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

1.3    "Section 1. Minnesota Statutes 2012, section 16C.144, subdivision 2, is amended to
1.4read:
1.5    Subd. 2. Guaranteed energy-savings agreement. The commissioner may enter
1.6into a guaranteed energy-savings agreement with a qualified provider if:
1.7(1) the qualified provider is selected through a competitive process in accordance
1.8with the guaranteed energy-savings program guidelines within the Department of
1.9Administration;
1.10(2) the qualified provider agrees to submit an engineering report prior to the
1.11execution of the guaranteed energy-savings agreement. The cost of the engineering report
1.12may be considered as part of the implementation costs if the commissioner enters into a
1.13guaranteed energy-savings agreement with the provider;
1.14(3) the term of the guaranteed energy-savings agreement shall not exceed 15 25
1.15 years from the date of final installation;
1.16(4) the commissioner finds that the amount it would spend on the utility cost-savings
1.17measures recommended in the engineering report will not exceed the amount to be
1.18saved in utility operation and maintenance costs over 15 25 years from the date of
1.19implementation of utility cost-savings measures;
1.20(5) the qualified provider provides a written guarantee that the annual utility,
1.21operation, and maintenance cost savings during the term of the guaranteed energy-savings
1.22agreement will meet or exceed the annual payments due under a lease purchase agreement.
1.23The qualified provider shall reimburse the state for any shortfall of guaranteed utility,
1.24operation, and maintenance cost savings; and
1.25(6) the qualified provider gives a sufficient bond in accordance with section
1.26574.26 to the commissioner for the faithful implementation and installation of the utility
1.27cost-savings measures.

2.1    Sec. 2. Minnesota Statutes 2012, section 116C.779, subdivision 3, is amended to read:
2.2    Subd. 3. Initiative for Renewable Energy and the Environment. (a)
2.3Notwithstanding subdivision 1, paragraph (g), beginning July 1, 2009, and each July
2.41 through 2011 2014, $5,000,000 must be allocated from the renewable development
2.5account to fund a grant to the Board of Regents of the University of Minnesota for the
2.6Initiative for Renewable Energy and the Environment for the purposes described in
2.7paragraph (b). The Initiative for Renewable Energy and the Environment must set aside
2.8at least 15 percent of the funds received annually under the grant for qualified projects
2.9conducted at a rural campus or experiment station. Any set-aside funds not awarded to a
2.10rural campus or experiment station at the end of the fiscal year revert back to the Initiative
2.11for Renewable Energy and the Environment for its exclusive use. This subdivision does
2.12not create an obligation to contribute funds to the account.
2.13(b) Activities funded under this grant may include, but are not limited to:
2.14(1) environmentally sound production of energy from a renewable energy source,
2.15including biomass and agricultural crops;
2.16(2) environmentally sound production of hydrogen from biomass and any other
2.17renewable energy source for energy storage and energy utilization;
2.18(3) development of energy conservation and efficient energy utilization technologies;
2.19(4) energy storage technologies; and
2.20(5) analysis of policy options to facilitate adoption of technologies that use or
2.21produce low-carbon renewable energy.
2.22(c) For the purposes of this subdivision:
2.23(1) "biomass" means plant and animal material, agricultural and forest residues,
2.24mixed municipal solid waste, and sludge from wastewater treatment; and
2.25(2) "renewable energy source" means hydro, wind, solar, biomass, and geothermal
2.26energy, and microorganisms used as an energy source.
2.27(d) Beginning January 15 of 2010, and each year thereafter, the director of the
2.28Initiative for Renewable Energy and the Environment at the University of Minnesota shall
2.29submit a report to the chair and ranking minority members of the senate and house of
2.30representatives committees with primary jurisdiction over energy finance describing the
2.31activities conducted during the previous year funded under this subdivision.

2.32    Sec. 3. Minnesota Statutes 2012, section 216B.02, subdivision 4, is amended to read:
2.33    Subd. 4. Public utility. "Public utility" means persons, corporations, or other legal
2.34entities, their lessees, trustees, and receivers, now or hereafter operating, maintaining,
2.35or controlling in this state equipment or facilities for furnishing at retail natural,
3.1manufactured, or mixed gas or electric service to or for the public or engaged in the
3.2production and retail sale thereof but does not include (1) a municipality or a cooperative
3.3electric association, organized under the provisions of chapter 308A, producing or
3.4furnishing natural, manufactured, or mixed gas or electric service; (2) a retail seller of
3.5compressed natural gas used as a vehicular fuel which purchases the gas from a public
3.6utility; or (3) a retail seller of electricity used to recharge a battery that powers an electric
3.7vehicle, as defined in section 169.011, subdivision 26a, and that is not otherwise a public
3.8utility under this chapter. Except as otherwise provided, the provisions of this chapter shall
3.9not be applicable to any sale of natural, manufactured, or mixed gas or electricity by a
3.10public utility to another public utility for resale. In addition, the provisions of this chapter
3.11shall not apply to a public utility whose total natural gas business consists of supplying
3.12natural, manufactured, or mixed gas to not more than 650 customers within a city pursuant
3.13to a franchise granted by the city, provided a resolution of the city council requesting
3.14exemption from regulation is filed with the commission. The city council may rescind
3.15the resolution requesting exemption at any time, and, upon the filing of the rescinding
3.16resolution with the commission, the provisions of this chapter shall apply to the public
3.17utility. No person shall be deemed to be a public utility if it furnishes its services only to
3.18tenants or cooperative or condominium owners in buildings owned, leased, or operated
3.19by such person. No person shall be deemed to be a public utility if it furnishes service
3.20to occupants of a manufactured home or trailer park owned, leased, or operated by such
3.21person. No person shall be deemed to be a public utility if it produces or furnishes service
3.22to less than 25 persons. No person shall be deemed to be a public utility solely as a result
3.23of the person furnishing consumers with electricity or heat generated from wind or solar
3.24generating equipment located on the consumer's property, provided the equipment is
3.25owned or operated by an entity other than the consumer.

3.26    Sec. 4. Minnesota Statutes 2012, section 216B.03, is amended to read:
3.27216B.03 REASONABLE RATE.
3.28Every rate made, demanded, or received by any public utility, or by any two or
3.29more public utilities jointly, shall be just and reasonable. Rates shall not be unreasonably
3.30preferential, unreasonably prejudicial, or discriminatory, but shall be sufficient, equitable,
3.31and consistent in application to a class of consumers. To the maximum reasonable extent,
3.32the commission shall set rates to encourage energy conservation and renewable energy use
3.33and to further the goals of sections 216B.164, 216B.241, and 216C.05, and 216C.412. Any
3.34doubt as to reasonableness should be resolved in favor of the consumer. For rate-making
4.1purposes a public utility may treat two or more municipalities served by it as a single class
4.2wherever the populations are comparable in size or the conditions of service are similar.

4.3    Sec. 5. Minnesota Statutes 2012, section 216B.16, is amended by adding a subdivision
4.4to read:
4.5    Subd. 6e. Solar energy production incentive. (a) Except as otherwise provided in
4.6this subdivision, all assessments authorized by section 216C.412 incurred in connection
4.7with the solar energy production incentive shall be recognized and included by the
4.8commission in the determination of just and reasonable rates as if the expenses were
4.9directly made or incurred by the utility in furnishing utility service.
4.10(b) The commission shall not include expenses for the solar energy production
4.11incentive in determining just and reasonable electric rates for retail electric service provided
4.12to customers receiving the low-income electric rate discount authorized by subdivision 14.

4.13    Sec. 6. Minnesota Statutes 2012, section 216B.16, subdivision 7b, is amended to read:
4.14    Subd. 7b. Transmission cost adjustment. (a) Notwithstanding any other provision
4.15of this chapter, the commission may approve a tariff mechanism for the automatic annual
4.16adjustment of charges for the Minnesota jurisdictional costs net of associated revenues of:
4.17    (i) new transmission facilities that have been separately filed and reviewed and
4.18approved by the commission under section 216B.243 or are certified as a priority project
4.19or deemed to be a priority transmission project under section 216B.2425; and
4.20    (ii) new transmission facilities approved by the regulatory commission of the state
4.21in which the new transmission facilities are to be constructed, to the extent approval
4.22is required by the laws of that state, and determined by the Midwest Independent
4.23Transmission System Operator to benefit the utility or integrated transmission system; and
4.24    (iii) charges incurred by a utility under a federally approved tariff that accrue
4.25from other transmission owners' regionally planned transmission projects that have been
4.26determined by the Midwest Independent Transmission System Operator to benefit the
4.27utility, as provided for under a federally approved tariff or integrated transmission system.
4.28    (b) Upon filing by a public utility or utilities providing transmission service, the
4.29commission may approve, reject, or modify, after notice and comment, a tariff that:
4.30    (1) allows the utility to recover on a timely basis the costs net of revenues of
4.31facilities approved under section 216B.243 or certified or deemed to be certified under
4.32section 216B.2425 or exempt from the requirements of section 216B.243;
4.33    (2) allows the utility to recover charges incurred by a utility under a federally
4.34approved tariff that accrue from other transmission owners' regionally planned
5.1transmission projects that have been determined by the Midwest Independent Transmission
5.2System Operator to benefit the utility, as provided for under a federally approved tariff
5.3 or integrated transmission system. These charges must be reduced or offset by revenues
5.4received by the utility and by amounts the utility charges to other regional transmission
5.5owners, to the extent those revenues and charges have not been otherwise offset;
5.6    (3) allows the utility to recover on a timely basis the costs net of associated revenues
5.7of facilities approved by the regulatory commission of the state in which the new
5.8transmission facilities are to be constructed and determined by the Midwest Independent
5.9Transmission System Operator to benefit the utility or integrated transmission system;
5.10    (4) allows a return on investment at the level approved in the utility's last general
5.11rate case, unless a different return is found to be consistent with the public interest;
5.12    (4) (5) provides a current return on construction work in progress, provided that
5.13recovery from Minnesota retail customers for the allowance for funds used during
5.14construction is not sought through any other mechanism;
5.15    (5) (6) allows for recovery of other expenses if shown to promote a least-cost project
5.16option or is otherwise in the public interest;
5.17    (6) (7) allocates project costs appropriately between wholesale and retail customers;
5.18    (7) (8) provides a mechanism for recovery above cost, if necessary to improve the
5.19overall economics of the project or projects or is otherwise in the public interest; and
5.20    (8) (9) terminates recovery once costs have been fully recovered or have otherwise
5.21been reflected in the utility's general rates.
5.22    (c) A public utility may file annual rate adjustments to be applied to customer bills
5.23paid under the tariff approved in paragraph (b). In its filing, the public utility shall provide:
5.24    (1) a description of and context for the facilities included for recovery;
5.25    (2) a schedule for implementation of applicable projects;
5.26    (3) the utility's costs for these projects;
5.27    (4) a description of the utility's efforts to ensure the lowest costs to ratepayers for
5.28the project; and
5.29    (5) calculations to establish that the rate adjustment is consistent with the terms
5.30of the tariff established in paragraph (b).
5.31    (d) Upon receiving a filing for a rate adjustment pursuant to the tariff established in
5.32paragraph (b), the commission shall approve the annual rate adjustments provided that,
5.33after notice and comment, the costs included for recovery through the tariff were or are
5.34expected to be prudently incurred and achieve transmission system improvements at the
5.35lowest feasible and prudent cost to ratepayers.

