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HF 956

4th Engrossment - 88th Legislature (2013 - 2014) Posted on 05/08/2013 07:58am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 4th Engrossment

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A bill for an act
relating to energy; amending various provisions related to utilities; modifying
provisions governing cogeneration and small power production; establishing
a value of solar rate and related regulations; permitting community solar
generating facilities; creating various renewable energy incentives; requiring
studies; extending sunsets; making technical corrections; appropriating money;
amending Minnesota Statutes 2012, sections 16C.144, subdivision 2; 116C.779,
subdivision 3; 216B.02, subdivision 4; 216B.03; 216B.16, subdivision 7b, by
adding a subdivision; 216B.1635; 216B.164, subdivisions 3, 4, 6, by adding
subdivisions; 216B.1691, subdivisions 1, 2a, 2e, by adding a subdivision;
216B.1692, subdivisions 1, 8, by adding a subdivision; 216B.1695, subdivision
5, by adding a subdivision; 216B.23, subdivision 1a; 216B.241, subdivision 1e;
216B.2411, subdivision 3; 216C.436, subdivisions 7, 8; Laws 2005, chapter
97, article 10, section 3; proposing coding for new law in Minnesota Statutes,
chapters 216B; 216C; repealing Minnesota Statutes 2012, section 216B.1637.

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

Section 1.

Minnesota Statutes 2012, section 16C.144, subdivision 2, is amended to read:


Subd. 2.

Guaranteed energy-savings agreement.

The commissioner may enter
into a guaranteed energy-savings agreement with a qualified provider if:

(1) the qualified provider is selected through a competitive process in accordance
with the guaranteed energy-savings program guidelines within the Department of
Administration;

(2) the qualified provider agrees to submit an engineering report prior to the
execution of the guaranteed energy-savings agreement. The cost of the engineering report
may be considered as part of the implementation costs if the commissioner enters into a
guaranteed energy-savings agreement with the provider;

(3) the term of the guaranteed energy-savings agreement shall not exceed deleted text begin15deleted text endnew text begin 25
new text end years from the date of final installation;

(4) the commissioner finds that the amount it would spend on the utility cost-savings
measures recommended in the engineering report will not exceed the amount to be
saved in utility operation and maintenance costs over deleted text begin15deleted text endnew text begin 25new text end years from the date of
implementation of utility cost-savings measures;

(5) the qualified provider provides a written guarantee that the annual utility,
operation, and maintenance cost savings during the term of the guaranteed energy-savings
agreement will meet or exceed the annual payments due under a lease purchase agreement.
The qualified provider shall reimburse the state for any shortfall of guaranteed utility,
operation, and maintenance cost savings; and

(6) the qualified provider gives a sufficient bond in accordance with section
574.26 to the commissioner for the faithful implementation and installation of the utility
cost-savings measures.

Sec. 2.

Minnesota Statutes 2012, section 116C.779, subdivision 3, is amended to read:


Subd. 3.

Initiative for Renewable Energy and the Environment.

(a)
new text beginNotwithstanding subdivision 1, paragraph (g), new text endbeginning July 1, 2009, and each July 1
through 2011new text begin, and on July 1, 2013, and July 1, 2014new text end, $5,000,000 must be allocated from the
renewable development account to fund a grant to the Board of Regents of the University
of Minnesota for the Initiative for Renewable Energy and the Environment for the purposes
described in paragraph (b). The Initiative for Renewable Energy and the Environment
must set aside at least 15 percent of the funds received annually under the grant for
qualified projects conducted at a rural campus or experiment station. Any set-aside funds
not awarded to a rural campus or experiment station at the end of the fiscal year revert
back to the Initiative for Renewable Energy and the Environment for its exclusive use.
This subdivision does not create an obligation to contribute funds to the account.

(b) Activities funded under this grant may include, but are not limited to:

(1) environmentally sound production of energy from a renewable energy source,
including biomass and agricultural crops;

(2) environmentally sound production of hydrogen from biomass and any other
renewable energy source for energy storage and energy utilization;

(3) development of energy conservation and efficient energy utilization technologies;

(4) energy storage technologies; and

(5) analysis of policy options to facilitate adoption of technologies that use or
produce low-carbon renewable energy.

(c) For the purposes of this subdivision:

(1) "biomass" means plant and animal material, agricultural and forest residues,
mixed municipal solid waste, and sludge from wastewater treatment; and

(2) "renewable energy source" means hydro, wind, solar, biomass, and geothermal
energy, and microorganisms used as an energy source.

(d) Beginning January 15 of 2010, and each year thereafter, the director of the
Initiative for Renewable Energy and the Environment at the University of Minnesota shall
submit a report to the chair and ranking minority members of the senate and house of
representatives committees with primary jurisdiction over energy finance describing the
activities conducted during the previous year funded under this subdivision.

Sec. 3.

Minnesota Statutes 2012, section 216B.02, subdivision 4, is amended to read:


Subd. 4.

Public utility.

"Public utility" means persons, corporations, or other legal
entities, their lessees, trustees, and receivers, now or hereafter operating, maintaining,
or controlling in this state equipment or facilities for furnishing at retail natural,
manufactured, or mixed gas or electric service to or for the public or engaged in the
production and retail sale thereof but does not include (1) a municipality or a cooperative
electric association, organized under the provisions of chapter 308A, producing or
furnishing natural, manufactured, or mixed gas or electric service; (2) a retail seller of
compressed natural gas used as a vehicular fuel which purchases the gas from a public
utility; or (3) a retail seller of electricity used to recharge a battery that powers an electric
vehicle, as defined in section 169.011, subdivision 26a, and that is not otherwise a public
utility under this chapter. Except as otherwise provided, the provisions of this chapter shall
not be applicable to any sale of natural, manufactured, or mixed gas or electricity by a
public utility to another public utility for resale. In addition, the provisions of this chapter
shall not apply to a public utility whose total natural gas business consists of supplying
natural, manufactured, or mixed gas to not more than 650 customers within a city pursuant
to a franchise granted by the city, provided a resolution of the city council requesting
exemption from regulation is filed with the commission. The city council may rescind
the resolution requesting exemption at any time, and, upon the filing of the rescinding
resolution with the commission, the provisions of this chapter shall apply to the public
utility. No person shall be deemed to be a public utility if it furnishes its services only to
tenants or cooperative or condominium owners in buildings owned, leased, or operated
by such person. No person shall be deemed to be a public utility if it furnishes service
to occupants of a manufactured home or trailer park owned, leased, or operated by such
person. No person shall be deemed to be a public utility if it produces or furnishes service
to less than 25 persons.new text begin No person shall be deemed to be a public utility solely as a result
of financing or owning distributed generation equipment located on a customer's property,
provided that all of the electricity produced by the generating equipment is delivered or
sold to the utility that serves the customer.
new text end

Sec. 4.

Minnesota Statutes 2012, section 216B.03, is amended to read:


216B.03 REASONABLE RATE.

Every rate made, demanded, or received by any public utility, or by any two or
more public utilities jointly, shall be just and reasonable. Rates shall not be unreasonably
preferential, unreasonably prejudicial, or discriminatory, but shall be sufficient, equitable,
and consistent in application to a class of consumers. To the maximum reasonable extent,
the commission shall set rates to encourage energy conservation and renewable energy use
and to further the goals of sections 216B.164, 216B.241, deleted text beginanddeleted text end 216C.05new text begin, and 216C.412new text end. Any
doubt as to reasonableness should be resolved in favor of the consumer. For rate-making
purposes a public utility may treat two or more municipalities served by it as a single class
wherever the populations are comparable in size or the conditions of service are similar.

Sec. 5.

Minnesota Statutes 2012, section 216B.16, is amended by adding a subdivision
to read:


new text begin Subd. 6e. new text end

new text begin Solar energy production incentive. new text end

new text begin (a) Except as otherwise provided in
this subdivision, all assessments authorized by section 216C.412 incurred in connection
with the solar energy production incentive shall be recognized and included by the
commission in the determination of just and reasonable rates as if the expenses were
directly made or incurred by the utility in furnishing utility service.
new text end

new text begin (b) The commission shall not include expenses for the solar energy production
incentive in determining just and reasonable electric rates for retail electric service provided
to customers receiving the low-income electric rate discount authorized by subdivision 14.
new text end

Sec. 6.

Minnesota Statutes 2012, section 216B.16, subdivision 7b, is amended to read:


Subd. 7b.

Transmission cost adjustment.

(a) Notwithstanding any other provision
of this chapter, the commission may approve a tariff mechanism for the automatic annual
adjustment of charges for the Minnesota jurisdictional costs new text beginnet of associated revenues new text endofnew text begin:
new text end

(i) new transmission facilities that have been separately filed and reviewed and
approved by the commission under section 216B.243 or are certified as a priority project
or deemed to be a priority transmission project under section 216B.2425; deleted text beginanddeleted text end

(ii) new text beginnew transmission facilities approved by the regulatory commission of the state
in which the new transmission facilities are to be constructed, to the extent approval
is required by the laws of that state, and determined by the Midwest Independent
Transmission System Operator to benefit the utility or integrated transmission system; and
new text end

new text begin (iii) new text endcharges incurred by a utility new text beginunder a federally approved tariff new text endthat accrue
from other transmission owners' regionally planned transmission projects that have been
determined by the Midwest Independent new text beginTransmission new text endSystem Operator to benefit the
utilitydeleted text begin, as provided for under a federally approved tariffdeleted text endnew text begin or integrated transmission systemnew text end.

(b) Upon filing by a public utility or utilities providing transmission service, the
commission may approve, reject, or modify, after notice and comment, a tariff that:

(1) allows the utility to recover on a timely basis the costs net of revenues of
facilities approved under section 216B.243 or certified or deemed to be certified under
section 216B.2425 or exempt from the requirements of section 216B.243;

(2) allows the new text beginutility to recover new text endcharges incurred deleted text beginby a utilitydeleted text endnew text begin under a federally
approved tariff
new text end that accrue from other transmission owners' regionally planned
transmission projects that have been determined by the Midwest Independent new text beginTransmission
new text endSystem Operator to benefit the utilitydeleted text begin, as provided for under a federally approved tariff
deleted text endnew text begin or integrated transmission systemnew text end. These charges must be reduced or offset by revenues
received by the utility and by amounts the utility charges to other regional transmission
owners, to the extent those revenues and charges have not been otherwise offset;

(3) new text beginallows the utility to recover on a timely basis the costs net of associated revenues
of facilities approved by the regulatory commission of the state in which the new
transmission facilities are to be constructed and determined by the Midwest Independent
Transmission System Operator to benefit the utility or integrated transmission system;
new text end

new text begin (4) new text endallows a return on investment at the level approved in the utility's last general
rate case, unless a different return is found to be consistent with the public interest;

deleted text begin (4)deleted text end new text begin(5) new text endprovides a current return on construction work in progress, provided that
recovery from Minnesota retail customers for the allowance for funds used during
construction is not sought through any other mechanism;

deleted text begin (5)deleted text end new text begin(6) new text endallows for recovery of other expenses if shown to promote a least-cost project
option or is otherwise in the public interest;

deleted text begin (6)deleted text end new text begin(7) new text endallocates project costs appropriately between wholesale and retail customers;

deleted text begin (7)deleted text end new text begin(8) new text endprovides a mechanism for recovery above cost, if necessary to improve the
overall economics of the project or projects or is otherwise in the public interest; and

deleted text begin (8)deleted text end new text begin(9) new text endterminates recovery once costs have been fully recovered or have otherwise
been reflected in the utility's general rates.

