CRS Report: RL30405 - State-by-State Comparison of Selected Electricity Restructuring Provisions

Redistributed as a Service of the National Library for the Environment*

RL30405: State-by-State Comparison of Selected
Electricity Restructuring Provisions

Amy Abel

Specialist in Energy Policy
Resources, Science, and Industry Division

Jon O. Shimabukuro

Legislative Attorney
American Law Division

January 13, 2000

CONTENTS

Summary

Arizona, H.B. 2663 (1998), and ACC Rules (1999)
Arkansas, Act 1556 (1999)
California, AB 1890 (1996)
Connecticut, Public Act 98-28 (1998)
Delaware, HB 10 (1999)
Illinois, P.A. 90-561 (1997)
Maine, LD 1804 (1997)
Maryland, Senate Bill 300 (1999)
Massachusetts, H.B. 5117 (1997)
Montana, Senate Bill 390 (1997)
Nevada, AB 366 (1997), SB 438 (1999)
New Hampshire, HB 1392 (1996)
New Jersey, S-7 (1999)
New Mexico, SB 428 (1999)
Ohio, SB 3 (1999)
Oklahoma, SB 500 (1997), SB 888 (1998)
Oregon, SB 1149 (1999)
Pennsylvania, PA. STAT. ANN. tit. 66, § 2801 et seq. (1996)
Rhode Island, H-8124B (1996)
Texas, SB 7 (1999)
Virginia, SB 1269 (1999)

Footnotes

Summary

Since 1996, twenty-one states have restructured their electricity markets. While the extent of this restructuring varies by state, four issues have generally been considered by all state legislatures: stranded costs, aggregation, universal service, and public benefits. This report compares the treatment of these issues in the restructuring legislation of the twenty-one states. Using information collected directly from the relevant state laws and the rules promulgated by state public utility commissions, this report provides a state-by-state comparison of the restructuring provisions relating to the four issues.

While all states allow for some recovery of stranded costs, the method for recovering these costs varies by state. Stranded costs are those that were legitimately and prudently incurred under the "old" regulatory regime that are not economically recoverable under the "new" competitive regime that is being entered. Stranded costs are sometimes called transitional costs.

Aggregation refers to the combining of one or more classes of electric consumers for the purpose of negotiating collectively for electric power. While not specifically prohibiting aggregation, three states, Delaware, New Hampshire, and Oklahoma do not have aggregation provisions. The remaining eighteen states allow for some form of retail aggregation.

The restructuring laws of New Mexico, Oregon, and Oklahoma do not include provisions for universal service, which is the guaranteed supply of electricity to all consumers in a competitive market regardless of whether the consumer chooses or is able to find an alternate electric supplier. In Arkansas, Delaware, Illinois, Maryland, and Massachusetts, the incumbent utility becomes the supplier of last resort. In Arizona, Connecticut, Pennsylvania, and Rhode Island, the distribution company must provide default service to customers who have not made alternate arrangements for service. In Maine, Montana, Nevada, New Jersey, New Hampshire, Texas, and Virginia, the state must designate a standard offer program.

Most state restructuring laws include some provision to establish or develop programs for low income consumers. These programs, defined collectively as public benefits, may include research and development, renewables, and conservation. However, such programs are not addressed in the restructuring legislation of Illinois, Nevada, Oklahoma, and Rhode Island.

The differences among the state provisions raise the question of what role federal legislation should play. Because more than half of the U.S. population lives in states that have restructured electricity markets, the issue to be resolved is whether Congress should attempt to standardize various state programs or allow states to continue their unique experiments in competition. Additional information on federal legislative proposals to restructure the electric utility industry is available in the congressional sections of the CRS Electric Utility Restructuring Briefing Book .

Since 1996, twenty-one states have restructured their electricity markets. While the extent of this restructuring varies by state, four issues have generally been considered by all state legislatures: stranded costs, aggregation, universal service, and public benefits. The following table describes the treatment of these issues in the restructuring legislation of the twenty-one states. Because terms are defined slightly differently by each state, we have used the following definitions for the purpose of this report:

Stranded costs: costs that were legitimately and prudently incurred under the "old" regulatory regime that are not economically recoverable under the "new" competitive regime that is being entered.

Aggregation: the combining of one or more classes of electric consumers for the purpose of negotiating collectively for electric power.

Universal service: the guaranteed supply of electricity to all consumers in a competitive market, whether or not the consumer chooses, or is able to find, an alternative electric supplier.

Public benefits: programs considered to be beneficial to a large group of electric consumers. Programs may include: low-income, renewables, conservation, and research and development.

The information contained in this report was collected directly from state laws and rules promulgated by state public utility commissions. Additional electronic information that was used to clarify issues is noted. Contact people, when consulted, are similarly noted. While this report compares the identified provisions of the twenty-one restructuring laws, it does not analyze the differences or similarities among the state approaches.

