On Saturday, June 13, Governor Dayton signed the 2015 Jobs and Energy Bill into Law. Our prior coverage of this bill can be found here and here. The following amendments were made after the Governor’s veto:
- New definitions for “propane,” “propane storage facility,” and “synthetic gas.”
- New net metering provision that applies to cooperative electric associations and municipal utilities. The vetoed version of the bill included a reference to a subdivision 3(f), which was omitted. The final version of the legislation includes the referenced subdivision 3(f), which provides a customer with a net metered facility having a capacity of less than 40 kW to be compensated for the customer’s net input into the utility’s system via a kWh bill credit.
- Continuation to the year 2017 of the Minnesota Department of Commerce’s ability to assess up to $1,000,000/year for regional and national duties under section 216A.07 subd. 3a.
- New obligation of the Minnesota Department of Commerce and Minnesota Pollution Control Agency to formally submit the draft state implementation plan for Clean Power Plan compliance to the legislature for review and comment.
- New authorization to the Minnesota Department of Commerce to assess up to $854,000 per biennium for reasonable costs it incurs in services it provides to implement the new energy-intensive, trade-exposed rate provision.
Funding for the Minnesota Department of Commerce appears to have been the big concern, which was set out in Governor Dayton’s veto letter. Moving forward, the three regulatory developments “to watch” in Minnesota are concepts that were first considered and discussed in the Minnesota e21 Initiative. Although not fully endorsed by all members to that effort, the statutory language authorized by the 2015 Jobs and Energy Bill on those issues can be summarized as follows:
- Regulatory Reform: The existing multi-year rate plan provision was revised to permit multi-year rate plan proposals up to five years in duration, during which the utility may be subject to reasonable performance measures and incentives, and as part of which the utility may propose: (1) recovery of its forecasted rate base; (2) recovery of O&M expenses; (3) tariffs that expand the products and services available to customers, including an affordability rate for low-income customers; and (4) MN PUC-approved adjustments for changes the MN PUC determines are just and reasonable, including changes in the utility’s cost of operating its nuclear facilities.
- Distribution Grid Planning: Utilities operating under a multi-year rate plan must engage in distribution system planning to (i) identify in a report those investments that are necessary to modernize the grid, enhance reliability, improve security against cyber and physical threats, and increase energy conservation; and (ii) identify in a study the interconnection points on its distribution system that are available for small-scale distributed generation resources and identify any necessary upgrades. The utility may recover the costs associated with this planning and any investments incident thereto.
- Competitive Rate Options for Energy-Intensive Trade-Exposed Customers: To achieve the policy objective of ensuring competitive electric rates for energy-intensive trade-exposed customers, certain utilities have the flexibility to offer those customers various rate options, including fixed rates, market-based rates, and rates to encourage utilization of new clean energy technology.