First Regular Session

Sixty-first General Assembly

LLS NO. 97­0065.01 DHG HOUSE BILL 97­1277

STATE OF COLORADO

BY REPRESENTATIVE Schauer

BUSINESS AFFAIRS & LABOR

A BILL FOR AN ACT

CONCERNING THE RESTRUCTURING OF THE RETAIL ELECTRIC MARKET IN COLORADO.

Bill Summary

(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments which may be subsequently adopted.)

Declares a policy to promote customer choice of retail electric supply and services by restructuring electric markets in the state so that the retail price of electricity is set by the market, not by regulation as it is under the current system of regulated monopoly. Sets forth governing principles to be applied by the public utilities commission (PUC) and by the governing bodies of utilities, which principles include deregulation of the supply of electricity to the extent practicable, continued regulation of delivery functions, continued collection of municipal franchise fees, customer choice, open access to delivery facilities, unbundling of services, and recovery of stranded costs.

Establishes new controls on sulfur dioxide emissions from some electric power plants, calls upon the department of public health and environment to conduct an inventory of current sulfur dioxide and other emissions from electric generation, and establishes a cap on sulfur dioxide emissions from electric power plants in the state. Requires that utilities file and charge their customers non­bypassable rates, amounting to 1% of gross electric revenues, to pay for the cost of retaining existing benefits from the system of regulated monopoly.

Denies utilities the right to make retail sales over the delivery systems of other utilities until they provide open access on their own systems. Allows certain utilities the option of implementing restructuring plans voluntarily.

Sets forth a 3­year timetable for restructuring of the retail electric market. Requires utilities to file with the PUC and implement their restructuring plans, subject to public hearings and findings on whether the plans will serve the governing principles previously set forth. Requires semi­annual reports to the general assembly on the progress of such restructuring plans.

Authorizes, in addition to other available remedies, civil suits for injunction, mandamus, or judicial review by any person affected by the failure or refusal of a utility or its governing body to comply with the requirements of the bill, and enforcement under the antitrust laws of Colorado and the United States.

Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  Title 40, Colorado Revised Statutes, 1993 Repl. Vol., as amended, is amended BY THE ADDITION OF A NEW ARTICLE to read:

ARTICLE 18

Intrastate Electric Service

40­18­101.  Legislative declaration ­ purpose of article ­ process for implementation. (1)  THE GENERAL ASSEMBLY FINDS, DETERMINES, AND DECLARES THAT:

(a)  DEVELOPING COMPETITION IN THE RETAIL ELECTRIC SUPPLY FUNCTION JUSTIFIES HAVING THE PRICE OF ELECTRICITY AS A COMMODITY SET BY THE COMPETITIVE MARKETPLACE, RATHER THAN BY REGULATION.

(b)  A RAPID BUT ORDERLY TRANSITION FROM A FULLY REGULATED RETAIL ELECTRIC MARKET TO ONE IN WHICH EVERY CUSTOMER HAS A CHOICE OF ELECTRIC SUPPLIERS IS FEASIBLE AND WILL BRING SAVINGS TO CONSUMERS.

(c)  THE PROCESS OF RESTRUCTURING THE ELECTRIC RETAIL MARKET IN COLORADO IS A MATTER OF STATEWIDE CONCERN THAT SHOULD BE GOVERNED BY A SET OF POLICY OBJECTIVES OR PRINCIPLES THAT MAXIMIZE THE AMOUNT, TYPE, AND DISTRIBUTION OF BENEFITS TO COLORADO ELECTRIC CONSUMERS. THESE PRINCIPLES ARE SET FORTH IN SECTION 40­18­103 (1).

(d)  UNDER COLORADO LEGAL PRECEDENT, A LIMITED NUMBER OF CONTRACT SALES OF RETAIL ELECTRICITY DO NOT, ABSENT A HOLDING OUT BY THE SELLER TO SERVE THE PUBLIC AT LARGE, CAUSE THE SELLER TO ACQUIRE THE STATUS OF "PUBLIC UTILITY" UNDER THE PUBLIC UTILITIES LAW. NOTHING IN THIS ARTICLE IS INTENDED TO REPEAL OR LIMIT THIS PRECEDENT, NOR DOES THIS ARTICLE APPLY TO A SELLER UNDER SUCH CIRCUMSTANCES.

(2)  THE PURPOSE OF THIS ARTICLE IS TO PROVIDE CUSTOMER CHOICE OF RETAIL ELECTRIC SUPPLY AND SERVICES BY RESTRUCTURING ELECTRIC MARKETS WITHIN THE STATE, SUCH THAT THE PRICE OF RETAIL ELECTRICITY AS A COMMODITY WILL BE SET BY THE MARKET, NOT BY REGULATION. A MORE COMPETITIVE AND DIVERSE RETAIL ELECTRIC ENERGY MARKET IS EXPECTED TO LOWER ELECTRICITY PRICES FOR CONSUMERS, CREATE BUSINESS OPPORTUNITIES, IMPROVE ENERGY EFFICIENCY, ENCOURAGE THE DEVELOPMENT OF MORE AND BETTER SERVICES, AND STIMULATE NEW TECHNOLOGIES.

(3)  Process. THE GENERAL ASSEMBLY INTENDS THAT THE RESTRUCTURING OF THE COLORADO RETAIL ELECTRIC MARKET PROCEED IN ACCORDANCE WITH THE PRINCIPLES SET OUT IN SECTION 40­18­103 (1) AND THAT ALL AFFECTED PERSONS BE GIVEN A CHANCE TO PARTICIPATE. THE COMMISSION AND THE OTHER GOVERNING BODIES IDENTIFIED IN SECTION 40­18­104 (2) SHALL, WITH RESPECT TO THE UTILITIES OVER WHICH THEY HAVE JURISDICTION, IMPLEMENT THE PROCESS.

