Bill Text: MN SF521 | 2013-2014 | 88th Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Biomass power mandate project provision modification; transmission line certificate of need and routing assessment requirement
Sponsorship: Moderate Partisan Bill (Democrat 9-2)
Status: (Passed) 2013-05-15 - Secretary of State Chapter 57 05/13/13 [SF521 Detail]
Download: Minnesota-2013-SF521-Introduced.html
Bill Title: Biomass power mandate project provision modification; transmission line certificate of need and routing assessment requirement
Sponsorship: Moderate Partisan Bill (Democrat 9-2)
Status: (Passed) 2013-05-15 - Secretary of State Chapter 57 05/13/13 [SF521 Detail]
Download: Minnesota-2013-SF521-Introduced.html
1.2relating to energy; regulating a biomass mandate project; amending Minnesota
1.3Statutes 2012, section 216B.2424, subdivision 5a.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. Minnesota Statutes 2012, section 216B.2424, subdivision 5a, is amended to
1.6read:
1.7 Subd. 5a. Reduction of biomass mandate. (a) Notwithstanding subdivision 5, the
1.8biomass electric energy mandate must be reduced from 125 megawatts to 110 megawatts.
1.9(b) The Public Utilities Commission shall approve a request pending before the
1.10commission as of May 15, 2003, for amendments to and assignment of a power purchase
1.11agreement with the owner of a facility that uses short-rotation, woody crops as its primary
1.12fuel previously approved to satisfy a portion of the biomass mandate if the owner of
1.13the project agrees to reduce the size of its project from 50 megawatts to 35 megawatts,
1.14while maintaining an average price for energy in nominal dollars measured over the term
1.15of the power purchase agreement at or below $104 per megawatt-hour, exclusive of any
1.16price adjustments that may take effect subsequent to commission approval of the power
1.17purchase agreement, as amended. The commission shall also approve, as necessary, any
1.18subsequent assignment or sale of the power purchase agreement or ownership of the
1.19project to an entity owned or controlled, directly or indirectly, by two municipal utilities
1.20located north of Constitutional Route No. 8, as described in section161.114 , which
1.21currently own electric and steam generation facilities using coal as a fuel and which
1.22propose to retrofit their existing municipal electrical generating facilities to utilize biomass
1.23fuels in order to perform the power purchase agreement.
2.1(c) If the power purchase agreement described in paragraph (b) is assigned to an
2.2entity that is, or becomes, owned or controlled, directly or indirectly, by two municipal
2.3entities as described in paragraph (b), and the power purchase agreement meets the
2.4price requirements of paragraph (b), the commission shall approve any amendments to
2.5the power purchase agreement necessary to reflect the changes in project location and
2.6ownership and any other amendments made necessary by those changes. The commission
2.7shall also specifically find that:
2.8(1) the power purchase agreement complies with and fully satisfies the provisions of
2.9this section to the full extent of its 35-megawatt capacity;
2.10(2) all costs incurred by the public utility and all amounts to be paid by the public
2.11utility to the project owner under the terms of the power purchase agreement are fully
2.12recoverable pursuant to section216B.1645 ;
2.13(3) subject to prudency review by the commission, the public utility may recover
2.14from its Minnesota retail customers the Minnesota jurisdictional portion of the amounts
2.15that may be incurred and paid by the public utility during the full term of the power
2.16purchase agreement; and
2.17(4) if the purchase power agreement meets the requirements of this subdivision,
2.18it is reasonable and in the public interest.
2.19(d) The commission shall specifically approve recovery by the public utility of
2.20any and all Minnesota jurisdictional costs incurred by the public utility to improve,
2.21construct, install, or upgrade transmission, distribution, or other electrical facilities owned
2.22by the public utility or other persons in order to permit interconnection of the retrofitted
2.23biomass-fueled generating facilities or to obtain transmission service for the energy
2.24provided by the facilities to the public utility pursuant to section216B.1645 , and shall
2.25disapprove any provision in the power purchase agreement that requires the developer
2.26or owner of the project to pay the jurisdictional costs or that permit the public utility to
2.27terminate the power purchase agreement as a result of the existence of those costs or the
2.28public utility's obligation to pay any or all of those costs.
