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First Substitute S.B. 202
Senator Curtis S. Bramble proposes the following substitute bill:
1
ENERGY RESOURCE AND CARBON EMISSION
2
REDUCTION INITIATIVE
3
2008 GENERAL SESSION
4
STATE OF UTAH
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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
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percentage of electricity sold in the form of renewable energy resources and makes
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other 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 Act
18
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
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electricity, including renewable energy resources, if cost effective;
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. 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
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electric 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.
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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;
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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;
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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
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calendar year from activities or programs promoting electric energy efficiency or conservation
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or more 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
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Council 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
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geological sequestration or through other verifiably permanent reductions in carbon dioxide
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emissions through the use of technology.
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(8) "Qualifying electricity" means electricity generated on or after January 1, 1995
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from 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
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which the facility became operational, if the upgrades become operational on or after January
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1, 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
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the 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
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quantity of renewable energy certificates to which the user is entitled determined by the
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equivalent kilowatt-hours saved, except to the extent the commission determines otherwise
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with respect to 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,
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except 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
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retail electric sales in this state of each municipal electric utility shall consist of qualifying
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electricity or renewable energy certificates in an amount equal to at least 20% of adjusted retail
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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
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target 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
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acquired for a program permitting the municipal electric utility's customers to voluntarily
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contribute to a 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
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state in which the municipal electric utility, or the interlocal entity with which the municipal
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electric utility has a contract, provides electric service.
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Section 4.
Section
10-19-202
is enacted to read:
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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
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(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
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not 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:
300
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:
307
54-2-1. Definitions.
308
As used in this title:
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(1) "Avoided costs" means the incremental costs to an electrical corporation of electric
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energy or capacity or both which, due to the purchase of electric energy or capacity or both
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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
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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
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electric plant, or in any way furnishing electric power for public service or to its consumers or
337
members for domestic, commercial, or industrial use, within this state, except independent
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energy producers, and except where electricity is generated on or distributed by the producer
339
solely for the producer's own use, or the use of the producer's tenants, or for the use of
340
members of an association of unit owners formed under Title 57, Chapter 8, Condominium
341
Ownership Act, and not for sale to the public generally.
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(8) "Electric plant" includes all real estate, fixtures, and personal property owned,
343
controlled, operated, or managed in connection with or to facilitate the production, generation,
344
transmission, delivery, or furnishing of electricity for light, heat, or power, and all conduits,
345
ducts, or other devices, materials, apparatus, or property for containing, holding, or carrying
346
conductors used or to be used for the transmission of electricity for light, heat, or power.
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(9) "Gas corporation" includes every corporation and person, their lessees, trustees, and
348
receivers, owning, controlling, operating, or managing any gas plant for public service within
349
this state or for the selling or furnishing of natural gas to any consumer or consumers within the
350
state for domestic, commercial, or industrial use, except in the situation that:
351
(a) gas is made or produced on, and distributed by the maker or producer through,
352
private property:
353
(i) solely for the maker's or producer's own use or the use of the maker's or producer's
354
tenants; and
355
(ii) not for sale to others;
356
(b) gas is compressed on private property solely for the owner's own use or the use of
357
the owner's employees as a motor vehicle fuel; or
358
(c) gas is compressed by a retailer of motor vehicle fuel on the retailer's property solely
359
for sale as a motor vehicle fuel.
360
(10) "Gas plant" includes all real estate, fixtures, and personal property owned,
361
controlled, operated, or managed in connection with or to facilitate the production, generation,
362
transmission, delivery, or furnishing of gas, natural or manufactured, for light, heat, or power.
363
(11) "Heat corporation" includes every corporation and person, their lessees, trustees,
364
and receivers, owning, controlling, operating, or managing any heating plant for public service
365
within this state.
366
(12) (a) "Heating plant" includes all real estate, fixtures, machinery, appliances, and
367
personal property controlled, operated, or managed in connection with or to facilitate the
368
production, generation, transmission, delivery, or furnishing of artificial heat.
369
(b) "Heating plant" does not include either small power production facilities or
370
cogeneration facilities.
371
(13) "Independent energy producer" means every electrical corporation, person,
372
corporation, or government entity, their lessees, trustees, or receivers, that own, operate,
373
control, or manage [a small] an independent power production or cogeneration facility.
374
(14) "Independent power production facility" means a facility that:
375
(a) produces electric energy solely by the use, as a primary energy source, of biomass,
376
waste, a renewable resource, a geothermal resource, or any combination of the preceding
377
sources; or
378
(b) is a qualifying power production facility.
379
[(14)] (15) "Private telecommunications system" includes all facilities for the
380
transmission of signs, signals, writing, images, sounds, messages, data, or other information of
381
any nature by wire, radio, lightwaves, or other electromagnetic means, excluding mobile radio
382
facilities, that are owned, controlled, operated, or managed by a corporation or person,
383
including their lessees, trustees, receivers, or trustees appointed by any court, for the use of that
384
corporation or person and not for the shared use with or resale to any other corporation or
385
person on a regular basis.
386
[(15)] (16) (a) "Public utility" includes every railroad corporation, gas corporation,
387
electrical corporation, distribution electrical cooperative, wholesale electrical cooperative,
388
telephone corporation, telegraph corporation, water corporation, sewerage corporation, heat
389
corporation, and independent energy producer not described in Subsection [(15)] (16)(d),
390
where the service is performed for, or the commodity delivered to, the public generally, or in
391
the case of a gas corporation or electrical corporation where the gas or electricity is sold or
392
furnished to any member or consumers within the state for domestic, commercial, or industrial
393
use.
394
(b) (i) If any railroad corporation, gas corporation, electrical corporation, telephone
395
corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation,
396
or independent energy producer not described in Subsection [(15)] (16)(d), performs a service
397
for or delivers a commodity to the public, it is considered to be a public utility, subject to the
398
jurisdiction and regulation of the commission and this title.
399
(ii) If a gas corporation, independent energy producer not described in Subsection
400
[(15)] (16)(d), or electrical corporation sells or furnishes gas or electricity to any member or
401
consumers within the state, for domestic, commercial, or industrial use, for which any
402
compensation or payment is received, it is considered to be a public utility, subject to the
403
jurisdiction and regulation of the commission and this title.
404
(c) Any corporation or person not engaged in business exclusively as a public utility as
405
defined in this section is governed by this title in respect only to the public utility owned,
406
controlled, operated, or managed by the corporation or person, and not in respect to any other
407
business or pursuit.
408
(d) An independent energy producer is exempt from the jurisdiction and regulations of
409
the commission with respect to an independent power production facility if it meets the
410
requirements of Subsection [(15)] (16)(d)(i), (ii), or (iii), or any combination of these:
411
(i) the commodity or service is produced or delivered, or both, by an independent
412
energy producer solely for the uses exempted in Subsection (7) or for the use of state-owned
413
facilities;
414
(ii) the commodity or service is sold by an independent energy producer solely to an
415
electrical corporation or other wholesale purchaser; or
416
(iii) (A) the commodity or service delivered by the independent energy producer is
417
delivered to an entity which controls, is controlled by, or affiliated with the independent energy
418
producer or to a user located on real property managed by the independent energy producer;
419
and
420
(B) the real property on which the service or commodity is used is contiguous to real
421
property which is owned or controlled by the independent energy producer. Parcels of real
422
property separated solely by public roads or easements for public roads shall be considered as
423
contiguous for purposes of this Subsection [(15)] (16).
