First Regular Session

Sixty-first General Assembly

LLS NO. 97­0450.01 DHG SENATE BILL 97­163

STATE OF COLORADO

BY SENATOR Feeley

AGRICULTURE, NATURAL

RESOURCES & ENERGY

A BILL FOR AN ACT

CONCERNING MEASURES TO ENSURE THAT A TRANSITION TO A COMPETITIVE MARKET FOR ELECTRIC ENERGY DOES NOT RESULT IN FORFEITURE OF THE BENEFITS REALIZED UNDER THE PRIOR SYSTEM OF REGULATED MONOPOLY, AND, IN CONNECTION THEREWITH, ENCOURAGING THE IMPLEMENTATION OF COMPETITION IN A MANNER THAT IS EQUITABLE AND ENHANCES COLORADO'S NATURAL ENVIRONMENT.

Bill Summary

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

Declares that retail electricity competition should be implemented in a way that benefits all classes of customers, preserves and enhances environmental values, promotes the use of renewable and energy­efficient resources, and avoids undue concentrations of market power.

Requires that utilities file and charge their customers non­bypassable rates, amounting to 4% of gross electric revenues, to pay for the cost of retaining existing benefits from the system of regulated monopoly during the transition to full retail competition. Creates a 15­member board, appointed by the governor, to recommend appropriate expenditures from the fund created to receive such 4% charge.

Requires that certain minimum percentages of electricity sold to Colorado users be from renewable sources, 1 1/2% in the year 2000 and increasing to 16% in the year 2015. 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.

Gives consumers the right to be informed of the sources from which the electric energy they consume is derived, and requires utilities to disclose how much air pollution can be attributed to their consumption. Directs that consumers be allowed to remain as customers of the utility that was supplying them with electricity as of the date on which competition in the retail market becomes a reality.

Encourages utilities to unbundle generation and transmission facilities. Prohibits cost­shifting among classes of customers and allows recovery of stranded costs only from customers exiting the existing system. Commissions studies by the public utilities commission, the state treasurer, and the attorney general of the advisability of amending state tax policy, creating incentives for utilities to participate in independent system operator arrangements or power pools, and allowing or encouraging the aggregation of small customers into purchasing cooperatives.

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

SECTION 1.  Article 4 of title 40, Colorado Revised Statutes, 1993 Repl. Vol., as amended, is amended BY THE ADDITION OF A NEW PART to read:

PART 2

DEREGULATION OF RETAIL ELECTRIC SUPPLY

40­4­201.  Legislative declaration ­ purpose of article. (1)  THE GENERAL ASSEMBLY FINDS, DETERMINES, AND DECLARES THAT:

(a)  WHILE RETAIL ELECTRICITY COMPETITION HAS THE POTENTIAL TO LOWER THE COSTS OF ELECTRICITY OVER TIME, ESPECIALLY FOR LARGE ELECTRICITY USERS, IF COMPETITION IS NOT IMPLEMENTED WITH DUE CARE, IT HAS THE POTENTIAL TO HARM MANY CONSUMERS, IMPEDE THE SUSTAINED ORDERLY DEVELOPMENT OF ENERGY EFFICIENCY AND RENEWABLE ENERGY RESOURCES TO MEET COLORADO'S ELECTRIC LOADS, AND DEGRADE THE STATE'S ENVIRONMENT;

(b)  THE BENEFITS OF RETAIL ELECTRICITY COMPETITION IN COLORADO SHOULD FLOW TO ALL CLASSES OF ELECTRICITY CUSTOMERS; AND

(c)  RETAIL ELECTRICITY COMPETITION SHOULD BE IMPLEMENTED IN COLORADO IN A WAY THAT:

(I)  PROMOTES THE DEVELOPMENT OF COLORADO'S COPIOUS ENERGY EFFICIENCY AND RENEWABLE ENERGY RESOURCES;

(II)  ENHANCES COLORADO'S ENVIRONMENTAL QUALITY;

(III)  AVOIDS THE DEVELOPMENT OF ANY UNDUE ADVANTAGE BY ANY POWER SUPPLIER ATTRIBUTABLE TO MARKET POWER; AND

(IV)  PROVIDES INFORMATION TO CONSUMERS REGARDING COMPETING POWER SUPPLIERS SO THAT CONSUMERS MAY MAKE INFORMED CHOICES.

40­4­202.  Definitions. AS USED IN THIS PART 2, UNLESS THE CONTEXT OTHERWISE REQUIRES:

(1)  "BUNDLED SERVICE" MEANS ELECTRIC SERVICE PROVIDED AS A PACKAGE TO THE CONSUMER INCLUDING ALL GENERATION, TRANSMISSION, DISTRIBUTION, ANCILLARY SERVICES, AND OTHER SERVICES NECESSARY TO DELIVER AND MEASURE USEFUL ELECTRIC ENERGY AND POWER TO CONSUMERS.

(2)  "EXISTING ELECTRIC SERVICE PROVIDER" MEANS THE MONOPOLY UTILITY THAT, AS OF JULY 1, 1997, WAS LAWFULLY SERVING AN EXISTING RETAIL FRANCHISE SERVICE TERRITORY IN COLORADO. THE TERM ALSO INCLUDES A SUCCESSOR ENTITY THAT OWNS THE DISTRIBUTION ASSETS OF ANY SUCH UTILITY.

