Bill Text: MN SF1349 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Public utilities customers energy conservation improvement program exemption seeking authorization
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2011-05-02 - Referred to Energy, Utilities and Telecommunications [SF1349 Detail]
Download: Minnesota-2011-SF1349-Introduced.html
1.2relating to energy; permitting certain energy customers to seek exemptions from a
1.3utility's conservation investment program; making clarifying changes;amending
1.4Minnesota Statutes 2010, sections 216B.02, by adding a subdivision; 216B.16,
1.5subdivision 6b; 216B.1636, subdivision 1; 216B.241, subdivisions 1, 1a, 2.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2010, section 216B.02, is amended by adding a
1.8subdivision to read:
1.9 Subd. 1b. Commissioner. "Commissioner" means the commissioner of the
1.10Minnesota Department of Commerce.
1.11 Sec. 2. Minnesota Statutes 2010, section 216B.16, subdivision 6b, is amended to read:
1.12 Subd. 6b. Energy conservation improvement. (a) Except as otherwise provided
1.13in this subdivision, all investments and expenses of a public utility as defined in section
1.14216B.241, subdivision 1
, paragraph (i), incurred in connection with energy conservation
1.15improvements shall be recognized and included by the commission in the determination of
1.16just and reasonable rates as if the investments and expenses were directly made or incurred
1.17by the utility in furnishing utility service.
1.18 (b) The commission shall not include investments and expenses for energy
1.19conservation improvementsshall not be included by the commission in the determination
1.20of determining (i) just and reasonable electric and gas rates for retail electric and gas
1.21service provided to large electric customer facilities that have been exempted by the
1.22commissionerof the department pursuant to under section
216B.241, subdivision 1a ,
1.23paragraph (b); or (ii) just and reasonable gas rates for large energy facilities, large gas
1.24customer facilities that have been exempted by the commissioner under section 216B.241,
2.1subdivision 1a, paragraph (d), or by the commission under section 216B.241, subdivision
2.22, or commercial gas customer facilities that are not large gas customer facilities that have
2.3been exempted by the commissioner under section 216B.241, subdivision 1a, paragraph
2.4(e), or by the commission under section 216B.241, subdivision 2.
2.5 (c) The commission may permit a public utility to file rate schedules providing for
2.6annual recovery of the costs of energy conservation improvements. These rate schedules
2.7may be applicable to less than all the customers in a class of retail customers if necessary
2.8to reflect the requirements of section216B.241 . The commission shall allow a public
2.9utility, without requiring a general rate filing under this section, to reduce the electric and
2.10gas rates applicable to large electric customer facilities that have been exempted by the
2.11commissionerof the department pursuant to under section
216B.241, subdivision 1a ,
2.12paragraph (b), or by the commission under section 216B.241, subdivision 2, and to reduce
2.13the gas rate applicable to a large energy facility, a large gas customer facility or commercial
2.14gas customer facility that is not a large gas customer facility that has been exempted by
2.15the commissioner under section 216B.241, subdivision 1a, paragraph (d) or (e), or by
2.16the commission under section 216B.241, subdivision 2, by an amount that reflects the
2.17elimination of energy conservation improvement investments or expenditures for those
2.18facilities. In the event that the commission has set electric or gas rates based on the use of
2.19an accounting methodology that results in the cost of conservation improvements being
2.20recovered from utility customers over a period of years, the rate reduction may occur in a
2.21series of steps to coincide with the recovery of balances due to the utility for conservation
2.22improvements made by the utility on or before December 31, 2007.
2.23 (d) Investments and expenses of a public utility shall not include electric utility
2.24infrastructure costs as defined in section216B.1636, subdivision 1 , paragraph (b).
2.25 Sec. 3. Minnesota Statutes 2010, section 216B.1636, subdivision 1, is amended to read:
2.26 Subdivision 1. Definitions. (a) "Electric utility" means a public utility as defined in
2.27section216B.02, subdivision 4 , that furnishes electric service to retail customers.
2.28 (b) "Electric utility infrastructure costs" or "EUIC" means costs for electric utility
2.29infrastructure projects that were not included in the electric utility's rate base in its most
2.30recent general rate case.