Arizona, H.B. 2663 (1998), and ACC Rules (1999)⁽¹⁾
Stranded Cost	H.B. 2663: Confirms the Arizona Corporation Commission's (ACC) authority to require a surcharge on distribution services for the recovery of all or a portion of any unmitigated stranded costs that might result from electric generation service competition. The computation and the manner of recovery will be established by the ACC. Provides that Public Power Entities may charge a surcharge on distribution services for the recovery of all or a portion of any unmitigated stranded costs that might result from electric generation service competition. The Public Power Entities will coordinate with the ACC to promote a consistent statewide application for stranded cost recovery. ACC Decision No. 60977: Affected Utilities will collect stranded costs from all retail electric customers through a Competitive Transition Charge which is based on the amount of generation purchased from any supplier. Utilities may choose one of five methods for stranded cost recovery: Net Revenues Lost Methodology (difference between net generation revenues before competition and without competition are considered as potential stranded costs); Divestiture/Auction Methodology (difference between the net market value and book value will be stranded cost); Financial Integrity Methodology (maintain financial viability for ten years by meeting minimum financial ratios. All stranded costs will be recovered during the ten year period); Settlement Methodology (utility must submit to the ACC a settlement option that is a combination of the other methodologies); or An Alternative Methodology (plan must be submitted and approved by the ACC).
Aggregation	H.B. 2663 permits aggregation of load by multiple customers. ACC 9/29/99 rule: All classes can aggregate. Aggregators must be certified as an Electric Service Provider by the ACC.
Universal service	H.B.2663: Requires that Public Power Entities that are Electric Distribution Utilities (EDUs) be the provider of last resort for electric generation service for retail customers with aggregated loads of 20 kilowatts or less if other electricity suppliers are unwilling to provide the service. An EDU may impose a surcharge, subject to the ACC's or Governing Board's approval, for the provision of this service. This provision is subject to legislative review in the year 2008. ACC 9/29/99 rule: Utilities will provide standard offer (bundled) service and noncompetitive services at regulated rates. After 1/1/2001, utilities or Utility Distribution Companies will act as default providers for customers with annual usage of 100,000 kilowatt-hours or less. After 1/1/2001, at least 50 % of the standard offer service will be acquired through a competitive bid process.
Public benefits	H.B.2663: not included. ACC 9/29/99 rule: Utilities can assess an ACC-approved system benefits charge to recover the costs related to low-income programs, demand-side management, consumer education, environmental, renewables, research and development, nuclear fuel disposal, and nuclear plant decommissioning.
Contact	Barbara Keene, Arizona Corporation Commission, 602-542-0853.

Arkansas, Act 1556 (1999)⁽²⁾
Stranded Cost	A utility must apply to the State Public Utility Commission for recovery of stranded costs using one of three methods: sale of assets, stock valuation, or capacity sale. An electric utility may use securitization to recover its net retail stranded costs and other stranded costs as may be determined by the commission. These costs may also be recovered as a component of a customer transition charge.
Aggregation	Any municipal corporation, county, or group of municipal corporations or counties acting together is hereby authorized to aggregate the electric load of interested electricity consumers upon registering with the State Public Utility Commission. An Electric Service Provider must be licensed with the State Public Utility Commission to aggregate load.
Universal service	The State Public Utility Commission shall adopt appropriate rules that promote the goal that all electric utilities doing business should retain their historical obligations to connect customers to the electric utility grid upon reasonable terms and conditions. Each incumbent electric utility, or a retail affiliate thereof, shall offer a standard service package on such conditions as may be set by the State Public Utility Commission within its distribution service territory and shall have an obligation to provide such service unless and until any such customer has elected an alternative energy service provider, or in the event any such customer has not been able to secure an alternative energy service provider.
Public benefits	No provisions.
Contact	Richard House, 501-682-5825.

California, AB 1890 (1996)⁽³⁾

Stranded Cost	AB 360 allows utilities to issue $7.3 billion in bonds (securitization) to pay off stranded investments.
Aggregation	Section 366 of the Public Utilities Code allows customers to aggregate their electric loads on a voluntary basis, provided that each customer does so in a written declaration. http://www.leginfo.ca.gov/pub/97-98/bill/sen/sb_0451-0500/sb_477_bill_19970815_chaptered.html
Universal service	If a customer does not actively choose to switch providers, it remains with the utility distribution company which in turn procures its energy from the California Power Exchange.
Public benefits	Low income programs remain intact. Energy efficiency and RD&D were given set funding levels for 4 years as a result of AB 1890 in 1996.
Contact	Doug Long, California PUC, 415-703-2011, dug@cpuc.ca.gov

