Download Zipped Enrolled WordPerfect SB0202.ZIP
[Introduced][Status][Bill Documents][Fiscal Note][Bills Directory]
S.B. 202 Enrolled
1
2
3
4
5
6
7 Cosponsor:Mike Dmitrich 8
9 LONG TITLE
10 General Description:
11 This bill provides that an electrical corporation or municipal electric utility maintain a
12 percentage of electricity sold in the form of renewable energy resources and makes other
13 changes concerning the acquisition of energy resources.
14 Highlighted Provisions:
15 This bill:
16 . addresses independent and qualifying power producers;
17 . addresses the application of Title 54, Chapter 17, Energy Resource Procurement
18 Act, to certain renewable energy resources;
19 . defines terms;
20 . provides that 20% of an electrical corporation's or municipal electric utility's
21 adjusted retail electric sales beginning in the year 2025 come from qualifying
22 electricity, including renewable energy resources, if cost effective;
23 . provides for the issuance and recognition of a renewable energy certificate for
24 certain electrical generation and actions by an energy user;
25 . requires plans and reports concerning an electrical corporation's or municipal electric
26 utility's progress in acquiring qualifying electricity;
27 . addresses cost recovery for certain energy resources;
28 . requires certain state agencies to make rules concerning carbon capture and
29 geological storage of captured carbon emissions; and
30 . makes technical changes.
31 Monies Appropriated in this Bill:
32 None
33 Other Special Clauses:
34 This bill provides an immediate effective date.
35 Utah Code Sections Affected:
36 AMENDS:
37 54-2-1, as last amended by Laws of Utah 2001, Chapter 212
38 54-12-1, as enacted by Laws of Utah 1985, Chapter 180
39 54-12-2, as last amended by Laws of Utah 1989, Chapter 4
40 54-12-3, as enacted by Laws of Utah 1985, Chapter 180
41 54-17-201, as last amended by Laws of Utah 2007, Chapter 289
42 54-17-302, as last amended by Laws of Utah 2007, Chapter 289
43 54-17-303, as enacted by Laws of Utah 2005, Chapter 11
44 ENACTS:
45 10-19-101, Utah Code Annotated 1953
46 10-19-102, Utah Code Annotated 1953
47 10-19-201, Utah Code Annotated 1953
48 10-19-202, Utah Code Annotated 1953
49 10-19-301, Utah Code Annotated 1953
50 10-19-302, Utah Code Annotated 1953
51 54-17-502, Utah Code Annotated 1953
52 54-17-601, Utah Code Annotated 1953
53 54-17-602, Utah Code Annotated 1953
54 54-17-603, Utah Code Annotated 1953
55 54-17-604, Utah Code Annotated 1953
56 54-17-605, Utah Code Annotated 1953
57 54-17-606, Utah Code Annotated 1953
58 54-17-607, Utah Code Annotated 1953
59 54-17-701, Utah Code Annotated 1953
60
61 Be it enacted by the Legislature of the state of Utah:
62 Section 1. Section 10-19-101 is enacted to read:
63
64
65
66 10-19-101. Title.
67 This chapter is known as the "Municipal Electric Utility Carbon Emission Reduction
68 Act."
69 Section 2. Section 10-19-102 is enacted to read:
70 10-19-102. Definitions.
71 As used in this chapter:
72 (1) "Adjusted retail electric sales" means the total kilowatt-hours of retail electric sales
73 of a municipal electric utility to customers in this state in a calendar year, reduced by:
74 (a) the amount of those kilowatt-hours attributable to electricity generated or purchased
75 in that calendar year from qualifying zero carbon emissions generation and qualifying carbon
76 sequestration generation;
77 (b) the amount of those kilowatt-hours attributable to electricity generated or purchased
78 in that calendar year from generation located within the geographic boundary of the Western
79 Electricity Coordinating Council that derives its energy from one or more of the following but
80 that does not satisfy the definition of a renewable energy source or that otherwise has not been
81 used to satisfy Subsection 10-19-201 (1):
82 (i) wind energy;
83 (ii) solar photovoltaic and solar thermal energy;
84 (iii) wave, tidal, and ocean thermal energy;
85 (iv) except for combustion of wood that has been treated with chemical preservatives
86 such as creosote, pentachlorophenol or chromated copper arsenate, biomass and biomass
87 byproducts, including:
88 (A) organic waste;
89 (B) forest or rangeland woody debris from harvesting or thinning conducted to improve
90 forest or rangeland ecological health and to reduce wildfire risk;
91 (C) agricultural residues;
92 (D) dedicated energy crops; and
93 (E) landfill gas or biogas produced from organic matter, wastewater, anaerobic
94 digesters, or municipal solid waste;
95 (v) geothermal energy;
96 (vi) hydro-electric energy; or
97 (vii) waste gas and waste heat capture or recovery; and
98 (c) the number of kilowatt-hours attributable to reductions in retail sales in that calendar
99 year from activities or programs promoting electric energy efficiency or conservation or more
100 efficient management of electric energy load.
101 (2) "Amount of kilowatt-hours attributable to electricity generated or purchased in that
102 calendar year from qualifying carbon sequestration generation," for qualifying carbon
103 sequestration generation, means the kilowatt-hours supplied by a facility during the calendar
104 year multiplied by the ratio of the amount of carbon dioxide captured from the facility and
105 sequestered to the sum of the amount of carbon dioxide captured from the facility and
106 sequestered plus the amount of carbon dioxide emitted from the facility during the same
107 calendar year.
108 (3) "Banked renewable energy certificate" means a bundled or unbundled renewable
109 energy certificate that is:
110 (a) not used in a calendar year to comply with this part or with a renewable energy
111 program in another state; and
112 (b) carried forward into a subsequent year.
113 (4) "Bundled renewable energy certificate" means a renewable energy certificate for
114 qualifying electricity that is acquired:
115 (a) by a municipal electric utility by a trade, purchase, or other transfer of electricity
116 that includes the renewable energy attributes of, or certificate that is issued for, the electricity;
117 or
118 (b) by a municipal electric utility by generating the electricity for which the renewable
119 energy certificate is issued.
120 (5) "Commission" means the Public Service Commission.
121 (6) "Municipal electric utility" means any municipality that owns, operates, controls, or
122 manages a facility that provides electric power for a retail customer, whether domestic,
123 commercial, industrial, or otherwise.
124 (7) "Qualifying carbon sequestration generation" means a fossil-fueled generating
125 facility located within the geographic boundary of the Western Electricity Coordinating Council
126 that:
127 (a) becomes operational or is retrofitted on or after January 1, 2008; and
128 (b) reduces carbon dioxide emissions into the atmosphere through permanent geological
129 sequestration or through other verifiably permanent reductions in carbon dioxide emissions
130 through the use of technology.
131 (8) "Qualifying electricity" means electricity generated on or after January 1, 1995 from
132 a renewable energy source if:
133 (a) (i) the renewable energy source is located within the geographic boundary of the
134 Western Electricity Coordinating Council; or
135 (ii) the qualifying electricity is delivered to the transmission system of a municipal
136 electric utility or a delivery point designated by the municipal electric utility for the purpose of
137 subsequent delivery to the municipal electric utility; and
138 (b) the renewable energy attributes of the electricity are not traded, sold, transferred, or
139 otherwise used to satisfy another state's renewable energy program.
140 (9) "Qualifying zero carbon emissions generation":
141 (a) means a generation facility located within the geographic boundary of the Western
142 Electricity Coordinating Council that:
143 (i) becomes operational on or after January 1, 2008; and
144 (ii) does not produce carbon as a byproduct of the generation process;
145 (b) includes generation powered by nuclear fuel; and
146 (c) does not include renewable energy sources used to satisfy a target established under
147 Section 10-19-201 .
148 (10) "Renewable energy certificate" means a certificate issued in accordance with the
149 requirements of Sections 10-19-202 and 54-17-603 .
