2003 Minnesota Statutes

CHAPTER 216B. Public utilities

     216B.01 Legislative findings. 

    It is hereby declared to be in the public interest that 
 public utilities be regulated as hereinafter provided in order 
 to provide the retail consumers of natural gas and electric 
 service in this state with adequate and reliable services at 
 reasonable rates, consistent with the financial and economic 
 requirements of public utilities and their need to construct 
 facilities to provide such services or to otherwise obtain 
 energy supplies, to avoid unnecessary duplication of facilities 
 which increase the cost of service to the consumer and to 
 minimize disputes between public utilities which may result in 
 inconvenience or diminish efficiency in service to the 
 consumers.  Because municipal utilities are presently 
 effectively regulated by the residents of the municipalities 
 which own and operate them, and cooperative electric 
 associations are presently effectively regulated and controlled 
 by the membership under the provisions of chapter 308A, it is 
 deemed unnecessary to subject such utilities to regulation under 
 this chapter except as specifically provided herein. 

    HIST: 1974 c 429 s 1; 1978 c 795 s 1; 1989 c 356 s 8 

     216B.013 Hydrogen energy economy goal. 

    It is a goal of this state that Minnesota move to hydrogen 
 as an increasing source of energy for its electrical power, 
 heating, and transportation needs. 

    HIST: 1Sp2003 c 11 art 2 s 2 

     216B.02 Definitions. 

    Subdivision 1.    Scope.  For the purposes of this 
 chapter, the terms defined in this section have the meanings 
 given them. 

    Subd. 1a.    Commission.  "Commission" means the Public 
 Utilities Commission. 

    Subd. 2.    Corporation.  "Corporation" means a private 
 corporation, a public corporation, a municipality, an 
 association, a cooperative whether incorporated or not, a joint 
 stock association, a business trust, or any political 
 subdivision or agency. 

    Subd. 2a.    Department.  "Department" means the 
 Department of Commerce of the state of Minnesota. 

    Subd. 2b.    Municipality.  "Municipality" means any 
 city however organized. 

    Subd. 3.    Person.  "Person" means a natural person, a 
 partnership, or two or more persons having a joint or common 
 interest, and a corporation as hereinbefore defined. 

    Subd. 4.    Public utility.  "Public utility" means 
 persons, corporations or other legal entities, their lessees, 
 trustees, and receivers, now or hereafter operating, 
 maintaining, or controlling in this state equipment or 
 facilities for furnishing at retail natural, manufactured or 
 mixed gas or electric service to or for the public or engaged in 
 the production and retail sale thereof but does not include (1) 
 a municipality or a cooperative electric association, organized 
 under the provisions of chapter 308A producing or furnishing 
 natural, manufactured or mixed gas or electric service or (2) a 
 retail seller of compressed natural gas used as a vehicular fuel 
 which purchases the gas from a public utility.  Except as 
 otherwise provided, the provisions of this chapter shall not be 
 applicable to any sale of natural, manufactured or mixed gas or 
 electricity by a public utility to another public utility for 
 resale.  In addition, the provisions of this chapter shall not 
 apply to a public utility whose total natural gas business 
 consists of supplying natural, manufactured or mixed gas to not 
 more than 650 customers within a city pursuant to a franchise 
 granted by the city, provided a resolution of the city council 
 requesting exemption from regulation is filed with the 
 commission.  The city council may rescind the resolution 
 requesting exemption at any time, and, upon the filing of the 
 rescinding resolution with the commission, the provisions of 
 this chapter shall apply to the public utility.  No person shall 
 be deemed to be a public utility if it furnishes its services 
 only to tenants or cooperative or condominium owners in 
 buildings owned, leased, or operated by such person.  No person 
 shall be deemed to be a public utility if it furnishes service 
 to occupants of a manufactured home or trailer park owned, 
 leased, or operated by such person.  No person shall be deemed 
 to be a public utility if it produces or furnishes service to 
 less than 25 persons. 

    Subd. 5.    Rate.  "Rate" means every compensation, 
 charge, fare, toll, tariff, rental and classification, or any of 
 them, demanded, observed, charged, or collected by any public 
 utility for any service and any rules, practices, or contracts 
 affecting any such compensation, charge, fare, toll, rental, 
 tariff, or classification. 

    Subd. 6.    Service.  "Service" means natural, 
 manufactured or mixed gas and electricity; the installation, 
 removal, or repair of equipment or facilities for delivering or 
 measuring such gas and electricity. 

    Subd. 6a.    Submetering.  "Submetering" means 
 measuring, by a building's owner, through mechanical or 
 electronic devices, the use of electricity by occupants in 
 multiple-unit residential or commercial buildings to fairly 
 apportion the entire electrical costs for the building among its 
 occupants.  

    Subd. 7.  Renumbered subd 1a 

    Subd. 8.  Renumbered subd 2a 

    Subd. 9.  Renumbered subd 2b 

    HIST: 1974 c 429 s 2; 1978 c 795 s 2; 1980 c 614 s 123; 1981 c 
 17 s 1; 1981 c 144 s 1; 1981 c 365 s 9; 1983 c 366 s 1,2; 1984 c 
 428 s 1; 1985 c 248 s 70; 1989 c 356 s 9; 1Sp2001 c 4 art 6 s 
 34-36 

     216B.022 Submetering. 

    Nothing in this chapter grants the commission or a public 
 utility the authority to limit the availability of submetering 
 to a building occupant when the building is served by a public 
 utility's master meter which measures the total electric energy 
 delivered to the building. 

    HIST: 1983 c 366 s 3 

MUNICIPALS AND COOPERATIVES

     216B.025 Municipal regulation option. 

    A municipality may elect to become subject to regulation by 
 the commission pursuant to sections 216B.10 and 216B.11.  An 
 election for regulation may be effected by resolution of the 
 governing body requesting regulation and filed with the 
 commission.  

    HIST: 1981 c 142 s 1 

     216B.026 Cooperative electric association; election on 
  regulation. 

    Subdivision 1.    Election.  A cooperative electric 
 association may elect to become subject to rate regulation by 
 the commission pursuant to sections 216B.03 to 216B.23.  The 
 election shall be approved by a majority of members or 
 stockholders voting by mail ballot initiated by petition of not 
 less than five percent of the members or stockholders of the 
 association, as determined by membership figures submitted by 
 the association to the Rural Electric Administration for the 
 month in which the petition was submitted.  For a cooperative 
 electric association that is the product of a merger or 
 consolidation of three or more associations between December 30, 
 1996, and January 1, 2001, the number of members or stockholders 
 necessary to initiate the petition shall be no less than one 
 percent of the members or stockholders of the association.  

    Subd. 2.    Petition contents; verification.  The 
 petition form shall be prescribed by the department and sample 
 forms shall be available from the department and electric 
 cooperative associations.  Petitions shall include a uniform 
 statement that petition signers are requesting a balloting of 
 the association membership on the question of regulation of 
 electric rates of the association by the commission.  The 
 department shall, upon receipt, transmit the prescribed form of 
 petition to the appropriate association for validation of 
 petition signatures in accordance with agreed procedures between 
 the association and the department.  When the association 
 rejects any signature on a petition as invalid, it shall provide 
 the department with a written statement as to the reason the 
 cooperative deems the signature invalid.  The department may 
 challenge the association's decisions on the validity of 
 signatures and may appeal to the commission for a resolution of 
 the issue through informal proceedings before the commission 
 after notice to all parties.  

    Subd. 3.    Voting for members.  Whenever a vote or 
 petition of members or stockholders of an association is 
 submitted pursuant to this section, the spouse of the member or 
 stockholder may sign the petition and vote on behalf of the 
 member or stockholder unless the member or stockholder has 
 notified the association in writing otherwise.  Such a 
 notification by a member or stockholder shall be provided to the 
 association and to the department for those petition matters 
 pursuant to this section.  

    Subd. 4.    Election procedure; effect.  If the 
 department determines that the petition meets the percent 
 requirement of subdivision 1, a balloting of members on the 
 question of regulation of electric rates by the commission shall 
 be supervised by the department.  The ballot to be used for the 
 election shall be approved by the board of directors of the 
 association and the department.  In the event of a dispute on 
 balloting procedures, the dispute shall be resolved through 
 informal proceedings before the commission after notice to all 
 parties.  The association shall mail ballots to the 
 association's members who shall return the ballots to the 
 department.  The department shall keep the ballots sealed until 
 a date agreed upon by the department and the board of 
 directors.  On this date, representatives of the department and 
 the association shall count the ballots.  If a majority of the 
 association's members or spouses who vote, elect to become 
 subject to rate regulation by the commission, the election shall 
 be effective 30 days after certified copies of the resolutions 
 approving the election are filed with the commission.  These 
 provisions also apply to associations that wish to be 
 deregulated.  Any cooperative that is regulated by the 
 commission, pursuant to sections 216B.03 to 216B.23 may follow 
 the procedures set forth above.  Any association subject to 
 regulation of rates by the commission shall be exempt from the 
 provisions of sections 216B.48, 216B.49, 216B.50, and 216B.51. 

    Subd. 5.    Member due process.  Section 216B.027, 
 granting rights to stockholders, applies to the exercise of 
 stockholders' rights regardless of whether a referendum has been 
 held as required by section 216B.027, subdivision 7.  
 Notwithstanding section 216B.027, subdivision 6, a cooperative 
 shall pay the costs of including stockholders' positions on 
 issues as provided under section 216B.027, subdivision 6.  This 
 subdivision applies only to elections that require no less than 
 one percent of members to initiate pursuant to subdivision 1. 

    HIST: 1981 c 144 s 2; 2000 c 292 s 1-3 

     216B.027 Cooperative electric association stockholder 
  rights. 

    Subdivision 1.    Intent.  It is the intent of this 
 section to specify those rights which shall be extended to 
 stockholders of cooperative electric associations.  The 
 guarantee of these rights, as specified herein, is intended to 
 further the active participation of stockholders in any and all 
 matters pertaining to the prudent operation of their 
 organization.  

    Subd. 2.    Scope.  Cooperative associations organized 
 under chapter 308A for the purpose of providing rural 
 electrification at retail to ultimate consumers shall comply 
 with the provisions of this section in addition to other 
 applicable provisions of chapter 308A and other applicable state 
 and federal laws.  

    Subd. 3.    Business records.  The provisions of section 
 302A.461 and any amendments or successor requirements to it 
 shall apply to every wholesale or retail cooperative electric 
 association.  The rights granted to wholesale and retail 
 electric cooperative stockholders in this section shall apply 
 also to the spouse of the stockholder.  In addition to the 
 requirements of section 302A.461, a wholesale or retail electric 
 cooperative shall maintain records of all proceedings of 
 meetings of stockholders and directors during the previous 
 three-year period including the vote of each director on roll 
 call votes.  Roll call votes are required on actions which 
 directly establish service charge and rate schedules.  Roll call 
 voting is also required on any matter upon the request of one or 
 more directors.  Every duly elected director of a retail 
 cooperative electric association shall have the right to inspect 
 under section 302A.461, in person and at any reasonable time, 
 the business records required by this subdivision and maintained 
 by the wholesale cooperative electric association from which it 
 purchases the majority of its electric requirements.  

    Subd. 4.    Open meeting; notice.  Meetings of the board 
 of directors of any retail cooperative electric association must 
 be open to the stockholders of the cooperative and the 
 stockholders' spouses.  Stockholders must be given notice of all 
 regularly scheduled meetings except those of an emergency 
 nature.  Duly elected directors of retail cooperative 
 associations must be given notice, through their retail 
 cooperative associations, of all meetings of the board of 
 directors of the wholesale cooperative association, except those 
 of an emergency nature, from which the retail cooperative 
 purchases the majority of its electric requirements.  Portions 
 of meetings relating to labor negotiations, current litigation, 
 personnel matters, and nonpayment of customer accounts are 
 excluded from the provisions of this subdivision.  

    Subd. 5.    Petitions; voting.  Notwithstanding the 
 provisions of sections 308A.611 and 308A.615, upon receipt of a 
 written petition concerning governance matters signed by at 
 least 500 stockholders or five percent of the stockholders, 
 whichever is less, of a retail cooperative electric association, 
 the matter in the petition must be presented to the stockholders 
 of the cooperative for a vote at the next annual meeting.  
 Petitions must be received by the cooperative electric 
 association 60 days prior to the scheduled annual meeting.  For 
 purposes of this section, "governance matters" means matters 
 properly contained in the articles of incorporation or bylaws by 
 adopting, amending, or repealing bylaws or the articles of 
 incorporation.  

    Subd. 6.    Equal time; petitioner.  Whenever the 
 directors of a retail cooperative electric association provide 
 information to stockholders to influence their vote on a matter 
 to be decided by a vote of the stockholders pursuant to a 
 successful petition submitted under the provisions of 
 subdivision 5 or section 216B.026, subdivision 4, the directors 
 shall provide the organizers of the petition or person 
 presenting the petition the opportunity to include their 
 position on the matter to the stockholders in a substantially 
 similar mode and range of distribution.  The organizers of the 
 petition shall pay the costs of such inclusion.  

    Subd. 7.    Optional referendum.  No cooperative shall 
 be bound by the provisions of this section unless adoption has 
 been approved at referendum using the petition and election 
 procedures in section 216B.026.  Within 60 days of May 19, 1983, 
 the board of directors of each cooperative electric association 
 shall notify the stockholders of the provisions of this section 
 and shall explain the process for ratification by petition and 
 election as provided in this subdivision. 

    HIST: 1983 c 162 s 1; 1989 c 144 art 2 s 3; 1989 c 356 s 10 

RATES, STANDARDS, AND PRACTICES

     216B.03 Reasonable rate. 

    Every rate made, demanded, or received by any public 
 utility, or by any two or more public utilities jointly, shall 
 be just and reasonable.  Rates shall not be unreasonably 
 preferential, unreasonably prejudicial or discriminatory, but 
 shall be sufficient, equitable and consistent in application to 
 a class of consumers.  To the maximum reasonable extent, the 
 commission shall set rates to encourage energy conservation and 
 renewable energy use and to further the goals of sections 
 216B.164, 216B.241, and 216C.05.  Any doubt as to reasonableness 
 should be resolved in favor of the consumer.  For rate making 
 purposes a public utility may treat two or more municipalities 
 served by it as a single class wherever the populations are 
 comparable in size or the conditions of service are similar.  

    HIST: 1974 c 429 s 3; 1983 c 179 s 4; 1987 c 312 art 1 s 10 
 subd 1 

     216B.04 Standard of service.  

    Every public utility shall furnish safe, adequate, 
 efficient, and reasonable service; provided that service shall 
 be deemed adequate if made so within 90 days after a person 
 requests service.  Upon application by a public utility, and for 
 good cause shown, the commission may extend the period for not 
 to exceed another 90 days.  

    HIST: 1974 c 429 s 4 

     216B.045 Regulation of intrastate natural gas pipeline. 

    Subdivision 1.    Definition of intrastate pipeline.  
 For the purposes of this section "intrastate pipeline" means a 
 pipeline wholly within the state of Minnesota which transports 
 or delivers natural gas received from another person at a point 
 inside or at the border of the state, which is delivered at a 
 point within the state to another, provided that all the natural 
 gas is consumed within the state.  An intrastate pipeline does 
 not include a pipeline owned or operated by a public utility, 
 unless a public utility files a petition requesting that a 
 pipeline or a portion of a pipeline be classified as an 
 intrastate pipeline and the commission approves the petition.  

    Subd. 2.    Reasonable rate.  Every rate and contract 
 relating to the sale or transportation of natural gas through an 
 intrastate pipeline shall be just and reasonable.  No owner or 
 operator of an intrastate pipeline shall provide intrastate 
 pipeline services in a manner which unreasonably discriminates 
 among customers receiving like or contemporaneous services.  

    Subd. 3.    Transportation rate; discrimination.  Every 
 owner or operator of an intrastate pipeline shall offer 
 intrastate pipeline transportation services by contract on an 
 open access, nondiscriminatory basis.  To the extent the 
 intrastate pipeline has available capacity, the owner or 
 operator of the intrastate pipeline must provide firm and 
 interruptible transportation on behalf of any customer.  If 
 physical facilities are needed to establish service to a 
 customer, the customer may provide those facilities or the owner 
 or operator of the intrastate pipeline may provide the 
 facilities for a reasonable and compensatory charge. 

    Subd. 4.    Contract; commission approval.  No contract 
 establishing the rates, terms, and conditions of service and 
 facilities to be provided by intrastate pipelines is effective 
 until it is filed with and approved by the commission.  The 
 commission has the authority to approve the contracts and to 
 regulate the types and quality of services to be provided 
 through intrastate pipelines.  The approval of a contract for an 
 intrastate pipeline to provide service to a public utility does 
 not constitute a determination by the commission that the prices 
 actually paid by the public utility under that contract are 
 reasonable or prudent nor does approval constitute a 
 determination that purchases of gas made or deliveries of gas 
 taken by the public utility under that contract are reasonable 
 or prudent. 

    Subd. 5.    Complaint.  Any customer of an intrastate 
 pipeline, any person seeking to become a customer of an 
 intrastate pipeline, the department, or the commission on its 
 own motion, may bring a complaint regarding the rates, 
 contracts, terms, conditions, and types of service provided or 
 proposed to be provided through an intrastate pipeline, 
 including a complaint that a service which can reasonably be 
 demanded is not offered by the owner or operator of the 
 intrastate pipeline.  If a complaint involves the question of 
 whether or not an intrastate pipeline has capacity available, 
 the commission shall after hearing make a determination of the 
 available capacity but shall not impair the owner or operator of 
 the intrastate pipeline contractual obligation to provide firm 
 transportation service.  If a complaint concerns the use of 
 available capacity by one or more customers of an intrastate 
 pipeline, the commission shall after hearing determine the 
 reasonable use of the available capacity by the customers.  The 
 commission shall not require an owner or operator of an 
 intrastate pipeline to expand its available capacity but may 
 require the owner or operator to maintain a reasonable quality 
 of service.  The commission may dismiss any complaint without a 
 hearing if in its opinion a hearing is not in the public 
 interest.  Complaints brought under this subdivision shall be 
 governed by section 216B.17.  

    Subd. 6.    Records; reports; inspections; cost 
 assessments.  Sections 216B.10, subdivisions 1 and 4, 216B.12, 
 216B.13, and 216B.62, subdivisions 2, 4, and 6 shall apply to 
 owners and operators of intrastate pipelines.  

    Subd. 7.    Natural gas emergency.  The commission may 
 declare a natural gas supply emergency if it finds that a severe 
 natural gas shortage endangering the health or safety of the 
 citizens of the state exists or is imminent in the state.  If 
 the commission declares that a natural gas supply emergency 
 exists, it may for the duration of the emergency order the 
 suspension of any contract providing for the sale and 
 transportation of natural gas through an intrastate pipeline, 
 and may for the duration of the emergency order an owner or 
 operator of the intrastate pipeline to furnish such 
 transportation services as are required by the public interest. 
 The owner or operator of the intrastate pipeline shall be 
 compensated for its services furnished under an emergency order 
 issued under this section, and the commission shall determine 
 the just and reasonable compensation for the services required 
 to be provided during the emergency.  

    HIST: 1987 c 9 s 1; 1990 c 370 s 1; 1992 c 478 s 1 

     216B.05 Filing schedules, rules, and service agreements. 

    Subdivision 1.    Public rate filing.  Every public 
 utility shall file with the commission schedules showing all 
 rates, tolls, tariffs and charges which it has established and 
 which are in force at the time for any service performed by it 
 within the state, or for any service in connection therewith or 
 performed by any public utility controlled or operated by it. 

    Subd. 2.    Schedule and rules filing.  Every public 
 utility shall file with and as a part of the filings under 
 subdivision 1, all rules that, in the judgment of the 
 commission, in any manner affect the service or product, or the 
 rates charged or to be charged for any service or product, as 
 well as any contracts, agreements or arrangements relating to 
 the service or product or the rates to be charged for any 
 service or product to which the schedule is applicable as the 
 commission may by general or special order direct; provided that 
 contracts and agreements for electric service must be filed as 
 required by subdivision 2a.  

    Subd. 2a.    Electric service contract.  A contract for 
 electric service entered into between a public utility and one 
 of its customers, in which the public utility and the customer 
 agree to customer-specific rates, terms, or service conditions 
 not already contained in the approved schedules, tariffs, or 
 rules of the utility, must be filed for approval by the 
 commission pursuant to the commission's rules of practice.  
 Contracts between public utilities and customers that are 
 necessitated by specific statutes in this chapter must be filed 
 for approval under those statutes and any rules adopted by the 
 commission pursuant to those statutes. 

    Subd. 3.    Public inspection.  Every public utility 
 shall keep copies of the filings under subdivisions 1, 2, and 2a 
 open to public inspection under rules as the commission may 
 prescribe. 

    HIST: 1974 c 429 s 5; 1985 c 248 s 70; 1997 c 191 art 1 s 1 

     216B.06 Receiving different compensation. 

    No public utility shall directly or indirectly, by any 
 device whatsoever, or in any manner, charge, demand, collect, or 
 receive from any person a greater or less compensation for any 
 service rendered or to be rendered by the utility than that 
 prescribed in the schedules of rates of the public utility 
 applicable thereto when filed in the manner provided in Laws 
 1974, chapter 429, nor shall any person knowingly receive or 
 accept any service from a public utility for a compensation 
 greater or less than that prescribed in the schedules, provided 
 that all rates being charged and collected by a public utility 
 upon January 1, 1975, may be continued until schedules are filed.

    HIST: 1974 c 429 s 6; 1978 c 795 s 3 

     216B.07 Rate preference prohibited.  

    No public utility shall, as to rates or service, make or 
 grant any unreasonable preference or advantage to any person or 
 subject any person to any unreasonable prejudice or disadvantage.

    HIST: 1974 c 429 s 7 

     216B.075 Meter reading; customer scheduling needs. 

    Notwithstanding any other provision of rule or policy to 
 the contrary, every public utility providing natural gas or 
 electricity at retail shall make a reasonable effort to obtain 
 readings at least once every 18 months from nonaccessible 
 meters.  Readings shall be obtained at times that meet the needs 
 of customer schedules.  Utilities shall make a reasonable effort 
 to provide evening and Saturday or Sunday meter reading service 
 at no extra charge to a customer whose work or other schedule 
 makes a business hour reading of meters a hardship.  Utilities 
 may refuse to read a customer's meter during nondaylight hours 
 if such activity could threaten the safety of the utility 
 meter-reading employee.  

    A utility may also allow a customer to self-read the 
 customer's meter for periods of time not to exceed 18 months, 
 provided that the customer is reminded periodically of the 
 potentially serious financial consequences of errors in 
 self-reading.  

    A utility may terminate service to a customer who refuses 
 to allow a utility company employee access to a nonaccessible 
 meter for a period of 18 months or more. 

    HIST: 1983 c 176 s 1 

COMMISSION RESPONSIBILITIES

     216B.08 Duties of commission.  

    The commission is hereby vested with the powers, rights, 
 functions, and jurisdiction to regulate in accordance with the 
 provisions of Laws 1974, chapter 429 every public utility as 
 defined herein.  The exercise of such powers, rights, functions, 
 and jurisdiction is prescribed as a duty of the commission.  The 
 commission is authorized to make rules in furtherance of the 
 purposes of Laws 1974, chapter 429.  

    HIST: 1974 c 429 s 8; 1985 c 248 s 70 

     216B.09 Standards; classifications; rules; practices. 

    Subdivision 1.    Commission authority, generally.  The 
 commission, on its own motion or upon complaint and after 
 reasonable notice and hearing, may ascertain and fix just and 
 reasonable standards, classifications, rules, or practices to be 
 observed and followed by any or all public utilities with 
 respect to the service to be furnished. 

    Subd. 2.    Electric service, rules, measurement 
 standards, grounding.  The commission, on its own motion or 
 upon complaint and after reasonable notice and hearing, may 
 ascertain and fix adequate and reasonable standards for the 
 measurement of the quantity, quality, pressure, initial voltage, 
 or other condition pertaining to the supply of the service; 
 prescribe reasonable rules for the examination and testing of 
 the service and for the measurement thereof; establish or 
 approve reasonable rules, specifications, and standards to 
 secure the accuracy of all meters, instruments and equipment 
 used for the measurement of any service of any public utility.  
 In this subdivision, service standards or requirements governing 
 any current or voltage originating from the practice of 
 grounding of electrical systems apply to cooperative 
 associations and municipal utilities providing or furnishing 
 retail electric service to agricultural customers. 

    Subd. 3.    Filings.  Any standards, classifications, 
 rules, or practices now or hereafter observed or followed by any 
 public utility may be filed by it with the commission, and the 
 same shall continue in force until amended by the public utility 
 or until changed by the commission as herein provided.  

    The commission may require the filing of all rates, 
 including rates charged to and by public utilities.  

    Subd. 4.    Appearance before federal agency.  The 
 commission is empowered to appear before the Federal Energy 
 Regulatory Commission to offer evidence and to seek appropriate 
 relief in any case in which the rates charged consumers within 
 the state of Minnesota may be affected. 

    HIST: 1974 c 429 s 9; 1985 c 248 s 70; 1993 c 327 s 3 

     216B.095 Disconnection during cold weather. 

    (a) The commission shall amend its rules governing 
 disconnection of residential utility customers who are unable to 
 pay for utility service during cold weather to include the 
 following: 

    (1) coverage of customers whose household income is less 
 than 50 percent of the state median income; 

    (2) a requirement that a customer who pays the utility at 
 least ten percent of the customer's income or the full amount of 
 the utility bill, whichever is less, in a cold weather month 
 cannot be disconnected during that month.  The customer's income 
 means the actual monthly income of the customer or the average 
 monthly income of the customer computed on an annual calendar 
 year, whichever is less, and does not include any amount 
 received for energy assistance; 

    (3) that the ten percent figure in clause (2) must be 
 prorated between energy providers proportionate to each 
 provider's share of the customer's total energy costs where the 
 customer receives service from more than one provider; 

    (4) verification of income by the local energy assistance 
 provider or the utility, unless the customer is automatically 
 eligible for protection against disconnection as a recipient of 
 any form of public assistance, including energy assistance, that 
 uses income eligibility in an amount at or below the income 
 eligibility in clause (1); 

    (5) a requirement that the customer receive referrals to 
 energy assistance, weatherization, conservation, or other 
 programs likely to reduce the customer's energy bills; and 

    (6) a requirement that customers who have demonstrated an 
 inability to pay on forms provided for that purpose by the 
 utility, and who make reasonably timely payments to the utility 
 under a payment plan that considers the financial resources of 
 the household, cannot be disconnected from utility service from 
 October 15 through April 15.  A customer who is receiving energy 
 assistance is deemed to have demonstrated an inability to pay. 

    (b) For the purposes of this section, "disconnection" 
 includes a service or load limiter or any device that limits or 
 interrupts electric service in any way. 

    HIST: 1989 c 338 s 1; 1989 c 356 s 59; 2001 c 212 art 4 s 1; 
 1Sp2003 c 11 art 3 s 1 

     216B.097 Cold weather rule, cooperative or municipal 
  utility. 

    Subdivision 1.    Application; notice to residential 
 customer.  (a) A municipal utility or a cooperative electric 
 association must not disconnect the utility service of a 
 residential customer during the period between October 15 and 
 April 15 if the disconnection affects the primary heat source 
 for the residential unit when the following conditions are met: 

    (1) the customer has declared inability to pay on forms 
 provided by the utility.  For the purposes of this clause, a 
 customer that is receiving energy assistance is deemed to have 
 demonstrated an inability to pay; 

    (2) the household income of the customer is less than 50 
 percent of the state median income; 

    (3) verification of income may be conducted by the local 
 energy assistance provider or the utility, unless the customer 
 is automatically eligible for protection against disconnection 
 as a recipient of any form of public assistance, including 
 energy assistance that uses income eligibility in an amount at 
 or below the income eligibility in clause (2); 

    (4) a customer whose account is current for the billing 
 period immediately prior to October 15 or who, at any time, 
 enters into a payment schedule that considers the financial 
 resources of the household and is reasonably current with 
 payments under the schedule; and 

    (5) the customer receives referrals to energy assistance 
 programs, weatherization, conservation, or other programs likely 
 to reduce the customer's energy bills. 

    (b) A municipal utility or a cooperative electric 
 association must, between August 15 and October 15 of each year, 
 notify all residential customers of the provisions of this 
 section. 

    Subd. 2.    Notice to residential customer facing 
 disconnection.  Before disconnecting service to a residential 
 customer during the period between October 15 and April 15, a 
 municipal utility or cooperative electric association must 
 provide the following information to a customer: 

    (1) a notice of proposed disconnection; 

    (2) a statement explaining the customer's rights and 
 responsibilities; 

    (3) a list of local energy assistance providers; 

    (4) forms on which to declare inability to pay; and 

    (5) a statement explaining available time payment plans and 
 other opportunities to secure continued utility service. 

    Subd. 3.    Restrictions if disconnection necessary.  
 (a) If a residential customer must be involuntarily disconnected 
 between October 15 and April 15 for failure to comply with the 
 provisions of subdivision 1, the disconnection must not occur on 
 a Friday or on the day before a holiday.  Further, the 
 disconnection must not occur until at least 20 days after the 
 notice required in subdivision 2 has been mailed to the customer 
 or 15 days after the notice has been personally delivered to the 
 customer. 

    (b) If a customer does not respond to a disconnection 
 notice, the customer must not be disconnected until the utility 
 investigates whether the residential unit is actually occupied.  
 If the unit is found to be occupied, the utility must 
 immediately inform the occupant of the provisions of this 
 section.  If the unit is unoccupied, the utility must give seven 
 days' written notice of the proposed disconnection to the local 
 energy assistance provider before making a disconnection. 

    (c) If, prior to disconnection, a customer appeals a notice 
 of involuntary disconnection, as provided by the utility's 
 established appeal procedure, the utility must not disconnect 
 until the appeal is resolved. 

    Subd. 4.    Application to service limiters.  For the 
 purposes of this section, "disconnection" includes a service or 
 load limiter or any device that limits or interrupts electric 
 service in any way. 

    HIST: 1991 c 235 art 2 s 1; 2001 c 212 art 4 s 2; 1Sp2003 c 11 
 art 3 s 2 

     216B.0975 Disconnection during extreme heat conditions. 

    A utility may not effect an involuntary disconnection of 
 residential services in affected counties when an excessive heat 
 watch, heat advisory, or excessive heat warning issued by the 
 National Weather Service is in effect.  For purposes of this 
 section, "utility" means a public utility providing electric 
 service, municipal utility, or cooperative electric association. 

    HIST: 1Sp2003 c 11 art 3 s 3 

     216B.098 Residential customer protections. 

    Subdivision 1.    Applicability.  The provisions of this 
 section apply to residential customers of public utilities, 
 municipal utilities, and cooperative electric associations.  
 Each municipal utility and cooperative electric association may 
 establish terms and conditions for the plans and agreements 
 required under subdivisions 2 and 3. 

    Subd. 2.    Budget billing plans.  A utility shall offer 
 a customer a budget billing plan for payment of charges for 
 service, including adequate notice to customers prior to 
 changing budget payment amounts.  Municipal utilities having 
 3,000 or fewer customers are exempt from this requirement.  
 Municipal utilities having more than 3,000 customers shall 
 implement this requirement before July 1, 2003. 

