| 1 | 1 | | 1.1 A bill for an act |
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| 2 | 2 | | 1.2 relating to energy; requiring additional information in a public utility's resource |
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| 3 | 3 | | 1.3 plan; directing public utilities to file a virtual power plant tariff and program with |
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| 4 | 4 | | 1.4 the Minnesota Public Utilities Commission; providing for cost recovery; requiring |
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| 5 | 5 | | 1.5 reports; amending Minnesota Statutes 2024, section 216B.2422, subdivision 2; |
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| 6 | 6 | | 1.6 proposing coding for new law in Minnesota Statutes, chapter 216B. |
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| 7 | 7 | | 1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: |
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| 8 | 8 | | 1.8 Section 1. Minnesota Statutes 2024, section 216B.2422, subdivision 2, is amended to read: |
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| 9 | 9 | | 1.9 Subd. 2.Resource plan filing and approval.(a) A utility shall file a resource plan with |
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| 10 | 10 | | 1.10the commission periodically in accordance with rules adopted by the commission. The |
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| 11 | 11 | | 1.11commission shall approve, reject, or modify the plan of a public utility, as defined in section |
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| 12 | 12 | | 1.12216B.02, subdivision 4, consistent with the public interest. |
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| 13 | 13 | | 1.13 (b) In the resource plan proceedings of all other utilities, the commission's order shall |
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| 14 | 14 | | 1.14be advisory and the order's findings and conclusions shall constitute prima facie evidence |
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| 15 | 15 | | 1.15which may be rebutted by substantial evidence in all other proceedings. With respect to |
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| 16 | 16 | | 1.16utilities other than those defined in section 216B.02, subdivision 4, the commission shall |
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| 17 | 17 | | 1.17consider the filing requirements and decisions in any comparable proceedings in another |
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| 18 | 18 | | 1.18jurisdiction. |
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| 19 | 19 | | 1.19 (c) As a part of its resource plan filing, a utility shall include the least cost plan for |
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| 20 | 20 | | 1.20meeting 50 and 75 percent of all energy needs from both new and refurbished generating |
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| 21 | 21 | | 1.21facilities through a combination of conservation and renewable energy resources. |
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| 22 | 22 | | 1.22 (d) A public utility must include in an integrated resource plan filing an estimate of (1) |
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| 23 | 23 | | 1.23the reduction in the public utility's winter and summer system peak attributable to |
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| 24 | 24 | | 1Section 1. |
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| 25 | 25 | | 25-04891 as introduced03/26/25 REVISOR RSI/CH |
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| 26 | 26 | | SENATE |
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| 27 | 27 | | STATE OF MINNESOTA |
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| 28 | 28 | | S.F. No. 3209NINETY-FOURTH SESSION |
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| 29 | 29 | | (SENATE AUTHORS: MCEWEN) |
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| 30 | 30 | | OFFICIAL STATUSD-PGDATE |
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| 31 | 31 | | Introduction and first reading04/01/2025 |
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| 32 | 32 | | Referred to Energy, Utilities, Environment, and Climate 2.1implementing a virtual power plant program approved under section 216B.2429, and (2) |
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| 33 | 33 | | 2.2the cost of the virtual power plant program. |
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| 34 | 34 | | 2.3 EFFECTIVE DATE.This section is effective the day following final enactment. |
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| 35 | 35 | | 2.4 Sec. 2. [216B.2429] VIRTUAL POWER PLANT TARIFF AND PROGRAM. |
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| 36 | 36 | | 2.5 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have |
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| 37 | 37 | | 2.6the meanings given. |
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| 38 | 38 | | 2.7 (b) "Aggregator" means an entity that enters into a power purchase agreement to provide |
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| 39 | 39 | | 2.8to a public utility electricity that is aggregated from eligible technology devices owned by |
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| 40 | 40 | | 2.9utility customers enrolled in a virtual power plant program. |
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| 41 | 41 | | 2.10 (c) "Demand response measure" has the meaning given to "load management" in section |
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| 42 | 42 | | 2.11216B.2402. |
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| 43 | 43 | | 2.12 (d) "Device" means a piece of equipment that is an eligible technology owned by a |
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| 44 | 44 | | 2.13participant. |
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| 45 | 45 | | 2.14 (e) "Distributed energy resource" means an eligible technology device that generates |
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| 46 | 46 | | 2.15electricity and whose capacity does not exceed ten megawatts. |
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| 47 | 47 | | 2.16 (f) "Eligible technology" means technology that is capable of being activated or |
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| 48 | 48 | | 2.17dispatched under a virtual power plant program in order to address a grid event. Eligible |
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| 49 | 49 | | 2.18technology includes but is not limited to: |
