Session of 1999
HOUSE BILL No. 2025
By Committee on Utilities
9 AN ACT concerning the electric utility industry; relating to competition
10 in retail sales of electric generation service; enacting the electric utility
11 restructuring act; amending K.S.A. 66-128e, 66-128f, 66-128g, 75-4319
12 and 79-1439 and K.S.A. 1998 Supp. 45-221 and 66-128 and repealing
13 the existing sections; also repealing K.S.A. 66-1,159 through 66-1,165,
14 66-1,168, 66-1,169a and 66-1,169c and K.S.A. 1998 Supp. 66-1,158
15 and 66-1,169b.
17 Be it enacted by the Legislature of the State of Kansas:
18 New Section 1. (a) Sections 1 through 27 may be cited as the electric
19 utility restructuring act.
20 (b) This act establishes a framework for the transition to competition
21 in retail sales of generation service.
22 New Sec. 2. As used in the electric utility restructuring act:
23 (a) "Affiliated with" refers to:
24 (1) Ownership of a controlling interest in another entity by a munic-
25 ipal electric utility or electric cooperative; or
26 (2) with respect to any other utility, ownership of an interest by or in
27 another entity described in K.S.A. 66-1401 and amendments thereto as
28 an affiliated interest.
29 (b) "Aggregate" means combine the loads of retail customers for the
30 purpose of purchasing generation service.
31 (c) "Aggregator" means any entity that, as an intermediary, purchases
32 and may or may not take title to generation service for sale to retail
33 customers whose loads are aggregated.
34 (d) "Assignee" means any corporation, public authority, trust or other
35 entity to which:
36 (1) A utility or a utility's successor assigns, sells or transfers other than
37 as security all or a portion of the utility's or successor's interest in or right
38 to intangible transition property; or
39 (2) a direct assignee of a utility or a utility's successor may assign, sell
40 or transfer other than as security the utility's or successor's interest in or
41 right to intangible transition property.
42 (e) "Broker" or "marketer" means any entity that acts as an agent or
43 intermediary in the sale and purchase of generation service to retail cus-
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1 tomers and may or may not take title to the generation service.
2 (f) "Certified territory" means the service territory certified to a util-
3 ity pursuant to K.S.A. 66-1,170 et seq. and amendments thereto.
4 (g) "Commission" means the state corporation commission.
5 (h) (1) "Competitive electricity provider" means a marketer, broker,
6 aggregator or other entity selling generation service to consumers at retail.
7 (2) "Competitive electricity provider" does not include any exempt
9 (i) "Competitive transition charge" means a charge established under
10 section 9.
11 (j) (1) "Competitive transition costs" means:
12 (A) The amount by which the costs of all generation assets deemed
13 prudent by the commission or by another governmental entity operating
14 or regulating a utility and included in the utility's rate base on July 1,
15 1999, exceed the amount recoverable for all such assets in a competitive
17 (B) the amount by which the value of all generation contracts and
18 other generation-related legal obligations deemed prudent by the com-
19 mission or by another governmental entity operating or regulating a utility
20 and included in a utility's rates on July 1, 1999, exceeds the amount re-
21 coverable for all such contracts and obligations in a competitive
23 (C) nuclear decommissioning costs;
24 (D) low level radioactive waste disposal costs;
25 (E) high level radioactive waste disposal costs; and
26 (F) generation-related regulatory assets.
27 (2) "Competitive transition costs" does not include contingency debt.
28 (k) "Contingency debt" means long term debt without scheduled
30 (l) "Cost of service" means the costs reasonably incurred by a distri-
31 bution utility in order to provide distribution services, including a rea-
32 sonable rate of return.
33 (m) "Distribution services" means services provided from the point
34 where electricity enters the distribution system to the point at which the
35 electricity is delivered to consumers.
36 (n) "Distribution utility" means any utility engaged in the furnishing
37 of distribution services to consumers under a service certificate issued by
38 the commission or any municipal electric distribution system.
39 (o) "Electric cooperative" means any cooperative, as defined by
40 K.S.A. 17-4603 and amendments thereto, or any nonstock member-
41 owned cooperative corporation incorporated in this state.
42 (p) "Exempt utility" means any municipal electric utility owned or
43 operated by a municipality that has not elected under subsection (b)(1)
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1 of section 5 to participate fully in competition in retail sales of generation
2 service or any electric cooperative that has elected under section 6 not to
3 participate in competition in retail sales of generation service.
4 (q) "Financing party" means a holder of transition bonds, including
5 trustees, collateral agents and other entities acting for the benefit of such
7 (r) "Generation assets" means all real property, fixtures and personal
8 property owned, controlled, operated or managed in connection with, or
9 to facilitate, generation of electricity.
10 (s) "Generation service" means electricity or capacity to generate
11 electricity but does not include transmission or distribution services.
12 (t) "High level radioactive waste disposal costs" means costs of dis-
13 posal of high level radioactive waste, as defined by K.S.A. 48-1603 and
14 amendments thereto, from a nuclear generating facility, which costs are
15 incurred before July 1, 2002, and are approved by the commission or
16 another governmental entity operating or regulating a utility.
17 (u) "Intangible transition property" means the property right in any
18 order of the commission, and in all revenues from competitive transition
19 charges, declared by section 12 to be irrevocable. Intangible transition
20 property shall exist only to the extent provided in an order authorizing
21 issuance of transition bonds under section 11.
22 (v) "Low level radioactive waste disposal costs" means costs of dis-
23 posal of low level radioactive waste, as defined by K.S.A. 48-1603, and
24 amendments thereto, from a nuclear generating facility, which costs are
25 incurred before July 1, 2002, and are approved by the commission or by
26 another governmental entity operating or regulating a utility.
27 (w) "Nuclear decommissioning costs" means costs that the federal
28 nuclear regulatory commission considers to be nuclear decommissioning
29 costs and that are approved by the commission.
30 (x) "Public utility" means a public utility, as defined by K.S.A. 66-104
31 and amendments thereto, the rates of which are regulated by the
33 (y) "Recoverable competitive transition costs" means competitive
34 transition costs that a utility is allowed to recover under section 7.
35 (z) "Regulatory asset" means an asset that is created when a utility
36 must capitalize all or part of a cost, incurred before July 1, 2002, that
37 would normally be charged to expense in an enterprise that is not rate
38 regulated and that is presumed to have a stream of future revenue at least
39 equal in value to the capitalized cost of the asset. "Regulatory asset"
40 includes but is not limited to renegotiated fuel supply contracts, deferred
41 income taxes, post-retirement benefits, expenses related to refinancing
42 debt, commission-approved recovery of impaired generation assets, com-
43 mission-approved phase-in plans for generation assets and nonnuclear
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1 decommissioning costs.
2 (aa) "Regulatory liability" means a liability created pursuant to an
3 order of the commission or pursuant to the application of generally ac-
4 cepted accounting principles.
5 (bb) "Statewide average cost of service" means the average cost of
6 service of all distribution utilities in the state.
7 (cc) "Transmission services" means services provided from the point
8 where electricity is generated to the point at which the electricity enters
9 the distribution system.
10 (dd) "Transmission utility" means any utility engaged in the furnish-
11 ing of transmission services.
12 (ee) "Universal service charge" means the charge established under
13 section 10.
14 (ff) "Universal service costs" means:
15 (1) Costs of assuring continued provision of generation service to cus-
16 tomers during implementation of the cold weather rule (issued by the
17 commission in its order in docket number 158,796-U) in areas served by
18 competitive electricity providers; and
19 (2) costs that are associated with provision of distribution services in
20 low population density, high cost areas served by competitive electricity
21 providers and that negatively impact the affordability of or accessibility
22 to distribution services in those areas.
23 (gg) "Utility" means any electric public utility, municipal electric util-
24 ity or electric cooperative.
25 New Sec. 3. Except as otherwise provided by this act, on and after
26 July 1, 2002:
27 (a) All consumers of electricity in areas of the state served by com-
28 petitive electricity providers shall have the right to purchase generation
29 service directly from the competitive electricity provider of the con-
30 sumer's choice. That choice shall be exercised by the consumer's positive
31 verifiable declaration. If a consumer makes no such declaration, the con-
32 sumer shall continue to be served by the consumer's existing utility or its
34 (b) Sale of generation service by competitive electricity providers
35 shall not be subject to rate regulation by the commission.
36 New Sec. 4. On and after July 1, 2002:
37 (a) Certified territories of distribution utilities shall be retained and
38 distribution utilities that are subject to the jurisdiction of the commission
39 shall continue to be regulated by the commission as provided by law.
40 (b) Generation service purchased at retail shall be delivered to the
41 consumer only through a distribution utility having the certified territory
42 where the service is delivered and through transmission utilities holding
43 certificates of convenience issued by the commission and serving the ter-
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1 ritory where the service is delivered. There shall be no bypass of distri-
2 bution or transmission facilities by distribution or transmission utilities.
3 (c) Transmission and distribution utilities shall be required to provide
4 open access to their transmission or distribution services on a nondiscrim-
5 inatory basis, as provided by section 15.
6 New Sec. 5. (a) (1) Competition in retail sales of generation service
7 shall continue in any territory annexed by a municipality that has not
8 elected under subsection (b)(1) or (2) to participate in such competition
9 if such competition exists in the annexed territory at the time of annex-
10 ation. In such case the municipal electric utility shall not be subject to
11 the provisions of this act other than the provisions of section 17 and
12 section 10 as it pertains to annexed customers and shall not sell generation
13 service at retail to consumers outside the utility's certified territory.
14 (2) In the case of annexation described in subsection (a)(1), the mu-
15 nicipal electric utility shall be required to provide all competitive elec-
16 tricity providers open access to the utility's transmission and distribution
17 services in the annexed territory on a nondiscriminatory basis at fair and
18 reasonable rates. Any competitive electricity provider denied such access
19 shall have a cause of action in the district court of the county where the
20 municipality is located or, if the municipality is located in more than one
21 county, the county where the greatest portion of the population of the
22 municipality resides. If the court finds that the municipal electric utility
23 denied the competitive electricity provider access to the utility's distri-
24 bution services in the annexed territory on a nondiscriminatory basis at
25 fair and reasonable rates, the court may enjoin the utility from further
26 denial of such access and may order the utility to pay the competitive
27 electricity provider any damages arising from the denial.
28 (3) The commission shall adopt informal procedures for hearing and
29 resolution of any party's complaint, other than complaints concerning
30 rates, arising from retail sales of generation service within annexed ter-
31 ritory described in subsection (a)(1).
32 (b) Except as provided by subsection (a), a municipal electric utility
33 shall not participate in competition in retail sales of generation service
34 and the provisions of this act shall not apply to such utility unless:
35 (1) The governing body of the municipality owning or operating the
36 utility or the voters residing in the certified territory of the utility elect
37 as provided in subsection (c) for the utility to participate fully in com-
38 petition in retail sales of generation service. If the governing body or
39 voters elect full participation, the municipal electric utility shall be subject
40 to all provisions of this act in the same manner as any other nonexempt
41 utility and may sell generation service at retail to any consumer, regardless
42 of the consumer's location.
43 (2) (A) The governing body of the municipality owning or operating
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1 the utility or the voters residing in the certified territory of the utility elect
2 as provided in subsection (c) for the utility to participate in competition
3 in retail sales of generation service only within the utility's certified ter-
4 ritory. If the governing body or voters elect such participation, the mu-
5 nicipal electric utility shall not be subject to the provisions of this act
6 other than the provisions of sections 7, 9, 10 and 17.
