1.1.................... moves to amend H.F. No. 956 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. Minnesota Statutes 2012, section 216B.02, subdivision 4, is amended to
1.4read:
1.5    Subd. 4. Public utility. "Public utility" means persons, corporations, or other legal
1.6entities, their lessees, trustees, and receivers, now or hereafter operating, maintaining,
1.7or controlling in this state equipment or facilities for furnishing at retail natural,
1.8manufactured, or mixed gas or electric service to or for the public or engaged in the
1.9production and retail sale thereof but does not include (1) a municipality or a cooperative
1.10electric association, organized under the provisions of chapter 308A, producing or
1.11furnishing natural, manufactured, or mixed gas or electric service; (2) a retail seller of
1.12compressed natural gas used as a vehicular fuel which purchases the gas from a public
1.13utility; or (3) a retail seller of electricity used to recharge a battery that powers an electric
1.14vehicle, as defined in section 169.011, subdivision 26a, and that is not otherwise a public
1.15utility under this chapter. Except as otherwise provided, the provisions of this chapter
1.16shall not be applicable to any sale of natural, manufactured, or mixed gas or electricity
1.17by a public utility to another public utility for resale. In addition, the provisions of this
1.18chapter shall not apply to a public utility whose total natural gas business consists of
1.19supplying natural, manufactured, or mixed gas to not more than 650 customers within a
1.20city pursuant to a franchise granted by the city, provided a resolution of the city council
1.21requesting exemption from regulation is filed with the commission. The city council
1.22may rescind the resolution requesting exemption at any time, and, upon the filing of the
1.23rescinding resolution with the commission, the provisions of this chapter shall apply to the
1.24public utility. No person shall be deemed to be a public utility if it furnishes its services
1.25only to tenants or cooperative or condominium owners in buildings owned, leased, or
1.26operated by such person. No person shall be deemed to be a public utility if it furnishes
1.27service to occupants of a manufactured home or trailer park owned, leased, or operated by
2.1such person. No person shall be deemed to be a public utility if it produces or furnishes
2.2service to less than 25 persons. No person shall be deemed to be a public utility solely as a
2.3result of the person furnishing consumers with electricity or heat generated from solar
2.4generating equipment located on the consumer's property, provided the equipment is
2.5owned or operated by an entity other than the consumer.

2.6    Sec. 2. Minnesota Statutes 2012, section 216B.164, is amended by adding a
2.7subdivision to read:
2.8    Subd. 2a. Definitions. (a) For the purposes of this section, the following terms
2.9have the meanings given them:
2.10(b)"Aggregated meter" means a meter located on the premises of a customer's owned
2.11or leased property that is contiguous with property containing the customer's designated
2.12meter.
2.13(c) "Cogeneration" means a combined process whereby electrical and useful thermal
2.14energy are produced simultaneously.
2.15(d) "Contiguous property" means property owned or leased by the customer sharing
2.16a common border, without regard to interruptions in contiguity caused by easements,
2.17public thoroughfares, transportation rights-of-way, or utility rights-of-way.
2.18(e)"Customer" means the person who is named on the utility electric bill for the
2.19premises.
2.20(f) "Designated meter" means a meter that is physically attached to the customer's
2.21facility that the customer-generator designates as the first meter to which net metered
2.22credits are to be applied as the primary meter for billing purposes when the customer is
2.23serviced by more than one meter.
2.24(g) "Distributed generation" means a facility that:
2.25(1) has a nameplate capacity of ten megawatts or less;
2.26(2) is interconnected with a utility's distribution system, over which the commission
2.27has jurisdiction; and
2.28(3) generates electricity from natural gas, renewable fuel, or a similarly clean fuel,
2.29and may include waste heat, cogeneration, or fuel cell technology.
2.30(h) "High-efficiency,, distributed generation" means a distributed energy facility that
2.31has a minimum efficiency of 40 percent, as calculated under section 272.0211.
2.32(i) "Net metered facility" means an electric generation facility with the purpose of
2.33offsetting energy use through the use of renewable energy or high-efficiency distributed
2.34generation sources.
2.35(j) "Renewable energy" has the meaning given in section 216B.2411, subdivision 2.

