Minnesota Session Laws - 2025, 1st Special Session

CHAPTER 7--S.F.No. 2

An act

relating to energy; appropriating and transferring money for energy and renewable development account programs and activities; modifying, modernizing, and making technical changes to various provisions governing energy policy; authorizing natural gas utilities to sell extraordinary event bonds under certain circumstances;

amending Minnesota Statutes 2024, sections 116C.7792; 216B.16, subdivisions 7b, 14, 15, by adding a subdivision; 216B.2402, subdivision 16; 216B.2421, subdivision 2; 216B.62, subdivision 3, by adding a subdivision; 216C.09; 216C.10; 216C.11; 216C.12; 216C.391, subdivisions 1, 2, 3; 216C.47, subdivision 1; Laws 2023, chapter 60, article 10, section 2, subdivision 2, as amended; article 11, sections 2, subdivision 3; 3; Laws 2024, chapter 126, article 6, section 53; proposing coding for new law in Minnesota Statutes, chapter 216B.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

CLIMATE AND ENERGY FINANCE

Section 1. new text begin APPROPRIATIONS. new text end

new text begin The sums shown in the columns marked "Appropriations" are appropriated to the agencies and for the purposes specified in this article. The appropriations are from the general fund, or another named fund, and are available for the fiscal years indicated for each purpose. The figures "2026" and "2027" used in this article mean that the appropriations listed under them are available for the fiscal year ending June 30, 2026, or June 30, 2027, respectively. "The first year" is fiscal year 2026. "The second year" is fiscal year 2027. "The biennium" is fiscal years 2026 and 2027. If an appropriation in this article is enacted more than once in the 2025 regular or a special legislative session, the appropriation must be given effect only once. new text end

			new text begin APPROPRIATIONS new text end
			new text begin Available for the Year new text end
			new text begin Ending June 30 new text end
				new text begin 2026 new text end		new text begin 2027 new text end

Sec. 2. new text begin DEPARTMENT OF COMMERCE new text end

new text begin Subdivision 1. new text end new text begin Total Appropriation new text end

new text begin $ new text end

new text begin 12,644,000 new text end

new text begin $ new text end

new text begin 12,644,000 new text end

new text begin Appropriations by Fund new text end
	new text begin 2026 new text end	new text begin 2027 new text end
new text begin General new text end	new text begin 11,047,000 new text end	new text begin 11,047,000 new text end
new text begin Petroleum Tank new text end	new text begin 1,597,000 new text end	new text begin 1,597,000 new text end

new text begin The amounts that may be spent for each purpose are specified in the following subdivisions. new text end

new text begin Subd. 2. new text end new text begin Energy Resources new text end

new text begin 11,047,000 new text end

new text begin 11,047,000 new text end

new text begin (a) $150,000 the first year and $150,000 the second year are to remediate vermiculite insulation from households that are eligible for weatherization assistance under Minnesota's weatherization assistance program state plan under Minnesota Statutes, section 216C.264. Remediation must be performed in conjunction with federal weatherization assistance program services. new text end

new text begin (b) $189,000 each year is for activities associated with a utility's implementation of a natural gas innovation plan under Minnesota Statutes, section 216B.2427. new text end

new text begin (c) $500,000 each year is for a grant to the clean energy resource teams under Minnesota Statutes, section 216C.385, subdivision 2, to provide additional capacity to perform the duties specified under Minnesota Statutes, section 216C.385, subdivision 3. This appropriation may be used to reimburse reasonable costs incurred by the Department of Commerce to administer the grant. new text end

new text begin (d) $301,000 each year is to implement energy benchmarking under Minnesota Statutes, section 216C.331. new text end

new text begin (e) $164,000 each year is for activities associated with a public utility's transportation electrification plan filing under Minnesota Statutes, section 216B.1615. new text end

new text begin (f) $77,000 each year is for activities associated with appeals of consumer complaints to the commission under Minnesota Statutes, section 216B.172. new text end

new text begin (g) $961,000 each year is for activities required under Minnesota Statutes, section 216B.1641, for community solar gardens. This appropriation must be assessed directly to the public utility subject to Minnesota Statutes, section 116C.779. new text end

new text begin (h) $46,000 each year is for work to align energy transmission and distribution planning activities with opportunities along trunk highway rights-of-way. new text end

new text begin (i) $265,000 each year is to (1) participate in a Public Utilities Commission proceeding to review electric transmission line owners' plans to deploy grid-enhancing technologies, and (2) issue an order to implement the plans. The base in fiscal year 2028 is $0. new text end

new text begin The general fund base is $10,782,000 in fiscal year 2028 and $10,782,000 in fiscal year 2029. new text end

new text begin Subd. 3. new text end new text begin Petroleum Tank Release Compensation Board new text end

new text begin 1,597,000 new text end

new text begin 1,597,000 new text end

new text begin This appropriation is from the petroleum tank fund. new text end

Sec. 3. new text begin PUBLIC UTILITIES COMMISSION new text end

new text begin $ new text end

new text begin 13,330,000 new text end

new text begin $ new text end

new text begin 13,417,000 new text end

new text begin The general fund base is $13,183,000 in fiscal year 2028 and later. new text end

Sec. 4.

Laws 2023, chapter 60, article 10, section 2, subdivision 2, as amended by Laws 2024, chapter 126, article 6, section 47, is amended to read:

Subd. 2. Energy Resources

96,083,000

27,617,000

(a) $5,861,000 the first year and $6,038,000 the second year are to the division of energy resources for operating expenses.

(b) $150,000 the first year and $150,000 the second year are to remediate vermiculite insulation from households that are eligible for weatherization assistance under Minnesota's weatherization assistance program state plan under Minnesota Statutes, section 216C.264. Remediation must be done in conjunction with federal weatherization assistance program services.

(c) $1,138,000 in the first year is transferred from the general fund to the solar for schools program account under Minnesota Statutes, section 216C.375, to provide financial assistance to schools that are state colleges and universities to purchase and install solar energy generating systems. This appropriation must be expended on schools located outside the electric service territory of the public utility that is subject to Minnesota Statutes, section 116C.779. Money under this paragraph is available until June 30, 2034. Any money remaining on June 30, 2034, cancels to the general fund.

(d) $189,000 each year is for activities associated with a utility's implementation of a natural gas innovation plan under Minnesota Statutes, section 216B.2427.

(e) $15,000,000 in the first year is transferred from the general fund to the solar for schools program account in the special revenue fund for grants under the solar for schools program established under Minnesota Statutes, section 216C.375. The money under this paragraph must be expended on schools located outside the electric service territory of the public utility that is subject to Minnesota Statutes, section 116C.779.

(f) $500,000 each year is for the strengthen Minnesota homes program under Minnesota Statutes, section 65A.299, subdivision 4. Money under this paragraph is transferred from the general fund to strengthen Minnesota homes account in the special revenue fund. This is a onetime appropriation.

(g) $20,000,000 the first year and $18,737,000 the second year are for weatherization and preweatherization work to serve additional households and allow for services that would otherwise be denied due to current federal limitations related to the federal weatherization assistance program. Money under this paragraph is transferred from the general fund to the preweatherization account in the special revenue fund under Minnesota Statutes, section 216C.264, subdivision 1c. The base in fiscal years 2026 and later is $3,199,000.

(h) $15,000,000 the first year is for a grant to an investor-owned electric utility that has at least 50,000 retail electric customers, but no more than 200,000 retail electric customers, to increase the capacity and improve the reliability of an existing high-voltage direct current transmission line that runs between North Dakota and Minnesota. This is a onetime appropriation and must be used to support the cost-share component of a federal grant application to a program enacted in the federal Infrastructure Investment and Jobs Act, Public Law 117-58, and may otherwise be used to reduce the cost of the high-voltage direct current transmission project upgrade and to reimburse the reasonable costs incurred by the department to administer the grant. This appropriation is available until June 30, 2034.

(i) $300,000 the first year is for technical assistance and administrative support for the Tribal Advocacy Council on Energy under article 12, section 71. As part of the technical assistance and administrative support for the program, the commissioner must hire a Tribal liaison to support the Tribal Advocacy Council on Energy and advise the department on the development of a culturally responsive clean energy grants program based on the priorities identified by the Tribal Advocacy Council on Energy.

(j) $3,000,000 the first year is for a grant to Clean Energy Economy Minnesota for the Minnesota Energy Alley initiative to secure the state's energy and economic development future. The appropriation may be used to establish and support the initiative, provide seed funding for businesses, develop a training and development program, support recruitment of entrepreneurs to Minnesota, and secure funding from federal programs and corporate partners to establish a self-sustaining, long-term revenue model. This appropriation may be used to reimburse the reasonable costs incurred by the department to administer the grant. This is a onetime appropriation and is available until June 30, 2027.

(k) $5,000,000 the first year is transferred to the electric vehicle rebate program account to award rebates to purchase or lease eligible electric vehicles under Minnesota Statutes, section 216C.401. Rebates must be awarded under this paragraph only to eligible recipients located outside the retail electric service area of the public utility that is subject to Minnesota Statutes, section 116C.779. This is a onetime appropriation and is available until June 30, 2027.

(l) $1,000,000 the first year is to award grants under Minnesota Statutes, section 216C.402, to automobile dealers seeking certification to sell electric vehicles and to reimburse the reasonable costs incurred by the department to administer the grants. Grants must only be awarded under this paragraph to eligible dealers located outside the retail electric service area of the public utility that is subject to Minnesota Statutes, section 116C.779. This is a onetime appropriation and is available until June 30, 2027.

(m) $3,000,000 the first year is transferred to the residential electric panel upgrade grant program account established under Minnesota Statutes, section 216C.45, to award electric panel upgrade grants and to reimburse the reasonable costs incurred by the department to administer the program. Grants must be awarded under this paragraph only to owners of single-family homes or multifamily buildings located outside the electric service area of the public utility subject to Minnesota Statutes, section 116C.779. This is a onetime appropriation and is available until June 30, 2027.

(n) $500,000 the first year and $500,000 the second year are for a grant to the clean energy resource teams partnerships under Minnesota Statutes, section 216C.385, subdivision 2, to provide additional capacity to perform the duties specified under Minnesota Statutes, section 216C.385, subdivision 3. This appropriation may be used to reimburse the reasonable costs incurred by the department to administer the grant.

(o) $1,807,000 the first year and $301,000 the second year are to implement energy benchmarking under Minnesota Statutes, section 216C.331.

Of the amount appropriated under this paragraph, $750,000 the first year is to award grants to qualifying utilities that are not investor-owned utilities to support the development of technology for implementing energy benchmarking under Minnesota Statutes, section 216C.331. This is a onetime appropriation.