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| 50 | 50 | | 2.19 (1) solar photovoltaic devices; |
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| 51 | 51 | | 2.20 (2) energy storage systems; |
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| 52 | 52 | | 2.21 (3) electric vehicles; |
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| 53 | 53 | | 2.22 (4) smart thermostats; |
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| 54 | 54 | | 2.23 (5) heat pumps; and |
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| 55 | 55 | | 2.24 (6) demand response measures. |
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| 56 | 56 | | 2.25 (g) "Energy storage system" has the meaning given in section 216B.2422, subdivision |
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| 57 | 57 | | 2.261. |
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| 58 | 58 | | 2.27 (h) "Greenhouse gas" means atmospheric emissions of carbon dioxide, methane, nitrous |
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| 59 | 59 | | 2.28oxide, hydrofluorocarbons, perfluorocarbons, or sulfur hexafluoride. |
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| 60 | 60 | | 2.29 (i) "Grid event" means a shortage of electricity supply that may be addressed by the |
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| 61 | 61 | | 2.30dispatch or activation of devices enrolled in a virtual power plant program. |
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| 62 | 62 | | 2Sec. 2. |
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| 63 | 63 | | 25-04891 as introduced03/26/25 REVISOR RSI/CH 3.1 (j) "Grid system" means a public utility's interconnected network of electricity generators |
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| 64 | 64 | | 3.2and transmission and distribution lines that deliver electricity to ultimate consumers. |
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| 65 | 65 | | 3.3 (k) "Participant" means an owner of an eligible technology device enrolled in a virtual |
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| 66 | 66 | | 3.4power plant program. |
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| 67 | 67 | | 3.5 (l) "Peaker plant" means a power plant that operates to supplement electricity supply |
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| 68 | 68 | | 3.6for short periods only during a system peak. |
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| 69 | 69 | | 3.7 (m) "Performance-based compensation" means a system of payments made to participants |
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| 70 | 70 | | 3.8and aggregators based on the value of the electricity dispatched or saved through activating |
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| 71 | 71 | | 3.9demand response measures during a grid event. |
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| 72 | 72 | | 3.10 (n) "Smart thermostat" means a thermostat that can be controlled remotely via the Internet. |
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| 73 | 73 | | 3.11 (o) "Solar photovoltaic device" has the meaning given in section 216C.06, subdivision |
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| 74 | 74 | | 3.1216. |
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| 75 | 75 | | 3.13 (p) "System peak" means the period of time during which electricity demand on a grid |
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| 76 | 76 | | 3.14system is highest. |
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| 77 | 77 | | 3.15 (q) "Virtual power plant program" means a program that aggregates electricity from |
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| 78 | 78 | | 3.16distributed energy resources and activates demand response measures to address grid events. |
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| 79 | 79 | | 3.17 Subd. 2.Required filing; objectives; review.No later than ......., 2026, each public |
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| 80 | 80 | | 3.18utility must file with the commission a virtual power plant tariff and program that are |
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| 81 | 81 | | 3.19consistent with the requirements of this section and designed to achieve the following goals: |
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| 82 | 82 | | 3.20 (1) reduce demand for grid-supplied electricity during system peaks; |
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| 83 | 83 | | 3.21 (2) make renewable energy generated during off-peak periods available for use during |
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| 84 | 84 | | 3.22system peaks; |
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| 85 | 85 | | 3.23 (3) lower ratepayer bills by reducing utility market purchases at elevated prices during |
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| 86 | 86 | | 3.24system peaks; |
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| 87 | 87 | | 3.25 (4) reduce emissions of greenhouse gases and other air pollutants; |
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| 88 | 88 | | 3.26 (5) optimize the use of existing generation and energy storage assets; |
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| 89 | 89 | | 3.27 (6) improve the resiliency and reliability of the grid system; |
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| 90 | 90 | | 3.28 (7) avoid or defer the construction of electric generation, distribution, or transmission |
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| 91 | 91 | | 3.29infrastructure; and |
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| 92 | 92 | | 3.30 (8) reduce the use of fossil-fuel-fired peaker plants. |
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| 93 | 93 | | 3Sec. 2. |
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| 94 | 94 | | 25-04891 as introduced03/26/25 REVISOR RSI/CH 4.1 Subd. 3.Content of tariff.(a) A virtual power plant tariff and program filed under this |
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| 95 | 95 | | 4.2section must contain, at a minimum: |
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| 96 | 96 | | 4.3 (1) a description of the goals of the virtual power plant program and the role the program |
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| 97 | 97 | | 4.4plays in meeting the public utility's grid system needs; |
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| 98 | 98 | | 4.5 (2) provisions to enroll and manage participants by aggregators and, if applicable, by |
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| 99 | 99 | | 4.6the public utility directly; |
