Chapter 807
AN ACT
SB 443
Relating to electric utilities; creating new
provisions; amending ORS 221.420, 221.450, 287.025, 757.511 and 757.612;
appropriating money; and declaring an emergency.
Be It Enacted by the People of
the State of
(Definitions)
SECTION 1. As used in sections 1, 2 and 3 to 39 of this
2007 Act:
(1) “Board” means the
board of directors of
(2) “Incumbent utility”
means an investor-owned utility that is the subject of a transaction described
in section 2 of this 2007 Act.
(3) “Investor-owned
utility” means a utility that sells electricity and that is operated by a
corporation with shareholders.
(4) “Rate” has the
meaning given that term in ORS 756.010.
(5) “Service” has the
meaning given that term in ORS 756.010.
(6) “Service territory”
means the geographic area within which a utility provides electricity to
customers.
(Acquisition Review Committee)
SECTION 2. Creation of acquisition review committee.
(1)(a) Except as provided in subsection (9) of this section, the Public Utility
Commission shall give notice to the cities and counties specified in paragraph
(b) of this subsection whenever the commission receives notice of a proposed
transaction under ORS 757.511 (2):
(A) Relating to an
investor-owned utility for which approval of the Public Utility Commission is
required under ORS chapter 757; and
(B) Involving the sale
of 50 percent or more of the voting shares of the utility to a person that is
not an affiliated interest with the utility as defined in ORS 757.015.
(b) Notice under
subsection (1) of this section shall be given to a city or county if the
investor-owned utility that is the subject of the proposed transaction has
service territory within the boundaries of the city or county.
(2) Upon receiving
notice under subsection (1) of this section, each city or county may appoint a
member to an acquisition review committee formed to represent the affected
cities and counties. An acquisition review committee must be formed not more
than 60 days after notice is given by the commission under subsection (1) of
this section. If an acquisition review committee is not formed within 60 days
after notice is given by the commission under subsection (1) of this section,
the commission shall proceed with any application made under ORS 757.511 for
approval of the transaction.
(3) An acquisition
review committee formed under this section shall consider a proposed
transaction described in subsection (1) of this section for the purpose of
determining whether:
(a) Acquisition of the
investor-owned utility by
(b) Acquisition of the
utility can be accomplished in a manner that is consistent with the policy
described in section 27 of this 2007 Act.
(4) An acquisition
review committee created under this section may decide to enter into
negotiations for the acquisition of an investor-owned utility that is the subject
of a proposed transaction described in subsection (1) of this section only by
the affirmative vote of members of the committee representing counties in which
reside not less than two-thirds of the customers with billing accounts that are
served by the incumbent utility, and the affirmative vote of members of the
committee representing cities in which reside not less than two-thirds of the
customers with billing accounts that are served by the incumbent utility. If an
acquisition review committee determines that negotiations should commence, the
committee shall:
(a) Enter into
negotiations with the incumbent utility or persons that have authority to
negotiate the disposition of the incumbent utility or the electric utility
assets of the incumbent utility; and
(b) If the negotiations
result in an agreement between the committee and the incumbent utility or
persons described in paragraph (a) of this subsection, the committee shall
immediately give notice to the commission and file an application with the
commission under ORS 757.511 for approval of the transaction.
(5) An acquisition
review committee created under this section may decide to acquire an
investor-owned utility under subsection (4) of this section only by the
affirmative vote of members of the committee representing counties in which
reside not less than two-thirds of the customers with billing accounts that are
served by the incumbent utility, and the affirmative vote of members of the
committee representing cities in which reside not less than two-thirds of the
customers with billing accounts that are served by the incumbent utility. An
acquisition review committee may vote to acquire an incumbent utility under
this subsection only after public notice and consultation with groups representing
customers of the incumbent utility.
(6) An acquisition
review committee must complete negotiations and vote to enter into an agreement
not more than 150 days after notice is given to cities and counties under
subsection (1) of this section. If the incumbent utility agrees in writing, the
committee may request that the time limitation imposed by this section be
extended by 90 days.
(7) If the commission
approves acquisition of the incumbent utility by
(8) An acquisition
review committee shall give notice to the commission immediately if the
committee proposes to dissolve or decides not to enter into negotiations under
subsection (4) of this section or if negotiations do not result in an
agreement.
(9) The commission may
not give notice to cities and counties under subsection (1) of this section if
a person providing notice of a proposed transaction under ORS 757.511 (2) also
provides to the commission written consent forms signed by persons with
authority to act on behalf of counties in which reside not less than two-thirds
of the customers with billing accounts that are served by the incumbent utility
and on behalf of cities in which reside not less than two-thirds of the
customers with billing accounts that are served by the incumbent utility.
(10) An acquisition
review committee may enter into an agreement for the acquisition of an
incumbent utility or the electric utility assets of the incumbent utility only
if the committee obtains approval for the acquisition from the appropriate
state agencies in all states in which the incumbent utility serves retail
electricity consumers.
(11) Notwithstanding any
other provision of law,
(a) The costs of
acquiring the electric utility assets of the incumbent utility;
(b) The costs of
acquiring any necessary generating capacity and transmission capacity dedicated
to serving the customers in the service area that will be acquired, including
but not limited to electricity generating assets and alternate energy
generating assets under construction but not yet in service;
(c) Depreciation;
(d) Loss of revenue to
the incumbent utility; and
(e) All electric utility
assets necessary to reintegrate the system of the incumbent utility after
detaching the portion of the utility acquired by Oregon Community Power.
SECTION 2a. ORS 757.511 is amended to read:
757.511. (1) No person,
directly or indirectly, shall acquire the power to exercise any substantial
influence over the policies and actions of a public utility which provides
heat, light or power without first securing from the Public Utility Commission,
upon application, an order authorizing such acquisition if such person is, or
by such acquisition would become, an affiliated interest with such public
utility as defined in ORS 757.015 (1), (2) or (3).
(2) Notice must be
given to the commission of an application under this section at least 60 days
before the application is filed with the commission. The notice must indicate
whether the transaction is a transaction described in section 2 (1) of this
2007 Act. If the transaction is a transaction as described in section 2 (1) of
this 2007 Act, the commission shall give notice to cities and counties as
required by section 2 (1) of this 2007 Act.
[(2)] (3) The application required
by subsection (1) of this section shall set forth detailed information
regarding:
(a) The applicant’s
identity and financial ability;
(b) The background of
the key personnel associated with the applicant;
(c) The source and
amounts of funds or other consideration to be used in the acquisition;
(d) The applicant’s
compliance with federal law in carrying out the acquisition;
(e) Whether the
applicant or the key personnel associated with the applicant have violated any
state or federal statutes regulating the activities of public utilities;
(f) All documents
relating to the transaction giving rise to the application;
(g) The applicant’s
experience in operating public utilities providing heat, light or power;
(h) The applicant’s plan
for operating the public utility;
(i) How the acquisition
will serve the public utility’s customers in the public interest; and
(j) Such other
information as the commission may require by rule.
