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[Introduced][Status][Bill Documents][Fiscal Note] [Bills Directory]

H.B. 145 Enrolled

             1     

RENEWABLE ENERGY FINANCING PROVISIONS

             2     
2010 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Bradley G. Last

             5     
Senate Sponsor: Stephen H. Urquhart

             6      Cosponsor:Jackie Biskupski              7     
             8      LONG TITLE
             9      General Description:
             10          This bill addresses provisions related to net metering programs and public utilities.
             11      Highlighted Provisions:
             12          This bill:
             13          .    excludes from the definition of a "public utility" an independent energy producer
             14      that provides service to a customer on the real property where an independent
             15      power production facility is located under certain circumstances;
             16          .    changes definitions to provide that a facility used to supply energy for a specific
             17      customer may qualify as a customer generation system under Title 54, Chapter 15,
             18      Net Metering of Electricity;
             19          .    provides for actions by the Public Service Commission; and
             20          .    makes technical changes.
             21      Monies Appropriated in this Bill:
             22          None
             23      Other Special Clauses:
             24          This bill provides an immediate effective date.
             25      Utah Code Sections Affected:
             26      AMENDS:
             27          54-2-1, as last amended by Laws of Utah 2008, Chapter 374
             28          54-15-102, as last amended by Laws of Utah 2008, Chapter 244
             29      ENACTS:


             30          54-15-108, Utah Code Annotated 1953
             31     
             32      Be it enacted by the Legislature of the state of Utah:
             33          Section 1. Section 54-2-1 is amended to read:
             34           54-2-1. Definitions.
             35          As used in this title:
             36          (1) "Avoided costs" means the incremental costs to an electrical corporation of electric
             37      energy or capacity or both [which] that, due to the purchase of electric energy or capacity or
             38      both from small power production or cogeneration facilities, the electrical corporation would
             39      not have to generate itself or purchase from another electrical corporation.
             40          (2) "Cogeneration facility":
             41          (a) means a facility [which] that produces:
             42          (i) electric energy; and
             43          (ii) steam or forms of useful energy, including heat, [which] that are used for
             44      industrial, commercial, heating, or cooling purposes; and
             45          (b) is a qualifying cogeneration facility under federal law.
             46          (3) "Commission" means the Public Service Commission of Utah.
             47          (4) "Commissioner" means a member of the commission.
             48          (5) (a) "Corporation" includes an association[,] and a joint stock company having any
             49      powers or privileges not possessed by individuals or partnerships.
             50          (b) "Corporation" does not include towns, cities, counties, conservancy districts,
             51      improvement districts, or other governmental units created or organized under any general or
             52      special law of this state.
             53          (6) "Distribution electrical cooperative" includes an electrical corporation that:
             54          (a) is a cooperative;
             55          (b) conducts a business that includes the retail distribution of electricity the
             56      cooperative purchases or generates for the cooperative's members; and
             57          (c) is required to allocate or distribute savings in excess of additions to reserves and


             58      surplus on the basis of patronage to the cooperative's:
             59          (i) members; or
             60          (ii) patrons.
             61          (7) "Electrical corporation" includes every corporation, cooperative association, and
             62      person, their lessees, trustees, and receivers, owning, controlling, operating, or managing any
             63      electric plant, or in any way furnishing electric power for public service or to its consumers or
             64      members for domestic, commercial, or industrial use, within this state, except independent
             65      energy producers, and except where electricity is generated on or distributed by the producer
             66      solely for the producer's own use, or the use of the producer's tenants, or for the use of
             67      members of an association of unit owners formed under Title 57, Chapter 8, Condominium
             68      Ownership Act, and not for sale to the public generally.
             69          (8) "Electric plant" includes all real estate, fixtures, and personal property owned,
             70      controlled, operated, or managed in connection with or to facilitate the production, generation,
             71      transmission, delivery, or furnishing of electricity for light, heat, or power, and all conduits,
             72      ducts, or other devices, materials, apparatus, or property for containing, holding, or carrying
             73      conductors used or to be used for the transmission of electricity for light, heat, or power.
             74          (9) "Gas corporation" includes every corporation and person, their lessees, trustees,
             75      and receivers, owning, controlling, operating, or managing any gas plant for public service
             76      within this state or for the selling or furnishing of natural gas to any consumer or consumers
             77      within the state for domestic, commercial, or industrial use, except in the situation that:
             78          (a) gas is made or produced on, and distributed by the maker or producer through,
             79      private property:
             80          (i) solely for the maker's or producer's own use or the use of the maker's or producer's
             81      tenants; and
             82          (ii) not for sale to others;
             83          (b) gas is compressed on private property solely for the owner's own use or the use of
             84      the owner's employees as a motor vehicle fuel; or
             85          (c) gas is compressed by a retailer of motor vehicle fuel on the retailer's property solely


