HB 2500--
Session of 1997
By Committee on Appropriations

9 AN ACT enacting the electric industry restructuring act; establishing a 10 legislative oversight committee. 11 12 WHEREAS, The generation of electricity is not a natural monopoly 13 and should not be regulated as if it were a natural monopoly; and 14 WHEREAS, Regulation of the monopoly electric industry has resulted 15 in uncompetitive rates that vary considerably among electric utilities; and 16 WHEREAS, High rates and rate disparities hinder the sustained and 17 orderly economic development of the state of Kansas; and 18 WHEREAS, Restructuring the electric generation industry to facili- 19 tate retail competition will lower prices, increase customer choice and 20 improve the quality and variety of generation services available, thereby 21 promoting the public interest; and 22 WHEREAS, It is technically and administratively practical to restruc- 23 ture the electric industry in Kansas to promote retail customer choice; 24 and 25 WHEREAS, Competition in the retail market for electricity will have 26 long term benefits for the economy of Kansas, including lower prices for 27 electrical service to all consumers, more efficient use of resources, in- 28 novation in service and supply and a more diverse and decentralized elec- 29 tricity supply system; and 30 WHEREAS, A competitive market place is the most efficient way to 31 lower prices, increase value for consumers and reduce the cost of regu- 32 latory oversight; and 33 WHEREAS, The economy of Kansas is dependent upon the availa- 34 bility of reliable, low-cost energy, which is essential to the economic vi- 35 ability of the state; and 36 WHEREAS, Restructuring of electric utilities to provide greater com- 37 petition and more efficient regulation is a nationwide phenomenon, and 38 Kansas must aggressively pursue restructuring and increased customer 39 choice in order to provide electric service at lower and more competitive 40 rates; and 41 WHEREAS, It is in the public interest to permit all retail electric 42 customers to choose their supplier of electric generation services in a 43 competitive market and to continue to regulate electric transmission and HB 2500

 1  distribution in order to provide safe and reliable electricity at the lowest
 2  possible prices for all consumers, while maintaining the consumer services
 3  of customer assistance and reliability:  Now, therefore,
 4  Be it enacted by the Legislature of the State of Kansas:
 5    Section 1.  This act may be cited as the electric industry restructuring
 6  act.
 7    Sec. 2.  It is the policy of the legislature to authorize and permit com-
 8  petition in the supply of electricity to consumers in this State only in
 9  accordance with the following principles and subsequent sections of this
10  act:
11    (a)  Competition. Competitive markets are preferred to regulation.
12  Regulation should serve as a substitute only in those circumstances where
13  competition cannot provide results that serve the best interests of all
14  consumers.
15    (b)  Customer choice. To realize the full benefits of competition, all
16  customers should be able to choose among and access a wide array of
17  competing, qualified suppliers of electricity. All customers must have the
18  opportunity to benefit from competition, which should be implemented
19  in a fair and equitable manner. Customers should be made aware of their
20  new rights and the benefits and risks of customer choice.
21    (c)  Unbundling of services. Generation services should become fully
22  competitive, while the provision of transmission and distribution should
23  accomplish the triple objectives of open access, comparability of service
24  for all users and nondiscriminatory pricing, while recognizing that federal
25  and state jurisdictional uncertainties over wholesale and retail services
26  should be resolved. Companies that own both transmission and distri-
27  bution, as well as generation, should not be allowed to use any monopoly
28  position in those services as a barrier to competition in generation. The
29  determinations of corporate structure, excluding market power issues,
30  should be left to the marketplace and not dictated by the government.
31    (d)  Open access. Customer access to alternative suppliers of electric-
32  ity requires open access to the transmission grid and distribution system
33  and is critical to creating a fully competitive market structure. Owners,
34  operators and providers of transmission and distribution, facilities and
35  services, including all federal, state and local public power agencies,
36  should be required to provide access to those facilities, ancillary services
37  and other services that are not available competitively to any buyer or
38  seller on a nondiscriminatory and comparable basis.