(c) A public utility may file annual rate adjustments to be applied to customer bills
paid under the tariff approved in paragraph (b). In its filing, the public utility shall provide:

(1) a description of and context for the facilities included for recovery;

(2) a schedule for implementation of applicable projects;

(3) the utility's costs for these projects;

(4) a description of the utility's efforts to ensure the lowest costs to ratepayers for
the project; and

(5) calculations to establish that the rate adjustment is consistent with the terms
of the tariff established in paragraph (b).

(d) Upon receiving a filing for a rate adjustment pursuant to the tariff established in
paragraph (b), the commission shall approve the annual rate adjustments provided that,
after notice and comment, the costs included for recovery through the tariff were or are
expected to be prudently incurred and achieve transmission system improvements at the
lowest feasible and prudent cost to ratepayers.

Sec. 7.

Minnesota Statutes 2012, section 216B.1635, is amended to read:


216B.1635 RECOVERY OF GAS UTILITY INFRASTRUCTURE COSTS.

Subdivision 1.

Definitions.

(a) "Gas utility" means a public utility as defined in
section 216B.02, subdivision 4, that furnishes natural gas service to retail customers.

(b) "Gas utility infrastructure costs" or "GUIC" means new text begincosts incurred in new text endgas utility
projects that:

(1) do not serve to increase revenues by directly connecting the infrastructure
replacement to new customers;

(2) are in service but were not included in the gas utility's rate base in its most
recent general rate casedeleted text begin; anddeleted text endnew text begin, or are planned to be in service during the period covered
by the report submitted under subdivision 2, but in no case longer than the one-year
forecast period in the report; and
new text end

(3) deleted text beginreplace or modify existing infrastructure if the replacement or modification does
not constitute a betterment, unless the betterment is required by a political subdivision,
as evidenced by specific documentation from the government entity requiring the
replacement or modification of infrastructure
deleted text endnew text begin do not constitute a betterment, unless the
betterment is based on requirements by a political subdivision or a federal or state agency,
as evidenced by specific documentation, an order, or other similar requirement from the
government entity requiring the replacement or modification of infrastructure
new text end.

(c) "Gas utility projects" means deleted text beginrelocation anddeleted text endnew text begin:
new text end

new text begin (1)new text end replacement of natural gas facilities located in the public right-of-way required
by the construction or improvement of a highway, road, street, public building, or other
public work by or on behalf of the United States, the state of Minnesota, or a political
subdivisiondeleted text begin.deleted text endnew text begin; and
new text end

new text begin (2) replacement or modification of existing natural gas facilities, including surveys,
assessments, reassessment, and other work necessary to determine the need for replacement
or modification of existing infrastructure that is required by a federal or state agency.
new text end

Subd. 2.

new text beginGas infrastructure new text endfiling.

deleted text begin(a) The commission may approve a gas utility's
petition for a rate schedule
deleted text end new text beginA public utility submitting a petition new text endto recover deleted text beginGUICdeleted text end new text begingas
infrastructure costs
new text endunder this sectiondeleted text begin. A gas utility maydeleted text end new text beginmust submit to the commission,
the department, and interested parties a gas infrastructure project plan report and a
new text endpetition
deleted text beginthe commission to recover a rate of return, income taxes on the rate of return, incremental
property taxes, plus incremental depreciation expense associated with GUIC
deleted text endnew text begin for rate
recovery of only incremental costs associated with projects under subdivision 1, paragraph
(c). The report and petition must be made at least 150 days in advance of implementation
of the rate schedule, provided that the rate schedule will not be implemented until the
petition is approved by the commission pursuant to subdivision 5. The report must be
for a forecast period of one year
new text end.

deleted text begin (b) The filing is subject to the following:
deleted text end

deleted text begin (1) A gas utility may submit a filing under this section no more than once per year.
deleted text end

deleted text begin (2) A gas utility must file sufficient information to satisfy the commission regarding
the proposed GUIC or be subject to denial by the commission. The information includes,
but is not limited to:
deleted text end

deleted text begin (i) the government entity ordering the gas utility project and the purpose for which
the project is undertaken;
deleted text end

deleted text begin (ii) the location, description, and costs associated with the project;
deleted text end

deleted text begin (iii) a description of the costs, and salvage value, if any, associated with the existing
infrastructure replaced or modified as a result of the project;
deleted text end

deleted text begin (iv) the proposed rate design and an explanation of why the proposed rate design
is in the public interest;
deleted text end

deleted text begin (v) the magnitude and timing of any known future gas utility projects that the utility
may seek to recover under this section;
deleted text end

deleted text begin (vi) the magnitude of GUIC in relation to the gas utility's base revenue as approved
by the commission in the gas utility's most recent general rate case, exclusive of gas
purchase costs and transportation charges;
deleted text end

deleted text begin (vii) the magnitude of GUIC in relation to the gas utility's capital expenditures since
its most recent general rate case;
deleted text end

deleted text begin (viii) the amount of time since the utility last filed a general rate case and the utility's
reasons for seeking recovery outside of a general rate case; and
deleted text end

deleted text begin (ix) documentation supporting the calculation of the GUIC.
deleted text end

new text begin Subd. 3. new text end

new text begin Gas infrastructure project plan report. new text end

new text begin The gas infrastructure project
plan report required to be filed under subdivision 2 shall include all pertinent information
and supporting data on each proposed project including, but not limited to, project
description and scope, estimated project costs, and the estimated project in-service date.
new text end

new text begin Subd. 4. new text end

new text begin Cost recovery petition for utility's facilities. new text end

new text begin Notwithstanding any other
provision of this chapter, the commission may approve a rate schedule for the automatic
annual adjustment of charges for gas utility infrastructure costs net of revenues under
this section, including a rate of return, income taxes on the rate of return, incremental
property taxes, incremental depreciation expense, and any incremental operation and
maintenance costs. A gas utility's petition for approval of a rate schedule to recover
gas utility infrastructure costs outside of a general rate case under section 216B.16 is
subject to the following:
new text end

new text begin (1) a gas utility may submit a filing under this section no more than once per year; and
new text end

new text begin (2) a gas utility must file sufficient information to satisfy the commission regarding
the proposed GUIC. The information includes but is not limited to:
new text end

new text begin (i) the information required to be included in the gas infrastructure project plan
report under subdivision 3;
new text end

new text begin (ii) the government entity ordering or requiring the gas utility project and the
purpose for which the project is undertaken;
new text end

new text begin (iii) a description of the estimated costs and salvage value, if any, associated with the
existing infrastructure replaced or modified as a result of the project;
new text end

new text begin (iv) a comparison of the utility's estimated costs included in the gas infrastructure
project plan and the actual costs incurred, including a description of the utility's efforts to
ensure the costs of the facilities are reasonable and prudently incurred;
new text end

new text begin (v) calculations to establish that the rate adjustment is consistent with the terms
of the rate schedule, including the proposed rate design and an explanation of why the
proposed rate design is in the public interest;
new text end

new text begin (vi) the magnitude and timing of any known future gas utility projects that the
utility may seek to recover under this section;
new text end

new text begin (vii) the magnitude of GUIC in relation to the gas utility's base revenue as approved
by the commission in the gas utility's most recent general rate case, exclusive of gas
purchase costs and transportation charges;
new text end

new text begin (viii) the magnitude of GUIC in relation to the gas utility's capital expenditures
since its most recent general rate case; and
new text end

new text begin (ix) the amount of time since the utility last filed a general rate case and the utility's
reasons for seeking recovery outside of a general rate case.
new text end

new text begin Subd. 5. new text end

new text begin Commission action. new text end

new text begin Upon receiving a gas utility report and petition for
cost recovery under subdivision 2, the commission may approve the annual GUIC rate
adjustments provided that, after notice and comment, the commission determines that the
costs included for recovery through the rate schedule are prudently incurred and achieve
gas facility improvements at the lowest reasonable and prudent cost to ratepayers.
new text end

new text begin Subd. 6. new text end

new text begin Rate of return. new text end

new text begin The return on investment for the rate adjustment shall be
at the level approved by the commission in the public utility's most recently completed
general rate case, unless the commission determines that a different rate of return is in
the public interest.
new text end

Subd. deleted text begin3deleted text endnew text begin 7new text end.

Commission authority; rules.

The commission may issue orders and
adopt rules necessary to implement and administer this section.

Sec. 8.

Minnesota Statutes 2012, section 216B.164, is amended by adding a
subdivision to read:


new text begin Subd. 2a. new text end

new text begin Definitions. new text end

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

new text begin (b) "Aggregated meter" means a meter located on the premises of a customer's
owned or leased property that is contiguous with property containing the customer's
designated meter.
new text end

new text begin (c) "Capacity" means the number of megawatts alternating current (AC) at the point
of interconnection between a solar photovoltaic device and a utility's electric system.
new text end

new text begin (d) "Cogeneration" means a combined process whereby electrical and useful thermal
energy are produced simultaneously.
new text end

new text begin (e) "Contiguous property" means property owned or leased by the customer sharing
a common border, without regard to interruptions in contiguity caused by easements,
public thoroughfares, transportation rights-of-way, or utility rights-of-way.
new text end

new text begin (f) "Customer" means the person who is named on the utility electric bill for the
premises.
new text end

new text begin (g) "Designated meter" means a meter that is physically attached to the customer's
facility that the customer-generator designates as the first meter to which net metered
credits are to be applied as the primary meter for billing purposes when the customer is
serviced by more than one meter.
new text end

new text begin (h) "Distributed generation" means a facility that:
new text end

new text begin (1) has a capacity of ten megawatts or less;
new text end

new text begin (2) is interconnected with a utility's distribution system, over which the commission
has jurisdiction; and
new text end

new text begin (3) generates electricity from natural gas, renewable fuel, or a similarly clean fuel,
and may include waste heat, cogeneration, or fuel cell technology.
new text end

new text begin (i) "High-efficiency distributed generation" means a distributed energy facility
that has a minimum efficiency of 40 percent, as calculated under section 272.0211,
subdivision 1.
new text end

new text begin (j) "Net metered facility" means an electric generation facility constructed for the
purpose of offsetting energy use through the use of renewable energy or high-efficiency
distributed generation sources.
new text end

new text begin (k) "Renewable energy" has the meaning given in section 216B.2411, subdivision 2.
new text end

new text begin (l) "Standby charge" means a charge imposed by an electric utility upon a distributed
generation facility for the recovery of fixed costs necessary to make electricity service
available to the distributed generation facility.
new text end

Sec. 9.

