Representative Stephen G. Handy proposes the following substitute bill:




Chief Sponsor: Stephen G. Handy

Senate Sponsor: Daniel Hemmert

6     Cosponsor:
Tim Quinn


9     General Description:
10          This bill enacts the Community Renewable Energy Act in the Public Utilities Code.
11     Highlighted Provisions:
12          This bill:
13          ▸     enacts the Community Renewable Energy Act;
14          ▸     defines terms and program requirements under the act;
15          ▸     outlines the role and rulemaking authority of the Utah Public Service Commission
16     in approving a community renewable energy program under the act;
17          ▸     establishes and clarifies options for customer participation and nonparticipation in
18     programs under the act;
19          ▸     provides an initial opt-out period for a participating customer to elect to leave the
20     community renewable energy program without penalty;
21          ▸     establishes procedures concerning rates, customer billing, and renewable energy
22     resource acquisition under the act; and
23          ▸     makes technical changes.
24     Money Appropriated in this Bill:

25          None
26     Other Special Clauses:
27          None
28     Utah Code Sections Affected:
29     ENACTS:
30          54-17-901, Utah Code Annotated 1953
31          54-17-902, Utah Code Annotated 1953
32          54-17-903, Utah Code Annotated 1953
33          54-17-904, Utah Code Annotated 1953
34          54-17-905, Utah Code Annotated 1953
35          54-17-906, Utah Code Annotated 1953
36          54-17-907, Utah Code Annotated 1953
37          54-17-908, Utah Code Annotated 1953
38          54-17-909, Utah Code Annotated 1953

40     Be it enacted by the Legislature of the state of Utah:
41          Section 1. Section 54-17-901 is enacted to read:
Part 9. Community Renewable Energy Act

43          54-17-901. Community Renewable Energy Act.
44          This part is known as the "Community Renewable Energy Act."
45          Section 2. Section 54-17-902 is enacted to read:
46          54-17-902. Definitions.
47          As used in this part:
48          (1) (a) "Auxiliary services" means those services necessary to safely and reliably:
49          (i) interconnect and transmit electric power from any renewable energy resource
50     constructed or acquired for a community renewable energy program; and
51          (ii) integrate and supplement electric power from any renewable energy resource.
52          (b) "Auxiliary services" shall include applicable Federal Energy Regulatory
53     Commission requirements governing transmission and interconnection services.
54          (2) "Commission" means the Public Service Commission created in Section 54-1-1.
55          (3) "Community renewable energy program" means the program approved by the

56     commission under Section 54-17-904 that allows a qualified utility to provide electric service
57     from one or more renewable energy resources to a participating customer within a participating
58     community.
59          (4) "County" means the unincorporated area of a county.
60          (5) "Division" means the Division of Public Utilities created in Section 54-4a-1.
61          (6) (a) "Initial opt-out period" means the period of time immediately after the
62     community renewable energy program's commencement, as established by the commission by
63     rule made pursuant to Section 54-17-909, during which a participating customer may elect to
64     leave the program without penalty.
65          (b) "Initial opt-out period" may not be shorter than three typical billing cycles of the
66     qualified utility.
67          (7) "Municipality" means a city or a town as defined in Section 10-1-104.
68          (8) "Office" means the Office of Consumer Services created in Section 54-10a-101.
69          (9) "Ongoing costs" means the costs allocated to the state for transmission and
70     distribution facilities, retail services, and generation assets that are not replaced assets.
71          (10) "Participating community" means a municipality or a county:
72          (a) whose residents are served by a qualified utility; and
73          (b) the municipality or county meets the requirements in Section 54-17-903.
74          (11) "Participating customer" means:
75          (a) a customer of a qualified utility located within the boundary of a municipality or
76     county where a community renewable energy program has been approved by the commission;
77     and
78          (b) the customer has not exercised the right to not participate in the community
79     renewable energy program as provided in Section 54-17-905.
80          (12) "Qualified utility" means the same as that term is defined in Section 54-17-801.
81          (13) "Renewable electric energy supply" means incremental renewable energy
82     resources that are developed to meet the equivalent of the annual electric energy consumption
83     of participating customers within a participating community.
84          (14) "Renewable energy resource" means:
85          (a) electric energy generated by a source that is naturally replenished and includes one
86     or more of the following:

