Sec. 16-244g. Divestiture of nuclear electric generation facilities. Plan. Approval of sale by department.
Sec. 16-244g. Divestiture of nuclear electric generation facilities. Plan. Approval of sale by department. (a) As used in this section, "generation assets" means
"generation assets", as defined in section 16-244f, and "net proceeds" means "net proceeds", as defined in section 16-244f.
(b) Not later than January 1, 2004, each electric distribution company shall either (1)
submit its nuclear generation assets to a public auction held in a commercially reasonable
manner, in accordance with subsection (c) of this section in order to divest itself of
remaining nuclear generation assets, or (2) transfer remaining nuclear generation assets
to one or more legally separate corporate affiliates at their book value, in which case
no stranded costs shall be recovered.
(c) (1) Each electric distribution company that elects to divest itself of its nuclear
generation assets shall, in a time frame that will allow divestiture to occur by January
1, 2004, submit a divestiture plan to the Department of Public Utility Control. The
divestiture plan shall include (A) any documentation the department determines is reasonably necessary to approve the auction procedure, including a copy of the request for
proposal and a description of the solicitation process, (B) a detailed description of the
process for the sale and transfer of nuclear generation assets, and (C) information the
department determines is necessary for the department to determine the value of the
minimum bid for each nuclear generation asset, as provided in subdivision (3) of this
subsection. The department shall hold a hearing and issue a final order approving or
modifying the plan in a time frame that will allow divestiture to be accomplished by
January 1, 2004. Any hearing shall be conducted as a contested case in accordance
with chapter 54. The department shall, after consultation with the Office of Consumer
Counsel, appoint a consultant who shall be an entity unrelated to the said company that
meets qualifications set by the department, to conduct the auction process.
(2) The department shall not approve a sale unless (A) the sale price equals or
exceeds the minimum bid established by the department for the asset, (B) the department
determines the bidder meets all applicable qualifications established by federal law and
regulation, (C) the sale is conducted in accordance with the divestiture plan as approved
by the department, (D) the bidder proves to the satisfaction of the department that the
bidder will preserve labor agreements in effect at the time of the sale, and (E) the sale
will result in a net benefit to ratepayers, as determined by the department. Transfer in
ownership of any asset shall not occur until the department determines the purchaser is
fully qualified to provide electric generation services pursuant to section 16-245 or
pursuant to applicable federal law and regulation. If the department approves a sale in
accordance with the provisions of this section, no further proceedings under section 16-43 shall be required.
(3) The department shall determine the minimum bid price for each nuclear generation asset by determining the future net cash flow that a nuclear generation asset of
comparable size, age and technical characteristics that is prudently and efficiently managed would be expected to produce over its expected remaining useful life, discounted
to a present value.
(4) A generation entity or affiliate of an electric distribution company may bid on
any nuclear generation asset, provided such entity or affiliate is qualified to bid, as
provided in this subsection.
(5) If a final bid is less than book value for an asset, the electric distribution company
shall be entitled to recover the difference between the bid price and the book value as
stranded costs pursuant to subdivision (2) of subsection (h) of section 16-245e. If a final
bid exceeds book value for an asset, the net proceeds realized by the electric distribution
company that are above book value shall be netted against the amount of stranded costs
as provided in subdivision (4) of subsection (h) of section 16-245e.
(d) (1) If an electric distribution company elects to sell all its remaining nuclear
generation assets by public auction and complies with the provisions of subsection (c)
of this section but does not receive any bids for an asset by a qualified bidder that equal
or exceed the minimum bid price, as determined by the department in accordance with
the provisions of subsection (c) of this section, the department shall calculate the value
of stranded costs for each such asset in accordance with subdivision (3) of subsection
(h) of section 16-245e.
(2) Not later than January 1, 2004, the electric distribution company shall transfer
the nuclear generation assets described in subdivision (1) of this subsection to one or
more legally separate corporate affiliates. If in order to comply with rules, regulations or
licensing requirements of the United States Nuclear Regulatory Commission an electric
distribution company is unable to legally separate its nuclear assets to one or more
corporate affiliates, the generation assets may remain in separate divisions of the electric
distribution company.
(e) (1) On and after January 1, 2000, and prior to the date when a nuclear generation
asset is sold at public auction or transferred to a corporate affiliate, the difference between the return of and on capital costs allowed in rates for the nuclear generation asset
and the income capitalization value established for such asset for such interim period
pursuant to the methodology described in subdivision (3) of subsection (c) of this section
shall be collected through the competitive transition assessment in accordance with
section 16-245g.
(2) On or after the date when a nuclear generation asset is sold at public auction or
transferred to a corporate affiliate, the department shall calculate the stranded costs for
nuclear generation assets in accordance with subsection (h) of section 16-245e.
(3) In no event shall any costs described in this subsection be funded at any time
with the proceeds of rate reduction bonds pursuant to sections 16-245e to 16-245k,
inclusive.
(P.A. 98-28, S. 7, 117.)
History: P.A. 98-28 effective July 1, 1998.