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First Substitute S.B. 202
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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
13 other 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 Act
18 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
26 electric 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
99 calendar year from activities or programs promoting electric energy efficiency or conservation
100 or more 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
126 Council 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
129 geological sequestration or through other verifiably permanent reductions in carbon dioxide
130 emissions through the use of technology.
131 (8) "Qualifying electricity" means electricity generated on or after January 1, 1995
132 from 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
171 1, 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
188 the 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
191 quantity of renewable energy certificates to which the user is entitled determined by the
192 equivalent kilowatt-hours saved, except to the extent the commission determines otherwise
193 with respect to 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,
200 except 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
219 retail electric sales in this state of each municipal electric utility shall consist of qualifying
220 electricity or renewable energy certificates in an amount equal to at least 20% of adjusted retail
221 electric sales.
222 (b) The amount under Subsection (1)(a) is computed based upon adjusted retail sales
223 for the calendar year commencing 36 months before the first day of the year for which the
224 target calculated under Subsection (1)(a) applies.
225 (c) Notwithstanding Subsections (1)(a) and (b) an increase in the annual target from
226 one year to the next is limited to the greater of:
227 (i) 17,500 megawatt-hours; or
228 (ii) 20% of the prior year's amount under Subsections (1)(a) and (b).
229 (2) Cost-effectiveness under Subsection (1) is determined using any criteria applicable
230 to the municipal electric utility's acquisition of a significant energy resource established by the
231 municipality's legislative body.
232 (3) This section does not require a municipal electric utility to:
233 (a) substitute qualifying electricity for electricity from a generation source owned or
234 contractually committed, or from a contractual commitment for a power purchase;
235 (b) enter into any additional electric sales commitment or any other arrangement for the
236 sale or other disposition of electricity that is not already, or would not be, entered into by the
237 municipal electric utility; or
238 (c) acquire qualifying electricity in excess of its adjusted retail electric sales.
239 (4) A municipal electrical corporation may combine the following to meet Subsection
240 (1):
241 (a) qualifying electricity from a renewable energy source owned by the municipal
242 electric utility;
243 (b) qualifying electricity acquired by the municipal electric utility through trade, power
244 purchase, or other transfer; and
245 (c) a bundled or unbundled renewable energy certificate, including a banked renewable
246 energy certificate.
247 (5) To meet Subsection (1), a municipal electric utility may also count:
248 (a) qualifying electricity generated or acquired or renewable energy certificates
249 acquired for a program permitting the municipal electric utility's customers to voluntarily
250 contribute to a renewable energy source; and
251 (b) electricity allocated to this state that is produced by a hydroelectric facility
252 becoming operational after December 31, 2007 if the hydroelectric facility is located in any
253 state in which the municipal electric utility, or the interlocal entity with which the municipal
254 electric utility has a contract, provides electric service.
255 Section 4. Section 10-19-202 is enacted to read:
256 10-19-202. Renewable energy certificate -- Use to satisfy other requirements.
257 (1) A municipal electric utility may buy, sell, trade, or otherwise transfer a renewable
258 energy certificate issued or recognized under Section 54-17-603 .
259 (2) For the purpose of satisfying Subsection 10-19-201 (1) and the issuance of a
260 renewable energy certificate under Section 54-17-603 :
261 (a) a renewable energy source located in this state that derives its energy from solar
262 photovoltaic and solar thermal energy shall be credited for 2.4 kilowatt-hours of qualifying
263 electricity for each 1.0 kilowatt-hour generated; and
264 (b) if two or more municipal electric utilities jointly own a renewable energy resource,
265 each municipal electric utility shall be credited with 1.0 kilowatt-hour of qualifying electricity
266 for 1.0 kilowatt-hour of the renewable energy resource allocated to the municipal electric utility
267 by contract, unless the contract otherwise provides.
268 (3) A renewable energy certificate:
269 (a) may be used only once to satisfy Subsection 10-19-201 (1);
270 (b) may be used to satisfy Subsection 10-19-201 (1) and the qualifying electricity on
271 which the renewable energy certificate is based may be used to satisfy any federal renewable
272 energy requirement; and
273 (c) may not be used if it has been used to satisfy any other state's renewable energy
274 requirement.
275 Section 5. Section 10-19-301 is enacted to read:
276
277 10-19-301. Plans and reports.
278 (1) A municipal electric utility shall develop and maintain a plan for implementing
279 Subsection 10-19-201 (1).
280 (2) A progress report concerning a plan under Subsection (1) shall be filed with the
281 municipality's legislative body by January 1 of each of the years 2010, 2015, 2020, and 2024.
282 (3) The progress report under Subsection (2) shall contain:
283 (a) the actual and projected amount of qualifying electricity through 2025;
284 (b) the source of qualifying electricity;
285 (c) an estimate of the cost of achieving the target;
286 (d) a discussion of conditions impacting the renewable energy source and qualifying
287 electricity markets; and
288 (e) any recommendation for a suggested legislative or program change.
289 (4) The plan and progress report required by Subsections (1) and (2) may include
290 procedures that will be used by the municipal electric utility to identify and select any
291 cost-effective renewable energy resource and qualifying electricity.
292 (5) By July 1, 2026, the municipal electric utility shall file a final progress report
293 demonstrating:
294 (a) how Subsection 10-19-201 (1) is satisfied for the year 2025; or
295 (b) the reason why Subsection 10-19-201 (1) is not satisfied for the year 2025, if it is
296 not satisfied.
297 (6) The plan and any progress report filed under this section shall be publicly available
298 at the municipal legislative body's office.
299 Section 6. Section 10-19-302 is enacted to read:
300 10-19-302. Municipal authority -- Commission authority.
301 (1) The municipal legislative body may adopt procedures necessary to implement this
302 chapter.
303 (2) Nothing in this chapter authorizes the commission to exercise any power over a
304 municipal electric utility's electrical generation, demand-side management program, or other
305 operation.
306 Section 7. Section 54-2-1 is amended to read:
307 54-2-1. Definitions.
308 As used in this title:
309 (1) "Avoided costs" means the incremental costs to an electrical corporation of electric
310 energy or capacity or both which, due to the purchase of electric energy or capacity or both
311 from small power production or cogeneration facilities, the electrical corporation would not
312 have to generate itself or purchase from another electrical corporation.
313 (2) "Cogeneration facility":
314 (a) means a facility which produces:
315 (i) electric energy; and
316 (ii) steam or forms of useful energy, including heat, which are used for industrial,
317 commercial, heating, or cooling purposes; and
318 (b) is a qualifying cogeneration facility under federal law.
319 (3) "Commission" means the Public Service Commission of Utah.
320 (4) "Commissioner" means a member of the commission.
321 (5) (a) "Corporation" includes an association, and a joint stock company having any
322 powers or privileges not possessed by individuals or partnerships.
323 (b) "Corporation" does not include towns, cities, counties, conservancy districts,
324 improvement districts, or other governmental units created or organized under any general or
325 special law of this state.
326 (6) "Distribution electrical cooperative" includes an electrical corporation that:
327 (a) is a cooperative;
328 (b) conducts a business that includes the retail distribution of electricity the cooperative
329 purchases or generates for the cooperative's members; and
330 (c) is required to allocate or distribute savings in excess of additions to reserves and
331 surplus on the basis of patronage to the cooperative's:
332 (i) members; or
333 (ii) patrons.
