1     
SUSTAINABLE TRANSPORTATION AND ENERGY PLAN ACT

2     
2016 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: J. Stuart Adams

5     
House Sponsor: V. Lowry Snow

6     

7     LONG TITLE
8     General Description:
9          This bill amends provisions related to a public utility providing electrical service.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     allows the Public Service Commission to authorize a large-scale electric utility to
14     implement tariffs to provide funding for a sustainable transportation and energy
15     pilot program;
16          ▸     allows an electrical corporation to recover 100% of the electrical corporation's
17     prudently incurred costs in an energy balancing account;
18          ▸     allows a large-scale electric utility to establish innovative electric efficiency
19     technology programs;
20          ▸     allows a large-scale electric utility to provide an incentive for:
21               •     a generation facility to curtail electricity generation to improve air quality; and
22               •     creation of an electric vehicle infrastructure;
23          ▸     provides that the commission may authorize a large-scale electric utility to
24     implement:
25               •     a clean coal program; and
26               •     other utility programs;
27          ▸     provides a repeal date;
28          ▸     enacts a provision related to withdrawal of notice to transfer electric service; and
29          ▸     allows the commission to implement a conservation, efficiency, or technology

30     program if the program is cost-effective and in the public interest.
31     Money Appropriated in this Bill:
32          None
33     Other Special Clauses:
34          None
35     Utah Code Sections Affected:
36     AMENDS:
37          54-2-1, as last amended by Laws of Utah 2014, Chapters 20, 381, and 388
38          54-7-12.8, as last amended by Laws of Utah 2009, Chapter 237
39          54-7-13.5, as enacted by Laws of Utah 2009, Chapter 319
40          54-17-801, as last amended by Laws of Utah 2014, Chapter 34
41          63I-1-254, as last amended by Laws of Utah 2013, Chapter 311
42     ENACTS:
43          54-3-33, Utah Code Annotated 1953
44          54-17-806, Utah Code Annotated 1953
45          54-20-101, Utah Code Annotated 1953
46          54-20-102, Utah Code Annotated 1953
47          54-20-103, Utah Code Annotated 1953
48          54-20-104, Utah Code Annotated 1953
49          54-20-105, Utah Code Annotated 1953
50          54-20-106, Utah Code Annotated 1953
51          54-20-107, Utah Code Annotated 1953
52     

53     Be it enacted by the Legislature of the state of Utah:
54          Section 1. Section 54-2-1 is amended to read:
55          54-2-1. Definitions.
56          As used in this title:
57          (1) "Avoided costs" means the incremental costs to an electrical corporation of electric

58     energy or capacity or both that, due to the purchase of electric energy or capacity or both from
59     small power production or cogeneration facilities, the electrical corporation would not have to
60     generate itself or purchase from another electrical corporation.
61          (2) "Clean coal technology" means a technology that may be researched, developed, or
62     used for reducing emissions or the rate of emissions from a thermal electric generation plant
63     that uses coal as a fuel source.
64          [(2)] (3) "Cogeneration facility":
65          (a) means a facility that produces:
66          (i) electric energy; and
67          (ii) steam or forms of useful energy, including heat, that are used for industrial,
68     commercial, heating, or cooling purposes; and
69          (b) is a qualifying cogeneration facility under federal law.
70          [(3)] (4) "Commission" means the Public Service Commission [of Utah].
71          [(4)] (5) "Commissioner" means a member of the commission.
72          [(5)] (6) (a) "Corporation" includes an association and a joint stock company having
73     any powers or privileges not possessed by individuals or partnerships.
74          (b) "Corporation" does not include towns, cities, counties, conservancy districts,
75     improvement districts, or other governmental units created or organized under any general or
76     special law of this state.
77          [(6)] (7) "Distribution electrical cooperative" includes an electrical corporation that:
78          (a) is a cooperative;
79          (b) conducts a business that includes the retail distribution of electricity the cooperative
80     purchases or generates for the cooperative's members; and
81          (c) is required to allocate or distribute savings in excess of additions to reserves and
82     surplus on the basis of patronage to the cooperative's:
83          (i) members; or
84          (ii) patrons.
85          [(7)] (8) (a) "Electrical corporation" includes every corporation, cooperative

86     association, and person, their lessees, trustees, and receivers, owning, controlling, operating, or
87     managing any electric plant, or in any way furnishing electric power for public service or to its
88     consumers or members for domestic, commercial, or industrial use, within this state.
89          (b) "Electrical corporation" does not include:
90          (i) an independent energy producer;
91          (ii) where electricity is generated on or distributed by the producer solely for the
92     producer's own use, or the use of the producer's tenants, or the use of members of an
93     association of unit owners formed under Title 57, Chapter 8, Condominium Ownership Act,
94     and not for sale to the public generally;
95          (iii) an eligible customer who provides electricity for the eligible customer's own use or
96     the use of the eligible customer's tenant or affiliate; or
97          (iv) a nonutility energy supplier who sells or provides electricity to:
98          (A) an eligible customer who has transferred the eligible customer's service to the
99     nonutility energy supplier in accordance with Section 54-3-32; or
100          (B) the eligible customer's tenant or affiliate.
101          (c) "Electrical corporation" does not include an entity that sells electric vehicle battery
102     charging services, unless the entity conducts another activity in the state that subjects the entity
103     to the jurisdiction and regulation of the commission as an electrical corporation.
104          [(8)] (9) "Electric plant" includes all real estate, fixtures, and personal property owned,
105     controlled, operated, or managed in connection with or to facilitate the production, generation,
106     transmission, delivery, or furnishing of electricity for light, heat, or power, and all conduits,
107     ducts, or other devices, materials, apparatus, or property for containing, holding, or carrying
108     conductors used or to be used for the transmission of electricity for light, heat, or power.
109          [(9)] (10) "Eligible customer" means a person who:
110          (a) on December 31, 2013:
111          (i) was a customer of a public utility that, on December 31, 2013, had more than
112     200,000 retail customers in this state; and
113          (ii) owned an electric plant that is an electric generation plant that, on December 31,

