1.1                          A bill for an act 
  1.2             relating to electric utilities; encouraging and 
  1.3             supporting programs for renewable energy sources, 
  1.4             universal electric service, affordable electric 
  1.5             service, and energy conservation and efficiency, and 
  1.6             for other purposes; establishing Minnesota electric 
  1.7             system public benefits fund; authorizing wires 
  1.8             charges; providing for rules, standards, and 
  1.9             procedures; authorizing civil penalties; proposing 
  1.10            coding for new law as Minnesota Statutes, chapter 216E.
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  [216E.01] [SHORT TITLE.] 
  1.13     This chapter may be cited as the "Minnesota Electric System 
  1.14  Public Benefits Protection Act of 1997."  
  1.15     Sec. 2.  [216E.02] [FINDINGS.] 
  1.16     The legislature finds that: 
  1.17     (1) the generation of electricity is unique in its combined 
  1.18  influence on environmental quality and economic efficiency; 
  1.19     (2) the state has a responsibility for the maintenance of 
  1.20  public purpose energy programs; 
  1.21     (3) notwithstanding the public's interest in and enthusiasm 
  1.22  for programs that enhance the environment, encourage the 
  1.23  efficient use of resources, and provide for affordable and 
  1.24  universal service, the investments in those public purposes by 
  1.25  existing means continues to decline; 
  1.26     (4) the nation's dependence on foreign sources of fossil 
  1.27  fuels is contrary to our national security, and alternative, 
  1.28  sustainable energy sources must be pursued as the nation moves 
  2.1   into the 21st century; 
  2.2      (5) emissions from electric power generating facilities are 
  2.3   today the largest industrial source responsible for persistent 
  2.4   public health and environmental problems; and 
  2.5      (6) consumers have a right to certain information in order 
  2.6   to make objective choices on their electric service providers. 
  2.7      Sec. 3.  [216E.03] [DEFINITIONS.] 
  2.8      Subdivision 1.  [SCOPE.] The terms used in this chapter 
  2.9   have the meanings given them in this section. 
  2.10     Subd. 2.  [AGENCY.] "Agency" means the pollution control 
  2.11  agency. 
  2.12     Subd. 3.  [BOARD.] "Board" means the Minnesota electric 
  2.13  system public benefits board established under section 216E.04. 
  2.14     Subd. 4.  [COMMISSION.] "Commission" means the public 
  2.15  utilities commission. 
  2.16     Subd. 5.  [COMMISSIONER.] "Commissioner" means the 
  2.17  commissioner of public service. 
  2.18     Subd. 6.  [DEPARTMENT.] "Department" means the department 
  2.19  of public service. 
  2.20     Subd. 7.  [FUND.] "Fund" means the Minnesota electric 
  2.21  system public benefits fund established by section 216E.05. 
  2.22     Subd. 8.  [RENEWABLE ENERGY.] "Renewable energy" means 
  2.23  electricity generated from wind, organic waste excluding 
  2.24  incinerated municipal solid waste, or biomass or a geothermal, 
  2.25  solar thermal, or photovoltaic source. 
  2.26     Sec. 4.  [216E.04] [MINNESOTA ELECTRIC SYSTEM PUBLIC 
  2.27  BENEFITS BOARD.] 
  2.28     Subdivision 1.  [ESTABLISHMENT.] The commissioner of public 
  2.29  service shall establish the Minnesota electric system public 
  2.30  benefits board to carry out the functions and responsibilities 
  2.31  described in this section. 
  2.32     Subd. 2.  [MEMBERSHIP.] The legislative energy task force 
  2.33  shall determine and appoint the membership of the board, except 
  2.34  for the chair who is appointed by the commissioner of public 
  2.35  service. 
  2.36     Subd. 3.  [MANAGER.] (a) The board shall by contract 
  3.1   appoint a Minnesota electric systems public benefits manager for 
  3.2   a term of not more than three years, which may be renewed by the 
  3.3   board. 
