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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

                             CHAPTER 40-H.F.No. 218 
                  An act relating to energy; extending eligibility to 
                  receive the renewable energy production incentive 
                  under certain circumstances; amending Minnesota 
                  Statutes 2004, section 216C.41, subdivision 3.  
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2004, 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 2007; 
           (2) from a qualified wind energy conversion facility that 
        is operational and generating electricity before January 1, 
        2007; or 
           (3) from a qualified on-farm biogas recovery facility from 
        July 1, 2001, through December 31, 2017. 
           Sec. 2.  [RENEWABLE DEVELOPMENT FUND; RENEWABLE ENERGY 
        PRODUCTION INCENTIVE EXTENSION.] 
           Subdivision 1.  [SCOPE.] This section applies to renewable 
        energy production incentives funded by the renewable development 
        account under Minnesota Statutes, section 116C.779.  Minnesota 
        Statutes, section 216C.41, governs the approval for and terms of 
        the incentives except as modified by this section.  
           Subd. 2.  [DEFINITION.] For the purpose of this section, 
        "lapse period" means the period from January 1, 2004, to October 
        22, 2004.  
           Subd. 3.  [PREVIOUSLY APPROVED APPLICANT.] An applicant who 
        received a letter of approval from the commissioner of commerce 
        under Minnesota Statutes, section 216C.41, subdivision 7, may, 
        if any part of the lapse period occurred within 18 months after 
        receipt of the approval, seek to extend the 18-month eligibility 
        period by submitting to the commissioner the following:  
           (1) evidence that all required interconnection and delivery 
        studies for the qualifying project have been completed and an 
        interconnection agreement signed by all the parties has been 
        executed.  If the interconnection agreement requires 
        improvements to be made to the transmission system, the 
        applicant must provide evidence that equity and debt financing 
        sufficient to pay the cost of those improvements is secured and 
        that construction of the improvements can be expected to be 
        completed by the date the proposed extension will expire; and 
           (2) documents demonstrating that the project has secured 
        equity and debt financing sufficient to complete the project by 
        the date the proposed extension will expire.  
           If the commissioner determines that the applicant has 
        complied with clauses (1) and (2), the commissioner shall, 
        within 30 days of receiving the submission, notify the applicant 
        that the 18-month period is extended by the length of time of 
        the lapse period occurring within the 18-month period, 
        notwithstanding any provision making the credit retroactive.  If 
        the federal production credit has lapsed when the commissioner 
        determines whether the applicant has made the submission 
        required by clauses (1) and (2), the commissioner shall extend 
        the 18-month eligibility period for 12 months.  
           If the commissioner determines that an applicant has failed 
        to comply with the requirement for obtaining an extension, the 
        commissioner shall notify the applicant that an extension of the 
        18-month eligibility period is denied. 
           Subd. 4.  [PREVIOUSLY UNAPPROVED PROJECTS.] An applicant 
        who filed an application prior to January 1, 2005, but who has 
        not received a letter of approval may qualify to receive the 
        incentive by making the submissions described in subdivision 3, 
        clauses (1) and (2), to the commissioner by December 31, 2005.  
        If the commissioner determines that an applicant has complied 
        with subdivision 3, clauses (1) and (2), the commissioner shall, 
        within 30 days of receiving the submission, notify the applicant 
        that the project qualifies to receive the incentive and shall 
        provide the applicant with a letter of approval. 
           An applicant receiving a letter of approval dated January 
        1, 2005, or later, must first offer for sale to the public 
        utility the electricity generated by the project and associated 
        renewable energy credits.  The parties shall negotiate a price 
        within 120 days.  The public utility shall provide its last best 
        price offer to the applicant in writing, which is binding for no 
        less than 120 days.  The applicant may negotiate with any other 
        utility and may accept a price higher than the binding price 
        offered by the public utility.  If another utility offers a 
        price equal to or lower than the binding price offered by the 
        public utility, the applicant must contract with the public 
        utility at the binding price.  For the purpose of this 
        subdivision, "public utility" means any utility operating a 
        nuclear power plant in this state. 
           Subd. 5.  [INCENTIVE AMOUNT.] The incentive for a facility 
        receiving an extension or a letter of approval under this 
        section is one cent per kilowatt hour.  
           Subd. 6.  [ADDITIONAL FUNDING.] If funds in the renewable 
        development account, allocated under Minnesota Statutes, section 
        116C.779, subdivision 2, for wind energy incentives are 
        insufficient to fully fund incentives under this section, other 
        funds in the renewable development account must be allocated to 
        make up the insufficiency.  
           Subd. 7.  [NOTICE.] The commissioner must, within 30 days 
        of the effective date of this act, notify persons eligible to 
        apply for an extension or a letter of approval under this 
        section of the provisions of this act.  
           Subd. 8.  [ADDITIONAL INCENTIVE PAYMENT.] This subdivision 
        governs the allocation of the $4,500,000 allocated annually to 
        fund incentives for up to 100 megawatts of wind power under 
        Minnesota Statutes, section 116C.779, subdivision 2.  If the 
        commissioner of commerce determines that the wind incentive 
        payments at 1.5 cents per kilowatt hour for some projects and at 
        one cent per kilowatt hour for applicants either extended or 
        receiving a letter of approval under this section does not fully 
        spend the $4,500,000 due to any reason, then the commissioner 
        shall make the incentive payment adjustment provided for in this 
        subdivision unless the commissioner finds that to do so would be 
        contrary to the public interest to encourage wind development. 
           The incentive adjustment is payable only for those wind 
        projects that received an extension under subdivision 3 and for 
        projects receiving a letter of approval under subdivision 4. 
           The commissioner shall determine the unspent balance and 
        distribute it as incentive payments on the basis of the 
        percentage of a project's kilowatt-hours energy generation of 
        the total kilowatt-hours energy generation of all projects 
        receiving an extension under subdivision 3 or a letter of 
        approval under subdivision 4.  
           A project may not receive a total of incentive payments 
        that exceeds 1.5 cents per kilowatt hour. 
           The commissioner may recalculate incentive payments more 
        than once under this subdivision. 
           Sec. 3.  [EFFECTIVE DATE.] 
           Sections 1 and 2 are effective the day following final 
        enactment. 
           Presented to the governor May 5, 2005 
           Signed by the governor May 5, 2005, 2:35 p.m.