2.31 (c) "Electric utility infrastructure projects" means projects owned by an electric
2.32utility that:
2.33 (1) replace or modify existing electric utility infrastructure, including utility-owned
2.34buildings, if the replacement or modification is shown to conserve energy or use energy
2.35more efficiently, consistent with section216B.241, subdivision 1c ; or
3.1 (2) conserve energy or use energy more efficiently by using waste heat recovery
3.2converted into electricity as defined in section216B.241, subdivision 1 , paragraph (n) (o).
3.3 Sec. 4. Minnesota Statutes 2010, section 216B.241, subdivision 1, is amended to read:
3.4 Subdivision 1. Definitions. For purposes of this section and section216B.16,
3.5subdivision 6b , the terms defined in this subdivision have the meanings given them.
3.6 (a) "Commission" means the Public Utilities Commission.
3.7 (b) "Commissioner" means the commissioner of commerce.
3.8 (c) "Customer facility" means all buildings, structures, equipment, and installations
3.9at a single site.
3.10 (d) "Department" means the Department of Commerce.
3.11 (e) "Energy conservation" means demand-side management of energy supplies
3.12resulting in a net reduction in energy use. Load management that reduces overall energy
3.13use is energy conservation.
3.14 (f) "Energy conservation improvement" means a project that results in energy
3.15efficiency or energy conservation. Energy conservation improvement may include waste
3.16heat recovery converted into electricity but does not include electric utility infrastructure
3.17projects approved by the commission under section216B.1636 .
3.18 (g) "Energy efficiency" means measures or programs, including energy conservation
3.19measures or programs, that target consumer behavior, equipment, processes, or devices
3.20designed to produce either an absolute decrease in consumption of electric energy or
3.21natural gas or a decrease in consumption of electric energy or natural gas on a per unit
3.22of production basis without a reduction in the quality or level of service provided to
3.23the energy consumer.
3.24 (h) "Gross annual retail energy sales" means annual electric sales to all retail
3.25customers in a utility's or association's Minnesota service territory or natural gas
3.26throughput to all retail customers, including natural gas transportation customers, on a
3.27utility's distribution system in Minnesota. For purposes of this section, gross annual
3.28retail energy sales exclude:
3.29(1) gas sales to:
3.30(i) a large energy facility;
3.31(ii) a large gas customer facility exempted by the commissioner under subdivision
3.321a, paragraph (d), or by the commission under section 216B.241, subdivision 2; and
3.33(iii) a commercial gas customer facility exempted by the commissioner under
3.34subdivision 1a, paragraph (e), or by the commissioner under section 216B.241, subdivision
3.352; and
4.1(2) gas and electric sales to a large electric customer facility exempted by the
4.2commissioner under subdivision 1a, paragraph (b), or by the commission under
4.3subdivision 2.
4.4 (i) "Investments and expenses of a public utility" includes the investments and
4.5expenses incurred by a public utility in connection with an energy conservation
4.6improvement, including but not limited to:
4.7 (1) the differential in interest cost between the market rate and the rate charged on a
4.8no-interest or below-market interest loan made by a public utility to a customer for the
4.9purchase or installation of an energy conservation improvement;
4.10 (2) the difference between the utility's cost of purchase or installation of energy
4.11conservation improvements and any price charged by a public utility to a customer for
4.12such improvements.
4.13 (j) "Large electric customer facility" means a customer facility that imposes a
4.14peak electrical demand on an electric utility's system of not less than 20,000 kilowatts,
4.15measured in the same way as the utility that serves the customer facility measures
4.16electrical demand for billing purposes, and for which electric services are provided at
4.17retail on a single bill by a utility operating in the state.
4.18 (k) "Large energy facility" has the meaning given it in section216B.2421 ,
4.19subdivision 2, clause (1).
4.20 (l) "Large gas customer facility" means a customer facility that consumes 500
4.21million cubic feet or more of natural gas annually.
4.22(m) "Load management" means an activity, service, or technology to change the
4.23timing or the efficiency of a customer's use of energy that allows a utility or a customer to
4.24respond to wholesale market fluctuations or to reduce peak demand for energy or capacity.
4.25(m) (n) "Low-income programs" means energy conservation improvement programs
4.26that directly serve the needs of low-income persons, including low-income renters.
