1.1.................... moves to amend H.F. No. 1025 as follows:
1.2Delete everything after the enacting clause and insert:


1.5    Section 1. Minnesota Statutes 2010, section 216B.03, is amended to read:
1.6216B.03 REASONABLE RATE.
1.7Every rate made, demanded, or received by any public utility, or by any two or
1.8more public utilities jointly, shall be just and reasonable. Rates shall not be unreasonably
1.9preferential, unreasonably prejudicial, or discriminatory, but shall be sufficient, equitable,
1.10and consistent in application to a class of consumers and among classes of consumers.
1.11To the maximum reasonable extent, the commission shall set rates to encourage energy
1.12conservation and renewable energy use and to further the goals of sections 216B.164,
1.13216B.241 , and 216C.05. Any doubt as to reasonableness should be resolved in favor of the
1.14consumer. For rate-making purposes a public utility may treat two or more municipalities
1.15served by it as a single class wherever the populations are comparable in size or the
1.16conditions of service are similar.
1.17EFFECTIVE DATE.This section is effective the day following final enactment.

1.18    Sec. 2. Minnesota Statutes 2010, section 216B.07, is amended to read:
1.19216B.07 RATE PREFERENCE PROHIBITED.
1.20No public utility shall, as to rates or service, make or grant any unreasonable
1.21preference or advantage to any person or class of consumers or subject any person or class
1.22of consumers to any unreasonable prejudice or disadvantage.
1.23EFFECTIVE DATE.This section is effective the day following final enactment.

2.1    Sec. 3. Minnesota Statutes 2010, section 216B.16, subdivision 6b, is amended to read:
2.2    Subd. 6b. Energy conservation improvement. (a) Except as otherwise provided
2.3in this subdivision, all investments and expenses of a public utility as defined in section
2.4216B.241, subdivision 1 , paragraph (i), incurred in connection with energy conservation
2.5improvements shall be recognized and included by the commission in the determination of
2.6just and reasonable rates as if the investments and expenses were directly made or incurred
2.7by the utility in furnishing utility service.
2.8    (b) The commission shall not include investments and expenses for energy
2.9conservation improvements shall not be included by the commission in the determination
2.10of (i) determining: (1) just and reasonable electric and gas rates for retail electric and gas
2.11service provided to large electric customer facilities that have been exempted by the
2.12commissioner of the department pursuant to energy customers exempted under section
2.13216B.241, subdivision 1a , paragraph (b) or (e); or (ii) (2) just and reasonable gas rates for
2.14large energy facilities or commercial gas customers that are not large energy customers
2.15that have been exempted under section 216B.241, subdivision 1a, paragraph (c) or (e).
2.16    (c) The commission may permit a public utility to file rate schedules providing for
2.17annual recovery of the costs of energy conservation improvements. These rate schedules
2.18may be applicable to less than all the customers in a class of retail customers if necessary to
2.19reflect the requirements of section 216B.241. The commission shall allow a public utility,
2.20without requiring a general rate filing under this section, to reduce the electric and gas
2.21rates applicable to a large electric energy customer facilities that have has been exempted
2.22by the commissioner of the department pursuant to under section 216B.241, subdivision
2.231a , paragraph (b) or (e), and to reduce the gas rate applicable to a large energy facility or
2.24to a commercial gas customer that is not a large energy customer that has been exempted
2.25under section 216B.241, subdivision 1a, paragraph (c) or (e), by an amount that reflects
2.26the elimination of energy conservation improvement investments or expenditures for those
2.27facilities. In the event that the commission has set electric or gas rates based on the use of
2.28an accounting methodology that results in the cost of conservation improvements being
2.29recovered from utility customers over a period of years, the rate reduction may occur in a
2.30series of steps to coincide with the recovery of balances due to the utility for conservation
2.31improvements made by the utility on or before December 31, 2007.
2.32    (d) Investments and expenses of a public utility shall not include electric utility
2.33infrastructure costs as defined in section 216B.1636, subdivision 1, paragraph (b).
2.34(e) Notwithstanding any provision in this chapter, a power plant using natural gas
2.35as a primary fuel to generate electricity by means of cogeneration, as defined in section
2.36216B.166, subdivision 2, and whose construction began after July 1, 1994, and before
3.1July 1, 1997, is exempt from any charges from a public utility serving the power plant
3.2to recover costs incurred by the public utility to meet the requirements to make energy
3.3conservation improvements under section 216B.241.
3.4EFFECTIVE DATE.This section is effective the day following final enactment.

3.5    Sec. 4. Minnesota Statutes 2010, section 216B.16, is amended by adding a subdivision
3.6to read:
3.7    Subd. 6e. Revenue allocation among consumer classes. Cost of service shall
3.8be the primary consideration in the commission's determination of revenue allocation
3.9among consumer classes. Factors other than cost of service, including impact on business
3.10development and job growth, may also be considered and evaluated by the commission in
3.11determining revenue allocations. Factors used in determining revenue allocation must
3.12be supported by record evidence.
3.13EFFECTIVE DATE.This section is effective the day following final enactment
3.14and applies to filings for rate changes filed on and after that date.

3.15    Sec. 5. Minnesota Statutes 2010, section 216B.16, subdivision 7, is amended to read:
3.16    Subd. 7. Energy and emission control products cost adjustment. Notwithstanding
3.17any other provision of this chapter, the commission may permit a public utility to file
3.18rate schedules containing provisions for the automatic adjustment of charges for public
3.19utility service in direct relation to changes in:
3.20(1) federally regulated wholesale rates for energy delivered through interstate
3.21facilities;
3.22(2) direct costs for natural gas delivered; or
3.23(3) costs for fuel used in generation of electricity or the manufacture of gas; or
3.24(4) prudent costs incurred by a public utility for sorbents, reagents, or chemicals
3.25used to control emissions from an electric generation facility, provided that these costs are
3.26not recovered elsewhere in rates. The utility must track and report annually the volumes
3.27and costs of sorbents, reagents, or chemicals using separate accounts by generating plant.
3.28EFFECTIVE DATE.This section is effective the day following final enactment.

3.29    Sec. 6. Minnesota Statutes 2010, section 216B.16, subdivision 9, is amended to read:
3.30    Subd. 9. Charitable contribution. The commission shall allow as operating
3.31expenses only those charitable contributions which that the commission deems prudent and
4.1which that qualify under section 290.21, subdivision 3, clause (b) 300.66, subdivision 3.
4.2Only 50 percent of the qualified contributions shall be are allowed as operating expenses.

