1     
CLEAN AND RENEWABLE ENERGY REQUIREMENT

2     
AMENDMENTS

3     
2021 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Raymond P. Ward

6     
Senate Sponsor: ____________

7     

8     LONG TITLE
9     General Description:
10          This bill modifies provisions relating to clean energy requirements for a large-scale
11     electric utility.
12     Highlighted Provisions:
13          This bill:
14          ▸     requires that, on or after a certain date, a certain percentage of a large-scale electric
15     utility's annual retail sales come from qualifying clean electricity if use of qualifying
16     clean electricity is cost effective;
17          ▸     amends provisions relating to the issuance, expiration, and use of renewable energy
18     certificates;
19          ▸     amends and requires plans and reports concerning a large-scale electric utility's
20     progress in acquiring qualifying electricity and qualifying clean electricity; and
21          ▸     makes technical and conforming changes.
22     Money Appropriated in this Bill:
23          None
24     Other Special Clauses:
25          None
26     Utah Code Sections Affected:
27     AMENDS:
28          54-17-601, as last amended by Laws of Utah 2010, Chapters 119, 125, and 268
29          54-17-602, as enacted by Laws of Utah 2008, Chapter 374
30          54-17-603, as last amended by Laws of Utah 2009, Chapter 140
31          54-17-604, as enacted by Laws of Utah 2008, Chapter 374
32          54-17-605, as enacted by Laws of Utah 2008, Chapter 374
33     ENACTS:
34          54-17-604.5, Utah Code Annotated 1953
35     

36     Be it enacted by the Legislature of the state of Utah:
37          Section 1. Section 54-17-601 is amended to read:
38          54-17-601. Definitions.
39          As used in this part:
40          (1) "Adjusted retail electric sales" means the total kilowatt-hours of retail electric sales
41     of an electrical corporation to customers in this state in a calendar year, reduced by:
42          (a) the amount of those kilowatt-hours attributable to electricity generated or purchased
43     in that calendar year from qualifying zero carbon emissions generation and qualifying carbon
44     sequestration generation;
45          (b) the amount of those kilowatt-hours attributable to electricity generated or purchased
46     in that calendar year from generation located within the geographic boundary of the Western
47     Electricity Coordinating Council that derives [its] energy from one or more of the following but
48     that does not satisfy the definition of a renewable energy source or that otherwise has not been
49     used to satisfy Subsection 54-17-602(1):
50          (i) wind energy;
51          (ii) solar photovoltaic and solar thermal energy;
52          (iii) wave, tidal, and ocean thermal energy;
53          (iv) except for combustion of wood that has been treated with chemical preservatives
54     such as creosote, pentachlorophenol or chromated copper arsenate, biomass and biomass
55     byproducts, including:
56          (A) organic waste;
57          (B) forest or rangeland woody debris from harvesting or thinning conducted to improve
58     forest or rangeland ecological health and to reduce wildfire risk;
59          (C) agricultural residues;
60          (D) dedicated energy crops; and
61          (E) landfill gas or biogas produced from organic matter, wastewater, anaerobic
62     digesters, or municipal solid waste;
63          (v) geothermal energy;
64          (vi) hydroelectric energy; or
65          (vii) waste gas and waste heat capture or recovery; and
66          (c) the number of kilowatt-hours attributable to reductions in retail sales in that
67     calendar year from demand side management as defined in Section 54-7-12.8, with the
68     kilowatt-hours for an electrical corporation whose rates are regulated by the commission and
69     adjusted by the commission to exclude kilowatt-hours for which a renewable energy certificate
70     is issued under Subsection 54-17-603(4)(b).
71          (2) "Amount of kilowatt-hours attributable to electricity generated or purchased in that
72     calendar year from qualifying carbon sequestration generation[," for qualifying carbon
73     sequestration generation,]" means the kilowatt-hours supplied by a facility during the calendar
74     year multiplied by the ratio of the amount of carbon dioxide captured from the facility and
75     sequestered to the sum of the amount of carbon dioxide captured from the facility and
76     sequestered plus the amount of carbon dioxide emitted from the facility during the same
77     calendar year.
