Bill Text: MN HF2922 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Energy conservation requirements modified.
Spectrum: Partisan Bill (Republican 6-0)
Status: (Introduced - Dead) 2012-03-19 - Introduction and first reading, referred to Environment, Energy and Natural Resources Policy and Finance [HF2922 Detail]
Download: Minnesota-2011-HF2922-Introduced.html
1.2relating to energy; utilities; modifying requirements pertaining to energy
1.3conservation;amending Minnesota Statutes 2010, section 216B.241, by adding
1.4subdivisions; repealing Minnesota Statutes 2010, section 216B.241, subdivisions
1.51b, 1d, 1e, 1f, 1g, 2a, 2b, 2c, 3, 4, 5, 5a, 5b, 5c, 7, 8, 9; Minnesota Statutes 2011
1.6Supplement, section 216B.241, subdivisions 1, 1a, 1c, 2.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2010, section 216B.241, is amended by adding a
1.9subdivision to read:
1.10 Subd. 10. Definitions. For purposes of this section and section 216B.16, subdivision
1.116b, the terms defined in this subdivision have the meanings given them.
1.12 (a) "Commission" means the Public Utilities Commission.
1.13 (b) "Commissioner" means the commissioner of commerce.
1.14 (c) "Department" means the Department of Commerce.
1.15 (d) "Energy conservation" means demand-side management of energy supplies
1.16resulting in a net reduction in energy use. Load management that reduces overall energy
1.17use is energy conservation.
1.18 (e) "Energy conservation improvement" means a project that results in energy
1.19efficiency or energy conservation. Energy conservation improvement may include waste
1.20heat recovery converted into electricity but does not include electric utility infrastructure
1.21projects approved by the commission under section 216B.1636.
1.22 (f) "Energy efficiency" means measures or programs, including energy conservation
1.23measures or programs, that target consumer behavior, equipment, processes, or devices
1.24designed to produce either an absolute decrease in consumption of electric energy or
1.25natural gas or a decrease in consumption of electric energy or natural gas on a per unit
2.1of production basis without a reduction in the quality or level of service provided to
2.2the energy consumer.
2.3 (g) "Gross annual retail energy sales" means annual electric sales to all retail
2.4customers in a utility's or association's Minnesota service territory or natural gas
2.5throughput to all retail customers, including natural gas transportation customers, on a
2.6utility's distribution system in Minnesota. For purposes of this section, gross annual
2.7retail energy sales exclude:
2.8(1) gas sales to:
2.9(i) a large energy facility;
2.10(ii) a large customer facility whose natural gas utility has been exempted by the
2.11commissioner under subdivision 11, with respect to natural gas sales made to the large
2.12customer facility; and
2.13(iii) a commercial gas customer facility whose natural gas utility has been exempted
2.14by the commissioner under subdivision 11, with respect to natural gas sales made to
2.15the commercial gas customer facility; and
2.16(2) electric sales to a large customer facility whose electric utility has been exempted
2.17by the commissioner under subdivision 11, with respect to electric sales made to the
2.18large customer facility.
2.19 (h) "Investments and expenses of a public utility" includes the investments
2.20and expenses incurred by a public utility in connection with an energy conservation
2.21improvement, including but not limited to:
2.22 (1) the differential in interest cost between the market rate and the rate charged on a
2.23no-interest or below-market interest loan made by a public utility to a customer for the
2.24purchase or installation of an energy conservation improvement; and
2.25 (2) the difference between the utility's cost of purchase or installation of energy
2.26conservation improvements and any price charged by a public utility to a customer for
2.27energy conservation improvements.
2.28 (i) "Large customer facility" means all buildings, structures, equipment, and
2.29installations at a single site that collectively: (1) impose a peak electrical demand on an
2.30electric utility's system of not less than 20,000 kilowatts, measured in the same way as the
2.31utility that serves the customer facility measures electrical demand for billing purposes; or
2.32(2) consume not less than 500 million cubic feet of natural gas annually. In calculating
2.33peak electrical demand, a large customer facility may include demand offset by on-site
2.34cogeneration facilities and, if engaged in mineral extraction, may aggregate peak energy
2.35demand from the large customer facility's mining and processing operations.
3.1 (j) "Large energy facility" has the meaning given in section 216B.2421, subdivision
3.22, clause (1).
3.3 (k) "Load management" means an activity, service, or technology to change the
3.4timing or the efficiency of a customer's use of energy that allows a utility or a customer to
3.5respond to wholesale market fluctuations or to reduce peak demand for energy or capacity.
3.6 (l) "Low-income programs" means energy conservation improvement programs that
3.7directly serve the needs of low-income persons, including low-income renters.
3.8(m) "Qualifying utility" means a utility that supplies the energy to a customer that
3.9enables the customer to qualify as a large customer facility.
3.10 (n) "Waste heat recovery converted into electricity" means an energy recovery
3.11process that converts otherwise lost energy from the heat of exhaust stacks or pipes used
3.12for engines or manufacturing or industrial processes, or the reduction of high pressure
3.13in water or gas pipelines.
3.14 Sec. 2. Minnesota Statutes 2010, section 216B.241, is amended by adding a
3.15subdivision to read:
3.16 Subd. 11. Investment, expenditure, and contribution; public utility. (a) For
3.17purposes of this subdivision and subdivision 15, "public utility" has the meaning given it
3.18in section 216B.02, subdivision 4. Each public utility shall spend and invest for energy
3.19conservation improvements under this subdivision and subdivision 15 the following
3.20amounts:
3.21 (1) for a utility that furnishes gas service, 0.5 percent of its gross operating revenues
3.22from service provided in the state;
3.23 (2) for a utility that furnishes electric service, 1.5 percent of its gross operating
3.24revenues from service provided in the state; and
3.25 (3) for a utility that furnishes electric service and that operates a nuclear-powered
3.26electric generating plant within the state, two percent of its gross operating revenues
3.27from service provided in the state.
3.28 For purposes of this paragraph, "gross operating revenues" do not include revenues
3.29from large customer facilities exempted under paragraph (b), or from commercial gas
3.30customers that are exempted under paragraph (c) or (e).
3.31 (b) The owner of a large customer facility may petition the commissioner to exempt
3.32both electric and gas utilities serving the large customer facility from the investment and
3.33expenditure requirements of paragraph (a) with respect to retail revenues attributable to
3.34the large customer facility. The filing must include a discussion of the competitive or
3.35economic pressures facing the owner of the facility and the efforts taken by the owner
4.1to identify, evaluate, and implement energy conservation and efficiency improvements.
4.2A filing submitted on or before October 1 of any year must be approved within 90 days
4.3and become effective January 1 of the year following the filing, unless the commissioner
4.4finds that the owner of the large customer facility has failed to take reasonable measures
4.5to identify, evaluate, and implement energy conservation and efficiency improvements.
4.6If a facility qualifies as a large customer facility solely due to its peak electrical demand
4.7or annual natural gas usage, the exemption may be limited to the qualifying utility if
4.8the commissioner finds that the owner of the large customer facility has failed to take
4.9reasonable measures to identify, evaluate, and implement energy conservation and
4.10efficiency improvements with respect to the nonqualifying utility. Once an exemption is
4.11approved, the commissioner may request the owner of a large customer facility to submit,
4.12not more often than once every five years, a report demonstrating the large customer
4.13facility's ongoing commitment to energy conservation and efficiency improvement after
4.14the exemption filing. The commissioner may request such reports for up to ten years after
4.15the effective date of the exemption, unless the majority ownership of the large customer
4.16facility changes, in which case the commissioner may request additional reports for up to
4.17ten years after the change in ownership occurs. The commissioner may, within 180 days
4.18of receiving a report submitted under this paragraph, rescind any exemption granted under
4.19this paragraph upon a determination that the large customer facility is not continuing
4.20to make reasonable efforts to identify, evaluate, and implement energy conservation
4.21improvements. A large customer facility that is, under an order from the commissioner,
4.22exempt from the investment and expenditure requirements of paragraph (a) as of
4.23December 31, 2010, is not required to submit a report to retain its exempt status, except as
4.24otherwise provided in this paragraph with respect to ownership changes. No exempt large
4.25customer facility may participate in a utility conservation improvement program unless the
4.26owner of the facility submits a filing with the commissioner to withdraw its exemption.