7 (B) A municipal electric utility owned or operated by a municipality
8 that elects to participate in competition in retail sales of generation under
9 subsection (b)(2)(A) shall be required to provide all competitive electricity
10 providers open access to the utility's transmission and distribution services
11 on a nondiscriminatory basis at fair and reasonable rates. Any competitive
12 electricity provider denied such access shall have a cause of action in the
13 district court of the county where the municipality is located or, if the
14 municipality is located in more than one county, the county where the
15 greatest portion of the population of the municipality resides. If the court
16 finds that the municipal electric utility denied the competitive electricity
17 provider open access to the utility's distribution services on a nondiscrim-
18 inatory basis at fair and reasonable rates, the court may enjoin the utility
19 from further denial of such access and may order the utility to pay the
20 competitive electricity provider any damages arising from the denial.
21 (C) The commission shall adopt informal procedures for hearing and
22 resolution of any party's complaint, other than complaints concerning
23 rates, arising from retail sales of generation service within the certified
24 territory of a municipal electric utility owned or operated by a munici-
25 pality that has elected to participate in competition in retail sales of gen-
26 eration service as provided by this subsection (b)(2).
27 (c) (1) The governing body of a municipality owning or operating a
28 municipal electric utility may submit, by ordinance, to the qualified voters
29 residing in the utility's certified territory a proposition for the utility to
30 participate in competition in retail sales of generation service. If a majority
31 of the voters voting on the proposition vote in favor of the proposition,
32 the municipal electric utility shall commence participation in competition
33 in retail sales of generation service not later than one year after the final
34 canvass of the election results.
35 (2) Upon a petition filed in accordance with subsection (d), the gov-
36 erning body of a municipality owning or operating a municipal electric
37 utility shall submit to the qualified voters residing in the utility's certified
38 territory a proposition for the utility to participate in competition in retail
39 sales of generation service. If a majority of the voters voting on the prop-
40 osition vote in favor of the proposition, the municipal electric utility shall
41 commence participation in competition in retail sales of generation serv-
42 ice not later than one year after the final canvass of the election results.
43 (3) The governing body of a municipality owning or operating a mu-
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1 nicipal electric utility may elect, by ordinance, to participate in compe-
2 tition in retail sales of generation service, subject to a protest petition
3 filed in accordance with subsection (d) within 30 days after the adoption
4 of the ordinance. If such petition is so filed, there shall be submitted to
5 the qualified voters residing in the utility's certified territory a proposition
6 for the utility to participate in competition in retail sales of generation
7 service. If a valid protest petition is not submitted or if, upon submission
8 of a valid protest petition and an election, a majority of the voters voting
9 on the proposition vote in favor of the proposition, the municipal electric
10 utility shall commence participation in competition in retail sales of gen-
11 eration service not later than one year after the adoption of the ordinance
12 or the final canvass of the election results.
13 (d) (1) A petition provided for by this section shall be filed with the
14 county election officer and shall be signed by qualified voters residing in
15 the service utility's certified territory equal in number to not less than
16 10% of such voters who voted for the office of secretary of state at the
17 last preceding general election of that office.
18 (2) If the petition requests an election to participate fully in compe-
19 tition in retail sales of generation service as provided by subsection (b)(1),
20 the following shall appear on the petition: "We request an election to
21 determine whether the municipal electric utility of the city of ________
22 shall be allowed to sell generation service to customers outside the utility's
23 current territory and shall allow its current customers to choose their
24 provider of generation services."
25 (3) If the petition requests an election to participate in competition
26 in retail sales of generation service only within the utility's certified ter-
27 ritory as provided by subsection (b)(2), the following shall appear on the
28 petition: "We request an election to determine whether the municipal
29 electric utility of the city of ________ shall allow its customers to choose
30 their provider of generation services."
31 (e) (1) When a proposition is submitted pursuant to this section to
32 participate fully in competition in retail sales of generation service as
33 provided by subsection (b)(1), the county election officer shall cause the
34 following proposition to be placed on the ballot in the utility's certified
35 territory at an election called and held in the manner provided by K.S.A.
36 10-120 and amendments thereto: "Shall the municipal electric utility of
37 the city of ________ be allowed to sell generation service to customers
38 outside the utility's current territory and allow its current customers to
39 choose their provider of generation services?"
40 (2) When a proposition is submitted pursuant to this section to par-
41 ticipate in competition in retail sales of generation service only within the
42 utility's certified territory as provided by subsection (b)(2), the county
43 election officer shall cause the following proposition to be placed on the
HB 2025 8
1 ballot in the utility's certified territory at an election called and held in
2 the manner provided by K.S.A. 10-120 and amendments thereto: "Shall
3 the municipal electric utility of the city of ________ allow its customers
4 to choose their provider of generation services?"
5 (f) An election provided for by this section shall be conducted, and
6 the votes counted and canvassed, in the manner provided by law for
7 question submitted elections of the county.
8 (g) The governing body of a municipality is authorized to spend pub-
9 lic moneys of the municipality to inform voters in an unbiased manner
10 about probable impacts of participation in retail competition.
11 (h) (1) If a municipality owning or operating a municipal electric util-
12 ity has elected to participate in competition in retail sales of generation
13 service as provided by subsection (b)(1) or (b)(2), the municipality shall
14 not subsequently elect to discontinue participation in competition in retail
15 sales of generation service.
16 (2) If a municipality owning or operating a municipal electric utility
17 has elected to participate in competition in retail sales of generation serv-
18 ice only within the utility's certified territory as provided by subsection
19 (b)(2), the municipality may subsequently elect to participate fully in com-
20 petition in retail sales of generation service as provided by subsection
22 (i) If a municipality owning or operating a municipal electric utility
23 does not elect to participate fully in competition in retail sales of gener-
24 ation service as provided by subsection (b)(1):
25 (1) The utility shall not sell generation service at retail to consumers
26 outside the utility's certified territory; and
27 (2) except as provided by subsections (a) and (b)(2), no competitive
28 electricity provider shall sell generation service at retail to consumers
29 within the utility's certified territory.
30 New Sec. 6. (a) Before July 1, 2002, an electric cooperative may elect
31 not to participate in competition in retail sales of generation service. To
32 elect not to participate, the cooperative shall call a special election. The
33 election may be called by the board of trustees or shall be called within
34 180 days after receipt of a valid petition signed by not less than 10% of
35 the members of the cooperative. The proposition appearing on the ballot
36 at the election shall be: "Shall (name of the cooperative) allow members
37 to choose their provider of generation services?" Written notice of the
38 election shall be delivered to the members not less than 21 nor more than
39 45 days before the date of the election. Voting on the proposition shall
40 be by mail ballot. If a majority of the members voting on the proposition
41 vote against the proposition, the electric cooperative shall not participate
42 in competition in retail sales of generation service and no competitive
43 electricity provider shall sell generation service at retail to consumers
HB 2025 9
1 within the cooperative's certified territory.
2 (b) If an electric cooperative has elected not to participate in com-
3 petition in retail sales of generation service, the cooperative may subse-
4 quently elect to participate. To elect to participate, the cooperative shall
5 call a special election in the same manner as provided by subsection (a).
6 If a majority of the members voting on the proposition at such election
7 vote in favor of the proposition, the electric cooperative shall participate
8 in competition in retail sales of generation service.
9 (c) Any person wishing to disseminate to members of an electric co-
10 operative any information relating to a proposition to be submitted at an
11 election under this section may submit the information to the electric
12 cooperative. The electric cooperative shall mail the information to the
13 members of the cooperative as soon as practicable. All expenses incidental
14 to mailing the information shall be paid by the person submitting the
15 information to the electric cooperative.
16 (d) Once an electric cooperative participates in competition in retail
17 sales of generation service, the cooperative shall not subsequently elect
18 to discontinue participation.
19 (e) If an electric cooperative has elected not to participate in com-
20 petition in retail sales of generation service, the cooperative shall not sell
21 generation service at retail to consumers outside the cooperative's certi-
22 fied territory unless the cooperative subsequently elects to participate in
23 competition in retail sales of generation service.
24 New Sec. 7. (a) A utility or utility's successor may apply to the com-
25 mission for a determination of the utility's recoverable competitive tran-
26 sition costs. The commission, after notice and evidentiary hearings in
27 accordance with the provisions of the Kansas administrative procedure
28 act, shall determine the amount of the utility's recoverable competitive
29 transition costs. Such costs shall be computed on a net basis and shall be
30 verifiable and nonmitigable. If two or more utilities or their successors
31 are affiliated, the commission shall treat all such utilities and successors
32 as a single utility in determining recoverable competitive transition costs.
33 (b) The commission shall allow a utility or utility's successor to re-
34 cover all amounts of the following determined by the commission: Nu-
35 clear decommissioning costs, low level radioactive waste disposal costs,
36 high level radioactive waste disposal costs and generation-related regu-
37 latory assets as offset by regulatory liabilities that can be credited back to
38 consumers. For all amounts of other competitive transition costs deter-
39 mined by the commission, the commission shall determine the amount
40 that a utility or utility's successor shall be allowed to recover, based on
41 traditionally used considerations deemed relevant by the commission, in-
42 cluding but not limited to:
43 (1) The extent to which the utility was legally required to incur the
HB 2025 10
2 (2) the effectiveness of the efforts of the utility and any successor to
3 increase and realize the market value of the assets and to decrease the
4 costs of the contracts and other legal obligations;
5 (3) the extent to which rates previously established by the commission
6 have compensated shareholders for the risk of not recovering the costs;
7 (4) the effects of the difference between the market value and the
8 cost, including but not limited to tax considerations, for the assets, con-
9 tracts and other legal obligations;
10 (5) if the utility had the discretion to determine whether to incur the
11 costs and if the utility or any successor had the discretion to determine
12 whether to mitigate the costs;
13 (6) the extent to which: (A) The costs have been deemed by a regu-
14 latory authority of proper jurisdiction to have been just and reasonable,
15 either specifically by order or by inclusion in rates; and (B) the costs will
16 not be recoverable in a competitive marketplace;
17 (7) the efforts of the federal government in restructuring or settling
18 the debt of electric cooperatives in Kansas as the federal government has
19 done in other states; and
20 (8) the extent to which the utility's restructuring efforts promote and
21 provide for competition in sales of generation service.
22 (c) The commission, upon its own motion when evidence of need is
23 apparent, or upon application by a utility or a utility's successor, may
24 review and determine the remaining, if any, recoverable competitive tran-
25 sition costs. Such review shall reconcile differences between actual and
26 expected competitive prices and actual and expected sales levels for elec-
27 tricity. Any overrecovery or underrecovery shall be incorporated into a
28 revised competitive transition charge to be applied prospectively. The
29 revised competitive transition charge also shall assure continued timely
30 payment of interest and principal on transition bonds issued in accordance
31 with section 11.
32 (d) The time limit for recovery of nuclear decommissioning costs, low
33 level radioactive waste disposal costs and high level radioactive waste dis-
34 posal costs shall end when decommissioning of the nuclear generating
35 facility is complete. The commission shall establish reasonable time limits
36 for recovery of each other type of competitive transition cost, but no such
37 limit shall extend more than 12 years after July 1, 2002, except that the
38 time limit for recovery of any bonded indebtedness incurred for financing
39 generation assets and included in recoverable competitive transition costs
40 of a municipal electric utility shall be the remaining life of such
42 (e) Except as provided by subsection (b)(2) of section 5, the provi-
43 sions of this section shall not apply to any exempt utility.