  3.4      (b) The compensation and other terms and conditions of 
  3.5   employment of the manager must be determined by a contract 
  3.6   between the board and the person appointed as manager. 
  3.7      (c) The manager shall: 
  3.8      (1) monitor the amounts in the fund; 
  3.9      (2) receive, review, and make recommendations to the board 
  3.10  regarding applications from qualified entities under section 
  3.11  216E.05, paragraph (b); and 
  3.12     (3) perform other functions as the board may require to 
  3.13  assist the board in carrying out its duties under this chapter. 
  3.14     Sec. 5.  [216E.05] [MINNESOTA ELECTRIC SYSTEM PUBLIC 
  3.15  BENEFITS FUND.] 
  3.16     Subdivision 1.  [ESTABLISHMENT, GENERALLY.] (a) The board 
  3.17  shall establish an account at one or more financial 
  3.18  institutions, known as the "Minnesota electric system public 
  3.19  benefits fund," consisting of amounts deposited in the fund 
  3.20  under subdivision 3. 
  3.21     (b) The wires charges collected under subdivision 3 and 
  3.22  deposited in the fund: 
  3.23     (1) constitute fund revenues and do not constitute state 
  3.24  funds; 
  3.25     (2) must be held in trust by the manager of the fund solely 
  3.26  for the purposes stated in subdivision 2; and 
  3.27     (3) are not available to meet any state obligation. 
  3.28     Subd. 2.  [FUND USES, CRITERIA, APPLICATION.] (a) Amounts 
  3.29  in the fund must be used by the board to support public purpose 
  3.30  programs relating to: 
  3.31     (1) renewable energy sources; 
  3.32     (2) universal electric service; 
  3.33     (3) affordable electric service; 
  3.34     (4) energy conservation and efficiency; or 
  3.35     (5) research and development in areas described in clauses 
  3.36  (1) to (4). 
  4.1      (b) The board shall recommend eligibility criteria for 
  4.2   public benefits programs funded under this section for approval 
  4.3   by the commissioner. 
  4.4      (c) Not later than August 1 of each year beginning in 1999, 
  4.5   a qualified entity seeking matching funds for the following year 
  4.6   shall file with the board, in the form as the board may require, 
  4.7   an application certifying that the funds will be used for an 
  4.8   eligible public purpose program. 
  4.9      Subd. 3.  [WIRES CHARGE; DETERMINATION, IMPOSITION, 
  4.10  PENALTIES.] (a) Not later than August 1 of each year, the board 
  4.11  shall determine and inform the commission of the aggregate 
  4.12  amount of wires charges that it considers necessary to be paid 
  4.13  into the fund to pay matching funds to qualified entities and 
  4.14  pay the operating costs of the board in the following year.  
  4.15     (b) Not later than December 15 of each year, the commission 
  4.16  shall impose a nonbypassable, competitively neutral wires charge 
  4.17  to be paid directly into the fund by the operator of the wire on 
  4.18  electricity carried through the wire, this electricity to be 
  4.19  measured as it exits the busbar at a generation facility. 
  4.20     The wires charge must be set at a rate equal to the lesser 
  4.21  of:  
  4.22     (1) ... mills per kilowatt-hour; or 
  4.23     (2) a rate that is estimated to result in the collection of 
  4.24  an amount of wires charges that is as nearly as possible equal 
  4.25  to the amount of needed funding determined under paragraph (a). 
  4.26     (c) The wires charge must be paid by the operator of the 
  4.27  wire directly into the fund at the end of each month during the 
  4.28  calendar year for distribution by the Minnesota electric systems 
  4.29  public benefits manager under section 216E.04. 
  4.30     (d) The commission may assess against a wire operator that 
  4.31  fails to pay a wires charge as required by this subdivision a 
  4.32  civil penalty in an amount equal to not more than the amount of 
  4.33  the unpaid wires charge. 
