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     underscored = new language to be added

scs0004a-15

1.1    Senator .................... moves to amend S.F. No. 4 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. Minnesota Statutes 2006, section 216B.1691, is amended to read:
1.4216B.1691 RENEWABLE ENERGY OBJECTIVES.
1.5    Subdivision 1. Definitions. (a) Unless otherwise specified in law, "eligible energy
1.6technology" means an energy technology that:
1.7    (1) generates electricity from the following renewable energy sources: (1) solar;
1.8(2) wind; (3) hydroelectric with a capacity of less than 60 100 megawatts; (4) hydrogen,
1.9provided that after January 1, 2010, the hydrogen must be generated from the resources
1.10listed in this clause; or (5) biomass, which includes, without limitation, landfill gas, an
1.11anaerobic digester system, and an energy recovery facility used to capture the heat value
1.12of mixed municipal solid waste or refuse-derived fuel from mixed municipal solid waste
1.13as a primary fuel; and
1.14    (2) was not mandated by Laws 1994, chapter 641, or by commission order issued
1.15pursuant to that chapter prior to August 1, 2001.
1.16    (b) "Electric utility" means a public utility providing electric service, a generation
1.17and transmission cooperative electric association, or a municipal power agency, or a
1.18power district.
1.19    (c) "Total retail electric sales" means the kilowatt-hours of electricity sold in a year
1.20by an electric utility to retail customers of the electric utility or to a distribution utility for
1.21distribution to the retail customers of the distribution utility.
1.22    Subd. 2. Eligible energy objectives. (a) Each electric utility shall make a good
1.23faith effort to generate or procure sufficient electricity generated by an eligible energy
1.24technology to provide its retail consumers, or the retail customers of a distribution utility
1.25to which the electric utility provides wholesale electric service, so that:
1.26    (1) commencing in 2005, at least one percent of the electric utility's total retail
1.27electric sales to retail customers in Minnesota is generated by eligible energy technologies;
1.28    (2) the amount provided under clause (1) is increased by one percent of the utility's
1.29total retail electric sales each year until 2015; and
1.30    (3) ten seven percent of the electric energy provided utility's total retail electric sales
1.31to retail customers in Minnesota by 2010 is generated by eligible energy technologies.
1.32    (b) Of the eligible energy technology generation required under paragraph (a),
1.33clauses (1) and (2), not less than 0.5 percent of the energy must be generated by biomass
1.34energy technologies, including an energy recovery facility used to capture the heat value
1.35of mixed municipal solid waste or refuse-derived fuel from mixed municipal solid waste
2.1as a primary fuel, by 2005. By 2010, one percent of the eligible technology generation
2.2required under paragraph (a), clauses (1) and (2), shall be generated by biomass energy
2.3technologies. An energy recovery facility used to capture the heat value of mixed
2.4municipal solid waste or refuse-derived fuel from mixed municipal solid waste, with a
2.5power sales agreement in effect as of May 29, 2003, that terminates after December 31,
2.62010, does not qualify as an eligible energy technology unless the agreement provides for
2.7rate adjustment in the event the facility qualifies as a renewable energy source.
2.8    Subd. 2a. Eligible energy technology standard. (a) Except as provided in
2.9paragraph (b), each electric utility shall generate or procure sufficient electricity generated
2.10by an eligible energy technology to provide its retail customers in Minnesota, or the
2.11retail customers of a distribution utility to which the electric utility provides wholesale
2.12electric service, so that at least the following standard percentages of the electric utility's
2.13total retail electric sales to retail customers in Minnesota is generated by eligible energy
2.14technologies by the end of the year indicated:
2.15
(1)
2012
12 percent
2.16
(2)
2016
17 percent
2.17
(3)
2020
20 percent
2.18
(4)
2025
25 percent.
2.19    (b) An electric utility that owned a nuclear generating facility as of January 1, 2007,
2.20must meet the requirements of this paragraph rather than paragraph (a). An electric utility
2.21subject to this paragraph must generate or procure sufficient electricity generated by
2.22an eligible energy technology to provide its retail customers in Minnesota or the retail
2.23customer of a distribution utility to which the electric utility provide wholesale electric
2.24service so that at least the following percentages of the electric utilitys total retail electric
2.25sales to retail customers in Minnesota is generated by eligible energy technologies by the
2.26end of the year indicated:
2.27
(1)
2010
15 percent
2.28
(2)
2012
18 percent
2.29
(3)
2016
25 percent
2.30
(4)
2020
30 percent.