4.3    Sec. 7. Minnesota Statutes 2010, section 216B.16, subdivision 15, is amended to read:
4.4    Subd. 15. Low-income affordability programs. (a) The commission must
4.5consider ability to pay as a factor in setting utility rates and may establish affordability
4.6programs for low-income residential ratepayers in order to ensure affordable, reliable,
4.7and continuous service to low-income utility customers. Affordability programs may
4.8include inverted block rates in which lower energy prices are made available to lower
4.9usage customers. By September 1, 2007, A public utility serving low-income residential
4.10ratepayers who use natural gas for heating must file an affordability program with the
4.11commission. For purposes of this subdivision, "low-income residential ratepayers" means
4.12ratepayers who receive energy assistance from the low-income home energy assistance
4.13program (LIHEAP).
4.14    (b) Any affordability program the commission orders a utility to implement must:
4.15    (1) lower the percentage of income that participating low-income households devote
4.16to energy bills;
4.17    (2) increase participating customer payments over time by increasing the frequency
4.18of payments;
4.19    (3) decrease or eliminate participating customer arrears;
4.20    (4) lower the utility costs associated with customer account collection activities; and
4.21    (5) coordinate the program with other available low-income bill payment assistance
4.22and conservation resources.
4.23    (c) In ordering affordability programs, the commission may require public utilities to
4.24file program evaluations that measure the effect of the affordability program on:
4.25    (1) the percentage of income that participating households devote to energy bills;
4.26    (2) service disconnections; and
4.27    (3) frequency of customer payments, utility collection costs, arrearages, and bad
4.28debt.
4.29    (d) The commission must issue orders necessary to implement, administer, and
4.30evaluate affordability programs, and to allow a utility to recover program costs, including
4.31administrative costs, on a timely basis. The commission may not allow a utility to recover
4.32administrative costs, excluding start-up costs, in excess of five percent of total program
4.33costs, or program evaluation costs in excess of two percent of total program costs. The
4.34commission must permit deferred accounting, with carrying costs, for recovery of program
4.35costs incurred during the period between general rate cases.
5.1    (e) Public utilities may use information collected or created for the purpose of
5.2administering energy assistance to administer affordability programs.
5.3EFFECTIVE DATE.This section is effective the day following final enactment.

5.4    Sec. 8. Minnesota Statutes 2010, section 216B.16, is amended by adding a subdivision
5.5to read:
5.6    Subd. 19. Multiyear rate plan. (a) A public utility may propose, and the
5.7commission may approve, approve as modified, or reject, a multiyear rate plan as provided
5.8in this subdivision. The term "multiyear rate plan" refers to a plan establishing the rates
5.9the utility may charge for each year of the specified period of years, which period cannot
5.10exceed four years, to be covered by the plan. The commission may approve a multiyear
5.11rate plan only if it finds that the plan establishes just and reasonable rates for the utility,
5.12applying the factors described in subdivision 6 and, if enacted, subdivision 6e. Consistent
5.13with subdivision 4 of this section, the burden of proof to demonstrate that the multiyear
5.14rate plan is just and reasonable shall be on the public utility proposing the plan.
5.15(b) Rates charged under the multiyear rate plan must be based only upon the utility's
5.16reasonable and prudent costs of service over the term of the plan, as determined by the
5.17commission, provided that the costs are not being recovered elsewhere in rates. Rate
5.18adjustments authorized under subdivisions 6b and 7 may continue outside of a plan
5.19authorized under this subdivision.
5.20(c) The commission may, by order, establish terms, conditions, and procedures for a
5.21multiyear rate plan necessary to implement this section and ensure that rates remain just
5.22and reasonable during the course of the plan, including terms and procedures for rate
5.23adjustment. At any time prior to conclusion of a multiyear rate plan, the commission
5.24shall have the discretion to hear and consider a petition by any party to examine the
5.25reasonableness of the utility's rates under the plan, and adjust rates as necessary.
5.26(d) In reviewing a multiyear rate plan proposed in a general rate case under
5.27this section, the commission may extend the time requirements for issuance of a final
5.28determination prescribed in this section by an additional 90 days beyond its existing
5.29authority under subdivision 2, paragraph (f).

5.30    Sec. 9. Minnesota Statutes 2010, section 216B.164, subdivision 3, is amended to read:
5.31    Subd. 3. Purchases; small facilities. (a) For a qualifying facility having less than
5.3240-kilowatt capacity, the customer shall be billed for the net energy supplied by the utility
5.33according to the applicable rate schedule for sales to that class of customer. In the case
5.34of net input into the utility system by a qualifying facility having less than 40-kilowatt
6.1capacity, compensation to the customer shall be at a per kilowatt-hour rate determined
6.2under paragraph (b) or, (c), or subdivision 4.
6.3(b) In setting rates, the commission shall consider the fixed distribution costs to the
6.4utility not otherwise accounted for in the basic monthly charge and shall ensure that the
6.5costs charged to the qualifying facility are not discriminatory in relation to the costs
6.6charged to other customers of the utility. The commission shall set the rates for net
6.7input into the utility system based on avoided costs as defined in the Code of Federal
6.8Regulations, title 18, section 292.101, paragraph (b)(6), the factors listed in Code of
6.9Federal Regulations, title 18, section 292.304, and all other relevant factors.
6.10(c) Notwithstanding any provision in this chapter to the contrary, a qualifying facility
6.11having less than 40-kilowatt capacity that is interconnected with a nongenerating utility
6.12may elect that the compensation to be compensated for net input by the qualifying facility
6.13into the utility system shall be at the average retail utility energy rate. "Average retail
6.14utility energy rate" is defined as the average of the retail energy rates, exclusive of special
6.15rates based on income, age, or energy conservation, according to the applicable rate
6.16schedule of the utility for sales to that class of customer rate the nongenerating utility pays
6.17a generating utility or utilities to supply electricity to the nongenerating utility, including,
6.18but not limited to, energy, capacity, and transmission costs.
6.19(d) If the qualifying facility is interconnected with a nongenerating utility which has
6.20a sole source contract with a municipal power agency or a generation and transmission
6.21utility, the nongenerating utility may elect to treat its purchase of any net input under this
6.22subdivision as being made on behalf of its supplier and shall be reimbursed by its supplier
6.23for any additional costs incurred in making the purchase. A qualifying facilities facility
6.24having less than 40-kilowatt capacity may, at the customer's option, elect to be governed
6.25by the provisions of subdivision 4.
6.26For the purposes of this section, "nongenerating utility" has the meaning given
6.27in Minnesota Rules, chapter 7835.0100.
6.28EFFECTIVE DATE.This section is effective the day following final enactment
6.29and applies to power purchase agreements signed after July 1, 2011.

6.30    Sec. 10. Minnesota Statutes 2010, section 216B.1691, is amended by adding a
6.31subdivision to read:
6.32    Subd. 2e. Rate impact of standard compliance; report. Each electric utility
6.33must submit to the commission and to the chairs and ranking minority members of
6.34the senate and house committees with primary jurisdiction over energy policy a report
6.35containing an analysis and estimation of the rate impact of activities of the electric utility
7.1necessary to comply with section 216B.1691. Those activities include, without limitation,
7.2energy purchases, generation facility acquisition and construction, and transmission
7.3improvements. An initial report must be submitted within 150 days of the effective date of
7.4this section. After the initial report, a report must be updated and submitted with each
7.5integrated resource plan or plan modification filed by the electric utility under section
7.6216B.2422. The reporting obligation of an electric utility under this subdivision expires
7.7December 31, 2025, for an electric utility subject to subdivision 2a, paragraph (a), and
7.8December 31, 2020, for an electric utility subject to subdivision 2a, paragraph (b).
7.9EFFECTIVE DATE.This section is effective the day following final enactment.

7.10    Sec. 11. REPEALER.
7.11Minnesota Statutes 2010, section 216B.242, is repealed.
7.12EFFECTIVE DATE.This section is effective the day following final enactment.


7.15    Section 1. Minnesota Statutes 2010, section 216B.2401, is amended to read:
7.16216B.2401 ENERGY CONSERVATION POLICY GOAL.
7.17    It is the energy policy of the state of Minnesota to achieve annual energy savings
7.18equal to 1.5 percent of annual retail energy sales of electricity and natural gas directly
7.19through customer-initiated conservation activities, energy conservation improvement
7.20programs and rate design, such as inverted block rates in which lower energy prices
7.21are made available to lower-usage residential customers, and indirectly through energy
7.22codes and appliance standards, programs designed to transform the market or change
7.23consumer behavior, energy savings resulting from efficiency improvements to the utility
7.24infrastructure and system, and other efforts to promote energy efficiency and energy
7.25conservation.
7.26EFFECTIVE DATE.This section is effective the day following final enactment.

