Minnesota Session Laws - 2004, Regular Session

                            CHAPTER 216-S.F.No. 1753 
                  An act relating to utilities; modifying provisions 
                  related to wind energy systems; modifying low-income 
                  electric rate discount program; regulating 
                  conservation improvement by cooperatives and 
                  municipalities; eliminating duplicate language related 
                  to budget payment plans as a required customer option; 
                  amending Minnesota Statutes 2002, sections 123B.02, by 
                  adding a subdivision; 216B.16, subdivision 14; 
                  Minnesota Statutes 2003 Supplement, section 216B.241, 
                  subdivision 1b; repealing Minnesota Statutes 2002, 
                  section 325E.015. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2002, section 123B.02, is 
        amended by adding a subdivision to read: 
           Subd. 21.  [WIND ENERGY CONVERSION SYSTEM.] The board may 
        construct, acquire, own in whole or in part, operate, and sell 
        and retain and spend the payment received from selling energy 
        from a wind energy conversion system, as defined in section 
        216C.06, subdivision 19.  The board's share of the installed 
        capacity of the wind energy conversion systems authorized by 
        this subdivision must not exceed 3.3 megawatts of nameplate 
        capacity.  A board owning, operating, or selling energy from a 
        wind energy conversion system must integrate information about 
        wind energy conversion systems in its educational programming. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 2.  Minnesota Statutes 2002, section 216B.16, 
        subdivision 14, is amended to read: 
           Subd. 14.  [LOW-INCOME ELECTRIC RATE DISCOUNT.] A public 
        utility shall provide fund an affordability program for 
        low-income customers in an amount based on a 50 percent electric 
        rate discount on the first 300 kilowatt hours consumed in a 
        billing period for a low-income residential customer customers 
        of the utility.  For the purposes of this subdivision, 
        "low-income" means describes a customer who is receiving 
        assistance from the federal low-income home energy assistance 
        program.  The affordability program must be designed to target 
        participating customers with the lowest incomes and highest 
        energy costs in order to lower the percentage of income they 
        devote to energy bills, increase their payments, and lower costs 
        associated with collection activities on their accounts.  For 
        low-income customers who are 62 years of age or older or 
        disabled, the program must, in addition to any other program 
        benefits, include a 50 percent electric rate discount on the 
        first 300 kilowatt hours consumed in a billing period.  For the 
        purposes of this subdivision, "public utility" includes only 
        those public utilities with more than 200,000 residential 
        electric service customers.  The commission may issue orders 
        necessary to implement, administer, and recover the discount 
        rate costs of the program on a timely basis.  
           [EFFECTIVE DATE.] This section is effective July 1, 2004.  
           Sec. 3.  Minnesota Statutes 2003 Supplement, 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, on a 
        schedule determined by the commissioner, 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 and evaluation filed by a 
        municipality with less than $2,500,000 60,000,000 kilowatt hours 
        in annual gross revenues from the retail sale sales 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. 4.  [REPEALER.] 
           Minnesota Statutes 2002, section 325E.015, is repealed. 
           Presented to the governor May 15, 2004 
           Signed by the governor May 19, 2004, 10:05 a.m.