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 shall
1.16not be applicable to any sale of natural, manufactured, or mixed gas or electricity by a
1.17public utility to another public utility for resale. In addition, the provisions of this chapter
1.18shall not apply to a public utility whose total natural gas business consists of supplying
1.19natural, manufactured, or mixed gas to not more than 650 customers within a city pursuant
1.20to a franchise granted by the city, provided a resolution of the city council requesting
1.21exemption from regulation is filed with the commission. The city council may rescind
1.22the resolution requesting exemption at any time, and, upon the filing of the rescinding
1.23resolution with the commission, the provisions of this chapter shall apply to the public
1.24utility. No person shall be deemed to be a public utility if it furnishes its services only to
1.25tenants or cooperative or condominium owners in buildings owned, leased, or operated
1.26by such person. No person shall be deemed to be a public utility if it furnishes service
1.27to occupants of a manufactured home or trailer park owned, leased, or operated by such
2.1person. No person shall be deemed to be a public utility if it produces or furnishes service
2.2to less than 25 persons. No person shall be deemed to be a public utility solely as a result
2.3of the person furnishing consumers with electricity or heat generated from wind or 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.03, is amended to read:
2.7216B.03 REASONABLE RATE.
2.8Every rate made, demanded, or received by any public utility, or by any two or
2.9more public utilities jointly, shall be just and reasonable. Rates shall not be unreasonably
2.10preferential, unreasonably prejudicial, or discriminatory, but shall be sufficient, equitable,
2.11and consistent in application to a class of consumers. To the maximum reasonable extent,
2.12the commission shall set rates to encourage energy conservation and renewable energy use
2.13and to further the goals of sections 216B.164, 216B.241, 216B.412, and 216C.05. Any
2.14doubt as to reasonableness should be resolved in favor of the consumer. For rate-making
2.15purposes a public utility may treat two or more municipalities served by it as a single class
2.16wherever the populations are comparable in size or the conditions of service are similar.

2.17    Sec. 3. Minnesota Statutes 2012, section 216B.16, is amended by adding a subdivision
2.18to read:
2.19    Subd. 6e. Solar energy production incentive. (a) Except as otherwise provided in
2.20this subdivision, all assessments authorized by section 216C.412 incurred in connection
2.21with the solar energy production incentive shall be recognized and included by the
2.22commission in the determination of just and reasonable rates as if the expenses were
2.23directly made or incurred by the utility in furnishing utility service.
2.24(b) The commission shall not include expenses for the solar energy production
2.25incentive in determining just and reasonable electric rates for retail electric service provided
2.26to customers receiving the low-income electric rate discount authorized by subdivision 14.

2.27    Sec. 4. Minnesota Statutes 2012, section 216B.164, is amended by adding a
2.28subdivision to read:
2.29    Subd. 2a. Definitions. (a) For the purposes of this section, the following terms
2.30have the meanings given them:
2.31(b)"Aggregated meter" means a meter located on the premises of a customer's owned
2.32or leased property that is contiguous with property containing the customer's designated
2.33meter.
3.1(c) "Cogeneration" means a combined process whereby electrical and useful thermal
3.2energy are produced simultaneously.
3.3(d) "Contiguous property" means property owned or leased by the customer sharing
3.4a common border, without regard to interruptions in contiguity caused by easements,
3.5public thoroughfares, transportation rights-of-way, or utility rights-of-way.
3.6(e)"Customer" means the person who is named on the utility electric bill for the
3.7premises.
3.8(f) "Designated meter" means a meter that is physically attached to the customer's
3.9facility that the customer-generator designates as the first meter to which net metered
3.10credits are to be applied as the primary meter for billing purposes when the customer is
3.11serviced by more than one meter.
3.12(g) "Distributed generation" means a facility that:
3.13(1) has a nameplate capacity of ten megawatts or less;
3.14(2) is interconnected with a utility's distribution system, over which the commission
3.15has jurisdiction; and
3.16(3) generates electricity from natural gas, renewable fuel, or a similarly clean fuel,
3.17and may include waste heat, cogeneration, or fuel cell technology.
3.18(h) "High-efficiency distributed generation" means a distributed energy facility that
3.19has a minimum efficiency of 40 percent, as calculated under section 272.0211.
3.20(i) "Net metered facility" means an electric generation facility with the purpose of
3.21offsetting energy use through the use of renewable energy or high-efficiency distributed
3.22generation sources.
3.23(j) "Renewable energy" has the meaning given in section 216B.2411, subdivision 2.
3.24(k) "Standby charge" means a charge imposed by an electric utility upon a distributed
3.25generation facility for the recovery of fixed costs necessary to make electricity service
3.26available to the distributed generation facility.

3.27    Sec. 5. Minnesota Statutes 2012, section 216B.164, subdivision 3, is amended to read:
3.28    Subd. 3. Purchases; small facilities. (a) For a qualifying facility having less
3.29than 40-kilowatt 1,000-kilowatt capacity, the customer shall be billed for the net energy
3.30supplied by the utility according to the applicable rate schedule for sales to that class of
3.31customer. In the case of net input into the utility system by a qualifying facility having: (i)
3.32more than 40-kilowatt but less than 40-kilowatt 1,000-kilowatt capacity, compensation to
3.33the customer shall be at a per kilowatt-hour rate determined under paragraph (b) or (c); or
3.34(ii) less than 40-kilowatt capacity, compensation to the customer shall be at a per-kilowatt
3.35rate determined under paragraph (c). Compensation for net input into the utility system
4.1shall be applied as a credit to the customer's energy bill, carried forward and applied to
4.2subsequent energy bills for a period of up to 12 months. If any credit remains after the
4.312-month period, the value of the remaining credit must be returned to the customer, by
4.4check, within 15 days of the next billing date. The customer may choose the month in
4.5which the 12-month billing and credit period begins.
4.6(b) In setting rates, the commission shall consider the fixed distribution costs to the
4.7utility not otherwise accounted for in the basic monthly charge and shall ensure that the
4.8costs charged to the qualifying facility are not discriminatory in relation to the costs
4.9charged to other customers of the utility. The commission shall set the rates for net
4.10input into the utility system based on avoided costs as defined in the Code of Federal
4.11Regulations, title 18, section 292.101, paragraph (b)(6), the factors listed in Code of
4.12Federal Regulations, title 18, section 292.304, and all other relevant factors.
4.13(c) For qualifying facilities generating electricity before January 1, 2015, and
4.14notwithstanding any provision in this chapter to the contrary, a qualifying facility having
4.15less than 40-kilowatt capacity may elect that the compensation for net input by the
4.16qualifying facility into the utility system shall be at the average retail utility energy rate.
4.17"Average retail utility energy rate" is defined as the average of the retail energy rates,
4.18exclusive of special rates based on income, age, or energy conservation, according to the
4.19applicable rate schedule of the utility for sales to that class of customer.
4.20(d) If the qualifying facility or net metered facility is interconnected with a
4.21nongenerating utility which has a sole source contract with a municipal power agency
4.22or a generation and transmission utility, the nongenerating utility may elect to treat its
4.23purchase of any net input under this subdivision as being made on behalf of its supplier
4.24and shall be reimbursed by its supplier for any additional costs incurred in making the
4.25purchase. Qualifying facilities or net metered facilities having less than 40-kilowatt
4.26 1,000-kilowatt capacity may, at the customer's option, elect to be governed by the
4.27provisions of subdivision 4.