150 (11) "Renewable energy source" means:
151 (a) an electric generation facility or generation capability or upgrade that becomes
152 operational on or after January 1, 1995 that derives its energy from one or more of the
153 following:
154 (i) wind energy;
155 (ii) solar photovoltaic and solar thermal energy;
156 (iii) wave, tidal, and ocean thermal energy;
157 (iv) except for combustion of wood that has been treated with chemical preservatives
158 such as creosote, pentachlorophenol or chromated copper arsenate, biomass and biomass
159 byproducts, including:
160 (A) organic waste;
161 (B) forest or rangeland woody debris from harvesting or thinning conducted to improve
162 forest or rangeland ecological health and to reduce wildfire risk;
163 (C) agricultural residues;
164 (D) dedicated energy crops; and
165 (E) landfill gas or biogas produced from organic matter, wastewater, anaerobic
166 digesters, or municipal solid waste;
167 (v) geothermal energy located outside the state;
168 (vi) waste gas and waste heat capture or recovery; or
169 (vii) efficiency upgrades to a hydroelectric facility, without regard to the date upon
170 which the facility became operational, if the upgrades become operational on or after January 1,
171 1995;
172 (b) any of the following:
173 (i) up to 50 average megawatts of electricity per year per municipal electric utility from
174 a certified low-impact hydroelectric facility, without regard to the date upon which the facility
175 becomes operational, if the facility is certified as a low-impact hydroelectric facility on or after
176 January 1, 1995, by a national certification organization;
177 (ii) geothermal energy if located within the state, without regard to the date upon which
178 the facility becomes operational; and
179 (iii) hydroelectric energy if located within the state, without regard to the date upon
180 which the facility becomes operational;
181 (c) hydrogen gas derived from any source of energy described in Subsection (11)(a) or
182 (b);
183 (d) if an electric generation facility employs multiple energy sources, that portion of the
184 electricity generated that is attributable to energy sources described in Subsections (11)(a)
185 through (c); and
186 (e) any of the following located in the state and owned by a user of energy:
187 (i) a demand side management measure, as defined by Subsection 54-7-12.8 (1) with the
188 quantity of renewable energy certificates to which the user is entitled determined by the
189 equivalent energy saved by the measure;
190 (ii) a solar thermal system that reduces the consumption of fossil fuels, with the quantity
191 of renewable energy certificates to which the user is entitled determined by the equivalent
192 kilowatt-hours saved, except to the extent the commission determines otherwise with respect to
193 net-metered energy;
194 (iii) a solar photovoltaic system that reduces the consumption of fossil fuels with the
195 quantity of renewable energy certificates to which the user is entitled determined by the total
196 production of the system, except to the extent the commission determines otherwise with
197 respect to net-metered energy;
198 (iv) a hydroelectric or geothermal facility, with the quantity of renewable energy
199 certificates to which the user is entitled determined by the total production of the facility, except
200 to the extent the commission determines otherwise with respect to net-metered energy;
201 (v) a waste gas or waste heat capture or recovery system other than from a combined
202 cycle combustion turbine that does not use waste gas or waste heat, with the quantity of
203 renewable energy certificates to which the user is entitled determined by the total production of
204 the system, except to the extent the commission determines otherwise with respect to
205 net-metered energy; and
206 (vi) the station use of solar thermal energy, solar photovoltaic energy, hydroelectric
207 energy, geothermal energy, waste gas, or waste heat capture and recovery.
208 (12) "Unbundled renewable energy certificate" means a renewable energy certificate
209 associated with:
210 (a) qualifying electricity that is acquired by a municipal electric utility or other person
211 by trade, purchase, or other transfer without acquiring the electricity for which the certificate
212 was issued; or
213 (b) activities listed in Subsection (11)(e).
214 Section 3. Section 10-19-201 is enacted to read:
215
216 10-19-201. Target amount of qualifying electricity -- Renewable energy certificate
217 -- Cost-effectiveness.
218 (1) (a) To the extent that it is cost-effective to do so, beginning in 2025 the annual retail
219 electric sales in this state of each municipal electric utility shall consist of qualifying electricity or
220 renewable energy certificates in an amount equal to at least 20% of adjusted retail electric sales.
221 (b) The amount under Subsection (1)(a) is computed based upon adjusted retail sales
222 for the calendar year commencing 36 months before the first day of the year for which the target
223 calculated under Subsection (1)(a) applies.
224 (c) Notwithstanding Subsections (1)(a) and (b) an increase in the annual target from
225 one year to the next is limited to the greater of:
226 (i) 17,500 megawatt-hours; or
227 (ii) 20% of the prior year's amount under Subsections (1)(a) and (b).
228 (2) Cost-effectiveness under Subsection (1) is determined using any criteria applicable
229 to the municipal electric utility's acquisition of a significant energy resource established by the
230 municipality's legislative body.
231 (3) This section does not require a municipal electric utility to:
232 (a) substitute qualifying electricity for electricity from a generation source owned or
233 contractually committed, or from a contractual commitment for a power purchase;
234 (b) enter into any additional electric sales commitment or any other arrangement for the
235 sale or other disposition of electricity that is not already, or would not be, entered into by the
236 municipal electric utility; or
237 (c) acquire qualifying electricity in excess of its adjusted retail electric sales.
238 (4) A municipal electrical corporation may combine the following to meet Subsection
239 (1):
240 (a) qualifying electricity from a renewable energy source owned by the municipal
241 electric utility;
242 (b) qualifying electricity acquired by the municipal electric utility through trade, power
243 purchase, or other transfer; and
244 (c) a bundled or unbundled renewable energy certificate, including a banked renewable
245 energy certificate.
246 (5) To meet Subsection (1), a municipal electric utility may also count:
247 (a) qualifying electricity generated or acquired or renewable energy certificates acquired
248 for a program permitting the municipal electric utility's customers to voluntarily contribute to a
249 renewable energy source; and
250 (b) electricity allocated to this state that is produced by a hydroelectric facility
251 becoming operational after December 31, 2007 if the hydroelectric facility is located in any state
252 in which the municipal electric utility, or the interlocal entity with which the municipal electric
253 utility has a contract, provides electric service.
254 Section 4. Section 10-19-202 is enacted to read:
255 10-19-202. Renewable energy certificate -- Use to satisfy other requirements.
256 (1) A municipal electric utility may buy, sell, trade, or otherwise transfer a renewable
257 energy certificate issued or recognized under Section 54-17-603 .
258 (2) For the purpose of satisfying Subsection 10-19-201 (1) and the issuance of a
259 renewable energy certificate under Section 54-17-603 :
260 (a) a renewable energy source located in this state that derives its energy from solar
261 photovoltaic and solar thermal energy shall be credited for 2.4 kilowatt-hours of qualifying
262 electricity for each 1.0 kilowatt-hour generated; and
263 (b) if two or more municipal electric utilities jointly own a renewable energy resource,
264 each municipal electric utility shall be credited with 1.0 kilowatt-hour of qualifying electricity
265 for 1.0 kilowatt-hour of the renewable energy resource allocated to the municipal electric utility
266 by contract, unless the contract otherwise provides.
267 (3) A renewable energy certificate:
268 (a) may be used only once to satisfy Subsection 10-19-201 (1);
269 (b) may be used to satisfy Subsection 10-19-201 (1) and the qualifying electricity on
270 which the renewable energy certificate is based may be used to satisfy any federal renewable
271 energy requirement; and
272 (c) may not be used if it has been used to satisfy any other state's renewable energy
273 requirement.
274 Section 5. Section 10-19-301 is enacted to read:
275
276 10-19-301. Plans and reports.
277 (1) A municipal electric utility shall develop and maintain a plan for implementing
278 Subsection 10-19-201 (1).
279 (2) A progress report concerning a plan under Subsection (1) shall be filed with the
280 municipality's legislative body by January 1 of each of the years 2010, 2015, 2020, and 2024.
281 (3) The progress report under Subsection (2) shall contain:
282 (a) the actual and projected amount of qualifying electricity through 2025;
283 (b) the source of qualifying electricity;
284 (c) an estimate of the cost of achieving the target;
285 (d) a discussion of conditions impacting the renewable energy source and qualifying
286 electricity markets; and
287 (e) any recommendation for a suggested legislative or program change.
288 (4) The plan and progress report required by Subsections (1) and (2) may include
289 procedures that will be used by the municipal electric utility to identify and select any
290 cost-effective renewable energy resource and qualifying electricity.
291 (5) By July 1, 2026, the municipal electric utility shall file a final progress report
292 demonstrating:
293 (a) how Subsection 10-19-201 (1) is satisfied for the year 2025; or
294 (b) the reason why Subsection 10-19-201 (1) is not satisfied for the year 2025, if it is not
295 satisfied.
296 (6) The plan and any progress report filed under this section shall be publicly available
297 at the municipal legislative body's office.
298 Section 6. Section 10-19-302 is enacted to read:
299 10-19-302. Municipal authority -- Commission authority.
300 (1) The municipal legislative body may adopt procedures necessary to implement this
301 chapter.
302 (2) Nothing in this chapter authorizes the commission to exercise any power over a
303 municipal electric utility's electrical generation, demand-side management program, or other
304 operation.
305 Section 7. Section 54-2-1 is amended to read:
306 54-2-1. Definitions.
307 As used in this title:
308 (1) "Avoided costs" means the incremental costs to an electrical corporation of electric
309 energy or capacity or both which, due to the purchase of electric energy or capacity or both
310 from small power production or cogeneration facilities, the electrical corporation would not
311 have to generate itself or purchase from another electrical corporation.
312 (2) "Cogeneration facility":
313 (a) means a facility which produces:
314 (i) electric energy; and
315 (ii) steam or forms of useful energy, including heat, which are used for industrial,
316 commercial, heating, or cooling purposes; and
317 (b) is a qualifying cogeneration facility under federal law.
318 (3) "Commission" means the Public Service Commission of Utah.
319 (4) "Commissioner" means a member of the commission.
320 (5) (a) "Corporation" includes an association, and a joint stock company having any
321 powers or privileges not possessed by individuals or partnerships.
322 (b) "Corporation" does not include towns, cities, counties, conservancy districts,
323 improvement districts, or other governmental units created or organized under any general or
324 special law of this state.
325 (6) "Distribution electrical cooperative" includes an electrical corporation that:
326 (a) is a cooperative;
327 (b) conducts a business that includes the retail distribution of electricity the cooperative
328 purchases or generates for the cooperative's members; and
329 (c) is required to allocate or distribute savings in excess of additions to reserves and
330 surplus on the basis of patronage to the cooperative's:
331 (i) members; or
332 (ii) patrons.
