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HF 7

Minnesota House•Introduced

Summary

HF 7, “Energy finance and policy bill”, was introduced in the House on Jun 9, 2025 by Rep. Patty Acomb (D). It last saw action on Jun 9, 2025: Introduction and first reading.

Record

Text

HF 7 has no co-sponsors and has not gone to a roll call.

hf7/introduced.txt
06/04/25   REVISOR  RSI/NS  25-05688
This Document can be made available
in alternative formats upon request  State of Minnesota
  HOUSE OF REPRESENTATIVES
  SPECIAL SESSION
  H. F. No.  7
06/09/2025     Authored by Acomb
  The bill was read for the first time
A bill for an act
relating to energy; appropriating and transferring money for energy and renewable
development account programs and activities; modifying, modernizing, and making
technical changes to various provisions governing energy policy; authorizing
natural gas utilities to sell extraordinary event bonds under certain circumstances;
amending Minnesota Statutes 2024, sections 116C.7792; 216B.16, subdivisions
7b, 14, 15, by adding a subdivision; 216B.2402, subdivision 16; 216B.2421,
subdivision 2; 216B.62, subdivision 3, by adding a subdivision; 216C.09; 216C.10;
216C.11; 216C.12; 216C.391, subdivisions 1, 2, 3; 216C.47, subdivision 1; Laws
2023, chapter 60, article 10, section 2, subdivision 2, as amended; article 11,
sections 2, subdivision 3; 3; Laws 2024, chapter 126, article 6, section 53; proposing
coding for new law in Minnesota Statutes, chapter 216B.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
CLIMATE AND ENERGY FINANCE
Section 1. APPROPRIATIONS.
The sums shown in the columns marked "Appropriations" are appropriated to the agencies
and for the purposes specified in this article. The appropriations are from the general fund,
or another named fund, and are available for the fiscal years indicated for each purpose.
The figures "2026" and "2027" used in this article mean that the appropriations listed under
them are available for the fiscal year ending June 30, 2026, or June 30, 2027, respectively.
"The first year" is fiscal year 2026. "The second year" is fiscal year 2027. "The biennium"
is fiscal years 2026 and 2027. If an appropriation in this article is enacted more than once
in the 2025 regular or a special legislative session, the appropriation must be given effect
only once.
APPROPRIATIONS
Available for the Year
Article 1 Section 1.  1
06/04/25   REVISOR  RSI/NS  25-05688
Ending June 30
2026  2027
  Sec. 2. DEPARTMENT OF COMMERCE
  Subdivision 1. Total Appropriation  $   12,644,000 $   12,644,000
Appropriations by Fund
2026  2027
  General  11,047,000     11,047,000
  Petroleum Tank  1,597,000      1,597,000
  The amounts that may be spent for each
 purpose are specified in the following
 subdivisions.
 Subd. 2. Energy Resources  11,047,000       11,047,000
 (a) $150,000 the first year and $150,000 the
 second year are to remediate vermiculite
 insulation from households that are eligible
 for weatherization assistance under
 Minnesota's weatherization assistance program
 state plan under Minnesota Statutes, section
 216C.264. Remediation must be performed in
 conjunction with federal weatherization
 assistance program services.
 (b) $189,000 each year is for activities
 associated with a utility's implementation of
 a natural gas innovation plan under Minnesota
 Statutes, section 216B.2427.
 (c) $500,000 each year is for a grant to the
 clean energy resource teams under Minnesota
 Statutes, section 216C.385, subdivision 2, to
 provide additional capacity to perform the
 duties specified under Minnesota Statutes,
 section 216C.385, subdivision 3. This
 appropriation may be used to reimburse
 reasonable costs incurred by the Department
 of Commerce to administer the grant.
Article 1 Sec. 2.  2
06/04/25   REVISOR  RSI/NS  25-05688
  (d) $301,000 each year is to implement energy
  benchmarking under Minnesota Statutes,
  section 216C.331.
  (e) $164,000 each year is for activities
  associated with a public utility's transportation
  electrification plan filing under Minnesota
  Statutes, section 216B.1615.
  (f) $77,000 each year is for activities
  associated with appeals of consumer
 complaints to the commission under
 Minnesota Statutes, section 216B.172.
 (g) $961,000 each year is for activities
 required under Minnesota Statutes, section
 216B.1641, for community solar gardens. This
 appropriation must be assessed directly to the
 public utility subject to Minnesota Statutes,
 section 116C.779.
 (h) $46,000 each year is for work to align
 energy transmission and distribution planning
 activities with opportunities along trunk
 highway rights-of-way.
 (i) $265,000 each year is to (1) participate in
 a Public Utilities Commission proceeding to
 review electric transmission line owners' plans
 to deploy grid-enhancing technologies, and
 (2) issue an order to implement the plans. The
 base in fiscal year 2028 is $0.
 The general fund base is $10,782,000 in fiscal
 year 2028 and $10,782,000 in fiscal year 2029.
 Subd. 3. Petroleum Tank Release Compensation
 Board  1,597,000       1,597,000
 This appropriation is from the petroleum tank
 fund.
 Sec. 3. PUBLIC UTILITIES COMMISSION  $   13,330,000 $   13,417,000
Article 1 Sec. 3.  3
06/04/25   REVISOR  RSI/NS  25-05688
  The general fund base is $13,183,000 in fiscal
  year 2028 and later.
    Sec. 4. Laws 2023, chapter 60, article 10, section 2, subdivision 2, as amended by Laws
  2024, chapter 126, article 6, section 47, is amended to read:
  Subd. 2. Energy Resources  96,083,000       27,617,000
  (a) $5,861,000 the first year and $6,038,000
  the second year are to the division of energy
  resources for operating expenses.
  (b) $150,000 the first year and $150,000 the
 second year are to remediate vermiculite
 insulation from households that are eligible
 for weatherization assistance under
 Minnesota's weatherization assistance program
 state plan under Minnesota Statutes, section
 216C.264. Remediation must be done in
 conjunction with federal weatherization
 assistance program services.
 (c) $1,138,000 in the first year is transferred
 from the general fund to the solar for schools
 program account under Minnesota Statutes,
 section 216C.375, to provide financial
 assistance to schools that are state colleges
 and universities to purchase and install solar
 energy generating systems. This appropriation
 must be expended on schools located outside
 the electric service territory of the public
 utility that is subject to Minnesota Statutes,
 section 116C.779. Money under this paragraph
 is available until June 30, 2034. Any money
 remaining on June 30, 2034, cancels to the
 general fund.
 (d) $189,000 each year is for activities
 associated with a utility's implementation of
Article 1 Sec. 4.  4
06/04/25   REVISOR   RSI/NS   25-05688
  a natural gas innovation plan under Minnesota
  Statutes, section 216B.2427.
  (e) $15,000,000 in the first year is transferred
  from the general fund to the solar for schools
  program account in the special revenue fund
  for grants under the solar for schools program
  established under Minnesota Statutes, section
  216C.375. The money under this paragraph
  must be expended on schools located outside
 the electric service territory of the public
 utility that is subject to Minnesota Statutes,
 section 116C.779.
 (f) $500,000 each year is for the strengthen
 Minnesota homes program under Minnesota
 Statutes, section 65A.299, subdivision 4.
 Money under this paragraph is transferred
 from the general fund to strengthen Minnesota
 homes account in the special revenue fund.
 This is a onetime appropriation.
 (g) $20,000,000 the first year and $18,737,000
 the second year are for weatherization and
 preweatherization work to serve additional
 households and allow for services that would
 otherwise be denied due to current federal
 limitations related to the federal weatherization
 assistance program. Money under this
 paragraph is transferred from the general fund
 to the preweatherization account in the special
 revenue fund under Minnesota Statutes,
 section 216C.264, subdivision 1c. The base
 in fiscal years 2026 and later is $3,199,000.
 (h) $15,000,000 the first year is for a grant to
 an investor-owned electric utility that has at
 least 50,000 retail electric customers, but no
 more than 200,000 retail electric customers,
Article 1 Sec. 4.  5
06/04/25   REVISOR   RSI/NS   25-05688
  to increase the capacity and improve the
  reliability of an existing high-voltage direct
  current transmission line that runs between
  North Dakota and Minnesota. This is a
  onetime appropriation and must be used to
  support the cost-share component of a federal
  grant application to a program enacted in the
  federal Infrastructure Investment and Jobs Act,
  Public Law 117-58, and may otherwise be
 used to reduce the cost of the high-voltage
 direct current transmission project upgrade
 and to reimburse the reasonable costs incurred
 by the department to administer the grant. This
 appropriation is available until June 30, 2034.
 (i) $300,000 the first year is for technical
 assistance and administrative support for the
 Tribal Advocacy Council on Energy under
 article 12, section 71. As part of the technical
 assistance and administrative support for the
 program, the commissioner must hire a Tribal
 liaison to support the Tribal Advocacy Council
 on Energy and advise the department on the
 development of a culturally responsive clean
 energy grants program based on the priorities
 identified by the Tribal Advocacy Council on
 Energy.
 (j) $3,000,000 the first year is for a grant to
 Clean Energy Economy Minnesota for the
 Minnesota Energy Alley initiative to secure
 the state's energy and economic development
 future. The appropriation may be used to
 establish and support the initiative, provide
 seed funding for businesses, develop a training
 and development program, support recruitment
 of entrepreneurs to Minnesota, and secure
Article 1 Sec. 4.  6
06/04/25   REVISOR   RSI/NS   25-05688
  funding from federal programs and corporate
  partners to establish a self-sustaining,
  long-term revenue model. This appropriation
  may be used to reimburse the reasonable costs
  incurred by the department to administer the
  grant. This is a onetime appropriation and is
  available until June 30, 2027.
  (k) $5,000,000 the first year is transferred to
  the electric vehicle rebate program account to
 award rebates to purchase or lease eligible
 electric vehicles under Minnesota Statutes,
 section 216C.401. Rebates must be awarded
 under this paragraph only to eligible recipients
 located outside the retail electric service area
 of the public utility that is subject to
 Minnesota Statutes, section 116C.779. This is
 a onetime appropriation and is available until
 June 30, 2027.
 (l) $1,000,000 the first year is to award grants
 under Minnesota Statutes, section 216C.402,
 to automobile dealers seeking certification to
 sell electric vehicles and to reimburse the
 reasonable costs incurred by the department
 to administer the grants. Grants must only be
 awarded under this paragraph to eligible
 dealers located outside the retail electric
 service area of the public utility that is subject
 to Minnesota Statutes, section 116C.779. This
 is a onetime appropriation and is available
 until June 30, 2027.
 (m) $3,000,000 the first year is transferred to
 the residential electric panel upgrade grant
 program account established under Minnesota
 Statutes, section 216C.45, to award electric
 panel upgrade grants and to reimburse the
Article 1 Sec. 4.  7
06/04/25   REVISOR   RSI/NS   25-05688
  reasonable costs incurred by the department
  to administer the program. Grants must be
  awarded under this paragraph only to owners
  of single-family homes or multifamily
  buildings located outside the electric service
  area of the public utility subject to Minnesota
  Statutes, section 116C.779. This is a onetime
  appropriation and is available until June 30,
  2027.
 (n) $500,000 the first year and $500,000 the
 second year are for a grant to the clean energy
 resource teams partnerships under Minnesota
 Statutes, section 216C.385, subdivision 2, to
 provide additional capacity to perform the
 duties specified under Minnesota Statutes,
 section 216C.385, subdivision 3. This
 appropriation may be used to reimburse the
 reasonable costs incurred by the department
 to administer the grant.
 (o) $1,807,000 the first year and $301,000 the
 second year are to implement energy
 benchmarking under Minnesota Statutes,
 section 216C.331.
 Of the amount appropriated under this
 paragraph, $750,000 the first year is to award
 grants to qualifying utilities that are not
 investor-owned utilities to support the
 development of technology for implementing
 energy benchmarking under Minnesota
 Statutes, section 216C.331. This is a onetime
 appropriation.
 Of the amount appropriated in the first year
 under this paragraph, $756,000 the first year
 is for a grant to Building Owners and
 Managers Association Greater Minneapolis
Article 1 Sec. 4.  8
06/04/25   REVISOR   RSI/NS   25-05688
  to establish partnerships with three technical
  colleges and high school career counselors
  with a goal of increasing the number of
  building engineers across Minnesota. This is
  a onetime appropriation and is available until
  June 30, 2028. The grant recipient must
