Minnesota Session Laws - 2000, Regular Session

                            CHAPTER 443-H.F.No. 2757 
                  An act relating to energy; regulating a state mandate 
                  requiring certain electric energy to be generated by 
                  using biomass as a fuel; amending Minnesota Statutes 
                  1998, section 216B.2424, subdivisions 3, 5, and by 
                  adding subdivisions. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1998, section 216B.2424, 
        subdivision 3, is amended to read: 
           Subd. 3.  [FUEL EXEMPTION.] Over the duration of the 
        contract of a biomass power facility selected to satisfy the 
        mandate in subdivision 5, fuel sources that are not biomass may 
        be used to satisfy up to 25 percent of the fuel requirements of 
        a biomass power facility selected to satisfy the biomass power 
        mandate in subdivision 5, except that agricultural crop wastes, 
        such as oat hulls, may be used to satisfy more than 25 percent 
        of the fuel requirements of a power facility selected to satisfy 
        the biomass power mandate in subdivision 5 if the wastes are 
        co-fired with the fuel authorized for the facility.  A biomass 
        power facility selected to satisfy the mandate in subdivision 5 
        also may use fuel sources that are not biomass during any period 
        when biomass fuel sources are not reasonably available to the 
        facility due to any circumstances constituting an act of God.  
        Fuel sources that are not biomass used during such a period of 
        biomass fuel source unavailability shall not be counted toward 
        the 25 percent exemption provided in this subdivision.  For 
        purposes of this subdivision, "act of God" means any natural 
        disaster or other natural phenomenon of an exceptional, 
        inevitable, or irresistible character, including, but not 
        limited to, flood, fire, drought, earthquake, and crop failure 
        resulting from climatic conditions, infestation, or disease. 
           Sec. 2.  Minnesota Statutes 1998, section 216B.2424, 
        subdivision 5, is amended to read: 
           Subd. 5.  [MANDATE.] (a) A public utility, as defined in 
        section 216B.02, subdivision 4, that operates a nuclear-powered 
        electric generating plant within this state must construct and 
        operate, purchase, or contract to construct and operate (1) by 
        December 31, 1998, 50 megawatts of electric energy installed 
        capacity generated by farm-grown closed-loop biomass scheduled 
        to be operational by December 31, 2001; and (2) by December 31, 
        1998, an additional 75 megawatts of installed capacity so 
        generated scheduled to be operational by December 31, 2002.  Of 
        the 125 megawatts of biomass electricity installed capacity 
        required under this subdivision, no more than 50 megawatts of 
        this capacity may be provided by a facility that uses poultry 
        litter as its primary fuel source and any such facility:  (i) 
        need not use biomass that complies with the definition in 
        subdivision 1; (ii) must enter into a contract with the public 
        utility for such capacity, that has an average purchase price 
        per megawatt hour over the life of the contract that is equal to 
        or less than the average purchase price per megawatt hour over 
        the life of the contract in contracts approved by the public 
        utilities commission before April 1, 2000, to satisfy the 
        mandate of this section, and file that contract with the public 
        utilities commission prior to September 1, 2000; and (iii) such 
        capacity must be scheduled to be operational by December 31, 
        2002.  Of the total 125 megawatts of biomass electric energy 
        installed capacity required under this section, no more than 75 
        megawatts may be provided by a single project.  Of the 75 
        megawatts of biomass electric energy installed capacity required 
        under clause (2), no more than 25 megawatts of this capacity may 
        be provided by a St. Paul district heating and cooling system 
        cogeneration facility utilizing waste wood as a primary fuel 
        source.  The St. Paul district heating and cooling system 
        cogeneration facility need not use biomass that complies with 
        the definition in subdivision 1.  The public utility must accept 
        and consider on an equal basis with other proposals a proposal 
        to satisfy the requirements of this section that includes a 
        project that exceeds the megawatt capacity requirements of 
        either clause (1) or (2) and that proposes to sell the excess 
        capacity to the public utility or to other purchasers. 
           (b) If a public utility files a contract with the 
        commission for electric energy installed capacity that uses 
        poultry litter as its primary fuel source, the commission must 
        do a preliminary review of the contract to determine if it meets 
        the purchase price criteria provided in paragraph (a), clause 
        (ii), of this subdivision.  The commission shall perform its 
        review and advise the parties of its determination within 30 
        days of filing of such a contract by a public utility.  A public 
        utility may submit by September 1, 2000, a revised contract to 
        address the commission's preliminary determination.  
           (c) The commission shall finally approve, modify, or 
        disapprove no later than July 1, 2001 all contracts submitted by 
        a public utility as of September 1, 2000 to meet the mandate set 
        forth in this subdivision.  