333 (7) "Electrical corporation" includes every corporation, cooperative association, and
334 person, their lessees, trustees, and receivers, owning, controlling, operating, or managing any
335 electric plant, or in any way furnishing electric power for public service or to its consumers or
336 members for domestic, commercial, or industrial use, within this state, except independent
337 energy producers, and except where electricity is generated on or distributed by the producer
338 solely for the producer's own use, or the use of the producer's tenants, or for the use of
339 members of an association of unit owners formed under Title 57, Chapter 8, Condominium
340 Ownership Act, and not for sale to the public generally.
341 (8) "Electric plant" includes all real estate, fixtures, and personal property owned,
342 controlled, operated, or managed in connection with or to facilitate the production, generation,
343 transmission, delivery, or furnishing of electricity for light, heat, or power, and all conduits,
344 ducts, or other devices, materials, apparatus, or property for containing, holding, or carrying
345 conductors used or to be used for the transmission of electricity for light, heat, or power.
346 (9) "Gas corporation" includes every corporation and person, their lessees, trustees, and
347 receivers, owning, controlling, operating, or managing any gas plant for public service within
348 this state or for the selling or furnishing of natural gas to any consumer or consumers within the
349 state for domestic, commercial, or industrial use, except in the situation that:
350 (a) gas is made or produced on, and distributed by the maker or producer through,
351 private property:
352 (i) solely for the maker's or producer's own use or the use of the maker's or producer's
353 tenants; and
354 (ii) not for sale to others;
355 (b) gas is compressed on private property solely for the owner's own use or the use of
356 the owner's employees as a motor vehicle fuel; or
357 (c) gas is compressed by a retailer of motor vehicle fuel on the retailer's property solely
358 for sale as a motor vehicle fuel.
359 (10) "Gas plant" includes all real estate, fixtures, and personal property owned,
360 controlled, operated, or managed in connection with or to facilitate the production, generation,
361 transmission, delivery, or furnishing of gas, natural or manufactured, for light, heat, or power.
362 (11) "Heat corporation" includes every corporation and person, their lessees, trustees,
363 and receivers, owning, controlling, operating, or managing any heating plant for public service
364 within this state.
365 (12) (a) "Heating plant" includes all real estate, fixtures, machinery, appliances, and
366 personal property controlled, operated, or managed in connection with or to facilitate the
367 production, generation, transmission, delivery, or furnishing of artificial heat.
368 (b) "Heating plant" does not include either small power production facilities or
369 cogeneration facilities.
370 (13) "Independent energy producer" means every electrical corporation, person,
371 corporation, or government entity, their lessees, trustees, or receivers, that own, operate,
372 control, or manage [
373 (14) "Independent power production facility" means a facility that:
374 (a) produces electric energy solely by the use, as a primary energy source, of biomass,
375 waste, a renewable resource, a geothermal resource, or any combination of the preceding
376 sources; or
377 (b) is a qualifying power production facility.
378 [
379 transmission of signs, signals, writing, images, sounds, messages, data, or other information of
380 any nature by wire, radio, lightwaves, or other electromagnetic means, excluding mobile radio
381 facilities, that are owned, controlled, operated, or managed by a corporation or person,
382 including their lessees, trustees, receivers, or trustees appointed by any court, for the use of that
383 corporation or person and not for the shared use with or resale to any other corporation or
384 person on a regular basis.
385 [
386 electrical corporation, distribution electrical cooperative, wholesale electrical cooperative,
387 telephone corporation, telegraph corporation, water corporation, sewerage corporation, heat
388 corporation, and independent energy producer not described in Subsection [
389 where the service is performed for, or the commodity delivered to, the public generally, or in the
390 case of a gas corporation or electrical corporation where the gas or electricity is sold or
391 furnished to any member or consumers within the state for domestic, commercial, or industrial
392 use.
393 (b) (i) If any railroad corporation, gas corporation, electrical corporation, telephone
394 corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation,
395 or independent energy producer not described in Subsection [
396 for or delivers a commodity to the public, it is considered to be a public utility, subject to the
397 jurisdiction and regulation of the commission and this title.
398 (ii) If a gas corporation, independent energy producer not described in Subsection
399 [
400 consumers within the state, for domestic, commercial, or industrial use, for which any
401 compensation or payment is received, it is considered to be a public utility, subject to the
402 jurisdiction and regulation of the commission and this title.
403 (c) Any corporation or person not engaged in business exclusively as a public utility as
404 defined in this section is governed by this title in respect only to the public utility owned,
405 controlled, operated, or managed by the corporation or person, and not in respect to any other
406 business or pursuit.
407 (d) An independent energy producer is exempt from the jurisdiction and regulations of
408 the commission with respect to an independent power production facility if it meets the
409 requirements of Subsection [
410 (i) the commodity or service is produced or delivered, or both, by an independent
411 energy producer solely for the uses exempted in Subsection (7) or for the use of state-owned
412 facilities;
413 (ii) the commodity or service is sold by an independent energy producer solely to an
414 electrical corporation or other wholesale purchaser; or
415 (iii) (A) the commodity or service delivered by the independent energy producer is
416 delivered to an entity which controls, is controlled by, or affiliated with the independent energy
417 producer or to a user located on real property managed by the independent energy producer;
418 and
419 (B) the real property on which the service or commodity is used is contiguous to real
420 property which is owned or controlled by the independent energy producer. Parcels of real
421 property separated solely by public roads or easements for public roads shall be considered as
422 contiguous for purposes of this Subsection [
423 (e) Any person or corporation defined as an electrical corporation or public utility under
424 this section may continue to serve its existing customers subject to any order or future
425 determination of the commission in reference to the right to serve those customers.
426 (f) (i) "Public utility" does not include any person that is otherwise considered a public
427 utility under this Subsection [
428 in an electric plant, cogeneration facility, or small power production facility in this state if all of
429 the following conditions are met:
430 (A) the ownership interest in the electric plant, cogeneration facility, or small power
431 production facility is leased to:
432 (I) a public utility, and that lease has been approved by the commission;
433 (II) a person or government entity that is exempt from commission regulation as a
434 public utility; or
435 (III) a combination of Subsections [
436 (B) the lessor of the ownership interest identified in Subsection [
437 (I) primarily engaged in a business other than the business of a public utility; or
438 (II) a person whose total equity or beneficial ownership is held directly or indirectly by
439 another person engaged in a business other than the business of a public utility; and
440 (C) the rent reserved under the lease does not include any amount based on or
441 determined by revenues or income of the lessee.
442 (ii) Any person that is exempt from classification as a public utility under Subsection
443 [
444 lessee's right to possession or use of the electric plant for so long as the former lessor does not
445 operate the electric plant or sell electricity from the electric plant. If the former lessor operates
446 the electric plant or sells electricity, the former lessor shall continue to be so exempt for a period
447 of 90 days following termination, or for a longer period that is ordered by the commission. This
448 period may not exceed one year. A change in rates that would otherwise require commission
449 approval may not be effective during the 90-day or extended period without commission
450 approval.
451 (g) "Public utility" does not include any person that provides financing for, but has no
452 ownership interest in an electric plant, small power production facility, or cogeneration facility.
453 In the event of a foreclosure in which an ownership interest in an electric plant, small power
454 production facility, or cogeneration facility is transferred to a third-party financer of an electric
455 plant, small power production facility, or cogeneration facility, then that third-party financer is
456 exempt from classification as a public utility for 90 days following the foreclosure, or for a
457 longer period that is ordered by the commission. This period may not exceed one year.
458 (h) (i) The distribution or transportation of natural gas for use as a motor vehicle fuel
459 does not cause the distributor or transporter to be a "public utility," unless the commission, after
460 notice and a public hearing, determines by rule that it is in the public interest to regulate the
461 distributers or transporters, but the retail sale alone of compressed natural gas as a motor
462 vehicle fuel may not cause the seller to be a "public utility."
463 (ii) In determining whether it is in the public interest to regulate the distributors or
464 transporters, the commission shall consider, among other things, the impact of the regulation on
465 the availability and price of natural gas for use as a motor fuel.
466 [
467 purchase electricity from small power production or cogeneration facilities pursuant to the
468 Public Utility Regulatory Policies Act, 16 U.S.C. Section 824a-3.
469 (18) "Qualifying power producer" means a corporation, cooperative association, or
470 person, or the lessee, trustee, and receiver of the corporation, cooperative association, or
471 person, who owns, controls, operates, or manages any qualifying power production facility or
472 cogeneration facility.
473 (19) "Qualifying power production facility" means a facility that:
474 (a) produces electrical energy solely by the use, as a primary energy source, of biomass,
475 waste, a renewable resource, a geothermal resource, or any combination of the preceding
476 sources;
477 (b) has a power production capacity that, together with any other facilities located at
478 the same site, is no greater than 80 megawatts; and
479 (c) is a qualifying small power production facility under federal law.
