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First Substitute S.B. 67

Senator J. Stuart Adams proposes the following substitute bill:


             1     
AMENDMENTS TO PUBLIC UTILITIES TITLE

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: J. Stuart Adams

             5     
House Sponsor: Don L. Ipson

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends Title 54, Public Utilities, and related provisions.
             10      Highlighted Provisions:
             11          This bill:
             12          .    defines terms and modifies definitions, including addressing entities that are not
             13      included in the definition of "electrical corporation" or "public utility";
             14          .    provides that a public utility is not required to furnish or provide electric service
             15      under certain circumstances;
             16          .    provides procedures for certain customers to transfer service from a public utility to
             17      a nonutility energy supplier;
             18          .    addresses the applicability of certain provisions within the Public Utilities title; and
             19          .    makes technical and conforming changes.
             20      Money Appropriated in this Bill:
             21          None
             22      Other Special Clauses:
             23          None
             24      Utah Code Sections Affected:
             25      AMENDS:


             26           17B-2a-406 , as last amended by Laws of Utah 2009, Chapter 384
             27           54-2-1 , as last amended by Laws of Utah 2010, Chapters 302 and 390
             28           54-3-8 , as last amended by Laws of Utah 2010, Chapter 390
             29           54-4-2 , as last amended by Laws of Utah 2010, Chapter 390
             30           54-15-108 , as enacted by Laws of Utah 2010, Chapter 302
             31      ENACTS:
             32           54-3-32 , Utah Code Annotated 1953
             33     
             34      Be it enacted by the Legislature of the state of Utah:
             35          Section 1. Section 17B-2a-406 is amended to read:
             36           17B-2a-406. Improvement districts providing electric service -- Public Service
             37      Commission jurisdiction -- Exceptions.
             38          (1) As used in this section:
             39          (a) "Commission" means the Public Service Commission of Utah established in
             40      Section 54-1-1 .
             41          (b) "Electric corporation" has the same meaning as "electrical corporation" defined in
             42      Section 54-2-1 .
             43          (c) "Electric improvement district" means an improvement district that provides
             44      electric service as authorized under Subsection 17B-2a-403 (1)(a)(iv).
             45          (d) "Stranded asset" means an asset that:
             46          (i) an electric corporation owns and operates;
             47          (ii) is designed to serve an area that is:
             48          (A) within the electric corporation's certificated service area before the area is removed
             49      from the certificated service area by commission order as provided in Subsection
             50      (3)(b)(i)(B)(II); and
             51          (B) within the boundary of an electric improvement district; and
             52          (iii) will not be useful to or used by the electric corporation after removal of the area
             53      from the electric corporation's certificated service area.
             54          (2) An electric improvement district is a public utility and subject to the jurisdiction of
             55      the commission.
             56          (3) (a) Except as provided in Subsection (3)(b), an electric improvement district:


             57          (i) may include only an area where:
             58          (A) no retail electricity has been provided to commercial, industrial, residential, and
             59      other users of electricity from an investor-owned utility within any part of an area certificated
             60      by the commission or an area adjacent to that area, municipal agency, or electric cooperative
             61      within the five years immediately preceding September 1, 1985; and
             62          (B) electric service is provided to at least one user of electricity within the electric
             63      service district as of September 1, 1985; and
             64          (ii) shall have filed an application for certification and received approval by the
             65      commission by September 1, 1986.
             66          (b) (i) An electric improvement district created after May 11, 2009 may provide
             67      electric service within the boundary of the improvement district if:
             68          (A) no part of the boundary of the electric improvement district is closer than 40 miles
             69      to an existing service line of an electric corporation;
             70          (B) (I) no part of the area within the boundary of the electric improvement district is
             71      within the certificated service area of an electric corporation; or
             72          (II) the area within the boundary of the electric improvement district that is also within
             73      the certificated service area of an electric corporation is removed from the electric corporation's
             74      certificated service area by commission order in a proceeding initiated by a petition filed by
             75      and at the discretion of the electric corporation; and
             76          (C) before January 1, 2010, the electric improvement district receives a certificate of
             77      public convenience and necessity from the commission authorizing the electric improvement
             78      district to provide electric service to the area within the boundary of the electric improvement
             79      district.
             80          (ii) An electric improvement district that provides electric service as provided in
             81      Subsection (3)(b)(i) shall pay an electric corporation an amount equal to the fair market value
             82      of each stranded asset of the electric corporation.
             83          (4) Nothing in this part may be construed to give the commission jurisdiction over:
             84          (a) an improvement district, other than an electric improvement district;
             85          (b) a municipality; or
             86          (c) an association of municipalities organized under Title 11, Chapter 13, Interlocal
             87      Cooperation Act.


