy from51.28 renewable sources such as solar, wind, and biomass, provided51.29 that the device or method conforms with national or state51.30 performance and quality standards whenever applicable;51.31 (3) seeks to provide energy savings through reclamation or51.32 recycling and that is used as part of the infrastructure of an51.33 electric generation, transmission, or distribution system within51.34 the state or a natural gas distribution system within the state;51.35 or51.36 (4) provides research or development of new means of52.1 increasing energy efficiency or conserving energy or research or52.2 development of improvement of existing means of increasing52.3 energy efficiency or conserving energya project that results in 52.4 energy conservation. 52.5 (f)(g) "Investments and expenses of a public utility" 52.6 includes the investments and expenses incurred by a public 52.7 utility in connection with an energy conservation improvement, 52.8 including but not limited to: 52.9 (1) the differential in interest cost between the market 52.10 rate and the rate charged on a no-interest or below-market 52.11 interest loan made by a public utility to a customer for the 52.12 purchase or installation of an energy conservation improvement; 52.13 (2) the difference between the utility's cost of purchase 52.14 or installation of energy conservation improvements and any 52.15 price charged by a public utility to a customer for such 52.16 improvements. 52.17 (g)(h) "Large electric customer facility" means a customer 52.18 facility that imposes a peak electrical demand on an electric 52.19 utility's system of not less than 20,000 kilowatts, measured in 52.20 the same way as the utility that serves the customer facility 52.21 measures electrical demand for billing purposes, and for which 52.22 electric services are provided at retail on a single bill by a 52.23 utility operating in the state. 52.24 Sec. 2. Minnesota Statutes 2000, section 216B.241, 52.25 subdivision 1a, is amended to read: 52.26 Subd. 1a. [INVESTMENT, EXPENDITURE, AND CONTRIBUTION; 52.27 PUBLIC UTILITY.] (a) For purposes of this subdivision and 52.28 subdivision 2, "public utility" has the meaning given it in 52.29 section 216B.02, subdivision 4. Each public utility shall spend 52.30 and invest for energy conservation improvements under this 52.31 subdivision and subdivision 2 the following amounts: 52.32 (1) for a utility that furnishes gas service, 0.5 percent 52.33 of its gross operating revenues from service provided in the 52.34 state; 52.35 (2) for a utility that furnishes electric service, 1.5 52.36 percent of its gross operating revenues from service provided in 53.1 the state; and 53.2 (3) for a utility that furnishes electric service and that 53.3 operates a nuclear-powered electric generating plant within the 53.4 state, two percent of its gross operating revenues from service 53.5 provided in the state. 53.6 For purposes of this paragraph (a), "gross operating revenues" 53.7 do not include revenues from large electric customer facilities 53.8 exempted by the commissioner of the department of public service53.9 pursuant tounder paragraph (b). 53.10 (b) The owner of a large electric customer facility may 53.11 petition the commissioner of the department of public serviceto 53.12 exempt both electric and gas utilities serving the large energy 53.13 customer facility from the investment and expenditure 53.14 requirements of paragraph (a) with respect to retail revenues 53.15 attributable to the facility. At a minimum, the petition must 53.16 be supported by evidence relating to competitive or economic 53.17 pressures on the customer and a showing by the customer of 53.18 reasonable efforts to identify, evaluate, and implement 53.19 cost-effective conservation improvements at the facility. If a 53.20 petition is filed on or before October 1 of any year, the order 53.21 of the commissioner to exempt revenues attributable to the 53.22 facility can be effective no earlier than January 1 of the 53.23 following year. The commissioner shall not grant an exemption 53.24 if the commissioner determines that granting the exemption is 53.25 contrary to the public interest. The commissioner may, after 53.26 investigation, rescind any exemption granted under this 53.27 paragraph upon a determination that cost-effective energy 53.28 conservation improvements are available at the large electric 53.29 customer facility. For the purposes of this paragraph, 53.30 "cost-effective" means that the projected total cost of the 53.31 energy conservation improvement at the large electric customer 53.32 facility is less than the projected present value of the energy 53.33 and demand savings resulting from the energy conservation 53.34 improvement. For the purposes of investigations by the 53.35 commissioner under this paragraph, the owner of any large 53.36 electric customer facility shall, upon request, provide the 54.1 commissioner with updated information comparable to that 54.2 originally supplied in or with the owner's original petition 54.3 under this paragraph. 54.4 (c) The commissioner may require investments or spending 54.5 greater than the amounts required under this subdivision for a 54.6 public utility whose most recent advance forecast required under 54.7 section 216B.2422 or 216C.17 projects a peak demand deficit of 54.8 100 megawatts or greater within five years under mid-range 54.9 forecast assumptions. 