87          (i) wind;
88          (ii) solar photovoltaic or thermal solar technology;
89          (iii) a geothermal resource; or
90          (iv) a hydroelectric plant; or
91          (b) use of an energy efficient and sustainable technology the commission has approved
92     for implementation that:
93          (i) increases efficient energy usage;
94          (ii) is capable of being used for demand response; or
95          (iii) facilitates the use and development of renewable generation resources through
96     electrical grid management or energy storage.
97          (15) "Replaced asset" means an existing thermal energy resource:
98          (a) that was built or acquired, in whole or in part, by a qualified utility to serve the
99     qualified utility's customers, including customers within a participating community;
100          (b) that was built or acquired prior to commission approval and the effective date of the
101     community renewable energy program; and
102          (c) to the extent the asset is no longer used to serve participating customers.
103          Section 3. Section 54-17-903 is enacted to read:
104          54-17-903. Program requirement for a municipality or county.
105          (1) Customers of a qualified utility may be served by the community renewable energy
106     program described in this part if the municipality or county satisfies the requirements of
107     Subsection (2).
108          (2) The municipality or county in which the customer resides shall:
109          (a) adopt a resolution no later than December 31, 2019, that states a goal of achieving
110     an amount equivalent to 100% of the annual electric energy supply for participating customers
111     from a renewable energy resource by 2030;
112          (b) enter into an agreement with a qualified utility:
113          (i) with the stipulation of payment by the municipality or county to the qualified utility
114     for the costs of:
115          (A) third-party expertise contracted for by the division and the office, for assistance
116     with activities associated with initial approval of the community renewable energy program;
117     and

118          (B) providing notice to the municipality's or county's customers as provided in Section
119     54-17-905;
120          (ii) determining the obligation for the payment of any termination charges under
121     Subsection 54-17-905(3) that are not paid by a participating customer and not included in
122     participating customer rates under Subsections 54-17-904 (2) and (4); and
123          (iii) identifying any initially proposed replaced asset;
124          (c) adopt a local ordinance that:
125          (i) establishes participation in the renewable energy program; and
126          (ii) is consistent with the terms of the agreement entered into with the qualified utility
127     under Subsection (2)(b); and
128          (d) comply with any other terms or conditions required by the commission.
129          (3) The local ordinance required in Subsection (2)(c) shall be adopted by the
130     municipality or county within 90 days after the date of the commission order approving the
131     community renewable energy program.
132          Section 4. Section 54-17-904 is enacted to read:
133          54-17-904. Authority of commission to approve a community renewable energy
134     program.
135          (1) After the commission has adopted administrative rules as required under Section
136     54-17-909, a qualified utility may file an application with the commission for approval of a
137     community renewable energy program.
138          (2) The application shall include:
139          (a) the names of each municipality and county to be served by the community
140     renewable energy program;
141          (b) a map of the geographic boundaries of each municipality and county;
142          (c) the number of customers served by the qualified utility within those boundaries;
143          (d) projected rates for participating customers that take into account:
144          (i) the estimated number of customers expected to participate in the program;
145          (ii) the quantifiable costs and benefits to the qualified utility and all of the qualified
146     utility's customers in their capacity as ratepayers of the qualified utility, excluding costs or
147     benefits that do not directly affect the qualified utility, including as applicable:
148          (A) replaced assets;