78          (3) "Banked renewable energy certificate" means a bundled or unbundled renewable
79     energy certificate that is:
80          (a) not used in a calendar year to comply with this part or with a renewable energy
81     program in another state; and
82          (b) carried forward into a subsequent year.
83          (4) "Bundled renewable energy certificate" means a renewable energy certificate for
84     qualifying electricity that is acquired:
85          (a) by an electrical corporation by a trade, purchase, or other transfer of electricity that
86     includes the renewable energy attributes of, or certificate that is issued for, the electricity; or
87          (b) by an electrical corporation by generating the electricity for which the renewable
88     energy certificate is issued.
89          (5) "Clean energy source" means:
90          (a) an electric generation facility or generation capability or upgrade that derives
91     energy from one or more of the following:
92          (i) wind energy;
93          (ii) solar photovoltaic and solar thermal energy;
94          (iii) wave, tidal, and ocean thermal energy;
95          (iv) geothermal energy;
96          (v) hydroelectric energy;
97          (vi) nuclear energy;
98          (vii) landfill gas or biogas produced from organic matter, wastewater, anaerobic
99     digesters, or municipal solid waste;
100          (viii) waste gas and waste heat capture or recover, whether or not it is renewable,
101     including methane gas from:
102          (A) an abandoned coal mine; or
103          (B) a coal degassing operation associated with a state-approved mine permit; or
104          (ix) municipal solid waste;
105          (b) hydrogen gas derived from any source of energy described in Subsection (5)(a);
106          (c) if an electric generation facility employs multiple energy sources, that portion of the
107     electricity generated that is attributable to energy sources described in Subsection (5)(a) or (b);
108     and
109          (d) electricity generated or purchased from qualifying carbon sequestration generation.
110          [(5)] (6) "Electrical corporation":
111          (a) [is as] means the same as that term is defined in Section 54-2-1; and
112          (b) does not include a person generating electricity that is not for sale to the public.
113          [(6)] (7) "Qualifying carbon sequestration generation" means a fossil-fueled generating
114     facility located within the geographic boundary of the Western Electricity Coordinating
115     Council that:
116          (a) becomes operational or is retrofitted on or after January 1, 2008; and
117          (b) reduces carbon dioxide emissions into the atmosphere through permanent
118     geological sequestration or through another verifiably permanent reduction in carbon dioxide
119     emissions through the use of technology.
120          (8) "Qualifying clean electricity" means electricity generated from a clean energy
121     source if:
122          (a) (i) the clean energy source is located within the geographic boundary of the
123     Western Electricity Coordinating Council; or
124          (ii) the electricity is delivered to:
125          (A) the transmission system of an electrical corporation; or
126          (B) a delivery point designated by the electrical corporation for the purpose of
127     subsequent delivery to the electrical corporation; and
128          (b) the clean energy attributes of the electricity are not traded, sold, transferred, or
129     otherwise used to satisfy another state's renewable, zero carbon energy, or clean energy
130     program.
131          [(7)] (9) "Qualifying electricity" means electricity generated on or after January 1,
132     1995, from a renewable energy source if:
133          (a) (i) the renewable energy source is located within the geographic boundary of the
134     Western Electricity Coordinating Council; or
135          (ii) the qualifying electricity is delivered to the transmission system of an electrical
136     corporation or a delivery point designated by the electrical corporation for the purpose of
137     subsequent delivery to the electrical corporation; and
138          (b) the renewable energy attributes of the electricity are not traded, sold, transferred, or
139     otherwise used to satisfy another state's renewable energy program.
140          [(8)] (10) "Qualifying zero carbon emissions generation":
141          (a) means a generation facility located within the geographic boundary of the Western
142     Electricity Coordinating Council that:
143          (i) becomes operational on or after January 1, 2008; and
144          (ii) does not produce carbon as a byproduct of the generation process;
145          (b) includes generation powered by nuclear fuel; and
146          (c) does not include renewable energy sources used to satisfy the requirement
147     established under Subsection 54-17-602(1).
