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Second Regular Session

Sixty-first General Assembly

LLS NO. 98­0645.01 DHG HOUSE BILL 98­1285

STATE OF COLORADO

BY REPRESENTATIVES Veiga, Gordon, and Reeser.

BUSINESS AFFAIRS & LABOR

A BILL FOR AN ACT

CONCERNING THE IMPOSITION OF CONDITIONS UPON THE OPENING OF THE RETAIL ELECTRICITY MARKET TO COMPETITION.

Bill Summary

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

Declares that, if competition in retail electricity supply occurs, it should occur only after there are in place certain policies, programs, and procedures that will protect consumers and the environment, foster fuel diversity, protect Colorado's work force, and avoid reduction in revenues to local governments. States that this legislation, in and of itself, does not authorize retail electricity competition in Colorado.

Requires that each Colorado utility for which retail electricity competition is implemented establish a non­bypassable public benefits charge to collect revenues to be used to pay for, among other things, low income energy assistance, emergency energy intervention, and home weatherization; the development and commercialization of Colorado renewable energy resources; and the improvement of electric energy efficiency generally. No charge shall be collected or revenues from the charge spent absent approval of the Colorado public utilities commission (commission) or other applicable local governing body. The charge shall be established to raise revenues that are not less than 3% of the gross annual utility electric revenues in 1997. Non­bypassable charges, in addition to this charge, may also be set to recover the cost of certain air quality improvement investments.

Establishes targets for the retail sale of electricity in Colorado by renewable energy resources constructed after the date of enactment, beginning with 1% in 2001 and increasing to 12% in 2015. Establishes that the preferred means by which these targets are met are the competitive market and the use of public benefits revenues, but establishes a portfolio standard to apply to each seller of electricity at retail in Colorado if these means do not achieve sufficient progress toward meeting such targets.

Establishes a goal of improving air quality as it is degraded by emission of sulphur dioxide from coal­fired power generation units in Colorado through a 70% SO2 removal requirement on all such units, taken as a whole within regional airsheds, selling energy to utilities for which retail electricity competition has been implemented. Establishes a cap and trade program within regional airsheds for sulphur dioxide emissions from coal­fired power generation units in Colorado.

Requires electricity suppliers at retail in Colorado to disclose information to their customers regarding fuels used in power generation, the amount of electricity supplied through highly efficient cogeneration, and, to the degree feasible, emissions from power generation resources such sellers use.

Establishes policies and programs to protect customers in the event retail electricity is implemented, including a policy that rates under retail electricity competition for residential and small commercial customers should be lower than those that would be in place under regulation. The programs established include licensing by the commission of all those who sell electricity at retail in Colorado; standard­offer service and rates; prohibition against unauthorized switching of power suppliers and execution of contracts that bind a consumer to service unless the consumer opts out of such service; requirements of fair and reasonable billing practices; timely access for consumers to price and other information; imposition of the requirement that service be reliable on each power supplier; and provisions to assure that no customer who can pay for electricity will be without power.

Authorizes municipalities not served by a municipal electric utility to aggregate the demands of its citizens so that they may gain access to low­cost and environmentally beneficial power supplies without subjecting these municipalities to regulation as utilities.

Establishes that utilities may recover only the net stranded costs they have incurred in meeting service demands under regulation that they cannot mitigate by sale of assets or otherwise. Recovery of net stranded costs is allowed only on a case­by­case basis and only after a hearing before the commission or local governing body in which the burden to show that recovery is justified falls on the utility. Reduces the obligation of any person purchasing all or a portion of their retail electricity from decentralized community energy systems to pay for net stranded costs.

Requires that utilities be functionally separated into at least 3 distinct business units: electricity supply; transmission and distribution; and energy­related services. Requires the bills of utilities on whose systems retail electricity competition has been implemented to separately charge for different services on bills they render. Establishes a state policy in favor of legal separation of the ownership of electricity supply assets from regulated transmission and distribution assets, but allows this policy to be overcome on a case­by­case basis.

Establishes that decentralized community energy systems are not utilities under Colorado law, but allows such systems to sell to electricity suppliers for resale.

Requires the Colorado department of labor and employment to conduct a study and prepare a report on the impact of the implementation of retail electricity competition on certain interests of the Colorado work force. Requires the Colorado state treasurer, after consultation with Colorado local governments, to conduct a study and prepare a report on the impact of retail electricity competition on the flow of franchise fees and tax revenues to local governments. Requires the commission and local governing bodies to consider these reports in the determination of the terms and conditions to attend the implementation of retail electricity competition for a utility.

Requires the commission to conduct 2 investigations, one into ways in which system reliability may be preserved under retail electricity competition, the other into whether market power is likely to exist after retail competition in Colorado or portions of Colorado.

Specifies that this bill takes effect concurrently with the first law of this state authorizing the opening of competition in the retail electricity market.

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

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

PART 2

CONDITIONS TO ATTEND THE INTRODUCTION

OF RETAIL ELECTRICITY COMPETITION

40­4­201.  Legislative declaration ­ purpose of part. (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, IF SUCH COMPETITION IS NOT IMPLEMENTED WITH CARE, IT HAS THE POTENTIAL TO HARM ELECTRICITY CUSTOMERS, IMPEDE THE SUSTAINED AND ORDERLY DEVELOPMENT OF ENERGY EFFICIENCY AND RENEWABLE ENERGY RESOURCES TO MEET COLORADO'S ELECTRIC LOADS, DEGRADE THE STATE'S ENVIRONMENT, THREATEN THE FLOW OF TAX REVENUES AND FRANCHISE FEES TO LOCAL GOVERNMENTS, AND CAUSE DISLOCATION OF THAT PORTION OF COLORADO'S WORK FORCE THAT IS ENGAGED IN THE PRODUCTION AND SUPPLY OF ELECTRICITY.

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

(I)  ASSURES THAT THE BENEFITS OF RETAIL ELECTRICITY COMPETITION IN COLORADO FLOW TO ALL CLASSES OF ELECTRICITY CUSTOMERS;

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

(III)  ENHANCES COLORADO'S ENVIRONMENTAL QUALITY;

(IV)  PROTECTS COLORADO RETAIL ELECTRICITY CUSTOMERS AGAINST THE POTENTIAL ADVERSE EFFECTS OF RETAIL ELECTRICITY COMPETITION;

(V)  AVOIDS THREATENING THE FLOW OF REVENUES PRESENTLY ATTRIBUTABLE TO FRANCHISE FEES AND TAXES TO LOCAL GOVERNMENTS IN COLORADO; AND

(VI)  ADDRESSES THE IMPACT OF RETAIL ELECTRICITY COMPETITION ON COLORADO'S WORK FORCE.

(2)  THE PURPOSE OF THIS PART 2 IS TO ESTABLISH CERTAIN CONDITIONS AND PROCEDURES TO PROTECT AND ENHANCE THE INTERESTS OF COLORADO'S RETAIL ELECTRICITY CUSTOMERS, ITS ENVIRONMENT, ITS LOCAL GOVERNMENTS, AND ITS WORK FORCE IN THE EVENT THAT RETAIL ELECTRICITY COMPETITION IS OTHERWISE IMPLEMENTED IN COLORADO.

(3)  THIS PART 2 DOES NOT AUTHORIZE THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION ON ANY UTILITY SYSTEM IN COLORADO.

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

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

(2)  "COGENERATION FACILITY" MEANS NEW OR EXISTING EQUIPMENT TO PRODUCE ELECTRICITY THAT, IN ADDITION, HAS BEEN CONSTRUCTED OR RETROFITTED SO AS TO PRODUCE USEFUL THERMAL ENERGY, INCLUDING, BUT NOT LIMITED TO, HEAT OR STEAM, FOR INDUSTRIAL, COMMERCIAL, HEATING, OR COOLING PURPOSES, THROUGH THE SEQUENTIAL USE OF ENERGY.

(3)  "COMMISSION" MEANS THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO.

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

(5)  "CUSTOMER" OR "CONSUMER" MEANS A RETAIL ELECTRICITY CUSTOMER OR CONSUMER IN COLORADO.

(6)  "DECENTRALIZED COMMUNITY ENERGY SYSTEM" MEANS A SINGLE END­USER OF ELECTRICITY OR A SINGLE END­USER OF ELECTRICITY AND UP TO TWENTY ADDITIONAL CONTIGUOUS END­USERS OF ELECTRICITY, EACH OF WHICH MEETS ALL OR PART OF ITS END­USE ELECTRICITY NEEDS FROM A COMMON RENEWABLE ENERGY FACILITY, COMMON FUEL CELL FACILITY, OR A COMMON HIGHLY EFFICIENT COGENERATION FACILITY LOCATED ON THE PROPERTY OF ONE OR MORE OF SUCH END­USERS.

(7)  "DISTRIBUTION FACILITIES" MEANS THOSE FACILITIES BY AND THROUGH WHICH ELECTRICITY IS RECEIVED FROM A TRANSMISSION SERVICE PROVIDER AND DISTRIBUTED TO THE RETAIL CUSTOMER.

(8)  "DISTRIBUTION SERVICE" MEANS THE SERVICE PROVIDED BY A PUBLIC UTILITY TO DELIVER AND ACCOUNT FOR ELECTRICITY SUPPLY FROM THE TRANSMISSION SYSTEM TO THE CUSTOMER.

