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Second Regular Session

Sixty-first General Assembly

LLS NO. 98­0007.01 DHG HOUSE BILL 98­1284

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 that 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 distribution and delivery functions, customer choice, open access to delivery facilities, unbundling of services, and recovery of stranded costs.

Requires electric distribution utilities to functionally unbundle all competitive energy services from their transmission and distribution operations on or before July 1, 2000. Requires the filing of direct­access tariffs substantially identical to the pro forma tariffs promulgated by the federal energy regulatory commission (FERC).

Prohibits "slamming" and other predatory and anticompetitive practices. Requires providers to maintain the availability of standard­offer service to customers who have not chosen a competitive provider. Allows recovery of stranded costs, subject to supervision by the PUC and subject to a duty to mitigate costs.

Sets forth a 2­year timetable for restructuring of the retail electric market. Requires utilities to file with the PUC their restructuring plans on or before July 1, 1999, with full implementation to occur on or before July 1, 2000.


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

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

ARTICLE 4.5

Electric Utility Restructuring

and Consumer Choice Act

40­4.5­101.  Legislative declaration ­ purpose of article ­ process for implementation. (1)  THE GENERAL ASSEMBLY FINDS, DETERMINES, AND DECLARES THAT:

(a)  RESTRUCTURING THE ELECTRIC INDUSTRY TO FACILITATE COMPETITION WILL PROMOTE THE PUBLIC INTEREST BY LOWERING PRICES, INCREASING CONSUMER CHOICE, IMPROVING THE QUALITY AND VARIETY OF AVAILABLE SERVICES, IMPROVING ENERGY EFFICIENCY, CREATING BUSINESS OPPORTUNITIES, AND ENCOURAGING NEW TECHNOLOGIES.

(b)  THE PROCESS OF RESTRUCTURING THE ELECTRIC UTILITY INDUSTRY 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 40­4.5­103.

(c)  THE ELEMENTS OF THE ELECTRIC INDUSTRY OTHER THAN TRANSMISSION AND DISTRIBUTION ARE NOT NATURAL MONOPOLIES AND SHOULD NOT BE REGULATED AS IF THEY WERE NATURAL MONOPOLIES.

(d)  RECENT FEDERAL ACTION HAS ASSURED THE AVAILABILITY OF ELECTRIC TRANSMISSION SERVICE IN INTERSTATE COMMERCE ON AN OPEN ACCESS, NONDISCRIMINATORY BASIS COMPATIBLE WITH THE PROVISION OF RETAIL CHOICE.

(e)  IT IS TECHNICALLY AND ADMINISTRATIVELY FEASIBLE TO RESTRUCTURE THE ELECTRIC INDUSTRY TO PROMOTE RETAIL CHOICE.

(f)  THE BENEFITS OF RETAIL CHOICE WILL BE REALIZED MORE QUICKLY AND FULLY IF ELECTRIC UTILITY RESTRUCTURING IS COMPLETED AS QUICKLY AS POSSIBLE, RATHER THAN OVER AN ARBITRARY TRANSITION PERIOD.

(g)  ON OR BEFORE JULY 1, 2000, THE PROVISION OF COMPETITIVE ENERGY SERVICES SHALL BE SUBJECT TO MARKET FORCES AND, WHILE STILL SUBJECT TO THE GENERAL SUPERVISORY JURISDICTION OF THE COMMISSION UNDER THIS ARTICLE TO THE LIMITED EXTENT NECESSARY TO SAFEGUARD THE PUBLIC INTEREST, SHALL NOT BE SUBJECT TO TRADITIONAL COST­OF­SERVICE REGULATION BY THE COMMISSION NOR TO THE OTHER TRADITIONAL ATTRIBUTES OF A SYSTEM OF REGULATED MONOPOLY, INCLUDING, WITHOUT LIMITATION, REGULATION OF RATES OR SERVICE TERRITORIES.

(2)  Purpose. THE PURPOSE OF THIS ARTICLE IS TO ESTABLISH A COMPREHENSIVE FRAMEWORK FOR THE RESTRUCTURING OF THE ELECTRIC UTILITY INDUSTRY AND TO PROVIDE CONSUMERS WITH THE BENEFITS OF COMPETITION FOR COMPETITIVE ENERGY SERVICES, WHILE RETAINING REGULATORY OVERSIGHT OF DISTRIBUTION FACILITIES AND SERVICES.

(3)  Process. THE GENERAL ASSEMBLY INTENDS THAT THE RESTRUCTURING OF THE COLORADO ELECTRIC UTILITY INDUSTRY PROCEED IN ACCORDANCE WITH THE PRINCIPLES SET FORTH IN THIS ARTICLE AND THAT ALL AFFECTED PERSONS BE GIVEN A CHANCE TO PARTICIPATE. THE COMMISSION AND THE LOCAL GOVERNING BODIES SHALL, WITH RESPECT TO THE UTILITIES OVER WHICH THEY HAVE JURISDICTION, IMPLEMENT THE PROCESS.

40­4.5­102.  Definitions. AS USED IN THIS ARTICLE, UNLESS THE CONTEXT OTHERWISE REQUIRES:

(1)  "AFFILIATE" MEANS A SUBSIDIARY OF A PUBLIC UTILITY, A PARENT CORPORATION OF A PUBLIC UTILITY, A JOINT VENTURE ORGANIZED AS A SEPARATE CORPORATION OR PARTNERSHIP TO THE EXTENT OF THE INDIVIDUAL PUBLIC UTILITY=S INVOLVEMENT WITH THE JOINT VENTURE, OR A SUBSIDIARY OF A PARENT CORPORATION OF A PUBLIC UTILITY.

(2)  "ANCILLARY SERVICES" MEANS THE SERVICES REQUIRED TO PROVIDE RELIABLE DELIVERY SERVICE, INCLUDING, BUT NOT LIMITED TO, VOLTAGE SUPPORT, RESERVES, ENERGY IMBALANCE SERVICE, AND LOSSES.

