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H.B. 265 Enrolled

                 

ELECTRIC COOPERATIVE REGULATORY FEES

                 
2001 GENERAL SESSION

                 
STATE OF UTAH

                 
Sponsor: Gordon E. Snow

                  This act modifies the Public Utilities Code to adjust the fees paid by certain electrical
                  cooperatives. This act amends definitions and makes technical and conforming amendments.
                  This act provides a coordination clause.
                  This act affects sections of Utah Code Annotated 1953 as follows:
                  AMENDS:
                      54-2-1, as last amended by Chapter 55, Laws of Utah 2000
                      54-5-1.5 (Repealed 07/01/01), as last amended by Chapter 170, Laws of Utah 1996
                  Be it enacted by the Legislature of the state of Utah:
                      Section 1. Section 54-2-1 is amended to read:
                       54-2-1. Definitions.
                      As used in this title:
                      (1) "Avoided costs" means the incremental costs to an electrical corporation of electric
                  energy or capacity or both which, due to the purchase of electric energy or capacity or both from
                  small power production or cogeneration facilities, the electrical corporation would not have to
                  generate itself or purchase from another electrical corporation.
                      (2) "Cogeneration facility":
                      (a) means a facility which produces:
                      (i) electric energy; and
                      (ii) steam or forms of useful energy, including heat, which are used for industrial,
                  commercial, heating, or cooling purposes; and
                      (b) is a qualifying cogeneration facility under federal law.
                      (3) "Commission" means the Public Service Commission of [the state of] Utah.
                      (4) "Commissioner" means a member of the commission.
                      (5) (a) "Corporation" includes an association, and a joint stock company having any
                  powers or privileges not possessed by individuals or partnerships. [It]


                      (b) "Corporation" does not include towns, cities, counties, conservancy districts,
                  improvement districts, or other governmental units created or organized under any general or special
                  law of this state.
                      (6) "Distribution electrical cooperative" includes an electrical corporation that:
                      (a) is a cooperative;
                      (b) conducts a business that includes the retail distribution of electricity the cooperative
                  purchases or generates for the cooperative's members; and
                      (c) is required to allocate or distribute savings in excess of additions to reserves and surplus
                  on the basis of patronage to the cooperative's:
                      (i) members; or
                      (ii) patrons.
                      [(6)] (7) "Electrical corporation" includes every corporation, cooperative association, and
                  person, their lessees, trustees, and receivers, owning, controlling, operating, or managing any electric
                  plant, or in any way furnishing electric power for public service or to its consumers or members for
                  domestic, commercial, or industrial use, within this state, except independent energy producers, and
                  except where electricity is generated on or distributed by the producer solely for [his] the producer's
                  own use, or the use of [his] the producer's tenants, or for the use of members of an association of unit
                  owners formed under Title 57, Chapter 8, Condominium Ownership Act, and not for sale to the
                  public generally.
                      [(7)] (8) "Electric plant" includes all real estate, fixtures, and personal property owned,
                  controlled, operated, or managed in connection with or to facilitate the production, generation,
                  transmission, delivery, or furnishing of electricity for light, heat, or power, and all conduits, ducts,
                  or other devices, materials, apparatus, or property for containing, holding, or carrying conductors
                  used or to be used for the transmission of electricity for light, heat, or power.
                      [(8)] (9) "Gas corporation" includes every corporation and person, their lessees, trustees, and
                  receivers, owning, controlling, operating, or managing any gas plant for public service within this
                  state or for the selling or furnishing of natural gas to any consumer or consumers within the state for
                  domestic, commercial, or industrial use, except in the situation that:

