Bill Text: MN SF521 | 2013-2014 | 88th Legislature | Engrossed
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-Engrossed.html
1.2relating to energy; regulating a biomass mandate project and a proposed
1.3high-voltage transmission line;amending Minnesota Statutes 2012, section
1.4216B.2424, subdivision 5a.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2012, section 216B.2424, subdivision 5a, is amended to
1.7read:
1.8 Subd. 5a. Reduction of biomass mandate. (a) Notwithstanding subdivision 5, the
1.9biomass electric energy mandate must be reduced from 125 megawatts to 110 megawatts.
1.10(b) The Public Utilities Commission shall approve a request pending before the
1.11commission as of May 15, 2003, for amendments to and assignment of a power purchase
1.12agreement with the owner of a facility that uses short-rotation, woody crops as its primary
1.13fuel previously approved to satisfy a portion of the biomass mandate if the owner of
1.14the project agrees to reduce the size of its project from 50 megawatts to 35 megawatts,
1.15while maintaining an average price for energy in nominal dollars measured over the term
1.16of the power purchase agreement at or below $104 per megawatt-hour, exclusive of any
1.17price adjustments that may take effect subsequent to commission approval of the power
1.18purchase agreement, as amended. The commission shall also approve, as necessary, any
1.19subsequent assignment or sale of the power purchase agreement or ownership of the
1.20project to an entity owned or controlled, directly or indirectly, by two municipal utilities
1.21located north of Constitutional Route No. 8, as described in section161.114 , which
1.22currently own electric and steam generation facilities using coal as a fuel and which
1.23propose to retrofit their existing municipal electrical generating facilities to utilize biomass
1.24fuels 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 theMinnesota 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 as
2.31required by paragraph (c). The amendment must be negotiated and executed within 45
2.32days ofMay 20, 2009 the effective date of this act, and must apply to prices paid after
2.33January 1,2009 2014. The average price for energy in nominal dollars measured over the
2.34term of the power purchase agreement must not exceed$104 $109.20 per megawatt hour
2.35by more than five percent. The public utility shall request approval of the amendment by
2.36the commission 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 during the applicable
3.11month to procure and transport all fuel used to produce energy for delivery to the public
3.12utility pursuant to the power purchase agreement to the extent such costs exceeded $3.40
3.13per million metric British thermal unit (MMBTU), in addition to the price to be paid for
3.14the energy produced and delivered by the project owner. Beginning with 2014, at the end
3.15of each calendar year of the term of the power purchase agreement, the project owner shall
3.16calculate the amount by which actual fuel costs for the year exceeded $3.40 per MMBTU,
3.17and prior monthly payment for such fuel costs shall be reconciled against actual fuel costs
3.18for the applicable calendar year. If such prior monthly fuel payments for the year in the
3.19aggregate exceed the amount due based on the annual calculation, the project owner shall
3.20credit the public utility for the excess paid. If the annual calculation of fuel costs due
3.21exceeds the prior monthly fuel payments for the year in the aggregate, the project owner
3.22shall be entitled to be paid for the deficiency with the next invoice to the public utility. The
3.23amendment shall be negotiated and executed within 45 days of the enactment of this act
3.24and shall be effective for fuel costs incurred and prices after January 1, 2014. The public
3.25utility shall request approval of the amendment by the commission, and the commission
3.26shall approve the amendment as reasonable and in the public interest and allow the public
3.27utility to recover from its Minnesota retail customers the amounts paid by the public utility
3.28to the project owner pursuant to the power purchase agreement during the full term of
3.29the power purchase agreement, including the reimbursement of fuel costs pursuant to the
3.30power purchase agreement amendment, pursuant to section 216B.1645, or otherwise.
3.31(g) With respect to the power purchase agreement described in paragraph (b) and
3.32approved by the commission pursuant to paragraphs (c) and (e), the public utility is
3.33prohibited from recovering from the project owner any costs which were not actually and
3.34reasonably incurred by the utility, notwithstanding any provision in the power purchase
3.35agreement to the contrary. In addition, beginning with 2012, the public utility shall pay for
3.36all energy delivered by the project owner pursuant to the power purchase agreement at
4.1the full price for such energy in the power purchase agreement approved and amended
4.2pursuant to paragraph (e), provided that the project owner does not deliver more than
4.3110 percent of the amount scheduled for delivery in any year of the power purchase
4.4agreement, and does not deliver, on average over any five consecutive years of the power
4.5purchase agreement, an amount greater than 105 percent of the amount scheduled for
4.6delivery over the five-year period.
4.7EFFECTIVE DATE.This section is effective the day following final enactment.
4.8 Sec. 2. TRANSMISSION LINE; CERTIFICATE OF NEED REQUIRED AND
4.9EVIDENCE REQUIRED.
4.10(a) A high-voltage transmission line with a capacity of 100 kilovolts or more proposed
4.11to be located within a city in the metropolitan area as defined in Minnesota Statutes,
4.12section 473.121, subdivision 2, for which a route permit application was filed between
4.13June 2011 and August 2011, and a certificate of need application was filed between June
4.142012 and August 2012, to rebuild approximately eight miles of 69 kilovolt transmission
4.15with a high-voltage transmission line to meet local area distribution needs, must be
4.16approved in a certificate of need proceeding conducted under Minnesota Statutes, section
4.17216B.243. The certificate of need may be approved only if the commission finds by clear
4.18and convincing evidence that there is no feasible and available distribution level alternative
4.19to the transmission line. In making its findings the commission shall consider the factors
4.20provided in applicable law and rules including, without limitation, cost-effectiveness,
4.21energy conservation, and the protection or enhancement of environmental quality.
4.22(b) Further proceedings regarding the routing of a high-voltage transmission line
4.23described in this section shall be suspended until the Public Utilities Commission has
4.24made a determination that the transmission line is needed.