6.1    Sec. 7. Minnesota Statutes 2012, section 216B.1635, is amended to read:
6.2216B.1635 RECOVERY OF GAS UTILITY INFRASTRUCTURE COSTS.
6.3    Subdivision 1. Definitions. (a) "Gas utility" means a public utility as defined in
6.4section 216B.02, subdivision 4, that furnishes natural gas service to retail customers.
6.5(b) "Gas utility infrastructure costs" or "GUIC" means costs incurred in gas utility
6.6projects that:
6.7(1) do not serve to increase revenues by directly connecting the infrastructure
6.8replacement to new customers;
6.9(2) are in service but were not included in the gas utility's rate base in its most
6.10recent general rate case; and, or are planned to be in service during the period covered
6.11by the report submitted under subdivision 2, but in no case longer than the one-year
6.12forecast period in the report; and
6.13(3) replace or modify existing infrastructure if the replacement or modification does
6.14not constitute a betterment, unless the betterment is required by a political subdivision,
6.15as evidenced by specific documentation from the government entity requiring the
6.16replacement or modification of infrastructure do not constitute a betterment, unless the
6.17betterment is based on requirements by a political subdivision or a federal or state agency,
6.18as evidenced by specific documentation, an order, or other similar requirement from the
6.19government entity requiring the replacement or modification of infrastructure.
6.20(c) "Gas utility projects" means relocation and:
6.21(1) replacement of natural gas facilities located in the public right-of-way required
6.22by the construction or improvement of a highway, road, street, public building, or other
6.23public work by or on behalf of the United States, the state of Minnesota, or a political
6.24subdivision.; and
6.25(2) replacement or modification of existing natural gas facilities, including surveys,
6.26assessments, reassessment, and other work necessary to determine the need for replacement
6.27or modification of existing infrastructure that is required by a federal or state agency.
6.28    Subd. 2. Gas infrastructure filing. (a) The commission may approve a gas utility's
6.29petition for a rate schedule A public utility submitting a petition to recover GUIC gas
6.30infrastructure costs under this section. A gas utility may must submit to the commission,
6.31the department, and interested parties a gas infrastructure project plan report and a petition
6.32the commission to recover a rate of return, income taxes on the rate of return, incremental
6.33property taxes, plus incremental depreciation expense associated with GUIC for rate
6.34recovery of only incremental costs associated with projects under subdivision 1, paragraph
6.35(c). The report and petition must be made at least 150 days in advance of implementation
6.36of the rate schedule, provided that the rate schedule will not be implemented until the
7.1petition is approved by the commission pursuant to subdivision 5. The report must be
7.2for a forecast period of one year.
7.3(b) The filing is subject to the following:
7.4(1) A gas utility may submit a filing under this section no more than once per year.
7.5(2) A gas utility must file sufficient information to satisfy the commission regarding
7.6the proposed GUIC or be subject to denial by the commission. The information includes,
7.7but is not limited to:
7.8(i) the government entity ordering the gas utility project and the purpose for which
7.9the project is undertaken;
7.10(ii) the location, description, and costs associated with the project;
7.11(iii) a description of the costs, and salvage value, if any, associated with the existing
7.12infrastructure replaced or modified as a result of the project;
7.13(iv) the proposed rate design and an explanation of why the proposed rate design
7.14is in the public interest;
7.15(v) the magnitude and timing of any known future gas utility projects that the utility
7.16may seek to recover under this section;
7.17(vi) the magnitude of GUIC in relation to the gas utility's base revenue as approved
7.18by the commission in the gas utility's most recent general rate case, exclusive of gas
7.19purchase costs and transportation charges;
7.20(vii) the magnitude of GUIC in relation to the gas utility's capital expenditures since
7.21its most recent general rate case;
7.22(viii) the amount of time since the utility last filed a general rate case and the utility's
7.23reasons for seeking recovery outside of a general rate case; and
7.24(ix) documentation supporting the calculation of the GUIC.
7.25    Subd. 3. Gas infrastructure project plan report. The gas infrastructure project
7.26plan report required to be filed under subdivision 2 shall include all pertinent information
7.27and supporting data on each proposed project including, but not limited to, project
7.28description and scope, estimated project costs, and the estimated project in-service date.
7.29    Subd. 4. Cost recovery petition for utility's facilities. Notwithstanding any other
7.30provision of this chapter, the commission may approve a rate schedule for the automatic
7.31annual adjustment of charges for gas utility infrastructure costs net of revenues under
7.32this section, including a rate of return, income taxes on the rate of return, incremental
7.33property taxes, incremental depreciation expense, and any incremental operation and
7.34maintenance costs. A gas utility's petition for approval of a rate schedule to recover
7.35gas utility infrastructure costs outside of a general rate case under section 216B.16 is
7.36subject to the following:
8.1(1) a gas utility may submit a filing under this section no more than once per year; and
8.2(2) a gas utility must file sufficient information to satisfy the commission regarding
8.3the proposed GUIC. The information includes, but is not limited to:
8.4(i) the information required to be included in the gas infrastructure project plan
8.5report under subdivision 3;
8.6(ii) the government entity ordering or requiring the gas utility project and the
8.7purpose for which the project is undertaken;
8.8(iii) a description of the estimated costs and salvage value, if any, associated with the
8.9existing infrastructure replaced or modified as a result of the project;
8.10(iv) a comparison of the utility's estimated costs included in the gas infrastructure
8.11project plan and the actual costs incurred, including a description of the utility's efforts to
8.12ensure the costs of the facilities are reasonable and prudently incurred;
8.13(v) calculations to establish that the rate adjustment is consistent with the terms
8.14of the rate schedule, including the proposed rate design and an explanation of why the
8.15proposed rate design is in the public interest;
8.16(vi) the magnitude and timing of any known future gas utility projects that the
8.17utility may seek to recover under this section;
8.18(vii) the magnitude of GUIC in relation to the gas utility's base revenue as approved
8.19by the commission in the gas utility's most recent general rate case, exclusive of gas
8.20purchase costs and transportation charges;
8.21(viii) the magnitude of GUIC in relation to the gas utility's capital expenditures
8.22since its most recent general rate case; and
8.23(ix) the amount of time since the utility last filed a general rate case and the utility's
8.24reasons for seeking recovery outside of a general rate case.
8.25    Subd. 5. Commission action. Upon receiving a gas utility report and petition for
8.26cost recovery under subdivision 2, the commission may approve the annual GUIC rate
8.27adjustments provided that, after notice and comment, the commission determines that the
8.28costs included for recovery through the rate schedule are prudently incurred and achieve
8.29gas facility improvements at the lowest reasonable and prudent cost to ratepayers.
8.30    Subd. 6. Rate of return. The return on investment for the rate adjustment shall be
8.31at the level approved by the commission in the public utility's most recently completed
8.32general rate case, unless the commission determines that a different rate of return is in
8.33the public interest.
8.34    Subd. 3 7. Commission authority; rules. The commission may issue orders and
8.35adopt rules necessary to implement and administer this section.

9.1    Sec. 8. Minnesota Statutes 2012, section 216B.164, is amended by adding a
9.2subdivision to read:
9.3    Subd. 2a. Definitions. (a) For the purposes of this section, the following terms
9.4have the meanings given them:
9.5(b) "Aggregated meter" means a meter located on the premises of a customer's
9.6owned or leased property that is contiguous with property containing the customer's
9.7designated meter.
9.8(c) "Capacity" means the number of megawatts alternating current (AC) at the point
9.9of interconnection between a solar photovoltaic device and a utility's electric system.
9.10(d) "Cogeneration" means a combined process whereby electrical and useful thermal
9.11energy are produced simultaneously.
9.12(e) "Contiguous property" means property owned or leased by the customer sharing
9.13a common border, without regard to interruptions in contiguity caused by easements,
9.14public thoroughfares, transportation rights-of-way, or utility rights-of-way.
9.15(f) "Customer" means the person who is named on the utility electric bill for the
9.16premises.
9.17(g) "Designated meter" means a meter that is physically attached to the customer's
9.18facility that the customer-generator designates as the first meter to which net metered
9.19credits are to be applied as the primary meter for billing purposes when the customer is
9.20serviced by more than one meter.
9.21(h) "Distributed generation" means a facility that:
9.22(1) has a capacity of ten megawatts or less;
9.23(2) is interconnected with a utility's distribution system, over which the commission
9.24has jurisdiction; and
9.25(3) generates electricity from natural gas, renewable fuel, or a similarly clean fuel,
9.26and may include waste heat, cogeneration, or fuel cell technology.
9.27(i) "High-efficiency distributed generation" means a distributed energy facility
9.28that has a minimum efficiency of 40 percent, as calculated under section 272.0211,
9.29subdivision 1.
9.30(j) "Net metered facility" means an electric generation facility constructed for the
9.31purpose of offsetting energy use through the use of renewable energy or high-efficiency
9.32distributed generation sources.
9.33(k) "Renewable energy" has the meaning given in section 216B.2411, subdivision 2.
9.34(l) "Standby charge" means a charge imposed by an electric utility upon a distributed
9.35generation facility for the recovery of fixed costs necessary to make electricity service
9.36available to the distributed generation facility.

10.1    Sec. 9. Minnesota Statutes 2012, section 216B.164, subdivision 3, is amended to read:
10.2    Subd. 3. Purchases; small facilities. (a) For a qualifying facility having less than
10.340-kilowatt capacity if interconnected with a cooperative association or municipal utility,
10.4or less than a 1,000-kilowatt capacity if interconnected with a public utility, the customer
10.5shall be billed for the net energy supplied by the utility according to the applicable
10.6rate schedule for sales to that class of customer. In the case of net input into the utility
10.7system by a qualifying facility having less than 40-kilowatt capacity if interconnected
10.8with a cooperative association or municipal utility, or less than a 1,000-kilowatt capacity
10.9if interconnected with a public utility, compensation to the customer shall be at a per
10.10kilowatt-hour rate determined under paragraph (b) or (c).
10.11(b) In setting rates, the commission shall consider the fixed distribution costs to the
10.12utility not otherwise accounted for in the basic monthly charge and shall ensure that the
10.13costs charged to the qualifying facility are not discriminatory in relation to the costs
10.14charged to other customers of the utility. The commission shall set the rates for net
10.15input into the utility system based on avoided costs as defined in the Code of Federal
10.16Regulations, title 18, section 292.101, paragraph (b)(6), the factors listed in Code of
10.17Federal Regulations, title 18, section 292.304, and all other relevant factors.
10.18(c) Notwithstanding any provision in this chapter to the contrary, a qualifying facility
10.19having less than 40-kilowatt capacity if interconnected with a cooperative association or
10.20municipal utility, or less than a 1,000-kilowatt capacity if interconnected with a public
10.21utility, may elect that the compensation for net input by the qualifying facility into the
10.22utility system shall be at the average retail utility energy rate. "Average retail utility energy
10.23rate" is defined as the average of the retail energy rates, exclusive of special rates based
10.24on income, age, or energy conservation, according to the applicable rate schedule of the
10.25utility for sales to that class of customer.
10.26(d) If the qualifying facility is interconnected with a nongenerating utility which has
10.27a sole source contract with a municipal power agency or a generation and transmission
10.28utility, the nongenerating utility may elect to treat its purchase of any net input under this
10.29subdivision as being made on behalf of its supplier and shall be reimbursed by its supplier
10.30for any additional costs incurred in making the purchase. Qualifying facilities having less
10.31than 40-kilowatt capacity if interconnected with a cooperative association or municipal
10.32utility, or less than a 1,000-kilowatt capacity if interconnected with a public utility, may, at
10.33the customer's option, elect to be governed by the provisions of subdivision 4.