             86      for sale as a motor vehicle fuel.
             87          (10) "Gas plant" includes all real estate, fixtures, and personal property owned,
             88      controlled, operated, or managed in connection with or to facilitate the production, generation,
             89      transmission, delivery, or furnishing of gas, natural or manufactured, for light, heat, or power.
             90          (11) "Heat corporation" includes every corporation and person, their lessees, trustees,
             91      and receivers, owning, controlling, operating, or managing any heating plant for public service
             92      within this state.
             93          (12) (a) "Heating plant" includes all real estate, fixtures, machinery, appliances, and
             94      personal property controlled, operated, or managed in connection with or to facilitate the
             95      production, generation, transmission, delivery, or furnishing of artificial heat.
             96          (b) "Heating plant" does not include either small power production facilities or
             97      cogeneration facilities.
             98          (13) "Independent energy producer" means every electrical corporation, person,
             99      corporation, or government entity, their lessees, trustees, or receivers, that own, operate,
             100      control, or manage an independent power production or cogeneration facility.
             101          (14) "Independent power production facility" means a facility that:
             102          (a) produces electric energy solely by the use, as a primary energy source, of biomass,
             103      waste, a renewable resource, a geothermal resource, or any combination of the preceding
             104      sources; or
             105          (b) is a qualifying power production facility.
             106          (15) "Private telecommunications system" includes all facilities for the transmission of
             107      signs, signals, writing, images, sounds, messages, data, or other information of any nature by
             108      wire, radio, lightwaves, or other electromagnetic means, excluding mobile radio facilities, that
             109      are owned, controlled, operated, or managed by a corporation or person, including their
             110      lessees, trustees, receivers, or trustees appointed by any court, for the use of that corporation or
             111      person and not for the shared use with or resale to any other corporation or person on a regular
             112      basis.
             113          (16) (a) "Public utility" includes every railroad corporation, gas corporation, electrical


             114      corporation, distribution electrical cooperative, wholesale electrical cooperative, telephone
             115      corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation,
             116      and independent energy producer not described in Subsection (16)(d), where the service is
             117      performed for, or the commodity delivered to, the public generally, or in the case of a gas
             118      corporation or electrical corporation where the gas or electricity is sold or furnished to any
             119      member or consumers within the state for domestic, commercial, or industrial use.
             120          (b) (i) If any railroad corporation, gas corporation, electrical corporation, telephone
             121      corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation,
             122      or independent energy producer not described in Subsection (16)(d), performs a service for or
             123      delivers a commodity to the public, it is considered to be a public utility, subject to the
             124      jurisdiction and regulation of the commission and this title.
             125          (ii) If a gas corporation, independent energy producer not described in Subsection
             126      (16)(d), or electrical corporation sells or furnishes gas or electricity to any member or
             127      consumers within the state, for domestic, commercial, or industrial use, for which any
             128      compensation or payment is received, it is considered to be a public utility, subject to the
             129      jurisdiction and regulation of the commission and this title.
             130          (c) Any corporation or person not engaged in business exclusively as a public utility as
             131      defined in this section is governed by this title in respect only to the public utility owned,
             132      controlled, operated, or managed by the corporation or person, and not in respect to any other
             133      business or pursuit.
             134          (d) An independent energy producer is exempt from the jurisdiction and regulations of
             135      the commission with respect to an independent power production facility if it meets the
             136      requirements of Subsection (16)(d)(i), (ii), [or] (iii), or (iv), or any combination of these:
             137          (i) the commodity or service is produced or delivered, or both, by an independent
             138      energy producer solely for the uses exempted in Subsection (7) or for the use of state-owned
             139      facilities;
             140          (ii) the commodity or service is sold by an independent energy producer solely to an
             141      electrical corporation or other wholesale purchaser; [or]


