Relating to utility regulation; creating new provisions; amending ORS 221.450, 225.270 and 757.005; repealing ORS 221.655, 757.600, 757.603, 757.607, 757.612, 757.617, 757.622, 757.627, 757.629, 757.632, 757.637, 757.642, 757.646, 757.649, 757.654, 757.656, 757.659, 757.661, 757.665, 757.667, 757.669, 757.672, 757.676, 757.679, 757.683, 757.687 and 757.691 and sections 2 and 18, chapter 865, Oregon Laws 1999; and declaring an emergency.

 
 
 
     71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 3120
 
                           A-Engrossed
 
                         House Bill 3696
                   Ordered by the House May 9
             Including House Amendments dated May 9
 
Sponsored by COMMITTEE ON ADVANCING E-GOVERNMENT
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
 
    { - Limits authority of Public Utility Commission to regulate
services of utilities. Describes regulated services. - }
    { - Directs commission to interpret and administer public
utility laws to accomplish specific goals relating to generating
and use of electricity and other forms of energy. - }
    { - Authorizes commission to enter into regulated service
contracts for provision of electricity or natural gas services.
Specifies terms of contracts and provides that contract govern
charges made for electricity or natural gas provided under
contract. - }
    { - Eliminates limitation on amortization of certain deferred
amounts for rate-setting purposes. - }
    { - Extends to transmission companies certain laws applicable
to electrical utilities. - }
   { +  Repeals provisions dealing with restructuring of electric
power industry. Provides for recovery of restructuring
investments by public utilities.
  Declares emergency, effective on passage. + }
 