    Subd. 3.    Payment agreements.  A utility shall offer a 
 payment agreement for the payment of arrears.  

    Subd. 4.    Undercharges.  A utility shall offer a 
 payment agreement to customers who have been undercharged if no 
 culpable conduct by the customer or resident of the customer's 
 household caused the undercharge.  The agreement must cover a 
 period equal to the time over which the undercharge occurred or 
 a different time period that is mutually agreeable to the 
 customer and the utility.  No interest or delinquency fee may be 
 charged under this agreement.  

    Subd. 5.    Medically necessary equipment.  A utility 
 shall reconnect or continue service to a customer's residence 
 where a medical emergency exists or where medical equipment 
 requiring electricity necessary to sustain life is in use, 
 provided that the utility receives from a medical doctor written 
 certification, or initial certification by telephone and written 
 certification within five business days, that failure to 
 reconnect or continue service will impair or threaten the health 
 or safety of a resident of the customer's household.  The 
 customer must enter into a payment agreement. 

    Subd. 6.    Commission authority.  In addition to any 
 other authority, the commission has the authority to resolve 
 customer complaints against a public utility, as defined in 
 section 216B.02, subdivision 4, whether or not the complaint 
 involves a violation of this chapter.  The commission may 
 delegate this authority to commission staff as it deems 
 appropriate. 

    HIST: 2001 c 212 art 4 s 3; 2002 c 379 art 1 s 54 

     216B.10 Accounting. 

    Subdivision 1.    System of accounts.  The commission 
 shall establish a system of accounts to be kept by public 
 utilities subject to its jurisdiction.  A public utility which 
 maintains its accounts in accordance with the system of accounts 
 prescribed by a federal agency or authority shall be deemed to 
 be in compliance with the system of accounts prescribed by the 
 commission.  Where optional accounting is prescribed by a 
 federal agency or authority, the commission may prescribe which 
 option is to be followed.  

    Subd. 2.    Other business of public utility.  Every 
 public utility engaged directly or indirectly in any other 
 business than that of the production, transmission or furnishing 
 of natural gas or electric service shall, if required by the 
 commission, keep and render separately to the commission in like 
 manner and form the accounts of all the other business, in which 
 case all the provisions of Laws 1974, chapter 429 shall apply to 
 the books, accounts, papers and records of the other business.  

    Subd. 3.    Manner and form.  Every public utility is 
 required to keep and render its books, accounts, papers and 
 records accurately and faithfully in the manner and form 
 prescribed by the commission, and to comply with all directions 
 of the commission relating to these books, accounts, papers and 
 records.  

    Subd. 4.    Reports.  The commission may require any 
 public utility to file annual reports in the form and content, 
 having regard for the provisions of this section, as the 
 commission may require, and special reports concerning any 
 matter about which the commission is authorized to inquire or to 
 keep itself informed.  The commission may require the reports to 
 be verified.  The basic financial statements in the annual 
 report of a public utility may, at the direction of the public 
 utilities commission, be examined by an independent certified 
 public accountant and the accountant's opinion thereof included 
 in the annual report filed with the commission.  

    Subd. 5.    Audit.  The commission may require the 
 examination and audit of all accounts, and all items shall be 
 allocated to the accounts in the manner prescribed by the 
 commission. 

    Subd. 6. Repealed, 1981 c 142 s 3 

    HIST: 1974 c 429 s 10; 1980 c 614 s 123; 1986 c 444 

     216B.11 Depreciation rates and practices. 

    The commission shall fix proper and adequate rates and 
 methods of depreciation, amortization, or depletion in respect 
 of utility property, and every public utility shall conform its 
 depreciation, amortization or depletion accounts to the rates 
 and methods fixed by the commission.  

    HIST: 1974 c 429 s 11; 1981 c 142 s 2 

INVESTIGATORY REQUIREMENTS

     216B.12 Right of entrance; inspection. 

    Subdivision 1.    Authority of commission and department. 
  The commissioners and the duly authorized officers and 
 employees of the department, during business hours, may enter 
 upon any premises occupied by any public utility for the purpose 
 of making examinations and tests and to inspect the accounts, 
 books, papers, and documents of any public utility for the 
 purpose of exercising any power provided for in Laws 1974, 
 chapter 429, and may set up and use on the premises any 
 apparatus and appliance necessary therefor.  Such public utility 
 shall have the right to be represented at the making of the 
 examinations, tests, and inspections.  The public utility, its 
 officers and employees, shall facilitate the examinations, 
 tests, and inspections by giving every reasonable aid to the 
 commissioners and any person or persons designated by the 
 department for the duties aforesaid.  

    Subd. 2. Repealed, 1981 c 142 s 3 

    HIST: 1974 c 429 s 12 

     216B.13 Production and examination of records. 

    Subdivision 1.    Authority of commission.  The 
 commission may require, by order served on any public utility in 
 the manner provided herein for the service of orders, the 
 production within this state at a reasonable time and place as 
 the commission may designate, of any books, accounts, papers, or 
 records of the public utility relating to its business or 
 affairs within the state, pertinent to any lawful inquiry and 
 kept by said public utility in any office or place within or 
 without this state, or, at its option, verified or photostatic 
 copies in lieu thereof, so that an examination thereof may be 
 made by the commission or under its direction.  

    Subd. 2. Repealed, 1981 c 142 s 3 

    HIST: 1974 c 429 s 13 

     216B.14 Investigation.  

    The commission upon complaint or upon its own initiative 
 and whenever it may deem it necessary in the performance of its 
 duties may investigate and examine the condition and operation 
 of any public utility or any part thereof.  In conducting the 
 investigations the commission may proceed either with or without 
 a hearing as it may deem best, but it shall make no order 
 without affording the affected parties a hearing.  

    HIST: 1974 c 429 s 14 

RATE HEARINGS

     216B.15 Hearings; examiner.  

    The commission may, in addition to the hearings 
 specifically provided for by Laws 1974, chapter 429, conduct any 
 other hearings as may reasonably be required in the 
 administration of the powers and duties conferred upon it by 
 Laws 1974, chapter 429.  The commission may designate one of its 
 members to act as an examiner for the purpose of holding any 
 hearing which the commission has the power or authority to hold 
 or in the event parties to the hearing so stipulate the 
 commission may designate a qualified commission employee as the 
 examiner.  Reasonable notice of all hearings shall be given the 
 persons interested therein as determined by the commission.  

    HIST: 1974 c 429 s 15 

     216B.16 Rate change; procedure; hearing. 

    Subdivision 1.    Notice.  Unless the commission 
 otherwise orders, no public utility shall change a rate which 
 has been duly established under this chapter, except upon 60 
 days' notice to the commission.  The notice shall include 
 statements of facts, expert opinions, substantiating documents, 
 and exhibits, supporting the change requested, and state the 
 change proposed to be made in the rates then in force and the 
 time when the modified rates will go into effect.  If the filing 
 utility does not have an approved conservation improvement plan 
 on file with the department, it shall also include in its notice 
 an energy conservation plan pursuant to section 216B.241.  The 
 filing utility shall give written notice, as approved by the 
 commission, of the proposed change to the governing body of each 
 municipality and county in the area affected.  All proposed 
 changes shall be shown by filing new schedules or shall be 
 plainly indicated upon schedules on file and in force at the 
 time. 

    Subd. 1a.    Settlement.  (a) When a public utility 
 submits a general rate filing, the Office of Administrative 
 Hearings, before conducting a contested case hearing, shall 
 convene a settlement conference including all of the parties for 
 the purpose of encouraging settlement of any or all of the 
 issues in the contested case.  If a stipulated settlement is not 
 reached before the contested case hearing, the Office of 
 Administrative Hearings may reconvene the settlement conference 
 during or after completion of the contested case hearing at its 
 discretion or a party's request.  The Office of Administrative 
 Hearings or the commission may, upon the request of any party 
 and the public utility, extend the procedural schedule of the 
 contested case in order to permit the parties to engage in 
 settlement discussions.  An extension must be for a definite 
 period of time not to exceed 60 days.  

    (b) If the applicant and all intervening parties agree to a 
 stipulated settlement of the case or parts of the case, the 
 settlement must be submitted to the commission.  The commission 
 shall accept or reject the settlement in its entirety and, at 
 any time until its final order is issued in the case, may 
 require the Office of Administrative Hearings to conduct a 
 contested case hearing.  The commission may accept the 
 settlement on finding that to do so is in the public interest 
 and is supported by substantial evidence.  If the commission 
 does not accept the settlement, it may issue an order modifying 
 the settlement subject to the approval of the parties.  Each 
 party shall have ten days in which to reject the proposed 
 modification.  If no party rejects the proposed modification, 
 the commission's order becomes final.  If the commission rejects 
 the settlement, or a party rejects the commission's proposed 
 modification, a contested case hearing must be completed. 

    Subd. 2.    Suspension of proposed rate; hearing; final 
 determination defined.  (a) Whenever there is filed with the 
 commission a schedule modifying or resulting in a change in any 
 rates then in force as provided in subdivision 1, the commission 
 may suspend the operation of the schedule by filing with the 
 schedule of rates and delivering to the affected utility a 
 statement in writing of its reasons for the suspension at any 
 time before the rates become effective.  The suspension shall 
 not be for a longer period than ten months beyond the initial 
 filing date except as provided in this subdivision or 
 subdivision 1a.  

    (b) During the suspension the commission shall determine 
 whether all questions of the reasonableness of the rates 
 requested raised by persons deemed interested or by the 
 department can be resolved to the satisfaction of the 
 commission.  If the commission finds that all significant issues 
 raised have not been resolved to its satisfaction, or upon 
 petition by ten percent of the affected customers or 250 
 affected customers, whichever is less, it shall refer the matter 
 to the Office of Administrative Hearings with instructions for a 
 public hearing as a contested case pursuant to chapter 14, 
 except as otherwise provided in this section. 

    (c) The commission may order that the issues presented by 
 the proposed rate changes be bifurcated into two separate 
 hearings as follows:  (1) determination of the utility's revenue 
 requirements and (2) determination of the rate design.  Upon 
 issuance of both administrative law judge reports, the issues 
 shall again be joined for consideration and final determination 
 by the commission. 

    (d) All prehearing discovery activities of state agency 
 intervenors shall be consolidated and conducted by the 
 Department of Commerce. 

    (e) If the commission does not make a final determination 
 concerning a schedule of rates within ten months after the 
 initial filing date, the schedule shall be deemed to have been 
 approved by the commission; except if: 

    (1) an extension of the procedural schedule has been 
 granted under subdivision 1a, in which case the schedule of 
 rates is deemed to have been approved by the commission on the 
 last day of the extended period of suspension; or 

    (2) a settlement has been submitted to and rejected by the 
 commission and the commission does not make a final 
 determination concerning the schedule of rates, the schedule of 
 rates is deemed to have been approved 60 days after the initial 
 or, if applicable, the extended period of suspension. 

    (f) If the commission finds that it has insufficient time 
 during the suspension period to make a final determination of a 
 case involving changes in general rates because of the need to 
 make a final determination of another previously filed case 
 involving changes in general rates under this section or section 
 237.075, the commission may extend the suspension period to the 
 extent necessary to allow itself 20 working days to make the 
 final determination after it has made a final determination in 
 the previously filed case.  An extension of the suspension 
 period under this paragraph does not alter the setting of 
 interim rates under subdivision 3. 

    (g) For the purposes of this section, "final determination" 
 means the initial decision of the commission and not any order 
 which may be entered by the commission in response to a petition 
 for rehearing or other further relief.  The commission may 
 further suspend rates until it determines all those petitions. 

    Subd. 3.    Interim rate.  (a) Notwithstanding any order 
 of suspension of a proposed increase in rates, the commission 
 shall order an interim rate schedule into effect not later than 
 60 days after the initial filing date.  The commission shall 
 order the interim rate schedule ex parte without a public 
 hearing.  Notwithstanding the provisions of sections 216.25, 
 216B.27 and 216B.52, no interim rate schedule ordered by the 
 commission pursuant to this subdivision shall be subject to an 
 application for a rehearing or an appeal to a court until the 
 commission has rendered its final determination. 

    (b) Unless the commission finds that exigent circumstances 
 exist, the interim rate schedule shall be calculated using the 
 proposed test year cost of capital, rate base, and expenses, 
 except that it shall include:  (1) a rate of return on common 
 equity for the utility equal to that authorized by the 
 commission in the utility's most recent rate proceeding; (2) 
 rate base or expense items the same in nature and kind as those 
 allowed by a currently effective order of the commission in the 
 utility's most recent rate proceeding; and (3) no change in the 
 existing rate design.  In the case of a utility which has not 
 been subject to a prior commission determination, the commission 
 shall base the interim rate schedule on its most recent 
 determination concerning a similar utility.  

    (c) If, at the time of its final determination, the 
 commission finds that the interim rates are in excess of the 
 rates in the final determination, the commission shall order the 
 utility to refund the excess amount collected under the interim 
 rate schedule, including interest on it which shall be at the 
 rate of interest determined by the commission.  The utility 
 shall commence distribution of the refund to its customers 
 within 120 days of the final order, not subject to rehearing or 
 appeal.  If, at the time of its final determination, the 
 commission finds that the interim rates are less than the rates 
 in the final determination, the commission shall prescribe a 
 method by which the utility will recover the difference in 
 revenues between the date of the final determination and the 
 date the new rate schedules are put into effect.  In addition, 
 when an extension is granted for settlement discussions under 
 subdivision 1a, the commission shall allow the utility to also 
 recover the difference in revenues for a length of time equal to 
 the length of the extension. 

    (d) If the public utility fails to make refunds within the 
 period of time prescribed by the commission, the commission 
 shall sue therefor and may recover on behalf of all persons 
 entitled to a refund.  In addition to the amount of the refund 
 and interest due, the commission shall be entitled to recover 
 reasonable attorney's fees, court costs and estimated cost of 
 administering the distribution of the refund to persons entitled 
 to it.  No suit under this subdivision shall be maintained 
 unless instituted within two years after the end of the period 
 of time prescribed by the commission for repayment of refunds.  

    (e) The commission shall not order an interim rate schedule 
 in a general rate case into effect as provided by this 
 subdivision until at least four months after it has made a final 
 determination concerning any previously filed change of the rate 
 schedule or the change has otherwise become effective under 
 subdivision 2, unless: 

    (1) the commission finds that a four-month delay would 
 unreasonably burden the utility, its customers, or its 
 shareholders and that an earlier imposition of interim rates is 
 therefore necessary; or 

    (2) the utility files a second general rate case at least 
 12 months after it has filed a previous general rate case for 
 which the commission has extended the suspension period under 
 subdivision 2. 

    Subd. 4.    Burden of proof.  The burden of proof to 
 show that the rate change is just and reasonable shall be upon 
 the public utility seeking the change. 

    Subd. 5.    Determination after finding rate unacceptable. 
  If, after the hearing, the commission finds the rates to be 
 unjust or unreasonable or discriminatory, the commission shall 
 determine the rates to be charged or applied by the utility for 
 the service in question and shall fix them by order to be served 
 upon the utility.  The rates shall thereafter be observed until 
 changed, as provided by this chapter.  In no event shall the 
 rates exceed the level of rates requested by the public utility, 
 except that individual rates may be adjusted upward or 
 downward.  Rate design changes shall be prospective from the 
 effective date of the new rate schedules approved by the 
 commission.  

    Subd. 6.    Factors considered, generally.  The 
 commission, in the exercise of its powers under this chapter to 
 determine just and reasonable rates for public utilities, shall 
 give due consideration to the public need for adequate, 
 efficient, and reasonable service and to the need of the public 
 utility for revenue sufficient to enable it to meet the cost of 
 furnishing the service, including adequate provision for 
 depreciation of its utility property used and useful in 
 rendering service to the public, and to earn a fair and 
 reasonable return upon the investment in such property.  In 
 determining the rate base upon which the utility is to be 
 allowed to earn a fair rate of return, the commission shall give 
 due consideration to evidence of the cost of the property when 
 first devoted to public use, to prudent acquisition cost to the 
 public utility less appropriate depreciation on each, to 
 construction work in progress, to offsets in the nature of 
 capital provided by sources other than the investors, and to 
 other expenses of a capital nature.  For purposes of determining 
 rate base, the commission shall consider the original cost of 
 utility property included in the base and shall make no 
 allowance for its estimated current replacement value. 

    Subd. 6a.    Construction work in progress.  To the 
 extent that construction work in progress is included in the 
 rate base, the commission shall determine in its discretion 
 whether and to what extent the income used in determining the 
 actual return on the public utility property shall include an 
 allowance for funds used during construction, considering the 
 following factors: 

    (1) the magnitude of the construction work in progress as a 
 percentage of the net investment rate base; 

    (2) the impact on cash flow and the utility's capital 
 costs; 

    (3) the effect on consumer rates; 

    (4) whether it confers a present benefit upon an 
 identifiable class or classes of customers; and 

    (5) whether it is of a short-term nature or will be 
 imminently useful in the provision of utility service. 

    Subd. 6b.    Energy conservation improvement.  (a) 
 Except as otherwise provided in this subdivision, all 
 investments and expenses of a public utility as defined in 
 section 216B.241, subdivision 1, paragraph (e), incurred in 
 connection with energy conservation improvements shall be 
 recognized and included by the commission in the determination 
 of just and reasonable rates as if the investments and expenses 
 were directly made or incurred by the utility in furnishing 
 utility service. 

    (b) After December 31, 1999, investments and expenses for 
 energy conservation improvements shall not be included by the 
 commission in the determination of just and reasonable electric 
 and gas rates for retail electric and gas service provided to 
 large electric customer facilities that have been exempted by 
 the commissioner of the department pursuant to section 216B.241, 
 subdivision 1a, paragraph (b).  However, no public utility shall 
 be prevented from recovering its investment in energy 
 conservation improvements from all customers that were made on 
 or before December 31, 1999, in compliance with the requirements 
 of section 216B.241.  

    (c) The commission may permit a public utility to file rate 
 schedules providing for annual recovery of the costs of energy 
 conservation improvements.  These rate schedules may be 
 applicable to less than all the customers in a class of retail 
 customers if necessary to reflect the differing minimum spending 
 requirements of section 216B.241, subdivision 1a.  After 
 December 31, 1999, the commission shall allow a public utility, 
 without requiring a general rate filing under this section, to 
 reduce the electric and gas rates applicable to large electric 
 customer facilities that have been exempted by the commissioner 
 of the department pursuant to section 216B.241, subdivision 1a, 
 paragraph (b), by an amount that reflects the elimination of 
 energy conservation improvement investments or expenditures for 
 those facilities required on or before December 31, 1999.  In 
 the event that the commission has set electric or gas rates 
 based on the use of an accounting methodology that results in 
 the cost of conservation improvements being recovered from 
 utility customers over a period of years, the rate reduction may 
 occur in a series of steps to coincide with the recovery of 
 balances due to the utility for conservation improvements made 
 by the utility on or before December 31, 1999.  

    Subd. 6c.    Incentive plan for energy conservation 
 improvement.  (a) The commission may order public utilities to 
 develop and submit for commission approval incentive plans that 
 describe the method of recovery and accounting for utility 
 conservation expenditures and savings.  In developing the 
 incentive plans the commission shall ensure the effective 
 involvement of interested parties. 

    (b) In approving incentive plans, the commission shall 
 consider: 

    (1) whether the plan is likely to increase utility 
 investment in cost-effective energy conservation; 

    (2) whether the plan is compatible with the interest of 
 utility ratepayers and other interested parties; 

    (3) whether the plan links the incentive to the utility's 
 performance in achieving cost-effective conservation; and 

    (4) whether the plan is in conflict with other provisions 
 of this chapter. 

    (c) The commission may set rates to encourage the vigorous 
 and effective implementation of utility conservation programs.  
 The commission may: 

    (1) increase or decrease any otherwise allowed rate of 
 return on net investment based upon the utility's skill, 
 efforts, and success in conserving energy; 

    (2) share between ratepayers and utilities the net savings 
 resulting from energy conservation programs to the extent 
 justified by the utility's skill, efforts, and success in 
 conserving energy; and 

    (3) compensate the utility for earnings lost as a result of 
 its conservation programs. 

    Subd. 6d.    Wind energy; property tax.  An owner of a 
 wind energy conversion facility which is required to pay 
 property taxes under section 272.02, subdivision 22, or a public 
 utility regulated by the Public Utilities Commission which 
 purchases the wind generated electricity may petition the 
 commission to include in any power purchase agreement between 
 the owner of the facility and the public utility the amount of 
 property taxes paid by the owner of the facility.  The Public 
 Utilities Commission shall require the public utility to amend 
 the power purchase agreement to include the property taxes paid 
 by the owner of the facility in the price paid by the utility 
 for wind generated electricity if the commission finds: 

    (1) the owner of the facility has paid the property taxes 
 required by this subdivision; 

    (2) the power purchase agreement between the public utility 
 and the owner does not already require the utility to pay the 
 amount of property taxes the owner has paid under this 
 subdivision; and 

    (3) the commission has approved a rate schedule containing 
 provisions for the automatic adjustment of charges for utility 
 service in direct relation to the charges ordered by the 
 commission under section 272.02, subdivision 22. 

    Subd. 7.    Energy cost adjustment.  Notwithstanding any 
 other provision of this chapter, the commission may permit a 
 public utility to file rate schedules containing provisions for 
 the automatic adjustment of charges for public utility service 
 in direct relation to changes in:  (1) federally regulated 
 wholesale rates for energy delivered through interstate 
 facilities; (2) direct costs for natural gas delivered; or (3) 
 costs for fuel used in generation of electricity or the 
 manufacture of gas. 

    Subd. 7a.    Performance-based gas purchasing adjustment. 
  The commission may permit a public utility to file rate 
 schedules providing for annual adjustments reflecting rewards or 
 penalties provided for in performance-based gas purchasing plans 
 approved by the commission under section 216B.167. 

    Subd. 8.    Advertising expense.  (a) The commission 
 shall disapprove the portion of any rate which makes an 
 allowance directly or indirectly for expenses incurred by a 
 public utility to provide a public advertisement which: 

    (1) is designed to influence or has the effect of 
 influencing public attitudes towards legislation or proposed 
 legislation, or toward a rule, proposed rule, authorization or 
 proposed authorization of the Public Utilities Commission or 
 other agency of government responsible for regulating a public 
 utility; 

    (2) is designed to justify or otherwise support or defend a 
 rate, proposed rate, practice or proposed practice of a public 
 utility; 

    (3) is designed primarily to promote consumption of the 
 services of the utility; 

    (4) is designed primarily to promote good will for the 
 public utility or improve the utility's public image; or 

    (5) is designed to promote the use of nuclear power or to 
 promote a nuclear waste storage facility. 

    (b) The commission may approve a rate which makes an 
 allowance for expenses incurred by a public utility to 
 disseminate information which: 

    (1) is designed to encourage conservation of energy 
 supplies; 

    (2) is designed to promote safety; or 

    (3) is designed to inform and educate customers as to 
 financial services made available to them by the public utility. 

    (c) The commission shall not withhold approval of a rate 
 because it makes an allowance for expenses incurred by the 
 utility to disseminate information about corporate affairs to 
 its owners. 

    Subd. 9.    Charitable contribution.  The commission 
 shall allow as operating expenses only those charitable 
 contributions which the commission deems prudent and which 
 qualify under section 290.21, subdivision 3, clause (b).  Only 
 50 percent of the qualified contributions shall be allowed as 
 operating expenses. 

    Subd. 10.    Intervenor payment.  The commission may 
 order a utility to pay all or a portion of a party's 
 intervention costs not to exceed $20,000 per intervenor in any 
 proceeding when the commission finds that the intervenor has 
 materially assisted the commission's deliberation and the 
 intervenor has insufficient financial resources to afford the 
 costs of intervention.  

    Subd. 11.    Pipeline safety programs.  All costs of a 
 public utility that are necessary to comply with state pipeline 
 safety programs under sections 216D.01 to 216D.07, 299F.56 to 
 299F.64, or 299J.01 to 299J.17 must be recognized and included 
 by the commission in the determination of just and reasonable 
 rates as if the costs were directly incurred by the utility in 
 furnishing utility service. 

    Subd. 12.    Exemption for small gas utility franchise.  
 (a) A municipality may file with the commission a resolution of 
 its governing body requesting exemption from the provisions of 
 this section for a public utility that is under a franchise with 
 the municipality to supply natural, manufactured, or mixed gas 
 and that serves 650 or fewer customers in the municipality as 
 long as the public utility serves no more than a total of 2,000 
 customers.  

    (b) The commission shall grant an exemption from this 
 section for that portion of a public utility's business that is 
 requested by each municipality it serves.  Furthermore, the 
 commission shall also grant the public utility an exemption from 
 this section for any service provided outside of a 
 municipality's border that is considered by the commission to be 
 incidental.  The public utility shall file with the commission 
 and the department all initial and subsequent changes in rates, 
 tariffs, and contracts for service outside the municipality at 
 least 30 days in advance of implementation. 

    (c) However, the commission shall require the utility to 
 adopt the commission's policies and procedures governing 
 disconnection during cold weather.  The utility shall annually 
 submit a copy of its municipally approved rates to the 
 commission. 

    (d) In all cases covered by this subdivision in which an 
 exemption for service outside of a municipality is granted, the 
 commission may initiate an investigation under section 216B.17, 
 on its own motion or upon complaint from a customer. 

    (e) If a municipality files with the commission a 
 resolution of its governing body rescinding the request for 
 exemption, the commission shall regulate the public utility's 
 business in that municipality under this section. 

    Subd. 12a.    Exemption for small electric utility 
 franchise.  (a) An electric utility, operating as such in a 
 bordering state and having fewer than 200 customers in 
 Minnesota, is exempt from this section if the utility: 

    (1) charges Minnesota customers the same rates as those 
 charged to customers in the bordering state; 

    (2) provides 60-day notice to the commission of rate 
 increases for its Minnesota customers; 

    (3) provides individual, written notice of rate increases 
 to its Minnesota customers; 

    (4) provides the commission with schedules of rates and 
 tariffs charged in the bordering state and revenues by class 
 under the former and proposed rates; and 

    (5) maintains an up-to-date tariff book with the department.

    (b) The commission may initiate an investigation under 
 section 216B.17, on its own motion or upon customer complaint 
 with respect to the utility's rates and practices in Minnesota. 

    Subd. 13.    Economic and community development.  The 
 commission may allow a public utility to recover from ratepayers 
 the expenses incurred for economic and community development.  

    Subd. 14.    Low-income electric rate discount.  A 
 public utility shall provide a 50 percent electric rate discount 
 on the first 300 kilowatt hours consumed in a billing period for 
 a low-income residential customer.  For the purposes of this 
 subdivision, "low-income" means a customer who is receiving 
 assistance from the federal low-income home energy assistance 
 program.  For the purposes of this subdivision, "public utility" 
 includes only those public utilities with more than 200,000 
 residential electric service customers.  The commission may 
 issue orders necessary to implement, administer, and recover the 
 discount rate program on a timely basis.  

    Subd. 15.    Low-income programs.  (a) The commission 
 may consider ability to pay as a factor in setting utility rates 
 and may establish programs for low-income residential ratepayers 
 in order to ensure affordable, reliable, and continuous service 
 to low-income utility customers.  

    (b) The purpose of the low-income programs is to lower the 
 percentage of income that low-income households devote to energy 
 bills, to increase customer payments, and to lower the utility 
 costs associated with customer account collection activities.  
 In ordering low-income programs, the commission may require 
 public utilities to file program evaluations, including the 
 coordination of other available low-income bill payment and 
 conservation resources and the effect of the program on: 

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

    (2) service disconnections; and 

    (3) customer payment behavior, utility collection costs, 
 arrearages, and bad debt.  

    Subd. 16.    Performance regulation plan tariffs.  A 
 public utility providing natural gas services that has a 
 performance regulation plan approved pursuant to section 
 216B.1675 shall file tariff provisions incorporating the 
 provisions of that plan.  Changes in the cost recovery of 
 natural gas supplies must not be included within the plan. 

    HIST: 1974 c 429 s 16; 1977 c 359 s 1-6; 1977 c 364 s 5; 1978 
 c 694 s 1; 1980 c 579 s 16; 1980 c 614 s 123; 1980 c 615 s 60; 
 1981 c 357 s 70; 1Sp1981 c 4 art 4 s 15; 1982 c 414 s 1-6; 1982 
 c 424 s 130; 1983 c 179 s 5; 1983 c 247 s 95; 1983 c 289 s 104; 
 1986 c 346 s 1; 1986 c 409 s 6,7; 1987 c 353 s 6; 1988 c 457 s 
 1-3; 1991 c 147 s 1; 1991 c 184 s 1; 1991 c 235 art 1 s 1; art 6 
 s 1; 1993 c 49 s 1; 1993 c 327 s 4-7; 1994 c 483 s 1; 1994 c 641 
 art 4 s 2,3; 1994 c 644 s 2; 1995 c 17 s 2; 1995 c 125 s 1; 1995 
 c 224 s 74,75; 1997 c 25 s 1; 1997 c 231 art 2 s 5; 1999 c 140 s 
 1; 2001 c 212 art 4 s 4; 1Sp2001 c 4 art 6 s 37-40 

*   NOTE:  Subdivision 16, as added by Laws 1997, chapter 25, 
*section 1, is effective August 1, 1997, and expires January 1, 
*2006.  Laws 1997, chapter 25, section 3.

SPECIAL RATES AND PRACTICES

     216B.161 Area development rate plan. 

    Subdivision 1.    Definitions.  (a) For purposes of this 
 section, the following terms have the meanings given them in 
 this subdivision. 

    (b) "Area development rate" means a rate schedule 
 established by a utility that provides customers within an area 
 development zone service under a base utility rate schedule, 
 except that charges may be reduced from the base rate as agreed 
 upon by the utility and the customer consistent with this 
 section. 

    (c) "Area development zone" means a contiguous or 
 noncontiguous area designated by an authority or municipality 
 for development or redevelopment and within which one of the 
 following conditions exists: 

    (1) obsolete buildings not suitable for improvement or 
 conversion or other identified hazards to the health, safety, 
 and general well-being of the community; 

    (2) buildings in need of substantial rehabilitation or in 
 substandard condition; or 

    (3) low values and damaged investments. 

    (d) "Authority" means a rural development financing 
 authority established under sections 469.142 to 469.151; a 
 housing and redevelopment authority established under sections 
 469.001 to 469.047; a port authority established under sections 
 469.048 to 469.068; an economic development authority 
 established under sections 469.090 to 469.108; a redevelopment 
 agency as defined in sections 469.152 to 469.165; the Iron Range 
 Resources and Rehabilitation Board established under section 
 298.22; a municipality that is administering a development 
 district created under sections 469.124 to 469.134 or any 
 special law; a municipality that undertakes a project under 
 sections 469.152 to 469.165, except a town located outside the 
 metropolitan area as defined in section 473.121, subdivision 2, 
 or with a population of 5,000 persons or less; or a municipality 
 that exercises the powers of a port authority under any general 
 or special law.  

    (e) "Municipality" means a city, however organized, and, 
 with respect to a project undertaken under sections 469.152 to 
 469.165, "municipality" has the meaning given in sections 
 469.152 to 469.165, and, with respect to a project undertaken 
 under sections 469.142 to 469.151 or a county or multicounty 
 project undertaken under sections 469.004 to 469.008, also 
 includes any county. 

