2002 Legislation
Print Friendly

SENATE BILL NO. 1505 – Idaho Electricity Authority created

SENATE BILL NO. 1505

View Daily Data Tracking History

View Bill Text

View Statement of Purpose / Fiscal Impact



Text to be added within a bill has been marked with Bold and
Underline. Text to be removed has been marked with
Strikethrough and Italic. How these codes are actually displayed will
vary based on the browser software you are using.

This sentence is marked with bold and underline to show added text.

This sentence is marked with strikethrough and italic, indicating
text to be removed.

Daily Data Tracking History



S1505......................................................by STATE AFFAIRS
IDAHO ELECTRICITY AUTHORITY - Amends and adds to existing law to provide
for the creation of the Idaho Electricity Authority; to provide powers of
the director of the authority; to provide regulations for the sale of power
by the authority; to state conditions where the director can contract with
someone other than the United States for power; to provide for conditions
for the purchase of facilities by the authority; to provide for the
approval of rates; to state criteria for the return on investment to the
authority; to provide for contracting with public utilities; to provide for
the procurement of power from public utilities; to establish an Idaho
Electricity Authority Fund; to provide for regulation by the Public
Utilities Commission; to limit application regarding service areas for
publicly owned utilities; to provide for commencement and cessation of
activities; and to provide for bonding.
                                                                        
03/05    Senate intro - 1st rdg - to printing
03/06    Rpt prt - to St Aff

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  Second Regular Session - 2002
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                                    SENATE BILL NO. 1505
                                                                        
                                 BY STATE AFFAIRS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO THE IDAHO ELECTRICITY AUTHORITY; AMENDING SECTION  50-2502,  IDAHO
  3        CODE,  TO FURTHER DEFINE "PUBLIC UTILITY" TO INCLUDE THE IDAHO ELECTRICITY
  4        AUTHORITY, TO PROVIDE REFERENCE TO THE STATE OF IDAHO AND TO MAKE A  TECH-
  5        NICAL  CORRECTION;  AMENDING  SECTION  61-332B, IDAHO CODE, TO REFERENCE A
  6        CODE SECTION; AND AMENDING TITLE 61, IDAHO CODE, BY THE ADDITION OF A  NEW
  7        CHAPTER  14,  TITLE 61, IDAHO CODE, TO PROVIDE A DECLARATION OF POLICY, TO
  8        DEFINE TERMS, TO PROVIDE THE POWERS OF THE DIRECTOR OF THE  AUTHORITY,  TO
  9        CREATE  AND  GIVE  THE DUTIES OF THE AUTHORITY, TO PROVIDE REGULATIONS FOR
 10        SALE OF POWER BY THE AUTHORITY, TO STATE CONDITIONS WHERE THE DIRECTOR CAN
 11        CONTRACT WITH SOMEONE OTHER THAN THE UNITED STATES FOR POWER,  TO  PROVIDE
 12        FOR  FINDINGS  BY THE DIRECTOR AND TO DEFINE A TERM, TO PROVIDE CONDITIONS
 13        FOR PURCHASE OF FACILITIES BY THE AUTHORITY, TO PROVIDE FOR  THE  APPROVAL
 14        OF  RATES,  TO GIVE REQUIREMENTS FOR ADMINISTRATION OF CONTRACTS, TO STATE
 15        CRITERIA FOR RETURN ON INVESTMENT TO THE AUTHORITY, TO  PROVIDE  FOR  CON-
 16        TRACTING  WITH  PUBLIC  UTILITIES,  TO PROVIDE RULES FOR EXTENSION OF CON-
 17        TRACTS BETWEEN A PUBLIC UTILITY AND THE AUTHORITY, TO PROVIDE FOR THE PRO-
 18        CUREMENT OF POWER FROM PUBLIC UTILITIES, TO ESTABLISH AN IDAHO ELECTRICITY
 19        AUTHORITY FUND, TO PROVIDE FOR REGULATION BY THE PUBLIC UTILITIES  COMMIS-
 20        SION,  TO  PROVIDE  THAT  STATE  AGENCIES  SHALL PROVIDE ASSISTANCE TO THE
 21        AUTHORITY UPON REQUEST, TO LIMIT APPLICATION REGARDING  SERVICE  AREAS  OF
 22        PUBLICLY  OWNED  UTILITIES,  TO  DETERMINE THE AUTHORITY'S ELIGIBILITY FOR
 23        TAXATION, TO PROVIDE FOR COMMENCEMENT OF ACTIVITIES, TO PROVIDE FOR CESSA-
 24        TION OF ACTIVITIES, TO PROVIDE FOR BONDING AND TO PROVIDE SEVERABILITY.
                                                                        