40­18­102.  Definitions. AS USED IN THIS ARTICLE, UNLESS THE CONTEXT OTHERWISE REQUIRES:

(1)  "AFFILIATE" HAS THE SAME MEANING AS "AFFILIATE OF A PUBLIC UTILITY" SET FORTH IN SECTION 40­3­104.3 (4) (b).

(2)  "COMMISSION" MEANS THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO CREATED IN SECTION 40­2­101.

(3)  "DELIVERY FUNCTION" MEANS THE FUNCTION OF TRANSPORTING ELECTRICITY TO RETAIL END­USERS OVER TRANSMISSION AND DISTRIBUTION FACILITIES FROM AN ELECTRIC GENERATOR, OR FROM ANY OTHER POINT AT WHICH THE ELECTRICITY IS RECEIVED INTO THE TRANSMISSION AND DISTRIBUTION FACILITIES, INSOFAR AS THAT FUNCTION IS BEYOND THE FEDERAL GOVERNMENT'S REGULATORY JURISDICTION. "DELIVERY FUNCTION" DOES NOT INCLUDE ADMINISTRATIVE FUNCTIONS SUCH AS METERING AND BILLING.

(4)  "FORFEITABLE REGULATORY BENEFIT" MEANS AN ECONOMIC, ENVIRONMENTAL, OR SOCIAL BENEFIT THAT:

(a)  HAS ARISEN IN THE COURSE OF UTILITY REGULATION TO DATE; AND

(b)  WILL BE FORFEITED UNDER RESTRUCTURING OF THE RETAIL ELECTRIC MARKET.

(5)  "GOVERNING BODY" MEANS:

(a)  WITH RESPECT TO ELECTRIC UTILITIES SUBJECT TO THE COMMISSION'S JURISDICTION FOR RATEMAKING OR CONSTRUCTION OF NEW FACILITIES, THE COMMISSION;

(b)  WITH RESPECT TO A MUNICIPALLY OWNED ELECTRIC UTILITY EXEMPT FROM COMMISSION REGULATION UNDER ARTICLE XXV OF THE STATE CONSTITUTION, THE UTILITY'S GOVERNING BODY IDENTIFIED IN SECTION 40­3.5­102;

(c)  WITH RESPECT TO A COOPERATIVE ELECTRIC ASSOCIATION EXEMPT FROM COMMISSION REGULATION UNDER SECTION 40­3.5­103, THE ASSOCIATION'S ELECTED GOVERNING BODY IDENTIFIED IN SECTION 40­9.5­101;

(d)  WITH RESPECT TO ANY OTHER ELECTRIC UTILITY EXEMPT FROM COMMISSION REGULATION, THE GOVERNMENTAL, QUASI­GOVERNMENTAL, OR OTHER BODY THAT EXERCISES JURISDICTION OVER THE UTILITY'S RATES OR CONSTRUCTION OF NEW FACILITIES.

(6)  "STRANDED COSTS" MEANS THE NET OF A UTILITY'S ABOVE­MARKET AND BELOW­MARKET RESOURCE COSTS AND INVESTMENTS PRUDENTLY OR INVOLUNTARILY CONTRACTED FOR AS OF JANUARY 1, 1997, TO SERVE COLORADO RETAIL CONSUMERS, MINUS THE TOTAL OF:

(a)  REVENUES AND COST SAVINGS THAT THE UTILITY CAN REASONABLY EXPECT TO REALIZE IN THE RESTRUCTURED ELECTRIC MARKET, INCLUDING FROM RESOURCES ALREADY INSTALLED;

(b)  AMOUNTS BY WHICH SUCH COSTS CAN BE OR COULD HAVE BEEN MITIGATED AFTER JANUARY 1, 1995, AND DURING AND AFTER IMPLEMENTATION OF FULL RESTRUCTURING THROUGH THE EXERCISE OF PRUDENT MANAGERIAL DISCRETION; AND

(c)  AMOUNTS BY WHICH SUCH COSTS ARE ATTRIBUTABLE TO TYPICAL VARIATIONS IN THE BUSINESS CYCLE, WEATHER, PRODUCTION AND MANUFACTURING PROCESSES, INSTALLATION OR EXPANSION OF ENVIRONMENTAL CONTROL AND CONSERVATION MEASURES, AND SELF­GENERATION EQUIPMENT, AND OTHER SIMILAR FACTORS.

(7)  "SUPPLY FUNCTION" MEANS THE FUNCTION OF GENERATING OR ARRANGING A SUPPLY OF ELECTRICITY FOR CONSUMPTION BY ONE OR MORE END­USERS, INCLUDING ONESELF, AND, TO THE EXTENT NOT PART OF THE DELIVERY FUNCTION, THE PROVIDING OF SERVICES THAT SUPPORT OR FACILITATE END­USER CONSUMPTION. "SUPPLY FUNCTION" INCLUDES METERING AND BILLING SERVICES.

40­18­103.  Governing principles. (1)  THE FOLLOWING PRINCIPLES SHALL BE BINDING ON THE COMMISSION, ON THE GOVERNING BODIES IDENTIFIED IN SECTION 40­18­104 (2), ON THE UTILITIES, AND ON ALL OTHER PARTIES INVOLVED IN IMPLEMENTING A COMPETITIVE RETAIL ELECTRIC MARKET IN COLORADO:

(a)  Customer choice. (I)  CUSTOMER CHOICE MEANS THAT RETAIL ELECTRIC CUSTOMERS SHALL, IN ACCORDANCE WITH THEIR PREFERENCES, BE ALLOWED TO PURCHASE DIFFERENT LEVELS AND QUALITY OF ELECTRIC SUPPLY AND METERING AND BILLING SERVICES FROM A VARIETY OF ALTERNATE SUPPLIERS. SUCH DIFFERENT LEVELS AND QUALITY SHALL INCLUDE, BUT NOT BE LIMITED TO, DIFFERENT DEGREES OF FIRMNESS AND ENVIRONMENTAL IMPACT.

