Skip to main content Skip to office menu Skip to footer
Minnesota Legislature

Office of the Revisor of Statutes

SF 1431

1st Engrossment - 89th Legislature (2015 - 2016) Posted on 03/24/2015 08:58am

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

Current Version - 1st Engrossment

Line numbers 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
1.22 1.23 1.24 1.25 1.26 1.27 1.28 1.29 1.30 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 2.32 2.33 2.34 2.35 2.36 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31 3.32 3.33 3.34 3.35 3.36 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13
4.14 4.15 4.16 4.17
4.18 4.19 4.20 4.21
4.22 4.23 4.24 4.25 4.26 4.27
4.28 4.29 4.30 4.31 4.32 5.1 5.2 5.3
5.4
5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 5.20 5.21 5.22
5.23 5.24 5.25 5.26 5.27 5.28 5.29 5.30 5.31 5.32 5.33 6.1 6.2 6.3 6.4
6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 6.13 6.14 6.15 6.16 6.17 6.18 6.19 6.20 6.21 6.22 6.23 6.24 6.25 6.26 6.27 6.28 6.29 6.30 6.31 6.32 6.33 6.34 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11 7.12 7.13 7.14 7.15 7.16 7.17 7.18 7.19 7.20 7.21 7.22 7.23 7.24 7.25 7.26 7.27 7.28 7.29 7.30
7.31 7.32 7.33 7.34 7.35 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 8.10 8.11 8.12 8.13 8.14 8.15 8.16 8.17 8.18
8.19
8.20 8.21 8.22 8.23 8.24 8.25 8.26 8.27 8.28 8.29 8.30 8.31 8.32 8.33 8.34 8.35 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10 9.11 9.12 9.13 9.14 9.15 9.16 9.17 9.18 9.19 9.20 9.21 9.22 9.23 9.24 9.25 9.26 9.27 9.28 9.29 9.30 9.31 9.32 9.33 9.34 9.35 9.36 10.1 10.2 10.3 10.4
10.5 10.6 10.7 10.8 10.9 10.10 10.11 10.12 10.13 10.14 10.15 10.16 10.17 10.18 10.19 10.20 10.21 10.22 10.23 10.24 10.25 10.26 10.27 10.28 10.29 10.30 10.31 10.32 10.33 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 11.10 11.11 11.12 11.13 11.14 11.15 11.16 11.17 11.18 11.19 11.20 11.21 11.22 11.23 11.24 11.25 11.26 11.27 11.28 11.29 11.30 11.31 11.32 11.33 11.34 11.35 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9 12.10
12.11
12.12 12.13 12.14 12.15 12.16 12.17 12.18 12.19 12.20 12.21 12.22 12.23 12.24 12.25 12.26 12.27 12.28 12.29 12.30 12.31 12.32 12.33 12.34 12.35 13.1 13.2 13.3 13.4 13.5 13.6 13.7 13.8 13.9
13.10 13.11 13.12 13.13 13.14 13.15 13.16 13.17 13.18 13.19 13.20 13.21 13.22 13.23 13.24 13.25 13.26 13.27 13.28 13.29 13.30 13.31 13.32 13.33 13.34 13.35 14.1 14.2 14.3
14.4 14.5 14.6 14.7 14.8 14.9 14.10 14.11 14.12 14.13 14.14 14.15 14.16 14.17 14.18 14.19
14.20 14.21 14.22 14.23 14.24 14.25 14.26 14.27 14.28 14.29 14.30 14.31 14.32 14.33 14.34 15.1 15.2 15.3 15.4 15.5 15.6 15.7 15.8 15.9 15.10 15.11 15.12 15.13 15.14 15.15 15.16 15.17 15.18 15.19 15.20 15.21 15.22 15.23 15.24 15.25 15.26 15.27 15.28 15.29 15.30 15.31 15.32 15.33 15.34 15.35 15.36 16.1 16.2 16.3 16.4 16.5 16.6 16.7 16.8 16.9 16.10 16.11 16.12 16.13 16.14 16.15 16.16 16.17 16.18 16.19 16.20 16.21 16.22
16.23 16.24 16.25 16.26 16.27 16.28 16.29 16.30 16.31 16.32 16.33 16.34 17.1 17.2 17.3 17.4 17.5 17.6 17.7 17.8 17.9 17.10 17.11 17.12 17.13 17.14 17.15 17.16 17.17 17.18 17.19 17.20 17.21 17.22 17.23 17.24 17.25 17.26 17.27 17.28 17.29 17.30 17.31 17.32 17.33 17.34 17.35 17.36 18.1 18.2 18.3 18.4 18.5 18.6 18.7 18.8 18.9 18.10 18.11 18.12 18.13 18.14 18.15 18.16 18.17 18.18 18.19
18.20 18.21 18.22 18.23 18.24 18.25 18.26 18.27 18.28 18.29 18.30 18.31 18.32 18.33 18.34 19.1 19.2 19.3 19.4 19.5 19.6 19.7 19.8 19.9 19.10 19.11 19.12 19.13 19.14 19.15 19.16 19.17 19.18 19.19 19.20 19.21 19.22 19.23 19.24 19.25 19.26 19.27 19.28 19.29 19.30 19.31 19.32 19.33 19.34 19.35 20.1 20.2 20.3 20.4 20.5
20.6 20.7 20.8 20.9 20.10 20.11 20.12 20.13 20.14 20.15 20.16 20.17 20.18 20.19 20.20 20.21 20.22 20.23 20.24 20.25 20.26
20.27 20.28 20.29 20.30 20.31 20.32 20.33 21.1 21.2 21.3 21.4 21.5 21.6 21.7 21.8 21.9 21.10 21.11 21.12 21.13 21.14 21.15 21.16 21.17 21.18 21.19 21.20 21.21 21.22 21.23 21.24 21.25 21.26 21.27 21.28 21.29 21.30 21.31 21.32 21.33 21.34 21.35 22.1 22.2 22.3 22.4 22.5 22.6 22.7 22.8 22.9 22.10 22.11 22.12 22.13 22.14 22.15 22.16 22.17 22.18
22.19 22.20 22.21 22.22 22.23 22.24 22.25 22.26 22.27 22.28 22.29 22.30 22.31 22.32
22.33
22.34 23.1 23.2 23.3 23.4 23.5 23.6 23.7 23.8
23.9 23.10 23.11 23.12 23.13 23.14 23.15 23.16 23.17 23.18 23.19 23.20 23.21 23.22 23.23 23.24 23.25 23.26 23.27 23.28 23.29 23.30 23.31 23.32 23.33 23.34 24.1 24.2 24.3 24.4 24.5 24.6 24.7 24.8 24.9 24.10 24.11 24.12 24.13 24.14 24.15 24.16 24.17 24.18 24.19 24.20 24.21 24.22 24.23 24.24 24.25 24.26 24.27 24.28 24.29 24.30 24.31 24.32 24.33 24.34 24.35 25.1 25.2 25.3 25.4 25.5 25.6 25.7 25.8 25.9 25.10 25.11 25.12 25.13 25.14 25.15 25.16 25.17 25.18 25.19 25.20 25.21 25.22 25.23 25.24 25.25 25.26 25.27 25.28 25.29 25.30 25.31 25.32 25.33 25.34 25.35 25.36 26.1 26.2 26.3 26.4 26.5 26.6 26.7
26.8 26.9 26.10 26.11 26.12 26.13
26.14 26.15 26.16 26.17 26.18 26.19
26.20 26.21 26.22 26.23 26.24 26.25 26.26 26.27 26.28 26.29 26.30 26.31 27.1 27.2 27.3 27.4 27.5 27.6 27.7 27.8 27.9 27.10 27.11 27.12 27.13 27.14 27.15 27.16 27.17 27.18 27.19 27.20 27.21 27.22 27.23 27.24 27.25 27.26 27.27 27.28 27.29 27.30 27.31 27.32 27.33 27.34 27.35 27.36 28.1 28.2 28.3 28.4 28.5 28.6 28.7 28.8 28.9 28.10 28.11 28.12 28.13 28.14 28.15 28.16 28.17 28.18 28.19 28.20 28.21 28.22 28.23 28.24 28.25 28.26 28.27 28.28 28.29 28.30 28.31 28.32 28.33 28.34 28.35
29.1 29.2 29.3 29.4 29.5 29.6
29.7 29.8 29.9 29.10 29.11 29.12
29.13 29.14 29.15 29.16 29.17 29.18 29.19
29.20 29.21 29.22 29.23 29.24 29.25 29.26 29.27 29.28 29.29 29.30 29.31
29.32
30.1 30.2 30.3 30.4 30.5 30.6 30.7 30.8 30.9
30.10 30.11 30.12 30.13 30.14
30.15 30.16 30.17 30.18 30.19 30.20 30.21
30.22 30.23 30.24 30.25 30.26 30.27 30.28 30.29 30.30 30.31 30.32 30.33 31.1 31.2 31.3 31.4 31.5 31.6 31.7 31.8 31.9 31.10 31.11 31.12 31.13 31.14 31.15 31.16 31.17 31.18 31.19
31.20 31.21 31.22 31.23 31.24 31.25
31.26 31.27 31.28 31.29 31.30 31.31 31.32 31.33 31.34 32.1 32.2 32.3 32.4 32.5 32.6 32.7 32.8 32.9 32.10 32.11
32.12 32.13 32.14 32.15 32.16 32.17 32.18 32.19 32.20 32.21 32.22 32.23 32.24
32.25 32.26 32.27 32.28 32.29 32.30 32.31 32.32 32.33 32.34 33.1 33.2 33.3 33.4 33.5
33.6 33.7 33.8 33.9 33.10 33.11 33.12 33.13 33.14 33.15 33.16 33.17 33.18 33.19 33.20 33.21 33.22 33.23 33.24 33.25 33.26 33.27 33.28 33.29 33.30 33.31 33.32 33.33 33.34 33.35 34.1 34.2
34.3 34.4 34.5 34.6
34.7
34.8 34.9 34.10 34.11 34.12 34.13 34.14 34.15 34.16
34.17
34.18 34.19 34.20
34.21 34.22 34.23 34.24 34.25 34.26 34.27 34.28 34.29 34.30 35.1 35.2 35.3 35.4 35.5 35.6 35.7 35.8 35.9 35.10 35.11 35.12 35.13 35.14 35.15 35.16 35.17 35.18 35.19 35.20 35.21 35.22 35.23 35.24 35.25 35.26 35.27 35.28 35.29 35.30 35.31 35.32
35.33 35.34 35.35