  4.34     Subd. 4.  [AUDITING.] The fund must be audited annually by 
  4.35  a firm of independent certified public accountants in accordance 
  4.36  with generally accepted auditing standards. 
  5.1      Sec. 6.  [216E.06] [RENEWABLE ENERGY PORTFOLIO STANDARDS; 
  5.2   RULES.] 
  5.3      Subdivision 1.  [DEFINITION OF COVERED GENERATION 
  5.4   FACILITY.] In this section, "covered generation facility" means 
  5.5   a renewable energy facility that generates electric energy for 
  5.6   sale. 
  5.7      Subd. 2.  [REQUIRED RENEWABLE ENERGY.] Of the total amount 
  5.8   of electricity sold by covered generation facilities during a 
  5.9   calendar year, the amount generated by renewable energy sources 
  5.10  shall be not less than: 
  5.11     (1) 2.5 percent in the years 2000 through 2004; 
  5.12     (2) five percent in the years 2005 through 2009; and 
  5.13     (3) ten percent in the years after 2009. 
  5.14     Subd. 3.  [RENEWABLE ENERGY CREDITS.] (a) The commission 
  5.15  shall establish standards and procedures under which a covered 
  5.16  generation facility shall certify to a purchaser of electricity: 
  5.17     (1) the amount of the electricity that is generated by a 
  5.18  renewable energy source; and 
  5.19     (2) the amount of the electricity that is generated by a 
  5.20  source other than a renewable energy source. 
  5.21     (b) Not later than April 1 of each year beginning in 1999, 
  5.22  the commission shall issue to a covered generation facility one 
  5.23  renewable energy credit for each megawatt-hour of electricity 
  5.24  sold by the covered generation facility in the preceding 
  5.25  calendar year that was generated by a renewable source. 
  5.26     (c) Not later than July 1 of each year, a covered 
  5.27  generation facility shall submit credits to the commission in an 
  5.28  amount equal to the total number of megawatt-hours of 
  5.29  electricity sold by the covered generation facility in the 
  5.30  preceding year multiplied by the applicable renewable energy 
  5.31  source requirement under subdivision 2. 
  5.32     (d) A renewable energy credit must be used for the calendar 
  5.33  year for which the renewable energy credit is issued.  Until 
  5.34  July 1 of the year in which a renewable energy credit was 
  5.35  issued, a covered generation facility may: 
  5.36     (1) use the renewable energy credit to make a submission to 
  6.1   the commission under paragraph (c); or 
  6.2      (2) on notice to the commission, sell or otherwise transfer 
  6.3   a renewable energy credit to another covered generation facility.
  6.4      Subd. 4.  [RECORDKEEPING.] The commission shall maintain 
  6.5   records of renewable energy credits issued and credits sold or 
  6.6   exchanged. 
  6.7      Subd. 5.  [PENALTIES.] The commission may bring an action 
  6.8   in district court to impose a civil penalty on a person that 
  6.9   fails to comply with subdivision 2.  A person that fails to 
  6.10  comply with a requirement to submit renewable energy credits 
  6.11  under subdivision 3, paragraph (c), is subject to a civil 
  6.12  penalty of not more than three times the estimated national 
  6.13  average market value, as determined and published by the Federal 
  6.14  Energy Regulatory Commission, for the calendar year concerned of 
  6.15  that quantity of renewable energy credits. 
  6.16     Subd. 6.  [COMMISSION POWERS.] The commission may adopt 
  6.17  rules, conduct investigations, and issue orders necessary or 
  6.18  appropriate to implement and obtain compliance with this section 
  6.19  and rules adopted under this section. 