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1 New Sec. 8. (a) Each utility, other than an exempt utility, and any
2 successor, shall have the duty to mitigate competitive transition costs.
3 (b) The commission shall allow for mitigation of competitive transi-
4 tion costs in electric public utility rate cases or in special, single-issue
6 New Sec. 9. (a) Recoverable competitive transition costs shall be re-
7 covered through a unit charge per kilowatt hour of electricity delivered
8 to consumers or, in the case of consumers that begin to generate elec-
9 tricity for their own use on or after January 1, 1999, per kilowatt hour of
10 electricity used, based on the consumer's history of usage as determined
11 by the commission. The unit charge shall be assessed equally to all cus-
12 tomers, including consumers that begin to generate electricity for their
13 own use on or after January 1, 1999. The amount of the competitive
14 transition charge shall be determined by the commission for each utility
15 or utility's successor, based on the amount necessary to recover the re-
16 coverable competitive transition costs in the period established for re-
17 covery. Except for costs that have resulted from provision of wholesale
18 electricity to another utility:
19 (1) The charge for competitive transition costs of a utility other than
20 an electric cooperative shall apply only to retail customers within the
21 certified territory of the utility or the utility's predecessor, as the territory
22 existed before July 1, 2002; and
23 (2) the charge for competitive transition costs of an electric cooper-
24 ative shall apply only to retail customers within the certified territories or
25 portions thereof, as they existed before July 1, 2002, that are covered by
26 a generation and transmission electric cooperative's all power require-
27 ments contract.
28 (b) The competitive transition charge shall include amounts sufficient
29 to provide for the payment of principal of, interest on, acquisition or
30 redemption premium of and any other expenses related to issuing, serv-
31 icing and retiring transition bonds issued pursuant to authorization by the
32 commission under section 11.
33 (c) The commission shall establish procedures and mechanisms for
34 collection and distribution of the competitive transition charge.
35 (d) If two or more utilities or their successors are affiliated, the com-
36 mission shall treat all such utilities and successors as a single utility in
37 determining the competitive transition charge to be imposed under this
38 section and the customers to which the charge will apply, except that any
39 recoverable competitive transition costs attributable to an affiliate's share
40 of ownership of generation assets shall be recovered by a separate com-
41 petitive transition charge applying to only customers within the certified
42 territory of such affiliate, as such territory existed before July 1, 2002.
43 New Sec. 10. (a) The commission, after notice and evidentiary hear-
HB 2025 12
1 ings in accordance with the provisions of the Kansas administrative pro-
2 cedure act, shall determine the amount necessary to recover universal
3 service costs in areas served by competitive electricity providers, subject
4 to the provisions of subsection (c).
5 (b) On and after July 1, 2002, universal service costs shall be recov-
6 ered through fees for licensure and renewal of licensure to engage in
7 business as a competitive electricity provider pursuant to section 19 and
8 through a unit charge per kilowatt hour of electricity delivered to con-
9 sumers in this state in areas served by competitive electricity providers.
10 The amount of the universal service charge shall be determined by the
11 commission. The commission shall establish procedures and mechanisms
12 for collection and distribution of the charge, subject to the provisions of
13 subsection (c).
14 (c) (1) In determining costs that are associated with provision of dis-
15 tribution services in low population density, high cost areas served by
16 competitive electricity providers and that negatively impact the afforda-
17 bility of or accessibility to distribution services in those areas, the com-
18 mission shall base its determination on:
19 (A) The statewide average cost of service for classes of customers
20 established by the commission based on one or more of the following
21 criteria, which shall not include the physical location of a customer in the
22 state: Annual kilowatt-hour usage, peak kilowatt usage, character of serv-
23 ice, load factor, revenue, plant investment, customer type or seasonal
25 (B) the cost of service for such classes of customers for each distri-
26 bution utility other than an exempt utility; and
27 (C) standards, established by commission rules and regulations, that
28 the commission deems necessary to provide a basic level of distribution
29 services to low population density, high cost areas, including but not lim-
30 ited to line extensions, customer service obligations and utility service
32 (2) The commission shall establish the initial statewide average cost
33 of service for classes of customers on or before January 1, 2001.
34 (3) (A) Subject to the provisions of subsection (c)(2)(B), a distribu-
35 tion utility shall be eligible to receive moneys from the universal service
36 fund to pay costs that are associated with provision of the basic level of
37 distribution services in low population density, high cost areas served by
38 competitive electricity providers and that negatively impact the afforda-
39 bility of or accessibility to distribution services in those areas to the extent
40 that the cost of service for a class of customer of the utility exceeds by
41 25% or more the statewide average cost of service for that class of
43 (B) No exempt utility, other than a municipal utility owned or oper-
HB 2025 13
1 ated by a municipality that has elected to participate in retail sales of
2 generation service under subsection (b)(2) of section 5, shall be eligible
3 to receive moneys pursuant to subsection (c)(2)(A).
4 (d) At least every two years the commission shall audit and reconcile
5 the costs of and need for the universal service charge.
6 (e) (1) On or before July 1, 2002, the commission shall establish the
7 universal electric service fund. The commission shall utilize a competitive
8 bidding process to select a neutral, competent and bonded third party to
9 administer the fund. The administrator shall be responsible for:
10 (A) Collecting and auditing all relevant information from all persons
11 or other entities receiving moneys from or providing moneys to the fund;
12 (B) verifying the amount of the universal service charge necessary to
13 generate the moneys required by the fund;
14 (C) collecting all moneys due to the fund; and
15 (D) distributing amounts on a monthly basis due to persons or other
16 entities receiving moneys from the fund.
17 (2) Any information made available or received by the administrator
18 from persons or other entities receiving moneys from or providing mon-
19 eys to the fund shall not be subject to any provisions of the Kansas open
20 records act and shall be considered confidential and proprietary.
21 (3) The administrator shall be authorized to maintain an action to
22 collect any moneys owed to the fund by any person or other entity in the
23 district court in the county of the registered office of such person or entity
24 or, if such person or entity does not have a registered office in the state,
25 such an action may be maintained in the county where such person's or
26 entity's principal office is located. If such person or entity has no principal
27 office in the state, such an action may be maintained in the district court
28 of any county in which such person or entity provides service.
29 (4) The administrator shall be responsible for ensuring that moneys
30 credited to the fund do not fall below the level necessary to pay all
31 amounts payable from the fund. The administrator shall have the au-
32 thority to retain and invest in a prudent and reasonable manner any excess
33 moneys collected in any period to help ensure that adequate moneys are
34 available to pay all amounts payable in other periods.
35 New Sec. 11. (a) A utility or utility's successor may apply to the com-
36 mission for authorization to issue transition bonds to recover a portion of
37 the utility's recoverable competitive transition costs. The commission, af-
38 ter notice and opportunity for hearing in accordance with the provisions
39 of the Kansas administrative procedure act, shall determine whether to
40 issue an order authorizing issuance of such bonds. The commission may
41 authorize the issuance of such bonds in an amount not exceeding 50% of
42 the utility's recoverable competitive transition costs, as determined at the
43 time of the commission's authorization of issuance of the bonds. The
HB 2025 14
1 order shall include the amount of recoverable competitive transition costs
2 authorized to be recovered through the bond issuance. If the commission
3 authorizes the issuance of transition bonds, the utility or utility's successor
4 shall retain sole discretion whether to assign, sell or otherwise transfer
5 intangible transition property or to cause transition bonds to be issued,
6 including the right to defer or postpone issuance.
7 (b) The principal of and interest on transition bonds shall be paid
8 from amounts received from competitive transition charges established
9 for recovery of recoverable competitive transition costs pursuant to sec-
10 tion 9. Any order authorizing the issuance of transition bonds shall require
11 that the proceeds from the issuance of transition bonds, and any proceeds
12 from the assignment, sale or transfer or other financing of intangible
13 transition property, shall be used to reduce the utility's recoverable com-
14 petitive transition costs and to reduce the related capitalization, in ac-
15 cordance with the terms of the order.
16 (c) The effect of any subsequent refinancing of transition bonds upon
17 the rates authorized in a qualified rate order shall be as provided in the
18 commission's order authorizing issuance of the bonds.
19 (d) In an order authorizing the issuance of transition bonds, the com-
20 mission shall afford flexibility in establishing the terms and conditions of
21 the bonds, including repayment schedules, interest rates and other fi-
22 nancing costs. The utility or utility's successor shall file the final terms of
23 issuance with the commission.
24 (e) Notwithstanding any other provision of law to the contrary and
25 on such conditions as the commission may approve, all or portions of the
26 interest of a utility or utility's successor in intangible transition property
27 may be assigned, sold or transferred to an assignee and may be pledged
28 or assigned as security by a utility, utility's successor or assignee to or for
29 the benefit of a financing party. To the extent that an interest is assigned,
30 sold or transferred or is pledged or assigned as security, the commission
31 shall authorize the utility or utility's successor to contract with the as-
32 signee or financing party that the utility or successor will continue to
33 operate the utility's or successor's system to provide service to the utility's
34 or successor's customers and will account for and remit the applicable
35 competitive transition charge to or for the account of the assignee or
36 financing party.
37 (f) Any right that a utility or utility's successor has in intangible tran-
38 sition property prior to the property's sale or transfer or any other right
39 created under this section or by commission order and assignable under
40 this section or assignable pursuant to order of the commission shall be
41 only a contract right.
42 (g) (1) Neither intangible transition property nor any right, title or
43 interest of a utility, utility's successor or assignee in intangible transition
HB 2025 15
1 property shall be deemed proceeds of any right or interest other than in
2 the order and the intangible transition property arising from the order.
3 (2) The granting, perfection and enforcement of security interests in
4 intangible transition property to secure transition bonds authorized pur-
5 suant to this section is governed by this section rather than by the uniform
6 commercial code.
7 (3) A valid and enforceable security interest in intangible transition
8 property shall attach and be perfected only by means of a separate filing
9 with the commission, under rules and regulations adopted by the com-
10 mission. For this purpose:
11 (A) The lien of the transition bonds authorized pursuant to this sec-
12 tion shall attach automatically to the intangible transition property from
13 the time of issuance of the bonds.
14 (B) The lien under (A) shall be deemed a valid and enforceable se-
15 curity interest in the intangible transition property securing the bonds
16 and shall be continuously perfected if, before the date of issuance spec-
17 ified in (A) or within 10 days after that date, a filing has been made by
18 or on behalf of the financing party to protect that security interest in
19 accordance with the procedures prescribed by the commission under this
20 subsection. Any filing in respect to such bonds shall take precedence over
21 any other filing.
22 (C) The lien under (A) is enforceable against the assignee and all third
23 parties, including judicial lien creditors, subject only to the rights of any
24 third parties holding security interests in the intangible transition prop-
25 erty previously perfected in the manner described in this subsection if
26 value has been given by the purchasers of the transition bonds. A per-
27 fected lien in intangible transition property is a continuously perfected
28 security interest in all revenues and proceeds arising with respect to the
29 associated intangible transition property, whether or not revenues have
30 accrued. Intangible transition property constitutes property for the pur-
31 poses of contracts securing transition bonds, whether or not the related
32 revenues have accrued. The lien created under this subsection is per-
33 fected and ranks prior to any other lien, including any judicial lien, which
34 subsequently attaches to the intangible transition property; to the com-
35 petitive transition charges; and to the commission's order and any rights
36 created by the order or any proceeds of the order. The relative priority
37 of a lien created under this subsection is not defeated or adversely af-
38 fected by changes to the commission's order or to the competitive tran-
39 sition charges payable by any customer.