114     2013, had a generation name plate capacity of greater than 150 megawatts; and
115          (b) produces electricity:
116          (i) from a qualifying power production facility for sale to a public utility in this state;
117          (ii) primarily for the eligible customer's own use; or
118          (iii) for the use of the eligible customer's tenant or affiliate.
119          [(10)] (11) "Eligible customer's tenant or affiliate" means one or more tenants or
120     affiliates:
121          (a) of an eligible customer; and
122          (b) who are primarily engaged in an activity:
123          (i) related to the eligible customer's core mining or industrial businesses; and
124          (ii) performed on real property that is:
125          (A) within a 25-mile radius of the electric plant described in Subsection [(9)]
126     (10)(a)(ii); and
127          (B) owned by, controlled by, or under common control with, the eligible customer.
128          [(11)] (12) "Gas corporation" includes every corporation and person, their lessees,
129     trustees, and receivers, owning, controlling, operating, or managing any gas plant for public
130     service within this state or for the selling or furnishing of natural gas to any consumer or
131     consumers within the state for domestic, commercial, or industrial use, except in the situation
132     that:
133          (a) gas is made or produced on, and distributed by the maker or producer through,
134     private property:
135          (i) solely for the maker's or producer's own use or the use of the maker's or producer's
136     tenants; and
137          (ii) not for sale to others;
138          (b) gas is compressed on private property solely for the owner's own use or the use of
139     the owner's employees as a motor vehicle fuel; or
140          (c) gas is compressed by a retailer of motor vehicle fuel on the retailer's property solely
141     for sale as a motor vehicle fuel.

142          [(12)] (13) "Gas plant" includes all real estate, fixtures, and personal property owned,
143     controlled, operated, or managed in connection with or to facilitate the production, generation,
144     transmission, delivery, or furnishing of gas, natural or manufactured, for light, heat, or power.
145          [(13)] (14) "Heat corporation" includes every corporation and person, their lessees,
146     trustees, and receivers, owning, controlling, operating, or managing any heating plant for public
147     service within this state.
148          [(14)] (15) (a) "Heating plant" includes all real estate, fixtures, machinery, appliances,
149     and personal property controlled, operated, or managed in connection with or to facilitate the
150     production, generation, transmission, delivery, or furnishing of artificial heat.
151          (b) "Heating plant" does not include either small power production facilities or
152     cogeneration facilities.
153          [(15)] (16) "Independent energy producer" means every electrical corporation, person,
154     corporation, or government entity, their lessees, trustees, or receivers, that own, operate,
155     control, or manage an independent power production or cogeneration facility.
156          [(16)] (17) "Independent power production facility" means a facility that:
157          (a) produces electric energy solely by the use, as a primary energy source, of biomass,
158     waste, a renewable resource, a geothermal resource, or any combination of the preceding
159     sources; or
160          (b) is a qualifying power production facility.
161          (18) "Large-scale electric utility" means a public utility that provides retail electric
162     service to more than 200,000 retail customers in the state.
163          [(17)] (19) "Nonutility energy supplier" means a person that:
164          (a) has received market-based rate authority from the Federal Energy Regulatory
165     Commission in accordance with 16 U.S.C. Sec. 824d, 18 C.F.R. Part 35, Filing of Rate
166     Schedules and Tariffs, or applicable Federal Energy Regulatory Commission orders; or
167          (b) owns, leases, operates, or manages an electric plant that is an electric generation
168     plant that:
169          (i) has a capacity of greater than 100 megawatts; and

170          (ii) is hosted on the site of an eligible customer that consumes the output of the electric
171     plant, in whole or in part, for the eligible customer's own use or the use of the eligible
172     customer's tenant or affiliate.
173          [(18)] (20) "Private telecommunications system" includes all facilities for the
174     transmission of signs, signals, writing, images, sounds, messages, data, or other information of
175     any nature by wire, radio, lightwaves, or other electromagnetic means, excluding mobile radio
176     facilities, that are owned, controlled, operated, or managed by a corporation or person,
177     including their lessees, trustees, receivers, or trustees appointed by any court, for the use of that
178     corporation or person and not for the shared use with or resale to any other corporation or
179     person on a regular basis.
180          [(19)] (21) (a) "Public utility" includes every railroad corporation, gas corporation,
181     electrical corporation, distribution electrical cooperative, wholesale electrical cooperative,
182     telephone corporation, telegraph corporation, water corporation, sewerage corporation, heat
183     corporation, and independent energy producer not described in Subsection [(19)] (21)(d),
184     where the service is performed for, or the commodity delivered to, the public generally, or in
185     the case of a gas corporation or electrical corporation where the gas or electricity is sold or
186     furnished to any member or consumers within the state for domestic, commercial, or industrial
187     use.
188          (b) (i) If any railroad corporation, gas corporation, electrical corporation, telephone
189     corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation,
190     or independent energy producer not described in Subsection [(19)] (21)(d), performs a service
191     for or delivers a commodity to the public, it is considered to be a public utility, subject to the
192     jurisdiction and regulation of the commission and this title.
193          (ii) If a gas corporation, independent energy producer not described in Subsection
194     [(19)] (21)(d), or electrical corporation sells or furnishes gas or electricity to any member or
195     consumers within the state, for domestic, commercial, or industrial use, for which any
196     compensation or payment is received, it is considered to be a public utility, subject to the
197     jurisdiction and regulation of the commission and this title.

