Section 1. Citation. Provides a title for the act to be known as the Natural Gas Innovation Act.

Section 2. Natural gas utility alternative resource plans. 

Subdivision 1.  Definitions. Provides definitions for terms including “alternative resource,” “biogas,” “natural gas utility,” “power-to-hydrogen,” “renewable natural gas,” “renewable gaseous fuel,” and “total increment cost.”

Subdivision 2. Renewable natural gas and alternative resource goals. Allows a natural gas utility to assist the state in meeting its renewable energy and greenhouse gas reduction goals by using alternative resources to meet customer energy demands. Specifies that a utility's total incremental cost to achieve greenhouse gas reductions must not exceed five percent of the natural gas utility's total annual revenue requirement.

Subdivision 3. Alternative resource plans. Pararagraph (a) allows a natural gas utility to file an alternative resource plan with the Public Utilities Commission (PUC). Requires an alternative resource plan to include the recommended alternative resources the utility plans to implement to advance the state's renewable energy and greenhouse gas reduction goals. Requires the utility's recommended plan to discuss:

• any pilot program proposed by the natural gas utility, including an estimate of the total incremental costs to implement the pilot;
• a third-party analysis of the lifecycle greenhouse gas intensity of any alternative resources proposed to be included in the plan;
• a third-party analysis of the forecasted lifecycle greenhouse gas emissions reductions achieved or the lifecycle greenhouse gas emissions avoided if the alternative resources are implemented;
• the process used to develop the lifecycle greenhouse gas accounting methodology used;
• whether the recommended plan supports the development and use of alternative agricultural products, waste reduction, reuse, or anaerobic digestion of organic waste, and the recovery of energy from waste water;
• a description of third-party systems and processes the utility plans to use;
• a description of known local job impacts and the steps to maximize the availability of construction employment opportunities for local workers; and
• a report on the utility's progress toward implementing the recommendations contained in its previously filed alternative resource plan, if applicable.

Paragraph (b) requires the PUC to approve, modify, or deny the plan within 12 months of filing. Provides considerations for the commission when making their determination.

Paragraph (c) provides that PUC approval of a plan constitutes prima facie evidence of the reasonableness of the investments and costs incurred pursuant to the plan. Allows actual incremental costs incurred pursuant to an approved plan and costs incurred in obtaining the third-party analysis to be recovered via the utility's purchase gas adjustment or the utility's next general rate case.

Paragraph (d) allows a utility, without filing an alternative resource plan, to propose, and the PUC to approve cost recovery for alternative resources as specified.

Paragraph (e) requires a utility with an approved plan to provide annual status reports to the PUC regarding the work completed pursuant to the plan.  Allows the natural gas utility to propose modifications to pilot programs. Allows the PUC to approve the continuation of pilot programs, require the utility to file a new or modified plan to account for changed circumstances, or disapprove the continuation of pilot programs.

Paragraph (f) allows a utility to file an alternative resource plan after the section becomes effective.

Section 3. Renewable gaseous fuel inventory. Paragaph (a) requires that by June 15, 2021, the Department of Commerce develop an inventory of renewable gaseous fuel resources available to Minnesota. Specifies that the inventory include:

• a list of the potential renewable natural gas sources in Minnesota and the estimated potential production quantities available at each source;
• an estimate of the energy content of listed renewable natural gas sources;
• a description of the technologies available to Minnesota for renewable gaseous fuel production and an estimate of the potential energy production by technology;
• a list of the existing biogas and renewable natural gas production sites in Minnesota;
• an assessment of the market viability of Minnesota renewable natural gas production; and
• a discussion of whether development of a system of tradable thermal credits would be beneficial for the development of renewable thermal resources in the state.

Paragraph (b) allows the Department of Commerce to assess natural gas utilities serving more than 800,000 customers within the state during the last calendar year for the costs of the inventory. Provides that the assessments are not subject to a cap.

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