             88          (5) Before an electric improvement district serves any customer, the electric
             89      improvement district shall obtain a certificate of public convenience and necessity from the
             90      commission.
             91          (6) (a) Section 54-7-12 does not apply to rate changes of an electric improvement
             92      district if:
             93          (i) the district is organized for the purpose of distributing electricity to customers
             94      within the boundary of the district on a not-for-profit basis;
             95          (ii) the schedule of new rates or other change that results in new rates has been
             96      approved by the board of trustees of the district;
             97          (iii) prior to the implementation of any rate increases, the district first holds a public
             98      meeting for all its customers to whom mailed notice of the meeting is sent at least 10 days prior
             99      to the meeting; and
             100          (iv) the district has filed the schedule of new rates or other change with the
             101      commission.
             102          (b) The commission shall make the district's schedule of new rates or other change
             103      available for public inspection.
             104          Section 2. Section 54-2-1 is amended to read:
             105           54-2-1. Definitions.
             106          As used in this title:
             107          (1) "Avoided costs" means the incremental costs to an electrical corporation of electric
             108      energy or capacity or both that, due to the purchase of electric energy or capacity or both from
             109      small power production or cogeneration facilities, the electrical corporation would not have to
             110      generate itself or purchase from another electrical corporation.
             111          (2) "Cogeneration facility":
             112          (a) means a facility that produces:
             113          (i) electric energy; and
             114          (ii) steam or forms of useful energy, including heat, that are used for industrial,
             115      commercial, heating, or cooling purposes; and
             116          (b) is a qualifying cogeneration facility under federal law.
             117          (3) "Commission" means the Public Service Commission of Utah.
             118          (4) "Commissioner" means a member of the commission.


             119          (5) (a) "Corporation" includes an association and a joint stock company having any
             120      powers or privileges not possessed by individuals or partnerships.
             121          (b) "Corporation" does not include towns, cities, counties, conservancy districts,
             122      improvement districts, or other governmental units created or organized under any general or
             123      special law of this state.
             124          (6) "Distribution electrical cooperative" includes an electrical corporation that:
             125          (a) is a cooperative;
             126          (b) conducts a business that includes the retail distribution of electricity the cooperative
             127      purchases or generates for the cooperative's members; and
             128          (c) is required to allocate or distribute savings in excess of additions to reserves and
             129      surplus on the basis of patronage to the cooperative's:
             130          (i) members; or
             131          (ii) patrons.
             132          (7) (a) "Electrical corporation" includes every corporation, cooperative association, and
             133      person, their lessees, trustees, and receivers, owning, controlling, operating, or managing any
             134      electric plant, or in any way furnishing electric power for public service or to its consumers or
             135      members for domestic, commercial, or industrial use, within this state[, except].
             136          (b) "Electrical corporation" does not include:
             137          (i) an independent energy [producers, and except] producer;
             138          (ii) where electricity is generated on or distributed by the producer solely for the
             139      producer's own use, or the use of the producer's tenants, or [for] the use of members of an
             140      association of unit owners formed under Title 57, Chapter 8, Condominium Ownership Act,
             141      and not for sale to the public generally[, and except where the electricity generated is consumed
             142      by an owner, lessor, or interest holder, or by an affiliate of an owner, lessor, or interest holder,
             143      who has provided at least $25,000,000 in value, including credit support, relating to the electric
             144      plant furnishing the electricity and whose consumption does not exceed its long-term
             145      entitlement in the plant under a long-term arrangement other than a power purchase agreement,
             146      except a power purchase agreement with an electrical corporation.];
             147          (iii) an eligible customer who provides electricity for the eligible customer's own use or
             148      the use of the eligible customer's tenant or affiliate; or
             149          (iv) a nonutility energy supplier who sells or provides electricity to:


             150          (A) an eligible customer who has transferred the eligible customer's service to the
             151      nonutility energy supplier in accordance with Section 54-3-32 ; or
             152          (B) the eligible customer's tenant or affiliate.
             153          (8) "Electric plant" includes all real estate, fixtures, and personal property owned,
             154      controlled, operated, or managed in connection with or to facilitate the production, generation,
             155      transmission, delivery, or furnishing of electricity for light, heat, or power, and all conduits,
             156      ducts, or other devices, materials, apparatus, or property for containing, holding, or carrying
             157      conductors used or to be used for the transmission of electricity for light, heat, or power.
             158          (9) "Eligible customer" means a person who:
             159          (a) on December 31, 2013:
             160          (i) was a customer of a public utility that, on December 31, 2013, had more than
             161      200,000 retail customers in this state; and
             162          (ii) owned an electric plant that is an electric generation plant that, on December 31,
             163      2013, had a generation name plate capacity of greater than 150 megawatts; and
             164          (b) produces electricity:
             165          (i) from a qualifying power production facility for sale to a public utility in this state;
             166          (ii) primarily for the eligible customer's own use; or
             167          (iii) for the use of the eligible customer's tenant or affiliate.
             168          (10) "Eligible customer's tenant or affiliate" means one or more tenants or affiliates:
             169          (a) of an eligible customer; and
             170          (b) who are primarily engaged in an activity:
             171          (i) related to the eligible customer's core mining or industrial businesses; and
             172          (ii) performed on real property that is:
             173          (A) within a 25-mile radius of the electric plant described in Subsection (9)(a)(ii); and
             174          (B) owned by, controlled by, or under common control with, the eligible customer.
             175          [(9)] (11) "Gas corporation" includes every corporation and person, their lessees,
             176      trustees, and receivers, owning, controlling, operating, or managing any gas plant for public
             177      service within this state or for the selling or furnishing of natural gas to any consumer or
             178      consumers within the state for domestic, commercial, or industrial use, except in the situation
             179      that:
             180          (a) gas is made or produced on, and distributed by the maker or producer through,