39    (e)  Fair dealing. Competition among electric suppliers and buyers
40  must be fair, nondiscriminatory and consistent. In order to ensure a level
41  playing field, all competitors should be subject to the same legal regula-
42  tory and tax treatments. Subsidies and disparate regulation or legal
43  requirements that favor certain competitors or disadvantage others should
HB 2500

 1  be eliminated by the states. No competitor shall be allowed access to a
 2  utility's customers unless comparable and reciprocal access is provided to
 3  that competitor's customers.
 4    (f)  Reliability and safety. Reliable and safe electric service must be
 5  maintained or improved. State and federal regulators should have the
 6  necessary authority to assure the reliability and safety of the electric sys-
 7  tem.
 8    (g)  Recovery of stranded costs. Following the process established in
 9  this act, the utilities are entitled to recover prudently incurred, net, ver-
10  ifiable stranded costs and investments. The legislature should have the
11  responsibility to determine the just and reasonable recovery mechanisms
12  to determine net stranded costs and investments, including mitigation
13  incentives and should provide for a public process that applies to invest-
14  ments and costs stranded by competition. The legislature should set the
15  time frame involved for an expeditious transition and should employ
16  mechanisms that do not disadvantage one class of customer or supplier
17  over another. The amount of recovery will be determined by the state
18  corporation commission.
19    (h)  Sanctity of contract. The rights and obligations embodied in con-
20  tractual arrangements are and will be an indispensable element of an
21  effective competitive power market. Legislation should not interfere with
22  the rights of parties under contract.
23    (i)  Environmental and social policy. The energy marketplace should
24  not be used as a vehicle for accomplishing government mandated, gov-
25  ernment sponsored, consumer or tax payer subsidized, social or environ-
26  mental programs. These programs should not be incorporated in electric
27  utility rate structures but instead be unbundled from rates. The costs of
28  these social programs, such as maintenance of minimum living standards
29  or environmental programs, should be financed by legislatively enacted
30  separate charges.
31    (j)  Transmission and distribution pricing. To the extent that states
32  have jurisdiction over transmission and distribution pricing, pricing meth-
33  odologies should be encouraged to enhance reliability, compensate trans-
34  mission owners fairly, allow for widest possible markets and relieve trans-
35  mission congestion.
36    (k)  Transition to competition by date certain. Each state should es-
37  tablish a date certain to accomplish the transition to competition. A spe-
38  cific, limited time frame should be established for the transition from a
39  regulated monopoly to competition during which there should be some
40  certainty in rates, a resolution of outstanding federal and state issues, the
41  securing of appropriate regulatory approvals and establishment of an ap-
42  propriate market structure. In addition, sufficient measures to preserve
43  the integrity, safety and reliability of the state's electric system should be
HB 2500

 1  established.
 2    (l)  Obligation to connect. In a competitive retail market, local utilities
 3  should be relieved of the traditional obligation to serve the public, which
 4  should be replaced with an obligation to connect, and distribution should
 5  remain a regulated monopoly service for incumbent providers.
 6    (m)  State tax revenues. Each state electing to adopt electric compe-
 7  tition should assess the amount of state and local tax revenues derived
 8  from previously regulated electric suppliers that will enter the competi-
 9  tive market and note how revenues to each state or local government
10  entity are changed by restructuring to competition.
11    (n)  Federal barriers. The repeal of the public utility holding company
12  act (PUHCA), 15 USC 79, and the public utility regulatory policy act
13  (PURPA), 16 USC 2602, and the reform of other federal laws that impede
14  competitive electric markets must be accomplished to complement state
15  plans for the transition to customer choice. The process of restructuring
16  generation services with consumer choice has profound interstate impli-
17  cations. Assured reliability of the grid, consumer and supplier access to
18  sufficiently wide markets, a competitive playing field free of uneven sub-
19  sidies and anticompetitive advantages and resolution of existing state and
20  federal jurisdiction over transmission and distribution services are all es-
21  sential to workable competition. States must cooperate with Congress to
22  remove federal barriers which must be part of the transition to compe-
23  tition.
