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Key: (1) language to be deleted (2) new language

    Laws of Minnesota 1993 

                        CHAPTER 356-H.F.No. 1253 
           An act relating to energy; cogeneration and small 
          power production; providing for establishment of 
          prices paid for utilities' avoided capacity and energy 
          costs; providing that the public utilities commission 
          establish a preference for renewable resource energy 
          production; amending Minnesota Statutes 1992, sections 
          216B.164, subdivision 4; 216B.2421, subdivision 1; and 
          216B.62, subdivision 5; proposing coding for new law 
          in Minnesota Statutes, chapter 216B. 
     Section 1.  Minnesota Statutes 1992, section 216B.164, 
subdivision 4, is amended to read: 
    Subd. 4.  [PURCHASES; WHEELING.] (a) Except as otherwise 
provided in paragraph (c), this subdivision shall apply to all 
qualifying facilities having 40 kilowatt capacity or more as 
well as qualifying facilities as defined in subdivision 3 which 
elect to be governed by its provisions.  
    (b) The utility to which the qualifying facility is 
interconnected shall purchase all energy and capacity made 
available by the qualifying facility.  The qualifying facility 
shall be paid the utility's full avoided capacity and energy 
costs including the value of environmental costs avoided by the 
qualifying facility considered appropriate by the commission.  
To the extent possible, the commission shall quantify and value 
all environmental costs associated with each method of 
electricity generation as negotiated by the parties, as set by 
the commission, or as determined through competitive bidding 
approved by the commission.  The full avoided capacity and 
energy costs to be paid a qualifying facility that generates 
electric power by means of a renewable energy source are the 
utility's least cost renewable energy facility or the bid of a 
competing supplier of a least cost renewable energy facility, 
whichever is lower, unless the commission's resource plan order, 
under section 216B.2422, subdivision 2, provides that the use of 
a renewable resource to meet the identified capacity need is not 
in the public interest.  
    (c) For all qualifying facilities having 30 kilowatt 
capacity or more, the utility shall, at the qualifying 
facility's or the utility's request, provide wheeling or 
exchange agreements wherever practicable to sell the qualifying 
facility's output to any other Minnesota utility having 
generation expansion anticipated or planned for the ensuing ten 
years.  The commission shall establish the methods and 
procedures to insure that except for reasonable wheeling charges 
and line losses, the qualifying facility receives the full 
avoided energy and capacity costs of the utility ultimately 
receiving the output.  
    (d) The commission shall set rates for electricity 
generated by renewable energy. 
    Sec. 2.  Minnesota Statutes 1992, section 216B.2421, 
subdivision 1, is amended to read: 
    Subdivision 1.  [APPLICABILITY.] The definition in this 
section applies to this section and sections 216B.2422 and 
section 216B.243. 
    Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
section, the terms defined in this subdivision have the meanings 
given them. 
    (b) "Utility" means an entity with the capability of 
generating 100,000 kilowatts or more of electric power and 
serving, either directly or indirectly, the needs of 10,000 
retail customers in Minnesota.  Utility does not include federal 
power agencies. 
    (c) "Renewable energy" means electricity generated through 
use of any of the following resources: 
    (1) wind; 
    (2) solar; 
    (3) geothermal; 
    (4) hydro; 
    (5) trees or other vegetation; or 
    (6) landfill gas. 
    (d) "Resource plan" means a set of resource options that a 
utility could use to meet the service needs of its customers 
over a forecast period, including an explanation of the supply 
and demand circumstances under which, and the extent to which, 
each resource option would be used to meet those service needs.  
These resource options include using, refurbishing, and 
constructing utility plant and equipment, buying power generated 
by other entities, controlling customer loads, and implementing 
customer energy conservation. 
    (e) "Refurbish" means to rebuild or substantially modify an 
existing electricity generating resource of 30 megawatts or 
    Subd. 2.  [PLAN FILING AND APPROVAL.] A utility shall file 
a resource plan with the commission periodically in accordance 
with rules adopted by the commission.  The commission shall 
approve, reject, or modify the plan of a public utility, as 
defined in section 216B.02, subdivision 4, consistent with the 
public interest.  In the resource plan proceedings of all other 
utilities, the commission's order shall be advisory and the 
order's findings and conclusions shall constitute prima facie 
evidence which may be rebutted by substantial evidence in all 
other proceedings.  With respect to utilities other than those 
defined in section 216B.02, subdivision 4, the commission shall 
consider the filing requirements and decisions in any comparable 
proceedings in another jurisdiction.  As a part of its resource 
plan filing, a utility shall include the least cost plan for 
meeting 50 and 75 percent of all new and refurbished capacity 
needs through a combination of conservation and renewable energy 
    Subd. 3.  [ENVIRONMENTAL COSTS.] (a) The commission shall, 
to the extent practicable, quantify and establish a range of 
environmental costs associated with each method of electricity 
generation.  A utility shall use the values established by the 
commission in conjunction with other external factors, including 
socioeconomic costs, when evaluating and selecting resource 
options in all proceedings before the commission, including 
resource plan and certificate of need proceedings. 
    (b) The commission shall establish interim environmental 
cost values associated with each method of electricity 
generation by March 1, 1994.  These values expire on the date 
the commission establishes environmental cost values under 
paragraph (a). 
    Subd. 4.  [RENEWABLE PREFERENCE.] The commission shall not 
approve a new or refurbished nonrenewable energy facility in an 
integrated resource plan or a certificate of need, pursuant to 
section 216B.243, nor shall the commission allow rate recovery 
pursuant to section 216B.16 for such a nonrenewable energy 
facility, unless the utility has demonstrated that a renewable 
energy facility is not in the public interest. 
    Subd. 5.  [BIDDING.] A utility may select resources to meet 
its projected energy demand through a bidding process approved 
or established by the commission.  A utility shall use the 
environmental cost estimates determined under subdivision 3 in 
evaluating bids submitted in a process established under this 
CERTIFICATE OF NEED.] A utility shall indicate in its resource 
plan whether it intends to site or construct a large energy 
facility.  If the utility's resource plan includes a proposed 
large energy facility and construction of that facility is 
likely to begin before the utility files its next resource plan, 
the commission shall conduct the resource plan proceeding 
consistent with the requirements of section 216B.243 with 
respect to the proposed facility.  If the commission approves 
the proposed facility in the resource plan, a separate 
certificate of need proceeding is not required. 
    Sec. 4.  Minnesota Statutes 1992, section 216B.62, 
subdivision 5, is amended to read: 
commission and department may charge cooperative electric 
associations and municipal electric utilities their 
proportionate share of the expenses incurred in the review and 
disposition of resource plans, adjudication of service area 
disputes and the costs incurred in the adjudication of 
complaints over service standards, practices, and rates.  
Cooperative electric associations electing to become subject to 
rate regulation by the commission pursuant to section 216B.026, 
subdivision 4, are also subject to this section.  Neither a 
cooperative electric association nor a municipal electric 
utility is liable for costs and expenses in a calendar year in 
excess of the limitation on costs that may be assessed against 
public utilities under subdivision 2.  A cooperative electric 
association or municipal electric utility may object to and 
appeal bills of the commission and department as provided in 
subdivision 4. 
    Presented to the governor May 20, 1993 
    Signed by the governor May 24, 1993, 12:18 p.m.

Official Publication of the State of Minnesota
Revisor of Statutes