Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 2003, 1st Special Session
Key: (1) language to be deleted (2) new language
CHAPTER 11-H.F.No. 9
An act relating to energy; modifying provisions
relating to radioactive waste storage; modifying
incentives and objectives for alternative energy
development; requiring studies; approving consumptive
use of water; amending Minnesota Statutes 2002,
sections 116C.71, subdivision 7; 116C.779; 216B.095;
216B.097, by adding a subdivision; 216B.1645, by
adding a subdivision; 216B.1691; 216B.241, subdivision
1b, by adding a subdivision; 216B.2411; 216B.2424,
subdivision 5; 216B.2425, by adding a subdivision;
216B.243, subdivision 3b; 216C.051, subdivisions 3, 6,
9, by adding a subdivision; 216C.052, subdivisions 2,
3; 216C.41, subdivisions 1, 2, 3, 4, 5, by adding
subdivisions; proposing coding for new law in
Minnesota Statutes, chapters 116C; 216B; repealing
Minnesota Statutes 2002, sections 116C.80; 216C.051,
subdivisions 1, 4, 5.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
NUCLEAR ENERGY PROVISIONS
Section 1. Minnesota Statutes 2002, section 116C.71,
subdivision 7, is amended to read:
Subd. 7. [RADIOACTIVE WASTE MANAGEMENT FACILITY.]
"Radioactive waste management facility" means a geographic site,
including buildings, structures, and equipment in or upon which
radioactive waste is retrievably or irretrievably disposed by
burial in soil or permanently stored. An independent spent fuel
storage installation located on the site of a Minnesota nuclear
generation facility for dry cask storage of spent nuclear fuel
generated solely by that facility is not a radioactive waste
management facility.
Sec. 2. [116C.83] [AUTHORIZATION FOR ADDITIONAL DRY CASK
STORAGE.]
Subdivision 1. [AUTHORIZATION TO END OF CURRENT PRAIRIE
ISLAND LICENSE.] Subject to the dry cask storage limits of the
federal license for the independent spent fuel storage
installation at Prairie Island, the public utility that owns the
Prairie Island nuclear generation plant has authorization for
sufficient dry cask storage capacity at that installation to
allow:
(1) the unit 1 reactor at Prairie Island to operate until
the end of its current license in 2013; and
(2) the unit 2 reactor at Prairie Island to operate until
the end of its current license in 2014.
Subd. 2. [COMMISSION PROCESS FOR FUTURE ADDITIONAL
AUTHORIZATION.] Authorization of any additional dry cask storage
other than that provided for in subdivision 1, or expansion or
establishment of an independent spent fuel storage facility at a
nuclear generation facility in this state, is subject to
approval of a certificate of need by the public utilities
commission pursuant to section 216B.243. In any proceeding
under this subdivision, the commission may make a decision that
could result in a shutdown of a nuclear generating facility. In
considering an application for a certificate of need pursuant to
this subdivision, the commission may consider whether the public
utility that owns the nuclear generation facility in the state
is in compliance with section 216B.1691 and the utility's past
performance under that section.
Subd. 3. [LEGISLATIVE REVIEW.] (a) To allow opportunity
for review by the legislature, a decision by the commission on
an application for a certificate of need pursuant to subdivision
2 is stayed until the June 1 following the next regular annual
session of the legislature that begins after the date of the
commission decision. By January 15 of the year of that
legislative session, the commission shall issue a report to the
chairs of the house and senate committees with jurisdiction over
energy and environmental policy issues, providing a summary of
the commission's decision and the grounds for that decision, the
alternatives considered and rejected by the commission, and the
reasons for rejecting those alternatives. If the legislature
does not modify or reject the commission's decision by law
enacted during that regular legislative session, the
commission's decision shall become effective on the expiration
of the stay.
(b) The stay of a commission decision to approve an
application for a certificate of need for additional dry cask
storage under subdivision 2 does not apply to the fabrication of
the spent fuel storage casks. However, if the utility proceeds
with the fabrication of casks, it does so bearing the risk of an
adverse legislative decision.
Subd. 4. [OTHER CONDITIONS.] (a) The storage of spent
nuclear fuel in the pool and in dry casks at a nuclear
generating plant must be managed to facilitate the shipment of
waste out of state to a permanent or interim storage facility as
soon as feasible in a manner that allows the continued operation
of the plant consistent with sections 116C.71 to 116C.83 and
216B.1645, subdivision 4.
(b) The authorization for storage capacity pursuant to this
section is limited to the storage of spent nuclear fuel
generated by a Minnesota nuclear generation facility and stored
on the site of that facility.
Subd. 5. [WATER STANDARDS.] The standards established in
section 116C.76, subdivision 1, clauses (1) to (3), apply to an
independent spent fuel installation. Such an installation must
be operated in accordance with those standards.
Subd. 6. [ENVIRONMENTAL REVIEW AND PROTECTION.] (a) The
siting, construction, and operation of an independent spent fuel
storage installation located on the site of a Minnesota
generation facility for dry cask storage of spent nuclear fuel
generated solely by that facility is subject to all
environmental review and protection provisions of this chapter
and chapters 115, 115B, 116, 116B, 116D, and 216B, and rules
associated with those chapters, except those statutes and rules
that apply specifically to a radioactive waste management
facility as defined in section 116C.71, subdivision 7.
(b) An environmental impact statement is required under
chapter 116D for a proposal to construct and operate a new or
expanded independent spent fuel storage installation. The
environmental quality board shall be the responsible
governmental unit for the environmental impact statement. Prior
to finding the statement adequate, the board must find that the
applicant has demonstrated that the facility is designed to
provide a reasonable expectation that the operation of the
facility will not result in groundwater contamination in excess
of the standards established in section 116C.76, subdivision 1,
clauses (1) to (3).
Sec. 3. Minnesota Statutes 2002, section 216B.1645, is
amended by adding a subdivision to read:
Subd. 4. [SETTLEMENT WITH MDEWAKANTON DAKOTA TRIBAL
COUNCIL AT PRAIRIE ISLAND.] The commission shall approve a rate
schedule providing for the automatic adjustment of charges to
recover the costs or expenses of a settlement between the public
utility that owns the Prairie Island nuclear generation facility
and the Mdewakanton Dakota Tribal Council at Prairie Island,
resolving outstanding disputes regarding the provisions of Laws
1994, chapter 641, article 1, section 4. The settlement must
provide for annual payments, not to exceed $2,500,000 annually,
by the public utility to the Prairie Island Indian Community, to
be used for, among other purposes, acquiring up to 1,500
contiguous or noncontiguous acres of land in Minnesota within 50
miles of the tribal community's reservation at Prairie Island to
be taken into trust by the federal government for the benefit of
the tribal community for housing and other residential
purposes. The legislature acknowledges that the intent to
purchase land by the tribe for relocation purposes is part of
the settlement agreement and this act. However, the state,
through the governor, reserves the right to support or oppose
any particular application to place land in trust status.
Sec. 4. Minnesota Statutes 2002, section 216B.243,
subdivision 3b, is amended to read:
Subd. 3b. [NUCLEAR POWER PLANT; NEW CONSTRUCTION
PROHIBITED; RELICENSING.] (a) The commission may not issue a
certificate of need for the construction of a new
nuclear-powered electric generating plant.
(b) Any certificate of need for additional storage of spent
nuclear fuel for a facility seeking a license extension shall
address the impacts of continued operations over the period for
which approval is sought.