54.10 (d) A public utility or owner of a large electric customer 54.11 facility may appeal a decision of the commissioner under 54.12 paragraph (b) or (c) to the commission under subdivision 2. In 54.13 reviewing a decision of the commissioner under paragraph (b) or 54.14 (c), the commission shall rescind the decision if it finds that 54.15 the required investments or spending will: 54.16 (1) not result in cost-effective energy conservation 54.17 improvements; or 54.18 (2) otherwise not be in the public interest. 54.19 (e) Each utility shall determine what portion of the amount 54.20 it sets aside for conservation improvement will be used for 54.21 conservation improvements under subdivision 2 and what portion 54.22 it will contribute to the energy and conservation account 54.23 established in subdivision 2a. A public utility may propose to 54.24 the commissioner to designate that all or a portion of funds 54.25 contributed to the account established in subdivision 2a be used 54.26 for research and development projects that can best be 54.27 implemented on a statewide basis. Contributions must be 54.28 remitted to the commissioner of public serviceby February 1 of 54.29 each year. Nothing in this subdivision prohibits a public 54.30 utility from spending or investing for energy conservation 54.31 improvement more than required in this subdivision. 54.32 Sec. 3. Minnesota Statutes 2000, section 216B.241, 54.33 subdivision 1b, is amended to read: 54.34 Subd. 1b. [CONSERVATION IMPROVEMENT BY COOPERATIVE 54.35 ASSOCIATION OR MUNICIPALITY.] (a) This subdivision applies to: 54.36 (1) a cooperative electric association that generates and55.1 transmits electricity to associations that provide electricity55.2 at retail including a cooperative electric association not55.3 located in this state that serves associations or others in the55.4 stateprovides retail electric service to its members; 55.5 (2) a municipality that provides electric service to retail 55.6 customers; and 55.7 (3) a municipality with gross operating revenues in excess 55.8 of $5,000,000 from sales of natural gas to retail customers. 55.9 (b) Each cooperative electric association and municipality 55.10 subject to this subdivision shall spend and invest for energy 55.11 conservation improvements under this subdivision the following 55.12 amounts: 55.13 (1) for a municipality, 0.5one percent of its gross 55.14 operating revenues from the sale of gas and one1.5 percent of 55.15 its gross operating revenues from the sale of electricity not55.16 purchased from a public utility governed by subdivision 1a or a55.17 cooperative electric association governed by this subdivision,55.18 excluding gross operating revenues from electric and gas service55.19 provided in the state to large electric customer facilities; and 55.20 (2) for a cooperative electric association, 1.5 percent of 55.21 its gross operating revenues from service provided in the state ,55.22 excluding gross operating revenues from service provided in the55.23 state to large electric customer facilities indirectly through a55.24 distribution cooperative electric association. 55.25 (c) Each municipality and cooperative electric association 55.26 subject to this subdivision shall identify and implement energy 55.27 conservation improvement spending and investments that are 55.28 appropriate for the municipality or association, except that a 55.29 municipality or association may not spend or invest for energy 55.30 conservation improvements that directly benefit a large electric 55.31 customer facility for which the commissioner has issued an 55.32 exemption under subdivision 1a, paragraph (b). Each55.33 municipality and cooperative electric association subject to55.34 this subdivision may spend and invest annually up to 15 percent55.35 of the total amount required to be spent and invested on energy55.36 conservation improvements under this subdivision on research and56.1 development projects that meet the definition of energy56.2 conservation improvement in subdivision 1 and that are funded56.3 directly by the municipality or cooperative electric56.4 association. Load management may be used to meet the56.5 requirements of this subdivision if it reduces the demand for or56.6 increases the efficiency of electric services. ALoad 56.7 management that does not reduce energy use but that increases 56.8 the efficiency of the electric system may be used to meet the 56.9 following percentage of the conservation investment and spending 56.10 requirements of this subdivision: 56.11 (1) 2002 - 70 percent; 56.12 (2) 2003 - 60 percent; 56.13 (3) 2004 - 50 percent; and 56.14 (4) 2005 and thereafter - 40 percent. 56.15 Generation and transmission cooperative electric association may56.16 include as spending and investment required under this56.17 subdivision conservation improvement spending and investment56.18 bythat provides energy services to cooperative electric 56.19 associations that provide electric service at retail to 56.20 consumers and that are served by the generation and transmission56.21 associationmay invest in energy conservation improvements on 56.22 behalf of the associations they serve for funding the 56.23 investments and may fulfill the conservation, spending, 56.24 reporting, and energy savings requirements on an aggregate 56.25 basis. A municipal power agency or other not-for-profit entity 56.26 that provides energy services to municipal utilities that 56.27 provide electric service at retail to consumers may invest in 56.28 energy conservation improvements on behalf of the municipal 56.29 utilities it serves under an agreement between the municipal 56.30 power agency or not-for-profit entity and each municipal utility 56.31 for funding the investments. 