HF 3669

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to energy; creating program for government energy conservation
investments; amending Minnesota Statutes 2006, section 216C.09; proposing
coding for new law in Minnesota Statutes, chapter 216C; repealing Laws 2007,
chapter 57, article 2, section 30.

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

Section 1.

Minnesota Statutes 2006, 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 conservation measures as specified by the legislature and
recommend to the governor and the legislature additional energy policies and conservation
measures as required to meet the objectives of sections 216C.05 to 216C.30;

(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, and other goals and policies of sections 216C.05 to
216C.30, 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 the conservation of energy; this
program shall include but not be limited to, general commercial, industrial, and residential,
and transportation areas; such program shall 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 persons can conserve energy;

(10) dispense funds made available for the purpose of research studies and projects
of professional and civic orientation, 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 indigenous energy
resources. The program shall include, but not be limited to, providing technical,
informational, educational, and financial services and materials to persons, businesses,
municipalities, and organizations involved in the development of 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 aid from money received from
litigation or settlement of alleged violations of federal petroleum-pricing regulations
made available to the department for that purpose. deleted text begin The commissioner shall adopt rules
under chapter 14 for this purpose.
deleted text end

(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. 2.

new text begin [216C.42] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For the purpose of this section and section 216C.43, the terms
defined in this section have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Energy improvement project. new text end

new text begin "Energy improvement project" means
a project to improve energy efficiency in a building or facility, including the design,
acquisition, installation, and commissioning of equipment or improvements to a building
or facility, and training of building or facility staff necessary to properly operate and
maintain the equipment or improvements.
new text end

new text begin Subd. 3. new text end

new text begin Energy project study. new text end

new text begin "Energy project study" means a technical and
financial study of one or more energy improvement projects, including:
new text end

new text begin (1) an analysis of historical energy consumption and cost data;
new text end

new text begin (2) a description of existing equipment, structural elements, operating characteristics,
and other conditions affecting energy use;
new text end

new text begin (3) a description of the proposed energy improvement projects;
new text end

new text begin (4) a detailed budget for the proposed project; and
new text end

new text begin (5) calculations sufficient to demonstrate the expected energy savings.
new text end

new text begin Subd. 4. new text end

new text begin Financing agreement. new text end

new text begin "Financing agreement" means a tax-exempt
lease-purchase agreement entered into by a public entity and a financial institution under a
standard project financing agreement offered under section 216C.43, subdivision 6.
new text end

new text begin Subd. 5. new text end

new text begin Guarantee. new text end

new text begin "Guarantee" means a positive budget impact guarantee under
section 216C.43, subdivision 7.
new text end

new text begin Subd. 6. new text end

new text begin Program. new text end

new text begin "Program" means the energy improvement financing program
for state and local governments authorized by section 216C.43.
new text end

new text begin Subd. 7. new text end

new text begin Public entity. new text end

new text begin "Public entity" means a Minnesota state agency, county,
statutory or home rule charter city, town, school district, or any combination of those units
operating under an agreement to exercise powers jointly.
new text end

Sec. 3.

new text begin [216C.43] ENERGY IMPROVEMENT FINANCING PROGRAM FOR
STATE AND LOCAL GOVERNMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Commissioner's authority and duties; public entity authority.
new text end

new text begin The commissioner shall administer this section. A public entity may enter into contracts
for the purposes of this section with the commissioner, the primary contractor, other
contracted technical service providers, and participating financial institutions.
new text end

new text begin Subd. 2. new text end

new text begin Program eligibility; voluntary program participation; targeted
technical services. new text end

new text begin A public entity may elect to participate in the program. The
commissioner may prioritize and target technical services offered under subdivision
5 to public entities that the commissioner determines offer the greatest potential for
cost-effective energy improvement projects.
new text end

new text begin Subd. 3. new text end

new text begin Primary contractor for technical, financial, and program management
services. new text end

new text begin The commissioner shall enter into a contract with a Minnesota not-for-profit
organization for the delivery of technical services, financial management, marketing, and
administrative services necessary for implementation of the program.
new text end

