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S.B. 89

             1     

AMENDMENTS TO DEFINITION OF PUBLIC UTILITY

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Stephen H. Urquhart

             5     
House Sponsor: Bradley G. Last

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends the definition of a "public utility."
             10      Highlighted Provisions:
             11          This bill:
             12          .    amends the definition of a "public utility"; and
             13          .    makes technical and conforming changes.
             14      Money Appropriated in this Bill:
             15          None
             16      Other Special Clauses:
             17          None
             18      Utah Code Sections Affected:
             19      AMENDS:
             20           54-2-1 , as last amended by Laws of Utah 2010, Chapters 302 and 390
             21     
             22      Be it enacted by the Legislature of the state of Utah:
             23          Section 1. Section 54-2-1 is amended to read:
             24           54-2-1. Definitions.
             25          As used in this title:
             26          (1) "Avoided costs" means the incremental costs to an electrical corporation of electric
             27      energy or capacity or both that, due to the purchase of electric energy or capacity or both from


             28      small power production or cogeneration facilities, the electrical corporation would not have to
             29      generate itself or purchase from another electrical corporation.
             30          (2) "Cogeneration facility":
             31          (a) means a facility that produces:
             32          (i) electric energy; and
             33          (ii) steam or forms of useful energy, including heat, that are used for industrial,
             34      commercial, heating, or cooling purposes; and
             35          (b) is a qualifying cogeneration facility under federal law.
             36          (3) "Commission" means the Public Service Commission of Utah.
             37          (4) "Commissioner" means a member of the commission.
             38          (5) (a) "Corporation" includes an association and a joint stock company having any
             39      powers or privileges not possessed by individuals or partnerships.
             40          (b) "Corporation" does not include towns, cities, counties, conservancy districts,
             41      improvement districts, or other governmental units created or organized under any general or
             42      special law of this state.
             43          (6) "Distribution electrical cooperative" includes an electrical corporation that:
             44          (a) is a cooperative;
             45          (b) conducts a business that includes the retail distribution of electricity the cooperative
             46      purchases or generates for the cooperative's members; and
             47          (c) is required to allocate or distribute savings in excess of additions to reserves and
             48      surplus on the basis of patronage to the cooperative's:
             49          (i) members; or
             50          (ii) patrons.
             51          (7) "Electrical corporation" includes every corporation, cooperative association, and
             52      person, their lessees, trustees, and receivers, owning, controlling, operating, or managing any
             53      electric plant, or in any way furnishing electric power for public service or to its consumers or
             54      members for domestic, commercial, or industrial use, within this state, except independent
             55      energy producers, and except where electricity is generated on or distributed by the producer
             56      solely for the producer's own use, or the use of the producer's tenants, or for the use of
             57      members of an association of unit owners formed under Title 57, Chapter 8, Condominium
             58      Ownership Act, and not for sale to the public generally, and except where the electricity


