5.2. ERMUSR 09-10-2013 Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO: FROM:
Elk River Municipal Utilities Commission Troy Adams, P.E. —General Manager
John Dietz—Chair
Al Nadeau—Vice Chair
Daryl Thompson—Trustee
MEETING DATE: AGENDA ITEM NUMBER:
September 10, 2013 5.2
SUBJECT:
Minnesota Municipal Utilities Association Annual Summer Conference Update
BACKGOUND:
Minnesota Municipal Utilities Association (MMUA) held their 81' Annual Summer Conference
August 21-23, 2013. The conference attendance was up from last year and is the largest annual
gathering of Minnesota municipal utilities personnel and elected officials.
DISCUSSION:
This year's conference had over 200 in attendance and nearly 100 trade show vendors. This
conference not only provides timely and important information during the seminars, but also
provides the opportunity to brainstorm industry issues with many utility managers and
commissions all at one place. Seminar topics included: 21" Century Leadership, CAPX,
Washington DC legislative update, Minnesota legislative update, Affordable Care Act, MN
Conservation Improvement Program, and Municipal Bonds. Attached is MMUA's MN
legislative report and flyer for a new MMUA financing option for local governments. Staff will
provide an update of key topics and highlights at the time of the Commission meeting.
During this summer conference, the MMUA Board of Directors also holds a meeting. At this
meeting, the 2014 MMUA budget was approved to be voted on by the membership during the
MMUA Business meeting on the last day of the conference. The total dues increase for MMUA
was approved at 1.5%. The application of the increase to individual members is based on a
formula involving a number of factors and for ERMU results in only a 1.12% increase.
I was elected to the Board of Directors in Aug 2012 for a 3 year term. Typically, board members
serve two terms. The board is comprised of 11 directors that represent the 125 electric utility
members. This year I was elected to be the MMUA Secretary-Treasurer, which is one of 4
members of the Executive Committee. The Secretary-Treasurer also serves as a member of the
MMUA Nomination and Awards Committee. This position is in a line of succession for the
MMUA President Elect and then MMUA President. It was a great honor to be nominated and
elected to the board by the MMUA members at such an early stage of my utility management
ewi
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54
career. And now after only one year on the Board of Directors, to be elected to the Executive
Committee to be in line for the MMUA President is an even greater honor. It is very rewarding
to know that what we have done in Elk River over the past four years while I was acting in the
capacity of General Manager, has elevated ERMU to this level in the eyes of our public power
community.
ACTION REQUESTED:
No action required.
ATTACHMENTS:
• MMUA 2013 Legislative Report
• MMUA Municipal Lease Program—Financing for State and Local Governments
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Our Mission:
To unify and serve as a common voice for municipal utilities,
and to provide them with the support they need
to provide quality service to their customers and community.
57
CONTENTS
Session Summary 2
New Laws 3
Omnibus Energy bill 3
Utility Regulation 6
PACE—Property-Assessed Clean Energy 6
Distributed Generation 7
Solar Energy 9
Made in Minnesota 10
Energy Policy Development 11
Miscellaneous 12
Omnibus Environment, Natural Resources&Agriculture Finance and Policy bill 13
Groundwater assistance, monitoring and analysis 13
Various Energy Provisions 14
LEA Power Purchase Agreement Change 14
Increased Need Threshold for Xcel Transmission Line Approval 14
Omnibus Tax bill 15
Sales Tax Exemption for Cities and Counties 15
Personal Property Tax Exemption for MMPA Electric Generating Plant 15
Payments in Aid of Construction 16
CIP Changes and "Buy the Farm" 16
Low-income program spending for gas utilities 16
IOU CIP incentive and cost-effectiveness 16
Nonrenewable Facilities Approval Conditions 16
"Buy-the-farm" changes 17
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Unsuccessful Legislation 18
Interim Rates Prohibition 18
Private Data Protection 18
Curbs on Wind Power Production 18
Curbs on Community Based Energy Development 19
Nuclear Waste Fund Payments Cessation 19
Up-Front Capital Equipment Tax Exemption 19
Up-Front Capital Equipment Tax Exemption 19
Renewable Energy Standard Repeal 19
School Energy Conservation Loans 20
PERA Social Security Leveling Option Repeal 20
PERA Salary Definition Modification 20
Hydroelectric Revitalization Loans 20
Wastewater Re-use Incentive 20
Lake Zumbro Dredging 20
Transmission Routing Study by LEC 21
Transmission Adjoining Land Valuation 21
Utility Crossing Fee Exemption 21
Stormwater Program Funding 21
Co-op or Municipal Commissioner on MPUC 21
Transmission Route Alternatives 22
Groundwater Sustainability 22
State and Local Groundwater Data Combination 22
Partial Easement Lawsuits 22
Solar Energy Jobs Act 23
Excess CIP Spending Allocation 23
IREE Funding 23
40%Renewable Energy Standard 23
Municipal Utility Territory Extension Compensation Limit 24
Net Metering Size Limit Increase 24
Telecommunications Regulation Overhaul 24
Utility Disconnection Reporting 24
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Nuclear Waste Storage Payment Increase 25
RES Credit for Geothermal Energy Savings 25
Distributed Generation Study 25
Standard Renewable Rates 26
"Solar Power Cost Reduction Act" 26
Local Governments Energy Improvements Program Expansion 27
Net Metering and Feed-in Tariff 27
Distributed Generation Interconnection Tariff Changes 27
CIP Savings Goal Sunset 28
Groundwater Conference 28
Utility Franchise Agreements 28
Cost of Service 28
Farm Tap Excavation Notice 29
Large Hydropower Renewable Energy Credit 29
Water Appropriation Permit Fee Increase 29
Recovered Energy Generation Incentive 29
INDEX 30
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SESSION SUMMARY
In 2013,the Minnesota Legislature convened for its annual session on January 8 and
adjourned on May 20. The Democratic-Farmer-Labor (DFL) party retook control of both
chambers from Republicans following the November 2012 election. Ballot measures to
require voter ID and to formally ban same sex marriage were widely seen as backfiring on
proponents and bringing DFL voters to the polls. With Mark Dayton as Governor, it was the
first time in 20 years that one party held the majority of seats in both the House and Senate
while a member of the same party sat in the chief executive's chair.
The new majority's one essential job during the session was to enact a balanced budget for
the 2013-14 biennium. Facing a forecasted $627 million deficit, it fulfilled its duty, raising
taxes by$2 billion and making additional funding available for new and existing programs.
In addition to those budget bills that fund the state government agencies, more policy bills
were introduced this year that would affect municipal utilities than in any session since
2007 when the"Next Generation Energy Act"passed.
In the six years since enactment of"NextGen," Minnesota utilities increased wind power
generation and purchasing by more than 12%, on pace to achieve a 25%total by 2025 (or
30%by 2020 in Xcel's case). They improved and tracked electric and gas consumer
efficiency and reduced CO2 emissions all while balancing revenue declines and large fuel
cost fluctuations. Still, some legislators introduced measures in 2013 to mandate more
renewable energy or increase the amounts utilities pay for it. Mostly though, legislators at
the capitol were repeating one sentiment in particular. "It's time to do something for
solar,"they said.
An explanation of what the Legislature and the Governor"did for solar" begins on page 4 of
this Legislative Report. From that long explanation,the one thing that must be noted in this
Session Summary is that municipal utilities are relatively unaffected by the 2013 law
changes. State-regulated investor-owned utilities will have to make major adjustments in
the way they do business. Municipal and cooperative utility representatives made a
coordinated and sustained lobbying effort throughout the session to educate legislators
about significant negative impacts that would result from many of the proposals and
disproportionately hurt consumer-owned utilities. But in the end, it was the phone calls
and e-mails of MMUA members as well as co-op members that put the brakes on a
legislative train that was headed down the wrong track.