Of the amount appropriated in the first year under this paragraph, $756,000 the first year is for a grant to Building Owners and Managers Association Greater Minneapolis to establish partnerships with three technical colleges and high school career counselors with a goal of increasing the number of building engineers across Minnesota. This is a onetime appropriation and is available until June 30, 2028. The grant recipient must provide a detailed report describing how the grant funds were used to the chairs and ranking minority members of the legislative committees having jurisdiction over higher education by January 15 of each year until 2028. The report must describe the progress made toward the goal of increasing the number of building engineers and strategies used.

(p) $500,000 the first year is for a feasibility study to identify and process Minnesota iron resources that could be suitable for upgrading to long-term battery storage specifications. The results of the feasibility study must be submitted to the commissioner of commerce and to the chairs and ranking minority members of the house of representatives and senate committees with jurisdiction over energy policy no later than November 1, 2025. This appropriation may be used to reimburse the reasonable costs incurred to administer the study. This is a onetime appropriation.

(q) $6,000,000 the first year is for electric school bus grants under Minnesota Statutes, section 216C.374. Money under this paragraph is transferred from the general fund to the electric school bus program account. This is a onetime appropriation.

(r) $5,300,000 the first year is for electric grid resiliency grants under article 12, section 72. This appropriation may be used to reimburse the reasonable costs incurred by the department to administer the grants. This is a onetime appropriation and is available until June 30, 2028.

(s) $6,000,000 the first year is transferred to the heat pump rebate program account established under Minnesota Statutes, section 216C.46, to implement the heat pump rebate program and to reimburse the reasonable costs incurred by the department to administer the program. Of this amount:

(1) up to $1,400,000 the first year is to contract with an energy coordinator under Minnesota Statutes, section 216C.46, subdivision 5; and

(2) up to $1,400,000 the first year is to conduct contractor training and support under Minnesota Statutes, section 216C.46, subdivision 6.

(t) $1,000,000 the first year is to award air ventilation pilot program grants under Minnesota Statutes, section 123B.663, for assessments, testing, and equipment upgrades in schools, and for the department's costs to administer the program. new text begin Money under this paragraph is transferred from the general fund to the air ventilation program account. new text end This is a onetime appropriation.

(u) $500,000 the first year is for a grant to the city of Anoka for feasibility studies as described in this paragraph and design, engineering, and environmental analysis related to the repair and reconstruction of the Rum River Dam. Findings from the feasibility studies must be incorporated into the design and engineering funded by this appropriation. This appropriation is onetime and is available until June 30, 2027. This appropriation includes money for the following studies: (1) a study to assess the feasibility of adding a lock or other means for boats to traverse the dam to navigate between the lower Rum River and upper Rum River; (2) a study to assess the feasibility of constructing the dam in a manner that would facilitate recreational river surfing at the dam site; and (3) a study to assess the feasibility of constructing the dam in a manner to generate hydroelectric power.

(v) $3,000,000 the first year is for grants to install on-site energy storage systems, as defined in Minnesota Statutes, section 216B.2422, subdivision 1, paragraph (f), with a capacity of 50 kilowatt hours or less and that are located outside the electric service area of the electric utility subject to Minnesota Statutes, section 116C.779. To receive a grant under this paragraph, an owner of the energy storage system must be operating a solar energy generating system at the same site as the energy storage system or have filed an application with a utility to interconnect a solar energy generating system at the same site as the energy storage system. This appropriation may be used to reimburse the reasonable costs incurred by the department to administer the grants. This is a onetime appropriation and is available until June 30, 2027.

(w) $164,000 the second year is for activities associated with a public utility's filing a transportation electrification plan under Minnesota Statutes, section 216B.1615. The base in fiscal year 2026 and later is $164,000.

(x) $77,000 each year is for activities associated with appeals of consumer complaints to the commission under Minnesota Statutes, section 216B.172.

(y) $961,000 each year is for activities required under Minnesota Statutes, section 216B.1641 for community solar gardens. This appropriation must be assessed directly to the public utility subject to Minnesota Statutes, section 116C.779.

(z) $300,000 the first year is for the community solar garden program study required under article 12, section 73.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 5.

new text begin TRANSFERS. new text end

new text begin $1,199,000 in fiscal year 2026 and $1,199,000 in fiscal year 2027 are transferred from the general fund to the preweatherization account in the special revenue fund under Minnesota Statutes, section 216C.264, subdivision 1c. The commissioner of management and budget must include a transfer of $1,199,000 each year from the general fund to the preweatherization account in the special revenue fund in each forecast prepared under Minnesota Statutes, section 16A.103, from the effective date of this section through the February 2027 forecast. new text end

ARTICLE 2

RENEWABLE DEVELOPMENT ACCOUNT APPROPRIATIONS

Section 1. new text begin RENEWABLE DEVELOPMENT FINANCE. new text end

new text begin The sums shown in the columns marked "Appropriations" are appropriated to the agencies and for the purposes specified in this article. Notwithstanding Minnesota Statutes, section 116C.779, subdivision 1, paragraph (j), the appropriations are from the renewable development account in the special revenue fund established in Minnesota Statutes, section 116C.779, subdivision 1, and are available for the fiscal years indicated for each purpose. The figures "2026" and "2027" used in this article mean that the appropriations listed under them are available for the fiscal year ending June 30, 2026, or June 30, 2027, respectively. "The first year" is fiscal year 2026. "The second year" is fiscal year 2027. "The biennium" is fiscal years 2026 and 2027. If an appropriation in this article is enacted more than once in the 2025 regular or special legislative session, the appropriation must be given effect only once. new text end

			new text begin APPROPRIATIONS new text end
			new text begin Available for the Year new text end
			new text begin Ending June 30 new text end
				new text begin 2026 new text end		new text begin 2027 new text end

Sec. 2. new text begin DEPARTMENT OF COMMERCE new text end

new text begin Subdivision 1. new text end new text begin Total Appropriation new text end

new text begin $ new text end

new text begin 500,000 new text end

new text begin $ new text end

new text begin 100,000 new text end

new text begin The amounts that may be spent for each purpose are specified in the following subdivisions. new text end

new text begin Subd. 2. new text end new text begin "Made in Minnesota" Administration new text end

new text begin $100,000 each year is to administer the "Made in Minnesota" solar energy production incentive program under Minnesota Statutes, section 216C.417. Any unobligated amount remaining on June 30, 2027, cancels to the renewable development account. new text end

new text begin Subd. 3. new text end new text begin Microgrid Research and Application new text end

new text begin $400,000 the first year is for a grant to the University of St. Thomas Center for Microgrid Research, which must be used to: new text end

new text begin (1) increase the center's capacity to provide industry partners with opportunities to test near-commercial microgrid products on a real-world scale and to multiply opportunities for innovative research; new text end

new text begin (2) procure advanced equipment and controls to enable the extension of the university's microgrid to additional buildings; and new text end

new text begin (3) expand (i) hands-on educational opportunities for undergraduate and graduate electrical engineering students to increase understanding of microgrid operations, and (ii) partnerships with community colleges. new text end

Sec. 3. new text begin DEPARTMENT OF ADMINISTRATION new text end

new text begin $ new text end

new text begin 92,000 new text end

new text begin $ new text end

new text begin 92,000 new text end

new text begin $92,000 each year is for software and administrative costs associated with the state building energy conservation improvement revolving loan program under Minnesota Statutes, section 16B.87. new text end

Sec. 4.

Laws 2023, chapter 60, article 11, section 2, subdivision 3, is amended to read:

Subd. 3. Microgrid Research and Application

(a) $3,000,000 the first year and $400,000 the second year are for a grant to the University of St. Thomas Center for Microgrid Research for the purposes of paragraph (b). The base in fiscal year 2026 is $400,000 and $0 in fiscal year 2027. new text begin Notwithstanding Minnesota Statutes, section 16A.28, this appropriation is available until June 30, 2027. new text end

(b) The appropriations in this subdivision must be used by the University of St. Thomas Center for Microgrid Research to:

(1) increase the center's capacity to provide industry partners opportunities to test near-commercial microgrid products on a real-world scale and to multiply opportunities for innovative research;

(2) procure advanced equipment and controls to enable the extension of the university's microgrid to additional buildings; and

(3) expand (i) hands-on educational opportunities for undergraduate and graduate electrical engineering students to increase understanding of microgrid operations, and (ii) partnerships with community colleges.

(c) $4,100,000 the first year is for a grant to the University of St. Thomas Center for Microgrid Research for capacity building and matching requirements as a condition of receiving federal funds. This appropriation is available until June 30, 2027.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 5.

Laws 2023, chapter 60, article 11, section 3, is amended to read:

Sec. 3. MINNESOTA AMATEUR SPORTS COMMISSION

$

-0-

$

4,200,000

$4,200,000 the second year is to install solar arrays on an ice rink and a maintenance facility at the National Sports Center in Blaine. This is a onetime appropriation. new text begin Notwithstanding Minnesota Statutes, section 16A.28, this appropriation is available until June 30, 2027. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

ARTICLE 3

ENERGY POLICY

Section 1.

Minnesota Statutes 2024, section 116C.7792, is amended to read:

116C.7792 SOLAR ENERGY PRODUCTION INCENTIVE PROGRAM.

(a) The utility subject to section 116C.779 shall operate a program to provide solar energy production incentives for solar energy systems of no more than a total aggregate nameplate capacity of 40 kilowatts alternating current per premise. The owner of a solar energy system installed before June 1, 2018, is eligible to receive a production incentive under this section for any additional solar energy systems constructed at the same customer location, provided that the aggregate capacity of all systems at the customer location does not exceed 40 kilowatts.

(b) The program is funded by money withheld from transfer to the renewable development account under section 116C.779, subdivision 1, paragraphs (b) and (e). Program funds must be placed in a separate account for the purpose of the solar energy production incentive program operated by the utility and not for any other program or purpose.

(c) Funds allocated to the solar energy production incentive program in 2019 and 2020 remain available to the solar energy production incentive program.

(d) The following amounts are allocated to the solar energy production incentive program:

(1) $10,000,000 in 2021;

(2) $10,000,000 in 2022;

(3) $5,000,000 in 2023;

(4) $11,250,000 in 2024;

(5) $6,250,000 in 2025; and

(6) $5,000,000 each year, beginning in 2026 through 2035.

(e) Notwithstanding the Department of Commerce's November 14, 2018, decision in Docket No. E002/M-13-1015 regarding operation of the utility's solar energy production incentive program, half of the amounts allocated each year under paragraph (d), clauses (3), (4), deleted text begin and deleted text end (5), new text begin and (6), new text end must be reserved for solar energy systems whose installation meets the eligibility standards for the low-income program established in the November 14, 2018, decision or successor decisions of the department. All other program operations of the solar energy production incentive program are governed by the provisions of the November 14, 2018, decision or successor decisions of the department.