424
(e) Any person or corporation defined as an electrical corporation or public utility
425
under this section may continue to serve its existing customers subject to any order or future
426
determination of the commission in reference to the right to serve those customers.
427
(f) (i) "Public utility" does not include any person that is otherwise considered a public
428
utility under this Subsection [(15)] (16) solely because of that person's ownership of an interest
429
in an electric plant, cogeneration facility, or small power production facility in this state if all of
430
the following conditions are met:
431
(A) the ownership interest in the electric plant, cogeneration facility, or small power
432
production facility is leased to:
433
(I) a public utility, and that lease has been approved by the commission;
434
(II) a person or government entity that is exempt from commission regulation as a
435
public utility; or
436
(III) a combination of Subsections [(15)] (16)(f)(i)(A)(I) and (II);
437
(B) the lessor of the ownership interest identified in Subsection [(15)] (16)(f)(i)(A) is:
438
(I) primarily engaged in a business other than the business of a public utility; or
439
(II) a person whose total equity or beneficial ownership is held directly or indirectly by
440
another person engaged in a business other than the business of a public utility; and
441
(C) the rent reserved under the lease does not include any amount based on or
442
determined by revenues or income of the lessee.
443
(ii) Any person that is exempt from classification as a public utility under Subsection
444
[(15)] (16)(f)(i) shall continue to be so exempt from classification following termination of the
445
lessee's right to possession or use of the electric plant for so long as the former lessor does not
446
operate the electric plant or sell electricity from the electric plant. If the former lessor operates
447
the electric plant or sells electricity, the former lessor shall continue to be so exempt for a
448
period of 90 days following termination, or for a longer period that is ordered by the
449
commission. This period may not exceed one year. A change in rates that would otherwise
450
require commission approval may not be effective during the 90-day or extended period
451
without commission approval.
452
(g) "Public utility" does not include any person that provides financing for, but has no
453
ownership interest in an electric plant, small power production facility, or cogeneration facility.
454
In the event of a foreclosure in which an ownership interest in an electric plant, small power
455
production facility, or cogeneration facility is transferred to a third-party financer of an electric
456
plant, small power production facility, or cogeneration facility, then that third-party financer is
457
exempt from classification as a public utility for 90 days following the foreclosure, or for a
458
longer period that is ordered by the commission. This period may not exceed one year.
459
(h) (i) The distribution or transportation of natural gas for use as a motor vehicle fuel
460
does not cause the distributor or transporter to be a "public utility," unless the commission,
461
after notice and a public hearing, determines by rule that it is in the public interest to regulate
462
the distributers or transporters, but the retail sale alone of compressed natural gas as a motor
463
vehicle fuel may not cause the seller to be a "public utility."
464
(ii) In determining whether it is in the public interest to regulate the distributors or
465
transporters, the commission shall consider, among other things, the impact of the regulation
466
on the availability and price of natural gas for use as a motor fuel.
467
[(16)] (17) "Purchasing utility" means any electrical corporation that is required to
468
purchase electricity from small power production or cogeneration facilities pursuant to the
469
Public Utility Regulatory Policies Act, 16 U.S.C. Section 824a-3.
470
(18) "Qualifying power producer" means a corporation, cooperative association, or
471
person, or the lessee, trustee, and receiver of the corporation, cooperative association, or
472
person, who owns, controls, operates, or manages any qualifying power production facility or
473
cogeneration facility.
474
(19) "Qualifying power production facility" means a facility that:
475
(a) produces electrical energy solely by the use, as a primary energy source, of biomass,
476
waste, a renewable resource, a geothermal resource, or any combination of the preceding
477
sources;
478
(b) has a power production capacity that, together with any other facilities located at
479
the same site, is no greater than 80 megawatts; and
480
(c) is a qualifying small power production facility under federal law.
481
[(17)] (20) "Railroad" includes every commercial, interurban, and other railway, other
482
than a street railway, and each branch or extension of a railway, by any power operated,
483
together with all tracks, bridges, trestles, rights-of-way, subways, tunnels, stations, depots,
484
union depots, yards, grounds, terminals, terminal facilities, structures, and equipment, and all
485
other real estate, fixtures, and personal property of every kind used in connection with a
486
railway owned, controlled, operated, or managed for public service in the transportation of
487
persons or property.
488
[(18)] (21) "Railroad corporation" includes every corporation and person, their lessees,
489
trustees, and receivers, owning, controlling, operating, or managing any railroad for public
490
service within this state.
491
[(19)] (22) (a) "Sewerage corporation" includes every corporation and person, their
492
lessees, trustees, and receivers, owning, controlling, operating, or managing any sewerage
493
system for public service within this state.
494
(b) "Sewerage corporation" does not include private sewerage companies engaged in
495
disposing of sewage only for their stockholders, or towns, cities, counties, conservancy
496
districts, improvement districts, or other governmental units created or organized under any
497
general or special law of this state.
498
[(20) "Small power production facility" means a facility which:]
499
[(a) produces electric energy solely by the use, as a primary energy source, of biomass,
500
waste, renewable resources, geothermal resources, or any combination of them;]
501
[(b) has a power production capacity that, together with any other facilities located at
502
the same site, is not greater than 80 megawatts; and]
503
[(c) is a qualifying small power production facility under federal law.]
504
[(21)] (23) "Telegraph corporation" includes every corporation and person, their
505
lessees, trustees, and receivers, owning, controlling, operating, or managing any telegraph line
506
for public service within this state.
507
[(22)] (24) "Telegraph line" includes all conduits, ducts, poles, wires, cables,
508
instruments, and appliances, and all other real estate, fixtures, and personal property owned,
509
controlled, operated, or managed in connection with or to facilitate communication by
510
telegraph, whether that communication be had with or without the use of transmission wires.
511
[(23)] (25) (a) "Telephone corporation" means any corporation or person, and their
512
lessees, trustee, receivers, or trustees appointed by any court, who owns, controls, operates,
513
manages, or resells a public telecommunications service as defined in Section
54-8b-2
.
514
(b) "Telephone corporation" does not mean a corporation, partnership, or firm
515
providing:
516
(i) intrastate telephone service offered by a provider of cellular, personal
517
communication systems (PCS), or other commercial mobile radio service as defined in 47
518
U.S.C. Sec. 332 that has been issued a covering license by the Federal Communications
519
Commission;
520
(ii) Internet service; or
521
(iii) resold intrastate toll service.
522
[(24)] (26) "Telephone line" includes all conduits, ducts, poles, wires, cables,
523
instruments, and appliances, and all other real estate, fixtures, and personal property owned,
524
controlled, operated, or managed in connection with or to facilitate communication by
525
telephone whether that communication is had with or without the use of transmission wires.
526
[(25)] (27) "Transportation of persons" includes every service in connection with or
527
incidental to the safety, comfort, or convenience of the person transported, and the receipt,
528
carriage, and delivery of that person and that person's baggage.
529
[(26)] (28) "Transportation of property" includes every service in connection with or
530
incidental to the transportation of property, including in particular its receipt, delivery,
531
elevation, transfer, switching, carriage, ventilation, refrigeration, icing, dunnage, storage, and
532
hauling, and the transmission of credit by express companies.