(II)  NO TRANSMISSION OR DISTRIBUTION UTILITY SHALL BE LIABLE FOR DAMAGES TO A CURRENT OR FUTURE CUSTOMER AS A RESULT OF THE FAILURE OF SUCH CUSTOMER'S CHOSEN GENERATION SUPPLIER OR PROVIDER OF UNBUNDLED SERVICES TO PERFORM UNDER A BILATERAL CONTRACT WITH THE CUSTOMER. THIS SUBPARAGRAPH (II) SHALL NOT BE CONSTRUED TO RELIEVE A TRANSMISSION OR DISTRIBUTION FACILITY OF LIABILITY FOR ITS OWN ACTS OR OMISSIONS.

(b)  Deregulation of the retail supply of electricity. IN ORDER TO PROVIDE CUSTOMER CHOICE, ALL TYPES OF SUPPLIERS OF ELECTRICITY MUST BE ALLOWED TO COMPETE FOR RETAIL CUSTOMERS DIRECTLY, IN A MARKET ENVIRONMENT THAT ENCOURAGES FULL AND NONDISCRIMINATORY COMPETITION. THIS WILL REQUIRE DEREGULATION OF THE RETAIL ELECTRIC SUPPLY FUNCTION EXCEPT TO THE LIMITED EXTENT REQUIRED TO ENSURE:

(I)  THE FINANCIAL RESPONSIBILITY OF SUPPLIERS, INCLUDING, WITHOUT LIMITATION, GENERATORS, AGGREGATORS, MARKETERS, AND OTHER TYPES OF RESELLERS;

(II)  FULL AND FAIR COMPETITION, DURING THE TRANSITION TO A FULLY COMPETITIVE RETAIL SUPPLY MARKET, FOR THE RIGHT TO PROVIDE UTILITIES' NEW WHOLESALE POWER REQUIREMENTS;

(III)  THE RELIABILITY OBJECTIVES SET FORTH IN PARAGRAPH (g) OF THIS SUBSECTION (1);

(IV)  THE PREVENTION OF CROSS­SUBSIDIZATION BY OR OF SUPPLY AFFILIATES;

(V)  THE REIMBURSEMENT TO NONMUNICIPAL UTILITIES, BY ENTITIES ENGAGED IN THE SUPPLY FUNCTION, WITHOUT DISCLOSURE OF SALES VOLUME OR PRICE INFORMATION, OF THE SHARE OF REVENUE­BASED MUNICIPAL FRANCHISE FEES ALLOCABLE TO SAID ENTITIES, PURSUANT TO SUBPARAGRAPH (II) OF PARAGRAPH (m) OF THIS SUBSECTION (1);

(VI)  ADHERENCE TO THE REQUIREMENTS OF SUBPARAGRAPH (III) OF PARAGRAPH (e) OF THIS SUBSECTION (1);

(VII)  UNIVERSAL ACCESS TO RETAIL ELECTRIC SERVICE, IN ACCORDANCE WITH PARAGRAPH (o) OF THIS SUBSECTION (1).

(c)  Continued regulation of the delivery of retail electricity. THE DELIVERY FUNCTION SHALL REMAIN SUBJECT TO REGULATION.

(d)  Obligation to connect. (I)  THE LOCAL UTILITY SHALL BE RELIEVED OF ITS TRADITIONAL OBLIGATION TO SERVE, BUT SHALL HAVE AN OBLIGATION TO CONNECT ALL CUSTOMERS WITHIN ITS SERVICE TERRITORY ON NONDISCRIMINATORY TERMS AND CONDITIONS.

(II)  CUSTOMERS SHALL HAVE THE RIGHT TO SELECT THEIR SOURCE OF POWER SUPPLY AND SHALL HAVE NONDISCRIMINATORY ACCESS TO INTERCONNECTION WITH THE HOST ELECTRIC UTILITY, WHICH SHALL TRANSPORT THE ELECTRICITY FROM THE POINT OF GENERATION TO THE HOST'S DISTRIBUTION FACILITIES.

(III)  IN THE CASE OF A RESIDENTIAL CUSTOMER AND A CUSTOMER IN SUCH OTHER CLASS, SUBCLASS, OR CATEGORY AS MAY BE DESIGNATED BY THE COMMISSION, THE CUSTOMER'S FAILURE TO MAKE ALTERNATIVE ARRANGEMENTS FOR POWER SUPPLY AND DELIVERY SHALL BE DEEMED A REQUEST TO THE COMMISSION TO CONNECT TO A DISTRIBUTION SYSTEM AND TO PURCHASE POWER SUPPLY, DELIVERY, AND ANY OTHER SERVICES NECESSARY TO THE SUPPLY AND DELIVERY FUNCTIONS FROM A SUPPLIER SELECTED AND ASSIGNED BY THE COMMISSION. SELECTION AND ASSIGNMENT OF SUPPLIERS FOR THIS PURPOSE SHALL BE DONE ON A RANDOM AND ROTATING BASIS.

(e)  Open and comparable access. (I)  ALL PERSONS ENGAGED IN THE SUPPLY FUNCTION, INCLUDING FOR THEMSELVES, SHALL HAVE OPEN, COMPARABLE, NONDISCRIMINATORY ACCESS TO:

(A)  UTILITY FACILITIES UTILIZED IN THE RETAIL DELIVERY FUNCTION; AND

(B)  TECHNICAL INFORMATION AND CUSTOMER DATA NEEDED TO COMPETE EFFECTIVELY, SUBJECT TO REASONABLE CONCERNS OF CUSTOMER PRIVACY AND CONFIDENTIALITY.

