Community-Based Energy Development (C-BED) Tariff (Minnesota) Production Incentive

Summary

Last modified on February 12, 2015.

Financial Incentive Program

Place	Minnesota
Name	Community-Based Energy Development (C-BED) Tariff
Incentive Type	Performance-Based Incentive
Applicable Sector	Utility, Municipal Utility, Investor-Owned Utility, Rural Electric Cooperative
Eligible Technologies	Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Municipal Solid Waste, Hydrogen
Active Incentive	No
Energy Category	Renewable Energy Incentive Programs
Amount	To be filed by utilities by Dec 31, 2007
Terms	20-year power purchase agreement under which the tariff must be higher in first ten years than during the second ten
Website	http://www.windustry.com/community/cbed.htm
References	DSIRE

Summary

Under the Community-Based Energy Development (C-BED) each public utility in Minnesota is required to file its tariff rates with the state Public Utilities Commission (PUC) for a 20-year power purchase agreement (PPA) for community-owned renewable energy projects by December 1, 2007.

Municipal and cooperative utilities must file a tariff 90 days after the first PUC order approval of a tariff for a public utility. The tariff rate must be higher in the first ten years of the agreement than the last ten years. The intent of this structure is to provide renewable energy projects with better cash flow during the first ten years. This makes it easier to achieve financing and pay project debt. The lower rate in the second half of the project ensures declining power costs for the utility and ratepayers over the 20 year term of the contracts. Under the original C-BED legislation, the tariff rate was capped at a net present value of 2.7 cents per kilowatt hour calculated over the life of the PPA (using the relevant utility’s normal discount rate). This cap was eliminated in 2007.

C-BED tariffs can be used to satisfy the state's Renewable Energy Standard. Utilities are required to consider C-BED projects, but they are not required to sign C-BED contracts.

In order for a project to be considered community-based and eligible for C-BED tariffs: - 51% of the revenues from the power purchase agreement must flow to Minnesota-based owners and other local entities - No single wind project investor can own more than 15 percent of a project consisting of two or more wind turbine, except for local governments which may be the sole owners of community-based projects. - All owners of property traversed by transmission lines serving the project are given the opportunity to invest.

Authorities (Please contact the if there are any file problems.)

Authority 1:	SF 1368 (2005)
Date Effective	2005-07-01
Date Enacted	2005-05-25

Authority 2:	SF 145 (2007)
Date Effective	2007-05-26
Date Enacted	2007-05-25

Incentive Contact

Contact Name	Lise Trudeau
Department	Minnesota Department of Commerce
Division	Energy Division
Address	85 7th Place East, Suite 500
Place	St. Paul, Minnesota
Zip/Postal Code	55101-2198
Phone	(651) 297-1178
Email	lise.trudeau@state.mn.us
Website	http://www.energy.mn.gov

• Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.