6.1.A. ERMUSR 04-12-2016 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:
April 12, 2016 6.l a
SUBJECT:
Staff Updates—General Manager
DISCUSSION:
• The Board of Directors of the Minnesota Municipal Power Agency(MMPA)met on
March 22,2016 in Shakopee, Minnesota. The Board reviewed the progress of the 46 MW
distributed generation project in Shakopee. A press release is attached. It was reported
that the Conditional Use Permit for MMPA's 8 MW Buffalo solar project was approved
by Wright County. The Board also discussed a draft standard interconnection agreement
for distributed generation projects in Member communities.
• The MMUA Legislative Rally in St. Paul is scheduled for Tuesday, April 19. There will
be the day at the capitol followed by a reception for the legislators. This event was
changed from a Thursday to a Tuesday this year to help improve legislator attendance. If
any of the Commissioners are interested in attending,please let me know as soon as
possible.
• On March 16, I testified to the MN House Government Operations and Election Policy
Committee on House File 2718 to expand the ERMU Commission. This bill had been
authored by Representative Zerwas. I also testified to the MN Senate State and Local
Government Committee on the companion bill Senate File 2423 authored by Senator
Kiffmeyer. Both bills passed to the floor through their respective committees. Once those
bills pass on the House and Senate floors and become law I will provide and update to the
Commission and Council.
ATTACHMENT:
• Shakopee Energy Park Breaks Ground—April 8, 2016
• American Public Power Association 2015 Year in Review
• Minnesota Municipal Utilities Association Capitol Letter—March 18, 2016
• Minnesota Municipal Utilities Association Capitol Letter—March 25, 2016
• Minnesota Municipal Utilities Association Capitol Letter—April 1, 2016
• Minnesota Municipal Utilities Association Capitol Letter—April 8, 2016
yPOWERED BY
Page 1 of 1 NATURE
Reliable Public
Power Provider P OWERED To S ERV E
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IMIMPAt 220 South Sixth Street Suite 1300 Minneapolis, MN 55402
tel. 612.349.6868 fax. 612.349.6108 www.mmpa.org
Minnesota Municipal Power Agency
Construction Begins on MMPA's Shakopee Energy Park
MMPA distributed generation facility breaks ground.
April 8, 2016—A 46MW distributed generation power facility being built by the
Minnesota Municipal Power Agency will soon be rising on the eastern edge of Shakopee,
near Canterbury Park.
MMPA has broken ground on the six-acre site and expects the facility, fueled by
natural gas, to be operational next year. MMPA is the wholesale power supplier to
Shakopee Public Utilities, as well as 11 other municipal member communities.
MMPA's management partner, Avant Energy of Minneapolis, is managing the
facility's design and construction.
"MMPA is committed to adding local, efficient resources to the Agency's
generation portfolio," said Avant Energy's Vice President of Consulting and Development,
Kelsey Dillon.
"The Agency sees significant advantages to the project, including local
interconnection to avoid high voltage transmission, increased local reliability of supply and
supporting business development in our member communities," Dillon said.
John Crooks, Shakopee Public Utilities Manager and MMPA board member, said
his community is enthusiastic about the project.
"We very much like having this generating facility in Shakopee because we see
great advantage in having local production and distribution," Crooks said. "We're a
growing community and we're pleased to have this opportunity to offer increased electric
reliability to our customers."
Recent large, high-profile additions to Shakopee's business base include Amazon
and Shutterfly.
Crooks added that hot water recovered from the natural gas-fired reciprocating
engines will be another important economic development tool for the Shakopee area.
Further, he said, the facility will support the MMPA mission to provide competitively-
priced, reliable power to its customers.
The power from Shakopee Energy Park will become an important component of
MMPA's diversified portfolio of generation resources, which includes facilities like
Faribault Energy Park, fueled by natural gas and its newest renewable energy facilities —
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Oak Glen Wind Farm near Blooming Prairie and the Hometown BioEnergy facility in Le
Sueur.
"MMPA is committed to being a good neighbor in host communities," Crooks said.
"We are excited that in addition to power generation, the facility will offer energy education
for students and Shakopee residents — providing a community asset for years to come."
Other municipal utility members of MMPA are in Anoka, Arlington, Brownton,
Buffalo, Chaska, East Grand Forks, Elk River, Le Sueur, North St. Paul, Olivia, and
Winthrop.
More information about MMPA is available at www.mmpa.orq. Members include
municipal utilities in Anoka, Arlington, Brownton, Buffalo, Chaska, East Grand Forks, Elk
River, Le Sueur, North St. Paul, Olivia, Shakopee and Winthrop. MMPA's management
partner is Avant Energy, a Minneapolis-based energy management company and an
innovative supplier of energy project development, management, trading, consulting and
utility operations services. See more at www.avantenerqy.com.
Contact:
Bob Rumpza, Rumpza Consulting, 612-309-3971, bob(a�rumbzaconsultinb.com
207
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The American Public Power Association
: partners with its members to PROMOTE
• PUBLIC POWER, helping
community-owned utilities deliver
• superior services through joint advocacy,
. education,and collaboration.
•
. Stakeholders affirmed that APPA is strong
Shaping the future of public power to drive a new . and well-respected,with able and dedicated
• employees and a full array of advocacy,
era of COMMUNITY-OWNED electric service. : education,and information services.
