Office of the Revisor of Statutes
Minnesota Session Laws - 2001, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 212-S.F.No. 722
An act relating to energy; enacting the Minnesota
Energy Security and Reliability Act; requiring an
energy security blueprint and a state transmission
plan; establishing position of reliability
administrator; providing for essential energy
infrastructure; modifying provisions for siting,
routing, and determining the need for large electric
power facilities; regulating conservation expenditures
by energy utilities and eliminating state pre-approval
of conservation plans by public utilities; encouraging
regulatory flexibility in supplying and obtaining
energy; regulating interconnection of distributed
utility resources; providing for safety and service
standards from distribution utilities; clarifying the
state cold weather disconnection requirements;
authorizing municipal utilities, municipal power
agencies, cooperative utilities, and investor-owned
utilities to form joint ventures to provide utility
services; eliminating the requirement for individual
utility resource plans; requiring reports; making
technical, conforming, and clarifying changes;
appropriating money; amending Minnesota Statutes 2000,
sections 16B.32, subdivision 2; 116C.52, subdivisions
4, 10; 116C.53, subdivisions 2, 3; 116C.57,
subdivisions 1, 2, 4, by adding subdivisions; 116C.58;
116C.59, subdivisions 1, 4; 116C.60; 116C.61,
subdivisions 1, 3; 116C.62; 116C.64; 116C.645;
116C.65; 116C.66; 116C.69; 216B.095; 216B.097,
subdivision 1; 216B.16, subdivision 15; 216B.1645;
216B.241, subdivisions 1, 1a, 1b, 2; 216B.2421,
subdivision 2; 216B.243, subdivisions 3, 4, 8;
216B.62, subdivision 5; 216C.051, subdivisions 6, 9;
216C.41, subdivisions 3, 5, by adding a subdivision;
proposing coding for new law in Minnesota Statutes,
chapters 16B; 116C; 216B; 216C; 452; repealing
Minnesota Statutes 2000, sections 116C.55,
subdivisions 2, 3; 116C.57, subdivisions 3, 5, 5a;
116C.67; 216B.2421, subdivision 3.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
PUBLIC BUILDING ENERGY CONSERVATION
Section 1. Minnesota Statutes 2000, section 16B.32,
subdivision 2, is amended to read:
Subd. 2. [ENERGY CONSERVATION GOALS; EFFICIENCY
PROGRAM.] (a) The commissioner of administration in consultation
with the department of public service commerce, in cooperation
with one or more public utilities or comprehensive energy
services providers, may conduct a shared-savings program
involving energy conservation expenditures on state-owned and
wholly state-leased buildings. The public utility or energy
services provider shall contract with appropriate state agencies
to implement energy efficiency improvements in the selected
buildings. A contract must require the public utility or energy
services provider to include all energy efficiency improvements
in selected buildings that are calculated to achieve a cost
payback within ten years. The contract must require that the
public utility or energy services provider be repaid solely from
energy cost savings and only to the extent of energy cost
savings. Repayments must be interest-free. The goal of the
program in this paragraph is to demonstrate that through
effective energy conservation the total energy consumption per
square foot of state-owned and wholly state-leased buildings
could be reduced exceed existing energy code by at least 25 30
percent from consumption in the base year of 1990. All agencies
participating in the program must report to the commissioner of
administration their monthly energy usage, building schedules,
inventory of energy-consuming equipment, and other information
as needed by the commissioner to manage and evaluate the program.
(b) The commissioner may exclude from the program of
paragraph (a) a building in which energy conservation measures
are carried out. "Energy conservation measures" means measures
that are applied to a state building that improve energy
efficiency and have a simple return of investment in ten years
or within the remaining period of a lease, whichever time is
shorter, and involves energy conservation, conservation
facilities, renewable energy sources, improvements in operations
and maintenance efficiencies, or retrofit activities.
(c) This subdivision expires January 1, 2001.
Sec. 2. [16B.325] [SUSTAINABLE BUILDING GUIDELINES.]
The department of administration and the department of
commerce, with the assistance of other agencies, shall develop
sustainable building design guidelines for all new state
buildings by January 15, 2003. The primary objectives of these
guidelines are to ensure that all new state buildings initially
exceed existing energy code, as established in Minnesota Rules,
chapter 7676, by at least 30 percent. The guidelines must focus
on achieving the lowest possible lifetime cost for new buildings
and allow for changes in the guidelines that encourage continual
energy conservation improvements in new buildings. The design
guidelines must establish sustainability guidelines that include
air quality and lighting standards and that create and maintain
a healthy environment and facilitate productivity improvements;
specify ways to reduce material costs; and must consider the
long-term operating costs of the building, including the use of
renewable energy sources and distributed electric energy
generation that uses a renewable source or natural gas or a fuel
that is as clean or cleaner than natural gas. In developing the
guidelines, the departments shall use an open process, including
providing the opportunity for public comment. The guidelines
established under this section are mandatory for all new
buildings receiving funding from the bond proceeds fund after
January 1, 2004.
Sec. 3. [BENCHMARKS FOR EXISTING PUBLIC BUILDINGS.]
The department of administration shall maintain information
on energy usage in all public buildings for the purpose of
establishing energy efficiency benchmarks and energy
conservation goals. The department shall report preliminary
energy conservation goals to the chairs of the senate
telecommunications, energy and utilities committee and the house
regulated industries committee by January 15, 2002. The
department shall develop a comprehensive plan by January 15,
2003, to maximize electrical and thermal energy efficiency in
existing public buildings through conservation measures having a
simple payback within ten to 15 years. The plan must detail the
steps necessary to implement the conservation measures and
include the projected costs of these measures. The owner or
operator of a public building subject to this section shall
provide information to the department of administration
necessary to accomplish the purposes of this section.
ARTICLE 2
JOINT VENTURES
Section 1. [452.25] [JOINT VENTURES BY UTILITIES.]
Subdivision 1. [APPLICABILITY.] This section applies to
all home rule charter and statutory cities, except as provided
in section 2.
Subd. 2. [DEFINITIONS.] For purposes of this section:
(a) "City" means a statutory or home rule charter city,
section 410.015 to the contrary notwithstanding.
(b) "Cooperative association" means a cooperative
association organized under chapter 308A.
(c) "Governing body" means (1) the city council in a city
that operates a municipal utility, or (2) a board, commission,
or body empowered by law, city charter, or ordinance or
resolution of the city council to control and operate the
municipal utility.
(d) "Investor-owned utility" means an entity that provides
utility services to the public under chapter 216B and that is
owned by private persons.
(e) "Municipal power agency" means an organization created
under sections 453.51 to 453.62.
(f) "Municipal utility" means a utility owned, operated, or
controlled by a city to provide utility services.
(g) "Public utility" or "utility" means a provider of
electric or water facilities or services or an entity engaged in
other similar or related operations authorized by law or charter.
Subd. 3. [AUTHORITY.] (a) Upon the approval of its elected
utilities commission or, if there be none, its city council, a
municipal utility may enter into a joint venture with other
municipal utilities, municipal power agencies, cooperative
associations, or investor-owned utilities to provide utility
services. Retail electric utility services provided by a joint
venture must be within the boundaries of each utility's
exclusive electric service territory as shown on the map of
service territories maintained by the department of commerce.
The terms and conditions of the joint venture are subject to
ratification by the governing bodies of the respective utilities
and may include the formation of a corporate or other separate
legal entity with an administrative and governance structure
independent of the respective utilities.
(b) A corporate or other separate legal entity, if formed:
(1) has the authority and legal capacity and, in the
exercise of the joint venture, the powers, privileges,
responsibilities, and duties authorized by this section;
(2) is subject to the laws and rules applicable to the
organization, internal governance, and activities of the entity;
(3) in connection with its property and affairs and in
connection with property within its control, may exercise any
and all powers that may be exercised by a natural person or a
private corporation or other private legal entity in connection
with similar property and affairs; and
(4) a joint venture that does not include an investor-owned
utility may elect to be deemed a municipal utility or a
cooperative association for purposes of chapter 216B or other
federal or state law regulating utility operations; and
(5) for a joint venture that includes an investor-owned
utility, the commission has authority over the activities,
services and rates of the joint venture, and may exercise that
authority, to the same extent the commission has authority over
the activities, services and rates of the investor-owned utility
itself.
(c) Any corporation, if formed, must comply with section
465.719, subdivisions 9, 10, 11, 12, 13, and 14. The term
"political subdivision," as it is used in section 465.719, shall
refer to the city council of a city.
Subd. 4. [RETAIL CUSTOMERS.] Unless the joint venture's
retail electric rates, as defined in section 216B.02,
subdivision 5, of a joint venture that does not include an
investor-owned utility, are approved by the governing body of
each municipal utility or municipal power agency and the board
of directors of each cooperative association that is party to
the joint venture, the retail electric customers of the joint
venture, if their number be more than 25, may elect to become
subject to electric rate regulation by the public utilities
commission as provided in chapter 216B. The election is subject
to and must be carried out according to the procedures in
section 216B.026 and, for these purposes, each retail electric
customer of the joint venture is deemed a member or stockholder
as referred to in section 216B.026.
Subd. 5. [POWERS.] (a) A joint venture under this section
has the powers, privileges, responsibilities, and duties of the
separate utilities entering into the joint venture as the joint
venture agreement may provide, including the powers under
paragraph (b), except that:
(1) with respect to retail electric utility services, a
joint venture shall not enlarge or extend the service territory
served by the joint venture by virtue of the authority granted
in sections 216B.44, 216B.45, and 216B.47;
(2) a joint venture may extend service to an existing
connected load of 2,000 kilowatts or more, pursuant to section
216B.42, when the load is outside of the assigned service area
of the joint venture, or of the electric utilities party to the
joint venture, only if the load is already being served by one
of the electric utilities party to the joint venture; and
(3) a privately owned utility, as defined in section
216B.02, may extend service to an existing connected load of
2,000 kilowatts or more, pursuant to section 216B.42, when the
load is located within the assigned service territory of the
joint venture, or of the electric utilities party to the joint
venture, only if the load is already being served by that
privately owned utility.
The limitations of clauses (1) to (3) do not apply if written
consent to the action is obtained from the electric utility
assigned to and serving the affected service territory or
connected load.
(b) Joint venture powers include, but are not limited to,
the authority to:
(1) finance, own, acquire, construct, and operate
facilities necessary to provide utility services to retail
customers of the joint venture, including generation,
transmission, and distribution facilities, and like facilities
used in other utility services;
(2) combine assigned service territories, in whole or in
part, upon notice to, hearing by, and approval of the public
utilities commission;
(3) serve customers in the utilities' service territories
or in the combined service territory;
(4) combine, share, or employ administrative, managerial,
operational, or other staff if combining or sharing will not
degrade safety, reliability, or customer service standards;
(5) provide for joint administrative functions, such as
meter reading and billings;
(6) purchase or sell utility services at wholesale for
resale to customers;
(7) provide conservation programs, other utility programs,
and public interest programs, such as cold weather shut-off
protection and conservation spending programs, as required by
law and rule; and
(8) participate as the parties deem necessary in providing
utility services with other municipal utilities, cooperative
utilities, investor-owned utilities, or other entities, public
or private.
(c) Notwithstanding any contrary provision within this
section, a joint venture formed under this section may engage in
wholesale utility services unless the municipal utility,
municipal power agency, cooperative association, or
investor-owned utility party to the joint venture is prohibited
under current law from conducting that activity; but, in any
case, the joint venture may provide wholesale services to a
municipal utility, a cooperative association, or an
investor-owned utility that is party to the joint venture.
(d) This subdivision does not limit the authority of a
joint venture to exercise rights of eminent domain for other
utility purposes to the same extent as is permitted of those
utilities party to the joint venture.
Subd. 6. [CONSTRUCTION.] (a) The powers conferred by this
section are in addition to the powers conferred by other law or
charter. A joint venture under this section, and a municipal
utility with respect to any joint venture under this section,
have the powers necessary to effect the intent and purpose of
this section, including, but not limited to, the expenditure of
public funds and the transfer of real or personal property in
accordance with the terms and conditions of the joint venture
and the joint venture agreement. This section is complete in
itself with respect to the formation and operation of a joint
venture under this section and with respect to a municipal
utility, a cooperative association, or an investor-owned utility
party to a joint venture related to their creation of and
dealings with the joint venture, without regard to other laws or
city charter provisions that do not specifically address or
refer to this section or a joint venture created under this
section.
