71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
HA to HB 3633
LC 4050/HB 3633-9
HOUSE AMENDMENTS TO
HOUSE BILL 3633
By COMMITTEE ON ADVANCING E-GOVERNMENT
May 21
On page 1 of the printed bill, delete lines 3 and 4 and insert
'757.603, 757.612, 757.642 and 757.687 and section 2, chapter
865, Oregon Laws 1999; and declaring an emergency.'.
Delete lines 6 through 31 and delete pages 2 through 13 and
insert:
' { + SECTION 1. + } Section 2, chapter 865, Oregon Laws
1999, is amended to read:
' { + Sec. 2. + } (1) All retail electricity consumers of an
electric company, other than residential electricity consumers,
shall be allowed direct access { - not later than October 1,
2001 - } { + not earlier than March 31, 2003 + }.
' (2) The Public Utility Commission shall report to the
Legislative Assembly not later than January 1, 2003, on whether
residential electricity consumers would benefit from direct
access to electricity services. The report shall address, at a
minimum, issues of market development for residential and
small-farm consumers and the impact of direct access on
residential and small-farm consumers' access to benefits from the
federal Columbia River power system.
' (3) Residential electricity consumers shall be allowed to
purchase electricity from among a portfolio of rate options as
described in section 4 of this 1999 Act { - , not later than
October 1, 2001 - } { + not earlier than March 31, 2003 + }.
' (4) { - Sections 1 to 20 and 22 to 29 and the amendments to
ORS 192.502, 221.450, 225.270, 225.450, 225.460, 225.470,
225.490, 261.235, 261.240, 261.245, 261.255, 757.005 and 757.259
by sections 21 and 30 to 41 of this 1999 Act - } { + ORS
757.600 to 757.691 + } do not apply to an electric company
providing electricity services to fewer than 25,000 consumers in
this state unless the electric company offers direct access to
any of its retail electricity consumers in this state or offers
to sell electricity services available under direct access to
more than one retail electricity consumer of another electric
utility.
' { + SECTION 2. + } ORS 757.603 is amended to read:
' 757.603. (1) { - Not later than October 1, 2001 - }
{ + On and after March 31, 2003 + }, an electric company shall
provide residential electricity consumers and small commercial
electricity consumers, as defined by the Public Utility
Commission, that are connected to the electric company's
distribution system with a cost-of-service rate option. The
commission may require, by order made following a public hearing,
an electric company to provide a cost-of-service rate option to
other electricity consumers.
' (2) { - Not later than October 1, 2001 - } { + On and
after March 31, 2003 + }, each electric company shall provide
each residential electricity consumer that is connected to its
distribution system a portfolio of rate options. The portfolio
shall include at least the following options:
' (a) A rate that reflects significant new renewable energy
resources; and
' (b) A market-based rate.
' (3)(a) The commission shall regulate the cost-of-service rate
option under subsection (1) of this section and the portfolio of
rate options under subsection (2) of this section. The commission
shall reasonably ensure that the costs and risks of serving each
option are reflected in the rates for each option.
' (b) The commission may prohibit or otherwise limit the use of
a cost-of-service rate by retail electricity consumers who have
been served through direct access, and may limit switching among
portfolio options and the cost-of-service rate by residential
electricity consumers.
' { + SECTION 3. + } ORS 757.612 is amended to read:
' 757.612. (1) There is established an annual public purpose
expenditure standard for electric companies to fund new
cost-effective local energy conservation, new market
transformation efforts, the above-market costs of new renewable
energy resources, and new low-income weatherization. The public
purpose expenditure standard shall be funded by the public
purpose charge described in subsection (2) of this section.
' (2)(a) Beginning on the date an electric company offers
direct access to its retail electricity consumers, except
residential electricity consumers, the electric company shall
collect a public purpose charge from all of the retail
electricity consumers located within its service area for a
period of 10 years. Except as provided in paragraph (b) of this
subsection, the public purpose charge shall be equal to three
percent of the total revenues collected by the electric company
or electricity service supplier from its retail electricity
consumers for electricity services, distribution, ancillary
services, metering and billing, transition charges and other
types of costs included in electric rates on July 23, 1999.
