SF 4269

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 04/05/2022 09:17am

A bill for an act
relating to energy; making policy and technical changes; requiring a report;
appropriating money; amending Minnesota Statutes 2020, sections 116C.779,
subdivision 1; 116J.55, subdivisions 1, 5; 216B.096, subdivision 11; 216B.24, by
adding a subdivision; 216B.243, subdivision 3b; 216B.50, subdivision 1; 216C.435,
subdivision 8; 216C.436, subdivision 2, by adding a subdivision; 237.55; Minnesota
Statutes 2021 Supplement, sections 116C.7792; 216C.376, subdivision 5; Laws
2020, chapter 118, section 5, subdivision 1; Laws 2021, First Special Session
chapter 4, article 2, section 3, subdivision 1; proposing coding for new law in
Minnesota Statutes, chapters 216B; 216H; 465; repealing Laws 2005, chapter 97,
article 10, section 3, as amended; Laws 2021, First Special Session chapter 4,
article 2, section 3, subdivision 3.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2020, section 116C.779, subdivision 1, is amended to read:

Subdivision 1.

Renewable development account.

(a) The renewable development
account is established as a separate account in the special revenue fund in the state treasury.
Appropriations and transfers to the account shall be credited to the account. Earnings, such
as interest, dividends, and any other earnings arising from assets of the account, shall be
credited to the account. Funds remaining in the account at the end of a fiscal year are not
canceled to the general fund but remain in the account until expended. The account shall
be administered by the commissioner of management and budget as provided under this
section.

(b) On July 1, 2017, the public utility that owns the Prairie Island nuclear generating
plant must transfer all funds in the renewable development account previously established
under this subdivision and managed by the public utility to the renewable development
account established in paragraph (a). Funds awarded to grantees in previous grant cycles
that have not yet been expended and unencumbered funds required to be paid in calendar
year 2017 under paragraphs (f) and (g), and sections 116C.7792 and 216C.41, are not subject
to transfer under this paragraph.

(c) Except as provided in subdivision 1a, beginning January 15, 2018, and continuing
each January 15 thereafter, the public utility that owns the Prairie Island nuclear generating
plant must transfer to the renewable development account $500,000 each year for each dry
cask containing spent fuel that is located at the Prairie Island power plant for each year the
plant is in operation, and $7,500,000 each year the plant is not in operation if ordered by
the commission pursuant to paragraph (i). The fund transfer must be made if nuclear waste
is stored in a dry cask at the independent spent-fuel storage facility at Prairie Island for any
part of a year.

(d) Except as provided in subdivision 1a, beginning January 15, 2018, and continuing
each January 15 thereafter, the public utility that owns the Monticello nuclear generating
plant must transfer to the renewable development account $350,000 each year for each dry
cask containing spent fuel that is located at the Monticello nuclear power plant for each
year the plant is in operation, and $5,250,000 each year the plant is not in operation if ordered
by the commission pursuant to paragraph (i). The fund transfer must be made if nuclear
waste is stored in a dry cask at the independent spent-fuel storage facility at Monticello for
any part of a year.

(e) Each year, the public utility shall withhold from the funds transferred to the renewable
development account under paragraphs (c) and (d) the amount necessary to pay its obligations
under paragraphs (f) deleted text begin and deleted text end new text begin , new text end (g), new text begin and (m), new text end and sections 116C.7792 and 216C.41, for that calendar
year.

(f) If the commission approves a new or amended power purchase agreement, the
termination of a power purchase agreement, or the purchase and closure of a facility under
section 216B.2424, subdivision 9, with an entity that uses poultry litter to generate electricity,
the public utility subject to this section shall enter into a contract with the city in which the
poultry litter plant is located to provide grants to the city for the purposes of economic
development on the following schedule: $4,000,000 in fiscal year 2018; $6,500,000 each
fiscal year in 2019 and 2020; and $3,000,000 in fiscal year 2021. The grants shall be paid
by the public utility from funds withheld from the transfer to the renewable development
account, as provided in paragraphs (b) and (e).

(g) If the commission approves a new or amended power purchase agreement, or the
termination of a power purchase agreement under section 216B.2424, subdivision 9, with
an entity owned or controlled, directly or indirectly, by two municipal utilities located north
of Constitutional Route No. 8, that was previously used to meet the biomass mandate in
section 216B.2424, the public utility that owns a nuclear generating plant shall enter into a
grant contract with such entity to provide $6,800,000 per year for five years, commencing
30 days after the commission approves the new or amended power purchase agreement, or
the termination of the power purchase agreement, and on each June 1 thereafter through
2021, to assist the transition required by the new, amended, or terminated power purchase
agreement. The grant shall be paid by the public utility from funds withheld from the transfer
to the renewable development account as provided in paragraphs (b) and (e).

(h) The collective amount paid under the grant contracts awarded under paragraphs (f)
and (g) is limited to the amount deposited into the renewable development account, and its
predecessor, the renewable development account, established under this section, that was
not required to be deposited into the account under Laws 1994, chapter 641, article 1, section
10.

(i) After discontinuation of operation of the Prairie Island nuclear plant or the Monticello
nuclear plant and each year spent nuclear fuel is stored in dry cask at the discontinued
facility, the commission shall require the public utility to pay $7,500,000 for the discontinued
Prairie Island facility and $5,250,000 for the discontinued Monticello facility for any year
in which the commission finds, by the preponderance of the evidence, that the public utility
did not make a good faith effort to remove the spent nuclear fuel stored at the facility to a
permanent or interim storage site out of the state. This determination shall be made at least
every two years.

(j) Funds in the account may be expended only for any of the following purposes:

(1) to stimulate research and development of renewable electric energy technologies;

(2) to encourage grid modernization, including, but not limited to, projects that implement
electricity storage, load control, and smart meter technology; and

(3) to stimulate other innovative energy projects that reduce demand and increase system
efficiency and flexibility.

Expenditures from the fund must benefit Minnesota ratepayers receiving electric service
from the utility that owns a nuclear-powered electric generating plant in this state or the
Prairie Island Indian community or its members.

The utility that owns a nuclear generating plant is eligible to apply for grants under this
subdivision.

(k) For the purposes of paragraph (j), the following terms have the meanings given:

(1) "renewable" has the meaning given in section 216B.2422, subdivision 1, paragraph
(c), clauses (1), (2), (4), and (5); and

(2) "grid modernization" means:

(i) enhancing the reliability of the electrical grid;

(ii) improving the security of the electrical grid against cyberthreats and physical threats;
and

(iii) increasing energy conservation opportunities by facilitating communication between
the utility and its customers through the use of two-way meters, control technologies, energy
storage and microgrids, technologies to enable demand response, and other innovative
technologies.

(l) A renewable development account advisory group that includes, among others,
representatives of the public utility and its ratepayers, and includes at least one representative
of the Prairie Island Indian community appointed by that community's tribal council, shall
develop recommendations on account expenditures. new text begin Except as otherwise provided herein,
members of the advisory group shall be chosen by the public utility. The public utility may
design a request for proposal in conjunction with the advisory group. new text end The advisory group
must design a request for proposal and evaluate projects submitted in response to a request
for proposals. The advisory group must utilize an independent third-party expert to evaluate
proposals submitted in response to a request for proposal, including all proposals made by
the public utility. A request for proposal for research and development under paragraph (j),
clause (1), may be limited to or include a request to higher education institutions located in
Minnesota for multiple projects authorized under paragraph (j), clause (1). The request for
multiple projects may include a provision that exempts the projects from the third-party
expert review and instead provides for project evaluation and selection by a merit peer
review grant system. In the process of determining request for proposal scope and subject
and in evaluating responses to request for proposals, the advisory group must strongly
consider, where reasonable, potential benefit to Minnesota citizens and businesses and the
utility's ratepayers.