4.28    Sec. 6. Minnesota Statutes 2012, section 216B.164, subdivision 4, is amended to read:
4.29    Subd. 4. Purchases; wheeling; costs. (a) Except as otherwise provided in
4.30paragraph (c), this subdivision shall apply to all qualifying facilities having 40-kilowatt
4.31 1,000-kilowatt capacity or more as well as qualifying facilities as defined in subdivision 3
4.32and net metered facilities under subdivision 4a which elect to be governed by its provisions.
4.33(b) The utility to which the qualifying facility is interconnected shall purchase all
4.34energy and capacity made available by the qualifying facility. The qualifying facility shall
4.35be paid the utility's full avoided capacity and energy costs as negotiated by the parties, as
5.1set by the commission, or as determined through competitive bidding approved by the
5.2commission. The full avoided capacity and energy costs to be paid a qualifying facility
5.3that generates electric power by means of a renewable energy source are the utility's least
5.4cost renewable energy facility or the bid of a competing supplier of a least cost renewable
5.5energy facility, whichever is lower, unless the commission's resource plan order, under
5.6section 216B.2422, subdivision 2, provides that the use of a renewable resource to meet
5.7the identified capacity need is not in the public interest.
5.8(c) For all qualifying facilities having 30-kilowatt capacity or more, the utility
5.9shall, at the qualifying facility's or the utility's request, provide wheeling or exchange
5.10agreements wherever practicable to sell the qualifying facility's output to any other
5.11Minnesota utility having generation expansion anticipated or planned for the ensuing ten
5.12years. The commission shall establish the methods and procedures to insure that except
5.13for reasonable wheeling charges and line losses, the qualifying facility receives the full
5.14avoided energy and capacity costs of the utility ultimately receiving the output.
5.15(d) The commission shall set rates for electricity generated by renewable energy.

5.16    Sec. 7. Minnesota Statutes 2012, section 216B.164, is amended by adding a
5.17subdivision to read:
5.18    Subd. 4a. Net metered facility. Notwithstanding any provision of this chapter to the
5.19contrary, a customer with a net metered facility having less than 1,000-kilowatt capacity
5.20may elect to be compensated for the customer's net input into the utility system in the form
5.21of a kilowatt-hour credit on the customer's energy bill carried forward and applied to
5.22subsequent energy bills. Any net input supplied by the customer into the utility system
5.23that exceeds energy supplied to the customer by the utility during a 12-month period must
5.24be compensated at the utility's avoided cost rate under subdivision 3, paragraph (b), or
5.25subdivision 4, paragraph (b), as applicable. The customer may choose the month in which
5.26the annual billing period begins.

5.27    Sec. 8. Minnesota Statutes 2012, section 216B.164, is amended by adding a
5.28subdivision to read:
5.29    Subd. 4b. Aggregation of meters. (a) For the purpose of measuring electricity
5.30under subdivisions 3 and 4a, a utility must aggregate for billing purposes a customer's
5.31designated meter with one or more aggregated meters if a customer requests that it do so.
5.32Any aggregation of meters must be governed under this section.
5.33(b) A customer must give at least 60 days' notice to the utility prior to a request that
5.34additional meters be included in meter aggregation. The specific meters must be identified
6.1at the time of the request. In the event that more than one meter is identified, the customer
6.2must designate the rank order for the aggregated meters to which the net metered credits
6.3are to be applied. At least 60 days prior to the beginning of the next annual billing period,
6.4a customer may amend the rank order of the aggregated meters, subject to the provisions
6.5of this subdivision.
6.6(c) The aggregation of meters applies only to charges that use kilowatt-hours as the
6.7billing determinant. All other charges applicable to each meter account must be billed to
6.8the customer.
6.9(d) The utility must first apply the kilowatt-hour credit to the charges for the
6.10designated meter and then to the charges for the aggregated meters in the rank order
6.11specified by the customer. If the net metered facility supplies more electricity to the utility
6.12than the energy usage recorded by the customer's designated and aggregated meters during
6.13a monthly billing period, the utility must apply credits to the customer's next monthly
6.14bill for the excess kilowatt-hours.
6.15(e) With the commission's prior approval, a utility may charge the customer
6.16requesting to aggregate meters a reasonable fee to cover the administrative costs incurred
6.17as a result of implementing the provisions of this subdivision, pursuant to a tariff approved
6.18by the commission for a public utility or by a governing body for a municipal electric
6.19utility or electric cooperative.