(b) This section must not be construed to supersede or
modify:
(1) the power of a city council conferred by charter to
overrule or override any action of a governing body other than
the actions of the joint venture;
(2) chapter 216B;
(3) any referendum requirements applicable to the creation
of a new electric utility by a municipality under section
216B.46 or 216B.465; or
(4) any powers, privileges, or authority or any duties or
obligations of a municipal utility, municipal power agency, or
cooperative association acting as a separate legal entity
without reference to a joint venture created under this section.
Sec. 2. [EXCEPTION.]
Laws 1996, chapter 300, section 1, as amended by Laws 1997,
chapter 232, section 1, shall govern joint ventures created
under it and those joint ventures are not governed by section 1.
Sec. 3. [EFFECTIVE DATE.]
Sections 1 and 2 are effective the day following final
enactment.
ARTICLE 3
MISCELLANEOUS
Section 1. [216B.1611] [INTERCONNECTION OF ON-SITE
DISTRIBUTED GENERATION.]
Subdivision 1. [PURPOSE.] The purpose of this section is
to: (1) establish the terms and conditions that govern the
interconnection and parallel operation of on-site distributed
generation; (2) to provide cost savings and reliability benefits
to customers; (3) to establish technical requirements that will
promote the safe and reliable parallel operation of on-site
distributed generation resources; (4) to enhance both the
reliability of electric service and economic efficiency in the
production and consumption of electricity; and (5) to promote
the use of distributed resources in order to provide electric
system benefits during periods of capacity constraints.
Subd. 2. [DISTRIBUTED GENERATION; GENERIC PROCEEDING.] (a)
The commission shall initiate a proceeding within 30 days of the
effective date of this section, to establish, by order, generic
standards for utility tariffs for the interconnection and
parallel operation of distributed generation fueled by natural
gas or a renewable fuel, or another similarly clean fuel or
combination of fuels of no more than ten megawatts of
interconnected capacity. At a minimum, these tariff standards
must:
(1) to the extent possible, be consistent with industry and
other federal and state operational and safety standards;
(2) provide for the low-cost, safe, and standardized
interconnection of facilities;
(3) take into account differing system requirements and
hardware, as well as the overall demand load requirements of
individual utilities;
(4) allow for reasonable terms and conditions, consistent
with the cost and operating characteristics of the various
technologies, so that a utility can reasonably be assured of the
reliable, safe, and efficient operation of the interconnected
equipment; and
(5) establish: (i) a standard interconnection agreement
that sets forth the contractual conditions under which a company
and a customer agree that one or more facilities may be
interconnected with the company's utility system; and (ii) a
standard application for interconnection and parallel operation
with the utility system.
(b) The commission may develop financial incentives based
on a public utility's performance in encouraging residential and
small business customers to participate in on-site generation.
Subd. 3. [DISTRIBUTED GENERATION TARIFF.] Within 90 days
of the issuance of an order under subdivision 2:
(1) each public utility providing electric service at
retail shall file a distributed generation tariff consistent
with that order, for commission approval or approval with
modification; and
(2) each municipal utility and cooperative electric
association shall adopt a distributed generation tariff that
addresses the issues included in the commission's order.
Subd. 4. [REPORTING REQUIREMENTS.] (a) Each electric
utility shall maintain records concerning applications received
for interconnection and parallel operation of distributed
generation. The records must include the date each application
is received, documents generated in the course of processing
each application, correspondence regarding each application, and
the final disposition of each application.
(b) Every electric utility shall file with the commissioner
a distributed generation interconnection report for the
preceding calendar year that identifies each distributed
generation facility interconnected with the utility's
distribution system. The report must list the new distributed
generation facilities interconnected with the system since the
previous year's report, any distributed generation facilities no
longer interconnected with the utility's system since the
previous report, the capacity of each facility, and the feeder
or other point on the company's utility system where the
facility is connected. The annual report must also identify all
applications for interconnection received during the previous
one-year period, and the disposition of the applications.
Sec. 2. [216B.79] [PREVENTATIVE MAINTENANCE.]
The commission may order public utilities to make adequate
infrastructure investments and undertake sufficient preventative
maintenance with regard to generation, transmission, and
distribution facilities.
Sec. 3. [ALTERNATIVE AND RENEWABLE ENERGY SOURCE
DEVELOPMENT.]
The legislative electric energy task force shall evaluate
options and priorities related to energy source development of
resources derived from agricultural production and to energy
options available in rural parts of the state. These energy
sources include, but are not limited to:
(1) alternative diesel engine fuels derived from soybean
and other agricultural plant oils or animal fats;
(2) ethanol derived from grains or other agricultural
products or by-products;
(3) methane or other combustible gases derived from the
processing of plant or animal wastes;
(4) biomass fuels such as short-rotation woody or fibrous
agricultural crops produced for conversion to useful energy;
(5) use of corn and corn by-products as a fuel for electric
generation, including for cogeneration facilities; and
(6) further development of the solar, wind, and biomass
energy potential in the state.
ARTICLE 4
CONSUMER PROTECTION
Section 1. Minnesota Statutes 2000, section 216B.095, is
amended to read:
216B.095 [DISCONNECTION DURING COLD WEATHER.]
The commission shall amend its rules governing
disconnection of residential utility customers who are unable to
pay for utility service during cold weather to include the
following:
(1) coverage of customers whose household income is less
than 185 percent of the federal poverty level 50 percent of the
state median income;
(2) a requirement that a customer who pays the utility at
least ten percent of the customer's income or the full amount of
the utility bill, whichever is less, in a cold weather month
cannot be disconnected during that month. The customer's income
means the actual monthly income of the customer or the average
monthly income of the customer computed on an annual calendar
year, whichever is less, and does not include any amount
received for energy assistance;
(3) that the ten percent figure in clause (2) must be
prorated between energy providers proportionate to each
provider's share of the customer's total energy costs where the
customer receives service from more than one provider;
(4) that a customer's household income does not include any
amount received for energy assistance;
(5) verification of income by the local energy assistance
provider or the utility, unless the customer is automatically
eligible for protection against disconnection as a recipient of
any form of public assistance, including energy assistance, that
uses income eligibility in an amount at or below the income
eligibility in clause (1); and
(6) (5) a requirement that the customer receive, from the
local energy assistance provider or other entity, budget
counseling and referral referrals to energy assistance,
weatherization, conservation, or other programs likely to reduce
the customer's consumption of energy bills; and
(6) a requirement that customers who have demonstrated an
inability to pay on forms provided for that purpose by the
utility, and who make reasonably timely payments to the utility
under a payment plan that considers the financial resources of
the household, cannot be disconnected from utility service from
October 15 through April 15. A customer who is receiving energy
assistance is deemed to have demonstrated an inability to pay.
For the purpose of clause (2), the "customer's income" means the
actual monthly income of the customer except for a customer who
is normally employed only on a seasonal basis and whose annual
income is over 135 percent of the federal poverty level, in
which case the customer's income is the average monthly income
of the customer computed on an annual calendar year basis.
Sec. 2. Minnesota Statutes 2000, section 216B.097,
subdivision 1, is amended to read:
Subdivision 1. [APPLICATION; NOTICE TO RESIDENTIAL
CUSTOMER.] (a) A municipal utility or a cooperative electric
association must not disconnect the utility service of a
residential customer during the period between October 15 and
April 15 if the disconnection affects the primary heat source
for the residential unit when the following conditions are met:
(1) the disconnection would occur during the period between
October 15 and April 15;
(2) the customer has declared inability to pay on forms
provided by the utility. For the purposes of this clause, a
customer that is receiving energy assistance is deemed to have
demonstrated an inability to pay;
(3) (2) the household income of the customer is less than
185 percent of the federal poverty level, as documented by the
customer to the utility; and 50 percent of the state median
income;
(3) verification of income may be conducted by the local
energy assistance provider or the utility, unless the customer
is automatically eligible for protection against disconnection
as a recipient of any form of public assistance, including
energy assistance that uses income eligibility in an amount at
or below the income eligibility in clause (2);
(4) the customer's a customer whose account is current for
the billing period immediately prior to October 15 or the
customer has entered who, at any time, enters into a payment
schedule that considers the financial resources of the household
and is reasonably current with payments under the schedule; and
(5) the customer receives referrals to energy assistance
programs, weatherization, conservation, or other programs likely
to reduce the customer's energy bills.
(b) A municipal utility or a cooperative electric
association must, between August 15 and October 15 of each year,
notify all residential customers of the provisions of this
section.
Sec. 3. [216B.098] [RESIDENTIAL CUSTOMER PROTECTIONS.]
Subdivision 1. [APPLICABILITY.] The provisions of this
section apply to residential customers of public utilities,
municipal utilities, and cooperative electric associations.
Each municipal utility and cooperative electric association may
establish terms and conditions for the plans and agreements
required under subdivisions 2 and 3.
Subd. 2. [BUDGET BILLING PLANS.] A utility shall offer a
customer a budget billing plan for payment of charges for
service, including adequate notice to customers prior to
changing budget payment amounts. Municipal utilities having
3,000 or fewer customers are exempt from this requirement.
Municipal utilities having more than 3,000 customers shall
implement this requirement within two years of the effective
date of this chapter.
Subd. 3. [PAYMENT AGREEMENTS.] A utility shall offer a
payment agreement for the payment of arrears.
Subd. 4. [UNDERCHARGES.] A utility shall offer a payment
agreement to customers who have been undercharged if no culpable
conduct by the customer or resident of the customer's household
caused the undercharge. The agreement must cover a period equal
to the time over which the undercharge occurred or a different
time period that is mutually agreeable to the customer and the
utility. No interest or delinquency fee may be charged under
this agreement.
Subd. 5. [MEDICALLY NECESSARY EQUIPMENT.] A utility shall
reconnect or continue service to a customer's residence where a
medical emergency exists or where medical equipment requiring
electricity is necessary to sustain life is in use, provided
that the utility receives from a medical doctor written
certification, or initial certification by telephone and written
certification within five business days, that failure to
reconnect or continue service will impair or threaten the health
or safety of a resident of the customer's household. The
customer must enter into a payment agreement.
Subd. 6. [COMMISSION AUTHORITY.] In addition to any other
authority, the commission has the authority to resolve customer
complaints against a public utility, as defined in section
216B.02, subdivision 4, whether or not the complaint involves a
violation of this chapter. The commission may delegate this
authority to commission staff as it deems appropriate.
Sec. 4. Minnesota Statutes 2000, section 216B.16,
subdivision 15, is amended to read:
Subd. 15. [LOW-INCOME RATE PROGRAMS; REPORT.] (a) The
commission may consider ability to pay as a factor in setting
utility rates and may establish programs for low-income
residential ratepayers in order to ensure affordable, reliable,
and continuous service to low-income utility customers. The
commission shall order a pilot program for at least one
utility. In ordering pilot programs, the commission shall
consider the following:
(1) the potential for low-income programs to provide
savings to the utility for all collection costs including but
not limited to: costs of disconnecting and reconnecting
residential ratepayers' service, all activities related to the
utilities' attempt to collect past due bills, utility working
capital costs, and any other administrative costs related to
inability to pay programs and initiatives;
(2) the potential for leveraging federal low-income energy
dollars to the state; and
(3) the impact of energy costs as a percentage of the total
income of a low-income residential customer.
(b) In determining the structure of the pilot utility
program, the commission shall:
(1) consult with advocates for and representatives of
low-income utility customers, administrators of energy
assistance and conservation programs, and utility
representatives;
(2) coordinate eligibility for the program with the state
and federal energy assistance program and low-income residential
energy programs, including weatherization programs; and
(3) evaluate comprehensive low-income programs offered by
utilities in other states. The purpose of the low-income
programs is to lower the percentage of income that low-income
households devote to energy bills, to increase customer
payments, and to lower the utility costs associated with
customer account collection activities. In ordering low-income
programs, the commission may require public utilities to file
program evaluations, including the coordination of other
available low-income bill payment and conservation resources and
the effect of the program on:
(1) reducing the percentage of income that participating
households devote to energy bills;
(2) service disconnections; and
(3) customer payment behavior, utility collection costs,
arrearages, and bad debt.
(c) The commission shall implement at least one pilot
project by January 1, 1995, and shall allow a utility required
to implement a pilot project to recover the net costs of the
project in the utility's rates.
(d) The commission, in conjunction with the commissioner of
the department of public service and the commissioner of
economic security, shall review low-income rate programs and
shall report to the legislature by January 1, 1998. The report
must include:
(1) the increase in federal energy assistance money
leveraged by the state as a result of this program;
(2) the effect of the program on low-income customer's
ability to pay energy costs;
(3) the effect of the program on utility customer bad debt
and arrearages;
(4) the effect of the program on the costs and numbers of
utility disconnections and reconnections and other costs
incurred by the utility in association with inability to pay
programs;
(5) the ability of the utility to recover the costs of the
low-income program without a general rate change;
(6) how other ratepayers have been affected by this
program;
(7) recommendations for continuing, eliminating, or
expanding the low-income pilot program; and
(8) how general revenue funds may be utilized in
conjunction with low-income programs.