(f) Funds allocated to the solar energy production incentive program that have not been committed to a specific project at the end of a program year remain available to the solar energy production incentive program.

(g) Any unspent amount remaining on January 1, deleted text begin 2028 deleted text end new text begin 2038 new text end , must be transferred to the renewable development account.

(h) A solar energy system receiving a production incentive under this section must be sized to less than 120 percent of the customer's on-site annual energy consumption when combined with other distributed generation resources and subscriptions provided under section 216B.1641 associated with the premise. The production incentive must be paid for ten years commencing with the commissioning of the system.

(i) The utility must file a plan to operate the program with the commissioner of commerce. The utility may not operate the program until it is approved by the commissioner. A change to the program to include projects up to a nameplate capacity of 40 kilowatts or less does not require the utility to file a plan with the commissioner. Any plan approved by the commissioner of commerce must not provide an increased incentive scale over prior years unless the commissioner demonstrates that changes in the market for solar energy facilities require an increase.

Sec. 2.

Minnesota Statutes 2024, section 216B.16, is amended by adding a subdivision to read:

new text begin Subd. 1b. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, "low-income" means a household: new text end

new text begin (1) that is approved as qualified for energy assistance from the low-income home energy assistance program; new text end

new text begin (2) with a household income that is 50 percent or less of the state median income; or new text end

new text begin (3) that meets another qualification established by the commission. new text end

Sec. 3.

Minnesota Statutes 2024, section 216B.16, subdivision 7b, is amended to read:

Subd. 7b.

Transmission cost adjustment.

(a) Notwithstanding any other provision of this chapter, the commission may approve a tariff mechanism for the automatic annual adjustment of charges for the Minnesota jurisdictional costs net of associated revenues of:

(1) new transmission facilities that have been separately filed and reviewed and approved by the commission under section 216B.243 or new transmission or distribution facilities that are certified as a priority project or deemed to be a priority transmission project under section 216B.2425;

(2) new transmission facilities approved by the regulatory commission of the state in which the new transmission facilities are to be constructed, to the extent approval is required by the laws of that state, and determined by the Midcontinent Independent System Operator to benefit the utility or integrated transmission system; and

(3) charges incurred by a utility under a federally approved tariff that accrue from other transmission owners' regionally planned transmission projects that have been determined by the Midcontinent Independent System Operator to benefit the utility or integrated transmission system.

(b) Upon filing by a public utility or utilities providing transmission service, the commission may approve, reject, or modify, after notice and comment, a tariff that:

(1) allows the utility to recover on a timely basis the costs net of revenues of facilities approved under section 216B.243 or certified or deemed to be certified under section 216B.2425 or exempt from the requirements of section 216B.243;

(2) allows the utility to recover charges incurred under a federally approved tariff that accrue from other transmission owners' regionally planned transmission projects that have been determined by the Midcontinent Independent System Operator to benefit the utility or integrated transmission system. These charges must be reduced or offset by revenues received by the utility and by amounts the utility charges to other regional transmission owners, to the extent those revenues and charges have not been otherwise offset;

(3) allows the utility to recover on a timely basis the costs net of revenues of facilities approved by the regulatory commission of the state in which the new transmission facilities are to be constructed and determined by the Midcontinent Independent System Operator to benefit the utility or integrated transmission system;

(4) allows the utility to recover costs associated with distribution planning required under section 216B.2425;

(5) allows the utility to recover costs associated with investments in distribution facilities to modernize the utility's grid that have been certified by the commission under section 216B.2425;

new text begin (6) allows the utility to recover on a timely basis the costs of upgrades that are not allocated to participating distributed generation facilities under the commission order issued in docket No. E002, E015, or E017/CI-24-288; new text end

deleted text begin (6) deleted text end new text begin (7) new text end allows a return on investment at the level approved in the utility's last general rate case, unless a different return is found to be consistent with the public interest;

deleted text begin (7) deleted text end new text begin (8) new text end provides a current return on construction work in progress, provided that recovery from Minnesota retail customers for the allowance for funds used during construction is not sought through any other mechanism;

deleted text begin (8) deleted text end new text begin (9) new text end allows for recovery of other expenses if shown to promote a least-cost project option or is otherwise in the public interest;

deleted text begin (9) deleted text end new text begin (10) new text end allocates project costs appropriately between wholesale and retail customers;

deleted text begin (10) deleted text end new text begin (11) new text end provides a mechanism for recovery above cost, if necessary to improve the overall economics of the project or projects or is otherwise in the public interest; and

deleted text begin (11) deleted text end new text begin (12) new text end terminates recovery once costs have been fully recovered or have otherwise been reflected in the utility's general rates.

(c) A public utility may file annual rate adjustments to be applied to customer bills paid under the tariff approved in paragraph (b). In its filing, the public utility shall provide:

(1) a description of and context for the facilities included for recovery;

(2) a schedule for implementation of applicable projects;

(3) the utility's costs for these projects;

(4) a description of the utility's efforts to ensure the lowest costs to ratepayers for the project; and

(5) calculations to establish that the rate adjustment is consistent with the terms of the tariff established in paragraph (b).

(d) Upon receiving a filing for a rate adjustment pursuant to the tariff established in paragraph (b), the commission shall approve the annual rate adjustments provided that, after notice and comment, the costs included for recovery through the tariff were or are expected to be prudently incurred and achieve transmission system improvements at the lowest feasible and prudent cost to ratepayers.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 4.

Minnesota Statutes 2024, section 216B.16, subdivision 14, is amended to read:

Subd. 14.

Low-income electric rate discount.

A public utility shall fund an affordability program for low-income customers at a base annual funding level of $8,000,000. The annual funding level shall increase in the calendar years subsequent to each commission approval of a rate increase for the public utility's residential customers by the same percentage as the approved residential rate increase. Costs for the program shall be included in the utility's base rate. deleted text begin For the purposes of this subdivision, "low-income" describes a customer who is receiving assistance from the federal low-income home energy assistance program. deleted text end 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, lower utility service disconnections, and decrease 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 include a $15 discount in each 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 costs of the program on a timely basis.

Sec. 5.

Minnesota Statutes 2024, section 216B.16, subdivision 15, is amended to read:

Subd. 15.

Low-income affordability programs.

(a) The commission must consider ability to pay as a factor in setting utility rates and may establish affordability programs for low-income residential ratepayers in order to ensure affordable, reliable, and continuous service to low-income utility customers. A public utility serving low-income residential ratepayers who use natural gas for heating must file an affordability program with the commission. deleted text begin For purposes of this subdivision, "low-income residential ratepayers" means ratepayers who receive energy assistance from the low-income home energy assistance program (LIHEAP). deleted text end

(b) Any affordability program the commission orders a utility to implement must:

(1) lower the percentage of income that participating low-income households devote to energy bills;

(2) increase participating customer payments over time by increasing the frequency of payments;

(3) decrease or eliminate participating customer arrears;

(4) lower the utility costs associated with customer account collection activities; and

(5) coordinate the program with other available low-income bill payment assistance and conservation resources.

(c) In ordering affordability programs, the commission may require public utilities to file program evaluations that measure the effect of the affordability program on:

(1) the percentage of income that participating households devote to energy bills;

(2) service disconnections; and

(3) frequency of customer payments, utility collection costs, arrearages, and bad debt.

(d) The commission must issue orders necessary to implement, administer, and evaluate affordability programs, and to allow a utility to recover program costs, including administrative costs, on a timely basis. The commission may not allow a utility to recover administrative costs, excluding start-up costs, in excess of five percent of total program costs, or program evaluation costs in excess of two percent of total program costs. The commission must permit deferred accounting, with carrying costs, for recovery of program costs incurred during the period between general rate cases.

(e) Public utilities may use information collected or created for the purpose of administering energy assistance to administer affordability programs.

Sec. 6.

Minnesota Statutes 2024, section 216B.2402, subdivision 16, is amended to read:

Subd. 16.

Low-income household.

"Low-income household" means a household whose household income:

(1) is 80 percent or less of the area median household income for the geographic area in which the low-income household is located, as calculated by deleted text begin the United States Department of Housing and Urban Development deleted text end new text begin a body of the state or federal government new text end ; or

(2) meets the income eligibility standards, as determined by the commissioner, required for a household to receive financial assistance from a federal, state, municipal, or utility program administered or approved by the department.

Sec. 7.

Minnesota Statutes 2024, section 216B.2421, subdivision 2, is amended to read:

Subd. 2.

Large energy facility.

"Large energy facility" means:

(1) any electric power generating plant or combination of plants at a single site with a combined capacity of 50,000 kilowatts or more and transmission lines directly associated with the plant that are necessary to interconnect the plant to the transmission system;

(2) any high-voltage transmission line with a capacity of 300 kilovolts or more and greater than one mile in length in Minnesota;

(3) any high-voltage transmission line with a capacity of 100 kilovolts or more with more than ten miles of its length in Minnesota;

(4) any pipeline greater than six inches in diameter and having more than 50 miles of its length in Minnesota used for the transportation of coal, crude petroleum or petroleum fuels or oil, or their derivatives;

(5) any pipeline for transporting natural or synthetic gas at pressures in excess of 200 pounds per square inch with more than 50 miles of its length in Minnesota;

(6) any facility designed for or capable of storing on a single site more than deleted text begin 100,000 deleted text end new text begin 1,000,000 new text end gallons of liquefied natural gas or synthetic gas;

(7) any underground gas storage facility requiring a permit pursuant to section 103I.681;

(8) any nuclear fuel processing or nuclear waste storage or disposal facility; and

(9) any facility intended to convert any material into any other combustible fuel and having the capacity to process in excess of 75 tons of the material per hour.

Sec. 8.

Minnesota Statutes 2024, section 216C.09, is amended to read:

216C.09 COMMISSIONER DUTIES.

