1.1 	A bill for an act
1.2 	relating to the environment; extending life of utility emissions-reduction 
1.3 	program; requiring mercury emissions reductions by public utilities; amending 
1.4 	Minnesota Statutes 2004, section 216B.1692, subdivision 8; proposing coding 
1.5 	for new law in Minnesota Statutes, chapter 216B.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2004, section 216B.1692, subdivision 8, is amended to 
1.8 	read:
1.9 		Subd. 8.Sunset. This section is effective until June 30, 2006 December 31, 2011, 
1.10 	and applies to projects and riders approved before that date.

1.11 	Sec. 2. [216B.1695] MERCURY EMISSIONS REDUCTIONS.
1.12 		Subdivision 1.Definitions. For the purpose of this section, the following terms 
1.13 	have the meanings given them:
1.14 	(1) "coal-fired electric generating unit" means any electric generating power plant 
1.15 	in Minnesota that supplied more than one-third of its potential output capacity and 250 
1.16 	megawatts or more of electrical output from coal-fired generation to any public utility as 
1.17 	of January 1, 2006;
1.18 	(2) "dry-scrubbed units" means a coal-fired electric generating unit at which 
1.19 	pollution control technology that uses a spray dryer and fabric filter system to remove 
1.20 	pollutants from air emissions is installed; and
1.21 	(3) "wet-scrubbed units" means a coal-fired electric generating unit at which 
1.22 	pollution control technology that uses water or solutions to remove pollutants from air 
1.23 	emissions is installed.
2.1 		Subd. 2.Monitoring. By January 1, 2007, a public utility that owns or operates 
2.2 	a coal-fired electric generating unit shall install, maintain, and operate a continuous 
2.3 	mercury emissions-monitoring system approved by the Pollution Control Agency on each 
2.4 	coal-fired electrical generating unit. The data from six months of continuous emissions 
2.5 	monitoring or its equivalent must be used to establish a baseline for mercury emissions 
2.6 	reductions under subdivision 3. The public utility shall report to the Pollution Control 
2.7 	Agency as public data the quality assured data produced from monitoring implemented 
2.8 	pursuant to this subdivision on a quarterly basis on a form prescribed by the agency.
2.9 		Subd. 3.Mercury emissions limits. Subject to commission approval, mercury 
2.10 	emissions from coal-fired electric generating units relative to the baseline established by 
2.11 	monitoring under subdivision 2 must be reduced as follows:
2.12 	(1) mercury emissions from dry-scrubbed units must be reduced by 90 percent 
2.13 	by January 1, 2009; and
2.14 	(2) mercury emissions from wet-scrubbed units must be reduced by 90 percent 
2.15 	by January 1, 2011.
2.16 		Subd. 4.Compliance plans. (a) By September 1, 2007, for dry-scrubbed units, a 
2.17 	public utility that owns or operates a coal-fired electrical generating unit shall submit to 
2.18 	the Pollution Control Agency and the commission a plan for compliance with the mercury 
2.19 	emissions limit in subdivision 3, clause (1).
2.20 	(b) By July 1, 2008, for wet-scrubbed units, a public utility that owns or operates 
2.21 	a coal-fired electrical generating unit shall submit to the Pollution Control Agency and 
2.22 	the commission a plan for compliance with the mercury emissions limit in subdivision 
2.23 	3, clause (2).
2.24 	(c) Plans under paragraphs (a) and (b) shall provide the cost, technical feasibility, 
2.25 	operational conditions, and mercury emissions reductions expected for each option. 
2.26 	The plans may specify permit conditions proposed by the public utility for each 
2.27 	mercury emission control option, including, but not limited to, numeric emission target, 
2.28 	percent removal expectations, emission control technology installation, and operative 
2.29 	requirements or work practice standards.
2.30 	(d) The public utility may also submit one or more alternatives to the plans required 
2.31 	under subdivision 3. For each required and alternative plan submitted pursuant to this 
2.32 	subdivision, the utility shall present information assessing the plan's ability to optimize 
2.33 	human health benefits and achieve cost efficiencies.
2.34 		Subd. 5.Multiple pollutant reductions. A utility required to submit a compliance 
2.35 	plan under this section may also propose plans and associated emissions-reduction 
2.36 	riders to reduce emissions of multiple pollutants. The plans must propose to implement 
3.1 	emission control initiatives that exceed and are implemented in advance of state or federal 
3.2 	requirements.
3.3 		Subd. 6.Emission-reduction rider. A public utility required to file a compliance 
3.4 	plan under subdivision 4 may also file for approval of an emissions-reduction rate 
3.5 	rider, under section 216B.1692, subdivision 3, for its compliance and multiple pollutant 
3.6 	reduction plans under this section. The emissions-reduction rate rider may include 
3.7 	recovery of capital, operating, and maintenance costs associated with continuous 
3.8 	monitoring, mercury emissions reduction, multiple pollutant emissions reduction, and any 
3.9 	studies undertaken by the utility in support of the compliance plan, in addition to the cost 
3.10 	recovery under section 216B.1692, subdivision 3. The utility may propose to phase in 
3.11 	the emissions-reduction riders to recover these costs over the development and life of the 
3.12 	projects. 
