Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 244 (2016GS)

Sponsor

Rep. Gibson, F.

Final action

Governor Signed 3/25/2016

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• exempts, from regulation by the Public Service Commission as a public utility, under certain conditions, an independent energy producer that provides energy to a residential customer participating in a net metering program in an area served by an electrical corporation with more than 200,000 retail customers in the state;
• provides that an agreement between an independent energy producer and a customer shall contain certain provisions; and
• provides that a public utility is obligated to serve a customer in the public utility's service area that is partially served by an independent energy producer.

Every vote on this bill

Bill text

INDEPENDENT ENERGY PRODUCER AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Francis D. Gibson
Senate Sponsor: 
Wayne A. Harper
LONG TITLE
General Description:
This bill amends provisions related to an independent energy producer.
Highlighted Provisions:
This bill:
▸ exempts, from regulation by the Public Service Commission as a public utility,
under certain conditions, an independent energy producer that provides energy to a
residential customer participating in a net metering program in an area served by an
electrical corporation with more than 200,000 retail customers in the state;
▸ provides that an agreement between an independent energy producer and a customer
shall contain certain provisions; and
▸ provides that a public utility is obligated to serve a customer in the public utility's
service area that is partially served by an independent energy producer.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
54-2-1
, as last amended by Laws of Utah 2014, Chapters 20, 381, and 388
54-15-108
, as last amended by Laws of Utah 2014, Chapter 381
ENACTS:
54-2-201
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
54-2-1
 is amended to read:
54-2-1.
Definitions.
As used in this title:
(1) "Avoided costs" means the incremental costs to an electrical corporation of electric
energy or capacity or both that, due to the purchase of electric energy or capacity or both from
small power production or cogeneration facilities, the electrical corporation would not have to
generate itself or purchase from another electrical corporation.
(2) "Cogeneration facility":
(a) means a facility that produces:
(i) electric energy; and
(ii) steam or forms of useful energy, including heat, that are used for industrial,
commercial, heating, or cooling purposes; and
(b) is a qualifying cogeneration facility under federal law.
(3) "Commission" means the Public Service Commission of Utah.
(4) "Commissioner" means a member of the commission.
(5) (a) "Corporation" includes an association and a joint stock company having any
powers or privileges not possessed by individuals or partnerships.
(b) "Corporation" does not include towns, cities, counties, conservancy districts,
improvement districts, or other governmental units created or organized under any general or
special law of this state.
(6) "Distribution electrical cooperative" includes an electrical corporation that:
(a) is a cooperative;
(b) conducts a business that includes the retail distribution of electricity the cooperative
purchases or generates for the cooperative's members; and
(c) is required to allocate or distribute savings in excess of additions to reserves and
surplus on the basis of patronage to the cooperative's:
(i) members; or
(ii) patrons.
(7) (a) "Electrical corporation" includes every corporation, cooperative association, and
person, their lessees, trustees, and receivers, owning, controlling, operating, or managing any
electric plant, or in any way furnishing electric power for public service or to its consumers or
members for domestic, commercial, or industrial use, within this state.
(b) "Electrical corporation" does not include:
(i) an independent energy producer;
(ii) where electricity is generated on or distributed by the producer solely for the
producer's own use, or the use of the producer's tenants, or the use of members of an
association of unit owners formed under Title 57, Chapter 8, Condominium Ownership Act,
and not for sale to the public generally;
(iii) an eligible customer who provides electricity for the eligible customer's own use or
the use of the eligible customer's tenant or affiliate; or
(iv) a nonutility energy supplier who sells or provides electricity to:
(A) an eligible customer who has transferred the eligible customer's service to the
nonutility energy supplier in accordance with Section 
54-3-32
; or
(B) the eligible customer's tenant or affiliate.
(c) "Electrical corporation" does not include an entity that sells electric vehicle battery
charging services, unless the entity conducts another activity in the state that subjects the entity
to the jurisdiction and regulation of the commission as an electrical corporation.
(8) "Electric plant" includes all real estate, fixtures, and personal property owned,
controlled, operated, or managed in connection with or to facilitate the production, generation,
transmission, delivery, or furnishing of electricity for light, heat, or power, and all conduits,
ducts, or other devices, materials, apparatus, or property for containing, holding, or carrying
conductors used or to be used for the transmission of electricity for light, heat, or power.