Report compiled by MMUA Senior Government Relations Representative Bill Black.
Questions and comments welcome at bblack @mmua.org or 800-422-0119.
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NEW LAWS
The following pages with red headings summarize new laws passed during the 2013
legislative session. Each law or individual provision applies to Minnesotans beginning on
the "effective date" following its summary. Some of these laws will be codified within
Minnesota's permanent statutes while others (such as those that assign studies to be
completed) will be found only in the state's official yearly session law compilations under
the indicated chapter number. Editorial comments appear as italicized text.
OMNIBUS ENERGY BILL
2013 Session Laws Chapter 85,Articles 7-13 (HF 729 - Omnibus Jobs, Economic
Development, Housing, Commerce and Energy Finance bill, also called the Jobs bill)
HF 956 Rep. Melissa Hortman (DFL- Brooklyn Park)
SF 901 Sen.John Marty(DFL- Roseville)
Just as "omnibus"bills at the legislature typically evolve, the 2013 House and Senate Omnibus
Energy bills were put together separately and more or less simultaneously over several weeks
and through the course of several committee hearings from collections of bills introduced
individually by various legislators. The separate bills were amended through the committee
process onto core bills introduced by the two energy committee chairs. Those core bills
contained proposals from the Governor's administration with the goal of increasing the
amount of solar electricity throughout the state.
Near the beginning of the legislative session, leadership at the state's Division of Energy
Resources(D.E.R.) laid out the administration proposal in separate meetings with groups of
lobbyists from the various electric utility sectors. MMUA met with the D.E.R. Director on
behalf of the municipal sector. Under part one of the proposal, the cap on net metered
facilities would be increased from 40kW to 1,000kW. That is, the eligibility size limit for
customer-owned solar panel systems that could earn compensation for their excess
generation would increase by a factor of 25. And compensation for energy from systems
within the new size range would be at a rate equal to the utility's avoid cost Part two of the
proposal would set an alternative rate that utilities could choose to pay for such energy. That
rate would be set by the D.E.R. according to a formula that would supposedly calculate the
true "value of solar,"or"solar value"as referred to in the law as enacted. (See ARTICLE 9
below for details.)
The proposal's base "value of solar"power purchasing rate model was devised by the
municipal utility serving Austin, Texas and went into effect there two months prior to its
introduction in this Minnesota legislative session. Intended to encapsulate all of the benefits
of solar as a generating resource, the "value of solar"model would quantify factors including
avoided line loss, avoided energy and transmission capacity payments, environmental benefits
62
and other considerations that a utility's retail rate or typical avoided cost rate does not
reflect. This logical approach gave the utility lobbies hope that the state could in fact develop
a rate that accurately and transparently reflects the true value of extra energy sold by solar
generating customers to their utilities.
One particularly significant question arose, however, as details of the proposed formula could
be analyzed. The legislation would give the state authority to "incorporate other values into
the methodology"without clear limitation. Specifically included among those other factors
could be "credit for locally manufactured or assembled systems." Furthermore, the proposal
set an arbitrary price floor whereby utilities would pay no less than their retail rates-a rate
equal to or higher than what they previously paid. These provisions begged the question
"Value of solar to whom?" It was clear the state had broader public policy benefits in mind
that it intended to add to the solar producers'side of the rate equation at the expense of the
utilities and their customers who would pay for this energy. And so it became evident
throughout the course of proceedings that behind those solar generating customers stood the
true beneficiaries of the supposed "true value of solar"model- the manufacturers and
installers of solar generation equipment.
In the most general sense, the legislation's main thrust would have grossly undermined
municipal authority to operate and regulate city utilities for the benefit of their customer-
owners and their communities. It also simply ignored the immense differences among the
state's various utilities, treating the very large and the very small identically.
Amazingly, however, the misguided core proposal was perhaps not even the most egregious
aspect of the legislation as it continued to grow into what would become the omnibus energy
bill. From the outset and throughout the course of committee proceedings, MMUA voiced
steady opposition to the overall legislative package,specifically identifying and explaining its
many problems.
Certain aspects of the omnibus bill would have allowed unregulated electricity sales by
private non-utility companies throughout Minnesota, directly circumventing the extremely
important regulatory framework of exclusive service rights and accompanying
responsibilities of the state's established, regulated utilities. The bill would have upended the
existing renewable energy standard's foundational premise that allows utilities to meet it
with whatever eligible generation resources best match their needs. It would have required
municipal utilities to produce and submit annually detailed maps of their distribution
systems, identifying locations where solar installers could best target the utilities'customers.
For these and other reasons, MMUA strongly opposed this legislation. As a direct result, the
authors of the bills in the House and Senate amended their respective bills in ways that
significantly limited objectionable aspects for all utility sectors(particularly third-party retail
electric sales as noted above). Realizing that the bill still would not pass votes by their
respective full bodies over continued opposition by municipal and cooperative utilities, the
authors accepted demands to remove applicability of the omnibus energy law on municipal
and cooperative utilities. Thus, the following provision summaries pertain only to investor-
owned utilities, unless otherwise identified by underlined text.
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- Provisions MMUA objected to that were removed from the omnibus bills -
The following proposals were in some version of the House or Senate omnibus energy bill
at some time during the legislation development stage but did not make it into the final law.
• An increase in the Renewable Energy Standard to 40% by 2030.
• A new solar energy standard of 4%by 2025. (IOUs must meet a new solar standard of
1.5%. See below.)
• Authority for unregulated businesses to install and own solar devices on the properties
of people, businesses and other utility customers and sell the electric output to those
property owners. ("Third-party ownership.")
• An exemption from all limitations on net metering facilities for wind turbine systems of
up to 3.5 megawatts placed on properties with buildings that are wholly or partially
financed with public funds.
• A prohibition on municipal and cooperative utilities from charging standby fees to
generating customers.
• A virtual prohibition on municipal and cooperative utilities against limiting the amount
of distributed generation on their electric systems.
• A provision requiring municipal and cooperative utilities to allow entities to
interconnect solar arrays to the utilities' systems and sell subscriptions for the solar
output to the utilities' customers using the utilities' conducting lines for power delivery.
("Community Solar.")
• Annual assessments on municipal and cooperative utilities equal to 5% of their
previous year's spending requirement under the Conservation Improvement Program.
• A fee (tax) on all electric utilities of up to 1.33%of their annual gross retail sales for
deposit into a state fund dedicated to subsidizing solar energy producers.
- Provisions that became law -
The following provisions were enacted as articles 7-13 of the 2013 Session Laws, Chapter
85. The effective date of each provision is July 1, 2013,unless otherwise stated at the end
of the provision summary.
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PLEASE NOTE: Nearly all of this law affects only investor-owned utilities. While some
provisions will have an indirect or general effect on the state's energy regulatory
environment, ONLY THE UNDERLINED TEXT IN THE PROVISIONS BELOW APPLIES
DIRECTLY TO MUNICIPAL UTILITIES OR MUNICIPAL POWER AGENCIES.
Utility Regulation (Article 7)
Section 1 -Allows utilities to recover the costs of facilities approved by the regulatory
commission of the state in which the new transmission facilities are to be constructed.
Amends Minn. Stat.§216.16, subd. 7b. Effective Date: July 1, 2013.
Sections 2, 9- Makes minor changes to non-municipal gas utility rate setting statutes.
Amends Minn. Stat. §216B.1635. Effective Date: May 22, 2013.
Section 3 - Requires the Minnesota Public Utilities Commission.in consultation with the
Division of Energy Resources.to establish a uniform template for municipal power
agencies. G&Ts and IOUs to follow when they report.as part of their integrated resource
plans.on the impact of the Renewable Energy Standard on their rates. Amends Minn. Stat.
