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S.B. 202 Enrolled
1
ENERGY RESOURCE AND CARBON EMISSION
2
REDUCTION INITIATIVE
3
2008 GENERAL SESSION
4
STATE OF UTAH
5
Chief Sponsor: Curtis S. Bramble
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House Sponsor:
David Clark
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Cosponsor:Mike Dmitrich
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LONG TITLE
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General Description:
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This bill provides that an electrical corporation or municipal electric utility maintain a
12
percentage of electricity sold in the form of renewable energy resources and makes other
13
changes concerning the acquisition of energy resources.
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Highlighted Provisions:
15
This bill:
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. addresses independent and qualifying power producers;
17
. addresses the application of Title 54, Chapter 17, Energy Resource Procurement
18
Act, to certain renewable energy resources;
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. defines terms;
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. provides that 20% of an electrical corporation's or municipal electric utility's
21
adjusted retail electric sales beginning in the year 2025 come from qualifying
22
electricity, including renewable energy resources, if cost effective;
23
. provides for the issuance and recognition of a renewable energy certificate for
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certain electrical generation and actions by an energy user;
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. requires plans and reports concerning an electrical corporation's or municipal electric
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utility's progress in acquiring qualifying electricity;
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. addresses cost recovery for certain energy resources;
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. requires certain state agencies to make rules concerning carbon capture and
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geological storage of captured carbon emissions; and
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. makes technical changes.
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Monies Appropriated in this Bill:
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None
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Other Special Clauses:
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This bill provides an immediate effective date.
35
Utah Code Sections Affected:
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AMENDS:
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54-2-1, as last amended by Laws of Utah 2001, Chapter 212
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54-12-1, as enacted by Laws of Utah 1985, Chapter 180
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54-12-2, as last amended by Laws of Utah 1989, Chapter 4
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54-12-3, as enacted by Laws of Utah 1985, Chapter 180
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54-17-201, as last amended by Laws of Utah 2007, Chapter 289
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54-17-302, as last amended by Laws of Utah 2007, Chapter 289
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54-17-303, as enacted by Laws of Utah 2005, Chapter 11
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ENACTS:
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10-19-101, Utah Code Annotated 1953
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10-19-102, Utah Code Annotated 1953
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10-19-201, Utah Code Annotated 1953
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10-19-202, Utah Code Annotated 1953
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10-19-301, Utah Code Annotated 1953
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10-19-302, Utah Code Annotated 1953
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54-17-502, Utah Code Annotated 1953
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54-17-601, Utah Code Annotated 1953
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54-17-602, Utah Code Annotated 1953
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54-17-603, Utah Code Annotated 1953
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54-17-604, Utah Code Annotated 1953
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54-17-605, Utah Code Annotated 1953
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54-17-606, Utah Code Annotated 1953
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54-17-607, Utah Code Annotated 1953
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54-17-701, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
10-19-101
is enacted to read:
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CHAPTER 19. MUNICIPAL ELECTRIC UTILITY CARBON
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EMISSION REDUCTION ACT
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Part 1. General Provisions
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10-19-101. Title.
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This chapter is known as the "Municipal Electric Utility Carbon Emission Reduction
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Act."
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Section 2.
Section
10-19-102
is enacted to read:
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10-19-102. Definitions.
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As used in this chapter:
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(1) "Adjusted retail electric sales" means the total kilowatt-hours of retail electric sales
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of a municipal electric utility to customers in this state in a calendar year, reduced by:
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(a) the amount of those kilowatt-hours attributable to electricity generated or purchased
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in that calendar year from qualifying zero carbon emissions generation and qualifying carbon
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sequestration generation;
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(b) the amount of those kilowatt-hours attributable to electricity generated or purchased
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in that calendar year from generation located within the geographic boundary of the Western
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Electricity Coordinating Council that derives its energy from one or more of the following but
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that does not satisfy the definition of a renewable energy source or that otherwise has not been
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used to satisfy Subsection
10-19-201
(1):
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(i) wind energy;
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(ii) solar photovoltaic and solar thermal energy;
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(iii) wave, tidal, and ocean thermal energy;
85
(iv) except for combustion of wood that has been treated with chemical preservatives
86
such as creosote, pentachlorophenol or chromated copper arsenate, biomass and biomass
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byproducts, including:
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(A) organic waste;
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(B) forest or rangeland woody debris from harvesting or thinning conducted to improve
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forest or rangeland ecological health and to reduce wildfire risk;
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(C) agricultural residues;
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(D) dedicated energy crops; and
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(E) landfill gas or biogas produced from organic matter, wastewater, anaerobic
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digesters, or municipal solid waste;
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(v) geothermal energy;
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(vi) hydro-electric energy; or
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(vii) waste gas and waste heat capture or recovery; and
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(c) the number of kilowatt-hours attributable to reductions in retail sales in that calendar
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year from activities or programs promoting electric energy efficiency or conservation or more
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efficient management of electric energy load.
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(2) "Amount of kilowatt-hours attributable to electricity generated or purchased in that
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calendar year from qualifying carbon sequestration generation," for qualifying carbon
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sequestration generation, means the kilowatt-hours supplied by a facility during the calendar
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year multiplied by the ratio of the amount of carbon dioxide captured from the facility and
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sequestered to the sum of the amount of carbon dioxide captured from the facility and
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sequestered plus the amount of carbon dioxide emitted from the facility during the same
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calendar year.
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(3) "Banked renewable energy certificate" means a bundled or unbundled renewable
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energy certificate that is:
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(a) not used in a calendar year to comply with this part or with a renewable energy
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program in another state; and
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(b) carried forward into a subsequent year.
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(4) "Bundled renewable energy certificate" means a renewable energy certificate for
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qualifying electricity that is acquired:
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(a) by a municipal electric utility by a trade, purchase, or other transfer of electricity
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that includes the renewable energy attributes of, or certificate that is issued for, the electricity;
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or
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(b) by a municipal electric utility by generating the electricity for which the renewable
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energy certificate is issued.
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(5) "Commission" means the Public Service Commission.
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(6) "Municipal electric utility" means any municipality that owns, operates, controls, or
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manages a facility that provides electric power for a retail customer, whether domestic,
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commercial, industrial, or otherwise.
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(7) "Qualifying carbon sequestration generation" means a fossil-fueled generating
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facility located within the geographic boundary of the Western Electricity Coordinating Council
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that:
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(a) becomes operational or is retrofitted on or after January 1, 2008; and
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(b) reduces carbon dioxide emissions into the atmosphere through permanent geological
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sequestration or through other verifiably permanent reductions in carbon dioxide emissions
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through the use of technology.
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(8) "Qualifying electricity" means electricity generated on or after January 1, 1995 from
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a renewable energy source if:
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(a) (i) the renewable energy source is located within the geographic boundary of the
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Western Electricity Coordinating Council; or
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(ii) the qualifying electricity is delivered to the transmission system of a municipal
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electric utility or a delivery point designated by the municipal electric utility for the purpose of
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subsequent delivery to the municipal electric utility; and
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(b) the renewable energy attributes of the electricity are not traded, sold, transferred, or
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otherwise used to satisfy another state's renewable energy program.
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(9) "Qualifying zero carbon emissions generation":
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(a) means a generation facility located within the geographic boundary of the Western
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Electricity Coordinating Council that:
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(i) becomes operational on or after January 1, 2008; and
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(ii) does not produce carbon as a byproduct of the generation process;
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(b) includes generation powered by nuclear fuel; and
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(c) does not include renewable energy sources used to satisfy a target established under
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Section
10-19-201
.
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(10) "Renewable energy certificate" means a certificate issued in accordance with the
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requirements of Sections
10-19-202
and
54-17-603
.
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(11) "Renewable energy source" means:
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(a) an electric generation facility or generation capability or upgrade that becomes
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operational on or after January 1, 1995 that derives its energy from one or more of the
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following:
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(i) wind energy;
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(ii) solar photovoltaic and solar thermal energy;
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(iii) wave, tidal, and ocean thermal energy;
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(iv) except for combustion of wood that has been treated with chemical preservatives
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such as creosote, pentachlorophenol or chromated copper arsenate, biomass and biomass
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byproducts, including:
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(A) organic waste;
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(B) forest or rangeland woody debris from harvesting or thinning conducted to improve
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forest or rangeland ecological health and to reduce wildfire risk;
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(C) agricultural residues;
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(D) dedicated energy crops; and
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(E) landfill gas or biogas produced from organic matter, wastewater, anaerobic
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digesters, or municipal solid waste;
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(v) geothermal energy located outside the state;
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(vi) waste gas and waste heat capture or recovery; or
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(vii) efficiency upgrades to a hydroelectric facility, without regard to the date upon
170
which the facility became operational, if the upgrades become operational on or after January 1,
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1995;
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(b) any of the following:
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(i) up to 50 average megawatts of electricity per year per municipal electric utility from
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a certified low-impact hydroelectric facility, without regard to the date upon which the facility
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becomes operational, if the facility is certified as a low-impact hydroelectric facility on or after
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January 1, 1995, by a national certification organization;
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(ii) geothermal energy if located within the state, without regard to the date upon which
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the facility becomes operational; and
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(iii) hydroelectric energy if located within the state, without regard to the date upon
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which the facility becomes operational;
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(c) hydrogen gas derived from any source of energy described in Subsection (11)(a) or
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(b);
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(d) if an electric generation facility employs multiple energy sources, that portion of the
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electricity generated that is attributable to energy sources described in Subsections (11)(a)
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through (c); and
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(e) any of the following located in the state and owned by a user of energy:
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(i) a demand side management measure, as defined by Subsection
54-7-12.8
(1) with the
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quantity of renewable energy certificates to which the user is entitled determined by the
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equivalent energy saved by the measure;
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(ii) a solar thermal system that reduces the consumption of fossil fuels, with the quantity
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of renewable energy certificates to which the user is entitled determined by the equivalent
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kilowatt-hours saved, except to the extent the commission determines otherwise with respect to
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net-metered energy;
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(iii) a solar photovoltaic system that reduces the consumption of fossil fuels with the
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quantity of renewable energy certificates to which the user is entitled determined by the total
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production of the system, except to the extent the commission determines otherwise with
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respect to net-metered energy;
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(iv) a hydroelectric or geothermal facility, with the quantity of renewable energy
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certificates to which the user is entitled determined by the total production of the facility, except
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to the extent the commission determines otherwise with respect to net-metered energy;
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(v) a waste gas or waste heat capture or recovery system other than from a combined
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cycle combustion turbine that does not use waste gas or waste heat, with the quantity of
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renewable energy certificates to which the user is entitled determined by the total production of
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the system, except to the extent the commission determines otherwise with respect to
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net-metered energy; and
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(vi) the station use of solar thermal energy, solar photovoltaic energy, hydroelectric
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energy, geothermal energy, waste gas, or waste heat capture and recovery.