Minnesota Statutes 2012, section 216B.164, subdivision 3, is amended to read:


Subd. 3.

Purchases; small facilities.

(a) For a qualifying facility having less than
40-kilowatt capacitynew text begin if interconnected with a cooperative association or municipal utility,
or less than a 1,000-kilowatt capacity if interconnected with a public utility
new text end, the customer
shall be billed for the net energy supplied by the utility according to the applicable
rate schedule for sales to that class of customer. In the case of net input into the utility
system by a qualifying facility having less than 40-kilowatt capacitynew text begin if interconnected
with a cooperative association or municipal utility, or less than a 1,000-kilowatt capacity
if interconnected with a public utility
new text end, compensation to the customer shall be at a per
kilowatt-hour rate determined under paragraph (b) or (c).

(b) In setting rates, the commission shall consider the fixed distribution costs to the
utility not otherwise accounted for in the basic monthly charge and shall ensure that the
costs charged to the qualifying facility are not discriminatory in relation to the costs
charged to other customers of the utility. The commission shall set the rates for net
input into the utility system based on avoided costs as defined in the Code of Federal
Regulations, title 18, section 292.101, paragraph (b)(6), the factors listed in Code of
Federal Regulations, title 18, section 292.304, and all other relevant factors.

(c) Notwithstanding any provision in this chapter to the contrary, a qualifying facility
having less than 40-kilowatt capacity new text beginif interconnected with a cooperative association or
municipal utility, or less than a 1,000-kilowatt capacity if interconnected with a public
utility,
new text endmay elect that the compensation for net input by the qualifying facility into the
utility system shall be at the average retail utility energy rate. "Average retail utility energy
rate" is defined as the average of the retail energy rates, exclusive of special rates based
on income, age, or energy conservation, according to the applicable rate schedule of the
utility for sales to that class of customer.

(d) If the qualifying facility is interconnected with a nongenerating utility which has
a sole source contract with a municipal power agency or a generation and transmission
utility, the nongenerating utility may elect to treat its purchase of any net input under this
subdivision as being made on behalf of its supplier and shall be reimbursed by its supplier
for any additional costs incurred in making the purchase. Qualifying facilities having less
than 40-kilowatt capacity new text beginif interconnected with a cooperative association or municipal
utility, or less than a 1,000-kilowatt capacity if interconnected with a public utility,
new text endmay, at
the customer's option, elect to be governed by the provisions of subdivision 4.

Sec. 10.

Minnesota Statutes 2012, section 216B.164, subdivision 4, is amended to read:


Subd. 4.

Purchases; wheeling; costs.

(a) Except as otherwise provided in paragraph
(c), this subdivision shall apply to all qualifying facilities having 40-kilowatt capacity
or more new text beginif interconnected with a cooperative association or municipal utility, and a
1,000-kilowatt capacity or more if interconnected with a public utility,
new text endas well as qualifying
facilities as defined in subdivision 3 which elect to be governed by its provisions.

(b) The utility to which the qualifying facility is interconnected shall purchase all
energy and capacity made available by the qualifying facility. The qualifying facility shall
be paid the utility's full avoided capacity and energy costs as negotiated by the parties, as
set by the commission, or as determined through competitive bidding approved by the
commission. The full avoided capacity and energy costs to be paid a qualifying facility
that generates electric power by means of a renewable energy source are the utility's least
cost renewable energy facility or the bid of a competing supplier of a least cost renewable
energy facility, whichever is lower, unless the commission's resource plan order, under
section 216B.2422, subdivision 2, provides that the use of a renewable resource to meet
the identified capacity need is not in the public interest.

(c) For all qualifying facilities having 30-kilowatt capacity or more, the utility
shall, at the qualifying facility's or the utility's request, provide wheeling or exchange
agreements wherever practicable to sell the qualifying facility's output to any other
Minnesota utility having generation expansion anticipated or planned for the ensuing ten
years. The commission shall establish the methods and procedures to insure that except
for reasonable wheeling charges and line losses, the qualifying facility receives the full
avoided energy and capacity costs of the utility ultimately receiving the output.

(d) The commission shall set rates for electricity generated by renewable energy.

Sec. 11.

Minnesota Statutes 2012, section 216B.164, is amended by adding a
subdivision to read:


new text begin Subd. 4a. new text end

new text begin Aggregation of meters. new text end

new text begin (a) For the purpose of measuring electricity
under subdivision 3, a public utility must aggregate for billing purposes a customer's
designated meter with one or more aggregated meters if a customer requests that it do
so. To qualify for aggregation under this subdivision, a meter must be owned by the
customer requesting the aggregation, must be located on contiguous property owned by
the customer requesting the aggregation, and the total capacity of all qualifying facilities
attached to a customer's aggregated meters must not exceed the maximum capacity of
qualifying facilities eligible to be governed under this section. Any aggregation of meters
must be governed under this section.
new text end

new text begin (b) A customer must give at least 60 days' notice to the public utility prior to a
request that additional meters be included in meter aggregation. The specific meters must
be identified at the time of the request. In the event that more than one meter is identified,
the customer must designate the rank order for the aggregated meters to which the net
metered credits are to be applied. At least 60 days prior to the beginning of the next
annual billing period, a customer may amend the rank order of the aggregated meters,
subject to the provisions of this subdivision.
new text end

new text begin (c) The aggregation of meters applies only to charges that use kilowatt-hours as the
billing determinant. All other charges applicable to each meter account must be billed to
the customer.
new text end

new text begin (d) If the net metered facility supplies more electricity to the public utility than
the energy usage recorded by the customer's designated and aggregated meters during a
monthly billing period, the public utility must apply credits to the customer's next monthly
bill for the excess kilowatt-hours. The public utility must first apply the kilowatt-hour
credit to the charges for the designated meter and then to the charges for the aggregated
meters in the rank order specified by the customer.
new text end

new text begin (e) With the commission's prior approval, a public utility may charge a customer
requesting to aggregate meters a reasonable fee to cover the administrative costs incurred
as a result of implementing the provisions of this subdivision, pursuant to a tariff approved
by the commission.
new text end

Sec. 12.

Minnesota Statutes 2012, section 216B.164, is amended by adding a
subdivision to read:


new text begin Subd. 4b. new text end

new text begin Limiting cumulative generation. new text end

new text begin The commission may limit the
cumulative generation of qualifying facilities under subdivision 3. A public utility may
request the commission to limit the cumulative generation of qualifying facilities under
subdivision 3 upon a showing that such generation has reached three percent of the public
utility's annual retail electricity sales. The commission may limit additional net metering
obligations under this subdivision only after providing notice and opportunity for public
comment. In determining whether to limit additional net metering obligations under this
subdivision, the commission shall consider:
new text end

new text begin (1) the environmental and other public policy benefits of net metered facilities;
new text end

new text begin (2) the impact of net metered facilities on electricity rates for customers without
net metered systems;
new text end

new text begin (3) the effects of net metering on the reliability of the electric system;
new text end

new text begin (4) technical advances or technical concerns; and
new text end

new text begin (5) other statutory obligations imposed on the commission or on a utility.
new text end

new text begin The commission may limit additional net metering obligations under clauses (2) to (4) only
if it determines that additional net metering obligations would cause significant rate impact,
require significant measures to address reliability, or raise significant technical issues.
new text end

Sec. 13.

Minnesota Statutes 2012, section 216B.164, subdivision 6, is amended to read:


Subd. 6.

Rules and uniform contract.

(a) The commission shall promulgate rules
to implement the provisions of this section. The commission shall also establish a uniform
statewide form of contract for use between utilities and a qualifying facility having less
than deleted text begin40-kilowattdeleted text endnew text begin 1,000-kilowattnew text end capacity.

(b) The commission shall require the qualifying facility to provide the utility with
reasonable access to the premises and equipment of the qualifying facility if the particular
configuration of the qualifying facility precludes disconnection or testing of the qualifying
facility from the utility side of the interconnection with the utility remaining responsible
for its personnel.

(c) The uniform statewide form of contract shall be applied to all new and existing
interconnections established between a utility and a qualifying facility having less than
deleted text begin40-kilowattdeleted text endnew text begin 1,000-kilowattnew text end capacity, except that existing contracts may remain in force
until written notice of election that the uniform statewide contract form applies is given
by either party to the other, with the notice being of the shortest time period permitted
under the existing contract for termination of the existing contract by either party, but
not less than ten nor longer than 30 days.

Sec. 14.

new text begin [216B.1641] VALUE OF SOLAR RATE.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin For the purposes of this section, "solar photovoltaic
device" has the meaning given in section 216C.06, subdivision 16, and must meet the
requirements of section 216C.25.
new text end

new text begin Subd. 2. new text end

new text begin Applicability. new text end

new text begin (a) Beginning January 1, 2014, this section shall apply to
public utilities selling electricity at retail in Minnesota.
new text end

new text begin (b) Notwithstanding section 216B.164, an owner of a solar photovoltaic device may,
with respect to the purchase price credited by a utility to an owner of a solar photovoltaic
device, elect to be governed under this section or section 216B.164. All other provisions
of section 216B.164, except those in subdivision 3 and subdivision 4, paragraphs (a)
to (c), shall apply to an owner of a solar photovoltaic device electing to be governed
under this section.
new text end

new text begin (c) This section does not apply to a utility that owns a solar photovoltaic device.
new text end

new text begin (d) An owner of a solar photovoltaic device governed under the net metering
provisions of section 216B.164 prior to the effective date of the commission order issued
under subdivision 9 and who elects to be governed under this section with respect to the
purchase price credited by a utility must provide written notice of that election to the
utility. The utility shall begin crediting the value of solar rate most recently approved by
the commission to the owner of the solar photovoltaic device on the first day of the first
month that begins at least 30 days after receipt of the notice.
new text end

new text begin (e) This section does not apply to a solar photovoltaic device whose capacity
exceeds two megawatts.
new text end

new text begin Subd. 3. new text end

new text begin Standby charge prohibited. new text end

new text begin A utility may not apply a standby charge to
a solar photovoltaic device governed under this section.
new text end

new text begin Subd. 4. new text end

new text begin Standard contract. new text end

new text begin The commission shall establish a statewide uniform
form of contract that must be used by a purchasing utility and an owner of a solar
photovoltaic device who elects to be governed under this section. The term of a contract
entered into under this section must be no less than 20 years. The agreement must provide
for credit of the value of solar rate as approved by the commission under this section,
and must require the transfer of all renewable energy credits associated with the energy
generated by the solar photovoltaic device to the purchasing utility.
new text end

new text begin Subd. 5. new text end

new text begin Credits. new text end

new text begin The utility interconnected to a solar photovoltaic device whose
owner elects to be governed under this section shall purchase, throughout the term of the
contract, all energy and capacity made available by the owner of the solar photovoltaic
device. All credits must be made at the value of solar rate approved by the commission
under this section.
new text end

