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H.B. 313

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ELECTRICAL DEREGULATION AND

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CUSTOMER CHOICE TASK FORCE

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1997 GENERAL SESSION

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STATE OF UTAH

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Sponsor: Christine R. Fox

6    AN ACT RELATING TO PUBLIC UTILITIES; h PROVIDING FOR AN INTERIM RATE FREEZE ON
6a     ELECTRIC SERVICE RATES; h CREATING THE ELECTRIC
7    DEREGULATION AND CUSTOMER CHOICE TASK FORCE; PROVIDING FOR
8    MEMBERSHIP; DELINEATING RESPONSIBILITIES AND PROCEDURES; PROVIDING
9    A REPORTING DATE; APPROPRIATING $197,000 FROM THE GENERAL FUND IN
10    FISCAL YEAR 1996-97; PROVIDING AN EFFECTIVE DATE; AND PROVIDING A
11    REPEAL DATE.
11a     h ENACTS:
11b         54-7-12.3, Utah Code Annotated 1953 h
12    This act enacts uncodified material.
13    Be it enacted by the Legislature of the state of Utah:
13a          h Section 1. Section 54-7-12.3 is enacted to read:
13b         54-7-12.3. Task force to consider stranded cost issues -- Interim rate freeze.
13c         (1) THE TASK FORCE CREATED BY H.B. 313, "ELECTRICAL DEREGULATION AND CUSTOMER
13d     CHOICE TASK FORCE" IN THE 1997 GENERAL SESSION SHALL CONSIDER THE FOLLOWING ISSUES
13e     RELATING TO THE STRANDED COSTS OF ELECTRIC SERVICE PROVIDERS:
13f         (a) WHAT ARE STRANDED COSTS;
13g          S [(b) WHAT IS THE VALUE OF h OR MOST APPROPRIATE METHOD OF VALUING THE h
13g1     STRANDED COSTS;
] (b) WHAT ARE THE ALTERNATIVE METHODS, AND THE APPROPRIATENESS OF

13g2     EACH METHOD, FOR MEASURING THE VALUE OF STRANDED COSTS; s
13h         (c) WHO SHOULD PAY FOR STRANDED COSTS; AND
13i         (d) WHEN SHOULD CUSTOMERS BE ALLOWED TO CHOOSE THEIR ELECTRIC SERVICE h