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(12) "Unbundled renewable energy certificate" means a renewable energy certificate
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associated with:
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(a) qualifying electricity that is acquired by a municipal electric utility or other person
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by trade, purchase, or other transfer without acquiring the electricity for which the certificate
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was issued; or
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(b) activities listed in Subsection (11)(e).
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Section 3.
Section
10-19-201
is enacted to read:
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Part 2. Renewable Energy Provisions
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10-19-201. Target amount of qualifying electricity -- Renewable energy certificate
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-- Cost-effectiveness.
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(1) (a) To the extent that it is cost-effective to do so, beginning in 2025 the annual retail
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electric sales in this state of each municipal electric utility shall consist of qualifying electricity or
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renewable energy certificates in an amount equal to at least 20% of adjusted retail electric sales.
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(b) The amount under Subsection (1)(a) is computed based upon adjusted retail sales
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for the calendar year commencing 36 months before the first day of the year for which the target
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calculated under Subsection (1)(a) applies.
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(c) Notwithstanding Subsections (1)(a) and (b) an increase in the annual target from
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one year to the next is limited to the greater of:
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(i) 17,500 megawatt-hours; or
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(ii) 20% of the prior year's amount under Subsections (1)(a) and (b).
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(2) Cost-effectiveness under Subsection (1) is determined using any criteria applicable
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to the municipal electric utility's acquisition of a significant energy resource established by the
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municipality's legislative body.
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(3) This section does not require a municipal electric utility to:
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(a) substitute qualifying electricity for electricity from a generation source owned or
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contractually committed, or from a contractual commitment for a power purchase;
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(b) enter into any additional electric sales commitment or any other arrangement for the
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sale or other disposition of electricity that is not already, or would not be, entered into by the
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municipal electric utility; or
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(c) acquire qualifying electricity in excess of its adjusted retail electric sales.
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(4) A municipal electrical corporation may combine the following to meet Subsection
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(1):
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(a) qualifying electricity from a renewable energy source owned by the municipal
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electric utility;
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(b) qualifying electricity acquired by the municipal electric utility through trade, power
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purchase, or other transfer; and
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(c) a bundled or unbundled renewable energy certificate, including a banked renewable
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energy certificate.
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(5) To meet Subsection (1), a municipal electric utility may also count:
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(a) qualifying electricity generated or acquired or renewable energy certificates acquired
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for a program permitting the municipal electric utility's customers to voluntarily contribute to a
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renewable energy source; and
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(b) electricity allocated to this state that is produced by a hydroelectric facility
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becoming operational after December 31, 2007 if the hydroelectric facility is located in any state
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in which the municipal electric utility, or the interlocal entity with which the municipal electric
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utility has a contract, provides electric service.
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Section 4.
Section
10-19-202
is enacted to read:
255
10-19-202. Renewable energy certificate -- Use to satisfy other requirements.
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(1) A municipal electric utility may buy, sell, trade, or otherwise transfer a renewable
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energy certificate issued or recognized under Section
54-17-603
.
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(2) For the purpose of satisfying Subsection
10-19-201
(1) and the issuance of a
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renewable energy certificate under Section
54-17-603
:
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(a) a renewable energy source located in this state that derives its energy from solar
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photovoltaic and solar thermal energy shall be credited for 2.4 kilowatt-hours of qualifying
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electricity for each 1.0 kilowatt-hour generated; and
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(b) if two or more municipal electric utilities jointly own a renewable energy resource,
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each municipal electric utility shall be credited with 1.0 kilowatt-hour of qualifying electricity
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for 1.0 kilowatt-hour of the renewable energy resource allocated to the municipal electric utility
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by contract, unless the contract otherwise provides.
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(3) A renewable energy certificate:
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(a) may be used only once to satisfy Subsection
10-19-201
(1);
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(b) may be used to satisfy Subsection
10-19-201
(1) and the qualifying electricity on
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which the renewable energy certificate is based may be used to satisfy any federal renewable
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energy requirement; and
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(c) may not be used if it has been used to satisfy any other state's renewable energy
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requirement.
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Section 5.
Section
10-19-301
is enacted to read:
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Part 3. Administrative Provisions
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10-19-301. Plans and reports.
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(1) A municipal electric utility shall develop and maintain a plan for implementing
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Subsection
10-19-201
(1).
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(2) A progress report concerning a plan under Subsection (1) shall be filed with the
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municipality's legislative body by January 1 of each of the years 2010, 2015, 2020, and 2024.
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(3) The progress report under Subsection (2) shall contain:
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(a) the actual and projected amount of qualifying electricity through 2025;
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(b) the source of qualifying electricity;
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(c) an estimate of the cost of achieving the target;
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(d) a discussion of conditions impacting the renewable energy source and qualifying
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electricity markets; and
287
(e) any recommendation for a suggested legislative or program change.
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(4) The plan and progress report required by Subsections (1) and (2) may include
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procedures that will be used by the municipal electric utility to identify and select any
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cost-effective renewable energy resource and qualifying electricity.
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(5) By July 1, 2026, the municipal electric utility shall file a final progress report
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demonstrating:
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(a) how Subsection
10-19-201
(1) is satisfied for the year 2025; or
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(b) the reason why Subsection
10-19-201
(1) is not satisfied for the year 2025, if it is not
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satisfied.
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(6) The plan and any progress report filed under this section shall be publicly available
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at the municipal legislative body's office.
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Section 6.
Section
10-19-302
is enacted to read:
299
10-19-302. Municipal authority -- Commission authority.
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(1) The municipal legislative body may adopt procedures necessary to implement this
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chapter.
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(2) Nothing in this chapter authorizes the commission to exercise any power over a
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municipal electric utility's electrical generation, demand-side management program, or other
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operation.
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Section 7.
Section
54-2-1
is amended to read:
306
54-2-1. Definitions.
307
As used in this title:
308
(1) "Avoided costs" means the incremental costs to an electrical corporation of electric
309
energy or capacity or both which, due to the purchase of electric energy or capacity or both
310
from small power production or cogeneration facilities, the electrical corporation would not
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have to generate itself or purchase from another electrical corporation.
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(2) "Cogeneration facility":
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(a) means a facility which produces:
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(i) electric energy; and
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(ii) steam or forms of useful energy, including heat, which are used for industrial,
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commercial, heating, or cooling purposes; and
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(b) is a qualifying cogeneration facility under federal law.
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(3) "Commission" means the Public Service Commission of Utah.
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(4) "Commissioner" means a member of the commission.
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(5) (a) "Corporation" includes an association, and a joint stock company having any
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powers or privileges not possessed by individuals or partnerships.
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(b) "Corporation" does not include towns, cities, counties, conservancy districts,
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improvement districts, or other governmental units created or organized under any general or
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special law of this state.
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(6) "Distribution electrical cooperative" includes an electrical corporation that:
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(a) is a cooperative;
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(b) conducts a business that includes the retail distribution of electricity the cooperative
328
purchases or generates for the cooperative's members; and
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(c) is required to allocate or distribute savings in excess of additions to reserves and
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surplus on the basis of patronage to the cooperative's:
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(i) members; or
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(ii) patrons.
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(7) "Electrical corporation" includes every corporation, cooperative association, and
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person, their lessees, trustees, and receivers, owning, controlling, operating, or managing any
335
electric plant, or in any way furnishing electric power for public service or to its consumers or
336
members for domestic, commercial, or industrial use, within this state, except independent
337
energy producers, and except where electricity is generated on or distributed by the producer
338
solely for the producer's own use, or the use of the producer's tenants, or for the use of
339
members of an association of unit owners formed under Title 57, Chapter 8, Condominium
340
Ownership Act, and not for sale to the public generally.
341
(8) "Electric plant" includes all real estate, fixtures, and personal property owned,
342
controlled, operated, or managed in connection with or to facilitate the production, generation,
343
transmission, delivery, or furnishing of electricity for light, heat, or power, and all conduits,
344
ducts, or other devices, materials, apparatus, or property for containing, holding, or carrying
345
conductors used or to be used for the transmission of electricity for light, heat, or power.
