As part of the merger settlement for Northern States Power and New Century Energy of Colorado, the new Xcel Energy agreed to develop both a distributed generation tariff up to 5 MW and a small wind tariff up to 2 MW (Docket E-002/M-00-1747). Xcel, the state's largest investor-owned utility, has established Interconnection Guidelines For Parallel Operation of Distribution Connected Customer-Owned Generation with a 3-page preliminary application form and a 5-page final application form.

As part of the 2001 Omnibus Energy Bill (SF 722, Chapter 212), the Minnesota legislature required the state's Public Utility Commission (PUC) to develop standards for interconnection and operation of distributed generation facilities (renewables and natural gas-fueled) up to 10 megawatts of capacity. Each utility is required to file distributed generation tariffs consistent with the standards established by the PUC, as well as maintain records and file reports annually regarding applications for interconnection of distributed generation. The law also requires utilities to offer customers one or more rate options for electricity generated using renewable energy facilities or high-efficiency/low-emission distributed generating facilities such as fuel cells or microturbines. A PUC staff briefing paper provides additional background and recommendations on establishing interconnection standards.

Minnesota's new tariff proceedings and legislation described above will greatly simplify interconnection agreements for wind energy facilities throughout the state. Until the other tariffs are approved, however, wind system owners are likely to be subject to a utility's existing interconnection requirements for "qualifying facilities" under the federal PURPA law.

Wind and Photovoltaic Systems Property Tax Exemption
In 1992, the Minnesota legislature enacted MS2000 272.02(21) and (23) to exclude the value added by photovoltaic and wind energy systems rated less than 2 MW from property taxation. Partial exemptions apply to larger systems. Current rules state that wind systems between 2 and 12 MW of rated capacity are about 90% exempt from property taxes, and projects over 12 MW are about 75% exempt. In Minnesota, utilities face higher property tax rates than private companies, so exempting a portion of a project's value from the property tax creates a competitive advantage for independent power producers. This statute applies to the residential, commercial, and utility sectors for the life of the system, although since the property tax valuation is determined at the time of initial installation the wind exemptions apply to a decreasing tax as the property depreciates which important to consider in calculating life cycle costs.

Wind Energy Generation Grants 
Minnesota is unique in offering payments for energy output, placing a premium on project production rather than providing investment credits for rated capacity which may or may not be fully utilized once installed. As enacted in MS2000 216C.41, Minnesota offers a 1.5 cent per kilowatt hour payment for electricity generated from new wind energy projects less than 2 MW in capacity. Qualifying projects will receive payments for ten years, extending beyond the current eligibility expiration date of January 1, 2005. Projects will be admitted to the program on a first come, first served basis until new wind capacity installed under the program statewide totals 100 MW. 

Legislators recognized that the state mandate for Xcel Energy (formerly NSP) to build or purchase 400 MW of wind power by 2004 and an additional 400 MW by 2013 would stimulate large, cost-competitive wind projects, and wanted to launch a program that would stimulate dispersed, locally-owned projects as well. This grant program was initiated with the goal of establishing infrastructure to support small-scale wind development. The first projects admitted into the program were owned by Moorhead Public Utility and Great River Energy. 

Minnesota's production credit roughly mirrors the federal renewable energy production incentive (REPI) that provides payment of 1.5 cents per kilowatt hour (adjusted for inflation) for electricity produced from wind and closed loop biomass. Minnesota's grant program is available for commercial, industrial, residential, nonprofit, utility, and tribal council sectors. The incentive payment is a direct, quarterly payment sent by the state, regardless of tax liability. 

Wind Energy Equipment Sales Tax Exemption 
Under MS2000 297A.25-68&72, wind energy equipment as well as all materials used to manufacture, install, construct, repair, or replace the systems are exempt from Minnesota state sales tax if they are used as an electric power source. 