Connecticut, Public Act 98-28 (1998)⁽⁴⁾
Stranded Cost	Connecticut Public Act 98-28 allows for three types of stranded cost recovery: those associated with generation assets; regulatory assets (expenditures that the Department of Public Utility Control (DPUC) has approved for deferred recovery); and long-term contracts to buy power from other generators. In order to recover stranded costs, all non-nuclear generating assets must be put up for auction by January 1, 2000, and nuclear plants must be put up for auction by January 1, 2004. With the exception of Millstone 1, nuclear plants must be operating in order to recover any stranded costs. Companies may securitize the regulatory assets, purchase-power contracts with a fixed present value, and mitigation costs. The refinancing is accomplished through the issuance of state revenue bonds. Stranded cost will be recovered through a competitive transition assessment (CTA), assessed and collected by the DPUC.
Aggregation	According to Section 1 of Public Act 98-28, An Act Concerning Electric Restructuring (Act), an electric aggregator is someone who gathers electric customers for the purpose of negotiating the purchase of electric generation services from an electric supplier but who is not engaged in the purchase or resale of electric generation services. Municipalities are allowed to aggregate their residents' electric load. Section 22 of the Act establishes the licensing requirements applicable to electric suppliers and aggregators in the new market structure. There is no distinction for licensing between different sized aggregators or between for-profit and non-profit aggregators, but Section 23 of the Act currently exempts municipalities from licensing requirements when they aggregate customers within their municipal boundaries. Connecticut Department of Public Utility Control, Docket number 98-06-13 http://www.dpuc.state.ct.us/FINALDEC.NSF/2b40c6ef76b67c438525644800692943/bb3597d25e4b0dd78525 66f000434798?OpenDocument
Universal service	Distribution companies must provide all customers in their service area a standard offer option from January 1, 2002, to January 1, 2004. Starting January 1, 2004, each distribution company must provide default service to customers who do not arrange for generation service from an unaffiliated supplier. Distribution companies must bid out this service, although their generation affiliates can bid if licensed.
Public benefits	The DPUC must establish and consumers must pay a systems benefit charge (SBC) starting January 1, 2000. The charge is used to pay for consumer education, low-income energy conservation, hardship protection, and dislocated worker programs. Also includes provisions for a renewable portfolio standard.
Contact	Cynthia Mathews, Legislative Liaison, 860-827-2621.

Delaware, HB 10 (1999)⁽⁵⁾
Stranded Cost	A competitive transition charge will be established by the Delaware Public Service Commission. The Delaware Electric Cooperative is permitted to recover all reasonably incurred, non-mitigable stranded and transition costs. The costs to be recovered shall be allocated in a manner that avoids, to the extent possible, inter-class or intra-class cross-subsidization. Transition charge will be collected during transition period (4/1/00 to 3/31/05). Bill gave no explicit stranded cost recovery for Delmarva Power and Light, but implicit recovery was approved in rate structure case ($16 million over 3 years) that was decided on August 31, 1999.
Aggregation	Not addressed but not prohibited. No telemarketing is allowed.
Universal service	The Delaware Electric Cooperative (DEC) will have the obligation to serve all customers in its Commission-designated service territory, during the transition. After the transition, DEC will supply Standard Offer Service to consumers who have no choice regarding electric suppliers, do not choose another electric supplier, or have contracted for electric supply service that is not delivered. Delmarva Power and Light will be the supplier of last resort during the transition period. After the transition period, the Public Service Commission may change supplier of last resort for Delmarva Power and Light customers through a competitive bidding process.
Public benefits	Low-income: An average of $0.000095/kWh each month (approx. $800,000 annually) to fund low-income fuel assistance and weatherization programs; administered by Dept. of Health & Social Services' Division of State Service Centers (which currently administers similar federally-funded programs). Environmental: An average of $0.000178/kWh each month (approx. $1.5 million annually) to fund environmental incentive programs for conservation and energy efficiency; administered by the Delaware Economic Development Office, in consultation with the Delaware Energy Office and the Division of Public Advocate.
Contact	Raj Barua, 302-739-4247, http://www.state.de.us/delpsc/major/erestructuring.html.

Illinois, P.A. 90-561 (1997)⁽⁶⁾
Stranded Cost	A transition charge will be assessed on customers choosing unbundled service during a transition period that ends on January 1, 2005. The incumbent utility will receive a transition charge that will be calculated based on lost revenues.
Aggregation	Aggregation of retail loads is allowed as long as aggregation meets the criteria for delivery of electric power and energy applicable to the electric utility established by the regional reliability council to which the electric utility belongs, by an independent system operating organization to which the electric utility belongs, or by another organization responsible for overseeing the integrity and reliability of the transmission system, as such criteria are in effect from time to time. The Commission may adopt rules and regulations governing criteria for aggregation of the loads utilizing delivery services, but its failure to do so shall not preclude any eligible customer from electing delivery services. The electric utility shall allow such aggregation for any voluntary grouping of customers, including without limitation those having a common agent with contractual authority to purchase electric power and energy and delivery services on behalf of all customers in the grouping.
Universal service	Consumers will be served by their incumbent utility unless the consumer chooses unbundled service.
Public benefits	Not addressed.
Contact	Harry Stoller, Energy Division Manager, Illinois Commerce Commission, 217-785-5278, http://icc.state.il.us/icc/Dereg/.