[(3)] (4) The commission promptly shall examine and
investigate each application received pursuant to this section.[and] Except as provided in subsection
(5) of this section, the commission shall issue an order disposing of the
application within 19 business days of its receipt. If the commission
determines that approval of the application will serve the public utility’s
customers in the public interest, the commission shall issue an order granting
the application. The commission may condition an order authorizing the
acquisition upon the applicant’s satisfactory performance or adherence to
specific requirements. The commission otherwise shall issue an order denying
the application. The applicant shall bear the burden of showing that granting
the application is in the public interest.
(5) The commission
may postpone issuance of an order disposing of an application under this
section if notice has been given to cities and counties under section 2 (1) of
this 2007 Act. In no event may the commission postpone issuance of an order
disposing of the application for more than 90 days under the provisions of this
subsection.
[(4)] (6) Nothing in this section shall prohibit
dissemination by any party of information concerning the acquisition so long as
such dissemination is not otherwise in conflict with state or federal law.
(
SECTION 3.
(2)
(3) The primary mission
of
SECTION 4. Laws applicable to
(2) Except as otherwise
provided by law, the provisions of ORS chapters 182, 183, 238, 238A, 240, 270,
273, 276, 279A, 279B, 279C, 283, 286, 291, 292, 293, 294, 295 and 297 and ORS
35.550 to 35.575, 183.710 to 183.725, 183.745, 183.750, 184.305 to 184.345,
190.430, 190.480, 190.490, 192.105, 200.035, 236.380, 243.105 to 243.585,
243.696, 278.011 to 278.120, 278.315 to 278.415, 279.835 to 279.855, 282.010 to
282.150, 287.006, 287.452, 288.150 to 288.165, 288.600, 288.815 and 656.017 (2)
do not apply to Oregon Community Power.
(3)
(4) Any funds held by or
under the control of
SECTION 5. Regulatory authority of
Public Utility Commission over
(2) In addition to
having the authority granted the commission under subsection (1) of this
section, the commission has the authority to:
(a) Regulate electricity
service suppliers that conduct business with or use the facilities of
(b) Determine a claim by
an electricity service supplier that
(c) Take action against
(3)
(4) As used in this
section, “direct access” and “electricity service supplier” have the meanings
given those terms in section 28 of this 2007 Act.
(Board of Directors)
SECTION 6. Nominating committee.
(1) There is established the
(2) The nominating
committee shall consist of five members, as follows:
(a) One member shall be
a delegate from the Citizens’ Utility Board and shall represent the interests
of residential electricity consumers.
(b) One member shall be
a delegate from a qualified organization that represents the interests of
primarily commercial electricity consumers.
(c) One member shall be
a delegate from a qualified organization that represents the interests of
primarily industrial electricity consumers.
(d) One member shall be
a delegate from the League of Oregon Cities and shall represent the interests
of municipalities and their residents.
(e) One member shall be
a delegate from the Association of Oregon Counties and shall represent the
interests of counties and their residents.
(3) Of the members
described in subsection (2)(d) and (e) of this section, one shall be from a
local government that is within the service territory of Oregon Community Power
and one shall be from a local government that is outside of the service
territory of Oregon Community Power.
(4)(a) In order for the
nominating committee to convene, the board of directors of Oregon Community
Power shall prepare a proposed direction to convene as soon as is practicable
following the earlier of the date that a vacancy occurs on the board or the
date that it becomes known that a vacancy on the board will occur within six
months.
(b) The proposed
direction to convene shall state the qualified organizations that are to
provide the delegates described in subsection (2)(b)
and (c) of this section. The board shall send copies of the proposed direction
to the Public Utility Commission and to each organization that served as a
qualified organization at a prior convening of the nominating committee.
(c) Within 15 days after
receipt of the proposed direction to convene, the commission shall review the
proposed direction. The commission shall afford the opportunity for a hearing
if requested by any party. If the proposed direction lists organizations that
meet the qualifications of subsection (2)(b) and (c)
of this section, the commission shall approve the direction. If the proposed
direction does not list organizations that are qualified organizations under
subsection (2)(b) and (c) of this section, the
commission may modify the direction prior to approval. A determination by the
commission may be appealed as a contested case under ORS chapter 183.
(5) The nominating
committee shall convene as soon as is practicable after receiving an approved
direction to convene under subsection (4) of this section, and shall forward
the first slate of nominees to the Governor for consideration under section 8
of this 2007 Act no later than 90 days after the date an approved direction to
convene is issued.
(6) The nominating
committee shall nominate three individuals for each position on the board to be
filled.
(7) A nominating
committee that has been convened shall remain convened until each vacant
position on the board is filled. The nominating committee shall forward a
second slate of nominees to the Governor if requested by the Governor under
section 8 (2) of this 2007 Act.
(8) In forwarding nominees
to the Governor, the nominating committee shall strive to select individuals
who:
(a) Meet the
qualifications described in section 8 (6) of this 2007 Act;
(b) If appointed, would
result in a board of directors that represents the geographic diversity of
(c) Have the ability and
experience to fulfill the principal duties of the board under section 18 of
this 2007 Act.
(9) As used in this
section, “qualified organization” means a nonprofit organization that
represents a broad class of commercial or industrial customers and that has a
substantial record of representing the class before state agencies or the
Legislative Assembly in matters related to public utility rates, terms and
conditions and energy policy issues affecting the class.
SECTION 7. Initial nominating
committee. (1) Notwithstanding section 6 of this 2007 Act,
the Governor shall convene the initial
(2) The nominating
committee shall forward the first slate of nominees to the Governor for
consideration under section 8 of this 2007 Act within 30 days following the
convening of the committee by the Governor.
(3) If necessary, the
nominating committee shall forward a second slate of nominees to the Governor
for consideration within 10 days after the Governor’s request for a second
slate of nominees under section 8 (2) of this 2007 Act.
(4) For purposes of
section 6 (3) of this 2007 Act, the service territory of the incumbent utility
is considered to be the service
SECTION 8. Board of directors.
(1)
(2)(a) Prior to making
any appointment to the board, the Governor shall consider the nominations of
the
(b) If the Governor
reviews an initial slate of nominees made by the nominating committee and
determines not to appoint a nominee, the Governor shall request that the
nominating committee forward a second slate of nominees. If the Governor
determines not to appoint a nominee from the second slate of nominees, the
Governor may appoint any individual the Governor determines meets the
qualifications of subsection (6) of this section.
(3) Notwithstanding the
requirement that the Governor consider the nominations of the nominating
committee prior to making an appointment, the Governor shall appoint an
individual to be a board member within 120 days following the vacancy of a
position on the board.
(4) Each appointment
shall be subject to confirmation by the Senate in the manner prescribed in ORS
171.562 and 171.565.
(5) The term of office
for each board member shall be four years. A board member may be nominated
and appointed to successive terms, but within 150 days prior to the expiration
of the term of the member, the board shall issue a proposed direction to
convene the nominating committee under section 6 of this 2007 Act for the
purpose of nominating individuals to fill the board position.
