1.1                          A bill for an act 
  1.2             relating to public utilities; providing for the 
  1.3             recovery of stranded costs incurred by a thermal 
  1.4             energy customer of a facility subject to a qualifying 
  1.5             emission reduction project; amending Minnesota 
  1.6             Statutes 2002, section 216B.1692, subdivision 5; Laws 
  1.7             2003, First Special Session chapter 11, article 3, 
  1.8             section 12. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 2002, section 216B.1692, 
  1.11  subdivision 5, is amended to read: 
  1.12     Subd. 5.  [PROPOSAL APPROVAL.] (a) After receiving the 
  1.13  Pollution Control Agency's environmental assessment, the 
  1.14  commission shall allow opportunity for written and oral comment 
  1.15  on the proposed emissions reduction rate rider proposal.  The 
  1.16  commission must assess the costs of an emissions reduction 
  1.17  project on a stand-alone basis and may approve, modify, or 
  1.18  reject the proposed emissions reduction rider.  In making its 
  1.19  determination, the commission shall consider whether the 
  1.20  project, proposed cost recovery, and any proposed recovery above 
  1.21  cost appropriately achieves environmental benefits without 
  1.22  unreasonable consumer costs.  
  1.23     (b) The commission may approve a rider that: 
  1.24     (1) allows the utility to recover costs of qualifying 
  1.25  emissions reduction projects net of revenues attributable to the 
  1.26  project; 
  1.27     (2) allows a thermal energy customer of a facility subject 
  2.1   to a qualified emission reduction project to recover stranded 
  2.2   costs caused by the qualifying emissions reduction project; 
  2.3      (3) allows an appropriate return on investment associated 
  2.4   with qualifying emissions reduction projects at the level 
  2.5   established in the public utility's last general rate case; 
  2.6      (3) (4) allocates project costs appropriately between 
  2.7   wholesale and retail customers; 
  2.8      (4) (5) provides a mechanism for recovery above cost, if 
  2.9   necessary to improve the overall economics of the qualifying 
  2.10  projects to ensure implementation; 
  2.11     (5) (6) recovers costs from retail customer classes in 
  2.12  proportion to class energy consumption; and 
  2.13     (6) (7) terminates recovery once the costs of qualifying 
  2.14  projects have been fully recovered. 
  2.15     (c) The commission must not approve an emissions reduction 
  2.16  project and its associated rate rider if: 
  2.17     (1) the emissions reduction project is needed to comply 
  2.18  with new state or federal air quality standards; or 
  2.19     (2) the emissions reduction project is required as a 
  2.20  corrective action as part of any state or federal enforcement 
  2.21  action. 
  2.22     (d) The commission may not include any costs of a proposed 
  2.23  project in the emissions reduction rider that are not directly 
  2.24  allocable to reduction of emissions. 
  2.25     Sec. 2.  Laws 2003, First Special Session chapter 11, 
  2.26  article 3, section 12, is amended to read: 
  2.27     Sec. 12.  [REFURBISHMENT OF METROPOLITAN GENERATING 
  2.28  PLANTS.] 
  2.29     Notwithstanding Minnesota Statutes, section 216B.1692, 
  2.30  subdivision 1, clause (2), and subdivision 5, paragraphs (c) and 
  2.31  (d), all investments in repowering, emissions reduction 
  2.32  technologies and equipment, and power plant rehabilitation and 
  2.33  life extension described in the primary metropolitan emission 
  2.34  reduction proposal filed with the public utilities commission in 
  2.35  July 2002 by the public utility that owns the Prairie Island 
  2.36  nuclear generation facility and currently pending before the 
  3.1   commission are deemed qualifying projects under Minnesota 
  3.2   Statutes, section 216B.1692, and all costs related to all such 
  3.3   investments are eligible for rider recovery under Minnesota 
  3.4   Statutes, section 216B.1692, subdivision 5.  Such costs must 
  3.5   also include amounts to be reimbursed to a thermal energy 
  3.6   customer of a facility subject to this primary metropolitan 
  3.7   emission reductions proposal for recovery of stranded costs 
  3.8   under the rider caused by the qualified emission reductions 
  3.9   project pursuant to Minnesota Statutes, section 216B.1692, 
  3.10  subdivision 5.  Such stranded costs include, but are not limited 
  3.11  to, recovery of costs incurred in connection with the 
  3.12  construction and other required capital improvements to the 
  3.13  steam production facilities that are subject to a qualifying 
  3.14  emissions reduction project which provides steam service to such 
  3.15  thermal energy customer and to the steam delivery pipeline used 
  3.16  to deliver steam from the steam production facilities to the 
  3.17  thermal energy customer.  The commission shall verify and 
  3.18  approve the amount of stranded costs to be recovered under the 
  3.19  rider.  Upon receiving approval by the commission, the utility 
  3.20  shall implement the approved proposal or justify to the 
  3.21  commission its decision not to do so. 
  3.22     Sec. 3.  [EFFECTIVE DATE.] 
  3.23     Sections 1 and 2 are effective July 1, 2004.