(3)  "COGENERATION FACILITY" MEANS NEW OR EXISTING EQUIPMENT THAT USES FOSSIL FUEL OR OTHER FUELS AS AN ENERGY INPUT TO PRODUCE ELECTRIC ENERGY AND THAT IN ADDITION HAS BEEN CONSTRUCTED OR RETROFITTED SO AS TO PRODUCE USEFUL THERMAL ENERGY, SUCH AS HEAT OR STEAM, FOR INDUSTRIAL OR COMMERCIAL HEATING OR COOLING PURPOSES, THROUGH THE SEQUENTIAL USE OF ENERGY.

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

(5)  "COMPETITIVE ENERGY SERVICES" MEANS THE PROVISION OF ELECTRIC ENERGY SUPPLIES OR RELATED SERVICES TO CONSUMERS, INCLUDING SERVICES CONCERNING:

(a)  THE USAGE, MEASUREMENT, QUALITY, PURCHASE, AND SALE OF ELECTRIC ENERGY;

(b)  AGGREGATION OF CUSTOMERS OR SUPPLIERS OF ELECTRIC ENERGY;

(c)  REVENUE CYCLE SERVICES, INCLUDING METERING, BILLING, COLLECTING, ACCOUNTING, AND CUSTOMER SERVICES;

(d)  ENERGY­RELATED SERVICES, INCLUDING DEMAND­SIDE MANAGEMENT, ENERGY EFFICIENCY, INFORMATION SYSTEMS, CUSTOMER SERVICES, AND AUDITS OF ENERGY CONSUMPTION OR THE ACCURACY OF BILLINGS; AND

(e)  SUCH OTHER SERVICES RELATED TO ELECTRICITY SERVICE AS THE COMMISSION DETERMINES ARE APPROPRIATELY SUBJECT TO COMPETITIVE MARKET FORCES.

(6)  "COMPETITIVE PROVIDER" MEANS A PERSON PROVIDING COMPETITIVE ENERGY SERVICES.

(7)  "CONTIGUOUS END­USERS OF ELECTRICITY" MEANS PERSONS WHOSE PROPERTIES ARE DIRECTLY TOUCHING OR ARE SEPARATED FROM EACH OTHER ONLY BY A PUBLIC RIGHT­OF­WAY OR BY THE PROPERTY OF OTHER PERSONS IN THE SAME DECENTRALIZED COMMUNITY ENERGY SYSTEM.

(8)  "COOPERATIVE ELECTRIC ASSOCIATION" MEANS A NONPROFIT ELECTRIC CORPORATION OR ASSOCIATION, INCLUDING, BUT NOT LIMITED TO, A NONPROFIT GENERATION AND TRANSMISSION ELECTRIC CORPORATION OR ASSOCIATION.

(9)  "DECENTRALIZED COMMUNITY ENERGY SYSTEM" MEANS AT LEAST ONE AND NOT MORE THAN TWENTY CONTIGUOUS END­USERS OF ELECTRICITY, EACH OF WHOM MEETS ALL OR PART OF ITS END­USE ELECTRICITY NEEDS FROM A COMMON RENEWABLE ENERGY FACILITY OR A COMMON HIGHLY EFFICIENT COGENERATION FACILITY LOCATED ON THE PROPERTY OF ONE OR MORE OF SUCH END­USERS. UNLESS IT SELLS COMPETITIVE ENERGY SERVICES AT RETAIL TO END­USERS NOT SERVED BY THE SYSTEM, A DECENTRALIZED COMMUNITY ENERGY SYSTEM IS NOT A COMPETITIVE PROVIDER UNDER THIS ARTICLE AND IS NOT A PUBLIC UTILITY OR DISTRIBUTION UTILITY. A DECENTRALIZED COMMUNITY ENERGY SYSTEM MAY SELL ELECTRICITY TO A COMPETITIVE PROVIDER.

(10)  "DISTRIBUTION FACILITY" MEANS THE PLANT OR EQUIPMENT USED FOR THE DISTRIBUTION OF ELECTRICITY TO THE CUSTOMER=S PREMISES, BUT EXCLUDING RETAIL METERING FACILITIES, AND WHICH IS NOT A TRANSMISSION FACILITY SUBJECT TO THE JURISDICTION OF THE FEDERAL ENERGY REGULATORY COMMISSION.

(11)  "ELECTRIC DISTRIBUTION UTILITY" OR "DISTRIBUTION UTILITY" MEANS ANY PUBLIC UTILITY OWNING, OPERATING, OR CONTROLLING DISTRIBUTION FACILITIES.

(12)  "ELECTRIC SUPPLY" MEANS THE COMMODITY OF ELECTRICITY PROVIDED FOR CONSUMPTION BY ONE OR MORE CONSUMERS. "ELECTRIC SUPPLY" DOES NOT MEAN THE DISTRIBUTION OR THE DELIVERY OF THE COMMODITY.

(13)  "ELECTRIC TRANSMISSION UTILITY" OR "TRANSMISSION UTILITY" MEANS ANY PUBLIC UTILITY OWNING, OPERATING, OR CONTROLLING TRANSMISSION FACILITIES.

(14)  "FUNCTIONAL UNBUNDLING" OR "FUNCTIONAL SEPARATION" MEANS THE COMPLETE SEPARATION OF DISTRIBUTION SERVICE FROM TRANSMISSION SERVICE AND FROM COMPETITIVE ENERGY SERVICES, INCLUDING THE SEGREGATION OF COSTS, RATES, EMPLOYEES, SERVICE, AND ANY OTHER MATTERS THAT MUST BE SEGREGATED IN ORDER TO PERMIT CUSTOMERS OF DELIVERY SERVICES TO SUBSCRIBE TO AND RECEIVE SUCH DELIVERY SERVICES ON A FULLY STAND­ALONE BASIS.

