Minnesota requires electric utilities other than Xcel Energy* to make a good faith effort to generate or procure a percentage of the electricity that they generate from eligible renewable-energy technologies: solar, wind, hydroelectric (less than 60 megawatts), hydrogen and biomass — including municipal solid waste and refuse-derived fuels — that was not mandated by state law or Minnesota Public Utilities Commission (PUC) order. After January 1, 2010, hydrogen used to comply with the mandate must be generated by eligible renewable resources.
Beginning in 2005, at least 1% of the electric energy provided to retail customers must be generated using eligible renewable-energy resources. This amount will increase by 1% each year until 2015, at which time 10% of electricity should be generated by eligible renewables. At least 0.5% of the electricity generated by these Minnesota utilities should be come from biomass technologies by 2005, and 1% from biomass by 2010.
Amendments made to the mandate in 2003 authorize the PUC to establish a credit-trading program to facilitate compliance. Utilities are required every two years to file formal plans detailing how they will meet the 10% renewables objective through their integrated resource plans, including plans for transmission. The PUC has ruled that electricity generated under green-power programs does not count toward the objective. However, existing renewables potentially could count toward the objective.
Utilities must do everything they “reasonably” can to meet the renewable-energy objective, and the PUC has established specific criteria and standards on which to judge utility compliance. Under the 2005 revisions, compliance with the renewable-energy objective was included as a provision in the “Certificate of Need” process for receiving approval for new transmission or generation in Minnesota.
* The REO became a mandate for Xcel Energy in 2005. Under a separate law, Xcel Energy is also required to build or contract for 110 MW of biomass electricity, and must build or contract for 1,125 MW of wind energy by 2011. The biomass component of the mandate was fulfilled in January 2006.