4.25EFFECTIVE DATE.This section is effective the day following final enactment and
4.26applies to route permits and certificate of need applications pending on or after that date.
1.3high-voltage transmission line;amending Minnesota Statutes 2012, section
1.4216B.2424, subdivision 5a.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2012, section 216B.2424, subdivision 5a, is amended to
1.7read:
1.8 Subd. 5a. Reduction of biomass mandate. (a) Notwithstanding subdivision 5, the
1.9biomass electric energy mandate must be reduced from 125 megawatts to 110 megawatts.
1.10(b) The Public Utilities Commission shall approve a request pending before the
1.11commission as of May 15, 2003, for amendments to and assignment of a power purchase
1.12agreement with the owner of a facility that uses short-rotation, woody crops as its primary
1.13fuel previously approved to satisfy a portion of the biomass mandate if the owner of
1.14the project agrees to reduce the size of its project from 50 megawatts to 35 megawatts,
1.15while maintaining an average price for energy in nominal dollars measured over the term
1.16of the power purchase agreement at or below $104 per megawatt-hour, exclusive of any
1.17price adjustments that may take effect subsequent to commission approval of the power
1.18purchase agreement, as amended. The commission shall also approve, as necessary, any
1.19subsequent assignment or sale of the power purchase agreement or ownership of the
1.20project to an entity owned or controlled, directly or indirectly, by two municipal utilities
1.21located north of Constitutional Route No. 8, as described in section
1.22currently own electric and steam generation facilities using coal as a fuel and which
1.23propose to retrofit their existing municipal electrical generating facilities to utilize biomass
1.24fuels 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
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 as
2.31required by paragraph (c). The amendment must be negotiated and executed within 45
2.32days of
2.33January 1,
2.34term of the power purchase agreement must not exceed
2.35
2.36the commission 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 during the applicable
3.11month to procure and transport all fuel used to produce energy for delivery to the public
3.12utility pursuant to the power purchase agreement to the extent such costs exceeded $3.40
3.13per million metric British thermal unit (MMBTU), in addition to the price to be paid for
3.14the energy produced and delivered by the project owner. Beginning with 2014, at the end
3.15of each calendar year of the term of the power purchase agreement, the project owner shall
3.16calculate the amount by which actual fuel costs for the year exceeded $3.40 per MMBTU,
3.17and prior monthly payment for such fuel costs shall be reconciled against actual fuel costs
3.18for the applicable calendar year. If such prior monthly fuel payments for the year in the
3.19aggregate exceed the amount due based on the annual calculation, the project owner shall
3.20credit the public utility for the excess paid. If the annual calculation of fuel costs due
3.21exceeds the prior monthly fuel payments for the year in the aggregate, the project owner
3.22shall be entitled to be paid for the deficiency with the next invoice to the public utility. The
3.23amendment shall be negotiated and executed within 45 days of the enactment of this act
3.24and shall be effective for fuel costs incurred and prices after January 1, 2014. The public
3.25utility shall request approval of the amendment by the commission, and the commission
3.26shall approve the amendment as reasonable and in the public interest and allow the public
3.27utility to recover from its Minnesota retail customers the amounts paid by the public utility
3.28to the project owner pursuant to the power purchase agreement during the full term of
3.29the power purchase agreement, including the reimbursement of fuel costs pursuant to the
3.30power purchase agreement amendment, pursuant to section 216B.1645, or otherwise.
3.31(g) With respect to the power purchase agreement described in paragraph (b) and
3.32approved by the commission pursuant to paragraphs (c) and (e), the public utility is
3.33prohibited from recovering from the project owner any costs which were not actually and
3.34reasonably incurred by the utility, notwithstanding any provision in the power purchase
3.35agreement to the contrary. In addition, beginning with 2012, the public utility shall pay for
3.36all energy delivered by the project owner pursuant to the power purchase agreement at
4.1the full price for such energy in the power purchase agreement approved and amended
4.2pursuant to paragraph (e), provided that the project owner does not deliver more than
4.3110 percent of the amount scheduled for delivery in any year of the power purchase
4.4agreement, and does not deliver, on average over any five consecutive years of the power
4.5purchase agreement, an amount greater than 105 percent of the amount scheduled for
4.6delivery over the five-year period.
4.7EFFECTIVE DATE.This section is effective the day following final enactment.
4.8 Sec. 2. TRANSMISSION LINE; CERTIFICATE OF NEED REQUIRED AND
4.9EVIDENCE REQUIRED.
4.10(a) A high-voltage transmission line with a capacity of 100 kilovolts or more proposed
4.11to be located within a city in the metropolitan area as defined in Minnesota Statutes,
4.12section 473.121, subdivision 2, for which a route permit application was filed between
4.13June 2011 and August 2011, and a certificate of need application was filed between June
4.142012 and August 2012, to rebuild approximately eight miles of 69 kilovolt transmission
4.15with a high-voltage transmission line to meet local area distribution needs, must be
4.16approved in a certificate of need proceeding conducted under Minnesota Statutes, section
4.17216B.243. The certificate of need may be approved only if the commission finds by clear
4.18and convincing evidence that there is no feasible and available distribution level alternative
4.19to the transmission line. In making its findings the commission shall consider the factors
4.20provided in applicable law and rules including, without limitation, cost-effectiveness,
4.21energy conservation, and the protection or enhancement of environmental quality.
4.22(b) Further proceedings regarding the routing of a high-voltage transmission line
4.23described in this section shall be suspended until the Public Utilities Commission has
4.24made a determination that the transmission line is needed.
4.25EFFECTIVE DATE.This section is effective the day following final enactment and
4.26applies to route permits and certificate of need applications pending on or after that date.
