1.1 A bill for an act
1.2 relating to energy; requiring spent fuel located at Prairie Island to be transferred
1.3 to another site for storage; authorizing additional storage to be constructed at the
1.4 Monticello nuclear generating plant; authorizing the public utility to withhold
1.5 money from the renewable development account to pay for the cost to transport
1.6 spent fuel; amending Minnesota Statutes 2024, sections 116C.771; 116C.777;
1.7 116C.779, subdivision 1, by adding a subdivision; repealing Minnesota Statutes
1.8 2024, sections 116C.779, subdivision 2; 216C.41.
1.9BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.10 Section 1. Minnesota Statutes 2024, section 116C.771, is amended to read:
1.11 116C.771 ADDITIONAL CASK LIMITATIONS.
1.12 (a) Five casks may be filled and used at Prairie Island on May 11, 1994.
1.13 (b) An additional four casks may be filled and used at Prairie Island if the Environmental
1.14Quality Board determines that, by December 31, 1996, the public utility operating the Prairie
1.15Island plant has filed a license application with the United States Nuclear Regulatory
1.16Commission for a spent nuclear fuel storage facility off of Prairie Island in Goodhue County,
1.17is continuing to make a good faith effort to implement the site, and has constructed,
1.18contracted for construction and operation, or purchased installed capacity of 100 megawatts
1.19of wind power in addition to wind power under construction or contract on May 11, 1994.
1.20 (c)(1) An additional eight casks may be filled and placed at Prairie Island if the legislature
1.21has not revoked the authorization under clause (2) or the public utility has satisfied the wind
1.22power and biomass mandate requirements in sections 216B.2423, subdivision 1, paragraph
1.23(a), clause (1), and 216B.2424, subdivision 5, paragraph (a), clause (1), and the alternative
1.24site in Goodhue County is operational or under construction.
1Section 1.
25-05137 as introduced03/27/25 REVISOR RSI/CH
SENATE
STATE OF MINNESOTA
S.F. No. 3363NINETY-FOURTH SESSION
(SENATE AUTHORS: DRAZKOWSKI, Mathews and Anderson)
OFFICIAL STATUSD-PGDATE
Introduction and first reading04/09/2025
Referred to Energy, Utilities, Environment, and Climate 2.1 (2) If the site is not under construction or operational or the wind mandates are not
2.2satisfied, the legislature may revoke the authorization for the additional eight casks by a
2.3law enacted prior to June 1, 1999.
2.4 (d) Except as provided under paragraph (e), dry cask storage capacity for high-level
2.5nuclear waste within the state may not be increased beyond the casks authorized by section
2.6116C.77 or their equivalent storage capacity.
2.7 (e) (d) This section does not prohibit a public utility from applying for or the Public
2.8Utilities Commission from granting a certificate of need for dry cask storage to accommodate
2.9the decommissioning of a nuclear power plant within this state.
2.10 (e) An additional spent fuel storage facility must be constructed at the Monticello nuclear
2.11generating plant to store spent nuclear fuel transferred from the Prairie Island nuclear
2.12generating plant.
2.13 Sec. 2. Minnesota Statutes 2024, section 116C.777, is amended to read:
2.14 116C.777 SITE.
2.15 By January 1, 2028, the spent fuel contents of dry casks located on Prairie Island must
2.16be moved immediately upon the availability of another site for storage of the spent fuel that
2.17is not located on Prairie Island or at Monticello.
2.18 Sec. 3. Minnesota Statutes 2024, section 116C.779, subdivision 1, is amended to read:
2.19 Subdivision 1.Renewable development account.(a) The renewable development
2.20account is established as a separate account in the special revenue fund in the state treasury.
2.21Appropriations and transfers to the account shall be credited to the account. Earnings, such
2.22as interest, dividends, and any other earnings arising from assets of the account, shall be
2.23credited to the account. Funds remaining in the account at the end of a fiscal year are not
2.24canceled to the general fund but remain in the account until expended. The account shall
2.25be administered by the commissioner of management and budget as provided under this
2.26section.