' (b) For an aluminum plant that averages more than 100 average
megawatts of electricity use per year, beginning on
{ - October 1, 2001 - } { + March 31, 2003 + }, the electric
company whose territory abuts the greatest percentage of the site
of the aluminum plant shall collect from the aluminum company a
public purpose charge equal to one percent of the total revenue
from the sale of electricity services to the aluminum plant from
any source.
' (3)(a) The Public Utility Commission shall establish rules
implementing the provisions of this section relating to electric
companies.
' (b) Subject to paragraph (e) of this subsection, funds
collected by an electric company through public purpose charges
shall be allocated as follows:
' (A) Sixty-three percent for new cost-effective conservation
and new market transformation.
' (B) Nineteen percent for the above-market costs of new
renewable energy resources.
' (C) Thirteen percent for new low-income weatherization.
' (D) Five percent shall be transferred to the Housing and
Community Services Department Revolving Account created under ORS
456.574 and used for the purpose of providing grants as described
in ORS 458.625 (2). Moneys deposited in the account under this
subparagraph are continuously appropriated to the Housing and
Community Services Department for the purposes of ORS 458.625
(2). Interest on moneys deposited in the account under this
subparagraph shall accrue to the account.
' (c) The costs of administering subsections (1) to (6) of this
section for an electric company shall be paid out of the funds
collected through public purpose charges. The commission may
require that an electric company direct funds collected through
public purpose charges to the state agencies responsible for
implementing subsections (1) to (6) of this section in order to
pay the costs of administering such responsibilities.
' (d) The commission shall direct the manner in which public
purpose charges are collected and spent by an electric company
and may require an electric company to expend funds through
competitive bids or other means designed to encourage
competition, except that funds dedicated for low-income
weatherization shall be directed to the Housing and Community
Services Department as provided in subsection (7) of this
section. The commission may also direct that funds collected by
an electric company through public purpose charges be paid to a
nongovernmental entity for investment in public purposes
described in subsection (1) of this section. Notwithstanding any
other provision of this subsection, at least 80 percent of the
funds allocated for conservation shall be spent within the
service area of the electric company that collected the funds.
' (e)(A) The first 10 percent of the funds collected annually
by an electric company under subsection (2) of this section shall
be distributed to education service districts, as described in
ORS 334.010, that are located in the service territory of the
electric company. The funds shall be distributed to individual
education service districts according to the weighted average
daily membership (ADMw) of the education service district for the
prior fiscal year as calculated under ORS 327.013. The commission
shall establish by rule a methodology for distributing a
proportionate share of funds under this paragraph to education
service districts that are only partially located in the service
territory of the electric company.
' (B) An education service district that receives funds under
this paragraph shall use the funds first to pay for energy audits
for school districts located within the education service
district. An education service district shall not expend
additional funds received under this paragraph on a school
district facility until an energy audit has been completed for
that school district. To the extent practicable, an education
service district shall coordinate with the Office of Energy and
incorporate federal funding in complying with this paragraph.
Following completion of an energy audit for an individual school
district, the education service district may expend funds
received under this paragraph to implement the energy audit. Once
an energy audit has been conducted and completely implemented for
each school district within the education service district, the
education service district may expend funds received under this
paragraph for any of the following purposes:
' (i) Conducting energy audits. A school district shall conduct
an energy audit prior to expending funds on any other purpose
authorized under this paragraph unless the school district has
performed an energy audit within the three years immediately
prior to receiving the funds.
' (ii) Weatherization and upgrading the energy efficiency of
school district facilities.
' (iii) Energy conservation education programs.
' (iv) Purchasing electricity from environmentally focused
sources and investing in renewable energy resources.
' (f) The commission may establish a different public purpose
charge than the public purpose charge otherwise described in
subsection (2) of this section for an individual retail
electricity consumer or any class of retail electricity consumers
located within the service area of an electric company, provided
that a retail electricity consumer with a load greater than one
average megawatt shall not be required to pay a public purpose
charge in excess of three percent of its total cost of
electricity services.
