1.1 A bill for an act
1.2 relating to energy; establishing a budget for energy, transmission, petroleum, and
1.3 renewable energy purposes; adding and modifying provisions governing geothermal
1.4 energy, solar energy, and other energy policy; authorizing natural gas utilities to
1.5 sell extraordinary event bonds under certain circumstances; sunsetting the renewable
1.6 development account; establishing an account; appropriating money; amending
1.7 Minnesota Statutes 2024, sections 116C.7792; 116D.04, subdivision 4a; 116J.55,
1.8 subdivision 5; 216B.02, by adding subdivisions; 216B.16, subdivisions 14, 15, by
1.9 adding a subdivision; 216B.164, subdivisions 2a, 3, 4a; 216B.1641, by adding a
1.10 subdivision; 216B.1645, subdivision 1; 216B.1691, subdivisions 1, 2g; 216B.2402,
1.11 subdivision 16; 216B.2421, subdivision 2; 216B.243, subdivision 8; 216B.62,
1.12 subdivision 3, by adding a subdivision; 216C.09; 216C.10; 216C.11; 216C.12;
1.13 216C.377, subdivision 3; 216C.391, subdivisions 1, 3; 216C.417, subdivision 2,
1.14 by adding a subdivision; 216C.47, subdivision 1; 216I.02, by adding a subdivision;
1.15 216I.07, subdivisions 2, 3; proposing coding for new law in Minnesota Statutes,
1.16 chapter 216B; repealing Minnesota Statutes 2024, sections 116C.779, subdivisions
1.17 1, 2; 116C.7791; 216C.41.
1.18BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.19 ARTICLE 1
1.20 CLIMATE AND ENERGY FINANCE
1.21Section 1. APPROPRIATIONS.
1.22 The sums shown in the columns marked "Appropriations" are appropriated to the agencies
1.23and for the purposes specified in this article. The appropriations are from the general fund,
1.24or another named fund, and are available for the fiscal years indicated for each purpose.
1.25The figures "2026" and "2027" used in this article mean that the appropriations listed under
1.26them are available for the fiscal year ending June 30, 2026, or June 30, 2027, respectively.
1.27"The first year" is fiscal year 2026. "The second year" is fiscal year 2027. "The biennium"
1.28is fiscal years 2026 and 2027. If an appropriation in this article is enacted more than once
1Article 1 Section 1.
S2393-1 1st EngrossmentSF2393 REVISOR RSI
SENATE
STATE OF MINNESOTA
S.F. No. 2393NINETY-FOURTH SESSION
(SENATE AUTHORS: FRENTZ and Xiong)
OFFICIAL STATUSD-PGDATE
Introduction and first reading71903/10/2025
Referred to Commerce and Consumer Protection
Withdrawn and re-referred to Energy, Utilities, Environment, and Climate77703/13/2025
Comm report: To pass as amended and re-refer to Finance1743a04/10/2025 2.1in the 2025 regular or a special legislative session, the appropriation must be given effect
2.2only once.
2.3 APPROPRIATIONS
2.4 Available for the Year
2.5 Ending June 30
20272.6 2026
2.7Sec. 2. DEPARTMENT OF COMMERCE
12,644,000$12,644,000$2.8Subdivision 1.Total Appropriation
2.9 Appropriations by Fund
20272.10 2026
11,047,00011,047,0002.11General
1,597,0001,597,0002.12Petroleum Tank
2.13The amounts that may be spent for each
2.14purpose are specified in the following
2.15subdivisions.
11,047,00011,047,0002.16Subd. 2.Energy Resources
2.17(a) $150,000 the first year and $150,000 the
2.18second year are to remediate vermiculite
2.19insulation from households that are eligible
2.20for weatherization assistance under
2.21Minnesota's weatherization assistance program
2.22state plan under Minnesota Statutes, section
2.23216C.264. Remediation must be performed in
2.24conjunction with federal weatherization
2.25assistance program services.
2.26(b) $189,000 each year is for activities
2.27associated with a utility's implementation of
2.28a natural gas innovation plan under Minnesota
2.29Statutes, section 216B.2427.
2.30(c) $500,000 each year is for a grant to the
2.31clean energy resource teams under Minnesota
2.32Statutes, section 216C.385, subdivision 2, to
2.33provide additional capacity to perform the
2.34duties specified under Minnesota Statutes,
2.35section 216C.385, subdivision 3. This
2Article 1 Sec. 2.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 3.1appropriation may be used to reimburse the
3.2reasonable costs incurred by the Department
3.3of Commerce to administer the grant.
3.4(d) $301,000 each year is to implement energy
3.5benchmarking under Minnesota Statutes,
3.6section 216C.331.
3.7(e) $164,000 each year is for activities
3.8associated with a public utility's transportation
3.9electrification plan filing under Minnesota
3.10Statutes, section 216B.1615.
3.11(f) $77,000 each year is for activities
3.12associated with appeals of consumer
3.13complaints to the commission under
3.14Minnesota Statutes, section 216B.172.
3.15(g) $961,000 each year is for activities
3.16required under Minnesota Statutes, section
3.17216B.1641, for community solar gardens. This
3.18appropriation must be assessed directly to the
3.19public utility subject to Minnesota Statutes,
3.20section 116C.779.
3.21(h) $46,000 each year is for work to align
3.22energy transmission and distribution planning
3.23activities with opportunities along trunk
3.24highway rights-of-way.
3.25(i) $265,000 each year is to (1) participate in
3.26a Public Utilities Commission proceeding to
3.27review electric transmission line owners' plans
3.28to deploy grid-enhancing technologies, and
3.29(2) issue an order to implement the plans. The
3.30base in fiscal year 2028 is $0.
3.31The general fund base is $10,782,000 in fiscal
3.32year 2028 and $10,782,000 in fiscal year 2029.
3Article 1 Sec. 2.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 1,597,0001,597,000
4.1Subd. 3.Petroleum Tank Release Compensation
4.2Board
4.3This appropriation is from the petroleum tank
4.4fund.
13,417,000$13,330,000$4.5Sec. 3. PUBLIC UTILITIES COMMISSION
4.6The general fund base is $13,183,000 in fiscal
4.7year 2028 and later.
4.8 Sec. 4. TRANSFERS.
4.9 $1,199,000 in fiscal year 2026 and $1,199,000 in fiscal year 2027 are transferred from
4.10the general fund to the preweatherization account in the special revenue fund under Minnesota
4.11Statutes, section 216C.264, subdivision 1c. For fiscal years 2028 through 2031, the
4.12commissioner of management and budget must include a transfer of $1,199,000 each year
4.13from the general fund to the preweatherization account in the special revenue fund when
4.14preparing each forecast from the effective date of this section through the February 2027
4.15forecast, under Minnesota Statutes, section 16A.103.
4.16 Sec. 5. APPROPRIATION EXTENSION.
4.17 The availability of the appropriation for the Tribal Advocacy Council on Energy in Laws
4.182023, chapter 60, article 10, section 2, subdivision 2, paragraph (i), is extended to June 30,
4.192026.
4.20 EFFECTIVE DATE.This section is effective the day following final enactment.
4.21 ARTICLE 2
4.22 RENEWABLE DEVELOPMENT ACCOUNT APPROPRIATIONS
4.23Section 1. RENEWABLE DEVELOPMENT FINANCE.
4.24 The sums shown in the columns marked "Appropriations" are appropriated to the agencies
4.25and for the purposes specified in this article. Notwithstanding Minnesota Statutes, section
4.26116C.779, subdivision 1, paragraph (j), the appropriations are from the renewable
4.27development account in the special revenue fund established in Minnesota Statutes, section
4.28116C.779, subdivision 1, and are available for the fiscal years indicated for each purpose.
4.29The figures "2026" and "2027" used in this article mean that the appropriations listed under
4.30them are available for the fiscal year ending June 30, 2026, or June 30, 2027, respectively.
4.31"The first year" is fiscal year 2026. "The second year" is fiscal year 2027. "The biennium"
4.32is fiscal years 2026 and 2027. If an appropriation in this article is enacted more than once
4Article 2 Section 1.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 5.1in the 2025 regular or special legislative session, the appropriation must be given effect
5.2only once.
5.3 APPROPRIATIONS
5.4 Available for the Year
5.5 Ending June 30
20275.6 2026
5.7Sec. 2. DEPARTMENT OF COMMERCE
100,000$10,500,000$5.8Subdivision 1.Total Appropriation
5.9The amounts that may be spent for each
5.10purpose are specified in the following
5.11subdivisions.
5.12Subd. 2."Made in Minnesota" Administration
5.13$100,000 each year is to administer the "Made
5.14in Minnesota" solar energy production
5.15incentive program under Minnesota Statutes,
5.16section 216C.417. Any unobligated amount
5.17remaining on June 30, 2027, cancels to the
5.18renewable development account.
5.19Subd. 3.Microgrid Research and Application
5.20$1,200,000 the first year is for a grant to the
5.21University of St. Thomas Center for Microgrid
5.22Research, which must be used to:
5.23(1) increase the center's capacity to provide
5.24industry partners opportunities to test
5.25near-commercial microgrid products on a
5.26real-world scale and to multiply opportunities
5.27for innovative research;
5.28(2) procure advanced equipment and controls
5.29to enable the extension of the university's
5.30microgrid to additional buildings; and
5.31(3) expand (i) hands-on educational
5.32opportunities for undergraduate and graduate
5.33electrical engineering students to increase
5Article 2 Sec. 2.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 6.1understanding of microgrid operations, and
6.2(ii) partnerships with community colleges.
6.3This is a onetime appropriation and is
6.4available until June 30, 2028.
6.5Subd. 4.Green Hydrogen Project
6.6$2,000,000 the first year is for a grant to the
6.7city of St. Cloud for the Green Hydrogen
6.8Project to incorporate a battery and renewable
6.9energy system. This is a onetime appropriation
6.10and is available until June 30, 2028.
6.11Subd. 5.Anaerobic Digester Energy System
6.12$4,000,000 the first year is for a grant to
6.13Ramsey/Washington Recycling and Energy,
6.14in partnership with Dem-Con HZI Bioenergy,
6.15LLC, to construct an anaerobic digester energy
6.16system in Louisville Township. For the
6.17purposes of this subdivision, "anaerobic
6.18digester energy system" means a facility that
6.19uses diverted food and organic waste to create
6.20renewable natural gas and biochar. This is a
6.21onetime appropriation and is available until
6.22June 30, 2028.
6.23Subd. 6.Como Zoo Geothermal Energy System
6.24$2,200,000 the first year is for a grant to Como
6.25Zoo in the city of St. Paul to construct a
6.26geothermal energy system that provides space
6.27heating and cooling to the large cats building.
6.28For the purposes of this subdivision,
6.29"geothermal energy system" means a system
6.30composed of a heat pump that moves a
6.31heat-transferring fluid through piping
6.32embedded in the earth and absorbs the earth's
6.33constant temperature, a heat exchanger, and
6.34ductwork to distribute heated and cooled air
6Article 2 Sec. 2.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 7.1to a building. This is a onetime appropriation
7.2and is available until June 30, 2028.
7.3Subd. 7.Minnesota Energy Alley
7.4(a) $1,000,000 the first year for a grant to
7.5Clean Energy Economy Minnesota for the
7.6Minnesota Energy Alley initiative. The
7.7initiative is designed to promote energy
7.8innovation through supporting energy
7.9entrepreneurs and emerging businesses to
7.10commercialize energy solutions by matching
7.11promising innovators with established and
7.12trustworthy Minnesota-based public and
7.13private partners to demonstrate emerging
7.14technologies in real-world applications. The
7.15grant may be used to provide seed funding for
7.16businesses, develop a training and
7.17development program, support recruitment of
7.18entrepreneurs to Minnesota, and secure
7.19funding from federal programs and corporate
7.20partners to establish a self-sustaining,
7.21long-term revenue model. This is a onetime
7.22appropriation and is available until June 30,
7.232027.
7.24(b) By January 15, 2027, the commissioner of
7.25commerce must submit a written report to the
7.26chairs and ranking minority members of the
7.27house of representatives and senate
7.28committees with jurisdiction over energy
7.29finance and policy on the activities and
7.30accomplishments of the Minnesota Energy
7.31Alley initiative during the previous fiscal year
7.32and the disposition of this appropriation,
7.33including a separate statement of the amount
7.34of administrative costs.
7Article 2 Sec. 2.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 8.1Subd. 8.Grant Administration
8.2Notwithstanding Minnesota Statutes, section
8.316B.98, subdivision 14, the commissioner may
8.4use up to $100,000 of the amount in this
8.5section for the administrative costs of the
8.6grants in this section.
92,000$92,000$
8.7Sec. 3. DEPARTMENT OF
8.8ADMINISTRATION
8.9$92,000 each year is for software and
8.10administrative costs associated with the state
8.11building energy conservation improvement
8.12revolving loan program under Minnesota
8.13Statutes, section 16B.87.
-0-$5,000,000$8.14Sec. 4. UNIVERSITY OF MINNESOTA
8.15$5,000,000 the first year is for research,
8.16development, outreach, and demonstration of
8.17energy systems that use hydrogen and
8.18ammonia production from renewable energy
8.19resources and other sources of clean energy
8.20as a means of storing and generating
8.21electricity. This is a onetime appropriation and
8.22is available until June 30, 2028.
-0-$3,000,000$8.23Sec. 5. POLLUTION CONTROL AGENCY
8.24$3,000,000 the first year is for a grant to the
8.25owner of a biomass energy generation plant
8.26in Shakopee that uses waste heat from the
8.27generation of electricity in the malting process
8.28to purchase equipment to facilitate the disposal
8.29of wood that is infested by emerald ash borer.
8.30This is a onetime appropriation and is
8.31available until June 30, 2028. Notwithstanding
8.32Minnesota Statutes, section 16B.98,
8.33subdivision 14, the commissioner of the
8.34Pollution Control Agency may use up to
8Article 2 Sec. 5.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 9.1$25,000 of the amount in this section for the
9.2administrative costs of this grant.
9.3 Sec. 6. TRANSFER.
9.4 $2,000,000 in fiscal year 2026 is transferred from the renewable development account
9.5in the special revenue fund to the geothermal planning grant account under Minnesota
9.6Statutes, section 216C.47, subdivision 3.
9.7 Sec. 7. APPROPRIATION EXTENSION.
9.8 Notwithstanding Minnesota Statutes, section 16A.28, and Laws 2023, chapter 60, article
9.911, section 2, subdivision 3, paragraph (c), the availability of the fiscal year 2024 and fiscal
9.10year 2025 appropriations for grants to the University of St. Thomas Center for Microgrid
9.11Research in Laws 2023, chapter 60, article 11, section 2, subdivision 3, are extended to June
9.1230, 2028.
9.13 EFFECTIVE DATE.This section is effective the day following final enactment.
9.14 ARTICLE 3
9.15 ENERGY POLICY
9.16 Section 1. Minnesota Statutes 2024, section 116D.04, subdivision 4a, is amended to read:
9.17 Subd. 4a.Alternative review.(a) The board shall by rule identify alternative forms of
9.18environmental review which will address the same issues and utilize similar procedures as
9.19an environmental impact statement in a more timely or more efficient manner to be utilized
9.20in lieu of an environmental impact statement.
9.21 (b) Upon adoption by the responsible governmental unit of the environmental document
9.22and plan for mitigation under an alternative urban areawide review process, and
9.23notwithstanding any additional environmental review that may otherwise be required for a
9.24phased action or connected action, or project component that was not evaluated in the
9.25alternative urban areawide review process, environmental review is complete and the
9.26prerequisites under subdivision 2b are satisfied with regards to the anticipated residential,
9.27commercial, warehousing, and light industrial development projects that are consistent with
9.28development assumptions within the established boundaries of the geographic area to which
9.29the alternative urban areawide review applies.