    Subd. 2.    Area development rate.  The commission may 
 allow gas or electric public utilities to offer area development 
 rates.  The program must be designed to assist industrial 
 revitalization projects located within the service area of the 
 participating utility. 

    Subd. 3.    Terms and conditions of rate.  An area 
 development rate offered under this section must: 

    (1) be offered for a specified length of time to be 
 determined by the commission; 

    (2) be offered as a supplement to other development 
 incentives offered by the authority or municipality in which the 
 rate is available; 

    (3) be available only to new or expanding manufacturing or 
 wholesale trade customers; 

    (4) be designed to recover at least the incremental cost of 
 providing service to the participating customers; 

    (5) be offered in a fixed number of area development zones; 
 and 

    (6) include a provision that the utility provide 
 participating customers with an energy audit and inform those 
 customers of all existing energy conservation programs available 
 from the utility. 

 Recovery of costs under clause (4) must not be from residential 
 customers.  A utility within a general rate case, may seek 
 recovery of the difference in revenue collected under the area 
 development plan rate and what would have been collected under 
 the standard tariff. 

    Subd. 4. Repealed by amendment, 1995 c 9 s 1 

    HIST: 1990 c 370 s 2,7; 1995 c 9 s 1,2; 1996 c 471 art 7 s 2 

     216B.1611 Interconnection of on-site distributed 
  generation. 

    Subdivision 1.    Purpose.  The purpose of this section 
 is to: 

    (1) establish the terms and conditions that govern the 
 interconnection and parallel operation of on-site distributed 
 generation; 

    (2) provide cost savings and reliability benefits to 
 customers; 

    (3) establish technical requirements that will promote the 
 safe and reliable parallel operation of on-site distributed 
 generation resources; 

    (4) enhance both the reliability of electric service and 
 economic efficiency in the production and consumption of 
 electricity; and 

    (5) promote the use of distributed resources in order to 
 provide electric system benefits during periods of capacity 
 constraints. 

    Subd. 2.    Distributed generation; generic proceeding.  
 (a) The commission shall initiate a proceeding within 30 days of 
 July 1, 2001, to establish, by order, generic standards for 
 utility tariffs for the interconnection and parallel operation 
 of distributed generation fueled by natural gas or a renewable 
 fuel, or another similarly clean fuel or combination of fuels of 
 no more than ten megawatts of interconnected capacity.  At a 
 minimum, these tariff standards must:  

    (1) to the extent possible, be consistent with industry and 
 other federal and state operational and safety standards; 

    (2) provide for the low-cost, safe, and standardized 
 interconnection of facilities; 

    (3) take into account differing system requirements and 
 hardware, as well as the overall demand load requirements of 
 individual utilities; 

    (4) allow for reasonable terms and conditions, consistent 
 with the cost and operating characteristics of the various 
 technologies, so that a utility can reasonably be assured of the 
 reliable, safe, and efficient operation of the interconnected 
 equipment; and 

    (5) establish (i) a standard interconnection agreement that 
 sets forth the contractual conditions under which a company and 
 a customer agree that one or more facilities may be 
 interconnected with the company's utility system, and (ii) a 
 standard application for interconnection and parallel operation 
 with the utility system. 

    (b) The commission may develop financial incentives based 
 on a public utility's performance in encouraging residential and 
 small business customers to participate in on-site generation. 

    Subd. 3.    Distributed generation tariff.  Within 90 
 days of the issuance of an order under subdivision 2: 

    (1) each public utility providing electric service at 
 retail shall file a distributed generation tariff consistent 
 with that order, for commission approval or approval with 
 modification; and 

    (2) each municipal utility and cooperative electric 
 association shall adopt a distributed generation tariff that 
 addresses the issues included in the commission's order. 

    Subd. 4.    Reporting requirements.  (a) Each electric 
 utility shall maintain records concerning applications received 
 for interconnection and parallel operation of distributed 
 generation.  The records must include the date each application 
 is received, documents generated in the course of processing 
 each application, correspondence regarding each application, and 
 the final disposition of each application.  

    (b) Every electric utility shall file with the commissioner 
 a distributed generation interconnection report for the 
 preceding calendar year that identifies each distributed 
 generation facility interconnected with the utility's 
 distribution system.  The report must list the new distributed 
 generation facilities interconnected with the system since the 
 previous year's report, any distributed generation facilities no 
 longer interconnected with the utility's system since the 
 previous report, the capacity of each facility, and the feeder 
 or other point on the company's utility system where the 
 facility is connected.  The annual report must also identify all 
 applications for interconnection received during the previous 
 one-year period, and the disposition of the applications. 

    HIST: 2001 c 212 art 3 s 1 

     216B.162 Competitive rate for electric utility. 

    Subdivision 1.    Definitions.  (a) The terms used in 
 this section have the meanings given them in this subdivision. 

    (b) "Effective competition" means a market situation in 
 which an electric utility serves a customer that: 

    (1) is located within the electric utility's assigned 
 service area determined under section 216B.39; and 

    (2) has the ability to obtain its energy requirements from 
 an energy supplier that is not regulated by the commission under 
 section 216B.16. 

    (c) "Competitive rate schedule" means a rate schedule under 
 which an electric utility may set or change the price for its 
 service to an individual customer or group of customers subject 
 to effective competition. 

    (d) "Competitive rate" means the actual rate offered by the 
 utility, and approved by the commission, to a customer subject 
 to effective competition. 

    (e) "Discretionary rate reduction" means a specific 
 reduction to an existing rate, offered voluntarily by the 
 utility to an individual customer or group of customers and 
 approved by the commission in accordance with subdivisions 10 
 and 11. 

    Subd. 2.    Competitive rate schedule permitted.  (a) 
 Notwithstanding section 216B.03, 216B.05, 216B.06, 216B.07, or 
 216B.16, the commission shall approve a competitive rate 
 schedule when: 

    (1) the provision of service to a customer or a class of 
 customers is subject to effective competition; and 

    (2) the schedule applies only to customers requiring 
 electric service with a connected load of at least 2,000 
 kilowatts. 

    (b) The commission may approve a competitive rate schedule 
 that applies to customers subject to effective competition and 
 requiring electric service with a connected load less than 2,000 
 kilowatts. 

    (c) The commission shall make a final determination in a 
 proceeding begun under this section within 90 days of a 
 miscellaneous rate filing by the electric utility. 

    Subd. 3.    Establishing or changing competitive rate 
 schedule.  The commission shall establish or change a 
 competitive rate schedule through a miscellaneous or general 
 rate filing by the utility. 

    Subd. 4.    Rates and terms of competitive rate schedule. 
  When the commission authorizes a competitive rate schedule 
 for a customer class, it shall set the terms and conditions of 
 service for that schedule, which must include: 

    (1) that the minimum rate for the schedule recover at least 
 the incremental cost of providing the service, including the 
 cost of additional capacity that is to be added while the rate 
 is in effect and any applicable on-peak or off-peak 
 differential; 

    (2) that the maximum possible rate reduction under a 
 competitive rate schedule does not exceed the difference between 
 the electric utility's applicable standard tariff and the cost 
 to the customer of the lowest cost competitive energy supply; 

    (3) that the electric utility, within a general rate case, 
 be allowed to seek recovery of the difference between the 
 standard tariff and the competitive rate times the usage level 
 during the test year period; 

    (4) a determination that a rate within a competitive rate 
 schedule meets the conditions of section 216B.03, for other 
 customers in the same customer class; 

    (5) that the rate does not compete with district heating or 
 cooling provided by a district heating utility as defined by 
 section 216B.166, subdivision 2, paragraph (c); and 

    (6) that the rate may not be offered to a customer in which 
 the utility has a financial interest greater than 50 percent. 

    Subd. 5.    Competitive rate offered.  Within its own 
 assigned service territory, the utility, at its discretion and 
 using its best judgment at the time, may offer a competitive 
 rate to a customer subject to effective competition. 

    Subd. 6.    Interim competitive rate.  Notwithstanding 
 section 216B.16, subdivision 3, a proposed competitive rate 
 takes effect on an interim basis after filing the proposed rate 
 with the commission and on the date established by the electric 
 utility.  While an interim competitive rate is in effect, the 
 difference between rates under the competitive rate and rates 
 under the standard tariff for that class are not subject to 
 recovery or refund.  If the commission does not approve the 
 competitive rate, the electric utility may seek to recover the 
 difference in revenues between the interim competitive rate and 
 the standard tariff from the customer that was offered the 
 competitive rate. 

    Subd. 7.    Commission determination.  (a) Except as 
 provided under subdivision 6, competitive rates offered by 
 electric utilities under this section must be filed with the 
 commission and must be approved, modified, or rejected by the 
 commission within 90 days.  The utility's filing must include 
 statements of fact demonstrating that the proposed rates meet 
 the standards of this subdivision.  The filing must be served on 
 the department and the Office of the Attorney General at the 
 same time as it is served on the commission. 

    (b) In reviewing a specific rate proposal, the commission 
 shall determine: 

    (1) that the rate meets the terms and conditions in 
 subdivision 4, unless the commission determines that waiver of 
 one or more terms and conditions would be in the public 
 interest; 

    (2) that the consumer can obtain its energy requirements 
 from an energy supplier not rate-regulated by the commission 
 under section 216B.16; 

    (3) that the customer is not likely to take service from 
 the electric utility seeking to offer the competitive rate if 
 the customer was charged the electric utility's standard 
 tariffed rate; and 

    (4) that after consideration of environmental and 
 socioeconomic impacts it is in the best interest of all other 
 customers to offer the competitive rate to the customer subject 
 to effective competition. 

    (c) If the commission approves the competitive rate, it 
 becomes effective as agreed to by the electric utility and the 
 customer.  If the competitive rate is modified by the 
 commission, the commission shall issue an order modifying the 
 competitive rate subject to the approval of the electric utility 
 and the customer.  Each party has ten days in which to reject 
 the proposed modification.  If no party rejects the proposed 
 modification, the commissioner's order becomes final.  If either 
 party rejects the commission's proposed modification, the 
 electric utility, on its behalf or on the behalf of the 
 customer, may submit to the commission a modified version of the 
 commission's proposal.  The commission shall accept or reject 
 the modified version within 30 days.  If the commission rejects 
 the competitive rate, it shall issue an order indicating the 
 reasons for the rejection. 

    Subd. 8.    Energy efficiency improvement; expense 
 recovery.  If the commission approves a competitive rate or 
 the parties agree to a modified rate, the commission may require 
 the electric utility to provide the customer with an energy 
 audit and assist in implementing cost-effective energy 
 efficiency improvements to assure that the customer's use of 
 electricity is efficient.  An investment in cost-effective 
 energy conservation improvements required under this section 
 must be treated as an energy conservation improvement program 
 and included in the department's determination of significant 
 investments under section 216B.241.  The utility shall recover 
 energy conservation improvement expenses in a rate proceeding 
 under section 216B.16 or 216B.17 in the same manner as the 
 commission authorizes for the recovery of conservation 
 expenditures made under section 216B.241. 

    Subd. 9. Repealed, 1995 c 6 s 2 

    Subd. 10.    Discretionary rate reduction permitted.  
 Notwithstanding sections 216B.03, 216B.06, 216B.07, and 216B.16, 
 a public utility whose rates are regulated under this chapter 
 may, at its discretion, offer a reduced rate for tariffed 
 electric services to eligible customers.  The commission may 
 approve a discretionary rate reduction provided that: 

    (1) the reduction is offered to customers who are located 
 within the exclusive service territory of the public utility 
 that offers discretionary rate reductions or to potential 
 customers who are not customers of a Minnesota electric utility, 
 as defined in section 216B.38, but who propose to be located 
 within the exclusive service territory of the public utility; 

    (2) the reduction applies to customers requiring electric 
 service with a connected load of at least 2,000 kilowatts; 

    (3) the reduced rate recovers at least the incremental cost 
 of providing the service, including the cost of additional 
 capacity that is to be added while the rate is in effect and any 
 applicable on-peak or off-peak differential; 

    (4) in the event the commission has approved unbundled 
 rates, the reduction is not offered for any unbundled service 
 other than generation, unless the unbundled service is available 
 to the customer from a competitive supplier; 

    (5) the reduced rate does not compete with district heating 
 or cooling services provided by a district heating utility as 
 defined by section 216B.166, subdivision 2, paragraph (c); and 

    (6) the reduced rate does not compete with a natural gas 
 service provided by a natural gas utility and regulated by the 
 commission. 

    Subd. 11.    Commission determination.  (a) Proposals 
 for discretionary rate reductions offered by utilities must be 
 filed with the commission, with copies of the filing served upon 
 the department and the office of attorney general at the same 
 time it is served upon the commission.  The commission shall 
 review the proposals according to procedures developed under 
 section 216B.05, subdivision 2a.  The commission shall not 
 approve discretionary rate reductions offered by public 
 utilities that do not have an accepted resource plan on file 
 with the commission.  The commission shall not approve 
 discretionary rate reductions unless the utility has made the 
 customer aware of all cost-effective opportunities for energy 
 efficiency improvements offered by the utility. 

    (b) Public utilities that provide service under 
 discretionary rate reductions shall not, through increased 
 revenue requirements or through prospective rate design changes, 
 recover any revenues foregone due to the discretionary rate 
 reductions, nor shall the commission grant such recovery. 

    HIST: 1990 c 370 s 3,7; 1993 c 190 s 1; 1995 c 6 s 1; 1997 c 
 191 art 1 s 2-5; 1Sp2001 c 4 art 6 s 41,42 

     216B.1621 Electric service agreement. 

    Subdivision 1.    Agreement.  When a retail customer of 
 a public utility proposes to acquire power from or construct a 
 new electric power generation facility in the assigned service 
 area of the utility serving the retail customer to provide all 
 or part of the customer's electric service needs, the public 
 utility may negotiate with and enter into an agreement with the 
 customer to supply electric power to the customer in order to 
 defer construction of the facility until the utility has need of 
 power generated by the proposed facility, if the Public 
 Utilities Commission approves the agreement under subdivision 2. 

    Subd. 2.    Commission approval.  (a) The commission 
 shall approve an agreement under this section upon finding that: 

    (1) the proposed electric service power generation facility 
 could reasonably be expected to qualify for a market value 
 exclusion under section 272.0211; 

    (2) the public utility has a contractual option to purchase 
 electric power from the proposed facility; and 

    (3) the public utility can use the output from the proposed 
 facility to meet its future need for power as demonstrated in 
 the most recent resource plan filed with and approved by the 
 commission under section 216B.2422. 

    (b) Sections 216B.03, 216B.05, 216B.06, 216B.07, 216B.16, 
 216B.162, and 216B.23 do not apply to an agreement under this 
 section. 

    HIST: 1996 c 444 s 1 

     216B.163 Flexible tariff. 

    Subdivision 1.    Definitions.  (a) For the purposes of 
 this section, the terms defined in this subdivision have the 
 meanings given them.  

    (b) "Effective competition" means that a customer of a gas 
 utility who either receives interruptible service or whose daily 
 requirement exceeds 50,000 cubic feet maintains or plans on 
 acquiring the capability to switch to the same, equivalent or 
 substitutable energy supplies or service, except indigenous 
 biomass energy supplies composed of wood products, grain, 
 biowaste, and cellulosic materials, at comparable prices from a 
 supplier not regulated by the commission. 

    (c) "Flexible tariff" means a rate schedule under which a 
 gas utility may set or change the price for its service to an 
 individual customer or group of customers without prior approval 
 of the commission within a range of prices determined by the 
 commission to be just and reasonable. 

    Subd. 2.    Flexible tariff permitted.  Notwithstanding 
 section 216B.03, 216B.05, 216B.06, 216B.07, or 216B.16, the 
 commission may approve a flexible tariff for any class of 
 customers of a gas utility when provision of service, including 
 the sale or transportation of gas, to any customers within the 
 class is subject to effective competition.  Upon application of 
 a gas utility, the commission shall find that effective 
 competition exists for a class of customers taking interruptible 
 service at a level exceeding 199,000 cubic feet per day.  A gas 
 utility may apply a flexible tariff only to a customer that is 
 subject to effective competition and a gas utility may not apply 
 a flexible tariff or otherwise reduce its rates to compete with 
 indigenous biomass energy supplies.  Customers of a gas utility 
 whose only alternative source of energy is gas from a supplier 
 not regulated by the commission and who must use the gas 
 utility's system to transport the gas are not subject to 
 effective competition unless the customers have or can 
 reasonably acquire the capability to bypass the gas utility's 
 system to obtain gas from a supplier not regulated by the 
 commission.  A customer subject to effective competition may 
 elect to take service either under the flexible tariff or under 
 the appropriate nonflexible tariff for that class of service set 
 in accordance with section 216B.03, provided that a customer 
 that uses an alternative energy supply or service from a 
 supplier not regulated by the commission for reasons of price 
 are deemed to have elected to take service under the flexible 
 tariff. 

    Subd. 2a.  MS 1990 Expired 

    Subd. 3.    Establishing or changing flexible tariff.  
 The commission may establish a flexible tariff through a 
 miscellaneous rate filing only if the filing does not seek to 
 recover revenues the utility expects to lose by implementing 
 flexible tariffs from customers who do not take service under 
 the flexible tariff, nor to change another rate.  If a gas 
 utility requests authority to establish a flexible tariff and as 
 part of that request seeks to recover revenues the utility 
 expects to lose by implementing flexible tariffs from customers 
 who do not take service under the flexible tariff or to change 
 other rates, the commission may only establish that flexible 
 tariff within a general rate case for that gas utility.  

    Subd. 4.    Rates and terms of service.  Whenever the 
 commission authorizes a flexible tariff, it shall set the terms, 
 and conditions of service for that tariff, including:  

    (1) the minimum rate for the tariff, which must recover at 
 least the incremental cost of providing the service; 

    (2) the maximum rate for the tariff; and 

    (3) a requirement that a customer who elects to take 
 service under the flexible tariff remain on that tariff for a 
 reasonable period of time.  

 The commission may set the terms and conditions of service for a 
 flexible tariff in a gas utility proceeding, a miscellaneous 
 filing, or a complaint proceeding under section 216B.17.  

    Subd. 5.    Recovery of revenues.  In a general rate 
 case that establishes a flexible tariff for a gas utility, and 
 in each general rate case of a gas utility for which a flexible 
 tariff has been authorized, the commission shall determine a 
 projected level of revenues and expenses from services under 
 that tariff and use the projection to determine the utility's 
 overall rates.  That method used to establish a level of 
 projected revenues may not limit the gas utility's ability or 
 right to set rates for a customer taking service under the 
 flexible tariff. 

    Subd. 6.    Interim flexible tariff.  Notwithstanding 
 section 216B.16, subdivision 3, if a gas utility files with the 
 commission to establish or change a flexible tariff the 
 commission shall permit the proposed flexible tariff to take 
 effect on an interim basis no later than 30 days after filing.  
 If any customers receive an increase in rates during the period 
 that an interim flexible tariff is in effect, the increase is 
 subject to refund as provided in section 216B.16, subdivision 
 3.  The gas utility shall provide ten days' written notice, or 
 other notice as may be established by contract not to exceed 30 
 days, to a customer before implementing an interim rate change 
 for that customer under this section.  

    Subd. 7.    Final determination.  The commission shall 
 make a final determination in a proceeding begun under this 
 section for approval of a flexible tariff, other than a filing 
 made within a general rate case, within 180 days of the filing 
 by the gas utility. 

    Subd. 8.    Study and report.  The department shall 
 review the operation and effects of any rates implemented under 
 this section.  The review must include, at a minimum, an 
 evaluation of the impact of flexible gas rates on alternative 
 energy sources, including indigenous biomass energy, and the 
 impact on the utility and its customers of setting a maximum 
 rate for the tariff.  The department shall submit its report to 
 the legislature by January 1, 1995.  The department shall assess 
 gas utilities that utilize a flexible tariff under this section 
 for the actual cost of conducting the study, not to exceed 
 $5,000.  Each utility utilizing a flexible tariff must be 
 assessed an equal share of the cost.  

    HIST: 1987 c 371 s 1,4; 1990 c 593 s 1,2 

     216B.164 Cogeneration and small power production. 

    Subdivision 1.    Scope and purpose.  This section shall 
 at all times be construed in accordance with its intent to give 
 the maximum possible encouragement to cogeneration and small 
 power production consistent with protection of the ratepayers 
 and the public.  

    Subd. 2.    Applicability.  This section as well as any 
 rules promulgated by the commission to implement this section or 
 the Public Utility Regulatory Policies Act of 1978, Public Law 
 95-617, Statutes at Large, volume 92, page 3117, and the Federal 
 Energy Regulatory Commission regulations thereunder, Code of 
 Federal Regulations, title 18, part 292, shall apply to all 
 Minnesota electric utilities, including cooperative electric 
 associations and municipal electric utilities.  

    Subd. 3.    Purchases; small facilities.  (a) For a 
 qualifying facility having less than 40-kilowatt capacity, the 
 customer shall be billed for the net energy supplied by the 
 utility according to the applicable rate schedule for sales to 
 that class of customer.  In the case of net input into the 
 utility system by a qualifying facility having less than 
 40-kilowatt capacity, compensation to the customer shall be at a 
 per kilowatt hour rate determined under paragraph (b) or (c) of 
 this subdivision.  

    (b) In setting rates, the commission shall consider the 
 fixed distribution costs to the utility not otherwise accounted 
 for in the basic monthly charge and shall ensure that the costs 
 charged to the qualifying facility are not discriminatory in 
 relation to the costs charged to other customers of the utility. 
 The commission shall set the rates for net input into the 
 utility system based on avoided costs as defined in the Code of 
 Federal Regulations, title 18, section 292.101(b)(6), the 
 factors listed in Code of Federal Regulations, title 18, section 
 292.304, and all other relevant factors.  

    (c) Notwithstanding any provision in this chapter to the 
 contrary, a qualifying facility having less than 40-kilowatt 
 capacity may elect that the compensation for net input by the 
 qualifying facility into the utility system shall be at the 
 average retail utility energy rate.  "Average retail utility 
 energy rate" is defined as the average of the retail energy 
 rates, exclusive of special rates based on income, age, or 
 energy conservation, according to the applicable rate schedule 
 of the utility for sales to that class of customer.  

    (d) If the qualifying facility is interconnected with a 
 nongenerating utility which has a sole source contract with a 
 municipal power agency or a generation and transmission utility, 
 the nongenerating utility may elect to treat its purchase of any 
 net input under this subdivision as being made on behalf of its 
 supplier and shall be reimbursed by its supplier for any 
 additional costs incurred in making the purchase.  Qualifying 
 facilities having less than 40-kilowatt capacity may, at the 
 customer's option, elect to be governed by the provisions of 
 subdivision 4.  

    Subd. 4.    Purchases; wheeling; costs.  (a) Except as 
 otherwise provided in paragraph (c), this subdivision shall 
 apply to all qualifying facilities having 40-kilowatt capacity 
 or more as well as qualifying facilities as defined in 
 subdivision 3 which elect to be governed by its provisions.  

    (b) The utility to which the qualifying facility is 
 interconnected shall purchase all energy and capacity made 
 available by the qualifying facility.  The qualifying facility 
 shall be paid the utility's full avoided capacity and energy 
 costs as negotiated by the parties, as set by the commission, or 
 as determined through competitive bidding approved by the 
 commission.  The full avoided capacity and energy costs to be 
 paid a qualifying facility that generates electric power by 
 means of a renewable energy source are the utility's least cost 
 renewable energy facility or the bid of a competing supplier of 
 a least cost renewable energy facility, whichever is lower, 
 unless the commission's resource plan order, under section 
 216B.2422, subdivision 2, provides that the use of a renewable 
 resource to meet the identified capacity need is not in the 
 public interest.  

    (c) For all qualifying facilities having 30-kilowatt 
 capacity or more, the utility shall, at the qualifying 
 facility's or the utility's request, provide wheeling or 
 exchange agreements wherever practicable to sell the qualifying 
 facility's output to any other Minnesota utility having 
 generation expansion anticipated or planned for the ensuing ten 
 years.  The commission shall establish the methods and 
 procedures to insure that except for reasonable wheeling charges 
 and line losses, the qualifying facility receives the full 
 avoided energy and capacity costs of the utility ultimately 
 receiving the output.  

    (d) The commission shall set rates for electricity 
 generated by renewable energy. 

    Subd. 5.    Dispute; resolution.  In the event of 
 disputes between an electric utility and a qualifying facility, 
 either party may request a determination of the issue by the 
 commission.  In any such determination, the burden of proof 
 shall be on the utility.  The commission in its order resolving 
 each such dispute shall require payments to the prevailing party 
 of the prevailing party's costs, disbursements, and reasonable 
 attorneys' fees, except that the qualifying facility will be 
 required to pay the costs, disbursements, and attorneys' fees of 
 the utility only if the commission finds that the claims of the 
 qualifying facility in the dispute have been made in bad faith, 
 or are a sham, or frivolous.  

    Subd. 6.    Rules and uniform contract.  (a) The 
 commission shall promulgate rules to implement the provisions of 
 this section.  The commission shall also establish a uniform 
 statewide form of contract for use between utilities and a 
 qualifying facility having less than 40-kilowatt capacity.  

    (b) The commission shall require the qualifying facility to 
 provide the utility with reasonable access to the premises and 
 equipment of the qualifying facility if the particular 
 configuration of the qualifying facility precludes disconnection 
 or testing of the qualifying facility from the utility side of 
 the interconnection with the utility remaining responsible for 
 its personnel.  

    (c) The uniform statewide form of contract shall be applied 
 to all new and existing interconnections established between a 
 utility and a qualifying facility having less than 40-kilowatt 
 capacity, except that existing contracts may remain in force 
 until written notice of election that the uniform statewide 
 contract form applies is given by either party to the other, 
 with the notice being of the shortest time period permitted 
 under the existing contract for termination of the existing 
 contract by either party, but not less than ten nor longer than 
 30 days.  

    Subd. 7. Repealed, 1994 c 465 art 1 s 27 

    Subd. 8.    Interconnection required; obligation for 
 costs.  (a) Utilities shall be required to interconnect with a 
 qualifying facility that offers to provide available energy or 
 capacity and that satisfies the requirements of this section.  

    (b) Nothing contained in this section shall be construed to 
 excuse the qualifying facility from any obligation for costs of 
 interconnection and wheeling in excess of those normally 
 incurred by the utility for customers with similar load 
 characteristics who are not cogenerators or small power 
 producers, or from any fixed charges normally assessed such 
 nongenerating customers. 

    Subd. 9.    Municipal electric utility.  For purposes of 
 this section only, except subdivisions 5 and 7, and with respect 
 to municipal electric utilities only, the term "commission" 
 means the governing body of each municipal electric utility that 
 adopts and has in effect rules implementing this section which 
 are consistent with the rules adopted by the Minnesota Public 
 Utilities Commission under subdivision 6.  As used in this 
 subdivision, the governing body of a municipal electric utility 
 means the city council of that municipality; except that, if 
 another board, commission, or body is empowered by law or 
 resolution of the city council or by its charter to establish 
 and regulate rates and days for the distribution of electric 
 energy within the service area of the city, that board, 
 commission, or body shall be considered the governing body of 
 the municipal electric utility.  

    HIST: 1981 c 237 s 1; 1983 c 301 s 166-171; 1984 c 640 s 32; 
 1991 c 315 s 1; 1993 c 356 s 1; 1996 c 305 art 2 s 38 

     216B.1645 Power purchase contract or investment. 

    Subdivision 1.    Commission authority.  Upon the 
 petition of a public utility, the Public Utilities Commission 
 shall approve or disapprove power purchase contracts, 
 investments, or expenditures entered into or made by the utility 
 to satisfy the wind and biomass mandates contained in sections 
 216B.169, 216B.2423, and 216B.2424, including reasonable 
 investments and expenditures made to transmit the electricity 
 generated from sources developed under those sections that is 
 ultimately used to provide service to the utility's retail 
 customers, or to develop renewable energy sources from the 
 account required in section 116C.779.  

    Subd. 2.    Cost recovery.  The expenses incurred by the 
 utility over the duration of the approved contract or useful 
 life of the investment and expenditures made pursuant to section 
 116C.779 shall be recoverable from the ratepayers of the 
 utility, to the extent they are not offset by utility revenues 
 attributable to the contracts, investments, or expenditures.  
 Upon petition by a public utility, the commission shall approve 
 or approve as modified a rate schedule providing for the 
 automatic adjustment of charges to recover the expenses or costs 
 approved by the commission, which, in the case of transmission 
 expenditures, are limited to the portion of actual transmission 
 costs that are directly allocable to the need to transmit power 
 from the renewable sources of energy.  The commission may not 
 approve recovery of the costs for that portion of the power 
 generated from sources governed by this section that the utility 
 sells into the wholesale market.  

    Subd. 3.    Applicability to recovery of other costs.  
 Nothing in this section shall be construed to determine the 
 manner or extent to which revenues derived from other generation 
 facilities of the utility may be considered in determining the 
 recovery of the approved cost or expenses associated with the 
 mandated contracts, investments, or expenditures in the event 
 there is retail competition for electric energy. 

    Subd. 4.    Settlement with Mdewakanton Dakota Tribal 
 Council at Prairie Island.  The commission shall approve a 
 rate schedule providing for the automatic adjustment of charges 
 to recover the costs or expenses of a settlement between the 
 public utility that owns the Prairie Island nuclear generation 
 facility and the Mdewakanton Dakota Tribal Council at Prairie 
 Island, resolving outstanding disputes regarding the provisions 
 of Laws 1994, chapter 641, article 1, section 4.  The settlement 
 must provide for annual payments, not to exceed $2,500,000 
 annually, by the public utility to the Prairie Island Indian 
 Community, to be used for, among other purposes, acquiring up to 
 1,500 contiguous or noncontiguous acres of land in Minnesota 
 within 50 miles of the tribal community's reservation at Prairie 
 Island to be taken into trust by the federal government for the 
 benefit of the tribal community for housing and other 
 residential purposes.  The legislature acknowledges that the 
 intent to purchase land by the tribe for relocation purposes is 
 part of the settlement agreement and Laws 2003, First Special 
 Session chapter 11.  However, the state, through the governor, 
 reserves the right to support or oppose any particular 
 application to place land in trust status. 

    HIST: 1997 c 176 s 1; 1998 c 345 s 1; 1999 c 200 s 2; 2001 c 
 212 art 8 s 1; 1Sp2003 c 11 art 1 s 3 

     216B.1646 Rate reduction; property tax reduction. 

    (a) The commission shall, by any method the commission 
 finds appropriate, reduce the rates each electric utility 
 subject to rate regulation by the commission charges its 
 customers to reflect, on an ongoing basis, the amount by which 
 each utility's property tax on the personal property of its 
 electric system from taxes payable in 2001 to taxes payable in 
 2002 is reduced.  The commission must ensure that, to the extent 
 feasible, each dollar of personal property tax reduction 
 allocated to Minnesota consumers retroactive to January 1, 2002, 
 results in a dollar of savings to the utility's customers.  A 
 utility may voluntarily pass on any additional property tax 
 savings allocated in the same manner as approved by the 
 commission under this paragraph. 

    (b) By April 10, 2002, each utility shall submit a filing 
 to the commission containing: 

    (1) certified information regarding the utility's property 
 tax savings allocated to Minnesota retail customers; and 

    (2) a proposed method of passing these savings on to 
 Minnesota retail customers. 