(6) A member of the
board shall have significant experience or expertise in one or more of the
following areas:
(a) Business operations;
(b) Utility management;
(c) Legal or financial
affairs;
(d) Regional energy
issues; or
(e) Developing public
policy.
(7) The Governor may
remove any member of the board for cause, after notice and public hearing.
SECTION 9. Initial terms of
directors. (1) Notwithstanding section 8 (5) of this 2007
Act, the term of office for the first board of directors of
(a) Two members shall be
appointed for a term that ends one year following the date the Governor
convenes the board;
(b) Two members shall be
appointed for a term that ends two years following the date the Governor
convenes the board;
(c) Two members shall be
appointed for a term that ends three years following the date the Governor
convenes the board; and
(d) One member shall be
appointed for a term that ends four years following the date the Governor
convenes the board.
(2) Consistent with
subsection (1) of this section, the Governor shall designate the duration of
the term of office of each member of the first board of directors at the time
the Governor convenes the board.
SECTION 10. Board meetings and
procedures. (1) The board of directors of
(2) A majority of board
members shall constitute a quorum.
(3) The board shall
select one of its members as chairperson.
(4) The board shall
adopt bylaws establishing rules of procedure for board meetings and decisions.
(5) A member of the
board shall be compensated as provided in section 20 (12) of this 2007 Act.
(6) The board, not later
than April 15 of each year, shall file a report with the Governor and the
Legislative Assembly. The report shall explain the activities and operations of
(Acquisition of Incumbent Utility)
SECTION 11. Acquisition of
incumbent utility; use of eminent domain. (1) As soon as
practicable after being appointed, the board of directors of Oregon Community
Power shall implement the agreement entered into by an acquisition review
committee under section 2 (4)(b) of this 2007 Act.
(2) Notwithstanding
section 21 (1) of this 2007 Act, Oregon Community Power may not use the power
of eminent domain to accomplish all or a part of an acquisition described in
subsection (1) of this section unless the incumbent utility or the persons that
have the authority to negotiate the disposition of the incumbent utility or the
electric utility assets of the incumbent utility consent to the use of eminent
domain for acquisition purposes.
SECTION 12. Funding of preliminary
activities and negotiations. (1) Following a request by an
acquisition review committee under section 14 of this 2007 Act, the Public
Utility Commission shall transfer from the Public Utility Commission Account to
the Oregon Community Power Utility Acquisition Fund established under section
13 of this 2007 Act all amounts necessary to fund any preliminary activities
needed to determine:
(a) The appropriateness
or desirability of an acquisition described in sections 1, 2 and 3 to 39 of
this 2007 Act;
(b) The requirements and
terms of the acquisition; and
(c) Any due diligence
activities related to the acquisition and the negotiations for the acquisition.
(2) Notwithstanding any
other provision of law, the commission may increase the rates of an incumbent
utility in order to recover the costs incurred in negotiating an acquisition by
an acquisition review committee under section 2 (4) of this 2007 Act.
(3) Notwithstanding any
other provision of law, the commission may assess a fee on an incumbent utility
in order to fund the transfer described in subsection (1) of this section.
SECTION 13.
(2) Moneys in the Oregon
Community Power Utility Acquisition Fund are continuously appropriated to the
Public Utility Commission for the purpose of transferring moneys to an
acquisition review committee as described in section 12 of this 2007 Act.
SECTION 14. Request to Public
Utility Commission for transfer of funds. (1) An acquisition
review committee created under section 2 of this 2007 Act may request that the
Public Utility Commission transfer moneys appropriated under section 13 of this
2007 Act in order to fund any preliminary activities the committee undertakes
to determine:
(a) The appropriateness
or desirability of an acquisition described in sections 1, 2 and 3 to 39 of
this 2007 Act;
(b) The requirements and
terms of the acquisition; and
(c) Any due diligence
activities related to the acquisition and the negotiations for the acquisition.
(2) An acquisition
review committee shall submit a budget and plan of operations with a request
under subsection (1) of this section. The commission may approve the transfer
only after notice and public hearing on the request.
SECTION 15. Conduct of business after acquisition.
If Oregon Community Power acquires an incumbent utility under sections 1, 2 and
3 to 39 of this 2007 Act, all electric utility operations undertaken by Oregon
Community Power after the acquisition shall be conducted under the name of
Oregon Community Power.
SECTION 16.
(a) Allocation of
territory and contracts allocating territory;
(b) City franchise fee
agreements; and
(c) Contracts or
obligations of any nature, to the extent the contracts or obligations apply to
a successor in interest to the incumbent utility.
(2) Until the board of
directors of Oregon Community Power establishes bylaws governing the procedures
for conducting a ratemaking hearing and establishing rates under sections 1, 2
and 3 to 39 of this 2007 Act and under those procedures establishes one or more
new rates or tariffs or establishes one or more changes in rates or tariffs,
Oregon Community Power shall:
(a) Adopt all existing
rate schedules in effect for the incumbent utility on the date of acquisition;
(b) Adopt the general
rules and regulations of the incumbent utility’s tariffs; and
(c) Maintain Oregon
Community Power books and records in accordance with generally accepted
accounting principles and with the uniform system of accounts established by
the Federal Energy Regulatory Commission.
(3) If Oregon Community
Power acquires an incumbent utility under sections 1, 2 and 3 to 39 of this
2007 Act, Oregon Community Power is subject to all privilege taxes imposed by
municipalities that the incumbent utility was required to pay to municipalities
immediately before the acquisition.
SECTION 17. Equity and assets of incumbent utility
held in trust; disclaimer of state interest. (1) Any equity of the
incumbent utility, any electric utility assets of the incumbent utility or any
combination of equity and assets of the incumbent utility that Oregon Community
Power acquires under sections 1, 2 and 3 to 39 of this 2007 Act shall be held
in trust by Oregon Community Power, acting as a trustee, for the exclusive
purpose of carrying out the powers, rights and privileges of Oregon Community
Power under sections 1, 2 and 3 to 39 of this 2007 Act for the benefit of the
retail electricity consumers of Oregon Community Power. Notwithstanding any
other provision of law, retail electricity consumers of Oregon Community Power
may not pursue any judicial remedy in any court of this state for any action of
Oregon Community Power, except as provided in sections 1, 2 and 3 to 39 of this
2007 Act.
(2) The State of
(3) Except as provided
in sections 1, 2 and 3 to 39 of this 2007 Act, Oregon Community Power may not
receive any moneys from the State of Oregon other than:
(a) Electric utility
operational revenues;
(b) Public purpose
charge revenues under ORS 757.612;
(c) Nonrecourse bond
proceeds or proceeds from any other nonrecourse borrowing; or
(d) Loans, grants,
payments or other assistance that any local government as defined in ORS
174.116 would be eligible to receive.
(Duties and Powers of
SECTION 18. Board duties.