(II)  AN ENTITY THAT, EITHER DIRECTLY OR THROUGH AFFILIATES, IS ENGAGED IN BOTH THE SUPPLY FUNCTION AND THE DELIVERY FUNCTION SHALL NOT RECEIVE MORE FAVORABLE RATES, TERMS, OR CONDITIONS OF SUCH ACCESS THAN THE ENTITY MAKES AVAILABLE TO OTHERS.

(III)  A UTILITY THAT ENGAGES IN THE DELIVERY FUNCTION SHALL HAVE NO OBLIGATION TO PROVIDE DELIVERY SERVICE FOR PURPOSES OF RETAIL SALES OF ELECTRICITY TO AN ENTITY ENGAGED IN THE SUPPLY FUNCTION IF SAID ENTITY ENGAGED IN THE SUPPLY FUNCTION, DIRECTLY OR THROUGH AFFILIATES, ALSO PROVIDES DELIVERY SERVICES OVER FACILITIES THAT ARE SUBJECT TO SECTION 40­18­104 AND FOR WHICH NO PLAN HAS BEEN IMPLEMENTED IN ACCORDANCE WITH SECTION 40­18­104; EXCEPT THAT THIS SUBPARAGRAPH (III) SHALL NOT BE APPLIED IN SUCH A MANNER AS TO INTERFERE WITH INTERSTATE COMMERCE.

(f)  Resolving state­federal conflicts. THE PROCESS OF RESTRUCTURING THE RETAIL ELECTRIC MARKET MAY INVOLVE DISAGREEMENTS BETWEEN COLORADO AND THE FEDERAL GOVERNMENT CONCERNING THEIR RESPECTIVE JURISDICTION OVER FACILITIES USED TO PERFORM THE DELIVERY FUNCTION. THE POLICY OF THE STATE OF COLORADO IS TO RESOLVE ANY SUCH DISAGREEMENTS IN A MANNER THAT ACHIEVES THE PURPOSES OF THIS ARTICLE.

(g)  Reliability. DURING AND AFTER THE TRANSITION TO A FULLY RESTRUCTURED RETAIL ELECTRIC MARKET, REGULATION MUST ENSURE THAT FACILITIES USED IN THE DELIVERY FUNCTION ARE RELIABLE AND SAFE, THAT DEREGULATION OF THE SUPPLY FUNCTION OCCURS WITHOUT DEGRADATION OF POWER QUALITY OR SYSTEM RELIABILITY, AND THAT THE COORDINATION AND LINKAGE OF THE ELECTRIC GRID IN COLORADO WITH THE REGION AND THE REST OF THE COUNTRY ARE MAINTAINED AND IMPROVED. DUPLICATION OF FACILITIES USED IN THE DELIVERY FUNCTION SHALL NOT OCCUR UNLESS NEEDED TO INCREASE CUSTOMER CHOICE OR TO MITIGATE THE MARKET POWER OF ENTITIES ENGAGED, DIRECTLY OR INDIRECTLY, IN BOTH THE SUPPLY FUNCTION AND THE DELIVERY FUNCTION.

(h)  Benefits to all classes of customers. ALL CUSTOMER CLASSES, INCLUDING THE RESIDENTIAL AND SMALL COMMERCIAL CUSTOMER CLASSES, SHALL BE AFFORDED A REALISTIC OPPORTUNITY, EITHER ON AN INDIVIDUAL­CUSTOMER BASIS OR THROUGH COLLECTIVE PURCHASING, TO EXERCISE CHOICE FOR ELECTRIC SUPPLY IN THE RESTRUCTURED MARKET. THE RATES OF ALL RESIDENTIAL AND SMALL COMMERCIAL CUSTOMERS MAY NOT BE RAISED AS A RESULT OF THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION IN COLORADO.

(i)  Utility stranded costs. UTILITIES SHALL HAVE THE RIGHT TO ESTABLISH, AND THE BURDEN OF PROVING, THE EXISTENCE OF STRANDED COSTS, ALL OR AN EQUITABLE PORTION OF WHICH THEY SHALL THEN BE AFFORDED A REASONABLE OPPORTUNITY TO RECOVER OVER A PERIOD NOT TO EXCEED THREE YEARS, COMMENCING ON THE DATE OF FULL IMPLEMENTATION OF THE UTILITY'S RESTRUCTURING PLAN IN ACCORDANCE WITH SECTION 40­18­104.

(j)  Forfeitable regulatory benefits. ANY PERSON, INCLUDING A UTILITY, SHALL HAVE THE RIGHT TO ESTABLISH AND THE BURDEN OF PROVING:

(I)  THE EXISTENCE OF ANY FORFEITABLE REGULATORY BENEFITS, INCLUDING PROOF OF BOTH ELEMENTS OF THE DEFINITION SET FORTH IN SECTION 40­18­102 (4); AND

(II)  THE NET COST OF SUCH FORFEITURE.

(k)  Recovery of stranded costs and forfeitable regulatory benefits. PROVEN UTILITY STRANDED COSTS, AND THE PROVEN NET COST OF FORFEITABLE REGULATORY BENEFITS, IF ANY, SHALL BE ALLOCATED AMONG ALL CUSTOMER CLASSES ON A NONDISCRIMINATORY, DEMAND­RELATED BASIS. SUCH COSTS SHALL BE RECOVERED IN THE BASE PRICE PAID BY ALL RETAIL CUSTOMERS FOR SERVICES RELATED TO THE DELIVERY FUNCTION; EXCEPT THAT THE RECOVERY MECHANISM SHALL NOT INCLUDE ENTRY OR EXIT FEES, NOR SHALL IT IMPEDE CUSTOMER CHOICE OR COMPETITION IN THE SUPPLY FUNCTION. RESTRUCTURING PLANS FILED IN ACCORDANCE WITH SECTION 40­18­104 SHALL INCLUDE A PLAN FOR RECOVERY OF STRANDED COSTS AND THE PROVEN NET COSTS OF FORFEITABLE REGULATORY BENEFITS AND SHALL INCLUDE DETAILED INFORMATION REGARDING THE STRANDED COSTS AND FORFEITABLE REGULATORY BENEFITS CLAIMED BY THE UTILITY, MITIGATION MEASURES TAKEN AND PROPOSED, AND INCREASES IN THE VALUE OF OTHER ASSETS RESULTING FROM RESTRUCTURING.

