30-805. Distribution prices; conditions

A. Public power entities shall:

1. Establish unbundled ancillary electric transmission and distribution and other service prices and terms and conditions that are nondiscriminatory and that reflect the just and reasonable price for providing the service. Except as provided in paragraph 3, public power entities shall not consider the profits or losses associated with electric generation service in establishing electric distribution service prices.

2. Adopt reasonable terms and conditions governing the electric distribution utility's obligation to provide electric distribution and other services.

3. Establish a temporary surcharge on electric distribution service prices to pay for all or a portion of the unmitigated stranded costs of electric generation service, if any, that were incurred as a direct result of competition among electricity suppliers, that were incurred by public power entities to serve their customers in this state before December 26, 1996 and that may not be recoverable in a competitive electric generation service market. Unmitigated stranded costs may include employee severance costs necessitated by electric competition including unemployment compensation, training and severance benefits. A public power entity's stranded cost recovery shall be determined based on the consideration of at least the following factors:

(a) The impact of stranded cost recovery on the effectiveness of competition.

(b) The impact of stranded cost recovery on customers of a public power entity who do not participate in the competitive market.

(c) The impact, if any, on the public power entity's ability to meet debt obligations.

(d) The impact of stranded cost recovery on prices paid by consumers who participate in the competitive market.

(e) The degree to which the public power entity has mitigated or offset stranded costs and the costs associated with mitigating stranded costs.

(f) The degree to which some assets have values in excess of their book values.

(g) Appropriate treatment of negative stranded costs.

(h) The time period during which these stranded cost charges may be recovered. The governing body of the public power entity shall limit the application of these charges to a specified time period.

(i) The ease of determining the amount of stranded costs.

(j) The applicability of stranded costs to interruptible customers.

(k) The amount of electricity generated by renewable generating resources owned by the public power entity.

(l) Allowances that have been provided for the recovery of stranded costs to other electricity suppliers in this state including whether one hundred per cent of regulatory assets are recovered through the stranded cost surcharge.

B. The imposition of a temporary surcharge on electric distribution service prices pursuant to subsection A, paragraph 3 shall not cause the rates for standard offer service to exceed the rates that were in effect on December 30, 1998. The surcharge shall not continue past December 31, 2004.

C. Unmitigated stranded costs shall be allocated among customer classes in a manner consistent with the specific public power entity's current rate treatment of the stranded asset, in order to effect a recovery of unmitigated stranded costs that is in substantially the same proportion as the recovery of similar costs from customers or customer classes under current rates.

D. Any reduction in electricity purchases from a public power entity resulting from self-generation, demand side management or other demand reduction attributable to any cause other than the retail access provisions of this chapter shall not be used to calculate or recover any stranded cost from a customer.

E. Public power entities shall allow any provider of electric generation service access to the electric power transmission and distribution facilities of public power entities under rates and terms and conditions of service that are nondiscriminatory, cost based, just and reasonable and comparable to the rates charged for the public power entity's own use of the same facilities.

F. The public power entity shall participate in and support an independent system operator, an independent system administrator or other efforts to coordinate scheduling of generation or transmission within the state or region.

G. Except as provided in subsection H, the public power entity shall reduce the price for bundled service for electric retail customers who are unable to choose competitive electric generation by at least ten per cent over a maximum of a ten year period. The ten year period shall begin on any date between January 1, 1991 and August 21, 1998. Each public power entity shall report its beginning effective date for the ten year period and the proposed apportionment among its customer classes to the joint legislative budget committee by December 31, 2000.

H. A public power entity that is a city or town shall reduce the price for bundled service for retail electric customers by an amount determined by the city or town to be necessary to compete with other electric service providers.