The principal duties of the board of directors of
(1) Establish policy and
develop consistent positions on core utility issues that promote and implement
the primary mission of
(2) Oversee
the investments and operations of
(3) Take all actions to
ensure that revenues and income from electric utility operations are sufficient
to satisfy all costs, including principal and interest payments on all
outstanding bonds and other debt obligations issued by Oregon Community Power,
and to maintain financial integrity in the operation of Oregon Community Power;
(4) Make decisions that
are in the best interests of the consumers and communities within the service
territory of Oregon Community Power and that are consistent with the primary
mission of Oregon Community Power; and
(5) Consider the social,
economic and environmental impacts of electricity generation, transmission and
distribution in board decision-making.
SECTION 19. Payments in lieu of
property taxes. (1)
(2) The Department of
Revenue shall determine the assessed value of
(3) The amount of the in
lieu payment to be made to each county under this section shall be determined
and certified annually by the county assessor of the county. A notice of the
determination and certification shall be mailed to
SECTION 20. Powers of
(1) To acquire and hold,
including by lease-purchase agreement, real and other property necessary or
incident to the business of Oregon Community Power, within or outside of, or
partly within or partly outside of, the service territory of Oregon Community
Power, and to sell or dispose of that property.
(2) To execute contracts
to purchase, sell or lease assets, power, services or property.
(3) To execute contracts
for the management or operation of any
(4) To issue bonds,
notes or otherwise borrow moneys, incur indebtedness or issue, sell or assume
evidence of indebtedness to the extent allowed under the
(5) To sue and be sued.
(6) To refund and retire
any indebtedness that may exist against or be assumed by
(7) To build, acquire,
own, operate and maintain generation, transmission and distribution resources that are sufficient to maintain an adequate supply of
electricity to the service territory.
(8) To enter into
agreements with local governments or other state agencies or subdivisions of
state government.
(9) To periodically
develop least-cost plans at regular intervals. A least-cost plan may be
developed only with public participation. A least-cost plan shall take into
consideration economic and environmental risks of providing adequate and
reliable energy for consumers, energy efficiency, renewable resources and
cogeneration, in order to achieve adequate resources at the least overall cost.
(10) To oversee all
aspects of
(11) To hire and fire
employees of
(12) To make contracts,
to set wages, to set salaries and provide compensation for services rendered by
employees and by board members, to provide for life insurance, hospitalization,
disability, health and welfare and retirement plans for employees and to do all
things necessary and convenient for full exercise of the powers granted in this
subsection. The provision of life insurance, hospitalization, disability,
health and welfare and retirement plans for employees is in addition to any
other right or power of Oregon Community Power to participate in those plans
and does not repeal or modify any statutes except those that may be in conflict
with the provision of life insurance, hospitalization, disability, health and
welfare and retirement plans.
(13) To enter into
contracts with the United States Government, with any other state, municipality
or utility district or with any other person, for carrying out any provisions
of sections 1, 2 and 3 to 39 of this 2007 Act.
(14) To fix, maintain
and collect electric energy rates as prescribed in sections 1, 2 and 3 to 39 of
this 2007 Act and to establish and collect charges for any other commodity or
service furnished, developed or sold by Oregon Community Power.
(15) To construct works
across or along any street or public highway or over any lands that are the
property of this state, or of any city or other subdivision of this state,
subject to any franchise agreement, privilege tax or municipal regulation that
would apply to the works, and to construct works across or along any stream of
water or watercourse. Any works across or along any state highway shall be
constructed only with the permission of the Department of Transportation. Any
works across or along any county highway shall be constructed only with the
permission of the county governing body. Any works across or along any city
street shall be constructed only with the permission of the city governing body
and upon compliance with applicable city regulations and payment of any fees
called for under applicable franchise agreements, intergovernmental agreements
under ORS chapter 190 or contracts providing for payment of these fees.
(16) To enter into
franchise agreements with cities and pay fees under negotiated franchise
agreements, intergovernmental agreements under ORS chapter 190 and contracts
providing for the payment of such fees, and to pay privilege taxes imposed
under ORS 221.450 or other applicable privilege taxes.
(17) To exercise the
power of eminent domain, as prescribed in section 11 or 21 of this 2007 Act.
(18) To adopt bylaws as
prescribed in section 26 of this 2007 Act.
(19) To make payments in
lieu of property taxes as prescribed in section 19 of this 2007 Act.
(20) To acquire
property, execute contracts or otherwise conduct business with or within the
territory of any state or local government that is outside Oregon, any Indian
tribe wherever located or Canada or any province of Canada.
(21) To execute any
contract necessary to acquire, hedge or sell fuel or energy in any form, to
manage electric utility operations, to construct, maintain or repair any energy
generation or transmission facilities or equipment, to increase capacity for
energy generation or transmission, to transfer any asset owned by Oregon
Community Power or to acquire any asset for use in electric utility operations
conducted by Oregon Community Power.
(22) To establish any
funds or accounts at depository banks or other financial institutions that are
determined to be necessary, useful or convenient for the conduct of business by
(23) To take any other
actions necessary or convenient for the proper exercise of the powers granted
to
SECTION 21. Eminent domain.
(1)
(2) Notwithstanding
subsection (1) of this section, eminent domain may not be used:
(a) To acquire service
territory of another electric utility; or
(b) To acquire any
property for a purpose that is unrelated to electric utility operations.
(Rates)
SECTION 22. Ratemaking.
(1) The board of directors of
(2) The board shall
establish a rate structure under which rates that apply to a specific class of
customers are designed to recover the costs of providing electricity and
related services to that class of customers.
(3) The rates adopted by
the board shall be sufficient to accomplish the following purposes:
(a) To properly maintain
and operate all
(b) To recover the
overall costs of the electric utility operations of
(c) To reflect the
income tax exempt status of
(d) To pay all franchise
fees, in lieu payments, privilege taxes and other charges and assessments that
are properly imposed on Oregon Community Power or the property or facilities of
Oregon Community Power;
(e) To pay principal and
interest on all bonds, warrants or other obligations of any character in
accordance with the terms and provisions of the obligations, including but not
limited to bonds issued by Oregon Community Power for an acquisition described
in sections 1, 2 and 3 to 39 of this 2007 Act;
(f) To pay any other
indebtedness or obligation for which
(g) To pay any debt
administration costs associated with bonds, warrants, obligations or other
indebtedness described in paragraphs (e) and (f) of this subsection;
(h) To fund operating
reserves in sufficient amounts to ensure the continued efficient operation of
(i) To establish and
maintain any special funds that
SECTION 23. Notice of ratemaking;
ratemaking hearings. (1) Whenever the board of directors of
(a) In newspapers of
general circulation that are published in the service territory;
(b) As a separate insert
accompanying billing statements sent to customers;
(c) To persons that have
requested notice of ratemaking action by the board; and
(d) By publication on
the
(2) The notice shall
state:
(a) The date, time and
location of the ratemaking hearing of the board;
(b) The new rates or
modifications to existing rates being proposed by the board; and
(c) Any other
information deemed relevant by the board.