  provide a detailed report describing how the
  grant funds were used to the chairs and
  ranking minority members of the legislative
 committees having jurisdiction over higher
 education by January 15 of each year until
 2028. The report must describe the progress
 made toward the goal of increasing the number
 of building engineers and strategies used.
 (p) $500,000 the first year is for a feasibility
 study to identify and process Minnesota iron
 resources that could be suitable for upgrading
 to long-term battery storage specifications.
 The results of the feasibility study must be
 submitted to the commissioner of commerce
 and to the chairs and ranking minority
 members of the house of representatives and
 senate committees with jurisdiction over
 energy policy no later than November 1, 2025.
 This appropriation may be used to reimburse
 the reasonable costs incurred to administer the
 study. This is a onetime appropriation.
 (q) $6,000,000 the first year is for electric
 school bus grants under Minnesota Statutes,
 section 216C.374. Money under this paragraph
 is transferred from the general fund to the
 electric school bus program account. This is
 a onetime appropriation.
 (r) $5,300,000 the first year is for electric grid
 resiliency grants under article 12, section 72.
Article 1 Sec. 4.  9
 06/04/25   REVISOR   RSI/NS   25-05688
  This appropriation may be used to reimburse
  the reasonable costs incurred by the
  department to administer the grants. This is a
  onetime appropriation and is available until
  June 30, 2028.
  (s) $6,000,000 the first year is transferred to
  the heat pump rebate program account
  established under Minnesota Statutes, section
  216C.46, to implement the heat pump rebate
 program and to reimburse the reasonable costs
 incurred by the department to administer the
 program. Of this amount:
 (1) up to $1,400,000 the first year is to
 contract with an energy coordinator under
 Minnesota Statutes, section 216C.46,
 subdivision 5; and
 (2) up to $1,400,000 the first year is to conduct
 contractor training and support under
 Minnesota Statutes, section 216C.46,
 subdivision 6.
 (t) $1,000,000 the first year is to award air
 ventilation pilot program grants under
 Minnesota Statutes, section 123B.663, for
 assessments, testing, and equipment upgrades
 in schools, and for the department's costs to
 administer the program. Money under this
 paragraph is transferred from the general fund
 to the air ventilation program account. This is
 a onetime appropriation.
 (u) $500,000 the first year is for a grant to the
 city of Anoka for feasibility studies as
 described in this paragraph and design,
 engineering, and environmental analysis
 related to the repair and reconstruction of the
 Article 1 Sec. 4.  10
 06/04/25   REVISOR   RSI/NS   25-05688
  Rum River Dam. Findings from the feasibility
  studies must be incorporated into the design
  and engineering funded by this appropriation.
  This appropriation is onetime and is available
  until June 30, 2027. This appropriation
  includes money for the following studies: (1)
  a study to assess the feasibility of adding a
  lock or other means for boats to traverse the
  dam to navigate between the lower Rum River
 and upper Rum River; (2) a study to assess
 the feasibility of constructing the dam in a
 manner that would facilitate recreational river
 surfing at the dam site; and (3) a study to
 assess the feasibility of constructing the dam
 in a manner to generate hydroelectric power.
 (v) $3,000,000 the first year is for grants to
 install on-site energy storage systems, as
 defined in Minnesota Statutes, section
 216B.2422, subdivision 1, paragraph (f), with
 a capacity of 50 kilowatt hours or less and that
 are located outside the electric service area of
 the electric utility subject to Minnesota
 Statutes, section 116C.779. To receive a grant
 under this paragraph, an owner of the energy
 storage system must be operating a solar
 energy generating system at the same site as
 the energy storage system or have filed an
 application with a utility to interconnect a solar
 energy generating system at the same site as
 the energy storage system. This appropriation
 may be used to reimburse the reasonable costs
 incurred by the department to administer the
 grants. This is a onetime appropriation and is
 available until June 30, 2027.
 Article 1 Sec. 4.  11
 06/04/25   REVISOR  RSI/NS  25-05688
  (w) $164,000 the second year is for activities
  associated with a public utility's filing a
  transportation electrification plan under
  Minnesota Statutes, section 216B.1615. The
  base in fiscal year 2026 and later is $164,000.
  (x) $77,000 each year is for activities
  associated with appeals of consumer
  complaints to the commission under
  Minnesota Statutes, section 216B.172.
 (y) $961,000 each year is for activities
 required under Minnesota Statutes, section
 216B.1641 for community solar gardens. This
 appropriation must be assessed directly to the
 public utility subject to Minnesota Statutes,
 section 116C.779.
 (z) $300,000 the first year is for the
 community solar garden program study
 required under article 12, section 73.
     EFFECTIVE DATE. This section is effective the day following final enactment.
   Sec. 5. TRANSFERS.
     $1,199,000 in fiscal year 2026 and $1,199,000 in fiscal year 2027 are transferred from
 the general fund to the preweatherization account in the special revenue fund under Minnesota
 Statutes, section 216C.264, subdivision 1c. The commissioner of management and budget
 must include a transfer of $1,199,000 each year from the general fund to the
 preweatherization account in the special revenue fund in each forecast prepared under
 Minnesota Statutes, section 16A.103, from the effective date of this section through the
 February 2027 forecast.
ARTICLE 2
RENEWABLE DEVELOPMENT ACCOUNT APPROPRIATIONS
 Section 1. RENEWABLE DEVELOPMENT FINANCE.
     The sums shown in the columns marked "Appropriations" are appropriated to the agencies
 and for the purposes specified in this article. Notwithstanding Minnesota Statutes, section
 116C.779, subdivision 1, paragraph (j), the appropriations are from the renewable
 Article 2 Section 1.  12
 06/04/25   REVISOR  RSI/NS  25-05688
  development account in the special revenue fund established in Minnesota Statutes, section
  116C.779, subdivision 1, and are available for the fiscal years indicated for each purpose.
  The figures "2026" and "2027" used in this article mean that the appropriations listed under
  them are available for the fiscal year ending June 30, 2026, or June 30, 2027, respectively.
  "The first year" is fiscal year 2026. "The second year" is fiscal year 2027. "The biennium"
  is fiscal years 2026 and 2027. If an appropriation in this article is enacted more than once
  in the 2025 regular or special legislative session, the appropriation must be given effect
  only once.
APPROPRIATIONS
Available for the Year
Ending June 30
2026  2027
 Sec. 2. DEPARTMENT OF COMMERCE
 Subdivision 1. Total Appropriation  $       500,000 $  100,000
 The amounts that may be spent for each
 purpose are specified in the following
 subdivisions.
 Subd. 2. "Made in Minnesota" Administration
 $100,000 each year is to administer the "Made
 in Minnesota" solar energy production
 incentive program under Minnesota Statutes,
 section 216C.417. Any unobligated amount
 remaining on June 30, 2027, cancels to the
 renewable development account.
 Subd. 3. Microgrid Research and Application
 $400,000 the first year is for a grant to the
 University of St. Thomas Center for Microgrid
 Research, which must be used to:
 (1) increase the center's capacity to provide
 industry partners with opportunities to test
 near-commercial microgrid products on a
 real-world scale and to multiply opportunities
 for innovative research;
 Article 2 Sec. 2.  13
 06/04/25   REVISOR  RSI/NS  25-05688
  (2) procure advanced equipment and controls
  to enable the extension of the university's
  microgrid to additional buildings; and
  (3) expand (i) hands-on educational
  opportunities for undergraduate and graduate
  electrical engineering students to increase
  understanding of microgrid operations, and
  (ii) partnerships with community colleges.
  Sec. 3. DEPARTMENT OF
 ADMINISTRATION  $      92,000 $  92,000
 $92,000 each year is for software and
 administrative costs associated with the state
 building energy conservation improvement
 revolving loan program under Minnesota
 Statutes, section 16B.87.
   Sec. 4. Laws 2023, chapter 60, article 11, section 2, subdivision 3, is amended to read:
 Subd. 3. Microgrid Research and Application
 (a) $3,000,000 the first year and $400,000 the
 second year are for a grant to the University
 of St. Thomas Center for Microgrid Research
 for the purposes of paragraph (b). The base in
 fiscal year 2026 is $400,000 and $0 in fiscal
 year 2027. Notwithstanding Minnesota
 Statutes, section 16A.28, this appropriation is
 available until June 30, 2027.
 (b) The appropriations in this subdivision must
 be used by the University of St. Thomas
 Center for Microgrid Research to:
 (1) increase the center's capacity to provide
 industry partners opportunities to test
 near-commercial microgrid products on a
 real-world scale and to multiply opportunities
 for innovative research;
 Article 2 Sec. 4.  14
 06/04/25   REVISOR  RSI/NS  25-05688
  (2) procure advanced equipment and controls
  to enable the extension of the university's
  microgrid to additional buildings; and
  (3) expand (i) hands-on educational
  opportunities for undergraduate and graduate
  electrical engineering students to increase
  understanding of microgrid operations, and
  (ii) partnerships with community colleges.
  (c) $4,100,000 the first year is for a grant to
 the University of St. Thomas Center for
 Microgrid Research for capacity building and
 matching requirements as a condition of
 receiving federal funds. This appropriation is
 available until June 30, 2027.
     EFFECTIVE DATE. This section is effective the day following final enactment.
   Sec. 5. Laws 2023, chapter 60, article 11, section 3, is amended to read:
 Sec. 3. MINNESOTA AMATEUR SPORTS
 COMMISSION  $  -0- $      4,200,000
 $4,200,000 the second year is to install solar
 arrays on an ice rink and a maintenance
 facility at the National Sports Center in Blaine.
 This is a onetime appropriation.
 Notwithstanding Minnesota Statutes, section
 16A.28, this appropriation is available until
 June 30, 2027.
     EFFECTIVE DATE. This section is effective the day following final enactment.
ARTICLE 3
ENERGY POLICY
   Section 1. Minnesota Statutes 2024, section 116C.7792, is amended to read:
     116C.7792 SOLAR ENERGY PRODUCTION INCENTIVE PROGRAM.
     (a) The utility subject to section 116C.779 shall operate a program to provide solar
 energy production incentives for solar energy systems of no more than a total aggregate
 Article 3 Section 1.  15
 06/04/25   REVISOR  RSI/NS  25-05688
  nameplate capacity of 40 kilowatts alternating current per premise. The owner of a solar
  energy system installed before June 1, 2018, is eligible to receive a production incentive
  under this section for any additional solar energy systems constructed at the same customer
  location, provided that the aggregate capacity of all systems at the customer location does
  not exceed 40 kilowatts.
      (b) The program is funded by money withheld from transfer to the renewable development
  account under section 116C.779, subdivision 1, paragraphs (b) and (e). Program funds must
  be placed in a separate account for the purpose of the solar energy production incentive
  program operated by the utility and not for any other program or purpose.
     (c) Funds allocated to the solar energy production incentive program in 2019 and 2020
 remain available to the solar energy production incentive program.
     (d) The following amounts are allocated to the solar energy production incentive program:
     (1) $10,000,000 in 2021;
     (2) $10,000,000 in 2022;
     (3) $5,000,000 in 2023;
     (4) $11,250,000 in 2024;
     (5) $6,250,000 in 2025; and
     (6) $5,000,000 each year, beginning in 2026 through 2035.
     (e) Notwithstanding the Department of Commerce's November 14, 2018, decision in
 Docket No. E002/M-13-1015 regarding operation of the utility's solar energy production
 incentive program, half of the amounts allocated each year under paragraph (d), clauses (3),
 (4), and (5), and (6), must be reserved for solar energy systems whose installation meets
 the eligibility standards for the low-income program established in the November 14, 2018,
 decision or successor decisions of the department. All other program operations of the solar
 energy production incentive program are governed by the provisions of the November 14,
 2018, decision or successor decisions of the department.
     (f) Funds allocated to the solar energy production incentive program that have not been
 committed to a specific project at the end of a program year remain available to the solar
 energy production incentive program.
     (g) Any unspent amount remaining on January 1, 2028 2038, must be transferred to the
 renewable development account.
 Article 3 Section 1.  16
 06/04/25   REVISOR  RSI/NS  25-05688
      (h) A solar energy system receiving a production incentive under this section must be