LEADERSHIP
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SUE KELLY • DOUG HUNTER • BILL SLATON
President&CEO . Board Chair,2015–16 . Policy Makers Council Chair,2015
CEO&General Manager,Utah Associated • Board Member,Sacramento Municipal Utility
"We must tune into advances in technology, . Municipal Power Systems : District
changing customer preferences,and new .
lifestyles—in short,everything that is • "The better we as public power providers . "By gathering elected officials who really are
happening around us.We cannot take ; educate our customers,the more likely they : the ultimate decision makers for these utilities
for granted that customers will keep paying • are to turn to us first.Whether we provide • all over the country,our ability to step into a
the bills—they may soon be able to cut the . alternative forms of energy or remind them : Congressperson's office and to be able to
cord,at least partially,if they don't see : that they own their utility—we want to give • articulate what would best serve our constitu-
enough value in our services." . them reason to remain connected.Electricity is . ents I think is powerful—we're serving as
: the invisible fabric that holds our communities : they are serving."
• together." •
209
141W Amod•Ilon
2 015
LAR ill REVIEW
POWER WITH PURPOSE
APPA STRATEGIC PLAN, 2016 - 2018
APPA defined strategic initiatives to implement in 2016-2018:
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RAISE AWARENESS INCREASED RESEARCH AND
OF PUBLIC POWER FEDERAL DEVELOPMENT
Partner with members to expand the value and REGULATION Enhance,expand,and leverage electric utility
knowledge of public power utilities in their R&D and innovation projects and facilitate
communities. Protect and advance member interests in the public power's role as a driver of new
face of increases in energy policies and technology.
regulations that affect all areas of utility
PUBLIC POWER operations.
FORWARD WORKFORCE
Help members deal with new CYBER AND PLANNING
technologies and trends PHYSICALHelp members meet workforce
that are reshaping SECURITY challenges—attract and
relationships between retain diverse new talent,train
utilities and customers. PREPAREDNESS new employees,conduct
succession planning,and
Help members develop an"all-hazards" transfer knowledge from
approach to security,disaster preparation,and departing employees.
response.
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210
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2015
POWER IN PARTICIPATION ,, t �,
• •
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• .,,,E.
DISPELLING THE DARKNESS
To markAPPA's 75th anniversary,we rallied public power's collective support to deploy
6 solar suitcases through We Care Solar to help save the lives of mothers and newborns
in developing countries.
A portable solar suitcase includes solar panels,a battery,charge controller,outlets,and
LED lights to power medical equipment and communications.
•
•
GRASSROOTS ADVOCACY : MEMBERSHIP
614 public power representatives visited Washington,D.C.,for the 2015 Legislative Rally to tell 1
' their elected representatives about public power's contributions and needs. •
1 ,764
• all-time high in total membership
Public power mayors,city council members,and utility board members on the Policy Makers Council :
flew into Washington D.C.in June 2015 for 100+ meetings with members of Congress and : 1,407 225
federal agency staff. : public power utilities corporate
$82,851 • associates
was received through PowerPAC contributions and spent to support members of •
Congress: • 60
• Senate Republicans $21,250 • House Republicans $21,250 • joint action agencies 72
• Senate Democrats $15,500 • House Democrats $17,750 and state/regional other entities
• associations
: 00101thillli441
DIALOGUE WITH PEERS :
39 listservs with 11,100 subscribers : HOUSE
New in 2015 : CALLS
M 111111110
• Sue Kelly made 29 visits to members,
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....4., V :IMMIIIIIIIIIIIIIIIIIIII meetings,and industry events.Other APPA staff
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• share expertise and hear about member
DRONES ELECTRIC VEHICLES RTO MARKETS UTILITY GOVERNANCE • concerns.
211
20115
POWER IN ADVOCACY ENERGY BILLS
Comprehensive,bipartisan energy policy bills
considered in the House and Senate for the first
time in 10 years,and supported by APPA:
GRID SECURITY:
• The North American Energy Securi-
ty and Infrastructure Act(H.R.8)
VICTORIES IN CONGRESS passed the House by a vote of 249 to 174
and includes several provisions important to
On Dec.4,President Obama signed into law the Fixing America's Surface public power.APPA was engaged and
Transportation Act of 2015,which included provisions APPA long fought for. provided testimony—by Sue Kelly and
• Limited override of state sunshine laws to protect sensitive energy Lakeland Electric's General Manager Joel
Ivy.
infrastructure information.
• No environmental fines for running a generator to avoid a reliability • The Energy Policy Modernization
Act of 2015(S.2012)passed the Senate
emergency per a Department of Energy order.
Energy and Natural Resources Committee in
• Utilities and federal agencies allowed to share critical information 2015.Championed by Senator Lisa
in emergencies. Murkowski(R-Alaska)and Senator Maria
Cantwell(D-Wash.),the bill addresses
On Dec.18,President Obama signed a year-end tax and omnibus spending bill efficiency,infrastructure,supply,account-
that included the Cybersecurity Act of 2015,which ability,and conservation reauthorization.