334 (7) "Electrical corporation" includes every corporation, cooperative association, and
335 person, their lessees, trustees, and receivers, owning, controlling, operating, or managing any
336 electric plant, or in any way furnishing electric power for public service or to its consumers or
337 members for domestic, commercial, or industrial use, within this state, except independent
338 energy producers, and except where electricity is generated on or distributed by the producer
339 solely for the producer's own use, or the use of the producer's tenants, or for the use of
340 members of an association of unit owners formed under Title 57, Chapter 8, Condominium
341 Ownership Act, and not for sale to the public generally.
342 (8) "Electric plant" includes all real estate, fixtures, and personal property owned,
343 controlled, operated, or managed in connection with or to facilitate the production, generation,
344 transmission, delivery, or furnishing of electricity for light, heat, or power, and all conduits,
345 ducts, or other devices, materials, apparatus, or property for containing, holding, or carrying
346 conductors used or to be used for the transmission of electricity for light, heat, or power.
347 (9) "Gas corporation" includes every corporation and person, their lessees, trustees, and
348 receivers, owning, controlling, operating, or managing any gas plant for public service within
349 this state or for the selling or furnishing of natural gas to any consumer or consumers within the
350 state for domestic, commercial, or industrial use, except in the situation that:
351 (a) gas is made or produced on, and distributed by the maker or producer through,
352 private property:
353 (i) solely for the maker's or producer's own use or the use of the maker's or producer's
354 tenants; and
355 (ii) not for sale to others;
356 (b) gas is compressed on private property solely for the owner's own use or the use of
357 the owner's employees as a motor vehicle fuel; or
358 (c) gas is compressed by a retailer of motor vehicle fuel on the retailer's property solely
359 for sale as a motor vehicle fuel.
360 (10) "Gas plant" includes all real estate, fixtures, and personal property owned,
361 controlled, operated, or managed in connection with or to facilitate the production, generation,
362 transmission, delivery, or furnishing of gas, natural or manufactured, for light, heat, or power.
363 (11) "Heat corporation" includes every corporation and person, their lessees, trustees,
364 and receivers, owning, controlling, operating, or managing any heating plant for public service
365 within this state.
366 (12) (a) "Heating plant" includes all real estate, fixtures, machinery, appliances, and
367 personal property controlled, operated, or managed in connection with or to facilitate the
368 production, generation, transmission, delivery, or furnishing of artificial heat.
369 (b) "Heating plant" does not include either small power production facilities or
370 cogeneration facilities.
371 (13) "Independent energy producer" means every electrical corporation, person,
372 corporation, or government entity, their lessees, trustees, or receivers, that own, operate,
373 control, or manage [
374 (14) "Independent power production facility" means a facility that:
375 (a) produces electric energy solely by the use, as a primary energy source, of biomass,
376 waste, a renewable resource, a geothermal resource, or any combination of the preceding
377 sources; or
378 (b) is a qualifying power production facility.
379 [
380 transmission of signs, signals, writing, images, sounds, messages, data, or other information of
381 any nature by wire, radio, lightwaves, or other electromagnetic means, excluding mobile radio
382 facilities, that are owned, controlled, operated, or managed by a corporation or person,
383 including their lessees, trustees, receivers, or trustees appointed by any court, for the use of that
384 corporation or person and not for the shared use with or resale to any other corporation or
385 person on a regular basis.
386 [
387 electrical corporation, distribution electrical cooperative, wholesale electrical cooperative,
388 telephone corporation, telegraph corporation, water corporation, sewerage corporation, heat
389 corporation, and independent energy producer not described in Subsection [
390 where the service is performed for, or the commodity delivered to, the public generally, or in
391 the case of a gas corporation or electrical corporation where the gas or electricity is sold or
392 furnished to any member or consumers within the state for domestic, commercial, or industrial
393 use.
394 (b) (i) If any railroad corporation, gas corporation, electrical corporation, telephone
395 corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation,
396 or independent energy producer not described in Subsection [
397 for or delivers a commodity to the public, it is considered to be a public utility, subject to the
398 jurisdiction and regulation of the commission and this title.
399 (ii) If a gas corporation, independent energy producer not described in Subsection
400 [
401 consumers within the state, for domestic, commercial, or industrial use, for which any
402 compensation or payment is received, it is considered to be a public utility, subject to the
403 jurisdiction and regulation of the commission and this title.
404 (c) Any corporation or person not engaged in business exclusively as a public utility as
405 defined in this section is governed by this title in respect only to the public utility owned,
406 controlled, operated, or managed by the corporation or person, and not in respect to any other
407 business or pursuit.
408 (d) An independent energy producer is exempt from the jurisdiction and regulations of
409 the commission with respect to an independent power production facility if it meets the
410 requirements of Subsection [
411 (i) the commodity or service is produced or delivered, or both, by an independent
412 energy producer solely for the uses exempted in Subsection (7) or for the use of state-owned
413 facilities;
414 (ii) the commodity or service is sold by an independent energy producer solely to an
415 electrical corporation or other wholesale purchaser; or
416 (iii) (A) the commodity or service delivered by the independent energy producer is
417 delivered to an entity which controls, is controlled by, or affiliated with the independent energy
418 producer or to a user located on real property managed by the independent energy producer;
419 and
420 (B) the real property on which the service or commodity is used is contiguous to real
421 property which is owned or controlled by the independent energy producer. Parcels of real
422 property separated solely by public roads or easements for public roads shall be considered as
423 contiguous for purposes of this Subsection [
424 (e) Any person or corporation defined as an electrical corporation or public utility
425 under this section may continue to serve its existing customers subject to any order or future
426 determination of the commission in reference to the right to serve those customers.
427 (f) (i) "Public utility" does not include any person that is otherwise considered a public
428 utility under this Subsection [
429 in an electric plant, cogeneration facility, or small power production facility in this state if all of
430 the following conditions are met:
431 (A) the ownership interest in the electric plant, cogeneration facility, or small power
432 production facility is leased to:
433 (I) a public utility, and that lease has been approved by the commission;
434 (II) a person or government entity that is exempt from commission regulation as a
435 public utility; or
436 (III) a combination of Subsections [
437 (B) the lessor of the ownership interest identified in Subsection [
438 (I) primarily engaged in a business other than the business of a public utility; or
439 (II) a person whose total equity or beneficial ownership is held directly or indirectly by
440 another person engaged in a business other than the business of a public utility; and
441 (C) the rent reserved under the lease does not include any amount based on or
442 determined by revenues or income of the lessee.
443 (ii) Any person that is exempt from classification as a public utility under Subsection
444 [
445 lessee's right to possession or use of the electric plant for so long as the former lessor does not
446 operate the electric plant or sell electricity from the electric plant. If the former lessor operates
447 the electric plant or sells electricity, the former lessor shall continue to be so exempt for a
448 period of 90 days following termination, or for a longer period that is ordered by the
449 commission. This period may not exceed one year. A change in rates that would otherwise
450 require commission approval may not be effective during the 90-day or extended period
451 without commission approval.
452 (g) "Public utility" does not include any person that provides financing for, but has no
453 ownership interest in an electric plant, small power production facility, or cogeneration facility.
454 In the event of a foreclosure in which an ownership interest in an electric plant, small power
455 production facility, or cogeneration facility is transferred to a third-party financer of an electric
456 plant, small power production facility, or cogeneration facility, then that third-party financer is
457 exempt from classification as a public utility for 90 days following the foreclosure, or for a
458 longer period that is ordered by the commission. This period may not exceed one year.
459 (h) (i) The distribution or transportation of natural gas for use as a motor vehicle fuel
460 does not cause the distributor or transporter to be a "public utility," unless the commission,
461 after notice and a public hearing, determines by rule that it is in the public interest to regulate
462 the distributers or transporters, but the retail sale alone of compressed natural gas as a motor
463 vehicle fuel may not cause the seller to be a "public utility."
464 (ii) In determining whether it is in the public interest to regulate the distributors or
465 transporters, the commission shall consider, among other things, the impact of the regulation
466 on the availability and price of natural gas for use as a motor fuel.