6.20    Sec. 9. Minnesota Statutes 2012, section 216B.164, is amended by adding a
6.21subdivision to read:
6.22    Subd. 4c. Limiting cumulative generation prohibited. The commission and any
6.23other governing body regulating public utilities, municipal electric utilities, or electric
6.24cooperatives are prohibited from limiting the cumulative generation of net metered facilities
6.25under subdivision 4a and qualifying facilities under subdivision 3 to less than five percent
6.26of a utility's or cooperative's average annual retail electricity sales as measured over the
6.27previous three calendar years. After the cumulative limit of five percent has been reached,
6.28a public utility, municipal electric utility, or electric cooperative's obligation to offer net
6.29metering to additional customers may be limited by the commission or governing body if
6.30it determines doing so is in the public interest. The commission may limit additional net
6.31metering obligations under this subdivision only after providing notice and opportunity for
6.32public comment. The governing body of a municipal electric utility or electric cooperative
6.33may limit additional net metering obligations under this subdivision only after providing
6.34the affected municipal electric utility or electric cooperative's customers with notice
7.1and opportunity to comment. In determining whether to limit additional net metering
7.2obligations under this subdivision, the commission or governing body shall consider:
7.3(1) the environmental and other public policy benefits of net metered facilities;
7.4(2) the impact of net metered facilities on electricity rates for customers without
7.5net metered systems;
7.6(3) the effects of net metering on the reliability of the electric system;
7.7(4) technical advances or technical concerns; and
7.8(5) other statutory obligations imposed on the commission or on a utility.
7.9The commission or governing body may limit additional net metering obligations under
7.10clauses (2) to (4) only if it determines that additional net metering obligations would
7.11cause significant rate impact, require significant measures to address reliability, or raise
7.12significant technical issues.

7.13    Sec. 10. Minnesota Statutes 2012, section 216B.164, subdivision 6, is amended to read:
7.14    Subd. 6. Rules and uniform contract. (a) The commission shall promulgate rules
7.15to implement the provisions of this section. The commission shall also establish a uniform
7.16statewide form of contract for use between utilities and a net metered or qualifying facility
7.17having less than 40-kilowatt 1,000-kilowatt capacity.
7.18(b) The commission shall require the qualifying facility to provide the utility with
7.19reasonable access to the premises and equipment of the qualifying facility if the particular
7.20configuration of the qualifying facility precludes disconnection or testing of the qualifying
7.21facility from the utility side of the interconnection with the utility remaining responsible
7.22for its personnel.
7.23(c) The uniform statewide form of contract shall be applied to all new and existing
7.24interconnections established between a utility and a net metered or qualifying facility
7.25having less than 40-kilowatt 1,000-kilowatt capacity, except that existing contracts may
7.26remain in force until written notice of election that the uniform statewide contract form
7.27applies is given by either party to the other, with the notice being of the shortest time
7.28period permitted under the existing contract for termination of the existing contract by
7.29either party, but not less than ten nor longer than 30 days terminated by mutual agreement
7.30between both parties.
7.31(d) An electric utility may not apply a standby charge to a net metered facility.

7.32    Sec. 11. Minnesota Statutes 2012, section 216B.164, is amended by adding a
7.33subdivision to read:
8.1    Subd. 10. Energy for public buildings. All the provisions of this section that apply
8.2to a qualifying facility with a capacity of less than one megawatt shall apply to a wind
8.3energy conversion system with a capacity of up to 3.5 megawatts or an energy storage
8.4device storing energy generated by a wind energy conversion system that provides energy
8.5to a public building.
8.6For the purposes of this subdivision:
8.7(1) "energy storage device" means a device capable of storing up to 3.5 megawatts
8.8of previously generated energy and releasing that energy for use at a later time.
8.9(2) "public building" means a building or facility financed wholly or in part with
8.10public funds, including facilities financed by the Public Facilities Authority.

