The bill Senate File No. 1970 proposes amendments to Minnesota Statutes 2024, section 216B.16, introducing new provisions to regulate cost recovery procedures for public utilities when adding electric generation and transmission assets to their rate base.

Key Provisions:

1. Utility Filing Requirements:

   • A public utility seeking to add an electric generating facility or transmission asset must submit:
     
     1. A quantitative and qualitative assessment of how the proposed asset contributes to system reliability during peak demand periods.
     2. A calculation of the seasonal effective load carrying capability (for generating facilities) and the methodology used for the calculation.

2. Commission Review & Findings:

   • The Public Utilities Commission must issue an order determining:
     
     1. The extent to which the new asset improves system reliability during peak demand.
        
     2. The portion of costs and expenses that are recoverable through customer rates while ensuring rates remain just and reasonable.
        
     3. Details on cost recovery, including:
        
     4. Approved rate increases.
        
     5. Approved return on investment and its duration.
        
     6. Any costs that are not recoverable.

3. Definitions for Key Terms:

   • Electric generating facility – Infrastructure used to generate or store electricity for sale to Minnesota ratepayers.
     
   • Recoverable costs – Costs a utility can recover from ratepayers, including:
     
     1. Facility or transmission asset costs.
        
     2. Rate of return on the investment.
        
   • Seasonal effective load carrying capability – Measure of how much demand an asset can support while maintaining system reliability, as defined by the Midcontinent Independent System Operator (MISO).
     
   • System reliability – Ability to provide electricity without failure or interruption.
     
   • Transmission asset – Equipment used to transport electricity from a generation facility to a utility's distribution system.

Purpose of the Bill:

This bill aims to ensure transparency and accountability in how public utilities recover costs for new electric infrastructure. It establishes standards for evaluating system reliability and cost recovery, helping to balance consumer protection and grid reliability.

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