4.27 (c) A commercial gas customer that is not a large customer facility and that
4.28purchases or acquires natural gas from a public utility having fewer than 600,000 natural
4.29gas customers in Minnesota may petition the commissioner to exempt gas utilities serving
4.30the commercial gas customer from the investment and expenditure requirements of
4.31paragraph (a) with respect to retail revenues attributable to the commercial gas customer.
4.32The petition must be supported by evidence demonstrating that the commercial gas
4.33customer has acquired or can reasonably acquire the capability to bypass use of the utility's
4.34gas distribution system by obtaining natural gas directly from a supplier not regulated by
4.35the commission. The commissioner shall grant the exemption if the commissioner finds
4.36that the petitioner has made the demonstration required by this paragraph.
5.1(d) The commissioner may require investments or spending greater than the amounts
5.2required under this subdivision for a public utility whose most recent advance forecast
5.3required under section 216B.2422 or 216C.17 projects a peak demand deficit of 100
5.4megawatts or greater within five years under midrange forecast assumptions.
5.5 (e) A public utility or owner of a large customer facility may appeal a decision of
5.6the commissioner under paragraph (b), (c), or (d) to the commission under subdivision
5.715. In reviewing a decision of the commissioner under paragraph (b), (c), or (d), the
5.8commission shall rescind the decision if it finds that the required investments or spending
5.9will: (1) not result in cost-effective energy conservation improvements; or (2) otherwise
5.10not be in the public interest.
5.11 Sec. 3. Minnesota Statutes 2010, section 216B.241, is amended by adding a
5.12subdivision to read:
5.13 Subd. 12. Conservation improvement by cooperative association or
5.14municipality. (a) This subdivision applies to:
5.15(1) a cooperative electric association that provides retail service to its members;
5.16(2) a municipality that provides electric service to retail customers; and
5.17(3) a municipality with gross operating revenues in excess of $5,000,000 from sales
5.18of natural gas to retail customers.
5.19(b) Each cooperative electric association and municipality subject to this subdivision
5.20shall spend and invest for energy conservation improvements under this subdivision
5.21the following amounts:
5.22(1) for a municipality, 0.5 percent of its gross operating revenues from the sale of
5.23gas and 1.5 percent of its gross operating revenues from the sale of electricity, excluding
5.24gross operating revenues from electric and gas service provided in the state to large
5.25electric customer facilities; and
5.26(2) for a cooperative electric association, 1.5 percent of its gross operating revenues
5.27from service provided in the state, excluding gross operating revenues from service
5.28provided in the state to large electric customer facilities indirectly through a distribution
5.29cooperative electric association.
5.30(c) Each municipality and cooperative electric association subject to this subdivision
5.31shall identify and implement energy conservation improvement spending and investments
5.32that are appropriate for the municipality or association, except that a municipality or
5.33association may not spend or invest for energy conservation improvements that directly
5.34benefit a large electric customer facility for which the commissioner has issued an
5.35exemption under subdivision 11, paragraph (b).
6.1(d) Each municipality and cooperative electric association subject to this subdivision
6.2may spend and invest annually up to ten percent of the total amount required to be spent
6.3and invested on energy conservation improvements under this subdivision on research
6.4and development projects that meet the definition of energy conservation improvement in
6.5subdivision 10 and that are funded directly by the municipality or cooperative electric
6.6association.
6.7(e) Load-management activities that do not reduce energy use but that increase the
6.8efficiency of the electric system may be used to meet 50 percent of the conservation
6.9investment and spending requirements of this subdivision.
6.10(f) A generation and transmission cooperative electric association that provides
6.11energy services to cooperative electric associations that provide electric service at retail to
6.12consumers may invest in energy conservation improvements on behalf of the associations
6.13it serves and may fulfill the spending and reporting requirements of this section on an
6.14aggregate basis. A municipal power agency or other not-for-profit entity that provides
6.15energy service to municipal utilities that provide electric service at retail may invest in
6.16energy conservation improvements on behalf of the municipal utilities it serves and may
6.17fulfill the spending and reporting requirements of this section on an aggregate basis,
6.18under an agreement between the municipal power agency or not-for-profit entity and each
6.19municipal utility for funding the investments.
6.20(g) At least every four years, on a schedule determined by the commissioner, each
6.21municipality or cooperative shall file an overview of its conservation improvement plan
6.22with the commissioner. With this overview, the municipality or cooperative shall also
6.23provide an evaluation to the commissioner detailing its energy conservation improvement
6.24spending and investments for the previous period. The evaluation must briefly describe
6.25each conservation program and must specify the energy savings or increased efficiency in
6.26the use of energy within the service territory of the utility or association that is the result of
6.27the spending and investments. The evaluation must analyze the cost-effectiveness of the
6.28utility's or association's conservation programs, using a list of baseline energy and capacity
6.29savings assumptions developed in consultation with the department. The commissioner
6.30shall review each evaluation and make recommendations, where appropriate, to the
6.31municipality or association to increase the effectiveness of conservation improvement
6.32activities. Up to three percent of a utility's conservation spending obligation under this
6.33section may be used for program pre-evaluation, testing, and monitoring and program
6.34evaluation. The overview and evaluation filed by a municipality with less than 60,000,000
6.35kilowatt-hours in annual retail sales of electric service may consist of a letter from the
6.36governing board of the municipal utility to the department providing the amount of annual
7.1conservation spending required of that municipality and certifying that the required
7.2amount has been spent on conservation programs under this subdivision.
7.3(h) The commissioner shall also review each evaluation for whether a portion of the
7.4money spent on residential conservation improvement programs is devoted to programs
7.5that directly address the needs of renters and low-income persons unless an insufficient
7.6number of appropriate programs are available. For the purposes of this subdivision and
7.7subdivision 24, low-income means an income at or below 50 percent of the state median
7.8income.
7.9(i) As part of its spending for conservation improvement, a municipality or
7.10association may contribute to the energy and conservation account. A municipality or
7.11association may propose to the commissioner to designate that all or a portion of funds
7.12contributed to the account be used for research and development projects that can best
7.13be implemented on a statewide basis. Any amount contributed must be remitted to the
7.14commissioner by February 1 of each year.
7.15 Sec. 4. Minnesota Statutes 2010, section 216B.241, is amended by adding a
7.16subdivision to read:
7.17 Subd. 13. Report. On an annual basis, the commissioner shall produce and
7.18make publicly available a report on the annual energy savings achieved by the energy
7.19conservation improvement programs for the two most recent years for which data is
7.20available. The commissioner shall report on program performance both in the aggregate
7.21and for each entity filing an energy conservation improvement plan for approval or review
7.22by the commissioner.
7.23 Sec. 5. Minnesota Statutes 2010, section 216B.241, is amended by adding a
7.24subdivision to read:
7.25 Subd. 14. Manner of filing and service. (a) A public utility, generation and
7.26transmission cooperative electric association, municipal power agency, cooperative
7.27electric association, and municipal utility shall submit filings to the department via the
7.28department's electronic filing system. The commissioner may approve an exemption
7.29from this requirement in the event an affected utility or association is unable to submit
7.30filings via the department's electronic filing system. All other interested parties shall
7.31submit filings to the department via the department's electronic filing system whenever
7.32practicable but may also file by personal delivery or by mail.
7.33 (b) Submission of a document to the department's electronic filing system constitutes
7.34service on the department. Where department rule requires service of a notice, order, or
8.1other document by the department, utility, association, or interested party upon persons on
8.2a service list maintained by the department, service may be made by personal delivery,
8.3mail, or electronic service, except that electronic service may only be made upon persons
8.4on the service list who have previously agreed in writing to accept electronic service at an
8.5electronic address provided to the department for electronic service purposes.