(a) The commissioner shall:

(1) manage the department as the central repository within the state government for the collection of data on energy;

(2) prepare and adopt an emergency allocation plan specifying actions to be taken in the event of an impending serious shortage of energy, or a threat to public health, safety, or welfare;

(3) undertake a continuing assessment of trends in the consumption of all forms of energy and analyze the social, economic, and environmental consequences of these trends;

(4) carry out energy new text begin conservation and efficiency new text end measures as specified by the legislature and recommend to the governor and the legislature additional energy policies and new text begin energy new text end conservation deleted text begin measures deleted text end new text begin and efficiency programming new text end as required to meet the objectives of this chapter;

(5) collect and analyze data relating to present and future demands and resources for all sources of energy;

(6) evaluate policies governing the establishment of rates and prices for energy as related to energy conservation new text begin and energy efficiency new text end , and other goals and policies of this chapter, and make recommendations for changes in energy pricing policies and rate schedules;

(7) study the impact and relationship of the state energy policies to international, national, and regional energy policies;

(8) design and implement a state program for deleted text begin the deleted text end new text begin energy new text end conservation deleted text begin of energy deleted text end new text begin and efficiency new text end ; deleted text begin this deleted text end new text begin the new text end program deleted text begin shall deleted text end new text begin must new text end include but new text begin is new text end not deleted text begin be deleted text end limited to deleted text begin , deleted text end general commercial, industrial, deleted text begin and deleted text end residential, and transportation areas; deleted text begin such deleted text end new text begin the new text end program deleted text begin shall deleted text end new text begin must new text end also provide for the evaluation of energy systems as they relate to lighting, heating, refrigeration, air conditioning, building design and operation, and appliance manufacturing and operation;

(9) inform and educate the public about the sources and uses of energy and the ways in which deleted text begin persons deleted text end new text begin Minnesotans new text end can new text begin transition to a clean energy future, new text end conserve energy new text begin , and save money new text end ;

(10) dispense funds made available for the purpose of research studies and projects deleted text begin of professional and civic orientation deleted text end , which are related to either energy conservation, resource recovery, or the development of alternative energy technologies which conserve nonrenewable energy resources while creating minimum environmental impact;

(11) charge other governmental departments and agencies involved in energy-related activities with specific information gathering goals and require that those goals be met;

(12) design a comprehensive program for the development of deleted text begin indigenous deleted text end energy resources. The program shall include deleted text begin , deleted text end but not be limited to deleted text begin , deleted text end providing technical, informational, educational, and financial services and materials to persons, businesses, municipalities, and organizations involved in the development of new text begin primary and emerging energy sources, including but not limited to new text end solar, wind, hydropower, peat, fiber fuels, biomass, and other alternative energy resources. The program shall be evaluated by the alternative energy technical activity; and

(13) dispense loans, grants, or other financial deleted text begin aid deleted text end new text begin resources new text end from money received from litigation or new text begin a new text end settlement deleted text begin of alleged violations of federal petroleum-pricing regulations deleted text end made available to the department for that purpose.

(b) Further, the commissioner may participate fully in hearings before the Public Utilities Commission on matters pertaining to rate design, cost allocation, efficient resource utilization, utility conservation investments, small power production, cogeneration, and other rate issues. The commissioner shall support the policies stated in section 216C.05 and shall prepare and defend testimony proposed to encourage energy conservation improvements as defined in section 216B.241.

Sec. 9.

Minnesota Statutes 2024, section 216C.10, is amended to read:

216C.10 COMMISSIONER POWERS.

(a) The commissioner may:

(1) adopt rules under chapter 14 as necessary to carry out the purposes of this chapter;

(2) make all contracts under this chapter and do all things necessary to cooperate with the United States government, and to qualify for, accept, and disburse any grant intended to administer this chapter;

(3) provide on-site technical assistance to units of local government in order to enhance local capabilities deleted text begin for dealing with energy problems deleted text end new text begin to provide new text end new text begin energy-related financial resources, planning, outreach, and engagement new text end ;

(4) administer for the state, energy programs under federal law, regulations, or guidelines, and coordinate the programs and activities with other state agencies, units of local government, and educational institutions;

(5) develop a state energy investment plan with yearly energy conservation and alternative energy development goals, investment targets, and marketing strategies;

(6) perform market analysis studies relating to conservation, alternative and renewable energy resources, and energy recovery;

(7) assist with the preparation of proposals for innovative conservation, renewable, alternative, or energy recovery projects;

(8) manage and disburse funds made available for the purpose of research studies or demonstration projects related to energy conservation or other activities deemed appropriate by the commissioner;

(9) intervene in certificate of need proceedings before the Public Utilities Commission;

(10) collect fees from recipients of loans, grants, or other financial aid from money received from litigation or settlement of alleged violations of federal petroleum-pricing regulations, which fees must be used to pay the department's costs in administering those financial aids; and

(11) collect fees from proposers and operators of conservation and other energy-related programs that are reviewed, evaluated, or approved by the department, other than proposers that are political subdivisions or community or nonprofit organizations, to cover the department's cost in making the reviewal, evaluation, or approval and in developing additional programs for others to operate.

(b) Notwithstanding any other law, the commissioner is designated the state agent to apply for, receive, and accept federal or other funds made available to the state for the purposes of this chapter.

Sec. 10.

Minnesota Statutes 2024, section 216C.11, is amended to read:

216C.11 ENERGY CONSERVATION INFORMATION CENTER.

new text begin (a) new text end The commissioner deleted text begin shall deleted text end new text begin must new text end establish an Energy Information Center in the deleted text begin department's offices in St. Paul deleted text end new text begin department new text end . The information center deleted text begin shall deleted text end new text begin must new text end maintain a deleted text begin toll-free telephone information service and disseminate printed materials on energy conservation topics, including but not limited to, availability of loans and other public and private financing methods for energy conservation physical improvements, the techniques and materials used to conserve energy in buildings, including retrofitting or upgrading insulation and installing weatherstripping, the projected prices and availability of different sources of energy, and alternative sources of energy deleted text end new text begin physical, new text end new text begin virtual, and mobile information service that collects, analyzes, and disseminates energy resources, data, technical assistance and expertise, financial assistance, connections, and information on a variety of energy topics relevant to Minnesota consumers, businesses, Tribal and local governments, and community organizations. The information center must be accessible and responsive to public inquiries and must conduct proactive outreach new text end .

deleted text begin The Energy Information Center shall serve as the official Minnesota Alcohol Fuels Information Center and shall disseminate information, printed, by the toll-free telephone information service, or otherwise on the applicability and technology of alcohol fuels. deleted text end

deleted text begin The information center shall include information on the potential hazards of energy conservation techniques and improvements in the printed materials disseminated. The commissioner shall not be liable for damages arising from the installation or operation of equipment or materials recommended by the information center. deleted text end

new text begin (b) new text end The information center deleted text begin shall deleted text end new text begin must new text end use the information collected under section 216C.02, subdivision 1, to maintain a central source of information on new text begin energy new text end conservation new text begin , energy efficiency, new text end and other energy-related programs, including deleted text begin both deleted text end programs required by law or rule and programs developed and carried on voluntarily.

Sec. 11.

Minnesota Statutes 2024, section 216C.12, is amended to read:

216C.12 ENERGY deleted text begin CONSERVATION PUBLICITY deleted text end new text begin LITERACY new text end .

new text begin (a) new text end The commissioner new text begin , new text end in consultation with other affected agencies or departments deleted text begin shall deleted text end new text begin , must new text end develop informational materials deleted text begin , pamphlets and radio and television messages deleted text end new text begin and messaging new text end on energy conservation and deleted text begin housing deleted text end new text begin energy efficiency new text end programs available in Minnesota deleted text begin , renewable energy resources, and energy supply and demand. The printed materials shall include information on available tax credits for residential energy conservation measures, residential retrofitting loan and grant programs, and data on the economics of energy conservation and renewable resource measures. Copies of printed materials shall be distributed to members of the appropriate standing committees of the legislature deleted text end . new text begin The commissioner must use modern and current outreach strategies and media to distribute the informational materials and messaging to the widest possible audience. new text end

new text begin (b) The informational materials must promote energy literacy for individuals and communities to help individuals and communities make informed decisions on topics ranging from smart energy use at home and consumer choices to national and international energy policy. The informational materials must include but are not limited to information on energy sources, energy generation, energy use, energy conservation strategies, the energy workforce sector, and state and federal energy-related programs administered by the department. new text end

Sec. 12.

Minnesota Statutes 2024, section 216C.391, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For the purposes of this section, the following terms have the meanings given.

(b) "Competitive funds" means federal funds awarded to selected applicants based on the grantor's evaluation of the strength of an application measured against all other applications.

(c) "Disadvantaged community" new text begin : (1) new text end has the meaning given by the federal agency disbursing federal funds new text begin ; or (2) is a community located in an area that is a low-income area, as defined in section 116M.14, subdivision 4 new text end .

(d) "Eligible entity" means an entity located in Minnesota that is eligible to receive federal funds, tax credits, loans, or an entity that has at least one Minnesota-based partner, as determined by the grantor of the federal funds, tax credits, or loans.

(e) "Federal funds" means federal formula or competitive funds available for award to applicants for energy projects deleted text begin under the Infrastructure Investment and Jobs Act, Public Law 117-58, or the Inflation Reduction Act of 2022, Public Law 117-169 deleted text end .

(f) "Formula funds" means federal funds awarded to all eligible applicants on a noncompetitive basis.

(g) "Loans" means federal loans from loan funds authorized or funded in the Inflation Reduction Act of 2022, Public Law 117-169.

(h) "Match" means the amount of deleted text begin state deleted text end new text begin nonfederal new text end money a successful grantee in Minnesota is required to contribute to a project as a condition of receiving federal funds.

(i) "Political subdivision" has the meaning given in section 331A.01, subdivision 3.

(j) "Project" means the activities proposed to be undertaken by an eligible entity awarded federal funds and are located in Minnesota or will directly benefit Minnesotans.

(k) "Tax credits" means federal tax credits authorized in the Inflation Reduction Act of 2022, Public Law 117-169.

(l) "Tribal government" has the meaning given in section 116J.64, subdivision 4.

Sec. 13.

Minnesota Statutes 2024, section 216C.391, subdivision 2, is amended to read:

Subd. 2.

Establishment of account; eligible expenditures.

(a) A state competitiveness fund account is created in the special revenue fund of the state treasury. The commissioner must credit to the account appropriations and transfers to the account. Earnings, such as interest, dividends, and any other earnings arising from assets of the account, must be credited to the account. Money remaining in the account at the end of a fiscal year does not cancel to the general fund but remains available until June 30, 2034. The commissioner is the fiscal agent and must manage the account.

(b) Money in the account is appropriated to the commissioner and must be used to:

(1) pay all or any portion of the state match required as a condition of receiving federal funds, or to otherwise reduce the cost for projects that are awarded federal funds, as described under subdivision 3, paragraph (a);

(2) award grants under subdivision 4 to obtain grant development assistance for eligible entities;

(3) award grants that reduce the cost for projects that are awarded federal loans within disadvantaged communities;

(4) award grants new text begin for activities new text end that are deleted text begin additive deleted text end new text begin eligible new text end to new text begin receive new text end federal tax credits deleted text begin received by an eligible entity deleted text end to deleted text begin further deleted text end reduce the cost of the technologies and activities eligible for such federal tax credits in disadvantaged communities; and

(5) pay the reasonable costs incurred by the department to assist eligible entities to successfully compete for available federal funds and utilize available federal tax credits or loans.