56.32 (d) By February 1 of each year, each municipality or 56.33 cooperative shall report to the commissionerdepartment its 56.34 energy conservation improvement spending and investments with a56.35 brief analysis of effectiveness in reducing consumption of56.36 electricity or gas. The report must briefly describe each 57.1 program and specify the actual energy and capacity savings 57.2 within the service territory of the municipality or association 57.3 that is the result of each conservation improvement program 57.4 using the list of uniform baseline energy and capacity savings 57.5 assumptions developed by the department. The commissioner shall 57.6 review each report and make recommendations, where appropriate, 57.7 to the municipality or association to increase the effectiveness 57.8 of conservation improvement activities. The commissioner shall 57.9 also review each report for whether a portion of the money spent 57.10 on residential conservation improvement programs is devoted to 57.11 programs that directly address the needs of renters and 57.12 low-income persons unless an insufficient number of appropriate57.13 programs are available. For the purposes of this subdivision 57.14 and subdivision 2, "low-income" means an income of less than 18557.15 at or below 50 percent of the federal poverty levelstate median 57.16 income. 57.17 (e) As part of its spending for conservation improvement, a 57.18 municipality or association may contribute to the energy and 57.19 conservation account. A municipality or association may propose 57.20 to the commissioner to designate that all or a portion of funds 57.21 contributed to the account be used for research and development 57.22 projects that can best be implemented on a statewide basis. Any 57.23 amount contributed must be remitted to the commissioner of 57.24 public service by February 1 of each year. 57.25 Sec. 4. Minnesota Statutes 2000, section 216B.241, 57.26 subdivision 1c, is amended to read: 57.27 Subd. 1c. [ENERGY-SAVING GOALSREQUIREMENTS.] (a) The 57.28 commissioner shall establish energy-saving goalsrequirements 57.29 for all gas and electric energy conservation improvement 57.30 expenditures and shall evaluate anmonitor energy conservation 57.31 improvement program on how well it meets the goals setprograms 57.32 for success in meeting those requirements. 57.33 (b) This paragraph applies to requirements for public 57.34 utility, cooperative electric association, and municipal 57.35 providers of electric service. The commissioner shall, 57.36 commencing with calendar year 2002, establish annual statewide 58.1 megawatt electric energy capacity savings required from electric 58.2 energy conservation investment programs. 58.3 The minimum required annual capacity savings is 150 58.4 megawatts, unless the commissioner finds there is no 58.5 cost-effective way to achieve that savings, in which case the 58.6 annual energy saving requirement is the maximum cost-effective 58.7 savings available as determined by the commissioner. 58.8 If the spending required under this section will not result 58.9 in the required savings, the commissioner may order the level of 58.10 spending necessary to obtain the savings. 58.11 The commissioner shall allocate savings requirements among 58.12 public utilities, cooperative electric associations, and 58.13 municipals based on their percentage of total electric service 58.14 revenue. The commissioner may excuse a public utility, 58.15 cooperative electric association, or municipal from that part of 58.16 its savings requirement for which it can be shown that no 58.17 cost-effective conservation investments are available in the 58.18 particular service territory. 58.19 A public utility, municipal utility, and cooperative 58.20 electric association must annually notify its customers of its 58.21 required capacity savings under this subdivision and of its 58.22 success in meeting those requirements. The notice must, at a 58.23 minimum, be contained in a prominent bill insert that specifies 58.24 the amount of the requirement and the annual savings obtained. 58.25 Sec. 5. Minnesota Statutes 2000, section 216B.241, 58.26 subdivision 2, is amended to read: 58.27 Subd. 2. [PROGRAMS.] (a) The commissioner may by rule58.28 require public utilities to make investments and expenditures in 58.29 energy conservation improvements, explicitly setting forth the 58.30 interest rates, prices, and terms under which the improvements 58.31 must be offered to the customers. The required programs must 58.32 cover a two-year period. The commissioner shall require at 58.33 least one public utility to establish a pilot program to make 58.34 investments in and expenditures for energy from renewable 58.35 resources such as solar, wind, or biomass and shall give special 58.36 consideration and encouragement to programs that bring about 59.1 significant net savings through the use of energy-efficient 59.2 lighting. The commissioner shall evaluate the program on the 59.3 basis of cost-effectiveness and the reliability of technologies 59.4 employed. The rules of the departmentcommissioner's order must 59.5 provide to the extent practicable for a free choice, by 59.6 consumers participating in the program, of the device, method, 59.7 material, or project constituting the energy conservation 59.8 improvement and for a free choice of the seller, installer, or 59.9 contractor of the energy conservation improvement, provided that 59.10 the device, method, material, or project seller, installer, or 59.11 contractor is duly licensed, certified, approved, or qualified, 59.12 including under the residential conservation services program, 59.13 where applicable. 