' (g) The commission shall remove from the rates of each
electric company any costs for public purposes described in
subsection (1) of this section that are included in rates. A rate
adjustment under this paragraph shall be effective on the date
that the electric company begins collecting public purpose
charges.
' (4) An electric company that satisfies its obligations under
this section shall have no further obligation to invest in
conservation, new market transformation, new renewable energy
resources or new low-income weatherization and is not subject to
ORS 469.631 to 469.645 and 758.505 to 758.555.
' (5)(a) A retail electricity consumer that uses more than one
average megawatt of electricity at any site in the prior year
shall receive a credit against public purpose charges billed by
an electric company for that site. The amount of the credit shall
be equal to the total amount of qualifying expenditures for new
energy conservation, not to exceed 68 percent of the annual
public purpose charges, and the above-market costs of purchases
of new renewable energy resources incurred by the retail
electricity consumer, not to exceed 19 percent of the annual
public purpose charges, less administration costs incurred under
this subsection. The credit shall not exceed, on an annual
basis, the lesser of:
' (A) The amount of the retail electricity consumer's
qualifying expenditures; or
' (B) The portion of the public purpose charge billed to the
retail electricity consumer that is dedicated to new energy
conservation, new market transformation or the above-market costs
of new renewable energy resources.
' (b) To obtain a credit under this subsection, a retail
electricity consumer shall file with the Office of Energy a
description of the proposed conservation project or new renewable
energy resource and a declaration that the retail electricity
consumer plans to incur the qualifying expenditure. The Office of
Energy shall issue a notice of precertification within 30 days of
receipt of the filing, if such filing is consistent with this
subsection. The credit may be taken after a retail electricity
consumer provides a letter from a certified public accountant to
the Office of Energy verifying that the precertified qualifying
expenditure has been made.
' (c) Credits earned by a retail electricity consumer as a
result of qualifying expenditures that are not used in one year
may be carried forward for use in subsequent years.
' (d)(A) A retail electricity consumer that uses more than one
average megawatt of electricity at any site in the prior year may
request that the Office of Energy hire an independent auditor to
assess the potential for conservation investments at the site.
If the independent auditor determines there is no available
conservation measure at the site that would have a simple payback
of one to 10 years, the retail electricity consumer shall be
relieved of 54 percent of its payment obligation for public
purpose charges related to the site. If the independent auditor
determines that there are potential conservation measures
available at the site, the retail electricity consumer shall be
entitled to a credit against public purpose charges related to
the site equal to 54 percent of the public purpose charges less
the estimated cost of available conservation measures.
' (B) A retail electricity consumer shall be entitled each year
to the credit described in this subsection unless a subsequent
independent audit determines that new conservation investment
opportunities are available. The Office of Energy may require
that a new independent audit be performed on the site to
determine whether new conservation measures are available,
provided that the independent audits shall occur no more than
once every two years.
' (C) The retail electricity consumer shall pay the cost of the
independent audits described in this subsection.
' (6) Electric utilities and retail electricity consumers shall
receive a fair and reasonable credit for the public purpose
expenditures of their energy suppliers. The Office of Energy
shall adopt rules to determine eligible expenditures and the
methodology by which such credits are accounted for and used. The
rules also shall adopt methods to account for eligible public
purpose expenditures made through consortia or collaborative
projects.
' (7)(a) In addition to the public purpose charge provided
under subsection (2) of this section, beginning on the date
direct access is offered under section 2 (1), chapter 865, Oregon
Laws 1999, an electric company shall collect funds for low-income
electric bill payment assistance in an amount determined under
paragraph (b) of this subsection.
' (b) The total amount collected for low-income electric bill
payment assistance under this section shall be $10 million. The
commission shall determine each electric company's proportionate
share of the total amount. The commission shall determine the
amount to be collected from a retail electricity consumer, except
that a retail electricity consumer shall not be required to pay
more than $500 per month per site for low-income electric bill
payment assistance.
' (c) Funds collected by the low-income electric bill payment
assistance charge shall be paid into the Housing and Community
Services Department Revolving Account created under ORS 456.574.