(3)  "RENEWABLE ENERGY" MEANS ELECTRICAL ENERGY GENERATED BY MEANS OF A LOW­ OR ZERO­EMISSIONS GENERATION TECHNOLOGY THAT HAS SUBSTANTIAL LONG­TERM, COST­EFFECTIVE PRODUCTION POTENTIAL. THE TERM INCLUDES, WITHOUT LIMITATION, SOLAR PHOTOVOLTAIC, SOLAR THERMAL, AND WIND ENERGY TECHNOLOGIES; GEOTHERMAL SOURCES; FUEL CELLS; AND TECHNOLOGIES BASED ON LANDFILL GAS AND BIOMASS SOURCES SUCH AS WOOD, AGRICULTURAL, AND FOOD WASTES.

(4)  "STANDARD OFFER" MEANS BUNDLED SERVICE OFFERED TO ALL CONSUMERS IN A DESIGNATED AREA AT REGULATED RATES.

(5)  "STRANDED COSTS" MEANS THE NET OF A UTILITY'S ABOVE­MARKET AND BELOW­MARKET RESOURCE COSTS AND INVESTMENTS PRUDENTLY OR INVOLUNTARILY CONTRACTED FOR AS OF APRIL 24, 1996, 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; AND

(b)  AMOUNTS BY WHICH STRANDED COSTS CAN BE OR COULD HAVE BEEN MITIGATED BEFORE IMPLEMENTATION OF FULL RESTRUCTURING THROUGH THE EXERCISE OF PRUDENT MANAGERIAL DISCRETION.

(6)  "SYSTEM BENEFITS" MEANS ENERGY EFFICIENCY, RENEWABLE ENERGY, LOW­INCOME, AND COLORADO­BASED ELECTRIC RESOURCE RESEARCH AND DEVELOPMENT PROGRAMS.

40­4­203.  System benefits rates. (1)  EACH UTILITY SHALL IMPLEMENT A RATE DESIGNED TO COVER THE COSTS OF SYSTEM BENEFITS, AND THE REVENUES COLLECTED PURSUANT TO SUCH RATE SHALL BE SPENT ACCORDING TO THE PROVISIONS OF THIS SECTION.

(2)  Requirement to establish rates and related procedures. (a)  ON OR BEFORE JANUARY 1, 1998, AND ON OR BEFORE JANUARY 1 OF EACH YEAR THEREAFTER THROUGH THE YEAR 2005, EACH UTILITY OPERATING AN ELECTRICITY DISTRIBUTION SYSTEM SHALL FILE NON­BYPASSABLE RATES TO RECOVER THE COSTS OF SYSTEM BENEFITS FROM ALL ELECTRICITY CUSTOMERS LOCATED IN THE UTILITY'S SERVICE AREA. SUCH RATES SHALL BE DESIGNED TO RECOVER REVENUES EQUAL TO FOUR 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 TO COLLECT SYSTEM BENEFITS REVENUES FROM CUSTOMERS 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 IS CONSISTENT WITH THE ALLOCATION OF UTILITY COSTS AMONG CUSTOMER CLASSES THAT EXISTED IN 1996.

(b)  FOR UTILITIES WITH RESPECT TO WHICH THE COMMISSION HAS THE AUTHORITY TO PRESCRIBE RETAIL ELECTRIC RATES, THE COMMISSION SHALL INVOKE ITS SUSPENSION AND INVESTIGATION POWERS UNDER SECTION 40­6­111 TO EXAMINE THE RATES FILED PURSUANT TO THIS SECTION AND, AFTER OPPORTUNITY FOR HEARING, SHALL APPROVE SUCH RATES WITHIN NINETY DAYS AFTER THEIR FILING UNLESS THE COMMISSION FINDS THAT EITHER:

(I)  THE RATES ARE DESIGNED ON SOME BASIS OTHER THAN THOSE SPECIFIED IN PARAGRAPH (a) OF THIS SUBSECTION (2); OR

(II)  IT IS UNLIKELY THAT THE RATES WILL RAISE THE LEVEL OF REVENUES SPECIFIED THEREIN.

(c)  THE COMMISSION MAY PRESCRIBE RATES THAT WILL COMPLY WITH THIS SUBSECTION (2) IF IT MAKES EITHER OR BOTH OF THE FINDINGS SPECIFIED IN PARAGRAPH (b) OF THIS SUBSECTION (2).

(d)  UTILITIES WITH RESPECT TO WHICH THE COMMISSION DOES NOT HAVE THE AUTHORITY TO PRESCRIBE RETAIL ELECTRICITY RATES SHALL FILE AND GAIN APPROVAL TO IMPLEMENT SYSTEM BENEFITS RATES ACCORDING TO THE PROCEDURES WHICH GOVERN THE FILING AND APPROVAL OF THEIR RETAIL ELECTRIC RATES.

(e)  SYSTEM BENEFITS RATES ESTABLISHED PURSUANT TO THIS SECTION SHALL TAKE EFFECT NO LATER THAN JULY 1, 1998.