 25    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 26        SECTION 1.  That Section 50-2502, Idaho Code, be, and the same  is  hereby
 27    amended to read as follows:
                                                                        
 28        50-2502.  DEFINITIONS.  As  used  in this chapter, the following words and
 29    phrases and any variations thereof shall have the following meanings:
 30        (1)  "Communication service" means the  transmission  of  intelligence  by
 31    electrical  means,  including,  but  not  limited  to,  telephone,  telegraph,
 32    messenger-call,  clock, police, fire alarm and traffic control circuits or the
 33    transmission of standard television or radio signals.
 34        (2)  "Convert" or "conversion" means the removal of all or any part of any
 35    existing overhead electric or communications facilities  and  the  replacement
 36    thereof  with  underground electric or communication facilities constructed at
 37    the same or different locations.
 38        (3)  "Electric or communication facilities" means any  works  or  improve-
 39    ments  used  or useful in providing electric or communication service, includ-
 40    ing, but not limited to, poles, supports, tunnels, manholes, vaults, conduits,
 41    pipes, wires, conductors, guys, stubs, platforms,  crossarms,  braces,  trans-
 42    formers,  insulators,  cut-outs,  switches,  capacitors, meters, communication
 43    circuits, appliances, attachments, and appurtenances.  "Communication  facili-
                                                                        
                                           2
                                                                        
  1    ties"  shall  not include facilities used for the transmission of intelligence
  2    by microwave or radio, apparatus cabinets or outdoor public telephones.
  3        (4)  "Extension" or "extending" means any continuation, either overhead or
  4    underground, of existing distribution or transmission facilities or  the  con-
  5    struction  of  new  electric  or communication facilities which are reasonably
  6    required by prudent electrical or communication practices.
  7        (5)  "Governing body" means the board of county commissioners or mayor and
  8    council or board of directors as may be appropriate depending on  whether  the
  9    improvement district is located in a county or within a city.
 10        (6)  "Ordinance" shall be construed to mean resolution where the governing
 11    body properly acts by resolution and vice versa.
 12        (7)  "Overhead  electric  or  communication  facilities" means electric or
 13    communication facilities located, in whole or in part, above  the  surface  of
 14    the ground.
 15        (8)  "Public utility" means any one (1) or more, public or private persons
 16    or  corporations  or  the Idaho electricity authority that provide electric or
 17    communication service to the public by  means  of  electric  or  communication
 18    facilities and shall include the state of Idaho or any city, special district,
 19    or  public  corporation that provides electric or communication service to the
 20    public by means of electric or communication facilities.
 21        (9)  "Underground electric or communication facilities" means electric  or
 22    communication  facilities located, in whole or in part, beneath the surface of
 23    the ground.
 24        (10) A "lot" or "parcel" of land means a single tract or  parcel  of  land
 25    containing  five (5) acres or less. No single tract or parcel of property con-
 26    taining more than five (5) acres may be included  in  any  district  organized
 27    under  this  chapter,  unless located within an incorporated city, without the
 28    consent of the owner or owners thereof.
 29    Definitions in section 50-1702, Idaho Code, shall be applicable  to  any  sec-
 30    tions  of  chapter  17,  title 50, Idaho Code, incorporated in this chapter by
 31    reference.
                                                                        
 32        SECTION 2.  That Section 61-332B, Idaho Code, be, and the same  is  hereby
 33    amended to read as follows:
                                                                        
 34        61-332B.  ELECTRIC  SUPPLIER  PROHIBITED  FROM SERVING CONSUMERS OR FORMER
 35    CONSUMERS OF ANOTHER ELECTRIC SUPPLIER. Except as provided in section 61-1405,
 36    Idaho Code, nNo electric supplier shall supply or furnish electric service  to
 37    any  electric service entrance that is then or had at any time previously been
 38    lawfully connected for electric service to facilities of another electric sup-
 39    plier except as provided in this act.
                                                                        