new text begin Subd. 4. new text end

new text begin Targeted technical services. new text end

new text begin The commissioner shall offer technical
services to targeted public entities to conduct energy project studies. The commissioner
may contract with one or more qualified technical service providers to conduct energy
project studies for targeted public entities. The commissioner may require full or partial
reimbursement of costs for technical services provided to a public entity, subject to terms
and conditions specified and agreed to by contract prior to the delivery of technical
services. A public entity may independently procure technical services to conduct an
energy project study, but the energy project study must be reviewed and approved by the
commissioner to qualify an energy improvement project for a financing agreement under
subdivision 6 or a guarantee under subdivision 7.
new text end

new text begin Subd. 5. new text end

new text begin Participation of technical service providers statewide. new text end

new text begin Program
activities must be implemented to encourage statewide participation of engineers,
architects, energy auditors, contractors, and other technical service providers. The
commissioner may provide training on energy project study requirements and procedures
to technical service providers.
new text end

new text begin Subd. 6. new text end

new text begin Standard project financing agreement. new text end

new text begin The commissioner shall solicit
proposals from private financial institutions and may enter into a standard project
financing agreement with one or more financial institutions. A standard project financing
agreement must specify terms and conditions uniformly available to all participating
public entities for financing to implement energy improvement projects under this section.
A public entity may choose to finance an energy improvement project by means other than
a standard project financing agreement, but a guarantee under subdivision 7 must not be
offered unless the commissioner determines that the other financing means creates no
greater potential obligation under a guarantee than would be created through a standard
project financing agreement.
new text end

new text begin Subd. 7. new text end

new text begin Positive budget impact guarantee. new text end

new text begin (a) The commissioner shall offer
a guarantee of positive budget impact for the term of the financing agreement to a
participating public entity for qualifying energy improvement projects. A positive budget
impact guarantee is an agreement by the commissioner to lend funds to a public entity in
an amount necessary so that the cumulative payments made by the public entity under a
financing agreement minus the amount loaned by the commissioner do not exceed the
actual energy and operating cost savings attributable to the energy improvement project
for the term of the guarantee.
new text end

new text begin Funds loaned to a public entity by the commissioner in fulfillment of a guarantee are
repayable only to the extent that a positive budget impact is maintained during the term of
the guarantee. Terms and conditions of a guarantee must be agreed to by contract prior to
a public entity entering into a financing agreement.
new text end

new text begin (b) A guarantee contract must include, but is not limited to:
new text end

new text begin (1) specification of methods and procedures to measure and verify energy cost
savings;
new text end

new text begin (2) obligations of the public entity to operate and maintain the energy improvements;
new text end

new text begin (3) procedures to modify the guarantee if the public entity modifies operating
characteristics of its building or facility in a manner that adversely affects energy cost
savings;
new text end

new text begin (4) interest charged on the loan, which may not exceed the interest on the related
financial agreement; and
new text end

new text begin (5) procedures for resolution of disputes.
new text end

new text begin Subd. 8. new text end

new text begin Qualifying energy improvement projects. new text end

new text begin A public entity may submit
to the commissioner, on a form prescribed by the commissioner, an application for a
financing agreement authorization and guarantee for energy improvement projects. The
commissioner shall approve an energy improvement project for a guarantee and authorize
eligibility for a financing agreement if the commissioner determines that:
new text end

new text begin (1) the application has been approved by the governing body or agency head of the
public entity;
new text end

new text begin (2) the project is technically and economically feasible;
new text end

new text begin (3) the public entity has made adequate provision for the operation and maintenance
of the project;
new text end

new text begin (4) the project has a substantial likelihood to result in a positive cash flow in each
year the financing agreement is in effect; and
new text end

new text begin (5) adequate funds will be available to the commissioner to fulfill the guarantee.
new text end

new text begin Subd. 9. new text end

new text begin Program costs. new text end

new text begin Program costs incurred by the commissioner or a public
entity that are not direct costs to implement energy improvement projects may be paid
with program funds appropriated under subdivision 10.
new text end

new text begin Subd. 10. new text end

new text begin Funding; appropriation; receipts. new text end

new text begin Petroleum violation escrow funds
appropriated to the commissioner by Laws 1988, chapter 686, article 1, section 38, for
state energy loan programs for schools, hospitals, and public buildings, and reappropriated
by Laws 2007, chapter 57, article 2, section 30, are appropriated to the commissioner for
the purposes of this section and are available until spent.
new text end

Sec. 4. new text begin REPEALER.
new text end

new text begin Laws 2007, chapter 57, article 2, section 30, new text end new text begin is repealed.
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