(f)  REVENUES COLLECTED THROUGH SYSTEM BENEFITS RATES SHALL BE REMITTED TO THE STATE TREASURER, WHO SHALL CREDIT THE SAME TO THE ELECTRIC UTILITY SYSTEM BENEFITS FUND, WHICH FUND IS HEREBY CREATED IN THE STATE TREASURY. THE FUND SHALL BE MAINTAINED IN A LOW­RISK, INTEREST­BEARING ACCOUNT OR ACCOUNTS UNTIL ANY SUCH REVENUES ARE WITHDRAWN ACCORDING TO THE PROVISIONS OF SUBSECTION (3) OF THIS SECTION. INTEREST EARNED ON MONEYS IN THE FUND SHALL BE RETAINED IN THE FUND AND SHALL NOT REVERT TO THE GENERAL FUND OR ANY OTHER FUND UNTIL JULY 1, 2007, AT WHICH TIME ANY UNEXPENDED AND UNENCUMBERED MONEYS IN THE FUND SHALL REVERT TO THE GENERAL FUND.

(3)  Means by which system benefits rate revenues may be spent. (a)  ON OR BEFORE JANUARY 1, 1998, THE GOVERNOR SHALL APPOINT A BOARD, CONSISTING OF FIFTEEN MEMBERS, TO DEVELOP POLICIES FOR THE EXPENDITURE OF REVENUES COLLECTED THROUGH SYSTEM BENEFITS RATES REQUIRED BY THIS SECTION. BOARD MEMBERS SHALL BE CHOSEN TO BE BROADLY REPRESENTATIVE OF THE INTERESTS AFFECTED BY THE IMPLEMENTATION OF SYSTEM BENEFITS RATES IN COLORADO AS WELL AS BY THE EXPENDITURE OF MONEYS IN THE FUND. AT A MINIMUM, UTILITY, LOW­INCOME, ENERGY EFFICIENCY, RENEWABLE ENERGY, UTILITY CUSTOMER, ENVIRONMENTAL, FOSSIL­FUEL, AND RESEARCH AND DEVELOPMENT INTERESTS SHALL BE REPRESENTED ON THE BOARD. THE DIRECTOR OF THE OFFICE OF CONSUMER COUNSEL SHALL BE AN EX OFFICIO MEMBER OF THE BOARD. BOARD MEMBERS SHALL SERVE WITHOUT PAY.

(b)  CONSISTENT WITH COLORADO LAW, THE BOARD MAY DELEGATE SOME OR ALL OF ITS FUNCTIONS TO THE COMMISSION; EXCEPT THAT THE BOARD SHALL RETAIN RESPONSIBILITY FOR THE FINAL PLAN AND AMENDMENTS THERETO REFERENCED IN PARAGRAPH (d) OF THIS SUBSECTION (3).

(c)  THE BOARD SHALL HAVE THE AUTHORITY TO HIRE EMPLOYEES, ENTER INTO CONTRACTS, AND SPEND REVENUES RAISED BY THE IMPLEMENTATION OF SYSTEM BENEFITS RATES; EXCEPT THAT THE MAXIMUM AMOUNT OF MONEY THAT THE BOARD MAY SPEND ON EMPLOYEE COMPENSATION AND OTHER EXPENSES IN ANY CALENDAR YEAR, NOT INCLUDING THE EXPENDITURE OF REVENUES ON SYSTEM BENEFITS, IS THREE MILLION DOLLARS.

(d)  ON OR BEFORE JULY 1, 1999, THE BOARD, WITH THE ASSISTANCE OF THE COMMISSION, SHALL PREPARE A FINAL PLAN TO SERVE AS THE BASIS OF THE EXPENDITURE OF REVENUES COLLECTED BY SYSTEM BENEFITS RATES REQUIRED BY THIS SECTION. IN DEVELOPING SUCH A PLAN, THE BOARD SHALL BE GUIDED BY THE FOLLOWING POLICIES AND PROCEDURES:

(I)  REVENUES AUTHORIZED TO BE SPENT BY THE BOARD SHALL BE USED TO PROMOTE ENERGY EFFICIENCY, RENEWABLE ENERGY, COLORADO­BASED RESEARCH AND DEVELOPMENT, AND TO PROTECT LOW­INCOME ELECTRICITY CONSUMERS IN WAYS THAT ARE LIKELY TO AVOID DUPLICATION OF SERVICES OTHERWISE PROVIDED BY THE ELECTRIC INDUSTRY AND ASSOCIATED MARKETS.

(II)  REVENUES AUTHORIZED TO BE SPENT BY THE BOARD ON RENEWABLE ENERGY SHALL BE SPENT FOR THE PURPOSE OF EXPEDITING THE COMMERCIALIZATION OF TECHNOLOGIES THAT SHOW LONG­TERM PROMISE IN COLORADO BUT WHICH ARE NOT READY FOR COMMERCIAL USE IN THIS STATE.

(III)  REVENUES AUTHORIZED TO BE SPENT BY THE BOARD ON LOW­INCOME ENERGY SERVICES MAY BE SPENT ON LOW­INCOME ENERGY EFFICIENCY AND WEATHERIZATION SERVICES AS WELL AS ON OTHER MEASURES DESIGNED TO HELP LOW­INCOME CUSTOMERS AFFORD THE COST OF ELECTRICITY SERVICES.