  6.20     Sec. 7.  [216E.07] [INCREASED USE OF OLDER PLANTS; 
  6.21  INCREASED EMISSION STANDARDS.] 
  6.22     A steam electric generating power plant with a capacity of 
  6.23  25,000 kilowatts or more owned or operated by a public utility, 
  6.24  as defined in section 216B.02, subdivision 4, that is fully or 
  6.25  partially exempt from any of the air emission standards that 
  6.26  would be applicable to it if it were a new source under United 
  6.27  States Code, title 42, section 7411, and regulations adopted 
  6.28  under that section, must meet those standards if, for any 12 
  6.29  consecutive months beginning after July 1, 1997, the plant 
  6.30  operates at a percentage of capacity that exceeded the average 
  6.31  annual capacity the plant operated at for the 36 months 
  6.32  preceding those 12 consecutive months by ten percent or more.  A 
  6.33  power plant must comply with those standards within three years 
  6.34  of becoming subject to those standards under this section. 
  6.35     An operating permit of a power plant is automatically 
  6.36  amended to comply with the air quality standards imposed on the 
  7.1   plant by this section. 
  7.2      Sec. 8.  [216E.08] [DISCLOSURE REQUIREMENTS; RULES.] 
  7.3      Subdivision 1.  [DEFINITIONS.] For purposes of this section:
  7.4      (a) "Emissions data" means the type and amount of each 
  7.5   pollutant emitted by a covered generation facility in generating 
  7.6   electricity.  
  7.7      (b) "Generation data" means the type of fuel, such as coal, 
  7.8   oil, nuclear energy, or solar power, used by a covered 
  7.9   generation facility to generate electricity. 
  7.10     (c) "Pollutant" means nitrogen oxide, sulfur dioxide, 
  7.11  carbon dioxide, mercury, or any other substance that the 
  7.12  commissioner of the pollution control agency may identify by 
  7.13  rule as a substance the emission of which into the air from a 
  7.14  combustion device used in the generation of electricity 
  7.15  endangers public health or welfare. 
  7.16     Subd. 2.  [DISCLOSURE SYSTEM.] The agency shall establish a 
  7.17  system of disclosure that:  
  7.18     (1) enables retail consumers to knowledgeably compare 
  7.19  retail electric service offerings, including comparisons based 
  7.20  on generation source portfolios, emissions data, and price 
  7.21  terms; and 
  7.22     (2) considers such factors as:  
  7.23     (i) cost of implementation; 
  7.24     (ii) confidentiality of information; and 
  7.25     (iii) flexibility.  
  7.26     Subd. 3.  [RULES.] Not later than March 1, 1999, the 
  7.27  agency, in consultation with the board, shall adopt rules 
  7.28  prescribing:  
  7.29     (1) the form, content, and frequency of disclosure of 
  7.30  emissions data and generation data of electricity by covered 
  7.31  generation facilities to electricity wholesalers or retail 
  7.32  companies and by wholesalers to retail companies; 
  7.33     (2) the form, content, and frequency of disclosure of 
  7.34  emissions data, generation data, and the price of electricity by 
  7.35  retail companies to ultimate consumers; and 
  7.36     (3) the form, content, and frequency of disclosure of 
  8.1   emissions data, generation data, and the price of electricity by 
  8.2   covered generation facilities selling directly to ultimate 
  8.3   consumers.  
  8.4      Subd. 4.  [ACCESS TO RECORDS.] The agency shall have full 
  8.5   access to the records of covered generation facilities, 
  8.6   electricity wholesalers, and retail companies to obtain 
  8.7   information necessary to administer and enforce this section.  
  8.8      Subd. 5.  [FAILURE TO DISCLOSE.] The failure of a retail 
  8.9   company to accurately disclose information as required by this 
  8.10  section must be treated as a deceptive act in commerce under 
  8.11  section 5 of the Federal Trade Commission Act, United States 
  8.12  Code, title 14, section 45.  
  8.13     Subd. 6.  [POWERS OF COMMISSIONER.] The commissioner of 
  8.14  public service may adopt rules, conduct investigations, and 
  8.15  issue orders necessary or appropriate to implement and obtain 
  8.16  compliance with this section and rules adopted under this 
  8.17  section.