• Provides a framework to facilitate voluntary information sharing • Sue Kelly testified in May before the Senate
between critical infrastructure sectors,including public power,and with the Energy and Natural Resources Committee
federal government. and emphasized the need to reform
• Directs the Department of Homeland Security to establish a portal to share mandatory capachydropower licensing,markets,
cyber threats and defenses and exempts public power utilities streamline nb
and avoid a federal renewable
from disclosing this information under state sunshine laws. electricity standard.
ELECTRICITY
MARKETS
APPA was active on the issue of self- FERC chairman Norman Bay issued two
supply—the right of public power utilities important dissents in FERC orders on PJM's
to build their own generation or enter bilateral capacity performance proposals,expressing
contracts to buy wholesale electricity in RTOs strong concerns about higher prices and
with mandatory capacity markets. customer impacts.
• "PJM's Capacity Performance Tariff
APPA drummed up opposition to a legislative APPA released two reports in 2015: Changes:Estimated Impact on the Cost of
proposal—known as'capacity performance'
—that would lock in high electricity rates for ■ "Capacity Markets Do Not lncent New Capacity"estimated that PJM's capacity
Generation"showed that only 4.8%of performance package of changes would
consumers in mandatory capacity market cost consumers$7.3 billion throw h
regions,and had it modified. new generation in 2014 was built just for 9
sale into a mandatory capacity market. 2019.
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2015 , .4.
MOE
Min
POWER IN ADVOCACY •••o•••
MI."
NUM
CLEAN POWER PLAN _
• The Clean Power Plan final rule that the EPA • Members of Congress introduced
maxi MIME MINK . issued in 2015 contained many positive disapproval resolutions under the Congres-
allal== •• changes from the proposed rule,and reflected sional Review Act to overturn the EPA's
inTIN • some APPA recommendations.But it still tries rules.
om_ . to do too much too fast in many states.
• In response to the Federal Plan Require-
: The final rule could create stranded costs and ments and Model Trading Rules that the
• curtail the remaining useful life of electric EPA proposed to implement the Clean
DISTRIBUTED . generating units.This could increase operating Power Plan,APPA said the EPA should
costs,add new infrastructure costs,and raise adopt rate and mass based plans,
GENERATION • electricity bills for millions of consumers. establish price and reliability safety valves,
and other measures to make the plan
APPA worked with congressional offices to : • APPA and the Utility Air Regulatory Group easier to comply with.
• Emphasize that distributed generation : petitioned the U.S.Court of Appeals for the
issues must be left to state and local • D.C.Circuit to review the EPA's Clean Power Public power utilities continue to
• Plan final rule,and asked for a stay of the reduce greenhouse gas emissions
decision making. : rule during review, through greater use of renewable,nuclear,and
• Raise awareness about public power's • On Feb.9,2016 the Supreme Court granted other low-and non-emitting generation
increasing distributed generation offerings. . motions filed by states and industry— sources,and increased energy efficiency and
• Assert that federal interference with public • including APPA—to put the final rule on demand response programs.
power decisions is unwarranted. . hold while the courts hear legal challenges.
ICI BONDS
•
Municipal bonds have funded more than$1.9 trillion worth .
of infrastructure construction in communities across America. •
•
APPA rallied to protect public power customers from :
rate increases that would result from a change in tax-exempt •
bond funding. .
APPA joined forces with the Municipal Bonds for America Coalition in comments : HYDRO
that warned against repealing or altering the tax exemption for municipal bonds.
: LICENSING
APPA supported the Obama Administration's proposals to simplify some federal tax laws relating .
to municipal bonds and suggested further changes to make it easier for public power utilities to • A federal appeals court ruled that the
invest. : municipal preference for hydroelec-
• tric licensing under the Federal Power Act
: does not have a geographic limitation.The
• decision overturned FERC orders built on such
. limitation.APPA supported affected members
. litigating this case.
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AMAr AMAMI
'Association
2015
YEAR IN REVI.E.V11
POWER IN OPERATIONS
GRID SECURITY
APPA played a key role in the Electricity
Subsector Coordinating Council,a
INNOVATION high-powered collaboration of federal govern-
ment agencies and the electricity industry to
F 0 R THE PUBLIC GOOD help address cyber and physical security
challenges and recover from disaster.
APPA's DEED program,which funds research and demonstration
projects,turned 35 in 2015.Membership has grown by more Public power was at the North American Electric
than 50 percent in 10 years.Today,906 public power utilities Reliability Corporation's GridEx III,a major grid
participate,pooling resources and ideas that help move public security and emergency response
power—and the electricity industry—forward. tabletop exercise involving electricity
industry executives and senior government
In 2015,DEED awarded a total of$597,912 in 16 utility grants officials.
and$91 X000 in 26 student scholarships,internships,and grants.
A 5-year cooperative agreement inked with the
Reports on 622 completed projects are available in the DEED U.S.Department of Energy gives APPA access
Project Database,a rich source of new ideas,best practices,and to up to$1 million to help its members secure
lessons learned. the energy infrastructure against all hazards,
reduce the impact from disruptive events,and
support recovery.
