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H.B. 313 Enrolled
AN ACT RELATING TO PUBLIC UTILITIES; PROVIDING FOR AN INTERIM RATE
FREEZE ON ELECTRIC SERVICE RATES; CREATING THE ELECTRIC
DEREGULATION AND CUSTOMER CHOICE TASK FORCE; PROVIDING FOR
MEMBERSHIP; DELINEATING RESPONSIBILITIES AND PROCEDURES;
PROVIDING A REPORTING DATE; APPROPRIATING $197,000 FROM THE
GENERAL FUND IN FISCAL YEAR 1996-97; PROVIDING AN EFFECTIVE DATE;
AND PROVIDING A REPEAL DATE.
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
(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.
(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
(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
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;
(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
(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
Section 7. Repeal date.
This act is repealed November 30, 1998.
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