8.6 Sec. 6. Minnesota Statutes 2010, section 216B.241, is amended by adding a
8.7subdivision to read:
8.8 Subd. 15. Programs. (a) The commissioner may require public utilities to make
8.9investments and expenditures in energy conservation improvements, explicitly setting
8.10forth the interest rates, prices, and terms under which the improvements must be offered to
8.11the customers. The required programs must cover no more than a four-year period. Public
8.12utilities shall file conservation improvement plans by June 1, on a schedule determined
8.13by order of the commissioner, but at least every four years. Plans received by a public
8.14utility by June 1 must be approved or approved as modified by the commissioner by
8.15December 1 of that same year. The commissioner shall give special consideration and
8.16encouragement to programs that bring about significant net savings through the use of
8.17energy-efficient lighting. The commissioner shall evaluate the program on the basis of
8.18cost-effectiveness and the reliability of technologies employed. The commissioner's order
8.19must provide to the extent practicable for a free choice, by consumers participating in the
8.20program, of the device, method, material, or project constituting the energy conservation
8.21improvement and for a free choice of the seller, installer, or contractor of the energy
8.22conservation improvement, provided that the device, method, material, or project seller,
8.23installer, or contractor is duly licensed, certified, approved, or qualified, including under
8.24the residential conservation services program, where applicable.
8.25(b) Each public utility subject to subdivision 11 may spend and invest annually up to
8.26ten percent of the total amount required to be spent and invested on energy conservation
8.27improvements under this section by the utility on research and development projects
8.28that meet the definition of energy conservation improvement in subdivision 10 and that
8.29are funded directly by the public utility.
8.30(c) A public utility may not spend for or invest in energy conservation improvements
8.31that directly benefit a large electric customer facility for which the commissioner has
8.32issued an exemption pursuant to subdivision 11, paragraph (b). The commissioner shall
8.33consider and may require a utility to undertake a program suggested by an outside source,
8.34including a political subdivision or a nonprofit or community organization.
9.1(d) The commissioner may, by order, establish a list of programs that may be offered
9.2as energy conservation improvements by a public utility, municipal utility, cooperative
9.3electric association, or other entity providing conservation services under this section. The
9.4list of programs may include rebates for high-efficiency appliances, rebates or subsidies for
9.5high-efficiency lamps, small business energy audits, and building recommissioning. The
9.6commissioner may, by order, change this list to add or subtract programs the commissioner
9.7determines necessary to promote efficient and effective conservation programs.
9.8(e) A utility, political subdivision, or nonprofit or community organization that
9.9has suggested a program, the attorney general acting on behalf of consumers and
9.10small business interests, or a utility customer that has suggested a program and is not
9.11represented by the attorney general under section 8.33 may petition the commission to
9.12modify or revoke a department decision under this section, and the commission may do
9.13so if it determines that the program is not cost-effective, does not adequately address the
9.14residential conservation improvement needs of low-income persons, has a long-range
9.15negative effect on one or more classes of customers, or is otherwise not in the public
9.16interest. The commission shall reject a petition that, on its face, fails to make a reasonable
9.17argument that a program is not in the public interest.
9.18(f) The commissioner may order a public utility to include, with the filing of the
9.19utility's proposed conservation improvement plan under paragraph (a), the results of an
9.20independent audit of the utility's conservation improvement programs and expenditures
9.21performed by the department or an auditor with experience in the provision of energy
9.22conservation and energy efficiency services approved by the commissioner and chosen by
9.23the utility. The audit must specify the energy savings or increased efficiency in the use
9.24of energy within the service territory of the utility that is the result of the spending and
9.25investments. The audit must evaluate the cost-effectiveness of the utility's conservation
9.26programs.
9.27(g) Up to three percent of a utility's conservation spending obligation under this
9.28section may be used for program pre-evaluation, testing, and monitoring and program
9.29audit and evaluation.
9.30 Sec. 7. Minnesota Statutes 2010, section 216B.241, is amended by adding a
9.31subdivision to read:
9.32 Subd. 16. Energy and conservation account. The energy and conservation account
9.33is established in the special revenue fund in the state treasury. The commissioner must
9.34deposit money contributed under subdivisions 11 and 12 in the energy and conservation
9.35account in the special revenue fund. Money in the account is appropriated to the
10.1department for programs designed to meet the energy conservation needs of low-income
10.2persons and to make energy conservation improvements in areas not adequately served
10.3under subdivision 15, including research and development projects included in the
10.4definition of energy conservation improvement in subdivision 10. Interest on money
10.5in the account accrues to the account. Using information collected under section
10.6216C.02, subdivision 1, paragraph (b), the commissioner must, to the extent possible,
10.7allocate enough money to programs for low-income persons to ensure that their needs
10.8are being adequately addressed. The commissioner must request the commissioner
10.9of finance to transfer money from the account to the commissioner of education for
10.10an energy conservation program for low-income persons. In establishing programs,
10.11the commissioner must consult political subdivisions and nonprofit and community
10.12organizations, especially organizations engaged in providing energy and weatherization
10.13assistance to low-income persons. At least one program must address the need for energy
10.14conservation improvements in areas in which a high percentage of residents use fuel
10.15oil or propane to fuel their source of home heating. The commissioner may contract
10.16with a political subdivision, a nonprofit or community organization, a public utility,
10.17a municipality, or a cooperative electric association to implement its programs. The
10.18commissioner may provide grants to any person to conduct research and development
10.19projects in accordance with this section.
10.20 Sec. 8. Minnesota Statutes 2010, section 216B.241, is amended by adding a
10.21subdivision to read:
10.22 Subd. 17. Recovery of expenses. The commission shall allow a utility to recover
10.23expenses resulting from a conservation improvement program required by the department
10.24and contributions to the energy and conservation account, unless the recovery would
10.25be inconsistent with a financial incentive proposal approved by the commission. The
10.26commission shall allow a cooperative electric association subject to rate regulation under
10.27section 216B.026, to recover expenses resulting from energy conservation improvement
10.28programs, load-management programs, and assessments and contributions to the energy
10.29and conservation account unless the recovery would be inconsistent with a financial
10.30incentive proposal approved by the commission. In addition, a utility may file annually, or
10.31the Public Utilities Commission may require the utility to file, and the commission may
10.32approve, rate schedules containing provisions for the automatic adjustment of charges
10.33for utility service in direct relation to changes in the expenses of the utility for real
10.34and personal property taxes, fees, and permits, the amounts of which the utility cannot
10.35control. A public utility is eligible to file for adjustment for real and personal property
11.1taxes, fees, and permits under this subdivision only if, in the year previous to the year in
11.2which it files for adjustment, it has spent or invested at least 1.75 percent of its gross
11.3revenues from provision of electric service, excluding gross operating revenues from
11.4electric service provided in the state to large electric customer facilities for which the
11.5commissioner has issued an exemption under subdivision 11, paragraph (b), and 0.6
11.6percent of its gross revenues from provision of gas service, excluding gross operating
11.7revenues from gas services provided in the state to large electric customer facilities for
11.8which the commissioner has issued an exemption under subdivision 11, paragraph (b), for
11.9that year for energy conservation improvements under this section.
11.10 Sec. 9. Minnesota Statutes 2010, section 216B.241, is amended by adding a
11.11subdivision to read:
11.12 Subd. 18. Ownership of energy conservation improvement. An energy
11.13conservation improvement made to or installed in a building in accordance with this
11.14section, except systems owned by the utility and designed to turn off, limit, or vary the
11.15delivery of energy, are the exclusive property of the owner of the building except to the
11.16extent that the improvement is subjected to a security interest in favor of the utility in
11.17case of a loan to the building owner. The utility has no liability for loss, damage, or
11.18injury caused directly or indirectly by an energy conservation improvement except for
11.19negligence by the utility in purchase, installation, or modification of the product.
