SB 303: "An Act relating to consumer choice for electric energy in Alaska; and providing for an effective date."
00SENATE BILL NO. 303 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. The uncodified law of the State of Alaska is amended by adding a new 05 section to read: 06 FINDINGS. (a) The legislature finds that 07 (1) electric energy should be provided competitively wherever possible; 08 (2) technological advances, reduced costs, and increased consumer choice for 09 electric energy resulting from the adoption of an appropriate competitive market structure will 10 enhance the state's economic ability to compete for jobs in the national and international 11 marketplace; 12 (3) competition in the generation of electric energy will ensure that electric 13 markets are operating efficiently and that Alaska-based businesses benefit from market prices; 14 (4) retail customers should be given the right to choose their electric power
01 supplier so that competitive pressure is placed on both wholesale power suppliers and 02 wholesale purchasers, including resellers, to revise or terminate existing long-term power 03 supply contracts as needed to competitively meet retail customer needs; independent energy 04 producers in a competitive market should be encouraged; the ability to sell energy in the 05 wholesale market is important to economic development in Alaska; co-generation facilities 06 must continue to be free to sell energy and not be restricted to avoided cost methodology; and 07 (5) all classes of consumers should realize the benefits of consumer choice in 08 electric energy. 09 (b) In providing for competition in the electric energy market, the Regulatory 10 Commission of Alaska shall 11 (1) provide for retail consumer choice in urban areas no later than 12 September 1, 2001, by adopting regulations allowing consumers to choose among competitive 13 electric providers; and 14 (2) oversee consumer choice in electric energy to ensure that the competition 15 among electric providers is fair to consumers and electric providers. 16 (c) Because of the unique nature of the non-interconnected rural utilities in Alaska, 17 restructuring discussions and policy options focused on the Railbelt utilities are not appropriate 18 for non-interconnected utilities and communities. 19 * Sec. 2. AS 42.05.141(a) is amended to read: 20 (a) The Regulatory Commission of Alaska may do all things necessary or 21 proper to carry out the purposes and exercise the powers expressly granted or 22 reasonably implied in this chapter, including 23 (1) regulate 24 (A) every public utility engaged or proposing to engage in a 25 utility business inside the state, except to the extent exempted by 26 AS 42.05.711; and 27 (B) power aggregators and power marketers as provided in 28 AS 42.05.905 - 42.05.930; 29 (2) investigate, upon complaint or upon its own motion, the rates, 30 classifications, rules, regulations, practices, services, and facilities of a public utility 31 and hold hearings on them;
01 (3) make or require just, fair, and reasonable rates, classifications, 02 regulations, practices, services, and facilities for a public utility; 03 (4) prescribe the system of accounts and regulate the service and safety 04 of operations of a public utility; 05 (5) require a public utility to file reports and other information and 06 data; 07 (6) appear personally or by counsel and represent the interests and 08 welfare of the state in all matters and proceedings involving a public utility pending 09 before an officer, department, board, commission, or court of the state or of another 10 state or the United States and to intervene in, protest, resist, or advocate the granting, 11 denial, or modification of any petition, application, complaint, or other proceeding; 12 (7) examine witnesses and offer evidence in any proceeding affecting 13 the state and initiate or participate in judicial proceedings to the extent necessary to 14 protect and promote the interests of the state. 15 * Sec. 3. AS 42.05.221(d) is amended to read: 16 (d) Except as provided in AS 42.05.905 - 42.05.930, in [IN] an area where 17 the commission determines that two or more public utilities are competing to furnish 18 identical utility service and that this competition is not in the public interest, the 19 commission shall take appropriate action to eliminate the competition and any 20 undesirable duplication of facilities. This appropriate action may include, but is not 21 limited to, ordering the competing utilities to enter into a contract that, among other 22 things, would [:] 23 (1) delineate the service area boundaries of each in those areas of 24 competition; 25 (2) eliminate existing duplication and paralleling to the fullest 26 reasonable extent; 27 (3) preclude future duplication and paralleling; 28 (4) provide for the exchange of customers and facilities for the 29 purposes of providing better public service and of eliminating duplication and 30 paralleling; and 31 (5) provide such other mutually equitable arrangements as would be in