 40        SECTION 3.  That Title 61, Idaho Code, be, and the same is hereby  amended
 41    by  the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
 42    ter 14, Title 61, Idaho Code, and to read as follows:
                                                                        
 43                                      CHAPTER 14
 44                             IDAHO ELECTRICITY AUTHORITY
                                                                        
 45        61-1401.  DECLARATION OF POLICY. (1) The legislature  finds  and  declares
 46    that  the power system on the Columbia River and its tributaries is a resource
 47    of low-cost hydroelectric power of which Idaho citizens should enjoy the bene-
 48    fits and it is incumbent upon the legislature of the state of Idaho to protect
 49    the interests of the people of the state of Idaho by protecting  the  benefits
 50    of the Columbia River power system and all rivers tributary thereto.
                                                                        
                                           3
                                                                        
  1        (2)  The  legislature further finds and declares that it is the purpose of
  2    this chapter to:
  3        (a)  Provide, through the Idaho electricity authority established by  this
  4        chapter,  low power rates to customers in Idaho who might be deleteriously
  5        impacted by electric utility deregulation at the federal and regional lev-
  6        els or by rising power costs generally;
  7        (b)  Make possible rates for power consumers in Idaho at the lowest gener-
  8        ating costs consistent with good business principles and protection of the
  9        environment; and
 10        (c)  Distribute power obtained by the Idaho electricity authority from the
 11        Columbia River power system and other sources at cost to Idaho consumers.
 12        (3)  The legislature further finds and declares  that  it  is  legislative
 13    intent  that  the  purpose  of  this chapter is to protect the employees of an
 14    investor owned public utility from a takeover  or  purchase  of  the  investor
 15    owned  public  utility  and  it is legislative intent that this chapter not be
 16    implemented until an application is filed with the public utilities commission
 17    for purchase, takeover or merger of an investor owned public utility that pro-
 18    vides for sale of electric energy.
                                                                        
 19        61-1402.  DEFINITIONS. As used in this chapter:
 20        (1)  "Authority" means the Idaho electricity authority.
 21        (2)  "Bonneville power administration" means the Bonneville power adminis-
 22    tration, its successor or other agency or corporation  of  the  United  States
 23    authorized  to  sell  energy  generated  by  federal facilities located in the
 24    states of Idaho, Oregon, Washington and Montana.
 25        (3)  "Commission" means the public utilities commission of Idaho.
 26        (4)  "Cooperative corporation" means a cooperative corporation  furnishing
 27    electric  service  in  the  state of Idaho to its consumer members who own and
 28    operate the cooperative.
 29        (5)  "Cost" means all commonly accepted accounting  costs  including,  but
 30    not  limited  to,  depreciation,  interest  on  borrowed funds, maintenance of
 31    reserves for uncollectible accounts and other contingencies, and  accumulation
 32    of working capital over a reasonable period of time.
 33        (6)  "Director" means the director of the Idaho electricity authority.
 34        (7)  "Federal Columbia River power system" means those electric generating
 35    facilities, power from which is marketed in whole or in part by the Bonneville
 36    power  administration including, but not limited to, generating facilities not
 37    owned by the federal government, power from which is purchased by  the  Bonne-
 38    ville  power  administration, or electric generating facilities on tributaries
 39    to the Columbia River.
 40        (8)  "Municipality" means any city, municipal corporation or other politi-
 41    cal subdivision in this state.
 42        (9)  "Power" means electricity in any  form  capable  of  being  measured,
 43    transmitted and sold for use by customers of the authority.
 44        (10) "Public  utility" has the meaning given the term "electrical corpora-
 45    tion" in section 61-119, Idaho Code.
 46        (11) "Publicly owned utility" means an electric utility owned or operated,
 47    in whole or in part, by a municipality or cooperative electrical association.
 48        (12) "Purchase" means acquisition by purchase, exchange, barter,  gift  or
 49    forgiveness of indebtedness or amounts owed.
 50        (13) "Sell"  means  to give up by sale, exchange, barter, gift or forgive-
 51    ness of indebtedness or amounts owed.
 52        (14) "State" means the state of Idaho.
                                                                        