§216.1691,subd. 2e. Effective Date: July 1, 2013.
Sections 4-8 -Allows the Minnesota Public Utilities Commission to approve an emissions
reduction rate rider for an out-of-state power plant owned by Ottertail Power and makes
related statutory changes. Amends Minn.Stat.§216B.1692 and§216B.1695. Effective
Date: May 22, 2013. From HE 1326 by Rep.Jay McNamar (DFL- Elbow Lake) and
SF 1104 by Sen. Lyle Koenen (DFL- Clarissa).
PACE- Property-Assessed Clean Energy (Article 8)
Section 1 - Defines "cost-effective energy improvements" as"energy improvements that
have been identified in an energy audit or renewable energy system feasibility study as
repaying their purchase and installation costs in 20 years or less,based on the amount of
future energy saved and estimated future energy prices." Amends Minn.Stat.§216C.435 by
adding a subdivision 3a.
Section 2 - Changes the definition of"qualifying real property"to require that it be capable
of benefiting from energy improvements "that are cost-effective." Amends Minn. Stat.
§216C.435,subd. 8.
Section 3 - Requires that any financing program under PACE must not prohibit the
financing of other cost-effective energy improvements. Amends Minn. Stat. §216C.436,
subd. 2.
Sections 4, 6-Allows financers to make assessments be payable in up to 20 equal annual
installments. Amends Minn. Stat. §216C.436,subd. 7 and§429.101, subd. 2.
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Section 5 - Limits to 20 years the allowable payback period for revenue bonds under the
Energy Improvements for Local Governments Program. Amends Minn. Stat. §216C.436,
subd. 8.
Each section under Article 8 is effective beginning May 22, 2013.
Distributed Generation (Article 9)
Article 9 is the core of the omnibus energy bill and came primarily from the Governor's
administration through the Division of Energy Resources. As introduced, the legislative
proposal would have applied to all electric utilities, including municipals and cooperatives.
The new law, however, applies only to investor-owned utilities. That is, the net metering
laws have not changed for municipal and cooperative utilities,and those utilities are
not required to adopt the Solar Value rate described below although they are, as
always, free to incorporate or borrow from this or other compensation models through
local decision making.
Net metering
Utility customers have the option of receiving compensation for their excess power
generation from their net metered renewable or high efficiency distributed generation so
long as their generating facilities have a nameplate capacity of 1,000kW or less. Previously,
the cap was 40kW.
If the capacity is 40kW or less, the customer can choose to receive compensation at a rate
equal to the utility's average retail rate just as before this law passed.
If the capacity is between 40kW and 1,000kW,the customer can receive compensation at a
rate equal to the utility's calculated avoided cost. Those customers may elect to be
compensated in the form of a kWh credit on their electric bills equal to the rate they would
otherwise receive as payment.
Utilities may not impose standby charges on customer generating facilities with a
nameplate capacity of 1,00kW or less. For facilities with a nameplate capacity greater than
1,000kW,a standby charge may only be imposed in accordance with a PUC order
establishing the costs to be recovered.
Utilities are required to aggregate meters for billing upon customer request.
Utilities may request that the PUC limit the cumulative amount of distributed generation on
a utility's system once it has reached 4% of the utility's annual retail sales. The PUC may
grant further limits upon proof of certain conditions by the utility and after a period for
public comment.
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Utilities may limit distributed generation systems with a nameplate capacity greater than
40kW as follows. Wind generation facilities maybe limited to 120% of on-site maximum
electric demand. Solar and other generation facilities may be limited to 120% of on-site
annual electric consumption.
Solar Value Rate ("Alternative tariff')
"(a) A public utility may apply for commission approval for an alternative tariff that
compensates customers through a bill credit mechanism for the value to the utility, its
customers, and society for operating distributed solar photovoltaic resources
interconnected to the utility system and operated by customers primarily for meeting their
own energy needs.
(b) If approved,the alternative tariff shall apply to customers' interconnections
occurring after the date of approval. The alternative tariff is in lieu of the applicable
rate under subdivisions 3 and 3a.
(c) The commission shall after notice and opportunity for public comment approve
the alternative tariff provided the utility has demonstrated the alternative tariff:
(1) appropriately applies the methodology established by the department and
approved by the commission under this subdivision;
(2) includes a mechanism to allow recovery of the cost to serve customers receiving
the alternative tariff rate;
(3) charges the customer for all electricity consumed by the customer at the
applicable rate schedule for sales to that class of customer; ["Sell-all"]
(4) credits the customer for all electricity generated by the solar photovoltaic device
at the distributed solar value rate established under this subdivision; ["Buy-all"]
(5) applies the charges and credits in clauses (3) and (4) to a monthly bill that
includes a provision so that the unused portion of the credit in any month or billing
period shall be carried forward and credited against all charges. In the event that
the customer has a positive balance after the 12-month cycle ending on the last day
in February,that balance will be eliminated and the credit cycle will restart the
following billing period beginning on March 1;
(6) complies with the size limits specified in subdivision 3a;
(7) complies with the interconnection requirements under section 216B.1611; and
(8) complies with the standby charge requirements in subdivision 3a, paragraph (b).
(d) A utility must provide to the customer the meter and any other equipment needed to
provide service under the alternative tariff.
(e) The department must establish the distributed solar value methodology in
paragraph (c), clause (1), no later than January 31, 2014. The department must submit the
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methodology to the commission for approval.The commission must approve, modify with
the consent of the department, or disapprove the methodology within 60 days of its
submission.When developing the distributed solar value methodology,the department
shall consult stakeholders with experience and expertise in power systems,solar energy,
and electric utility ratemaking regarding the proposed methodology, underlying
assumptions, and preliminary data.
(f) The distributed solar value methodology established by the department must,
at a minimum, account for the value of energy and its delivery, generation capacity,
transmission capacity, transmission and distribution line losses, and environmental
value.The department may,based on known and measurable evidence of the cost or
benefit of solar operation to the utility, incorporate other values into the methodology,
including credit for locally manufactured or assembled energy systems, systems installed
at high-value locations on the distribution grid, or other factors.
(g) The credit for distributed solar value applied to alternative tariffs approved
under this section shall represent the present value of the future revenue streams of the
value components identified in paragraph (1).
(h) The utility shall recalculate the alternative tariff on an annual cycle, and shall file
the recalculated alternative tariff with the commission for approval.
(i) Renewable energy credits for solar energy credited under this subdivision belong
to the electric utility providing the credit.
0) The commission may not authorize a utility to charge an alternative tariff rate
that is lower than the utility's applicable retail rate until three years after the commission
approves an alternative tariff for the utility.
(k) A utility must enter into a contract with an owner of a solar photovoltaic device
receiving an alternative tariff rate under this section that has a term of at least 20 years,
unless a shorter term is agreed to by the parties.
(1) An owner of a solar photovoltaic device receiving an alternative tariff rate
under this section must be paid the same rate per kilowatt-hour generated each year for
the term of the contract"
Solar Energy (Article 10)
Solar Mandate (for investor-owned utilities only) - By the end of 2020,at least 1.5% of
total retail electric sales made by investor-owned utilities must come from solar energy.At
least 10% of the 1.5% must come from solar facilities with capacities of less than 20kW.
Sales to mining and paper mill customers are not counted as part of total retail sales.
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State Solar Goal (for all utilities) - "It is an energy goal of the state of Minnesota that by
2030. 10% of the retail electric sales in Minnesota be generated by solar energy." While
not a mandate. this"goal"applies to all retail electric sales and.therefore. to all electric
utility sectors. including public power.