             181      private property:
             182          (i) solely for the maker's or producer's own use or the use of the maker's or producer's
             183      tenants; and
             184          (ii) not for sale to others;
             185          (b) gas is compressed on private property solely for the owner's own use or the use of
             186      the owner's employees as a motor vehicle fuel; or
             187          (c) gas is compressed by a retailer of motor vehicle fuel on the retailer's property solely
             188      for sale as a motor vehicle fuel.
             189          [(10)] (12) "Gas plant" includes all real estate, fixtures, and personal property owned,
             190      controlled, operated, or managed in connection with or to facilitate the production, generation,
             191      transmission, delivery, or furnishing of gas, natural or manufactured, for light, heat, or power.
             192          [(11)] (13) "Heat corporation" includes every corporation and person, their lessees,
             193      trustees, and receivers, owning, controlling, operating, or managing any heating plant for public
             194      service within this state.
             195          [(12)] (14) (a) "Heating plant" includes all real estate, fixtures, machinery, appliances,
             196      and personal property controlled, operated, or managed in connection with or to facilitate the
             197      production, generation, transmission, delivery, or furnishing of artificial heat.
             198          (b) "Heating plant" does not include either small power production facilities or
             199      cogeneration facilities.
             200          [(13)] (15) "Independent energy producer" means every electrical corporation, person,
             201      corporation, or government entity, their lessees, trustees, or receivers, that own, operate,
             202      control, or manage an independent power production or cogeneration facility.
             203          [(14)] (16) "Independent power production facility" means a facility that:
             204          (a) produces electric energy solely by the use, as a primary energy source, of biomass,
             205      waste, a renewable resource, a geothermal resource, or any combination of the preceding
             206      sources; or
             207          (b) is a qualifying power production facility.
             208          (17) "Nonutility energy supplier" means a person that:
             209          (a) has received market-based rate authority from the Federal Energy Regulatory
             210      Commission in accordance with 16 U.S.C. Sec. 824d, 18 C.F.R. Part 35, Filing of Rate
             211      Schedules and Tariffs, or applicable Federal Energy Regulatory Commission orders; or


             212          (b) owns, leases, operates, or manages an electric plant that is an electric generation
             213      plant that:
             214          (i) has a capacity of greater than 100 megawatts; and
             215          (ii) is hosted on the site of an eligible customer that consumes the output of the electric
             216      plant, in whole or in part, for the eligible customer's own use or the use of the eligible
             217      customer's tenant or affiliate.
             218          [(15)] (18) "Private telecommunications system" includes all facilities for the
             219      transmission of signs, signals, writing, images, sounds, messages, data, or other information of
             220      any nature by wire, radio, lightwaves, or other electromagnetic means, excluding mobile radio
             221      facilities, that are owned, controlled, operated, or managed by a corporation or person,
             222      including their lessees, trustees, receivers, or trustees appointed by any court, for the use of that
             223      corporation or person and not for the shared use with or resale to any other corporation or
             224      person on a regular basis.
             225          [(16)] (19) (a) "Public utility" includes every railroad corporation, gas corporation,
             226      electrical corporation, distribution electrical cooperative, wholesale electrical cooperative,
             227      telephone corporation, telegraph corporation, water corporation, sewerage corporation, heat
             228      corporation, and independent energy producer not described in Subsection [(16)] (19)(d),
             229      where the service is performed for, or the commodity delivered to, the public generally, or in
             230      the case of a gas corporation or electrical corporation where the gas or electricity is sold or
             231      furnished to any member or consumers within the state for domestic, commercial, or industrial
             232      use.
             233          (b) (i) If any railroad corporation, gas corporation, electrical corporation, telephone
             234      corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation,
             235      or independent energy producer not described in Subsection [(16)] (19)(d), performs a service
             236      for or delivers a commodity to the public, it is considered to be a public utility, subject to the
             237      jurisdiction and regulation of the commission and this title.
             238          (ii) If a gas corporation, independent energy producer not described in Subsection
             239      [(16)] (19)(d), or electrical corporation sells or furnishes gas or electricity to any member or
             240      consumers within the state, for domestic, commercial, or industrial use, for which any
             241      compensation or payment is received, it is considered to be a public utility, subject to the
             242      jurisdiction and regulation of the commission and this title.


             243          (c) Any corporation or person not engaged in business exclusively as a public utility as
             244      defined in this section is governed by this title in respect only to the public utility owned,
             245      controlled, operated, or managed by the corporation or person, and not in respect to any other
             246      business or pursuit.
             247          (d) An independent energy producer is exempt from the jurisdiction and regulations of
             248      the commission with respect to an independent power production facility if it meets the
             249      requirements of Subsection [(16)] (19)(d)(i), (ii), (iii), or (iv), or any combination of these:
             250          (i) the commodity or service is produced or delivered, or both, by an independent
             251      energy producer solely for [the uses exempted in Subsection (7)] a use described in Subsections
             252      (7)(b)(ii) through (iv) or for the use of state-owned facilities;
             253          (ii) the commodity or service is sold by an independent energy producer solely to an
             254      electrical corporation or other wholesale purchaser;
             255          (iii) (A) the commodity or service produced or delivered by the independent energy
             256      producer is delivered to an entity that controls, is controlled by, or affiliated with the
             257      independent energy producer or to a user located on real property managed or controlled by the
             258      independent energy producer; and
             259          (B) the real property on which the service or commodity is used is contiguous to real
             260      property [which] that is owned or controlled by the independent energy producer[. Parcels of
             261      real property] or is separated [solely] only by a public [roads or easements for public roads
             262      shall be considered as contiguous for purposes of this Subsection (16)] road or an easement for
             263      a public road; or
             264          (iv) the independent energy producer:
             265          (A) supplies energy for direct consumption by a customer that is:
             266          (I) a county, municipality, city, town, other political subdivision, local district, special
             267      service district, state institution of higher education, school district, charter school, or any
             268      entity within the state system of public education; or
             269          (II) an entity qualifying as a charitable organization under 26 U.S.C. Sec. 501(c)(3)
             270      operated for religious, charitable, or educational purposes that is exempt from federal income
             271      tax and able to demonstrate its tax-exempt status;
             272          (B) supplies energy to the customer through use of a customer generation system, as
             273      defined in Section 54-15-102 , for use on the real property where the customer generation