10.34    Sec. 10. Minnesota Statutes 2012, section 216B.164, subdivision 4, is amended to read:
11.1    Subd. 4. Purchases; wheeling; costs. (a) Except as otherwise provided in
11.2paragraph (c), this subdivision shall apply to all qualifying facilities having 40-kilowatt
11.3capacity or more if interconnected with a cooperative association or municipal utility,
11.4and a 1,000-kilowatt capacity or more if interconnected with a public utility, as well as
11.5qualifying facilities as defined in subdivision 3 and net metered facilities under subdivision
11.64a which elect to be governed by its provisions.
11.7(b) The utility to which the qualifying facility is interconnected shall purchase all
11.8energy and capacity made available by the qualifying facility. The qualifying facility shall
11.9be paid the utility's full avoided capacity and energy costs as negotiated by the parties, as
11.10set by the commission, or as determined through competitive bidding approved by the
11.11commission. The full avoided capacity and energy costs to be paid a qualifying facility
11.12that generates electric power by means of a renewable energy source are the utility's least
11.13cost renewable energy facility or the bid of a competing supplier of a least cost renewable
11.14energy facility, whichever is lower, unless the commission's resource plan order, under
11.15section 216B.2422, subdivision 2, provides that the use of a renewable resource to meet
11.16the identified capacity need is not in the public interest.
11.17(c) For all qualifying facilities having 30-kilowatt capacity or more, the utility
11.18shall, at the qualifying facility's or the utility's request, provide wheeling or exchange
11.19agreements wherever practicable to sell the qualifying facility's output to any other
11.20Minnesota utility having generation expansion anticipated or planned for the ensuing ten
11.21years. The commission shall establish the methods and procedures to insure that except
11.22for reasonable wheeling charges and line losses, the qualifying facility receives the full
11.23avoided energy and capacity costs of the utility ultimately receiving the output.
11.24(d) The commission shall set rates for electricity generated by renewable energy.

11.25    Sec. 11. Minnesota Statutes 2012, section 216B.164, is amended by adding a
11.26subdivision to read:
11.27    Subd. 4a. Net metered facility. Notwithstanding any provision of this chapter to the
11.28contrary, a customer with a net metered facility having less than 1,000-kilowatt capacity
11.29may elect to be compensated for the customer's net input into the utility system in the form
11.30of a kilowatt-hour credit on the customer's energy bill carried forward and applied to
11.31subsequent energy bills. Any net input supplied by the customer into the utility system
11.32that exceeds energy supplied to the customer by the utility during a 12-month period must
11.33be compensated at the utility's avoided cost rate under subdivision 3, paragraph (b), or
11.34subdivision 4, paragraph (b), as applicable. The customer may choose the month in which
11.35the annual billing period begins.

12.1    Sec. 12. Minnesota Statutes 2012, section 216B.164, is amended by adding a
12.2subdivision to read:
12.3    Subd. 4b. Aggregation of meters. (a) For the purpose of measuring electricity
12.4under subdivisions 3 and 4a, a utility must aggregate for billing purposes a customer's
12.5designated meter with one or more aggregated meters if a customer requests that it do so.
12.6Any aggregation of meters must be governed under this section.
12.7(b) A customer must give at least 60 days' notice to the utility prior to a request that
12.8additional meters be included in meter aggregation. The specific meters must be identified
12.9at the time of the request. In the event that more than one meter is identified, the customer
12.10must designate the rank order for the aggregated meters to which the net metered credits
12.11are to be applied. At least 60 days prior to the beginning of the next annual billing period,
12.12a customer may amend the rank order of the aggregated meters, subject to the provisions
12.13of this subdivision.
12.14(c) The aggregation of meters applies only to charges that use kilowatt-hours as the
12.15billing determinant. All other charges applicable to each meter account must be billed to
12.16the customer.
12.17(d) If the net metered facility supplies more electricity to the utility than the energy
12.18usage recorded by the customer's designated and aggregated meters during a monthly
12.19billing period, the utility must apply credits to the customer's next monthly bill for the
12.20excess kilowatt-hours. The utility must first apply the kilowatt-hour credit to the charges
12.21for the designated meter and then to the charges for the aggregated meters in the rank
12.22order specified by the customer.
12.23(e) With the commission's prior approval, a utility may charge a customer requesting
12.24to aggregate meters a reasonable fee to cover the administrative costs incurred as a result
12.25of implementing the provisions of this subdivision, pursuant to a tariff approved by the
12.26commission for a public utility or by a governing body for a municipal electric utility or
12.27electric cooperative.

12.28    Sec. 13. Minnesota Statutes 2012, section 216B.164, is amended by adding a
12.29subdivision to read:
12.30    Subd. 4c. Limiting cumulative generation prohibited. The commission and any
12.31other governing body regulating public utilities, municipal electric utilities, or electric
12.32cooperatives are prohibited from limiting the cumulative generation of net metered facilities
12.33under subdivision 4a and qualifying facilities under subdivision 3 to less than five percent
12.34of a utility's or cooperative's average annual retail electricity sales as measured over the
12.35previous three calendar years. After the cumulative limit of five percent has been reached,
13.1a public utility, municipal electric utility, or electric cooperative's obligation to offer net
13.2metering to additional customers may be limited by the commission or governing body if
13.3it determines doing so is in the public interest. The commission may limit additional net
13.4metering obligations under this subdivision only after providing notice and opportunity for
13.5public comment. The governing body of a municipal electric utility or electric cooperative
13.6may limit additional net metering obligations under this subdivision only after providing
13.7the affected municipal electric utility or electric cooperative's customers with notice
13.8and opportunity to comment. In determining whether to limit additional net metering
13.9obligations under this subdivision, the commission or governing body shall consider:
13.10(1) the environmental and other public policy benefits of net metered facilities;
13.11(2) the impact of net metered facilities on electricity rates for customers without
13.12net metered systems;
13.13(3) the effects of net metering on the reliability of the electric system;
13.14(4) technical advances or technical concerns; and
13.15(5) other statutory obligations imposed on the commission or on a utility.
13.16The commission or governing body may limit additional net metering obligations under
13.17clauses (2) to (4) only if it determines that additional net metering obligations would
13.18cause significant rate impact, require significant measures to address reliability, or raise
13.19significant technical issues.

13.20    Sec. 14. Minnesota Statutes 2012, section 216B.164, subdivision 6, is amended to read:
13.21    Subd. 6. Rules and uniform contract. (a) The commission shall promulgate rules
13.22to implement the provisions of this section. The commission shall also establish a uniform
13.23statewide form of contract for use between utilities and a qualifying facility having less
13.24than 40-kilowatt 1,000-kilowatt capacity.
13.25(b) The commission shall require the qualifying facility to provide the utility with
13.26reasonable access to the premises and equipment of the qualifying facility if the particular
13.27configuration of the qualifying facility precludes disconnection or testing of the qualifying
13.28facility from the utility side of the interconnection with the utility remaining responsible
13.29for its personnel.
13.30(c) The uniform statewide form of contract shall be applied to all new and existing
13.31interconnections established between a utility and a qualifying facility having less than
13.3240-kilowatt 1,000-kilowatt capacity, except that existing contracts may remain in force
13.33until written notice of election that the uniform statewide contract form applies is given
13.34by either party to the other, with the notice being of the shortest time period permitted
14.1under the existing contract for termination of the existing contract by either party, but
14.2not less than ten nor longer than 30 days.

14.3    Sec. 15. Minnesota Statutes 2012, section 216B.164, is amended by adding a
14.4subdivision to read:
14.5    Subd. 10. Energy for public buildings. (a) All the provisions of this section that
14.6apply to a qualifying facility with a capacity of less than one megawatt shall apply to a
14.7wind energy conversion system with a capacity of up to 3.5 megawatts or an energy
14.8storage device storing energy generated by a wind energy conversion system that provides
14.9energy to a public building.
14.10(b) For the purposes of this subdivision:
14.11(1) "energy storage device" means a device capable of storing up to 3.5
14.12megawatt-hours of previously generated energy and releasing that energy for use at a
14.13later time; and
14.14(2) "public building" means a building or facility financed wholly or in part with
14.15public funds, including facilities financed by the Public Facilities Authority.