           (d) If a public utility subject to this section exercises 
        an option to increase the generating capacity of a project in a 
        contract approved by the commission prior to the effective date 
        of this act to satisfy the mandate in this subdivision, the 
        public utility must notify the commission by September 1, 2000, 
        that it has exercised the option and include in the notice the 
        amount of additional megawatts to be generated under the option 
        exercised.  Any review by the commission of the project after 
        exercise of such an option shall be based on the same criteria 
        used to review the existing contract. 
           Sec. 3.  Minnesota Statutes 1998, section 216B.2424, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [REMAINING MEGAWATT COMPLIANCE PROCESS.] (a) If 
        there remain megawatts of biomass power generating capacity to 
        fulfill the mandate in subdivision 5 after the commission has 
        taken final action on all contracts filed by September 1, 2000, 
        by a public utility, this subdivision governs final compliance 
        with the biomass energy mandate in subdivision 5 subject to the 
        requirements of subdivision 7.  
           (b) To the extent not inconsistent with this subdivision, 
        the provisions of subdivisions 2, 3, 4, and 5 apply to proposals 
        subject to this subdivision. 
           (c) A public utility must submit proposals to the 
        commission to complete the biomass mandate.  The commission 
        shall require a public utility subject to this section to issue 
        a request for competitive proposals for projects for electric 
        generation utilizing biomass as defined in paragraph (f) of this 
        subdivision to provide the remaining megawatts of the mandate.  
        The commission shall set an expedited schedule for submission of 
        proposals to the utility, selection by the utility of proposals 
        or projects, negotiation of contracts, and review by the 
        commission of the contracts or projects submitted by the utility 
        to the commission. 
           (d) Notwithstanding the provisions of subdivisions 1 to 5 
        but subject to the provisions of subdivision 7, a new or 
        existing facility proposed under this subdivision that is fueled 
        either by biomass or by co-firing biomass with non-biomass may 
        satisfy the mandate in this section.  Such a facility need not 
        use biomass that complies with the definition in subdivision 1 
        if it uses biomass as defined in paragraph (f) of this 
        subdivision.  Generating capacity produced by co-firing of 
        biomass that is operational as of the effective date of this act 
        does not meet the requirements of the mandate, except that 
        additional co-firing capacity added at an existing facility 
        after the effective date of this act may be used to satisfy this 
        mandate.  Only the number of megawatts of capacity at a facility 
        which co-fires biomass that are directly attributable to the 
        biomass and that become operational after the effective date of 
        this act count toward meeting the biomass mandate in this 
        section. 
           (e) Nothing in this subdivision precludes a facility 
        proposed and approved under this subdivision from using fuel 
        sources that are not biomass in compliance with subdivision 3. 
           (f) Notwithstanding the provisions of subdivision 1, for 
        proposals subject to this subdivision, "biomass" includes 
        farm-grown closed-loop biomass, agricultural wastes, including 
        animal, poultry, and plant wastes, and waste wood, including 
        chipped wood, bark, brush, residue wood, and sawdust. 
           (g) Nothing in this subdivision affects in any way 
        contracts entered into as of the effective date of this act to 
        satisfy the mandate in subdivision 5.  
           (h) Nothing in this subdivision requires a public utility 
        to retrofit its own power plants for the purpose of co-firing 
        biomass fuel, nor is a utility prohibited from retrofitting its 
        own power plants for the purpose of co-firing biomass fuel to 
        meet the requirements of this subdivision. 
           Sec. 4.  Minnesota Statutes 1998, section 216B.2424, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [EFFECT ON EXISTING PROJECTS.] The commission may 
        not approve a project proposed after the effective date of this 
        act which would have an adverse impact on the ability of a 
        project approved before the effective date of this act to obtain 
        an adequate supply of the fuel source designated for the project.
           Sec. 5.  Minnesota Statutes 1998, section 216B.2424, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [AGRICULTURAL BIOMASS REQUIREMENT.] Of the 125 
        megawatts mandated in subdivision 5, at least 75 megawatts of 
        the generating capacity must be generated by facilities that use 
        agricultural biomass as the principal fuel source.  For purposes 
        of this subdivision, agricultural biomass includes only 
        farm-grown closed-loop biomass and agricultural waste, including 
        animal, poultry, and plant wastes.  For purposes of this 
        subdivision, principal fuel source means a fuel source that 
        satisfies at least 75 percent of the fuel requirements of an 
        electric power generating facility.  Nothing in this subdivision 
        is intended to expand the fuel source requirements of 
        subdivision 5.  
           Sec. 6.  [EFFECTIVE DATE.] 
           Sections 1 to 5 are effective the day following final 
        enactment. 
           Presented to the governor April 20, 2000 
           Signed by the governor April 24, 2000, 1:55 p.m.