3.1    Sec. 3. Minnesota Statutes 2012, section 216B.164, subdivision 3, is amended to read:
3.2    Subd. 3. Purchases; small facilities. (a) For a qualifying facility having less
3.3than 40-kilowatt 1,000-kilowatt capacity, the customer shall be billed for the net energy
3.4supplied by the utility according to the applicable rate schedule for sales to that class of
3.5customer. In the case of net input into the utility system by a qualifying facility having: (i)
3.6more than 40-kilowatt but less than 40-kilowatt 1,000-kilowatt capacity, compensation to
3.7the customer shall be at a per kilowatt-hour rate determined under paragraph (b) or (c); or
3.8(ii) less than 40-kilowatt capacity, compensation to the customer shall be at a per-kilowatt
3.9rate determined under paragraph (c). Compensation for net input into the utility system
3.10shall be applied as a credit to the customer's energy bill, carried forward and applied to
3.11subsequent energy bills for a period of up to 12 months. If any credit remains after the
3.1212-month period, the value of the remaining credit must be returned to the customer, by
3.13check, within 15 days of the next billing date. The customer may choose the month in
3.14which the 12-month billing and credit period begins.
3.15(b) In setting rates, the commission shall consider the fixed distribution costs to the
3.16utility not otherwise accounted for in the basic monthly charge and shall ensure that the
3.17costs charged to the qualifying facility are not discriminatory in relation to the costs
3.18charged to other customers of the utility. The commission shall set the rates for net
3.19input into the utility system based on avoided costs as defined in the Code of Federal
3.20Regulations, title 18, section 292.101, paragraph (b)(6), the factors listed in Code of
3.21Federal Regulations, title 18, section 292.304, and all other relevant factors.
3.22(c) For qualifying facilities generating electricity before January 1, 2015, and
3.23notwithstanding any provision in this chapter to the contrary, a qualifying facility having
3.24less than 40-kilowatt capacity may elect that the compensation for net input by the
3.25qualifying facility into the utility system shall be at the average retail utility energy rate.
3.26"Average retail utility energy rate" is defined as the average of the retail energy rates,
3.27exclusive of special rates based on income, age, or energy conservation, according to the
3.28applicable rate schedule of the utility for sales to that class of customer.
3.29(d) If the qualifying facility or net metered facility is interconnected with a
3.30nongenerating utility which has a sole source contract with a municipal power agency
3.31or a generation and transmission utility, the nongenerating utility may elect to treat its
3.32purchase of any net input under this subdivision as being made on behalf of its supplier
3.33and shall be reimbursed by its supplier for any additional costs incurred in making the
3.34purchase. Qualifying facilities or net metered facilities having less than 40-kilowatt
3.35 1,000-kilowatt capacity may, at the customer's option, elect to be governed by the
3.36provisions of subdivision 4.

4.1    Sec. 4. Minnesota Statutes 2012, section 216B.164, subdivision 4, is amended to read:
4.2    Subd. 4. Purchases; wheeling; costs. (a) Except as otherwise provided in
4.3paragraph (c), this subdivision shall apply to all qualifying facilities having 40-kilowatt
4.4 1,000-kilowatt capacity or more as well as qualifying facilities as defined in subdivision 3
4.5and net metered systems under subdivision 4a which elect to be governed by its provisions.
4.6(b) The utility to which the qualifying facility is interconnected shall purchase all
4.7energy and capacity made available by the qualifying facility. The qualifying facility shall
4.8be paid the utility's full avoided capacity and energy costs as negotiated by the parties, as
4.9set by the commission, or as determined through competitive bidding approved by the
4.10commission. The full avoided capacity and energy costs to be paid a qualifying facility
4.11that generates electric power by means of a renewable energy source are the utility's least
4.12cost renewable energy facility or the bid of a competing supplier of a least cost renewable
4.13energy facility, whichever is lower, unless the commission's resource plan order, under
4.14section 216B.2422, subdivision 2, provides that the use of a renewable resource to meet
4.15the identified capacity need is not in the public interest.
4.16(c) For all qualifying facilities having 30-kilowatt capacity or more, the utility
4.17shall, at the qualifying facility's or the utility's request, provide wheeling or exchange
4.18agreements wherever practicable to sell the qualifying facility's output to any other
4.19Minnesota utility having generation expansion anticipated or planned for the ensuing ten
4.20years. The commission shall establish the methods and procedures to insure that except
4.21for reasonable wheeling charges and line losses, the qualifying facility receives the full
4.22avoided energy and capacity costs of the utility ultimately receiving the output.
4.23(d) The commission shall set rates for electricity generated by renewable energy.