480 [
481 than a street railway, and each branch or extension of a railway, by any power operated,
482 together with all tracks, bridges, trestles, rights-of-way, subways, tunnels, stations, depots,
483 union depots, yards, grounds, terminals, terminal facilities, structures, and equipment, and all
484 other real estate, fixtures, and personal property of every kind used in connection with a railway
485 owned, controlled, operated, or managed for public service in the transportation of persons or
486 property.
487 [
488 trustees, and receivers, owning, controlling, operating, or managing any railroad for public
489 service within this state.
490 [
491 lessees, trustees, and receivers, owning, controlling, operating, or managing any sewerage
492 system for public service within this state.
493 (b) "Sewerage corporation" does not include private sewerage companies engaged in
494 disposing of sewage only for their stockholders, or towns, cities, counties, conservancy districts,
495 improvement districts, or other governmental units created or organized under any general or
496 special law of this state.
497 [
498 [
499
500 [
501
502 [
503 [
504 lessees, trustees, and receivers, owning, controlling, operating, or managing any telegraph line
505 for public service within this state.
506 [
507 instruments, and appliances, and all other real estate, fixtures, and personal property owned,
508 controlled, operated, or managed in connection with or to facilitate communication by
509 telegraph, whether that communication be had with or without the use of transmission wires.
510 [
511 lessees, trustee, receivers, or trustees appointed by any court, who owns, controls, operates,
512 manages, or resells a public telecommunications service as defined in Section 54-8b-2 .
513 (b) "Telephone corporation" does not mean a corporation, partnership, or firm
514 providing:
515 (i) intrastate telephone service offered by a provider of cellular, personal
516 communication systems (PCS), or other commercial mobile radio service as defined in 47
517 U.S.C. Sec. 332 that has been issued a covering license by the Federal Communications
518 Commission;
519 (ii) Internet service; or
520 (iii) resold intrastate toll service.
521 [
522 instruments, and appliances, and all other real estate, fixtures, and personal property owned,
523 controlled, operated, or managed in connection with or to facilitate communication by
524 telephone whether that communication is had with or without the use of transmission wires.
525 [
526 incidental to the safety, comfort, or convenience of the person transported, and the receipt,
527 carriage, and delivery of that person and that person's baggage.
528 [
529 incidental to the transportation of property, including in particular its receipt, delivery,
530 elevation, transfer, switching, carriage, ventilation, refrigeration, icing, dunnage, storage, and
531 hauling, and the transmission of credit by express companies.
532 [
533 trustees, and receivers, owning, controlling, operating, or managing any water system for public
534 service within this state. It does not include private irrigation companies engaged in distributing
535 water only to their stockholders, or towns, cities, counties, water conservancy districts,
536 improvement districts, or other governmental units created or organized under any general or
537 special law of this state.
538 [
539 headgates, pipes, flumes, canals, structures, and appliances, and all other real estate, fixtures,
540 and personal property owned, controlled, operated, or managed in connection with or to
541 facilitate the diversion, development, storage, supply, distribution, sale, furnishing, carriage,
542 appointment, apportionment, or measurement of water for power, fire protection, irrigation,
543 reclamation, or manufacturing, or for municipal, domestic, or other beneficial use.
544 (b) "Water system" does not include private irrigation companies engaged in
545 distributing water only to their stockholders.
546 [
547 is:
548 (a) in the business of the wholesale distribution of electricity it has purchased or
549 generated to its members and the public; and
550 (b) required to distribute or allocate savings in excess of additions to reserves and
551 surplus to members or patrons on the basis of patronage.
552 Section 8. Section 54-12-1 is amended to read:
553 54-12-1. Legislative policy.
554 (1) The Legislature declares that in order to promote the more rapid development of
555 new sources of electrical energy, to maintain the economic vitality of the state through the
556 continuing production of goods and the employment of its people, and to promote the efficient
557 utilization and distribution of energy, it is desirable and necessary to encourage independent
558 energy producers to competitively develop sources of electric energy not otherwise available to
559 Utah businesses, residences, and industries served by electrical corporations, and to remove
560 unnecessary barriers to energy transactions involving independent energy producers and
561 electrical corporations.
562 (2) It is the policy of this state to encourage the development of [
563 and qualifying power production and cogeneration facilities, to promote a diverse array of
564 economical and permanently sustainable energy resources in an environmentally acceptable
565 manner, and to conserve our finite and expensive energy resources and provide for their most
566 efficient and economic utilization.
567 Section 9. Section 54-12-2 is amended to read:
568 54-12-2. Purchase of power from qualifying power producers.
569 (1) Purchasing utilities shall offer to purchase power from [
570 qualifying power producers.
571 (2) The commission shall establish reasonable rates, terms, and conditions for the
572 purchase or sale of electricity or electrical generating capacity, or both, between a purchasing
573 utility and [
574 terms, and conditions, the commission shall either establish a procedure under which [
575 qualifying power producers [
576 purchasing utilities or devise an alternative method which considers the purchasing utility's
577 avoided costs. The capacity component of avoided costs shall reflect the purchasing utility's
578 long-term deferral or cancellation of generating units which may result from the purchase of
579 power from [
580 (3) Purchasing utilities and [
581 to rates, terms, or conditions for the sale of electricity or electrical capacity which differ from
582 the rates, terms, and conditions adopted by the commission under Subsection (2).
583 (4) The commission may adopt further rules which encourage the development of small
584 power production and cogeneration facilities.
585 Section 10. Section 54-12-3 is amended to read:
586 54-12-3. Recovery of investment costs.
587 The commission may not consider any purchasing utility's purchase of power from [
588
589 purchasing utility's investment costs for facilities which are in use prior to signing a contract for
590 the purchase of power from [
591 Section 11. Section 54-17-201 is amended to read:
592 54-17-201. Solicitation process required -- Exception.
593 (1) (a) An affected electrical utility shall comply with this chapter to acquire or
594 construct a significant energy resource after February 25, 2005.
595 (b) Notwithstanding Subsection (1)(a), this chapter does not apply to a significant
596 energy resource for which the affected electrical utility has issued a solicitation before February
597 25, 2005.
598 (2) (a) Except as provided in Subsection (3), to acquire or construct a significant
599 energy resource, an affected electrical utility shall conduct a solicitation process that is approved
600 by the commission.
601 (b) To obtain the approval of the commission of a solicitation process, the affected
602 electrical utility shall file with the commission a request for approval that includes:
603 (i) a description of the solicitation process the affected electrical utility will use;
604 (ii) a complete proposed solicitation; and
605 (iii) any other information the commission requires by rule made in accordance with
606 Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
607 (c) In ruling on the request for approval of a solicitation process, the commission shall
608 determine whether the solicitation process:
609 (i) complies with this chapter and rules made in accordance with Title 63, Chapter 46a,
610 Utah Administrative Rulemaking Act; and
611 (ii) is in the public interest taking into consideration:
612 (A) whether it will most likely result in the acquisition, production, and delivery of
613 electricity at the lowest reasonable cost to the retail customers of an affected electrical utility
614 located in this state;
615 (B) long-term and short-term impacts;
616 (C) risk;
617 (D) reliability;
618 (E) financial impacts on the affected electrical utility; and
619 (F) other factors determined by the commission to be relevant.
620 (d) Before approving a solicitation process under this section the commission:
621 (i) may hold a public hearing; and
622 (ii) shall provide an opportunity for public comment.
623 (e) As part of its review of a solicitation process, the commission may provide the
624 affected electrical utility guidance on any additions or changes to its proposed solicitation
625 process.
626 (f) Unless the commission determines that additional time to analyze a solicitation
627 process is warranted and is in the public interest, within [
628 affected electrical utility files a request for approval of the solicitation process, the commission
629 shall:
630 (i) approve a proposed solicitation process;
631 (ii) suggest modifications to a proposed solicitation process; or
632 (iii) reject a proposed solicitation process.
633 (3) Notwithstanding Subsection (2), an affected electrical utility may acquire or
634 construct a significant energy resource without conducting a solicitation process if it obtains a
635 waiver of the solicitation requirement in accordance with Section 54-17-501 .
636 (4) In accordance with the commission's authority under Subsection 54-12-2 (2), the
637 commission shall determine:
638 (a) whether this chapter or another competitive bidding procedure shall apply to a
639 purchase of a significant energy resource by an affected electrical utility from a small power
640 producer or cogenerator; and
641 (b) if this chapter applies as provided in Subsection (4)(a), the manner in which this
642 chapter applies to a purchase of a significant energy resource by an affected electrical utility
643 from a small power producer or cogenerator.
644 Section 12. Section 54-17-302 is amended to read:
645 54-17-302. Approval of a significant energy resource decision required.
646 (1) If pursuant to Part 2, Solicitation Process, an affected electrical utility is required to
647 conduct a solicitation for a significant energy resource or obtains a waiver of the requirement to
648 conduct a solicitation under Section 54-17-501 , but does not obtain a waiver of the requirement
649 to obtain approval of the significant energy resource decision under Section 54-17-501 , the
650 affected electrical utility shall obtain approval of its significant energy resource decision:
651 (a) after the completion of the solicitation process, if the affected electrical utility is
652 required to conduct a solicitation; and
653 (b) before an affected electrical utility may construct or enter into a binding agreement
654 to acquire the significant energy resource.