(9) "Eligible customer" means a person who:
(a) on December 31, 2013:
(i) was a customer of a public utility that, on December 31, 2013, had more than
200,000 retail customers in this state; and
(ii) owned an electric plant that is an electric generation plant that, on December 31,
2013, had a generation name plate capacity of greater than 150 megawatts; and
(b) produces electricity:
(i) from a qualifying power production facility for sale to a public utility in this state;
(ii) primarily for the eligible customer's own use; or
(iii) for the use of the eligible customer's tenant or affiliate.
(10) "Eligible customer's tenant or affiliate" means one or more tenants or affiliates:
(a) of an eligible customer; and
(b) who are primarily engaged in an activity:
(i) related to the eligible customer's core mining or industrial businesses; and
(ii) performed on real property that is:
(A) within a 25-mile radius of the electric plant described in Subsection (9)(a)(ii); and
(B) owned by, controlled by, or under common control with, the eligible customer.
(11) "Gas corporation" includes every corporation and person, their lessees, trustees,
and receivers, owning, controlling, operating, or managing any gas plant for public service
within this state or for the selling or furnishing of natural gas to any consumer or consumers
within the state for domestic, commercial, or industrial use, except in the situation that:
(a) gas is made or produced on, and distributed by the maker or producer through,
private property:
(i) solely for the maker's or producer's own use or the use of the maker's or producer's
tenants; and
(ii) not for sale to others;
(b) gas is compressed on private property solely for the owner's own use or the use of
the owner's employees as a motor vehicle fuel; or
(c) gas is compressed by a retailer of motor vehicle fuel on the retailer's property solely
for sale as a motor vehicle fuel.
(12) "Gas plant" includes all real estate, fixtures, and personal property owned,
controlled, operated, or managed in connection with or to facilitate the production, generation,
transmission, delivery, or furnishing of gas, natural or manufactured, for light, heat, or power.
(13) "Heat corporation" includes every corporation and person, their lessees, trustees,
and receivers, owning, controlling, operating, or managing any heating plant for public service
within this state.
(14) (a) "Heating plant" includes all real estate, fixtures, machinery, appliances, and
personal property controlled, operated, or managed in connection with or to facilitate the
production, generation, transmission, delivery, or furnishing of artificial heat.
(b) "Heating plant" does not include either small power production facilities or
cogeneration facilities.
(15) "Independent energy producer" means every electrical corporation, person,
corporation, or government entity, their lessees, trustees, or receivers, that own, operate,
control, or manage an independent power production or cogeneration facility.
(16) "Independent power production facility" means a facility that:
(a) produces electric energy solely by the use, as a primary energy source, of biomass,
waste, a renewable resource, a geothermal resource, or any combination of the preceding
sources; or
(b) is a qualifying power production facility.
(17) "Nonutility energy supplier" means a person that:
(a) has received market-based rate authority from the Federal Energy Regulatory
Commission in accordance with 16 U.S.C. Sec. 824d, 18 C.F.R. Part 35, Filing of Rate
Schedules and Tariffs, or applicable Federal Energy Regulatory Commission orders; or
(b) owns, leases, operates, or manages an electric plant that is an electric generation
plant that:
(i) has a capacity of greater than 100 megawatts; and
(ii) is hosted on the site of an eligible customer that consumes the output of the electric
plant, in whole or in part, for the eligible customer's own use or the use of the eligible
customer's tenant or affiliate.
(18) "Private telecommunications system" includes all facilities for the transmission of
signs, signals, writing, images, sounds, messages, data, or other information of any nature by
wire, radio, lightwaves, or other electromagnetic means, excluding mobile radio facilities, that
are owned, controlled, operated, or managed by a corporation or person, including their lessees,
trustees, receivers, or trustees appointed by any court, for the use of that corporation or person
and not for the shared use with or resale to any other corporation or person on a regular basis.
