Purpose

To update Minnesota energy policy by expanding what counts as an eligible energy technology, with a specific emphasis on including hydroelectric power of any capacity, and by clarifying related definitions and terms used in state energy programs.

Key Definitions and Scope

• Carbonfree: a technology that generates electricity without emitting carbon dioxide.
• Eligible energy technology: a defined list of energy sources that can count toward renewable energy or clean energy goals. The bill adds hydroelectric power of any capacity to this list and includes:
  • Solar
  • Wind
  • Hydroelectric (any capacity, with a condition)
  • Hydrogen produced from listed resources
  • Biomass, including landfill gas, anaerobic digestion systems, and the predominantly organic parts of wastewater treatment byproducts
  • Excludes incineration of wastewater sludge to produce electricity
  • Energy recovery facility that uses the heat value of mixed municipal solid waste or refuse-derived fuel as a primary fuel
• Hydroelectric capacity condition: the hydroelectric facility must be in operation as of February 8, 2023. The bill distinguishes between smaller (<100 MW) and larger (100 MW or more) hydro facilities, but both are included if in operation by the date.
• Electric utility: defined to include public utilities, certain cooperatives, municipal power agencies, power districts, and related entities.
• Environmental justice area: areas that meet one or more criteria based on U.S. Census data, including:
  • 40% or more of the population is nonwhite
  • 35% or more of households have income at or below 200% of the federal poverty level
  • 40% or more of residents over age five have limited English proficiency
  • location within Indian country as defined in federal law
• Total retail electric sales: the yearly kilowatt-hours sold by an electric utility to retail customers or to a distribution utility for retail customers.

Main Provisions

• Amends Minnesota Statutes 2024 section 216B.1691 subdivision 1 to redefine eligible energy technology and to include hydroelectric energy of any capacity (subject to the operation date condition).
• Establishes precise definitions for carbonfree and environmental justice areas to guide program eligibility and planning.
• Specifies what counts as biomass and lists eligible biomass sources (including landfill gas and anaerobic digester-derived materials) and where certain wastewater byproducts fit into the eligible technology framework.
• Adds energy recovery facilities (from waste-derived fuels) as an eligible technology when used as a primary energy source.
• Updates the scope of electric utilities to ensure the definition covers a broad set of entities that deliver electric service.

Significant Changes to Existing Law

• Expands the definition of eligible energy technology to explicitly include hydroelectric energy of any capacity, provided the facility was operational by February 8, 2023.
• Broadens the set of eligible energy sources beyond traditional renewables (solar, wind) to include hydrogen, various forms of biomass, and waste-to-energy concepts.
• Introduces formal environmental justice area criteria to guide policy and potential program targeting.

Potential Implications

• More hydroelectric projects (regardless of size) could qualify for programs, credits, or other support used under the state’s energy policy.
• The explicit environmental justice criteria may influence where programs are prioritized or how projects are evaluated in terms of location and community impact.
• The redefinition of eligible technologies could affect planning, investment, and regulatory decisions for utilities and energy developers.

Relevant terms - carbonfree - eligible energy technology - hydroelectric - solar - wind - hydrogen - biomass - landfill gas - anaerobic digester - wastewater sludge - energy recovery facility - mixed Municipal Solid Waste - refuse-derived fuel - electric utility - environmental justice area - United States Census Bureau - Indian country - total retail electric sales - operation as of February 8, 2023