new text begin (m) The cost of acquiring the services of the independent third-party expert described
in paragraph (l) and any other costs incurred in administering the advisory group and its
actions as required by this section, not to exceed $150,000, shall be paid from funds withheld
by the public utility under paragraph (e).
new text end

deleted text begin (m) deleted text end new text begin (n) new text end The advisory group shall submit funding recommendations to the public utility,
which has full and sole authority to determine which expenditures shall be submitted deleted text begin by
the advisory group deleted text end to the deleted text begin legislature deleted text end new text begin commission new text end . The commission may approve proposed
expenditures, may disapprove proposed expenditures that it finds not to be in compliance
with this subdivision or otherwise not in the public interest, and may, if agreed to by the
public utility, modify proposed expenditures. The commission shall, by order, submit its
funding recommendations to the legislature as provided under paragraph deleted text begin (n) deleted text end new text begin (o) new text end .

deleted text begin (n) deleted text end new text begin (o) new text end The commission shall present its recommended appropriations from the account
to the senate and house of representatives committees with jurisdiction over energy policy
and finance annually by February 15. Expenditures from the account must be appropriated
by law. In enacting appropriations from the account, the legislature:

(1) may approve or disapprove, but may not modify, the amount of an appropriation for
a project recommended by the commission; and

(2) may not appropriate money for a project the commission has not recommended
funding.

deleted text begin (o) deleted text end new text begin (p) new text end A request for proposal for renewable energy generation projects must, when
feasible and reasonable, give preference to projects that are most cost-effective for a particular
energy source.

deleted text begin (p) deleted text end new text begin (q) new text end The deleted text begin advisory group deleted text end new text begin public utility new text end must annually, by February 15, report to the
chairs and ranking minority members of the legislative committees with jurisdiction over
energy policy on projects funded by the account for the prior year and all previous years.
The report must, to the extent possible and reasonable, itemize the actual and projected
financial benefit to the public utility's ratepayers of each project.

deleted text begin (q) deleted text end new text begin (r) new text end By February 1, 2018, and each February 1 thereafter, the commissioner of
management and budget shall submit a written report regarding the availability of funds in
and obligations of the account to the chairs and ranking minority members of the senate
and house committees with jurisdiction over energy policy and finance, the public utility,
and the advisory group.

deleted text begin (r) deleted text end new text begin (s) new text end A project receiving funds from the account must produce a written final report
that includes sufficient detail for technical readers and a clearly written summary for
nontechnical readers. The report must include an evaluation of the project's financial,
environmental, and other benefits to the state and the public utility's ratepayers.

deleted text begin (s) deleted text end new text begin (t) new text end Final reports, any mid-project status reports, and renewable development account
financial reports must be posted online on a public website designated by the commissioner
of commerce.

deleted text begin (t) deleted text end new text begin (u) new text end All final reports must acknowledge that the project was made possible in whole
or part by the Minnesota renewable development account, noting that the account is financed
by the public utility's ratepayers.

deleted text begin (u) deleted text end new text begin (v) new text end Of the amount in the renewable development account, priority must be given to
making the payments required under section 216C.417.

Sec. 2.

Minnesota Statutes 2021 Supplement, section 116C.7792, is amended to read:

116C.7792 SOLAR ENERGY PRODUCTION INCENTIVE PROGRAM.

(a) The utility subject to section 116C.779 shall operate a program to provide solar
energy production incentives for solar energy systems of no more than a total aggregate
nameplate capacity of 40 kilowatts alternating current per premise. The owner of a solar
energy system installed before June 1, 2018, is eligible to receive a production incentive
under this section for any additional solar energy systems constructed at the same customer
location, provided that the aggregate capacity of all systems at the customer location does
not exceed 40 kilowatts.

(b) The program is funded by money withheld from transfer to the renewable development
account under section 116C.779, subdivision 1, paragraphs (b) and (e). Program funds must
be placed in a separate account for the purpose of the solar energy production incentive
program operated by the utility and not for any other program or purpose.

(c) Funds allocated to the solar energy production incentive program in 2019 and 2020
remain available to the solar energy production incentive program.

(d) The following amounts are allocated to the solar energy production incentive program:

(1) $10,000,000 in 2021;

(2) $10,000,000 in 2022;

(3) deleted text begin $5,000,000 deleted text end new text begin $10,000,000 new text end in 2023; deleted text begin and
deleted text end

(4) deleted text begin $5,000,000 deleted text end new text begin $10,000,000 new text end in 2024 new text begin ; and
new text end

new text begin (5) $10,000,000 in 2025 new text end .

(e) Funds allocated to the solar energy production incentive program that have not been
committed to a specific project at the end of a program year remain available to the solar
energy production incentive program.

(f) Any unspent amount remaining on January 1, deleted text begin 2025 deleted text end new text begin 2026 new text end , must be transferred to the
renewable development account.

(g) A solar energy system receiving a production incentive under this section must be
sized to less than 120 percent of the customer's on-site annual energy consumption when
combined with other distributed generation resources and subscriptions provided under
section 216B.1641 associated with the premise. The production incentive must be paid for
ten years commencing with the commissioning of the system.

(h) The utility must file a plan to operate the program with the commissioner of
commerce. The utility may not operate the program until it is approved by the commissioner.
A change to the program to include projects up to a nameplate capacity of 40 kilowatts or
less does not require the utility to file a plan with the commissioner. Any plan approved by
the commissioner of commerce must not provide an increased incentive scale over prior
years unless the commissioner demonstrates that changes in the market for solar energy
facilities require an increase.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2020, section 116J.55, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For the purposes of this section, "eligible community" means
a county, municipality, or tribal government located in Minnesota in which an electric
generating plant owned by a public utility, as defined in section 216B.02, that is powered
by coal, nuclear energy, or natural gas:

(1) is currently operating and new text begin (i) new text end is scheduled to cease operations deleted text begin or deleted text end new text begin , (ii) new text end whose cessation
of operations has been proposed in an integrated resource plan filed with the commission
under section 216B.2422 deleted text begin ; deleted text end new text begin , or (iii) whose current operating license expires within 15 years
of the effective date of this section; new text end or

(2) ceased operations or was removed from the local property tax base no earlier than
five years before the date an application is made for a grant under this section.

Sec. 4.

Minnesota Statutes 2020, section 116J.55, subdivision 5, is amended to read:

Subd. 5.

Grant awards; limitations.

deleted text begin (a) The commissioner must award grants under
this section to eligible communities through a competitive grant process.
deleted text end

deleted text begin (b) deleted text end new text begin (a) new text end A grant awarded to an eligible community under this section must not exceed
$500,000 new text begin in any calendar year. The commissioner may accept grant applications on an
ongoing or rolling basis new text end .

deleted text begin (c) deleted text end new text begin (b) new text end Grants funded with revenues from the renewable development account established
in section 116C.779 must be awarded to an eligible community located within the retail
electric service territory of the public utility that is subject to section 116C.779 or to an
eligible community in which an electric generating plant owned by that public utility is
located.

Sec. 5.

Minnesota Statutes 2020, section 216B.096, subdivision 11, is amended to read:

Subd. 11.

Reporting.

Annually on deleted text begin November 1 deleted text end new text begin October 15 new text end , a utility must electronically
file with the commission a report, in a format specified by the commission, specifying the
number of utility heating service customers whose service is disconnected or remains
disconnected for nonpayment as of new text begin September 15 and new text end October 1 deleted text begin and October 15 deleted text end . If customers
remain disconnected on October deleted text begin 15 deleted text end new text begin 1 new text end , a utility must file a report each week between
deleted text begin November 1 deleted text end new text begin October 15 new text end and the end of the cold weather period specifying:

(1) the number of utility heating service customers that are or remain disconnected from
service for nonpayment; and

(2) the number of utility heating service customers that are reconnected to service each
week. The utility may discontinue weekly reporting if the number of utility heating service
customers that are or remain disconnected reaches zero before the end of the cold weather
period.

The data reported under this subdivision are presumed to be accurate upon submission
and must be made available through the commission's electronic filing system.

Sec. 6.