461 •
•
•
•
•
•
•
SAFETY MANUAL : TRACKING & : RP3: RELIABLE
REVISIONS • BENCHMARKING : PUBLIC POWER
APPA reconvened the Safety Manual Revision • 343 utilities are using APPA's eReliability • PROVIDER
Task Force,with utilities and other users,to • Tracker,to track outage data and causes and
oversee development of the 16th edition of the • benchmark against national averages.The 219 utilities are now designated Reliable
APPA Safety Manual in 2016. • tracker's"squirrel index"attracted national : Public Power Providers for excellence in
• media attention in 2015. • reliability,safety,workforce development,and
• • system improvement.
•• APPA got its first patent for"Tracking and •
• Analyzing Service Outages." ; APPA's RP3 program shares operational best
• practices with applying utilities,helping them
; achieve higher performance over time.
214
AMA
2015
POWER IN EDUCATION
i
In 2015,APPA offered live,virtual,and at-your-site training events to help Inn 1: :1•1
public power staff,leaders,and policymakers 0114/1r
• Gain new knowledge and skills.
• Learn from the experts.
• Take away actionable ideas and practical tips and resources.
• Keep up with the latest technologies and regulations.
APPA on the road:
■ Network with peers from same-size utilities.
4 87 utility staff trained"in-house"at their
utility through 25 custom events.
7,900 3,500 Nearly
public power professionals trained—through members attended webinars. rly 3 00
live and online events—on electric utility 55 key influencers attended the APPA National
leadership,governance,operations, Conference in Minneapolis,Minnesota in June
administration,compliance,and policy issues. 2015.
NEW RESOURCES . RATE DESIGN FOR ; PUBLIC POWER FORWARD
• DISTRIBUTED GENERATION • A Public Power magazine issue explores how
DEMAND SIDE MANAGEMENT •• A report on rate design options for solar and ; public power utilities are leveraging new trends
RESOURCES : other distributed generation,using public : and technologies in energy storage,microgrids,
• power utility case studies. , big data,energy efficiency,and more.
APPA DSM Research HQ,a library of case • ;
studies,webinars,and white papers to help ; COMMUNITY SOLAR CASE ; STORM COMMUNICATIONS
utilities create and market demand side • STUDIES AND INFOGRAPHICS • GUIDE
management programs,developed in
partnership with E Source. ; A special issue of Public Power magazine ; A guide to effective communication before,
• featuring community solar projects by public • during,and after a storm.Includes dos and
ENERGY EFFICIENCY • power systems,rate design,customer don'ts,sample press releases and social media
BENCHMARKING ; perspectives,and infographics. • posts,and checklists.
•
A DEED project produced the interactive DSM . DISTRIBUTED GENERATION • SMART GRID ESSENTIALS
Benchmarker to help public power utilities ; GUIDEBOOK
compare energy efficiency spending and ; Two smart grid publications featuring profiles
savings. • Overview of major distributed generation • of the 32 public power projects funded by
technologies and value propositions and their . federal smart grid investment grants with
impact on utility rate design,system planning, ; lessons learned.
• operations,and customer service, •
•
215
•Publk Power
2015
POWER IN AWARENESS
PUBLIC AWARENESS
1 .3 million SOCIAL SUCCESS
page views on www.PublicPower.org Nearly 20,000
1 r 000 page views on the CEO Blog and Experts Blog
trade and mainstream media mentions including in 660,047
• USA Today impressions on Twitter
• The Washington Post
• Seattle Times 271 976
Public power utilities across America marked Public Power Week, impressions on Facebook
October 4-10,2015,through community events,interactive education
offerings,media outreach,and employee recognition.We saw increased
184 607
Facebook and Twitter activity to engage customers. r
impressions on Linkedln
In 2015,members used APPA's new animated video on the value of
public power;comic strips on energy efficiency,community solar, ) Twitter engagement up by
safety,the future of electricity and career opportunities in public power; 11
O over 2014
and book-marks and temporary tattoos with energy efficiency 352%
messages for school students.
NEWS COVERAGE
700+ Trending topics, in-depth coverage
• Battery storage • LED streetlighting
articles in • Clean Power Plan ■ Leadership&management
• Public Power Daily:7,200 subscribers, • Community solar ■ Nuclear
5 issues a week
• Cybersecurity ■ Public communication
• Public Power Weekly:7,700 subscribers,
• Electricity markets I Safety
1 issue a week
• Public Power Magazine:13,728 subscribers, ■ Energy efficiency ■ Smart meters
6 issues a year • Federal policy • Utility of the future
■ Infrastructure
216
AM
2015
POWER IN NUMBERS
2015 APPA REVENUE 2015 APPA EXPENSES
SOURCES BY PROGRAM
Other Products
and Programs� Policy Analysis
7 o Engineering
° 11/ 16%
Education
Services
16/o Media&
Communications
15%
Membership Dues
75% Member
Services
12% Conferences
° &Meetings
Government 30%
Relations
16%
TOTAL REVENUE TOTAL EXPENSES
$19,754,821 $17,768,915
(does not include pension and
post-retirement health benefits)
Note:Unaudited financials
217
ARM
2015
PUBLIC POWER KEY STATS AND FACTS
(based on 2014 data from the Energy Information Administration)
PUBLIC POWER =
LOCAL CONTROL + LOW RATES + HIGH RELIABILITY
2,012 public power utilities provide electricity to 48 million people in 49 states—all except Hawaii—and 4 U.S.territories
PUBLIC POWER COSTS LESS
National average retail rates(cents per kilowatt hour)
Residential Commercial Industrial Total
PUBLIC POWER UTILITIES 11 .4 10.7 7.3 10.1
RURAL ELECTRIC COOPERATIVES 11 .6 10.7 7.4 10.4
tr- INVESTOR-OWNED UTILITIES 13.1 11 .1 7.3 10.8
PUBLIC POWER'S SHARE OF THE U.S. ELECTRICITY MARKET
10% 10% 16%
OF GENERATION OF TRANSMISSION OF DISTRIBUTION
218
A WA
2015:
PUBLIC POWER KEY STATS AND FACTS
(based on 2014 data from the Energy Information Administration)
ELECTRICITY DISTRIBUTED 39.5%
BY PUBLIC POWER IS GENERATED FROM natural gas
4001 17.3% 7.6%
hydropower nuclear
•
Public power systems
/ own 2/3 of their
28% ' �/�� 5.4% generation and buy
coal 2.2% oil 1/3.