4.24    Sec. 5. Minnesota Statutes 2012, section 216B.164, is amended by adding a
4.25subdivision to read:
4.26    Subd. 4a. Net metered facility. Notwithstanding any provision of this chapter to the
4.27contrary, a customer with a net metered facility having less than 1,000-kilowatt capacity
4.28may elect to be compensated for the customer's net input into the utility system in the form
4.29of a kilowatt-hour credit on the customer's energy bill carried forward and applied to
4.30subsequent energy bills. Any net input supplied by the customer into the utility system
4.31that exceeds energy supplied to the customer by the utility during a 12-month period must
4.32be compensated at the utility's avoided cost rate under subdivision 3, paragraph (b), or
4.33subdivision 4, paragraph (b), as applicable. The customer may choose the month in which
4.34the annual billing period begins.

5.1    Sec. 6. Minnesota Statutes 2012, section 216B.164, is amended by adding a
5.2subdivision to read:
5.3    Subd. 4b. Aggregation of meters. (a) For the purpose of measuring electricity
5.4under subdivisions 3 and 4a, a utility must aggregate for billing purposes a customer's
5.5designated meter with one or more aggregated meters if a customer requests that it do so.
5.6Any aggregation of meters must conform with the requirements of this section.
5.7(b) A customer-generator must give at least 60 days' notice to the utility prior to a
5.8request that additional meters be included in meter aggregation. The specific meters must
5.9be identified at the time of the request. In the event that more than one meter is identified,
5.10the customer must designate the rank order for the aggregated meters to which the net
5.11metered credits are to be applied. At least 60 days prior to the beginning of the next annual
5.12billing period, a customer may amend the rank order of the aggregated meters, subject to
5.13the same requirements of this subdivision.
5.14(c) The aggregation of meters applies only to charges that use kilowatt-hours as the
5.15billing determinant. All other charges applicable to each meter account shall be billed to
5.16the customer.
5.17(d) The utility will first apply the kilowatt-hour credit to the charges for the
5.18designated meter and then to the charges for the aggregated meters in the rank order
5.19specified by the customer. If the net metered facility supplies more electricity to the utility
5.20than the energy usage recorded by the customer-generator's designated and aggregated
5.21meters during a monthly billing period, the utility shall apply credits to the customer's next
5.22monthly bill for the excess kilowatt-hours.
5.23(e) With the commission's prior approval, a utility may charge the customer-generator
5.24requesting to aggregate meters a reasonable fee to cover the administrative costs incurred in
5.25implementing the costs of this subdivision, pursuant to a tariff approved by the commission
5.26for a public utility or governing body for a municipal electric utility or electric cooperative.