new text begin Subd. 6. new text end

new text begin Value of solar rate; guidance document. new text end

new text begin (a) By December 1, 2013, and
each December 1 thereafter through 2048, the Department of Commerce shall develop
a value of solar guidance document that contains step-by-step procedures that a utility
subject to this section must use to calculate the utility's value of solar rate. The guidance
document must specify a method a utility must use to calculate the value of all the
components listed in paragraph (b), and may include formulas, discount rates, and other
provisions governing how the value of solar rate must be calculated.
new text end

new text begin (b) The value of solar rate is expressed on a per kilowatt-hour basis, and consists of
the following components:
new text end

new text begin (1) line loss savings equal to the value of the average amount of electricity lost
through transmission and distribution when electricity is generated by the utility's nonsolar
photovoltaic generators;
new text end

new text begin (2) transmission and distribution capacity savings equal to the value of delaying
the need for capital investment in a utility's transmission and distribution system by
contracting to purchase energy from solar photovoltaic devices;
new text end

new text begin (3) energy savings equal to the reduction in a utility's wholesale energy purchases
and costs, based on the time of day the energy would have been generated, realized as a
result of energy purchases from solar photovoltaic devices;
new text end

new text begin (4) generation capacity savings equal to the value of the benefit of the capacity
added to the utility's system by solar photovoltaic devices;
new text end

new text begin (5) fuel price hedge value equal to the value of eliminating price uncertainty
associated with the utility's purchases of fuel for electricity generation; and
new text end

new text begin (6) environmental benefits equal to the premium retail customers are willing to pay
to consume energy produced from renewable resources.
new text end

new text begin (c) The department may, based on known and measurable evidence of the economic
development benefits of solar electricity generation, including the net increase in local
employment and taxes generated from the manufacture, assembly, installation, operation,
and maintenance of solar photovoltaic devices, or other factors, incorporate additional
amounts into the value of solar rate.
new text end

new text begin (d) The value of solar rate is equal to the present value of the future revenue streams
of the value components calculated in paragraphs (b) and (c) over the useful life of a
solar photovoltaic device.
new text end

new text begin (e) Prior to preparing the value of solar guidance document, the Department of
Commerce shall obtain comments and recommendations from utilities, ratepayers, and
other interested parties regarding the content of the value of solar guidance document.
new text end

new text begin (f) By January 1, 2015, and every January 1 thereafter through 2049, the
commissioner shall make a determination as to whether the value of solar guidance
document developed under this subdivision needs to be revised. In making that
determination, the commissioner shall solicit comments and recommendations from
interested parties in the same manner as required under paragraph (e). After considering
the comments and recommendations, the commissioner may revise the value of solar
guidance document.
new text end

new text begin Subd. 7. new text end

new text begin Utilities to offer tariff. new text end

new text begin By April 1, 2014, and each April 1 thereafter
through 2049, a utility subject to this section shall file with the commission a value of
solar tariff based on its calculation of the utility's value of solar rate that is consistent with
the department's value of solar guidance document developed in subdivision 6. A utility
must include in its filing its method of calculation for each component listed in subdivision
6, paragraph (b). A utility filing a value of solar rate that differs from the value of solar
rate filed by the utility for the previous year shall submit to the commission the reasons
for and the methods it used to calculate the differences.
new text end

new text begin Subd. 8. new text end

new text begin Value of solar rate; billing. new text end

new text begin Notwithstanding section 216B.164, an owner
of a solar photovoltaic device who elects to receive the value of solar rate for electricity
generated by the solar photovoltaic device that is sold to a utility must be:
new text end

new text begin (1) charged by the utility the applicable rate schedule for sales to that class of
customer for all electricity consumed by the customer;
new text end

new text begin (2) credited the value of solar rate by the utility for all electricity generated by the
solar photovoltaic device;
new text end

new text begin (3) provided by the utility with a monthly bill that contains, in addition to the
amounts in clauses (1) and (2), the net amount owed to the utility or net credit realized
by the owner for that month and on a year-to-date basis. In the event that the customer
has a positive balance after the 12-month cycle ending on the last day of February, that
balance will be eliminated and the credit cycle will restart the following billing period
beginning March 1; and
new text end

new text begin (4) provided by the utility with a meter that allows for the separate calculation of the
amount of electricity consumed and generated at the property.
new text end

new text begin Subd. 9. new text end

new text begin Commission review; approval. new text end

new text begin (a) By July 1, 2014, and each July
1 thereafter through 2049, the commission shall review the filing submitted under
subdivision 7 and any comments on the filing made by the department or other interested
parties, and approve or modify each utility's value of solar tariff. The commission may,
at its discretion, solicit additional comments, information, and recommendations from
utilities, the department, and other interested parties.
new text end

new text begin (b) By July 1, 2014, and each January 1 thereafter through 2049, the commission
shall, by order, direct all electric utilities subject to this section to begin crediting the value
of solar rate most recently approved by the commission to:
new text end

new text begin (1) owners of solar photovoltaic devices who sign a standard contract under this
section on or after the first day of the first month following the effective date of the
order; and
new text end

new text begin (2) owners of solar photovoltaic devices who were governed under the net metering
provisions of section 216B.164 prior to the effective date of the order and who elect to
be governed under this section with respect to the purchase price credited by a utility by
complying with the provisions of subdivision 2, paragraph (d).
new text end

new text begin (c) In no case shall the commission approve a value of solar rate under this section
that is lower than the applicable retail rate of the subject utility.
new text end

Sec. 15.

new text begin [216B.1651] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For the purposes of sections 216B.1651 to 216B.1654, the
following definitions have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Community solar generating facility. new text end

new text begin "Community solar generating
facility" means a facility:
new text end

new text begin (1) that generates electricity by means of a solar photovoltaic device that has a
capacity of less than two megawatts direct current nameplate;
new text end

new text begin (2) that is interconnected with a utility's distribution system under the jurisdiction
of the commission;
new text end

new text begin (3) that is located in the electric service area of the utility with which it is
interconnected;
new text end

new text begin (4) whose subscribers purchase, under long-term contract with the community solar
generating facility, the right to consume the electricity generated from a specified portion
of the facility's generating capacity;
new text end

new text begin (5) that is not owned by a utility; and
new text end

new text begin (6) that has at least two subscribers.
new text end

new text begin Subd. 3. new text end

new text begin Facility manager. new text end

new text begin "Facility manager" means an entity that manages a
community solar generating facility for the benefit of subscribers and may, in addition,
develop, construct, own, or operate the community solar generating facility. A facility
manager may not be a utility, but may be:
new text end

new text begin (1) a person whose sole purpose is to beneficially own and operate a community
solar generating facility;
new text end

new text begin (2) a Minnesota nonprofit corporation organized under chapter 317A;
new text end

new text begin (3) a Minnesota cooperative association organized under chapter 308A or 308B;
new text end

new text begin (4) a Minnesota political subdivision or local government, including but not limited
to a county, statutory or home rule charter city, town, school district, public or private
higher education institution, or any other local or regional governmental organization such
as a board, commission, or association; or
new text end

new text begin (5) a tribal council.
new text end

new text begin Subd. 4. new text end

new text begin Renewable energy credit. new text end

new text begin "Renewable energy credit" has the meaning
given in section 216B.1691, subdivision 1, paragraph (d).
new text end

new text begin Subd. 5. new text end

new text begin Solar photovoltaic device. new text end

new text begin "Solar photovoltaic device" has the meaning
given in section 216C.06, subdivision 16.
new text end

new text begin Subd. 6. new text end

new text begin Subscriber. new text end

new text begin "Subscriber" means a retail customer of a utility who owns
one or more subscriptions of a community solar generating facility interconnected with
that utility. A facility manager may be a subscriber.
new text end

new text begin Subd. 7. new text end

new text begin Subscription. new text end

new text begin "Subscription" means a contract between a subscriber and a
community solar generating facility that has a term of no less than 20 years and that
provides to the subscriber a portion of the generation of the community solar generating
facility and a corresponding proportion of the electricity generated by the community
solar generating facility.
new text end

new text begin Subd. 8. new text end

new text begin Utility. new text end

new text begin "Utility" means a public utility as defined in section 216B.02,
subdivision 4.
new text end

Sec. 16.

new text begin [216B.1652] SUBSCRIPTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Presale of subscriptions. new text end

new text begin A community solar generating facility
may not commence construction of the facility until contracts have been executed for
subscriptions, excluding the subscription of the facility manager, that represent at least 80
percent of the proposed nameplate capacity of the community solar generating facility.
new text end

new text begin Subd. 2. new text end

new text begin Size. new text end

new text begin (a) A subscription must be a portion of the community solar generating
facility's nameplate capacity sized so as to produce no more than 120 percent of the annual
average amount of electricity consumed over the previous three years at the site where the
subscriber's meter is located. If the site is newly constructed, the subscription must be sized
based on 120 percent of the average annual amount of electricity consumed by a facility of
similar size and type in the utility's service area, as determined by the facility manager.
new text end

new text begin (b) A subscriber may not own one or more subscriptions whose total capacity
exceeds the maximum capacity allowed for a qualifying facility subject to section
216B.164, subdivision 3.
new text end

new text begin (c) A facility manager may not own subscriptions whose total capacity exceeds the
maximum subscription size allowed under paragraph (a) plus ten percent of the remaining
available nameplate capacity in the community solar generating facility, subject to the
limit in paragraph (b).
new text end

new text begin (d) The maximum subscription size for a subscriber consuming electricity generated
from an eligible energy technology, as defined in section 216B.1691, subdivision 1, at any
time during the term of the subscriber's subscription, is the maximum subscription size
allowed under paragraph (a) minus the nameplate capacity of the eligible energy technology
device providing electricity to the subscriber, subject to the limit in paragraph (b).
new text end

new text begin Subd. 3. new text end

new text begin Certification. new text end

new text begin Prior to the sale of a subscription, a facility manager
must provide certification to the subscriber signed by the facility manager under penalty
of perjury:
new text end

new text begin (1) identifying the rate of insolation at the community solar generating facility;
new text end

new text begin (2) certifying that the solar photovoltaic devices employed by the community solar
generating facility to generate electricity have an electrical energy degradation rate of no
more than 0.5 percent annually; and
new text end

new text begin (3) certifying that the community solar generating facility is in full compliance with
all applicable federal and state utility, securities, and tax laws.
new text end

new text begin Subd. 4. new text end

new text begin On-site subscriber. new text end

new text begin A subscriber who owns the property on which
a community solar generating facility is located has no more rights with respect to
subscription size or price than any other subscriber.
new text end

new text begin Subd. 5. new text end

new text begin Subscription prices. new text end

new text begin The price for a subscription to a community solar
generating facility is not subject to regulation by the commission and is negotiated
between the prospective subscriber and the facility manager.
new text end

new text begin Subd. 6. new text end

new text begin Subscription transfer. new text end

new text begin A subscriber that terminates the contract between
the subscriber and the community solar generating facility must transfer the subscription
to a person eligible to be a subscriber or to the facility manager at a price negotiated
by both parties.
new text end

new text begin Subd. 7. new text end

new text begin New subscribers. new text end

new text begin Within 30 days of the execution of a contract between the
community solar generating facility and a new subscriber, the facility manager shall submit
the following information to the utility serving the community solar generating facility:
new text end

new text begin (1) the new subscriber's name, address, number of meters, and utility customer
account; and
new text end

new text begin (2) the share of the community solar generating facility's nameplate capacity owned
by the new subscriber.
new text end

new text begin Subd. 8. new text end

new text begin Meter change. new text end

new text begin A subscriber that moves to a different property served by
the community solar generating facility from the property at which the subscriber resided
at the time the contract between the subscriber and the community solar generating facility
was executed, or that changes the number of meters attached to the subscriber's account,
must notify the facility manager within 30 days of the change.
new text end

new text begin Subd. 9. new text end

new text begin Renewable energy credits. new text end

new text begin (a) Notwithstanding any other law, a
subscriber owns the renewable energy credits associated with the electricity allocated to
the subscriber's subscription. A utility or facility manager may purchase renewable energy
credits under a contract with a subscriber.
new text end

new text begin (b) Renewable energy credits may not be assigned to a utility as a condition of entering
into a contract or an interconnection agreement with a community solar generating facility.
new text end

new text begin Subd. 10. new text end

new text begin Disputes. new text end

new text begin The dispute resolution provisions available under section
216B.164 shall be used to resolve disputes between a facility manager and the utility
serving the community solar generating facility.
new text end

