2006 Minnesota Statutes

216B.162 COMPETITIVE RATE FOR ELECTRIC UTILITY.
    Subdivision 1. Definitions. (a) The terms used in this section have the meanings given
them in this subdivision.
(b) "Effective competition" means a market situation in which an electric utility serves a
customer that:
(1) is located within the electric utility's assigned service area determined under section
216B.39; and
(2) has the ability to obtain its energy requirements from an energy supplier that is not
regulated by the commission under section 216B.16.
(c) "Competitive rate schedule" means a rate schedule under which an electric utility may
set or change the price for its service to an individual customer or group of customers subject to
effective competition.
(d) "Competitive rate" means the actual rate offered by the utility, and approved by the
commission, to a customer subject to effective competition.
(e) "Discretionary rate reduction" means a specific reduction to an existing rate, offered
voluntarily by the utility to an individual customer or group of customers and approved by the
commission in accordance with subdivisions 10 and 11.
    Subd. 2. Competitive rate schedule permitted. (a) Notwithstanding section 216B.03,
216B.05, 216B.06, 216B.07, or 216B.16, the commission shall approve a competitive rate
schedule when:
(1) the provision of service to a customer or a class of customers is subject to effective
competition; and
(2) the schedule applies only to customers requiring electric service with a connected load
of at least 2,000 kilowatts.
(b) The commission may approve a competitive rate schedule that applies to customers
subject to effective competition and requiring electric service with a connected load less than
2,000 kilowatts.
(c) The commission shall make a final determination in a proceeding begun under this
section within 90 days of a miscellaneous rate filing by the electric utility.
    Subd. 3. Establishing or changing competitive rate schedule. The commission shall
establish or change a competitive rate schedule through a miscellaneous or general rate filing by
the utility.
    Subd. 4. Rates and terms of competitive rate schedule. When the commission authorizes a
competitive rate schedule for a customer class, it shall set the terms and conditions of service for
that schedule, which must include:
(1) that the minimum rate for the schedule recover at least the incremental cost of providing
the service, including the cost of additional capacity that is to be added while the rate is in effect
and any applicable on-peak or off-peak differential;
(2) that the maximum possible rate reduction under a competitive rate schedule does not
exceed the difference between the electric utility's applicable standard tariff and the cost to the
customer of the lowest cost competitive energy supply;
(3) that the electric utility, within a general rate case, be allowed to seek recovery of the
difference between the standard tariff and the competitive rate times the usage level during
the test year period;
(4) a determination that a rate within a competitive rate schedule meets the conditions of
section 216B.03, for other customers in the same customer class;
(5) that the rate does not compete with district heating or cooling provided by a district
heating utility as defined by section 216B.166, subdivision 2, paragraph (c); and
(6) that the rate may not be offered to a customer in which the utility has a financial interest
greater than 50 percent.
    Subd. 5. Competitive rate offered. Within its own assigned service territory, the utility, at
its discretion and using its best judgment at the time, may offer a competitive rate to a customer
subject to effective competition.
    Subd. 6. Interim competitive rate. Notwithstanding section 216B.16, subdivision 3, a
proposed competitive rate takes effect on an interim basis after filing the proposed rate with the
commission and on the date established by the electric utility. While an interim competitive
rate is in effect, the difference between rates under the competitive rate and rates under the
standard tariff for that class are not subject to recovery or refund. If the commission does not
approve the competitive rate, the electric utility may seek to recover the difference in revenues
between the interim competitive rate and the standard tariff from the customer that was offered
the competitive rate.
    Subd. 7. Commission determination. (a) Except as provided under subdivision 6,
competitive rates offered by electric utilities under this section must be filed with the commission
and must be approved, modified, or rejected by the commission within 90 days. The utility's filing
must include statements of fact demonstrating that the proposed rates meet the standards of this
subdivision. The filing must be served on the department and the Office of the Attorney General
at the same time as it is served on the commission.