Moneys deposited in the account under this paragraph are
continuously appropriated to the Housing and Community Services
Department for the purpose of funding low-income electric bill
payment assistance. Interest earned on moneys deposited in the
account under this paragraph shall accrue to the account. The
department's cost of administering this subsection shall be paid
out of funds collected by the low-income electric bill payment
assistance charge. Moneys deposited in the account under this
paragraph shall be expended solely for low-income electric bill
payment assistance. Funds collected from an electric company
shall be expended in the service area of the electric company
from which the funds are collected.
' (d) The Housing and Community Services Department, in
consultation with the federal Advisory Committee on Energy, shall
determine the manner in which funds collected under this
subsection will be allocated by the department to energy
assistance program providers for the purpose of providing
low-income bill payment and crisis assistance, including programs
that effectively reduce service disconnections and related costs
to retail electricity consumers and electric utilities. Priority
assistance shall be directed to low-income electricity consumers
who are in danger of having their electricity service
disconnected.
' (e) Notwithstanding ORS 293.140, interest on moneys deposited
in the Housing and Community Services Department Revolving
Account under this subsection shall accrue to the account and may
be used to provide heating bill payment and crisis assistance to
electricity consumers whose primary source of heat is not
electricity.
' (f) Notwithstanding ORS 757.310, the commission may allow an
electric company to provide reduced rates or other payment or
crisis assistance or low-income program assistance to a
low-income household eligible for assistance under the federal
Low Income Home Energy Assistance Act of 1981, as amended and in
effect on July 23, 1999.
' (8) In addition to all other charges provided in this
section, for the period from January 1, 2000, to the date direct
access is offered under section 2 (1), chapter 865, Oregon Laws
1999, an electric company shall collect from its retail
electricity consumers an electric bill payment assistance charge.
A retail electricity consumer shall not be required to pay more
than $500 per month per site for low-income electric bill payment
assistance under this subsection. The statewide total amount
collected under this subsection shall equal $5 million per year,
prorated for any fraction of a year. The commission shall
determine each electric company's proportionate share of the
statewide total amount. Moneys collected under this subsection
shall be deposited in the Housing and Community Services
Department Revolving Account created under ORS 456.574 and
expended for low-income electric bill payment assistance in the
manner provided in subsection (7)(d) of this section.
' (9) For purposes of this section, 'retail electricity
consumers' includes any direct service industrial consumer that
purchases electricity without purchasing distribution services
from the electric utility.
' { + SECTION 4. + } ORS 757.642 is amended to read:
' 757.642. (1) { - Not later than October 1, 2001 - }
{ + Not earlier than March 31, 2003 + }, an electric company
shall unbundle the costs of electricity services into power
generation, transmission, distribution and retail services.
' (2) Every electric company shall maintain separate accounting
records for each component of electricity service provided by the
electric company to retail electricity consumers. Accounts shall
be maintained according to regulations issued by the Federal
Energy Regulatory Commission.
' (3) Unless required to provide a different accounting under
federal requirements, each electric company shall, to a
reasonable level of detail, separately identify and account for
its costs of:
' (a) Generation;
' (b) Transmission services;
' (c) Distribution services;
' (d) Ancillary services;
' (e) Consumer service charges levied on retail electricity
consumers, including but not limited to metering and billing;
' (f) Investment in public purposes; and
' (g) State and local taxes paid by retail electricity
consumers.
' (4) An electric company shall separately identify and account
for the costs of any additional components as the Public Utility
Commission may require.
' { + SECTION 5. + } ORS 757.687 is amended to read:
' 757.687. (1) Beginning on the date a consumer-owned utility
provides direct access to any class of retail electric consumers,
the consumer-owned utility shall collect from that consumer class
a nonbypassable public purpose charge for a period of 10 years.
Except as provided in subsection (8) of this section, the amount
of the public purpose charge shall be sufficient to produce
revenue of not less than three percent of the total revenue
collected by the consumer-owned utility from its retail
electricity consumers for electricity services, distribution,
ancillary services, metering and billing, transition charges and
any other costs included in rates as of July 23, 1999, except
that the consumer-owned utility may exclude from the calculation
of such costs any cost related to the public purposes described
in subsection (5) of this section. If a consumer-owned utility
has fewer than 17 consumers per mile of distribution line, the
amount of the public purpose charge shall be sufficient to
produce revenue not less than three percent of the total revenue
from the sale of electricity services in the utility's service
area to the consumer class that is provided direct access, or the
utility's consumer class percentage share of state total
electricity sales multiplied by three percent of total statewide
retail electric revenue, whichever is less.
