2007 Minnesota Statutes

CHAPTER 216H. GREENHOUSE GAS EMISSIONS

216H.01 DEFINITIONS.
    Subdivision 1. Scope. For the purpose of this chapter, the terms defined in this section have
the meanings given them.
    Subd. 2. Statewide greenhouse gas emissions. "Statewide greenhouse gas emissions"
include emissions of carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride emitted by anthropogenic sources within the state and
from the generation of electricity imported from outside the state and consumed in Minnesota.
Carbon dioxide that is injected into geological formations to prevent its release to the atmosphere
in compliance with applicable laws, and carbon dioxide associated with the combustion of
fuels other than coal, petroleum, and natural gas are not counted as contributing to statewide
greenhouse gas emissions.
History: 2007 c 136 art 5 s 1

216H.02 GREENHOUSE GAS EMISSIONS CONTROL.
    Subdivision 1. Greenhouse gas emissions reduction goal. It is the goal of the state to
reduce statewide greenhouse gas emissions across all sectors producing those emissions to a level
at least 15 percent below 2005 levels by 2015, to a level at least 30 percent below 2005 levels by
2025, and to a level at least 80 percent below 2005 levels by 2050. The levels shall be reviewed
based on the climate change action plan study.
    Subd. 2. Climate change action plan. By February 1, 2008, the commissioner of commerce,
in consultation with the commissioners of the Pollution Control Agency, the Housing Finance
Agency, and the Departments of Natural Resources, Agriculture, Employment and Economic
Development, and Transportation, and the chair of the Metropolitan Council, shall submit to the
legislature a climate change action plan that meets the requirements of this section.
    Subd. 3. Stakeholder process. The plan required by subdivision 2 must be developed
through a structured, broadly inclusive stakeholder-based review of potential policies and
initiatives that will reduce statewide greenhouse gas emissions from a broad range of sources and
activities. The commissioner shall engage a nationally recognized independent expert entity to
conduct the stakeholder process. The report of the stakeholder process must form the basis for
the plan submitted by the commissioner under subdivision 2.
    Subd. 4. General elements of the plan. The plan must:
    (1) estimate 1990 and 2005 greenhouse gas emissions in the state and make projections of
emissions in 2015, 2025, and 2050;
    (2) identify, evaluate, and integrate a broad range of statewide greenhouse gas reduction
options for all emission sectors in the state;
    (3) assess the costs, benefits, and feasibility of implementing the options;
    (4) recommend an integrated set of reduction options and strategies for implementing the
options that will achieve the goals in subdivision 1, including analysis of the associated costs
and benefits to Minnesotans;
    (5) estimate the statewide greenhouse gas emissions reductions anticipated from
implementation of existing state policies;
    (6) recommend a system to require the reporting of statewide greenhouse gas emissions,
identifying which facilities must report, and how emission estimates should be made; and
    (7) evaluate the option of exempting a project from the prohibitions contained in section
216H.03, subdivision 3, if the project contributes a specified fee per ton of carbon dioxide
emissions emitted annually by the project, the proceeds of which would be used to fund
permanent, quantifiable, verifiable, and enforceable reductions in greenhouse gas emissions that
would not otherwise have occurred.
    Subd. 5. Specific plan requirements. (a) The plan must evaluate and recommend interim
goals as steps to achieve the goals in subdivision 1.
    (b) The plan must determine the feasibility, assess the costs and benefits, and recommend
how the state could adopt a regulatory system that imposes a cap on the aggregate air pollutant
emissions of a group of sources, requires those subject to the cap to own an allowance for each
ton of the air pollutant emitted, and allows for market-based trading of those allowances. The
evaluation must contain an analysis of the state implementing a cap and trade system alone,
in coordination with other states, and as a requirement of federal law applying to all states.
The plan must recommend the parameters of a cap and trade system that includes a cap that
would prevent significant increases in greenhouse gas emissions above current levels with a
schedule for lowering the cap periodically to achieve the goals in subdivision 1 and interim
goals recommended under paragraph (a). The plan must consider cost savings and cost increases
on energy consumers in the state.
    (c) The plan must include recommendations for improvements in the emissions inventory
and recommend whether the state should require greenhouse gas emissions reporting from specific
sources and, if so, which sources should be required to report. The plan must also evaluate options
for an emissions registry after reviewing registries in other states and recommend a registry that
will insure the greatest opportunity for Minnesota entities to obtain marketable credits.
    Subd. 6. Regional activities. The state must, to the extent possible, with other states in
the Midwest region, develop and implement a regional approach to reducing greenhouse gas
emissions from activities in the region, including consulting on a regional cap and trade system.
The commissioner of commerce shall coordinate Minnesota's regional activities under this
subdivision and report to the legislative committees in the senate and house of representatives with
jurisdiction over energy and environmental policy by February 1, 2008, and February 1, 2009, on
the progress made and recommendations for further action. The commissioner of commerce, as
part of the activities required under this subdivision, must meet with responsible officials from
bordering states, other states in the Midwest region, and states in other regions of the country to:
(1) determine whether other states are interested in establishing and cooperating in a
multistate or regional greenhouse gas cap and trade allowance program;
(2) identify and prepare an inventory of greenhouse gas reduction resources available to
support a multistate or regional greenhouse gas cap and trade allowance program;
(3) seek cooperation on a regional inventory of greenhouse gas emission sources; and
(4) prepare an inventory of available renewable energy resources within a state or region.
The commissioner of commerce must develop a definition of scope of this regional activity that is
in addition to the components described in clauses (1) to (4). The commissioner must report on
the additional scoping definitions to the chairs and ranking minority members of the legislative
committees with jurisdiction over energy and environmental finance and policy on or before the
commencement of the 2008 regular legislative session.
History: 2007 c 136 art 5 s 2