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| 100 | 100 | | 4.7 (3) provisions to operate a virtual power plant program, including how the public utility |
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| 101 | 101 | | 4.8communicates with aggregators and participants during a grid event; and |
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| 102 | 102 | | 4.9 (4) provisions that, notwithstanding section 216B.164, participants must be compensated |
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| 103 | 103 | | 4.10at the applicable rate established under the tariff for electricity exported to the public utility |
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| 104 | 104 | | 4.11or demand reductions made during a grid event. |
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| 105 | 105 | | 4.12 (b) The commission may require a virtual power plant tariff and program filed under |
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| 106 | 106 | | 4.13this section to contain: |
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| 107 | 107 | | 4.14 (1) provisions that describe how: |
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| 108 | 108 | | 4.15 (i) performance measurement and performance verification data are delivered to the |
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| 109 | 109 | | 4.16public utility; |
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| 110 | 110 | | 4.17 (ii) performance-based compensation payments are calculated and issued by the public |
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| 111 | 111 | | 4.18utility; and |
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| 112 | 112 | | 4.19 (iii) disputes regarding performance-based compensation are settled; |
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| 113 | 113 | | 4.20 (2) descriptions regarding how performance-based compensation is designed to reflect |
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| 114 | 114 | | 4.21the full value of services at the specific locations where an eligible technology is utilized. |
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| 115 | 115 | | 4.22The value must include, at a minimum: |
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| 116 | 116 | | 4.23 (i) local and system peak demand reduction; and |
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| 117 | 117 | | 4.24 (ii) avoiding or deferring transmission or distribution system upgrades or capacity |
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| 118 | 118 | | 4.25expansion; |
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| 119 | 119 | | 4.26 (3) provisions that prohibit a participant from being compensated for providing the same |
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| 120 | 120 | | 4.27energy resources more than once; |
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| 121 | 121 | | 4.28 (4) provisions to measure and verify energy storage system performance directly at the |
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| 122 | 122 | | 4.29site of the energy storage system without requiring the installation of an additional meter; |
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| 123 | 123 | | 4.30and |
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| 124 | 124 | | 4.31 (5) operational parameters describing: |
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| 125 | 125 | | 4Sec. 2. |
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| 126 | 126 | | 25-04891 as introduced03/26/25 REVISOR RSI/CH 5.1 (i) the minimum and maximum numbers of annual grid events during which the public |
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| 127 | 127 | | 5.2utility may dispatch or activate enrolled resources; |
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| 128 | 128 | | 5.3 (ii) the months of the year during which grid events may occur; |
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| 129 | 129 | | 5.4 (iii) the days of the week during which grid events may occur; |
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| 130 | 130 | | 5.5 (iv) the times of the day during which grid events may occur; |
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| 131 | 131 | | 5.6 (v) the maximum duration of grid events; and |
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| 132 | 132 | | 5.7 (vi) the minimum advance notification of grid events to participants; and |
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| 133 | 133 | | 5.8 (6) any other information the commission determines is necessary to efficiently operate |
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| 134 | 134 | | 5.9a virtual power plant program. |
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| 135 | 135 | | 5.10 Subd. 4.Other operational requirements.(a) An aggregator must enter into a power |
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| 136 | 136 | | 5.11purchase agreement with a public utility in order to participate in a virtual power plant |
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| 137 | 137 | | 5.12program. |
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| 138 | 138 | | 5.13 (b) A public utility may serve as an aggregator. |
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| 139 | 139 | | 5.14 (c) A public utility customer may enroll with an aggregator to participate in a virtual |
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| 140 | 140 | | 5.15power plant program at the time the customer's distributed energy resource begins operations. |
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| 141 | 141 | | 5.16 (d) A participant must not be excluded from enrollment in a virtual power plant program |
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| 142 | 142 | | 5.17as a result of receiving financial incentives from the public utility for energy, capacity, or |
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| 143 | 143 | | 5.18other grid services under other programs offered by the public utility. |
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| 144 | 144 | | 5.19 (e) A public utility must not require collateral from a participant or aggregator as a |
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| 145 | 145 | | 5.20requirement to participate in a virtual power plant program. |
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| 146 | 146 | | 5.21 Subd. 5.Commission duties.(a) The commission may (1) approve, reject, or modify |
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| 147 | 147 | | 5.22a virtual power plant tariff filed under this section, and (2) modify an approved tariff after |
