74th OREGON LEGISLATIVE ASSEMBLY--2007 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 803
 
                         Senate Bill 87
 
Printed pursuant to Senate Interim Rule 213.28 by order of the
  President of the Senate in conformance with presession filing
  rules, indicating neither advocacy nor opposition on the part
  of the President (at the request of Governor Theodore R.
  Kulongoski for Public Utility Commission)
 
 
                             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 as
introduced.
 
  Authorizes Public Utility Commission to modify electricity
services public purpose charge for cost-effective energy
conservation, new market transformation and above-market costs
for new renewable energy resources, if commission makes certain
evidentiary findings. Limits frequency and amount of change in
public purpose charge.
  Eliminates 10-year term of public purpose charge and
establishes sunset date for public purpose charge.
 
                        A BILL FOR AN ACT
Relating to electric company public purpose charges; creating new
  provisions; and amending ORS 757.612 and 757.617.
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 - }  { +
territory. + }   { - for a period of 10 years. Except as provided
in paragraph (b) of this subsection, - }   { + Subject to
paragraph (c) 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)  { + Notwithstanding paragraphs (a) and (c) of this
subsection, + } 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.
   { +  (c) The Public Utility Commission may change the
percentage level of the public purpose charge specified in
paragraph (a) of this subsection as follows:
  (A) The commission may change the percentage level of the
charge if the commission finds, based on evidence developed
through public comment and hearings, that the change is needed to
acquire levels of conservation and renewable energy resources
that are consistent with meeting customer energy needs at the
lowest cost and risk.
  (B) The commission may not change the percentage level of the
charge more than once every two years.
  (C) The commission may not increase the percentage level of the
charge more than one percentage point every two years.
  (D) The commission may not change the percentage level of the
charge to a level that is greater than five percent.
  (E) The commission may not reduce the percentage level of the
charge below the level described in paragraph (a) of this
subsection.
  (F) The commission shall review the percentage level of the
charge and assess the need for any change at least once every two
years. + }
  (3)(a) The   { - Public Utility - }  commission shall establish
rules implementing the provisions of this section relating to
electric companies.
  (b)   { - Subject to paragraph (e) of this subsection, - }
Funds collected by an electric company through public purpose
charges shall be allocated as follows:
  (A)   { - Sixty-three - }  { +  56.7 + } percent for new
cost-effective conservation and new market transformation.
  (B)   { - Nineteen - }  { +  17.1 + } percent for the
above-market costs of new renewable energy resources.
  (C)   { - Thirteen - }  { +  11.7 + } percent for new
low-income weatherization.
  (D)   { - Five - }  { +  4.5 + } 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.
   { +  (E) 10 percent to education service districts, as
described in ORS 334.010, that are located in the service
territory of the electric company, for the purposes described in
paragraph (f) of this subsection.
  (c) If the commission modifies the percentage level of the
public purpose charge under subsection (2)(c) of this section,
the commission shall allocate the funds collected through public
purpose charges as follows:
  (A) Funds attributable to the three percent level described in
subsection (2)(a) of this section shall be allocated under
paragraph (b) of this subsection; and
  (B) Funds attributable to an increase in the percentage level
in excess of the three percent level described in subsection
(2)(a) of this section shall be allocated:
  (i) To new cost-effective conservation and new market
transformation; and
  (ii) To above-market costs of new renewable energy
resources. + }
 