8.11    Sec. 12. [216B.1641] VALUE OF SOLAR RATE.
8.12    Subdivision 1. Definition. For the purposes of this section, "solar photovoltaic
8.13device" has the meaning given in section 216C.06, subdivision 16, and must meet the
8.14requirements of section 216C.25.
8.15    Subd. 2. Applicability. (a) This section shall apply:
8.16(1) beginning January 1, 2014, to the two public utilities with the highest Minnesota
8.17retail electricity sales and the generation and transmission cooperative with the highest
8.18Minnesota wholesale electricity sales; and
8.19(2) beginning July 1, 2015, to all Minnesota electric utilities, including cooperative
8.20electric associations and municipal electric utilities.
8.21(b) Notwithstanding section 216B.164, an owner of a solar photovoltaic device may,
8.22with respect to the purchase price paid by a utility to an owner of a solar photovoltaic device,
8.23elect to be governed under this section or section 216B.164. All other provisions of section
8.24216B.164, except those in subdivision 3 and subdivision 4, paragraphs (a) to (c), shall
8.25apply to an owner of a solar photovoltaic device electing to be governed under this section.
8.26(c) This section does not apply to a utility that owns a solar photovoltaic device.
8.27    Subd. 3. Interconnection. Utilities shall be required to interconnect with a solar
8.28photovoltaic device whose owner offers to provide available energy or capacity and elects
8.29to be governed under this section.
8.30    Subd. 4. Standard contract. The commission shall establish a statewide uniform
8.31form of contract that must be used by a purchasing utility an owner of a solar photovoltaic
8.32device who elects to be governed under this section. The term of a power purchase
8.33agreement entered into under this section must be no less than 20 years and must provide
8.34for payments of the value of solar rate as approved by the commission under this section.
9.1    Subd. 5. Purchases. The utility to which a solar photovoltaic device whose owner
9.2elects to be governed under this section is interconnected shall purchase, throughout the
9.3term of the contract, all energy and capacity made available by the owner of the solar
9.4photovoltaic device. All purchases must be made at the value of solar rate approved by the
9.5commission under this section that is current as of the date the contract is effective.
9.6    Subd. 6. Value of solar rate; calculation. (a) By October 1, 2013, the Department
9.7of Commerce shall calculate the value of solar rate for each utility subject to the provisions
9.8of this section. The value of solar rate is expressed on a per kilowatt-hour basis and is
9.9equal to the sum of the following components:
9.10(1) line loss savings equal to the value of the average amount of electricity lost
9.11through transmission and distribution when electricity is generated by the utility's nonsolar
9.12photovoltaic generators;
9.13(2) transmission and distribution capacity savings equal to the value of delaying
9.14the need for capital investment in a utility's transmission and distribution system by
9.15contracting to purchase energy from solar photovoltaic devices;
9.16(3) energy savings equal to the reduction in a utility's wholesale energy costs realized
9.17as a result of energy purchases from solar photovoltaic devices;
9.18(4) generation capacity savings equal to the value of the benefit of the capacity
9.19added to the utility's system by solar photovoltaic devices;
9.20(5) fuel price hedge value equal to the value of eliminating price uncertainty
9.21associated with the utility's purchases of fuel for electricity generation; and
9.22(6) environmental benefits equal to the premium retail customers are willing to pay
9.23to consume energy produced from renewable resources.
9.24(b) The department may, based on known and measurable evidence of the economic
9.25development benefits of solar electricity generation, including the net increase in local
9.26employment and taxes generated from the manufacture, operations, and maintenance
9.27of solar photovoltaic devices, or other factors, incorporate additional amounts into the
9.28value of solar rate.
9.29    Subd. 7. Value of solar rate; information. The Department of Commerce shall
9.30solicit information from each utility subject to the provisions of this section to assist it in
9.31calculating the value of solar rate. A utility shall provide the information requested by the
9.32department in a timely fashion.
9.33    Subd. 8. Value of solar rate; process. The Department of Commerce shall solicit
9.34comments and recommendations from utilities, ratepayers, and other interested parties
9.35regarding the calculation of the value of solar rate.
10.1    Subd. 9. Value of solar rate; adjustments. By January 1, 2015, and every January
10.21 thereafter through 2049, the commissioner shall make a determination as to whether
10.3the value of solar rate needs to be adjusted in order to reflect current conditions in energy
10.4markets or changes in the value of the components calculated in subdivision 6. In making
10.5that determination, the commissioner shall solicit comments and recommendations from
10.6interested parties in the same manner as required under subdivision 8. After considering
10.7the comments and recommendations, the commissioner may adjust the value of solar rate.
10.8    Subd. 10. Value of solar rate; billing. Notwithstanding section 216B.164, an
10.9owner of a solar photovoltaic device who elects to receive the value of solar rate for
10.10electricity generated by the solar photovoltaic device that is sold to a utility must be:
10.11(1) charged by the utility the applicable rate schedule for sales to that class of
10.12customer for all electricity consumed by the customer;
10.13(2) paid the value of solar rate by the utility for all electricity generated by the
10.14solar photovoltaic device;
10.15(3) provided by the utility with a monthly bill that contains, in addition to the
10.16amounts in clauses (1) and (2), the net amount owed to the utility or net credit realized by
10.17the owner for that month and on a year-to-date basis; and
10.18(4) provided by the utility with a meter that allows for the separate calculation of the
10.19amount of electricity consumed and generated at the property.
10.20    Subd. 11. Commission review; approval. (a) The commissioner shall submit
10.21the value of solar rate calculated under subdivision 6 and the information, comments
10.22and recommendations received under subdivisions 7 and 8 to the commission for its
10.23review and approval. The commission shall review the rate and the information,
10.24comments and recommendations and may, at its discretion, solicit additional comments
10.25and recommendations from utilities, ratepayers, and other interested parties regarding
10.26the calculation of the value of solar rate.
10.27(b) By January 1 of 2014, and each January 1 thereafter through 2049, the
10.28commission shall approve or modify the value of solar rate submitted to it by the
10.29commissioner. The commission shall, by order, direct all electric utilities subject to this
10.30section to begin paying the value of solar rate most recently approved by the commission
10.31to owners of solar photovoltaic devices who sign a new standard contract under this
10.32section on or after the first day of the first month following the effective date of the order.
10.33(c) In no case shall the commission approve a value of solar rate under this section
10.34that is lower than the applicable retail rate of the subject utility.
10.35EFFECTIVE DATE.This section is effective the day following final enactment.

11.1    Sec. 13. Minnesota Statutes 2012, section 216B.1691, subdivision 1, is amended to read:
11.2    Subdivision 1. Definitions. (a) Unless otherwise specified in law, "eligible energy
11.3technology" means an energy technology that generates electricity from the following
11.4renewable energy sources:
11.5(1) solar;
11.6(2) wind;
11.7(3) hydroelectric with a capacity of less than 100 megawatts;
11.8(4) hydrogen, provided that after January 1, 2010, the hydrogen must be generated
11.9from the resources listed in this paragraph; or
11.10(5) biomass, which includes, without limitation, landfill gas; an anaerobic digester
11.11system; the predominantly organic components of wastewater effluent, sludge, or related
11.12by-products from publicly owned treatment works, but not including incineration of
11.13wastewater sludge to produce electricity; and an energy recovery facility used to capture
11.14the heat value of mixed municipal solid waste or refuse-derived fuel from mixed municipal
11.15solid waste as a primary fuel.
11.16    (b) "Electric utility" means a public utility providing electric service, a generation
11.17and transmission cooperative electric association, a municipal power agency, or a power
11.18district.
11.19    (c) "Total retail electric sales" means the kilowatt-hours of electricity sold in a year
11.20by an electric utility to retail customers of the electric utility or to a distribution utility
11.21for distribution to the retail customers of the distribution utility. "Total retail electric
11.22sales" does not include the sale of hydroelectricity supplied by a federal power marketing
11.23administration or other federal agency, regardless of whether the sales are directly to a
11.24distribution utility or are made to a generation and transmission utility and pooled for
11.25further allocation to a distribution utility.
11.26    (d) "Renewable energy credit" means a certificate of proof, issued through the
11.27accounting system approved by the commission under subdivision 4, attesting that one
11.28unit of electricity was generated and delivered by an eligible energy technology, and
11.29including all renewable and environmental attributes associated with the production of
11.30electricity from the eligible energy technology.
11.31EFFECTIVE DATE.This section is effective the day following final enactment.

11.32    Sec. 14. Minnesota Statutes 2012, section 216B.1691, subdivision 2a, is amended to
11.33read:
11.34    Subd. 2a. Eligible energy technology standard. (a) Except as provided in
11.35paragraph (b), each electric utility shall generate or procure sufficient electricity generated
12.1by an eligible energy technology to provide its retail customers in Minnesota, or the
12.2retail customers of a distribution utility to which the electric utility provides wholesale
12.3electric service, so that at least the following standard percentages of the electric utility's
12.4total retail electric sales to retail customers in Minnesota are generated by eligible energy
12.5technologies by the end of the year indicated:

12.6	(1)	2012	12 percent
12.7	(2)	2016	17 percent
12.8	(3)	2020	20 percent
12.9	(4)	2025	25 percent.