Minnesota Statutes 2020, section 216B.24, is amended by adding a subdivision to
read:

new text begin Subd. 1a. new text end

new text begin Wind or solar electric generating facilities. new text end

new text begin Any person proposing
construction of a major utility facility that is a wind or solar electric generating facility
designed for or capable of operation at a capacity of 50 megawatts or more must, in addition
to any approvals required under this chapter, obtain approval from the governing board of
and pursuant to the land use ordinance of the county in which the proposed wind or solar
electric generating facility will be located.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

Minnesota Statutes 2020, section 216B.243, subdivision 3b, is amended to read:

Subd. 3b.

deleted text begin Nuclear power plant; new construction prohibited; relicensing deleted text end new text begin Additional
storage of spent nuclear fuel new text end .

deleted text begin (a) The commission may not issue a certificate of need for
the construction of a new nuclear-powered electric generating plant.
deleted text end

deleted text begin (b) deleted text end Any certificate of need for additional storage of spent nuclear fuel for a facility
seeking a license extension shall address the impacts of continued operations over the period
for which approval is sought.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8.

new text begin [216B.491] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For the purposes of sections 216B.491 to 216B.499, the terms
defined in this subdivision have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Ancillary agreement. new text end

new text begin "Ancillary agreement" means any bond, insurance policy,
letter of credit, reserve account, surety bond, interest rate lock or swap arrangement, liquidity
or credit support arrangement, or other financial arrangement entered into in connection
with extraordinary event bonds that is designed to promote the credit quality and
marketability of extraordinary event bonds or to mitigate the risk of an increase in interest
rates.
new text end

new text begin Subd. 3. new text end

new text begin Assignee. new text end

new text begin "Assignee" means any person to which an interest in extraordinary
event property is sold, assigned, transferred, or conveyed, other than as security, and any
successor to or subsequent assignee of the person.
new text end

new text begin Subd. 4. new text end

new text begin Bondholder. new text end

new text begin "Bondholder" means any holder or owner of extraordinary event
bonds.
new text end

new text begin Subd. 5. new text end

new text begin Customer. new text end

new text begin "Customer" means a person who takes natural gas service from a
natural gas utility for consumption of natural gas in Minnesota.
new text end

new text begin Subd. 6. new text end

new text begin Extraordinary event. new text end

new text begin (a) "Extraordinary event" means an event arising from
unforeseen circumstances and of sufficient magnitude, as determined by the commission:
new text end

new text begin (1) to impose significant costs on customers; and
new text end

new text begin (2) for which the issuance of extraordinary event bonds in response to the event meets
the conditions of section 216B.492, subdivision 2, as determined by the commission.
new text end

new text begin (b) Extraordinary event includes but is not limited to a storm event or other natural
disaster, an act of God, war, terrorism, sabotage or vandalism, a cybersecurity attack, or a
temporary significant increase in the wholesale price of natural gas.
new text end

new text begin Subd. 7. new text end

new text begin Extraordinary event activity. new text end

new text begin "Extraordinary event activity" means an activity
undertaken by or on behalf of a utility to restore or maintain the utility's ability to provide
natural gas service following one or more extraordinary events, including but not limited
to activities related to mobilization, staging, construction, reconstruction, replacement, or
repair of natural gas transmission, distribution, storage, or general facilities.
new text end

new text begin Subd. 8. new text end

new text begin Extraordinary event bonds. new text end

new text begin "Extraordinary event bonds" means low-cost
corporate securities, including but not limited to senior secured bonds, debentures, notes,
certificates of participation, certificates of beneficial interest, certificates of ownership, or
other evidences of indebtedness or ownership that have a scheduled maturity of no longer
than 30 years and a final legal maturity date that is not later than 32 years from the issue
date, that are rated AA or Aa2 or better by a major independent credit rating agency at the
time of issuance, and that are issued by a utility or an assignee under a financing order.
new text end

new text begin Subd. 9. new text end

new text begin Extraordinary event charge. new text end

new text begin "Extraordinary event charge" means a
nonbypassable charge that:
new text end

new text begin (1) is imposed on all customer bills by a utility that is the subject of a financing order
or the utility's successors or assignees;
new text end

new text begin (2) is separate from the utility's base rates; and
new text end

new text begin (3) provides a source of revenue solely to repay, finance, or refinance extraordinary
event costs.
new text end

new text begin Subd. 10. new text end

new text begin Extraordinary event costs. new text end

new text begin "Extraordinary event costs":
new text end

new text begin (1) means all incremental costs of extraordinary event activities that are approved by
the commission in a financing order issued under section 216B.492 as being:
new text end

new text begin (i) necessary to enable the utility to restore or maintain natural gas service to customers
after the utility experiences an extraordinary event; and
new text end

new text begin (ii) prudent and reasonable;
new text end

new text begin (2) includes costs to repurchase equity or retire any indebtedness relating to extraordinary
event activities;
new text end

new text begin (3) shall be net of applicable insurance proceeds, tax benefits, and any other amounts
intended to reimburse the utility for extraordinary event activities, including government
grants or aid of any kind;
new text end

new text begin (4) do not include any monetary penalty, fine, or forfeiture assessed against a utility by
a government agency or court under a federal or state environmental statute, rule, or
regulation; and
new text end

new text begin (5) must be adjusted to reflect:
new text end

new text begin (i) the difference, as determined by the commission, between extraordinary event costs
that the utility expects to incur and actual, reasonable, and prudent costs incurred; or
new text end

new text begin (ii) a more fair or reasonable allocation of extraordinary event costs to customers over
time, as expressed in a commission order.
new text end

new text begin Subd. 11. new text end

new text begin Extraordinary event property. new text end

new text begin "Extraordinary event property" means:
new text end

new text begin (1) all rights and interests of a utility or the utility's successor or assignee under a
financing order for the right to impose, bill, collect, receive, and obtain periodic adjustments
to extraordinary event charges authorized under a financing order issued by the commission;
and
new text end

new text begin (2) all revenue, collections, claims, rights to payments, payments, money, or proceeds
arising from the rights and interests specified in clause (1), regardless of whether any are
commingled with other revenue, collections, rights to payment, payments, money, or
proceeds.
new text end

new text begin Subd. 12. new text end

new text begin Extraordinary event revenue. new text end

new text begin "Extraordinary event revenue" means revenue,
receipts, collections, payments, money, claims, or other proceeds arising from extraordinary
event property.
new text end

new text begin Subd. 13. new text end

new text begin Financing costs. new text end

new text begin "Financing costs" means:
new text end

new text begin (1) principal, interest, and redemption premiums that are payable on extraordinary event
bonds;
new text end

new text begin (2) payments required under an ancillary agreement and amounts required to fund or
replenish a reserve account or other accounts established under the terms of any indenture,
ancillary agreement, or other financing document pertaining to the bonds;
new text end

new text begin (3) other demonstrable costs related to issuing, supporting, repaying, refunding, and
servicing the bonds, including but not limited to servicing fees, accounting and auditing
fees, trustee fees, legal fees, consulting fees, financial adviser fees, administrative fees,
placement and underwriting fees, capitalized interest, rating agency fees, stock exchange
listing and compliance fees, security registration fees, filing fees, information technology
programming costs, and any other demonstrable costs necessary to otherwise ensure and
guarantee the timely payment of the bonds or other amounts or charges payable in connection
with the bonds;
new text end

new text begin (4) taxes and license fees imposed on the revenue generated from collecting an
extraordinary event charge;
new text end

new text begin (5) state and local taxes, including franchise, sales and use, and other taxes or similar
charges, including but not limited to regulatory assessment fees, whether paid, payable, or
accrued; and
new text end

new text begin (6) costs incurred by the commission to hire and compensate additional temporary staff
needed to perform the commission's responsibilities under this section and, in accordance
with section 216B.494, to engage specialized counsel and expert consultants experienced
in securitized utility ratepayer-backed bond financing similar to extraordinary event bonds.
new text end

new text begin Subd. 14. new text end

new text begin Financing order. new text end

new text begin "Financing order" means an order issued by the commission
under section 216B.492 that authorizes an applicant to:
new text end

new text begin (1) issue extraordinary event bonds in one or more series;
new text end

new text begin (2) impose, charge, and collect extraordinary event charges; and
new text end

new text begin (3) create extraordinary event property.
new text end

new text begin Subd. 15. new text end

new text begin Financing party. new text end

new text begin "Financing party" means a holder of extraordinary event
bonds and a trustee, a collateral agent, a party under an ancillary agreement, or any other
person acting for the benefit of extraordinary event bondholders.
new text end

