Minnesota Legislature
SF 1368
as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am
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A bill for an act
relating to utilities; requiring establishment and
adoption of community-based energy development
tariffs; modifying provisions relating to renewable
energy resources and objectives; making clarifying
changes; amending Minnesota Statutes 2004, sections
216B.1645, subdivision 1, by adding a subdivision;
216B.2425, subdivision 7; 216B.243, subdivision 8;
proposing coding for new law in Minnesota Statutes,
chapter 216B.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
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[216B.1612] COMMUNITY-BASED ENERGY
DEVELOPMENT; TARIFF.
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new text begin Subdivision 1. new text end
new text begin Definitions. new text end
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(a) The terms used in this
section have the meanings given them in this subdivision.
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(b) "C-BED tariff" or "tariff" means a community-based
energy development tariff.
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(c) "Qualifying owner" means:
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(1) a Minnesota resident domiciled in any county in which a
proposed wind energy project is to be located;
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(2) a limited liability corporation that is organized under
the laws of this state and that is made up of members who are
Minnesota residents domiciled in counties in which proposed wind
energy projects are to be located;
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(3) a Minnesota nonprofit organization organized under
chapter 317A;
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(4) a Minnesota cooperative association organized under
chapter 308A or 308B, other than a rural electric cooperative
association or generation and transmission cooperative;
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(5) a Minnesota political subdivision or local government
other than a municipal electric utility or municipal power
agency, including, but not limited to, a county, statutory or
home rule charter city, town, school district, or any other
local or regional governmental organization such as a board,
commission, or association; or
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(6) a tribal council if the project is located within the
boundaries of the reservation.
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new text begin Subd. 2. new text end
new text begin Commission to develop tariff model. new text end
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By January
15, 2006, the commission shall establish, by order, a model
C-BED tariff. The intent of the model tariff is to provide a
rate structure conducive to the financing of community-based
energy projects while balancing ratepayer interests and
benefits, by:
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(1) providing a higher rate in the initial years of the
tariff, which generally corresponds to the initial debt service
period of a project, in which the rate paid by the utility is
higher during the initial years of the contract and lower in the
later years;
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(2) providing a lower rate during the later years of the
tariff, when the initial debt has been retired;
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(3) offering net present value rate that is no higher than
the rate that would have been paid by the utility absent the
front-end-loaded tariff but no lower than the utility's avoided
cost as calculated under section 216B.164; and
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(4) ensuring that the qualifying owners using the tariff
agree to abide by the terms of the tariff for the full term of
the tariff, which must be no less than 20 years, in order to
provide ratepayers with the benefit of lower rates in the later
years of the tariff in return for paying higher rates during the
earlier, debt-servicing years.
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new text begin Subd. 3. new text end
new text begin Eligibility. new text end
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To be eligible for a
community-based energy development tariff, a proposed wind
project must:
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(1) be owned by one or more qualifying owners; and
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(2) have a resolution of support adopted by the county
board of each county in which the project is to be located or,
in the case of a project located within the boundaries of a
reservation, the tribal council.
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new text begin Subd. 4. new text end
new text begin Joint ventures. new text end
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Any qualifying owner, or any
combination of qualifying owners, may develop a joint venture
project with a nonqualifying wind energy project developer.
However, the terms of the C-BED tariff may only apply to the
portion of the energy production of the total project that is
directly proportional to the equity share of the project owned
by the qualifying owners.
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new text begin Subd. 5. new text end
new text begin All utilities to offer tariff. new text end
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Within 90 days
after the commission issues an order under subdivision 2:
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(1) each public utility providing electric service at
retail shall file for commission approval a community-based
energy development tariff consistent with the model tariff
established under subdivision 2; and
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(2) each municipal utility and cooperative electric
association shall adopt a community-based energy development
tariff consistent with the model tariff issued under subdivision
2.
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new text begin Subd. 6. new text end
new text begin Application of tariff. new text end
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A C-BED tariff applies
to:
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(1) projects selected to meet an energy need identified in
a resource plan filed under section 216B.2422;
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(2) community-based wind energy projects to satisfy an
order of the commission;
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(3) projects to satisfy a statutory mandate; or
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(4) projects to satisfy the renewable energy objective law
contained in section 216B.1691.
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new text begin Subd. 7. new text end
new text begin Election by project developer. new text end
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At the
discretion of the developer, a community-based project developer
and a utility may negotiate a different rate and power purchase
agreement with terms different from the tariff established under
subdivision 2.
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Sec. 2.
Minnesota Statutes 2004, section 216B.1645,
subdivision 1, is amended to read:
Subdivision 1.