                        A BILL FOR AN ACT
Relating to utility regulation; creating new provisions; amending
  ORS 221.450, 225.270 and 757.005; repealing ORS 221.655,
  757.600, 757.603, 757.607, 757.612, 757.617, 757.622, 757.627,
  757.629, 757.632, 757.637, 757.642, 757.646, 757.649, 757.654,
  757.656, 757.659, 757.661, 757.665, 757.667, 757.669, 757.672,
  757.676, 757.679, 757.683, 757.687 and 757.691 and sections 2
  and 18, chapter 865, Oregon Laws 1999; and declaring an
  emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + ORS 221.655, 757.600, 757.603, 757.607,
757.612, 757.617, 757.622, 757.627, 757.629, 757.632, 757.637,
757.642, 757.646, 757.649, 757.654, 757.656, 757.659, 757.661,
757.665, 757.667, 757.669, 757.672, 757.676, 757.679, 757.683,
757.687 and 757.691 and sections 2 and 18, chapter 865, Oregon
Laws 1999, are repealed. + }
  SECTION 2. ORS 221.450 is amended to read:
  221.450.   { - Except as provided in ORS 221.655, - }  The city
council or other governing body of every incorporated city may
levy and collect from every electric cooperative, people's
utility district, privately owned public utility,
telecommunications carrier as defined in ORS 133.721 or heating
company operating for a period of 30 days within the city without
a franchise from the city and actually using the streets, alleys
or highways, or all of them, in such city for other than travel
on such streets or highways, a privilege tax for the use of those
public streets, alleys or highways, or all of them, in such city
in an amount not exceeding five percent of the gross revenues of
the cooperative, utility, district or company currently earned
within the boundary of the city. However, the gross revenues
earned in interstate commerce or on the business of the United
States Government shall be exempt from the provisions of this
section. The privilege tax authorized in this section shall be
for each year, or part of each year, such utility, cooperative,
district or company operates without a franchise.
  SECTION 3. ORS 225.270 is amended to read:
  225.270. When any city which owns or operates a municipal
electric power plant or system or distributing system, has paid
principal and interest to date on all indebtedness incurred in
connection therewith, and has created and accumulated an adequate
depreciation and replacement reserve in the judgment of the
officer having control of such plant or system, the city shall,
for the purpose of reducing general property taxes within such
city, pay to itself not less than three percent of the annual
gross operating revenue of such plant or system  { - , or a
volumetric charge based upon the amounts of electricity
delivered, transmitted or distributed to retail electricity
consumers regardless of the source. The volumetric charge shall
not be less than the equivalent of three percent of the gross
operating revenues of the municipality utility in 1999. The city
shall adjust a volumetric charge to end users such that charges
established for different customer classes bear the same
approximate relationship as the gross revenues per kilowatt hour
paid by the classes in 1999 - } .
  SECTION 4.  { + Section 5 of this 2001 Act is added to and made
a part of ORS chapter 757. + }
  SECTION 5.  { + (1) After notice and opportunity for hearing,
the Public Utility Commission shall determine the amount of all
costs prudently incurred by a public utility for the acquisition,
development, operation and maintenance of investments, systems
and procedures, including arrangements with third parties, that
were necessary to comply with chapter 865, Oregon Laws 1999, that
are no longer needed by reason of the repeal of statutes by
section 1 of this 2001 Act, and that the public utility could not
mitigate through prudent action. Costs subject to the provisions
of this section include all costs of mitigation incurred by the
public utility by reason of the repeal of statutes by section 1
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 public
utility.
  (2) Notwithstanding ORS 757.355, the commission shall set rates
for public utilities to allow recovery of a public utility'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 such public utility that is
necessary or useful in the performance of the utility'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 public utility for
restructuring investments. + }
  SECTION 6. ORS 757.005 is amended to read:
  757.005. (1)(a) As used in this chapter, except as provided in
paragraph (b) of this subsection, 'public utility' means:
  (A) Any corporation, company, individual, association of
individuals, or its lessees, trustees or receivers, that owns,
operates, manages or controls all or a part of any plant or
equipment in this state for the production, transmission,
delivery or furnishing of heat, light, water or power, directly
or indirectly to or for the public, whether or not such plant or
equipment or part thereof is wholly within any town or city.  '
Public utility' includes a privately owned water utility that
provides wastewater services to the public inside the boundaries
of a city, either directly or through an affiliate, regardless of
the number of customers receiving wastewater services.
  (B) Any corporation, company, individual or association of
individuals, which is party to an oral or written agreement for
the payment by a public utility, for service, managerial
construction, engineering or financing fees, and having an
affiliated interest with the public utility.
  (b) As used in this chapter, 'public utility' does not include:
  (A) Any plant owned or operated by a municipality.
  (B) Any railroad, as defined in ORS 824.020, or any industrial
concern by reason of the fact that it furnishes, without profit
to itself, heat, light, water or power to the inhabitants of any
locality where there is no municipal or public utility plant to
furnish the same.
  (C) Any corporation, company, individual or association of
individuals providing heat, light or power:
  (i) From any energy resource to fewer than 20 customers, if it
began providing service to a customer prior to July 14, 1985;
  (ii) From any energy resource to fewer than 20 residential
customers so long as the corporation, company, individual or
association of individuals serves only residential customers;
  (iii) From solar or wind resources to any number of customers;
or
  (iv) From biogas, waste heat or geothermal resources for
nonelectric generation purposes to any number of customers.
  (D) A qualifying facility on account of sales made under the
provisions of ORS 758.505 to 758.555.
  (E) Any water utility serving less than 300 customers at an
average annual residential rate of $18 per month or less that
provides adequate and nondiscriminatory service and that does not
provide wastewater services.
  (F) Any person furnishing heat, but not delivering electricity
or natural gas to its customers, except:
  (i) As provided in ORS 757.007 and 757.009; or
  (ii) With respect to heat furnished in municipalities which on
January 1, 1989, had a municipally owned system that was
furnishing steam or other thermal forms of heat to its customers.
  (G) Notwithstanding subparagraph (F) of this paragraph, any
corporation, company, partnership, individual or association of
individuals furnishing heat to a single thermal end user from an
electric generating facility, plant or equipment that is
physically interconnected with the single thermal end user.
  (H) Any corporation, company, partnership, individual or
association of individuals that furnishes natural gas,
electricity, ethanol, methanol, methane, biodiesel or other
alternative fuel to any number of customers for use in motor
vehicles and does not furnish any utility service described in
paragraph (a) of this subsection.
    { - (I) An electricity service supplier, as defined in ORS
757.600. - }
  (2) Nothing in subsection (1)(b)(C)(iv) of this section shall
prohibit third party financing of acquisition or development by a
utility customer of energy resources to meet the heat, light or
power requirements of that customer.
  SECTION 7.  { + 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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