40 (D) The relative priority of a lien created under this subsection is not
41 defeated or adversely affected by the commingling of revenues arising
42 with respect to intangible transition property with funds of the utility or
43 utility's successor or other funds of the assignee.
HB 2025 16
1 (E) If an event of default occurs under authorized transition bonds,
2 the holders of the bonds or the holders' authorized representatives, as
3 secured parties, may foreclose or otherwise enforce the lien in the intan-
4 gible transition property securing the bonds, subject to the rights of any
5 third parties holding prior security interests in the intangible transition
6 property perfected in the manner provided in this subsection. Upon ap-
7 plication by the holders or their representatives, without limiting their
8 other remedies, the commission shall order the sequestration and pay-
9 ment to the holders or their representatives of revenues arising with re-
10 spect to the intangible transition property pledged to the holders. An
11 order under this subsection shall remain in full force and effect notwith-
12 standing any bankruptcy, reorganization, or other insolvency proceedings
13 with respect to the utility, utility's successor or assignee.
14 (4) The commission shall establish and maintain a separate system of
15 records to reflect the date and time of receipt of all filings under this
16 subsection and may provide that transfers of intangible transition property
17 to an assignee be filed in accordance with the same system.
18 (h) A transfer of intangible transition property by a utility or utility's
19 successor to an assignee which the parties have in the governing docu-
20 mentation expressly stated to be a sale or other absolute transfer, in a
21 transaction approved in a qualified rate order, shall be treated as an ab-
22 solute transfer of all of the transferor's right, title and interest, as in a true
23 sale, and not as a pledge or other financing, of the intangible transition
24 property, other than for federal and state income and franchise tax pur-
25 poses. Granting to holders of transition bonds a preferred right to the
26 intangible transition property or the provision by the utility or utility's
27 successor of any credit enhancement with respect to transition bonds shall
28 not impair or negate the characterization of any transfer as a true sale,
29 other than for federal and state income and franchise tax purposes. A
30 transfer of intangible transition property shall be deemed perfected as
31 against third persons, including any judicial lien creditors, when all of the
32 following have taken place:
33 (1) The commission has issued the qualified rate order creating in-
34 tangible transition property.
35 (2) A sale or transfer of the intangible transition property in writing
36 has been executed and delivered to the assignee.
37 (i) (1) Nothing in this act shall authorize an action against a retail
38 customer for nonpayment of any competitive transition charge except by
39 the utility, the utility's successor or any other entity that sells generation
40 service at retail to customers within the utility's certified territory as the
41 territory existed before July 1, 2002.
42 (2) The commission has exclusive jurisdiction over any dispute arising
43 out of the obligations to impose and collect competitive transition charges.
HB 2025 17
1 (j) The Kansas development finance authority may issue transition
2 bonds. The activities of the commission in administering and performing
3 the powers, duties and functions prescribed by the provisions of this act
4 from the proceeds of such bonds are hereby approved for the purposes
5 of subsection (b) of K.S.A. 74-8905 and amendments thereto and the
6 authorization of the issuance of such bonds by the Kansas development
7 finance authority in accordance with that statute. The provisions of sub-
8 section (a)(1) of K.S.A. 74-8905 and amendments thereto shall not pro-
9 hibit the issuance of such bonds when so authorized and any such issuance
10 of bonds is exempt from the provisions of subsection (a)(1) of K.S.A. 74-
11 8905 and amendments thereto.
12 (k) Transition bonds authorized pursuant to this act shall be special
13 obligations in accordance with their terms and shall not constitute an
14 indebtedness of the state of Kansas or the commission, nor shall they
15 constitute indebtedness within the meaning of any constitutional or stat-
16 utory provision limiting the incurring of indebtedness.
17 New Sec. 12. (a) Notwithstanding any other provision of law to the
18 contrary, the final order of the commission authorizing the issuance of
19 transition bonds and any competitive transition charge established for
20 recovery of the competitive transition costs to be recovered from issuance
21 of the bonds shall be irrevocable.
22 (b) If transition bonds have been issued pursuant to this act, neither
23 the commission, nor any successor commission or agency exercising func-
24 tions similar to the commission, shall:
25 (1) Revalue or revise the competitive transition costs to be recovered
26 from issuance of the bonds;
27 (2) reduce, postpone, impair, terminate or determine unjust or un-
28 reasonable any competitive transition charge established for recovery of
29 the competitive transition costs to be recovered from issuance of the
30 bonds; or
31 (3) directly or indirectly take into account, when setting other rates
32 for the utility, any competitive transition charge established for recovery
33 of the competitive transition costs to be recovered from issuance of the
35 (c) The state pledges and agrees with the bondholders that the state
36 may not limit or alter any competitive transition charge established for
37 the competitive transition costs to be recovered from the issuance of
38 transition bonds authorized under this act, any order authorizing issuance
39 of such bonds or any right under the bonds until the bonds, together with
40 the interest on the bonds, are fully met and discharged.
41 (d) Notwithstanding any other provision of law to the contrary and
42 on such conditions as the commission may approve, all or portions of the
43 interest of a utility or utility's successor in intangible transition property
HB 2025 18
1 may be assigned, sold or transferred to an assignee and may be pledged
2 or assigned as security by a utility, utility's successor or assignee to or for
3 the benefit of a financing party. To the extent that an interest is assigned,
4 sold or transferred or is pledged or assigned as security, the commission
5 shall authorize the utility or utility's successor to contract with the as-
6 signee or financing party that the utility or successor will continue to
7 operate the utility's or successor's system to provide service to the utility's
8 or successor's customers and will account for and remit the applicable
9 competitive transition charge to or for the account of the assignee or
10 financing party.
11 New Sec. 13. (a) Before January 1, 2000, the commission shall adopt
12 rules and regulations requiring that, on and after January 1, 2001, utilities'
13 retail electric bills to consumers shall disclose such components as the
14 commission determines adequately informs consumers. Separate com-
15 ponents shall include but not be limited to:
16 (1) Generation service charges;
17 (2) distribution service charges;
18 (3) transmission service charges;
19 (4) competitive transition charges;
20 (5) universal service charges; and
21 (6) transactional taxes relating to the sale or furnishing of electricity.
22 (b) On and after January 1, 2001, municipal electric utilities' bills to
23 retail customers shall disclose all budgeted transfers to the city general
24 fund. Nothing in this subsection shall be construed to grant the commis-
25 sion jurisdiction over exempt utilities.
26 (c) Before January 1, 2001, the commission shall adopt rules and reg-
27 ulations establishing procedures:
28 (1) To ensure that generation service of a customer of a competitive
29 electricity provider is not switched to another competitive electricity pro-
30 vider without reliable confirmation of the customer's intent to make the
31 change; and
32 (2) for handling of complaints of unauthorized switching of a cus-
33 tomer's generation service from one competitive electricity provider to
35 (d) Before January 1, 2001, the commission shall adopt rules and
36 regulations establishing procedures and standards for a competitive elec-
37 tricity provider to discontinue a customer's generation service for the
38 customer's nonpayment and to reconnect the customer's service.
39 (e) The commission shall have the duty to ensure that the quality of
40 generation and distribution service and quality of service to customers of
41 such services does not decrease on or after July 1, 2002.
42 (f) Before July 1, 2002, the commission shall adopt rules and regu-
43 lations specifying a minimum percentage of electricity sold by a compet-
HB 2025 19
1 itive electricity provider that must be generated from renewable re-
2 sources (including but not limited to wind, solar, hydropower, biomass
3 and landfill gas sources) in order for the provider to represent that elec-
4 tricity sold by the provider is produced in a manner that is less detrimental
5 to the environment than electricity sold by other competitive electricity
7 (g) Before July 1, 2002, the commission shall adopt rules and regu-
8 lations establishing minimum, enforceable, uniform standards for the
9 form and content of disclosure and labeling that the commission deter-
10 mines will enable retail electric customers easily to compare the price,
11 price variability, contract terms and conditions, resource mix and envi-
12 ronmental characteristics of retail electricity purchases. At a minimum
13 such standards shall require that all competitive electricity providers pro-
14 vide the following to prospective retail customers:
15 (1) The duration of the agreement with the provider;
16 (2) the prices for all components of generation service and any other
17 fees that the provider may charge or levy separately at any time during
18 the term of the agreement;
19 (3) clear specification of the degree of variability of each charge over
20 time, including whether the price for each component is fixed, any min-
21 imum or maximum level for any price that is not fixed and any index,
22 formula or objective measure by which prices that are not fixed will be
23 ascertained; and
24 (4) the effective price in cents per kilowatt hour for all generation
25 service sold under the agreement for various levels of consumption.
26 New Sec. 14. (a) On and after July 1, 2002, each distribution utility
27 other than an exempt utility, upon request by a customer, shall enter into
28 a contract with such customer, whereby the customer may attach or con-
29 nect to the utility's delivery and metering system an apparatus or device
30 for the purpose of feeding excess electricity which is generated by such
31 customer's energy producing system into the utility's system. No such
32 apparatus or device shall cause damage to the distribution utility's system
33 or equipment or present an undue hazard to utility personnel. Such con-
34 tract shall include, but need not be limited to, provisions relating to fair
35 and equitable compensation on such customer's monthly bill for energy
36 supplied to the utility by such customer, and each of the following terms
37 and conditions:
38 (1) The utility, on the customer's monthly bill, will compensate the
39 customer for electricity supplied by the customer. Compensation shall be
40 at the market price for electricity being purchased by the utility at that
42 (2) The utility will supply, own and maintain all necessary meters and
43 associated equipment utilized for billing. In addition, for the purposes of
HB 2025 20
1 monitoring customer generation and load, the utility, at its expense, may
2 install load research metering. The customer, at no expense to the utility,
3 shall supply a suitable location for meters and associated equipment used
4 for billing and load research.
5 (3) For the purpose of insuring the safety and quality of electricity
6 distributed by the utility's facilities, the utility shall have the right to re-
7 quire the customer, at certain times and as electrical operating conditions
8 warrant, to limit the production of electrical energy from the generating
9 facility to an amount no greater than the load at the customer's facility of
10 which the generating facility is a part.
11 (4) The customer shall furnish, install, operate and maintain in good
12 order and repair and without cost to the utility, any relays, locks and seals,
13 breakers, automatic synchronizers and other control and protective ap-
14 paratus designated by the utility as required as suitable for the operation
15 of the generator in parallel with electricity distributed by the utility's
17 (5) The utility may install, own and maintain a disconnecting device
18 located near the electric meter or meters.
19 (6) Interconnection facilities between the customer's and the utility's
20 equipment shall be accessible at all reasonable times to utility personnel.
21 (7) The customer may be required to reimburse the utility for any
22 equipment or facilities required as a result of the installation by the cus-
23 tomer of generation in parallel with electricity distributed by the utility's
25 (8) The customer shall notify the utility prior to the initial energizing
26 and start-up testing of the customer-owned generator and the utility shall
27 have the right to have a representative present at such test.
28 (9) The utility may require a special agreement for conditions related
29 to technical and safety aspects of generation in parallel with electricity
30 distributed by the utility's facilities.