For more information on state wind incentives, contact: 

Minnesota Department of Commerce Energy Division
85 7th Place E., Suite 500 
St. Paul, MN 55101-2198 
Phone (651) 297-1178 Fax (651) 297-7891 Toll Free (800) 657-3710 (MN only)
Lise Trudeau: Engineer, Renewable Energy and Advanced Technologies 
Email Energy.Info@state.mn.us  
Web: http://www.state.mn.us/portal/mn/jsp/content.do?subchannel=-536881511&id=-536881350&agency=Commerce   

Value-Added Stock Loan Participation Program
This low interest loan program, which is administered by the Department of Agriculture through the Rural Finance Authority, was created in 1994 as MS2000 41B.046 to assist farmers wishing to buy into wind generation cooperatives. Under current rules, the maximum project size is 1 MW, and the RFA provides up to $24,000 and 45% of the loan principal over 8 years. As a "participation loan," individual financial institutions issue loans with the RFA subsidizing the interest rate, with resulting rates averaging 4%. The program is funded through a revolving account and is available for residential and commercial sectors. 

Agricultural Improvement Loan Program for Wind Energy
The Minnesota Department of Agriculture administers a low-interest loan program through the state's Rural Finance Authority (RFA) to provide loans to farmers to improvements to or additions to permanent facilities, up to 45% and up to $100,000 of the loan principal with payment terms up to 10 years. Wind energy conversion equipment was added to the legislative definition of agricultural improvements (MS2000 41B.043) in 1995. Like Minnesota's Stock Loan Program, this is a "participation loan," whereby the loans are made by individual financial institutions working with the RFA. The Rural Finance Authority has a Master Participation Agreement with 365 financial institutions throughout the state, which governs the responsibilities of the various parties in such participation loans. 

For more information on state loan programs, contact:

Minnesota Department of Agriculture Rural Finance Authority
90 West Plato Boulevard
St. Paul, MN 55107-2094
Phone (612) 297-3557
Fax (612) 296-9388
Wayne W. Marzolf
Email Wayne.Marzolf@state.mn.us 
Web www.mda.state.mn.us/AgFinance/stockloan.html  and www.mda.state.mn.us/AgFinance/improvement.html 

Green Pricing Requirement
Minnesota's 2001 Omnibus Energy Bill (SF 722), requires electric utilities in the state to offer customers the option to purchase power generated from renewable sources or "high-efficiency, low-emission distributed generation, such as fuel cells or microturbines fueled by a renewable fuel." The legislation sets a non-binding goal for utilities to obtain at least 10% of the energy supplied to retail customers from renewable sources by 2015. Rates charged for the offerings must be based on the difference between the cost of the renewable energy and the same amount of nonrenewable energy. Utilities may generate the renewable energy or purchase credits from a renewable energy provider certified by the Public Utilities Commission. 

For more information contact: 

Minnesota Public Utilities Commission 
121 E. 7th Place, 3rd Floor 
St. Paul, MN 55101 
Phone (612) 296-7124
Fax (612) 297-7073
Susan Mackenzie
Email: Susan.Mackenzie@state.mn.us 

Additional information can be found at AWEA's inventory of state incentives for wind.

We are unaware of any Minnesota utilities currently offering additional incentives for small wind energy systems.

In 2005, the Minnesota Department of Commerce contracted with WindLogics to develop high resolution wind maps.  WindLogics is a Minnesota company that is at the leading edge of wind resource assessment using atmospheric modeling. These maps show the wind speed resources at 30, 80, and 100 meters, as well as capacity factor and energy production estimates for a 1.65 MW wind turbine at 80 meters.  In addition the maps have been developed at a finer resolution than the previous maps (500 meters vs. 750 meters). 

US Department of Energy has also produced wind resource maps for each state. The map for Minnesota can be found here. You may also find the definitions of Wind Power Classes for the maps helpful. There is additional information in the Wind Energy Atlas of the United States, where you can review maps for other locations in the US or get more information about how the maps were created.

You may also find useful information at the web site for the National Renewable Energy Laboratory (NREL). This site contains extensive information about wind resources in the United States.