2.27 (b) On July 1, 2017, the public utility that owns the Prairie Island nuclear generating
2.28plant must transfer all funds in the renewable development account previously established
2.29under this subdivision and managed by the public utility to the renewable development
2.30account established in paragraph (a). Funds awarded to grantees in previous grant cycles
2.31that have not yet been expended and unencumbered funds required to be paid in calendar
2Sec. 3.
25-05137 as introduced03/27/25 REVISOR RSI/CH 3.1year 2017 under paragraphs (f) and (g), and sections 116C.7792 and 216C.41, are not subject
3.2to transfer under this paragraph.
3.3 (c) (b) Except as provided in subdivision 1a, beginning January 15, 2018, and continuing
3.4each January 15 thereafter, the public utility that owns the Prairie Island nuclear generating
3.5plant must transfer to the renewable development account $500,000 each year for each dry
3.6cask containing spent fuel that is located at the Prairie Island power plant for each year the
3.7plant is in operation, and $7,500,000 each year the plant is not in operation if ordered by
3.8the commission pursuant to paragraph (i) (e). The fund transfer must be made if nuclear
3.9waste is stored in a dry cask at the independent spent-fuel storage facility at Prairie Island
3.10for any part of a year. The total amount transferred annually under this paragraph must be
3.11reduced by $3,750,000.
3.12 (d) (c) Except as provided in subdivision 1a, beginning January 15, 2018, and continuing
3.13each January 15 thereafter until January 15, 2028, the public utility that owns the Monticello
3.14nuclear generating plant must transfer to the renewable development account $350,000 each
3.15year for each dry cask containing spent fuel that is located at the Monticello nuclear power
3.16plant for each year the plant is in operation, and $5,250,000 each year the plant is not in
3.17operation if ordered by the commission pursuant to paragraph (i) (e). The fund transfer must
3.18be made if nuclear waste is stored in a dry cask at the independent spent-fuel storage facility
3.19at Monticello for any part of a year.
3.20 (e) (d) Each year, the public utility shall withhold from the funds transferred to the
3.21renewable development account under paragraphs (b) and (c) and (d) the amount necessary
3.22to pay its obligations under paragraphs (f) and (g), and sections section 116C.7792 and
3.23216C.41, for that calendar year.
3.24 (f) If the commission approves a new or amended power purchase agreement, the
3.25termination of a power purchase agreement, or the purchase and closure of a facility under
3.26section 216B.2424, subdivision 9, with an entity that uses poultry litter to generate electricity,
3.27the public utility subject to this section shall enter into a contract with the city in which the
3.28poultry litter plant is located to provide grants to the city for the purposes of economic
3.29development on the following schedule: $4,000,000 in fiscal year 2018; $6,500,000 each
3.30fiscal year in 2019 and 2020; and $3,000,000 in fiscal year 2021. The grants shall be paid
3.31by the public utility from funds withheld from the transfer to the renewable development
3.32account, as provided in paragraphs (b) and (e).
3.33 (g) If the commission approves a new or amended power purchase agreement, or the
3.34termination of a power purchase agreement under section 216B.2424, subdivision 9, with
3Sec. 3.
25-05137 as introduced03/27/25 REVISOR RSI/CH 4.1an entity owned or controlled, directly or indirectly, by two municipal utilities located north
4.2of Constitutional Route No. 8, that was previously used to meet the biomass mandate in
4.3section 216B.2424, the public utility that owns a nuclear generating plant shall enter into a
4.4grant contract with such entity to provide $6,800,000 per year for five years, commencing
4.530 days after the commission approves the new or amended power purchase agreement, or
4.6the termination of the power purchase agreement, and on each June 1 thereafter through
4.72021, to assist the transition required by the new, amended, or terminated power purchase
4.8agreement. The grant shall be paid by the public utility from funds withheld from the transfer
4.9to the renewable development account as provided in paragraphs (b) and (e).