148          [(9)] (11) "Renewable energy certificate" means a certificate issued under Section
149     54-17-603.
150          [(10)] (12) "Renewable energy source" means:
151          (a) an electric generation facility or generation capability or upgrade that becomes
152     operational on or after January 1, 1995, that derives [its] energy from one or more of the
153     following:
154          (i) wind energy;
155          (ii) solar photovoltaic and solar thermal energy;
156          (iii) wave, tidal, and ocean thermal energy;
157          (iv) except for combustion of wood that has been treated with chemical preservatives
158     such as creosote, pentachlorophenol or chromated copper arsenate, biomass and biomass
159     byproducts, including:
160          (A) organic waste;
161          (B) forest or rangeland woody debris from harvesting or thinning conducted to improve
162     forest or rangeland ecological health and to reduce wildfire risk;
163          (C) agricultural residues;
164          (D) dedicated energy crops; and
165          (E) landfill gas or biogas produced from organic matter, wastewater, anaerobic
166     digesters, or municipal solid waste;
167          (v) geothermal energy located outside the state;
168          (vi) waste gas and waste heat capture or recovery whether or not it is renewable,
169     including methane gas from:
170          (A) an abandoned coal mine; or
171          (B) a coal degassing operation associated with a state-approved mine permit;
172          (vii) efficiency upgrades to a hydroelectric facility, without regard to the date upon
173     which the facility became operational, if the upgrades become operational on or after January
174     1, 1995;
175          (viii) compressed air, if:
176          (A) the compressed air is taken from compressed air energy storage; and
177          (B) the energy used to compress the air is a renewable energy source; or
178          (ix) municipal solid waste;
179          (b) any of the following:
180          (i) up to 50 average megawatts of electricity per year per electrical corporation from a
181     certified low-impact hydroelectric facility, without regard to the date upon which the facility
182     becomes operational, if the facility is certified as a low-impact hydroelectric facility on or after
183     January 1, 1995, by a national certification organization;
184          (ii) geothermal energy if located within the state, without regard to the date upon which
185     the facility becomes operational; or
186          (iii) hydroelectric energy if located within the state, without regard to the date upon
187     which the facility becomes operational;
188          (c) hydrogen gas derived from any source of energy described in Subsection [(10)]
189     (12)(a) or (b);
190          (d) if an electric generation facility employs multiple energy sources, that portion of the
191     electricity generated that is attributable to energy sources described in Subsections [(10)]
192     (12)(a) through (c); and
193          (e) any of the following located in the state and owned by a user of energy:
194          (i) a demand side management measure, as defined by Subsection 54-7-12.8(1), with
195     the quantity of renewable energy certificates to which the user is entitled determined by the
196     equivalent energy saved by the measure;
197          (ii) a solar thermal system that reduces the consumption of fossil fuels, with the
198     quantity of renewable energy certificates to which the user is entitled determined by the
199     equivalent kilowatt-hours saved, except to the extent the commission determines otherwise
200     with respect to net-metered energy;
201          (iii) a solar photovoltaic system that reduces the consumption of fossil fuels with the
202     quantity of renewable energy certificates to which the user is entitled determined by the total
203     production of the system, except to the extent the commission determines otherwise with
204     respect to net-metered energy;
205          (iv) a hydroelectric or geothermal facility with the quantity of renewable energy
206     certificates to which the user is entitled determined by the total production of the facility,
207     except to the extent the commission determines otherwise with respect to net-metered energy;
208          (v) a waste gas or waste heat capture or recovery system, other than from a combined
209     cycle combustion turbine that does not use waste gas or waste heat, with the quantity of
210     renewable energy certificates to which the user is entitled determined by the total production of
211     the system, except to the extent the commission determines otherwise with respect to
212     net-metered energy; and
213          (vi) the station use of solar thermal energy, solar photovoltaic energy, hydroelectric
214     energy, geothermal energy, waste gas, or waste heat capture and recovery.