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                      (a) gas is made or produced on, and distributed by the maker or producer through, private
                  property[,]:
                      (i) solely for [his] the maker's or producer's own use or the use of [his] the maker's or
                  producer's tenants; and
                      (ii) not for sale to others;
                      (b) gas is compressed on private property solely for the owner's own use or the use of [his]
                  the owner's employees as a motor vehicle fuel; or
                      (c) gas is compressed by a retailer of motor vehicle fuel on [his] the retailer's property solely
                  for sale as a motor vehicle fuel.
                      [(9)] (10) "Gas plant" includes all real estate, fixtures, and personal property owned,
                  controlled, operated, or managed in connection with or to facilitate the production, generation,
                  transmission, delivery, or furnishing of gas, natural or manufactured, for light, heat, or power.
                      [(10)] (11) "Heat corporation" includes every corporation and person, their lessees, trustees,
                  and receivers, owning, controlling, operating, or managing any heating plant for public service
                  within this state.
                      [(11)] (12) (a) "Heating plant" includes all real estate, fixtures, machinery, appliances, and
                  personal property controlled, operated, or managed in connection with or to facilitate the production,
                  generation, transmission, delivery, or furnishing of artificial heat.
                      (b) "Heating plant" does not include either small power production facilities or cogeneration
                  facilities.
                      [(12)] (13) "Independent energy producer" means every electrical corporation, person,
                  corporation, or government entity, their lessees, trustees, or receivers, that own, operate, control, or
                  manage a small power production or cogeneration facility.
                      [(13)] (14) "Private telecommunications system" includes all facilities for the transmission
                  of signs, signals, writing, images, sounds, messages, data, or other information of any nature by wire,
                  radio, lightwaves, or other electromagnetic means, excluding mobile radio facilities, that are owned,
                  controlled, operated, or managed by a corporation or person, including their lessees, trustees,
                  receivers, or trustees appointed by any court, for the use of that corporation or person and not for the

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                  shared use with or resale to any other corporation or person on a regular basis.
                      [(14)] (15) (a) "Public utility" includes every railroad corporation, gas corporation, electrical
                  corporation, distribution electrical cooperative, wholesale electrical cooperative, telephone
                  corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation, and
                  independent energy producer not described in Subsection [(14)] (15)(d), where the service is
                  performed for, or the commodity delivered to, the public generally, or in the case of a gas corporation
                  or electrical corporation where the gas or electricity is sold or furnished to any member or consumers
                  within the state for domestic, commercial, or industrial use.
                      (b) (i) If any railroad corporation, gas corporation, electrical corporation, telephone
                  corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation, or
                  independent energy producer not described in Subsection [(14)] (15)(d), performs a service for or
                  delivers a commodity to the public, it is considered to be a public utility, subject to the jurisdiction
                  and regulation of the commission and this title.
                      (ii) If a gas corporation, independent energy producer not described in Subsection [(14)]
                  (15)(d), or electrical corporation sells or furnishes gas or electricity to any member or consumers
                  within the state, for domestic, commercial, or industrial use, for which any compensation or payment
                  is received, it is considered to be a public utility, subject to the jurisdiction and regulation of the
                  commission and this title.
                      (c) Any corporation or person not engaged in business exclusively as a public utility as
                  defined in this section is governed by this title in respect only to the public utility owned, controlled,
                  operated, or managed by [it or by him] the corporation or person, and not in respect to any other
                  business or pursuit.
                      (d) An independent energy producer is exempt from the jurisdiction and regulations of the
                  commission if it meets the requirements of Subsection (15)(d)(i), (ii), or (iii), or any combination
                  of these:
                      (i) the commodity or service is produced or delivered, or both, by an independent energy
                  producer solely for the uses exempted in Subsection [(6)] (7) or for the use of state-owned facilities;
                      (ii) the commodity or service is sold by an independent energy producer to an electrical

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                  corporation; or
                      (iii) (A) the commodity or service delivered by the independent energy producer is delivered
                  to an entity which controls, is controlled by, or affiliated with the independent energy producer or
                  to a user located on real property managed by the independent energy producer; and
                      (B) the real property on which the service or commodity is used is contiguous to real
                  property which is owned or controlled by the independent energy producer. Parcels of real property
                  separated solely by public roads or easements for public roads shall be considered as contiguous for
                  purposes of this Subsection [(14)] (15).
                      (e) Any person or corporation defined as an electrical corporation or public utility under this
                  section may continue to serve its existing customers subject to any order or future determination of
                  the commission in reference to the right to serve those customers.
                      (f) (i) "Public utility" does not include any person that is otherwise considered a public utility
                  under [the provisions of] this Subsection [(14)] (15) solely because of [its] that person's ownership
                  of an interest in an electric plant, cogeneration facility, or small power production facility in this state
                  if all of the following conditions are met:
                      (A) the ownership interest in the electric plant, cogeneration facility, or small power
                  production facility is leased to:
                      (I) a public utility, and that lease has been approved by the commission;
                      (II) a person or government entity that is exempt from commission regulation as a public
                  utility; or
                      (III) a combination of Subsections [(14)] (15)(f)(i)(A)(I) and (II);
                      (B) the lessor of the ownership interest identified in Subsection [(14)] (15)(f)(i)(A) is:
                      (I) primarily engaged in a business other than the business of a public utility; or
                      (II) a person whose total equity or beneficial ownership is held directly or indirectly by
                  another person engaged in a business other than the business of a public utility; and
                      (C) the rent reserved under the lease does not include any amount based on or determined
                  by revenues or income of the lessee.
                      (ii) Any person that is exempt from classification as a public utility under Subsection [(14)]