(3) At the time that the
board issues a notice of a ratemaking hearing, the board shall publish on the
Oregon Community Power website or otherwise make available to the public the
underlying utility information upon which the proposed rates are based. The
board shall provide the specific information required by bylaws adopted under
section 26 (1) of this 2007 Act.
(4)(a) Pursuant to ORS
183.625, the board shall request, and the Office of Administrative Hearings
shall assign, an administrative law judge to conduct the ratemaking hearing.
The ratemaking hearing shall be conducted under ratemaking hearing procedures
established by bylaws adopted under section 26 (2) of this 2007 Act. The
hearing shall be conducted in a manner that allows interested parties to
present information and argument and to establish a record upon which the board
may establish or modify rates pursuant to section 22 of this 2007 Act.
(b) The administrative
law judge shall ensure that the rates established at the ratemaking hearing are
sufficient to accomplish all of the purposes described in section 22 (3) of
this 2007 Act.
(5) Notwithstanding
section 4 of this 2007 Act, a decision by the board to establish or modify
rates may be appealed as a contested case under ORS chapter 183.
(Participation by Citizens’ Utility Board)
SECTION 24. (1) Whenever the Citizens’ Utility Board of
Governors determines that an Oregon Community Power proceeding may affect the
interests of utility consumers, the Citizens’ Utility Board may intervene as of
right as an interested party or otherwise participate in the proceeding.
(2) The Citizens’
Utility Board shall have standing to obtain judicial or administrative review
of any action of Oregon Community Power, and may intervene as of right as an
interested party or otherwise participate in any proceeding that involves the
review or enforcement of any action by Oregon Community Power, if the Citizens’
Utility Board of Governors determines that the action may affect the interests
of utility consumers.
(Audits)
SECTION 25. The board of directors of
(Bylaws)
SECTION 26. The board of directors of
(1) Bylaws establishing
the information the board must make available to the public prior to conducting
a ratemaking hearing.
(2) Bylaws establishing
procedures for conducting a ratemaking hearing that provide for substantially
the same procedures as set forth in ORS 183.415, 183.425, 183.440 and 183.450.
(3) Bylaws to facilitate
the implementation of the primary mission of
ELECTRICITY FROM
BONNEVILLE POWER ADMINISTRATION
SECTION 27. (1) The Legislative Assembly declares that
it is the policy of the State of
(a) Ensure that the
formation and operation of Oregon Community Power does not directly or
indirectly diminish the amount of federal electric power available for purchase
by consumer-owned utilities to serve their retail electricity consumers;
(b) Ensure that the
formation and operation of Oregon Community Power does not, directly or
indirectly, increase the lowest cost-based rates charged by the Bonneville
Power Administration to consumer-owned utilities for the purchase of federal
electric power above the level that would most likely have been charged absent
the formation and operation of Oregon Community Power;
(c) Preserve the
existing exclusive distribution rights of consumer-owned utilities;
(d) Ensure the
preservation of contract rights currently existing between consumer-owned
utilities and an incumbent utility;
(e) Preserve the
authority of cities to impose franchise fees and privilege taxes and to execute
contracts with
(f) Ensure that Oregon
Community Power has access to benefits from the Bonneville Power
Administration, as mandated by the federal Pacific Northwest Electric Power
Planning and Conservation Act, that are equivalent to the benefits received by
the incumbent utility at the time the utility is acquired by Oregon Community
Power.
(2) As used in this
section, “federal electric power” means electricity generated, distributed or
sold by the Bonneville Power Administration.
DIRECT ACCESS
SECTION 28. Definitions.
As used in sections 28 to 33 of this 2007 Act:
(1) “Ancillary services”
has the meaning given that term in ORS 757.600.
(2) “Direct access”
means the ability of a retail electricity consumer to purchase electricity and
ancillary services, as determined by the board of directors of
(3) “Economic utility
investment” means all investments, including plants and equipment and
contractual or other legal obligations, made by Oregon Community Power and
properly dedicated to generation or conservation, the full benefits of which
are no longer available to consumers as a result of electing direct access,
absent transition credits.
(4) “Electricity,” “electricity
services” and “electricity service supplier” have the meanings given those
terms in ORS 757.600.
(5) “Nonresidential
electricity consumer” means a retail electricity consumer that is not a
residential electricity consumer.
(6) “Portfolio access”
means the ability of a retail electricity consumer to choose from a set of
product and pricing options for electricity determined by the board and may
include product and pricing options offered by Oregon Community Power or by an
electricity service supplier.
(7) “Retail electricity
consumer” means the end user of electricity for specific purposes that is
served through the distribution system of
(8) “Transition charge”
and “transition credit” have the meanings given those terms in ORS 757.600.
(9) “Uneconomic utility
investment” means all investments, including plants and equipment and
contractual or other legal obligations, made by Oregon Community Power and
properly dedicated to generation, conservation and workforce commitments, the
full costs of which are no longer recoverable as a result of direct access,
absent transition charges.
SECTION 29.
(2) Unless the board of
directors of
(3)(a)
(b) The board shall
establish reasonable terms and conditions for providing default service to a
nonresidential electricity consumer in circumstances in which the consumer is
receiving electricity services through direct access and elects instead to
receive electricity services through the default service.
(4)(a)
(b) A retail electricity
consumer that is eligible for direct access may voluntarily aggregate its
electricity load with the electricity load of any other retail electricity
consumer that is eligible for direct access.
SECTION 30. Rights of electricity service suppliers.
(1) Every electricity service supplier is authorized to use the distribution
facilities of
(2)
(a) Electricity service
suppliers and retail electricity consumers access to the Oregon Community Power
transmission facilities and distribution system that is comparable to that
provided for Oregon Community Power’s own use; and
(b) Electricity service
suppliers and retail electricity consumers timely access to information about
the Oregon Community Power transmission facilities and distribution system,
metering and loads comparable to that provided to Oregon Community Power’s own
nondistribution divisions, affiliates and related parties.
(3)
SECTION 31. Transition credits and
charges. (1) Each retail electricity consumer of
(2) The total of all
transition credits or transition charges shall equal the net value of all
economic utility investments and all uneconomic utility investments of
(3) The board of
directors of
(a) Auction;
(b) Administrative
valuation; or
(c) Ongoing valuation.
(4) The transition
credit or transition charge that applies to a retail electricity consumer under
this section may change to reflect the duration of the service option chosen by
the consumer, but may not be changed because of the electricity service
supplier chosen by the consumer.
SECTION 32. Portfolio access to
electricity service providers. The board of directors of
(1) The quality and
nature of electricity services, including but not limited to different product
and pricing options, that will be made available to its retail electricity
consumers.
(2) The extent to which
products and services will be unbundled and the rates, tariffs, terms and
conditions on which they may be offered.
(3) Whether one or more
pilot programs for direct access, portfolio access or other forms of access to
alternative suppliers will be offered.
(4) The degree to which
provision of portfolio access necessitates modification of transition credits,
transition charges and the net value described in section 31 (2) of this 2007
Act on which transition credits or transition charges are based.