198          (c) Any corporation or person not engaged in business exclusively as a public utility as
199     defined in this section is governed by this title in respect only to the public utility owned,
200     controlled, operated, or managed by the corporation or person, and not in respect to any other
201     business or pursuit.
202          (d) An independent energy producer is exempt from the jurisdiction and regulations of
203     the commission with respect to an independent power production facility if it meets the
204     requirements of Subsection [(19)] (21)(d)(i), (ii), (iii), or (iv), or any combination of these:
205          (i) the commodity or service is produced or delivered, or both, by an independent
206     energy producer solely for a use described in Subsections [(7)] (8)(b)(ii) through (iv) or for the
207     use of state-owned facilities;
208          (ii) the commodity or service is sold by an independent energy producer solely to an
209     electrical corporation or other wholesale purchaser;
210          (iii) (A) the commodity or service produced or delivered by the independent energy
211     producer is delivered to an entity that controls, is controlled by, or affiliated with the
212     independent energy producer or to a user located on real property managed or controlled by the
213     independent energy producer; and
214          (B) the real property on which the service or commodity is used is contiguous to real
215     property that is owned or controlled by the independent energy producer or is separated only by
216     a public road or an easement for a public road; or
217          (iv) the independent energy producer:
218          (A) supplies energy for direct consumption by a customer that is:
219          (I) a United States governmental entity, including an entity of the United States
220     military, or a county, municipality, city, town, other political subdivision, local district, special
221     service district, state institution of higher education, school district, charter school, or any
222     entity within the state system of public education; or
223          (II) an entity qualifying as a charitable organization under 26 U.S.C. Sec. 501(c)(3)
224     operated for religious, charitable, or educational purposes that is exempt from federal income
225     tax and able to demonstrate its tax-exempt status;

226          (B) supplies energy to the customer through use of a customer generation system, as
227     defined in Section 54-15-102, for use on the real property where the customer generation
228     system is located;
229          (C) supplies energy using a customer generation system designed to supply the lesser
230     of:
231          (I) no more than 90% of the average annual consumption of electricity by the customer
232     at that site, based on an annualized billing period; or
233          (II) the maximum size allowable under net metering provisions, defined in Section
234     54-15-102;
235          (D) notifies the customer before installing the customer generation system of:
236          (I) all costs the customer is required to pay for the customer generation system,
237     including any interconnection costs; and
238          (II) the potential for future changes in amounts paid by the customer for energy
239     received from the public utility and the possibility of changes to the customer fees or charges to
240     the customer associated with net metering and generation;
241          (E) enters into and performs in accordance with an interconnection agreement with a
242     public utility providing retail electric service where the real property on which the customer
243     generation system is located, with the rates, terms, and conditions of the retail service and
244     interconnection agreement subject to approval by the governing authority of the public utility,
245     as defined in Subsection 54-15-102(8); and
246          (F) installs the relevant customer generation system by December 31, 2021.
247          (e) Any person or corporation defined as an electrical corporation or public utility
248     under this section may continue to serve its existing customers subject to any order or future
249     determination of the commission in reference to the right to serve those customers.
250          (f) (i) "Public utility" does not include any person that is otherwise considered a public
251     utility under this Subsection [(19)] (21) solely because of that person's ownership of an interest
252     in an electric plant, cogeneration facility, or small power production facility in this state if all of
253     the following conditions are met:

254          (A) the ownership interest in the electric plant, cogeneration facility, or small power
255     production facility is leased to:
256          (I) a public utility, and that lease has been approved by the commission;
257          (II) a person or government entity that is exempt from commission regulation as a
258     public utility; or
259          (III) a combination of Subsections [(19)] (21)(f)(i)(A)(I) and (II);
260          (B) the lessor of the ownership interest identified in Subsection [(19)] (21)(f)(i)(A) is:
261          (I) primarily engaged in a business other than the business of a public utility; or
262          (II) a person whose total equity or beneficial ownership is held directly or indirectly by
263     another person engaged in a business other than the business of a public utility; and
264          (C) the rent reserved under the lease does not include any amount based on or
265     determined by revenues or income of the lessee.
266          (ii) Any person that is exempt from classification as a public utility under Subsection
267     [(19)] (21)(f)(i) shall continue to be [so] exempt from classification following termination of
268     the lessee's right to possession or use of the electric plant for so long as the former lessor does
269     not operate the electric plant or sell electricity from the electric plant. If the former lessor
270     operates the electric plant or sells electricity, the former lessor shall continue to be so exempt
271     for a period of 90 days following termination, or for a longer period that is ordered by the
272     commission. This period may not exceed one year. A change in rates that would otherwise
273     require commission approval may not be effective during the 90-day or extended period
274     without commission approval.
275          (g) "Public utility" does not include any person that provides financing for, but has no
276     ownership interest in an electric plant, small power production facility, or cogeneration facility.
277     In the event of a foreclosure in which an ownership interest in an electric plant, small power
278     production facility, or cogeneration facility is transferred to a third-party financer of an electric
279     plant, small power production facility, or cogeneration facility, then that third-party financer is
280     exempt from classification as a public utility for 90 days following the foreclosure, or for a
281     longer period that is ordered by the commission. This period may not exceed one year.

