§ 39-1-27 - Electric distribution companies required to file restructuring plans.
SECTION 39-1-27
§ 39-1-27 Electric distribution companiesrequired to file restructuring plans. – (a) Each electric distribution company shall file with the commission a planfor transferring ownership of generation facilities into a separate affiliateof the electric distribution company. The transmission facilities owned by theelectric distribution company also may be transferred to an affiliated electrictransmission company at a price that shall equal the book value of thetransmission facilities on the electric distribution company's accounts net ofdepreciation and deferred taxes as the date of transfer, but such a transfer isnot required. The generation plant, equipment, and facilities owned by anelectric distribution company shall be transferred to an affiliate that is anonregulated power producer at a price that shall equal the book value of thegeneration plant, equipment, and facilities on the electric distributioncompany's accounts net of depreciation and deferred taxes as of the date of thetransfer. Consistent with the schedule for implementing retail access in §39-1-27.3, each electric transmission company shall file tariffs with thefederal energy regulatory commission (FERC) and electric distribution companiesshall file tariffs with the commission. The tariffs will provide the terms,conditions and rates for nondiscriminatory access to transmission anddistribution facilities to wholesale and retail customers and to nonregulatedpower producers. The tariffs shall (1) conform to the standards, policies, andrequirements of the federal energy regulatory commission or the commission asappropriate with respect to nondiscriminatory access to transmission anddistribution services, (2) fulfill such standards with respect to bothtransmission and distribution services for the benefit of both wholesale andretail customers and their suppliers, and (3) provide retail access inaccordance with the schedule set forth in § 39-1-27.3. For purposes ofthis section, "nondiscriminatory access" means access to transmission anddistribution services on rates, terms and conditions found to be reasonable bythe FERC or the commission as appropriate and applied consistently to allcustomers in a rate class regardless of their supplier. When establishing termsand conditions for distribution service, the commission shall implementstandards, policies, and requirements consistent with those established by thefederal energy regulatory commission for transmission service unless itdetermines that alternative terms and conditions are in the public interest.
(b) The commission shall review the plan within six (6)months of filing and if the plan is in compliance with chapter 3 of this title,shall authorize the property transfers, securities issuances, and affiliatetransactions pursuant to this title and shall grant all necessary regulatoryapprovals. All existing state and local rights, authorizations, and approvals,including but not limited to, permits, licenses, locations, indentures, leases,orders, or similar rights associated with the ownership and operation of plantand equipment, shall be deemed transferred with the associated plant andequipment upon the commission's authorization of the transfer effective as ofthe date of transfer. Notwithstanding any provisions of this section, if theelectric distribution company's wholesale power supplier chooses to transferits generation assets to a nonaffiliate of the electric distribution companyfor purposes of carrying out the market valuation required by §39-1-27.4(g), and such transfer to a nonaffiliate is specified in the electricdistribution company's restructuring plan filed with the commission pursuant tosubsection (a) of this section, the transfer of the electric distributioncompany's interest in the generation facilities may be made directly to thenonaffiliate. In the case of such a transfer directly to a nonaffiliate, allof the state and local rights, authorizations and approvals, including thoseenumerated above, shall be deemed transferred with the associated plant andequipment upon the commission's authorization of the transfer effective as ofthe date of the transfer.
(c) The electric distribution company shall implement thecorporate reorganizations and property transfers specified in suchrestructuring plan, terminate its all requirements contract with its wholesalepower supplier on the terms set forth in § 39-1-27.4 and provide retailaccess for all customers in Rhode Island with a standard offer as set forth in§ 39-1-27.3 no later than three (3) months after retail access isavailable to forty percent (40%) or more of the kilowatt-hour sales in NewEngland. The commission may extend this time if it determines that additionaltime is necessary to implement the transactions on reasonable terms and inaccordance with a reasonable schedule; provided, however, that nothing in thissection shall be construed to limit the effect of § 39-1-27.3 or permitthe commission to unduly discriminate in providing retail access among orwithin rate classes.
(d) Following the complete implementation of therestructuring plans, electric distribution companies shall be prohibited fromselling electricity at retail and from owning, operating, or controllinggenerating facilities, although such facilities may be owned by affiliates ofelectric distribution companies. For purposes of this paragraph providing thestandard offer service and last resort power supply in accordance withsubsections (d) and (f) of § 39-1-27.3 shall not be construed as sellingelectricity at retail.
