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H.B. 440






Chief Sponsor: F. Jay Seegmiller

Senate Sponsor: ____________

             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Public Service Commission's (PSC) powers to regulate a nuclear
             11      power corporation and the state energy policy.
             12      Highlighted Provisions:
             13          This bill:
             14          .    requires a nuclear power corporation to obtain from the PSC a certificate of
             15      convenience and necessity before constructing or operating a nuclear power plant;
             16          .    authorizes the PSC to issue a certificate of convenience and necessity to a nuclear
             17      power corporation only if:
             18              .    there is a federally licensed facility in the United States with adequate capacity
             19      to dispose of the nuclear power plant's high-level nuclear waste; and
             20              .    the proposed nuclear power plant is economically advantageous to ratepayers;
             21          .    amends the state energy policy to promote the responsible development of nuclear
             22      power generation; and
             23          .    makes technical corrections.
             24      Monies Appropriated in this Bill:
             25          None
             26      Other Special Clauses:
             27          None

             28      Utah Code Sections Affected:
             29      AMENDS:
             30          54-4-25, as last amended by Laws of Utah 2005, Chapter 11
             31          63M-4-301, as renumbered and amended by Laws of Utah 2008, Chapter 382
             33      Be it enacted by the Legislature of the state of Utah:
             34          Section 1. Section 54-4-25 is amended to read:
             35           54-4-25. Certificate of convenience and necessity prerequisite to construction and
             36      operation -- Electrical suppliers.
             37          (1) As used in this section:
             38          (a) "Nuclear power corporation" means a corporation and person, their lessees,
             39      trustees, and receivers, owning, controlling, operating, or managing a nuclear power plant for
             40      public service or for the selling or furnishing of nuclear power to a consumer for domestic,
             41      commercial, or industrial use.
             42          (b) "Nuclear power plant" means a nuclear-fired electric generating facility designed
             43      for nominal operation at a capacity of 100 megawatts or more.
             44          (c) "Public utility corporation" means:
             45          (i) a public utility as defined in Section 54-2-1 ; and
             46          (ii) a nuclear power corporation.
             47          [(1)] (2) Except as provided in Section 11-13-304 , a gas corporation, electric
             48      corporation, telephone corporation, telegraph corporation, heat corporation, water corporation,
             49      nuclear power corporation, or sewerage corporation may not establish, or begin construction or
             50      operation of a line, route, plant, or system or of any extension of a line, route, plant, or system,
             51      without having first obtained from the commission a certificate that present or future public
             52      convenience and necessity does or will require the construction.
             53          [(2)] (3) This section may not be construed to require any public utility corporation to
             54      secure a certificate for an extension:
             55          (a) within any city or town within which it has lawfully commenced operations;
             56          (b) into territory, either within or without a city or town, contiguous to its line, plant, or
             57      system that is not served by a public utility corporation of like character; or
             58          (c) within or to territory already served by it, necessary in the ordinary course of its

             59      business.
             60          [(3)] (4) If any public utility corporation in constructing or extending its line, plant, or
             61      system interferes or may interfere with the operation of the line, plant, or system of any other
             62      public utility corporation already constructed, the commission, on complaint of the public
             63      utility corporation claiming to be injuriously affected, may, after a hearing, make an order and
             64      prescribe the terms and conditions for the location of the lines, plants, or systems affected as
             65      the commission determines are just and reasonable.
             66          [(4)] (5) (a) (i) Each applicant for a certificate shall file in the office of the commission
             67      evidence as required by the commission to show that the applicant has received or is in the
             68      process of obtaining the required consent, franchise, or permit of the proper county, city,
             69      municipal, or other public authority.
             70          (ii) If the applicant is in the process of obtaining the required consent, franchise, or
             71      permit, a certificate shall be conditioned upon:
             72          (A) receipt of the consent, franchise, or permit within the time period the commission
             73      may direct; and
             74          (B) the filing of such evidence of the receipt of the consent, franchise, or permit as the
             75      commission may require.
             76          (b) Each applicant, except an interlocal entity defined in Section 11-13-103 , shall also
             77      file in the office of the commission a statement that any proposed line, plant, or system will not
             78      conflict with or adversely affect the operations of any existing certificated fixed public utility
             79      corporation which supplies the same product or service to the public and that it will not
             80      constitute an extension into the territory certificated to the existing fixed public utility
             81      corporation.
             82          (c) The commission may, after a hearing:
             83          (i) issue the certificate as requested;
             84          (ii) refuse to issue the certificate; or
             85          (iii) issue the certificate for the construction of a portion only of the contemplated line,
             86      plant, or system, or extension thereof, or for the partial exercise only of the right or privilege.
             87          (d) The commission may attach to the exercise of the rights granted by the certificate
             88      the terms and conditions as in its judgment public convenience and necessity may require.
             89          (e) (i) If a public utility corporation desires to exercise a right or privilege under a