9.30 EFFECTIVE DATE.This section is effective the day following final enactment.
9Article 3 Section 1.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 10.1 Sec. 2. Minnesota Statutes 2024, section 216B.02, is amended by adding a subdivision to
10.2read:
10.3 Subd. 11.Emergency backup generator."Emergency backup generator" means a
10.4stationary compressed ignition or spark ignition engine described under Code of Federal
10.5Regulations, title 40, parts 60.4211(f) and 60.4243(d), respectively, that is installed with
10.6equipment that prevents the flow of electricity to the electric grid.
10.7 EFFECTIVE DATE.This section is effective the day following final enactment.
10.8 Sec. 3. Minnesota Statutes 2024, section 216B.02, is amended by adding a subdivision to
10.9read:
10.10 Subd. 12.Data center."Data center" means a freestanding structure that primarily
10.11contains electronic equipment used to process, store, and transmit digital information.
10.12Sec. 4. Minnesota Statutes 2024, section 216B.16, is amended by adding a subdivision to
10.13read:
10.14 Subd. 1b.Definitions.For the purposes of this section, "low-income" means a household:
10.15 (1) who is approved as qualified for energy assistance from the low-income home energy
10.16assistance program;
10.17 (2) whose household income is 50 percent or less of the state median income; or
10.18 (3) who meets another qualification established by the commission.
10.19Sec. 5. Minnesota Statutes 2024, section 216B.16, subdivision 14, is amended to read:
10.20 Subd. 14.Low-income electric rate discount.A public utility shall fund an affordability
10.21program for low-income customers at a base annual funding level of $8,000,000. The annual
10.22funding level shall increase in the calendar years subsequent to each commission approval
10.23of a rate increase for the public utility's residential customers by the same percentage as the
10.24approved residential rate increase. Costs for the program shall be included in the utility's
10.25base rate. For the purposes of this subdivision, "low-income" describes a customer who is
10.26receiving assistance from the federal low-income home energy assistance program. The
10.27affordability program must be designed to target participating customers with the lowest
10.28incomes and highest energy costs in order to lower the percentage of income they devote
10.29to energy bills, increase their payments, lower utility service disconnections, and decrease
10.30costs associated with collection activities on their accounts. For low-income customers who
10.31are 62 years of age or older or disabled, the program must include a $15 discount in each
10Article 3 Sec. 5.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 11.1billing period. For the purposes of this subdivision, "public utility" includes only those
11.2public utilities with more than 200,000 residential electric service customers. The commission
11.3may issue orders necessary to implement, administer, and recover the costs of the program
11.4on a timely basis.
11.5 Sec. 6. Minnesota Statutes 2024, section 216B.16, subdivision 15, is amended to read:
11.6 Subd. 15.Low-income affordability programs.(a) The commission must consider
11.7ability to pay as a factor in setting utility rates and may establish affordability programs for
11.8low-income residential ratepayers in order to ensure affordable, reliable, and continuous
11.9service to low-income utility customers. A public utility serving low-income residential
11.10ratepayers who use natural gas for heating must file an affordability program with the
11.11commission. For purposes of this subdivision, "low-income residential ratepayers" means
11.12ratepayers who receive energy assistance from the low-income home energy assistance
11.13program (LIHEAP).
11.14 (b) Any affordability program the commission orders a utility to implement must:
11.15 (1) lower the percentage of income that participating low-income households devote to
11.16energy bills;
11.17 (2) increase participating customer payments over time by increasing the frequency of
11.18payments;
11.19 (3) decrease or eliminate participating customer arrears;
11.20 (4) lower the utility costs associated with customer account collection activities; and
11.21 (5) coordinate the program with other available low-income bill payment assistance and
11.22conservation resources.
11.23 (c) In ordering affordability programs, the commission may require public utilities to
11.24file program evaluations that measure the effect of the affordability program on:
11.25 (1) the percentage of income that participating households devote to energy bills;
11.26 (2) service disconnections; and
11.27 (3) frequency of customer payments, utility collection costs, arrearages, and bad debt.
11.28 (d) The commission must issue orders necessary to implement, administer, and evaluate
11.29affordability programs, and to allow a utility to recover program costs, including
11.30administrative costs, on a timely basis. The commission may not allow a utility to recover
11.31administrative costs, excluding start-up costs, in excess of five percent of total program
11Article 3 Sec. 6.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 12.1costs, or program evaluation costs in excess of two percent of total program costs. The
12.2commission must permit deferred accounting, with carrying costs, for recovery of program
12.3costs incurred during the period between general rate cases.
12.4 (e) Public utilities may use information collected or created for the purpose of
12.5administering energy assistance to administer affordability programs.
12.6 Sec. 7. Minnesota Statutes 2024, section 216B.164, subdivision 2a, is amended to read:
12.7 Subd. 2a.Definitions.(a) For the purposes of this section, the following terms have the
12.8meanings given them.
12.9 (b) "Aggregated meter" means a meter located on the premises of a customer's owned
12.10or leased property that is contiguous with property containing the customer's designated
12.11meter.
12.12 (c) "Capacity" means the number of megawatts alternating current (AC) at the point of
12.13interconnection between a distributed generation facility and a utility's electric system that
12.14a qualifying facility is capable of producing.
12.15 (d) "Cogeneration" means a combined process whereby electrical and useful thermal
12.16energy are produced simultaneously.
12.17 (e) "Contiguous property" means property owned or leased by the customer sharing a
12.18common border, without regard to interruptions in contiguity caused by easements, public
12.19thoroughfares, transportation rights-of-way, or utility rights-of-way.
12.20 (f) "Customer" means the person who is named on the utility electric bill for the premises.
12.21 (g) "Designated meter" means a meter that is physically attached to the customer's facility
12.22that the customer-generator designates as the first meter to which net metered credits are
12.23to be applied as the primary meter for billing purposes when the customer is serviced by
12.24more than one meter.
12.25 (h) "Distributed generation" means a facility that:
12.26 (1) has a capacity of ten megawatts or less;
12.27 (2) is interconnected with a utility's distribution system, over which the commission has
12.28jurisdiction; and
12.29 (3) generates electricity from natural gas, renewable fuel, or a similarly clean fuel, and
12.30may include waste heat, cogeneration, or fuel cell technology.
12Article 3 Sec. 7.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 13.1 (i) "High-efficiency distributed generation" means a distributed energy facility that has
13.2a minimum efficiency of 40 percent, as calculated under section 272.0211, subdivision 1.
13.3 (j) "Net metered facility" means an electric generation facility constructed for the purpose
13.4of offsetting energy use through the use of renewable energy or high-efficiency distributed
13.5generation sources.
13.6 (k) "Renewable energy" has the meaning given in section 216B.2411, subdivision 2.
13.7 (l) "Standby charge" means a charge imposed by an electric utility upon a distributed
13.8generation facility for the recovery of costs for the provision of standby services, as provided
13.9for in a utility's tariffs approved by the commission, necessary to make electricity service
13.10available to the distributed generation facility.
13.11Sec. 8. Minnesota Statutes 2024, section 216B.164, subdivision 3, is amended to read:
13.12 Subd. 3.Purchases; small facilities.(a) This paragraph applies to cooperative electric
13.13associations and municipal utilities. For a qualifying facility having less than 40-kilowatt
13.14capacity, the customer shall be billed for the net energy supplied by the utility according to
13.15the applicable rate schedule for sales to that class of customer. A cooperative electric
13.16association or municipal utility may charge an additional fee to recover the fixed costs not
13.17already paid for by the customer through the customer's existing billing arrangement. Any
13.18additional charge by the utility must be reasonable and appropriate for that class of customer
13.19based on the most recent cost of service study. The cost of service study must be made
13.20available for review by a customer of the utility upon request. In the case of net input into
13.21the utility system by a qualifying facility having less than 40-kilowatt capacity, compensation
13.22to the customer shall be at a per kilowatt-hour rate determined under paragraph (c), (d), or
13.23(f).
13.24 (b) This paragraph applies to public utilities. For a qualifying facility having less than
13.251,000-kilowatt capacity, the customer shall be billed for the net energy supplied by the
13.26utility according to the applicable rate schedule for sales to that class of customer. In the
13.27case of net input into the utility system by a qualifying facility having: (1) more than
13.2840-kilowatt but less than 1,000-kilowatt capacity, compensation to the customer shall be at
13.29a per kilowatt-hour rate determined under paragraph (c); or (2) less than 40-kilowatt capacity,
13.30compensation to the customer shall be at a per-kilowatt rate determined under paragraph
13.31(c) or (d).
13.32 (c) In setting rates, the commission shall consider the fixed distribution costs to the
13.33utility not otherwise accounted for in the basic monthly charge and shall ensure that the
13Article 3 Sec. 8.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 14.1costs charged to the qualifying facility are not discriminatory in relation to the costs charged
14.2to other customers of the utility. The commission shall set the rates for net input into the
14.3utility system based on avoided costs as defined in the Code of Federal Regulations, title
14.418, section 292.101, paragraph (b)(6), the factors listed in Code of Federal Regulations,
14.5title 18, section 292.304, and all other relevant factors.
14.6 (d) Notwithstanding any provision in this chapter to the contrary, a qualifying facility
14.7having that is interconnected to a public utility and has less than 40-kilowatt capacity may
14.8elect that the compensation for net input by the qualifying facility into the utility system
14.9shall be is at the average retail utility energy rate. "Average retail utility energy rate" is
14.10defined as the average of the retail energy rates, exclusive of special rates based on income,
14.11age, or energy conservation, according to the applicable rate schedule of the utility for sales
14.12to that class of customer.
14.13 (e) If the qualifying facility or net metered facility is interconnected with a nongenerating
14.14utility which has a sole source contract with a municipal power agency or a generation and
14.15transmission utility, the nongenerating utility may elect to treat its purchase of any net input
14.16under this subdivision as being made on behalf of its supplier and shall be reimbursed by
14.17its supplier for any additional costs incurred in making the purchase. Qualifying facilities
14.18or net metered facilities having less than 1,000-kilowatt capacity if interconnected to a
14.19public utility, or less than 40-kilowatt capacity if interconnected to a cooperative electric
14.20association or municipal utility may, at the customer's option, elect to be governed by the
14.21provisions of subdivision 4.
14.22 (f) A customer with a qualifying facility or net metered facility having a capacity below
14.2340 kilowatts that is interconnected to a cooperative electric association or a municipal utility
14.24may elect to be compensated for the customer's net input into the utility system in the form
14.25of a kilowatt-hour credit on the customer's energy bill carried forward and applied to
14.26subsequent energy bills. Any kilowatt-hour credits carried forward by the customer cancel
14.27at the end of the calendar year with no additional compensation. A customer must be
14.28compensated for a canceled credit at the per kilowatt-hour rate determined under paragraph
14.29(c).
14.30 (g) This section applies only to qualifying facilities that have submitted interconnection
14.31applications after December 31, 2026. Qualifying facilities with interconnection applications
14.32submitted on or before that date are subject to Minnesota Statutes 2024, section 216B.164.
14.33 EFFECTIVE DATE.This section is effective July 1, 2025.
14Article 3 Sec. 8.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 15.1 Sec. 9. Minnesota Statutes 2024, section 216B.164, subdivision 4a, is amended to read:
15.2 Subd. 4a.Aggregation of meters.(a) For the purpose of measuring electricity under
15.3subdivisions 3 and 3a, a public utility must aggregate for billing purposes a customer's
15.4designated meter with one or more aggregated meters if a customer requests that it do so.
15.5To qualify for aggregation under this subdivision, a meter must be owned by the customer
15.6requesting the aggregation, must be located on contiguous property owned by the customer
15.7requesting the aggregation, and the total of all aggregated meters must be subject to the size
15.8limitation in this section. A cooperative electric association or a municipal utility must
15.9aggregate for billing purposes one or more aggregated meters if a customer requests that it
15.10do so.
15.11 (b) A public utility must comply with a request by a customer-generator to aggregate
15.12additional meters within 90 days. The specific meters must be identified at the time of the
15.13request. In the event that more than one meter is identified, the customer must designate
15.14the rank order for the aggregated meters to which the net metered credits are to be applied.
15.15At least 60 days prior to the beginning of the next annual billing period, a customer may
15.16amend the rank order of the aggregated meters, subject to this subdivision.
15.17 (c) The aggregation of meters applies only to charges that use kilowatt-hours as the
15.18billing determinant. All other charges applicable to each meter account shall be billed to
15.19the customer.
15.20 (d) A public utility will first apply the kilowatt-hour credit to the charges for the
15.21designated meter and then to the charges for the aggregated meters in the rank order specified
15.22by the customer. If the net metered facility supplies more electricity to the public utility
15.23than the energy usage recorded by the customer-generator's designated and aggregated
15.24meters during a monthly billing period, the public utility shall apply credits to the customer's
15.25next monthly bill for the excess kilowatt-hours.
15.26 (e) With the commission's prior approval, a public utility may charge the
15.27customer-generator requesting to aggregate meters a reasonable fee to cover the
15.28administrative costs incurred in implementing the costs of this subdivision, pursuant to a
15.29tariff approved by the commission for a public utility.
15.30Sec. 10. Minnesota Statutes 2024, section 216B.1641, is amended by adding a subdivision
15.31to read:
15.32 Subd. 15.Sunset.This section expires July 31, 2028.
15Article 3 Sec. 10.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 16.1 Sec. 11. Minnesota Statutes 2024, section 216B.1691, subdivision 1, is amended to read:
16.2 Subdivision 1.Definitions.(a) For purposes of this section, the following terms have
16.3the meaning meanings given them.
16.4 (b) "Carbon-free" means a technology that generates electricity without emitting carbon
16.5dioxide. Carbon-free includes a technology that, as of the effective date of this act and
16.6thereafter, is used by a utility to generate electricity for retail sale in Minnesota by combusting
16.7wood chips derived from:
16.8 (1) limbs, branches, and other by-products of timber harvesting operations conducted
16.9to obtain wood for nonenergy purposes; or
16.10 (2) discarded wood products.
16.11 (c) Unless otherwise specified in law, "eligible energy technology" means an energy
16.12technology that generates electricity from the following renewable energy sources:
16.13 (1) solar;
16.14 (2) wind;
16.15 (3) hydroelectric with a capacity of: (i) less than 100 megawatts; or (ii) 100 megawatts
16.16or more, provided that the facility is in operation as of February 8, 2023;
16.17 (4) hydrogen generated from the resources listed in this paragraph; or
16.18 (5) biomass, which includes, without limitation, landfill gas; an anaerobic digester
16.19system; the predominantly organic components of wastewater effluent, sludge, or related
16.20by-products from publicly owned treatment works, but not including incineration of
16.21wastewater sludge to produce electricity; and, except as provided in subdivision 1a, an
16.22energy recovery facility used to capture the heat value of mixed municipal solid waste or
16.23refuse-derived fuel from mixed municipal solid waste as a primary fuel.
16.24 (d) "Electric utility" means: (1) a public utility providing electric service; (2) a generation
16.25and transmission cooperative electric association; (3) a municipal power agency; (4) a power
16.26district; or (5) a cooperative electric association or municipal utility providing electric service
16.27that is not a member of an entity in clauses (2) to (4).
16.28 (e) "Environmental justice area" means an area in Minnesota that, based on the most
16.29recent data published by the United States Census Bureau, meets one or more of the following
16.30criteria:
16.31 (1) 40 percent or more of the area's total population is nonwhite;
16Article 3 Sec. 11.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 17.1 (2) 35 percent or more of households in the area have an income that is at or below 200
17.2percent of the federal poverty level;
17.3 (3) 40 percent or more of the area's residents over the age of five have limited English
17.4proficiency; or
17.5 (4) the area is located within Indian country, as defined in United State Code, title 18,
17.6section 1151.
17.7 (f) "Total retail electric sales" means the kilowatt-hours of electricity sold in a year by
17.8an electric utility to retail customers of the electric utility or to a distribution utility for
17.9distribution to the retail customers of the distribution utility.