7.27    Sec. 2. Minnesota Statutes 2010, section 216B.241, subdivision 1, is amended to read:
7.28    Subdivision 1. Definitions. For purposes of this section and section 216B.16,
7.29subdivision 6b , the terms defined in this subdivision have the meanings given them.
7.30    (a) "Commission" means the Public Utilities Commission.
7.31    (b) "Commissioner" means the commissioner of commerce.
8.1    (c) "Customer facility" means all buildings, structures, equipment, and installations
8.2at a single site.
8.3    (d) "Department" means the Department of Commerce.
8.4    (e) (d) "Energy conservation" means demand-side management of energy supplies
8.5resulting in a net reduction in energy use. Load management that reduces overall energy
8.6use is energy conservation.
8.7    (f) (e) "Energy conservation improvement" means a project that results in energy
8.8efficiency or energy conservation. Energy conservation improvement may include waste
8.9heat recovery converted into electricity but does not include electric utility infrastructure
8.10projects approved by the commission under section 216B.1636.
8.11    (g) (f) "Energy efficiency" means measures or programs, including energy
8.12conservation measures or programs, that target consumer behavior, equipment, processes,
8.13or devices designed to produce either an absolute decrease in consumption of electric
8.14energy or natural gas or a decrease in consumption of electric energy or natural gas on a
8.15per unit of production basis without a reduction in the quality or level of service provided
8.16to the energy consumer.
8.17    (h) (g) "Gross annual retail energy sales" means annual electric sales to all retail
8.18customers in a utility's or association's Minnesota service territory or natural gas
8.19throughput to all retail customers, including natural gas transportation customers, on a
8.20utility's distribution system in Minnesota. For purposes of this section, gross annual retail
8.21energy sales exclude: (1) gas sales to a large energy facility or a commercial gas customer
8.22that is not a large energy customer and is exempted under subdivision 1a, paragraph (c) or
8.23(e); and (2) gas and electric sales to a large electric energy customer facility exempted
8.24by the commissioner under subdivision 1a, paragraph (b).
8.25    (i) (h) "Investments and expenses of a public utility" includes the investments
8.26and expenses incurred by a public utility in connection with an energy conservation
8.27improvement, including but not limited to:
8.28    (1) the differential in interest cost between the market rate and the rate charged on a
8.29no-interest or below-market interest loan made by a public utility to a customer for the
8.30purchase or installation of an energy conservation improvement;
8.31    (2) the difference between the utility's cost of purchase or installation of energy
8.32conservation improvements and any price charged by a public utility to a customer for
8.33such improvements.
8.34    (j) (i) "Large electric energy customer facility" means a customer with a facility
8.35that imposes a peak electrical demand on an electric utility's system of not less than
8.3620,000 kilowatts, measured in the same way as the utility that serves the customer facility
9.1measures electrical demand for billing purposes, and for which electric services are
9.2provided at retail on a single bill by a utility operating in the state or a customer with a
9.3facility that consumes not less than 500 million cubic feet of natural gas annually. When
9.4calculating peak demand, a large energy customer may: (1) include demand offset by
9.5on-site cogeneration facilities; and (2) if engaged in mineral extraction, aggregate peak
9.6energy demand from the customer's mining and processing facilities.
9.7    (k) (j) "Large energy facility" has the meaning given it in section 216B.2421,
9.8subdivision 2, clause (1).
9.9    (l) (k) "Load management" means an activity, service, or technology to change the
9.10timing or the efficiency of a customer's use of energy that allows a utility or a customer to
9.11respond to wholesale market fluctuations or to reduce peak demand for energy or capacity.
9.12    (m) (l) "Low-income programs" means energy conservation improvement programs
9.13that directly serve the needs of low-income persons, including low-income renters.
9.14    (n) (m) "Waste heat recovery converted into electricity" means an energy recovery
9.15process that converts otherwise lost energy from the heat of exhaust stacks or pipes used
9.16for engines or manufacturing or industrial processes, or the reduction of high pressure
9.17in water or gas pipelines.
9.18EFFECTIVE DATE.This section is effective the day following final enactment.

9.19    Sec. 3. Minnesota Statutes 2010, section 216B.241, subdivision 1a, is amended to read:
9.20    Subd. 1a. Investment, expenditure, and contribution; public utility. (a) For
9.21purposes of this subdivision and subdivision 2, "public utility" has the meaning given it
9.22in section 216B.02, subdivision 4. Each public utility shall spend and invest for energy
9.23conservation improvements under this subdivision and subdivision 2 the following
9.24amounts:
9.25    (1) for a utility that furnishes gas service, 0.5 percent of its gross operating revenues
9.26from service provided in the state;
9.27    (2) for a utility that furnishes electric service, 1.5 percent of its gross operating
9.28revenues from service provided in the state; and
9.29    (3) for a utility that furnishes electric service and that operates a nuclear-powered
9.30electric generating plant within the state, two percent of its gross operating revenues
9.31from service provided in the state.
9.32For purposes of this paragraph (a), "gross operating revenues" do not include revenues
9.33from large electric customer facilities energy customers exempted by the commissioner
9.34under paragraph (b), or from commercial gas customers that are not large energy
9.35customers and that are exempted under paragraph (c) or (e).
10.1    (b) The owner of A large electric energy customer facility may petition file with the
10.2commissioner to exempt both electric and gas utilities serving the large energy customer
10.3facility from the investment and expenditure requirements of paragraph (a) with respect
10.4to retail revenues attributable to the facility customer. At a minimum, The petition must
10.5be supported by evidence relating to filing must include a discussion of the competitive
10.6or economic pressures on the customer and a showing by the customer of reasonable
10.7of the efforts taken by the customer to identify, evaluate, and implement cost-effective
10.8conservation improvements at the facility. If a petition is filed on or before October 1 of
10.9any year, the order of the commissioner to exempt revenues attributable to the facility can
10.10be effective no earlier than January 1 of the following year. The commissioner shall not
10.11grant an exemption if the commissioner determines that granting the exemption is contrary
10.12to the public interest. The commissioner may, after investigation, rescind any exemption
10.13granted under this paragraph upon a determination that the customer is not continuing
10.14to make reasonable efforts to identify, evaluate, and implement energy conservation
10.15improvements at the large electric customer facility. For the purposes of investigations by
10.16the commissioner under this paragraph, the owner of any large electric customer facility
10.17shall, upon request, provide the commissioner with updated information comparable to that
10.18originally supplied in or with the owner's original petition under this paragraph. Any such
10.19filing must be approved and become effective January 1 of the year following the filing. A
10.20large energy customer that is exempt from the investment and expenditure requirements of
10.21paragraph (a) under an order from the commissioner issued before the effective date of this
10.22section does not need to resubmit a petition to retain its exempt status. No exempt large
10.23energy customer may participate in a utility conservation improvement program unless the
10.24large energy customer files with the commissioner to withdraw its exemption.
10.25    (c) A commercial gas customer that is not a large energy customer and that purchases
10.26natural gas from a public utility having fewer than 300,000 natural gas customers in
10.27Minnesota may petition the commissioner to exempt gas utilities serving the commercial
10.28gas customer from the investment and expenditure requirements of paragraph (a) with
10.29respect to retail revenues attributable to the commercial gas customer. The petition must
10.30be supported by evidence demonstrating that the commercial gas customer has or can
10.31reasonably acquire the capability to bypass use of the utility's gas distribution system by
10.32obtaining natural gas directly from a supplier not regulated by the commission.
10.33(d) The commissioner may require investments or spending greater than the amounts
10.34required under this subdivision for a public utility whose most recent advance forecast
10.35required under section 216B.2422 or 216C.17 projects a peak demand deficit of 100
10.36megawatts or greater within five years under midrange forecast assumptions.
11.1    (d) (e) A public utility or owner of a large electric customer facility may appeal a
11.2decision of the commissioner under paragraph (b), or (c), or (d) to the commission under
11.3subdivision 2. In reviewing a decision of the commissioner under paragraph (b), or (c), or
11.4(d), the commission shall rescind the decision if it finds that the required investments or
11.5spending will:
11.6    (1) not result in cost-effective energy conservation improvements; or
11.7    (2) otherwise not be in the public interest.
11.8EFFECTIVE DATE.This section is effective the day following final enactment.