             274      system is located;
             275          (C) supplies energy using a customer generation system designed to supply the lesser
             276      of:
             277          (I) no more than 90% of the average annual consumption of electricity by the customer
             278      at that site, based on an annualized billing period; or
             279          (II) the maximum size allowable under net metering provisions, defined in Section
             280      54-15-102 ;
             281          (D) notifies the customer before installing the customer generation system of:
             282          (I) all costs the customer is required to pay for the customer generation system,
             283      including any interconnection costs; and
             284          (II) the potential for future changes in amounts paid by the customer for energy
             285      received from the public utility and the possibility of changes to the customer fees or charges to
             286      the customer associated with net metering and generation;
             287          (E) enters into and performs in accordance with an interconnection agreement with a
             288      public utility providing retail electric service where the real property on which the customer
             289      generation system is located, with the rates, terms, and conditions of the retail service and
             290      interconnection agreement subject to approval by the governing authority of the public utility,
             291      as defined in Subsection 54-15-102 (8); and
             292          (F) installs the relevant customer generation system by December 31, 2015.
             293          (e) Any person or corporation defined as an electrical corporation or public utility
             294      under this section may continue to serve its existing customers subject to any order or future
             295      determination of the commission in reference to the right to serve those customers.
             296          (f) (i) "Public utility" does not include any person that is otherwise considered a public
             297      utility under this Subsection [(16)] (19) solely because of that person's ownership of an interest
             298      in an electric plant, cogeneration facility, or small power production facility in this state if all of
             299      the following conditions are met:
             300          (A) the ownership interest in the electric plant, cogeneration facility, or small power
             301      production facility is leased to:
             302          (I) a public utility, and that lease has been approved by the commission;
             303          (II) a person or government entity that is exempt from commission regulation as a
             304      public utility; or


             305          (III) a combination of Subsections [(16)] (19)(f)(i)(A)(I) and (II);
             306          (B) the lessor of the ownership interest identified in Subsection [(16)] (19)(f)(i)(A) is:
             307          (I) primarily engaged in a business other than the business of a public utility; or
             308          (II) a person whose total equity or beneficial ownership is held directly or indirectly by
             309      another person engaged in a business other than the business of a public utility; and
             310          (C) the rent reserved under the lease does not include any amount based on or
             311      determined by revenues or income of the lessee.
             312          (ii) Any person that is exempt from classification as a public utility under Subsection
             313      [(16)] (19)(f)(i) shall continue to be so exempt from classification following termination of the
             314      lessee's right to possession or use of the electric plant for so long as the former lessor does not
             315      operate the electric plant or sell electricity from the electric plant. If the former lessor operates
             316      the electric plant or sells electricity, the former lessor shall continue to be so exempt for a
             317      period of 90 days following termination, or for a longer period that is ordered by the
             318      commission. This period may not exceed one year. A change in rates that would otherwise
             319      require commission approval may not be effective during the 90-day or extended period
             320      without commission approval.
             321          (g) "Public utility" does not include any person that provides financing for, but has no
             322      ownership interest in an electric plant, small power production facility, or cogeneration facility.
             323      In the event of a foreclosure in which an ownership interest in an electric plant, small power
             324      production facility, or cogeneration facility is transferred to a third-party financer of an electric
             325      plant, small power production facility, or cogeneration facility, then that third-party financer is
             326      exempt from classification as a public utility for 90 days following the foreclosure, or for a
             327      longer period that is ordered by the commission. This period may not exceed one year.
             328          (h) (i) The distribution or transportation of natural gas for use as a motor vehicle fuel
             329      does not cause the distributor or transporter to be a "public utility," unless the commission,
             330      after notice and a public hearing, determines by rule that it is in the public interest to regulate
             331      the distributers or transporters, but the retail sale alone of compressed natural gas as a motor
             332      vehicle fuel may not cause the seller to be a "public utility."
             333          (ii) In determining whether it is in the public interest to regulate the distributors or
             334      transporters, the commission shall consider, among other things, the impact of the regulation
             335      on the availability and price of natural gas for use as a motor fuel.