2.29(e) Upon request by the project owner, the public utility shall agree to amend the
2.30power purchase agreement described in paragraph (b) and approved by the commission
2.31as required by paragraph (c). The amendment must be negotiated and executed within
2.3245 days ofMay 20, 2009 March 31, 2013, and must apply to prices paid after January
2.331,2009 2014. The average price for energy in nominal dollars measured over the term
2.34of the power purchase agreement must not exceed$104 $109.20 per megawatt hour by
2.35more than five percent. The public utility shall request approval of the amendment by the
2.36commission within 30 days of execution of the amended power purchase agreement.
3.1The amendment is not effective until approval by the commission. The commission
3.2shall act on the amendment within 90 days of submission of the request by the public
3.3utility. Upon approval of the amended power purchase agreement, the commission shall
3.4allow the public utility to recover the costs of the amended power purchase agreement, as
3.5provided in section216B.1645 .
3.6(f) With respect to the power purchase agreement described in paragraph (b), and
3.7amended and approved by the commission pursuant to paragraphs (c) and (e), upon request
3.8by the project owner, the public utility shall agree to amend the power purchase agreement
3.9to include a fuel cost adjustment clause which requires the public utility to reimburse the
3.10project owner monthly for all costs incurred by the project owner to procure and transport
3.11all fuel used to produce energy for delivery to the public utility pursuant to the power
3.12purchase agreement. The prices in the power purchase agreement as amended pursuant to
3.13paragraph (e) shall be adjusted by an amount equal to the project owner's assumed fuel
3.14costs in those prices, as provided by the project owner. The amendment shall be negotiated
3.15and executed within 45 days of the enactment of this act and shall be effective for fuel
3.16costs incurred and prices after January 1, 2014. The public utility shall request approval of
3.17the amendment by the commission, and the commission shall approve the amendment
3.18as reasonable and in the public interest and allow the public utility to recover from its
3.19Minnesota retail customers the Minnesota jurisdictional portion of the amounts paid by the
3.20public utility to the project owner pursuant to the power purchase agreement during the full
3.21term of the power purchase agreement, including the reimbursement of fuel costs pursuant
3.22to the power purchase agreement amendment, pursuant to section 216B.1645, or otherwise.
3.23(g) With respect to the power purchase agreement described in paragraph (b) and
3.24approved by the commission pursuant to paragraphs (c) and (e), the public utility is
3.25prohibited from recovering from the project owner any costs which were not actually and
3.26reasonably incurred by the utility, notwithstanding any provision in the power purchase
3.27agreement to the contrary. In addition, the public utility shall pay for all energy delivered
3.28by the project owner pursuant to the power purchase agreement at the full price for such
3.29energy in the power purchase agreement approved and amended pursuant to paragraph
3.30(e), provided that the project owner does not deliver more than 110 percent of the amount
3.31scheduled for delivery in any year of the power purchase agreement, and does not deliver,
3.32on average over any five consecutive years of the power purchase agreement, an amount
3.33greater than 105 percent of the amount scheduled for delivery over the five-year period.
1.3Statutes 2012, section 216B.2424, subdivision 5a.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. Minnesota Statutes 2012, section 216B.2424, subdivision 5a, is amended to
1.6read:
1.7 Subd. 5a. Reduction of biomass mandate. (a) Notwithstanding subdivision 5, the
1.8biomass electric energy mandate must be reduced from 125 megawatts to 110 megawatts.
1.9(b) The Public Utilities Commission shall approve a request pending before the
1.10commission as of May 15, 2003, for amendments to and assignment of a power purchase
1.11agreement with the owner of a facility that uses short-rotation, woody crops as its primary
1.12fuel previously approved to satisfy a portion of the biomass mandate if the owner of
1.13the project agrees to reduce the size of its project from 50 megawatts to 35 megawatts,
1.14while maintaining an average price for energy in nominal dollars measured over the term
1.15of the power purchase agreement at or below $104 per megawatt-hour, exclusive of any
1.16price adjustments that may take effect subsequent to commission approval of the power
1.17purchase agreement, as amended. The commission shall also approve, as necessary, any
1.18subsequent assignment or sale of the power purchase agreement or ownership of the
1.19project to an entity owned or controlled, directly or indirectly, by two municipal utilities
1.20located north of Constitutional Route No. 8, as described in section
1.21currently own electric and steam generation facilities using coal as a fuel and which
1.22propose to retrofit their existing municipal electrical generating facilities to utilize biomass
1.23fuels in order to perform the power purchase agreement.
