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H.B. 313 Enrolled






Sponsor: Christine R. Fox

         54-7-12.3, Utah Code Annotated 1953
    This act enacts uncodified material.
    Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 54-7-12.3 is enacted to read:
         54-7-12.3. Task force to consider stranded cost issues -- Interim rate freeze.
        (1) The task force created by H.B. 313, "Electrical Deregulation and Customer Choice
    Task Force" in the 1997 General Session shall consider the following issues relating to the
    stranded costs of electric service providers:
        (a) what are stranded costs;
        (b) what are the alternative methods, and the appropriateness of each method, for
    measuring the value of stranded costs;
        (c) who should pay for stranded costs; and
        (d) when should customers be allowed to choose their electric service providers and
    terminate the services of current providers.
        (2) To allow the task force maximum flexibility in deciding the issues specified in
    Subsection (1), each investor-owned electrical corporation shall freeze its rates on an interim basis

    on the effective date of this section for each of the electrical corporation's electric service schedules
    at January 31, 1997 levels. These interim rate levels shall remain in effect until 60 days following
    the conclusion of the 1998 General Session and shall not be final until the Public Service
    Commission completes any rate case pending as of the effective date of this act.
        (3) Notwithstanding Sections 54-4-2, 54-4-4, and 54-7-12, during the interim rate freeze
    period, the commission may not order, nor hold any hearings regarding, any increases or decreases
    in the January 31, 1997 rate levels of an electrical corporation subject to the interim rate freeze.
    However, nothing in this section shall prevent an electrical corporation from providing, subject to
    the provisions of Subsection 54-7-12(4), electric services during the interim rate freeze period at
    prices less than the interim rate freeze level, which are nondiscriminatory as described by Section
        Section 2. Electric Deregulation and Customer Choice Task Force -- Creation --
     Membership -- Interim rules followed -- Compensation -- Staff.
        (1) There is created the Electric Deregulation and Customer Choice Task Force consisting
    of the following members:
        (a) five members of the Senate appointed by the president of the Senate, no more than three
    of whom may be from the same political party; and
        (b) seven members of the House of Representatives appointed by the speaker of the House
    of Representatives, no more than five of whom may be from the same political party.
        (2) (a) The president of the Senate shall designate a member of the Senate appointed under
    Subsection (1)(a) as a cochair of the task force.
        (b) The speaker of the House of Representatives shall designate a member of the House of
    Representatives appointed under Subsection (1)(b) as a cochair of the task force.
        (3) In conducting its business, the task force shall comply with the rules of legislative
    interim committees.
        (4) Salaries and expenses of the members of the task force shall be paid in accordance with
    Section 36-2-2 and Legislative Joint Rule 15.03.
        (5) (a) The task force may create subcommittees to accomplish its duties.

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        (b) Subcommittees may include individuals who are not task force members.
        (c) If a subcommittee includes individuals who are not task force members, the composition
    shall be broad-based such that regulatory, consumer group, industrial, municipal utility, rural electric
    cooperative, and investor-owned utility viewpoints are fully represented.
        (d) Individuals other than legislators serving on subcommittees who are not task force
    members shall receive no per diem or expenses for their service on the subcommittee.
        (6) The Office of Legislative Research and General Counsel shall provide staff support to
    the task force.
        Section 3. Policy goals.
        The task force shall study the appropriateness of, and if agreed to, the most appropriate
    means of implementing policy goals which could include the following:
        (1) to provide safe, reliable, and reasonably priced electricity for all consumers;
        (2) to permit electric consumers to choose their suppliers of electricity and electric services
    at prices determined by the competitive marketplace;
        (3) to replace comprehensive regulation of electric suppliers with effective competition;
        (4) to allow all electric consumers to enjoy fair, nondiscriminatory, and comparable access
    to alternative suppliers of electricity and ancillary electric services, and to electric transmission and
    distribution systems;
        (5) to allow all customer classes to enjoy the benefits of a competitive market;
        (6) to prevent costs from being unfairly shifted among customer classes;
        (7) to stimulate economic growth through greater competition in the electric industry;
        (8) to facilitate efforts of businesses to compete in the national and global economy by
    promoting competition in the electric industry; and
        (9) to encourage innovation and efficiency in electric products and services through exposure
    to the competitive marketplace.
        Section 4. Duties -- Interim report.
        (1) The task force shall review and make recommendations on the following issues:
        (a) the extent to which municipal, public, and member-owned providers of electric services