' (2) Except as provided in subsection (9) of this section, the
governing body of a consumer-owned utility shall determine the
manner of collecting and expending funds for public purposes
required by law to be assessed against and paid by the retail
electric consumers of the utility. A determination by the
governing body shall include:
' (a) The manner for collecting public purpose charges;
' (b) Public purpose programs upon which revenue from the
charges may be expended; and
' (c) The allocation of expenditures for each program.
' (3) Beginning on the same date two years after July 23, 1999,
a consumer-owned utility shall report annually to the Office of
Energy created under ORS 469.030 on the public purpose charges
paid to the utility by its retail electric consumers and the
public purposes on which the revenue was expended.
' (4) A consumer-owned utility may comply with the public
purpose requirements of this section by participating in
collaborative efforts with other consumer-owned utilities located
in this state.
' (5) Funds assessed and paid by, and credits or other
financial assistance issued or extended to, retail electric
consumers for purposes of this section may, in the discretion of
the governing body of the consumer-owned utility, be expended to
fund programs for energy conservation, renewable resources or
low-income energy services otherwise required by the laws of this
state, adopted by the governing body pursuant to the National
Energy Conservation Policy Act (Public Law 95-619, as amended
November 10, 1981), or conducted by the utility pursuant to
agreement with the Bonneville Power Administration under the
Pacific Northwest Electric Power Planning and Conservation Act
(Public Law 96-501). All such funds expended, credits issued and
incremental costs incurred in connection with the performance of
a consumer-owned utility's obligations under this section shall
be credited toward the utility's public purpose funding
obligation under this section.
' (6) A consumer-owned utility also may credit toward its
funding obligations under this section any incremental costs
incurred by the utility for capital expenditures made to reduce
its distribution system energy losses, existing biomass gas and
waste to energy systems, existing hydroelectric generation
projects using fish attraction water, for new energy conservation
and renewable resource funding costs included in its wholesale
power supplier's charges and for electric power generated by
renewable or cogeneration resources pursuant to requirements of
the Public Utilities Regulatory Policy Act of 1978 (Public Law
95-617), to the extent that such costs exceed the average cost of
the utility's other electric power resources.
' (7) A consumer-owned utility also may credit toward its
public purpose funding obligations under this section any costs
incurred in complying with ORS 469.649 to 469.659.
' (8) Beginning on { - October 1, 2001 - } { + March 31,
2003 + }, a consumer-owned utility whose territory abuts the
greatest percentage of the site of an aluminum plant that
averages more than 100 megawatts of electricity use per year
shall collect from the aluminum company a public purpose charge
equal to one percent of the total revenue from the sale of
electricity services to the aluminum plant from any source.
' (9)(a) A retail electricity consumer that uses more than one
average megawatt of electricity at any site in the prior year
shall receive a credit against public purpose charges billed by a
consumer-owned utility for that site. The amount of the credit
shall be equal to the total amount of qualifying expenditures for
new energy conservation, not to exceed 68 percent of the annual
public purpose charges, and the above-market costs of purchases
of new renewable energy resources incurred by the retail
electricity consumer, less administration costs incurred under
this subsection. The credit shall not exceed, on an annual basis,
the lesser of:
' (A) The amount of the retail electricity consumer's
qualifying expenditures; or
' (B) The portion of the public purpose charge billed to the
retail electricity consumer that is dedicated to new energy
conservation, new market transformation or the above-market costs
of new renewable resources.
