2002 Minnesota Statutes

     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