Maine, LD 1804 (1997)⁽⁷⁾
Stranded Cost	Law permits electric utilities a reasonable opportunity to recover legitimate, verifiable and unmitigable costs that are otherwise unrecoverable as a result of retail competition in the electric industry. The Public Utilities Commission shall set an amount of recoverable stranded costs after calculating the net aggregate value of all divested assets that had proceeds exceeding book costs against the aggregate value of all other stranded electricity generation assets. The commission may not shift cost recovery among customer classes in a manner inconsistent with existing law, as applicable.
Aggregation	Aggregators need to be licensed but all consumers can belong to an aggregated group.
Universal service	Establishes a standard-offer service for consumers who do not seek or take power in the competitive marketplace (providers of the service chosen by competitive bidding procedure conducted by the Public Utilities Commission).
Public benefits	The Public Utilities Commission assesses and receives fees to continue existing levels of financial assistance for low-income households. All transmission and distribution utilities collect funds from customers.
Contact	Jim Buckley, Maine Public Utilities Commission, 207-287-3831, http://janus.state.me.us/mpuc/er-page.htm.

Maryland, Senate Bill 300 (1999)⁽⁸⁾
Stranded Cost	Stranded costs are recoverable through a transition charge. The charge will be determined by the Public Service Commission.
Aggregation	An aggregator must obtain a license from the Public Service Commission prior to providing electricity supply services. Aggregation is not allowed for an entity or individual that purchases electricity for its own use or for the use of its subsidiaries or affiliates, a municipal electric utility serving only in its distribution territory, or a combination of government units that purchases electricity for use by the governmental units.
Universal service	The incumbent utility company will obtain and provide back-up generation service in the event that a selected generation company fails to provide service. If a consumer does not choose an alternative supplier, the customer will automatically continue to receive electricity from the incumbent utility company.
Public benefits	The Public Service Commission shall establish and have oversight over a universal service program (USP). Electric customers are eligible for the program if their annual incomes are at or below 150 % of the poverty level. The program will include bill assistance, and weatherization. All customers will contribute to the fund through a charge collected by each electric company.
Contact	http://www.psc.state.md.us/psc/Proceedings/elecgas.htm.

Massachusetts, H.B. 5117 (1997)⁽⁹⁾
Stranded Cost	Utilities must submit a restructuring plan that details how transition costs will be mitigated and a detailed accounting for transition costs eligible for recovery. A utility may choose to divest non-nuclear generating facilities to mitigate transition costs. If the electric company chooses not to sell its existing non-nuclear generation facilities, an electric company's recovery of transition costs will be the net of any market value in excess of book value of the non-divested non-nuclear facilities. The transition costs are recoverable from rate-payers through a non-bypassable transition charge collected by the distribution company.
Aggregation	Municipalities may aggregate load. In addition, all private, non-profit, or co-operative aggregators must be licensed by the Department of Telecommunications and Energy.
Universal service	Consumers choosing not to switch electricity suppliers will be provided a standard service offer from the incumbent utility. For list of standard offer rates see: http://www.magnet.state.ma.us/dpu/restruct/competition/standardoffer.htm.
Public benefits	Through March 1, 2003, the Department of Telecommunications and Energy is required to assess a charge for all consumers (except municipal consumers) to fund energy efficiency activities and demand-side management programs. At least 20 % of the amount expended is to be for low-income residential demand-side management and education programs. The Department of Telecommunications and Energy is also required to assess a charge for the development and promotion of renewable energy projects. By December 31, 1999, requirements for a renewable portfolio standard will be established. Special rates are available for low-income consumers.
Contact	Commission Staff contact at 617-305-3565 http://www.magnet.state.ma.us/dpu/restruct/competition/index.htm .

