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

CHAPTER 196--S.F.No. 2181
An act
relating to energy; regulating the renewable development account;
amending Minnesota Statutes 2010, section 116C.779, subdivision 2; Minnesota
Statutes 2011 Supplement, section 116C.779, subdivision 1; repealing Laws
2003, First Special Session chapter 11, article 2, section 17.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

    Section 1. Minnesota Statutes 2011 Supplement, section 116C.779, subdivision 1,
is amended to read:
    Subdivision 1. Renewable development account. (a) The public utility that owns
the Prairie Island nuclear generating plant must transfer to a renewable development
account $500,000 each year for each dry cask containing spent fuel that is located at the
Prairie Island power plant for each year the plant is in operation, and $7,500,000 each year
the plant is not in operation if ordered by the commission pursuant to paragraph (d) (c).
The fund transfer must be made if nuclear waste is stored in a dry cask at the independent
spent-fuel storage facility at Prairie Island for any part of a year. Funds in the account
may be expended only for development of renewable energy sources. Preference must be
given to development of renewable energy source projects located within the state. The
utility that owns a nuclear generating plant is eligible to apply for renewable development
fund grants. The utility's proposals must be evaluated by the renewable development fund
board in a manner consistent with that used to evaluate other renewable development fund
project proposals.
    (b) The public utility that owns the Monticello nuclear generating plant must transfer
to the renewable development account $350,000 each year for each dry cask containing
spent fuel that is located at the Monticello nuclear power plant for each year the plant is
in operation, and $5,250,000 each year the plant is not in operation if ordered by the
commission pursuant to paragraph (d) (c). The fund transfer must be made if nuclear
waste is stored in a dry cask at the independent spent-fuel storage facility at Monticello for
any part of a year.
     (c) Expenditures authorized by this subdivision from the account may only be made
after approval by order of the Public Utilities Commission upon a petition by the public
utility. Commission approval is not required for expenditures required under subdivisions
2 and 3, section 116C.7791, or other law.
     (d) (c) After discontinuation of operation of the Prairie Island nuclear plant or the
Monticello nuclear plant and each year spent nuclear fuel is stored in dry cask at the
discontinued facility, the commission shall require the public utility to pay $7,500,000 for
the discontinued Prairie Island facility and $5,250,000 for the discontinued Monticello
facility for any year in which the commission finds, by the preponderance of the evidence,
that the public utility did not make a good faith effort to remove the spent nuclear
fuel stored at the facility to a permanent or interim storage site out of the state. This
determination shall be made at least every two years.
(d) Funds in the account may be expended only for any of the following purposes:
(1) to increase the market penetration within the state of renewable electric energy
resources at reasonable costs;
(2) to promote the start-up, expansion, and attraction of renewable electric energy
projects and companies within the state;
(3) to stimulate research and development within the state into renewable electric
energy technologies; and
(4) to develop near-commercial and demonstration scale renewable electric projects
or near-commercial and demonstration scale electric infrastructure delivery projects if
those delivery projects enhance the delivery of renewable electric energy.
The utility that owns a nuclear generating plant is eligible to apply for renewable
development account grants.
(e) Expenditures authorized by this subdivision from the account may be made only
after approval by order of the Public Utilities Commission upon a petition by the public
utility. The commission may approve proposed expenditures, may disapprove proposed
expenditures that it finds to be not in compliance with this subdivision or otherwise
not in the public interest, and may, if agreed to by the public utility, modify proposed
expenditures. The commission may approve reasonable and necessary expenditures
for administering the account in an amount not to exceed five percent of expenditures.
Commission approval is not required for expenditures required under subdivisions 2 and
3, section 116C.7791, or other law.
(f) The account shall be managed by the public utility but the public utility must
consult about account expenditures with an advisory group that includes, among others,
representatives of its ratepayers. The commission may require that other interests be
represented on the advisory group. The advisory group must be consulted with respect to
the general scope of expenditures in designing a request for proposal and in evaluating
projects submitted in response to a request for proposals. In addition to consulting with the
advisory group, the public utility must utilize an independent third-party expert to evaluate
proposals submitted in response to a request for proposal, including all proposals made by
the public utility. A request for proposal for research and development under paragraph
(d), clause (3), may be limited to or include a request to higher education institutions
located in Minnesota for multiple projects authorized under clause (3). The request for
multiple projects may include a provision that exempts the projects from the third-party
expert review and instead provides for project evaluation and selection by a merit peer
review grant system. The utility should attempt to reach agreement with the advisory
group after consulting with it but the utility has full and sole authority to determine which
expenditures shall be submitted to the commission for commission approval. In the
process of determining request for proposal scope and subject and in evaluating responses
to request for proposals, the public utility must strongly consider, where reasonable,
potential benefit to Minnesota citizens and businesses and the utility's ratepayers.
(g) Funds in the account may not be directly appropriated by the legislature by a
law enacted after January 1, 2012, and unless appropriated by a law enacted prior to
that date may be expended only pursuant to an order of the commission according to
this subdivision.
(h) A request for proposal for renewable energy generation projects must, when
feasible and reasonable, give preference to projects that are most cost-effective for a
particular energy source.
(i) The public utility must annually, by February 15, report to the chair and ranking
minority member of the legislative committees with jurisdiction over energy policy on
projects funded by the account for the prior year and all previous years. The report must,
to the extent possible and reasonable, itemize the actual and projected financial benefit to
the public utility's ratepayers of each project.
(j) A project receiving funds from the account must produce a written final report
that includes sufficient detail for technical readers and a clearly written summary for
nontechnical readers. The report must include an evaluation of the project's financial,
environmental, and other benefits to the state and the public utility's ratepayers.
(k) Final reports, any mid-project status reports, and renewable development account
financial reports must be posted online on a public Web site designated by the commission.
(l) All final reports must acknowledge that the project was made possible in whole
or part by the Minnesota renewable development fund, noting that the fund is financed
by the public utility's ratepayers.
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 2. Minnesota Statutes 2010, section 116C.779, subdivision 2, is amended to read:
    Subd. 2. Renewable energy production incentive. (a) Until January 1, 2021,
$10,900,000 annually must be allocated from available funds in the account to fund
renewable energy production incentives. $9,400,000 of this annual amount is for
incentives for electricity generated by wind energy conversion systems that are eligible for
the incentives under section 216C.41 or Laws 2005, chapter 40.
(b) The balance of this amount, up to $1,500,000 annually, may be used for
production incentives for on-farm biogas recovery facilities and hydroelectric facilities
that are eligible for the incentive under section 216C.41 or for production incentives for
other renewables, to be provided in the same manner as under section 216C.41.
(c) Any portion of the $10,900,000 not expended in any calendar year for the
incentive is available for other spending purposes under this section subdivision 1. This
subdivision does not create an obligation to contribute funds to the account.
(d) The Department of Commerce shall determine eligibility of projects under
section 216C.41 for the purposes of this subdivision. At least quarterly, the Department of
Commerce shall notify the public utility of the name and address of each eligible project
owner and the amount due to each project under section 216C.41. The public utility shall
make payments within 15 working days after receipt of notification of payments due.
EFFECTIVE DATE.This section is effective July 1, 2012.

    Sec. 3. REPEALER.
Laws 2003, First Special Session chapter 11, article 2, section 17, is repealed.
EFFECTIVE DATE.This section is effective the day following final enactment.
Presented to the governor April 18, 2012
Signed by the governor April 20, 2012, 5:07 p.m.

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