467 [
468 purchase electricity from small power production or cogeneration facilities pursuant to the
469 Public Utility Regulatory Policies Act, 16 U.S.C. Section 824a-3.
470 (18) "Qualifying power producer" means a corporation, cooperative association, or
471 person, or the lessee, trustee, and receiver of the corporation, cooperative association, or
472 person, who owns, controls, operates, or manages any qualifying power production facility or
473 cogeneration facility.
474 (19) "Qualifying power production facility" means a facility that:
475 (a) produces electrical energy solely by the use, as a primary energy source, of biomass,
476 waste, a renewable resource, a geothermal resource, or any combination of the preceding
477 sources;
478 (b) has a power production capacity that, together with any other facilities located at
479 the same site, is no greater than 80 megawatts; and
480 (c) is a qualifying small power production facility under federal law.
481 [
482 than a street railway, and each branch or extension of a railway, by any power operated,
483 together with all tracks, bridges, trestles, rights-of-way, subways, tunnels, stations, depots,
484 union depots, yards, grounds, terminals, terminal facilities, structures, and equipment, and all
485 other real estate, fixtures, and personal property of every kind used in connection with a
486 railway owned, controlled, operated, or managed for public service in the transportation of
487 persons or property.
488 [
489 trustees, and receivers, owning, controlling, operating, or managing any railroad for public
490 service within this state.
491 [
492 lessees, trustees, and receivers, owning, controlling, operating, or managing any sewerage
493 system for public service within this state.
494 (b) "Sewerage corporation" does not include private sewerage companies engaged in
495 disposing of sewage only for their stockholders, or towns, cities, counties, conservancy
496 districts, improvement districts, or other governmental units created or organized under any
497 general or special law of this state.
498 [
499 [
500
501 [
502
503 [
504 [
505 lessees, trustees, and receivers, owning, controlling, operating, or managing any telegraph line
506 for public service within this state.
507 [
508 instruments, and appliances, and all other real estate, fixtures, and personal property owned,
509 controlled, operated, or managed in connection with or to facilitate communication by
510 telegraph, whether that communication be had with or without the use of transmission wires.
511 [
512 lessees, trustee, receivers, or trustees appointed by any court, who owns, controls, operates,
513 manages, or resells a public telecommunications service as defined in Section 54-8b-2 .
514 (b) "Telephone corporation" does not mean a corporation, partnership, or firm
515 providing:
516 (i) intrastate telephone service offered by a provider of cellular, personal
517 communication systems (PCS), or other commercial mobile radio service as defined in 47
518 U.S.C. Sec. 332 that has been issued a covering license by the Federal Communications
519 Commission;
520 (ii) Internet service; or
521 (iii) resold intrastate toll service.
522 [
523 instruments, and appliances, and all other real estate, fixtures, and personal property owned,
524 controlled, operated, or managed in connection with or to facilitate communication by
525 telephone whether that communication is had with or without the use of transmission wires.
526 [
527 incidental to the safety, comfort, or convenience of the person transported, and the receipt,
528 carriage, and delivery of that person and that person's baggage.
529 [
530 incidental to the transportation of property, including in particular its receipt, delivery,
531 elevation, transfer, switching, carriage, ventilation, refrigeration, icing, dunnage, storage, and
532 hauling, and the transmission of credit by express companies.
533 [
534 trustees, and receivers, owning, controlling, operating, or managing any water system for
535 public service within this state. It does not include private irrigation companies engaged in
536 distributing water only to their stockholders, or towns, cities, counties, water conservancy
537 districts, improvement districts, or other governmental units created or organized under any
538 general or special law of this state.
539 [
540 headgates, pipes, flumes, canals, structures, and appliances, and all other real estate, fixtures,
541 and personal property owned, controlled, operated, or managed in connection with or to
542 facilitate the diversion, development, storage, supply, distribution, sale, furnishing, carriage,
543 appointment, apportionment, or measurement of water for power, fire protection, irrigation,
544 reclamation, or manufacturing, or for municipal, domestic, or other beneficial use.
545 (b) "Water system" does not include private irrigation companies engaged in
546 distributing water only to their stockholders.
547 [
548 is:
549 (a) in the business of the wholesale distribution of electricity it has purchased or
550 generated to its members and the public; and
551 (b) required to distribute or allocate savings in excess of additions to reserves and
552 surplus to members or patrons on the basis of patronage.
553 Section 8. Section 54-12-1 is amended to read:
554 54-12-1. Legislative policy.
555 (1) The Legislature declares that in order to promote the more rapid development of
556 new sources of electrical energy, to maintain the economic vitality of the state through the
557 continuing production of goods and the employment of its people, and to promote the efficient
558 utilization and distribution of energy, it is desirable and necessary to encourage independent
559 energy producers to competitively develop sources of electric energy not otherwise available to
560 Utah businesses, residences, and industries served by electrical corporations, and to remove
561 unnecessary barriers to energy transactions involving independent energy producers and
562 electrical corporations.
563 (2) It is the policy of this state to encourage the development of [
564 and qualifying power production and cogeneration facilities, to promote a diverse array of
565 economical and permanently sustainable energy resources in an environmentally acceptable
566 manner, and to conserve our finite and expensive energy resources and provide for their most
567 efficient and economic utilization.
568 Section 9. Section 54-12-2 is amended to read:
569 54-12-2. Purchase of power from qualifying power producers.
570 (1) Purchasing utilities shall offer to purchase power from [
571 qualifying power producers.
572 (2) The commission shall establish reasonable rates, terms, and conditions for the
573 purchase or sale of electricity or electrical generating capacity, or both, between a purchasing
574 utility and [
575 terms, and conditions, the commission shall either establish a procedure under which [
576 qualifying power producers [
577 purchasing utilities or devise an alternative method which considers the purchasing utility's
578 avoided costs. The capacity component of avoided costs shall reflect the purchasing utility's
579 long-term deferral or cancellation of generating units which may result from the purchase of
580 power from [
581 (3) Purchasing utilities and [
582 agree to rates, terms, or conditions for the sale of electricity or electrical capacity which differ
583 from the rates, terms, and conditions adopted by the commission under Subsection (2).
584 (4) The commission may adopt further rules which encourage the development of
585 small power production and cogeneration facilities.
586 Section 10. Section 54-12-3 is amended to read:
587 54-12-3. Recovery of investment costs.
588 The commission may not consider any purchasing utility's purchase of power from [
589
590 purchasing utility's investment costs for facilities which are in use prior to signing a contract
591 for the purchase of power from [
592 Section 11. Section 54-17-201 is amended to read:
593 54-17-201. Solicitation process required -- Exception.
594 (1) (a) An affected electrical utility shall comply with this chapter to acquire or
595 construct a significant energy resource after February 25, 2005.
596 (b) Notwithstanding Subsection (1)(a), this chapter does not apply to a significant
597 energy resource for which the affected electrical utility has issued a solicitation before February
598 25, 2005.
599 (2) (a) Except as provided in Subsection (3), to acquire or construct a significant
600 energy resource, an affected electrical utility shall conduct a solicitation process that is
601 approved by the commission.
602 (b) To obtain the approval of the commission of a solicitation process, the affected
603 electrical utility shall file with the commission a request for approval that includes:
604 (i) a description of the solicitation process the affected electrical utility will use;
605 (ii) a complete proposed solicitation; and
606 (iii) any other information the commission requires by rule made in accordance with
607 Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
608 (c) In ruling on the request for approval of a solicitation process, the commission shall
609 determine whether the solicitation process:
610 (i) complies with this chapter and rules made in accordance with Title 63, Chapter 46a,
611 Utah Administrative Rulemaking Act; and
612 (ii) is in the public interest taking into consideration:
613 (A) whether it will most likely result in the acquisition, production, and delivery of
614 electricity at the lowest reasonable cost to the retail customers of an affected electrical utility
615 located in this state;
616 (B) long-term and short-term impacts;
617 (C) risk;
618 (D) reliability;
619 (E) financial impacts on the affected electrical utility; and
620 (F) other factors determined by the commission to be relevant.