Sec. 5. [PERSONS LIVING NEAR A NUCLEAR FACILITY; HEALTH
STUDY.]
The commissioner of health shall review data collected by
the department, and in the context of other relevant information
developed by the National Institutes of Health and other
entities, report to the legislature by January 1, 2004, on
whether a further health study funded by the owner of the
Prairie Island nuclear facility is necessary.
Sec. 6. [EFFECTIVE DATE.]
This article is effective the day following final enactment.
ARTICLE 2
RENEWABLE ENERGY DEVELOPMENT
Section 1. Minnesota Statutes 2002, section 116C.779, is
amended to read:
116C.779 [FUNDING FOR RENEWABLE DEVELOPMENT.]
Subdivision 1. [RENEWABLE DEVELOPMENT ACCOUNT.] (a) The
public utility that operates owns the Prairie Island nuclear
generating plant must transfer to a renewable development
account $500,000 each year for each dry cask containing spent
fuel that is located at the independent spent fuel storage
installation at Prairie Island after January 1, 1999 $16,000,000
annually each year the plant is in operation, and $7,500,000
each year the plant is not in operation if ordered by the
commission pursuant to paragraph (c). The fund transfer must be
made if nuclear waste is stored in a dry cask at the independent
spent fuel storage facility at Prairie Island for any part of a
year. Funds in the account may be expended only for development
of renewable energy sources. Preference must be given to
development of renewable energy source projects located within
the state.
(b) Expenditures from the account may only be made after
approval by order of the public utilities commission upon a
petition by the public utility.
(c) After discontinuation of operation of the Prairie
Island nuclear plant and each year spent nuclear fuel is stored
in dry cask at the Prairie Island facility, the commission shall
require the public utility to pay $7,500,000 for any year in
which the commission finds, by the preponderance of the
evidence, that the public utility did not make a good faith
effort to remove the spent nuclear fuel stored at Prairie Island
to a permanent or interim storage site out of the state. This
determination shall be made at least every two years.
Subd. 2. [RENEWABLE ENERGY PRODUCTION INCENTIVE.] (a)
Until January 1, 2018, up to $6,000,000 annually must be
allocated from available funds in the account to fund renewable
energy production incentives. $4,500,000 of this annual amount
is for incentives for up to 100 megawatts of electricity
generated by wind energy conversion systems that are eligible
for the incentives under section 216C.41. The balance of this
amount, up to $1,500,000 annually, may be used for production
incentives for on-farm biogas recovery facilities that are
eligible for the incentive under section 216C.41 or for
production incentives for other renewables, to be provided in
the same manner as under section 216C.41. Any portion of the
$6,000,000 not expended in any calendar year for the incentive
is available for other spending purposes under this section.
This subdivision does not create an obligation to contribute
funds to the account.
(b) The department of commerce shall determine eligibility
of projects under section 216C.41 for the purposes of this
subdivision. At least quarterly, the department of commerce
shall notify the public utility of the name and address of each
eligible project owner and the amount due to each project under
section 216C.41. The public utility shall make payments within
15 working days after receipt of notification of payments due.
Sec. 2. [216B.013] [HYDROGEN ENERGY ECONOMY GOAL.]
It is a goal of this state that Minnesota move to hydrogen
as an increasing source of energy for its electrical power,
heating, and transportation needs.
Sec. 3. Minnesota Statutes 2002, section 216B.1691, is
amended to read:
216B.1691 [RENEWABLE ENERGY OBJECTIVES.]
Subdivision 1. [DEFINITIONS.] (a) Unless otherwise
specified in law, "eligible energy technology" means an energy
technology that:
(1) generates electricity from the following renewable
energy sources: solar,; wind,; hydroelectric with a capacity of
less than 60 megawatts,; hydrogen, provided that after January
1, 2010, the hydrogen must be generated from the resources
listed in this clause; or biomass, which includes an energy
recovery facility used to capture the heat value of mixed
municipal solid waste or refuse-derived fuel from mixed
municipal solid waste as a primary fuel; and
(2) was not mandated by state law Laws 1994, chapter 641,
or by commission order enacted or issued pursuant to that
chapter prior to August 1, 2001.
(b) "Electric utility" means a public utility providing
electric service, a generation and transmission cooperative
electric association, or a municipal power agency.
(c) "Total retail electric sales" means the kilowatt-hours
of electricity sold in a year by an electric utility to retail
customers of the electric utility or to a distribution utility
for distribution to the retail customers of the distribution
utility.
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 customers 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 utility's
total retail electric sales is generated by eligible energy
technologies;
(2) the amount provided under clause (1) is increased by
one percent of the utility's total retail electric sales each
year until 2015; and
(3) ten percent of the electric energy provided to retail
customers in Minnesota is generated by eligible energy
technologies; and.
(4) (b) Of the eligible energy technology generation
required under paragraph (a), clauses (1) and (2), at least not
less than 0.5 percent of the energy must be generated by biomass
energy technologies, including an energy recovery facility used
to capture the heat value of mixed municipal solid waste or
refuse-derived fuel from mixed municipal solid waste as a
primary fuel, by 2010 and one percent by 2015 2005. By 2010,
one percent of the eligible technology generation required under
paragraph (a), clauses (1) and (2), shall be generated by
biomass energy technologies. An energy recovery facility used
to capture the heat value of mixed municipal solid waste or
refuse-derived fuel from mixed municipal solid waste, with a
power sales agreement in effect as of the date of final
enactment of this act that terminates after December 31, 2010,
does not qualify as an eligible energy technology unless the
agreement provides for rate adjustment in the event the facility
qualifies as a renewable energy source.
(b) (c) By June 1, 2004, and as needed thereafter, the
commission shall issue an order detailing the criteria and
standards by which it will measure an electric utility's efforts
to meet the renewable energy objectives of this section to
determine whether the utility is making the required good faith
effort. In this order, the commission shall include criteria
and standards that protect against undesirable impacts on the
reliability of the utility's system and economic impacts on the
utility's ratepayers and that consider technical feasibility.
(d) In its order under paragraph (c), the commission shall
provide for a weighted scale of how energy produced by various
eligible energy technologies shall count toward a utility's
objective. In establishing this scale, the commission shall
consider the attributes of various technologies and fuels, and
shall establish a system that grants multiple credits toward the
objectives for those technologies and fuels the commission
determines is in the public interest to encourage.
Subd. 3. [UTILITY PLANS FILED WITH THE COMMISSION.] (a)
Each electric utility shall report on its plans, activities, and
progress with regard to these objectives in their its filings
under section 216B.2422 or in a separate report submitted to the
commission every two years, whichever is more frequent,
demonstrating to the commission that the utility is making the
required good faith effort. In its resource plan or a separate
report, each electric utility shall provide a description of:
(1) the status of the utility's renewable energy mix
relative to the good faith objective;
(2) efforts taken to meet the objective;
(3) any obstacles encountered or anticipated in meeting the
objective; and
(4) potential solutions to the obstacles.
(c) (b) The commission, in consultation with the
commissioner of commerce, shall compile the information provided
to the commission under paragraph (b) (a), 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 of each odd-numbered year.
Subd. 4. [RENEWABLE ENERGY CREDITS.] (a) To facilitate
compliance with this section, the commission, by rule or order,
may establish a program for tradable credits for electricity
generated by an eligible energy technology. In doing so, the
commission shall implement a system that constrains or limits
the cost of credits, taking care to ensure that such a system
does not undermine the market for those credits.