31 (b) If a customer and a distribution utility cannot agree to terms and
32 conditions of a contract provided for by this section, the commission shall
33 establish the terms and conditions for such contract.
34 (c) Service under any contract provided for by this section shall be
35 subject to the utility's rules and regulations on file with the commission.
36 (d) The provisions of this section shall require a distribution utility to
37 accept and purchase only electricity generated by a system that was in
38 operation before January 1, 1999, and shall require such utility to accept
39 and purchase such electricity only while a competitive transition charge
40 is being collected to recover recoverable competitive transition costs of
41 the utility or its predecessor.
42 New Sec. 15. (a) The commission shall adopt rules and regulations
43 requiring that, on and after July 1, 2002, a transmission or distribution
HB 2025 21
1 utility, other than an exempt utility, shall provide the utility's transmission
2 or distribution services to all generation service customers in the utility's
3 certified territory, to all municipal electric utilities and electric coopera-
4 tives that are not exempt utilities and to all competitive electricity pro-
5 viders, whether affiliated with the utility or not, at rates and on terms of
6 access and conditions comparable to the transmission or distribution util-
7 ity's own use of its system.
8 (b) (1) The commission shall adopt rules and regulations, effective
9 on and after July 1, 2002, establishing standards of conduct for transmis-
10 sion and distribution utilities that are competitive electricity providers or
11 that are affiliated with a competitive electricity provider, for the purpose
12 of ensuring that:
13 (A) The competitive electricity provider, with respect to the provision
14 of the generation service, maintains an arm's length relationship with the
16 (B) The business or organizational relationship, or both, between the
17 utility and the competitive electricity provider shall not interfere with the
18 development of effective competition in retail sales of generation service.
19 (2) Such standards shall include, but not be limited to, a requirement
21 (A) The utility shall not give, through a tariff provision or otherwise,
22 the utility's affiliated competitive electricity provider or customers of the
23 utility's affiliated competitive electricity provider preference over nonaf-
24 filiated competitive electricity providers or customers of nonaffiliated
25 competitive electricity providers in matters relating to distribution or
26 transmission services.
27 (B) All regulated distribution and transmission services offered by the
28 utility, including any discount, rebate or fee waiver, must be available to
29 all similarly situated customers and competitive electricity providers si-
30 multaneously and on the same basis, to the extent technically possible,
31 and without undue or unreasonable discrimination.
32 (C) The utility shall not sell or otherwise provide distribution or trans-
33 mission services to the utility's affiliated competitive electricity provider
34 without either posting the offering electronically on a well-known source
35 or otherwise making a sufficient offering to the market for those services.
36 (D) The utility shall process all similar requests for a distribution or
37 transmission service in the same manner and within the same period of
39 (E) The utility shall not condition or tie the provision of any distri-
40 bution or transmission service or rate agreement by the utility to the
41 provision of any service in which an affiliated competitive electricity pro-
42 vider is involved.
43 (F) The utility shall process all similar requests for information in the
HB 2025 22
1 same manner and within the same period of time. The utility shall not
2 provide information to an affiliated competitive electricity provider with-
3 out a request when information is made available to nonaffiliated com-
4 petitive electricity providers only upon request. The utility shall not allow
5 an affiliated competitive electricity provider preferential access to any
6 nonpublic information regarding the distribution or transmission system
7 or customers taking service from the utility that is not made available to
8 nonaffiliated competitive electricity providers upon request, and the util-
9 ity shall instruct all of its employees not to provide affiliated competitive
10 electricity providers or nonaffiliated competitive electricity providers any
11 preferential access to nonpublic information.
12 (G) Except with the customer's consent, employees of the utility shall
13 not share with any affiliated competitive electricity provider or any non-
14 affiliated competitive electricity provider: (i) Any market information ac-
15 quired from the affiliated competitive electricity provider or from any
16 nonaffiliated competitive electricity provider; or (ii) any market infor-
17 mation developed by the utility in the course of responding to requests
18 for distribution or transmission service.
19 (H) The utility and competitive electricity provider affiliated with the
20 utility shall keep separate books of accounts and records, which are sub-
21 ject to review by the commission.
22 New Sec. 16. (a) On or before February 1, 2001, each utility shall
23 file with the commission a plan for restructuring such utility to implement
24 the provisions of this act. Hearings on utilities' restructuring plans shall
25 be set on agreement of the parties but shall be set without agreement not
26 later than June 1, 2001. Not later than December 31, 2001, and after
27 notice and hearing in accordance with the Kansas administrative proce-
28 dure act, the commission shall issue orders determining recoverable tran-
29 sition costs and such other matters as appropriate to implement compe-
30 tition in retail sales of generation service.
31 (b) The commission shall have jurisdiction over a utility's affiliates
32 and access to all accounts and records of such affiliates to investigate or
33 receive complaints regarding anticompetitive practices, marketing abuses,
34 cost allocation rules, cross-subsidies, discriminatory practices, undue pref-
35 erences, rates, tariffs, charges and the rendition of efficient and sufficient
37 New Sec. 17. (a) A distribution utility shall act as an emergency sup-
38 plier of generation service to any noninterruptable customer in the util-
39 ity's certified territory if the customer's competitive electricity provider
40 fails to supply generation service for reasons other than the customer's
42 (b) A competitive electricity provider that fails to provide generation
43 service to the provider's customer for reasons other than the customer's
HB 2025 23
1 nonpayment shall reimburse the distribution utility acting as an emer-
2 gency supplier at a multiple of the actual cost for that generation service.
3 The commission shall determine and authorize the multiple used.
4 (c) If a competitive electricity provider fails to reimburse a distribu-
5 tion utility as required by subsection (b), the customer shall be respon-
6 sible for reimbursing the utility for the cost of the generation service
7 provided by the utility plus a reasonable rate of return.
8 (d) Except as provided by subsections (a) and (b)(2) of section 5, the
9 provisions of this section shall not apply to any exempt utility.
10 New Sec. 18. (a) In areas of the state served by competitive electric-
11 ity providers, customers of all classes shall be entitled to aggregate their
12 electrical loads on a voluntary basis if each customer agrees to do so by
13 a positive written declaration. Aggregation may be accomplished by pri-
14 vate entities, by political or taxing subdivisions or on any other basis made
15 available by market opportunities.
16 (b) If a political or taxing subdivision seeks to serve as an aggregator
17 on behalf of retail customers, the political or taxing subdivision shall offer
18 the opportunity to purchase generation service to all retail customers
19 within the subdivision's jurisdiction. However, if a political or taxing sub-
20 division serves as an aggregator, the subdivision shall not require consum-
21 ers within the subdivision's jurisdiction to purchase generation service
22 from the subdivision.
23 New Sec. 19. (a) On and after July 1, 2002, no competitive electricity
24 provider shall engage in business as such within this state without having
25 first obtained a license from the commission.
26 (b) The commission shall adopt rules and regulations establishing
27 procedures and conditions that a competitive electricity provider shall be
28 required to comply with to obtain a license to engage in business as a
29 competitive electricity provider. Such procedures and conditions shall
30 include requirements relating to:
31 (1) Reliability of service, including but not limited to a requirement
32 that the applicant file with the commission evidence satisfactory to the
33 commission that the applicant has the ability to enter into binding inter-
34 connection arrangements for transmission and distribution services;
35 (2) financial and operational fitness, including but not limited to: (A)
36 A requirement that the applicant file with the commission evidence sat-
37 isfactory to the commission that the applicant has financial capacity suf-
38 ficient to refund deposits to retail customers in the case of bankruptcy,
39 nonperformance or any other reason; and (B) a requirement that, when
40 the commission determines necessary, the applicant shall file a bond with
41 the commission as evidence of financial ability to withstand market dis-
42 turbances or other events that may increase the cost of providing service
43 or to provide for uninterrupted service to the applicant's customers;
HB 2025 24
1 (3) billing practices and customer service, including but not limited
2 to a requirement of disclosure of customer complaints filed against the
3 applicant with a regulatory agency other than the commission during the
4 12 months before the filing of the application;
5 (4) disclosure of pending legal actions against the applicant; and
6 (5) disclosure of the names and business addresses of all affiliates of
7 the applicant.
8 (c) In addition to complying with any requirements adopted pursuant
9 to subsection (b), a competitive electricity provider, in order to qualify
10 for a license, shall:
11 (1) Establish an office in this state;
12 (2) receive all payments from customers and distribution utilities in
13 this state at such office;
14 (3) submit evidence satisfactory to the commission that the provider
15 complies with the provisions of subsection (d); and
16 (4) make an appointment, in writing, of the secretary of state, or the
17 secretary's successor in office, to be the competitive electricity provider's
18 agent for service of process in any action or proceeding arising out of the
19 competitive electricity provider's engaging in business as such in this state.
20 Such appointment, in writing, shall be evidence of the competitive elec-
21 tricity provider's agreement that any such process that is served on the
22 secretary of state shall be of the same legal force and validity as if served
23 upon the competitive electricity provider personally within the state.
24 (d) (1) If a competitive electricity provider or an affiliate of a pro-
25 vider had a certified territory in this state before July 1, 2002, the provider
26 shall not be eligible for a license unless there is competition in generation
27 service in such territory.
28 (2) If a competitive electricity provider or an affiliate of the provider
29 did not have a certified territory in this state before July 1, 2002, the
30 provider shall not be eligible for a license unless all electricity delivered
31 to the provider's retail customers in this state is generated in states that
32 have provided for competition in retail sales of generation service.
33 (e) If, after reviewing the license application of a competitive elec-
34 tricity provider, the commission finds that the applicant is qualified to be
35 a competitive electricity provider, the commission shall issue a license to
36 the applicant.
37 (f) After notice and an opportunity for hearing in accordance with
38 the Kansas administrative procedure act, the commission may deny an
39 application for a license to engage in business as a competitive electricity
40 provider or may limit, suspend or revoke a license if the action is necessary
41 to protect the interests of the public or to enforce the provisions of this
42 act or a rule and regulation of the commission.
43 (g) In determining whether an applicant is qualified for a license to
HB 2025 25
1 engage in business as a competitive electricity provider or whether to
2 deny an application for a license or to limit, suspend or revoke a license,
3 the commission may consider whether the applicant for or holder of the
4 license, or any affiliate thereof, has engaged in any activities that are
5 inconsistent with provision of reliable service to customers or with effec-
6 tive competition in retail sales of generation service.
7 (h) A license to engage in business as a competitive electricity pro-
8 vider shall be valid for a term of five years and shall be renewable under
9 the same terms and conditions as an original license.
10 (i) The commission shall adopt rules and regulations establishing fees
11 and procedures for application, renewal and issuance of licenses. Appli-
12 cation fees shall be in an amount determined by the commission to be
13 necessary to pay the costs of processing applications and issuing licenses.
14 License and renewal fees shall be in amounts determined by the com-
15 mission to be necessary to administer and enforce the provisions of this
16 act, pay for administration of the universal service fund and contribute to
17 payment of universal service costs.
18 (j) Rules and regulations adopted pursuant to this section:
19 (1) Shall not be unduly burdensome;
20 (2) shall not unnecessarily delay or inhibit the initiation and devel-
21 opment of competition in retail sales of generation service; and
22 (3) may establish, when appropriate to carry out the provisions of this
23 act, different requirements for licensing competitive electricity providers
24 of: (A) Different services; or (B) similar services to different classes of
26 (k) The provisions of this section shall not apply to:
27 (1) An electric cooperative engaging in business as a competitive elec-
28 tricity provider solely within the cooperative's certified territory;
29 (2) a municipal utility engaging in business as a competitive electricity
30 provider solely within the utility's certified territory; or
31 (3) any other political or taxing subdivision engaging in business as a
32 competitive electricity provider solely within the boundaries of the
34 New Sec. 20. (a) The commission may adopt such rules and regu-
35 lations as the commission deems necessary to administer and enforce the
36 provisions of the electric utility restructuring act.