4.27(n) (o) "Waste heat recovery converted into electricity" means an energy recovery
4.28process that converts otherwise lost energy from the heat of exhaust stacks or pipes used
4.29for engines or manufacturing or industrial processes, or the reduction of high pressure
4.30in water or gas pipelines.
4.31 Sec. 5. Minnesota Statutes 2010, section 216B.241, subdivision 1a, is amended to read:
4.32 Subd. 1a. Investment, expenditure, and contribution; public utility. (a) For
4.33purposes of this subdivision and subdivision 2, "public utility" has the meaning given it
4.34in section216B.02, subdivision 4 . Each public utility shall spend and invest for energy
5.1conservation improvements under this subdivision and subdivision 2 the following
5.2amounts:
5.3 (1) for a utility that furnishes gas service, 0.5 percent of its gross operating revenues
5.4from service provided in the state;
5.5 (2) for a utility that furnishes electric service, 1.5 percent of its gross operating
5.6revenues from service provided in the state; and
5.7 (3) for a utility that furnishes electric service and that operates a nuclear-powered
5.8electric generating plant within the state, two percent of its gross operating revenues
5.9from service provided in the state.
5.10 For purposes of this paragraph (a), "gross operating revenues" do not include
5.11revenues from large electric customer facilities exempted by the commissioner under
5.12paragraph (b).
5.13 (b) The owner of a large electric customer facility may petition the commissioner
5.14to exempt both electric and gas utilities serving the large energy customer facility from
5.15the investment and expenditure requirements of paragraph (a) with respect to retail
5.16revenues attributable to the facility. At a minimum, the petition must be supported by
5.17evidence relating to competitive or economic pressures on the customer and a showing
5.18by the customer of reasonable efforts to identify, evaluate, and implement cost-effective
5.19conservation improvements at the facility. If a petition is filed on or before October 1 of
5.20any year, the order of the commissioner to exempt revenues attributable to the facility can
5.21be effective no earlier than January 1 of the following year. The commissioner shall not
5.22grant an exemption if the commissioner determines that granting the exemption is contrary
5.23to the public interest. The commissioner may, after investigation, rescind any exemption
5.24granted under this paragraph upon a determination that the customer is not continuing
5.25to make reasonable efforts to identify, evaluate, and implement energy conservation
5.26improvements at the large electric customer facility. For the purposes of investigations
5.27by the commissioner under this paragraph, the owner of any large electric or large gas
5.28customer facility shall, upon request, provide the commissioner with updated information
5.29comparable to that originally supplied in or with the owner's original petition under this
5.30paragraph.
5.31 (c) The commissioner may require investments or spending greater than the amounts
5.32required under this subdivision for a public utility whose most recent advance forecast
5.33required under section216B.2422 or
216C.17 projects a peak demand deficit of 100
5.34megawatts or greater within five years under midrange forecast assumptions.
5.35 (d) The owner of a large gas customer facility may petition the commissioner
5.36to exempt a gas utility serving the large gas customer facility from the investment and
6.1expenditure requirements of paragraph (a) with respect to retail revenues attributable
6.2to the facility. At a minimum, the petition must be supported by evidence relating to
6.3competitive or economic pressures on the customer and a showing by the customer
6.4of reasonable efforts to identify, evaluate, and implement cost-effective conservation
6.5improvements at the facility. If a petition is filed on or before October 1 of any year, the
6.6order of the commissioner to exempt revenues attributable to the facility can be effective
6.7no earlier than January 1 of the following year. The commissioner shall not grant an
6.8exemption if the commissioner determines that granting the exemption is contrary to the
6.9public interest. The commissioner may, after investigation, rescind any exemption granted
6.10under this paragraph upon a determination that the customer is not continuing to make
6.11reasonable efforts to identify, evaluate, and implement energy conservation improvements
6.12at the large gas customer facility. For the purposes of investigations by the commissioner
6.13under this paragraph, the owner of any large gas customer facility shall, upon request,
6.14provide the commissioner with updated information comparable to that originally supplied
6.15in or with the owner's original petition under this paragraph.