17.10 EFFECTIVE DATE.This section is effective the day following final enactment.
17.11Sec. 12. Minnesota Statutes 2024, section 216B.1691, subdivision 2g, is amended to read:
17.12 Subd. 2g.Carbon-free standard.(a) In addition to the requirements under subdivisions
17.132a and 2f, each electric utility must generate or procure sufficient electricity generated from
17.14a carbon-free energy technology to provide the electric utility's retail customers in Minnesota,
17.15or the retail customers of a distribution utility to which the electric utility provides wholesale
17.16electric service, so that the electric utility generates or procures an amount of electricity
17.17from carbon-free energy technologies that is equivalent to at least the following standard
17.18percentages of the electric utility's total retail electric sales to retail customers in Minnesota
17.19by the end of the year indicated:
80 percent for public utilities; 60 percent for
17.21 other electric utilities
203017.20 (1)
90 percent for all electric utilities203517.22 (2)
100 percent for all electric utilities.204017.23 (3)
17.24 (b) For purposes of this section, electricity generated from a carbon-free technology
17.25includes electricity generated by a peaking facility that uses only biodiesel fuel, as defined
17.26in section 239.77, subdivision 1, paragraph (b), for the first 400 hours each year in which
17.27the peaking facility uses only biodiesel fuel.
17.28 EFFECTIVE DATE.This section is effective the day following final enactment.
17.29Sec. 13. Minnesota Statutes 2024, section 216B.2402, subdivision 16, is amended to read:
17.30 Subd. 16.Low-income household."Low-income household" means a household whose
17.31household income:
17Article 3 Sec. 13.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 18.1 (1) is 80 percent or less of the area median household income for the geographic area
18.2in which the low-income household is located, as calculated by the United States Department
18.3of Housing and Urban Development a body of the state or federal government; or
18.4 (2) meets the income eligibility standards, as determined by the commissioner, required
18.5for a household to receive financial assistance from a federal, state, municipal, or utility
18.6program administered or approved by the department.
18.7 Sec. 14. Minnesota Statutes 2024, section 216B.2421, subdivision 2, is amended to read:
18.8 Subd. 2.Large energy facility."Large energy facility" means:
18.9 (1) any electric power generating plant or combination of plants at a single site with a
18.10combined capacity of 50,000 kilowatts or more and transmission lines directly associated
18.11with the plant that are necessary to interconnect the plant to the transmission system;
18.12 (2) any high-voltage transmission line with a capacity of 300 kilovolts or more and
18.13greater than one mile in length in Minnesota;
18.14 (3) any high-voltage transmission line with a capacity of 100 kilovolts or more with
18.15more than ten miles of its length in Minnesota;
18.16 (4) any pipeline greater than six inches in diameter and having more than 50 miles of
18.17its length in Minnesota used for the transportation of coal, crude petroleum or petroleum
18.18fuels or oil, or their derivatives;
18.19 (5) any pipeline for transporting natural or synthetic gas at pressures in excess of 200
18.20pounds per square inch with more than 50 miles of its length in Minnesota;
18.21 (6) any facility designed for or capable of storing on a single site more than 100,000
18.221,000,000 gallons of liquefied natural gas or synthetic gas;
18.23 (7) any underground gas storage facility requiring a permit pursuant to section 103I.681;
18.24 (8) any nuclear fuel processing or nuclear waste storage or disposal facility; and
18.25 (9) any facility intended to convert any material into any other combustible fuel and
18.26having the capacity to process in excess of 75 tons of the material per hour.
18.27Sec. 15. Minnesota Statutes 2024, section 216B.243, subdivision 8, is amended to read:
18.28 Subd. 8.Exemptions.(a) This section does not apply to:
18.29 (1) cogeneration or small power production facilities as defined in the Federal Power
18.30Act, United States Code, title 16, section 796, paragraph (17), subparagraph (A), and
18Article 3 Sec. 15.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 19.1paragraph (18), subparagraph (A), and having a combined capacity at a single site of less
19.2than 80,000 kilowatts; plants or facilities for the production of ethanol or fuel alcohol; or
19.3any case where the commission has determined after being advised by the attorney general
19.4that its application has been preempted by federal law;
19.5 (2) a high-voltage transmission line proposed primarily to distribute electricity to serve
19.6the demand of a single customer at a single location, unless the applicant opts to request
19.7that the commission determine need under this section or section 216B.2425;
19.8 (3) the upgrade to a higher voltage of an existing transmission line that serves the demand
19.9of a single customer that primarily uses existing rights-of-way, unless the applicant opts to
19.10request that the commission determine need under this section or section 216B.2425;
19.11 (4) a high-voltage transmission line of one mile or less required to connect a new or
19.12upgraded substation to an existing, new, or upgraded high-voltage transmission line;
19.13 (5) conversion of the fuel source of an existing electric generating plant to using natural
19.14gas;
19.15 (6) the modification of an existing electric generating plant to increase efficiency, as
19.16long as the capacity of the plant is not increased more than ten percent or more than 100
19.17megawatts, whichever is greater;
19.18 (7) a large wind energy conversion system, as defined in section 216I.02, subdivision
19.1912, or a solar energy generating system, as defined in section 216I.02, subdivision 18, for
19.20which a site permit application is submitted by an independent power producer under chapter
19.21216I;
19.22 (8) a large wind energy conversion system, as defined in section 216I.02, subdivision
19.2312, or a solar energy generating system, as defined in section 216I.02, subdivision 18,
19.24engaging in a repowering project that:
19.25 (i) will not result in the system exceeding the nameplate capacity under its most recent
19.26interconnection agreement; or
19.27 (ii) will result in the system exceeding the nameplate capacity under its most recent
19.28interconnection agreement, provided that the Midcontinent Independent System Operator
19.29has provided a signed generator interconnection agreement that reflects the expected net
19.30power increase;
19.31 (9) energy storage systems, as defined in section 216I.02, subdivision 6;
19Article 3 Sec. 15.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 20.1 (10) transmission lines that directly interconnect large wind energy conversion systems,
20.2solar energy generating systems, or energy storage systems to the transmission system; or
20.3 (11) relocation of an existing high voltage transmission line to new right-of-way, provided
20.4that any new structures that are installed are not designed for and capable of operation at
20.5higher voltage.; or
20.6 (12) a combination of emergency backup generators at a single site with a combined
20.7capacity of 50,000 kilowatts or more that provides power to a data center and is eligible for
20.8permitting as a single stationary source under Minnesota Rules, part 7007.0200, 7007.0250,
20.97007.1100, or 7007.1110 to 7007.1141.
20.10 (b) For the purpose of this subdivision, "repowering project" means:
20.11 (1) modifying a large wind energy conversion system or a solar energy generating system
20.12that is a large energy facility to increase its efficiency without increasing its nameplate
20.13capacity;
20.14 (2) replacing turbines in a large wind energy conversion system without increasing the
20.15nameplate capacity of the system; or
20.16 (3) increasing the nameplate capacity of a large wind energy conversion system.
20.17 EFFECTIVE DATE; APPLICATION.This section is effective the day following
20.18final enactment and applies to applications under Minnesota Statutes, section 216B.243,
20.19that are pending before or submitted to the Public Utilities Commission on or after that date.
20.20Sec. 16. Minnesota Statutes 2024, section 216C.09, is amended to read:
20.21 216C.09 COMMISSIONER DUTIES.
20.22 (a) The commissioner shall:
20.23 (1) manage the department as the central repository within the state government for the
20.24collection of data on energy;
20.25 (2) prepare and adopt an emergency allocation plan specifying actions to be taken in the
20.26event of an impending serious shortage of energy, or a threat to public health, safety, or
20.27welfare;
20.28 (3) undertake a continuing assessment of trends in the consumption of all forms of energy
20.29and analyze the social, economic, and environmental consequences of these trends;
20.30 (4) carry out energy conservation and efficiency measures as specified by the legislature
20.31and recommend to the governor and the legislature additional energy policies and energy
20Article 3 Sec. 16.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 21.1conservation measures and efficiency programming as required to meet the objectives of
21.2this chapter;
21.3 (5) collect and analyze data relating to present and future demands and resources for all
21.4sources of energy;
21.5 (6) evaluate policies governing the establishment of rates and prices for energy as related
21.6to energy conservation and energy efficiency, and other goals and policies of this chapter,
21.7and make recommendations for changes in energy pricing policies and rate schedules;
21.8 (7) study the impact and relationship of the state energy policies to international, national,
21.9and regional energy policies;
21.10 (8) design and implement a state program for the energy conservation of energy and
21.11efficiency; this the program shall must include but is not be limited to, general commercial,
21.12industrial, and residential, and transportation areas; such the program shall must also provide
21.13for the evaluation of energy systems as they relate to lighting, heating, refrigeration, air
21.14conditioning, building design and operation, and appliance manufacturing and operation;
21.15 (9) inform and educate the public about the sources and uses of energy and the ways in
21.16which persons Minnesotans can transition to a clean energy future, conserve energy, and
21.17save money;
21.18 (10) dispense funds made available for the purpose of research studies and projects of
21.19professional and civic orientation, which are related to either energy conservation, resource
21.20recovery, or the development of alternative energy technologies which conserve
21.21nonrenewable energy resources while creating minimum environmental impact;
21.22 (11) charge other governmental departments and agencies involved in energy-related
21.23activities with specific information gathering goals and require that those goals be met;
21.24 (12) design a comprehensive program for the development of indigenous energy
21.25resources. The program shall include, but not be limited to, providing technical,
21.26informational, educational, and financial services and materials to persons, businesses,
21.27municipalities, and organizations involved in the development of primary and emerging
21.28energy sources, including but not limited to solar, wind, hydropower, peat, fiber fuels,
21.29biomass, and other alternative energy resources. The program shall be evaluated by the
21.30alternative energy technical activity; and
21.31 (13) dispense loans, grants, or other financial aid resources from money received from
21.32litigation or a settlement of alleged violations of federal petroleum-pricing regulations made
21.33available to the department for that purpose.
21Article 3 Sec. 16.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 22.1 (b) Further, the commissioner may participate fully in hearings before the Public Utilities
22.2Commission on matters pertaining to rate design, cost allocation, efficient resource utilization,
22.3utility conservation investments, small power production, cogeneration, and other rate issues.
22.4The commissioner shall support the policies stated in section 216C.05 and shall prepare
22.5and defend testimony proposed to encourage energy conservation improvements as defined
22.6in section 216B.241.
22.7 Sec. 17. Minnesota Statutes 2024, section 216C.10, is amended to read:
22.8 216C.10 COMMISSIONER POWERS.
22.9 (a) The commissioner may:
22.10 (1) adopt rules under chapter 14 as necessary to carry out the purposes of this chapter;
22.11 (2) make all contracts under this chapter and do all things necessary to cooperate with
22.12the United States government, and to qualify for, accept, and disburse any grant intended
22.13to administer this chapter;
22.14 (3) provide on-site technical assistance to units of local government in order to enhance
22.15local capabilities for dealing with energy problems to provide energy-related financial
22.16resources, planning, outreach, and engagement;
22.17 (4) administer for the state, energy programs under federal law, regulations, or guidelines,
22.18and coordinate the programs and activities with other state agencies, units of local
22.19government, and educational institutions;
22.20 (5) develop a state energy investment plan with yearly energy conservation and alternative
22.21energy development goals, investment targets, and marketing strategies;
22.22 (6) perform market analysis studies relating to conservation, alternative and renewable
22.23energy resources, and energy recovery;
22.24 (7) assist with the preparation of proposals for innovative conservation, renewable,
22.25alternative, or energy recovery projects;
22.26 (8) manage and disburse funds made available for the purpose of research studies or
22.27demonstration projects related to energy conservation or other activities deemed appropriate
22.28by the commissioner;
22.29 (9) intervene in certificate of need proceedings before the Public Utilities Commission;
22.30 (10) collect fees from recipients of loans, grants, or other financial aid from money
22.31received from litigation or settlement of alleged violations of federal petroleum-pricing
22Article 3 Sec. 17.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 23.1regulations, which fees must be used to pay the department's costs in administering those
23.2financial aids; and
23.3 (11) collect fees from proposers and operators of conservation and other energy-related
23.4programs that are reviewed, evaluated, or approved by the department, other than proposers
23.5that are political subdivisions or community or nonprofit organizations, to cover the
23.6department's cost in making the reviewal, evaluation, or approval and in developing additional
23.7programs for others to operate.
23.8 (b) Notwithstanding any other law, the commissioner is designated the state agent to
23.9apply for, receive, and accept federal or other funds made available to the state for the
23.10purposes of this chapter.
23.11Sec. 18. Minnesota Statutes 2024, section 216C.11, is amended to read:
23.12 216C.11 ENERGY CONSERVATION INFORMATION CENTER.
23.13 (a) The commissioner shall must establish an Energy Information Center in the
23.14department's offices in St. Paul department. The information center shall must maintain a
23.15toll-free telephone information service and disseminate printed materials on energy
23.16conservation topics, including but not limited to, availability of loans and other public and
23.17private financing methods for energy conservation physical improvements, the techniques
23.18and materials used to conserve energy in buildings, including retrofitting or upgrading
23.19insulation and installing weatherstripping, the projected prices and availability of different
23.20sources of energy, and alternative sources of energy physical, virtual, and mobile information
23.21service that collects, analyzes, and disseminates energy resources, data, technical assistance
23.22and expertise, financial assistance, connections, and information on a variety of energy
23.23topics relevant to Minnesota consumers, businesses, Tribal and local governments, and
23.24community organizations. The information center must be accessible and responsive to
23.25public inquiries and must conduct proactive outreach.
23.26 The Energy Information Center shall serve as the official Minnesota Alcohol Fuels
23.27Information Center and shall disseminate information, printed, by the toll-free telephone
23.28information service, or otherwise on the applicability and technology of alcohol fuels.
23.29 The information center shall include information on the potential hazards of energy
23.30conservation techniques and improvements in the printed materials disseminated. The
23.31commissioner shall not be liable for damages arising from the installation or operation of
23.32equipment or materials recommended by the information center.
23Article 3 Sec. 18.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 24.1 (b) The information center shall must use the information collected under section
24.2216C.02, subdivision 1, to maintain a central source of information on energy conservation,
24.3energy efficiency, and other energy-related programs, including both programs required by
24.4law or rule and programs developed and carried on voluntarily.
24.5 Sec. 19. Minnesota Statutes 2024, section 216C.12, is amended to read:
24.6 216C.12 ENERGY CONSERVATION PUBLICITY LITERACY.
24.7 (a) The commissioner, in consultation with other affected agencies or departments shall,
24.8must develop informational materials, pamphlets and radio and television messages and
24.9messaging on energy conservation and housing energy efficiency programs available in
24.10Minnesota, renewable energy resources, and energy supply and demand. The printed materials
24.11shall include information on available tax credits for residential energy conservation
24.12measures, residential retrofitting loan and grant programs, and data on the economics of
24.13energy conservation and renewable resource measures. Copies of printed materials shall be
24.14distributed to members of the appropriate standing committees of the legislature. The
24.15commissioner must use modern and current outreach strategies and media to distribute the
24.16informational materials and messaging to the widest possible audience.
24.17 (b) The informational materials must promote energy literacy for individuals and
24.18communities to help individuals and communities make informed decisions on topics ranging
24.19from smart energy use at home and consumer choices to national and international energy
24.20policy. The informational materials must include but are not limited to information on energy
24.21sources, energy generation, energy use, energy conservation strategies, the energy workforce
24.22sector, and state and federal energy-related programs administered by the department.
24.23Sec. 20. Minnesota Statutes 2024, section 216C.391, subdivision 1, is amended to read:
24.24 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have
24.25the meanings given.
24.26 (b) "Competitive funds" means federal funds awarded to selected applicants based on
24.27the grantor's evaluation of the strength of an application measured against all other
24.28applications.
24.29 (c) "Disadvantaged community" has the meaning given by the federal agency disbursing
24.30federal funds.
24Article 3 Sec. 20.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 25.1 (d) "Eligible entity" means an entity located in Minnesota that is eligible to receive
25.2federal funds, tax credits, loans, or an entity that has at least one Minnesota-based partner,
25.3as determined by the grantor of the federal funds, tax credits, or loans.
25.4 (e) "Federal funds" means federal formula or competitive funds available for award to
25.5applicants for energy projects under the Infrastructure Investment and Jobs Act, Public Law
25.6117-58, or the Inflation Reduction Act of 2022, Public Law 117-169.