Sec. 17.

new text begin [216B.1653] DISPOSITION OF ELECTRICITY GENERATED.
new text end

new text begin Subdivision 1. new text end

new text begin Allocation. new text end

new text begin (a) The total amount of electricity available for allocation
to all subscribers of a community solar generating facility shall be determined by a
production meter installed by the utility.
new text end

new text begin (b) The total amount of electricity available to a subscriber shall be the total amount
of electricity available for allocation to all subscribers of a community solar generating
facility prorated by a subscriber's subscription size in relation to the nameplate capacity of
the community solar generating facility.
new text end

new text begin (c) A subscriber may not resell electricity governed by the subscriber's contract
with a community solar generating facility.
new text end

new text begin (d) All electricity generated by a community solar generating facility that is not
allocated to or consumed by subscribers must be sold to the utility interconnected with
the community solar generating facility.
new text end

new text begin Subd. 2. new text end

new text begin Utility purchases. new text end

new text begin The utility to which the community solar generating
facility is interconnected shall purchase all electricity generated by the community solar
generating facility that is not consumed by subscribers. The price paid to the community
solar generating facility by the utility is governed by section 216B.164 or any law that
governs the price a utility must pay to purchase electricity from a solar photovoltaic device.
new text end

new text begin Subd. 3. new text end

new text begin Interconnection. new text end

new text begin The commission shall establish uniform fees for the
interconnection of a community solar generating facility with a utility.
new text end

new text begin Subd. 4. new text end

new text begin Nonutility status. new text end

new text begin Notwithstanding section 216B.02, a community solar
generating facility is not a public utility.
new text end

Sec. 18.

new text begin [216B.1654] BILLING.
new text end

new text begin Subdivision 1. new text end

new text begin Billing procedure. new text end

new text begin A subscriber to a community solar generating
facility must be:
new text end

new text begin (1) charged by the utility interconnected with the community solar generating
facility the utility's applicable rate schedule for sales to that class of customer for all
electricity consumed by the subscriber;
new text end

new text begin (2) paid by the utility the maximum rate allowable under section 216B.164, or
any other law that may govern the price a utility must pay to purchase electricity from
a solar photovoltaic device, for a portion of all electricity the utility purchases from
the community solar generating facility that is equal to the ratio of the subscriber's
subscription to the nameplate capacity of the community solar generating facility;
new text end

new text begin (3) provided by the utility with a monthly bill that contains, in addition to the
amounts in clauses (1) and (2), the net amount owed to the utility or net credit realized by
the owner for that month and on a year-to-date basis; and
new text end

new text begin (4) provided by the utility with a meter that allows for the separate calculation of the
amount of electricity consumed and generated at the property.
new text end

new text begin Subd. 2. new text end

new text begin Billing system. new text end

new text begin The commission shall, by January 1, 2014, establish a
uniform administrative system to credit the utility accounts of subscribers to a community
solar generating facility. In determining the uniform administrative system, the
commission shall solicit comments and recommendations from utilities, ratepayers, and
other interested parties, and shall review commercially available administrative systems
and administrative systems used in jurisdictions where entities similar to community
solar generating facilities are operating.
new text end

new text begin Subd. 3. new text end

new text begin Commission proceeding; rate adjustment. new text end

new text begin By September 1, 2014, the
commission shall initiate a proceeding to examine whether the rate paid by a utility to
purchase energy from a community solar generating facility under section 216B.1653,
subdivision 2, should be adjusted to reflect the actual fixed costs incurred by a utility to
provide service to a community solar generating facility.
new text end

Sec. 19.

Minnesota Statutes 2012, section 216B.1691, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) Unless otherwise specified in law, "eligible energy
technology" means an energy technology that generates electricity from the following
renewable energy sources:

(1) solar;

(2) wind;

(3) hydroelectric with a capacity of less than 100 megawatts;

(4) hydrogen, provided that after January 1, 2010, the hydrogen must be generated
from the resources listed in this paragraph; or

(5) biomass, which includes, without limitation, landfill gas; an anaerobic digester
system; the predominantly organic components of wastewater effluent, sludge, or related
by-products from publicly owned treatment works, but not including incineration of
wastewater sludge to produce electricity; and an energy recovery facility used to capture
the heat value of mixed municipal solid waste or refuse-derived fuel from mixed municipal
solid waste as a primary fuel.

(b) "Electric utility" means a public utility providing electric service, a generation
and transmission cooperative electric association, a municipal power agency, or a power
district.

(c) "Total retail electric sales" means the kilowatt-hours of electricity sold in a year
by an electric utility to retail customers of the electric utility or to a distribution utility
for distribution to the retail customers of the distribution utility. "Total retail electric
sales" does not include the sale of hydroelectricity supplied by a federal power marketing
administration or other federal agency, regardless of whether the sales are directly to a
distribution utility or are made to a generation and transmission utility and pooled for
further allocation to a distribution utility.

new text begin (d) "Renewable energy credit" means a certificate of proof, issued through the
accounting system approved by the commission under subdivision 4, attesting that one
unit of electricity was generated and delivered by an eligible energy technology, and
including all renewable and environmental attributes associated with the production of
electricity from the eligible energy technology.
new text end

Sec. 20.

Minnesota Statutes 2012, section 216B.1691, subdivision 2a, is amended to
read:


Subd. 2a.

Eligible energy technology standard.

(a) Except as provided in
paragraph (b), each electric utility shall generate or procure sufficient electricity generated
by an eligible energy technology to provide its retail customers in Minnesota, or the
retail customers of a distribution utility to which the electric utility provides wholesale
electric service, so that at least the following standard percentages of the electric utility's
total retail electric sales to retail customers in Minnesota are generated by eligible energy
technologies by the end of the year indicated:

(1)
2012
12 percent
(2)
2016
17 percent
(3)
2020
20 percent
(4)
2025
25 percent.

(b) An electric utility that owned a nuclear generating facility as of January 1, 2007,
must meet the requirements of this paragraph rather than paragraph (a). An electric utility
subject to this paragraph must generate or procure sufficient electricity generated by
an eligible energy technology to provide its retail customers in Minnesota or the retail
customer of a distribution utility to which the electric utility provides wholesale electric
service so that at least the following percentages of the electric utility's total retail electric
sales to retail customers in Minnesota are generated by eligible energy technologies by the
end of the year indicated:

(1)
2010
15 percent
(2)
2012
18 percent
(3)
2016
25 percent
(4)
2020
30 percent.

Of the 30 percent in 2020, at least 25 percent must be generated by solar energy
or wind energy conversion systems and the remaining five percent by other eligible
energy technology. Of the 25 percent that must be generated by wind or solar, no more
than one percent may be solar generated and the remaining 24 percent or greater must
be wind generated.

new text begin (c) By the end of 2030, each public utility shall generate or procure sufficient
electricity generated by an eligible energy technology to provide at least 40 percent of the
public utility's total retail electric sales to retail customers in Minnesota.
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. 21.

Minnesota Statutes 2012, section 216B.1691, subdivision 2e, is amended to
read:


Subd. 2e.

Rate impact of standard compliance; report.

Each electric utility must
submit to the commission and the legislative committees with primary jurisdiction over
energy policy a report containing an estimation of the rate impact of activities of the
electric utility necessary to comply with this section. new text beginIn consultation with the Department
of Commerce, the commission shall determine a uniform reporting system to ensure that
individual utility reports are consistent and comparable, and shall, by order, require each
electric utility subject to this section to use that reporting system.
new text endThe rate impact estimate
must be for wholesale rates and, if the electric utility makes retail sales, the estimate
shall also be for the impact on the electric utility's retail rates. Those activities include,
without limitation, energy purchases, generation facility acquisition and construction, and
transmission improvements. An initial report must be submitted within 150 days of May
28, 2011. After the initial report, a report must be updated and submitted as part of each
integrated resource plan or plan modification filed by the electric utility under section
216B.2422. The reporting obligation of an electric utility under this subdivision expires
December 31, 2025, for an electric utility subject to subdivision 2a, paragraph (a), and
December 31, 2020, for an electric utility subject to subdivision 2a, paragraph (b).

Sec. 22.

Minnesota Statutes 2012, section 216B.1691, is amended by adding a
subdivision to read:


new text begin Subd. 2f. new text end

new text begin Solar energy standard. new text end

new text begin (a) In addition to the requirements of subdivision
2a, each public utility shall generate or procure sufficient electricity generated by solar
energy to serve its retail electricity customers in Minnesota so that at least the following
standard percentages of the utility's total retail electric sales to retail customers in
Minnesota are generated by solar energy by the end of the year indicated:
new text end

new text begin (1)
new text end
new text begin 2016
new text end
new text begin 0.5 percent
new text end
new text begin (2)
new text end
new text begin 2020
new text end
new text begin 2.0 percent
new text end
new text begin (3)
new text end
new text begin 2025
new text end
new text begin 4.0 percent
new text end

new text begin (b) The solar energy standard established in this subdivision is subject to all the
provisions of this section governing a utility's standard obligation under subdivision 2a.
new text end

new text begin (c) It is an energy goal of the state of Minnesota that by 2030, ten percent of the
retail electric sales in Minnesota be generated by solar energy.
new text end

new text begin (d) For the purposes of calculating the total retail electric sales of a public utility
under this subdivision and subdivision 2a, paragraph (c), there shall be excluded retail
electric sales to customers that are:
new text end

new text begin (1) an iron mining extraction and processing facility, including a scram mining
facility as defined in Minnesota Rules, part 6130.0100, subpart 16; or
new text end

new text begin (2) a paper mill, wood products manufacturer, sawmill, or oriented strand board
manufacturer.
new text end

new text begin Those customers may not have included in the rates charged to them by the public
utility any costs of satisfying the solar standard specified by this subdivision.
new text end

Sec. 23.