4.10 (h) The collective amount paid under the grant contracts awarded under paragraphs (f)
4.11and (g) is limited to the amount deposited into the renewable development account, and its
4.12predecessor, the renewable development account, established under this section, that was
4.13not required to be deposited into the account under Laws 1994, chapter 641, article 1, section
4.1410.
4.15 (i) (e) After discontinuation of operation of the Prairie Island nuclear plant or the
4.16Monticello nuclear plant and each year spent nuclear fuel is stored in dry cask at the
4.17discontinued facility, the commission shall require the public utility to pay $7,500,000 for
4.18the discontinued Prairie Island facility and $5,250,000 for the discontinued Monticello
4.19facility for any year in which the commission finds, by the preponderance of the evidence,
4.20that the public utility did not make a good faith effort to remove the spent nuclear fuel stored
4.21at the facility to a permanent or interim storage site out of the state. This determination shall
4.22be made at least every two years.
4.23 (j) (f) Funds in the account may be expended only for any of the following purposes:
4.24 (1) to stimulate research and development of renewable electric energy technologies;
4.25 (2) to encourage grid modernization, including, but not limited to, projects that implement
4.26electricity storage, load control, and smart meter technology; and
4.27 (3) to stimulate other innovative energy projects that reduce demand and increase system
4.28efficiency and flexibility.
4.29Expenditures from the fund must benefit Minnesota ratepayers receiving electric service
4.30from the utility that owns a nuclear-powered electric generating plant in this state or the
4.31Prairie Island Indian community or its members.
4.32The utility that owns a nuclear generating plant is eligible to apply for grants under this
4.33subdivision.
4Sec. 3.
25-05137 as introduced03/27/25 REVISOR RSI/CH 5.1 (k) (g) For the purposes of paragraph (j) (f), the following terms have the meanings
5.2given:
5.3 (1) "renewable" has the meaning given in section 216B.2422, subdivision 1, paragraph
5.4(c), clauses (1), (2), (4), and (5); and
5.5 (2) "grid modernization" means:
5.6 (i) enhancing the reliability of the electrical grid;
5.7 (ii) improving the security of the electrical grid against cyberthreats and physical threats;
5.8and
5.9 (iii) increasing energy conservation opportunities by facilitating communication between
5.10the utility and its customers through the use of two-way meters, control technologies, energy
5.11storage and microgrids, technologies to enable demand response, and other innovative
5.12technologies.
5.13 (l) A renewable development account advisory group that includes, among others,
5.14representatives of the public utility and its ratepayers, and includes at least one representative
5.15of the Prairie Island Indian community appointed by that community's tribal council, shall
5.16develop recommendations on account expenditures. The advisory group must design a
5.17request for proposal and evaluate projects submitted in response to a request for proposals.
5.18The advisory group must utilize an independent third-party expert to evaluate proposals
5.19submitted in response to a request for proposal, including all proposals made by the public
5.20utility. A request for proposal for research and development under paragraph (j), clause (1),
5.21may be limited to or include a request to higher education institutions located in Minnesota
5.22for multiple projects authorized under paragraph (j), clause (1). The request for multiple
5.23projects may include a provision that exempts the projects from the third-party expert review
5.24and instead provides for project evaluation and selection by a merit peer review grant system.
5.25In the process of determining request for proposal scope and subject and in evaluating
5.26responses to request for proposals, the advisory group must strongly consider, where
5.27reasonable:
5.28 (1) potential benefit to Minnesota citizens and businesses and the utility's ratepayers;
5.29and
5.30 (2) the proposer's commitment to increasing the diversity of the proposer's workforce
5.31and vendors.
5.32 (m) The advisory group shall submit funding recommendations to the public utility,
5.33which has full and sole authority to determine which expenditures shall be submitted by
5Sec. 3.