346
(9) "Gas corporation" includes every corporation and person, their lessees, trustees, and
347
receivers, owning, controlling, operating, or managing any gas plant for public service within
348
this state or for the selling or furnishing of natural gas to any consumer or consumers within the
349
state for domestic, commercial, or industrial use, except in the situation that:
350
(a) gas is made or produced on, and distributed by the maker or producer through,
351
private property:
352
(i) solely for the maker's or producer's own use or the use of the maker's or producer's
353
tenants; and
354
(ii) not for sale to others;
355
(b) gas is compressed on private property solely for the owner's own use or the use of
356
the owner's employees as a motor vehicle fuel; or
357
(c) gas is compressed by a retailer of motor vehicle fuel on the retailer's property solely
358
for sale as a motor vehicle fuel.
359
(10) "Gas plant" includes all real estate, fixtures, and personal property owned,
360
controlled, operated, or managed in connection with or to facilitate the production, generation,
361
transmission, delivery, or furnishing of gas, natural or manufactured, for light, heat, or power.
362
(11) "Heat corporation" includes every corporation and person, their lessees, trustees,
363
and receivers, owning, controlling, operating, or managing any heating plant for public service
364
within this state.
365
(12) (a) "Heating plant" includes all real estate, fixtures, machinery, appliances, and
366
personal property controlled, operated, or managed in connection with or to facilitate the
367
production, generation, transmission, delivery, or furnishing of artificial heat.
368
(b) "Heating plant" does not include either small power production facilities or
369
cogeneration facilities.
370
(13) "Independent energy producer" means every electrical corporation, person,
371
corporation, or government entity, their lessees, trustees, or receivers, that own, operate,
372
control, or manage [a small] an independent power production or cogeneration facility.
373
(14) "Independent power production facility" means a facility that:
374
(a) produces electric energy solely by the use, as a primary energy source, of biomass,
375
waste, a renewable resource, a geothermal resource, or any combination of the preceding
376
sources; or
377
(b) is a qualifying power production facility.
378
[(14)] (15) "Private telecommunications system" includes all facilities for the
379
transmission of signs, signals, writing, images, sounds, messages, data, or other information of
380
any nature by wire, radio, lightwaves, or other electromagnetic means, excluding mobile radio
381
facilities, that are owned, controlled, operated, or managed by a corporation or person,
382
including their lessees, trustees, receivers, or trustees appointed by any court, for the use of that
383
corporation or person and not for the shared use with or resale to any other corporation or
384
person on a regular basis.
385
[(15)] (16) (a) "Public utility" includes every railroad corporation, gas corporation,
386
electrical corporation, distribution electrical cooperative, wholesale electrical cooperative,
387
telephone corporation, telegraph corporation, water corporation, sewerage corporation, heat
388
corporation, and independent energy producer not described in Subsection [(15)] (16)(d),
389
where the service is performed for, or the commodity delivered to, the public generally, or in the
390
case of a gas corporation or electrical corporation where the gas or electricity is sold or
391
furnished to any member or consumers within the state for domestic, commercial, or industrial
392
use.
393
(b) (i) If any railroad corporation, gas corporation, electrical corporation, telephone
394
corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation,
395
or independent energy producer not described in Subsection [(15)] (16)(d), performs a service
396
for or delivers a commodity to the public, it is considered to be a public utility, subject to the
397
jurisdiction and regulation of the commission and this title.
398
(ii) If a gas corporation, independent energy producer not described in Subsection
399
[(15)] (16)(d), or electrical corporation sells or furnishes gas or electricity to any member or
400
consumers within the state, for domestic, commercial, or industrial use, for which any
401
compensation or payment is received, it is considered to be a public utility, subject to the
402
jurisdiction and regulation of the commission and this title.
403
(c) Any corporation or person not engaged in business exclusively as a public utility as
404
defined in this section is governed by this title in respect only to the public utility owned,
405
controlled, operated, or managed by the corporation or person, and not in respect to any other
406
business or pursuit.
407
(d) An independent energy producer is exempt from the jurisdiction and regulations of
408
the commission with respect to an independent power production facility if it meets the
409
requirements of Subsection [(15)] (16)(d)(i), (ii), or (iii), or any combination of these:
410
(i) the commodity or service is produced or delivered, or both, by an independent
411
energy producer solely for the uses exempted in Subsection (7) or for the use of state-owned
412
facilities;
413
(ii) the commodity or service is sold by an independent energy producer solely to an
414
electrical corporation or other wholesale purchaser; or
415
(iii) (A) the commodity or service delivered by the independent energy producer is
416
delivered to an entity which controls, is controlled by, or affiliated with the independent energy
417
producer or to a user located on real property managed by the independent energy producer;
418
and
419
(B) the real property on which the service or commodity is used is contiguous to real
420
property which is owned or controlled by the independent energy producer. Parcels of real
421
property separated solely by public roads or easements for public roads shall be considered as
422
contiguous for purposes of this Subsection [(15)] (16).
423
(e) Any person or corporation defined as an electrical corporation or public utility under
424
this section may continue to serve its existing customers subject to any order or future
425
determination of the commission in reference to the right to serve those customers.
426
(f) (i) "Public utility" does not include any person that is otherwise considered a public
427
utility under this Subsection [(15)] (16) solely because of that person's ownership of an interest
428
in an electric plant, cogeneration facility, or small power production facility in this state if all of
429
the following conditions are met:
430
(A) the ownership interest in the electric plant, cogeneration facility, or small power
431
production facility is leased to:
432
(I) a public utility, and that lease has been approved by the commission;
433
(II) a person or government entity that is exempt from commission regulation as a
434
public utility; or
435
(III) a combination of Subsections [(15)] (16)(f)(i)(A)(I) and (II);
436
(B) the lessor of the ownership interest identified in Subsection [(15)] (16)(f)(i)(A) is:
437
(I) primarily engaged in a business other than the business of a public utility; or
438
(II) a person whose total equity or beneficial ownership is held directly or indirectly by
439
another person engaged in a business other than the business of a public utility; and
440
(C) the rent reserved under the lease does not include any amount based on or
441
determined by revenues or income of the lessee.
442
(ii) Any person that is exempt from classification as a public utility under Subsection
443
[(15)] (16)(f)(i) shall continue to be so exempt from classification following termination of the
444
lessee's right to possession or use of the electric plant for so long as the former lessor does not
445
operate the electric plant or sell electricity from the electric plant. If the former lessor operates
446
the electric plant or sells electricity, the former lessor shall continue to be so exempt for a period
447
of 90 days following termination, or for a longer period that is ordered by the commission. This
448
period may not exceed one year. A change in rates that would otherwise require commission
449
approval may not be effective during the 90-day or extended period without commission
450
approval.
451
(g) "Public utility" does not include any person that provides financing for, but has no
452
ownership interest in an electric plant, small power production facility, or cogeneration facility.
453
In the event of a foreclosure in which an ownership interest in an electric plant, small power
454
production facility, or cogeneration facility is transferred to a third-party financer of an electric
455
plant, small power production facility, or cogeneration facility, then that third-party financer is
456
exempt from classification as a public utility for 90 days following the foreclosure, or for a
457
longer period that is ordered by the commission. This period may not exceed one year.
458
(h) (i) The distribution or transportation of natural gas for use as a motor vehicle fuel
459
does not cause the distributor or transporter to be a "public utility," unless the commission, after
460
notice and a public hearing, determines by rule that it is in the public interest to regulate the
461
distributers or transporters, but the retail sale alone of compressed natural gas as a motor
462
vehicle fuel may not cause the seller to be a "public utility."
463
(ii) In determining whether it is in the public interest to regulate the distributors or
464
transporters, the commission shall consider, among other things, the impact of the regulation on
465
the availability and price of natural gas for use as a motor fuel.
466
[(16)] (17) "Purchasing utility" means any electrical corporation that is required to
467
purchase electricity from small power production or cogeneration facilities pursuant to the
468
Public Utility Regulatory Policies Act, 16 U.S.C. Section 824a-3.
469
(18) "Qualifying power producer" means a corporation, cooperative association, or
470
person, or the lessee, trustee, and receiver of the corporation, cooperative association, or
471
person, who owns, controls, operates, or manages any qualifying power production facility or
472
cogeneration facility.
473
(19) "Qualifying power production facility" means a facility that:
474
(a) produces electrical energy solely by the use, as a primary energy source, of biomass,
475
waste, a renewable resource, a geothermal resource, or any combination of the preceding
476
sources;
477
(b) has a power production capacity that, together with any other facilities located at
478
the same site, is no greater than 80 megawatts; and
479
(c) is a qualifying small power production facility under federal law.
480
[(17)] (20) "Railroad" includes every commercial, interurban, and other railway, other
481
than a street railway, and each branch or extension of a railway, by any power operated,
482
together with all tracks, bridges, trestles, rights-of-way, subways, tunnels, stations, depots,
483
union depots, yards, grounds, terminals, terminal facilities, structures, and equipment, and all
484
other real estate, fixtures, and personal property of every kind used in connection with a railway
485
owned, controlled, operated, or managed for public service in the transportation of persons or
486
property.
487
[(18)] (21) "Railroad corporation" includes every corporation and person, their lessees,
488
trustees, and receivers, owning, controlling, operating, or managing any railroad for public
489
service within this state.