Montana, Senate Bill 390 (1997)⁽¹⁰⁾
Stranded Cost	The Public Service Commission (PSC) allows recovery of transition costs. The costs that may be recovered include: The unmitigable above-market costs of qualifying facility contracts, including buy out or buydown costs; The unmitigable costs of energy supply related regulatory assets and deferred charges; and For a 4 year period, the unmitigable costs of generation and power purchase contracts owned by investor-owned utilities. The utility must make reasonable efforts to mitigate the costs. Upon PSC approval the transition costs are to be recovered through a non-bypassable charge on all customers (except on those customers with new loads greater than 1,000 kilowatts which were first served by the utility after December 31, 1996). A utility may, after July 1, 1997, apply to the PSC for a determination that certain transition costs may be recovered through the issuance of transition bonds.
Aggregation	An aggregator or market aggregator is an entity, licensed by the Montana Public Service Commission, that aggregates retail customers and purchases electric energy and takes title to electric energy as an intermediary for sale to retail customers.
Universal service	Not addressed in 1997 law (SB 390). Addressed in two bills in 1999 Legislature. The Montana Public Service Commission will choose which supplier will provide default service and determine the supplier's service territory. With Montana Public Service Commission approval, SB 406 (http://161.7.127.14/bills/billhtml/SB0406.htm ) allows residential and small commercial customers to aggregate and become a default supplier. HB 211 provides the same aggregation abilities for municipalities.
Public benefits	A charge will be assessed on all utility customers (assessed at the meter) to ensure continued funding of energy conservation, renewables and low-income energy assistance programs. Beginning January 1, 1999, and until July 1, 2003, 2.4 % of each utility's 1995 retail sales revenue is established as the annual funding level for universal systems benefits programs. A minimum annual funding requirement for low income energy bill and weatherization assistance is established at 17 % of each utility's annual universal system benefits funding level. The annual charge for customers with loads greater than 1,000 kilowatts is the lesser of $500,000 or .9 mills per kilowatt hour purchased. Utilities and large customers receive credit toward their universal system benefits obligation for their internal programs. If a utility's or a large customer's credit does not satisfy the annual funding requirement, then it shall make a payment to the universal systems benefit fund or the universal energy assistance fund. Cooperatives may collectively pool their credits statewide. Investor-owned utilities and cooperatives must file annual reports relating to "universal systems benefits" to the transition advisory committee.
Contact	Will Rosquist, 406-444-6359, http://www.psc.mt.gov/gaselec/elec.htm.

Nevada, AB 366 (1997), SB 438 (1999)⁽¹¹⁾
Stranded Cost	AB 366 requires utilities to submit stranded cost plans to the Public Utilities Commission for approval. The NV Public Utilities Commission (commission) shall determine the recoverable costs associated with the documented assets and obligations of a vertically integrated electric utility and its successor distribution utility that are properly allocable to a particular potentially competitive service. Shareholders must be compensated fully for all such costs determined by the commission. The commission shall take into account the following: The extent to which the utility was legally required to incur the costs of assets and obligations; The extent to which the market value of the assets and obligations exceeds the costs of such assets and obligations; The utility's efforts to increase and realize the market value of any assets and decrease the costs of any obligations; The extent to which the rates previously established by the commission have compensated shareholders for the risk of not recovering the costs of the assets and obligations; and Whether the utility had the discretion to determine whether to incur or mitigate the costs, and the conduct of the utility with respect to the costs of the assets and obligations when compared to other utilities with similar obligations to serve the public. If the commission determines that costs are recoverable, it shall adopt by regulation procedures to provide for the direct and unavoidable recovery from ratepayers. No stranded cost recovery plans have been approved. Public Utilities Commission is currently holding hearings.
Aggregation	An alternative seller may combine two or more customers or any group of customers to provide aggregation service. The Public Utilities Commission may not limit the ability of: (a) An alternative seller to combine customers to provide aggregation service; or (b) Customers to form groups to obtain aggregation service from alternative sellers.
Universal service	The commission shall designate a vertically integrated electric utility or its successor distribution entity to provide electric service to customers who are unable to obtain electric service from an alternative seller or who fail to select an alternative seller. The provider so designated by the commission is obligated to provide electric service to the customers.
Public benefits	AB 366 establishes a Renewable Portfolio Standard. No special rates for low-income consumers.
Contact	Cynthia Messina, NV Public Utilities Commission, 775-687-6007, http://www.state.nv.us/puc/ .

New Hampshire, HB 1392 (1996)⁽¹²⁾
Stranded Cost	The NH public utilities commission is advised to follow these principles: Stranded costs should be determined on a net basis; Utilities have an obligation to take all reasonable measures to mitigate stranded costs; Any recovery of stranded costs should be through a nonbypassable, nondiscriminatory charge; Entry and exit fees are not preferred recovery mechanisms; and Charges to recover stranded costs should apply only to customers within a utility's retail service territory, except for such costs that have resulted from the provision of wholesale power to another utility.
Aggregation	No provision.
Universal service	Default service should be designed to provide a temporary safety net and to assure universal access and system integrity.
Public benefits	Programs and mechanisms that enable residential customers with low incomes to manage and afford essential electricity requirements should be included as a part of the industry restructuring.
Contact	Thomas Getz, NH Public Utilities Commission, 603-271-2431.