(19) (a) "Public utility" includes every railroad corporation, gas corporation, electrical
corporation, distribution electrical cooperative, wholesale electrical cooperative, telephone
corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation,
and independent energy producer not described in [
Subsection (19)(d),
] 
Section 
54-2-201
where the service is performed for, or the commodity delivered to, the public generally, or in
the case of a gas corporation or electrical corporation where the gas or electricity is sold or
furnished to any member or consumers within the state for domestic, commercial, or industrial
use.
(b) (i) If any railroad corporation, gas corporation, electrical corporation, telephone
corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation,
or independent energy producer not described in [
Subsection (19)(d)
] 
Section 
54-2-201
,
performs a service for or delivers a commodity to the public, it is considered to be a public
utility, subject to the jurisdiction and regulation of the commission and this title.
(ii) If a gas corporation, independent energy producer not described in [
Subsection
(19)(d)
] 
Section 
54-2-201
, or electrical corporation sells or furnishes gas or electricity to any
member or consumers within the state, for domestic, commercial, or industrial use, for which
any compensation or payment is received, it is considered to be a public utility, subject to the
jurisdiction and regulation of the commission and this title.
(c) Any corporation or person not engaged in business exclusively as a public utility as
defined in this section is governed by this title in respect only to the public utility owned,
controlled, operated, or managed by the corporation or person, and not in respect to any other
business or pursuit.
[
(d) An independent energy producer is exempt from the jurisdiction and regulations of
the commission with respect to an independent power production facility if it meets the
requirements of Subsection (19)(d)(i), (ii), (iii), or (iv), or any combination of these:
]
[
(i) the commodity or service is produced or delivered, or both, by an independent
energy producer solely for a use described in Subsections (7)(b)(ii) through (iv) or for the use
of state-owned facilities;
]
[
(ii) the commodity or service is sold by an independent energy producer solely to an
electrical corporation or other wholesale purchaser;
]
[
(iii) (A) the commodity or service produced or delivered by the independent energy
producer is delivered to an entity that controls, is controlled by, or affiliated with the
independent energy producer or to a user located on real property managed or controlled by the
independent energy producer; and
]
[
(B) the real property on which the service or commodity is used is contiguous to real
property that is owned or controlled by the independent energy producer or is separated only by
a public road or an easement for a public road; or
]
[
(iv) the independent energy producer:
]
[
(A) supplies energy for direct consumption by a customer that is:
]
[
(I) a United States governmental entity, including an entity of the United States
military, or a county, municipality, city, town, other political subdivision, local district, special
service district, state institution of higher education, school district, charter school, or any
entity within the state system of public education; or
]
[
(II) an entity qualifying as a charitable organization under 26 U.S.C. Sec. 501(c)(3)
operated for religious, charitable, or educational purposes that is exempt from federal income
tax and able to demonstrate its tax-exempt status;
]
[
(B) supplies energy to the customer through use of a customer generation system, as
defined in Section 
54-15-102
, for use on the real property where the customer generation
system is located;
]
[
(C) supplies energy using a customer generation system designed to supply the lesser
of:
]
[
(I) no more than 90% of the average annual consumption of electricity by the
customer at that site, based on an annualized billing period; or
]
[
(II) the maximum size allowable under net metering provisions, defined in Section
54-15-102
;
]
[
(D) notifies the customer before installing the customer generation system of:
]
[
(I) all costs the customer is required to pay for the customer generation system,
including any interconnection costs; and
]
[
(II) the potential for future changes in amounts paid by the customer for energy
received from the public utility and the possibility of changes to the customer fees or charges to
the customer associated with net metering and generation;
]
[
(E) enters into and performs in accordance with an interconnection agreement with a
public utility providing retail electric service where the real property on which the customer
generation system is located, with the rates, terms, and conditions of the retail service and
interconnection agreement subject to approval by the governing authority of the public utility,
as defined in Subsection 
54-15-102
(8); and
]
[
(F) installs the relevant customer generation system by December 31, 2021.
]
[
(e)
] 
(d)
 Any person or corporation defined as an electrical corporation or public utility
under this section may continue to serve its existing customers subject to any order or future
determination of the commission in reference to the right to serve those customers.