A bill for an act
relating to energy; modifying the guaranteed energy-savings program; increasing
the size limit of natural gas utilities not subject to rate regulations; allowing
performance-based, multiyear rate plans; allowing public utility commission
approval for rate recovery for natural gas extension projects; modifying the
renewable energy standard; modifying certificate of need exemptions; enhancing
the energy assurance and emergency conservation plan; establishing a petroleum
end user program; modifying energy auditor standards; making changes to the
energy improvements program for local governments; modifying eligibility for
various siting requirements; allowing an extension of certain lease of wind rights;
providing for a competitive rate for energy-intensive, trade-exposed electric utility
customers; amending Minnesota Statutes 2014, sections 16C.144; 216B.02,
by adding subdivisions; 216B.16, subdivisions 6, 7, 7b, 12, 19; 216B.1691,
subdivisions 2a, 2b; 216B.2401; 216B.241, subdivisions 1, 1b, 1c; 216B.2421,
subdivision 2; 216B.2425; 216C.05, subdivision 2; 216C.16, subdivisions 1, 2;
216C.31; 216C.435, subdivisions 3a, 4, 5, 10, by adding a subdivision; 216C.436,
subdivisions 1, 2; 216E.01, subdivision 5; 216E.021; 216E.03, subdivision 3;
216E.05, subdivision 2; 453A.02, subdivision 5; 500.30, by adding a subdivision;
proposing coding for new law in Minnesota Statutes, chapters 216B; 216C; 216E;
repealing Minnesota Statutes 2014, sections 216C.15; 216C.436, subdivision 6.

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

Section 1.

Minnesota Statutes 2014, section 16C.144, is amended to read:


16C.144 GUARANTEED ENERGY-SAVINGS PROGRAM.

Subdivision 1.

Definitions.

The following definitions apply to this section.

(a) "Utility" means electricity, natural gas, or other energy resource, water, and
wastewater.

(b) "Utility cost savings" means the difference between the utility costs after
installation of the utility cost-savings measures pursuant to the guaranteed energy-savings
agreement and the baseline utility costs after baseline adjustments have been made.

(c) "Baseline" means the preagreement utilities, operations, and maintenance costs.

(d) "Utility cost-savings measure" means a measure that produces utility cost savings
or operation and maintenance cost savings.

(e) "Operation and maintenance cost savings" means a measurable difference
between operation and maintenance costs after the installation of the utility cost-savings
measures pursuant to the guaranteed energy-savings agreement and the baseline operation
and maintenance costs after inflation adjustments have been made. Operation and
maintenance costs savings shall not include savings from in-house staff labor.

(f) "Guaranteed energy-savings agreement" means an agreement for the installation
of one or more utility cost-savings measures that includes the qualified provider's
guarantee as required under subdivision 2.

(g) "Baseline adjustments" means adjusting the utility cost-savings baselines
annually for changes in the following variables:

(1) utility rates;

(2) number of days in the utility billing cycle;

(3) square footage of the facility;

(4) operational schedule of the facility;

(5) facility temperature set points;

(6) weather; and

(7) amount of equipment or lighting utilized in the facility.

(h) "Inflation adjustment" means adjusting the operation and maintenance
cost-savings baseline annually for inflation.

(i) "deleted text beginLease purchase agreementdeleted text endnew text begin Project financingnew text end" means deleted text beginan agreementdeleted text endnew text begin any type of
financing including but not limited to lease, lease purchase, installment agreements, or
bonds for those other than the state who have bonding authority,
new text end obligating the state to
make regular deleted text beginleasedeleted text end payments to satisfy the deleted text beginleasedeleted text end costs of the utility cost-savings measures
until the final paymentdeleted text begin, after which time the utility cost-savings measures become the
sole property of the state of Minnesota
deleted text end.

(j) "Qualified provider" means a person or business experienced in the design,
implementation, and installation of utility cost-savings measures.

(k) "Engineering report" means a report prepared by a professional engineer licensed
by the state of Minnesota summarizing estimates of all costs of installations, modifications,
or remodeling, including costs of design, engineering, installation, maintenance, repairs,
and estimates of the amounts by which utility and operation and maintenance costs will be
reduced.

(l) "Capital cost avoidance" means money expended by a state agency to pay for
utility cost-savings measures with a guaranteed savings agreement so long as the measures
that are being implemented to achieve the utility, operation, and maintenance cost savings
are a significant portion of an overall project as determined by the commissioner.

(m) "Guaranteed energy-savings program guidelines" means policies, procedures,
and requirements of guaranteed savings agreements established by the Department of
Administration.

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 25 years
from the date of final installation;

(4) the commissioner finds that the amount it would spendnew text begin, less amount contributed
for capital cost avoidance,
new text end 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 25 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 deleted text begina lease purchase agreementdeleted text endnew text begin
the project financing
new text end. 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.

Subd. 3.

deleted text beginLease purchase agreementdeleted text endnew text begin Project financingnew text end.

The commissioner
may enter into deleted text begina lease purchase agreementdeleted text endnew text begin project financingnew text end with any party for the
implementation of utility cost-savings measures in accordance with the guaranteed
energy-savings agreement. deleted text beginThe implementation costs of the utility cost-savings measures
recommended in the engineering report shall not exceed the amount to be saved in utility
and operation and maintenance costs over the term of the lease purchase agreement.
deleted text end The
term of the deleted text beginlease purchase agreementdeleted text endnew text begin project financingnew text end shall not exceed 25 years from
the date of final installation. The deleted text beginleasedeleted text endnew text begin project financingnew text end is assignable in accordance with
terms approved by the commissioner of management and budget.

Subd. 4.

Use of capital cost avoidance.

The affected state agency may contribute
funds for capital cost avoidance for guaranteed energy-savings agreements. Use of capital
cost avoidance is subject to the guaranteed energy-savings program guidelines within the
Department of Administration.

Subd. 5.

Independent report.

For each guaranteed energy-savings agreement
entered into, the commissioner of administration shall contract with an independent third
party to evaluate the cost-effectiveness of each utility cost-savings measure implemented
to ensure that such measures were the least-cost measures available. For the purposes of
this section, "independent third party" means an entity not affiliated with the qualified
provider, that is not involved in creating or providing conservation project services to that
provider, and that has expertise (or access to expertise) in energy-savings practices.

Sec. 2.

Minnesota Statutes 2014, section 216B.02, is amended by adding a subdivision
to read:


new text begin Subd. 3a. new text end

new text begin Propane. new text end

new text begin "Propane" means a gas made of primarily propane and butane,
and stored in liquid form in pressurized tanks.
new text end

Sec. 3.

Minnesota Statutes 2014, section 216B.02, is amended by adding a subdivision
to read:


new text begin Subd. 3b. new text end

new text begin Propane storage facility. new text end

new text begin "Propane storage facility" means a facility
designed to store or capable of storing propane in liquid form in pressurized tanks.
new text end

Sec. 4.

Minnesota Statutes 2014, section 216B.02, is amended by adding a subdivision
to read:


new text begin Subd. 6b. new text end

new text begin Synthetic gas. new text end

new text begin "Synthetic gas" means flammable gas created from (1)
gaseous, liquid, or solid hydrocarbons, or (2) other organic or inorganic matter. Synthetic
gas includes hydrogen or methane produced through processing, but does not include
propane.
new text end

Sec. 5.

Minnesota Statutes 2014, section 216B.02, is amended by adding a subdivision
to read:


new text begin Subd. 11. new text end

new text begin Repowering. new text end

new text begin "Repowering" means the modification of large wind energy
conversion system or a solar-powered large energy facility to increase efficiency, replace
a large wind energy conversion system, or, if the Midcontinent Independent System
Operator has provided a signed generator interconnection agreement that reflects the
expected net power increase, an increase to the nameplate capacity of the wind energy
conversion system.
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. 6.

Minnesota Statutes 2014, section 216B.16, subdivision 6, is amended to read:


Subd. 6.

Factors considered, generally.

The commission, in the exercise of its
powers under this chapter to determine just and reasonable rates for public utilities, shall
give due consideration to the public need for adequate, efficient, and reasonable service
and to the need of the public utility for revenue sufficient to enable it to meet the cost of
furnishing the service, including adequate provision for depreciation of its utility property
used and useful in rendering service to the public, and to earn a fair and reasonable return
upon the investment in such property. In determining the rate base upon which the utility
is to be allowed to earn a fair rate of return, the commission shall give due consideration to
evidence of the cost of the property when first devoted to public use, to prudent acquisition
cost to the public utility less appropriate depreciation on each, to construction work in
progress, to offsets in the nature of capital provided by sources other than the investors,
and to other expenses of a capital nature. For purposes of determining rate base, the
commission shall consider the original cost of utility property included in the base and
shall make no allowance for its estimated current replacement value.new text begin In the event the
commission requires a generation asset to shut down operations for policy reasons prior
to end of the book life of the facility, the public utility shall be allowed to recover any
reasonable remaining costs as determined by the commission.
new text end

Sec. 7.

Minnesota Statutes 2014, section 216B.16, subdivision 7, is amended to read:


Subd. 7.

Energy and emission control products cost adjustment.

Notwithstanding
any other provision of this chapter, the commission may permit a public utility to file
rate schedules containing provisions for the automatic adjustment of charges for public
utility service in direct relation to changes in:

(1) federally regulated wholesale rates for energy delivered through interstate
facilities;

(2) direct costs for natural gas delivered;

(3) costs for fuel used in generation of electricity or the manufacture of gas; or

(4) prudent costs incurred by a public utility for sorbents, reagents, or chemicals
used to control emissions from an electric generation facility, provided that these costs are
not recovered elsewhere in rates. The utility must track and report annually the volumes
and costs of sorbents, reagents, or chemicals using separate accounts by generating plant.

new text begin The charges collected under this subdivision may be adjusted to reflect different energy
costs imposed on the system by different categories of customers.
new text end

Sec. 8.

Minnesota Statutes 2014, 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 net of associated revenues of:

(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;

(ii) new 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 Midcontinent Independent
System Operator to benefit the utility or integrated transmission system; and

(iii) charges incurred by a utility under a federally approved tariff that accrue
from other transmission owners' regionally planned transmission projects that have been
determined by the Midcontinent Independent System Operator to benefit the utility or
integrated transmission system.