12.10    (b) An electric utility that owned a nuclear generating facility as of January 1, 2007,
12.11must meet the requirements of this paragraph rather than paragraph (a). An electric utility
12.12subject to this paragraph must generate or procure sufficient electricity generated by
12.13an eligible energy technology to provide its retail customers in Minnesota or the retail
12.14customer of a distribution utility to which the electric utility provides wholesale electric
12.15service so that at least the following percentages of the electric utility's total retail electric
12.16sales to retail customers in Minnesota are generated by eligible energy technologies by the
12.17end of the year indicated:

12.18	(1)	2010	15 percent
12.19	(2)	2012	18 percent
12.20	(3)	2016	25 percent
12.21	(4)	2020	30 percent.

12.22Of the 30 percent in 2020, at least 25 percent must be generated by solar energy
12.23or wind energy conversion systems and the remaining five percent by other eligible
12.24energy technology. Of the 25 percent that must be generated by wind or solar, no more
12.25than one percent may be solar generated and the remaining 24 percent or greater must
12.26be wind generated.
12.27(c) By 2030, each public utility shall generate or procure sufficient electricity
12.28generated by an eligible energy technology to provide at least 40 percent of its total retail
12.29electric sales to retail customers in Minnesota.
12.30EFFECTIVE DATE.This section is effective the day following final enactment.

12.31    Sec. 15. Minnesota Statutes 2012, section 216B.1691, subdivision 2e, is amended to
12.32read:
12.33    Subd. 2e. Rate impact of standard compliance; report. Each electric utility must
12.34submit to the commission and the legislative committees with primary jurisdiction over
12.35energy policy a report containing an estimation of the rate impact of activities of the
13.1electric utility necessary to comply with this section. In consultation with the Department
13.2of Commerce, the commission shall determine a uniform reporting system to ensure that
13.3individual utility reports are consistent and comparable, and shall, by order, require each
13.4electric utility subject to this section to use that reporting system. The rate impact estimate
13.5must be for wholesale rates and, if the electric utility makes retail sales, the estimate
13.6shall also be for the impact on the electric utility's retail rates. Those activities include,
13.7without limitation, energy purchases, generation facility acquisition and construction, and
13.8transmission improvements. An initial report must be submitted within 150 days of May
13.928, 2011. After the initial report, a report must be updated and submitted as part of each
13.10integrated resource plan or plan modification filed by the electric utility under section
13.11216B.2422 . The reporting obligation of an electric utility under this subdivision expires
13.12December 31, 2025, for an electric utility subject to subdivision 2a, paragraph (a), and
13.13December 31, 2020, for an electric utility subject to subdivision 2a, paragraph (b).
13.14EFFECTIVE DATE.This section is effective the day following final enactment.

13.15    Sec. 16. Minnesota Statutes 2012, section 216B.1691, is amended by adding a
13.16subdivision to read:
13.17    Subd. 2f. Solar energy standard. (a) In addition to the requirements of subdivision
13.182a, each electric utility shall generate or procure sufficient electricity generated by solar
13.19energy to serve its retail customers in Minnesota or the retail customers of a distribution
13.20utility to which the electric utility provides wholesale electric service, so that at least the
13.21following standard percentages of the electric utility's total retail electric sales to retail
13.22customers in Minnesota are generated by solar energy by the end of the year indicated:

13.23	(1)	2016	0.5 percent
13.24	(2)	2020	2.0 percent
13.25	(3)	2025	4.0 percent

13.26(b) The solar energy standard established in this subdivision is subject to all the
13.27provisions of this section governing a utility's standard obligation under subdivision 2a.
13.28(c) Electricity generated by a solar energy project may apply towards a utility's
13.29solar energy standard.
13.30(d) It is an energy goal of the state of Minnesota that by 2030, ten percent of the
13.31retail electric sales in Minnesota be generated by solar energy.
13.32EFFECTIVE DATE.This section is effective the day following final enactment.

13.33    Sec. 17. Minnesota Statutes 2012, section 216B.1691, subdivision 4, is amended to read:
14.1    Subd. 4. Renewable energy credits. (a) To facilitate compliance with this section,
14.2the commission, by rule or order, shall establish by January 1, 2008, a program for
14.3tradable renewable energy credits for electricity generated by eligible energy technology.
14.4The credits must represent energy produced by an eligible energy technology, as defined in
14.5subdivision 1. Each kilowatt-hour of renewable energy credits must be treated the same as
14.6a kilowatt-hour of eligible energy technology generated or procured by an electric utility if
14.7it is produced by an eligible energy technology. The program must permit a credit to be
14.8used only once. The program must treat all eligible energy technology equally and shall
14.9not give more or less credit to energy based on the state where the energy was generated or
14.10the technology with which the energy was generated. The commission must determine the
14.11period in which the credits may be used for purposes of the program.
14.12    (b) A renewable energy credit associated with electricity generated in Minnesota by
14.13an eligible energy technology is owned by the owner of the eligible energy technology
14.14facility that generated the electricity unless:
14.15    (1) the renewable energy credit is assigned to another entity by law;
14.16    (2) the renewable energy credit was transferred to another entity by contract
14.17executed prior to July 1, 2013; or
14.18    (3) the renewable energy credit was assigned to another entity by order of the
14.19commission prior to July 1, 2013.
14.20    (c) A renewable energy credit may be transferred only through a contract. A utility
14.21may not require transfer of a renewable energy credit as a condition for executing a
14.22contract required under sections 216B.1611 or 216B.164.
14.23    (d) In lieu of generating or procuring energy directly to satisfy the eligible energy
14.24technology objective or standard of this section, an electric utility may utilize renewable
14.25energy credits allowed under the program to satisfy the objective or standard.
14.26    (c) (e) The commission shall facilitate the trading of renewable energy credits
14.27between states.
14.28    (d) (f) The commission shall require all electric utilities to participate in a
14.29commission-approved credit-tracking system or systems. Once a credit-tracking system is
14.30in operation, the commission shall issue an order establishing protocols for trading credits.
14.31(e) (g) An electric utility subject to subdivision 2a, paragraph (b), may not sell
14.32renewable energy credits to an electric utility subject to subdivision 2a, paragraph (a),
14.33until 2021.
14.34EFFECTIVE DATE.This section is effective the day following final enactment.