Minnesota Statutes 2012, section 216B.1692, subdivision 1, is amended to read:


Subdivision 1.

Qualifying projects.

new text begin(a) new text endProjects that may be approved for the
emissions reduction-rate rider allowed in this section must:

(1) be installed on existing large electric generating power plants, as defined in
section 216B.2421, subdivision 2, clause (1), that are located in the state and that are
currently not subject to emissions limitations for new power plants under the federal Clean
Air Act, United States Code, title 42, section 7401 et seq.;

(2) not increase the capacity of the existing electric generating power plant more
than ten percent or more than 100 megawatts, whichever is greater; and

(3) result in the existing plant either:

(i) complying with applicable new source review standards under the federal Clean
Air Act; or

(ii) emitting air contaminants at levels substantially lower than allowed for new
facilities by the applicable new source performance standards under the federal Clean
Air Act; or

(iii) reducing emissions from current levels at a unit to the lowest cost-effective level
when, due to the age or condition of the generating unit, the public utility demonstrates
that it would not be cost-effective to reduce emissions to the levels in item (i) or (ii).

new text begin (b) Notwithstanding paragraph (a), a project may be approved for the emission
reduction rate rider allowed in this section if the project is to be installed on existing
large electric generating power plants, as defined in section 216B.2421, subdivision 2,
clause (1), that are located outside the state and are needed to comply with state or federal
air quality standards, but only if the project has received an advance determination of
prudence from the commission under section 216B.1695.
new text end

Sec. 24.

Minnesota Statutes 2012, section 216B.1692, is amended by adding a
subdivision to read:


new text begin Subd. 1a. new text end

new text begin Exemption. new text end

new text begin Subdivisions 2, 4, and 5, paragraph (c), clause (1), do not
apply to projects qualifying under subdivision 1, paragraph (b).
new text end

Sec. 25.

Minnesota Statutes 2012, section 216B.1692, subdivision 8, is amended to read:


Subd. 8.

Sunset.

This section is effective until December 31, deleted text begin2015deleted text endnew text begin 2020new text end, and
applies to plans, projects, and riders approved before that date and modifications made to
them after that date.

Sec. 26.

Minnesota Statutes 2012, section 216B.1695, subdivision 5, is amended to read:


Subd. 5.

Cost recovery.

The utility may begin recovery of costs that have been
incurred by the utility in connection with implementation of the project in the next rate
case following an advance determination of prudencenew text begin or in a rider approved under section
216B.1692
new text end. The commission shall review the costs incurred by the utility for the project.
The utility must show that the project costs are reasonable and necessary, and demonstrate
its efforts to ensure the lowest reasonable project costs. Notwithstanding the commission's
prior determination of prudence, it may accept, modify, or reject any of the project costs.
The commission may determine whether to require an allowance for funds used during
construction offset.

Sec. 27.

Minnesota Statutes 2012, section 216B.1695, is amended by adding a
subdivision to read:


new text begin Subd. 5a. new text end

new text begin Rate of return. new text end

new text begin The return on investment in the rider shall be at the level
approved by the commission in the public utility's most recently completed general rate
case, unless the commission determines that a different rate of return is in the public interest.
new text end

Sec. 28.

Minnesota Statutes 2012, section 216B.23, subdivision 1a, is amended to read:


Subd. 1a.

Authority to issue refund.

(a) On determining that a public utility has
charged a rate in violation of this chapter, a commission rule, or a commission order, the
commission, after conducting a proceeding, may require the public utility to refund to its
customers, in a manner approved by the commission, any revenues the commission finds
were collected as a result of the unlawful conduct. Any refund authorized by this section
is permitted in addition to any remedies authorized by section 216B.16 or any other law
governing rates. Exercising authority under this section does not preclude the commission
from pursuing penalties under sections 216B.57 to 216B.61 for the same conduct.

(b) This section must not be construed as allowing:

(1) retroactive ratemaking;

(2) refunds based on claims that prior or current approved rates have been unjust,
unreasonable, unreasonably preferential, discriminatory, insufficient, inequitable, or
inconsistent in application to a class of customers; or

(3) refunds based on claims that approved rates have not encouraged energy
conservation or renewable energy use, or have not furthered the goals of section 216B.164,
216B.241, deleted text beginordeleted text end 216C.05new text begin, or 216C.412new text end.

(c) A refund under this subdivision does not apply to revenues collected more than
six years before the date of the notice of the commission proceeding required under this
subdivision.

Sec. 29.

Minnesota Statutes 2012, section 216B.241, subdivision 1e, is amended to read:


Subd. 1e.

Applied research and development grants.

(a) The commissioner
may, by order, approve and make grants for applied research and development projects
of general applicability that identify new technologies or strategies to maximize energy
savings, improve the effectiveness of energy conservation programs, or document
the carbon dioxide reductions from energy conservation programs. When approving
projects, the commissioner shall consider proposals and comments from utilities and
other interested parties. The commissioner may assess up to $3,600,000 annually for the
purposes of this subdivision. The assessments must be deposited in the state treasury
and credited to the energy and conservation account created under subdivision 2a. An
assessment made under this subdivision is not subject to the cap on assessments provided
by section 216B.62, or any other law.

(b) The commissioner, as part of the assessment authorized under paragraph (a),
shall annually assess and grant up to $500,000 for the purpose of subdivision 9.

new text begin (c) The commissioner, as part of the assessment authorized under paragraph (a),
shall annually assess $500,000 per fiscal year for a grant to the partnership created in
section 216C.385, subdivision 2. The grant must be used to exercise the powers and
perform the duties specified in section 216C.385, subdivision 3.
new text end

new text begin (d) By February 15, 2014, and each February 15 thereafter, the commissioner shall
report to the chairs and ranking minority members of the committees of the legislature
with primary jurisdiction over energy policy and energy finance on the assessments made
under this subdivision for the previous calendar year and the use of the assessment. The
report must clearly describe the activities supported by the assessment and the parties
that engaged in those activities.
new text end

Sec. 30.

Minnesota Statutes 2012, section 216B.2411, subdivision 3, is amended to read:


Subd. 3.

Other provisions.

(a) Electricity generated by a facility constructed with
funds provided under this section and using an eligible renewable energy source may be
counted toward the renewable energy objectives in section 216B.1691, subject to the
provisions of that sectionnew text begin, except as provided in paragraph (c)new text end.

(b) Two or more entities may pool resources under this section to provide assistance
jointly to proposed eligible renewable energy projects. The entities shall negotiate and
agree among themselves for allocation of benefits associated with a project, such as the
ability to count energy generated by a project toward a utility's renewable energy objectives
under section 216B.1691new text begin, except as provided in paragraph (c)new text end. The entities shall provide a
summary of the allocation of benefits to the commissioner. A utility may spend funds under
this section for projects in Minnesota that are outside the service territory of the utility.

new text begin (c) Electricity generated by a solar photovoltaic device constructed with funds
provided under this section may be counted toward a public utility's solar energy standard
under section 216B.1691, subdivision 2f.
new text end

Sec. 31.

new text begin [216C.412] SOLAR ENERGY PRODUCTION INCENTIVE.
new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin A public utility providing retail electric service to
Minnesota customers is subject to the provisions of this section.
new text end

new text begin Subd. 2. new text end

new text begin Incentive payment. new text end

new text begin (a) Incentive payments may be made under this
section only to an owner of a solar photovoltaic device who has:
new text end

new text begin (1) submitted to the public utility to which the solar photovoltaic device is
interconnected, on a form prescribed by the public utility, an application to receive the
incentive; and
new text end

new text begin (2) received from the public utility in writing a determination that the solar
photovoltaic device qualifies for the incentive.
new text end

new text begin (b) A public utility shall make incentive payments under this section on a first-come,
first-served basis. A public utility is not required to make aggregate incentive payments
under this section in any one calendar year that exceed 1.33 percent of the public utility's
gross operating revenues from retail sales of electric service provided to Minnesota
customers during the previous calendar year.
new text end

new text begin (c) A public utility that owns a solar photovoltaic device is not eligible to receive
incentive payments under this section.
new text end

new text begin (d) A solar photovoltaic device whose capacity exceeds two megawatts is ineligible
to receive incentive payments under this section.
new text end

new text begin Subd. 3. new text end

new text begin Eligibility window; payment duration. new text end

new text begin (a) Payments may be made under
this section only for electricity generated from a solar photovoltaic device that first begins
generating electricity after January 1, 2014, through December 31, 2049.
new text end

new text begin (b) Payment of the incentive begins and runs consecutively from the date the solar
photovoltaic device begins generating electricity.
new text end

new text begin (c) A public utility paying an incentive under this section must enter into a contract
with an owner of a solar photovoltaic system under which the public utility agrees to make
incentive payments for a period of 20 years.
new text end

new text begin (d) No payment may be made under this section for electricity generated after
December 31, 2049.
new text end

new text begin Subd. 4. new text end

new text begin Amount of payment. new text end

new text begin (a) An incentive payment is based on the number of
kilowatt hours of electricity generated. The per-kilowatt-hour amount of the payment for
each category of qualified solar photovoltaic device listed below is equal to the applicable
reference price specified in this subdivision minus:
new text end

new text begin (1) the value of solar rate approved by the commissioner under section 216B.1641,
for owners of solar photovoltaic devices that have elected to have the public utility's
purchase price for electricity governed by that section; or
new text end

new text begin (2) the rate a public utility pays an owner of a solar photovoltaic device for excess
electricity generation under section 216B.164, for owners of solar photovoltaic devices
that have elected to have the public utility's purchase price for electricity governed by
that section.
new text end

new text begin Nameplate Capacity
new text end
new text begin Reference Price
new text end
new text begin Residential
new text end
new text begin 20.4 cents per kilowatt-hour
new text end
new text begin Nonresidential:
new text end
new text begin Under 25 kilowatts
new text end
new text begin 18.1 cents per kilowatt-hour
new text end
new text begin Rooftop, 25 kilowatts to 2
megawatts
new text end
new text begin 15.9 cents per kilowatt-hour
new text end
new text begin Ground-mounted, 25 kilowatts to
2 megawatts
new text end
new text begin 13.6 cents per kilowatt-hour
new text end

new text begin (b) By January 1, 2015, and every January 1 thereafter through 2049, the
commissioner shall make a determination as to whether the reference price needs to be
adjusted in order to achieve the solar energy standard established in section 216B.1691,
subdivision 2f, at the lowest level of incentive payments. In making the determination,
the commissioner shall solicit comments and recommendations from public utilities,
ratepayers, and other interested parties regarding the calculation of the reference price.
After considering the comments and recommendations, the commissioner may adjust
the reference price.
new text end

new text begin (c) For the purposes of this subdivision, "reference price" means the lowest
per-kilowatt price for electricity generated by a qualified solar photovoltaic system the
commissioner determines is sufficient to provide an economic incentive that will result
in the development of aggregate capacity in this state to meet the solar energy standard
established in section 216B.1691, subdivision 2f.
new text end

new text begin Subd. 5. new text end

new text begin Dispute resolution. new text end

new text begin Disputes between an owner of a solar photovoltaic
device and a public utility paying an incentive under this section shall be resolved by
the commissioner of commerce.
new text end