(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 utility to recover charges incurred under a federally approved tariff that
accrue from other transmission owners' regionally planned transmission projects that have
been determined by the Midcontinent Independent System Operator to benefit the utility
or integrated transmission system. 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) allows the utility to recover on a timely basis the costs net of 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 Midcontinent Independent System
Operator to benefit the utility or integrated transmission system;

(4) new text begincosts associated with distribution planning required under section 216B.2425,
including, but not limited to, all reasonable incremental labor, material, and capital costs;
new text end

new text begin (5) costs associated with grid modernization required under section 216B.2425,
including, but not limited to, all reasonable incremental labor, material, and capital costs;
new text end

new text begin (6) 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 (5)deleted text end new text begin(7) 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 (6)deleted text end new text begin(8) 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 (7)deleted text end new text begin(9) new text endallocates project costs appropriately between wholesale and retail customers;

deleted text begin (8)deleted text end new text begin(10) 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 (9)deleted text end new text begin(11) 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. 9.

Minnesota Statutes 2014, section 216B.16, subdivision 12, is amended to read:


Subd. 12.

Exemption for small gas utility franchise.

(a) A municipality may file
with the commission a resolution of its governing body requesting exemption from the
provisions of this section for a public utility that is under a franchise with the municipality
to supply natural, manufactured, or mixed gas and that serves 650 or fewer customers in
the municipality as long as the public utility serves no more than a total of deleted text begin2,000deleted text endnew text begin 5,000new text end
customers.

(b) The commission shall grant an exemption from this section for that portion of
a public utility's business that is requested by each municipality it serves. Furthermore,
the commission shall also grant the public utility an exemption from this section for any
service provided outside of a municipality's border that is considered by the commission
to be incidental. The public utility shall file with the commission and the department
all initial and subsequent changes in rates, tariffs, and contracts for service outside the
municipality at least 30 days in advance of implementation.

(c) However, the commission shall require the utility to adopt the commission's
policies and procedures governing disconnection during cold weather. The utility shall
annually submit a copy of its municipally approved rates to the commission.

(d) In all cases covered by this subdivision in which an exemption for service outside
of a municipality is granted, the commission may initiate an investigation under section
216B.17, on its own motion or upon complaint from a customer.

(e) If a municipality files with the commission a resolution of its governing body
rescinding the request for exemption, the commission shall regulate the public utility's
business in that municipality under this section.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2014, section 216B.16, subdivision 19, is amended to read:


Subd. 19.

Multiyear rate plan.

(a) A public utility may propose, and the
commission may approve, approve as modified, or reject, a multiyear rate plan as provided
in this subdivision. The term "multiyear rate plan" refers to a plan establishing the rates
the utility may charge for each year of the specified period of years, which cannot exceed
deleted text beginthreedeleted text end new text beginfive new text endyears, to be covered by the plan. new text beginIf the utility proposes a multiyear rate plan, the
utility shall provide a general description of the utility's major planned investments over
the plan period. The commission may also require the utility to provide a set of reasonable
performance metrics and incentives that are quantifiable, verifiable, and consistent with
state policies. The commission may allow the utility to adjust recovery of its cost of capital
or other costs in a reasonable manner within the plan period. The utility may propose:
new text end

new text begin (1) recovery of the utility's forecast rate base, including its planned capital
investments and investment-related costs, including income tax impacts, depreciation,
and property taxes, as well as forecasted capacity-related costs from purchased power
agreements that are not recovered through section 216B.16, subdivision 7, based on a
formula, a budget forecast, a fixed escalation rate, individually or in combination;
new text end

new text begin (2) recovery of operations and maintenance expenses, based on an electricity-related
price index or other formula;
new text end

new text begin (3) tariffed rates and service options to expand the products and services available to
customers to improve energy efficiency, affordability and reliability, renewable energy,
grid modernization and stability, or promote economic development. These tariffs and
service options may include time-of-day or location-based rates, an affordability rate for
low-income residential customers, or a rate for large, energy-intensive customers that
demonstrate electric rates impede their ability to compete in the global market; and
new text end

new text begin (4) adjustments to the rates approved under the plan for rate changes that the
commission determines to be just and reasonable, including, but not limited to, changes
in the utility's cost of operating its nuclear facilities or other significant investments not
contemplated in the plan.
new text end

new text begin (b) A utility may file a multiyear rate plan based on a prior final rate order from
the commission, provided the rate order was issued within 12 months of submitting a
multiyear rate plan, provided that the plan contains a mechanism for returning excess
earnings above the allowed return on equity to its customers.
new text end

new text begin (c) A utility may request to implement interim rates for the first and second years
of the multiyear plan. Interim rates may be implemented in the same manner as interim
rates under section 216B.16, subdivision 3.
new text end

new text begin (d) new text endThe commission may approve a multiyear rate plan only if it finds that the plan
establishes just and reasonable rates for the utility, applying the factors described in
subdivision 6. Consistent with subdivision 4, the burden of proof to demonstrate that the
multiyear rate plan is just and reasonable is on the public utility proposing the plan.

deleted text begin (b)deleted text end new text begin(e) new text endRates charged under the multiyear rate plan must be based only upon the
utility's reasonable and prudent costs of service over the term of the plan, as determined
by the commission, provided that the costs are not being recovered elsewhere in rates.
Rate adjustments authorized under subdivisions 6b and 7 may continue outside of a plan
authorized under this subdivision.

deleted text begin (c)deleted text end new text begin(f) new text endThe commission may, by order, establish terms, conditions, and procedures
for a multiyear rate plan necessary to implement this section and ensure that rates remain
just and reasonable during the course of the plan, including terms and procedures for rate
adjustment. At any time prior to conclusion of a multiyear rate plan, the commission,
upon its own motion or upon petition of any party, has the discretion to examine the
reasonableness of the utility's rates under the plan, and adjust rates as necessary.

deleted text begin (d)deleted text end new text begin(g) new text endIn reviewing a multiyear rate plan proposed in a general rate case under
this section, the commission may extend the time requirements for issuance of a final
determination prescribed in this section by an additional 90 days beyond its existing
authority under subdivision 2, paragraph (f).

deleted text begin (e)deleted text end new text begin(h) new text endA utility may not file a multiyear rate plan that would establish rates under the
terms of the plan until after May 31, 2012.

Sec. 11.

new text begin [216B.1638] RECOVERY OF NATURAL GAS EXTENSION PROJECT
COSTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the terms defined in
this subdivision have the meanings given them.
new text end

new text begin (b) "Contribution in aid of construction" means a monetary contribution, paid by
a developer or local unit of government to a utility providing natural gas service to a
community receiving that service as the result of a natural gas extension project, that
reduces or offsets the difference between the total revenue requirement of the project and
the revenue generated from the customers served by the project.
new text end

new text begin (c) "Developer" means a developer of the project or a person that owns or will own
the property served by the project.
new text end

new text begin (d) "Local unit of government" means a city, county, township, commission, district,
authority, or other political subdivision or instrumentality of this state.
new text end

new text begin (e) "Natural gas extension project" or "project" means the construction of new
infrastructure or upgrades to existing natural gas facilities necessary to serve currently
unserved or inadequately served areas.
new text end

new text begin (f) "Revenue deficiency" means the deficiency in funds that results when projected
revenues from customers receiving natural gas service as the result of a natural gas
extension project, plus any contributions in aid of construction paid by these customers,
fall short of the total revenue requirement of the natural gas extension project.
new text end

new text begin (g) "Total revenue requirement" means the total cost of extending and maintaining
service to a currently unserved or inadequately served area.
new text end

new text begin (h) "Unserved or inadequately served area" means an area in this state lacking
adequate natural gas pipeline infrastructure to meet the demand of existing or potential
end-use customers.
new text end

new text begin Subd. 2. new text end

new text begin Filing. new text end

new text begin (a) A public utility may petition the commission outside of a
general rate case for a rider that shall include all of the utility's customers, including
transport customers, to recover the revenue deficiency from a natural gas extension project.
new text end

new text begin (b) The petition shall include:
new text end

new text begin (1) a description of the natural gas extension project, including the number and
location of new customers to be served and the distance over which natural gas will be
distributed to serve the unserved or inadequately served area;
new text end

new text begin (2) the project's construction schedule;
new text end

new text begin (3) the proposed project budget;
new text end

new text begin (4) the amount of any contributions in aid of construction;
new text end

new text begin (5) a description of efforts made by the public utility to offset the revenue deficiency
through contributions in aid to construction;
new text end

new text begin (6) the proposed method and amount of recovery by customer class and whether
the utility is proposing that the rider be a flat fee, a volumetric charge, or another form of
recovery;
new text end

new text begin (7) how recovery of the revenue deficiency will be allocated between industrial,
commercial, residential, and transport customers;
new text end

new text begin (8) the proposed termination date of the rider to recover the revenue deficiency; and
new text end

new text begin (9) a description of benefits to the public utility's existing natural gas customers that
will accrue from the natural gas extension project.
new text end

new text begin Subd. 3. new text end

new text begin Review; approval. new text end

new text begin (a) The commission shall allow opportunity for
comment on the petition.
new text end

new text begin (b) The commission may approve a public utility's petition for a rider to recover the
costs of a natural gas extension project if it determines that:
new text end

new text begin (1) the project is designed to extend natural gas service to an unserved or
inadequately served area; and
new text end

new text begin (2) project costs are reasonable and prudently incurred.
new text end

new text begin (c) The commission must not approve a rider under this section that allows a utility
to recover more than 33 percent of the costs of a natural gas extension project.
new text end

new text begin (d) The revenue deficiency from a natural gas extension project recoverable through
a rider under this section must include the currently authorized rate of return, incremental
income taxes, incremental property taxes, incremental depreciation expenses, and any
incremental operation and maintenance costs.
new text end

new text begin Subd. 4. new text end

new text begin Commission authority; order. new text end

new text begin The commission may issue orders
necessary to implement and administer this section.
new text end

new text begin Subd. 5. new text end

new text begin Implementation. new text end

new text begin Nothing in this section commits a public utility to
implement a project approved by the commission. The public utility seeking to provide
natural gas service shall notify the commission whether it intends to proceed with the
project as approved by the commission.
new text end

new text begin Subd. 6. new text end

new text begin Evaluation and report. new text end

new text begin By January 15, 2017, and every three years
thereafter, the commission shall report to the chairs and ranking minority members of the
senate and house of representatives committees having jurisdiction over energy:
new text end

new text begin (1) the number of public utilities and projects proposed and approved under this
section;
new text end

new text begin (2) the total cost of each project;
new text end

new text begin (3) rate impacts of the cost recovery mechanism; and
new text end

new text begin (4) an assessment of the effectiveness of the cost recovery mechanism in realizing
increased natural gas service to unserved or inadequately served areas from natural gas
extension projects.
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. 12.

