§ 39-1-27.3 - Electric distribution companies required to provide retail access, standard offer and last resort service.
SECTION 39-1-27.3
§ 39-1-27.3 Electric distributioncompanies required to provide retail access, standard offer and last resortservice. – (a) To promote economic development and the creation and preservation ofemployment opportunities within the state, each electric distribution companyshall offer retail access from nonregulated power producers to all customers.
(b) Through year 2009, and effective July 1, 2007, throughyear 2020, each electric distribution company shall arrange for a standardpower supply offer ("standard offer") to customers that have not elected toenter into power supply arrangements with other nonregulated power suppliers.The rates that are charged by the electric distribution company to customersfor standard offer service shall be approved by the commission and shall bedesigned to recover the electric distribution company's costs and no more thanthe electric distribution company's costs; provided, that the commission mayestablish and/or implement a rate that averages the costs over periods of time.The electric distribution company shall not be entitled to recover any profitmargin on the sale of standard offer power, except with approval of thecommission as may be necessary to implement fairly and effectively, systemreliability and least-cost procurement. The electric distribution company willbe entitled to recover its costs incurred from providing the standard offerarising out of: (1) wholesale standard offer supply agreements with powersuppliers in effect prior to January 1, 2002; (2) power supply arrangementsthat are approved by the commission after January 1, 2002; (3) power supplyarrangements made pursuant to §§ 39-1-27.3.1 and 39-1-27.8; and (4)any other power supply related arrangements prudently made after January 1,2002 to provide standard offer supply or to mitigate standard offer supplycosts, including costs for system reliability, procurement and least-costprocurement, as provided for in § 39-1-27.7. Subject to commissionapproval, the electric distribution company may enter into financial contractsdesigned to hedge fuel-related or other variable costs associated with powersupply arrangements and the costs of any such financial contracts shall berecoverable in standard offer rates. The electric distribution company'sstandard offer revenues and its standard offer costs shall be accounted for andreconciled with interest at least annually. Except as otherwise may be directedby the commission in order to accomplish purposes established by law, any overrecoveries shall be refunded to customers in a manner directed by thecommission, and any under recoveries shall be recovered by the electricdistribution company through a uniform adjustment factor approved by thecommission. The commission shall have the discretion to apply such adjustmentfactor in any given instance to all customers or to such specific class ofcustomers that the commission deems equitable under the circumstances providedthat the distribution company recovers any under recovery in its entirety. Oncea customer has elected to enter into a power supply arrangement with anonregulated power producer, the electric distribution company shall not berequired to arrange for the standard offer to such customer except as providedin § 39-1-27.3.1. No customer who initially elects the standard offer andthen chooses an alternative supplier shall be required to pay any withdrawalfee or penalty to the provider of the standard offer unless such a penalty orwithdrawal fee was agreed to as part of a contract; however, no residentialcustomer shall be required to pay a penalty or withdrawal fee for choosing analternative supplier. Nothing in this subsection shall be construed to restrictthe right of any nonregulated power producer to offer to sell power tocustomers at a price comparable to that of the standard offer specifiedpursuant to this subsection. The electric distribution company may notterminate an existing standard offer wholesale supply agreement without thewritten consent of the division.
(c) In recognition that electricity is an essential service,each electric distribution company shall arrange for a last resort power supplyfor customers who have left the standard offer for any reason and are nototherwise receiving electric service from nonregulated power producers. Theelectric distribution company shall procure last resort service supply fromwholesale power suppliers. Prior to acquiring last resort supply, the electricdistribution company will file with the commission a supply acquisition plan orplans that include the acquisition procedure, the pricing options being sought,and a proposed term of service for which last resort service will be acquired.The term of service may be short or long term and acquisitions may occur fromtime to time and for more than one supplier for segments of last resort serviceload over different terms, if appropriate. All the components of theacquisition plans, however, shall be subject to commission review and approval.Once an acquisition plan is approved by the commission, the electricdistribution company shall be authorized to acquire last resort service supplyconsistent with the approved acquisition plan and recover its costs incurredfrom providing last resort service pursuant to the approved acquisition plan.The commission may periodically review the acquisition plan to determinewhether it should be prospectively modified due to changed market conditions.The commission shall have the authority and discretion to approve specialtariff conditions and rates proposed by the electric distribution company thatthe commission finds are in the public interest, including without limitation:(1) short and long term optional service at different rates; (2) termcommitments or notice provisions before individual customers leave last resortservice; (3) last resort service rates for residential or any other specialclass of customers that are different than the rates for other last resortcustomers; and/or (4) last resort service rates that are designed to encourageany class of customers to return to the market. The electric distributioncompany's last resort service revenues and its last resort service costs shallbe accounted for and reconciled with interest at least annually. Any overrecoveries shall be refunded and any under recoveries shall be recovered by theelectric distribution company through a uniform adjustment factor approved bythe commission. The commission shall have the discretion to apply suchadjustment factor in any given instance to all customers or to such specificclass of customers that the commission deems equitable under the circumstancesprovided that the distribution company recovers any under recovery in itsentirety. Nothing in this section shall be construed to prohibit an electricdistribution company from terminating service provided hereunder in accordancewith commission rules and regulations in the event of nonpayment of thisservice. The commission may promulgate regulations to implement this sectionincluding the terms and conditions upon which last resort service is offeredand provided to customers.
(d) If a customer being served by a nonregulated powerproducer pays any taxes assessed for electric service to the electricdistribution company and the electric distribution company forwards such taxpayment for the power portion of the bill to a nonregulated power producer forpayment by the nonregulated power producer to the state, neither the customernor the electric distribution company shall be liable for such taxes forwardedif the nonregulated power producer fails to remit such taxes to the state forany reason.