Sec. 14.

Minnesota Statutes 2024, section 216C.391, subdivision 3, is amended to read:

Subd. 3.

Grant awards; eligible entities; priorities.

(a) Grants may be awarded under this section to eligible entities in accordance with the following order of priorities:

(1) federal formula funds directed to the state that require a match;

(2) federal funds directed to a political subdivision or a Tribal government that require a match;

(3) federal funds directed to an institution of higher education, a consumer-owned utility, a business, or a nonprofit organization that require a match;

(4) federal funds directed to investor-owned utilities that require a match;

(5) federal funds directed to an eligible entity not included in clauses (1) to (4) that require a match; and

(6) all other grant opportunities directed to eligible entities that do not require a match but for which the commissioner determines that a grant made under this section is likely to enhance the likelihood of an applicant receiving federal funds, or to increase the potential amount of federal funds received.

(b) By November 15, 2023, the commissioner must develop and publicly post, and report to the chairs and ranking minority members of the legislative committees with jurisdiction over energy finance, the federal energy grant funds that are eligible for state matching funds under this section.

new text begin (c) Notwithstanding section 16B.98, subdivision 5, paragraph (b), a grant made under this section may exceed five years. new text end

Sec. 15.

Minnesota Statutes 2024, section 216C.47, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For the purposes of this section, the following terms have the meanings given.

(b) "Eligible applicant" means a county, city, town, new text begin Tribal government, new text end or the Metropolitan Council.

(c) "Geothermal energy system" means a system that heats and cools one or more buildings by using the constant temperature of the earth as both a heat source and heat sink, and a heat exchanger consisting of an underground closed loop system of piping containing a liquid to absorb and relinquish heat within the earth. Geothermal energy system includes:

(1) a bored geothermal heat exchanger, as defined in section 103I.005;

(2) a groundwater thermal exchange device, as defined in section 103I.005; and

(3) a submerged closed loop heat exchanger, as defined in section 103I.005.

new text begin (d) "Tribal government" means the elected government of a federally recognized Indian Tribe located in Minnesota. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 16.

Laws 2024, chapter 126, article 6, section 53, is amended to read:

Sec. 53.

INTERCONNECTION DOCKET; PUBLIC UTILITIES COMMISSION.

(a) No later than September 1, 2024, the commission must initiate a proceeding to establish by order generic standards for the sharing of utility costs necessary to upgrade a utility's distribution system by increasing hosting capacity or applying other necessary distribution system upgrades at a congested or constrained location in order to allow for the interconnection of distributed generation facilities at the congested or constrained location and to advance the achievement of the state's renewable and carbon-free energy goals in Minnesota Statutes, section 216B.1691 and greenhouse gas emissions reduction goals in Minnesota Statutes, section 216H.02. The tariff standards must reflect an interconnection process designed to, at a minimum:

(1) accelerate the expansion of hosting capacity at multiple points on a utility's distribution system by ensuring that the cost of upgrades is shared fairly among owners of distributed generation projects seeking interconnection on a pro rata basis according to the amount of the expanded capacity utilized by each interconnected distributed generation facility;

(2) reduce the capital burden on owners of trigger projects seeking interconnection;

(3) establish a minimum level of upgrade costs an expansion of hosting capacity must reach in order to be eligible to participate in the cost-share process and below which a trigger project must bear the full cost of the upgrade;

(4) establish a distributed generation facility's pro rata cost-share amount as the utility's total cost of the upgrade divided by the incremental capacity resulting from the upgrade, and multiplying the result by the capacity of the distributed generation facility seeking interconnection;

(5) establish a minimum proportion of the total upgrade cost that a utility must receive from one or more distributed generation facilities before initiating constructing an upgrade;

(6) allow trigger projects and any other distributed generation facilities to pay a utility more than the trigger project's or distributed generation facility's pro rata cost-share amount only if needed to meet the minimum threshold established in clause (5) and to receive refunds for amounts paid beyond the trigger project's or distributed generation facility's pro rata share of expansion costs from distributed generation projects that subsequently interconnect at the applicable location, after which pro rata payments are paid to the utility for distribution to ratepayers;

(7) prohibit owners of distributed generation facilities from using any unsubscribed capacity at an interconnection that has undergone an upgrade without the distributed generation owners paying the distributed generation owner's pro rata cost of the upgrade; and

(8) establish an annual limit or a formula for determining an annual limit for the total cost of upgrades that are not allocated to owners of participating generation facilities and may be recovered from ratepayers under section 216B.16, subdivision 7b, new text begin paragraph (b), new text end clause (6).

(b) For the purposes of this section, the following terms have the meanings given:

(1) "distributed generation project" means an energy generating system with a capacity no greater than ten megawatts;

(2) "hosting capacity" means the maximum capacity of a utility distribution system to transport electricity at a specific location without compromising the safety or reliability of the distribution system;

(3) "trigger project" means the initial distributed generation project whose application for interconnection of a distributed generation project alerts a utility that an upgrade is needed in order to accommodate the trigger project and any future interconnections at the applicable location;

(4) "upgrade" means a modification of a utility's distribution system at a specific location that is necessary to allow the interconnection of distributed generation projects by increasing hosting capacity at the applicable location, including but not limited to installing or modifying equipment at a substation or along a distribution line. Upgrade does not mean an expansion of hosting capacity dedicated solely to the interconnection of a single distributed generation project; and

(5) "utility" means a public utility, as defined in Minnesota Statutes, section 216B.02, subdivision 4, that provides electric service.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

ARTICLE 4

SECURITIZATION

Section 1.

new text begin [216B.491] DEFINITIONS. new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For the purposes of sections 216B.491 to 216B.499, the terms defined in this section have the meanings given. new text end

new text begin Subd. 2. new text end

new text begin Ancillary agreement. new text end

new text begin "Ancillary agreement" means a bond, insurance policy, letter of credit, reserve account, surety bond, interest rate lock or swap arrangement, liquidity or credit support arrangement, or other financial arrangement entered into in connection with extraordinary event bonds that is designed to promote the credit quality and marketability of extraordinary event bonds or to mitigate the risk of an increase in interest rates. new text end

new text begin Subd. 3. new text end

new text begin Assignee. new text end

new text begin "Assignee" means a person to which an interest in extraordinary event property is sold, assigned, transferred, or conveyed, other than as security, and any successor to or subsequent assignee of the person. new text end

new text begin Subd. 4. new text end

new text begin Bondholder. new text end

new text begin "Bondholder" means a holder or owner of extraordinary event bonds. new text end

new text begin Subd. 5. new text end

new text begin Customer. new text end

new text begin "Customer" means a person who purchases natural gas or natural gas transportation services from a utility in Minnesota. Customer does not include a person who: new text end

new text begin (1) purchases natural gas transportation services from a utility in Minnesota that serves fewer than 350,000 natural gas customers in Minnesota; and new text end

new text begin (2) does not purchase natural gas from a utility in Minnesota. new text end

new text begin Subd. 6. new text end

new text begin Extraordinary event. new text end

new text begin (a) "Extraordinary event" means an event arising from unforeseen circumstances of sufficient magnitude, as determined by the commission: new text end

new text begin (1) to impose significant costs on customers; and new text end

new text begin (2) for which the issuance of extraordinary event bonds in response to the event meets the conditions of section 216B.492, subdivision 2. new text end

new text begin (b) Extraordinary event includes but is not limited to a storm event or other natural disaster, an act of God, war, terrorism, sabotage, vandalism, a cybersecurity attack, or a temporary significant increase in the wholesale price of natural gas. new text end

new text begin Subd. 7. new text end

new text begin Extraordinary event activity. new text end

new text begin "Extraordinary event activity" means an activity undertaken by or on behalf of a utility to restore or maintain the utility's ability to provide natural gas service following one or more extraordinary events, including but not limited to activities related to mobilizing, staging, constructing, reconstructing, replacing, or repairing natural gas transmission, distribution, storage, or general facilities. new text end

new text begin Subd. 8. new text end

new text begin Extraordinary event bonds. new text end

new text begin "Extraordinary event bonds" means debt securities, including but not limited to senior secured bonds, debentures, notes, certificates of participation, certificates of beneficial interest, certificates of ownership, or other evidences of indebtedness or ownership, that: (1) have a scheduled maturity of no longer than 30 years and a final legal maturity date that is not later than 32 years from the issue date; (2) are rated AA, Aa2, or higher by a major independent credit rating agency at the time of issuance; and (3) are issued by a utility or an assignee under a financing order. new text end

new text begin Subd. 9. new text end

new text begin Extraordinary event charge. new text end

new text begin "Extraordinary event charge" means a nonbypassable charge that: new text end

new text begin (1) a utility that is the subject of a financing order or the utility's successor or assignee imposes on all of the utility's customers; new text end

new text begin (2) is separate from the utility's base rates; and new text end

new text begin (3) provides a source of revenue used only to repay, finance, or refinance extraordinary event costs. new text end

new text begin Subd. 10. new text end

new text begin Extraordinary event costs. new text end

new text begin "Extraordinary event costs": new text end

new text begin (1) means all incremental costs of extraordinary event activities that are approved by the commission in a financing order issued under section 216B.492 as being: new text end

new text begin (i) necessary to enable the utility to restore or maintain natural gas service to customers after the utility experiences an extraordinary event; and new text end

new text begin (ii) prudent and reasonable; new text end

new text begin (2) includes costs to repurchase equity or retire any indebtedness relating to extraordinary event activities; new text end

new text begin (3) are net of applicable insurance proceeds, tax benefits, and any other amounts intended to reimburse the utility for extraordinary event activities, including government grants or aid of any kind; new text end

new text begin (4) do not include any monetary penalty, fine, or forfeiture assessed against a utility by a government agency or court under a federal or state environmental statute, rule, or regulation; and new text end

new text begin (5) must be adjusted to reflect: new text end

new text begin (i) the difference, as determined by the commission, between extraordinary event costs that the utility expects to incur and actual, reasonable, and prudent costs incurred; or new text end

new text begin (ii) a more fair or reasonable allocation of extraordinary event costs to customers over time, as expressed in a commission order, provided that after the issuance of extraordinary event bonds relating to the extraordinary event costs, the adjustment must not (A) reduce or impair the extraordinary event property relating to the extraordinary event bonds, or (B) reduce, impair, postpone, or terminate extraordinary event charges relating to the extraordinary event bonds until all principal, interest, and redemption premium, if any, payable on the extraordinary event bonds, all financing costs for the extraordinary event bonds, and all amounts that must be paid to an assignee or financing party under an ancillary agreement relating to the extraordinary event bonds are paid in full. new text end