 53        61-1403.  DIRECTOR. (1) Subject to confirmation by the senate in the  man-
                                                                        
                                           4
                                                                        
  1    ner  provided  by  section  6, article IV, of the constitution of the state of
  2    Idaho, the governor shall  appoint  the  director  of  the  Idaho  electricity
  3    authority in whom shall repose all the powers and duties of the authority. The
  4    director  shall serve for a term of four (4) years at the pleasure of the gov-
  5    ernor.
  6        (2)  The director shall:
  7        (a)  Serve as the administrative head of the authority and shall supervise
  8        its day-to-day functions;
  9        (b)  Have authority, within applicable  budget  limitations  and  substan-
 10        tially  in  accordance  with  chapter  53,  title 67, Idaho Code, to hire,
 11        assign, reassign and coordinate personnel within the authority and to  fix
 12        their compensation;
 13        (c)  Contract  for  or  procure on a fee or part-time basis, or both, such
 14        expert, technical or other professional services as he may require for the
 15        discharge of his duties;
 16        (d)  Be authorized to participate or intervene in  any  proceeding  before
 17        any  public officer, commission, court or body of the United States or any
 18        state or political subdivision thereof for the purpose of representing the
 19        interests of the authority's power consumers which relate to the  purposes
 20        for which the authority is created;
 21        (e)  Be authorized to delegate to any employees of the authority the exer-
 22        cise  or discharge, in the director's name, of any power, duty or function
 23        vested in or imposed by law upon the director; provided however, the power
 24        to make contracts obligating  the  authority  for  payment  in  an  amount
 25        greater  than  fifty thousand dollars ($50,000) and to establish rates for
 26        sales of electric energy shall not be delegated; and
 27        (f)  Adopt rules and issue orders to carry out his duties and those of the
 28        authority substantially in accordance with chapter  52,  title  67,  Idaho
 29        Code.
 30        (3)  The  official  act of any person acting in the director's name and by
 31    his authority pursuant to paragraph (e) of  subsection  (2)  of  this  section
 32    shall be considered to be an official act of the director.
                                                                        
 33        61-1404.  CREATION OF AND DUTIES OF AUTHORITY. There is hereby created the
 34    Idaho  electricity  authority,  an  independent  body corporate politic, which
 35    shall have the following powers and duties:
 36        (1)  To make timely application for, and to purchase power from, the  Bon-
 37    neville  power  administration  or  Canadian power generating entities, and to
 38    purchase power from public utilities and other sources;
 39        (2)  To purchase generation, transmission and distribution  lines  and  to
 40    generate electric power;
 41        (3)  To  provide for the transfer of power marketing or transmission func-
 42    tions of the Bonneville power administration to the authority;
 43        (4)  To sell power at retail to electricity consumers as provided in  sec-
 44    tion 61-1405, Idaho Code;
 45        (5)  If  power acquired under subsections (1) and (2) of this section tem-
 46    porarily is surplus to the needs of the authority's consumers, to  sell  power
 47    at  wholesale  to  any  person within the terms of the agreements by which the
 48    authority obtained the power;
 49        (6)  Sell power to, or exchange power with, any other entity or person  if
 50    such  sale  or exchange results in a greater, more economical or more reliable
 51    supply of power to the authority;
 52        (7)  To contract with any person for management, consulting, rate  design,
 53    economic analysis and other similar services as the authority considers neces-
 54    sary and convenient to carry out the policies and purposes of this chapter;
                                                                        
                                           5
                                                                        
  1        (8)  To establish rates for its sale of power to its consumers in the man-
  2    ner set forth in section 61-1409, Idaho Code, and to collect receipts from its
  3    consumers for its sales and other services;
  4        (9)  Within  the  limitations set forth in section 61-1408, Idaho Code, to
  5    acquire  by purchase or lease real and personal  property  necessary  for  the
  6    operation of the authority; and
  7        (10) To  perform  any  function or service that is considered necessary to
  8    carry out the policies and purposes of this chapter including, but not limited
  9    to, organizing consumers or groups of consumers within the state or  areas  of
 10    the state into buying consortiums for purposes of purchasing electric power.
                                                                        