621 (d) Before approving a solicitation process under this section the commission:
622 (i) may hold a public hearing; and
623 (ii) shall provide an opportunity for public comment.
624 (e) As part of its review of a solicitation process, the commission may provide the
625 affected electrical utility guidance on any additions or changes to its proposed solicitation
626 process.
627 (f) Unless the commission determines that additional time to analyze a solicitation
628 process is warranted and is in the public interest, within [
629 affected electrical utility files a request for approval of the solicitation process, the commission
630 shall:
631 (i) approve a proposed solicitation process;
632 (ii) suggest modifications to a proposed solicitation process; or
633 (iii) reject a proposed solicitation process.
634 (3) Notwithstanding Subsection (2), an affected electrical utility may acquire or
635 construct a significant energy resource without conducting a solicitation process if it obtains a
636 waiver of the solicitation requirement in accordance with Section 54-17-501 .
637 (4) In accordance with the commission's authority under Subsection 54-12-2 (2), the
638 commission shall determine:
639 (a) whether this chapter or another competitive bidding procedure shall apply to a
640 purchase of a significant energy resource by an affected electrical utility from a small power
641 producer or cogenerator; and
642 (b) if this chapter applies as provided in Subsection (4)(a), the manner in which this
643 chapter applies to a purchase of a significant energy resource by an affected electrical utility
644 from a small power producer or cogenerator.
645 Section 12. Section 54-17-302 is amended to read:
646 54-17-302. Approval of a significant energy resource decision required.
647 (1) If pursuant to Part 2, Solicitation Process, an affected electrical utility is required to
648 conduct a solicitation for a significant energy resource or obtains a waiver of the requirement to
649 conduct a solicitation under Section 54-17-501 , but does not obtain a waiver of the requirement
650 to obtain approval of the significant energy resource decision under Section 54-17-501 , the
651 affected electrical utility shall obtain approval of its significant energy resource decision:
652 (a) after the completion of the solicitation process, if the affected electrical utility is
653 required to conduct a solicitation; and
654 (b) before an affected electrical utility may construct or enter into a binding agreement
655 to acquire the significant energy resource.
656 (2) (a) To obtain the approval required by Subsection (1), the affected electrical utility
657 shall file a request for approval with the commission.
658 (b) The request for approval required by this section shall include any information
659 required by the commission by rule made in accordance with Title 63, Chapter 46a, Utah
660 Administrative Rulemaking Act.
661 (3) In ruling on a request for approval of a significant energy resource decision, the
662 commission shall determine whether the significant energy resource decision:
663 (a) is reached in compliance with this chapter and rules made in accordance with Title
664 63, Chapter 46a, Utah Administrative Rulemaking Act;
665 (b) (i) is reached in compliance with the solicitation process approved by the
666 commission in accordance with Part 2, Solicitation Process; or
667 (ii) is reached after the waiver of the solicitation process as provided in Subsection
668 54-17-201 (3); and
669 (c) is in the public interest, taking into consideration:
670 (i) whether it will most likely result in the acquisition, production, and delivery of
671 electricity at the lowest reasonable cost to the retail customers of an affected electrical utility
672 located in this state;
673 (ii) long-term and short-term impacts;
674 (iii) risk;
675 (iv) reliability;
676 (v) financial impacts on the affected electrical utility; and
677 (vi) other factors determined by the commission to be relevant.
678 (4) The commission may not approve a significant energy resource decision under this
679 section before holding a public hearing.
680 (5) Unless the commission determines that additional time to analyze a significant
681 energy resource decision is warranted and is in the public interest, within [
682 day on which the affected electrical utility files a request for approval, the commission shall:
683 (a) approve the significant energy resource decision;
684 (b) approve the significant energy resource decision subject to conditions imposed by
685 the commission; or
686 (c) disapprove the significant energy resource decision.
687 (6) The commission shall include in its order under this section:
688 (a) findings as to the total projected costs for construction or acquisition of an
689 approved significant energy resource; and
690 (b) the basis upon which the findings described in Subsection (6)(a) are made.
691 (7) Notwithstanding any other provision of this part, an affected electrical utility may
692 acquire a significant energy resource without obtaining approval pursuant to this section if it
693 obtains a waiver of the requirement for approval in accordance with Section 54-17-501 .
694 (8) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
695 commission shall make rules regarding the process for approval of a significant energy
696 resource decision under this section.
697 Section 13. Section 54-17-303 is amended to read:
698 54-17-303. Cost recovery.
699 (1) (a) Except as otherwise provided in this section, if the commission approves a
700 significant energy resource decision under Section 54-17-302 , the commission shall, in a
701 general rate case or other appropriate commission proceeding, include in the affected electrical
702 utility's retail electric rates the state's share of costs:
703 (i) relevant to the proceeding;
704 (ii) incurred by the affected electrical utility in constructing or acquiring the approved
705 significant energy resource; and
706 (iii) up to the projected costs specified in the commission's order issued under Section
707 54-17-302 .
708 (b) (i) The commission shall, in a general rate case or other appropriate commission
709 proceeding, include in the affected electrical utility's retail electric rates the state's share of the
710 incremental cost relevant to the proceeding that were prudently incurred by the affected
711 electrical utility to identify, evaluate, and submit a reasonable benchmark option, whether or
712 not the benchmark option is selected or becomes operational.
713 (ii) A recoverable cost under Subsection (1)(b)(i) shall be included in the affected
714 electrical utility's project costs for the purpose of evaluating the project's cost-effectiveness.
715 (iii) A recoverable cost under Subsection (1)(b)(i) may not be added to the cost or
716 otherwise considered in the evaluation of a project proposed by any person other than the
717 affected electrical utility for the purpose of evaluating that person's proposal.
718 [
719 54-17-304 , an increase from the projected costs specified in the commission's order issued
720 under Section 54-17-302 shall be subject to review by the commission as part of a rate hearing
721 under Section 54-7-12 .
722 (2) (a) Subsequent to the commission issuing an order described in Subsection (2)(a)(i)
723 or (ii), the commission may disallow some or all costs incurred in connection with an
724 approved significant energy resource decision if the commission finds that an affected
725 electrical utility's actions in implementing an approved significant energy resource decision are
726 not prudent because of new information or changed circumstances that occur after:
727 (i) the commission's approval of the significant energy resource decisions under
728 Section 54-17-302 ; or
729 (ii) a commission order to proceed under Section 54-17-304 .
730 (b) In making a determination of prudence under Subsection (2)(a), the commission
731 shall use the standards identified in Section 54-4-4 .
732 (3) Notwithstanding any other provision of this chapter, the commission may disallow
733 some or all of the costs incurred by an affected electrical utility in connection with an approved
734 significant energy resource decision upon a finding by the commission that the affected
735 electrical utility is responsible for a material misrepresentation or concealment in connection
736 with an approval process under this chapter.
737 Section 14. Section 54-17-502 is enacted to read:
738 54-17-502. Renewable energy source -- Solicitation -- Consultant.
739 (1) Sections 54-17-102 through 54-17-404 do not apply to a significant energy resource
740 that is a renewable energy source as defined in Section 54-17-601 if the nameplate capacity of
741 the renewable energy source does not exceed 300 megawatts or, if applicable, the quantity of
742 capacity that is the subject of a contract for the purchase of electricity from a renewable energy
743 source does not exceed 300 megawatts.
744 (2) (a) (i) An affected electrical utility shall issue a public solicitation of bids for a
745 renewable energy source up to 300 megawatts in size by January 31 of each year in which it
746 reasonably anticipates that it will need to acquire or commence construction of a renewable
747 energy resource.