11.20 Sec. 10. Minnesota Statutes 2010, section 216B.241, is amended by adding a
11.21subdivision to read:
11.22 Subd. 19. Federal law prohibitions. If investments by public utilities in energy
11.23conservation improvements are in any manner prohibited or restricted by federal law
11.24and there is a provision under which the prohibition or restriction may be waived, then
11.25the commission, the governor, or any other necessary state agency or officer shall take
11.26all necessary and appropriate steps to secure a waiver with respect to those public utility
11.27investments in energy conservation improvements included in this section.
11.28 Sec. 11. Minnesota Statutes 2010, section 216B.241, is amended by adding a
11.29subdivision to read:
11.30 Subd. 20. Efficient lighting program. (a) Each public utility, cooperative electric
11.31association, and municipal utility that provides electric service to retail customers shall
11.32include as part of its conservation improvement activities a program to strongly encourage
11.33the use of fluorescent and high-intensity discharge lamps. The program must include at
12.1least a public information campaign to encourage use of the lamps and proper management
12.2of spent lamps by all customer classifications.
12.3(b) A public utility that provides electric service at retail to 200,000 or more
12.4customers shall establish, either directly or through contracts with other persons, including
12.5lamp manufacturers, distributors, wholesalers, retailers, and local government units, a
12.6system to collect for delivery to a reclamation or recycling facility spent fluorescent and
12.7high-intensity discharge lamps from households and small businesses, as defined in
12.8section 645.445, that generate an average of fewer than ten spent lamps per year.
12.9(c) A collection system must include establishing reasonably convenient locations
12.10for collecting spent lamps from households and financial incentives sufficient to encourage
12.11spent lamp generators to take the lamps to the collection locations. Financial incentives
12.12may include coupons for purchase of new fluorescent or high-intensity discharge lamps,
12.13a cash-back system, or any other financial incentive or group of incentives designed
12.14to collect the maximum number of spent lamps from households and small businesses
12.15that is reasonably feasible.
12.16(d) A public utility that provides electric service at retail to fewer than 200,000
12.17customers, a cooperative electric association, or a municipal utility that provides electric
12.18service at retail to customers may establish a collection system under paragraphs (b) and
12.19(c) as part of conservation improvement activities required under this section.
12.20(e) The commissioner of the Pollution Control Agency may not, unless clearly
12.21required by federal law, require a public utility, cooperative electric association, or
12.22municipality that establishes a household fluorescent and high-intensity discharge lamp
12.23collection system under this section to manage the lamps as hazardous waste as long as
12.24the lamps are managed to avoid breakage and are delivered to a recycling or reclamation
12.25facility that removes mercury and other toxic materials contained in the lamps prior to
12.26placement of the lamps in solid waste.
12.27(f) If a public utility, cooperative electric association, or municipal utility contracts
12.28with a local government unit to provide a collection system under this subdivision,
12.29the contract must provide for payment to the local government unit of all the unit's
12.30incremental costs of collecting and managing spent lamps.
12.31(g) All the costs incurred by a public utility, cooperative electric association, or
12.32municipal utility for promotion and collection of fluorescent and high-intensity discharge
12.33lamps under this subdivision are conservation improvement spending under this section.
12.34 Sec. 12. Minnesota Statutes 2010, section 216B.241, is amended by adding a
12.35subdivision to read:
13.1 Subd. 21. Qualifying solar energy project. A utility or association may include
13.2in its conservation plan programs for the installation of qualifying solar energy projects
13.3as defined by section 216B.2411 to the extent of the spending allowed for generation
13.4projects by section 216B.2411.
13.5 Sec. 13. Minnesota Statutes 2010, section 216B.241, is amended by adding a
13.6subdivision to read:
13.7 Subd. 22. Biomethane purchases. (a) A natural gas utility may include in its
13.8conservation plan purchases of biomethane, and may use up to five percent of the total
13.9amount to be spent on energy conservation improvements under this section for that
13.10purpose. The cost-effectiveness of biomethane purchases may be determined by a
13.11different standard than for other energy conservation improvements under this section if
13.12the commissioner determines that doing so is in the public interest in order to encourage
13.13biomethane purchases.
13.14(b) For the purposes of this subdivision, "biomethane" means biogas produced
13.15through anaerobic digestion of biomass, gasification of biomass, or other effective
13.16conversion processes, that is cleaned and purified into biomethane that meets natural gas
13.17utility quality specifications for use in a natural gas utility distribution system.
13.18 Sec. 14. Minnesota Statutes 2010, section 216B.241, is amended by adding a
13.19subdivision to read:
13.20 Subd. 23. Large solar electric generating plant. (a) For the purpose of this
13.21subdivision:
13.22(1) "project" means a solar electric generation project consisting of arrays of solar
13.23photovoltaic cells with a capacity of up to two megawatts located on the site of a closed
13.24landfill in Olmsted County owned by the Minnesota Pollution Control Agency; and
13.25(2) "cooperative electric association" means a generation and transmission
13.26cooperative electric association that has a member distribution cooperative association to
13.27which it provides wholesale electric service in whose service territory a project is located.
13.28(b) A cooperative electric association may elect to count all of its purchases of
13.29electric energy from a project toward its energy objective or standard under section
13.30216B.1691.
13.31(c) A cooperative electric association may include in its conservation plan purchases
13.32of electric energy from a project.
14.1 Sec. 15. Minnesota Statutes 2010, section 216B.241, is amended by adding a
14.2subdivision to read:
14.3 Subd. 24. Low-income programs. (a) The commissioner shall ensure that each
14.4utility and association provides low-income programs. When approving spending
14.5goals for low-income programs, the commissioner shall consider historic spending and
14.6participation levels and the number of low-income persons residing in the utility's service
14.7territory. A utility that furnishes gas service must spend at least 0.2 percent of its gross
14.8operating revenue from residential customers in the state on low-income programs. A
14.9utility or association that furnishes electric service must spend at least 0.2 percent of its
14.10gross operating revenue from residential customers in the state on low-income programs.
14.11For a generation and transmission cooperative association, this requirement shall apply to
14.12each association's members' aggregate gross operating revenue from sale of electricity to
14.13residential customers in the state.
14.14 (b) To meet the requirements of paragraph (a), a utility or association may contribute
14.15money to the energy and conservation account. An energy conservation improvement plan
14.16must state the amount, if any, of low-income energy conservation improvement funds the
14.17utility or association will contribute to the energy and conservation account. Contributions
14.18must be remitted to the commissioner by February 1 of each year.
14.19 (c) The commissioner shall establish low-income programs to utilize money
14.20contributed to the energy and conservation account under paragraph (b). In establishing
14.21low-income programs, the commissioner shall consult political subdivisions, utilities, and
14.22nonprofit and community organizations, especially organizations engaged in providing
14.23energy and weatherization assistance to low-income persons. Money contributed to
14.24the energy and conservation account under paragraph (b) must provide programs for
14.25low-income persons, including low-income renters, in the service territory of the
14.26utility or association providing the money. The commissioner shall record and report
14.27expenditures and energy savings achieved as a result of low-income programs funded
14.28through the energy and conservation account in the report required under subdivision 13.
14.29The commissioner may contract with a political subdivision, nonprofit or community
14.30organization, public utility, municipality, or cooperative electric association to implement
14.31low-income programs funded through the energy and conservation account.
14.32 (d) A utility or association may petition the commissioner to modify its required
14.33spending under paragraph (a) if the utility or association and the commissioner have been
14.34unable to expend the amount required under paragraph (a) for three consecutive years.
14.35 Sec. 16. REPEALER.
15.1(a) Minnesota Statutes 2010, section 216B.241, subdivisions 1b, 1d, 1e, 1f, 1g, 2a,
15.22b, 2c, 3, 4, 5, 5a, 5b, 5c, 7, 8, and 9, are repealed.