25.7 (f) "Formula funds" means federal funds awarded to all eligible applicants on a
25.8noncompetitive basis.
25.9 (g) "Loans" means federal loans from loan funds authorized or funded in the Inflation
25.10Reduction Act of 2022, Public Law 117-169.
25.11 (h) "Match" means the amount of state nonfederal money a successful grantee in
25.12Minnesota is required to contribute to a project as a condition of receiving federal funds.
25.13 (i) "Political subdivision" has the meaning given in section 331A.01, subdivision 3.
25.14 (j) "Project" means the activities proposed to be undertaken by an eligible entity awarded
25.15federal funds and are located in Minnesota or will directly benefit Minnesotans.
25.16 (k) "Tax credits" means federal tax credits authorized in the Inflation Reduction Act of
25.172022, Public Law 117-169.
25.18 (l) "Tribal government" has the meaning given in section 116J.64, subdivision 4.
25.19Sec. 21. Minnesota Statutes 2024, section 216C.391, subdivision 3, is amended to read:
25.20 Subd. 3.Grant awards; eligible entities; priorities.(a) Grants may be awarded under
25.21this section to eligible entities in accordance with the following order of priorities:
25.22 (1) federal formula funds directed to the state that require a match;
25.23 (2) federal funds directed to a political subdivision or a Tribal government that require
25.24a match;
25.25 (3) federal funds directed to an institution of higher education, a consumer-owned utility,
25.26a business, or a nonprofit organization that require a match;
25.27 (4) federal funds directed to investor-owned utilities that require a match;
25.28 (5) federal funds directed to an eligible entity not included in clauses (1) to (4) that
25.29require a match; and
25Article 3 Sec. 21.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 26.1 (6) all other grant opportunities directed to eligible entities that do not require a match
26.2but for which the commissioner determines that a grant made under this section is likely to
26.3enhance the likelihood of an applicant receiving federal funds, or to increase the potential
26.4amount of federal funds received.
26.5 (b) By November 15, 2023, the commissioner must develop and publicly post, and report
26.6to the chairs and ranking minority members of the legislative committees with jurisdiction
26.7over energy finance, the federal energy grant funds that are eligible for state matching funds
26.8under this section.
26.9 (c) Notwithstanding section 16B.98, subdivision 5, paragraph (b), a grant made under
26.10this section may exceed five years.
26.11Sec. 22. Minnesota Statutes 2024, section 216C.47, subdivision 1, is amended to read:
26.12 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have
26.13the meanings given.
26.14 (b) "Eligible applicant" means a county, city, town, Tribal government, or the
26.15Metropolitan Council.
26.16 (c) "Geothermal energy system" means a system that heats and cools one or more
26.17buildings by using the constant temperature of the earth as both a heat source and heat sink,
26.18and a heat exchanger consisting of an underground closed loop system of piping containing
26.19a liquid to absorb and relinquish heat within the earth. Geothermal energy system includes:
26.20 (1) a bored geothermal heat exchanger, as defined in section 103I.005;
26.21 (2) a groundwater thermal exchange device, as defined in section 103I.005; and
26.22 (3) a submerged closed loop heat exchanger, as defined in section 103I.005.
26.23 (d) "Tribal government" means the elected government of a federally recognized Indian
26.24Tribe located in Minnesota.
26.25 EFFECTIVE DATE.This section is effective the day following final enactment.
26.26Sec. 23. Minnesota Statutes 2024, section 216I.02, is amended by adding a subdivision
26.27to read:
26.28 Subd. 5a.Emergency backup generator."Emergency backup generator" has the
26.29meaning given in section 216B.02, subdivision 11.
26.30 EFFECTIVE DATE.This section is effective the day following final enactment.
26Article 3 Sec. 23.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 27.1 Sec. 24. Minnesota Statutes 2024, section 216I.07, subdivision 2, is amended to read:
27.2 Subd. 2.Applicable projects.The requirements and procedures under this section apply
27.3to projects for which the applicant's proposal is:
27.4 (1) large electric power generating plants with a capacity of less than 80 megawatts;
27.5 (2) a combination of emergency backup generators designed to serve one person and
27.6located on property owned or controlled by the person;
27.7 (2) (3) large electric power generating plants that are fueled by natural gas;
27.8 (3) (4) high-voltage transmission lines with a capacity between 100 and 300 kilovolts;
27.9 (4) (5) high-voltage transmission lines with a capacity in excess of 300 kilovolts and
27.10less than 30 miles in length in Minnesota;
27.11 (5) (6) high-voltage transmission lines with a capacity in excess of 300 kilovolts, if at
27.12least 80 percent of the distance of the line in Minnesota, as proposed by the applicant, is
27.13located along existing high-voltage transmission line right-of-way;
27.14 (6) (7) solar energy systems;
27.15 (7) (8) energy storage systems; and
27.16 (8) (9) large wind energy conversion systems.
27.17 EFFECTIVE DATE; APPLICATION.This section is effective July 1, 2025, and
27.18applies to applications under Minnesota Statutes, section 216I.07, that are pending before
27.19or submitted to the Public Utilities Commission on or after that date.
27.20Sec. 25. Minnesota Statutes 2024, section 216I.07, subdivision 3, is amended to read:
27.21 Subd. 3.Environmental review.(a) For the projects identified in subdivision 2 and
27.22following the procedures under this section, the applicant must prepare and submit an
27.23environmental assessment with the application. A draft of the environmental assessment
27.24must also be provided to commission staff as part of the preapplication review under section
27.25216I.05, subdivision 6. The environmental assessment must (1) contain information regarding
27.26the proposed project's human and environmental impacts, and (2) address mitigating measures
27.27for identified impacts. The environmental assessment for projects identified in subdivision
27.282, clause (2), must also include a discussion of reasonable alternatives to the proposed
27.29project considering: (i) the appropriateness of the size and type of the proposed generation
27.30method compared to reasonable alternatives; (ii) the cost to the proposer of energy to be
27.31supplied by the project compared to the cost of energy that would be supplied by reasonable
27Article 3 Sec. 25.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 28.1alternatives; (iii) the effects of the proposed project on the natural and socioeconomic
28.2environments compared to the effects of reasonable alternatives; and (iv) the expected
28.3reliability of the proposed facility compared to the expected reliability of reasonable
28.4alternatives. The environmental assessment is the only state environmental review document
28.5that must be prepared for the proposed project.
28.6 (b) If after the public meeting the commission identifies other sites or routes or potential
28.7impacts for review, the commission must prepare an addendum to the environmental
28.8assessment that evaluates (1) the human and environmental impacts of the alternative site
28.9or route, and (2) any additional mitigating measures related to the identified impacts
28.10consistent with the scoping decision made pursuant to section 216I.06, subdivision 10,
28.11clause (2). The public may provide comments on the environmental assessment and any
28.12addendum to the environmental assessment at the public hearing and comment period under
28.13subdivision 4. When making the commission's final decision, the commission must consider
28.14the environmental assessment, the environmental assessment addendum, if any, and the
28.15entirety of the record related to human and environmental impacts.
28.16 ARTICLE 4
28.17 SECURITIZATION
28.18Section 1. [216B.491] DEFINITIONS.
28.19 Subdivision 1.Scope.For the purposes of sections 216B.491 to 216B.499, the terms
28.20defined in this section have the meanings given.
28.21 Subd. 2.Ancillary agreement."Ancillary agreement" means a bond, insurance policy,
28.22letter of credit, reserve account, surety bond, interest rate lock or swap arrangement, liquidity
28.23or credit support arrangement, or other financial arrangement entered into in connection
28.24with extraordinary event bonds that is designed to promote the credit quality and
28.25marketability of extraordinary event bonds or to mitigate the risk of an increase in interest
28.26rates.
28.27 Subd. 3.Assignee."Assignee" means a person to which an interest in extraordinary
28.28event property is sold, assigned, transferred, or conveyed, other than as security, and any
28.29successor to or subsequent assignee of the person.
28.30 Subd. 4.Bondholder."Bondholder" means a holder or owner of extraordinary event
28.31bonds.
28Article 4 Section 1.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 29.1 Subd. 5.Customer."Customer" means a person who purchases natural gas or natural
29.2gas transportation services from a utility in Minnesota. Customer does not include a person
29.3who:
29.4 (1) purchases natural gas transportation services from a utility in Minnesota that serves
29.5fewer than 350,000 natural gas customers in Minnesota; and
29.6 (2) does not purchase natural gas from a utility in Minnesota.
29.7 Subd. 6.Extraordinary event.(a) "Extraordinary event" means an event arising from
29.8unforeseen circumstances of sufficient magnitude, as determined by the commission:
29.9 (1) to impose significant costs on customers; and
29.10 (2) for which the issuance of extraordinary event bonds in response to the event meets
29.11the conditions of section 216B.492, subdivision 2.
29.12 (b) Extraordinary event includes but is not limited to a storm event or other natural
29.13disaster, an act of God, war, terrorism, sabotage, vandalism, a cybersecurity attack, or a
29.14temporary significant increase in the wholesale price of natural gas.
29.15 Subd. 7.Extraordinary event activity."Extraordinary event activity" means an activity
29.16undertaken by or on behalf of a utility to restore or maintain the utility's ability to provide
29.17natural gas service following one or more extraordinary events, including but not limited
29.18to activities related to mobilizing, staging, constructing, reconstructing, replacing, or repairing
29.19natural gas transmission, distribution, storage, or general facilities.
29.20 Subd. 8.Extraordinary event bonds."Extraordinary event bonds" means debt securities,
29.21including but not limited to senior secured bonds, debentures, notes, certificates of
29.22participation, certificates of beneficial interest, certificates of ownership, or other evidences
29.23of indebtedness or ownership, that: (1) have a scheduled maturity of no longer than 30 years
29.24and a final legal maturity date that is not later than 32 years from the issue date; (2) are rated
29.25AA, Aa2, or higher by a major independent credit rating agency at the time of issuance;
29.26and (3) are issued by a utility or an assignee under a financing order.
29.27 Subd. 9.Extraordinary event charge."Extraordinary event charge" means a
29.28nonbypassable charge that:
29.29 (1) a utility that is the subject of a financing order or the utility's successor or assignee
29.30imposes on all of the utility's customers;
29.31 (2) is separate from the utility's base rates; and
29Article 4 Section 1.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 30.1 (3) provides a source of revenue used only to repay, finance, or refinance extraordinary
30.2event costs.
30.3 Subd. 10.Extraordinary event costs."Extraordinary event costs":
30.4 (1) means all incremental costs of extraordinary event activities that are approved by
30.5the commission in a financing order issued under section 216B.492 as being:
30.6 (i) necessary to enable the utility to restore or maintain natural gas service to customers
30.7after the utility experiences an extraordinary event; and
30.8 (ii) prudent and reasonable;
30.9 (2) includes costs to repurchase equity or retire any indebtedness relating to extraordinary
30.10event activities;
30.11 (3) are net of applicable insurance proceeds, tax benefits, and any other amounts intended
30.12to reimburse the utility for extraordinary event activities, including government grants or
30.13aid of any kind;
30.14 (4) do not include any monetary penalty, fine, or forfeiture assessed against a utility by
30.15a government agency or court under a federal or state environmental statute, rule, or
30.16regulation; and
30.17 (5) must be adjusted to reflect:
30.18 (i) the difference, as determined by the commission, between extraordinary event costs
30.19that the utility expects to incur and actual, reasonable, and prudent costs incurred; or
30.20 (ii) a more fair or reasonable allocation of extraordinary event costs to customers over
30.21time, as expressed in a commission order, provided that after the issuance of extraordinary
30.22event bonds relating to the extraordinary event costs, the adjustment must not (A) reduce
30.23or impair the extraordinary event property relating to the extraordinary event bonds, or (B)
30.24reduce, impair, postpone, or terminate extraordinary event charges relating to the
30.25extraordinary event bonds until all principal, interest, and redemption premium, if any,
30.26payable on the extraordinary event bonds, all financing costs for the extraordinary event
30.27bonds, and all amounts that must be paid to an assignee or financing party under an ancillary
30.28agreement relating to the extraordinary event bonds are paid in full.
30.29 Subd. 11.Extraordinary event property."Extraordinary event property" means:
30.30 (1) all rights and interests that a utility or the utility's successor or assignee possess under
30.31a financing order to impose, bill, collect, receive, and obtain periodic adjustments to
30Article 4 Section 1.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 31.1extraordinary event charges authorized under a financing order issued by the commission;
31.2and
31.3 (2) all revenue, collections, claims, rights to payments, payments, money, or proceeds
31.4arising from the rights and interests specified in clause (1), regardless of whether any are
31.5commingled with other revenue, collections, rights to payment, payments, money, or
31.6proceeds.
31.7 Subd. 12.Extraordinary event revenue."Extraordinary event revenue" means revenue,
31.8receipts, collections, payments, money, claims, or other proceeds arising from extraordinary
31.9event property.
31.10 Subd. 13.Financing costs."Financing costs" means:
31.11 (1) principal, interest, and redemption premiums, if any, that are payable on extraordinary
31.12event bonds;
31.13 (2) payments required under an ancillary agreement and amounts required to fund or
31.14replenish a reserve account or other accounts established under the terms of any indenture,
31.15ancillary agreement, or other financing document pertaining to extraordinary event bonds;
31.16 (3) other demonstrable costs related to issuing, supporting, repaying, refunding, and
31.17servicing extraordinary event bonds, including but not limited to servicing fees, accounting
31.18and auditing fees, trustee fees, legal fees, consulting fees, financial adviser fees,
31.19administrative fees, placement and underwriting fees, capitalized interest, rating agency
31.20fees, stock exchange listing and compliance fees, security registration fees, filing fees,
31.21information technology programming costs, and any other demonstrable costs necessary to
31.22otherwise ensure and guarantee the timely payment of extraordinary event bonds, other
31.23amounts payable in connection with extraordinary event bonds, or other extraordinary event
31.24charges payable in connection with extraordinary event bonds;
31.25 (4) taxes and license fees imposed on the revenue generated from collecting an
31.26extraordinary event charge;
31.27 (5) state and local taxes, including franchise, sales and use, and other taxes or similar
31.28charges, including but not limited to regulatory assessment fees, whether paid, payable, or
31.29accrued; and
31.30 (6) costs incurred by the commission to (i) hire and compensate additional temporary
31.31staff needed to perform the commission's responsibilities under this section, and (ii) engage
31.32specialized counsel and expert consultants experienced in securitized utility ratepayer-backed
31Article 4 Section 1.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 32.1bond financings similar to extraordinary event bonds financings, as provided under section
32.2216B.494.
32.3 Subd. 14.Financing order."Financing order" means an order issued by the commission
32.4under section 216B.492 that authorizes an applicant to:
32.5 (1) issue extraordinary event bonds in one or more series;
32.6 (2) impose, charge, and collect extraordinary event charges; and
32.7 (3) create extraordinary event property.
32.8 Subd. 15.Financing party."Financing party" means a holder of extraordinary event
32.9bonds and a trustee, a collateral agent, a party under an ancillary agreement, or any other
32.10person acting for the benefit of extraordinary event bondholders.
32.11 Subd. 16.Natural gas facility."Natural gas facility" means natural gas pipelines,
32.12including distribution lines, underground storage areas, liquefied natural gas facilities,
32.13propane storage tanks, and other facilities the commission determines are used and useful
32.14to provide natural gas service to retail and transportation customers in Minnesota.
32.15 Subd. 17.Nonbypassable."Nonbypassable" means an extraordinary event charge that
32.16a retail customer located within a utility service area cannot avoid and must pay.
32.17 Subd. 18.Pretax costs."Pretax costs" means costs incurred by a utility and approved
32.18by the commission, including but not limited to:
32.19 (1) unrecovered capitalized costs of replaced natural gas facilities damaged or destroyed
32.20by an extraordinary event;
32.21 (2) costs to decommission and restore the site of a natural gas facility damaged or
32.22destroyed by an extraordinary event;
32.23 (3) other applicable capital and operating costs, accrued carrying charges, deferred
32.24expenses, reductions for applicable insurance, and salvage proceeds; and
32.25 (4) costs to retire any existing indebtedness, fees, costs, and expenses to modify existing
32.26debt agreements, or for waivers or consents related to existing debt agreements.