             59      generated is consumed by an owner, lessor, or interest holder, or by an affiliate of an owner,
             60      lessor, or interest holder, who has provided at least $25,000,000 in value, including credit
             61      support, relating to the electric plant furnishing the electricity and whose consumption does not
             62      exceed its long-term entitlement in the plant under a long-term arrangement other than a power
             63      purchase agreement, except a power purchase agreement with an electrical corporation.
             64          (8) "Electric plant" includes all real estate, fixtures, and personal property owned,
             65      controlled, operated, or managed in connection with or to facilitate the production, generation,
             66      transmission, delivery, or furnishing of electricity for light, heat, or power, and all conduits,
             67      ducts, or other devices, materials, apparatus, or property for containing, holding, or carrying
             68      conductors used or to be used for the transmission of electricity for light, heat, or power.
             69          (9) "Gas corporation" includes every corporation and person, their lessees, trustees, and
             70      receivers, owning, controlling, operating, or managing any gas plant for public service within
             71      this state or for the selling or furnishing of natural gas to any consumer or consumers within the
             72      state for domestic, commercial, or industrial use, except in the situation that:
             73          (a) gas is made or produced on, and distributed by the maker or producer through,
             74      private property:
             75          (i) solely for the maker's or producer's own use or the use of the maker's or producer's
             76      tenants; and
             77          (ii) not for sale to others;
             78          (b) gas is compressed on private property solely for the owner's own use or the use of
             79      the owner's employees as a motor vehicle fuel; or
             80          (c) gas is compressed by a retailer of motor vehicle fuel on the retailer's property solely
             81      for sale as a motor vehicle fuel.
             82          (10) "Gas plant" includes all real estate, fixtures, and personal property owned,
             83      controlled, operated, or managed in connection with or to facilitate the production, generation,
             84      transmission, delivery, or furnishing of gas, natural or manufactured, for light, heat, or power.
             85          (11) "Heat corporation" includes every corporation and person, their lessees, trustees,
             86      and receivers, owning, controlling, operating, or managing any heating plant for public service
             87      within this state.
             88          (12) (a) "Heating plant" includes all real estate, fixtures, machinery, appliances, and
             89      personal property controlled, operated, or managed in connection with or to facilitate the


             90      production, generation, transmission, delivery, or furnishing of artificial heat.
             91          (b) "Heating plant" does not include either small power production facilities or
             92      cogeneration facilities.
             93          (13) "Independent energy producer" means every electrical corporation, person,
             94      corporation, or government entity, their lessees, trustees, or receivers, that own, operate,
             95      control, or manage an independent power production or cogeneration facility.
             96          (14) "Independent power production facility" means a facility that:
             97          (a) produces electric energy solely by the use, as a primary energy source, of biomass,
             98      waste, a renewable resource, a geothermal resource, or any combination of the preceding
             99      sources; or
             100          (b) is a qualifying power production facility.
             101          (15) "Private telecommunications system" includes all facilities for the transmission of
             102      signs, signals, writing, images, sounds, messages, data, or other information of any nature by
             103      wire, radio, lightwaves, or other electromagnetic means, excluding mobile radio facilities, that
             104      are owned, controlled, operated, or managed by a corporation or person, including their lessees,
             105      trustees, receivers, or trustees appointed by any court, for the use of that corporation or person
             106      and not for the shared use with or resale to any other corporation or person on a regular basis.
             107          (16) (a) "Public utility" includes every railroad corporation, gas corporation, electrical
             108      corporation, distribution electrical cooperative, wholesale electrical cooperative, telephone
             109      corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation,
             110      and independent energy producer not described in Subsection (16)(d), where the service is
             111      performed for, or the commodity delivered to, the public generally, or in the case of a gas
             112      corporation or electrical corporation where the gas or electricity is sold or furnished to any
             113      member or consumers within the state for domestic, commercial, or industrial use.
             114          (b) (i) If any railroad corporation, gas corporation, electrical corporation, telephone
             115      corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation,
             116      or independent energy producer not described in Subsection (16)(d), performs a service for or
             117      delivers a commodity to the public, it is considered to be a public utility, subject to the
             118      jurisdiction and regulation of the commission and this title.
             119          (ii) If a gas corporation, independent energy producer not described in Subsection
             120      (16)(d), or electrical corporation sells or furnishes gas or electricity to any member or