new text begin Subd. 11. new text end

new text begin Extraordinary event property. new text end

new text begin "Extraordinary event property" means: new text end

new text begin (1) all rights and interests that a utility or the utility's successor or assignee possess under a financing order to impose, bill, collect, receive, and obtain periodic adjustments to extraordinary event charges authorized under a financing order issued by the commission; and new text end

new text begin (2) all revenue, collections, claims, rights to payments, payments, money, or proceeds arising from the rights and interests specified in clause (1), regardless of whether any are commingled with other revenue, collections, rights to payment, payments, money, or proceeds. new text end

new text begin Subd. 12. new text end

new text begin Extraordinary event revenue. new text end

new text begin "Extraordinary event revenue" means revenue, receipts, collections, payments, money, claims, or other proceeds arising from extraordinary event property. new text end

new text begin Subd. 13. new text end

new text begin Financing costs. new text end

new text begin "Financing costs" means: new text end

new text begin (1) principal, interest, and redemption premiums, if any, that are payable on extraordinary event bonds; new text end

new text begin (2) payments required under an ancillary agreement and amounts required to fund or replenish a reserve account or other accounts established under the terms of any indenture, ancillary agreement, or other financing document pertaining to extraordinary event bonds; new text end

new text begin (3) other demonstrable costs related to issuing, supporting, repaying, refunding, and servicing extraordinary event bonds, including but not limited to servicing fees, accounting and auditing fees, trustee fees, legal fees, consulting fees, financial adviser fees, administrative fees, placement and underwriting fees, capitalized interest, rating agency fees, stock exchange listing and compliance fees, security registration fees, filing fees, information technology programming costs, and any other demonstrable costs necessary to otherwise ensure and guarantee the timely payment of extraordinary event bonds, other amounts payable in connection with extraordinary event bonds, or other extraordinary event charges payable in connection with extraordinary event bonds; new text end

new text begin (4) taxes and license fees imposed on the revenue generated from collecting an extraordinary event charge; new text end

new text begin (5) state and local taxes, including franchise, sales and use, and other taxes or similar charges, including but not limited to regulatory assessment fees, whether paid, payable, or accrued; and new text end

new text begin (6) costs incurred by the commission to (i) hire and compensate additional temporary staff needed to perform the commission's responsibilities under this section, and (ii) engage specialized counsel and expert consultants experienced in securitized utility ratepayer-backed bond financings similar to extraordinary event bonds financings, as provided under section 216B.494. new text end

new text begin Subd. 14. new text end

new text begin Financing order. new text end

new text begin "Financing order" means an order issued by the commission under section 216B.492 that authorizes an applicant to: new text end

new text begin (1) issue extraordinary event bonds in one or more series; new text end

new text begin (2) impose, charge, and collect extraordinary event charges; and new text end

new text begin (3) create extraordinary event property. new text end

new text begin Subd. 15. new text end

new text begin Financing party. new text end

new text begin "Financing party" means a holder of extraordinary event bonds and a trustee, a collateral agent, a party under an ancillary agreement, or any other person acting for the benefit of extraordinary event bondholders. new text end

new text begin Subd. 16. new text end

new text begin Natural gas facility. new text end

new text begin "Natural gas facility" means natural gas pipelines, including distribution lines, underground storage areas, liquefied natural gas facilities, propane storage tanks, and other facilities the commission determines are used and useful to provide natural gas service to retail and transportation customers in Minnesota. new text end

new text begin Subd. 17. new text end

new text begin Nonbypassable. new text end

new text begin "Nonbypassable" means an extraordinary event charge that a retail customer located within a utility service area cannot avoid and must pay. new text end

new text begin Subd. 18. new text end

new text begin Pretax costs. new text end

new text begin "Pretax costs" means costs incurred by a utility and approved by the commission, including but not limited to: new text end

new text begin (1) unrecovered capitalized costs of replaced natural gas facilities damaged or destroyed by an extraordinary event; new text end

new text begin (2) costs to decommission and restore the site of a natural gas facility damaged or destroyed by an extraordinary event; new text end

new text begin (3) other applicable capital and operating costs, accrued carrying charges, deferred expenses, reductions for applicable insurance, and salvage proceeds; and new text end

new text begin (4) costs to retire any existing indebtedness, fees, costs, and expenses to modify existing debt agreements, or for waivers or consents related to existing debt agreements. new text end

new text begin Subd. 19. new text end

new text begin Storm event. new text end

new text begin "Storm event" means a tornado, derecho, ice or snow storm, wildfire, flood, earthquake, or other significant weather or natural disaster that causes substantial damage to a utility's infrastructure. new text end

new text begin Subd. 20. new text end

new text begin Successor. new text end

new text begin "Successor" means a legal entity that succeeds by operation of law to the rights and obligations of another legal entity as a result of bankruptcy, reorganization, restructuring, other insolvency proceeding, merger, acquisition, consolidation, or sale or transfer of assets. new text end

new text begin Subd. 21. new text end

new text begin Utility. new text end

new text begin "Utility" means a public utility, as defined in section 216B.02, subdivision 4, that provides natural gas service to Minnesota customers. Utility includes the utility's successors or assignees. new text end

Sec. 2.

new text begin [216B.492] FINANCING ORDER. new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin (a) A utility may file an application with the commission requesting a financing order to enable the utility to recover extraordinary event costs by issuing extraordinary event bonds under this section. new text end

new text begin (b) The application must include the following information, as applicable: new text end

new text begin (1) a description of each natural gas facility to be repaired or replaced; new text end

new text begin (2) the undepreciated value remaining in each natural gas facility under clause (1) that the utility proposes to repair or replace using financing obtained by issuing extraordinary event bonds under sections 216B.491 to 216B.499, and the method used to calculate the undepreciated value remaining; new text end

new text begin (3) the estimated costs imposed on customers resulting from an extraordinary event that involves no physical damage to natural gas facilities; new text end

new text begin (4) the estimated savings or estimated mitigation of rate impacts to utility customers if the financing order is issued as requested in the application, calculated by comparing the costs to customers that are expected to result from implementing the financing order and the estimated costs associated with implementing traditional utility financing mechanisms with respect to the same undepreciated balance, expressed in net present value terms; new text end

new text begin (5) a description of (i) the nonbypassable extraordinary event charge utility customers must pay in order to fully recover financing costs, and (ii) the method and assumptions used to calculate the nonbypassable extraordinary event charge; new text end

new text begin (6) a proposed methodology to allocate the revenue requirement for the extraordinary event charge among the utility's customer classes; new text end

new text begin (7) a description of a proposed adjustment mechanism that is implemented when necessary to correct any overcollection or undercollection of extraordinary event charges, in order to complete payment of scheduled principal and interest on extraordinary event bonds and other financing costs in a timely fashion; new text end

new text begin (8) a memorandum with supporting exhibits, developed by a securities firm that is experienced in the marketing of securitized utility ratepayer-backed bonds, indicating the proposed issuance satisfies: (i) the current published AA, Aa2, or higher rating; or (ii) equivalent rating criteria of at least one nationally recognized securities rating organization for issuances similar to the proposed extraordinary event bonds; new text end

new text begin (9) an estimate of: (i) the timing of the extraordinary event bonds issuance; and (ii) the term of the extraordinary event bonds or series of bonds, provided that the scheduled final maturity for each bond issuance does not exceed 30 years; new text end

new text begin (10) identification of plans to sell, assign, transfer, or convey, other than as a security, interest in extraordinary event property, including identification of an assignee and demonstration that the assignee is a financing entity that is wholly owned, directly or indirectly, by the utility; new text end

new text begin (11) identification of ancillary agreements that may be necessary or appropriate; new text end

new text begin (12) one or more alternative financing scenarios in addition to the preferred scenario contained in the application; new text end

new text begin (13) the extent of damage to the utility's natural gas facility caused by an extraordinary event and the estimated costs to repair or replace the damaged natural gas facility; new text end

new text begin (14) a schedule of the proposed repairs to and replacement of the damaged natural gas facility; new text end

new text begin (15) a description of the steps taken to provide customers interim natural gas service while the damaged natural gas facility is being repaired or replaced; and new text end

new text begin (16) a description of the impacts on the utility's current workforce resulting from implementing a repair or replacement plan following an extraordinary event. new text end

new text begin Subd. 2. new text end

new text begin Findings. new text end

new text begin After providing notice and holding a public hearing on an application filed under subdivision 1, the commission may issue a financing order if the commission finds that: new text end

new text begin (1) the extraordinary event costs described in the application are reasonable; new text end

new text begin (2) the proposed issuance of extraordinary event bonds and the imposition and collection of extraordinary event charges: new text end

new text begin (i) are just and reasonable; new text end

new text begin (ii) are consistent with the public interest; new text end

new text begin (iii) constitute a prudent and reasonable mechanism to finance the extraordinary event costs; and new text end

new text begin (iv) provide tangible and quantifiable benefits to customers, either by providing lower overall costs or mitigating rate impacts relative to traditional methods of financing, that exceed the benefits achieved absent the issuance of extraordinary event bonds; and new text end

new text begin (3) the proposed structuring, marketing, and pricing of the extraordinary event bonds: new text end

new text begin (i) lower overall costs to customers or mitigate rate impacts to customers relative to traditional methods of financing; and new text end

new text begin (ii) achieve customer savings or mitigate rate impacts to customers, as determined by the commission in a financing order, consistent with market conditions at the time of sale and the terms of the financing order. new text end

new text begin Subd. 3. new text end

new text begin Contents. new text end

new text begin (a) A financing order issued under this section must: new text end

new text begin (1) determine the maximum amount of extraordinary event costs that may be financed from proceeds of extraordinary event bonds issued pursuant to the financing order; new text end

new text begin (2) describe the proposed customer billing mechanism for extraordinary event charges and include a finding that the mechanism is just and reasonable; new text end

new text begin (3) describe the financing costs that may be recovered through extraordinary event charges and the period over which the costs may be recovered, which must end no earlier than the date of final legal maturity of the extraordinary event bonds; new text end

new text begin (4) describe the extraordinary event property that is created and that may be used to pay, and secure the payment of, principal and interest on the extraordinary event bonds and other financing costs authorized in the financing order; new text end

new text begin (5) authorize the utility to finance extraordinary event costs by issuing one or more series of extraordinary event bonds. A utility is not required to secure a separate financing order for each extraordinary event bonds issuance or for each scheduled phase to replace natural gas facilities approved in the financing order; new text end

new text begin (6) include a formula-based mechanism that must be used to make expeditious periodic adjustments to the extraordinary event charges authorized by the financing order that are necessary to (i) correct for any overcollection or undercollection, or (ii) otherwise provide for the timely payment of extraordinary event bonds, other financing costs, and other required amounts and charges payable in connection with extraordinary event bonds; new text end