490
[(19)] (22) (a) "Sewerage corporation" includes every corporation and person, their
491
lessees, trustees, and receivers, owning, controlling, operating, or managing any sewerage
492
system for public service within this state.
493
(b) "Sewerage corporation" does not include private sewerage companies engaged in
494
disposing of sewage only for their stockholders, or towns, cities, counties, conservancy districts,
495
improvement districts, or other governmental units created or organized under any general or
496
special law of this state.
497
[(20) "Small power production facility" means a facility which:]
498
[(a) produces electric energy solely by the use, as a primary energy source, of biomass,
499
waste, renewable resources, geothermal resources, or any combination of them;]
500
[(b) has a power production capacity that, together with any other facilities located at
501
the same site, is not greater than 80 megawatts; and]
502
[(c) is a qualifying small power production facility under federal law.]
503
[(21)] (23) "Telegraph corporation" includes every corporation and person, their
504
lessees, trustees, and receivers, owning, controlling, operating, or managing any telegraph line
505
for public service within this state.
506
[(22)] (24) "Telegraph line" includes all conduits, ducts, poles, wires, cables,
507
instruments, and appliances, and all other real estate, fixtures, and personal property owned,
508
controlled, operated, or managed in connection with or to facilitate communication by
509
telegraph, whether that communication be had with or without the use of transmission wires.
510
[(23)] (25) (a) "Telephone corporation" means any corporation or person, and their
511
lessees, trustee, receivers, or trustees appointed by any court, who owns, controls, operates,
512
manages, or resells a public telecommunications service as defined in Section
54-8b-2
.
513
(b) "Telephone corporation" does not mean a corporation, partnership, or firm
514
providing:
515
(i) intrastate telephone service offered by a provider of cellular, personal
516
communication systems (PCS), or other commercial mobile radio service as defined in 47
517
U.S.C. Sec. 332 that has been issued a covering license by the Federal Communications
518
Commission;
519
(ii) Internet service; or
520
(iii) resold intrastate toll service.
521
[(24)] (26) "Telephone line" includes all conduits, ducts, poles, wires, cables,
522
instruments, and appliances, and all other real estate, fixtures, and personal property owned,
523
controlled, operated, or managed in connection with or to facilitate communication by
524
telephone whether that communication is had with or without the use of transmission wires.
525
[(25)] (27) "Transportation of persons" includes every service in connection with or
526
incidental to the safety, comfort, or convenience of the person transported, and the receipt,
527
carriage, and delivery of that person and that person's baggage.
528
[(26)] (28) "Transportation of property" includes every service in connection with or
529
incidental to the transportation of property, including in particular its receipt, delivery,
530
elevation, transfer, switching, carriage, ventilation, refrigeration, icing, dunnage, storage, and
531
hauling, and the transmission of credit by express companies.
532
[(27)] (29) "Water corporation" includes every corporation and person, their lessees,
533
trustees, and receivers, owning, controlling, operating, or managing any water system for public
534
service within this state. It does not include private irrigation companies engaged in distributing
535
water only to their stockholders, or towns, cities, counties, water conservancy districts,
536
improvement districts, or other governmental units created or organized under any general or
537
special law of this state.
538
[(28)] (30) (a) "Water system" includes all reservoirs, tunnels, shafts, dams, dikes,
539
headgates, pipes, flumes, canals, structures, and appliances, and all other real estate, fixtures,
540
and personal property owned, controlled, operated, or managed in connection with or to
541
facilitate the diversion, development, storage, supply, distribution, sale, furnishing, carriage,
542
appointment, apportionment, or measurement of water for power, fire protection, irrigation,
543
reclamation, or manufacturing, or for municipal, domestic, or other beneficial use.
544
(b) "Water system" does not include private irrigation companies engaged in
545
distributing water only to their stockholders.
546
[(29)] (31) "Wholesale electrical cooperative" includes every electrical corporation that
547
is:
548
(a) in the business of the wholesale distribution of electricity it has purchased or
549
generated to its members and the public; and
550
(b) required to distribute or allocate savings in excess of additions to reserves and
551
surplus to members or patrons on the basis of patronage.
552
Section 8.
Section
54-12-1
is amended to read:
553
54-12-1. Legislative policy.
554
(1) The Legislature declares that in order to promote the more rapid development of
555
new sources of electrical energy, to maintain the economic vitality of the state through the
556
continuing production of goods and the employment of its people, and to promote the efficient
557
utilization and distribution of energy, it is desirable and necessary to encourage independent
558
energy producers to competitively develop sources of electric energy not otherwise available to
559
Utah businesses, residences, and industries served by electrical corporations, and to remove
560
unnecessary barriers to energy transactions involving independent energy producers and
561
electrical corporations.
562
(2) It is the policy of this state to encourage the development of [small] independent
563
and qualifying power production and cogeneration facilities, to promote a diverse array of
564
economical and permanently sustainable energy resources in an environmentally acceptable
565
manner, and to conserve our finite and expensive energy resources and provide for their most
566
efficient and economic utilization.
567
Section 9.
Section
54-12-2
is amended to read:
568
54-12-2. Purchase of power from qualifying power producers.
569
(1) Purchasing utilities shall offer to purchase power from [independent energy]
570
qualifying power producers.
571
(2) The commission shall establish reasonable rates, terms, and conditions for the
572
purchase or sale of electricity or electrical generating capacity, or both, between a purchasing
573
utility and [an independent energy] a qualifying power producer. In establishing these rates,
574
terms, and conditions, the commission shall either establish a procedure under which [small]
575
qualifying power producers [and cogenerators] offer competitive bids for the sale of power to
576
purchasing utilities or devise an alternative method which considers the purchasing utility's
577
avoided costs. The capacity component of avoided costs shall reflect the purchasing utility's
578
long-term deferral or cancellation of generating units which may result from the purchase of
579
power from [independent energy] qualifying power producers.
580
(3) Purchasing utilities and [independent energy] qualifying power producers may agree
581
to rates, terms, or conditions for the sale of electricity or electrical capacity which differ from
582
the rates, terms, and conditions adopted by the commission under Subsection (2).
583
(4) The commission may adopt further rules which encourage the development of small
584
power production and cogeneration facilities.
585
Section 10.
Section
54-12-3
is amended to read:
586
54-12-3. Recovery of investment costs.
587
The commission may not consider any purchasing utility's purchase of power from [an
588
independent energy] a qualifying power producer as a reason for disallowing recovery of the
589
purchasing utility's investment costs for facilities which are in use prior to signing a contract for
590
the purchase of power from [an independent energy] a qualifying power producer.
591
Section 11.
Section
54-17-201
is amended to read:
592
54-17-201. Solicitation process required -- Exception.
593
(1) (a) An affected electrical utility shall comply with this chapter to acquire or
594
construct a significant energy resource after February 25, 2005.
595
(b) Notwithstanding Subsection (1)(a), this chapter does not apply to a significant
596
energy resource for which the affected electrical utility has issued a solicitation before February
597
25, 2005.
598
(2) (a) Except as provided in Subsection (3), to acquire or construct a significant
599
energy resource, an affected electrical utility shall conduct a solicitation process that is approved
600
by the commission.
601
(b) To obtain the approval of the commission of a solicitation process, the affected
602
electrical utility shall file with the commission a request for approval that includes:
603
(i) a description of the solicitation process the affected electrical utility will use;
604
(ii) a complete proposed solicitation; and
605
(iii) any other information the commission requires by rule made in accordance with
606
Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
607
(c) In ruling on the request for approval of a solicitation process, the commission shall
608
determine whether the solicitation process:
609
(i) complies with this chapter and rules made in accordance with Title 63, Chapter 46a,
610
Utah Administrative Rulemaking Act; and
611
(ii) is in the public interest taking into consideration:
612
(A) whether it will most likely result in the acquisition, production, and delivery of
613
electricity at the lowest reasonable cost to the retail customers of an affected electrical utility
614
located in this state;
615
(B) long-term and short-term impacts;
616
(C) risk;
617
(D) reliability;
618
(E) financial impacts on the affected electrical utility; and
619
(F) other factors determined by the commission to be relevant.
620
(d) Before approving a solicitation process under this section the commission:
621
(i) may hold a public hearing; and
622
(ii) shall provide an opportunity for public comment.
623
(e) As part of its review of a solicitation process, the commission may provide the
624
affected electrical utility guidance on any additions or changes to its proposed solicitation
625
process.
626
(f) Unless the commission determines that additional time to analyze a solicitation
627
process is warranted and is in the public interest, within [90] 60 days of the day on which the
628
affected electrical utility files a request for approval of the solicitation process, the commission
629
shall:
630
(i) approve a proposed solicitation process;
631
(ii) suggest modifications to a proposed solicitation process; or
632
(iii) reject a proposed solicitation process.
633
(3) Notwithstanding Subsection (2), an affected electrical utility may acquire or
634
construct a significant energy resource without conducting a solicitation process if it obtains a
635
waiver of the solicitation requirement in accordance with Section
54-17-501
.
636
(4) In accordance with the commission's authority under Subsection
54-12-2
(2), the
637
commission shall determine:
638
(a) whether this chapter or another competitive bidding procedure shall apply to a
639
purchase of a significant energy resource by an affected electrical utility from a small power
640
producer or cogenerator; and
641
(b) if this chapter applies as provided in Subsection (4)(a), the manner in which this
642
chapter applies to a purchase of a significant energy resource by an affected electrical utility
643
from a small power producer or cogenerator.