non-hydro renewables
and other sources
PUBLIC POWER SYSTEMS ARE POWERFUL
ECONOMIC ENGINES THAT...
Employ approximately 93,000 people Earn $58 billion in revenue Give more than$1 billion back to
annually the communities they serve
igi,,.
tar
11. @PublicPowerOrg #PublicPower
219
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6,4„, , n •
Vol. 15, No. 1 March 18, 2016
MMUA CIP Bill Heard in House
On Wednesday, the House Job Growth and Energy Affordability Committee heard HF 2486,
MMUA's bill to improve to the Conservation Improvement Program (CIP). Authored by Rep.
Dave Baker (R-Willmar), a former WMU commissioner, the bill aims to help the municipal
utilities struggling to meet the energy-savings goal under CIP.
Under the current CIP statute, the Division of Energy Resources (DER) is authorized to
approve a modified goal for a utility, based on the utility's historic conservation efforts, load
growth, customer classes, potential studies, or other factors. However, the DER has not been
approving utility plans under 1.5%Given that municipal utilities are locally-regulated
entities, the bill would make modified goals submitted by municipal utilities automatically
approved.
The bill also allows electric utility infrastructure projects to be used to satisfy the CIP goal
without first having to meet the current 1% customer-side savings threshold. Since these
demand-side projects require significant planning and investment, they are often forgone by
municipal utilities due to inability or uncertainty of first achieving 1% customer savings.
MMUA Government Relations Director Bill Black explained that a "one-size fits all"
conservation program doesn't work for Minnesota's 125 diverse municipal utilities, which
have very different customer makeup, load characteristics, and savings potential. Of the
municipal utilities reporting to the DER, only 30-40% annually achieved the 1.5% energy-
savings goal according to data reported for 2011-14. About 2/3 of reporting utilities meet the
annual 1.5% spending goal.
Several MMUA members were on hand to support the legislation. Willmar Municipal
Utilities'Wes Hompe explained to the committee that WMU's early conservation efforts prior
to the implementation of the 1.5% annual savings goal make that goal difficult to achieve.
Wendy Meyer of Mountain Lake explained that their small utility has limited ability to meet
the annual savings goal due to their low commercial and industrial loads. Brian Frandle of
North St. Paul was also on hand to answer committee member questions.
DER Director Bill Grant expressed concern that municipal utilities would propose a 0% goal
if this bill went into effect, and therefore had concerns. Asked about his position on the utility
infrastructure projects, he said DER didn't have a formal position but it was a "step in the
right direction."
Fresh Energy acknowledged that each utility in the state is unique in its potential, but
believes the 1.5% savings goal is a useful benchmark. They expressed their desire to work
with the municipal utilities and noted their past support for utility infrastructure projects.
The Center for Energy and the Environment (CEE) said the CIP goals have benefited the
220
state, but they believe it would be useful to take another look at the program. They thought
there would be opportunities to work on the infrastructure project provisions of the bill.
DFL Representatives Hortman and Simonson also expressed willingness to work with Rep.
Baker on a bill that could get bipartisan support.
The bill was laid over for possible inclusion in a future omnibus bill. MMUA Government
Relations staff will continue to work with Rep. Baker and other stakeholders to move forward
with CIP improvements that will benefit our members.
Mora Wastewater Treatment Tax Exemption
On Thursday, legislation allowing the City of Mora to receive a refundable tax credit for sales
taxes paid on construction materials for its wastewater treatment facility was heard in the
Senate Tax Committee. SF 829 is authored by Sen. Tony Lourey (DFL-Kerrick).
Mora City Administrator Joel Dhien explained that the new $5.3 million facility is currently
under construction. Although the City could have received a sales tax exemption for
construction materials had they purchased them separately from the contractor, separating
labor and materials would add to the overall project costs. Concerns with material storage
and liability also played into the decision to use traditional labor/material construction
contracting. A refund of the construction materials sales tax would save the City around
$200,000.
This issue was also discussed in the 2015 Legislative Session, and the House included in its
tax bill a provision to allow all cities to apply for a refundable credit of sales taxes paid on
construction material (an initiative which has been strongly supported by MMUA). Senate
Tax Char Rod Skoe (DFL- Clearbrook) explained that the Senate is aware of the issue and is
"checking to see if there is a mechanism to streamline the process" of cities accessing the
construction materials sales tax exemption. The Senate's concern is that contractors would
over-purchase materials in an effort to use the cities' tax exemption. Skoe noted that the
issue would be discussed with the House in the tax conference committee but acknowledged
Mora would need a retroactive solution since their project is already underway.