5.27    Sec. 7. Minnesota Statutes 2012, section 216B.164, is amended by adding a
5.28subdivision to read:
5.29    Subd. 4c. Limiting cumulative generation prohibited. The commission and any
5.30other governing body regulating public utilities, municipal electric utilities, or electric
5.31cooperatives are prohibited from limiting the cumulative generation of net metered
5.32systems under subdivision 4a and qualifying facilities under subdivision 3 to less than five
5.33percent of a utility or cooperative's average annual retail electricity sales over the previous
5.34three calendar years. After the cumulative limit of five percent has been reached, a public
5.35utility, municipal electric utility, or electric cooperative's obligation to offer net metering
6.1to a new customer-generator may be limited by the commission or governing body if it
6.2determines doing so is in the public interest. The commission may limit net metering
6.3obligations under this subdivision only after providing notice and opportunity for public
6.4comment. The governing body of a municipal electric utility or electric cooperative may
6.5limit net metering obligations under this subdivision only after providing the affected
6.6municipal electric utility or electric cooperative's customers with notice and opportunity to
6.7comment. When limiting net metering obligations under this subdivision, the commission
6.8or governing body shall consider:
6.9(1) the environmental and other public policy benefits of net metered systems;
6.10(2) the impact of net metered systems on the electricity costs for customers without
6.11net metered systems;
6.12(3) the effects of net metering on the reliability of the electric system;
6.13(4) technical advances or technical concerns; and
6.14(5) other statutory obligations imposed on the commission or a utility.
6.15The commission or governing body may limit net metering obligations under clauses
6.16(2) to (4) only if it finds implementation would cause significant rate impact, require
6.17significant measures to address reliability, or raise significant technical issues.

6.18    Sec. 8. Minnesota Statutes 2012, section 216B.164, subdivision 6, is amended to read:
6.19    Subd. 6. Rules and uniform contract. (a) The commission shall promulgate rules
6.20to implement the provisions of this section. The commission shall also establish a uniform
6.21statewide form of contract for use between utilities and a net metered or qualifying facility
6.22having less than 40-kilowatt 1,000-kilowatt capacity.
6.23(b) The commission shall require the qualifying facility to provide the utility with
6.24reasonable access to the premises and equipment of the qualifying facility if the particular
6.25configuration of the qualifying facility precludes disconnection or testing of the qualifying
6.26facility from the utility side of the interconnection with the utility remaining responsible
6.27for its personnel.
6.28(c) The uniform statewide form of contract shall be applied to all new and existing
6.29interconnections established between a utility and a net metered or qualifying facility
6.30having less than 40-kilowatt 1,000-kilowatt capacity, except that existing contracts may
6.31remain in force until written notice of election that the uniform statewide contract form
6.32applies is given by either party to the other, with the notice being of the shortest time
6.33period permitted under the existing contract for termination of the existing contract by
6.34either party, but not less than ten nor longer than 30 days terminated by mutual agreement
6.35between both parties.
7.1(d) An electric utility may not apply a standby charge to a net metered facility.

7.2    Sec. 9. Minnesota Statutes 2012, section 216B.164, is amended by adding a
7.3subdivision to read:
7.4    Subd. 10. Alternative tariff; compensation for resource value. (a) An electric
7.5utility may apply for commission approval, or a cooperative electric association or
7.6municipal electric utility may apply for approval from its governing body, for an
7.7alternative tariff that compensates customers through a bill credit mechanism for the
7.8value to the utility, its customers, and society for operating distributed solar photovoltaic
7.9resources interconnected to the utility system and operated by customers primarily for
7.10meeting their own energy needs.
7.11(b) If approved, the alternative tariff shall be applied to current and future customers
7.12in lieu of the small facility rate or net metering for distributed solar resources under
7.13subdivisions 3 and 4a.
7.14(c) The commission or governing body shall consider any application filed on or
7.15before March 31, 2014, and may, after notice and opportunity for public comment,
7.16approve the alternative tariff provided the utility has demonstrated the alternative tariff:
7.17(1) appropriately applies a methodology established by the department under this
7.18subdivision;
7.19(2) includes a mechanism to allow recovery of the cost to serve customers operating
7.20distributed solar systems;
7.21(3) charges the customer for all electricity consumed by the customer at the
7.22applicable rate schedule for sales to that class of customer;
7.23(4) credits the customer for all electricity generated by the solar photovoltaic device
7.24at the value-based credit rate established under this subdivision;
7.25(5) applies the charges and credits in clauses (3) and (4) to a monthly bill that
7.26includes a provision so that the unused portion of the credit in any month or billing period
7.27shall be carried forward and credited against all charges. In the event that the customer
7.28has a positive balance after the 12-month cycle ending on the last day in February, that
7.29balance will be eliminated and the credit cycle will restart the following billing period
7.30beginning on March 1;
7.31(6) complies with the size limits specified in subdivision 4a;
7.32(7) complies with the interconnection requirements under section 216B.1611; and
7.33(8) is not subject to standby or network charges.
7.34(d) A utility must provide to the customer the meter and any other equipment needed
7.35to provide service under the alternative tariff.
8.1(e) In no case shall the commission or governing body approve an alternative tariff
8.2rate where the value-based credit rate under paragraph (c), clause (4), is lower than the
8.3applicable retail rate schedule of the subject utility.
8.4(f) The department must establish the distributed solar value methodology in
8.5paragraph (c), clause (1), no later than January 31, 2014. When developing the distributed
8.6solar value methodology, the department shall consult stakeholders with experience and
8.7expertise in power systems, solar energy, and electric utility ratemaking regarding the
8.8proposed methodology, underlying assumptions, and preliminary data.
8.9(g) The distributed solar value methodology established by the department must,
8.10at a minimum, account for the value of energy and its delivery, generation capacity,
8.11transmission capacity, transmission and distribution line losses, and environmental value.
8.12The department may, based on known and measurable evidence of the cost or benefit of
8.13solar operation, incorporate other values into the methodology, including credit for locally
8.14manufactured or assembled energy systems, systems installed at high-value locations
8.15on the distribution grid, or other factors.
8.16(h) The distributed solar value credit applied to alternative tariffs approved under
8.17this section shall represent the present value of the future revenue streams of the value
8.18components identified in paragraph (g).
8.19(i) The utility shall recalculate the alternative tariff on an annual cycle, and shall file
8.20the recalculated alternative tariff with the commission or governing body for approval.

