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SF 1047

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 05/28/2021 11:15am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to energy; authorizing a power purchase agreement for certain electric
cogeneration activities; amending Minnesota Statutes 2020, section 216B.2424,
by adding subdivisions.

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

Section 1.

Minnesota Statutes 2020, section 216B.2424, is amended by adding a subdivision
to read:


new text begin Subd. 5b. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of subdivision 5c, the following terms have
the meanings given.
new text end

new text begin (b) "Agreement period" means the period beginning January 1, 2023, and ending
December 31, 2024.
new text end

new text begin (c) "Ash" means all species of the genus Fraxinus.
new text end

new text begin (d) "Cogeneration facility" means the St. Paul district heating and cooling system
cogeneration facility that uses waste wood as the facility's primary fuel source, provides
thermal energy to St. Paul, and sells electricity to a public utility through a power purchase
agreement approved by the Public Utilities Commission.
new text end

new text begin (e) "Department" means the Department of Agriculture.
new text end

new text begin (f) "Emerald ash borer" means the insect known as emerald ash borer, Agrilus planipennis
Fairmaire, in any stage of development.
new text end

new text begin (g) "Renewable energy technology" has the meaning given to "eligible energy technology"
in section 216B.1691, subdivision 1.
new text end

new text begin (h) "St. Paul district heating and cooling system" means a system of boilers, distribution
pipes, and other equipment that provides energy for heating and cooling in St. Paul, and
includes the cogeneration facility.
new text end

new text begin (i) "Waste wood from ash trees" means ash logs and lumber, ash tree waste, and ash
chips and mulch.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2020, section 216B.2424, is amended by adding a subdivision
to read:


new text begin Subd. 5c. new text end

new text begin New power purchase agreement. new text end

new text begin (a) No later than August 1, 2021, a public
utility subject to subdivision 5 and the cogeneration facility may file a proposal with the
commission to enter into a power purchase agreement that governs the public utility's
purchase of electricity generated by the cogeneration facility. The power purchase agreement
may extend no later than December 31, 2024, and must not be extended beyond that date
except as provided in paragraph (f).
new text end

new text begin (b) The commission is prohibited from approving a new power purchase agreement filed
under this subdivision that does not meet all of the following conditions:
new text end

new text begin (1) the cogeneration facility agrees that any waste wood from ash trees removed from
Minnesota counties that have been designated as quarantined areas in Section IV of the
Minnesota State Formal Quarantine for Emerald Ash Borer, issued by the commissioner of
agriculture under section 18G.06, effective November 14, 2019, as amended, for utilization
as biomass fuel by the cogeneration facility must be accompanied by evidence:
new text end

new text begin (i) demonstrating that the transport of biomass fuel from processed waste wood from
ash trees to the cogeneration facility complies with the department's regulatory requirements
under the Minnesota State Formal Quarantine for Emerald Ash Borer, which may consist
of:
new text end

new text begin (A) a certificate authorized or prepared by the commissioner of agriculture or an employee
of the Animal and Plant Health Inspection Service of the United States Department of
Agriculture verifying compliance; or
new text end

new text begin (B) shipping documents demonstrating compliance; or
new text end

new text begin (ii) certifying that the waste wood from ash trees has been chipped to one inch or less
in two dimensions, and was chipped within the county from which the ash trees were
originally removed;
new text end

new text begin (2) the price per megawatt hour of electricity paid by the public utility demonstrates
significant savings compared to the existing power purchase agreement, with a price that
does not exceed $98 per megawatt hour;
new text end

new text begin (3) the proposal includes a proposal to the commission for one or more electrification
projects that result in the St. Paul district heating and cooling system being powered by
electricity generated from renewable energy technologies. The plan must evaluate
electrification at three or more levels from ten to 100 percent, including 100 percent of the
energy used by the St. Paul district heating and cooling system to be implemented by
December 31, 2027. The proposal may also evaluate alternative dates for implementation.
For each level of electrification analyzed, the proposal must contain:
new text end

new text begin (i) a description of the alternative electrification technologies evaluated and whose
implementation is proposed as part of the electrification project;
new text end

new text begin (ii) an estimate of the cost of the electrification project to the public utility, the impact
on the monthly energy bills of the public utility's Minnesota customers, and the impact on
the monthly energy bills of St. Paul district heating and cooling system customers;
new text end

new text begin (iii) an estimate of the reduction in greenhouse gas emissions resulting from the
electrification project, including greenhouse gas emissions associated with the transportation
of waste wood;
new text end

new text begin (iv) estimated impacts on the operations of the St. Paul district heating and cooling
system; and
new text end

new text begin (v) a timeline for the electrification project; and
new text end

new text begin (4) the power purchase agreement provides a net benefit to the utility customers or the
state.
new text end

new text begin (c) The commission may approve, or approve as modified, a proposed electrification
project that meets the requirements of this subdivision if it finds the electrification project
is in the public interest, or the commission may reject the project if it finds that the project
is not in the public interest. When determining whether an electrification project is in the
public interest, the commission may consider the effects of the electrification project on air
emissions from the St. Paul district heating and cooling system and how the emissions
impact the environment and residents of affected neighborhoods.
new text end

new text begin (d) During the agreement period, the cogeneration facility must attempt to obtain funding
to reduce the cost of generating electricity and enable the facility to continue to operate
beyond the agreement period to address the removal of ash trees, as described in paragraph
(b), clause (1), without any subsidy or contribution from any power purchase agreement
after December 31, 2024. The cogeneration facility must submit periodic reports to the
commission regarding the efforts made under this paragraph.
new text end

new text begin (e) Upon approval of the new power purchase agreement, the commission must require
periodic reporting regarding progress toward development of a proposal for an electrification
project.
new text end

new text begin (f) Except as provided in paragraph (a), the commission is prohibited from approving a
power purchase agreement after the agreement period unless it approves an electrification
project. Nothing in this section shall require any utility to enter into a power purchase
agreement with the cogeneration facility after December 31, 2024.
new text end

new text begin (g) Upon approval of an electrification project, the commission must require periodic
reporting regarding the progress toward implementation of the electrification project.
new text end

new text begin (h) If the commission approves the proposal submitted under paragraph (b), clause (3),
the commission may allow the public utility to recover prudently incurred costs net of
revenues resulting from the electrification project through an automatic cost recovery
mechanism that allows for cost recovery outside of a general rate case. The cost recovery
mechanism approved by the commission must:
new text end

new text begin (1) allow a reasonable return on the capital invested in the electrification project by the
public utility, as determined by the commission; and
new text end

new text begin (2) recover costs only from the public utility's Minnesota electric service customers.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end