(l)  Unbundling of services. (I)  A UTILITY PERFORMING THE DELIVERY FUNCTION SHALL FUNCTIONALLY UNBUNDLE AND MAKE AVAILABLE, ON AN OPEN, COMPARABLE, NONDISCRIMINATORY BASIS, EACH DISTINCT SERVICE RELATED TO THE PERFORMANCE OF THAT FUNCTION.

(II)  NO DELIVERY­RELATED SERVICE SHALL SUBSIDIZE OR BE SUBSIDIZED BY:

(A)  A SUPPLY­RELATED SERVICE;

(B)  ANOTHER DELIVERY­RELATED SERVICE;

(C)  A COST­RECOVERY CHARGE OF THE TYPE ALLOWED IN PARAGRAPH (k) OF THIS SUBSECTION (1); OR

(D)  ANY OTHER BUSINESS OR SERVICE IN WHICH THE UTILITY OFFERING THE DELIVERY­RELATED SERVICE IS ENGAGED. FOR THE PURPOSE OF THIS SUB­SUBPARAGRAPH (D), THE TERM "UTILITY" INCLUDES ALL UTILITY AFFILIATES.

(III)  NOTHING IN THIS PARAGRAPH (l) SHALL PROHIBIT A PERSON ENGAGED IN THE SUPPLY FUNCTION FROM ASSEMBLING AND OFFERING FOR SALE TO END USERS COMBINATIONS OF SUPPLY­RELATED AND DELIVERY­RELATED SERVICES, SO LONG AS THE PRICE OF EACH DISTINCT SERVICE IS FULLY DISCLOSED.

(m)  Sanctity of contract. (I)  NOTHING IN THIS ARTICLE SHALL ABROGATE EXISTING CONTRACTUAL COMMITMENTS OF UTILITIES, INCLUDING, WITHOUT LIMITATION, COMMITMENTS TO PURCHASE ELECTRIC SUPPLY AND DEMAND­SIDE MANAGEMENT MEASURES PURSUANT TO STATE OR FEDERAL LAW.

(II)  NOTHING IN THIS ARTICLE SHALL AFFECT THE RIGHT OF A MUNICIPALITY THAT IMPOSES A FRANCHISE FEE ON THE RETAIL ELECTRIC REVENUES OF A NONMUNICIPAL UTILITY FROM CONTINUING TO ASSESS AND COLLECT SUCH FRANCHISE FEE FROM SAID NONMUNICIPAL UTILITY, BASED ON TOTAL REVENUES GENERATED FROM EXERCISE OF THE DELIVERY AND SUPPLY FUNCTIONS IN THE MUNICIPALITY IN SUCH A MANNER AS TO PRODUCE REVENUES FOR THE MUNICIPALITY EQUIVALENT TO THOSE PRODUCED BY THE FRANCHISE FEES FORMERLY APPLIED TO ALL ELECTRIC UTILITY REVENUES.

(n)  Environmental values and economic development. (I)  THE TRANSITION TO, AND GOING­FORWARD PERFORMANCE OF, THE RESTRUCTURED RETAIL ELECTRIC MARKET SHALL BE CONSISTENT WITH LEGAL STANDARDS FOR ENVIRONMENTAL PROTECTION AND ECONOMIC DEVELOPMENT IN THE STATE. NOTHING IN THIS PARAGRAPH (n) SHALL ENLARGE OR DIMINISH THE LEGAL AUTHORITY OF THE OVERSIGHT BODIES DESCRIBED IN SECTION 40­18­104 (2).

(II) (A)  Sulfur dioxide emissions controls. UPON THE FORTIETH ANNIVERSARY OF THE DATE ON WHICH A COVERED BOILER UNIT FIRST ENTERED INTO OPERATION, OR BY JULY 1, 2002, WHICHEVER DATE OCCURS LATER, THE OWNER OF SAID UNIT SHALL INSTALL CONTINUOUS EMISSIONS CONTROL TECHNOLOGIES, ADOPT OPERATIONAL CHANGES, OR TAKE OTHER EQUALLY EFFECTIVE MEASURES TO ENSURE THAT SULFUR DIOXIDE EMISSIONS FROM SUCH UNIT ARE AT LEAST SEVENTY­FIVE PERCENT LESS THAN THE EMISSIONS THAT WOULD OCCUR IF COAL WERE BEING BURNED AT THAT UNIT WITHOUT ANY SYSTEM OF EMISSIONS CONTROL FOR SULFUR DIOXIDE.

(B)  Particulates and opacity controls. UPON THE SAME DATE AS PROVIDED IN SUB­SUBPARAGRAPH (A) OF THIS SUBPARAGRAPH (II), THE OWNER OF A COVERED BOILER UNIT SHALL INSTALL CONTINUOUS EMISSIONS CONTROL TECHNOLOGIES, ADOPT OPERATIONAL CHANGES, OR TAKE OTHER EQUALLY EFFECTIVE MEASURES TO ENSURE THAT SAID UNIT=S EMISSIONS OF PARTICULATE MATTER DO NOT EXCEED THREE ONE­HUNDREDTHS POUNDS PRIMARY PARTICULATE MATTER PER MILLION BRITISH THERMAL UNITS (BTU) HEAT INPUT, AS AVERAGED OVER SIX HOURS OF THE FEDERAL ENVIRONMENTAL PROTECTION AGENCY'S REFERENCE METHOD FOR PARTICULATE TESTING, AND OPACITY OF TWENTY PERCENT, AS AVERAGED OVER EACH SEPARATE SIX­MINUTE PERIOD WITHIN AN HOUR, BEGINNING EACH HOUR ON THE HOUR; EXCEPT THAT, DURING PERIODS OF BUILDING A NEW FIRE, CLEANING OF FIRE BOXES, STARTUP, SOOT BLOWING, AND PROCESS MODIFICATION OR ADJUSTMENT OR OCCASIONAL CLEANING OF CONTROL EQUIPMENT, THE OWNER OF SAID UNIT SHALL NOT CAUSE OR ALLOW THE EMISSION OF AIR POLLUTANTS IN EXCESS OF THIRTY PERCENT OPACITY FOR A PERIOD OR PERIODS AGGREGATING MORE THAN SIX MINUTES IN ANY SIXTY CONSECUTIVE MINUTES.

