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S.F. No. 1039 - Renewable Development Account Modifications; Appropriations for Net Zero Emissions Project and Biomass Business Compensation (2nd Engrossment)
Author: Senator Michael P. Goggin
Prepared By: Carlon D. Fontaine, Senate Counsel (651/296-4395)
Date: March 14, 2019


Section 1.  Renewable development account. Beginning in 2020, fixes the annual contribution to the renewable development account required for Xcel Energy’s Prairie Island and Monticello nuclear generating plants at $33,000,000 in fiscal year 2020; $31,000,000 in fiscal year 2021; and $20,000,000 in fiscal year 2022 and thereafter. Once both nuclear plants are closed, the amount collected would be fixed at $12,750,000 per year ($7,500,000 attributed to the Prairie Island plant and $5,250,000 for the Monticello plant). Clarifies that recovery of funds withheld shall be done through a rate rider. Directs Xcel to select members of the advisory group. Allows Xcel Energy to pay the third party evaluator from money withheld from the transfer to the renewable development account. Provides a mechanism for determining when sufficient funds are in the account to require a grant cycle. Makes other technical, clarifying, and conforming changes.

Sec. 2. Prairie Island Net Zero Project.  Establishes the Prairie Island Net Zero Project with the goal of having the Prairie Island Indian Community develop an energy system implementing renewable energy projects that results in net zero emissions. Requires the Prairie Island Indian Community to file a plan with the commissioner of employment and economic development by July 1, 2019, and updated annually until the program is complete, describing the project elements and implementation strategy.

Sec. 3Biomass Business Compensation.

Subdivision 1.  Definitions.  Provides definitions for “biomass plant,” “early termination,” and “operating income” as used in the bill.

Subd. 2.  Office of Administrative Hearings; claims process.  Requires the chief administrative law judge of the Office of Administrative Hearings to name an administrative law judge to administer a claims award process to compensate businesses negatively affected by the sale and closure of a biomass plant located in the city of Benson.  Allows the administrative law judge to create a process to consider claims for affected businesses and issue awards to eligible businesses.  Provides that awards are final and not subject to judicial review.  Specifies that an award does not constitute an admission of liability by the state.

Subd. 3.  Eligibility.  Establishes the eligibility threshold for compensation.  Requires an affected business to verify that as of May 1, 2017, it was operating under the terms of a valid contract or provide other documentation demonstrating an ongoing business relationship with the biomass plant or the fertilizer plant integrated within the biomass plant.

Subd. 4.  Types of claims.   Allows an eligible business to make claims based on either or both decreased operating income or the loss of value of investment in real or personal property.  Provides the information to be presented for each type of claim.

Subd. 5.  Limitations on awards.  Provides the limitations for a compensation award for decreased operating income claim.  Requires the use, sales, salvage, or scrap value of the property to be deducted from a compensation award for a loss of value of investments in real or personal property claim.  Requires any related payment received from business interruption insurance policies, settlements, or other forms of compensation to be deducted from any compensation award.

Subd. 6.  Priority.  Allows the administrative law judge to give priority to claims by eligible businesses that demonstrate a significant effort to pursue other business opportunities or mitigate losses resulting from the closure of the biomass plant.

Subd. 7.  Awarding claims.  Specifies that awards must be awarded proportionally if the amount provided for compensation in the biomass business compensation account is insufficient to fully award all eligible claims.

Subd. 8.  Deadlines.  Establishes deadlines for filing claims and for issuing orders on award determinations.

Subd. 9Expiration. Sets a section expiration date of June 30, 2022.

Sec. 4.  Biomass business compensation account.

Subdivision 1.  Account established.  Establishes a biomass business compensation account in the special revenue fund in the state treasury.

Subd. 2.  Funding for the special account.  Requires $40,000,000 to be transferred on July 1, 2019, from the renewable development account to the biomass business compensation account and appropriated for payment of eligible obligations under the biomass business compensation program.

Subd. 3.  Payment of expenses.  Provides a mechanism for the chief administrative law judge to certify costs incurred to administer the biomass business compensation claims process.  Specifies that the transfer of certified costs will come from the renewable development account, not to exceed $200,000 total.

Subd. 4Expiration. Sets a section expiration date of June 30, 2022.

Sec. 5. Appropriation; Prairie Island Net Zero Project.  Awards a grant over five years from the renewable development account to the Prairie Island Indian Community to develop a net zero emissions energy system as follows: $20,000,000 in fiscal year 2020; $7,500,000 in fiscal years 2021, 2022, and 2023; and $3,700,000 in fiscal year 2024.


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