             336          [(i) "Public utility" does not include any corporation, cooperative association, or
             337      person, their affiliates, lessees, trustees, or receivers, owning, controlling, operating, or
             338      managing an electric plant or in any way furnishing electricity if the electricity is consumed by
             339      an owner, lessor, or interest holder or by an affiliate of an owner, lessor, or interest holder, who
             340      has provided at least $25,000,000 in value, including credit support, relating to the electric
             341      plant furnishing the electricity and whose consumption does not exceed its long-term
             342      entitlement in the plant under a long-term arrangement other than a power purchase agreement,
             343      except a power purchase agreement with an electrical corporation.]
             344          (i) "Public utility" does not include:
             345          (i) an eligible customer who provides electricity for the eligible customer's own use or
             346      the use of the eligible customer's tenant or affiliate; or
             347          (ii) a nonutility energy supplier that sells or provides electricity to:
             348          (A) an eligible customer who has transferred the eligible customer's service to the
             349      nonutility energy supplier in accordance with Section 54-3-32 ; or
             350          (B) the eligible customer's tenant or affiliate.
             351          [(17)] (20) "Purchasing utility" means any electrical corporation that is required to
             352      purchase electricity from small power production or cogeneration facilities pursuant to the
             353      Public Utility Regulatory Policies Act, 16 U.S.C. Section 824a-3.
             354          [(18)] (21) "Qualifying power producer" means a corporation, cooperative association,
             355      or person, or the lessee, trustee, and receiver of the corporation, cooperative association, or
             356      person, who owns, controls, operates, or manages any qualifying power production facility or
             357      cogeneration facility.
             358          [(19)] (22) "Qualifying power production facility" means a facility that:
             359          (a) produces electrical energy solely by the use, as a primary energy source, of biomass,
             360      waste, a renewable resource, a geothermal resource, or any combination of the preceding
             361      sources;
             362          (b) has a power production capacity that, together with any other facilities located at
             363      the same site, is no greater than 80 megawatts; and
             364          (c) is a qualifying small power production facility under federal law.
             365          [(20)] (23) "Railroad" includes every commercial, interurban, and other railway, other
             366      than a street railway, and each branch or extension of a railway, by any power operated,


             367      together with all tracks, bridges, trestles, rights-of-way, subways, tunnels, stations, depots,
             368      union depots, yards, grounds, terminals, terminal facilities, structures, and equipment, and all
             369      other real estate, fixtures, and personal property of every kind used in connection with a
             370      railway owned, controlled, operated, or managed for public service in the transportation of
             371      persons or property.
             372          [(21)] (24) "Railroad corporation" includes every corporation and person, their lessees,
             373      trustees, and receivers, owning, controlling, operating, or managing any railroad for public
             374      service within this state.
             375          [(22)] (25) (a) "Sewerage corporation" includes every corporation and person, their
             376      lessees, trustees, and receivers, owning, controlling, operating, or managing any sewerage
             377      system for public service within this state.
             378          (b) "Sewerage corporation" does not include private sewerage companies engaged in
             379      disposing of sewage only for their stockholders, or towns, cities, counties, conservancy
             380      districts, improvement districts, or other governmental units created or organized under any
             381      general or special law of this state.
             382          [(23)] (26) "Telegraph corporation" includes every corporation and person, their
             383      lessees, trustees, and receivers, owning, controlling, operating, or managing any telegraph line
             384      for public service within this state.
             385          [(24)] (27) "Telegraph line" includes all conduits, ducts, poles, wires, cables,
             386      instruments, and appliances, and all other real estate, fixtures, and personal property owned,
             387      controlled, operated, or managed in connection with or to facilitate communication by
             388      telegraph, whether that communication be had with or without the use of transmission wires.
             389          [(25)] (28) (a) "Telephone corporation" means any corporation or person, and their
             390      lessees, trustee, receivers, or trustees appointed by any court, who owns, controls, operates,
             391      manages, or resells a public telecommunications service as defined in Section 54-8b-2 .
             392          (b) "Telephone corporation" does not mean a corporation, partnership, or firm
             393      providing:
             394          (i) intrastate telephone service offered by a provider of cellular, personal
             395      communication systems (PCS), or other commercial mobile radio service as defined in 47
             396      U.S.C. Sec. 332 that has been issued a covering license by the Federal Communications
             397      Commission;


             398          (ii) Internet service; or
             399          (iii) resold intrastate toll service.
             400          [(26)] (29) "Telephone line" includes all conduits, ducts, poles, wires, cables,
             401      instruments, and appliances, and all other real estate, fixtures, and personal property owned,
             402      controlled, operated, or managed in connection with or to facilitate communication by
             403      telephone whether that communication is had with or without the use of transmission wires.
             404          [(27)] (30) "Transportation of persons" includes every service in connection with or
             405      incidental to the safety, comfort, or convenience of the person transported, and the receipt,
             406      carriage, and delivery of that person and that person's baggage.
             407          [(28)] (31) "Transportation of property" includes every service in connection with or
             408      incidental to the transportation of property, including in particular its receipt, delivery,
             409      elevation, transfer, switching, carriage, ventilation, refrigeration, icing, dunnage, storage, and
             410      hauling, and the transmission of credit by express companies.
             411          [(29)] (32) "Water corporation" includes every corporation and person, their lessees,
             412      trustees, and receivers, owning, controlling, operating, or managing any water system for
             413      public service within this state. It does not include private irrigation companies engaged in
             414      distributing water only to their stockholders, or towns, cities, counties, water conservancy
             415      districts, improvement districts, or other governmental units created or organized under any
             416      general or special law of this state.
             417          [(30)] (33) (a) "Water system" includes all reservoirs, tunnels, shafts, dams, dikes,
             418      headgates, pipes, flumes, canals, structures, and appliances, and all other real estate, fixtures,
             419      and personal property owned, controlled, operated, or managed in connection with or to
             420      facilitate the diversion, development, storage, supply, distribution, sale, furnishing, carriage,
             421      appointment, apportionment, or measurement of water for power, fire protection, irrigation,
             422      reclamation, or manufacturing, or for municipal, domestic, or other beneficial use.
             423          (b) "Water system" does not include private irrigation companies engaged in
             424      distributing water only to their stockholders.
             425          [(31)] (34) "Wholesale electrical cooperative" includes every electrical corporation that
             426      is:
             427          (a) in the business of the wholesale distribution of electricity it has purchased or
             428      generated to its members and the public; and


