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Section 1. [216B.1612] [COMMUNITY-BASED ENERGY
12.27 DEVELOPMENT; TARIFF.]
Summary:ARTICLE 2 - C BED AND RENEWABLE TRANSMISSION
Establishing a community based energy development tariff to optimize local,
regional and state benefits from wind energy development and to facilitate
development of community based wind energy projects throughout the state,
specifying certain tariff rate requirements and providing for public utilities
commission approval; creating a priority for C-BED projects for renewable energy
objectives purposes and providing for property owner participation; providing
for the negotiation and development of certain agreements or joint venture
projects, specifying certain PUC approval requirements; expanding the authority
of the PUC to approve or disapprove power purchase contracts, investments or
expenditures relating to the renewable energy objectives and temporarily
requiring the PUC certification of priority electric transmission projects
meeting renewable energy objectives; exempting certain wind energy conversion
systems from certificate of need requirements; requiring the commissioner of
commerce to encourage cost effective renewable energy developments and to
compile and maintain information relating to existing and potential renewable
energy developments and resources for determination of need for large energy
facilities and for review of utility integrated resource plans, requiring
electric utilities adding generation to supply portfolios to provide the
commissioner with a notice of intent; requiring the PUC to order electric
utilities to participate in a statewide wind integration study
Specific Language
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12.24
ARTICLE 2
- 12.25 C-BED AND RENEWABLE TRANSMISSION
- 12.26 Section 1. [216B.1612] [COMMUNITY-BASED ENERGY
- 12.27 DEVELOPMENT; TARIFF.]
- 12.28 Subdivision 1. [TARIFF ESTABLISHMENT.] A tariff shall be
- 12.29 established to optimize local, regional, and state benefits from
- 12.30 wind energy development, and to facilitate widespread
- 12.31 development of community-based wind energy projects throughout
- 12.32 Minnesota.
- 12.33 Subd. 2. [DEFINITIONS.] (a) The terms used in this section
- 12.34 have the meanings given them in this subdivision.
- 12.35 (b) "C-BED tariff" or "tariff" means a community-based
- 12.36 energy development tariff.
- 13.1 (c) "Qualifying owner" means:
- 13.2 (1) a Minnesota resident;
- 13.3 (2) a limited liability corporation that is organized under
- 13.4 the laws of this state and that is made up of members who are
- 13.5 Minnesota residents;
- 13.6 (3) a Minnesota nonprofit organization organized under
- 13.7 chapter 317A;
- 13.8 (4) a Minnesota cooperative association organized under
- 13.9 chapter 308A or 308B, other than a rural electric cooperative
- 13.10 association or a generation and transmission cooperative;
- 13.11 (5) a Minnesota political subdivision or local government
- 13.12 other than a municipal electric utility or municipal power
- 13.13 agency, including, but not limited to, a county, statutory or
- 13.14 home rule charter city, town, school district, or public or
- 13.15 private higher education institution or any other local or
- 13.16 regional governmental organization such as a board, commission,
- 13.17 or association; or
- 13.18 (6) a tribal council.
- 13.19 (d) "Net present value rate" means a rate equal to the net
- 13.20 present value of the nominal payments to a project divided by
- 13.21 the total expected energy production of the project over the
- 13.22 life of its power purchase agreement.
- 13.23 (e) "Standard reliability criteria" means:
- 13.24 (1) can be safely integrated into and operated within the
- 13.25 utility's grid without causing any adverse or unsafe
- 13.26 consequences; and
- 13.27 (2) is consistent with the utility's resource needs as
- 13.28 identified in its most recent resource plan submitted under
- 13.29 section 216B.2422.
- 13.30 (f) "Community-based energy project" or "C-BED project"
- 13.31 means a new wind energy project that:
- 13.32 (1) has no single qualifying owner owning more than 15
- 13.33 percent of a C-BED project that consists of more than two
- 13.34 turbines; or
- 13.35 (2) for C-BED projects of one or two turbines, is owned
- 13.36 entirely by one or more qualifying owners, with at least 51
- 14.1 percent of the total financial benefits over the life of the
- 14.2 project flowing to qualifying owners; and
- 14.3 (3) has a resolution of support adopted by the county board
- 14.4 of each county in which the project is to be located, or in the
- 14.5 case of a project located within the boundaries of a
- 14.6 reservation, the tribal council for that reservation.