             90      franchise or permit which it contemplates securing but which has not yet been granted to it, the
             91      public utility corporation may apply to the commission for an order preliminary to the issue of
             92      the certificate.
             93          (ii) The commission may make an order declaring that it will upon application, under
             94      rules and regulations as it may prescribe, issue the desired certificate upon terms and conditions
             95      as it may designate after the public utility corporation has obtained the contemplated franchise
             96      or permit.
             97          (iii) Upon presentation to the commission of evidence satisfactory to it that the
             98      franchise or permit has been secured by the public utility corporation, the commission shall
             99      issue the certificate.
             100          (6) Subject to the provisions of this section, the commission may not certify a nuclear
             101      power corporation unless the commission finds that:
             102          (a) there is a federally licensed facility in the United States with adequate capacity to
             103      dispose of high-level nuclear waste, as defined in Section 19-3-102 , from the nuclear power
             104      plant; and
             105          (b) the proposed nuclear power plant is economically advantageous to ratepayers based
             106      upon:
             107          (i) a comparison to other feasible power alternatives;
             108          (ii) the existence of a reliable and adequate nuclear fuel supply;
             109          (iii) the costs for construction, operation, and decommissioning of the nuclear power
             110      plant and nuclear waste disposal; and
             111          (iv) facts relevant to the economic viability of the nuclear power plant.
             112          [(5)] (7) (a) Any supplier of electricity which is brought under the jurisdiction and
             113      regulation of the Public Service Commission by this title may file with the commission an
             114      application for a certificate of convenience and necessity, giving the applicant the exclusive
             115      right to serve the customers it is serving in the area in which it is serving at the time of this
             116      filing, subject to the existing right of any other electrical corporation to likewise serve its
             117      customers in existence in the area at the time.
             118          (b) The application shall be prima facie evidence of the applicant's rights to a
             119      certificate, and the certificate shall be issued within 30 days after the filing, pending which,
             120      however, the applicant shall have the right to continue its operations.

             121          (c) Upon good cause shown to the commission by anyone protesting the issuance of
             122      such a certificate, or upon the commission's own motion, a public hearing may be held to
             123      determine if the applicant has sufficient finances, equipment, and plant to continue its existing
             124      service. The commission shall issue its order within 45 days after the hearing according to the
             125      proof submitted at the hearing.
             126          (d) Every electrical corporation, save and except those applying for a certificate to
             127      serve only the customers served by applicant on May 11, 1965, applying for a certificate shall
             128      have established a ratio of debt capital to equity capital or will within a reasonable period of
             129      time establish a ratio of debt capital to equity capital which the commission shall find renders
             130      the electrical corporation financially stable and which financing shall be found to be in the
             131      public interest.
             132          [(6)] (8) Nothing in this section affects the existing rights of municipalities.
             133          [(7)] (9) The commission shall consolidate an action filed under Chapter 17, Part 3,
             134      Resource Plans and Significant Energy Resource Approval or Part 4, Voluntary Request for
             135      Resource Decision Review, with a proceeding under this section if:
             136          (a) a public utility corporation is required to obtain a certificate of convenience and
             137      necessity pursuant to this section; and
             138          (b) the public utility corporation files an action under Chapter 17, Part 3, Resource
             139      Plans and Significant Energy Resource Approval or Part 4, Voluntary Request for Resource
             140      Decision Review.
             141          Section 2. Section 63M-4-301 is amended to read:
             142           63M-4-301. State energy policy.
             143          (1) It is the policy of the state that:
             144          (a) Utah have adequate, reliable, affordable, sustainable, and clean energy resources;
             145          (b) Utah will promote the development of:
             146          (i) nonrenewable energy resources, including natural gas, coal, oil, oil shale, and tar
             147      sands; and
             148          (ii) renewable energy resources, including geothermal, solar, wind, biomass, biodiesel,
             149      hydroelectric, and ethanol;
             150          (c) Utah will promote the study and responsible development of nuclear power
             151      generation;

             152          (d) Utah will promote the development of resources and infrastructure sufficient to
             153      meet the state's growing demand, while contributing to the regional and national energy supply,
             154      thus reducing dependence on international energy sources;
             155          (e) Utah will allow market forces to drive prudent use of energy resources, although
             156      incentives and other methods may be used to ensure the state's optimal development and use of
             157      energy resources in the short- and long-term;
             158          (f) Utah will pursue energy conservation, energy efficiency, and environmental quality;
             159          (g) (i) state regulatory processes should be streamlined to balance economic costs with
             160      the level of review necessary to ensure protection of the state's various interests; and
             161          (ii) where federal action is required, Utah will encourage expedited federal action and
             162      will collaborate with federal agencies to expedite review;
             163          (h) Utah will maintain an environment that provides for stable consumer prices that are
             164      as low as possible while providing producers and suppliers a fair return on investment,
             165      recognizing that:
             166          (i) economic prosperity is linked to the availability, reliability, and affordability of
             167      consumer energy supplies; and
             168          (ii) investment will occur only when adequate financial returns can be realized; and
             169          (i) Utah will promote training and education programs focused on developing a
             170      comprehensive understanding of energy, including programs addressing:
             171          (i) energy conservation;
             172          (ii) energy efficiency;
             173          (iii) supply and demand; and
             174          (iv) energy related workforce development.
             175          (2) State agencies are encouraged to conduct agency activities consistent with
             176      Subsection (1).
             177          (3) A person may not file suit to challenge a state agency's action that is inconsistent
             178      with Subsection (1).

Legislative Review Note
    as of 2-10-09 7:23 AM

Office of Legislative Research and General Counsel

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