216H.03 FAILURE TO ADOPT GREENHOUSE GAS CONTROL PLAN.
    Subdivision 1. Definition; new large energy facility. For the purpose of this section, "new
large energy facility" means a large energy facility, as defined in section 216B.2421, subdivision
2 , clause (1), that is not in operation as of January 1, 2007, but does not include a facility that (1)
uses natural gas as a primary fuel, (2) is designed to provide peaking, intermediate, emergency
backup, or contingency services, (3) uses a simple cycle or combined cycle turbine technology,
and (4) is capable of achieving full load operations within 45 minutes of startup for a simple cycle
facility, or is capable of achieving minimum load operations within 185 minutes of startup for
a combined cycle facility.
    Subd. 2. Definition; statewide power sector carbon dioxide emissions. For the purpose of
this section, "statewide power sector carbon dioxide emissions" means the total annual emissions
of carbon dioxide from the generation of electricity within the state and all emissions of carbon
dioxide from the generation of electricity imported from outside the state and consumed in
Minnesota. Emissions of carbon dioxide associated with transmission and distribution line losses
are included in this definition. Carbon dioxide that is injected into geological formations to
prevent its release to the atmosphere in compliance with applicable laws, and emissions of carbon
dioxide associated with the combustion of biomass, as defined in section 216B.2411, subdivision
2 , paragraph (c), clauses (1) to (4), are not counted as contributing to statewide power sector
carbon dioxide emissions.
    Subd. 3. Long-term increased emissions from power plants prohibited. Unless preempted
by federal law, until a comprehensive and enforceable state law or rule pertaining to greenhouse
gases that directly limits and substantially reduces, over time, statewide power sector carbon
dioxide emissions is enacted and in effect, and except as allowed in subdivisions 4 to 7, on and
after August 1, 2009, no person shall:
    (1) construct within the state a new large energy facility that would contribute to statewide
power sector carbon dioxide emissions;
    (2) import or commit to import from outside the state power from a new large energy facility
that would contribute to statewide power sector carbon dioxide emissions; or
    (3) enter into a new long-term power purchase agreement that would increase statewide
power sector carbon dioxide emissions. For purposes of this section, a long-term power purchase
agreement means an agreement to purchase 50 megawatts of capacity or more for a term
exceeding five years.
    Subd. 4. Exception for facilities that offset emissions. (a) The prohibitions in subdivision 3
do not apply if the project proponent demonstrates to the Public Utilities Commission's satisfaction
that it will offset the new contribution to statewide power sector carbon dioxide emissions with a
carbon dioxide reduction project identified in paragraph (b) and in compliance with paragraph (c).
    (b) A project proponent may offset in an amount equal to or greater than the proposed new
contribution to statewide power sector carbon dioxide emissions in either, or a combination of
both, of the following ways:
    (1) by reducing an existing facility's contribution to statewide power sector carbon dioxide
emissions; or
    (2) by purchasing carbon dioxide allowances from a state or group of states that has a carbon
dioxide cap and trade system in place that produces verifiable emissions reductions.
    (c) The Public Utilities Commission shall not find that a proposed carbon dioxide reduction
project identified in paragraph (b) acceptably offsets a new contribution to statewide power sector