644
Section 12.
Section
54-17-302
is amended to read:
645
54-17-302. Approval of a significant energy resource decision required.
646
(1) If pursuant to Part 2, Solicitation Process, an affected electrical utility is required to
647
conduct a solicitation for a significant energy resource or obtains a waiver of the requirement to
648
conduct a solicitation under Section
54-17-501
, but does not obtain a waiver of the requirement
649
to obtain approval of the significant energy resource decision under Section
54-17-501
, the
650
affected electrical utility shall obtain approval of its significant energy resource decision:
651
(a) after the completion of the solicitation process, if the affected electrical utility is
652
required to conduct a solicitation; and
653
(b) before an affected electrical utility may construct or enter into a binding agreement
654
to acquire the significant energy resource.
655
(2) (a) To obtain the approval required by Subsection (1), the affected electrical utility
656
shall file a request for approval with the commission.
657
(b) The request for approval required by this section shall include any information
658
required by the commission by rule made in accordance with Title 63, Chapter 46a, Utah
659
Administrative Rulemaking Act.
660
(3) In ruling on a request for approval of a significant energy resource decision, the
661
commission shall determine whether the significant energy resource decision:
662
(a) is reached in compliance with this chapter and rules made in accordance with Title
663
63, Chapter 46a, Utah Administrative Rulemaking Act;
664
(b) (i) is reached in compliance with the solicitation process approved by the
665
commission in accordance with Part 2, Solicitation Process; or
666
(ii) is reached after the waiver of the solicitation process as provided in Subsection
667
54-17-201
(3); and
668
(c) is in the public interest, taking into consideration:
669
(i) whether it will most likely result in the acquisition, production, and delivery of
670
electricity at the lowest reasonable cost to the retail customers of an affected electrical utility
671
located in this state;
672
(ii) long-term and short-term impacts;
673
(iii) risk;
674
(iv) reliability;
675
(v) financial impacts on the affected electrical utility; and
676
(vi) other factors determined by the commission to be relevant.
677
(4) The commission may not approve a significant energy resource decision under this
678
section before holding a public hearing.
679
(5) Unless the commission determines that additional time to analyze a significant
680
energy resource decision is warranted and is in the public interest, within [180] 120 days of the
681
day on which the affected electrical utility files a request for approval, the commission shall:
682
(a) approve the significant energy resource decision;
683
(b) approve the significant energy resource decision subject to conditions imposed by
684
the commission; or
685
(c) disapprove the significant energy resource decision.
686
(6) The commission shall include in its order under this section:
687
(a) findings as to the total projected costs for construction or acquisition of an
688
approved significant energy resource; and
689
(b) the basis upon which the findings described in Subsection (6)(a) are made.
690
(7) Notwithstanding any other provision of this part, an affected electrical utility may
691
acquire a significant energy resource without obtaining approval pursuant to this section if it
692
obtains a waiver of the requirement for approval in accordance with Section
54-17-501
.
693
(8) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
694
commission shall make rules regarding the process for approval of a significant energy resource
695
decision under this section.
696
Section 13.
Section
54-17-303
is amended to read:
697
54-17-303. Cost recovery.
698
(1) (a) Except as otherwise provided in this section, if the commission approves a
699
significant energy resource decision under Section
54-17-302
, the commission shall, in a general
700
rate case or other appropriate commission proceeding, include in the affected electrical utility's
701
retail electric rates the state's share of costs:
702
(i) relevant to the proceeding;
703
(ii) incurred by the affected electrical utility in constructing or acquiring the approved
704
significant energy resource; and
705
(iii) up to the projected costs specified in the commission's order issued under Section
706
54-17-302
.
707
(b) (i) The commission shall, in a general rate case or other appropriate commission
708
proceeding, include in the affected electrical utility's retail electric rates the state's share of the
709
incremental cost relevant to the proceeding that were prudently incurred by the affected
710
electrical utility to identify, evaluate, and submit a reasonable benchmark option, whether or not
711
the benchmark option is selected or becomes operational.
712
(ii) A recoverable cost under Subsection (1)(b)(i) shall be included in the affected
713
electrical utility's project costs for the purpose of evaluating the project's cost-effectiveness.
714
(iii) A recoverable cost under Subsection (1)(b)(i) may not be added to the cost or
715
otherwise considered in the evaluation of a project proposed by any person other than the
716
affected electrical utility for the purpose of evaluating that person's proposal.
717
[(b)] (c) Except to the extent that the commission enters an order under Section
718
54-17-304
, an increase from the projected costs specified in the commission's order issued
719
under Section
54-17-302
shall be subject to review by the commission as part of a rate hearing
720
under Section
54-7-12
.
721
(2) (a) Subsequent to the commission issuing an order described in Subsection (2)(a)(i)
722
or (ii), the commission may disallow some or all costs incurred in connection with an approved
723
significant energy resource decision if the commission finds that an affected electrical utility's
724
actions in implementing an approved significant energy resource decision are not prudent
725
because of new information or changed circumstances that occur after:
726
(i) the commission's approval of the significant energy resource decisions under Section
727
54-17-302
; or
728
(ii) a commission order to proceed under Section
54-17-304
.
729
(b) In making a determination of prudence under Subsection (2)(a), the commission
730
shall use the standards identified in Section
54-4-4
.
731
(3) Notwithstanding any other provision of this chapter, the commission may disallow
732
some or all of the costs incurred by an affected electrical utility in connection with an approved
733
significant energy resource decision upon a finding by the commission that the affected electrical
734
utility is responsible for a material misrepresentation or concealment in connection with an
735
approval process under this chapter.
736
Section 14.
Section
54-17-502
is enacted to read:
737
54-17-502. Renewable energy source -- Solicitation -- Consultant.
738
(1) Sections
54-17-102
through
54-17-404
do not apply to a significant energy resource
739
that is a renewable energy source as defined in Section
54-17-601
if the nameplate capacity of
740
the renewable energy source does not exceed 300 megawatts or, if applicable, the quantity of
741
capacity that is the subject of a contract for the purchase of electricity from a renewable energy
742
source does not exceed 300 megawatts.
743
(2) (a) (i) An affected electrical utility shall issue a public solicitation of bids for a
744
renewable energy source up to 300 megawatts in size by January 31 of each year in which it
745
reasonably anticipates that it will need to acquire or commence construction of a renewable
746
energy resource.
747
(ii) A solicitation for a renewable energy source issued by January 31, 2008 for up to 99
748
megawatts satisfies the requirement of this Subsection (2) for the year 2008 if:
749
(A) not later than 30 days after the day on which this section takes effect, the affected
750
electrical utility amends the solicitation or initiates a new solicitation to seek bids for renewable
751
energy source projects up to 300 megawatts in size; and
752
(B) within 60 days after the day on which this section takes effect and as soon as
753
practicable, the commission retains a consultant in accordance with Subsection (3).
754
(b) A consultant hired under Subsection (2)(a)(ii)(B) shall perform the consultant's
755
duties under Subsection (3) in relation to the status of the solicitation process at the time the
756
consultant is retained and may not unreasonably delay the solicitation process.
757
(c) For a solicitation issued after January 31, 2008:
758
(i) the affected electrical utility shall develop a reasonable process for pre-approval of
759
bidders; and
760
(ii) in addition to publicly issuing the solicitation in Subsection (2)(a)(i), the affected
761
electrical utility shall send copies of the solicitation to each potential bidder who is
762
pre-approved.
763
(d) The affected electrical utility shall evaluate in good faith each bid that is received
764
and negotiate in good faith with each bidder whose bid appears to be cost effective, as defined
765
in Section
54-17-602
.
766
(e) Beginning on August 1, 2008, and on each August 1 thereafter, the affected
767
electrical utility shall file a notice with the commission indicating whether it reasonably
768
anticipates that it will need to acquire or commence construction of a renewable energy
769
resource during the following year.
770
(3) (a) If the commission receives a notice under Subsection (2)(e) that the affected
771
electrical utility reasonably anticipates that it will need to acquire or commence construction of
772
a renewable energy source during the following year, the commission shall promptly retain a
773
consultant to:
774
(i) validate that the affected electrical utility is following the bidder pre-approval
775
process developed pursuant to Subsection (2)(c) and make recommendations for changes to the
776
pre-approval process for future solicitations;
777
(ii) monitor and document all material aspects of the bids, bid evaluations, and bid
778
negotiations between the affected electrical utility and any bidders in the solicitation process;
779
(iii) maintain adequate documentation of each bid, including the solicitation, evaluation,
780
and negotiation processes and the reason for the conclusion of negotiations, which
781
documentation shall be transmitted to the commission at the conclusion of all negotiations in the
782
solicitation; and
783
(iv) be available to testify under oath before the commission in any relevant proceeding
784
concerning all aspects of the public solicitation process.
785
(b) The commission and the consultant shall use all reasonable efforts to not delay the
786
solicitation process.
787
(4) Documentation provided to the commission by the consultant shall be available to
788
the affected electrical utility, any bidder, or other interested person under terms and conditions
789
and at times determined appropriate by the commission.
790
(5) (a) The commission and the consultant shall execute a contract approved by the
791
commission with terms and conditions approved by the commission.
792
(b) Unless otherwise provided by contract, an invoice for the consultant's services shall
793
be sent to the Division of Public Utilities for review and approval.