  sized to less than 120 percent of the customer's on-site annual energy consumption when
  combined with other distributed generation resources and subscriptions provided under
  section 216B.1641 associated with the premise. The production incentive must be paid for
  ten years commencing with the commissioning of the system.
      (i) The utility must file a plan to operate the program with the commissioner of commerce.
  The utility may not operate the program until it is approved by the commissioner. A change
  to the program to include projects up to a nameplate capacity of 40 kilowatts or less does
  not require the utility to file a plan with the commissioner. Any plan approved by the
 commissioner of commerce must not provide an increased incentive scale over prior years
 unless the commissioner demonstrates that changes in the market for solar energy facilities
 require an increase.
   Sec. 2. Minnesota Statutes 2024, section 216B.16, is amended by adding a subdivision to
 read:
     Subd. 1b. Definitions. For the purposes of this section, "low-income" means a household:
     (1) that is approved as qualified for energy assistance from the low-income home energy
 assistance program;
     (2) with a household income that is 50 percent or less of the state median income; or
     (3) that meets another qualification established by the commission.
   Sec. 3. Minnesota Statutes 2024, section 216B.16, subdivision 7b, is amended to read:
     Subd. 7b. Transmission cost adjustment. (a) Notwithstanding any other provision of
 this chapter, the commission may approve a tariff mechanism for the automatic annual
 adjustment of charges for the Minnesota jurisdictional costs net of associated revenues of:
     (1) new transmission facilities that have been separately filed and reviewed and approved
 by the commission under section 216B.243 or new transmission or distribution facilities
 that are certified as a priority project or deemed to be a priority transmission project under
 section 216B.2425;
     (2) new transmission facilities approved by the regulatory commission of the state in
 which the new transmission facilities are to be constructed, to the extent approval is required
 by the laws of that state, and determined by the Midcontinent Independent System Operator
 to benefit the utility or integrated transmission system; and
 Article 3 Sec. 3.  17
 06/04/25   REVISOR  RSI/NS  25-05688
      (3) charges incurred by a utility under a federally approved tariff that accrue from other
  transmission owners' regionally planned transmission projects that have been determined
  by the Midcontinent Independent System Operator to benefit the utility or integrated
  transmission system.
      (b) Upon filing by a public utility or utilities providing transmission service, the
  commission may approve, reject, or modify, after notice and comment, a tariff that:
      (1) allows the utility to recover on a timely basis the costs net of revenues of facilities
  approved under section 216B.243 or certified or deemed to be certified under section
  216B.2425 or exempt from the requirements of section 216B.243;
     (2) allows the utility to recover charges incurred under a federally approved tariff that
 accrue from other transmission owners' regionally planned transmission projects that have
 been determined by the Midcontinent Independent System Operator to benefit the utility or
 integrated transmission system. These charges must be reduced or offset by revenues received
 by the utility and by amounts the utility charges to other regional transmission owners, to
 the extent those revenues and charges have not been otherwise offset;
     (3) allows the utility to recover on a timely basis the costs net of revenues of facilities
 approved by the regulatory commission of the state in which the new transmission facilities
 are to be constructed and determined by the Midcontinent Independent System Operator to
 benefit the utility or integrated transmission system;
     (4) allows the utility to recover costs associated with distribution planning required under
 section 216B.2425;
     (5) allows the utility to recover costs associated with investments in distribution facilities
 to modernize the utility's grid that have been certified by the commission under section
 216B.2425;
     (6) allows the utility to recover on a timely basis the costs of upgrades that are not
 allocated to participating distributed generation facilities under the commission order issued
 in docket No. E002, E015, or E017/CI-24-288;
     (6) (7) allows a return on investment at the level approved in the utility's last general
 rate case, unless a different return is found to be consistent with the public interest;
     (7) (8) provides a current return on construction work in progress, provided that recovery
 from Minnesota retail customers for the allowance for funds used during construction is
 not sought through any other mechanism;
 Article 3 Sec. 3.  18
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      (8) (9) allows for recovery of other expenses if shown to promote a least-cost project
  option or is otherwise in the public interest;
      (9) (10) allocates project costs appropriately between wholesale and retail customers;
      (10) (11) provides a mechanism for recovery above cost, if necessary to improve the
  overall economics of the project or projects or is otherwise in the public interest; and
      (11) (12) terminates recovery once costs have been fully recovered or have otherwise
  been reflected in the utility's general rates.
      (c) A public utility may file annual rate adjustments to be applied to customer bills paid
  under the tariff approved in paragraph (b). In its filing, the public utility shall provide:
     (1) a description of and context for the facilities included for recovery;
     (2) a schedule for implementation of applicable projects;
     (3) the utility's costs for these projects;
     (4) a description of the utility's efforts to ensure the lowest costs to ratepayers for the
 project; and
     (5) calculations to establish that the rate adjustment is consistent with the terms of the
 tariff established in paragraph (b).
     (d) Upon receiving a filing for a rate adjustment pursuant to the tariff established in
 paragraph (b), the commission shall approve the annual rate adjustments provided that, after
 notice and comment, the costs included for recovery through the tariff were or are expected
 to be prudently incurred and achieve transmission system improvements at the lowest
 feasible and prudent cost to ratepayers.
     EFFECTIVE DATE. This section is effective the day following final enactment.
   Sec. 4. Minnesota Statutes 2024, section 216B.16, subdivision 14, is amended to read:
     Subd. 14. Low-income electric rate discount. A public utility shall fund an affordability
 program for low-income customers at a base annual funding level of $8,000,000. The annual
 funding level shall increase in the calendar years subsequent to each commission approval
 of a rate increase for the public utility's residential customers by the same percentage as the
 approved residential rate increase. Costs for the program shall be included in the utility's
 base rate. For the purposes of this subdivision, "low-income" describes a customer who is
 receiving assistance from the federal low-income home energy assistance program. The
 affordability program must be designed to target participating customers with the lowest
 Article 3 Sec. 4.  19
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  incomes and highest energy costs in order to lower the percentage of income they devote
  to energy bills, increase their payments, lower utility service disconnections, and decrease
  costs associated with collection activities on their accounts. For low-income customers who
  are 62 years of age or older or disabled, the program must include a $15 discount in each
  billing period. For the purposes of this subdivision, "public utility" includes only those
  public utilities with more than 200,000 residential electric service customers. The commission
  may issue orders necessary to implement, administer, and recover the costs of the program
  on a timely basis.
    Sec. 5. Minnesota Statutes 2024, section 216B.16, subdivision 15, is amended to read:
     Subd. 15. Low-income affordability programs. (a) The commission must consider
 ability to pay as a factor in setting utility rates and may establish affordability programs for
 low-income residential ratepayers in order to ensure affordable, reliable, and continuous
 service to low-income utility customers. A public utility serving low-income residential
 ratepayers who use natural gas for heating must file an affordability program with the
 commission. For purposes of this subdivision, "low-income residential ratepayers" means
 ratepayers who receive energy assistance from the low-income home energy assistance
 program (LIHEAP).
     (b) Any affordability program the commission orders a utility to implement must:
     (1) lower the percentage of income that participating low-income households devote to
 energy bills;
     (2) increase participating customer payments over time by increasing the frequency of
 payments;
     (3) decrease or eliminate participating customer arrears;
     (4) lower the utility costs associated with customer account collection activities; and
     (5) coordinate the program with other available low-income bill payment assistance and
 conservation resources.
     (c) In ordering affordability programs, the commission may require public utilities to
 file program evaluations that measure the effect of the affordability program on:
     (1) the percentage of income that participating households devote to energy bills;
     (2) service disconnections; and
     (3) frequency of customer payments, utility collection costs, arrearages, and bad debt.
 Article 3 Sec. 5.  20
 06/04/25   REVISOR  RSI/NS  25-05688
      (d) The commission must issue orders necessary to implement, administer, and evaluate
  affordability programs, and to allow a utility to recover program costs, including
  administrative costs, on a timely basis. The commission may not allow a utility to recover
  administrative costs, excluding start-up costs, in excess of five percent of total program
  costs, or program evaluation costs in excess of two percent of total program costs. The
  commission must permit deferred accounting, with carrying costs, for recovery of program
  costs incurred during the period between general rate cases.
      (e) Public utilities may use information collected or created for the purpose of
  administering energy assistance to administer affordability programs.
   Sec. 6. Minnesota Statutes 2024, section 216B.2402, subdivision 16, is amended to read:
     Subd. 16. Low-income household. "Low-income household" means a household whose
 household income:
     (1) is 80 percent or less of the area median household income for the geographic area
 in which the low-income household is located, as calculated by the United States Department
 of Housing and Urban Development a body of the state or federal government; or
     (2) meets the income eligibility standards, as determined by the commissioner, required
 for a household to receive financial assistance from a federal, state, municipal, or utility
 program administered or approved by the department.
   Sec. 7. Minnesota Statutes 2024, section 216B.2421, subdivision 2, is amended to read:
     Subd. 2. Large energy facility. "Large energy facility" means:
     (1) any electric power generating plant or combination of plants at a single site with a
 combined capacity of 50,000 kilowatts or more and transmission lines directly associated
 with the plant that are necessary to interconnect the plant to the transmission system;
     (2) any high-voltage transmission line with a capacity of 300 kilovolts or more and
 greater than one mile in length in Minnesota;
     (3) any high-voltage transmission line with a capacity of 100 kilovolts or more with
 more than ten miles of its length in Minnesota;
     (4) any pipeline greater than six inches in diameter and having more than 50 miles of
 its length in Minnesota used for the transportation of coal, crude petroleum or petroleum
 fuels or oil, or their derivatives;
 Article 3 Sec. 7.  21
 06/04/25   REVISOR  RSI/NS  25-05688
      (5) any pipeline for transporting natural or synthetic gas at pressures in excess of 200
  pounds per square inch with more than 50 miles of its length in Minnesota;
      (6) any facility designed for or capable of storing on a single site more than 100,000
  1,000,000 gallons of liquefied natural gas or synthetic gas;
      (7) any underground gas storage facility requiring a permit pursuant to section 103I.681;
      (8) any nuclear fuel processing or nuclear waste storage or disposal facility; and
      (9) any facility intended to convert any material into any other combustible fuel and
  having the capacity to process in excess of 75 tons of the material per hour.
    Sec. 8. Minnesota Statutes 2024, section 216C.09, is amended to read:
     216C.09 COMMISSIONER DUTIES.
     (a) The commissioner shall:
     (1) manage the department as the central repository within the state government for the
 collection of data on energy;
     (2) prepare and adopt an emergency allocation plan specifying actions to be taken in the