Xcel Solar Energy Incentive Program-Xcel must operate a program to provide solar
energy production incentives for solar energy systems. The program must be operated for
5 consecutive calendar years commencing in 2014. $5 million per year must be allocated
for each of the 5 years from the Renewable Development Fund (RDF). To be eligible,
systems must be 20kW or smaller in nameplate capacity and sized to less than 120% of the
customer's on-site annual energy consumption. The incentive must be paid for 10 years.
Community Solar Garden -Xcel must file with the Public Utilities Commission a plan to
operate a community solar garden program to begin 90 days after the commission
approves the plan. Other public utilities may apply with the commission to file and operate
similar programs. The program must be designed to offset the energy use of not less than 5
subscribers, and no subscriber may have more than a 40%interest. The owner of the
community solar garden may be a public utility or any other entity or organization that
contracts to sell the output from the community solar garden to the utility. The maximum
size for a solar garden is 1 megawatt, and the minimum subscription must be 200 watts of
the garden's generating capacity. Subscribers must be customers of the utility, must
receive their portion of the solar project's generation as a credit on their electric bill and
must live in the county where the facility is located or a contiguous county.
Made in Minnesota (Article 11)
Solar Energy Production Incentive- Each investor-owned utility must contribute 5% of
their CIP spending requirement for 10 years to a new Made in Minnesota Solar Energy
Production Incentive account. Each contributing utility receives energy savings credit
"based on its payment to the commissioner." Xcel must fill the fund up to $15 million after
all other annual receipts are received. The Division of Energy Resources must attempt to
distribute incentive payments among utility customers in proportion to the amounts
contributed by the utilities.
Rebates for Photovoltaic Systems - Eligible systems must be 40kW or smaller, installed
on residential or commercial property and receive a "Made in Minnesota" certificate from
the DER. The owner receives payments for 10 years, provided that funding is available. No
new customers may be added to the 10-year program beginning in January 2025.
Rebates for Solar thermal projects- For 10 years, beginning in 2014, the Department of
Commerce must allocate $250,000 from the Made in Minnesota account to be spent on
rebates for solar thermal systems. The maximum rebate shall be 25% of the installed cost
of a completed system or$2,500 for a single family residence, $5,000 for a multiple family
69
residence or$25,000 for a commercial installation. Each year, rebates must be split evenly
between solar thermal hot water and solar thermal air projects.
From HF 567 and HF 1167 by Rep. Carly Melin (DFL- Hibbing) and SF 750 and SF 936 by
Sen. David Tomassoni (DFL- Chisolm).
Energy Policy Development (Article 12)
Planning strategy for a sustainable energy future (Section 1)
"(a) The Legislative Energy Commission, in consultation with the commissioner of
commerce and other state agencies shall develop a framework for the state of Minnesota to
transition to a renewable energy economy that ends Minnesota's contribution to
greenhouse gases from burning fossil fuels within the next few decades. The framework
and strategy should aim to make Minnesota the first state in the nation to use only
renewable energy.
(b) In developing the framework for this transition,the commission must consult
with stakeholders, including, but not limited to, representatives from cooperative,
municipal, and investor-owned utilities, natural resources and environmental advocacy
groups, labor and industry, and technical and scientific experts to examine the challenges
and opportunities involved to develop a strategy and timeline to protect the environment
and create jobs. The timeline must establish goals and strategies to reach the state's
renewable energy standards and prepare for the steps beyond reaching those standards.
The Department of Commerce, Division of Energy Resources shall provide technical
support.
(c) The commission and its stakeholders must consider the following in creating
the framework:
(1) the economic and environmental costs of continued reliance on fossil fuels;
(2) the creation of jobs and industry in the state that result from moving ahead of
other states in transitioning to a sustainable energy economy;
(3) the appropriate energy efficiency and renewable energy investments in
Minnesota to reduce the economic losses to the Minnesota economy from importation
of fossil fuels; and
(4) the new technologies for energy efficiency,storage, transmission, and renewable
generation needed to reliably meet the demand for energy.
(d) The framework shall be modified as needed to take advantage of new
technological developments to facilitate ending fossil fuel use in power generation,
heating and cooling, industry, and transportation.
70
(e) The commission shall report to the legislative committees and divisions with
jurisdiction over energy policy by January 15, 2014, and annually thereafter, on progress
towards achieving the framework goals."
CIP changes (Sections 2-3)
The state's overall energy savings goal is changed to "at least" 1.5% of energy sales per
year. In addition to energy savings by utilities,"energy efficiency achieved by energy
consumers without direct utility involvement" is added as a source of savings toward
achieving the state's overall goal. (The savings goal of 1.5% for utilities is not changed.)
Amends Minn. Stat.§216B.2401.
From HF 1301 by Rep. Melissa Hortman (DFL- Brooklyn Park) and SF 1135 by Sen. Scott
Dibble (DFL- Minneapolis).
Transmission and renewable energy integration study (Section 4)
The Minnesota Public Utilities Commission is required to order all Minnesota electric
utilities that are subject to the Renewable Energy Standard (i.e., investor-owned utilities,
municipal power agencies, consumer power districts and G&T cooperatives) and all
transmission companies "to conduct an engineering study of the impacts on reliability and
costs of, and to study and develop plans for the transmission network enhancements
necessary to support, increasing the renewable energy standard . . . to 40%by 2030,and
to higher proportions thereafter,while maintaining system reliability."
Studies by the Division of Energy Resources (Sections 5-8)
The Division of Energy Resources is required to:
• study and report findings on the value of on-site energy storage (Sec. 5);
• study and report findings on the value of solar thermal (Sec. 6);
• develop the scope for the sustainable energy future study(Sec. 7); and
• conduct public meetings and report on various policy subjects relating to
utilities and energy savings (Sec. 8). These public meetings will be particularly
important. MMUA will participate. MMUA members are encouraged to
participate as well.
Miscellaneous (Article 13)
Guaranteed Energy Savings -Under Guaranteed Energy Savings contracts entered into
by the Department of Administration,the energy savings period is extended from 15 years
to 25 years during which the amount of energy savings is added up and counted against the
cost of an energy cost savings measure. (Sec. 1)
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Waste Heat,Cogeneration&CHP (Sec. 2,4) - Demand side natural gas or electric energy
displaced by the use of waste heat recovered and used as thermal energy. including the
recovered thermal energy from a cogeneration or combined heat and power facility may be
counted toward a utility's natural gas or electric energy savings goal. subject to department
approval. "Waste heat recovered and used as thermal energy means capturing heat energy
that would otherwise be exhausted or dissipated to the environment from machinery,
buildings, or industrial processes and productively using such recovered thermal energy
where it was captured or distributing it as thermal energy to other locations where it is
used to reduce demand side consumption of natural gas. electric energy, or both." (Current
law requires that recovered waste heat must be converted into electricity to qualify.)
Amends Minn. Stat.§216B.241 by amending subdivision 1 and by adding a subdivision 10.
From HF 780 by Rep.Tim Mahoney (DFL- St. Paul) and SF 642 by Sen. Scott Dibble (DFL -
Minneapolis).
CERTs Funding (Sec. 3) -The Community Energy Resource Teams will receive $500,000
per year from the Research and Development Fund under the Conservation Improvement
Program on an ongoing basis. Previously, CERTs funding, if any, required specific
appropriations to be made. Effective date: For assessments for state fiscal years
commencing on or after July 1, 2013.
From HF 1000 by Rep. Tim Kelly (R- Red Wing) and SF 1011 by Sen. Scott Dibble
(DFL- Minneapolis).
Miscellaneous Xcel cost recovery (Sec. 6) - Minnesota Statutes Section 216B.1637 is
repealed. It allowed Xcel to recover through its rates the costs associated with replacing
cast iron natural gas distribution and service lines and replacing breakers that contain
sulfur hexafluoride.
