1.2relating to energy; requiring the Public Utilities Commission to initiate a
1.3proceeding culminating in an order establishing standards for utility rates
1.4regarding the interconnection of small electric generating facilities;amending
1.5Minnesota Statutes 2012, section 216B.1611.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7    Section 1. Minnesota Statutes 2012, section 216B.1611, is amended to read:
1.8216B.1611 INTERCONNECTION OF ON-SITE DISTRIBUTED
1.9GENERATION.
1.10    Subdivision 1. Purpose. The purpose of this section is to:
1.11(1) establish the terms and conditions that govern the interconnection and parallel
1.12operation of on-site distributed generation resources interconnected with a public utility's
1.13distribution system;
1.14(2) provide cost savings and reliability benefits to customers;
1.15(3) establish technical requirements that will promote the safe and reliable parallel
1.16operation of on-site distributed generation resources interconnected with a public utility's
1.17distribution system;
1.18(4) enhance both the reliability of electric service and economic efficiency in the
1.19production and consumption of electricity; and
1.20(5) promote the use of distributed resources in order to provide electric system
1.21benefits during periods of capacity constraints.
1.22    Subd. 2. Distributed generation; generic proceeding. (a) The commission shall
1.23initiate a proceeding within 30 days of July 1, 2001 2013, to establish, by order, generic
1.24standards for utility tariffs for the interconnection and parallel operation of distributed
2.1generation projects, including a qualified cogeneration project under section 216B.164
2.2that are:
2.3(1) fueled by natural gas or a renewable fuel, or another similarly clean fuel or
2.4combination of fuels of;
2.5(2) no more than ten megawatts of interconnected capacity; and
2.6(3) interconnected with a public utility's distribution system where system voltages
2.7are less than 100 kilovolts.
2.8(b) At a minimum, these the tariff standards established in paragraph (a) must:
2.9(1) to the extent possible, be consistent with industry and other federal and state
2.10operational and safety standards;
2.11(2) provide for the low-cost, safe, and standardized interconnection of facilities;
2.12(3) take into account differing system requirements and hardware, as well as
2.13encourage maximum penetration of distributed generation while considering the overall
2.14demand load requirements of individual utilities;
2.15(4) allow for just and reasonable terms and conditions, consistent with the cost and
2.16operating characteristics of the various technologies, so that a utility can reasonably be
2.17assured of the reliable, safe, and efficient operation of the interconnected equipment while
2.18expediting the evaluation of interconnection applications; and
2.19(5) establish (i) a standard interconnection agreement that sets forth the contractual
2.20conditions under which a company and a customer agree that one or more facilities may
2.21be interconnected with the company's utility system, and (ii) a standard application for
2.22interconnection and parallel operation with the utility system;
2.23(6) establish a procedure whereby, when the size of a distributed generation resource
2.24causes power to flow intermittently into transmission facilities operated by the Midwest
2.25Independent Systems Operator, a local load-serving utility may coordinate with the
2.26Midwest Independent Systems Operator to conduct the interconnection transmission
2.27system analysis and transmission system usage reservations, as needed;
2.28(7) include payments for ancillary services and other system benefits provided by a
2.29distributed generation resource;
2.30(8) reflect the savings that accrue to a public utility's distribution system resulting
2.31from avoided demand charges and avoided transmission and transmission infrastructure
2.32costs; and
2.33(9) recognize the role played by the regional wholesale electricity market and demand
2.34side and storage resources as a source of standby power for a distributed energy resource.
2.35(b) (c) The commission may shall develop financial incentives based on a public
2.36utility's performance in encouraging residential and small business customers to participate
3.1in on-site generation interconnected with a public utility's distribution system. A public
3.2utility's performance shall be evaluated on:
3.3(1) steps taken by the public utility to reduce barriers to the development of
3.4distributed generation resources, including, but not limited to, financial, technical, and
3.5interconnection barriers; and
3.6(2) the extent to which a public utility has effectively and thoroughly analyzed
3.7available locations on its distribution system for siting future distributed generation
3.8resources and provided that information to developers.
3.9    Subd. 3. Distributed generation tariff. Within 90 days of the issuance of an order
3.10under subdivision 2:
3.11(1) each public utility providing electric service at retail shall file a distributed
3.12generation tariff consistent with that order, for commission approval or approval with
3.13modification; and
3.14(2) each municipal utility and cooperative electric association shall adopt a
3.15distributed generation tariff that addresses the issues included in the commission's order.
3.16    Subd. 4. Reporting requirements. (a) Each electric utility shall maintain records
3.17concerning applications received for interconnection and parallel operation of distributed
3.18generation. The records must include the date each application is received, documents
3.19generated in the course of processing each application, correspondence regarding each
3.20application, and the final disposition of each application.
3.21(b) Every electric utility shall file with the commissioner a distributed generation
3.22interconnection report for the preceding calendar year that identifies:
3.23(1) each distributed generation facility interconnected with the utility's distribution
3.24system. The report must list the;
3.25(2) new distributed generation facilities interconnected with the system since the
3.26previous year's report, any distributed generation facilities no longer interconnected with
3.27the utility's system since the previous report, the capacity of each facility, and the feeder or
3.28other point on the company's utility system where the facility is connected. The annual
3.29report must also identify;
3.30(3) all applications for interconnection received during the previous one-year period,
3.31and the disposition of the applications; and
3.32(4) the most optimal locations on its distribution system for the interconnection
3.33of future distributed generation resources, considering the technical feasibility of
3.34accommodating a project of up to ten megawatts capacity, the system benefits that accrue
3.35for power quality improvements from distributed generation resources and from reducing
4.1local system demand, and the avoidance of future expenditures to expand generation
4.2or transmission or distribution capacity.
4.3EFFECTIVE DATE.This section is effective the day following final enactment.