11.9    Sec. 4. Minnesota Statutes 2010, section 216B.241, subdivision 1b, is amended to read:
11.10    Subd. 1b. Conservation improvement by cooperative association or
11.11municipality. (a) This subdivision applies to:
11.12    (1) a cooperative electric association that provides retail service to its members;
11.13    (2) a municipality that provides electric service to retail customers; and
11.14    (3) a municipality with more than 1,000,000,000 cubic feet in annual throughput
11.15sales to natural gas to retail customers.
11.16    (b) Each cooperative electric association and municipality subject to this subdivision
11.17shall spend and invest for energy conservation improvements under this subdivision
11.18the following amounts:
11.19    (1) for a municipality, 0.5 percent of its gross operating revenues from the sale of
11.20gas and 1.5 percent of its gross operating revenues from the sale of electricity, excluding
11.21gross operating revenues from electric and gas service provided in the state to large
11.22electric customer facilities; and
11.23    (2) for a cooperative electric association, 1.5 percent of its gross operating revenues
11.24from service provided in the state, excluding gross operating revenues from service
11.25provided in the state to large electric customer facilities indirectly through a distribution
11.26cooperative electric association.
11.27    (c) Each municipality and cooperative electric association subject to this subdivision:
11.28(1) shall make a good-faith effort to meet an annual energy-savings goal equivalent
11.29to 1.5 percent gross annual retail energy sales, although no municipality or cooperative
11.30association is required to spend more than the proportion of gross operating revenues cited
11.31in paragraph (b) to achieve the energy-savings goal;
11.32(2) may, if it experiences zero or negative growth in gross retail energy sales, be
11.33deemed to satisfy the energy-savings goal if it achieves savings equal to 0.75 percent of
11.34gross retail energy sales;
12.1(3) shall calculate the energy-savings goal based on weather-normalized average
12.2gross retail energy sales during the three most recent calendar years;
12.3(4) may elect to carry forward energy-savings in excess of 1.5 percent to apply to the
12.4energy-savings goal in subsequent years;
12.5(5) may use a particular energy savings only for one year's goal;
12.6(6) may apply towards its energy-savings goal energy saved from electric utility
12.7infrastructure projects as defined in section 216B.1636, provided that the projects result
12.8in increased efficiency greater than that which would have occurred through normal
12.9maintenance activity; and
12.10(7) may apply toward its energy-savings goal five kilowatt-hours per dollar spent,
12.11including labor and administrative costs, to educate customers about energy conservation
12.12and to educate and train utility employees, contractors, and others to perform energy
12.13audits, install conservation measures, and conduct other activities directly related to
12.14conservation investments.
12.15(d) Each municipality and cooperative electric association subject to this subdivision
12.16shall identify and implement energy conservation improvement spending and investments
12.17that are appropriate for the municipality or association, except that a municipality or
12.18association may not spend or invest for energy conservation improvements that directly
12.19benefit a large energy facility or a large electric energy customer facility for which the
12.20commissioner has issued an exemption exempted under subdivision 1a, paragraph (b). A
12.21municipality or cooperative electric association whose annual gross retail energy sales
12.22increase by ten percent or more over the previous year as the result of the addition of a
12.23single new customer or increased demand from a single existing customer may petition
12.24the commissioner to exclude all sales from that customer from its energy-savings goal.
12.25If the commissioner approves the exclusion, the municipality or cooperative electric
12.26association may petition the commissioner annually to extend the exclusion, even if the
12.27incremental sales added by the customer no longer increase gross retail energy sales by ten
12.28percent or more over the previous year. The commissioner must approve the extension if
12.29the commissioner determines that the petition contains sufficient evidence to demonstrate
12.30that the customer whose sales are sought to be excluded continues to make reasonable
12.31efforts to identify, evaluate, and implement energy conservation improvements at the
12.32customer's facility. A municipality or cooperative electric association may petition for an
12.33exemption under this paragraph regarding an eligible sales increase that occurred in 2008,
12.342009, or 2010, but any exemption approved for an eligible sales increase in those years
12.35may apply only to the municipality's or cooperative electric association's energy-saving
12.36goal for 2012 and, if extended by the commissioner, thereafter.
13.1(e) A municipality and cooperative electric association subject to this subdivision
13.2is not required to make energy conservation investments to attain the energy-savings
13.3goal of this subdivision that are not cost-effective even if the investment is necessary
13.4to attain the energy-savings goal. For the purpose of this paragraph, in determining
13.5cost-effectiveness, the commissioner shall consider the costs and benefits to ratepayers,
13.6the cooperative electric association or municipality, participants, and society. In addition,
13.7the commissioner shall consider the rate at which a cooperative electric association or
13.8municipality is increasing its energy savings and its expenditures on energy conservation.
13.9    (d) (f) Each municipality and cooperative electric association subject to this
13.10subdivision may spend and invest annually up to ten percent of the total amount required
13.11to be spent and invested on energy conservation improvements under this subdivision
13.12on research and development projects that meet the definition of energy conservation
13.13improvement in subdivision 1 and that are funded directly by the municipality or
13.14cooperative electric association.
13.15    (e) (g) Load-management activities may be used to meet 50 percent of the
13.16conservation investment and spending requirements of this subdivision. The amount
13.17of energy a utility shifts from peak daily demand by implementing load-management
13.18activities may count for up to 50 percent of the energy-savings goal of a municipality or
13.19cooperative electric association.
13.20    (f) (h) A generation and transmission cooperative electric association that provides
13.21energy services to cooperative electric associations that provide electric service at retail to
13.22consumers may invest in energy conservation improvements on behalf of the associations
13.23it serves and may fulfill the conservation, spending, reporting, and energy-savings goals on
13.24an aggregate basis. A municipal power agency or other not-for-profit entity that provides
13.25energy service to municipal utilities that provide electric service at retail may invest in
13.26energy conservation improvements on behalf of the municipal utilities it serves and may
13.27fulfill the conservation, spending, reporting, and energy-savings goals on an aggregate
13.28basis, under an agreement between the municipal power agency or not-for-profit entity
13.29and each municipal utility for funding the investments.
13.30    (g) (i) Each municipality or cooperative electric association shall file energy
13.31conservation improvement plans or a summary of the plans by June 1 on a schedule
13.32determined by order of the commissioner, but at least every three years. Plans or
13.33summaries received by June 1 must be approved or approved as modified reviewed by the
13.34commissioner and the commissioner's comments must be submitted to the municipality
13.35or cooperative electric association by December 1 of the same year. The municipality or
13.36cooperative electric association shall provide an evaluation to the commissioner detailing
14.1summarizing its energy conservation improvement spending and investments for the
14.2previous period. The evaluation must briefly describe each conservation program and must
14.3specify the energy savings or increased efficiency in the use of energy within the service
14.4territory of the utility municipality or cooperative electric association that is the result of
14.5the spending and investments. The evaluation must analyze the cost-effectiveness of the
14.6utility's municipality's or cooperative electric association's conservation programs, using a
14.7list of baseline energy and capacity savings assumptions developed in consultation with the
14.8department. The commissioner shall review each evaluation and make recommendations,
14.9where appropriate, to the municipality or cooperative electric association to increase the
14.10effectiveness of conservation improvement activities. In making recommendations, the
14.11commissioner may consider the municipality's or cooperative electric association's rate of
14.12conservation spending and energy savings, historical conservation investment experience,
14.13impact on rates of conservation spending and energy savings, customer class profile, load
14.14growth trends, conservation potential, customers' ability to pay, as well as local economic
14.15conditions, advancing technology, and other relevant factors.
14.16    (h) (j) A municipality may spend up to 50 percent of its required spending under this
14.17section to refurbish an existing district heating or cooling system until July 1, 2007. From
14.18July 1, 2007, through June 30, 2011, expenditures made to refurbish a district heating or
14.19cooling system are considered to be load-management activities under paragraph (e) (g).
14.20This paragraph expires July 1, 2011.
14.21    (i) (k) The commissioner shall consider and may require a utility, association, or
14.22other entity providing energy efficiency and conservation services under this section to
14.23undertake a program suggested by an outside source, including a political subdivision,
14.24nonprofit corporation, or community organization.
14.25EFFECTIVE DATE.This section is effective the day following final enactment.

