Use of environmental trust bonds to finance the costs of retiring electric generating facilities; integrated resource and reliability planning by electric utilities and cooperatives; closure of large electric generating facilities; and granting rule-making authority. (FE)

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 facilities with a capacity of at least 12 but less than 100 megawatts; and 3) high-voltage transmission lines that are longer than one mile and operate at 100 kilovolts or more. As part of an integrated resource and reliability plan, an electric utility must identify alternatives to the proposed electric generating facilities, including alternative locations, fuel types, and methods of generation, and must explain the reasons for selecting the types of electric generating facilities proposed.

An electric utility must also identify alternative routes for any high-voltage transmission lines proposed and indicate their effects on the environment and how the utility will avoid or minimize potential adverse effects. An electric utility's detailed projection for electricity demand and assessment of whether it has sufficient capacity to make electricity available to consumers at a reasonable price must also be included in the plan, as well as a description of existing and planned programs and policies for discouraging inefficient and excessive electricity use. After holding a hearing on a utility's plan, PSC may approve the plan if PSC finds that the plan will provide a reasonably adequate supply of electricity to meet the needs of the public and that the plan satisfies certain other criteria.

Strategic energy assessment In addition, the bill eliminates the requirement that PSC prepare a biennial strategic energy assessment. Under current law, the strategic energy assessment evaluates the adequacy and reliability of the state's current and future energy supply and includes information on the following: 1) planned large electric generating facilities and high-voltage transmission lines; 2) plans for assuring an adequate ability to transfer electricity into the state; 3) the projected demand for electricity;

4) activities discouraging inefficient and excessive electricity use; 5) the extent to which effective competition contributes to a reliable, low-cost, and environmentally sound source of electricity; and 6) whether sufficient electricity is available at a reasonable price. Current law requires PSC to hold a hearing on a draft of the strategic energy assessment and prepare a final strategic energy assessment based on received comments.

Closure of large electric generating facilities The bill requires electric utilities and cooperative associations to notify PSC at least 180 days prior to closing any large electric generating facility with a capacity of 100 megawatts or more, and requires PSC, after public comment and hearing, to issue a determination as to whether the proposed closure will have an effect on electric reliability. The bill requires PSC to make its determination by considering the utility or cooperative's most recent integrated resources and reliability plan and information collected from the electric utility or cooperative and from the public, as well as any other information PSC deems relevant. Under the bill, PSC must notify the electric utility or cooperative of its determination no less than 45 days prior to the planned closure.