Bill Text: MN SF1223 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Public utilities energy conservation improvement programs modifications
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2011-04-18 - Referred to Energy, Utilities and Telecommunications [SF1223 Detail]
Download: Minnesota-2011-SF1223-Introduced.html
1.2relating to energy; modifying provisions related to exemptions from conservation
1.3improvement programs;amending Minnesota Statutes 2010, sections 216B.2401;
1.4216B.241, subdivisions 1, 1a, 1b, 2.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 216B.2401, is amended to read:
1.7216B.2401 ENERGY CONSERVATION POLICY GOAL.
1.8 It is the energy policy of the state of Minnesota to achieve annual energy savings
1.9equal to 1.5 percent of annual retail energy sales of electricity and natural gas directly
1.10through customer-initiated conservation activities, energy conservation improvement
1.11programs and rate design, such as inverted block rates in which lower energy prices
1.12are made available to lower-usage residential customers, and indirectly through energy
1.13codes and appliance standards, programs designed to transform the market or change
1.14consumer behavior, energy savings resulting from efficiency improvements to the utility
1.15infrastructure and system, and other efforts to promote energy efficiency and energy
1.16conservation.
1.17 Sec. 2. Minnesota Statutes 2010, section 216B.241, subdivision 1, is amended to read:
1.18 Subdivision 1. Definitions. For purposes of this section and section216B.16,
1.19subdivision 6b , the terms defined in this subdivision have the meanings given them.
1.20 (a) "Commission" means the Public Utilities Commission.
1.21 (b) "Commissioner" means the commissioner of commerce.
1.22 (c) "Customer facility" means all buildings, structures, equipment, and installations
1.23at a single site.
2.1 (d) "Department" means the Department of Commerce.
2.2 (e) "Energy conservation" means demand-side management of energy supplies
2.3resulting in a net reduction in energy use. Load management that reduces overall energy
2.4use is energy conservation.
2.5 (f) "Energy conservation improvement" means a project that results in energy
2.6efficiency or energy conservation. Energy conservation improvement may include waste
2.7heat recovery converted into electricity but does not include electric utility infrastructure
2.8projects approved by the commission under section216B.1636 .
2.9 (g) "Energy efficiency" means measures or programs, including energy conservation
2.10measures or programs, that target consumer behavior, equipment, processes, or devices
2.11designed to produce either an absolute decrease in consumption of electric energy or
2.12natural gas or a decrease in consumption of electric energy or natural gas on a per unit
2.13of production basis without a reduction in the quality or level of service provided to
2.14the energy consumer.
2.15 (h) "Gross annual retail energy sales" means annual electric sales to all retail
2.16customers in a utility's or association's Minnesota service territory or natural gas
2.17throughput to all retail customers, including natural gas transportation customers, on a
2.18utility's distribution system in Minnesota. For purposes of this section, gross annual retail
2.19energy sales exclude gas sales to a large energy facility and gas and electric sales to a
2.20largeelectric energy customer facility exempted by the commissioner under subdivision
2.211a, paragraph (b).
2.22 (i) "Investments and expenses of a public utility" includes the investments and
2.23expenses incurred by a public utility in connection with an energy conservation
2.24improvement, including but not limited to:
2.25 (1) the differential in interest cost between the market rate and the rate charged on a
2.26no-interest or below-market interest loan made by a public utility to a customer for the
2.27purchase or installation of an energy conservation improvement;
2.28 (2) the difference between the utility's cost of purchase or installation of energy
2.29conservation improvements and any price charged by a public utility to a customer for
2.30such improvements.
2.31 (j) "Largeelectric energy customer facility" means a customer with a facility or
2.32facilities thatimposes impose a peak electrical demand on an electric utility's system of
2.33not less than20,000 10,000 kilowatts, measured in the same way as the utility that serves
2.34the customer facility or facilities measures electrical demand for billing purposes, and for
2.35which electric services are provided at retail on a single bill by a utility operating in the
3.1state or a customer with a facility or facilities that consume a peak gas demand on a gas
3.2utility's system of not less than 500,000 dekatherms annual consumption.
3.3 (k) "Large energy facility" has the meaning given it in section216B.2421 ,
3.4subdivision 2, clause (1).
3.5 (l) "Load management" means an activity, service, or technology to change the
3.6timing or the efficiency of a customer's use of energy that allows a utility or a customer to
3.7respond to wholesale market fluctuations or to reduce peak demand for energy or capacity.
3.8 (m) "Low-income programs" means energy conservation improvement programs
3.9that directly serve the needs of low-income persons, including low-income renters.
3.10 (n) "Waste heat recovery converted into electricity" means an energy recovery
3.11process that converts otherwise lost energy from the heat of exhaust stacks or pipes used
3.12for engines or manufacturing or industrial processes, or the reduction of high pressure
3.13in water or gas pipelines.
3.14 Sec. 3. Minnesota Statutes 2010, section 216B.241, subdivision 1a, is amended to read:
3.15 Subd. 1a. Investment, expenditure, and contribution; public utility. (a) For
3.16purposes of this subdivision and subdivision 2, "public utility" has the meaning given it
3.17in section216B.02, subdivision 4 . Each public utility shall spend and invest for energy
3.18conservation improvements under this subdivision and subdivision 2 the following
3.19amounts:
3.20 (1) for a utility that furnishes gas service, 0.5 percent of its gross operating revenues
3.21from service provided in the state;
3.22 (2) for a utility that furnishes electric service, 1.5 percent of its gross operating
3.23revenues from service provided in the state; and
3.24 (3) for a utility that furnishes electric service and that operates a nuclear-powered
3.25electric generating plant within the state, two percent of its gross operating revenues
3.26from service provided in the state.
3.27For purposes of this paragraph (a), "gross operating revenues" do not include revenues
3.28from largeelectric customer facilities energy customers exempted by the commissioner
3.29under paragraph (b).
3.30 (b)The owner of A large electric energy customer facility may petition file with the
3.31commissioner to exempt both electric and gas utilities serving the large energy customer
3.32facility from the investment and expenditure requirements of paragraph (a) with respect
3.33to retail revenues attributable to thefacility customer. At a minimum, The petition must
3.34be supported by evidence relating to filing must include a discussion of the competitive
3.35or economic pressures on the customer anda showing by the customer of reasonable
4.1of the efforts taken by the customer to identify, evaluate, and implement cost-effective
4.2conservation improvementsat the facility. If a petition is filed on or before October 1 of
4.3any year, the order of the commissioner to exempt revenues attributable to the facility can
4.4be effective no earlier than January 1 of the following year. The commissioner shall not
4.5grant an exemption if the commissioner determines that granting the exemption is contrary
4.6to the public interest. The commissioner may, after investigation, rescind any exemption
4.7granted under this paragraph upon a determination that the customer is not continuing
4.8to make reasonable efforts to identify, evaluate, and implement energy conservation
4.9improvements at the large electric customer facility. For the purposes of investigations by
4.10the commissioner under this paragraph, the owner of any large electric customer facility
4.11shall, upon request, provide the commissioner with updated information comparable to that
4.12originally supplied in or with the owner's original petition under this paragraph. Any such
4.13filing must be approved and become effective January 1 of the year following the filing. A
4.14large energy customer that is exempt from the investment and expenditure requirements of
4.15paragraph (a) under an order from the commissioner issued before the effective date of this
4.16section does not need to resubmit a petition to retain its exempt status. No exempt large
4.17energy customer may participate in a utility conservation improvement program unless the
4.18large energy customer files with the commissioner to withdraw its exemption.
4.19 (c) The commissioner may require investments or spending greater than the amounts
4.20required under this subdivision for a public utility whose most recent advance forecast
4.21required under section216B.2422 or
216C.17 projects a peak demand deficit of 100
4.22megawatts or greater within five years under midrange forecast assumptions.
4.23 (d) A public utilityor owner of a large electric customer facility may appeal
4.24a decision of the commissioner under paragraph(b) or (c) to the commission under
4.25subdivision 2. In reviewing a decision of the commissioner under paragraph(b) or (c),
4.26the commission shall rescind the decision if it finds that the required investments or
4.27spending will:
4.28 (1) not result in cost-effective energy conservation improvements; or
4.29 (2) otherwise not be in the public interest.
4.30 Sec. 4. Minnesota Statutes 2010, section 216B.241, subdivision 1b, is amended to read:
4.31 Subd. 1b. Conservation improvement by cooperative association or
4.32municipality. (a) This subdivision applies to:
4.33 (1) a cooperative electric association that provides retail service to its members;
4.34 (2) a municipality that provides electric service to retail customers; and
5.1 (3) a municipality with more than 1,000,000,000 cubic feet in annual throughput
5.2sales to natural gas to retail customers.
5.3 (b) Each cooperative electric association and municipality subject to this subdivision
5.4shall spend and invest for energy conservation improvements under this subdivision
5.5the following amounts:
5.6 (1) for a municipality, 0.5 percent of its gross operating revenues from the sale of
5.7gas and 1.5 percent of its gross operating revenues from the sale of electricity, excluding
5.8gross operating revenues from electric and gas service provided in the state to large
5.9electric customer facilities; and
5.10 (2) for a cooperative electric association, 1.5 percent of its gross operating revenues
5.11from service provided in the state, excluding gross operating revenues from service
5.12provided in the state to large electric customer facilities indirectly through a distribution
5.13cooperative electric association.
5.14 (c) Each municipality and cooperative electric association subject to this subdivision
5.15shall identify and implement energy conservation improvement spending and investments
5.16that are appropriate for the municipality or association, except that a municipality or
5.17association may not spend or invest for energy conservation improvements that directly
5.18benefit a large energy facility or a largeelectric energy customer facility for which the
5.19commissioner has issued an exemption exempted under subdivision 1a, paragraph (b).
5.20 (d) Each municipality and cooperative electric association subject to this subdivision
5.21may spend and invest annually up to ten percent of the total amount required to be spent
5.22and invested on energy conservation improvements under this subdivision on research
5.23and development projects that meet the definition of energy conservation improvement
5.24in subdivision 1 and that are funded directly by the municipality or cooperative electric
5.25association.
5.26 (e) Load-management activities may be used to meet 50 percent of the conservation
5.27investment and spending requirements of this subdivision.
5.28 (f) A generation and transmission cooperative electric association that provides
5.29energy services to cooperative electric associations that provide electric service at retail to
5.30consumers may invest in energy conservation improvements on behalf of the associations
5.31it serves and may fulfill the conservation, spending, reporting, and energy-savings goals on
5.32an aggregate basis. A municipal power agency or other not-for-profit entity that provides
5.33energy service to municipal utilities that provide electric service at retail may invest in
5.34energy conservation improvements on behalf of the municipal utilities it serves and may
5.35fulfill the conservation, spending, reporting, and energy-savings goals on an aggregate
6.1basis, under an agreement between the municipal power agency or not-for-profit entity
6.2and each municipal utility for funding the investments.
6.3 (g) Each municipality or cooperative shall file energy conservation improvement
6.4plans by June 1 on a schedule determined by order of the commissioner, but at least every
6.5three years. Plans received by June 1 must be approved or approved as modified by the
6.6commissioner by December 1 of the same year. The municipality or cooperative shall
6.7provide an evaluation to the commissioner detailing its energy conservation improvement
6.8spending and investments for the previous period. The evaluation must briefly describe
6.9each conservation program and must specify the energy savings or increased efficiency in
6.10the use of energy within the service territory of the utility or association that is the result of
6.11the spending and investments. The evaluation must analyze the cost-effectiveness of the
6.12utility's or association's conservation programs, using a list of baseline energy and capacity
6.13savings assumptions developed in consultation with the department. The commissioner
6.14shall review each evaluation and make recommendations, where appropriate, to the
6.15municipality or association to increase the effectiveness of conservation improvement
6.16activities.
6.17 (h) A municipality may spend up to 50 percent of its required spending under this
6.18section to refurbish an existing district heating or cooling system until July 1, 2007. From
6.19July 1, 2007, through June 30, 2011, expenditures made to refurbish a district heating or
6.20cooling system are considered to be load-management activities under paragraph (e). This
6.21paragraph expires July 1, 2011.
6.22 (i) The commissioner shall consider and may require a utility, association, or
6.23other entity providing energy efficiency and conservation services under this section to
6.24undertake a program suggested by an outside source, including a political subdivision,
6.25nonprofit corporation, or community organization.
6.26 Sec. 5. Minnesota Statutes 2010, section 216B.241, subdivision 2, is amended to read:
6.27 Subd. 2. Programs. (a) The commissioner may require public utilities to make
6.28investments and expenditures in energy conservation improvements, explicitly setting
6.29forth the interest rates, prices, and terms under which the improvements must be offered to
6.30the customers. The required programs must cover no more than a three-year period. Public
6.31utilities shall file conservation improvement plans by June 1, on a schedule determined by
6.32order of the commissioner, but at least every three years. Plans received by a public utility
6.33by June 1 must be approved or approved as modified by the commissioner by December
6.341 of that same year. The commissioner shall evaluate the program on the basis of
6.35cost-effectiveness and the reliability of technologies employed. The commissioner's order
7.1must provide to the extent practicable for a free choice, by consumers participating in the
7.2program, of the device, method, material, or project constituting the energy conservation
7.3improvement and for a free choice of the seller, installer, or contractor of the energy
7.4conservation improvement, provided that the device, method, material, or project seller,
7.5installer, or contractor is duly licensed, certified, approved, or qualified, including under
7.6the residential conservation services program, where applicable.
7.7 (b) The commissioner may require a utility to make an energy conservation
7.8improvement investment or expenditure whenever the commissioner finds that the
7.9improvement will result in energy savings at a total cost to the utility less than the cost
7.10to the utility to produce or purchase an equivalent amount of new supply of energy. The
7.11commissioner shall nevertheless ensure that every public utility operate one or more
7.12programs under periodic review by the department.
7.13 (c) Each public utility subject to subdivision 1a may spend and invest annually up to
7.14ten percent of the total amount required to be spent and invested on energy conservation
7.15improvements under this section by the utility on research and development projects
7.16that meet the definition of energy conservation improvement in subdivision 1 and that
7.17are funded directly by the public utility.
7.18 (d) A public utility may not spend for or invest in energy conservation improvements
7.19that directly benefit a large energy facility or a largeelectric energy customer facility for
7.20which the commissioner has issued an exemption exempted pursuant to subdivision 1a,
7.21paragraph (b). The commissioner shall consider and may require a utility to undertake
7.22a program suggested by an outside source, including a political subdivision, a nonprofit
7.23corporation, or community organization.
7.24 (e) A utility, a political subdivision, or a nonprofit or community organization
7.25that has suggested a program, the attorney general acting on behalf of consumers and
7.26small business interests, or a utility customer that has suggested a program and is not
7.27represented by the attorney general under section8.33 may petition the commission to
7.28modify or revoke a department decision under this section, and the commission may do
7.29so if it determines that the program is not cost-effective, does not adequately address the
7.30residential conservation improvement needs of low-income persons, has a long-range
7.31negative effect on one or more classes of customers, or is otherwise not in the public
7.32interest. The commission shall reject a petition that, on its face, fails to make a reasonable
7.33argument that a program is not in the public interest.
7.34 (f) The commissioner may order a public utility to include, with the filing of the
7.35utility's proposed conservation improvement plan under paragraph (a), the results of an
7.36independent audit of the utility's conservation improvement programs and expenditures
8.1performed by the department or an auditor with experience in the provision of energy
8.2conservation and energy efficiency services approved by the commissioner and chosen by
8.3the utility. The audit must specify the energy savings or increased efficiency in the use
8.4of energy within the service territory of the utility that is the result of the spending and
8.5investments. The audit must evaluate the cost-effectiveness of the utility's conservation
8.6programs.
1.3improvement programs;amending Minnesota Statutes 2010, sections 216B.2401;
1.4216B.241, subdivisions 1, 1a, 1b, 2.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 216B.2401, is amended to read:
1.7216B.2401 ENERGY CONSERVATION POLICY GOAL.
1.8 It is the energy policy of the state of Minnesota to achieve annual energy savings
1.9equal to 1.5 percent of annual retail energy sales of electricity and natural gas directly
1.10through customer-initiated conservation activities, energy conservation improvement
1.11programs and rate design, such as inverted block rates in which lower energy prices
1.12are made available to lower-usage residential customers, and indirectly through energy
1.13codes and appliance standards, programs designed to transform the market or change
1.14consumer behavior, energy savings resulting from efficiency improvements to the utility
1.15infrastructure and system, and other efforts to promote energy efficiency and energy
1.16conservation.
1.17 Sec. 2. Minnesota Statutes 2010, section 216B.241, subdivision 1, is amended to read:
1.18 Subdivision 1. Definitions. For purposes of this section and section
1.19subdivision 6b
1.20 (a) "Commission" means the Public Utilities Commission.
1.21 (b) "Commissioner" means the commissioner of commerce.
1.22 (c) "Customer facility" means all buildings, structures, equipment, and installations
1.23at a single site.
2.1 (d) "Department" means the Department of Commerce.
2.2 (e) "Energy conservation" means demand-side management of energy supplies
2.3resulting in a net reduction in energy use. Load management that reduces overall energy
2.4use is energy conservation.
2.5 (f) "Energy conservation improvement" means a project that results in energy
2.6efficiency or energy conservation. Energy conservation improvement may include waste
2.7heat recovery converted into electricity but does not include electric utility infrastructure
2.8projects approved by the commission under section
2.9 (g) "Energy efficiency" means measures or programs, including energy conservation
2.10measures or programs, that target consumer behavior, equipment, processes, or devices
2.11designed to produce either an absolute decrease in consumption of electric energy or
2.12natural gas or a decrease in consumption of electric energy or natural gas on a per unit
2.13of production basis without a reduction in the quality or level of service provided to
2.14the energy consumer.
2.15 (h) "Gross annual retail energy sales" means annual electric sales to all retail
2.16customers in a utility's or association's Minnesota service territory or natural gas
2.17throughput to all retail customers, including natural gas transportation customers, on a
2.18utility's distribution system in Minnesota. For purposes of this section, gross annual retail
2.19energy sales exclude gas sales to a large energy facility and gas and electric sales to a
2.20large
2.211a, paragraph (b).
2.22 (i) "Investments and expenses of a public utility" includes the investments and
2.23expenses incurred by a public utility in connection with an energy conservation
2.24improvement, including but not limited to:
2.25 (1) the differential in interest cost between the market rate and the rate charged on a
2.26no-interest or below-market interest loan made by a public utility to a customer for the
2.27purchase or installation of an energy conservation improvement;
2.28 (2) the difference between the utility's cost of purchase or installation of energy
2.29conservation improvements and any price charged by a public utility to a customer for
2.30such improvements.
2.31 (j) "Large
2.32facilities that
2.33not less than
2.34the customer facility or facilities measures electrical demand for billing purposes
2.35
3.1
3.2utility's system of not less than 500,000 dekatherms annual consumption.
3.3 (k) "Large energy facility" has the meaning given it in section
3.4subdivision 2, clause (1).
3.5 (l) "Load management" means an activity, service, or technology to change the
3.6timing or the efficiency of a customer's use of energy that allows a utility or a customer to
3.7respond to wholesale market fluctuations or to reduce peak demand for energy or capacity.
3.8 (m) "Low-income programs" means energy conservation improvement programs
3.9that directly serve the needs of low-income persons, including low-income renters.
3.10 (n) "Waste heat recovery converted into electricity" means an energy recovery
3.11process that converts otherwise lost energy from the heat of exhaust stacks or pipes used
3.12for engines or manufacturing or industrial processes, or the reduction of high pressure
3.13in water or gas pipelines.
3.14 Sec. 3. Minnesota Statutes 2010, section 216B.241, subdivision 1a, is amended to read:
3.15 Subd. 1a. Investment, expenditure, and contribution; public utility. (a) For
3.16purposes of this subdivision and subdivision 2, "public utility" has the meaning given it
3.17in section
3.18conservation improvements under this subdivision and subdivision 2 the following
3.19amounts:
3.20 (1) for a utility that furnishes gas service, 0.5 percent of its gross operating revenues
3.21from service provided in the state;
3.22 (2) for a utility that furnishes electric service, 1.5 percent of its gross operating
3.23revenues from service provided in the state; and
3.24 (3) for a utility that furnishes electric service and that operates a nuclear-powered
3.25electric generating plant within the state, two percent of its gross operating revenues
3.26from service provided in the state.
3.27For purposes of this paragraph (a), "gross operating revenues" do not include revenues
3.28from large
3.29under paragraph (b).
3.30 (b)
3.31commissioner to exempt both electric and gas utilities serving the large energy customer
3.32
3.33to retail revenues attributable to the
3.34
3.35or economic pressures on the customer and
4.1of the efforts taken by the customer to identify, evaluate, and implement cost-effective
4.2conservation improvements
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13filing must be approved and become effective January 1 of the year following the filing. A
4.14large energy customer that is exempt from the investment and expenditure requirements of
4.15paragraph (a) under an order from the commissioner issued before the effective date of this
4.16section does not need to resubmit a petition to retain its exempt status. No exempt large
4.17energy customer may participate in a utility conservation improvement program unless the
4.18large energy customer files with the commissioner to withdraw its exemption.
4.19 (c) The commissioner may require investments or spending greater than the amounts
4.20required under this subdivision for a public utility whose most recent advance forecast
4.21required under section
4.22megawatts or greater within five years under midrange forecast assumptions.
4.23 (d) A public utility
4.24a decision of the commissioner under paragraph
4.25subdivision 2. In reviewing a decision of the commissioner under paragraph
4.26the commission shall rescind the decision if it finds that the required investments or
4.27spending will:
4.28 (1) not result in cost-effective energy conservation improvements; or
4.29 (2) otherwise not be in the public interest.
4.30 Sec. 4. Minnesota Statutes 2010, section 216B.241, subdivision 1b, is amended to read:
4.31 Subd. 1b. Conservation improvement by cooperative association or
4.32municipality. (a) This subdivision applies to:
4.33 (1) a cooperative electric association that provides retail service to its members;
4.34 (2) a municipality that provides electric service to retail customers; and
5.1 (3) a municipality with more than 1,000,000,000 cubic feet in annual throughput
5.2sales to natural gas to retail customers.
5.3 (b) Each cooperative electric association and municipality subject to this subdivision
5.4shall spend and invest for energy conservation improvements under this subdivision
5.5the following amounts:
5.6 (1) for a municipality, 0.5 percent of its gross operating revenues from the sale of
5.7gas and 1.5 percent of its gross operating revenues from the sale of electricity, excluding
5.8gross operating revenues from electric and gas service provided in the state to large
5.9electric customer facilities; and
5.10 (2) for a cooperative electric association, 1.5 percent of its gross operating revenues
5.11from service provided in the state, excluding gross operating revenues from service
5.12provided in the state to large electric customer facilities indirectly through a distribution
5.13cooperative electric association.
5.14 (c) Each municipality and cooperative electric association subject to this subdivision
5.15shall identify and implement energy conservation improvement spending and investments
5.16that are appropriate for the municipality or association, except that a municipality or
5.17association may not spend or invest for energy conservation improvements that directly
5.18benefit a large energy facility or a large
5.19
5.20 (d) Each municipality and cooperative electric association subject to this subdivision
5.21may spend and invest annually up to ten percent of the total amount required to be spent
5.22and invested on energy conservation improvements under this subdivision on research
5.23and development projects that meet the definition of energy conservation improvement
5.24in subdivision 1 and that are funded directly by the municipality or cooperative electric
5.25association.
5.26 (e) Load-management activities may be used to meet 50 percent of the conservation
5.27investment and spending requirements of this subdivision.
5.28 (f) A generation and transmission cooperative electric association that provides
5.29energy services to cooperative electric associations that provide electric service at retail to
5.30consumers may invest in energy conservation improvements on behalf of the associations
5.31it serves and may fulfill the conservation, spending, reporting, and energy-savings goals on
5.32an aggregate basis. A municipal power agency or other not-for-profit entity that provides
5.33energy service to municipal utilities that provide electric service at retail may invest in
5.34energy conservation improvements on behalf of the municipal utilities it serves and may
5.35fulfill the conservation, spending, reporting, and energy-savings goals on an aggregate
6.1basis, under an agreement between the municipal power agency or not-for-profit entity
6.2and each municipal utility for funding the investments.
6.3 (g) Each municipality or cooperative shall file energy conservation improvement
6.4plans by June 1 on a schedule determined by order of the commissioner, but at least every
6.5three years. Plans received by June 1 must be approved or approved as modified by the
6.6commissioner by December 1 of the same year. The municipality or cooperative shall
6.7provide an evaluation to the commissioner detailing its energy conservation improvement
6.8spending and investments for the previous period. The evaluation must briefly describe
6.9each conservation program and must specify the energy savings or increased efficiency in
6.10the use of energy within the service territory of the utility or association that is the result of
6.11the spending and investments. The evaluation must analyze the cost-effectiveness of the
6.12utility's or association's conservation programs, using a list of baseline energy and capacity
6.13savings assumptions developed in consultation with the department. The commissioner
6.14shall review each evaluation and make recommendations, where appropriate, to the
6.15municipality or association to increase the effectiveness of conservation improvement
6.16activities.
6.17 (h) A municipality may spend up to 50 percent of its required spending under this
6.18section to refurbish an existing district heating or cooling system until July 1, 2007. From
6.19July 1, 2007, through June 30, 2011, expenditures made to refurbish a district heating or
6.20cooling system are considered to be load-management activities under paragraph (e). This
6.21paragraph expires July 1, 2011.
6.22 (i) The commissioner shall consider and may require a utility, association, or
6.23other entity providing energy efficiency and conservation services under this section to
6.24undertake a program suggested by an outside source, including a political subdivision,
6.25nonprofit corporation, or community organization.
6.26 Sec. 5. Minnesota Statutes 2010, section 216B.241, subdivision 2, is amended to read:
6.27 Subd. 2. Programs. (a) The commissioner may require public utilities to make
6.28investments and expenditures in energy conservation improvements, explicitly setting
6.29forth the interest rates, prices, and terms under which the improvements must be offered to
6.30the customers. The required programs must cover no more than a three-year period. Public
6.31utilities shall file conservation improvement plans by June 1, on a schedule determined by
6.32order of the commissioner, but at least every three years. Plans received by a public utility
6.33by June 1 must be approved or approved as modified by the commissioner by December
6.341 of that same year. The commissioner shall evaluate the program on the basis of
6.35cost-effectiveness and the reliability of technologies employed. The commissioner's order
7.1must provide to the extent practicable for a free choice, by consumers participating in the
7.2program, of the device, method, material, or project constituting the energy conservation
7.3improvement and for a free choice of the seller, installer, or contractor of the energy
7.4conservation improvement, provided that the device, method, material, or project seller,
7.5installer, or contractor is duly licensed, certified, approved, or qualified, including under
7.6the residential conservation services program, where applicable.
7.7 (b) The commissioner may require a utility to make an energy conservation
7.8improvement investment or expenditure whenever the commissioner finds that the
7.9improvement will result in energy savings at a total cost to the utility less than the cost
7.10to the utility to produce or purchase an equivalent amount of new supply of energy. The
7.11commissioner shall nevertheless ensure that every public utility operate one or more
7.12programs under periodic review by the department.
7.13 (c) Each public utility subject to subdivision 1a may spend and invest annually up to
7.14ten percent of the total amount required to be spent and invested on energy conservation
7.15improvements under this section by the utility on research and development projects
7.16that meet the definition of energy conservation improvement in subdivision 1 and that
7.17are funded directly by the public utility.
7.18 (d) A public utility may not spend for or invest in energy conservation improvements
7.19that directly benefit a large energy facility or a large
7.20
7.21paragraph (b). The commissioner shall consider and may require a utility to undertake
7.22a program suggested by an outside source, including a political subdivision, a nonprofit
7.23corporation, or community organization.
7.24 (e) A utility, a political subdivision, or a nonprofit or community organization
7.25that has suggested a program, the attorney general acting on behalf of consumers and
7.26small business interests, or a utility customer that has suggested a program and is not
7.27represented by the attorney general under section
7.28modify or revoke a department decision under this section, and the commission may do
7.29so if it determines that the program is not cost-effective, does not adequately address the
7.30residential conservation improvement needs of low-income persons, has a long-range
7.31negative effect on one or more classes of customers, or is otherwise not in the public
7.32interest. The commission shall reject a petition that, on its face, fails to make a reasonable
7.33argument that a program is not in the public interest.
7.34 (f) The commissioner may order a public utility to include, with the filing of the
7.35utility's proposed conservation improvement plan under paragraph (a), the results of an
7.36independent audit of the utility's conservation improvement programs and expenditures
8.1performed by the department or an auditor with experience in the provision of energy
8.2conservation and energy efficiency services approved by the commissioner and chosen by
8.3the utility. The audit must specify the energy savings or increased efficiency in the use
8.4of energy within the service territory of the utility that is the result of the spending and
8.5investments. The audit must evaluate the cost-effectiveness of the utility's conservation
8.6programs.
