HB 1573 -- Electric Utilities

Co-Sponsors:  Mays (50), Burton, Campbell, Willoughby, Rector,
Cooper

This bill allows electric corporations, with the approval of the
Public Service Commission (PSC), to reorganize, sell, assign,
lease, or transfer all or part of their generation-related assets
to an affiliate at historical net book value.  Transactions must
include a power purchase agreement that dedicates enough
generation capacity to serve the retail customers of the
corporation at cost-of-service rates regulated by the Federal
Energy Regulatory Commission (FERC).  If the FERC ceases to
regulate rates on a cost-of-service basis, the PSC may establish
cost-of-service rates.  If the corporation retains responsibility
for decommissioning costs of a transferred nuclear power plant,
it must recover these costs through unbundled charges or bundled
rates.

The affiliate is required to fill its non-supervisory jobs by
offering affected employees of the corporation similar wages,
benefits, and conditions of employment.  The labor agreement must
continue for at least 30 months, unless the parties agree
otherwise.  The corporation will establish a transition plan for
employees who are not offered jobs by the affiliate.

Applications for asset transfers must include detailed
information on both the transfer and the power purchase agreement
and must be verified by an independent certified public
accountant.  Intervention is limited to parties with a direct
interest and the Office of the Public Counsel.  Generally, the
PSC must make its final decision within 150 days after an
application is filed.  If the applicant provides a draft
application at least 30 days prior to filing, the decision period
is reduced to 120 days.  If the corporation has a general rate
proceeding pending at the time of application, the decision on
the asset transfer may be made on the same date as the order in
the rate proceeding.  The PSC must be notified at least 180 days
before any changes in a power purchase agreement take effect.

Affiliates that receive transferred generation assets may not
subsequently transfer the assets to another entity without PSC
approval.  If the PSC does not order a hearing within 30 days
after receiving notice, the transfer is considered approved.  The
PSC must make a final decision within 180 days and can deny the
transfer only if corporate costs or service problems for retail
customers are likely to increase.

Transferred assets may be considered "eligible facilities" for
the FERC to determine that the asset holder is an exempt
wholesale generator.  The PSC and the Office of the Public
Counsel may intervene in proceedings before the FERC and may
request that federal hearings be held within the state.

Transferred assets will continue to be treated as property of the
electric corporation for assessment and taxation.  The State Tax
Commission will adopt rules to ensure that transferred property
is valued and allocated like distributable property.

Missouri House of Representatives
Last Updated October 11, 2002 at 9:01 am