533
[(27)] (29) "Water corporation" includes every corporation and person, their lessees,
534
trustees, and receivers, owning, controlling, operating, or managing any water system for
535
public service within this state. It does not include private irrigation companies engaged in
536
distributing water only to their stockholders, or towns, cities, counties, water conservancy
537
districts, improvement districts, or other governmental units created or organized under any
538
general or special law of this state.
539
[(28)] (30) (a) "Water system" includes all reservoirs, tunnels, shafts, dams, dikes,
540
headgates, pipes, flumes, canals, structures, and appliances, and all other real estate, fixtures,
541
and personal property owned, controlled, operated, or managed in connection with or to
542
facilitate the diversion, development, storage, supply, distribution, sale, furnishing, carriage,
543
appointment, apportionment, or measurement of water for power, fire protection, irrigation,
544
reclamation, or manufacturing, or for municipal, domestic, or other beneficial use.
545
(b) "Water system" does not include private irrigation companies engaged in
546
distributing water only to their stockholders.
547
[(29)] (31) "Wholesale electrical cooperative" includes every electrical corporation that
548
is:
549
(a) in the business of the wholesale distribution of electricity it has purchased or
550
generated to its members and the public; and
551
(b) required to distribute or allocate savings in excess of additions to reserves and
552
surplus to members or patrons on the basis of patronage.
553
Section 8.
Section
54-12-1
is amended to read:
554
54-12-1. Legislative policy.
555
(1) The Legislature declares that in order to promote the more rapid development of
556
new sources of electrical energy, to maintain the economic vitality of the state through the
557
continuing production of goods and the employment of its people, and to promote the efficient
558
utilization and distribution of energy, it is desirable and necessary to encourage independent
559
energy producers to competitively develop sources of electric energy not otherwise available to
560
Utah businesses, residences, and industries served by electrical corporations, and to remove
561
unnecessary barriers to energy transactions involving independent energy producers and
562
electrical corporations.
563
(2) It is the policy of this state to encourage the development of [small] independent
564
and qualifying power production and cogeneration facilities, to promote a diverse array of
565
economical and permanently sustainable energy resources in an environmentally acceptable
566
manner, and to conserve our finite and expensive energy resources and provide for their most
567
efficient and economic utilization.
568
Section 9.
Section
54-12-2
is amended to read:
569
54-12-2. Purchase of power from qualifying power producers.
570
(1) Purchasing utilities shall offer to purchase power from [independent energy]
571
qualifying power producers.
572
(2) The commission shall establish reasonable rates, terms, and conditions for the
573
purchase or sale of electricity or electrical generating capacity, or both, between a purchasing
574
utility and [an independent energy] a qualifying power producer. In establishing these rates,
575
terms, and conditions, the commission shall either establish a procedure under which [small]
576
qualifying power producers [and cogenerators] offer competitive bids for the sale of power to
577
purchasing utilities or devise an alternative method which considers the purchasing utility's
578
avoided costs. The capacity component of avoided costs shall reflect the purchasing utility's
579
long-term deferral or cancellation of generating units which may result from the purchase of
580
power from [independent energy] qualifying power producers.
581
(3) Purchasing utilities and [independent energy] qualifying power producers may
582
agree to rates, terms, or conditions for the sale of electricity or electrical capacity which differ
583
from the rates, terms, and conditions adopted by the commission under Subsection (2).
584
(4) The commission may adopt further rules which encourage the development of
585
small power production and cogeneration facilities.
586
Section 10.
Section
54-12-3
is amended to read:
587
54-12-3. Recovery of investment costs.
588
The commission may not consider any purchasing utility's purchase of power from [an
589
independent energy] a qualifying power producer as a reason for disallowing recovery of the
590
purchasing utility's investment costs for facilities which are in use prior to signing a contract
591
for the purchase of power from [an independent energy] a qualifying power producer.
592
Section 11.
Section
54-17-201
is amended to read:
593
54-17-201. Solicitation process required -- Exception.
594
(1) (a) An affected electrical utility shall comply with this chapter to acquire or
595
construct a significant energy resource after February 25, 2005.
596
(b) Notwithstanding Subsection (1)(a), this chapter does not apply to a significant
597
energy resource for which the affected electrical utility has issued a solicitation before February
598
25, 2005.
599
(2) (a) Except as provided in Subsection (3), to acquire or construct a significant
600
energy resource, an affected electrical utility shall conduct a solicitation process that is
601
approved by the commission.
602
(b) To obtain the approval of the commission of a solicitation process, the affected
603
electrical utility shall file with the commission a request for approval that includes:
604
(i) a description of the solicitation process the affected electrical utility will use;
605
(ii) a complete proposed solicitation; and
606
(iii) any other information the commission requires by rule made in accordance with
607
Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
608
(c) In ruling on the request for approval of a solicitation process, the commission shall
609
determine whether the solicitation process:
610
(i) complies with this chapter and rules made in accordance with Title 63, Chapter 46a,
611
Utah Administrative Rulemaking Act; and
612
(ii) is in the public interest taking into consideration:
613
(A) whether it will most likely result in the acquisition, production, and delivery of
614
electricity at the lowest reasonable cost to the retail customers of an affected electrical utility
615
located in this state;
616
(B) long-term and short-term impacts;
617
(C) risk;
618
(D) reliability;
619
(E) financial impacts on the affected electrical utility; and
620
(F) other factors determined by the commission to be relevant.
621
(d) Before approving a solicitation process under this section the commission:
622
(i) may hold a public hearing; and
623
(ii) shall provide an opportunity for public comment.
624
(e) As part of its review of a solicitation process, the commission may provide the
625
affected electrical utility guidance on any additions or changes to its proposed solicitation
626
process.
627
(f) Unless the commission determines that additional time to analyze a solicitation
628
process is warranted and is in the public interest, within [90] 60 days of the day on which the
629
affected electrical utility files a request for approval of the solicitation process, the commission
630
shall:
631
(i) approve a proposed solicitation process;
632
(ii) suggest modifications to a proposed solicitation process; or
633
(iii) reject a proposed solicitation process.
634
(3) Notwithstanding Subsection (2), an affected electrical utility may acquire or
635
construct a significant energy resource without conducting a solicitation process if it obtains a
636
waiver of the solicitation requirement in accordance with Section
54-17-501
.
637
(4) In accordance with the commission's authority under Subsection
54-12-2
(2), the
638
commission shall determine:
639
(a) whether this chapter or another competitive bidding procedure shall apply to a
640
purchase of a significant energy resource by an affected electrical utility from a small power
641
producer or cogenerator; and
642
(b) if this chapter applies as provided in Subsection (4)(a), the manner in which this
643
chapter applies to a purchase of a significant energy resource by an affected electrical utility
644
from a small power producer or cogenerator.
645
Section 12.
Section
54-17-302
is amended to read:
646
54-17-302. Approval of a significant energy resource decision required.
647
(1) If pursuant to Part 2, Solicitation Process, an affected electrical utility is required to
648
conduct a solicitation for a significant energy resource or obtains a waiver of the requirement to
649
conduct a solicitation under Section
54-17-501
, but does not obtain a waiver of the requirement
650
to obtain approval of the significant energy resource decision under Section
54-17-501
, the
651
affected electrical utility shall obtain approval of its significant energy resource decision:
652
(a) after the completion of the solicitation process, if the affected electrical utility is
653
required to conduct a solicitation; and
654
(b) before an affected electrical utility may construct or enter into a binding agreement
655
to acquire the significant energy resource.