             121      consumers within the state, for domestic, commercial, or industrial use, for which any
             122      compensation or payment is received, it is considered to be a public utility, subject to the
             123      jurisdiction and regulation of the commission and this title.
             124          (c) Any corporation or person not engaged in business exclusively as a public utility as
             125      defined in this section is governed by this title in respect only to the public utility owned,
             126      controlled, operated, or managed by the corporation or person, and not in respect to any other
             127      business or pursuit.
             128          (d) An independent energy producer is exempt from the jurisdiction and regulations of
             129      the commission with respect to an independent power production facility if it meets the
             130      requirements of Subsection (16)(d)(i), (ii), (iii), or (iv), or any combination of these:
             131          (i) the commodity or service is produced or delivered, or both, by an independent
             132      energy producer solely for the uses exempted in Subsection (7) or for the use of state-owned
             133      facilities;
             134          (ii) the commodity or service is sold by an independent energy producer solely to an
             135      electrical corporation or other wholesale purchaser;
             136          (iii) (A) the commodity or service produced or delivered by the independent energy
             137      producer is delivered to an entity that controls, is controlled by, or affiliated with the
             138      independent energy producer or to a user located on real property managed or controlled by the
             139      independent energy producer; and
             140          (B) the real property on which the service or commodity is used is contiguous to real
             141      property which is owned or controlled by the independent energy producer. Parcels of real
             142      property separated solely by public roads or easements for public roads shall be considered as
             143      contiguous for purposes of this Subsection (16); or
             144          (iv) the independent energy producer:
             145          (A) supplies energy for direct consumption by a customer that is:
             146          (I) a United States governmental entity, including an entity of the United States
             147      military, or a county, municipality, city, town, other political subdivision, local district, special
             148      service district, state institution of higher education, school district, charter school, or any
             149      entity within the state system of public education; or
             150          (II) an entity qualifying as a charitable organization under 26 U.S.C. Sec. 501(c)(3)
             151      operated for religious, charitable, or educational purposes that is exempt from federal income


             152      tax and able to demonstrate its tax-exempt status;
             153          (B) supplies energy to the customer through use of a customer generation system, as
             154      defined in Section 54-15-102 , for use on the real property where the customer generation
             155      system is located;
             156          (C) supplies energy using a customer generation system designed to supply the lesser
             157      of:
             158          (I) no more than 90% of the average annual consumption of electricity by the customer
             159      at that site, based on an annualized billing period; or
             160          (II) the maximum size allowable under net metering provisions, defined in Section
             161      54-15-102 ;
             162          (D) notifies the customer before installing the customer generation system of:
             163          (I) all costs the customer is required to pay for the customer generation system,
             164      including any interconnection costs; and
             165          (II) the potential for future changes in amounts paid by the customer for energy
             166      received from the public utility and the possibility of changes to the customer fees or charges to
             167      the customer associated with net metering and generation; and
             168          (E) enters into and performs in accordance with an interconnection agreement with a
             169      public utility providing retail electric service where the real property on which the customer
             170      generation system is located, with the rates, terms, and conditions of the retail service and
             171      interconnection agreement subject to approval by the governing authority of the public utility,
             172      as defined in Subsection 54-15-102 (8)[; and].
             173          [(F) installs the relevant customer generation system by December 31, 2015.]
             174          (e) Any person or corporation defined as an electrical corporation or public utility
             175      under this section may continue to serve its existing customers subject to any order or future
             176      determination of the commission in reference to the right to serve those customers.
             177          (f) (i) "Public utility" does not include any person that is otherwise considered a public
             178      utility under this Subsection (16) solely because of that person's ownership of an interest in an
             179      electric plant, cogeneration facility, or small power production facility in this state if all of the
             180      following conditions are met:
             181          (A) the ownership interest in the electric plant, cogeneration facility, or small power
             182      production facility is leased to:


             183          (I) a public utility, and that lease has been approved by the commission;
             184          (II) a person or government entity that is exempt from commission regulation as a
             185      public utility; or
             186          (III) a combination of Subsections (16)(f)(i)(A)(I) and (II);
             187          (B) the lessor of the ownership interest identified in Subsection (16)(f)(i)(A) is:
             188          (I) primarily engaged in a business other than the business of a public utility; or
             189          (II) a person whose total equity or beneficial ownership is held directly or indirectly by
             190      another person engaged in a business other than the business of a public utility; and
             191          (C) the rent reserved under the lease does not include any amount based on or
             192      determined by revenues or income of the lessee.
             193          (ii) Any person that is exempt from classification as a public utility under Subsection
             194      (16)(f)(i) shall continue to be so exempt from classification following termination of the
             195      lessee's right to possession or use of the electric plant for so long as the former lessor does not
             196      operate the electric plant or sell electricity from the electric plant. If the former lessor operates
             197      the electric plant or sells electricity, the former lessor shall continue to be so exempt for a
             198      period of 90 days following termination, or for a longer period that is ordered by the
             199      commission. This period may not exceed one year. A change in rates that would otherwise
             200      require commission approval may not be effective during the 90-day or extended period
             201      without commission approval.
             202          (g) "Public utility" does not include any person that provides financing for, but has no
             203      ownership interest in an electric plant, small power production facility, or cogeneration facility.
             204      In the event of a foreclosure in which an ownership interest in an electric plant, small power
             205      production facility, or cogeneration facility is transferred to a third-party financer of an electric
             206      plant, small power production facility, or cogeneration facility, then that third-party financer is
             207      exempt from classification as a public utility for 90 days following the foreclosure, or for a
             208      longer period that is ordered by the commission. This period may not exceed one year.
             209          (h) (i) The distribution or transportation of natural gas for use as a motor vehicle fuel
             210      does not cause the distributor or transporter to be a "public utility," unless the commission,
             211      after notice and a public hearing, determines by rule that it is in the public interest to regulate
             212      the distributers or transporters, but the retail sale alone of compressed natural gas as a motor
             213      vehicle fuel may not cause the seller to be a "public utility."


             214          (ii) In determining whether it is in the public interest to regulate the distributors or
             215      transporters, the commission shall consider, among other things, the impact of the regulation
             216      on the availability and price of natural gas for use as a motor fuel.
             217          (i) "Public utility" does not include any corporation, cooperative association, or person,
             218      their affiliates, lessees, trustees, or receivers, owning, controlling, operating, or managing an
             219      electric plant or in any way furnishing electricity if the electricity is consumed by an owner,
             220      lessor, or interest holder or by an affiliate of an owner, lessor, or interest holder, who has
             221      provided at least $25,000,000 in value, including credit support, relating to the electric plant
             222      furnishing the electricity and whose consumption does not exceed its long-term entitlement in
             223      the plant under a long-term arrangement other than a power purchase agreement, except a
             224      power purchase agreement with an electrical corporation.
             225          (17) "Purchasing utility" means any electrical corporation that is required to purchase
             226      electricity from small power production or cogeneration facilities pursuant to the Public Utility
             227      Regulatory Policies Act, 16 U.S.C. Section 824a-3.
             228          (18) "Qualifying power producer" means a corporation, cooperative association, or
             229      person, or the lessee, trustee, and receiver of the corporation, cooperative association, or
             230      person, who owns, controls, operates, or manages any qualifying power production facility or
             231      cogeneration facility.
             232          (19) "Qualifying power production facility" means a facility that:
             233          (a) produces electrical energy solely by the use, as a primary energy source, of biomass,
             234      waste, a renewable resource, a geothermal resource, or any combination of the preceding
             235      sources;
             236          (b) has a power production capacity that, together with any other facilities located at
             237      the same site, is no greater than 80 megawatts; and
             238          (c) is a qualifying small power production facility under federal law.
             239          (20) "Railroad" includes every commercial, interurban, and other railway, other than a
             240      street railway, and each branch or extension of a railway, by any power operated, together with
             241      all tracks, bridges, trestles, rights-of-way, subways, tunnels, stations, depots, union depots,
             242      yards, grounds, terminals, terminal facilities, structures, and equipment, and all other real
             243      estate, fixtures, and personal property of every kind used in connection with a railway owned,
             244      controlled, operated, or managed for public service in the transportation of persons or property.