(5) The establishment of
technical capability requirements, financial responsibility requirements and
other protections for retail electricity consumers located within the
(6) Access to or use of
the
(7)
CONSUMER-OWNED UTILITIES
SECTION 33. Distribution rights;
service territories. (1) Notwithstanding any other provision
of law, a consumer-owned utility has exclusive distribution rights, to the
extent the distribution rights are provided by law other than sections 1, 2 and
3 to 39 of this 2007 Act, and exclusive responsibility for the performance and
oversight of:
(a) The utility’s
distribution system, including the acquisition, construction, financing,
operation and maintenance of distribution facilities; and
(b) Metering, billing,
collection and consumer response functions related to the distribution of
electricity to retail electricity consumers located within the utility’s
service territory.
(2) Sections 1, 2 and 3
to 39 of this 2007 Act do not:
(a) Diminish or enlarge
the rights of any person under ORS 758.400 to 758.475; or
(b) Affect the
administration or enforcement of ORS 758.400 to 758.475.
FINANCING AGREEMENTS
SECTION 34. As used in sections 34 to 38 of this 2007
Act:
(1) “Credit enhancement
agreement” means any agreement or contractual relationship between Oregon
Community Power and any bank, trust company, insurance company, surety bonding
company, pension fund or other financial institution providing additional
credit on or security for a financing agreement or certificates of participation
authorized by sections 34 to 38 of this 2007 Act.
(2) “Financing agreement”
means a bond, installment sale agreement, loan agreement, note, note agreement,
short-term promissory note, commercial paper, line of credit or similar
obligation or any other agreement to finance real or personal property,
tangible or intangible, that is or will be owned and operated by Oregon
Community Power, to otherwise borrow money, or to refinance previously executed
financing agreements.
SECTION 35. (1)
(2)
(3) Any obligation of
any kind incurred by
SECTION 36. The board of directors of Oregon Community
Power may delegate to any board member, or to the chief executive officer,
president, general manager or chief financial officer of Oregon Community
Power, the authority to determine maturity dates, principal amounts, redemption
provisions, interest rates or methods for determining variable or adjustable
interest rates, denominations, methods of sale, agreements for the exchange of
interest rates as an issuer under ORS 287.025 and other terms and conditions of
a financing agreement that are not appropriately determined at the time of
enactment or adoption of a resolution authorizing the execution of the
financing agreement. The board may also delegate entering into a financing
agreement or any other instrument authorized by law. This delegated authority
shall be exercised subject to applicable requirements of law and any
limitations and criteria as may be set forth in the resolution authorizing the
execution of a financing agreement or in
SECTION 37.
(1) Enter into agreements
with third parties to hold financing agreement proceeds, payments and reserves
as security for lenders, and to issue certificates of participation in the
right to receive payments due from
(2) Enter into credit
enhancement agreements for financing agreements or certificates of
participation, provided that any credit enhancement agreements shall be payable
solely from funds specifically pledged, budgeted for or otherwise made
available by Oregon Community Power and amounts received from the exercise of
property rights granted under the financing agreements.
(3) Use financing
agreements to finance the costs of acquiring or refinancing real or personal
property, either tangible or intangible, plus the costs of reserves and credit
enhancements and the costs associated with obtaining the financing.
(4) Grant security
interests in property to trustees or lenders.
(5) Make pledges for the
benefit of trustees and lenders.
(6) Purchase fire and
extended coverage or other casualty insurance for property that is acquired or
refinanced with proceeds of a financing agreement, assign the proceeds thereof
to a lender or trustee to the extent of their interest, and covenant to
maintain any insurance while the financing agreement is unpaid, as long as
available funds are sufficient to purchase the insurance.
SECTION 38.
REVENUE BONDS
SECTION 39. (1)
(2) Revenue bonds or
other financing agreements issued by
MUNICIPAL PRIVILEGE TAX
SECTION 40. ORS 221.420 is amended to read:
221.420. (1) As used in this section:
(a) “Public utility” has
the meaning for that term provided in ORS 757.005.
(b) “Commission” means
the Public Utility Commission of Oregon.
(c) “Council” means the
common council, city council, commission or any other governing body of any
municipality wherein the property of the public utility is located.
(d) “Municipality” means
any town, city or other municipal government wherein property of the public
utility is located.
(e) “Service” is used in
its broadest and most inclusive sense and includes equipment and facilities.
(f) “Heating company”
means any person furnishing heat but not electricity or natural gas to its
customers.
(2) Every city may:
(a) Determine by
contract or prescribe by ordinance or otherwise, the terms and conditions,
including payment of charges and fees, upon which any public utility, electric
cooperative, people’s utility district or heating company, or Oregon
Community Power, may be permitted to occupy the streets, highways or other
public property within such city and exclude or eject any public utility or
heating company therefrom.
(b) Require any public
utility, by ordinance or otherwise, to make such modifications, additions and
extensions to its physical equipment, facilities or plant or service within
such city as shall be reasonable or necessary in the interest of the public,
and designate the location and nature of all additions and extensions, the time
within which they must be completed, and all conditions under which they must
be constructed.
(c) Fix by contract,
prescribe by ordinance, or in any other lawful manner, the rates, charges or
tolls to be paid to, or that may be collected by, any public utility or the
quality and character of each kind of product or service to be furnished or
rendered by any public utility furnishing any product or service within such
city. No schedule of rates, charges or tolls, fixed in the manner provided in
this paragraph, shall be so fixed for a longer period than five years. Whenever
it is proposed by any city to enter into any contract, or to enact any
ordinance, or other municipal law or regulation concerning the matters
specified in this paragraph, a copy of such proposed contract, ordinance or
other municipal law or resolution shall be filed with the Public Utility
Commission of Oregon before the same may be lawfully signed or enacted, as the
case may be, and the commission shall thereafter have 90 days within which to
examine into the terms thereof. If the commission is of the opinion that in any
respect the provisions of the proposed contract, ordinance or other municipal law
or resolution are not in the public interest, the commission shall file, in
writing, with the clerk or other officer who has the custody of the files and
records of the city, the commission’s reasons therefor. If the objections are
filed within said period of 90 days, no proposed contract, ordinance or other
municipal law or regulation shall be valid or go into effect until it has been
submitted to or ratified by the vote of the electors of the city. Unless and
until a city exercises its powers as provided in this paragraph, the commission
is vested with all powers with respect to the matters specified in this
paragraph. If the schedule of rates, charges and tolls or the quality and
character of each kind of product or service is fixed by contract, ordinance or
other municipal law or regulation and in the manner provided in this paragraph,
the commission has no power or jurisdiction to interfere with, modify or change
it during the period fixed thereby. Upon the expiration of said period such
powers shall again be vested in the commission, to be exercised by the
commission unless and until a new schedule of rates or the quality and
character for such service or product is fixed or prescribed by contract,
ordinance or other municipal law or regulation in the manner provided in this
paragraph.