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                  (15)(f)(i) shall continue to be so exempt from classification following termination of the lessee's
                  right to possession or use of the electric plant for so long as the former lessor does not operate the
                  electric plant or sell electricity from the electric plant. If the former lessor operates the electric plant
                  or sells electricity, the former lessor shall continue to be so exempt for a period of 90 days following
                  termination, or for a longer period that is ordered by the commission. This period may not exceed
                  one year. [No] A change in rates that would otherwise require commission approval may not be
                  effective during the 90-day or extended period without commission approval.
                      (g) "Public utility" does not include any person that provides financing for, but has no
                  ownership interest in an electric plant, small power production facility, or cogeneration facility. In
                  the event of a foreclosure in which an ownership interest in an electric plant, small power production
                  facility, or cogeneration facility is transferred to a third-party financer of an electric plant, small
                  power production facility, or cogeneration facility, then that third-party financer is exempt from
                  classification as a public utility for 90 days following the foreclosure, or for a longer period that is
                  ordered by the commission. This period may not exceed one year.
                      (h) (i) The distribution or transportation of natural gas for use as a motor vehicle fuel does
                  not cause the distributor or transporter to be a "public utility," unless the commission, after notice
                  and a public hearing, determines by rule that it is in the public interest to regulate the distributers or
                  transporters, but the retail sale alone of compressed natural gas as a motor vehicle fuel may not cause
                  the seller to be a "public utility."
                      (ii) In determining whether it is in the public interest to regulate the distributors or
                  transporters, the commission shall consider, among other things, the impact of the regulation on the
                  availability and price of natural gas for use as a motor fuel.
                      [(15)] (16) "Purchasing utility" means any electrical corporation that is required to purchase
                  electricity from small power production or cogeneration facilities pursuant to the Public Utility
                  Regulatory Policies Act, 16 U.S.C. Section 824a-3.
                      [(16)] (17) "Railroad" includes every commercial, interurban, and other railway, other than
                  a street railway, and each branch or extension of a railway, by any power operated, together with all
                  tracks, bridges, trestles, rights-of-way, subways, tunnels, stations, depots, union depots, yards,

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                  grounds, terminals, terminal facilities, structures, and equipment, and all other real estate, fixtures,
                  and personal property of every kind used in connection with a railway owned, controlled, operated,
                  or managed for public service in the transportation of persons or property.
                      [(17)] (18) "Railroad corporation" includes every corporation and person, their lessees,
                  trustees, and receivers, owning, controlling, operating, or managing any railroad for public service
                  within this state.
                      [(18)] (19) (a) "Sewerage corporation" includes every corporation and person, their lessees,
                  trustees, and receivers, owning, controlling, operating, or managing any sewerage system for public
                  service within this state. [It]
                      (b) "Sewerage corporation" does not include private sewerage companies engaged in
                  disposing of sewage only for their stockholders, or towns, cities, counties, conservancy districts,
                  improvement districts, or other governmental units created or organized under any general or special
                  law of this state.
                      [(19)] (20) "Small power production facility" means a facility which:
                      (a) produces electric energy solely by the use, as a primary energy source, of biomass, waste,
                  renewable resources, geothermal resources, or any combination of them;
                      (b) has a power production capacity [which] that, together with any other facilities located
                  at the same site, is not greater than 80 megawatts; and
                      (c) is a qualifying small power production facility under federal law.
                      [(20)] (21) "Telegraph corporation" includes every corporation and person, their lessees,
                  trustees, and receivers, owning, controlling, operating, or managing any telegraph line for public
                  service within this state.
                      [(21)] (22) "Telegraph line" includes all conduits, ducts, poles, wires, cables, instruments,
                  and appliances, and all other real estate, fixtures, and personal property owned, controlled, operated,
                  or managed in connection with or to facilitate communication by telegraph, whether that
                  communication be had with or without the use of transmission wires.
                      [(22)] (23) (a) "Telephone corporation" means any corporation or person, and their lessees,
                  trustee, receivers, or trustees appointed by any court, who owns, controls, operates, manages, or