new text begin Subd. 16. new text end

new text begin Natural gas facility. new text end

new text begin "Natural gas facility" means natural gas pipelines,
including distribution lines, underground storage areas, liquefied natural gas facilities,
propane storage tanks, and other facilities the commission determines are used and useful
to provide natural gas service to retail and transportation customers in Minnesota.
new text end

new text begin Subd. 17. new text end

new text begin Nonbypassable. new text end

new text begin "Nonbypassable" means that the payment of an extraordinary
event charge required to repay bonds and related costs may not be avoided by any retail
customer located within a utility service area.
new text end

new text begin Subd. 18. new text end

new text begin Pretax costs. new text end

new text begin "Pretax costs" means costs incurred by a utility and approved
by the commission, including but not limited to:
new text end

new text begin (1) unrecovered capitalized costs of replaced natural gas facilities damaged or destroyed
by a storm event;
new text end

new text begin (2) costs to decommission and restore the site of a natural gas facility damaged or
destroyed by an extraordinary event;
new text end

new text begin (3) other applicable capital and operating costs, accrued carrying charges, deferred
expenses, reductions for applicable insurance, and salvage proceeds; and
new text end

new text begin (4) costs to retire any existing indebtedness, fees, costs, and expenses to modify existing
debt agreements, or for waivers or consents related to existing debt agreements.
new text end

new text begin Subd. 19. new text end

new text begin Storm event. new text end

new text begin "Storm event" means a tornado, derecho, ice or snow storm,
flood, earthquake, or other significant weather or natural disaster that causes substantial
damage to a utility's infrastructure.
new text end

new text begin Subd. 20. new text end

new text begin Successor. new text end

new text begin "Successor" means a legal entity that succeeds by operation of law
to the rights and obligations of another legal entity as a result of bankruptcy, reorganization,
restructuring, other insolvency proceeding, merger, acquisition, consolidation, or sale or
transfer of assets.
new text end

new text begin Subd. 21. new text end

new text begin Utility. new text end

new text begin "Utility" means a public utility, as defined in section 216B.02,
subdivision 4, that provides natural gas service to Minnesota customers. Utility includes
the utility's successors or assignees.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9.

new text begin [216B.492] FINANCING ORDER.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin (a) A utility may file an application with the commission
for the issuance of a financing order to enable the utility to recover extraordinary event costs
through the issuance of extraordinary event bonds under this section.
new text end

new text begin (b) The application must include the following information, as applicable:
new text end

new text begin (1) a description of each natural gas facility to be repaired or replaced;
new text end

new text begin (2) the undepreciated value remaining in the natural gas facility whose repair or
replacement is proposed to be financed through the issuance of bonds under sections
216B.491 to 216B.499, and the method used to calculate the amount;
new text end

new text begin (3) the estimated amount of costs imposed on customers resulting from an extraordinary
event that involves no physical damage to natural gas facilities;
new text end

new text begin (4) the estimated savings or estimated mitigation of rate impacts to utility customers if
the financing order is issued as requested in the application, calculated by comparing the
costs to customers that are expected to result from implementing the financing order and
the estimated costs associated with implementing traditional utility financing mechanisms
with respect to the same undepreciated balance, expressed in net present value terms;
new text end

new text begin (5) a description of (i) the nonbypassable extraordinary event charge utility customers
would be required to pay in order to fully recover financing costs, and (ii) the method and
assumptions used to calculate the amount;
new text end

new text begin (6) a proposed methodology to allocate the revenue requirement for the extraordinary
event charge among the utility's customer classes;
new text end

new text begin (7) a description of a proposed adjustment mechanism to be implemented when necessary
to correct any overcollection or undercollection of extraordinary event charges, in order to
complete payment of scheduled principal and interest on extraordinary event bonds and
other financing costs in a timely fashion;
new text end

new text begin (8) a memorandum with supporting exhibits, from a securities firm that is experienced
in the marketing of bonds and that is approved by the commissioner of management and
budget, indicating the proposed issuance satisfies the current published AA or Aa2 or higher
rating or equivalent rating criteria of at least one nationally recognized securities rating
organization for issuances similar to the proposed extraordinary event bonds;
new text end

new text begin (9) an estimate of the timing of the issuance and the term of the extraordinary event
bonds, or series of bonds, provided that the scheduled final maturity for each bond issuance
does not exceed 30 years;
new text end

new text begin (10) identification of plans to sell, assign, transfer, or convey, other than as a security,
interest in extraordinary event property, including identification of an assignee, and
demonstration that the assignee is a financing entity wholly owned, directly or indirectly,
by the utility;
new text end

new text begin (11) identification of ancillary agreements that may be necessary or appropriate;
new text end

new text begin (12) one or more alternative financing scenarios in addition to the preferred scenario
contained in the application;
new text end

new text begin (13) the extent of damage to the utility's infrastructure caused by an extraordinary event
and the estimated costs to repair or replace the damaged infrastructure;
new text end

new text begin (14) a schedule of the proposed repairs to and replacement of damaged infrastructure;
new text end

new text begin (15) a description of the steps taken to provide customers interim natural gas service
while the damaged infrastructure is being repaired or replaced; and
new text end

new text begin (16) a description of the impacts on the utility's current workforce resulting from
implementing an infrastructure repair or replacement plan following an extraordinary event.
new text end

new text begin Subd. 2. new text end

new text begin Findings. new text end

new text begin After providing notice and holding a public hearing on an application
filed under subdivision 1, the commission may issue a financing order if the commission
finds that:
new text end

new text begin (1) the extraordinary event costs described in the application are reasonable;
new text end

new text begin (2) the proposed issuance of extraordinary event bonds and the imposition and collection
of extraordinary event charges:
new text end

new text begin (i) are just and reasonable;
new text end

new text begin (ii) are consistent with the public interest;
new text end

new text begin (iii) constitute a prudent and reasonable mechanism to finance the extraordinary event
costs; and
new text end

new text begin (iv) provide tangible and quantifiable benefits to customers that exceed the benefits that
would have been achieved absent the issuance of extraordinary event bonds; and
new text end

new text begin (3) the proposed structuring, marketing, and pricing of the extraordinary event bonds:
new text end

new text begin (i) significantly lower overall costs to customers or significantly mitigate rate impacts
to customers relative to traditional methods of financing; and
new text end

new text begin (ii) achieve significant customer savings or significant mitigation of rate impacts to
customers, as determined by the commission in a financing order, consistent with market
conditions at the time of sale and the terms of the financing order.
new text end

new text begin Subd. 3. new text end

new text begin Contents. new text end

new text begin (a) A financing order issued under this section must:
new text end

new text begin (1) determine the maximum amount of extraordinary event costs that may be financed
from proceeds of extraordinary event bonds issued pursuant to the financing order;
new text end

new text begin (2) describe the proposed customer billing mechanism for extraordinary event charges
and include a finding that the mechanism is just and reasonable;
new text end

new text begin (3) describe the financing costs that may be recovered through extraordinary event
charges and the period over which the costs may be recovered, which must end no earlier
than the date of final legal maturity of the extraordinary event bonds;
new text end

new text begin (4) describe the extraordinary event property that is created and that may be used to pay,
and secure the payment of, the extraordinary event bonds and financing costs authorized in
the financing order;
new text end

new text begin (5) authorize the utility to finance extraordinary event costs through the issuance of one
or more series of extraordinary event bonds. A utility is not required to secure a separate
financing order for each issuance of extraordinary event bonds or for each scheduled phase
of the replacement of natural gas facilities approved in the financing order;
new text end

new text begin (6) include a formula-based mechanism that must be used to make expeditious periodic
adjustments to the extraordinary event charge authorized by the financing order that are
necessary to correct for any overcollection or undercollection, or to otherwise guarantee
the timely payment of extraordinary event bonds, financing costs, and other required amounts
and charges payable in connection with extraordinary event bonds;
new text end

