This bill, Minnesota Senate File No. 1970, seeks to modify procedures for cost recovery related to public utility electric generation and transmission assets by amending Minnesota Statutes 2024, section 216B.16.

Key Provisions:

1. Utility Filing Requirements:

   • Public utilities proposing to add an electric generating facility or transmission asset to their rate base must submit:
     
     1. A quantitative and qualitative assessment of the asset’s contribution to system reliability during peak demand.
        
     2. For electric generating facilities, a seasonal effective load carrying capability (ELCC) calculation, along with an explanation of the methodology used.

2. Commission Order Requirements:

   • Any Minnesota Public Utilities Commission decision on adding assets to a utility's rate base must:
     
     1. Explain the asset’s contribution to system reliability during peak demand.
        
     2. Determine the portion of costs and expenses that are recoverable through rates deemed just and reasonable.
        
     3. Provide details on:
        
     4. Approved rate increases.
        
     5. Approved rate of return for the asset and its duration.
        
     6. Costs and expenses that are not recoverable from ratepayers.

3. Definitions of Key Terms:

   • Electric generating facility: Any asset used to generate or store electricity for retail sale in Minnesota.
     
   • Recoverable costs: Revenue a public utility may collect from ratepayers to cover:
     
     1. The cost of the generating facility.
        
     2. The cost of transmission assets.
        
     3. The utility’s rate of return on those investments.
        
   • Seasonal Effective Load Carrying Capability (ELCC): The additional load an electric system can handle while maintaining system reliability, as determined by the Midcontinent Independent System Operator (MISO).
     
   • System reliability: The ability of an electric system to deliver uninterrupted electricity to customers.
     
   • Transmission asset: Equipment needed to move electricity from a generating facility to a distribution system for retail delivery.

Purpose and Impact:

• The bill enhances transparency and accountability by ensuring that utilities justify their generation and transmission asset investments.
  
• It establishes clear criteria for cost recovery, helping to ensure that only reasonable and justified costs are passed to Minnesota ratepayers.
  
• It aligns Minnesota’s regulatory framework with regional grid reliability standards by requiring ELCC calculations as defined by MISO.

This legislation is part of ongoing efforts to ensure regulated utility investments support grid reliability, cost-effectiveness, and equitable rates for consumers.