6.16(e) A commercial gas customer facility that is not a large gas customer facility may
6.17petition the commissioner to exempt gas utilities serving the commercial gas customer
6.18facility from the investment and expenditure requirements of paragraph (a) with respect
6.19to retail revenues attributable to the facility. The petition must be supported by evidence
6.20demonstrating that the commercial gas customer facility has or can reasonably acquire the
6.21capability to bypass use of the utility's gas distribution system by obtaining natural gas
6.22directly from a supplier not regulated by the commission.
6.23(f) A public utility or owner of a large electric or large gas customer facility, or of a
6.24commercial gas customer facility that is not a large gas customer facility, may appeal a
6.25decision of the commissioner under paragraph (b)or, (c), (d), or (e) to the commission
6.26under subdivision 2. In reviewing a decision of the commissioner under paragraph (b)
6.27or, (c), (d), or (e), the commission shall rescind the decision if it finds that the required
6.28investments or spending will:
6.29 (1) not result in cost-effective energy conservation improvements; or
6.30 (2) otherwise not be in the public interest.
6.31 Sec. 6. Minnesota Statutes 2010, section 216B.241, subdivision 2, is amended to read:
6.32 Subd. 2. Programs. (a) The commissioner may require public utilities to make
6.33investments and expenditures in energy conservation improvements, explicitly setting
6.34forth the interest rates, prices, and terms under which the improvements must be offered to
6.35the customers. The required programs must cover no more than a three-year period. Public
7.1utilities shall file conservation improvement plans by June 1, on a schedule determined by
7.2order of the commissioner, but at least every three years. Plans received by a public utility
7.3by June 1 must be approved or approved as modified by the commissioner by December
7.41 of that same year. The commissioner shall evaluate the program on the basis of
7.5cost-effectiveness and the reliability of technologies employed. The commissioner's order
7.6must provide to the extent practicable for a free choice, by consumers participating in the
7.7program, of the device, method, material, or project constituting the energy conservation
7.8improvement and for a free choice of the seller, installer, or contractor of the energy
7.9conservation improvement, provided that the device, method, material, or project seller,
7.10installer, or contractor is duly licensed, certified, approved, or qualified, including under
7.11the residential conservation services program, where applicable.
7.12 (b) The commissioner may require a utility to make an energy conservation
7.13improvement investment or expenditure whenever the commissioner finds that the
7.14improvement will result in energy savings at a total cost to the utility less than the cost
7.15to the utility to produce or purchase an equivalent amount of new supply of energy. The
7.16commissioner shall nevertheless ensure that every public utility operate one or more
7.17programs under periodic review by the department.
7.18 (c) Each public utility subject to subdivision 1a may spend and invest annually up to
7.19ten percent of the total amount required to be spent and invested on energy conservation
7.20improvements under this section by the utility on research and development projects
7.21that meet the definition of energy conservation improvement in subdivision 1 and that
7.22are funded directly by the public utility.
7.23 (d) A public utility may not spend for or invest in energy conservation improvements
7.24that directly benefit a large energy facility or a large electric customer facility for which
7.25the commissioner has issued an exemption pursuant to subdivision 1a, paragraph (b).
7.26The commissioner shall consider and may require a utility to undertake a program
7.27suggested by an outside source, including a political subdivision, a nonprofit corporation,
7.28or community organization.
7.29 (e) A utility, a political subdivision, or a nonprofit or community organization
7.30that has suggested a program, the attorney general acting on behalf of consumers and
7.31small business interests, or a utility customer that has suggested a program and is not
7.32represented by the attorney general under section8.33 may petition the commission to
7.33modify or revoke a department decision under this section, and the commission may do
7.34so if it determines that the program is not cost-effective, does not adequately address the
7.35residential conservation improvement needs of low-income persons, has a long-range
7.36negative effect on one or more classes of customers, or is otherwise not in the public
8.1interest. The commission shall reject a petition that, on its face, fails to make a reasonable
8.2argument that a program is not in the public interest.
8.3 (f) The commissioner may order a public utility to include, with the filing of the
8.4utility's proposed conservation improvement plan under paragraph (a), the results of an
8.5independent audit of the utility's conservation improvement programs and expenditures
8.6performed by the department or an auditor with experience in the provision of energy
8.7conservation and energy efficiency services approved by the commissioner and chosen by
8.8the utility. The audit must specify the energy savings or increased efficiency in the use
8.9of energy within the service territory of the utility that is the result of the spending and
8.10investments. The audit must evaluate the cost-effectiveness of the utility's conservation
8.11programs.