2.31Of the 30 percent in 2020, at least 25 percent must be generated by wind energy
2.32conversion systems and the remaining five percent by other eligible energy technology.
2.33    Subd. 2b. Modification or delay of standard. (a) The commission shall modify or
2.34delay the implementation of a standard obligation, in whole or in part, if the commission
2.35determines it is in the public interest to do so. The commission, when requested to modify
2.36or delay implementation of a standard, must consider: (1) the impact of implementing the
3.1standard on its customer's utility costs, including the economic and competitive pressure
3.2on the utility's customers; (2) the effects of implementing the standard on the reliability of
3.3the electric system; (3) technical advances or technical concerns; (4) delays in acquiring
3.4sites or routes due to rejection or delays of necessary siting or other permitting approvals;
3.5(5) delays, cancellations, or nondelivery of necessary equipment for construction
3.6or commercial operation of an eligible energy technology facility; (6) transmission
3.7constraints preventing delivery of service; and (7) other statutory obligations imposed on
3.8the commission or a utility. The commission may modify or delay implementation of a
3.9standard obligation under clauses (1) to (3) only if it finds implementation would cause
3.10significant rate impact, requires significant measures to address reliability, or raises
3.11significant technical issues.
3.12    The commission may modify or delay implementation of a standard obligation under
3.13clauses (4) to (6) only if it finds that the circumstances described in those clauses were due
3.14to circumstances beyond an electric utility's control and make compliance not feasible.
3.15    (b) When considering whether to delay or modify implementation of a standard
3.16obligation, the commission must give due consideration to a preference for electric
3.17generation through use of eligible energy technology and to the achievement of the
3.18standards set by this section.
3.19(c) An electric utility requesting a modification or delay in the implementation of a
3.20standard must file a plan to comply with its standard obligation in the same proceeding
3.21that it is requesting the delay.
3.22    Subd. 2c. Use of integrated resource planning process. The commission may
3.23exercise its authority under subdivision 2b to modify or delay implementation of a standard
3.24obligation as part of an integrated resource planning proceeding under section 216B.2422.
3.25The commission's authority must be exercised according to subdivision 2b. The order to
3.26delay or modify shall not be considered advisory with respect to any electric utility. This
3.27subdivision is in addition to and does not limit the commission's authority to modify or
3.28delay implementation of a standard obligation in other proceedings before the commission.
3.29    (c) Subd. 2d. Commission order. By June 1, 2004, and as needed thereafter, The
3.30commission shall issue an order necessary orders detailing the criteria and standards by
3.31which it will measure an electric utility's efforts to meet the renewable energy objectives
3.32of this section subdivision 2 to determine whether the utility is making the required good
3.33faith effort. In this order, the commission shall include criteria and standards that protect
3.34against undesirable impacts on the reliability of the utility's system and economic impacts
3.35on the utility's ratepayers and that consider technical feasibility.
4.1    (d) In its order under paragraph (c), the commission shall provide for a weighted
4.2scale of how energy produced by various eligible energy technologies shall count toward a
4.3utility's objective. In establishing this scale, the commission shall consider the attributes
4.4of various technologies and fuels, and shall establish a system that grants multiple credits
4.5toward the objectives for those technologies and fuels the commission determines is in
4.6the public interest to encourage.
4.7    Subd. 3. Utility plans filed with commission. (a) Each electric utility shall report
4.8on its plans, activities, and progress with regard to these the objectives and standards
4.9of this section in its filings under section 216B.2422 or in a separate report submitted
4.10to the commission every two years, whichever is more frequent, demonstrating to the
4.11commission that the utility is making the required good faith utility's effort to comply with
4.12this section. In its resource plan or a separate report, each electric utility shall provide a
4.13description of:
4.14    (1) the status of the utility's renewable energy mix relative to the good faith objective
4.15and standards;
4.16    (2) efforts taken to meet the objective and standards;
4.17    (3) any obstacles encountered or anticipated in meeting the objective or standards;
4.18and
4.19    (4) potential solutions to the obstacles.
4.20    (b) The commissioner shall compile the information provided to the commission
4.21under paragraph (a), and report to the chairs of the house of representatives and senate
4.22committees with jurisdiction over energy and environment policy issues as to the
4.23progress of utilities in the state, including the progress of each individual electric utility,
4.24 in increasing the amount of renewable energy provided to retail customers, with any
4.25recommendations for regulatory or legislative action, by January 15 of each odd-numbered
4.26year.