32.27 Subd. 19.Storm event."Storm event" means a tornado, derecho, ice or snow storm,
32.28wildfire, flood, earthquake, or other significant weather or natural disaster that causes
32.29substantial damage to a utility's infrastructure.
32.30 Subd. 20.Successor."Successor" means a legal entity that succeeds by operation of law
32.31to the rights and obligations of another legal entity as a result of bankruptcy, reorganization,
32Article 4 Section 1.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 33.1restructuring, other insolvency proceeding, merger, acquisition, consolidation, or sale or
33.2transfer of assets.
33.3 Subd. 21.Utility."Utility" means a public utility, as defined in section 216B.02,
33.4subdivision 4, that provides natural gas service to Minnesota customers. Utility includes
33.5the utility's successors or assignees.
33.6 Sec. 2. [216B.492] FINANCING ORDER.
33.7 Subdivision 1.Application.(a) A utility may file an application with the commission
33.8requesting a financing order to enable the utility to recover extraordinary event costs by
33.9issuing extraordinary event bonds under this section.
33.10 (b) The application must include the following information, as applicable:
33.11 (1) a description of each natural gas facility to be repaired or replaced;
33.12 (2) the undepreciated value remaining in each natural gas facility under clause (1) that
33.13the utility proposes to repair or replace using financing obtained by issuing extraordinary
33.14event bonds under sections 216B.491 to 216B.499, and the method used to calculate the
33.15undepreciated value remaining;
33.16 (3) the estimated costs imposed on customers resulting from an extraordinary event that
33.17involves no physical damage to natural gas facilities;
33.18 (4) the estimated savings or estimated mitigation of rate impacts to utility customers if
33.19the financing order is issued as requested in the application, calculated by comparing the
33.20costs to customers that are expected to result from implementing the financing order and
33.21the estimated costs associated with implementing traditional utility financing mechanisms
33.22with respect to the same undepreciated balance, expressed in net present value terms;
33.23 (5) a description of (i) the nonbypassable extraordinary event charge utility customers
33.24must pay in order to fully recover financing costs, and (ii) the method and assumptions used
33.25to calculate the nonbypassable extraordinary event charge;
33.26 (6) a proposed methodology to allocate the revenue requirement for the extraordinary
33.27event charge among the utility's customer classes;
33.28 (7) a description of a proposed adjustment mechanism that is implemented when necessary
33.29to correct any overcollection or undercollection of extraordinary event charges, in order to
33.30complete payment of scheduled principal and interest on extraordinary event bonds and
33.31other financing costs in a timely fashion;
33Article 4 Sec. 2.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 34.1 (8) a memorandum with supporting exhibits, developed by a securities firm that is
34.2experienced in the marketing of securitized utility ratepayer-backed bonds, indicating the
34.3proposed issuance satisfies: (i) the current published AA, Aa2, or higher rating; or (ii)
34.4equivalent rating criteria of at least one nationally recognized securities rating organization
34.5for issuances similar to the proposed extraordinary event bonds;
34.6 (9) an estimate of: (i) the timing of the extraordinary event bonds issuance; and (ii) the
34.7term of the extraordinary event bonds or series of bonds, provided that the scheduled final
34.8maturity for each bond issuance does not exceed 30 years;
34.9 (10) identification of plans to sell, assign, transfer, or convey, other than as a security,
34.10interest in extraordinary event property, including identification of an assignee and
34.11demonstration that the assignee is a financing entity that is wholly owned, directly or
34.12indirectly, by the utility;
34.13 (11) identification of ancillary agreements that may be necessary or appropriate;
34.14 (12) one or more alternative financing scenarios in addition to the preferred scenario
34.15contained in the application;
34.16 (13) the extent of damage to the utility's natural gas facility caused by an extraordinary
34.17event and the estimated costs to repair or replace the damaged natural gas facility;
34.18 (14) a schedule of the proposed repairs to and replacement of the damaged natural gas
34.19facility;
34.20 (15) a description of the steps taken to provide customers interim natural gas service
34.21while the damaged natural gas facility is being repaired or replaced; and
34.22 (16) a description of the impacts on the utility's current workforce resulting from
34.23implementing a repair or replacement plan following an extraordinary event.
34.24 Subd. 2.Findings.After providing notice and holding a public hearing on an application
34.25filed under subdivision 1, the commission may issue a financing order if the commission
34.26finds that:
34.27 (1) the extraordinary event costs described in the application are reasonable;
34.28 (2) the proposed issuance of extraordinary event bonds and the imposition and collection
34.29of extraordinary event charges:
34.30 (i) are just and reasonable;
34.31 (ii) are consistent with the public interest;
34Article 4 Sec. 2.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 35.1 (iii) constitute a prudent and reasonable mechanism to finance the extraordinary event
35.2costs; and
35.3 (iv) provide tangible and quantifiable benefits to customers, either by providing lower
35.4overall costs or mitigating rate impacts relative to traditional methods of financing, that
35.5exceed the benefits achieved absent the issuance of extraordinary event bonds; and
35.6 (3) the proposed structuring, marketing, and pricing of the extraordinary event bonds:
35.7 (i) lower overall costs to customers or mitigate rate impacts to customers relative to
35.8traditional methods of financing; and
35.9 (ii) achieve customer savings or mitigate rate impacts to customers, as determined by
35.10the commission in a financing order, consistent with market conditions at the time of sale
35.11and the terms of the financing order.
35.12 Subd. 3.Contents.(a) A financing order issued under this section must:
35.13 (1) determine the maximum amount of extraordinary event costs that may be financed
35.14from proceeds of extraordinary event bonds issued pursuant to the financing order;
35.15 (2) describe the proposed customer billing mechanism for extraordinary event charges
35.16and include a finding that the mechanism is just and reasonable;
35.17 (3) describe the financing costs that may be recovered through extraordinary event
35.18charges and the period over which the costs may be recovered, which must end no earlier
35.19than the date of final legal maturity of the extraordinary event bonds;
35.20 (4) describe the extraordinary event property that is created and that may be used to pay,
35.21and secure the payment of, principal and interest on the extraordinary event bonds and other
35.22financing costs authorized in the financing order;
35.23 (5) authorize the utility to finance extraordinary event costs by issuing one or more series
35.24of extraordinary event bonds. A utility is not required to secure a separate financing order
35.25for each extraordinary event bonds issuance or for each scheduled phase to replace natural
35.26gas facilities approved in the financing order;
35.27 (6) include a formula-based mechanism that must be used to make expeditious periodic
35.28adjustments to the extraordinary event charges authorized by the financing order that are
35.29necessary to (i) correct for any overcollection or undercollection, or (ii) otherwise provide
35.30for the timely payment of extraordinary event bonds, other financing costs, and other required
35.31amounts and charges payable in connection with extraordinary event bonds;
35Article 4 Sec. 2.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 36.1 (7) specify the degree of flexibility afforded to the utility to establish the terms and
36.2conditions of the extraordinary event bonds, including but not limited to repayment schedules,
36.3expected interest rates, and other financing costs;
36.4 (8) specify that the extraordinary event bonds must be issued, subject to market conditions
36.5and the financing order's terms, as soon as feasible following the financing order's issuance;
36.6 (9) require the utility, at the same time extraordinary event charges are initially collected
36.7and independent of the schedule to close and decommission any natural gas facility replaced
36.8as the result of an extraordinary event, if any, to remove the natural gas facility from the
36.9utility's rate base and commensurately reduce the utility's base rates;
36.10 (10) specify a future ratemaking process to reconcile any difference between the projected
36.11pretax costs included in the amount financed by extraordinary event bonds and the final
36.12actual pretax costs incurred by the utility to retire or replace the natural gas facility, if any;
36.13 (11) specify information regarding extraordinary event bonds issuance and repayments,
36.14financing costs, energy transaction charges, extraordinary event property, and related matters
36.15that the natural gas utility is required to provide to the commission on a schedule determined
36.16by the commission;
36.17 (12) allow or require the creation of a utility's extraordinary event property to be
36.18conditioned on, and occur simultaneously with, the sale or other transfer of the extraordinary
36.19event property to an assignee and the pledge of the extraordinary event property to secure
36.20the extraordinary event bonds;
36.21 (13) ensure that the structuring, marketing, and pricing of extraordinary event bonds
36.22result in reasonable extraordinary event charges and customer savings or rate impact
36.23mitigation, consistent with market conditions and the financing order's terms; and
36.24 (14) specify that a utility that finances the replacement of one or more natural gas facilities
36.25after the natural gas facilities that are subject to the finance order are removed from the
36.26utility's rate base is prohibited from:
36.27 (i) operating the natural gas facilities; or
36.28 (ii) selling the natural gas facilities to another entity to operate as natural gas facilities.
36.29 (b) A financing order issued under this section may:
36.30 (1) include conditions different from those requested in the application that the
36.31commission determines are necessary to:
36.32 (i) promote the public interest; and
36Article 4 Sec. 2.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 37.1 (ii) maximize the financial benefits or minimize the financial risks of the transaction to
37.2customers and to directly impacted Minnesota workers and communities; and
37.3 (2) select one or more underwriters for the extraordinary event bonds.
37.4 Subd. 4.Duration; irrevocability; subsequent order.(a) A financing order remains
37.5effective until the extraordinary event bonds issued under the financing order and all
37.6financing costs related to the extraordinary event bonds have been paid in full.
37.7 (b) A financing order remains effective and unabated notwithstanding the bankruptcy,
37.8reorganization, or insolvency of the utility to which the financing order applies or any
37.9affiliate, successor, or assignee of the utility to which the financing order applies.
37.10 (c) Subject to judicial review under section 216B.52, a financing order is irrevocable
37.11and is not reviewable by a future commission. The commission must not: (1) reduce, impair,
37.12postpone, or terminate extraordinary event charges approved in a financing order; (2) reduce
37.13or impair the extraordinary event property approved in a financing order or impair the
37.14collection or recovery of extraordinary event charges and extraordinary event revenue; or
37.15(3) change the customers required to pay extraordinary event charges.
37.16 (d) Notwithstanding paragraph (c), the commission may, on the commission's own
37.17motion or at the request of a utility or any other person, commence a proceeding and issue
37.18a subsequent financing order that provides for refinancing, retiring, or refunding extraordinary
37.19event bonds issued under the original financing order if:
37.20 (1) the commission makes all of the findings specified in subdivision 2 with respect to
37.21the subsequent financing order; and
37.22 (2) the modification contained in the subsequent financing order does not in any way
37.23impair the covenants and terms of the extraordinary event bonds being refinanced, retired,
37.24or refunded.
37.25 Subd. 5.Effect on commission jurisdiction.(a) Except as provided in paragraph (b),
37.26the commission, in exercising the powers and carrying out the duties under this section, is
37.27prohibited from:
37.28 (1) considering extraordinary event bonds issued under this section to be debt of the
37.29utility other than for income tax purposes, unless considering the extraordinary event bonds
37.30to be debt is necessary to achieve consistency with prevailing utility debt rating
37.31methodologies;
37.32 (2) considering the extraordinary event charges paid under the financing order to be
37.33revenue of the utility;
37Article 4 Sec. 2.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 38.1 (3) considering the extraordinary event costs or financing costs specified in the financing
38.2order to be the regulated costs or assets of the utility; or
38.3 (4) determining that any prudent action taken by a utility that is consistent with the
38.4financing order is unjust or unreasonable.
38.5 (b) Nothing in this subdivision:
38.6 (1) affects the authority of the commission to apply or modify a billing mechanism
38.7designed to recover extraordinary event charges;
38.8 (2) prevents or precludes the commission from (i) investigating a utility's compliance
38.9with the financing order's terms and conditions, and (ii) requiring compliance with the
38.10financing order; or
38.11 (3) prevents or precludes the commission from imposing regulatory sanctions against a
38.12utility for failure to comply with (i) the financing order's terms and conditions, or (ii) the
38.13requirements of this section.
38.14 (c) The commission is prohibited from refusing to allow a utility to recover any costs
38.15associated with the replacement of natural gas facilities solely because the utility has elected
38.16to finance the natural gas facility replacement through a financing mechanism other than
38.17extraordinary event bonds.
38.18Sec. 3. [216B.493] POSTORDER COMMISSION DUTIES.
38.19 Subdivision 1.Financing costs review.Within 120 days after the date extraordinary
38.20event bonds are issued, a utility subject to a financing order must file with the commission
38.21the actual initial and ongoing financing costs, the final structure and pricing of the
38.22extraordinary event bonds, and the actual extraordinary event charge. The commission must
38.23review the prudence of the natural gas utility's actions to determine whether the actual
38.24financing costs were the lowest that could reasonably be achieved given the financing order's
38.25terms and market conditions prevailing at the time of the extraordinary event bond's issuance.
38.26 Subd. 2.Enforcement.If the commission determines that a utility's actions under this
38.27section are not prudent or are inconsistent with the financing order, the commission may
38.28apply remedies deemed appropriate for utility actions, provided that any remedy applied
38.29must not directly or indirectly: (1) reduce or impair the extraordinary event property approved
38.30in the financing order or impair the collection or recovery of extraordinary event charges
38.31and extraordinary event revenue; (2) reduce, impair, postpone, or terminate extraordinary
38.32event charges approved in the financing order until all principal, interest, and redemption
38.33premium, if any, payable on the extraordinary event bonds, all financing costs, and all
38Article 4 Sec. 3.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 39.1amounts to be paid to an assignee or financing party under an ancillary agreement are paid
39.2in full; or (3) change the customers required to pay extraordinary event charges.
39.3 Sec. 4. [216B.494] USE OF OUTSIDE EXPERTS.
39.4 (a) To carry out the duties under this section, the commission may:
39.5 (1) contract with outside consultants and counsel experienced in securitized utility
39.6customer-backed bond financing similar to extraordinary event bonds; and
39.7 (2) hire and compensate additional temporary staff as needed.
39.8Expenses incurred by the commission under this paragraph must be treated as financing
39.9costs paid by the extraordinary event revenue. The costs incurred under clause (1) are not
39.10an obligation of the state and are assigned solely to the transaction.
39.11 (b) A utility presented with a written request from the commission to reimburse the
39.12commission's expenses incurred under paragraph (a), accompanied by a detailed account
39.13of the subject expenses, must provide the issuer of the extraordinary event bonds and the
39.14indenture trustee for the extraordinary event bonds with such documentation. The indenture
39.15trustee must remit full payment of the expenses to the commission on the next interest
39.16payment date of the extraordinary event bonds after the payment of interest and scheduled
39.17principal of the extraordinary event bonds in accordance with the payment waterfall included
39.18in the indenture governing the extraordinary event bonds.
39.19 (c) If a utility's application for a financing order is denied or withdrawn for any reason
39.20and extraordinary event bonds are not issued, the commission's costs to retain expert
39.21consultants under this section must be paid by the applicant utility and are deemed a prudent
39.22deferred expense eligible for recovery in the utility's future rates.
39.23Sec. 5. [216B.495] EXTRAORDINAR Y EVENT CHARGE; BILLING TREATMENT.
39.24 (a) A utility that obtains a financing order and issues extraordinary event bonds must:
39.25 (1) include on each customer's monthly natural gas bill:
39.26 (i) a statement that a portion of the charges represents extraordinary event charges
39.27approved in a financing order;
39.28 (ii) the amount and rate of the extraordinary event charge as a separate line item titled
39.29"extraordinary event charge"; and
39Article 4 Sec. 5.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 40.1 (iii) if extraordinary event property has been transferred to an assignee, a statement that
40.2the assignee is the owner of the rights to extraordinary event charges and that the utility or
40.3other entity, if applicable, is acting as a collection agent or servicer for the assignee; and
40.4 (2) file annually with the commission:
40.5 (i) a calculation that identifies the impact financing the retirement or replacement of
40.6natural gas facilities has on customer rates, itemized by customer class; and
40.7 (ii) evidence demonstrating that extraordinary event revenues are applied solely to pay
40.8(A) principal and interest on extraordinary event bonds, and (B) other financing costs.