[
(f)
] 
(e)
 (i) "Public utility" does not include any person that is otherwise considered a
public utility under this Subsection (19) solely because of that person's ownership of an interest
in an electric plant, cogeneration facility, or small power production facility in this state if all of
the following conditions are met:
(A) the ownership interest in the electric plant, cogeneration facility, or small power
production facility is leased to:
(I) a public utility, and that lease has been approved by the commission;
(II) a person or government entity that is exempt from commission regulation as a
public utility; or
(III) a combination of Subsections (19)[
(f)
]
(e)
(i)(A)(I) and (II);
(B) the lessor of the ownership interest identified in Subsection (19)[
(f)
]
(e)
(i)(A) is:
(I) primarily engaged in a business other than the business of a public utility; or
(II) a person whose total equity or beneficial ownership is held directly or indirectly by
another person engaged in a business other than the business of a public utility; and
(C) the rent reserved under the lease does not include any amount based on or
determined by revenues or income of the lessee.
(ii) Any person that is exempt from classification as a public utility under Subsection
(19)[
(f)
]
(e)
(i) shall continue to be so exempt from classification following termination of the
lessee's right to possession or use of the electric plant for so long as the former lessor does not
operate the electric plant or sell electricity from the electric plant. If the former lessor operates
the electric plant or sells electricity, the former lessor shall continue to be so exempt for a
period of 90 days following termination, or for a longer period that is ordered by the
commission. This period may not exceed one year. A change in rates that would otherwise
require commission approval may not be effective during the 90-day or extended period
without commission approval.
[
(g)
] 
(f)
 "Public utility" does not include any person that provides financing for, but has
no ownership interest in an electric plant, small power production facility, or cogeneration
facility. In the event of a foreclosure in which an ownership interest in an electric plant, small
power production facility, or cogeneration facility is transferred to a third-party financer of an
electric plant, small power production facility, or cogeneration facility, then that third-party
financer is exempt from classification as a public utility for 90 days following the foreclosure,
or for a longer period that is ordered by the commission. This period may not exceed one year.
[
(h)
] 
(g)
 (i) The distribution or transportation of natural gas for use as a motor vehicle
fuel does not cause the distributor or transporter to be a "public utility," unless the commission,
after notice and a public hearing, determines by rule that it is in the public interest to regulate
the distributers or transporters, but the retail sale alone of compressed natural gas as a motor
vehicle fuel may not cause the seller to be a "public utility."
(ii) In determining whether it is in the public interest to regulate the distributors or
transporters, the commission shall consider, among other things, the impact of the regulation
on the availability and price of natural gas for use as a motor fuel.
[
(i)
] 
(h)
 "Public utility" does not include:
(i) an eligible customer who provides electricity for the eligible customer's own use or
the use of the eligible customer's tenant or affiliate; or
(ii) a nonutility energy supplier that sells or provides electricity to:
(A) an eligible customer who has transferred the eligible customer's service to the
nonutility energy supplier in accordance with Section 
54-3-32
; or
(B) the eligible customer's tenant or affiliate.
[
(j)
] 
(i)
 "Public utility" does not include an entity that sells electric vehicle battery
charging services, unless the entity conducts another activity in the state that subjects the entity
to the jurisdiction and regulation of the commission as a public utility.
(j) "Public utility" does not include an independent energy producer that is not subject
to regulation by the commission as a public utility under Section 
54-2-201
.
(20) "Purchasing utility" means any electrical corporation that is required to purchase
electricity from small power production or cogeneration facilities pursuant to the Public Utility
Regulatory Policies Act, 16 U.S.C. [
Section
] 
Sec.
 824a-3.
(21) "Qualifying power producer" means a corporation, cooperative association, or
person, or the lessee, trustee, and receiver of the corporation, cooperative association, or
person, who owns, controls, operates, or manages any qualifying power production facility or
cogeneration facility.
(22) "Qualifying power production facility" means a facility that:
(a) produces electrical energy solely by the use, as a primary energy source, of biomass,
waste, a renewable resource, a geothermal resource, or any combination of the preceding
sources;
(b) has a power production capacity that, together with any other facilities located at
the same site, is no greater than 80 megawatts; and
(c) is a qualifying small power production facility under federal law.