24    Sec. 3.  (a)  Competitive market. No later than 36 months after the
25  effective date of this act, electric generation shall be deregulated and
26  subject to the competitive market in accordance with the provisions of
27  the industry restructuring plan developed by the state corporation com-
28  mission.
29    (b)  Adoption. The state corporation commission shall adopt and pub-
30  lish a plan no later than 12 months after enactment for restructuring the
31  Kansas electric industry, consistent with the policies and procedures es-
32  tablished under this act, with the objective of having full customer choice
33  no later than 36 months after enactment. The plan shall address appro-
34  priate steps to achieve an orderly transition to a competitive market.
35    (c)  Contents of plan. The plan shall incorporate the substance of this
36  act and may include other provisions as the state corporation commission
37  deems appropriate and necessary to expedite the transition to full cus-
38  tomer choice. Such plan, during the period of transition but no later than
39  12 months after enactment, shall address transition issues, including:
40    (1)  Rate certainty;
41    (2)  outstanding federal and state issues;
42    (3)  appropriate regulatory approvals; and
43    (4)  legislative intent and public comment.
HB 2500

 1    (d)  Consumer education and information. The plan developed by the
 2  state corporation commission shall include a program for making retail
 3  customers aware of their new rights and the benefits and risks of customer
 4  choice.
 5    Sec. 4.  Not more than 18 months after the effective date of this act,
 6  each electric utility shall file a utility restructuring plan for review and
 7  comment before the state corporation commission, providing for cus-
 8  tomer choice as set forth in this act and establishing a protocol for the
 9  disaggregation of services as required by this act. Such plan shall include:
10    (1)  A schedule for the introduction of customer choice for all of the
11  customers currently served by the electric utility; and
12    (2)  the manner in which the electric utility will otherwise comply with
13  each provision of this act.
14    Sec. 5.  All retail customers shall be permitted to choose their pro-
15  viders of electric generation services no later than December 31, 2000,
16  through the following means:
17    (a)  Bilateral contract. Retail customers may negotiate a bilateral con-
18  tract with a generator of electricity, under which contract electricity shall
19  be transmitted and distributed to the retail customer, subject to the re-
20  strictions contained in this section.
21    (b)  Market aggregator. Retail customers may choose to receive gen-
22  eration and other energy services from a market aggregator. Market ag-
23  gregators may generate electricity directly, buy and sell electricity or enter
24  into financial contracts for electric generation resources. Market aggre-
25  gators may be brokers, cooperatives, buying clubs, municipalities or other
26  entities that buy or arrange for electric generation services through a
27  power pool or through direct contracts.
28    (c)  Default provider. A default provider or providers for any local
29  distribution customer who has not chosen an alternative source of gen-
30  eration shall be established by the state corporation commission. The
31  commission shall establish standards to ensure the participation of default
32  providers serving all classes of customers.
33    Sec. 6.  (a) All suppliers of electric supply and power delivery or an-
34  cillary services shall register with the state corporation commission. Reg-
35  istration shall include the following:
36    (1)  The applicant's technical ability to obtain and deliver electricity
37  and provide any other proposed services;
38    (2)  documentation of financial capability of the applicant to provide
39  the proposed services; and
40    (3)  a description of the form of ownership.
41    (b)  The state corporation commission shall not limit market entry for
42  economic reasons nor regulate generation prices.
43    Sec. 7.  (a)  General rule. The state corporation commission plan for
HB 2500

 1  restructuring of the electric utilities shall require that all existing electric
 2  utilities shall operationally and financially separate electric generation,
 3  transmission and distributions assets and operations as described in this
 4  section.
 5    (b)  Comparability of services and nondiscriminatory pricing stan-
 6  dards. (1) Both local distribution utilities and other companies which are
 7  not local distribution utilities or electric utilities may own transmission
 8  facilities.
 9    (2)  Affiliates of electric utilities and local distribution utilities may
10  own electric generation assets. Such affiliates may sell generation directly
11  to a customer, provided that generation assets and services, are opera-
12  tionally separate from transmission and distribution affiliates, if any.