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| 148 | 148 | | 5.23notice and hearing. |
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| 149 | 149 | | 5.24 (b) The commission must establish reasonable and appropriate standards to protect the |
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| 150 | 150 | | 5.25interests of virtual power plant program participants. The standards may include requirements |
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| 151 | 151 | | 5.26for registration forms, standard contract terms and conditions, payment terms, warranties, |
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| 152 | 152 | | 5.27disclosure forms, and other requirements. |
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| 153 | 153 | | 5.28 (c) The commission must establish standards and procedures governing energy data held |
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| 154 | 154 | | 5.29by participants and public utilities that must be shared with aggregators in order to ensure |
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| 155 | 155 | | 5.30a virtual power plant program's efficient operation. An aggregator must not sell or use, for |
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| 156 | 156 | | 5Sec. 2. |
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| 157 | 157 | | 25-04891 as introduced03/26/25 REVISOR RSI/CH 6.1any other purpose, data from participants or public utilities gathered for virtual power plant |
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| 158 | 158 | | 6.2program use. |
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| 159 | 159 | | 6.3 (d) The commission may establish financial performance incentives for public utilities |
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| 160 | 160 | | 6.4that achieve the system peak reduction targets under subdivision 6. |
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| 161 | 161 | | 6.5 (e) The commission must develop a process to amend performance-based compensation |
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| 162 | 162 | | 6.6rates to use when amending performance-based compensation rates is warranted. |
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| 163 | 163 | | 6.7 Subd. 6.System peak reduction targets.No later than 2028, a public utility, by |
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| 164 | 164 | | 6.8implementing a virtual power plan and other programs designed to reduce the public utility's |
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| 165 | 165 | | 6.9system peak energy demand, must reduce the public utility's winter and summer peaks by |
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| 166 | 166 | | 6.10at least ten percent from the base year 2025. The commission must establish new targets |
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| 167 | 167 | | 6.11for subsequent years, provided the targets are cost effective. |
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| 168 | 168 | | 6.12 Subd. 7.Modification or delay.The commission may modify or delay a virtual power |
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| 169 | 169 | | 6.13plant program's implementation if the commission determines doing so is in the public |
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| 170 | 170 | | 6.14interest. When making a determination under this subdivision, the commission must consider |
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| 171 | 171 | | 6.15whether the system peak reduction targets established under subdivision 6 are technically |
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| 172 | 172 | | 6.16and economically feasible. |
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| 173 | 173 | | 6.17 Subd. 8.Cost recovery.Notwithstanding any other provision of this chapter, the |
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| 174 | 174 | | 6.18commission may approve cost recovery under section 216B.16, including an appropriate |
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| 175 | 175 | | 6.19rate of return, for any prudent and reasonable investments made or expenses incurred by a |
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| 176 | 176 | | 6.20public utility to administer and implement a virtual power plant program approved by the |
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| 177 | 177 | | 6.21commission under this section. |
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| 178 | 178 | | 6.22 Subd. 9.Report.Beginning January 31, 2028, and each January 31 thereafter, a public |
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| 179 | 179 | | 6.23utility must file an annual report to the commission and to the chairs and ranking minority |
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| 180 | 180 | | 6.24members of the senate and house of representatives committees with primary jurisdiction |
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| 181 | 181 | | 6.25over energy policy. The report must include, at a minimum: |
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| 182 | 182 | | 6.26 (1) the total capacity enrolled under the tariff approved by the commission under this |
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| 183 | 183 | | 6.27section, reported separately by eligible technology type, customer class, and whether the |
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| 184 | 184 | | 6.28participant operated under an aggregator or directly through the public utility; |
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| 185 | 185 | | 6.29 (2) the system peak reduction attributable to the virtual power plant program; |
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| 186 | 186 | | 6.30 (3) contributions to other grid services made by the virtual power plant program; |
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| 187 | 187 | | 6.31 (4) recommendations to increase participation in the virtual power plant program; and |
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| 188 | 188 | | 6.32 (5) other information requested by the commission. |
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| 189 | 189 | | 6Sec. 2. |
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| 190 | 190 | | 25-04891 as introduced03/26/25 REVISOR RSI/CH 7.1 EFFECTIVE DATE.This section is effective the day following final enactment. |
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| 191 | 191 | | 7Sec. 2. |
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| 192 | 192 | | 25-04891 as introduced03/26/25 REVISOR RSI/CH |
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