8.12(g) A gas utility may not spend for or invest in energy conservation improvements
8.13that directly benefit a large gas customer facility or commercial gas customer facility that
8.14is not a large gas customer facility for which the commissioner has issued an exemption
8.15pursuant to subdivision 1a, paragraph (d) or (e). The commissioner shall consider and
8.16may require a utility to undertake a program suggested by an outside source, including a
8.17political subdivision, a nonprofit corporation, or community organization.
8.18 Sec. 7. EFFECTIVE DATE.
8.19Sections 1 to 6 are effective the day following final enactment.
1.3utility's conservation investment program; making clarifying changes;amending
1.4Minnesota Statutes 2010, sections 216B.02, by adding a subdivision; 216B.16,
1.5subdivision 6b; 216B.1636, subdivision 1; 216B.241, subdivisions 1, 1a, 2.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2010, section 216B.02, is amended by adding a
1.8subdivision to read:
1.9 Subd. 1b. Commissioner. "Commissioner" means the commissioner of the
1.10Minnesota Department of Commerce.
1.11 Sec. 2. Minnesota Statutes 2010, section 216B.16, subdivision 6b, is amended to read:
1.12 Subd. 6b. Energy conservation improvement. (a) Except as otherwise provided
1.13in this subdivision, all investments and expenses of a public utility as defined in section
1.15improvements shall be recognized and included by the commission in the determination of
1.16just and reasonable rates as if the investments and expenses were directly made or incurred
1.17by the utility in furnishing utility service.
1.18 (b) The commission shall not include investments and expenses for energy
1.19conservation improvements
1.20
1.21service provided to large electric customer facilities that have been exempted by the
1.22commissioner
1.23paragraph (b); or (ii) just and reasonable gas rates for large energy facilities, large gas
1.24customer facilities that have been exempted by the commissioner under section 216B.241,
2.1subdivision 1a, paragraph (d), or by the commission under section 216B.241, subdivision
2.22, or commercial gas customer facilities that are not large gas customer facilities that have
2.3been exempted by the commissioner under section 216B.241, subdivision 1a, paragraph
2.4(e), or by the commission under section 216B.241, subdivision 2.
2.5 (c) The commission may permit a public utility to file rate schedules providing for
2.6annual recovery of the costs of energy conservation improvements. These rate schedules
2.7may be applicable to less than all the customers in a class of retail customers if necessary
2.8to reflect the requirements of section
2.9utility, without requiring a general rate filing under this section, to reduce the electric and
2.10gas rates applicable to large electric customer facilities that have been exempted by the
2.11commissioner
2.12paragraph (b), or by the commission under section 216B.241, subdivision 2, and to reduce
2.13the gas rate applicable to a large energy facility, a large gas customer facility or commercial
2.14gas customer facility that is not a large gas customer facility that has been exempted by
2.15the commissioner under section 216B.241, subdivision 1a, paragraph (d) or (e), or by
2.16the commission under section 216B.241, subdivision 2, by an amount that reflects the
2.17elimination of energy conservation improvement investments or expenditures for those
2.18facilities. In the event that the commission has set electric or gas rates based on the use of
2.19an accounting methodology that results in the cost of conservation improvements being
2.20recovered from utility customers over a period of years, the rate reduction may occur in a
2.21series of steps to coincide with the recovery of balances due to the utility for conservation
2.22improvements made by the utility on or before December 31, 2007.
2.23 (d) Investments and expenses of a public utility shall not include electric utility
2.24infrastructure costs as defined in section
2.25 Sec. 3. Minnesota Statutes 2010, section 216B.1636, subdivision 1, is amended to read:
2.26 Subdivision 1. Definitions. (a) "Electric utility" means a public utility as defined in
2.27section
2.28 (b) "Electric utility infrastructure costs" or "EUIC" means costs for electric utility
2.29infrastructure projects that were not included in the electric utility's rate base in its most
2.30recent general rate case.