(IV)  THE BOARD SHALL CONSULT WITH THE PUBLIC BEFORE ADOPTING ITS PLAN FOR THE EXPENDITURE OF SYSTEM BENEFITS RATE REVENUES. THE BOARD SHALL HOLD AT LEAST ONE PUBLIC HEARING ON ITS PLAN PRIOR TO ITS ADOPTION.

(V)  THE BOARD SHALL PROVIDE BENEFITS TO THE CITIZENS OF COLORADO THROUGH THE EXPENDITURE OF REVENUES THAT ARE EQUITABLE IN LIGHT OF THE GEOGRAPHICAL SOURCE OF THE REVENUES COLLECTED.

(VI)  ALL REVENUES AUTHORIZED TO BE SPENT BY THE BOARD ON SYSTEM BENEFITS SHALL, IF FEASIBLE, BE SPENT ONLY AFTER COMPETITIVE BIDDING.

(e)  THE BOARD SHALL REVIEW THE PLAN DEVELOPED PURSUANT TO THIS SECTION ON AN ANNUAL BASIS AND MAKE CHANGES TO IT AS WARRANTED.

(f)  ON OR BEFORE JULY 1, 1999, THE BOARD, WITH THE ASSISTANCE OF THE COMMISSION, SHALL ADOPT RULES TO GOVERN THE PROCEDURES AND METHODS BY WHICH REVENUES ARE EXPENDED BY THE BOARD.

(g)  THE BOARD SHALL INFORM THE TREASURER OF THE ENTITIES CHOSEN BY THE BOARD TO RECEIVE REVENUES FROM THE SPECIAL FUND, AND THE TREASURER THEREAFTER SHALL RELEASE SUCH REVENUES TO SUCH ENTITIES ACCORDING TO THE DIRECTIVES OF THE BOARD. THE BOARD'S SELECTION OF ANY SUCH ENTITY SHALL BE BINDING AND SHALL BE RESCINDED ONLY IF THE RECIPIENT FAILS TO PERFORM.

(h)  EXPENSES OF THE BOARD, AND THOSE OF THE COMMISSION INCURRED AS A RESULT OF DELEGATION AUTHORIZED IN THIS SECTION, SHALL BE FUNDED OUT OF REVENUES COLLECTED THROUGH SYSTEM BENEFITS RATES.

(4)  THIS SECTION IS REPEALED, EFFECTIVE JULY 1, 2007.

40­4­204.  Minimum renewable energy requirement. (1)  THE PORTFOLIO OF POWER SUPPLY RESOURCES OF EACH POWER SUPPLIER SELLING ELECTRICITY FOR USE IN COLORADO SHALL INCLUDE A MINIMUM AMOUNT OF RENEWABLE ENERGY GENERATED FROM RENEWABLE ENERGY GENERATION FACILITIES CONSTRUCTED AFTER THE DATE OF ENACTMENT OF THIS ARTICLE WITHIN COLORADO OR WITHIN THE GEOGRAPHICAL REGION COMPRISED BY WESTERN INTERCONNECTED REGION, ACCORDING TO THE PROVISIONS OF THIS SECTION.

(2)  Required annual percentage. THE MINIMUM AMOUNT OF RENEWABLE ENERGY THAT SHALL BE CONTAINED IN EACH POWER SUPPLIER'S PORTFOLIO, CALCULATED ON AN ENERGY BASIS ACCORDING TO THE NUMBER OF MEGAWATT­HOURS OF POWER SOLD, IS:

(a)  BY JANUARY 1, 2000: ONE AND ONE­HALF PERCENT;

(b)  BY JANUARY 1, 2005: FOUR PERCENT;

(c)  BY JANUARY 1, 2010: EIGHT PERCENT; AND

(d)  BY JANUARY 1, 2015: SIXTEEN PERCENT.

(3)  THE COMMISSION MAY ALTER THE MINIMUM PERCENTAGES ESTABLISHED IN SUBSECTION (2) OF THIS SECTION IN THE YEARS 2005, 2010, AND 2015; EXCEPT THAT:

(a)  THE COMMISSION MAY NOT ALTER THE MINIMUM PERCENTAGE:

(I)  APPLICABLE TO 2005 UNTIL JANUARY 1, 2002;

(II)  APPLICABLE TO 2010 UNTIL JANUARY 1, 2007; OR

(III)  APPLICABLE TO 2015 UNTIL JANUARY 1, 2012;

(b)  THE COMMISSION MAY ALTER THE MINIMUM PERCENTAGES ONLY IF IT FINDS THAT THE PERCENTAGES ARE EITHER TOO LOW OR TOO HIGH IN LIGHT OF THE COSTS AND BENEFITS OF RENEWABLE ENERGY TECHNOLOGIES AND ALTERNATIVE ENERGY EFFICIENCY OR SUPPLY TECHNOLOGIES; AND

(c)  THE COMMISSION MAY ALTER THE MINIMUM TECHNOLOGIES ONLY AFTER AN EVIDENTIARY HEARING.