(b) In lieu of generating or procuring energy directly to
satisfy the renewable energy objective of this section, an
electric utility may purchase sufficient renewable energy
credits, issued pursuant to this subdivision, to meet its
objective.
(c) Upon the passage of a renewable energy standard,
portfolio, or objective in a bordering state that includes a
similar definition of eligible energy technology or renewable
energy, the commission may facilitate the trading of renewable
energy credits between states.
Subd. 5. [TECHNOLOGY BASED ON FUEL COMBUSTION.] (a)
Electricity produced by fuel combustion may only count towards a
utility's objectives if the generation facility:
(1) was constructed in compliance with new source
performance standards promulgated under the federal Clean Air
Act for a generation facility of that type; or
(2) employs the maximum achievable or best available
control technology available for a generation facility of that
type.
(b) An eligible energy technology may blend or co-fire a
fuel listed in subdivision 1, paragraph (a), clause (1), with
other fuels in the generation facility, but only the percentage
of electricity that is attributable to a fuel listed in that
clause can be counted towards an electric utility's renewable
energy objectives.
Subd. 6. [ELECTRIC UTILITY THAT OWNS A NUCLEAR GENERATION
FACILITY.] (a) An electric utility that owns a nuclear
generation facility, as part of its good-faith effort under this
subdivision and subdivision 2, shall deploy an additional 300
megawatts of nameplate capacity of wind energy conversion
systems by 2010, beyond the amount of wind energy capacity to
which the utility is required by law or commission order as of
May 1, 2003. At least 100 megawatts of this capacity is to be
wind energy conversion systems of two megawatts or less, which
shall not be eligible for the production incentive under section
216C.41. To the greatest extent technically feasible and
economic, these 300 megawatts of wind energy capacity are to be
distributed geographically throughout the state. The utility
may opt to own, construct, and operate up to 100 megawatts of
this wind energy capacity, except that the utility may not own,
construct, or operate any of the facilities that are under two
megawatts of nameplate capacity. The deployment of the wind
energy capacity under this subdivision must be consistent with
the outcome of the engineering study required under section 21.
(b) The renewable energy objective set forth in subdivision
2 shall be a requirement for the public utility that owns the
Prairie Island nuclear generation plant. The objective is a
requirement subject to resource planning and least cost planning
requirements in section 216B.2422, unless implementation of the
objective can reasonably be shown to jeopardize the reliability
of the electric system. The least cost planning analysis must
include the costs of ancillary services and other necessary
generation and transmission upgrades.
(c) Also as part of its good faith effort under this
section, the utility that owns a nuclear generation facility is
to enter into a power purchase agreement by January 1, 2004, for
ten to 20 megawatts of biomass energy and capacity at an
all-inclusive price not to exceed $55 per megawatt-hour, for a
project described in section 216B.2424, subdivision 5, paragraph
(e), clause (2). The project must be operational and producing
energy by June 30, 2005.
Sec. 4. [216B.1693] [CLEAN ENERGY TECHNOLOGY.]
(a) If the commission finds that a clean energy technology
is or is likely to be a least cost resource, including the costs
of ancillary services and other generation and transmission
upgrades necessary, the utility that owns a nuclear generating
facility shall supply at least two percent of the electric
energy provided to retail customers from clean energy technology.
(b) Electric energy required by this section shall be
supplied by the innovative energy project defined in article 4,
section 1, subdivision 1, unless the commission finds doing so
contrary to the public interest.
(c) For purposes of this section, "clean energy technology"
means a technology utilizing coal as a primary fuel in a highly
efficient combined-cycle configuration with significantly
reduced sulfur dioxide, nitrogen oxide, particulate, and mercury
emissions from those of traditional technologies.
(d) This section expires January 1, 2012.
Sec. 5. Minnesota Statutes 2002, section 216B.241, is
amended by adding a subdivision to read:
Subd. 6. [RENEWABLE ENERGY RESEARCH.] (a) A public utility
that owns a nuclear generation facility in the state shall spend
five percent of the total amount that utility is required to
spend under this section to support basic and applied research
and demonstration activities at the University of Minnesota
Initiative for Renewable Energy and the Environment for the
development of renewable energy sources and technologies. The
utility shall transfer the required amount to the University of
Minnesota on or before July 1 of each year and that annual
amount shall be deducted from the amount of money the utility is
required to spend under this section. The University of
Minnesota shall transfer at least ten percent of these funds to
at least one rural campus or experiment station.
(b) Research funded under this subdivision shall include:
(1) development of environmentally sound production,
distribution, and use of energy, chemicals, and materials from
renewable sources;
(2) processing and utilization of agricultural and forestry
plant products and other bio-based, renewable sources as a
substitute for fossil-fuel-based energy, chemicals, and
materials using a variety of means including biocatalysis,
biorefining, and fermentation;
(3) conversion of state wind resources to hydrogen for
energy storage and transportation to areas of energy demand;
(4) improvements in scalable hydrogen fuel cell
technologies; and
(5) production of hydrogen from bio-based, renewable
sources; and sequestration of carbon.
(c) Notwithstanding other law to the contrary, the utility
may, but is not required to, spend more than two percent of its
gross operating revenues from service provided in this state
under this section or section 216B.2411.
(d) This subdivision expires June 30, 2008.
Sec. 6. Minnesota Statutes 2002, section 216B.2411, is
amended to read:
216B.2411 [DISTRIBUTED ENERGY RESOURCES.]
Subdivision 1. [GENERATION PROJECTS.] (a) To the extent
that cost-effective projects are available in the service
territory of a utility or association providing conservation
services under section 216B.241, the utility or association
shall Any municipality or rural electric association providing
electric service and subject to section 216B.241 that is meeting
the objectives under section 216B.1691 may, and each public
utility may, use five percent of the total amount to be spent on
energy conservation improvements under section 216B.241, on:
(1) projects in Minnesota to construct an electric
generating facility that utilizes eligible renewable fuels
energy sources as defined in section 216B.2422, subdivision 1 2,
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 in Minnesota 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 section 216B.02,
subdivision 4, projects under this section must be considered
energy conservation improvements as defined in section
216B.241. For cooperative electric associations and municipal
utilities, projects under this section must be considered
load-management activities described in section 216B.241,
subdivision 1, paragraph (i).
(d) This section expires May 30, 2006.
Subd. 2. [DEFINITIONS.] (a) For the purposes of this
section, the terms defined in this subdivision and section
216B.241, subdivision 1, have the meanings given them.
(b) "Eligible renewable energy sources" means fuels and
technologies to generate electricity through the use of any of
the resources listed in section 216B.1691, subdivision 1,
paragraph (a), clause (1), except that the term "biomass" has
the meaning provided under paragraph (c).
(c) "Biomass" includes:
(1) methane or other combustible gases derived from the
processing of plant or animal material;
(2) alternative fuels derived from soybean and other
agricultural plant oils or animal fats;
(3) combustion of barley hulls, corn, soy-based products,
or other agricultural products;
(4) wood residue from the wood products industry in
Minnesota or other wood products such as short-rotation woody or
fibrous agricultural crops; and
(5) landfill gas, mixed municipal solid waste, and
refuse-derived fuel from mixed municipal solid waste.
Subd. 3. [OTHER PROVISIONS.] (a) Electricity generated by
a facility constructed with funds provided under this section
and using an eligible renewable energy source may be counted
towards the renewable energy objectives in section 216B.1691,
subject to the provisions of that section.
