HOUSE RESEARCH Short Subjects
Bob Eleff Updated: December 2005
Minnesota Statutes Promoting Renewable Sources of Electricity
Minnesota laws promote the generation of electricity from renewable sources—wind, biomass, solar,
hydroelectric, and hydrogen—in several ways, as summarized below. In addition, low-interest loan
programs administered by the Minnesota Department of Agriculture’s Rural Finance Authority are available
to farmers developing renewable energy projects. Visit www.mda.state.mn.us/agfinance/.
Renewable Energy Minnesota Statutes, section 216B.1691 requires investor-owned utilities,
Objectives generation and transmission cooperatives, and municipal power agencies to make a
good faith effort to generate or purchase sufficient electricity generated from
renewable sources to account for 1 percent of total retail electric sales in 2005, and
10 percent by 2015. Xcel Energy is required to meet these objectives.
Integrated Resource Minnesota Statutes, section 216B.2422 prohibits the Public Utilities Commission
Planning (PUC) from approving a new or refurbished nonrenewable energy facility unless
the utility has demonstrated that a renewable facility is not in the public interest.
Wind Power Minnesota Statutes, sections 216B.2423 and 216B.1691 require Xcel Energy to
Mandate acquire 1,125 megawatts (Mw) of wind capacity: 425 Mw by year-end 2002, an
additional 400 Mw by 2006, and 300 Mw more by 2010. At least 100 Mw must
consist of projects of 2 Mw or less. Currently, Xcel has more than 930 Mw under
Biomass Power Minnesota Statutes, section 216B.2424 requires Xcel to acquire 110 Mw of
Mandate biomass capacity by the end of 2002, including projects fueled from poultry litter
and waste wood. The company has the full 110 Mw under contract.
Renewable Energy Minnesota Statutes, section 216C.41 provides payments of 1.5 cents per kilowatt-
Production hour for ten years to small wind generators (generally, under 2 Mw), owners of
Incentives qualified hydroelectric dams, and farm anaerobic digesters. Payments to wind
generators are limited to 200 Mw of capacity and have been fully allocated.
Minnesota Statutes, section 116C.779 annually allocates $9.4 million from the
renewable development account (see below) to fund wind production incentives,
and up to $1.5 million to fund incentives for other renewable fuels.
Utilizing Minnesota Statutes, section 216B.2411 allows all public utilities and those
Conservation municipal utilities and electric cooperatives meeting their renewable energy
Funding objectives to allocate 5 percent of the funds they are otherwise required to spend
on energy conservation improvements to construct electric generation facilities
powered by renewable fuels.
Small Producer Minnesota Statutes, section 216B.164 requires electric utilities to purchase power
Purchase from certain small power producers, including those using a renewable energy
Requirement source. The price paid to facilities under 40 Mw capacity may be set by the PUC
or may be the average retail rate.
“Green Pricing” Minnesota Statutes, section 216B.169 requires utilities to offer retail customers
Programs the option to purchase electricity generated from renewable sources.
Wind Facilities Minnesota Statutes, section 297A.68, subdivision 12 exempts from the sales tax
wind facilities and materials used to manufacture, install, construct, repair and
replace them. Under Minnesota Statutes, section 272.02, subdivision 22, real
and personal property of a wind facility, except land, are exempt from the property
tax. Minnesota Statutes, section 272.029, subdivision 7 exempts wind facilities
located in Job Opportunity Building Zones from the wind energy production tax.
Solar Energy Minnesota Statutes, section 297A.68, subdivision 29 exempts solar electric and
heating systems from the sales tax. Minnesota Statutes, section 272.02,
subdivision 24 exempts photovoltaic devices from the property tax.
Biomass and Other Minnesota Statutes, section 272.02, subdivisions 45, 47, and 54 exempt from the
Agricultural property tax attached machinery and other personal property of specific facilities,
Resources including the Fibro Minn poultry litter project in Benson and projects proposed by
Itasca Power and Rahr Malting. Subdivision 43 provides a similar exemption,
limited to five years, to any waste wood facility and any facility fulfilling Xcel’s
biomass mandate, if the exemption is approved by affected local government units.
Renewable Minnesota Statutes, section 116C.779 requires Xcel Energy to contribute $16
Development million annually to a renewable development account, at least $5.1 million of
Account which funds renewable energy projects approved by the PUC.
Utilizing Minnesota Statutes, section 216B.241 requires Xcel Energy to allocate 5 percent
Conservation of the funds it must spend on energy conservation in 2003-2008 to support research
Funding on hydrogen and other renewable fuels at the University of Minnesota.
For more information: Contact legislative analyst Bob Eleff at 651-296-8961.
The Research Department of the Minnesota House of Representatives is a nonpartisan office providing legislative,
legal, and information services to the entire House.
House Research Department ⏐ 600 State Office Building ⏐ St. Paul, MN 55155 ⏐ 651-296-6753 ⏐ www.house.mn/hrd/hrd.htm