(9)  "ELECTRIC ENERGY EFFICIENCY" MEANS THE RATE AT WHICH ELECTRICITY IS CONSUMED TO PROVIDE A GIVEN LEVEL OF ELECTRIC ENERGY SERVICES, SUCH AS HEAT, LIGHT, COOLING, MECHANICAL ENERGY, AND OTHER END­USES OF ELECTRICITY.

(10)  "ELECTRIC SUPPLIER" OR "ELECTRICITY SELLER" MEANS ANY PERSON, INCLUDING A PUBLIC UTILITY, OFFERING TO SELL ELECTRICITY TO RETAIL CUSTOMERS IN COLORADO.

(11)  "ELECTRIC SUPPLY" OR "ELECTRICITY SUPPLY" MEANS THE COMMODITY OF ELECTRICITY.

(12)  "ENERGY­RELATED SERVICES" MEANS SERVICES OTHER THAN ELECTRIC SUPPLY, TRANSMISSION OR DISTRIBUTION SERVICES, OR ANCILLARY SERVICES.

(13)  "FUEL CELL" MEANS A FACILITY THAT GENERATES ELECTRICITY, WITHOUT COMBUSTION OR MOTION, BY MEANS OF THE CHEMICAL REACTION OF HYDROGEN WITH OXYGEN.

(14)  "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 NOT LESS THAN FIFTY PERCENT OF THE ANNUAL TOTAL ENERGY INPUT OF FUEL TO THE FACILITY.

(15)  "INCUMBENT PROVIDER" MEANS THE HOLDER OF THE MONOPOLY FRANCHISE TO SUPPLY ELECTRICITY AND DISTRIBUTION SERVICES ON THE DATE OF ENACTMENT OF LEGISLATION TO IMPLEMENT RETAIL ELECTRICITY COMPETITION IN COLORADO OR THE SUCCESSOR­OWNER, IF ANY, OF THE DISTRIBUTION FACILITIES FROM WHICH SUCH DISTRIBUTION SERVICES ARE PROVIDED.

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

(17)  "MARKET POWER" MEANS THE ABILITY TO ESTABLISH OR UNDULY INFLUENCE THE PRICE OF ELECTRICITY THROUGH CONCENTRATION OF OWNERSHIP OF ELECTRICITY SUPPLY RESOURCES IN COLORADO OR A PORTION OF COLORADO UNDER CONDITIONS OF TRANSMISSION­CAPACITY CONSTRAINT.

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

(19)  "NET STRANDED COSTS" MEANS THE NET ACCOUNTING RESULT THAT OCCURS WHEN ONE SET OF COSTS OR PORTION OF SUCH COSTS INCURRED BY A UTILITY TO SERVE ITS RETAIL ELECTRICITY LOADS UNDER REGULATION BECOMES ECONOMIC OR BELOW­MARKET AS A RESULT OF THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION IN COLORADO AND IS SUBTRACTED FROM OR NETTED AGAINST THOSE COSTS OR PORTION OF SUCH COSTS INCURRED BY THE UTILITY TO SERVE ITS RETAIL LOADS UNDER REGULATION THAT BECOME UNECONOMIC OR ABOVE­MARKET AS A RESULT OF THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION IN COLORADO.

(20)  "NON­BYPASSABLE CHARGE" MEANS A CHARGE THAT CANNOT BE AVOIDED BY A CUSTOMER, WHETHER OR NOT IT REMAINS AN ELECTRIC SUPPLY CUSTOMER OF THE LOCAL UTILITY, BY VIRTUE OF THE ASSESSMENT OF SUCH CHARGE AS A CONDITION OF THE USE OF TRANSMISSION OR DISTRIBUTION FACILITIES OF SUCH UTILITY.

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

(22)  "PUBLIC UTILITY", "ELECTRIC UTILITY", OR "UTILITY" HAVE THE SAME MEANING AS "PUBLIC UTILITY" AS DEFINED IN SECTION 40­1­103 AND SHALL INCLUDE COOPERATIVE ELECTRIC ASSOCIATIONS AND MUNICIPAL UTILITIES.

(23)  "RENEWABLE ENERGY" MEANS ELECTRICITY GENERATED BY A TECHNOLOGY THAT USES ENERGY INPUTS TO PRODUCE ELECTRICITY THAT ARE VIRTUALLY INEXHAUSTIBLE. FOR PURPOSES OF THIS ARTICLE THE TERM IS LIMITED TO THOSE TECHNOLOGIES THAT ARE RELATIVELY ENVIRONMENTALLY BENIGN AND ARE NOT FULLY DEVELOPED. THE TERM INCLUDES ELECTRICITY GENERATED BY WIND ENERGY TECHNOLOGIES; SOLAR PHOTOVOLTAIC AND SOLAR THERMAL TECHNOLOGIES; GEOTHERMAL TECHNOLOGIES; TECHNOLOGIES BASED ON LANDFILL GAS AND BIOMASS SOURCES, INCLUDING AGRICULTURAL AND FOOD WASTES; AND TECHNOLOGIES THAT HARNESS THE INCREMENTAL HYDROELECTRIC POTENTIAL OF WATER CONVEYANCE STRUCTURES IN EXISTENCE AS OF JANUARY 1, 1998, IF SUCH INCREMENTAL HYDROELECTRIC DEVELOPMENT DOES NOT RESULT IN THE FURTHER DIVERSION OF WATER FROM ANY RIVER, STREAM, OR OTHER WATERWAY IN COLORADO. THE TERM DOES NOT INCLUDE THE DEVELOPED CAPACITY OF ANY EXISTING OR NEW CONVENTIONAL OR PUMPED STORAGE HYDROELECTRIC FACILITY.

(24)  "RETAIL ELECTRICITY COMPETITION" MEANS COMPETITION TO SERVE ALL OR A PORTION OF THE RETAIL LOADS OF AN ELECTRIC UTILITY.

(25)  "SEQUENTIAL USE OF ENERGY" MEANS THE USE OF REJECT HEAT FROM AN ELECTRIC POWER PRODUCTION PROCESS IN A THERMAL APPLICATION OR PROCESS, OR THE USE OF REJECT HEAT FROM A THERMAL APPLICATION OR PROCESS IN AN ELECTRIC POWER PRODUCTION PROCESS.

(26)  "STRANDED COST" MEANS THOSE COSTS INCURRED BY A UTILITY TO SERVE ITS RETAIL LOAD UNDER REGULATION THAT BECOME UNECONOMIC OR ABOVE­MARKET AS A RESULT OF THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION IN COLORADO.

(27)  "TOTAL ENERGY INPUT" MEANS THE TOTAL ENERGY OF ALL FORMS SUPPLIED TO A COGENERATION FACILITY FROM EXTERNAL SOURCES.

(28)  "TOTAL ENERGY OUTPUT" MEANS, WITH RESPECT TO A COGENERATION FACILITY IN WHICH THE ENERGY INPUT TO THE FACILITY IS FIRST USED TO PRODUCE USEFUL POWER OUTPUT, THE SUM OF THE USEFUL POWER OUTPUT AND THE USEFUL THERMAL ENERGY OUTPUT.

(29)  "TRANSMISSION SERVICE" MEANS THE TRANSPORT OF ELECTRICITY SUPPLY IN BULK AT HIGH VOLTAGES.

(30)  "USEFUL POWER OUTPUT" OF A COGENERATION FACILITY MEANS THE ELECTRIC OR MECHANICAL ENERGY MADE AVAILABLE FOR USE, EXCLUSIVE OF ANY SUCH ENERGY USED IN THE POWER PRODUCTION PROCESS.

(31)  "USEFUL THERMAL ENERGY OUTPUT" OF A COGENERATION FACILITY MEANS THE THERMAL ENERGY MADE AVAILABLE TO AN INDUSTRIAL OR COMMERCIAL PROCESS OR THE THERMAL ENERGY USED IN A HEATING OR COOLING APPLICATION.

40­4­203.  Public benefits charges. (1)  EACH INCUMBENT PROVIDER FOR WHICH RETAIL ELECTRICITY COMPETITION IS IMPLEMENTED SHALL COLLECT FROM ITS CUSTOMERS A NON­BYPASSABLE PUBLIC BENEFITS CHARGE, AND THE REVENUES COLLECTED PURSUANT TO SUCH CHARGES SHALL BE SPENT ACCORDING TO THE PROVISIONS OF THIS SECTION.

(2)  NEITHER THE COMMISSION NOR THE LOCAL GOVERNING BODY OF ANY UTILITY MAY APPROVE THE IMPLEMENTATION OF RETAIL COMPETITION FOR ANY INCUMBENT PROVIDER UNLESS IT CONTAINS A FEASIBLE MECHANISM FOR THE COLLECTION OF A NON­BYPASSABLE PUBLIC BENEFITS CHARGE FROM ITS CUSTOMERS.

(3)  THE CHARGE REQUIRED TO BE IMPLEMENTED BY THIS SECTION SHALL BE DESIGNED TO RECOVER REVENUES NO LESS THAN THREE PERCENT OF GROSS ANNUAL REVENUES OF THE INCUMBENT PROVIDER FOR THE YEAR 1997.