             429          (b) required to distribute or allocate savings in excess of additions to reserves and
             430      surplus to members or patrons on the basis of patronage.
             431          Section 3. Section 54-3-8 is amended to read:
             432           54-3-8. Preferences forbidden -- Power of commission to determine facts --
             433      Applicability of section.
             434          (1) Except as provided in Chapter 8b, Public Telecommunications Law, a public utility
             435      may not:
             436          (a) as to rates, charges, service, facilities or in any other respect, make or grant any
             437      preference or advantage to any person, or subject any person to any prejudice or disadvantage;
             438      and
             439          (b) establish or maintain any unreasonable difference as to rates, charges, service or
             440      facilities, or in any other respect, either as between localities or as between classes of service.
             441          (2) The commission shall have power to determine any question of fact arising under
             442      this section.
             443          (3) This section does not apply to, and the commission may not enforce this chapter
             444      concerning, a schedule, classification, rate, price, charge, fare, toll, rental, rule, service, facility,
             445      or contract of [a public utility or electrical corporation furnishing electricity,] an entity
             446      described in Subsection 54-2-1 (7)(b)(iii) or (iv), (17), or (19)(i), or if the electricity is
             447      consumed by [an owner, lessor, or interest holder or by an affiliate of an owner, lessor, or
             448      interest holder, who has provided at least $25,000,000 in value, including credit support,
             449      relating to the electric plant furnishing the electricity and whose consumption does not exceed
             450      its long-term entitlement in the plant under a long-term arrangement other than a power
             451      purchase agreement, except a power purchase agreement with an electrical corporation.] an
             452      eligible customer for the eligible customer's own use or the use of the eligible customer's tenant
             453      or affiliate.
             454          Section 4. Section 54-3-32 is enacted to read:
             455          54-3-32. Public utility duties -- Procedure to transfer service to a nonutility energy
             456      supplier.
             457          (1) A transmission provider shall offer to an eligible customer available transmission
             458      service under the transmission provider's applicable Federal Energy Regulatory Commission
             459      approved open access transmission tariff.


             460          (2) Notwithstanding Section 54-3-1 , and except for transmission service required to be
             461      offered under Subsection (1), a public utility is not required to furnish or provide electric
             462      service to an eligible customer if the eligible customer has transferred service to a nonutility
             463      energy supplier in accordance with this section.
             464          (3) An eligible customer may initiate the transfer of service to a nonutility energy
             465      supplier by:
             466          (a) providing written notice to the public utility that provides electric service to the
             467      eligible customer:
             468          (i) no later than18 months before the date the eligible customer intends to transfer
             469      service to the nonutility energy supplier; and
             470          (ii) stating:
             471          (A) that the eligible customer intends to receive service from the nonutility energy
             472      supplier; and
             473          (B) the date on which the eligible customer intends to commence receiving service
             474      from the nonutility energy supplier; and
             475          (b) filing a written application with the public utility's transmission provider in
             476      accordance with the transmission provider's approved Federal Energy Regulatory Commission
             477      open access transmission tariff no later than 240 days before the intended date of transfer of
             478      service described in Subsection (3)(a)(ii).
             479          (4) (a) Subject to Subsection (4)(c), an eligible customer shall provide written reports
             480      to the commission and the public utility updating any change in the intended date of transfer of
             481      service described in Subsection (3)(a)(ii):
             482          (i) beginning nine months prior to the intended date of transfer of service described in
             483      Subsection (3)(a)(ii); and
             484          (ii) no less frequently than every three months after the first written report is submitted
             485      in accordance with Subsection (4)(a)(i) until the sooner of:
             486          (A) the date the notice described in Subsection (3)(a) is withdrawn in accordance with
             487      this section; or
             488          (B) the date the eligible customer's service is transferred to the nonutility energy
             489      supplier.
             490          (b) An eligible customer:


             491          (i) may withdraw the notice described in Subsection (3)(a) at any time prior to
             492      transferring service to a nonutility energy supplier; or
             493          (ii) subject to Subsection (4)(c), may delay the intended date of transfer of service
             494      described in Subsection (3)(a)(ii).
             495          (c) Subject to Subsection (4)(d), the notice described in Subsection (3)(a) is considered
             496      to be withdrawn if a transfer of service under this section does not occur before the earlier of:
             497          (i) December 31, 2020; or
             498          (ii) 18 months after the intended date of transfer of service described in Subsection
             499      (3)(a)(ii).
             500          (d) A time period provided in Subsection (4)(c) is tolled during any period of delay in a
             501      transfer of service to a nonutility energy supplier if the delay is solely attributable to the public
             502      utility, the public utility's transmission provider, or a contractor of the public utility or the
             503      public utility's transmission provider, in fulfilling the public utility's or the public utility's
             504      transmission provider's obligations under relevant law.
             505          (5) An eligible customer that transfers service to a nonutility energy supplier shall pay,
             506      or receive credit for:
             507          (a) any amounts due to the public utility for electric service provided to the eligible
             508      customer in accordance with a tariff or the eligible customer's contract for service;
             509          (b) all balancing account costs, major plant addition costs, and any other surcharges or
             510      credits:
             511          (i) attributable to the service provided to the eligible customer; and
             512          (ii) incurred prior to the eligible customer's transfer of service to the nonutility energy
             513      supplier;
             514          (c) all costs of metering, communication, and other facilities or equipment necessary to
             515      transfer the eligible customer's service to the nonutility energy supplier;
             516          (d) all costs of transmission and ancillary services necessary for the eligible customer
             517      to receive service from the nonutility energy supplier; and
             518          (e) any costs assessed to the eligible customer in accordance with Subsection (6).
             519          (6) (a) The Division of Public Utilities shall file a petition with the commission as
             520      provided in this section:
             521          (i) no earlier than 12 months but no later than eight months before the later of:


             522          (A) the intended date of transfer of service described in Subsection (3)(a)(ii); or
             523          (B) if the eligible customer updates a change in the intended date of transfer of service
             524      in accordance with Subsection (4), the intended date of transfer of service stated in the written
             525      report described in Subsection (4); or
             526          (ii) at any time earlier than the time period described in Subsection (6)(a)(i) if agreed to
             527      by the public utility, the Division of Public Utilities, the Office of Consumer Services, and the
             528      eligible customer.
             529          (b) A petition under Subsection (6)(a) shall seek a determination by the commission of
             530      whether the eligible customer's intended transfer of service to a nonutility energy supplier will
             531      result in:
             532          (i) costs or credits allocated to Utah under any interjurisdictional cost allocation
             533      methodology the commission reasonably expects to be in effect as of:
             534          (A) the intended date of transfer of service described in Subsection (3)(a)(ii); or
             535          (B) if the eligible customer updates a change in the intended date of transfer of service
             536      in accordance with Subsection (4), the intended date of transfer of service stated in the written
             537      report described in Subsection (4);
             538          (ii) (A) costs of facilities used to serve the eligible customer if the costs will not be
             539      recovered from the eligible customer and the facilities will not be used by other customers as a
             540      direct result of the eligible customer transferring service to a nonutility energy supplier; and
             541          (B) any credits to offset the costs of facilities described in Subsection (6)(b)(ii)(A); and
             542          (iii) any other costs to the public utility or to other customers of the public utility.
             543          (c) In making its determination under Subsection (6)(b), the commission may consider:
             544          (i) the benefits from resources, the costs of which are attributable to the eligible
             545      customer's load;
             546          (ii) the cost of resources attributable to the eligible customer's load compared to the
             547      cost of new resources;
             548          (iii) other credits and public interest considerations related to the eligible customer; and
             549          (iv) any other issue raised by a party to the proceeding or any other issue the
             550      commission determines to be relevant.
             551          (d) If the eligible customer's load was not substantially offset by the eligible customer's
             552      generation in the public utility's load forecast used in the public utility's 2013 integrated


             553      resource plan, the commission shall require the eligible customer to pay to the public utility, for
             554      the benefit of Utah customers, any costs described in Subsection (6)(b) the commission orders
             555      the eligible customer to pay.
             556          (e) If the eligible customer's load was substantially offset by the eligible customer's
             557      generation in the public utility's load forecast used in the public utility's 2013 integrated
             558      resource plan, the commission, in its discretion, based on substantial evidence and taking into
             559      consideration the public interest, shall determine the reasonable amount:
             560          (i) (A) the eligible customer is required to pay to the public utility, for the benefit of
             561      Utah customers, for the costs the commission determines in accordance with Subsection
             562      (6)(b)(i); and
             563          (B) the public utility is required to pay to the eligible customer, at a cost to be
             564      recovered from Utah customers, for any credits the commission determines in accordance with
             565      Subsection (6)(b)(i);
             566          (ii) the following are required to pay to the public utility, for the costs or credits the
             567      commission determines in accordance with Subsection (6)(b)(ii):
             568          (A) the eligible customer;
             569          (B) other customers of the public utility; or
             570          (C) the eligible customer and other customers of the public utility; and
             571          (iii) the other customers of the public utility are required to pay to the public utility, for
             572      any costs the commission determines in accordance with Subsection (6)(b)(iii).
             573          (f) (i) The commission shall issue a decision on the petition filed in accordance with
             574      Subsection (6)(a) no later than 180 days after the Division of Public Utilities files the petition.
             575          (ii) If the commission does not issue a decision within the time period required by
             576      Subsection (6)(f)(i), the commission shall allow the public utility to recover costs the
             577      commission determines in accordance with Subsection (6)(b), but may not impose any of those
             578      costs on the eligible customer.
             579          (7) A public utility and an eligible customer may agree in writing to waive a time
             580      period described in Subsection (4) as necessary to facilitate the eligible customer to receive
             581      service from a nonutility energy supplier.
             582          (8) (a) Subject to Subsection (8)(b), an eligible customer shall arrange for the
             583      installation of any facilities and equipment necessary for the eligible customer to receive