OMNIBUS ENVIRONMENT,NATURAL RESOURCES&AGRICULTURE FINANCE AND POLICY BILL
2013 Session Laws Chapter 114
HF 976 Rep.Jean Wagenius (DFL- Minneapolis)
SF 1170 Sen. David Tomassoni (DFL- Chisolm)
Groundwater assistance, monitoring and analysis
From the general fund, $1.6 million is appropriated in fiscal year 2014 and $6 million in
2015 for the following purposes:
(1) increased financial reimbursement and technical support to soil and water
conservation districts or other local units of government for groundwater level
monitoring;
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(2) additional surface water monitoring and analysis, including installation of
monitoring gauges;
(3) additional groundwater analysis to assist with water appropriation permitting
decisions;
(4) additional permit application review incorporating surface water and
groundwater technical analysis;
(5) enhancement of precipitation data and analysis to improve the use of irrigation;
(6) enhanced information technology, including electronic permitting and
integrated data systems; and
(7) increased compliance and monitoring.
Introduced as HF 682 by Rep. Peter Fischer(DFL -Maplewood)and SF244 by Sen. Charles
Wiger(DFL -Maplewood)and with support from influential Rep.Jean Wagenius
(DFL -Minneapolis), the initial legislative proposals to fund greater groundwater monitoring
would have greatly increased fees for water appropriation permits. The Senate did not
concur with the House's support for such fee increases. Instead, the law allocates funding
from the state's general fund.
VARIOUS ENERGY PROVISIONS
2013 Session Laws Chapter 57
HF 623 Rep. Carly Melin (DFL- Hibbing)
SF 521 Sen. David Tomassoni (DFL- Chisolm)
LEA Power Purchase Agreement Change (Section 1)
Requires an amendment to the power purchase agreement between Xcel and the
Laurentian Energy Authority(LEA) establishing an average energy price of no more than
$109.20 per megawatt hour. The amendment must also allow the LEA to collect an
adjustment for fuel costs that exceed $3.40 per MMBTU.
Amends Minn. Stat. §216B.2424,subd. 5a. Effective date: For fuel costs incurred and
prices after January 1, 2014.
Increased Need Threshold for Xcel Transmission Line Approval (Section 2)
Restricts the Minnesota Public Utilities Commission from approving a certificate of need for
upgrading an 8-mile Xcel transmission line in Minneapolis unless the commission finds"by
clear and convincing evidence that there is no feasible and available distribution level
alternative to the transmission line." Effective date: May 14, 2013.
From HF 1205 by Rep. Sarah Anderson (DFL- Plymouth) and SF 716 by Sen.Terri Bonoff
(DFL- Minnetonka).
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OMNIBUS TAX BILL
2013 Session Laws Chapter 143
HF 677 Rep.Ann Lenczewski (DFL- Bloomington)
SF 552 Sen. Rod Skoe (R- Clearbrook)
Sales Tax Exemption for Cities and Counties (Art. 8, Sec. 29)
Exempts cities and counties from the state sales tax on most purchases. (The same
exemption was established for towns in 2011.) Excluded from the exemption are
purchases of certain building construction or reconstruction materials, prepared food,
candy,soft drinks, alcoholic beverages, motor vehicle leases and lodging accommodations.
The exemption also does NOT apply to purchases by cities or counties of goods or services
that are used as inputs to certain goods or services provided by the local government to its
citizens, including, specifically, municipal electric or gas utility service. Under the law,
electric or gas service is considered to be a service "generally provided by a private
business." However, purchases of inputs to "sewer,water service and wastewater
treatment" DO qualify for the new sales tax exemption.
As of the printing of this Legislative Report, MMUA was lobbying the Department of Revenue
for an interpretation of the exemption carveout for municipal utilities that would still exempt
from the sales tax purchases by utilities of goods and services that are not inputs to the utility
services they provide(e.g., office supplies, etc.).
Amends Minn. Stat. §297A.70,subd. 2. Effective date: For sales and purchases made after
December 31, 2013.
From HF 295 by Rep. Nick Zerwas (R- Elk River) and SF 329 by Sen. David Senjem
(R- Rochester) and HF 469 by Rep. Peter Fischer (DFL- Maplewood) and SF 104 by
Sen. Charles Wiger (DFL- Maplewood).
Personal Property Tax Exemption for MMPA Electric Generating Plant (Art.4, Sec. 14)
To exempt from personal property tax an electric generating plant with a capacity
exceeding 5 megawatts that utilizes natural gas in a reciprocating engine in a Twin Cities
metropolitan county and is owned by a municipal power agency. The plant must be
designed so that the power it generates will be consumed in the municipal utility service
territory in which it is located. Amends Minn. Stat. §272.02. Effective date: Assessment
year 2013, taxes payable in 2014 and thereafter.
From HF 337 by Rep. Leon Lillie (DFL- North St. Paul) and SF 161 by Sen. Charles Wiger
(DFL- Maplewood).
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Payments in Aid of Construction (Art.8, Sec. 3)
Clarifies that payments made as contributions in aid of construction to a cooperative
electric association or public utility are contracts for improvement to real property and not
retail sales. Thus no sales tax is due to the state. This issue arose from inconsistent
application of sales tax requirements by state auditors in different regions.
Amends Minn. Stat. §297A.61,subd. 4. Effective date: For sales and purchases made after
June 30, 2013.
CIP CHANGES AND"BUY THE FARM"
2013 Session Laws Chapter 132
HF 854 Rep.Joe Atkins (DFL- Inver Grove Heights)
SF 695 Sen. Scott Dibble (DFL- Minneapolis)
Low-income program spending for gas utilities
The amount that non-municipal gas utilities must spend on low-income programs under
the Conservation Improvement Program is increased from 0.2%to 0.4%of their most
recent three-year average gross operating revenue from residential customers. Amends
Minn. Stat.§216B.241, subd. 7. Effective date: May 25, 2013.
IOU CIP incentive and cost-effectiveness
For low-income programs that are not cost-effective, investor-owned utilities have the
option of counting the savings while excluding the costs and benefits from their incentive
calculations. Amends Minn. Stat. §216B.241, subd. 7. Effective date: May 25, 2013.
Nonrenewable Facilities Approval Conditions
When considering an Integrate Resource Plan and determining whether a nonrenewable
energy facility is in the public interest,the Minnesota Public Utilities Commission must now
consider"whether the resource plan helps the utility achieve the greenhouse gas reduction
goals under section 216H.02, the renewable energy standard under section 216B.1691, or
the solar energy standard under section 216B.1691, subdivision 2f." Amends Minn. Stat.
§216B.2422, subd.4. Effective date: August 1, 2013.
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"Buy-the-farm"changes
For transmission lines with capacities greater than 200kV, constructors have 60 days to
object to a landowner's exercise of his or her"buy-the-farm" option. Within 120 days of the
utility's objection, the district court with jurisdiction over the eminent domain proceeding
must hold a hearing to uphold or reject the utility's objection. The utility has the burden to
prove by a preponderance of the evidence that the property in question is not
commercially viable and therefore not eligible for the "buy-the-farm" option. (Thus the
utility would not be required to buy out the entire parcel rather than pay for an easement
across it.) If the court rejects the utility's objection,the utility must make a written offer to
acquire the land within 120 days. Amends Minn. Stat.§ 216E.12, subd.4. Effective date:
May 25, 2013.
From HF 338 by Rep. David Bly(DFL- Northfield) and SF 183 by Sen. Kevin Dahle
(DFL- Northfield).
This controversial provision went through various changes through the committee process
and was amended to a bill that never made it to final passage. In its initial form, the
legislation would also have severely limited the authority of municipalities to condemn
easements for any utility purposes. The provision that was ultimately enacted into law(as
summarized above) was attached to this Atkins/Dibble bill late on a Saturday night two days
before the end of session and quietly passed.
