SENATE 3rd Reading Unamended April 6, 2016 SENATE Amended 2nd Reading April 5, 2016Second Regular Session Seventieth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 16-0567.01 Thomas Morris x4218 SENATE BILL 16-061 SENATE SPONSORSHIP Cooke and Sonnenberg, HOUSE SPONSORSHIP Dore, Senate Committees House Committees Agriculture, Natural Resources, & Energy Appropriations A BILL FOR AN ACT Concerning the protection of electric utility ratepayers from the increased costs associated with implementation of requirements to regulate carbon dioxide emissions from existing fossil-fuel-fired electric generating units, and, in connection therewith, making an appropriation. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) The bill directs the public utilities commission to create a ratepayer protection program, pursuant to which an electric utility's increased costs attributable to compliance with the federal environmental protection agency's regulations that limit carbon dioxide emissions from existing fossil-fuel-fired electric generating units are paid from a state fund rather than by the utility's customers. The fund is financed by appropriations from the stationary sources control fund. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, add part 2 to article 8.7 of title 40 as follows: PART 2 ELECTRIC RATEPAYER PROTECTION 40-8.7-201. Short title. The short title of this part 2 is the "Ratepayer Protection Act". 40-8.7-202. Legislative declaration. (1) The general assembly hereby: (a) Finds that: (I) The EPA has adopted rules under section 111 (d) of the federal "Clean Air Act" that direct states to regulate carbon dioxide emissions from existing fossil-fuel-fired electric generating units; (II) On February 9, 2016, the supreme court of the United States granted a stay of EPA's 111 (d) rules based on a finding that irreparable harm would result if the stay was not granted. The court made it clear that the stay will be effective through the completion of any proceedings in the supreme court. (III) These rules will have a major impact on Colorado's economy by regulating how electricity is produced, transmitted, distributed, and consumed within Colorado; (IV) Although the governor and the department have committed to develop a state plan that will not adversely impact ratepayers, implementing the EPA's rules could affect the cost, reliability, and future improvement of electric service within the state of Colorado, and the department, as the agency responsible for developing the state plan, should bear the fiscal impact of a state plan that effects a rate increase; (b) Determines that electric utility ratepayers should be protected from these adverse impacts; and (c) Declares that the general assembly's intent in enacting this part 2 is to authorize a program that allows electric utilities to recover their costs attributable to compliance with the federal emission regulations without imposing those costs on electric utility ratepayers. 40-8.7-203. Definitions. As used in this part 2, unless the context otherwise requires: (1) "Commission" means the public utilities commission. (2) "Department" means the department of public health and environment. (3) "EPA" means the federal environmental protection agency. (4) "Federal emission regulations" means any final rules, regulations, guidelines, or other requirements that the EPA may adopt for regulating carbon dioxide emissions from covered electric generating units under section 111 (d) of the federal "Clean Air Act", 42 U.S.C. sec. 7401 et seq., including specifically 40 CFR part 60 subpart TTTT, also known as the clean power plan. (5) "Federal plan" means a plan to establish and enforce in Colorado the federal emission regulations that the EPA may adopt to implement Colorado's obligations under the regulations. (6) "Fund" means the ratepayer protection fund created in section 24-38.5-110, C.R.S. (7) "State plan" means a plan, whether or not incorporated into the state implementation plan or adopted as a state-only rule, to establish and enforce in Colorado the federal emission regulations that the air quality control commission may adopt to implement Colorado's obligations under the regulations. 40-8.7-204. Ratepayer protection. (1) On or before the effective date of any federal or state plan, the commission, after consultation with affected utilities and after holding a hearing pursuant to article 6 of this title, shall develop a program to implement this part 2, including: (a) Guidance for utilities regarding the allocation of compliance costs to customers; (b) Procedures for the quarterly remittance to utilities of money from the fund; and (c) An annual report to the joint budget committee of the general assembly by November 1 of each year that identifies the amount of money that is projected to be reported to the commission in the succeeding state fiscal year pursuant to paragraph (b) of subsection (2) of this section. (2) Each utility that, due to its compliance with the federal emission regulations, incurs increased costs that the utility is entitled to recover in full or in part shall: (a) Separately state on each customer's remittance device: (I) The amount of such costs that are allocated to the customer during the billing period covered by the remittance device; and (II) That the customer's allocation is paid through the ratepayer protection program created by this part 2; (b) Report the amount to the commission; and (c) Not charge the amount to the customer. (3) The commission shall quarterly remit from the fund to each utility that reports an amount to the commission pursuant to paragraph (b) of subsection (2) of this section the total of such amounts reported by that utility during the previous quarter. If the available balance in the fund is insufficient to fully remit all amounts, the state treasurer shall transfer from the general fund to the fund enough money to fully remit all amounts. 