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    should participate in electric deregulation and customer choice and reasonable terms, conditions, and
    provisions relating to that participation;
        (b) terms for allowing an owner of retail distribution facilities to recover stranded costs and
    to provide retail electric services in areas currently served by others if and to the extent it permits
    open access and customer choice for retail customers located within its own service territories;
        (c) means for providing electric service providers a reasonable opportunity to recover their
    net, nonmitigatable stranded costs, liabilities, or investments, if any, including regulatory assets,
    prudently incurred in connection with the provision of electric generation and ancillary services
    within the state for which a reasonable expectation of recovery existed under existing law and
    regulations but which no longer exists as a direct result of electric deregulation;
        (d) procedures for allowing customers, including small commercial and residential
    customers, to aggregate their electric generation and ancillary services with those of other customers;
        (e) means for assuring access and eliminating barriers to distribution facilities for all eligible
    suppliers of electric generation and ancillary services on a fair, open-access, and nondiscriminatory
        (f) means for assuring that anyone requesting electric services will be connected to
    distribution facilities on reasonable terms;
        (g) means for making the benefits of restructuring available to all electric consumers and for
    preserving existing programs and benefits that are determined to be effective, equitable, and in the
    public interest, such as low-income, rural, energy efficiency, and renewable resource programs, and
    plans to phase out those programs over a reasonable period of time, to the extent practicable, to
    encourage and enable a full transition to competitive markets;
        (h) procedures, standards of conduct, and other measures for enforcing state laws and
    policies prohibiting anticompetitive behavior by electric service suppliers, including:
        (i) any necessary separation of generation, transmission, and distribution functions; and
        (ii) procedures for requiring a showing by each electric service provider that it lacks any
    relevant market power or that it has taken adequate steps to mitigate potential anticompetitive
    behavior or other effects of its market power;

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        (i) terms and conditions for ensuring adequate levels of safety, reliability, disclosure, and
    customer service, including coordination and enforcement protocols for all users of electric
    distribution services;
        (j) provisions to provide all customers an option to continue to receive electric generation
    and ancillary services at regulated, cost-based rates;
        (k) interim or transitional regulations that may be warranted prior to the deregulation of
    electric generation, including price freezes;
        (l) the need for changes to existing laws to accommodate retail customer choice; and
        (m) other issues related to electric deregulation and customer choice.
        (2) (a) An interim report relating to investor-owned electrical corporations, including any
    proposed legislation, shall be presented to one or more interim committees as designated by the
    Legislative Management Committee by November 30, 1997.
        (b) A final report dealing with all other issues, including any proposed legislation, shall be
    presented to one or more interim committees as designated by the Legislative Management
    Committee by November 30, 1998.
        Section 5. Appropriation.
        There is appropriated from the General Fund for fiscal year 1996-1997:
        (1) $20,000 to the Senate to pay for the compensation and expenses of senators on the task
        (2) $27,000 to the House of Representatives to pay for the compensation and expenses of
    representatives on the task force; and
        (3) $150,000 to the Office of Legislative Research and General Counsel to pay for staffing
    the task force, including consultant services.
        Section 6. Effective date.
        If approved by two-thirds of all the members elected to each house, this act takes effect upon
    approval by the governor, or the day following the constitutional time limit of Utah Constitution
    Article VII, Section 8, without the governor's signature, or in the case of a veto, the date of veto

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        Section 7. Repeal date.
        This act is repealed November 30, 1998.

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