655 (2) (a) To obtain the approval required by Subsection (1), the affected electrical utility
656 shall file a request for approval with the commission.
657 (b) The request for approval required by this section shall include any information
658 required by the commission by rule made in accordance with Title 63, Chapter 46a, Utah
659 Administrative Rulemaking Act.
660 (3) In ruling on a request for approval of a significant energy resource decision, the
661 commission shall determine whether the significant energy resource decision:
662 (a) is reached in compliance with this chapter and rules made in accordance with Title
663 63, Chapter 46a, Utah Administrative Rulemaking Act;
664 (b) (i) is reached in compliance with the solicitation process approved by the
665 commission in accordance with Part 2, Solicitation Process; or
666 (ii) is reached after the waiver of the solicitation process as provided in Subsection
667 54-17-201 (3); and
668 (c) is in the public interest, taking into consideration:
669 (i) whether it will most likely result in the acquisition, production, and delivery of
670 electricity at the lowest reasonable cost to the retail customers of an affected electrical utility
671 located in this state;
672 (ii) long-term and short-term impacts;
673 (iii) risk;
674 (iv) reliability;
675 (v) financial impacts on the affected electrical utility; and
676 (vi) other factors determined by the commission to be relevant.
677 (4) The commission may not approve a significant energy resource decision under this
678 section before holding a public hearing.
679 (5) Unless the commission determines that additional time to analyze a significant
680 energy resource decision is warranted and is in the public interest, within [
681 day on which the affected electrical utility files a request for approval, the commission shall:
682 (a) approve the significant energy resource decision;
683 (b) approve the significant energy resource decision subject to conditions imposed by
684 the commission; or
685 (c) disapprove the significant energy resource decision.
686 (6) The commission shall include in its order under this section:
687 (a) findings as to the total projected costs for construction or acquisition of an
688 approved significant energy resource; and
689 (b) the basis upon which the findings described in Subsection (6)(a) are made.
690 (7) Notwithstanding any other provision of this part, an affected electrical utility may
691 acquire a significant energy resource without obtaining approval pursuant to this section if it
692 obtains a waiver of the requirement for approval in accordance with Section 54-17-501 .
693 (8) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
694 commission shall make rules regarding the process for approval of a significant energy resource
695 decision under this section.
696 Section 13. Section 54-17-303 is amended to read:
697 54-17-303. Cost recovery.
698 (1) (a) Except as otherwise provided in this section, if the commission approves a
699 significant energy resource decision under Section 54-17-302 , the commission shall, in a general
700 rate case or other appropriate commission proceeding, include in the affected electrical utility's
701 retail electric rates the state's share of costs:
702 (i) relevant to the proceeding;
703 (ii) incurred by the affected electrical utility in constructing or acquiring the approved
704 significant energy resource; and
705 (iii) up to the projected costs specified in the commission's order issued under Section
706 54-17-302 .
707 (b) (i) The commission shall, in a general rate case or other appropriate commission
708 proceeding, include in the affected electrical utility's retail electric rates the state's share of the
709 incremental cost relevant to the proceeding that were prudently incurred by the affected
710 electrical utility to identify, evaluate, and submit a reasonable benchmark option, whether or not
711 the benchmark option is selected or becomes operational.
712 (ii) A recoverable cost under Subsection (1)(b)(i) shall be included in the affected
713 electrical utility's project costs for the purpose of evaluating the project's cost-effectiveness.
714 (iii) A recoverable cost under Subsection (1)(b)(i) may not be added to the cost or
715 otherwise considered in the evaluation of a project proposed by any person other than the
716 affected electrical utility for the purpose of evaluating that person's proposal.
717 [
718 54-17-304 , an increase from the projected costs specified in the commission's order issued
719 under Section 54-17-302 shall be subject to review by the commission as part of a rate hearing
720 under Section 54-7-12 .
721 (2) (a) Subsequent to the commission issuing an order described in Subsection (2)(a)(i)
722 or (ii), the commission may disallow some or all costs incurred in connection with an approved
723 significant energy resource decision if the commission finds that an affected electrical utility's
724 actions in implementing an approved significant energy resource decision are not prudent
725 because of new information or changed circumstances that occur after:
726 (i) the commission's approval of the significant energy resource decisions under Section
727 54-17-302 ; or
728 (ii) a commission order to proceed under Section 54-17-304 .
729 (b) In making a determination of prudence under Subsection (2)(a), the commission
730 shall use the standards identified in Section 54-4-4 .
731 (3) Notwithstanding any other provision of this chapter, the commission may disallow
732 some or all of the costs incurred by an affected electrical utility in connection with an approved
733 significant energy resource decision upon a finding by the commission that the affected electrical
734 utility is responsible for a material misrepresentation or concealment in connection with an
735 approval process under this chapter.
736 Section 14. Section 54-17-502 is enacted to read:
737 54-17-502. Renewable energy source -- Solicitation -- Consultant.
738 (1) Sections 54-17-102 through 54-17-404 do not apply to a significant energy resource
739 that is a renewable energy source as defined in Section 54-17-601 if the nameplate capacity of
740 the renewable energy source does not exceed 300 megawatts or, if applicable, the quantity of
741 capacity that is the subject of a contract for the purchase of electricity from a renewable energy
742 source does not exceed 300 megawatts.
743 (2) (a) (i) An affected electrical utility shall issue a public solicitation of bids for a
744 renewable energy source up to 300 megawatts in size by January 31 of each year in which it
745 reasonably anticipates that it will need to acquire or commence construction of a renewable
746 energy resource.
747 (ii) A solicitation for a renewable energy source issued by January 31, 2008 for up to 99
748 megawatts satisfies the requirement of this Subsection (2) for the year 2008 if:
749 (A) not later than 30 days after the day on which this section takes effect, the affected
750 electrical utility amends the solicitation or initiates a new solicitation to seek bids for renewable
751 energy source projects up to 300 megawatts in size; and
752 (B) within 60 days after the day on which this section takes effect and as soon as
753 practicable, the commission retains a consultant in accordance with Subsection (3).
754 (b) A consultant hired under Subsection (2)(a)(ii)(B) shall perform the consultant's
755 duties under Subsection (3) in relation to the status of the solicitation process at the time the
756 consultant is retained and may not unreasonably delay the solicitation process.
757 (c) For a solicitation issued after January 31, 2008:
758 (i) the affected electrical utility shall develop a reasonable process for pre-approval of
759 bidders; and
760 (ii) in addition to publicly issuing the solicitation in Subsection (2)(a)(i), the affected
761 electrical utility shall send copies of the solicitation to each potential bidder who is
762 pre-approved.
763 (d) The affected electrical utility shall evaluate in good faith each bid that is received
764 and negotiate in good faith with each bidder whose bid appears to be cost effective, as defined
765 in Section 54-17-602 .
766 (e) Beginning on August 1, 2008, and on each August 1 thereafter, the affected
767 electrical utility shall file a notice with the commission indicating whether it reasonably
768 anticipates that it will need to acquire or commence construction of a renewable energy
769 resource during the following year.
770 (3) (a) If the commission receives a notice under Subsection (2)(e) that the affected
771 electrical utility reasonably anticipates that it will need to acquire or commence construction of
772 a renewable energy source during the following year, the commission shall promptly retain a
773 consultant to:
774 (i) validate that the affected electrical utility is following the bidder pre-approval
775 process developed pursuant to Subsection (2)(c) and make recommendations for changes to the
776 pre-approval process for future solicitations;
777 (ii) monitor and document all material aspects of the bids, bid evaluations, and bid
778 negotiations between the affected electrical utility and any bidders in the solicitation process;
779 (iii) maintain adequate documentation of each bid, including the solicitation, evaluation,
780 and negotiation processes and the reason for the conclusion of negotiations, which
781 documentation shall be transmitted to the commission at the conclusion of all negotiations in the
782 solicitation; and
783 (iv) be available to testify under oath before the commission in any relevant proceeding
784 concerning all aspects of the public solicitation process.
785 (b) The commission and the consultant shall use all reasonable efforts to not delay the
786 solicitation process.
787 (4) Documentation provided to the commission by the consultant shall be available to
788 the affected electrical utility, any bidder, or other interested person under terms and conditions
789 and at times determined appropriate by the commission.
790 (5) (a) The commission and the consultant shall execute a contract approved by the
791 commission with terms and conditions approved by the commission.
792 (b) Unless otherwise provided by contract, an invoice for the consultant's services shall
793 be sent to the Division of Public Utilities for review and approval.
794 (c) After approval under Subsection (5)(b), the invoice shall be forwarded to the
795 affected electrical utility for payment to the consultant.
796 (d) The affected electrical utility may, in a general rate case or other appropriate
797 commission proceeding, include, and the commission shall allow, recovery by the affected
798 electrical utility of any amount paid by the affected electrical utility for the consultant.
799 (6) (a) Nothing in this section precludes an affected electrical utility from constructing
800 or acquiring any renewable energy source project outside the solicitation process provided for in
801 this section, including purchasing electricity from any renewable energy source project that
802 chooses to self-certify as a qualifying facility under the federal Public Utility Regulatory Policies
803 Act of 1978.
804 (b) An affected electrical utility that constructs a renewable energy source outside the
805 solicitation process of this section or Section 54-17-201 shall file a notice with the commission
806 at least 60 days before the date of commencement of construction, indicating the size and
807 location of the renewable energy source.
