Purpose

• To update Minnesota law so hydroelectric energy can be counted as an eligible energy technology for energy programs, alongside other renewable sources like solar and wind.

Main provisions

Expanded list of eligible energy technologies

• The bill adds hydroelectric power to the list of technologies eligible to generate electricity under Minnesota’s energy program, regardless of capacity, as long as the facility was in operation by February 8, 2023.
• The bill keeps the existing eligible technologies (solar, wind, hydrogen, and biomass) but clarifies details about how they count toward eligible energy technology.

New and clarified definitions

• Carbonfree: A technology that generates electricity without emitting carbon dioxide.
• Eligible energy technology: An energy technology that generates electricity from the following sources:
  • Solar
  • Wind
  • Hydroelectric (any capacity, with the operation-by-date requirement)
  • Hydrogen produced from the listed resources
  • Biomass (see details below)
  • Energy recovery facility that captures the heat value of waste as a primary fuel (see details below)

Biomass and related energy sources

• Biomass includes, among others:
  • Landfill gas
  • An anaerobic digestion system
  • The predominantly organic components of wastewater effluent, sludge, or related byproducts from publicly owned treatment works
• Biomass excludes incineration of wastewater sludge to produce electricity.
• An energy recovery facility that uses the heat value of mixed municipal solid waste (MSW) or refuse-derived fuel (RDF) as a primary fuel is eligible, with certain exceptions described elsewhere in the statute.

Electric utilities and governance terms

• The bill provides definitions for:
  • Electric utility (types include public utilities, certain co-ops and districts, and municipal or other utilities serving electric service)
  • Environmental justice area (a Minnesota area meeting one or more of several criteria based on U.S. Census Bureau data)
  • Total retail electric sales (the annual kilowatt-hours sold to retail customers or to distribution utilities for distribution to retail customers)

Environmental justice area criteria

• An environmental justice area is defined as a Minnesota area meeting at least one criterion, such as:
  • 40% or more of the area’s population is nonwhite
  • 35% or more of households have income at or below 200% of the federal poverty level
  • 40% or more of area residents over age five have limited English proficiency
  • The area is located within Indian country (per U.S. law)

Significant changes to existing law

• The major change is the broad inclusion of hydroelectric energy of any capacity as an eligible energy technology, provided the facility was in operation by February 8, 2023. This expands what counts toward eligibility and potential program credits or support.
• The bill also codifies new definitions (carbonfree, environmental justice area, total retail electric sales) that could affect how programs apply eligibility, targeting, or metric calculations in the future.

Implementation notes

• The changes apply to Minnesota Statutes 2024, section 216B.1691, subdivision 1, updating how “eligible energy technology” is defined and which technologies count toward energy policy goals.

Potential implications

• Hydroelectric projects that meet the operation-by-date requirement could qualify for programs that previously favored only solar, wind, biomass, hydrogen, or certain waste-derived fuels.
• The environmental justice area definition may influence where energy programs focus benefits, investments, or permitting considerations.
• Clarifying terms like “carbonfree” and “total retail electric sales” could affect how goals are measured and reported by utilities and agencies.

Relevant Terms - eligible energy technology - hydroelectric - capacity (MW) - operation as of February 8, 2023 - solar - wind - hydrogen - biomass - landfill gas - anaerobic digester - wastewater effluent - sludge - publicly owned treatment works - energy recovery facility - mixed municipal solid waste (MSW) - refuse-derived fuel (RDF) - electric utility - environmental justice area - United States Census Bureau - Indian country - total retail electric sales - carbonfree - carbon dioxide - 18 U.S.C. 1151