SB 0455 Revises laws relating to electric utilities
LR Number:1619S.07C Fiscal Note:1619-07
Committee:Commerce and Environment
Last Action:05/18/01 - S Inf Calendar S Bills for Perfection Journal page:
Title:SCS SB 455
Effective Date:August 28, 2001
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Current Bill Summary

SCS/SB 455 - This act would allow investor-owned utilities (IOUs) to transfer existing generating facilities to an affiliated entity which shall operate as an Exempt Wholesale Generator (EWG) or GENCO as provided pursuant to the federal National Energy Policy Act of 1992.

TAXATION - "Distributable property" of electric corporations shall continue to be assessed and the values distributed as in the 2000 tax year, even if such property is transferred to an EWG. The State Tax Commission shall promulgate rules to accomplish this. Generation property placed into service after January 1, 2001 shall be considered "local property" of the electric corporation.

GENCO FORMATION - An IOU can form a GENCO by notifying the Public Service Commission (PSC) of proposed transfer of assets. A rate case will be required for the utility proposing the transfer. The transfer of an allocated portion of assets will be based on a methodology determined by PSC. The PSC must rule on the request within 270 days, unless a rate case is pending, and then within 300 days. The act specifies requirements that the transfer proposal and the purchase power agreement must meet and findings which must be made by the PSC for approval of the transfer. The remaining portion of the IOU will be a local distribution utility (LDU). The LDU will enter into a 5-year purchased power agreement (PPA) with the GENCO for power supply to be approved by the Federal Energy Regulatory Commission (FERC) and 3-year renewals may be made at cost of service prices.

In order to approve a transfer the PSC must consider and make the EWG findings required to be made by the Commission pursuant to the federal National Energy Policy Act: the transfer of assets will benefit consumers, is in the public interest and does not violate state law; the PPA is declared to meet the same criteria and will not provide the GENCO with any unfair competitive advantage.

If the FERC ceases to exist and no successor is established, the Commission shall review cost of service rates of the PPAs. Generation plants may not be transferred from the GENCO to a non-affiliated entity without Commission approval pursuant to this act.

RATES AND OPTION TO CHOOSE SUPPLIER - PSC may hold a hearing and revise rates in order to implement a refund authorized by FERC on the wholesale rate under the PPA.

Industrial and commercial customers must have a demand interval meter on premises. If these customers have a maximum demand of 1 million watts (megawatts or MW) in a service territory with at least 1 million customers or have a load greater than 2 MW, they will be eligible to enter into agreements with an energy provider other than their LDU. The LDU will purchase power from the provider selected by the customer and deliver it for resale at the customer-agreed price, plus transmission, delivery service and decommissioning charges and applicable taxes. Customers eligible to choose may aggregate load for a combined purchase. Transmission charges will be those set by FERC or the Regional Transmission Organization (RTO).

The Commission will retain authority for bundled service rate design. All customers with less than 1 MW of load in a 1 million customer service territory and those customers with less than 2 MW of load in other service territories will remain on bundled rates while other customers may remain on bundled service at cost of service rates set by the Commission until they choose to purchase from another supplier. Customers may return to bundled rates one time, except customers in a service territory with fewer than 150,000 customers who may not return.

Utilities may conduct experimental billing and pricing programs.

The PSC shall not regulate the rates of certain heating companies.

TRANSITION FOR EMPLOYEES - The act requires the GENCO to hire a sufficient number of the utility's non-supervisory workers to operate and maintain the transferred assets as are needed, under substantially the same terms of employment and continue such employment and terms for 30 months. The GENCO shall offer a transition plan for those non-supervisory workers not hired from the utility.

DECOMMISSIONING COSTS - Nuclear decommissioning costs shall be recovered through unbundled charges or bundled rates.

REGISTRATION OF SUPPLIERS - Suppliers providing service to customers eligible to shop must register with the Commission.

NET METERING - The Consumer Clean Energy Act is enacted. Retail electric suppliers are required to comply with and notify all retail customers quarterly that they will supply net generation meters to customer-generators and that the rates for the sale of energy must be the same for customer-generators and other customers. The method by which retail electric suppliers are required to calculate the net energy measurement for customer- generators is specified.

At the beginning of each year, any unused kilowatt-hour credit accumulated by customer-generators will be credited to low-income customers.

Local distribution companies which are retail electric suppliers will not be required to provide net metering service for additional customer-generators when the generating capacity of customer-generators is at least 1% of the companies average forecasted peak demand. Retail electric suppliers must maintain and make available to the public certain information regarding the total generating capacity of customer-generators.

Net metering units must meet certain standards. The retail electric supplier may not require a customer-generator to meet further requirements if the net metering unit has met the standards. Applications by a customer-generator for interconnection must be responded to within 30 days and if it is approved connection must be completed within 15 days.

The Public Service Commission in consultation with the Department of Natural Resources will promulgate rules to ensure that simplified contracts will be used for interconnection. The net metering provisions are the same as SB 529.