Energy and Telecommunications

PASSED AND SIGNED INTO LAW

Residential Property Assessed Clean Energy (PACE) program – SF 3245

The Legislature lifted a moratorium on the residential property-assessed clean energy (PACE) program and addressed concerns about consumer protections. The moratorium was enacted in 2017 until a task force could assess and recommend changes to the statutory language. This legislation evolved from the task force’s recommendations, which include:

  • Separation of commercial and residential PACE programs. Homeowners may finance energy efficiency improvements and solar panels via property tax bills.
  • PACE liens are made subordinate to a pre-existing (and first subsequent) mortgage. Safeguards against deceptive and unscrupulous practices that surfaced in California and Florida residential PACE programs are included.
  • Extra protections are provided for low-income homeowners to ensure they do not take on high-cost, long-term debt when loans with better terms become available.
  • The Minnesota Housing Finance Agency (MHFA) may coordinate with utilities for on-bill financing repayment. MHFA works with lenders to provide affordable home loans.
  • Eligible MHFA loan projects are expanded to include more energy efficient technologies, renewable energy, and energy storage systems.

Solar rewards program expansion – HF 3232

Solar energy systems up to 40 kilowatts are now eligible for solar production incentives under Xcel Energy’s Solar Rewards Program. As a result, capacity allowed under current law is doubled from 20 to 40 kilowatts and Xcel is allowed to count the additional production toward its solar energy standard for small solar. Unspent appropriations for the Solar Rewards Program at the end of the calendar year are made available for spending in the next year, with funds remaining after that rolled back to the Renewable Development Account.

 

DID NOT PASS 

Nuclear power plant cost recovery – SF 3504

The Legislature did not pass a controversial bill giving Xcel Energy the ability to recover costs for its two nuclear power plants outside of a general rate case proceeding. According to the plan that passed the Senate, Xcel would submit proposals to the Public Utilities Commission (PUC) designating each of its nuclear power plants (the dual-unit Prairie Island plant and the single-unit Monticello plant) as a “carbon-reduction” facility. As part of the process, Xcel would include a proposed statement of total expected costs, including capital investments and operation and maintenance costs associated with operation. The PUC would then approve or reject the total expected costs. Xcel Energy argued that the bill would provide greater certainty about recovery of its nuclear power-related expenses as it updates its nuclear power plants. Opponents argued that it would deny public input and erode the PUC process.

 

VETOED

Supplemental budget – SF 3656

The budget appropriates no new general fund revenue for energy and telecommunications expenditures. It includes the following provisions:

  • Nuclear waste cask payments.Places a cap on Xcel Energy’s annual nuclear waste cask payments. The cap is set at $23 million for 2019, $28 million for 2020, $28 million for 2021, and $20 million per year in 2022 and thereafter.
  • Energy storage.Appropriates $150,000 from the renewable development account to cover claims made by investor-owned utilities who petition the PUC to recover the costs of implementing an energy storage system pilot project.
  • Electronic data tracking.Directs the commerce commissioner to establish a utility stakeholder group to direct development and maintenance of a uniform electronic data tracking system. The system would be available to all utilities to enable accurate measurement of the cost and energy savings of conservation improvements required by law.
  • Solar for schools.Appropriates $2 million for a Commerce Department program that awards grants to school districts for the design, purchase, and installation of solar energy systems on their facilities.
  • Public utility pension rate recovery.Directs the PUC to allow public utilities to include certain excess pension-related costs in the rate base, with recovery of these costs from ratepayers.
  • Prairie Island Net Zero project.Awards $45 million from the renewable development account over six years to the Prairie Island Indian Community to become a net-zero energy community. Net-zero communities offset their total consumed energy with an equal amount of renewable energy generated through projects such as solar or wind, and programs that reduce and conserve energy in homes, businesses, and buildings.
  • Biomass business compensation.Sets up a compensation claims process financed by $40 million from the renewable development fund in FY 2019 to ease the transition for businesses impacted by the closure of the biomass facility in Benson.
  • Excavation notice system.Requires operators to furnish the system notification center known as “Gopher One” with accurate contact information necessary for underground facility damage prevention and damage response. Contact information for each affected operator must be made available to excavators that provide notice under the law.
  • Utility grid assessment.Extends the utility grid assessment until June 30, 2019. It was scheduled to expire June 30, 2018.

Enbridge Line 3 pipeline replacement project – HF 3759

Governor Dayton vetoed legislation that allows Enbridge Energy, at its sole discretion, the ability to construct, own, and operate the pipeline and associated facilities along the route proposed in its applications. The bill would have terminated proceedings of the PUC immediately upon enactment. The Line 3 project is nearing the end of a three-year regulatory process. A final PUC decision on whether the project will advance is expected this June.

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