72nd OREGON LEGISLATIVE ASSEMBLY--2003 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 2501
 
                           A-Engrossed
 
                         House Bill 3528
                 Ordered by the House August 26
           Including House Amendments dated August 26
 
Sponsored by Representatives GALLEGOS, BUTLER; Representatives
  FARR, FLORES, PATRIDGE, SCOTT
 
 
                             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.
 
    { - Provides that amounts collected as public purpose charges
from retail electricity consumers on or after effective date of
Act and before January 1, 2008, be paid into General Fund. - }
    { - Eliminates public purpose charge January 1, 2008. - }
    { - Takes effect on 91st day following adjournment sine
die. - }
   { +  Transfers oversight of expenditure of moneys generated by
public purpose charges from Public Utility Commission to Office
of Energy. + }
 
                        A BILL FOR AN ACT
Relating to public purpose charges; creating new provisions; and
  amending ORS 757.612.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. 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 March 1,
2002, 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 - }   { + Office of
Energy + } 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  { + Public
Utility + } 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 - }  { +  Office of Energy + } 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 - }  { +  Office of Energy + } 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 component school districts of the
education service district for the prior fiscal year as
calculated under ORS 327.013. The   { - commission - }  { +
Office of Energy + } 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  { + Public Utility + } 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  { + Public Utility + } 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 or to provide a
commercial energy conservation services program and is not
subject to ORS 469.631 to 469.645, 469.860 to 469.900 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 October 1,
2001, - }  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 per
year. The  { + Public Utility + } 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  { + Public Utility + }
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 October 1, 2001,
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) - }   { + (8) + } 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 2.  { + As soon as possible after the effective date of
this 2003 Act, the Office of Energy shall determine whether the
Office of Energy will administer spending of public purpose
charges imposed under ORS 757.612 through a nongovernmental
entity under the provisions of ORS 757.612 (3)(d). The Office of
Energy shall thereafter promptly inform the Public Utility
Commission of the office's determination. If the Office of Energy
determines that the office will not administer spending of public
purpose charges through a nongovernmental entity, or will
administer spending of public purpose charges through a
nongovernmental entity other than the entity performing that
function on the effective date of this 2003 Act, the Public
Utility Commission shall immediately take all steps necessary to
terminate any agreement entered into between the commission and
the nongovernmental agency. If the Office of Energy determines
that the office will continue to administer spending of public
purpose charges through the nongovernmental entity performing
that function on the effective date of this 2003 Act, the Public
Utility Commission shall immediately take all steps necessary to
substitute the Office of Energy for the commission as a party to
the agreement entered into between the commission and the
nongovernmental agency. + }
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