 event of an impending serious shortage of energy, or a threat to public health, safety, or
 welfare;
     (3) undertake a continuing assessment of trends in the consumption of all forms of energy
 and analyze the social, economic, and environmental consequences of these trends;
     (4) carry out energy conservation and efficiency measures as specified by the legislature
 and recommend to the governor and the legislature additional energy policies and energy
 conservation measures and efficiency programming as required to meet the objectives of
 this chapter;
     (5) collect and analyze data relating to present and future demands and resources for all
 sources of energy;
     (6) evaluate policies governing the establishment of rates and prices for energy as related
 to energy conservation and energy efficiency, and other goals and policies of this chapter,
 and make recommendations for changes in energy pricing policies and rate schedules;
     (7) study the impact and relationship of the state energy policies to international, national,
 and regional energy policies;
     (8) design and implement a state program for the energy conservation of energy and
 efficiency; this the program shall must include but is not be limited to, general commercial,
 Article 3 Sec. 8.  22
 06/04/25   REVISOR  RSI/NS  25-05688
  industrial, and residential, and transportation areas; such the program shall must also provide
  for the evaluation of energy systems as they relate to lighting, heating, refrigeration, air
  conditioning, building design and operation, and appliance manufacturing and operation;
      (9) inform and educate the public about the sources and uses of energy and the ways in
  which persons Minnesotans can transition to a clean energy future, conserve energy, and
  save money;
      (10) dispense funds made available for the purpose of research studies and projects of
  professional and civic orientation, which are related to either energy conservation, resource
  recovery, or the development of alternative energy technologies which conserve
 nonrenewable energy resources while creating minimum environmental impact;
     (11) charge other governmental departments and agencies involved in energy-related
 activities with specific information gathering goals and require that those goals be met;
     (12) design a comprehensive program for the development of indigenous energy
 resources. The program shall include, but not be limited to, providing technical,
 informational, educational, and financial services and materials to persons, businesses,
 municipalities, and organizations involved in the development of primary and emerging
 energy sources, including but not limited to solar, wind, hydropower, peat, fiber fuels,
 biomass, and other alternative energy resources. The program shall be evaluated by the
 alternative energy technical activity; and
     (13) dispense loans, grants, or other financial aid resources from money received from
 litigation or a settlement of alleged violations of federal petroleum-pricing regulations made
 available to the department for that purpose.
     (b) Further, the commissioner may participate fully in hearings before the Public Utilities
 Commission on matters pertaining to rate design, cost allocation, efficient resource utilization,
 utility conservation investments, small power production, cogeneration, and other rate issues.
 The commissioner shall support the policies stated in section 216C.05 and shall prepare
 and defend testimony proposed to encourage energy conservation improvements as defined
 in section 216B.241.
   Sec. 9. Minnesota Statutes 2024, section 216C.10, is amended to read:
     216C.10 COMMISSIONER POWERS.
     (a) The commissioner may:
     (1) adopt rules under chapter 14 as necessary to carry out the purposes of this chapter;
 Article 3 Sec. 9.  23
 06/04/25   REVISOR  RSI/NS  25-05688
      (2) make all contracts under this chapter and do all things necessary to cooperate with
  the United States government, and to qualify for, accept, and disburse any grant intended
  to administer this chapter;
      (3) provide on-site technical assistance to units of local government in order to enhance
  local capabilities for dealing with energy problems to provide energy-related financial
  resources, planning, outreach, and engagement;
      (4) administer for the state, energy programs under federal law, regulations, or guidelines,
  and coordinate the programs and activities with other state agencies, units of local
  government, and educational institutions;
     (5) develop a state energy investment plan with yearly energy conservation and alternative
 energy development goals, investment targets, and marketing strategies;
     (6) perform market analysis studies relating to conservation, alternative and renewable
 energy resources, and energy recovery;
     (7) assist with the preparation of proposals for innovative conservation, renewable,
 alternative, or energy recovery projects;
     (8) manage and disburse funds made available for the purpose of research studies or
 demonstration projects related to energy conservation or other activities deemed appropriate
 by the commissioner;
     (9) intervene in certificate of need proceedings before the Public Utilities Commission;
     (10) collect fees from recipients of loans, grants, or other financial aid from money
 received from litigation or settlement of alleged violations of federal petroleum-pricing
 regulations, which fees must be used to pay the department's costs in administering those
 financial aids; and
     (11) collect fees from proposers and operators of conservation and other energy-related
 programs that are reviewed, evaluated, or approved by the department, other than proposers
 that are political subdivisions or community or nonprofit organizations, to cover the
 department's cost in making the reviewal, evaluation, or approval and in developing additional
 programs for others to operate.
     (b) Notwithstanding any other law, the commissioner is designated the state agent to
 apply for, receive, and accept federal or other funds made available to the state for the
 purposes of this chapter.
 Article 3 Sec. 9.  24
 06/04/25   REVISOR  RSI/NS  25-05688
    Sec. 10. Minnesota Statutes 2024, section 216C.11, is amended to read:
      216C.11 ENERGY CONSERVATION INFORMATION CENTER.
      (a) The commissioner shall must establish an Energy Information Center in the
  department's offices in St. Paul department. The information center shall must maintain a
  toll-free telephone information service and disseminate printed materials on energy
  conservation topics, including but not limited to, availability of loans and other public and
  private financing methods for energy conservation physical improvements, the techniques
  and materials used to conserve energy in buildings, including retrofitting or upgrading
  insulation and installing weatherstripping, the projected prices and availability of different
 sources of energy, and alternative sources of energy physical, virtual, and mobile information
 service that collects, analyzes, and disseminates energy resources, data, technical assistance
 and expertise, financial assistance, connections, and information on a variety of energy
 topics relevant to Minnesota consumers, businesses, Tribal and local governments, and
 community organizations. The information center must be accessible and responsive to
 public inquiries and must conduct proactive outreach.
     The Energy Information Center shall serve as the official Minnesota Alcohol Fuels
 Information Center and shall disseminate information, printed, by the toll-free telephone
 information service, or otherwise on the applicability and technology of alcohol fuels.
     The information center shall include information on the potential hazards of energy
 conservation techniques and improvements in the printed materials disseminated. The
 commissioner shall not be liable for damages arising from the installation or operation of
 equipment or materials recommended by the information center.
     (b) The information center shall must use the information collected under section
 216C.02, subdivision 1, to maintain a central source of information on energy conservation,
 energy efficiency, and other energy-related programs, including both programs required by
 law or rule and programs developed and carried on voluntarily.
   Sec. 11. Minnesota Statutes 2024, section 216C.12, is amended to read:
     216C.12 ENERGY CONSERVATION PUBLICITY LITERACY.
     (a) The commissioner, in consultation with other affected agencies or departments shall,
 must develop informational materials, pamphlets and radio and television messages and
 messaging on energy conservation and housing energy efficiency programs available in
 Minnesota, renewable energy resources, and energy supply and demand. The printed materials
 shall include information on available tax credits for residential energy conservation
 Article 3 Sec. 11.  25
 06/04/25   REVISOR  RSI/NS  25-05688
  measures, residential retrofitting loan and grant programs, and data on the economics of
  energy conservation and renewable resource measures. Copies of printed materials shall be
  distributed to members of the appropriate standing committees of the legislature. The
  commissioner must use modern and current outreach strategies and media to distribute the
  informational materials and messaging to the widest possible audience.
      (b) The informational materials must promote energy literacy for individuals and
  communities to help individuals and communities make informed decisions on topics ranging
  from smart energy use at home and consumer choices to national and international energy
  policy. The informational materials must include but are not limited to information on energy
 sources, energy generation, energy use, energy conservation strategies, the energy workforce
 sector, and state and federal energy-related programs administered by the department.
   Sec. 12. Minnesota Statutes 2024, section 216C.391, subdivision 1, is amended to read:
     Subdivision 1. Definitions. (a) For the purposes of this section, the following terms have
 the meanings given.
     (b) "Competitive funds" means federal funds awarded to selected applicants based on
 the grantor's evaluation of the strength of an application measured against all other
 applications.
     (c) "Disadvantaged community": (1) has the meaning given by the federal agency
 disbursing federal funds; or (2) is a community located in an area that is a low-income area,
 as defined in section 116M.14, subdivision 4.
     (d) "Eligible entity" means an entity located in Minnesota that is eligible to receive
 federal funds, tax credits, loans, or an entity that has at least one Minnesota-based partner,
 as determined by the grantor of the federal funds, tax credits, or loans.
     (e) "Federal funds" means federal formula or competitive funds available for award to
 applicants for energy projects under the Infrastructure Investment and Jobs Act, Public Law
 117-58, or the Inflation Reduction Act of 2022, Public Law 117-169.
     (f) "Formula funds" means federal funds awarded to all eligible applicants on a
 noncompetitive basis.
     (g) "Loans" means federal loans from loan funds authorized or funded in the Inflation
 Reduction Act of 2022, Public Law 117-169.
     (h) "Match" means the amount of state nonfederal money a successful grantee in
 Minnesota is required to contribute to a project as a condition of receiving federal funds.
 Article 3 Sec. 12.  26
 06/04/25   REVISOR  RSI/NS  25-05688
      (i) "Political subdivision" has the meaning given in section 331A.01, subdivision 3.
      (j) "Project" means the activities proposed to be undertaken by an eligible entity awarded
  federal funds and are located in Minnesota or will directly benefit Minnesotans.
      (k) "Tax credits" means federal tax credits authorized in the Inflation Reduction Act of
  2022, Public Law 117-169.
      (l) "Tribal government" has the meaning given in section 116J.64, subdivision 4.
    Sec. 13. Minnesota Statutes 2024, section 216C.391, subdivision 2, is amended to read:
      Subd. 2. Establishment of account; eligible expenditures. (a) A state competitiveness
  fund account is created in the special revenue fund of the state treasury. The commissioner
 must credit to the account appropriations and transfers to the account. Earnings, such as
 interest, dividends, and any other earnings arising from assets of the account, must be
 credited to the account. Money remaining in the account at the end of a fiscal year does not
 cancel to the general fund but remains available until June 30, 2034. The commissioner is
 the fiscal agent and must manage the account.
     (b) Money in the account is appropriated to the commissioner and must be used to:
     (1) pay all or any portion of the state match required as a condition of receiving federal
 funds, or to otherwise reduce the cost for projects that are awarded federal funds, as described
 under subdivision 3, paragraph (a);
     (2) award grants under subdivision 4 to obtain grant development assistance for eligible
 entities;
     (3) award grants that reduce the cost for projects that are awarded federal loans within
 disadvantaged communities;