(23) "Railroad" includes every commercial, interurban, and other railway, other than a
street railway, and each branch or extension of a railway, by any power operated, together with
all tracks, bridges, trestles, rights-of-way, subways, tunnels, stations, depots, union depots,
yards, grounds, terminals, terminal facilities, structures, and equipment, and all other real
estate, fixtures, and personal property of every kind used in connection with a railway owned,
controlled, operated, or managed for public service in the transportation of persons or property.
(24) "Railroad corporation" includes every corporation and person, their lessees,
trustees, and receivers, owning, controlling, operating, or managing any railroad for public
service within this state.
(25) (a) "Sewerage corporation" includes every corporation and person, their lessees,
trustees, and receivers, owning, controlling, operating, or managing any sewerage system for
public service within this state.
(b) "Sewerage corporation" does not include private sewerage companies engaged in
disposing of sewage only for their stockholders, or towns, cities, counties, conservancy
districts, improvement districts, or other governmental units created or organized under any
general or special law of this state.
(26) "Telegraph corporation" includes every corporation and person, their lessees,
trustees, and receivers, owning, controlling, operating, or managing any telegraph line for
public service within this state.
(27) "Telegraph line" includes all conduits, ducts, poles, wires, cables, instruments, and
appliances, and all other real estate, fixtures, and personal property owned, controlled,
operated, or managed in connection with or to facilitate communication by telegraph, whether
that communication be had with or without the use of transmission wires.
(28) (a) "Telephone corporation" means any corporation or person, and their lessees,
trustee, receivers, or trustees appointed by any court, who owns, controls, operates, manages, or
resells a public telecommunications service as defined in Section 
54-8b-2
.
(b) "Telephone corporation" does not mean a corporation, partnership, or firm
providing:
(i) intrastate telephone service offered by a provider of cellular, personal
communication systems (PCS), or other commercial mobile radio service as defined in 47
U.S.C. Sec. 332 that has been issued a covering license by the Federal Communications
Commission;
(ii) Internet service; or
(iii) resold intrastate toll service.
(29) "Telephone line" includes all conduits, ducts, poles, wires, cables, instruments,
and appliances, and all other real estate, fixtures, and personal property owned, controlled,
operated, or managed in connection with or to facilitate communication by telephone whether
that communication is had with or without the use of transmission wires.
(30) "Transportation of persons" includes every service in connection with or
incidental to the safety, comfort, or convenience of the person transported, and the receipt,
carriage, and delivery of that person and that person's baggage.
(31) "Transportation of property" includes every service in connection with or
incidental to the transportation of property, including in particular its receipt, delivery,
elevation, transfer, switching, carriage, ventilation, refrigeration, icing, dunnage, storage, and
hauling, and the transmission of credit by express companies.
(32) "Water corporation" includes every corporation and person, their lessees, trustees,
and receivers, owning, controlling, operating, or managing any water system for public service
within this state. It does not include private irrigation companies engaged in distributing water
only to their stockholders, or towns, cities, counties, water conservancy districts, improvement
districts, or other governmental units created or organized under any general or special law of
this state.
(33) (a) "Water system" includes all reservoirs, tunnels, shafts, dams, dikes, headgates,
pipes, flumes, canals, structures, and appliances, and all other real estate, fixtures, and personal
property owned, controlled, operated, or managed in connection with or to facilitate the
diversion, development, storage, supply, distribution, sale, furnishing, carriage, appointment,
apportionment, or measurement of water for power, fire protection, irrigation, reclamation, or
manufacturing, or for municipal, domestic, or other beneficial use.
(b) "Water system" does not include private irrigation companies engaged in
distributing water only to their stockholders.
(34) "Wholesale electrical cooperative" includes every electrical corporation that is:
(a) in the business of the wholesale distribution of electricity it has purchased or
generated to its members and the public; and
(b) required to distribute or allocate savings in excess of additions to reserves and
surplus to members or patrons on the basis of patronage.
Section 2. Section 
54-2-201
 is enacted to read:
Part 2. Exemption from Commission Jurisdiction
 54-2-201.
Independent energy producer --- Exemption from commission
jurisdiction.
(1) As used in this section:
(a) "Customer generation system" means the same as that term is defined in Section
54-15-102
.
(b) "Net metering program" means the same as that term is defined in Section
54-15-102
.