' (b) To obtain a credit under this subsection, a retail
electricity consumer shall file with the Office of Energy a
description of the proposed conservation project, new market
transformation or new renewable energy resource and a declaration
that the retail electricity consumer plans to incur the
qualifying expenditure. The Office of Energy shall issue a notice
of precertification within 30 days of receipt of the filing, if
such filing is consistent with this subsection. Notice shall be
issued to the retail electricity consumer and the appropriate
consumer-owned utility. The credit may be taken after a retail
electricity consumer provides a letter from a certified public
accountant to the Office of Energy verifying that the
precertified qualifying expenditure has been made.
' (c) Credits earned by a retail electricity consumer as a
result of qualifying expenditures that are not used in one year
may be carried forward for use in subsequent years.
' (d)(A) A retail electricity consumer that uses more than one
average megawatt of electricity at any site in the prior year may
request that the Office of Energy hire an independent auditor to
assess the potential for conservation measures at the site. If
the independent auditor determines there is no available
conservation measure at the site that would have a simple payback
of one to 10 years, the retail electricity consumer shall be
relieved of 54 percent of its payment obligation for public
purpose charges related to the site. If the auditor determines
that there are potential conservation measures available at the
site, the retail electricity consumer shall be entitled to a
credit against public purpose charges related to the site equal
to 54 percent of the public purpose charges less the estimated
cost of available conservation measures.
' (B) A retail electricity consumer shall be entitled each year
to the credit described in this paragraph unless a subsequent
audit determines that new conservation investment opportunities
are available. The Office of Energy may require that a new audit
be performed on the site to determine whether new conservation
measures are available, provided that the audits occur no more
than once every two years.
' (C) The retail electricity consumer shall pay the cost of the
audits described in this subsection.
' (10) A retail electricity consumer with a load greater than
one average megawatt shall not be required to pay a public
purpose charge in excess of three percent of the consumer's total
cost of electricity services unless the charge is established in
an agreement between the consumer and the consumer-owned utility.
' (11) Beginning on { - the later of October 1, 2001, or the
date direct access is offered under section 2 (1), chapter 865,
Oregon Laws 1999 - } { + March 31, 2003 + }, a consumer-owned
utility shall have in operation a bill assistance program for
households that qualify for federal low-income energy assistance
in the consumer-owned utility's service area. A consumer-owned
utility shall report annually to the Housing and Community
Services Department detailing the utility's program and program
expenditures.
' (12) A consumer-owned utility may require an electricity
service supplier to provide information necessary to ensure
compliance with this section. The consumer-owned utility shall
ensure the privacy and protection of any proprietary information
provided.
' { + SECTION 6. + } { + Section 7 of this 2001 Act is added
to and made a part of ORS 757.600 to 757.691. + }
' { + SECTION 7. + } { + (1) After notice and opportunity
for hearing, the Public Utility Commission shall determine the
amount of all costs prudently incurred by an electric company
before the effective date of this 2001 Act for the acquisition,
development, operation and maintenance of investments, systems
and procedures, including arrangements with third parties, that
were necessary for implementation of chapter 865, Oregon Laws
1999, and that are of reduced or no value to the electric company
by reason of the provisions of this 2001 Act. The costs so
calculated do not include any amount that the electric company
could have mitigated through prudent action. Costs subject to the
provisions of this section include all costs of mitigation
incurred by the electric company by reason of this 2001 Act,
including workforce severance payments. The commission shall
issue an order stating the amount of the costs determined by the
commission under this subsection, and shall designate those costs
as restructuring investments of the electric company.
' (2) Notwithstanding ORS 757.355, the commission shall set
rates for an electric company to allow recovery of the company's
restructuring investments determined under this section. If the
rates are set to recover restructuring investments over a period
of more than one year, the commission shall include a return on
restructuring investments that is not less than the return on
investment allowed on property of the electric company that is
necessary or useful in the performance of the company's duties to
the public. The commission may not revalue restructuring
investments for rate-making purposes, determine that revenues
required to recover restructuring investments are unjust or
unreasonable, impair or reduce in any way the value of
restructuring investments, or impair the timing or the amount of
revenues needed to compensate the electric company for
restructuring investments. + }
' { + SECTION 8. + } { + This 2001 Act being necessary for
the immediate preservation of the public peace, health and
safety, an emergency is declared to exist, and this 2001 Act
takes effect on its passage. + } ' .
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