Bill Text: MN SF925 | 2015-2016 | 89th Legislature | Introduced

Bill Title: Natural gas utilities size limit increase; energy improvement projects paid for by property tax surcharge scope expansion; propane tank purchases sales tax exemption authorization

Spectrum: Slight Partisan Bill (Democrat 3-1)

Status: (Introduced) 2015-02-19 - Referred to Environment and Energy [SF925 Detail]

Download: Minnesota-2015-SF925-Introduced.html

1.1A bill for an act
1.2relating to energy; increasing the size limit of natural gas utilities not subject to
1.3rate regulations; expanding the scope of energy improvement projects whose
1.4costs can be repaid via a property tax surcharge; exempting propane tank
1.5purchases from the sales tax; adding definitions; transferring unused funds;
1.6requiring a report; appropriating money;amending Minnesota Statutes 2014,
1.7sections 216B.02, by adding subdivisions; 216B.16, subdivision 12; 216B.2421,
1.8subdivision 2; 216C.435, subdivision 5; 297A.67, by adding a subdivision.

1.10    Section 1. Minnesota Statutes 2014, section 216B.02, is amended by adding a
1.11subdivision to read:
1.12    Subd. 3a. Propane. "Propane" means a nonsynthetic gas made of short hydrocarbon
1.13chains, containing primarily propane and butane, and stored in liquid form in specialized
1.14tanks at moderate pressure. Propane is not liquefied natural gas or synthetic gas.

1.15    Sec. 2. Minnesota Statutes 2014, section 216B.02, is amended by adding a subdivision
1.16to read:
1.17    Subd. 3b. Propane storage facility. "Propane storage facility" means a facility
1.18designed to store or capable of storing liquid-form propane in specialized tanks. Propane
1.19storage facility does not include a facility designed to store liquefied natural gas, synthetic
1.20gas, or anhydrous ammonia.

1.21    Sec. 3. Minnesota Statutes 2014, section 216B.02, is amended by adding a subdivision
1.22to read:
1.23    Subd. 6b. Synthetic gas. "Synthetic gas" means flammable gas created from (1)
1.24gaseous, liquid, or solid hydrocarbons, or (2) other organic or inorganic matter. Synthetic
2.1gas includes hydrogen or methane produced at a conversion plant, but does not include

2.3    Sec. 4. Minnesota Statutes 2014, section 216B.16, subdivision 12, is amended to read:
2.4    Subd. 12. Exemption for small gas utility franchise. (a) A municipality may file
2.5with the commission a resolution of its governing body requesting exemption from the
2.6provisions of this section for a public utility that is under a franchise with the municipality
2.7to supply natural, manufactured, or mixed gas and that serves 650 or fewer customers in
2.8the municipality as long as the public utility serves no more than a total of 2,000 5,000
2.10(b) The commission shall grant an exemption from this section for that portion of
2.11a public utility's business that is requested by each municipality it serves. Furthermore,
2.12the commission shall also grant the public utility an exemption from this section for any
2.13service provided outside of a municipality's border that is considered by the commission
2.14to be incidental. The public utility shall file with the commission and the department
2.15all initial and subsequent changes in rates, tariffs, and contracts for service outside the
2.16municipality at least 30 days in advance of implementation.
2.17(c) However, the commission shall require the utility to adopt the commission's
2.18policies and procedures governing disconnection during cold weather. The utility shall
2.19annually submit a copy of its municipally approved rates to the commission.
2.20(d) In all cases covered by this subdivision in which an exemption for service outside
2.21of a municipality is granted, the commission may initiate an investigation under section
2.22216B.17 , on its own motion or upon complaint from a customer.
2.23(e) If a municipality files with the commission a resolution of its governing body
2.24rescinding the request for exemption, the commission shall regulate the public utility's
2.25business in that municipality under this section.
2.26EFFECTIVE DATE.This section is effective the day following final enactment.

2.27    Sec. 5. Minnesota Statutes 2014, section 216B.2421, subdivision 2, is amended to read:
2.28    Subd. 2. Large energy facility. "Large energy facility" means:
2.29(1) any electric power generating plant or combination of plants at a single site with
2.30a combined capacity of 50,000 kilowatts or more and transmission lines directly associated
2.31with the plant that are necessary to interconnect the plant to the transmission system;
2.32(2) any high-voltage transmission line with a capacity of 200 kilovolts or more and
2.33greater than 1,500 feet in length;
3.1(3) any high-voltage transmission line with a capacity of 100 kilovolts or more with
3.2more than ten miles of its length in Minnesota or that crosses a state line;
3.3(4) any pipeline greater than six inches in diameter and having more than 50 miles of
3.4its length in Minnesota used for the transportation of coal, crude petroleum or petroleum
3.5fuels or oil, or their derivatives;
3.6(5) any pipeline for transporting natural or synthetic gas at pressures in excess of
3.7200 pounds per square inch with more than 50 miles of its length in Minnesota;
3.8(6) any facility designed for or capable of storing on a single site more than 100,000
3.9gallons of liquefied natural gas or synthetic gas, excluding propane storage facilities;
3.10(7) any underground gas storage facility requiring a permit pursuant to section
3.11103I.681 ;
3.12(8) any nuclear fuel processing or nuclear waste storage or disposal facility; and
3.13(9) any facility intended to convert any material into any other combustible fuel and
3.14having the capacity to process in excess of 75 tons of the material per hour.

