The proposed bill introduces significant changes to Minnesota's energy regulations, particularly for large water appropriation projects and data centers. It requires preapplication filings for large water appropriation projects that exceed certain consumption thresholds, ensuring early engagement with the relevant department. The bill also imposes new requirements for permit applications, including environmental reviews for data centers that significantly expand their energy load. Notably, data centers are exempted from contributing to energy conservation plans, and the definition of large energy facilities is modified to include backup generators for data centers. Additionally, a fee structure for data centers is established, and the Public Utilities Commission is tasked with creating a new tariff specifically for them, funded by fees from these centers to support energy conservation initiatives.

Moreover, the bill mandates that by December 31, 2030, data centers must generate or procure at least 65% of their electricity from carbon-free sources, increasing to 100% thereafter. Compliance will be monitored through the Minnesota Renewable Energy Tracking System or another approved entity, and data centers must submit a compliance plan before starting operations. They are also required to adhere to prevailing wage laws for construction and report their energy consumption and waste heat management annually. The fee structure for data centers is based on peak electricity demand, and the Public Utilities Commission must create a clean energy tariff by January 1, 2026, ensuring that data centers do not hinder the utility's renewable energy standards or system reliability. Noncompliance with these regulations will result in ineligibility for state financial incentives.

Statutes affected:
Introduction: 103G.265, 103G.271, 116D.04, 216B.2402, 216B.241, 216B.2421