215          [(11)] (13) "Unbundled renewable energy certificate" means a renewable energy
216     certificate associated with:
217          (a) qualifying electricity that is acquired by an electrical corporation or other person by
218     trade, purchase, or other transfer without acquiring the electricity for which the certificate was
219     issued; or
220          (b) activities listed in Subsection [(10)] (12)(e).
221          Section 2. Section 54-17-602 is amended to read:
222          54-17-602. Target amount of qualifying electricity -- Renewable energy certificate
223     -- Cost-effectiveness -- Cooperatives.
224          (1) (a) To the extent that it is cost effective [to do so] and unless Subsection (3)
225     applies, beginning in 2025 the annual retail electric sales in this state of each electrical
226     corporation shall consist of qualifying electricity or renewable energy certificates in an amount
227     equal to at least 20% of adjusted retail electric sales.
228          (b) [The amount under Subsection (1)(a) is computed based upon] An electrical
229     corporation shall compute adjusted retail electric sales for the calendar year commencing 36
230     months before the first day of the year for which the target calculated under Subsection (1)(a)
231     applies.
232          (c) Notwithstanding Subsections (1)(a) and (b), an increase in the annual target from
233     one year to the next may not exceed the greater of:
234          (i) 17,500 megawatt-hours; or
235          (ii) 20% of the prior year's amount under Subsections (1)(a) and (b).
236          (2) (a) Cost-effectiveness under Subsection (1) for an electrical corporation other than
237     a cooperative association is determined in comparison to other viable resource options using
238     the criteria provided by Subsection 54-17-201(2)(c)(ii).
239          (b) For an electrical corporation that is a cooperative association, cost-effectiveness is
240     determined using criteria applicable to the cooperative association's acquisition of a significant
241     energy resource established by the cooperative association's board of directors.
242          (3) (a) To the extent that it is cost effective, beginning July 1, 2030, at least 50% of the
243     total kilowatt-hours of a large-scale electric utility's annual retail electric sales to customers in
244     this state in a calendar year shall consist of qualifying clean electricity or renewable energy
245     certificates.
246          (b) A large-scale electric utility shall compute annual retail electric sales for the
247     calendar year commencing 36 months before the first day of the year for which the target
248     calculated under Subsection (3)(a) applies.
249          (c) Cost-effectiveness under Subsection (3)(a) of acquiring qualifying clean electricity
250     means that, on a life-cycle basis and taking into account the long-term risks, the present value
251     of the long-term costs of acquiring qualifying clean electricity is less than or equal to the
252     present value of the long-term costs of other electricity resource options.
253          [(3)] (4) This section does not require an electrical corporation to:
254          (a) substitute qualifying electricity for electricity or qualifying clean electricity from a
255     generation source owned or contractually committed, or from a contractual commitment for a
256     power purchase;
257          (b) enter into any additional electric sales commitment or any other arrangement for the
258     sale or other disposition of electricity that is not already, or would not be, entered into by the
259     electrical corporation; or
260          (c) acquire qualifying electricity in excess of its adjusted retail electric sales.
261          [(4)] (5) (a) For the purpose of Subsection (1), an electrical corporation may combine
262     any of the following:
263          [(a)] (i) qualifying electricity from a renewable energy source owned by the electrical
264     corporation;
265          [(b)] (ii) qualifying electricity acquired by the electrical corporation through trade,
266     power purchase, or other transfer; and
267          [(c)] (iii) a bundled or unbundled renewable energy certificate, including a banked
268     renewable energy certificate.
269          (b) For purposes of Subsection (3), a large-scale electric utility may combine any of the
270     following:
271          (i) qualifying clean electricity from a clean energy source owned by the large-scale
272     electric utility;
273          (ii) qualifying clean electricity acquired by the large-scale electric utility through trade
274     power purchase or other transfer; or
275          (iii) a bundled renewable energy certificate or unbundled renewable energy certificate,
276     including a banked renewable energy certificate.