             142          (iii) (A) the commodity or service produced or delivered by the independent energy
             143      producer is delivered to an entity [which] that controls, is controlled by, or affiliated with the
             144      independent energy producer or to a user located on real property managed or controlled by the
             145      independent energy producer; and
             146          (B) the real property on which the service or commodity is used is contiguous to real
             147      property which is owned or controlled by the independent energy producer. Parcels of real
             148      property separated solely by public roads or easements for public roads shall be considered as
             149      contiguous for purposes of this Subsection (16)[.]; or
             150          (iv) the independent energy producer:
             151          (A) supplies energy for direct consumption by a customer that is:
             152          (I) a county, municipality, city, town, other political subdivision, local district, special
             153      service district, state institution of higher education, school district, charter school, or any
             154      entity within the state system of public education; or
             155          (II) an entity qualifying as a charitable organization under 26 U.S.C. Sec. 501(c)(3)
             156      operated for religious, charitable, or educational purposes that is exempt from federal income
             157      tax and able to demonstrate its tax-exempt status;
             158          (B) supplies energy to the customer through use of a customer generation system, as
             159      defined in Section 54-15-102 , for use on the real property where the customer generation
             160      system is located;
             161          (C) supplies energy using a customer generation system designed to supply the lesser
             162      of:
             163          (I) no more than 90% of the average annual consumption of electricity by the customer
             164      at that site, based on an annualized billing period; or
             165          (II) the maximum size allowable under net metering provisions, defined in Section
             166      54-15-102 ;
             167          (D) notifies the customer before installing the customer generation system of:
             168          (I) all costs the customer is required to pay for the customer generation system,
             169      including any interconnection costs; and


             170          (II) the potential for future changes in amounts paid by the customer for energy
             171      received from the public utility and the possibility of changes to the customer fees or charges
             172      to the customer associated with net metering and generation;
             173          (E) enters into and performs in accordance with an interconnection agreement with a
             174      public utility providing retail electric service where the real property on which the customer
             175      generation system is located, with the rates, terms, and conditions of the retail service and
             176      interconnection agreement subject to approval by the governing authority of the public utility,
             177      as defined in Subsection 54-15-102 (8); and
             178          (F) installs the relevant customer generation system by December 31, 2015.
             179          (e) Any person or corporation defined as an electrical corporation or public utility
             180      under this section may continue to serve its existing customers subject to any order or future
             181      determination of the commission in reference to the right to serve those customers.
             182          (f) (i) "Public utility" does not include any person that is otherwise considered a public
             183      utility under this Subsection (16) solely because of that person's ownership of an interest in an
             184      electric plant, cogeneration facility, or small power production facility in this state if all of the
             185      following conditions are met:
             186          (A) the ownership interest in the electric plant, cogeneration facility, or small power
             187      production facility is leased to:
             188          (I) a public utility, and that lease has been approved by the commission;
             189          (II) a person or government entity that is exempt from commission regulation as a
             190      public utility; or
             191          (III) a combination of Subsections (16)(f)(i)(A)(I) and (II);
             192          (B) the lessor of the ownership interest identified in Subsection (16)(f)(i)(A) is:
             193          (I) primarily engaged in a business other than the business of a public utility; or
             194          (II) a person whose total equity or beneficial ownership is held directly or indirectly by
             195      another person engaged in a business other than the business of a public utility; and
             196          (C) the rent reserved under the lease does not include any amount based on or
             197      determined by revenues or income of the lessee.


