Summary of the Introduced Bill

HB 676 -- Utilities

Sponsor:  Mays (50)

This bill establishes the Electric Reliability and Economy Act
of 2001.  In its main provisions, the bill:

(1)  Changes the way distributable property of electric power
and light companies are assessed for property tax purposes and
the values distributed if any distributable property is sold or
transferred to an affiliate;

(2)  Requires the State Tax Commission to make rules governing
methodologies for assessing the distributable property,
according to specified criteria;

(3)  Includes in the meaning of "local property" real or
tangible personal property used directly in generation of
electric power and placed in service after January 1, 2001;

(4)  Allows an electric utility to implement a reorganization
and sell, assign, lease, or otherwise transfer all or
substantially all of its generation plant and generation-related
assets to an affiliate without Public Service Commission (PSC)

(5)  Requires an electric utility that transfers its generation
assets to enter into a power purchase agreement with its
affiliate for 5 years, with successive renewals for minimum 3--
year terms at cost-of-service rates regulated by the Federal
Energy Regulatory Commission (FERC);

(6)  Requires an electric utility to give 30 days' notice to the
PSC of its intent to reorganize and transfer generation assets.
The bill specifies information that must be included in the

(7)  Authorizes the PSC to prohibit the transaction only if it
will render the electric utility unable to provide its tariffed
services in a safe and reliable manner;

(8)  Specifies that no PSC approval is required for the sale or
other disposition of transmission facilities to a regional
transmission organization or similar entity under the
jurisdiction of the FERC, as long as the FERC has approved the
sale or disposition;

(9)  Requires any electric utility affiliate acquiring coal--
fired or hydro-powered generation assets according to the bill's
provisions to seek approval from the PSC to subsequently
transfer these assets.  Specified notice requirements are
outlined in the bill.  The PSC is authorized to prohibit the
proposed transaction only if it will result in a substantial
adverse impact on the rates paid or reliability of electric
service received by retail customers in the state;

(10)  Prohibits any electric utility that implements a
reorganization and transfers generation assets by December 31,
2001, from increasing rates that were in effect on the effective
date of the bill until December 31, 2006.  For transfers taking
place after December 31, 2001, rates that were in effect on the
date of notice of reorganization and sale will not be increased
for a 5-year period;

(11)  Prohibits the PSC from ordering a decrease, restructuring,
or unbundling of the rates of an electric utility, unless
requested by the electric utility, prior to December 31, 2001,
or during any period in which the electric utility is prohibited
from increasing its rates;

(12)  Requires an electric utility transferring its generation
assets, within 30 days of filing a reorganization and transfer
notice, to file a tariff that enables retail customers that have
a maximum hourly electric demand of 2 megawatts or more to
arrange for dedicated power supplies to be acquired and

(13)  Outlines information required in the tariff filing;

(14)  Requires retail customers taking service under such a
tariff to pay the electric utility a basic rate consisting of
applicable distribution service charges, transmission service
charges, decommissioning charges, contract rates for power
provided, applicable taxes, and franchise fees or similar

(15)  Authorizes electric utilities transferring generation
assets to issue bills and receive payment in electronic format,
if the retail customer agrees.  The PSC is authorized to make
rules governing electronic billing and payment;

(16)  Requires the PSC to adopt rules prior to December 31,
2001, to protect the confidentiality of the data provided by
participating suppliers;

(17)  Allows electric utilities to conduct at least one
experiment on billing on a consolidated or aggregated basis,
real-time pricing, or other billing or pricing experiments,
including programs offered to groups of retail customers with
common attributes;

(18)  Authorizes the PSC to require electric utilities
conducting such billing experiments to file annual reports
detailing costs and effects of the experiments;

(19)  Gives the PSC jurisdiction over safety only for a heating
company serving only commercial customers in an area served by
an electric utility with a tariff in effect according to the
bill's provisions;

(20)  Requires that, in the event of a transfer of ownership of
one or more Missouri division or business units, or generation
stations or units, the contract with the acquiring entity
contain provisions requiring the entity to hire a sufficient
number of nonsupervisory employees to operate and maintain the
stations by making employment offers to the nonsupervisory
employees of the electric utility's division, business unit,
generating station or unit at no less than the wage rates and
substantially equivalent fringe benefits and terms of employment
that are in effect at the time of transfer for a period of at
least 30 months.  The utility must offer a transition plan to
those nonsupervisory employees not offered jobs by the acquiring

(21)  Requires each electric utility owning an interest in or
retaining responsibility for the decommissioning costs of one or
more nuclear power plants and which is transferring its interest
to recover decommissioning costs and deposit the funds in its
decommissioning trust fund;

(22)  Authorizes an electric utility that enters into a power
purchase agreement with an affiliated entity to attempt to
procure power competitively for any portion of its retail load
in the state at a cost less than that available under the
agreement and at equivalent levels of reliability before
December 31, 2006.  Starting December 31, 2005, the utility may
file a plan with the PSC to procure power competitively for all
or a portion of its retail load.  The PSC must review the plan
and within 90 days after the plan is filed, enter an order
approving or rejecting the plan.  The bill outlines criteria for
approving the plan;

(23)  Outlines factors utilities may consider in evaluating
competitive alternatives for power supply;

(24)  Prohibits any obligation to build new generation plants to
supply retail customers for any electric utility that transfers
the generation assets or for the affiliate; and

(25)  Requires suppliers of electricity to register with the
PSC, outlines registration requirements, authorizes the PSC to
revoke registrations for specified reasons, and requires the PSC
to make rules by January 1, 2002, regarding the registration
form and contents, including a registration fee.

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Missouri House of Representatives
Last Updated September 13, 2001 at 2:03 pm