8.21    Sec. 10. [216B.2427] SOLAR ELECTRICITY STANDARD.
8.22    Subdivision 1. Definitions. (a) For the purposes of this section, the terms defined in
8.23this subdivision have the meanings given them.
8.24(b) "Electric utility" has the meaning given in section 216B.1691, subdivision 1,
8.25paragraph (b).
8.26(c) "Total retail electric sales" has the meaning given in section 216B.1691,
8.27subdivision 1, paragraph (c).
8.28    Subd. 2. Solar electricity standard. (a) Except as otherwise provided in paragraph
8.29(b), each electric utility shall generate or procure solar electric generation capacity for
8.30its retail customers in Minnesota or the retail customers of a distribution utility to which
8.31the electric utility provides wholesale electric services. At a minimum, the following
8.32percentages of the electric utility's total retail sales to retail customers in Minnesota must
8.33be generated by solar energy by the end of the year indicated:
8.34(1) 2016: ....... percent;
8.35(2) 2020: ....... percent; and
9.1(3) 2025: ....... percent.
9.2(b) An electric utility that owned a nuclear generating facility as of January 1, 2013,
9.3must meet the requirements of this paragraph. An electric utility subject to this paragraph
9.4must generate or procure solar electric generation capacity for its retail customers in
9.5Minnesota or the retail customers of a distribution utility to which the electric utility
9.6provides wholesale electric service. At a minimum, the following percentages of the
9.7electric utility's total retail electric sales to retail customers in Minnesota must be
9.8generated by solar energy by the end of the year indicated:
9.9(1) 2016: ....... percent; and
9.10(2) 2020: ....... percent.
9.11(c) An electric utility may not use energy required by the solar energy standard under
9.12this section to satisfy its standard obligation under section 216B.1691.
9.13    Subd. 3. Use of integrated resource planning process. The commission may
9.14exercise its authority to modify or delay implementation of a standard obligation as a part
9.15of an integrated resource planning proceeding under section 216B.2422.The order to
9.16delay or modify shall not be considered advisory with respect to any electric utility. This
9.17subdivision shall not be construed to limit the commission's authority to modify or delay
9.18implementation of a standard obligation in other proceedings before it.
9.19    Subd. 4. Utility plans filed with commission. Each electric utility shall report
9.20to the commission on its plans, activities, and progress demonstrating the efforts made
9.21towards complying with this section. The report shall be included in its filings under
9.22section 216B.2422 or in a separate report submitted to the commission every two years,
9.23whichever is more frequent. In its resource plan or separate report, each electric utility
9.24shall provide a description of:
9.25(1) the status of the utility's solar energy mix relative to the standards;
9.26(2) efforts taken to meet the standards;
9.27(3) any obstacles encountered or anticipated in meeting the standards;
9.28(4) potential solutions to the identified obstacles; and
9.29(5) an estimation of the rate impact related to measures taken by the electric utility
9.30necessary to comply with this section. The rate impact estimate must be for wholesale
9.31rates and, if the electric utility makes retail sales, an estimate shall also be completed
9.32for the impact on the electric utility's retail rates.. An estimation of rate impacts must
9.33also account for acquisition of energy capacity, distribution, and transmission upgrades
9.34avoided as a result of the standards.
9.35    Subd. 5. Renewable energy credits. In lieu of generating or procuring energy
9.36directly to satisfy the solar electricity standard of this section, an electric utility may
10.1use renewable energy credits that originate from a solar electricity generator to satisfy
10.2the standard. In doing so, an electric utility must follow protocols established by the
10.3commission under section 216B.1691, subdivision 4 for registering, tracking, and retiring
10.4credits.
10.5    Subd. 6. Compliance; penalties. (a) The commission must regularly investigate
10.6whether an electric utility is in compliance with its standard obligation under subdivision 2.
10.7(b) If the commission finds noncompliance, it may order the electric utility to
10.8construct solar energy facilities, purchase solar energy, purchase renewable energy credits
10.9generated by solar energy, or engage in other activities to achieve compliance. If an
10.10electric utility fails to comply with an order under this subdivision, the commission may
10.11impose a financial penalty on the electric utility in an amount not to exceed the estimated
10.12cost of the electric utility to achieve compliance. The penalty may not exceed the lesser of
10.13the cost of constructing facilities or purchasing renewable energy credits necessary for the
10.14electric utility to achieve compliance. The commission must deposit financial penalties
10.15imposed under this subdivision in the energy and conservation account established in the
10.16special revenue fund under section 216B.241, subdivision 2a.
10.17(c) Nothing in this subdivision shall be construed to limit any other authority the
10.18commission possesses to enforce this section.