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                  resells a public telecommunications service as defined in Section 54-8b-2 .
                      (b) "Telephone corporation" does not mean a corporation, partnership, or firm providing:
                      (i) intrastate telephone service offered by a provider of cellular, personal communication
                  systems (PCS), or other commercial mobile radio service as defined in 47 U.S.C. Sec. 332 that has
                  been issued a covering license by the Federal Communications Commission;
                      (ii) Internet service; or
                      (iii) resold intrastate toll service.
                      [(23)] (24) "Telephone line" includes all conduits, ducts, poles, wires, cables, instruments,
                  and appliances, and all other real estate, fixtures, and personal property owned, controlled, operated,
                  or managed in connection with or to facilitate communication by telephone whether that
                  communication is had with or without the use of transmission wires.
                      [(24)] (25) "Transportation of persons" includes every service in connection with or
                  incidental to the safety, comfort, or convenience of the person transported, and the receipt, carriage,
                  and delivery of that person and [his] that person's baggage.
                      [(25)] (26) "Transportation of property" includes every service in connection with or
                  incidental to the transportation of property, including in particular its receipt, delivery, elevation,
                  transfer, switching, carriage, ventilation, refrigeration, icing, dunnage, storage, and hauling, and the
                  transmission of credit by express companies.
                      [(26)] (27) "Water corporation" includes every corporation and person, their lessees, trustees,
                  and receivers, owning, controlling, operating, or managing any water system for public service
                  within this state. It does not include private irrigation companies engaged in distributing water only
                  to their stockholders, or towns, cities, counties, water conservancy districts, improvement districts,
                  or other governmental units created or organized under any general or special law of this state.
                      [(27)] (28) (a) "Water system" includes all reservoirs, tunnels, shafts, dams, dikes, headgates,
                  pipes, flumes, canals, structures, and appliances, and all other real estate, fixtures, and personal
                  property owned, controlled, operated, or managed in connection with or to facilitate the diversion,
                  development, storage, supply, distribution, sale, furnishing, carriage, appointment, apportionment,
                  or measurement of water for power, fire protection, irrigation, reclamation, or manufacturing, or for

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                  municipal, domestic, or other beneficial use. [It]
                      (b) "Water system" does not include private irrigation companies engaged in distributing
                  water only to their stockholders.
                      [(28)] (29) "Wholesale electrical cooperative" includes every electrical corporation that is:
                      (a) [which is] in the business of the wholesale distribution of electricity it has purchased or
                  generated to its members and the public; and
                      (b) [which is] required to distribute or allocate savings in excess of additions to reserves and
                  surplus to members or patrons on the basis of patronage.
                      Section 2. Section 54-5-1.5 (Repealed 07/01/01) is amended to read:
                       54-5-1.5 (Repealed 07/01/01). Special regulation fee -- Supplemental Levy Committee
                  -- Supplemental fee -- Fee for electrical cooperatives.
                      (1) (a) A special fee to defray the cost of regulation is imposed upon all public utilities
                  subject to the jurisdiction of the Public Service Commission.
                      (b) The special fee is in addition to any charge now assessed, levied, or required by law.
                      (2) (a) The executive director of the Department of Commerce shall determine the special
                  fee for the Department of Commerce.
                      (b) The [chairman] chair of the Public Service Commission shall determine the special fee
                  for the Public Service Commission.
                      (c) The fee shall be assessed as a uniform percentage of the gross operating revenue for the
                  preceding calendar year derived from each public utility's business and operations during that period
                  within this state, excluding income derived from interstate business. Gross operating revenue shall
                  not include income to a wholesale electric cooperative derived from the sale of power to a rural
                  electric cooperative which resells that power within the state.
                      (3) (a) The executive director of the Department of Commerce shall notify each public utility
                  subject to the provisions of this chapter of the amount of the fee.
                      (b) The fee is due and payable on or before July 1 of each year.
                      (4) (a) It is the intent of the Legislature that the public utilities provide all of the funds for
                  the administration, support, and maintenance of:

