Minnesota enacts sweeping energy bill

On May 23, Minnesota enacted H.F. 729 (Chapter 85), which incorporated certain provisions of the omnibus Solar Energy Jobs Act. The law includes significant revisions to the state’s net metering law, requires the development of a Value of Solar Tariff (VOST), allows for the development of Community Solar Gardens, and updates the state’s Renewable Portfolio Standard (RPS) and several renewable energy incentives, among other things.  Highlights from the bill include:

Net Metering: The PUC must develop rules to implement several changes to net metering.  These revisions include:

  • A uniform contract for net metering and interconnection.
  • System size limits of 1 megawatt (MW) (increased from 40 kilowatts). For customers with systems between 40 kW and 1 MW, net excess generation is credited at the avoided cost rate rather than the retail rate, or the customer may elect to be compensated for NEG in the form of a kilowatt-hour credit. Excess credits will be reimbursed at the end of the calendar year at the avoided cost rate. A public utility may also set limits on an individual system’s generation for systems greater than 40 kW. For wind systems, utilities can limit the total generation system capacity kW-AC to 120% of the customer’s on-site maximum electric demand. For solar and other systems, utilities can limit the total generation system annual energy production kWh-AC to 120% of the customer’s on-site annual electric energy consumption.
  • Standby Charges prohibition. Investor-owned utilities (IOU) may not impose a standby charge on a net metered facility of 100 kW or less. For facilities greater than 100 kW, standby charges must be in accordance with an order of the PUC establishing allowable charges.
  • Meter Aggregation allowance. IOUs must offer meter aggregation for customers that request it.  The meter must be owned or leased by the customer requesting aggregation, and must be located on contiguous property owned by the same customer. The total aggregate of all meters is subject to the same net metering size limitations described above.
  • Participation Limit. The PUC may limit the cumulative generation of net-metered facilities. An IOU may request a cumulative generation limit upon showing that the generation has reached 4% of the utility’s annual retail electricity sales.

Value of Solar Tariff: The Department of Commerce (DOC) must develop a distributed solar value methodology and submit it to the PUC for approval no later than January 31, 2014. The DOC must consult with stakeholders and may consider factors such as the cost or benefit of solar operation to the utility, credit for locally manufactured or assembled energy systems, and systems installed at high-value locations on the grid.

Community Solar Garden Program: Xcel must file a plan to offer a Community Solar Garden by 9/30/2013. Other utilities may also file applications for Community Solar Programs if they choose. The program must be designed to offset energy use for at least 5 subscribers, of which no single subscriber may have more than a 40% interest, and each subscription must represent at least 200 watts of the system’s generating capacity. Subscribers must be retail customers of the utility and located in the same county or a county contiguous to where the facility is located. Subscribers are compensated at the VOST rate (or, the retail rate for the period of time before the VOST is available). Community projects may also be eligible for either of the new production incentives created by the bill. The utility may own the project, or another entity may own the project and sell the electricity to the utility (per net metering rules). A non-utility project owner or subscriber will not be considered a utility because of their participation in a Community Solar project.  Systems may not exceed 1 MW, and may not exceed the Individual System Generation Limits described above under the Net Metering section above.  Systems may be ground- or roof-mounted, but must be located within the utility service territory.

Renewable Portfolio Standard: In addition to the existing state RPS, IOUs are required to meet a solar standard of 1.5% of retail electric sales by 2020. Ten percent of that carve-out must be met with systems of 20 kW or less. Systems used to satisfy this standard may not be used to satisfy requirements under the existing RPS, and vice versa. RECs associated with solar installed and generating in Minnesota on or after 5/24/2013 but before 2020 maybe used to meet the solar energy standard. The state also set a goal of obtaining 10% of retail electric sales from solar by 2030.

 

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