SF4281 (Legislative Session 94 (2025-2026))
Thermal energy network plans requirements establishment
AI Generated Summary
Purpose
- Establish a regulatory framework to create and expand thermal energy networks (TEN) as an alternative to traditional gas service.
- Require public utilities to develop TEN service plans, promote emissions reductions, support local jobs and training, and protect customers, including low-income households.
- Outline how TEN projects are planned, funded, approved, and ultimately how existing gas infrastructure may be decommissioned.
Main Provisions
- Definitions and scope
- Introduces and clarifies terms such as public utility, thermal energy network (TEN), TEN service plan, project costs, and building costs.
- Establishes that TENs are plans to build networks that deliver thermal energy to customers and that utilities must submit such plans for approval.
- TEN service plan requirements
- A TEN service plan must describe the project area, the number and type of customers served, estimated project and building costs, construction schedule, and a plan to offset costs with incentives.
- Must include anticipated benefits, efforts to promote local economic development and job creation, and measures to include progressive state labor policies (local prevailing wage standards, apprenticeships, or project labor agreements).
- Requires a clearly identified transition plan if TEN would replace gas service for some customers, including timelines, customer assistance, incentives to connect to the TEN, communication plans, and information on projected heating/cooling costs for individual customers.
- Must address protections for low-income customers and how to handle stranded gas infrastructure and avoided operating costs.
- Public education and community engagement requirements, with meetings held at accessible times and locations.
- Service delivery and Commission oversight
- A public utility may supply TEN service if the TEN service plan is approved by the Public Utilities Commission (PUC), which can approve, modify, or reject plans.
- The plan must include a customer waiver process allowing exemptions from transitioning off gas if it is unduly financially burdensome or technologically infeasible.
- The utility must inform customers about the project, timelines, benefits, and available incentives; include a transition schedule for affected customers; and consider emissions reductions.
- The Commission must assess cost effectiveness, lifetime costs and benefits (including future emissions reductions), and determine decommissioning timelines for gas infrastructure.
- The plan should include guidelines if a TEN service area includes customers of another utility.
- Consumer protections and protections under existing law
- TEN service is subject to the same consumer protections and regulatory authority as gas service, including specific sections of Minnesota law.
- Cost recovery
- Utilities may recover reasonable and prudent TEN-related costs through general rate cases, subject to PUC approval.
- Costs for gas infrastructure in TEN-served areas are generally not recoverable unless necessary to ensure safety of decommissioned gas infrastructure.
- TEN priority zones and siting
- The decision of where to locate TEN projects should prioritize areas where TEN is a more prudent resource than new gas infrastructure, or where there is little or no existing gas infrastructure, or where existing gas infrastructure is aging or prone to leaks.
- Community interest in TEN, similarities to successful pilot projects, and other site characteristics are considered.
- The commission and commissioner guidance reference existing laws related to site suitability studies and related prioritization criteria.
Significant Changes to Existing Law
- Expands regulatory framework from traditional gas/electric service to include thermal energy networks as a formal, plan-driven utility alternative.
- Requires explicit TEN service plans with detailed content, public participation, and transition planning.
- Creates a formal process for evaluating the cost-effectiveness and emissions impacts of TEN projects, including consideration of decommissioning timelines for gas infrastructure.
- Introduces dedicated provisions for workforce requirements (prevailing wage, apprenticeships, etc.) and local economic benefits in TEN projects.
- Establishes priority-zone criteria to guide siting and prioritization of TEN projects over new gas infrastructure.
- Clarifies cost-recovery rules, including limitations on recovering gas-infrastructure costs in TEN areas and allows recovery of TEN-specific costs through rate cases.
- Integrates TEN planning with broader state emissions reduction goals and ongoing energy policy.
Potential Impacts to Stakeholders
- Utilities: Must develop and seek approval for TEN service plans, manage timelines, and coordinate transitions for customers, while navigating cost-recovery rules.
- Customers: Potential access to cleaner or more efficient energy options, with new costs and incentives; protections for low-income customers; options to waive transition if burdensome.
- Employees and local communities: Expected emphasis on local hiring, prevailing wages, and apprenticeship opportunities tied to TEN projects.
- Gas infrastructure: Plans may decommission or repurpose gas lines, with cost and safety considerations addressed in the plan and by the Commission.
