HB 836 -- Retail Electric Choice

Co-Sponsors:  Mays (50), Richardson, Hegeman, Koller

This bill is The Electric Utility Restructuring Act.  Starting
on July 1, 2004, retail consumers taking electric service from
electric cooperatives, electrical corporations, and municipal
electric utilities participating in competition will be able to
choose their suppliers of electricity.  Consumers may take
electric power from a competitive electric provider (CEP) on a
competitive market basis or from the incumbent electric service
provider on a regulated basis.  Municipal electric utilities may
participate in competition in retail sales of electric power if
the governing body elects to do so.

The CEP will arrange for the contracted amounts of power to be
delivered to the local electric service utility for delivery to
its retail consumers.  Each retail consumer taking service on a
competitive basis will pay the local electric service utility a
fee for that consumer's share of costs in maintaining necessary
backup, peaking, and emergency power availability for retail
consumers.

The bill outlines procedures for when the Public Service
Commission determines that there is probable cause that a CEP
has market power and for mitigating market power.  The
commission is required to report to the General Assembly by
January 1, 2005, and January 15 of each subsequent year on the
progress of competitive market development and the impact of
electric utility restructuring on retail consumers.  The bill
specifies the information to be included in the report.

Within 6 months of passage of the bill, local electric service
providers must file with the commission a resource plan defining
the electric generating resources they will use to fulfill its
obligations to regulated consumers and specifying which assets
are dedicated to the regulated basis retail consumers and which
are free to be used in the competitive market.  Within 9 months
and after an evidentiary hearing, the commission will determine
and publish a recovery plan for each electrical corporation
submitting a plan.  Electric service providers that are not
electrical corporations will have their transition plans
determined by their regulatory bodies and will file the approved
plans with the commission within 30 days of approval.  The
recovery plans may incorporate a competitive transition charge,
and the transition charge will not cause the total price for
electric service for any retail consumer class to exceed the
cost per kilowatt-hour paid on July 1, 2004, with certain
exceptions.

The bill outlines factors the regulatory body must consider in
determining a competitive transition cost recovery plan.
Competitive transition costs will be determined on a net basis,
be verifiable, will be reconciled to actual electricity market
conditions from time to time, will include transmission and
distribution assets, and may include assets of another entity
committed by all requirements contracts to the electric service
provider.  Recovery of competitive transition costs will be
through a non-bypassable, non-discriminatory, appropriately
structured charge that is fair to all consumer classes, limited
in duration, and consistent with the promotion of fully
competitive markets.  The bill requires recovered competitive
transition charges to be used to reduce the related competitive
transition costs.

By January 1, 2004, the commission is required to adopt rules
relating to disclosure forms and consumer protections, such as
unauthorized switching of a retail consumer's service, consumer
privacy, billing practices, and dispute resolution.  The
commission must also adopt rules establishing specified
standards of conduct for local electric service utilities that
are CEPs or that are affiliated with a CEP.

The bill authorizes retail consumers to aggregate electrical
loads on a voluntary basis by any means available.  A political
subdivision must offer aggregation to all of its residential
consumers if it seeks to act as an aggregator.  If the political
subdivision serves as an aggregator, it cannot require any
retail consumer to purchase electric power from it.

Starting July 1, 2004, every CEP, aggregator, and broker is
required to obtain a license from the commission.  The bill
requires the commission to make rules establishing specified
procedures and conditions for obtaining and maintaining a
license to do business as a CEP.  The commission is authorized
to suspend or revoke licenses for failing to meet certain
requirements or if the action is necessary to protect the
interest of the public, to enforce the bill's provisions or any
rule of the commission.  The license is valid for 5 years and
will be renewable under terms and conditions established by the
commission.  The commission may seek injunctive relief in Cole
County Circuit Court against a CEP that engages in prohibited
merchandising or marketing conduct.

Each electric service provider is authorized to join a regional
transmission organization (RTO) or its functional equivalent.
The bill outlines requirements for transmission utilities owning
and operating a 34kv transmission system who choose not to join
an RTO.

The bill requires an electric service provider serving more than
500,000 customers in this state to mitigate any workforce
reductions through offers of voluntary severance, retraining,
and early retirement.  Until December 31, 2007, the provider
must, before reducing its workforce, present to its employees a
workforce reduction plan outlining mitigation plans.  The bill
outlines requirements in the event of a sale, purchase, or
transfer of ownership of such an electric service provider prior
to and until December 31, 2007.

The bill also allows rural electric cooperatives to act as local
electric service providers and removes the current limitation to
rural areas.

Missouri House of Representatives
Last Updated September 13, 2001 at 2:04 pm