14.35    Sec. 18. Minnesota Statutes 2012, section 216B.23, subdivision 1a, is amended to read:
15.1    Subd. 1a. Authority to issue refund. (a) On determining that a public utility has
15.2charged a rate in violation of this chapter, a commission rule, or a commission order, the
15.3commission, after conducting a proceeding, may require the public utility to refund to its
15.4customers, in a manner approved by the commission, any revenues the commission finds
15.5were collected as a result of the unlawful conduct. Any refund authorized by this section
15.6is permitted in addition to any remedies authorized by section 216B.16 or any other law
15.7governing rates. Exercising authority under this section does not preclude the commission
15.8from pursuing penalties under sections 216B.57 to 216B.61 for the same conduct.
15.9(b) This section must not be construed as allowing:
15.10(1) retroactive ratemaking;
15.11(2) refunds based on claims that prior or current approved rates have been unjust,
15.12unreasonable, unreasonably preferential, discriminatory, insufficient, inequitable, or
15.13inconsistent in application to a class of customers; or
15.14(3) refunds based on claims that approved rates have not encouraged energy
15.15conservation or renewable energy use, or have not furthered the goals of section 216B.164,
15.16216B.241 , 216C.412, or 216C.05.
15.17    (c) A refund under this subdivision does not apply to revenues collected more than
15.18six years before the date of the notice of the commission proceeding required under this
15.19subdivision.

15.20    Sec. 19. Minnesota Statutes 2012, section 216B.241, subdivision 5c, is amended to read:
15.21    Subd. 5c. Large solar electric generating plant. (a) For the purpose of this
15.22subdivision:
15.23(1) "project" means a solar electric generation project consisting of arrays of solar
15.24photovoltaic cells with a capacity of up to two megawatts located on the site of a closed
15.25landfill in Olmsted County owned by the Minnesota Pollution Control Agency; and
15.26(2) "cooperative electric association" means a generation and transmission
15.27cooperative electric association that has a member distribution cooperative association to
15.28which it provides wholesale electric service in whose service territory a project is located.
15.29(b) A cooperative electric association may elect to count all of its purchases of
15.30electric energy from a project toward only one of the following:
15.31(1) its energy-savings goal under subdivision 1c; or
15.32(2) its energy objective or solar energy standard under section 216B.1691.
15.33(c) A cooperative electric association may include in its conservation plan purchases
15.34of electric energy from a project. The cost-effectiveness of project purchases may be
15.35determined by a different standard than for other energy conservation improvements
16.1under this section if the commissioner determines that doing so is in the public interest
16.2in order to encourage solar energy. The kilowatt hours of solar energy purchased by a
16.3cooperative electric association from a project may count for up to 33 percent of its one
16.4percent savings goal under subdivision 1c or up to 22 percent of its 1.5 percent savings
16.5goal under that subdivision. Expenditures made by a cooperative association for the
16.6purchase of energy from a project may not be used to meet the revenue expenditure
16.7requirements of subdivisions 1a and 1b.
16.8EFFECTIVE DATE.This section is effective the day following final enactment.

16.9    Sec. 20. Minnesota Statutes 2012, section 216B.2411, subdivision 3, is amended to read:
16.10    Subd. 3. Other provisions. (a) Electricity generated by a facility constructed with
16.11funds provided under this section and using an eligible renewable energy source may be
16.12counted toward the renewable energy objectives in section 216B.1691, subject to the
16.13provisions of that section, except as provided in subdivision (c).
16.14(b) Two or more entities may pool resources under this section to provide assistance
16.15jointly to proposed eligible renewable energy projects. The entities shall negotiate and
16.16agree among themselves for allocation of benefits associated with a project, such as the
16.17ability to count energy generated by a project toward a utility's renewable energy objectives
16.18under section 216B.1691, except as provided in subdivision (c). The entities shall provide a
16.19summary of the allocation of benefits to the commissioner. A utility may spend funds under
16.20this section for projects in Minnesota that are outside the service territory of the utility.
16.21(c) Electricity generated by a solar photovoltaic device constructed with funds
16.22provided under this section may be counted towards a utility's solar energy standard
16.23under section 216B.1691.

16.24    Sec. 21. Minnesota Statutes 2012, section 216B.62, subdivision 7, is amended to read:
16.25    Subd. 7. Assessing all utilities. The department shall assess public utilities,
16.26cooperative electric associations, and municipal utilities for the costs of activities under
16.27chapter 216C. The department shall not assess for costs of grants, loans, or other aids or
16.28for costs that can be recovered through other assessment authority, except as specifically
16.29authorized in statute or law. Each public utility, cooperative, and municipal utility shall be
16.30assessed in the proportion that its gross operating revenue for the sale of gas and electric
16.31service within the state for the last calendar year bears to the total of those revenues for all
16.32public utilities, cooperatives, and municipalities.

16.33    Sec. 22. [216C.411] SOLAR ENERGY PRODUCTION INCENTIVE ACCOUNT.
17.1    Subdivision 1. Definitions. For the purposes of this section, the terms defined in this
17.2subdivision have the meanings given them.
17.3(a) "Commission" means the Public Utilities Commission.
17.4(b) "Gross annual retail electricity sales" means annual electric sales to all retail
17.5customers in a public utility's Minnesota service territory.
17.6(c) "Public utility" has the same meaning as provided in section 216B.02,
17.7subdivision 4.
17.8    Subd. 2. Account established; account management. A solar energy production
17.9incentive account is established as a separate account in the special revenue fund in the
17.10state treasury. The commissioner of management and budget shall credit to the account
17.11the amounts assessed and collected under this section and appropriations and transfers to
17.12the account. Earnings, such as interest, dividends, and any other earnings arising from
17.13account assets, must be credited to the account. Funds remaining in the account at the
17.14end of a fiscal year are not canceled to the general fund but remain in the account. The
17.15commissioner shall manage the account.
17.16    Subd. 3. Purpose. The purpose of the account is to pay the solar energy
17.17production incentive to owners of qualified solar photovoltaic devices, including related
17.18administrative costs, under section 216C.412.
17.19    Subd. 4. Assessment. Beginning January 1, 2014, and each January 1 thereafter
17.20through January 1, 2049, the department shall assess, under section 216B.62, subdivision
17.217, each utility an amount, not to exceed 1.33 percent of the utility's gross annual retail
17.22electricity sales within the state during the preceding calendar year, as required to carry
17.23out the purpose of section 216C.412. Such assessments are not subject to the cap on
17.24assessments provided by section 216B.62, or any other law. The assessment shall be
17.25deposited in the account established in subdivision 2.
17.26EFFECTIVE DATE.This section is effective the day following final enactment.