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Text Box

Amend on 2_goldenrod March 3, 1997




13j     h PROVIDERS AND TERMINATE THE SERVICES OF CURRENT PROVIDERS.
13k         (2) TO ALLOW THE TASK FORCE MAXIMUM FLEXIBILITY IN DECIDING THE ISSUES SPECIFIED
13l     IN SUBSECTION (1), EACH INVESTOR-OWNED ELECTRICAL CORPORATION SHALL FREEZE
13m     ITS RATES ON AN INTERIM BASIS ON THE EFFECTIVE DATE OF THIS SECTION FOR EACH OF THE
13n     ELECTRICAL CORPORATION'S ELECTRIC SERVICE SCHEDULES AT JANUARY 31, 1997 LEVELS.
13o     THESE INTERIM RATE LEVELS SHALL REMAIN IN EFFECT UNTIL 60 DAYS FOLLOWING THE
13p     CONCLUSION OF THE 1998 GENERAL SESSION AND SHALL NOT BE FINAL UNTIL THE PUBLIC
13q     SERVICE COMMISSION COMPLETES ANY RATE CASE PENDING AS OF THE EFFECTIVE DATE OF THIS
13r     ACT.
13s         (3) NOTWITHSTANDING SECTIONS 54-4-2, 54-4-4, AND 54-7-12, DURING THE INTERIM RATE
13t     FREEZE PERIOD, THE COMMISSION MAY NOT ORDER, NOR HOLD ANY HEARINGS REGARDING, ANY
13u     INCREASES OR DECREASES IN THE JANUARY 31, 1997 RATES LEVELS OF AN ELECTRICAL
13v     CORPORATION SUBJECT TO THE INTERIM RATE FREEZE. HOWEVER, NOTHING IN THIS SECTION
13w     SHALL PREVENT AN ELECTRICAL CORPORATION FROM PROVIDING, SUBJECT TO THE PROVISIONS
13x     OF SECTION 54-7-12(4), ELECTRIC SERVICES DURING THE INTERIM RATE FREEZE PERIOD AT
13y     [ NONDISCRIMINATORY ] PRICES LESS THAN THE INTERIM RATE FREEZE LEVEL , WHICH
13y1     ARE NONDISCRIMINATORY AS DESCRIBED BY SECTION 54-3-8 . h
14        Section h [1] 2 h . Electric Deregulation and Customer Choice Task Force -- Creation --
15     Membership -- Interim rules followed -- Compensation -- Staff.
16        (1) There is created the Electric Deregulation and Customer Choice Task Force consisting
17    of the following members:
18        (a) five members of the Senate appointed by the president of the Senate, no more than
19    three of whom may be from the same political party; and
20        (b) seven members of the House of Representatives appointed by the speaker of the House
21    of Representatives, no more than five of whom may be from the same political party.
22        (2) (a) The president of the Senate shall designate a member of the Senate appointed under
23    Subsection (1)(a) as a cochair of the task force.
24        (b) The speaker of the House of Representatives shall designate a member of the House
25    of Representatives appointed under Subsection (1)(b) as a cochair of the task force.
26        (3) In conducting its business, the task force shall comply with the rules of legislative
27    interim committees.
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1        (4) Salaries and expenses of the members of the task force shall be paid in accordance with
2    Section 36-2-2 and Legislative Joint Rule 15.03.
3        (5) (a) The task force may create subcommittees to accomplish its duties.
4        (b) Subcommittees may include individuals who are not task force members.
4a         h (c) IF A SUBCOMMITTEE INCLUDES INDIVIDUALS WHO ARE NOT TASK FORCE MEMBERS,
4b     THE COMPOSITION SHALL BE BROAD-BASED SUCH THAT REGULATORY, CONSUMER GROUP,
4c     INDUSTRIAL, MUNICIPAL UTILITY, RURAL ELECTRIC COOPERATIVE, AND INVESTOR-OWNED UTILITY
4d     VIEWPOINTS ARE FULLY REPRESENTED. h
5         h [(c) ] (d) h Individuals other than legislators serving on subcommittees who are not task
5a     force
6    members shall receive no per diem or expenses for their service on the subcommittee.
7        (6) The Office of Legislative Research and General Counsel shall provide staff support
8    to the task force.
9        Section h [2 ] 3 h . Policy goals
10        The task force shall study h THE APPROPRIATENESS OF, AND IF AGREED TO, h the most
10a    appropriate means of implementing h [ the following ] h
11    policy goals h WHICH COULD INCLUDE THE FOLLOWING h :
12        (1) to provide safe, reliable, and reasonably priced electricity for all consumers;
13        (2) to permit electric consumers to choose their suppliers of electricity and electric services
14    at prices determined by the competitive marketplace;
15        (3) to replace comprehensive regulation of electric suppliers with effective competition;
16        (4) to allow all electric consumers to enjoy fair, nondiscriminatory, and comparable access
17    to alternative suppliers of electricity and ancillary electric services, and to electric transmission and
18    distribution systems;
19        (5) to allow all customer classes to enjoy the benefits of a competitive market;
20        (6) to prevent costs from being unfairly shifted among customer classes;
21        (7) to stimulate economic growth through greater competition in the electric industry;
22        (8) to facilitate efforts of businesses to compete in the national and global economy by
23    promoting competition in the electric industry; and
24        (9) to encourage innovation and efficiency in electric products and services through
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25    exposure to the competitive marketplace.
26        Section h [3 ] 4 h . Duties -- Interim report.
27        (1) The task force shall review and make recommendations on the following issues:
28        (a) the extent to which municipal, public, and member-owned providers of electric services
29    should participate in electric deregulation and customer choice and reasonable terms, conditions,
30    and provisions relating to that participation;
31        (b) terms for allowing an owner of retail distribution facilities to recover stranded costs





