(b) Two or more entities may pool resources under this
section to provide assistance jointly to proposed eligible
renewable energy projects. The entities shall negotiate and
agree among themselves for allocation of benefits associated
with a project, such as the ability to count energy generated by
a project toward a utility's renewable energy objectives under
section 216B.1691. The entities shall provide a summary of the
allocation of benefits to the commissioner. A utility may spend
funds under this section for projects in Minnesota that are
outside the service territory of the utility.
Sec. 7. Minnesota Statutes 2002, section 216B.2424,
subdivision 5, is amended to read:
Subd. 5. [MANDATE.] (a) A public utility, as defined in
section 216B.02, subdivision 4, that operates a nuclear-powered
electric generating plant within this state must construct and
operate, purchase, or contract to construct and operate (1) by
December 31, 1998, 50 megawatts of electric energy installed
capacity generated by farm-grown closed-loop biomass scheduled
to be operational by December 31, 2001; and (2) by December 31,
1998, an additional 75 megawatts of installed capacity so
generated scheduled to be operational by December 31, 2002.
(b) Of the 125 megawatts of biomass electricity installed
capacity required under this subdivision, no more than 50 55
megawatts of this capacity may be provided by a facility that
uses poultry litter as its primary fuel source and any such
facility:
(1) need not use biomass that complies with the definition
in subdivision 1;
(2) must enter into a contract with the public utility for
such capacity, that has an average purchase price per megawatt
hour over the life of the contract that is equal to or less than
the average purchase price per megawatt hour over the life of
the contract in contracts approved by the public utilities
commission before April 1, 2000, to satisfy the mandate of this
section, and file that contract with the public utilities
commission prior to September 1, 2000; and
(3) must schedule such capacity to be operational by
December 31, 2002.
(c) Of the total 125 megawatts of biomass electric energy
installed capacity required under this section, no more than 75
megawatts may be provided by a single project.
(d) Of the 75 megawatts of biomass electric energy
installed capacity required under paragraph (a), clause (2), no
more than 25 33 megawatts of this capacity may be provided by a
St. Paul district heating and cooling system cogeneration
facility utilizing waste wood as a primary fuel source. The St.
Paul district heating and cooling system cogeneration facility
need not use biomass that complies with the definition in
subdivision 1.
(e) The public utility must accept and consider on an equal
basis with other biomass proposals:
(1) a proposal to satisfy the requirements of this section
that includes a project that exceeds the megawatt capacity
requirements of either paragraph (a), clause (1) or (2), and
that proposes to sell the excess capacity to the public utility
or to other purchasers; and
(2) a proposal for a new facility to satisfy more than ten
but not more than 20 megawatts of the electrical generation
requirements by a small business-sponsored independent power
producer facility to be located within the northern quarter of
the state, which means the area located north of Constitutional
Route No. 8 as described in section 161.114, subdivision 2, and
that utilizes biomass residue wood, sawdust, bark, chipped wood,
or brush to generate electricity. A facility described in this
clause is not required to utilize biomass complying with the
definition in subdivision 1, but must have the capacity required
by this clause operational by December 31, 2002.
(f) If a public utility files a contract with the
commission for electric energy installed capacity that uses
poultry litter as its primary fuel source, the commission must
do a preliminary review of the contract to determine if it meets
the purchase price criteria provided in paragraph (b), clause
(2), of this subdivision. The commission shall perform its
review and advise the parties of its determination within 30
days of filing of such a contract by a public utility. A public
utility may submit by September 1, 2000, a revised contract to
address the commission's preliminary determination.
(g) The commission shall finally approve, modify, or
disapprove no later than July 1, 2001, all contracts submitted
by a public utility as of September 1, 2000, to meet the mandate
set forth in this subdivision.
(h) If a public utility subject to this section exercises
an option to increase the generating capacity of a project in a
contract approved by the commission prior to April 25, 2000, to
satisfy the mandate in this subdivision, the public utility must
notify the commission by September 1, 2000, that it has
exercised the option and include in the notice the amount of
additional megawatts to be generated under the option
exercised. Any review by the commission of the project after
exercise of such an option shall be based on the same criteria
used to review the existing contract.
(i) A facility specified in this subdivision qualifies for
exemption from property taxation under section 272.02,
subdivision 43.
Sec. 8. Minnesota Statutes 2002, section 216B.2425, is
amended by adding a subdivision to read:
Subd. 7. [TRANSMISSION NEEDED TO SUPPORT RENEWABLE
RESOURCES.] Each entity subject to this section shall determine
necessary transmission upgrades to support development of
renewable energy resources required to meet objectives under
section 216B.1691 and shall include those upgrades in its report
under subdivision 2.
Sec. 9. Minnesota Statutes 2002, section 216C.41,
subdivision 1, is amended to read:
Subdivision 1. [DEFINITIONS.] (a) The definitions in this
subdivision apply to this section.
(b) "Qualified hydroelectric facility" means a
hydroelectric generating facility in this state that:
(1) is located at the site of a dam, if the dam was in
existence as of March 31, 1994; and
(2) begins generating electricity after July 1, 1994, or
generates electricity after substantial refurbishing of a
facility that begins after July 1, 2001.
(c) "Qualified wind energy conversion facility" means a
wind energy conversion system in this state that:
(1) produces two megawatts or less of electricity as
measured by nameplate rating and begins generating electricity
after December 31, 1996, and before July 1, 1999;
(2) begins generating electricity after June 30, 1999,
produces two megawatts or less of electricity as measured by
nameplate rating, and is:
(i) located within one county and owned by a natural person
who an entity that is not prohibited from owning agricultural
land under section 500.24 that owns the land where the facility
is sited;
(ii) owned by a Minnesota small business as defined in
section 645.445;
(iii) owned by a Minnesota nonprofit organization; or
(iv) owned by a tribal council if the facility is located
within the boundaries of the reservation; or
(v) owned by a Minnesota municipal utility or a Minnesota
cooperative electric association; or
(vi) owned by a Minnesota political subdivision or local
government, including, but not limited to, a county, statutory
or home rule charter city, town, school district, or any other
local or regional governmental organization such as a board,
commission, or association; or
(3) begins generating electricity after June 30, 1999,
produces seven megawatts or less of electricity as measured by
nameplate rating, and:
(i) is owned by a cooperative organized under chapter
308A other than a Minnesota cooperative electric association;
and
(ii) all shares and membership in the cooperative are held
by natural persons or estates, at least 51 percent of whom
reside in a county or contiguous to a county where the wind
energy production facilities of the cooperative are located an
entity that is not prohibited from owning agricultural land
under section 500.24.
(d) "Qualified on-farm biogas recovery facility" means an
anaerobic digester system that:
(1) is located at the site of an agricultural operation;
(2) is owned by a natural person who an entity that is not
prohibited from owning agricultural land under section 500.24
that owns or rents the land where the facility is located; and
(3) begins generating electricity after July 1, 2001.
(e) "Anaerobic digester system" means a system of
components that processes animal waste based on the absence of
oxygen and produces gas used to generate electricity.
Sec. 10. Minnesota Statutes 2002, section 216C.41,
subdivision 2, is amended to read:
Subd. 2. [INCENTIVE PAYMENT; APPROPRIATION.] (a) Incentive
payments must be made according to this section to (1) a
qualified on-farm biogas recovery facility, (2) the owner or
operator of a qualified hydropower facility or qualified wind
energy conversion facility for electric energy generated and
sold by the facility, (3) a publicly owned hydropower facility
for electric energy that is generated by the facility and used
by the owner of the facility outside the facility, or (4) the
owner of a publicly owned dam that is in need of substantial
repair, for electric energy that is generated by a hydropower
facility at the dam and the annual incentive payments will be
used to fund the structural repairs and replacement of
structural components of the dam, or to retire debt incurred to
fund those repairs.
(b) Payment may only be made upon receipt by the
commissioner of finance of an incentive payment application that
establishes that the applicant is eligible to receive an
incentive payment and that satisfies other requirements the
commissioner deems necessary. The application must be in a form
and submitted at a time the commissioner establishes.
(c) There is annually appropriated from the general fund to
the commissioner of commerce sums sufficient to make the
payments required under this section, other than the amounts
funded by the renewable development account as specified in
subdivision 5a.
Sec. 11. Minnesota Statutes 2002, 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, 2005;
(2) from a qualified wind energy conversion facility that
is operational and generating electricity before January 1, 2005
2007; or
(3) from a qualified on-farm biogas recovery facility from
July 1, 2001, through December 31, 2015 2017.
Sec. 12. Minnesota Statutes 2002, section 216C.41,
subdivision 4, is amended to read:
Subd. 4. [PAYMENT PERIOD.] (a) A facility may receive
payments under this section for a ten-year period. No payment
under this section may be made for electricity generated:
(1) by a qualified hydroelectric facility after December
31, 2015 2017;
(2) by a qualified wind energy conversion facility after
December 31, 2015 2017; or
(3) by a qualified on-farm biogas recovery facility after
December 31, 2015.
(b) The payment period begins and runs consecutively from
the first year in which electricity generated from the facility
is eligible for incentive payment the date the facility begins
generating electricity or, in the case of refurbishment of a
hydropower facility, after substantial repairs to the hydropower
facility dam funded by the incentive payments are initiated.
Sec. 13. Minnesota Statutes 2002, section 216C.41,
subdivision 5, is amended to read:
Subd. 5. [AMOUNT OF PAYMENT; WIND FACILITIES LIMIT.] (a)
An incentive payment is based on the number of kilowatt hours of
electricity generated. The amount of the payment is:
(1) for a facility described under subdivision 2, paragraph
(a), clause (4), 1.0 cent per kilowatt hour; and
(2) for all other facilities, 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) For wind energy conversion systems installed and
contracted for after 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. 14. Minnesota Statutes 2002, section 216C.41, is
amended by adding a subdivision to read:
Subd. 5a. [RENEWABLE DEVELOPMENT ACCOUNT.] The department
of commerce shall authorize payment of the renewable energy
production incentive to wind energy conversion systems for 100
megawatts of nameplate capacity in addition to the capacity
authorized under subdivision 5 and to on-farm biogas recovery
facilities. Payment of the incentive shall be made from the
renewable energy development account as provided under section
116C.779, subdivision 2.
Sec. 15. Minnesota Statutes 2002, section 216C.41, is
amended by adding a subdivision to read:
Subd. 7. [ELIGIBILITY PROCESS.] (a) A qualifying project
is eligible for the incentive on the date the commissioner
receives:
(1) an application for payment of the incentive;
(2) one of the following:
(i) a copy of a signed power purchase agreement;
(ii) a copy of a binding agreement other than a power
purchase agreement to sell electricity generated by the project
to a third person; or
(iii) if the project developer or owner will sell
electricity to its own members or customers, a copy of the
purchase order for equipment to construct the project with a
delivery date and a copy of a signed receipt for a nonrefundable
deposit; and
(3) any other information the commissioner deems necessary
to determine whether the proposed project qualifies for the
incentive under this section.
(b) The commissioner shall determine whether a project
qualifies for the incentive and respond in writing to the
applicant approving or denying the application within 15 working
days of receipt of the information required in paragraph (a). A
project that is not operational within 18 months of receipt of a
letter of approval is no longer approved for the incentive. The
commissioner shall notify an applicant of potential loss of
approval not less than 60 days prior to the end of the 18-month
period. Eligibility for a project that loses approval may be
reestablished as of the date the commissioner receives a new
completed application.
Sec. 16. [216B.2424] [Subd. 5a.] [REDUCTION OF BIOMASS MANDATE.]
Notwithstanding subdivision 5, the
biomass electric energy mandate shall be reduced from 125
megawatts to 110 megawatts. The public utilities commission
shall approve a request pending before the public utilities
commission as of May 15, 2003, for an amendment and assignment
of a contract for power from a facility that uses
short-rotation, woody crops as its primary fuel previously
approved to satisfy a portion of the biomass mandate if the
developer of the project agrees to reduce the size of its
project from 50 megawatts to 35 megawatts, while maintaining a
price for energy at or below the current contract price.
Sec. 17. [RENEWABLE DEVELOPMENT FUND ADMINISTRATION.]
The public utilities commission may review the
appropriateness of the transfer of the administration of the
renewable development account under Minnesota Statutes, section
116C.779, to an independent administrator initially selected by
the commissioner of commerce and answerable to a board of
directors that includes representatives from the public utility
currently administering the fund, environmental organizations,
legislators, representatives of residential and business
consumers, the Mdewakanton Dakota community, and other affected
communities. Upon petition, the commission may approve the
transfer if, upon completion of the review, the transfer is
consistent with the public interest.
Sec. 18. [HYDROGEN ECONOMY RESEARCH.]
(a) Notwithstanding Minnesota Statutes, section 116C.779,
subdivision 1, paragraph (b), $10,000,000 from the renewable
development account established in Minnesota Statutes, section
116C.779, from unobligated funds in the account as of June 30,
2003, shall be distributed to the University of Minnesota
Initiative for Renewable Energy and the Environment to support
basic and applied research and demonstration activities at the
university. These funds shall be transferred to the University
of Minnesota on or before July 1, 2003. The university shall
ensure that at least $3,000,000 of these funds are available for
basic and applied research, for construction and deployment of
research technologies, or for other purposes in support of this
research, at one rural campus or experiment station.
(b) Research funded under this section must focus on:
(1) development of environmentally sound production,
distribution, and use of energy, chemicals, and materials from
renewable resources;
(2) processing and utilization of agricultural and forestry
plant products and other bio-based, renewable sources as a
substitute for fossil-fuel-based energy, chemicals, and
materials using a variety of means including biocatalysis,
biorefining, and fermentation;
(3) conversion of state wind resources to hydrogen for
energy storage and transportation to areas of energy demand;
(4) improvements in scalable hydrogen fuel cell
technologies; and
(5) production of hydrogen from bio-based, renewable
sources; and sequestration of carbon.
Sec. 19. [DEPARTMENT OF TRADE AND ECONOMIC DEVELOPMENT;
PROGRAM DEVELOPMENT.]
Subdivision 1. [DEVELOPMENT OF BUSINESSES ENGAGED IN
HYDROGEN PRODUCTION.] The department of trade and economic
development must develop a targeted program to promote and
encourage the development and attraction of businesses engaged
in the biocatalysis of agricultural and forestry plant products
for the production of hydrogen, the manufacture of hydrogen fuel
cells, and hydrogen electrolysis from renewable energy sources.
The program may make use of existing departmental programs,
either alone or in combination. The department shall report to
the legislature by January 15, 2004, on legislative changes or
additional funding needed, if any, to accomplish the purposes of
this section.