149          (B) auxiliary services; and
150          (C) new renewable energy resources used to serve the community renewable energy
151     program; and
152          (iii) the ongoing costs at the time of the application;
153          (e) the agreement entered into with the qualified utility under Section 54-17-903;
154          (f) a proposed plan established by the participating community addressing low-income
155     programs and assistance;
156          (g) a proposed solicitation process for the acquisition of renewable energy resources as
157     provided in Section 54-17-908; and
158          (h) any other information the commission may require by rule.
159          (3) The commission may approve an application for a community renewable energy
160     program if the commission finds:
161          (a) the application meets all of the requirements in this section and administrative rules
162     adopted by the commission in accordance with Sections 54-17-908 and 54-17-909 to
163     implement this part; and
164          (b) the community renewable energy program is in the public interest.
165          (4) The rates approved by the commission for participating customers:
166          (a) shall be based on the factors included in Subsection (2)(d) and any other factor
167     determined by the commission to be in the public interest;
168          (b) may not result in any shift of costs or benefits to any nonparticipating customer, or
169     any other customer of the qualified utility beyond the participating community boundaries; and
170          (c) shall take into account any quantifiable benefits to the qualified utility, and the
171     qualified utility's customers, including participating customers in their capacity as ratepayers of
172     the qualified utility, excluding costs or benefits that do not directly affect the qualified utility's
173     costs of service.
174          (5) (a) Each municipality or county included in the application shall be a party to the
175     regulatory proceeding.
176          (b) A municipality or county identified in the application shall provide information to
177     all relevant parties in accordance with the commission's rules for discovery, notwithstanding
178     Title 63G, Chapter 2, Government Records Access and Management Act.
179          (6) The community renewable energy program may not be implemented until after the

180     municipality or county adopts the ordinance required in Section 54-17-903.
181          Section 5. Section 54-17-905 is enacted to read:
182          54-17-905. Customer participation -- Election not to participate.
183          (1) (a) After commission approval of a community renewable energy program and
184     adoption of the ordinance by the participating community as required in Section 54-17-903, a
185     qualified utility shall provide notice to each of its customers within the participating
186     community that includes:
187          (i) the projected rates and terms of participation in the community renewable energy
188     program approved by the commission;
189          (ii) an estimated comparison to otherwise applicable existing rates;
190          (iii) an explanation that the customer may elect to not participate in the community
191     renewable energy program by notifying the qualified utility; and
192          (iv) any other information required by the commission.
193          (b) The qualified utility shall provide the notice required under Subsection (1)(a) to
194     each customer:
195          (i) no less than twice within the period of 60 days immediately preceding the date
196     required to opt out of the community renewable energy program; and
197          (ii) separately from the customer's monthly billing.
198          (c) The qualified utility shall provide the information required under Subsection (1)(a)
199     in person to each customer with an electric load of one megawatt or greater measured at a
200     single meter.
201          (2) (a) An existing customer of the qualified utility may elect to not participate in the
202     community renewable energy program and continue to pay applicable existing rates by giving
203     notice to the qualified utility in the manner and within the time period determined by the
204     commission.
205          (b) After implementation of the community renewable energy program:
206          (i) a customer that previously elected not to participate in the program may become a
207     participating customer as allowed by commission rules and by giving notice to the qualified
208     utility in the manner required by the commission; and
209          (ii) a customer of the qualified utility that begins taking electric service within a
210     participating community after the date of implementation of the community renewable energy

211     program shall:
212          (A) be given notice as determined by the commission; and
213          (B) shall become a participating customer unless the person elects not to participate by
214     giving notice to the qualified utility in the manner and within the time period determined by the
215     commission.
216          (3) (a) A customer that does not opt out of the community renewable energy program
217     under Subsection (2) may later discontinue participation in the community renewable energy
218     program as allowed by the commission as described in Subsection (3)(b) or (c).
219          (b) (i) During the initial opt-out period, a participating customer may elect to leave the
220     program by giving notice to the qualified utility in the manner determined by the commission.
221          (ii) A participating customer that opts out as described in Subsection (3)(b)(i) is not
222     subject to a termination charge.
223          (c) After the community renewable energy program's initial opt-out period, a
224     participating customer may elect to leave the program by:
225          (i) giving notice to the qualified utility in the manner determined by the commission;
226     and
227          (ii) paying a termination charge as determined by the commission that may include the
228     cost of renewable energy resources acquired or constructed for the community renewable
229     energy program that are not being utilized by participating customers as necessary to prevent
230     shifting costs to other customers of the qualified utility.
231          (4) (a) A customer of a qualified utility that is annexed into the boundaries of a
232     participating community after the effective date of the community renewable energy program
233     shall be given notice as provided in Subsection (1) advising the customer of the option to opt
234     out of the program.
235          (b) A participating customer located in a portion of a county that is annexed into a
236     municipality that is not a participating community shall continue to be included in the
237     renewable energy program if the customer remains a customer of the qualified utility.
238          (c) If a participating customer is annexed into a municipality that provides electric
239     service to the municipality's residents:
240          (i) the customer may continue to be served by the qualified utility under the community
241     renewable energy program if the qualified utility enters into an agreement with the municipality