3.15    Sec. 6. Minnesota Statutes 2014, section 216C.435, subdivision 5, is amended to read:
3.16    Subd. 5. Energy improvement. "Energy improvement" means:
3.17(1) any renovation or retrofitting of a building to improve energy efficiency that
3.18is permanently affixed to the property and that results in a net reduction in energy
3.19consumption without altering the principal source of energy;
3.20(2) permanent installation of new or upgraded electrical circuits and related
3.21equipment to enable electrical vehicle charging; or
3.22(3) a renewable energy system attached to, installed within, or proximate to a
3.23building that generates electrical or thermal energy from a renewable energy source; or
3.24(4) the installation of infrastructure, machinery, and appliances that will allow
3.25natural gas to be used as a heating fuel on the premises of a building that was previously
3.26not connected to a source of natural gas.
3.27EFFECTIVE DATE.This section is effective the day following final enactment.

3.28    Sec. 7. Minnesota Statutes 2014, section 297A.67, is amended by adding a subdivision
3.29to read:
3.30    Subd. 34. Propane tanks. (a) Propane tanks with a propane capacity of at least 100
3.31gallons, and any valves and regulators necessary for use of the propane tank, are exempt
3.32when purchased by the user of the tank. This exemption does not apply to the lease of a
3.33propane tank from a propane supplier or dealer.
3.34(b) This subdivision expires December 31, 2017.
4.1EFFECTIVE DATE.This section is effective the day following final enactment
4.2and applies to sales and purchases made on or after that date.

4.3    Sec. 8. TRANSFER OF FUNDS.
4.4Notwithstanding Minnesota Statutes, section 216C.416, of the amounts transferred
4.5to the solar thermal system rebate account in the special revenue fund in the state treasury
4.6in calendar years 2014 and 2015, $300,000 shall be transferred to the commissioner of
4.7commerce and deposited in the energy and conservation account in the special revenue
4.8fund established in Minnesota Statutes, section 216B.241, subdivision 2a. The transferred
4.9funds shall be used by the commissioner of commerce to provide energy conservation
4.10programs to low-income persons who use propane as a heating fuel under Minnesota
4.11Statutes, section 216B.241, subdivision 7. This is a onetime transfer.
4.12EFFECTIVE DATE.This section is effective the day following final enactment.

4.14(a) The commissioner of commerce shall conduct a study of the operation of the
4.15propane prepurchase program under Minnesota Statutes, section 216B.0951. The study
4.16must address:
4.17(1) the amount and price of propane prepurchased;
4.18(2) the locations where prepurchased propane was stored and any costs of storage;
4.19(3) a description of how the propane was distributed to customers, focusing on the
4.20activities of the local agencies that deliver energy assistance and propane distributors;
4.21(4) a description of any obstacles that interfered with the efficient operation of the
4.22program, and suggestions for overcoming those obstacles; and
4.23(5) an estimate of the savings that accrued to propane customers as a result of the
4.24prepurchase program.
4.25(b) By January 1 of 2016 and 2017, the commissioner of commerce shall submit a
4.26report containing the information required under this section for the previous calendar year
4.27to the chairs and ranking minority members of the senate and house of representatives
4.28committees with primary responsibility for energy policy.
4.29EFFECTIVE DATE.This section is effective the day following final enactment.

4.30    Sec. 10. APPROPRIATION.
4.31(a) $5,000,000 in fiscal year 2015 and $5,000,000 in fiscal year 2016 are
4.32appropriated from the general fund to the commissioner of commerce for the purpose of
5.1prepurchasing propane under Minnesota Statutes, section 216B.0951. Notwithstanding
5.2Minnesota Statutes, section 216B.0951, subdivision 1, the commissioner must expend all
5.3of the funds before September 1 each year. Propane may not be distributed to customers
5.4before October 1 each year.
5.5(b) The commissioner shall reserve $5,000,000 each year from the federal funds
5.6transferred to the state for use in the 2015-2016 and 2016-2017 heating seasons under
5.7the Low-Income Home Energy Assistance Program and transfer those amounts to the
5.8general fund.
5.9EFFECTIVE DATE.This section is effective the day following final enactment.