277          [(5)] (6) For an electrical corporation [whose] with rates the commission regulates, the
278     following rules concerning renewable energy certificates apply:
279          (a) the electrical corporation shall use a banked renewable energy certificate with an
280     older issuance date [shall be used] before any other banked renewable energy certificate issued
281     at a later date is used; and
282          (b) [the total of all] the electrical corporation may not use unbundled renewable energy
283     certificates, including unbundled banked renewable energy certificates, [may not exceed] to
284     satisfy more than 20% of the amount of the annual target provided for in Subsection (1) or (3).
285          [(6)] (7) An electrical corporation that is a cooperative association may count towards
286     Subsection (1) any of the following:
287          (a) electric production allocated to this state from hydroelectric facilities becoming
288     operational after December 31, 2007, if the facilities are located in any state in which the
289     cooperative association, or a generation and transmission cooperative with which the
290     cooperative association has a contract, provides electric service;
291          (b) qualifying electricity generated or acquired or renewable energy certificates
292     acquired for a program that permits a retail customer to voluntarily contribute to a renewable
293     energy source; and
294          (c) notwithstanding Subsection 54-17-601[(7)](9), an unbundled renewable energy
295     certificate purchased from a renewable energy source located outside the geographic boundary
296     of the Western Electricity Coordinating Council if the electricity on which the unbundled
297     renewable energy certificate is based would be considered qualifying electricity if the
298     renewable energy source was located within the geographic boundary of the Western
299     Electricity Coordinating Council.
300          [(7)] (8) (a) The use of the renewable attributes associated with qualifying electricity to
301     satisfy any federal renewable energy requirement does not preclude the electricity from being
302     qualifying electricity for the purpose of this chapter.
303          (b) The use of the clean energy attributes associated with qualifying clean electricity to
304     satisfy any federal renewable requirement does not preclude the electricity from being
305     qualifying clean electricity for purposes of this chapter.
306          Section 3. Section 54-17-603 is amended to read:
307          54-17-603. Renewable energy certificate -- Issuance -- Use to satisfy other
308     requirements.
309          (1) The commission shall establish a process for issuance or recognition of a renewable
310     energy certificate.
311          (2) The commission process under Subsection (1) shall provide for the issuance,
312     monitoring, accounting, transfer, and use of a renewable energy certificate, including in
313     electronic form.
314          (3) The commission may:
315          (a) consult with another state or a federal agency and any regional system or trading
316     program to fulfill Subsection (1); and
317          (b) allow use of a renewable energy certificate that is issued, monitored, accounted for,
318     or transferred by or through a regional system or trading program, including the Western
319     Renewable Energy Generation Information System, to fulfill this part's provisions.
320          (4) A renewable energy certificate shall be issued for:
321          (a) qualifying electricity generated on and after January 1, 1995; and
322          (b) the activities of an energy user described in Subsections 10-19-102(11)(e) and
323     54-17-601(10)(e) on and after January 1, 1995.
324          (5) The person requesting a renewable energy certificate shall affirm that the renewable
325     energy attributes of the electricity have not been traded, sold, transferred, or otherwise used to
326     satisfy another state's renewable energy requirements.
327          (6) (a) For the purpose of satisfying Subsection 54-17-602(1) and the issuance of a
328     renewable energy certificate under this section, a renewable energy source located in this state
329     that derives [its] energy from solar photovoltaic or solar thermal energy shall [be credited] earn
330     a credit for 2.4 kilowatt-hours of qualifying electricity for each 1.0 kilowatt-hour generated.
331          (b) Notwithstanding Subsection (6)(a), the acquisition or construction by an electrical
332     corporation of a renewable energy source that derives [its] energy from solar photovoltaic or
333     solar thermal energy shall comply with the cost-effectiveness criteria of Subsection
334     54-17-201(2)(c)(ii).
335          (7) A renewable energy certificate issued under this section:
336          [(a) does not expire; and]
337          (a) expires three years after the date that the renewable energy certificate was issued;
338     and
339          (b) may be banked.
340          (8) The commission may recognize a renewable energy certificate that is issued,
341     monitored, accounted for, or transferred by or through another state or a regional system or
342     trading program, including the Western Renewable Energy Generation Information System, if
343     the renewable energy certificate is for qualifying electricity.