(b) In reviewing a specific rate proposal, the commission shall determine:
(1) that the rate meets the terms and conditions in subdivision 4, unless the commission
determines that waiver of one or more terms and conditions would be in the public interest;
(2) that the consumer can obtain its energy requirements from an energy supplier not
rate-regulated by the commission under section 216B.16;
(3) that the customer is not likely to take service from the electric utility seeking to offer the
competitive rate if the customer was charged the electric utility's standard tariffed rate; and
(4) that after consideration of environmental and socioeconomic impacts it is in the best
interest of all other customers to offer the competitive rate to the customer subject to effective
competition.
(c) If the commission approves the competitive rate, it becomes effective as agreed to by
the electric utility and the customer. If the competitive rate is modified by the commission,
the commission shall issue an order modifying the competitive rate subject to the approval of
the electric utility and the customer. Each party has ten days in which to reject the proposed
modification. If no party rejects the proposed modification, the commissioner's order becomes
final. If either party rejects the commission's proposed modification, the electric utility, on its
behalf or on the behalf of the customer, may submit to the commission a modified version of the
commission's proposal. The commission shall accept or reject the modified version within 30
days. If the commission rejects the competitive rate, it shall issue an order indicating the reasons
for the rejection.
    Subd. 8. Energy efficiency improvement; expense recovery. If the commission approves a
competitive rate or the parties agree to a modified rate, the commission may require the electric
utility to provide the customer with an energy audit and assist in implementing cost-effective
energy efficiency improvements to assure that the customer's use of electricity is efficient. An
investment in cost-effective energy conservation improvements required under this section must
be treated as an energy conservation improvement program and included in the department's
determination of significant investments under section 216B.241. The utility shall recover energy
conservation improvement expenses in a rate proceeding under section 216B.16 or 216B.17 in
the same manner as the commission authorizes for the recovery of conservation expenditures
made under section 216B.241.
    Subd. 9.[Repealed, 1995 c 6 s 2]
    Subd. 10. Discretionary rate reduction permitted. Notwithstanding sections 216B.03,
216B.06, 216B.07, and 216B.16, a public utility whose rates are regulated under this chapter may,
at its discretion, offer a reduced rate for tariffed electric services to eligible customers. The
commission may approve a discretionary rate reduction provided that:
(1) the reduction is offered to customers who are located within the exclusive service
territory of the public utility that offers discretionary rate reductions or to potential customers who
are not customers of a Minnesota electric utility, as defined in section 216B.38, but who propose
to be located within the exclusive service territory of the public utility;
(2) the reduction applies to customers requiring electric service with a connected load of at
least 2,000 kilowatts;
(3) the reduced rate recovers at least the incremental cost of providing the service, including
the cost of additional capacity that is to be added while the rate is in effect and any applicable
on-peak or off-peak differential;
(4) in the event the commission has approved unbundled rates, the reduction is not offered
for any unbundled service other than generation, unless the unbundled service is available to the
customer from a competitive supplier;
(5) the reduced rate does not compete with district heating or cooling services provided by a
district heating utility as defined by section 216B.166, subdivision 2, paragraph (c); and
(6) the reduced rate does not compete with a natural gas service provided by a natural gas
utility and regulated by the commission.
    Subd. 11. Commission determination. (a) Proposals for discretionary rate reductions offered
by utilities must be filed with the commission, with copies of the filing served upon the department
and the office of attorney general at the same time it is served upon the commission. The
commission shall review the proposals according to procedures developed under section 216B.05,
subdivision 2a . The commission shall not approve discretionary rate reductions offered by public
utilities that do not have an accepted resource plan on file with the commission. The commission
shall not approve discretionary rate reductions unless the utility has made the customer aware of
all cost-effective opportunities for energy efficiency improvements offered by the utility.
(b) Public utilities that provide service under discretionary rate reductions shall not, through
increased revenue requirements or through prospective rate design changes, recover any revenues
foregone due to the discretionary rate reductions, nor shall the commission grant such recovery.
History: 1990 c 370 s 3,7; 1993 c 190 s 1; 1995 c 6 s 1; 1997 c 191 art 1 s 2-5; 1Sp2001 c
4 art 6 s 41,42