656
(2) (a) To obtain the approval required by Subsection (1), the affected electrical utility
657
shall file a request for approval with the commission.
658
(b) The request for approval required by this section shall include any information
659
required by the commission by rule made in accordance with Title 63, Chapter 46a, Utah
660
Administrative Rulemaking Act.
661
(3) In ruling on a request for approval of a significant energy resource decision, the
662
commission shall determine whether the significant energy resource decision:
663
(a) is reached in compliance with this chapter and rules made in accordance with Title
664
63, Chapter 46a, Utah Administrative Rulemaking Act;
665
(b) (i) is reached in compliance with the solicitation process approved by the
666
commission in accordance with Part 2, Solicitation Process; or
667
(ii) is reached after the waiver of the solicitation process as provided in Subsection
668
54-17-201
(3); and
669
(c) is in the public interest, taking into consideration:
670
(i) whether it will most likely result in the acquisition, production, and delivery of
671
electricity at the lowest reasonable cost to the retail customers of an affected electrical utility
672
located in this state;
673
(ii) long-term and short-term impacts;
674
(iii) risk;
675
(iv) reliability;
676
(v) financial impacts on the affected electrical utility; and
677
(vi) other factors determined by the commission to be relevant.
678
(4) The commission may not approve a significant energy resource decision under this
679
section before holding a public hearing.
680
(5) Unless the commission determines that additional time to analyze a significant
681
energy resource decision is warranted and is in the public interest, within [180] 120 days of the
682
day on which the affected electrical utility files a request for approval, the commission shall:
683
(a) approve the significant energy resource decision;
684
(b) approve the significant energy resource decision subject to conditions imposed by
685
the commission; or
686
(c) disapprove the significant energy resource decision.
687
(6) The commission shall include in its order under this section:
688
(a) findings as to the total projected costs for construction or acquisition of an
689
approved significant energy resource; and
690
(b) the basis upon which the findings described in Subsection (6)(a) are made.
691
(7) Notwithstanding any other provision of this part, an affected electrical utility may
692
acquire a significant energy resource without obtaining approval pursuant to this section if it
693
obtains a waiver of the requirement for approval in accordance with Section
54-17-501
.
694
(8) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
695
commission shall make rules regarding the process for approval of a significant energy
696
resource decision under this section.
697
Section 13.
Section
54-17-303
is amended to read:
698
54-17-303. Cost recovery.
699
(1) (a) Except as otherwise provided in this section, if the commission approves a
700
significant energy resource decision under Section
54-17-302
, the commission shall, in a
701
general rate case or other appropriate commission proceeding, include in the affected electrical
702
utility's retail electric rates the state's share of costs:
703
(i) relevant to the proceeding;
704
(ii) incurred by the affected electrical utility in constructing or acquiring the approved
705
significant energy resource; and
706
(iii) up to the projected costs specified in the commission's order issued under Section
707
54-17-302
.
708
(b) (i) The commission shall, in a general rate case or other appropriate commission
709
proceeding, include in the affected electrical utility's retail electric rates the state's share of the
710
incremental cost relevant to the proceeding that were prudently incurred by the affected
711
electrical utility to identify, evaluate, and submit a reasonable benchmark option, whether or
712
not the benchmark option is selected or becomes operational.
713
(ii) A recoverable cost under Subsection (1)(b)(i) shall be included in the affected
714
electrical utility's project costs for the purpose of evaluating the project's cost-effectiveness.
715
(iii) A recoverable cost under Subsection (1)(b)(i) may not be added to the cost or
716
otherwise considered in the evaluation of a project proposed by any person other than the
717
affected electrical utility for the purpose of evaluating that person's proposal.
718
[(b)] (c) Except to the extent that the commission enters an order under Section
719
54-17-304
, an increase from the projected costs specified in the commission's order issued
720
under Section
54-17-302
shall be subject to review by the commission as part of a rate hearing
721
under Section
54-7-12
.
722
(2) (a) Subsequent to the commission issuing an order described in Subsection (2)(a)(i)
723
or (ii), the commission may disallow some or all costs incurred in connection with an
724
approved significant energy resource decision if the commission finds that an affected
725
electrical utility's actions in implementing an approved significant energy resource decision are
726
not prudent because of new information or changed circumstances that occur after:
727
(i) the commission's approval of the significant energy resource decisions under
728
Section
54-17-302
; or
729
(ii) a commission order to proceed under Section
54-17-304
.
730
(b) In making a determination of prudence under Subsection (2)(a), the commission
731
shall use the standards identified in Section
54-4-4
.
732
(3) Notwithstanding any other provision of this chapter, the commission may disallow
733
some or all of the costs incurred by an affected electrical utility in connection with an approved
734
significant energy resource decision upon a finding by the commission that the affected
735
electrical utility is responsible for a material misrepresentation or concealment in connection
736
with an approval process under this chapter.
737
Section 14.
Section
54-17-502
is enacted to read:
738
54-17-502. Renewable energy source -- Solicitation -- Consultant.
739
(1) Sections
54-17-102
through
54-17-404
do not apply to a significant energy resource
740
that is a renewable energy source as defined in Section
54-17-601
if the nameplate capacity of
741
the renewable energy source does not exceed 300 megawatts or, if applicable, the quantity of
742
capacity that is the subject of a contract for the purchase of electricity from a renewable energy
743
source does not exceed 300 megawatts.
744
(2) (a) (i) An affected electrical utility shall issue a public solicitation of bids for a
745
renewable energy source up to 300 megawatts in size by January 31 of each year in which it
746
reasonably anticipates that it will need to acquire or commence construction of a renewable
747
energy resource.
748
(ii) A solicitation for a renewable energy source issued by January 31, 2008 for up to
749
99 megawatts satisfies the requirement of this Subsection (2) for the year 2008 if:
750
(A) not later than 30 days after the day on which this section takes effect, the affected
751
electrical utility amends the solicitation or initiates a new solicitation to seek bids for
752
renewable energy source projects up to 300 megawatts in size; and
753
(B) within 60 days after the day on which this section takes effect and as soon as
754
practicable, the commission retains a consultant in accordance with Subsection (3).
755
(b) A consultant hired under Subsection (2)(a)(ii)(B) shall perform the consultant's
756
duties under Subsection (3) in relation to the status of the solicitation process at the time the
757
consultant is retained and may not unreasonably delay the solicitation process.
758
(c) For a solicitation issued after January 31, 2008:
759
(i) the affected electrical utility shall develop a reasonable process for pre-approval of
760
bidders; and
761
(ii) in addition to publicly issuing the solicitation in Subsection (2)(a)(i), the affected
762
electrical utility shall send copies of the solicitation to each potential bidder who is
763
pre-approved.
764
(d) The affected electrical utility shall evaluate in good faith each bid that is received
765
and negotiate in good faith with each bidder whose bid appears to be cost effective, as defined
766
in Section
54-17-602
.
767
(e) Beginning on August 1, 2008, and on each August 1 thereafter, the affected
768
electrical utility shall file a notice with the commission indicating whether it reasonably
769
anticipates that it will need to acquire or commence construction of a renewable energy
770
resource during the following year.
