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Combined Heat and Power Partnership

Minnesota Net-Metering Rules

Date Last Updated6/9/2014
Policy TypeNet-Metering Policy
Policy Administrator/Contact OfficeMinnesota Department of Commerce, State Energy Office
Policy Initiation Date6/15/1983
Policy SummaryMinnesota enacted its net-metering law, which applies to CHP, in 1983. Net-metering applies to all investor-owned utilities, municipal utilities and electric cooperatives. H.F. 729 was enacted in May 2013 and adopts a number of changes to the state?s net metering regulations. For all utilities, All "qualifying facilities" <40 kW in capacity are eligible. H.F. 729 now requires that public utilities (IOUs) offer net metering for systems up to 1 MW in size. A "qualifying facility" is defined in the Public Utility Regulatory Policies Act of 1978 (PURPA) and generally includes most renewable-energy and CHP systems. There is no limit on aggregate statewide net-metering capacity. IOUs may request a cumulative generation limit once generation has reached 4% of annual retail electricity sales. For systems under 40 kW, each utility is required to compensate customers for any net excess generation (NEG) at the "average retail utility energy rate," defined as "the total annual class revenue from sales of electricity minus the annual revenue resulting from fixed charges, divided by the annual class kilowatt-hour sales." This rate is basically the same as a utility's retail rate. For systems 40 kW-1 MW at public utilities (IOUs), NEG is credited at the avoided cost rate, or customers may elect to be compensated in the form of a kWh credit. Excess credit will be reimbursed at the end of the calendar year at the avoided cost rate. H.F. 729 also requires public utilities to offer meter aggregation for customers on contiguous property that request it.
CHP Eligibility RequirementsBoth fossil-fueled and renewably-fueled CHP systems are eligible for net-metering.
Eligible Project Size (MW)Systems <40 kW at municipal utilities and electric cooperatives are eligible to net-meter. Systems up to 1 MW at IOUs are allowed to net meter.
Minimum Efficiency Required/
Other Performance Requirements
Does Not Specify
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