1.1 	A bill for an act
1.2 	relating to energy; providing for automatic recovery
1.3 	of electricity transmission costs; amending
1.4 	certification requirements for high-voltage
1.5 	transmission lines; establishing stakeholder group to
1.6 	study state certification and routing processes;
1.7 	amending Minnesota Statutes 2004, sections 216B.16, by
1.8 	adding subdivisions; 216B.243, subdivision 3.
1.9 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.10 	Section 1. Minnesota Statutes 2004, section 216B.16, is
1.11 	amended by adding a subdivision to read:
1.12 		Subd. 7b.Transmission cost adjustment. The legislature
1.13 	finds that it is in the public interest to encourage additional
1.14 	investment in electric transmission infrastructure in order to
1.15 	ensure reliability, encourage the development of renewable
1.16 	energy, and accommodate the economic transfer of energy within
1.17 	and between states.  Notwithstanding any other provision of this
1.18 	chapter, the commission may permit a public utility providing
1.19 	electric service to file a rate schedule providing for the
1.20 	automatic annual adjustment of charges for changes in
1.21 	transmission costs, including costs of investments in
1.22 	transmission facilities, a current return on construction work
1.23 	in progress for transmission facilities based on the utility's
1.24 	authorized rate of return, and related operations and
1.25 	maintenance expenses.

1.26 	Sec. 2. Minnesota Statutes 2004, section 216B.16, is
1.27 	amended by adding a subdivision to read:
2.1 		Subd. 7c.Transmission assets transfer. (a) Owners of
2.2 	transmission facilities may transfer ownership of those assets
2.3 	to a transmission provider subject to Federal Energy Regulatory
2.4 	Commission jurisdiction.  The Public Utilities Commission shall
2.5 	approve a transfer if it finds that the transfer:
2.6 	(1) is consistent with the public interest; and 
2.7 	(2) facilitates the development of transmission
2.8 	infrastructure necessary to ensure reliability, encourage the
2.9 	development of renewable resources, and accommodate energy
2.10 	transfers within and between states.
2.11 	(b) If a utility transfers ownership of its transmission
2.12 	assets to a transmission provider subject to the jurisdiction of
2.13 	the Federal Energy Regulatory Commission, the Public Utilities
2.14 	Commission may permit the utility to file a rate schedule
2.15 	providing for the automatic adjustment of charges to recover the
2.16 	cost of transmission services purchased under tariff rates
2.17 	approved by the Federal Energy Regulatory Commission.

2.18 	Sec. 3. Minnesota Statutes 2004, section 216B.243,
2.19 	subdivision 3, is amended to read:
2.20 		Subd. 3.Showing required for construction.  No proposed
2.21 	large energy facility shall be certified for construction unless
2.22 	the applicant can show that demand for electricity cannot be met
2.23 	more cost effectively through energy conservation and
2.24 	load-management measures and unless the applicant has otherwise
2.25 	justified its need.  In assessing need, the commission shall
2.26 	evaluate:
2.27 	(1) the accuracy of the long-range energy demand forecasts
2.28 	on which the necessity for the facility is based;
2.29 	(2) the effect of existing or possible energy conservation
2.30 	programs under sections 216C.05 to 216C.30 and this section or
2.31 	other federal or state legislation on long-term energy demand;
2.32 	(3) the relationship of the proposed facility to overall
2.33 	state energy needs, as described in the most recent state energy
2.34 	policy and conservation report prepared under section 216C.18,
2.35 	or, in the case of a high-voltage transmission line, the
2.36 	relationship of the proposed line to regional energy needs, as
3.1 	presented in the transmission plan submitted under section
3.2 	216B.2425;
3.3 	(4) promotional activities that may have given rise to the
3.4 	demand for this facility;
3.5 	(5) benefits of this facility, including its uses to
3.6 	protect or enhance environmental quality, and to increase
3.7 	reliability of energy supply in Minnesota and the region;
3.8 	(6) possible alternatives for satisfying the energy demand
3.9 	or transmission needs including but not limited to potential for
3.10 	increased efficiency and upgrading of existing energy generation
3.11 	and transmission facilities, load-management programs, and
3.12 	distributed generation;
3.13 	(7) the policies, rules, and regulations of other state and
3.14 	federal agencies and local governments; and 
3.15 	(8) any feasible combination of energy conservation
3.16 	improvements, required under section 216B.241, that can (i)
3.17 	replace part or all of the energy to be provided by the proposed
3.18 	facility, and (ii) compete with it economically; and 
3.19 	(9) with respect to a high-voltage transmission line, the
3.20 	benefits of enhanced regional reliability, access, or
3.21 	deliverability to improve the robustness of the transmission
3.22 	system or to lower costs to electric consumers.

3.23 	Sec. 4. STAKEHOLDER PROCESS AND REPORT.
 3.24 		Subdivision 1.Membership. By June 15, 2005, the
3.25 	Legislative Electric Energy Task Force shall convene a
3.26 	stakeholder group consisting of one representative from each of
3.27 	the following groups:  transmission-owning investor-owned
3.28 	utilities, electric cooperatives, municipal power agencies,
3.29 	energy consumer advocates, environmental organizations, the
3.30 	Minnesota Department of Commerce, the Minnesota Environmental
3.31 	Quality Board, and the Minnesota Public Utilities Commission.
3.32 		Subd. 2.Charge. (a) The stakeholder group shall explore
3.33 	whether increased efficiencies and effectiveness can be obtained
3.34 	through modifying current state administrative processes to
3.35 	certify and route high-voltage transmission lines.
3.36 	(b) In developing its recommendations, the stakeholder
4.1 	group shall consider:
4.2 	(1) whether the certification process established under
4.3 	section 216B.2425, subdivision 3, can be modified to encourage
4.4 	utilities to apply for certification under that section;
4.5 	(2) whether alternative certification processes are
4.6 	feasible for different types of transmission facilities; and 
4.7 	(3) whether additional cooperation between state agencies
4.8 	is needed to enhance the efficiency of the certification and
4.9 	routing process.
4.10 		Subd. 3.Report. By January 15, 2006, the task force
4.11 	shall submit a report to the legislature summarizing the
4.12 	stakeholder group findings and any recommended changes to the
4.13 	certification and routing processes for high-voltage
4.14 	transmission lines.