- 14.7 Subd. 3. [TARIFF RATE.] (a) The tariff described in
- 14.8 subdivision 4 must have a rate schedule that allows for a rate
- 14.9 up to a 2.7 cents per kilowatt hour net present value rate over
- 14.10 the 20-year life of the power purchase agreement. The tariff
- 14.11 must provide for a rate that is higher in the first ten years of
- 14.12 the power purchase agreement than in the last ten years. The
- 14.13 discount rate required to calculate the net present value must
- 14.14 be the utility's normal discount rate used for its other
- 14.15 business purposes.
- 14.16 (b) The commission shall consider mechanisms to encourage
- 14.17 the aggregation of C-BED projects.
- 14.18 (c) The commission shall require that qualifying owners
- 14.19 provide sufficient security to secure performance under the
- 14.20 power purchase agreement, and shall prohibit the transfer of the
- 14.21 C-BED project to a nonqualifying owner during the initial 20
- 14.22 years of the contract.
- 14.23 Subd. 4. [UTILITIES TO OFFER TARIFF.] By December 1, 2005,
- 14.24 each public utility providing electric service at retail shall
- 14.25 file for commission approval a community-based energy
- 14.26 development tariff consistent with subdivision 3. Within 90
- 14.27 days of the first commission approval order under this
- 14.28 subdivision, each municipal power agency and generation and
- 14.29 transmission cooperative electric association shall adopt a
- 14.30 community-based energy development tariff as consistent as
- 14.31 possible with subdivision 3.
- 14.32 Subd. 5. [PRIORITY FOR C-BED PROJECTS.] (a) A utility
- 14.33 subject to section 216B.1691 that needs to construct new
- 14.34 generation, or purchase the output from new generation, as part
- 14.35 of its plan to satisfy its good faith objective under that
- 14.36 section should take reasonable steps to determine if one or more
- 15.1 C-BED projects are available that meet the utility's cost and
- 15.2 reliability requirements, applying standard reliability
- 15.3 criteria, to fulfill some or all of the identified need at
- 15.4 minimal impact to customer rates.
- 15.5 Nothing in this section shall be construed to obligate a
- 15.6 utility to enter into a power purchase agreement under a C-BED
- 15.7 tariff developed under this section.
- 15.8 (b) Each utility shall include in its resource plan
- 15.9 submitted under section 216B.2422 a description of its efforts
- 15.10 to purchase energy from C-BED projects, including a list of the
- 15.11 projects under contract and the amount of C-BED energy purchased.
- 15.12 (c) The commission shall consider the efforts and
- 15.13 activities of a utility to purchase energy from C-BED projects
- 15.14 when evaluating its good faith effort towards meeting the
- 15.15 renewable energy objective under section 216B.1691.
- 15.16 Subd. 6. [PROPERTY OWNER PARTICIPATION.] To the extent
- 15.17 feasible, a developer of a C-BED project must provide, in
- 15.18 writing, an opportunity to invest in the C-BED project to each
- 15.19 property owner on whose property a high voltage transmission
- 15.20 line is constructed that will transmit the energy generated by
- 15.21 the C-BED project to market. This subdivision applies if the
- 15.22 property is located and the owner resides in the county where
- 15.23 the C-BED project is located.
- 15.24 [EFFECTIVE DATE.] This subdivision is effective July 1,
- 15.25 2005, and applies to transmission line construction beginning on
- 15.26 or after that date.
- 15.27 Subd. 7. [OTHER C-BED TARIFF ISSUES.] (a) A
- 15.28 community-based project developer and a utility shall negotiate
- 15.29 the rate and power purchase agreement terms consistent with the
- 15.30 tariff established under subdivision 4.