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                      (i) the Public Service Commission;
                      (ii) state agencies within the Department of Commerce involved in the regulation of public
                  utilities; and
                      (iii) expenditures by the attorney general for utility regulation.
                      (b) [The] Notwithstanding Subsection (4)(a), the fee imposed by [this section may]
                  Subsection (1) shall not [be] exceed the greater [than 3/10 of 1%] of:
                      (i) (A) for a public utility other than an electrical cooperative, .3% of the public utility's gross
                  operating revenues for the preceding calendar year[,]; or
                      (B) for an electrical cooperative, .15% of the electrical cooperative's gross operating
                  revenues for the preceding calendar year; or
                      (ii) $50[, whichever is greater].
                      (5) (a) There is created a Supplemental Levy Committee to levy additional assessments on
                  public utilities when unanticipated costs of regulation occur in any fiscal year.
                      (b) The Supplemental Levy Committee shall consist of:
                      (i) one member selected by the executive director of the Department of Commerce;
                      (ii) one member selected by the chairman of the Public Service Commission;
                      (iii) two members selected by the three public utilities that paid the largest percent of the
                  current regulatory fee; and
                      (iv) one member selected by the four appointed members.
                      (c) (i) The members of the Supplemental Levy Committee shall be selected within ten
                  working days after the executive director of the Department of Commerce gives written notice to the
                  Public Service Commission and the public utilities that a supplemental levy committee is needed.
                      (ii) If the members of the Supplemental Levy Committee have not been appointed within
                  the time prescribed, the governor shall appoint the members of the Supplemental Levy Committee.
                      (d) (i) During any state fiscal year, the Supplemental Levy Committee, by a majority vote
                  and subject to audit by the state auditor, may impose a supplemental fee on the regulated utilities for
                  the purpose of defraying any increased cost of regulation.
                      (ii) The supplemental fee imposed upon the utilities shall equal a percentage of their gross

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                  operating revenue for the preceding calendar year.
                      (iii) The aggregate of all fees, including any supplemental fees assessed, shall not exceed
                  [3/10 of 1%] .3% of the gross operating revenue of the utilities assessed for the preceding calendar
                  year.
                      (iv) Payment of the supplemental fee is due within 30 days after receipt of the assessment.
                      (v) The utility may, within ten days after receipt of assessment, request a hearing before the
                  Public Service Commission if it questions the need for, or the reasonableness of, the supplemental
                  fee.
                      (e) (i) Any supplemental fee collected to defray the cost of regulation shall be transferred to
                  the state treasurer as a departmental collection according to the provisions of Section 63-38-9 .
                      (ii) Supplemental fees are excess collections, credited according to the procedures of Section
                  63-38-9 .
                      (iii) Charges billed to the Department of Commerce by any other state department,
                  institution, or agency for services rendered in connection with regulation of a utility shall be credited
                  by the state treasurer from the special or supplemental fees collected to the appropriations account
                  of the entity providing that service according to the procedures provided in Title 63, Chapter 38,
                  Budgetary Procedures Act.
                      (6) (a) For purposes of this section, "electrical cooperative" means:
                      (i) a distribution electrical cooperative; or
                      (ii) a wholesale electrical cooperative.
                      (b) Subject to Subsection (6)(c), if the regulation of one or more electrical cooperatives
                  causes unanticipated costs of regulation in a fiscal year, the commission may impose a supplemental
                  fee on the one or more electrical cooperatives in this state responsible for the increased cost of
                  regulation.
                      (c) The aggregate of all fees imposed under this section on an electrical cooperative in a
                  calendar year shall not exceed the greater of:
                      (i) .3% of the electrical cooperative's gross operating revenues for the preceding calendar
                  year; or

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                      (ii) $50.
                      Section 3. Coordination clause.
                      If this bill and H.B. 184, Public Utilities Amendments - Repeal, both pass, it is the intent of
                  the Legislature that Section 54-5-1.5 not be repealed and the amendments in this bill will continue
                  in effect after July 1, 2001.

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