771
(3) (a) If the commission receives a notice under Subsection (2)(e) that the affected
772
electrical utility reasonably anticipates that it will need to acquire or commence construction of
773
a renewable energy source during the following year, the commission shall promptly retain a
774
consultant to:
775
(i) validate that the affected electrical utility is following the bidder pre-approval
776
process developed pursuant to Subsection (2)(c) and make recommendations for changes to the
777
pre-approval process for future solicitations;
778
(ii) monitor and document all material aspects of the bids, bid evaluations, and bid
779
negotiations between the affected electrical utility and any bidders in the solicitation process;
780
(iii) maintain adequate documentation of each bid, including the solicitation,
781
evaluation, and negotiation processes and the reason for the conclusion of negotiations, which
782
documentation shall be transmitted to the commission at the conclusion of all negotiations in
783
the solicitation; and
784
(iv) be available to testify under oath before the commission in any relevant proceeding
785
concerning all aspects of the public solicitation process.
786
(b) The commission and the consultant shall use all reasonable efforts to not delay the
787
solicitation process.
788
(4) Documentation provided to the commission by the consultant shall be available to
789
the affected electrical utility, any bidder, or other interested person under terms and conditions
790
and at times determined appropriate by the commission.
791
(5) (a) The commission and the consultant shall execute a contract approved by the
792
commission with terms and conditions approved by the commission.
793
(b) Unless otherwise provided by contract, an invoice for the consultant's services shall
794
be sent to the Division of Public Utilities for review and approval.
795
(c) After approval under Subsection (5)(b), the invoice shall be forwarded to the
796
affected electrical utility for payment to the consultant.
797
(d) The affected electrical utility may, in a general rate case or other appropriate
798
commission proceeding, include, and the Commission shall allow, recovery by the affected
799
electrical utility of any amount paid by the affected electrical utility for the consultant.
800
(6) (a) Nothing in this section precludes an affected electrical utility from constructing
801
or acquiring any renewable energy source project outside the solicitation process provided for
802
in this section, including purchasing electricity from any renewable energy source project that
803
chooses to self-certify as a qualifying facility under the federal Public Utility Regulatory
804
Policies Act of 1978.
805
(b) An affected electrical utility that constructs a renewable energy source outside the
806
solicitation process of this section or Section
54-17-201
shall file a notice with the commission
807
at least 60 days before the date of commencement of construction, indicating the size and
808
location of the renewable energy source.
809
(c) The date of commencement of construction under Subsection (6)(b) is the date of
810
any directive from an affected electrical utility to the person responsible for the construction of
811
the renewable energy source authorizing or directing the person to proceed with construction.
812
(d) For an affected electrical utility whose rates are regulated by the commission, the
813
utility has the burden of proving in a rate case or other appropriate commission proceeding the
814
prudence, reasonableness, and cost-effectiveness of construction under this Subsection (6),
815
including the method used to evaluate the risks and value of any bid submitted in the
816
solicitation under this section.
817
(7) Nothing in this section requires an affected electrical utility to enter into any
818
transaction that it reasonably believes is not cost effective or otherwise is not in the public
819
interest.
820
Section 15.
Section
54-17-601
is enacted to read:
821
Part 6. Carbon Emission Reductions for Electrical Corporations
822
54-17-601. Definitions.
823
As used in this part:
824
(1) "Adjusted retail electric sales" means the total kilowatt-hours of retail electric sales
825
of an electrical corporation to customers in this state in a calendar year, reduced by:
826
(a) the amount of those kilowatt-hours attributable to electricity generated or purchased
827
in that calendar year from qualifying zero carbon emissions generation and qualifying carbon
828
sequestration generation;
829
(b) the amount of those kilowatt-hours attributable to electricity generated or purchased
830
in that calendar year from generation located within the geographic boundary of the Western
831
Electricity Coordinating Council that derives its energy from one or more of the following but
832
that does not satisfy the definition of a renewable energy source or that otherwise has not been
833
used to satisfy Subsection
54-17-602
(1):
834
(i) wind energy;
835
(ii) solar photovoltaic and solar thermal energy;
836
(iii) wave, tidal, and ocean thermal energy;
837
(iv) except for combustion of wood that has been treated with chemical preservatives
838
such as creosote, pentachlorophenol or chromated copper arsenate, biomass and biomass
839
byproducts, including:
840
(A) organic waste;
841
(B) forest or rangeland woody debris from harvesting or thinning conducted to improve
842
forest or rangeland ecological health and to reduce wildfire risk;
843
(C) agricultural residues;
844
(D) dedicated energy crops; and
845
(E) landfill gas or biogas produced from organic matter, wastewater, anaerobic
846
digesters, or municipal solid waste;
847
(v) geothermal energy;
848
(vi) hydroelectric energy; or
849
(vii) waste gas and waste heat capture or recovery; and
850
(c) the number of kilowatt-hours attributable to reductions in retail sales in that
851
calendar year from demand side management as defined in Section
54-7-12.8
, with the
852
kilowatt-hours for an electrical corporation whose rates are regulated by the commission and
853
adjusted by the commission to exclude kilowatt-hours for which a renewable energy certificate
854
is issued under Subsection
54-17-603
(4)(b).
855
(2) "Amount of kilowatt-hours attributable to electricity generated or purchased in that
856
calendar year from qualifying carbon sequestration generation," for qualifying carbon
857
sequestration generation, means the kilowatt-hours supplied by a facility during the calendar
858
year multiplied by the ratio of the amount of carbon dioxide captured from the facility and
859
sequestered to the sum of the amount of carbon dioxide captured from the facility and
860
sequestered plus the amount of carbon dioxide emitted from the facility during the same
861
calendar year.
862
(3) "Banked renewable energy certificate" means a bundled or unbundled renewable
863
energy certificate that is:
864
(a) not used in a calendar year to comply with this part or with a renewable energy
865
program in another state; and
866
(b) carried forward into a subsequent year.
867
(4) "Bundled renewable energy certificate" means a renewable energy certificate for
868
qualifying electricity that is acquired:
869
(a) by an electrical corporation by a trade, purchase, or other transfer of electricity that
870
includes the renewable energy attributes of, or certificate that is issued for, the electricity; or
871
(b) by an electrical corporation by generating the electricity for which the renewable
872
energy certificate is issued.
873
(5) "Electrical corporation":
874
(a) is as defined in Section
54-2-1
; and
875
(b) does not include a person generating electricity that is not for sale to the public.
876
(6) "Qualifying carbon sequestration generation" means a fossil-fueled generating
877
facility located within the geographic boundary of the Western Electricity Coordinating
878
Council that:
879
(a) becomes operational or is retrofitted on or after January 1, 2008; and
880
(b) reduces carbon dioxide emissions into the atmosphere through permanent
881
geological sequestration or through another verifiably permanent reduction in carbon dioxide
882
emissions through the use of technology.
883
(7) "Qualifying electricity" means electricity generated on or after January 1, 1995
884
from a renewable energy source if:
885
(a) (i) the renewable energy source is located within the geographic boundary of the
886
Western Electricity Coordinating Council; or
887
(ii) the qualifying electricity is delivered to the transmission system of an electrical
888
corporation or a delivery point designated by the electrical corporation for the purpose of
889
subsequent delivery to the electrical corporation; and
890
(b) the renewable energy attributes of the electricity are not traded, sold, transferred, or
891
otherwise used to satisfy another state's renewable energy program.
