Minnesota SF 5395: Initiation requirement of a proceeding at the Public Utilities Commission regarding cost allocation of distribution system upgrades

Bill Text

1.1 A bill for an act​
1.2 relating to energy; requiring the initiation of a proceeding at the Public Utilities​
1.3 Commission regarding cost allocation of distribution system upgrades; establishing​
1.4 an interconnection ombudsperson position at the Public Utilities Commission;​
1.5 establishing a surcharge on certain interconnection applications.​
1.6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:​
1.7 Section 1. INTERCONNECTION DOCKET; PUBLIC UTILITIES COMMISSION.​
1.8 (a) No later than September 1, 2024, the commission must initiate a proceeding to​
1.9 establish, by order, generic standards to allocate utility costs necessary to upgrade a utility's​
1.10 distribution system by increasing hosting capacity at a congested location in order to allow​
1.11 for the interconnection of distributed generation facilities at that location. The tariff standards​
1.12 must reflect an interconnection process designed to, at a minimum:​
1.13 (1) accelerate the expansion of hosting capacity at multiple points on a utility's distribution​
1.14 system by ensuring that the cost of upgrades is shared fairly among owners of distributed​
1.15 generation projects seeking interconnection on a pro rata basis according to the amount of​
1.16 the expanded capacity utilized by each interconnected distributed generation facility;​
1.17 (2) reduce the capital burden on owners of distributed generation facilities seeking​
1.18 interconnection;​
1.19 (3) establish a minimum level of upgrade costs an expansion of hosting capacity must​
1.20 reach in order to be eligible to participate in the cost-share process and below which a trigger​
1.21 project must bear the full cost of the upgrade;​
1.22 (4) establish a distributed generation facility's pro rata cost-share amount as the utility's​
1.23 total cost of the upgrade divided by the incremental capacity resulting from the upgrade,​
1​Section 1.​
24-07868 as introduced​03/18/24 REVISOR RSI/VJ​
SENATE​
STATE OF MINNESOTA​
S.F. No. 5395​NINETY-THIRD SESSION​
(SENATE AUTHORS: XIONG and Port)​
OFFICIAL STATUS​D-PG​DATE​
Introduction and first reading​13581​04/09/2024​
Referred to Energy, Utilities, Environment, and Climate​
Author added Port​13901​04/15/2024​
See SF4942, HF5247​

2.1 and multiplying the result by the nameplate capacity of the distributed generation facility​
2.2 seeking interconnection;​
2.3 (5) establish a minimum proportion of the total upgrade cost that a utility must receive​
2.4 from one or more distributed generation facilities before initiating constructing an upgrade;​
2.5 (6) allow trigger projects and any other distributed generation facilities to pay a utility​
2.6 more than the trigger project's or distributed generation facility's pro rata cost-share amount​
2.7 only if needed to meet the minimum threshold established in clause (4) and to receive refunds​
2.8 for amounts paid beyond the trigger project's or distributed generation facility's pro rata​
2.9 share of expansion costs from distributed generation projects that subsequently interconnect​
2.10 at the applicable location;​
2.11 (7) prohibit owners of distributed generation facilities from using any unsubscribed​
2.12 capacity at an interconnection that has undergone an upgrade without the distributed​
2.13 generation owners paying the distributed generation owner's pro rata cost of the upgrade;​
2.14 and​
2.15 (8) limit the amount of unrecovered cost associated with upgraded capacity that is not​
2.16 used by a participating distributed generation facility that may be allocated to ratepayers.​
2.17 (b) For the purposes of this section, the following terms have the meanings given:​
2.18 (1) "distributed generation project" means an energy generating system with a capacity​
2.19 no greater than ten megawatts;​
2.20 (2) "hosting capacity" means the maximum capacity of a utility distribution system to​
2.21 transport electricity at a specific location without compromising the safety or reliability of​
2.22 the distribution system;​
2.23 (3) "trigger project" means the initial distributed generation project whose application​
2.24 for interconnection of a distributed generation project alerts a utility that an upgrade is​
2.25 needed in order to accommodate the trigger project and any future interconnections at the​
2.26 applicable location;​
2.27 (4) "upgrade" means a modification of a utility's distribution system at a specific location​
2.28 that is necessary to allow the interconnection of distributed generation projects by increasing​
2.29 hosting capacity at the applicable location, including but not limited to installing or modifying​
2.30 equipment at a substation or along a distribution line. Upgrade does not mean an expansion​
2.31 of hosting capacity dedicated solely to the interconnection of a single distributed generation​
2.32 project; and​
2.33 (5) "utility" means a utility that provides electric service.​
2​Section 1.​
24-07868 as introduced​03/18/24 REVISOR RSI/VJ​

3.1 EFFECT