     (4) award grants for activities that are additive eligible to receive federal tax credits
 received by an eligible entity to further reduce the cost of the technologies and activities
 eligible for such federal tax credits in disadvantaged communities; and
     (5) pay the reasonable costs incurred by the department to assist eligible entities to
 successfully compete for available federal funds and utilize available federal tax credits or
 loans.
   Sec. 14. Minnesota Statutes 2024, section 216C.391, subdivision 3, is amended to read:
     Subd. 3. Grant awards; eligible entities; priorities. (a) Grants may be awarded under
 this section to eligible entities in accordance with the following order of priorities:
 Article 3 Sec. 14.  27
 06/04/25   REVISOR  RSI/NS  25-05688
      (1) federal formula funds directed to the state that require a match;
      (2) federal funds directed to a political subdivision or a Tribal government that require
  a match;
      (3) federal funds directed to an institution of higher education, a consumer-owned utility,
  a business, or a nonprofit organization that require a match;
      (4) federal funds directed to investor-owned utilities that require a match;
      (5) federal funds directed to an eligible entity not included in clauses (1) to (4) that
  require a match; and
      (6) all other grant opportunities directed to eligible entities that do not require a match
 but for which the commissioner determines that a grant made under this section is likely to
 enhance the likelihood of an applicant receiving federal funds, or to increase the potential
 amount of federal funds received.
     (b) By November 15, 2023, the commissioner must develop and publicly post, and report
 to the chairs and ranking minority members of the legislative committees with jurisdiction
 over energy finance, the federal energy grant funds that are eligible for state matching funds
 under this section.
     (c) Notwithstanding section 16B.98, subdivision 5, paragraph (b), a grant made under
 this section may exceed five years.
   Sec. 15. Minnesota Statutes 2024, section 216C.47, subdivision 1, is amended to read:
     Subdivision 1. Definitions. (a) For the purposes of this section, the following terms have
 the meanings given.
     (b) "Eligible applicant" means a county, city, town, Tribal government, or the
 Metropolitan Council.
     (c) "Geothermal energy system" means a system that heats and cools one or more
 buildings by using the constant temperature of the earth as both a heat source and heat sink,
 and a heat exchanger consisting of an underground closed loop system of piping containing
 a liquid to absorb and relinquish heat within the earth. Geothermal energy system includes:
     (1) a bored geothermal heat exchanger, as defined in section 103I.005;
     (2) a groundwater thermal exchange device, as defined in section 103I.005; and
     (3) a submerged closed loop heat exchanger, as defined in section 103I.005.
 Article 3 Sec. 15.  28
 06/04/25   REVISOR  RSI/NS  25-05688
      (d) "Tribal government" means the elected government of a federally recognized Indian
  Tribe located in Minnesota.
      EFFECTIVE DATE. This section is effective the day following final enactment.
    Sec. 16. Laws 2024, chapter 126, article 6, section 53, is amended to read:
    Sec. 53. INTERCONNECTION DOCKET; PUBLIC UTILITIES COMMISSION.
      (a) No later than September 1, 2024, the commission must initiate a proceeding to
  establish by order generic standards for the sharing of utility costs necessary to upgrade a
  utility's distribution system by increasing hosting capacity or applying other necessary
  distribution system upgrades at a congested or constrained location in order to allow for the
 interconnection of distributed generation facilities at the congested or constrained location
 and to advance the achievement of the state's renewable and carbon-free energy goals in
 Minnesota Statutes, section 216B.1691 and greenhouse gas emissions reduction goals in
 Minnesota Statutes, section 216H.02. The tariff standards must reflect an interconnection
 process designed to, at a minimum:
     (1) accelerate the expansion of hosting capacity at multiple points on a utility's distribution
 system by ensuring that the cost of upgrades is shared fairly among owners of distributed
 generation projects seeking interconnection on a pro rata basis according to the amount of
 the expanded capacity utilized by each interconnected distributed generation facility;
     (2) reduce the capital burden on owners of trigger projects seeking interconnection;
     (3) establish a minimum level of upgrade costs an expansion of hosting capacity must
 reach in order to be eligible to participate in the cost-share process and below which a trigger
 project must bear the full cost of the upgrade;
     (4) establish a distributed generation facility's pro rata cost-share amount as the utility's
 total cost of the upgrade divided by the incremental capacity resulting from the upgrade,
 and multiplying the result by the capacity of the distributed generation facility seeking
 interconnection;
     (5) establish a minimum proportion of the total upgrade cost that a utility must receive
 from one or more distributed generation facilities before initiating constructing an upgrade;
     (6) allow trigger projects and any other distributed generation facilities to pay a utility
 more than the trigger project's or distributed generation facility's pro rata cost-share amount
 only if needed to meet the minimum threshold established in clause (5) and to receive refunds
 for amounts paid beyond the trigger project's or distributed generation facility's pro rata
 Article 3 Sec. 16.  29
 06/04/25   REVISOR  RSI/NS  25-05688
  share of expansion costs from distributed generation projects that subsequently interconnect
  at the applicable location, after which pro rata payments are paid to the utility for distribution
  to ratepayers;
      (7) prohibit owners of distributed generation facilities from using any unsubscribed
  capacity at an interconnection that has undergone an upgrade without the distributed
  generation owners paying the distributed generation owner's pro rata cost of the upgrade;
  and
      (8) establish an annual limit or a formula for determining an annual limit for the total
  cost of upgrades that are not allocated to owners of participating generation facilities and
 may be recovered from ratepayers under section 216B.16, subdivision 7b, paragraph (b),
 clause (6).
     (b) For the purposes of this section, the following terms have the meanings given:
     (1) "distributed generation project" means an energy generating system with a capacity
 no greater than ten megawatts;
     (2) "hosting capacity" means the maximum capacity of a utility distribution system to
 transport electricity at a specific location without compromising the safety or reliability of
 the distribution system;
     (3) "trigger project" means the initial distributed generation project whose application
 for interconnection of a distributed generation project alerts a utility that an upgrade is
 needed in order to accommodate the trigger project and any future interconnections at the
 applicable location;
     (4) "upgrade" means a modification of a utility's distribution system at a specific location
 that is necessary to allow the interconnection of distributed generation projects by increasing
 hosting capacity at the applicable location, including but not limited to installing or modifying
 equipment at a substation or along a distribution line. Upgrade does not mean an expansion
 of hosting capacity dedicated solely to the interconnection of a single distributed generation
 project; and
     (5) "utility" means a public utility, as defined in Minnesota Statutes, section 216B.02,
 subdivision 4, that provides electric service.
     EFFECTIVE DATE. This section is effective the day following final enactment.
 Article 3 Sec. 16.  30
 06/04/25   REVISOR  RSI/NS  25-05688
ARTICLE 4
SECURITIZATION
    Section 1. [216B.491] DEFINITIONS.
      Subdivision 1. Scope. For the purposes of sections 216B.491 to 216B.499, the terms
  defined in this section have the meanings given.
      Subd. 2. Ancillary agreement. "Ancillary agreement" means a bond, insurance policy,
  letter of credit, reserve account, surety bond, interest rate lock or swap arrangement, liquidity
  or credit support arrangement, or other financial arrangement entered into in connection
  with extraordinary event bonds that is designed to promote the credit quality and
 marketability of extraordinary event bonds or to mitigate the risk of an increase in interest
 rates.
     Subd. 3. Assignee. "Assignee" means a person to which an interest in extraordinary
 event property is sold, assigned, transferred, or conveyed, other than as security, and any
 successor to or subsequent assignee of the person.
     Subd. 4. Bondholder. "Bondholder" means a holder or owner of extraordinary event
 bonds.
     Subd. 5. Customer. "Customer" means a person who purchases natural gas or natural
 gas transportation services from a utility in Minnesota. Customer does not include a person
 who:
     (1) purchases natural gas transportation services from a utility in Minnesota that serves
 fewer than 350,000 natural gas customers in Minnesota; and
     (2) does not purchase natural gas from a utility in Minnesota.
     Subd. 6. Extraordinary event. (a) "Extraordinary event" means an event arising from
 unforeseen circumstances of sufficient magnitude, as determined by the commission:
     (1) to impose significant costs on customers; and
     (2) for which the issuance of extraordinary event bonds in response to the event meets
 the conditions of section 216B.492, subdivision 2.
     (b) Extraordinary event includes but is not limited to a storm event or other natural
 disaster, an act of God, war, terrorism, sabotage, vandalism, a cybersecurity attack, or a
 temporary significant increase in the wholesale price of natural gas.
     Subd. 7. Extraordinary event activity. "Extraordinary event activity" means an activity
 undertaken by or on behalf of a utility to restore or maintain the utility's ability to provide
 Article 4 Section 1.  31
 06/04/25   REVISOR  RSI/NS  25-05688
  natural gas service following one or more extraordinary events, including but not limited
  to activities related to mobilizing, staging, constructing, reconstructing, replacing, or repairing
  natural gas transmission, distribution, storage, or general facilities.
      Subd. 8. Extraordinary event bonds. "Extraordinary event bonds" means debt securities,
  including but not limited to senior secured bonds, debentures, notes, certificates of
  participation, certificates of beneficial interest, certificates of ownership, or other evidences
  of indebtedness or ownership, that: (1) have a scheduled maturity of no longer than 30 years
  and a final legal maturity date that is not later than 32 years from the issue date; (2) are rated
  AA, Aa2, or higher by a major independent credit rating agency at the time of issuance;
 and (3) are issued by a utility or an assignee under a financing order.
     Subd. 9. Extraordinary event charge. "Extraordinary event charge" means a
 nonbypassable charge that:
     (1) a utility that is the subject of a financing order or the utility's successor or assignee
 imposes on all of the utility's customers;
     (2) is separate from the utility's base rates; and
     (3) provides a source of revenue used only to repay, finance, or refinance extraordinary
 event costs.
     Subd. 10. Extraordinary event costs. "Extraordinary event costs":
     (1) means all incremental costs of extraordinary event activities that are approved by
 the commission in a financing order issued under section 216B.492 as being:
     (i) necessary to enable the utility to restore or maintain natural gas service to customers
 after the utility experiences an extraordinary event; and
     (ii) prudent and reasonable;
     (2) includes costs to repurchase equity or retire any indebtedness relating to extraordinary
 event activities;
     (3) are net of applicable insurance proceeds, tax benefits, and any other amounts intended
 to reimburse the utility for extraordinary event activities, including government grants or
 aid of any kind;
     (4) do not include any monetary penalty, fine, or forfeiture assessed against a utility by
 a government agency or court under a federal or state environmental statute, rule, or
 regulation; and
     (5) must be adjusted to reflect:
 Article 4 Section 1.  32
 06/04/25   REVISOR  RSI/NS  25-05688
      (i) the difference, as determined by the commission, between extraordinary event costs
  that the utility expects to incur and actual, reasonable, and prudent costs incurred; or
      (ii) a more fair or reasonable allocation of extraordinary event costs to customers over
  time, as expressed in a commission order, provided that after the issuance of extraordinary
  event bonds relating to the extraordinary event costs, the adjustment must not (A) reduce
  or impair the extraordinary event property relating to the extraordinary event bonds, or (B)
  reduce, impair, postpone, or terminate extraordinary event charges relating to the
  extraordinary event bonds until all principal, interest, and redemption premium, if any,