13    (3)  Affiliates of electric utilities and local distribution utilities may
14  offer unbundled generation services as approved by the state corporation
15  commission. Prices for unbundled generation services shall not be estab-
16  lished by the commission but shall be determined by competitive market
17  forces.
18    (4)  The state corporation commission shall adopt a plan designed to
19  permit all providers of generation services to compete equally to supply
20  power to Kansas and to mitigate concentrations of undue market power.
21    Sec. 8.  (a) Owners, operators and providers of transmission and dis-
22  tribution facilities and ancillary services, including all federal, state and
23  local public power agencies are required to provide access to those facil-
24  ities, ancillary services and other services available to any buyer or seller
25  on a nondiscriminatory and comparable basis. The state corporation com-
26  mission shall promote nondiscriminatory open access to the electric sys-
27  tem for wholesale and retail transactions.
28    (b)  Companies providing transmission or distribution services shall
29  file at the federal energy regulatory commission or with the state corpo-
30  ration commission, as appropriate, comparable service tariffs that provide
31  open access for all competitors. The state corporation commission shall
32  monitor jurisdictional companies providing transmission or distribution
33  services and take necessary measures to ensure that no supplier has an
34  unfair advantage in offering access to and pricing such services.
35    (c)  The state corporation commission shall establish by rules and reg-
36  ulations, and consistent with federal law, standards and conditions for the
37  exchange of reciprocal rights for transmission and distribution access be-
38  tween companies located within the state and those located outside the
39  state.
40    Sec. 9.  On and after the effective date of this act, all intrastate owners
41  and operators of transmission and distribution facilities shall have com-
42  parable and reciprocal access to the transmission and distribution custom-
43  ers of other transmission and distribution facility owners and operators,
HB 2500

 1  for the purpose of providing generation services to such customers. This
 2  section shall in no way impede any transactions involving interstate com-
 3  merce.
 4    Sec. 10.  (a) The local utility shall be relieved of its traditional obli-
 5  gation to serve but shall have an obligation to connect all customers within
 6  their service territory on nondiscriminatory terms and condition.
 7    (b)  Consumers shall have the right to select their source of power
 8  supply and shall have nondiscriminatory access to interconnection with
 9  the host electric utility, which utility shall be required to transport the
10  electricity from the point of generation to the host's distribution facilities.
11    (c)  In the case of a residential customer, or a customer in any other
12  class or subclass of customers designated by the state corporation com-
13  mission, failure by such customer to make an alternative arrangement for
14  power supply and delivery shall be deemed to constitute a request to
15  connect to the distribution system of the host electric utility to arrange
16  for such supply or services.
17    Sec. 11.  The right of eminent domain shall not be used to:
18    (a)  Deny physical access or interconnection to transmission or distri-
19  bution facilities;
20    (b)  restrict the construction of new transmission or distribution fa-
21  cilities by any qualified party; or
22    (c)  otherwise limit competition.
23    Sec. 12.  (a) To the extent that states have jurisdiction over transmis-
24  sion and distribution pricing, the state corporation commission shall en-
25  courage pricing mechanisms to enhance reliability, compensate transmis-
26  sion owners fairly, allow for widest possible markets and relieve
27  transmission congestion.
28    (b)  The state corporation commission shall establish just and reason-
29  able rates for unbundled local distribution services. Rates shall be based
30  upon cost of service or performance-based incentives combined with
31  other considerations to promote efficient, safe and reliable services at the
32  lowest possible cost.
33    (c)  Each electric utility shall file unbundled service tariffs to provide
34  services to all eligible purchasers on a nondiscriminatory basis.
35    (d)  The state corporation commission shall have jurisdiction over all
36  aspects of transmission rates and services not subject to the exclusive
37  jurisdiction of the federal energy regulatory commission.
38    Sec. 13.  The subsidies for environmental, social and other mandated
39  programs shall be unbundled from electric rates. These programs shall
40  be financed by general tax revenues or legislatively-enacted separate
41  charges appearing on electric bills. The state corporation commission
42  shall prepare and submit a report to the legislature that recommends state
43  legislative action, as appropriate, to remove barriers to fair competition.