282          (h) (i) The distribution or transportation of natural gas for use as a motor vehicle fuel
283     does not cause the distributor or transporter to be a "public utility," unless the commission,
284     after notice and a public hearing, determines by rule that it is in the public interest to regulate
285     the distributers or transporters, but the retail sale alone of compressed natural gas as a motor
286     vehicle fuel may not cause the seller to be a "public utility."
287          (ii) In determining whether it is in the public interest to regulate the distributors or
288     transporters, the commission shall consider, among other things, the impact of the regulation
289     on the availability and price of natural gas for use as a motor fuel.
290          (i) "Public utility" does not include:
291          (i) an eligible customer who provides electricity for the eligible customer's own use or
292     the use of the eligible customer's tenant or affiliate; or
293          (ii) a nonutility energy supplier that sells or provides electricity to:
294          (A) an eligible customer who has transferred the eligible customer's service to the
295     nonutility energy supplier in accordance with Section 54-3-32; or
296          (B) the eligible customer's tenant or affiliate.
297          (j) "Public utility" does not include an entity that sells electric vehicle battery charging
298     services, unless the entity conducts another activity in the state that subjects the entity to the
299     jurisdiction and regulation of the commission as a public utility.
300          [(20)] (22) "Purchasing utility" means any electrical corporation that is required to
301     purchase electricity from small power production or cogeneration facilities pursuant to the
302     Public Utility Regulatory Policies Act, 16 U.S.C. Section 824a-3.
303          [(21)] (23) "Qualifying power producer" means a corporation, cooperative association,
304     or person, or the lessee, trustee, and receiver of the corporation, cooperative association, or
305     person, who owns, controls, operates, or manages any qualifying power production facility or
306     cogeneration facility.
307          [(22)] (24) "Qualifying power production facility" means a facility that:
308          (a) produces electrical energy solely by the use, as a primary energy source, of biomass,
309     waste, a renewable resource, a geothermal resource, or any combination of the preceding

310     sources;
311          (b) has a power production capacity that, together with any other facilities located at
312     the same site, is no greater than 80 megawatts; and
313          (c) is a qualifying small power production facility under federal law.
314          [(23)] (25) "Railroad" includes every commercial, interurban, and other railway, other
315     than a street railway, and each branch or extension of a railway, by any power operated,
316     together with all tracks, bridges, trestles, rights-of-way, subways, tunnels, stations, depots,
317     union depots, yards, grounds, terminals, terminal facilities, structures, and equipment, and all
318     other real estate, fixtures, and personal property of every kind used in connection with a
319     railway owned, controlled, operated, or managed for public service in the transportation of
320     persons or property.
321          [(24)] (26) "Railroad corporation" includes every corporation and person, their lessees,
322     trustees, and receivers, owning, controlling, operating, or managing any railroad for public
323     service within this state.
324          [(25)] (27) (a) "Sewerage corporation" includes every corporation and person, their
325     lessees, trustees, and receivers, owning, controlling, operating, or managing any sewerage
326     system for public service within this state.
327          (b) "Sewerage corporation" does not include private sewerage companies engaged in
328     disposing of sewage only for their stockholders, or towns, cities, counties, conservancy
329     districts, improvement districts, or other governmental units created or organized under any
330     general or special law of this state.
331          [(26)] (28) "Telegraph corporation" includes every corporation and person, their
332     lessees, trustees, and receivers, owning, controlling, operating, or managing any telegraph line
333     for public service within this state.
334          [(27)] (29) "Telegraph line" includes all conduits, ducts, poles, wires, cables,
335     instruments, and appliances, and all other real estate, fixtures, and personal property owned,
336     controlled, operated, or managed in connection with or to facilitate communication by
337     telegraph, whether that communication be had with or without the use of transmission wires.

338          [(28)] (30) (a) "Telephone corporation" means any corporation or person, and their
339     lessees, trustee, receivers, or trustees appointed by any court, who owns, controls, operates,
340     manages, or resells a public telecommunications service as defined in Section 54-8b-2.
341          (b) "Telephone corporation" does not mean a corporation, partnership, or firm
342     providing:
343          (i) intrastate telephone service offered by a provider of cellular, personal
344     communication systems (PCS), or other commercial mobile radio service as defined in 47
345     U.S.C. Sec. 332 that has been issued a covering license by the Federal Communications
346     Commission;
347          (ii) Internet service; or
348          (iii) resold intrastate toll service.
349          [(29)] (31) "Telephone line" includes all conduits, ducts, poles, wires, cables,
350     instruments, and appliances, and all other real estate, fixtures, and personal property owned,
351     controlled, operated, or managed in connection with or to facilitate communication by
352     telephone whether that communication is had with or without the use of transmission wires.
353          [(30)] (32) "Transportation of persons" includes every service in connection with or
354     incidental to the safety, comfort, or convenience of the person transported, and the receipt,
355     carriage, and delivery of that person and that person's baggage.
356          [(31)] (33) "Transportation of property" includes every service in connection with or
357     incidental to the transportation of property, including in particular its receipt, delivery,
358     elevation, transfer, switching, carriage, ventilation, refrigeration, icing, dunnage, storage, and
359     hauling, and the transmission of credit by express companies.
360          [(32)] (34) "Water corporation" includes every corporation and person, their lessees,
361     trustees, and receivers, owning, controlling, operating, or managing any water system for
362     public service within this state. It does not include private irrigation companies engaged in
363     distributing water only to their stockholders, or towns, cities, counties, water conservancy
364     districts, improvement districts, or other governmental units created or organized under any
365     general or special law of this state.

