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Second Regular Session
Sixty-first General Assembly
LLS NO. 980073.01 DHG
SENATE BILL 98077
STATE OF COLORADO
BY SENATOR Weddig;
also REPRESENTATIVE McPherson.
BUSINESS AFFAIRS & LABOR
A BILL FOR AN ACT
CONCERNING REGULATED PUBLIC UTILITIES SELLING ENERGY
THAT ENGAGE IN BUSINESSES OTHER THAN THE PROVISION OF PUBLIC UTILITY
(Note: This summary applies to this bill as introduced
and does not necessarily reflect any amendments that may be subsequently
Declares that, in recent years, regulated gas and electric public utilities have diversified into businesses other than the provision of basic "public utility" service. Declares that it is in the public interest to promote free and fair competition in the provision of such goods and services.
In statutes defining a "public utility", specifically excludes goods and services offered in connection with the installation or maintenance of outdoor lighting.
Defines "nonutility activity" as any activity that, as determined by the public utilities commission (PUC), is not subject to the jurisdiction, control, and regulation of the commission when engaged in by a person other than a "public utility". Requires that public utilities engage in nonutility activity only through a subsidiary or affiliate. Grants the PUC authority to examine the relationships and business practices of public utilities and their nonregulated subsidiaries and affiliates to avoid crosssubsidies or confusion among customers regarding what goods and services are regulated, what entities are offering goods and services, or the experience and qualifications of the entities offering the goods and services. Directs the PUC to adopt rules of conduct to prevent such confusion and makes it a deceptive trade practice for a utility to carry on nonutility activity in such a manner as to promote such confusion.
Requires the removal from utility tariffs of all
references to goods and services defined as "nonutility
activity" and requires utilities to report their nonutility
activity to the PUC at least annually. Authorizes the PUC to restrict
the nonutility activity of a utility if the PUC finds that
the utility's core services are suffering as a result of diversion
of capital or operating resources to nonutility activity.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. Legislative declaration. (1) The general assembly finds, determines, and declares that:
(a) In recent years, gas and electric public utilities regulated by Colorado and other states have begun to diversify into businesses other than the provision of "public utility" service as traditionally defined and understood.
(b) Such other businesses include, without limitation, the installation, repair, and maintenance of electric lighting, home appliances, and home security systems.
(c) Because of the public utility's status as a public utility, there is a potential for consumer confusion when public utilities engage in nonutility activities, including, but not limited to, the potential for consumers to be confused about which goods and services are subject to regulation by public agencies and which are not.
(d) It is in the public interest to promote free and fair competition in the provision of such goods and services.
(e) This act is intended to further the purposes of, and not to replace or diminish in any way, the existing provisions of section 403114, Colorado Revised Statutes, prohibiting subsidization of nonregulated activities.
SECTION 2. 401103, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SUBSECTION to read:
401103. Public utility defined. (5) FOR THE PURPOSES OF ARTICLES 1 TO 7 OF THIS TITLE, PUBLIC UTILITIES THAT OFFER GOODS AND SERVICES IN CONNECTION WITH THE INSTALLATION OR MAINTENANCE OF OUTDOOR LIGHTING SHALL NOT BE CONSIDERED PUBLIC UTILITIES WITH RESPECT TO THE PROVISION OF SUCH GOODS AND SERVICES, BUT INSTEAD SHALL OFFER SUCH GOODS AND SERVICES IN ACCORDANCE WITH SECTION 401103.2.
SECTION 3. Article 1 of title 40, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read:
401103.2. Nonutility activities of public utilities definition divestiture required role of commission. (1) AS USED IN THIS SECTION, "NONUTILITY ACTIVITY" MEANS ANY ACTIVITY THAT, AS DETERMINED BY THE COMMISSION, WOULD NOT BE SUBJECT TO THE JURISDICTION, CONTROL, AND REGULATION OF THE COMMISSION IF ENGAGED IN BY A PERSON OTHER THAN A PUBLIC UTILITY.
(2) A PUBLIC UTILITY THAT ENGAGES IN NONUTILITY ACTIVITY SHALL BE EXEMPT, WITH RESPECT TO SUCH NONUTILITY ACTIVITY, FROM REGULATION BY THE COMMISSION AND FROM THE REQUIREMENTS OF ARTICLES 1 TO 7 OF THIS TITLE EXCEPT AS FOLLOWS:
(a) THE PUBLIC UTILITY SHALL ENGAGE IN NONUTILITY ACTIVITY ONLY THROUGH A SUBSIDIARY OR AFFILIATE.
(b) THE COMMISSION SHALL ADOPT STANDARDS OF CONDUCT TO GOVERN THE RELATIONSHIP BETWEEN PUBLIC UTILITIES AND THEIR SUBSIDIARIES AND AFFILIATES TO PREVENT DISCRIMINATION BY PUBLIC UTILITIES IN FAVOR OF THEIR NONREGULATED SUBSIDIARIES AND AFFILIATES AND TO PREVENT UNFAIR COMPETITION. SUCH STANDARDS SHALL BE EFFECTIVE ON OR BEFORE JANUARY 1, 1999. IN ADDITION, THE COMMISSION MAY TAKE SUCH ACTION AS IS NECESSARY TO AVOID CONFUSION ON THE PART OF CUSTOMERS AND RATEPAYERS AS TO WHEN THE CUSTOMER IS DEALING WITH THE PUBLIC UTILITY IN A REGULATED AREA, WHEN THE CUSTOMER IS DEALING WITH THE PUBLIC UTILITY'S SUBSIDIARIES AND AFFILIATES IN AN UNREGULATED AREA, AND WHETHER OR NOT THE GOODS AND SERVICES OFFERED BY THE PUBLIC UTILITY AND ITS SUBSIDIARIES AND AFFILIATES ARE SUBJECT TO REGULATION.
(c) THE COMMISSION MAY RESTRICT THE NONUTILITY ACTIVITY OF A PUBLIC UTILITY IF THE COMMISSION FINDS, UPON COMPLAINT OR UPON ITS OWN MOTION AND AFTER NOTICE AND THE OPPORTUNITY FOR A HEARING, THAT THE PUBLIC UTILITY'S ABILITY TO PROVIDE PUBLIC UTILITY SERVICE ADEQUATELY AND AT JUST AND REASONABLE RATES IS OR WILL BE JEOPARDIZED AS A RESULT OF DIVERSION OF CAPITAL OR OPERATING RESOURCES TO NONUTILITY ACTIVITY.
(d) NONUTILITY ACTIVITY SHALL NOT BE INCLUDED IN THE FILED TARIFF RATES OF A PUBLIC UTILITY. ON OR BEFORE JULY 15, 1998, THE COMMISSION SHALL ORDER EVERY PUBLIC UTILITY WHOSE EXISTING TARIFFS INCLUDE NONUTILITY ACTIVITY TO FILE, WITHIN SIXTY DAYS AFTER THE DATE OF SUCH ORDER, NEW OR AMENDED TARIFFS FROM WHICH ALL RATES, TOLLS, FARES, RENTALS, CHARGES, AND CLASSIFICATIONS RELATING TO NONUTILITY ACTIVITY HAVE BEEN REMOVED.
(e) A PUBLIC UTILITY SHALL NOTIFY THE COMMISSION, IN SUCH FORM AND MANNER AS THE COMMISSION MAY PRESCRIBE, WITHIN TEN DAYS AFTER FIRST ENGAGING IN A NEW NONUTILITY ACTIVITY AND SHALL ANNUALLY REPORT ALL NONUTILITY ACTIVITY TO THE COMMISSION IN SUCH FORM AND MANNER AS THE COMMISSION MAY PRESCRIBE.
SECTION 4. 403103, Colorado Revised Statutes, is amended to read:
403103. Utilities to file
rate schedules. (1) Under such
rules and regulations as the commission may prescribe, every public
utility shall file with the commission, within such time and in
such form as the commission may designate, and shall print and
keep open to public inspection, schedules showing all rates, tolls,
rentals, charges, and classifications collected or enforced, or
to be collected and enforced, together with all rules, regulations,
contracts, privileges, and facilities
THAT in any manner affect or relate to rates, tolls, rentals,
classifications, or service, except
that SUBJECT TO THE FOLLOWING EXCEPTIONS:
(a) RATES, TOLLS, RENTALS, CHARGES, AND CLASSIFICATIONS COLLECTED OR ENFORCED, OR TO BE COLLECTED AND ENFORCED, THAT RELATE TO NONUTILITY ACTIVITY, AS DEFINED IN SECTION 401103.2, SHALL NOT BE INCLUDED.
(b) The commission may not prescribe by rule or regulation the lease rate that is charged to a driver of a motor vehicle by a common or contract carrier. Changes in such lease rates shall not be subject to the notice provision of section 403102.
SECTION 5. 61105 (1), Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PARAGRAPH to read:
61105. Deceptive trade practices. (1) A person engages in a deceptive trade practice when, in the course of such person's business, vocation, or occupation, such person:
(qq) (I) IS A PUBLIC UTILITY SUBJECT TO REGULATION BY THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO OR BY AN AGENCY OF ANOTHER JURISDICTION WITH POWERS AND DUTIES COMPARABLE TO THOSE OF THE COMMISSION, OR IS A DIVISION SUBSIDIARY, OR AFFILIATE OF SUCH PUBLIC UTILITY, AND ENGAGES IN NONUTILITY ACTIVITY IN COLORADO IN SUCH A MANNER AS TO EITHER:
(A) MISLEAD OR CONFUSE THE PUBLIC REGARDING THE NONREGULATED NATURE OF THE ACTIVITY, THE ENTITY ENGAGING IN THE ACTIVITY, THE LENGTH OF TIME DURING WHICH THE ENTITY HAS ENGAGED IN THE ACTIVITY, OR THE EXPERTISE OF THE ENTITY IN ENGAGING IN THE ACTIVITY; OR
(B) VIOLATE ANY OTHER PROVISION OF THIS SECTION.
(II) AS USED IN THIS PARAGRAPH (qq), "NONUTILITY ACTIVITY" HAS THE MEANING SET FORTH IN SECTION 401103.2, C.R.S.
SECTION 6. Effective date. This act shall take effect at 12:01 a.m. on the day following the expiration of the ninetyday period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution; except that, if a referendum petition is filed against this act or an item, section, or part of this act within such period, then the act, item, section, or part, if approved by the people, shall take effect on the date of the official declaration of the vote thereon by proclamation of the governor.