  payable on the extraordinary event bonds, all financing costs for the extraordinary event
 bonds, and all amounts that must be paid to an assignee or financing party under an ancillary
 agreement relating to the extraordinary event bonds are paid in full.
     Subd. 11. Extraordinary event property. "Extraordinary event property" means:
     (1) all rights and interests that a utility or the utility's successor or assignee possess under
 a financing order to impose, bill, collect, receive, and obtain periodic adjustments to
 extraordinary event charges authorized under a financing order issued by the commission;
 and
     (2) all revenue, collections, claims, rights to payments, payments, money, or proceeds
 arising from the rights and interests specified in clause (1), regardless of whether any are
 commingled with other revenue, collections, rights to payment, payments, money, or
 proceeds.
     Subd. 12. Extraordinary event revenue. "Extraordinary event revenue" means revenue,
 receipts, collections, payments, money, claims, or other proceeds arising from extraordinary
 event property.
     Subd. 13. Financing costs. "Financing costs" means:
     (1) principal, interest, and redemption premiums, if any, that are payable on extraordinary
 event bonds;
     (2) payments required under an ancillary agreement and amounts required to fund or
 replenish a reserve account or other accounts established under the terms of any indenture,
 ancillary agreement, or other financing document pertaining to extraordinary event bonds;
     (3) other demonstrable costs related to issuing, supporting, repaying, refunding, and
 servicing extraordinary event bonds, including but not limited to servicing fees, accounting
 and auditing fees, trustee fees, legal fees, consulting fees, financial adviser fees,
 administrative fees, placement and underwriting fees, capitalized interest, rating agency
 Article 4 Section 1.  33
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  fees, stock exchange listing and compliance fees, security registration fees, filing fees,
  information technology programming costs, and any other demonstrable costs necessary to
  otherwise ensure and guarantee the timely payment of extraordinary event bonds, other
  amounts payable in connection with extraordinary event bonds, or other extraordinary event
  charges payable in connection with extraordinary event bonds;
      (4) taxes and license fees imposed on the revenue generated from collecting an
  extraordinary event charge;
      (5) state and local taxes, including franchise, sales and use, and other taxes or similar
  charges, including but not limited to regulatory assessment fees, whether paid, payable, or
 accrued; and
     (6) costs incurred by the commission to (i) hire and compensate additional temporary
 staff needed to perform the commission's responsibilities under this section, and (ii) engage
 specialized counsel and expert consultants experienced in securitized utility ratepayer-backed
 bond financings similar to extraordinary event bonds financings, as provided under section
 216B.494.
     Subd. 14. Financing order. "Financing order" means an order issued by the commission
 under section 216B.492 that authorizes an applicant to:
     (1) issue extraordinary event bonds in one or more series;
     (2) impose, charge, and collect extraordinary event charges; and
     (3) create extraordinary event property.
     Subd. 15. Financing party. "Financing party" means a holder of extraordinary event
 bonds and a trustee, a collateral agent, a party under an ancillary agreement, or any other
 person acting for the benefit of extraordinary event bondholders.
     Subd. 16. Natural gas facility. "Natural gas facility" means natural gas pipelines,
 including distribution lines, underground storage areas, liquefied natural gas facilities,
 propane storage tanks, and other facilities the commission determines are used and useful
 to provide natural gas service to retail and transportation customers in Minnesota.
     Subd. 17. Nonbypassable. "Nonbypassable" means an extraordinary event charge that
 a retail customer located within a utility service area cannot avoid and must pay.
     Subd. 18. Pretax costs. "Pretax costs" means costs incurred by a utility and approved
 by the commission, including but not limited to:
 Article 4 Section 1.  34
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      (1) unrecovered capitalized costs of replaced natural gas facilities damaged or destroyed
  by an extraordinary event;
      (2) costs to decommission and restore the site of a natural gas facility damaged or
  destroyed by an extraordinary event;
      (3) other applicable capital and operating costs, accrued carrying charges, deferred
  expenses, reductions for applicable insurance, and salvage proceeds; and
      (4) costs to retire any existing indebtedness, fees, costs, and expenses to modify existing
  debt agreements, or for waivers or consents related to existing debt agreements.
      Subd. 19. Storm event. "Storm event" means a tornado, derecho, ice or snow storm,
 wildfire, flood, earthquake, or other significant weather or natural disaster that causes
 substantial damage to a utility's infrastructure.
     Subd. 20. Successor. "Successor" means a legal entity that succeeds by operation of law
 to the rights and obligations of another legal entity as a result of bankruptcy, reorganization,
 restructuring, other insolvency proceeding, merger, acquisition, consolidation, or sale or
 transfer of assets.
     Subd. 21. Utility. "Utility" means a public utility, as defined in section 216B.02,
 subdivision 4, that provides natural gas service to Minnesota customers. Utility includes
 the utility's successors or assignees.
   Sec. 2. [216B.492] FINANCING ORDER.
     Subdivision 1. Application. (a) A utility may file an application with the commission
 requesting a financing order to enable the utility to recover extraordinary event costs by
 issuing extraordinary event bonds under this section.
     (b) The application must include the following information, as applicable:
     (1) a description of each natural gas facility to be repaired or replaced;
     (2) the undepreciated value remaining in each natural gas facility under clause (1) that
 the utility proposes to repair or replace using financing obtained by issuing extraordinary
 event bonds under sections 216B.491 to 216B.499, and the method used to calculate the
 undepreciated value remaining;
     (3) the estimated costs imposed on customers resulting from an extraordinary event that
 involves no physical damage to natural gas facilities;
 Article 4 Sec. 2.  35
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      (4) the estimated savings or estimated mitigation of rate impacts to utility customers if
  the financing order is issued as requested in the application, calculated by comparing the
  costs to customers that are expected to result from implementing the financing order and
  the estimated costs associated with implementing traditional utility financing mechanisms
  with respect to the same undepreciated balance, expressed in net present value terms;
      (5) a description of (i) the nonbypassable extraordinary event charge utility customers
  must pay in order to fully recover financing costs, and (ii) the method and assumptions used
  to calculate the nonbypassable extraordinary event charge;
      (6) a proposed methodology to allocate the revenue requirement for the extraordinary
 event charge among the utility's customer classes;
     (7) a description of a proposed adjustment mechanism that is implemented when necessary
 to correct any overcollection or undercollection of extraordinary event charges, in order to
 complete payment of scheduled principal and interest on extraordinary event bonds and
 other financing costs in a timely fashion;
     (8) a memorandum with supporting exhibits, developed by a securities firm that is
 experienced in the marketing of securitized utility ratepayer-backed bonds, indicating the
 proposed issuance satisfies: (i) the current published AA, Aa2, or higher rating; or (ii)
 equivalent rating criteria of at least one nationally recognized securities rating organization
 for issuances similar to the proposed extraordinary event bonds;
     (9) an estimate of: (i) the timing of the extraordinary event bonds issuance; and (ii) the
 term of the extraordinary event bonds or series of bonds, provided that the scheduled final
 maturity for each bond issuance does not exceed 30 years;
     (10) identification of plans to sell, assign, transfer, or convey, other than as a security,
 interest in extraordinary event property, including identification of an assignee and
 demonstration that the assignee is a financing entity that is wholly owned, directly or
 indirectly, by the utility;
     (11) identification of ancillary agreements that may be necessary or appropriate;
     (12) one or more alternative financing scenarios in addition to the preferred scenario
 contained in the application;
     (13) the extent of damage to the utility's natural gas facility caused by an extraordinary
 event and the estimated costs to repair or replace the damaged natural gas facility;
     (14) a schedule of the proposed repairs to and replacement of the damaged natural gas
 facility;
 Article 4 Sec. 2.  36
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      (15) a description of the steps taken to provide customers interim natural gas service
  while the damaged natural gas facility is being repaired or replaced; and
      (16) a description of the impacts on the utility's current workforce resulting from
  implementing a repair or replacement plan following an extraordinary event.
      Subd. 2. Findings. After providing notice and holding a public hearing on an application
  filed under subdivision 1, the commission may issue a financing order if the commission
  finds that:
      (1) the extraordinary event costs described in the application are reasonable;
      (2) the proposed issuance of extraordinary event bonds and the imposition and collection
 of extraordinary event charges:
     (i) are just and reasonable;
     (ii) are consistent with the public interest;
     (iii) constitute a prudent and reasonable mechanism to finance the extraordinary event
 costs; and
     (iv) provide tangible and quantifiable benefits to customers, either by providing lower
 overall costs or mitigating rate impacts relative to traditional methods of financing, that
 exceed the benefits achieved absent the issuance of extraordinary event bonds; and
     (3) the proposed structuring, marketing, and pricing of the extraordinary event bonds:
     (i) lower overall costs to customers or mitigate rate impacts to customers relative to
 traditional methods of financing; and
     (ii) achieve customer savings or mitigate rate impacts to customers, as determined by
 the commission in a financing order, consistent with market conditions at the time of sale
 and the terms of the financing order.
     Subd. 3. Contents. (a) A financing order issued under this section must:
     (1) determine the maximum amount of extraordinary event costs that may be financed
 from proceeds of extraordinary event bonds issued pursuant to the financing order;
     (2) describe the proposed customer billing mechanism for extraordinary event charges
 and include a finding that the mechanism is just and reasonable;
     (3) describe the financing costs that may be recovered through extraordinary event
 charges and the period over which the costs may be recovered, which must end no earlier
 than the date of final legal maturity of the extraordinary event bonds;
 Article 4 Sec. 2.  37
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      (4) describe the extraordinary event property that is created and that may be used to pay,
  and secure the payment of, principal and interest on the extraordinary event bonds and other
  financing costs authorized in the financing order;
      (5) authorize the utility to finance extraordinary event costs by issuing one or more series
  of extraordinary event bonds. A utility is not required to secure a separate financing order
  for each extraordinary event bonds issuance or for each scheduled phase to replace natural
  gas facilities approved in the financing order;
      (6) include a formula-based mechanism that must be used to make expeditious periodic
  adjustments to the extraordinary event charges authorized by the financing order that are
 necessary to (i) correct for any overcollection or undercollection, or (ii) otherwise provide
 for the timely payment of extraordinary event bonds, other financing costs, and other required
 amounts and charges payable in connection with extraordinary event bonds;
     (7) specify the degree of flexibility afforded to the utility to establish the terms and
 conditions of the extraordinary event bonds, including but not limited to repayment schedules,
 expected interest rates, and other financing costs;
     (8) specify that the extraordinary event bonds must be issued, subject to market conditions
 and the financing order's terms, as soon as feasible following the financing order's issuance;
     (9) require the utility, at the same time extraordinary event charges are initially collected
 and independent of the schedule to close and decommission any natural gas facility replaced
