Minnesota House bill increases renewable portfolio standard

After a floor debate that ran until 11 p.m. on May 7, the Minnesota House of Representatives passed and sent to the state Senate a 40-page omnibus energy bill that includes a provision that would increase the state’s renewable portfolio standard (RPS) to 40% by the end of 2030, and would require utilities to study and plan the transmission upgrades needed to accommodate the increased standard.

House File (H.F.) 956, which was given its first reading in the state Senate May 8 and is now before the Senate Rules and Administration committee, would require that “each public utility shall generate or procure sufficient electricity generated by an eligible energy technology to provide at least 40% of the public utility’s total retail electric sales to retail customers in Minnesota.” Eligible energy technologies include solar, wind, hydropower generators of less than 100 MW, and hydrogen, provided that the hydrogen is generated from solar, wind or hydroelectric generation or from biomass.

The state’s current RPS calls for 20% renewable energy by 2020 from utilities in the state that did not own a nuclear generating facility as of Jan. 1, 2007, and 30% by 2020 for those utilities that did. The 30% requirement originally applied to Northern States Power Company, which is now a owned by Xcel Energy (NYSE:XEL), a spokesperson for the Minnesota Public Utilities Commission (PUC) told TransmissionHub May 8.

In addition, the bill would increase the requirement on all utilities to “generate or procure sufficient electricity generated by solar” resources to serve 0.5% of their retail customers by the end of 2016, 2% by the end of 2020, and 4% by the end of 2025. It further states that Minnesota’s “energy goal” is for 10% of retail electric sales to come from solar sources by the end of 2030.

To ensure that the larger amounts of energy are able to reach consumers without affecting system reliability, the bill requires the PUC to order all Minnesota electric utilities and all transmission companies “to study and develop plans for the network enhancements necessary to support increasing the renewable energy standard in Minnesota to 40% by 2030.”

As part of the planning process, those companies must “incorporate and build upon the analyses that have previously been done or that are in progress.” Specifically, the bill names the 2006 Minnesota Wind Integration study; the 2007 Minnesota Transmission for Renewable Energy Standard Study; the 2008 and 2009 Statewide Studies of Dispersed Renewable Generation; the 2009 Minnesota RES Update, Corridor, and Capacity Validation Studies; the 2010 Regional Generation Outlet Study; the 2011 Multi-Value Project Portfolio Study; and recent and ongoing MISO transmission expansion planning work.

The study, to be conducted under the direction of the commissioner of commerce, must be completed and submitted to the PUC by Nov. 1, 2014.

H.F. 956 also directs the PUC to arrange for three separate studies dealing with renewable energy generation and energy storage.

The first study will look at the potential for solar energy installations – specifically, photovoltaic devices – on or adjacent to public buildings in Minnesota. The second study will analyze the potential costs and benefits of installing utility-managed, grid-connected energy storage devices in residential and commercial buildings in this state, while the third study will analyze the potential costs and benefits of expanding the installation of solar thermal projects in residential and commercial buildings and the potential for such projects to reduce heating and cooling costs for individual customers and to reduce costs at the utility level as well.

The results of all three studies must be submitted to the chairs and ranking minority members of the legislative committees with primary jurisdiction over energy policy and state government finance by Jan. 1, 2014.

The house bill also includes language that would require that the Hollydale transmission project being proposed by Xcel Energy and Great River Energy be subject to a certificate of need (CoN) proceeding.

Under state law, projects of less than 10 miles in length or under 100-kV are not required to obtain a CoN. While the proposed project would upgrade an existing 69-kV transmission line to 115-kV and possibly modify the existing route as well, the original project plans called for a route of less than 10 miles, so the companies did not file a CoN application concurrently with the route permit application filed in 2011 (Docket No. 11-152).

However, some of the alternate routes subsequently identified when the state Department of Commerce issued its scoping decision on the project exceeded 10 miles, so the companies filed a CoN application in 2012 in the event that one of the longer alternatives was selected, according to the PUC spokesperson (Docket No. 12-113).

The bill as currently drafted would formalize the requirement for a CoN, require that it may be approved “only if the commission finds by clear and convincing evidence that there is no feasible, cost-effective, and available distribution level alternative to the transmission line,” and require that the CoN be issued before a route permit could be issued.

Only two weeks remain in the current legislative session. During that time, several state Senate committees and the full Senate must act on the bill, which would then be returned to conference committee to negotiate any differences that may arise from the Senate’s action.

In Minnesota, the state Legislature is constitutionally mandated to adjourn by May 20, or sooner if its work in completed.