HB 2500

 1    Sec. 14.  (a) Municipal and state electric service providers and elec-
 2  tric cooperatives shall be treated as utilities for purposes of this act.
 3    (b)  All distribution service providers shall:
 4    (1)  Be subject to the jurisdiction of the state corporation commission
 5  and be regulated on the same basis, including but not limited to regulation
 6  of rates, terms and conditions; and
 7    (2)  be subject to uniform tax obligations.
 8    Sec. 15.  (a) General policy. (1) Following the process established in
 9  this act, electric utilities are entitled to recovery prudently incurred, net,
10  verifiable stranded costs and investment. The legislature shall have the
11  responsibility to determine the just and reasonable recovery mechanisms
12  to determine net stranded costs and investments, including mitigation
13  incentives. The legislature shall provide for a public process that applies
14  to investments and costs stranded by competition and shall set the time
15  frame involved for an expeditious transition. The legislature shall employ
16  mechanisms that do not disadvantage one class of customer or supplier
17  over another. The amount of recovery will be determined by the state
18  corporation commission.
19    (2)  Intent. It is the intent of the legislature to provide appropriate
20  tools and reasonable guidance to the state corporation commission in
21  order to assist in addressing claims for stranded cost recovery and fulfilling
22  its responsibility to determine rates which are equitable, appropriate, bal-
23  anced and in the public interest. In making its determinations, the com-
24  mission shall balance the interests of the consumers and utility investors
25  during the limited recovery period. Nothing in this section is intended to
26  provide any greater opportunity for stranded cost recovery than is avail-
27  able under applicable rules and regulations or statutes on the effective
28  date of this act.
29    (b)  Normal course of business. Stranded cost charges shall not be
30  recoverable for changes in usage occurring in the normal course of busi-
31  ness, including those resulting from changes in business cycles, termi-
32  nation of operations, weather, reduced production, changes in manufac-
33  turing processes, installation or expansion of new self-generation or
34  co-generation equipment, energy conservation efforts or other similar
35  factors.
36    (c)  Duties and responsibility of commission.
37    (1)  Duty to mitigate. Electric utilities shall have the duty to prudently,
38  thoroughly and aggressively mitigate stranded costs as of the effective
39  date of this act.
40    (2)  Stranded cost recovery plan.  (A) Each electric utility may file a
41  recovery plan within three months after adoption of the plan by the state
42  corporation commission. The recovery plan shall document anticipated
43  stranded costs, mitigation proposals and offsetting increases in the value
HB 2500

 1  of other assets.
 2    (B)  The recovery plan shall propose a transition charge, which shall
 3  be allocated to all customers pursuant to the most recent rate design
 4  approved by the state corporation commission subject to subsection
 5    (c)(4).
 6    (C)  The recovery plan shall permit collection of a transition charge
 7  to recover net, unmitigated stranded costs over a period of not less than
 8  three nor more than five years.
 9    (D)  The recovery plan shall establish net unmitigable stranded costs
10  and a limited recovery period designed to recover such costs expedi-
11  tiously, provided that the recovery period and the amount of qualified
12  transition costs shall yield a transition charge which shall not cause the
13  total price for electric power, including transmission and distribution serv-
14  ices, for any customer to exceed the cost per kilowatt-hour paid on the
15  effective date of this act during the recovery period.
16    (E)  Recovery mechanisms that impede competition such as entry and
17  exit fees shall not be utilized.
18    (F)  Not more than 21 months after the effective date of this act, the
19  state corporation commission shall approve and publish a recovery plan
20  for each utility submitting a plan.
21    (G)  Any stranded costs not recovered under this act and the recovery
22  plan, as modified and approved by the state corporation commission,
23  within five years shall not be recoverable by the utility.