14.16    Sec. 16. [216B.1641] VALUE OF SOLAR RATE.
14.17    Subdivision 1. Definition. For the purposes of this section, "solar photovoltaic
14.18device" has the meaning given in section 216C.06, subdivision 16, and must meet the
14.19requirements of section 216C.25.
14.20    Subd. 2. Applicability. (a) Beginning January 1, 2014, this section shall apply to
14.21public utilities selling electricity at retail in Minnesota, and to electric cooperatives and
14.22municipal electric utilities selling electricity at retail in Minnesota that have elected to be
14.23governed under section 216C.412.
14.24(b) Notwithstanding section 216B.164, an owner of a solar photovoltaic device may,
14.25with respect to the purchase price credited by a utility to an owner of a solar photovoltaic
14.26device, elect to be governed under this section or section 216B.164. All other provisions
14.27of section 216B.164, except those in subdivision 3, subdivision 4, paragraphs (a) to (c),
14.28and subdivision 4a, shall apply to an owner of a solar photovoltaic device electing to
14.29be governed under this section.
14.30(c) This section does not apply to a utility that owns a solar photovoltaic device.
14.31(d) An owner of a solar photovoltaic device governed under the net metering
14.32provisions of section 216B.164 prior to the effective date of the commission order issued
14.33under subdivision 9 and who elects to be governed under this section with respect to the
14.34purchase price credited by a utility must provide written notice of that election to the
15.1utility. The utility shall begin crediting the value of solar rate most recently approved by
15.2the commission to the owner of the solar photovoltaic device on the first day of the first
15.3month that begins at least 30 days after receipt of the notice.
15.4(e) This section does not apply to a solar photovoltaic device whose capacity
15.5exceeds two megawatts.
15.6    Subd. 3. Standby charge prohibited. A utility may not apply a standby charge to
15.7a solar photovoltaic device governed under this section.
15.8    Subd. 4. Standard contract. The commission shall establish a statewide uniform
15.9form of contract that must be used by a purchasing utility and an owner of a solar
15.10photovoltaic device who elects to be governed under this section. The term of a contract
15.11entered into under this section must be no less than 20 years. The agreement must provide
15.12for credit of the value of solar rate as approved by the commission under this section,
15.13and must require the transfer of all renewable energy credits associated with the energy
15.14generated by the solar photovoltaic device to the purchasing utility.
15.15    Subd. 5. Credits. The utility interconnected to a solar photovoltaic device whose
15.16owner elects to be governed under this section shall purchase, throughout the term of the
15.17contract, all energy and capacity made available by the owner of the solar photovoltaic
15.18device. All credits must be made at the value of solar rate approved by the commission
15.19under this section.
15.20    Subd. 6. Value of solar rate; guidance document. (a) By December 1, 2013, and
15.21each December 1 thereafter through 2048, the Department of Commerce shall develop
15.22a value of solar guidance document that contains step-by-step procedures that a utility
15.23subject to this section must use to calculate the utility's value of solar rate. The guidance
15.24document must specify a method a utility must use to calculate the value of all the
15.25components listed in paragraph (b), and may include formulas, discount rates, and other
15.26provisions governing how the value of solar rate must be calculated.
15.27(b) The value of solar rate is expressed on a per kilowatt-hour basis, and consists of
15.28the following components:
15.29(1) line loss savings equal to the value of the average amount of electricity lost
15.30through transmission and distribution when electricity is generated by the utility's nonsolar
15.31photovoltaic generators;
15.32(2) transmission and distribution capacity savings equal to the value of delaying
15.33the need for capital investment in a utility's transmission and distribution system by
15.34contracting to purchase energy from solar photovoltaic devices;
16.1(3) energy savings equal to the reduction in a utility's wholesale energy purchases
16.2and costs, based on the time of day the energy would have been generated, realized as a
16.3result of energy purchases from solar photovoltaic devices;
16.4(4) generation capacity savings equal to the value of the benefit of the capacity
16.5added to the utility's system by solar photovoltaic devices;
16.6(5) fuel price hedge value equal to the value of eliminating price uncertainty
16.7associated with the utility's purchases of fuel for electricity generation; and
16.8(6) environmental benefits equal to the premium retail customers are willing to pay
16.9to consume energy produced from renewable resources.
16.10(c) The department may, based on known and measurable evidence of the economic
16.11development benefits of solar electricity generation, including the net increase in local
16.12employment and taxes generated from the manufacture, assembly, installation, operation,
16.13and maintenance of solar photovoltaic devices, or other factors, incorporate additional
16.14amounts into the value of solar rate.
16.15(d) The value of solar rate is equal to the present value of the future revenue streams
16.16of the value components calculated in paragraphs (b) and (c) over the useful life of a
16.17solar photovoltaic device.
16.18(e) Prior to preparing the value of solar guidance document, the Department of
16.19Commerce shall obtain comments and recommendations from utilities, ratepayers, and
16.20other interested parties regarding the content of the value of solar guidance document.
16.21(f) By January 1, 2015, and every January 1 thereafter through 2049, the
16.22commissioner shall make a determination as to whether the value of solar guidance
16.23document developed under subdivision 6 needs to be revised. In making that determination,
16.24the commissioner shall solicit comments and recommendations from interested parties in
16.25the same manner as required under paragraph (e). After considering the comments and
16.26recommendations, the commissioner may revise the value of solar guidance document.
16.27    Subd. 7. Utilities to offer tariff. By April 1, 2014, and each April 1 thereafter
16.28through 2049, a utility subject to this section shall file with the commission a value of
16.29solar tariff based on its calculation of the utility's value of solar rate that is consistent with
16.30the department's value of solar guidance document developed in subdivision 6. A utility
16.31must include in its filing its method of calculation for each component listed in subdivision
16.326, paragraph (b). A utility filing a value of solar rate that differs from the value of solar
16.33rate filed by the utility for the previous year shall submit to the commission the reasons
16.34for and the methods it used to calculate the differences.
17.1    Subd. 8. Value of solar rate; billing. Notwithstanding section 216B.164, an owner
17.2of a solar photovoltaic device who elects to receive the value of solar rate for electricity
17.3generated by the solar photovoltaic device that is sold to a utility must be:
17.4(1) charged by the utility the applicable rate schedule for sales to that class of
17.5customer for all electricity consumed by the customer;
17.6(2) credited the value of solar rate by the utility for all electricity generated by the
17.7solar photovoltaic device;
17.8(3) provided by the utility with a monthly bill that contains, in addition to the
17.9amounts in clauses (1) and (2), the net amount owed to the utility or net credit realized
17.10by the owner for that month and on a year-to-date basis. In the event that the customer
17.11has a positive balance after the 12-month cycle ending on the last day of February, that
17.12balance will be eliminated and the credit cycle will restart the following billing period
17.13beginning March 1; and
17.14(4) provided by the utility a meter that allows for the separate calculation of the
17.15amount of electricity consumed and generated at the property.
17.16    Subd. 9. Commission review; approval. (a) By July 1, 2014, and each July
17.171 thereafter through 2049, the commission shall review the filing submitted under
17.18subdivision 7 and any comments on the filing made by the department or other interested
17.19parties, and approve or modify each utility's value of solar tariff. The commission may,
17.20at its discretion, solicit additional comments, information, and recommendations from
17.21utilities, the department, and other interested parties.
17.22(b) By July 1, 2014, and each January 1 thereafter through 2049, the commission
17.23shall, by order, direct all electric utilities subject to this section to begin crediting the value
17.24of solar rate most recently approved by the commission to:
17.25(1) owners of solar photovoltaic devices who sign a standard contract under this
17.26section on or after the first day of the first month following the effective date of the order;
17.27(2) owners of solar photovoltaic devices who were governed under the net metering
17.28provisions of section 216B.164 prior to the effective date of the order and who elect to be
17.29governed under section 216B.1641 with respect to the purchase price credited by a utility
17.30by complying with the provisions of section 216B.1641, subdivision 2, paragraph (d); and
17.31(3) owners of solar photovoltaic devices interconnected with electric cooperative
17.32associations or municipalities that have elected to be governed under section 216C.412.
17.33(c) In no case shall the commission approve a value of solar rate under this section
17.34that is lower than the applicable retail rate of the subject utility.

17.35    Sec. 17. [216B.1651] DEFINITIONS.
18.1    Subdivision 1. Scope. For the purposes of sections 216B.1651 to 216B.1654, the
18.2following definitions have the meanings given.
18.3    Subd. 2. Community solar generating facility. "Community solar generating
18.4facility" means a facility:
18.5(1) that generates electricity by means of a solar photovoltaic device that has a
18.6capacity of less than two megawatts direct current nameplate;
18.7(2) that is interconnected with a utility's distribution system under the jurisdiction
18.8of the commission;
18.9(3) that is located in the electric service area of the utility with which it is
18.10interconnected;
18.11(4) whose subscribers purchase, under long-term contract with the community solar
18.12generating facility, the right to consume the electricity generated from a specified portion
18.13of the facility's generating capacity;
18.14(5) that is not owned by a utility; and
18.15(6) that has at least two subscribers.
18.16    Subd. 3. Facility manager. "Facility manager" means an entity that manages a
18.17community solar generating facility for the benefit of subscribers and may, in addition,
18.18develop, construct, own, or operate the community solar generating facility. A facility
18.19manager may not be a utility, but may be:
18.20(1) a person whose sole purpose is to beneficially own and operate a community
18.21solar generating facility;
18.22(2) a Minnesota nonprofit corporation organized under chapter 317A;
18.23(3) a Minnesota cooperative association organized under chapter 308A or 308B;
18.24(4) a Minnesota political subdivision or local government including, but not limited
18.25to, a county, statutory or home rule charter city, town, school district, public or private
18.26higher education institution, or any other local or regional governmental organization such
18.27as a board, commission, or association; or
18.28(5) a tribal council.
18.29    Subd. 4. Renewable energy credit. "Renewable energy credit" has the meaning
18.30given in section 216B.1691, subdivision 1, paragraph (d).
18.31    Subd. 5. Solar photovoltaic device. "Solar photovoltaic device" has the meaning
18.32given in section 216C.06, subdivision 16.
18.33    Subd. 6. Subscriber. "Subscriber" means a retail customer of a utility who owns
18.34one or more subscriptions of a community solar generating facility interconnected with
18.35that utility. A facility manager may be a subscriber.
19.1    Subd. 7. Subscription. "Subscription" means a contract between a subscriber and a
19.2community solar generating facility that has a term of no less than 20 years and that
19.3provides to the subscriber a portion of the generation of the community solar generating
19.4facility and a corresponding proportion of the electricity generated by the community
19.5solar generating facility.
19.6    Subd. 8. Utility. "Utility" means a public utility or a cooperative association or
19.7municipality that has elected to be governed under section 216C.412.

19.8    Sec. 18. [216B.1652] SUBSCRIPTIONS.
19.9    Subdivision 1. Presale of subscriptions. A community solar generating facility
19.10may not commence construction of the facility until contracts have been executed for
19.11subscriptions, excluding the subscription of the facility manager, that represent at least 80
19.12percent of the proposed nameplate capacity of the community solar generating facility.
19.13    Subd. 2. Size. (a) A subscription must be a portion of the community solar generating
19.14facility's nameplate capacity sized so as to produce no more than 120 percent of the annual
19.15average amount of electricity consumed over the previous three years at the site where the
19.16subscriber's meter is located. If the site is newly constructed, the subscription must be sized
19.17based on 120 percent of the average annual amount of electricity consumed by a facility of
19.18similar size and type in the utility's service area, as determined by the facility manager.
19.19(b) A subscriber may not own one or more subscriptions whose total capacity
19.20exceeds the maximum capacity allowed for a qualifying facility subject to section
19.21216B.164, subdivision 3.
19.22(c) A facility manager may not own subscriptions whose total capacity exceeds the
19.23maximum subscription size allowed under paragraph (a) plus ten percent of the remaining
19.24available nameplate capacity in the community solar generating facility, subject to the
19.25limit in paragraph (b).
19.26(d) The maximum subscription size for a subscriber consuming electricity generated
19.27from an eligible energy technology, as defined in section 216B.1691, subdivision 1, at any
19.28time during the term of the subscriber's subscription, is the maximum subscription size
19.29allowed under paragraph (a) minus the nameplate capacity of the eligible energy technology
19.30device providing electricity to the subscriber, subject to the limit in paragraph (b).
19.31    Subd. 3. Certification. Prior to the sale of a subscription, a facility manager
19.32must provide certification to the subscriber signed by the facility manager under penalty
19.33of perjury:
19.34(1) identifying the rate of insolation at the community solar generating facility;
20.1(2) certifying that the solar photovoltaic devices employed by the community solar
20.2generating facility to generate electricity have an electrical energy degradation rate of no
20.3more than 0.5 percent annually; and
20.4(3) certifying that the community solar generating facility is in full compliance with
20.5all applicable federal and state utility, securities, and tax laws.
20.6    Subd. 4. On-site subscriber. A subscriber who owns the property on which
20.7a community solar generating facility is located has no more rights with respect to
20.8subscription size or price than any other subscriber.
20.9    Subd. 5. Subscription prices. The price for a subscription to a community solar
20.10generating facility is not subject to regulation by the commission and is negotiated
20.11between the prospective subscriber and the facility manager.
20.12    Subd. 6. Subscription transfer. A subscriber that terminates the contract between
20.13the subscriber and the community solar generating facility must transfer the subscription
20.14to a person eligible to be a subscriber or to the facility manager at a price negotiated
20.15by both parties.
20.16    Subd. 7. New subscribers. Within 30 days of the execution of a contract between the
20.17community solar generating facility and a new subscriber, the facility manager shall submit
20.18the following information to the utility serving the community solar generating facility:
20.19(1) the new subscriber's name, address, number of meters, and utility customer
20.20account; and
20.21(2) the share of the community solar generating facility's nameplate capacity owned
20.22by the new subscriber.
20.23    Subd. 8. Meter change. A subscriber that moves to a different property served by
20.24the community solar generating facility from the property at which the subscriber resided
20.25at the time the contract between the subscriber and the community solar generating facility
20.26was executed, or that changes the number of meters attached to the subscriber's account,
20.27must notify the facility manager within 30 days of the change.
20.28    Subd. 9. Renewable energy credits. (a) Notwithstanding any other law, a
20.29subscriber owns the renewable energy credits associated with the electricity allocated to
20.30the subscriber's subscription. A utility or facility manager may purchase renewable energy
20.31credits under a contract with a subscriber.
20.32(b) Renewable energy credits may not be assigned to a utility as a condition of entering
20.33into a contract or an interconnection agreement with a community solar generating facility.
20.34    Subd. 10. Disputes. The dispute resolution provisions available under section
20.35216B.164 shall be used to resolve disputes between a facility manager and the utility
20.36serving the community solar generating facility.