14.26    Sec. 5. Minnesota Statutes 2010, section 216B.241, subdivision 1c, is amended to read:
14.27    Subd. 1c. Energy-saving goals; public utility. (a) The commissioner shall
14.28establish energy-saving goals for energy conservation improvement expenditures and shall
14.29evaluate an energy conservation improvement program on how well it meets the goals set.
14.30    (b) Each individual public utility and association shall have an annual energy-savings
14.31goal equivalent to 1.5 percent of gross annual retail energy sales unless modified by the
14.32commissioner under paragraph (d). The savings goals must be calculated based on the
14.33most recent three-year weather-normalized average. A public utility or association may
14.34elect to carry forward energy savings in excess of 1.5 percent for a year to the succeeding
14.35three calendar years, except that savings from electric utility infrastructure projects
15.1allowed under paragraph (d) may be carried forward for five years. A particular energy
15.2savings can be used only for one year's goal.
15.3    (c) The commissioner must adopt a filing schedule that is designed to have all
15.4utilities and associations operating under an energy-savings plan by calendar year 2010.
15.5    (d) In its energy conservation improvement plan filing, a public utility or association
15.6may request the commissioner to adjust its annual energy-savings percentage goal based
15.7on its historical conservation investment experience, customer class makeup, load growth,
15.8a conservation potential study, or other factors the commissioner determines warrants
15.9an adjustment. The commissioner may not approve a plan that provides for an annual
15.10energy-savings goal of less than one percent of gross annual retail energy sales from
15.11energy conservation improvements.
15.12    A public utility or association may include in its energy conservation plan energy
15.13savings from electric utility infrastructure projects approved by the commission under
15.14section 216B.1636 or waste heat recovery converted into electricity projects that may
15.15count as energy savings in addition to the minimum energy-savings goal of at least one
15.16percent for energy conservation improvements. Electric utility infrastructure projects
15.17must result in increased energy efficiency greater than that which would have occurred
15.18through normal maintenance activity.
15.19    (e) An energy-savings goal is not satisfied by attaining the revenue expenditure
15.20requirements of subdivisions 1a and 1b, but can only be satisfied by meeting the
15.21energy-savings goal established in this subdivision.
15.22    (f) An association or A public utility is not required to make energy conservation
15.23investments to attain the energy-savings goals of this subdivision that are not cost-effective
15.24even if the investment is necessary to attain the energy-savings goals. For the purpose
15.25of this paragraph, in determining cost-effectiveness, the commissioner shall consider
15.26the costs and benefits to ratepayers, the utility, participants, and society. In addition,
15.27the commissioner shall consider the rate at which an association or municipal utility is
15.28increasing its energy savings and its expenditures on energy conservation.
15.29    (g) On an annual basis, the commissioner shall produce and make publicly available
15.30a report on the annual energy savings and estimated carbon dioxide reductions achieved
15.31by the energy conservation improvement programs for the two most recent years for
15.32which data is available. The commissioner shall report on program performance both in
15.33the aggregate and for each entity filing an energy conservation improvement plan for
15.34approval or review by the commissioner.
16.1    (h) By January 15, 2010, the commissioner shall report to the legislature whether
16.2the spending requirements under subdivisions 1a and 1b are necessary to achieve the
16.3energy-savings goals established in this subdivision.
16.4EFFECTIVE DATE.This section is effective the day following final enactment.

16.5    Sec. 6. Minnesota Statutes 2010, section 216B.241, subdivision 2, is amended to read:
16.6    Subd. 2. Programs. (a) The commissioner may require public utilities to make
16.7investments and expenditures in energy conservation improvements, explicitly setting
16.8forth the interest rates, prices, and terms under which the improvements must be offered to
16.9the customers. The required programs must cover no more than a three-year period. Public
16.10utilities shall file conservation improvement plans by June 1, on a schedule determined by
16.11order of the commissioner, but at least every three years. Plans received by a public utility
16.12by June 1 must be approved or approved as modified by the commissioner by December
16.131 of that same year. The commissioner shall evaluate the program on the basis of
16.14cost-effectiveness and the reliability of technologies employed. The commissioner's order
16.15must provide to the extent practicable for a free choice, by consumers participating in the
16.16program, of the device, method, material, or project constituting the energy conservation
16.17improvement and for a free choice of the seller, installer, or contractor of the energy
16.18conservation improvement, provided that the device, method, material, or project seller,
16.19installer, or contractor is duly licensed, certified, approved, or qualified, including under
16.20the residential conservation services program, where applicable.
16.21    (b) The commissioner may require a utility to make an energy conservation
16.22improvement investment or expenditure whenever the commissioner finds that the
16.23improvement will result in energy savings at a total cost to the utility less than the cost
16.24to the utility to produce or purchase an equivalent amount of new supply of energy. The
16.25commissioner shall nevertheless ensure that every public utility operate one or more
16.26programs under periodic review by the department.
16.27    (c) Each public utility subject to subdivision 1a may spend and invest annually up to
16.28ten percent of the total amount required to be spent and invested on energy conservation
16.29improvements under this section by the utility on research and development projects
16.30that meet the definition of energy conservation improvement in subdivision 1 and that
16.31are funded directly by the public utility.
16.32    (d) A public utility may not spend for or invest in energy conservation improvements
16.33that directly benefit a large energy facility, or a large electric energy customer, facility
16.34for which the commissioner has issued an exemption pursuant to or a commercial gas
16.35customer that is not a large energy customer exempted under subdivision 1a, paragraph
17.1(b), (c), or (e). The commissioner shall consider and may require a utility to undertake
17.2a program suggested by an outside source, including a political subdivision, a nonprofit
17.3corporation, or community organization.
17.4    (e) A utility, a political subdivision, or a nonprofit or community organization
17.5that has suggested a program, the attorney general acting on behalf of consumers and
17.6small business interests, or a utility customer that has suggested a program and is not
17.7represented by the attorney general under section 8.33 may petition the commission to
17.8modify or revoke a department decision under this section, and the commission may do
17.9so if it determines that the program is not cost-effective, does not adequately address the
17.10residential conservation improvement needs of low-income persons, has a long-range
17.11negative effect on one or more classes of customers, or is otherwise not in the public
17.12interest. The commission shall reject a petition that, on its face, fails to make a reasonable
17.13argument that a program is not in the public interest.
17.14    (f) The commissioner may order a public utility to include, with the filing of the
17.15utility's proposed conservation improvement plan under paragraph (a), program status
17.16report required under Minnesota Rules, part 7690.0550, the results of an independent audit
17.17of the utility's conservation improvement programs and expenditures performed by the
17.18department or an auditor with experience in the provision of energy conservation and
17.19energy efficiency services approved by the commissioner and chosen by the utility. The
17.20audit must specify the energy savings or increased efficiency in the use of energy within
17.21the service territory of the utility that is the result of the spending and investments. The
17.22audit must evaluate the cost-effectiveness of the utility's conservation programs.
17.23EFFECTIVE DATE.This section is effective the day following final enactment.