17.27    Sec. 23. [216C.412] SOLAR ENERGY PRODUCTION INCENTIVE.
17.28    Subdivision 1. Incentive payment; appropriation. (a) Incentive payments may be
17.29made under this section only to an owner of a solar photovoltaic device who has:
17.30(1) submitted to the commissioner, on a form prescribed by the commissioner, an
17.31application to receive the incentive; and
17.32(2) received from the commissioner in writing a determination that the solar
17.33photovoltaic device qualifies for the incentive.
18.1(b) There is annually appropriated from the solar energy production incentive
18.2account established under section 216C.411 to the commissioner of commerce sums
18.3sufficient to make the payments required under this section.
18.4(c) A utility that owns a solar photovoltaic device is not eligible to receive incentive
18.5payments under this section.
18.6    Subd. 2. Eligibility window; payment duration. (a) Payments may be made under
18.7this section only for electricity generated from a solar photovoltaic device that first begins
18.8generating electricity after January 1, 2014, through December 31, 2049.
18.9(b) Payment of the incentive begins and runs consecutively from the date the solar
18.10photovoltaic device begins generating electricity.
18.11(c) The owner of a solar photovoltaic device may receive payments under this
18.12section for a period of 20 years. No payment may be made under this section for electricity
18.13generated after December 31, 2049.
18.14    Subd. 3. Amount of payment. (a) An incentive payment is based on the number of
18.15kilowatt hours of electricity generated. The per-kilowatt-hour amount of the payment for
18.16each category of qualified solar photovoltaic device listed below is equal to the applicable
18.17reference price specified in this subdivision minus:
18.18(1) the value of solar rate approved by the commissioner under section 216B.1641,
18.19for owners of solar photovoltaic devices that have elected to have the utility's purchase
18.20price for electricity governed by that section; or
18.21(2) the rate a utility pays an owner of a solar photovoltaic device for excess electricity
18.22generation under section 216B.164, for owners of solar photovoltaic devices that have
18.23elected to have the utility's purchase price for electricity governed by that section.

18.24	Nameplate Capacity	Reference Price
18.25	Residential	20.4 cents per kilowatt-hour
18.26	Non-residential:
18.27	under 25 kilowatts	18.1 cents per kilowatt-hour
18.28 18.29	rooftop, 25 kilowatts to 2 megawatts	15.9 cents per kilowatt-hour
18.30 18.31	ground-mounted, 25 kilowatts to 2 megawatts	13.6 cents per kilowatt-hour

18.32(b) By January 1, 2015, and every January 1 thereafter through 2049, the
18.33commissioner shall make a determination as to whether the reference price needs to be
18.34adjusted in order to achieve the solar energy standard established in section 216B.1691,
18.35subdivision 2f, at the lowest level of incentive payments. In making the determination, the
18.36commissioner shall solicit comments and recommendations from utilities, ratepayers, and
18.37other interested parties regarding the calculation of the reference price. After considering
18.38the comments and recommendations, the commissioner may adjust the reference price.
19.1(c) For the purposes of this subdivision, "reference price" means the lowest
19.2per-kilowatt price for electricity generated by a qualified solar photovoltaic system the
19.3commissioner determines is sufficient to provide an economic incentive that will result
19.4in the development of aggregate capacity in this state to meet the solar energy standard
19.5established in section 216B.1691, subdivision 2f.
19.6    Subd. 4. Additional payment; Made in Minnesota. (a) The commissioner of
19.7commerce shall determine an additional incentive amount to be paid to owners of solar
19.8photovoltaic devices that are "Made in Minnesota."
19.9(b) For the purposes of this subdivision:
19.10(1) "Made in Minnesota" means the manufacture in this state of solar photovoltaic
19.11modules:
19.12(i) at a manufacturing facility located in Minnesota that is registered and authorized
19.13to manufacture and apply the UL 1703 certification mark to solar photovoltaic modules
19.14by Underwriters Laboratory, CSA International, Intertek, or an equivalent UL-approved
19.15independent certification agency;
19.16(ii) that bear UL 1703 certification marks from Underwriters Laboratory (UL), CSA
19.17International, Intertek, or an equivalent UL-approved independent certification agency,
19.18which marks must be physically applied to the modules at a manufacturing facility
19.19described in clause (1); and that meet either of the following conditions:
19.20(iii) that are manufactured in Minnesota via manufacturing processes that must
19.21include tabbing, stringing, and lamination; or
19.22(iv) that are manufactured in Minnesota by interconnecting low-voltage direct current
19.23photovoltaic elements that produce the final useful photovoltaic output of the modules.
19.24A solar photovoltaic module that is manufactured by attaching microinverters, direct
19.25current optimizers, or other power electronics to a laminate or solar photovoltaic module
19.26that has received UL 1703 certification marks outside Minnesota from Underwriters
19.27Laboratory (UL), CSA International, Intertek, or an equivalent UL-approved independent
19.28certification agency is not "Made in Minnesota" under this subdivision.
19.29    (2) "Solar photovoltaic module" has the meaning given in section 116C.7791,
19.30subdivision 1.
19.31    Subd. 5. Appropriation. An amount sufficient to pay the solar energy production
19.32incentive under this section is annually appropriated from the account established under
19.33section 216C.411, to the commissioner of commerce for the purposes of this section.
19.34EFFECTIVE DATE.This section is effective the day following final enactment.