             584      service from a nonutility energy supplier:
             585          (i) at the cost of the eligible customer; and
             586          (ii) i n compliance with the public utility's applicable equipment standards and industry
             587      codes.
             588          (b) The facilities and equipment described in Subsection (8)(a) may be installed by:
             589          (i) the public utility;
             590          (ii) the nonutility energy supplier; or
             591          (iii) a third party contractor.
             592          (9) An eligible customer may commence service from a nonutility energy supplier if:
             593          (a) the eligible customer makes the payments described in Subsection (5);
             594          (b) the eligible customer meets the requirements of Subsection (3);
             595          (c) the eligible customer, or a designee of the eligible customer, enters into any
             596      necessary agreements for:
             597          (i) the public utility's transmission provider to provide transmission service; and
             598          (ii) the nonutility energy supplier to provide service;
             599          (d) the installation described in Subsection (8) is completed; and
             600          (e) the notice described in Subsection (3)(a) is not considered to be withdrawn under
             601      Subsection (4).
             602          (10) (a) If an eligible customer that has been receiving electricity from a nonutility
             603      energy supplier gives the public utility and the commission at least 36 months' prior written
             604      notice of the eligible customer's intention to reinstate electric service from the public utility, the
             605      public utility shall reinstate electric service to the eligible customer:
             606          (i) under substantially the same terms as a new customer;
             607          (ii) beginning 36 months after the date the public utility receives the written notice; and
             608          (iii) (A) at rates stated in the public utility's applicable rate schedule; or
             609          (B) at a special contract rate agreed upon by the public utility and the eligible customer
             610      and approved by the commission.
             611          (b) The notice described in Subsection (10)(a) is irrevocable unless, during the time
             612      period beginning on the date the eligible customer provides the notice described in Subsection
             613      (10)(a) and ending on the date the public utility reinstates service, the public utility is no longer
             614      a vertically integrated utility providing electric service that includes generation and


             615      transmission.
             616          (c) If an eligible customer that has transferred service to a nonutility energy supplier
             617      elects to reinstate electric service from a public utility and receives the electric service from the
             618      public utility, the eligible customer may not transfer service to a nonutility energy supplier
             619      under this section.
             620          Section 5. Section 54-4-2 is amended to read:
             621           54-4-2. Investigations -- Hearings and notice -- Findings -- Applicability of
             622      chapter.
             623          (1) (a) [Whenever the commission believes that in order] The commission may
             624      conduct an investigation if the commission determines an investigation:
             625          (i) is necessary to secure [a] compliance with [the provisions of] this title or with [the
             626      orders] an order of the commission[, or that it will be otherwise in the interest of the public, an
             627      investigation];
             628          (ii) is in the public interest; or
             629          (iii) should be made of any act or omission to act, or of anything accomplished or
             630      proposed, or of any schedule, classification, rate, price, charge, fare, toll, rental, rule,
             631      regulation, service, or facility of any public utility[, it shall investigate the same upon its own
             632      motion, and may fix].
             633          (b) If the commission conducts an investigation under Subsection (1)(a), the
             634      commission may:
             635          (i) establish a time and place for a hearing [thereof with];
             636          (ii) provide notice to the public utility concerning [which such investigation shall be
             637      made, and upon such hearing shall make such] the investigation; and
             638          (iii) make findings and orders [as shall be] that are just and reasonable with respect to
             639      [any such matter] the investigation.
             640          (2) This chapter does not apply to a schedule, classification, rate, price, charge, fare,
             641      toll, rental, rule, service, facility, or contract of [a public utility or electrical corporation
             642      furnishing electricity,] an entity described in Subsection 54-2-1 (7)(b)(iii) or (iv), (17), or
             643      (19)(i), or if the electricity is consumed by [an owner, lessor, or interest holder or by an affiliate
             644      of an owner, lessor, or interest holder, who has provided at least $25,000,000 in value,
             645      including credit support, relating to the electric plant furnishing the electricity and whose


             646      consumption does not exceed its long-term entitlement in the plant under a long-term
             647      arrangement other than a power purchase agreement, except a power purchase agreement with
             648      an electrical corporation.] an eligible customer for the eligible customer's own use or the use of
             649      the eligible customer's tenant or affiliate.
             650          Section 6. Section 54-15-108 is amended to read:
             651           54-15-108. Damages and fines for connecting a customer generation system to
             652      more than one customer.
             653          If an independent energy producer defined in [Subsection 54-2-1 (13)] Section 54-2-1
             654      that is supplying energy to a customer [under] as described in Subsection
             655      54-2-1 [(16)](19)(d)(iv) violates the limitations set forth in Subsection
             656      54-2-1 [(16)](19)(d)(iv)(B), the commission may:
             657          (1) award damages to an electrical corporation for actual and consequential damages to
             658      the electrical corporation; and
             659          (2) assess a fine against the independent energy producer or person responsible for the
             660      violation.


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