Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1998, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 380-H.F.No. 3654
An act relating to utilities; modifying the membership
of the legislative electric energy task force;
requiring comprehensive study of electric industry
restructuring; requiring establishment of technical
advisory work groups; authorizing task force to use
its assessment authority to fund work group
activities; requiring reports; amending Minnesota
Statutes 1997 Supplement, section 216C.051,
subdivision 2.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1997 Supplement, section
216C.051, subdivision 2, is amended to read:
Subd. 2. [ESTABLISHMENT.] (a) There is established a
legislative electric energy task force to study future electric
energy sources and costs and to make recommendations for
legislation for an environmentally and economically sustainable
and advantageous electric energy supply.
(b) The task force consists of:
(1) ten members of the house of representatives including
the chairs of the environment and natural resources and
regulated industries and energy committees and six eight members
to be appointed by the speaker of the house, four of whom must
be from the minority caucus; and
(2) ten members of the senate including the chairs of the
environment and natural resources and jobs, energy, and
community development committees and six eight members to be
appointed by the subcommittee on committees, four of whom must
be from the minority caucus.
(c) The task force may employ staff, contract for
consulting services, and may reimburse the expenses of persons
requested to assist it in its duties other than state employees
or employees of electric utilities. The director of the
legislative coordinating commission shall assist the task force
in administrative matters. The task force shall elect cochairs,
one member of the house and one member of the senate from among
the committee chairs named to the committee. The task force
members from the house shall elect the house cochair, and the
task force members from the senate shall elect the senate
cochair.
Sec. 2. [LEGISLATIVE ELECTRIC ENERGY TASK FORCE; SPECIFIC
RESTRUCTURING ISSUES.]
Subdivision 1. [BULK POWER SYSTEM RELIABILITY,
INFRASTRUCTURE, AND REGULATION.] The legislative electric energy
task force shall solicit and analyze information on the
following issues relating to bulk power system reliability,
infrastructure, and regulation:
(1) When will the bulk power system be capable of reliably
supporting the volume of power transactions that would result
from implementation of retail competition?
(2) What modifications to the bulk power system and its
management are necessary to ensure that retail competition in
the state's electric industry does not diminish the reliability
of electric service, and what is the estimated cost of those
modifications?
(3) What options and alternatives can customers and power
suppliers in the state and in the region use to ensure the
independent operation and competitively neutral management of
the bulk power grid, and what are the advantages and
disadvantages associated with each option or alternative?
(4) What market infrastructure developments are necessary
or useful in supporting trade and competition in a reliable
electricity market, and what are the advantages and
disadvantages associated with each approach?
(5) What are the regulatory and legal means the state could
use to ensure the low cost, competitively neutral, and fair
utilization of the bulk power system and any market
infrastructure created or sanctioned by the state, and how
should the state address issues of overlapping state, federal,
and international jurisdictions in a regional electricity market?
Subd. 2. [DISTRIBUTION RELIABILITY, SAFETY, AND
MAINTENANCE.] The legislative electric energy task force shall
analyze the following issues relating to distribution
reliability, safety, and maintenance in a competitive
electricity market:
(1) What safety standards should be used to ensure
reliability, safety, and efficient operation of the distribution
system?
(2) What options are available to identify and establish
the respective rights and responsibilities of distribution
utilities, consumers, and competitive power suppliers regarding
electricity reliability and continuity of service?
(3) What alternatives can be used, or standards developed,
to address issues relating to the provision of billing,
metering, and customer service?
Subd. 3. [ENERGY PRICES AND PRICE PROTECTION
MECHANISMS.] The legislative electric energy task force shall:
(1) solicit and analyze information of the potential
benefits and costs of the implementation of retail competition
in the state, as well as an evaluation and analysis as to how
costs and benefits might be distributed, and might be expected
to change over time;
(2) develop a comparison and evaluation of alternative
mechanisms to protect consumers from unwarranted potential price
increases that may be attributable to electric industry
deregulation during a transition to a competitive energy market;
and
(3) develop a comparison and evaluation of various means to
ensure that prices offered by competitors are nondiscriminatory
and that all customer classes benefit from competition.