The Minnesota Department of Commerce has developed a 27-page Guide on Small Wind Energy Systems. Printed copies are available upon request from the Department of Commerce. Minnesota SEED conducted a Locally-Owned Wind Energy Feasibility Project which includes full feasibility studies for three small sub-40 kW projects in SE Minnesota.

The Izaak Walton League of America has recently reprinted its popular Landowner's Guide to Wind Energy In the Upper Midwest which discusses how landowners can evaluate their wind resources and the economics of wind power under a variety of development scenarios. A large number of links are compiled on the Sustainable Minnesota wind web page. The American Wind Energy Association provides a list of wind turbine manufacturers

For a list of wind turbine installers in your area, please contact the manufacturers.

We suggest that you contact your local utility and request information on their interconnection policies. Tom Kulas (Phone 612-330-6002) is an engineer involved in distribution interconnections at Xcel Energy.

Links to Minnesota's investor-owned utilities can be found here The Minnesota Municipal Utility Association has posted a map of the state’s 126 municipal utilities and links to many of its member utilities’ home pages. The Minnesota Rural Electric Association also has an interactive map and links to its member co-ops’ pages.

The Minnesota Public Utility Commission is responsible for regulations relating to the electric utility industry.

Minnesota Public Utilities Commission
121 Seventh Place East Suite 350
St. Paul, MN, 55101 
Phone (651) 296-7124
Fax (651) 297-7073
Janet Gonzalez
Email janet.gonzalez@state.mn.us  
Web www.puc.state.mn.us  

The Department of Commerce administers the State Energy Program in the state.

Minnesota Department of Commerce, State Energy Program
85 7th Place East, Suite 500 
St. Paul, MN 55101-2198 
Phone (651)296-5175    Toll Free (800)657-3710 (MN only)
Fax (651) 297-7891 
Email: energy.info@state.mn.us    
Web: http://www.state.mn.us/portal/mn/jsp/content.do?subchannel=-536881511&id=-536881350&agency=Commerce

Minnesota Pollution Control Agency
520 Lafayette Road North, Sixth Floor
St. Paul, MN, 55155 
Phone (651) 296-7301
Fax (651) 296-6334
Karen A. Studders, Commissioner
Email Karen.Studders@pca.state.mn.us 
Web www.pca.state.mn.us/netscape.shtml  

The Chicago Regional Office manages the State Energy Program in the DOE Region of 8 states in the Midwest. 

The US Department of Energy’s Energy Efficiency and Renewable Energy Network maintains a list of state contacts

Minnesota Renewable Energy Society
2928 Fifth Avenue South
Minneapolis, MN 55408
Phone (612) 872-3285
David Pogany, President
Email d.pogany@src-mn.org  
Web http://tcfreenet.org/org/mres/

Fresh-Energy
408 St. Peter St. Ste 220
St. Paul, MN 55102
Phone: 651-225-0878
Fax: 651-225-0870
Email: info@fresh-energy.org.
Web: http://www.fresh-energy.org/

AWEA Great Plains office
448 Morgan Avenue South, Suite 300
Minneapolis, MN 55405
Phone (612) 377-3270
Fax (612) 374-2181
John Dunlop, Regional Manager
Email JRDunlop@igc.org  

Izaak Walton League of America Midwest Office
1619 Dayton Avenue, Suite 202
St. Paul, MN 55104
Phone (651) 649-1446
Fax (651) 649-1494
E-Mail midwestoffice@iwla.org

Windustry
2105 First Avenue South
Minneapolis, MN 55404
Phone (800) 365-5441 or (612) 870-3465
Fax (612) 374-2601
Email brian@windustry.org
Web www.windustry.org/smallwind 

SMALL WIND FAQ | AWEA HOME PAGE | SMALL WIND HOME PAGE

© 2005 by the American Wind Energy Association.
May be freely distributed provided this notice is included.
All other rights reserved.