             198          (ii) Any person that is exempt from classification as a public utility under Subsection
             199      (16)(f)(i) shall continue to be so exempt from classification following termination of the
             200      lessee's right to possession or use of the electric plant for so long as the former lessor does not
             201      operate the electric plant or sell electricity from the electric plant. If the former lessor operates
             202      the electric plant or sells electricity, the former lessor shall continue to be so exempt for a
             203      period of 90 days following termination, or for a longer period that is ordered by the
             204      commission. This period may not exceed one year. A change in rates that would otherwise
             205      require commission approval may not be effective during the 90-day or extended period
             206      without commission approval.
             207          (g) "Public utility" does not include any person that provides financing for, but has no
             208      ownership interest in an electric plant, small power production facility, or cogeneration
             209      facility. In the event of a foreclosure in which an ownership interest in an electric plant, small
             210      power production facility, or cogeneration facility is transferred to a third-party financer of an
             211      electric plant, small power production facility, or cogeneration facility, then that third-party
             212      financer is exempt from classification as a public utility for 90 days following the foreclosure,
             213      or for a longer period that is ordered by the commission. This period may not exceed one year.
             214          (h) (i) The distribution or transportation of natural gas for use as a motor vehicle fuel
             215      does not cause the distributor or transporter to be a "public utility," unless the commission,
             216      after notice and a public hearing, determines by rule that it is in the public interest to regulate
             217      the distributers or transporters, but the retail sale alone of compressed natural gas as a motor
             218      vehicle fuel may not cause the seller to be a "public utility."
             219          (ii) In determining whether it is in the public interest to regulate the distributors or
             220      transporters, the commission shall consider, among other things, the impact of the regulation
             221      on the availability and price of natural gas for use as a motor fuel.
             222          (17) "Purchasing utility" means any electrical corporation that is required to purchase
             223      electricity from small power production or cogeneration facilities pursuant to the Public Utility
             224      Regulatory Policies Act, 16 U.S.C. Section 824a-3.
             225          (18) "Qualifying power producer" means a corporation, cooperative association, or


             226      person, or the lessee, trustee, and receiver of the corporation, cooperative association, or
             227      person, who owns, controls, operates, or manages any qualifying power production facility or
             228      cogeneration facility.
             229          (19) "Qualifying power production facility" means a facility that:
             230          (a) produces electrical energy solely by the use, as a primary energy source, of
             231      biomass, waste, a renewable resource, a geothermal resource, or any combination of the
             232      preceding sources;
             233          (b) has a power production capacity that, together with any other facilities located at
             234      the same site, is no greater than 80 megawatts; and
             235          (c) is a qualifying small power production facility under federal law.
             236          (20) "Railroad" includes every commercial, interurban, and other railway, other than a
             237      street railway, and each branch or extension of a railway, by any power operated, together with
             238      all tracks, bridges, trestles, rights-of-way, subways, tunnels, stations, depots, union depots,
             239      yards, grounds, terminals, terminal facilities, structures, and equipment, and all other real
             240      estate, fixtures, and personal property of every kind used in connection with a railway owned,
             241      controlled, operated, or managed for public service in the transportation of persons or
             242      property.
             243          (21) "Railroad corporation" includes every corporation and person, their lessees,
             244      trustees, and receivers, owning, controlling, operating, or managing any railroad for public
             245      service within this state.
             246          (22) (a) "Sewerage corporation" includes every corporation and person, their lessees,
             247      trustees, and receivers, owning, controlling, operating, or managing any sewerage system for
             248      public service within this state.
             249          (b) "Sewerage corporation" does not include private sewerage companies engaged in
             250      disposing of sewage only for their stockholders, or towns, cities, counties, conservancy
             251      districts, improvement districts, or other governmental units created or organized under any
             252      general or special law of this state.
             253          (23) "Telegraph corporation" includes every corporation and person, their lessees,