366          [(33)] (35) (a) "Water system" includes all reservoirs, tunnels, shafts, dams, dikes,
367     headgates, pipes, flumes, canals, structures, and appliances, and all other real estate, fixtures,
368     and personal property owned, controlled, operated, or managed in connection with or to
369     facilitate the diversion, development, storage, supply, distribution, sale, furnishing, carriage,
370     appointment, apportionment, or measurement of water for power, fire protection, irrigation,
371     reclamation, or manufacturing, or for municipal, domestic, or other beneficial use.
372          (b) "Water system" does not include private irrigation companies engaged in
373     distributing water only to their stockholders.
374          [(34)] (36) "Wholesale electrical cooperative" includes every electrical corporation that
375     is:
376          (a) in the business of the wholesale distribution of electricity it has purchased or
377     generated to its members and the public; and
378          (b) required to distribute or allocate savings in excess of additions to reserves and
379     surplus to members or patrons on the basis of patronage.
380          Section 2. Section 54-3-33 is enacted to read:
381          54-3-33. Eligible customer energy supply contract.
382          (1) The commission may approve a contract between a large-scale electric utility and a
383     customer of a large-scale electric utility that is eligible to transfer electric service to a
384     non-utility energy supplier under Section 54-3-32.
385          (2) The commission shall exempt a customer that enters into a contract described in
386     Subsection (1) from paying the costs recovered under Subsection 54-7-12.8(3), except the costs
387     of the Utah solar incentive program included in Subsection 54-7-12.8(3)(b).
388          (3) If an eligible customer that enters into a contract described in Subsection (1) has
389     provided notice to the commission under Subsection 54-3-32(3), the notice is not considered
390     withdrawn under Subsection 54-3-32(4)(c) by the customer entering into the contract.
391          (4) Notwithstanding Subsection 54-3-32(4)(c), if the commission approves a contract
392     under this section for an eligible customer that states a contract termination date that is after
393     December 31, 2020, the notice described in Subsection 54-3-32(3)(a) is not considered to be

394     withdrawn unless a transfer of service under Section 54-3-32 does not occur before the later of:
395          (a) the day three years after the termination date stated in the contract; or
396          (b) 18 months after the intended date of transfer of service described in Subsection
397     54-3-32(3)(a)(ii).
398          Section 3. Section 54-7-12.8 is amended to read:
399          54-7-12.8. Electric energy efficiency, sustainable transportation and energy, and
400     conservation tariff.
401          (1) As used in this section[, "demand]:
402          (a) "Demand side management" means [activities or programs that promote] an activity
403     or program that promotes electric energy efficiency or conservation or more efficient
404     management of electric energy loads.
405          (b) "Pilot program period" means a period of five years, beginning on January 1, 2017,
406     during which the sustainable transportation and energy plan is effective.
407          (c) "Sustainable transportation and energy plan" means the same as that term is defined
408     in Section 54-20-102.
409          (d) "Utah solar incentive program" means the eligible utility rooftop solar pilot
410     program established by commission order in 2012.
411          (2) (a) As provided in this section, the commission may approve a tariff under which
412     an electrical corporation includes a line item charge on [its] the electrical corporation's
413     customers' bills to recover costs incurred by the electrical corporation for demand side
414     management.
415          (b) The commission shall authorize a large-scale electric utility that is allowed to
416     charge a customer for demand side management under Subsection (2)(a) to:
417          (i) if requested by the large-scale electric utility, capitalize the annual costs incurred for
418     demand side management provided in Subsection (2)(a);
419          (ii) amortize the annual cost for demand side management over a period of 10 years;
420          (iii) apply a carrying charge to the unamortized balance that is equal to the large-scale
421     electric utility's pretax weighted average cost of capital approved by the commission in the

422     large-scale electric utility's most recent general rate proceeding; and
423          (iv) recover the amortization cost described in Subsection (2)(b)(ii) and the carrying
424     charge described in Subsection (2)(b)(iii) in customer rates.
425          (3) The commission shall, before January 1, 2017, authorize a large-scale electric
426     utility to implement a combined line item charge on the large-scale electric utility's customers'
427     bills to recover the cost to the large-scale electric utility of:
428          (a) demand side management, including the cost of amortizing a deferred balance;
429          (b) the sustainable transportation and energy plan; and
430          (c) the additional expense described in Subsection (5)(a)(i).
431          (4) On December 31, 2016, the commission shall end the Utah solar incentive program
432     and surcharge tariff and the large-scale electric utility shall stop accepting new applications for
433     solar incentive program incentives.
434          (5) (a) The commission may authorize a large-scale electric utility that capitalizes
435     demand side management costs under Subsection (2)(b) to:
436          (i) recognize the difference between the annual revenues the large-scale electric utility
437     collects for demand side management and the annual amount of the large-scale electric utility's
438     demand side management cost amortization expense as an additional expense;
439          (ii) establish and fund, via the additional expense described in Subsection (5)(a)(i), a
440     regulatory liability; and
441          (iii) use the regulatory liability described in Subsection (5)(a)(ii) to depreciate thermal
442     generation plant.
443          (b) (i) The commission may authorize the large-scale electric utility to use the
444     regulatory liability described in Subsection (5)(a)(ii) to depreciate thermal generation plant for
445     which the commission determines depreciation is in the public interest for compliance with an
446     environmental regulation or another purpose.
447          (ii) The commission may not consider the existence of the regulatory liability described
448     in Subsection (5)(a)(ii) in a determination to accelerate depreciation under Subsection (5)(b)(i).
449          (c) The commission shall allow the large-scale electric utility to apply a carrying