808 (c) The date of commencement of construction under Subsection (6)(b) is the date of
809 any directive from an affected electrical utility to the person responsible for the construction of
810 the renewable energy source authorizing or directing the person to proceed with construction.
811 (d) For an affected electrical utility whose rates are regulated by the commission, the
812 utility has the burden of proving in a rate case or other appropriate commission proceeding the
813 prudence, reasonableness, and cost-effectiveness of construction under this Subsection (6),
814 including the method used to evaluate the risks and value of any bid submitted in the solicitation
815 under this section.
816 (7) Nothing in this section requires an affected electrical utility to enter into any
817 transaction that it reasonably believes is not cost effective or otherwise is not in the public
818 interest.
819 Section 15. Section 54-17-601 is enacted to read:
820
821 54-17-601. Definitions.
822 As used in this part:
823 (1) "Adjusted retail electric sales" means the total kilowatt-hours of retail electric sales
824 of an electrical corporation to customers in this state in a calendar year, reduced by:
825 (a) the amount of those kilowatt-hours attributable to electricity generated or purchased
826 in that calendar year from qualifying zero carbon emissions generation and qualifying carbon
827 sequestration generation;
828 (b) the amount of those kilowatt-hours attributable to electricity generated or purchased
829 in that calendar year from generation located within the geographic boundary of the Western
830 Electricity Coordinating Council that derives its energy from one or more of the following but
831 that does not satisfy the definition of a renewable energy source or that otherwise has not been
832 used to satisfy Subsection 54-17-602 (1):
833 (i) wind energy;
834 (ii) solar photovoltaic and solar thermal energy;
835 (iii) wave, tidal, and ocean thermal energy;
836 (iv) except for combustion of wood that has been treated with chemical preservatives
837 such as creosote, pentachlorophenol or chromated copper arsenate, biomass and biomass
838 byproducts, including:
839 (A) organic waste;
840 (B) forest or rangeland woody debris from harvesting or thinning conducted to improve
841 forest or rangeland ecological health and to reduce wildfire risk;
842 (C) agricultural residues;
843 (D) dedicated energy crops; and
844 (E) landfill gas or biogas produced from organic matter, wastewater, anaerobic
845 digesters, or municipal solid waste;
846 (v) geothermal energy;
847 (vi) hydroelectric energy; or
848 (vii) waste gas and waste heat capture or recovery; and
849 (c) the number of kilowatt-hours attributable to reductions in retail sales in that calendar
850 year from demand side management as defined in Section 54-7-12.8 , with the kilowatt-hours for
851 an electrical corporation whose rates are regulated by the commission and adjusted by the
852 commission to exclude kilowatt-hours for which a renewable energy certificate is issued under
853 Subsection 54-17-603 (4)(b).
854 (2) "Amount of kilowatt-hours attributable to electricity generated or purchased in that
855 calendar year from qualifying carbon sequestration generation," for qualifying carbon
856 sequestration generation, means the kilowatt-hours supplied by a facility during the calendar
857 year multiplied by the ratio of the amount of carbon dioxide captured from the facility and
858 sequestered to the sum of the amount of carbon dioxide captured from the facility and
859 sequestered plus the amount of carbon dioxide emitted from the facility during the same
860 calendar year.
861 (3) "Banked renewable energy certificate" means a bundled or unbundled renewable
862 energy certificate that is:
863 (a) not used in a calendar year to comply with this part or with a renewable energy
864 program in another state; and
865 (b) carried forward into a subsequent year.
866 (4) "Bundled renewable energy certificate" means a renewable energy certificate for
867 qualifying electricity that is acquired:
868 (a) by an electrical corporation by a trade, purchase, or other transfer of electricity that
869 includes the renewable energy attributes of, or certificate that is issued for, the electricity; or
870 (b) by an electrical corporation by generating the electricity for which the renewable
871 energy certificate is issued.
872 (5) "Electrical corporation":
873 (a) is as defined in Section 54-2-1 ; and
874 (b) does not include a person generating electricity that is not for sale to the public.
875 (6) "Qualifying carbon sequestration generation" means a fossil-fueled generating
876 facility located within the geographic boundary of the Western Electricity Coordinating Council
877 that:
878 (a) becomes operational or is retrofitted on or after January 1, 2008; and
879 (b) reduces carbon dioxide emissions into the atmosphere through permanent geological
880 sequestration or through another verifiably permanent reduction in carbon dioxide emissions
881 through the use of technology.
882 (7) "Qualifying electricity" means electricity generated on or after January 1, 1995 from
883 a renewable energy source if:
884 (a) (i) the renewable energy source is located within the geographic boundary of the
885 Western Electricity Coordinating Council; or
886 (ii) the qualifying electricity is delivered to the transmission system of an electrical
887 corporation or a delivery point designated by the electrical corporation for the purpose of
888 subsequent delivery to the electrical corporation; and
889 (b) the renewable energy attributes of the electricity are not traded, sold, transferred, or
890 otherwise used to satisfy another state's renewable energy program.
891 (8) "Qualifying zero carbon emissions generation":
892 (a) means a generation facility located within the geographic boundary of the Western
893 Electricity Coordinating Council that:
894 (i) becomes operational on or after January 1, 2008; and
895 (ii) does not produce carbon as a byproduct of the generation process;
896 (b) includes generation powered by nuclear fuel; and
897 (c) does not include renewable energy sources used to satisfy the requirement
898 established under Subsection 54-17-602 (1).
899 (9) "Renewable energy certificate" means a certificate issued under Section 54-17-603 .
900 (10) "Renewable energy source" means:
901 (a) an electric generation facility or generation capability or upgrade that becomes
902 operational on or after January 1, 1995 that derives its energy from one or more of the
903 following:
904 (i) wind energy;
905 (ii) solar photovoltaic and solar thermal energy;
906 (iii) wave, tidal, and ocean thermal energy;
907 (iv) except for combustion of wood that has been treated with chemical preservatives
908 such as creosote, pentachlorophenol or chromated copper arsenate, biomass and biomass
909 byproducts, including:
910 (A) organic waste;
911 (B) forest or rangeland woody debris from harvesting or thinning conducted to improve
912 forest or rangeland ecological health and to reduce wildfire risk;
913 (C) agricultural residues;
914 (D) dedicated energy crops; and
915 (E) landfill gas or biogas produced from organic matter, wastewater, anaerobic
916 digesters, or municipal solid waste;
917 (v) geothermal energy located outside the state;
918 (vi) waste gas and waste heat capture or recovery; or
919 (vii) efficiency upgrades to a hydroelectric facility, without regard to the date upon
920 which the facility became operational, if the upgrades become operational on or after January 1,
921 1995;
922 (b) any of the following:
923 (i) up to 50 average megawatts of electricity per year per electrical corporation from a
924 certified low-impact hydroelectric facility, without regard to the date upon which the facility
925 becomes operational, if the facility is certified as a low-impact hydroelectric facility on or after
926 January 1, 1995, by a national certification organization;
927 (ii) geothermal energy if located within the state, without regard to the date upon which
928 the facility becomes operational; or
929 (iii) hydroelectric energy if located within the state, without regard to the date upon
930 which the facility becomes operational;
931 (c) hydrogen gas derived from any source of energy described in Subsection (10)(a) or
932 (b);
933 (d) if an electric generation facility employs multiple energy sources, that portion of the
934 electricity generated that is attributable to energy sources described in Subsections (10)(a)
935 through (c); and
936 (e) any of the following located in the state and owned by a user of energy:
937 (i) a demand side management measure, as defined by Subsection 54-7-12.8 (1), with
938 the quantity of renewable energy certificates to which the user is entitled determined by the
939 equivalent energy saved by the measure;
940 (ii) a solar thermal system that reduces the consumption of fossil fuels, with the quantity
941 of renewable energy certificates to which the user is entitled determined by the equivalent
942 kilowatt-hours saved, except to the extent the commission determines otherwise with respect to
943 net-metered energy;
944 (iii) a solar photovoltaic system that reduces the consumption of fossil fuels with the
945 quantity of renewable energy certificates to which the user is entitled determined by the total
946 production of the system, except to the extent the commission determines otherwise with
947 respect to net-metered energy;
948 (iv) a hydroelectric or geothermal facility with the quantity of renewable energy
949 certificates to which the user is entitled determined by the total production of the facility, except
950 to the extent the commission determines otherwise with respect to net-metered energy;
951 (v) a waste gas or waste heat capture or recovery system, other than from a combined
952 cycle combustion turbine that does not use waste gas or waste heat, with the quantity of
953 renewable energy certificates to which the user is entitled determined by the total production of
954 the system, except to the extent the commission determines otherwise with respect to
955 net-metered energy; and
956 (vi) the station use of solar thermal energy, solar photovoltaic energy, hydroelectric
957 energy, geothermal energy, waste gas, or waste heat capture and recovery.