25-05137 as introduced03/27/25 REVISOR RSI/CH 6.1the advisory group to the legislature. The commission may approve proposed expenditures,
6.2may disapprove proposed expenditures that it finds not to be in compliance with this
6.3subdivision or otherwise not in the public interest, and may, if agreed to by the public utility,
6.4modify proposed expenditures. The commission shall, by order, submit its funding
6.5recommendations to the legislature as provided under paragraph (n).
6.6 (n) The commission shall present its recommended appropriations from the account to
6.7the senate and house of representatives committees with jurisdiction over energy policy and
6.8finance annually by February 15. Expenditures from the account must be appropriated by
6.9law. In enacting appropriations from the account, the legislature:
6.10 (1) may approve or disapprove, but may not modify, the amount of an appropriation for
6.11a project recommended by the commission; and
6.12 (2) may not appropriate money for a project the commission has not recommended
6.13funding.
6.14 (o) A request for proposal for renewable energy generation projects must, when feasible
6.15and reasonable, give preference to projects that are most cost-effective for a particular energy
6.16source.
6.17 (p) The advisory group must annually, by February 15, report to the chairs and ranking
6.18minority members of the legislative committees with jurisdiction over energy policy on
6.19projects funded by the account for the prior year and all previous years. The report must,
6.20to the extent possible and reasonable, itemize the actual and projected financial benefit to
6.21the public utility's ratepayers of each project.
6.22 (q) (h) A project receiving funds from the account must produce a written final report
6.23that includes sufficient detail for technical readers and a clearly written summary for
6.24nontechnical readers. The report must include an evaluation of the project's financial,
6.25environmental, and other benefits to the state and the public utility's ratepayers. A project
6.26receiving funds from the account must submit a report that meets the requirements of section
6.27216C.51, subdivisions 3 and 4, each year the project funded by the account is in progress.
6.28 (r) (i) Final reports, any mid-project status reports, and renewable development account
6.29financial reports must be posted online on a public website designated by the commissioner
6.30of commerce.
6.31 (s) (j) All final reports must acknowledge that the project was made possible in whole
6.32or part by the Minnesota renewable development account, noting that the account is financed
6.33by the public utility's ratepayers.
6Sec. 3.
25-05137 as introduced03/27/25 REVISOR RSI/CH 7.1 (t) (k) Of the amount in the renewable development account, priority must be given to
7.2making the payments required under section 216C.417.
7.3 (u) (l) Construction projects receiving funds from this account are subject to the
7.4requirement to pay the prevailing wage rate, as defined in section 177.42 and the requirements
7.5and enforcement provisions in sections 177.27, 177.30, 177.32, 177.41 to 177.435, and
7.6177.45.
7.7 Sec. 4. Minnesota Statutes 2024, section 116C.779, is amended by adding a subdivision
7.8to read:
7.9 Subd. 4.Costs to transport spent nuclear fuel.Each year, the public utility that owns
7.10the Prairie Island nuclear generating plant must withhold from the money transferred to the
7.11renewable development account under subdivision 1, paragraphs (b) and (c), the amount
7.12necessary to pay for the costs to transport spent nuclear fuel, including the spent nuclear
7.13fuel stored in casks under sections 116C.77 and 116C.771, from the Prairie Island nuclear
7.14generating plant to the Monticello nuclear generating plant.
7.15 Sec. 5. REPEALER.
7.16 Minnesota Statutes 2024, sections 116C.779, subdivision 2; and 216C.41, are repealed.
7Sec. 5.
25-05137 as introduced03/27/25 REVISOR RSI/CH 116C.779 FUNDING FOR RENEWABLE DEVELOPMENT .
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.
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
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APPENDIX
Repealed Minnesota Statutes: 25-05137 (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.
(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:
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APPENDIX
Repealed Minnesota Statutes: 25-05137 (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
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
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APPENDIX
Repealed Minnesota Statutes: 25-05137 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: 25-05137