 The utility shall provide the information in clause (1) to the 
 commissioner of revenue at the same time.  The commissioner 
 shall notify the commission within 30 days as to the accuracy of 
 the property tax data submitted by the utility. 

    (c) For purposes of this section, "personal property" means 
 tools, implements, and machinery of the generating plant.  It 
 does not apply to transformers, transmission lines, distribution 
 lines, or any other tools, implements, and machinery that are 
 part of an electric substation, wherever located. 

    HIST: 1Sp2001 c 5 art 3 s 11; 2002 c 377 art 4 s 3; 2002 c 398 
 s 2; 2002 c 400 s 12 

     216B.165 Energy audit. 

    Subdivision 1.    Residential property; fee; treatment of 
 expenses.  A customer who asks a public utility to perform an 
 energy audit of the customer's residence pursuant to United 
 States Code, title 42, section 8211 et seq. shall pay no more 
 than $10 of the administrative and general expenses associated 
 with the audit.  The remainder of the administrative and general 
 expenses of operating a program of energy audits pursuant to 
 United States Code, title 42, section 8211 et seq., including 
 those associated with program audits, list distribution, 
 customer billing services, arranging services and 
 postinstallation inspections shall be treated as current 
 operating expenses of providing utility service and shall be 
 charged to all ratepayers of the public utility in the same 
 manner as other current operating expenses of providing utility 
 service.  

    Subd. 2.    Rental property; energy standards.  All 
 audits performed pursuant to United States Code, title 42, 
 section 8211 et seq. of residences which are required by section 
 216C.27, subdivision 3, to comply with energy efficiency 
 standards shall include a separate list of those improvements to 
 the residence which are required to bring the residence into 
 compliance with section 216C.27, subdivision 3, and a statement 
 describing remedies available to tenants for violations.  

    HIST: 1980 c 579 s 17; 1981 c 356 s 248; 1986 c 444; 1987 c 
 312 art 1 s 10 subd 1 

     216B.166 Cogenerating power plant. 

    Subdivision 1.    Findings.  The legislature finds and 
 declares that significant public benefits may be derived from 
 the cogeneration of electrical and thermal energy and that 
 cogenerated district heating may result in improved utilization 
 and conservation of fuel, the substitution of coal for scarce 
 oil and natural gas, the substitution of domestic fuel for 
 imported fuel, and the establishment of a reliable, 
 competitively priced heat source.  Since the cost of cogenerated 
 thermal energy is dependent upon the method used to allocate 
 costs between the production of electric and thermal energy at a 
 power plant, and because the method of cost allocation can be a 
 significant factor in determining investment in district 
 heating, it is necessary to develop cost allocation methods 
 rapidly.  

    Subd. 2.    Definitions.  For the purpose of this 
 section, the following terms shall have the meanings given.  

    (a) "Cogeneration" means a combined process whereby 
 electrical and thermal energy are simultaneously produced by a 
 public utility power plant.  

    (b) "District heating" means a process whereby thermal 
 energy is distributed within a community for use as a primary 
 heat source.  

    (c) "District heating utility" means any person, 
 corporation, or other legal entity which owns and operates a 
 facility for district heating.  

    Subd. 3.    Cost allocation.  The methods used to 
 allocate or assign costs between electrical and thermal energy 
 produced by cogeneration power plants owned by public utilities 
 shall be consistent with the following principles:  

    (a) The method used shall result in a cost per unit of 
 electricity which is no greater than the cost per unit which 
 would exist if the power plants owned by the public utility had 
 been normally constructed and operated without cogenerating 
 capability. 

    (b) Costs which the public utility incurs for the exclusive 
 benefit of the district heating utility, including but not 
 limited to backup and peaking facilities, shall be assigned to 
 thermal energy produced by cogeneration. 

    (c) The methods and procedures may be different for 
 retrofitted than for new cogeneration power plants. 

    (d) The methods should encourage cogeneration while 
 preventing subsidization by electric consumers so that both 
 heating and electricity consumers are treated fairly and 
 equitably with respect to the costs and benefits of cogeneration.

    HIST: 1981 c 334 s 9 

     216B.167 Performance-based gas purchasing plan. 

    Subdivision 1.    Plan approval; commission findings.  A 
 public utility that furnishes natural gas may petition the 
 commission for approval of a performance-based gas purchasing 
 plan under this section.  The commission may approve a plan if 
 it finds that: 

    (1) the plan provides incentives for the utility to achieve 
 lower natural gas costs than would have been achieved in the 
 absence of the plan, as measured by the benchmarks established 
 in clause (3), by linking financial rewards and penalties to 
 natural gas costs; 

    (2) the potential benefits of the plan apply, at a minimum, 
 to each customer class purchasing firm natural gas service from 
 the utility; 

    (3) the plan establishes one or more benchmarks against 
 which actual natural gas costs will be measured and the 
 benchmarks reflect relevant market conditions and represent 
 reasonable and achievable natural gas costs in Minnesota for the 
 term of the plan; and 

    (4) the plan provides that the utility cannot curtail or 
 interrupt service to any customer class purchasing firm natural 
 gas service during the term of the plan except for causes 
 outside the reasonable control of the utility or causes not 
 directly related to the gas purchasing practices of the utility. 

    Subd. 2.    Sharing mechanism.  A plan must include a 
 mechanism through which the utility shares with its customers 
 the difference between actual natural gas costs and the plan's 
 benchmark costs during the term of the plan.  A plan must 
 provide details of the sharing mechanism and may include an 
 allowed level of costs above and below the benchmark before any 
 sharing is to take place.  The commission must determine an 
 appropriate percentage of the difference between the benchmark 
 and actual natural gas costs to be shared between customers and 
 the utility.  The sharing mechanism shall be implemented 
 annually under section 216B.16, subdivision 7a.  Financial 
 rewards or penalties under the plan shall not be considered in 
 the determination of the utility's revenue requirements in a 
 general rate case pursuant to section 216B.16. 

    Subd. 3.    Reliability of service.  A plan must allow 
 for the imposition of penalties if the standard for reliability 
 of service established in subdivision 1, clause (4), is not met. 

    Subd. 4.    Plan evaluation.  A plan must include an 
 evaluation process and mechanism that is reasonable and capable 
 of supporting a full review of the utility's performance under 
 the plan.  The commission shall evaluate the various customer 
 and utility impacts of a plan based on this evaluation process 
 and mechanism, including the impact on customer bills over time, 
 the impact on utility revenues, and the effectiveness of the 
 plan in meeting the purposes contained in subdivision 1.  The 
 evaluation must occur within a reasonable time following the end 
 of the plan. 

    Subd. 5.    Annual report.  The utility shall provide an 
 annual report to the commission documenting its performance in 
 meeting the requirements of the plan.  Upon review of this 
 report, the commission shall determine and approve rewards or 
 penalties as provided in the plan. 

    Subd. 6.    Adoption.  A plan may be filed and approved 
 within a miscellaneous tariff filing pursuant to section 
 216B.16.  The commission may approve, reject, or modify the plan 
 in a manner which meets the requirements of this section.  An 
 approved plan is effective for a period of not less than two 
 years unless: 

    (1) the plan is withdrawn by the utility within 30 days of 
 a final appealable order approving the plan; or 

    (2) the commission, after notice and hearing, rescinds or 
 amends its order approving the plan. 

    Subd. 7. Repealed, 1999 c 21 s 1 

    Subd. 8. Repealed, 1999 c 21 s 1 

    HIST: 1995 c 17 s 1 

     216B.1675 Performance regulation plan for gas utility 
  service. 

    Subdivision 1.    Purpose.  Performance-based regulation 
 plans for public utilities offering natural gas services are 
 authorized in order to provide quality service at rates that can 
 reasonably and reliably be expected to be lower than rates would 
 be under current regulation and to reduce the cost of 
 regulation.  Performance-based regulation plans are intended to 
 provide the utility with increased earnings for efficient 
 performance and decreased earnings for inefficient performance. 

    Subd. 2.    Petition.  A public utility that furnishes 
 natural gas service may petition and file with the commission 
 for its approval a performance regulation plan pursuant to this 
 section.  The plan applies to the utility's rates for providing 
 natural gas distribution service, excluding the portion of the 
 rates recovering the cost of natural gas supplies.  If adopted, 
 the plan must apply to all of the utility's customers, except 
 that nothing in this section requires the utility to adjust the 
 rates collected from customers receiving service under tariffs 
 authorized by sections 216B.16, subdivision 15, and 216B.163.  A 
 petition may be filed: 

    (1) as part of a general rate filing pursuant to section 
 216B.16, in which case the time provided for the commission to 
 suspend rates and make a final determination shall be extended 
 by two months; or 

    (2) as a miscellaneous tariff filing pursuant to section 
 216B.16, in which case the commission shall, within 120 days of 
 the date of the filing, determine whether the utility's current 
 rates are reasonable based on financial information for the most 
 recent calendar year, amended to reflect appropriate regulatory 
 adjustments.  If the commission cannot resolve all material 
 issues concerning the reasonableness of the utility's current 
 rates to its satisfaction, it shall dismiss the filing.  If the 
 filing is not dismissed, the commission shall issue its decision 
 on the plan within ten months from the date of the filing.  The 
 rates at the beginning of the plan shall be the same as the 
 rates on file with the commission prior to the filing. 

    Subd. 3.    Plan contents.  The commission may approve a 
 performance regulation plan for natural gas distribution 
 services upon finding that the plan: 

    (1) contains a benchmark or measure of gas distribution 
 costs that is a reasonable and reliable predictor of the 
 utility's rates for gas distribution service under 
 cost-of-service regulation; 

    (2) ensures that rates for gas distribution services to 
 customers under the plan will be materially lower than the rates 
 would be under cost-of-service regulation as predicted by the 
 benchmark in clause (1); 

    (3) links the utility's earnings to its performance by 
 permitting higher utility earnings than under cost-of-service 
 regulation only when the utility's performance is more efficient 
 than the benchmark; 

    (4) can be reasonably and reliably expected to offer lower 
 administrative costs than would otherwise be experienced under 
 cost-of-service regulation; 

    (5) contains a reasonable limit on utility earnings; 

    (6) is compatible with the development of increased 
 competition in the natural gas industry; 

    (7) has adequate provisions to prevent the degradation of 
 service quality; and 

    (8) provides for gathering of relevant data and evaluation 
 of the plan's effect on rates, service quality, utility 
 earnings, competition in providing natural gas, and regulatory 
 costs. 

    Subd. 4.    Rate change.  The initial rate adjustment 
 under the plan may not be implemented for a minimum of 18 months 
 following the final determination by the commission on the 
 plan.  The plan shall provide a methodology and procedures for 
 changing rates thereafter not more frequently than on an annual 
 basis.  The commission may allow the utility to change rates to 
 reflect material changes in cost due to compliance with 
 government mandates provided that the cost is one that the 
 commission would otherwise allow to be recovered in rates.  
 Increases or decreases in revenues under the plan shall be 
 applied on an equal percentage basis to each customer class, 
 excluding the portion of the rate recovering the cost of natural 
 gas supplies.  Miscellaneous rate changes may be approved 
 outside the operation of the plan. 

    Subd. 5.    Acceptance of petition for full review.  
 Interested parties have, unless the commission otherwise orders, 
 45 days from the date a petition containing a proposed plan is 
 filed to submit comments on whether the plan, as proposed, 
 addresses each of the requirements of this section sufficiently 
 to merit further consideration.  If the commission does not 
 dismiss the petition proposing a plan as insufficient within 120 
 days from the date of the filing, the petition shall be deemed 
 accepted for filing.  A petition accepted for filing shall not 
 be presumed accepted for final adoption. 

    Subd. 6.    Plan administration.  A plan must require 
 the filing of information needed to administer the plan. 

    Subd. 7.    Notice to customer.  The petitioning utility 
 must provide notice of the proposed plan to its customers and to 
 the governing body of each municipality and county in the area 
 affected, along with a summary description of the plan 
 provisions and a notice of the dates, times, and locations of 
 any public meetings scheduled by the commission. 

    Subd. 8.    Plan review; hearing; discovery.  In 
 reviewing a proposed plan, the commission shall: 

    (1) conduct public meetings that it considers appropriate; 
 and 

    (2) grant discovery, as appropriate. 

    Subd. 9.    Commission findings.  The commission shall 
 issue findings concerning the appropriateness of the proposed 
 plan.  The commission may approve, reject, or modify the plan in 
 a manner which meets the requirements of this section.  An 
 approved or modified plan becomes effective unless the plan is 
 withdrawn by the utility within 30 days of a final appealable 
 order.  If the utility withdraws an approved or modified plan, 
 all of the administrative costs related to the plan that are 
 charged by the commission or the department to the utility may 
 not be recovered from ratepayers in current or subsequent 
 rates.  A utility that withdraws an approved or modified plan 
 may not file another plan under this section for a period of one 
 year following the withdrawal of the plan. 

    Subd. 10.    Plan term; renewal.  The plan shall specify 
 its term, which shall not be less than three years.  Not less 
 than six months before the completion of the term of an approved 
 plan, the commission shall, at the request of the utility, 
 commence a review of the plan to determine whether to renew the 
 plan for an additional term.  The commission may approve, 
 reject, or modify the renewal plan in a manner that meets the 
 requirements of this section.  A plan approved or modified under 
 this subdivision becomes effective unless the plan is withdrawn 
 by the utility within 30 days of a final appealable order. 

    Subd. 11.    Plan termination.  On its own motion or 
 upon the petition of any party other than the utility, the 
 commission may initiate an investigation to determine whether to 
 terminate the plan.  The commission shall issue findings on the 
 investigation within 120 days.  If the commission finds that the 
 plan has failed to meet the requirements of this section and is 
 inconsistent with the public interest, it shall terminate the 
 plan and may order the utility to initiate any proceedings 
 necessary to correct the failure of the plan, including but not 
 limited to, filing a general rate proceeding under section 
 216B.16.  The utility must be allowed at least 120 days after 
 the date of the commission's order to initiate the general rate 
 proceeding. 

    Subd. 12.    Plan evaluation.  A plan must include an 
 evaluation process and mechanism that is reasonable and capable 
 of supporting a full review of the utility's performance under 
 the plan.  The commission shall evaluate the various customer 
 and utility impacts of a plan based on this evaluation process 
 and mechanism, including the impact on customer bills and 
 service quality, over time, the impact on utility revenues, and 
 the effectiveness of the plan in meeting the purposes of this 
 section.  The evaluation must occur within a reasonable time 
 following the end of the plan. 

    Subd. 13.    General evaluation.  The commission shall 
 evaluate the effectiveness of all plans approved under this 
 section and submit its findings to the legislature by January 1, 
 2005. 

    HIST: 1997 c 25 s 2; 1Sp2001 c 4 art 6 s 43 

*   NOTE:  This section, as added by Laws 1997, chapter 25, 
*section 2, is effective August 1, 1997, and expires January 1, 
*2006.  Laws 1997, chapter 25, section 3.

     216B.168 Alternative fuel vehicle. 

    Subdivision 1.    Rate recovery.  If the department 
 determines under section 216C.40 that a policy that would result 
 in the recovery through public utility rates of expenses or 
 investments in the development and market penetration of 
 alternative fuel vehicles is in the public interest and 
 consistent with the Federal Energy Policy Act, United States 
 Code, title 42, section 13235, the department may approve plans 
 of public utilities to make investments and expenditures in 
 alternative fuel vehicles and supporting equipment.  The 
 commission may allow a public utility to recover through its 
 rates the investments and expenses under a plan approved by the 
 department and may allow recovery of any assessment under Laws 
 1993, chapter 254, section 7.  The rate recovery shall provide 
 for the ratable phase-out over a 20-year period at five percent 
 per year of the recovery of those expenses or investments in 
 public utility rates. 

    Subd. 2.    Expiration.  This section expires July 1, 
 2003, except that any plan approved by the commission under 
 subdivision 1 prior to that date may continue until the 
 expiration date of the plan. 

    HIST: 1993 c 254 s 1 

     216B.169 Renewable and high-efficiency energy rate 
  options. 

    Subdivision 1.    Definitions.  For the purposes of this 
 section, the following terms have the meanings given them. 

    (a) "Utility" means a public utility, municipal utility, or 
 cooperative electric association providing electric service at 
 retail to Minnesota consumers. 

    (b) "Renewable energy" has the meaning given in section 
 216B.2422, subdivision 1, paragraph (c). 

    (c) "High-efficiency, low-emissions, distributed generation"
 means a distributed generation facility of no more than ten 
 megawatts of interconnected capacity that is certified by the 
 commissioner under subdivision 3 as a high-efficiency, 
 low-emissions facility. 

    Subd. 2.    Renewable and high-efficiency energy rate 
 options.  (a) Each utility shall offer its customers, and 
 shall advertise the offer at least annually, one or more options 
 that allow a customer to determine that a certain amount of the 
 electricity generated or purchased on behalf of the customer is 
 renewable energy or energy generated by high-efficiency, 
 low-emissions, distributed generation such as fuel cells and 
 microturbines fueled by a renewable fuel. 

    (b) Each public utility shall file an implementation plan 
 within 90 days of July 1, 2001, to implement paragraph (a). 

    (c) Rates charged to customers must be calculated using the 
 utility's cost of acquiring the energy for the customer and must:

    (1) reflect the difference between the cost of generating 
 or purchasing the renewable energy and the cost of generating or 
 purchasing the same amount of nonrenewable energy; and 

    (2) be distributed on a per kilowatt-hour basis among all 
 customers who choose to participate in the program. 

    (d) Implementation of these rate options may reflect a 
 reasonable amount of lead time necessary to arrange acquisition 
 of the energy.  The utility may acquire the energy demanded by 
 customers, in whole or in part, through procuring or generating 
 the renewable energy directly, or through the purchase of 
 credits from a provider that has received certification of 
 eligible power supply pursuant to subdivision 3.  If a utility 
 is not able to arrange an adequate supply of renewable or 
 high-efficiency energy to meet its customers' demand under this 
 section, the utility must file a report with the commission 
 detailing its efforts and reasons for its failure. 

    Subd. 3.    Certification and tradeable credits.  (a) 
 The commissioner shall certify a power supply or supplies as 
 eligible to satisfy customer requirements under this section 
 upon finding: 

    (1) the power supply is renewable energy or energy 
 generated by high-efficiency, low-emissions, distributed 
 generation; and 

    (2) the sales arrangements of energy from the supplies are 
 such that the power supply is only sold once to retail consumers.

    (b) To facilitate compliance with this section, the 
 commission may, by order, establish a program for tradeable 
 credits for eligible power supplies. 

    HIST: 2001 c 212 art 8 s 2 

     216B.1691 Renewable energy objectives. 

    Subdivision 1.    Definitions.  (a) Unless otherwise 
 specified in law, "eligible energy technology" means an energy 
 technology that: 

    (1) generates electricity from the following renewable 
 energy sources:  solar; wind; hydroelectric with a capacity of 
 less than 60 megawatts; hydrogen, provided that after January 1, 
 2010, the hydrogen must be generated from the resources listed 
 in this clause; or biomass, which includes an energy recovery 
 facility used to capture the heat value of mixed municipal solid 
 waste or refuse-derived fuel from mixed municipal solid waste as 
 a primary fuel; and 

    (2) was not mandated by Laws 1994, chapter 641, or by 
 commission order issued pursuant to that chapter prior to August 
 1, 2001. 

    (b) "Electric utility" means a public utility providing 
 electric service, a generation and transmission cooperative 
 electric association, or a municipal power agency. 

    (c) "Total retail electric sales" means the kilowatt-hours 
 of electricity sold in a year by an electric utility to retail 
 customers of the electric utility or to a distribution utility 
 for distribution to the retail customers of the distribution 
 utility. 

    Subd. 2.    Eligible energy objectives.  (a) Each 
 electric utility shall make a good faith effort to generate or 
 procure sufficient electricity generated by an eligible energy 
 technology to provide its retail consumers, or the retail 
 customers of a distribution utility to which the electric 
 utility provides wholesale electric service, so that: 

    (1) commencing in 2005, at least one percent of the 
 electric utility's total retail electric sales is generated by 
 eligible energy technologies; 

    (2) the amount provided under clause (1) is increased by 
 one percent of the utility's total retail electric sales each 
 year until 2015; and 

    (3) ten percent of the electric energy provided to retail 
 customers in Minnesota is generated by eligible energy 
 technologies.  

    (b) Of the eligible energy technology generation required 
 under paragraph (a), clauses (1) and (2), not less than 0.5 
 percent of the energy must be generated by biomass energy 
 technologies, including an energy recovery facility used to 
 capture the heat value of mixed municipal solid waste or 
 refuse-derived fuel from mixed municipal solid waste as a 
 primary fuel, by 2005.  By 2010, one percent of the eligible 
 technology generation required under paragraph (a), clauses (1) 
 and (2), shall be generated by biomass energy technologies.  An 
 energy recovery facility used to capture the heat value of mixed 
 municipal solid waste or refuse-derived fuel from mixed 
 municipal solid waste, with a power sales agreement in effect as 
 of May 29, 2003, that terminates after December 31, 2010, does 
 not qualify as an eligible energy technology unless the 
 agreement provides for rate adjustment in the event the facility 
 qualifies as a renewable energy source. 

    (c) By June 1, 2004, and as needed thereafter, the 
 commission shall issue an order detailing the criteria and 
 standards by which it will measure an electric utility's efforts 
 to meet the renewable energy objectives of this section to 
 determine whether the utility is making the required good faith 
 effort.  In this order, the commission shall include criteria 
 and standards that protect against undesirable impacts on the 
 reliability of the utility's system and economic impacts on the 
 utility's ratepayers and that consider technical feasibility. 

    (d) In its order under paragraph (c), the commission shall 
 provide for a weighted scale of how energy produced by various 
 eligible energy technologies shall count toward a utility's 
 objective.  In establishing this scale, the commission shall 
 consider the attributes of various technologies and fuels, and 
 shall establish a system that grants multiple credits toward the 
 objectives for those technologies and fuels the commission 
 determines is in the public interest to encourage. 

    Subd. 3.    Utility plans filed with commission.  (a) 
 Each electric utility shall report on its plans, activities, and 
 progress with regard to these objectives in its filings under 
 section 216B.2422 or in a separate report submitted to the 
 commission every two years, whichever is more frequent, 
 demonstrating to the commission that the utility is making the 
 required good faith effort.  In its resource plan or a separate 
 report, each electric utility shall provide a description of: 

    (1) the status of the utility's renewable energy mix 
 relative to the good faith objective; 

    (2) efforts taken to meet the objective; 

    (3) any obstacles encountered or anticipated in meeting the 
 objective; and 

    (4) potential solutions to the obstacles. 

    (b) The commissioner shall compile the information provided 
 to the commission under paragraph (a), and report to the chairs 
 of the house of representatives and senate committees with 
 jurisdiction over energy and environment policy issues as to the 
 progress of utilities in the state in increasing the amount of 
 renewable energy provided to retail customers, with any 
 recommendations for regulatory or legislative action, by January 
 15 of each odd-numbered year. 

    Subd. 4.    Renewable energy credits.  (a) To facilitate 
 compliance with this section, the commission, by rule or order, 
 may establish a program for tradable credits for electricity 
 generated by an eligible energy technology.  In doing so, the 
 commission shall implement a system that constrains or limits 
 the cost of credits, taking care to ensure that such a system 
 does not undermine the market for those credits. 

    (b) In lieu of generating or procuring energy directly to 
 satisfy the renewable energy objective of this section, an 
 electric utility may purchase sufficient renewable energy 
 credits, issued pursuant to this subdivision, to meet its 
 objective. 

    (c) Upon the passage of a renewable energy standard, 
 portfolio, or objective in a bordering state that includes a 
 similar definition of eligible energy technology or renewable 
 energy, the commission may facilitate the trading of renewable 
 energy credits between states. 

    Subd. 5.    Technology based on fuel combustion.  (a) 
 Electricity produced by fuel combustion may only count toward a 
 utility's objectives if the generation facility: 

    (1) was constructed in compliance with new source 
 performance standards promulgated under the federal Clean Air 
 Act for a generation facility of that type; or 

    (2) employs the maximum achievable or best available 
 control technology available for a generation facility of that 
 type. 

    (b) An eligible energy technology may blend or co-fire a 
 fuel listed in subdivision 1, paragraph (a), clause (1), with 
 other fuels in the generation facility, but only the percentage 
 of electricity that is attributable to a fuel listed in that 
 clause can be counted toward an electric utility's renewable 
 energy objectives. 

    Subd. 6.    Electric utility that owns nuclear generation 
 facility.  (a) An electric utility that owns a nuclear 
 generation facility, as part of its good faith effort under this 
 subdivision and subdivision 2, shall deploy an additional 300 
 megawatts of nameplate capacity of wind energy conversion 
 systems by 2010, beyond the amount of wind energy capacity to 
 which the utility is required by law or commission order as of 
 May 1, 2003.  At least 100 megawatts of this capacity are to be 
 wind energy conversion systems of two megawatts or less, which 
 shall not be eligible for the production incentive under section 
 216C.41.  To the greatest extent technically feasible and 
 economic, these 300 megawatts of wind energy capacity are to be 
 distributed geographically throughout the state.  The utility 
 may opt to own, construct, and operate up to 100 megawatts of 
 this wind energy capacity, except that the utility may not own, 
 construct, or operate any of the facilities that are under two 
 megawatts of nameplate capacity.  The deployment of the wind 
 energy capacity under this subdivision must be consistent with 
 the outcome of the engineering study required under Laws 2003, 
 First Special Session chapter 11, article 2, section 21. 

    (b) The renewable energy objective set forth in subdivision 
 2 shall be a requirement for the public utility that owns the 
 Prairie Island nuclear generation plant.  The objective is a 
 requirement subject to resource planning and least-cost planning 
 requirements in section 216B.2422, unless implementation of the 
 objective can reasonably be shown to jeopardize the reliability 
 of the electric system.  The least-cost planning analysis must 
 include the costs of ancillary services and other necessary 
 generation and transmission upgrades. 

    (c) Also as part of its good faith effort under this 
 section, the utility that owns a nuclear generation facility is 
 to enter into a power purchase agreement by January 1, 2004, for 
 ten to 20 megawatts of biomass energy and capacity at an 
 all-inclusive price not to exceed $55 per megawatt-hour, for a 
 project described in section 216B.2424, subdivision 5, paragraph 
 (e), clause (2).  The project must be operational and producing 
 energy by June 30, 2005. 

    HIST: 2001 c 212 art 8 s 3; 2002 c 398 s 3; 1Sp2003 c 11 art 2 
 s 3 

     216B.1692 Emissions reduction rider. 

    Subdivision 1.    Qualifying projects.  Projects that 
 may be approved for the emissions reduction-rate rider allowed 
 in this section must: 

    (1) be installed on existing large electric generating 
 power plants, as defined in section 216B.2421, subdivision 2, 
 clause (1), that are located in the state and that are currently 
 not subject to emissions limitations for new power plants under 
 the federal Clean Air Act; 

    (2) not increase the capacity of the existing electric 
 generating power plant more than ten percent or more than 100 
 megawatts, whichever is greater; and 

    (3) result in the existing plant either: 

    (i) complying with applicable new source review standards 
 under the federal Clean Air Act; or 

    (ii) emitting air contaminants at levels substantially 
 lower than allowed for new facilities by the applicable new 
 source performance standards under the federal Clean Air Act; or 

    (iii) reducing emissions from current levels at a unit to 
 the lowest cost-effective level when, due to the age or 
 condition of the generating unit, the public utility 
 demonstrates that it would not be cost effective to reduce 
 emissions to the levels in item (i) or (ii). 

    Subd. 2.    Proposal submission.  A public utility that 
 intends to submit a proposal for an emissions reduction rider 
 under this section must submit to the commission, the 
 department, the Pollution Control Agency, and interested parties 
 its plans for emissions reduction projects at its generating 
 facilities.  This submission must be made at least 60 days in 
 advance of a petition for a rider and shall include: 

    (1) the priority order of emissions reduction projects the 
 utility plans to pursue at its generating facilities; 

    (2) the planned schedule for implementation; 

    (3) the analysis and considerations relied on by the public 
 utility to develop that priority ranking; 

    (4) the alternative emissions reduction projects 
 considered, including but not limited to applications of the 
 best available control technology and repowering with natural 
 gas, and reasons for not pursuing them; 

    (5) the emissions reductions expected to be achieved by the 
 projects and their relation to applicable standards for new 
 facilities under the federal Clean Air Act; and 

    (6) the general rationale and conclusions of the public 
 utility in determining the priority ranking. 

    Subd. 3.    Filing petition to recover project costs.  
 (a) A public utility may petition the commission for approval of 
 an emissions reduction rider to recover the costs of a 
 qualifying emissions reduction project outside of a general rate 
 case proceeding under section 216B.16.  In its filing, the 
 public utility shall provide: 

    (1) a description of the planned emissions reduction 
 project; 

    (2) the activities involved in the project; 

    (3) a schedule for implementation; 

    (4) any analysis provided to the Pollution Control Agency 
 regarding the project; 

    (5) an assessment of alternatives to the project, including 
 costs, environmental impact, and operational issues; 

    (6) the proposed method of cost recovery; 

    (7) any proposed recovery above cost; and 

    (8) the projected emissions reductions from the project.  

    (b) Nothing in this section precludes a public utility or 
 interested party from seeking commission guidelines for 
 emissions reduction rider filings; however, commission 
 guidelines are not required as a prerequisite to a public 
 utility-initiated filing. 

    Subd. 4.    Environmental assessment.  The Pollution 
 Control Agency shall evaluate the public utility's emissions 
 reduction project filing and provide the commission with:  

    (1) verification that the emissions reduction project 
 qualifies under subdivision 1; 

    (2) a description of the projected environmental benefits 
 of the proposed project; and 

    (3) its assessment of the appropriateness of the proposed 
 project. 

    Subd. 5.    Proposal approval.  (a) After receiving the 
 Pollution Control Agency's environmental assessment, the 
 commission shall allow opportunity for written and oral comment 
 on the proposed emissions reduction rate rider proposal.  The 
 commission must assess the costs of an emissions reduction 
 project on a stand-alone basis and may approve, modify, or 
 reject the proposed emissions reduction rider.  In making its 
 determination, the commission shall consider whether the 
 project, proposed cost recovery, and any proposed recovery above 
 cost appropriately achieves environmental benefits without 
 unreasonable consumer costs.  

    (b) The commission may approve a rider that: 

    (1) allows the utility to recover costs of qualifying 
 emissions reduction projects net of revenues attributable to the 
 project; 

    (2) allows an appropriate return on investment associated 
 with qualifying emissions reduction projects at the level 
 established in the public utility's last general rate case; 

    (3) allocates project costs appropriately between wholesale 
 and retail customers; 

    (4) provides a mechanism for recovery above cost, if 
 necessary to improve the overall economics of the qualifying 
 projects to ensure implementation; 

    (5) recovers costs from retail customer classes in 
 proportion to class energy consumption; and 

    (6) terminates recovery once the costs of qualifying 
 projects have been fully recovered. 

    (c) The commission must not approve an emissions reduction 
 project and its associated rate rider if: 

    (1) the emissions reduction project is needed to comply 
 with new state or federal air quality standards; or 

    (2) the emissions reduction project is required as a 
 corrective action as part of any state or federal enforcement 
 action. 

