SB 651

This bill authorizes the use of environmental trust financing for the costs of

retiring an electric generating facility, requires integrated resource and reliability

planning by electric utilities and cooperatives, eliminates the requirement that the

Public Service Commission prepare a biennial strategic energy assessment, and

provides a process by which PSC determines whether a proposed closure of a large

electric generating facility will affect electric reliability.

Environmental trust financing

Under current law, an energy utility is allowed to apply to PSC for an order

allowing the utility to finance or recover the costs of the following activities by issuing

bonds: 1) the construction, installation, or otherwise putting into place of

environmental control equipment in connection with a plant that, before March 30,

2004, has been used to provide service to customers; and 2) the retiring of any

existing plant, facility, or other property to reduce, control, or eliminate

environmental pollution in accordance with federal or state law. Current law defines

these activities as “environmental control activities.” If approved by PSC, the bonds,

which are referred to as “environmental trust bonds,” are secured by revenues

arising from charges paid by an energy utility's customers for the utility to recover

the cost of the activities, as well as the cost of financing the bonds.

This bill adds the retiring of any existing electric generating facility as an

environmental control activity, the costs of which, including the unrecovered value,

may be financed or recovered by an environmental trust bond. In addition, with

respect to this new environmental control activity, the bill adds to the costs that may

be financed or recovered the portion of an energy utility's rate that is attributable to

the rate of return for the facility authorized under PSC's order in a rate-making

proceeding and that is forgone as a result of the retirement. Under current law, the

costs that may be financed or recovered include capital cost incurred or expected to

be incurred in undertaking an environmental control activity and, with respect to

retiring a plant, facility, or other property, the unrecovered value of property that is

retired.

Under this bill, PSC may order an energy utility to use environmental trust

bonds to finance an expenditure. Under current law, PSC may not order an energy

utility to use environmental trust bonds to finance an expenditure unless the energy

utility has applied to PSC to do so, and PSC may not refuse to allow an energy utility

to recover costs for environmental control activities in an alternate manner because

of the potential availability of environmental trust financing.

Integrated resource and reliability planning

This bill requires electric utilities and cooperative associations to submit

biennial integrated resource and reliability plans to PSC that include certain

information about their plans to construct the following: 1) large electric generating

facilities with a capacity of 100 megawatts or more; 2) small electric generating