(15)  "HIGHLY EFFICIENT COGENERATION" MEANS THE PRODUCTION OF ELECTRICITY BY MEANS OF A COGENERATION FACILITY IN WHICH:

(a)  IF THE ENERGY INPUT TO THE FACILITY IS FIRST USED TO PRODUCE USEFUL POWER OUTPUT, THE ANNUAL USEFUL THERMAL ENERGY OUTPUT IS NO LESS THAN TWENTY­FIVE PERCENT OF THE ANNUAL TOTAL ENERGY OUTPUT; AND

(b)  THE ANNUAL USEFUL POWER OUTPUT PLUS THE ANNUAL USEFUL THERMAL ENERGY OUTPUT IS NO LESS THAN FIFTY PERCENT OF THE ANNUAL TOTAL ENERGY INPUT OF FOSSIL FUEL TO THE FACILITY.

(16)  "LOCAL GOVERNING BODY" MEANS THE GOVERNING BODY OF THE MUNICIPALITY OR POWER AUTHORITY. "LOCAL GOVERNING BODY" ALSO MEANS THE BOARD OF DIRECTORS OF A COOPERATIVE ELECTRIC ASSOCIATION, UNLESS THE COOPERATIVE ELECTRIC ASSOCIATION HAS ELECTED TO REIMPOSE COMMISSION REGULATION UNDER SECTION 40­9.5­113.

(17)  "MUNICIPALITY" MEANS A CITY, TOWN, COUNTY, CITY AND COUNTY, POWER AUTHORITY, PUBLIC CORPORATION, OR OTHER POLITICAL SUBDIVISION OR AGENCY OF THE STATE OF COLORADO.

(18)  "MUNICIPAL UTILITY" MEANS AN ELECTRIC UTILITY OWNED BY A MUNICIPALITY. FOR PURPOSES OF THIS ARTICLE, A MUNICIPALITY OWNS A MUNICIPAL UTILITY ONLY TO THE EXTENT THAT IT HAS AN OWNERSHIP INTEREST IN GENERATION, TRANSMISSION, OR DISTRIBUTION FACILITIES.

(19)  "PERSON" MEANS ANY INDIVIDUAL, CORPORATION, LIMITED LIABILITY COMPANY, ASSOCIATION, GENERAL PARTNERSHIP, LIMITED PARTNERSHIP, JOINT VENTURE, TRUST, JOINT STOCK COMPANY, ESTATE, UNINCORPORATED ORGANIZATION, OR OTHER LEGAL ENTITY OR ORGANIZATION. "PERSON" ALSO INCLUDES ANY MUNICIPALITY, STATE OR STATE AGENCY, POLITICAL SUBDIVISION OF A STATE, INSTRUMENTALITY OF A STATE, A FEDERAL AGENCY, AND ANY FOREIGN GOVERNMENT OR A POLITICAL SUBDIVISION THEREOF.

(20)  "STRANDED COSTS" MEANS THE NET DIFFERENCE BETWEEN THE COSTS OF ALL VERIFIABLE, PRUDENTLY INCURRED, AND FULLY MITIGATED JURISDICTIONAL ASSETS AND OBLIGATIONS ACQUIRED OR ENTERED INTO PRIOR TO JANUARY 1, 1998, AND THE MARKET VALUE OF THESE ASSETS AND OBLIGATIONS RESULTING AS A CONSEQUENCE OF THE INTRODUCTION OF COMPETITION UNDER THIS ARTICLE.

(21)  "TRANSMISSION FACILITY" MEANS THE PLANT OR EQUIPMENT USED FOR THE TRANSMISSION OF ELECTRICITY, AS DETERMINED BY THE FEDERAL ENERGY REGULATORY COMMISSION PURSUANT TO FEDERAL LAW.

40­4.5­103. Governing principles. (1)  THE FOLLOWING PRINCIPLES SHALL BE APPLICABLE TO THE RESTRUCTURING OF THE ELECTRIC UTILITY INDUSTRY IN COLORADO:

(a)  Customer choice. (I)  ON OR BEFORE JULY 1, 2000, THE PROVISION OF COMPETITIVE ENERGY SERVICES, AND THE TERMS AND CONDITIONS OF SUCH SERVICES, SHALL BE SUBJECT TO THE COMPETITIVE MARKET. THE PROVISION OF COMPETITIVE ENERGY SERVICES SHALL NOT SUBJECT THE COMPETITIVE PROVIDER TO REGULATION AS A UTILITY SOLELY BY REASON THEREOF.

(II)  ON OR BEFORE JULY 1, 2000, ALL CUSTOMERS SHALL HAVE THE ABILITY TO PURCHASE COMPETITIVE ENERGY SERVICES FROM THE COMPETITIVE PROVIDER OF THEIR CHOICE.

(III)  CUSTOMERS SHALL BE FREE TO AGGREGATE THEIR LOADS ON A VOLUNTARY BASIS, SUBJECT TO REASONABLE OPERATIONAL PROCEDURES AND PRACTICES. AGGREGATION MAY INCLUDE MULTIPLE CUSTOMERS AT A SINGLE SITE OR A SINGLE CUSTOMER AT MULTIPLE SITES. AN AGGREGATED LOAD MAY INCLUDE CUSTOMERS OF A PARTICULAR CLASS OR IT MAY INCLUDE CUSTOMERS FROM DIFFERENT CLASSES. AGGREGATION BY MEANS OF DECENTRALIZED COMMUNITY ENERGY SYSTEMS SHALL SPECIFICALLY BE ALLOWED.

(IV)  THE COMMISSION SHALL ADOPT RULES TO IMPLEMENT THE PROVISIONS OF THIS SECTION.