    (d) The commission may not include any costs of a proposed 
 project in the emissions reduction rider that are not directly 
 allocable to reduction of emissions. 

    Subd. 6.    Implementation.  Within 60 days of a final 
 commission order, the public utility shall notify the commission 
 and the Pollution Control Agency whether it will proceed with 
 the project.  Nothing in this section commits a public utility 
 to implementing a proposed emissions reduction project if the 
 proposed project or terms of the emissions reduction rider have 
 been either modified or rejected by the commission.  A public 
 utility implementing a project under this section will not be 
 required for a period of eight years after installation to 
 undertake additional investments to comply with a new state 
 requirement regarding pollutants addressed by the project at the 
 project generating facility.  This section does not affect 
 requirements of federal law.  The term of the rider shall extend 
 for the period approved by the commission regardless of any 
 subsequent state or federal requirement affecting any pollutant 
 addressed by the approved emissions reduction project and 
 regardless of the sunset date in subdivision 8. 

    Subd. 7.    Evaluation and report.  By January 15, 2005, 
 the commission, in consultation with the commissioner of 
 commerce and commissioner of the Pollution Control Agency, shall 
 report to the legislature: 

    (1) the number of participating public utilities and 
 qualifying projects proposed and approved under this section; 

    (2) the total cost of each project and any associated 
 incentives; 

    (3) the reduction in air emissions achieved; 

    (4) rate impacts of the cost recovery mechanisms; and 

    (5) an assessment of the effectiveness of the cost recovery 
 mechanism in accomplishing power plant emissions reductions in 
 excess of those required by law. 

    Subd. 8.    Sunset.  This section is effective until 
 June 30, 2006. 

    HIST: 1Sp2001 c 5 art 3 s 12 

     216B.1693 Clean energy technology. 

    (a) If the commission finds that a clean energy technology 
 is or is likely to be a least-cost resource, including the costs 
 of ancillary services and other generation and transmission 
 upgrades necessary, the utility that owns a nuclear generating 
 facility shall supply at least two percent of the electric 
 energy provided to retail customers from clean energy technology.

    (b) Electric energy required by this section shall be 
 supplied by the innovative energy project defined in section 
 216B.1694, subdivision 1, unless the commission finds doing so 
 contrary to the public interest.  

    (c) For purposes of this section, "clean energy technology" 
 means a technology utilizing coal as a primary fuel in a highly 
 efficient combined-cycle configuration with significantly 
 reduced sulfur dioxide, nitrogen oxide, particulate, and mercury 
 emissions from those of traditional technologies. 

    (d) This section expires January 1, 2012. 

    HIST: 1Sp2003 c 11 art 2 s 4 

     216B.1694 Innovative energy project. 

    Subdivision 1.    Definition.  For the purposes of this 
 section, the term "innovative energy project" means a proposed 
 energy-generation facility or group of facilities which may be 
 located on up to three sites: 

    (1) that makes use of an innovative generation technology 
 utilizing coal as a primary fuel in a highly efficient 
 combined-cycle configuration with significantly reduced sulfur 
 dioxide, nitrogen oxide, particulate, and mercury emissions from 
 those of traditional technologies; 

    (2) that the project developer or owner certifies is a 
 project capable of offering a long-term supply contract at a 
 hedged, predictable cost; and 

    (3) that is designated by the commissioner of the Iron 
 Range Resources and Rehabilitation Board as a project that is 
 located in the taconite tax relief area on a site that has 
 substantial real property with adequate infrastructure to 
 support new or expanded development and that has received prior 
 financial and other support from the board.  

    Subd. 2.    Regulatory incentives.  (a) An innovative 
 energy project: 

    (1) is exempted from the requirements for a certificate of 
 need under section 216B.243, for the generation facilities, and 
 transmission infrastructure associated with the generation 
 facilities, but is subject to all applicable environmental 
 review and permitting procedures of sections 116C.51 to 116C.69; 

    (2) once permitted and constructed, is eligible to increase 
 the capacity of the associated transmission facilities without 
 additional state review upon filing notice with the commission; 

    (3) has the power of eminent domain, which shall be limited 
 to the sites and routes approved by the Environmental Quality 
 Board for the project facilities.  The project shall be 
 considered a utility as defined in section 116C.52, subdivision 
 10, for the limited purpose of section 116C.63.  The project 
 shall report any intent to exercise eminent domain authority to 
 the board; 

    (4) shall qualify as a "clean energy technology" as defined 
 in section 216B.1693; 

    (5) shall, prior to the approval by the commission of any 
 arrangement to build or expand a fossil-fuel-fired generation 
 facility, or to enter into an agreement to purchase capacity or 
 energy from such a facility for a term exceeding five years, be 
 considered as a supply option for the generation facility, and 
 the commission shall ensure such consideration and take any 
 action with respect to such supply proposal that it deems to be 
 in the best interest of ratepayers; 

    (6) shall make a good faith effort to secure funding from 
 the United States Department of Energy and the United States 
 Department of Agriculture to conduct a demonstration project at 
 the facility for either geologic or terrestrial carbon 
 sequestration projects to achieve reductions in facility 
 emissions or carbon dioxide; 

    (7) shall be entitled to enter into a contract with a 
 public utility that owns a nuclear generation facility in the 
 state to provide 450 megawatts of baseload capacity and energy 
 under a long-term contract, subject to the approval of the terms 
 and conditions of the contract by the commission.  The 
 commission may approve, disapprove, amend, or modify the 
 contract in making its public interest determination, taking 
 into consideration the project's economic development benefits 
 to the state; the use of abundant domestic fuel sources; the 
 stability of the price of the output from the project; the 
 project's potential to contribute to a transition to hydrogen as 
 a fuel resource; and the emission reductions achieved compared 
 to other solid fuel baseload technologies; and 

    (8) shall be eligible for a grant from the renewable 
 development account, subject to the approval of the entity 
 administering that account, of $2,000,000 a year for five years 
 for development and engineering costs, including those costs 
 related to mercury-removal technology; thermal efficiency 
 optimization and emission minimization; environmental impact 
 statement preparation and licensing; development of hydrogen 
 production capabilities; and fuel cell development and 
 utilization. 

    (b) This subdivision does not apply to nor affect a 
 proposal to add utility-owned resources that is pending on May 
 29, 2003, before the Public Utilities Commission or to 
 competitive bid solicitations to provide capacity or energy that 
 is scheduled to be on line by December 31, 2006. 

    HIST: 1Sp2003 c 11 art 4 s 1 

COMPLAINTS AND HEARINGS

     216B.17 Complaint investigation and hearing. 

    Subdivision 1.    Investigation.  On its own motion or 
 upon a complaint made against any public utility, by the 
 governing body of any political subdivision, by another public 
 utility, by the department, or by any 50 consumers of the 
 particular utility that any of the rates, tolls, tariffs, 
 charges, or schedules or any joint rate or any regulation, 
 measurement, practice, act or omission affecting or relating to 
 the production, transmission, delivery or furnishing of natural 
 gas or electricity or any service in connection therewith is in 
 any respect unreasonable, insufficient or unjustly 
 discriminatory, or that any service is inadequate or cannot be 
 obtained, the commission shall proceed, with notice, to make 
 such investigation as it may deem necessary.  The commission may 
 dismiss any complaint without a hearing if in its opinion a 
 hearing is not in the public interest. 

    Subd. 2.    Notice of complaint.  The commission shall, 
 prior to any formal hearing, notify the public utility 
 complained of that a complaint has been made, and ten days after 
 the notice has been given the commission may proceed to set a 
 time and place for a hearing and an investigation as provided in 
 this section. 

    Subd. 3.    Notice of hearing.  The commission shall 
 give the public utility and the complainant ten days' notice of 
 the time and place when and where the hearing will be held and 
 the matters to be considered and determined.  Both the public 
 utility and complainant are entitled to be heard and to be 
 represented by counsel.  A hearing under this section is not a 
 contested case under chapter 14. 

    Subd. 4.    Notice to local governments and interested 
 persons.  Notice shall also be given to the governing bodies 
 of affected municipalities and counties, and to any other 
 persons the commission shall deem necessary. 

    Subd. 5.    Combined notice.  The notice provided for in 
 subdivisions 2 and 3 may be combined but if combined the notice 
 shall not be less than ten days. 

    Subd. 6.    Complaint petition.  The commission shall 
 have the power to hear, determine and adjust complaints made 
 against any municipally owned gas or electric utility with 
 respect to rates and services upon petition of ten percent of 
 the nonresident consumers of the municipally owned utility or 25 
 such nonresident consumers whichever is less.  The hearing of 
 the complaints shall be governed by this section. 

    Subd. 6a.    Cooperative electric associations.  For the 
 purposes of this section, public utility shall include 
 cooperative electric associations with respect to service 
 standards and practices only. 

    Subd. 7.    Evidence.  Section 14.60 shall be applicable 
 to all contested cases before the commission. 

    Subd. 8.    Further action by commission.  If after 
 making an investigation under subdivision 1 and holding a 
 hearing under this section, the commission finds that all 
 significant factual issues raised have not been resolved to its 
 satisfaction: 

    (1) for investigations concerning the reasonableness of 
 rates of a public utility, if the commission is unable to 
 resolve the complaint with the utility, the commission may order 
 the utility to initiate a rate proceeding under section 216B.16, 
 provided, however, that the utility must be allowed at least 120 
 days after the date of the commission's order to initiate the 
 proceeding; and 

    (2) for investigations of other matters, the commission 
 shall order that a contested case proceeding be conducted under 
 chapter 14. 

    HIST: 1974 c 429 s 17; 1978 c 795 s 4; 1980 c 614 s 113; 1982 
 c 424 s 130; 1990 c 370 s 4-6 

     216B.18 Service of notice.  

    Service of notice of all hearings, investigations and 
 proceedings pending before the commission and of complaints, 
 reports, orders and other documents shall be made personally or 
 by mail as the commission may direct.  

    HIST: 1974 c 429 s 18 

     216B.19 Joint hearing and investigation. 

    In the discharge of its duties under Laws 1974, chapter 
 429, the commission or the department may cooperate with similar 
 commissions of other states and any federal agency and may hold 
 joint hearings and make joint investigations with other 
 commissions. 

    HIST: 1974 c 429 s 19; 1980 c 614 s 114 

     216B.20 Separate rate hearing.  

    The commission may, in its discretion, when complaint is 
 made of more than one rate or charge, order separate hearings 
 thereon, and may consider and determine the several matters 
 complained of separately and at times it may prescribe.  

    HIST: 1974 c 429 s 20 

     216B.21 Summary investigation.  

    Subdivision 1.    Authority.  Whenever the commission 
 has reason to believe that any rate or charge may be 
 unreasonable or unjustly discriminatory or that any service is 
 inadequate or cannot be obtained or that an investigation of any 
 matter relating to any public utility should for any reason be 
 made, it may on its own motion summarily investigate the same 
 with or without notice.  

    Subd. 2.    Formal hearing.  If, after making the 
 summary investigation, the commission becomes satisfied that 
 sufficient grounds exist to warrant a formal hearing being 
 ordered as to the matters investigated, it shall set a time and 
 place for a hearing.  

    Subd. 3.    Notice.  Notice of the time and place for 
 the hearing shall be made as provided in sections 216B.17 and 
 216B.18.  

    HIST: 1974 c 429 s 21 

     216B.22 Municipality; amicus curiae authority.  

    Any municipality that regulates and controls the exercise 
 of a public utility franchise by reason of its home rule charter 
 on January 1, 1975, is authorized to assist the Public Utilities 
 Commission as amicus curiae in any proceeding brought before the 
 commission with respect to the rates, fares, prices, regulation 
 or control of any utility operating therein.  

    HIST: 1974 c 429 s 22; 1980 c 614 s 123 

     216B.23 Lawful rate; reasonable service.  

    Subdivision 1.    Determination as to rate; order.  
 Whenever upon an investigation made under the provisions of Laws 
 1974, chapter 429, the commission shall find rates, tolls, 
 charges, schedules or joint rates to be unjust, unreasonable, 
 insufficient or unjustly discriminatory or preferential or 
 otherwise unreasonable or unlawful, the commission shall 
 determine and by order fix reasonable rates, tolls, charges, 
 schedules or joint rates to be imposed, observed and followed in 
 the future in lieu of those found to be unreasonable or unlawful.

    Subd. 2.    Finding as to service; order.  Whenever the 
 commission shall find any regulations, measurements, practices, 
 acts or service to be unjust, unreasonable, insufficient, 
 preferential, unjustly discriminatory or otherwise unreasonable 
 or unlawful, or shall find that any service which can be 
 reasonably demanded cannot be obtained, the commission shall 
 determine and by order fix reasonable measurements, regulations, 
 acts, practices or service to be furnished, imposed, observed 
 and followed in the future in lieu of those found to be 
 unreasonable, inadequate or otherwise unlawful, and shall make 
 any other order respecting the measurement, regulation, act, 
 practice or service as shall be just and reasonable.  

    Subd. 3.    Copy of order served; notice.  A copy of the 
 order shall be served upon the person against whom it runs or 
 the person's attorney, and notice thereof shall be given to the 
 other parties to the proceedings or their attorneys.  

    HIST: 1974 c 429 s 23; 1986 c 444 

ENERGY CONSERVATION; UTILITY CONSTRUCTION

     216B.24 Construction of major facility; filing plans. 

    Subdivision 1.    Major utility facility defined.  The 
 words "major utility facility" means:  (1) electric generating 
 plant and associated facilities designed for, or capable of, 
 operation at a capacity of 50 megawatts or more; (2) an electric 
 transmission line and associated facilities of a design capacity 
 of 125 kilovolts or more; and (3) a gas transmission line and 
 associated facilities designed for, or capable of, transporting 
 gas at pressures in excess of 125 pounds per square inch; 
 provided, however, that the words "major utility facility" shall 
 not include electric or gas distribution lines and gas gathering 
 lines and associated facilities as defined by the commission.  

    Subd. 2.    Construction plan filed; rules.  Under rules 
 as the commission may prescribe, every public utility shall file 
 with the commission, within the time and in the form as the 
 commission may designate, plans showing any contemplated 
 construction of major utility facilities.  

    Subd. 3.    Applicability to municipalities.  The 
 provisions of this section shall apply to the construction of 
 major utility facilities by a municipally owned gas or electric 
 utility.  

    HIST: 1974 c 429 s 24; 1985 c 248 s 70 

     216B.241 Energy conservation improvement. 

    Subdivision 1.    Definitions.  For purposes of this 
 section and section 216B.16, subdivision 6b, the terms defined 
 in this subdivision have the meanings given them.  

    (a) "Commission" means the Public Utilities Commission. 

    (b) "Commissioner" means the commissioner of commerce. 

    (c) "Customer facility" means all buildings, structures, 
 equipment, and installations at a single site. 

    (d) "Department" means the Department of Commerce. 

    (e) "Energy conservation" means demand-side management of 
 energy supplies resulting in a net reduction in energy use.  
 Load management that reduces overall energy use is energy 
 conservation. 

    (f) "Energy conservation improvement" means a project that 
 results in energy conservation.  

    (g) "Investments and expenses of a public utility" includes 
 the investments and expenses incurred by a public utility in 
 connection with an energy conservation improvement, including 
 but not limited to:  

    (1) the differential in interest cost between the market 
 rate and the rate charged on a no-interest or below-market 
 interest loan made by a public utility to a customer for the 
 purchase or installation of an energy conservation improvement; 

    (2) the difference between the utility's cost of purchase 
 or installation of energy conservation improvements and any 
 price charged by a public utility to a customer for such 
 improvements.  

    (h) "Large electric customer facility" means a customer 
 facility that imposes a peak electrical demand on an electric 
 utility's system of not less than 20,000 kilowatts, measured in 
 the same way as the utility that serves the customer facility 
 measures electrical demand for billing purposes, and for which 
 electric services are provided at retail on a single bill by a 
 utility operating in the state. 

    (i) "Load management" means an activity, service, or 
 technology to change the timing or the efficiency of a 
 customer's use of energy that allows a utility or a customer to 
 respond to wholesale market fluctuations or to reduce the 
 overall demand for energy or capacity.  

    Subd. 1a.    Investment, expenditure, and contribution; 
 public utility.  (a) For purposes of this subdivision and 
 subdivision 2, "public utility" has the meaning given it in 
 section 216B.02, subdivision 4.  Each public utility shall spend 
 and invest for energy conservation improvements under this 
 subdivision and subdivision 2 the following amounts: 

    (1) for a utility that furnishes gas service, 0.5 percent 
 of its gross operating revenues from service provided in the 
 state; 

    (2) for a utility that furnishes electric service, 1.5 
 percent of its gross operating revenues from service provided in 
 the state; and 

    (3) for a utility that furnishes electric service and that 
 operates a nuclear-powered electric generating plant within the 
 state, two percent of its gross operating revenues from service 
 provided in the state. 

    For purposes of this paragraph (a), "gross operating 
 revenues" do not include revenues from large electric customer 
 facilities exempted by the commissioner under paragraph (b). 

    (b) The owner of a large electric customer facility may 
 petition the commissioner to exempt both electric and gas 
 utilities serving the large energy customer facility from the 
 investment and expenditure requirements of paragraph (a) with 
 respect to retail revenues attributable to the facility.  At a 
 minimum, the petition must be supported by evidence relating to 
 competitive or economic pressures on the customer and a showing 
 by the customer of reasonable efforts to identify, evaluate, and 
 implement cost-effective conservation improvements at the 
 facility.  If a petition is filed on or before October 1 of any 
 year, the order of the commissioner to exempt revenues 
 attributable to the facility can be effective no earlier than 
 January 1 of the following year.  The commissioner shall not 
 grant an exemption if the commissioner determines that granting 
 the exemption is contrary to the public interest.  The 
 commissioner may, after investigation, rescind any exemption 
 granted under this paragraph upon a determination that 
 cost-effective energy conservation improvements are available at 
 the large electric customer facility.  For the purposes of this 
 paragraph, "cost-effective" means that the projected total cost 
 of the energy conservation improvement at the large electric 
 customer facility is less than the projected present value of 
 the energy and demand savings resulting from the energy 
 conservation improvement.  For the purposes of investigations by 
 the commissioner under this paragraph, the owner of any large 
 electric customer facility shall, upon request, provide the 
 commissioner with updated information comparable to that 
 originally supplied in or with the owner's original petition 
 under this paragraph. 

    (c) The commissioner may require investments or spending 
 greater than the amounts required under this subdivision for a 
 public utility whose most recent advance forecast required under 
 section 216B.2422 or 216C.17 projects a peak demand deficit of 
 100 megawatts or greater within five years under midrange 
 forecast assumptions.  

    (d) A public utility or owner of a large electric customer 
 facility may appeal a decision of the commissioner under 
 paragraph (b) or (c) to the commission under subdivision 2.  In 
 reviewing a decision of the commissioner under paragraph (b) or 
 (c), the commission shall rescind the decision if it finds that 
 the required investments or spending will: 

    (1) not result in cost-effective energy conservation 
 improvements; or 

    (2) otherwise not be in the public interest. 

    (e) Each utility shall determine what portion of the amount 
 it sets aside for conservation improvement will be used for 
 conservation improvements under subdivision 2 and what portion 
 it will contribute to the energy and conservation account 
 established in subdivision 2a.  A public utility may propose to 
 the commissioner to designate that all or a portion of funds 
 contributed to the account established in subdivision 2a be used 
 for research and development projects that can best be 
 implemented on a statewide basis.  Contributions must be 
 remitted to the commissioner by February 1 of each year.  
 Nothing in this subdivision prohibits a public utility from 
 spending or investing for energy conservation improvement more 
 than required in this subdivision. 

    Subd. 1b.    Conservation improvement by cooperative 
 association or municipality.  (a) This subdivision applies to: 

    (1) a cooperative electric association that provides retail 
 service to its members; 

    (2) a municipality that provides electric service to retail 
 customers; and 

    (3) a municipality with gross operating revenues in excess 
 of $5,000,000 from sales of natural gas to retail customers.  

    (b) Each cooperative electric association and municipality 
 subject to this subdivision shall spend and invest for energy 
 conservation improvements under this subdivision the following 
 amounts: 

    (1) for a municipality, 0.5 percent of its gross operating 
 revenues from the sale of gas and 1.5 percent of its gross 
 operating revenues from the sale of electricity, excluding gross 
 operating revenues from electric and gas service provided in the 
 state to large electric customer facilities; and 

    (2) for a cooperative electric association, 1.5 percent of 
 its gross operating revenues from service provided in the state, 
 excluding gross operating revenues from service provided in the 
 state to large electric customer facilities indirectly through a 
 distribution cooperative electric association. 

    (c) Each municipality and cooperative electric association 
 subject to this subdivision shall identify and implement energy 
 conservation improvement spending and investments that are 
 appropriate for the municipality or association, except that a 
 municipality or association may not spend or invest for energy 
 conservation improvements that directly benefit a large electric 
 customer facility for which the commissioner has issued an 
 exemption under subdivision 1a, paragraph (b). 

    (d) Each municipality and cooperative electric association 
 subject to this subdivision may spend and invest annually up to 
 ten percent of the total amount required to be spent and 
 invested on energy conservation improvements under this 
 subdivision on research and development projects that meet the 
 definition of energy conservation improvement in subdivision 1 
 and that are funded directly by the municipality or cooperative 
 electric association.  

    (e) Load-management activities that do not reduce energy 
 use but that increase the efficiency of the electric system may 
 be used to meet the following percentage of the conservation 
 investment and spending requirements of this subdivision: 

    (1) 2002 - 90 percent; 

    (2) 2003 - 80 percent; 

    (3) 2004 - 65 percent; and 

    (4) 2005 and thereafter - 50 percent. 

    (f) A generation and transmission cooperative electric 
 association that provides energy services to cooperative 
 electric associations that provide electric service at retail to 
 consumers may invest in energy conservation improvements on 
 behalf of the associations it serves and may fulfill the 
 conservation, spending, reporting, and energy savings goals on 
 an aggregate basis.  A municipal power agency or other 
 not-for-profit entity that provides energy service to municipal 
 utilities that provide electric service at retail may invest in 
 energy conservation improvements on behalf of the municipal 
 utilities it serves and may fulfill the conservation, spending, 
 reporting, and energy savings goals on an aggregate basis, under 
 an agreement between the municipal power agency or 
 not-for-profit entity and each municipal utility for funding the 
 investments. 

    (g) By June 1, 2002, and every two years thereafter, each 
 municipality or cooperative shall file an overview of its 
 conservation improvement plan with the commissioner.  With this 
 overview, the municipality or cooperative shall also provide an 
 evaluation to the commissioner detailing its energy conservation 
 improvement spending and investments for the previous period.  
 The evaluation must briefly describe each conservation program 
 and must specify the energy savings or increased efficiency in 
 the use of energy within the service territory of the utility or 
 association that is the result of the spending and investments.  
 The evaluation must analyze the cost-effectiveness of the 
 utility's or association's conservation programs, using a list 
 of baseline energy and capacity savings assumptions developed in 
 consultation with the department. 

 The commissioner shall review each evaluation and make 
 recommendations, where appropriate, to the municipality or 
 association to increase the effectiveness of conservation 
 improvement activities.  Up to three percent of a utility's 
 conservation spending obligation under this section may be used 
 for program pre-evaluation, testing, and monitoring and program 
 evaluation.  The overview filed by a municipality with less than 
 $2,500,000 in annual gross revenues from the retail sale of 
 electric service may consist of a letter from the governing 
 board of the municipal utility to the department providing the 
 amount of annual conservation spending required of that 
 municipality and certifying that the required amount has been 
 spent on conservation programs pursuant to this subdivision.  

    (h) The commissioner shall also review each evaluation for 
 whether a portion of the money spent on residential conservation 
 improvement programs is devoted to programs that directly 
 address the needs of renters and low-income persons unless an 
 insufficient number of appropriate programs are available.  For 
 the purposes of this subdivision and subdivision 2, "low-income" 
 means an income at or below 50 percent of the state median 
 income.  

    (i) As part of its spending for conservation improvement, a 
 municipality or association may contribute to the energy and 
 conservation account.  A municipality or association may propose 
 to the commissioner to designate that all or a portion of funds 
 contributed to the account be used for research and development 
 projects that can best be implemented on a statewide basis.  Any 
 amount contributed must be remitted to the commissioner by 
 February 1 of each year. 

    (j) A municipality may spend up to 50 percent of its 
 required spending under this section to refurbish an existing 
 district heating or cooling system.  This paragraph expires July 
 1, 2007. 

    Subd. 1c.    Energy-saving goals.  The commissioner 
 shall establish energy-saving goals for energy conservation 
 improvement expenditures and shall evaluate an energy 
 conservation improvement program on how well it meets the goals 
 set. 

    Subd. 1d.    Cooperative conservation investment increase 
 phase-in.  The increase in required conservation improvement 
 expenditures by a cooperative electric association that results 
 from the amendments in Laws 2001, chapter 212, article 8, 
 section 6, to subdivision 1b, paragraph (a), clause (1), must be 
 phased in as follows: 

    (1) at least 25 percent shall be effective in year 2002; 

    (2) at least 50 percent shall be effective in year 2003; 

    (3) at least 75 percent shall be effective in year 2004; 
 and 

    (4) all of the increase shall be effective in year 2005 and 
 thereafter. 

    Subd. 2.    Programs.  (a) The commissioner may require 
 public utilities to make investments and expenditures in energy 
 conservation improvements, explicitly setting forth the interest 
 rates, prices, and terms under which the improvements must be 
 offered to the customers.  The required programs must cover a 
 two-year period.  Public utilities shall file conservation 
 improvement plans by June 1, on a schedule determined by order 
 of the commissioner.  Plans received by a public utility by June 
 1 must be approved or approved as modified by the commissioner 
 by December 1 of that same year.  The commissioner shall give 
 special consideration and encouragement to programs that bring 
 about significant net savings through the use of 
 energy-efficient lighting.  The commissioner shall evaluate the 
 program on the basis of cost-effectiveness and the reliability 
 of technologies employed.  The commissioner's order must provide 
 to the extent practicable for a free choice, by consumers 
 participating in the program, of the device, method, material, 
 or project constituting the energy conservation improvement and 
 for a free choice of the seller, installer, or contractor of the 
 energy conservation improvement, provided that the device, 
 method, material, or project seller, installer, or contractor is 
 duly licensed, certified, approved, or qualified, including 
 under the residential conservation services program, where 
 applicable.  

    (b) The commissioner may require a utility to make an 
 energy conservation improvement investment or expenditure 
 whenever the commissioner finds that the improvement will result 
 in energy savings at a total cost to the utility less than the 
 cost to the utility to produce or purchase an equivalent amount 
 of new supply of energy.  The commissioner shall nevertheless 
 ensure that every public utility operate one or more programs 
 under periodic review by the department.  

    (c) Each public utility subject to subdivision 1a may spend 
 and invest annually up to ten percent of the total amount 
 required to be spent and invested on energy conservation 
 improvements under this section by the utility on research and 
 development projects that meet the definition of energy 
 conservation improvement in subdivision 1 and that are funded 
 directly by the public utility.  

    (d) A public utility may not spend for or invest in energy 
 conservation improvements that directly benefit a large electric 
 customer facility for which the commissioner has issued an 
 exemption pursuant to subdivision 1a, paragraph (b).  The 
 commissioner shall consider and may require a utility to 
 undertake a program suggested by an outside source, including a 
 political subdivision or a nonprofit or community organization. 

    (e) The commissioner may, by order, establish a list of 
 programs that may be offered as energy conservation improvements 
 by a public utility, municipal utility, cooperative electric 
 association, or other entity providing conservation services 
 pursuant to this section.  The list of programs may include 
 rebates for high-efficiency appliances, rebates or subsidies for 
 high-efficiency lamps, small business energy audits, and 
 building recommissioning.  The commissioner may, by order, 
 change this list to add or subtract programs as the commissioner 
 determines is necessary to promote efficient and effective 
 conservation programs. 

    (f) The commissioner shall ensure that a portion of the 
 money spent on residential conservation improvement programs is 
 devoted to programs that directly address the needs of renters 
 and low-income persons, in proportion to the amount the utility 
 has historically spent on such programs based on the most recent 
 three-year average relative to the utility's total conservation 
 spending under this section, unless an insufficient number of 
 appropriate programs are available. 

    (g) A utility, a political subdivision, or a nonprofit or 
 community organization that has suggested a program, the 
 attorney general acting on behalf of consumers and small 
 business interests, or a utility customer that has suggested a 
 program and is not represented by the attorney general under 
 section 8.33 may petition the commission to modify or revoke a 
 department decision under this section, and the commission may 
 do so if it determines that the program is not cost-effective, 
 does not adequately address the residential conservation 
 improvement needs of low-income persons, has a long-range 
 negative effect on one or more classes of customers, or is 
 otherwise not in the public interest.  The commission shall 
 reject a petition that, on its face, fails to make a reasonable 
 argument that a program is not in the public interest. 

    (h) The commissioner may order a public utility to include, 
 with the filing of the utility's proposed conservation 
 improvement plan under paragraph (a), the results of an 
 independent audit of the utility's conservation improvement 
 programs and expenditures performed by the department or an 
 auditor with experience in the provision of energy conservation 
 and energy efficiency services approved by the commissioner and 
 chosen by the utility.  The audit must specify the energy 
 savings or increased efficiency in the use of energy within the 
 service territory of the utility that is the result of the 
 spending and investments.  The audit must evaluate the 
 cost-effectiveness of the utility's conservation programs. 

    (i) Up to three percent of a utility's conservation 
 spending obligation under this section may be used for program 
 pre-evaluation, testing, and monitoring and program audit and 
 evaluation.  

    Subd. 2a.    Energy and conservation account.  The 
 commissioner must deposit money contributed under subdivisions 
 1a and 1b in the energy and conservation account in the general 
 fund.  Money in the account is appropriated to the department 
 for programs designed to meet the energy conservation needs of 
 low-income persons and to make energy conservation improvements 
 in areas not adequately served under subdivision 2, including 
 research and development projects included in the definition of 
 energy conservation improvement in subdivision 1.  Interest on 
 money in the account accrues to the account.  Using information 
 collected under section 216C.02, subdivision 1, paragraph (b), 
 the commissioner must, to the extent possible, allocate enough 
 money to programs for low-income persons to assure that their 
 needs are being adequately addressed.  The commissioner must 
 request the commissioner of finance to transfer money from the 
 account to the commissioner of education for an energy 
 conservation program for low-income persons.  In establishing 
 programs, the commissioner must consult political subdivisions 
 and nonprofit and community organizations, especially 
 organizations engaged in providing energy and weatherization 
 assistance to low-income persons.  At least one program must 
 address the need for energy conservation improvements in areas 
 in which a high percentage of residents use fuel oil or propane 
 to fuel their source of home heating.  The commissioner may 
 contract with a political subdivision, a nonprofit or community 
 organization, a public utility, a municipality, or a cooperative 
 electric association to implement its programs.  The 
 commissioner may provide grants to any person to conduct 
 research and development projects in accordance with this 
 section. 