40.9 (b) Extraordinary event charges are nonbypassable and must be paid by all existing and
40.10future customers receiving service from the utility or the utility's successors or assignees
40.11under commission-approved rate schedules or special contracts.
40.12 (c) A utility's failure to comply with this section does not invalidate, impair, or affect
40.13any financing order, extraordinary event property, extraordinary event charge, or
40.14extraordinary event bonds, but does subject the utility to penalties under applicable
40.15commission rules provided that any penalty applied must not directly or indirectly: (1)
40.16reduce or impair the extraordinary event property approved in the financing order or impair
40.17the collection or recovery of extraordinary event charges and extraordinary event revenue;
40.18(2) reduce, impair, postpone, or terminate extraordinary event charges approved in the
40.19financing order until all principal, interest, and redemption premium, if any, payable on the
40.20extraordinary event bonds, all financing costs, and all amounts to be paid to an assignee or
40.21financing party under an ancillary agreement are paid in full; or (3) change the customers
40.22required to pay extraordinary event charges.
40.23Sec. 6. [216B.496] EXTRAORDINAR Y EVENT PROPERTY.
40.24 Subdivision 1.General.(a) Extraordinary event property is an existing present property
40.25right or interest in a property right, even though the imposition and collection of extraordinary
40.26event charges depend on the utility collecting extraordinary event charges and on future
40.27natural gas consumption. The property right or interest exists regardless of whether the
40.28revenues or proceeds arising from the extraordinary event property have been billed, have
40.29accrued, or have been collected.
40.30 (b) Extraordinary event property exists until all extraordinary event bonds issued under
40.31a financing order are paid in full and all financing costs and other extraordinary event bonds
40.32costs have been recovered in full.
40Article 4 Sec. 6.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 41.1 (c) All or any portion of extraordinary event property described in a financing order
41.2issued to a utility may be transferred, sold, conveyed, or assigned to a successor or assignee
41.3that is wholly owned, directly or indirectly, by the utility and created for the limited purpose
41.4of acquiring, owning, or administering extraordinary event property or issuing extraordinary
41.5event bonds authorized by the financing order. All or any portion of extraordinary event
41.6property may be pledged to secure extraordinary event bonds issued under a financing order,
41.7amounts payable to financing parties and to counterparties under any ancillary agreements,
41.8and other financing costs. Each transfer, sale, conveyance, assignment, or pledge by a utility
41.9or an affiliate of extraordinary event property is a transaction in the ordinary course of
41.10business.
41.11 (d) If a utility defaults on any required payment of charges arising from extraordinary
41.12event property described in a financing order, a court, upon petition by an interested party
41.13and without limiting any other remedies available to the petitioner, must order the
41.14sequestration and payment of the revenues arising from the extraordinary event property to
41.15the financing parties.
41.16 (e) The interest of a transferee, purchaser, acquirer, assignee, or pledgee in extraordinary
41.17event property specified in a financing order issued to a utility, and in the revenue and
41.18collections arising from the property, is not subject to setoff, counterclaim, surcharge, or
41.19defense by the utility or any other person, or in connection with the reorganization,
41.20bankruptcy, or other insolvency of the utility or any other entity.
41.21 (f) A successor to a utility, whether resulting from a reorganization, bankruptcy, or other
41.22insolvency proceeding, merger or acquisition, sale, other business combination, transfer by
41.23operation of law, utility restructuring, or otherwise: (1) must perform and satisfy all
41.24obligations of, and has the same duties and rights under, a financing order as the utility to
41.25which the financing order applies; and (2) must perform the duties and exercise the rights
41.26in the same manner and to the same extent as the utility, including (i) collecting extraordinary
41.27event bonds revenues, collections, payments, or proceeds, and (ii) paying a person entitled
41.28to receive extraordinary event bonds revenues, collections, payments, or proceeds.
41.29 Subd. 2.Security interests in extraordinary event property.(a) The creation,
41.30perfection, and enforcement of any security interest in extraordinary event property to secure
41.31the repayment of the principal and interest on extraordinary event bonds, amounts payable
41.32under any ancillary agreement, and other financing costs are governed by this section only.
41.33 (b) A security interest in extraordinary event property is created, valid, and binding
41.34when:
41Article 4 Sec. 6.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 42.1 (1) the financing order that describes the extraordinary event property is issued;
42.2 (2) a security agreement is executed and delivered; and
42.3 (3) value is received for the extraordinary event bonds.
42.4 (c) Once a security interest in extraordinary event property is created, the security interest
42.5attaches without any physical delivery of collateral or any other act. The lien of the security
42.6interest is valid, binding, and perfected against all parties having claims of any kind in tort,
42.7in contract, or otherwise against the person granting the security interest, regardless of
42.8whether the parties have notice of the lien, upon the filing of a financing statement with the
42.9secretary of state.
42.10 (d) The description or indication of extraordinary event property in a transfer or security
42.11agreement and a financing statement is sufficient only if the description or indication refers
42.12to this section and the financing order creating the extraordinary event property.
42.13 (e) A security interest in extraordinary event property is a continuously perfected security
42.14interest and has priority over any other lien, created by operation of law or otherwise, that
42.15may subsequently attach to the extraordinary event property unless the person that holds
42.16the security interest has agreed otherwise in writing.
42.17 (f) The priority of a security interest in extraordinary event property is not affected by
42.18the commingling of extraordinary event property or extraordinary event revenue with other
42.19money. An assignee, bondholder, or financing party has a perfected security interest in the
42.20amount of all extraordinary event property or extraordinary event revenue that is pledged
42.21to pay extraordinary event bonds even if the extraordinary event property or extraordinary
42.22event revenue is deposited in a cash or deposit account owned by the utility in which the
42.23extraordinary event revenue is commingled with other money. Any other security interest
42.24that applies to the other money does not apply to the extraordinary event revenue.
42.25 (g) A subsequent commission order amending a financing order under section 216B.492,
42.26subdivision 4, or the application of an adjustment mechanism authorized by a financing
42.27order under section 216B.492, subdivision 3, does not affect the validity, perfection, or
42.28priority of a security interest in or transfer of extraordinary event property.
42.29 Subd. 3.Sales of extraordinary event property.(a) A sale, assignment, or transfer of
42.30extraordinary event property is an absolute transfer and true sale of, and not a pledge of or
42.31secured transaction relating to, the seller's right, title, and interest in, to, and under the
42.32extraordinary event property if the documents governing the transaction expressly state that
42Article 4 Sec. 6.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 43.1the transaction is a sale or other absolute transfer. A transfer of an interest in extraordinary
43.2event property may be created when:
43.3 (1) the financing order creating and describing the extraordinary event property is
43.4effective;
43.5 (2) the documents evidencing the transfer of the extraordinary event property are executed
43.6and delivered to the assignee; and
43.7 (3) value is received.
43.8 (b) The characterization of a sale, assignment, or transfer as an absolute transfer and
43.9true sale, and the corresponding characterization of the property interest of the assignee, is
43.10not affected or impaired by:
43.11 (1) commingling extraordinary event revenue with other money;
43.12 (2) the seller retaining:
43.13 (i) a partial or residual interest, including an equity interest, in the extraordinary event
43.14property, whether (A) direct or indirect, or (B) subordinate or otherwise; or
43.15 (ii) the right to recover costs associated with taxes, franchise fees, or license fees imposed
43.16on the collection of extraordinary event revenue;
43.17 (3) any recourse that the extraordinary event property purchaser may have against the
43.18seller;
43.19 (4) any indemnification rights, obligations, or repurchase rights made or provided by
43.20the extraordinary event property seller;
43.21 (5) the extraordinary event property seller's obligation to collect extraordinary event
43.22revenues on behalf of an assignee;
43.23 (6) the treatment of the sale, assignment, or transfer for tax, financial reporting, or other
43.24purposes;
43.25 (7) any subsequent financing order amending a financing order under section 216B.492,
43.26subdivision 4, paragraph (d); or
43.27 (8) any application of an adjustment mechanism under section 216B.492, subdivision
43.283, paragraph (a), clause (6).
43Article 4 Sec. 6.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 44.1 Sec. 7. [216B.497] EXTRAORDINAR Y EVENT BONDS.
44.2 (a) A bank, trust company, savings and loan association, insurance company, executor,
44.3administrator, guardian, trustee, or other fiduciary may legally invest any money within the
44.4individual's or entity's control in extraordinary event bonds.
44.5 (b) Extraordinary event bonds issued under a financing order are not debt of or a pledge
44.6of the faith and credit or taxing power of the state, any agency of the state, or any political
44.7subdivision. An extraordinary event bonds holder does not possess the ability to compel
44.8taxes to be levied by the state or a political subdivision in order to pay the principal or
44.9interest on extraordinary event bonds. The issuance of extraordinary event bonds does not
44.10directly, indirectly, or contingently obligate the state or a political subdivision to levy any
44.11tax or make any appropriation to pay principal or interest on the extraordinary event bonds.
44.12 (c) The state pledges to and agrees with an extraordinary event bonds holder, assignee,
44.13and financing party that the state and state agencies, including the commission, are prohibited
44.14from:
44.15 (1) taking or permitting an action that reduces or impairs the extraordinary event property
44.16approved in the financing order or impairs the collection or recovery of extraordinary event
44.17charges or extraordinary event revenue;
44.18 (2) reducing, impairing, postponing, or terminating extraordinary event charges approved
44.19in the financing order that are imposed, collected, and remitted for the benefit of an
44.20extraordinary event bonds holder, assignee, and financing party until all principal, interest,
44.21and redemption premium, if any, payable on extraordinary event bonds, all financing costs,
44.22and all amounts to be paid to an assignee or financing party under an ancillary agreement
44.23are paid in full; or
44.24 (3) changing the customers required to pay the extraordinary event charges.
44.25 (d) The commission may include a pledge in the financing order similar to the pledge
44.26included in paragraph (c).
44.27 (e) A person who issues extraordinary event bonds may include the pledge specified in
44.28paragraphs (c) and (d) in the extraordinary event bonds, ancillary agreements, and
44.29documentation related to the issuance and marketing of the extraordinary event bonds.
44Article 4 Sec. 7.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 45.1 Sec. 8. [216B.498] ASSIGNEE OF FINANCING PARTY NOT SUBJECT TO
45.2COMMISSION REGULATION.
45.3 An assignee or financing party that is not already regulated by the commission does not
45.4become subject to commission regulation solely as a result of engaging in any transaction
45.5authorized by or described in sections 216B.491 to 216B.499.
45.6 Sec. 9. [216B.499] EFFECT ON OTHER LAWS.
45.7 (a) If a provision of sections 216B.491 to 216B.499 conflicts with other law regarding
45.8the attachment, assignment, perfection, effect of perfection, or priority of a security interest
45.9in or transfer of extraordinary event property, sections 216B.491 to 216B.499 govern.
45.10 (b) Nothing in this section precludes a utility for which the commission has initially
45.11issued a financing order from applying to the commission for:
45.12 (1) a subsequent financing order amending the financing order under section 216B.492,
45.13subdivision 4, paragraph (d); or
45.14 (2) approval to issue extraordinary event bonds to refund all or a portion of an outstanding
45.15series of extraordinary event bonds.
45.16Sec. 10. Minnesota Statutes 2024, section 216B.62, subdivision 3, is amended to read:
45.17 Subd. 3.Assessing all public utilities.The department and commission shall quarterly,
45.18at least 30 days before the start of each quarter, estimate the total of their expenditures in
45.19the performance of their duties relating to public utilities under sections 216B.01 to 216B.67,
45.20other than amounts chargeable to public utilities under subdivision 2, 6, 7, or 8, or 9. The
45.21remainder shall be assessed by the commission and department to the several public utilities
45.22in proportion to their respective gross operating revenues from retail sales of gas or electric
45.23service within the state during the last calendar year. The assessment shall be paid into the
45.24state treasury within 30 days after the bill has been transmitted via mail, personal delivery,
45.25or electronic service to the several public utilities, which shall constitute notice of the
45.26assessment and demand of payment thereof. The total amount which may be assessed to
45.27the public utilities, under authority of this subdivision, shall not exceed one-sixth of one
45.28percent of the total gross operating revenues of the public utilities during the calendar year
45.29from retail sales of gas or electric service within the state. The assessment for the third
45.30quarter of each fiscal year shall be adjusted to compensate for the amount by which actual
45.31expenditures by the commission and department for the preceding fiscal year were more or
45.32less than the estimated expenditures previously assessed.
45Article 4 Sec. 10.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 46.1 Sec. 11. Minnesota Statutes 2024, section 216B.62, is amended by adding a subdivision
46.2to read:
46.3 Subd. 9.Administrative costs for extraordinary event bonds.The commission and
46.4the department may assess gas utilities for the actual commission and department costs of
46.5administering extraordinary event bonds under sections 216B.491 to 216B.499. The money
46.6received from the assessment shall be deposited into an account in the special revenue fund
46.7and all funds deposited are appropriated to the commission or the department for the purposes
46.8of this subdivision. The commission and department may initially assess for estimated costs
46.9under sections 216B.491 to 216B.499, then must adjust subsequent assessments for actual
46.10costs incurred under sections 216B.491 to 216B.499. An assessment made under this
46.11subdivision is not subject to the cap on assessments provided in subdivision 3 or any other
46.12law.
46.13 ARTICLE 5
46.14 RENEWABLE DEVELOPMENT ACCOUNT SUNSET
46.15Section 1. Minnesota Statutes 2024, section 116C.7792, is amended to read:
46.16 116C.7792 SOLAR ENERGY PRODUCTION INCENTIVE PROGRAM.
46.17 Subdivision 1.Program operations.(a) The utility subject to section 116C.779
46.18216B.1641 shall operate a program to provide solar energy production incentives for solar
46.19energy systems of no more than a total aggregate nameplate capacity of 40 kilowatts
46.20alternating current per premise. The owner of a solar energy system installed before June
46.211, 2018, is eligible to receive a production incentive under this section for any additional
46.22solar energy systems constructed at the same customer location, provided that the aggregate
46.23capacity of all systems at the customer location does not exceed 40 kilowatts.
46.24 (b) Through 2025, the program is funded by money withheld from transfer to the
46.25renewable development account under section 116C.779, subdivision 1, paragraphs (b) and
46.26(e). Program funds must be placed that the utility deposits in a separate account for the
46.27purpose of the solar energy production incentive program operated by the utility and not
46.28for any other program or purpose.
46.29 (c) Funds allocated to the solar energy production incentive program in 2019 and 2020
46.30remain available to the solar energy production incentive program.
46.31 (d) The following amounts are allocated to the solar energy production incentive program:
46.32 (1) $10,000,000 in 2021;
46Article 5 Section 1.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 47.1 (2) $10,000,000 in 2022;
47.2 (3) $5,000,000 in 2023;
47.3 (4) $11,250,000 in 2024; and
47.4 (5) $6,250,000 in 2025; and.
47.5 (6) $5,000,000 each year, beginning in 2026 through 2035.
47.6 (e) Notwithstanding the Department of Commerce's November 14, 2018, decision in
47.7Docket No. E002/M-13-1015 regarding operation of the utility's solar energy production
47.8incentive program, half of the amounts allocated each year under paragraph (d), clauses (3),
47.9(4), and (5), must be reserved for solar energy systems whose installation meets the eligibility
47.10standards for the low-income program established in the November 14, 2018, decision or
47.11successor decisions of the department. All other program operations of the solar energy
47.12production incentive program are governed by the provisions of the November 14, 2018,
47.13decision or successor decisions of the department.
47.14 (f) Funds Money allocated to the solar energy production incentive program that have
47.15has not been committed to a specific project at the end of a program year remain remains
47.16available to the solar energy production incentive program, except that the utility's money
47.17that has not been obligated to a specific project by December 31, 2025, must be refunded
47.18to the utility's electric service customers in a manner and according to a schedule determined
47.19by the Public Utilities Commission.