             245          (21) "Railroad corporation" includes every corporation and person, their lessees,
             246      trustees, and receivers, owning, controlling, operating, or managing any railroad for public
             247      service within this state.
             248          (22) (a) "Sewerage corporation" includes every corporation and person, their lessees,
             249      trustees, and receivers, owning, controlling, operating, or managing any sewerage system for
             250      public service within this state.
             251          (b) "Sewerage corporation" does not include private sewerage companies engaged in
             252      disposing of sewage only for their stockholders, or towns, cities, counties, conservancy
             253      districts, improvement districts, or other governmental units created or organized under any
             254      general or special law of this state.
             255          (23) "Telegraph corporation" includes every corporation and person, their lessees,
             256      trustees, and receivers, owning, controlling, operating, or managing any telegraph line for
             257      public service within this state.
             258          (24) "Telegraph line" includes all conduits, ducts, poles, wires, cables, instruments, and
             259      appliances, and all other real estate, fixtures, and personal property owned, controlled,
             260      operated, or managed in connection with or to facilitate communication by telegraph, whether
             261      that communication be had with or without the use of transmission wires.
             262          (25) (a) "Telephone corporation" means any corporation or person, and their lessees,
             263      trustee, receivers, or trustees appointed by any court, who owns, controls, operates, manages, or
             264      resells a public telecommunications service as defined in Section 54-8b-2 .
             265          (b) "Telephone corporation" does not mean a corporation, partnership, or firm
             266      providing:
             267          (i) intrastate telephone service offered by a provider of cellular, personal
             268      communication systems (PCS), or other commercial mobile radio service as defined in 47
             269      U.S.C. Sec. 332 that has been issued a covering license by the Federal Communications
             270      Commission;
             271          (ii) Internet service; or
             272          (iii) resold intrastate toll service.
             273          (26) "Telephone line" includes all conduits, ducts, poles, wires, cables, instruments,
             274      and appliances, and all other real estate, fixtures, and personal property owned, controlled,
             275      operated, or managed in connection with or to facilitate communication by telephone whether


             276      that communication is had with or without the use of transmission wires.
             277          (27) "Transportation of persons" includes every service in connection with or
             278      incidental to the safety, comfort, or convenience of the person transported, and the receipt,
             279      carriage, and delivery of that person and that person's baggage.
             280          (28) "Transportation of property" includes every service in connection with or
             281      incidental to the transportation of property, including in particular its receipt, delivery,
             282      elevation, transfer, switching, carriage, ventilation, refrigeration, icing, dunnage, storage, and
             283      hauling, and the transmission of credit by express companies.
             284          (29) "Water corporation" includes every corporation and person, their lessees, trustees,
             285      and receivers, owning, controlling, operating, or managing any water system for public service
             286      within this state. It does not include private irrigation companies engaged in distributing water
             287      only to their stockholders, or towns, cities, counties, water conservancy districts, improvement
             288      districts, or other governmental units created or organized under any general or special law of
             289      this state.
             290          (30) (a) "Water system" includes all reservoirs, tunnels, shafts, dams, dikes, headgates,
             291      pipes, flumes, canals, structures, and appliances, and all other real estate, fixtures, and personal
             292      property owned, controlled, operated, or managed in connection with or to facilitate the
             293      diversion, development, storage, supply, distribution, sale, furnishing, carriage, appointment,
             294      apportionment, or measurement of water for power, fire protection, irrigation, reclamation, or
             295      manufacturing, or for municipal, domestic, or other beneficial use.
             296          (b) "Water system" does not include private irrigation companies engaged in
             297      distributing water only to their stockholders.
             298          (31) "Wholesale electrical cooperative" includes every electrical corporation that is:
             299          (a) in the business of the wholesale distribution of electricity it has purchased or
             300      generated to its members and the public; and
             301          (b) required to distribute or allocate savings in excess of additions to reserves and
             302      surplus to members or patrons on the basis of patronage.





Legislative Review Note
    as of 1-31-14 10:37 AM


Office of Legislative Research and General Counsel


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