- 15.31 (b) At the discretion of the developer, a community-based
- 15.32 project developer and a utility may negotiate a power purchase
- 15.33 agreement with terms different from the tariff established under
- 15.34 subdivision 4.
- 15.35 (c) A qualifying owner, or any combination of qualifying
- 15.36 owners, may develop a joint venture project with a nonqualifying
- 16.1 wind energy project developer. However, the terms of the C-BED
- 16.2 tariff may only apply to the portion of the energy production of
- 16.3 the total project that is directly proportional to the equity
- 16.4 share of the project owned by the qualifying owners.
- 16.5 (d) A project that is operating under a power purchase
- 16.6 agreement under a C-BED tariff is not eligible for net energy
- 16.7 billing under section 216B.164, subdivision 3, or for production
- 16.8 incentives under section 216C.41.
- 16.9 (e) A public utility must receive commission approval of a
- 16.10 power purchase agreement for a C-BED tariffed project. The
- 16.11 commission shall provide the utility's ratepayers an opportunity
- 16.12 to address the reasonableness of the proposed power purchase
- 16.13 agreement. Unless a party objects to a contract within 30 days
- 16.14 of submission of the contract to the commission the contract is
- 16.15 deemed approved.
- 16.16 Sec. 2. Minnesota Statutes 2004, section 216B.1645,
- 16.17 subdivision 1, is amended to read:
- 16.18 Subdivision 1. [COMMISSION AUTHORITY.] Upon the petition
- 16.19 of a public utility, the Public Utilities Commission shall
- 16.20 approve or disapprove power purchase contracts, investments, or
- 16.21 expenditures entered into or made by the utility to satisfy the
- 16.22 wind and biomass mandates contained in sections 216B.169,
- 16.23 216B.2423, and 216B.2424, and to satisfy the renewable energy
- 16.24 objectives set forth in section 216B.1691, including reasonable
- 16.25 investments and expenditures made to:
- 16.26 (1) transmit the electricity generated from sources
- 16.27 developed under those sections that is ultimately used to
- 16.28 provide service to the utility's retail customers, or to
- 16.29 including studies necessary to identify new transmission
- 16.30 facilities needed to transmit electricity to Minnesota retail
- 16.31 customers from generating facilities constructed to satisfy the
- 16.32 renewable energy objectives, provided that the costs of the
- 16.33 studies have not been recovered previously under existing
- 16.34 tariffs and the utility has filed an application for a
- 16.35 certificate of need or for certification as a priority project
- 16.36 under section 216B.2425 for the new transmission facilities
- 17.1 identified in the studies; or
- 17.2 (2) develop renewable energy sources from the account
- 17.3 required in section 116C.779.
- 17.4 Sec. 3. Minnesota Statutes 2004, section 216B.2425,
- 17.5 subdivision 7, is amended to read:
- 17.6 Subd. 7. [TRANSMISSION NEEDED TO SUPPORT RENEWABLE
- 17.7 RESOURCES.] (a) Each entity subject to this section shall
- 17.8 determine necessary transmission upgrades to support development
- 17.9 of renewable energy resources required to meet objectives under
- 17.10 section 216B.1691 and shall include those upgrades in its report
- 17.11 under subdivision 2.
- 17.12 (b) Transmission projects determined by the commission to
- 17.13 be necessary to support a utility's plan under section 216B.1691
- 17.14 to meet its obligations under that section must be certified as
- 17.15 a priority electric transmission project, satisfying the
- 17.16 requirements of section 216B.243. In determining that a
- 17.17 proposed transmission project is necessary to support a
- 17.18 utility's plan under section 216B.1691, the commission must find
- 17.19 that the applicant has met the following factors:
- 17.20 (1) that the transmission facility is necessary to allow
- 17.21 the delivery of power from renewable sources of energy to retail
- 17.22 customers in Minnesota;
- 17.23 (2) that the applicant has signed or will sign power
- 17.24 purchase agreements, subject to commission approval, for
- 17.25 resources to meet the renewable energy objective that are
- 17.26 dependent upon or will use the capacity of the transmission
- 17.27 facility to serve retail customers in Minnesota;
- 17.28 (3) that the installation and commercial operation date of
- 17.29 the renewable resources to satisfy the renewable energy
- 17.30 objective will match the planned in-service date of the
- 17.31 transmission facility; and
- 17.32 (4) that the proposed transmission facility is consistent
- 17.33 with a least cost solution to the utility's need for additional
- 17.34 electricity.