 as the result of an extraordinary event, if any, to remove the natural gas facility from the
 utility's rate base and commensurately reduce the utility's base rates;
     (10) specify a future ratemaking process to reconcile any difference between the projected
 pretax costs included in the amount financed by extraordinary event bonds and the final
 actual pretax costs incurred by the utility to retire or replace the natural gas facility, if any;
     (11) specify information regarding extraordinary event bonds issuance and repayments,
 financing costs, energy transaction charges, extraordinary event property, and related matters
 that the natural gas utility is required to provide to the commission on a schedule determined
 by the commission;
     (12) allow or require the creation of a utility's extraordinary event property to be
 conditioned on, and occur simultaneously with, the sale or other transfer of the extraordinary
 event property to an assignee and the pledge of the extraordinary event property to secure
 the extraordinary event bonds;
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      (13) ensure that the structuring, marketing, and pricing of extraordinary event bonds
  result in reasonable extraordinary event charges and customer savings or rate impact
  mitigation, consistent with market conditions and the financing order's terms; and
      (14) specify that a utility that finances the replacement of one or more natural gas facilities
  after the natural gas facilities that are subject to the finance order are removed from the
  utility's rate base is prohibited from:
      (i) operating the natural gas facilities; or
      (ii) selling the natural gas facilities to another entity to operate as natural gas facilities.
      (b) A financing order issued under this section may:
     (1) include conditions different from those requested in the application that the
 commission determines are necessary to:
     (i) promote the public interest; and
     (ii) maximize the financial benefits or minimize the financial risks of the transaction to
 customers and to directly impacted Minnesota workers and communities; and
     (2) select one or more underwriters for the extraordinary event bonds.
     Subd. 4. Duration; irrevocability; subsequent order. (a) A financing order remains
 effective until the extraordinary event bonds issued under the financing order and all
 financing costs related to the extraordinary event bonds have been paid in full.
     (b) A financing order remains effective and unabated notwithstanding the bankruptcy,
 reorganization, or insolvency of the utility to which the financing order applies or any
 affiliate, successor, or assignee of the utility to which the financing order applies.
     (c) Subject to judicial review under section 216B.52, a financing order is irrevocable
 and is not reviewable by a future commission. The commission must not: (1) reduce, impair,
 postpone, or terminate extraordinary event charges approved in a financing order; (2) reduce
 or impair the extraordinary event property approved in a financing order or impair the
 collection or recovery of extraordinary event charges and extraordinary event revenue; or
 (3) change the customers required to pay extraordinary event charges.
     (d) Notwithstanding paragraph (c), the commission may, on the commission's own
 motion or at the request of a utility or any other person, commence a proceeding and issue
 a subsequent financing order that provides for refinancing, retiring, or refunding extraordinary
 event bonds issued under the original financing order if:
 Article 4 Sec. 2.  39
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      (1) the commission makes all of the findings specified in subdivision 2 with respect to
  the subsequent financing order; and
      (2) the modification contained in the subsequent financing order does not in any way
  impair the covenants and terms of the extraordinary event bonds being refinanced, retired,
  or refunded.
      Subd. 5. Effect on commission jurisdiction. (a) Except as provided in paragraph (b),
  the commission, in exercising the powers and carrying out the duties under this section, is
  prohibited from:
      (1) considering extraordinary event bonds issued under this section to be debt of the
 utility other than for income tax purposes, unless considering the extraordinary event bonds
 to be debt is necessary to achieve consistency with prevailing utility debt rating
 methodologies;
     (2) considering the extraordinary event charges paid under the financing order to be
 revenue of the utility;
     (3) considering the extraordinary event costs or financing costs specified in the financing
 order to be regulated costs or assets of the utility; or
     (4) determining that any prudent action taken by a utility that is consistent with the
 financing order is unjust or unreasonable.
     (b) Nothing in this subdivision:
     (1) affects the authority of the commission to apply or modify a billing mechanism
 designed to recover extraordinary event charges;
     (2) prevents or precludes the commission from (i) investigating a utility's compliance
 with the financing order's terms and conditions, and (ii) requiring compliance with the
 financing order; or
     (3) prevents or precludes the commission from imposing regulatory sanctions against a
 utility for failure to comply with (i) the financing order's terms and conditions, or (ii) the
 requirements of this section.
     (c) The commission is prohibited from refusing to allow a utility to recover any costs
 associated with the replacement of natural gas facilities solely because the utility has elected
 to finance the natural gas facility replacement through a financing mechanism other than
 extraordinary event bonds.
 Article 4 Sec. 2.  40
 06/04/25   REVISOR  RSI/NS  25-05688
    Sec. 3. [216B.493] POSTORDER COMMISSION DUTIES.
      Subdivision 1. Financing costs review. Within 120 days after the date extraordinary
  event bonds are issued, a utility subject to a financing order must file with the commission
  the actual initial and ongoing financing costs, the final structure and pricing of the
  extraordinary event bonds, and the actual extraordinary event charge. The commission must
  review the prudence of the natural gas utility's actions to determine whether the actual
  financing costs were the lowest that could reasonably be achieved given the financing order's
  terms and market conditions prevailing at the time the extraordinary event bonds are issued.
      Subd. 2. Enforcement. If the commission determines that a utility's actions under this
 section are not prudent or are inconsistent with the financing order, the commission may
 apply remedies deemed appropriate for utility actions, provided that any remedy applied
 must not directly or indirectly: (1) reduce or impair the extraordinary event property approved
 in the financing order or impair the collection or recovery of extraordinary event charges
 and extraordinary event revenue; (2) reduce, impair, postpone, or terminate extraordinary
 event charges approved in the financing order until all principal, interest, and redemption
 premium, if any, payable on the extraordinary event bonds, all financing costs, and all
 amounts to be paid to an assignee or financing party under an ancillary agreement are paid
 in full; or (3) change the customers required to pay extraordinary event charges.
   Sec. 4. [216B.494] USE OF OUTSIDE EXPERTS.
     (a) To carry out the duties under this section, the commission may:
     (1) contract with outside consultants and counsel experienced in securitized utility
 customer-backed bond financing similar to extraordinary event bonds; and
     (2) hire and compensate additional temporary staff as needed.
 Expenses incurred by the commission under this paragraph must be treated as financing
 costs paid by the extraordinary event revenue. The costs incurred under clause (1) are not
 an obligation of the state and are assigned solely to the transaction.
     (b) A utility presented with a written request from the commission to reimburse the
 commission's expenses incurred under paragraph (a), accompanied by a detailed account
 of the subject expenses, must provide the issuer of the extraordinary event bonds and the
 indenture trustee for the extraordinary event bonds with such documentation. The indenture
 trustee must remit full payment of the expenses to the commission on the next interest
 payment date of the extraordinary event bonds after the payment of interest and scheduled
 Article 4 Sec. 4.  41
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  principal of the extraordinary event bonds in accordance with the payment waterfall included
  in the indenture governing the extraordinary event bonds.
      (c) If a utility's application for a financing order is denied or withdrawn for any reason
  and extraordinary event bonds are not issued, the commission's costs to retain expert
  consultants under this section must be paid by the applicant utility and are deemed a prudent
  deferred expense eligible for recovery in the utility's future rates.
    Sec. 5. [216B.495] EXTRAORDINARY EVENT CHARGE; BILLING TREATMENT.
      (a) A utility that obtains a financing order and issues extraordinary event bonds must:
      (1) include on each customer's monthly natural gas bill:
     (i) a statement that a portion of the charges represents extraordinary event charges
 approved in a financing order;
     (ii) the amount and rate of the extraordinary event charge as a separate line item titled
 "extraordinary event charge"; and
     (iii) if extraordinary event property has been transferred to an assignee, a statement that
 the assignee is the owner of the rights to extraordinary event charges and that the utility or
 other entity, if applicable, is acting as a collection agent or servicer for the assignee; and
     (2) file annually with the commission:
     (i) a calculation that identifies the impact financing the retirement or replacement of
 natural gas facilities has on customer rates, itemized by customer class; and
     (ii) evidence demonstrating that extraordinary event revenues are applied solely to pay
 (A) principal and interest on extraordinary event bonds, and (B) other financing costs.
     (b) Extraordinary event charges are nonbypassable and must be paid by all existing and
 future customers receiving service from the utility or the utility's successors or assignees
 under commission-approved rate schedules or special contracts.
     (c) A utility's failure to comply with this section does not invalidate, impair, or affect
 any financing order, extraordinary event property, extraordinary event charge, or
 extraordinary event bonds, but does subject the utility to penalties under applicable
 commission rules provided that any penalty applied must not directly or indirectly: (1)
 reduce or impair the extraordinary event property approved in the financing order or impair
 the collection or recovery of extraordinary event charges and extraordinary event revenue;
 (2) reduce, impair, postpone, or terminate extraordinary event charges approved in the
 financing order until all principal, interest, and redemption premium, if any, payable on the
 Article 4 Sec. 5.  42
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  extraordinary event bonds, all financing costs, and all amounts to be paid to an assignee or
  financing party under an ancillary agreement are paid in full; or (3) change the customers
  required to pay extraordinary event charges.
    Sec. 6. [216B.496] EXTRAORDINARY EVENT PROPERTY.
      Subdivision 1. General. (a) Extraordinary event property is an existing present property
  right or interest in a property right, even though the imposition and collection of extraordinary
  event charges depend on the utility collecting extraordinary event charges and on future
  natural gas consumption. The property right or interest exists regardless of whether the
  revenues or proceeds arising from the extraordinary event property have been billed, have
 accrued, or have been collected.
     (b) Extraordinary event property exists until all extraordinary event bonds issued under
 a financing order are paid in full and all financing costs and other extraordinary event bonds
 costs have been recovered in full.
     (c) All or any portion of extraordinary event property described in a financing order
 issued to a utility may be transferred, sold, conveyed, or assigned to a successor or assignee
 that is wholly owned, directly or indirectly, by the utility and created for the limited purpose
 of acquiring, owning, or administering extraordinary event property or issuing extraordinary
 event bonds authorized by the financing order. All or any portion of extraordinary event
 property may be pledged to secure extraordinary event bonds issued under a financing order,
 amounts payable to financing parties and to counterparties under any ancillary agreements,
 and other financing costs. Each transfer, sale, conveyance, assignment, or pledge by a utility
 or an affiliate of extraordinary event property is a transaction in the ordinary course of
 business.
     (d) If a utility defaults on any required payment of charges arising from extraordinary
 event property described in a financing order, a court, upon petition by an interested party