(b)  Regulation and obligations of electric distribution utilities. (I)  ON OR BEFORE JULY 1, 2000, PROVIDERS OF ELECTRIC DISTRIBUTION OR ELECTRIC DELIVERY SERVICES SHALL FUNCTIONALLY UNBUNDLE ALL COMPETITIVE ENERGY SERVICES FROM THEIR TRANSMISSION AND DISTRIBUTION OPERATIONS. SUCH FUNCTIONAL UNBUNDLING SHALL AT A MINIMUM COMPLY WITH THE FOLLOWING PRINCIPLES:

(A)  EMPLOYEES ENGAGED IN SUCH FUNCTIONALLY UNBUNDLED SERVICES SHALL COMPLY WITH THE STANDARDS OF CONDUCT SET FORTH IN THIS ARTICLE.

(B)  THE PROVISION OF FUNCTIONALLY UNBUNDLED DELIVERY SERVICE MAY NOT BE CONDITIONED UPON, OR OTHERWISE TIED IN ANY MANNER TO, THE PROVISION OF COMPETITIVE ENERGY SERVICES.

(C)  THE RATES, TERMS, AND CONDITIONS FOR ALL FUNCTIONALLY UNBUNDLED SERVICES SHALL BE SEPARATELY STATED TO FACILITATE THE ABILITY OF CONSUMERS OF SUCH SERVICES TO SELECT THE SERVICES THEY CHOOSE AND TO UNDERSTAND THE COSTS OF THE SERVICES. EACH COMPETITIVE SERVICE MAY BE PURCHASED SEPARATELY OR IN COMBINATION WITH OTHER SERVICES.

(D)  THE RATES CHARGED FOR DISTRIBUTION SERVICES SHALL NOT PROVIDE A SUBSIDY FOR ANY COMPETITIVE ENERGY SERVICE.

(II)  ON OR BEFORE JULY 1, 2000, ELECTRIC DISTRIBUTION UTILITIES SHALL PROVIDE DIRECT ACCESS TO THEIR DISTRIBUTION FACILITIES ON A NONDISCRIMINATORY BASIS SUBJECT TO THE REGULATION OF THE COMMISSION.

(III)  THE DIRECT ACCESS TARIFFS REQUIRED PURSUANT TO THIS ARTICLE SHALL ALLOW SEAMLESS ACCESS TO TRANSMISSION SERVICE PROVIDED UNDER OPEN ACCESS TARIFFS ESTABLISHED BY THE FEDERAL ENERGY REGULATORY COMMISSION (FERC) FOR ELECTRICITY AND SHALL CONTAIN PROVISIONS SUBSTANTIALLY IDENTICAL TO THOSE PROMULGATED BY THE FERC IN ITS PRO FORMA OPEN ACCESS TARIFFS.

(IV)  THE DISTRIBUTION UTILITY SHALL BE RELIEVED OF ITS TRADITIONAL OBLIGATION TO SUPPLY, BUT SHALL HAVE AN OBLIGATION TO CONNECT ALL CUSTOMERS WITHIN ITS SERVICE TERRITORY ON NONDISCRIMINATORY TERMS AND CONDITIONS. THE DISTRIBUTION UTILITY SHALL BE RELIEVED OF ANY OBLIGATION TO BE THE PROVIDER.

(V)  CONSUMERS SHALL HAVE THE RIGHT TO SELECT THEIR SOURCES OF ELECTRIC SUPPLY AND OTHER COMPETITIVE ENERGY SERVICES, AND SHALL HAVE NONDISCRIMINATORY ACCESS TO INTERCONNECTION WITH THE DISTRIBUTION UTILITY IN WHOSE SERVICE TERRITORY THE CONSUMER IS LOCATED.

(VI)  THE COMMISSION SHALL ADOPT RULES TO IMPLEMENT THE PROVISIONS OF THIS SECTION.

(c)  Standards of conduct. THE COMMISSION SHALL ADOPT RULES REGARDING PRACTICES BETWEEN THE DISTRIBUTION UTILITY AND ITS AFFILIATE CONSISTENT, AT A MINIMUM, WITH THE FOLLOWING PRINCIPLES:

(I)  CERTAIN PRACTICES BETWEEN THE ELECTRIC DISTRIBUTION UTILITY AND ITS AFFILIATE MAY BE PROHIBITED IF THE COMMISSION FINDS IT IS IN THE PUBLIC INTEREST TO DO SO.

(II)  A DISTRIBUTION UTILITY SHALL STRICTLY ENFORCE TARIFF PROVISIONS FOR WHICH THERE IS NO DISCRETION IN THE APPLICATION OF THE PROVISION. A DISTRIBUTION UTILITY SHALL APPLY TARIFF PROVISIONS IN THE SAME MANNER TO THE SAME OR SIMILARLY SITUATED ENTITIES IF THERE IS DISCRETION IN THE APPLICATION OF THE PROVISION. (III)  ALL PRODUCTS AND SERVICES OFFERED BY A DISTRIBUTION UTILITY SHALL BE AVAILABLE TO ALL CUSTOMERS AND COMPETITIVE PROVIDERS SIMULTANEOUSLY AND ON A NONDISCRIMINATORY BASIS.

(IV)  A DISTRIBUTION UTILITY SHALL NOT RELEASE ANY PROPRIETARY CUSTOMER INFORMATION WITHOUT THE PRIOR WRITTEN AUTHORIZATION OF THE CUSTOMER.

(V)  A DISTRIBUTION UTILITY SHALL PROCESS ALL REQUESTS FOR INFORMATION IN THE SAME MANNER AND WITHIN THE SAME PERIOD OF TIME.

(VI)  A DISTRIBUTION UTILITY SHALL REFRAIN FROM GIVING ANY APPEARANCE OF SPEAKING ON BEHALF OF ITS AFFILIATE. NEITHER A DISTRIBUTION UTILITY NOR AN AFFILIATE SHALL IN ANY WAY REPRESENT THAT ANY ADVANTAGE ACCRUES TO CUSTOMERS OR OTHERS IN THE USE OF THE DISTRIBUTION UTILITY'S SERVICES AS A RESULT OF THAT CUSTOMER OR OTHERS DEALING WITH THE AFFILIATE.