794
(c) After approval under Subsection (5)(b), the invoice shall be forwarded to the
795
affected electrical utility for payment to the consultant.
796
(d) The affected electrical utility may, in a general rate case or other appropriate
797
commission proceeding, include, and the commission shall allow, recovery by the affected
798
electrical utility of any amount paid by the affected electrical utility for the consultant.
799
(6) (a) Nothing in this section precludes an affected electrical utility from constructing
800
or acquiring any renewable energy source project outside the solicitation process provided for in
801
this section, including purchasing electricity from any renewable energy source project that
802
chooses to self-certify as a qualifying facility under the federal Public Utility Regulatory Policies
803
Act of 1978.
804
(b) An affected electrical utility that constructs a renewable energy source outside the
805
solicitation process of this section or Section
54-17-201
shall file a notice with the commission
806
at least 60 days before the date of commencement of construction, indicating the size and
807
location of the renewable energy source.
808
(c) The date of commencement of construction under Subsection (6)(b) is the date of
809
any directive from an affected electrical utility to the person responsible for the construction of
810
the renewable energy source authorizing or directing the person to proceed with construction.
811
(d) For an affected electrical utility whose rates are regulated by the commission, the
812
utility has the burden of proving in a rate case or other appropriate commission proceeding the
813
prudence, reasonableness, and cost-effectiveness of construction under this Subsection (6),
814
including the method used to evaluate the risks and value of any bid submitted in the solicitation
815
under this section.
816
(7) Nothing in this section requires an affected electrical utility to enter into any
817
transaction that it reasonably believes is not cost effective or otherwise is not in the public
818
interest.
819
Section 15.
Section
54-17-601
is enacted to read:
820
Part 6. Carbon Emission Reductions for Electrical Corporations
821
54-17-601. Definitions.
822
As used in this part:
823
(1) "Adjusted retail electric sales" means the total kilowatt-hours of retail electric sales
824
of an electrical corporation to customers in this state in a calendar year, reduced by:
825
(a) the amount of those kilowatt-hours attributable to electricity generated or purchased
826
in that calendar year from qualifying zero carbon emissions generation and qualifying carbon
827
sequestration generation;
828
(b) the amount of those kilowatt-hours attributable to electricity generated or purchased
829
in that calendar year from generation located within the geographic boundary of the Western
830
Electricity Coordinating Council that derives its energy from one or more of the following but
831
that does not satisfy the definition of a renewable energy source or that otherwise has not been
832
used to satisfy Subsection
54-17-602
(1):
833
(i) wind energy;
834
(ii) solar photovoltaic and solar thermal energy;
835
(iii) wave, tidal, and ocean thermal energy;
836
(iv) except for combustion of wood that has been treated with chemical preservatives
837
such as creosote, pentachlorophenol or chromated copper arsenate, biomass and biomass
838
byproducts, including:
839
(A) organic waste;
840
(B) forest or rangeland woody debris from harvesting or thinning conducted to improve
841
forest or rangeland ecological health and to reduce wildfire risk;
842
(C) agricultural residues;
843
(D) dedicated energy crops; and
844
(E) landfill gas or biogas produced from organic matter, wastewater, anaerobic
845
digesters, or municipal solid waste;
846
(v) geothermal energy;
847
(vi) hydroelectric energy; or
848
(vii) waste gas and waste heat capture or recovery; and
849
(c) the number of kilowatt-hours attributable to reductions in retail sales in that calendar
850
year from demand side management as defined in Section
54-7-12.8
, with the kilowatt-hours for
851
an electrical corporation whose rates are regulated by the commission and adjusted by the
852
commission to exclude kilowatt-hours for which a renewable energy certificate is issued under
853
Subsection
54-17-603
(4)(b).
854
(2) "Amount of kilowatt-hours attributable to electricity generated or purchased in that
855
calendar year from qualifying carbon sequestration generation," for qualifying carbon
856
sequestration generation, means the kilowatt-hours supplied by a facility during the calendar
857
year multiplied by the ratio of the amount of carbon dioxide captured from the facility and
858
sequestered to the sum of the amount of carbon dioxide captured from the facility and
859
sequestered plus the amount of carbon dioxide emitted from the facility during the same
860
calendar year.
861
(3) "Banked renewable energy certificate" means a bundled or unbundled renewable
862
energy certificate that is:
863
(a) not used in a calendar year to comply with this part or with a renewable energy
864
program in another state; and
865
(b) carried forward into a subsequent year.
866
(4) "Bundled renewable energy certificate" means a renewable energy certificate for
867
qualifying electricity that is acquired:
868
(a) by an electrical corporation by a trade, purchase, or other transfer of electricity that
869
includes the renewable energy attributes of, or certificate that is issued for, the electricity; or
870
(b) by an electrical corporation by generating the electricity for which the renewable
871
energy certificate is issued.
872
(5) "Electrical corporation":
873
(a) is as defined in Section
54-2-1
; and
874
(b) does not include a person generating electricity that is not for sale to the public.
875
(6) "Qualifying carbon sequestration generation" means a fossil-fueled generating
876
facility located within the geographic boundary of the Western Electricity Coordinating Council
877
that:
878
(a) becomes operational or is retrofitted on or after January 1, 2008; and
879
(b) reduces carbon dioxide emissions into the atmosphere through permanent geological
880
sequestration or through another verifiably permanent reduction in carbon dioxide emissions
881
through the use of technology.
882
(7) "Qualifying electricity" means electricity generated on or after January 1, 1995 from
883
a renewable energy source if:
884
(a) (i) the renewable energy source is located within the geographic boundary of the
885
Western Electricity Coordinating Council; or
886
(ii) the qualifying electricity is delivered to the transmission system of an electrical
887
corporation or a delivery point designated by the electrical corporation for the purpose of
888
subsequent delivery to the electrical corporation; and
889
(b) the renewable energy attributes of the electricity are not traded, sold, transferred, or
890
otherwise used to satisfy another state's renewable energy program.
891
(8) "Qualifying zero carbon emissions generation":
892
(a) means a generation facility located within the geographic boundary of the Western
893
Electricity Coordinating Council that:
894
(i) becomes operational on or after January 1, 2008; and
895
(ii) does not produce carbon as a byproduct of the generation process;
896
(b) includes generation powered by nuclear fuel; and
897
(c) does not include renewable energy sources used to satisfy the requirement
898
established under Subsection
54-17-602
(1).
899
(9) "Renewable energy certificate" means a certificate issued under Section
54-17-603
.
900
(10) "Renewable energy source" means:
901
(a) an electric generation facility or generation capability or upgrade that becomes
902
operational on or after January 1, 1995 that derives its energy from one or more of the
903
following:
904
(i) wind energy;
905
(ii) solar photovoltaic and solar thermal energy;
906
(iii) wave, tidal, and ocean thermal energy;
907
(iv) except for combustion of wood that has been treated with chemical preservatives
908
such as creosote, pentachlorophenol or chromated copper arsenate, biomass and biomass
909
byproducts, including:
910
(A) organic waste;
911
(B) forest or rangeland woody debris from harvesting or thinning conducted to improve
912
forest or rangeland ecological health and to reduce wildfire risk;
913
(C) agricultural residues;
914
(D) dedicated energy crops; and
915
(E) landfill gas or biogas produced from organic matter, wastewater, anaerobic
916
digesters, or municipal solid waste;
917
(v) geothermal energy located outside the state;
918
(vi) waste gas and waste heat capture or recovery; or
919
(vii) efficiency upgrades to a hydroelectric facility, without regard to the date upon
920
which the facility became operational, if the upgrades become operational on or after January 1,
921
1995;
922
(b) any of the following:
923
(i) up to 50 average megawatts of electricity per year per electrical corporation from a
924
certified low-impact hydroelectric facility, without regard to the date upon which the facility
925
becomes operational, if the facility is certified as a low-impact hydroelectric facility on or after
926
January 1, 1995, by a national certification organization;
927
(ii) geothermal energy if located within the state, without regard to the date upon which
928
the facility becomes operational; or
929
(iii) hydroelectric energy if located within the state, without regard to the date upon
930
which the facility becomes operational;
931
(c) hydrogen gas derived from any source of energy described in Subsection (10)(a) or
932
(b);
933
(d) if an electric generation facility employs multiple energy sources, that portion of the
934
electricity generated that is attributable to energy sources described in Subsections (10)(a)
935
through (c); and
936
(e) any of the following located in the state and owned by a user of energy:
937
(i) a demand side management measure, as defined by Subsection
54-7-12.8
(1), with
938
the quantity of renewable energy certificates to which the user is entitled determined by the
939
equivalent energy saved by the measure;
940
(ii) a solar thermal system that reduces the consumption of fossil fuels, with the quantity
941
of renewable energy certificates to which the user is entitled determined by the equivalent
942
kilowatt-hours saved, except to the extent the commission determines otherwise with respect to
943
net-metered energy;
944
(iii) a solar photovoltaic system that reduces the consumption of fossil fuels with the
945
quantity of renewable energy certificates to which the user is entitled determined by the total
946
production of the system, except to the extent the commission determines otherwise with
947
respect to net-metered energy;
948
(iv) a hydroelectric or geothermal facility with the quantity of renewable energy
949
certificates to which the user is entitled determined by the total production of the facility, except
950
to the extent the commission determines otherwise with respect to net-metered energy;
951
(v) a waste gas or waste heat capture or recovery system, other than from a combined
952
cycle combustion turbine that does not use waste gas or waste heat, with the quantity of
953
renewable energy certificates to which the user is entitled determined by the total production of
954
the system, except to the extent the commission determines otherwise with respect to
955
net-metered energy; and
956
(vi) the station use of solar thermal energy, solar photovoltaic energy, hydroelectric
957
energy, geothermal energy, waste gas, or waste heat capture and recovery.
