2001 Minnesota Statutes

     216C.41 Renewable energy production incentive. 

    Subdivision 1.    Definitions.  (a) The definitions in 
 this subdivision apply to this section. 

    (b) "Qualified hydroelectric facility" means a 
 hydroelectric generating facility in this state that: 

    (1) is located at the site of a dam, if the dam was in 
 existence as of March 31, 1994; and 

    (2) begins generating electricity after July 1, 1994, or 
 generates electricity after substantial refurbishing of a 
 facility that begins after July 1, 2001. 

    (c) "Qualified wind energy conversion facility" means a 
 wind energy conversion system that: 

    (1) produces two megawatts or less of electricity as 
 measured by nameplate rating and begins generating electricity 
 after December 31, 1996, and before July 1, 1999; 

    (2) begins generating electricity after June 30, 1999, 
 produces two megawatts or less of electricity as measured by 
 nameplate rating, and is: 

    (i) located within one county and owned by a natural person 
 who owns the land where the facility is sited; 

    (ii) owned by a Minnesota small business as defined in 
 section 645.445; 

    (iii) owned by a nonprofit organization; or 

    (iv) owned by a tribal council if the facility is located 
 within the boundaries of the reservation; or 

    (3) begins generating electricity after June 30, 1999, 
 produces seven megawatts or less of electricity as measured by 
 nameplate rating, and: 

    (i) is owned by a cooperative organized under chapter 308A; 
 and 

    (ii) all shares and membership in the cooperative are held 
 by natural persons or estates, at least 51 percent of whom 
 reside in a county or contiguous to a county where the wind 
 energy production facilities of the cooperative are located. 

    (d) "Qualified on-farm biogas recovery facility" means an 
 anaerobic digester system that: 

    (1) is located at the site of an agricultural operation; 

    (2) is owned by a natural person who owns or rents the land 
 where the facility is located; and 

    (3) begins generating electricity after July 1, 2001.  

    (e) "Anaerobic digester system" means a system of 
 components that processes animal waste based on the absence of 
 oxygen and produces gas used to generate electricity. 

    Subd. 2.    Incentive payment; appropriation.  (a) 
 Incentive payments must be made according to this section to (1) 
 a qualified on-farm biogas recovery facility, (2) the owner or 
 operator of a qualified hydropower facility or qualified wind 
 energy conversion facility for electric energy generated and 
 sold by the facility, (3) a publicly owned hydropower facility 
 for electric energy that is generated by the facility and used 
 by the owner of the facility outside the facility, or (4) the 
 owner of a publicly owned dam that is in need of substantial 
 repair, for electric energy that is generated by a hydropower 
 facility at the dam and the annual incentive payments will be 
 used to fund the structural repairs and replacement of 
 structural components of the dam, or to retire debt incurred to 
 fund those repairs.  

    (b) Payment may only be made upon receipt by the 
 commissioner of finance of an incentive payment application that 
 establishes that the applicant is eligible to receive an 
 incentive payment and that satisfies other requirements the 
 commissioner deems necessary.  The application must be in a form 
 and submitted at a time the commissioner establishes.  

    (c) There is annually appropriated from the general fund 
 sums sufficient to make the payments required under this section.

    Subd. 3.    Eligibility window.  Payments may be made 
 under this section only for electricity generated: 

    (1) from a qualified hydroelectric facility that is 
 operational and generating electricity before December 31, 2005; 

    (2) from a qualified wind energy conversion facility that 
 is operational and generating electricity before January 1, 
 2005; or 

    (3) from a qualified on-farm biogas recovery facility from 
 July 1, 2001, through December 31, 2015. 

    Subd. 4.    Payment period.  (a) A facility may receive 
 payments under this section for a ten-year period.  No payment 
 under this section may be made for electricity generated: 

    (1) by a qualified hydroelectric facility after December 
 31, 2015; 

    (2) by a qualified wind energy conversion facility after 
 December 31, 2015; or 

    (3) by a qualified on-farm biogas recovery facility after 
 December 31, 2015.  