40-8.7-205. Ratepayer impact analysis - appropriation. (1) The commission shall conduct and periodically update, including during any utility rate-making hearing and integrated resource planning proceeding, an economic analysis of utilities' costs of compliance with the federal emission regulations for the purpose of making the annual report to the joint budget committee pursuant to section 40-8.7-204 (1) (c). The commission shall make specific findings regarding its conclusions about the costs of compliance and whether its current ratepayer impact analysis is accurate or must be adjusted. (2) The general assembly shall annually transfer to the fund sufficient money from the general fund to enable the commission to make the remittances required by this section. SECTION 2. In Colorado Revised Statutes, add 24-38.5-110 as follows: 24-38.5-110. Ratepayer protection fund. (1) The ratepayer protection fund is hereby created in the state treasury. The fund consists of money appropriated to the fund pursuant to section 40-8.7-205 (2), C.R.S. The state treasurer shall credit all interest and income derived from the deposit and investment of money in the fund to the fund. (2) The public utilities commission shall use the fund only to: (a) Remit to utilities the amounts reported to the commission as specified in section 40-8.7-204 (1) (b), C.R.S.; and (b) Cover its direct costs in administering the ratepayer protection program created in part 2 of article 8.7 of title 40, C.R.S., which must not exceed three percent of the average annual balance of the fund. (3) Money in the fund is continuously appropriated to the commission for these purposes. SECTION 3. In Colorado Revised Statutes, amend 40-8.7-101 as follows: 40-8.7-101. Short title. The short title of this article shall be known and may be cited as part 1 is the "Low-income Energy Assistance Act". SECTION 4. In Colorado Revised Statutes, 40-8.7-103, amend introductory portion and (1) as follows: 40-8.7-103. Definitions. As used in this article part 1, unless the context otherwise requires: (1) "Alternative energy assistance program" means a program operated by a municipally owned electric and gas utility or cooperative electric association that is not part of the energy assistance program established pursuant to this article part 1. SECTION 5. In Colorado Revised Statutes, 40-8.7-104, amend (1) and (2) as follows: 40-8.7-104. Energy assistance program - creation - energy assistance charge - rules. (1) There is hereby created the low-income energy assistance program to collect and disburse an optional energy assistance contribution in Colorado in accordance with this article part 1. (2) Except as otherwise provided in this article part 1, every utility doing business in Colorado shall participate in the energy assistance program and shall provide the opportunity for utility customers to make an optional energy assistance contribution on the monthly remittance device on their utility billing statement beginning September 1, 2006. Each utility shall provide the opportunity for customers to donate the optional energy assistance contribution as provided in section 40-8.7-105 (2). SECTION 6. In Colorado Revised Statutes, 40-8.7-106, amend (1) introductory portion, (2), and (3) (a) as follows: 40-8.7-106. Municipally owned gas, electric, and gas and electric utilities and cooperative electric associations. (1) If a municipally owned gas, electric, or gas and electric utility or a cooperative electric association operates an alternative energy assistance program to support its low-income customers with their home energy needs, then the governing body of the municipally owned gas, electric, or gas and electric utility or cooperative electric association may self-certify its alternative energy assistance program and, upon self-certification, shall have no obligations under this article part 1. The municipally owned utility or cooperative electric association shall submit a statement to the organization that such utility or cooperative electric association has an alternative energy assistance program. In order for such utility or cooperative electric association to self-certify, such alternative energy assistance program shall meet the following criteria: (2) If the governing body of a municipally owned gas, electric, or gas and electric utility or a cooperative electric association determines that the service area of such utility or cooperative has a limited number of people who qualify for energy assistance, such utility or cooperative electric association may be exempt from the obligations of this article part 1. (3) If a municipally owned gas, electric, or gas and electric utility or cooperative electric association has not self-certified an alternative energy assistance program pursuant to subsection (1) of this section or has not exempted itself pursuant to subsection (2) of this section, such utility or cooperative electric association shall collect an