450     charge to the regulatory liability described in Subsection (5)(a)(ii) in an amount equal to the
451     large-scale electric utility's pretax average weighted cost of capital approved by the
452     commission in the large-scale electric utility's most recent general rate proceeding.
453          (d) The commission may allow a large-scale electric utility to use the regulatory
454     liability carrying charge described in Subsection (5)(c) to offset the carrying charge described
455     in Subsection (2)(b)(iii).
456          (e) The large-scale electric utility shall apply the carrying charge described in
457     Subsection (5)(c) to funds that a large-scale electric utility is authorized to use to depreciate
458     thermal generation plant under Subsection (5)(a) until the reduction in the large-scale electric
459     utility's rate base associated with the thermal generation plant depreciation for which the funds
460     are used is reflected in the large-scale electric utility's customers' rates.
461          (f) If the commission determines that funds established in the regulatory liability under
462     Subsection (5)(a) are no longer needed for the purpose of depreciating thermal generation
463     plant, the large-scale electric utility shall use the balance of the funds in the regulatory liability
464     to offset the capitalized demand side management costs described in Subsection (2)(b)(i).
465          (6) (a) During the pilot program period, of the funds a large-scale electric utility
466     collects via the line item charge described in Subsection (3), the commission shall authorize the
467     large-scale electric utility to allocate on an annual basis:
468          (i) $10,000,000 to the sustainable transportation and energy plan; and
469          (ii) the funds not allocated to the sustainable transportation and energy plan to demand
470     side management.
471          (b) The commission shall authorize a large-scale electric utility to spend up to:
472          (i) $2,000,000 annually for the electric vehicle incentive program described in Section
473     54-20-103; and
474          (ii) an annual average of:
475          (A) $1,000,000 for the clean coal technology program described in Section 54-20-104;
476     and
477          (B) $3,400,000 for the innovative utility programs described in Section 54-20-105.

478          (c) The commission shall authorize a large-scale electric utility to recoup the
479     large-scale electric utility's unrecovered costs paid through the Utah solar incentive program
480     from the funds allocated under Subsection (6)(a)(i).
481          (d) The commission may authorize a large-scale electric utility to allocate funds the
482     large-scale electric utility collects via the line item charge described in Subsection (3) not spent
483     under Subsection (6) to a conservation, efficiency, or new technology program if the
484     conservation, efficiency, or new technology program is cost-effective and in the public interest.
485          (7) A large-scale electric utility shall establish a balancing account that includes:
486          (a) funds allocated under Subsection (6)(a)(i);
487          (b) the program expenditures described in Subsection (6)(b);
488          (c) the unrecovered Utah solar incentive program costs described in Subsection (6)(c);
489     and
490          (d) a carrying charge in an amount determined by the commission.
491          (8) A customer that is paying a contract rate under an agreement with a large-scale
492     electric utility as of January 1, 2016, is exempt from the costs recovered under Subsection (3),
493     except for costs created by or arising from the Utah solar incentive program included in
494     Subsection 54-7-12.8(3)(b).
495          (9) (a) In any proceeding commenced under Section 54-3-32, the commission may not
496     consider or assess to an eligible customer an expenditure, cost, amortization, charge, or liability
497     of any kind that is created by or arises in whole or in part from:
498          (i) any program created under Title 54, Chapter 20, Sustainable Transportation and
499     Energy Plan Act; or
500          (ii) this section, except for costs created by or arising from the Utah solar incentive
501     program included in Subsection 54-7-12.8(3)(b).
502          (b) Except as provided in Subsection (9)(a) and in Section 54-3-33, this section and
503     Title 54, Chapter 20, Sustainable Transportation and Energy Plan Act, do not:
504          (i) amend or repeal any provision of Section 54-3-32; or
505          (ii) affect any right, defense, or credit available to an eligible customer under Section

506     54-3-32.
507          [(3)] (10) Each electrical corporation proposing a tariff under this section shall, before
508     submitting the tariff to the commission for approval, seek [and receive] input from:
509          (a) the Division of Public Utilities;
510          (b) the Office of Consumer Services [created in Section 54-10a-201]; and
511          [(c) other interested parties.]
512          (c) a person that files a request for notice with the commission.
513          [(4)] (11) Before approving a tariff under this section, the commission shall hold a
514     hearing if:
515          (a) requested in writing by the electrical corporation, a customer of the electrical
516     corporation, or any other interested party within 15 days after the tariff filing; or
517          (b) the commission determines that a hearing is appropriate.
518          [(5)] (12) The commission may approve a demand side management tariff under this
519     section either with or without a provision allowing an end-use customer to receive a credit
520     against the charges imposed under the tariff for electric energy efficiency measures that:
521          (a) the customer implements or has implemented at the customer's expense; and
522          (b) qualify for the credit under criteria established by the [Utah Public Service
523     Commission] commission.
524          [(6)] (13) In approving a tariff under this section, the commission may impose
525     whatever conditions or limits it considers appropriate, including a maximum annual cost.
526          [(7)] (14) Unless otherwise ordered by the commission, each tariff under this section
527     approved by the commission shall take effect no sooner than 30 days after the electrical
528     corporation files the tariff with the commission.
529          Section 4. Section 54-7-13.5 is amended to read:
530          54-7-13.5. Energy balancing accounts.
531          (1) As used in this section:
532          (a) "Base rates" [is as] means the same as that term is defined in Subsection
533     54-7-12(1).