Subd. 4. [UNIVERSAL SERVICE.] The legislative electric
energy task force shall analyze issues relating to the provision
of universal energy service in the state, with special emphasis
on ensuring affordable service for rural and low-income energy
consumers, and develop:
(1) a needs assessment of the number of low-income
individuals and households at or below 150 percent of the
federal poverty guidelines and the average energy burden of
these individuals and households, expressed as the percentage of
overall income dedicated to the payment of energy costs;
(2) an evaluation of alternative, nonbypassable,
competitively neutral funding mechanisms to finance programs to
reduce the energy burden of low-income customers;
(3) alternatives regarding program design, administration,
outreach, and participation goals for bill payment and energy
conservation assistance;
(4) an evaluation of alternatives for ensuring affordable
service for individuals who do not or cannot choose an alternate
energy supplier, including default supplier and provider of last
resort options; and
(5) an evaluation of options to ensure that rural energy
consumers continue to receive affordable, high-quality energy
service and participate in any benefits attributable to
increased competition.
Subd. 5. [INFORMATION DISCLOSURE AND CONSUMER PROTECTION.]
The legislative electric energy task force shall analyze issues
relating to information disclosure and consumer protection and
develop:
(1) an evaluation of alternative standards and means of
providing all consumers with information sufficient to support
an informed choice of electricity provider in a competitive
environment regarding: (i) price, terms, and conditions of
service; and (ii) environmental information; and
(2) recommendations regarding consumer protection standards
and practices sufficient to prevent consumer fraud and abuse
while supporting effective competition.
Subd. 6. [RENEWABLE ENERGY, EFFICIENCY, AND ENVIRONMENTAL
SUSTAINABILITY.] (a) The legislative electric energy task force
shall analyze issues of renewable energy, efficiency, and
environmental sustainability, and develop an assessment of
alternatives the state could take, whether alone or as part of a
regional compact, or as part of a national mandate, to encourage
energy efficiency, renewable energy development, and decreased
pollution in the context of a competitive electric industry. In
assessing alternatives for renewable energy development, the
task force must consider questions relating to potential
renewable energy portfolio requirements, system benefits
charges, or green marketing of electricity. The task force's
analysis must also include an assessment of alternative energy's
effect on business and the state's economy, and how renewable
requirements can be implemented in a competitively neutral
manner.
(b) In conducting the analysis under this subdivision, the
task force shall convene a work group under section 3 that
includes the department of public service, utility
representatives, the public utilities commission, community
action agency representatives, and other energy efficiency
advocates and service providers to investigate the energy
conservation improvement program under Minnesota Statutes,
section 216B.241, and to develop recommendations regarding how
energy efficiency and related services could best be provided in
a more competitive electricity market. The task force must give
particular attention to assessing the success of these projects
on meeting the goals of Minnesota Statutes, section 216B.241.
Subd. 7. [UNBUNDLED RATES.] The legislative electric
energy task force shall analyze issues relating to the
unbundling of energy rates, and shall convene a work group under
section 3 that includes private, public, and cooperative
utilities; national and regional energy marketers; consumers and
their advocates; and other interested parties to develop a
timeline and recommended procedures for separating the charges
for electric generation services, including electric energy and
capacity, from the charges for distribution services,
transmission services, and other services on customers' bills.
Subd. 8. [COMPETITIVE PARITY.] The legislative electric
energy task force shall conduct an analysis of laws and
regulations that could prevent Minnesota utilities from
competing fairly in a competitive electricity market, and must
make recommendations as to how those requirements could be
fulfilled in a competitively neutral manner. In addition, the
task force shall analyze issues relating to access to the retail
marketplace by competitors and methods to prevent the exercise
of market power and to limit the effects of anticompetitive
behavior.
Subd. 9. [STRANDED COSTS.] The legislative electric energy
task force shall analyze issues relating to stranded costs and
develop:
(1) a sensitivity analysis of the magnitude and duration of
net stranded costs, and include in its analysis the potential
for stranded benefits or negative stranded costs that may result
from market prices that are higher than regulated prices;
(2) information as to whether and how net stranded cost
recovery by utilities could affect competition, consumers,
utilities, and utility investors;
(3) a comparison and evaluation of potential difficulties
stranded costs could create for private, public, and cooperative
utilities, and alternative means to ensure that customers
receive at least as much assurance of negative stranded cost
recovery as utility owners would of stranded cost recovery;
(4) recommendations on alternatives for the mitigation and
elimination of stranded costs and on mechanisms for recovery of
net stranded costs;
(5) an analysis of the advantages and disadvantages of
prior versus periodic evaluation, determination, and assessment
of stranded costs; and
(6) an analysis of the advantages and disadvantages of
securitization and other means of requiring customers to pay for
utility stranded costs.