958 (11) "Unbundled renewable energy certificate" means a renewable energy certificate
959 associated with:
960 (a) qualifying electricity that is acquired by an electrical corporation or other person by
961 trade, purchase, or other transfer without acquiring the electricity for which the certificate was
962 issued; or
963 (b) activities listed in Subsection (10)(e).
964 Section 16. Section 54-17-602 is enacted to read:
965 54-17-602. Target amount of qualifying electricity -- Renewable energy certificate
966 -- Cost-effectiveness -- Cooperatives.
967 (1) (a) To the extent that it is cost effective to do so, beginning in 2025 the annual retail
968 electric sales in this state of each electrical corporation shall consist of qualifying electricity or
969 renewable energy certificates in an amount equal to at least 20% of adjusted retail electric sales.
970 (b) The amount under Subsection (1)(a) is computed based upon adjusted retail electric
971 sales for the calendar year commencing 36 months before the first day of the year for which the
972 target calculated under Subsection (1)(a) applies.
973 (c) Notwithstanding Subsections (1)(a) and (b), an increase in the annual target from
974 one year to the next may not exceed the greater of:
975 (i) 17,500 megawatt-hours; or
976 (ii) 20% of the prior year's amount under Subsections (1)(a) and (b).
977 (2) (a) Cost-effectiveness under Subsection (1) for other than a cooperative association
978 is determined in comparison to other viable resource options using the criteria provided by
979 Subsection 54-17-201 (2)(c)(ii).
980 (b) For an electrical corporation that is a cooperative association, cost-effectiveness is
981 determined using criteria applicable to the cooperative association's acquisition of a significant
982 energy resource established by the cooperative association's board of directors.
983 (3) This section does not require an electrical corporation to:
984 (a) substitute qualifying electricity for electricity from a generation source owned or
985 contractually committed, or from a contractual commitment for a power purchase;
986 (b) enter into any additional electric sales commitment or any other arrangement for the
987 sale or other disposition of electricity that is not already, or would not be, entered into by the
988 electrical corporation; or
989 (c) acquire qualifying electricity in excess of its adjusted retail electric sales.
990 (4) For the purpose of Subsection (1), an electrical corporation may combine the
991 following:
992 (a) qualifying electricity from a renewable energy source owned by the electrical
993 corporation;
994 (b) qualifying electricity acquired by the electrical corporation through trade, power
995 purchase, or other transfer; and
996 (c) a bundled or unbundled renewable energy certificate, including a banked renewable
997 energy certificate.
998 (5) For an electrical corporation whose rates the commission regulates, the following
999 rules concerning renewable energy certificates apply:
1000 (a) a banked renewable energy certificate with an older issuance date shall be used
1001 before any other banked renewable energy certificate issued at a later date is used; and
1002 (b) the total of all unbundled renewable energy certificates, including unbundled banked
1003 renewable energy certificates, may not exceed 20% of the amount of the annual target provided
1004 for in Subsection (1).
1005 (6) An electrical corporation that is a cooperative association may count towards
1006 Subsection (1) any of the following:
1007 (a) electric production allocated to this state from hydroelectric facilities becoming
1008 operational after December 31, 2007 if the facilities are located in any state in which the
1009 cooperative association, or a generation and transmission cooperative with which the
1010 cooperative association has a contract, provides electric service;
1011 (b) qualifying electricity generated or acquired or renewable energy certificates acquired
1012 for a program that permits a retail customer to voluntarily contribute to a renewable energy
1013 source; and
1014 (c) notwithstanding Subsection 54-17-601 (7), an unbundled renewable energy
1015 certificate purchased from a renewable energy source located outside the geographic boundary
1016 of the Western Electricity Coordinating Council if the electricity on which the unbundled
1017 renewable energy certificate is based would be considered qualifying electricity if the renewable
1018 energy source was located within the geographic boundary of the Western Electricity
1019 Coordinating Council.
1020 (7) The use of the renewable attributes associated with qualifying electricity to satisfy
1021 any federal renewable energy requirement does not preclude the electricity from being qualifying
1022 electricity for the purpose of this chapter.
1023 Section 17. Section 54-17-603 is enacted to read:
1024 54-17-603. Renewable energy certificate -- Issuance -- Use to satisfy other
1025 requirements.
1026 (1) The commission shall establish a process for issuance or recognition of a renewable
1027 energy certificate.
1028 (2) The commission process under Subsection (1) shall provide for the issuance,
1029 monitoring, accounting, transfer, and use of a renewable energy certificate, including in
1030 electronic form.
1031 (3) The commission:
1032 (a) may consult with another state or a federal agency and any regional system or
1033 trading program to fulfil Subsection (1); and
1034 (b) allow use of a renewable energy certificate that is issued, monitored, accounted for,
1035 or transferred by or through a regional system or trading program, including the Western
1036 Renewable Energy Generation Information System, to fulfil this part's provisions.
1037 (4) A renewable energy certificate shall be issued for:
1038 (a) qualifying electricity generated on and after January 1, 1995; and
1039 (b) the activities of an energy user described in Subsections 10-19-102 (11)(e) and
1040 54-17-601 (10)(e) on and after January 1, 1995.
1041 (5) The person requesting a renewable energy certificate shall affirm that the renewable
1042 energy attributes of the electricity have not been traded, sold, transferred, or otherwise used to
1043 satisfy another state's renewable energy requirements.
1044 (6) (a) For the purpose of satisfying Subsection 54-17-602 (1) and the issuance of a
1045 renewable energy certificate under this section, a renewable energy source located in this state
1046 that derives its energy from solar photovoltaic or solar thermal energy shall be credited for 2.4
1047 kilowatt-hours of qualifying electricity for each 1.0 kilowatt-hour generated.
1048 (b) Notwithstanding Subsection (6)(a), the acquisition or construction by an electrical
1049 corporation of a renewable energy source that derives its energy from solar photovoltaic or
1050 solar thermal energy shall comply with the cost-effectiveness criteria of Subsection
1051 54-17-201 (2)(c)(ii).
1052 (7) A renewable energy certificate issued under this section:
1053 (a) does not expire; and
1054 (b) may be banked.
1055 (8) The commission may recognize a renewable energy certificate that is issued,
1056 monitored, accounted for, or transferred by or through another state or a regional system or
1057 trading program, including the Western Renewable Energy Generation Information System, if
1058 the renewable energy certificate is for qualifying electricity.
1059 (9) A renewable energy certificate:
1060 (a) may be used only once to satisfy Subsection 54-17-602 (1);
1061 (b) may be used for the purpose of Subsection 54-17-602 (1) and the qualifying
1062 electricity on which the renewable energy certificate is based may be used to satisfy any federal
1063 renewable energy requirement; and
1064 (c) may not be used if it has been used to satisfy any other state's renewable energy
1065 requirement.
1066 (10) The commission shall establish procedures and reasonable rates permitting an
1067 electrical corporation that is a purchasing utility under Section 54-12-2 to acquire or retain a
1068 renewable energy certificate associated with the purchase of power from an independent energy
1069 producer.
1070 Section 18. Section 54-17-604 is enacted to read:
1071 54-17-604. Plans and reports.
1072 (1) An electrical corporation shall develop and maintain a plan for implementing
1073 Subsection 54-17-602 (1), consistent with the cost-effectiveness criteria of Subsection
1074 54-17-201 (2)(c)(ii).
1075 (2) (a) A progress report concerning a plan under Subsection (1) for other than a
1076 cooperative association shall be filed with the commission by January 1 of each of the years
1077 2010, 2015, 2020, and 2024.
1078 (b) For an electrical corporation that is a cooperative association, a progress report
1079 shall be filed with the cooperative association's board of directors by January 1 of each of the
1080 years 2010, 2015, 2020, and 2024.
1081 (3) The progress report under Subsection (2) shall contain:
1082 (a) the actual and projected amount of qualifying electricity through 2025;
1083 (b) the source of qualifying electricity;
1084 (c) (i) an analysis of the cost-effectiveness of renewable energy sources for other than a
1085 cooperative association; or
1086 (ii) an estimate of the cost of achieving the target for an electrical corporation that is a
1087 cooperative association;
1088 (d) a discussion of conditions impacting the renewable energy source and qualifying
1089 electricity markets;
1090 (e) any recommendation for a suggested legislative or program change; and
1091 (f) for other than a cooperative association, any other information requested by the
1092 commission or considered relevant by the electrical corporation.
1093 (4) The plan and progress report required by Subsections (1) and (2) may include
1094 procedures that will be used by the electrical corporation to identify and select any renewable
1095 energy resource and qualifying electricity that satisfy the criteria of Subsection
1096 54-17-201 (2)(c)(ii).
1097 (5) By July 1, 2026, each electrical corporation shall file a final progress report
1098 demonstrating:
1099 (a) how Subsection 54-17-602 (1) is satisfied for the year 2025; or
1100 (b) the reason why Subsection 54-17-602 (1) is not satisfied for the year 2025, if it is not
1101 satisfied.
1102 (6) By January 1 of each of the years 2011, 2016, 2021, and 2025, the Division of
1103 Public Utilities shall submit to the Legislature a report containing a summary of any progress
1104 report filed under Subsections (2) through (5).
1105 (7) The summary required by Subsection (6) shall include any recommendation for
1106 legislative changes.