Relevant Terms - thermal energy network (TEN) - TEN service plan - public utility - gas infrastructure - decommission - emissions reduction - transition plan - customer waiver/exemption - project costs - building costs - construction schedule - priority zones - workforce standards - prevailing wage - apprenticeships - project labor agreement - cost recovery - rate cases - stranded gas infrastructure - low-income protections - incentives - site suitability study
Bill text versions
- Introduction PDF PDF file
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| March 09, 2026 | Senate | Action | Introduction and first reading | ||
| March 09, 2026 | Senate | Action | Referred to | Energy, Utilities, Environment, and Climate |
Citations
[
{
"analysis": {
"added": [
"Adds exemptions for municipal or cooperative electric associations under chapter 308A, certain retailers of compressed natural gas, retailers of electricity for EV charging, and TEN service providers operating before 2026."
],
"removed": [],
"summary": "Amends Minnesota Statutes 2024 section 216B.02, subdivision 4, to redefine 'Public utility' and clarify exemptions related to municipalities, cooperative electric associations, and TEN-related activities.",
"modified": [
"Updates the definition of 'Public utility' to address TEN and related exemptions."
]
},
"citation": "216B.02",
"subdivision": "4"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Amends Minnesota Statutes 2024 section 216B.02, subdivision 6, to define 'Service' as natural, manufactured or mixed gas and electricity or TEN-related service, including installation, removal, or repair.",
"modified": [
"Expands the 'Service' definition to explicitly include TEN-related delivery and maintenance activities."
]
},
"citation": "216B.02",
"subdivision": "6"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Establishes definitions for Thermal Energy Networks (TEN), including definitions for building costs, project costs, and other TEN-related terms.",
"modified": []
},
"citation": "216B.2429",
"subdivision": "1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Requires a TEN service plan to include project description, costs, construction schedule, incentives, benefits, economic development commitments, and transition provisions for customers moving from gas to TEN.",
"modified": []
},
"citation": "216B.2429",
"subdivision": "2"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "References 216B.2427 subdivision 1 paragraph s; cross-reference within TEN framework.",
"modified": []
},
"citation": "216B.2427",
"subdivision": "1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Describes services provided by a TEN.",
"modified": []
},
"citation": "216B.2429",
"subdivision": "3"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Implements consumer protections for TEN service, ensuring safe, adequate, efficient, and reasonable service under TEN.",
"modified": []
},
"citation": "216B.2429",
"subdivision": "4"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Provides framework for cost recovery of reasonable and prudent TEN plan costs; distinguishes TEN vs gas infrastructure costs.",
"modified": []
},
"citation": "216B.2429",
"subdivision": "5"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Establishes TEN priority zones criteria for siting TEN projects, including conditions where TEN is prudent, or area characteristics for prioritization.",
"modified": []
},
"citation": "216B.2429",
"subdivision": "6"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference to section 116.065, subdivision 1, paragraph e, regarding prioritization characteristics used for TEN siting.",
"modified": []
},
"citation": "116.065",
"subdivision": "1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Defines electric vehicle and related terms; cross-reference to 169.011 (1)(26a).",
"modified": []
},
"citation": "169.011",
"subdivision": "1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "References to cooperative electric associations organized under chapter 308A in relation to public utilities.",
"modified": []
},
"citation": "308A",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference to section 216H.02, subdivision 1, regarding emissions reduction requirements relevant to TEN projects.",
"modified": []
},
"citation": "216H.02",
"subdivision": "1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference to 216B.03 as part of TEN-related consumer protections; no substantive change specified.",
"modified": []
},
"citation": "216B.03",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference to 216B.096 as part of TEN-related protections.",
"modified": []
},
"citation": "216B.096",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference to 216B.097 as part of TEN-related protections.",
"modified": []
},
"citation": "216B.097",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference to 216B.0975 as part of TEN-related protections.",
"modified": []
},
"citation": "216B.0975",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference to 216B.16 subdivision 6 as part of consumer protections in TEN framework.",
"modified": []
},
"citation": "216B.16",
"subdivision": "6"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference to 216B.16 subdivision 14.",
"modified": []
},
"citation": "216B.16",
"subdivision": "14"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference to 216B.16 subdivision 15.",
"modified": []
},
"citation": "216B.16",
"subdivision": "15"
}
]Progress through the legislative process
In Committee