2.31 (c) "Electric utility infrastructure projects" means projects owned by an electric
2.32utility that:
2.33 (1) replace or modify existing electric utility infrastructure, including utility-owned
2.34buildings, if the replacement or modification is shown to conserve energy or use energy
2.35more efficiently, consistent with section
3.1 (2) conserve energy or use energy more efficiently by using waste heat recovery
3.2converted into electricity as defined in section
3.3 Sec. 4. Minnesota Statutes 2010, section 216B.241, subdivision 1, is amended to read:
3.4 Subdivision 1. Definitions. For purposes of this section and section
3.5subdivision 6b
3.6 (a) "Commission" means the Public Utilities Commission.
3.7 (b) "Commissioner" means the commissioner of commerce.
3.8 (c) "Customer facility" means all buildings, structures, equipment, and installations
3.9at a single site.
3.10 (d) "Department" means the Department of Commerce.
3.11 (e) "Energy conservation" means demand-side management of energy supplies
3.12resulting in a net reduction in energy use. Load management that reduces overall energy
3.13use is energy conservation.
3.14 (f) "Energy conservation improvement" means a project that results in energy
3.15efficiency or energy conservation. Energy conservation improvement may include waste
3.16heat recovery converted into electricity but does not include electric utility infrastructure
3.17projects approved by the commission under section
3.18 (g) "Energy efficiency" means measures or programs, including energy conservation
3.19measures or programs, that target consumer behavior, equipment, processes, or devices
3.20designed to produce either an absolute decrease in consumption of electric energy or
3.21natural gas or a decrease in consumption of electric energy or natural gas on a per unit
3.22of production basis without a reduction in the quality or level of service provided to
3.23the energy consumer.
3.24 (h) "Gross annual retail energy sales" means annual electric sales to all retail
3.25customers in a utility's or association's Minnesota service territory or natural gas
3.26throughput to all retail customers, including natural gas transportation customers, on a
3.27utility's distribution system in Minnesota. For purposes of this section, gross annual
3.28retail energy sales exclude:
3.29(1) gas sales to:
3.30(i) a large energy facility;
3.31(ii) a large gas customer facility exempted by the commissioner under subdivision
3.321a, paragraph (d), or by the commission under section 216B.241, subdivision 2; and
3.33(iii) a commercial gas customer facility exempted by the commissioner under
3.34subdivision 1a, paragraph (e), or by the commissioner under section 216B.241, subdivision
3.352; and
4.1(2) gas and electric sales to a large electric customer facility exempted by the
4.2commissioner under subdivision 1a, paragraph (b), or by the commission under
4.3subdivision 2.
4.4 (i) "Investments and expenses of a public utility" includes the investments and
4.5expenses incurred by a public utility in connection with an energy conservation
4.6improvement, including but not limited to:
4.7 (1) the differential in interest cost between the market rate and the rate charged on a
4.8no-interest or below-market interest loan made by a public utility to a customer for the
4.9purchase or installation of an energy conservation improvement;
4.10 (2) the difference between the utility's cost of purchase or installation of energy
4.11conservation improvements and any price charged by a public utility to a customer for
4.12such improvements.
4.13 (j) "Large electric customer facility" means a customer facility that imposes a
4.14peak electrical demand on an electric utility's system of not less than 20,000 kilowatts,
4.15measured in the same way as the utility that serves the customer facility measures
4.16electrical demand for billing purposes, and for which electric services are provided at
4.17retail on a single bill by a utility operating in the state.
4.18 (k) "Large energy facility" has the meaning given it in section
4.19subdivision 2, clause (1).
4.20 (l) "Large gas customer facility" means a customer facility that consumes 500
4.21million cubic feet or more of natural gas annually.
4.22(m) "Load management" means an activity, service, or technology to change the
4.23timing or the efficiency of a customer's use of energy that allows a utility or a customer to
4.24respond to wholesale market fluctuations or to reduce peak demand for energy or capacity.
4.25
4.26that directly serve the needs of low-income persons, including low-income renters.
4.27
4.28process that converts otherwise lost energy from the heat of exhaust stacks or pipes used
4.29for engines or manufacturing or industrial processes, or the reduction of high pressure
4.30in water or gas pipelines.