Minnesota Statutes 2014, 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
deleted text begin 20deleted text endnew text begin 25new text end percent
(4)
2025
deleted text begin 25deleted text endnew text begin 32new text end percentdeleted text begin.
deleted text end
new text begin (5)
new text end
new text begin 2030
new text end
new text begin 40 percent.
new text end

(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 percentdeleted text begin.
deleted text end
new text begin (5)
new text end
new text begin 2025
new text end
new text begin 35 percent
new text end
new text begin (6)
new text end
new text begin 2030
new text end
new text begin 40 percent.
new text end

deleted text begin 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.
deleted text end

Sec. 13.

Minnesota Statutes 2014, section 216B.1691, subdivision 2b, is amended to
read:


Subd. 2b.

new text beginOff ramps; new text endmodification or delay of standard.

(a) The commission
shall modify or delay the implementation of a standard obligation, in whole or in part, if
the commission determines it is in the public interest to do so. The commission, when
requested to modify or delay implementation of a standard, must consider:

(1) the impact of implementing the standard on its customers' utility costs, including
the economic and competitive pressure on the utility's customers;

(2) the effects of implementing the standard on the reliability of the electric system;

(3) technical advances or technical concerns;

(4) delays in acquiring sites or routes due to rejection or delays of necessary siting or
other permitting approvals;

(5) delays, cancellations, or nondelivery of necessary equipment for construction or
commercial operation of an eligible energy technology facility;

(6) transmission constraints preventing delivery of service; and

(7) other statutory obligations imposed on the commission or a utility.

The commission may modify or delay implementation of a standard obligation
under clauses (1) to (3) only if it finds implementation would cause significant rate impact,
requires significant measures to address reliability, or raises significant technical issues.
The commission may modify or delay implementation of a standard obligation under
clauses (4) to (6) only if it finds that the circumstances described in those clauses were due
to circumstances beyond an electric utility's control and make compliance not feasible.

(b) When considering whether to delay or modify implementation of a standard
obligation, the commission must give due consideration to a preference for electric
generation through use of eligible energy technology and to the achievement of the
standards set by this section.

(c) An electric utility requesting a modification or delay in the implementation of a
standard must file a plan to comply with its new text beginmodified or delayed new text endstandard obligation in the
same proceeding that it is requesting the delay.

Sec. 14.

Minnesota Statutes 2014, section 216B.2401, is amended to read:


216B.2401 ENERGY SAVINGS POLICY GOAL.

The legislature finds that energy savings are an energy resource, and that
cost-effective energy savings are preferred over all other energy resources. The legislature
further finds that cost-effective energy savings should be procured systematically and
aggressively in order to reduce utility costs for businesses and residents, improve the
competitiveness and profitability of businesses, create more energy-related jobs, reduce
the economic burden of fuel imports, and reduce pollution and emissions that cause
climate change. Therefore, it is the energy policy of the state of Minnesota to achieve
annual energy savings equal to at least deleted text begin1.5deleted text endnew text begin twonew text end percent of annual retail energy sales of
electricity and natural gas through cost-effective energy conservation improvement
programs and rate design, energy efficiency achieved by energy consumers without
direct utility involvement, energy codes and appliance standards, programs designed
to transform the market or change consumer behavior, energy savings resulting from
efficiency improvements to the utility infrastructure and system, and other efforts to
promote energy efficiency and energy conservation.

Sec. 15.

Minnesota Statutes 2014, section 216B.241, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

For purposes of this section and section 216B.16,
subdivision 6b
, the terms defined in this subdivision have the meanings given them.

(a) "Commission" means the Public Utilities Commission.

(b) "Commissioner" means the commissioner of commerce.

(c) "Department" means the Department of Commerce.

(d) "Energy conservation" means demand-side new text beginand supply-side new text endmanagement of
energy deleted text beginsuppliesdeleted text endnew text begin resourcesnew text end resulting in a net reduction in energy use. Load management
that reduces overall energy use is energy conservation.

(e) "Energy conservation improvement" means a project that results in energy
efficiency or energy conservation. Energy conservation improvement may include waste
heat that is recovered and converted into electricity, deleted text beginbut does notdeleted text endnew text begin and maynew text end include electric
utility infrastructure projects approved by the commission under section 216B.1636.
Energy conservation improvement also includes waste heat recovered and used as thermal
energy.

(f) "Energy efficiency" means measures or programs, including energy conservation
measures or programs, that target consumer behavior, new text beginfacility performance, new text endequipment,
processes, new text beginoperations and maintenance, new text endor devices designed to produce either an absolute
decrease in consumption of electric energy or natural gas or a decrease in consumption
of electric energy or natural gas on a per unit of production basis without a reduction in
the quality or level of service provided to the energy consumernew text begin, or energy use intensity
defined as a net reduction in energy consumed per square foot of a facility
new text end.

(g) "Gross annual retail energy sales" means annual electric sales to all retail
customers in a utility's or association's Minnesota service territory or natural gas
throughput to all retail customers, including natural gas transportation customers, on a
utility's distribution system in Minnesota. For purposes of this section, gross annual
retail energy sales exclude:

(1) gas sales to:

(i) a large energy facility;

(ii) a large customer facility whose natural gas utility has been exempted by the
commissioner under subdivision 1a, paragraph (b), with respect to natural gas sales made
to the large customer facility; and

(iii) a commercial gas customer facility whose natural gas utility has been exempted
by the commissioner under subdivision 1a, paragraph (c), with respect to natural gas sales
made to the commercial gas customer facility; and

(2) electric sales to a large customer facility whose electric utility has been exempted
by the commissioner under subdivision 1a, paragraph (b), with respect to electric sales
made to the large customer facility.

(h) "Investments and expenses of a public utility" includes the investments
and expenses incurred by a public utility in connection with an energy conservation
improvement, including but not limited to:

(1) the differential in interest cost between the market rate and the rate charged on a
no-interest or below-market interest loan made by a public utility to a customer for the
purchase or installation of an energy conservation improvement;

(2) the difference between the utility's cost of purchase or installation of energy
conservation improvements and any price charged by a public utility to a customer for
such improvements.

(i) "Large customer facility" means all buildings, structures, equipment, and
installations at a single site that collectively (1) impose a peak electrical demand on an
electric utility's system of not less than 20,000 kilowatts, measured in the same way as the
utility that serves the customer facility measures electrical demand for billing purposes or
(2) consume not less than 500 million cubic feet of natural gas annually. In calculating
peak electrical demand, a large customer facility may include demand offset by on-site
cogeneration facilities and, if engaged in mineral extraction, may aggregate peak energy
demand from the large customer facility's mining and processing operations.

(j) "Large energy facility" has the meaning given it in section 216B.2421,
subdivision 2, clause (1).

(k) "Load management" means an activity, service, or technology to change the
timing or the efficiency of a customer's use of energy that allows a utility or a customer to
respond to wholesale market fluctuations or to reduce peak demand for energy or capacity.

(l) "Low-income programs" means energy conservation improvement programs that
directly serve the needs of low-income persons, including low-income renters.

(m) "Qualifying utility" means a utility that supplies the energy to a customer that
enables the customer to qualify as a large customer facility.

(n) "Waste heat recovered and used as thermal energy" means capturing heat energy
that would otherwise be exhausted or dissipated to the environment from machinery,
buildings, or industrial processes and productively using such recovered thermal energy
where it was captured or distributing it as thermal energy to other locations where it is
used to reduce demand-side consumption of natural gas, electric energy, or both.

(o) "Waste heat recovery converted into electricity" means an energy recovery
process that converts otherwise lost energy from the heat of exhaust stacks or pipes used
for engines or manufacturing or industrial processes, or the reduction of high pressure
in water or gas pipelines.

Sec. 16.

Minnesota Statutes 2014, section 216B.241, subdivision 1b, is amended to read:


Subd. 1b.

Conservation improvement by cooperative association or
municipality.

(a) This subdivision applies to:

(1) a cooperative electric association that provides retail service to its members;

(2) a municipality that provides electric service to retail customers; and

(3) a municipality with more than 1,000,000,000 cubic feet in annual throughput
sales to natural gas to retail customers.

(b) Each cooperative electric association and municipality subject to this subdivision
shall spend and invest for energy conservation improvements under this subdivision
the following amounts:

(1) for a municipality, 0.5 percent of its gross operating revenues from the sale of
gas and 1.5 percent of its gross operating revenues from the sale of electricity, excluding
gross operating revenues from electric and gas service provided in the state to large
electric customer facilities; and

(2) for a cooperative electric association, 1.5 percent of its gross operating revenues
from service provided in the state, excluding gross operating revenues from service
provided in the state to large electric customer facilities indirectly through a distribution
cooperative electric association.

(c) Each municipality and cooperative electric association subject to this subdivision
shall identify and implement energy conservation improvement spending and investments
that are appropriate for the municipality or association, except that a municipality
or association may not spend or invest for energy conservation improvements that
directly benefit a large energy facility or a large electric customer facility for which the
commissioner has issued an exemption under subdivision 1a, paragraph (b).

(d) Each municipality and cooperative electric association subject to this subdivision
may spend and invest annually up to ten percent of the total amount required to be spent
and invested on energy conservation improvements under this subdivision on research
and development projects that meet the definition of energy conservation improvement
in subdivision 1 and that are funded directly by the municipality or cooperative electric
association.

(e) Load-management activities may be used to meet 50 percent of the conservation
investment and spending requirements of this subdivision.