 and without limiting any other remedies available to the petitioner, must order the
 sequestration and payment of the revenues arising from the extraordinary event property to
 the financing parties.
     (e) The interest of a transferee, purchaser, acquirer, assignee, or pledgee in extraordinary
 event property specified in a financing order issued to a utility, and in the revenue and
 collections arising from the property, is not subject to setoff, counterclaim, surcharge, or
 defense by the utility or any other person, or in connection with the reorganization,
 bankruptcy, or other insolvency of the utility or any other entity.
 Article 4 Sec. 6.  43
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      (f) A successor to a utility, whether resulting from a reorganization, bankruptcy, or other
  insolvency proceeding, merger or acquisition, sale, other business combination, transfer by
  operation of law, utility restructuring, or otherwise: (1) must perform and satisfy all
  obligations of, and has the same duties and rights under, a financing order as the utility to
  which the financing order applies; and (2) must perform the duties and exercise the rights
  in the same manner and to the same extent as the utility, including (i) collecting extraordinary
  event bonds revenues, collections, payments, or proceeds, and (ii) paying a person entitled
  to receive extraordinary event bonds revenues, collections, payments, or proceeds.
      Subd. 2. Security interests in extraordinary event property. (a) The creation,
 perfection, and enforcement of any security interest in extraordinary event property to secure
 the repayment of the principal and interest on extraordinary event bonds, amounts payable
 under any ancillary agreement, and other financing costs are governed by this section only.
     (b) A security interest in extraordinary event property is created, valid, and binding
 when:
     (1) the financing order that describes the extraordinary event property is issued;
     (2) a security agreement is executed and delivered; and
     (3) value is received for the extraordinary event bonds.
     (c) Once a security interest in extraordinary event property is created, the security interest
 attaches without any physical delivery of collateral or any other act. The lien of the security
 interest is valid, binding, and perfected against all parties having claims of any kind in tort,
 in contract, or otherwise against the person granting the security interest, regardless of
 whether the parties have notice of the lien, upon the filing of a financing statement with the
 secretary of state.
     (d) The description or indication of extraordinary event property in a transfer or security
 agreement and a financing statement is sufficient only if the description or indication refers
 to this section and the financing order creating the extraordinary event property.
     (e) A security interest in extraordinary event property is a continuously perfected security
 interest and has priority over any other lien, created by operation of law or otherwise, that
 may subsequently attach to the extraordinary event property unless the person that holds
 the security interest has agreed otherwise in writing.
     (f) The priority of a security interest in extraordinary event property is not affected by
 the commingling of extraordinary event property or extraordinary event revenue with other
 money. An assignee, bondholder, or financing party has a perfected security interest in the
 Article 4 Sec. 6.  44
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  amount of all extraordinary event property or extraordinary event revenue that is pledged
  to pay extraordinary event bonds even if the extraordinary event property or extraordinary
  event revenue is deposited in a cash or deposit account owned by the utility in which the
  extraordinary event revenue is commingled with other money. Any other security interest
  that applies to the other money does not apply to the extraordinary event revenue.
      (g) A subsequent commission order amending a financing order under section 216B.492,
  subdivision 4, or the application of an adjustment mechanism authorized by a financing
  order under section 216B.492, subdivision 3, does not affect the validity, perfection, or
  priority of a security interest in or transfer of extraordinary event property.
     Subd. 3. Sales of extraordinary event property. (a) A sale, assignment, or transfer of
 extraordinary event property is an absolute transfer and true sale of, and not a pledge of or
 secured transaction relating to, the seller's right, title, and interest in, to, and under the
 extraordinary event property if the documents governing the transaction expressly state that
 the transaction is a sale or other absolute transfer. A transfer of an interest in extraordinary
 event property may be created when:
     (1) the financing order creating and describing the extraordinary event property is
 effective;
     (2) the documents evidencing the transfer of the extraordinary event property are executed
 and delivered to the assignee; and
     (3) value is received.
     (b) The characterization of a sale, assignment, or transfer as an absolute transfer and
 true sale, and the corresponding characterization of the property interest of the assignee, is
 not affected or impaired by:
     (1) commingling extraordinary event revenue with other money;
     (2) the seller retaining:
     (i) a partial or residual interest, including an equity interest, in the extraordinary event
 property, whether (A) direct or indirect, or (B) subordinate or otherwise; or
     (ii) the right to recover costs associated with taxes, franchise fees, or license fees imposed
 on the collection of extraordinary event revenue;
     (3) any recourse that the extraordinary event property purchaser may have against the
 seller;
 Article 4 Sec. 6.  45
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      (4) any indemnification rights, obligations, or repurchase rights made or provided by
  the extraordinary event property seller;
      (5) the extraordinary event property seller's obligation to collect extraordinary event
  revenues on behalf of an assignee;
      (6) the treatment of the sale, assignment, or transfer for tax, financial reporting, or other
  purposes;
      (7) any subsequent financing order amending a financing order under section 216B.492,
  subdivision 4, paragraph (d); or
      (8) any application of an adjustment mechanism under section 216B.492, subdivision
 3, paragraph (a), clause (6).
   Sec. 7. [216B.497] EXTRAORDINARY EVENT BONDS.
     (a) A bank, trust company, savings and loan association, insurance company, executor,
 administrator, guardian, trustee, or other fiduciary may legally invest any money within the
 individual's or entity's control in extraordinary event bonds.
     (b) Extraordinary event bonds issued under a financing order are not debt of or a pledge
 of the faith and credit or taxing power of the state, any agency of the state, or any political
 subdivision. An extraordinary event bonds holder does not possess the ability to compel
 taxes to be levied by the state or a political subdivision in order to pay the principal or
 interest on extraordinary event bonds. The issuance of extraordinary event bonds does not
 directly, indirectly, or contingently obligate the state or a political subdivision to levy any
 tax or make any appropriation to pay principal or interest on the extraordinary event bonds.
     (c) The state pledges to and agrees with an extraordinary event bonds holder, assignee,
 and financing party that the state and state agencies, including the commission, are prohibited
 from:
     (1) taking or permitting an action that reduces or impairs the extraordinary event property
 approved in the financing order or impairs the collection or recovery of extraordinary event
 charges or extraordinary event revenue;
     (2) reducing, impairing, postponing, or terminating extraordinary event charges approved
 in the financing order that are imposed, collected, and remitted for the benefit of an
 extraordinary event bonds holder, assignee, and financing party until all principal, interest,
 and redemption premium, if any, payable on extraordinary event bonds, all financing costs,
 Article 4 Sec. 7.  46
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  and all amounts to be paid to an assignee or financing party under an ancillary agreement
  are paid in full; or
      (3) changing the customers required to pay the extraordinary event charges.
      (d) The commission may include a pledge in the financing order similar to the pledge
  included in paragraph (c).
      (e) A person who issues extraordinary event bonds may include the pledge specified in
  paragraphs (c) and (d) in the extraordinary event bonds, ancillary agreements, and
  documentation related to the issuance and marketing of the extraordinary event bonds.
    Sec. 8. [216B.498] ASSIGNEE OF FINANCING PARTY NOT SUBJECT TO
 COMMISSION REGULATION.
     An assignee or financing party that is not already regulated by the commission does not
 become subject to commission regulation solely as a result of engaging in any transaction
 authorized by or described in sections 216B.491 to 216B.499.
   Sec. 9. [216B.499] EFFECT ON OTHER LAWS.
     (a) If a provision of sections 216B.491 to 216B.499 conflicts with other law regarding
 the attachment, assignment, perfection, effect of perfection, or priority of a security interest
 in or transfer of extraordinary event property, sections 216B.491 to 216B.499 govern.
     (b) Nothing in this section precludes a utility for which the commission has initially
 issued a financing order from applying to the commission for:
     (1) a subsequent financing order amending the financing order under section 216B.492,
 subdivision 4, paragraph (d); or
     (2) approval to issue extraordinary event bonds to refund all or a portion of an outstanding
 series of extraordinary event bonds.
   Sec. 10. Minnesota Statutes 2024, section 216B.62, subdivision 3, is amended to read:
     Subd. 3. Assessing all public utilities. The department and commission shall quarterly,
 at least 30 days before the start of each quarter, estimate the total of their expenditures in
 the performance of their duties relating to public utilities under sections 216B.01 to 216B.67,
 other than amounts chargeable to public utilities under subdivision 2, 6, 7, or 8, or 9. The
 remainder shall be assessed by the commission and department to the several public utilities
 in proportion to their respective gross operating revenues from retail sales of gas or electric
 service within the state during the last calendar year. The assessment shall be paid into the
 Article 4 Sec. 10.  47
 06/04/25   REVISOR  RSI/NS  25-05688
  state treasury within 30 days after the bill has been transmitted via mail, personal delivery,
  or electronic service to the several public utilities, which shall constitute notice of the
  assessment and demand of payment thereof. The total amount which may be assessed to
  the public utilities, under authority of this subdivision, shall not exceed one-sixth of one
  percent of the total gross operating revenues of the public utilities during the calendar year
  from retail sales of gas or electric service within the state. The assessment for the third
  quarter of each fiscal year shall be adjusted to compensate for the amount by which actual
  expenditures by the commission and department for the preceding fiscal year were more or
  less than the estimated expenditures previously assessed.
   Sec. 11. Minnesota Statutes 2024, section 216B.62, is amended by adding a subdivision
 to read:
     Subd. 9. Administrative costs for extraordinary event bonds. The commission and
 the department may assess gas utilities for the actual commission and department costs
 incurred to administer extraordinary event bonds under sections 216B.491 to 216B.499.
 The money received from the assessment must be deposited into an account in the special
 revenue fund. All money deposited in the account is appropriated to the commission or the
 department for the purposes of this subdivision. The commission and department may
 initially assess for estimated costs under sections 216B.491 to 216B.499, then must adjust
 subsequent assessments for actual costs incurred under sections 216B.491 to 216B.499. An
 assessment made under this subdivision is not subject to the cap on assessments provided
 in subdivision 3 or any other law.
 Article 4 Sec. 11.  48
  APPENDIX
  Article locations for 25-05688
ARTICLE 1   CLIMATE AND ENERGY FINANCE.................................................. Page.Ln 1.14
ARTICLE 2   RENEWABLE DEVELOPMENT ACCOUNT APPROPRIATIONS.... Page.Ln 12.28
ARTICLE 3   ENERGY POLICY................................................................................. Page.Ln 15.27
ARTICLE 4   SECURITIZATION................................................................................ Page.Ln 31.1

Energy finance and policy bill.

Sponsors

Rep. Patty Acomb (D) sponsors HF 7 alone.

Patty Acomb

Rep. · D–45B · Sponsor

History

HF 7 has taken 1 action since Jun 9, 2025.

ChamberAction
Jun 9, 2025
House
Introduction and first reading

Votes

HF 7 has not gone to a roll call.

Source: revisor.mn.gov · legiscan.com