4.27    Subd. 4. Renewable energy credits. (a) To facilitate compliance with this section,
4.28the commission, by rule or order, may shall establish by January 1, 2008, a program
4.29for tradable renewable energy credits for electricity generated by an eligible energy
4.30technology. In doing so, the commission shall implement a system that constrains or
4.31limits the cost of credits, taking care to ensure that such a system does not undermine the
4.32market for those credits. The credits must represent energy produced by an eligible energy
4.33technology, as defined in subdivision 1. Each kilowatt-hour of renewable energy credits
4.34must be treated the same as a kilowatt-hour of eligible energy technology generated or
4.35procured by an electric utility if it is produced by an eligible energy technology. The
4.36program must permit a credit to be used only once. The program must treat all eligible
5.1energy technology equally and shall not give more or less credit to energy based on the
5.2state where the energy was generated or the technology with which the energy was
5.3generated. The commission must determine the period in which the credits may be used
5.4for purposes of the program.
5.5    (b) In lieu of generating or procuring energy directly to satisfy the renewable
5.6eligible energy technology objective or standard of this section, an electric utility may
5.7purchase sufficient renewable energy credits, issued pursuant to this subdivision, to
5.8meet its objective utilize renewable energy credits allowed under the program to satisfy
5.9the objective or standard.
5.10    (c) Upon the passage of a renewable energy standard, portfolio, or objective in
5.11a bordering state that includes a similar definition of eligible energy technology or
5.12renewable energy, The commission may shall facilitate the trading of renewable energy
5.13credits between states.
5.14    (d) The commission shall require all electric utilities to participate in a
5.15commission-approved credit tracking system or systems. Once a credit tracking system is
5.16in operation, the commission shall issue an order establishing protocols for trading credits.
5.17(e) An electric utility subject to subdivision 2a, paragraph (b), may not sell renewable
5.18energy credits to an electric utility subject to subdivision 2a, paragraph (a), until 2021.
5.19    Subd. 5. Technology based on fuel combustion. (a) Electricity produced by fuel
5.20combustion may only count toward a utility's objectives or standards if the generation
5.21facility:
5.22    (1) was constructed in compliance with new source performance standards
5.23promulgated under the federal Clean Air Act for a generation facility of that type; or
5.24    (2) employs the maximum achievable or best available control technology available
5.25for a generation facility of that type.
5.26    (b) An eligible energy technology may blend or co-fire a fuel listed in subdivision 1,
5.27paragraph (a), clause (1), with other fuels in the generation facility, but only the percentage
5.28of electricity that is attributable to a fuel listed in that clause can be counted toward an
5.29electric utility's renewable energy objectives.
5.30    Subd. 6. Electric utility that owns nuclear generation facility. (a) An electric
5.31utility that owns a nuclear generation facility, as part of its good faith effort under this
5.32subdivision and subdivision 2, shall deploy an additional 300 megawatts of nameplate
5.33capacity of wind energy conversion systems by 2010, beyond the amount of wind energy
5.34capacity to which the utility is required by law or commission order as of May 1, 2003.
5.35At least 100 megawatts of this capacity are to be wind energy conversion systems of two
5.36megawatts or less, which shall not be eligible for the production incentive under section
6.1216C.41. To the greatest extent technically feasible and economic, these 300 megawatts
6.2of wind energy capacity are to be distributed geographically throughout the state. The
6.3utility may opt to own, construct, and operate up to 100 megawatts of this wind energy
6.4capacity, except that the utility may not own, construct, or operate any of the facilities
6.5that are under two megawatts of nameplate capacity. The deployment of the wind energy
6.6capacity under this subdivision must be consistent with the outcome of the engineering
6.7study required under Laws 2003, First Special Session chapter 11, article 2, section 21.
6.8    (b) The renewable energy objective set forth in subdivision 2 shall be a requirement
6.9for the public utility that owns the Prairie Island nuclear generation plant. The objective is
6.10a requirement subject to resource planning and least-cost planning requirements in section
6.11216B.2422, unless implementation of the objective can reasonably be shown to jeopardize
6.12the reliability of the electric system. The least-cost planning analysis must include the
6.13costs of ancillary services and other necessary generation and transmission upgrades.
6.14    (c) Also as part of its good faith effort under this section, the utility that owns a
6.15nuclear generation facility is to enter into a power purchase agreement by January 1, 2004,
6.16for ten to 20 megawatts of biomass energy and capacity at an all-inclusive price not to
6.17exceed $55 per megawatt-hour, for a project described in section 216B.2424, subdivision
6.185
, paragraph (e), clause (2). The project must be operational and producing energy by
6.19June 30, 2005.