new text begin (7) specify the degree of flexibility afforded to the utility in establishing the terms and
conditions of the extraordinary event bonds, including but not limited to repayment schedules,
expected interest rates, and other financing costs;
new text end

new text begin (8) specify that the extraordinary event bonds must be issued as soon as feasible following
issuance of the financing order;
new text end

new text begin (9) require the utility, at the same time as extraordinary event charges are initially
collected and independent of the schedule to close and decommission any natural gas facility
replaced as the result of an extraordinary event, to remove the natural gas facility from the
utility's rate base and commensurately reduce the utility's base rates;
new text end

new text begin (10) specify a future ratemaking process to reconcile any difference between the projected
pretax costs included in the amount financed by extraordinary event bonds and the final
actual pretax costs incurred by the utility to retire or replace the natural gas facility;
new text end

new text begin (11) specify information regarding bond issuance and repayments, financing costs,
energy transaction charges, extraordinary event property, and related matters that the natural
gas utility is required to provide to the commission on a schedule determined by the
commission;
new text end

new text begin (12) allow and may require the creation of a utility's extraordinary event property to be
conditioned on, and occur simultaneously with, the sale or other transfer of the extraordinary
event property to an assignee and the pledge of the extraordinary event property to secure
the extraordinary event bonds;
new text end

new text begin (13) ensure that the structuring, marketing, and pricing of extraordinary event bonds
result in reasonable securitization bond charges and significant customer savings or rate
impact mitigation, consistent with market conditions and the terms of the financing order;
and
new text end

new text begin (14) specify that a utility financing the replacement of one or more natural gas facilities
after the natural gas facilities subject to the finance order are removed from the utility's rate
base is prohibited from:
new text end

new text begin (i) operating the natural gas facilities; or
new text end

new text begin (ii) selling the natural gas facilities to another entity to be operated as natural gas facilities.
new text end

new text begin (b) A financing order issued under this section may:
new text end

new text begin (1) include conditions different from those requested in the application that the
commission determines are necessary to:
new text end

new text begin (i) promote the public interest; and
new text end

new text begin (ii) maximize the financial benefits or minimize the financial risks of the transaction to
customers and to directly impacted Minnesota workers and communities; and
new text end

new text begin (2) specify the selection of one or more underwriters of the extraordinary event bonds.
new text end

new text begin Subd. 4. new text end

new text begin Duration; irrevocability; subsequent order. new text end

new text begin (a) A financing order remains
in effect until the extraordinary event bonds issued under the financing order and all financing
costs related to the bonds have been paid in full.
new text end

new text begin (b) A financing order remains in effect and unabated notwithstanding the bankruptcy,
reorganization, or insolvency of the utility to which the financing order applies or any
affiliate, successor, or assignee of the utility to which the financing order applies.
new text end

new text begin (c) Subject to judicial review under section 216B.52, a financing order is irrevocable
and is not reviewable by a future commission. The commission may not reduce, impair,
postpone, or terminate extraordinary event charges approved in a financing order, or impair
extraordinary event property or the collection or recovery of extraordinary event revenue.
new text end

new text begin (d) Notwithstanding paragraph (c), the commission may, on the commission's own
motion or at the request of a utility or any other person, commence a proceeding and issue
a subsequent financing order that provides for refinancing, retiring, or refunding extraordinary
event bonds issued under the original financing order if:
new text end

new text begin (1) the commission makes all of the findings specified in subdivision 2 with respect to
the subsequent financing order; and
new text end

new text begin (2) the modification contained in the subsequent financing order does not in any way
impair the covenants and terms of the extraordinary event bonds being refinanced, retired,
or refunded.
new text end

new text begin Subd. 5. new text end

new text begin Effect on commission jurisdiction. new text end

new text begin (a) Except as provided in paragraph (b),
the commission, in exercising the powers and carrying out the duties under this section, is
prohibited from:
new text end

new text begin (1) considering extraordinary event bonds issued under this section to be debt of the
utility other than for income tax purposes, unless it is necessary to consider the extraordinary
event bonds to be debt in order to achieve consistency with prevailing utility debt rating
methodologies;
new text end

new text begin (2) considering the extraordinary event charges paid under the financing order to be
revenue of the utility;
new text end

new text begin (3) considering the extraordinary event or financing costs specified in the financing
order to be the regulated costs or assets of the utility; or
new text end

new text begin (4) determining that any prudent action taken by a utility that is consistent with the
financing order is unjust or unreasonable.
new text end

new text begin (b) Nothing in this subdivision:
new text end

new text begin (1) affects the authority of the commission to apply or modify any billing mechanism
designed to recover extraordinary event charges;
new text end

new text begin (2) prevents or precludes the commission from (i) investigating a utility's compliance
with the terms and conditions of a financing order, and (ii) requiring compliance with the
financing order; or
new text end

new text begin (3) prevents or precludes the commission from imposing regulatory sanctions against a
utility for failure to comply with the terms and conditions of a financing order or the
requirements of this section.
new text end

new text begin (c) The commission is prohibited from refusing to allow a utility to recover any costs
associated with the replacement of natural gas facilities solely because the utility has elected
to finance the natural gas facility replacement through a financing mechanism other than
extraordinary event bonds.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 10.

new text begin [216B.493] POSTORDER COMMISSION DUTIES.
new text end

new text begin Subdivision 1. new text end

new text begin Financing cost review. new text end

new text begin Within 120 days after the date extraordinary
event bonds are issued, a utility subject to a financing order must file with the commission
the actual initial and ongoing financing costs, the final structure and pricing of the
extraordinary event bonds, and the actual extraordinary event charge. The commission must
review the prudence of the natural gas utility's actions to determine whether the actual
financing costs were the lowest that could reasonably be achieved given the terms of the
financing order and market conditions prevailing at the time of the bond's issuance.
new text end

new text begin Subd. 2. new text end

new text begin Enforcement. new text end

new text begin If the commission determines that a utility's actions under this
section are not prudent or are inconsistent with the financing order, the commission may
apply any remedies available, provided that any remedy applied may not directly or indirectly
impair the security for the extraordinary event bonds.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 11.

new text begin [216B.494] USE OF OUTSIDE EXPERTS.
new text end

new text begin (a) In carrying out the duties under this section, the commission may:
new text end

new text begin (1) contract with outside consultants and counsel experienced in securitized utility
customer-backed bond financing similar to extraordinary event bonds; and
new text end

new text begin (2) hire and compensate additional temporary staff as needed.
new text end

new text begin Expenses incurred by the commission under this paragraph must be treated as financing
costs and included in the extraordinary event charge. The costs incurred under clause (1)
are not an obligation of the state and are assigned solely to the transaction.
new text end

new text begin (b) A utility presented with a written request from the commission for reimbursement
of the commission's expenses incurred under paragraph (a), accompanied by a detailed
account of those expenses, must remit full payment of the expenses to the commission
within 30 days of receiving the request.
new text end

new text begin (c) If a utility's application for a financing order is denied or withdrawn for any reason
and extraordinary event bonds are not issued, the commission's costs to retain expert
consultants under this section must be paid by the applicant utility and are deemed to be
prudent deferred expenses eligible for recovery in the utility's future rates.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 12.

new text begin [216B.495] EXTRAORDINARY EVENT CHARGE; BILLING
TREATMENT.
new text end

new text begin (a) A utility that obtains a financing order and causes extraordinary event bonds to be
issued must:
new text end

new text begin (1) include on each customer's monthly natural gas bill:
new text end

new text begin (i) a statement that a portion of the charges represents extraordinary event charges
approved in a financing order;
new text end

new text begin (ii) the amount and rate of the extraordinary event charge as a separate line item titled
"extraordinary event charge"; and
new text end

new text begin (iii) if extraordinary event property has been transferred to an assignee, a statement that
the assignee is the owner of the rights to extraordinary event charges and that the utility or
other entity, if applicable, is acting as a collection agent or servicer for the assignee; and
new text end

new text begin (2) file annually with the commission:
new text end

new text begin (i) a calculation of the impact of financing the retirement or replacement of natural gas
facilities on customer rates, itemized by customer class; and
new text end

new text begin (ii) evidence demonstrating that extraordinary event revenues are applied solely to the
repayment of extraordinary event bonds and other financing costs.
new text end

new text begin (b) Extraordinary event charges are nonbypassable and must be paid by all existing and
future customers receiving service from the utility or the utility's successors or assignees
under commission-approved rate schedules or special contracts.
new text end

new text begin (c) A utility's failure to comply with this section does not invalidate, impair, or affect
any financing order, extraordinary event property, extraordinary event charge, or
extraordinary event bonds, but does subject the utility to penalties under applicable
commission rules.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 13.