59.14 (b) The commissioner may require a utility to make an 59.15 energy conservation improvement investment or expenditure 59.16 whenever the commissioner finds that the improvement will result 59.17 in energy savings at a total cost to the utility less than the 59.18 cost to the utility to produce or purchase an equivalent amount 59.19 of new supply of energy. The commissioner shall nevertheless 59.20 ensure that every public utility operate one or more programs 59.21 under periodic review by the department. Load management may be59.22 used to meet the requirements for energy conservation59.23 improvements under this section if it results in a demonstrable59.24 reduction in consumption of energy. Each public utility subject59.25 to subdivision 1a may spend and invest annually up to 15 percent59.26 of the total amount required to be spent and invested on energy59.27 conservation improvements under this section by the utility on59.28 research and development projects that meet the definition of59.29 energy conservation improvement in subdivision 1 and that are59.30 funded directly by the public utility.A public utility may not 59.31 spend for or invest in energy conservation improvements that 59.32 directly benefit a large electric customer facility for which 59.33 the commissioner has issued an exemption pursuant to subdivision 59.34 1a, paragraph (b). The commissioner shall consider and may 59.35 require a utility to undertake a program suggested by an outside 59.36 source, including a political subdivision or a nonprofit or 60.1 community organization. 60.2 (c) No utility may make an energy conservation improvement60.3 under this section to a building envelope unless:60.4 (1) it is the primary supplier of energy used for either60.5 space heating or cooling in the building;60.6 (2) the commissioner determines that special circumstances,60.7 that would unduly restrict the availability of conservation60.8 programs, warrant otherwise; or60.9 (3) the utility has been awarded a contract under60.10 subdivision 2aThe commissioner must establish a list of 60.11 programs, including, at the outset, rebates for high-efficiency 60.12 appliances, rebates or subsidies for high-efficiency lamps, 60.13 small business energy audits, and building recommissioning that 60.14 may be offered as energy conservation improvements to customers 60.15 of each municipal utility, cooperative electric association, and 60.16 public utility. The commissioner may, by order, change this 60.17 list to add or subtract programs as necessary to achieve the 60.18 state conservation requirement in subdivision 1c. 60.19 (d) The commissioner shall ensure that a portion of the 60.20 money spent on residential conservation improvement programs is 60.21 devoted to programs that directly address the needs of renters 60.22 and low-income persons unless an insufficient number of 60.23 appropriate programs are available. 60.24 (e) A utility, a political subdivision, or a nonprofit or 60.25 community organization that has suggested a program, the 60.26 attorney general acting on behalf of consumers and small 60.27 business interests, or a utility customer that has suggested a 60.28 program and is not represented by the attorney general under 60.29 section 8.33 may petition the commission to modify or revoke a 60.30 department decision under this section, and the commission may 60.31 do so if it determines that the program is not cost-effective, 60.32 does not adequately address the residential conservation 60.33 improvement needs of low-income persons, has a long-range 60.34 negative effect on one or more classes of customers, or is 60.35 otherwise not in the public interest. The person petitioning 60.36 for commission review has the burden of proof. The commission 61.1 shall reject a petition that, on its face, fails to make a 61.2 reasonable argument that a program is not in the public interest. 61.3 Sec. 6. [CONSERVATION INVESTMENT PROGRAM STUDY.] 61.4 The commissioner of commerce shall study the conservation 61.5 investment program created under Minnesota Statutes, section 61.6 216B.241, and make recommendations to the legislature on changes 61.7 in the program that will assist the program to obtain the 61.8 maximum energy savings possible from spending and investments 61.9 under the program. The study must include, at a minimum: 61.10 (1) a review of administrative burdens imposed by the 61.11 program with the goal to reduce them to the maximum extent 61.12 consistent with ensuring that the program will meet its goal of 61.13 maximum energy savings with program funds; 61.14 (2) identification of spending and investments with high 61.15 potential for saving energy and suggestions for targeting the 61.16 program at those expenditures and investments; and 61.17 (3) appropriate levels of spending and investment under the 61.18 program. 61.19 The commissioner shall solicit written public comment on 61.20 the study and submit a report and a copy of the written comments 61.21 to the committees of the legislature having principal 61.22 jurisdiction on energy matters by November 15, 2001. 61.23 Sec. 7. [EFFECTIVE DATE.] 61.24 Sections 1 to 5 are effective January 1, 2002. Section 6 61.25 is effective the day following final enactment.