H.B. 313

1

ELECTRICAL DEREGULATION AND
2 CUSTOMER CHOICE TASK FORCE
3 1997 GENERAL SESSION
4 STATE OF UTAH
5 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

lilac-February 27, 1997

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.

- 1a -

lilac-February 27, 1997

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
- 2 -

lilac-February 27, 1997

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

lilac-February 27, 1997

- 2a -

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

- 3 -

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 .
- 4 -

lilac-February 27, 1997

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

- 4a -

lilac-February 27, 1997