carbon dioxide emissions unless the proposed offsets are permanent, quantifiable, verifiable,
enforceable, and would not have otherwise occurred. This section does not exempt emissions that
have been offset under this subdivision and emissions exempted under subdivisions 5 to 7 from a
cap and trade system if adopted by the state.
    Subd. 5. Exception for new steel production facility. The prohibitions in subdivision 3
do not apply to increases in statewide power sector carbon dioxide emissions from a new steel
production project located in a taconite relief area that has filed an application for an air quality
permit from the Pollution Control Agency prior to January 1, 2007.
    Subd. 6. Exception for iron nugget production facility. The prohibitions in subdivision 3
do not apply to an iron nugget production facility that began construction prior to January 31,
2007, nor to associated mining activities and beneficiation facilities with a concentrate capacity of
up to three million tons annually. For the purposes of this subdivision, "iron nugget" means a
product with at least 90 percent iron content.
    Subd. 7. Other exemptions. The prohibitions in subdivision 3 do not apply to:
    (1) a new large energy facility under consideration by the Public Utilities Commission
pursuant to proposals or applications filed with the Public Utilities Commission before April 1,
2007, or to any power purchase agreement related to a facility described in this clause. The
exclusion of pending proposals and applications from the prohibitions in subdivision 3 does not
limit the applicability of any other law and is not an expression of legislative intent regarding
whether any pending proposal or application should be approved or denied;
    (2) a contract not subject to commission approval that was entered into prior to April 1, 2007,
to purchase power from a new large energy facility that was approved by a comparable authority
in another state prior to that date, for which municipal or public power district bonds have been
issued, and on which construction has begun; or
    (3) a new large energy facility or a power purchase agreement between a Minnesota utility
and a new large energy facility located outside Minnesota that the Public Utilities Commission
has determined is essential to ensure the long-term reliability of Minnesota's electric system, to
allow electric service for increased industrial demand, or to avoid placing a substantial financial
burden on Minnesota ratepayers. An order of the commission granting an exemption under this
clause is stayed until the June 1 following the next regular or annual session of the legislature that
begins after the date of the commission's final order.
    Subd. 8. Enforcement. Whenever the commission or the Department of Commerce
determines that any person is violating or about to violate this section, it may refer the matter to
the attorney general who shall take appropriate legal action. This section may be enforced by the
attorney general on the same basis as a law listed in section 8.31, subdivision 1, except that the
remedies provided by section 8.31, subdivision 3a, do not apply to a violation of this section.
History: 2007 c 136 art 5 s 3

216H.06 GREENHOUSE GAS EMISSIONS CONSIDERATION IN RESOURCE
PLANNING.
    By January 1, 2008, the Public Utilities Commission shall establish an estimate of the
likely range of costs of future carbon dioxide regulation on electricity generation. The estimate,
which may be made in a commission order, must be used in all electricity generation resource
acquisition proceedings. The estimates, and annual updates, must be made following informal
proceedings conducted by the commissioners of commerce and pollution control that allow
interested parties to submit comments.
History: 2007 c 136 art 5 s 4