Colorado Legislative Council Staff



Drafting Number:

Prime Sponsor(s):

LLS 99-0229

Sen. Tebedo

Rep. McPherson


Bill Status:

Fiscal Analyst:

March 15, 1999

Senate SVMA

Will Meyer (303-866-4976)



Fiscal Impact Summary

FY 1999/2000

FY 2000/2001

State Revenues

Cash Fund



State Expenditures

Cash Fund



FTE Position Change

0.0 FTE

0.0 FTE

Other State Impact: TABOR

Effective Date: Upon signature of the Governor

Appropriation Summary for FY 1999-2000: Department of Regulatory Agencies: Public Utilities Commission $43,470 - Fixed Utilities Cash Fund

Local Government Impact: Potential impact to some municipal utilities.

Summary of Legislation

            This bill would subject non-utility activities of natural gas and electrical utilities, including cooperative electric associations, electrical and gas corporations, and municipal gas and electric public utilities to regulatory actions of the Public Utilities Commission (PUC) to ensure that public utility tariffs exclude all costs relating to non-utility activity. The bill requires the PUC:


               to determine which activities would be "non-utility" activities (by no later than July 15, 1999);

               to adopt fair standards to prevent unfair competition and protect ratepayers of the utility. Such fair standards would govern the relationship between gas and electric pubic utilities and their non-utility activities to prevent discrimination by such utilities (by no later than January 1, 2000); and

               to develop rules and regulations to ensure that public utility tariffs exclude all rates, tolls, fares, rentals, charges, and classifications relating to non-utility activities (by no later than July 15, 2000). The provisions of the bill applying to municipal utilities apply only to municipal utilities that operate outside the city limits of a home rule city.

State Revenues

            The costs identified in this fiscal note to audit cooperative associations and municipal utilities will be borne by the regulated utilities, the cooperative associations, and the municipal utilities. These participants in the Fixed Utilities Fund will be assessed and required to pay a total of $43,470 into the Fixed Utilities Fund in FY 1999-00.

State Expenditures

            It is assumed that the PUC will be able to conduct the necessary rule making proceedings and establish the required standards within their existing resources, as well as provide on-going enforcement, ie. use of cease and desist orders, of the prohibition on gas and electric public utilities from using ratepayer funds to subsidize non-utility activities.

            However, once the cooperative associations and municipal utilities providing non-utility activities have been identified, additional contract services will be required to ensure that the utility tariffs exclude all the costs of non-utility activities. In FY 1999-00, it is assumed the PUC will contract with a Rate/Financial Analyst to conduct initial audits of the estimated two-thirds (29) of the 44 cooperative associations and municipal utilities that provide non-utility activities. It is estimated that this will require approximately one week to conduct an audit of each utility, and will cost $31,870 ($20.43 per hour times 1,560 hours) in personal services and $11,600 (29 weeks times $400 per week) in travel costs, for a total cost of $43,470 cash funds in FY 1999-00.

Local Government Impact

            Municipal utilities that operate outside the city limits of a home rule city and provide non-utility activities would be subject to an audit by the PUC. The costs to municipal utilities to participate in such audits and to amend current accounting practices vary from municipal utility to utility. The costs to implement the provisions of this bill cannot be accurately estimated.

State Appropriations

            This statement of fiscal impact implies that the Public Utilities Commission, Department of Regulatory Agencies, should be appropriated $43,470 out of the Fixed Utilities Fund in FY 1999-00.

Departments Contacted


            Regulatory Agencies              Local Affairs              Revenue