- 17.35 Sec. 4. Minnesota Statutes 2004, section 216B.243,
- 17.36 subdivision 8, is amended to read:
- 18.1 Subd. 8. [EXEMPTIONS.] This section does not apply to:
- 18.2 (1) cogeneration or small power production facilities as
- 18.3 defined in the Federal Power Act, United States Code, title 16,
- 18.4 section 796, paragraph (17), subparagraph (A), and paragraph
- 18.5 (18), subparagraph (A), and having a combined capacity at a
- 18.6 single site of less than 80,000 kilowatts or to; plants or
- 18.7 facilities for the production of ethanol or fuel alcohol nor in;
- 18.8 or any case where the commission shall determine has determined
- 18.9 after being advised by the attorney general that its application
- 18.10 has been preempted by federal law;
- 18.11 (2) a high-voltage transmission line proposed primarily to
- 18.12 distribute electricity to serve the demand of a single customer
- 18.13 at a single location, unless the applicant opts to request that
- 18.14 the commission determine need under this section or section
- 18.15 216B.2425;
- 18.16 (3) the upgrade to a higher voltage of an existing
- 18.17 transmission line that serves the demand of a single customer
- 18.18 that primarily uses existing rights-of-way, unless the applicant
- 18.19 opts to request that the commission determine need under this
- 18.20 section or section 216B.2425;
- 18.21 (4) a high-voltage transmission line of one mile or less
- 18.22 required to connect a new or upgraded substation to an existing,
- 18.23 new, or upgraded high-voltage transmission line;
- 18.24 (5) conversion of the fuel source of an existing electric
- 18.25 generating plant to using natural gas; or
- 18.26 (6) the modification of an existing electric generating
- 18.27 plant to increase efficiency, as long as the capacity of the
- 18.28 plant is not increased more than ten percent or more than 100
- 18.29 megawatts, whichever is greater; or
- 18.30 (7) a large energy facility that (i) generates electricity
- 18.31 from wind energy conversion systems, (ii) will serve retail
- 18.32 customers in Minnesota, (iii) is specifically intended to be
- 18.33 used to meet the renewable energy objective under section
- 18.34 216B.1691 or addresses a resource need identified in a current
- 18.35 commission-approved or commission-reviewed resource plan under
- 18.36 section 216B.2422; and (iv) derives at least 10 percent of the
- 19.1 total nameplate capacity of the proposed project from one or
- 19.2 more C-BED projects, as defined under section 216B.1612,
- 19.3 subdivision 2, paragraph (f).
- 19.4 Sec. 5. [216C.053] [RENEWABLE ENERGY DEVELOPMENT.]
- 19.5 The commissioner of commerce must engage in activities to
- 19.6 encourage deployment of cost effective renewable energy
- 19.7 developments within the state. The commissioner shall compile
- 19.8 and maintain information concerning existing and potential
- 19.9 renewable energy developments and resources in the state. The
- 19.10 commissioner shall provide, as appropriate, this information in
- 19.11 proceedings for the determination of need for large energy
- 19.12 facilities and for the review of a utility's integrated resource
- 19.13 plan. To the extent practicable, and in addition to any other
- 19.14 obligation of an electric utility to furnish information, an
- 19.15 electric utility seeking to add generation to its supply
- 19.16 portfolio to serve Minnesota consumers shall provide the
- 19.17 commissioner with notice of its intention.
- 19.18 Sec. 6. [WIND INTEGRATION STUDY.]
- 19.19 The commission shall order all electric utilities, as
- 19.20 defined in Minnesota Statutes, section 216B.1691, subdivision 1,
- 19.21 paragraph (b), to participate in a statewide wind integration
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