17.26    Section 1. Minnesota Statutes 2010, section 16E.15, subdivision 2, is amended to read:
17.27    Subd. 2. Software sale fund. (a) Except as provided in paragraphs paragraph (b)
17.28and (c), proceeds of the sale or licensing of software products or services by the chief
17.29information officer must be credited to the enterprise technology revolving fund. If a state
17.30agency other than the Office of Enterprise Technology has contributed to the development
17.31of software sold or licensed under this section, the chief information officer may reimburse
17.32the agency by discounting computer services provided to that agency.
17.33(b) Proceeds of the sale or licensing of software products or services developed by
17.34the Pollution Control Agency, or custom developed by a vendor for the agency, must be
17.35credited to the environmental fund.
18.1(c) Proceeds of the sale or licensing of software products or services developed by
18.2the Department of Education, or custom developed by a vendor for the agency, to support
18.3the achieved savings assessment program, must be appropriated to the commissioner of
18.4education and credited to the weatherization program to support weatherization activities.

18.5    Sec. 2. Minnesota Statutes 2010, section 216B.096, subdivision 3, is amended to read:
18.6    Subd. 3. Utility obligations before cold weather period. Each year, between
18.7September 1 and October 15, each utility must provide all customers, personally, or by
18.8first class mail, or electronically for those requesting electronic billing, a summary of
18.9rights and responsibilities. The summary must also be provided to all new residential
18.10customers when service is initiated.

18.11    Sec. 3. Minnesota Statutes 2010, section 216B.1691, subdivision 1, is amended to read:
18.12    Subdivision 1. Definitions. (a) Unless otherwise specified in law, "eligible energy
18.13technology" means an energy technology that generates electricity from the following
18.14renewable energy sources:
18.15(1) solar;
18.16(2) wind;
18.17(3) hydroelectric with a capacity of less than 100 megawatts;
18.18(4) hydrogen, provided that after January 1, 2010, the hydrogen must be generated
18.19from the resources listed in this paragraph; or
18.20(5) biomass, which includes, without limitation, landfill gas; an anaerobic digester
18.21system; the predominantly organic components of wastewater effluent, sludge, or related
18.22by-products from publicly owned treatment works, but not including incineration of
18.23wastewater sludge to produce electricity; and an energy recovery facility used to capture
18.24the heat value of mixed municipal solid waste or refuse-derived fuel from mixed municipal
18.25solid waste as a primary fuel.
18.26    (b) "Electric utility" means a public utility providing electric service, a generation
18.27and transmission cooperative electric association, a municipal power agency, or a power
18.28district.
18.29    (c) "Total retail electric sales" means the kilowatt-hours of electricity sold in a year
18.30by an electric utility to retail customers of the electric utility or to a distribution utility for
18.31distribution to the retail customers of the distribution utility. "Total retail electric sales"
18.32does not include the sale of electricity generated by hydropower by a federal power agency.
18.33EFFECTIVE DATE.This section is effective retroactively from March 19, 2010.

19.1    Sec. 4. Minnesota Statutes 2010, section 216B.1694, is amended by adding a
19.2subdivision to read:
19.3    Subd. 3. Staging and permitting. (a) A natural gas fired plant that is located
19.4on one site designated as an innovative energy project site under subdivision 1, clause
19.5(3), is accorded the regulatory incentives granted to an innovative energy project under
19.6subdivision 2, clauses (1) to (3), and may exercise the authorities therein.
19.7(b) Following issuance of a final state or federal environmental impact statement for
19.8an innovative energy project that was a subject of contested case proceedings before an
19.9administrative law judge:
19.10(1) site and route permits and water appropriation approvals for an innovative energy
19.11project shall also be deemed valid for a plant meeting the requirements of paragraph (a)
19.12and shall remain valid until the earlier of: (i) four years from the date the final required
19.13state or federal preconstruction permit is issued; or (ii) June 30, 2019; and
19.14(2) no air, water, and other permit issued by a state agency that is necessary for
19.15the construction of an innovative energy project shall be the subject of contested case
19.16hearings, notwithstanding Minnesota Rules, chapters 7000.1750 to 7000.2200.
19.17EFFECTIVE DATE.This section is effective the day following final enactment.

19.18    Sec. 5. Minnesota Statutes 2010, section 216B.2425, subdivision 2, is amended to read:
19.19    Subd. 2. List development; transmission projects report. (a) By November
19.201 of each odd-numbered year, a transmission projects report must be submitted to the
19.21commission by each utility, organization, or company that:
19.22(1) is a public utility, a municipal utility, a cooperative electric association, the
19.23generation and transmission organization that serves each utility or association, or a
19.24transmission company; and
19.25(2) owns or operates electric transmission lines in Minnesota, except a company or
19.26organization that owns a transmission line that serves a single customer or interconnects a
19.27single generating facility.
19.28(b) The report may be submitted jointly or individually to the commission.
19.29(c) The report must:
19.30(1) list specific present and reasonably foreseeable future inadequacies in the
19.31transmission system in Minnesota;
19.32(2) identify alternative means of addressing each inadequacy listed;
19.33(3) identify general economic, environmental, and social issues associated with
19.34each alternative; and
20.1(4) provide a summary of public input related to the list of inadequacies and the role
20.2of local government officials and other interested persons in assisting to develop the list
20.3and analyze alternatives.
20.4(d) To meet the requirements of this subdivision, reporting parties may rely on
20.5available information and analysis developed by a regional transmission organization
20.6or any subgroup of a regional transmission organization and may develop and include
20.7additional information as necessary.
20.8EFFECTIVE DATE.This section is effective the day following final enactment.

20.9    Sec. 6. Minnesota Statutes 2010, section 216B.49, subdivision 3, is amended to read:
20.10    Subd. 3. Commission approval required. It shall be is unlawful for any public
20.11utility organized under the laws of this state to offer or sell any security or, if organized
20.12under the laws of any other state or foreign country, to subject property in this state to
20.13an encumbrance for the purpose of securing the payment of any indebtedness unless the
20.14security issuance of the public utility shall is first be approved by the commission, either
20.15as an individual issuance or as one of multiple possible issuances approved in the course
20.16of a periodic proceeding reviewing the utility's proposed sources and uses of capital funds.
20.17Approval by the commission shall must be by formal written order.
20.18EFFECTIVE DATE.This section is effective the day following final enactment.