37 (b) For the purpose of administering and enforcing the provisions of
38 the electric utility restructuring act, the commission shall have the same
39 powers and duties with respect to distribution utilities, whether or not
40 rate regulated, as the commission has to administer and enforce the pro-
41 visions of chapter 66 of the Kansas Statutes Annotated with respect to
42 distribution utilities that are rate regulated by the commission.
43 (c) After notice and an opportunity for hearing, the commission may
HB 2025 26
1 impose an administrative fine in an amount not exceeding $5,000 per day
2 for each occurrence of a violation of section 13, 15 or 19 or any rule and
3 regulation of the commission adopted thereunder. Such fine shall be in
4 addition to any other penalty provided by law.
5 New Sec. 21. The state, the commission and Kansas utilities shall
6 work with the federal government, other states in the region and inter-
7 state power pools to establish independent system operators or their func-
8 tional equivalents to operate the transmission system and interstate power
10 New Sec. 22. On and after July 1, 1999, nothing shall preclude the
11 commission from approving, proposing or endorsing performance-based
12 or incentive rate mechanisms and rate caps as part of the commission's
13 rate making process for electric public utilities for the purpose of bene-
14 fiting both customers and utilities, allowing more expeditious setting of
15 rates with consideration of factors other than cost of service and allowing
16 the greatest possible mitigation of competitive transition costs.
17 New Sec. 23. The department of health and environment shall be
18 the lead agency to coordinate state and local governments' review of en-
19 vironmental impact statements filed for siting of electric generation
21 New Sec. 24. (a) There is hereby created the electric utility dereg-
22 ulation oversight committee. The committee shall consist of the following
24 (1) The chairpersons, vice-chairpersons and ranking minority mem-
25 bers of the house and senate standing committees on utilities, or a mem-
26 ber of the respective committee designed by such chairperson, vice-chair-
27 person or ranking minority member; and
28 (2) the chairpersons and ranking minority members of the house
29 standing committee on appropriations and the senate standing committee
30 on ways and means, or a member of the respective committee designed
31 by such chairperson or ranking minority member.
32 (b) The legislative coordinating council shall designate one member
33 of the oversight committee to serve as chairperson of the committee and
34 one member of the committee from the opposite house to serve as vice-
35 chairperson. The chairperson and vice-chairperson shall serve for terms
36 of two years.
37 (c) The oversight committee shall meet on call of the chairperson.
38 Members of the oversight committee shall receive compensation and
39 travel expenses and subsistence expenses or allowances as provided in
40 K.S.A. 75-3212 and amendments thereto, when attending meetings of
41 the committee.
42 (d) The provisions of the acts contained in article 12 of chapter 46 of
43 the Kansas Statutes Annotated, and amendments thereto, applicable to
HB 2025 27
1 special committees shall apply to the oversight committee to the extent
2 that such provisions do not conflict with the specific provisions of this
4 (e) The oversight committee shall:
5 (1) Monitor and review implementation of the provisions of this act;
6 (2) recommend to the house and senate standing committees on util-
7 ities, the house standing committee on appropriations and the senate
8 standing committee on ways and means any legislation that the oversight
9 committee determines advisable to further the purposes of this act;
10 (3) recommend to the commission any rules and regulations or other
11 measures that the oversight committee determines advisable to further
12 the purposes of this act;
13 (4) review and make recommendation regarding commission staff
14 and funding as the committee determines necessary to administer the
15 provisions of this act;
16 (5) monitor federal legislation and administrative actions that have an
17 impact on the implementation of this act;
18 (6) monitor and report to the house and senate standing committees
19 on utilities, the house standing committee on appropriations and the sen-
20 ate standing committee on ways and means regarding whether the com-
21 mission treats fairly all affected parties while implementing the legislative
22 intent of this act that all retail customers will benefit from restructuring
23 of the electric utility industry without unduly onerous regulatory require-
24 ments; and
25 (7) perform such other responsibilities as the committee determines
26 will promote fair competition in the provision of generation service.
27 (f) On or before the first day of each legislative session, the oversight
28 committee shall submit to the house and senate standing committees on
29 utilities, the house standing committee on appropriations and the senate
30 standing committee on ways and means a report of the committee's find-
31 ings and recommendations.
32 (g) The electric deregulation oversight committee is hereby abolished
33 on July 1, 2007.
34 New Sec. 25. The commission, in conjunction with the citizens' util-
35 ity ratepayer board, shall organize a consumer education advisory board
36 to investigate and recommend methods of educating the public about the
37 implementation of competition in retail sales of generation service and
38 its impact on consumers. The advisory board shall address and make rec-
39 ommendations on the level of funding necessary for adequate educational
40 efforts, the aspects of retail access on which consumers need education,
41 the most effective means of educating consumers, the appropriate entities
42 to undertake the educational effort and any other relevant matters. The
43 commission shall consider the board's recommendations and submit them
HB 2025 28
1 to the legislature on or before the first day of the 2000 regular legislative
3 New Sec. 26. (a) There is hereby established the joint committee on
4 taxation of electric public utilities. The joint committee shall consist of
5 13 members, as follows: The chairpersons, vice-chairpersons and ranking
6 minority members of the house and senate standing committees on tax-
7 ation and assessment and taxation, the house and senate standing com-
8 mittees on utilities and the chairperson of the retail wheeling task force.
9 (b) Within 30 days after the effective date of this act, the joint com-
10 mittee shall organize and elect a chairperson and vice chairperson. The
11 joint committee may meet at any time and at any place within the state
12 on call of the chairperson. Members of the joint committee shall receive
13 compensation, travel expenses and subsistence expenses or allowances as
14 provided in K.S.A. 75-3212, and amendments thereto, when attending
15 meetings of such committee. Amounts paid under authority of this section
16 shall be paid from appropriations for legislative expense and vouchers
17 therefor shall be prepared by the director of legislative administrative
18 services and approved by the chairperson or vice-chairperson of the leg-
19 islative coordinating council.
20 (c) The staff of the office of the revisor of statutes, the legislative
21 research department and the division of legislative administrative services
22 shall provide such assistance as may be requested by the joint committee
23 and authorized by the legislative coordinating council. The legislative di-
24 vision of post audit shall provide such assistance as may be requested by
25 the committee and authorized by the legislative post audit committee.
26 The department of revenue, the commission and all other state agencies
27 shall provide assistance to the joint committee as may be requested by
28 the committee.
29 (d) The joint committee shall study, investigate and analyze the ram-
30 ifications to the taxing systems of the state and its political subdivisions
31 arising from the deregulation of electric generation public utilities and
32 the relative tax impacts upon and among electric generation public util-
33 ities. The joint committee shall submit to the legislature on or before
34 January 11, 2000, a final report of the committee's findings and recom-
35 mendations. The committee may introduce such legislation as it deems
36 necessary in the performance of its function.
37 (e) The joint committee is hereby abolished on and after January 11,
39 New Sec. 27. If any provision of this act or its application to any
40 person or circumstances is held invalid, the invalidity shall not affect other
41 provisions or applications of this act that can be given effect without the
42 invalid provision or application. To this end the provisions of this act are
HB 2025 29
1 Sec. 28. K.S.A. 1998 Supp. 45-221 is hereby amended to read as
2 follows: 45-221. (a) Except to the extent disclosure is otherwise required
3 by law, a public agency shall not be required to disclose:
4 (1) Records the disclosure of which is specifically prohibited or re-
5 stricted by federal law, state statute or rule of the Kansas supreme court
6 or the disclosure of which is prohibited or restricted pursuant to specific
7 authorization of federal law, state statute or rule of the Kansas supreme
8 court to restrict or prohibit disclosure.
9 (2) Records which are privileged under the rules of evidence, unless
10 the holder of the privilege consents to the disclosure.
11 (3) Medical, psychiatric, psychological or alcoholism or drug depend-
12 ency treatment records which pertain to identifiable patients.
13 (4) Personnel records, performance ratings or individually identifia-
14 ble records pertaining to employees or applicants for employment, except
15 that this exemption shall not apply to the names, positions, salaries and
16 lengths of service of officers and employees of public agencies once they
17 are employed as such.
18 (5) Information which would reveal the identity of any undercover
19 agent or any informant reporting a specific violation of law.
20 (6) Letters of reference or recommendation pertaining to the char-
21 acter or qualifications of an identifiable individual.
22 (7) Library, archive and museum materials contributed by private
23 persons, to the extent of any limitations imposed as conditions of the
25 (8) Information which would reveal the identity of an individual who
26 lawfully makes a donation to a public agency, if anonymity of the donor
27 is a condition of the donation.
28 (9) Testing and examination materials, before the test or examination
29 is given or if it is to be given again, or records of individual test or ex-
30 amination scores, other than records which show only passage or failure
31 and not specific scores.
32 (10) Criminal investigation records, except that the district court, in
33 an action brought pursuant to K.S.A. 45-222, and amendments thereto,
34 may order disclosure of such records, subject to such conditions as the
35 court may impose, if the court finds that disclosure:
36 (A) Is in the public interest;
37 (B) would not interfere with any prospective law enforcement action;
38 (C) would not reveal the identity of any confidential source or un-
39 dercover agent;
40 (D) would not reveal confidential investigative techniques or proce-
41 dures not known to the general public;
42 (E) would not endanger the life or physical safety of any person; and
43 (F) would not reveal the name, address, phone number or any other
HB 2025 30
1 information which specifically and individually identifies the victim of any
2 sexual offense in article 35 of chapter 21 of the Kansas Statutes Anno-
3 tated, and amendments thereto.
4 (11) Records of agencies involved in administrative adjudication or
5 civil litigation, compiled in the process of detecting or investigating vio-
6 lations of civil law or administrative rules and regulations, if disclosure
7 would interfere with a prospective administrative adjudication or civil
8 litigation or reveal the identity of a confidential source or undercover
10 (12) Records of emergency or security information or procedures of
11 a public agency, or plans, drawings, specifications or related information
12 for any building or facility which is used for purposes requiring security
13 measures in or around the building or facility or which is used for the
14 generation or transmission of power, water, fuels or communications, if
15 disclosure would jeopardize security of the public agency, building or
17 (13) The contents of appraisals or engineering or feasibility estimates
18 or evaluations made by or for a public agency relative to the acquisition
19 of property, prior to the award of formal contracts therefor.
20 (14) Correspondence between a public agency and a private individ-
21 ual, other than correspondence which is intended to give notice of an
22 action, policy or determination relating to any regulatory, supervisory or
23 enforcement responsibility of the public agency or which is widely dis-
24 tributed to the public by a public agency and is not specifically in response
25 to communications from such a private individual.
26 (15) Records pertaining to employer-employee negotiations, if dis-
27 closure would reveal information discussed in a lawful executive session
28 under K.S.A. 75-4319, and amendments thereto.
29 (16) Software programs for electronic data processing and documen-
30 tation thereof, but each public agency shall maintain a register, open to
31 the public, that describes:
32 (A) The information which the agency maintains on computer facil-
33 ities; and
34 (B) the form in which the information can be made available using
35 existing computer programs.