748 (ii) A solicitation for a renewable energy source issued by January 31, 2008 for up to
749 99 megawatts satisfies the requirement of this Subsection (2) for the year 2008 if:
750 (A) not later than 30 days after the day on which this section takes effect, the affected
751 electrical utility amends the solicitation or initiates a new solicitation to seek bids for
752 renewable energy source projects up to 300 megawatts in size; and
753 (B) within 60 days after the day on which this section takes effect and as soon as
754 practicable, the commission retains a consultant in accordance with Subsection (3).
755 (b) A consultant hired under Subsection (2)(a)(ii)(B) shall perform the consultant's
756 duties under Subsection (3) in relation to the status of the solicitation process at the time the
757 consultant is retained and may not unreasonably delay the solicitation process.
758 (c) For a solicitation issued after January 31, 2008:
759 (i) the affected electrical utility shall develop a reasonable process for pre-approval of
760 bidders; and
761 (ii) in addition to publicly issuing the solicitation in Subsection (2)(a)(i), the affected
762 electrical utility shall send copies of the solicitation to each potential bidder who is
763 pre-approved.
764 (d) The affected electrical utility shall evaluate in good faith each bid that is received
765 and negotiate in good faith with each bidder whose bid appears to be cost effective, as defined
766 in Section 54-17-602 .
767 (e) Beginning on August 1, 2008, and on each August 1 thereafter, the affected
768 electrical utility shall file a notice with the commission indicating whether it reasonably
769 anticipates that it will need to acquire or commence construction of a renewable energy
770 resource during the following year.
771 (3) (a) If the commission receives a notice under Subsection (2)(e) that the affected
772 electrical utility reasonably anticipates that it will need to acquire or commence construction of
773 a renewable energy source during the following year, the commission shall promptly retain a
774 consultant to:
775 (i) validate that the affected electrical utility is following the bidder pre-approval
776 process developed pursuant to Subsection (2)(c) and make recommendations for changes to the
777 pre-approval process for future solicitations;
778 (ii) monitor and document all material aspects of the bids, bid evaluations, and bid
779 negotiations between the affected electrical utility and any bidders in the solicitation process;
780 (iii) maintain adequate documentation of each bid, including the solicitation,
781 evaluation, and negotiation processes and the reason for the conclusion of negotiations, which
782 documentation shall be transmitted to the commission at the conclusion of all negotiations in
783 the solicitation; and
784 (iv) be available to testify under oath before the commission in any relevant proceeding
785 concerning all aspects of the public solicitation process.
786 (b) The commission and the consultant shall use all reasonable efforts to not delay the
787 solicitation process.
788 (4) Documentation provided to the commission by the consultant shall be available to
789 the affected electrical utility, any bidder, or other interested person under terms and conditions
790 and at times determined appropriate by the commission.
791 (5) (a) The commission and the consultant shall execute a contract approved by the
792 commission with terms and conditions approved by the commission.
793 (b) Unless otherwise provided by contract, an invoice for the consultant's services shall
794 be sent to the Division of Public Utilities for review and approval.
795 (c) After approval under Subsection (5)(b), the invoice shall be forwarded to the
796 affected electrical utility for payment to the consultant.
797 (d) The affected electrical utility may, in a general rate case or other appropriate
798 commission proceeding, include, and the Commission shall allow, recovery by the affected
799 electrical utility of any amount paid by the affected electrical utility for the consultant.
800 (6) (a) Nothing in this section precludes an affected electrical utility from constructing
801 or acquiring any renewable energy source project outside the solicitation process provided for
802 in this section, including purchasing electricity from any renewable energy source project that
803 chooses to self-certify as a qualifying facility under the federal Public Utility Regulatory
804 Policies Act of 1978.
805 (b) An affected electrical utility that constructs a renewable energy source outside the
806 solicitation process of this section or Section 54-17-201 shall file a notice with the commission
807 at least 60 days before the date of commencement of construction, indicating the size and
808 location of the renewable energy source.
809 (c) The date of commencement of construction under Subsection (6)(b) is the date of
810 any directive from an affected electrical utility to the person responsible for the construction of
811 the renewable energy source authorizing or directing the person to proceed with construction.
812 (d) For an affected electrical utility whose rates are regulated by the commission, the
813 utility has the burden of proving in a rate case or other appropriate commission proceeding the
814 prudence, reasonableness, and cost-effectiveness of construction under this Subsection (6),
815 including the method used to evaluate the risks and value of any bid submitted in the
816 solicitation under this section.
817 (7) Nothing in this section requires an affected electrical utility to enter into any
818 transaction that it reasonably believes is not cost effective or otherwise is not in the public
819 interest.
820 Section 15. Section 54-17-601 is enacted to read:
821
822 54-17-601. Definitions.
823 As used in this part:
824 (1) "Adjusted retail electric sales" means the total kilowatt-hours of retail electric sales
825 of an electrical corporation to customers in this state in a calendar year, reduced by:
826 (a) the amount of those kilowatt-hours attributable to electricity generated or purchased
827 in that calendar year from qualifying zero carbon emissions generation and qualifying carbon
828 sequestration generation;
829 (b) the amount of those kilowatt-hours attributable to electricity generated or purchased
830 in that calendar year from generation located within the geographic boundary of the Western
831 Electricity Coordinating Council that derives its energy from one or more of the following but
832 that does not satisfy the definition of a renewable energy source or that otherwise has not been
833 used to satisfy Subsection 54-17-602 (1):
834 (i) wind energy;
835 (ii) solar photovoltaic and solar thermal energy;
836 (iii) wave, tidal, and ocean thermal energy;
837 (iv) except for combustion of wood that has been treated with chemical preservatives
838 such as creosote, pentachlorophenol or chromated copper arsenate, biomass and biomass
839 byproducts, including:
840 (A) organic waste;
841 (B) forest or rangeland woody debris from harvesting or thinning conducted to improve
842 forest or rangeland ecological health and to reduce wildfire risk;
843 (C) agricultural residues;
844 (D) dedicated energy crops; and
845 (E) landfill gas or biogas produced from organic matter, wastewater, anaerobic
846 digesters, or municipal solid waste;
847 (v) geothermal energy;
848 (vi) hydroelectric energy; or
849 (vii) waste gas and waste heat capture or recovery; and
850 (c) the number of kilowatt-hours attributable to reductions in retail sales in that
851 calendar year from demand side management as defined in Section 54-7-12.8 , with the
852 kilowatt-hours for an electrical corporation whose rates are regulated by the commission and
853 adjusted by the commission to exclude kilowatt-hours for which a renewable energy certificate
854 is issued under Subsection 54-17-603 (4)(b).
855 (2) "Amount of kilowatt-hours attributable to electricity generated or purchased in that
856 calendar year from qualifying carbon sequestration generation," for qualifying carbon
857 sequestration generation, means the kilowatt-hours supplied by a facility during the calendar
858 year multiplied by the ratio of the amount of carbon dioxide captured from the facility and
859 sequestered to the sum of the amount of carbon dioxide captured from the facility and
860 sequestered plus the amount of carbon dioxide emitted from the facility during the same
861 calendar year.
862 (3) "Banked renewable energy certificate" means a bundled or unbundled renewable
863 energy certificate that is:
864 (a) not used in a calendar year to comply with this part or with a renewable energy
865 program in another state; and
866 (b) carried forward into a subsequent year.
867 (4) "Bundled renewable energy certificate" means a renewable energy certificate for
868 qualifying electricity that is acquired:
869 (a) by an electrical corporation by a trade, purchase, or other transfer of electricity that
870 includes the renewable energy attributes of, or certificate that is issued for, the electricity; or
871 (b) by an electrical corporation by generating the electricity for which the renewable
872 energy certificate is issued.
873 (5) "Electrical corporation":
874 (a) is as defined in Section 54-2-1 ; and
875 (b) does not include a person generating electricity that is not for sale to the public.