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UNSUCCESSFUL LEGISLATION
The following pages with blue headings summarize bills that were introduced or heard in
the Legislature this year but failed to proceed all the way to enactment. These bills could
be reintroduced during future legislative sessions, possibly affecting legislative debate and
even passing into law. Editorial comments appear as italicized text.
INTERIM RATES PROHIBITION
HF 158 Rep. Debra Hilstrom (DFL- Brooklyn Center)
SF 92 Sen. Chris Eaton (DFL- Brooklyn Center)
To prohibit the Minnesota Public Utilities Commission from authorizing the utilities it
regulates to charge interim rates, unless an "immediate and compelling necessity exists."
PRIVATE DATA PROTECTION
HF 183 Rep. Mary Liz Holberg(R- Lakeville)
SF 211 Sen. Scott Dibble (R-Minneapolis)
To require greater security of private data on individuals (such as municipal utility
customer data) and reporting of unauthorized access and to allow for immediate dismissal
and gross misdemeanor charges for public employees who access such data for
unauthorized purposes.
CURBS ON WIND POWER PRODUCTION
HF 190 Rep.Tim Kelly(R- Red Wing)
SF 203 Sen.Matt Schmit (DFL- Red Wing)
To allow counties to prohibit by zoning ordinance large wind energy conversion projects
and to allow the MPUC to modify or delay the implementation of a renewable energy
standard obligation if it finds there is a lack of available suitable sites for eligible
technology facilities, considering local land use restrictions.
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CURBS ON COMMUNITY BASED ENERGY DEVELOPMENT
HF 191 Rep.Tim Kelly(R- Red Wing)
SF 204 Sen. Matt Schmit(DFL- Red Wing)
To repeal the requirement that the MPUC must consider ways to encourage the aggregation
of C-BED projects; to repeal the flexibility that C-BED developers currently have to force
IOUs, G&Ts and municipal power agencies to negotiate a different PPA than the one
offered; to require all C-BED projects to re-certify their eligibility with the MPUC annually.
NUCLEAR WASTE FUND PAYMENTS CESSATION
HF 255 Rep.Joe Atkins (DFL- Inver Grove Heights)
SF 1233 Sen.James Metzen (DFL - South St. Paul)
To require Xcel to stop collecting payments from customers to send to the U.S.government
for the federal nuclear waste fund.
UP-FRONT CAPITAL EOUIPMENT TAX EXEMPTION
HF 288 Rep. Peter Fischer(DFL - Maplewood)
SF 95 Sen. Charles Wiger (DFL- Maplewood)
To apply the capital equipment sales tax exemption at the time of purchase. (Same as
below.)
UP-FRONT CAPITAL EOUIPMENT TAX EXEMPTION
HF 304 Rep. Mary Franson (R-Alexandria)
SF 309 Sen. Bill Ingebrigtsen (R-Alexandria)
To apply the capital equipment sales tax exemption at the time of purchase. (Same as
above.)
RENEWABLE ENERGY STANDARD REPEAL
HF 306 Rep. Michael Beard (R-Shakopee)
SF 97 Sen. Bill Ingebrigtsen (R-Alexandria)
To repeal the law currently requiring all municipal power agencies, G&Ts and IOUs to
furnish 25% renewable energy by 2025. (30% by 2020 for Xcel.)
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SCHOOL ENERGY CONSERVATION LOANS
HF 320 Rep.Jay McNamar (DFL- Elbow Lake)
SF 601 Sen. Kari Dziedzic (DFL- Minneapolis)
To establish an energy conservation revolving loan program for schools and authorize
school districts to repay such loans from the proceeds of tax levies without further voter
approval.
PERA SOCIAL SECURITY LEVELING OPTION REPEAL
HF 341 Rep. Michael Nelson (DFL- Brooklyn Park)
SF 275 Sen. Sandy Pappas (DFL-St. Paul)
To repeal the Social Security leveling option under the Public Employees Retirement
Association (PERA) program.
PERA SALARY DEFINITION MODIFICATION
HF 343 Rep. Michael Nelson (DFL- Brooklyn Park)
SF 273 Sen. Sandy Pappas (DFL-St. Paul)
To make various changes to the definition of"salary" in statutes governing the Public
Employees Retirement Association (PERA) program.
HYDROELECTRIC REVITALIZATION LOANS
HF 421 Rep. Duane Quam (R- Byron)
SF 691 Sen. David Senjem (R- Rochester)
To establish a hydroelectric revitalization revolving loan program and fund.
WASTEWATER RE-USE INCENTIVE
HF 436 Rep.Jean Wagenius (DFL- Minneapolis)
SF 1260 Sen. Bev Scalze (DFL- Little Canada)
To establish financial assistance priority for wastewater treatment projects that would
treat wastewater for reuse.
LAKE ZUMBRO DREDGING
HF 422 Rep. Duane Quam (R- Byron)
SF 37 Sen. David Senjem (R- Rochester)
To appropriate$2 million from the Clean Water Fund for dredging Lake Zumbro. The
initiative's purpose would be "to improve the recreational economy,water quality,and
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habitat and increase water storage capacity within the lake to achieve renewable energy
goals by optimizing long-term hydroelectric operations."
TRANSMISSION ROUTING STUDY BY LEC
HF 438 Rep.Jeff Howe (R- Rockville)
SF 454 Sen. Michelle Fischbach (R- Paynesville)
To require the Legislative Energy Commission (LEC) to study issues related to high-voltage
transmission line routing.
TRANSMISSION ADIOINING LAND VALUATION
HF 439 Rep. Jeff Howe (R- Rockville)
SF 674 Sen. Michelle Fischbach (R- Paynesville)
To require the MPUC when designating high-voltage transmission line routes to consider
the reduction in value of land adjoining and in close proximity to a proposed route.
UTILITY CROSSING FEE EXEMPTION
HF 520 Rep. David Dill (DFL- Crane Lake)
SF 333 Sen. David Tomassoni (DFL- Chisolm)
To exempt utilities from fees for crossing public lands when the crossing is on an existing
right-of-way of a public road.
STORMWATER PROGRAM FUNDING
HF 581 Rep. Rick Hansen (DFL- South St. Paul)
SF 436 Sen.James Metzen (DFL- South St. Paul)
To authorize the use of the Clean Water Fund to support local inflow and infiltration
reduction programs.
CO-OP OR MUNICIPAL COMMISSIONER ON MPUC
HF 643 Jeff Howe (R- Rockville)
SF 456 Sen. Michelle Fischbach (R- Paynesville)
To require that at least one commissioner on the Minnesota Public Utilities Commission
must live in the service territory of either an electric cooperative or a municipal electric
utility,beginning with the next appointment.
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TRANSMISSION ROUTE ALTERNATIVES
HF 655 Jeff Howe (R- Rockville)
SF 455 Sen. Michelle Fischbach (R- Paynesville)
To require that no proposed high-voltage transmission routes be designated as preferred,
but rather that all proposed routes be designated as alternatives.
GROUNDWATER SUSTAINABILITY
HF 683 Rep. Peter Fischer (DFL-Maplewood)
SF 243 Sen. Charles Wiger (DFL- Maplewood)
To require water utilities' demand reduction measures to include conservation rates,
unless the supplier knows the recharge rate for all groundwater sources being utilized.
The bill was amended to establish a Legislative Water Commission comprised of five
Senators and five Representatives and to allow the DNR to require permits for all water
users within designated groundwater management areas. The DNR would also be required
to develop recommendations on additional tools needed to fully implement the
groundwater sustainability requirements in statute and submit them to the environment
and natural resources committees.