new text begin (7) specify the degree of flexibility afforded to the utility to establish the terms and conditions of the extraordinary event bonds, including but not limited to repayment schedules, expected interest rates, and other financing costs; new text end

new text begin (8) specify that the extraordinary event bonds must be issued, subject to market conditions and the financing order's terms, as soon as feasible following the financing order's issuance; new text end

new text begin (9) require the utility, at the same time extraordinary event charges are initially collected and independent of the schedule to close and decommission any natural gas facility replaced as the result of an extraordinary event, if any, to remove the natural gas facility from the utility's rate base and commensurately reduce the utility's base rates; new text end

new text begin (10) specify a future ratemaking process to reconcile any difference between the projected pretax costs included in the amount financed by extraordinary event bonds and the final actual pretax costs incurred by the utility to retire or replace the natural gas facility, if any; new text end

new text begin (11) specify information regarding extraordinary event bonds issuance and repayments, financing costs, energy transaction charges, extraordinary event property, and related matters that the natural gas utility is required to provide to the commission on a schedule determined by the commission; new text end

new text begin (12) allow or require the creation of a utility's extraordinary event property to be conditioned on, and occur simultaneously with, the sale or other transfer of the extraordinary event property to an assignee and the pledge of the extraordinary event property to secure the extraordinary event bonds; new text end

new text begin (13) ensure that the structuring, marketing, and pricing of extraordinary event bonds result in reasonable extraordinary event charges and customer savings or rate impact mitigation, consistent with market conditions and the financing order's terms; and new text end

new text begin (14) specify that a utility that finances the replacement of one or more natural gas facilities after the natural gas facilities that are subject to the finance order are removed from the utility's rate base is prohibited from: new text end

new text begin (i) operating the natural gas facilities; or new text end

new text begin (ii) selling the natural gas facilities to another entity to operate as natural gas facilities. new text end

new text begin (b) A financing order issued under this section may: new text end

new text begin (1) include conditions different from those requested in the application that the commission determines are necessary to: new text end

new text begin (i) promote the public interest; and new text end

new text begin (ii) maximize the financial benefits or minimize the financial risks of the transaction to customers and to directly impacted Minnesota workers and communities; and new text end

new text begin (2) select one or more underwriters for the extraordinary event bonds. new text end

new text begin Subd. 4. new text end

new text begin Duration; irrevocability; subsequent order. new text end

new text begin (a) A financing order remains effective until the extraordinary event bonds issued under the financing order and all financing costs related to the extraordinary event bonds have been paid in full. new text end

new text begin (b) A financing order remains effective and unabated notwithstanding the bankruptcy, reorganization, or insolvency of the utility to which the financing order applies or any affiliate, successor, or assignee of the utility to which the financing order applies. new text end

new text begin (c) Subject to judicial review under section 216B.52, a financing order is irrevocable and is not reviewable by a future commission. The commission must not: (1) reduce, impair, postpone, or terminate extraordinary event charges approved in a financing order; (2) reduce or impair the extraordinary event property approved in a financing order or impair the collection or recovery of extraordinary event charges and extraordinary event revenue; or (3) change the customers required to pay extraordinary event charges. new text end

new text begin (d) Notwithstanding paragraph (c), the commission may, on the commission's own motion or at the request of a utility or any other person, commence a proceeding and issue a subsequent financing order that provides for refinancing, retiring, or refunding extraordinary event bonds issued under the original financing order if: new text end

new text begin (1) the commission makes all of the findings specified in subdivision 2 with respect to the subsequent financing order; and new text end

new text begin (2) the modification contained in the subsequent financing order does not in any way impair the covenants and terms of the extraordinary event bonds being refinanced, retired, or refunded. new text end

new text begin Subd. 5. new text end

new text begin Effect on commission jurisdiction. new text end

new text begin (a) Except as provided in paragraph (b), the commission, in exercising the powers and carrying out the duties under this section, is prohibited from: new text end

new text begin (1) considering extraordinary event bonds issued under this section to be debt of the utility other than for income tax purposes, unless considering the extraordinary event bonds to be debt is necessary to achieve consistency with prevailing utility debt rating methodologies; new text end

new text begin (2) considering the extraordinary event charges paid under the financing order to be revenue of the utility; new text end

new text begin (3) considering the extraordinary event costs or financing costs specified in the financing order to be regulated costs or assets of the utility; or new text end

new text begin (4) determining that any prudent action taken by a utility that is consistent with the financing order is unjust or unreasonable. new text end

new text begin (b) Nothing in this subdivision: new text end

new text begin (1) affects the authority of the commission to apply or modify a billing mechanism designed to recover extraordinary event charges; new text end

new text begin (2) prevents or precludes the commission from (i) investigating a utility's compliance with the financing order's terms and conditions, and (ii) requiring compliance with the financing order; or new text end

new text begin (3) prevents or precludes the commission from imposing regulatory sanctions against a utility for failure to comply with (i) the financing order's terms and conditions, or (ii) the requirements of this section. new text end

new text begin (c) The commission is prohibited from refusing to allow a utility to recover any costs associated with the replacement of natural gas facilities solely because the utility has elected to finance the natural gas facility replacement through a financing mechanism other than extraordinary event bonds. new text end

Sec. 3.

new text begin [216B.493] POSTORDER COMMISSION DUTIES. new text end

new text begin Subdivision 1. new text end

new text begin Financing costs review. new text end

new text begin Within 120 days after the date extraordinary event bonds are issued, a utility subject to a financing order must file with the commission the actual initial and ongoing financing costs, the final structure and pricing of the extraordinary event bonds, and the actual extraordinary event charge. The commission must review the prudence of the natural gas utility's actions to determine whether the actual financing costs were the lowest that could reasonably be achieved given the financing order's terms and market conditions prevailing at the time the extraordinary event bonds are issued. new text end

new text begin Subd. 2. new text end

new text begin Enforcement. new text end

new text begin If the commission determines that a utility's actions under this section are not prudent or are inconsistent with the financing order, the commission may apply remedies deemed appropriate for utility actions, provided that any remedy applied must not directly or indirectly: (1) reduce or impair the extraordinary event property approved in the financing order or impair the collection or recovery of extraordinary event charges and extraordinary event revenue; (2) reduce, impair, postpone, or terminate extraordinary event charges approved in the financing order until all principal, interest, and redemption premium, if any, payable on the extraordinary event bonds, all financing costs, and all amounts to be paid to an assignee or financing party under an ancillary agreement are paid in full; or (3) change the customers required to pay extraordinary event charges. new text end

Sec. 4.

new text begin [216B.494] USE OF OUTSIDE EXPERTS. new text end

new text begin (a) To carry out the duties under this section, the commission may: new text end

new text begin (1) contract with outside consultants and counsel experienced in securitized utility customer-backed bond financing similar to extraordinary event bonds; and new text end

new text begin (2) hire and compensate additional temporary staff as needed. new text end

new text begin Expenses incurred by the commission under this paragraph must be treated as financing costs paid by the extraordinary event revenue. The costs incurred under clause (1) are not an obligation of the state and are assigned solely to the transaction. new text end

new text begin (b) A utility presented with a written request from the commission to reimburse the commission's expenses incurred under paragraph (a), accompanied by a detailed account of the subject expenses, must provide the issuer of the extraordinary event bonds and the indenture trustee for the extraordinary event bonds with such documentation. The indenture trustee must remit full payment of the expenses to the commission on the next interest payment date of the extraordinary event bonds after the payment of interest and scheduled principal of the extraordinary event bonds in accordance with the payment waterfall included in the indenture governing the extraordinary event bonds. new text end

new text begin (c) If a utility's application for a financing order is denied or withdrawn for any reason and extraordinary event bonds are not issued, the commission's costs to retain expert consultants under this section must be paid by the applicant utility and are deemed a prudent deferred expense eligible for recovery in the utility's future rates. new text end

Sec. 5.

new text begin [216B.495] EXTRAORDINARY EVENT CHARGE; BILLING TREATMENT. new text end

new text begin (a) A utility that obtains a financing order and issues extraordinary event bonds must: new text end

new text begin (1) include on each customer's monthly natural gas bill: new text end

new text begin (i) a statement that a portion of the charges represents extraordinary event charges approved in a financing order; new text end

new text begin (ii) the amount and rate of the extraordinary event charge as a separate line item titled "extraordinary event charge"; and new text end

new text begin (iii) if extraordinary event property has been transferred to an assignee, a statement that the assignee is the owner of the rights to extraordinary event charges and that the utility or other entity, if applicable, is acting as a collection agent or servicer for the assignee; and new text end

new text begin (2) file annually with the commission: new text end

new text begin (i) a calculation that identifies the impact financing the retirement or replacement of natural gas facilities has on customer rates, itemized by customer class; and new text end

new text begin (ii) evidence demonstrating that extraordinary event revenues are applied solely to pay (A) principal and interest on extraordinary event bonds, and (B) other financing costs. new text end

new text begin (b) Extraordinary event charges are nonbypassable and must be paid by all existing and future customers receiving service from the utility or the utility's successors or assignees under commission-approved rate schedules or special contracts. new text end

new text begin (c) A utility's failure to comply with this section does not invalidate, impair, or affect any financing order, extraordinary event property, extraordinary event charge, or extraordinary event bonds, but does subject the utility to penalties under applicable commission rules provided that any penalty applied must not directly or indirectly: (1) reduce or impair the extraordinary event property approved in the financing order or impair the collection or recovery of extraordinary event charges and extraordinary event revenue; (2) reduce, impair, postpone, or terminate extraordinary event charges approved in the financing order until all principal, interest, and redemption premium, if any, payable on the extraordinary event bonds, all financing costs, and all amounts to be paid to an assignee or financing party under an ancillary agreement are paid in full; or (3) change the customers required to pay extraordinary event charges. new text end

Sec. 6.