876 (6) "Qualifying carbon sequestration generation" means a fossil-fueled generating
877 facility located within the geographic boundary of the Western Electricity Coordinating
878 Council that:
879 (a) becomes operational or is retrofitted on or after January 1, 2008; and
880 (b) reduces carbon dioxide emissions into the atmosphere through permanent
881 geological sequestration or through another verifiably permanent reduction in carbon dioxide
882 emissions through the use of technology.
883 (7) "Qualifying electricity" means electricity generated on or after January 1, 1995
884 from a renewable energy source if:
885 (a) (i) the renewable energy source is located within the geographic boundary of the
886 Western Electricity Coordinating Council; or
887 (ii) the qualifying electricity is delivered to the transmission system of an electrical
888 corporation or a delivery point designated by the electrical corporation for the purpose of
889 subsequent delivery to the electrical corporation; and
890 (b) the renewable energy attributes of the electricity are not traded, sold, transferred, or
891 otherwise used to satisfy another state's renewable energy program.
892 (8) "Qualifying zero carbon emissions generation":
893 (a) means a generation facility located within the geographic boundary of the Western
894 Electricity Coordinating Council that:
895 (i) becomes operational on or after January 1, 2008; and
896 (ii) does not produce carbon as a byproduct of the generation process;
897 (b) includes generation powered by nuclear fuel; and
898 (c) does not include renewable energy sources used to satisfy the requirement
899 established under Subsection 54-17-602 (1).
900 (9) "Renewable energy certificate" means a certificate issued under Section 54-17-603 .
901 (10) "Renewable energy source" means:
902 (a) an electric generation facility or generation capability or upgrade that becomes
903 operational on or after January 1, 1995 that derives its energy from one or more of the
904 following:
905 (i) wind energy;
906 (ii) solar photovoltaic and solar thermal energy;
907 (iii) wave, tidal, and ocean thermal energy;
908 (iv) except for combustion of wood that has been treated with chemical preservatives
909 such as creosote, pentachlorophenol or chromated copper arsenate, biomass and biomass
910 byproducts, including:
911 (A) organic waste;
912 (B) forest or rangeland woody debris from harvesting or thinning conducted to improve
913 forest or rangeland ecological health and to reduce wildfire risk;
914 (C) agricultural residues;
915 (D) dedicated energy crops; and
916 (E) landfill gas or biogas produced from organic matter, wastewater, anaerobic
917 digesters, or municipal solid waste;
918 (v) geothermal energy located outside the state;
919 (vi) waste gas and waste heat capture or recovery; or
920 (vii) efficiency upgrades to a hydroelectric facility, without regard to the date upon
921 which the facility became operational, if the upgrades become operational on or after January
922 1, 1995;
923 (b) any of the following:
924 (i) up to 50 average megawatts of electricity per year per electrical corporation from a
925 certified low-impact hydroelectric facility, without regard to the date upon which the facility
926 becomes operational, if the facility is certified as a low-impact hydroelectric facility on or after
927 January 1, 1995, by a national certification organization;
928 (ii) geothermal energy if located within the state, without regard to the date upon which
929 the facility becomes operational; or
930 (iii) hydroelectric energy if located within the state, without regard to the date upon
931 which the facility becomes operational;
932 (c) hydrogen gas derived from any source of energy described in Subsection (10)(a) or
933 (b);
934 (d) if an electric generation facility employs multiple energy sources, that portion of the
935 electricity generated that is attributable to energy sources described in Subsections (10)(a)
936 through (c); and
937 (e) any of the following located in the state and owned by a user of energy:
938 (i) a demand side management measure, as defined by Subsection 54-7-12.8 (1), with
939 the quantity of renewable energy certificates to which the user is entitled determined by the
940 equivalent energy saved by the measure;
941 (ii) a solar thermal system that reduces the consumption of fossil fuels, with the
942 quantity of renewable energy certificates to which the user is entitled determined by the
943 equivalent kilowatt-hours saved, except to the extent the commission determines otherwise
944 with respect to net-metered energy;
945 (iii) a solar photovoltaic system that reduces the consumption of fossil fuels with the
946 quantity of renewable energy certificates to which the user is entitled determined by the total
947 production of the system, except to the extent the commission determines otherwise with
948 respect to net-metered energy;
949 (iv) a hydroelectric or geothermal facility with the quantity of renewable energy
950 certificates to which the user is entitled determined by the total production of the facility,
951 except to the extent the commission determines otherwise with respect to net-metered energy;
952 (v) a waste gas or waste heat capture or recovery system, other than from a combined
953 cycle combustion turbine that does not use waste gas or waste heat, with the quantity of
954 renewable energy certificates to which the user is entitled determined by the total production of
955 the system, except to the extent the commission determines otherwise with respect to
956 net-metered energy; and
957 (vi) the station use of solar thermal energy, solar photovoltaic energy, hydroelectric
958 energy, geothermal energy, waste gas, or waste heat capture and recovery.
959 (11) "Unbundled renewable energy certificate" means a renewable energy certificate
960 associated with:
961 (a) qualifying electricity that is acquired by an electrical corporation or other person by
962 trade, purchase, or other transfer without acquiring the electricity for which the certificate was
963 issued; or
964 (b) activities listed in Subsection (10)(e).
965 Section 16. Section 54-17-602 is enacted to read:
966 54-17-602. Target amount of qualifying electricity -- Renewable energy certificate
967 -- Cost-effectiveness -- Cooperatives.
968 (1) (a) To the extent that it is cost effective to do so, beginning in 2025 the annual retail
969 electric sales in this state of each electrical corporation shall consist of qualifying electricity or
970 renewable energy certificates in an amount equal to at least 20% of adjusted retail electric
971 sales.
972 (b) The amount under Subsection (1)(a) is computed based upon adjusted retail electric
973 sales for the calendar year commencing 36 months before the first day of the year for which the
974 target calculated under Subsection (1)(a) applies.
975 (c) Notwithstanding Subsections (1)(a) and (b), an increase in the annual target from
976 one year to the next may not exceed the greater of:
977 (i) 17,500 megawatt-hours; or
978 (ii) 20% of the prior year's amount under Subsections (1)(a) and (b).
979 (2) (a) Cost-effectiveness under Subsection (1) for other than a cooperative association
980 is determined in comparison to other viable resource options using the criteria provided by
981 Subsection 54-17-201 (2)(c)(ii).
982 (b) For an electrical corporation that is a cooperative association, cost effectiveness is
983 determined using criteria applicable to the cooperative association's acquisition of a significant
984 energy resource established by the cooperative association's board of directors.
985 (3) This section does not require an electrical corporation to:
986 (a) substitute qualifying electricity for electricity from a generation source owned or
987 contractually committed, or from a contractual commitment for a power purchase;
988 (b) enter into any additional electric sales commitment or any other arrangement for the
989 sale or other disposition of electricity that is not already, or would not be, entered into by the
990 electrical corporation; or
991 (c) acquire qualifying electricity in excess of its adjusted retail electric sales.
992 (4) For the purpose of Subsection (1), an electrical corporation may combine the
993 following:
994 (a) qualifying electricity from a renewable energy source owned by the electrical
995 corporation;
996 (b) qualifying electricity acquired by the electrical corporation through trade, power
997 purchase, or other transfer; and
998 (c) a bundled or unbundled renewable energy certificate, including a banked renewable
999 energy certificate.
1000 (5) For an electrical corporation whose rates the commission regulates, the following
1001 rules concerning renewable energy certificates apply:
1002 (a) a banked renewable energy certificate with an older issuance date shall be used
1003 before any other banked renewable energy certificate issued at a later date is used; and
1004 (b) the total of all unbundled renewable energy certificates, including unbundled
1005 banked renewable energy certificates, may not exceed 20% of the amount of the annual target
1006 provided for in Subsection (1).