Sec. 32.

new text begin [216C.413] DEFINITIONS.
new text end

new text begin For the purposes of sections 216C.412 to 216C.417, the following terms have the
meanings given.
new text end

new text begin (a) "Made in Minnesota" means the manufacture in this state of solar photovoltaic
modules:
new text end

new text begin (1) at a manufacturing facility located in Minnesota that is registered and authorized
to manufacture and apply the UL 1703 certification mark to solar photovoltaic modules by
Underwriters Laboratory (UL), CSA International, Intertek, or an equivalent UL-approved
independent certification agency;
new text end

new text begin (2) that bear UL 1703 certification marks from UL, CSA International, Intertek, or
an equivalent UL-approved independent certification agency, which must be physically
applied to the modules at a manufacturing facility described in clause (1); and
new text end

new text begin (3) that are manufactured in Minnesota:
new text end

new text begin (i) by manufacturing processes that must include tabbing, stringing, and lamination;
or
new text end

new text begin (ii) by interconnecting low-voltage direct current photovoltaic elements that produce
the final useful photovoltaic output of the modules.
new text end

new text begin A solar photovoltaic module that is manufactured by attaching microinverters, direct
current optimizers, or other power electronics to a laminate or solar photovoltaic
module that has received UL 1703 certification marks outside Minnesota from UL, CSA
International, Intertek, or an equivalent UL-approved independent certification agency is
not "Made in Minnesota" under this paragraph.
new text end

new text begin (b) "Solar photovoltaic module" has the meaning given in section 116C.7791,
subdivision 1, paragraph (e).
new text end

Sec. 33.

new text begin [216C.414] "MADE IN MINNESOTA" PRODUCTION INCENTIVE
ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Account establishment; management. new text end

new text begin A "Made in Minnesota"
production incentive account is established as a separate account in the special revenue
fund in the state treasury. The commissioner shall credit to the account the amounts
collected under this section and appropriations and transfers to the account. Earnings, such
as interest, dividends, and any other earnings arising from account assets, must be credited
to the account. Funds remaining in the account at the end of a fiscal year are not canceled
to the general fund but remain in the account. The commissioner shall manage the account.
new text end

new text begin Subd. 2. new text end

new text begin Purpose. new text end

new text begin The purpose of the account is to pay the "Made in Minnesota"
production incentive to owners of qualified solar photovoltaic devices, including related
administrative costs, under section 216C.417.
new text end

new text begin Subd. 3. new text end

new text begin Transfer. new text end

new text begin The public utility that contributes to the account established
under section 116C.779 shall transfer from that account up to $5,000,000 annually to
the commissioner of commerce for deposit in the account established in subdivision 1
for the purpose of paying the "Made in Minnesota" production incentive to owners of
solar photovoltaic devices that qualify under section 216C.417. The commissioner of
commerce shall request funds to be transferred by the public utility only to the extent
necessary to fully fund the annual aggregate "Made in Minnesota" incentives paid to
owners of solar photovoltaic devices.
new text end

new text begin Subd. 4. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the "Made in Minnesota"
production incentive under this section is annually appropriated from the account
established under this section to the commissioner of commerce for the purposes of this
section.
new text end

Sec. 34.

new text begin [216C.415] "MADE IN MINNESOTA" SOLAR ENERGY
PRODUCTION INCENTIVE; QUALIFICATION.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin A manufacturer of solar photovoltaic modules seeking
to qualify those modules as eligible to receive the "Made in Minnesota" solar energy
production incentive must submit an application to the commissioner of commerce on a
form prescribed by the commissioner. The application must contain:
new text end

new text begin (1) a technical description of the solar photovoltaic module and the processes used
to manufacture it, excluding proprietary details;
new text end

new text begin (2) documentation that the solar photovoltaic module meets all the required
applicable parts of the "Made in Minnesota" definition in section 216C.413, including
evidence of the UL 1703 right to mark for all solar photovoltaic modules seeking to
qualify as "Made in Minnesota";
new text end

new text begin (3) any additional nonproprietary information requested by the commissioner
of commerce; and
new text end

new text begin (4) certification signed by the chief executive officer of the manufacturing company
attesting to the truthfulness of the contents of the application and supporting materials
under penalty of perjury.
new text end

new text begin Subd. 2. new text end

new text begin Certification. new text end

new text begin If the commissioner determines that a manufacturer's solar
photovoltaic module meets the definition of "Made in Minnesota" in section 216C.413, the
commissioner shall issue the manufacturer a "Made in Minnesota" certificate containing
the name and model numbers of the certified solar photovoltaic modules and the date of
certification. The commissioner must issue or deny the issuance of a certificate within 90
days of receipt of a completed application. A copy of the certificate must be provided to
each purchaser of the solar photovoltaic module.
new text end

new text begin Subd. 3. new text end

new text begin Revocation of certification. new text end

new text begin The commissioner may revoke a certification
of a module as "Made in Minnesota" if the commissioner finds that the module no longer
meets the requirements to be certified. The revocation does not affect incentive payments
awarded prior to the revocation.
new text end

Sec. 35.

new text begin [216C.416] "MADE IN MINNESOTA" SOLAR ENERGY
PRODUCTION INCENTIVE.
new text end

new text begin Subdivision 1. new text end

new text begin Setting incentive. new text end

new text begin Within 90 days of a module being certified as
"Made in Minnesota," the commissioner of commerce shall set a solar energy production
incentive amount for that solar photovoltaic module for the purpose of the incentive
payment under section 216C.417. The incentive is a performance-based financial
incentive expressed as a per kilowatt-hour amount. The amount shall be used for incentive
applications approved in the year to which the incentive amount is applicable for the
ten-year duration of the incentive payments. An incentive amount must be calculated for
each module for each calendar year, through 2023.
new text end

new text begin Subd. 2. new text end

new text begin Criteria for determining incentive amount. new text end

new text begin (a) The commissioner shall
set the incentive payment amount by determining the average amount of incentive payment
required to allow an average owner of installed solar photovoltaic modules a reasonable
return on their investment. In setting the incentive amount the commissioner shall consider:
new text end

new text begin (1) an estimate of the installed cost per kilowatt-direct current, based on the cost data
supplied by the manufacturer in the application submitted under section 216C.415, and an
estimate of the average installation cost based on a representative sample of Minnesota
solar photovoltaic installed projects;
new text end

new text begin (2) the average insolation rate in Minnesota;
new text end

new text begin (3) an estimate of the decline in the generation efficiency of the solar photovoltaic
modules over time;
new text end

new text begin (4) the rate paid by utilities to owners of solar photovoltaic modules under section
216B.164 or other law;
new text end

new text begin (5) applicable federal tax incentives for installing solar photovoltaic modules; and
new text end

new text begin (6) the estimated levelized cost per kilowatt-hour generated.
new text end

new text begin (b) The commissioner shall annually, for incentive applications received in a year,
revise each incentive amount based on the factors in paragraph (a), clauses (1) to (6),
general market conditions, and the availability of other incentives. In no case shall the
"Made in Minnesota" incentive amount result in the "Made in Minnesota" incentives paid
exceeding 40 percent, net of average applicable taxes on the ten-year incentive payments,
of the average historic installation cost per kilowatt. The commissioner may exceed the 40
percent cap if the commissioner determines it is necessary to fully expend funds available
for incentive payments in a particular year.
new text end

new text begin Subd. 3. new text end

new text begin Metering of production. new text end

new text begin A utility or association must, at the expense of a
customer, provide a meter to measure the production of a solar photovoltaic module
system that is approved to receive incentive payments. The utility or association must
furnish the commissioner with information sufficient for the commissioner to determine
the incentive payment. The information must be provided on a calendar year basis by no
later than March 1. The commissioner shall provide an association or utility with forms to
use to provide the production information. A customer must attest to the accuracy of the
production information.
new text end

new text begin Subd. 4. new text end

new text begin Payment due date. new text end

new text begin Payments must be made no later than July 1 following
the year of production.
new text end

new text begin Subd. 5. new text end

new text begin Renewable energy credits. new text end

new text begin Renewable energy credits associated with
energy provided to a utility or association for which an incentive payment is made belong
to the utility or association.
new text end

Sec. 36.

new text begin [216C.417] "MADE IN MINNESOTA" SOLAR ENERGY
PRODUCTION INCENTIVE; PAYMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Incentive payment. new text end

new text begin Incentive payments may be made under this
section only to an owner of grid-connected solar photovoltaic modules with a total
nameplate capacity below 40-kilowatts direct current who:
new text end

new text begin (1) has submitted to the commissioner, on a form established by the commissioner,
an application to receive the incentive that has been approved by the commissioner;
new text end

new text begin (2) has received a "Made in Minnesota" certificate under section 216C.415 for
the module; and
new text end

new text begin (3) has installed on residential or commercial property solar photovoltaic modules
that are generating electricity and has received a "Made in Minnesota" certificate under
section 216C.415.
new text end

new text begin Subd. 2. new text end

new text begin Application process. new text end

new text begin Applications for an incentive payment must be
received by the commissioner between January 1 and February 28. The commissioner
shall by a random method approve the number of applications the commissioner
reasonably determines will exhaust the funds available for payment for the ten-year period
of incentive payments. Applications for residential and commercial installations shall be
separately randomly approved. The random method adopted by the commissioner must
allow for the commissioner to achieve statewide geographic distribution of the kilowatt
hours of payment if there are sufficient applications to achieve that distribution.
new text end

new text begin Subd. 3. new text end

new text begin Commissioner approval of incentive application. new text end

new text begin The commissioner
must approve an application for an incentive for an owner to be eligible for incentive
payments. The commissioner must not approve an application in a calendar year if the
commissioner determines there will not be sufficient funding available to pay an incentive
to the applicant for any portion of the ten-year duration of payment. The commissioner
shall annually establish a cap on the cumulative capacity for a program year based on
funds available and historic average installation costs. Receipt of an incentive is not
an entitlement and payment need only be made from available funds in the "Made in
Minnesota" solar production incentive account.
new text end

new text begin Subd. 4. new text end

new text begin Eligibility window; payment duration. new text end

new text begin (a) Payments may be made under
this section only for electricity generated from new solar photovoltaic module installations
that are commissioned between January 1, 2014, and December 31, 2023.
new text end

new text begin (b) The payment eligibility window of the incentive begins and runs consecutively
from the date the solar system is commissioned.
new text end

new text begin (c) An owner of solar photovoltaic modules may receive payments under this
section for a particular module for a period of ten years provided that sufficient funds are
available in the account.
new text end

new text begin (d) No payment may be made under this section for electricity generated after
December 31, 2033.
new text end

new text begin (e) An owner of solar photovoltaic modules may not first begin to receive payments
under this section after December 31, 2024.
new text end

new text begin Subd. 5. new text end

new text begin Allocation of payments. new text end

new text begin (a) If there are sufficient applications,
approximately 50 percent of the incentive payment shall be for owners of eligible solar
photovoltaic modules installed on residential property, and approximately 50 percent shall
be for owners of eligible solar photovoltaic modules installed on commercial property.
new text end

new text begin (b) The commissioner shall endeavor to geographically distribute incentives paid
under this section to owners of solar photovoltaic modules installed throughout the state.
new text end

new text begin (c) For purposes of this subdivision:
new text end

new text begin (1) "residential property" means residential real estate that is occupied and used as a
homestead by its owner or by a renter and includes "multifamily housing development"
as defined in section 462C.02, subdivision 5, except that residential property on which
solar photovoltaic modules (i) whose capacity exceeds ten kilowatts is installed; or
(ii) connected to a utility's distribution system and whose electricity is purchased by
several residents, each of whom own a share of the electricity generated, shall be deemed
commercial property; and
new text end

new text begin (2) "commercial property" means real property on which is located a business,
government, or nonprofit establishment.
new text end

new text begin Subd. 6. new text end

new text begin Limitation. new text end

new text begin An owner receiving an incentive payment under this section
may not receive a rebate under section 116C.7791 for the same solar photovoltaic modules.
new text end

Sec. 37.