(C)  Definition. FOR PURPOSES OF THIS SUBPARAGRAPH (II), THE TERM ACOVERED BOILER UNIT@ MEANS A COAL­FIRED BOILER UNIT OF AN INSTALLED CAPACITY OF FORTY MEGAWATTS OR GREATER THAT IS OPERATED TO GENERATE ELECTRIC ENERGY FOR TRANSMISSION FOR SALE, DIRECTLY OR INDIRECTLY, TO A PUBLIC UTILITY OR TO A CONSUMER OF ELECTRIC ENERGY.

(D)  Compilation of SO₂ inventory. ON OR BEFORE SEPTEMBER 1, 1997, THE AIR POLLUTION CONTROL DIVISION OF THE DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT SHALL COMPILE AN INVENTORY OF TOTAL EMISSIONS OF SULFUR DIOXIDE (SO₂) THAT WERE ACTUALLY EMITTED DURING CALENDAR YEAR 1995 FROM ALL COAL­FIRED UTILITY BOILERS THAT ARE OPERATED TO GENERATE ELECTRICITY, FOR TRANSMISSION FOR SALE, DIRECTLY OR INDIRECTLY, TO A PUBLIC UTILITY OR TO CONSUMERS OF ELECTRIC ENERGY. THE AIR POLLUTION CONTROL DIVISION SHALL THEN ADJUST SUCH INVENTORY TO REFLECT THE EMISSIONS LIMITATIONS REQUIRED BY SUB­SUBPARAGRAPHS (A) AND (B) OF THIS SUBPARAGRAPH (II), AND EMISSIONS REDUCTIONS THAT ARE REQUIRED TO BE MADE, AS OF JULY 1, 1997, BY A JUDICIALLY ENFORCEABLE DECREE, TO DETERMINE A TOTAL ADJUSTED INVENTORY.

(E)  THE AIR POLLUTION CONTROL DIVISION SHALL NOT ISSUE A CONSTRUCTION PERMIT TO ANY PERSON FOR THE CONSTRUCTION OF A FOSSIL­FUEL­FIRED BOILER THAT WILL BE USED TO GENERATE ELECTRIC ENERGY FOR TRANSMISSION FOR SALE, DIRECTLY OR INDIRECTLY, TO A PUBLIC UTILITY OR TO A CONSUMER OF ELECTRIC ENERGY UNLESS THE PERSON SEEKING SUCH A PERMIT DEMONSTRATES THAT IT WILL SIMULTANEOUSLY ENSURE THAT THE EMISSIONS FROM THE FACILITY TO BE CONSTRUCTED WILL NOT CAUSE THE TOTAL ADJUSTED INVENTORY OF SULFUR DIOXIDE TO BE EXCEEDED.

(F)  IF AN OWNER OF A FOSSIL­FUEL­FIRED BOILER THAT IS USED TO GENERATE ELECTRIC ENERGY FOR TRANSMISSION FOR SALE, DIRECTLY OR INDIRECTLY, TO A PUBLIC UTILITY OR TO A CONSUMER OF ELECTRIC ENERGY VOLUNTARILY REDUCES EMISSIONS OF SULFUR DIOXIDE BEYOND THE EMISSIONS LIMITATIONS REQUIRED BY APPLICABLE LAW, INCLUDING THE EMISSIONS LIMITATIONS PROVIDED IN THIS SECTION, SUCH OWNER MAY OFFER THOSE EMISSIONS REDUCTIONS FOR SALE OR EXCHANGE TO ANY WILLING PURCHASER AS AN OFFSET TO ANY EMISSIONS ANTICIPATED TO BE CREATED BY THE CONSTRUCTION OF A NEW FOSSIL­FUEL­FIRED BOILER THAT WILL BE USED TO GENERATE ELECTRIC ENERGY FOR TRANSMISSION FOR SALE, DIRECTLY OR INDIRECTLY, TO A PUBLIC UTILITY OR TO A CONSUMER OF ELECTRIC ENERGY; EXCEPT THAT SUCH SALES, EXCHANGES, OR SIMILAR TRANSACTIONS MAY OCCUR ONLY WITHIN REGIONAL AIRSHEDS, AS DEFINED BY THE AIR POLLUTION CONTROL DIVISION.

(o)  System benefits surcharge ­ definition. (I) (A)  EACH UTILITY OPERATING AN ELECTRICITY DISTRIBUTION SYSTEM SHALL DESIGN AND PROPOSE A NON­BYPASSABLE SURCHARGE TO BE APPLIED TO ITS BASE RATES FOR DISTRIBUTION SERVICES FOR THE PURPOSE OF COLLECTING REVENUES TO BE EXPENDED ON SYSTEM BENEFITS. SUCH RATES SHALL BE DESIGNED TO RECOVER REVENUES EQUAL TO ONE PERCENT OF THE UTILITY'S GROSS ELECTRIC REVENUES IN THE YEAR PRECEDING THE YEAR IN WHICH THE RATES ARE FILED. THE RATES SHALL BE DESIGNED ON THE BASIS OF KILOWATT­HOUR CONSUMPTION OR KILOWATT DEMAND OR A BLEND OF BOTH; EXCEPT THAT THE RATES SHALL BE DESIGNED TO RAISE REVENUES FROM CUSTOMERS IN A MANNER THAT CONFORMS TO THE ALLOCATION OF DISTRIBUTION SYSTEM COSTS AMONG CUSTOMER CLASSES THAT EXISTED IN 1996.