1007 (6) An electrical corporation that is a cooperative association may count towards
1008 Subsection (1) any of the following:
1009 (a) electric production allocated to this state from hydroelectric facilities becoming
1010 operational after December 31, 2007 if the facilities are located in any state in which the
1011 cooperative association, or a generation and transmission cooperative with which the
1012 cooperative association has a contract, provides electric service;
1013 (b) qualifying electricity generated or acquired or renewable energy certificates
1014 acquired for a program that permits a retail customer to voluntarily contribute to a renewable
1015 energy source; and
1016 (c) notwithstanding Subsection 54-17-601 (7), an unbundled renewable energy
1017 certificate purchased from a renewable energy source located outside the geographic boundary
1018 of the Western Electricity Coordinating Council if the electricity on which the unbundled
1019 renewable energy certificate is based would be considered qualifying electricity if the
1020 renewable energy source was located within the geographic boundary of the Western
1021 Electricity Coordinating Council.
1022 (7) The use of the renewable attributes associated with qualifying electricity to satisfy
1023 any federal renewable energy requirement does not preclude the electricity from being
1024 qualifying electricity for the purpose of this chapter.
1025 Section 17. Section 54-17-603 is enacted to read:
1026 54-17-603. Renewable energy certificate -- Issuance -- Use to satisfy other
1027 requirements.
1028 (1) The commission shall establish a process for issuance or recognition of a renewable
1029 energy certificate.
1030 (2) The commission process under Subsection (1) shall provide for the issuance,
1031 monitoring, accounting, transfer, and use of a renewable energy certificate, including in
1032 electronic form.
1033 (3) The commission:
1034 (a) may consult with another state or a federal agency and any regional system or
1035 trading program to fulfil Subsection (1); and
1036 (b) allow use of a renewable energy certificate that is issued, monitored, accounted for,
1037 or transferred by or through a regional system or trading program, including the Western
1038 Renewable Energy Generation Information system, to fulfil this part's provisions.
1039 (4) A renewable energy certificate shall be issued for:
1040 (a) qualifying electricity generated on and after January 1, 1995; and
1041 (b) the activities of an energy user described in Subsections 10-19-102 (11)(e) and
1042 54-17-601 (10)(e) on and after January 1, 1995.
1043 (5) The person requesting a renewable energy certificate shall affirm that the renewable
1044 energy attributes of the electricity have not been traded, sold, transferred, or otherwise used to
1045 satisfy another state's renewable energy requirements.
1046 (6) (a) For the purpose of satisfying Subsection 54-17-602 (1) and the issuance of a
1047 renewable energy certificate under this section, a renewable energy source located in this state
1048 that derives its energy from solar photovoltaic or solar thermal energy shall be credited for 2.4
1049 kilowatt-hours of qualifying electricity for each 1.0 kilowatt-hour generated.
1050 (b) Notwithstanding Subsection (6)(a), the acquisition or construction by an electrical
1051 corporation of a renewable energy source that derives its energy from solar photovoltaic or
1052 solar thermal energy shall comply with the cost-effectiveness criteria of Subsection
1053 54-17-201 (2)(c)(ii).
1054 (7) A renewable energy certificate issued under this section:
1055 (a) does not expire; and
1056 (b) may be banked.
1057 (8) The commission may recognize a renewable energy certificate that is issued,
1058 monitored, accounted for, or transferred by or through another state or a regional system or
1059 trading program, including the Western Renewable Energy Generation Information System, if
1060 the renewable energy certificate is for qualifying electricity.
1061 (9) A renewable energy certificate:
1062 (a) may be used only once to satisfy Subsection 54-17-602 (1);
1063 (b) may be used for the purpose of Subsection 54-17-602 (1) and the qualifying
1064 electricity on which the renewable energy certificate is based may be used to satisfy any federal
1065 renewable energy requirement; and
1066 (c) may not be used if it has been used to satisfy any other state's renewable energy
1067 requirement.
1068 (10) The commission shall establish procedures and reasonable rates permitting an
1069 electrical corporation that is a purchasing utility under Section 54-12-2 to acquire or retain a
1070 renewable energy certificate associated with the purchase of power from an independent energy
1071 producer.
1072 Section 18. Section 54-17-604 is enacted to read:
1073 54-17-604. Plans and reports.
1074 (1) An electrical corporation shall develop and maintain a plan for implementing
1075 Subsection 54-17-602 (1), consistent with the cost-effectiveness criteria of Subsection
1076 54-17-201 (2)(c)(ii).
1077 (2) (a) A progress report concerning a plan under Subsection (1) for other than a
1078 cooperative association shall be filed with the commission by January 1 of each of the years
1079 2010, 2015, 2020, and 2024.
1080 (b) For an electrical corporation that is a cooperative association, a progress report
1081 shall be filed with the cooperative association's board of directors by January 1 of each of the
1082 years 2010, 2015, 2020, and 2024.
1083 (3) The progress report under Subsection (2) shall contain:
1084 (a) the actual and projected amount of qualifying electricity through 2025;
1085 (b) the source of qualifying electricity;
1086 (c) (i) an analysis of the cost-effectiveness of renewable energy sources for other than a
1087 cooperative association; or
1088 (ii) an estimate of the cost of achieving the target for an electrical corporation that is a
1089 cooperative association;
1090 (d) a discussion of conditions impacting the renewable energy source and qualifying
1091 electricity markets;
1092 (e) any recommendation for a suggested legislative or program change; and
1093 (f) for other than a cooperative association, any other information requested by the
1094 commission or considered relevant by the electrical corporation.
1095 (4) The plan and progress report required by Subsections (1) and (2) may include
1096 procedures that will be used by the electrical corporation to identify and select any renewable
1097 energy resource and qualifying electricity that satisfy the criteria of Subsection
1098 54-17-201 (2)(c)(ii).
1099 (5) By July 1, 2026, each electrical corporation shall file a final progress report
1100 demonstrating:
1101 (a) how Subsection 54-17-602 (1) is satisfied for the year 2025; or
1102 (b) the reason why Subsection 54-17-602 (1) is not satisfied for the year 2025, if it is
1103 not satisfied.
1104 (6) By January 1 of each of the years 2011, 2016, 2021, and 2025, the Division of
1105 Public Utilities shall submit to the Legislature a report containing a summary of any progress
1106 report filed under Subsections (2) through (5).
1107 (7) The summary required by Subsection (6) shall include any recommendation for
1108 legislative changes.
1109 (8) (a) By July 1, 2027, the commission shall submit to the Legislature a report
1110 summarizing the final progress reports and recommending any legislative changes.
1111 (b) The 2027 summary may contain a recommendation to the Legislature concerning
1112 any action to be taken with respect to an electrical corporation that does not satisfy Subsection
1113 54-17-602 (1) for 2025.
1114 (c) The commission shall provide an opportunity for public comment and take
1115 evidence before recommending any action to be taken with respect to an electrical corporation
1116 that does not satisfy Subsection 54-17-602 (1) for 2025.
1117 (9) If a recommendation containing a penalty for failure to satisfy Subsection
1118 54-17-602 (1) is made under Subsection (8), the proposal shall require that any amount paid by
1119 an electrical corporation as a penalty be utilized to fund demand-side management for the retail
1120 customers of the electrical corporation paying the penalty.
1121 (10) A penalty may not be proposed under this section if an electrical corporation's
1122 failure to satisfy Subsection 54-17-602 (1) is due to:
1123 (a) a lack of cost-effective means to satisfy the requirement; or
1124 (b) force majeure.
1125 (11) By July 1, 2026, an electrical corporation that is a cooperative association shall
1126 file a final progress report demonstrating:
1127 (a) how Subsection 54-17-602 (1) is satisfied for the year 2025; or
1128 (b) the reason why Subsection 54-17-602 (1) is not satisfied for the year 2025 if it is not
1129 satisfied.
