The C-BED tariff rate must be higher in the first 10 years of the agreement than the last 10 years. The intent of this structure is to provide renewable energy projects with better cash flow during the first 10 years, making 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 over the 20-year term of the contracts.
Minnesota political subdivisions and local governments may participate in C-BED projects in a variety of ways, including outright ownership, but are prohibited from acquiring property for such projects through eminent domain.
Utilities are required to consider C-BED projects, but they are not required to sign C-BED contracts. C-BED tariffs can be used to satisfy the state's Renewable Energy Standard.
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 qualifying 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.
- The project must have a resolution of support adopted by the county board of each county in which the project is to be located, or in the case of a project located within the boundaries of a reservation, the tribal council for that reservation.
- All owners of property traversed by transmission lines serving the project must be given the opportunity to invest.