New Jersey, S-7 (1999)⁽¹³⁾
Stranded Cost	A utility may recover stranded costs through a market transition charge that shall be collected as a limited-duration non-bypassable charge payable by all of the utility's customers, and through the issuance of transition bonds by the utility or another financing entity approved by the NJ Board of Public Utilities. A utility's ability to assess a market transition charge and issue transition bonds is subject to the Board's approval.
Aggregation	Private and government aggregation permitted. Private aggregators shall register with the Board and provide annual updates of address and related information. Residential customers that elect to purchase generation service through a private aggregator must do so affirmatively and voluntarily, either through written signature or an alternative form of verification. Government aggregators may obtain generation service or electric related service, either separately or bundled, for their own use or as combined with the use of other government aggregators. Government aggregators that are counties or municipalities may obtain generation service, either separately or bundled, for the business and residential customers within the territorial jurisdiction of the government aggregator.
Universal service	The Board shall initiate a formal proceeding to investigate the manner and mechanics by which customers are afforded the opportunity to contract with the incumbent utility or an electric power supplier for customer account services. The Board shall establish the necessary standards for safety, reliability, and testing for meters and information exchange protocols applicable to both electric power suppliers and incumbent utilities that will permit customers to choose a supplier for some or all such customer account services.
Public benefits	A Universal Service Fund has been established in the Board to provide public benefits. The Board will determine the nature of these benefits.
Contact	Deirdra Picou, NJ Board of Public Utilities, 973-648-6135.

New Mexico, SB 428 (1999)⁽¹⁴⁾
Stranded Cost	The NM public regulation commission may allow up to 100% recovery of stranded costs if it finds that recovery: is in the public interest; is necessary to maintain the financial integrity of the public utility; is necessary to continue adequate and reliable service by the public utility; and will not cause an increase in rates to residential or small business customers during the transition period before full competition. The commission shall otherwise order no less than 50% recovery of stranded costs. In quantifying stranded costs, the commission shall consider: mitigation efforts and results; reasonable methods for determining market valuations; standard offer bid prices; and whether the recovery of stranded costs is fair and equitable to customers, utility investors, and the public.
Aggregation	Generation and transmission cooperatives may provide service at retail if they are licensed competitive power suppliers and provide open access in accordance with NM law. A distribution cooperative is subject to the jurisdiction and authority of the commission to the same extent it was regulated by the commission prior to the enactment of restructuring legislation. Distribution cooperatives that are organized pursuant to the laws of another state and whose NM customers make up less than 20% of their total customers may file an application with the commission to be governed by the electricity restructuring laws of the state where they are organized.
Universal service	No provision.
Public benefits	An "electric industry system benefits fund" has been created to provide consumer education and information, as well as low-income energy assistance. The fund consists of money collected as a wires charge that is assessed on a three-hundredths-of-one-cent ($.003) per kilowatt-hour basis as the systems benefits charge collected monthly and paid quarterly to the Dept. of Environment.
Contact	Molly Whitted, NM Public Regulation Commission, 505-827-4661.

Ohio, SB 3 (1999)⁽¹⁵⁾
Stranded Cost	A utility must apply to the OH public utilities commission for the opportunity to receive transition costs. The commission shall determine the total allowable amount of transition costs to be received as transition revenue. The amount shall be the just and reasonable costs of the utility which the commission finds meet all of the following criteria: The costs were prudently incurred; The costs are legitimate, net, verifiable, and directly assignable or allocable to retail electric generation service provided to electric consumers in the state; The costs are unrecoverable in a competitive market; and The utility would otherwise be entitled an opportunity to recover the costs. The commission shall separately identify regulatory assets of the utility that are a part of the total allowable amount of transition costs.
Aggregation	No electric cooperative or governmental aggregator shall provide a competitive retail service to a consumer without first being certified by the commission regarding its managerial, technical, and financial capability to provide that service. The electric cooperative or governmental aggregator must provide a financial guarantee sufficient to protect customers and electric distribution utilities from default. Certification shall be granted pursuant to procedures and standards the commission shall prescribe. A municipal corporation, township, or county may adopt an ordinance or resolution to aggregate and to enter into service agreements for the sale and purchase of electricity.
Universal service	A "universal service fund" has been established to provide funding for low-income customer assistance programs and consumer education. A universal service rider has also been established. The rider shall be a rider on retail electric distribution service rates as such rates are determined by the commission.
Public benefits	A "public benefits advisory board" has been created to ensure that energy services are provided to low-income consumers in an affordable manner.
Contact	Beth Gianforcaro, OH Public Utilities Commission, 614-466-7750.