new text begin [216B.496] EXTRAORDINARY EVENT PROPERTY.
new text end

new text begin Subdivision 1. new text end

new text begin General. new text end

new text begin (a) Extraordinary event property is an existing present property
right or interest in a property right, even though the imposition and collection of extraordinary
event charges depend on the utility collecting extraordinary event charges and on future
natural gas consumption. The property right or interest exists regardless of whether the
revenues or proceeds arising from the extraordinary event property have been billed, have
accrued, or have been collected.
new text end

new text begin (b) Extraordinary event property exists until all extraordinary event bonds issued under
a financing order are paid in full and all financing costs and other costs of the extraordinary
event bonds have been recovered in full.
new text end

new text begin (c) All or any portion of extraordinary event property described in a financing order
issued to a utility may be transferred, sold, conveyed, or assigned to a successor or assignee
that is wholly owned, directly or indirectly, by the utility and is created for the limited
purpose of acquiring, owning, or administering extraordinary event property or issuing
extraordinary event bonds authorized by the financing order. All or any portion of
extraordinary event property may be pledged to secure extraordinary event bonds issued
under a financing order, amounts payable to financing parties and to counterparties under
any ancillary agreements, and other financing costs. Each transfer, sale, conveyance,
assignment, or pledge by a utility or an affiliate of extraordinary event property is a
transaction in the ordinary course of business.
new text end

new text begin (d) If a utility defaults on any required payment of charges arising from extraordinary
event property described in a financing order, a court, upon petition by an interested party
and without limiting any other remedies available to the petitioner, must order the
sequestration and payment of the revenues arising from the extraordinary event property to
the financing parties.
new text end

new text begin (e) The interest of a transferee, purchaser, acquirer, assignee, or pledgee in extraordinary
event property specified in a financing order issued to a utility, and in the revenue and
collections arising from the property, is not subject to setoff, counterclaim, surcharge, or
defense by the utility or any other person, or in connection with the reorganization,
bankruptcy, or other insolvency of the utility or any other entity.
new text end

new text begin (f) A successor to a utility, whether resulting from a reorganization, bankruptcy, or other
insolvency proceeding; merger or acquisition; sale; other business combination; transfer by
operation of law; utility restructuring; or otherwise, must perform and satisfy all obligations
of, and has the same duties and rights under, a financing order as the utility to which the
financing order applies. A successor to a utility must perform the duties and exercise the
rights in the same manner and to the same extent as the utility, including collecting and
paying to any person entitled to receive revenues, collections, payments, or proceeds of
extraordinary event property.
new text end

new text begin Subd. 2. new text end

new text begin Security interests in extraordinary event property. new text end

new text begin (a) The creation,
perfection, and enforcement of any security interest in extraordinary event property to secure
the repayment of the principal and interest on extraordinary event bonds, amounts payable
under any ancillary agreement, and other financing costs are governed solely by this section.
new text end

new text begin (b) A security interest in extraordinary event property is created, valid, and binding
when:
new text end

new text begin (1) the financing order that describes the extraordinary event property is issued;
new text end

new text begin (2) a security agreement is executed and delivered; and
new text end

new text begin (3) value is received for the extraordinary event bonds.
new text end

new text begin (c) Once a security interest in extraordinary event property is created, the security interest
attaches without any physical delivery of collateral or any other act. The lien of the security
interest is valid, binding, and perfected against all parties having claims of any kind in tort,
contract, or otherwise against the person granting the security interest, regardless of whether
the parties have notice of the lien, upon the filing of a financing statement with the secretary
of state.
new text end

new text begin (d) The description or indication of extraordinary event property in a transfer or security
agreement and a financing statement is sufficient only if the description or indication refers
to this section and the financing order creating the extraordinary event property.
new text end

new text begin (e) A security interest in extraordinary event property is a continuously perfected security
interest and has priority over any other lien, created by operation of law or otherwise, which
may subsequently attach to the extraordinary event property unless the holder of the security
interest has agreed otherwise in writing.
new text end

new text begin (f) The priority of a security interest in extraordinary event property is not affected by
the commingling of extraordinary event property or extraordinary event revenue with other
money. An assignee, bondholder, or financing party has a perfected security interest in the
amount of all extraordinary event property or extraordinary event revenue that is pledged
to pay extraordinary event bonds, even if the extraordinary event property or extraordinary
event revenue is deposited in a cash or deposit account of the utility in which the
extraordinary event revenue is commingled with other money. Any other security interest
that applies to the other money does not apply to the extraordinary event revenue.
new text end

new text begin (g) Neither a subsequent commission order amending a financing order under section
216B.492, subdivision 4, nor application of an adjustment mechanism authorized by a
financing order under section 216B.492, subdivision 3, affects the validity, perfection, or
priority of a security interest in or transfer of extraordinary event property.
new text end

new text begin (h) A valid and enforceable security interest in extraordinary event property is perfected
only when the security interest has attached and when a financing order has been filed with
the secretary of state in accordance with procedures established by the secretary of state.
The financing order must name the pledgor of the extraordinary event property as debtor
and identify the property.
new text end

new text begin Subd. 3. new text end

new text begin Sales of extraordinary event property. new text end

new text begin (a) A sale, assignment, or transfer of
extraordinary event property is an absolute transfer and true sale of, and not a pledge of or
secured transaction relating to, the seller's right, title, and interest in, to, and under the
extraordinary event property if the documents governing the transaction expressly state that
the transaction is a sale or other absolute transfer. A transfer of an interest in extraordinary
event property may be created when:
new text end

new text begin (1) the financing order creating and describing the extraordinary event property is
effective;
new text end

new text begin (2) the documents evidencing the transfer of the extraordinary event property are executed
and delivered to the assignee; and
new text end

new text begin (3) value is received.
new text end

new text begin (b) A transfer of an interest in extraordinary event property must be filed with the
secretary of state against all third persons and perfected under sections 336.3-301 to
336.3-312, including any judicial lien or other lien creditors or any claims of the seller or
creditors of the seller, other than creditors holding a prior security interest, ownership
interest, or assignment in the extraordinary event property previously perfected under this
subdivision or subdivision 2.
new text end

new text begin (c) The characterization of a sale, assignment, or transfer as an absolute transfer and
true sale, and the corresponding characterization of the property interest of the assignee, is
not affected or impaired by:
new text end

new text begin (1) commingling of extraordinary event revenue with other money;
new text end

new text begin (2) the retention by the seller of:
new text end

new text begin (i) a partial or residual interest, including an equity interest, in the extraordinary event
property, whether direct or indirect, or whether subordinate or otherwise; or
new text end

new text begin (ii) the right to recover costs associated with taxes, franchise fees, or license fees imposed
on the collection of extraordinary event revenue;
new text end

new text begin (3) any recourse that the purchaser may have against the seller;
new text end

new text begin (4) any indemnification rights, obligations, or repurchase rights made or provided by
the seller;
new text end

new text begin (5) an obligation of the seller to collect extraordinary event revenues on behalf of an
assignee;
new text end

new text begin (6) the treatment of the sale, assignment, or transfer for tax, financial reporting, or other
purposes;
new text end

new text begin (7) any subsequent financing order amending a financing order under section 216B.492,
subdivision 4, paragraph (d); or
new text end

new text begin (8) any application of an adjustment mechanism under section 216B.492, subdivision
3, paragraph (a), clause (6).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 14.