24    (3)  Duty to cooperate. Electric utilities shall have a duty to cooperate
25  with the state corporation commission in the implementation of this act
26  as a precondition for recovery of stranded costs. Approval of a recovery
27  plan and collection of any stranded costs shall be deemed a settlement of
28  all such claims by an electric utility. No electric utility seeking to establish
29  claims for recovery of stranded costs through any other means shall be
30  eligible for recovery pursuant to a recovery plan or the collection of a
31  transition charge.
32    (4)  Commission responsibility. The state corporation commission
33  shall be responsible for the final determination of permissible stranded
34  cost recovery charges for each electric utility and for approval of the
35  recovery plan subject to the commission's determination in a rate case
36  proceeding that such charge and such plan are equitable, appropriate,
37  balanced and promote customer choice.
38    (d)  Recovery criteria and methodology. (1) Net unmitigable stranded
39  cost recovery. Electric utilities shall be allowed to recover the net un-
40  mitigable stranded costs associated with required environmental man-
41  dates currently approved for cost recovery and power acquisitions man-
42  dated by federal statutes.
43    (2)  Mitigation obligation. Electric utilities have had and continue to
HB 2500

 1  have an obligation to take all reasonable measures to prudently, thor-
 2  oughly and aggressively mitigate stranded costs. Mitigation measures may
 3  include, but shall not be limited to:
 4    (A)  Reduction of expenses;
 5    (B)  renegotiation of existing contracts;
 6    (C)  refinancing of existing debt; and
 7    (D)  sale, write-off or write-down of uneconomic or surplus assets,
 8  including regulatory assets not directly related to the provision of elec-
 9  tricity service.
10    (3)  Net basis. Stranded costs shall be determined on a net basis, be
11  verifiable (shall not include transmission and distribution assets) and be
12  reconciled to actual electricity market conditions from time to time.
13  Stranded costs shall include an offset for the market value of any assets,
14  domestic or foreign, obtained or controlled by an electric utility by pur-
15  chase acquisition, merger or other means within three years prior to the
16  effective date of this act.
17    (4)  Power purchase contracts. Power purchase contract obligations
18  shall continue for the duration of the contract. Costs arising pursuant to
19  such contracts or associated with any buy-out, buy-down or renegotiation
20  of the contracts shall be eligible for recovery in stranded cost recovery
21  charges.
22    (5)  Stranded benefits. Stranded benefits, any utility asset whose mar-
23  ket value exceeds the book value, shall be used to reduce stranded costs.
24    (6)  Stranded cost recovery. Any recovery of stranded costs shall be
25  through a nonbypassable, nondiscriminatory, appropriately structured
26  charge that is fair to all customer classes, lawful, constitutional, limited in
27  duration and consistent with the promotion of fully competitive markets.
28  Recovery mechanisms that impede competition such as entry and exit
29  fees shall not be utilized. Charges to recover stranded costs shall only
30  apply to customers within a utility's retail service territory, except for such
31  costs that have resulted from the provision of wholesale power to another
32  utility. The charges shall not apply to wheeling-through transactions nor
33  should they apply to any competitive alternative that existed prior to the
34  effective date of this act, including but not limited to self-generation and
35  sales of non-firm electricity.
36    (7)  Stranded cost recovery collection. The state corporation commis-
37  sion is authorized to allow utilities to collect a stranded cost recovery
38  charge, subject to the commission's determination in the context of a rate
39  case proceeding that such charge is equitable, appropriate, balanced, in
40  the public interest and consistent with the intent of this act. The burden
41  of proof for any stranded cost recovery claim shall be borne by the electric
42  utility making such claim.
43    Sec. 16.  (a) The state corporation commission shall adopt appropri-
HB 2500

 1  ate rules and regulations to ensure that reliable and safe electric service,
 2  with minimum residential consumer service safeguards, is maintained or
 3  improved.
 4    (b)  All electric utilities and providers of electric power delivery or
 5  ancillary services shall have in place sufficient measures to preserve the
 6  integrity, safety, reliability and quality of electric service in the state. Mar-
 7  ket entrants shall have appropriate provisions for capacity reserves, spin-
 8  ning reserves and other ancillary services, while maintaining the integrity
 9  of the bulk transmission network.
