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ELECTRIC UTILITY RESTRUCTURING IN UTAH

Following is a brief history of electric utility restructuring (customer choice and generation deregulation) in Utah:

1996

The Utah Public Service Commission (UPSC) opened an Electric Utility Industry Restructuring Docket (No. 96-999-01) on January 24, 1996 to review the nature and possible need for regulatory changes in Utah due to changes in the electric industry. Informal technical conferences were held where most electric restructuring topics were studied and discussed. Most stakeholders that possibly might be impacted by electric restructuring participated in this docket in some manner. Topics studied and discussed included: Technology Changes, Objectives, Legal Issues, Pilot Programs, Economic Analysis, System Reliability, Stranded Costs and System Benefits. The last technical conference held under this Docket was on September 4, 1997. Four subcommittees presented reports to the UPSC.

1997

The Utah Legislature passed House Bill 313, "Electrical Deregulation and Customer Choice Task Force". This bill established a Legislative Task Force of Senators and Representatives to study electric utility industry restructuring with particular emphasis on stranded costs, customer choice, unfair cost shifting and competition issues. The Task Force also looked at the extent to which municipal, public, and member-owned providers of electric services should participate in electric deregulation and customer choice. The bill placed a rate freeze on investor owned electric utilities until 60 days after the conclusion of the 1998 State Legislative session ( May 4, 1998). Rates were frozen at January 31, 1997 rate levels for Utah Power & Light (the state's only investor owned electric utility). Utah Power implemented a 1.7% ($12.4 million) interim rate decrease effective April 15, 1997. Legislative Task Force meetings were held regularly beginning May 28, 1997, and most stakeholders participated including the UPSC, Division of Public Utilities, Committee of Consumer Services, the Municipals, Cooperatives, PacifiCorp, League of Women Voters, United We Stand, Utah Office of Energy and Resource Planning, Salt Lake Community Action Program, Power Marketers, Aggregators, etc. The Task Force held its last meeting for 1997 on November 13, 1997. The Task Force prepared a 1997 Interim Report which was presented to a Legislative Interim Committee on November 19, 1997. The Task Force made recommendations for the 1998 Legislative Session and its plans for 1998 Task Force work.

1998

The 1998 Utah Legislature passed House Joint Resolution 7, "Resolution on Restructuring of Electrical Industry" as amended, which recommended that the Electrical Deregulation and Customer Choice Task Force work continue in 1998, that the HB 313 rate freeze be allowed to expire, that a full rate hearing for Utah Power & Light be allowed to proceed before the Utah Public Service Commission, and, that the Task Force was to determine whether electric restructuring legislation should be prepared for introduction in the 1999 General Legislature Session. The Task Force met during 1998 and completed its final report on November 18, 1998. The Task Force Report concluded that ". . . consideration of a comprehensive electrical restructuring plan during the 1999 General Session [of the Legislature] is premature." The Task Force also recommended further legislative study of electric restructuring as well as monitoring of restructuring efforts at the Federal level and in other states. The Task Force indicated that further legislative study and monitoring will position Utah to implement restructuring when it is in the best interest of the state. In response to a request from the Task Force, the UPSC submitted four reports to the Electric Restructuring Task Force on Unbundling, Consumer Protection, Market Power and Transition Costs.

1999

Senate Bill 15, passed by the Utah Legislature, reauthorized the Electric Deregulation and Customer Choice Task Force until November 30, 2000. The Task Force met twice during 1999 with no customer choice legislation being proposed.

2000

Senate Bill 250, passed by the Utah Legislature, extended the Electrical Deregulation and Customer Choice Task Force until November 30, 2002. The Task Force met several times and followed the progress of an informal working group composed of all interested parties. No customer choice legislation was ultimately proposed.

2001

House Bill 244, passed by the Utah Legislature, renamed the Electrical Deregulation and Customer Choice Task Force, the Energy Policy Task Force. The law also changed the Task Forces's duties to include studying the energy needs of the State.

Further information on the legislative task forces can be found at http://www.le.utah.gov. Look under "archive" for previous year information.