new text begin [216B.497] EXTRAORDINARY EVENT BONDS.
new text end

new text begin (a) Banks, trust companies, savings and loan associations, insurance companies, executors,
administrators, guardians, trustees, and other fiduciaries may legally invest any money
within the individual's or entity's control in extraordinary event bonds.
new text end

new text begin (b) Extraordinary event bonds issued under a financing order are not debt of or a pledge
of the faith and credit or taxing power of the state, any agency of the state, or any political
subdivision. Holders of extraordinary event bonds may not have taxes levied by the state
or a political subdivision in order to pay the principal or interest on extraordinary event
bonds. The issuance of extraordinary event bonds does not directly, indirectly, or contingently
obligate the state or a political subdivision to levy any tax or make any appropriation to pay
principal or interest on the extraordinary event bonds.
new text end

new text begin (c) The state pledges to and agrees with holders of extraordinary event bonds, any
assignee, and any financing parties that the state will not:
new text end

new text begin (1) take or permit any action that impairs the value of extraordinary event property; or
new text end

new text begin (2) reduce, alter, or impair extraordinary event charges that are imposed, collected, and
remitted for the benefit of holders of extraordinary event bonds, any assignee, and any
financing parties until any principal, interest, and redemption premium payable on
extraordinary event bonds, all financing costs, and all amounts to be paid to an assignee or
financing party under an ancillary agreement are paid in full.
new text end

new text begin (d) A person who issues extraordinary event bonds may include the pledge specified in
paragraph (c) in the extraordinary event bonds, ancillary agreements, and documentation
related to the issuance and marketing of the extraordinary event bonds.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 15.

new text begin [216B.498] ASSIGNEE OF FINANCING PARTY NOT SUBJECT TO
COMMISSION REGULATION.
new text end

new text begin An assignee or financing party that is not already regulated by the commission does not
become subject to commission regulation solely as a result of engaging in any transaction
authorized by or described in sections 216B.491 to 216B.499.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 16.

new text begin [216B.499] EFFECT ON OTHER LAWS.
new text end

new text begin (a) If any provision of sections 216B.491 to 216B.499 conflicts with any other law
regarding the attachment, assignment, perfection, effect of perfection, or priority of any
security interest in or transfer of extraordinary event property, sections 216B.491 to 216B.499
govern.
new text end

new text begin (b) Nothing in this section precludes a utility for which the commission has initially
issued a financing order from applying to the commission for:
new text end

new text begin (1) a subsequent financing order amending the financing order under section 216B.492,
subdivision 4, paragraph (d); or
new text end

new text begin (2) approval to issue extraordinary event bonds to refund all or a portion of an outstanding
series of extraordinary event bonds.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 17.

Minnesota Statutes 2020, section 216B.50, subdivision 1, is amended to read:

Subdivision 1.

Commission approval required.

No public utility shall sell, acquire,
lease, or rent any plant as an operating unit or system in this state for a total consideration
in excess of deleted text begin $100,000 deleted text end new text begin $1,000,000 new text end , or merge or consolidate with another public utility or
transmission company operating in this state, without first being authorized so to do by the
commission. Upon the filing of an application for the approval and consent of the
commission, the commission shall investigate, with or without public hearing. The
commission shall hold a public hearing, upon such notice as the commission may require.
If the commission finds that the proposed action is consistent with the public interest, it
shall give its consent and approval by order in writing. In reaching its determination, the
commission shall take into consideration the reasonable value of the property, plant, or
securities to be acquired or disposed of, or merged and consolidated.

This section does not apply to the purchase of property to replace or add to the plant of
the public utility by construction.

Sec. 18.

Minnesota Statutes 2021 Supplement, section 216C.376, subdivision 5, is amended
to read:

Subd. 5.

Program funding.

(a) In 2022, the public utility subject to section 116C.779
must withhold $8,000,000 from the transfer made under section 116C.779, subdivision 1,
paragraph (e), to pay for assistance provided by the program under this section. new text begin In 2024,
the amount that must be withheld is $8,000,000. new text end The money withheld under this paragraph
must be used to pay for financial assistance awarded under this section and the costs to
administer this section. Any money that remains unexpended deleted text begin on June 30, 2027, deleted text end new text begin five years
after the money is withheld new text end cancels to the renewable development account.

(b) The renewable energy credits associated with the electricity generated by a solar
energy system installed under this section are the property of the public utility that is subject
to this section for the life of the system, regardless of the duration of the financial assistance
provided by the public utility under this section.

Sec. 19.

Minnesota Statutes 2020, section 216C.435, subdivision 8, is amended to read:

Subd. 8.

Qualifying commercial real property.

"Qualifying commercial real property"
means a multifamily residential dwelling, deleted text begin or deleted text end a commercial or industrial building, new text begin or farmland new text end
that the implementing entity has determined, after review of an energy audit deleted text begin or deleted text end new text begin , new text end renewable
energy system feasibility study, new text begin or agronomic assessment, new text end can deleted text begin be benefited by deleted text end new text begin benefit from
the new text end installation of cost-effective energy improvements new text begin or land and water improvements, as
defined in section 216C.436, subdivision 1b new text end . Qualifying commercial real property includes
new construction.

Sec. 20.

Minnesota Statutes 2020, section 216C.436, is amended by adding a subdivision
to read:

new text begin Subd. 1b. new text end

new text begin Definition. new text end

new text begin For the purposes of this section, "land and water improvements"
means:
new text end

new text begin (1) any improvement to qualifying farmland, as defined in section 273.13, subdivision
23, that is permanent in nature, results in improved agricultural productivity or resiliency,
and reduces environmental impact; or
new text end

new text begin (2) water conservation measures, which includes permanently affixed equipment,
appliances, or improvements that reduce a property's water consumption or that enable the
property to manage water more efficiently.
new text end

Sec. 21.

Minnesota Statutes 2020, section 216C.436, subdivision 2, is amended to read:

Subd. 2.

Program requirements.

A commercial PACE loan program must:

(1) impose requirements and conditions on financing arrangements to ensure timely
repayment;

(2) require an energy audit or renewable energy system feasibility study to be conducted
on the qualifying commercial real property and reviewed by the implementing entity prior
to approval of the financing;

(3) require the inspection of all installations and a performance verification of at least
ten percent of the cost-effective energy improvements new text begin or land and water improvements new text end
financed by the program;

(4) not prohibit the financing of all cost-effective energy improvements new text begin or land and
water improvements new text end not otherwise prohibited by this section;

(5) require that all cost-effective energy improvements new text begin or land and water improvements new text end
be made to a qualifying commercial real property prior to, or in conjunction with, an
applicant's repayment of financing for cost-effective energy improvements for that property;

(6) have cost-effective energy improvements new text begin or land and water improvements new text end financed
by the program performed by a licensed contractor as required by chapter 326B or other
law or ordinance;

(7) require disclosures to borrowers by the implementing entity of the risks involved in
borrowing, including the risk of foreclosure if a tax delinquency results from a default;

(8) provide financing only to those who demonstrate an ability to repay;

(9) not provide financing for a qualifying commercial real property in which the owner
is not current on mortgage or real property tax payments;

(10) require a petition to the implementing entity by all owners of the qualifying
commercial real property requesting collections of repayments as a special assessment under
section 429.101;

(11) provide that payments and assessments are not accelerated due to a default and that
a tax delinquency exists only for assessments not paid when due; deleted text begin and
deleted text end

(12) require that liability for special assessments related to the financing runs with the
qualifying commercial real property new text begin ; and
new text end

new text begin (13) prior to financing any improvements to or imposing any assessment upon qualifying
commercial real property, require notice to and written consent from the mortgage lender
of any mortgage encumbering or otherwise secured by the qualifying commercial real
property new text end .

Sec. 22.

new text begin [216H.022] CARBON CAPTURE AND SEQUESTRATION; STATE
POLICY.
new text end

new text begin It is the policy of the state to support the development and deployment of carbon capture
and sequestration technologies in Minnesota as a method of reducing greenhouse gas
emissions in order to achieve the state greenhouse gas emission-reduction goals established
under section 216H.02, subdivision 1.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 23.