Minnesota Statutes 2012, section 216C.436, subdivision 7, is amended to read:


Subd. 7.

Repayment.

An implementing entity that finances an energy improvement
under this section must:

(1) secure payment with a lien against the deleted text beginbenefiteddeleted text end qualifying real property; and

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

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

Sec. 38.

Minnesota Statutes 2012, section 216C.436, subdivision 8, is amended to read:


Subd. 8.

Bond issuance; repayment.

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

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

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

Sec. 39.

Laws 2005, chapter 97, article 10, section 3, is amended to read:


Sec. 3. SUNSET.

Sections 1 and 2 shall expire on June 30, deleted text begin2015deleted text endnew text begin 2023new text end.

Sec. 40. new text beginSTUDY OF POTENTIAL FOR SOLAR ENERGY INSTALLATIONS
ON PUBLIC BUILDINGS.
new text end

new text begin (a) The commissioner of commerce shall contract with an independent consultant
selected through a request for proposal process to produce a report analyzing the potential
for electricity generation resulting from the installation of solar photovoltaic devices on
and adjacent to public buildings in this state. The study must:
new text end

new text begin (1) determine, for buildings identified under the process initiated in Laws 2001,
chapter 212, article 1, section 3, commonly referred to as the B3 program, the amount
of space available for the installation of solar photovoltaic devices and the maximum
solar electricity generation potential; and
new text end

new text begin (2) utilize existing data on energy efficiency potential developed under the B3
program and determine how investments in energy efficiency for these buildings could
be combined with solar photovoltaic systems to enhance a building's overall energy
efficiency. The analysis must include a schedule for installing solar photovoltaic systems
on public buildings at a rate of four percent of available space per year and must prioritize
installations that result in the largest benefits with the shortest payback periods.
new text end

new text begin (b) By January 1, 2014, the commissioner of commerce shall submit a copy of the
report to the chairs and ranking minority members of the legislative committees with
primary jurisdiction over energy policy and state government finance.
new text end

new text begin (c) The commissioner of commerce shall assess an amount necessary under
Minnesota Statutes, section 216B.241, subdivision 1e, in addition to the assessment
already authorized under that subdivision, for the purpose of completing the study
described in this section.
new text end

Sec. 41. new text beginTRANSMISSION FOR FUTURE RENEWABLE ENERGY STANDARD.
new text end

new text begin (a) The commission shall order all Minnesota electric utilities, as defined in
Minnesota Statutes, section 216B.1691, subdivision 1, paragraph (b), and all transmission
companies, as defined in Minnesota Statutes, section 216B.02, to study and develop plans
for the transmission network enhancements necessary to support increasing the renewable
energy standard established in Minnesota Statutes, section 216B.1691, subdivision 2a, to
40 percent by 2030, while maintaining system reliability.
new text end

new text begin (b) The Minnesota electric utilities and transmission companies must complete the
study work under the direction of the commissioner of commerce. Prior to the start of the
study, the commissioner, in consultation with Minnesota electric utilities and transmission
companies, shall appoint a technical review committee consisting of up to 15 individuals
with experience and expertise in electric transmission system engineering, electric power
systems operations, and renewable energy generation technology to review the study's
proposed methods and assumptions, ongoing work, and preliminary results.
new text end

new text begin (c) As part of the planning process, the Minnesota electric utilities and transmission
companies must incorporate and build upon the analyses that have previously been done
or that are in progress including but not limited to the 2006 Minnesota Wind Integration
Study and ongoing work to address geographically dispersed development plans, the
2007 Minnesota Transmission for Renewable Energy Standard Study, the 2008 and
2009 Statewide Studies of Dispersed Renewable Generation, the 2009 Minnesota RES
Update, Corridor, and Capacity Validation Studies, the 2010 Regional Generation Outlet
Study, the 2011 Multi Value Project Portfolio Study, and recent and ongoing Midwest
Independent Transmission System Operator transmission expansion planning work. The
utilities and transmission companies shall collaborate with the Midwest Independent
Transmission System Operator to optimize and integrate, to the extent possible,
Minnesota's transmission plans with other regional considerations and to encourage the
Midwest Independent Transmission System Operator to incorporate Minnesota's planning
work into its transmission expansion future planning.
new text end

new text begin (d) The study must be completed and submitted to the Minnesota Public Utilities
Commission by November 1, 2014. The report shall include a description of the analyses
that have been conducted and the results, including:
new text end

new text begin (1) a conceptual plan for transmission necessary for generation interconnection and
delivery and for access to regional geographic diversity and regional supply and demand
side flexibility; and
new text end

new text begin (2) identification and development of potential solutions to any critical issues
encountered to support increasing the renewable energy standard to 40 percent by 2030
while maintaining system reliability, as well as potential impacts and barriers of increasing
the renewable energy standard to 45 percent and 50 percent.
new text end

Sec. 42. new text beginVALUE OF ON-SITE ENERGY STORAGE STUDY.
new text end

new text begin (a) The commissioner of commerce shall contract with an independent consultant
selected through a request for proposal process to produce a report analyzing the potential
costs and benefits of installing utility-managed, grid-connected energy storage devices in
residential and commercial buildings in this state. The study must:
new text end

new text begin (1) estimate the potential value of on-site energy storage devices as a
load-management tool to reduce costs for individual customers and for the utility, including
but not limited to reductions in energy, particularly peaking, costs, and capacity costs;
new text end

new text begin (2) examine the interaction of energy storage devices with on-site solar photovoltaic
devices; and
new text end

new text begin (3) analyze existing barriers to the installation of on-site energy storage devices by
utilities, and examine strategies and design potential economic incentives to overcome
those barriers.
new text end

new text begin (b) The commissioner of commerce shall assess an amount necessary under
Minnesota Statutes, section 216B.241, subdivision 1e, in addition to the assessment
already authorized under that subdivision, for the purpose of completing the study
described in this section.
new text end

new text begin (c) By January 1, 2014, the commissioner of commerce shall submit the study to
the chairs and ranking minority members of the legislative committees with jurisdiction
over energy policy and finance.
new text end

Sec. 43. new text beginVALUE OF SOLAR THERMAL STUDY.
new text end

new text begin (a) The commissioner of commerce shall contract with an independent consultant
selected through a request for proposal process to produce a report analyzing the potential
costs and benefits of expanding the installation of solar thermal projects, as defined in
Minnesota Statutes, section 216B.2411, subdivision 2, in residential and commercial
buildings in this state. The study must examine the potential for solar thermal projects
to reduce heating and cooling costs for individual customers and to reduce costs at the
utility level as well. The study must also analyze existing barriers to the installation of
on-site energy storage devices by utilities and examine strategies and design potential
economic incentives to overcome those barriers. By January 1, 2014, the commissioner
of commerce shall submit the study to the chairs and ranking minority members of the
legislative committees with jurisdiction over energy policy and finance.
new text end

new text begin (b) The commissioner of commerce shall assess an amount necessary under
Minnesota Statutes, section 216B.241, subdivision 1e, in addition to the assessment
already authorized under that subdivision, for the purpose of completing the study
described in this section.
new text end

Sec. 44. new text beginTRANSMISSION LINE; CERTIFICATE OF NEED REQUIRED AND
EVIDENCE REQUIRED.
new text end

new text begin (a) A high-voltage transmission line with a capacity of 100 kilovolts or more
proposed to be located within a city in the metropolitan area as defined in Minnesota
Statutes, section 473.121, subdivision 2, for which a route permit application was filed
between June 2011 and August 2011, and a certificate of need application was filed
between June 2012 and August 2012, to rebuild approximately eight miles of 69 kilovolt
transmission with a high-voltage transmission line to meet local area distribution needs,
must be approved in a certificate of need proceeding conducted under Minnesota Statutes,
section 216B.243. The certificate of need may be approved only if the commission finds
by clear and convincing evidence that there is no feasible, cost-effective, and available
distribution level alternative to the transmission line.
new text end

new text begin (b) Further proceedings regarding the routing of a high-voltage transmission line
described in this section shall be suspended until the Public Utilities Commission has
made a determination that the transmission line is needed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and
applies to route permits and certificate of need applications pending on or after that date.
new text end

Sec. 45. new text beginSEVERABILITY.
new text end

new text begin If any provision of this act is found to be unconstitutional and void, the remaining
provisions of this act are valid.
new text end

Sec. 46. new text beginAPPROPRIATIONS.
new text end

new text begin (a) $212,000 in fiscal year 2014 and $100,000 in fiscal year 2015 are appropriated
from the general fund to the commissioner of commerce for the purpose of carrying out
the activities required in this act. It is assumed that an amount equal to this appropriation
will be assessed by the commissioner of commerce under Minnesota Statutes, section
216B.62, and deposited in the general fund. The base for this appropriation is $80,000 in
fiscal year 2016 and $82,000 in fiscal year 2017.
new text end

new text begin (b) $436,000 in fiscal year 2014 and $226,000 in fiscal year 2015 are appropriated
from the general fund from the assessments on utilities to the Public Utilities Commission
for the purpose of carrying out the activities required in this act. It is assumed that
an amount equal to this appropriation will be assessed by the commission under
Minnesota Statutes, section 216B.62, and deposited in the general fund. The base for this
appropriation is $51,000 in fiscal year 2016 and $28,000 in fiscal year 2017.
new text end

Sec. 47. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2012, section 216B.1637, new text end new text begin is repealed.
new text end

Sec. 48. new text beginEFFECTIVE DATE.
new text end

new text begin Unless otherwise specified, sections 1 to 47 are effective the day following final
enactment.
new text end