Subd. 2. [ENERGY INNOVATION ZONES.] (a) The commissioner
of trade and economic development, in consultation with the
commissioners of commerce and revenue, shall develop a plan to
designate not more than three energy innovation zones to spur
the development of fuel cells, fuel cell components, hydrogen
infrastructure, and other energy efficiency and renewable energy
technologies in the state. In developing the criteria for the
designations, the commissioner shall consider:
(1) the availability of business, academic, and government
partners;
(2) the likelihood of establishing a distributed, renewable
energy microgrid to power the zone, providing below-market
electricity and heat to businesses from within the zone;
(3) the prospect of tenants for the zone that will
represent net new jobs to the state; and
(4) the likelihood of the production, storage,
distribution, and use of hydrogen, including its use in fuel
cells, for electricity and heat.
(b) Energy under paragraph (a), clause (2), must come from
one or more of the following renewable sources: wind, water,
sun, biomass, not including municipal solid waste, or hydrogen
reformed from natural gas up to 2010.
(c) The plan must allow for interested parties to form
energy innovation cooperatives. In addition, the commissioner
must consider the feasibility of the sale of energy innovation
bonds for the construction of qualifying facilities.
(d) In drafting the plan, the commissioner must consider
incentives for investment in the zone, including:
(1) subsidization of construction of qualifying facilities;
(2) long-term contracts for market-rate heat and power;
(3) streamlined interconnection to the existing power grid;
(4) exemptions from property tax;
(5) expedited permitting;
(6) methods for providing technical assistance; and
(7) other methods of encouraging the development and use of
fuel cell and hydrogen generation technologies.
(e) The commissioner shall report to the legislature by
January 15, 2004, on legislative changes and necessary funding
to accomplish the purposes of this subdivision.
Sec. 20. [DEMONSTRATION PROJECT.]
(a) The department of commerce, in cooperation with the
department of trade and economic development, must develop and
issue a request for proposal for the construction of a
hydrogen-to-electricity demonstration project with the following
components:
(1) commercial-scale windmill-powered electrolysis of water
to hydrogen;
(2) on-site storage of hydrogen and fuel cells for
hydrogen-to-electricity conversion to maintain the supply of
electricity in the absence of wind;
(3) a hydrogen pipeline of less than ten miles to a public
facility demonstration site; and
(4) a public facility with on-site hydrogen fuel cells
providing hydrogen to electricity and, if practicable,
heating/cooling function.
(b) For purposes of this section, a "public facility" is a
municipal building, public school, state college or university,
or other public building.
Sec. 21. [INDEPENDENT STUDY ON INTERMITTENT RESOURCES.]
The commission shall order the electric utility subject to
Minnesota Statutes, section 216B.1691, subdivision 7, to
contract with a firm selected by the commissioner of commerce
for an independent engineering study of the impacts of
increasing wind capacity on its system above the 825 megawatts
of nameplate wind energy capacity to which the utility is
already committed, to evaluate options available to manage the
intermittent nature of this renewable resource. The study shall
be completed by June 1, 2004, and incorporated into the
utility's next resource plan filing. The costs of the study,
options pursued by the utility to manage the intermittent nature
of wind energy, and the costs of complying with Minnesota
Statutes, section 216B.1691, subdivision 7, shall be recoverable
under Minnesota Statutes, section 216B.1645.
Sec. 22. [EFFECTIVE DATE.]
This article is effective the day following final enactment.
ARTICLE 3
OTHER PROVISIONS
Section 1. Minnesota Statutes 2002, 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 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) 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);
(5) a requirement that the customer receive referrals to
energy assistance, weatherization, conservation, or other
programs likely to reduce the customer's 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 purposes of this section, "disconnection" includes
a service or load limiter or any device that limits or
interrupts electric service in any way.
Sec. 2. Minnesota Statutes 2002, section 216B.097, is
amended by adding a subdivision to read:
Subd. 4. [APPLICATION TO SERVICE LIMITERS.] For the
purposes of this section, "disconnection" includes a service or
load limiter or any device that limits or interrupts electric
service in any way.
Sec. 3. [216B.0975] [DISCONNECTION DURING EXTREME HEAT
CONDITIONS; RECONNECTION.]
A utility may not effect an involuntary disconnection of
residential services in affected counties when an excessive heat
watch, heat advisory, or excessive heat warning issued by the
National Weather Service is in effect. For purposes of this
section, "utility" means a public utility providing electric
service, municipal utility, or cooperative electric association.
Sec. 4. Minnesota Statutes 2002, section 216B.241,
subdivision 1b, is amended to read:
Subd. 1b. [CONSERVATION IMPROVEMENT BY COOPERATIVE
ASSOCIATION OR MUNICIPALITY.] (a) This subdivision applies to:
(1) a cooperative electric association that provides retail
service to its members;
(2) a municipality that provides electric service to retail
customers; and
(3) a municipality with 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 1.5 percent of its gross
operating revenues from the sale of electricity, excluding gross
operating revenues from electric and gas service provided in the
state to large electric customer facilities; and
(2) for a cooperative electric association, 1.5 percent of
its gross operating revenues from service provided in the state,
excluding gross operating revenues from service provided in the
state to large electric customer facilities indirectly through a
distribution cooperative electric association.
(c) Each municipality and cooperative electric association
subject to this subdivision shall identify and implement energy
conservation improvement spending and investments that are
appropriate for the municipality or association, except that a
municipality or association may not spend or invest for energy
conservation improvements that directly benefit a large electric
customer facility for which the commissioner has issued an
exemption under subdivision 1a, paragraph (b).
(d) Each municipality and cooperative electric association
subject to this subdivision may spend and invest annually up to
ten percent of the total amount required to be spent and
invested on energy conservation improvements under this
subdivision on research and development projects that meet the
definition of energy conservation improvement in subdivision 1
and that are funded directly by the municipality or cooperative
electric association.
(e) Load-management activities 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 that provides energy services to cooperative
electric associations that provide electric service at retail to
consumers may invest in energy conservation improvements on
behalf of the associations it serves and may fulfill the
conservation, spending, reporting, and energy savings goals on
an aggregate basis. A municipal power agency or other
not-for-profit entity that provides energy service to municipal
utilities that provide electric service at retail may invest in
energy conservation improvements on behalf of the municipal
utilities it serves and may fulfill the conservation, spending,
reporting, and energy savings goals on an aggregate basis, under
an agreement between the municipal power agency or
not-for-profit entity and each municipal utility for funding the
investments.
(g) By June 1, 2002, and every two years thereafter, each
municipality or cooperative shall 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 for the previous period.
The evaluation must briefly describe each conservation program
and must specify the energy savings or increased efficiency in
the use of energy within the service territory of the utility or
association that is the result of the spending and investments.
The evaluation must analyze the cost effectiveness of the
utility's or association's conservation programs, using a list
of baseline energy and capacity savings assumptions developed in
consultation with the department.
The commissioner shall review each evaluation and make
recommendations, where appropriate, to the municipality or
association to increase the effectiveness of conservation
improvement activities. 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. The overview filed by a municipality with less than
$2,500,000 in annual gross revenues from the retail sale of
electric service may consist of a letter from the governing
board of the municipal utility to the department providing the
amount of annual conservation spending required of that
municipality and certifying that the required amount has been
spent on conservation programs pursuant to this subdivision.
(h) The commissioner shall also review each 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 at or below 50 percent of the state median
income.
(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 by
February 1 of each year.
(j) A municipality may spend up to 50 percent of its
required spending under this section to refurbish an existing
district heating or cooling system. This paragraph expires July
1, 2007.
