HB 248: "An Act relating to consumer choice for electric energy in Alaska; and providing for an effective date."
00HOUSE BILL NO. 248 01 "An Act relating to consumer choice for electric energy in Alaska; and providing 02 for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. FINDINGS. (a) The legislature finds that 05 (1) electric energy should be provided competitively wherever possible; 06 (2) technological advances, reduced costs, and increased consumer choice for 07 electric energy resulting from the adoption of an appropriate competitive market structure will 08 enhance the state's economic ability to compete for jobs in the national and international 09 marketplace; 10 (3) competition in the generation of electric energy will ensure that electric 11 markets are operating efficiently and that Alaska-based businesses benefit from market prices; 12 (4) contracts for the sale of electric energy wholesale that are in place need 13 to be phased-out to allow for the implementation of competition in the electric energy market 14 in the state; independent energy producers in a competitive market should be encouraged; the
01 ability to sell energy in the wholesale market is important to economic development in Alaska; 02 co-generation facilities must be free to sell energy and not be restricted to avoided cost 03 methodology; and 04 (5) all classes of consumers should realize the benefits of consumer choice in 05 electric energy. 06 (b) In providing for competition in the electric energy market, the Alaska Public 07 Utilities Commission should 08 (1) address municipal and cooperative debt expense as part of its review of 09 retail competition; 10 (2) oversee consumer choice in electric energy to ensure that the competition 11 among electric providers is fair to consumers and electric providers; and 12 (3) provide for consumer choice in a timely manner by adopting regulations 13 allowing consumers to choose among competitive electric providers. 14 (c) Because of the unique nature of the non-interconnected rural utilities in Alaska, 15 restructuring discussions and policy options focused on the Railbelt utilities are not appropriate 16 for non-interconnected utilities and communities. 17 * Sec. 2. AS 42.05.141(a) is amended to read: 18 (a) The Alaska Public Utilities Commission may do all things necessary or 19 proper to carry out the purposes and exercise the powers expressly granted or 20 reasonably implied in this chapter, including 21 (1) regulate 22 (A) every public utility engaged or proposing to engage in a 23 utility business inside the state, except to the extent exempted by 24 AS 42.05.711; and 25 (B) power aggregators and power marketers as provided in 26 AS 42.05.905 - 42.05.930; 27 (2) investigate, upon complaint or upon its own motion, the rates, 28 classifications, rules, regulations, practices, services, and facilities of a public utility 29 and hold hearings on them; 30 (3) make or require just, fair, and reasonable rates, classifications, 31 regulations, practices, services, and facilities for a public utility;
01 (4) prescribe the system of accounts and regulate the service and safety 02 of operations of a public utility; 03 (5) require a public utility to file reports and other information and 04 data; 05 (6) appear personally or by counsel and represent the interests and 06 welfare of the state in all matters and proceedings involving a public utility pending 07 before an officer, department, board, commission, or court of the state or of another 08 state or the United States and to intervene in, protest, resist, or advocate the granting, 09 denial, or modification of any petition, application, complaint, or other proceeding; 10 (7) examine witnesses and offer evidence in any proceeding affecting 11 the state and initiate or participate in judicial proceedings to the extent necessary to 12 protect and promote the interests of the state. 13 * Sec. 3. AS 42.05.221(d) is amended to read: 14 (d) Except as provided in AS 42.05.905 - 42.05.930, in [IN] an area where 15 the commission determines that two or more public utilities are competing to furnish 16 identical utility service and that this competition is not in the public interest, the 17 commission shall take appropriate action to eliminate the competition and any 18 undesirable duplication of facilities. This appropriate action may include, but is not 19 limited to, ordering the competing utilities to enter into a contract that, among other 20 things, would [:] 21 (1) delineate the service area boundaries of each in those areas of 22 competition; 23 (2) eliminate existing duplication and paralleling to the fullest 24 reasonable extent; 25 (3) preclude future duplication and paralleling; 26 (4) provide for the exchange of customers and facilities for the 27 purposes of providing better public service and of eliminating duplication and 28 paralleling; and 29 (5) provide such other mutually equitable arrangements as would be in 30 the public interest. 31 * Sec. 4. AS 42.05 is amended by adding new sections to read:
01 Article 10A. Competitive Electrical Service. 02 Sec. 42.05.905. Pilot programs. (a) Before the opening of a retail electricity 03 pilot program, and no later than July 1, 2000, the commission shall adopt regulations 04 that 05 (1) calculate and allocate component costs for Railbelt utilities in a 06 rational and uniform manner (unbundling and cost allocation); 07 (2) rationalize access to and governance of the transmission system to 08 create a nondiscriminatory open access network while ensuring reliability; and 09 (3) rationalize oversight of generation siting and construction to 10 minimize stranded cost exposure and to further enhance the expansion of a wholesale 11 competitive market with new merchant generators. 12 (b) By January 1, 2001, the commission shall adopt regulations to allow 13 consumers in an urban area to choose their electric provider. 14 (c) By January 1, 2002, the commission may adopt regulations to allow 15 consumers outside of an urban area to choose their electric provider. 16 (d) In carrying out this section, the commission shall adopt regulations to 17 ensure that 18 (1) the reliability, quality, safety, and integrity of the electric system 19 continues in place; 20 (2) all classes of consumers benefit from choice; 21 (3) consumer protections are sufficient; 22 (4) there is fair competition among electric providers; 23 (5) electric providers that are public utilities maintain their generation 24 operations and assets separately from other operations and assets; 25 (6) electric providers affiliated with public utilities that generate electric 26 energy may not exercise unfair market power or gain an unfair market advantage as 27 the result of that affiliation; 28 (7) generation, transmission, and distribution services and costs are 29 unbundled in those service areas opened to competitive electric providers; 30 (8) equal access to unbundled transmission and distribution lines at just 31 and reasonable rates is available so electric providers may participate in a competitive
01 electric energy marketplace; 02 (9) if competition exists within a service area, the commission may not 03 regulate the rates for service within the area of competition; 04 (10) carrier of last resort obligations are fulfilled; and 05 (11) costs stranded as the result of consumer choice are recovered. 06 Sec. 42.05.910. Recoverable stranded cost. The commission may not 07 recognize the loss of revenue under wholesale power contracts in existence on or after 08 the effective date of this section between generation and transmission and distribution 09 cooperative electric utilities as a recoverable stranded cost. 10 Sec. 42.05.915. Regulation of power aggregators and power marketers. (a) 11 A power aggregator or power marketer that is not a public utility is subject to 12 regulation by the commission only as provided in this section. A power aggregator 13 or power marketer that furnishes, by generation, transmission, or distribution, electric 14 energy to the public for compensation continues to be subject to regulation by the 15 commission as a public utility under this chapter. 16 (b) The commission may adopt regulations concerning power aggregators and 17 power marketers it considers to be in the public interest. The regulations must require 18 (1) registration with the commission; 19 (2) bonding; and 20 (3) a price cap for retail electric energy equal to the rates charged by 21 the carrier of last resort for a similar electric load. 22 Sec. 42.05.920. Application of AS 42.05.905 - 42.05.930 to areas. Except 23 as provided in AS 42.05.905(c), AS 42.05.905 - 42.05.930 apply only to an urban area. 24 Sec. 42.05.930. Definitions for AS 42.05.905 - 42.05.930. In AS 42.05.905 - 25 42.05.930, 26 (1) "carrier of last resort" means the public utility certified to provide 27 electric distribution in the consumer's service area; 28 (2) "consumer choice" means the choice of a wholesale or retail 29 consumer to choose among competitive electric providers; 30 (3) "electric provider" means any public utility, power aggregator, 31 power marketer, or similar entity that sells electric energy;
01 (4) "power aggregator" means an entity that purchases and takes title 02 to electric energy for resale; 03 (5) "power marketer" means an entity that acts as an agent or 04 intermediary in the purchase of electric energy but does not take title to the electric 05 energy; 06 (6) "recoverable stranded cost" means a cost that a public utility subject 07 to economic regulation by the commission would be allowed recover as either a 08 transition surcharge or other recoverable rate category; 09 (7) "urban area" means those electric service areas located in a 10 municipality that are served by interconnected electric utilities. 11 * Sec. 5. This Act takes effect immediately under AS 01.10.070(c).