(d) Provide for a
penalty for noncompliance with the provisions of any charter provision,
ordinance or resolution adopted by the city in furtherance of the powers
specified in this subsection.
SECTION 41. 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 a privilege tax from Oregon
Community Power and from every electric cooperative, people’s utility district,
privately owned public utility, telecommunications carrier as defined in ORS
133.721 or heating company. The privilege tax may be collected only if the
entity is 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]. The privilege tax shall be 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, or
SECTION 42. Sections 1, 2 and 3 to 39 of this 2007 Act
do not diminish, or authorize the adoption of rules that diminish, the
authority of a city to control the use of the city’s rights of way or to
collect license fees, privilege taxes, rent or other charges for the use of the
rights of way of the city.
PUBLIC PURPOSE CHARGE
SECTION 43. ORS 757.612 is amended to read:
757.612. (1) There is established an annual public purpose expenditure
standard for electric companies and
(2)(a) Beginning on the
date an electric company or
(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 or Oregon Community
Power 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 and
(b) Subject to paragraph
(e) of this subsection, funds collected by an electric company or
(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 or
(d) The commission shall
direct the manner in which public purpose charges are collected and spent by an
electric company or Oregon Community Power and may require an electric
company or Oregon Community Power 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 or
(A) 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[.]; or
(B) If
(e)(A) The first 10
percent of the funds collected annually by an electric company or Oregon
Community Power 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 or Oregon Community Power.
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 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 or
(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 may 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 State Department 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 or Oregon Community Power,
provided that a retail electricity consumer with a load greater than one
average megawatt is not 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. Oregon Community
Power shall adhere to tariffs that were in existence on the date Oregon
Community Power acquired an incumbent utility under sections 1, 2 and 3 to 39
of this 2007 Act, or the electric utility assets of the investor-owned utility,
and that were designed to remove costs for public purposes from the rates.
(4)(a) 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.
(b)
(A) Shall have no other
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
(B) 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 or
(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 State
Department 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 State Department 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 State Department 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 State Department 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 State Department 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 State Department
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 or
(b) The total amount
collected for low-income electric bill payment assistance under this section
shall be $10 million per year. The commission shall determine each electric
company’s proportionate share of the total amount and
(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 or
(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 or
(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.
(9) For purposes of
this section, amounts collected by
SECTION 43a. If Senate Bill 838 becomes law, section 43
of this 2007 Act (amending ORS 757.612) is repealed and ORS 757.612, as amended
by section 27, chapter 301, Oregon Laws 2007 (Enrolled Senate Bill 838), is
amended to read:
757.612. (1) There is established an annual public purpose expenditure
standard for electric companies and
(2)(a) Beginning on the
date an electric company or
(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 or Oregon Community
Power 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 and
(b) Subject to paragraph
(e) of this subsection, funds collected by an electric company or
(A) Sixty-three percent
for new cost-effective conservation and new market transformation.
(B) Nineteen percent for
the above-market costs of constructing and operating new renewable energy
resources with a nominal electric generating capacity, as defined in ORS
469.300, of 20 megawatts or less.
(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 or
(d) The commission shall
direct the manner in which public purpose charges are collected and spent by an
electric company or Oregon Community Power and may require an electric
company or Oregon Community Power 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 or
(A) 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[.]; or
(B) If
(e)(A) The first 10
percent of the funds collected annually by an electric company or Oregon
Community Power 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 or Oregon Community Power.
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 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 or
(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 may 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 State Department 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
not establish a different public purpose charge than the public purpose charge
described in subsection (2) of this section.
(4)(a) An
electric company that satisfies its obligations under this section shall have
no further obligation to invest in conservation, new market transformation 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 and 469.860 to 469.900.
(b)
(A) Shall have no other
obligation to invest in conservation, new market transformation or new
low-income weatherization or to provide a commercial energy conservation
services program; and
(B) Is not subject to
ORS 469.631 to 469.645 and 469.860 to 469.900.
(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 or
(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 State
Department 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 State Department 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 State Department 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 State Department 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 State Department 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 State Department
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 or
(b) The total amount
collected for low-income electric bill payment assistance under this section
shall be $10 million per year. The commission shall determine each electric
company’s proportionate share of the total amount and
(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 or
(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 or
(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.
(9) For purposes of
this section, amounts collected by
REVENUE BOND
CONFORMING AMENDMENTS
SECTION 44. ORS 287.025 is amended to read:
287.025. (1) As used in this section:
(a) “Agreement for
exchange of interest rates” or “agreement” means a contract, or an option or
forward commitment to enter into a contract, for the exchange of interest rates
that provides for:
(A) Payments based on
levels of or changes in interest rates; or
(B) Provisions to hedge
payment, rate, spread or similar exposure including, but not limited to, an
interest rate floor or cap or an option, put or call.
(b) “Borrowing” means a
bond, note, bond anticipation note, commercial paper, certificate of participation
or other agreement made in exercise of the borrowing power of the issuer.
(c) “Counterparty” means
the entity with which an issuer enters into an agreement for exchange of
interest rates.
(d) “Issuer” means a
public body as defined in ORS 288.605,[or] Oregon Health and
(e) “Related borrowing”
means a borrowing for which the issuer, or the State Treasurer on behalf of a
state issuer, enters into an agreement for exchange of interest rates.
(f) “Termination payment”
means the amount payable under an agreement for exchange of interest rates by
one party to another party as a result of termination, in whole or in part, of
the agreement prior to the expiration of the stated term.
(2) If the issuer is a state
issuer, including the State of
(3) Subject to
subsection (2) of this section, an issuer, or the State Treasurer on behalf of
a state issuer, may enter into an agreement for exchange of interest rates for
one or more related borrowings that:
(a)
Exist when the agreement for exchange of interest rates is executed;
(b) Are reasonably
expected to be executed when regularly scheduled payments are due from the
issuer under the agreement; or
(c) Are identified after
the agreement for exchange of interest rates is executed and substituted for a
borrowing described in paragraph (a) or (b) of this subsection as a result of
prepayment, refunding, conversion, ratings changes, redemption, defeasance or
other similar event related to one or more of the borrowings described in
paragraph (a) or (b) of this subsection. An agreement may be made to manage
payment, interest rate, spread or similar exposure undertaken in connection
with a related borrowing upon a finding by the issuer, or the State Treasurer
on behalf of a state issuer, that the agreement benefits the issuer.
(4) The issuer, or the
State Treasurer on behalf of a state issuer, shall include in an agreement for
exchange of interest rates provisions related to payment, term, security,
collateralization, termination, default and remedy that the issuer, or the
State Treasurer on behalf of a state issuer, determines necessary or
appropriate upon consideration of the covenants applicable to the related
borrowing and the creditworthiness of the parties.