344          (9) A renewable energy certificate:
345          (a) may be used only once to satisfy Subsection 54-17-602(1) or (3);
346          (b) may be used for [the purpose] purposes of Subsection 54-17-602(1) or (3) and the
347     qualifying electricity on which the renewable energy certificate is based may be used to satisfy
348     any federal renewable energy requirement; and
349          (c) may not be used if [it] the renewable energy certificate has been used to satisfy:
350          (i) any other state's renewable energy requirement[.]; or
351          (ii) a requirement of participating in a community renewable energy program under
352     Chapter 17, Part 9, Community Renewable Energy Act.
353          (10) The commission shall establish procedures and reasonable rates permitting an
354     electrical corporation that is a purchasing utility under Section 54-12-2 to acquire or retain a
355     renewable energy certificate associated with the purchase of power from an independent energy
356     producer.
357          Section 4. Section 54-17-604 is amended to read:
358          54-17-604. Plans and reports.
359          (1) An electrical corporation shall develop and maintain a plan for implementing
360     Subsection 54-17-602(1), consistent with the cost-effectiveness criteria of Subsection
361     54-17-201(2)(c)(ii).
362          [(2) (a) A progress report concerning a plan under Subsection (1) for other than a
363     cooperative association shall be filed with the commission by January 1 of each of the years
364     2010, 2015, 2020, and 2024.]
365          [(b) For an] (2) An electrical corporation that is a cooperative association[,] shall file a
366     progress report [shall be filed] with the cooperative association's board of directors by January
367     1 [of each of the years 2010, 2015, 2020, and], 2024.
368          (3) The progress report [under] described in Subsection (2) shall contain:
369          (a) the actual amount of qualifying electricity to date and projected amount of
370     qualifying electricity through 2025;
371          (b) the source of qualifying electricity;
372          [(c) (i) an analysis of the cost-effectiveness of renewable energy sources for other than
373     a cooperative association; or]
374          [(ii)] (c) an estimate of the cost of achieving the target [for an electrical corporation
375     that is a cooperative association];
376          (d) a discussion of conditions impacting the renewable energy source and qualifying
377     electricity markets; and
378          (e) any recommendation for a suggested legislative or program change[; and].
379          [(f) for other than a cooperative association, any other information requested by the
380     commission or considered relevant by the electrical corporation.]
381          (4) The plan and progress report required by Subsections (1) and (2) may include
382     procedures that will be used by the electrical corporation to identify and select any renewable
383     energy resource and qualifying electricity that satisfy the criteria of Subsection
384     54-17-201(2)(c)(ii).
385          [(5) By July 1, 2026, each electrical corporation shall file a final progress report
386     demonstrating:]
387          [(a) how Subsection 54-17-602(1) is satisfied for the year 2025; or]
388          [(b) the reason why Subsection 54-17-602(1) is not satisfied for the year 2025, if it is
389     not satisfied.]
390          [(6) By January 1 of each of the years 2011, 2016, 2021, and 2025, the Division of
391     Public Utilities shall submit to the Legislature a report containing a summary of any progress
392     report filed under Subsections (2) through (5).]
393          [(7) The summary required by Subsection (6) shall include any recommendation for
394     legislative changes.]
395          [(8) (a) By July 1, 2027, the commission shall submit to the Legislature a report
396     summarizing the final progress reports and recommending any legislative changes.]
397          [(b) The 2027 summary may contain a recommendation to the Legislature concerning
398     any action to be taken with respect to an electrical corporation that does not satisfy Subsection
399     54-17-602(1) for 2025.]
400          [(c) The commission shall provide an opportunity for public comment and take
401     evidence before recommending any action to be taken with respect to an electrical corporation
402     that does not satisfy Subsection 54-17-602(1) for 2025.]
403          [(9) If a recommendation containing a penalty for failure to satisfy Subsection
404     54-17-602(1) is made under Subsection (8), the proposal shall require that any amount paid by
405     an electrical corporation as a penalty be utilized to fund demand-side management for the retail
406     customers of the electrical corporation paying the penalty.]