15.3(b) Minnesota Statutes 2011 Supplement, section 216B.241, subdivisions 1, 1a,
15.41c, and 2, are repealed.
1.3conservation;amending Minnesota Statutes 2010, section 216B.241, by adding
1.4subdivisions; repealing Minnesota Statutes 2010, section 216B.241, subdivisions
1.51b, 1d, 1e, 1f, 1g, 2a, 2b, 2c, 3, 4, 5, 5a, 5b, 5c, 7, 8, 9; Minnesota Statutes 2011
1.6Supplement, section 216B.241, subdivisions 1, 1a, 1c, 2.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2010, section 216B.241, is amended by adding a
1.9subdivision to read:
1.10 Subd. 10. Definitions. For purposes of this section and section 216B.16, subdivision
1.116b, the terms defined in this subdivision have the meanings given them.
1.12 (a) "Commission" means the Public Utilities Commission.
1.13 (b) "Commissioner" means the commissioner of commerce.
1.14 (c) "Department" means the Department of Commerce.
1.15 (d) "Energy conservation" means demand-side management of energy supplies
1.16resulting in a net reduction in energy use. Load management that reduces overall energy
1.17use is energy conservation.
1.18 (e) "Energy conservation improvement" means a project that results in energy
1.19efficiency or energy conservation. Energy conservation improvement may include waste
1.20heat recovery converted into electricity but does not include electric utility infrastructure
1.21projects approved by the commission under section 216B.1636.
1.22 (f) "Energy efficiency" means measures or programs, including energy conservation
1.23measures or programs, that target consumer behavior, equipment, processes, or devices
1.24designed to produce either an absolute decrease in consumption of electric energy or
1.25natural gas or a decrease in consumption of electric energy or natural gas on a per unit
2.1of production basis without a reduction in the quality or level of service provided to
2.2the energy consumer.
2.3 (g) "Gross annual retail energy sales" means annual electric sales to all retail
2.4customers in a utility's or association's Minnesota service territory or natural gas
2.5throughput to all retail customers, including natural gas transportation customers, on a
2.6utility's distribution system in Minnesota. For purposes of this section, gross annual
2.7retail energy sales exclude:
2.8(1) gas sales to:
2.9(i) a large energy facility;
2.10(ii) a large customer facility whose natural gas utility has been exempted by the
2.11commissioner under subdivision 11, with respect to natural gas sales made to the large
2.12customer facility; and
2.13(iii) a commercial gas customer facility whose natural gas utility has been exempted
2.14by the commissioner under subdivision 11, with respect to natural gas sales made to
2.15the commercial gas customer facility; and
2.16(2) electric sales to a large customer facility whose electric utility has been exempted
2.17by the commissioner under subdivision 11, with respect to electric sales made to the
2.18large customer facility.
2.19 (h) "Investments and expenses of a public utility" includes the investments
2.20and expenses incurred by a public utility in connection with an energy conservation
2.21improvement, including but not limited to:
2.22 (1) the differential in interest cost between the market rate and the rate charged on a
2.23no-interest or below-market interest loan made by a public utility to a customer for the
2.24purchase or installation of an energy conservation improvement; and
2.25 (2) the difference between the utility's cost of purchase or installation of energy
2.26conservation improvements and any price charged by a public utility to a customer for
2.27energy conservation improvements.
2.28 (i) "Large customer facility" means all buildings, structures, equipment, and
2.29installations at a single site that collectively: (1) impose a peak electrical demand on an
2.30electric utility's system of not less than 20,000 kilowatts, measured in the same way as the
2.31utility that serves the customer facility measures electrical demand for billing purposes; or
2.32(2) consume not less than 500 million cubic feet of natural gas annually. In calculating
2.33peak electrical demand, a large customer facility may include demand offset by on-site
2.34cogeneration facilities and, if engaged in mineral extraction, may aggregate peak energy
2.35demand from the large customer facility's mining and processing operations.
3.1 (j) "Large energy facility" has the meaning given in section 216B.2421, subdivision
3.22, clause (1).
3.3 (k) "Load management" means an activity, service, or technology to change the
3.4timing or the efficiency of a customer's use of energy that allows a utility or a customer to
3.5respond to wholesale market fluctuations or to reduce peak demand for energy or capacity.
3.6 (l) "Low-income programs" means energy conservation improvement programs that
3.7directly serve the needs of low-income persons, including low-income renters.
3.8(m) "Qualifying utility" means a utility that supplies the energy to a customer that
3.9enables the customer to qualify as a large customer facility.
3.10 (n) "Waste heat recovery converted into electricity" means an energy recovery
3.11process that converts otherwise lost energy from the heat of exhaust stacks or pipes used
3.12for engines or manufacturing or industrial processes, or the reduction of high pressure
3.13in water or gas pipelines.
3.14 Sec. 2. Minnesota Statutes 2010, section 216B.241, is amended by adding a
3.15subdivision to read:
3.16 Subd. 11. Investment, expenditure, and contribution; public utility. (a) For
3.17purposes of this subdivision and subdivision 15, "public utility" has the meaning given it
3.18in section 216B.02, subdivision 4. Each public utility shall spend and invest for energy
3.19conservation improvements under this subdivision and subdivision 15 the following
3.20amounts:
3.21 (1) for a utility that furnishes gas service, 0.5 percent of its gross operating revenues
3.22from service provided in the state;
3.23 (2) for a utility that furnishes electric service, 1.5 percent of its gross operating
3.24revenues from service provided in the state; and
3.25 (3) for a utility that furnishes electric service and that operates a nuclear-powered
3.26electric generating plant within the state, two percent of its gross operating revenues
3.27from service provided in the state.
3.28 For purposes of this paragraph, "gross operating revenues" do not include revenues
3.29from large customer facilities exempted under paragraph (b), or from commercial gas
3.30customers that are exempted under paragraph (c) or (e).
3.31 (b) The owner of a large customer facility may petition the commissioner to exempt
3.32both electric and gas utilities serving the large customer facility from the investment and
3.33expenditure requirements of paragraph (a) with respect to retail revenues attributable to
3.34the large customer facility. The filing must include a discussion of the competitive or
3.35economic pressures facing the owner of the facility and the efforts taken by the owner
4.1to identify, evaluate, and implement energy conservation and efficiency improvements.
4.2A filing submitted on or before October 1 of any year must be approved within 90 days
4.3and become effective January 1 of the year following the filing, unless the commissioner
4.4finds that the owner of the large customer facility has failed to take reasonable measures
4.5to identify, evaluate, and implement energy conservation and efficiency improvements.
4.6If a facility qualifies as a large customer facility solely due to its peak electrical demand
4.7or annual natural gas usage, the exemption may be limited to the qualifying utility if
4.8the commissioner finds that the owner of the large customer facility has failed to take
4.9reasonable measures to identify, evaluate, and implement energy conservation and
4.10efficiency improvements with respect to the nonqualifying utility. Once an exemption is
4.11approved, the commissioner may request the owner of a large customer facility to submit,
4.12not more often than once every five years, a report demonstrating the large customer
4.13facility's ongoing commitment to energy conservation and efficiency improvement after
4.14the exemption filing. The commissioner may request such reports for up to ten years after
4.15the effective date of the exemption, unless the majority ownership of the large customer
4.16facility changes, in which case the commissioner may request additional reports for up to
4.17ten years after the change in ownership occurs. The commissioner may, within 180 days
4.18of receiving a report submitted under this paragraph, rescind any exemption granted under
4.19this paragraph upon a determination that the large customer facility is not continuing
4.20to make reasonable efforts to identify, evaluate, and implement energy conservation
4.21improvements. A large customer facility that is, under an order from the commissioner,
4.22exempt from the investment and expenditure requirements of paragraph (a) as of
4.23December 31, 2010, is not required to submit a report to retain its exempt status, except as
4.24otherwise provided in this paragraph with respect to ownership changes. No exempt large
4.25customer facility may participate in a utility conservation improvement program unless the
4.26owner of the facility submits a filing with the commissioner to withdraw its exemption.