(B)  AS USED IN THIS PARAGRAPH (o), "SYSTEM BENEFITS" MEANS ENERGY EFFICIENCY, RENEWABLE ENERGY, LOW­INCOME, AND COLORADO­BASED ELECTRIC RESOURCE RESEARCH AND DEVELOPMENT PROGRAMS.

(II)  NO UTILITY SHALL DESIGN AND PROPOSE A SURCHARGE PURSUANT TO SUBPARAGRAPH (I) OF THIS PARAGRAPH (o) UNLESS AND UNTIL A SYSTEM BENEFIT PROGRAM SPECIFYING THE TYPE OF SYSTEM BENEFIT, AMOUNTS OF REVENUES TO BE COLLECTED THROUGH THE SURCHARGE, AND THE MANNER OF EXPENDING SUCH REVENUES ON SYSTEM BENEFITS IS SPECIFICALLY PRESCRIBED BY STATUTE ENACTED AFTER 1996.

(III)  WITHIN SIX MONTHS AFTER THE EFFECTIVE DATE OF A STATUTE SPECIFIED IN SUBPARAGRAPH (II) OF THIS PARAGRAPH (o):

(A)  UTILITIES FOR WHICH THE COMMISSION HAS AUTHORITY TO PRESCRIBE RETAIL RATES SHALL FILE THEIR PROPOSED SYSTEM BENEFITS SURCHARGES WITH THE COMMISSION, WHICH SHALL INVOKE ITS SUSPENSION AND INVESTIGATION POWERS UNDER SECTION 40­6­111 TO EXAMINE THE PROPOSED SURCHARGE AND, AFTER NOTICE AND THE OPPORTUNITY FOR A HEARING, SHALL APPROVE THE PROPOSED SURCHARGE OR AN ALTERNATIVE SURCHARGE THAT COMPLIES WITH SUBPARAGRAPH (I) OF THIS PARAGRAPH (o); AND

(B)  UTILITIES FOR WHICH THE COMMISSION DOES NOT HAVE AUTHORITY TO PRESCRIBE RETAIL RATES SHALL PROPOSE AND ADOPT SYSTEM BENEFITS SURCHARGES THAT COMPLY WITH SUBPARAGRAPH (I) OF THIS PARAGRAPH (o) IN ACCORDANCE WITH THE PROCEDURES THAT GOVERN THE FILING AND APPROVAL OF THEIR RETAIL ELECTRIC RATES.

(p)  Universal service. THE SUPPLY AND DELIVERY OF ELECTRICITY SHALL BE ASSURED TO ALL COLORADO RETAIL ELECTRIC END USERS IN THE RESTRUCTURED MARKET. THIS MAY INCLUDE PROVISION FOR A SUPPLIER OF LAST RESORT.

(q)  End of monopoly service territories for retail end user sales. EXCEPT AS NECESSARY TO ACCOMMODATE THE REQUIREMENT OF UNIVERSAL SERVICE, THE DOCTRINE OF EXCLUSIVE MONOPOLY SERVICE TERRITORIES FOR ENGAGING IN THE SUPPLY FUNCTION, INCLUDING THE PROVISION OF METERING AND BILLING SERVICES, SHALL NO LONGER BE RECOGNIZED IN COLORADO.

(r)  Information to customers. EVERY END USER SHALL HAVE TIMELY ACCESS TO MEANINGFUL INFORMATION CONCERNING THE SUPPLY CHARGES OF ALL ENTITIES ENGAGED IN THE SUPPLY FUNCTION THAT ARE READY, WILLING, AND ABLE TO SELL TO THE END USER OVER THE END USER'S DELIVERY UTILITY.

(s)  Eminent domain. THE RIGHT OF EMINENT DOMAIN SHALL NOT BE USED TO DENY ACCESS OR INTERCONNECTION TO FACILITIES USED IN THE DELIVERY FUNCTION, TO RESTRICT CONSTRUCTION OF NEW OR EXPANDED FACILITIES TO BE USED IN THE DELIVERY FUNCTION, OR OTHERWISE TO LIMIT CUSTOMER CHOICE OR COMPETITION IN THE SUPPLY FUNCTION.

40­18­104.  Process and schedule. (1)  Full implementation. FULL IMPLEMENTATION OF THE RESTRUCTURED ELECTRIC RETAIL MARKET IN COLORADO BY UTILITIES THAT DEVELOP PLANS IN ACCORDANCE WITH SUBSECTION (2) (a) OF THIS SECTION SHALL BE ACCOMPLISHED WITHIN THREE YEARS AFTER JULY 1, 1997.

(2)  Development of plans. (a)  EVERY COLORADO ELECTRIC UTILITY THAT IS OR VOLUNTARILY ELECTS TO BECOME SUBJECT TO THIS ARTICLE SHALL FILE AND IMPLEMENT RESTRUCTURING PLANS CONSISTENT WITH THE PRINCIPLES IN SECTION 40­18­103 SUBJECT TO CONTINUING OVERSIGHT, IN ACCORDANCE WITH SUBSECTION (3) OF THIS SECTION, BY ITS GOVERNING BODY.