(5) The issuer, or the
State Treasurer on behalf of a state issuer, may enter into an agreement for
exchange of interest rates only if:
(a) The credit ratings
for obligations of the counterparty that are similar to the termination payment
obligations of the counterparty, or the credit ratings for at least one of the
guarantors of the counterparty, are in one of the top three rating categories
without gradation by at least two nationally recognized rating agencies and
satisfy any other requirements that may be imposed by the Oregon Municipal Debt
Advisory Commission or the State Treasurer, as applicable, pursuant to
subsection (13) of this section; or
(b) The termination
payment obligations of the counterparty, or at least one of the guarantors of
the counterparty, with whom the issuer, or the State Treasurer on behalf of a
state issuer, enters the agreement are collateralized by cash or obligations:
(A) That are rated in
one of the top three rating categories without gradation by at least two
nationally recognized rating agencies as determined by the Oregon Municipal
Debt Advisory Commission or the State Treasurer, as applicable, pursuant to
subsection (13) of this section;
(B) That are deposited with the issuer, or the State Treasurer on behalf
of a state issuer, or with an agent of the issuer;
(C) That have a market
value sufficient to collateralize that portion of the termination payment
obligations of the party under the agreement as determined at the discretion of
the issuer, or the State Treasurer on behalf of a state issuer; and
(D) That are revalued at least quarterly.
(6) An issuer, or the
State Treasurer on behalf of a state issuer, may agree, based on the issuer’s
reasonable expectations when the agreement is executed:
(a) If the borrowing
bears interest at one or more variable rates, to pay sums equal to interest at
one or more fixed rates or one or more different variable rates determined
under a formula set forth in the agreement for exchange of interest rates on an
amount not to exceed the outstanding principal amount of the borrowing when the
agreement is entered into or, if the borrowing has not been issued, the
principal amount of the borrowing reasonably anticipated to be outstanding when
payments are required to commence under the agreement in exchange for an
agreement for the issuer, or the State Treasurer on behalf of a state issuer,
to be paid sums calculated based on the same principal amount at a variable
rate determined under a formula set forth in the agreement.
(b) If the borrowing
bears interest at one or more fixed rates, to pay sums calculated based on one
or more variable rates or one or more different fixed rates determined under a
formula set forth in the agreement for exchange of interest rates on an amount
not to exceed the outstanding principal amount of the borrowing when the
agreement is entered into or, if the borrowing has not been issued, the
principal amount of the borrowing reasonably anticipated to be outstanding when
payments are required to commence under the agreement in exchange for an
agreement for the issuer, or the State Treasurer on behalf of a state issuer,
to be paid sums calculated based on the same principal amount at a fixed rate
or rates set forth in the agreement.
(7) The issuer, or the
State Treasurer on behalf of a state issuer, may not enter into an agreement
under this section that:
(a) Has a term that
exceeds the original term of the related borrowing for which the agreement for
exchange of interest rates is made or, in the case of an option or a forward
commitment, has a term that exceeds the reasonably expected term of the related
borrowing for which the agreement is made; or
(b) Is for a purpose
other than to manage payment, interest rate, spread or similar exposure in
connection with the related borrowing of the issuer.
(8) The limitation on
interest on an obligation in ORS 286.036, or any other similar limitation, does
not apply to an amount paid under an agreement for exchange of interest rates
entered into under this section.
(9) Upon entering into
an agreement for exchange of interest rates under this section and continuing
until the agreement is satisfied, terminated or otherwise no longer in effect,
as long as no payment default has occurred, the issuer, or the State Treasurer
on behalf of a state issuer, shall treat the amount or rate of interest on the
related borrowing as the amount or rate of interest payable after giving effect
to the agreement for the purpose of calculating:
(a) Tax levies, if any,
to pay bond debt service; or
(b) Other amounts that
are based upon the rate of interest of the borrowing.
(10) Subject to
covenants applicable to a related borrowing and the limitation described in
subsection (12) of this section, payments required under the agreement by the
issuer, or the State Treasurer on behalf of a state issuer, may:
(a) Be treated as
interest payments on the related borrowing;
(b) Be made from
revenues or other moneys committed to or legally available to pay the related
borrowing; and
(c)
Rank in an order of priority of payment relative to the payment of the related
borrowing as the issuer, or the State Treasurer on behalf of a state issuer,
determines. In connection with entering into an agreement, the issuer, or the
State Treasurer on behalf of a state issuer, may enter into an agreement that
enhances or supports the credit of the issuer in the agreement or enhances or
supports the liquidity of the agreement.
(11) An agreement
entered into under this section:
(a) Is not a debt or
other obligation of the issuer for purposes of any limitation upon the
indebtedness of the issuer.
(b) Is subject only to
the limitations of this section and is not subject to other limitations
applicable to the related borrowing.
(12) A termination
payment required to be paid by an issuer under an agreement for exchange of
interest rates may not be paid from taxes that the issuer may levy that are
exempt from the limitations of sections 11 and 11b, Article XI of the Oregon
Constitution.
(13)(a) The Oregon
Municipal Debt Advisory Commission shall promulgate administrative rules
establishing required terms, conditions, annual or periodic reporting
requirements and other requirements for an agreement for exchange of interest
rates entered into by an issuer other than a state issuer and may impose
additional requirements for agreements for exchange of interest rates that are
executed by issuers other than a state issuer, if the commission determines
those requirements are desirable to protect the interests of those issuers or
citizens of the State of Oregon.
(b) The State Treasurer
may promulgate administrative rules:
(A) Establishing
required terms, conditions, annual or periodic reporting requirements and other
requirements for an agreement for exchange of interest rates entered into by a
state issuer acting with the approval of the State Treasurer under subsection
(2) of this section;
(B) Requiring a party to
an agreement, the party’s guarantor or the collateral securing the obligation
of a party or the party’s guarantor to meet specific credit rating standards or
other conditions; or
(C) If the State
Treasurer determines that conditions and restrictions are necessary or
appropriate to protect the interests of issuers, requiring the agreement to
contain terms and conditions that are more restrictive than the terms and
conditions established in subsection (5) of this section.
(14)(a) Before an
agreement for exchange of interest rates may be entered into under this
section, the issuer, or the State Treasurer on behalf of a state issuer, shall
determine whether:
(A) The agreement for
exchange of interest rates is being executed for a permitted purpose and
benefits the issuer; and
(B) The requirements of
this section have been met.
(b) In addition to the
determinations required under paragraph (a) of this subsection, an issuer other
than a state issuer shall also determine whether the issuer has complied with
the requirements of the administrative rules promulgated by the Oregon
Municipal Debt Advisory Commission under subsection (13) of this section.
(15) An issuer other
than a state issuer shall notify the State Treasurer of the execution by the
issuer of an agreement for exchange of interest rates under this section.
MISCELLANEOUS
SECTION 45. The unit and section captions used in this
2007 Act are provided only for the convenience of the reader and do not become
part of the statutory law of this state or express any legislative intent in
the enactment of this 2007 Act.
SECTION 46. This 2007 Act being necessary for the
immediate preservation of the public peace, health and safety, an emergency is
declared to exist, and this 2007 Act takes effect on its passage.
Approved by the Governor July 17, 2007
Filed in the office of Secretary of State July 19, 2007
Effective date July 17, 2007
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