892
(8) "Qualifying zero carbon emissions generation":
893
(a) means a generation facility located within the geographic boundary of the Western
894
Electricity Coordinating Council that:
895
(i) becomes operational on or after January 1, 2008; and
896
(ii) does not produce carbon as a byproduct of the generation process;
897
(b) includes generation powered by nuclear fuel; and
898
(c) does not include renewable energy sources used to satisfy the requirement
899
established under Subsection
54-17-602
(1).
900
(9) "Renewable energy certificate" means a certificate issued under Section
54-17-603
.
901
(10) "Renewable energy source" means:
902
(a) an electric generation facility or generation capability or upgrade that becomes
903
operational on or after January 1, 1995 that derives its energy from one or more of the
904
following:
905
(i) wind energy;
906
(ii) solar photovoltaic and solar thermal energy;
907
(iii) wave, tidal, and ocean thermal energy;
908
(iv) except for combustion of wood that has been treated with chemical preservatives
909
such as creosote, pentachlorophenol or chromated copper arsenate, biomass and biomass
910
byproducts, including:
911
(A) organic waste;
912
(B) forest or rangeland woody debris from harvesting or thinning conducted to improve
913
forest or rangeland ecological health and to reduce wildfire risk;
914
(C) agricultural residues;
915
(D) dedicated energy crops; and
916
(E) landfill gas or biogas produced from organic matter, wastewater, anaerobic
917
digesters, or municipal solid waste;
918
(v) geothermal energy located outside the state;
919
(vi) waste gas and waste heat capture or recovery; or
920
(vii) efficiency upgrades to a hydroelectric facility, without regard to the date upon
921
which the facility became operational, if the upgrades become operational on or after January
922
1, 1995;
923
(b) any of the following:
924
(i) up to 50 average megawatts of electricity per year per electrical corporation from a
925
certified low-impact hydroelectric facility, without regard to the date upon which the facility
926
becomes operational, if the facility is certified as a low-impact hydroelectric facility on or after
927
January 1, 1995, by a national certification organization;
928
(ii) geothermal energy if located within the state, without regard to the date upon which
929
the facility becomes operational; or
930
(iii) hydroelectric energy if located within the state, without regard to the date upon
931
which the facility becomes operational;
932
(c) hydrogen gas derived from any source of energy described in Subsection (10)(a) or
933
(b);
934
(d) if an electric generation facility employs multiple energy sources, that portion of the
935
electricity generated that is attributable to energy sources described in Subsections (10)(a)
936
through (c); and
937
(e) any of the following located in the state and owned by a user of energy:
938
(i) a demand side management measure, as defined by Subsection
54-7-12.8
(1), with
939
the quantity of renewable energy certificates to which the user is entitled determined by the
940
equivalent energy saved by the measure;
941
(ii) a solar thermal system that reduces the consumption of fossil fuels, with the
942
quantity of renewable energy certificates to which the user is entitled determined by the
943
equivalent kilowatt-hours saved, except to the extent the commission determines otherwise
944
with respect to net-metered energy;
945
(iii) a solar photovoltaic system that reduces the consumption of fossil fuels with the
946
quantity of renewable energy certificates to which the user is entitled determined by the total
947
production of the system, except to the extent the commission determines otherwise with
948
respect to net-metered energy;
949
(iv) a hydroelectric or geothermal facility with the quantity of renewable energy
950
certificates to which the user is entitled determined by the total production of the facility,
951
except to the extent the commission determines otherwise with respect to net-metered energy;
952
(v) a waste gas or waste heat capture or recovery system, other than from a combined
953
cycle combustion turbine that does not use waste gas or waste heat, with the quantity of
954
renewable energy certificates to which the user is entitled determined by the total production of
955
the system, except to the extent the commission determines otherwise with respect to
956
net-metered energy; and
957
(vi) the station use of solar thermal energy, solar photovoltaic energy, hydroelectric
958
energy, geothermal energy, waste gas, or waste heat capture and recovery.
959
(11) "Unbundled renewable energy certificate" means a renewable energy certificate
960
associated with:
961
(a) qualifying electricity that is acquired by an electrical corporation or other person by
962
trade, purchase, or other transfer without acquiring the electricity for which the certificate was
963
issued; or
964
(b) activities listed in Subsection (10)(e).
965
Section 16.
Section
54-17-602
is enacted to read:
966
54-17-602. Target amount of qualifying electricity -- Renewable energy certificate
967
-- Cost-effectiveness -- Cooperatives.
968
(1) (a) To the extent that it is cost effective to do so, beginning in 2025 the annual retail
969
electric sales in this state of each electrical corporation shall consist of qualifying electricity or
970
renewable energy certificates in an amount equal to at least 20% of adjusted retail electric
971
sales.
972
(b) The amount under Subsection (1)(a) is computed based upon adjusted retail electric
973
sales for the calendar year commencing 36 months before the first day of the year for which the
974
target calculated under Subsection (1)(a) applies.
975
(c) Notwithstanding Subsections (1)(a) and (b), an increase in the annual target from
976
one year to the next may not exceed the greater of:
977
(i) 17,500 megawatt-hours; or
978
(ii) 20% of the prior year's amount under Subsections (1)(a) and (b).
979
(2) (a) Cost-effectiveness under Subsection (1) for other than a cooperative association
980
is determined in comparison to other viable resource options using the criteria provided by
981
Subsection
54-17-201
(2)(c)(ii).
982
(b) For an electrical corporation that is a cooperative association, cost effectiveness is
983
determined using criteria applicable to the cooperative association's acquisition of a significant
984
energy resource established by the cooperative association's board of directors.
985
(3) This section does not require an electrical corporation to:
986
(a) substitute qualifying electricity for electricity from a generation source owned or
987
contractually committed, or from a contractual commitment for a power purchase;
988
(b) enter into any additional electric sales commitment or any other arrangement for the
989
sale or other disposition of electricity that is not already, or would not be, entered into by the
990
electrical corporation; or
991
(c) acquire qualifying electricity in excess of its adjusted retail electric sales.
992
(4) For the purpose of Subsection (1), an electrical corporation may combine the
993
following:
994
(a) qualifying electricity from a renewable energy source owned by the electrical
995
corporation;
996
(b) qualifying electricity acquired by the electrical corporation through trade, power
997
purchase, or other transfer; and
998
(c) a bundled or unbundled renewable energy certificate, including a banked renewable
999
energy certificate.
1000
(5) For an electrical corporation whose rates the commission regulates, the following
1001
rules concerning renewable energy certificates apply:
1002
(a) a banked renewable energy certificate with an older issuance date shall be used
1003
before any other banked renewable energy certificate issued at a later date is used; and
1004
(b) the total of all unbundled renewable energy certificates, including unbundled
1005
banked renewable energy certificates, may not exceed 20% of the amount of the annual target
1006
provided for in Subsection (1).
1007
(6) An electrical corporation that is a cooperative association may count towards
1008
Subsection (1) any of the following:
1009
(a) electric production allocated to this state from hydroelectric facilities becoming
1010
operational after December 31, 2007 if the facilities are located in any state in which the
1011
cooperative association, or a generation and transmission cooperative with which the
1012
cooperative association has a contract, provides electric service;
1013
(b) qualifying electricity generated or acquired or renewable energy certificates
1014
acquired for a program that permits a retail customer to voluntarily contribute to a renewable
1015
energy source; and
1016
(c) notwithstanding Subsection
54-17-601
(7), an unbundled renewable energy
1017
certificate purchased from a renewable energy source located outside the geographic boundary
1018
of the Western Electricity Coordinating Council if the electricity on which the unbundled
1019
renewable energy certificate is based would be considered qualifying electricity if the
1020
renewable energy source was located within the geographic boundary of the Western
1021
Electricity Coordinating Council.