STATE AND LOCAL GROUNDWATER DATA COMBINATION
HF 701 Rep.John Ward (DFL- Baxter)
SF 892 Sen. Matt Schmit (DFL- Red Wing)
To appropriate money from the Clean Water Fund to synthesize available groundwater
quantity and quality data from state agencies and political subdivisions.
PARTIAL EASEMENT LAWSUITS
HF 752 Rep. Debra Hilstrom (DFL- Brooklyn Center)
SF 480 Sen.Warren Limmer(R- Maple Grove)
To allow property owners to challenge that a portion of an easement is not being used for
the purpose for which it was taken. Current law allows challenges for whole easements
only.
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SOLAR ENERGY IOBS ACT
HF 773 Rep.Will Morgan (DFL- Burnsville)
SF 680 Sen. Chris Eaton (DFL - Brooklyn Center)
To do the following:
• establish a "Value of Solar" rate that utilities must pay to owners of solar
photovoltaic systems for their excess generation;
• establish a 10%by 2030 solar energy standard for all utilities;
• establish a renewable energy production incentive account and make certain solar
photovoltaic systems eligible to receive payments from it;
• require each utility to provide to the DER an assessment of the capacity available on
its distribution systems for interconnecting solar photovoltaic devices on or
adjacent to nonresidential buildings;
• require the Commerce Department to study: 1) the potential for solar installations
on public buildings, 2) the value of on-site energy storage, and 3) the potential value
of expanding solar thermal installations in commercial and residential buildings in
Minnesota.
(Some of these provisions were enacted. See Omnibus Energy bill above in New Laws.)
EXCESS CIP SPENDING ALLOCATION
HF 843 Rep. Pat Garofalo (R- Farmington)
No Senate companion bill
To allow utilities to keep two-thirds of any funds remaining under their CIP spending
requirement once their energy savings requirement is met if they contribute the other
third to a low-income home energy assistance program.
TREE FUNDING
HF 879 Rep.Andrew Falk(DFL- Murdock)
SF 1454 Sen. Matt Schmit (DFL- Red Wing)
To re-establish $5 million in annual funding from the Renewable Development Fund for the
Initiative for Renewable Energy and the Environment at the U of M. (Funding was
discontinued under legislation enacted in 2012.)
40%RENEWABLE ENERGY STANDARD
HF 880 Rep. Frank Hornstein (DFL-Minneapolis)
SF 763 Sen. Kevin Dahle (DFL- Northfield)
To increase the Rewnewable Energy Standard to 40% by 2030. The legislation would also
establish a solar energy standard of an unstated percentage of total sales, exempt
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renewable energy projects from the certificate of need requirement, require uniform
reporting of RES rate impacts (See Omnibus Energy bill above), limit the lives of Renewable
Energy Credits (RECs) to one year and limit REC trading to states that have RES
requirements comparable to Minnesota's and that allow the purchase of Minnesota-
generated RECs.
MUNICIPAL UTILITY TERRITORY EXTENSION COMPENSATION LIMIT
HF 945 Rep. Frank Hornstein (DFL- Minneapolis)
SF 911 Sen.Jeff Hayden (DFL- Minneapolis)
To remove"loss of revenue" as a calculation factor when determining compensation that a
municipal utility must pay when buying out another utility. (This bill was introduced in
support of threats by renewable energy advocates to municipalize Minneapolis electric
service.)
NET METERING SIZE LIMIT INCREASE
HF 955 Rep. Melissa Hortman (DFL- Brooklyn Park)
No Senate companion bill
To increase the customer facility size limit for net metering facilities from 40kW to
1,000kW for customers of investor-owned,municipal and cooperative utilities. (See Article
9 of the Omnibus Energy bill above.)
TELECOMMUNICATIONS REGULATION OVERHAUL
HF 985 Rep. Sheldon Johnson (DFL-St. Paul)
SF 584 Sen. Dan Sparks (DFL-Austin)
To completely restructure the state's regulatory framework for providing telephone, cable
and Internet services. (This bill would potentially prohibit public entities from owning any
telecommunications infrastructure except traditional telephone wire and restrict them to
providing only traditional telephone service.)
UTILITY DISCONNECTION REPORTING
HF 1001 Rep.John Ward (DFL- Baxter)
SF 903 Sen. Susan Kent(DFL-Woodbury)
To require electric and gas utilities,upon written request from cities in their service areas,
to make daily reports to the cities with the addresses and dates of any newly disconnected
properties throughout the year. (Currently,utilities must make such reports upon request
only between October 15 and April 15.)
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NUCLEAR WASTE STORAGE PAYMENT INCREASE
HF 1075 Rep. Andrew Falk (DFL - Murdock)
No Senate companion bill
To increase the amount Xcel pays into the Renewable Development Fund (RDF) each year
from $500,000 to$3 million per Prairie Island cask and from $350,000 to $3 million per
Monticello cask.
RES CREDIT FOR GEOTHERMAL ENERGY SAVINGS
HF 1079 Rep. John Benson (DFL - Minnetonka)
No Senate companion bill
To allow utilities to apply net electrical consumption reductions from geothermal heating
and cooling systems toward their Renewable Energy Standard requirements.
DISTRIBUTED GENERATION STUDY
HF 1093 Rep. Pat Garofalo (R- Farmington)
SF 972 Sen.Julie Rosen (R- Fairmont)
To require the Minnesota Public Utilities Commission to open a public docket for the
purpose of analyzing the costs and benefits in Minnesota of distributed solar generation
and strategies to maximize the benefits and minimize the costs.The analysis of distributed
solar generation must include,without limitation, the following:
(1) its use to address transmission constraints and strategies to optimize that use;
(2) its affect on grid reliability and strategies to improve that affect;
(3) cost-effective strategies for deployment;
(4) appropriate sizing of solar projects and economies of scale;
(5) the cost-effectiveness of competing solar technologies and trends for that
cost-effectiveness;
(6) comprehensive assessments of its direct and indirect costs and benefits;
(7) comparison of its costs and benefits to the cost and benefits of other strategies to
meet the state's electric generation needs; and
(8) the effect of a comparable expenditure on energy conservation on both the
demand and supply side.
MMUA testified in favor of this bill before the Senate Energy and Environment
Committee as an alternative to passing the omnibus energy bill.
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STANDARD RENEWABLE RATES
HF 1130 Rep.Andrew Falk(DFL- Murdock)
No Senate companion bill
To establish standard rates that all utilities would pay for electrical energy from various
types of renewable sources. In addition,the bill would establish a surcharge on all retail
electricity bills and a fund in which to collect the surcharge. From the fund, incentive
payments would be made to renewable electricity generators.
"SOLAR POWER COST REDUCTION ACT"
HF 1146 Rep. Will Morgan (DFL- Burnsville)
SF 1054 Sen. Chris Eaton (DFL- Brooklyn Center)
To allow non-utility companies to put photovoltaic panels on the homes or other property
of people, businesses, and public entities, sell those property owners the electrical output
of those devices and sell excess electricity to the local utility. (Third party ownership.)
The bill would also require the Minnesota Public Utilities Commission to establish new
interconnection standards and requirements for distributed generation under"at least four
categories that vary by nameplate capacity and level of complexity" that address, for each
category, the following issues:
1) applicable technical standards;
2) timelines with specific deadlines for all utility decisions and actions;
3) screening criteria;
4) insurance;
5) metering and monitoring;
6) facility testing,controls,and inspections;
7) permissible interconnection fees and charges that may be fixed or based on
approved formulas or rates; and
8) other issues determined by the commission.
The bill would also require all electric utilities to allow third-party owned community solar
generating facilities of up to 2 megawatts capacity onto their systems. The facilities would
sell subscriptions for the energy they produce and sell excess generation to the utility at
the utility's avoided cost for generation.
