The department, with the approval of the governor, is authorized but not required to determine if surplus steam heat is or may be produced at the life skills and transition center, and to sell any surplus steam heat to the city of Grafton. The sale may be on such terms and conditions as may be deemed necessary by the department, provided that no sale may be made for less than the cost of producing the surplus steam heat. A sale of steam heat, if made by the department to the city of Grafton, may not be construed as the distribution of heat under title 49.