1130 (12) The plan and any progress report file under this section by an electrical
1131 corporation that is cooperative association shall be publicly available at the cooperative
1132 association's office or posted on the cooperative association's website.
1133 Section 19. Section 54-17-605 is enacted to read:
1134 54-17-605. Recovery of costs for renewable energy activities.
1135 (1) In accordance with other law, the commission shall include in the retail electric
1136 rates of an electrical corporation whose rates the commission regulates the state's share of any
1137 of the costs listed in Subsection (2) that are relevant to the proceeding in which the commission
1138 is considering the electrical corporation's rates:
1139 (a) if the costs are prudently incurred by the electrical corporation in connection with:
1140 (i) the acquisition of a renewable energy certificate;
1141 (ii) the acquisition of qualifying electricity for which a renewable energy certificate
1142 will be issued after the acquisition; and
1143 (iii) the acquisition, construction, and use of a renewable energy source; and
1144 (b) to the extent any qualifying electricity or renewable energy source under Subsection
1145 (1)(a) satisfies the cost-effectiveness criteria of Subsection 54-17-201 (2)(c)(ii).
1146 (2) The following are costs that may be recoverable under Subsection (1):
1147 (a) a cost of siting, acquisition of property rights, equipment, design, licensing,
1148 permitting, construction, owning, operating, or otherwise acquiring a renewable energy source
1149 and any associated asset, including transmission;
1150 (b) a cost to acquire qualifying electricity through trade, power purchase, or other
1151 transfer;
1152 (c) a cost to acquire a bundled or unbundled renewable energy certificate, if any net
1153 revenue from the sale of a renewable energy certificate allocable to this state is also included in
1154 rates;
1155 (d) a cost to interconnect a renewable energy source to the electrical corporation's
1156 transmission and distribution system;
1157 (e) a cost associated with using a physical or financial asset to integrate, firm, or shape
1158 a renewable energy source on a firm annual basis to meet a retail electricity need; and
1159 (f) any cost associated with transmission and delivery of qualifying electricity to a
1160 retail electricity consumer.
1161 (3) (a) The commission may allow an electrical corporation to use an adjustment
1162 mechanism or reasonable method other than a rate case under Sections 54-4-4 and 54-7-12 to
1163 allow recovery of costs identified in Subsection (2).
1164 (b) If the commission allows the use of an adjustment mechanism, both the costs and
1165 any associated benefit shall be reflected in the mechanism, to the extent practicable.
1166 (c) This Subsection (3) creates no presumption for or against the use of an adjustment
1167 mechanism.
1168 (4) (a) The commission may permit an electrical corporation to include in its retail
1169 electric rates the state's share of costs prudently incurred by the electrical corporation in
1170 connection with a renewable energy source, whether or not the renewable energy source
1171 ultimately becomes operational, including costs of:
1172 (i) siting;
1173 (ii) property acquisition;
1174 (iii) equipment;
1175 (iv) design;
1176 (v) licensing;
1177 (vi) permitting; and
1178 (vii) other reasonable items related to the renewable energy source.
1179 (b) Subsection (4)(a) creates no presumption concerning the prudence or recoverability
1180 of the costs identified.
1181 (c) To the extent deferral is consistent with other applicable law, the commission may
1182 allow an electrical corporation to defer costs recoverable under Subsection (4)(a) until the
1183 recovery of the deferred costs can be considered in a rate proceeding or an adjustment
1184 mechanism created under Subsection (3).
1185 (d) An application to defer costs shall be filed within 60 days after the day on which
1186 the electrical corporation determines that the renewable energy source project is impaired under
1187 generally accepted accounting principles and will not become operational.
1188 (e) Notwithstanding the opportunity to defer costs under Subsection (4)(c), a cost
1189 incurred by an electrical corporation for siting, property acquisition, equipment, design,
1190 licensing, and permitting of a renewable energy source that the electrical corporation proposes
1191 to construct shall be included in the electrical corporation's project costs for the purpose of
1192 evaluating the project's cost-effectiveness.
1193 (f) A deferred cost under Subsection (4)(a) may not be added to, or otherwise
1194 considered in the evaluation of, the cost of a project proposed by any person other than the
1195 electrical corporation for the purpose of evaluating that person's proposal.
1196 Section 20. Section 54-17-606 is enacted to read:
1197 54-17-606. Commission rules.
1198 The commission shall make rules as necessary to implement this part.
1199 Section 21. Section 54-17-607 is enacted to read:
1200 54-17-607. Procedure and appeals under this chapter.
1201 (1) The governing authority, as defined in Section 54-15-102 , has primary jurisdiction
1202 concerning issues of interpretation, implementation, and administration of this chapter.
1203 (2) An appeal of a commission order under this chapter is governed by Chapter 7,
1204 Hearings, Practice, and Procedure.
1205 Section 22. Section 54-17-701 is enacted to read:
1206
1207 54-17-701. Rules for carbon capture and geological storage.
1208 (1) By January 1, 2011, the Division of Water Quality and the Division of Air Quality,
1209 on behalf of the Board of Water Quality and the Board of Air Quality, respectively, in
1210 collaboration with the commission and the Division of Oil, Gas and Mining and the Utah
1211 Geological Survey, shall present recommended rules to the Legislature's Administrative Rules
1212 Review Committee for the following in connection with carbon capture and accompanying
1213 geological sequestration of captured carbon:
1214 (a) site characterization approval;
1215 (b) geomechanical, geochemical, and hydrogeological simulation;
1216 (c) risk assessment;
1217 (d) mitigation and remediation protocols;
1218 (e) issuance of permits for test, injection, and monitoring wells;
1219 (f) specifications for the drilling, construction, and maintenance of wells;
1220 (g) issues concerning ownership of subsurface rights and pore space;
1221 (h) allowed composition of injected matter;
1222 (i) testing, monitoring, measurement, and verification for the entirety of the carbon
1223 capture and geologic sequestration chain of operations, from the point of capture of the carbon
1224 dioxide to the sequestration site;
1225 (j) closure and decommissioning procedure;
1226 (k) short- and long-term liability and indemnification for sequestration sites;
1227 (l) conversion of enhanced oil recovery operations to carbon dioxide geological
1228 sequestration sites; and
1229 (m) other issues as identified.
1230 (2) The entities listed in Subsection (1) shall report to the Legislature's Administrative
1231 Rules Review Committee any proposals for additional statutory changes needed to implement
1232 rules contemplated under Subsection (1).
1233 (3) On or before July 1, 2009, the entities listed in Subsection (1) shall submit to the
1234 Legislature's Public Utilities and Technology and Natural Resources, Agriculture, and
1235 Environment Interim Committees a progress report on the development of the recommended
1236 rules required by this part.
1237 (4) The recommended rules developed under this section apply to the injection of
1238 carbon dioxide and other associated injectants in allowable types of geological formations for
1239 the purpose of reducing emissions to the atmosphere through long-term geological
1240 sequestration as required by law or undertaken voluntarily or for subsequent beneficial reuse.
1241 (5) The recommended rules developed under this section do not apply to the injection
1242 of fluids through the use of Class II injection wells as defined in 40 C.F.R. 144.69(b) for the
1243 purpose of enhanced hydrocarbon recovery.
1244 (6) Rules recommended under this section shall:
1245 (a) ensure that adequate health and safety standards are met;
1246 (b) minimize the risk of unacceptable leakage from the injection well and injection
1247 zone for carbon capture and geologic sequestration; and
1248 (c) provide adequate regulatory oversight and public information concerning carbon
1249 capture and geologic sequestration.
1250 Section 23. Effective date.
1251 If approved by two-thirds of all the members elected to each house, this bill takes effect
1252 upon approval by the governor, or the day following the constitutional time limit of Utah
1253 Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
1254 the date of veto override.
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