optional energy assistance charge from its customers as provided in section 40-8.7-104 (1) and (2) or pursuant to a procedure approved by the governing municipal utility or cooperative, which procedure shall be designed to notify all customers at least twice each year of the option to contribute by means of a monthly energy assistance charge and shall provide a convenient means for customers to exercise that option. In such circumstances, the governing body of such utility or cooperative shall determine the disposition and delivery of the optional energy assistance charge that it collects on the following basis: (a) The governing body may elect to deliver the optional charge that it collects to the organization for distribution in accordance with this article part 1. SECTION 7. In Colorado Revised Statutes, 40-8.7-107, amend (1) introductory portion and (3) as follows: 40-8.7-107. Disposition of money. (1) Each gas and electric utility shall transfer the moneys money from the energy assistance contributions collected under this article part 1 to the organization on the following schedule: (3) The organization shall pay the public utilities commission from the moneys money transferred to the organization pursuant to subsection (1) of this section for any administrative costs incurred pursuant to this article part 1. SECTION 8. In Colorado Revised Statutes, 40-8.7-108, amend (1) and (3) as follows: 40-8.7-108. Energy outreach Colorado - administration of the energy assistance charge. (1) The organization shall hold and administer all moneys money collected pursuant to this article part 1 delivered to it by the utilities pursuant to section 40-8.7-107 in a separately identifiable account, which shall be restricted to the purposes set forth in this article part 1. The organization shall maintain its books and records pertaining to the energy assistance contributions in accordance with generally accepted accounting principles and, in addition, shall maintain records adequate to identify the moneys money collected by each utility. If the organization commingles the moneys money collected and delivered with other assets of the organization for investment purposes, the organization shall maintain accurate accounts of the investment moneys money and shall credit or charge a pro rata portion of all investment earnings, gains, or losses to the account that holds the energy assistance charges. (3) The organization shall, on an annual basis, develop a budget for the energy assistance program to determine the allocation of the energy assistance contributions collected under this article part 1. SECTION 9. In Colorado Revised Statutes, 40-8.5-103.5, amend (4) (a) introductory portion as follows: 40-8.5-103.5. Commission created - duties. (4) (a) No later than December 15, 2008, the commission shall make recommendations to the governor, the speaker of the house of representatives, and the president of the senate regarding any necessary legislative changes to improve the effectiveness and efficiency of the state's low-income energy assistance services provided pursuant to part 1 of article 8.7 of this title and section 26-1-109, C.R.S. With assistance and consultation from representatives from two counties chosen by the executive director, or his or her designee, of Colorado counties, incorporated, or its successor organization, the commission shall assess the strengths and weaknesses of the current service delivery systems within the state and shall review effective service delivery systems and models of other states that may be appropriate for utilization in this state. The commission's recommendations shall build upon the positive aspects of the current service delivery system, including, but not limited to, the effective and efficient management of current funding to maximize assistance to the state's low-income population, infrastructure that is already in place to efficiently distribute benefits to eligible clients in a timely manner, and coordination already established between energy conservation measures and direct assistance. The commission's recommendations shall include, but shall not be limited to: SECTION 10. Appropriation. (1) For the 2016-17 state fiscal year, $164,310 is appropriated to the department of regulatory agencies for use by the public utilities commission. This appropriation is from the ratepayer protection fund created in section 24-38.5-110 (1), C.R.S., and is based on an assumption that the public utilities commission will require an additional 2.0 FTE. To implement this act, the public utilities commission may use this appropriation for personal services. (2)The money appropriated in subsection (1) of this section becomes available if: (a) The stay issued in the case of Chamber of Commerce v. EPA is lifted by June 30, 2016; (b) The case of Chamber of Commerce v. EPA is decided in favor of the federal environmental protection agency and allows for the implementation of the federal clean power plan; and (c) The attorney general notifies, in writing, the state treasurer that a final judgment has been entered and the applicable period to file a writ of certiorari, if any, has expired in the case of Chamber of Commerce v. EPA regarding the federal emissions regulations. SECTION 11. Effective date - applicability. This act takes effect upon passage and applies to conduct occurring on or after said date. SECTION 12. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.