    Subd. 2b.    Recovery of expenses.  The commission shall 
 allow a utility to recover expenses resulting from a 
 conservation improvement program required by the department and 
 contributions to the energy and conservation account, unless the 
 recovery would be inconsistent with a financial incentive 
 proposal approved by the commission.  In addition, a utility may 
 file annually, or the Public Utilities Commission may require 
 the utility to file, and the commission may approve, rate 
 schedules containing provisions for the automatic adjustment of 
 charges for utility service in direct relation to changes in the 
 expenses of the utility for real and personal property taxes, 
 fees, and permits, the amounts of which the utility cannot 
 control.  A public utility is eligible to file for adjustment 
 for real and personal property taxes, fees, and permits under 
 this subdivision only if, in the year previous to the year in 
 which it files for adjustment, it has spent or invested at least 
 1.75 percent of its gross revenues from provision of electric 
 service, excluding gross operating revenues from electric 
 service provided in the state to large electric customer 
 facilities for which the commissioner has issued an exemption 
 under subdivision 1a, paragraph (b), and 0.6 percent of its 
 gross revenues from provision of gas service, excluding gross 
 operating revenues from gas services provided in the state to 
 large electric customer facilities for which the commissioner 
 has issued an exemption under subdivision 1a, paragraph (b), for 
 that year for energy conservation improvements under this 
 section. 

    Subd. 3.    Ownership of energy conservation improvement. 
  An energy conservation improvement made to or installed in a 
 building in accordance with this section, except systems owned 
 by the utility and designed to turn off, limit, or vary the 
 delivery of energy, are the exclusive property of the owner of 
 the building except to the extent that the improvement is 
 subjected to a security interest in favor of the utility in case 
 of a loan to the building owner.  The utility has no liability 
 for loss, damage or injury caused directly or indirectly by an 
 energy conservation improvement except for negligence by the 
 utility in purchase, installation, or modification of the 
 product.  

    Subd. 4.    Federal law prohibitions.  If investments by 
 public utilities in energy conservation improvements are in any 
 manner prohibited or restricted by federal law and there is a 
 provision under which the prohibition or restriction may be 
 waived, then the commission, the governor, or any other 
 necessary state agency or officer shall take all necessary and 
 appropriate steps to secure a waiver with respect to those 
 public utility investments in energy conservation improvements 
 included in this section.  

    Subd. 5.    Efficient lighting program.  (a) Each public 
 utility, cooperative electric association, and municipal utility 
 that provides electric service to retail customers shall include 
 as part of its conservation improvement activities a program to 
 strongly encourage the use of fluorescent and high-intensity 
 discharge lamps.  The program must include at least a public 
 information campaign to encourage use of the lamps and proper 
 management of spent lamps by all customer classifications.  

    (b) A public utility that provides electric service at 
 retail to 200,000 or more customers shall establish, either 
 directly or through contracts with other persons, including lamp 
 manufacturers, distributors, wholesalers, and retailers and 
 local government units, a system to collect for delivery to a 
 reclamation or recycling facility spent fluorescent and 
 high-intensity discharge lamps from households and from small 
 businesses as defined in section 645.445 that generate an 
 average of fewer than ten spent lamps per year. 

    (c) A collection system must include establishing 
 reasonably convenient locations for collecting spent lamps from 
 households and financial incentives sufficient to encourage 
 spent lamp generators to take the lamps to the collection 
 locations.  Financial incentives may include coupons for 
 purchase of new fluorescent or high-intensity discharge lamps, a 
 cash back system, or any other financial incentive or group of 
 incentives designed to collect the maximum number of spent lamps 
 from households and small businesses that is reasonably feasible.

    (d) A public utility that provides electric service at 
 retail to fewer than 200,000 customers, a cooperative electric 
 association, or a municipal utility that provides electric 
 service at retail to customers may establish a collection system 
 under paragraphs (b) and (c) as part of conservation improvement 
 activities required under this section. 

    (e) The commissioner of the Pollution Control Agency may 
 not, unless clearly required by federal law, require a public 
 utility, cooperative electric association, or municipality that 
 establishes a household fluorescent and high-intensity discharge 
 lamp collection system under this section to manage the lamps as 
 hazardous waste as long as the lamps are managed to avoid 
 breakage and are delivered to a recycling or reclamation 
 facility that removes mercury and other toxic materials 
 contained in the lamps prior to placement of the lamps in solid 
 waste. 

    (f) If a public utility, cooperative electric association, 
 or municipal utility contracts with a local government unit to 
 provide a collection system under this subdivision, the contract 
 must provide for payment to the local government unit of all the 
 unit's incremental costs of collecting and managing spent lamps. 

    (g) All the costs incurred by a public utility, cooperative 
 electric association, or municipal utility for promotion and 
 collection of fluorescent and high-intensity discharge lamps 
 under this subdivision are conservation improvement spending 
 under this section. 

    Subd. 6.    Renewable energy research.  (a) A public 
 utility that owns a nuclear generation facility in the state 
 shall spend five percent of the total amount that utility is 
 required to spend under this section to support basic and 
 applied research and demonstration activities at the University 
 of Minnesota Initiative for Renewable Energy and the Environment 
 for the development of renewable energy sources and 
 technologies.  The utility shall transfer the required amount to 
 the University of Minnesota on or before July 1 of each year and 
 that annual amount shall be deducted from the amount of money 
 the utility is required to spend under this section.  The 
 University of Minnesota shall transfer at least ten percent of 
 these funds to at least one rural campus or experiment station. 

    (b) Research funded under this subdivision shall include: 

    (1) development of environmentally sound production, 
 distribution, and use of energy, chemicals, and materials from 
 renewable sources; 

    (2) processing and utilization of agricultural and forestry 
 plant products and other bio-based, renewable sources as a 
 substitute for fossil-fuel-based energy, chemicals, and 
 materials using a variety of means including biocatalysis, 
 biorefining, and fermentation; 

    (3) conversion of state wind resources to hydrogen for 
 energy storage and transportation to areas of energy demand; 

    (4) improvements in scalable hydrogen fuel cell 
 technologies; and 

    (5) production of hydrogen from bio-based, renewable 
 sources; and sequestration of carbon. 

    (c) Notwithstanding other law to the contrary, the utility 
 may, but is not required to, spend more than two percent of its 
 gross operating revenues from service provided in this state 
 under this section or section 216B.2411. 

    (d) This subdivision expires June 30, 2008.  

    HIST: 1980 c 579 s 18; 1980 c 614 s 123; 1981 c 356 s 182,248; 
 1982 c 561 s 4; 1983 c 179 s 6-8; 1989 c 338 s 2,3; 1991 c 235 
 art 1 s 2; 1992 c 478 s 2,3; 1993 c 249 s 31; 1994 c 483 s 1; 
 1994 c 641 art 3 s 1; art 4 s 4; 1994 c 644 s 3; 1998 c 273 s 
 11; 1998 c 350 s 1; 1999 c 140 s 2-7; 2001 c 212 art 8 s 4-7,12; 
 1Sp2001 c 4 art 6 s 44-46,77; 2003 c 130 s 12; 1Sp2003 c 11 art 
 2 s 5; art 3 s 4 

     216B.2411 Distributed energy resources. 

    Subdivision 1.    Generation projects.  (a) Any 
 municipality or rural electric association providing electric 
 service and subject to section 216B.241 that is meeting the 
 objectives under section 216B.1691 may, and each public utility 
 may, use five percent of the total amount to be spent on energy 
 conservation improvements under section 216B.241, on: 

    (1) projects in Minnesota to construct an electric 
 generating facility that utilizes eligible renewable energy 
 sources as defined in subdivision 2, such as methane or other 
 combustible gases derived from the processing of plant or animal 
 wastes, biomass fuels such as short-rotation woody or fibrous 
 agricultural crops, or other renewable fuel, as its primary fuel 
 source; or 

    (2) projects in Minnesota to install a distributed 
 generation facility of ten megawatts or less of interconnected 
 capacity that is fueled by natural gas, renewable fuels, or 
 another similarly clean fuel.  

    (b) For public utilities, as defined under section 216B.02, 
 subdivision 4, projects under this section must be considered 
 energy conservation improvements as defined in section 
 216B.241.  For cooperative electric associations and municipal 
 utilities, projects under this section must be considered 
 load-management activities described in section 216B.241, 
 subdivision 1, paragraph (i).  

    Subd. 2.    Definitions.  (a) For the purposes of this 
 section, the terms defined in this subdivision and section 
 216B.241, subdivision 1, have the meanings given them. 

    (b) "Eligible renewable energy sources" means fuels and 
 technologies to generate electricity through the use of any of 
 the resources listed in section 216B.1691, subdivision 1, 
 paragraph (a), clause (1), except that the term "biomass" has 
 the meaning provided under paragraph (c). 

    (c) "Biomass" includes: 

    (1) methane or other combustible gases derived from the 
 processing of plant or animal material; 

    (2) alternative fuels derived from soybean and other 
 agricultural plant oils or animal fats; 

    (3) combustion of barley hulls, corn, soy-based products, 
 or other agricultural products; 

    (4) wood residue from the wood products industry in 
 Minnesota or other wood products such as short-rotation woody or 
 fibrous agricultural crops; and 

    (5) landfill gas, mixed municipal solid waste, and 
 refuse-derived fuel from mixed municipal solid waste.  

    Subd. 3.    Other provisions.  (a) Electricity generated 
 by a facility constructed with funds provided under this section 
 and using an eligible renewable energy source may be counted 
 toward the renewable energy objectives in section 216B.1691, 
 subject to the provisions of that section. 

    (b) Two or more entities may pool resources under this 
 section to provide assistance jointly to proposed eligible 
 renewable energy projects.  The entities shall negotiate and 
 agree among themselves for allocation of benefits associated 
 with a project, such as the ability to count energy generated by 
 a project toward a utility's renewable energy objectives under 
 section 216B.1691.  The entities shall provide a summary of the 
 allocation of benefits to the commissioner.  A utility may spend 
 funds under this section for projects in Minnesota that are 
 outside the service territory of the utility. 

    HIST: 2001 c 212 art 8 s 13,14; 2002 c 398 s 11; 1Sp2003 c 11 
 art 2 s 6 

     216B.242 Natural gas inverted rates program. 

    The commission may initiate a program designed to 
 demonstrate the effect of inverted rates on promoting 
 conservation by the residential customers of natural gas 
 utilities.  Any inverted rates ordered by the commission shall 
 present customers with a tailblock price that, to the maximum 
 extent practicable, reflects the replacement cost of gas.  Total 
 revenues collected from customers involved in this pilot program 
 may not exceed those that would be collected under a flat rate.  
 The commission may order one public gas utility to implement a 
 pilot program of inverted rates for residential customers and to 
 monitor the effects of these rates on gas consumption, and on 
 costs to residential customers.  The program shall include a 
 sufficient number of residential customers to provide 
 statistically significant conclusions regarding the effects and 
 costs of inverted rates.  

    HIST: 1983 c 289 s 115 subd 1; 1983 c 301 s 172; 1987 c 312 
 art 1 s 26 subd 2; 1993 c 163 art 1 s 27 

     216B.2421 Definition of large energy facility. 

    Subdivision 1.    Applicability.  The definition in this 
 section applies to this section and sections 216B.2422 and 
 216B.243. 

    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 
 200 kilovolts or more; 

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

    (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 100,000 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. 

    Subd. 3. Repealed, 2001 c 212 art 7 s 36 

    HIST: 1974 c 307 s 2; 1975 c 170 s 1; 1977 c 381 s 8; Ex1979 c 
 2 s 11; 1981 c 356 s 248; 1982 c 561 s 1; 1991 c 199 art 2 s 1; 
 1993 c 327 s 8,9; 1993 c 356 s 2; 2001 c 212 art 7 s 29 

     216B.2422 Resource planning; renewable energy. 

    Subdivision 1.    Definitions.  (a) For purposes of this 
 section, the terms defined in this subdivision have the meanings 
 given them. 

    (b) "Utility" means an entity with the capability of 
 generating 100,000 kilowatts or more of electric power and 
 serving, either directly or indirectly, the needs of 10,000 
 retail customers in Minnesota.  Utility does not include federal 
 power agencies. 

    (c) "Renewable energy" means electricity generated through 
 use of any of the following resources: 

    (1) wind; 

    (2) solar; 

    (3) geothermal; 

    (4) hydro; 

    (5) trees or other vegetation; or 

    (6) landfill gas. 

    (d) "Resource plan" means a set of resource options that a 
 utility could use to meet the service needs of its customers 
 over a forecast period, including an explanation of the supply 
 and demand circumstances under which, and the extent to which, 
 each resource option would be used to meet those service needs.  
 These resource options include using, refurbishing, and 
 constructing utility plant and equipment, buying power generated 
 by other entities, controlling customer loads, and implementing 
 customer energy conservation. 

    (e) "Refurbish" means to rebuild or substantially modify an 
 existing electricity generating resource of 30 megawatts or 
 greater. 

    Subd. 2.    Resource plan filing and approval.  A 
 utility shall file a resource plan with the commission 
 periodically in accordance with rules adopted by the 
 commission.  The commission shall approve, reject, or modify the 
 plan of a public utility, as defined in section 216B.02, 
 subdivision 4, consistent with the public interest.  In the 
 resource plan proceedings of all other utilities, the 
 commission's order shall be advisory and the order's findings 
 and conclusions shall constitute prima facie evidence which may 
 be rebutted by substantial evidence in all other proceedings.  
 With respect to utilities other than those defined in section 
 216B.02, subdivision 4, the commission shall consider the filing 
 requirements and decisions in any comparable proceedings in 
 another jurisdiction.  As a part of its resource plan filing, a 
 utility shall include the least cost plan for meeting 50 and 75 
 percent of all new and refurbished capacity needs through a 
 combination of conservation and renewable energy resources. 

    Subd. 2a.    Historical data and advance forecast.  Each 
 utility required to file a resource plan under this section 
 shall include in the filing all applicable annual information 
 required by section 216C.17, subdivision 2, and the rules 
 adopted under that section.  To the extent that a utility 
 complies with this subdivision, it is not required to file 
 annual advance forecasts with the department under section 
 216C.17, subdivision 2. 

    Subd. 3.    Environmental costs.  (a) The commission 
 shall, to the extent practicable, quantify and establish a range 
 of environmental costs associated with each method of 
 electricity generation.  A utility shall use the values 
 established by the commission in conjunction with other external 
 factors, including socioeconomic costs, when evaluating and 
 selecting resource options in all proceedings before the 
 commission, including resource plan and certificate of need 
 proceedings. 

    (b) The commission shall establish interim environmental 
 cost values associated with each method of electricity 
 generation by March 1, 1994.  These values expire on the date 
 the commission establishes environmental cost values under 
 paragraph (a). 

    Subd. 4.    Preference for renewable energy facility.  
 The commission shall not approve a new or refurbished 
 nonrenewable energy facility in an integrated resource plan or a 
 certificate of need, pursuant to section 216B.243, nor shall the 
 commission allow rate recovery pursuant to section 216B.16 for 
 such a nonrenewable energy facility, unless the utility has 
 demonstrated that a renewable energy facility is not in the 
 public interest. 

    Subd. 5.    Bidding; exemption from certificate of need 
 proceeding.  (a) A utility may select resources to meet its 
 projected energy demand through a bidding process approved or 
 established by the commission.  A utility shall use the 
 environmental cost estimates determined under subdivision 3 in 
 evaluating bids submitted in a process established under this 
 subdivision. 

    (b) Notwithstanding any other provision of this section, if 
 an electric power generating plant, as described in section 
 216B.2421, subdivision 2, clause (1), is selected in a bidding 
 process approved or established by the commission, a certificate 
 of need proceeding under section 216B.243 is not required. 

    (c) A certificate of need proceeding is also not required 
 for an electric power generating plant that has been selected in 
 a bidding process approved or established by the commission, or 
 such other selection process approved by the commission, to 
 satisfy, in whole or in part, the wind power mandate of section 
 216B.2423 or the biomass mandate of section 216B.2424. 

    Subd. 6.    Consolidation of resource planning and 
 certificate of need.  A utility shall indicate in its resource 
 plan whether it intends to site or construct a large energy 
 facility.  If the utility's resource plan includes a proposed 
 large energy facility and construction of that facility is 
 likely to begin before the utility files its next resource plan, 
 the commission shall conduct the resource plan proceeding 
 consistent with the requirements of section 216B.243 with 
 respect to the proposed facility.  If the commission approves 
 the proposed facility in the resource plan, a separate 
 certificate of need proceeding is not required. 

    HIST: 1993 c 356 s 3; 1994 c 644 s 4; 1997 c 176 s 2; 1997 c 
 198 s 1 

     216B.2423 Wind power mandate. 

    Subdivision 1.    Mandate.  A public utility, as defined 
 in section 216B.02, subdivision 4, that operates a 
 nuclear-powered electric generating plant within this state must 
 construct and operate, purchase, or contract to construct and 
 operate:  (1) 225 megawatts of electric energy installed 
 capacity generated by wind energy conversion systems within the 
 state by December 31, 1998; and (2) an additional 200 megawatts 
 of installed capacity so generated by December 31, 2002. 

    For the purpose of this section, "wind energy conversion 
 system" has the meaning given it in section 216C.06, subdivision 
 19. 

    Subd. 2.    Resource planning mandate.  The Public 
 Utilities Commission shall order a public utility subject to 
 subdivision 1, to construct and operate, purchase, or contract 
 to purchase an additional 400 megawatts of electric energy 
 installed capacity generated by wind energy conversion systems 
 by December 31, 2002, subject to resource planning and least 
 cost planning requirements in section 216B.2422. 

    Subd. 2a.    Site preference.  The Public Utilities 
 Commission shall ensure that a utility subject to the 
 requirements of subdivision 1, clause (2), shall implement that 
 clause with a preference for wind energy conversion systems 
 within the state.  This preference shall not prevent the utility 
 from constructing or contracting to construct wind energy 
 conversion systems outside the state, if the Public Utilities 
 Commission determines that selection of a facility within the 
 state conflicts with the requirements of section 216B.03. 

    Subd. 3.    Standard contract for wind energy conversion 
 systems.  The Public Utilities Commission shall require a 
 public utility subject to subdivision 1 to develop and file in a 
 form acceptable to the commission by October 1, 1997, a standard 
 form contract for the purchase of electricity from wind 
 conversion systems with installed capacity of two megawatts and 
 less.  For purposes of applying the two megawatts limit, the 
 installed capacity sold to the public utility from a single 
 seller or affiliated group of sellers shall be cumulated.  The 
 standard contract shall include all the terms and conditions for 
 purchasing wind-generated power by the utility, except for price 
 and any other specific terms necessary to ensure system 
 reliability and safety, which shall be separately negotiable. 

    HIST: 1994 c 641 art 3 s 2; 1997 c 216 s 123; 1999 c 200 s 3 

     216B.2424 Biomass power mandate. 

    Subdivision 1.    Farm-grown closed-loop biomass.  (a) 
 For the purposes of this section, "farm-grown closed-loop 
 biomass" means biomass, as defined in section 216C.051, 
 subdivision 7, that: 

    (1) is intentionally cultivated, harvested, and prepared 
 for use, in whole or in part, as a fuel for the generation of 
 electricity; 

    (2) when combusted, releases an amount of carbon dioxide 
 that is less than or approximately equal to the carbon dioxide 
 absorbed by the biomass fuel during its growing cycle; and 

    (3) is fired in a new or substantially retrofitted electric 
 generating facility that is: 

    (i) located within 400 miles of the site of the biomass 
 production; and 

    (ii) designed to use biomass to meet at least 75 percent of 
 its fuel requirements. 

    (b) The legislature finds that the negative environmental 
 impacts within 400 miles of the facility resulting from 
 transporting and combusting the biomass are offset in that 
 region by the environmental benefits to air, soil, and water of 
 the biomass production. 

    (c) Among the biomass fuel sources that meet the 
 requirements of paragraph (a), clause (2) are poplar, aspen, 
 willow, switch grass, sorghum, alfalfa, and cultivated prairie 
 grass. 

    Subd. 2.    Interim exemption.  (a) A biomass project 
 proposing to use, as its primary fuel over the life of the 
 project, short rotation woody crops, may use as an interim fuel 
 agricultural waste and other biomass which is not farm-grown 
 closed-loop biomass for up to six years after the project's 
 electric generating facility becomes operational; provided, the 
 project developer demonstrates the project will use the 
 designated short rotation woody crops as its primary fuel after 
 the interim period and provided the location of the interim fuel 
 production meets the requirements of subdivision 1, paragraph 
 (a), clause (3). 

    (b) A biomass project proposing to use, as its primary fuel 
 over the life of the project, short rotation woody crops, may 
 use as an interim fuel agricultural waste and other biomass 
 which is not farm-grown closed-loop biomass for up to three 
 years after the project's electric generating facility becomes 
 operational; provided, the project developer demonstrates the 
 project will use the designated short rotation woody crops as 
 its primary fuel after the interim period. 

    (c) A biomass project that uses an interim fuel under the 
 terms of paragraph (b) may, in addition, use an interim fuel 
 under the terms of paragraph (a) for six years less the number 
 of years that an interim fuel was used under paragraph (b). 

    (d) A project developer proposing to use an exempt interim 
 fuel under paragraphs (a) and (b) must demonstrate to the public 
 utility that the project will have an adequate supply of short 
 rotation woody crops which meet the requirements of subdivision 
 1 to fuel the project after the interim period. 

    Subd. 3.    Fuel exemption.  Over the duration of the 
 contract of a biomass power facility selected to satisfy the 
 mandate in subdivision 5, fuel sources that are not biomass may 
 be used to satisfy up to 25 percent of the fuel requirements of 
 a biomass power facility selected to satisfy the biomass power 
 mandate in subdivision 5, except that agricultural crop wastes, 
 such as oat hulls, may be used to satisfy more than 25 percent 
 of the fuel requirements of a power facility selected to satisfy 
 the biomass power mandate in subdivision 5 if the wastes are 
 co-fired with the fuel authorized for the facility.  A biomass 
 power facility selected to satisfy the mandate in subdivision 5 
 also may use fuel sources that are not biomass during any period 
 when biomass fuel sources are not reasonably available to the 
 facility due to any circumstances constituting an act of God.  
 Fuel sources that are not biomass used during such a period of 
 biomass fuel source unavailability shall not be counted toward 
 the 25 percent exemption provided in this subdivision.  For 
 purposes of this subdivision, "act of God" means any natural 
 disaster or other natural phenomenon of an exceptional, 
 inevitable, or irresistible character, including, but not 
 limited to, flood, fire, drought, earthquake, and crop failure 
 resulting from climatic conditions, infestation, or disease. 

    Subd. 4.    Financial viability.  A biomass project 
 developer must demonstrate to the public utility evidence of 
 sufficient financial viability necessary for the construction 
 and operation of the biomass project. 

    Subd. 5.    Mandate.  (a) A public utility, as defined 
 in section 216B.02, subdivision 4, that operates a 
 nuclear-powered electric generating plant within this state must 
 construct and operate, purchase, or contract to construct and 
 operate (1) by December 31, 1998, 50 megawatts of electric 
 energy installed capacity generated by farm-grown closed-loop 
 biomass scheduled to be operational by December 31, 2001; and 
 (2) by December 31, 1998, an additional 75 megawatts of 
 installed capacity so generated scheduled to be operational by 
 December 31, 2002.  

    (b) Of the 125 megawatts of biomass electricity installed 
 capacity required under this subdivision, no more than 55 
 megawatts of this capacity may be provided by a facility that 
 uses poultry litter as its primary fuel source and any such 
 facility:  

    (1) need not use biomass that complies with the definition 
 in subdivision 1; 

    (2) must enter into a contract with the public utility for 
 such capacity, that has an average purchase price per megawatt 
 hour over the life of the contract that is equal to or less than 
 the average purchase price per megawatt hour over the life of 
 the contract in contracts approved by the Public Utilities 
 Commission before April 1, 2000, to satisfy the mandate of this 
 section, and file that contract with the Public Utilities 
 Commission prior to September 1, 2000; and 

    (3) must schedule such capacity to be operational by 
 December 31, 2002.  

    (c) Of the total 125 megawatts of biomass electric energy 
 installed capacity required under this section, no more than 75 
 megawatts may be provided by a single project.  

    (d) Of the 75 megawatts of biomass electric energy 
 installed capacity required under paragraph (a), clause (2), no 
 more than 33 megawatts of this capacity may be provided by a St. 
 Paul district heating and cooling system cogeneration facility 
 utilizing waste wood as a primary fuel source.  The St. Paul 
 district heating and cooling system cogeneration facility need 
 not use biomass that complies with the definition in subdivision 
 1.  

    (e) The public utility must accept and consider on an equal 
 basis with other biomass proposals: 

    (1) a proposal to satisfy the requirements of this section 
 that includes a project that exceeds the megawatt capacity 
 requirements of either paragraph (a), clause (1) or (2), and 
 that proposes to sell the excess capacity to the public utility 
 or to other purchasers; and 

    (2) a proposal for a new facility to satisfy more than ten 
 but not more than 20 megawatts of the electrical generation 
 requirements by a small business-sponsored independent power 
 producer facility to be located within the northern quarter of 
 the state, which means the area located north of Constitutional 
 Route No. 8 as described in section 161.114, subdivision 2, and 
 that utilizes biomass residue wood, sawdust, bark, chipped wood, 
 or brush to generate electricity.  A facility described in this 
 clause is not required to utilize biomass complying with the 
 definition in subdivision 1, but must be under construction by 
 December 31, 2005. 

    (f) If a public utility files a contract with the 
 commission for electric energy installed capacity that uses 
 poultry litter as its primary fuel source, the commission must 
 do a preliminary review of the contract to determine if it meets 
 the purchase price criteria provided in paragraph (b), clause 
 (2), of this subdivision.  The commission shall perform its 
 review and advise the parties of its determination within 30 
 days of filing of such a contract by a public utility.  A public 
 utility may submit by September 1, 2000, a revised contract to 
 address the commission's preliminary determination.  

    (g) The commission shall finally approve, modify, or 
 disapprove no later than July 1, 2001, all contracts submitted 
 by a public utility as of September 1, 2000, to meet the mandate 
 set forth in this subdivision.  

    (h) If a public utility subject to this section exercises 
 an option to increase the generating capacity of a project in a 
 contract approved by the commission prior to April 25, 2000, to 
 satisfy the mandate in this subdivision, the public utility must 
 notify the commission by September 1, 2000, that it has 
 exercised the option and include in the notice the amount of 
 additional megawatts to be generated under the option 
 exercised.  Any review by the commission of the project after 
 exercise of such an option shall be based on the same criteria 
 used to review the existing contract. 

    (i) A facility specified in this subdivision qualifies for 
 exemption from property taxation under section 272.02, 
 subdivision 43. 

    Subd. 5a.    Reduction of biomass mandate.  (a) 
 Notwithstanding subdivision 5, the biomass electric energy 
 mandate shall be reduced from 125 megawatts to 110 megawatts.  

    (b) The Public Utilities Commission shall approve a request 
 pending before the Public Utilities Commission as of May 15, 
 2003, for an amendment and assignment of a contract for power 
 from a facility that uses short-rotation, woody crops as its 
 primary fuel previously approved to satisfy a portion of the 
 biomass mandate if the developer of the project agrees to reduce 
 the size of its project from 50 megawatts to 35 megawatts, while 
 maintaining a price for energy at or below the current contract 
 price. 

    Subd. 6.    Remaining megawatt compliance process.  (a) 
 If there remain megawatts of biomass power generating capacity 
 to fulfill the mandate in subdivision 5 after the commission has 
 taken final action on all contracts filed by September 1, 2000, 
 by a public utility, this subdivision governs final compliance 
 with the biomass energy mandate in subdivision 5 subject to the 
 requirements of subdivisions 7 and 8.  

    (b) To the extent not inconsistent with this subdivision, 
 the provisions of subdivisions 2, 3, 4, and 5 apply to proposals 
 subject to this subdivision. 

    (c) A public utility must submit proposals to the 
 commission to complete the biomass mandate.  The commission 
 shall require a public utility subject to this section to issue 
 a request for competitive proposals for projects for electric 
 generation utilizing biomass as defined in paragraph (f) of this 
 subdivision to provide the remaining megawatts of the mandate.  
 The commission shall set an expedited schedule for submission of 
 proposals to the utility, selection by the utility of proposals 
 or projects, negotiation of contracts, and review by the 
 commission of the contracts or projects submitted by the utility 
 to the commission. 

    (d) Notwithstanding the provisions of subdivisions 1 to 5 
 but subject to the provisions of subdivisions 7 and 8, a new or 
 existing facility proposed under this subdivision that is fueled 
 either by biomass or by co-firing biomass with nonbiomass may 
 satisfy the mandate in this section.  Such a facility need not 
 use biomass that complies with the definition in subdivision 1 
 if it uses biomass as defined in paragraph (f) of this 
 subdivision.  Generating capacity produced by co-firing of 
 biomass that is operational as of April 25, 2000, does not meet 
 the requirements of the mandate, except that additional 
 co-firing capacity added at an existing facility after April 25, 
 2000, may be used to satisfy this mandate.  Only the number of 
 megawatts of capacity at a facility which co-fires biomass that 
 are directly attributable to the biomass and that become 
 operational after April 25, 2000, count toward meeting the 
 biomass mandate in this section. 

    (e) Nothing in this subdivision precludes a facility 
 proposed and approved under this subdivision from using fuel 
 sources that are not biomass in compliance with subdivision 3. 

    (f) Notwithstanding the provisions of subdivision 1, for 
 proposals subject to this subdivision, "biomass" includes 
 farm-grown closed-loop biomass; agricultural wastes, including 
 animal, poultry, and plant wastes; and waste wood, including 
 chipped wood, bark, brush, residue wood, and sawdust. 

    (g) Nothing in this subdivision affects in any way 
 contracts entered into as of April 25, 2000, to satisfy the 
 mandate in subdivision 5.  

    (h) Nothing in this subdivision requires a public utility 
 to retrofit its own power plants for the purpose of co-firing 
 biomass fuel, nor is a utility prohibited from retrofitting its 
 own power plants for the purpose of co-firing biomass fuel to 
 meet the requirements of this subdivision. 

    Subd. 7.    Effect on existing projects.  The commission 
 may not approve a project proposed after April 25, 2000, which 
 would have an adverse impact on the ability of a project 
 approved before April 25, 2000, to obtain an adequate supply of 
 the fuel source designated for the project. 

    Subd. 8.    Agricultural biomass requirement.  Of the 
 125 megawatts mandated in subdivision 5, at least 75 megawatts 
 of the generating capacity must be generated by facilities that 
 use agricultural biomass as the principal fuel source.  For 
 purposes of this subdivision, agricultural biomass includes only 
 farm-grown closed-loop biomass and agricultural waste, including 
 animal, poultry, and plant wastes.  For purposes of this 
 subdivision, "principal fuel source" means a fuel source that 
 satisfies at least 75 percent of the fuel requirements of an 
 electric power generating facility.  Nothing in this subdivision 
 is intended to expand the fuel source requirements of 
 subdivision 5.  

    HIST: 1994 c 641 art 3 s 3; 1995 c 224 s 76; 1996 c 450 s 1; 
 1998 c 345 s 2; 2000 c 443 s 1-5; 2001 c 7 s 46; 1Sp2001 c 5 art 
 3 s 13; 2002 c 379 art 1 s 55; 2003 c 127 art 2 s 3; 1Sp2003 c 
 11 art 2 s 7,16 

     216B.2425 State transmission plan. 