20.19    Sec. 7. Minnesota Statutes 2010, section 216B.62, subdivision 2, is amended to read:
20.20    Subd. 2. Assessing specific utility. Whenever the commission or department, in a
20.21proceeding upon its own motion, on complaint, or upon an application to it, shall deem it
20.22necessary, in order to carry out the duties imposed under this chapter and section 216A.085
20.23216A.14 (1) to investigate the books, accounts, practices, and activities of, or make
20.24appraisals of the property of, any public utility, (2) to render any engineering or accounting
20.25services to any public utility, or (3) to intervene before an energy regulatory agency, the
20.26public utility shall pay the expenses reasonably attributable to the investigation, appraisal,
20.27service, or intervention. The commission and department shall ascertain the expenses, and
20.28the department shall render a bill therefor to the public utility, either at the conclusion of
20.29the investigation, appraisal, or services, or from time to time during its progress, which bill
20.30shall constitute notice of the assessment and a demand for payment. The amount of the
20.31bills so rendered by the department shall be paid by the public utility into the state treasury
20.32within 30 days from the date of rendition. The total amount, in any one calendar year, for
20.33which any public utility shall become liable, by reason of costs incurred by the commission
21.1within that calendar year, shall not exceed two-fifths of one percent of the gross operating
21.2revenue from retail sales of gas, or electric service by the public utility within the state in
21.3the last preceding calendar year. Where, pursuant to this subdivision, costs are incurred
21.4within any calendar year which are in excess of two-fifths of one percent of the gross
21.5operating revenues, the excess costs shall not be chargeable as part of the remainder under
21.6subdivision 3, but shall be paid out of the general appropriation to the department and
21.7commission. In the case of public utilities offering more than one public utility service
21.8only the gross operating revenues from the public utility service in connection with which
21.9the investigation is being conducted shall be considered when determining this limitation.

21.10    Sec. 8. Minnesota Statutes 2010, section 216B.62, subdivision 3, is amended to read:
21.11    Subd. 3. Assessing all public utilities. The department and commission shall
21.12quarterly, at least 30 days before the start of each quarter, estimate the total of their
21.13expenditures in the performance of their duties relating to public utilities under sections
21.14216A.085 216A.14 and 216B.01 to 216B.67, other than amounts chargeable to public
21.15utilities under subdivision 2, 6, 7, or 8. The remainder shall be assessed by the commission
21.16and department to the several public utilities in proportion to their respective gross
21.17operating revenues from retail sales of gas or electric service within the state during the
21.18last calendar year. The assessment shall be paid into the state treasury within 30 days
21.19after the bill has been transmitted via mail, personal delivery, or electronic service to the
21.20several public utilities, which shall constitute notice of the assessment and demand of
21.21payment thereof. The total amount which may be assessed to the public utilities, under
21.22authority of this subdivision, shall not exceed one-sixth of one percent of the total gross
21.23operating revenues of the public utilities during the calendar year from retail sales of gas
21.24or electric service within the state. The assessment for the third quarter of each fiscal
21.25year shall be adjusted to compensate for the amount by which actual expenditures by
21.26the commission and department for the preceding fiscal year were more or less than the
21.27estimated expenditures previously assessed.

21.28    Sec. 9. Minnesota Statutes 2010, section 216C.052, is amended to read:
21.29216C.052 ENERGY RELIABILITY ADMINISTRATOR AND
21.30INTERVENTION OFFICE.
21.31    Subdivision 1. Responsibilities. (a) There is established the position of reliability
21.32administrator The Energy Reliability and Intervention Office is established in the
21.33Department of Commerce to represent the interests of Minnesota residents, businesses,
21.34and governments before bodies and agencies outside the state that make, interpret, or
22.1implement regional, national, and international energy policy and regulate and implement
22.2regional or national energy planning or infrastructure development. The administrator
22.3office shall act as a source of independent expertise and a technical advisor to advice for
22.4the commissioner of commerce, the Public Utilities Commission, and the public on issues
22.5related to the reliability and economics of the electric system. Under the guidance of the
22.6commissioner and the commission, the office shall also participate and advocate for the
22.7state's interests in other regional, national, and international energy matters potentially
22.8impacting Minnesota. In conducting its work, the administrator office shall provide
22.9assistance to the commissioner and the commission, as requested, in administering
22.10and implementing the department's duties under this section and sections 216B.1612,
22.11216B.1691 , 216B.2422, 216B.2425, and 216B.243; chapters 216E, 216F, and 216G; and
22.12rules associated with those provisions these sections and shall also:
22.13    (1) model and monitor in the state as well as regionally, nationally, and
22.14internationally, as appropriate, the use and operation of the energy infrastructure in
22.15the state, including which includes generation facilities, transmission lines, natural gas
22.16pipelines, new and emerging energy technologies, demand response and energy efficiency
22.17technologies, and other energy infrastructure;
22.18    (2) develop and present to the commissioner and the commission and parties
22.19technical advice and analyses of on proposed infrastructure projects, and provide technical
22.20advice to the commission within and outside of the state that could impact the state;
22.21    (3) present independent, factual, expert, and technical information on infrastructure
22.22proposals and reliability issues at public meetings hosted by the task force, the
22.23Environmental Quality Board, the department, or the commission.
22.24    (b) Upon request and subject to resource constraints, the administrator shall
22.25provide technical assistance regarding matters unrelated to applications for infrastructure
22.26improvements to the task force, the department, or the commission.
22.27    (c) The administrator may not advocate for any particular outcome in a commission
22.28proceeding, but office may give policy or technical advice to the commission as to the
22.29impact on the reliability and economic viability of the energy system of a particular project
22.30or projects of any state, region, or nation.
22.31    Subd. 2. Administrative issues. (a) The commissioner may select the administrator.
22.32The administrator must have at least five years of experience working as a power systems
22.33engineer or transmission planner, or in a position dealing with power system reliability
22.34issues, and may not have been a party or a participant in a commission energy proceeding
22.35for at least one year prior to selection by the commissioner. The commissioner shall
22.36oversee and direct the work of the administrator office, annually review the its expenses
23.1of the administrator, and annually approve the its budget of the administrator. The
23.2administrator commissioner may hire staff and may contract for technical expertise in
23.3performing duties when existing state resources are required for other state responsibilities
23.4or when special expertise is required. The salary of the administrator is governed by
23.5section 15A.0815, subdivision 2.
23.6    (b) Costs relating to a specific proceeding, analysis, or project are not general
23.7administrative costs. For purposes of this section, "energy utility" means public utilities,
23.8generation and transmission cooperative electric associations, and municipal power
23.9agencies providing natural gas or electric service in the state.
23.10    (c) The Department of Commerce shall pay:
23.11    (1) the general administrative costs of the administrator office, not to exceed
23.12$1,000,000 in a fiscal year, and shall assess energy utilities for those administrative costs.
23.13These costs must be consistent with the budget approved by the commissioner under
23.14paragraph (a). The department shall apportion the costs among all energy utilities in
23.15proportion to their respective gross operating revenues from sales of gas or electric service
23.16within the state during the last calendar year, and shall then render a bill to each utility on
23.17a regular basis; and
23.18    (2) costs relating to a specific proceeding analysis or project and shall render a bill to
23.19the specific energy utility or utilities participating in the proceeding, analysis, or project
23.20directly, either at the conclusion of a particular proceeding, analysis, or project, or from
23.21time to time during the course of the proceeding, analysis, or project.
23.22    (d) For purposes of administrative efficiency, the department shall assess energy
23.23utilities and issue bills in accordance with the billing and assessment procedures provided
23.24in section 216B.62, to the extent that these procedures do not conflict with this subdivision.
23.25The amount of the bills rendered by the department under paragraph (c) must be paid by
23.26the energy utility into an account in the special revenue fund in the state treasury within
23.2730 days from the date of billing and is appropriated to the department for the purposes
23.28provided in this section. The commission shall approve or approve as modified a rate
23.29schedule providing for the automatic adjustment of charges to recover amounts paid by
23.30utilities under this section. All amounts assessed under this section are in addition to
23.31amounts appropriated to the commission and the department by other law.
23.32    Subd. 4. Expiration. Subdivisions 1 and 2 expire June 30, 2012. Subdivision
23.333 expires June 30, 2008.