MMUA Government Relations staff will continue to monitor the construction materials sales
tax discussion and advocate for its inclusion in a final tax bill.
Railroad Crossing Fee Heads to Senate Floor (Again)
On Thursday, legislation to establish a uniform $750 fee for utilities crossing railroad right-
of-way was discussed in the Senate Environment and Energy Committee. The bill (SF 877)
had advanced to the Senate floor during the 2015 Legislative Session, but never received a
vote, so was procedurally returned to committee. A favorable amendment for utilities was
adopted by the committee and makes the bill consistent with a law that was just passed in
South Dakota. Representatives from MREA and the MN Telecom Alliance highlighted the
inconsistent and high fees that utilities were being charged to cross railroad right-of-way.
The MN Regional Railroad Association and Union Pacific expressed their opposition.
The bill was again passed to the Senate floor.
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Non-Flushable Wipes Bill Moves Forward
The Senate Environment and Energy Committee discussed legislation concerning the
damages non-flushable personal wipes (which are sometimes labeled as"flushable"or"septic
safe") cause to municipal wastewater treatment systems. SF 2525, authored by Sen. Vicki
Jensen (DFL-Owatonna) would require non-flushable personal wipes to be labeled "Do Not
Flush." This bill is an initiative of the Minnesota Pollution Control Agency (MPCA), which
highlighted the monetary costs these wipes are imposing on municipal wastewater systems.
They noted that the public needs to be educated that the products should not be flushed.
This legislation is also supported by several organizations,including the League of Minnesota
Cities (LMC), Coalition of Greater Minnesota Cities, and MMUA. The LMC noted that this
bill would help to stem costly wastewater facility repairs and upgrades to the benefit of
municipal ratepayers, property tax payers, and state public finance agencies.
The Minnesota Chamber of Commerce expressed their concern with a state-specific
regulation on product marketing and believed public education is a better approach. INDA
(the wipes industry national association) noted that only 7% of wipes are flush-friendly and
made of biodegradable material. They also agreed that education is the solution and they are
working on universal product symbols to indicate flushable/non-flushable.
The bill was re-referred to the Commerce Committee.
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7‘e eajzzeoe zerteet
Af\k-
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Vol. 15, No. 2 March 25, 2016
Broadband Funding and Statewide Goals Bills Move Forward
On Monday,the Senate Jobs,Agriculture, and Rural Development Committee heard two bills
authored by Sen. Matt Schmit (DFL-Red Wing), dealing with rural broadband development.
SF 2447 provides a $100 million appropriation to the Border-to-Border Broadband Program.
SF 2448 would update Minnesota's broadband goals to state that by 2022, all homes and
businesses in the state should have access to broadband at speeds of 25 Mbps download and
3 Mbps download. By 2026, all Minnesota homes and businesses should have access to
broadband speeds of 100 Mbps down and 20 Mbps up.
The definition of "unserved" in the Minnesota's broadband statute is tied to the FCC
definition, which is 25 Mbps down and 3 Mbps up, and is not changed by this bill. However,
the bill changes the definition of"underserved"to homes or businesses lacking access to 100
mbps down and 20 Mbps up.
The issue of the definition of "underserved" was the biggest point of contention with the
Minnesota Telecom Alliance and Minnesota Cable Communications Association, saying that
grants should be focused on areas that are actually underserved at levels below 10 Mbps
download and 1 Mbps upload. Committee members suggested that Sen. Schmit continue to
work with the providers on this issue, and he agreed to do so.
SF 2447 was re-referred to the Senate Finance Committee. SF 2448 was passed to the Senate
floor.
In the House, HF 2381 would make the same changes as the two Senate bills combined and
was heard in the House Jobs Growth and Energy Affordability Committee on Wednesday. In
the House committee, however, a controversial change in the definition of"underserved" did
pass as an amendment by bill author Rep. Dave Baker (R-Willmar). The House bill now
defines "underserved" as below 10 Mbps up and 1 Mbps down. In testimony, the chair of the
Governor's Broadband Task Force opposed the change calling it "a huge step backward."
The House committee did not vote on HF 2381 but held the bill over for possible inclusion in
an omnibus bill to pass later.
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Non-Flushable Wipes Bill Advances
The bill to provide for the proper labeling of non-flushable wipes(SF 2525)received its second
hearing on Wednesday, this time in the Senate Commerce Committee. The bill aims to
address the problems and expenses that these wipes cause to municipal wastewater facilities
when flushed.
The bill author, Sen. Vicki Jensen (DFL-Owatonna) worked on an amendment with the
MPCA, League of Minnesota Cities, MMUA and industry interests to clarify the definition of
flushability and the labeling requirements. The amendment was adopted and the bill
received unanimous support. SF 2525 was re-referred to the Senate Judiciary Committee,
because the legislation includes a penalty for violations of the labeling requirement.
The progress of this bill is notable. Nationally, this is furthest that any legislation to require
the labeling of non-flushable wipes has advanced through the legislative process.