(f) A generation and transmission cooperative electric association that provides
energy services to cooperative electric associations that provide electric service at retail to
consumers may invest in energy conservation improvements on behalf of the associations
it serves and may fulfill the conservation, spending, reporting, and energy-savings goals on
an aggregate basis. A municipal power agency or other not-for-profit entity that provides
energy service to municipal utilities that provide electric service at retail may invest in
energy conservation improvements on behalf of the municipal utilities it serves and may
fulfill the conservation, spending, reporting, and energy-savings goals on an aggregate
basis, under an agreement between the municipal power agency or not-for-profit entity
and each municipal utility for funding the investments.

(g) Each municipality or cooperative shall file energy conservation improvement
plans by June 1 on a schedule determined by order of the commissioner, but at least every
three years. Plans received by June 1 must be approved or approved as modified by the
commissioner by December 1 of the same year. The municipality or cooperative shall
provide an evaluation to the commissioner detailing its energy conservation improvement
spending and investments for the previous period. The evaluation must briefly describe
each conservation program and must specify the energy savings or increased efficiency in
the use of energy within the service territory of the utility or association that is the result of
the spending and investments. The evaluation must analyze the cost-effectiveness of the
utility's or association's conservation programs, using a list of baseline energy and capacity
savings assumptions developed in consultation with the department. The commissioner
shall review each evaluation and make recommendations, where appropriate, to the
municipality or association to increase the effectiveness of conservation improvement
activities.

(h) MS 2010 [Expired, 1Sp2003 c 11 art 3 s 4; 2007 c 136 art 2 s 5]

(i) The commissioner shall consider and may require a utility, association, or
other entity providing energy efficiency and conservation services under this section to
undertake a program suggested by an outside source, including a political subdivision,
nonprofit corporation, or community organization.

new text begin (j) A municipality or cooperative electric association may appeal a decision of the
commissioner under this subdivision, to the commission under subdivision 2. In reviewing
a decision of the commissioner under this subdivision, the commission shall rescind the
decision if it finds that the required investments or spending will:
new text end

new text begin (1) not result in cost-effective energy conservation improvements; or
new text end

new text begin (2) otherwise not be in the public interest.
new text end

Sec. 17.

Minnesota Statutes 2014, section 216B.241, subdivision 1c, is amended to read:


Subd. 1c.

Energy-saving goals.

(a) The commissioner shall establish energy-saving
goals for energy conservation improvement expenditures and shall evaluate an energy
conservation improvement program on how well it meets the goals set.

(b) Each individual new text beginelectric new text endutility and association shall have an annual
energy-savings goal equivalent to deleted text begin1.5deleted text endnew text begin twonew text end percent new text beginand each individual natural gas utility
shall have annual energy-saving goal equivalent to 1.5 percent
new text endof gross annual retail energy
sales unless modified by the commissioner under paragraph (d). The savings goals must be
calculated based on the most recent three-year weather-normalized average. deleted text beginAdeleted text endnew text begin An electricnew text end
utility or association may elect to carry forward energy savings in excess of deleted text begin1.5deleted text endnew text begin twonew text end percent
new text beginand a natural gas utility may elect to carry forward energy savings in excess of 1.5 percent
new text endfor a year to the succeeding deleted text beginthreedeleted text endnew text begin fivenew text end calendar yearsdeleted text begin, except that savings from electric
utility infrastructure projects allowed under paragraph (d) may be carried forward for five
years. A particular energy savings can be used only for one year's goal
deleted text endnew text begin upon achievement
of a minimum 1.5 percent energy savings from demand-side energy conservation
improvements for electric utilities and achievement of a minimum one percent energy
savings from demand-side energy conservation improvements for natural gas utilities
new text end.

(c) The commissioner must adopt a filing schedule that is designed to have all
utilities and associations operating under an energy-savings plan new text beginwith the goals indicated
in this subdivision
new text endby calendar year deleted text begin2010deleted text endnew text begin 2017new text end.

(d) In its energy conservation improvement plan filing, a utility or association may
request the commissioner to adjust its annual energy-savings percentage goal based on
its historical conservation investment experience, customer class makeup, load growth, a
conservation potential study, or other factors the commissioner determines warrants an
adjustment. The commissioner may not approve a plan of a public utility deleted text beginthat provides fordeleted text endnew text begin
providing electric service
new text end an annual energy-savings goal of less than deleted text beginonedeleted text endnew text begin 1.5new text end percent of
gross annual retail energy sales from new text begindemand-side new text endenergy conservation deleted text beginimprovementsdeleted text endnew text begin, and
less than a one percent goal of gross annual retail energy sales from demand-side energy
conservation improvements from a public utility providing natural gas service
new text end.

deleted text begin Adeleted text endnew text begin An electricnew text end utility or association may include in its energy conservation plan
energy savings from electric utility infrastructure projects approved by the commission
under section 216B.1636 or waste heat recovery converted into electricity projects that
may count as energy savings in addition to a minimum energy-savings goal of at least
deleted text beginonedeleted text endnew text begin 1.5new text end percent for new text begindemand-side new text endenergy conservation improvements. Electric utility
infrastructure projects must result in increased energy efficiency greater than that which
would have occurred through normal maintenance activity.

(e) An energy-savings goal is not satisfied by attaining the revenue expenditure
requirements of subdivisions 1a and 1b, but can only be satisfied by meeting the
energy-savings goal established in this subdivision.

(f) An association or utility is not required to make energy conservation investments
to attain the energy-savings goals of this subdivision that are not cost-effective even
if the investment is necessary to attain the energy-savings goals. For the purpose of
this paragraph, in determining cost-effectiveness, the commissioner shall consider the
costs and benefits to ratepayers, the utility, participants, and society. In addition, the
commissioner shall consider the rate at which an association or municipal utility is
increasing its energy savings and its expenditures on energy conservation.

(g) On an annual basis, the commissioner shall produce and make publicly available
a report on the annual energy savings and estimated carbon dioxide reductions achieved
by the energy conservation improvement programs for the two most recent years for
which data is available. The commissioner shall report on program performance both in
the aggregate and for each entity filing an energy conservation improvement plan for
approval or review by the commissioner.

(h) By January 15, 2010, the commissioner shall report to the legislature whether
the spending requirements under subdivisions 1a and 1b are necessary to achieve the
energy-savings goals established in this subdivision.

Sec. 18.

Minnesota Statutes 2014, section 216B.2421, subdivision 2, is amended to read:


Subd. 2.

Large energy facility.

"Large energy facility" means:

(1) any electric power generating plant or combination of plants at a single site with
a combined capacity of 50,000 kilowatts or more and transmission lines directly associated
with the plant that are necessary to interconnect the plant to the transmission system;

(2) any high-voltage transmission line with a capacity of 200 kilovolts or more and
greater than 1,500 feet in length;

(3) any high-voltage transmission line with a capacity of 100 kilovolts or more with
more than ten miles of its length in Minnesota or that crosses a state line;

(4) any pipeline greater than six inches in diameter and having more than 50 miles of
its length in Minnesota used for the transportation of coal, crude petroleum or petroleum
fuels or oil, or their derivatives;

(5) any pipeline for transporting natural or synthetic gas at pressures in excess of
200 pounds per square inch with more than 50 miles of its length in Minnesota;

(6) any facility designed for or capable of storing on a single site more than 100,000
gallons of liquefied natural gas or synthetic gasnew text begin, excluding propane storage facilitiesnew text end;

(7) any underground gas storage facility requiring a permit pursuant to section
103I.681;

(8) any nuclear fuel processing or nuclear waste storage or disposal facility; and

(9) any facility intended to convert any material into any other combustible fuel and
having the capacity to process in excess of 75 tons of the material per hour.

Sec. 19.

Minnesota Statutes 2014, section 216B.2425, is amended to read:


216B.2425 STATE TRANSMISSION new text beginAND DISTRIBUTION new text endPLAN.

Subdivision 1.

List.

The commission shall maintain a list of certified high-voltage
transmission line projects.

Subd. 2.

List development; transmission projects report.

(a) By November
1 of each odd-numbered year, a transmission projects report must be submitted to the
commission by each utility, organization, or company that:

(1) is a public utility, a municipal utility, a cooperative electric association, the
generation and transmission organization that serves each utility or association, or a
transmission company; and

(2) owns or operates electric transmission lines in Minnesota, except a company or
organization that owns a transmission line that serves a single customer or interconnects a
single generating facility.

(b) The report may be submitted jointly or individually to the commission.

(c) The report must:

(1) list specific present and reasonably foreseeable future inadequacies in the
transmission system in Minnesota;

(2) identify alternative means of addressing each inadequacy listed;

(3) identify general economic, environmental, and social issues associated with
each alternative; deleted text beginand
deleted text end

(4) new text beginidentify incremental investments needed to modernize the existing transmission
and distribution grid, including, but not limited to, two-way meters and communication
technologies, control technologies, energy storage and microgrids, outage management,
investments to enable demand response, and incremental investments to enhance
reliability and security against cyber and physical threats; and
new text end

new text begin (5) new text endprovide a summary of public input related to the list of inadequacies and the role
of local government officials and other interested persons in assisting to develop the list
and analyze alternatives.

(d) To meet the requirements of this subdivision, reporting parties may rely on
available information and analysis developed by a regional transmission organization
or any subgroup of a regional transmission organization and may develop and include
additional information as necessary.

Subd. 3.

Commission approval.

By June 1 of each even-numbered year, the
commission shall adopt a state transmission project list and shall new text beginrequire, new text endcertify, certify
as modified, or deny certification of the projects proposed under subdivision 2. The
commission may only certify a project that is a high-voltage transmission line as defined
in section 216B.2421, subdivision 2, that the commission finds is:

(1) necessary to maintain or enhance the reliability of electric service to Minnesota
consumers;

(2) needed, applying the criteria in section 216B.243, subdivision 3; and

(3) in the public interest, taking into account electric energy system needs and
economic, environmental, and social interests affected by the project.

Subd. 4.

List; effect.

Certification of a project as a priority electric transmission
project satisfies section 216B.243. A certified project on which construction has not begun
more than six years after being placed on the list, must be reapproved by the commission.

Subd. 5.

Transmission inventory.

The Department of Commerce shall create,
maintain, and update annually an inventory of transmission lines in the state.

Subd. 6.

Exclusion.

This section does not apply to any transmission line proposal
that has been approved by, or was pending before, a local unit of government, the
Environmental Quality Board, or the Public Utilities Commission on August 1, 2001.

Subd. 7.

Transmission needed to support renewable resources.