Oklahoma, SB 500 (1997), SB 888 (1998)⁽¹⁶⁾
Stranded Cost	Procedures shall be established for identifying and quantifying stranded investments and for allocating costs. Mechanisms shall be proposed for the recovery of appropriate amounts of prudently incurred, unmitigable and verifiable stranded costs and investments. Each entity shall be required to propose a recovery plan which establishes its unmitigable and verifiable stranded costs and a limited recovery period. This period shall be no more than seven years and not less than three years.
Aggregation	No provision. The Joint Electric Utility Task Force recommends that load aggregators be licensed and that rules are promulgated by the OK Corporation Commission. Final authority relating to the implementation of the Task Force's recommendations resides with the OK legislature.
Universal service	No provision. The Task Force recommends that local distribution companies continue to provide electric energy and distribution services to customers who do not want to select a new provider.
Public benefits	No provision. The Task Force recommends that the state initiate a program to assist low-income consumers.
Contact	Ken Zimmerman, Oklahoma Corporation Commission, 405-522-3364.

Oregon, SB 1149 (1999)⁽¹⁷⁾
Stranded Cost	The OR public utility commission may determine that full or partial recovery of the costs of uneconomic utility investments are in the public interest. The commission shall allow recovery, through a transition charge, of any otherwise unrecoverable costs arising from or related to an electric company's contractual or legal obligations to the Bonneville Power Administration (BPA), or arising from or related to a failure of the BPA to meet its contractual or legal obligations to the electric company. Recovery shall be made from those classes of consumers for which electric power was purchased from the BPA.
Aggregation	An electric company shall permit retail electricity consumers that are eligible for direct access to voluntarily aggregate their electricity loads.
Universal service	No provision.
Public benefits	An electric company shall collect funds for low-income electric bill payment assistance from its retail electricity consumers. The commission shall determine each company's proportionate share of the total amount to be collected, $10 million.
Contact	Ron Karten, Oregon Public Utility Commission, 503-378-8962.

*Pennsylvania, PA. STAT. ANN. tit. 66, § 2801 et seq.* (1996)**⁽¹⁸⁾
Stranded Cost	Every customer accessing the transmission or distribution network shall pay a competitive transition charge to the electric distribution company in whose certificated territory that customer is located. The transition charge represents a utility's net electric generation costs, which traditionally would be recoverable under a regulated environment, but may not be recoverable in a competitive market. Each utility shall file with the commission a recovery plan, including a proposed competitive transition charge and supporting documentation. A utility may also apply to the PA public utility commission for a qualified rate order for some or all of its transition or stranded costs.
Aggregation	The commission shall establish standards to ensure that all retail customer classes may choose to purchase electricity through an aggregator. An aggregator must have a commission-issued license before it may act as an electric generation supplier.
Universal service	Each electric distribution company shall submit to the commission an updated universal service and energy conservation plan every 3 years beginning February 28, 2000. The components of the plan may include a description of programs, policies, and protections to assist low-income customers. The commission will determine if a plan meets the stated universal service goal of protecting low-income customers.
Public benefits	The commission shall encourage the use of community-based organizations that have the necessary technical and administrative expertise to be the direct providers of services or programs which reduce energy consumption or otherwise assist low-income customers to afford electric service.
Contact	Eric Levis, PA Public Utility Commission, 717-787-5722.

Rhode Island, H-8124B (1996)⁽¹⁹⁾
Stranded Cost	An electric distribution company that purchases power at wholesale from a wholesale power supplier under an all-requirements contract shall be authorized to execute an agreement terminating, in whole or in part, such contract on terms that require payment of a contract termination fee. The distribution company shall be allowed to recover such fee through a nonbypassable transition charge paid by all customers of the distribution company. The fee shall include the following costs of the wholesale supplier: Regulatory assets, including those of affiliated fuel suppliers, and obligations for post-retirement health care costs; Nuclear obligations, including decommissioning costs and costs independent of operation; Above-market payments for purchased power together with reasonable buyout or buydown payments; and Net unrecovered costs of generating plants, including natural gas conversion costs and above-market pipeline demand charges.
Aggregation	Purchasing cooperatives may be organized at any time. These cooperatives may consist of any group of electricity consumers that has organized for the purpose of negotiating for electric power from nonregulated power producers. Purchasing cooperatives are not required to be legal entities, and are prohibited from engaging in the resale of electric power. Consumers may withdraw from a purchasing cooperative at any time by providing 30 days notice to the cooperative and the nonregulated power producer with which a purchasing cooperative has reached an agreement.
Universal service	Within 3 months after retail access is available to 40% or more of the kilowatt-hour sales in New England and extending through year 2009, each electric distribution company shall arrange with its wholesale power supplier for a standard power supply offer to customers who have not elected to enter into power supply arrangements with other nonregulated power suppliers. Within 3 months after retail access is available to 40% or more of the kilowatt-hour sales in New England, each distribution company will also arrange for a last-resort power supply for customers who are no longer eligible to receive service under the standard offer and not adequately supplied by the market because they are unable to obtain or retain electric service from nonregulated power producers.
Public benefits	No provision.
Contact	Luly Massaro, RI Public Utility Commission, 401-222-3500.