    { - (c) - }  { +  (d) + } The costs of administering
subsections (1) to (6) of this section  { + and ORS 757.617
(1) + } for an electric company shall be paid out of the funds
collected through public purpose charges.  The commission may
require that an electric company direct funds collected through
public purpose charges to the state agencies responsible for
implementing subsections (1) to (6) of this section  { + and ORS
757.617 (1) + } in order to pay the costs of administering such
responsibilities.
    { - (d) - }  { +  (e) + } The commission shall direct the
manner in which public purpose charges are collected and spent by
an electric company and may require an electric company to expend
funds through competitive bids or other means designed to
encourage competition, except that funds dedicated for low-income
weatherization shall be directed to the Housing and Community
Services Department as provided in subsection (7) of this
section.  The commission may also direct that funds collected by
an electric company through public purpose charges be paid to a
nongovernmental entity for investment in public purposes
described in subsection (1) of this section. Notwithstanding any
other provision of this subsection, at least 80 percent of the
funds allocated for conservation shall be spent within the
service
  { - area - }  { +  territory + } 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 - }
   { +  (f)(A) + } Funds  { + designated for education service
districts under paragraph (b)(E) of this subsection + } 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.
  (B) An education service district that receives funds under
  { - this - }  paragraph  { + (b)(E) of this subsection + }
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  { + (b)(E) of this
subsection + } on a school district facility until an energy
audit has been completed for that school district { + , unless an
energy audit was completed within three years of the first
receipt of funds under this subsection + }. 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 - }  { +  subparagraph + }.
Following completion of an energy audit for an individual school
district, the education service district may expend funds
received under   { - this - }  paragraph  { +  (b)(E) of this
subsection + } to implement the energy audit.
   { +  (C) + } Once  { + subparagraph (B) of this paragraph has
been complied with and + } 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  { + (b)(E)
of this subsection + } for any of the following purposes:
  (i) Conducting  { + additional + } 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) - }   { + (g) + } The commission may establish a
 { - different - }  public purpose charge   { - than - }
 { + different from + } 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 - }
 { + territory + } of an electric company, provided that a retail
electricity consumer with a load greater than one average
megawatt is not required to pay a public purpose charge { + ,
calculated as a percentage + }   { - in excess of three
percent - }  of its total cost of electricity services { + ,
using a percentage level greater than the percentage level
established under subsection (2) of this section + }.
    { - (g) - }  { +  (h) + } The commission shall remove from
the rates of each electric company any costs for public purposes
described in subsection (1) of this section that are included in
rates. A rate adjustment under this paragraph shall be effective
on the date that the electric company begins collecting public
purpose charges.
  (4) An electric company that satisfies its obligations under
this section shall have no further obligation to invest in
conservation, new market transformation, new renewable energy
resources or new low-income weatherization 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 may 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 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 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 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 is not
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 - }
 { + territory + } of the electric company from which the funds
are collected.
 
  (d) The Housing and Community Services Department, in
consultation with the federal Advisory Committee on Energy, shall
determine the manner in which funds collected under this
subsection will be allocated by the department to energy
assistance program providers for the purpose of providing
low-income bill payment and crisis assistance, including programs
that effectively reduce service disconnections and related costs
to retail electricity consumers and electric utilities. Priority
assistance shall be directed to low-income electricity consumers
who are in danger of having their electricity service
disconnected.
  (e) Notwithstanding ORS 293.140, interest on moneys deposited
in the Housing and Community Services Department Revolving
Account under this subsection shall accrue to the account and may
be used to provide heating bill payment and crisis assistance to
electricity consumers whose primary source of heat is not
electricity.
  (f) Notwithstanding ORS 757.310, the commission may allow an
electric company to provide reduced rates or other payment or
crisis assistance or low-income program assistance to a
low-income household eligible for assistance under the federal
Low Income Home Energy Assistance Act of 1981, as amended and in
effect on July 23, 1999.
  (8) 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.  { + The amendments to ORS 757.612 by section 1 of
this 2007 Act apply to public purpose charges billed on or after
the effective date of this 2007 Act. + }
  SECTION 3.  { + A public purpose charge under ORS 757.612 may
not be collected for any electricity services, as defined in ORS
757.600, provided on or after March 1, 2022. + }
  SECTION 4. ORS 757.617 is amended to read:
  757.617. (1)(a) The Public Utility Commission and the State
Department of Energy jointly shall select an independent
nongovernmental entity to prepare   { - a - }  biennial
 { - report - }  { +  reports + } to the Legislative Assembly
describing program spending and results for public purpose
requirements undertaken pursuant to ORS 757.612.   { - The first
report shall be due on January 1, 2003. - }
  (b) The commission and the department jointly shall select an
independent nongovernmental entity to prepare   { - a report - }
 { +  reports + } to the Legislative Assembly describing proposed
modifications to public purpose requirements undertaken pursuant
to ORS 757.612.  The  { + first + } report shall be due on
January 1, 2007. { +  The second report shall be due on January
1, 2013. + }
  (c) The commission and the department jointly shall select an
independent nongovernmental entity to prepare a report to the
Legislative Assembly recommending whether the public purpose
funding requirements under ORS 757.612 should be renewed. The
report shall be due on January 1,   { - 2011 - }  { +  2019 + }.
  (2) The Housing and Community Services Department shall prepare
 { - a - }  biennial   { - report - }  { +  reports + } to the
Legislative Assembly describing program spending and needs for
low-income bill assistance.   { - The first report shall be due
on January 1, 2003. - }
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