958
(11) "Unbundled renewable energy certificate" means a renewable energy certificate
959
associated with:
960
(a) qualifying electricity that is acquired by an electrical corporation or other person by
961
trade, purchase, or other transfer without acquiring the electricity for which the certificate was
962
issued; or
963
(b) activities listed in Subsection (10)(e).
964
Section 16.
Section
54-17-602
is enacted to read:
965
54-17-602. Target amount of qualifying electricity -- Renewable energy certificate
966
-- Cost-effectiveness -- Cooperatives.
967
(1) (a) To the extent that it is cost effective to do so, beginning in 2025 the annual retail
968
electric sales in this state of each electrical corporation shall consist of qualifying electricity or
969
renewable energy certificates in an amount equal to at least 20% of adjusted retail electric sales.
970
(b) The amount under Subsection (1)(a) is computed based upon adjusted retail electric
971
sales for the calendar year commencing 36 months before the first day of the year for which the
972
target calculated under Subsection (1)(a) applies.
973
(c) Notwithstanding Subsections (1)(a) and (b), an increase in the annual target from
974
one year to the next may not exceed the greater of:
975
(i) 17,500 megawatt-hours; or
976
(ii) 20% of the prior year's amount under Subsections (1)(a) and (b).
977
(2) (a) Cost-effectiveness under Subsection (1) for other than a cooperative association
978
is determined in comparison to other viable resource options using the criteria provided by
979
Subsection
54-17-201
(2)(c)(ii).
980
(b) For an electrical corporation that is a cooperative association, cost-effectiveness is
981
determined using criteria applicable to the cooperative association's acquisition of a significant
982
energy resource established by the cooperative association's board of directors.
983
(3) This section does not require an electrical corporation to:
984
(a) substitute qualifying electricity for electricity from a generation source owned or
985
contractually committed, or from a contractual commitment for a power purchase;
986
(b) enter into any additional electric sales commitment or any other arrangement for the
987
sale or other disposition of electricity that is not already, or would not be, entered into by the
988
electrical corporation; or
989
(c) acquire qualifying electricity in excess of its adjusted retail electric sales.
990
(4) For the purpose of Subsection (1), an electrical corporation may combine the
991
following:
992
(a) qualifying electricity from a renewable energy source owned by the electrical
993
corporation;
994
(b) qualifying electricity acquired by the electrical corporation through trade, power
995
purchase, or other transfer; and
996
(c) a bundled or unbundled renewable energy certificate, including a banked renewable
997
energy certificate.
998
(5) For an electrical corporation whose rates the commission regulates, the following
999
rules concerning renewable energy certificates apply:
1000
(a) a banked renewable energy certificate with an older issuance date shall be used
1001
before any other banked renewable energy certificate issued at a later date is used; and
1002
(b) the total of all unbundled renewable energy certificates, including unbundled banked
1003
renewable energy certificates, may not exceed 20% of the amount of the annual target provided
1004
for in Subsection (1).
1005
(6) An electrical corporation that is a cooperative association may count towards
1006
Subsection (1) any of the following:
1007
(a) electric production allocated to this state from hydroelectric facilities becoming
1008
operational after December 31, 2007 if the facilities are located in any state in which the
1009
cooperative association, or a generation and transmission cooperative with which the
1010
cooperative association has a contract, provides electric service;
1011
(b) qualifying electricity generated or acquired or renewable energy certificates acquired
1012
for a program that permits a retail customer to voluntarily contribute to a renewable energy
1013
source; and
1014
(c) notwithstanding Subsection
54-17-601
(7), an unbundled renewable energy
1015
certificate purchased from a renewable energy source located outside the geographic boundary
1016
of the Western Electricity Coordinating Council if the electricity on which the unbundled
1017
renewable energy certificate is based would be considered qualifying electricity if the renewable
1018
energy source was located within the geographic boundary of the Western Electricity
1019
Coordinating Council.
1020
(7) The use of the renewable attributes associated with qualifying electricity to satisfy
1021
any federal renewable energy requirement does not preclude the electricity from being qualifying
1022
electricity for the purpose of this chapter.
1023
Section 17.
Section
54-17-603
is enacted to read:
1024
54-17-603. Renewable energy certificate -- Issuance -- Use to satisfy other
1025
requirements.
1026
(1) The commission shall establish a process for issuance or recognition of a renewable
1027
energy certificate.
1028
(2) The commission process under Subsection (1) shall provide for the issuance,
1029
monitoring, accounting, transfer, and use of a renewable energy certificate, including in
1030
electronic form.
1031
(3) The commission:
1032
(a) may consult with another state or a federal agency and any regional system or
1033
trading program to fulfil Subsection (1); and
1034
(b) allow use of a renewable energy certificate that is issued, monitored, accounted for,
1035
or transferred by or through a regional system or trading program, including the Western
1036
Renewable Energy Generation Information System, to fulfil this part's provisions.
1037
(4) A renewable energy certificate shall be issued for:
1038
(a) qualifying electricity generated on and after January 1, 1995; and
1039
(b) the activities of an energy user described in Subsections
10-19-102
(11)(e) and
1040
54-17-601
(10)(e) on and after January 1, 1995.
1041
(5) The person requesting a renewable energy certificate shall affirm that the renewable
1042
energy attributes of the electricity have not been traded, sold, transferred, or otherwise used to
1043
satisfy another state's renewable energy requirements.
1044
(6) (a) For the purpose of satisfying Subsection
54-17-602
(1) and the issuance of a
1045
renewable energy certificate under this section, a renewable energy source located in this state
1046
that derives its energy from solar photovoltaic or solar thermal energy shall be credited for 2.4
1047
kilowatt-hours of qualifying electricity for each 1.0 kilowatt-hour generated.
1048
(b) Notwithstanding Subsection (6)(a), the acquisition or construction by an electrical
1049
corporation of a renewable energy source that derives its energy from solar photovoltaic or
1050
solar thermal energy shall comply with the cost-effectiveness criteria of Subsection
1051
54-17-201
(2)(c)(ii).
1052
(7) A renewable energy certificate issued under this section:
1053
(a) does not expire; and
1054
(b) may be banked.
1055
(8) The commission may recognize a renewable energy certificate that is issued,
1056
monitored, accounted for, or transferred by or through another state or a regional system or
1057
trading program, including the Western Renewable Energy Generation Information System, if
1058
the renewable energy certificate is for qualifying electricity.
1059
(9) A renewable energy certificate:
1060
(a) may be used only once to satisfy Subsection
54-17-602
(1);
1061
(b) may be used for the purpose of Subsection
54-17-602
(1) and the qualifying
1062
electricity on which the renewable energy certificate is based may be used to satisfy any federal
1063
renewable energy requirement; and
1064
(c) may not be used if it has been used to satisfy any other state's renewable energy
1065
requirement.
1066
(10) The commission shall establish procedures and reasonable rates permitting an
1067
electrical corporation that is a purchasing utility under Section
54-12-2
to acquire or retain a
1068
renewable energy certificate associated with the purchase of power from an independent energy
1069
producer.
1070
Section 18.
Section
54-17-604
is enacted to read:
1071
54-17-604. Plans and reports.
1072
(1) An electrical corporation shall develop and maintain a plan for implementing
1073
Subsection
54-17-602
(1), consistent with the cost-effectiveness criteria of Subsection
1074
54-17-201
(2)(c)(ii).
1075
(2) (a) A progress report concerning a plan under Subsection (1) for other than a
1076
cooperative association shall be filed with the commission by January 1 of each of the years
1077
2010, 2015, 2020, and 2024.
1078
(b) For an electrical corporation that is a cooperative association, a progress report
1079
shall be filed with the cooperative association's board of directors by January 1 of each of the
1080
years 2010, 2015, 2020, and 2024.
1081
(3) The progress report under Subsection (2) shall contain:
1082
(a) the actual and projected amount of qualifying electricity through 2025;
1083
(b) the source of qualifying electricity;
1084
(c) (i) an analysis of the cost-effectiveness of renewable energy sources for other than a
1085
cooperative association; or
1086
(ii) an estimate of the cost of achieving the target for an electrical corporation that is a
1087
cooperative association;
1088
(d) a discussion of conditions impacting the renewable energy source and qualifying
1089
electricity markets;
1090
(e) any recommendation for a suggested legislative or program change; and
1091
(f) for other than a cooperative association, any other information requested by the
1092
commission or considered relevant by the electrical corporation.
1093
(4) The plan and progress report required by Subsections (1) and (2) may include
1094
procedures that will be used by the electrical corporation to identify and select any renewable
1095
energy resource and qualifying electricity that satisfy the criteria of Subsection
1096
54-17-201
(2)(c)(ii).
1097
(5) By July 1, 2026, each electrical corporation shall file a final progress report
1098
demonstrating:
1099
(a) how Subsection
54-17-602
(1) is satisfied for the year 2025; or
1100
(b) the reason why Subsection
54-17-602
(1) is not satisfied for the year 2025, if it is not
1101
satisfied.