6.20    Subd. 7. Compliance. The commission must regularly investigate whether an
6.21electric utility is in compliance with its good-faith objective under subdivision 2 and
6.22standard obligation under subdivision 2a. If the commission finds noncompliance, it may
6.23order the electric utility to construct facilities, purchase energy generated by eligible
6.24energy technology, purchase renewable energy credits, or engage in other activities
6.25to achieve compliance. If an electric utility fails to comply with an order under this
6.26subdivision, the commission may impose a financial penalty on the electric utility in an
6.27amount not to exceed the estimated cost of the electric utility to achieve compliance. The
6.28penalty may not exceed the lesser of the cost of constructing facilities or purchasing
6.29credits. This subdivision is in addition to and does not limit any other authority of the
6.30commission to enforce this section.
6.31    Subd. 8. Relation to other law. This section does not limit the authority of the
6.32commission under any other law, including, without limitation, sections 216B.2422 and
6.33216B.243.
6.34    Subd. 9. Local benefits. The commission shall take all reasonable actions within
6.35its statutory authority to ensure this section is implemented to maximize benefits to
7.1Minnesota citizens, balancing factors such as local ownership of or participation in
7.2energy production, development and ownership of eligible energy technology facilities by
7.3independent power producers, Minnesota utility ownership of eligible energy technology
7.4facilities, the costs of energy generation to satisfy the renewable standard, and the
7.5reliability of electric service to Minnesotans.

7.6    Sec. 2. TRANSMISSION FOR RENEWABLE ENERGY STANDARD.
7.7    Minnesota electric utilities, as defined by Minnesota Statutes, section 216B.1691,
7.8subdivision 1, paragraph (b), must study and develop plans for the transmission network
7.9enhancements necessary to support the renewable energy standards and milestones
7.10established in Minnesota Statutes, section 216B.1691, subdivision 2a. The study process
7.11must be designed to identify and optimize delivery of that renewable energy to Minnesota
7.12retail customers while maintaining system reliability.
7.13    As part of the planning process, Minnesota electric utilities shall incorporate and
7.14build upon the analyses that have previously been done or that are in progress, including,
7.15but not limited to, the 2006 Minnesota Wind Integration Study and ongoing work to
7.16address geographically dispersed development patterns. The Minnesota electric utilities
7.17shall collaborate with the Midwest Independent System Operator to optimize and integrate
7.18to the extent possible Minnesota's transmission plans with other regional transmission
7.19considerations.
7.20    As part of the planning process, utilities shall convene and regularly consult with a
7.21group of stakeholders with experience and expertise in transmission system engineering
7.22and renewable generation technology to review the study's proposed methods and
7.23assumptions, preliminary results, and ongoing efforts.
7.24    Utilities shall submit a report to the Minnesota Public Utilities Commission by
7.25November 1, 2007, describing the activities undertaken pursuant to this section. The
7.26report shall include:
7.27    (1) a description of the analyses that have been undertaken and the results, including
7.28the critical issues that need to be addressed in order to develop the transmission needed to
7.29meet the standards and milestones of Minnesota Statutes, section 216B.1691, subdivision
7.302a;
7.31    (2) a comprehensive conceptual plan to guide ongoing planning efforts to develop
7.32the transmission necessary to support those standards and milestones;
7.33    (3) specific transmission line proposals necessary to meet those intermediate
7.34standards and milestones;
7.35    (4) a description of how the results of these studies have been reflected in the
7.36biennial transmission reports filed under Minnesota Statutes, section 216B.2425; and
8.1    (5) a five-year action plan that identifies with specificity the actions necessary to
8.2implement the specific proposals and to refine and further develop the transmission plans
8.3needed to support those standards and milestones, including initiating any certificate
8.4of need or other regulatory proceeding necessary to implement the specific proposals
8.5identified above.

8.6    Sec. 3. REPEALER.
8.7Minnesota Statutes 2006, section 216B.169, is repealed.
8.8EFFECTIVE DATE.This section is effective January 1, 2010."
8.9Delete the title and insert:
8.10"A bill for an act
8.11relating to energy; establishing renewable energy standard; amending Minnesota
8.12Statutes 2006, section 216B.1691; repealing Minnesota Statutes 2006, section
8.13216B.169."