    Subdivision 1.    List.  The commission shall maintain a 
 list of certified high-voltage transmission line projects. 

    Subd. 2.    List development.  (a) By November 1 of each 
 odd-numbered year, each public utility, municipal utility, and 
 cooperative electric association, or the generation and 
 transmission organization that serves each utility or 
 association, that owns or operates electric transmission lines 
 in Minnesota shall jointly or individually submit a transmission 
 projects report to the commission.  The report must: 

    (1) list specific present and reasonably foreseeable future 
 inadequacies in the transmission system in Minnesota; 

    (2) identify alternative means of addressing each 
 inadequacy listed; 

    (3) identify general economic, environmental, and social 
 issues associated with each alternative; and 

    (4) provide a summary of public input the utilities and 
 associations have gathered related to the list of inadequacies 
 and the role of local government officials and other interested 
 persons in assisting to develop the list and analyze 
 alternatives. 

    (b) To meet the requirements of this subdivision, entities 
 may rely on available information and analysis developed by a 
 regional transmission organization or any subgroup of a regional 
 transmission organization and may develop and include additional 
 information as necessary.  

    Subd. 3.    Commission approval.  By June 1 of each 
 even-numbered year, the commission shall adopt a state 
 transmission project list and shall certify, certify as 
 modified, or deny certification of the projects proposed under 
 subdivision 2.  The commission may only certify a project that 
 is a high-voltage transmission line as defined in section 
 216B.2421, subdivision 2, that the commission finds is: 

    (1) necessary to maintain or enhance the reliability of 
 electric service to Minnesota consumers; 

    (2) needed, applying the criteria in section 216B.243, 
 subdivision 3; and 

    (3) in the public interest, taking into account electric 
 energy system needs and economic, environmental, and social 
 interests affected by the project. 

    Subd. 4.    List; effect.  Certification of a project as 
 a priority electric transmission project satisfies section 
 216B.243.  A certified project on which construction has not 
 begun more than six years after being placed on the list, must 
 be reapproved by the commission. 

    Subd. 5.    Transmission inventory.  The Department of 
 Commerce shall create, maintain, and update annually an 
 inventory of transmission lines in the state.  

    Subd. 6.    Exclusion.  This section does not apply to 
 any transmission line proposal that has been approved by, or was 
 pending before, a local unit of government, the Environmental 
 Quality Board, or the Public Utilities Commission on August 1, 
 2001.  

    Subd. 7.    Transmission needed to support renewable 
 resources.  Each entity subject to this section shall 
 determine necessary transmission upgrades to support development 
 of renewable energy resources required to meet objectives under 
 section 216B.1691 and shall include those upgrades in its report 
 under subdivision 2. 

    HIST: 2001 c 212 art 7 s 30; 2002 c 379 art 1 s 56; 1Sp2003 c 
 11 art 2 s 8 

     216B.243 Certificate of need for large energy facility. 

    Subdivision 1.    Assessment of need criteria.  The 
 commission shall, pursuant to chapter 14 and sections 216C.05 to 
 216C.30 and this section, adopt assessment of need criteria to 
 be used in the determination of need for large energy facilities 
 pursuant to this section. 

    Subd. 2.    Certificate required.  No large energy 
 facility shall be sited or constructed in Minnesota without the 
 issuance of a certificate of need by the commission pursuant to 
 sections 216C.05 to 216C.30 and this section and consistent with 
 the criteria for assessment of need. 

    Subd. 3.    Showing required for construction.  No 
 proposed large energy facility shall be certified for 
 construction unless the applicant can show that demand for 
 electricity cannot be met more cost effectively through energy 
 conservation and load-management measures and unless the 
 applicant has otherwise justified its need.  In assessing need, 
 the commission shall evaluate: 

    (1) the accuracy of the long-range energy demand forecasts 
 on which the necessity for the facility is based; 

    (2) the effect of existing or possible energy conservation 
 programs under sections 216C.05 to 216C.30 and this section or 
 other federal or state legislation on long-term energy demand; 

    (3) the relationship of the proposed facility to overall 
 state energy needs, as described in the most recent state energy 
 policy and conservation report prepared under section 216C.18; 

    (4) promotional activities that may have given rise to the 
 demand for this facility; 

    (5) benefits of this facility, including its uses to 
 protect or enhance environmental quality, and to increase 
 reliability of energy supply in Minnesota and the region; 

    (6) possible alternatives for satisfying the energy demand 
 or transmission needs including but not limited to potential for 
 increased efficiency and upgrading of existing energy generation 
 and transmission facilities, load-management programs, and 
 distributed generation; 

    (7) the policies, rules, and regulations of other state and 
 federal agencies and local governments; and 

    (8) any feasible combination of energy conservation 
 improvements, required under section 216B.241, that can (i) 
 replace part or all of the energy to be provided by the proposed 
 facility, and (ii) compete with it economically. 

    Subd. 3a.    Use of renewable resource.  The commission 
 may not issue a certificate of need under this section for a 
 large energy facility that generates electric power by means of 
 a nonrenewable energy source, or that transmits electric power 
 generated by means of a nonrenewable energy source, unless the 
 applicant for the certificate has demonstrated to the 
 commission's satisfaction that it has explored the possibility 
 of generating power by means of renewable energy sources and has 
 demonstrated that the alternative selected is less expensive 
 (including environmental costs) than power generated by a 
 renewable energy source.  For purposes of this subdivision, 
 "renewable energy source" includes hydro, wind, solar, and 
 geothermal energy and the use of trees or other vegetation as 
 fuel. 

    Subd. 3b.    Nuclear power plant; new construction 
 prohibited; relicensing.  (a) The commission may not issue a 
 certificate of need for the construction of a new 
 nuclear-powered electric generating plant. 

    (b) Any certificate of need for additional storage of spent 
 nuclear fuel for a facility seeking a license extension shall 
 address the impacts of continued operations over the period for 
 which approval is sought. 

    Subd. 4.    Application for certificate; hearing.  Any 
 person proposing to construct a large energy facility shall 
 apply for a certificate of need prior to applying for a site or 
 route permit under sections 116C.51 to 116C.69 or construction 
 of the facility.  The application shall be on forms and in a 
 manner established by the commission.  In reviewing each 
 application the commission shall hold at least one public 
 hearing pursuant to chapter 14.  The public hearing shall be 
 held at a location and hour reasonably calculated to be 
 convenient for the public.  An objective of the public hearing 
 shall be to obtain public opinion on the necessity of granting a 
 certificate of need.  The commission shall designate a 
 commission employee whose duty shall be to facilitate citizen 
 participation in the hearing process.  If the commission and the 
 Environmental Quality Board determine that a joint hearing on 
 siting and need under this subdivision and section 116C.57, 
 subdivision 2d, is feasible, more efficient, and may further the 
 public interest, a joint hearing under those subdivisions may be 
 held. 

    Subd. 5.    Approval, denial, or modification.  Within 
 six months of the submission of an application, the commission 
 shall approve or deny a certificate of need for the facility.  
 Approval or denial of the certificate shall be accompanied by a 
 statement of the reasons for the decision.  Issuance of the 
 certificate may be made contingent upon modifications required 
 by the commission. 

    Subd. 6.    Application fees; rules.  Any application 
 for a certificate of need shall be accompanied by the fee 
 required pursuant to this subdivision.  The maximum fee shall be 
 $50,000, except for an application for an electric power 
 generating plant as defined in section 216B.2421, subdivision 2, 
 clause (1), or a high-voltage transmission line as defined in 
 section 216B.2421, subdivision 2, clause (2), for which the 
 maximum fee shall be $100,000.  The commission may require an 
 additional fee to recover the costs of any rehearing.  The fee 
 for a rehearing shall not be greater than the actual cost of the 
 rehearing or the maximum fee specified above, whichever is 
 less.  The commission shall establish by rule pursuant to 
 chapter 14 and sections 216C.05 to 216C.30 and this section, a 
 schedule of fees based on the output or capacity of the facility 
 and the difficulty of assessment of need.  Money collected in 
 this manner shall be credited to the general fund of the state 
 treasury. 

    Subd. 7.    Participation by other agency or political 
 subdivision.  Other state agencies authorized to issue permits 
 for siting, construction or operation of large energy 
 facilities, and those state agencies authorized to participate 
 in matters before the commission involving utility rates and 
 adequacy of utility services, shall present their position 
 regarding need and participate in the public hearing process 
 prior to the issuance or denial of a certificate of need.  
 Issuance or denial of certificates of need shall be the sole and 
 exclusive prerogative of the commission and these determinations 
 and certificates shall be binding upon other state departments 
 and agencies, regional, county, and local governments and 
 special purpose government districts except as provided in 
 sections 116C.01 to 116C.08 and 116D.04, subdivision 9. 

    Subd. 8.    Exemptions.  This section does not apply to: 

    (1) cogeneration or small power production facilities as 
 defined in the Federal Power Act, United States Code, title 16, 
 section 796, paragraph (17), subparagraph (A), and paragraph 
 (18), subparagraph (A), and having a combined capacity at a 
 single site of less than 80,000 kilowatts or to plants or 
 facilities for the production of ethanol or fuel alcohol nor in 
 any case where the commission shall determine after being 
 advised by the attorney general that its application has been 
 preempted by federal law; 

    (2) a high-voltage transmission line proposed primarily to 
 distribute electricity to serve the demand of a single customer 
 at a single location, unless the applicant opts to request that 
 the commission determine need under this section or section 
 216B.2425; 

    (3) the upgrade to a higher voltage of an existing 
 transmission line that serves the demand of a single customer 
 that primarily uses existing rights-of-way, unless the applicant 
 opts to request that the commission determine need under this 
 section or section 216B.2425; 

    (4) a high-voltage transmission line of one mile or less 
 required to connect a new or upgraded substation to an existing, 
 new, or upgraded high-voltage transmission line; 

    (5) conversion of the fuel source of an existing electric 
 generating plant to using natural gas; or 

    (6) modification of an existing electric generating plant 
 to increase efficiency, as long as the capacity of the plant is 
 not increased more than ten percent or more than 100 megawatts, 
 whichever is greater.  

    HIST: 1974 c 307 s 13; 1975 c 170 s 3,4; 1977 c 381 s 19; 
 Ex1979 c 2 s 32; 1980 c 579 s 10,11; 1980 c 614 s 123; 1981 c 
 356 s 159,248; 1982 c 424 s 130; 1982 c 561 s 2; 1983 c 289 s 
 46,115 subd 2; 1984 c 558 art 4 s 10; 1984 c 655 art 1 s 22,23; 
 1985 c 304 s 1; 1987 c 312 art 1 s 10 subd 1; 1991 c 235 art 4 s 
 1; art 6 s 2; 1994 c 641 art 2 s 2; 2001 c 212 art 7 s 31-33; 
 2002 c 398 s 4; 1Sp2003 c 11 art 1 s 4 

     216B.244 Nuclear plant capacity requirements. 

    A reactor unit at a nuclear power electric generating plant 
 that has an annual load capacity factor of less than 55 percent 
 for each of three consecutive calendar years must be shut down 
 and cease operating no later than 500 days after the end of the 
 third such consecutive calendar year.  For the purposes of this 
 section, "load capacity factor" means the ratio between a 
 reactor unit's average load and its peak load. 

    HIST: 1994 c 641 art 2 s 3 

     216B.245 Pump and store hydropower facility; prohibition.

    A state agency may not issue a permit for the construction 
 of a facility for generating electricity if the facility would 
 be located on top of the bluffs along the Mississippi River and 
 would pump water from any portion of the river, store the water 
 on top of the bluffs, and release the water at a later time to 
 generate the electricity. 

    HIST: 1993 c 147 s 1 

COMMISSION ORDERS; PROCEDURAL RESPONSIBILITIES

     216B.25 Further action on previous order. 

    The commission may at any time, on its own motion or upon 
 motion of an interested party, and upon notice to the public 
 utility and after opportunity to be heard, rescind, alter or 
 amend any order fixing rates, tolls, charges or schedules, or 
 any other order made by the commission, and may reopen any case 
 following the issuance of an order therein, for the taking of 
 further evidence or for any other reason.  Any order rescinding, 
 altering, amending or reopening a prior order shall have the 
 same effect as an original order.  

    HIST: 1974 c 429 s 25 

     216B.26 Order; effective date.  

    Every decision made by the commission constituting an order 
 or determination shall be in force and effective 20 days after 
 it has been filed and has been served by personal delivery or by 
 mailing a copy thereof to all parties to the proceeding in which 
 the decision was made or to their attorneys, unless the 
 commission shall specify a different date upon which the order 
 shall be effective.  

    HIST: 1974 c 429 s 26 

     216B.27 Rehearing; condition precedent to judicial 
  review. 

    Subdivision 1.    Applying for rehearing.  Within 20 
 days after the service by the commission of any decision 
 constituting an order or determination, any party to the 
 proceeding and any other person, aggrieved by the decision and 
 directly affected thereby, may apply to the commission for a 
 rehearing in respect to any matters determined in the decision.  
 The commission may grant and hold a rehearing on the matters, or 
 upon any of them as it may specify in the order granting the 
 rehearing, if in its judgment sufficient reason therefor exists. 

    Subd. 2.    Contents of application; condition precedent 
 for review.  The application for a rehearing shall set forth 
 specifically the grounds on which the applicant contends the 
 decision is unlawful or unreasonable.  No cause of action 
 arising out of any decision constituting an order or 
 determination of the commission or any proceeding for the 
 judicial review thereof shall accrue in any court to any person 
 or corporation unless the plaintiff or petitioner in the action 
 or proceeding within 20 days after the service of the decision, 
 shall have made application to the commission for a rehearing in 
 the proceeding in which the decision was made.  No person or 
 corporation shall in any court urge or rely on any ground not so 
 set forth in the application for rehearing.  

    Subd. 3.    Rules; procedural requirements; commission's 
 authority.  Applications for rehearing shall be governed by 
 general rules which the commission may establish.  In case a 
 rehearing is granted the proceedings shall conform as nearly as 
 may be to the proceedings in an original hearing, except as the 
 commission may otherwise direct.  If in the commission's 
 judgment, after the rehearing, it shall appear that the original 
 decision, order or determination is in any respect unlawful or 
 unreasonable, the commission may reverse, change, modify or 
 suspend the original action accordingly.  Any decision, order or 
 determination made after the rehearing reversing, changing, 
 modifying or suspending the original determination shall have 
 the same force and effect as an original decision, order or 
 determination.  Only one rehearing shall be granted by the 
 commission; but this shall not be construed to prevent any party 
 from filing a new application or complaint.  No order of the 
 commission shall become effective while an application for a 
 rehearing or a rehearing is pending and until ten days after the 
 application for a rehearing is either denied, expressly or by 
 implication, or the commission has announced its final 
 determination on rehearing.  

    Subd. 4.    Deadline to grant application.  Any 
 application for a rehearing not granted within 60 days from the 
 date of filing thereof, shall be deemed denied. 

    Subd. 5.    Effect of decision on application.  It is 
 hereby declared that the legislative powers of the state, 
 insofar as they are involved in the issuance of orders and 
 decisions by the commission, have not been completely exercised 
 until the commission has acted upon an application for 
 rehearing, as provided for by this section and by the rules of 
 the commission, or until the application for rehearing has been 
 denied by implication, as above provided for.  

    HIST: 1974 c 429 s 27; 1995 c 224 s 77 

     216B.28 Subpoena; witness fee and mileage.  

    The commission and each commissioner, or the secretary of 
 the commission may issue subpoenas and all necessary processes 
 in proceedings pending before it; and each process shall extend 
 to all parts of the state and may be served by any person 
 authorized to serve processes of courts of record.  Each witness 
 who shall appear before the commission, or at a hearing before 
 one of the individuals designated by it as provided in section 
 216B.15, or whose deposition is taken, shall receive for 
 attendance the fees and mileage now provided for witnesses in 
 civil cases in courts of record.  

    HIST: 1974 c 429 s 28; 1986 c 444 

     216B.29 Hearing and subpoena compliance powers.  

    The commission and each of the commissioners or authorized 
 examiner, for the purpose mentioned in Laws 1974, Chapter 429, 
 may administer oaths and examine witnesses.  In case of failure 
 on the part of any person to comply with any subpoena, or in the 
 case of the refusal of any witness to testify concerning any 
 matter on which the witness may be interrogated lawfully, any 
 court of record of general jurisdiction or a judge thereof, on 
 application of the commission, may compel obedience by 
 proceedings for contempt as in the case of disobedience of the 
 requirements of a subpoena issued from the court or a refusal to 
 testify therein.  

    HIST: 1974 c 429 s 29; 1986 c 444 

     216B.30 Deposition.  

    The commission or any party to the proceedings may, in any 
 investigation or hearing before the commission, cause the 
 deposition of witnesses residing within or without the state to 
 be taken in the manner prescribed by law for taking depositions 
 in civil actions in the district court.  

    HIST: 1974 c 429 s 30 

     216B.31 Testimony and production of records; perjury.  

    No person shall be excused from testifying or from 
 producing any book, document, paper, or account in any 
 investigation, or inquiry by, or hearing before, the commission 
 or any commissioner, or person designated by it to conduct 
 hearings, when ordered to do so, upon the ground that the 
 testimony or evidence, book, document, paper, or account 
 required may tend to incriminate the person or subject the 
 person to penalty or forfeiture; but no person shall be 
 prosecuted, punished, or subjected to any forfeiture or penalty 
 for or on account of any act, transaction, matter, or thing 
 concerning which the person shall have been compelled under oath 
 to testify or produce documentary evidence; provided, that no 
 person so testifying shall be exempt from prosecution or 
 punishment for any perjury committed in testimony.  

    HIST: 1974 c 429 s 31; 1986 c 444 

     216B.32 Certified copy of document as evidence.  

    Copies of official documents and orders filed or deposited 
 according to law in the office of the commission, certified by a 
 commissioner or by the secretary under the official seal of the 
 commission to be true copies of the original shall be evidence 
 in like manner as the originals, in all matters before the 
 commission and in the courts of this state.  

    HIST: 1974 c 429 s 32 

     216B.33 Commission ruling written, filed, and certified. 

    Every order, finding, authorization, or certificate issued 
 or approved by the commission under any provisions of Laws 1974, 
 chapter 429 shall be in writing and filed in the office of the 
 secretary of the commission.  A certificate under the seal of 
 the commission that any order, finding, authorization, or 
 certificate has not been modified, stayed, suspended, or 
 revoked, shall be received as evidence in any proceedings as to 
 the facts therein stated.  

    HIST: 1974 c 429 s 33 

     216B.34 Public records.  

    All decisions, transcripts, and orders of the commission 
 shall be public records.  

    HIST: 1974 c 429 s 34 

     216B.35 Transcribed record.  

    A full and complete record shall be kept of all proceedings 
 at any formal hearing had before the commission or any 
 commissioner or hearing examiner and all testimony shall be 
 taken down by a reporter appointed by the commission.  A copy of 
 the transcript shall be furnished on demand to any party to the 
 proceedings upon payment of reasonable costs of reproduction.  

    HIST: 1974 c 429 s 35 

MUNICIPAL POWERS

     216B.36 Municipal regulatory and taxing powers. 

    Any public utility furnishing the utility services 
 enumerated in section 216B.02 or occupying streets, highways, or 
 other public property within a municipality may be required to 
 obtain a license, permit, right or franchise in accordance with 
 the terms, conditions, and limitations of regulatory acts of the 
 municipality, including the placing of distribution lines and 
 facilities underground.  Under the license, permit, right, or 
 franchise, the utility may be obligated by any municipality to 
 pay to the municipality fees to raise revenue or defray 
 increased municipal costs accruing as a result of utility 
 operations, or both.  The fee may include but is not limited to 
 a sum of money based upon gross operating revenues or gross 
 earnings from its operations in the municipality so long as the 
 public utility shall continue to operate in the municipality, 
 unless upon request of the public utility it is expressly 
 released from the obligation at any time by such municipality.  
 Notwithstanding the definition of "public utility" in section 
 216B.02, subdivision 4, a municipality may require payment of a 
 fee under this section by a cooperative electric association 
 organized under chapter 308A that furnishes utility services 
 within the municipality.  All existing licenses, permits, 
 franchises and other rights acquired by any public utility or 
 municipality prior to April 11, 1974, including the payment of 
 existing franchise fees, shall not be impaired or affected in 
 any respect by the passage of this chapter, except with respect 
 to matters of rate and service regulation, service area 
 assignments, securities and indebtedness that are vested in the 
 jurisdiction of the commission by this chapter.  However, in the 
 event that a court of competent jurisdiction determines, or the 
 parties by mutual agreement determine, that an existing license, 
 permit, franchise or other right has been abrogated or impaired 
 by this chapter, or its execution, the municipality affected 
 shall impose and the public utility shall collect an excise tax 
 on the utility charges which from year to year yields an amount 
 which is reasonably equivalent to that amount of revenue which 
 then would be due as a fee, charges or other thing or service of 
 value to the municipality under the franchise, license or 
 permit.  The authorization shall be over and above taxing 
 limitations including, but not limited to those of section 
 477A.016.  Franchises granted pursuant to this section shall be 
 exempt from the provisions of chapter 80C.  For purposes of this 
 section, a public utility shall include a cooperative electric 
 association. 

    HIST: 1974 c 429 s 36; 1978 c 795 s 5; 1Sp1981 c 1 art 6 s 8; 
 1982 c 378 s 1; 1991 c 291 art 9 s 4 

TOWNSHIP NATURAL GAS UTILITY AGREEMENT

     216B.361 Township agreement with natural gas utility. 

    A township may enter into an agreement with a public 
 utility providing natural gas services to provide services 
 within a designated portion or all of the township.  If a city 
 annexes township land for which a utility has an agreement with 
 a township to serve, the utility shall continue to have a 
 nonexclusive right to offer and provide service in the area 
 identified by the agreement with the township for the term of 
 that agreement, subject to the authority of the annexing city to 
 manage public rights-of-way within the city as provided in 
 sections 216B.36, 237.162, and 237.163. 

    Nothing in this section precludes a city from acquiring the 
 property of a public utility under sections 216B.45 to 216B.47 
 for the purpose of allowing the city to own and operate a 
 natural gas utility, or to extend natural gas and other utility 
 services into newly annexed areas. 

    HIST: 1Sp2003 c 11 art 3 s 5 

ASSIGNED ELECTRIC SERVICE AREAS

     216B.37 Assigned service area; electric utility; 
  legislative policy.  

    It is hereby declared to be in the public interest that, in 
 order to encourage the development of coordinated statewide 
 electric service at retail, to eliminate or avoid unnecessary 
 duplication of electric utility facilities, and to promote 
 economical, efficient, and adequate electric service to the 
 public, the state of Minnesota shall be divided into geographic 
 service areas within which a specified electric utility shall 
 provide electric service to customers on an exclusive basis.  

    HIST: 1974 c 429 s 37 

     216B.38 Definitions. 

    Subdivision 1.  MS 1974 Renumbered subd 1a 

    Subdivision 1.    Scope.  For the purpose of sections 
 216B.37 to 216B.44 only, the following definitions shall apply. 

    Subd. 1a. Renumbered subd 8 

    Subd. 1b.    Assigned service area.  "Assigned service 
 area" means the geographical area in which the boundaries are 
 established as provided in section 216B.39. 

    Subd. 2.    Customer.  "Customer" means a person 
 contracting for or purchasing electric service at retail from an 
 electric utility. 

    Subd. 3.  Renumbered subd 4a 

    Subd. 4.    Electric line.  "Electric line" means lines 
 for conducting electric energy at a design voltage of 25,000 
 volts phase to phase or less used for distributing electric 
 energy directly to customers at retail. 

    Subd. 4a.    Electric service.  "Electric service" means 
 electric service furnished to a customer at retail for ultimate 
 consumption, but does not include wholesale electric energy 
 furnished by an electric utility to another electric utility for 
 resale. 

    Subd. 5.    Electric utility.  "Electric utility" means 
 persons, their lessees, trustees, and receivers, separately or 
 jointly, now or hereafter operating, maintaining or controlling 
 in Minnesota equipment or facilities for providing electric 
 service at retail and which fall within the definition of 
 "public utility" in section 216B.02, subdivision 4, and includes 
 facilities owned by a municipality or by a cooperative electric 
 association. 

    Subd. 6.  Renumbered subd 1b 

    Subd. 7.    Municipality.  "Municipality" means any 
 city, however organized. 

    Subd. 8.    Person.  "Person" means a natural person, a 
 partnership, private corporation, a public corporation, a 
 municipality, an association, a cooperative whether incorporated 
 or not, a joint stock association, a business trust, any 
 political subdivision or agency, or two or more persons having 
 joint or common interest. 

    HIST: 1974 c 429 s 38; 1978 c 795 s 6 

     216B.39 Assigned service area. 

    Subdivision 1.    Line map and service list.  On or 
 before six months from April 12, 1974, or, when requested in 
 writing by an electric utility and for good cause shown, and at 
 a further time as the commission may fix by order, each electric 
 utility shall file with the commission a map or maps showing all 
 its electric lines outside of incorporated municipalities as 
 they existed on April 12, 1974.  Each electric utility shall 
 also submit in writing a list of all municipalities in which it 
 provides electric service on the effective date of Laws 1974, 
 chapter 429.  Where two or more electric utilities serve a 
 single municipality, the commission may require each utility to 
 file with the commission a map showing its electric lines within 
 the municipality. 

    Subd. 2.    Determination; map prepared.  On or before 
 12 months from April 12, 1974, the commission shall after notice 
 and hearing establish the assigned service area or areas of each 
 electric utility and shall prepare or cause to be prepared a map 
 or maps to accurately and clearly show the boundaries of the 
 assigned service area of each electric utility. 

    Subd. 3.    Geographic, historic, and contractual 
 considerations.  To the extent that it is not inconsistent 
 with the legislative policy stated in section 216B.37, the 
 boundaries of each assigned service area, outside of 
 incorporated municipalities, shall be a line equidistant between 
 the electric lines of adjacent electric utilities as they exist 
 on April 12, 1974; provided that these boundaries may be 
 modified by the commission to take account of natural and other 
 physical barriers including, but not limited to, highways, 
 waterways, railways, major bluffs, and ravines and shall be 
 modified to take account of the contracts provided for in 
 subdivision 4; and provided further that at any time after April 
 12, 1974, the commission may on its own or at the request of an 
 electric utility make changes in the boundaries of the assigned 
 service areas, but only after notice and hearing as provided for 
 in sections 216B.17 and 216B.18. 

    Subd. 4.    Service area contract between utilities.  
 Contracts between electric utilities, which are executed on or 
 before 12 months from April 12, 1974, designating service areas 
 and customers to be served by the electric utilities when 
 approved by the commission shall be valid and enforceable and 
 shall be incorporated into the appropriate assigned service 
 areas.  The commission shall approve a contract if it finds that 
 the contract will eliminate or avoid unnecessary duplication of 
 facilities, will provide adequate electric service to all areas 
 and customers affected and will promote the efficient and 
 economical use and development of the electric systems of the 
 contracting electric utilities. 

    Subd. 5.    Assigned service area in municipality.  
 Where a single electric utility provides electric service within 
 a municipality on April 12, 1974, that entire municipality shall 
 constitute a part of the assigned service area of the electric 
 utility in question. Where two or more electric utilities 
 provide electric service in a municipality on April 12, 1974, 
 the boundaries of the assigned service areas shall conform to 
 those contained in municipal franchises with the electric 
 utilities on April 12, 1974.  In the absence of a franchise, the 
 boundaries of the assigned service areas within an incorporated 
 municipality shall be a line equidistant between the electric 
 lines of the electric utilities as they exist on April 12, 1974; 
 provided that these boundaries may be modified by the commission 
 to take account of natural and other physical barriers 
 including, but not limited to, major streets or highways, 
 waterways, railways, major bluffs and ravines and shall be 
 modified to take account of the contracts provided for in 
 subdivision 4. 

    Subd. 6.    Determination for exceptional case.  In 
 those areas where, on April 12, 1974, the existing electric 
 lines of two or more electric utilities are so intertwined that 
 subdivisions 2 to 5 cannot reasonably be applied, the commission 
 shall determine the boundaries of the assigned service areas for 
 the electric utilities involved as will promote the legislative 
 policy in section 216B.37, subdivision 1. 

    HIST: 1974 c 429 s 39 

     216B.40 Exclusive service right; service extension. 

    Except as provided in sections 216B.42 and 216B.421, each 
 electric utility shall have the exclusive right to provide 
 electric service at retail to each and every present and future 
 customer in its assigned service area and no electric utility 
 shall render or extend electric service at retail within the 
 assigned service area of another electric utility unless the 
 electric utility consents thereto in writing; provided that any 
 electric utility may extend its facilities through the assigned 
 service area of another electric utility if the extension is 
 necessary to facilitate the electric utility connecting its 
 facilities or customers within its own assigned service area. 

    HIST: 1974 c 429 s 40; 1977 c 99 s 1 

     216B.41 Effect of incorporation, annexation, or 
  consolidation.  

    After April 12, 1974, the inclusion by incorporation, 
 consolidation, or annexation of any part of the assigned service 
 area of an electric utility within the boundaries of any 
 municipality shall not in any respect impair or affect the 
 rights of the electric utility to continue and extend electric 
 service at retail throughout any part of its assigned service 
 area unless a municipality which owns and operates an electric 
 utility elects to purchase the facilities and property of the 
 electric utility as provided in section 216B.44.  

    HIST: 1974 c 429 s 41 

     216B.42 Service extension in certain situations.  

    Subdivision 1.    Large customer outside municipality.  
 Notwithstanding the establishment of assigned service areas for 
 electric utilities provided for in section 216B.39, customers 
 located outside municipalities and who require electric service 
 with a connected load of 2,000 kilowatts or more shall not be 
 obligated to take electric service from the electric utility 
 having the assigned service area where the customer is located 
 if, after notice and hearing, the commission so determines after 
 consideration of following factors: 

    (1) the electric service requirements of the load to be 
 served; 

    (2) the availability of an adequate power supply; 

    (3) the development or improvement of the electric system 
 of the utility seeking to provide the electric service, 
 including the economic factors relating thereto; 

    (4) the proximity of adequate facilities from which 
 electric service of the type required may be delivered; 

    (5) the preference of the customer; 

    (6) any and all pertinent factors affecting the ability of 
 the utility to furnish adequate electric service to fulfill 
 customers' requirements.  

    Subd. 2.    Service line extension to utility's property. 
  Notwithstanding the provisions in section 216B.39, any 
 electric utility may extend electric lines for electric service 
 to its own utility property and facilities.  

    HIST: 1974 c 429 s 42 

     216B.421 Homestead; option of electric service. 

    Subdivision 1.    Multiple service areas; customer 
 election.  Notwithstanding the establishment of assigned 
 service areas for electric utilities provided for in section 
 216B.39, when a customer requires electric service for buildings 
 or other structures located on land constituting the customer's 
 homestead and the buildings or structures are located within 
 more than one assigned service area, the customer may elect to 
 contract for or purchase the customer's entire electric service 
 requirements from either of the electric utilities providing the 
 customer with electric service.  An electric utility may extend 
 its facilities through the assigned service area of another 
 electric utility if the extension is necessary to facilitate the 
 electric utility connecting a customer who elects to purchase or 
 contract for service from it pursuant to this section. 