Regulatory Certainty Discussed in House Committee
On Thursday, the House Environment and Natural Resources Committee discussed
legislation to offer municipalities and industrial permit holders regulatory certainty if they
choose to voluntarily install biological nutrient removal systems to reduce nitrogen levels in
wastewater.
HF 3409 is authored by Rep. Dan Fabian (R-Roseau) and is an initiative of the MPCA. The
agency explained that many wastewater systems are currently in need of upgrades to meet
the recently-adopted phosphorus standard, and a nitrogen standard will be coming down the
pike in the future. If a city or industrial permit holder is building a facility to comply with
the phosphorus standard, they could voluntarily choose to build for nitrogen (which is site-
specific) and the MPCA would not give the permit holder a more stringent standard for
nitrogen throughout the useful life of the equipment.
Under the bill, the MPCA would determine whether or not to provide regulatory certainty
before the permit is approved and the terms of the agreement would become part of the
permit. Regulatory certainty would extend for the useful life of the system, up to 20 years.
The MPCA stated this proposal would provide an environmental benefit by starting to remove
nitrogen early, and provide a cost benefit to cities by building systems now when costs are
cheaper. Plus, the Governor is proposing significant bonding support for municipal
wastewater system upgrades such as these.
The League of Minnesota Cities offered their support for the legislation. The Coalition of
Greater Minnesota Cities expressed conceptual support,but wanted to continue working with
the author to ensure that the EPA couldn't undo the regulatory certainty provided by the
MPCA. MMUA has participated with limited legislative drafting assistance to MPCA and
discussions with the other municipal organizations.
The bill was laid over for possible inclusion in an omnibus.
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Vol. 15, No. 4 April 1, 2016
Railroad Crossing Fees Bill Advances
On Wednesday, the House Job Growth and Energy Affordability Committee heard HF 963,
which would establish a standard $750 fee for utility lines crossing railroad right-of-way.
MREA and the Minnesota Telecom Alliance explained the excessive crossing fees that
railroads have been imposing on their members. Negotiating these fees down has led to
additional legal expenses and project delays. The Minnesota Regional Railroad Association
and Union Pacific expressed their opposition to the legislation, stating there is already an
appeals process in place and utility crossings diminish the value of railroad property.
Chair Garofalo and several GOP committee members expressed their hope that a non-
legislative solution could be reached. The bill was passed and re-referred to the House
Transportation Policy and Finance Committee. The Senate companion bill is awaiting its
final hearing in the Finance Committee.
Small Wireless Pole Attachments Bill is Overhauled
Cities, towns and counties should be required to provide easier access to their streetlights,
traffic signals, road signs and utility poles for the attachment of intermediate cell phone
antennae, according to Verizon Wireless at a hearing of HF 3554 before the House
Government Operations and Elections Policy Committee Wednesday. No they shouldn't,
testified the League of Minnesota Cities. And MMUA testified that the legislation lacks input
from municipal utilities with expertise in utility pole attachments and streetlights. At a
hearing the next day, the committee passed instead a bill to set up a task force with local
government and industry representatives to identify and address issues brought forward by
the testifiers. The bill goes next to the House Commerce Committee.
Non-Flushable Wipes Bill Advances
Legislation to require the labeling of non-flushable personal wipes cleared its final Senate
committee on Thursday. While considering SF 2525, the Senate Judiciary Committee
modified the penalties for violations of the labeling requirements to be more consistent with
existing statutes on plastic bag and container labeling. The modifying amendment provides
that violations will subject the manufacturer to a civil penalty of$100 for each pre-packaged
saleable unit, up to $5,000, and allows for injunction by the Attorney General. Bill
supporters, including the MPCA, League of Minnesota Cities, and MMUA, were pleased with
these efforts to strengthen the bill.
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The Judiciary Committee also discussed the possibility of adding wholesalers and
distributors to those subject to violations, but did not adopt such an amendment since it was
outside of their committee's jurisdiction. Several members suggested that the bill author,
Sen. Vicki Jensen (DFL-Owatonna), offer that amendment on the Senate floor.
The bill now awaits debate on the Senate floor.
Regulatory Certainty Passes to Senate Floor
On Thursday, the Senate Environment and Energy Committee passed SF 3272, the
legislation that would provide municipal wastewater facilities with "regulatory certainty" if
they voluntarily install biological nutrient removal systems to remove nitrogen. The MPCA,
which is proposing this bill, says that a nitrogen standard will be coming in the future and
many municipal wastewater facilities currently need to be upgraded to comply with
phosphorus standards. If a city chose to voluntarily build for nitrogen at the same time they
build for phosphorus, the MPCA would not make the facilities' nitrogen or phosphorus
standard more stringent during the useful life of the equipment or up to 20 years.
The LMC testified that this bill combined with the Governor's $167 million bonding proposal
for water and wastewater improvements,increased project caps, and increased state matches
for these projects, provides great opportunities for cities wanting to go above and beyond.
MMUA has also been offering assistance and support to the MPCA.
The bill now awaits debate on the Senate floor. The House companion was discussed and
laid over in committee last week.