new text begin [216B.496] EXTRAORDINARY EVENT PROPERTY. new text end

new text begin Subdivision 1. new text end

new text begin General. new text end

new text begin (a) Extraordinary event property is an existing present property right or interest in a property right, even though the imposition and collection of extraordinary event charges depend on the utility collecting extraordinary event charges and on future natural gas consumption. The property right or interest exists regardless of whether the revenues or proceeds arising from the extraordinary event property have been billed, have accrued, or have been collected. new text end

new text begin (b) Extraordinary event property exists until all extraordinary event bonds issued under a financing order are paid in full and all financing costs and other extraordinary event bonds costs have been recovered in full. new text end

new text begin (c) All or any portion of extraordinary event property described in a financing order issued to a utility may be transferred, sold, conveyed, or assigned to a successor or assignee that is wholly owned, directly or indirectly, by the utility and created for the limited purpose of acquiring, owning, or administering extraordinary event property or issuing extraordinary event bonds authorized by the financing order. All or any portion of extraordinary event property may be pledged to secure extraordinary event bonds issued under a financing order, amounts payable to financing parties and to counterparties under any ancillary agreements, and other financing costs. Each transfer, sale, conveyance, assignment, or pledge by a utility or an affiliate of extraordinary event property is a transaction in the ordinary course of business. new text end

new text begin (d) If a utility defaults on any required payment of charges arising from extraordinary event property described in a financing order, a court, upon petition by an interested party and without limiting any other remedies available to the petitioner, must order the sequestration and payment of the revenues arising from the extraordinary event property to the financing parties. new text end

new text begin (e) The interest of a transferee, purchaser, acquirer, assignee, or pledgee in extraordinary event property specified in a financing order issued to a utility, and in the revenue and collections arising from the property, is not subject to setoff, counterclaim, surcharge, or defense by the utility or any other person, or in connection with the reorganization, bankruptcy, or other insolvency of the utility or any other entity. new text end

new text begin (f) A successor to a utility, whether resulting from a reorganization, bankruptcy, or other insolvency proceeding, merger or acquisition, sale, other business combination, transfer by operation of law, utility restructuring, or otherwise: (1) must perform and satisfy all obligations of, and has the same duties and rights under, a financing order as the utility to which the financing order applies; and (2) must perform the duties and exercise the rights in the same manner and to the same extent as the utility, including (i) collecting extraordinary event bonds revenues, collections, payments, or proceeds, and (ii) paying a person entitled to receive extraordinary event bonds revenues, collections, payments, or proceeds. new text end

new text begin Subd. 2. new text end

new text begin Security interests in extraordinary event property. new text end

new text begin (a) The creation, perfection, and enforcement of any security interest in extraordinary event property to secure the repayment of the principal and interest on extraordinary event bonds, amounts payable under any ancillary agreement, and other financing costs are governed by this section only. new text end

new text begin (b) A security interest in extraordinary event property is created, valid, and binding when: new text end

new text begin (1) the financing order that describes the extraordinary event property is issued; new text end

new text begin (2) a security agreement is executed and delivered; and new text end

new text begin (3) value is received for the extraordinary event bonds. new text end

new text begin (c) Once a security interest in extraordinary event property is created, the security interest attaches without any physical delivery of collateral or any other act. The lien of the security interest is valid, binding, and perfected against all parties having claims of any kind in tort, in contract, or otherwise against the person granting the security interest, regardless of whether the parties have notice of the lien, upon the filing of a financing statement with the secretary of state. new text end

new text begin (d) The description or indication of extraordinary event property in a transfer or security agreement and a financing statement is sufficient only if the description or indication refers to this section and the financing order creating the extraordinary event property. new text end

new text begin (e) A security interest in extraordinary event property is a continuously perfected security interest and has priority over any other lien, created by operation of law or otherwise, that may subsequently attach to the extraordinary event property unless the person that holds the security interest has agreed otherwise in writing. new text end

new text begin (f) The priority of a security interest in extraordinary event property is not affected by the commingling of extraordinary event property or extraordinary event revenue with other money. An assignee, bondholder, or financing party has a perfected security interest in the amount of all extraordinary event property or extraordinary event revenue that is pledged to pay extraordinary event bonds even if the extraordinary event property or extraordinary event revenue is deposited in a cash or deposit account owned by the utility in which the extraordinary event revenue is commingled with other money. Any other security interest that applies to the other money does not apply to the extraordinary event revenue. new text end

new text begin (g) A subsequent commission order amending a financing order under section 216B.492, subdivision 4, or the application of an adjustment mechanism authorized by a financing order under section 216B.492, subdivision 3, does not affect the validity, perfection, or priority of a security interest in or transfer of extraordinary event property. new text end

new text begin Subd. 3. new text end

new text begin Sales of extraordinary event property. new text end

new text begin (a) A sale, assignment, or transfer of extraordinary event property is an absolute transfer and true sale of, and not a pledge of or secured transaction relating to, the seller's right, title, and interest in, to, and under the extraordinary event property if the documents governing the transaction expressly state that the transaction is a sale or other absolute transfer. A transfer of an interest in extraordinary event property may be created when: new text end

new text begin (1) the financing order creating and describing the extraordinary event property is effective; new text end

new text begin (2) the documents evidencing the transfer of the extraordinary event property are executed and delivered to the assignee; and new text end

new text begin (3) value is received. new text end

new text begin (b) The characterization of a sale, assignment, or transfer as an absolute transfer and true sale, and the corresponding characterization of the property interest of the assignee, is not affected or impaired by: new text end

new text begin (1) commingling extraordinary event revenue with other money; new text end

new text begin (2) the seller retaining: new text end

new text begin (i) a partial or residual interest, including an equity interest, in the extraordinary event property, whether (A) direct or indirect, or (B) subordinate or otherwise; or new text end

new text begin (ii) the right to recover costs associated with taxes, franchise fees, or license fees imposed on the collection of extraordinary event revenue; new text end

new text begin (3) any recourse that the extraordinary event property purchaser may have against the seller; new text end

new text begin (4) any indemnification rights, obligations, or repurchase rights made or provided by the extraordinary event property seller; new text end

new text begin (5) the extraordinary event property seller's obligation to collect extraordinary event revenues on behalf of an assignee; new text end

new text begin (6) the treatment of the sale, assignment, or transfer for tax, financial reporting, or other purposes; new text end

new text begin (7) any subsequent financing order amending a financing order under section 216B.492, subdivision 4, paragraph (d); or new text end

new text begin (8) any application of an adjustment mechanism under section 216B.492, subdivision 3, paragraph (a), clause (6). new text end

Sec. 7.

new text begin [216B.497] EXTRAORDINARY EVENT BONDS. new text end

new text begin (a) A bank, trust company, savings and loan association, insurance company, executor, administrator, guardian, trustee, or other fiduciary may legally invest any money within the individual's or entity's control in extraordinary event bonds. new text end

new text begin (b) Extraordinary event bonds issued under a financing order are not debt of or a pledge of the faith and credit or taxing power of the state, any agency of the state, or any political subdivision. An extraordinary event bonds holder does not possess the ability to compel taxes to be levied by the state or a political subdivision in order to pay the principal or interest on extraordinary event bonds. The issuance of extraordinary event bonds does not directly, indirectly, or contingently obligate the state or a political subdivision to levy any tax or make any appropriation to pay principal or interest on the extraordinary event bonds. new text end

new text begin (c) The state pledges to and agrees with an extraordinary event bonds holder, assignee, and financing party that the state and state agencies, including the commission, are prohibited from: new text end

new text begin (1) taking or permitting an action that reduces or impairs the extraordinary event property approved in the financing order or impairs the collection or recovery of extraordinary event charges or extraordinary event revenue; new text end

new text begin (2) reducing, impairing, postponing, or terminating extraordinary event charges approved in the financing order that are imposed, collected, and remitted for the benefit of an extraordinary event bonds holder, assignee, and financing party until all principal, interest, and redemption premium, if any, payable on extraordinary event bonds, all financing costs, and all amounts to be paid to an assignee or financing party under an ancillary agreement are paid in full; or new text end

new text begin (3) changing the customers required to pay the extraordinary event charges. new text end

new text begin (d) The commission may include a pledge in the financing order similar to the pledge included in paragraph (c). new text end

new text begin (e) A person who issues extraordinary event bonds may include the pledge specified in paragraphs (c) and (d) in the extraordinary event bonds, ancillary agreements, and documentation related to the issuance and marketing of the extraordinary event bonds. new text end

Sec. 8.

new text begin [216B.498] ASSIGNEE OF FINANCING PARTY NOT SUBJECT TO COMMISSION REGULATION. new text end

new text begin An assignee or financing party that is not already regulated by the commission does not become subject to commission regulation solely as a result of engaging in any transaction authorized by or described in sections 216B.491 to 216B.499. new text end

Sec. 9.

new text begin [216B.499] EFFECT ON OTHER LAWS. new text end

new text begin (a) If a provision of sections 216B.491 to 216B.499 conflicts with other law regarding the attachment, assignment, perfection, effect of perfection, or priority of a security interest in or transfer of extraordinary event property, sections 216B.491 to 216B.499 govern. new text end

new text begin (b) Nothing in this section precludes a utility for which the commission has initially issued a financing order from applying to the commission for: new text end

new text begin (1) a subsequent financing order amending the financing order under section 216B.492, subdivision 4, paragraph (d); or new text end

new text begin (2) approval to issue extraordinary event bonds to refund all or a portion of an outstanding series of extraordinary event bonds. new text end

Sec. 10.

Minnesota Statutes 2024, section 216B.62, subdivision 3, is amended to read:

Subd. 3.

Assessing all public utilities.

The department and commission shall quarterly, at least 30 days before the start of each quarter, estimate the total of their expenditures in the performance of their duties relating to public utilities under sections 216B.01 to 216B.67, other than amounts chargeable to public utilities under subdivision 2, 6, 7, deleted text begin or deleted text end 8 new text begin , or 9 new text end . The remainder shall be assessed by the commission and department to the several public utilities in proportion to their respective gross operating revenues from retail sales of gas or electric service within the state during the last calendar year. The assessment shall be paid into the state treasury within 30 days after the bill has been transmitted via mail, personal delivery, or electronic service to the several public utilities, which shall constitute notice of the assessment and demand of payment thereof. The total amount which may be assessed to the public utilities, under authority of this subdivision, shall not exceed one-sixth of one percent of the total gross operating revenues of the public utilities during the calendar year from retail sales of gas or electric service within the state. The assessment for the third quarter of each fiscal year shall be adjusted to compensate for the amount by which actual expenditures by the commission and department for the preceding fiscal year were more or less than the estimated expenditures previously assessed.

Sec. 11.

Minnesota Statutes 2024, section 216B.62, is amended by adding a subdivision to read:

new text begin Subd. 9. new text end

new text begin Administrative costs for extraordinary event bonds. new text end

new text begin The commission and the department may assess gas utilities for the actual commission and department costs incurred to administer extraordinary event bonds under sections 216B.491 to 216B.499. The money received from the assessment must be deposited into an account in the special revenue fund. All money deposited in the account is appropriated to the commission or the department for the purposes of this subdivision. The commission and department may initially assess for estimated costs under sections 216B.491 to 216B.499, then must adjust subsequent assessments for actual costs incurred under sections 216B.491 to 216B.499. An assessment made under this subdivision is not subject to the cap on assessments provided in subdivision 3 or any other law. new text end

Presented to the governor June 12, 2025

Signed by the governor June 14, 2025, 10:28 a.m.