(4)  REVENUES FROM THE CHARGE SHALL BE SPENT ONLY ON:

(a)  LOW­INCOME ENERGY ASSISTANCE, EMERGENCY ENERGY INTERVENTION, AND HOME WEATHERIZATION PROGRAMS IN A MANNER THAT IS CONSISTENT WITH THE RECOMMENDATIONS OF THE COLORADO ENERGY ASSISTANCE REFORM TASK FORCE;

(b)  THE RESEARCH, DEVELOPMENT, DEMONSTRATION, AND COMMERCIALIZATION OF COLORADO RENEWABLE ENERGY RESOURCES IN A MANNER THAT IS CONSISTENT WITH THE RECOMMENDATIONS OF THE COLORADO RENEWABLE ENERGY TASK FORCE;

(c)  THE IMPROVEMENT OF ELECTRIC ENERGY EFFICIENCY IN COLORADO BEYOND LOW­INCOME HOME WEATHERIZATION;

(d)  THE EDUCATION OF ELECTRICITY CUSTOMERS IN COLORADO REGARDING THE CHOICES AVAILABLE IN A COMPETITIVE RETAIL ELECTRICITY MARKET;

(e)  SUBJECT TO PARAGRAPH (d) OF SUBSECTION (6) OF THIS SECTION, THE IMPLEMENTATION THROUGH COMPETITIVE BIDDING OF NEW DECENTRALIZED COMMUNITY ENERGY SYSTEMS ON THE PROPERTY OF, AND FOR THE BENEFIT OF, FEDERAL, STATE, AND LOCAL GOVERNMENT IN COLORADO;

(f)  REIMBURSEMENT OF THE UTILITY FOR THE REASONABLE COSTS IT HAS INCURRED IN IMPLEMENTING THIS SECTION; AND

(g)  REIMBURSEMENT OF THE COMMISSION AND LOCAL GOVERNING BODIES FOR THE COSTS THEY HAVE INCURRED IN IMPLEMENTING THIS SECTION.

(5)  EACH INCUMBENT PROVIDER SHALL FILE A PLAN WITH THE COMMISSION OR LOCAL GOVERNING BODY FOR THE EXPENDITURE OF REVENUES FROM THE CHARGE REQUIRED BY THIS SECTION. EACH SUCH PLAN, AND THE COMMISSION'S AND LOCAL GOVERNING BODY'S REVIEW OF SUCH PLANS, SHALL COMPLY WITH ALL OF THE FOLLOWING PROVISIONS:

(a)  SUCH PLANS SHALL BE FILED ON AN ANNUAL BASIS BY THE BEGINNING OF EACH CALENDAR YEAR TO COVER EXPENDITURES IN THAT YEAR;

(b)  EACH SUCH PLAN SHALL SET FORTH HOW THE INCUMBENT PROVIDER INTENDS TO SPEND THE REVENUES ANTICIPATED TO BE RAISED BY SUCH CHARGE IN THAT YEAR;

(c)  EACH SUCH PLAN SHALL ALSO INCLUDE PROVISIONS TO INDICATE THE MANNER IN WHICH THE INCUMBENT PROVIDER INTENDS TO MANAGE EXPENDITURE OF THE REVENUES RAISED BY SUCH CHARGE CONSISTENT WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES;

(d)  THE COMMISSION OR LOCAL GOVERNING BODY SHALL REVIEW SUCH PLANS AND, WITHIN SIXTY DAYS, APPROVE SUCH PLAN UNLESS IT IS INCONSISTENT WITH THE PROVISIONS OF THIS SECTION. IF THE COMMISSION OR LOCAL GOVERNING BODY REJECTS A PLAN, IT SHALL SPECIFY THE REASONS IN WRITING AND, IF PRACTICAL, IDENTIFY WAYS IN WHICH THE INCUMBENT PROVIDER MAY OVERCOME ANY DEFICIENCIES IN ITS PLAN.

(e)  EACH INCUMBENT PROVIDER SHALL PREPARE AND SUBMIT TO THE COMMISSION OR TO THE LOCAL GOVERNING BODY AN ANNUAL SUMMARY REPORT ON THE ACTIVITIES RELATING TO ALL PUBLIC BENEFITS PROGRAMS ESTABLISHED PURSUANT TO THIS SECTION.

(6)  REVENUES FROM THE CHARGE SHALL BE SPENT IN COMPLIANCE WITH THE FOLLOWING PROVISIONS:

(a)  SUCH REVENUES SHALL BE SPENT IN A MANNER THAT WILL PROVIDE PRODUCTS AND SERVICES UNLIKELY TO BE PROVIDED BY COMPETITIVE MARKETS OR WILL PROVIDE SUCH PRODUCTS OR SERVICES MATERIALLY SOONER THAN THEY WOULD BE PROVIDED BY SUCH MARKETS.

(b)  REVENUES FROM THE CHARGE SPENT FOR THE PURPOSES SET FORTH IN PARAGRAPHS (b) TO (e) OF SUBSECTION (4) OF THIS SECTION SHALL BE SPENT ONLY THROUGH COMPETITIVE BIDDING.

(c)  NOT LESS THAN FORTY PERCENT OF THE REVENUES COLLECTED PURSUANT TO THIS SECTION SHALL BE SPENT FOR THE PURPOSES SET FORTH IN PARAGRAPH (a) OF SUBSECTION (4) OF THIS SECTION.

(d)  DURING THE FIRST THREE YEARS OF IMPLEMENTATION OF THE CHARGE, NO REVENUES FROM THE CHARGE SHALL BE SPENT FOR THE PURPOSE SET FORTH IN PARAGRAPH (e) OF SUBSECTION (4) OF THIS SECTION. THEREAFTER, SUCH REVENUES SHALL ONLY BE SPENT FOR SUCH PURPOSE UPON A DETERMINATION BY THE GENERAL ASSEMBLY THAT ATTAINMENT OF THE OBJECTIVE OF DEVELOPING NEW DECENTRALIZED COMMUNITY ENERGY SYSTEMS FOR GOVERNMENTAL ENTITIES REQUIRES SUCH EXPENDITURE.

(7)  A UTILITY MAY ALSO RECOVER THE REASONABLE COSTS OF REDUCING EMISSIONS FROM COAL­FIRED POWER UNITS, AS REQUIRED IN SECTION 40­4­205, THROUGH A NON­BYPASSABLE PUBLIC BENEFITS CHARGE; EXCEPT THAT, ANY SUCH RECOVERY SHALL BE THROUGH A CHARGE IN ADDITION TO THE MINIMUM CHARGE ESTABLISHED IN SUBSECTION (3) OF THIS SECTION.

(8)  AT THE END OF THE FIFTH YEAR AFTER THE DATE ON WHICH RETAIL ELECTRICITY COMPETITION IS DIRECTED OR AUTHORIZED TO BE IMPLEMENTED IN COLORADO, THE COMMISSION SHALL SUBMIT A REPORT TO THE GENERAL ASSEMBLY ON THE IMPLEMENTATION OF THIS SECTION. THE REPORT SHALL DESCRIBE THE COSTS AND BENEFITS TO THE CITIZENS OF COLORADO OF COLLECTING REVENUES AND SPENDING THEM ACCORDING TO THIS SECTION. IT IS THE EXPECTATION OF THE GENERAL ASSEMBLY THAT THIS REPORT SHALL SERVE AS THE BASIS OF A REVIEW OF THE PROGRAMS CREATED BY THIS SECTION AS WELL AS A DETERMINATION OF WHETHER ALL OR A PORTION OF THE REQUIREMENTS OF THIS SECTION SHOULD EXPIRE.

40­4­204.  Minimum renewable energy targets and means by which they are met. (1)  THERE ARE HEREBY ESTABLISHED THE FOLLOWING MINIMUM TARGETS FOR THE PERCENTAGE OF ELECTRIC ENERGY SOLD AT RETAIL IN COLORADO FROM RENEWABLE ENERGY RESOURCES CONSTRUCTED AFTER THE EFFECTIVE DATE OF THIS PART 2 AS SPECIFIED IN SECTION 40­4­215:

(a)  BY JANUARY 1, 2001: ONE PERCENT;

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

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

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

(2) (a)  THE COMMISSION SHALL PREPARE REPORTS TO THE GENERAL ASSEMBLY ON THE TARGETS ESTABLISHED FOR 2005, 2010, AND 2015. THE REPORTS SHALL DESCRIBE THE PROGRESS MADE IN MEETING SUCH TARGETS AS WELL AS THE ECONOMIC AND ENVIRONMENTAL BENEFITS AND COSTS TO THE STATE OF COLORADO IN MEETING SUCH TARGETS. THE REPORT SHALL ALSO CONTAIN THE COMMISSION'S FINDING ABOUT WHETHER REASONABLE PROGRESS IS BEING MADE TOWARD THE ACHIEVEMENT OF THE TARGETS. THE REPORTS ON THE TARGETS SHALL BE COMPLETED AS FOLLOWS:

(I)  FOR THE TARGET ESTABLISHED FOR 2005, THE REPORT SHALL BE COMPLETED BY NO LATER THAN JULY 1, 2003;

(II)  FOR THE TARGET ESTABLISHED FOR 2010, THE REPORT SHALL BE COMPLETED BY NO LATER JULY 1, 2008; AND

(III)  FOR THE TARGET ESTABLISHED FOR 2015, THE REPORT SHALL BE COMPLETED BY NO LATER THAN JULY 1, 2013.

(b)  THE COMMISSION SHALL TAKE PUBLIC COMMENT ON THE PRINCIPAL ISSUES ADDRESSED BY THE REPORTS FOR THE PURPOSE OF INFORMING THE COMMISSION'S FINDINGS AND CONCLUSIONS IN THE REPORTS.

(3)  TO ENABLE THE COMMISSION TO DEVELOP THE REPORTS REQUIRED BY SUBSECTION (2) OF THIS SECTION, EACH ELECTRICITY SUPPLIER IN COLORADO SHALL ANNUALLY PROVIDE THE COMMISSION, IN A FORMAT AND BY A TIME CERTAIN TO BE PRESCRIBED BY THE COMMISSION PURSUANT TO RULES PROMULGATED UNDER SUBSECTION (7) OF THIS SECTION:

(a)  THE PERCENTAGE OF ELECTRICITY IT HAS SOLD IN COLORADO FOR THE PRIOR YEAR THAT IS COMPRISED OF ENERGY GENERATED FROM RENEWABLE ENERGY RESOURCES; AND

(b)  A GENERAL DESCRIPTION OF ITS PLANS TO PROVIDE ELECTRICITY FROM RENEWABLE RESOURCES UP TO AND BEYOND THE NEXT TARGET DATE.

(4)  THE MEANS BY WHICH THE GENERAL ASSEMBLY EXPECTS THAT THE MINIMUM TARGETS ESTABLISHED IN SUBSECTION (1) OF THIS SECTION WILL BE ATTAINED IS THROUGH A COMBINATION OF THE USE OF REVENUES RAISED THROUGH PUBLIC BENEFITS CHARGES, AS ESTABLISHED IN SECTION 40­4­203, AND THE COMPETITIVE MARKET. HOWEVER, IF THE COMMISSION, IN ANY OF ITS REPORTS FILED PURSUANT TO THE PROVISIONS OF SUBSECTION (2) OF THIS SECTION, FINDS THAT THESE MEANS ARE NOT MAKING SUFFICIENT PROGRESS TOWARD ACHIEVING THE TARGET THAT IS THE SUBJECT OF ANY SUCH REPORT, THE TARGET, WITHOUT FURTHER ACTION, SHALL WITHIN SIXTY DAYS OF SUCH FINDING BECOME A PORTFOLIO STANDARD THAT APPLIES TO ALL ELECTRICITY SUPPLIERS IN COLORADO ON A PROSPECTIVE BASIS. PURSUANT TO SUCH PORTFOLIO STANDARD, THE ELECTRICITY SOLD AT RETAIL IN COLORADO BY EACH SUCH SUPPLIER SHALL CONTAIN MINIMUM PERCENTAGES OF ELECTRICITY GENERATED FROM RENEWABLE ENERGY RESOURCES ACCORDING TO THE SCHEDULE OF PERCENTAGES SET FORTH IN SUBSECTION (1) OF THIS SECTION.

(5)  IN THE EVENT THAT A TARGET BECOMES A PORTFOLIO STANDARD PURSUANT TO THIS SECTION, THE FOLLOWING PROVISIONS SHALL APPLY:

(a)  THE PORTFOLIO STANDARD MAY BE MET THROUGH THE ACQUISITION OF COLORADO OR FEDERAL RENEWABLE ENERGY CREDITS, ISSUED PURSUANT TO FEDERAL LAW, FROM OTHERS WHO CONSTRUCT, OWN, OR OWN THE RIGHT TO SELL THE OUTPUT OF, RENEWABLE ENERGY RESOURCES THAT ARE CONSTRUCTED AFTER THE EFFECTIVE DATE OF THIS PART 2 AS SPECIFIED IN SECTION 40­4­215.

(b)  ANY COLORADO CREDITS ACQUIRED PURSUANT TO PARAGRAPH (a) OF THIS SUBSECTION (5) SHALL BE DESIGNED TO BE FREELY TRADEABLE AS WELL AS TO ASSURE THAT THE PORTFOLIO STANDARD IS MET.

(c)  EACH ELECTRICITY SUPPLIER 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.

(d)  IF AN ELECTRICITY SUPPLIER FAILS TO MEET A PORTFOLIO STANDARD ESTABLISHED PURSUANT TO THIS SECTION, THE COMMISSION MAY IMPOSE A PENALTY ON THAT SELLER OF UP TO TEN CENTS PER KILOWATT­HOUR. REVENUES FROM ANY SUCH PENALTY SHALL BE REMITTED TO THE COMMISSION TO COVER ITS COSTS OF IMPLEMENTING THIS SECTION. IF ANY REVENUES REMAIN AFTER THE PAYMENT OF COSTS, SUCH REVENUES SHALL BE TRANSFERRED TO THE ENTITIES ADMINISTERING THE PROGRAMS DEVELOPED PURSUANT TO SECTION 40­4­203 (4) (b).

(e)  THE REQUIREMENTS OF THIS SECTION SHALL DETERMINE THE PERCENTAGE OF THE POWER SUPPLY PORTFOLIO OF EACH ELECTRICITY SUPPLIER IN COLORADO THAT MUST BE COMPRISED OF RENEWABLE ELECTRIC ENERGY GENERATED FROM CAPACITY CONSTRUCTED AFTER THE EFFECTIVE DATE OF THIS PART 2 AS SPECIFIED IN SECTION 40­4­215. IF A FEDERAL OR REGIONAL ENERGY PORTFOLIO STANDARD IS IMPLEMENTED, ELECTRICITY SELLERS IN COLORADO MAY APPLY ACTIONS TAKEN TO COMPLY WITH SUCH OTHER STANDARD TOWARD MEETING THE REQUIREMENTS OF THIS SECTION.

(6)  NOTHING IN THIS SECTION SHALL BE CONSTRUED TO REQUIRE AN ELECTRICITY SUPPLIER TO CONSTRUCT OR OWN RENEWABLE ENERGY GENERATION FACILITIES.

(7)  THE COMMISSION SHALL ADOPT RULES TO IMPLEMENT THIS SECTION WITHIN ONE YEAR AFTER THE EFFECTIVE DATE OF THIS PART 2 AS SPECIFIED IN SECTION 40­4­215.

40­4­205.  Protection and improvement of air quality. (1)  NEITHER THE COMMISSION NOR THE LOCAL GOVERNING BODY OF ANY UTILITY OWNING, OR HOLDING A CONTRACT TO PURCHASE ELECTRICITY FROM, A COAL­FIRED ELECTRIC GENERATION UNIT LOCATED IN COLORADO MAY APPROVE THE IMPLEMENTATION OF RETAIL COMPETITION FOR ANY SUCH UTILITY UNLESS IT CONTAINS A LEGALLY ENFORCEABLE PLAN TO CONTROL THE EMISSIONS OF SULPHUR DIOXIDE FROM SUCH UNIT IN ACCORDANCE WITH THE REQUIREMENTS OF THIS SECTION.

(2)  THE PLAN REFERENCED IN SUBSECTION (1) OF THIS SECTION SHALL REQUIRE THE UTILITY TO INSTALL, OR PARTICIPATE IN THE INSTALLATION OF, CONTINUOUS EMISSIONS CONTROL TECHNOLOGIES, ADOPT OPERATIONAL CHANGES, OR TAKE OTHER EQUALLY EFFECTIVE MEASURES TO ENSURE THAT SULPHUR DIOXIDE EMISSIONS FROM UNITS LOCATED IN COLORADO, WHEN CONSIDERED AS A WHOLE WITHIN REGIONAL AIRSHEDS AS DEFINED BY THE AIR POLLUTION CONTROL DIVISION IN THE DIVISION OF ADMINISTRATION OF THE COLORADO DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT, ARE AT LEAST SEVENTY PERCENT LESS THAN THOSE EMISSIONS THAT WOULD OCCUR IF COAL WERE BURNED AT SUCH UNITS WITHOUT ANY EMISSIONS CONTROL FOR SULPHUR DIOXIDE. SUCH PLAN SHALL REQUIRE SUCH REDUCTION OF EMISSIONS BY NO LATER THAN FIVE YEARS AFTER THE DATE OF APPROVAL BY THE COMMISSION OR LOCAL GOVERNING BODY OF IMPLEMENTATION OF RETAIL COMPETITION.

(3)  IT IS THE POLICY OF THE STATE OF COLORADO TO ENCOURAGE THE PROTECTION AND IMPROVEMENT OF AIR QUALITY AS IT IS AFFECTED BY UTILITIES IMPLEMENTING RETAIL ELECTRICITY COMPETITION THROUGH VOLUNTARY AGREEMENTS ENTERED INTO BETWEEN UTILITIES COVERED BY THIS SECTION AND THE DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT. UTILITIES ENTERING INTO SUCH AGREEMENTS, IF OTHERWISE AUTHORIZED UNDER LAW, MAY APPLY ANY SUCH AGREEMENTS TOWARD COMPLIANCE WITH THE PROVISIONS OF THIS SECTION.

(4)  ON OR BEFORE SIX MONTHS AFTER THE EFFECTIVE DATE OF THIS PART 2 AS SPECIFIED IN SECTION 40­4­215, THE AIR POLLUTION CONTROL DIVISION SHALL COMPILE AN INVENTORY OF TOTAL EMISSIONS OF SULPHUR DIOXIDE THAT WERE ACTUALLY EMITTED DURING CALENDAR YEAR 1997 FROM ALL COAL­FIRED UTILITY BOILERS IN COLORADO THAT ARE OPERATED TO GENERATE ELECTRICITY, FOR TRANSMISSION FOR SALE, DIRECTLY OR INDIRECTLY, TO A PUBLIC UTILITY OR TO CONSUMERS OF ELECTRICITY. THE DIVISION SHALL ANNUALLY ADJUST SUCH INVENTORY TO REFLECT THE EMISSIONS REDUCTIONS ATTAINED THROUGH THE REQUIREMENTS OF THIS SECTION, BY VOLUNTARY AGREEMENT WITH THE DIVISION OR 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 ELECTRICITY FOR TRANSMISSION FOR SALE, DIRECTLY OR INDIRECTLY, TO A PUBLIC UTILITY OR TO A CONSUMER OF ELECTRICITY 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 SULPHUR DIOXIDE DEVELOPED PURSUANT TO THIS SECTION TO BE EXCEEDED.

(6)  IF AN OWNER OF A FOSSIL­FUEL­FIRED BOILER THAT IS USED TO GENERATE ELECTRICITY FOR TRANSMISSION FOR SALE, DIRECTLY OR INDIRECTLY, TO A PUBLIC UTILITY OR TO A CONSUMER OF ELECTRICITY VOLUNTARILY REDUCES EMISSIONS OF SULPHUR DIOXIDE BEYOND THE EMISSIONS LIMITATIONS REQUIRED BY APPLICABLE LAW, INCLUDING THE LIMITATIONS REQUIRED BY 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 ELECTRICITY FOR TRANSMISSION FOR SALE, DIRECTLY OR INDIRECTLY, TO A PUBLIC UTILITY OR TO A CONSUMER OF ELECTRICITY, 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)  ALL ELECTRICITY SUPPLIERS SHALL PROVIDE THE FOLLOWING INFORMATION TO THEIR COLORADO CUSTOMERS:

(a)  THE TYPE OF FUEL USED TO GENERATE THE ELECTRICITY SOLD TO COLORADO CUSTOMERS, INCLUDING AN ESTIMATE OF THE PERCENTAGE OF THE TOTAL ELECTRICITY PROVIDED TO EACH SUCH CUSTOMER GENERATED BY EACH SUCH FUEL;

(b)  AN ESTIMATE OF THE PERCENTAGE OF THE ELECTRICITY THAT IS SUPPLIED TO COLORADO CUSTOMERS THAT IS PRODUCED THROUGH HIGHLY EFFICIENT COGENERATION; AND

(c)  TO THE DEGREE FEASIBLE, AN ESTIMATE OF THE EMISSIONS OF SULPHUR DIOXIDE, NITROGEN OXIDES, CARBON DIOXIDE, PM­10, PM­2.5, VOLATILE ORGANIC COMPOUNDS, AND TOXIC SUBSTANCES, INCLUDING MERCURY, ATTRIBUTABLE TO THE ELECTRICITY THAT THE SUPPLIER HAS SOLD TO COLORADO CUSTOMERS.

(2)  INFORMATION TO BE DISCLOSED TO CUSTOMERS PURSUANT TO THIS SECTION SHALL BE MADE AVAILABLE TO EACH CUSTOMER IN A MANNER THAT WILL PERMIT EACH CUSTOMER TO KNOW, ON AN ANNUAL AVERAGE BASIS, THE CONTRIBUTION OF EACH FUEL TO THE GENERATION OF ELECTRICITY THAT SUCH CUSTOMER HAS CONSUMED AS WELL AS, TO THE DEGREE FEASIBLE, THE EMISSIONS OF SUBSTANCES REFERENCED IN PARAGRAPH (c) OF SUBSECTION (1) OF THIS SECTION THAT ARE ATTRIBUTABLE TO THAT CUSTOMER'S CONSUMPTION OF ELECTRICITY.

(3)  ALL SELLERS OF ELECTRICITY FOR USE IN COLORADO SHALL PROVIDE JUSTIFICATION FOR ANY CLAIMS THEY MAY MAKE CONCERNING THE ENVIRONMENTAL BENEFITS ASSOCIATED WITH PART OR ALL OF THE ELECTRICITY SOLD TO CUSTOMERS.

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

(I)  THE RATES OF RESIDENTIAL AND SMALL COMMERCIAL CUSTOMERS SHOULD BE LOWER UNDER RETAIL ELECTRICITY COMPETITION THAN THOSE THAT WOULD BE IN PLACE UNDER REGULATION;

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

(III)  IMPLEMENTATION OF RETAIL COMPETITION SHALL NOT RESULT IN COST­SHIFTING BETWEEN CUSTOMER CLASSES; AND

(IV)  ALL CUSTOMERS SHALL BE GUARANTEED BASIC ELECTRIC­SERVICE PROTECTIONS THAT ARE EQUAL TO OR BETTER THAN THOSE PROVIDED UNDER CURRENT REGULATION.

(b)  THE PROVISIONS OF THIS SECTION ARE DESIGNED TO PROMOTE THESE OBJECTIVES AND SHOULD BE CONSTRUED IN THAT LIGHT.

(2)  Licensing. (a)  ALL ELECTRICITY SUPPLIERS SHALL OBTAIN A LICENSE FROM THE COMMISSION BEFORE OFFERING ELECTRICITY FOR SALE TO RETAIL CUSTOMERS IN COLORADO.

(b)  THE COMMISSION SHALL REQUIRE ELECTRICITY SUPPLIERS TO PROVIDE PROOF OF FINANCIAL INTEGRITY AND TO DEMONSTRATE ACCESS TO ADEQUATE RESERVES TO SUPPLY SERVICE TO COLORADO CUSTOMERS. THE COMMISSION MAY REQUIRE SUCH ELECTRICITY SUPPLIERS TO POST A BOND OR AN IRREVOCABLE LETTER OF CREDIT FROM A CREDITWORTHY FINANCIAL INSTITUTION TO COVER THE COST OF EMERGENCY OR BACK­UP ELECTRIC SUPPLY. THE COMMISSION MAY REQUIRE SUCH ELECTRIC SUPPLIERS TO FILE AN ANNUAL REPORT TO PROVIDE CONTINUING PROOF OF FINANCIAL RESPONSIBILITY.

(c)  NO DISTRIBUTION SERVICE PROVIDER SHALL BE REQUIRED TO PROVIDE ACCESS TO ITS DISTRIBUTION FACILITIES TO AN UNLICENSED ELECTRICITY SELLER.

(d)  IN ITS APPLICATION EACH APPLICANT FOR A LICENSE SHALL SHOW HOW IT INTENDS TO COMPLY WITH THE PROVISIONS OF THIS SECTION.

(e)  THE COMMISSION SHALL INCLUDE IN EACH LICENSE TERMS AND CONDITIONS THAT REQUIRE EACH LICENSEE TO COMPLY WITH THE PROVISIONS OF THIS SECTION AS WELL AS WITH SECTION 40­4­206.

(f)  THE COMMISSION MAY REVOKE OR SUSPEND THE LICENSE OF AN ELECTRIC SUPPLIER FOR JUST CAUSE ON THE COMMISSION'S OWN INVESTIGATION OR UPON THE COMPLAINT OF ANY PERSON IF IT IS ESTABLISHED THAT THE ELECTRIC SUPPLIER:

(I)  INTENTIONALLY PROVIDED FALSE INFORMATION TO THE COMMISSION;

(II)  COMMITTED FRAUD OR ENGAGED IN DECEPTIVE PRACTICES; OR

(III)  VIOLATED ANY OF THE TERMS AND CONDITIONS OF ITS LICENSE.

(g)  LICENSES SHALL BE ISSUED BY THE COMMISSION WITHIN SIXTY DAYS AFTER THE FILING OF A COMPLETE APPLICATION WITH THE COMMISSION UNLESS THE COMMISSION REJECTS THE APPLICATION FOR FAILING TO MEET THE REQUIREMENTS OF THIS SECTION. IF THE COMMISSION REJECTS A LICENSE APPLICATION, THE COMMISSION SHALL SPECIFY THE REASONS IN WRITING AND, IF PRACTICAL, IDENTIFY WAYS IN WHICH THE APPLICANT MAY OVERCOME ANY DEFICIENCIES IN ITS APPLICATION.

(h)  THE COMMISSION MAY CHARGE ALL LICENSE APPLICANTS A REASONABLE FEE TO COVER THE ADMINISTRATIVE COST OF PROCESSING THE LICENSE APPLICATION AND REVIEWING ANNUAL REPORTS.

(3)  Standard­offer service. (a)  UNTIL THE COMMISSION OR A LOCAL GOVERNING BODY DETERMINES THAT COMPETITION HAS BEEN SUBSTANTIALLY IMPLEMENTED FOR A PARTICULAR CLASS OF CUSTOMERS OF A UTILITY SO THAT ALL CUSTOMERS IN THAT CLASS HAVE AN OPPORTUNITY TO FULLY PARTICIPATE IN THE COMPETITIVE MARKET, EACH INCUMBENT SUPPLIER SHALL MAKE STANDARD­OFFER SERVICE AVAILABLE TO ALL CUSTOMERS IN THAT CLASS AT REGULATED RATES. NOTHING IN THIS SECTION SHALL BE CONSTRUED TO PROHIBIT OR DISCOURAGE OTHER ELECTRICITY SUPPLIERS FROM OFFERING SUCH STANDARD­OFFER SERVICE.

(b)  NEITHER THE COMMISSION NOR THE LOCAL GOVERNING BODY SHALL ALLOW THE IMPLEMENTATION OF RETAIL COMPETITION FOR ANY CUSTOMER CLASS OF A UTILITY UNLESS THERE IS IN PLACE, ON OR BEFORE THE INTRODUCTION OF SUCH COMPETITION FOR SUCH CUSTOMER CLASS, A STANDARD­OFFER SERVICE TARIFF FOR THAT CLASS. NO SUCH TARIFF SHALL BECOME EFFECTIVE UNTIL APPROVED BY THE COMMISSION OR LOCAL GOVERNING BODY. THE RATE OR RATES INCLUDED IN ANY SUCH TARIFF SHALL BE COST­JUSTIFIED AND MAY NOT EXCEED RATES IN EXISTENCE ON THE DATE ON WHICH THE COMMISSION OR LOCAL GOVERNING BODY HAS APPROVED THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION FOR SUCH UTILITY.

(c)  ELECTRICITY SUPPLIERS FILING TARIFFS UNDER PARAGRAPH (b) OF THIS SUBSECTION (3) MAY FILE PROPOSED REVISIONS TO SUCH TARIFFS. NO INCREASE IN THE RATE INCLUDED IN ANY SUCH TARIFF MAY BE ALLOWED THAT IS ATTRIBUTABLE TO THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION. ANY RATE INCREASE PROPOSED PURSUANT TO THIS PARAGRAPH (c) FOR STANDARD­OFFER SERVICE SHALL BE COST­JUSTIFIED AND MAY BE IMPLEMENTED ONLY AFTER THE APPROVAL OF THE COMMISSION OR LOCAL GOVERNING BODY.

(d)  ANY CUSTOMER MAY LEAVE THE STANDARD­OFFER SERVICE TARIFF REQUIRED TO BE AVAILABLE UNDER THIS SECTION AT ANY TIME TO PURCHASE FROM AN ALTERNATIVE ELECTRICITY SUPPLIER. CONDITIONS TO ATTEND THE RETURN OF ANY SUCH CUSTOMER TO A STANDARD­OFFER SERVICE TARIFF SHALL BE DETERMINED BY THE COMMISSION OR THE LOCAL GOVERNING BODY IN LIGHT OF THE COSTS IMPOSED ON THE SELLER OF STANDARD­OFFER SERVICE BY SUCH RETURN.

(4)  Other consumer protections. (a)  NO CUSTOMER SHALL BE DEEMED TO HAVE AGREED TO CHANGE ELECTRICITY SUPPLIERS OF ANY SERVICE WITHOUT WRITTEN AUTHORIZATION BY THE CUSTOMER FOR SERVICE FROM THE NEW SUPPLIER. IF A CUSTOMER IS SWITCHED TO A DIFFERENT ELECTRICITY 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)  NO ELECTRICITY SUPPLIER SHALL AGGREGATE OR ACQUIRE CUSTOMERS THROUGH A METHOD THAT PURPORTS TO CONTRACT WITH THE CUSTOMER UNDER THE CONDITION THAT THE CUSTOMER MUST TAKE AN ACTION TO REJECT THE OFFER TO CONTRACT OR THE CONTRACT ITSELF.

(c)  EACH ELECTRICITY SUPPLIER AND, WHERE APPLICABLE, EACH SUPPLIER OF ENERGY­RELATED SERVICES OR ANCILLARY SERVICES SHALL:

(I)  IMPLEMENT BILLING PRACTICES THAT ARE FAIR AND REASONABLE TO THE CONSUMER;

(II)  PROVIDE CUSTOMERS TIMELY ACCESS TO PRICE AND OTHER INFORMATION ABOUT THE SERVICE IT IS OFFERING TO SELL OR IS SELLING TO A CONSUMER;

(III)  BE RESPONSIBLE FOR MEETING APPLICABLE RELIABILITY STANDARDS AND PROVIDE SAFE AND RELIABLE SERVICE;

(IV)  PROVIDE AT LEAST THIRTY DAYS' NOTICE TO ALL OF ITS AFFECTED CUSTOMERS IF IT IS NO LONGER OBTAINING GENERATION, TRANSMISSION, DISTRIBUTION, OR ANCILLARY SERVICE FROM ANOTHER SUPPLIER OF GENERATION, TRANSMISSION, DISTRIBUTION, OR ANCILLARY SERVICE SUFFICIENT TO PROVIDE SERVICE TO SUCH AFFECTED CUSTOMERS UNDER THE TERMS AND CONDITIONS OF ITS CONTRACT OR CONTRACTS WITH SUCH CUSTOMERS;

(V)  ENSURE THAT BILLS RENDERED ON ITS BEHALF INCLUDE TOLL­FREE NUMBERS FOR BILLING, SERVICE, AND SAFETY INQUIRIES AND THE TELEPHONE NUMBER OF THE CONSUMER SERVICES SECTION OF THE COMMISSION OR THE LOCAL GOVERNING BODY; AND

(VI)  ENSURE THAT BILLING AND COLLECTION SERVICES RENDERED ON ITS BEHALF COMPLY WITH STANDARDS APPROVED BY THE COMMISSION OR LOCAL GOVERNING BODY.

(d)  EACH ELECTRICITY SUPPLIER PROVIDING FIRM SERVICE SHALL MAKE REASONABLE EFFORTS TO REESTABLISH SERVICE WITHIN THE SHORTEST POSSIBLE TIME WHEN SERVICE INTERRUPTIONS OCCUR AND SHALL WORK COOPERATIVELY WITH OTHER ENTITIES TO ENSURE TIMELY RESTORATION OF SERVICE WHERE FACILITIES ARE NOT UNDER THE CONTROL OF THE SUPPLIER.

(e)  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 AN ELECTRICITY SUPPLIER, THE INCUMBENT SUPPLIER SHALL FACILITATE THE CONTINUED DELIVERY OF POWER TO SUCH CUSTOMERS THROUGH SUCH MEANS AS ARE PRACTICABLE, INCLUDING, WITHOUT LIMITATION, PROVIDING POWER THROUGH THE SHORT­TERM WHOLESALE POWER MARKET. SUCH INCUMBENT SUPPLIER MAY FULLY RECOVER ITS COSTS OF PROVIDING SUCH SERVICE, CONSISTENT WITH TERMS AND CONDITIONS APPROVED BY THE COMMISSION OR THE LOCAL GOVERNING BODY.

(5)  THE COMMISSION SHALL PROMULGATE RULES IMPLEMENTING THIS SECTION WITHIN ONE YEAR AFTER THE EFFECTIVE DATE OF THIS PART 2 AS SPECIFIED IN SECTION 40­4­215.

40­4­208.  Municipal aggregation. (1)  IT IS THE POLICY OF THE STATE OF COLORADO TO ENCOURAGE THE AGGREGATION OF THE RETAIL ELECTRIC LOADS OF ELECTRICITY CUSTOMERS, WHERE SUCH CUSTOMERS CHOOSE SUCH AGGREGATION, SO THAT THESE CUSTOMERS MAY AVAIL THEMSELVES OF THE POTENTIAL BENEFITS OF RETAIL ELECTRICITY COMPETITION. FOR THIS PURPOSE, ANY COLORADO MUNICIPALITY OR GROUP OF MUNICIPALITIES ACTING TOGETHER IS HEREBY AUTHORIZED TO AGGREGATE THE RETAIL ELECTRIC LOADS OF ELECTRICITY CUSTOMERS WITHIN ITS OR THEIR BOUNDARIES; EXCEPT THAT, THE AUTHORITY GRANTED SUCH MUNICIPALITY OR GROUP OF MUNICIPALITIES BY THIS SECTION DOES NOT EXTEND TO SUCH LOADS SERVED BY AN EXISTING MUNICIPAL ELECTRIC UTILITY, AND THE ACTION BY ANY MUNICIPALITY OR GROUP OF MUNICIPALITIES TO PROVIDE AGGREGATION SERVICES PURSUANT TO THIS SECTION MUST BE VOLUNTARY.

(2)  A MUNICIPALITY OR GROUP OF MUNICIPALITIES AGGREGATING RETAIL ELECTRIC LOAD PURSUANT TO THIS SECTION SHALL NOT BE CONSIDERED AS ENGAGING IN THE SALE OF ELECTRICITY EITHER AT RETAIL OR AT WHOLESALE NOR SHALL SUCH MUNICIPALITY OR GROUP OF MUNICIPALITIES BE CONSIDERED TO BE A PUBLIC UTILITY UNDER COLORADO LAW.

(3)  THE PROVISION OF AGGREGATED ELECTRICITY SUPPLY AS AUTHORIZED BY THIS SECTION SHALL BE GOVERNED BY THIS SECTION, ANY OTHER STATE LAW THAT GOVERNS AGGREGATED ELECTRIC POWER IN COMPETITIVE MARKETS IN COLORADO AND, WHERE NOT INCONSISTENT WITH THIS SECTION AND SUCH OTHER LAW, LOCAL LAWS, AND RULES.

(4)  A MUNICIPALITY MAY INITIATE A PROCESS TO AGGREGATE RETAIL ELECTRIC LOADS UPON AUTHORIZATION ESTABLISHED IN THE MANNER THAT SUCH MUNICIPALITY NORMALLY ADOPTS LAWS. TWO OR MORE MUNICIPALITIES MAY, AS A GROUP, INITIATE A PROCESS TO AGGREGATE RETAIL ELECTRIC LOADS ONLY IF SUCH JOINT PROCESS IS ADOPTED BY EACH MUNICIPALITY ACCORDING TO THE MANNER IN WHICH EACH SUCH MUNICIPALITY NORMALLY ADOPTS LAWS.

(5)  UPON A DETERMINATION TO SERVE AS A LOCAL AGGREGATOR, A MUNICIPALITY OR GROUP OF MUNICIPALITIES SHALL DEVELOP A DRAFT PLAN FOR REVIEW BY ITS OR THEIR CITIZENS DETAILING THE AGGREGATION PROCESS AND THE CONSEQUENCES FOR ELECTRICITY CUSTOMERS OF PARTICIPATING IN SUCH AGGREGATION. THE PLAN SHALL BE FINALIZED ONLY AFTER OPPORTUNITY FOR PUBLIC COMMENT ON THE PLAN BY THE CITIZENS OF THE MUNICIPALITY OR GROUP OF MUNICIPALITIES.

(6)  ANY MUNICIPAL LOAD AGGREGATION PLAN ESTABLISHED PURSUANT TO THIS SECTION SHALL:

(a)  PROVIDE FOR UNIVERSAL ACCESS BY THE CITIZENS OF THE MUNICIPALITY OR MUNICIPALITIES, RELIABLE AGGREGATION SERVICES, AND EQUITABLE TREATMENT OF ALL CLASSES OF ELECTRICITY CUSTOMERS;

(b)  INCLUDE AN ORGANIZATIONAL STRUCTURE OF THE AGGREGATION PROGRAM, ITS OPERATIONS, AND ITS FUNDING;

(c)  SET FORTH THE METHODS FOR ENTERING AND TERMINATING AGREEMENTS WITH OTHER ENTITIES AND THE RIGHTS AND RESPONSIBILITIES OF PARTICIPANTS IN THE AGGREGATION PROGRAM; AND

(d)  CONTAIN A PROGRAM COMPONENT THAT ENABLES ITS CUSTOMERS TO PURCHASE ALL OR A PORTION OF ITS ELECTRICITY OR ENERGY­RELATED SERVICES FROM RESOURCES THAT HAVE ENVIRONMENTAL BENEFITS.

(7)  PARTICIPATION BY ANY RETAIL CUSTOMER IN ANY MUNICIPAL AGGREGATION PROGRAM IMPLEMENTED PURSUANT TO THIS SECTION SHALL BE VOLUNTARY.

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

(a)  NO UTILITY SHALL BE ALLOWED TO RECOVER IN EXCESS OF ITS NET STRANDED COSTS FROM ITS RETAIL CUSTOMERS;

(b)  NO UTILITY SEEKING TO RECOVER NET STRANDED COSTS FROM ITS RETAIL CUSTOMERS SHALL RECOVER ANY SUCH COSTS WITHOUT AN ORDER, FOLLOWING A HEARING, ALLOWING SUCH RECOVERY FROM EITHER THE COMMISSION OR THE LOCAL GOVERNING BODY;

(c)  IN THE DETERMINATION BY THE COMMISSION OR A LOCAL GOVERNING BODY WHETHER A UTILITY SHALL BE ALLOWED TO RECOVER ANY NET STRANDED COSTS:

(I)  THE BURDEN TO SHOW THAT SUCH COSTS MAY BE RECOVERED FROM RETAIL CUSTOMERS RESTS WITH THE UTILITY; AND

(II)  THERE SHALL BE NO PRESUMPTION THAT THE UTILITY IS ALLOWED TO RECOVER ANY PORTION OF NET STRANDED COSTS.

(d)  NEITHER THE COMMISSION NOR ANY LOCAL GOVERNING BODY SHALL ALLOW THE RECOVERY OF ANY NET STRANDED COSTS UNLESS THE UTILITY:

(I)  IDENTIFIES AND DESCRIBES SUCH COSTS;

(II)  SHOWS THAT SUCH COSTS HAVE BEEN STRANDED AS A RESULT OF THE IMPLEMENTATION OF RETAIL COMPETITION;

(III)  SHOWS THAT SUCH COSTS HAVE BEEN PRUDENTLY INCURRED;

(IV)  HAS MITIGATED THE INCURRENCE OF SUCH STRANDED COSTS BY THE SALE OF ASSETS OR OTHERWISE, TO THE MAXIMUM EXTENT PRACTICABLE;

(V)  PROVIDES AN ANALYSIS OF THE EFFECT OF GROWTH IN DEMAND FOR ELECTRICITY IN COLORADO, IF ANY, ON THE CALCULATION OF STRANDED COSTS; AND

(VI)  PROVIDES A DETAILED ESTIMATE OF THE ECONOMIC VALUE OF ITS ASSETS, THE OUTPUT OF WHICH IS MARKETABLE UNDER RETAIL ELECTRICITY COMPETITION, SO AS TO ENABLE A CALCULATION OF NET STRANDED COSTS.

(e)  IN DETERMINING THE AMOUNT OF COSTS THAT A UTILITY SHALL BE ALLOWED TO RECOVER FROM ITS ELECTRICITY CUSTOMERS UNDER THIS SECTION, THE COMMISSION AND LOCAL GOVERNING BODIES SHALL CONSIDER THE EFFECT OF GROWTH IN DEMAND FOR ELECTRICITY IN COLORADO.

(f)  RECOVERY FROM ELECTRICITY CUSTOMERS OF ANY PORTION OF THE NET STRANDED COSTS OF A UTILITY ALLOWED PURSUANT TO THIS SECTION SHALL BE CARRIED OUT IN A MANNER THAT:

(I)  AVOIDS ANY COST­SHIFTING BETWEEN CUSTOMER CLASSES;

(II)  DOES NOT PERMIT A CUSTOMER LEAVING THE UTILITY SYSTEM TO AVOID PAYMENT OF ITS FAIR SHARE OF SUCH COSTS;

(III)  IS EQUITABLE IN ITS COMPETITIVE IMPACT ON ALTERNATIVE POWER GENERATION FUEL SOURCES; AND

(IV)  IS OTHERWISE JUST AND REASONABLE TO THE CUSTOMERS AND SHAREHOLDERS OF THE UTILITY.

(g)  ANY PERSON WHO REDUCES SUCH PERSON'S OWN RETAIL ELECTRICITY SUPPLY PURCHASES FROM AN ELECTRICITY SUPPLIER BY OBTAINING ALL OR PART OF ITS ELECTRICITY SUPPLY FROM A DECENTRALIZED COMMUNITY ENERGY SYSTEM SHALL HAVE ITS OBLIGATION TO PAY ANY NET STRANDED COSTS REDUCED BY A PERCENTAGE EQUAL TO THE PERCENTAGE OF ITS TOTAL ELECTRICITY CONSUMPTION THAT IS SUPPLIED BY THE DECENTRALIZED COMMUNITY ENERGY SYSTEM.

(h)  THE COMMISSION MAY CHARGE APPLICANTS FOR THE RECOVERY OF STRANDED COSTS BEFORE THE COMMISSION A REASONABLE FEE TO COVER THE ADMINISTRATIVE COST OF PROCESSING THE APPLICATION FOR SUCH RECOVERY.

40­4­210.  Functional separation, disaggregation, affiliate transactions, and non­discrimination. (1)  THE COMMISSION AND LOCAL GOVERNING BODIES SHALL REQUIRE AS A CONDITION OF THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION FOR ANY UTILITY THAT IT:

(a)  FUNCTIONALLY SEPARATE INTO AT LEAST THE FOLLOWING THREE DISTINCT BUSINESS UNITS:

(I)  ELECTRICITY SUPPLY;

(II)  TRANSMISSION AND DISTRIBUTION; AND

(III)  ENERGY­RELATED SERVICES;

(b)  SEPARATELY STATE THE CHARGES IT SEEKS TO RECOVER FROM ITS CUSTOMERS THROUGH BILLS INTO AT LEAST THE FOLLOWING CATEGORIES:

(I)  ELECTRICITY SUPPLY;

(II)  TRANSMISSION SERVICES;

(III)  DISTRIBUTION SERVICES;

(IV)  ENERGY­RELATED SERVICES;

(V)  NON­BYPASSABLE PUBLIC BENEFITS CHARGES; AND

(VI)  IF ANY, RECOVERABLE NET STRANDED COSTS; AND

(c)  HAVE ACCOUNTING AND OTHER PROTECTIONS IN PLACE TO ASSURE THAT ANY REGULATED PART OF THE BUSINESS CANNOT FAVOR ANY UNREGULATED AFFILIATES OF THE UTILITY AS AGAINST OTHER MARKET COMPETITORS.

(2)  IT IS THE POLICY OF THE STATE OF COLORADO TO ENCOURAGE ALL COLORADO UTILITIES TO LEGALLY SEPARATE THEIR OWNERSHIP OF GENERATION FACILITIES, OPERATIONS, AND SERVICES AS WELL AS CONTRACTS TO PURCHASE ELECTRICITY FROM THEIR OWNERSHIP OF TRANSMISSION AND DISTRIBUTION FACILITIES, OPERATIONS, AND SERVICES. IN FURTHERANCE OF THIS POLICY, NEITHER THE COMMISSION NOR A LOCAL GOVERNING BODY SHALL APPROVE THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION FOR ANY UTILITY UNLESS SUCH UTILITY HAS LEGALLY SEPARATED SUCH OWNERSHIP, HAS A LEGALLY ENFORCEABLE PLAN TO SEPARATE SUCH OWNERSHIP, OR HAS OFFERED AN ADEQUATE EXPLANATION OF WHY IT SHOULD NOT BE REQUIRED TO CARRY OUT SUCH LEGAL SEPARATION SUFFICIENT, IN THE DISCRETION OF THE COMMISSION OR LOCAL GOVERNING BODY, TO OVERCOME THE POLICY PRESUMPTION ESTABLISHED IN THIS SUBSECTION (2).

(3)  IN PROVIDING REGULATED TRANSMISSION AND DISTRIBUTION SERVICE, A UTILITY SHALL GRANT CUSTOMERS, INCLUDING CUSTOMERS PRODUCING ELECTRICITY FOR SALE, AND THEIR ELECTRIC SUPPLIERS ACCESS TO THE UTILITY'S TRANSMISSION AND DISTRIBUTION SYSTEM ON A NONDISCRIMINATORY BASIS AT RATES, TERMS, AND CONDITIONS OF SERVICE COMPARABLE TO THE USE OF THE TRANSMISSION AND DISTRIBUTION SYSTEM FACILITIES BY THE UTILITY AND THE UTILITY'S AFFILIATES.

40­4­211.  Decentralized community energy systems. (1)  UNLESS IT SELLS ELECTRICITY AT RETAIL TO END­USERS THAT ARE NOT SERVED BY THE DECENTRALIZED COMMUNITY ENERGY SYSTEM, A DECENTRALIZED COMMUNITY ENERGY SYSTEM IS NOT AN ELECTRIC SUPPLIER OR ELECTRICITY SELLER UNDER THIS PART 2 AND IS NOT A PUBLIC UTILITY.

(2)  A DECENTRALIZED COMMUNITY ENERGY SYSTEM MAY SELL ELECTRICITY TO AN ELECTRICITY SUPPLIER OR SELLER.

40­4­212.  Impacts of retail electricity competition on the Colorado work force. (1)  IT IS THE POLICY OF THE STATE OF COLORADO THAT THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION PROTECT AND ENHANCE THE INTERESTS OF COLORADO'S WORK FORCE AND, IN FURTHERANCE OF THIS OBJECTIVE, THIS SECTION ESTABLISHES CERTAIN MINIMUM REQUIREMENTS.

(2)  WITHIN ONE YEAR AFTER THE EFFECTIVE DATE OF THIS PART 2 AS SPECIFIED IN SECTION 40­4­215, THE COLORADO DEPARTMENT OF LABOR AND EMPLOYMENT SHALL PREPARE A REPORT ON THE EFFECT OF THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION ON:

(a)  EMPLOYMENT IN THE ELECTRIC INDUSTRY IN COLORADO;

(b)  PENSIONS AND OTHER BENEFITS TO WHICH EXISTING ELECTRIC INDUSTRY EMPLOYEES ARE PRESENTLY ENTITLED; AND

(c)  WHETHER THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION MAY PRODUCE WORK FORCE DISLOCATION IN COLORADO. THE DEPARTMENT SHALL SUBMIT THE REPORT REQUIRED BY THIS SECTION, INCLUDING RECOMMENDATIONS FOR ACTION, IF ANY ARE WARRANTED, TO ALLEVIATE ANY ADVERSE IMPACTS IT MAY FIND, TO THE GENERAL ASSEMBLY IN ACCORDANCE WITH SECTION 24­1­136 (9), C.R.S.

(3)  THE COMMISSION AND LOCAL GOVERNING BODIES, WITHIN THE SCOPE OF THEIR AUTHORITIES, SHALL CONSIDER THE DEPARTMENT'S REPORT AND RECOMMENDATIONS IN DETERMINING THE TERMS AND CONDITIONS OF THE APPROVAL OF THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION FOR ANY UTILITY.

40­4­213.  Impact of retail electricity competition on revenues to local government. (1)  IT IS THE POLICY OF THE STATE OF COLORADO TO PREVENT, SO FAR AS IS FEASIBLE, THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION IN COLORADO FROM REDUCING THE FLOW OF REVENUES TO LOCAL GOVERNMENTS ATTRIBUTABLE TO FRANCHISE FEES AND LOCAL TAXES ON THE ELECTRIC INDUSTRY AND, IN FURTHERANCE OF THIS OBJECTIVE, THIS SECTION ESTABLISHES CERTAIN MINIMUM REQUIREMENTS.

(2)  WITHIN ONE YEAR AFTER THE EFFECTIVE DATE OF THIS PART 2 AS SPECIFIED IN SECTION 40­4­215, THE COLORADO STATE TREASURER, AFTER CONSULTATION WITH COLORADO LOCAL GOVERNMENT INTERESTS, SHALL PREPARE A REPORT ON THE POTENTIAL IMPACTS OF THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION IN COLORADO ON REVENUES TO LOCAL GOVERNMENTS FROM UTILITY FRANCHISE FEES AND TAXES ON ELECTRIC INDUSTRY ASSETS. THE REPORT SHALL EXPLAIN WHETHER THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION THREATENS REVENUES ATTRIBUTABLE TO SUCH FEES AND TAXES AND, IF SO, WHAT STEPS SHOULD BE TAKEN TO PREVENT A REDUCTION IN SUCH REVENUES UNDER RETAIL ELECTRICITY COMPETITION OR TO COLLECT THE SAME LEVEL OF REVENUES FROM ALTERNATIVE SOURCES. THE STATE TREASURER SHALL SUBMIT THE REPORT REQUIRED BY THIS SECTION, INCLUDING RECOMMENDATIONS FOR ACTION IF ANY ARE WARRANTED, TO ALLEVIATE ANY ADVERSE IMPACTS IT MAY FIND, TO THE GENERAL ASSEMBLY IN ACCORDANCE WITH SECTION 24­1­136 (9), C.R.S.

(3)  WITHIN THE SCOPE OF THEIR AUTHORITIES, THE COMMISSION AND LOCAL GOVERNING BODIES SHALL CONSIDER THE STATE TREASURER'S REPORT AND RECOMMENDATIONS IN DETERMINING THE TERMS AND CONDITIONS OF THE APPROVAL OF THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION FOR ANY UTILITY.

40­4­214.  Commission investigations. (1)  IT IS THE POLICY OF THE STATE OF COLORADO THAT RETAIL ELECTRICITY COMPETITION BE IMPLEMENTED, IF AT ALL, IN A MANNER THAT:

(a)  PRESERVES EXISTING ELECTRIC SYSTEM RELIABILITY; AND

(b)  AVOIDS THE EXISTENCE OF MARKET POWER OVER THE PROVISION OF ELECTRICITY BY ANY ELECTRICITY SUPPLIER. IN FURTHERANCE OF THESE OBJECTIVES, THIS SECTION REQUIRES THE COMMISSION TO UNDERTAKE INVESTIGATIONS AND REPORT THE RESULT OF THESE INVESTIGATIONS TO THE GENERAL ASSEMBLY.

(2)  THE COMMISSION SHALL UNDERTAKE AN INVESTIGATION INTO HOW THE RELIABILITY OF THE ELECTRIC SYSTEM MAY BE AFFECTED BY THE INTRODUCTION OF RETAIL ELECTRICITY COMPETITION IN COLORADO AND, IF THE COMMISSION FINDS THAT RELIABILITY COULD BE ADVERSELY AFFECTED BY SUCH COMPETITION, HOW SUCH ADVERSE EFFECTS CAN BE PREVENTED. WITHIN ONE YEAR AFTER THE EFFECTIVE DATE OF THIS PART 2 AS SPECIFIED IN SECTION 40­4­215, THE COMMISSION SHALL COMPLETE THIS INVESTIGATION AND SUBMIT A WRITTEN REPORT OF THE INVESTIGATION, INCLUDING RECOMMENDATIONS FOR ACTION, IF ANY ARE WARRANTED, TO THE GENERAL ASSEMBLY IN ACCORDANCE WITH SECTION 24­1­136 (9), C.R.S.

(3)  THE COMMISSION SHALL UNDERTAKE AN INVESTIGATION INTO WHETHER THE INTRODUCTION OF RETAIL ELECTRICITY COMPETITION IN COLORADO MAY BE ATTENDED BY THE EXERCISE OF MARKET POWER BY ANY ELECTRICITY SUPPLIER. IF THE COMMISSION FINDS THAT ANY SUCH MARKET POWER MAY EXIST, THE COMMISSION SHALL MAKE RECOMMENDATIONS AS TO HOW SUCH MARKET POWER CAN BE OVERCOME. WITHIN TWO YEARS AFTER THE EFFECTIVE DATE OF THIS PART 2 AS SPECIFIED IN SECTION 40­4­215, THE COMMISSION SHALL COMPLETE THIS INVESTIGATION, AND SUBMIT A WRITTEN REPORT OF THE INVESTIGATION, INCLUDING RECOMMENDATIONS FOR ACTION IF ANY ARE WARRANTED, TO THE GENERAL ASSEMBLY IN ACCORDANCE WITH SECTION 24­1­136 (9), C.R.S.

(4)  WITHIN THE SCOPE OF THEIR AUTHORITIES, THE COMMISSION AND LOCAL GOVERNING BODIES SHALL CONSIDER THE COMMISSION'S REPORT IN DETERMINING THE TERMS AND CONDITIONS OF THE APPROVAL OF THE IMPLEMENTATION OF RETAIL ELECTRICITY COMPETITION FOR ANY UTILITY.

40­4­215.  Effective date of this part 2. THIS PART 2 SHALL TAKE EFFECT CONCURRENTLY WITH THE FIRST LAW OF THIS STATE AUTHORIZING COMPETITION IN RETAIL ELECTRIC SUPPLY.

SECTION 20  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.