Other Bills of Interest
HF 3074, authored by Rep. Chris Swedzinski(R-Ghent),would place additional requirements
on Xcel's community solar garden program. Developers' promotional materials would have
to include information such as an estimate of the annual generation and estimated payback
timeframe. Developers would also have to establish escrows to pay back subscribers for
potential losses and provide mechanisms for transferring subscriptions. Contracts would
have to contain a warranty for a minimum level of energy to be delivered to the subscriber.
The bill was discussed by the House Job Growth and Energy Affordability Committee on
Wednesday. The Attorney General's office said this bill included many consumer protection
recommendations it provided to the Public Utilities Commission that the PUC did not adopt.
Numerous developers and clean energy advocates spoke against the bill. It was laid over for
possible inclusion in an omnibus.
HF 3508, authored by Rep. Dan Fabian (R-Roseau), would change the selection of Public
Utilities Commission members from being appointed by the Governor to being elected from
each congressional district. The bill was discussed in House Government Operations
Committee and re-referred to the Job Growth and Energy Affordability Committee, but is
unlikely to be passed this session.
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Vol. 15, No. 5 April 8, 2016
CHP/ Cogeneration Legislation Moves (Erratically)
On Thursday, the House Committee on Job Growth and Energy Affordability heard HF 813
authored by Rep. Bob Loonan (R-Shakopee). The legislation would expand the exemption
from the state's greenhouse gas emission offset requirement to include combined heat and
power and cogeneration facilities of all sizes. Currently they're exempt from having to offset
their emissions only if they're under 50 MW in capacity. MMUA and multiple municipal
power agencies worked to convince the bill author that the law change would create a
dangerous situation for municipal utilities with large industrial customers. The bill,
sponsored by Flint Hills Resources, was added to the committee's agenda so soon before the
hearing that municipal opponents could not secure passage of an amendment to exclude
CHP/cogeneration facilities located in municipal service territories. However, as is common,
they did secure commitment from the bill author that he would amend his bill during debate
on the House floor to address their concerns.
Complimentary lobbying efforts by the same folks on the other side of the street played a
major role in "killing" the bill (SF 1357) in the Senate. Although a bill can never really said
to be "dead" at the Capitol.
Railroad Crossing Fees Bill Keeps Moving
On Wednesday, the House Transportation Policy and Finance Committee discussed HF 963,
the legislation to provide a uniform $750 fee for utility lines crossing railroad right-of-way.
As in past committee hearings, MREA and telecom interests expressed their support for the
measure, outlining the high fees being proposed by the railroads and the project delays that
result from negotiating them down.
Again, the railroads expressed their opposition, stating that a $750 fee does not cover their
costs and like any landowner, they are entitled to just compensation for the use of their land.
They also suggested utility lines are a massive liability and present safety concerns. Several
GOP committee members suggested to the railroads that they"tone down their rhetoric" and
"pick their battles."
On a bipartisan basis, the committee suggested that the stakeholders work together to find
a non-legislative solution to this problem before the session ends. MREA noted that this has
been an ongoing negotiation for over 20 years,but they would continue the conversation. The
bill was re-referred to the Ways and Means Committee.
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Flushable Wipes Bill Gets Stuck in House Committee
On Thursday, the House Environment and Natural Resources Committee heard HF 2842,
the House version of the legislation requiring non-flushable personal wipes to be labeled
accordingly. The chief author of the bill is the committee's chair, Rep. Denny McNamara (R-
Hastings). After testimony in support of the bill from the MPCA, LMC, and city officials from
Hastings, and Mahtomedi and a brief period of questions from committee members, Chair
McNamara moved that the bill be re-referred to the House Commerce Committee. Rep. Rick
Hansen (DFL- South St. Paul) then requested a roll call vote. McNamara then laid the bill
over and a vote was not taken. Despite intense lobbying efforts of bill proponents requesting
that legislators not play politics with this bill and have a vote before the committee
adjourned, this did not occur. With the committee not meeting again before Friday's
deadline, the bill is essentially dead in the House.
However, the MPCA still plans to push for a floor vote on the Senate companion (SF 2525),
which has cleared all committees. There may also be opportunities to attach the wipes
legislation to other bills moving in the House. Plus, the further this legislation progresses in
Minnesota,the more pressure there is on the wipes manufacturers to implement this labeling
on a national basis.
Regulatory Certainty Moves to Floor
On Tuesday, the House Environment and Natural Resources passed the regulatory certainty
bill (HF 3409) to the House floor. As a reminder, this bill is an initiative of the MPCA that
would provide a voluntary option for municipalities and industrial permit holders to treat for
nitrogen as they build out their wastewater facilities to treat for phosphorus. If they installed
the biological nutrient removal systems and treated for both, their phosphorus and nitrogen
limits would not be raised for the useful life of the equipment (up to 20 years). This bill is
supported by the LMC, Coalition of Greater Minnesota Cities, and MMUA.
Several DFL legislators and the Minnesota Center for Environmental Advocacy (MCEA)
expressed their concern with the bill, saying it gave permit holders a "magic shield" from
having to adopt improved technology or higher standards. The MPCA contended that more
nitrogen would be removed from Minnesota's water under this voluntary system than by
waiting for Minnesota to adopt a nitrogen standard in the future (which could be 8-15 years
into the future).
The Senate companion bill (SF 3272) has also cleared the committee process and awaits
debate on the Senate floor.
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