ARTICLE 5
INCENTIVE PAYMENTS
Section 1. Minnesota Statutes 2000, section 216C.41,
subdivision 3, is amended to read:
Subd. 3. [ELIGIBILITY WINDOW.] Payments may be made under
this section only for electricity generated:
(1) from a qualified hydroelectric facility that is
operational and generating electricity before December 31,
2001 2002; or
(2) from a qualified wind energy conversion facility that
is operational and generating electricity before January 1, 2005.
Sec. 2. Minnesota Statutes 2000, section 216C.41,
subdivision 5, is amended to read:
Subd. 5. [AMOUNT OF PAYMENT.] (a) An incentive payment is
based on the number of kilowatt hours of electricity generated.
The amount of the payment is 1.5 cents per kilowatt hour. For
electricity generated by qualified wind energy conversion
facilities, the incentive payment under this section is limited
to no more than 100 megawatts of nameplate capacity. During any
period in which qualifying claims for incentive payments exceed
100 megawatts of nameplate capacity, the payments must be made
to producers in the order in which the production capacity was
brought into production.
(b) Beginning January 1, 2002, the total size of a wind
energy conversion system under this section must be determined
according to this paragraph. Unless the systems are
interconnected with different distribution systems, the
nameplate capacity of one wind energy conversion system must be
combined with the nameplate capacity of any other wind energy
conversion system that is:
(1) located within five miles of the wind energy conversion
system;
(2) constructed within the same calendar year as the wind
energy conversion system; and
(3) under common ownership.
In the case of a dispute, the commissioner of commerce shall
determine the total size of the system, and shall draw all
reasonable inferences in favor of combining the systems.
(c) In making a determination under paragraph (b), the
commissioner of commerce may determine that two wind energy
conversion systems are under common ownership when the
underlying ownership structure contains similar persons or
entities, even if the ownership shares differ between the two
systems. Wind energy conversion systems are not under common
ownership solely because the same person or entity provided
equity financing for the systems.
Sec. 3. Minnesota Statutes 2000, section 216C.41, is
amended by adding a subdivision to read:
Subd. 6. [OWNERSHIP; FINANCING; CURE.] (a) For the
purposes of subdivision 1, paragraph (c), clause (2), a wind
energy conversion facility qualifies if it is owned at least 51
percent by one or more of any combination of the entities listed
in that clause.
(b) A subsequent owner of a qualified facility may continue
to receive the incentive payment for the duration of the
original payment period if the subsequent owner qualifies for
the incentive under subdivision 1.
(c) Nothing in this section may be construed to deny
incentive payment to an otherwise qualified facility that has
obtained debt or equity financing for construction or operation
as long as the ownership requirements of subdivision 1 and this
subdivision are met. If, during the incentive payment period
for a qualified facility, the owner of the facility is in
default of a lending agreement and the lender takes possession
of and operates the facility and makes reasonable efforts to
transfer ownership of the facility to an entity other than the
lender, the lender may continue to receive the incentive payment
for electricity generated and sold by the facility for a period
not to exceed 18 months. A lender who takes possession of a
facility shall notify the commissioner immediately on taking
possession and, at least quarterly, document efforts to transfer
ownership of the facility.
(d) If, during the incentive payment period, a qualified
facility loses the right to receive the incentive because of
changes in ownership, the facility may regain the right to
receive the incentive upon cure of the ownership structure that
resulted in the loss of eligibility and may reapply for the
incentive, but in no case may the payment period be extended
beyond the original ten-year limit.
(e) A subsequent or requalifying owner under paragraph (b)
or (d) retains the facility's original priority order for
incentive payments as long as the ownership structure
requalifies within two years from the date the facility became
unqualified or two years from the date a lender takes possession.
Sec. 4. [EFFECTIVE DATE.]
This article is effective the day following final enactment.
ARTICLE 6
DISTRIBUTION RELIABILITY
Section 1. [216B.81] [STANDARDS FOR DISTRIBUTION
UTILITIES.]
Subdivision 1. [STANDARDS.] (a) The commission and each
cooperative electric association and municipal utility shall
adopt standards for safety, reliability, and service quality for
distribution utilities. Standards for cooperative electric
associations and municipal utilities should be as consistent as
possible with the commission standards.
(b) Reliability standards must be based on the system
average interruption frequency index, system average
interruption duration index, and customer average interruption
duration index measurement indices. Service quality standards
must specify, if technically and administratively feasible:
(1) average call center response time;
(2) customer disconnection rate;
(3) meter-reading frequency;
(4) complaint resolution response time;
(5) service extension request response time;
(6) recording of service and circuit interrupter data;
(7) summary reporting;
(8) historical reliability performance reporting;
(9) notices of interruptions of bulk power supply
facilities and other interruptions of power; and
(10) customer complaints.
(c) Minimum performance standards developed under this
section must treat similarly situated distribution systems
similarly and recognize differing characteristics of system
design and hardware.
(d) Electric distribution utilities shall comply with all
applicable governmental and industry standards required for the
safety, design, construction, and operation of electric
distribution facilities, including section 326.243.
Subd. 2. [DEFINITIONS.] For the purpose of this section,
the terms defined in this subdivision have the meanings given
them.
(a) The "system average interruption frequency index" is
the average number of interruptions per customer per year. It
is determined by dividing the total annual number of customer
interruptions by the average number of customers served during
the year.
(b) The "system average interruption duration index" is the
average customer-minutes of interruption per customer. It is
determined by dividing the annual sum of customer-minutes of
interruption by the average number of customers served during
the year.
(c) The "customer average interruption duration index" is
the average customer-minutes of interruption per customer
interruption. It approximates the average length of time
required to complete service restoration. It is determined by
dividing the annual sum of all customer-minutes of interruption
durations by the annual number of customer interruptions.
Sec. 2. [COST BENEFIT ANALYSIS.]
The commissioner of commerce shall provide an analysis of
the costs and benefits to consumers and utilities of the
provisions of section 216B.81, including any recommended changes
to those provisions, to the chairs of the house of
representatives and senate policy and finance committees with
jurisdiction over electric utility issues by February 1, 2003.
Sec. 3. [EFFECTIVE DATE.]
Section 1 is effective July 1, 2001. Section 2 is
effective the day following final enactment.
ARTICLE 7
SITING AND ROUTING OF
POWER PLANTS AND TRANSMISSION LINES
Section 1. Minnesota Statutes 2000, section 116C.52,
subdivision 4, is amended to read:
Subd. 4. [HIGH VOLTAGE TRANSMISSION LINE.] "High voltage
transmission line" means a conductor of electric energy and
associated facilities designed for and capable of operation at a
nominal voltage of 200 100 kilovolts or more, except that the
board, by rule, may exempt lines pursuant to section 116C.57,
subdivision 5.
Sec. 2. Minnesota Statutes 2000, section 116C.52,
subdivision 10, is amended to read:
Subd. 10. [UTILITY.] "Utility" shall mean any entity
engaged or intending to engage in this state in the generation,
transmission or distribution of electric energy including, but
not limited to, a private investor owned utility, cooperatively
owned utility, and a public or municipally owned utility.
Sec. 3. Minnesota Statutes 2000, section 116C.53,
subdivision 2, is amended to read:
Subd. 2. [JURISDICTION.] The board is hereby given the
authority to provide for site and route selection for large
electric power facilities. The board shall issue permits for
large electric power facilities in a timely fashion. When the
public utilities commission has determined the need for the
project under section 216B.243 or 216B.2425, questions of need,
including size, type, and timing; alternative system
configurations; and voltage are not within the board's siting
and routing authority and must not be included in the scope of
environmental review conducted under sections 116C.51 to 116C.69.
Sec. 4. Minnesota Statutes 2000, section 116C.53,
subdivision 3, is amended to read:
Subd. 3. [INTERSTATE ROUTES.] If a route is proposed in
two or more states, the board shall attempt to reach agreement
with affected states on the entry and exit points prior
to authorizing the construction of the designating a route. The
board, in discharge of its duties pursuant to sections 116C.51
to 116C.69 may make joint investigations, hold joint hearings
within or without the state, and issue joint or concurrent
orders in conjunction or concurrence with any official or agency
of any state or of the United States. The board may negotiate
and enter into any agreements or compacts with agencies of other
states, pursuant to any consent of Congress, for cooperative
efforts in certifying the construction, operation, and
maintenance of large electric power facilities in accord with
the purposes of sections 116C.51 to 116C.69 and for the
enforcement of the respective state laws regarding such
facilities.
Sec. 5. Minnesota Statutes 2000, section 116C.57,
subdivision 1, is amended to read:
Subdivision 1. [DESIGNATION OF SITES SUITABLE FOR SPECIFIC
FACILITIES; REPORTS SITE PERMIT.] A utility must apply to the
board in a form and manner prescribed by the board for
designation of a specific site for a specific size and type of
facility. The application shall contain at least two proposed
sites. In the event a utility proposes a site not included in
the board's inventory of study areas, the utility shall specify
the reasons for the proposal and shall make an evaluation of the
proposed site based upon the planning policies, criteria and
standards specified in the inventory. Pursuant to sections
116C.57 to 116C.60, the board shall study and evaluate any site
proposed by a utility and any other site the board deems
necessary which was proposed in a manner consistent with rules
adopted by the board concerning the form, content, and
timeliness of proposals for alternate sites. No site
designation shall be made in violation of the site selection
standards established in section 116C.55. The board shall
indicate the reasons for any refusal and indicate changes in
size or type of facility necessary to allow site designation.
Within a year after the board's acceptance of a utility's
application, the board shall decide in accordance with the
criteria specified in section 116C.55, subdivision 2, the
responsibilities, procedures and considerations specified in
section 116C.57, subdivision 4, and the considerations in
chapter 116D which proposed site is to be designated. The board
may extend for just cause the time limitation for its decision
for a period not to exceed six months. When the board
designates a site, it shall issue a certificate of site
compatibility to the utility with any appropriate conditions.
The board shall publish a notice of its decision in the State
Register within 30 days of site designation. No large electric
power generating plant shall be constructed except on a site
designated by the board. No person may construct a large
electric generating plant without a site permit from the board.
A large electric generating plant may be constructed only on a
site approved by the board. The board must incorporate into one
proceeding the route selection for a high voltage transmission
line that is directly associated with and necessary to
interconnect the large electric generating plant to the
transmission system and whose need is certified as part of the
generating plant project by the public utilities commission.
Sec. 6. Minnesota Statutes 2000, section 116C.57,
subdivision 2, is amended to read:
Subd. 2. [DESIGNATION OF ROUTES; PROCEDURE ROUTE
PERMIT.] A utility shall apply to the board in a form and manner
prescribed by the board for a permit for the construction of a
high voltage transmission line. The application shall contain
at least two proposed routes. Pursuant to sections 116C.57 to
116C.60, the board shall study, and evaluate the type, design,
routing, right-of-way preparation and facility construction of
any route proposed in a utility's application and any other
route the board deems necessary which was proposed in a manner
consistent with rules adopted by the board concerning the form,
content, and timeliness of proposals for alternate routes
provided, however, that the board shall identify the alternative
routes prior to the commencement of public hearings thereon
pursuant to section 116C.58. Within one year after the board's
acceptance of a utility's application, the board shall decide in
accordance with the criteria and standards specified in section
116C.55, subdivision 2, and the considerations specified in
section 116C.57, subdivision 4, which proposed route is to be
designated. The board may extend for just cause the time
limitation for its decision for a period not to exceed 90 days.
When the board designates a route, it shall issue a permit for
the construction of a high voltage transmission line specifying
the type, design, routing, right-of-way preparation and facility
construction it deems necessary and with any other appropriate
conditions. The board may order the construction of high
voltage transmission line facilities which are capable of
expansion in transmission capacity through multiple circuiting
or design modifications. The board shall publish a notice of
its decision in the state register within 30 days of issuance of
the permit. No high voltage transmission line shall be
constructed except on a route designated by the board, unless it
was exempted pursuant to subdivision 5. No person may construct
a high voltage transmission line without a route permit from the
board. A high voltage transmission line may be constructed only
along a route approved by the board.