Commission authority.
Upon the petition
of a public utility, the Public Utilities Commission shall
approve or disapprove power purchase contracts, investments, or
expenditures entered into or made by the utility to satisfy the
wind and biomass mandates contained in sections 216B.169,
216B.2423, and 216B.2424, new text begin and to satisfy the Minnesota renewable
energy objectives under section 216B.1691,new text end including reasonable
investments and expenditures made to transmit the electricity
generated from sources developed under those sections that is
ultimately used to provide service to the utility's retail
customers, or to develop renewable energy sources from the
account required in section 116C.779.
Sec. 3.
Minnesota Statutes 2004, section 216B.1645, is
amended by adding a subdivision to read:
new text begin Subd. 5. new text end
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Transmission needed to support renewable
resources.
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In determining whether to approve accelerated
recovery of expenditures under this section for construction of
transmission facilities to satisfy the renewable energy
objective under section 216B.1691, the commission must find that
the applicant has met the following factors:
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(1) that the transmission facility is needed to allow the
delivery of power from renewable sources of energy to retail
customers in Minnesota;
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(2) that the applicant has signed or will sign power
purchase agreements for resources to meet the renewable energy
objective that will use or is dependent upon the capacity of the
transmission facility to serve retail customers in Minnesota;
and
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(3) that the installation and commercial operation date of
the renewable resources to satisfy the renewable energy
objective will match the planned in-service date of the
transmission facility.
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Sec. 4.
Minnesota Statutes 2004, section 216B.2425,
subdivision 7, is amended to read:
Subd. 7.
Transmission needed to support renewable
resources.
Each entity subject to this section shall determine
necessary transmission upgrades to support development of
renewable energy resources required to meet objectives under
section 216B.1691 and shall include those upgrades in its report
under subdivision 2. new text begin Transmission projects determined by the
commission to be necessary to support a utility's plan under
section 216B.1691 to meet its obligations under that section
must be certified as a priority electric transmission project,
satisfying the requirements of section 216B.243. In determining
that a proposed transmission project is necessary to support a
utility's plan under section 216B.1691, the commission must find
that the applicant has met the following factors:
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(1) that the transmission facility is needed to allow the
delivery of power from renewable sources of energy to retail
customers in Minnesota;
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(2) that the applicant has signed or will sign power
purchase agreements for resources to meet the renewable energy
objective that will use or is dependent upon the capacity of the
transmission facility to serve retail customers in Minnesota;
and
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(3) that the installation and commercial operation date of
the renewable resources to satisfy the renewable energy
objective will match the planned in-service date of the
transmission facility.
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Sec. 5.
Minnesota Statutes 2004, section 216B.243,
subdivision 8, is amended to read:
Subd. 8.
Exemptions.
This section does not apply to:
(1) cogeneration or small power production facilities as
defined in the Federal Power Act, United States Code, title 16,
section 796, paragraph (17), subparagraph (A), and paragraph
(18), subparagraph (A), and having a combined capacity at a
single site of less than 80,000 kilowatts deleted text begin or to deleted text end new text begin ;new text end plants or
facilities for the production of ethanol or fuel alcohol deleted text begin nor in deleted text end new text begin ;
or new text end any case where the commission deleted text begin shall determine deleted text end new text begin has determined
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after being advised by the attorney general that its application
has been preempted by federal law;
(2) a high-voltage transmission line proposed primarily to
distribute electricity to serve the demand of a single customer
at a single location, unless the applicant opts to request that
the commission determine need under this section or section
216B.2425;
(3) the upgrade to a higher voltage of an existing
transmission line that serves the demand of a single customer
that primarily uses existing rights-of-way, unless the applicant
opts to request that the commission determine need under this
section or section 216B.2425;
(4) a high-voltage transmission line of one mile or less
required to connect a new or upgraded substation to an existing,
new, or upgraded high-voltage transmission line;
(5) conversion of the fuel source of an existing electric
generating plant to using natural gas; deleted text begin or
deleted text end
(6) new text begin the new text end modification of an existing electric generating
plant to increase efficiency, as long as the capacity of the
plant is not increased more than ten percent or more than 100
megawatts, whichever is greaternew text begin ; or
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(7) a large energy facility that (i) generates electricity
from wind energy conversion systems, (ii) will serve retail
customers in Minnesota, and (iii) is specifically intended to be
used to meet the renewable energy objective under section
216B.1691 or addresses a resource need identified in a current
commission-approved or commission-reviewed resource plan under
section 216B.2424new text end .
Sec. 6. new text begin EFFECTIVE DATE.
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Sections 1 to 5 are effective the day following final
enactment.
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