47.20 (g) Any unspent amount remaining on January 1, 2028, must be transferred to the
47.21renewable development account.
47.22 (h) (g) A solar energy system receiving a production incentive under this section must
47.23be sized to less than 120 percent of the customer's on-site annual energy consumption when
47.24combined with other distributed generation resources and subscriptions provided under
47.25section 216B.1641 associated with the premise. The production incentive must be paid for
47.26ten years commencing with the commissioning of the system.
47.27 (i) (h) The utility must file a plan to operate the program with the commissioner of
47.28commerce. The utility may not operate the program until it is approved by the commissioner.
47.29A change to the program to include projects up to a nameplate capacity of 40 kilowatts or
47.30less does not require the utility to file a plan with the commissioner. Any plan approved by
47.31the commissioner of commerce must not provide an increased incentive scale over prior
47.32years unless the commissioner demonstrates that changes in the market for solar energy
47.33facilities require an increase.
47Article 5 Section 1.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 48.1 (i) The utility must operate the program through December 31, 2025. Beginning on
48.2January 1, 2026, the commissioner of commerce must operate the program under this section
48.3in conformance with the orders issued by the Public Utilities Commission in Docket No.
48.4E002/M-13-1015, as applicable.
48.5 (j) A payment must not be made under this section to an owner of a solar energy system
48.6who did not receive a payment under this section before January 1, 2027.
48.7 Subd. 2.Establishment of account.(a) The solar energy production incentive account
48.8is established in the special revenue fund in the state treasury. Money received from the
48.9general fund must be transferred to the commissioner of commerce and credited to the
48.10account. The commissioner of commerce must manage the account.
48.11 (b) Money in the account may be expended only from January 1, 2026, to December
48.1231, 2036. Any money remaining in the account on December 31, 2036, cancels to the general
48.13fund.
48.14 (c) The utility subject to this section must advise the commissioner of commerce, on a
48.15schedule determined by the commissioner of commerce, regarding:
48.16 (1) the total amount required to be withdrawn from the account to pay for solar energy
48.17production incentives; and
48.18 (2) the amount of payments to be made separately to each program participant due a
48.19payment under this section.
48.20 (d) Beginning in fiscal year 2027, an amount sufficient is annually appropriated from
48.21the general fund to the commissioner to make the payments under paragraph (c) for projects
48.22that first received payments under this section no later than December 31, 2026.
48.23 Subd. 3.Expiration.This section expires April 1, 2037.
48.24 EFFECTIVE DATE.This section is effective the day following final enactment.
48.25Sec. 2. Minnesota Statutes 2024, section 116J.55, subdivision 5, is amended to read:
48.26 Subd. 5.Grant awards; limitations.(a) A grant awarded to an eligible community
48.27under this section must not exceed $1,000,000 in any calendar year. The commissioner may
48.28accept grant applications on an ongoing or rolling basis.
48.29 (b) Grants funded with revenues from the renewable development account established
48.30in section 116C.779 must be awarded to an eligible community located within the retail
48.31electric service territory of the public utility that is subject to section 116C.779 or to an
48Article 5 Sec. 2.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 49.1eligible community in which an electric generating plant owned by that public utility is
49.2located.
49.3 EFFECTIVE DATE.This section is effective the day following final enactment.
49.4 Sec. 3. Minnesota Statutes 2024, section 216B.1645, subdivision 1, is amended to read:
49.5 Subdivision 1.Commission authority.Upon the petition of a public utility, the Public
49.6Utilities Commission shall approve or disapprove power purchase contracts, investments,
49.7or expenditures entered into or made by the utility to satisfy the wind and biomass mandates
49.8contained in sections 216B.169, 216B.2423, and 216B.2424, and to satisfy the renewable
49.9energy objectives and standards set forth in section 216B.1691, including reasonable
49.10investments and expenditures made to:
49.11 (1) transmit the electricity generated from sources developed under those sections that
49.12is ultimately used to provide service to the utility's retail customers, including studies
49.13necessary to identify new transmission facilities needed to transmit electricity to Minnesota
49.14retail customers from generating facilities constructed to satisfy the renewable energy
49.15objectives and standards, provided that the costs of the studies have not been recovered
49.16previously under existing tariffs and the utility has filed an application for a certificate of
49.17need or for certification as a priority project under section 216B.2425 for the new
49.18transmission facilities identified in the studies; or
49.19 (2) provide storage facilities for renewable energy generation facilities that contribute
49.20to the reliability, efficiency, or cost-effectiveness of the renewable facilities; or.
49.21 (3) develop renewable energy sources from the account required in section 116C.779.
49.22 EFFECTIVE DATE.This section is effective the day following final enactment.
49.23Sec. 4. Minnesota Statutes 2024, section 216C.377, subdivision 3, is amended to read:
49.24 Subd. 3.Establishment of account.A solar on public buildings grant program account
49.25is established in the special revenue fund. Money received from the general fund and the
49.26renewable development account established in section 116C.779, subdivision 1, must be
49.27transferred to the commissioner of commerce and credited to the account. Earnings, including
49.28interest, dividends, and any other earnings arising from the assets of the account, must be
49.29credited to the account. Earnings remaining in the account at the end of a fiscal year do not
49.30cancel to the general fund or renewable development account but remain in the account
49.31until expended. The commissioner must manage the account.
49.32 EFFECTIVE DATE.This section is effective the day following final enactment.
49Article 5 Sec. 4.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 50.1 Sec. 5. Minnesota Statutes 2024, section 216C.417, is amended by adding a subdivision
50.2to read:
50.3 Subd. 1a.Account established; account management; appropriation.A "Made in
50.4Minnesota" solar energy production incentive account is established as a separate account
50.5in the special revenue fund in the state treasury. Earnings, including interest, dividends, and
50.6any other earnings arising from account assets, must be credited to the account. Money
50.7remaining in the account at the end of a fiscal year cancels to the general fund. The
50.8commissioner of commerce must manage the account.
50.9 EFFECTIVE DATE.This section is effective the day following final enactment.
50.10Sec. 6. Minnesota Statutes 2024, section 216C.417, subdivision 2, is amended to read:
50.11 Subd. 2.Appropriation.(a) Unspent money remaining in the account established under
50.12Minnesota Statutes 2016, section 216C.412, on July 1, 2017, must be transferred to the
50.13renewable development account in the special revenue fund established under section
50.14116C.779, subdivision 1.
50.15 (b) (a) There is annually appropriated from the renewable development account in the
50.16special revenue fund established in section 116C.779 general fund to the commissioner of
50.17commerce money sufficient to make the incentive payments required under Minnesota
50.18Statutes 2016, section 216C.415. Any funds money appropriated under this paragraph that
50.19are is unexpended at the end of a fiscal year cancel cancels to the renewable development
50.20account general fund.
50.21 (c) (b) Notwithstanding Minnesota Statutes 2016, section 216C.412, subdivision 1, none
50.22of this appropriation may be used for administrative costs.
50.23 EFFECTIVE DATE.This section is effective the day following final enactment.
50.24Sec. 7. DISPOSITION OF REMAINING FUNDS.
50.25 Any money remaining in the renewable development account established under Minnesota
50.26Statutes, section 116C.779, as of the effective date of this act must be remitted to the utility
50.27subject to Minnesota Statutes, section 216B.1641, subdivision 1, to refund the utility's
50.28electric service customers in a manner and according to a schedule determined by the Public
50.29Utilities Commission.
50Article 5 Sec. 7.
S2393-1 1st EngrossmentSF2393 REVISOR RSI 51.1 Sec. 8. REVISOR INSTRUCTION.
51.2 In each section of Minnesota Statutes referred to in column A, the revisor of statutes
51.3must delete the reference in column B and insert the reference in column C. The references
51.4in column C may be changed by the revisor of statutes to the section in Minnesota Statutes
51.5in which the bill sections are compiled.
Column CColumn B51.6Column A
216B.1641, subdivision 1116C.77951.716B.87
116C.778116C.77951.8116C.776
51.9 216B.1691, paragraph (a),
clause (1)116C.77951.10216B.1641
216B.1641, subdivision 1116C.77951.11216C.375
216B.1641, subdivision 1116C.77951.12216C.378
216B.1641, subdivision 1116C.77951.13216C.379
51.14 EFFECTIVE DATE.This section is effective the day following final enactment.
51.15Sec. 9. REPEALER.
51.16 Minnesota Statutes 2024, sections 116C.779, subdivisions 1 and 2; 116C.7791; and
51.17216C.41, are repealed.
51.18 EFFECTIVE DATE.This section is effective the day following final enactment.
51Article 5 Sec. 9.
S2393-1 1st EngrossmentSF2393 REVISOR RSI Page.Ln 1.19CLIMATE AND ENERGY FINANCE..................................................ARTICLE 1
Page.Ln 4.21RENEWABLE DEVELOPMENT ACCOUNT APPROPRIATIONS....ARTICLE 2
Page.Ln 9.14ENERGY POLICY.................................................................................ARTICLE 3
Page.Ln 28.16SECURITIZATION................................................................................ARTICLE 4
Page.Ln 46.13RENEWABLE DEVELOPMENT ACCOUNT SUNSET.....................ARTICLE 5
1
APPENDIX
Article locations for S2393-1 116C.779 FUNDING FOR RENEWABLE DEVELOPMENT .
Subdivision 1.Renewable development account.(a) The renewable development account is
established as a separate account in the special revenue fund in the state treasury. Appropriations
and transfers to the account shall be credited to the account. Earnings, such as interest, dividends,
and any other earnings arising from assets of the account, shall be credited to the account. Funds
remaining in the account at the end of a fiscal year are not canceled to the general fund but remain
in the account until expended. The account shall be administered by the commissioner of management
and budget as provided under this section.
(b) On July 1, 2017, the public utility that owns the Prairie Island nuclear generating plant must
transfer all funds in the renewable development account previously established under this subdivision
and managed by the public utility to the renewable development account established in paragraph
(a). Funds awarded to grantees in previous grant cycles that have not yet been expended and
unencumbered funds required to be paid in calendar year 2017 under paragraphs (f) and (g), and
sections 116C.7792 and 216C.41, are not subject to transfer under this paragraph.
(c) Except as provided in subdivision 1a, beginning January 15, 2018, and continuing each
January 15 thereafter, the public utility that owns the Prairie Island nuclear generating plant must
transfer to the renewable development account $500,000 each year for each dry cask containing
spent fuel that is located at the Prairie Island power plant for each year the plant is in operation,
and $7,500,000 each year the plant is not in operation if ordered by the commission pursuant to
paragraph (i). The fund transfer must be made if nuclear waste is stored in a dry cask at the
independent spent-fuel storage facility at Prairie Island for any part of a year. The total amount
transferred annually under this paragraph must be reduced by $3,750,000.
(d) Except as provided in subdivision 1a, beginning January 15, 2018, and continuing each
January 15 thereafter, the public utility that owns the Monticello nuclear generating plant must
transfer to the renewable development account $350,000 each year for each dry cask containing
spent fuel that is located at the Monticello nuclear power plant for each year the plant is in operation,
and $5,250,000 each year the plant is not in operation if ordered by the commission pursuant to
paragraph (i). The fund transfer must be made if nuclear waste is stored in a dry cask at the
independent spent-fuel storage facility at Monticello for any part of a year.
(e) Each year, the public utility shall withhold from the funds transferred to the renewable
development account under paragraphs (c) and (d) the amount necessary to pay its obligations under
paragraphs (f) and (g), and sections 116C.7792 and 216C.41, for that calendar year.
(f) If the commission approves a new or amended power purchase agreement, the termination
of a power purchase agreement, or the purchase and closure of a facility under section 216B.2424,
subdivision 9, with an entity that uses poultry litter to generate electricity, the public utility subject
to this section shall enter into a contract with the city in which the poultry litter plant is located to
provide grants to the city for the purposes of economic development on the following schedule:
$4,000,000 in fiscal year 2018; $6,500,000 each fiscal year in 2019 and 2020; and $3,000,000 in
fiscal year 2021. The grants shall be paid by the public utility from funds withheld from the transfer
to the renewable development account, as provided in paragraphs (b) and (e).
(g) If the commission approves a new or amended power purchase agreement, or the termination
of a power purchase agreement under section 216B.2424, subdivision 9, with an entity owned or
controlled, directly or indirectly, by two municipal utilities located north of Constitutional Route
No. 8, that was previously used to meet the biomass mandate in section 216B.2424, the public
utility that owns a nuclear generating plant shall enter into a grant contract with such entity to
provide $6,800,000 per year for five years, commencing 30 days after the commission approves
the new or amended power purchase agreement, or the termination of the power purchase agreement,
and on each June 1 thereafter through 2021, to assist the transition required by the new, amended,
or terminated power purchase agreement. The grant shall be paid by the public utility from funds
withheld from the transfer to the renewable development account as provided in paragraphs (b) and
(e).
(h) The collective amount paid under the grant contracts awarded under paragraphs (f) and (g)
is limited to the amount deposited into the renewable development account, and its predecessor,
the renewable development account, established under this section, that was not required to be
deposited into the account under Laws 1994, chapter 641, article 1, section 10.
(i) After discontinuation of operation of the Prairie Island nuclear plant or the Monticello nuclear
plant and each year spent nuclear fuel is stored in dry cask at the discontinued facility, the
commission shall require the public utility to pay $7,500,000 for the discontinued Prairie Island
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Repealed Minnesota Statutes: S2393-1 facility and $5,250,000 for the discontinued Monticello facility for any year in which the commission
finds, by the preponderance of the evidence, that the public utility did not make a good faith effort
to remove the spent nuclear fuel stored at the facility to a permanent or interim storage site out of
the state. This determination shall be made at least every two years.
(j) Funds in the account may be expended only for any of the following purposes:
(1) to stimulate research and development of renewable electric energy technologies;
(2) to encourage grid modernization, including, but not limited to, projects that implement
electricity storage, load control, and smart meter technology; and
(3) to stimulate other innovative energy projects that reduce demand and increase system
efficiency and flexibility.
Expenditures from the fund must benefit Minnesota ratepayers receiving electric service from the
utility that owns a nuclear-powered electric generating plant in this state or the Prairie Island Indian
community or its members.
The utility that owns a nuclear generating plant is eligible to apply for grants under this subdivision.
(k) For the purposes of paragraph (j), the following terms have the meanings given:
(1) "renewable" has the meaning given in section 216B.2422, subdivision 1, paragraph (c),
clauses (1), (2), (4), and (5); and
(2) "grid modernization" means:
(i) enhancing the reliability of the electrical grid;
(ii) improving the security of the electrical grid against cyberthreats and physical threats; and
(iii) increasing energy conservation opportunities by facilitating communication between the
utility and its customers through the use of two-way meters, control technologies, energy storage
and microgrids, technologies to enable demand response, and other innovative technologies.
(l) A renewable development account advisory group that includes, among others, representatives
of the public utility and its ratepayers, and includes at least one representative of the Prairie Island
Indian community appointed by that community's tribal council, shall develop recommendations
on account expenditures. The advisory group must design a request for proposal and evaluate
projects submitted in response to a request for proposals. The advisory group must utilize an
independent third-party expert to evaluate proposals submitted in response to a request for proposal,
including all proposals made by the public utility. A request for proposal for research and
development under paragraph (j), clause (1), may be limited to or include a request to higher
education institutions located in Minnesota for multiple projects authorized under paragraph (j),
clause (1). The request for multiple projects may include a provision that exempts the projects from
the third-party expert review and instead provides for project evaluation and selection by a merit
peer review grant system. In the process of determining request for proposal scope and subject and
in evaluating responses to request for proposals, the advisory group must strongly consider, where
reasonable:
(1) potential benefit to Minnesota citizens and businesses and the utility's ratepayers; and
(2) the proposer's commitment to increasing the diversity of the proposer's workforce and
vendors.