(VII)  A DISTRIBUTION UTILITY SHALL NOT TRADE UPON, PROMOTE, OR ADVERTISE ITS AFFILIATION WITH AN AFFILIATE, NOR ALLOW THE UTILITY NAME OR LOGO TO BE USED BY THE AFFILIATE, UNLESS APPROPRIATE DISCLAIMERS ARE SET FORTH.

(VIII)  A DISTRIBUTION UTILITY SHALL NOT PARTICIPATE IN JOINT ADVERTISING OR JOINT MARKETING WITH AN AFFILIATE.

(IX)  A DISTRIBUTION UTILITY SHALL NOT OFFER OR PROVIDE TO AN AFFILIATE ADVERTISING SPACE IN BILLING ENVELOPES OR ANY OTHER FORM OF UTILITY­CUSTOMER COMMUNICATION UNLESS IT PROVIDES ACCESS TO ALL OTHER COMPETITIVE PROVIDERS ON THE SAME TERMS AND CONDITIONS.

(X)  A DISTRIBUTION UTILITY SHALL ESTABLISH AND FILE WITH THE COMMISSION A DISPUTE RESOLUTION PROCEDURE TO ADDRESS COMPLAINTS ALLEGING VIOLATIONS OF THESE RULES.

(XI)  A DISTRIBUTION UTILITY SHALL KEEP A LOG OF ALL REQUESTS FOR INFORMATION MADE BY AN AFFILIATED COMPETITIVE PROVIDER AND NONAFFILIATED COMPETITIVE PROVIDERS AND THE DATE OF THE RESPONSE TO SUCH REQUESTS. THE LOG SHALL BE SUBJECT TO PERIODIC REVIEW BY THE COMMISSION.

(XII)  A DISTRIBUTION UTILITY SHALL MAINTAIN ITS BOOKS OF ACCOUNT AND RECORDS OF ITS DISTRIBUTION OPERATIONS SEPARATELY FROM THOSE OF ITS TRANSMISSION OPERATIONS AND ITS AFFILIATES AND SUCH DISTRIBUTION BOOKS OF ACCOUNT AND RECORDS SHALL BE AVAILABLE FOR COMMISSION INSPECTION.

(XIII)  THE DISTRIBUTION UTILITY SHALL MAINTAIN IN A PUBLIC PLACE, AND FILE WITH THE COMMISSION, CURRENT WRITTEN PROCEDURES IMPLEMENTING THESE STANDARDS OF CONDUCT IN SUCH DETAIL AS WILL ENABLE CUSTOMERS AND THE COMMISSION TO DETERMINE THAT THE DISTRIBUTION UTILITY IS IN COMPLIANCE WITH THE REQUIREMENTS OF THIS SECTION.

(d)  Consumer protection. THE COMMISSION SHALL OVERSEE CONSUMER PROTECTIONS ASSOCIATED WITH THE PROVISION OF COMPETITIVE ENERGY SERVICES. THIS OVERSIGHT OBLIGATION SHALL INCLUDE, AT A MINIMUM:

(I)  Informing customers. EACH DISTRIBUTION UTILITY SHALL INFORM ALL CUSTOMERS OF THEIR ABILITY TO CHOOSE COMPETITIVE ENERGY SERVICES AND OF THE AVAILABILITY OF SUPPLIERS OF THOSE SERVICES.

(II)  Promulgation of consumer protection regulations. THE COMMISSION SHALL PROMULGATE RULES TO ENSURE ADEQUATE CONSUMER PROTECTION IN CONNECTION WITH THE PROVISION OF COMPETITIVE ENERGY SERVICES. SUCH RULES SHALL REQUIRE, AT A MINIMUM:

(A)  REGISTRATION AND CERTIFICATION WITH THE COMMISSION OF ALL COMPETITIVE PROVIDERS, WHICH REGISTRATION AND CERTIFICATION SHALL INCLUDE A LISTING OF THE COMPETITIVE ENERGY SERVICES PROVIDED, THE NAMES OF AFFILIATES THAT ARE DISTRIBUTION UTILITIES OR COMPETITIVE PROVIDERS, THE NAME AND ADDRESS OF LOCAL REPRESENTATIVES FOR COMMISSION CONTACTS AND SERVICE OF PROCESS, SUCH INFORMATION AS MAY BE REQUIRED BY THE COMMISSION TO ESTABLISH CREDITWORTHINESS, AND THE ABILITY TO PROVIDE COMPETITIVE ENERGY SERVICES CONSISTENT WITH REQUIRED SAFETY AND RELIABILITY STANDARDS AND OTHER CONSUMER PROTECTIONS;

(B)  THE PROHIBITION OF CUSTOMER SLAMMING. FOR THE PURPOSES OF THIS ARTICLE, "SLAMMING" MEANS THE TRANSFER OF CUSTOMERS BETWEEN SERVICES OR COMPETITIVE PROVIDERS WITHOUT PRIOR NOTICE TO AND THE PRIOR INFORMED CONSENT OF THE CUSTOMER.

(C)  PROTECTION FROM ABUSIVE, ANTICOMPETITIVE CONDUCT, SUCH AS THE EXERCISE OF MARKET POWER, PRICING CROSS­SUBSIDIES, AND UNFAIR TRADE PRACTICES;

(D)  PROCEDURES FOR THE EFFICIENT RESOLUTION OF DISPUTES BETWEEN CONSUMERS AND COMPETITIVE PROVIDERS; AND

(E)  THE RELIABILITY AND SAFETY OF ELECTRIC SERVICES, INCLUDING COMPETITIVE ENERGY SERVICES.

(III)  THE COMMISSION SHALL HAVE THE POWER TO REQUIRE THAT SOME OR ALL COMPETITIVE ENERGY SERVICES BE PROVIDED THROUGH AN AFFILIATE. IN THE EVENT THAT THE COMMISSION AUTHORIZES SOME OR ALL COMPETITIVE ENERGY SERVICES TO BE PROVIDED THROUGH A DIVISION OR BUSINESS UNIT, THEN ALL PROVISIONS IN THIS ARTICLE APPLICABLE TO AN AFFILIATE SHALL APPLY TO SUCH DIVISION OR BUSINESS UNIT.

(e)  Standard­offer service. (I)  STANDARD­OFFER SERVICE SHALL BE AVAILABLE FOR CUSTOMERS WHO HAVE NOT CHOSEN A COMPETITIVE PROVIDER AND WISH TO CONTINUE TO RECEIVE A BUNDLED SERVICE. THE PROVIDER OF STANDARD­OFFER SERVICE SHALL BE DETERMINED THROUGH A COMPETITIVE BID PROCESS. THE DISTRIBUTION UTILITY SHALL NOT BE THE PROVIDER OF STANDARD­OFFER SERVICE.

(II)  AN AFFILIATE OF AN ELECTRIC DISTRIBUTION UTILITY MAY PARTICIPATE IN THE BIDDING PROCESS, BUT NO PREFERENCE OR ADVANTAGE SHALL BE GIVEN TO THE AFFILIATE AS A RESULT OF SUCH AFFILIATION.

(III)  THE COMMISSION SHALL ADOPT RULES TO GOVERN THE BIDDING PROCESS, TO ASSURE THE ADEQUACY OF THE BUNDLED SERVICE AT THE BEST COMPETITIVE PRICE, AND TO ASSURE NONDISCRIMINATORY TREATMENT OF ALL BIDDERS.

(f)  Recovery of stranded costs. (I)  IN CONNECTION WITH THE TRANSITION TO A RESTRUCTURED, COMPETITIVE MARKET, A UTILITY SHALL BE PERMITTED THE OPPORTUNITY TO RECOVER STRANDED COSTS THAT RESULT AS A CONSEQUENCE OF THE IMPLEMENTATION OF THIS ARTICLE. ANY SUCH RECOVERY SHALL ONLY BE PERMITTED CONSISTENT WITH THE FOLLOWING PRINCIPLES:

(A)  STRANDED COSTS ELIGIBLE FOR RECOVERY SHALL NOT INCLUDE COSTS ARISING FROM DISTRIBUTION ASSETS OR CHANGES IN ELECTRICITY USAGE BY CONSUMERS OCCURRING IN THE NORMAL COURSE OF BUSINESS, INCLUDING THOSE RESULTING FROM: CHANGES IN BUSINESS CYCLES; TERMINATION OF OPERATIONS; WEATHER; REDUCED PRODUCTION; CHANGES IN MANUFACTURING PROCESSES; OR INSTALLATION OR EXPANSION OF NEW SELF­GENERATION OR COGENERATION EQUIPMENT, INCLUDING, SPECIFICALLY, THE INSTALLATION OR EXPANSION OF DECENTRALIZED COMMUNITY ENERGY SYSTEMS, PERFORMANCE OF EXISTING SELF­GENERATION OR COGENERATION EQUIPMENT, BYPASS OPTIONS EXISTING AT THE EFFECTIVE DATE OF THIS ARTICLE, ENERGY CONSERVATION EFFORTS, CHANGES IN TYPE OR CLASS OF SERVICE INCLUDING BUT NOT LIMITED TO CHANGES IN VOLTAGE LEVEL OR FROM FIRM TO INTERRUPTIBLE SERVICE, OR OTHER SIMILAR FACTORS NOT CAUSED BY THE IMPLEMENTATION OF THIS ARTICLE.

(B)  UTILITIES SHALL HAVE THE DUTY TO MITIGATE STRANDED COSTS, INCLUDING SUCH MEASURES AS RENEGOTIATION OF CONTRACTS, REFINANCING OF DEBT, RETIREMENT OR SALE OF ASSETS, AND SECURITIZATION.

(C)  STRANDED­COST RECOVERY SHALL ONLY BE PERMITTED FOR A FIXED PERIOD OF TIME TO ASSIST UTILITIES WITH THE TRANSITION TO THE RESTRUCTURED, COMPETITIVE MARKET CONTEMPLATED IN THIS ARTICLE.

(II)  Application. A UTILITY MAY REQUEST APPROVAL FOR THE IMPLEMENTATION OF A STRANDED­COST CHARGE BY FILING WITH THE COMMISSION AN APPLICATION THAT COMPLIES WITH THE FOLLOWING PROVISIONS:

(A)  THE APPLICATION SHALL INCLUDE A CALCULATION OF THE UTILITY=S NET STRANDED COSTS, TOGETHER WITH SUCH SUPPORTING DOCUMENTATION AS MAY BE REQUIRED BY THE COMMISSION. SUCH STRANDED COSTS SHALL BE CALCULATED CONSISTENT WITH THE FOLLOWING METHODOLOGIES: FOR DIVESTED ASSETS, THE NET STRANDED COSTS SHALL BE THE DIFFERENCE BETWEEN THE DIVESTED ASSET=S MARKET PRICE AND ITS BOOK VALUE NET OF DEPRECIATION; FOR STRANDED COSTS RELATED TO FACILITIES THAT THE COMPANY STILL OWNS, THE NET STRANDED COSTS SHALL BE BASED UPON THE CAPITAL COSTS OF ALL FACILITIES OWNED BY THE COMPANY IN LIGHT OF CURRENT AND EXPECTED MARKET PRICES.

(B)  THE APPLICATION SHALL INCLUDE A PROPOSED METHODOLOGY TO ALLOCATE COSTS AMONG CUSTOMER CLASSES, A PROPOSED RECOVERY PERIOD, AND A PROPOSED CHARGE DESIGNED TO RECOVER SUCH COSTS EXPEDITIOUSLY BUT CONSISTENT WITH A REASONABLE AND APPROPRIATE BALANCE AMONG THE INTERESTS OF CONSUMERS AND UTILITY INVESTORS AND THE COMPETITIVE GOALS OF THIS ARTICLE. WHILE THE APPROPRIATE LEVEL OF STRANDED COSTS TO BE RECOVERED FROM EACH CLASS OF CUSTOMERS MAY DIFFER, THE CHARGE SHALL NOT VARY BASED UPON A CUSTOMER=S CHOICE OF PROVIDER OF COMPETITIVE ENERGY SERVICES. ANY ENTRY OR EXIT FEES IMPOSED UPON CONSUMERS FOR SWITCHING BETWEEN PROVIDERS OR THE USE OF ANY OTHER STRANDED­COST RECOVERY MECHANISMS THAT IMPEDE COMPETITION SHALL NOT BE AUTHORIZED. THE APPLICATION SHALL PROVIDE THAT A PERSON WHO REDUCES THE PERSON=S OWN RETAIL ELECTRICITY PURCHASES BY OBTAINING ALL OR PART OF THE PERSON=S RETAIL ELECTRICITY NEEDS FROM A DECENTRALIZED COMMUNITY ENERGY SYSTEM SHALL HAVE ITS OBLIGATION TO PAY ANY NET­STRANDED­COST CHARGES REDUCED BY A PERCENTAGE EQUAL TO THE PERCENTAGE OF ITS TOTAL RETAIL ELECTRICITY CONSUMPTION THAT IS SUPPLIED BY THE DECENTRALIZED COMMUNITY ENERGY SYSTEM.

(C)  Implementation of the recovery plan. THE COMMISSION SHALL REVIEW EACH RECOVERY PLAN AND EITHER APPROVE IT OR, IF THE COMMISSION DETERMINES THAT ONE OR MORE ASPECTS OF THE PROPOSED RECOVERY PLAN ARE CONTRARY TO THE REQUIREMENTS OF THIS ARTICLE, OR ARE OTHERWISE UNJUST, UNREASONABLE, OR ANTICOMPETITIVE, THE COMMISSION SHALL DETERMINE THE APPROPRIATE LEVEL OF STRANDED COSTS TO BE RECOVERED, THE APPROPRIATE ALLOCATION AMONG CLASSES OF CUSTOMERS, AND ANY OTHER RELEVANT MATTERS IN LIGHT OF THE REQUIREMENTS SET FORTH IN THIS ARTICLE.

(D)  IN THE EVENT THAT THE DETERMINATION OF STRANDED COSTS REFLECTS A MARKET VALUE IN EXCESS OF THE COSTS, THE COMMISSION SHALL DETERMINE THE MANNER IN WHICH THIS EXCESS SHALL BE CREDITED TO THE BENEFIT OF CUSTOMERS.

(E)  Implementation of customer choice. THE FAILURE TO OBTAIN RESOLUTION OF ISSUES ARISING UNDER THIS SECTION SHALL NOT DELAY THE IMPLEMENTATION OF CUSTOMER CHOICE IN THE MANNER AND BY THE TIME PROVIDED IN THIS ARTICLE.

(g)  Environmental and social programs. (I)  ENVIRONMENTAL AND SOCIAL PROGRAMS REMAIN IMPORTANT COMPONENTS IN RESTRUCTURED, COMPETITIVE RETAIL MARKETS FOR ELECTRIC SERVICES. THE COMMISSION SHALL RELY TO THE EXTENT POSSIBLE ON EXISTING PROGRAMS AND CHARGES TO FULFILL ENVIRONMENTAL AND SOCIAL GOALS SUCH AS LOW­INCOME ASSISTANCE, UNIVERSAL SERVICE, WEATHERIZATION, AND RENEWABLE RESOURCE DEVELOPMENT.

(II)  IF THE COMMISSION DETERMINES THAT SUCH PROGRAMS AND CHARGES ARE NOT ADEQUATE IN A RESTRUCTURED ENVIRONMENT TO PROVIDE FOR LOW­INCOME ASSISTANCE, UNIVERSAL SERVICE, WEATHERIZATION, OR RENEWABLE RESOURCE DEVELOPMENT, THE COMMISSION MAY ESTABLISH SUCH SURCHARGES, NOT TO EXCEED ___ PERCENT AS DETERMINED BY THE GENERAL ASSEMBLY, TO FUND THE INADEQUATELY FUNDED PROGRAMS AS ARE REASONABLE AND APPROPRIATE, IF ANY SUCH CHARGES ARE RECOVERED ON A NONDISCRIMINATORY, NON­BYPASSABLE BASIS.

(III)  ANY FUNDS COLLECTED PURSUANT TO SUBPARAGRAPH (II) OF THIS PARAGRAPH (g) SHALL BE PORTABLE AMONG COMPETITIVE SERVICES PROVIDERS ON A NONDISCRIMINATORY BASIS AT THE DISCRETION OF CUSTOMERS.

(IV)  THE COMMISSION SHALL ADOPT RULES TO IMPLEMENT THE PROVISIONS OF THIS SECTION.

(h)  Existing contracts. ANY CUSTOMER UNDER A SPECIFIC EXISTING CONTRACT WITH A DISTRIBUTION UTILITY FOR THE PROVISION OF DISTRIBUTION SERVICE BUNDLED WITH COMPETITIVE ENERGY SERVICES SHALL HAVE THE RIGHT, UPON THIRTY DAYS' NOTICE, TO CONVERT SUCH BUNDLED CONTRACT TO A CONTRACT FOR UNBUNDLED DISTRIBUTION SERVICE ONLY. SUCH OPTION SHALL BECOME EFFECTIVE ON JULY 1, 2000, AND EXPIRE ON DECEMBER 31, 2000.

40­4.5­104. Restructuring plan. (1)  ON OR BEFORE JANUARY 1, 1999, EACH DISTRIBUTION UTILITY SHALL FILE WITH THE COMMISSION A RESTRUCTURING PLAN TO IMPLEMENT THE PROVISIONS OF THIS ARTICLE. THIS RESTRUCTURING PLAN SHALL INCLUDE:

(a)  A PLAN TO FUNCTIONALLY UNBUNDLE DISTRIBUTION SERVICE FROM TRANSMISSION SERVICE AND FROM COMPETITIVE ENERGY SERVICES IN COMPLIANCE WITH THIS ARTICLE;

(b)  A TARIFF GOVERNING THE PROVISION OF DISTRIBUTION SERVICE AS SET FORTH IN THIS ARTICLE;

(c)  ACCEPTANCE OF AND PROCEDURES FOR IMPLEMENTING THE STANDARDS OF CONDUCT APPLICABLE TO DISTRIBUTION UTILITIES AS SET FORTH IN THIS ARTICLE;

(d)  PROPOSED PROCEDURES FOR THE COMPETITIVE BID PROCESS PROVISIONS OF THIS ARTICLE;

(e)  PROPOSED RECOVERY MECHANISM REGARDING STRANDED­COST RECOVERY.

(2)  THE COMMISSION SHALL APPROVE OR MODIFY THE UTILITIES= RESTRUCTURING PLAN AS SOON AS REASONABLY PRACTICABLE, BUT IN NO EVENT LATER THAN JANUARY 1, 2000.

(3)  THE COMMISSION SHALL HAVE THE POWER TO REQUIRE DIVESTITURE OF FACILITIES OR SERVICES IF IT DETERMINES, AFTER NOTICE AND THE OPPORTUNITY FOR A HEARING, THAT SUCH ACTION IS NECESSARY IN ORDER TO ELIMINATE THE EXERCISE OF MARKET POWER OVER MARKETS FOR ANY COMPETITIVE ENERGY SERVICES AND THAT DIVESTITURE IS THE MOST EFFICIENT MECHANISM AVAILABLE TO ELIMINATE SUCH MARKET POWER AND ACHIEVE THE COMPETITIVE MARKETS ENVISIONED BY THIS ARTICLE.

40­4.5­105. Commission authority. (1)  THE COMMISSION SHALL ESTABLISH JUST AND REASONABLE RATES FOR DISTRIBUTION SERVICE AND SHALL REGULATE THESE SERVICES. THE COMMISSION MAY APPROVE RATES AND CHARGES BASED ON TRADITIONAL METHODS OF REGULATION OR BASED UPON ALTERNATIVE FORMS OF RATEMAKING, INCLUDING BUT NOT LIMITED TO PRICE CAPS OR PERFORMANCE­BASED RATEMAKING.

(2)  THE COMMISSION SHALL ENSURE THAT THE FACILITIES USED BY PUBLIC UTILITIES FOR THE DISTRIBUTION OF ELECTRICITY ARE RELIABLE AND SAFE, THAT THE DEREGULATION OF ELECTRIC SUPPLY 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.

(3)  THE COMMISSION MAY PROMULGATE ANY RULES NECESSARY TO CARRY OUT THE PROVISIONS OF THIS ARTICLE.

(4)  NOTHING IN THIS ARTICLE SHALL BE CONSTRUED TO EXTEND COMMISSION JURISDICTION OVER THE OPERATIONS OF MUNICIPAL UTILITIES WITHIN CORPORATE LIMITS. THE COMMISSION SHALL CONTINUE TO HAVE LIMITED JURISDICTION OVER MUNICIPAL UTILITY OPERATIONS OUTSIDE OF MUNICIPAL CORPORATE LIMITS IN ACCORDANCE WITH ARTICLE 3.5 OF THIS TITLE.

40­4.5­106.  Exemption. (1)  BY JULY 1, 2002, A COOPERATIVE ELECTRIC ASSOCIATION OR A MUNICIPAL UTILITY MAY ELECT NOT TO PROVIDE ITS CUSTOMERS WITH THE OPTION TO CHOOSE AN ELECTRIC SUPPLIER. SUCH ELECTION SHALL BE MADE BY THE LOCAL GOVERNING BODY, AND WRITTEN NOTICE OF THE ELECTION SHALL BE GIVEN TO ALL CUSTOMERS OF THE UTILITY.

(2)  A COOPERATIVE ELECTRIC ASSOCIATION OR A MUNICIPAL UTILITY THAT DOES NOT ELECT TO PROVIDE CUSTOMER CHOICE SHALL BE PROHIBITED FROM SELLING ELECTRIC SUPPLY, EITHER DIRECTLY OR INDIRECTLY THROUGH AN AFFILIATE, TO CUSTOMERS OUTSIDE OF AREAS CERTIFICATED TO THE UTILITY BY THE COMMISSION OR, IN THE CASE OF THE MUNICIPAL UTILITY, OUTSIDE OF THE INCORPORATED LIMITS OF THE MUNICIPAL UTILITY AND ANY AREAS CERTIFICATED BY THE COMMISSION OUTSIDE OF MUNICIPAL CORPORATE LIMITS.

(3)  A COOPERATIVE ELECTRIC ASSOCIATION OR MUNICIPAL UTILITY THAT INITIALLY ELECTS NOT TO OFFER CUSTOMER CHOICE MAY ELECT AT A LATER TIME TO PROVIDE CUSTOMER CHOICE AT AN IMPLEMENTATION DATE SET BY THE LOCAL GOVERNING BODY. UPON THE IMPLEMENTATION DATE SET BY THE LOCAL GOVERNING BODY, ALL PROVISIONS OF THIS ARTICLE SHALL PERTAIN TO THE CUSTOMER CHOICE PROVIDED BY THE UTILITY.

SECTION 2.  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.