The bill would also prohibit contracts and homeowners association rules that restrict
property owners from installing solar energy systems. Parties that win lawsuits to enforce
this provision would be entitled for reimbursement of their attorney fees.
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LOCAL GOVERNMENTS ENERGY IMPROVEMENTS PROGRAM EXPANSION
HF 1147 Rep. Raymond Dehn (DFL- Minneapolis)
SF 1121 Sen. Scott Dibble (DFL- Minneapolis)
To make the state's Energy Improvements Program for Local Governments available for
financing renewable energy feasibility studies. Currently only energy efficiency
improvement projects are eligible for financing.
This program requires governments to place liens on properties in order to collect payments
from property taxes if the property owner defaults. After the law passed that created the
program, Fannie Mae and Freddie Mac issued guidance to banks stating that the banks should
not give mortgages in places where such type of lien might be taken on mortgaged properties.
Because of this, the program has not been utilized by local governments, but it remains in
statute.
NET METERING AND FEED-IN TARIFF
HF 1170 Rep.Andrew Falk(DFL- Murdock)
No Senate companion bill
To increase the maximum size of net-metering facilities to 105kW and require utilities to
pay net-metering customers a premium on top of the retail rate that comes from a
surcharge on customers who elect to purchase electricity from renewable resources.
DISTRIBUTED GENERATION INTERCONNECTION TARIFF CHANGES
HF 1174 Rep.Andrew Falk(DFL- Murdock)
SF 1362 Sen.John Marty (DFL - Roseville)
To require the Minnesota Public Utilities Commission to establish generic standards for
utility tariffs for the interconnection and parallel operation of distributed generation
projects, including cogeneration projects interconnected with investor-owned utilities'
distributions systems.
The tariff standards would have to:
• establish a procedure whereby,when the size of a distributed generation resource
causes power to flow intermittently into transmission facilities operated by the
Midwest Independent Systems Operator (MISO), a local load-serving utility may
coordinate with MISO to conduct the interconnection transmission system analysis
and transmission system usage reservations,as needed;
• include payments for ancillary services and other system benefits provided by a
distributed generation resource;
• reflect the savings that accrue to the public utility's distribution system resulting
from avoided demand charges and avoided transmission and transmission
infrastructure costs; and
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• recognize the role played by the regional wholesale electricity market and demand
side and storage resources as a source of standby power for a distributed energy
resource.
CIP SAVINGS GOAL SUNSET
HF 1271 Rep. Roger Erickson (DFL- Baudette)
SF 1358 Sen. Tom Saxhaug (DFL- Grand Rapids)
To repeal the requirement that utilities meet an annual energy savings goal, beginning in
2016. In the meantime,all utility infrastructure improvements would count toward a
utility's CIP savings goal regardless of whether it has met 1%savings on customer-side
improvements. The bill would also set compensation for all customer-generated electricity
at a rate equal to the utility's avoided cost.
GROUNDWATER CONFERENCE
HF 1373 Rep. Peter Fischer (DFL- Maplewood)
SF 988 Sen. Charles Wiger (DFL- Maplewood)
To appropriate money from the Clean Water Fund to pay for a metropolitan groundwater
management conference. (See Omnibus Environment, Natural Resources&Agriculture
Finance and Policy bill in New Laws above.)
UTILITY FRANCHISE AGREEMENTS
HF 1450 Rep. Raymond Dehn (DFL- Minneapolis)
SF 1490 Sen. Kari Dziedzic (DFL- Minneapolis)
To set requirements relating to franchise agreements between cities and non-municipal
utilities to promote renewable energy and energy efficiency.
COST OF SERVICE
HF 1515 Rep. Michael Beard (R-Shakopee)
SF 545 Sen. David Tomassoni (DFL- Chisolm)
To require the Minnesota Public Utilities Commission to consider the respective costs of
serving the separate classes of electric customers (residential, commercial, industrial) as a
primary factor in allocating revenue among customer classes in its rate cases.
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FARM TAP EXCAVATION NOTICE
HF 1564 Rep. John Petersburg (R-Waseca)
No Senate companion bill
To require utilities to mark"private facilities and farm taps" as they do other underground
facilities when people call the state excavation notice system ("Gopher State One Call") for
locates.
LARGE HYDROPOWER RENEWABLE ENERGY CREDIT
HF 1640 Rep. Peggy Scott (R-Andover)
SF 1488 Sen. Michelle Benson (R- Ham Lake)
To allow energy from all hydropower sources to count toward the state's Renewable
Energy Standard.
WATER APPROPRIATION PERMIT FEE INCREASE
HF 1679 Rep. Jean Wagenius (DFL- Minneapolis)
SF 1549 Sen. Bev Scalze (DFL- Little Canada)
To increase water appropriation permit fees to pay for regional groundwater resource
research. (See Omnibus Environment, Natural Resources &Agriculture Finance and Policy
bill in New Laws above.)
RECOVERED ENERGY GENERATION INCENTIVE
HF 1852 Rep.Tim Mahoney(DFL- St. Paul)
SF 1677 Sen. Dan Sparks (DFL-Austin)
To allow recovered energy generation to be eligible for the state's existing renewable
energy production incentive. Recovered energy generation is defined as: "electricity
generated by either: a) converting exhaust heat from engines or from manufacturing,
industrial, commercial, or institutional sites whose primary purpose is not the generation
of electricity; orb) reducing pressure in gas pipelines before gas is distributed through the
pipeline, provided the conversion of energy to electricity is achieved without using
additional fossil fuels."
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INDEX
House Files
HF 158 17 HF 780 22
HF 183 17 HF 843 22
HF 190 17 HF 854 13
HF 191 17 HF 879 22
HF 255 18 HF 880 22
HF 288 18 HF 945 22
HF 295 15 HF 955 23
HF 304 18 HF 956 2
HF 306 18 HF 976 12
HF 320 18 HF 985 23
HF 337 15 HF 1000 12
HF 338 14 HF 1001 23
HF 341 19 HF 1075 23
HF 343 19 HF 1079 24
HF 421 19 HF 1093 24
HF 422 19 HF 1130 24
HF 436 19 HF 1146 24
HF 438 19 HF 1147 25
HF 439 20 HF 1167 10
HF 469 15 HF 1170 26
HF 520 20 HF 1174 26
HF 567 10 HF 1205 16
HF 581 20 HF 1271 26
HF 623 15 HF 1301 11
HF 643 20 HF 1326 5
HF 655 20 HF 1373 27
HF 677 14 HF 1450 27
HF 682 13 HF 1515 27
HF 683 20 HF 1564 27
HF 701 21 HF 1640 27
HF 729 2 HF 1679 27
HF 752 21 HF 1852 28
HF 773 21
89
T
Senate Files
SF 37 19 SF 680 21
SF92 17 SF691 19
SF 95 18 SF 695 13
SF 97 18 SF 716 16
SF 104 15 SF 750 10
SF 161 15 SF 763 22
SF 183 14 SF 892 21
SF 203 17 SF 901 2
SF 204 17 SF 903 23
SF 211 17 SF 911 23
SF 243 20 SF 936 10
SF 244 13 SF 972 24
SF 273 19 SF 988 27
SF 275 19 SF 1011 12
SF 309 18 SF 1054 24
SF 329 15 SF 1104 5
SF 333 20 SF 1121 25
SF 436 20 SF 1135 11
SF 454 19 SF 1170 12
SF 455 20 SF 1233 18
SF 456 20 SF 1260 19
SF 480 21 SF 1358 26
SF 521 15 SF 1362 26
SF 545 27 SF 1454 22
SF 552 14 SF 1488 27
SF 584 23 SF 1490 27
SF 601 18 SF 1549 27
SF 642 22 SF 1677 28
SF 674 20
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Plymouth, MN 55447
www.mmua.org
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