10    Sec. 17.  Nothing in this act shall interfere with the rights of parties
11  under contract.
12    Sec. 18.  No transmission or distribution utility shall be liable for any
13  damages to any current or future customer if such customer's chosen
14  generation supplier or provider of unbundled services fails to deliver such
15  service in accordance with the terms of its bilateral contract with such
16  customer. This provision shall not be applied to relieve liability arising
17  from the transmission or distribution utility's own actions or failure to act.
18    Sec. 19.  The repeal of PUHCA and PURPA and the reform of other
19  federal laws that impede competitive electric markets must be accom-
20  plished to complement state plans for the transition to customer choice.
21  The process of restructuring generation services with consumer choice
22  has profound interstate implications. Assured reliability of the grid, con-
23  sumer and supplier access to sufficiently wide markets, a competitive
24  playing field free of uneven subsidies and anti-competitive advantages,
25  and resolution of existing state/federal jurisdiction over transmission and
26  distribution services are all essential to workable competition. States must
27  cooperate with Congress to remove federal barriers that must be part of
28  the transition to competition.
29    Sec. 20.  Any existing jurisdictional uncertainties shall not delay the
30  implementation of this act.
31    Sec. 21.  (a) There is established the joint committee on electric util-
32  ity restructuring consisting of 14 members as follows:
33    (1)  Seven members of the house, three of whom shall be appointed
34  by the minority leader and the remainder appointed by the speaker of
35  the house.
36    (2)  Seven members of the senate, three of whom shall be appointed
37  by the minority leader and the remainder appointed by the president of
38  the senate.
39    (b)  Joint committee members shall be appointed within 60 days after
40  the effective date of this act to an initial term expiring on December 31,
41  1998. Subsequent terms shall be for two years expiring on January 1 of
42  even-numbered years. Members may succeed themselves.
43    (c)  A chairperson shall be selected by a majority of the joint com-
HB 2500

 1  mittee members.
 2    (d)  The joint committee on electric utility restructuring shall expire
 3  when the full transition to retail competition is completed.
 4    (e)  The joint committee shall provide an annual report on or before
 5  November 1 to the governor, the speaker of the house, the senate pres-
 6  ident and the state corporation commission on the status of electric utility
 7  restructuring.
 8    (f)  The joint committee shall meet quarterly or as often as necessary
 9  to conduct its business.
10    (g)  The joint committee shall be responsible for:
11    (1)  Working with the state corporation commission to assess the tran-
12  sition to a competitive market;
13    (2)  working with the state corporation commission and other agen-
14  cies, where necessary, to implement this act, its legislative intent and its
15  restructuring principles; and
16    (3)  working with the state corporation commission to develop any
17  new legislation where necessary to promote electric utility restructuring
18  and retail choice of electricity suppliers and to propose changes to or
19  recodification of existing statutes to be more consistent with the restruc-
20  turing principles established in this act.
21    (h)  State tax revenues. The house and senate committees on taxation,
22  working with the department of revenue, shall analyze the amount of state
23  and local tax revenues derived from previously regulated electric suppliers
24  that will enter the competitive market and report to the legislature an-
25  nually how revenues to the state or local government are changed by
26  restructuring the competition. Such committees shall place comparable
27  state and local taxation burdens upon all market participants.
28    Sec. 22.  The power of the state corporation commission to regulate
29  the terms and conditions of electricity service, including the regulation
30  of transmission and distribution service and rates, shall expire 10 years
31  after completion plans are adopted by the state. At the time of expiration,
32  the only regulatory authority remaining with the state corporation com-
33  mission shall be to ensure the safety of electricity service.
34    Sec. 23.  If any provision of this act or application thereof to any per-
35  son or circumstance is held invalid, the invalidity does not affect other
36  provisions or applications of the act which can be given effect without
37  the invalid provision or applications. To this end the provisions of this act
38  are severable.
39    Sec. 24.  This act shall take effect and be in force from and after its
40  publication in the statute book.