242     under Section 54-3-30; or
243          (ii) the municipality shall pay the termination charge for each participating customer
244     that is no longer served by the qualified utility.
245          (5) A residential customer that is participating in the net metering program under Title
246     54, Chapter 15, Net Metering of Electricity, may not be a participating customer under this
247     part.
248          (6) (a) The cost of providing notice under Subsection (1) shall be paid by the
249     participating communities.
250          (b) All other notices required under this section shall be paid for as program costs and
251     recovered through participating customers' rates.
252          Section 6. Section 54-17-906 is enacted to read:
253          54-17-906. Customer billing.
254          The qualified utility shall:
255          (1) include information on its monthly bills to participating customers identifying the
256     community renewable energy program cost; and
257          (2) provide notice to participating customers of any change in rate for participation in
258     the community renewable energy program.
259          Section 7. Section 54-17-907 is enacted to read:
260          54-17-907. Rate adjustment filing -- Modification of rates for participating
261     customers.
262          (1) (a) The qualified utility may make a rate adjustment filing, not more than annually,
263     with the commission to adjust rates for participating customers to reflect any changes in the
264     quantifiable costs and benefits of the community renewable energy program.
265          (b) The rate adjustment filing may not include any changes to ongoing costs.
266          (2) The commission shall determine the content and filing requirements for the filing
267     by administrative rules as described in Section 54-17-909.
268          (3) The commission shall determine rate changes which shall become effective within
269     90 days after the date of the filing, unless otherwise determined by the commission for good
270     cause.
271          Section 8. Section 54-17-908 is enacted to read:
272          54-17-908. Acquisition of renewable energy resources.

273          (1) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
274     commission shall make rules outlining a competitive solicitation process for the acquisition of
275     renewable assets acquired by the qualified utility for purposes of this act.
276          (2) The solicitation rules shall include the following provisions:
277          (a) solar photovoltaic or thermal solar energy facilities may be acquired under the
278     provisions of Section 54-17-807;
279          (b) renewable energy resources developed under this part shall be constructed or
280     acquired subject to an option by the qualified utility to own the renewable energy resource so
281     long as including the option in a solicitation is in the interest of participating customers and
282     other customers of the qualified utility; and
283          (c) any other requirement determined by the commission to be in the public interest.
284          (3) Upon completion of a solicitation under this section and the rules adopted by the
285     commission to implement this section, the commission may approve cost recovery for a
286     renewable energy resource for the community renewable energy program if approval of the
287     renewable energy resource:
288          (a) complies with the provisions of this part;
289          (b) does not result in shifting of costs or benefits to other customers of the qualified
290     utility; and
291          (c) is in the public interest.
292          Section 9. Section 54-17-909 is enacted to read:
293          54-17-909. Commission rulemaking authority.
294          In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
295     commission shall adopt rules to implement this part, including:
296          (1) establishing the initial opt-out period;
297          (2) the terms and conditions of the agreement under Section 54-17-903;
298          (3) the content and filing of an application under Section 54-17-904;
299          (4) the notice requirements under Section 54-17-905;
300          (5) the standards for determining when a termination charge is applicable and the
301     amount and timing of a termination charge under Subsection 54-17-905(3);
302          (6) the content and filing requirements for the annual filing under Subsection
303     54-17-907(2);

304          (7) the solicitation requirements under Section 54-17-908; and
305          (8) any other requirements determined by the commission necessary to protect the
306     public interest and to implement this part.