(m) The advisory group shall submit funding recommendations to the public utility, which has
full and sole authority to determine which expenditures shall be submitted by the advisory group
to the legislature. The commission may approve proposed expenditures, may disapprove proposed
expenditures that it finds not to be in compliance with this subdivision or otherwise not in the public
interest, and may, if agreed to by the public utility, modify proposed expenditures. The commission
shall, by order, submit its funding recommendations to the legislature as provided under paragraph
(n).
(n) The commission shall present its recommended appropriations from the account to the senate
and house of representatives committees with jurisdiction over energy policy and finance annually
by February 15. Expenditures from the account must be appropriated by law. In enacting
appropriations from the account, the legislature:
(1) may approve or disapprove, but may not modify, the amount of an appropriation for a project
recommended by the commission; and
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Repealed Minnesota Statutes: S2393-1 (2) may not appropriate money for a project the commission has not recommended funding.
(o) A request for proposal for renewable energy generation projects must, when feasible and
reasonable, give preference to projects that are most cost-effective for a particular energy source.
(p) The advisory group must annually, by February 15, report to the chairs and ranking minority
members of the legislative committees with jurisdiction over energy policy on projects funded by
the account for the prior year and all previous years. The report must, to the extent possible and
reasonable, itemize the actual and projected financial benefit to the public utility's ratepayers of
each project.
(q) A project receiving funds from the account must produce a written final report that includes
sufficient detail for technical readers and a clearly written summary for nontechnical readers. The
report must include an evaluation of the project's financial, environmental, and other benefits to
the state and the public utility's ratepayers. A project receiving funds from the account must submit
a report that meets the requirements of section 216C.51, subdivisions 3 and 4, each year the project
funded by the account is in progress.
(r) Final reports, any mid-project status reports, and renewable development account financial
reports must be posted online on a public website designated by the commissioner of commerce.
(s) All final reports must acknowledge that the project was made possible in whole or part by
the Minnesota renewable development account, noting that the account is financed by the public
utility's ratepayers.
(t) Of the amount in the renewable development account, priority must be given to making the
payments required under section 216C.417.
(u) Construction projects receiving funds from this account are subject to the requirement to
pay the prevailing wage rate, as defined in section 177.42 and the requirements and enforcement
provisions in sections 177.27, 177.30, 177.32, 177.41 to 177.435, and 177.45.
Subd. 2.Renewable energy production incentive.(a) Until January 1, 2021, $10,900,000
annually must be allocated from available funds in the account to fund renewable energy production
incentives. $9,400,000 of this annual amount is for incentives for electricity generated by wind
energy conversion systems that are eligible for the incentives under section 216C.41 or Laws 2005,
chapter 40.
(b) The balance of this amount, up to $1,500,000 annually, may be used for production incentives
for on-farm biogas recovery facilities and hydroelectric facilities that are eligible for the incentive
under section 216C.41 or for production incentives for other renewables, to be provided in the same
manner as under section 216C.41.
(c) Any portion of the $10,900,000 not expended in any calendar year for the incentive is
available for other spending purposes under subdivision 1. This subdivision does not create an
obligation to contribute funds to the account.
(d) The Department of Commerce shall determine eligibility of projects under section 216C.41
for the purposes of this subdivision. At least quarterly, the Department of Commerce shall notify
the public utility of the name and address of each eligible project owner and the amount due to each
project under section 216C.41. The public utility shall make payments within 15 working days after
receipt of notification of payments due.
116C.7791 REBATES FOR SOLAR PHOTOVOLTAIC MODULES.
Subdivision 1.Definitions.For the purpose of this section, the following terms have the meanings
given.
(a) "Installation" means an array of solar photovoltaic modules attached to a building that will
use the electricity generated by the solar photovoltaic modules or placed on a facility or property
proximate to that building.
(b) "Manufactured" means:
(1) the material production of solar photovoltaic modules, including the tabbing, stringing, and
lamination processes; or
(2) the production of interconnections of low-voltage photoactive elements that produce the
final useful photovoltaic output by a manufacturer operating in this state on May 18, 2010.
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Repealed Minnesota Statutes: S2393-1 (c) "Qualified owner" means an owner of a qualified property, but does not include an entity
engaged in the business of generating or selling electricity at retail, or an unregulated subsidiary of
such an entity.
(d) "Qualified property" means a residence, multifamily residence, business, or publicly owned
building located in the assigned service area of the utility subject to section 116C.779.
(e) "Solar photovoltaic module" means the smallest, nondivisible, self-contained physical
structure housing interconnected photovoltaic cells and providing a single direct current of electrical
output.
Subd. 2.Establishment.The utility subject to section 116C.779 shall establish a program to
provide rebates to an owner of a qualified property for installing solar photovoltaic modules
manufactured in Minnesota after December 31, 2009. Any solar photovoltaic modules installed
under this program and any expenses incurred by the utility operating the program shall be treated
the same as solar installations and related expenses under section 216B.241.
Subd. 3.Rebate eligibility.(a) To be eligible for a rebate under this section, a solar photovoltaic
module:
(1) must be manufactured in Minnesota;
(2) must be installed on a qualified property as part of a system whose generating capacity does
not exceed 40 kilowatts;
(3) must be certified by Underwriters Laboratory, must have received the ETL listed mark from
Intertek, or must have an equivalent certification from an independent testing agency;
(4) may or may not be connected to a utility grid;
(5) must be installed, or reviewed and approved, by a person certified as a solar photovoltaic
installer by the North American Board of Certified Energy Practitioners; and
(6) may not be used to sell, transmit, or distribute the electrical energy at retail, nor to provide
end-use electricity to an offsite facility of the electrical energy generator. On-site generation is
allowed to the extent provided for in section 216B.1611.
(b) To be eligible for a rebate under this section, an applicant must have applied for and been
awarded a rebate or other form of financial assistance available exclusively to owners of properties
on which solar photovoltaic modules are installed that is offered by:
(1) the utility serving the property on which the solar photovoltaic modules are to be installed;
or
(2) this state, under an authority other than this section.
(c) An applicant who is otherwise ineligible for a rebate under paragraph (b) is eligible if the
applicant's failure to secure a rebate or other form of financial assistance is due solely to a lack of
available funds on the part of a utility or this state.
Subd. 4.Rebate amount and payment.(a) The amount of a rebate under this section is the
difference between the sum of all rebates described in subdivision 3, paragraph (b), awarded to the
applicant and $5 per watt of installed generating capacity.
(b) Notwithstanding paragraph (a), the amount of all rebates or other forms of financial assistance
awarded to an applicant by a utility and the state, including any rebate paid under this section, net
of applicable federal income taxes applied at the highest applicable income tax rates, must not
exceed 60 percent of the total installed cost of the solar photovoltaic modules.
(c) Rebates must be awarded to eligible applicants beginning July 1, 2010.
(d) The rebate must be paid out proportionately in five consecutive annual installments.
Subd. 5.Rebate program funding.(a) The following amounts must be allocated from the
renewable development account established in section 116C.779 to a separate account for the
purpose of providing the rebates for solar photovoltaic modules specified in this section:
(1) $2,000,000 in fiscal year 2011;
(2) $4,000,000 in fiscal year 2012;
(3) $5,000,000 in fiscal year 2013;
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Repealed Minnesota Statutes: S2393-1 (4) $5,000,000 in fiscal year 2014; and
(5) $5,000,000 in fiscal year 2015.
(b) If, by the end of fiscal year 2015, insufficient qualified owners have applied for and met the
requirements for rebates under this section to exhaust the funds available, any remaining balance
shall be returned to the account established under section 116C.779.
216C.41 RENEWABLE ENERGY PRODUCTION INCENTIVE.
Subdivision 1.Definitions.(a) The definitions in this subdivision apply to this section.
(b) "Qualified hydroelectric facility" means a hydroelectric generating facility in this state that:
(1) is located at the site of a dam, if the dam was in existence as of March 31, 1994; and
(2) begins generating electricity after July 1, 1994, or generates electricity after substantial
refurbishing of a facility that begins after July 1, 2001.
(c) "Qualified wind energy conversion facility" means a wind energy conversion system in this
state that:
(1) produces two megawatts or less of electricity as measured by nameplate rating and begins
generating electricity after December 31, 1996, and before July 1, 1999;
(2) begins generating electricity after June 30, 1999, produces two megawatts or less of electricity
as measured by nameplate rating, and is:
(i) owned by a resident of Minnesota or an entity that is organized under the laws of this state,
is not prohibited from owning agricultural land under section 500.24, and owns the land where the
facility is sited;
(ii) owned by a Minnesota small business as defined in section 645.445;
(iii) owned by a Minnesota nonprofit organization;
(iv) owned by a tribal council if the facility is located within the boundaries of the reservation;
(v) owned by a Minnesota municipal utility or a Minnesota cooperative electric association; or
(vi) owned by a Minnesota political subdivision or local government, including, but not limited
to, a county, statutory or home rule charter city, town, school district, or any other local or regional
governmental organization such as a board, commission, or association; or
(3) begins generating electricity after June 30, 1999, produces seven megawatts or less of
electricity as measured by nameplate rating, and:
(i) is owned by a cooperative organized under chapter 308A other than a Minnesota cooperative
electric association; and
(ii) all shares and membership in the cooperative are held by an entity that is not prohibited
from owning agricultural land under section 500.24.
(d) "Qualified on-farm biogas recovery facility" means an anaerobic digester system that:
(1) is located at the site of an agricultural operation; and
(2) is owned by an entity that is not prohibited from owning agricultural land under section
500.24 and that owns or rents the land where the facility is located.
(e) "Anaerobic digester system" means a system of components that processes animal waste
based on the absence of oxygen and produces gas used to generate electricity.
Subd. 2.Incentive payment; appropriation.(a) Incentive payments must be made according
to this section to (1) a qualified on-farm biogas recovery facility, (2) the owner or operator of a
qualified hydropower facility or qualified wind energy conversion facility for electric energy
generated and sold by the facility, (3) a publicly owned hydropower facility for electric energy that
is generated by the facility and used by the owner of the facility outside the facility, or (4) the owner
of a publicly owned dam that is in need of substantial repair, for electric energy that is generated
by a hydropower facility at the dam and the annual incentive payments will be used to fund the
structural repairs and replacement of structural components of the dam, or to retire debt incurred
to fund those repairs.
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Repealed Minnesota Statutes: S2393-1 (b) Payment may only be made upon receipt by the commissioner of commerce of an incentive
payment application that establishes that the applicant is eligible to receive an incentive payment
and that satisfies other requirements the commissioner deems necessary. The application must be
in a form and submitted at a time the commissioner establishes.
(c) There is annually appropriated from the renewable development account under section
116C.779 to the commissioner of commerce sums sufficient to make the payments required under
this section, in addition to the amounts funded by the renewable development account as specified
in subdivision 5a.
Subd. 3.Eligibility window.Payments may be made under this section only for:
(a) electricity generated from:
(1) a qualified hydroelectric facility that is operational and generating electricity before December
31, 2011;
(2) a qualified wind energy conversion facility that is operational and generating electricity
before January 1, 2008; or
(3) a qualified on-farm biogas recovery facility from July 1, 2001, through December 31, 2017;
and
(b) gas generated from a qualified on-farm biogas recovery facility from July 1, 2007, through
December 31, 2017.
Subd. 4.Payment period.(a) A facility may receive payments under this section for a ten-year
period. No payment under this section may be made for electricity generated:
(1) by a qualified hydroelectric facility after December 31, 2021;
(2) by a qualified wind energy conversion facility after December 31, 2018; or
(3) by a qualified on-farm biogas recovery facility after December 31, 2017.
(b) The payment period begins and runs consecutively from the date the facility begins generating
electricity or, in the case of refurbishment of a hydropower facility, after substantial repairs to the
hydropower facility dam funded by the incentive payments are initiated.
Subd. 5.Amount of payment; wind facilities limit.(a) An incentive payment is based on the
number of kilowatt-hours of electricity generated. The amount of the payment is:
(1) for a facility described under subdivision 2, paragraph (a), clause (4), 1.0 cent per
kilowatt-hour; and
(2) for all other facilities, 1.5 cents per kilowatt-hour.
For electricity generated by qualified wind energy conversion facilities, the incentive payment
under this section is limited to no more than 200 megawatts of nameplate capacity.
(b) For wind energy conversion systems installed and contracted for after January 1, 2002, the
total size of a wind energy conversion system under this section must be determined according to
this paragraph. Unless the systems are interconnected with different distribution systems, the
nameplate capacity of one wind energy conversion system must be combined with the nameplate
capacity of any other wind energy conversion system that is:
(1) located within five miles of the wind energy conversion system;
(2) constructed within the same calendar year as the wind energy conversion system; and
(3) under common ownership.
In the case of a dispute, the commissioner of commerce shall determine the total size of the
system, and shall draw all reasonable inferences in favor of combining the systems.
(c) In making a determination under paragraph (b), the commissioner of commerce may determine
that two wind energy conversion systems are under common ownership when the underlying
ownership structure contains similar persons or entities, even if the ownership shares differ between
the two systems. Wind energy conversion systems are not under common ownership solely because
the same person or entity provided equity financing for the systems.
Subd. 5a.Renewable development account.The Department of Commerce shall authorize
payment of the renewable energy production incentive to wind energy conversion systems that are
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APPENDIX
Repealed Minnesota Statutes: S2393-1 eligible under this section or Laws 2005, chapter 40, to on-farm biogas recovery facilities, and to
hydroelectric facilities. Payment of the incentive shall be made from the renewable energy
development account as provided under section 116C.779, subdivision 2.
Subd. 6.Ownership; financing; cure.(a) For the purposes of subdivision 1, paragraph (c),
clause (2), a wind energy conversion facility qualifies if it is owned at least 51 percent by one or
more of any combination of the entities listed in that clause.
(b) A subsequent owner of a qualified facility may continue to receive the incentive payment
for the duration of the original payment period if the subsequent owner qualifies for the incentive
under subdivision 1.
(c) Nothing in this section may be construed to deny incentive payment to an otherwise qualified
facility that has obtained debt or equity financing for construction or operation as long as the
ownership requirements of subdivision 1 and this subdivision are met. If, during the incentive
payment period for a qualified facility, the owner of the facility is in default of a lending agreement
and the lender takes possession of and operates the facility and makes reasonable efforts to transfer
ownership of the facility to an entity other than the lender, the lender may continue to receive the
incentive payment for electricity generated and sold by the facility for a period not to exceed 18
months. A lender who takes possession of a facility shall notify the commissioner immediately on
taking possession and, at least quarterly, document efforts to transfer ownership of the facility.
(d) If, during the incentive payment period, a qualified facility loses the right to receive the
incentive because of changes in ownership, the facility may regain the right to receive the incentive
upon cure of the ownership structure that resulted in the loss of eligibility and may reapply for the
incentive, but in no case may the payment period be extended beyond the original ten-year limit.
(e) A subsequent or requalifying owner under paragraph (b) or (d) retains the facility's original
priority order for incentive payments as long as the ownership structure requalifies within two years
from the date the facility became unqualified or two years from the date a lender takes possession.
Subd. 7.Eligibility process.(a) A qualifying project is eligible for the incentive on the date
the commissioner receives:
(1) an application for payment of the incentive;
(2) one of the following:
(i) a copy of a signed power purchase agreement;
(ii) a copy of a binding agreement other than a power purchase agreement to sell electricity
generated by the project to a third person; or
(iii) if the project developer or owner will sell electricity to its own members or customers, a
copy of the purchase order for equipment to construct the project with a delivery date and a copy
of a signed receipt for a nonrefundable deposit; and
(3) any other information the commissioner deems necessary to determine whether the proposed
project qualifies for the incentive under this section.
(b) The commissioner shall determine whether a project qualifies for the incentive and respond
in writing to the applicant approving or denying the application within 15 working days of receipt
of the information required in paragraph (a). A project that is not operational within 18 months of
receipt of a letter of approval is no longer approved for the incentive. The commissioner shall notify
an applicant of potential loss of approval not less than 60 days prior to the end of the 18-month
period. Eligibility for a project that loses approval may be reestablished as of the date the
commissioner receives a new completed application.
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APPENDIX
Repealed Minnesota Statutes: S2393-1