 11        61-1405.  REGULATIONS  FOR SALE OF POWER. (1) The authority may enter into
 12    contracts or agreements with a public utility to serve customers within a ter-
 13    ritory served by or allocated to that public  utility.  If  a  publicly  owned
 14    utility  providing  electric  utility  service  requests the authority to sell
 15    power for consumption by its consumers, the director, in his  discretion,  may
 16    authorize  power  sales for such purpose to those consumers or to the publicly
 17    owned utility after finding that the power requirements of  the  consumers  of
 18    the authority are satisfied.
 19        (2)  Except  as provided in subsection (1) of this section and subsections
 20    (4) and (5) of section 61-1404, Idaho Code, the authority shall sell  electric
 21    energy  only  to  consumers  within the service area acquired pursuant to this
 22    section. A map of such service area shall be filed with the commission.
 23        (3)  All contracts or agreements for allocation of customers  between  the
 24    authority  and a public utility shall be governed by the provisions of section
 25    61-333, Idaho Code.
 26        (4)  Except as provided in subsection (1) of this  section,  and  notwith-
 27    standing  sections  61-332B and 61-332C, Idaho Code, or rules adopted thereun-
 28    der, upon commencement of service by the authority, no person other  than  the
 29    authority  may  provide electric utility service to a consumer within the area
 30    served by the authority unless written authorization to serve the consumer  or
 31    consumers described therein is obtained from the authority.
                                                                        
 32        61-1406.  CONDITIONS  TO  CONTRACT  POWER. Before executing a contract for
 33    purchase of power from an entity other than the United  States,  the  director
 34    shall:
 35        (1)  Determine  the  amount  of power sold by each public utility or other
 36    entity to consumers in the state in the year last preceding;
 37        (2)  Determine for each public utility the ratio that  the  amount  deter-
 38    mined  pursuant to subsection (1) of this section bears to the total amount of
 39    power sold by public utilities to consumers in the state in that year and con-
 40    vert that ratio to a percentage; and
 41        (3)  Offer to purchase from each public utility  that  percentage  of  the
 42    requirements  of  the  authority  to  be obtained from entities other than the
 43    United States which is equal to the percentage determined pursuant to  subsec-
 44    tion  (2)  of this section, up to the amount determined pursuant to subsection
 45    (1) of this section.
                                                                        
 46        61-1407.  FINDING BY DIRECTOR. (1) Before executing a  contract  for  pur-
 47    chase  of  power  from  any  entity other than the United States or any entity
 48    other than a public utility, the director shall find that the  people  of  the
 49    state of Idaho would receive a greater benefit from that purchase than if that
 50    purchase would be made from a public utility.
 51        (2)  For  the purposes of subsection (1) of this section, "public utility"
 52    shall mean a public utility, or its corporate successor, which on  January  1,
                                                                        
                                           6
                                                                        
  1    2002, provided electric service to consumers in the state.
                                                                        
  2        61-1408.  PURCHASE  OF  FACILITIES.  (1)  The  authority  may  purchase or
  3    acquire facilities, structures, land or equipment  used by a public utility to
  4    generate, transform, distribute or measure the use of power as set out in sub-
  5    section (2) of this section.
  6        (2)  In order to qualify as a preference consumer  in  sales  of  electric
  7    energy  from  the United States or to provide lower power costs to the state's
  8    residents, the authority may acquire real and personal property of the follow-
  9    ing types and descriptions by purchase or lease:
 10        (a)  Electric use meters for measurement of the amount of  power  consumed
 11        by  any consumer of the authority or for measuring power deliveries to the
 12        authority;
 13        (b)  Transformers and associated land, materials  and  equipment  used  to
 14        reduce  current from voltages suitable for transmission or distribution to
 15        voltage or voltages suitable for household or farm use; and
 16        (c)  Such land, conduits, lines, poles and associated material  or  equip-
 17        ment  used  to carry current from the point of transformance to voltage or
 18        voltages suitable for household or farm use to the consumer's electric use
 19        meter.
                                                                        