21.1    Sec. 19. [216B.1653] DISPOSITION OF ELECTRICITY GENERATED.
21.2    Subdivision 1. Allocation. (a) The total amount of electricity available for allocation
21.3to all subscribers of a community solar generating facility shall be determined by a
21.4production meter installed by the utility.
21.5(b) The total amount of electricity available to a subscriber shall be the total amount
21.6of electricity available for allocation to all subscribers of a community solar generating
21.7facility prorated by a subscriber's subscription size in relation to the nameplate capacity of
21.8the community solar generating facility.
21.9(c) A subscriber may not resell electricity governed by the subscriber's contract
21.10with a community solar generating facility.
21.11(d) All electricity generated by a community solar generating facility that is not
21.12allocated to or consumed by subscribers must be sold to the utility interconnected with
21.13the community solar generating facility.
21.14    Subd. 2. Utility purchases. The utility to which the community solar generating
21.15facility is interconnected shall purchase all electricity generated by the community solar
21.16generating facility that is not consumed by subscribers. The price paid to the community
21.17solar generating facility by the utility is governed by section 216B.164 or any law that
21.18governs the price a utility must pay to purchase electricity from a solar photovoltaic device.
21.19    Subd. 3. Interconnection. The commission shall establish uniform fees for the
21.20interconnection of a community solar generating facility with a utility.
21.21    Subd. 4. Nonutility status. Notwithstanding section 216B.02, a community solar
21.22generating facility is not a public utility.

21.23    Sec. 20. [216B.1654] BILLING.
21.24    Subdivision 1. Billing procedure. A subscriber to a community solar generating
21.25facility must be:
21.26(1) charged by the utility interconnected with the community solar generating
21.27facility the utility's applicable rate schedule for sales to that class of customer for all
21.28electricity consumed by the subscriber;
21.29(2) paid by the utility the maximum rate allowable under section 216B.164, or
21.30any other law that may govern the price a utility must pay to purchase electricity from
21.31a solar photovoltaic device, for a portion of all electricity the utility purchases from
21.32the community solar generating facility that is equal to the ratio of the subscriber's
21.33subscription to the nameplate capacity of the community solar generating facility;
22.1(3) provided by the utility with a monthly bill that contains, in addition to the
22.2amounts in clauses (1) and (2), the net amount owed to the utility or net credit realized by
22.3the owner for that month and on a year-to-date basis; and
22.4(4) provided by the utility with a meter that allows for the separate calculation of the
22.5amount of electricity consumed and generated at the property.
22.6    Subd. 2. Billing system. The Department of Commerce shall, by January 1, 2014,
22.7establish a uniform administrative system to credit the utility accounts of subscribers to a
22.8community solar generating facility. In determining the uniform administrative system, the
22.9commission shall solicit comments and recommendations from utilities, ratepayers, and
22.10other interested parties, and shall review commercially available administrative systems
22.11and administrative systems used in jurisdictions where entities similar to community
22.12solar generating facilities are operating.
22.13    Subd. 3. Commission proceeding; rate adjustment. By September 1, 2014, the
22.14commission shall initiate a proceeding to examine whether the rate paid by a utility to
22.15purchase energy from a community solar generating facility under section 216B.1653,
22.16subdivision 2, should be adjusted to reflect the actual fixed costs incurred by a utility to
22.17provide service to a community solar generating facility.

22.18    Sec. 21. Minnesota Statutes 2012, section 216B.1691, subdivision 1, is amended to read:
22.19    Subdivision 1. Definitions. (a) Unless otherwise specified in law, "eligible energy
22.20technology" means an energy technology that generates electricity from the following
22.21renewable energy sources:
22.22(1) solar;
22.23(2) wind;
22.24(3) hydroelectric with a capacity of less than 100 megawatts;
22.25(4) hydrogen, provided that after January 1, 2010, the hydrogen must be generated
22.26from the resources listed in this paragraph; or
22.27(5) biomass, which includes, without limitation, landfill gas; an anaerobic digester
22.28system; the predominantly organic components of wastewater effluent, sludge, or related
22.29by-products from publicly owned treatment works, but not including incineration of
22.30wastewater sludge to produce electricity; and an energy recovery facility used to capture
22.31the heat value of mixed municipal solid waste or refuse-derived fuel from mixed municipal
22.32solid waste as a primary fuel.
22.33    (b) "Electric utility" means a public utility providing electric service, a generation
22.34and transmission cooperative electric association, a municipal power agency, or a power
22.35district.
23.1    (c) "Total retail electric sales" means the kilowatt-hours of electricity sold in a year
23.2by an electric utility to retail customers of the electric utility or to a distribution utility
23.3for distribution to the retail customers of the distribution utility. "Total retail electric
23.4sales" does not include the sale of hydroelectricity supplied by a federal power marketing
23.5administration or other federal agency, regardless of whether the sales are directly to a
23.6distribution utility or are made to a generation and transmission utility and pooled for
23.7further allocation to a distribution utility.
23.8    (d) "Renewable energy credit" means a certificate of proof, issued through the
23.9accounting system approved by the commission under subdivision 4, attesting that one
23.10unit of electricity was generated and delivered by an eligible energy technology, and
23.11including all renewable and environmental attributes associated with the production of
23.12electricity from the eligible energy technology.

23.13    Sec. 22. Minnesota Statutes 2012, section 216B.1691, subdivision 2a, is amended to
23.14read:
23.15    Subd. 2a. Eligible energy technology standard. (a) Except as provided in
23.16paragraph (b), each electric utility shall generate or procure sufficient electricity generated
23.17by an eligible energy technology to provide its retail customers in Minnesota, or the
23.18retail customers of a distribution utility to which the electric utility provides wholesale
23.19electric service, so that at least the following standard percentages of the electric utility's
23.20total retail electric sales to retail customers in Minnesota are generated by eligible energy
23.21technologies by the end of the year indicated:

23.22	(1)	2012	12 percent
23.23	(2)	2016	17 percent
23.24	(3)	2020	20 percent
23.25	(4)	2025	25 percent.

23.26    (b) An electric utility that owned a nuclear generating facility as of January 1, 2007,
23.27must meet the requirements of this paragraph rather than paragraph (a). An electric utility
23.28subject to this paragraph must generate or procure sufficient electricity generated by
23.29an eligible energy technology to provide its retail customers in Minnesota or the retail
23.30customer of a distribution utility to which the electric utility provides wholesale electric
23.31service so that at least the following percentages of the electric utility's total retail electric
23.32sales to retail customers in Minnesota are generated by eligible energy technologies by the
23.33end of the year indicated:

23.34	(1)	2010	15 percent
23.35	(2)	2012	18 percent
24.1	(3)	2016	25 percent
24.2	(4)	2020	30 percent.

24.3Of the 30 percent in 2020, at least 25 percent must be generated by solar energy
24.4or wind energy conversion systems and the remaining five percent by other eligible
24.5energy technology. Of the 25 percent that must be generated by wind or solar, no more
24.6than one percent may be solar generated and the remaining 24 percent or greater must
24.7be wind generated.
24.8(c) By the end of 2030, each public utility shall generate or procure sufficient
24.9electricity generated by an eligible energy technology to provide at least 40 percent of the
24.10public utility's total retail electric sales to retail customers in Minnesota.
24.11EFFECTIVE DATE.This section is effective the day following final enactment.

24.12    Sec. 23. Minnesota Statutes 2012, section 216B.1691, subdivision 2e, is amended to
24.13read:
24.14    Subd. 2e. Rate impact of standard compliance; report. Each electric utility must
24.15submit to the commission and the legislative committees with primary jurisdiction over
24.16energy policy a report containing an estimation of the rate impact of activities of the
24.17electric utility necessary to comply with this section. In consultation with the Department
24.18of Commerce, the commission shall determine a uniform reporting system to ensure that
24.19individual utility reports are consistent and comparable, and shall, by order, require each
24.20electric utility subject to this section to use that reporting system. The rate impact estimate
24.21must be for wholesale rates and, if the electric utility makes retail sales, the estimate
24.22shall also be for the impact on the electric utility's retail rates. Those activities include,
24.23without limitation, energy purchases, generation facility acquisition and construction, and
24.24transmission improvements. An initial report must be submitted within 150 days of May
24.2528, 2011. After the initial report, a report must be updated and submitted as part of each
24.26integrated resource plan or plan modification filed by the electric utility under section
24.27216B.2422 . The reporting obligation of an electric utility under this subdivision expires
24.28December 31, 2025, for an electric utility subject to subdivision 2a, paragraph (a), and
24.29December 31, 2020, for an electric utility subject to subdivision 2a, paragraph (b).

24.30    Sec. 24. Minnesota Statutes 2012, section 216B.1691, is amended by adding a
24.31subdivision to read:
24.32    Subd. 2f. Solar energy standard. (a) In addition to the requirements of subdivision
24.332a, each public utility shall generate or procure sufficient electricity generated by solar
25.1energy to serve its retail electricity customers in Minnesota so that at least the following
25.2standard percentages of the utility's total retail electric sales to retail customers in
25.3Minnesota are generated by solar energy by the end of the year indicated:

25.4	(1)	2016	0.5 percent
25.5	(2)	2020	2.0 percent
25.6	(3)	2025	4.0 percent

25.7(b) The solar energy standard established in this subdivision is subject to all the
25.8provisions of this section governing a utility's standard obligation under subdivision 2a.
25.9(c) It is an energy goal of the state of Minnesota that by 2030, ten percent of the
25.10retail electric sales in Minnesota be generated by solar energy.
25.11

25.12    Sec. 25. Minnesota Statutes 2012, section 216B.1692, subdivision 1, is amended to read:
25.13    Subdivision 1. Qualifying projects. (a) Projects that may be approved for the
25.14emissions reduction-rate rider allowed in this section must:
25.15(1) be installed on existing large electric generating power plants, as defined in
25.16section 216B.2421, subdivision 2, clause (1), that are located in the state and that are
25.17currently not subject to emissions limitations for new power plants under the federal Clean
25.18Air Act, United States Code, title 42, section 7401 et seq.;
25.19(2) not increase the capacity of the existing electric generating power plant more
25.20than ten percent or more than 100 megawatts, whichever is greater; and
25.21(3) result in the existing plant either:
25.22(i) complying with applicable new source review standards under the federal Clean
25.23Air Act; or
25.24(ii) emitting air contaminants at levels substantially lower than allowed for new
25.25facilities by the applicable new source performance standards under the federal Clean
25.26Air Act; or
25.27(iii) reducing emissions from current levels at a unit to the lowest cost-effective level
25.28when, due to the age or condition of the generating unit, the public utility demonstrates
25.29that it would not be cost-effective to reduce emissions to the levels in item (i) or (ii).
25.30(b) Notwithstanding paragraph (a), a project may be approved for the emission
25.31reduction rate rider allowed in this section if the project is to be installed on existing
25.32large electric generating power plants, as defined in section 216B.2421, subdivision 2,
25.33clause (1), that are located outside the state and are needed to comply with state or federal
25.34air quality standards, but only if the project has received an advance determination of
25.35prudence from the commission under section 216B.1695.

26.1    Sec. 26. Minnesota Statutes 2012, section 216B.1692, is amended by adding a
26.2subdivision to read:
26.3    Subd. 1a. Exemption. Subdivisions 2, 4, and 5, paragraph (c), clause (1), do not
26.4apply to projects qualifying under subdivision 1, paragraph (b).

26.5    Sec. 27. Minnesota Statutes 2012, section 216B.1692, subdivision 8, is amended to read:
26.6    Subd. 8. Sunset. This section is effective until December 31, 2015 2020, and
26.7applies to plans, projects, and riders approved before that date and modifications made to
26.8them after that date.

26.9    Sec. 28. Minnesota Statutes 2012, section 216B.1695, subdivision 5, is amended to read:
26.10    Subd. 5. Cost recovery. The utility may begin recovery of costs that have been
26.11incurred by the utility in connection with implementation of the project in the next rate
26.12case following an advance determination of prudence or in a rider approved under section
26.13216B.1692. The commission shall review the costs incurred by the utility for the project.
26.14The utility must show that the project costs are reasonable and necessary, and demonstrate
26.15its efforts to ensure the lowest reasonable project costs. Notwithstanding the commission's
26.16prior determination of prudence, it may accept, modify, or reject any of the project costs.
26.17The commission may determine whether to require an allowance for funds used during
26.18construction offset.