Minnesota Statutes 2020, section 237.55, is amended to read:

237.55 ANNUAL REPORT ON TELECOMMUNICATIONS ACCESS.

The commissioner of commerce must prepare a report for presentation to the Public
Utilities Commission by deleted text begin January deleted text end new text begin March new text end 31 deleted text begin of deleted text end each year. Each report must review the
accessibility of telecommunications services to persons who have communication disabilities,
describe services provided, account for annual revenues and expenditures for each aspect
of the fund to date, and include predicted program future operation.

Sec. 24.

new text begin [465.485] BAN ON NATURAL GAS AND PROPANE HOOKUPS;
PROHIBITION.
new text end

new text begin A political subdivision is prohibited from adopting an ordinance, resolution, code, policy,
or permit requirement that prohibits or has the effect of preventing a utility from (1)
connecting or reconnecting natural gas or propane to any building, or (2) supplying natural
gas or propane to any building or utility customer.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 25.

Laws 2020, chapter 118, section 5, subdivision 1, is amended to read:

Subdivision 1.

Community energy transition grants.

(a) Notwithstanding Minnesota
Statutes, section 116C.779, subdivision 1, paragraph (j), $2,000,000 in fiscal year 2021 is
appropriated from the renewable development account established in Minnesota Statutes,
section 116C.779, subdivision 1, to the commissioner of employment and economic
development for deposit in the community energy transition account established in Minnesota
Statutes, section 116J.55, subdivision 3. This is a onetime appropriation and is available
until June 30, deleted text begin 2022 deleted text end new text begin 2025 new text end .

(b) If another bill is enacted during the 2020 regular legislative session that appropriates
money from the renewable development account established in Minnesota Statutes, section
116C.779, subdivision 1, for the same general purpose as provided under Minnesota Statutes,
section 116J.55, the appropriation under this subdivision cancels to the renewable
development account under Minnesota Statutes, section 116C.779, subdivision 1.

Sec. 26.

Laws 2021, First Special Session chapter 4, article 2, section 3, subdivision 1, is
amended to read:

Subdivision 1. Total Appropriation

$

deleted text begin 4,825,000 deleted text end new text begin 4,325,000 new text end

$

deleted text begin 1,800,000 deleted text end new text begin 1,300,000 new text end

The amounts that may be spent for each
purpose are specified in the following
subdivisions.

Sec. 27. new text begin ADVANCED NUCLEAR STUDY.
new text end

new text begin Subdivision 1. new text end

new text begin Study required. new text end

new text begin (a) The commissioner of commerce must conduct a
study evaluating the potential costs, benefits, and impacts of advanced nuclear technology
reactor power generation in Minnesota.
new text end

new text begin (b) At a minimum, the study must address the potential costs, benefits, and impacts of
advanced nuclear technology reactor power generation on:
new text end

new text begin (1) Minnesota's greenhouse gas emissions reduction goals under the Next Generation
Energy Act, Laws 2007, chapter 136;
new text end

new text begin (2) system costs for ratepayers;
new text end

new text begin (3) system reliability;
new text end

new text begin (4) the environment;
new text end

new text begin (5) local jobs; and
new text end

new text begin (6) local economic development.
new text end

new text begin (c) The study must also evaluate:
new text end

new text begin (1) current Minnesota statutes and administrative rules that would require modifications
in order to enable the construction and operation of advanced nuclear reactors; and
new text end

new text begin (2) the economic feasibility of replacing coal-fired boilers with advanced nuclear reactors,
while accounting for the avoided costs that result from the closure of coal-fired plants.
new text end

new text begin Subd. 2. new text end

new text begin Report. new text end

new text begin The commissioner of commerce must submit the results of the study
under subdivision 1 to the chairs and ranking minority members of the legislative committees
having jurisdiction over energy finance and policy no later than January 31, 2023.
new text end

Sec. 28. new text begin DECOMMISSIONING AND DEMOLITION PLAN FOR COAL-FIRED
PLANT.
new text end

new text begin As a part of the next resource plan filing under Minnesota Statutes, section 216B.2422,
subdivision 2, but no later than December 31, 2025, the public utility that owns an electric
generation facility that is powered by coal, scheduled for retirement in 2028, and located
within the St. Croix National Scenic Riverway must provide, to the extent known, the public
utility's plan and a detailed timeline to decommission and demolish the electric generation
facility and remediate pollution at the electric generation facility site. The public utility
must also provide a copy of the plan and timeline to the governing body of the municipality
where the electric generation facility is located on the same date the plan and timeline are
submitted to the Public Utilities Commission. If a resource plan is not filed or required
before December 31, 2025, the plan and timeline must be submitted to the Public Utilities
Commission and the municipality as a separate filing by December 31, 2025.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 29. new text begin APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Advanced nuclear study. new text end

new text begin $150,000 in fiscal year 2023 is appropriated
from the general fund to the commissioner of commerce to conduct an advanced nuclear
study and develop a report. This is a onetime appropriation.
new text end

new text begin Subd. 2. new text end

new text begin Solar for schools. new text end

new text begin $4,150,000 in fiscal year 2023 is appropriated from the
general fund to the commissioner of commerce to provide financial assistance to schools
to purchase and install solar energy generating systems under Minnesota Statutes, section
216C.375. This appropriation must be expended on schools located outside the electric
service territory of the public utility that is subject to Minnesota Statutes, section 116C.779.
This appropriation is available until June 30, 2028. The base amount for fiscal year 2024
is $5,700,000. The base amount for fiscal year 2025 is $0.
new text end

new text begin Subd. 3. new text end

new text begin Granite Falls hydroelectric generating facility. new text end

new text begin Notwithstanding Minnesota
Statutes, section 116C.779, subdivision 1, paragraph (j), $2,290,000 is appropriated in fiscal
year 2023 from the renewable development account established under Minnesota Statutes,
section 116C.779, subdivision 1, to the commissioner of commerce for a grant to the city
of Granite Falls for repair and overage costs related to the city's existing hydroelectric
generating facility. This is a onetime appropriation. Any amount of the appropriation under
this paragraph that remains unexpended on June 30, 2024, must be returned to the renewable
development account.
new text end

new text begin Subd. 4. new text end

new text begin Community energy transition grants. new text end

new text begin $3,500,000 in fiscal year 2023 is
appropriated from the renewable development account to the commissioner of employment
and economic development. This appropriation is available only for grants to eligible
communities located within the service territory of the public utility subject to Minnesota
Statutes, section 116C.779. This is a onetime appropriation and is available until expended.
new text end

new text begin Subd. 5. new text end

new text begin National Sports Center solar array. new text end

new text begin Notwithstanding Minnesota Statutes,
section 116C.779, subdivision 1, paragraph (j), $3,500,000 in fiscal year 2023 is appropriated
from the renewable development account to the Minnesota Amateur Sports Commission to
install solar arrays. This appropriation may be used to install solar arrays on an ice rink and
a maintenance facility at the National Sports Center in Blaine. This is a onetime appropriation.
new text end

Sec. 30. new text begin REPEALER.
new text end

new text begin Laws 2005, chapter 97, article 10, section 3, as amended by Laws 2013, chapter 85,
article 7, section 9; and Laws 2021, First Special Session chapter 4, article 2, section 3,
subdivision 3, new text end new text begin are repealed.
new text end

APPENDIX

Repealed Minnesota Session Laws: S4269-1

Laws 2005, chapter 97, article 10, section 3, as amended by Laws 2013, chapter 85, article 7, section 9

Sec. 9.

Laws 2005, chapter 97, article 10, section 3, is amended to read:

Sec. 3. SUNSET.

Sections 1 and 2 shall expire on June 30, 2023.

Laws 2021, First Special Session chapter 4, article 2, section 3, subdivision 3

Sec. 3. new text begin DEPARTMENT OF COMMERCE new text end

new text begin Subd. 3. new text end new text begin Third-Party Evaluator new text end

new text begin $500,000 each year is for costs associated with any third-party expert evaluation of a proposal submitted in response to a request for proposal to the Renewable Development Advisory Group under Minnesota Statutes, section 116C.779, subdivision 1, paragraph (l). No portion of this appropriation may be expended or retained by the commissioner of commerce. Any money appropriated under this paragraph that is unexpended at the end of a fiscal year cancels to the renewable development account. new text end