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1    and to provide retail electric services in areas currently served by others if and to the extent it
2    permits open access and customer choice for retail customers located within its own service
3    territories;
4        (c) means for providing electric service providers a reasonable opportunity to recover their
5    net, nonmitigatable stranded costs, liabilities, or investments, if any, including regulatory assets,
6    prudently incurred in connection with the provision of electric generation and ancillary services
7    within the state for which a reasonable expectation of recovery existed under existing law and
8    regulations but which no longer exists as a direct result of electric deregulation;
9        (d) procedures for allowing customers, including small commercial and residential
10    customers, to aggregate their electric generation and ancillary services with those of other
11    customers;
12        (e) means for assuring access and eliminating barriers to distribution facilities for all
13    eligible suppliers of electric generation and ancillary services on a fair, open-access, and
14    nondiscriminatory basis;
15        (f) means for assuring that anyone requesting electric services will be connected to
16    distribution facilities on reasonable terms;
17        (g) means for making the benefits of restructuring available to all electric consumers and
18    for preserving existing programs and benefits that are determined to be effective, equitable, and
19    in the public interest, such as low-income, rural, energy efficiency, and renewable resource
20    programs, and plans to phase out those programs over a reasonable period of time, to the extent
21    practicable, to encourage and enable a full transition to competitive markets;
22        (h) procedures, standards of conduct, and other measures for enforcing state laws and
23    policies prohibiting anticompetitive behavior by electric service suppliers, including:
24        (i) any necessary separation of generation, transmission, and distribution functions; and
25        (ii) procedures for requiring a showing by each electric service provider that it lacks any
26    relevant market power or that it has taken adequate steps to mitigate potential anticompetitive
27    behavior or other effects of its market power;
28        (i) terms and conditions for ensuring adequate levels of safety, reliability, disclosure, and
29    customer service, including coordination and enforcement protocols for all users of electric
30    distribution services;
31        (j) provisions to provide all customers an option to continue to receive electric generation

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1    and ancillary services at regulated, cost-based rates;
2        (k) interim or transitional regulations that may be warranted prior to the deregulation of
3    electric generation, including price freezes;
4        (l) the need for changes to existing laws to accommodate retail customer choice; and
5        (m) other issues related to electric deregulation and customer choice.
6         h [(2) A final report, including any proposed legislation, shall be presented to one or more
7     interim committees as designated by the Legislative Management Committee before November
8    30, 1997.
]

8a          (2)(a) AN INTERIM REPORT RELATING TO INVESTOR OWNED ELECTRICAL CORPORATIONS,
8b     INCLUDING ANY PROPOSED LEGISLATION, SHALL BE PRESENTED TO ONE OR MORE INTERIM
8c     COMMITTEES AS DESIGNATED BY THE LEGISLATIVE MANAGEMENT COMMITTEE BY NOVEMBER 30,
8d     1997.
8e         (b) A FINAL REPORT DEALING WITH ALL OTHER ISSUES, INCLUDING ANY PROPOSED
8f     LEGISLATION, SHALL BE PRESENTED TO ONE OR MORE INTERIM COMMITTEES AS DESIGNATED BY
8g     THE LEGISLATIVE MANAGEMENT COMMITTEE BY NOVEMBER 30, 1998. h
9        Section h [4 ] 5 h . Appropriation.
10        There is appropriated from the General Fund for fiscal year 1996-1997:
11        (1) $20,000 to the Senate to pay for the compensation and expenses of senators on the task
12    force;
13        (2) $27,000 to the House of Representatives to pay for the compensation and expenses of
14    representatives on the task force; and
15        (3) $150,000 to the Office of Legislative Research and General Counsel to pay for staffing
16    the task force, including consultant services.
17        Section h [5 ] 6 h . Effective date.
18        If approved by two-thirds of all the members elected to each house, this act takes effect
19    upon approval by the governor, or the day following the constitutional time limit of Utah
20    Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto, the
21    date of veto override.
22        Section h [6 ] 7 h . Repeal date.
23        This act is repealed November 30, h [1997 ] 1998 h .
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Legislative Review Note
    as of 2-7-97 7:36 AM


A limited legal review of this bill raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel






































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