4.31 Sec. 5. Minnesota Statutes 2010, section 216B.241, subdivision 1a, is amended to read:
4.32 Subd. 1a. Investment, expenditure, and contribution; public utility. (a) For
4.33purposes of this subdivision and subdivision 2, "public utility" has the meaning given it
4.34in section
5.1conservation improvements under this subdivision and subdivision 2 the following
5.2amounts:
5.3 (1) for a utility that furnishes gas service, 0.5 percent of its gross operating revenues
5.4from service provided in the state;
5.5 (2) for a utility that furnishes electric service, 1.5 percent of its gross operating
5.6revenues from service provided in the state; and
5.7 (3) for a utility that furnishes electric service and that operates a nuclear-powered
5.8electric generating plant within the state, two percent of its gross operating revenues
5.9from service provided in the state.
5.10 For purposes of this paragraph (a), "gross operating revenues" do not include
5.11revenues from large electric customer facilities exempted by the commissioner under
5.12paragraph (b).
5.13 (b) The owner of a large electric customer facility may petition the commissioner
5.14to exempt both electric and gas utilities serving the large energy customer facility from
5.15the investment and expenditure requirements of paragraph (a) with respect to retail
5.16revenues attributable to the facility. At a minimum, the petition must be supported by
5.17evidence relating to competitive or economic pressures on the customer and a showing
5.18by the customer of reasonable efforts to identify, evaluate, and implement cost-effective
5.19conservation improvements at the facility. If a petition is filed on or before October 1 of
5.20any year, the order of the commissioner to exempt revenues attributable to the facility can
5.21be effective no earlier than January 1 of the following year. The commissioner shall not
5.22grant an exemption if the commissioner determines that granting the exemption is contrary
5.23to the public interest. The commissioner may, after investigation, rescind any exemption
5.24granted under this paragraph upon a determination that the customer is not continuing
5.25to make reasonable efforts to identify, evaluate, and implement energy conservation
5.26improvements at the large electric customer facility. For the purposes of investigations
5.27by the commissioner under this paragraph, the owner of any large electric or large gas
5.28customer facility shall, upon request, provide the commissioner with updated information
5.29comparable to that originally supplied in or with the owner's original petition under this
5.30paragraph.
5.31 (c) The commissioner may require investments or spending greater than the amounts
5.32required under this subdivision for a public utility whose most recent advance forecast
5.33required under section
5.34megawatts or greater within five years under midrange forecast assumptions.
5.35 (d) The owner of a large gas customer facility may petition the commissioner
5.36to exempt a gas utility serving the large gas customer facility from the investment and
6.1expenditure requirements of paragraph (a) with respect to retail revenues attributable
6.2to the facility. At a minimum, the petition must be supported by evidence relating to
6.3competitive or economic pressures on the customer and a showing by the customer
6.4of reasonable efforts to identify, evaluate, and implement cost-effective conservation
6.5improvements at the facility. If a petition is filed on or before October 1 of any year, the
6.6order of the commissioner to exempt revenues attributable to the facility can be effective
6.7no earlier than January 1 of the following year. The commissioner shall not grant an
6.8exemption if the commissioner determines that granting the exemption is contrary to the
6.9public interest. The commissioner may, after investigation, rescind any exemption granted
6.10under this paragraph upon a determination that the customer is not continuing to make
6.11reasonable efforts to identify, evaluate, and implement energy conservation improvements
6.12at the large gas customer facility. For the purposes of investigations by the commissioner
6.13under this paragraph, the owner of any large gas customer facility shall, upon request,
6.14provide the commissioner with updated information comparable to that originally supplied
6.15in or with the owner's original petition under this paragraph.
6.16(e) A commercial gas customer facility that is not a large gas customer facility may
6.17petition the commissioner to exempt gas utilities serving the commercial gas customer
6.18facility from the investment and expenditure requirements of paragraph (a) with respect
6.19to retail revenues attributable to the facility. The petition must be supported by evidence
6.20demonstrating that the commercial gas customer facility has or can reasonably acquire the
6.21capability to bypass use of the utility's gas distribution system by obtaining natural gas
6.22directly from a supplier not regulated by the commission.
6.23(f) A public utility or owner of a large electric or large gas customer facility, or of a
6.24commercial gas customer facility that is not a large gas customer facility, may appeal a
6.25decision of the commissioner under paragraph (b)
6.26under subdivision 2. In reviewing a decision of the commissioner under paragraph (b)
6.27
6.28investments or spending will:
6.29 (1) not result in cost-effective energy conservation improvements; or
6.30 (2) otherwise not be in the public interest.