Sec. 5. [216B.361] [TOWNSHIP AGREEMENT WITH NATURAL GAS
UTILITY.]
A township may enter into an agreement with a public
utility providing natural gas services to provide services
within a designated portion or all of the township. If a city
annexes township land for which a utility has an agreement with
a township to serve, the utility shall continue to have a
nonexclusive right to offer and provide service in the area
identified by the agreement with the township for the term of
that agreement, subject to the authority of the annexing city to
manage public rights-of-way within the city as provided in
sections 216B.36, 237.162, and 237.163.
Nothing in this section precludes a city from acquiring the
property of a public utility under sections 216B.45 to 216B.47
for the purpose of allowing the city to own and operate a
natural gas utility, or to extend natural gas and other utility
services into newly annexed areas.
Sec. 6. Minnesota Statutes 2002, section 216C.051,
subdivision 3, is amended to read:
Subd. 3. [FUTURE ENERGY SOLUTIONS; TECHNICAL AND ECONOMIC
ANALYSIS.] (a) In light of the electric energy guidelines
established in subdivision 7 and in light of existing
conservation improvement programs and plans, utility resource
plans, and other existing energy plans and analyses, the
legislative task force on energy shall undertake an analysis of
the technical and economic feasibility of an electric energy
future for the state that relies on environmentally and
economically sustainable and advantageous electric energy supply
utility resource plans and competitive bidding dockets before
the commission, the task force shall gather information and make
recommendations to the legislature regarding potential electric
energy resources. The task force shall may contract with one or
more energy policy experts and energy economists to assist it in
its analysis. The task force may not contract for service nor
employ any person who was involved in any capacity in any
portion of any proceeding before the public utilities
commission, the administrative law judge, the state court of
appeals, or the United States Nuclear Regulatory Commission
related to the dry cask storage proposal on Prairie Island. The
task force must gather information on at least the following
electric energy resources, but may expand its inquiry as
warranted by the information collected:
(1) wind energy;
(2) hydrogen as a fuel carrier produced from renewable and
fossil fuel resources;
(3) biomass;
(4) decomposition gases produced by solid waste management
facilities;
(5) solid waste as a direct fuel or refuse-derived fuel;
and
(6) clean coal technology.
(b) The analysis must address In evaluating these electric
energy resources, the task force must consider at least the
following:
(1) to the best of forecasting abilities, how much electric
generation capacity and demand for electric energy is necessary
to maintain a strong economy and a high quality of life in the
state over the next 15 to 20 years; how is this demand level
affected by achievement of the maximum reasonably feasible and
cost-effective demand side management and generation and
distribution efficiencies;
(2) what alternative forms of energy can provide a stable
supply of energy and are producible and sustainable in the state
and at what cost;
(3) what are the costs to the state and ratepayers to
ensure that new electric energy generation utilizes less
environmentally damaging sources; how do those costs change as
the time frame for development and implementation of new
generation sources is compressed;
(4) what are the implications for delivery systems for
energy produced in areas of the state that do not now have
high-volume transmission capability; are new transmission
technologies being developed that can address some of the
concerns with transmission; can a more dispersed electric
generation system lessen the need for long-distance
transmission;
(5) what are the actual costs and benefits of purchasing
electricity and fuel to generate electricity from outside the
state; what are the present costs to the state's economy of
exporting a large percentage of the state's energy dollars and
what is the future economic impact of continuing to do so;
(6) are there benefits to be had from a large immediate
investment in quickly implementing alternative electric energy
sources in terms of developing an exportable technology and/or
commodity; is it feasible to turn around the flow of dollars for
energy so that the state imports dollars and exports energy and
energy technology; what is a reasonable time frame for the shift
if it is possible;
(7) are there taxation or regulatory barriers to developing
more sustainable and less problematic electric energy
generation; what are they specifically and how can they be
specifically addressed;
(8) can an approach be developed that moves quickly to
development and implementation of alternative energy sources
that can be forgiving of interim failures but that is also
sufficiently deliberate to ensure ultimate success on a large
scale; and
(9) in what specific ways can the state assist regional
energy suppliers to accelerate phasing out energy production
processes that produce wastes or emissions that must necessarily
be carefully controlled and monitored to minimize adverse
effects on the environment and human health and to assist in
developing and implementing base load energy production that
both prevents or minimizes by its nature adverse environmental
and human health effects and utilizes resources that are
available or producible in the state;.
(10) whether there is a need to establish additional
dislocated worker assistance for workers at the Prairie Island
nuclear power plant; if so, how that assistance should be
structured;
(11) can the state monitor, evaluate, and affect federal
actions relating to permanent storage of high-level radioactive
waste; what actions by the state over what period of time would
expedite federal action to take responsibility for the waste;
(12) should the state establish a legislative oversight
commission on energy issues; should the responsibilities of an
oversight commission be coordinated with the activities of the
public utilities commission and the department of public service
and if so, how; and
(13) is it feasible to convert existing nuclear power and
coal-fired electric generating plants to utilization of energy
sources that result in significantly less environmental damage;
if so, what are the short-term and long-term costs and benefits
of doing so; how do shorter or longer time periods for
conversion affect the cost/benefit analysis.
(c) The task force must study issues related to the
transportation of spent nuclear fuel from this state to interim
or permanent repositories outside this state. The task force
must also gather information on at least the following factors,
but may expand its inquiry as warranted by the information
collected:
(1) Minnesota's actual and projected electricity demand;
(2) electricity export potential;
(3) inventory of energy resources currently used to
generate all electricity sold in Minnesota and an analysis of
the social, economic, and environmental benefits and burdens
associated with each energy resource;
(4) electricity demand savings from greater efficiency; and
(5) job growth and economic development potential.
(d) The public utility that owns the Prairie Island and
Monticello nuclear generation facilities shall update the
reports required under section 116C.772, subdivisions 3 to 5,
and shall submit those updates periodically to the public
utilities commission with the utility's resource plan filing
under section 216B.2422 and to the task force.
Sec. 7. Minnesota Statutes 2002, section 216C.051, is
amended by adding a subdivision to read:
Subd. 4a. [REPORT AND RECOMMENDATIONS.] By January 15,
2005, and every two years thereafter, the task force shall
submit a report to the chairs of the committees in the house of
representatives and the senate that have responsibility for
energy and for environmental and natural resources issues that
contains an overview of information gathered and analyses that
have been prepared, and specific recommendations, if any, for
legislative action that will ensure development and
implementation of electric energy policy that will provide the
state with adequate, renewable, and economic electric power for
the long term. The report shall also identify issues that must
be addressed to provide Minnesotans with adequate electricity
from in-state renewable energy sources for the long term and
export to adjacent states.
Sec. 8. Minnesota Statutes 2002, 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
commerce shall assess from 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 $150,000 $250,000 in a fiscal year. 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 2002, section 216C.051,
subdivision 9, is amended to read:
Subd. 9. [EXPIRATION.] This section is repealed June
30, 2005 2007.
Sec. 10. Minnesota Statutes 2002, section 216C.052,
subdivision 2, is amended to read:
Subd. 2. [ADMINISTRATIVE ISSUES.] (a) The commissioner may
select the administrator who shall serve for a four-year term.
The administrator may not have been a party or a participant in
a commission energy proceeding for at least one year prior to
selection by the commissioner. 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 $1,000,000 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.