534          (b) "Energy balancing account" means an electrical corporation account for some or all
535     components of the electrical corporation's incurred actual power costs, including:
536          (i) (A) fuel;
537          (B) purchased power; and
538          (C) wheeling expenses; and
539          (ii) the sum of the power costs described in Subsection (1)(b)(i) less wholesale
540     revenues.
541          (c) "Gas balancing account" means a gas corporation account to recover on a
542     dollar-for-dollar basis, purchased gas costs, and gas cost-related expenses.
543          (2) (a) The commission may authorize an electrical corporation to establish an energy
544     balancing account.
545          (b) An energy balancing account shall become effective upon a commission finding
546     that the energy balancing account is:
547          (i) in the public interest;
548          (ii) for prudently-incurred costs; and
549          (iii) implemented at the conclusion of a general rate case.
550          (c) An electrical corporation:
551          (i) may, with approval from the commission, recover costs under this section through:
552          (A) base rates;
553          (B) contract rates;
554          (C) surcredits; or
555          (D) surcharges; and
556          (ii) shall file a reconciliation of the energy balancing account with the commission at
557     least annually with actual costs and revenues incurred by the electrical corporation.
558          (d) Beginning June 1, 2016, for an electrical corporation with an energy balancing
559     account established before January 1, 2016, the commission shall allow an electrical
560     corporation to recover 100% of the electrical corporation's prudently incurred costs as
561     determined and approved by the commission under this section.

562          [(d)] (e) An energy balancing account may not alter:
563          (i) the standard for cost recovery; or
564          (ii) the electrical corporation's burden of proof.
565          [(e)] (f) The collection method described in Subsection (2)(c)(i) shall:
566          (i) apply to the appropriate billing components in base rates; and
567          (ii) be incorporated into base rates in an appropriate commission proceeding.
568          [(f)] (g) The collection of costs related to an energy balancing account from customers
569     paying contract rates shall be governed by the terms of the contract.
570          [(g)] (h) Revenues collected in excess of prudently incurred actual costs shall:
571          (i) be refunded as a bill surcredit to an electrical corporation's customers over a period
572     specified by the commission; and
573          (ii) include a carrying charge.
574          [(h)] (i) Prudently incurred actual costs in excess of revenues collected shall:
575          (i) be recovered as a bill surcharge over a period to be specified by the commission;
576     and
577          (ii) include a carrying charge.
578          [(i)] (j) The carrying charge applied to the balance in an energy balancing account shall
579     be:
580          (i) determined by the commission; and
581          (ii) symmetrical for over or under collections.
582          (3) (a) The commission may:
583          (i) establish a gas balancing account for a gas corporation; and
584          (ii) set forth procedures for a gas corporation's gas balancing account in the gas
585     corporation's commission-approved tariff.
586          (b) A gas balancing account may not alter:
587          (i) the standard of cost recovery; or
588          (ii) the gas corporation's burden of proof.
589          (4) (a) All allowed costs and revenues associated with an energy balancing account or

590     gas balancing account shall remain in the respective balancing account until charged or
591     refunded to customers.
592          (b) The balance of an energy balancing account or gas balancing account may not be:
593          (i) transferred by the electrical corporation or gas corporation; or
594          (ii) used by the commission to impute earnings or losses to the electrical corporation or
595     gas corporation.
596          (c) An energy balancing account or gas balancing account that is formed and
597     maintained in accordance with this section does not constitute impermissible retroactive
598     ratemaking or single-issue ratemaking.
599          (5) This section does not create a presumption for or against approval of an energy
600     balancing account.
601          (6) The commission shall report to the Public Utilities and Technology Interim
602     Committee before December 1 in 2017 and 2018 regarding whether allowing an electrical
603     corporation to continue to recover costs under Subsection (2)(d) is reasonable and in the public
604     interest.
605          Section 5. Section 54-17-801 is amended to read:
606          54-17-801. Definitions.
607          As used in this part:
608          (1) "Contract customer" means a person who executes or will execute a renewable
609     energy contract with a qualified utility.
610          (2) "Qualified utility" means an electric corporation that serves more than 200,000
611     retail customers in the state.
612          (3) "Renewable energy contract" means a contract under this part for the delivery of
613     electricity from one or more renewable energy facilities to a contract customer requiring the use
614     of a qualified utility's transmission or distribution system to deliver the electricity from a
615     renewable energy facility to the contract customer.
616          (4) "Renewable energy facility":
617          (a) except as provided in Subsection (4)(b), means a renewable energy source defined

618     in Section 54-17-601 that is located in the state; and
619          (b) does not include an electric generating facility whose costs have been included in a
620     qualified utility's rates as a facility providing electric service to the qualified utility's system.
621          (5) "Renewable energy tariff" means a tariff offered by a qualified utility that allows
622     the qualified utility to procure renewable generation on behalf of and to serve its customers.
623          Section 6. Section 54-17-806 is enacted to read:
624          54-17-806. Qualified utility renewable energy tariff.
625          (1) The commission may authorize a qualified utility to implement a renewable energy
626     tariff in accordance with this section if the commission determines the tariff that the qualified
627     utility proposes is reasonable and in the public interest.
628          (2) If a tariff is authorized under Subsection (1), a qualified utility customer with an
629     aggregated electrical load of at least five megawatts and who agrees to service that is subject to
630     the renewable energy tariff shall pay:
631          (a) the customer's normal tariff rate;
632          (b) an incremental charge in an amount equal to the difference between the cost to the
633     qualified utility to supply renewable generation to the renewable energy tariff customer and the
634     qualified utility's avoided costs as defined in Subsection 54-2-1(1), or a different methodology
635     recommended by the qualified utility; and
636          (c) an administrative fee in an amount approved by the commission.
637          (3) The commission shall allow a qualified utility to recover the qualified utility's
638     prudently incurred cost of renewable generation procured pursuant to the tariff established in
639     this section that is not otherwise recovered from the proceeds of the tariff paid by customers
640     agreeing to service that is subject to the renewable energy tariff.
641          Section 7. Section 54-20-101 is enacted to read:
642     
CHAPTER 20. SUSTAINABLE TRANSPORTATION AND ENERGY PLAN ACT