4.27 (c) A commercial gas customer that is not a large customer facility and that
4.28purchases or acquires natural gas from a public utility having fewer than 600,000 natural
4.29gas customers in Minnesota may petition the commissioner to exempt gas utilities serving
4.30the commercial gas customer from the investment and expenditure requirements of
4.31paragraph (a) with respect to retail revenues attributable to the commercial gas customer.
4.32The petition must be supported by evidence demonstrating that the commercial gas
4.33customer has acquired or can reasonably acquire the capability to bypass use of the utility's
4.34gas distribution system by obtaining natural gas directly from a supplier not regulated by
4.35the commission. The commissioner shall grant the exemption if the commissioner finds
4.36that the petitioner has made the demonstration required by this paragraph.
5.1(d) The commissioner may require investments or spending greater than the amounts
5.2required under this subdivision for a public utility whose most recent advance forecast
5.3required under section 216B.2422 or 216C.17 projects a peak demand deficit of 100
5.4megawatts or greater within five years under midrange forecast assumptions.
5.5 (e) A public utility or owner of a large customer facility may appeal a decision of
5.6the commissioner under paragraph (b), (c), or (d) to the commission under subdivision
5.715. In reviewing a decision of the commissioner under paragraph (b), (c), or (d), the
5.8commission shall rescind the decision if it finds that the required investments or spending
5.9will: (1) not result in cost-effective energy conservation improvements; or (2) otherwise
5.10not be in the public interest.
5.11 Sec. 3. Minnesota Statutes 2010, section 216B.241, is amended by adding a
5.12subdivision to read:
5.13 Subd. 12. Conservation improvement by cooperative association or
5.14municipality. (a) This subdivision applies to:
5.15(1) a cooperative electric association that provides retail service to its members;
5.16(2) a municipality that provides electric service to retail customers; and
5.17(3) a municipality with gross operating revenues in excess of $5,000,000 from sales
5.18of natural gas to retail customers.
5.19(b) Each cooperative electric association and municipality subject to this subdivision
5.20shall spend and invest for energy conservation improvements under this subdivision
5.21the following amounts:
5.22(1) for a municipality, 0.5 percent of its gross operating revenues from the sale of
5.23gas and 1.5 percent of its gross operating revenues from the sale of electricity, excluding
5.24gross operating revenues from electric and gas service provided in the state to large
5.25electric customer facilities; and
5.26(2) for a cooperative electric association, 1.5 percent of its gross operating revenues
5.27from service provided in the state, excluding gross operating revenues from service
5.28provided in the state to large electric customer facilities indirectly through a distribution
5.29cooperative electric association.
5.30(c) Each municipality and cooperative electric association subject to this subdivision
5.31shall identify and implement energy conservation improvement spending and investments
5.32that are appropriate for the municipality or association, except that a municipality or
5.33association may not spend or invest for energy conservation improvements that directly
5.34benefit a large electric customer facility for which the commissioner has issued an
5.35exemption under subdivision 11, paragraph (b).
6.1(d) Each municipality and cooperative electric association subject to this subdivision
6.2may spend and invest annually up to ten percent of the total amount required to be spent
6.3and invested on energy conservation improvements under this subdivision on research
6.4and development projects that meet the definition of energy conservation improvement in
6.5subdivision 10 and that are funded directly by the municipality or cooperative electric
6.6association.
6.7(e) Load-management activities that do not reduce energy use but that increase the
6.8efficiency of the electric system may be used to meet 50 percent of the conservation
6.9investment and spending requirements of this subdivision.
6.10(f) A generation and transmission cooperative electric association that provides
6.11energy services to cooperative electric associations that provide electric service at retail to
6.12consumers may invest in energy conservation improvements on behalf of the associations
6.13it serves and may fulfill the spending and reporting requirements of this section on an
6.14aggregate basis. A municipal power agency or other not-for-profit entity that provides
6.15energy service to municipal utilities that provide electric service at retail may invest in
6.16energy conservation improvements on behalf of the municipal utilities it serves and may
6.17fulfill the spending and reporting requirements of this section on an aggregate basis,
6.18under an agreement between the municipal power agency or not-for-profit entity and each
6.19municipal utility for funding the investments.
6.20(g) At least every four years, on a schedule determined by the commissioner, each
6.21municipality or cooperative shall file an overview of its conservation improvement plan
6.22with the commissioner. With this overview, the municipality or cooperative shall also
6.23provide an evaluation to the commissioner detailing its energy conservation improvement
6.24spending and investments for the previous period. The evaluation must briefly describe
6.25each conservation program and must specify the energy savings or increased efficiency in
6.26the use of energy within the service territory of the utility or association that is the result of
6.27the spending and investments. The evaluation must analyze the cost-effectiveness of the
6.28utility's or association's conservation programs, using a list of baseline energy and capacity
6.29savings assumptions developed in consultation with the department. The commissioner
6.30shall review each evaluation and make recommendations, where appropriate, to the
6.31municipality or association to increase the effectiveness of conservation improvement
6.32activities. Up to three percent of a utility's conservation spending obligation under this
6.33section may be used for program pre-evaluation, testing, and monitoring and program
6.34evaluation. The overview and evaluation filed by a municipality with less than 60,000,000
6.35kilowatt-hours in annual retail sales of electric service may consist of a letter from the
6.36governing board of the municipal utility to the department providing the amount of annual
7.1conservation spending required of that municipality and certifying that the required
7.2amount has been spent on conservation programs under this subdivision.
7.3(h) The commissioner shall also review each evaluation for whether a portion of the
7.4money spent on residential conservation improvement programs is devoted to programs
7.5that directly address the needs of renters and low-income persons unless an insufficient
7.6number of appropriate programs are available. For the purposes of this subdivision and
7.7subdivision 24, low-income means an income at or below 50 percent of the state median
7.8income.
7.9(i) As part of its spending for conservation improvement, a municipality or
7.10association may contribute to the energy and conservation account. A municipality or
7.11association may propose to the commissioner to designate that all or a portion of funds
7.12contributed to the account be used for research and development projects that can best
7.13be implemented on a statewide basis. Any amount contributed must be remitted to the
7.14commissioner by February 1 of each year.
7.15 Sec. 4. Minnesota Statutes 2010, section 216B.241, is amended by adding a
7.16subdivision to read:
7.17 Subd. 13. Report. On an annual basis, the commissioner shall produce and
7.18make publicly available a report on the annual energy savings achieved by the energy
7.19conservation improvement programs for the two most recent years for which data is
7.20available. The commissioner shall report on program performance both in the aggregate
7.21and for each entity filing an energy conservation improvement plan for approval or review
7.22by the commissioner.
7.23 Sec. 5. Minnesota Statutes 2010, section 216B.241, is amended by adding a
7.24subdivision to read:
7.25 Subd. 14. Manner of filing and service. (a) A public utility, generation and
7.26transmission cooperative electric association, municipal power agency, cooperative
7.27electric association, and municipal utility shall submit filings to the department via the
7.28department's electronic filing system. The commissioner may approve an exemption
7.29from this requirement in the event an affected utility or association is unable to submit
7.30filings via the department's electronic filing system. All other interested parties shall
7.31submit filings to the department via the department's electronic filing system whenever
7.32practicable but may also file by personal delivery or by mail.
7.33 (b) Submission of a document to the department's electronic filing system constitutes
7.34service on the department. Where department rule requires service of a notice, order, or
8.1other document by the department, utility, association, or interested party upon persons on
8.2a service list maintained by the department, service may be made by personal delivery,
8.3mail, or electronic service, except that electronic service may only be made upon persons
8.4on the service list who have previously agreed in writing to accept electronic service at an
8.5electronic address provided to the department for electronic service purposes.