2.1(c) If the power purchase agreement described in paragraph (b) is assigned to an
2.2entity that is, or becomes, owned or controlled, directly or indirectly, by two municipal
2.3entities as described in paragraph (b), and the power purchase agreement meets the
2.4price requirements of paragraph (b), the commission shall approve any amendments to
2.5the power purchase agreement necessary to reflect the changes in project location and
2.6ownership and any other amendments made necessary by those changes. The commission
2.7shall also specifically find that:
2.8(1) the power purchase agreement complies with and fully satisfies the provisions of
2.9this section to the full extent of its 35-megawatt capacity;
2.10(2) all costs incurred by the public utility and all amounts to be paid by the public
2.11utility to the project owner under the terms of the power purchase agreement are fully
2.12recoverable pursuant to section
2.13(3) subject to prudency review by the commission, the public utility may recover
2.14from its Minnesota retail customers the Minnesota jurisdictional portion of the amounts
2.15that may be incurred and paid by the public utility during the full term of the power
2.16purchase agreement; and
2.17(4) if the purchase power agreement meets the requirements of this subdivision,
2.18it is reasonable and in the public interest.
2.19(d) The commission shall specifically approve recovery by the public utility of
2.20any and all Minnesota jurisdictional costs incurred by the public utility to improve,
2.21construct, install, or upgrade transmission, distribution, or other electrical facilities owned
2.22by the public utility or other persons in order to permit interconnection of the retrofitted
2.23biomass-fueled generating facilities or to obtain transmission service for the energy
2.24provided by the facilities to the public utility pursuant to section
2.25disapprove any provision in the power purchase agreement that requires the developer
2.26or owner of the project to pay the jurisdictional costs or that permit the public utility to
2.27terminate the power purchase agreement as a result of the existence of those costs or the
2.28public utility's obligation to pay any or all of those costs.
2.29(e) Upon request by the project owner, the public utility shall agree to amend the
2.30power purchase agreement described in paragraph (b) and approved by the commission
2.31as required by paragraph (c). The amendment must be negotiated and executed within
2.3245 days of
2.331,
2.34of the power purchase agreement must not exceed
2.35
2.36commission within 30 days of execution of the amended power purchase agreement.
3.1The amendment is not effective until approval by the commission. The commission
3.2shall act on the amendment within 90 days of submission of the request by the public
3.3utility. Upon approval of the amended power purchase agreement, the commission shall
3.4allow the public utility to recover the costs of the amended power purchase agreement, as
3.5provided in section
3.6(f) With respect to the power purchase agreement described in paragraph (b), and
3.7amended and approved by the commission pursuant to paragraphs (c) and (e), upon request
3.8by the project owner, the public utility shall agree to amend the power purchase agreement
3.9to include a fuel cost adjustment clause which requires the public utility to reimburse the
3.10project owner monthly for all costs incurred by the project owner to procure and transport
3.11all fuel used to produce energy for delivery to the public utility pursuant to the power
3.12purchase agreement. The prices in the power purchase agreement as amended pursuant to
3.13paragraph (e) shall be adjusted by an amount equal to the project owner's assumed fuel
3.14costs in those prices, as provided by the project owner. The amendment shall be negotiated
3.15and executed within 45 days of the enactment of this act and shall be effective for fuel
3.16costs incurred and prices after January 1, 2014. The public utility shall request approval of
3.17the amendment by the commission, and the commission shall approve the amendment
3.18as reasonable and in the public interest and allow the public utility to recover from its
3.19Minnesota retail customers the Minnesota jurisdictional portion of the amounts paid by the
3.20public utility to the project owner pursuant to the power purchase agreement during the full
3.21term of the power purchase agreement, including the reimbursement of fuel costs pursuant
3.22to the power purchase agreement amendment, pursuant to section 216B.1645, or otherwise.
3.23(g) With respect to the power purchase agreement described in paragraph (b) and
3.24approved by the commission pursuant to paragraphs (c) and (e), the public utility is
3.25prohibited from recovering from the project owner any costs which were not actually and
3.26reasonably incurred by the utility, notwithstanding any provision in the power purchase
3.27agreement to the contrary. In addition, the public utility shall pay for all energy delivered
3.28by the project owner pursuant to the power purchase agreement at the full price for such
3.29energy in the power purchase agreement approved and amended pursuant to paragraph
3.30(e), provided that the project owner does not deliver more than 110 percent of the amount
3.31scheduled for delivery in any year of the power purchase agreement, and does not deliver,
3.32on average over any five consecutive years of the power purchase agreement, an amount
3.33greater than 105 percent of the amount scheduled for delivery over the five-year period.