1022
(7) The use of the renewable attributes associated with qualifying electricity to satisfy
1023
any federal renewable energy requirement does not preclude the electricity from being
1024
qualifying electricity for the purpose of this chapter.
1025
Section 17.
Section
54-17-603
is enacted to read:
1026
54-17-603. Renewable energy certificate -- Issuance -- Use to satisfy other
1027
requirements.
1028
(1) The commission shall establish a process for issuance or recognition of a renewable
1029
energy certificate.
1030
(2) The commission process under Subsection (1) shall provide for the issuance,
1031
monitoring, accounting, transfer, and use of a renewable energy certificate, including in
1032
electronic form.
1033
(3) The commission:
1034
(a) may consult with another state or a federal agency and any regional system or
1035
trading program to fulfil Subsection (1); and
1036
(b) allow use of a renewable energy certificate that is issued, monitored, accounted for,
1037
or transferred by or through a regional system or trading program, including the Western
1038
Renewable Energy Generation Information system, to fulfil this part's provisions.
1039
(4) A renewable energy certificate shall be issued for:
1040
(a) qualifying electricity generated on and after January 1, 1995; and
1041
(b) the activities of an energy user described in Subsections
10-19-102
(11)(e) and
1042
54-17-601
(10)(e) on and after January 1, 1995.
1043
(5) The person requesting a renewable energy certificate shall affirm that the renewable
1044
energy attributes of the electricity have not been traded, sold, transferred, or otherwise used to
1045
satisfy another state's renewable energy requirements.
1046
(6) (a) For the purpose of satisfying Subsection
54-17-602
(1) and the issuance of a
1047
renewable energy certificate under this section, a renewable energy source located in this state
1048
that derives its energy from solar photovoltaic or solar thermal energy shall be credited for 2.4
1049
kilowatt-hours of qualifying electricity for each 1.0 kilowatt-hour generated.
1050
(b) Notwithstanding Subsection (6)(a), the acquisition or construction by an electrical
1051
corporation of a renewable energy source that derives its energy from solar photovoltaic or
1052
solar thermal energy shall comply with the cost-effectiveness criteria of Subsection
1053
54-17-201
(2)(c)(ii).
1054
(7) A renewable energy certificate issued under this section:
1055
(a) does not expire; and
1056
(b) may be banked.
1057
(8) The commission may recognize a renewable energy certificate that is issued,
1058
monitored, accounted for, or transferred by or through another state or a regional system or
1059
trading program, including the Western Renewable Energy Generation Information System, if
1060
the renewable energy certificate is for qualifying electricity.
1061
(9) A renewable energy certificate:
1062
(a) may be used only once to satisfy Subsection
54-17-602
(1);
1063
(b) may be used for the purpose of Subsection
54-17-602
(1) and the qualifying
1064
electricity on which the renewable energy certificate is based may be used to satisfy any federal
1065
renewable energy requirement; and
1066
(c) may not be used if it has been used to satisfy any other state's renewable energy
1067
requirement.
1068
(10) The commission shall establish procedures and reasonable rates permitting an
1069
electrical corporation that is a purchasing utility under Section
54-12-2
to acquire or retain a
1070
renewable energy certificate associated with the purchase of power from an independent energy
1071
producer.
1072
Section 18.
Section
54-17-604
is enacted to read:
1073
54-17-604. Plans and reports.
1074
(1) An electrical corporation shall develop and maintain a plan for implementing
1075
Subsection
54-17-602
(1), consistent with the cost-effectiveness criteria of Subsection
1076
54-17-201
(2)(c)(ii).
1077
(2) (a) A progress report concerning a plan under Subsection (1) for other than a
1078
cooperative association shall be filed with the commission by January 1 of each of the years
1079
2010, 2015, 2020, and 2024.
1080
(b) For an electrical corporation that is a cooperative association, a progress report
1081
shall be filed with the cooperative association's board of directors by January 1 of each of the
1082
years 2010, 2015, 2020, and 2024.
1083
(3) The progress report under Subsection (2) shall contain:
1084
(a) the actual and projected amount of qualifying electricity through 2025;
1085
(b) the source of qualifying electricity;
1086
(c) (i) an analysis of the cost-effectiveness of renewable energy sources for other than a
1087
cooperative association; or
1088
(ii) an estimate of the cost of achieving the target for an electrical corporation that is a
1089
cooperative association;
1090
(d) a discussion of conditions impacting the renewable energy source and qualifying
1091
electricity markets;
1092
(e) any recommendation for a suggested legislative or program change; and
1093
(f) for other than a cooperative association, any other information requested by the
1094
commission or considered relevant by the electrical corporation.
1095
(4) The plan and progress report required by Subsections (1) and (2) may include
1096
procedures that will be used by the electrical corporation to identify and select any renewable
1097
energy resource and qualifying electricity that satisfy the criteria of Subsection
1098
54-17-201
(2)(c)(ii).
1099
(5) By July 1, 2026, each electrical corporation shall file a final progress report
1100
demonstrating:
1101
(a) how Subsection
54-17-602
(1) is satisfied for the year 2025; or
1102
(b) the reason why Subsection
54-17-602
(1) is not satisfied for the year 2025, if it is
1103
not satisfied.
1104
(6) By January 1 of each of the years 2011, 2016, 2021, and 2025, the Division of
1105
Public Utilities shall submit to the Legislature a report containing a summary of any progress
1106
report filed under Subsections (2) through (5).
1107
(7) The summary required by Subsection (6) shall include any recommendation for
1108
legislative changes.
1109
(8) (a) By July 1, 2027, the commission shall submit to the Legislature a report
1110
summarizing the final progress reports and recommending any legislative changes.
1111
(b) The 2027 summary may contain a recommendation to the Legislature concerning
1112
any action to be taken with respect to an electrical corporation that does not satisfy Subsection
1113
54-17-602
(1) for 2025.
1114
(c) The commission shall provide an opportunity for public comment and take
1115
evidence before recommending any action to be taken with respect to an electrical corporation
1116
that does not satisfy Subsection
54-17-602
(1) for 2025.
1117
(9) If a recommendation containing a penalty for failure to satisfy Subsection
1118
54-17-602
(1) is made under Subsection (8), the proposal shall require that any amount paid by
1119
an electrical corporation as a penalty be utilized to fund demand-side management for the retail
1120
customers of the electrical corporation paying the penalty.
1121
(10) A penalty may not be proposed under this section if an electrical corporation's
1122
failure to satisfy Subsection
54-17-602
(1) is due to:
1123
(a) a lack of cost-effective means to satisfy the requirement; or
1124
(b) force majeure.
1125
(11) By July 1, 2026, an electrical corporation that is a cooperative association shall
1126
file a final progress report demonstrating:
1127
(a) how Subsection
54-17-602
(1) is satisfied for the year 2025; or
1128
(b) the reason why Subsection
54-17-602
(1) is not satisfied for the year 2025 if it is not
1129
satisfied.
1130
(12) The plan and any progress report file under this section by an electrical
1131
corporation that is cooperative association shall be publicly available at the cooperative
1132
association's office or posted on the cooperative association's website.