8.6 Sec. 6. Minnesota Statutes 2010, section 216B.241, is amended by adding a
8.7subdivision to read:
8.8 Subd. 15. Programs. (a) The commissioner may require public utilities to make
8.9investments and expenditures in energy conservation improvements, explicitly setting
8.10forth the interest rates, prices, and terms under which the improvements must be offered to
8.11the customers. The required programs must cover no more than a four-year period. Public
8.12utilities shall file conservation improvement plans by June 1, on a schedule determined
8.13by order of the commissioner, but at least every four years. Plans received by a public
8.14utility by June 1 must be approved or approved as modified by the commissioner by
8.15December 1 of that same year. The commissioner shall give special consideration and
8.16encouragement to programs that bring about significant net savings through the use of
8.17energy-efficient lighting. The commissioner shall evaluate the program on the basis of
8.18cost-effectiveness and the reliability of technologies employed. The commissioner's order
8.19must provide to the extent practicable for a free choice, by consumers participating in the
8.20program, of the device, method, material, or project constituting the energy conservation
8.21improvement and for a free choice of the seller, installer, or contractor of the energy
8.22conservation improvement, provided that the device, method, material, or project seller,
8.23installer, or contractor is duly licensed, certified, approved, or qualified, including under
8.24the residential conservation services program, where applicable.
8.25(b) Each public utility subject to subdivision 11 may spend and invest annually up to
8.26ten percent of the total amount required to be spent and invested on energy conservation
8.27improvements under this section by the utility on research and development projects
8.28that meet the definition of energy conservation improvement in subdivision 10 and that
8.29are funded directly by the public utility.
8.30(c) A public utility may not spend for or invest in energy conservation improvements
8.31that directly benefit a large electric customer facility for which the commissioner has
8.32issued an exemption pursuant to subdivision 11, paragraph (b). The commissioner shall
8.33consider and may require a utility to undertake a program suggested by an outside source,
8.34including a political subdivision or a nonprofit or community organization.
9.1(d) The commissioner may, by order, establish a list of programs that may be offered
9.2as energy conservation improvements by a public utility, municipal utility, cooperative
9.3electric association, or other entity providing conservation services under this section. The
9.4list of programs may include rebates for high-efficiency appliances, rebates or subsidies for
9.5high-efficiency lamps, small business energy audits, and building recommissioning. The
9.6commissioner may, by order, change this list to add or subtract programs the commissioner
9.7determines necessary to promote efficient and effective conservation programs.
9.8(e) A utility, political subdivision, or nonprofit or community organization that
9.9has suggested a program, the attorney general acting on behalf of consumers and
9.10small business interests, or a utility customer that has suggested a program and is not
9.11represented by the attorney general under section 8.33 may petition the commission to
9.12modify or revoke a department decision under this section, and the commission may do
9.13so if it determines that the program is not cost-effective, does not adequately address the
9.14residential conservation improvement needs of low-income persons, has a long-range
9.15negative effect on one or more classes of customers, or is otherwise not in the public
9.16interest. The commission shall reject a petition that, on its face, fails to make a reasonable
9.17argument that a program is not in the public interest.
9.18(f) The commissioner may order a public utility to include, with the filing of the
9.19utility's proposed conservation improvement plan under paragraph (a), the results of an
9.20independent audit of the utility's conservation improvement programs and expenditures
9.21performed by the department or an auditor with experience in the provision of energy
9.22conservation and energy efficiency services approved by the commissioner and chosen by
9.23the utility. The audit must specify the energy savings or increased efficiency in the use
9.24of energy within the service territory of the utility that is the result of the spending and
9.25investments. The audit must evaluate the cost-effectiveness of the utility's conservation
9.26programs.
9.27(g) Up to three percent of a utility's conservation spending obligation under this
9.28section may be used for program pre-evaluation, testing, and monitoring and program
9.29audit and evaluation.
9.30 Sec. 7. Minnesota Statutes 2010, section 216B.241, is amended by adding a
9.31subdivision to read:
9.32 Subd. 16. Energy and conservation account. The energy and conservation account
9.33is established in the special revenue fund in the state treasury. The commissioner must
9.34deposit money contributed under subdivisions 11 and 12 in the energy and conservation
9.35account in the special revenue fund. Money in the account is appropriated to the
10.1department for programs designed to meet the energy conservation needs of low-income
10.2persons and to make energy conservation improvements in areas not adequately served
10.3under subdivision 15, including research and development projects included in the
10.4definition of energy conservation improvement in subdivision 10. Interest on money
10.5in the account accrues to the account. Using information collected under section
10.6216C.02, subdivision 1, paragraph (b), the commissioner must, to the extent possible,
10.7allocate enough money to programs for low-income persons to ensure that their needs
10.8are being adequately addressed. The commissioner must request the commissioner
10.9of finance to transfer money from the account to the commissioner of education for
10.10an energy conservation program for low-income persons. In establishing programs,
10.11the commissioner must consult political subdivisions and nonprofit and community
10.12organizations, especially organizations engaged in providing energy and weatherization
10.13assistance to low-income persons. At least one program must address the need for energy
10.14conservation improvements in areas in which a high percentage of residents use fuel
10.15oil or propane to fuel their source of home heating. The commissioner may contract
10.16with a political subdivision, a nonprofit or community organization, a public utility,
10.17a municipality, or a cooperative electric association to implement its programs. The
10.18commissioner may provide grants to any person to conduct research and development
10.19projects in accordance with this section.
10.20 Sec. 8. Minnesota Statutes 2010, section 216B.241, is amended by adding a
10.21subdivision to read:
10.22 Subd. 17. Recovery of expenses. The commission shall allow a utility to recover
10.23expenses resulting from a conservation improvement program required by the department
10.24and contributions to the energy and conservation account, unless the recovery would
10.25be inconsistent with a financial incentive proposal approved by the commission. The
10.26commission shall allow a cooperative electric association subject to rate regulation under
10.27section 216B.026, to recover expenses resulting from energy conservation improvement
10.28programs, load-management programs, and assessments and contributions to the energy
10.29and conservation account unless the recovery would be inconsistent with a financial
10.30incentive proposal approved by the commission. In addition, a utility may file annually, or
10.31the Public Utilities Commission may require the utility to file, and the commission may
10.32approve, rate schedules containing provisions for the automatic adjustment of charges
10.33for utility service in direct relation to changes in the expenses of the utility for real
10.34and personal property taxes, fees, and permits, the amounts of which the utility cannot
10.35control. A public utility is eligible to file for adjustment for real and personal property
11.1taxes, fees, and permits under this subdivision only if, in the year previous to the year in
11.2which it files for adjustment, it has spent or invested at least 1.75 percent of its gross
11.3revenues from provision of electric service, excluding gross operating revenues from
11.4electric service provided in the state to large electric customer facilities for which the
11.5commissioner has issued an exemption under subdivision 11, paragraph (b), and 0.6
11.6percent of its gross revenues from provision of gas service, excluding gross operating
11.7revenues from gas services provided in the state to large electric customer facilities for
11.8which the commissioner has issued an exemption under subdivision 11, paragraph (b), for
11.9that year for energy conservation improvements under this section.
11.10 Sec. 9. Minnesota Statutes 2010, section 216B.241, is amended by adding a
11.11subdivision to read:
11.12 Subd. 18. Ownership of energy conservation improvement. An energy
11.13conservation improvement made to or installed in a building in accordance with this
11.14section, except systems owned by the utility and designed to turn off, limit, or vary the
11.15delivery of energy, are the exclusive property of the owner of the building except to the
11.16extent that the improvement is subjected to a security interest in favor of the utility in
11.17case of a loan to the building owner. The utility has no liability for loss, damage, or
11.18injury caused directly or indirectly by an energy conservation improvement except for
11.19negligence by the utility in purchase, installation, or modification of the product.