26.19    Sec. 29. Minnesota Statutes 2012, section 216B.1695, is amended by adding a
26.20subdivision to read:
26.21    Subd. 5a. Rate of return. The return on investment in the rider shall be at the level
26.22approved by the commission in the public utility's most recently completed general rate
26.23case, unless the commission determines that a different rate of return is in the public interest.

26.24    Sec. 30. Minnesota Statutes 2012, section 216B.23, subdivision 1a, is amended to read:
26.25    Subd. 1a. Authority to issue refund. (a) On determining that a public utility has
26.26charged a rate in violation of this chapter, a commission rule, or a commission order, the
26.27commission, after conducting a proceeding, may require the public utility to refund to its
26.28customers, in a manner approved by the commission, any revenues the commission finds
26.29were collected as a result of the unlawful conduct. Any refund authorized by this section
26.30is permitted in addition to any remedies authorized by section 216B.16 or any other law
26.31governing rates. Exercising authority under this section does not preclude the commission
26.32from pursuing penalties under sections 216B.57 to 216B.61 for the same conduct.
27.1(b) This section must not be construed as allowing:
27.2(1) retroactive ratemaking;
27.3(2) refunds based on claims that prior or current approved rates have been unjust,
27.4unreasonable, unreasonably preferential, discriminatory, insufficient, inequitable, or
27.5inconsistent in application to a class of customers; or
27.6(3) refunds based on claims that approved rates have not encouraged energy
27.7conservation or renewable energy use, or have not furthered the goals of section 216B.164,
27.8216B.241 , or 216C.05, or 216C.412.
27.9    (c) A refund under this subdivision does not apply to revenues collected more than
27.10six years before the date of the notice of the commission proceeding required under this
27.11subdivision.

27.12    Sec. 31. Minnesota Statutes 2012, section 216B.241, subdivision 1e, is amended to read:
27.13    Subd. 1e. Applied research and development grants. (a) The commissioner
27.14may, by order, approve and make grants for applied research and development projects
27.15of general applicability that identify new technologies or strategies to maximize energy
27.16savings, improve the effectiveness of energy conservation programs, or document
27.17the carbon dioxide reductions from energy conservation programs. When approving
27.18projects, the commissioner shall consider proposals and comments from utilities and
27.19other interested parties. The commissioner may assess up to $3,600,000 annually for the
27.20purposes of this subdivision. The assessments must be deposited in the state treasury
27.21and credited to the energy and conservation account created under subdivision 2a. An
27.22assessment made under this subdivision is not subject to the cap on assessments provided
27.23by section 216B.62, or any other law.
27.24    (b) The commissioner, as part of the assessment authorized under paragraph (a),
27.25shall annually assess and grant up to $500,000 for the purpose of subdivision 9.
27.26(c) The commissioner, as part of the assessment authorized under paragraph (a),
27.27shall annually assess $500,000 per fiscal year for a grant to the partnership created in
27.28section 216C.385, subdivision 2. The grant must be used to exercise the powers and
27.29perform the duties specified in section 216C.385, subdivision 3.
27.30(d) By February 15, 2014, and each February 15 thereafter, the commissioner shall
27.31report to the chairs and ranking minority members of the committees of the legislature
27.32with primary jurisdiction over energy policy and energy finance on the assessments made
27.33under this subdivision for the previous calendar year and the use of the assessment. The
27.34report must clearly describe the activities supported by the assessment and the parties
27.35that engaged in those activities.

28.1    Sec. 32. Minnesota Statutes 2012, section 216B.241, subdivision 5c, is amended to read:
28.2    Subd. 5c. Large solar electric generating plant. (a) For the purpose of this
28.3subdivision:
28.4(1) "project" means a solar electric generation project consisting of arrays of solar
28.5photovoltaic cells with a capacity of up to two megawatts located on the site of a closed
28.6landfill in Olmsted County owned by the Minnesota Pollution Control Agency; and
28.7(2) "cooperative electric association" means a generation and transmission
28.8cooperative electric association that has a member distribution cooperative association to
28.9which it provides wholesale electric service in whose service territory a project is located.
28.10(b) A cooperative electric association may elect to count all of its purchases of
28.11electric energy from a project toward only one of the following:
28.12(1) its energy-savings goal under subdivision 1c; or
28.13(2) its energy objective or solar energy standard under section 216B.1691,
28.14subdivision 2f.
28.15(c) A cooperative electric association may include in its conservation plan purchases
28.16of electric energy from a project. The cost-effectiveness of project purchases may be
28.17determined by a different standard than for other energy conservation improvements
28.18under this section if the commissioner determines that doing so is in the public interest
28.19in order to encourage solar energy. The kilowatt hours of solar energy purchased by a
28.20cooperative electric association from a project may count for up to 33 percent of its one
28.21percent savings goal under subdivision 1c or up to 22 percent of its 1.5 percent savings
28.22goal under that subdivision. Expenditures made by a cooperative association for the
28.23purchase of energy from a project may not be used to meet the revenue expenditure
28.24requirements of subdivisions 1a and 1b.

28.25    Sec. 33. Minnesota Statutes 2012, section 216B.2411, subdivision 3, is amended to read:
28.26    Subd. 3. Other provisions. (a) Electricity generated by a facility constructed with
28.27funds provided under this section and using an eligible renewable energy source may be
28.28counted toward the renewable energy objectives in section 216B.1691, subject to the
28.29provisions of that section, except as provided in paragraph (c).
28.30(b) Two or more entities may pool resources under this section to provide assistance
28.31jointly to proposed eligible renewable energy projects. The entities shall negotiate and
28.32agree among themselves for allocation of benefits associated with a project, such as the
28.33ability to count energy generated by a project toward a utility's renewable energy objectives
28.34under section 216B.1691, except as provided in paragraph (c). The entities shall provide a
29.1summary of the allocation of benefits to the commissioner. A utility may spend funds under
29.2this section for projects in Minnesota that are outside the service territory of the utility.
29.3(c) Electricity generated by a solar photovoltaic device constructed with funds
29.4provided under this section may be counted toward a public utility's solar energy standard
29.5under section 216B.1691, subdivision 2f.

29.6    Sec. 34. Minnesota Statutes 2012, section 216B.40, is amended to read:
29.7216B.40 EXCLUSIVE SERVICE RIGHT; SERVICE EXTENSION.
29.8Except as provided in sections 216B.42 and 216B.421, each electric utility shall
29.9have the exclusive right to provide electric service by electric line at retail to each and
29.10every present and future customer in its assigned service area and no electric utility shall
29.11render or extend electric service at retail within the assigned service area of another
29.12electric utility unless the electric utility consents thereto in writing; provided that any
29.13electric utility may extend its facilities through the assigned service area of another
29.14electric utility if the extension is necessary to facilitate the electric utility connecting its
29.15facilities or customers within its own assigned service area.
29.16

29.17    Sec. 35. [216C.411] SOLAR ENERGY PRODUCTION INCENTIVE ACCOUNT.
29.18     Subdivision 1. Account established; account management. A solar energy
29.19production incentive account is established as a separate account in the special revenue
29.20fund in the state treasury. The commissioner of commerce shall credit to the account the
29.21amounts assessed and collected under this section and appropriations and transfers to
29.22the account. Earnings, such as interest, dividends, and any other earnings arising from
29.23account assets, must be credited to the account. Funds remaining in the account at the
29.24end of a fiscal year are not canceled to the general fund but remain in the account. The
29.25commissioner of commerce shall manage the account.
29.26    Subd. 2. Purpose. The purpose of the account is to pay the solar energy production
29.27incentive to owners of qualified solar photovoltaic devices located in the electric service
29.28territory of a cooperative association or municipal electric utility that has elected to
29.29be governed under section 216C.412, and the Department of Commerce's actual and
29.30reasonable costs to administer this section and section 216C.412.
29.31    Subd. 3. Administrative procedure. By April 1, 2014, the commissioner of
29.32commerce shall develop an administrative procedure that transfers funds from the account
29.33to pay the solar energy production incentive to owners of solar photovoltaic devices
30.1located in the electric service territory of a cooperative association or municipality that has
30.2elected to be governed under section 216C.412.
30.3    Subd. 4. Transfer. The public utility that contributes to the account established
30.4under section 116C.779 shall transfer from that account up to $5,000,000 annually to the
30.5commissioner of commerce for deposit in the account established in subdivision 1 for the
30.6purpose of paying the solar energy production incentive to owners of solar photovoltaic
30.7devices located in the electric service territory of a cooperative association or municipal
30.8electric utility that has elected to be governed under section 216C.412. The commissioner
30.9of commerce shall request funds to be transferred by the public utility only to the extent
30.10necessary to fully fund the annual aggregate solar production incentives paid to owners
30.11of solar photovoltaic devices that are interconnected with cooperative associations or
30.12municipal electric utilities that have elected to be governed under section 216C.412.

30.13    Sec. 36. [216C.412] SOLAR ENERGY PRODUCTION INCENTIVE.
30.14    Subdivision 1. Applicability. (a) A public utility providing retail electric service to
30.15Minnesota customers is subject to the provisions of this section.
30.16(b) A cooperative association or a municipal electric utility providing retail electric
30.17service to Minnesota customers may elect to be subject to the provisions of this section.
30.18The election shall be approved by resolution of the board of directors of the association or
30.19the governing body of the municipal electric utility, a copy of which must be provided to
30.20the commissioner of commerce. The election is effective 30 days after the election by
30.21the board of directors or governing body.
30.22    Subd. 2. Incentive payment. (a) Incentive payments may be made under this
30.23section only to an owner of a solar photovoltaic device who has:
30.24(1) submitted to the utility to which the solar photovoltaic device is interconnected,
30.25on a form prescribed by the utility, an application to receive the incentive; and
30.26(2) received from the utility in writing a determination that the solar photovoltaic
30.27device qualifies for the incentive.
30.28(b) A utility shall make incentive payments under this section on a first-come,
30.29first-served basis. A utility is not required to make aggregate incentive payments under
30.30this section in any one calendar year that exceed 1.33 percent of the utility's gross
30.31operating revenues from retail sales of electric service provided to Minnesota customers
30.32during the previous calendar year.
30.33(c) A cooperative association or a municipal electric utility that elects to be subject
30.34to the provisions of this section may elect to have the Department of Commerce pay
31.1the incentive to owners of solar photovoltaic devices from the account established in
31.2section 216C.411.
31.3(d) A utility that owns a solar photovoltaic device is not eligible to receive incentive
31.4payments under this section.
31.5(e) A solar photovoltaic device whose capacity exceeds two megawatts is ineligible
31.6to receive incentive payments under this section.
31.7    Subd. 3. Eligibility window; payment duration. (a) Payments may be made under
31.8this section only for electricity generated from a solar photovoltaic device that first begins
31.9generating electricity after January 1, 2014, through December 31, 2049.
31.10(b) Payment of the incentive begins and runs consecutively from the date the solar
31.11photovoltaic device begins generating electricity.
31.12(c) A utility paying an incentive under this section must enter into a contract with
31.13an owner of a solar photovoltaic system under which the utility agrees to make incentive
31.14payments for a period of 20 years.
31.15(d) No payment may be made under this section for electricity generated after
31.16December 31, 2049.
31.17    Subd. 4. Amount of payment. (a) An incentive payment is based on the number of
31.18kilowatt hours of electricity generated. The per-kilowatt-hour amount of the payment for
31.19each category of qualified solar photovoltaic device listed below is equal to the applicable
31.20reference price specified in this subdivision minus:
31.21(1) the value of solar rate approved by the commissioner under section 216B.1641,
31.22for owners of solar photovoltaic devices that have elected to have the utility's purchase
31.23price for electricity governed by that section; or
31.24(2) the rate a utility pays an owner of a solar photovoltaic device for excess electricity
31.25generation under section 216B.164, for owners of solar photovoltaic devices that have
31.26elected to have the utility's purchase price for electricity governed by that section.