(b)  A UTILITY NOT SUBJECT TO THIS ARTICLE MAY AT ANY TIME VOLUNTARILY ELECT TO BECOME SUBJECT TO THIS ARTICLE BY SUBMITTING TO THE COMMISSION THE FOLLOWING CERTIFICATES FROM ITS GOVERNING BODY:

(I)  A CERTIFICATE STATING THAT THE UTILITY HAS ELECTED VOLUNTARILY TO BECOME SUBJECT TO THE PROVISIONS OF THIS ARTICLE; AND

(II)  WITHIN THREE YEARS AND THREE MONTHS AFTER FILING THE FIRST CERTIFICATE UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH (b), A CERTIFICATE STATING THAT THE UTILITY HAS IMPLEMENTED A RESTRUCTURING PLAN IN CONFORMITY WITH THE PRINCIPLES IN SECTION 40­18­103, ACCORDING TO A PROCESS SUBSTANTIALLY SIMILAR TO THE PROCESS IN THIS SUBSECTION (2) AND SUBSECTION (3) OF THIS SECTION, TOGETHER WITH CONFORMED COPIES OF THE PLAN AND THE GOVERNING BODY'S FINAL FINDINGS UNDER SUBSECTION (3) (a) OF THIS SECTION.

(3)  Nature of oversight. (a)  THE COMMISSION OR OTHER GOVERNING BODY WITH WHICH A UTILITY IS REQUIRED TO FILE A RESTRUCTURING PLAN SHALL CONDUCT A PUBLIC HEARING WITH RESPECT TO SUCH PLAN.

(b)  AT THE CONCLUSION OF SUCH HEARING, THE GOVERNING BODY SHALL ENTER DETAILED WRITTEN FINDINGS OF FACT AND LAW THAT THE PLAN EITHER SATISFIES OR FAILS TO SATISFY:

(I)  EACH INDIVIDUAL PRINCIPLE SET FORTH IN SECTION 40­18­103 (1); AND

(II)  THE PRINCIPLES SET FORTH IN SECTION 40­18­103 (1), CONSIDERED AS A WHOLE.

(c)  IF THE PLAN FAILS TO SATISFY THE PRINCIPLES OF SECTION 40­18­103 (1), INDIVIDUALLY AND COLLECTIVELY AS CONTEMPLATED BY PARAGRAPH (b) OF THIS SUBSECTION (3), THE GOVERNING BODY SHALL ORDER THE UTILITY TO RESUBMIT THE PLAN WITH MODIFICATIONS. NOTHING IN THIS PARAGRAPH (c) SHALL LIMIT THE RIGHT TO RELIEF UNDER SECTION 40­18­105 OF AN AFFECTED PERSON, INCLUDING AN OVERSIGHT BODY, FOR THE FAILURE OF A UTILITY TO SUBMIT AN ADEQUATE PLAN.

(4)  Schedule. THE FILING OF RESTRUCTURING PROPOSALS, HEARINGS WITH RESPECT TO THE SAME, AND OTHER ACTION TO ASSURE IMPLEMENTATION OF THE TRANSITION TO A COMPETITIVE RETAIL ELECTRIC MARKET SHALL PROCEED ACCORDING TO THE FOLLOWING SCHEDULE:

(a)  FILINGS OF TRANSITION AND RESTRUCTURING PLANS WITHIN SIX MONTHS AFTER JULY 1, 1997, FOR ALL COLORADO ELECTRIC UTILITIES THAT ARE EITHER SUBJECT TO THIS ARTICLE OR THAT FILE, ON OR BEFORE SEPTEMBER 1, 1997, A CERTIFICATE UNDER SUBPARAGRAPH (I) OF PARAGRAPH (b) OF SUBSECTION (2) OF THIS SECTION;

(b)  COMPLETION OF HEARINGS ON PLANS, INCLUDING RESUBMITTED PLANS, IF ANY, WITHIN TWENTY­FOUR MONTHS AFTER JULY 1, 1997;

(c)  IMPLEMENTATION OF TRANSITION PLANS PRIOR TO FULL RESTRUCTURING WITHIN TWENTY­FIVE MONTHS AFTER JULY 1, 1997; AND

(d)  FULL IMPLEMENTATION OF RESTRUCTURING PLANS THAT SATISFY THE PRINCIPLES SET FORTH IN SECTION 40­18­103 (1), IN ACCORDANCE WITH SUBSECTION (3) OF THIS SECTION, NO LATER THAN JANUARY 1, 2000.

(5)  Reports. THE COMMISSION SHALL REPORT TO THE GENERAL ASSEMBLY SEMIANNUALLY, BEGINNING JANUARY 1, 1997, CONCERNING THE IMPLEMENTATION OF THIS ARTICLE.

40­18­105.  Enforcement. (1)  Development and implementation of plans. AN AFFECTED PERSON MAY BRING A SUIT FOR INJUNCTION, MANDAMUS, JUDICIAL REVIEW, OR OTHER RELIEF AS APPROPRIATE, IN A COLORADO COURT OF COMPETENT JURISDICTION, FOR THE FAILURE OR REFUSAL OF A UTILITY, OR OF AN OVERSIGHT BODY, TO FULFILL ITS OR THEIR OBLIGATIONS UNDER SECTION 40­18­104.

(2)  Adherence to principles. IT IS THE GENERAL ASSEMBLY'S INTENTION THAT THIS ARTICLE BE JUDICIALLY CONSTRUED AS STATE ACTION PROMOTING COMPETITION, NOT MONOPOLY, AND THAT VIOLATIONS BE SUBJECT TO ENFORCEMENT UNDER THE ANTITRUST LAWS OF COLORADO AND OF THE UNITED STATES. NOTHING IN THIS SUBSECTION (2) IS INTENDED TO LIMIT THE AVAILABILITY OF THE REMEDIES IN SUBSECTION (1) OF THIS SECTION OR ANY OTHER APPROPRIATE LEGAL REMEDY.

SECTION 2.  Effective date. This act shall take effect July 1, 1997.

SECTION 3.  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.