1998 Minnesota Statutes

     216B.241 Energy conservation improvement. 

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

    (a) "Commission" means the public utilities commission. 

    (b) "Commissioner" means the commissioner of public service.

    (c) "Department" means the department of public service. 

    (d) "Energy conservation improvement" means the purchase or 
 installation of a device, method, or material that reduces 
 consumption of or increases efficiency in the use of electricity 
 or natural gas, including, but not limited to: 

    (1) insulation and ventilation; 

    (2) storm or thermal doors or windows; 

    (3) caulking and weatherstripping; 

    (4) furnace efficiency modifications; 

    (5) thermostat or lighting controls; 

    (6) awnings; or 

    (7) systems to turn off or vary the delivery of energy.  
 The term "energy conservation improvement" includes a device or 
 method that creates, converts, or actively uses energy from 
 renewable sources such as solar, wind, and biomass, provided 
 that the device or method conforms with national or state 
 performance and quality standards whenever applicable.  

    (e) "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.  

    Subd. 1a.    Investment, expenditure, and contribution; 
 regulated utilities.  (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, .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. 

    (b) 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 mid-range 
 forecast assumptions.  A public utility may appeal a decision of 
 the commissioner under this paragraph to the commission under 
 subdivision 2.  In reviewing a decision of the commissioner 
 under this paragraph, the commission shall rescind the decision 
 if it finds that the required investments or spending will: 

    (1) not result in cost-effective programs; or 

    (2) otherwise not be in the public interest. 

    (c) 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.  Contributions must be remitted 
 to the commissioner of public service 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 improvements; cooperatives; 
 municipalities.  (a) This subdivision applies to: 

    (1) a cooperative electric association that generates and 
 transmits electricity to associations that provide electricity 
 at retail including a cooperative electric association not 
 located in this state that serves associations or others in the 
 state; 

    (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, .5 percent of its gross operating 
 revenues from the sale of gas and one percent of its gross 
 operating revenues from the sale of electricity not purchased 
 from a public utility governed by subdivision 1a or a 
 cooperative electric association governed by this subdivision; 
 and 

    (2) for a cooperative electric association, 1.5 percent of 
 its gross operating revenues from service provided in the state. 

    (c) Each municipality and cooperative association subject 
 to this subdivision shall identify and implement energy 
 conservation improvement spending and investments that are 
 appropriate for the municipality or association.  Load 
 management may be used to meet the requirements of this 
 subdivision if it reduces the demand for or increases the 
 efficiency of electric services.  A generation and transmission 
 cooperative electric association may include as spending and 
 investment required under this subdivision conservation 
 improvement spending and investment by cooperative electric 
 associations that provide electric service at retail to 
 consumers and that are served by the generation and transmission 
 association.  By February 1 of each year, each municipality or 
 cooperative shall report to the commissioner its energy 
 conservation improvement spending and investments with a brief 
 analysis of effectiveness in reducing consumption of electricity 
 or gas.  The commissioner shall review each report and make 
 recommendations, where appropriate, to the municipality or 
 association to increase the effectiveness of conservation 
 improvement activities.  The commissioner shall also review each 
 report 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 of less than 185 percent of the 
 federal poverty level. 

    (d) As part of its spending for conservation improvement, a 
 municipality or association may contribute to the energy and 
 conservation account.  Any amount contributed must be remitted 
 to the commissioner of public service by February 1 of each year.

    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. 2.    Programs.  The commissioner may by rule 
 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.  The commissioner shall require at 
 least one public utility to establish a pilot program to make 
 investments in and expenditures for energy from renewable 
 resources such as solar, wind, or biomass and 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 rules of the department must provide to the 
 extent practicable for a free choice, by consumers participating 
 in the program, of the device, method, or material 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, seller, 
 installer, or contractor is duly licensed, certified, approved, 
 or qualified, including under the residential conservation 
 services program, where applicable.  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.  Load management may be used to meet the 
 requirements for energy conservation improvements under this 
 section if it results in a demonstrable reduction in consumption 
 of energy.  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.  No utility may make an energy conservation 
 improvement under this section to a building envelope unless: 

    (1) it is the primary supplier of energy used for either 
 space heating or cooling in the building; 

    (2) the commissioner determines that special circumstances, 
 which would unduly restrict the availability of conservation 
 programs, warrant otherwise; or 

    (3) the utility has been awarded a contract under 
 subdivision 2a. 

    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 unless an insufficient number of 
 appropriate programs are available. 

    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 person petitioning 
 for commission review has the burden of proof.  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.

    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.  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 children, families, and learning 
 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.  

    Subd. 2b.    Recovery of expenses for fees, taxes, 
 permits.  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 and .6 percent of 
 its gross revenues from provision of gas service 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. 

    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