(a) Each entity
subject to this section shall determine necessary transmission upgrades to support
development of renewable energy resources required to meet objectives under section
216B.1691 and shall include those upgrades in its report under subdivision 2.

(b) MS 2008 [Expired]

new text begin Subd. 8. new text end

new text begin Distribution study to support distributed generation resources. new text end

new text begin Each
entity subject to this section shall conduct a distribution study to identify interconnection
points on its distribution system for small-scale distributed generation resource and shall
identify necessary distribution upgrades to support continued development of distributed
generation resources.
new text end

Sec. 20.

new text begin [216B.247] LARGE SOLAR ENERGY SYSTEM OR LWECS
REPOWERING.
new text end

new text begin (a) A large wind energy conversion system, as defined in section 216F.01,
subdivision 2, or a solar-powered large energy facility, as defined in section 216B.2421,
subdivision 2, engaging in a repowering project that will not result in the facility exceeding
the nameplate capacity under its most recent interconnection agreement is exempt from
the certificate of need requirements under section 216B.241.
new text end

new text begin (b) A large wind energy conversion system, as defined in section 216F.01,
subdivision 2, or a solar-powered large energy facility, as defined in section 216B.2421,
subdivision 2, engaging in a repowering project that will result in the facility exceeding
the nameplate capacity under its most recent interconnection agreement is exempt from
the certificate of need requirements under section 216B.241, if the project has obtained a
signed generator interconnection agreement from the Midcontinent Independent System
Operator that reflects the net power increase.
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 2014, section 216C.05, subdivision 2, is amended to read:


Subd. 2.

Energy policy goals.

It is the energy policy of the state of Minnesota that:

(1) annual energy savings equal to at least deleted text begin1.5deleted text endnew text begin twonew text end percent of annual retail energy
sales of electricity and natural gas be achieved through cost-effective energy efficiency;

(2) the per capita use of fossil fuel as an energy input be reduced by 15 percent by
the year 2015, through increased reliance on energy efficiency and renewable energy
alternatives; and

(3) 25 percent of the total energy used in the state be derived from renewable energy
resources by the year 2025.

Sec. 22.

new text begin [216C.155] ENERGY ASSURANCE AND EMERGENCY
CONSERVATION PLAN.
new text end

new text begin Subdivision 1. new text end

new text begin Plan requirements. new text end

new text begin (a) The commissioner shall maintain an energy
assurance and emergency conservation plan. The plan shall:
new text end

new text begin (1) profile the state's energy sectors, including an assessment of the risk within each
energy sector and the character of the vulnerabilities;
new text end

new text begin (2) establish priorities for Minnesota's long-term preparedness activities to ensure
the availability of energy resources critical for the safety, health, and welfare of the state's
citizens;
new text end

new text begin (3) include Minnesota's three main energy sectors of electricity, natural gas, and
liquid fuels, including renewable and biological sources of energy available in each sector;
new text end

new text begin (4) identify relevant legal authorities governing the commissioner's actions during
an energy emergency and any necessary allocation of limited energy resources under the
emergency conservation section of the plan; and
new text end

new text begin (5) establish response protocols for the commissioner's actions in the event of an
energy supply emergency.
new text end

new text begin (b) At least once every five years, the commissioner shall review and update the
plan. Revisions of the plan directly relating to the emergency conservation requirements
of the plan must be adopted under the rulemaking procedures of chapter 14.
new text end

new text begin Subd. 2. new text end

new text begin Long-term preparedness. new text end

new text begin (a) The commissioner shall establish priorities
for Minnesota's long-term preparedness activities, with the primary goal of reducing the
consequences of any energy disruption by increasing Minnesota's resilience to short-
and long-term disruptions of energy delivery to government, commercial, industrial,
nonprofit, and citizen energy consumers.
new text end

new text begin (b) Long-term preparedness goals must also include:
new text end

new text begin (1) increasing the utilization of Minnesota-derived energy sources;
new text end

new text begin (2) reducing overall demand for energy through both cost-effective energy efficiency
and conservation activities;
new text end

new text begin (3) developing new energy production technologies, new consumer-level energy
monitoring mechanisms, and new energy provider business models; and
new text end

new text begin (4) minimizing consumer and ratepayer costs, and maximizing the economic benefits
for the state as a result of these preparedness activities.
new text end

new text begin Subd. 3. new text end

new text begin Emergency energy conservation protocols. new text end

new text begin (a) The commissioner shall
establish protocols for responding to an energy supply emergency. These protocols must
be consistent with the responsibilities identified in chapter 12, the Minnesota Emergency
Operations Plan, the State All-Hazard Mitigation Plan, and relevant guidelines issued by
the National Association of State Energy Officials.
new text end

new text begin (b) The protocols must:
new text end

new text begin (1) include a plan for coordinating information and any required response actions
with private-sector energy providers;
new text end

new text begin (2) include a plan for providing uniform, timely, and accurate information to the
public and to state agencies with responsibilities for emergency management and disaster
response; and
new text end

new text begin (3) ensure that emergency energy conservation actions by private-sector energy
providers minimize disruption for critical facilities as identified by state and local
emergency management officials.
new text end

new text begin (c) Whenever possible, the emergency energy conservation protocols should place a
priority on broader energy conservation activities that reduce the severity and duration of
an energy supply disruption, for the purpose of limiting the number of critical facilities
experiencing a complete disruption of energy at individual facilities.
new text end

new text begin Subd. 4. new text end

new text begin Emergency energy allocation protocols. new text end

new text begin (a) The commissioner shall
establish guidelines and criteria for allocation of energy supplies to critical facilities
and priority users, in the case of a widespread or severe disruption to the state's energy
sector. The guidelines and criteria shall contain alternative conservation actions and
allocation plans to reasonably meet various foreseeable shortage circumstances and allow
a choice of appropriate responses, based on reasonable energy savings or transfers from
scarce energy resources.
new text end

new text begin (b) Consistent with requirements of federal emergency energy conservation and
allocation laws and regulations, the guidelines and criteria must:
new text end

new text begin (1) require that all individuals, state agencies, local subdivisions of government,
businesses, and public transit agencies requesting emergency allocation of energy
resources demonstrate they have adopted an emergency energy conservation plan and
have engaged in energy-saving measures;
new text end

new text begin (2) ensure maintenance of reasonable job safety conditions and minimize
environmental sacrifices;
new text end

new text begin (3) ensure the availability of energy resources to emergency authorities, including
state and local law enforcement, emergency medical services, and other first responders;
new text end

new text begin (4) prioritize allocating fuel, electricity, and other available energy resources to those
critical facilities identified by state and local emergency management officials;
new text end

new text begin (5) as necessary, control the use, sale, or distribution of commodities, materials,
goods, or services that will prevent the restoration of adequate energy supply conditions
to affected individuals, state agencies, local subdivisions of government, businesses,
and public transit agencies;
new text end

new text begin (6) as necessary, determine at what level of an energy supply emergency the
Pollution Control Agency shall be requested to ask the governor to petition the president
for a temporary emergency suspension of air quality standards as required by the Clean
Air Act, United States Code, title 42, section 7410f; and
new text end

new text begin (7) ensure all affected entities maintain their rights to due process, including a fair
and equitable review of complaints and requests for special exemptions.
new text end

new text begin Subd. 5. new text end

new text begin Declaration of energy supply emergency. new text end

new text begin (a) The governor or the
Executive Council may declare an energy supply emergency when an acute shortage of
energy exists by issuing a declaration indicating the nature of the emergency, the area or
areas threatened if less than the whole state is threatened, and the conditions causing
the emergency.
new text end

new text begin (b) An energy supply emergency exists only when the state and private sector energy
partners have exhausted all economical and reasonable means of meeting the energy
needs of the state and its citizens, including operating energy facilities at their emergency
capacity, importing additional external energy resources, and implementing all available
voluntary energy conservation measures.
new text end

new text begin (c) An energy supply emergency declaration shall be disseminated promptly by
means calculated to bring its contents to the attention of the general public and shall
be promptly filed with the commissioner, the commissioner of public safety, and the
secretary of state. Upon a declaration of an energy supply emergency, the governor and
the commissioner, in consultation with the commissioner of public safety, shall implement
and enforce the emergency and energy allocation protocols or any part thereof.
new text end

new text begin (d) The Executive Council may terminate an energy supply emergency at any time
by issuing a termination declaration and indicating the condition or conditions supporting
termination. No energy supply emergency may continue for longer than 30 days unless
renewed by the Executive Council. Each renewed energy supply emergency may not
continue for longer than 30 days unless otherwise provided by law. Each person shall
carry out the responsibilities specified in the emergency conservation allocation plan, and
violation of any provision of such emergency conservation or allocation requirements shall
be deemed a violation of sections 216C.05 to 216C.30 and the rules adopted thereunder
for purposes of enforcement under section 216C.30.
new text end

Sec. 23.

Minnesota Statutes 2014, section 216C.16, subdivision 1, is amended to read:


Subdivision 1.

Purpose.

The purpose of this section is to grant to the commissioner
authority to exercise specific power to deal with shortages of refined petroleum products.
Authority granted shall be exercised for the purpose of minimizing the adverse impacts
of new text beginprolonged petroleum new text endshortages and dislocations upon the citizens and the economy of
the state and nation.

Sec. 24.

Minnesota Statutes 2014, section 216C.16, subdivision 2, is amended to read:


Subd. 2.

Establishment.

The commissioner shall establish and is responsible for
a state set-aside system for motor gasoline and middle distillates to provide emergency
petroleum requirements and thereby relieve the hardship caused by deleted text beginshortage,deleted text endnew text begin prolonged
petroleum shortages and
new text end supply dislocationsdeleted text begin, or other emergenciesdeleted text end. The commissioner, for
purposes of administration, may exercise all of the powers granted by this chapter.