 20        61-1409.  RATES. (1) All schedules of rates for  sales  of  power  by  the
 21    authority  shall  be  approved  by the public utilities commission in the same
 22    manner as set forth in chapter 5, title 61, Idaho Code, for public utilities.
 23        (2)  The rates for sales of power shall recover the costs to the authority
 24    of operating and providing service to its consumers and  shall  be  sufficient
 25    for  the  authority  to be self-supporting without need for continuing support
 26    from the general account in the state operating fund.
 27        (3)  The authority shall not be operated for gain or profit or as a source
 28    of general revenue for the state.
                                                                        
 29        61-1410.  ADMINISTRATION OF CONTRACTS. (1) Except in  an  emergency,  each
 30    contract  executed  by  the authority in an amount greater than fifty thousand
 31    dollars ($50,000) for the services to be performed for the authority by a pub-
 32    lic utility shall be submitted to the commission for review  prior  to  execu-
 33    tion.
 34        (2)  Upon  receipt  of  a  proposed  contract, the commission shall within
 35    sixty (60) days thereof:
 36        (a)  If in the commission's opinion it meets the requirements set forth in
 37        section 61-1411, Idaho Code, favorably recommend the proposed contract; or
 38        (b)  If it fails to meet such requirements, return it to the director with
 39        the commission's suggestions for modification of the contract  or  reasons
 40        why the contract should not be executed.
 41        (3)  If  the  contract  is returned by the commission, the director, after
 42    considering the commission's stated reasons for the return and any suggestions
 43    for improvement, may either execute the contract as originally proposed,  exe-
 44    cute a modified contract or refuse to execute a contract.
 45        (4)  The action of the director pursuant to subsection (3) of this section
 46    shall be final.
                                                                        
 47        61-1411.  RETURN  ON  INVESTMENT.  (1)  All contracts for utility services
 48    rendered to the authority shall be fair and reasonable  and  shall  provide  a
 49    reasonable return on investment.
 50        (2)  The  authority  shall not enter into a contract with a public utility
 51    for use of and delivery of energy over the distribution or transmission system
                                                                        
                                           7
                                                                        
  1    of the public utility which provides compensation to the public utility in  an
  2    amount  greater  than  the allocated  cost to the public utility providing the
  3    service, including a reasonable return on investment. For determining cost  to
  4    the  public  utility,  the  director, to the extent practicable and consistent
  5    with the terms of this chapter, shall use or require  the  use  of  accounting
  6    procedures and methods consistent with those promulgated by the federal energy
  7    regulatory commission.
                                                                        
  8        61-1412.  CONTRACTING WITH PUBLIC UTILITIES. (1) The director may contract
  9    with a public utility providing electric utility service to consumers for per-
 10    formance  by  the  public utility of the services of power transmission, power
 11    distribution or system maintenance in the service area of the authority previ-
 12    ously served by each public utility.
 13        (2)  If a public utility and the director cannot agree on terms of a  con-
 14    tract for any of the services described in subsection (1) of this section, the
 15    director or the public utility may petition the public utilities commission to
 16    mediate further negotiations between the authority and the public utility.
                                                                        
 17        61-1413.  RULES FOR EXTENSION OF CONTRACT. Before expiration of a contract
 18    between the authority and a public utility for performance by the public util-
 19    ity  of  the  utility  services set out in section 61-1412, Idaho Code, either
 20    party to the contract may petition the  public  utilities  commission  for  an
 21    order  amending the terms of the contract. If the commission finds that condi-
 22    tions since the execution of the contract have so changed that the contract no
 23    longer conforms to the standards set forth in section 61-1411, Idaho Code,  it
 24    may  order amendment of the contract. In exercising the powers granted by this
 25    section, the commission  shall  follow  the  procedures  outlined  in  section
 26    61-1412, Idaho Code, and the rules adopted thereunder.
                                                                        
 27        61-1414.  PROCUREMENT OF POWER FROM PUBLIC UTILITIES. To the extent of its
 28    authority  under  applicable  federal law, the public utilities commission may
 29    order any public utility engaged in the business of generating,  transmitting,
 30    or  distributing power in this state to furnish, upon demand of the authority,
 31    power to the authority at points on the public utility's generation, transmis-
 32    sion or distribution system at such rates and upon such  fair  and  reasonable
 33    terms  and  conditions as may be prescribed by the commission. For the purpose
 34    of such delivery, any such public utility shall install at a fair and  reason-
 35    able  cost  to  the  authority, on its demand, suitable substations, switches,
 36    transformers and other line and like apparatus.
                                                                        
