A nuclear energy generation tax credit; prioritizing nuclear energy resources; approval of certain electric tariffs for very large customers; and authorizing electric utilities to recover certain precertification costs through rates. (FE)

Prioritizing nuclear energy resources The bill establishes as state policy that nuclear energy is a high-priority option, second only to energy efficiency and conservation, to be considered in meeting the state’s energy demands, over noncombustible renewable energy resources and combustible renewable energy resources. Under current law, it is the goal of the state that, to the extent it is cost effective and technically feasible, all new installed capacity for electric generation be based on renewable energy resources. The bill adds nuclear energy to this focus, along with renewable energy. Current law also provides that, in designing all new and replacement energy projects, a state agency or local governmental unit must rely to the greatest extent feasible on energy efficiency improvements and renewable energy resources if those are cost effective, are technically feasible, and do not have unacceptable environmental impacts. The bill adds nuclear energy resources to this list of prioritized resources.

Current law requires the Department of Administration to establish renewable energy percentage goals for certain state agencies to meet in 2007 and 2011 and then to submit a report to the governor and the legislature each March 1 concerning the degree of attainment of those goals during the preceding year. Under the bill, beginning in 2026, those reports must include nuclear energy in the definition of “renewable resource” for the purpose of that report.

Current law includes a deadline of June 1, 2016, by which the Public Service Commission was required to prepare a report stating whether the state had met a goal of 10 percent of all electric energy consumed in the state being renewable energy and, if not, why the goal was not achieved and how it may be achieved. Current law requires PSC to prepare and submit to the legislature similar reports biennially thereafter until the goal is achieved. This bill changes this goal to be 10 percent of all electric energy consumed in the state being low-carbon-emission energy, which is defined as energy derived from either a renewable resource or nuclear power, and updates the report deadline to June 1, 2027, and biennially thereafter.

Approval of very large customer tariffs The bill authorizes PSC to approve electric tariffs, or schedules of rates and charges, for certain very large customers. The bill defines “very large customer” to mean an electric public utility customer that owns or operates a facility that has an energy demand of at least 75 megawatts of electricity per month. Under the bill, PSC may approve a tariff for very large customers if the tariff ensures that other customers of the utility do not pay the costs associated with serving the demand of very large customers, the utility produces the electricity provided to very large customers from nuclear power, and any very large customers to which the tariff applies have consented to the tariff. Further, the bill requires PSC to approve a very large customer tariff that satisfies the conditions described above if the electricity provided to very large customers subject to the tariff is generated within 75 miles of the very large customers.

Recovery of certain precertification costs The bill authorizes PSC to approve recovery of qualifying precertification costs through an electric public utility’s rates. Under the bill, “qualifying precertification costs” are costs incurred by an electric public utility before filing an application for a certificate of public convenience and necessity (CPCN) or for a certificate of authority (CA) that are related to the development of nuclear energy, including costs related to feasibility studies, site evaluations, and preparation of regulatory filings. The bill applies to the rates of certain investor-owned electric public utilities and the recovery authorized under the bill includes recovery of a reasonable rate of return on an electric public utility’s precertification costs. Under current law, rates for utility service must be reasonable and just. Also, current law requires a person seeking to construct a large electric generating facility to obtain a CPCN from PSC, and a public utility must obtain a CA from PSC to construct certain other facilities and projects.