Sec. 7. Minnesota Statutes 2000, section 116C.57, is
amended by adding a subdivision to read:
Subd. 2a. [APPLICATION.] Any person seeking to construct a
large electric power generating plant or a high voltage
transmission line must apply to the board for a site or route
permit. The application shall contain such information as the
board 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 line. The chair of the board
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. 8. Minnesota Statutes 2000, section 116C.57, is
amended by adding a subdivision to read:
Subd. 2b. [NOTICE OF APPLICATION.] Within 15 days after
submission of an application to the board, the applicant shall
publish notice of the application in a legal newspaper of
general circulation in each county in which the site or route is
proposed and send a copy of the application by certified mail to
any regional development commission, county, incorporated
municipality, and township in which any part of the site or
route is proposed. Within the same 15 days, the applicant shall
also send a notice of the submission of the application and
description of the proposed project to each owner whose property
is on or adjacent to any of the proposed sites for the power
plant or along any of the proposed routes for the transmission
line. The notice shall identify a location where a copy of the
application can be reviewed. For the purpose of giving mailed
notice under this subdivision, owners shall be those shown on
the records of the county auditor or, in any county where tax
statements are mailed by the county treasurer, on the records of
the county treasurer; but other appropriate records may be used
for this purpose. The failure to give mailed notice to a
property owner, or defects in the notice, shall not invalidate
the proceedings, provided a bona fide attempt to comply with
this subdivision has been made. Within the same 15 days, the
applicant shall also send the same notice of the submission of
the application and description of the proposed project to those
persons who have requested to be placed on a list maintained by
the board for receiving notice of proposed large electric
generating power plants and high voltage transmission lines.
Sec. 9. Minnesota Statutes 2000, section 116C.57, is
amended by adding a subdivision to read:
Subd. 2c. [ENVIRONMENTAL REVIEW.] The board shall prepare
an environmental impact statement on each proposed large
electric generating plant or high voltage transmission line for
which a complete application has been submitted. For any
project that has obtained a certificate of need from the public
utilities commission, the board shall not consider whether or
not the project is needed. No other state environmental review
documents shall be required. The board shall study and evaluate
any site or route proposed by an applicant and any other site or
route the board deems necessary that was proposed in a manner
consistent with rules adopted by the board concerning the form,
content, and timeliness of proposals for alternate sites or
routes.
Sec. 10. Minnesota Statutes 2000, section 116C.57, is
amended by adding a subdivision to read:
Subd. 2d. [PUBLIC HEARING.] The board shall hold a public
hearing on an application for a site permit for a large electric
power generating plant or a route permit for a high voltage
transmission line. All hearings held for designating a site or
route shall be conducted by an administrative law judge from the
office of administrative hearings pursuant to the contested case
procedures of chapter 14. Notice of the hearing shall be given
by the board at least ten days in advance but no earlier than 45
days prior to the commencement of the hearing. Notice shall be
by publication in a legal newspaper of general circulation in
the county in which the public hearing is to be held and by
certified mail to chief executives of the regional development
commissions, counties, organized towns, townships, and the
incorporated municipalities in which a site or route is
proposed. Any person may appear at the hearings and offer
testimony and exhibits without the necessity of intervening as a
formal party to the proceedings. The administrative law judge
may allow any person to ask questions of other witnesses. The
administrative law judge shall hold a portion of the hearing in
the area where the power plant or transmission line is proposed
to be located.
Sec. 11. Minnesota Statutes 2000, section 116C.57,
subdivision 4, is amended to read:
Subd. 4. [CONSIDERATIONS IN DESIGNATING SITES AND ROUTES.]
The board's site and route permit determinations must be guided
by the state's goals to conserve resources, minimize
environmental impacts, minimize human settlement and other land
use conflicts, and ensure the state's electric energy security
through efficient, cost-effective power supply and electric
transmission infrastructure. To facilitate the study, research,
evaluation and designation of sites and routes, the board shall
be guided by, but not limited to, the
following responsibilities, procedures, and considerations:
(1) Evaluation of research and investigations relating to
the effects on land, water and air resources of large electric
power generating plants and high voltage transmission line
routes lines and the effects of water and air discharges and
electric and magnetic fields resulting from such facilities on
public health and welfare, vegetation, animals, materials and
aesthetic values, including base line studies, predictive
modeling, and monitoring of the water and air mass at proposed
and operating sites and routes, evaluation of new or improved
methods for minimizing adverse impacts of water and air
discharges and other matters pertaining to the effects of power
plants on the water and air environment;
(2) Environmental evaluation of sites and routes proposed
for future development and expansion and their relationship to
the land, water, air and human resources of the state;
(3) Evaluation of the effects of new electric power
generation and transmission technologies and systems related to
power plants designed to minimize adverse environmental effects;
(4) Evaluation of the potential for beneficial uses of
waste energy from proposed large electric power generating
plants;
(5) Analysis of the direct and indirect economic impact of
proposed sites and routes including, but not limited to,
productive agricultural land lost or impaired;
(6) Evaluation of adverse direct and indirect environmental
effects which that cannot be avoided should the proposed site
and route be accepted;
(7) Evaluation of alternatives to the applicant's proposed
site or route proposed pursuant to subdivisions 1 and 2;
(8) Evaluation of potential routes which that would use or
parallel existing railroad and highway rights-of-way;
(9) Evaluation of governmental survey lines and other
natural division lines of agricultural land so as to minimize
interference with agricultural operations;
(10) Evaluation of the future needs for additional high
voltage transmission lines in the same general area as any
proposed route, and the advisability of ordering the
construction of structures capable of expansion in transmission
capacity through multiple circuiting or design modifications;
(11) Evaluation of irreversible and irretrievable
commitments of resources should the proposed site or route be
approved; and
(12) Where When appropriate, consideration of problems
raised by other state and federal agencies and local entities.
(13) If the board's rules are substantially similar to
existing rules and regulations of a federal agency to which the
utility in the state is subject, the federal rules and
regulations shall must be applied by the board.
(14) No site or route shall be designated which violates
state agency rules.
Sec. 12. Minnesota Statutes 2000, section 116C.57, is
amended by adding a subdivision to read:
Subd. 7. [TIMING.] The board shall make a final decision
on an application within 60 days after receipt of the report of
the administrative law judge. A final decision on the request
for a site permit or route permit shall be made within one year
after the chair's determination that an application is
complete. The board may extend this time limit for up to three
months for just cause or upon agreement of the applicant.
Sec. 13. Minnesota Statutes 2000, section 116C.57, is
amended by adding a subdivision to read:
Subd. 8. [FINAL DECISION.] (a) No site permit shall be
issued in violation of the site selection standards and criteria
established in this section and in rules adopted by the board.
When the board designates a site, it shall issue a site permit
to the applicant with any appropriate conditions. The board
shall publish a notice of its decision in the State Register
within 30 days of issuance of the site permit.
(b) No route permit shall be issued in violation of the
route selection standards and criteria established in this
section and in rules adopted by the board. When the board
designates a route, it shall issue a permit for the construction
of a high voltage transmission line specifying the design,
routing, right-of-way preparation, and facility construction it
deems necessary, and with any other appropriate conditions. The
board may order the construction of high voltage transmission
line facilities that are capable of expansion in transmission
capacity through multiple circuiting or design modifications.
The board shall publish a notice of its decision in the State
Register within 30 days of issuance of the permit.
Sec. 14. [116C.575] [ALTERNATIVE REVIEW OF APPLICATIONS.]
Subdivision 1. [ALTERNATIVE REVIEW.] An applicant who
seeks a site permit or route permit for one of the projects
identified in this section shall have the option of following
the procedures in this section rather than the procedures in
section 116C.57. The applicant shall notify the chair at the
time the application is submitted which procedure the applicant
chooses to follow.
Subd. 2. [APPLICABLE PROJECTS.] The requirements and
procedures in this section apply to the following projects:
(1) large electric power generating plants with a capacity
of less than 80 megawatts;
(2) large electric power generating plants that are fueled
by natural gas;
(3) high voltage transmission lines of between 100 and 200
kilovolts;
(4) high voltage transmission lines in excess of 200
kilovolts and less than five miles in length in Minnesota;
(5) high voltage transmission lines in excess of 200
kilovolts if at least 80 percent of the distance of the line in
Minnesota will be located along existing high voltage
transmission line right-of-way;
(6) a high voltage transmission line service extension to a
single customer between 200 and 300 kilovolts and less than ten
miles in length; and
(7) 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.
Subd. 3. [APPLICATION.] The applicant for a site or route
permit for any of the projects listed in subdivision 2 who
chooses to follow these procedures shall submit information as
the board may require, but the applicant shall not be required
to propose a second site or route for the project. The
applicant shall identify in the application any other sites or
routes that were rejected by the applicant and the board may
identify additional sites or routes to consider during the
processing of the application. The chair of the board shall
determine whether an application is complete and advise the
applicant of any deficiencies.
Subd. 4. [NOTICE OF APPLICATION.] Upon submission of an
application under this section, the applicant shall provide the
same notice as required by section 116C.57, subdivision 2b.
Subd. 5. [ENVIRONMENTAL REVIEW.] For the projects
identified in subdivision 2 and following these procedures, the
board shall prepare an environmental assessment. The
environmental assessment shall contain information on the human
and environmental impacts of the proposed project and other
sites or routes identified by the board and shall address
mitigating measures for all of the sites or routes considered.
The environmental assessment shall be the only state
environmental review document required to be prepared on the
project.
Subd. 6. [PUBLIC HEARING.] The board shall hold a public
hearing in the area where the facility is proposed to be
located. The board shall give notice of the public hearing in
the same manner as notice under section 116C.57, subdivision
2d. The board shall conduct the public hearing under procedures
established by the board. The applicant shall be present at the
hearing to present evidence and to answer questions. The board
shall provide opportunity at the public hearing for any person
to present comments and to ask questions of the applicant and
board staff. The board shall also afford interested persons an
opportunity to submit written comments into the record.
Subd. 7. [TIMING.] The board shall make a final decision
on an application within 60 days after completion of the public
hearing. A final decision on the request for a site permit or
route permit under this section shall be made within six months
after the chair's determination that an application is
complete. The board may extend this time limit for up to three
months for just cause or upon agreement of the applicant.
Subd. 8. [CONSIDERATIONS.] The considerations in section
116C.57, subdivision 4, shall apply to any projects subject to
this section.
Subd. 9. [FINAL DECISION.] (a) No site permit shall be
issued in violation of the site selection standards and criteria
established in this section and in rules adopted by the board.
When the board designates a site, it shall issue a site permit
to the applicant with any appropriate conditions. The board
shall publish a notice of its decision in the State Register
within 30 days of issuance of the site permit.
(b) No route designation shall be made in violation of the
route selection standards and criteria established in this
section and in rules adopted by the board. When the board
designates a route, it shall issue a permit for the construction
of a high voltage transmission line specifying the design,
routing, right-of-way preparation, and facility construction it
deems necessary and with any other appropriate conditions. The
board may order the construction of high voltage transmission
line facilities that are capable of expansion in transmission
capacity through multiple circuiting or design modifications.
The board shall publish a notice of its decision in the State
Register within 30 days of issuance of the permit.
Sec. 15. [116C.576] [LOCAL REVIEW OF APPLICATIONS.]
Subdivision 1. [LOCAL REVIEW.] (a) Notwithstanding the
requirements of sections 116C.57 and 116C.575, an applicant who
seeks a site or route permit for one of the projects identified
in this section shall have the option of applying to those local
units of government that have jurisdiction over the site or
route for approval to build the project. If local approval is
granted, a site or route permit is not required from the board.
If the applicant files an application with the board, the
applicant shall be deemed to have waived its right to seek local
approval of the project.
(b) A local unit of government with jurisdiction over a
project identified in this section to whom an applicant has
applied for approval to build the project may request the board
to assume jurisdiction and make a decision on a site or route
permit under the applicable provisions of sections 116C.52 to
116C.69. A local unit of government must file the request with
the board within 60 days after an application for the project
has been filed with any one local unit of government. If one of
the local units of government with jurisdiction over the project
requests the board to assume jurisdiction, jurisdiction over the
project transfers to the board. If the local units of
government maintain jurisdiction over the project, the board
shall select the appropriate local unit of government to be the
responsible governmental unit to conduct environmental review of
the project.
Subd. 2. [APPLICABLE PROJECTS.] Applicants may seek
approval from local units of government to construct the
following projects:
(1) large electric power generating plants 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.
Subd. 3. [NOTICE OF APPLICATION.] Within ten days of
submission of an application to a local unit of government for
approval of an eligible project, the applicant shall notify the
board that the applicant has elected to seek local approval of
the proposed project.
Sec. 16. [116C.577] [EMERGENCY PERMIT.]
(a) Any utility whose electric power system requires the
immediate construction of a large electric power generating
plant or high voltage transmission line due to a major
unforeseen event may apply to the board for an emergency permit
after providing notice in writing to the public utilities
commission of the major unforeseen event and the need for
immediate construction. The permit must be issued in a timely
manner, no later than 195 days after the board's acceptance of
the application and upon a finding by the board that (1) a
demonstrable emergency exists, (2) the emergency requires
immediate construction, and (3) adherence to the procedures and
time schedules specified in section 116C.57 would jeopardize the
utility's electric power system or would jeopardize the
utility's ability to meet the electric needs of its customers in
an orderly and timely manner.
(b) A public hearing to determine if an emergency exists
must be held within 90 days of the application. The board,
after notice and hearing, shall adopt rules specifying the
criteria for emergency certification.
Sec. 17. Minnesota Statutes 2000, section 116C.58, is
amended to read:
116C.58 [PUBLIC HEARINGS; NOTICE ANNUAL HEARING.]
The board shall hold an annual public hearing at a time and
place prescribed by rule in order to afford interested persons
an opportunity to be heard regarding its inventory of study
areas and any other aspects of the board's activities and duties
or policies specified in sections 116C.51 to 116C.69. The board
shall hold at least one public hearing in each county where a
site or route is being considered for designation pursuant to
section 116C.57. Notice and agenda of public hearings and
public meetings of the board held in each county shall be given
by the board at least ten days in advance but no earlier than 45
days prior to such hearings or meetings. Notice shall be by
publication in a legal newspaper of general circulation in the
county in which the public hearing or public meeting is to be
held and by certified mailed notice to chief executives of the
regional development commissions, counties, organized towns and
the incorporated municipalities in which a site or route is
proposed. All hearings held for designating a site or route or
for exempting a route shall be conducted by an administrative
law judge from the office of administrative hearings pursuant to
the contested case procedures of chapter 14. Any person may
appear at the hearings and present testimony and exhibits and
may question witnesses without the necessity of intervening as a
formal party to the proceedings any matters relating to the
siting of large electric generating power plants and routing of
high voltage transmission lines. At the meeting, the board
shall advise the public of the permits issued by the board in
the past year. The board shall provide at least ten days but no
more than 45 days' notice of the annual meeting by mailing
notice to those persons who have requested notice and by
publication in the EQB Monitor.
Sec. 18. Minnesota Statutes 2000, section 116C.59,
subdivision 1, is amended to read:
Subdivision 1. [ADVISORY TASK FORCE.] The board may
appoint one or more advisory task forces to assist it in
carrying out its duties. Task forces appointed to evaluate
sites or routes considered for designation shall be comprised of
as many persons as may be designated by the board, but at least
one representative from each of the following: Regional
development commissions, counties and municipal corporations and
one town board member from each county in which a site or route
is proposed to be located. No officer, agent, or employee of a
utility shall serve on an advisory task force. Reimbursement
for expenses incurred shall be made pursuant to the rules
governing state employees. The task forces expire as provided
in section 15.059, subdivision 6. At the time the task force is
appointed, the board shall specify the charge to the task
force. The task force shall expire upon completion of its
charge, upon designation by the board of alternative sites or
routes to be included in the environmental impact statement, or
upon the specific date identified by the board in the charge,
whichever occurs first.
Sec. 19. Minnesota Statutes 2000, section 116C.59,
subdivision 4, is amended to read:
Subd. 4. [SCIENTIFIC ADVISORY TASK FORCE.] The board may
appoint one or more advisory task forces composed of technical
and scientific experts to conduct research and make
recommendations concerning generic issues such as health and
safety, underground routes, double circuiting and long-range
route and site planning. Reimbursement for expenses incurred
shall be made pursuant to the rules governing reimbursement of
state employees. The task forces expire as provided in section
15.059, subdivision 6. The time allowed for completion of a
specific site or route procedure may not be extended to await
the outcome of these generic investigations.
Sec. 20. Minnesota Statutes 2000, section 116C.60, is
amended to read:
116C.60 [PUBLIC MEETINGS; TRANSCRIPT OF PROCEEDINGS;
WRITTEN RECORDS.]
Meetings of the board, including hearings, shall be open to
the public. Minutes shall be kept of board meetings and a
complete record of public hearings shall be kept. All books,
records, files, and correspondence of the board shall be
available for public inspection at any reasonable time. The
council board shall also be subject to chapter 13D.
Sec. 21. Minnesota Statutes 2000, section 116C.61,
subdivision 1, is amended to read:
Subdivision 1. [REGIONAL, COUNTY AND LOCAL ORDINANCES,
RULES, REGULATIONS; PRIMARY RESPONSIBILITY AND REGULATION OF
SITE DESIGNATION, IMPROVEMENT AND USE.] To assure the paramount
and controlling effect of the provisions herein over other state
agencies, regional, county and local governments, and special
purpose government districts, the issuance of a certificate of
site permit compatibility or transmission line
construction route permit and subsequent purchase and use of
such site or route locations for large electric power generating
plant and high voltage transmission line purposes shall be the
sole site or route approval required to be obtained by the
utility. Such certificate or permit shall supersede and preempt
all zoning, building, or land use rules, regulations, or
ordinances promulgated by regional, county, local and special
purpose government.
Sec. 22. Minnesota Statutes 2000, section 116C.61,
subdivision 3, is amended to read:
Subd. 3. [STATE AGENCY PARTICIPATION.] State agencies
authorized to issue permits required for construction or
operation of large electric power generating plants or high
voltage transmission lines shall participate in and present the
position of the agency during routing and siting at public
hearings and all other activities of the board on specific site
or route designations and design considerations of the board,
which position and shall clearly state whether the site or route
being considered for designation or permit and other design
matters under consideration for approval for a certain size and
type of facility will be in compliance with state agency
standards, rules or policies.
Sec. 23. Minnesota Statutes 2000, section 116C.62, is
amended to read:
116C.62 [IMPROVEMENT OF SITES AND ROUTES.]
Utilities which that have acquired a site or route in
accordance with sections 116C.51 to 116C.69 may proceed to
construct or improve the site or route for the intended purposes
at any time, subject to section 116C.61, subdivision 2, provided
that if the construction and improvement commences more than has
not commenced within four years after a certificate or permit
for the site or route has been issued, then the utility must
certify to the board that the site or route continues to meet
the conditions upon which the certificate of site compatibility
or transmission line construction or route permit was issued.
Sec. 24. Minnesota Statutes 2000, section 116C.64, is
amended to read:
116C.64 [FAILURE TO ACT.]
If the board fails to act within the times specified in
section 116C.57, the applicant or any affected utility person
may seek an order of the district court requiring the board to
designate or refuse to designate a site or route.
Sec. 25. Minnesota Statutes 2000, section 116C.645, is
amended to read:
116C.645 [REVOCATION OR SUSPENSION.]
A site certificate or construction route permit may be
revoked or suspended by the board after adequate notice of the
alleged grounds for revocation or suspension and a full and fair
hearing in which the affected utility has an opportunity to
confront any witness and respond to any evidence against it and
to present rebuttal or mitigating evidence upon a finding by the
board of:
(1) Any false statement knowingly made in the application
or in accompanying statements or studies required of the
applicant, if a true statement would have warranted a change in
the board's findings;
(2) Failure to comply with material conditions of the site
certificate or construction permit, or failure to maintain
health and safety standards; or
(3) Any material violation of the provisions of sections
116C.51 to 116C.69, any rule promulgated pursuant thereto, or
any order of the board.
Sec. 26. Minnesota Statutes 2000, section 116C.65, is
amended to read:
116C.65 [JUDICIAL REVIEW.]
Any utility applicant, party or person aggrieved by the
issuance of a certificate site or route permit or emergency
certificate of site compatibility or transmission line
construction permit from the board or a certification of
continuing suitability filed by a utility with the board or by a
final order in accordance with any rules promulgated by the
board, may appeal to the court of appeals in accordance with
chapter 14. The appeal shall be filed within 60 30 days after
the publication in the State Register of notice of the issuance
of the certificate or permit by the board or certification filed
with the board or the filing of any final order by the board.
Sec. 27. Minnesota Statutes 2000, section 116C.66, is
amended to read:
116C.66 [RULES.]
The board, in order to give effect to the purposes of
sections 116C.51 to 116C.69, shall prior to July 1, 1978, may
adopt rules consistent with sections 116C.51 to 116C.69,
including promulgation of site and route designation criteria,
the description of the information to be furnished by the
utilities, establishment of minimum guidelines for public
participation in the development, revision, and enforcement of
any rule, plan or program established by the board, procedures
for the revocation or suspension of a construction site or route
permit or a certificate of site compatibility, and the procedure
and timeliness for proposing alternative routes and sites, and
route exemption criteria and procedures. No rule adopted by the
board shall grant priority to state-owned wildlife management
areas over agricultural lands in the designation of route
avoidance areas. The provisions of chapter 14 shall apply to
the appeal of rules adopted by the board to the same extent as
it applies to review of rules adopted by any other agency of
state government.
The chief administrative law judge shall, prior to January
1, 1978, adopt procedural rules for public hearings relating to
the site and route designation permit process and to the route
exemption process. The rules shall attempt to maximize citizen
participation in these processes consistent with the time limits
for board decision established in sections 116C.57, subdivision
8, and 116C.575, subdivision 7.
Sec. 28. Minnesota Statutes 2000, section 116C.69, is
amended to read:
116C.69 [BIENNIAL REPORT; APPLICATION FEES; APPROPRIATION;
FUNDING.]
Subdivision 1. [BIENNIAL REPORT.] Before November 15 of
each even-numbered year the board shall prepare and submit to
the legislature a report of its operations, activities, findings
and recommendations concerning sections 116C.51 to 116C.69. The
report shall also contain information on the board's biennial
expenditures, its proposed budget for the following biennium,
and the amounts paid in certificate and permit application fees
pursuant to subdivisions 2 and 2a and in assessments pursuant to
subdivision 3 this section. The proposed budget for the
following biennium shall be subject to legislative review.
Subd. 2. [SITE APPLICATION FEE.] Every applicant for a
site certificate permit shall pay to the board a fee in an
amount equal to $500 for each $1,000,000 of production plant
investment in the proposed installation as defined in the
Federal Power Commission Uniform System of Accounts. The board
shall specify the time and manner of payment of the fee. If any
single payment requested by the board is in excess of 25 percent
of the total estimated fee, the board shall show that the excess
is reasonably necessary. The applicant shall pay within 30 days
of notification any additional fees reasonably necessary for
completion of the site evaluation and designation process by the
board. In no event shall the total fees required of the
applicant under this subdivision exceed an amount equal to 0.001
of said production plant investment ($1,000 for each
$1,000,000). All money received pursuant to this subdivision
shall be deposited in a special account. Money in the account
is appropriated to the board to pay expenses incurred in
processing applications for certificates site permits in
accordance with sections 116C.51 to 116C.69 and in the event the
expenses are less than the fee paid, to refund the excess to the
applicant.
Subd. 2a. [ROUTE APPLICATION FEE.] Every applicant for a
transmission line construction route permit shall pay to the
board a base fee of $35,000 plus a fee in an amount equal to
$1,000 per mile length of the longest proposed route. The board
shall specify the time and manner of payment of the fee. If any
single payment requested by the board is in excess of 25 percent
of the total estimated fee, the board shall show that the excess
is reasonably necessary. In the event the actual cost of
processing an application up to the board's final decision to
designate a route exceeds the above fee schedule, the board may
assess the applicant any additional fees necessary to cover the
actual costs, not to exceed an amount equal to $500 per mile
length of the longest proposed route. All money received
pursuant to this subdivision shall be deposited in a special
account. Money in the account is appropriated to the board to
pay expenses incurred in processing applications for
construction route permits in accordance with sections 116C.51
to 116C.69 and in the event the expenses are less than the fee
paid, to refund the excess to the applicant.
Subd. 3. [FUNDING; ASSESSMENT.] The board shall finance
its base line studies, general environmental studies,
development of criteria, inventory preparation, monitoring of
conditions placed on site certificates and construction route
permits, and all other work, other than specific site and route
designation, from an assessment made quarterly, at least 30 days
before the start of each quarter, by the board against all
utilities with annual retail kilowatt-hour sales greater than
4,000,000 kilowatt-hours in the previous calendar year.
Each share shall be determined as follows: (1) the ratio
that the annual retail kilowatt-hour sales in the state of each
utility bears to the annual total retail kilowatt-hour sales in
the state of all these utilities, multiplied by 0.667, plus (2)
the ratio that the annual gross revenue from retail
kilowatt-hour sales in the state of each utility bears to the
annual total gross revenues from retail kilowatt-hour sales in
the state of all these utilities, multiplied by 0.333, as
determined by the board. The assessment shall be credited to
the special revenue fund and shall be paid to the state treasury
within 30 days after receipt of the bill, which shall constitute
notice of said assessment and demand of payment thereof. The
total amount which may be assessed to the several utilities
under authority of this subdivision shall not exceed the sum of
the annual budget of the board for carrying out the purposes of
this subdivision. The assessment for the second quarter of each
fiscal year shall be adjusted to compensate for the amount by
which actual expenditures by the board for the preceding fiscal
year were more or less than the estimated expenditures
previously assessed.
Sec. 29. Minnesota Statutes 2000, 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 80,000
kilowatts or more, or any facility of 50,000 kilowatts or more
which requires oil, natural gas, or natural gas liquids as a
fuel and for which an installation permit has not been applied
for by May 19, 1977 pursuant to Minn. Reg. APC 3(a) 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 with more than 50 miles of its length
in Minnesota; or,
(3) any high voltage transmission line with a capacity of
300 100 kilovolts or more with more than 25 ten miles of its
length in Minnesota or that crosses a state line;
(3) (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;
(4) (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;
(5) (6) any facility designed for or capable of storing on
a single site more than 100,000 gallons of liquefied natural gas
or synthetic gas;
(6) (7) any underground gas storage facility requiring
permit pursuant to section 103I.681;
(7) (8) any nuclear fuel processing or nuclear waste
storage or disposal facility; and
(8) (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. 30. [216B.2425] [STATE TRANSMISSION PLAN.]
Subdivision 1. [LIST.] The commission shall maintain a
list of certified high voltage transmission line projects.
Subd. 2. [LIST DEVELOPMENT.] (a) By November 1 of each
odd-numbered year, each public utility, municipal utility, and
cooperative electric association, or the generation and
transmission organization that serves each utility or
association, that owns or operates electric transmission lines
in Minnesota shall jointly or individually submit a transmission
projects report to the commission. 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; and
(4) provide a summary of public input the utilities and
associations have gathered 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.
(b) To meet the requirements of this subdivision, entities
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 certify, 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.241,
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, or was
pending before a local unit of government, the environmental
quality board, or the public utilities commission on August 1,
2001.
Sec. 31. Minnesota Statutes 2000, section 216B.243,
subdivision 3, is amended to read:
Subd. 3. [SHOWING REQUIRED FOR CONSTRUCTION.] No proposed
large energy facility shall be certified for construction unless
the applicant can show that demand for electricity cannot be met
more cost-effectively through energy conservation and
load-management measures and unless the applicant has otherwise
justified its need. In assessing need, the commission shall
evaluate:
(1) the accuracy of the long-range energy demand forecasts
on which the necessity for the facility is based;
(2) the effect of existing or possible energy conservation
programs under sections 216C.05 to 216C.30 and this section or
other federal or state legislation on long-term energy demand;
(3) the relationship of the proposed facility to overall
state energy needs, as described in the most recent state energy
policy and conservation report prepared under section 216C.18;
(4) promotional activities that may have given rise to the
demand for this facility;
(5) socially beneficial uses of the output benefits of this
facility, including its uses to protect or enhance environmental
quality, and to increase reliability of energy supply in
Minnesota and the region;
(6) the effects of the facility in inducing future
development;
(7) (6) possible alternatives for satisfying the energy
demand or transmission needs including but not limited to
potential for increased efficiency and upgrading of existing
energy generation and transmission facilities, load management
programs, and distributed generation;
(8) (7) the policies, rules, and regulations of other state
and federal agencies and local governments; and
(9) (8) any feasible combination of energy conservation
improvements, required under section 216B.241, that can (i)
replace part or all of the energy to be provided by the proposed
facility, and (ii) compete with it economically.
Sec. 32. Minnesota Statutes 2000, section 216B.243,
subdivision 4, is amended to read:
Subd. 4. [APPLICATION FOR CERTIFICATE; HEARING.] Any
person proposing to construct a large energy facility shall
apply for a certificate of need prior to construction of the
facility applying for a site or route permit under sections
116C.51 to 116C.69 or construction of the facility. The
application shall be on forms and in a manner established by the
commission. In reviewing each application the commission shall
hold at least one public hearing pursuant to chapter 14. The
public hearing shall be held at a location and hour reasonably
calculated to be convenient for the public. An objective of the
public hearing shall be to obtain public opinion on the
necessity of granting a certificate of need. The commission
shall designate a commission employee whose duty shall be to
facilitate citizen participation in the hearing process. If the
commission and the environmental quality board determine that a
joint hearing on siting and need under this subdivision and
section 116C.57, subdivision 2d, is feasible, more efficient,
and may further the public interest, a joint hearing under those
subdivisions may be held.
Sec. 33. Minnesota Statutes 2000, section 216B.243,
subdivision 8, is amended to read:
Subd. 8. [EXEMPTIONS.] This section does not apply to:
(1) cogeneration or small power production facilities as
defined in the Federal Power Act, United States Code, title 16,
sections 796(18)(A) and 796(17)(A), and having a combined
capacity at a single site of less than 80,000 kilowatts or to
plants or facilities for the production of ethanol or fuel
alcohol nor in any case where the commission shall determine
after being advised by the attorney general that its application
has been preempted by federal law;
(2) a high voltage transmission line proposed primarily to
distribute electricity to serve the demand of a single customer
at a single location, unless the applicant opts to request that
the commission determine need under this section or section
216B.2425;
(3) the upgrade to a higher voltage of an existing
transmission line that serves the demand of a single customer
that primarily uses existing rights-of-way, unless the applicant
opts to request that the commission determine need under this
section or section 216B.2425;
(4) conversion of the fuel source of an existing electric
generating plant to using natural gas; or
(5) modification of an existing electric generating plant
to increase efficiency, as long as the capacity of the plant is
not increased more than ten percent or more than 100 megawatts,
whichever is greater.
Sec. 34. Minnesota Statutes 2000, section 216B.62,
subdivision 5, is amended to read:
Subd. 5. [ASSESSING COOPERATIVES AND MUNICIPALS.] The
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, proceedings under section 216B.2425, 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.
The department shall assess cooperatives and municipalities
for the costs of alternative energy engineering activities under
section 216C.261. Each cooperative and municipality shall be
assessed in proportion that its gross operating revenues for the
sale of gas and electric service within the state for the last
calendar year bears to the total of those revenues for all
public utilities, cooperatives, and municipalities.
Sec. 35. [STATE ENERGY PLANNING REPORT.]
(a) The commissioner of the department of commerce shall
prepare a state energy planning report and submit it to the
legislature by December 15, 2001 and update the report by
December 15, 2002. The report must identify important trends
and issues in energy consumption, supply, technologies,
conservation, environmental effects, and economics, and must
recommend energy goals relating to the energy needs of the
state. The report must recommend goals for the role of energy
conservation, utilization of renewable energy resources,
deployment of distributed generation resources, other modern
energy technologies, and traditional energy technologies, and
affordability of energy services for all Minnesotans. The
report must recommend strategies to reach the recommended goals,
including recommendations for amendments to state law.
(b) The report must address, among other issues:
(1) projected energy consumption over the next ten years;
(2) the need for new energy production and transportation
facilities;
(3) options for streamlining of the procedures for
certification of need, routing and siting, environmental review,
and permitting of energy facilities;
(4) the potential role of energy conservation, modern and
emerging energy technologies, and renewable generation;
(5) the role for traditional energy technologies;
(6) the environmental effects of energy consumption,
including an analysis of the costs associated with reducing
those effects; and
(7) projected energy costs over the next ten years.
(c) In preparing the report, the commissioner shall invite
public participation and shall consult with other state
agencies, including the environmental quality board staff, the
public utilities commission staff, the pollution control agency,
the department of health and other relevant agencies, local
government units, regional energy planning groups, energy
utilities, and other interested persons. Not later than October
1, 2001, the commissioner shall issue a draft report. The
commissioner shall accept written comments and hold at least one
public meeting to gather additional public input on the draft
report.
Sec. 36. [REPEALER.]
Minnesota Statutes 2000, sections 116C.55, subdivisions 2
and 3; 116C.57, subdivisions 3, 5, and 5a; 116C.67; and
216B.2421, subdivision 3, are repealed.
Sec. 37. [EFFECTIVE DATE.]
This article is effective for certificates of need and
route and site permits applied for on or after August 1, 2001.
ARTICLE 8
RENEWABLE ENERGY AND CONSERVATION
Section 1. Minnesota Statutes 2000, section 216B.1645, is
amended to read:
216B.1645 [POWER PURCHASE CONTRACT OR INVESTMENT.]
Upon the petition of a public utility, the public utilities
commission shall approve or disapprove power purchase contracts,
investments, or expenditures entered into or made by the utility
to satisfy the wind and biomass mandates contained in sections
216B.2423 and, 216B.2424, and 216B.169, including reasonable
investments and expenditures made to transmit the electricity
generated from sources developed under those sections that is
ultimately used to provide service to the utility's retail
customers, or to develop renewable energy sources from the
account required in section 116C.779. The expenses incurred by
the utility over the duration of the approved contract or useful
life of the investment and expenditures made pursuant to section
116C.779 shall be recoverable from the ratepayers of the
utility, to the extent they are not offset by utility revenues
attributable to the contracts, investments, or expenditures.
Upon petition by a public utility, the commission shall approve
or approve as modified a rate schedule providing for the
automatic adjustment of charges to recover the expenses or costs
approved by the commission, which, in the case of transmission
expenditures, are limited to the portion of actual transmission
costs that are directly allocable to the need to transmit power
from the renewable sources of energy. The commission may not
approve recovery of the costs for that portion of the power
generated from sources governed by this section that the utility
sells into the wholesale market. Nothing in this section shall
be construed to determine the manner or extent to which revenues
derived from other generation facilities of the utility may be
considered in determining the recovery of the approved cost or
expenses associated with the mandated contracts, investments, or
expenditures in the event there is retail competition for
electric energy.
Sec. 2. [216B.169] [RENEWABLE AND HIGH-EFFICIENCY ENERGY
RATE OPTIONS.]
Subdivision 1. [DEFINITIONS.] For the purposes of this
section, the following terms have the meanings given them.
(a) "Utility" means a public utility, municipal utility, or
cooperative electric association providing electric service at
retail to Minnesota consumers.
(b) "Renewable energy" has the meaning given in section
216B.2422, subdivision 1, paragraph (c).
(c) "High-efficiency, low emissions, distributed generation"
means a distributed generation facility of no more than ten
megawatts of interconnected capacity that is certified by the
commissioner under subdivision 3 as a high-efficiency, low
emissions facility.
Subd. 2. [RENEWABLE AND HIGH-EFFICIENCY ENERGY RATE
OPTIONS.] (a) Each utility shall offer its customers, and shall
advertise the offer at least annually, one or more options that
allow a customer to determine that a certain amount of the
electricity generated or purchased on behalf of the customer is
renewable energy or energy generated by high-efficiency, low
emissions, distributed generation such as fuel cells and
microturbines fueled by a renewable fuel.
(b) Each public utility shall file an implementation plan
within 90 days of the effective date of this section to
implement paragraph (a).
(c) Rates charged to customers must be calculated using the
utility's cost of acquiring the energy for the customer and must:
(1) reflect the difference between the cost of generating
or purchasing the renewable energy and the cost of generating or
purchasing the same amount of nonrenewable energy; and
(2) be distributed on a per kilowatt-hour basis among all
customers who choose to participate in the program.
(d) Implementation of these rate options may reflect a
reasonable amount of lead time necessary to arrange acquisition
of the energy. The utility may acquire the energy demanded by
customers, in whole or in part, through procuring or generating
the renewable energy directly, or through the purchase of
credits from a provider that has received certification of
eligible power supply pursuant to subdivision 3. If a utility
is not able to arrange an adequate supply of renewable or
high-efficiency energy to meet its customers' demand under this
section, the utility must file a report with the commission
detailing its efforts and reasons for its failure.
Subd. 3. [CERTIFICATION AND TRADEABLE CREDITS.] (a) The
commissioner shall certify a power supply or supplies as
eligible to satisfy customer requirements under this section
upon finding:
(1) the power supply is renewable energy or energy
generated by high-efficiency, low emissions, distributed
generation; and
(2) the sales arrangements of energy from the supplies are
such that the power supply is only sold once to retail consumers.
(b) To facilitate compliance with this section, the
commission may, by order, establish a program for tradeable
credits for eligible power supplies.
Sec. 3. [216B.1691] [RENEWABLE ENERGY OBJECTIVES.]
Subdivision 1. [DEFINITIONS.] (a) "Eligible energy
technology" means:
(1) an energy technology that generates electricity from
the following renewable energy sources: solar, wind,
hydroelectric with a capacity of less than 60 megawatts, or
biomass; and
(2) was not mandated by state law or commission order.
(b) "electric utility" means a public utility providing
electric service, a generation and transmission cooperative
electric association, or a municipal power agency.
Subd. 2. [ELIGIBLE ENERGY OBJECTIVES.] (a) Each electric
utility shall make a good faith effort to generate or procure
sufficient electricity generated by an eligible energy
technology to provide its retail consumers, or the retail
members of a distribution utility to which the electric utility
provides wholesale electric service, so that:
(1) commencing in 2005, at least one percent of the
electric energy provided to those retail customers is generated
by eligible energy technologies;
(2) the amount provided under clause (1) is increased by
one percent each year until 2015;
(3) ten percent of the electric energy provided to retail
customers in Minnesota is generated by eligible energy
technologies; and
(4) of the eligible energy technology generation required
under clauses (1) and (2), at least 0.5 percent of the energy
must be generated by biomass energy technologies by 2010 and one
percent by 2015.
(b) Each electric utility shall report on its activities
and progress with regard to these objectives in their filings
under section 216B.2422.
(c) The commission, in consultation with the commissioner
of commerce, shall compile the information provided to the
commission under paragraph (b), and report to the chairs of the
house of representatives and senate committees with jurisdiction
over energy and environment policy issues as to the progress of
utilities in the state in increasing the amount of renewable
energy provided to retail customers, with any recommendations
for regulatory or legislative action, by January 15, 2002.
Sec. 4. Minnesota Statutes 2000, 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 public service.
(c) "Customer facility" means all buildings, structures,
equipment, and installations at a single site.
(d) "Department" means the department of public service.
(e) "Energy conservation" means demand-side management of
energy supplies resulting in a net reduction in energy use.
Load management that reduces overall energy use is energy
conservation.
(f) "Energy conservation improvement" means the purchase or
installation of a device, method, material, or project that:
(1) reduces consumption of or increases efficiency in the
use of electricity or natural gas, including but not limited to
insulation and ventilation, storm or thermal doors or windows,
caulking and weatherstripping, furnace efficiency modifications,
thermostat or lighting controls, awnings, or systems to turn off
or vary the delivery of energy;
(2) creates, converts, or actively uses energy from
renewable sources such as solar, wind, and biomass, provided
that the device or method conforms with national or state
performance and quality standards whenever applicable;
(3) seeks to provide energy savings through reclamation or
recycling and that is used as part of the infrastructure of an
electric generation, transmission, or distribution system within
the state or a natural gas distribution system within the state;
or
(4) provides research or development of new means of
increasing energy efficiency or conserving energy or research or
development of improvement of existing means of increasing
energy efficiency or conserving energy a project that results in
energy conservation.
(f) (g) "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.
(g) (h) "Large electric customer facility" means a customer
facility that imposes 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, and for which
electric services are provided at retail on a single bill by a
utility operating in the state.
(i) "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 the
overall demand for energy or capacity.
Sec. 5. Minnesota Statutes 2000, section 216B.241,
subdivision 1a, is amended to read:
Subd. 1a. [INVESTMENT, EXPENDITURE, AND CONTRIBUTION;
PUBLIC UTILITY.] (a) For purposes of this subdivision and
subdivision 2, "public utility" has the meaning given it in
section 216B.02, subdivision 4. Each public utility shall spend
and invest for energy conservation improvements under this
subdivision and subdivision 2 the following amounts:
(1) for a utility that furnishes gas service, 0.5 percent
of its gross operating revenues from service provided in the
state;
(2) for a utility that furnishes electric service, 1.5
percent of its gross operating revenues from service provided in
the state; and
(3) for a utility that furnishes electric service and that
operates a nuclear-powered electric generating plant within the
state, two percent of its gross operating revenues from service
provided in the state.
For purposes of this paragraph (a), "gross operating revenues"
do not include revenues from large electric customer facilities
exempted by the commissioner of the department of public service
pursuant to under paragraph (b).
(b) The owner of a large electric customer facility may
petition the commissioner of the department of public service to
exempt both electric and gas utilities serving the large energy
customer facility from the investment and expenditure
requirements of paragraph (a) with respect to retail revenues
attributable to the facility. At a minimum, the petition must
be supported by evidence relating to competitive or economic
pressures on the customer and a showing by the customer of
reasonable efforts to identify, evaluate, and implement
cost-effective conservation improvements at the facility. If a
petition is filed on or before October 1 of any year, the order
of the commissioner to exempt revenues attributable to the
facility can be effective no earlier than January 1 of the
following year. The commissioner shall not grant an exemption
if the commissioner determines that granting the exemption is
contrary to the public interest. The commissioner may, after
investigation, rescind any exemption granted under this
paragraph upon a determination that cost-effective energy
conservation improvements are available at the large electric
customer facility. For the purposes of this paragraph,
"cost-effective" means that the projected total cost of the
energy conservation improvement at the large electric customer
facility is less than the projected present value of the energy
and demand savings resulting from the energy conservation
improvement. For the purposes of investigations by the
commissioner under this paragraph, the owner of any large
electric customer facility shall, upon request, provide the
commissioner with updated information comparable to that
originally supplied in or with the owner's original petition
under this paragraph.
(c) The commissioner may require investments or spending
greater than the amounts required under this subdivision for a
public utility whose most recent advance forecast required under
section 216B.2422 or 216C.17 projects a peak demand deficit of
100 megawatts or greater within five years under mid-range
forecast assumptions.
(d) A public utility or owner of a large electric customer
facility may appeal a decision of the commissioner under
paragraph (b) or (c) to the commission under subdivision 2. In
reviewing a decision of the commissioner under paragraph (b) or
(c), the commission shall rescind the decision if it finds that
the required investments or spending will:
(1) not result in cost-effective energy conservation
improvements; or
(2) otherwise not be in the public interest.
(e) Each utility shall determine what portion of the amount
it sets aside for conservation improvement will be used for
conservation improvements under subdivision 2 and what portion
it will contribute to the energy and conservation account
established in subdivision 2a. A public utility may propose to
the commissioner to designate that all or a portion of funds
contributed to the account established in subdivision 2a be used
for research and development projects that can best be
implemented on a statewide basis. Contributions must be
remitted to the commissioner of public service by February 1 of
each year. Nothing in this subdivision prohibits a public
utility from spending or investing for energy conservation
improvement more than required in this subdivision.
Sec. 6. Minnesota Statutes 2000, 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 generates and
transmits electricity to associations that provide electricity
at retail including a cooperative electric association not
located in this state that serves associations or others in the
state provides retail service to its members;
(2) a municipality that provides electric service to retail
customers; and
(3) a municipality with gross operating revenues in excess
of $5,000,000 from sales of 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 one 1.5 percent of its gross
operating revenues from the sale of electricity not purchased
from a public utility governed by subdivision 1a or a
cooperative electric association governed by this subdivision,
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 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 15 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. Load management may be used to meet the
requirements of this subdivision if it reduces the demand for or
increases the efficiency of electric services.
(e) Load management activities that do not reduce energy
use but that increase the efficiency of the electric system may
be used to meet the following percentage of the conservation
investment and spending requirements of this subdivision:
(1) 2002 - 90 percent;
(2) 2003 - 80 percent;
(3) 2004 - 65 percent; and
(4) 2005 and thereafter - 50 percent.
(f) A generation and transmission cooperative electric
association may include as spending and investment required
under this subdivision conservation improvement spending and
investment by that provides energy services to cooperative
electric associations that provide electric service at retail to
consumers and that are served by the generation and transmission
association 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.
(d) (g) By February 1 of each year June 1, 2002, and every
two years thereafter, each municipality or cooperative
shall report file an overview of its conservation improvement
plan with the commissioner. With this overview, the
municipality or cooperative shall also provide an evaluation to
the commissioner detailing its energy conservation improvement
spending and investments with a brief analysis of effectiveness
in reducing consumption of electricity or gas 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 report evaluation and make
recommendations, where appropriate, to the municipality or
association to increase the effectiveness of conservation
improvement activities. Up to three percent of a utility's
conservation spending obligation under this section may be used
for program pre-evaluation, testing, and monitoring and program
evaluation.
(h) The commissioner shall also review each
report evaluation for whether a portion of the money spent on
residential conservation improvement programs is devoted to
programs that directly address the needs of renters and
low-income persons unless an insufficient number of appropriate
programs are available. For the purposes of this subdivision
and subdivision 2, "low-income" means an income of less than 185
percent of the federal poverty level at or below 50 percent of
the state median income.
(e) (i) As part of its spending for conservation
improvement, a municipality or association may contribute to the
energy and conservation account. A municipality or association
may propose to the commissioner to designate that all or a
portion of funds contributed to the account be used for research
and development projects that can best be implemented on a
statewide basis. Any amount contributed must be remitted to the
commissioner of public service by February 1 of each year.
Sec. 7. Minnesota Statutes 2000, section 216B.241,
subdivision 2, is amended to read:
Subd. 2. [PROGRAMS.] (a) The commissioner may by rule
require public utilities to make investments and expenditures in
energy conservation improvements, explicitly setting forth the
interest rates, prices, and terms under which the improvements
must be offered to the customers. The required programs must
cover a two-year period. Public utilities shall file
conservation improvement plans by June 1, on a schedule
determined by order of the commissioner. Plans received by a
public utility by June 1 must be approved or approved as
modified by the commissioner by December 1 of that same year.
The commissioner shall require at least one public utility to
establish a pilot program to make investments in and
expenditures for energy from renewable resources such as solar,
wind, or biomass and shall give special consideration and
encouragement to programs that bring about significant net
savings through the use of energy-efficient lighting. The
commissioner shall evaluate the program on the basis of
cost-effectiveness and the reliability of technologies
employed. The rules of the department commissioner's order must
provide to the extent practicable for a free choice, by
consumers participating in the program, of the device, method,
material, or project constituting the energy conservation
improvement and for a free choice of the seller, installer, or
contractor of the energy conservation improvement, provided that
the device, method, material, or project seller, installer, or
contractor is duly licensed, certified, approved, or qualified,
including under the residential conservation services program,
where applicable.
(b) The commissioner may require a utility to make an
energy conservation improvement investment or expenditure
whenever the commissioner finds that the improvement will result
in energy savings at a total cost to the utility less than the
cost to the utility to produce or purchase an equivalent amount
of new supply of energy. The commissioner shall nevertheless
ensure that every public utility operate one or more programs
under periodic review by the department. Load management may be
used to meet the requirements for energy conservation
improvements under this section if it results in a demonstrable
reduction in consumption of energy.
(c) Each public utility subject to subdivision 1a may spend
and invest annually up to 15 ten percent of the total amount
required to be spent and invested on energy conservation
improvements under this section by the utility on research and
development projects that meet the definition of energy
conservation improvement in subdivision 1 and that are funded
directly by the public utility.
(d) A public utility may not spend for or invest in energy
conservation improvements that directly benefit a large electric
customer facility for which the commissioner has issued an
exemption pursuant to subdivision 1a, paragraph (b). The
commissioner shall consider and may require a utility to
undertake a program suggested by an outside source, including a
political subdivision or a nonprofit or community organization.
(c) No utility may make an energy conservation improvement
under this section to a building envelope unless:
(1) it is the primary supplier of energy used for either
space heating or cooling in the building;
(2) the commissioner determines that special circumstances,
that would unduly restrict the availability of conservation
programs, warrant otherwise; or
(3) the utility has been awarded a contract under
subdivision 2a.
(d) (e) The commissioner may, by order, establish a list of
programs that may be offered as energy conservation improvements
by a public utility, municipal utility, cooperative electric
association, or other entity providing conservation services
pursuant to this section. The list of programs may include
rebates for high-efficiency appliances, rebates or subsidies for
high-efficiency lamps, small business energy audits, and
building recommissioning. The commissioner may, by order,
change this list to add or subtract programs as the commissioner
determines is necessary to promote efficient and effective
conservation programs.