(e) Following the termination of the electric distributioncompany's contracts with its wholesale power supplier, the wholesale powersupplier shall become a nonregulated power producer, and shall be free, subjectto the requirements of the standard offer set forth in § 39-1-27.3(e) andretail electric licensing commission plan requirements pursuant to §39-1-27.1 to sell electricity generated from each of its facilities on eitherthe wholesale or retail markets at market prices, either directly or through anaffiliate, which shall also become a nonregulated power producer. The formerwholesale power supplier and its affiliates shall be free to apply to becomeexempt wholesale generators pursuant to § 32 of the Public Utility HoldingCompany Act of 1935, 15 U.S.C. § 79z-5a, and other federal law, rules andregulations, and each and every generating facility of the former wholesalepower supplier shall become an eligible facility pursuant to that statute.Accordingly, the legislature hereby finds and declares that the division hassufficient regulatory authority, resources, access to books and records toexercise its duties; and that the full participation of former wholesale powersuppliers and affiliated nonregulated power producers in the market and thedesignation of each of the former wholesale power supplier's facilities aseligible facilities will benefit consumers, is consistent with state law, willnot provide any unfair competitive advantage by virtue of their status as aformer wholesale power supplier or as affiliates of electric distributioncompanies, and is in the public interest.
(f) Although reducing air emissions from power plants is agoal of electricity industry restructuring, power plants in Rhode Islandalready have low emissions relative to their counterparts in other states. Forthis reason, it is unnecessary for the restructuring plans required by thissection to address in-state air emission reductions. However, to the extent awholesale power supplier receiving contract termination fees pursuant to §39-1-27.4(b)(4) owns and operates as of December 31, 1995 fossil firedgeneration in another state which does not meet air emission standardsapplicable as of that date to new electric generating facilities in that state,such wholesale power suppliers shall cooperate with the appropriateenvironmental officials in the state or states where such generating facilitiesare located to develop a plan for reducing the emissions of nitrogen oxides,sulfur dioxide, and particulate matter from such plants on an overall basisthrough retirements, replacements, controls or offsets or any combination ofthe above toward the air emissions standards applicable to new electricgenerating facilities in effect in the state or states where the plants arelocated as of January 1, 1996. Such plans shall be implemented in connectionwith electric industry restructuring in the state or states where thegenerating facilities are located.
(g) An electric distribution company, whether public,quasi-municipal or investor owned, that as of January 1, 1996 did not purchasepower at wholesale from a wholesale power supplier under an all requirementscontract shall include proposals for recovering transition costs consistentwith the elements which would be comparable in nature to the elements includedin termination fees pursuant to § 39-1-27.4(b) through (g) and forproviding a standard offer consistent with requirements of § 39-1-27.3(d)in its plan filed with the commission pursuant to this section. The filing byan electric distribution company that is a quasi-municipal corporation shallalso address any unique circumstances affecting the electric distributioncompany including special contract requirements or charter restrictions and theconditions that the quasi-municipal corporation must satisfy in order toparticipate in retail competition. In reviewing the filing and determining theappropriate level of transition cost recovery, the commission shall applystandards consistent with those contained in § 39-1-27.4(b) through (g)and with this subsection. The commission shall be authorized to take any actionor to grant any approval necessary to maintain hydro-electric power purchasesfrom the Niagara and St. Lawrence power projects by quasi-municipalcorporations. Notwithstanding any other provision of this section,quasi-municipal electric distribution companies that purchase hydro-electricpower from the Niagara and St. Lawrence power projects shall be authorized tocontinue to resell such power to residential customers within their serviceterritories. After notice and public hearing, the commission may exemptelectric distribution companies subject to this paragraph from: (1) therequirement to transfer ownership of generation and transmission facilities toaffiliated companies pursuant to subsection (a); and (2) the prohibitionagainst selling electricity at retail pursuant to subsection (d) of thissection with respect to sales within the service territory of such electricdistribution company, if it determines that such exemptions are in the publicinterest.
(h) With the exception of the requirements of the standardoffer set forth in § 39-1-27.3(e) and (f) and retail electric licensingcommission plan requirements pursuant to § 39-1-27.1, nothing in thissection shall be construed or interpreted to constrain the application ofanti-trust laws to nonregulated power producers, whether affiliated or not withan electric distribution company.