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Second Regular Session

Sixty-first General Assembly

LLS NO. 98­0830.01D DHG HOUSE BILL 98­1381

STATE OF COLORADO

BY REPRESENTATIVE McPherson

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 that the emergence of competition in the supply of electricity at retail has the potential to lower prices, improve efficiency, and allow the development of new businesses and new technologies. Distinguishes between the supply function and the transmission and distribution functions, which are natural monopolies and should continue to be regulated under the existing doctrine of regulated monopoly.

Sets an implementation date, nominally January 1, 2002, for currently regulated, investor­owned utilities, on and after which customers of such utilities will be allowed to choose their electric supplier. Allows a different implementation date for municipal utilities and for cooperative electric associations that are currently exempt from regulation, depending on when the governing bodies of such utilities elect to offer such choice. Prohibits such exempt utilities from selling electricity outside their service territories until they offer choice of supply to their own customers, with limited exceptions.

Requires all non­exempt utilities to file restructuring plans with the public utilities commission (PUC) on or before January 1, 2000. Gives all utilities the option to conduct pilot programs, subject to approval by the PUC, in limited areas before the implementation date.

Requires the functional separation of existing utility companies into discrete business units that separate the accounting for transmission and distribution from the accounting for supply and energy­related services operations. Prohibits the PUC from ordering divestiture of assets or requiring the retention of assets that a utility wishes to sell.

Continues to treat transmission and distribution functions as regulated monopolies. Requires each transmission or distribution utility to offer access and service on a nondiscriminatory basis and at rates, terms, and conditions comparable to those available to the utility itself.

Deregulates the supply function, subject to a basic licensing requirement, on and after the implementation date. Requires an incumbent utility to provide standard­offer service to those customers who do not affirmatively choose another supplier. Allows the incumbent utility to switch customers to an affiliated company only upon 60 days' written notice.

Imposes safety and reliability requirements for transmission and distribution systems. Allows utilities to recover the costs of maintaining safety and reliability through the rates charged for transmission and distribution services. Requires a certificate of public convenience and necessity for future expansion of transmission or distribution facilities, if such a certificate is currently required.

Pending the implementation date, requires incumbent utilities to continue to serve all customers within their service territories as they have done in the past. Allows utilities to recover, through charges collected from current customers, "transition costs", defined to include, but not be limited to, all prudently incurred capital costs, deferred charges that exist because of current regulatory practices, costs of approved demand­side management and conservation programs, long­term supply and fuel contracts, issuance and servicing costs of bonds issued in connection with restructuring plans, and the retirement of debt or equity capital of the utility during the transition period. Requires a showing before the PUC or local governing body of the amount of transition costs that may be recovered.

Contains provisions for the recovery of "implementation costs" and "air quality improvement costs" similar to those applicable to "transition costs". In addition, allows the collection of "public benefit charges", limited to an amount equal to 0.5% of the utility's 1998 retail electric sales revenue, annually for 3 years, to fund low­income energy assistance, low­income weatherization, community aesthetics, research and development on renewable energy sources, and other purposes. Requires all customers to pay their share of implementation charges, transition charges, air quality improvement charges, or public benefit charges through a non­bypassable charge as part of distribution service. Requires customers who do not use the transmission or distribution system of the utility and who can avoid the non­bypassable distribution charge to pay an "exit fee" for the privilege of switching.

Beginning on or before January 1, 2002, requires all electric utility bills to Colorado consumers provided by non­exempt utilities to include a breakdown of the component costs included in the charge on each bill and requires the PUC or local governing body of each utility to adopt rules for discontinuation of service for nonpayment.

Establishes standards for licensing of electric suppliers, including the provision of a toll­free phone number for use by customers, a business address within the state, proof of financial integrity, and access to adequate reserves. Allows the PUC to require a supplier to post a performance bond and to file annual reports in addition to paying reasonable administrative fees. Requires each electric supplier to identify, on a percentage basis, the type of fuel it uses to generate electricity and to justify any claims it may make regarding the environmental benefits associated with the electricity it supplies.

Allows revocation of licenses on specified grounds. Prohibits "slamming" (switching a customer from one supplier to another without the customer's permission) and prohibits the use of "negative option" contracts or devices with similar effect.

Declares that this act is not intended to adversely affect the tax structure of the state and local governments. States that taxes should be imposed by each respective jurisdiction in a manner that equitably distributes the burden of taxation and does not place any electric supplier at a competitive disadvantage. Calls upon the department of revenue to conduct an analysis of how, if at all, state and local tax revenues are affected by the restructuring of the retail electric supply market and to recommend any legislation necessary to avoid undesirable results.

Legislatively repeals current PUC rules on integrated resource planning. Requires the PUC to adopt a new funding mechanism for its administrative expenses that is not based solely on the gross operating revenues derived by each utility from its intrastate utility business.

Creates a species of financial instruments, termed "restructuring bonds", which a utility may issue with the permission of the PUC or local governing body, for the purpose of financing the payment of transition costs, air quality improvement costs, implementation costs, the recovery of "fixed restructuring amounts", and the creation of "restructuring property", which includes the right to receive transition and other charges from customers. Calls for the incorporation of any restrictions on the use of such bonds in a "financing order" issued by the PUC or local governing body. (All quoted terms are defined in the act.) Makes financing orders binding and essentially irrevocable by future action of the PUC or governing body in regard to the terms and conditions for repayment of restructuring bonds.

Specifies that restructuring bonds are non­recourse except as to restructuring property and do not obligate the state or any political subdivision of the state to pledge tax revenue to repay them. Requires each bond and offering document to carry a notice to that effect. Allows the utility to grant bondholders preferential rights to restructuring property, subject to the utility's continuing obligation to use such assets to serve customers.

Sets forth special provisions for the granting, perfection, and enforcement of security interests in restructuring property that supersede comparable provisions in article 9 of the "Uniform Commercial Code". Exempts restructuring bonds from the state securities laws, but requires that copies of all prospectus and disclosure documents be filed with the securities commissioner.

Takes effect July 1, 1998.


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 4.6

Electric Utility Restructuring

and Consumer Choice Act

40­4.6­101.  Electric utility restructuring and consumer choice act ­ legislative declaration. (1)  THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS THE "ELECTRIC UTILITY RESTRUCTURING AND CONSUMER CHOICE ACT".

(2)  THE GENERAL ASSEMBLY FINDS, DETERMINES, AND DECLARES THAT:

(a)  UNDER CURRENT COLORADO LAW, THE DOCTRINE OF REGULATED MONOPOLY OFFERS TO PUBLIC UTILITIES THAT HOLD CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY THE EXCLUSIVE RIGHT TO PROVIDE RETAIL ELECTRIC SERVICE TO CONSUMERS WITHIN DESIGNATED SERVICE TERRITORIES, EXCEPT FOR CERTAIN CIRCUMSTANCES INVOLVING ANNEXATIONS BY MUNICIPALITIES OPERATING MUNICIPAL UTILITIES. PUBLIC UTILITIES OBTAIN ELECTRIC SUPPLY BY EITHER GENERATING ELECTRICITY THEMSELVES OR PURCHASING ELECTRICITY FROM OTHER GENERATORS. PUBLIC UTILITIES DELIVER THE ELECTRICITY TO CONSUMERS OVER TRANSMISSION AND DISTRIBUTION SYSTEMS. PUBLIC UTILITIES ARE OBLIGATED TO SERVE ALL ELECTRIC CONSUMERS WITHIN THEIR DESIGNATED SERVICE TERRITORIES AND TO PLAN TO HAVE AVAILABLE SUFFICIENT ELECTRIC SUPPLY AND TRANSMISSION AND DISTRIBUTION FACILITIES TO MEET THAT CONSUMER DEMAND. THIS REGULATORY SYSTEM HAS PROVIDED COLORADO CONSUMERS WITH RELIABLE, REASONABLY­PRICED ELECTRICITY FOR MANY DECADES.

(b)  IN OTHER STATES, THE GENERATION AND SALE OF ELECTRIC SUPPLY IS BECOMING A COMPETITIVE INDUSTRY. A MORE COMPETITIVE ELECTRIC SUPPLY MARKET IS EXPECTED TO LOWER ELECTRICITY PRICES FOR CONSUMERS, CREATE BUSINESS OPPORTUNITIES, IMPROVE ENERGY EFFICIENCY, ENCOURAGE THE DEVELOPMENT OF MORE DIVERSE SERVICES, AND STIMULATE NEW TECHNOLOGIES. COLORADO CONSUMERS SHOULD HAVE THE FREEDOM TO CHOOSE THEIR SUPPLIER OF ELECTRICITY IN A COMPETITIVE MARKET AS SOON AS IT IS ADMINISTRATIVELY FEASIBLE TO RESTRUCTURE THE CURRENT INDUSTRY TO PROVIDE THIS CHOICE. THIS ARTICLE IS INTENDED TO OFFER CHOICE TO COLORADO CONSUMERS WHILE RECOGNIZING THE UNIQUE AND VARIED STRUCTURE OF THE ELECTRIC INDUSTRY IN COLORADO.

(c)  TO AVOID THE BURDENING OF COLORADO STREETS, HIGHWAYS, AND LANDSCAPES WITH DUPLICATIVE ELECTRIC FACILITIES, THE TRANSMISSION AND DISTRIBUTION OF ELECTRICITY SHALL REMAIN SUBJECT TO THE DOCTRINE OF REGULATED MONOPOLY AS IT CURRENTLY EXISTS.

(d)  PUBLIC UTILITIES CURRENTLY PROVIDE AND WILL PROVIDE IN THE FUTURE PRODUCTS AND SERVICES IN ADDITION TO ELECTRIC SUPPLY, TRANSMISSION, AND DISTRIBUTION SERVICE. THESE PRODUCTS AND SERVICES ARE AVAILABLE FROM NONREGULATED PROVIDERS IN THE COMPETITIVE MARKETPLACE. PUBLIC UTILITIES SHOULD BE PERMITTED TO OFFER THESE SERVICES ON A NONREGULATED BASIS.

(e)  THE PUBLIC INTEREST REQUIRES THE CONTINUED PROTECTION OF CONSUMERS THROUGH:

(I)  LICENSING OF ELECTRIC SUPPLIERS;

(II)  PROVISION OF INFORMATION TO CONSUMERS REGARDING ELECTRIC SUPPLY SERVICE;

(III)  CONTINUED FUNDING FOR PUBLIC BENEFIT PROGRAMS FOR LOW­INCOME ENERGY ASSISTANCE AND LOW­INCOME CUSTOMER WEATHERIZATION;

(IV)  ASSURANCE OF SERVICE RELIABILITY AND QUALITY;

(V)  ONGOING RESEARCH AND DEVELOPMENT FOR COMMERCIALIZING RENEWABLE ENERGY RESOURCES IN COLORADO FUNDED BY ELECTRICITY CONSUMPTION;

(VI)  IMPROVING THE ENVIRONMENTAL QUALITY OF THE STATE OF COLORADO; AND

(VII)  PRESERVATION OF SERVICE FOR ALL CUSTOMERS.

(f)  THE TRANSITION TO COMPETITION MUST PRESERVE THE FINANCIAL INTEGRITY OF PUBLIC UTILITIES THROUGH MECHANISMS THAT ASSURE THE ABILITY OF PUBLIC UTILITIES FULLY TO RECOVER ALL PRUDENT INVESTMENTS MADE AND EXPENSES INCURRED TO SERVE COLORADO CONSUMERS UNDER THE DOCTRINE OF REGULATED MONOPOLY AND ALL EXPENSES INCURRED TO IMPLEMENT THE CHANGES REQUIRED BY THIS ARTICLE TO PROVIDE CUSTOMER CHOICE.

(g)  THE PUBLIC INTEREST IS FURTHER SERVED BY PROVIDING A FUNDING MECHANISM TO ENCOURAGE COLORADO PUBLIC UTILITIES TO REDUCE AIR EMISSIONS FROM THEIR GENERATING PLANTS BEYOND THE LEVELS CURRENTLY PERMITTED BY LAW. SUCH REDUCTIONS WILL RESULT IN AN IMPROVEMENT IN THE QUALITY OF LIFE AND HEALTH OF COLORADO CITIZENS AND AN INCREASE IN THE ATTRACTIVENESS OF COLORADO AS A PLACE TO LIVE AND CONDUCT BUSINESS.

(h)  THEREFORE, IT IS HEREBY DECLARED TO BE A MATTER OF STATEWIDE CONCERN THAT COLORADO PUBLIC UTILITIES RESTRUCTURE THEIR OPERATIONS IN ACCORDANCE WITH THIS ARTICLE.

40­4.6­102.  Definitions. AS USED IN THIS ARTICLE, UNLESS THE CONTEXT OTHERWISE REQUIRES:

(1)  "AFFILIATE" OF A PERSON MEANS A PERSON THAT DIRECTLY OR INDIRECTLY, THROUGH ONE OR MORE INTERMEDIARIES, CONTROLS, IS CONTROLLED BY, OR IS UNDER COMMON CONTROL WITH, ANOTHER PERSON.

(2)  "AIR QUALITY IMPROVEMENT CHARGE" MEANS A NON­BYPASSABLE RATE OR CHARGE TO BE IMPOSED ON A CUSTOMER TO PAY THE CUSTOMER'S SHARE OF AIR QUALITY IMPROVEMENT COSTS.

(3)  "AIR QUALITY IMPROVEMENT COSTS" MEANS THE LIFE CYCLE COSTS, INCLUDING CAPITAL, OPERATING, MAINTENANCE, AND FUEL COSTS AND COSTS ASSOCIATED WITH DEGRADATION OF HEAT RATE, INCURRED OR TO BE INCURRED AT EXISTING ELECTRIC GENERATION FACILITIES LOCATED IN COLORADO BY A PUBLIC UTILITY PURSUANT TO AN ENFORCEABLE AIR QUALITY COMMITMENT ENTERED INTO ON OR BEFORE JANUARY 1, 2010.

(4)  "ANCILLARY SERVICES" MEANS THE SERVICES REQUIRED TO PROVIDE RELIABLE TRANSMISSION AND DISTRIBUTION SERVICE, INCLUDING, BUT NOT LIMITED TO, VOLTAGE SUPPORT, RESERVES, ENERGY IMBALANCE SERVICE, AND THE REDUCTION OF LOSSES.

(5)  "ASSIGNEE" MEANS ANY PERSON OR ENTITY, INCLUDING A CORPORATION, PARTNERSHIP, BOARD, TRUST, PUBLIC AUTHORITY, OR FINANCING VEHICLE, TO WHICH A UTILITY ASSIGNS, SELLS, OR TRANSFERS, OTHER THAN AS SECURITY, ALL OR A PORTION OF THE UTILITY'S INTEREST IN OR RIGHT TO RESTRUCTURING PROPERTY. THE TERM ALSO INCLUDES A PERSON OR ENTITY, CORPORATION, PUBLIC AUTHORITY, PARTNERSHIP, TRUST, OR FINANCING VEHICLE TO WHICH A DIRECT ASSIGNEE ASSIGNS, SELLS, OR TRANSFERS, OTHER THAN AS SECURITY, THE ASSIGNEE'S INTEREST IN OR RIGHT TO RESTRUCTURING PROPERTY.

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

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

(8)  "COST RECOVERY PERIOD" MEANS A PERIOD ALLOWED BY THE COMMISSION OR BY THE LOCAL GOVERNING BODY FOR THE COLLECTION OF NON­BYPASSABLE RATES OR CHARGES.

(9)  "CUSTOMER" OR "CONSUMER" MEANS A RETAIL ELECTRIC CUSTOMER OR CONSUMER.

(10) "DISTRIBUTION FACILITIES" MEANS THOSE FACILITIES BY AND THROUGH WHICH ELECTRICITY IS RECEIVED FROM A TRANSMISSION SERVICE PROVIDER AND DISTRIBUTED TO THE CUSTOMER AND THAT ARE OWNED AND OPERATED BY A DISTRIBUTION SERVICE PROVIDER.

(11)  "DISTRIBUTION SERVICE" MEANS THE SERVICES PROVIDED BY A PUBLIC UTILITY TO DELIVER AND ACCOUNT FOR ELECTRIC SUPPLY FROM THE TRANSMISSION SERVICE PROVIDER TO THE CUSTOMER.

(12)  "DISTRIBUTION SERVICE PROVIDER" MEANS A PUBLIC UTILITY OWNING AND OPERATING DISTRIBUTION FACILITIES FOR DISTRIBUTION OF ELECTRICITY TO THE PUBLIC. SUCH PUBLIC UTILITY PROVIDES DISTRIBUTION SERVICE BY VIRTUE OF A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY OR IS A MUNICIPAL UTILITY PROVIDING DISTRIBUTION SERVICE WITHIN MUNICIPAL CORPORATE LIMITS.

(13)  "ELECTRIC SUPPLIER" OR "SUPPLIER" MEANS ANY PERSON, INCLUDING A PUBLIC UTILITY, OFFERING TO SELL ELECTRIC SUPPLY TO RETAIL CUSTOMERS IN THE STATE OF COLORADO.

(14)  "ELECTRIC SUPPLY" MEANS THE COMMODITY OF ELECTRICITY GENERATED FOR CONSUMPTION BY CUSTOMERS.

(15)  "ENERGY­RELATED SERVICES" MEANS SERVICES PROVIDED BY ANY PERSON, INCLUDING A PUBLIC UTILITY, OTHER THAN ELECTRIC SUPPLY, TRANSMISSION SERVICE, DISTRIBUTION SERVICE, AND ANCILLARY SERVICES.

(16)  "ENFORCEABLE AIR QUALITY COMMITMENT" MEANS ANY AGREEMENT, ORDER, PERMIT, CONSENT DECREE, LAW, OR ADMINISTRATIVE RULE REQUIRING A REDUCTION IN AIR EMISSION RATES BELOW CALENDAR YEAR 1995 ANNUAL AVERAGE EMISSION RATES, AS DETERMINED ON EITHER A POUND PER MILLION BTU OR TONS PER YEAR BASIS, ISSUED OR APPROVED BY FEDERAL OR STATE AUTHORITIES HAVING OVERSIGHT OVER THE EMISSION LEVELS AT EXISTING ELECTRIC GENERATION FACILITIES LOCATED IN COLORADO.

(17)  "EXIT FEE" MEANS A PAYMENT, MADE IN ONE OR MORE INSTALLMENTS, THAT APPROXIMATES THE TOTAL AMOUNT OF NON­BYPASSABLE CHARGES THAT THE CUSTOMER WOULD PAY IF THE CUSTOMER CONTINUED TO OBTAIN SERVICE FROM THE UTILITY.

(18)  "FINANCING ORDER" MEANS AN IRREVOCABLE ORDER OF THE COMMISSION OR THE LOCAL GOVERNING BODY ADOPTED IN ACCORDANCE WITH SECTION 40­4.6­126 THAT AUTHORIZES THE IMPOSITION AND COLLECTION OF FIXED RESTRUCTURING AMOUNTS AND THE ISSUANCE OF RESTRUCTURING BONDS.

(19) (a)  "FIXED RESTRUCTURING AMOUNTS" MEANS THOSE NON­BYPASSABLE RATES OR CHARGES THAT ARE AUTHORIZED BY THE COMMISSION OR A LOCAL GOVERNING BODY IN A FINANCING ORDER TO BE IMPOSED AND COLLECTED BY A UTILITY OR ITS SUCCESSOR OR BY ANY OTHER ENTITY THAT PROVIDES TRANSMISSION OR DISTRIBUTION SERVICE TO RECOVER:

(I)  TRANSITION COSTS;

(II)  AIR QUALITY IMPROVEMENT COSTS;

(III)  IMPLEMENTATION COSTS; AND

(IV)  THE COSTS OF RECOVERING, REIMBURSING, FINANCING, OR REFINANCING THE TRANSITION COSTS, AIR QUALITY IMPROVEMENT COSTS, AND IMPLEMENTATION COSTS AND TRANSFERRING RESTRUCTURING PROPERTY THROUGH A PLAN APPROVED BY THE COMMISSION OR THE LOCAL GOVERNING BODY IN A FINANCING ORDER.

(b)  "FIXED RESTRUCTURING AMOUNTS" ALSO INCLUDES, WITHOUT DUPLICATION OF THE COSTS REFERRED TO IN PARAGRAPH (a) OF THIS SUBSECTION (19), THE COSTS OF ISSUING, SERVICING, REFINANCING, AND RETIRING RESTRUCTURING BONDS, INCLUDING ACCRUED INTEREST; THE COSTS OF RESERVES, CREDIT ENHANCEMENT, INTEREST RATE CAP, SWAP, COLLAR, YIELD MAINTENANCE, MATURITY GUARANTEE, OR OTHER HEDGING AGREEMENTS; THE ACQUISITION OR REDEMPTION OF PREMIUMS, COSTS OF DEFEASANCE, AND OTHER PREMIUMS; AND OTHER RELATED FEES, COSTS, AND CHARGES RELATING TO THE ISSUANCE OF RESTRUCTURING BONDS OR THE ASSIGNMENT, SALE, OR OTHER TRANSFER OF RESTRUCTURING PROPERTY. IF REQUESTED BY THE UTILITY IN THE UTILITY'S APPLICATION FOR A FINANCING ORDER, FIXED RESTRUCTURING AMOUNTS SHALL INCLUDE NON­BYPASSABLE RATES OR CHARGES TO RECOVER FEDERAL AND STATE TAXES FOR THE COST RECOVERY PERIOD.

(20)  "FUNCTIONALLY SEPARATE" MEANS TO SEPARATE INTO DIVISIONS OR BUSINESS UNITS A UTILITY'S ASSETS AND OPERATIONS WITH RESPECT TO ITS TRANSMISSION AND DISTRIBUTION SERVICES FROM ITS ENERGY SUPPLY AND ENERGY­RELATED SERVICES, WITH SEPARATE ACCOUNTING FOR EACH DIVISION OR BUSINESS UNIT WITHIN THE SAME LEGAL ENTITY.

(21)  "IMPLEMENTATION CHARGE" MEANS THE NON­BYPASSABLE RATE OR CHARGE TO BE IMPOSED ON A CUSTOMER TO PAY THE CUSTOMER'S SHARE OF IMPLEMENTATION COSTS.

(22)  "IMPLEMENTATION COSTS" MEANS THE COSTS INCURRED BY A PUBLIC UTILITY TO IMPLEMENT CUSTOMER CHOICE AS REQUIRED BY THIS ARTICLE. SUCH COSTS INCLUDE, BUT ARE NOT LIMITED TO, THE COSTS OF CUSTOMER EDUCATION, DEVELOPMENT OF SYSTEMS AND ORGANIZATIONS TO OFFER ACCESS TO TRANSMISSION AND DISTRIBUTION FACILITIES, RESTRUCTURING OF UTILITY OPERATIONS AND EQUIPMENT TO COMPLY WITH THIS ARTICLE, AND RETRAINING WORKERS WHOSE JOBS MAY BE AT RISK DUE TO THE RESTRUCTURING CONTEMPLATED BY THIS ARTICLE.

(23)  "IMPLEMENTATION DATE" MEANS THE DATE UPON WHICH CUSTOMER CHOICE IS MANDATED BY THIS ARTICLE, OR IN THE CASE OF A MUNICIPAL UTILITY OR COOPERATIVE ELECTRIC ASSOCIATION, THE DATE UPON WHICH CUSTOMER CHOICE IS OFFERED BY THE LOCAL GOVERNING BODY.

(24)  "LOCAL GOVERNING BODY" MEANS:

(a)  THE GOVERNING BODY OF A MUNICIPAL UTILITY; AND

(b)  THE BOARD OF DIRECTORS OF A COOPERATIVE ELECTRIC ASSOCIATION UNLESS THE COOPERATIVE ELECTRIC ASSOCIATION HAS ELECTED TO REIMPOSE COMMISSION REGULATION PURSUANT TO SECTION 40­9.5­113.

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

(26)  "MUNICIPAL UTILITY" MEANS AN ELECTRIC UTILITY OWNED BY A MUNICIPALITY; EXCEPT THAT, 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.

(27)  "NON­BYPASSABLE RATES OR CHARGES" MEANS RATES OR CHARGES IMPOSED AND COLLECTED AS PART OF TRANSMISSION OR DISTRIBUTION SERVICE AND THAT HAVE BEEN APPROVED BY THE COMMISSION OR THE LOCAL GOVERNING BODY, AS THE CASE MAY BE, TO PAY TRANSITION COSTS, AIR QUALITY IMPROVEMENT COSTS, IMPLEMENTATION COSTS, AND PUBLIC BENEFIT COSTS. NON­BYPASSABLE RATES OR CHARGES SHALL BE PAID BY ALL CUSTOMERS WHO ARE LOCATED IN THE SERVICE TERRITORY OF THE PUBLIC UTILITY EVEN IF THE CUSTOMER NO LONGER PURCHASES ELECTRIC SUPPLY OR OTHER SERVICES FROM THE PUBLIC UTILITY.

(28) (a)  "PERSON" MEANS ANY INDIVIDUAL, CORPORATION, LIMITED LIABILITY COMPANY, ASSOCIATION, GENERAL OR LIMITED PARTNERSHIP, JOINT VENTURE, TRUST, JOINT STOCK COMPANY, ESTATE, UNINCORPORATED ORGANIZATION, OR OTHER LEGAL ENTITY OR ORGANIZATION.

(b)  "PERSON" ALSO INCLUDES:

(I)  A MUNICIPALITY;

(II)  A STATE OR STATE AGENCY, ANY POLITICAL SUBDIVISION OF A STATE, AND ANY INSTRUMENTALITY OF A STATE;

(III)  A FEDERAL AGENCY; AND

(IV)  A FOREIGN GOVERNMENT OR ANY POLITICAL SUBDIVISION THEREOF.

(29)  "PILOT PROGRAM" MEANS A PROGRAM THAT OFFERS CHOICE OF ELECTRIC SUPPLIERS TO A SAMPLE OF CUSTOMERS IN ADVANCE OF THE IMPLEMENTATION DATE.

(30)  "PUBLIC BENEFIT CHARGE" MEANS A NON­BYPASSABLE RATE OR CHARGE TO BE IMPOSED ON A CUSTOMER TO PAY THE CUSTOMER'S SHARE OF COSTS OF PUBLIC BENEFIT PROGRAMS.

(31)  "PUBLIC BENEFIT COSTS" MEANS THE COSTS OF LOW­INCOME ENERGY ASSISTANCE, LOW­INCOME CUSTOMER WEATHERIZATION, PROGRAMS PROMOTING COMMUNITY AESTHETICS, AND RESEARCH AND DEVELOPMENT FOR THE COMMERCIALIZATION OF RENEWABLE RESOURCES THAT THE COMMISSION OR THE LOCAL GOVERNING BODY AUTHORIZE THE UTILITY TO IMPOSE ON AND COLLECT FROM CUSTOMERS AFTER THE IMPLEMENTATION OF CUSTOMER CHOICE.

(32)  "PUBLIC BENEFIT PROGRAMS" MEANS PROGRAMS FOR LOW­INCOME ENERGY ASSISTANCE, LOW­INCOME CUSTOMER WEATHERIZATION, COMMUNITY AESTHETICS, AND RESEARCH AND DEVELOPMENT FOR THE COMMERCIALIZATION OF RENEWABLE RESOURCES.

(33)  "PUBLIC UTILITY" OR "UTILITY" HAS THE SAME MEANING AS SET FORTH IN SECTION 40­1­103 AND INCLUDES COOPERATIVE ELECTRIC ASSOCIATIONS AND MUNICIPAL UTILITIES.

(34)  "RENEWABLE RESOURCE" MEANS AN ENERGY SOURCE THAT IS REGENERATIVE OR VIRTUALLY INEXHAUSTIBLE, INCLUDING, WITHOUT LIMITATION, SOLAR, WIND, GEOTHERMAL, BIOMASS, AND WATER POWER.

(35)  "REQUIREMENTS CONTRACT" MEANS A CONTRACT, IN EFFECT ON THE EFFECTIVE DATE OF THIS ARTICLE, BETWEEN TWO UTILITIES FOR THE SUPPLY OF ELECTRIC POWER OR ENERGY, WHICH CONTRACT REQUIRES THE SELLING UTILITY TO SUPPLY TO THE PURCHASING UTILITY AN UNSPECIFIED AMOUNT OF ELECTRIC POWER OR ENERGY THAT IS USED BY THE PURCHASING UTILITY TO MEET, EITHER IN FULL OR IN PART, ITS RETAIL LOAD OBLIGATIONS PRIOR TO THE IMPLEMENTATION OF CUSTOMER CHOICE UNDER THIS ARTICLE. AN ELECTRIC SUPPLY CONTRACT THAT REQUIRES A PURCHASING UTILITY TO PURCHASE A DISCRETE AMOUNT OF ELECTRIC POWER OR ENERGY IRRESPECTIVE OF THE UTILITY'S LOAD OBLIGATION IS NOT A REQUIREMENTS CONTRACT TO THE EXTENT OF THE OBLIGATED PURCHASE.

(36)  "REQUIREMENTS SUPPLIER" MEANS THE SELLER OF ELECTRIC POWER OR ENERGY UNDER A REQUIREMENTS CONTRACT.

(37)  "RESTRUCTURING BOND" MEANS ANY BOND, DEBENTURE, NOTE, INTERIM CERTIFICATE, COLLATERAL, TRUST CERTIFICATE, CERTIFICATE OF PARTICIPATION OR OF BENEFICIAL INTEREST, OR OTHER EVIDENCE OF INDEBTEDNESS OR OWNERSHIP THAT IS SECURED BY OR PAYABLE FROM FIXED RESTRUCTURING AMOUNTS OR RESTRUCTURING PROPERTY.

(38)  "RESTRUCTURING BONDHOLDER" MEANS A HOLDER OF RESTRUCTURING BONDS AND INCLUDES A TRUSTEE, COLLATERAL AGENT, OR OTHER PERSON ACTING FOR THE BENEFIT OF SUCH HOLDER.

(39)  "RESTRUCTURING PROPERTY" MEANS THE IRREVOCABLE PROPERTY RIGHT CREATED UNDER THIS ARTICLE AND BY AN IRREVOCABLE FINANCING ORDER REPRESENTING, WITHOUT LIMITATION, THE IRREVOCABLE RIGHT, TITLE, AND INTEREST OF A UTILITY OR ITS ASSIGNEE TO RECEIVE, THROUGH TRANSITION CHARGES, AIR QUALITY IMPROVEMENT CHARGES, OR IMPLEMENTATION CHARGES, AMOUNTS SUFFICIENT TO RECOVER ALL OF ITS FIXED RESTRUCTURING AMOUNTS. THE TERM INCLUDES ALL IRREVOCABLE RIGHT, TITLE, AND INTEREST OF A UTILITY OR ASSIGNEE IN THE FINANCING ORDER AND IN ALL REVENUES, COLLECTIONS, CLAIMS, PAYMENTS, MONEY, OR PROCEEDS OF OR ARISING FROM OR CONSTITUTING FIXED RESTRUCTURING AMOUNTS THAT ARE THE SUBJECT OF A FINANCING ORDER, INCLUDING THOSE NON­BYPASSABLE RATES AND OTHER CHARGES AND FIXED RESTRUCTURING AMOUNTS THAT ARE AUTHORIZED BY THE COMMISSION OR LOCAL GOVERNING BODY IN THE FINANCING ORDER TO BE IMPOSED ON AND COLLECTED FROM CUSTOMERS OF TRANSMISSION OR DISTRIBUTION SERVICES. RESTRUCTURING PROPERTY SHALL CONSTITUTE A CURRENT PROPERTY RIGHT NOTWITHSTANDING THE FACT THAT THE VALUE OF THE PROPERTY RIGHT MAY DEPEND UPON CONSUMERS USING ELECTRICITY OR, IN THOSE INSTANCES WHERE CONSUMERS ARE CUSTOMERS OF A PARTICULAR ELECTRIC UTILITY, SUCH ELECTRIC UTILITY PERFORMING CERTAIN SERVICES. PROPERTY OR AMOUNTS COLLECTED OR RECOVERED IN RESPECT TO THE PROPERTY RIGHTS DESCRIBED IN THIS SUBSECTION (39) OR THE DISPOSITION OF THOSE PROPERTY RIGHTS, INCLUDING AMOUNTS ARISING FROM TEMPORARY INVESTMENT OR REINVESTMENT OF SUCH AMOUNTS, ARE PROCEEDS OF THE RESTRUCTURING PROPERTY, WHENEVER REALIZED.

(40)  "SERVICE TERRITORY" MEANS THE GEOGRAPHIC TERRITORY IN WHICH THE UTILITY PROVIDES DISTRIBUTION SERVICE. SERVICE TERRITORY IS ESTABLISHED BY CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY ISSUED BY THE COMMISSION UNDER ARTICLES 5 AND 9.5 OF THIS TITLE TO EXERCISE FRANCHISE RIGHTS OR TO SERVE IN A DESIGNATED GEOGRAPHIC AREA; EXCEPT THAT MUNICIPAL UTILITIES SERVE SERVICE TERRITORY WITHIN THE INCORPORATED LIMITS OF THE MUNICIPALITY THAT OWNS THE MUNICIPAL UTILITY WITHOUT A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY.

(41)  "TRANSITION CHARGE" MEANS A NON­BYPASSABLE RATE OR CHARGE TO BE IMPOSED ON A CUSTOMER TO PAY THE CUSTOMER'S SHARE OF TRANSITION COSTS.

(42) (a)  "TRANSITION COSTS" MEANS A PUBLIC UTILITY'S LEGITIMATE, VERIFIABLE, AND PRUDENT INVESTMENTS, COMMITMENTS, AND EXPENSES, INCLUDING COSTS OF CAPITAL, INCURRED IN THE PROVISION OF ELECTRIC SERVICES TO RETAIL CUSTOMERS IN COLORADO, UP TO AND INCLUDING THE DATE OF IMPLEMENTATION OF CUSTOMER CHOICE, THAT ARE NO LONGER RECOVERABLE AS A RESULT OF THE IMPLEMENTATION OF THIS ARTICLE OR OF FEDERAL LAW REQUIRING RETAIL OPEN ACCESS OR CUSTOMER CHOICE.

(b)  "TRANSITION COSTS" INCLUDE, BUT ARE NOT LIMITED TO, THE COSTS OF:

(I)  REGULATORY ASSETS AND DEFERRED CHARGES THAT EXIST BECAUSE OF CURRENT REGULATORY PRACTICES;

(II)  DEMAND­SIDE MANAGEMENT AND CONSERVATION INVESTMENTS MADE PURSUANT TO PLANS APPROVED BY THE COMMISSION OR BY THE LOCAL GOVERNING BODY;

(III)  OBLIGATIONS UNDER POWER PURCHASE CONTRACTS WITH EITHER PUBLIC UTILITIES OR NONUTILITIES, INCLUDING QUALIFYING FACILITY CONTRACTS ENTERED INTO PURSUANT TO THE FEDERAL "PUBLIC UTILITIES REGULATORY POLICIES ACT OF 1978";

(IV)  GENERATION INVESTMENTS AND FUEL SUPPLY COMMITMENTS OR OTHER OBLIGATIONS AND COSTS ARISING FROM THESE INVESTMENTS AND COMMITMENTS;

(V)  RENEGOTIATION OR BUYOUT OF THE EXISTING ABOVE­MARKET POWER PURCHASE CONTRACTS AND FUEL CONTRACTS, INCLUDING COSTS ASSOCIATED WITH SUCH RENEGOTIATION OR BUYOUT;

(VI)  ISSUING, REFINANCING, AND SERVICING RESTRUCTURING BONDS, INCLUDING ACCRUED INTEREST AND ACQUISITION OR REDEMPTION PREMIUMS AND OTHER RELATED FEES, COSTS, AND CHARGES TO ASSIGN, SELL, OR OTHERWISE TRANSFER RESTRUCTURING PROPERTY; AND

(VII)  REFINANCING, REDUCING, AND RETIRING DEBT OR EQUITY CAPITAL OF THE PUBLIC UTILITY OR ITS AFFILIATE AND ASSOCIATED FEDERAL AND STATE TAX LIABILITIES, INCLUDING ACCRUED INTEREST AND ACQUISITION OR REDEMPTION PREMIUMS, COST OF DEFEASANCE, AND OTHER COSTS AND CHARGES RELATED TO SUCH REFINANCING, REDUCING, OR RETIRING OF DEBT.

(43)  "TRANSMISSION FACILITIES" MEANS THOSE FACILITIES THAT ARE USED TO PROVIDE TRANSMISSION SERVICE AS DETERMINED BY THE FEDERAL ENERGY REGULATORY COMMISSION AND THE COLORADO PUBLIC UTILITIES COMMISSION.

(44)  "TRANSMISSION SERVICE" MEANS THE TRANSMITTING OF POWER IN BULK AT HIGH VOLTAGES.

(45)  "TRANSMISSION SERVICE PROVIDER" MEANS A PERSON OWNING AND OPERATING TRANSMISSION FACILITIES.

40­4.6­103.  Customer choice. (1)  EXCEPT AS PROVIDED IN SECTION 40­4.6­106, AFTER THE IMPLEMENTATION DATE, ALL COLORADO CUSTOMERS SHALL BE ALLOWED TO PURCHASE ELECTRIC SUPPLY FROM THE ELECTRIC SUPPLIER OF THEIR CHOICE IN ACCORDANCE WITH THIS ARTICLE. THERE SHALL BE NO REGULATION OF ELECTRIC SUPPLY EXCEPT AS PROVIDED BY THIS ARTICLE, AND PUBLIC UTILITIES SHALL BE RELIEVED OF THE OBLIGATION TO PLAN FOR AND PROVIDE ELECTRIC SUPPLY TO ALL CUSTOMERS LOCATED WITHIN THEIR SERVICE TERRITORIES.

(2)  TRANSMISSION SERVICE AND DISTRIBUTION SERVICE SHALL CONTINUE TO BE GOVERNED BY THE DOCTRINE OF REGULATED MONOPOLY. ALL PUBLIC UTILITIES SHALL CONTINUE TO HAVE THE OBLIGATION TO CONNECT ALL CUSTOMERS WHO REQUEST CONNECTION WITHIN THEIR SERVICE TERRITORIES AND TO PROVIDE TRANSMISSION AND DISTRIBUTION SERVICES TO THESE CUSTOMERS AND TO ALL ELECTRIC SUPPLIERS ON NONDISCRIMINATORY TERMS AND CONDITIONS. PUBLIC UTILITIES SHALL PROVIDE TRANSMISSION AND DISTRIBUTION SERVICES TO ALL CUSTOMERS WITHIN SERVICE TERRITORIES CERTIFICATED BY THE COMMISSION UNDER ARTICLES 5 AND 9.5 OF THIS TITLE. MUNICIPAL UTILITIES MAY PROVIDE TRANSMISSION SERVICE BOTH WITHIN AND OUTSIDE OF MUNICIPAL LIMITS AND DISTRIBUTION SERVICE WITHIN THE INCORPORATED LIMITS OF THE MUNICIPALITY WITHOUT A COMMISSION CERTIFICATE. TRANSMISSION AND DISTRIBUTION SERVICES SHALL CONTINUE TO BE REGULATED BY THE COMMISSION OR BY THE LOCAL GOVERNING BODY, AS THE CASE MAY BE, AS OTHERWISE PROVIDED IN THIS TITLE.

(3)  AFTER THE IMPLEMENTATION DATE, ALL PERSONS LOCATED WITHIN THE SERVICE TERRITORY OF THE UTILITY SHALL BE OBLIGATED TO PAY ALL NON­BYPASSABLE RATES AND CHARGES IMPOSED UNDER THIS ARTICLE UNTIL THE CHARGES EXPIRE OR, IF RESTRUCTURING BONDS HAVE BEEN ISSUED UNDER THIS ARTICLE, UNTIL ANY RESTRUCTURING BONDS HAVE BEEN PAID IN FULL, UNLESS SUCH PERSON HAS PAID AN EXIT FEE AS DEFINED IN SECTION 40­4.6­102 (17).

(4)  AFTER THE IMPLEMENTATION DATE, ENERGY­RELATED SERVICES SHALL NOT BE REGULATED.

40­4.6­104.  Implementation of customer choice. (1)  EXCEPT AS PROVIDED IN SECTION 40­4.6­106, A PUBLIC UTILITY SHALL PROVIDE CUSTOMER CHOICE OF ELECTRIC SUPPLIER FOR ALL CUSTOMERS ON OR BEFORE JANUARY 1, 2002.

(2) (a)  BEFORE THE IMPLEMENTATION DATE, PUBLIC UTILITIES MAY OPT TO CONDUCT ONE OR MORE CUSTOMER CHOICE PILOT PROGRAMS USING A SAMPLE OF CUSTOMERS. THE PURPOSE OF PILOT PROGRAMS SHALL BE TO GAIN EXPERIENCE WITH THE MARKET MECHANISMS AND INTERNAL SYSTEMS MODIFICATIONS NECESSARY TO PROVIDE CUSTOMER CHOICE AS REQUIRED BY THIS ARTICLE.

(b)  PUBLIC UTILITIES THAT HAVE RATES REGULATED BY THE COMMISSION MAY SUBMIT APPLICATIONS TO THE COMMISSION THAT DETAIL THE PROCEDURES TO BE USED TO CONDUCT THE PILOT PROGRAM. PUBLIC UTILITIES THAT HAVE RATES REGULATED BY THEIR LOCAL GOVERNING BODIES MAY SUBMIT PILOT PROGRAM APPLICATIONS TO THESE BODIES. THE COMMISSION OR THE LOCAL GOVERNING BODY SHALL APPROVE THE APPLICATION AS FILED OR MODIFY THE PROPOSED PILOT PROGRAM WITHIN SIXTY DAYS AFTER IT IS FILED.

(c)  CUSTOMERS WHO PARTICIPATE IN PILOT PROGRAMS SHALL BE PERMITTED TO PURCHASE ELECTRIC SUPPLY FROM THE SUPPLIER OF THEIR CHOICE. ALL ELECTRIC SUPPLIERS PARTICIPATING IN THE PILOT PROGRAM SHALL BE LICENSED BY THE COMMISSION UNDER SECTION 40­4.6­119.

(d)  UTILITIES MAY PARTICIPATE IN THE PILOT PROGRAMS AS ELECTRIC SUPPLIERS AND MAY OFFER ELECTRIC SUPPLY AT RATES, TERMS, AND CONDITIONS THAT DIFFER FROM THE UTILITIES' FILED TARIFFS. THE PROVISIONS OF SECTION 40­3­104.3 SHALL NOT APPLY TO THE CONTRACTS OFFERED DURING THE PILOT PROGRAMS.

(e)  A REPORT DESCRIBING AND ANALYZING THE RESULTS OF ANY PILOT PROGRAM UNDERTAKEN SHALL BE SUBMITTED TO THE COMMISSION OR THE LOCAL GOVERNING BODY BY THE PUBLIC UTILITY WITHIN EIGHTEEN MONTHS AFTER THE COMMENCEMENT OF THE PILOT PROGRAM.

40­4.6­105.  Restructuring plans. (1)  EXCEPT AS OTHERWISE PROVIDED IN SECTION 40­4.6­106, ALL PUBLIC UTILITIES SHALL SUBMIT A RESTRUCTURING PLAN EITHER TO THE COMMISSION OR TO THE LOCAL GOVERNING BODY NO LATER THAN JANUARY 1, 2000. THE RESTRUCTURING PLAN SHALL DEMONSTRATE THAT THE PUBLIC UTILITY MEETS ALL OF THE REQUIREMENTS OF THIS ARTICLE.

(2)  THE RESTRUCTURING PLAN SHALL CONTAIN THE CALCULATION OF THE PROJECTED TRANSITION COSTS, IMPLEMENTATION COSTS, AND PUBLIC BENEFIT COSTS THAT THE PUBLIC UTILITY DESIRES TO RECOVER THROUGH NON­BYPASSABLE RATES OR CHARGES.

(3)  THE RESTRUCTURING PLAN MAY INCLUDE A CALCULATION OF THE AIR QUALITY IMPROVEMENT COSTS THAT ARE THE SUBJECT OF AN ENFORCEABLE AIR QUALITY COMMITMENT AS OF THE DATE OF THE FILING OF THE RESTRUCTURING PLAN. A UTILITY MAY MAKE ADDITIONAL FILINGS TO RECOVER AIR QUALITY IMPROVEMENT COSTS OR TO IMPOSE AIR QUALITY IMPROVEMENT CHARGES AT LATER DATES, BOTH BEFORE AND AFTER THE IMPLEMENTATION DATE.

(4)  A PUBLIC HEARING SHALL BE HELD ON THE RESTRUCTURING PLAN. THE COMMISSION OR THE LOCAL GOVERNING BODY SHALL ISSUE A FINAL ORDER ON THE RESTRUCTURING PLAN WITHIN TWELVE MONTHS AFTER IT IS FILED. AS PART OF THE HEARING PROCESS ON THE RESTRUCTURING PLAN, THE COMMISSION OR THE LOCAL GOVERNING BODY SHALL DECIDE WHETHER THE PLACEMENT AND READING OF METERS AND THE BILLING OF ELECTRICITY SHALL BE TREATED AS DISTRIBUTION SERVICES OR ENERGY­RELATED SERVICES. IN MAKING THIS DETERMINATION, THE COMMISSION OR LOCAL GOVERNING BODY SHALL CONSIDER WHETHER TREATING THESE SERVICES AS ENERGY­RELATED SERVICES INTERFERES WITH THE PROVISION OF DISTRIBUTION SERVICES.

40­4.6­106.  Exemption. (1)  EXCEPT FOR THE PROVISIONS OF SECTION 40­4.6­110, MUNICIPAL UTILITIES AND COOPERATIVE ELECTRIC ASSOCIATIONS ARE EXEMPT FROM THE PROVISIONS OF THIS ARTICLE UNLESS THE LOCAL GOVERNING BODY FOR SUCH MUNICIPAL UTILITY OR COOPERATIVE ELECTRIC ASSOCIATION AFFIRMATIVELY CHOOSES TO PARTICIPATE IN THE INDUSTRY RESTRUCTURING REQUIRED BY THIS ARTICLE. THE LOCAL GOVERNING BODY MAY CHOOSE TO PARTICIPATE IN RESTRUCTURING BY THE ADOPTION OF AN APPROPRIATE ORDINANCE OR RESOLUTION EVIDENCING ITS AFFIRMATIVE INTENT TO SO PARTICIPATE.

(2)  A MUNICIPAL UTILITY OR COOPERATIVE ELECTRIC ASSOCIATION THAT DOES NOT AFFIRMATIVELY CHOOSE TO PARTICIPATE IN RESTRUCTURING SHALL BE PROHIBITED FROM SELLING ELECTRIC SUPPLY, EITHER DIRECTLY OR INDIRECTLY THROUGH AN AFFILIATE, TO CUSTOMERS OUTSIDE OF THE UTILITY=S SERVICE TERRITORY.

(3)  NOTWITHSTANDING SUBSECTION (2) OF THIS SECTION, A GENERATION AND TRANSMISSION COOPERATIVE OWNED EXCLUSIVELY BY DISTRIBUTION COOPERATIVE ELECTRIC ASSOCIATIONS, OR A GENERATION AND TRANSMISSION POWER AUTHORITY THAT IS OWNED EXCLUSIVELY BY MUNICIPAL UTILITY MEMBERS, MAY PROVIDE ELECTRIC SUPPLY TO CUSTOMERS OUTSIDE OF THE SERVICE TERRITORIES OF ITS MEMBERS IF AT LEAST TWO­THIRDS OF THE RETAIL ELECTRIC LOAD SERVED BY ITS MEMBERS IS SUBJECT TO RESTRUCTURING UNDER THIS ARTICLE.

(4)  IN ADDITION TO ITS EXISTING AUTHORITY, ANY MUNICIPAL UTILITY OR COOPERATIVE ELECTRIC ASSOCIATION THAT HAS CHOSEN TO PARTICIPATE IN RESTRUCTURING MAY FORM ALLIANCES, EITHER CONTRACTUAL OR CORPORATE IN NATURE, WITH OTHER MUNICIPAL UTILITIES, COOPERATIVE ELECTRIC ASSOCIATIONS, PUBLIC UTILITIES, ENERGY SUPPLIERS, PROVIDERS OF ENERGY­RELATED SERVICES, OR OTHER CORPORATIONS, EITHER WITHIN OR OUTSIDE OF THE BORDERS OF COLORADO, IN ORDER TO EFFECT THE PRODUCTION, TRANSPORTATION, TRANSMISSION, AND MARKETING OF ENERGY AND ENERGY­RELATED SERVICES PURSUANT TO A POLICY OF MARKET COMPETITION, THE PURPOSE OF WHICH IS TO PROVIDE A BENEFIT TO THE INHABITANTS OF THE MUNICIPALITY OR THE CUSTOMERS OF THE COOPERATIVE ELECTRIC ASSOCIATION.

(5)  IF THE LOCAL GOVERNING BODY OF A MUNICIPAL UTILITY CHOOSES TO PARTICIPATE IN RESTRUCTURING UNDER THIS ARTICLE, CONTRACTS OR AGREEMENTS ENTERED INTO BY THE MUNICIPAL UTILITY, BUSINESS PLANS, STRATEGIC PLANS, MARKETING PLANS, AS WELL AS ANY RELATED INFORMATION AND OTHER DOCUMENTS THAT RELATE TO ELECTRIC SUPPLY SERVICE AND ENERGY­RELATED SERVICES, AND ANY DOCUMENTS THAT MAY PLACE THE MUNICIPAL UTILITY AT A COMPETITIVE DISADVANTAGE IF RELEASED, SHALL BE CONSIDERED CONFIDENTIAL INFORMATION AND SHALL NOT BE SUBJECT TO PUBLIC DISCLOSURE UNDER SECTION 24­72­203, C.R.S. THE LOCAL GOVERNING BODY MAY MEET IN EXECUTIVE SESSION, AS THAT TERM IS USED IN SECTION 24­6­402, C.R.S., TO DISCUSS ANY OF THE MATERIAL ENUMERATED IN THIS SUBSECTION (6) CONSIDERED TO BE CONFIDENTIAL INFORMATION OR FOR ANY OTHER REASON AS SET FORTH IN SECTION 24­6­402, C.R.S.

(6)  JUST COMPENSATION FOR INSTANCES IN WHICH A MUNICIPAL UTILITY COMMENCES OPERATION OR ANNEXES THE SERVICE TERRITORY OF A COOPERATIVE ELECTRIC ASSOCIATION SHALL CONTINUE TO BE GOVERNED EXCLUSIVELY BY THE PROVISIONS OF ARTICLE 9.5 OF THIS TITLE.

(7)  PARTICIPATION IN RESTRUCTURING IS NOT INTENDED TO IMPAIR CONTRACTS, COVENANTS, OR OBLIGATIONS, INCLUDING THOSE BETWEEN MUNICIPALITIES AND THE BONDHOLDERS OF REVENUE BONDS ISSUED BY THE PARTICIPATING MUNICIPALITY. NOTHING IN THIS ARTICLE IS INTENDED TO IMPAIR THE TAX­EXEMPT STATUS OF MUNICIPALITIES AND MUNICIPAL UTILITIES.

(8)  THIS SECTION SHALL BE INTERPRETED AND CONSTRUED IN A MANNER THAT RETAINS LOCAL CONTROL BY THE LOCAL GOVERNING BODY OVER THE ACTIVITIES, FUNCTIONS, AND SERVICES PROVIDED BY A MUNICIPAL UTILITY OR COOPERATIVE ELECTRIC ASSOCIATION AFTER RESTRUCTURING.

40­4.6­107.  Education of customers. AS PART OF THE RESTRUCTURING PLAN SUBMITTED UNDER SECTION 40­4.6­105, PUBLIC UTILITIES SHALL SUBMIT A PLAN FOR EDUCATING THEIR CUSTOMERS ABOUT CUSTOMER CHOICE. THE PLAN SHALL INFORM CUSTOMERS ABOUT THE PROCEDURE TO BE USED IN SELECTING AN ELECTRIC SUPPLIER AND THE RATES THAT WILL BE CHARGED BY THE PUBLIC UTILITY FOR TRANSMISSION AND DISTRIBUTION SERVICE.

40­4.6­108.  Functional separation ­ divestiture ­ nondiscrimination. (1)  ON OR BEFORE THE IMPLEMENTATION DATE, EACH PUBLIC UTILITY SHALL FUNCTIONALLY SEPARATE ITS TRANSMISSION AND DISTRIBUTION OPERATIONS FROM ITS ELECTRIC SUPPLY AND ENERGY­RELATED SERVICES OPERATIONS; EXCEPT THAT MUNICIPAL UTILITIES AND COOPERATIVE ELECTRIC ASSOCIATIONS MAY ELECT NOT TO FUNCTIONALLY SEPARATE SO LONG AS THE LOCAL GOVERNING BODY EMPLOYS SUCH APPROPRIATE REGULATORY TOOLS, INCLUDING, BUT NOT LIMITED TO, THE ADOPTION OF APPROPRIATE ACCOUNTING AND ALLOCATION METHODS, TO ENSURE THAT THERE IS NO CROSS­SUBSIDIZATION BETWEEN THE REGULATED AND UNREGULATED FUNCTIONS.

(2)  THE COMMISSION SHALL NOT ORDER A PUBLIC UTILITY TO DIVEST ITSELF OF ANY ASSETS OR PROHIBIT A PUBLIC UTILITY FROM DIVESTING ITSELF VOLUNTARILY OF ANY ASSETS.

(3)  A PUBLIC UTILITY MAY OPT TO REORGANIZE ITS OPERATIONS TO PROVIDE SERVICES THROUGH SEPARATE LEGAL ENTITIES. APPLICATIONS TO REORGANIZE OPERATIONS THAT ARE REGULATED BY THE COMMISSION MAY BE SUBMITTED AS PART OF THE RESTRUCTURING PLAN UNDER SECTION 40­4.6­105 OR MAY BE SUBMITTED SEPARATELY TO THE COMMISSION OR THE LOCAL GOVERNING BODY. IF SUBMITTED SEPARATELY FROM THE RESTRUCTURING PLAN, THE COMMISSION OR LOCAL GOVERNING BODY SHALL ISSUE A DECISION ON THE APPLICATION WITHIN ONE HUNDRED TWENTY DAYS.

(4)  IN PROVIDING REGULATED TRANSMISSION AND DISTRIBUTION SERVICES, A PUBLIC UTILITY SHALL GRANT CUSTOMERS AND THEIR ELECTRIC SUPPLIERS ACCESS TO THE PUBLIC 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 FACILITIES BY THE PUBLIC UTILITY AND THE PUBLIC UTILITY'S AFFILIATES.

40­4.6­109.  Distribution services. (1)  ON AND AFTER THE IMPLEMENTATION DATE, THE DISTRIBUTION OF ELECTRICITY SHALL CONTINUE TO BE REGULATED UNDER THE DOCTRINE OF REGULATED MONOPOLY. THE COMMISSION SHALL ASSURE THAT DUPLICATION OF DISTRIBUTION FACILITIES IS AVOIDED. THERE SHALL BE ONLY ONE COMMISSION­REGULATED DISTRIBUTION SERVICE PROVIDER IN EACH SERVICE TERRITORY AS DETERMINED BY CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY ISSUED BY THE COMMISSION. MUNICIPAL UTILITIES MAY CONTINUE TO SERVE WITHIN MUNICIPAL LIMITS, AS THEY PRESENTLY EXIST OR MAY EXIST IN THE FUTURE, WITHOUT A CERTIFICATE FROM THE COMMISSION. THE DISTRIBUTION SERVICE PROVIDER SHALL HAVE THE OBLIGATION TO CONNECT ALL CUSTOMERS WITHIN THE SERVICE TERRITORY WHO REQUEST CONNECTION AND TO PROVIDE DISTRIBUTION SERVICES TO ALL CUSTOMERS ON NONDISCRIMINATORY TERMS AND CONDITIONS APPROVED BY THE COMMISSION OR THE LOCAL GOVERNING BODY.

(2)  NO PERSON SHALL CONSTRUCT TRANSMISSION OR DISTRIBUTION FACILITIES FOR THE PURPOSE OF BYPASSING THE DISTRIBUTION SERVICE PROVIDER OR FOR THE PURPOSE OF AVOIDING PAYMENT OF THE NON­BYPASSABLE RATES OR CHARGES AUTHORIZED BY THIS ARTICLE. MUNICIPAL UTILITIES MAY CONSTRUCT TRANSMISSION AND DISTRIBUTION FACILITIES TO SERVE MUNICIPAL CUSTOMERS IN ANNEXED AREAS SO LONG AS THE CUSTOMER, OR THE MUNICIPAL UTILITY ON BEHALF OF THE CUSTOMER, PAYS AN EXIT FEE TO THE DISPLACED DISTRIBUTION SERVICE PROVIDER.

(3)  EACH PUBLIC UTILITY PROVIDING DISTRIBUTION SERVICES SHALL:

(a)  FILE TARIFFS THAT PRICE DISTRIBUTION SERVICES SEPARATELY FROM TRANSMISSION AND ELECTRIC SUPPLY SERVICES AND THAT OFFER THESE SERVICES TO ALL ELECTRIC SUPPLIERS, TRANSMISSION SERVICE PROVIDERS, AND CUSTOMERS ON A NONDISCRIMINATORY BASIS; AND

(b)  BUILD, OPERATE, AND MAINTAIN DISTRIBUTION FACILITIES TO PROVIDE ADEQUATE, EFFICIENT, AND JUST AND REASONABLY PRICED DISTRIBUTION SERVICES TO ALL CUSTOMERS IN THE SERVICE TERRITORY CERTIFICATED TO THE PUBLIC UTILITY. THE DISTRIBUTION SERVICE PROVIDER SHALL BE PERMITTED TO CHARGE REASONABLE AMOUNTS TO CONNECT NEW CUSTOMERS TO THE DISTRIBUTION SYSTEM, IN CONFORMANCE WITH EXTENSION POLICIES APPROVED BY THE COMMISSION OR THE LOCAL GOVERNING BODY, AS THE CASE MAY BE.

(4)  A DISTRIBUTION SERVICE PROVIDER SHALL NOT BE REQUIRED TO GUARANTEE OR BACK UP THE ELECTRIC SUPPLY OFFERED CUSTOMERS BY ELECTRIC SUPPLIERS. A DISTRIBUTION SERVICE PROVIDER SHALL NOT BE REQUIRED TO PURCHASE ANY RESERVE SUPPLY OF ELECTRICITY. A DISTRIBUTION SERVICE PROVIDER MAY CURTAIL THE PROVISION OF ELECTRIC SUPPLY TO CUSTOMERS OF ELECTRIC SUPPLIERS WHO FAIL TO DELIVER ELECTRIC SUPPLY TO THE SYSTEM OF THE DISTRIBUTION SERVICE PROVIDER. NO DISTRIBUTION SERVICE PROVIDER SHALL BE LIABLE FOR DAMAGES TO A CUSTOMER AS A RESULT OF THE FAILURE OF THE CUSTOMER'S CHOSEN ELECTRIC SUPPLIER TO PROVIDE ADEQUATE ELECTRIC SUPPLY TO MEET THE CUSTOMER'S NEEDS.

(5)  SHOULD A DISTRIBUTION SERVICE PROVIDER PROVIDE EMERGENCY OR BACK­UP SUPPLY OR RELATED SERVICES TO ANY CUSTOMER OR ELECTRIC SUPPLIER, EITHER DIRECTLY OR THROUGH AN AFFILIATE, THE ELECTRIC SUPPLIER THAT SHOULD HAVE PROVIDED THE ELECTRIC SUPPLY SHALL BE PENALIZED BY A REQUIREMENT THAT THE ELECTRIC SUPPLIER REIMBURSE THE PROVIDER OF THE EMERGENCY OR BACK­UP SUPPLY AT THE HIGHER OF A MULTIPLE OF THE COST OR A MULTIPLE OF THE THEN­EXISTING MARKET RATE FOR THAT ELECTRICITY. THE COMMISSION OR THE LOCAL GOVERNING BODY SHALL DETERMINE, AS PART OF THE REVIEW OF THE RESTRUCTURING PLAN, THE MULTIPLIER TO BE USED TO DISCOURAGE AND PENALIZE SHORT DELIVERIES. THE MARKET RATE SHALL BE THE HIGHEST PUBLISHED RATE FOR ELECTRIC SUPPLY PURCHASED WITHIN THE LOCAL LOAD CONTROL AREA AT THE TIME THAT THE EMERGENCY OR BACK­UP SUPPLY WAS PROVIDED. NOTHING IN THIS SUBSECTION (5) SHALL PROHIBIT ANY ELECTRIC SUPPLIER FROM CONTRACTING WITH CUSTOMERS TO PROVIDE EMERGENCY OR BACKUP SUPPLY SERVICE.

40­4.6­110.  Transmission service. NOTWITHSTANDING ANY EXEMPTION UNDER SECTION 40­4.6­106, TO THE EXTENT NOT ALREADY REQUIRED BY FEDERAL LAW AND FEDERAL AGENCY RULES, ALL PUBLIC UTILITIES SHALL PROVIDE ACCESS TO TRANSMISSION FACILITIES TO ALL ELECTRIC SUPPLIERS AND DISTRIBUTION SERVICE PROVIDERS ON A NONDISCRIMINATORY BASIS AND AT RATES, TERMS, AND CONDITIONS THAT ARE COMPARABLE TO USE OF THE TRANSMISSION FACILITIES BY THE PUBLIC UTILITY; EXCEPT THAT A MUNICIPAL UTILITY OR POWER AUTHORITY CREATED UNDER SECTION 29­1­204, C.R.S., MAY REFUSE ACCESS TO TRANSMISSION FACILITIES TO THE EXTENT THAT ACCESS THREATENS THE TAX­EXEMPT STATUS OF BONDS ISSUED BY THE MUNICIPAL UTILITY OR POWER AUTHORITY.

40­4.6­111.  Electric supply. (1)  ON OR AFTER THE IMPLEMENTATION DATE, THE SUPPLY OF ELECTRICITY SHALL NOT BE REGULATED EXCEPT AS PROVIDED IN THIS ARTICLE. NO PUBLIC UTILITY SHALL HAVE THE LEGAL OBLIGATION TO PROVIDE ELECTRIC SUPPLY TO ANY CUSTOMERS WITHIN THE SERVICE TERRITORY OF THE PUBLIC UTILITY, EXCEPT AS PROVIDED IN THIS SECTION.

(2)  NO COLORADO CUSTOMER SHALL BE DEPRIVED OF ELECTRIC SUPPLY BECAUSE OF FAILURE TO CHOOSE AN ELECTRIC SUPPLIER WHEN GIVEN THE OPPORTUNITY TO DO SO. CUSTOMERS WHO FAIL TO CHOOSE AN ELECTRIC SUPPLIER SHALL CONTINUE TO RECEIVE ELECTRIC SUPPLY SERVICE THROUGH A STANDARD OFFER FROM THE UTILITY THAT PROVIDES DISTRIBUTION SERVICE TO THE CUSTOMER OR FROM AN AFFILIATE OF THE DISTRIBUTION SERVICE PROVIDER. AFTER THE IMPLEMENTATION DATE, THE STANDARD OFFER OF ELECTRIC SUPPLY SERVICE SHALL NOT BE REGULATED. IF THE UTILITY DESIRES TO PROVIDE ELECTRIC SUPPLY SERVICE TO THESE CUSTOMERS THROUGH A STANDARD OFFER FROM AN AFFILIATE, THE CUSTOMERS SHALL BE GIVEN WRITTEN NOTICE BY MAIL AND AFFORDED SIXTY DAYS TO CHOOSE ANOTHER SUPPLIER BEFORE BEING SWITCHED TO AN AFFILIATE OF THE DISTRIBUTION SERVICE PROVIDER.

(3)  NO STATE OR LOCAL LAW OR REGULATION SHALL INTERFERE WITH THE CHOICE OF ELECTRIC SUPPLIER BY CUSTOMERS, EXCEPT AS PERMITTED BY SECTION 40­4.6­106.

40­4.6­112.  Construction of facilities ­ safety and reliability requirements. (1)  PUBLIC UTILITIES SHALL MAINTAIN STANDARDS OF SAFETY AND RELIABILITY OF THE ELECTRIC TRANSMISSION AND DISTRIBUTION SYSTEMS. THE COST OF MAINTAINING SAFETY AND RELIABILITY SHALL BE RECOVERABLE THROUGH THE RATES CHARGED FOR TRANSMISSION AND DISTRIBUTION SERVICES.

(2)  WHERE CURRENTLY REQUIRED, CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY SHALL CONTINUE TO BE REQUIRED UNDER THIS TITLE FOR THE CONSTRUCTION AND EXTENSION OF TRANSMISSION FACILITIES. NO CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY SHALL BE REQUIRED AFTER THE IMPLEMENTATION DATE FOR THE CONSTRUCTION OF GENERATION FACILITIES. NOTHING IN THIS ARTICLE SHALL BE CONSTRUED TO LIMIT OR EXPAND STATE AND LOCAL PERMITTING AND LAND USE PLANNING AUTHORITY OVER UTILITY FACILITIES.

40­4.6­113.  Transition costs and charges. (1)  UNTIL THE IMPLEMENTATION DATE OF CUSTOMER CHOICE AS PROVIDED BY THIS ARTICLE, PUBLIC UTILITIES SHALL REMAIN OBLIGATED UNDER THE LAWS OF THIS STATE TO PROVIDE ADEQUATE AND EFFICIENT ELECTRIC SERVICE TO ALL CUSTOMERS LOCATED WITHIN THEIR DESIGNATED SERVICE TERRITORIES. BECAUSE OF THIS LEGAL OBLIGATION, A PUBLIC UTILITY SHALL BE ENTITLED TO FULLY RECOVER, OVER A REASONABLE COST RECOVERY PERIOD, ALL OF ITS TRANSITION COSTS INCURRED, OR PROJECTED TO BE INCURRED UP THROUGH THE DATE OF IMPLEMENTATION OF CUSTOMER CHOICE, FROM THE CUSTOMERS LOCATED IN THE SERVICE TERRITORIES FOR WHICH THIS OBLIGATION HAS BEEN UNDERTAKEN. TRANSITION COSTS SHALL BE RECOVERED THROUGH THE IMPOSITION AND COLLECTION OF A TRANSITION CHARGE.

(2)  IN ORDER TO RECOVER TRANSITION COSTS, A PUBLIC UTILITY SHALL MAKE AN AFFIRMATIVE SHOWING TO THE COMMISSION OR THE LOCAL GOVERNING BODY, AS THE CASE MAY BE, OF THE AMOUNT OF ITS TRANSITION COSTS. ACCEPTABLE METHODS FOR DETERMINING THE AMOUNT OF TRANSITION COSTS MAY INCLUDE, BUT ARE NOT LIMITED TO:

(a)  ESTIMATION OF FUTURE MARKET VALUE OF ELECTRIC SUPPLY AND ANCILLARY SERVICES COMPARED TO EXISTING CONTRACTUAL OBLIGATIONS;

(b)  ESTIMATION OF FUTURE MARKET VALUE BY USING THE CURRENT REGULATED RATE MINUS THE APPROPRIATE RATE FOR TRANSMISSION AND DISTRIBUTION SERVICE MINUS THE ESTIMATED MARKET­CLEARING PRICE FOR SUPPLY IN THE APPROPRIATE MARKET;

(c)  APPRAISAL OF THE UTILITY'S ASSETS AND LIABILITIES BY INDEPENDENT THIRD­PARTY PROFESSIONALS; OR

(d)  IF THE UTILITY OPTS TO SELL AN ASSET OR AUCTION AN OBLIGATION, THE MARKET VALUE DETERMINED BY THE SALE OR AUCTION.

(3)  INVESTMENTS AND EXPENSES THAT HAVE BEEN PREVIOUSLY INCLUDED IN ELECTRIC RATES SHALL BE FULLY RECOVERABLE AS TRANSITION COSTS. FOR THOSE INVESTMENTS AND EXPENSES THAT HAVE NOT PREVIOUSLY BEEN FACTORED INTO ELECTRIC RATES, THE COMMISSION OR THE LOCAL GOVERNING BODY SHALL ALLOW FULL RECOVERY OF ALL TRANSITION COSTS THAT WERE PRUDENTLY INCURRED AT THE TIME THAT THE INVESTMENT OR EXPENSE OBLIGATION WAS MADE.

(4)  THE COMMISSION OR THE LOCAL GOVERNING BODY SHALL REVIEW THE UTILITY'S PROPOSED TRANSITION COSTS AS PART OF THE RESTRUCTURING PLAN FILED UNDER SECTION 40­4.6­105. THE COMMISSION OR THE LOCAL GOVERNING BODY SHALL DETERMINE THE TRANSITION COSTS THAT MEET THE CRITERIA SET FORTH IN THIS ARTICLE, THE REASONABLE COST RECOVERY PERIOD, AND THE CALCULATION OF THE TRANSITION CHARGE. IN MAKING THESE DETERMINATIONS, THE COMMISSION OR THE LOCAL GOVERNING BODY SHALL APPROVE A CHARGE THAT FULLY COMPENSATES THE PUBLIC UTILITY FOR ALL PRUDENTLY INCURRED INVESTMENTS AND EXPENSES PRIOR TO THE IMPLEMENTATION DATE OF CUSTOMER CHOICE AND THAT USES A COST RECOVERY PERIOD THAT ACCOMPLISHES THE TRANSITION TO CUSTOMER CHOICE OVER THE SHORTEST PERIOD OF TIME CONSISTENT WITH ACHIEVING OVERALL RATE LEVELS THAT ARE JUST AND REASONABLE.

(5) (a)  A UTILITY'S TRANSITION COSTS SHALL BE RECOVERED THROUGH THE IMPOSITION OF A TRANSITION CHARGE AS PART OF TRANSMISSION OR DISTRIBUTION SERVICE PROVIDED TO RETAIL CUSTOMERS. THE TRANSITION CHARGE SHALL BE IMPOSED ON:

(I)  THE RETAIL CUSTOMERS IN THE SERVICE TERRITORY OF THE UTILITY THAT HAS THE TRANSITION COSTS; AND

(II)  THE RETAIL CUSTOMERS IN THE SERVICE TERRITORIES OF UTILITIES THAT PURCHASE ELECTRIC SUPPLY UNDER REQUIREMENTS CONTRACTS WITH THE UTILITY THAT HAS TRANSITION COSTS.

(b)  NOTWITHSTANDING ANY OTHER PROVISION OF LAW, UTILITIES THAT PURCHASE ELECTRIC SUPPLY UNDER REQUIREMENTS CONTRACTS SHALL COLLECT THE TRANSITION CHARGES OF THE REQUIREMENTS SUPPLIER, IF SUCH CHARGES HAVE BEEN APPROVED BY THE COMMISSION OR THE LOCAL GOVERNING BODY OF THE REQUIREMENTS SUPPLIER, BY IMPOSING A NON­BYPASSABLE CHARGE ON ALL CUSTOMERS IN THEIR SERVICE TERRITORIES AS PART OF TRANSMISSION OR DISTRIBUTION SERVICES PROVIDED TO THESE CUSTOMERS. THE CHARGES COLLECTED SHALL BE REMITTED TO THE REQUIREMENTS SUPPLIER WITHIN THIRTY DAYS AFTER RECEIPT OR WITHIN SUCH SHORTER PERIOD AS REQUIRED BY THE PROVISIONS OF RESTRUCTURING BONDS.

40­4.6­114.  Implementation costs and charges. AS PART OF ITS RESTRUCTURING PLAN, EACH PUBLIC UTILITY SHALL ESTIMATE THE IMPLEMENTATION COSTS THAT IT WILL INCUR TO RESTRUCTURE ITS OPERATIONS AS REQUIRED BY THIS ARTICLE. THE COMMISSION OR THE LOCAL GOVERNING BODY, AS THE CASE MAY BE, SHALL PERMIT THE PUBLIC UTILITY TO RECOVER ITS REASONABLE IMPLEMENTATION COSTS THROUGH AN IMPLEMENTATION CHARGE.

40­4.6­115.  Public benefit programs and charges. (1)  PUBLIC BENEFIT PROGRAMS HAVE BEEN ESTABLISHED BY SOME COLORADO PUBLIC UTILITIES FOR LOW­INCOME ENERGY ASSISTANCE, LOW­INCOME WEATHERIZATION, COMMUNITY AESTHETICS, RESEARCH AND DEVELOPMENT FOR THE COMMERCIALIZATION OF RENEWABLE RESOURCES, AND OTHER PURPOSES. TO PROVIDE A TRANSITION FOR THESE PROGRAMS TO EITHER ENTER THE COMPETITIVE MARKET OR OBTAIN SOME OTHER FUNDING SOURCE, THOSE UTILITIES THAT OPERATE PUBLIC BENEFITS PROGRAMS SHALL COLLECT FROM THEIR TRANSMISSION AND DISTRIBUTION SERVICE CUSTOMERS PUBLIC BENEFIT CHARGES FOR THREE YEARS AFTER THE IMPLEMENTATION DATE UNLESS, AT THE SOLE OPTION OF THE PUBLIC UTILITY, IT CHOOSES TO ADMINISTER PUBLIC BENEFIT PROGRAMS BEYOND THE THREE­YEAR TRANSITION PERIOD.

(2)  PUBLIC BENEFIT CHARGES SHALL BE DESIGNED TO COLLECT IN EACH YEAR NO MORE THAN ONE­HALF OF ONE PERCENT OF EACH PUBLIC UTILITY'S ANNUAL ELECTRIC RETAIL SALES REVENUE IN COLORADO FOR THE CALENDAR YEAR 1998. AT LEAST FIFTY PERCENT OF SUCH MONEYS SHALL BE DEVOTED TO LOW­INCOME ENERGY ASSISTANCE AND LOW­INCOME WEATHERIZATION PROGRAMS. SUCH MONEYS SHALL BE MADE AVAILABLE FOR PUBLIC BENEFIT PROGRAMS FOR AT LEAST THREE YEARS AFTER THE IMPLEMENTATION DATE.

(3)  THE COMMISSION OR THE LOCAL GOVERNING BODY OF THE UTILITY, AS THE CASE MAY BE, SHALL DETERMINE THE LEVEL OF PUBLIC BENEFIT CHARGE NEEDED TO COMPLY WITH THIS ARTICLE AS PART OF ITS REVIEW OF THE UTILITY'S RESTRUCTURING PLAN. THE COMMISSION OR THE LOCAL GOVERNING BODY SHALL DETERMINE THE RESPECTIVE PERCENTAGES OF THE MONEYS, IF ANY, THAT ARE TO BE APPLIED TO EACH CATEGORY OF PUBLIC BENEFIT PROGRAM.

(4)  NO PUBLIC UTILITY SHALL BE REQUIRED TO CONDUCT OR ADMINISTER A PUBLIC BENEFIT PROGRAM. A UTILITY'S RESTRUCTURING PLAN SHALL DESCRIBE WHETHER THE UTILITY PROPOSES TO CONDUCT OR ADMINISTER PUBLIC BENEFIT PROGRAMS, EITHER DIRECTLY OR THROUGH AN AFFILIATE, AND SHALL INCLUDE THE DETAILS OF THE PROPOSED PROGRAMS, INCLUDING THE COST­EFFECTIVENESS AND NEED FOR SUCH PROGRAMS. THE COMMISSION OR THE LOCAL GOVERNING BODY SHALL REVIEW THE UTILITY'S PROPOSED PUBLIC BENEFIT PROGRAMS AND APPROVE THOSE PROGRAMS THAT THE COMMISSION OR THE LOCAL GOVERNING BODY FINDS ARE COST­EFFECTIVE AND IN THE PUBLIC INTEREST.

(5)  ANY PUBLIC UTILITY MAY PROPOSE A PUBLIC BENEFIT PROGRAM THAT INCLUDES PARTICIPATION WITH ANOTHER PUBLIC UTILITY. ANY SUCH PROGRAM SHALL BE APPROVED BY ALL THE LOCAL GOVERNING BODIES, OR THE COMMISSION, AS THE CASE MAY BE, THAT HAVE JURISDICTION OVER THE RATES OF THE UTILITIES PARTICIPATING IN THE PROGRAM.

(6)  THE MONEYS COLLECTED THROUGH PUBLIC BENEFIT CHARGES SHALL FIRST BE APPLIED TO THE PROGRAMS SPONSORED BY THE PUBLIC UTILITY DURING THE YEAR COLLECTED, EITHER DIRECTLY OR THROUGH AFFILIATES, WHICH HAVE BEEN APPROVED BY THE COMMISSION OR THE LOCAL GOVERNING BODIES. PUBLIC BENEFIT CHARGES THAT ARE COLLECTED BY THE PUBLIC UTILITY IN EXCESS OF THOSE NEEDED TO SUPPORT SUCH APPROVED PROGRAMS SHALL BE REMITTED TO THE FOLLOWING AGENCIES, WHICH SHALL DISPERSE THE MONEYS TO PROMOTE THE OBJECTIVES OF THIS SECTION:

(a)  LOW­INCOME ENERGY ASSISTANCE AND LOW­INCOME WEATHERIZATION MONEYS SHALL BE REMITTED BY THE UTILITY TO THE COLORADO DEPARTMENT OF SOCIAL SERVICES.

(b)  FUNDS FOR RESEARCH AND DEVELOPMENT FOR THE COMMERCIALIZATION OF RENEWABLE RESOURCES SHALL BE REMITTED BY THE UTILITY TO THE COLORADO COMMISSION ON HIGHER EDUCATION FOR DISBURSEMENT TO COLORADO COLLEGES AND UNIVERSITIES CONDUCTING RESEARCH IN THE FIELD OF RENEWABLE RESOURCES.

(7)  A PUBLIC UTILITY SHALL PREPARE AND SUBMIT TO THE COMMISSION OR THE LOCAL GOVERNING BODY AN ANNUAL SUMMARY REPORT OF THE PUBLIC UTILITY'S ACTIVITIES RELATING TO ALL PUBLIC BENEFIT PROGRAMS. THE ANNUAL REPORT SHALL INCLUDE, BUT IS NOT LIMITED TO:

(a)  DESCRIPTIONS OF THE PUBLIC BENEFIT PROGRAMS CONDUCTED BY THE UTILITY AND ITS AFFILIATES FUNDED BY PUBLIC BENEFIT CHARGES; AND

(b)  THE PAYMENTS MADE TO ANY STATEWIDE FUNDS ESTABLISHED FOR THE PURPOSE OF COLLECTING AND DISBURSING OF PUBLIC BENEFIT CHARGES.

40­4.6­116.  Air quality improvement costs and charges. A PUBLIC UTILITY SHALL BE ENTITLED TO RECOVER THE AIR QUALITY IMPROVEMENT COSTS UNDERTAKEN OR TO BE UNDERTAKEN AT ITS GENERATION FACILITIES THROUGH THE TRANSMISSION AND DISTRIBUTION SERVICES THAT IT PROVIDES, EITHER DIRECTLY OR THROUGH AN AFFILIATE, BY IMPOSING AN AIR QUALITY IMPROVEMENT CHARGE. THE AIR QUALITY IMPROVEMENT CHARGE SHALL BE FILED WITH THE COMMISSION OR THE LOCAL GOVERNING BODY, AS THE CASE MAY BE. THE COMMISSION OR THE LOCAL GOVERNING BODY SHALL APPROVE THE AIR QUALITY IMPROVEMENT CHARGE IF THE CHARGE RECOVERS AIR QUALITY IMPROVEMENT COSTS AS DEFINED IN SECTION 40­4.6­102 (3) OVER A REASONABLE COST RECOVERY PERIOD AND RESULTS IN AN AVERAGE CHARGE OF NO GREATER THAN ONE­FORTH OF ONE CENT PER KILOWATT­HOUR.

40­4.6­117.  Bill information ­ customer nonpayment ­ rules ­ exit fees. (1)  BEGINNING NO LATER THAN JANUARY 1, 2002, ALL ELECTRICITY BILLS TO CONSUMERS IN COLORADO SHALL BE BROKEN DOWN TO INFORM CONSUMERS OF THE CHARGES FOR EACH SERVICE. THE FOLLOWING CHARGES SHALL BE SET FORTH SEPARATELY ON THE BILL:

(a)  DISTRIBUTION CHARGES AND TRANSMISSION CHARGES;

(b)  ELECTRIC SUPPLY CHARGES;

(c)  TRANSITION CHARGES;

(d)  PUBLIC BENEFIT CHARGES;

(e)  AIR QUALITY IMPROVEMENT CHARGES;

(f)  IMPLEMENTATION CHARGES;

(g)  CHARGES FOR ENERGY­RELATED SERVICES;

(h)  TAXES; AND

(i)  FRANCHISE FEES.

(2)  ON OR BEFORE JANUARY 1, 2002, THE COMMISSION OR THE LOCAL GOVERNING BODY SHALL PROMULGATE RULES ESTABLISHING THE PROCEDURES GOVERNING THE DISCONTINUANCE OF SERVICE FOR NONPAYMENT. SUCH RULES SHALL SPECIFY SEPARATELY THE PROCEDURES TO BE USED BY ELECTRIC SUPPLIERS, TRANSMISSION SERVICE PROVIDERS, AND DISTRIBUTION SERVICE PROVIDERS.

(3)  AS A CONDITION OF PERMITTING CUSTOMER CHOICE, A UTILITY SHALL IMPOSE A SEPARATE EXIT FEE ON A CUSTOMER IF THE CUSTOMER WOULD OTHERWISE AVOID PAYING TRANSITION CHARGES, IMPLEMENTATION CHARGES, PUBLIC BENEFIT CHARGES, OR AIR QUALITY IMPROVEMENT CHARGES.

(4)  EXCEPT AS PROVIDED IN SECTION 40­4.6­106 (6), IF A MUNICIPALITY CONDEMNS UTILITY FACILITIES FOR THE PURPOSE OF FORMING OR EXPANDING A MUNICIPAL UTILITY, IN ADDITION TO THE COMPENSATION REQUIRED BY LAW FOR THE EXERCISE OF THE RIGHT OF EMINENT DOMAIN, THE MUNICIPALITY SHALL PAY AN EXIT FEE TO THE UTILITY AS PART OF THE CONDEMNATION AWARD THAT COVERS THE TRANSITION CHARGES, THE IMPLEMENTATION CHARGES, THE PUBLIC BENEFIT CHARGES, AND THE AIR QUALITY IMPROVEMENT CHARGES THAT WOULD HAVE BEEN PAID BY CUSTOMERS IN THE SERVICE TERRITORY THAT IS CONDEMNED BY THE MUNICIPALITY.

40­4.6­118.  Commission authority ­ rule­making. (1)  ON OR AFTER THE IMPLEMENTATION DATE, THE COMMISSION SHALL NO LONGER REGULATE THE PRICE OR OTHER TERMS AND CONDITIONS FOR THE SALE OF ELECTRIC SUPPLY. THE LOCAL GOVERNING BODY SHALL CONTINUE TO ESTABLISH THE PRICE AND OTHER TERMS AND CONDITIONS FOR THE SALE OF ELECTRIC SUPPLY BY THE MUNICIPAL UTILITY OR COOPERATIVE ELECTRIC ASSOCIATION UNDER ITS JURISDICTION, BUT THE LOCAL GOVERNING BODY SHALL HAVE NO AUTHORITY TO REGULATE THE PRICE FOR THE SALE OF ELECTRIC SUPPLY BY OTHER ELECTRIC SUPPLIERS.

(2)  THE COMMISSION SHALL LICENSE ELECTRIC SUPPLIERS AND ENFORCE LICENSING PROVISIONS PURSUANT TO SECTION 40­4.6­119.

(3)  THE COMMISSION OR THE LOCAL GOVERNING BODY SHALL ESTABLISH JUST AND REASONABLE RATES FOR DISTRIBUTION AND TRANSMISSION SERVICES AND SHALL REGULATE THESE SERVICES. THE COMMISSION OR THE LOCAL GOVERNING BODY 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. A PUBLIC UTILITY MAY REFORMULATE ITS TARIFFS TO OFFER A BASIC TRANSMISSION OR DISTRIBUTION SERVICE AND TO CHARGE SEPARATELY FOR SERVICES THAT ARE PROVIDED IN ADDITION TO BASIC SERVICE.

(4)  EXCEPT FOR THE GENERATION FUEL INFORMATION THAT IS REQUIRED BY SECTION 40­4.6­119 (7), ALL DOCUMENTS FURNISHED TO THE COMMISSION BY ELECTRIC SUPPLIERS IN ORDER TO OBTAIN LICENSES, AND ALL DOCUMENTS THAT ARE SUPPLIED TO THE COMMISSION OR THE LOCAL GOVERNING BODY BY A UTILITY THAT IS REGULATED IN THE PROVISION OF TRANSMISSION OR DISTRIBUTION SERVICE THAT RELATE TO THE ELECTRIC SUPPLY SERVICE OR THE ENERGY­RELATED SERVICES CONDUCTED BY THE UTILITY OR ITS AFFILIATES, SHALL BE CONSIDERED TO BE TRADE SECRETS OR CONFIDENTIAL COMMERCIAL DATA AS THESE TERMS ARE USED IN SECTION 24­72­204, C.R.S., AND SHALL NOT BE SUBJECT TO PUBLIC DISCLOSURE.

(5)  ANY CHALLENGE TO A DECISION OF THE COMMISSION OR A LOCAL GOVERNING BODY ESTABLISHING RATES AND OTHER TERMS AND CONDITIONS FOR DISTRIBUTION AND TRANSMISSION SERVICES SHALL BE PURSUED AS FOLLOWS:

(a)  FOR A DECISION OF THE COMMISSION, THE PROVISIONS OF SECTION 40­6­115 SHALL APPLY.

(b)  FOR THE DECISIONS OF A LOCAL GOVERNING BODY REGULATING A MUNICIPAL UTILITY, RELIEF MAY BE SOUGHT BY WRIT OF CERTIORARI, AND THE PROVISIONS OF RULE 106 OF THE COLORADO RULES OF CIVIL PROCEDURE SHALL APPLY.

(c)  FOR THE DECISIONS OF A LOCAL GOVERNING BODY REGULATING A COOPERATIVE ELECTRIC ASSOCIATION, A COMPLAINT MAY BE FILED WITH THE COMMISSION, AND THE PROVISIONS OF ARTICLES 6 AND 7 OF THIS TITLE SHALL APPLY.

(6)  THE COMMISSION AND THE LOCAL GOVERNING BODIES SHALL TAKE ALL ACTIONS NECESSARY TO ENSURE THAT THE FACILITIES USED BY PUBLIC UTILITIES FOR THE TRANSMISSION AND 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 THOSE OF THE REGION AND THE REST OF THE COUNTRY ARE MAINTAINED AND IMPROVED.

(7)  THE COMMISSION OR THE LOCAL GOVERNING BODY MAY PROMULGATE ANY RULES NECESSARY TO CARRY OUT THE PROVISIONS OF THIS ARTICLE.

40­4.6­119.  Licensing. (1)  AN ELECTRIC SUPPLIER SHALL OBTAIN A LICENSE FROM THE COMMISSION BEFORE OFFERING ELECTRIC SUPPLY FOR SALE TO RETAIL CUSTOMERS IN THE STATE OF COLORADO; EXCEPT THAT PUBLIC UTILITIES MAY CONTINUE TO OFFER ELECTRIC SUPPLY TO CUSTOMERS WITHIN THEIR CERTIFICATED SERVICE TERRITORIES AND, IN THE CASE OF A MUNICIPAL UTILITY WITHIN MUNICIPAL CORPORATE LIMITS, WITHOUT A COMMISSION LICENSE.

(2)  THE COMMISSION MAY REQUIRE ELECTRIC SUPPLIERS THAT PROVIDE ELECTRIC SUPPLY SERVICE TO RESIDENTIAL AND SMALL COMMERCIAL CUSTOMERS TO MAKE A STANDARD SERVICE OFFER.

(3)  AS A CONDITION FOR OBTAINING A LICENSE, THE COMMISSION SHALL REQUIRE THE ELECTRIC SUPPLIER TO OPERATE A PLACE OF BUSINESS IN THIS STATE, PROVIDE CUSTOMERS WITH A TOLL­FREE TELEPHONE NUMBER TO REACH THE ELECTRIC SUPPLIER, PROVIDE PROOF OF FINANCIAL INTEGRITY, AND DEMONSTRATE ACCESS TO ADEQUATE RESERVES TO SUPPLY SERVICE FOR COLORADO CUSTOMERS. THE COMMISSION MAY REQUIRE AN ELECTRIC SUPPLIER 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 AN ELECTRIC SUPPLIER LICENSED WITH THE COMMISSION TO FILE AN ANNUAL REPORT TO PROVIDE CONTINUING PROOF THAT THE CONDITIONS OF THIS SUBSECTION (3) ARE MET.

(4)  NO DISTRIBUTION SERVICE PROVIDER SHALL BE REQUIRED TO PROVIDE ACCESS TO ITS DISTRIBUTION FACILITIES TO AN UNLICENSED ELECTRIC SUPPLIER.

(5)  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.

(6)  THE COMMISSION MAY CHARGE ALL LICENSE APPLICANTS A REASONABLE FEE TO COVER THE ADMINISTRATIVE COST OF PROCESSING THE LICENSE APPLICATION AND REVIEWING ANNUAL REPORTS. A SCHEDULE OF FEES SHALL BE PROMULGATED BY RULE.

(7)  AN ELECTRIC SUPPLIER SHALL BE REQUIRED TO GENERALLY IDENTIFY, ON A PERCENTAGE BASIS, THE TYPE OF FUEL USED IN THE ELECTRIC GENERATION INCLUDED IN ITS ELECTRIC SUPPLY PORTFOLIO AND TO PROVIDE JUSTIFICATION FOR ANY CLAIMS IT MAY MAKE CONCERNING THE ENVIRONMENTAL BENEFITS ASSOCIATED WITH PART OR ALL OF THE ELECTRICITY IT SUPPLIES TO CUSTOMERS.

40­4.6­120.  Penalties ­ license revocation. (1)  THE COMMISSION MAY REVOKE OR SUSPEND A 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:

(a)  INTENTIONALLY PROVIDED FALSE INFORMATION TO THE COMMISSION;

(b)  SWITCHED, OR CAUSED TO BE SWITCHED, THE ELECTRIC SUPPLIER FOR A CUSTOMER WITHOUT FIRST OBTAINING THE CUSTOMER'S PERMISSION, EXCEPT AS PROVIDED IN SECTION 40­4.6­111 (2);

(c)  FAILED TO PROVIDE A REASONABLY ADEQUATE SUPPLY OF ELECTRICITY FOR ITS CUSTOMERS IN COLORADO; OR

(d)  COMMITTED FRAUD OR ENGAGED IN DECEPTIVE OR ANTICOMPETITIVE PRACTICES.

(2)  IN ADDITION TO LICENSE REVOCATION, A WILLFUL VIOLATION OF LICENSE CONDITIONS OR THE PROVIDING OF FALSE INFORMATION TO THE COMMISSION OR TO CUSTOMERS SHALL SUBJECT THE ELECTRIC SUPPLIER TO THE PENALTIES SET FORTH IN ARTICLE 7 OF THIS TITLE.

40­4.6­121.  Unauthorized switching ­ rules. (1)  EXCEPT AS OTHERWISE PROVIDED IN SECTION 40­4.6­111 (2), NO PERSON MAY MAKE ANY CHANGE IN THE ELECTRIC SUPPLIER FOR A CUSTOMER WITHOUT FIRST OBTAINING THE CUSTOMER'S WRITTEN PERMISSION.

(2)  NO PERSON SHALL AGGREGATE CUSTOMERS THROUGH THE USE OF A NEGATIVE OPTION CONTRACT OR DEVICE. FOR THE PURPOSES OF THIS SECTION, "NEGATIVE OPTION CONTRACT OR DEVICE" MEANS A METHOD THAT PURPORTS TO CREATE A CONTRACT WITH THE CUSTOMER UNLESS THE CUSTOMER ACTS AFFIRMATIVELY TO REJECT THE OFFER OR CONTRACT.

(3)  THE COMMISSION SHALL PROMULGATE RULES ESTABLISHING PROCEDURES AND PENALTIES TO PREVENT UNAUTHORIZED SWITCHING OF THE ELECTRIC SUPPLIER.

40­4.6­122.  Preservation of existing contracts. NOTHING IN THIS ARTICLE SHALL BE CONSTRUED TO ABROGATE EXISTING CONTRACTS.

40­4.6­123.  Tax revenue analysis ­ legislative declaration. (1)  IT IS THE INTENT OF THE GENERAL ASSEMBLY IN ENACTING THIS ARTICLE THAT:

(a)  RESTRUCTURING SHALL NOT ADVERSELY AFFECT THE TAX REVENUES CURRENTLY COLLECTED BY STATE AND LOCAL GOVERNMENTS;

(b)  ALL TAXES SHOULD BE IMPOSED BY THE JURISDICTION COLLECTING SUCH TAXES IN A MANNER THAT EQUITABLY DISTRIBUTES THE BURDEN OF TAXATION AND DOES NOT PLACE ANY ELECTRIC SUPPLIER AT A COMPETITIVE DISADVANTAGE.

(2)  THE DEPARTMENT OF REVENUE SHALL ANALYZE HOW, IF AT ALL, THE COLLECTION OF TAX REVENUE BY THE STATE AND LOCAL GOVERNMENTS IS CHANGED BY RESTRUCTURING AND COMPETITION IN THE ELECTRIC SUPPLY MARKET.

(3)  ON OR BEFORE JANUARY 1, 2000, THE DEPARTMENT OF REVENUE SHALL RECOMMEND THE LEGISLATIVE CHANGES, IF ANY, NEEDED TO ADDRESS ANY ADVERSE EFFECTS ON THE TAX REVENUES OF STATE AND LOCAL GOVERNMENTS RESULTING FROM THE RESTRUCTURING REQUIRED BY THIS ARTICLE. ANY LEGISLATION RECOMMENDED BY THE DEPARTMENT OF REVENUE SHALL PLACE COMPARABLE STATE AND LOCAL TAX BURDENS UPON ALL ELECTRIC SUPPLIERS AND ON DISTRIBUTION SERVICE PROVIDERS.

(4)  ON OR BEFORE JANUARY 1, 2000, THE DEPARTMENT OF REVENUE SHALL ALSO REVIEW THE METHODS OF ASSESSMENT AND THE EXEMPTIONS AFFORDED COMMERCIAL AND INDUSTRIAL ENTERPRISES THAT ARE NOT PUBLIC UTILITIES AND RECOMMEND THE LEGISLATIVE CHANGES, IF ANY, THAT ARE REQUIRED TO PLACE PUBLIC UTILITIES AND ELECTRIC SUPPLIERS ON THE SAME ASSESSMENT BASIS AS OTHER COMMERCIAL AND INDUSTRIAL ENTERPRISES.

40­4.6­124.  Revocation of integrated resources planning rules. THE COMMISSION'S RULES WITH RESPECT TO ELECTRIC INTEGRATED RESOURCES PLANNING (4 CRR 723­21) ARE HEREBY LEGISLATIVELY REPEALED, EFFECTIVE JULY 1, 1998.

40­4.6­125.  Funding analysis for the commission. AS OF JANUARY 1, 2002, IT SHALL NO LONGER BE APPROPRIATE TO REQUIRE ELECTRIC UTILITIES TO PAY FEES TO FUND THE ADMINISTRATIVE EXPENSES OF THE COMMISSION BASED SOLELY ON THE GROSS OPERATING REVENUES DERIVED BY EACH UTILITY FROM ITS INTRASTATE UTILITY BUSINESS. THE GENERAL ASSEMBLY FINDS AND DETERMINES THAT IT IS APPROPRIATE THAT A NEW FUNDING FORMULA BE DEVISED TO ADEQUATELY FUND THE COMMISSION'S ADMINISTRATIVE EXPENSES FOR THE SUPERVISION AND REGULATION OF TRANSMISSION AND DISTRIBUTION SERVICES PROVIDERS AND THE LICENSING OF ELECTRIC SUPPLIERS. THE NEW FUNDING FORMULA SHALL BE DESIGNED TO PLACE ALL COMPETING ELECTRIC SUPPLIERS ON A COMPARABLE BASIS. ON OR BEFORE JANUARY 1, 2000, THE COMMISSION SHALL RECOMMEND TO THE GENERAL ASSEMBLY THE LEGISLATIVE CHANGES NEEDED TO ACCOMPLISH THIS FUNDING FORMULA REVISION.

40­4.6­126.  Issuance of restructuring bonds. (1) (a)  THE COMMISSION OR THE LOCAL GOVERNING BODY, AS THE CASE MAY BE, MAY ISSUE FINANCING ORDERS IN ACCORDANCE WITH THIS SECTION TO FACILITATE THE RECOVERY, REIMBURSEMENT, FINANCING, OR REFINANCING OF TRANSITION COSTS, AIR QUALITY IMPROVEMENT COSTS, AND IMPLEMENTATION COSTS; THE RECOVERY OF FIXED RESTRUCTURING AMOUNTS; AND THE CREATION OF RESTRUCTURING PROPERTY. A FINANCING ORDER MAY BE ADOPTED ONLY UPON THE APPLICATION OF A UTILITY AND MAY ONLY BECOME EFFECTIVE IN ACCORDANCE WITH ITS TERMS AFTER THE UTILITY FILES WITH THE COMMISSION OR THE LOCAL GOVERNING BODY, AS THE CASE MAY BE, THE UTILITY'S WRITTEN CONSENT TO ALL TERMS AND CONDITIONS OF THE FINANCING ORDER. AFTER SUCH CONSENT IS FILED AND AFTER THE RESTRUCTURING BONDS ARE ISSUED, A FINANCING ORDER SHALL BE IRREVOCABLE.

(b)  AFTER THE ADOPTION OF A FINANCING ORDER BUT BEFORE THE ISSUANCE OF RESTRUCTURING BONDS IN ACCORDANCE WITH SUCH ORDER OR ANY PART OF IT, A UTILITY MAY APPLY TO THE COMMISSION OR THE LOCAL GOVERNING BODY, AS THE CASE MAY BE, FOR AN AMENDMENT TO SUCH ORDER FOR THE PURPOSE OF AMENDING, CLARIFYING, OR ADJUSTING THE ORDER TO ACCOMMODATE THE ISSUANCE OF RESTRUCTURING BONDS.

(c)  AN IRREVOCABLE FINANCING ORDER SHALL INCLUDE, WITHOUT LIMITATION, A PROCEDURE FOR THE EXPEDITIOUS APPROVAL BY THE COMMISSION OR THE LOCAL GOVERNING BODY, AS THE CASE MAY BE, OF PERIODIC ADJUSTMENTS TO NON­BYPASSABLE RATES AND CHARGES ASSOCIATED WITH FIXED RESTRUCTURING AMOUNTS INCLUDED IN THE ORDER TO ENSURE REVENUES SUFFICIENT TO RECOVER ALL FIXED RESTRUCTURING AMOUNTS. THE ADJUSTMENTS, IF REQUIRED, SHALL BE APPROVED WITHIN SIXTY DAYS AFTER EACH ANNIVERSARY OF THE ISSUANCE OF RESTRUCTURING BONDS AND AS OF EACH ADDITIONAL INTERVAL PROVIDED FOR IN THE FINANCING ORDER OR AT SUCH SHORTER TIME AS APPROVED IN THE FINANCING ORDER. THE ORDER SHALL SET FORTH THE TERM OVER WHICH THE RESTRUCTURING BONDS ARE TO BE PAID, BUT NO SUCH TERM MAY EXCEED THIRTY YEARS. IN ADDITION, THE FINANCING ORDER SHALL REQUIRE THAT THE PROCEEDS FROM THE ASSIGNMENT, SALE, OR OTHER TRANSFER, OR OTHER FINANCING OF RESTRUCTURING PROPERTY, SHALL BE USED PRINCIPALLY TO REDUCE THE PUBLIC UTILITY'S TRANSITION COSTS, IMPLEMENTATION COSTS, AND AIR QUALITY IMPROVEMENT COSTS OR TO REDUCE RELATED CAPITALIZATION PURSUANT TO A PLAN SUBMITTED BY THE UTILITY IN ITS APPLICATION FOR A FINANCING ORDER.

(2)  A PUBLIC UTILITY MAY APPLY TO THE COMMISSION OR TO THE LOCAL GOVERNING BODY, AS THE CASE MAY BE, FOR A FINANCING ORDER TO FINANCE FIXED RESTRUCTURING AMOUNTS THROUGH THE ISSUANCE OF RESTRUCTURING BONDS. AFTER THE ISSUANCE OF A FINANCING ORDER, THE UTILITY RETAINS SOLE DISCRETION REGARDING WHETHER TO SELL, ASSIGN, OR OTHERWISE TRANSFER OR PLEDGE RESTRUCTURING PROPERTY OR TO CAUSE THE RESTRUCTURING BONDS TO BE ISSUED, INCLUDING THE RIGHT TO DEFER OR POSTPONE THE SALE, ASSIGNMENT, TRANSFER, PLEDGE, OR ISSUANCE. IF RESTRUCTURING BONDS ARE NOT ISSUED WITHIN FOUR YEARS AFTER ISSUANCE OF THE IRREVOCABLE FINANCING ORDER, THE FINANCING ORDER SHALL TERMINATE. THE UTILITY MAY APPLY FOR AN EXTENSION OR RENEWAL OF A FINANCING ORDER.

(3)  THE COMMISSION OR THE LOCAL GOVERNING BODY, AS THE CASE MAY BE, SHALL AFFORD FLEXIBILITY IN ITS FINANCING ORDER IN ESTABLISHING THE TERMS AND CONDITIONS OF THE RESTRUCTURING BONDS, INCLUDING REPAYMENT SCHEDULES, INTEREST RATES, AND OTHER FINANCING COSTS. AFTER THE ISSUANCE, THE UTILITY SHALL FILE THE FINAL TERMS OF THE RESTRUCTURING BONDS WITH THE COMMISSION OR THE LOCAL GOVERNING BODY, AS THE CASE MAY BE.

(4) (a)  NOTWITHSTANDING ANY OTHER PROVISION OF LAW, ANY PROVISION UNDER THIS SECTION OR UNDER A FINANCING ORDER REQUIRING THAT THE COMMISSION OR THE LOCAL GOVERNING BODY TAKE OR REFRAIN FROM TAKING ACTION WITH RESPECT TO THE SUBJECT MATTER OF A FINANCING ORDER BINDS THE COMMISSION OR THE LOCAL GOVERNING BODY AND ANY SUCCESSOR COMMISSION, LOCAL GOVERNING BODY, OR AGENCY EXERCISING FUNCTIONS SIMILAR TO THE COMMISSION OR THE LOCAL GOVERNING BODY OR AGENCY OR ANY SUCCESSOR. THE COMMISSION OR THE LOCAL GOVERNING BODY OR ANY SUCCESSOR COMMISSION, LOCAL GOVERNING BODY, OR AGENCY SHALL NOT RESCIND, ALTER, OR AMEND ANY REQUIREMENT IN A FINANCING ORDER.

(b)  IF RESTRUCTURING BONDS HAVE BEEN ISSUED, NEITHER THE COMMISSION NOR THE LOCAL GOVERNING BODY MAY BY RESCINDING, ALTERING, OR AMENDING THE FINANCING ORDER OR OTHERWISE:

(I)  REVALUE, REVISE, IMPAIR, POSTPONE, OR TERMINATE THE FIXED RESTRUCTURING AMOUNTS, TRANSITION COSTS, AIR QUALITY IMPROVEMENT COSTS, OR IMPLEMENTATION COSTS OR THE COSTS OF RECOVERING, REIMBURSING, FINANCING, OR REFINANCING SUCH COSTS OR THE RESTRUCTURING BONDS OR THE RESTRUCTURING PROPERTY;

(II)  REDUCE, IMPAIR, POSTPONE, OR TERMINATE OR DETERMINE THAT THE FIXED RESTRUCTURING AMOUNTS OR OTHER RATES ARE UNJUST OR UNREASONABLE; OR

(III)  IN ANY WAY REDUCE OR IMPAIR THE VALUE OF FIXED RESTRUCTURING AMOUNTS OR RESTRUCTURING PROPERTY, EITHER DIRECTLY OR INDIRECTLY, BY TAKING FIXED RESTRUCTURING AMOUNTS INTO ACCOUNT WHEN SETTING OTHER RATES FOR THE UTILITY.

(c)  THE TOTAL AMOUNT OF THE RESTRUCTURING PROPERTY MAY NOT BE SUBJECT TO REDUCTION, IMPAIRMENT, POSTPONEMENT, OR TERMINATION. RESTRUCTURING PROPERTY AND ANY PAYMENTS IN RESPECT TO RESTRUCTURING PROPERTY, INCLUDING, WITHOUT LIMITATION, THE NON­BYPASSABLE RATES OR CHARGES SHALL NOT BE SUBJECT TO ANY SETOFFS, COUNTERCLAIMS, SURCHARGES, OR DEFENSES BY THE UTILITY OR BY ANY OTHER PERSON, WHETHER IN CONNECTION WITH THE BANKRUPTCY OF THE UTILITY OR OTHERWISE.

(d)  EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THE STATE PLEDGES AND AGREES WITH THE ASSIGNEES AND PLEDGEES OF RESTRUCTURING PROPERTY AND RESTRUCTURING BONDHOLDERS AND ANY ASSIGNEE OR FINANCING PARTY THAT MAY ENTER INTO CONTRACTS WITH THE UTILITY UNDER THIS SECTION THAT THE STATE WILL NOT LIMIT OR ALTER OR IN ANY WAY IMPAIR OR REDUCE THE VALUE OF THE FIXED RESTRUCTURING AMOUNTS, RESTRUCTURING PROPERTY, FINANCING ORDERS, OR ANY RIGHT UNDER THE RESTRUCTURING BONDS UNTIL THE RESTRUCTURING BONDS, TOGETHER WITH THE INTEREST ON THE RESTRUCTURING BONDS, ARE FULLY PAID AND DISCHARGED OR THE CONTRACTS ARE FULLY PERFORMED ON THE PART OF THE UTILITY.

(5)  FIXED RESTRUCTURING AMOUNTS BECOME RESTRUCTURING PROPERTY WHEN AND TO THE EXTENT THAT A FINANCING ORDER AUTHORIZING THE FIXED RESTRUCTURING AMOUNTS HAS BECOME EFFECTIVE IN ACCORDANCE WITH SUBSECTION (2) OF THIS SECTION, AND THE RESTRUCTURING PROPERTY SHALL THEREAFTER CONTINUOUSLY EXIST AS PROPERTY FOR ALL PURPOSES, TOGETHER WITH ALL OF THE RIGHTS AND PRIVILEGES ACCRUING PURSUANT TO THIS SECTION AND THE FINANCING ORDER FOR THE PERIOD AND TO THE EXTENT PROVIDED IN THE FINANCING ORDER OR UNTIL THE RESTRUCTURING BONDS ARE PAID IN FULL, INCLUDING ALL PRINCIPAL, PREMIUM, COSTS, AND ARREARAGES ON THE RESTRUCTURING BONDS. NON­BYPASSABLE RATES OR CHARGES AND ANY RELATED EXIT FEES SHALL CONTINUE TO BE IMPOSED AND PAID UNTIL ALL OUTSTANDING RESTRUCTURING BONDS ARE RETIRED, REDEEMED, OR DISCHARGED.

(6)  RESTRUCTURING BONDS MAY BE ISSUED UPON APPROVAL BY THE COMMISSION OR THE LOCAL GOVERNING BODY, AS THE CASE MAY BE, IN THE PERTINENT FINANCING ORDER. RESTRUCTURING BONDS SHALL SPECIFY THAT THEY DO NOT PROVIDE RECOURSE TO THE CREDIT OR ANY ASSETS OF THE UTILITY, OTHER THAN THE RESTRUCTURING PROPERTY AS SPECIFIED IN THE PERTINENT FINANCING ORDER.

(7) (a)  THE RESTRUCTURING BONDS DO NOT CONSTITUTE A PLEDGE OF THE FULL FAITH AND CREDIT OF THE STATE OR ANY OF THE STATE'S POLITICAL SUBDIVISIONS. THE RESTRUCTURING BONDS ARE PAYABLE SOLELY FROM THE MONEYS PROVIDED UNDER AN IRREVOCABLE FINANCING ORDER ISSUED IN ACCORDANCE WITH THIS SECTION. THE BONDS AND OFFERING DOCUMENTS SHALL CONTAIN ON THEIR FACE THE FOLLOWING STATEMENT IN AT LEAST TEN­POINT, BOLD­FACED TYPE:

"THIS BOND DOES NOT CONSTITUTE AN INDEBTEDNESS OR A LOAN OF CREDIT OF THE STATE OF COLORADO OR ANY POLITICAL SUBDIVISION OF THE STATE OF COLORADO WITHIN ANY CONSTITUTIONAL, CHARTER, OR STATUTORY PROVISION. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF COLORADO IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OR INTEREST ON THIS BOND, AND NEITHER THE STATE OF COLORADO NOR ANY POLITICAL SUBDIVISION OF THE STATE OF COLORADO IS OBLIGATED, DIRECTLY, INDIRECTLY, OR CONTINGENTLY, TO LEVY OR TO PLEDGE ANY FORM OF TAXATION OR TO MAKE ANY APPROPRIATION FOR THE PAYMENT OF THIS BOND. THIS BOND IS A LIMITED OBLIGATION OF THE ISSUER, PAYABLE SOLELY OUT OF THE RESTRUCTURING PROPERTY OR THE PROCEEDS OF THAT PROPERTY SPECIFICALLY PLEDGED FOR ITS PAYMENT AND NOT OTHERWISE."

(b)  THE ISSUANCE OF RESTRUCTURING BONDS UNDER THIS SECTION SHALL NOT DIRECTLY, INDIRECTLY, OR CONTINGENTLY OBLIGATE THE STATE OR ANY POLITICAL SUBDIVISION OF THE STATE TO LEVY OR TO PLEDGE ANY FORM OF TAXATION OR TO MAKE ANY APPROPRIATION FOR BOND PAYMENT.

(c)  THE COMMISSION AND EACH LOCAL GOVERNING BODY SHALL ESTABLISH PROCEDURES FOR THE EXPEDITIOUS PROCESSING OF APPLICATIONS FOR FINANCING ORDERS, INCLUDING THE APPROVAL OR DISAPPROVAL OF APPLICATIONS WITHIN ONE HUNDRED TWENTY DAYS AFTER A UTILITY SUBMITS A COMPLETE APPLICATION. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, NEITHER THE ORDER NOR THE FIXED RESTRUCTURING AMOUNTS AUTHORIZED TO BE IMPOSED AND COLLECTED UNDER THE ORDER SHALL BE SUBJECT TO REDUCTION, POSTPONEMENT, IMPAIRMENT, OR TERMINATION BY ANY SUBSEQUENT ACTION OF THE COMMISSION OR LOCAL GOVERNING BODY, AS THE CASE MAY BE.

(8) (a)  A TRANSFER OF RESTRUCTURING PROPERTY BY A UTILITY TO AN ASSIGNEE WHICH THE PARTIES HAVE, IN THE GOVERNING DOCUMENTATION, EXPRESSLY STATED TO BE A SALE OR OTHER ABSOLUTE TRANSFER, IN A TRANSACTION APPROVED IN A FINANCING ORDER, SHALL BE TREATED AS AN ABSOLUTE TRANSFER OF ALL OF THE TRANSFEROR'S RIGHT, TITLE, AND INTEREST, AS IN A TRUE SALE, AND NOT AS A PLEDGE OR OTHER FINANCING OF THE RESTRUCTURING PROPERTY, OTHER THAN FOR FEDERAL AND STATE INCOME TAX PURPOSES.

(b)  A TRANSFER OF RESTRUCTURING PROPERTY SHALL BE DEEMED PERFECTED AS AGAINST THIRD PERSONS, INCLUDING ANY JUDICIAL LIEN CREDITORS, WHEN ALL OF THE FOLLOWING HAVE TAKEN PLACE:

(I)  THE COMMISSION HAS ISSUED THE FINANCING ORDER CREATING RESTRUCTURING PROPERTY AND THE UTILITY HAS FILED ITS WRITTEN CONSENT TO THE TERMS OF THE FINANCING ORDER AS PROVIDED IN THIS SECTION;

(II)  A WRITTEN DOCUMENT EVIDENCING THE SALE OR TRANSFER OF THE RESTRUCTURING PROPERTY HAS BEEN EXECUTED AND DELIVERED TO THE ASSIGNEE; AND

(III)  A FINANCING STATEMENT HAS BEEN FILED WITH THE SECRETARY OF STATE IN ACCORDANCE WITH ARTICLE 9 OF TITLE 4, C.R.S., TO GIVE NOTICE TO THIRD PARTIES OF THE SALE OR OTHER ABSOLUTE TRANSFER.

(9)  CONTRACTING WITH THE ASSIGNEE IN ACCORDANCE WITH THE AUTHORIZATION TO GRANT HOLDERS OF RESTRUCTURING BONDS A PREFERRED RIGHT TO THE RESTRUCTURING PROPERTY OR TO PROVIDE ANY CREDIT ENHANCEMENT WITH RESPECT TO RESTRUCTURING BONDS SHALL NOT IMPAIR OR NEGATE THE CHARACTERIZATION OF THE SALE, ASSIGNMENT, TRANSFER, OR PLEDGE AS A TRUE SALE, AN ABSOLUTE ASSIGNMENT OR TRANSFER, OR A GRANT OF A SECURITY INTEREST, AS APPLICABLE IN ACCORDANCE WITH THIS SECTION OTHER THAN FOR FEDERAL AND STATE INCOME TAX PURPOSES.

(10) (a)  NOTWITHSTANDING ANY OTHER PROVISION OF LAW, ON SUCH CONDITIONS AS THE COMMISSION OR THE LOCAL GOVERNING BODY, AS THE CASE MAY BE, MAY APPROVE, ALL OR PORTIONS OF THE INTEREST OF A UTILITY IN RESTRUCTURING PROPERTY MAY BE ASSIGNED, SOLD, OR TRANSFERRED TO AN ASSIGNEE AND MAY BE PLEDGED OR ASSIGNED AS SECURITY BY A UTILITY OR ASSIGNEE TO OR FOR THE BENEFIT OF A RESTRUCTURING BONDHOLDER. TO THE EXTENT THAT AN INTEREST IS ASSIGNED, SOLD, OR TRANSFERRED OR IS PLEDGED OR ASSIGNED AS SECURITY, THE COMMISSION OR THE LOCAL GOVERNING BODY SHALL AUTHORIZE THE UTILITY TO CONTRACT WITH THE ASSIGNEE OR RESTRUCTURING BONDHOLDER THAT THE UTILITY WILL CONTINUE TO OPERATE ITS SYSTEM TO PROVIDE SERVICE TO ITS CUSTOMERS, WILL IMPOSE AND COLLECT THE APPLICABLE FIXED RESTRUCTURING AMOUNT FOR THE BENEFIT AND ACCOUNT OF THE ASSIGNEE OR RESTRUCTURING BONDHOLDER, AND WILL ACCOUNT FOR AND REMIT THE APPLICABLE FIXED RESTRUCTURING AMOUNT TO OR FOR THE ACCOUNT OF THE ASSIGNEE OR RESTRUCTURING BONDHOLDER.

(b)  IF THE FINANCING ORDER SO PROVIDES, THE OBLIGATIONS OF THE UTILITY:

(I)  SHALL BE BINDING UPON THE UTILITY AND ITS SUCCESSORS AND ASSIGNS; AND

(II)  SHALL BE REQUIRED BY THE COMMISSION OR THE LOCAL GOVERNING BODY, AS THE CASE MAY BE, TO BE UNDERTAKEN AND PERFORMED BY THE UTILITY AND ANY OTHER ENTITY THAT PROVIDES DISTRIBUTION SERVICE TO A PERSON THAT WAS A CUSTOMER OF A UTILITY LOCATED WITHIN THE SERVICE TERRITORY OF THE UTILITY ON JULY 1, 1998, OR THAT BECAME A CUSTOMER OF DISTRIBUTION SERVICES WITHIN SUCH TERRITORY AFTER JULY 1, 1998, AND IS STILL LOCATED WITHIN SUCH TERRITORY, AS A CONDITION TO THE PROVISION OF SERVICE TO SUCH CUSTOMER BY SUCH UTILITY OR OTHER ENTITY, UNLESS THE CUSTOMER HAS PAID AN EXIT FEE IN THE MANNER AND ON THE BASIS SPECIFIED IN THE FINANCING ORDER.

(11)  THE EFFECT OF ANY SUBSEQUENT REFINANCING OF RESTRUCTURING BONDS UPON THE RATES AUTHORIZED IN A FINANCING ORDER SHALL BE AS PROVIDED IN SUCH ORDER.

(12)  THE COMMISSION OR THE LOCAL GOVERNING BODY SHALL ESTABLISH PROCEDURES FOR THE ANNUAL REVIEW OF THE NON­BYPASSABLE RATES AND CHARGES APPROVED BY ANY FINANCING ORDER. THE REVIEW SHALL RECONCILE THE ANNUAL REVENUES RECEIVED FROM THE NON­BYPASSABLE RATES OR CHARGES WITH THE ANNUAL AMORTIZATION OF TRANSITION COSTS, IMPLEMENTATION COSTS, AND AIR QUALITY IMPROVEMENT COSTS APPROVED BY THE COMMISSION OR THE LOCAL GOVERNING BODY UNDER THIS ARTICLE. THE COMMISSION OR THE LOCAL GOVERNING BODY SHALL ADJUST THE NON­BYPASSABLE RATES OR CHARGES BASED UPON UNDERRECOVERY OR OVERRECOVERY OF THE ANNUAL AMORTIZATION AMOUNT.

(13)  NOTWITHSTANDING THE SALE OR OTHER TRANSFER OF RESTRUCTURING PROPERTY, THE CONSIDERATION RECEIVED BY THE UTILITY OR BY ITS AFFILIATE OR ASSIGNEE SHALL NOT BE SUBJECT TO ANY STATE OR LOCAL TAX NOR TO ANY SURCHARGES BASED UPON ANY STATE OR LOCAL TAX, NOW OR HEREAFTER IMPOSED. THE ASSIGNEE OF RESTRUCTURING PROPERTY SHALL NOT BE CONSIDERED TO BE A PUBLIC UTILITY OR A PERSON PROVIDING ELECTRIC SERVICE THAT IS REQUIRED TO PAY, WITH RESPECT TO THE RESTRUCTURING PROPERTY, ANY STATE OR LOCAL TAXES. INSTEAD, THE UTILITY IMPOSING AND COLLECTING THE NON­BYPASSABLE RATES OR CHARGES SHALL BE THE PERSON OBLIGATED TO COLLECT ALL STATE AND LOCAL TAXES WITH RESPECT TO SUCH CHARGES.

40­4.6­127.  Relationship to the Uniform Commercial Code. (1) (a)  NEITHER RESTRUCTURING PROPERTY NOR ANY RIGHT, TITLE, OR INTEREST OF A UTILITY OR ASSIGNEE DESCRIBED IN SECTION 40­4.6­102 (2), WHETHER BEFORE OR AFTER THE ISSUANCE OF THE FINANCING ORDER, NOR ANY ABSOLUTE SALE OR TRANSFER OF RESTRUCTURING PROPERTY SHALL BE GOVERNED BY ANY PROVISION OF LAW OTHER THAN THIS ARTICLE, INCLUDING, WITHOUT LIMITATION, THE COLORADO "UNIFORM COMMERCIAL CODE", TITLE 4, C.R.S., NOR SHALL ANY SUCH RIGHT, TITLE, OR INTEREST PERTAINING TO A FINANCING ORDER, INCLUDING THE ASSOCIATED RESTRUCTURING PROPERTY AND ANY REVENUES, COLLECTIONS, CLAIMS, PAYMENTS, MONEY, OR PROCEEDS OF OR ARISING FROM FIXED RESTRUCTURING AMOUNTS PURSUANT TO SUCH FINANCING ORDER BE DEEMED PROCEEDS OF ANY RIGHT OR INTEREST OTHER THAN IN THE ORDER AND THE RESTRUCTURING PROPERTY ARISING FROM THE FINANCING ORDER.

(b)  THE GRANTING, PERFECTION, AND ENFORCEMENT OF SECURITY INTERESTS IN RESTRUCTURING PROPERTY ARE GOVERNED BY THIS SECTION RATHER THAN BY THE COLORADO "UNIFORM COMMERCIAL CODE" TITLE 4, C.R.S.

(c)  A PLEDGE OR ANY OTHER SECURITY INTEREST IN RESTRUCTURING PROPERTY IS VALID, IS ENFORCEABLE AGAINST THE PLEDGOR AND THIRD PARTIES, INCLUDING JUDGMENT LIEN CREDITORS, SUBJECT ONLY TO THE RIGHTS OF ANY THIRD PARTIES HOLDING SECURITY INTERESTS IN THE RESTRUCTURING PROPERTY PERFECTED IN THE MANNER DESCRIBED IN THIS SECTION, AND ATTACHES ONLY WHEN ALL OF THE FOLLOWING HAVE TAKEN PLACE:

(I)  THE COMMISSION OR THE LOCAL GOVERNING BODY HAS ISSUED THE FINANCING ORDER AUTHORIZING THE FIXED RESTRUCTURING AMOUNTS INCLUDED IN THE RESTRUCTURING PROPERTY.

(II)  VALUE HAS BEEN GIVEN BY THE PLEDGEES OF THE RESTRUCTURING PROPERTY.

(III)  THE PLEDGOR HAS SIGNED A SECURITY AGREEMENT OR OTHER FINANCING­RELATED AGREEMENT COVERING THE RESTRUCTURING PROPERTY, OR, IN THE CASE OF A MUNICIPAL UTILITY, THE LOCAL GOVERNING BODY HAS ADOPTED A RESOLUTION OR ORDINANCE GRANTING A SECURITY INTEREST IN THE RESTRUCTURING PROPERTY.

(2) (a)  A VALID AND ENFORCEABLE SECURITY INTEREST IN RESTRUCTURING PROPERTY IS PERFECTED ONLY WHEN IT HAS ATTACHED AND WHEN A FINANCING STATEMENT HAS BEEN FILED WITH THE SECRETARY OF STATE IN ACCORDANCE WITH ARTICLE 9 OF TITLE 4, C.R.S. THE FINANCING STATEMENT SHALL NAME THE PLEDGOR OF THE RESTRUCTURING PROPERTY AS DEBTOR AND IDENTIFY THE RESTRUCTURING PROPERTY. SUCH FINANCING STATEMENT SHALL BE EFFECTIVE UNTIL A TERMINATION STATEMENT IS FILED WITH THE SECRETARY OF STATE IN ACCORDANCE WITH ARTICLE 9 OF TITLE 4, C.R.S.

(b)  ANY DESCRIPTION OF THE RESTRUCTURING PROPERTY IS SUFFICIENT IF THE DESCRIPTION REFERS TO THE FINANCING ORDER CREATING THE RESTRUCTURING PROPERTY.

(c)  A PERFECTED SECURITY INTEREST IN RESTRUCTURING PROPERTY IS A CONTINUOUSLY PERFECTED SECURITY INTEREST IN ALL REVENUE AND PROCEEDS ARISING WITH RESPECT TO THE RESTRUCTURING PROPERTY, WHETHER OR NOT THE REVENUE OR PROCEEDS HAVE ACCRUED. CONFLICTING SECURITY INTERESTS SHALL BE RANKED ACCORDING TO PRIORITY IN TIME OF PERFECTION. RESTRUCTURING PROPERTY CONSTITUTES PROPERTY FOR ALL PURPOSES, INCLUDING FOR CONTRACTS SECURING RESTRUCTURING BONDS, WHETHER OR NOT THE REVENUE AND PROCEEDS ARISING WITH RESPECT TO THE RESTRUCTURING PROPERTY HAVE ACCRUED.

(3)  SUBJECT TO THE TERMS OF THE SECURITY AGREEMENT COVERING THE RESTRUCTURING PROPERTY AND THE RIGHTS OF ANY THIRD PARTIES HOLDING SECURITY INTERESTS IN THE RESTRUCTURING PROPERTY PERFECTED IN THE MANNER DESCRIBED IN THIS SECTION, THE VALIDITY AND RELATIVE PRIORITY OF A SECURITY INTEREST CREATED UNDER THIS SECTION ARE NOT DEFEATED OR ADVERSELY AFFECTED BY:

(a)  THE COMMINGLING OF REVENUE ARISING WITH RESPECT TO THE RESTRUCTURING PROPERTY WITH OTHER MONEYS OF THE UTILITY THAT IS THE PLEDGOR OR TRANSFEROR OF THE RESTRUCTURING PROPERTY; OR

(b)  ANY SECURITY INTEREST OF ANY THIRD PARTY IN A DEPOSIT ACCOUNT OF THAT UTILITY PERFECTED UNDER THE COLORADO "UNIFORM COMMERCIAL CODE" TITLE 4, C.R.S., OR OTHER APPLICABLE PROVISION OF COLORADO LAW, INTO WHICH THE REVENUE IS DEPOSITED.

(4)  SUBJECT TO THE TERMS OF THE SECURITY AGREEMENT, UPON COMPLIANCE WITH THE REQUIREMENTS OF THIS SECTION, A PLEDGEE OF THE RESTRUCTURING PROPERTY HAS A PERFECTED SECURITY INTEREST IN ALL CASH AND DEPOSIT ACCOUNTS OF THE UTILITY IN WHICH REVENUE ARISING WITH RESPECT TO THE RESTRUCTURING PROPERTY HAS BEEN COMMINGLED WITH OTHER MONEYS; EXCEPT THAT THE PERFECTED SECURITY INTEREST SHALL BE LIMITED TO AN AMOUNT NO GREATER THAN THE AMOUNT OF THE REVENUE WITH RESPECT TO THE RESTRUCTURING PROPERTY RECEIVED BY THE UTILITY WITHIN TWELVE MONTHS BEFORE ANY DEFAULT UNDER THE SECURITY AGREEMENT OR THE INSTITUTION OF INSOLVENCY PROCEEDINGS BY OR AGAINST THE UTILITY, LESS PAYMENTS FROM THE REVENUE TO THE PLEDGEES DURING SUCH TWELVE­MONTH PERIOD.

(5)  IF AN EVENT OF DEFAULT OCCURS UNDER RESTRUCTURING BONDS, THE HOLDERS OF THE RESTRUCTURING BONDS OR THEIR AUTHORIZED REPRESENTATIVES, AS SECURED PARTIES, MAY FORECLOSE OR OTHERWISE ENFORCE THE LIEN IN THE RESTRUCTURING PROPERTY SECURING THE RESTRUCTURING BONDS, SUBJECT TO THE RIGHTS OF ANY THIRD PARTIES HOLDING PRIOR SECURITY INTERESTS IN THE RESTRUCTURING PROPERTY PERFECTED IN THE MANNER PROVIDED IN THIS SECTION. UPON APPLICATION BY THE BONDHOLDERS OR THEIR REPRESENTATIVES, WITHOUT LIMITING THEIR OTHER REMEDIES, THE COMMISSION OR THE LOCAL GOVERNING BODY, AS THE CASE MAY BE, SHALL ORDER THE SEQUESTRATION AND PAYMENT TO THE BONDHOLDERS OR THEIR REPRESENTATIVES OF REVENUES ARISING WITH RESPECT TO THE RESTRUCTURING PROPERTY PLEDGED TO THE BONDHOLDERS. AN ORDER UNDER THIS SUBSECTION (5) SHALL REMAIN IN FULL FORCE AND EFFECT NOTWITHSTANDING ANY BANKRUPTCY, REORGANIZATION, OR OTHER INSOLVENCY PROCEEDINGS WITH RESPECT TO THE UTILITY OR ASSIGNEE.

(6)  ANY SUCCESSOR TO THE UTILITY, WHETHER PURSUANT TO A BANKRUPTCY, REORGANIZATION, OR OTHER INSOLVENCY PROCEEDING OR PURSUANT TO A MERGER, SALE, OR TRANSFER, BY OPERATION OF LAW OR OTHERWISE, SHALL PERFORM AND SATISFY ALL OBLIGATIONS OF THE UTILITY PURSUANT TO THIS SECTION IN THE SAME MANNER AND TO THE SAME EXTENT AS THE UTILITY, INCLUDING, BUT NOT LIMITED TO, COLLECTING AND PAYING TO THE ASSIGNEE OR PLEDGEE, AS THE CASE MAY BE, REVENUE ARISING WITH RESPECT TO THE RESTRUCTURING PROPERTY SOLD, ASSIGNED, TRANSFERRED, OR PLEDGED TO SECURE RESTRUCTURING BONDS.

(7)  ANY SALE, ASSIGNMENT, OR OTHER TRANSFER OF RESTRUCTURING PROPERTY OR ANY PLEDGE OF RESTRUCTURING PROPERTY IS EXEMPT FROM ANY STATE OR LOCAL SALES, INCOME, TRANSFERS, GAINS, RECEIPTS, OR SIMILAR TAXES.

(8)  THE RESTRUCTURING BONDS ISSUED UNDER THIS ARTICLE ARE EXEMPT FROM THE PROVISIONS OF PART 3 OF ARTICLE 51 OF TITLE 11, C.R.S., BUT COPIES OF ALL PROSPECTUS AND DISCLOSURE DOCUMENTS, EXCEPT FOR DOCUMENTS RELATED TO MUNICIPAL UTILITIES, SHALL BE DEPOSITED FOR PUBLIC INSPECTION WITH THE STATE SECURITIES COMMISSIONER.

(9)  UPON THE PAYMENT IN FULL OF PRINCIPAL AND INTEREST OF RESTRUCTURING BONDS, THE UTILITY SHALL DISCONTINUE CHARGING AND COLLECTING THE FIXED RESTRUCTURING AMOUNTS ASSOCIATED WITH THAT PORTION OF THE UTILITY'S RESTRUCTURING PROPERTY.

40­4.6­128.  Relationship to other statutory sections. (1)  AFTER THE IMPLEMENTATION DATE, ELECTRIC SUPPLY SERVICE PROVIDED IN THE STATE OF COLORADO SHALL BE EXCLUSIVELY GOVERNED BY THIS ARTICLE FOR ALL UTILITIES THAT PARTICIPATE IN THE RESTRUCTURING REQUIRED BY THIS ARTICLE. FOR THOSE UTILITIES THAT ARE EXEMPT FROM THE PROVISIONS OF THIS ARTICLE UNDER SECTION 40­4.6­106, THE PROVISIONS OF OTHER PERTINENT ARTICLES OF THIS TITLE SHALL CONTINUE TO APPLY TO THE ELECTRIC SERVICE PROVIDED BY SUCH UTILITIES.

(2)  TRANSMISSION SERVICE AND DISTRIBUTION SERVICE SHALL CONTINUE TO BE GOVERNED BY THIS ARTICLE AND OTHER PROVISIONS OF THIS TITLE, TITLE 31, C.R.S., AND THE COLORADO CONSTITUTION RELATING TO THE REGULATION OF UTILITIES.

(3)  EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED BY THIS ARTICLE, THE REGULATORY AUTHORITY OF THE COMMISSION OVER MUNICIPAL UTILITIES AND COOPERATIVE ELECTRIC ASSOCIATIONS SHALL NOT BE BROADER THAN THE AUTHORITY GRANTED TO THE COMMISSION BY OTHER SECTIONS OF THIS TITLE OR BY THE COLORADO CONSTITUTION. 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.

SECTION 20  Effective date. This act shall take effect July 1, 1998.

SECTION 30  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.