11.20 Sec. 10. Minnesota Statutes 2010, section 216B.241, is amended by adding a
11.21subdivision to read:
11.22 Subd. 19. Federal law prohibitions. If investments by public utilities in energy
11.23conservation improvements are in any manner prohibited or restricted by federal law
11.24and there is a provision under which the prohibition or restriction may be waived, then
11.25the commission, the governor, or any other necessary state agency or officer shall take
11.26all necessary and appropriate steps to secure a waiver with respect to those public utility
11.27investments in energy conservation improvements included in this section.
11.28 Sec. 11. Minnesota Statutes 2010, section 216B.241, is amended by adding a
11.29subdivision to read:
11.30 Subd. 20. Efficient lighting program. (a) Each public utility, cooperative electric
11.31association, and municipal utility that provides electric service to retail customers shall
11.32include as part of its conservation improvement activities a program to strongly encourage
11.33the use of fluorescent and high-intensity discharge lamps. The program must include at
12.1least a public information campaign to encourage use of the lamps and proper management
12.2of spent lamps by all customer classifications.
12.3(b) A public utility that provides electric service at retail to 200,000 or more
12.4customers shall establish, either directly or through contracts with other persons, including
12.5lamp manufacturers, distributors, wholesalers, retailers, and local government units, a
12.6system to collect for delivery to a reclamation or recycling facility spent fluorescent and
12.7high-intensity discharge lamps from households and small businesses, as defined in
12.8section 645.445, that generate an average of fewer than ten spent lamps per year.
12.9(c) A collection system must include establishing reasonably convenient locations
12.10for collecting spent lamps from households and financial incentives sufficient to encourage
12.11spent lamp generators to take the lamps to the collection locations. Financial incentives
12.12may include coupons for purchase of new fluorescent or high-intensity discharge lamps,
12.13a cash-back system, or any other financial incentive or group of incentives designed
12.14to collect the maximum number of spent lamps from households and small businesses
12.15that is reasonably feasible.
12.16(d) A public utility that provides electric service at retail to fewer than 200,000
12.17customers, a cooperative electric association, or a municipal utility that provides electric
12.18service at retail to customers may establish a collection system under paragraphs (b) and
12.19(c) as part of conservation improvement activities required under this section.
12.20(e) The commissioner of the Pollution Control Agency may not, unless clearly
12.21required by federal law, require a public utility, cooperative electric association, or
12.22municipality that establishes a household fluorescent and high-intensity discharge lamp
12.23collection system under this section to manage the lamps as hazardous waste as long as
12.24the lamps are managed to avoid breakage and are delivered to a recycling or reclamation
12.25facility that removes mercury and other toxic materials contained in the lamps prior to
12.26placement of the lamps in solid waste.
12.27(f) If a public utility, cooperative electric association, or municipal utility contracts
12.28with a local government unit to provide a collection system under this subdivision,
12.29the contract must provide for payment to the local government unit of all the unit's
12.30incremental costs of collecting and managing spent lamps.
12.31(g) All the costs incurred by a public utility, cooperative electric association, or
12.32municipal utility for promotion and collection of fluorescent and high-intensity discharge
12.33lamps under this subdivision are conservation improvement spending under this section.
12.34 Sec. 12. Minnesota Statutes 2010, section 216B.241, is amended by adding a
12.35subdivision to read:
13.1 Subd. 21. Qualifying solar energy project. A utility or association may include
13.2in its conservation plan programs for the installation of qualifying solar energy projects
13.3as defined by section 216B.2411 to the extent of the spending allowed for generation
13.4projects by section 216B.2411.
13.5 Sec. 13. Minnesota Statutes 2010, section 216B.241, is amended by adding a
13.6subdivision to read:
13.7 Subd. 22. Biomethane purchases. (a) A natural gas utility may include in its
13.8conservation plan purchases of biomethane, and may use up to five percent of the total
13.9amount to be spent on energy conservation improvements under this section for that
13.10purpose. The cost-effectiveness of biomethane purchases may be determined by a
13.11different standard than for other energy conservation improvements under this section if
13.12the commissioner determines that doing so is in the public interest in order to encourage
13.13biomethane purchases.
13.14(b) For the purposes of this subdivision, "biomethane" means biogas produced
13.15through anaerobic digestion of biomass, gasification of biomass, or other effective
13.16conversion processes, that is cleaned and purified into biomethane that meets natural gas
13.17utility quality specifications for use in a natural gas utility distribution system.
13.18 Sec. 14. Minnesota Statutes 2010, section 216B.241, is amended by adding a
13.19subdivision to read:
13.20 Subd. 23. Large solar electric generating plant. (a) For the purpose of this
13.21subdivision:
13.22(1) "project" means a solar electric generation project consisting of arrays of solar
13.23photovoltaic cells with a capacity of up to two megawatts located on the site of a closed
13.24landfill in Olmsted County owned by the Minnesota Pollution Control Agency; and
13.25(2) "cooperative electric association" means a generation and transmission
13.26cooperative electric association that has a member distribution cooperative association to
13.27which it provides wholesale electric service in whose service territory a project is located.
13.28(b) A cooperative electric association may elect to count all of its purchases of
13.29electric energy from a project toward its energy objective or standard under section
13.30216B.1691.
13.31(c) A cooperative electric association may include in its conservation plan purchases
13.32of electric energy from a project.
14.1 Sec. 15. Minnesota Statutes 2010, section 216B.241, is amended by adding a
14.2subdivision to read:
14.3 Subd. 24. Low-income programs. (a) The commissioner shall ensure that each
14.4utility and association provides low-income programs. When approving spending
14.5goals for low-income programs, the commissioner shall consider historic spending and
14.6participation levels and the number of low-income persons residing in the utility's service
14.7territory. A utility that furnishes gas service must spend at least 0.2 percent of its gross
14.8operating revenue from residential customers in the state on low-income programs. A
14.9utility or association that furnishes electric service must spend at least 0.2 percent of its
14.10gross operating revenue from residential customers in the state on low-income programs.
14.11For a generation and transmission cooperative association, this requirement shall apply to
14.12each association's members' aggregate gross operating revenue from sale of electricity to
14.13residential customers in the state.
14.14 (b) To meet the requirements of paragraph (a), a utility or association may contribute
14.15money to the energy and conservation account. An energy conservation improvement plan
14.16must state the amount, if any, of low-income energy conservation improvement funds the
14.17utility or association will contribute to the energy and conservation account. Contributions
14.18must be remitted to the commissioner by February 1 of each year.
14.19 (c) The commissioner shall establish low-income programs to utilize money
14.20contributed to the energy and conservation account under paragraph (b). In establishing
14.21low-income programs, the commissioner shall consult political subdivisions, utilities, and
14.22nonprofit and community organizations, especially organizations engaged in providing
14.23energy and weatherization assistance to low-income persons. Money contributed to
14.24the energy and conservation account under paragraph (b) must provide programs for
14.25low-income persons, including low-income renters, in the service territory of the
14.26utility or association providing the money. The commissioner shall record and report
14.27expenditures and energy savings achieved as a result of low-income programs funded
14.28through the energy and conservation account in the report required under subdivision 13.
14.29The commissioner may contract with a political subdivision, nonprofit or community
14.30organization, public utility, municipality, or cooperative electric association to implement
14.31low-income programs funded through the energy and conservation account.
14.32 (d) A utility or association may petition the commissioner to modify its required
14.33spending under paragraph (a) if the utility or association and the commissioner have been
14.34unable to expend the amount required under paragraph (a) for three consecutive years.
14.35 Sec. 16. REPEALER.
15.1(a) Minnesota Statutes 2010, section 216B.241, subdivisions 1b, 1d, 1e, 1f, 1g, 2a,
15.22b, 2c, 3, 4, 5, 5a, 5b, 5c, 7, 8, and 9, are repealed.
15.3(b) Minnesota Statutes 2011 Supplement, section 216B.241, subdivisions 1, 1a,
15.41c, and 2, are repealed.