31.27		Nameplate Capacity	Reference Price
31.28		Residential	20.4 cents per kilowatt-hour
31.29		Nonresidential:
31.30		Under 25 kilowatts	18.1 cents per kilowatt-hour
31.31 31.32		Rooftop, 25 kilowatts to 2 megawatts	15.9 cents per kilowatt-hour
31.33 31.34		Ground-mounted, 25 kilowatts to 2 megawatts	13.6 cents per kilowatt-hour

31.35(b) By January 1, 2015, and every January 1 thereafter through 2049, the
31.36commissioner shall make a determination as to whether the reference price needs to be
31.37adjusted in order to achieve the solar energy standard established in section 216B.1691,
32.1subdivision 2f, at the lowest level of incentive payments. In making the determination, the
32.2commissioner shall solicit comments and recommendations from utilities, ratepayers, and
32.3other interested parties regarding the calculation of the reference price. After considering
32.4the comments and recommendations, the commissioner may adjust the reference price.
32.5(c) For the purposes of this subdivision, "reference price" means the lowest
32.6per-kilowatt price for electricity generated by a qualified solar photovoltaic system the
32.7commissioner determines is sufficient to provide an economic incentive that will result
32.8in the development of aggregate capacity in this state to meet the solar energy standard
32.9established in section 216B.1691, subdivision 2f.
32.10    Subd. 5. Dispute resolution. Disputes between an owner of a solar photovoltaic
32.11device and a utility paying an incentive under this section shall be resolved by the
32.12commissioner of commerce.
32.13    Subd. 6. Appropriation. An amount sufficient to pay the solar energy production
32.14incentive under this section is annually appropriated from the account established under
32.15section 216C.411 to the commissioner of commerce for the purposes of this section.

32.16    Sec. 37. [216C.413] DEFINITIONS.
32.17For the purposes of sections 216C.411 to 216C.417, the following terms have the
32.18meanings given.
32.19(a) "Made in Minnesota" means the manufacture in this state of solar photovoltaic
32.20modules:
32.21(1) at a manufacturing facility located in Minnesota that is registered and authorized
32.22to manufacture and apply the UL 1703 certification mark to solar photovoltaic modules by
32.23Underwriters Laboratory (UL), CSA International, Intertek, or an equivalent UL-approved
32.24independent certification agency;
32.25(2) that bear UL 1703 certification marks from UL, CSA International, Intertek, or
32.26an equivalent UL-approved independent certification agency, which must be physically
32.27applied to the modules at a manufacturing facility described in clause (1); and
32.28(3) that are manufactured in Minnesota:
32.29(i) by manufacturing processes that must include tabbing, stringing, and lamination;
32.30or
32.31(ii) by interconnecting low-voltage direct current photovoltaic elements that produce
32.32the final useful photovoltaic output of the modules.
32.33A solar photovoltaic module that is manufactured by attaching microinverters, direct
32.34current optimizers, or other power electronics to a laminate or solar photovoltaic
32.35module that has received UL 1703 certification marks outside Minnesota from UL, CSA
33.1International, Intertek, or an equivalent UL-approved independent certification agency is
33.2not "Made in Minnesota" under this paragraph.
33.3    (b) "Solar photovoltaic module" has the meaning given in section 116C.7791,
33.4subdivision 1, paragraph (e).

33.5    Sec. 38. [216C.414] "MADE IN MINNESOTA" PRODUCTION INCENTIVE
33.6ACCOUNT.
33.7    Subdivision 1. Account establishment; management. A "Made in Minnesota"
33.8production incentive account is established as a separate account in the special revenue
33.9fund in the state treasury. The commissioner shall credit to the account the amounts
33.10collected under this section and appropriations and transfers to the account. Earnings, such
33.11as interest, dividends, and any other earnings arising from account assets, must be credited
33.12to the account. Funds remaining in the account at the end of a fiscal year are not canceled
33.13to the general fund but remain in the account. The commissioner shall manage the account.
33.14    Subd. 2. Purpose. The purpose of the account is to pay the "Made in Minnesota"
33.15production incentive to owners of qualified solar photovoltaic devices, including related
33.16administrative costs, under section 216C.413.
33.17    Subd. 3. Transfer. The public utility that contributes to the account established
33.18under section 116C.779 shall transfer from that account up to $5,000,000 annually to
33.19the commissioner of commerce for deposit in the account established in subdivision 1
33.20for the purpose of paying the "Made in Minnesota" production incentive to owners of
33.21solar photovoltaic devices that qualify under section 216C.413. The commissioner of
33.22commerce shall request funds to be transferred by the public utility only to the extent
33.23necessary to fully fund the annual aggregate "Made in Minnesota" incentives paid to
33.24owners of solar photovoltaic devices.
33.25    Subd. 4. Appropriation. An amount sufficient to pay the "Made in Minnesota"
33.26production incentive under this section is annually appropriated from the account
33.27established under this section to the commissioner of commerce for the purposes of this
33.28section.

33.29    Sec. 39. [216C.415] "MADE IN MINNESOTA" SOLAR ENERGY
33.30PRODUCTION INCENTIVE; QUALIFICATION.
33.31    Subdivision 1. Application. A manufacturer of solar photovoltaic modules seeking
33.32to qualify those modules as eligible to receive the "Made in Minnesota" solar energy
33.33production incentive must submit an application to the commissioner of commerce on a
33.34form prescribed by the commissioner. The application must contain:
34.1(1) a technical description of the solar photovoltaic module and the processes used
34.2to manufacture it, excluding proprietary details;
34.3(2) documentation that the solar photovoltaic module meets all the required
34.4applicable parts of the "Made in Minnesota" definition in section 216C.411, including
34.5evidence of the UL 1703 right to mark for all solar photovoltaic modules seeking to
34.6qualify as "Made in Minnesota";
34.7(3) any additional nonproprietary information requested by the commissioner
34.8of commerce; and
34.9(4) certification signed by the chief executive officer of the manufacturing company
34.10attesting to the truthfulness of the contents of the application and supporting materials
34.11under penalty of perjury.
34.12    Subd. 2. Certification. If the commissioner determines that a manufacturer's solar
34.13photovoltaic module meets the definition of "Made in Minnesota" in section 216C.411, the
34.14commissioner shall issue the manufacturer a "Made in Minnesota" certificate containing
34.15the name and model numbers of the certified solar photovoltaic modules and the date of
34.16certification. The commissioner must issue or deny the issuance of a certificate within 90
34.17days of receipt of a completed application. A copy of the certificate must be provided to
34.18each purchaser of the solar photovoltaic module.
34.19    Subd. 3. Revocation of certification. The commissioner may revoke a certification
34.20of a module as "Made in Minnesota" if the commissioner finds that the module no longer
34.21meets the requirements to be certified. The revocation does not affect incentive payments
34.22awarded prior to the revocation.

34.23    Sec. 40. [216C.416] "MADE IN MINNESOTA" SOLAR ENERGY
34.24PRODUCTION INCENTIVE.
34.25    Subdivision 1. Setting incentive. Within 90 days of a module being certified as
34.26"Made in Minnesota," the commissioner of commerce shall set a solar energy production
34.27incentive amount for that solar photovoltaic module for the purpose of the incentive
34.28payment under section 216C.415. The incentive is a performance-based financial
34.29incentive expressed as a per kilowatt-hour amount. The amount shall be used for incentive
34.30applications approved in the year to which the incentive amount is applicable for the
34.31ten-year duration of the incentive payments. An incentive amount must be calculated for
34.32each module for each calendar year, through 2023.
34.33    Subd. 2. Criteria for determining incentive amount. (a) The commissioner shall
34.34set the incentive payment amount by determining the average amount of incentive payment
35.1required to allow an average owner of installed solar photovoltaic modules a reasonable
35.2return on their investment. In setting the incentive amount the commissioner shall consider:
35.3(1) an estimate of the installed cost per kilowatt-direct current, based on the cost data
35.4supplied by the manufacturer in the application submitted under section 216C.413, and an
35.5estimate of the average installation cost based on a representative sample of Minnesota
35.6solar photovoltaic installed projects;
35.7(2) the average insolation rate in Minnesota;
35.8(3) an estimate of the decline in the generation efficiency of the solar photovoltaic
35.9modules over time;
35.10(4) the rate paid by utilities to owners of solar photovoltaic modules under section
35.11216B.164 or other law;
35.12(5) applicable federal tax incentives for installing solar photovoltaic modules; and
35.13(6) the estimated levelized cost per kilowatt-hour generated.
35.14(b) The commissioner shall annually, for incentive applications received in a year,
35.15revise each incentive amount based on the factors in paragraph (a), clauses (1) to (6),
35.16general market conditions, and the availability of other incentives. In no case shall the
35.17"Made in Minnesota" incentive amount result in the "Made in Minnesota" incentives paid
35.18exceeding 40 percent, net of average applicable taxes on the ten-year incentive payments,
35.19of the average historic installation cost per kilowatt. The commissioner may exceed the 40
35.20percent cap if the commissioner determines it is necessary to fully expend funds available
35.21for incentive payments in a particular year.
35.22    Subd. 3. Metering of production. A utility or association must, at the expense of a
35.23customer, provide a meter to measure the production of a solar photovoltaic module
35.24system that is approved to receive incentive payments. The utility or association must
35.25furnish the commissioner with information sufficient for the commissioner to determine
35.26the incentive payment. The information must be provided on a calendar year basis by no
35.27later than March 1. The commissioner shall provide an association or utility with forms to
35.28use to provide the production information. A customer must attest to the accuracy of the
35.29production information.
35.30    Subd. 4. Payment due date. Payments must be made no later than July 1 following
35.31the year of production.
35.32    Subd. 5. Renewable energy credits. Renewable energy credits associated with
35.33energy provided to a utility or association for which an incentive payment is made belong
35.34to the utility or association.

36.1    Sec. 41. [216C.417] "MADE IN MINNESOTA" SOLAR ENERGY
36.2PRODUCTION INCENTIVE; PAYMENT.
36.3    Subdivision 1. Incentive payment. Incentive payments may be made under this
36.4section only to an owner of grid-connected solar photovoltaic modules with a total
36.5nameplate capacity below 40-kilowatts direct current who:
36.6(1) has submitted to the commissioner, on a form established by the commissioner,
36.7an application to receive the incentive that has been approved by the commissioner;
36.8(2) has received a "Made in Minnesota" certificate under section 216C.413 for
36.9the module; and
36.10(3) has installed on residential or commercial property solar photovoltaic modules
36.11that are generating electricity and has received a "Made in Minnesota" certificate under
36.12section 216C.413.
36.13    Subd. 2. Application process. Applications for an incentive payment must be
36.14received by the commissioner between January 1 and February 28. The commissioner
36.15shall by a random method approve the number of applications the commissioner
36.16reasonably determines will exhaust the funds available for payment for the ten-year period
36.17of incentive payments. Applications for residential and commercial installations shall be
36.18separately randomly approved. The random method adopted by the commissioner must
36.19allow for the commissioner to achieve statewide geographic distribution of the kilowatt
36.20hours of payment if there are sufficient applications to achieve that distribution.
36.21    Subd. 3. Commissioner approval of incentive application. The commissioner
36.22must approve an application for an incentive for an owner to be eligible for incentive
36.23payments. The commissioner must not approve an application in a calendar year if the
36.24commissioner determines there will not be sufficient funding available to pay an incentive
36.25to the applicant for any portion of the ten-year duration of payment. The commissioner
36.26shall annually establish a cap on the cumulative capacity for a program year based on
36.27funds available and historic average installation costs. Receipt of an incentive is not
36.28an entitlement and payment need only be made from available funds in the "Made in
36.29Minnesota" solar production incentive account.
36.30    Subd. 4. Eligibility window; payment duration. (a) Payments may be made under
36.31this section only for electricity generated from new solar photovoltaic module installations
36.32that are commissioned between January 1, 2014, and December 31, 2023.
36.33(b) The payment eligibility window of the incentive begins and runs consecutively
36.34from the date the solar system is commissioned.
37.1(c) An owner of solar photovoltaic modules may receive payments under this
37.2section for a particular module for a period of ten years provided that sufficient funds are
37.3available in the account.
37.4(d) No payment may be made under this section for electricity generated after
37.5December 31, 2033.
37.6(e) An owner of solar photovoltaic modules may not first begin to receive payments
37.7under this section after December 31, 2024.
37.8    Subd. 5. Allocation of payments. (a) If there are sufficient applications,
37.9approximately 50 percent of the incentive payment shall be for owners of eligible solar
37.10photovoltaic modules installed on residential property, and approximately 50 percent shall
37.11be for owners of eligible solar photovoltaic modules installed on commercial property.
37.12(b) The commissioner shall endeavor to geographically distribute incentives paid
37.13under this section to owners of solar photovoltaic modules installed throughout the state.
37.14(c) For purposes of this subdivision:
37.15(1) "residential property" means residential real estate that is occupied and used as a
37.16homestead by its owner or by a renter and includes "multifamily housing development"
37.17as defined in section 462C.02, subdivision 5, except that residential property on which
37.18solar photovoltaic modules (i) whose capacity exceeds 10 kilowatts is installed; or (ii)
37.19connected to a utility's distribution system and whose electricity is purchased by several
37.20residents, each of whom own a share of the electricity generated, shall be deemed
37.21commercial property; and
37.22(2) "commercial property" means real property on which is located a business,
37.23government, or nonprofit establishment.
37.24    Subd. 6. Limitation. An owner receiving an incentive payment under this section
37.25may not receive a rebate under section 116C.7791 for the same solar photovoltaic modules.

37.26    Sec. 42. Minnesota Statutes 2012, section 216C.436, subdivision 7, is amended to read:
37.27    Subd. 7. Repayment. An implementing entity that finances an energy improvement
37.28under this section must:
37.29(1) secure payment with a lien against the benefited qualifying real property; and
37.30(2) collect repayments as a special assessment as provided for in section 429.101
37.31or by charter, provided that special assessments may be made payable in up to 20 equal
37.32annual installments.
37.33If the implementing entity is an authority, the local government that authorized
37.34the authority to act as implementing entity shall impose and collect special assessments
38.1necessary to pay debt service on bonds issued by the implementing entity under subdivision
38.28, and shall transfer all collections of the assessments upon receipt to the authority.

38.3    Sec. 43. Minnesota Statutes 2012, section 216C.436, subdivision 8, is amended to read:
38.4    Subd. 8. Bond issuance; repayment. (a) An implementing entity may issue
38.5revenue bonds as provided in chapter 475 for the purposes of this section, provided the
38.6revenue bond must not be payable more than 20 years from the date of issuance.
38.7(b) The bonds must be payable as to both principal and interest solely from the
38.8revenues from the assessments established in subdivision 7.
38.9(c) No holder of bonds issued under this subdivision may compel any exercise of the
38.10taxing power of the implementing entity that issued the bonds to pay principal or interest
38.11on the bonds, and if the implementing entity is an authority, no holder of the bonds may
38.12compel any exercise of the taxing power of the local government. Bonds issued under
38.13this subdivision are not a debt or obligation of the issuer or any local government that
38.14issued them, nor is the payment of the bonds enforceable out of any money other than the
38.15revenue pledged to the payment of the bonds.

38.16    Sec. 44. Laws 2005, chapter 97, article 10, section 3, is amended to read:
38.17    Sec. 3. SUNSET.
38.18    Sections 1 and 2 shall expire on June 30, 2015 2023.

38.19    Sec. 45. STUDY OF POTENTIAL FOR SOLAR ENERGY INSTALLATIONS
38.20ON PUBLIC BUILDINGS.
38.21(a) The commissioner of commerce shall contract with an independent consultant
38.22selected through a request for proposal process to produce a report analyzing the potential
38.23for electricity generation resulting from the installation of solar photovoltaic devices on
38.24and adjacent to public buildings in this state. The study must:
38.25(1) determine, for buildings identified under the process initiated in Laws 2001,
38.26chapter 212, article 1, section 3, commonly referred to as the B3 program, the amount
38.27of space available for the installation of solar photovoltaic devices and the maximum
38.28solar electricity generation potential; and
38.29(2) utilize existing data on energy efficiency potential developed under the B3
38.30program and determine how investments in energy efficiency for these buildings could
38.31be combined with solar photovoltaic systems to enhance a building's overall energy
38.32efficiency. The analysis must include a schedule for installing solar photovoltaic systems
39.1on public buildings at a rate of four percent of available space per year and must prioritize
39.2installations that result in the largest benefits with the shortest payback periods.
39.3(b) By January 1, 2014, the commissioner of commerce shall submit a copy of the
39.4report to the chairs and ranking minority members of the legislative committees with
39.5primary jurisdiction over energy policy and state government finance.

39.6    Sec. 46. TRANSMISSION FOR FUTURE RENEWABLE ENERGY STANDARD.
39.7The commission shall order all Minnesota electric utilities, as defined in Minnesota
39.8Statutes, section 216B.1691, subdivision 1, paragraph (b), and all transmission companies,
39.9as defined in Minnesota Statutes, section 216B.02, to study and develop plans for the
39.10transmission network enhancements necessary to support increasing the renewable energy
39.11standard established in Minnesota Statutes, section 216B.1691, subdivision 2a, to 40
39.12percent by 2030, while maintaining system reliability.
39.13The Minnesota electric utilities and transmission companies must complete the
39.14study work under the direction of the commissioner of commerce. Prior to the start of the
39.15study, the commissioner shall appoint a technical review committee consisting of up to
39.1615 individuals with experience and expertise in electric transmission system engineering,
39.17electric power systems operations, and renewable energy generation technology to review
39.18the study's proposed methods and assumptions, ongoing work, and preliminary results.
39.19As part of the planning process, the Minnesota electric utilities and transmission
39.20companies must incorporate and build upon the analyses that have previously been done
39.21or that are in progress including but not limited to the 2006 Minnesota Wind Integration
39.22Study and ongoing work to address geographically dispersed development plans, the
39.232007 Minnesota Transmission for Renewable Energy Standard Study, the 2008 and 2009
39.24Statewide Studies of Dispersed Renewable Generation, the 2009 Minnesota RES Update,
39.25Corridor, and Capacity Validation Studies, the 2010 Regional Generation Outlet Study, the
39.262011 Multi Value Project Portfolio Study, and recent and ongoing Midwest Independent
39.27System Operator transmission expansion planning work. The utilities and transmission
39.28companies shall collaborate with the Midwest Independent System Operator to optimize
39.29and integrate, to the extent possible, Minnesota's transmission plans with other regional
39.30considerations and to encourage the Midwest Independent System Operator to incorporate
39.31Minnesota's planning work into its transmission expansion future planning.
39.32The study must be completed and submitted to the Minnesota Public Utilities
39.33Commission by December 1, 2013. The report shall include a description of the analyses
39.34that have been conducted and the results, including:
40.1(1) a conceptual plan for transmission necessary for generation interconnection and
40.2delivery and for access to regional geographic diversity and regional supply and demand
40.3side flexibility; and
40.4(2) identification and development of potential solutions to any critical issues
40.5encountered to support increasing the renewable energy standard to 40 percent by 2030
40.6while maintaining system reliability, as well as potential impacts and barriers of increasing
40.7the renewable energy standard to 45 percent and 50 percent.

40.8    Sec. 47. SOLAR INTERCONNECTION STUDY.
40.9Each public utility, cooperative association, and municipal utility selling electricity
40.10shall, by November 1, 2013, provide to the commissioner of commerce an assessment of the
40.11capacity available on its electric distribution system for interconnecting solar photovoltaic
40.12devices installed on or adjacent to nonresidential buildings in the utility's service area. For
40.13each such potential interconnection point, the utility must calculate the maximum capacity
40.14of solar photovoltaic devices that could be installed on or adjacent to nearby nonresidential
40.15buildings, the amount of available capacity that could be installed without upgrading the
40.16utility's distribution system, and the cost of the upgrade necessary to accommodate the
40.17installation of the maximum capacity and lesser amounts. The assessment must be in map
40.18format, must be updated annually, and must be made available to the public.

40.19    Sec. 48. VALUE OF ON-SITE ENERGY STORAGE STUDY.
40.20(a) The commissioner of commerce shall contract with an independent consultant
40.21selected through a request for proposal process to produce a report analyzing the potential
40.22costs and benefits of installing utility-managed, grid-connected energy storage devices in
40.23residential and commercial buildings in this state. The study must:
40.24(1) estimate the potential value of on-site energy storage devices as a
40.25load-management tool to reduce costs for individual customers and for the utility, including
40.26but not limited to reductions in energy, particularly peaking, costs, and capacity costs;
40.27(2) examine the interaction of energy storage devices with on-site solar photovoltaic
40.28devices; and
40.29(3) analyze existing barriers to the installation of on-site energy storage devices by
40.30utilities, and examine strategies and design potential economic incentives to overcome
40.31those barriers.
40.32(b) The commissioner of commerce shall assess an amount necessary under
40.33Minnesota Statutes, section 216B.241, subdivision 1e, for the purpose of completing the
40.34study described in this section.
41.1By January 1, 2014, the commissioner of commerce shall submit the study to the chairs
41.2and ranking minority members of the legislative committees with jurisdiction over energy
41.3policy and finance.

41.4    Sec. 49. VALUE OF SOLAR THERMAL STUDY.
41.5(a) The commissioner of commerce shall contract with an independent consultant
41.6selected through a request for proposal process to produce a report analyzing the potential
41.7costs and benefits of expanding the installation of solar thermal projects, as defined in
41.8Minnesota Statutes, section 216B.2411, subdivision 2, in residential and commercial
41.9buildings in this state. The study must examine the potential for solar thermal projects
41.10to reduce heating and cooling costs for individual customers and to reduce costs at the
41.11utility level as well. The study must also analyze existing barriers to the installation of
41.12on-site energy storage devices by utilities and examine strategies and design potential
41.13economic incentives to overcome those barriers. By January 1, 2014, the commissioner
41.14of commerce shall submit the study to the chairs and ranking minority members of the
41.15legislative committees with jurisdiction over energy policy and finance.
41.16(b) The commissioner of commerce shall assess an amount necessary under
41.17Minnesota Statutes, section 216B.241, subdivision 1e, for the purpose of completing the
41.18study described in this section.

41.19    Sec. 50. SEVERABILITY.
41.20If any provision of this act is found to be unconstitutional and void, the remaining
41.21provisions of this act are valid.
41.22EFFECTIVE DATE.This section is effective the day following final enactment.

41.23    Sec. 51. REPEALER.
41.24Minnesota Statutes 2012, section 216B.1637, is repealed.

41.25    Sec. 52. EFFECTIVE DATE.
41.26Sections 1 to 51 are effective the day following final enactment."