(2) An independent energy producer is exempt from regulation by the commission as a
public utility for an independent power production facility if the independent energy producer
produces a commodity or delivers a service:
(a) solely for the use of a state-owned facility;
(b) not for sale to the public, without charge, solely for the use of:
(i) the independent energy producer;
(ii) an independent energy producer's tenant; or
(iii) an association of unit owners formed under Title 57, Chapter 8, Condominium
Ownership Act;
(c) for sale solely to an electrical corporation or other wholesale purchaser; or
(d) (i) for use by:
(A) an entity the independent energy producer controls, is controlled by, or is an
affiliate of; or
(B) a user located on real property that the independent energy producer manages or
controls; and
(ii) for use on real property that is contiguous to, or is separated only by a public road
or easement from, real property that the independent energy producer owns or controls.
(3) In addition to the exemptions described in Subsection (2), an independent energy
producer that supplies energy, for direct consumption by a customer, via a customer generation
system, is exempt from regulation by the commission as a public utility for an independent
power production facility if:
(a) the customer is:
(i) a United States governmental entity, including an entity of the United States
military;
(ii) a state entity, including a political subdivision of the state;
(iii) a state institution of higher education;
(iv) a school district, charter school, or an entity within the state system of public
education;
(v) a federal income tax exempt charitable organization under 26 U.S.C. Sec. 501(c)(3)
that can provide proof of the entity's tax-exempt status; or
(vi) a residential customer participating in a net metering program in an area served by
an electrical corporation with more than 200,000 retail customers in the state;
(b) the customer generation system is:
(i) for use on the real property where the customer generation system is located; and
(ii) designed to supply a maximum amount of electricity equal to the lesser of:
(A) 90% of the customer's average annual electricity consumption, based on an
annualized billing period; or
(B) the maximum amount allowed under a net metering program, as defined in Section
54-15-102
;
(c) the independent energy producer notifies the customer, before installing the
customer generation system, of:
(i) the total cost a customer is required to pay for the customer generation system,
including an interconnection cost; and
(ii) the potential for a change in:
(A) the amount the customer pays for energy from a public utility; and
(B) customer fees associated with net metering and generation;
(d) the independent energy producer enters into an interconnection agreement:
(i) with a public utility that provides retail electric service to the real property on which
the customer generation system is located; and
(ii) that is subject to approval by a public utility's governing authority; and
(e) except for a customer described in Subsection (3)(a)(vi), the independent energy
producer installs the customer generation system by December 31, 2021.
(4) An independent energy producer that supplies electric service to a customer
described in Subsection (3)(a)(vi) via a customer generation system shall provide the electric
service under an agreement that includes:
(a) the notification described in Subsection (3)(c);
(b) a description of the incentives, including any renewable energy certificate,
generated by the agreement, or by the installation or use of the customer generation system;
(c) a description of an incentive described in Subsection (4)(b) that the customer
forfeits or assigns to the independent energy producer under the agreement;
(d) the property, equipment, or liability that the independent energy producer will
insure under the agreement, and what property, equipment, or liability that the customer is
responsible for insuring; and
(e) the Internet address of a Division of Public Utilities website, if any, that describes
considerations for a net metering customer.
(5) An independent energy producer may not provide electric service to a customer
described in Subsection (3)(a)(vi) until the commission makes the first determination about a
net metering program under which the independent energy producer will provide service
required by Subsection 
54-15-105.1
(2), and the determination becomes final agency action.
(6) A public utility shall serve a customer in the public utility's service area that is
partially served by an independent energy producer.
Section 3. Section 
54-15-108
 is amended to read:
54-15-108.
Damages and fines for connecting a customer generation system to
more than one customer.
If an independent energy producer [
defined in Section 
54-2-1
] that is supplying energy
to a customer [
as described in Subsection 
54-2-1
(19)(d)(iv)
] 
described in Subsection
54-2-201
(3)(a)
 violates the [
limitations set forth in Subsection 
54-2-1
(19)(d)(iv)(B)
] 
limitation
described in Subsection 
54-2-201
(3)(b)(i)
, the commission may:
(1) award damages to an electrical corporation for actual and consequential damages to
the electrical corporation; and
(2) assess a fine against the independent energy producer or person responsible for the
violation.