Sec. 11. Minnesota Statutes 2002, section 216C.052,
subdivision 3, is amended to read:
Subd. 3. [ASSESSMENT AND APPROPRIATION.] In addition to
the amount noted in subdivision 2, the commissioner of commerce
shall transfer may assess utilities, using the mechanism
specified in that subdivision, up to an additional $500,000
annually of the amounts provided for in subdivision 2 to the
commissioner of administration through June 30, 2006. The
amounts assessed under this subdivision are appropriated to the
commissioner, and some or all of the amounts assessed may be
transferred to the commissioner of administration, for the
purposes provided specified in section 16B.325 and Laws 2001,
chapter 212, article 1, section 3, as needed to implement that
section those sections.
Sec. 12. [REFURBISHMENT OF METROPOLITAN GENERATING
PLANTS.]
Notwithstanding Minnesota Statutes, section 216B.1692,
subdivision 1, clause (2), and subdivision 5, paragraphs (c) and
(d), all investments in repowering, emissions reduction
technologies and equipment, and power plant rehabilitation and
life extension described in the primary metropolitan emission
reduction proposal filed with the public utilities commission in
July 2002 by the public utility that owns the Prairie Island
nuclear generation facility and currently pending before the
commission are deemed qualifying projects under Minnesota
Statutes, section 216B.1692, and all costs related to all such
investments are eligible for rider recovery under Minnesota
Statutes, section 216B.1692, subdivision 5. Upon receiving
approval by the commission, the utility shall implement the
approved proposal or justify to the commission its decision not
to do so.
Sec. 13. [CONSERVATION IMPROVEMENT PROGRAM; EVALUATION.]
Subdivision 1. [CONSERVATION IMPROVEMENT PROGRAM; GENERAL
EVALUATION.] (a) The commissioner of commerce shall contract
with the legislative auditor or other independent third party
for a review of:
(1) the relevant state statutes, to determine if
conservation requirements could be eliminated or modified to
ensure that conservation dollars are directed toward the most
cost-effective conservation investments;
(2) the relevant state rules, to determine if current rules
allow or facilitate optimum conservation practices and
procedures; and
(3) the department of commerce's conservation regulatory
processes, to determine if the regulatory review process
currently employed results in optimum conservation investments.
(b) The costs of the review under paragraph (a) may be
recovered by the department as a general administrative expense
under Minnesota Statutes, section 216C.052, subdivision 2.
Sec. 14. [LEGISLATIVE APPROVAL OF CONSUMPTIVE USE OF
WATER; PROPOSED FACILITY ROSEMOUNT.]
Pursuant to Minnesota Statutes, section 103G.265,
subdivision 3, the legislature approves the consumptive use
under a permit of more than 2,000,000 gallons per day average in
a 30-day period in Rosemount, in connection with a gas-fueled
combined-cycle electric generating facility, subject to the
commissioner of natural resources making a determination that
the water remaining in the basin of origin will be adequate to
meet the basin's need for water and approval by the commissioner
of natural resources of all applicable permits.
Sec. 15. [LEGISLATIVE APPROVAL OF CONSUMPTIVE USE OF
WATER; PROPOSED FACILITY MANKATO.]
Pursuant to Minnesota Statutes, section 103G.265,
subdivision 3, the legislature approves the consumptive use
under a permit of more than 2,000,000 gallons per day average in
a 30-day period in Mankato, in connection with a gas-fueled
combined-cycle electric generating facility, subject to the
commissioner of natural resources making a determination that
the water remaining in the basin of origin will be adequate to
meet the basin's need for water and approval by the commissioner
of natural resources of all applicable permits.
Sec. 16. [REPEALER.]
Minnesota Statutes 2002, sections 116C.80 and 216C.051,
subdivisions 1, 4, and 5, are repealed.
Sec. 17. [EFFECTIVE DATE.]
This article is effective the day following final enactment.
ARTICLE 4
INNOVATIVE ENERGY PROJECT
Section 1. [216B.1694] [INNOVATIVE ENERGY PROJECT.]
Subdivision 1. [DEFINITION.] For the purposes of this
section, the term "innovative energy project" means a proposed
energy generation facility or group of facilities which may be
located on up to three sites:
(1) that makes use of an innovative generation technology
utilizing coal as a primary fuel in a highly efficient
combined-cycle configuration with significantly reduced sulfur
dioxide, nitrogen oxide, particulate, and mercury emissions from
those of traditional technologies;
(2) that the project developer or owner certifies is a
project capable of offering a long-term supply contract at a
hedged, predictable cost; and
(3) that is designated by the commissioner of the iron
range resources and rehabilitation board as a project that is
located in the taconite tax relief area on a site that has
substantial real property with adequate infrastructure to
support new or expanded development and that has received prior
financial and other support from the board.
Subd. 2. [REGULATORY INCENTIVES.] (a) An innovative energy
project:
(1) is exempted from the requirements for a certificate of
need under section 216B.243, for the
generation facilities, and transmission infrastructure
associated with the generation facilities, but is subject to all
applicable environmental review and permitting procedures of
sections 116C.51 to 116C.69;
(2) once permitted and constructed, is eligible to increase
the capacity of the associated transmission facilities without
additional state review upon filing notice with the commission;
(3) has the power of eminent domain, which shall be limited
to the sites and routes approved by the environmental quality
board for the project facilities. The project shall be
considered a utility as defined in section
116C.52, subdivision 10, for the limited purpose of section 116C.63.
The project shall report any intent
to exercise eminent domain authority to the board;
(4) shall qualify as a "clean energy technology" as defined
in section 216B.1693;
(5) shall, prior to the approval by the commission of any
arrangement to build or expand a fossil-fuel-fired generation
facility, or to enter into an agreement to purchase capacity or
energy from such a facility for a term exceeding five years, be
considered as a supply option for the generation facility, and
the commission shall ensure such consideration and take any
action with respect to such supply proposal that it deems to be
in the best interest of ratepayers;
(6) shall make a good faith effort to secure funding from
the United States Department of Energy and the United States
Department of Agriculture to conduct a demonstration project at
the facility for either geologic or terrestrial carbon
sequestration projects to achieve reductions in facility
emissions or carbon dioxide;
(7) shall be entitled to enter into a contract with a
public utility that owns a nuclear generation facility in the
state to provide 450 megawatts of baseload capacity and energy
under a long-term contract, subject to the approval of the terms
and conditions of the contract by the commission. The
commission may approve, disapprove, amend, or modify the
contract in making its public interest determination, taking
into consideration the project's economic development benefits
to the state; the use of abundant domestic fuel sources; the
stability of the price of the output from the project; the
project's potential to contribute to a transition to hydrogen as
a fuel resource; and the emission reductions achieved compared
to other solid fuel baseload technologies; and
(8) shall be eligible for a grant from the renewable
development account, subject to the approval of the entity
administering that account, of $2,000,000 a year for five years
for development and engineering costs, including those costs
related to mercury removal technology; thermal efficiency
optimization and emission minimization; environmental impact
statement preparation and licensing; development of hydrogen
production capabilities; and fuel cell development and
utilization.
(b) This subdivision does not apply to nor affect a
proposal to add utility-owned resources that is pending on the
date of enactment of this act before the public utilities
commission or to competitive bid solicitations to provide
capacity or energy that is scheduled to be online by December
31, 2006.
Sec. 2. [EFFECTIVE DATE.]
This article is effective the day following final enactment.
Presented to the governor May 27, 2003
Signed by the governor May 29, 2003, 10:20 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes