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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.

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