643          54-20-101. Title.
644          This chapter is known as the "Sustainable Transportation and Energy Plan Act."
645          Section 8. Section 54-20-102 is enacted to read:

646          54-20-102. Definitions.
647          As used in this chapter:
648          (1) "Demand side management" means the same as that term is defined in Section
649     54-7-12.8.
650          (2) "Pilot program period" means a period of 5 years, beginning on January 1, 2017,
651     during which the sustainable transportation and energy plan is effective.
652          (3) "Sustainable transportation and energy plan" means the programs approved by the
653     commission and undertaken by a large-scale electric utility during the pilot program period,
654     including:
655          (a) the electric vehicle incentive program described in Section 54-20-103;
656          (b) the clean coal technology program described in Section 54-20-104; and
657          (c) the innovative technology programs described in Section 54-20-105.
658          Section 9. Section 54-20-103 is enacted to read:
659          54-20-103. Electric vehicle incentive program.
660          (1) The commission shall, before July 1, 2017, authorize a large-scale electric utility to
661     establish a program that promotes customer choice in electric vehicle charging equipment and
662     service that includes:
663          (a) an incentive to a large-scale electric utility customer to install or provide electric
664     vehicle infrastructure;
665          (b) time of use pricing for electric vehicle charging;
666          (c) any measure that the commission determines is in the public interest that
667     incentivizes the competitive deployment of electric vehicle charging infrastructure.
668          (2) The commission may review the expenditures made by a large-scale electric utility
669     for the program described in Subsection (1) in order to determine if the large-scale electric
670     utility made the expenditures prudently in accordance with the purposes of the program.
671          (3) A large-scale electric utility proposing a program for approval by the commission
672     under this section shall, before submitting the program to the commission for approval, seek
673     input from:

674          (a) the Division of Public Utilities;
675          (b) the Office of Consumer Services;
676          (c) the Division of Air Quality; and
677          (d) any person that files a request for notice with the commission.
678          Section 10. Section 54-20-104 is enacted to read:
679          54-20-104. Clean coal technology program.
680          (1) Subject to Subsection (2), the commission shall authorize, before July 1, 2017, and,
681     subject to funding, approve a program that authorizes a large-scale electric utility to
682     investigate, analyze, and research clean coal technology.
683          (2) The commission may review the expenditures made by a large-scale electric utility
684     for a program described in Subsection (1) in order to determine if the large-scale electric utility
685     made the expenditures prudently in accordance with the purposes of the program.
686          Section 11. Section 54-20-105 is enacted to read:
687          54-20-105. Innovative utility programs.
688          (1) The commission may authorize, subject to funding available under Subsection
689     54-7-12.8(6)(b)(ii)(B), a large-scale electric utility to implement programs that the commission
690     determines are in the interest of large-scale electric utility customers to provide for the
691     investigation, analysis, and implementation of:
692          (a) an economic development incentive rate;
693          (b) a solar generation incentive;
694          (c) a battery storage or electric grid related project;
695          (d) a commercial line extension pilot program;
696          (e) a program to curtail emissions from thermal generation plant in the Salt Lake
697     non-attainment area during a non-attainment event as defined by the Division of Air Quality;
698          (f) an additional electric vehicle incentive program incremental to the program
699     described in Section 54-20-103;
700          (g) an additional clean coal program incremental to the program described in Section
701     54-20-104; and

702          (h) any other technology program.
703          (2) The commission may review the expenditures made by a large-scale electric utility
704     for a program described in Subsection (1) in order to determine if the large-scale electric utility
705     made the expenditures prudently in accordance with the purposes of the program.
706          (3) The commission may authorize and establish funding for a conservation, efficiency,
707     or new technology program in addition to the programs described in this chapter if the
708     conservation, efficiency, or new technology program is cost-effective and in the public interest.
709          Section 12. Section 54-20-106 is enacted to read:
710          54-20-106. Extension of pilot program.
711          Before the first day of the legislative session in the final year of the pilot program
712     period, the commission shall submit a report and recommendation to the Legislature regarding
713     whether, in the discretion of the commission, the Legislature should, for the sustainable
714     transportation and energy plan:
715          (1) extend the plan or a portion of the plan as a ratepayer funded program;
716          (2) implement the plan or a portion of the plan as a state funded program; or
717          (3) discontinue the plan or a portion of the plan.
718          Section 13. Section 54-20-107 is enacted to read:
719          54-20-107. Other programs.
720          The commission may authorize a large-scale electric utility to establish a program in
721     addition to the programs described in this chapter if the commission determines that the
722     program is cost-effective and in the public interest.
723          Section 14. Section 63I-1-254 is amended to read:
724          63I-1-254. Repeal dates -- Title 54.
725          (1) The language of Subsection 54-4-13.4(1)(a)(ii) after "do not exceed $5,000,000 in
726     any calendar year" is repealed July 1, 2018.
727          (2) Subsection 54-7-13.5(2)(d) is repealed on December 31, 2019.