Texas, SB 7 (1999)⁽²⁰⁾
Stranded Cost	A utility is allowed to recover all of its net, verifiable, nonmitigable stranded costs that are incurred in purchasing power and providing generation service. A utility may: securitize 100% of its regulatory assets and up to 75% of its estimated stranded costs and recover those charges through a transition charge, in accordance with a financing order issued by the TX public utility commission; implement, under bond, a nonbypassable charge of up to 100% of its estimated stranded costs; or use a combination of the two methods. A utility shall pursue commercially reasonable means to reduce its potential stranded costs.
Aggregation	Aggregators, municipal aggregators, and political subdivision aggregators may not provide aggregation services unless they are registered with the commission.
Universal service	The commission shall designate providers of last resort that shall offer standard retail service packages for each class of customers designated by the commission at a fixed, nondiscountable rate approved by the commission. A provider of last resort shall provide such package to any requesting customer in the territory for which it has been designated the provider of last resort.
Public benefits	A system benefit fund has been created to provide funding for programs to assist low-income electric customers
Contact	Terry Hadley, TX Public Utility Commission, 512-936-7135.

Virginia, SB 1269 (1999)⁽²¹⁾
Stranded Cost	Just and reasonable net stranded costs, to the extent that they exceed zero value in total for the incumbent utility, shall be recoverable through either capped rates or wire charges.
Aggregation	Each person seeking to aggregate electric energy within Virginia on and after January 1, 2002, shall obtain a license from the VA state corporation commission. In establishing aggregator licensing schemes and requirements, the commission may differentiate between aggregators representing retail customers only, those representing suppliers only, and those representing both retail customers and suppliers. Counties, cities, towns, and other political subdivisions of Virginia may, at their election and upon authorization by majority votes of their governing bodies, aggregate electrical energy and demand requirements for the purpose of negotiating the purchase of electrical energy requirements from any licensed supplier within Virginia.
Universal service	The commission shall determine the components of default service and establish one or more programs making such services available to retail customers. Default service is defined as service made available to retail customers who do not affirmatively select a supplier, who are unable to obtain service from an alternative supplier, or who have contracted with an alternative supplier who fails to perform.
Public benefits	A Legislative Transition Task Force has been established to work collaboratively with the commission during the phase-in of retail competition. The Task Force shall examine energy assistance programs for low-income households.
Contact	Ken Schrad, Virginia State Corporation Commission, 804-371-9206.

Footnotes

1. ^(back)H.B. 2663 applies only to public power entities (PPEs), such as the Salt River Project, cities and towns, electric and irrigation districts and the Arizona Power Authority, which are not regulated by the ACC, and require statutory authority to open their service territories to competition in the sale of electric generation service. H.B. 2663 is available at: http://www.azleg.state.az.us/legtext/43leg/2r/bills/h651-700.htm. The Arizona Corporation Commission (ACC) has authority over all other electric utilities in the state. The ACC issued its stranded cost rule on April 27, 1999 and is available at: http://www.cc.state.az.us/utility/electric/rules.htm. The ACC adoped its "Retail Electric Competition Rules" on September 29, 1999 (Title 14, Chapter 2, Article 16).

2. ^(back)http://www.arkleg.state.ar.us/ftproot/acts/1999/htm/act1556.htm.

3. ^(back)PDF version:http://www.cpuc.ca.gov/electric_restructuring/er_home_page.htm.

4. ^(back)PDF version available at (scroll to bottom of page):
http://www.dpuc.state.ct.us/electric.nsf/All?OpenView.

5. ^(back)Summary available at:
http://www.state.de.us/delpsc/major/erestructuring.html#hb10.

6. ^(back)http://www.legis.state.il.us/publicacts/pubact90/acts/90-0561.html.

7. ^(back)http://janus.state.me.us/mpuc/er-page.htm.

8. ^(back)http://mlis.state.md.us/1999rs/billfile/sb0300.htm.

9. ^(back)http://www.magnet.state.ma.us/dpu/restruct/competition/index.htm.

10. ^(back)http://www.psc.mt.gov/gaselec/mcaelec.htm.

11. ^(back)http://www.state.nv.us/puc/electric/restruct.htm.

12. ^(back)http://www.puc.state.nh.us/hb1392.html.

13. ^(back)http://www.bpu.state.nj.us/wwwroot/energy/energy.htm/.