Sec. 25.

new text begin [216C.165] PETROLEUM END USER PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Purpose. new text end

new text begin The purpose of this section is to grant to the commissioner
authority to ensure availability of necessary supplies of motor gasoline, middle distillates,
and propane for priority end users essential to ensure the health, safety, and welfare of
the general public.
new text end

new text begin Subd. 2. new text end

new text begin Establishment. new text end

new text begin The commissioner shall establish and is responsible for
a state priority end user program for motor gasoline, middle distillates, and propane to
provide emergency petroleum requirements and thereby relieve the hardship caused by
emergency petroleum shortages. The commissioner, for purposes of administration, may
exercise all of the powers granted by this chapter.
new text end

new text begin Subd. 3. 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 meaning given them.
new text end

new text begin (b) "Current requirements" means the supply of motor gasoline, distillate fuel oil,
and propane needed by an end user or wholesale purchaser to meet its present priority
end use needs.
new text end

new text begin (c) "End user" means any person who is an ultimate consumer of a petroleum
product other than a wholesale purchaser-consumer.
new text end

new text begin (d) "Middle distillates" means distillates obtained between kerosene and lubricating
oil fractions in the refining process, including but not limited to kerosene, number one and
number two heating oil, and diesel fuel.
new text end

new text begin (e) "Motor gasoline" means a liquid mixture of hydrocarbons produced by the
distillation of petroleum and used chiefly as a fuel in internal combustion engines.
new text end

new text begin (f) "Prime supplier" means the producer or supplier now or hereafter making the first
sale of middle distillates or motor gasoline subject to the state set-aside for consumption
within the state.
new text end

new text begin (g) "Propane" means a normally gaseous paraffinic compound that boils at a
temperature of -43.67 degrees Fahrenheit, and is used primarily for heating and cooking.
It does not include the propane portion of any natural gas liquid mixes, including a
butane-propane mix.
new text end

new text begin (h) "Supplier" means any prime supplier or any other firm which presently, or during
the last 12 months, supplies, sells, transfers, or otherwise furnishes motor gasoline,
distillate oil, and propane to wholesale purchasers or end users, including but not limited
to a refiner, importer, reseller, jobber, or retailer.
new text end

new text begin Subd. 4. new text end

new text begin Priority end user program; declaration. new text end

new text begin (a) The commissioner may
implement the priority end user program only upon:
new text end

new text begin (1) declaration of an energy supply emergency under the authority of section
216C.155, or a declaration of an emergency under chapter 12; and
new text end

new text begin (2) a finding by the commissioner that (i) major petroleum suppliers are unable to
fully satisfy contractually obligated volumes and have limited customers to a percentage
of their historical purchases or contractual volumes, and (ii) public services and public
health and safety are either interrupted or threatened due to insufficient supplies of
petroleum products.
new text end

new text begin (b) A declaration implementing the priority end user program shall remain in effect
for 60 days from date of declaration unless otherwise amended, superseded, or rescinded.
new text end

new text begin Subd. 5. new text end

new text begin Supplier responsibilities. new text end

new text begin Upon commissioner order implementing the
program and within 30 days of submission of the sworn statement required under this
section, petroleum suppliers shall supply 100 percent of the current requirements of motor
gasoline, middle distillates, and propane each month to certified priority end users.
new text end

new text begin Subd. 6. new text end

new text begin Priority end users. new text end

new text begin (a) The commissioner shall certify as priority end
users those end users whose continuity of operations in an emergency is critical for public
health, safety, and welfare. Such priority end users shall include the Minnesota State
Patrol, local law enforcement, fire fighting units, emergency medical services, and any
other end users as certified by the commissioner.
new text end

new text begin (b) Priority end users shall present to a petroleum supplier evidence of this
certification and the following information:
new text end

new text begin (1) the most recent 12 months of fuel purchases, in gallons;
new text end

new text begin (2) anticipated requirements for the next 12 months;
new text end

new text begin (3) written justification explaining the need for any volumes in excess of historical
or contractual purchases; and
new text end

new text begin (4) a sworn statement that the information provided in the certification is true and
accurate and that the petroleum product to be provided will only be used for priority
use as indicated.
new text end

new text begin Subd. 7. new text end

new text begin Appeal process. new text end

new text begin (a) A person aggrieved by certification of priority end
use may file a written petition of appeal to the Office of Administrative Hearings. The
petition must include:
new text end

new text begin (1) the name and address of the petitioner;
new text end

new text begin (2) a concise statement of facts surrounding the case, including the reason for the
appeal and relief sought; and
new text end

new text begin (3) the names and addresses of persons known to the petitioner who may be affected
adversely by the outcome of the appeal.
new text end

new text begin (b) The petitioner shall attach a sworn statement to the petition which states that the
information provided in the petition is true to the best of the petitioner's knowledge.
new text end

new text begin (c) The Office of Administrative Hearings shall, within three work days after the
filing of a petition, serve a copy of the petition on known persons who might be affected
adversely by the outcome of the appeal. Persons served with a petition may, not later
than five working days from service of the petition, file a written reply, supported by a
sworn statement to the effect that the information in the reply is true to the best of the
respondent's knowledge. A copy of the response shall be made available to the petitioner.
new text end

new text begin (d) Within 20 working days after the petition of appeal is filed, the Office of
Administrative Hearings shall render a decision on the appeal and serve it upon all persons
who participated in the appellate proceeding and any other person who is aggrieved by the
decision and order. A supplier is deemed to have exhausted all administrative remedies
once a decision has been rendered on the appeal.
new text end

Sec. 26.

Minnesota Statutes 2014, section 216C.31, is amended to read:


216C.31 ENERGY AUDIT PROGRAMS.

The commissioner shall develop deleted text beginstatedeleted text endnew text begin or approvenew text end programs deleted text beginofdeleted text endnew text begin fornew text end energy deleted text beginaudits of
residential and commercial buildings including the training and qualifications necessary
deleted text endnew text begin
auditors
new text end for the auditing of residential and commercial buildings under deleted text beginthe auspices ofdeleted text end a
program created under section 216B.241new text begin, 216C.436, or any other energy programnew text end.

Sec. 27.

Minnesota Statutes 2014, section 216C.435, subdivision 3a, is amended to read:


Subd. 3a.

Cost-effective energy improvements.

"Cost-effective energy
improvements" mean energy improvements that have been identified in an energy audit
or renewable energy system feasibility study as repaying their purchase and installation
costs in 20 years or less, based on the amount of deleted text beginfuturedeleted text end energy saved and estimated future
energy prices.

Sec. 28.

Minnesota Statutes 2014, section 216C.435, subdivision 4, is amended to read:


Subd. 4.

Energy audit.

"Energy audit" means a formal evaluation of the energy
consumption of a building by a deleted text begincertified energy auditor, whose certification is approved by
the commissioner
deleted text endnew text begin qualified professionalnew text end, for the purpose of identifying appropriate energy
improvements that could be made to the building and including an estimate of the length
of time a specific energy improvement will take to repay its purchase and installation
costs, based on the amount of energy saved and estimated future energy prices.

Sec. 29.

Minnesota Statutes 2014, section 216C.435, subdivision 5, is amended to read:


Subd. 5.

Energy improvement.

"Energy improvement" means:

(1) any renovation or retrofitting of a building to improve energy efficiency that
is permanently affixed to the property and that results in a net reduction in energy
consumption without altering the principal source of energy;

(2) permanent installation of new or upgraded electrical circuits and related
equipment to enable electrical vehicle charging; deleted text beginor
deleted text end

(3) a renewable energy system attached to, installed within, or proximate to a
building that generates electrical or thermal energy from a renewable energy sourcenew text begin; or
new text end

new text begin (4) the installation of infrastructure, machinery, and appliances that will allow
natural gas to be used as a heating fuel on the premises of a building that was previously
not connected to a source of natural gas
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. 30.

Minnesota Statutes 2014, section 216C.435, subdivision 10, is amended to read:


Subd. 10.

Renewable energy system feasibility study.

"Renewable energy system
feasibility study" means a written study, conducted by a deleted text begincontractordeleted text endnew text begin qualified professionalnew text end
trained to perform that analysis, for the purpose of determining the feasibility of installing
a renewable energy system in a building, including an estimate of the length of time
a specific renewable energy system will take to repay its purchase and installation
costs, based on the amount of energy saved and estimated future energy prices. For a
geothermal energy improvement, the feasibility study must calculate net savings in terms
of nongeothermal energy and costs.

Sec. 31.

Minnesota Statutes 2014, section 216C.435, is amended by adding a
subdivision to read:


new text begin Subd. 13. new text end

new text begin Qualified professional. new text end

new text begin "Qualified professional" means an individual
who has successfully completed one of the programs developed or approved by the
commissioner, as referenced in section 216C.31.
new text end

Sec. 32.

Minnesota Statutes 2014, section 216C.436, subdivision 1, is amended to read:


Subdivision 1.

Program authority.

An implementing entity may establish a
program to finance energy improvements to enable owners of qualifying real property
to pay for cost-effective energy improvements to the qualifying real property deleted text beginwith the
net proceeds and interest earnings of revenue bonds authorized in this section
deleted text end. An
implementing entity may limit the number of qualifying real properties for which a
property owner may receive program financing.

Sec. 33.

Minnesota Statutes 2014, section 216C.436, subdivision 2, is amended to read:


Subd. 2.

Program requirements.

deleted text beginAdeleted text endnew text begin The implementing entity must ensure that anew text end
financing program deleted text beginmustdeleted text end:

(1) deleted text beginimposedeleted text endnew text begin imposesnew text end requirements and conditions on financing arrangements to
ensure timely repayment;

(2) deleted text beginrequiredeleted text endnew text begin requiresnew text end an energy audit or renewable energy system feasibility study to
be conducted on the qualifying real property and reviewed by the implementing entity
prior to approval of the financing;

(3) deleted text beginrequiredeleted text endnew text begin requiresnew text end the inspection of all installations and a performance verification
of at least ten percent of the energy improvements financed by the program;

(4) new text begindoes new text endnot prohibit the financing of all cost-effective energy improvements not
otherwise prohibited by this section;

(5) deleted text beginrequiredeleted text endnew text begin requiresnew text end that all cost-effective energy improvements be made to a
qualifying real propertynew text begin are completed and operationalnew text end prior to, or in conjunction withdeleted text begin,
an applicant's repayment of financing for energy improvements for that property
deleted text endnew text begin the first
scheduled assessment payment due to the taxing authority
new text end;

(6) deleted text beginhavedeleted text endnew text begin hasnew text end energy improvements financed by the program performed by licensed
contractors as required by chapter 326B or other law or ordinance;

(7) deleted text beginrequiredeleted text endnew text begin requiresnew text end disclosures to borrowers by the implementing entity of the risks
involved in borrowing, including the risk of deleted text beginforeclosuredeleted text endnew text begin forfeiturenew text end if a tax delinquency
results from a default;

(8) deleted text beginprovidedeleted text endnew text begin providesnew text end financing only to those who demonstrate an ability to repay;

(9) new text begindoes new text endnot provide financing for a qualifying real property in which the owner is
not current on mortgage or real property tax payments;

(10) deleted text beginrequiredeleted text endnew text begin requiresnew text end a petition to the implementing entity by all owners of the
qualifying real property requesting collections of repayments as a special assessment
under section 429.101;

(11) deleted text beginprovidedeleted text endnew text begin providesnew text end that payments and assessments are not accelerated due to a
default and that a tax delinquency exists only for assessments not paid when due; and

(12) deleted text beginrequiredeleted text endnew text begin requiresnew text end that liability for special assessments related to the financing
runs with the qualifying real property.