01 the public interest. 02 * Sec. 4. AS 42.05 is amended by adding new sections to read: 03 Article 10A. Competitive Electrical Service. 04 Sec. 42.05.905. Retail choice. (a) No later than September 1, 2001, retail 05 customers in urban areas shall be permitted to purchase electric power service from 06 an electric public utility power aggregator or power marketer of the customer's choice. 07 (b) No later than July 1, 2001, the commission shall adopt regulations that 08 (1) provide for the calculation and allocation of component costs for 09 utilities serving customers in an urban area in a rational and uniform manner 10 (unbundling and cost allocation); 11 (2) encourage rationalization of access to the transmission system to 12 create a nondiscriminatory open access network while ensuring reliability; 13 (3) eliminate the oversight of generation siting and construction to 14 further enhance the expansion of a wholesale competitive market with new merchant 15 generators; and 16 (4) allow consumers in an urban area to choose their electric provider. 17 (c) The commission may not adopt regulations or take action to allow 18 consumers outside of an urban area to choose their electric provider. 19 (d) In carrying out this section, the commission shall adopt regulations to 20 ensure that 21 (1) the reliability, quality, safety, and integrity of the electric system 22 continues in place; 23 (2) all classes of consumers have an opportunity to benefit from choice; 24 (3) consumer protections are sufficient; 25 (4) electric providers that are public utilities account for their 26 generation operations and assets separately from other operations and assets; 27 (5) to the extent that a public utility is vertically integrated, the utility 28 functionally separates its electricity supply, retail transmission and distribution, and 29 regulated and unregulated retail energy services operations in the state; 30 (6) public utilities are required to 31 (A) prevent undue discrimination in favor of their own power
01 supply, other services, divisions, or affiliated interests, if any; 02 (B) prevent any other forms of self-dealing that could result in 03 noncompetitive electricity prices to customers; and 04 (C) grant customers and their electricity suppliers access to the 05 public utility's retail transmission and distribution systems on a 06 nondiscriminatory basis at rates, terms, and conditions of service comparable 07 to the use of the retail transmission and distribution system by the public utility 08 and the public utility's affiliates; 09 (7) generation, transmission, and distribution services and costs are 10 unbundled in those service areas opened to competitive electric providers; 11 (8) equal access to unbundled transmission and distribution lines at just 12 and reasonable rates is available so electric providers may participate in a competitive 13 electric energy marketplace; 14 (9) if competition exists within a service area, the commission may not 15 regulate the rates for service within the area of competition; 16 (10) carrier of last resort obligations are fulfilled; and 17 (11) costs stranded as the result of consumer choice are recovered. 18 (e) The commission may not order a public utility to divest itself of any 19 generation assets or prohibit a public utility from divesting itself voluntarily of any 20 generation assets. 21 Sec. 42.05.910. Recoverable stranded cost. (a) The commission may 22 authorize a nonbypassable stranded investment charge to be paid to a public utility that 23 demonstrates that it has investments that are stranded as a result of competition 24 resulting from AS 42.05.905 - 42.05.930 and that cannot be mitigated through a sale 25 or other reasonable measures. 26 (b) The commission may not 27 (1) recognize the loss of revenue under wholesale power contracts in 28 existence on or after the effective date of this section between generation and 29 transmission and distribution cooperative electric utilities as a recoverable stranded 30 cost; 31 (2) require a public utility to terminate, void, or modify an existing
01 power sales agreement that has been previously approved by the commission or by the 02 former Alaska Public Utilities Commission; 03 (3) recognize as stranded investments any assets acquired in 04 anticipation of retail wheeling or retail electric customer choice. 05 Sec. 42.05.915. Regulation of power aggregators and power marketers. (a) 06 A power aggregator or power marketer that is not a public utility is subject to 07 regulation by the commission only as provided in this section. 08 (b) The commission may adopt regulations concerning power aggregators and 09 power marketers it considers to be in the public interest. The regulations must require 10 (1) registration with the commission; 11 (2) bonding sufficient to protect the power aggregator's or power 12 marketer's customers in the event of default of the power aggregator or power 13 marketer; and 14 (3) a price cap for retail electric energy equal to the rates charged by 15 the carrier of last resort for a similar electric load. 16 Sec. 42.05.920. Application of AS 42.05.905 - 42.05.930 to areas. 17 AS 42.05.905 - 42.05.930 apply only to an urban area. 18 Sec. 42.05.930. Definitions for AS 42.05.905 - 42.05.930. In AS 42.05.905 - 19 42.05.930, 20 (1) "carrier of last resort" means the public utility certified to provide 21 electric distribution in the consumer's service area; 22 (2) "consumer choice" means the choice of a wholesale or retail 23 consumer to choose among competitive electric providers; 24 (3) "electric provider" means any public utility, power aggregator, 25 power marketer, or similar entity that sells electric energy; 26 (4) "power aggregator" means an entity that purchases and takes title 27 to electric energy for resale; 28 (5) "power marketer" means an entity that acts as an agent or 29 intermediary in the purchase of electric energy but does not take title to the electric 30 energy; 31 (6) "recoverable stranded cost" means a cost that a public utility subject
01 to economic regulation by the commission would be allowed recover as either a 02 transition surcharge or other recoverable rate category; 03 (7) "urban area" means an area served by interconnected electric 04 utilities that provide service to a total of more than 100,000 customers. 05 * Sec. 5. This Act takes effect immediately under AS 01.10.070(c).