407          [(10) A penalty may not be proposed under this section if an electrical corporation's
408     failure to satisfy Subsection 54-17-602(1) is due to:]
409          [(a) a lack of cost-effective means to satisfy the requirement; or]
410          [(b) force majeure.]
411          [(11)] (5) By July 1, 2026, an electrical corporation that is a cooperative association
412     shall file a final progress report demonstrating:
413          (a) how the electrical corporation satisfied Subsection 54-17-602(1) [is satisfied] for
414     the year 2025; or
415          [(b) the reason why Subsection 54-17-602(1) is not satisfied for the year 2025 if it is
416     not satisfied.]
417          (b) why the electrical corporation did not satisfy Subsection 54-17-602(1) for the year
418     2025.
419          [(12) The] (6) A cooperative association shall make the plan and any progress report
420     [file] filed under this section by an electrical corporation that is cooperative association shall be
421     publicly available at the cooperative association's office or [posted] on the cooperative
422     association's website.
423          Section 5. Section 54-17-604.5 is enacted to read:
424          54-17-604.5. Plans and reports.
425          (1) A large-scale electric utility that is required to comply with Subsection
426     54-17-602(3) shall:
427          (a) develop and maintain a plan for implementing Subsection 54-17-602(3), consistent
428     with the cost-effectiveness standard described in Subsection 54-17-602(3)(c);
429          (b) file a report on the progress of the plan described in Subsection (1)(a) with the
430     commission on or before May 1, 2026; and
431          (c) file a final report on the progress of the plan described in Subsection (1)(a) with the
432     commission on or before May 1, 2030.
433          (2) The progress reports described in Subsections (1)(b) and (1)(c) shall contain:
434          (a) the actual amount of qualifying clean energy to date and projected amount of
435     qualifying clean electricity through 2030;
436          (b) the source of qualifying clean electricity;
437          (c) an analysis of the cost-effectiveness of clean energy sources;
438          (d) a discussion of conditions impacting the clean energy source and qualifying clean
439     electricity markets;
440          (e) any recommendation for a suggested legislative or program change;
441          (f) in the final progress report, a demonstration of:
442          (i) how the large-scale electric utility satisfied the requirements of Subsection
443     54-17-602(1) for the year 2025; or
444          (ii) why the large-scale electric utility did not satisfy the requirements of Subsection
445     54-17-602(1) for the year 2025; and
446          (g) any other information requested by the commission or considered relevant by the
447     large-scale electric utility.
448          (3) (a) On or before November 1, 2026, the commission shall, after taking public
449     comment and evidence, submit to the Public Utilities, Energy, and Technology Interim
450     Committee a report summarizing the progress reports and public comment and evidence and
451     recommending any legislative changes.
452          (b) On or before November 1, 2031, the commission shall, after taking public comment
453     and evidence, submit to the Public Utilities, Energy, and Technology Interim Committee a
454     report summarizing the final progress reports, public comment and evidence, and
455     recommending any legislative changes.
456          (c) The report described in Subsection (3)(b) may contain a recommendation to the
457     Legislature concerning any action to be taken with respect to a large-scale electric utility that is
458     required to comply with Subsection 54-17-602(3) and does not satisfy the requirements of
459     Subsection 54-17-602(3) for 2030.
460          (d) The commission shall provide an opportunity for public comment and take
461     evidence before recommending any action to be taken with respect to a large-scale electric
462     utility that is required to comply with Subsection 54-17-602(3) and does not satisfy the
463     requirements of Subsection 54-17-602(3) for 2030.
464          Section 6. Section 54-17-605 is amended to read:
465          54-17-605. Recovery of costs for renewable energy activities.