36 (17) Applications, financial statements and other information sub-
37 mitted in connection with applications for student financial assistance
38 where financial need is a consideration for the award.
39 (18) Plans, designs, drawings or specifications which are prepared by
40 a person other than an employee of a public agency or records which are
41 the property of a private person.
42 (19) Well samples, logs or surveys which the state corporation com-
43 mission requires to be filed by persons who have drilled or caused to be
HB 2025 31
1 drilled, or are drilling or causing to be drilled, holes for the purpose of
2 discovery or production of oil or gas, to the extent that disclosure is limited
3 by rules and regulations of the state corporation commission.
4 (20) Notes, preliminary drafts, research data in the process of anal-
5 ysis, unfunded grant proposals, memoranda, recommendations or other
6 records in which opinions are expressed or policies or actions are pro-
7 posed, except that this exemption shall not apply when such records are
8 publicly cited or identified in an open meeting or in an agenda of an open
10 (21) Records of a public agency having legislative powers, which re-
11 cords pertain to proposed legislation or amendments to proposed legis-
12 lation, except that this exemption shall not apply when such records are:
13 (A) Publicly cited or identified in an open meeting or in an agenda
14 of an open meeting; or
15 (B) distributed to a majority of a quorum of any body which has au-
16 thority to take action or make recommendations to the public agency with
17 regard to the matters to which such records pertain.
18 (22) Records of a public agency having legislative powers, which re-
19 cords pertain to research prepared for one or more members of such
20 agency, except that this exemption shall not apply when such records are:
21 (A) Publicly cited or identified in an open meeting or in an agenda
22 of an open meeting; or
23 (B) distributed to a majority of a quorum of any body which has au-
24 thority to take action or make recommendations to the public agency with
25 regard to the matters to which such records pertain.
26 (23) Library patron and circulation records which pertain to identi-
27 fiable individuals.
28 (24) Records which are compiled for census or research purposes and
29 which pertain to identifiable individuals.
30 (25) Records which represent and constitute the work product of an
32 (26) Records of a utility or other public service pertaining to individ-
33 ually identifiable residential customers of the utility or service, including
34 names and addresses of customers of a municipal electric utility owned
35 or operated by a municipality that has elected to participate in competi-
36 tion in retail sales of generation service as provided by section (b)(1) or
37 (2) of section 5, except that information concerning billings for specific
38 individual customers named by the requester shall be subject to disclo-
39 sure as provided by this act.
40 (27) Specifications for competitive bidding, until the specifications
41 are officially approved by the public agency.
42 (28) Sealed bids and related documents, until a bid is accepted or all
43 bids rejected.
HB 2025 32
1 (29) Correctional records pertaining to an identifiable inmate or re-
2 lease, except that:
3 (A) The name; photograph and other identifying information; sen-
4 tence data; parole eligibility date; custody or supervision level; disciplinary
5 record; supervision violations; conditions of supervision, excluding
6 requirements pertaining to mental health or substance abuse counseling;
7 location of facility where incarcerated or location of parole office main-
8 taining supervision and address of a releasee whose crime was committed
9 after the effective date of this act shall be subject to disclosure to any
10 person other than another inmate or releasee, except that the disclosure
11 of the location of an inmate transferred to another state pursuant to the
12 interstate corrections compact shall be at the discretion of the secretary
13 of corrections;
14 (B) the ombudsman of corrections, the attorney general, law enforce-
15 ment agencies, counsel for the inmate to whom the record pertains and
16 any county or district attorney shall have access to correctional records to
17 the extent otherwise permitted by law;
18 (C) the information provided to the law enforcement agency pursu-
19 ant to the sex offender registration act, K.S.A. 22-4901, et seq., and
20 amendments thereto, shall be subject to disclosure to any person, except
21 that the name, address, telephone number or any other information which
22 specifically and individually identifies the victim of any offender required
23 to register as provided by the Kansas offender registration act, K.S.A. 22-
24 4901et seq. and amendments thereto, shall not be disclosed; and
25 (D) records of the department of corrections regarding the financial
26 assets of an offender in the custody of the secretary of corrections shall
27 be subject to disclosure to the victim, or such victim's family, of the crime
28 for which the inmate is in custody as set forth in an order of restitution
29 by the sentencing court.
30 (30) Public records containing information of a personal nature
31 where the public disclosure thereof would constitute a clearly unwar-
32 ranted invasion of personal privacy.
33 (31) Public records pertaining to prospective location of a business
34 or industry where no previous public disclosure has been made of the
35 business' or industry's interest in locating in, relocating within or expand-
36 ing within the state. This exception shall not include those records per-
37 taining to application of agencies for permits or licenses necessary to do
38 business or to expand business operations within this state, except as
39 otherwise provided by law.
40 (32) The bidder's list of contractors who have requested bid proposals
41 for construction projects from any public agency, until a bid is accepted
42 or all bids rejected.
43 (33) Engineering and architectural estimates made by or for any pub-
HB 2025 33
1 lic agency relative to public improvements.
2 (34) Financial information submitted by contractors in qualification
3 statements to any public agency.
4 (35) Records involved in the obtaining and processing of intellectual
5 property rights that are expected to be, wholly or partially vested in or
6 owned by a state educational institution, as defined in K.S.A. 76-711, and
7 amendments thereto, or an assignee of the institution organized and ex-
8 isting for the benefit of the institution.
9 (36) Any report or record which is made pursuant to K.S.A. 65-4922,
10 65-4923 or 65-4924, and amendments thereto, and which is privileged
11 pursuant to K.S.A. 65-4915 or 65-4925, and amendments thereto.
12 (37) Information which would reveal the precise location of an ar-
13 cheological site.
14 (38) Any financial data or traffic information from a railroad company,
15 to a public agency, concerning the sale, lease or rehabilitation of the
16 railroad's property in Kansas.
17 (39) Risk-based capital reports, risk-based capital plans and corrective
18 orders including the working papers and the results of any analysis filed
19 with the commissioner of insurance in accordance with K.S.A. 1998 Supp.
20 40-2c20, and amendments thereto.
21 (40) Memoranda and related materials required to be used to support
22 the annual actuarial opinions submitted pursuant to subsection (b) of
23 K.S.A. 40-409, and amendments thereto.
24 (41) Disclosure reports filed with the commissioner of insurance un-
25 der subsection (a) of K.S.A. 1998 Supp. 40-2,156, and amendments
27 (42) All financial analysis ratios and examination synopses concerning
28 insurance companies that are submitted to the commissioner by the na-
29 tional association of insurance commissioners' insurance regulatory infor-
30 mation system.
31 (43) Any records the disclosure of which is restricted or prohibited
32 by a tribal-state gaming compact.
33 (44) Market research, market plans, business plans and the terms and
34 conditions of managed care or other third party contracts, developed or
35 entered into by the university of Kansas medical center in the operation
36 and management of the university hospital which the chancellor of the
37 university of Kansas or the chancellor's designee determines would give
38 an unfair advantage to competitors of the university of Kansas medical
40 (45) Records relating to sales of generation service by a municipal
41 electric utility owned or operated by a municipality that has elected to
42 participate in competition in retail sales of generation service as provided
43 by subsection (b)(1) or (2) of section 5.
HB 2025 34
1 (b) Except to the extent disclosure is otherwise required by law or as
2 appropriate during the course of an administrative proceeding or on ap-
3 peal from agency action, a public agency or officer shall not disclose fi-
4 nancial information of a taxpayer which may be required or requested by
5 a county appraiser or the director of property valuation to assist in the
6 determination of the value of the taxpayer's property for ad valorem tax-
7 ation purposes; or any financial information of a personal nature required
8 or requested by a public agency or officer, including a name, job descrip-
9 tion or title revealing the salary or other compensation of officers, em-
10 ployees or applicants for employment with a firm, corporation or agency,
11 except a public agency. Nothing contained herein shall be construed to
12 prohibit the publication of statistics, so classified as to prevent identifi-
13 cation of particular reports or returns and the items thereof.
14 (c) As used in this section, the term "cited or identified" shall not
15 include a request to an employee of a public agency that a document be
17 (d) If a public record contains material which is not subject to dis-
18 closure pursuant to this act, the public agency shall separate or delete
19 such material and make available to the requester that material in the
20 public record which is subject to disclosure pursuant to this act. If a public
21 record is not subject to disclosure because it pertains to an identifiable
22 individual, the public agency shall delete the identifying portions of the
23 record and make available to the requester any remaining portions which
24 are subject to disclosure pursuant to this act, unless the request is for a
25 record pertaining to a specific individual or to such a limited group of
26 individuals that the individuals' identities are reasonably ascertainable, the
27 public agency shall not be required to disclose those portions of the record
28 which pertain to such individual or individuals.
29 (e) The provisions of this section shall not be construed to exempt
30 from public disclosure statistical information not descriptive of any iden-
31 tifiable person.
32 (f) Notwithstanding the provisions of subsection (a), any public rec-
33 ord which has been in existence more than 70 years shall be open for
34 inspection by any person unless disclosure of the record is specifically
35 prohibited or restricted by federal law, state statute or rule of the Kansas
36 supreme court or by a policy adopted pursuant to K.S.A. 72-6214, and
37 amendments thereto.
38 Sec. 29. K.S.A. 1998 Supp. 66-128 is hereby amended to read as
39 follows: 66-128. (a) The state corporation commission shall determine the
40 reasonable value of all or whatever fraction or percentage of the property
41 of any common carrier or public utility governed by the provisions of this
42 act which property is used and required to be used in its services to the
43 public within the state of Kansas, whenever the commission deems the
HB 2025 35
1 ascertainment of such value necessary in order to enable the commission
2 to fix fair and reasonable rates, joint rates, tolls and charges. In making
3 such valuations the commission may avail itself of any reports, records or
4 other things available to the commission in the office of any national, state
5 or municipal officer or board.
6 (b) For the purposes of this act, property of any public utility which
7 has not been completed and dedicated to commercial service shall not
8 be deemed to be used and required to be used in the public utility's
9 service to the public, except that, any property of a public utility may be
10 deemed to be completed and dedicated to commercial service if: (1) Con-
11 struction of the property will be commenced and completed in one year
12 or less; (2) the property is an electric generation facility that has a capacity
13 of 100 megawatts or less and converts wind, solar, biomass, landfill gas
14 or any other renewable source of energy; or (3) construction of the prop-
15 erty has been authorized by a siting permit issued under former K.S.A.
16 66-1,158 et seq. or 66-1,177 et seq.
, and amendments thereto.
17 Sec. 30. K.S.A. 66-128e is hereby amended to read as follows: 66-
18 128e. In the event the commission finds that a portion of the costs were
19 attributable either to investment in excess capacity which were incurred
20 due to lack of prudence in facility planning or were incurred due to lack
21 of prudence in plant acquisition, construction or operation, the commis-
22 sion shall exclude that portion of the carrying or finance charges incurred
23 after the date of its finding, and no part of the carrying or finance costs
24 excluded shall ever be or become part of the reasonable value of public
25 utility property so used and required to be used. For the purposes of this
26 section only, a finding of lack of prudence in capacity planning for a facility
27 which in whole or in part represents excess capacity shall not be made by
28 the commission when a siting permit authorizing the construction of the
has been was issued under former K.S.A. 66-1,162 and amend-
ments thereto prior to the passage of this act before April 19, 1984. The
31 commission also shall not authorize the recovery as operating expense or
32 in any other manner of the carrying or finance costs so excluded.