19.35    Sec. 24. Minnesota Statutes 2012, section 216C.436, subdivision 7, is amended to read:
20.1    Subd. 7. Repayment. An implementing entity that finances an energy improvement
20.2under this section must:
20.3(1) secure payment with a lien against the benefited qualifying real property; and
20.4(2) collect repayments as a special assessment as provided for in section 429.101
20.5or by charter, provided that special assessments may be made payable in up to 20 equal
20.6annual installments.
20.7If the implementing entity is an authority, the local government that authorized
20.8the authority to act as implementing entity shall impose and collect special assessments
20.9necessary to pay debt service on bonds issued by the implementing entity under subdivision
20.108, and shall transfer all collections of the assessments upon receipt to the authority.

20.11    Sec. 25. Minnesota Statutes 2012, section 216C.436, subdivision 8, is amended to read:
20.12    Subd. 8. Bond issuance; repayment. (a) An implementing entity may issue
20.13revenue bonds as provided in chapter 475 for the purposes of this section, provided the
20.14revenue bond must not be payable more than 20 years from the date of issuance.
20.15(b) The bonds must be payable as to both principal and interest solely from the
20.16revenues from the assessments established in subdivision 7.
20.17(c) No holder of bonds issued under this subdivision may compel any exercise of the
20.18taxing power of the implementing entity that issued the bonds to pay principal or interest
20.19on the bonds, and if the implementing entity is an authority, no holder of the bonds may
20.20compel any exercise of the taxing power of the local government. Bonds issued under
20.21this subdivision are not a debt or obligation of the issuer or any local government that
20.22issued them, nor is the payment of the bonds enforceable out of any money other than the
20.23revenue pledged to the payment of the bonds.

20.24    Sec. 26. STUDY OF POTENTIAL FOR SOLAR ENERGY INSTALLATIONS
20.25ON PUBLIC BUILDINGS.
20.26(a) The commissioner of commerce shall contract with an independent consultant
20.27selected through a request for proposal process to produce a report analyzing the potential
20.28for electricity generation resulting from the installation of solar photovoltaic devices on
20.29and adjacent to public buildings in this state. The study must:
20.30(1) determine, for buildings identified under the process initiated in Laws 2001,
20.31chapter 212, article 1, section 3, commonly referred to as the B3 program, the amount
20.32of space available for the installation of solar photovoltaic devices and the maximum
20.33solar electricity generation potential; and
21.1(2) utilize existing data on energy efficiency potential developed under the B3
21.2program and determine how investments in energy efficiency for these buildings could
21.3be combined with solar photovoltaic systems to enhance a building's overall energy
21.4efficiency. The analysis must include a schedule for installing solar photovoltaic systems
21.5on public buildings at a rate of four percent of available space per year and must prioritize
21.6installations that result in the largest benefits with the shortest payback periods.
21.7(b) By January 1, 2014, the commissioner of commerce shall submit a copy of the
21.8report to the chairs and ranking minority members of the legislative committees with
21.9primary jurisdiction over energy policy and state government finance.
21.10EFFECTIVE DATE.This section is effective the day following final enactment.

21.11    Sec. 27. SOLAR INTERCONNECTION STUDY.
21.12Each public utility, cooperative association, and municipal utility selling electricity
21.13shall, by November 1, 2013, provide to the commissioner of commerce an assessment
21.14of the capacity available on its electric distribution system for interconnecting solar
21.15photovoltaic devices installed on or adjacent to nonresidential buildings in the utility's
21.16service area. For each such potential interconnection point, the utility must calculate the
21.17maximum capacity of solar photovoltaic devices that could be installed on or adjacent to
21.18nearby nonresidential buildings, the amount of available capacity that could be installed
21.19without upgrading the utility's distribution system, and the cost of the upgrade necessary
21.20to accommodate the installation of the maximum capacity and lesser amounts.
21.21EFFECTIVE DATE.This section is effective the day following final enactment.

21.22    Sec. 28. VALUE OF ON-SITE ENERGY STORAGE STUDY.
21.23(a)The commissioner of commerce shall contract with an independent consultant
21.24selected through a request for proposal process to produce a report analyzing the potential
21.25costs and benefits of installing utility-managed energy storage devices in residential and
21.26commercial buildings in this state. The study must:
21.27(1) estimate the potential value of on-site energy storage devices as a
21.28load-management tool to reduce costs for individual customers and for the utility,
21.29including, but not limited to, reductions in energy, particularly peaking, costs, and
21.30capacity costs;
21.31(2) examine the interaction of energy storage devices with on-site solar photovoltaic
21.32devices; and
22.1(3) analyze existing barriers to the installation of on-site energy storage devices by
22.2utilities, and examine strategies and design potential economic incentives to overcome
22.3those barriers.
22.4(b) The commissioner of commerce shall assess an amount necessary under
22.5Minnesota Statutes, section 216B.241, subdivision 1e, for the purpose of completing the
22.6study described in this section.
22.7By January 1, 2014, the commissioner of commerce shall submit the study to the chairs
22.8and ranking minority members of the legislative committees with jurisdiction over energy
22.9policy and finance.

22.10    Sec. 29. VALUE OF SOLAR THERMAL STUDY.
22.11(a) The commissioner of commerce shall contract with an independent consultant
22.12selected through a request for proposal process to produce a report analyzing the potential
22.13costs and benefits of expanding the installation of solar thermal projects, as defined in
22.14Minnesota Statutes, section 216B.2411, subdivision 2, in residential and commercial
22.15buildings in this state. The study must examine the potential for solar thermal projects
22.16to reduce heating and cooling costs for individual customers and to reduce costs at the
22.17utility level as well. The study must also analyze existing barriers to the installation of
22.18on-site energy storage devices by utilities, and examine strategies and design potential
22.19economic incentives to overcome those barriers. By January 1, 2014, the commissioner
22.20of commerce shall submit the study to the chairs and ranking minority members of the
22.21legislative committees with jurisdiction over energy policy and finance.
22.22(b) The commissioner of commerce shall assess an amount necessary under
22.23Minnesota Statutes, section 216B.241, subdivision 1e, for the purpose of completing the
22.24study described in this section.
22.25EFFECTIVE DATE.This section is effective the day following final enactment.

22.26    Sec. 30. SEVERABILITY.
22.27If any provision of this act is found to be unconstitutional and void, the remaining
22.28provisions of this act are valid.
22.29EFFECTIVE DATE.This section is effective the day following final enactment."
22.30Amend the title accordingly