Subd. 10. [PERIODIC UPDATES.] By January 15 of each year,
the task force must provide the legislature with an update on
the progress of its review and analysis of restructuring issues
under this section, including legislative recommendations as the
task force deems appropriate.
Subd. 11. [CONSULTATION WITH AFFECTED PARTIES.] In
conducting its review and analysis of restructuring issues, the
task force must solicit information from and consult with all
affected and interested parties, including, but not limited to,
representatives of: rural energy consumers; low-income energy
consumers; commercial energy consumers; industrial energy
consumers; small business energy consumers; investor-owned
utilities; cooperative electric associations; municipal
utilities; organized labor; local units of government;
environmentalists; renewable energy developers and providers;
natural gas distribution utilities; community action agencies;
the mid-continent area power pool; the department of public
service; the public utilities commission; and the office of the
attorney general.
Sec. 3. [LEGISLATIVE ELECTRIC ENERGY TASK FORCE; ELECTRIC
RESTRUCTURING TECHNICAL ASSISTANCE.]
Subdivision 1. [ESTABLISHMENT OF TECHNICAL ADVISORY WORK
GROUPS.] The legislative electric energy task force shall
convene technical advisory work groups to assist the legislature
in analyzing the specific issues listed in section 2. Unless
terminated earlier by the task force, these technical advisory
work groups expire January 31, 2000.
Subd. 2. [MEMBERSHIP OF TECHNICAL ADVISORY WORK
GROUP.] (a) Each advisory work group convened under this section
shall consist of members that satisfy both of the following
criteria:
(1) have technical expertise in one or more of the
following areas: energy marketing; energy efficiency; energy
procurement and purchasing; utility regulation; electricity
production; market economics; electric system operation and
reliability; and the provision of universal electric service,
especially to low-income or rural consumers; and
(2) reflect the broad array of interests affected by the
electric industry restructuring issue under review.
(b) The task force shall invite representatives of the
public utilities commission, the department of public service,
and the office of the attorney general to participate in each
technical advisory work group convened under this section, and
in an effort to avoid or minimize duplication of effort, shall
request from these state entities information and existing
studies relevant to the issue or issues that are the subject of
the technical advisory work group.
Sec. 4. [REPORTS.]
During the 1998 legislative interim, the legislative
electric energy task force shall convene technical advisory work
groups under section 3 on at least the following issues: (1)
bulk power system reliability, infrastructure, and regulation
issues described in section 2, subdivision 1, clauses (1) and
(2); (2) distribution reliability, safety, and maintenance
issues described in section 2, subdivision 2; (3) energy prices
and price protection mechanisms issues described in section 2,
subdivision 3; and (4) universal service issues described in
section 2, subdivision 4.
No later than November 30, 1998, task force staff shall
prepare and provide to the task force reports on the activities
and findings of these technical advisory work groups. The task
force shall use these reports in preparing its report to the
legislature due January 15, 1999.
Sec. 5. [TASK FORCE ASSESSMENT AUTHORITY.]
(a) The legislative electric energy task force is
authorized to utilize its assessment authority under Minnesota
Statutes 1997 Supplement, section 216C.051, subdivision 6, to
fund activities of technical advisory work groups under this act.
(b) If the commissioner of public service finds that a more
equitable allocation of expenses would result, the department of
public service, as an alternative to the traditional assessment
procedure, may allocate technical advisory work group expenses
among all public and municipal utilities providing electric
service in the state, all cooperative electric associations
operating in Minnesota, and all other energy providers
participating in technical advisory committee activities under
this act, and may require each of those entities to pay their
allocated portion of those expenses.
(c) The task force shall periodically certify the expenses
of the technical advisory work groups to the department of
public service. The department may render a bill to the
entities listed in paragraph (b). Utilities and energy
providers providing more than one type of energy shall only be
billed as a single entity. Generation and transmission
cooperative electric associations whose member distribution
cooperatives are billed for technical advisory work group
expenses under this section shall not be billed separately. As
required under Minnesota Statutes, section 216C.051, subdivision
6, amounts assessed and collected under this section are
appropriated to the director of the legislative coordinating
commission and are available until expended.
(d) For the purposes of this section, "other energy
providers" includes natural gas distribution utilities, power
marketers, power brokers, aggregators, and any other entity
engaged in the marketing, selling, distribution, or transmission
of energy at wholesale or retail, whether operating in or out of
the state.
Sec. 6. [EFFECTIVE DATE.]
Sections 1 to 5 are effective the day following final
enactment.
Presented to the governor April 9, 1998
Signed by the governor April 9, 1998, 6:40 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes