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Melissa J. Rahn

Melissa J. Rahn Government Relations

mrahn@fredlaw.com
612.492.7884
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Energy Legislation Adopted in Minnesota in 2009

By: MELISSA J. RAHN

September 2009

Minnesota’s looming budget deficit was the central issue on the mind of all legislators during the 2009 legislative session. Despite the $6.4 billion budget challenge, the legislature focused on investments in renewable energy, conservation, and green jobs.

The federal American Recovery and Reinvestment Act of 2009, otherwise known as the Stimulus Bill, was key to making appropriations of nearly $200 million in Minnesota.

Here are some of the important legislative changes and key appropriations adopted this year.

Federal Stimulus (Green Jobs) Bill


Weatherization and Energy Efficiency

The Federal Stimulus (Green Jobs) Bill (2009 Session Law Chapter 138; SF657) appropriates $131.9 million from federal stimulus funds for the weatherization of thousands of homes throughout Minnesota, creating jobs and reducing the amount of energy used by these homes. The legislature also appropriated $30 million of the federal stimulus money to improve energy efficiency in the state’s public buildings.

Renewable Energy Grants

Also included in the Federal Stimulus Bill is a $21 million grant for renewable energy projects that includes grants to local governments for renewable generation facilities and the installation of solar panels and wind turbines, as well as rebates for homeowners and businesses to make the installation of renewable facilities more affordable. The Department of Commerce and the Office of Energy Security will oversee the allocation process.

Renewable Development Fund


Renewable Energy Production Incentives

The Energy Policy Conference Committee Report (2009 Session Law Chapter 110; SF550) provides that $10.9 million of Renewable Development Fund (RDF) dollars remain available through 2021, to provide for Renewable Energy Incentive Payments for facilities that generate electricity from wind, hydropower, and on-farm biogas. The RDF is financed by Xcel Energy ratepayers.

Solar Energy

The Environment and Energy Finance Conference Committee Report (2009 Session Law Chapter 37; HF2123) included a one-time appropriation of $400,000 from the RDF for installation rebates for homeowners and businesses for solar equipment.

Clean Energy Resource Teams (CERTS)

The Clean Energy Resource Teams project was launched in 2003 and focuses on implementing community-scale energy efficiency and clean energy projects by connecting them with the technical resources they need to move forward. The legislature appropriated $1.25 million over the biennium from the RDF to support CERTS.

Wind Energy


Certificate of Need Exemption

Changes to the certificate of need for large energy facilities statute in the Energy Policy Conference Committee Report (2009 Session Law Chapter 110; SF550) remove the exemption from certificate of need requirements for C-BED projects and instead allow all wind energy conversion systems and solar electric generation facilities intended to meet the Renewable Energy Standard to make reasonableness filing with the Public Utilities Commission.

Emissions


Greenhouse Gas Emissions Registration

The legislature directed the Minnesota Pollution Control Agency to establish a greenhouse gas emissions registry and adopt rules regarding the monitoring and reporting of emissions and to limit emission of high global warming potential gases as part of the Energy Environment and Natural Resources Conference Committee Report (2009 Session Law Chapter 37; HF2123).

Green Pricing


Green Pricing

The “Green Pricing” statute was reinstated. It is no longer a mandate to require utilities to offer retail customers the option to purchase electricity generated from renewable sources. Instead, it is a voluntary program. In the new law, pricing is derived from the difference between 100 percent renewable and a mix of renewable and non-renewable. It also specifies that the definition of renewable energy for the purpose of green pricing does not include energy from combustion of mixed solid waste.

Community Based Energy Development (C‑BED)

Standardized Contracts

The Energy Policy Conference Committee Report (2009 Session Law Chapter 110; SF550) included a provision that requires standardized contracts for utilities subject to the Renewable Energy Standard for the purchase of wind, solar, and hydroelectric from projects 5 megawatts or less (not limited to C‑BED).

Changes in the Omnibus Public Finance Bill (Tax Policy Bill) (2009 Session Law Chapter 88; HF1298) require counties to enter into agreements for joint purchase of energy or joint acquisition of interests in C‑BED projects. If the county enters into a multi-year agreement, including C‑BED projects, the county may finance the estimated cost by issuing revenue bonds, including clean renewable energy bonds, if the annual debt service on all of the bonds issued, together with the amounts paid by the county for the purchase of energy in any year, do not exceed the project revenues.

Transmission


Eminent Domain

Due to changes in the Energy Policy Conference Committee Report (2009 Session Law Chapter 110; SF550), utilities using eminent domain for high-voltage transmission lines are subject to paying appraisal fees up to $3,000.

Annual Transmission Report

The Energy Policy Conference Committee Report (2009 Session Law Chapter 110; SF550) laid out a process for an annual transmission adequacy report to the Legislature. The Commissioner of Commerce, in consultation with the Public Utilities Commission, will submit a written report to the committees.

Legislative Energy Commission


Legislative Energy Commission

Established in 2008, the Legislative Energy Commission (LEC) was established to “evaluate the energy policies of this state and the degree to which they promote an environmentally and economically sustainable energy future.” It replaced the Legislative Electric Energy Task Force. While bills directing the LEC to perform certain studies did not become law, the LEC will be working during the interim to establish working groups, work with stakeholders, and develop legislative recommendations for the next session. This will be a commission to watch for anyone participating in Minnesota’s energy industry.