Section 2, subdivision 1, amends the definition of renewable energy eligible to satisfy a renewable energy objective. It expands the list of eligible energy to include that generated by renewable sources of any kind. It does not define what is meant by renewable. The maximum cap on eligible hydropower facilities is increased from 60 to 100 megawatts. The exclusion of energy produced under XCEL's Prarie Island mandate is repealed but reinstated in a subsequent subdivision. The term "eligible energy technology" is amended to "renewable energy technology."

Subdivision 2 converts the current good-faith effort objective law to a standard. The standard is set at ten percent in 2015 and 20 percent in 2020. The set aside for biomass generation is repealed. The Public Utilities Commission is required to delay or modify a standard if it finds that compliance with the standard is not in the public interest. An expanded list of factors for the Commission to consider when making the public interest determination is added. The Commission is bound by the findings of fact related to the public interest determination factors made by the governing body of a generation and transmission cooperative association or municipal power agency or power district.

Subdivision 3 contains conforming technical amendments.

Subdivision 4 requires the Public Utilities Commission to establish a tradable credit program no later than January 1, 2008. The tradable credit program must treat all renwable energy types the same and allow for banking of credits for subsequent years. Credits can only be sold once.

Subdivision 5 excludes energy produced under the Prairie Island mandates from counting towards the objective. To count for compliance, energy must be generated by a facility located in the United States that was originally placed in service after January 1, 1975, unless the facility is a municipally owned hydroelectric plant in Minnesota that provides electricity only to a municipal utility.

Subdivision 6 contains technical conforming amendments.

Subdivision 7 authorizes the Public Utilities Commission to order a utility to construct facilities or purchase credits to achieve compliance. If a utility fails to comply with an order, the Commission may impose a financial penalty up to the cost of compliance.

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