10.19    Sec. 11. Minnesota Statutes 2012, section 216C.436, subdivision 7, is amended to read:
10.20    Subd. 7. Repayment. An implementing entity that finances an energy improvement
10.21under this section must:
10.22(1) secure payment with a lien against the benefited qualifying real property; and
10.23(2) collect repayments as a special assessment as provided for in section 429.101
10.24or by charter, provided that special assessments may be made payable in up to 20 equal
10.25annual installments.
10.26If the implementing entity is an authority, the local government that authorized
10.27the authority to act as implementing entity shall impose and collect special assessments
10.28necessary to pay debt service on bonds issued by the implementing entity under subdivision
10.298, and shall transfer all collections of the assessments upon receipt to the authority.

10.30    Sec. 12. Minnesota Statutes 2012, section 216C.436, subdivision 8, is amended to read:
10.31    Subd. 8. Bond issuance; repayment. (a) An implementing entity may issue
10.32revenue bonds as provided in chapter 475 for the purposes of this section, provided the
10.33revenue bond must not be payable more than 20 years from the date of issuance.
11.1(b) The bonds must be payable as to both principal and interest solely from the
11.2revenues from the assessments established in subdivision 7.
11.3(c) No holder of bonds issued under this subdivision may compel any exercise of the
11.4taxing power of the implementing entity that issued the bonds to pay principal or interest
11.5on the bonds, and if the implementing entity is an authority, no holder of the bonds may
11.6compel any exercise of the taxing power of the local government. Bonds issued under
11.7this subdivision are not a debt or obligation of the issuer or any local government that
11.8issued them, nor is the payment of the bonds enforceable out of any money other than the
11.9revenue pledged to the payment of the bonds."
11.10Amend the title accordingly