    (b) The payment period begins and runs consecutively from 
 the first year in which electricity generated from the facility 
 is eligible for incentive payment or after substantial repairs 
 to the hydropower facility dam funded by the incentive payments 
 are initiated. 

    Subd. 5.    Amount of payment.  (a) An incentive payment 
 is based on the number of kilowatt hours of electricity 
 generated. The amount of the payment is: 

    (1) for a facility described under subdivision 2, paragraph 
 (a), clause (4), 1.0 cents per kilowatt hour; and 

    (2) for all other facilities, 1.5 cents per kilowatt hour.  

 For electricity generated by qualified wind energy conversion 
 facilities, the incentive payment under this section is limited 
 to no more than 100 megawatts of nameplate capacity.  During any 
 period in which qualifying claims for incentive payments exceed 
 100 megawatts of nameplate capacity, the payments must be made 
 to producers in the order in which the production capacity was 
 brought into production.  

    (b) Beginning January 1, 2002, the total size of a wind 
 energy conversion system under this section must be determined 
 according to this paragraph.  Unless the systems are 
 interconnected with different distribution systems, the 
 nameplate capacity of one wind energy conversion system must be 
 combined with the nameplate capacity of any other wind energy 
 conversion system that is: 

    (1) located within five miles of the wind energy conversion 
 system; 

    (2) constructed within the same calendar year as the wind 
 energy conversion system; and 

    (3) under common ownership. 

 In the case of a dispute, the commissioner of commerce shall 
 determine the total size of the system, and shall draw all 
 reasonable inferences in favor of combining the systems. 

    (c) In making a determination under paragraph (b), the 
 commissioner of commerce may determine that two wind energy 
 conversion systems are under common ownership when the 
 underlying ownership structure contains similar persons or 
 entities, even if the ownership shares differ between the two 
 systems.  Wind energy conversion systems are not under common 
 ownership solely because the same person or entity provided 
 equity financing for the systems. 

    Subd. 6.    Ownership; financing; cure.  (a) For the 
 purposes of subdivision 1, paragraph (c), clause (2), a wind 
 energy conversion facility qualifies if it is owned at least 51 
 percent by one or more of any combination of the entities listed 
 in that clause. 

    (b) A subsequent owner of a qualified facility may continue 
 to receive the incentive payment for the duration of the 
 original payment period if the subsequent owner qualifies for 
 the incentive under subdivision 1. 

    (c) Nothing in this section may be construed to deny 
 incentive payment to an otherwise qualified facility that has 
 obtained debt or equity financing for construction or operation 
 as long as the ownership requirements of subdivision 1 and this 
 subdivision are met.  If, during the incentive payment period 
 for a qualified facility, the owner of the facility is in 
 default of a lending agreement and the lender takes possession 
 of and operates the facility and makes reasonable efforts to 
 transfer ownership of the facility to an entity other than the 
 lender, the lender may continue to receive the incentive payment 
 for electricity generated and sold by the facility for a period 
 not to exceed 18 months.  A lender who takes possession of a 
 facility shall notify the commissioner immediately on taking 
 possession and, at least quarterly, document efforts to transfer 
 ownership of the facility. 

    (d) If, during the incentive payment period, a qualified 
 facility loses the right to receive the incentive because of 
 changes in ownership, the facility may regain the right to 
 receive the incentive upon cure of the ownership structure that 
 resulted in the loss of eligibility and may reapply for the 
 incentive, but in no case may the payment period be extended 
 beyond the original ten-year limit. 

    (e) A subsequent or requalifying owner under paragraph (b)  
 or (d) retains the facility's original priority order for 
 incentive payments as long as the ownership structure 
 requalifies within two years from the date the facility became 
 unqualified or two years from the date a lender takes possession.

    HIST: 1994 c 643 s 71; 1995 c 245 s 4-8; 1997 c 216 s 124; 
 1999 c 223 art 2 s 34,35; 2000 c 488 art 2 s 15; 2001 c 212 art 
 5 s 1-3; 1Sp2001 c 4 art 2 s 21