(4)  NOTHING IN THIS SECTION SHALL BE CONSTRUED TO REQUIRE A SELLER OF ELECTRICITY IN COLORADO TO CONSTRUCT OR OWN RENEWABLE ENERGY GENERATION FACILITIES. THE REQUIREMENTS SET FORTH IN SUBSECTION (2) OF THIS SECTION MAY BE MET THROUGH THE ACQUISITION OF COLORADO OR FEDERAL RENEWABLE ENERGY CREDITS, ISSUED PURSUANT TO FEDERAL LAW, FROM OTHERS WHO DO CONSTRUCT OR OWN, OR OWN THE RIGHT TO SELL THE OUTPUT OF, RENEWABLE ENERGY GENERATION FACILITIES THAT ARE CONSTRUCTED AFTER JULY 1, 1997, EITHER WITHIN COLORADO OR WITHIN THE WESTERN INTERCONNECTED REGION. SUCH COLORADO CREDITS SHALL BE DESIGNED TO BE FREELY TRADEABLE AS WELL AS TO ASSURE THAT THE POWER SUPPLY PORTFOLIO REQUIREMENTS OF THIS SECTION ARE MET.

(5)  EACH SELLER OF ELECTRICITY IN COLORADO SHALL FILE ANNUALLY WITH THE COMMISSION A CERTIFICATION, WITH SUPPORTING AFFIDAVITS, THAT ITS POWER SUPPLY PORTFOLIO MEETS THE REQUIREMENTS OF THIS SECTION. THE COMMISSION SHALL REVIEW THE FILED CERTIFICATIONS AND APPROVE THEM, AFTER OPPORTUNITY FOR HEARING, IF THE COMMISSION IS SATISFIED THAT THEY ARE ACCURATE.

(6)  IF A SELLER OF ELECTRICITY FAILS TO MEET THIS MINIMUM REQUIREMENT, THE COMMISSION MAY IMPOSE A PENALTY ON THAT SELLER OF UP TO THIRTY CENTS PER KILOWATT­HOUR.

(7)  ON OR BEFORE JULY 1, 1998, THE COMMISSION SHALL ADOPT RULES TO IMPLEMENT THIS SECTION.

(8)  THE REQUIREMENTS OF THIS SECTION SHALL DETERMINE THE PERCENTAGE OF THE POWER SUPPLY PORTFOLIO OF EACH ELECTRICITY SELLER IN COLORADO THAT MUST COMPRISE RENEWABLE ENERGY GENERATION RESOURCES. IF A FEDERAL OR REGIONAL RENEWABLE ENERGY PORTFOLIO STANDARD IS IMPLEMENTED, ELECTRICITY SELLERS IN COLORADO MAY APPLY ACTIONS TAKEN TO COMPLY WITH SUCH OTHER STANDARDS TOWARDS MEETING THE REQUIREMENTS OF THIS SECTION.

40­4­205.  Protection and improvement of air quality ­ covered boiler units ­ definition ­ inventory of current emissions. (1)  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.

(2)  Particulates and opacity controls. UPON THE SAME DATE AS PROVIDED IN SUBSECTION (1) OF THIS SECTION, 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.

(3)  Definition. FOR PURPOSES OF THIS SECTION, 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.

(4)  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 SUBSECTIONS (1) AND (2) OF THIS SECTION, 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.

(5)  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.

(6)  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.

40­4­206.  Consumer information. (1)  Disclosure requirement. ALL SELLERS OF ELECTRICITY IN COLORADO SHALL PROVIDE THE FOLLOWING INFORMATION TO THEIR COLORADO CUSTOMERS:

(a)  THE TYPE OF FUEL USED TO GENERATE THE ENERGY THAT THEY SELL TO THEIR CUSTOMERS, INCLUDING AN ESTIMATE OF THE PERCENTAGE OF THE TOTAL ENERGY PROVIDED TO EACH CUSTOMER GENERATED BY EACH SUCH FUEL; AND

(b)  THE EMISSIONS OF SULPHUR DIOXIDE, NITROGEN DIOXIDE, CARBON DIOXIDE, PM­10, PM­2.5, VOLATILE ORGANIC COMPOUNDS, AND TOXIC SUBSTANCES, INCLUDING MERCURY, ATTRIBUTABLE TO THE ELECTRICITY WHICH THE SELLER HAS SOLD TO EACH CUSTOMER.

(2)  INFORMATION REQUIRED TO BE DISCLOSED TO CUSTOMERS PURSUANT TO THIS SECTION SHALL BE MADE AVAILABLE TO EACH CUSTOMER IN A MANNER THAT WILL PERMIT EACH SUCH CUSTOMER TO KNOW, IN EACH BILLING PERIOD, THE CONTRIBUTION OF EACH FUEL TO THE GENERATION OF ENERGY WHICH SUCH CUSTOMER HAS CONSUMED AS WELL AS THE EMISSIONS OF SUBSTANCES REFERENCED IN PARAGRAPH (b) OF SUBSECTION (1) OF THIS SECTION THAT ARE ATTRIBUTABLE TO THAT CUSTOMER'S CONSUMPTION OF ELECTRICITY.

40­4­207.  Consumer protection. (1)  RETAIL ELECTRICITY COMPETITION IN COLORADO SHALL BE IMPLEMENTED IN SUCH A MANNER AS TO MEET THE FOLLOWING OBJECTIVES:

(a)  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;

(b)  EACH ELECTRIC CUSTOMER SHALL HAVE ACCESS TO AN ELECTRICITY SUPPLIER OF LAST RESORT; AND

(c)  THE INTRODUCTION OF RETAIL ELECTRICITY COMPETITION SHALL NOT RESULT IN THE SHIFTING OF ANY COSTS AMONG CUSTOMER CLASSES.

(2)  UNTIL THE COMMISSION, FOR UTILITIES WITH RESPECT TO WHICH IT HAS RATE REGULATORY AUTHORITY, DETERMINES THAT COMPETITION HAS BEEN SUBSTANTIALLY IMPLEMENTED FOR A PARTICULAR CLASS OF CONSUMERS SO THAT ALL CONSUMERS IN THAT CLASS HAVE AN OPPORTUNITY TO FULLY PARTICIPATE IN THE COMPETITIVE MARKET, EACH OF THE EXISTING SUPPLIERS OR THEIR SUCCESSOR ENTITIES THAT OWN THE DISTRIBUTION ASSETS SHALL MAKE AVAILABLE TO ALL CONSUMERS IN THAT CLASS IN ITS SERVICE AREA STANDARD OFFER BUNDLED SERVICE AT REGULATED RATES. UTILITIES WITH RESPECT TO WHICH THE COMMISSION HAS NO RATE REGULATORY AUTHORITY SHALL MAKE SUCH DETERMINATION AND MAKE SUCH STANDARD OFFERS ON THEIR OWN. THE FOLLOWING PROVISIONS SHALL GOVERN THE PROVISION OF STANDARD OFFER SERVICE:

(a)  STANDARD OFFER SERVICE SHALL REMAIN AVAILABLE FOR RESIDENTIAL AND OTHER SMALL CUSTOMERS ON ALL UTILITY SYSTEMS AT LEAST THROUGH DECEMBER 31, 2002.

(b)  AFTER DECEMBER 31, 2002, AN EXISTING SUPPLIER WHOSE RATES ARE REGULATED BY THE COMMISSION MAY REQUEST THAT THE COMMISSION DETERMINE THAT COMPETITION HAS BEEN SUBSTANTIALLY IMPLEMENTED TO ALLOW DISCONTINUATION OF STANDARD OFFER SERVICE AND SHALL PROVIDE SUFFICIENT DOCUMENTATION TO SUPPORT ITS REQUEST. UTILITIES WITH RESPECT TO WHICH THE COMMISSION HAS NO RATE REGULATORY AUTHORITY MAY MAKE SUCH DETERMINATION AND ALLOW SUCH DISCONTINUATION ON THEIR OWN.

(c)  AFTER DECEMBER 31, 2002, THE COMMISSION, FOR UTILITIES WITH RESPECT TO WHICH IT HAS RATE REGULATORY AUTHORITY, MAY, ON ITS OWN MOTION, INVESTIGATE WHETHER COMPETITION HAS BEEN SUBSTANTIALLY IMPLEMENTED AND WHETHER STANDARD OFFER SERVICE MAY BE DISCONTINUED.

(3)  Development of standard offer tariffs. (a)  ON OR BEFORE THE DATE ON WHICH RETAIL COMPETITION IS INTRODUCED, EACH EXISTING SUPPLIER OR ITS SUCCESSOR THAT OWNS THE DISTRIBUTION ASSETS MAY FILE PROPOSED TARIFFS TO PROVIDE STANDARD OFFER BUNDLED SERVICE. SUCH RATES SHALL NOT BECOME EFFECTIVE UNTIL APPROVED BY THE COMMISSION. IF NO SUCH TARIFFS ARE FILED, RATES AND SERVICES IN EXISTENCE AT THE TIME RETAIL COMPETITION IS INITIATED SHALL CONSTITUTE THE STANDARD OFFER.

(b)  SUPPLIERS MAY FILE PROPOSED REVISIONS TO THE RATES DESCRIBED IN PARAGRAPH (a) OF THIS SUBSECTION (3). IT IS THE EXPECTATION OF THE GENERAL ASSEMBLY, HOWEVER, THAT THE RATES FOR STANDARD OFFER SERVICE WILL NOT INCREASE, RELATIVE TO EXISTING RATES, AS A RESULT OF ALLOWING COMPETITION. ANY RATE INCREASE PROPOSED FOR STANDARD OFFER SERVICE MUST BE FULLY JUSTIFIED THROUGH A RATE CASE PROCEEDING.

(c)  THE RATES FOR PROVIDING STANDARD OFFER SERVICE SHALL REFLECT THE COSTS OF PROVIDING SUCH SERVICE; EXCEPT THAT SUCH RATES SHALL BE NO HIGHER THAN THOSE ASSOCIATED WITH THE COSTS OF THE GENERATION UNITS AND PURCHASED­POWER CONTRACTS THAT WERE OWNED BY THE EXISTING ELECTRIC SERVICE SUPPLIER AS OF JULY 1, 1997.

(d)  CONSUMERS RECEIVING STANDARD OFFER SERVICE ARE ELIGIBLE FOR POTENTIAL RATE REDUCTIONS AS AUTHORIZED BY THE COMMISSION, CONSISTENT WITH THE COST­OF­SERVICE STANDARD.

(e)  AFTER THE DATE ON WHICH RETAIL COMPETITION IS INTRODUCED, CUSTOMERS ARE FREE TO LEAVE THE STANDARD OFFER AT ANY TIME TO PURCHASE FROM AN ALTERNATIVE SUPPLIER IN THE MARKET, BUT, ONCE THE MARKET OPTION IS SELECTED, A CUSTOMER MAY NOT RETURN TO SERVICE AT STANDARD OFFER PRICES.

(4)  Other consumer protection, service quality, reliability, and safety net service. (a)  NO CONSUMER SHALL BE DEEMED TO HAVE CHANGED SUPPLIERS OF ANY SERVICE AUTHORIZED IN THIS PART 2 WITHOUT WRITTEN AUTHORIZATION BY THE CONSUMER FOR SERVICE FROM THE NEW SUPPLIER. IF A CONSUMER IS SWITCHED TO A DIFFERENT SUPPLIER WITHOUT SUCH WRITTEN AUTHORIZATION, THE NEW SUPPLIER SHALL CAUSE SERVICE BY THE PREVIOUS SUPPLIER TO BE RESUMED AND THE NEW SUPPLIER SHALL BEAR ALL COSTS ASSOCIATED WITH SWITCHING THE CONSUMER BACK TO THE PREVIOUS SUPPLIER.

(b)  EACH ELECTRIC SERVICE PROVIDER SHALL BE RESPONSIBLE FOR MEETING APPLICABLE RELIABILITY STANDARDS AND SHALL WORK COOPERATIVELY WITH OTHER COMPANIES WITH WHOM IT HAS INTERCONNECTIONS, DIRECTLY OR INDIRECTLY, TO ENSURE SAFE, RELIABLE ELECTRIC SERVICE.

(c)  EACH ELECTRIC SERVICE PROVIDER SHALL PROVIDE AT LEAST THIRTY DAYS NOTICE TO ALL OF ITS AFFECTED CUSTOMERS IF IT IS NO LONGER OBTAINING GENERATION, TRANSMISSION, DISTRIBUTION, OR ANCILLARY SERVICES NECESSITATING THAT THE CONSUMER OBTAIN SERVICE FROM ANOTHER SUPPLIER OF GENERATION, TRANSMISSION, DISTRIBUTION, OR ANCILLARY SERVICES.

(d)  AN ELECTRIC SERVICE PROVIDER SUPPLYING FIRM SERVICE SHALL MAKE REASONABLE EFFORTS TO REESTABLISH SERVICE WITHIN THE SHORTEST POSSIBLE TIME WHEN SERVICE INTERRUPTIONS OCCUR AND SHALL WORK COOPERATIVELY WITH OTHER COMPANIES TO ENSURE TIMELY RESTORATION OF SERVICE WHERE FACILITIES ARE NOT UNDER THE CONTROL OF THE PROVIDER.

(e)  EACH ELECTRIC SERVICE PROVIDER SHALL ENSURE THAT BILLS RENDERED ON ITS BEHALF INCLUDE THE TOLL­FREE TELEPHONE NUMBERS FOR BILLING, SERVICE, AND SAFETY INQUIRIES AND THE TELEPHONE NUMBER OF THE CONSUMER SERVICES SECTION OF THE COMMISSION. EACH ELECTRIC SERVICE PROVIDER SHALL ALSO ENSURE THAT BILLING AND COLLECTION SERVICES RENDERED ON ITS BEHALF COMPLY WITH COMMISSION­APPROVED STANDARDS.

(f)  IN RECOGNITION THAT CUSTOMERS MAY FACE AN OCCASIONAL HIATUS BETWEEN COMPETITIVE SUPPLIERS, AND IN AN EFFORT TO PREVENT SUCH CUSTOMERS FROM LOSING POWER BECAUSE THEY DO NOT HAVE A CONTRACTUAL RELATIONSHIP WITH A VIABLE SUPPLIER, THE EXISTING ELECTRIC SERVICE PROVIDER SHALL FACILITATE THE CONTINUED DELIVERY OF POWER TO SUCH CUSTOMERS THROUGH SUCH MEANS AS ARE PRACTICABLE, INCLUDING, WITHOUT LIMITATION, PROVIDING SUPPLY THROUGH THE SHORT­TERM WHOLESALE POWER MARKET. THE EXISTING ELECTRIC SERVICE PROVIDER SHALL FULLY RECOVER FROM THESE CUSTOMERS ITS REASONABLE COSTS OF PROVIDING SUCH SERVICE, CONSISTENT WITH TERMS AND CONDITIONS APPROVED BY THE COMMISSION.

40­4­208.  Market power initiatives. (1)  ON OR BEFORE JULY 1, 1998, ALL COLORADO ELECTRIC UTILITIES SHALL UNBUNDLE THEIR GENERATION FROM THEIR TRANSMISSION AND DISTRIBUTION SERVICES FOR PURPOSES OF BILLING CUSTOMERS.

(2)  ALL COLORADO ELECTRIC UTILITIES ARE ENCOURAGED TO SEPARATE THEIR OWNERSHIP OF GENERATION FACILITIES, OPERATIONS, AND SERVICES FROM THEIR OWNERSHIP OF TRANSMISSION AND DISTRIBUTION FACILITIES, OPERATIONS, AND SERVICES.

(3)  THE COMMISSION, WITH THE ASSISTANCE OF THE ATTORNEY GENERAL AND THE TREASURER, SHALL UNDERTAKE AN ANALYSIS OF THE IMPEDIMENTS, IF ANY, TO THE IMPLEMENTATION OF THE POLICY SET FORTH IN SUBSECTION (2) OF THIS SECTION AS WELL AS ANY TAX OR OTHER INCENTIVES THAT MAY BE APPROPRIATE TO OVERCOME THESE IMPEDIMENTS. THE RESULTS OF THIS ANALYSIS SHALL BE PRESENTED TO THE GENERAL ASSEMBLY IN ACCORDANCE WITH SECTION 24­1­136 (9), C.R.S., ON OR BEFORE JANUARY 1, 1998.

40­4­209.  Stranded costs. (1)  THE RECOVERY OF STRANDED COSTS IN COLORADO SHALL BE GOVERNED BY THE FOLLOWING PROVISIONS:

(a)  Utility requirements. ANY UTILITY SEEKING TO RECOVER THE COSTS OF INVESTMENTS THAT ARE RENDERED UNECONOMIC AS A RESULT OF THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION IN COLORADO SHALL:

(I)  HAVE THE BURDEN TO DEMONSTRATE THAT SUCH COSTS ARE UNECONOMIC;

(II)  MITIGATE, BY SALE OF ASSETS OR OTHERWISE, ANY SUCH UNECONOMIC COSTS TO THE DEGREE FEASIBLE; AND

(III)  NET OUT ANY ABOVE­MARKET, UNECONOMIC COSTS AGAINST COSTS THAT ARE BELOW­MARKET.

(b)  Additional requirements. STRANDED COSTS RECOVERED FROM UTILITY CUSTOMERS SHALL BE RECOVERED ONLY:

(I)  IN A MANNER THAT AVOIDS ANY COST­SHIFTING BETWEEN CUSTOMER CLASSES; AND

(II)  IN A MANNER THAT IS EQUITABLE IN ITS COMPETITIVE IMPACT ON POWER GENERATION FUEL SOURCES.

40­4­210.  Aggregation of electricity demands ­ study. THE COMMISSION SHALL UNDERTAKE A STUDY, WITH PUBLIC INPUT, TO DETERMINE THE BEST METHODS BY WHICH THE DEMANDS OF SMALL CUSTOMERS MAY BE AGGREGATED FOR PURPOSES OF ACCESS TO COMPETITIVE ELECTRICITY MARKETS. THE COMMISSION SHALL MAKE FINDINGS AS TO WHETHER THE MARKET, WITHOUT ASSISTANCE, WILL PROVIDE METHODS BY WHICH SMALL­CUSTOMER ELECTRICITY DEMANDS WILL BE AGGREGATED AND, IF NOT, WHAT GOVERNMENTAL OR OTHER NON­MARKET METHODS ARE APPROPRIATE. THE COMMISSION SHALL COMPLETE THIS STUDY, INCLUDING RECOMMENDATIONS, AND SHALL REPORT TO THE GENERAL ASSEMBLY IN ACCORDANCE WITH SECTION 24­1­136 (9), C.R.S., ON OR BEFORE JANUARY 1, 1998.

40­4­211.  Independent system operator and power pool. THE COMMISSION SHALL UNDERTAKE A STUDY AS TO WHETHER COLORADO UTILITIES AND OTHER POWER SUPPLIERS SHOULD PARTICIPATE IN A REGIONAL OR COLORADO­SPECIFIC INDEPENDENT SYSTEM OPERATOR OR POWER POOL FOR PURPOSES OF CONTROLLING MARKET POWER, PROVIDING OPEN AND COMPARABLE ACCESS TO THE WHOLESALE POWER GRID FOR ALL POWER SUPPLIERS, MAINTAINING ELECTRIC SYSTEM RELIABILITY, OR ACHIEVING OTHER GOALS. THE COMMISSION SHALL COMPLETE THIS STUDY, INCLUDING RECOMMENDATIONS, AND SHALL REPORT TO THE GENERAL ASSEMBLY IN ACCORDANCE WITH SECTION 24­1­136 (9), C.R.S., ON OR BEFORE JULY 1, 1998.

40­4­212.  Tax policies. THE TREASURER SHALL CONDUCT A STUDY OF THE EFFECT OF EXISTING STATE PROPERTY TAX POLICY AND OTHER TAX POLICIES ON THE INCENTIVES TO USE RENEWABLE ENERGY GENERATING RESOURCES. THE TREASURER SHALL COMPLETE THIS STUDY AND SHALL REPORT TO THE GENERAL ASSEMBLY IN ACCORDANCE WITH SECTION 24­1­136 (9), C.R.S., ON OR BEFORE JULY 1, 1998.

SECTION 2.  Severability. If any provision of this act or its application to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this act that can be given effect without the invalid provision or application, and to this end the provisions of this act are declared to be severable.

SECTION 3.  Effective date. This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety­day period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution; except that, if a referendum petition is filed against this act or an item, section, or part of this act within such period, then the act, item, section, or part, if approved by the people, shall take effect on the date of the official declaration of the vote thereon by proclamation of the governor.