3.13 		Subd. 7.Compliance assessment. (a) The Pollution Control Agency shall evaluate 
3.14 	a utility's compliance plan and alternatives, and within 90 days for dry-scrubbed units 
3.15 	and within 180 days for wet-scrubbed units from the date the plan was submitted, assess 
3.16 	the following:
3.17 	(1) whether the plan will result in compliance with subdivision 3; and
3.18 	(2) the technical feasibility and effectiveness of the technologies proposed in 
3.19 	achieving maximum mercury reductions.
3.20 	(b) For multiple pollutant emissions-reduction plans, the Pollution Control Agency 
3.21 	shall evaluate within 180 days whether the plan complies with the requirements of 
3.22 	subdivisions 3 and 5, in addition to providing an environmental assessment under section 
3.23 	216B.1692, subdivision 4.
3.24 		Subd. 8.Commission approval. (a) Within 90 days of receiving the Pollution 
3.25 	Control Agency's compliance assessment for dry-scrubbed units, and within 180 days of 
3.26 	receiving the Pollution Control Agency's compliance assessment for wet-scrubbed units, 
3.27 	the commission shall approve a utility's compliance plan that has been assessed to comply 
3.28 	with subdivision 3, clause (1) or (2), unless the applicant or other party establishes that the 
3.29 	plan would impose excessive customer costs.
3.30 	(b) If the commission is unable to approve a plan under paragraph (a), the 
3.31 	commission shall, in consultation with the Pollution Control Agency, order the utility to 
3.32 	implement the most stringent mercury reduction alternative proposed that does not impose 
3.33 	excessive costs. The commission shall not require the replacement of existing pollution 
3.34 	control equipment for that unit. The order must include provisions:
4.1 	(1) requiring the utility to optimize the operation of installed equipment to obtain 
4.2 	maximum mercury reductions and report its efforts and results quarterly to the Pollution 
4.3 	Control Agency; and
4.4 	(2) stating that if compliance with the 90 percent reduction requirement has not been 
4.5 	met by January 1, 2013, the Pollution Control Agency and the commission shall conduct a 
4.6 	de novo review to determine the technical feasibility of compliance with subdivision 3.
4.7 	(c) Within 180 days of receiving the Pollution Control Agency's assessments, the 
4.8 	commission may approve a utility's multiple pollutant emissions-reduction plan if it: 
4.9 	 (1) results in compliance with subdivision 3 in a manner that is technically feasible 
4.10 	without excessive consumer costs; and 
4.11 	(2) provides greater environmental and public health benefits by reducing multiple 
4.12 	emissions simultaneously, including, but not limited to, emissions of mercury, sulfur 
4.13 	oxides, nitrogen oxides, and particulate matter.
4.14 	(d) The commission shall defer to the expertise of the Pollution Control Agency 
4.15 	on compliance issues under subdivision 3, technical feasibility of emission control 
4.16 	technology, and environmental and public health benefits.
4.17 	(e) Section 216B.1692 applies to plans and emission control riders proposed 
4.18 	under this section, and projects included in a plan approved under this section are 
4.19 	considered qualifying projects under section 216B.1692. Section 216B.1692, subdivision 
4.20 	5, paragraph (c), and subdivision 6, do not apply to plans or riders submitted under this 
4.21 	section. Commission approval of an emissions-reduction plan under this section shall 
4.22 	include approval of an emissions-reduction rider associated with that plan, if one was 
4.23 	submitted by the utility.
4.24 		Subd. 9.Implementation and operation. (a) A public utility required to file a 
4.25 	compliance plan shall implement the plan as approved under subdivision 8.
4.26 	(b) For the first year of operation, except as required by federal regulation, any 
4.27 	mercury emission limit incorporated into the permit of a coal-fired electric generating unit 
4.28 	for which a plan has been approved, shall be a state-only condition of the permit and is not 
4.29 	enforceable by the Pollution Control Agency.
4.30 	(c) After one year, the Pollution Control Agency shall incorporate the mercury limit 
4.31 	as an enforceable state-only limit for any coal-fired electric generating unit that is in 
4.32 	compliance with its plan.
4.33 	(d) For any coal-fired electric generating unit that is not in compliance with the 
4.34 	limits of subdivision 3 after one year, the Pollution Control Agency shall:
4.35 	(1) provide public notice and revise the mercury limit for that unit, incorporating 
4.36 	that limit as an enforceable state-only limit in the facility's permit; and
5.1 	(2) revise the unit's air permit on a biannual basis or as the plan for mercury 
5.2 	reduction at that unit is modified to ensure optimal mercury emissions reduction in light of 
5.3 	technical and operational advances made since the date of plan approval.
5.4 	(e) For any coal-fired electric generating unit that is not in compliance with the 
5.5 	limits of subdivision 3 after one year, the public utility shall report its efforts to optimize 
5.6 	the operation of installed equipment quarterly to the Pollution Control Agency until 
5.7 	compliance with the emission limits set in subdivision 3 is attained.