23.34    Sec. 10. Minnesota Statutes 2010, section 216C.11, is amended to read:
23.35216C.11 ENERGY CONSERVATION INFORMATION CENTER.
24.1The commissioner shall establish an Energy Information Center in the department's
24.2offices in St. Paul. The information center shall maintain a toll-free telephone information
24.3service and disseminate printed materials on energy conservation topics, including but
24.4not limited to, availability of loans and other public and private financing methods
24.5for energy conservation physical improvements, the techniques and materials used to
24.6conserve energy in buildings, including retrofitting or upgrading insulation and installing
24.7weatherstripping, the projected prices and availability of different sources of energy,
24.8and alternative sources of energy.
24.9The Energy Information Center shall serve as the official Minnesota Alcohol Fuels
24.10Information Center and shall disseminate information, printed, by the toll-free telephone
24.11information service, or otherwise on the applicability and technology of alcohol fuels.
24.12The information center shall include information on the potential hazards of energy
24.13conservation techniques and improvements in the printed materials disseminated. The
24.14commissioner shall not be liable for damages arising from the installation or operation of
24.15equipment or materials recommended by the information center.
24.16The information center shall use the information collected under section 216C.02,
24.17subdivision 1 , to maintain a central source of information on conservation and other
24.18energy-related programs, including both programs required by law or rule and programs
24.19developed and carried on voluntarily. In particular, the information center shall compile
24.20and maintain information on policies covering disconnections or denials of fuel during
24.21cold weather adopted by public utilities and other fuel suppliers not governed by section
24.22216B.096 or 216B.097, including the number of households disconnected or denied fuel
24.23and the duration of the disconnections or denials.

24.24    Sec. 11. Minnesota Statutes 2010, section 216C.264, is amended to read:
24.25216C.264 COORDINATING RESIDENTIAL WEATHERIZATION
24.26PROGRAMS.
24.27    Subdivision 1. Agency designation. The department is the state agency to apply
24.28for, receive, and disburse money made available to the state by federal law for the purpose
24.29of weatherizing the residences of low-income persons. The commissioner must coordinate
24.30available federal money with state money appropriated for this purpose.
24.31    Subd. 2. Grants. The commissioner must make grants of federal and state money
24.32to community action agencies and other public or private nonprofit agencies for the
24.33purpose of weatherizing the residences of low-income persons. Grant applications must
24.34be submitted in accordance with rules promulgated by the commissioner.
25.1    Subd. 3. Benefits of weatherization. In the case of any grant made to an owner of a
25.2rental dwelling unit for weatherization, the commissioner must require that (1) the benefits
25.3of weatherization assistance in connection with the dwelling unit accrue primarily to the
25.4low-income family that resides in the unit; (2) the rents on the dwelling unit will not be
25.5raised because of any increase in value due solely to the weatherization assistance; and (3)
25.6no undue or excessive enhancement will occur to the value of the dwelling unit.
25.7    Subd. 4. Rules. The commissioner must promulgate rules that describe procedures
25.8for the administration of grants, data to be reported by grant recipients, and compliance
25.9with relevant federal regulations. The commissioner must require that a rental unit
25.10weatherized under this section be rented to a household meeting the income limits of
25.11the program for 24 of the 36 months after weatherization is complete. In applying this
25.12restriction to multiunit buildings weatherized under this section, the commissioner must
25.13require that occupancy continue to reflect the proportion of eligible households in the
25.14building at the time of weatherization.
25.15    Subd. 5. Grant allocation. The commissioner must distribute supplementary
25.16state grants in a manner consistent with the goal of producing the maximum number of
25.17weatherized units. Supplementary state grants are provided primarily for the payment of
25.18additional labor costs for the federal weatherization program, and as an incentive for the
25.19increased production of weatherized units.
25.20Criteria for the allocation of state grants to local agencies include existing local
25.21agency production levels, emergency needs, and the potential for maintaining or increasing
25.22acceptable levels of production in the area.
25.23An eligible local agency may receive advance funding for 90 days' production, but
25.24thereafter must receive grants solely on the basis of program criteria.
25.25    Subd. 6. Eligibility criteria. To the extent allowed by federal regulations, the
25.26commissioner must ensure that the same income eligibility criteria apply to both the
25.27weatherization program and the energy assistance program.
25.28EFFECTIVE DATE.This section is effective the day following final enactment.

25.29    Sec. 12. Minnesota Statutes 2010, section 216E.18, subdivision 3, is amended to read:
25.30    Subd. 3. Funding; assessment. The commission shall finance its baseline studies,
25.31general environmental studies, development of criteria, inventory preparation, monitoring
25.32of conditions placed on site and route permits, and all other work, other than specific site
25.33and route designation, from an assessment made quarterly, at least 30 days before the start
25.34of each quarter, by the commission against all utilities with annual retail kilowatt-hour
25.35sales greater than 4,000,000 kilowatt-hours in the previous calendar year.
26.1Each share shall be determined as follows: (1) the ratio that the annual retail
26.2kilowatt-hour sales in the state of each utility bears to the annual total retail kilowatt-hour
26.3sales in the state of all these utilities, multiplied by 0.667, plus (2) the ratio that the annual
26.4gross revenue from retail kilowatt-hour sales in the state of each utility bears to the annual
26.5total gross revenues from retail kilowatt-hour sales in the state of all these utilities,
26.6multiplied by 0.333, as determined by the commission. The assessment shall be credited
26.7to the special revenue fund and shall be paid to the state treasury within 30 days after
26.8receipt of the bill, which shall constitute notice of said assessment and demand of payment
26.9thereof. The total amount which may be assessed to the several utilities under authority
26.10of this subdivision shall not exceed the sum of the annual budget of the commission
26.11for carrying out the purposes of this subdivision. The assessment for the second third
26.12quarter of each fiscal year shall be adjusted to compensate for the amount by which actual
26.13expenditures by the commission for the preceding fiscal year were more or less than the
26.14estimated expenditures previously assessed.
26.15EFFECTIVE DATE.This section is effective the day following final enactment.

26.16    Sec. 13. MELROSE PUBLIC UTILITIES COMMISSION MEMBERSHIP.
26.17Notwithstanding Minnesota Statutes, section 412.341, subdivision 1, the city
26.18of Melrose may by ordinance increase the membership of the city's public utilities
26.19commission to a maximum of seven members. The ordinance may also provide for the
26.20terms of the commission members and the terms must be staggered, provide that residency
26.21within the city is not a qualification for serving on the commission, and permit one or
26.22more members of the city council to serve on the commission.
26.23EFFECTIVE DATE; LOCAL APPROVAL.This section is effective the day after
26.24the governing body of the city of Melrose and its chief clerical officer complete in timely
26.25fashion their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

26.26    Sec. 14. REVISOR'S INSTRUCTION.
26.27The revisor of statutes shall renumber Minnesota Statutes, section 216C.052, as
26.28Minnesota Statutes, section 216A.14, and also make necessary cross-reference changes
26.29consistent with this renumbering.

26.30    Sec. 15. REPEALER.
26.31Minnesota Statutes 2010, sections 216A.085; and 216C.264, subdivision 4, are
26.32repealed."
27.1Amend the title accordingly