             254      trustees, and receivers, owning, controlling, operating, or managing any telegraph line for
             255      public service within this state.
             256          (24) "Telegraph line" includes all conduits, ducts, poles, wires, cables, instruments,
             257      and appliances, and all other real estate, fixtures, and personal property owned, controlled,
             258      operated, or managed in connection with or to facilitate communication by telegraph, whether
             259      that communication be had with or without the use of transmission wires.
             260          (25) (a) "Telephone corporation" means any corporation or person, and their lessees,
             261      trustee, receivers, or trustees appointed by any court, who owns, controls, operates, manages,
             262      or resells a public telecommunications service as defined in Section 54-8b-2 .
             263          (b) "Telephone corporation" does not mean a corporation, partnership, or firm
             264      providing:
             265          (i) intrastate telephone service offered by a provider of cellular, personal
             266      communication systems (PCS), or other commercial mobile radio service as defined in 47
             267      U.S.C. Sec. 332 that has been issued a covering license by the Federal Communications
             268      Commission;
             269          (ii) Internet service; or
             270          (iii) resold intrastate toll service.
             271          (26) "Telephone line" includes all conduits, ducts, poles, wires, cables, instruments,
             272      and appliances, and all other real estate, fixtures, and personal property owned, controlled,
             273      operated, or managed in connection with or to facilitate communication by telephone whether
             274      that communication is had with or without the use of transmission wires.
             275          (27) "Transportation of persons" includes every service in connection with or
             276      incidental to the safety, comfort, or convenience of the person transported, and the receipt,
             277      carriage, and delivery of that person and that person's baggage.
             278          (28) "Transportation of property" includes every service in connection with or
             279      incidental to the transportation of property, including in particular its receipt, delivery,
             280      elevation, transfer, switching, carriage, ventilation, refrigeration, icing, dunnage, storage, and
             281      hauling, and the transmission of credit by express companies.


             282          (29) "Water corporation" includes every corporation and person, their lessees, trustees,
             283      and receivers, owning, controlling, operating, or managing any water system for public service
             284      within this state. It does not include private irrigation companies engaged in distributing
             285      water only to their stockholders, or towns, cities, counties, water conservancy districts,
             286      improvement districts, or other governmental units created or organized under any general or
             287      special law of this state.
             288          (30) (a) "Water system" includes all reservoirs, tunnels, shafts, dams, dikes, headgates,
             289      pipes, flumes, canals, structures, and appliances, and all other real estate, fixtures, and
             290      personal property owned, controlled, operated, or managed in connection with or to facilitate
             291      the diversion, development, storage, supply, distribution, sale, furnishing, carriage,
             292      appointment, apportionment, or measurement of water for power, fire protection, irrigation,
             293      reclamation, or manufacturing, or for municipal, domestic, or other beneficial use.
             294          (b) "Water system" does not include private irrigation companies engaged in
             295      distributing water only to their stockholders.
             296          (31) "Wholesale electrical cooperative" includes every electrical corporation that is:
             297          (a) in the business of the wholesale distribution of electricity it has purchased or
             298      generated to its members and the public; and
             299          (b) required to distribute or allocate savings in excess of additions to reserves and
             300      surplus to members or patrons on the basis of patronage.
             301          Section 2. Section 54-15-102 is amended to read:
             302           54-15-102. Definitions.
             303          As used in this chapter:
             304          (1) "Annualized billing period" means a 12-month billing cycle beginning on April 1
             305      of one year and ending on March 31 of the following year.
             306          (2) "Customer-generated electricity" means electricity that:
             307          (a) is generated by a customer generation system for a customer participating in a net
             308      metering program [from a customer generation system];
             309          (b) exceeds the electricity the customer needs for the customer's own use; and


             310          (c) is supplied to the electrical corporation administering the net metering program.
             311          (3) "Customer generation system":
             312          (a) means [a customer-owned or customer-leased] an eligible facility[, operated by the
             313      customer,] that is used to supply energy to or for a specific customer that:
             314          (i) has a generating capacity of:
             315          (A) not more than 25 kilowatts for a residential facility; or
             316          (B) not more than 2 megawatts for a non-residential facility, unless the governing
             317      authority approves a greater generation capacity;
             318          (ii) is located on, or adjacent to, the premises of the electrical corporation's customer,
             319      subject to the electrical corporation's service requirements;
             320          (iii) operates in parallel and is interconnected with the electrical corporation's
             321      distribution facilities;
             322          (iv) is intended primarily to offset part or all of the customer's requirements for
             323      electricity; and
             324          (v) is controlled by an inverter or switchgear; and
             325          (b) includes an electric generator and its accompanying equipment package.
             326          (4) "Eligible facility" means a facility that uses energy derived from one of the
             327      following to generate electricity:
             328          (a) solar photovoltaic and solar thermal energy;
             329          (b) wind energy;
             330          (c) hydrogen;
             331          (d) organic waste;
             332          (e) hydroelectric energy;
             333          (f) waste gas and waste heat capture or recovery;
             334          (g) biomass and biomass byproducts, except for the combustion of:
             335          (i) wood that has been treated with chemical preservatives such as creosote,
             336      pentachlorophenol, or chromated copper arsenate; or
             337          (ii) municipal waste in a solid form;