1107 (8) (a) By July 1, 2027, the commission shall submit to the Legislature a report
1108 summarizing the final progress reports and recommending any legislative changes.
1109 (b) The 2027 summary may contain a recommendation to the Legislature concerning
1110 any action to be taken with respect to an electrical corporation that does not satisfy Subsection
1111 54-17-602 (1) for 2025.
1112 (c) The commission shall provide an opportunity for public comment and take evidence
1113 before recommending any action to be taken with respect to an electrical corporation that does
1114 not satisfy Subsection 54-17-602 (1) for 2025.
1115 (9) If a recommendation containing a penalty for failure to satisfy Subsection
1116 54-17-602 (1) is made under Subsection (8), the proposal shall require that any amount paid by
1117 an electrical corporation as a penalty be utilized to fund demand-side management for the retail
1118 customers of the electrical corporation paying the penalty.
1119 (10) A penalty may not be proposed under this section if an electrical corporation's
1120 failure to satisfy Subsection 54-17-602 (1) is due to:
1121 (a) a lack of cost-effective means to satisfy the requirement; or
1122 (b) force majeure.
1123 (11) By July 1, 2026, an electrical corporation that is a cooperative association shall file
1124 a final progress report demonstrating:
1125 (a) how Subsection 54-17-602 (1) is satisfied for the year 2025; or
1126 (b) the reason why Subsection 54-17-602 (1) is not satisfied for the year 2025 if it is not
1127 satisfied.
1128 (12) The plan and any progress report file under this section by an electrical corporation
1129 that is cooperative association shall be publicly available at the cooperative association's office
1130 or posted on the cooperative association's website.
1131 Section 19. Section 54-17-605 is enacted to read:
1132 54-17-605. Recovery of costs for renewable energy activities.
1133 (1) In accordance with other law, the commission shall include in the retail electric rates
1134 of an electrical corporation whose rates the commission regulates the state's share of any of the
1135 costs listed in Subsection (2) that are relevant to the proceeding in which the commission is
1136 considering the electrical corporation's rates:
1137 (a) if the costs are prudently incurred by the electrical corporation in connection with:
1138 (i) the acquisition of a renewable energy certificate;
1139 (ii) the acquisition of qualifying electricity for which a renewable energy certificate will
1140 be issued after the acquisition; and
1141 (iii) the acquisition, construction, and use of a renewable energy source; and
1142 (b) to the extent any qualifying electricity or renewable energy source under Subsection
1143 (1)(a) satisfies the cost-effectiveness criteria of Subsection 54-17-201 (2)(c)(ii).
1144 (2) The following are costs that may be recoverable under Subsection (1):
1145 (a) a cost of siting, acquisition of property rights, equipment, design, licensing,
1146 permitting, construction, owning, operating, or otherwise acquiring a renewable energy source
1147 and any associated asset, including transmission;
1148 (b) a cost to acquire qualifying electricity through trade, power purchase, or other
1149 transfer;
1150 (c) a cost to acquire a bundled or unbundled renewable energy certificate, if any net
1151 revenue from the sale of a renewable energy certificate allocable to this state is also included in
1152 rates;
1153 (d) a cost to interconnect a renewable energy source to the electrical corporation's
1154 transmission and distribution system;
1155 (e) a cost associated with using a physical or financial asset to integrate, firm, or shape
1156 a renewable energy source on a firm annual basis to meet a retail electricity need; and
1157 (f) any cost associated with transmission and delivery of qualifying electricity to a retail
1158 electricity consumer.
1159 (3) (a) The commission may allow an electrical corporation to use an adjustment
1160 mechanism or reasonable method other than a rate case under Sections 54-4-4 and 54-7-12 to
1161 allow recovery of costs identified in Subsection (2).
1162 (b) If the commission allows the use of an adjustment mechanism, both the costs and
1163 any associated benefit shall be reflected in the mechanism, to the extent practicable.
1164 (c) This Subsection (3) creates no presumption for or against the use of an adjustment
1165 mechanism.
1166 (4) (a) The commission may permit an electrical corporation to include in its retail
1167 electric rates the state's share of costs prudently incurred by the electrical corporation in
1168 connection with a renewable energy source, whether or not the renewable energy source
1169 ultimately becomes operational, including costs of:
1170 (i) siting;
1171 (ii) property acquisition;
1172 (iii) equipment;
1173 (iv) design;
1174 (v) licensing;
1175 (vi) permitting; and
1176 (vii) other reasonable items related to the renewable energy source.
1177 (b) Subsection (4)(a) creates no presumption concerning the prudence or recoverability
1178 of the costs identified.
1179 (c) To the extent deferral is consistent with other applicable law, the commission may
1180 allow an electrical corporation to defer costs recoverable under Subsection (4)(a) until the
1181 recovery of the deferred costs can be considered in a rate proceeding or an adjustment
1182 mechanism created under Subsection (3).
1183 (d) An application to defer costs shall be filed within 60 days after the day on which the
1184 electrical corporation determines that the renewable energy source project is impaired under
1185 generally accepted accounting principles and will not become operational.
1186 (e) Notwithstanding the opportunity to defer costs under Subsection (4)(c), a cost
1187 incurred by an electrical corporation for siting, property acquisition, equipment, design,
1188 licensing, and permitting of a renewable energy source that the electrical corporation proposes
1189 to construct shall be included in the electrical corporation's project costs for the purpose of
1190 evaluating the project's cost-effectiveness.
1191 (f) A deferred cost under Subsection (4)(a) may not be added to, or otherwise
1192 considered in the evaluation of, the cost of a project proposed by any person other than the
1193 electrical corporation for the purpose of evaluating that person's proposal.
1194 Section 20. Section 54-17-606 is enacted to read:
1195 54-17-606. Commission rules.
1196 The commission shall make rules as necessary to implement this part.
1197 Section 21. Section 54-17-607 is enacted to read:
1198 54-17-607. Procedure and appeals under this chapter.
1199 (1) The governing authority, as defined in Section 54-15-102 , has primary jurisdiction
1200 concerning issues of interpretation, implementation, and administration of this chapter.
1201 (2) An appeal of a commission order under this chapter is governed by Chapter 7,
1202 Hearings, Practice, and Procedure.
1203 Section 22. Section 54-17-701 is enacted to read:
1204
1205 54-17-701. Rules for carbon capture and geological storage.
1206 (1) By January 1, 2011, the Division of Water Quality and the Division of Air Quality,
1207 on behalf of the Board of Water Quality and the Board of Air Quality, respectively, in
1208 collaboration with the commission and the Division of Oil, Gas and Mining and the Utah
1209 Geological Survey, shall present recommended rules to the Legislature's Administrative Rules
1210 Review Committee for the following in connection with carbon capture and accompanying
1211 geological sequestration of captured carbon:
1212 (a) site characterization approval;
1213 (b) geomechanical, geochemical, and hydrogeological simulation;
1214 (c) risk assessment;
1215 (d) mitigation and remediation protocols;
1216 (e) issuance of permits for test, injection, and monitoring wells;
1217 (f) specifications for the drilling, construction, and maintenance of wells;
1218 (g) issues concerning ownership of subsurface rights and pore space;
1219 (h) allowed composition of injected matter;
1220 (i) testing, monitoring, measurement, and verification for the entirety of the carbon
1221 capture and geologic sequestration chain of operations, from the point of capture of the carbon
1222 dioxide to the sequestration site;
1223 (j) closure and decommissioning procedure;
1224 (k) short- and long-term liability and indemnification for sequestration sites;
1225 (l) conversion of enhanced oil recovery operations to carbon dioxide geological
1226 sequestration sites; and
1227 (m) other issues as identified.
1228 (2) The entities listed in Subsection (1) shall report to the Legislature's Administrative
1229 Rules Review Committee any proposals for additional statutory changes needed to implement
1230 rules contemplated under Subsection (1).
1231 (3) On or before July 1, 2009, the entities listed in Subsection (1) shall submit to the
1232 Legislature's Public Utilities and Technology and Natural Resources, Agriculture, and
1233 Environment Interim Committees a progress report on the development of the recommended
1234 rules required by this part.
1235 (4) The recommended rules developed under this section apply to the injection of
1236 carbon dioxide and other associated injectants in allowable types of geological formations for
1237 the purpose of reducing emissions to the atmosphere through long-term geological
1238 sequestration as required by law or undertaken voluntarily or for subsequent beneficial reuse.
1239 (5) The recommended rules developed under this section do not apply to the injection
1240 of fluids through the use of Class II injection wells as defined in 40 C.F.R. 144.69(b) for the
1241 purpose of enhanced hydrocarbon recovery.
1242 (6) Rules recommended under this section shall:
1243 (a) ensure that adequate health and safety standards are met;
1244 (b) minimize the risk of unacceptable leakage from the injection well and injection zone
1245 for carbon capture and geologic sequestration; and
1246 (c) provide adequate regulatory oversight and public information concerning carbon
1247 capture and geologic sequestration.
1248 Section 23. Effective date.
1249 If approved by two-thirds of all the members elected to each house, this bill takes effect
1250 upon approval by the governor, or the day following the constitutional time limit of Utah
1251 Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
1252 the date of veto override.
[Bill Documents][Bills Directory]