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
, and to satisfy the renewable energy
objectives set forth in section
, including reasonable investments and expenditures
(1) transmit the electricity generated from sources developed under those sections that is
ultimately used to provide service to the utility's retail customers, including studies necessary to
identify new transmission facilities needed to transmit electricity to Minnesota retail customers
from generating facilities constructed to satisfy the renewable energy objectives, provided that the
costs of the studies have not been recovered previously under existing tariffs and the utility has
filed an application for a certificate of need or for certification as a priority project under section
for the new transmission facilities identified in the studies; or
(2) develop renewable energy sources from the account required in section
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
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. 2a. Cost recovery for owned renewable facilities.
(a) A utility may petition the
commission to approve a rate schedule that provides for the automatic adjustment of charges to
recover prudently incurred investments, expenses, or costs associated with facilities constructed,
owned, or operated by a utility to satisfy the requirements of section
, provided those
facilities were previously approved by the commission under section
The commission may approve, or approve as modified, a rate schedule that:
(1) allows a utility to recover directly from customers on a timely basis the costs of
qualifying renewable energy projects, including:
(i) return on investment;
(iii) ongoing operation and maintenance costs;
(iv) taxes; and
(v) costs of transmission and other ancillary expenses directly allocable to transmitting
electricity generated from a project meeting the specifications of this paragraph;
(2) provides a current return on construction work in progress, provided that recovery of
these costs from Minnesota ratepayers is not sought through any other mechanism;
(3) allows recovery of other expenses incurred that are directly related to a renewable energy
project, provided that the utility demonstrates to the commission's satisfaction that the expenses
improve project economics, ensure project implementation, or facilitate coordination with the
development of transmission necessary to transport energy produced by the project to market;
(4) allocates recoverable costs appropriately between wholesale and retail customers;
(5) terminates recovery when costs have been fully recovered or have otherwise been
reflected in a utility's rates.
(b) A petition filed under this subdivision must include:
(1) a description of the facilities for which costs are to be recovered;
(2) an implementation schedule for the facilities;
(3) the utility's costs for the facilities;
(4) a description of the utility's efforts to ensure that costs of the facilities are reasonable
and were prudently incurred; and
(5) a description of the benefits of the project in promoting the development of renewable
energy in a manner consistent with this chapter.
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.
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.
History: 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; 2005 c 97 art 2 s 2; 2007 c 136 art 4 s 8