    Subd. 2.    Restriction.  The provisions of subdivision 
 1 shall only apply to the provision of electric service to 
 buildings and other structures that were under construction on 
 April 11, 1974. 

    HIST: 1977 c 99 s 2; 1986 c 444 

     216B.43 Hearing on complaint. 

    Upon the filing of an application under section 216B.42 or 
 upon complaint by an affected utility that the provisions of 
 sections 216B.39 to 216B.42 have been violated, the commission 
 shall hold a hearing, upon notice, within 30 days after the 
 filing of the complaint, and shall render its decision within 30 
 days after the hearing.  

    HIST: 1974 c 429 s 43; 1993 c 327 s 10 

MUNICIPAL ACQUISITION OF UTILITY PROPERTY

     216B.44 Municipal service territory extension. 

    (a) Notwithstanding the provisions of sections 216B.38 to 
 216B.42, whenever a municipality which owns and operates an 
 electric utility (1) extends its corporate boundaries through 
 annexation or consolidation, or (2) determines to extend its 
 service territory within its existing corporate boundaries, the 
 municipality shall thereafter furnish electric service to these 
 areas unless the area is already receiving electric service from 
 an electric utility, in which event, the municipality may 
 purchase the facilities of the electric utility serving the area.

    (b) The municipality acquiring the facilities shall pay to 
 the electric utility formerly serving the area the appropriate 
 value of its properties within the area which payment may be by 
 exchange of other electric utility property outside the 
 municipality on an appropriate basis giving due consideration to 
 revenue from and value of the respective properties.  In the 
 event the municipality and the electric utility involved are 
 unable to agree as to the terms of the payment or exchange, the 
 municipality or the electric utility may file an application 
 with the commission requesting that the commission determine the 
 appropriate terms for the exchange or sale.  After notice and 
 hearing, the commission shall determine appropriate terms for an 
 exchange, or in the event no appropriate properties can be 
 exchanged, the commission shall fix and determine the 
 appropriate value of the property within the annexed area, and 
 the transfer shall be made as directed by the commission.  In 
 making that determination the commission shall consider the 
 original cost of the property, less depreciation, loss of 
 revenue to the utility formerly serving the area, expenses 
 resulting from integration of facilities, and other appropriate 
 factors. 

    (c) Until the determination by the commission, the 
 facilities shall remain in place and service to the public shall 
 be maintained by the owner.  However, the electric utility being 
 displaced, serving the annexed area, shall not extend service to 
 any additional points of delivery within the annexed area if the 
 commission, after notice and hearing, with due consideration of 
 any unnecessary duplication of facilities, shall determine that 
 the extension is not in the public interest.  

    (d) When property of an electric utility located within an 
 area annexed to a municipality which owns and operates an 
 electric utility is proposed to be acquired by the municipality, 
 ratification by the electors is not required.  

    (e) When property of an electric utility located within the 
 existing corporate boundaries of a municipality that currently 
 operates a municipal electric utility is proposed to be included 
 within the service territory of the municipal electric utility, 
 ratification by the electors is not required. 

    HIST: 1974 c 429 s 44; 1983 c 301 s 173 

     216B.45 Municipal purchase of public utility. 

    Any public utility operating in a municipality under a 
 license, permit, right or franchise shall be deemed to have 
 consented to the purchase by the municipality, for just 
 compensation, of its property operated in the municipality under 
 such license, permit, right or franchise.  The municipality, 
 subject to the provisions of Laws 1974, chapter 429, may 
 purchase the property upon notice to the public utility as 
 herein provided.  Whenever the commission is notified by the 
 municipality or the public utility affected that the 
 municipality has, pursuant to law, determined to purchase the 
 property of the public utility, and that the parties to the 
 purchase and sale have been unable to agree on the amount to be 
 paid and received therefor, the commission shall set a time and 
 place for a public hearing, after not less than 30 days' notice 
 to the parties, upon the matter of just compensation or the 
 matter of the property to be purchased.  Within a reasonable 
 time the commission shall, by order, determine the just 
 compensation for the property to be purchased by the 
 municipality.  In determining just compensation, the commission 
 shall consider the original cost of the property less 
 depreciation, loss of revenue to the utility, expenses resulting 
 from integration of facilities and other appropriate factors.  
 The order of the commission may be reviewed as provided in 
 section 216B.52.  Commission expenses arising out of the 
 exercise of its jurisdiction under this section shall be 
 assessed to the municipality. For purposes of this section, a 
 public utility shall include a cooperative electric association. 

    HIST: 1974 c 429 s 45; 1978 c 795 s 7 

     216B.46 Municipal acquisition procedures; notice; 
  election.  

    Any municipality which desires to acquire the property of a 
 public utility as authorized under the provisions of section 
 216B.45 may determine to do so by resolution of the governing 
 body of the municipality taken after a public hearing of which 
 at least 30 days' published notice shall be given as determined 
 by the governing body.  The determination shall become effective 
 when ratified by a majority of the qualified electors voting on 
 the question at a special election to be held for that purpose, 
 not less than 60 nor more than 120 days after the resolution of 
 the governing body of the municipality.  

    HIST: 1974 c 429 s 46 

     216B.465 Voter ratification of municipal purchase, 
  limited application. 

    The provisions of sections 216B.45 and 216B.46 apply only 
 to the purchase of public utility property by a municipality 
 that, prior to the time of the purchase, did not operate a 
 municipal utility providing the type of utility service 
 delivered by the utility property being purchased.  

    In cases where the municipality operates, prior to the 
 purchase of public utility property, a municipal utility 
 providing the type of utility service delivered by the utility 
 property being purchased, the provisions of section 216B.44 
 apply and voter ratification is not required. 

    HIST: 1983 c 301 s 174 

     216B.47 Acquisition by eminent domain. 

    Nothing in this chapter may be construed to preclude a 
 municipality from acquiring the property of a public utility by 
 eminent domain proceedings; provided that damages to be paid in 
 eminent domain proceedings must include the original cost of the 
 property less depreciation, loss of revenue to the utility, 
 expenses resulting from integration of facilities, and other 
 appropriate factors.  A municipality seeking to acquire the 
 property of a public utility in eminent domain proceedings may 
 not acquire the right to furnish electric service during the 
 pendency of the proceedings through the use of section 117.042 
 but may petition the commission under section 216B.44 for 
 service rights.  For purposes of this section, a public utility 
 includes a cooperative electric association. 

    HIST: 1974 c 429 s 47; 1978 c 795 s 8; 1994 c 610 s 1 

FINANCIAL ACTIVITIES AND BUSINESS PRACTICES

     216B.48 Relations with affiliated interest. 

    Subdivision 1.    Definition of affiliated interests.  
 "Affiliated interests" with a public utility means the following:

    (1) every corporation and person owning or holding directly 
 or indirectly five percent or more of the voting securities of 
 such public utility; 

    (2) every corporation and person in any chain of successive 
 ownership of five percent or more of voting securities; 

    (3) every corporation five percent or more of whose voting 
 securities is owned by any person or corporation owning five 
 percent or more of the voting securities of such public utility 
 or by any person or corporation in any such chain of successive 
 ownership of five percent or more of voting securities; 

    (4) every person who is an officer or director of such 
 public utility or of any corporation in any chain of successive 
 ownership of five percent or more of voting securities; 

    (5) every corporation operating a public utility or a 
 servicing organization for furnishing supervisory, construction, 
 engineering, accounting, legal and similar services to 
 utilities, which has one or more officers or one or more 
 directors in common with the public utility, and every other 
 corporation which has directors in common with the public 
 utility where the number of the directors is more than one-third 
 of the total number of the utility's directors; 

    (6) every corporation or person which the commission may 
 determine as a matter of fact after investigation and hearing is 
 actually exercising any substantial influence over the policies 
 and actions of the public utility even though the influence is 
 not based upon stockholding, stockholders, directors or officers 
 to the extent specified in this section; 

    (7) every person or corporation who or which the commission 
 may determine as a matter of fact after investigation and 
 hearing is actually exercising substantial influence over the 
 policies and actions of the public utility in conjunction with 
 one or more other corporations or persons with which or whom 
 they are related by ownership or blood relationship or by action 
 in concert that together they are affiliated with such public 
 utility within the meaning of this section even though no one of 
 them alone is so affiliated; 

    (8) every subsidiary of a public utility; 

    (9) every part of a corporation in which an operating 
 division is a public utility. 

    Subd. 2.    Construing the term "person".  The term 
 "person" as used in subdivision 1 shall not be construed to 
 exclude trustees, lessees, holders of beneficial equitable 
 interest, voluntary associations, receivers and partnerships. 

    Subd. 3.    Contract between utility and affiliated 
 interest.  No contract or arrangement, including any general 
 or continuing arrangement, providing for the furnishing of 
 management, supervisory, construction, engineering, accounting, 
 legal, financial or similar services, and no contract or 
 arrangement for the purchase, sale, lease or exchange of any 
 property, right, or thing, or for the furnishing of any service, 
 property, right, or thing, other than those above enumerated, 
 made or entered into after January 1, 1975 between a public 
 utility and any affiliated interest as defined in subdivision 1, 
 clauses (1) to (8), or any arrangement between a public utility 
 and an affiliated interest as defined in subdivision 1, clause 
 (9), made or entered into after August 1, 1993, is valid or 
 effective unless and until the contract or arrangement has 
 received the written approval of the commission.  Regular 
 recurring transactions under a general or continuing arrangement 
 that has been approved by the commission are valid if they are 
 conducted in accordance with the approved terms and conditions.  
 Every public utility shall file with the commission a verified 
 copy of the contract or arrangement, or a verified summary of 
 the unwritten contract or arrangement, and also of all the 
 contracts and arrangements, whether written or unwritten, 
 entered into prior to January 1, 1975, or, for the purposes of 
 subdivision 1, clause (9), prior to August 1, 1993, and in force 
 and effect at that time.  The commission shall approve the 
 contract or arrangement made or entered into after that date 
 only if it clearly appears and is established upon investigation 
 that it is reasonable and consistent with the public interest.  
 No contract or arrangement may receive the commission's approval 
 unless satisfactory proof is submitted to the commission of the 
 cost to the affiliated interest of rendering the services or of 
 furnishing the property or service to each public utility.  
 Proof is satisfactory only if it includes the original or 
 verified copies of the relevant cost records and other relevant 
 accounts of the affiliated interest, or an abstract or summary 
 as the commission may deem adequate, properly identified and 
 duly authenticated, provided, however, that the commission may, 
 where reasonable, approve or disapprove the contracts or 
 arrangements without the submission of cost records or 
 accounts.  The burden of proof to establish the reasonableness 
 of the contract or arrangement is on the public utility. 

    Subd. 4.    Contract not exceeding $50,000.  The 
 provisions of this section requiring the written approval of the 
 commission shall not apply to transactions with affiliated 
 interests where the amount of consideration involved is not in 
 excess of $50,000 or five percent of the capital equity of the 
 utility whichever is smaller; provided, however, that regularly 
 recurring payments under a general or continuing arrangement 
 which aggregate a greater annual amount shall not be broken down 
 into a series of transactions to come within the aforesaid 
 exemption.  Such transactions shall be valid or effective 
 without commission approval under this section.  However, in any 
 proceeding involving the rates or practices of the public 
 utility, the commission may exclude from the accounts of such 
 public utility any payment or compensation made pursuant to the 
 transaction unless the public utility shall establish the 
 reasonableness of the payment or compensation. 

    Subd. 5.    Applicability to determining rates and costs. 
  In any proceeding, whether upon the commission's own motion 
 or upon application or complaint, involving the rates or 
 practices of any public utility, the commission may exclude from 
 the accounts of the public utility any payment or compensation 
 to an affiliated interest for any services rendered or property 
 or service furnished, as above described, under existing 
 contracts or arrangements with the affiliated interest unless 
 the public utility shall establish the reasonableness of the 
 payment or compensation. 

    Subd. 6.    Commission retains continuing authority over 
 contract.  The commission shall have continuing supervisory 
 control over the terms and conditions of the contracts and 
 arrangements as are herein described so far as necessary to 
 protect and promote the public interest.  The commission shall 
 have the same jurisdiction over the modifications or amendment 
 of contracts or arrangements as are herein described as it has 
 over such original contracts or arrangements.  The fact that the 
 commission shall have approved entry into such contracts or 
 arrangements as described herein shall not preclude disallowance 
 or disapproval of payments made pursuant thereto, if upon actual 
 experience under such contract or arrangement it appears that 
 the payments provided for or made were or are unreasonable. 

    Subd. 7.  Repealed, 1978 c 795 s 10 

    HIST: 1974 c 429 s 48; 1993 c 327 s 11-13 

     216B.49 Securities; public financing. 

    Subdivision 1.    Definition of security.  For the 
 purpose of this section, "security" means any note; stock; 
 treasury stock; bond; debenture; evidence of indebtedness; 
 assumption of any obligation or liability as a guarantor, 
 endorser, surety, or otherwise in the security of another 
 person; certificate of interest or participation in any profit 
 sharing agreement; collateral trust certificate; preorganization 
 certificate or subscription; transferable shares; investment 
 contract; voting trust certificate; certificate of deposit for a 
 security; certificate of interest or participation in an oil, 
 gas or mining right, title or lease or in payments out of 
 production under an oil, gas, or mining right, title or lease; 
 or, in general, any interest or instrument commonly known as a 
 security, or any certificate for, receipt for guarantee of, or 
 warrant or right to subscribe to or purchase, any of the 
 foregoing. 

    Subd. 2. Repealed, 1998 c 350 s 6 

    Subd. 3.    Commission approval required.  It shall be 
 unlawful for any public utility organized under the laws of this 
 state to offer or sell any security or, if organized under the 
 laws of any other state or foreign country, to subject property 
 in this state to an encumbrance for the purpose of securing the 
 payment of any indebtedness unless the security issuance of the 
 public utility shall first be approved by the commission.  
 Approval by the commission shall be by formal written order. 

    Subd. 4.    Considerations for approval for public 
 financing.  Upon the application of a public utility for 
 approval of its security issuance and prior to the issuance of 
 any security or the encumbrance of any property for the purpose 
 of securing the payment of any indebtedness, the commission may 
 make such inquiry or investigation, hold such hearings, and 
 examine such witnesses, books, papers, documents, or contracts, 
 as in its discretion it may deem necessary.  Prior to approval 
 the commission shall ascertain that the amount of securities of 
 each class which any public utility may issue shall bear a 
 reasonable proportion to each other and to the value of the 
 property, due consideration being given to the nature of the 
 business of the public utility, its credit and prospects, the 
 possibility that the value of the property may change from time 
 to time, the effect which the issue shall have upon the 
 management and operation of the public utility, and other 
 considerations which the commission as a matter of fact shall 
 find to be relevant.  If the commission shall find that the 
 proposed security issuance is reasonable and proper and in the 
 public interest and will not be detrimental to the interests of 
 the consumers and patrons affected thereby, the commission shall 
 by written order grant its permission for the proposed public 
 financing. 

    Subd. 5.    Applicability of other law; preemption.  The 
 requirements of this section are in addition to any other 
 requirements of law and, specifically, the requirements of 
 chapter 80A, and the rules promulgated pursuant thereto.  
 Notwithstanding any charter or ordinance to the contrary, no 
 city shall have jurisdiction over the securities or indebtedness 
 of a public utility. 

    Subd. 6.  Repealed, 1978 c 795 s 10 

    Subd. 7.    Investment in municipal industrial 
 development.  When a public utility is engaged in a project 
 pursuant to sections 469.152 to 469.165, notwithstanding the 
 provisions of section 469.155, funds or accounts established in 
 connection with the project or payment of bonds issued for the 
 project may also be invested in investments of the type 
 authorized in section 11A.24, subdivisions 1 to 5.  

    HIST: 1974 c 429 s 49; 1982 c 378 s 2; 1983 c 167 s 1; 1985 c 
 248 s 70; 1987 c 291 s 203; 1998 c 350 s 2,3 

     216B.50 Restrictions on property transfer and merger. 

    Subdivision 1.    Commission approval required.  No 
 public utility shall sell, acquire, lease, or rent any plant as 
 an operating unit or system in this state for a total 
 consideration in excess of $100,000, or merge or consolidate 
 with another public utility operating in this state, without 
 first being authorized so to do by the commission.  Upon the 
 filing of an application for the approval and consent of the 
 commission thereto the commission shall investigate, with or 
 without public hearing, and in case of a public hearing, upon 
 such notice as the commission may require, and if it shall find 
 that the proposed action is consistent with the public interest 
 it shall give its consent and approval by order in writing.  In 
 reaching its determination the commission shall take into 
 consideration the reasonable value of the property, plant, or 
 securities to be acquired or disposed of, or merged and 
 consolidated.  The provisions of this section shall not be 
 construed as applicable to the purchase of units of property for 
 replacement or to the addition to the plant of the public 
 utility by construction. 

    Subd. 2.  Repealed, 1978 c 795 s 10 

    Subd. 3.    Exempt from other law.  Mergers and 
 consolidations as enumerated in subdivision 1 hereof shall be 
 exempt from the provisions of chapter 80B. 

    HIST: 1974 c 429 s 50 

     216B.51 Stock purchase. 

    Subdivision 1.    Stock of another utility.  No public 
 utility shall purchase voting stock in another public utility 
 doing business in Minnesota without first having made 
 application to and received the consent of the commission in 
 writing or by order. 

    Subd. 2.  Repealed, 1978 c 795 s 10 

    Subd. 3.    Exempt from other law.  Mergers and 
 consolidations as enumerated in subdivision 1 hereof shall be 
 exempt from the provisions of chapter 80B. 

    HIST: 1974 c 429 s 51 

VIOLATIONS, PENALTIES, JUDICIAL CONSIDERATIONS

     216B.52 Appeal. 

    Subdivision 1.    Appeal under Administrative Procedure 
 Act.  Any party to a proceeding before the commission or any 
 other person, aggrieved by a decision and order and directly 
 affected by it, may appeal from the decision and order of the 
 commission in accordance with chapter 14.  

    Subd. 2. Repealed, 1983 c 247 s 219 

    Subd. 3. Repealed, 1983 c 247 s 219 

    Subd. 4. Repealed, 1983 c 247 s 219 

    Subd. 5. Repealed, 1983 c 247 s 219 

    HIST: 1974 c 429 s 52; 1978 c 674 s 60; 1983 c 247 s 96 

     216B.53 Suspension of commission order. 

    The pendency of proceedings on appeal shall not of itself 
 stay or suspend the operation of the order of the commission 
 unless the commission so orders, but during the pendency of the 
 proceedings the court in its discretion may stay or suspend, in 
 whole or in part, the operation of the commission's order on 
 terms it deems just, and in accordance with the practice of 
 courts exercising equity jurisdiction. No stay shall be granted 
 by the court without notice to the parties and opportunity to be 
 heard.  Any party shall have the right to secure from the court 
 in which an appeal of an order of the commission is sought an 
 order suspending or staying the operation of an order of the 
 commission, pending an appeal of the order, but no commission 
 order relating to rates or rules shall be stayed or suspended 
 absent a finding that great or irreparable damage would 
 otherwise result to the party seeking the stay or suspension, 
 and any order staying or suspending a commission order shall 
 specify the nature of the damage. 

    In case the order of the commission is stayed or suspended, 
 the court shall require a bond with good and sufficient surety, 
 conditioned that the public utility petitioning for review shall 
 answer for all damages caused by the delay in enforcing the 
 order of the commission, and for all compensation for whatever 
 sums for transmission or service any person shall be compelled 
 to pay pending review proceedings in excess of the sum the 
 person or corporation would have been compelled to pay had the 
 commission's order not been stayed or suspended.  The court, 
 may, in addition or in lieu of the bond require other further 
 security for the payment of such excess damages or charges it 
 deems proper. 

    HIST: 1974 c 429 s 53; 1977 c 364 s 6 

     216B.54 Legal action against violation. 

    Whenever the commission or department shall be of the 
 opinion that any person or public utility is failing or omitting 
 or is about to fail or omit to do anything required of it by 
 Laws 1974, chapter 429 or by any order of the commission, or is 
 doing anything or about to do anything, or permitting anything 
 or about to permit anything to be done, contrary to or in 
 violation of Laws 1974, chapter 429 or of any order of the 
 commission, it shall refer the matter to the attorney general 
 who shall take appropriate legal action. 

    HIST: 1974 c 429 s 54; 1980 c 614 s 115 

  216B.55 Repealed, 1983 c 247 s 219 

     216B.56 Burden of proof.  

    In all proceedings before the commission in which the 
 modification or vacation of any order of the commission is 
 sought, the burden of proof shall be on the person seeking such 
 modification or vacation.  

    HIST: 1974 c 429 s 56 

     216B.57 Penalty for violation of act. 

    Any person who knowingly and intentionally violates any 
 provision of Laws 1974, chapter 429, or who knowingly and 
 intentionally fails, omits, or neglects to obey, observe, or 
 comply with any lawful order, or any part or provision thereof, 
 of the commission is subject to a penalty of not less than $100 
 nor more than $1,000 for each violation. 

    HIST: 1974 c 429 s 57 

     216B.58 Penalties; construing act, omission, and failure.

    In construing and enforcing the provision of Laws 1974, 
 chapter 429 relating to penalties, the act, omission, or failure 
 of any officer, agent or employee of any person acting within 
 the scope of official duties of employment shall in every case 
 be deemed to be also the act, omission, or failure of that 
 person.  

    HIST: 1974 c 429 s 58; 1986 c 444 

     216B.59 Continuing violation.  

    Every violation of the provisions of Laws 1974, chapter 429 
 or of any lawful order of the commission, or any part or portion 
 thereof by any person, is a separate and distinct offense, and 
 in case of a continuing violation after a first conviction 
 thereof each day's continuance thereof shall be deemed to be a 
 separate and distinct offense.  

    HIST: 1974 c 429 s 59 

     216B.60 Penalties cumulative.  

    All penalties accruing under Laws 1974, chapter 429 shall 
 be cumulative, and a suit for the recovery of one penalty shall 
 not be a bar to or affect the recovery of any other penalty or 
 forfeiture or be a bar to any criminal prosecution against any 
 public utility or any officer, director, agent, or employee 
 thereof or any person.  

    HIST: 1974 c 429 s 60 

     216B.61 Actions to recover penalties.  

    Actions to recover penalties under Laws 1974, chapter 429 
 shall be brought in the name of the state of Minnesota in the 
 district court of Ramsey County.  

    HIST: 1974 c 429 s 61 

ASSESSMENTS

     216B.62 Regulatory expenses. 

    Subdivision 1. Repealed, 1980 c 614 s 191 

    Subd. 2.    Assessing specific utility.  Whenever the 
 commission or department, in a proceeding upon its own motion, 
 on complaint, or upon an application to it, shall deem it 
 necessary, in order to carry out the duties imposed under this 
 chapter and section 216A.085, to investigate the books, 
 accounts, practices, and activities of, or make appraisals of 
 the property of any public utility, or to render any engineering 
 or accounting services to any public utility, or to intervene 
 before an energy regulatory agency, the public utility shall pay 
 the expenses reasonably attributable to the investigation, 
 appraisal, service, or intervention.  The commission and 
 department shall ascertain the expenses, and the department 
 shall render a bill therefor to the public utility, either at 
 the conclusion of the investigation, appraisal, or services, or 
 from time to time during its progress, which bill shall 
 constitute notice of the assessment and a demand for payment.  
 The amount of the bills so rendered by the department shall be 
 paid by the public utility into the state treasury within 30 
 days from the date of rendition.  The total amount, in any one 
 calendar year, for which any public utility shall become liable, 
 by reason of costs incurred by the commission within that 
 calendar year, shall not exceed two-fifths of one percent of the 
 gross operating revenue from retail sales of gas, or electric 
 service by the public utility within the state in the last 
 preceding calendar year.  Where, pursuant to this subdivision, 
 costs are incurred within any calendar year which are in excess 
 of two-fifths of one percent of the gross operating revenues, 
 the excess costs shall not be chargeable as part of the 
 remainder under subdivision 3, but shall be paid out of the 
 general appropriation to the department and commission.  In the 
 case of public utilities offering more than one public utility 
 service only the gross operating revenues from the public 
 utility service in connection with which the investigation is 
 being conducted shall be considered when determining this 
 limitation. 

    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 (1) 
 public utilities under section 216A.085, sections 216B.01 to 
 216B.67, other than amounts chargeable to public utilities under 
 subdivision 2 or 6, and alternative energy engineering activity 
 under section 216C.261.  The remainder, except the amount 
 assessed against cooperatives and municipalities for alternative 
 energy engineering activity under subdivision 5, 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 mailed 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. 

    Subd. 4.    Objections.  Within 30 days after the date 
 of the mailing of any bill as provided by subdivisions 2 and 3, 
 the public utility against which the bill has been rendered may 
 file with the commission objections setting out the grounds upon 
 which it is claimed the bill is excessive, erroneous, unlawful 
 or invalid.  The commission shall within 60 days hold a hearing 
 and issue an order in accordance with its findings.  The order 
 shall be appealable in the same manner as other final orders of 
 the commission. 

    Subd. 5.    Assessing cooperatives and municipals.  The 
 commission and department may charge cooperative electric 
 associations and municipal electric utilities their 
 proportionate share of the expenses incurred in the review and 
 disposition of resource plans, adjudication of service area 
 disputes, proceedings under section 216B.2425, and the costs 
 incurred in the adjudication of complaints over service 
 standards, practices, and rates.  Cooperative electric 
 associations electing to become subject to rate regulation by 
 the commission pursuant to section 216B.026, subdivision 4, are 
 also subject to this section.  Neither a cooperative electric 
 association nor a municipal electric utility is liable for costs 
 and expenses in a calendar year in excess of the limitation on 
 costs that may be assessed against public utilities under 
 subdivision 2.  A cooperative electric association or municipal 
 electric utility may object to and appeal bills of the 
 commission and department as provided in subdivision 4.  

    The department shall assess cooperatives and municipalities 
 for the costs of alternative energy engineering activities under 
 section 216C.261.  Each cooperative and municipality shall be 
 assessed in proportion that its gross operating revenues for the 
 sale of gas and electric service within the state for the last 
 calendar year bears to the total of those revenues for all 
 public utilities, cooperatives, and municipalities. 

    Subd. 6.    Administrative hearing costs.  Any amounts 
 billed to the commission or the department by the Office of 
 Administrative Hearings for public utility contested case 
 hearings shall be assessed by the commission or the department 
 against the public utility.  The assessment shall be paid into 
 the state treasury within 30 days after a bill, which 
 constitutes notice of the assessment and demand for payment of 
 it, has been mailed to the public utility.  Money received shall 
 be credited to a special account and is appropriated to the 
 commission or the department for payment to the Office of 
 Administrative Hearings.  

    HIST: 1974 c 429 s 62 subds 1-4; 1978 c 674 s 60; 1978 c 795 s 
 9; 1980 c 614 s 116; 1981 c 357 s 71,72; 1983 c 289 s 105,106; 
 1990 c 598 s 1; 1991 c 234 s 2; 1992 c 478 s 4; 1993 c 356 s 4; 
 1993 c 369 s 66,67; 2001 c 212 art 7 s 34 

     216B.63 Interest on assessment.  

    The amounts assessed against any public utility not paid 
 after 30 days after the mailing of a notice advising the public 
 utility of the amount assessed against it, shall draw interest 
 at the rate of six percent per annum, and upon failure to pay 
 the assessment the attorney general shall proceed by action in 
 the name of the state against the public utility to collect the 
 amount due, together with interest and the cost of the suit.  

    HIST: 1974 c 429 s 63 

MISCELLANEOUS

     216B.64 Attorney general's responsibilities. 

    The attorney general of the state shall, upon request of 
 the commission or department, represent and appear for the 
 commission or department in all actions and proceedings 
 involving any question under Laws 1974, chapter 429, and shall 
 aid in any investigation or hearing had under the provisions of 
 Laws 1974, chapter 429.  The attorney general shall perform all 
 duties and services in connection with Laws 1974, chapter 429 
 and the enforcement thereof as the commission or department may 
 require.  The attorney general shall also bring all actions to 
 collect penalties herein provided. 

    HIST: 1974 c 429 s 64; 1980 c 614 s 117; 1986 c 444 

     216B.65 Department to employ necessary staff.  

    The department may employ experts, engineers, 
 statisticians, accountants, inspectors, clerks, hearing 
 examiners who may be attorneys and employees it deems necessary 
 to carry out the provisions of Laws 1974, chapter 429.  

    HIST: 1974 c 429 s 67 

     216B.66 Construction.  

    Laws 1974, chapter 429 is complete in itself and other 
 Minnesota statutes are not to be construed as applicable to the 
 supervision or regulation of public utilities by the 
 commission.  All acts and parts of acts in conflict with Laws 
 1974, chapter 429 are repealed insofar as they pertain to the 
 regulation of public utilities as defined herein.  

    HIST: 1974 c 429 s 69 

     216B.67 Citation.  

    Laws 1974, chapter 429 may be cited as the Minnesota Public 
 Utilities Act.  

    HIST: 1974 c 429 s 71 

     216B.79 Preventative maintenance. 

    The commission may order public utilities to make adequate 
 infrastructure investments and undertake sufficient preventative 
 maintenance with regard to generation, transmission, and 
 distribution facilities.  

    HIST: 2001 c 212 art 3 s 2 

     216B.81 Standards for distribution utilities. 

    Subdivision 1.    Standards.  (a) The commission and 
 each cooperative electric association and municipal utility 
 shall adopt standards for safety, reliability, and service 
 quality for distribution utilities.  Standards for cooperative 
 electric associations and municipal utilities should be as 
 consistent as possible with the commission standards. 

    (b) Reliability standards must be based on the system 
 average interruption frequency index, system average 
 interruption duration index, and customer average interruption 
 duration index measurement indices.  Service quality standards 
 must specify, if technically and administratively feasible: 

    (1) average call center response time; 

    (2) customer disconnection rate; 

    (3) meter-reading frequency; 

    (4) complaint resolution response time; 

    (5) service extension request response time; 

    (6) recording of service and circuit interrupter data; 

    (7) summary reporting; 

    (8) historical reliability performance reporting; 

    (9) notices of interruptions of bulk power supply 
 facilities and other interruptions of power; and 

    (10) customer complaints. 

    (c) Minimum performance standards developed under this 
 section must treat similarly situated distribution systems 
 similarly and recognize differing characteristics of system 
 design and hardware. 

    (d) Electric distribution utilities shall comply with all 
 applicable governmental and industry standards required for the 
 safety, design, construction, and operation of electric 
 distribution facilities, including section 326.243. 

    Subd. 2.    Definitions.  For the purpose of this 
 section, the terms defined in this subdivision have the meanings 
 given them.  

    (a) The "system average interruption frequency index" is 
 the average number of interruptions per customer per year.  It 
 is determined by dividing the total annual number of customer 
 interruptions by the average number of customers served during 
 the year.  

    (b) The "system average interruption duration index" is the 
 average customer-minutes of interruption per customer.  It is 
 determined by dividing the annual sum of customer-minutes of 
 interruption by the average number of customers served during 
 the year.  

    (c) The "customer average interruption duration index" is 
 the average customer-minutes of interruption per customer 
 interruption.  It approximates the average length of time 
 required to complete service restoration.  It is determined by 
 dividing the annual sum of all customer-minutes of interruption 
 durations by the annual number of customer interruptions.  

    HIST: 2001 c 212 art 6 s 1