             338          (h) forest or rangeland woody debris from harvesting or thinning conducted to
             339      improve forest or rangeland ecological health and to reduce wildfire risk;
             340          (i) agricultural residues;
             341          (j) dedicated energy crops;
             342          (k) landfill gas or biogas produced from organic matter, wastewater, anaerobic
             343      digesters, or municipal solid waste; or
             344          (l) geothermal energy.
             345          (5) "Equipment package" means a group of components connecting an electric
             346      generator to an electric distribution system, including all interface equipment and the interface
             347      equipment's controls, switchgear, inverter, and other interface devices.
             348          (6) "Excess customer-generated electricity" means the amount of customer-generated
             349      electricity in excess of the customer's consumption from the customer generation system
             350      during a monthly billing period, as measured at the electrical corporation's meter.
             351          (7) "Fuel cell" means a device in which the energy of a reaction between a fuel and an
             352      oxidant is converted directly and continuously into electrical energy.
             353          (8) "Governing authority" means:
             354          (a) for a distribution electrical cooperative, its board of directors; and
             355          (b) for each other electrical corporation, the Public Service Commission.
             356          (9) "Inverter" means a device that:
             357          (a) converts direct current power into alternating current power that is compatible with
             358      power generated by an electrical corporation; and
             359          (b) has been designed, tested, and UL certified to UL1741 and installed and operated
             360      in accordance with IEEE1547 standards.
             361          (10) "Net electricity" means the difference, as measured at the meter owned by the
             362      electrical corporation between:
             363          (a) the amount of electricity that an electrical corporation supplies to a customer
             364      participating in a net metering program; and
             365          (b) the amount of customer-generated electricity delivered to the electrical corporation.


             366          (11) "Net metering" means measuring the amount of net electricity for the applicable
             367      billing period.
             368          (12) "Net metering program" means a program administered by an electrical
             369      corporation whereby a customer with a customer generation system may:
             370          (a) generate electricity primarily for the customer's own use;
             371          (b) supply customer-generated electricity to the electrical corporation; and
             372          (c) if net metering results in excess customer-generated electricity during a billing
             373      period, receive a credit under Section 54-15-104 .
             374          (13) "Switchgear" means the combination of electrical disconnects, fuses, or circuit
             375      breakers:
             376          (a) used to:
             377          (i) isolate electrical equipment; and
             378          (ii) de-energize equipment to allow work to be performed or faults downstream to be
             379      cleared; and
             380          (b) that is:
             381          (i) designed, tested, and UL certified to UL1741; and
             382          (ii) installed and operated in accordance with IEEE1547 standards.
             383          Section 3. Section 54-15-108 is enacted to read:
             384          54-15-108. Damages and fines for connecting a customer generation system to
             385      more than one customer.
             386          If an independent energy producer defined in Subsection 54-2-1 (13) that is supplying
             387      energy to a customer under Subsection 54-2-1 (16)(d)(iv) violates the limitations set forth in
             388      Subsection 54-2-1 (16)(d)(iv)(B), the commission may:
             389          (1) award damages to an electrical corporation for actual and consequential damages
             390      to the electrical corporation; and
             391          (2) assess a fine against the independent energy producer or person responsible for the
             392      violation.
             393          Section 4. Effective date.


             394          If approved by two-thirds of all the members elected to each house, this bill takes effect
             395      upon approval by the governor, or the day following the constitutional time limit of Utah
             396      Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
             397      the date of veto override.


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