Sec. 34.

Minnesota Statutes 2014, section 216E.01, subdivision 5, is amended to read:


Subd. 5.

Large electric power generating plant.

"Large electric power generating
plant" shall mean electric power generating equipment and associated facilities designed
for or capable of operation at a capacity of 50,000 kilowatts or morenew text begin, or a solar energy
generating system designed for or capable of operation at a capacity of 10,000 kilowatts
or more
new text end.

Sec. 35.

Minnesota Statutes 2014, section 216E.021, is amended to read:


216E.021 SOLAR ENERGY SYSTEM SIZE DETERMINATION.

(a) This section must be used to determine whether a combination of solar energy
generating systems meets the definition of large electric power generating plant and is
subject to the commission's siting authority jurisdiction under this chapter. The alternating
current nameplate capacity of one solar energy generating system must be combined with
the alternating current nameplate capacity of any other solar energy generating system that:

(1) is constructed within the same 12-month period as the solar energy generating
system; and

(2) exhibits characteristics of being a single development, including but not limited
to ownership structure, an umbrella sales arrangement, shared interconnection, revenue
sharing arrangements, and common debt or equity financing.

new text begin (b) An application to a county or municipality for a permit to construct a solar
energy generating system with a capacity of 1,000 kilowatts or greater is not complete
unless it includes a solar energy system size determination under this section.
new text end

deleted text begin (b)deleted text endnew text begin (c)new text end The commissioner of commerce shall provide forms and assistance for
applicants to make a request for a size determination. Upon written request of an applicant,
the commissioner shall provide a written size determination within 30 days of receipt of
the request and of any information requested by the commissioner. In the case of a dispute,
the chair of the Public Utilities Commission shall make the final size determination.

Sec. 36.

Minnesota Statutes 2014, section 216E.03, subdivision 3, is amended to read:


Subd. 3.

Application.

Any person seeking to construct a large electric power
generating plant or a high-voltage transmission line must apply to the commission for a
site or route permit. The application shall contain such information as the commission may
require. The applicant shall propose at least two sites for a large electric power generating
plant and two routes for a high-voltage transmission linenew text begin, except that an applicant shall
only be required to propose one site for a large electric power generating plant that is a
solar energy generating system
new text end. Neither of the two proposed routes may be designated as
a preferred route and all proposed routes must be numbered and designated as alternatives.
The commission shall determine whether an application is complete and advise the
applicant of any deficiencies within ten days of receipt. An application is not incomplete if
information not in the application can be obtained from the applicant during the first phase
of the process and that information is not essential for notice and initial public meetings.

Sec. 37.

Minnesota Statutes 2014, section 216E.05, subdivision 2, is amended to read:


Subd. 2.

Applicable projects.

Applicants may seek approval from local units of
government to construct the following projects:

(1) large electric power generating plantsnew text begin, except solar energy generating systems,new text end
with a capacity of less than 80 megawatts;

(2) large electric power generating plants of any size that burn natural gas and are
intended to be a peaking plant;

(3) high-voltage transmission lines of between 100 and 200 kilovolts;

(4) substations with a voltage designed for and capable of operation at a nominal
voltage of 100 kilovolts or more;

(5) a high-voltage transmission line service extension to a single customer between
200 and 300 kilovolts and less than ten miles in length; and

(6) a high-voltage transmission line rerouting to serve the demand of a single
customer when the rerouted line will be located at least 80 percent on property owned or
controlled by the customer or the owner of the transmission line.

Sec. 38.

new text begin [216E.055] SOLAR FACILITY PERMIT AUTHORITY; ASSUMPTION
BY COUNTIES AND MUNICIPALITIES.
new text end

new text begin (a) A county or municipality may, by resolution and upon written notice to the
Public Utilities Commission, assume responsibility for processing applications for permits
required under this chapter for large electric power generating plants solely within their
jurisdiction that are solar energy generating systems up to 25,000 kilowatts. If a county
or municipality assumes the responsibility for permit application processing, the county
or municipality may delegate the authority to issue the permit to an appropriate county
officer or employee; or the county or municipality may determine the permit application
should be processed as a conditional use in accordance with procedures and processes
established under chapter 394 or 462.
new text end

new text begin (b) A county or municipality that exercises its option under paragraph (a) may issue,
deny, modify, impose conditions upon, or revoke permits pursuant to this section. The
action of the county or municipality about a permit application is final, subject to appeal.
new text end

new text begin (c) The commission shall, by order, establish general permit standards, including
appropriate set-backs, governing site permits for solar energy generating systems under
this chapter. The order must consider existing and historic commission standards for
permits issued by the commission. The general permit standards shall apply to permits
issued by counties and municipalities under this section and to permits issued by the
commission under this chapter. The commission or a county or municipality may grant a
variance from a general permit standard if the variance is found to be in the public interest.
new text end

new text begin (d) A county or municipality may by ordinance adopt standards for solar energy
generating systems that are more stringent than standards in commission rules or in the
commission's permit standards. The commission, when considering a permit application
for a solar energy generating system in a jurisdiction that has assumed permitting authority
under this section, shall consider and apply the jurisdiction's more stringent standards
unless the commission finds good cause to not apply the standards.
new text end

new text begin (e) The commission and the commissioner of commerce shall provide technical
assistance to a county or municipality with respect to the processing of site permit
applications for solar energy generating systems under this section.
new text end

new text begin (f) This section does not exempt applicants from the requirements under section
216E.021.
new text end

Sec. 39.

Minnesota Statutes 2014, section 453A.02, subdivision 5, is amended to read:


Subd. 5.

Gas.

"Gas" means either natural or synthetic gas, deleted text beginincludingdeleted text end propane,
manufacturednew text begin gasnew text end, methane from coal beds, geothermal gas, or any mixture thereof,
whether in gaseous or liquid form, or any by-product resulting therefrom.

new text begin EFFECTIVE DATE. new text end

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

Sec. 40.

Minnesota Statutes 2014, section 500.30, is amended by adding a subdivision
to read:


new text begin Subd. 2a. new text end

new text begin Lease of wind rights extension. new text end

new text begin Notwithstanding subdivision 2, a wind
energy project that meets the requirements of this subdivision shall extend lease of wind
rights to an eight-year period. In order to qualify for the extension under this subdivision a
facility must:
new text end

new text begin (1) utilize between 35 and 41 wind turbines;
new text end

new text begin (2) have a nameplate capacity of between 75 and 82 megawatts; and
new text end

new text begin (3) have commenced construction of the facility before June 1, 2015.
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. 41. new text beginSTUDY OF PERFORMANCE METRICS.
new text end

new text begin The commission may initiate a proceeding to determine a set of performance metrics
that are quantifiable, verifiable, and consistent with state policy.
new text end

Sec. 42. new text beginCOMPETITIVE RATE FOR ENERGY-INTENSIVE,
TRADE-EXPOSED ELECTRIC UTILITY CUSTOMER.
new text end

new text begin Subdivision 1. 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) "Energy-intensive, trade-exposed customer" is defined as:
new text end

new text begin (1) a retail customer of an investor-owned electric utility that has facilities at a
single site that:
new text end

new text begin (i) collectively impose a peak electrical demand of at least 10,000 kilowatts on
the electric utility's system; and
new text end

new text begin (ii) have a combined annual average load factor in excess of 80 percent; and
new text end

new text begin (2) any other globally competitive electric utility customer who can demonstrate
that energy costs are a significant portion of the customer's overall cost of production and
impedes the customer's ability to compete in the global market.
new text end

new text begin (c) "EITE rate schedule" means a rate schedule of an investor-owned electric utility
that establishes the terms of service for an individual or group of energy-intensive,
trade-exposed customers.
new text end

new text begin (d) "EITE rate" means the rate or rates offered by the utility under an EITE rate
schedule.
new text end

new text begin Subd. 2. new text end

new text begin Rates and terms of EITE rate schedule. new text end

new text begin (a) An investor-owned electric
utility that has at least 50 percent of its load from 15 or fewer customers may propose an
EITE rate schedule for commission approval that includes various EITE rate options such
as fixed rates, market-based rates.
new text end

new text begin (b) Notwithstanding Minnesota Statutes, section 216B.03, 216B.05, 216B.06,
216B.07, or 216B.16, the commission shall approve a proposed EITE rate schedule, if
it finds the schedule provides net benefits to the utility and its customers, considering
among other things:
new text end

new text begin (1) potential cost impacts to the utility customers;
new text end

new text begin (2) the net benefit to the local or state economy through the retention of or increase
to existing jobs;
new text end

new text begin (3) a net increase in economic development in the utility's service territory; and
new text end

new text begin (4) avoiding a significant increase in rates due to a reduction of EITE customer load.
new text end

new text begin (c) An EITE rate offered by an electric utility under an approved EITE rate schedule
must be filed with the commission. The commission shall review and approve the EITE
rate offered by an electric utility if it finds the rate provides net benefits to the utility and
its customers as described above. The commission shall make a final determination in
any proceeding begun under this section within 90 days of a miscellaneous rate filing by
the electric utility.
new text end

new text begin (d) Upon approval of an EITE rate, the utility may recover the incremental costs, or
refund the incremental revenues, associated with providing service to a customer under
the EITE rate from the utility's nonenergy-intensive, trade-exposed customers, except
low-income residential ratepayers, as defined in Minnesota Statutes, section 216B.16,
subdivision 15.
new text end

Sec. 43. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2014, sections 216C.15; and 216C.436, subdivision 6, new text end new text begin are
repealed.
new text end