466          (1) In accordance with other law, the commission shall include in the retail electric
467     rates of an electrical corporation [whose] with rates the commission regulates the state's share
468     of any of the costs listed in Subsection (2) that are relevant to the proceeding in which the
469     commission is considering the electrical corporation's rates:
470          (a) if the costs are prudently incurred by the electrical corporation in connection with:
471          (i) the acquisition of a renewable energy certificate;
472          (ii) the acquisition of qualifying electricity for which a renewable energy certificate
473     will be issued after the acquisition; and
474          (iii) the acquisition, construction, and use of a renewable energy source; and
475          (b) to the extent any qualifying electricity [or], renewable energy source [under], or
476     clean energy source described in Subsection (1)(a) satisfies the cost-effectiveness criteria [of]:
477          (i) described in Subsection 54-17-201(2)(c)(ii)[.]; or
478          (ii) described in Subsection 54-17-602(3)(c).
479          (2) [The following are costs that may be recoverable] The state is eligible to recover
480     the following costs under Subsection (1):
481          (a) a cost of siting, acquisition of property rights, equipment, design, licensing,
482     permitting, construction, owning, operating, or otherwise acquiring a renewable energy source
483     or clean energy source and any associated asset, including transmission;
484          (b) a cost to acquire qualifying electricity through trade, power purchase, or other
485     transfer;
486          (c) a cost to acquire a bundled or unbundled renewable energy certificate, if any net
487     revenue from the sale of a renewable energy certificate allocable to this state is also included in
488     rates;
489          (d) a cost to interconnect a renewable energy source or clean energy source to the
490     electrical corporation's transmission and distribution system;
491          (e) a cost associated with using a physical or financial asset to integrate, firm, or shape
492     a renewable energy source or clean energy source on a firm annual basis to meet a retail
493     electricity need; and
494          (f) any cost associated with transmission and delivery of qualifying electricity or clean
495     energy source to a retail electricity consumer.
496          (3) (a) The commission [may] shall:
497          (i) allow an electrical corporation to use an adjustment mechanism or reasonable
498     method other than a rate case under Sections 54-4-4 and 54-7-12 to allow recovery of costs
499     identified in Subsection (2)[.]; or
500          (ii) allow an electrical corporation to recover costs identified in Subsection (2) by
501     including costs identified in Subsection (2) in rates pursuant to a rate case.
502          (b) [If the commission allows the use of an adjustment mechanism, both] Both the
503     costs and any associated benefit shall be reflected in the mechanism[,] or method approved by
504     the commission in Subsection (3)(a) to the extent practicable.
505          [(c) This Subsection (3) creates no presumption for or against the use of an adjustment
506     mechanism.]
507          (4) (a) The commission may permit an electrical corporation to include in [its] the
508     electrical corporation's retail electric rates the state's share of costs prudently incurred by the
509     electrical corporation in connection with a renewable energy source, whether or not the
510     renewable energy source ultimately becomes operational, including costs of:
511          (i) siting;
512          (ii) property acquisition;
513          (iii) equipment;
514          (iv) design;
515          (v) licensing;
516          (vi) permitting; and
517          (vii) other reasonable items related to the renewable energy source.
518          (b) Subsection (4)(a) creates no presumption concerning the prudence or recoverability
519     of the costs identified.
520          (c) To the extent deferral is consistent with other applicable law, the commission may
521     allow an electrical corporation to defer costs recoverable under Subsection (4)(a) until the
522     recovery of the deferred costs can be considered in a rate proceeding or an adjustment
523     mechanism created under Subsection (3).
524          (d) An application to defer costs shall be filed within 60 days after the day on which
525     the electrical corporation determines that the renewable energy source project is impaired under
526     generally accepted accounting principles and will not become operational.
527          (e) Notwithstanding the opportunity to defer costs under Subsection (4)(c), an electrical
528     corporation shall include a cost incurred by [an] the electrical corporation for siting, property
529     acquisition, equipment, design, licensing, and permitting of a renewable energy source that the
530     electrical corporation proposes to construct [shall be included] in the electrical corporation's
531     project costs for the purpose of evaluating the project's cost-effectiveness.
532          (f) A deferred cost under Subsection (4)(a) may not be added to, or otherwise
533     considered in the evaluation of, the cost of a project proposed by any person other than the
534     electrical corporation for the purpose of evaluating that person's proposal.