1133
Section 19.
Section
54-17-605
is enacted to read:
1134
54-17-605. Recovery of costs for renewable energy activities.
1135
(1) In accordance with other law, the commission shall include in the retail electric
1136
rates of an electrical corporation whose rates the commission regulates the state's share of any
1137
of the costs listed in Subsection (2) that are relevant to the proceeding in which the commission
1138
is considering the electrical corporation's rates:
1139
(a) if the costs are prudently incurred by the electrical corporation in connection with:
1140
(i) the acquisition of a renewable energy certificate;
1141
(ii) the acquisition of qualifying electricity for which a renewable energy certificate
1142
will be issued after the acquisition; and
1143
(iii) the acquisition, construction, and use of a renewable energy source; and
1144
(b) to the extent any qualifying electricity or renewable energy source under Subsection
1145
(1)(a) satisfies the cost-effectiveness criteria of Subsection
54-17-201
(2)(c)(ii).
1146
(2) The following are costs that may be recoverable under Subsection (1):
1147
(a) a cost of siting, acquisition of property rights, equipment, design, licensing,
1148
permitting, construction, owning, operating, or otherwise acquiring a renewable energy source
1149
and any associated asset, including transmission;
1150
(b) a cost to acquire qualifying electricity through trade, power purchase, or other
1151
transfer;
1152
(c) a cost to acquire a bundled or unbundled renewable energy certificate, if any net
1153
revenue from the sale of a renewable energy certificate allocable to this state is also included in
1154
rates;
1155
(d) a cost to interconnect a renewable energy source to the electrical corporation's
1156
transmission and distribution system;
1157
(e) a cost associated with using a physical or financial asset to integrate, firm, or shape
1158
a renewable energy source on a firm annual basis to meet a retail electricity need; and
1159
(f) any cost associated with transmission and delivery of qualifying electricity to a
1160
retail electricity consumer.
1161
(3) (a) The commission may allow an electrical corporation to use an adjustment
1162
mechanism or reasonable method other than a rate case under Sections
54-4-4
and
54-7-12
to
1163
allow recovery of costs identified in Subsection (2).
1164
(b) If the commission allows the use of an adjustment mechanism, both the costs and
1165
any associated benefit shall be reflected in the mechanism, to the extent practicable.
1166
(c) This Subsection (3) creates no presumption for or against the use of an adjustment
1167
mechanism.
1168
(4) (a) The commission may permit an electrical corporation to include in its retail
1169
electric rates the state's share of costs prudently incurred by the electrical corporation in
1170
connection with a renewable energy source, whether or not the renewable energy source
1171
ultimately becomes operational, including costs of:
1172
(i) siting;
1173
(ii) property acquisition;
1174
(iii) equipment;
1175
(iv) design;
1176
(v) licensing;
1177
(vi) permitting; and
1178
(vii) other reasonable items related to the renewable energy source.
1179
(b) Subsection (4)(a) creates no presumption concerning the prudence or recoverability
1180
of the costs identified.
1181
(c) To the extent deferral is consistent with other applicable law, the commission may
1182
allow an electrical corporation to defer costs recoverable under Subsection (4)(a) until the
1183
recovery of the deferred costs can be considered in a rate proceeding or an adjustment
1184
mechanism created under Subsection (3).
1185
(d) An application to defer costs shall be filed within 60 days after the day on which
1186
the electrical corporation determines that the renewable energy source project is impaired under
1187
generally accepted accounting principles and will not become operational.
1188
(e) Notwithstanding the opportunity to defer costs under Subsection (4)(c), a cost
1189
incurred by an electrical corporation for siting, property acquisition, equipment, design,
1190
licensing, and permitting of a renewable energy source that the electrical corporation proposes
1191
to construct shall be included in the electrical corporation's project costs for the purpose of
1192
evaluating the project's cost-effectiveness.
1193
(f) A deferred cost under Subsection (4)(a) may not be added to, or otherwise
1194
considered in the evaluation of, the cost of a project proposed by any person other than the
1195
electrical corporation for the purpose of evaluating that person's proposal.
1196
Section 20.
Section
54-17-606
is enacted to read:
1197
54-17-606. Commission rules.
1198
The commission shall make rules as necessary to implement this part.
1199
Section 21.
Section
54-17-607
is enacted to read:
1200
54-17-607. Procedure and appeals under this chapter.
1201
(1) The governing authority, as defined in Section
54-15-102
, has primary jurisdiction
1202
concerning issues of interpretation, implementation, and administration of this chapter.
1203
(2) An appeal of a commission order under this chapter is governed by Chapter 7,
1204
Hearings, Practice, and Procedure.
1205
Section 22.
Section
54-17-701
is enacted to read:
1206
Part 7. Carbon Sequestration
1207
54-17-701. Rules for carbon capture and geological storage.
1208
(1) By January 1, 2011, the Division of Water Quality and the Division of Air Quality,
1209
on behalf of the Board of Water Quality and the Board of Air Quality, respectively, in
1210
collaboration with the commission and the Division of Oil, Gas and Mining and the Utah
1211
Geological Survey, shall present recommended rules to the Legislature's Administrative Rules
1212
Review Committee for the following in connection with carbon capture and accompanying
1213
geological sequestration of captured carbon:
1214
(a) site characterization approval;
1215
(b) geomechanical, geochemical, and hydrogeological simulation;
1216
(c) risk assessment;
1217
(d) mitigation and remediation protocols;
1218
(e) issuance of permits for test, injection, and monitoring wells;
1219
(f) specifications for the drilling, construction, and maintenance of wells;
1220
(g) issues concerning ownership of subsurface rights and pore space;
1221
(h) allowed composition of injected matter;
1222
(i) testing, monitoring, measurement, and verification for the entirety of the carbon
1223
capture and geologic sequestration chain of operations, from the point of capture of the carbon
1224
dioxide to the sequestration site;
1225
(j) closure and decommissioning procedure;
1226
(k) short- and long-term liability and indemnification for sequestration sites;
1227
(l) conversion of enhanced oil recovery operations to carbon dioxide geological
1228
sequestration sites; and
1229
(m) other issues as identified.
1230
(2) The entities listed in Subsection (1) shall report to the Legislature's Administrative
1231
Rules Review Committee any proposals for additional statutory changes needed to implement
1232
rules contemplated under Subsection (1).
1233
(3) On or before July 1, 2009, the entities listed in Subsection (1) shall submit to the
1234
Legislature's Public Utilities and Technology and Natural Resources, Agriculture, and
1235
Environment Interim Committees a progress report on the development of the recommended
1236
rules required by this part.
1237
(4) The recommended rules developed under this section apply to the injection of
1238
carbon dioxide and other associated injectants in allowable types of geological formations for
1239
the purpose of reducing emissions to the atmosphere through long-term geological
1240
sequestration as required by law or undertaken voluntarily or for subsequent beneficial reuse.
1241
(5) The recommended rules developed under this section do not apply to the injection
1242
of fluids through the use of Class II injection wells as defined in 40 C.F.R. 144.69(b) for the
1243
purpose of enhanced hydrocarbon recovery.
1244
(6) Rules recommended under this section shall:
1245
(a) ensure that adequate health and safety standards are met;
1246
(b) minimize the risk of unacceptable leakage from the injection well and injection
1247
zone for carbon capture and geologic sequestration; and
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(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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