6.31 Sec. 6. Minnesota Statutes 2010, section 216B.241, subdivision 2, is amended to read:
6.32 Subd. 2. Programs. (a) The commissioner may require public utilities to make
6.33investments and expenditures in energy conservation improvements, explicitly setting
6.34forth the interest rates, prices, and terms under which the improvements must be offered to
6.35the customers. The required programs must cover no more than a three-year period. Public
7.1utilities shall file conservation improvement plans by June 1, on a schedule determined by
7.2order of the commissioner, but at least every three years. Plans received by a public utility
7.3by June 1 must be approved or approved as modified by the commissioner by December
7.41 of that same year. The commissioner shall evaluate the program on the basis of
7.5cost-effectiveness and the reliability of technologies employed. The commissioner's order
7.6must provide to the extent practicable for a free choice, by consumers participating in the
7.7program, of the device, method, material, or project constituting the energy conservation
7.8improvement and for a free choice of the seller, installer, or contractor of the energy
7.9conservation improvement, provided that the device, method, material, or project seller,
7.10installer, or contractor is duly licensed, certified, approved, or qualified, including under
7.11the residential conservation services program, where applicable.
7.12 (b) The commissioner may require a utility to make an energy conservation
7.13improvement investment or expenditure whenever the commissioner finds that the
7.14improvement will result in energy savings at a total cost to the utility less than the cost
7.15to the utility to produce or purchase an equivalent amount of new supply of energy. The
7.16commissioner shall nevertheless ensure that every public utility operate one or more
7.17programs under periodic review by the department.
7.18 (c) Each public utility subject to subdivision 1a may spend and invest annually up to
7.19ten percent of the total amount required to be spent and invested on energy conservation
7.20improvements under this section by the utility on research and development projects
7.21that meet the definition of energy conservation improvement in subdivision 1 and that
7.22are funded directly by the public utility.
7.23 (d) A public utility may not spend for or invest in energy conservation improvements
7.24that directly benefit a large energy facility or a large electric customer facility for which
7.25the commissioner has issued an exemption pursuant to subdivision 1a, paragraph (b).
7.26The commissioner shall consider and may require a utility to undertake a program
7.27suggested by an outside source, including a political subdivision, a nonprofit corporation,
7.28or community organization.
7.29 (e) A utility, a political subdivision, or a nonprofit or community organization
7.30that has suggested a program, the attorney general acting on behalf of consumers and
7.31small business interests, or a utility customer that has suggested a program and is not
7.32represented by the attorney general under section
7.33modify or revoke a department decision under this section, and the commission may do
7.34so if it determines that the program is not cost-effective, does not adequately address the
7.35residential conservation improvement needs of low-income persons, has a long-range
7.36negative effect on one or more classes of customers, or is otherwise not in the public
8.1interest. The commission shall reject a petition that, on its face, fails to make a reasonable
8.2argument that a program is not in the public interest.
8.3 (f) The commissioner may order a public utility to include, with the filing of the
8.4utility's proposed conservation improvement plan under paragraph (a), the results of an
8.5independent audit of the utility's conservation improvement programs and expenditures
8.6performed by the department or an auditor with experience in the provision of energy
8.7conservation and energy efficiency services approved by the commissioner and chosen by
8.8the utility. The audit must specify the energy savings or increased efficiency in the use
8.9of energy within the service territory of the utility that is the result of the spending and
8.10investments. The audit must evaluate the cost-effectiveness of the utility's conservation
8.11programs.
8.12(g) A gas utility may not spend for or invest in energy conservation improvements
8.13that directly benefit a large gas customer facility or commercial gas customer facility that
8.14is not a large gas customer facility for which the commissioner has issued an exemption
8.15pursuant to subdivision 1a, paragraph (d) or (e). The commissioner shall consider and
8.16may require a utility to undertake a program suggested by an outside source, including a
8.17political subdivision, a nonprofit corporation, or community organization.
8.18 Sec. 7. EFFECTIVE DATE.
8.19Sections 1 to 6 are effective the day following final enactment.