1102
(6) By January 1 of each of the years 2011, 2016, 2021, and 2025, the Division of
1103
Public Utilities shall submit to the Legislature a report containing a summary of any progress
1104
report filed under Subsections (2) through (5).
1105
(7) The summary required by Subsection (6) shall include any recommendation for
1106
legislative changes.
1107
(8) (a) By July 1, 2027, the commission shall submit to the Legislature a report
1108
summarizing the final progress reports and recommending any legislative changes.
1109
(b) The 2027 summary may contain a recommendation to the Legislature concerning
1110
any action to be taken with respect to an electrical corporation that does not satisfy Subsection
1111
54-17-602
(1) for 2025.
1112
(c) The commission shall provide an opportunity for public comment and take evidence
1113
before recommending any action to be taken with respect to an electrical corporation that does
1114
not satisfy Subsection
54-17-602
(1) for 2025.
1115
(9) If a recommendation containing a penalty for failure to satisfy Subsection
1116
54-17-602
(1) is made under Subsection (8), the proposal shall require that any amount paid by
1117
an electrical corporation as a penalty be utilized to fund demand-side management for the retail
1118
customers of the electrical corporation paying the penalty.
1119
(10) A penalty may not be proposed under this section if an electrical corporation's
1120
failure to satisfy Subsection
54-17-602
(1) is due to:
1121
(a) a lack of cost-effective means to satisfy the requirement; or
1122
(b) force majeure.
1123
(11) By July 1, 2026, an electrical corporation that is a cooperative association shall file
1124
a final progress report demonstrating:
1125
(a) how Subsection
54-17-602
(1) is satisfied for the year 2025; or
1126
(b) the reason why Subsection
54-17-602
(1) is not satisfied for the year 2025 if it is not
1127
satisfied.
1128
(12) The plan and any progress report file under this section by an electrical corporation
1129
that is cooperative association shall be publicly available at the cooperative association's office
1130
or posted on the cooperative association's website.
1131
Section 19.
Section
54-17-605
is enacted to read:
1132
54-17-605. Recovery of costs for renewable energy activities.
1133
(1) In accordance with other law, the commission shall include in the retail electric rates
1134
of an electrical corporation whose rates the commission regulates the state's share of any of the
1135
costs listed in Subsection (2) that are relevant to the proceeding in which the commission is
1136
considering the electrical corporation's rates:
1137
(a) if the costs are prudently incurred by the electrical corporation in connection with:
1138
(i) the acquisition of a renewable energy certificate;
1139
(ii) the acquisition of qualifying electricity for which a renewable energy certificate will
1140
be issued after the acquisition; and
1141
(iii) the acquisition, construction, and use of a renewable energy source; and
1142
(b) to the extent any qualifying electricity or renewable energy source under Subsection
1143
(1)(a) satisfies the cost-effectiveness criteria of Subsection
54-17-201
(2)(c)(ii).
1144
(2) The following are costs that may be recoverable under Subsection (1):
1145
(a) a cost of siting, acquisition of property rights, equipment, design, licensing,
1146
permitting, construction, owning, operating, or otherwise acquiring a renewable energy source
1147
and any associated asset, including transmission;
1148
(b) a cost to acquire qualifying electricity through trade, power purchase, or other
1149
transfer;
1150
(c) a cost to acquire a bundled or unbundled renewable energy certificate, if any net
1151
revenue from the sale of a renewable energy certificate allocable to this state is also included in
1152
rates;
1153
(d) a cost to interconnect a renewable energy source to the electrical corporation's
1154
transmission and distribution system;
1155
(e) a cost associated with using a physical or financial asset to integrate, firm, or shape
1156
a renewable energy source on a firm annual basis to meet a retail electricity need; and
1157
(f) any cost associated with transmission and delivery of qualifying electricity to a retail
1158
electricity consumer.
1159
(3) (a) The commission may allow an electrical corporation to use an adjustment
1160
mechanism or reasonable method other than a rate case under Sections
54-4-4
and
54-7-12
to
1161
allow recovery of costs identified in Subsection (2).
1162
(b) If the commission allows the use of an adjustment mechanism, both the costs and
1163
any associated benefit shall be reflected in the mechanism, to the extent practicable.
1164
(c) This Subsection (3) creates no presumption for or against the use of an adjustment
1165
mechanism.
1166
(4) (a) The commission may permit an electrical corporation to include in its retail
1167
electric rates the state's share of costs prudently incurred by the electrical corporation in
1168
connection with a renewable energy source, whether or not the renewable energy source
1169
ultimately becomes operational, including costs of:
1170
(i) siting;
1171
(ii) property acquisition;
1172
(iii) equipment;
1173
(iv) design;
1174
(v) licensing;
1175
(vi) permitting; and
1176
(vii) other reasonable items related to the renewable energy source.
1177
(b) Subsection (4)(a) creates no presumption concerning the prudence or recoverability
1178
of the costs identified.
1179
(c) To the extent deferral is consistent with other applicable law, the commission may
1180
allow an electrical corporation to defer costs recoverable under Subsection (4)(a) until the
1181
recovery of the deferred costs can be considered in a rate proceeding or an adjustment
1182
mechanism created under Subsection (3).
1183
(d) An application to defer costs shall be filed within 60 days after the day on which the
1184
electrical corporation determines that the renewable energy source project is impaired under
1185
generally accepted accounting principles and will not become operational.
1186
(e) Notwithstanding the opportunity to defer costs under Subsection (4)(c), a cost
1187
incurred by an electrical corporation for siting, property acquisition, equipment, design,
1188
licensing, and permitting of a renewable energy source that the electrical corporation proposes
1189
to construct shall be included in the electrical corporation's project costs for the purpose of
1190
evaluating the project's cost-effectiveness.
1191
(f) A deferred cost under Subsection (4)(a) may not be added to, or otherwise
1192
considered in the evaluation of, the cost of a project proposed by any person other than the
1193
electrical corporation for the purpose of evaluating that person's proposal.
1194
Section 20.
Section
54-17-606
is enacted to read:
1195
54-17-606. Commission rules.
1196
The commission shall make rules as necessary to implement this part.
1197
Section 21.
Section
54-17-607
is enacted to read:
1198
54-17-607. Procedure and appeals under this chapter.
1199
(1) The governing authority, as defined in Section
54-15-102
, has primary jurisdiction
1200
concerning issues of interpretation, implementation, and administration of this chapter.
1201
(2) An appeal of a commission order under this chapter is governed by Chapter 7,
1202
Hearings, Practice, and Procedure.
1203
Section 22.
Section
54-17-701
is enacted to read:
1204
Part 7. Carbon Sequestration
1205
54-17-701. Rules for carbon capture and geological storage.
1206
(1) By January 1, 2011, the Division of Water Quality and the Division of Air Quality,
1207
on behalf of the Board of Water Quality and the Board of Air Quality, respectively, in
1208
collaboration with the commission and the Division of Oil, Gas and Mining and the Utah
1209
Geological Survey, shall present recommended rules to the Legislature's Administrative Rules
1210
Review Committee for the following in connection with carbon capture and accompanying
1211
geological sequestration of captured carbon:
1212
(a) site characterization approval;
1213
(b) geomechanical, geochemical, and hydrogeological simulation;
1214
(c) risk assessment;
1215
(d) mitigation and remediation protocols;
1216
(e) issuance of permits for test, injection, and monitoring wells;
1217
(f) specifications for the drilling, construction, and maintenance of wells;
1218
(g) issues concerning ownership of subsurface rights and pore space;
1219
(h) allowed composition of injected matter;
1220
(i) testing, monitoring, measurement, and verification for the entirety of the carbon
1221
capture and geologic sequestration chain of operations, from the point of capture of the carbon
1222
dioxide to the sequestration site;
1223
(j) closure and decommissioning procedure;
1224
(k) short- and long-term liability and indemnification for sequestration sites;
1225
(l) conversion of enhanced oil recovery operations to carbon dioxide geological
1226
sequestration sites; and
1227
(m) other issues as identified.
1228
(2) The entities listed in Subsection (1) shall report to the Legislature's Administrative
1229
Rules Review Committee any proposals for additional statutory changes needed to implement
1230
rules contemplated under Subsection (1).
1231
(3) On or before July 1, 2009, the entities listed in Subsection (1) shall submit to the
1232
Legislature's Public Utilities and Technology and Natural Resources, Agriculture, and
1233
Environment Interim Committees a progress report on the development of the recommended
1234
rules required by this part.
1235
(4) The recommended rules developed under this section apply to the injection of
1236
carbon dioxide and other associated injectants in allowable types of geological formations for
1237
the purpose of reducing emissions to the atmosphere through long-term geological
1238
sequestration as required by law or undertaken voluntarily or for subsequent beneficial reuse.
1239
(5) The recommended rules developed under this section do not apply to the injection
1240
of fluids through the use of Class II injection wells as defined in 40 C.F.R. 144.69(b) for the
1241
purpose of enhanced hydrocarbon recovery.
1242
(6) Rules recommended under this section shall:
1243
(a) ensure that adequate health and safety standards are met;
1244
(b) minimize the risk of unacceptable leakage from the injection well and injection zone
1245
for carbon capture and geologic sequestration; and
1246
(c) provide adequate regulatory oversight and public information concerning carbon
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capture and geologic sequestration.
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Section 23. Effective date.
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If approved by two-thirds of all the members elected to each house, this bill takes effect
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upon approval by the governor, or the day following the constitutional time limit of Utah
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Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
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the date of veto override.
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