(f) The commissioner shall ensure that a portion of the
money spent on residential conservation improvement programs is
devoted to programs that directly address the needs of renters
and low-income persons, in proportion to the amount the utility
has historically spent on such programs based on the most recent
three-year average relative to the utility's total conservation
spending under this section, unless an insufficient number of
appropriate programs are available.
(e) (g) A utility, a political subdivision, or a nonprofit
or community organization that has suggested a program, the
attorney general acting on behalf of consumers and small
business interests, or a utility customer that has suggested a
program and is not represented by the attorney general under
section 8.33 may petition the commission to modify or revoke a
department decision under this section, and the commission may
do so if it determines that the program is not cost-effective,
does not adequately address the residential conservation
improvement needs of low-income persons, has a long-range
negative effect on one or more classes of customers, or is
otherwise not in the public interest. The person petitioning
for commission review has the burden of proof. The commission
shall reject a petition that, on its face, fails to make a
reasonable argument that a program is not in the public interest.
(h) The commissioner may order a public utility to include,
with the filing of the utility's proposed conservation
improvement plan under paragraph (a), the results of an
independent audit of the utility's conservation improvement
programs and expenditures performed by the department or an
auditor with experience in the provision of energy conservation
and energy efficiency services approved by the commissioner and
chosen by the utility. The audit must specify the energy
savings or increased efficiency in the use of energy within the
service territory of the utility that is the result of the
spending and investments. The audit must evaluate the
cost-effectiveness of the utility's conservation programs.
Up to three percent of a utility's conservation spending
obligation under this section may be used for program
pre-evaluation, testing, and monitoring and program audit and
evaluation.
Sec. 8. Minnesota Statutes 2000, section 216C.051,
subdivision 6, is amended to read:
Subd. 6. [ASSESSMENT; APPROPRIATION.] On request by the
cochairs of the legislative task force and after approval of the
legislative coordinating commission, the commissioner of the
department of public service commerce shall assess from electric
utilities all public utilities, generation and transmission
cooperative electric associations, and municipal power agencies
providing electric or natural gas services in Minnesota, in
addition to assessments made under section 216B.62, the amount
requested for the operation of the task force not to
exceed $700,000 $150,000 in a fiscal year. This authority to
assess continues until the commissioner has assessed a total of
$700,000. The amount assessed under this section is
appropriated to the director of the legislative coordinating
commission for those purposes, and is available until expended.
The department shall apportion those costs among all energy
utilities in proportion to their respective gross operating
revenues from the sale of gas or electric service within the
state during the last calendar year. For the purposes of
administrative efficiency, the department shall assess energy
utilities and issue bills in accordance with the billing and
assessment procedures provided in section 216B.62, to the extent
that these procedures do not conflict with this subdivision.
Sec. 9. Minnesota Statutes 2000, section 216C.051,
subdivision 9, is amended to read:
Subd. 9. [EXPIRATION.] This section is repealed March 15,
2001 June 30, 2005.
Sec. 10. [216C.052] [RELIABILITY ADMINISTRATOR.]
Subdivision 1. [RESPONSIBILITIES.] (a) There is
established the position of reliability administrator in the
department of commerce. The administrator shall act as a source
of independent expertise and a technical advisor to the
commissioner, the commission, the public, and the legislative
electric energy task force on issues related to the reliability
of the electric system. In conducting its work, the
administrator shall:
(1) model and monitor the use and operation of the energy
infrastructure in the state, including generation facilities,
transmission lines, natural gas pipelines, and other energy
infrastructure;
(2) develop and present to the commission and parties
technical analyses of proposed infrastructure projects, and
provide technical advice to the commission;
(3) present independent, factual, expert, and technical
information on infrastructure proposals and reliability issues
at public meetings hosted by the task force, the environmental
quality board, the department, or the commission.
(b) Upon request and subject to resource constraints, the
administrator shall provide technical assistance regarding
matters unrelated to applications for infrastructure
improvements to the task force, the department, or the
commission.
(c) The administrator may not advocate for any particular
outcome in a commission proceeding, but may give technical
advice to the commission as to the impact on the reliability of
the energy system of a particular project or projects. The
administrator must not be considered a party or a participant in
any proceeding before the commission.
Subd. 2. [ADMINISTRATIVE ISSUES.] (a) The commissioner may
select the administrator who shall serve for a four-year term.
The commissioner shall oversee and direct the work of the
administrator, annually review the expenses of the
administrator, and annually approve the budget of the
administrator. The administrator may hire staff and may
contract for technical expertise in performing duties when
existing state resources are required for other state
responsibilities or when special expertise is required. The
salary of the administrator is governed by section 15A.0815,
subdivision 2.
(b) Costs relating to a specific proceeding, analysis, or
project are not general administrative costs. For purposes of
this section, "energy utility" means public utilities,
generation and transmission cooperative electric associations,
and municipal power agencies providing natural gas or electric
service in the state.
(c) The department of commerce shall pay:
(1) the general administrative costs of the administrator,
not to exceed $1,500,000 in a fiscal year, and shall assess
energy utilities for reimbursement for those administrative
costs. These costs must be consistent with the budget approved
by the commissioner under paragraph (a). The department shall
apportion the costs among all energy utilities in proportion to
their respective gross operating revenues from sales of gas or
electric service within the state during the last calendar year,
and shall then render a bill to each utility on a regular basis;
and
(2) costs relating to a specific proceeding analysis or
project and shall render a bill for reimbursement to the
specific energy utility or utilities participating in the
proceeding, analysis, or project directly, either at the
conclusion of a particular proceeding, analysis, or project, or
from time to time during the course of the proceeding, analysis,
or project.
(d) For purposes of administrative efficiency, the
department shall assess energy utilities and issue bills in
accordance with the billing and assessment procedures provided
in section 216B.62, to the extent that these procedures do not
conflict with this subdivision. The amount of the bills
rendered by the department under paragraph (c) must be paid by
the energy utility into an account in the special revenue fund
in the state treasury within 30 days from the date of billing
and is appropriated to the commissioner for the purposes
provided in this section. The commission shall approve or
approve as modified a rate schedule providing for the automatic
adjustment of charges to recover amounts paid by utilities under
this section. All amounts assessed under this section are in
addition to amounts appropriated to the commission and the
department by other law.
Subd. 3. [EXPIRATION.] This section expires June 30, 2006.
Sec. 11. [CONSERVATION IMPROVEMENT PLAN; EVALUATION OF
COOPERATIVE AND MUNICIPAL PROGRAMS.]
(a) In consultation with the department of commerce,
cooperative electric associations and municipal utilities shall
evaluate their energy and capacity conservation programs,
develop plans for future programs, and report their findings and
plans to the chairs of the house of representatives and senate
committees with jurisdiction over energy issues by June 1, 2002.
Evaluations may be conducted jointly with other entities subject
to this section, and shall address:
(1) whether the utility or association has implemented and
is implementing cost-effective energy conservation programs;
(2) the availability of basic conservation services and
programs to customers;
(3) methodologies that best quantify energy savings,
cost-effectiveness, and the potential for cost-effective
conservation improvements;
(4) the role of capacity conservation in meeting utility
planning needs and state energy goals; and
(5) the ability of energy conservation programs to avoid
the need for construction of generation facilities and
transmission lines.
(b) The evaluation must develop program and performance
goals that recognize customer class, utility service area
demographics, cost of program delivery, regional economic
indicators, and utility load shape. The cost of the evaluation
may be deducted from the utility's or association's conservation
spending obligation under Minnesota Statutes 2000, section
216B.241.
Sec. 12. [216B.241] [Subd. 1d.] [COOPERATIVE CONSERVATION
INVESTMENT INCREASE PHASE-IN.]
The increase in required conservation improvement
expenditures by a cooperative electric association that results
from the amendments in section 6 to Minnesota Statutes, section
216B.241, subdivision 1b, paragraph (a), clause (1), must be
phased in as follows:
(1) at least 25 percent shall be effective in year 2002;
(2) at least 50 percent shall be effective in year 2003;
(3) at least 75 percent shall be effective in year 2004;
and
(4) all of the increase shall be effective in year 2005 and
thereafter.
Sec. 13. [216B.2411] [DISTRIBUTED ENERGY RESOURCES.]
(a) To the extent that cost-effective projects are
available in the service territory of a utility or association
providing conservation services under Minnesota Statutes,
section 216B.241, the utility or association shall use five
percent of the total amount to be spent on energy conservation
improvements under Minnesota Statutes, section 216B.241, on:
(1) projects to construct an electric generating facility
that utilizes renewable fuels as defined in Minnesota Statutes,
section 216B.2422, subdivision 1, such as methane or other
combustible gases derived from the processing of plant or animal
wastes, biomass fuels such as short-rotation woody or fibrous
agricultural crops, or other renewable fuel, as its primary fuel
source; or
(2) projects to install a distributed generation facility
of ten megawatts or less of interconnected capacity that is
fueled by natural gas, renewable fuels, or another similarly
clean fuel.
(b) For public utilities, as defined under Minnesota
Statutes, section 216B.02, subdivision 4, projects under this
section must be considered energy conservation improvements as
defined in Minnesota Statutes, section 216B.241. For
cooperative electric associations and municipal utilities,
projects under this section must be considered load management
activities described in Minnesota Statutes, section 216B.241,
subdivision 1, paragraph (i).
(c) This section expires May 30, 2006.
Sec. 14. [216B.2411] [Paragraph (c)] [TRANSITION.]
The commission may provide an alternative recovery
mechanism for the expense of continuing existing approved
cost-effective projects by a rate-regulated distribution
cooperative electric association.
Sec. 15. [CONSERVATION INVESTMENT PROGRAM STUDY.]
(a) The commissioner of commerce shall study the
conservation investment program created under Minnesota
Statutes, section 216B.241, and make recommendations to the
legislature on changes in the program that will assist the
program to obtain the maximum energy savings possible from
spending and investments under the program. The study must
include, at a minimum:
(1) a review of administrative burdens imposed by the
program with the goal to reduce them to the maximum extent
consistent with ensuring that the program will meet its goal of
maximum energy savings with program funds;
(2) identification of spending and investments with high
potential for saving energy and suggestions for targeting the
program at those expenditures and investments; and
(3) appropriate levels of spending and investment under the
program.
(b) The commissioner shall solicit written public comment
on the study and submit a report and a copy of the written
comments to the committees of the legislature having principal
jurisdiction on energy matters by November 15, 2001.
Sec. 16. [EXEMPTION EXTENDED.]
(a) The commissioner of commerce shall not review the
exemption under Minnesota Statutes, section 216B.241,
subdivision 1a, paragraph (b), of a large electric customer
facility, as defined in Minnesota Statutes, section 216B.241,
subdivision 1, paragraph (g), from the investment and
expenditure requirements of Minnesota Statutes, section
216B.241, subdivision 1a, paragraph (b), for five years from the
date the exemption was granted, provided the exemption was
granted before April 15, 2001.
(b) A large electric customer facility as defined in
Minnesota Statutes, section 216B.241, subdivision 1, that is
exempt from the investment and expenditure requirements of
Minnesota Statutes, section 216B.241, by virtue of a contract
approved by the public utilities commission prior to April 15,
2001, under Minnesota Statutes, section 216B.162, shall remain
exempt from those requirements until April 15, 2006.
(c) This section does not apply if the customer facility's
monthly peak measured demand for three consecutive months
exceeds 110 percent of the annual peak measured demand of the
facility in the year the exemption was granted.
Sec. 17. [UNIVERSAL ENERGY SERVICE PROGRAM.]
The department of commerce shall report to the legislature
by January 15, 2002, regarding the development of a universal
energy service program. The purpose of the program is to
provide energy bill payment and conservation assistance to low-
and moderate-income energy customers. The report shall include
proposals for implementing the program, including, but not
limited to, proposals to establish income eligibility, estimate
the percentage of income that eligible customers devote to
energy costs, determine the level of funding required to
significantly lower the energy burden of eligible customers,
establish funding collection and distribution methods, and
measure the impact of charges for the program on all Minnesota
energy consumers.
Sec. 18. [216C.052] [Subd. 3.] [APPROPRIATION.]
The commissioner of commerce shall transfer up to $500,000
annually of the amounts provided for in section 11, subdivision
2, to the commissioner of administration for the purposes
provided in article 1, section 2, as needed to implement that
section.
Sec. 19. [EFFECTIVE DATE.]
Sections 14, 15, and 16 are effective the day following
final enactment. Sections 4 to 7, 10, 12, 13, and 18 are
effective January 1, 2002. Section 9 is effective retroactively
from March 1, 2001. Section 8 is effective July 1, 2001.
Presented to the governor May 25, 2001
Signed by the governor May 29, 2001, 11:29 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes