Colorado Legislative Council Staff

STATE

REVISED NO FISCAL IMPACT

(replaces fiscal impact dated January 27, 1999)

TITLE:            CONCERNING THE VOLUNTARY RESTRUCTURING OF THE RETAIL MARKET FOR NATURAL GAS, AND MAKING AN APPROPRIATION THEREFOR.

Summary of Assessment

            The bill, as amended by the Senate Business Affairs and Labor Committee, February 3,1999, permits natural gas public utilities to file voluntary restructuring plans for opening the natural gas supply markets to consumers, subject to the review and approval of the Public Utilities Commission (PUC), Department of Regulatory Agencies. The bill requires restructuring plans to contain specified provisions designed to preserve the integrity and reliability of natural gas service to consumers. The bill would allow the utility company to recover "transition costs" including investments and costs incurred that the PUC finds to have been made reasonably and prudently before the effective date of the restructuring plan. The amended bill continues imposing a "public benefits" charge until at least December 31, 2005, and thereafter until and unless it is replaced with a different legislatively adopted funding mechanism for statewide low-income energy assistance programs. The amended bill directs the Colorado Energy Assistance Foundation (CEAF), a non-state agency created under Section 40-8.5-104, C.R.S., to contract with a private party to study the effects of restructuring the natural gas market on low-income consumers. The study would begin within one year following implementation of the first restructuring plan that affects a significant number of low-income households. The bill requires CEAF to report its findings and recommendations to the General Assembly within two years following the initial implementation.

            The PUC has indicated that it expects one or two voluntary restructuring plans per year, and that such plans could be reviewed and recommendations made by their current staff, and would not require any additional appropriation. However, if significantly more plans were to be submitted in FY 1999/00, additional staff could be required. It is assumed that the costs of providing adequate consumer education, as required by the bill, will be paid for by the utilities themselves and not by the PUC.

            The amended bill eliminates the requirement that the PUC conduct the study of the effects of restructuring the natural gas market on low-income consumers. This change eliminates the fiscal impact to the PUC. The provisions of the bill will not affect any other state agency or unit of local government. Therefore, this bill is assessed as having no fiscal impact.

Departments Contacted

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