33 Nothing in this act shall limit the commission's authority to adjust rev-
34 enue requirements of any public utility if the commission determines the
35 revenue requirement requested results in whole or in part from ineffi-
36 ciency or a lack of prudence.
37 If the commission determines that a public utility, which generates and
38 sells electricity as its main activity, has borrowed funds in order to pay
39 dividends and such borrowing as the result of lack of prudence, increases
40 the revenue requirement of the utility, the commission may adjust the
41 revenue requirement accordingly.
42 Sec. 31. K.S.A. 66-128f is hereby amended to read as follows: 66-
43 128f. Any public utility subject to the provisions of K.S.A. 66-128b to 66-
HB 2025 36
1 128g, inclusive, which constructs an electric generating facility
not required to obtain an advance permit under K.S.A. 66-1,159 et seq.
3 shall make and send monthly financial reports to the state corporation
4 commission. Such reports shall include the following information, as of
5 the date of the report, the: (a) Actual costs incurred; (b) total estimated
6 cost of the facility; (c) percentage of the facility which is actually com-
7 pleted; (d) estimated date of first commercial operation; (e) copies of
8 informational filings provided federal agencies having regulatory authority
9 over such construction; and (f) any other information required by the
10 commission. Such reports shall be prepared and certified in the manner
11 and form required by the commission. Nothing in this section shall limit
12 the commission's authority to require filing of data in any format by any
13 regulated utility the commission deems necessary to accomplish its reg-
14 ulatory duties.
15 Sec. 32. K.S.A. 66-128g is hereby amended to read as follows: 66-
16 128g. (a) The factors which shall be considered by the commission in
17 making the determination of "prudence" or lack thereof in determining
18 the reasonable value of electric generating property, as contemplated by
19 this act shall include without limitation the following:
20 (1) A comparison of the existing rates of the utility with rates that
21 would result if the entire cost of the facility were included in the rate
22 base for that facility;
23 (2) a comparison of the rates of any other utility in the state which
24 has no ownership interest in the facility under consideration with the rates
25 that would result if the entire cost of the facility were included in the rate
27 (3) a comparison of the final cost of the facility under consideration
28 to the final cost of other facilities constructed within a reasonable time
29 before or after construction of the facility under consideration;
30 (4) a comparison of the original cost estimates made by the owners
31 of the facility under consideration with the final cost of such facility;
32 (5) the ability of the owners of the facility under consideration to sell
33 on the competitive wholesale or other market electrical power generated
34 by such facility if the rates for such power were determined by inclusion
35 of the entire cost of the facility in the rate base;
36 (6) a comparison of any overruns in the construction cost of the fa-
37 cility under consideration with any cost overruns of any other electric
38 generating facility constructed within a reasonable time before or after
39 construction of the facility under consideration;
40 (7) whether the utility having an ownership interest in the facility
41 being considered has provided a method to ensure that the cost of any
42 decommissioning, any waste disposal or any cost of clean up of any inci-
43 dent in construction or operation of such facility is to be paid by the utility;
HB 2025 37
1 (8) inappropriate or poor management decisions in construction or
2 operation of the facility being considered;
3 (9) whether inclusion of all or any part of the cost of construction of
4 the facility under consideration, and the resulting rates of the utility there-
5 from, would have an adverse economic impact upon the people of Kansas;
6 (10) whether the utility acted in the general public interest in man-
7 agement decisions in the acquisition, construction or operation of the
9 (11) whether the utility accepted risks in the construction of the fa-
10 cility which were inappropriate to the general public interest to Kansas;
11 (12) any other fact, factor or relationship which may indicate pru-
12 dence or lack thereof as that term is commonly used.
13 (b) The portion of the cost of a plant or facility which exceeds 200%
14 of the "original cost estimate" thereof shall be presumed to have been
15 incurred due to a lack of prudence. The commission may include any or
16 all of the portion of cost in excess of 200% of the "original cost estimate"
17 if the commission finds by a preponderance of the evidence that such
18 costs were prudently incurred. As used in this act "original cost estimate"
20 (1) For property of an electric utility which has been constructed
21 without obtaining an advance permit under former K.S.A. 66-1,159 et
and amendments thereto, the "definitive estimate"; and
23 (2) for property of an electric utility which has been constructed after
24 obtaining an advance permit under former K.S.A. 66-1,159 et seq.,
amendments thereto, the cost estimate made by the utility in the process
26 of obtaining the advance permit.
27 Sec. 33. K.S.A. 75-4319 is hereby amended to read as follows: 75-
28 4319. (a) Upon formal motion made, seconded and carried, all bodies and
29 agencies subject to this act may recess, but not adjourn, open meetings
30 for closed or executive meetings. Any motion to recess for a closed or
31 executive meeting shall include a statement of (1) the justification for
32 closing the meeting, (2) the subjects to be discussed during the closed or
33 executive meeting and (3) the time and place at which the open meeting
34 shall resume. Such motion, including the required statement, shall be
35 recorded in the minutes of the meeting and shall be maintained as a part
36 of the permanent records of the body or agency. Discussion during the
37 closed or executive meeting shall be limited to those subjects stated in
38 the motion.
39 (b) No subjects shall be discussed at any closed or executive meeting,
40 except the following:
41 (1) Personnel matters of nonelected personnel;
42 (2) consultation with an attorney for the body or agency which would
43 be deemed privileged in the attorney-client relationship;
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1 (3) matters relating to employer-employee negotiations whether or
2 not in consultation with the representative or representatives of the body
3 or agency;
4 (4) confidential data relating to financial affairs or trade secrets of
5 corporations, partnerships, trusts, and individual proprietorships;
6 (5) matters relating to actions adversely or favorably affecting a per-
7 son as a student, patient or resident of a public institution, except that
8 any such person shall have the right to a public hearing if requested by
9 the person;
10 (6) preliminary discussions relating to the acquisition of real property;
11 (7) matters permitted to be discussed in a closed or executive meeting
12 pursuant to K.S.A. 74-8804 and amendments thereto;
13 (8) matters permitted to be discussed in a closed or executive meeting
14 pursuant to subsection (a)(2)(J) of K.S.A. 38-1507 and amendments
15 thereto or subsection (f) of K.S.A. 38-1508 and amendments thereto;
16 (9) matters permitted to be discussed in a closed or executive meeting
17 pursuant to subsection (j) of K.S.A. 22a-243 and amendments thereto;
18 (10) matters permitted to be discussed in a closed or executive meet-
19 ing pursuant to subsection (e) of K.S.A. 44-596 and amendments thereto;
20 (11) matters permitted to be discussed in a closed or executive meet-
21 ing pursuant to subsection (g) of K.S.A. 1998 Supp. 39-7,119 and amend-
22 ments thereto;
23 (12) matters required to be discussed in a closed or executive meeting
24 pursuant to a tribal-state gaming compact; and
25 (13) matters relating to sales of generation service by a municipal
26 electric utility owned or operated by a municipality that has elected to
27 participate in competition in retail sales of generation service as provided
28 by subsection (b)(1) or (2) of section 5.
29 (c) No binding action shall be taken during closed or executive re-
30 cesses except with regard to matters described in subsection (b)(13), and
31 such recesses shall not be used as a subterfuge to defeat the purposes of
32 this act.
33 Sec. 34. K.S.A. 79-1439 is hereby amended to read as follows: 79-
34 1439. (a) All real and tangible personal property which is subject to gen-
35 eral ad valorem taxation shall be appraised uniformly and equally as to
36 class and, unless otherwise specified herein, shall be appraised at its fair
37 market value, as defined in K.S.A. 79-503a, and amendments thereto.
38 (b) Property shall be classified into the following classes and assessed
39 at the percentage of value prescribed therefor:
40 (1) Real property shall be assessed as to subclass at the following
41 percentages of value:
42 (A) Real property used for residential purposes including multi-fam-
43 ily residential real property, real property necessary to accommodate a
HB 2025 39
1 residential community of mobile or manufactured homes including the
2 real property upon which such homes are located and residential real
3 property used partially for day care home purposes if such home has been
4 registered or licensed pursuant to K.S.A. 65-501 et seq., and amendments
5 thereto at 11.5%;
6 (B) land devoted to agricultural use valued pursuant to K.S.A. 79-
7 1476, and amendments thereto, at 30%;
8 (C) vacant lots at 12%;
9 (D) real property which is owned and operated by a not-for-profit
10 organization not subject to federal income taxation pursuant to section
11 501 of the federal internal revenue code and included herein pursuant to
12 K.S.A. 79-1439a, and amendments thereto, at 12%;
13 (E) public utility real property, except railroad property which shall
14 be assessed at the average rate all other commercial and industrial prop-
15 erty is assessed, at 33%
. As used in this paragraph, "public utility" shall
have the meaning ascribed thereto by K.S.A. 79-5a01, and amendments
18 (F) real property used for commercial and industrial purposes, com-
19 petitive electricity provider real property and buildings and other im-
20 provements located upon land devoted to agricultural use at 25%; and
21 (G) all other urban and rural real property not otherwise specifically
22 subclassed at 30%.
23 (2) Personal property shall be classified into the following classes and
24 assessed at the percentage of value prescribed therefor:
25 (A) Mobile homes used for residential purposes at 11.5%;
26 (B) mineral leasehold interests, except oil leasehold interests the av-
27 erage daily production from which is five barrels or less, and natural gas
28 leasehold interests, the average daily production from which is 100 mcf
29 or less, which shall be assessed at 25%, at 30%;
30 (C) public utility tangible personal property including inventories
31 thereof, except railroad personal property including inventories thereof,
32 which shall be assessed at the average rate all other commercial and in-
33 dustrial property is assessed, at 33%
. As used in this paragraph, "public
utility" shall have the meaning ascribed thereto by K.S.A. 79-5a01, and
36 (D) all categories of motor vehicles listed and taxed pursuant to
37 K.S.A. 79-306d, and amendments thereto, and over-the-road motor ve-
38 hicles defined pursuant to K.S.A. 79-6a01, and amendments thereto, at
40 (E) commercial and industrial machinery and equipment, including
41 rolling equipment defined pursuant to K.S.A. 79-6a01, and amendments
42 thereto, and competitive electricity provider machinery and equipment,
43 which, if its economic life is seven years or more, shall be valued at its
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1 retail cost when new less seven-year straight-line depreciation, or which,
2 if its economic life is less than seven years, shall be valued at its retail cost
3 when new less straight-line depreciation over its economic life, except
4 that, the value so obtained for such property as long as it is being used
5 shall not be less than 20% of the retail cost when new of such property
6 at 25%; and
7 (F) all other tangible personal property not otherwise specifically
8 classified at 30%.
9 (c) As used in this section, "public utility" means any public utility,
10 as defined in K.S.A. 79-5a01 and amendments thereto, except a compet-
11 itive electricity provider as defined in section 2.
12 (d) The provisions of the amendments to this section by this act shall
13 be applicable to all taxable years commencing on or after July 1, 2002.
14 Sec. 35. K.S.A. 66-128e, 66-128f, 66-128g, 66-1,159 through 66-
15 1,165, 66-1,168, 66-1,169a, 66-1,169c, 75-4319 and 79-1439 and K.S.A.
16 1998 Supp. 45-221, 66-128, 66-1,158 and 66-1,169b are hereby repealed.
17 Sec. 36. This act shall take effect and be in force from and after its
18 publication in the statute book.