 37        61-1415.  IDAHO ELECTRICITY AUTHORITY FUND. (1) There  is  hereby  created
 38    the Idaho electricity authority fund within the authority.
 39        (2)  All  moneys  received  by the authority pursuant to law shall be col-
 40    lected by the authority and  paid into the state treasury pursuant to  a  con-
 41    tract with the state treasurer and credited to the Idaho electricity authority
 42    fund.  All  moneys  in  the fund shall be used by the authority for payment of
 43    expenses of the authority pursuant to this chapter.
 44        (3)  Except as otherwise authorized  or  provided  in  this  chapter,  all
 45    moneys of the authority shall be deposited as soon as practicable in the Idaho
 46    electricity  authority  fund  with the state treasurer, to be invested in such
 47    manner as the idle moneys of the state may be invested.
                                                                        
 48        61-1416.  REGULATION BY PUBLIC UTILITIES COMMISSION. For the  purposes  of
 49    sections  61-332  through  61-333C,  Idaho  Code,  and sections 61-531 through
 50    61-537, Idaho Code, the authority shall be considered a public utility and  an
                                                                        
                                           8
                                                                        
  1    entity providing utility service  to its consumers and shall therefore be con-
  2    sidered subject to regulation by the public utilities commission under chapter
  3    5,  title  61,  Idaho Code, unless otherwise provided in chapter 14, title 61,
  4    Idaho Code.
                                                                        
  5        61-1417.  ASSISTANCE TO THE IDAHO ELECTRICITY AUTHORITY. Upon  request  of
  6    the director, the office of the attorney general, the public utilities commis-
  7    sion  and  the  department of water resources shall furnish such assistance to
  8    the director as he may require.
                                                                        
  9        61-1418.  PUBLIC UTILITIES' EXPANSION OF SERVICE AREAS. This chapter shall
 10    not apply to, nor in any way restrict, the formation, acquisition,  ownership,
 11    operation  or  extension  or  expansion of service areas of facilities, or any
 12    other function of a publicly owned utility as prescribed by law.
                                                                        
 13        61-1419.  ELIGIBILITY OF AUTHORITY FOR TAXATION. In the same manner  as  a
 14    public  utility,  the  authority shall be liable for and pay real and personal
 15    property taxes, business license fees, user charges, franchise fees and  other
 16    fees  and  charges assessed or levied by a municipality, county or taxing dis-
 17    trict. The authority shall be allowed as a credit against any tax,  charge  or
 18    fee  assessed on its receipts or income, any amounts similarly assessed on the
 19    receipts or income received by a public utility from the authority.  For  pur-
 20    poses  of  the  constitution of the state of Idaho, the authority shall not be
 21    considered to be the state or a political subdivision of the  state  for  pur-
 22    poses of taxation.
                                                                        
 23        61-1420.  COMMENCEMENT  OF  ACTIVITIES.  Exercise  of functions and powers
 24    granted to the authority under this chapter shall commence at such time as the
 25    legislature adopts a concurrent resolution finding  that  such  exercise  will
 26    result in substantial benefits to the citizens of Idaho.
                                                                        
 27        61-1421.  CESSATION  OF ACTIVITIES. The commission shall hold a hearing on
 28    the record, pursuant to chapter 6, title 61, Idaho Code, regarding the  cessa-
 29    tion  of  operation  of the authority at the request of any interested person,
 30    but no more frequently than once in two (2) years.  If  the  commission  finds
 31    that  operation  of the authority no longer results in substantial benefits to
 32    the citizens of Idaho, the commission shall submit a written recommendation to
 33    the legislature setting forth the basis for its recommendation that the activ-
 34    ities of the authority cease. Following such recommendation, and upon adoption
 35    by the legislature of a concurrent resolution finding that  operation  of  the
 36    authority  no longer results in substantial benefits to the citizens of Idaho,
 37    operation of the authority may be phased out as prescribed by the commission.
                                                                        
 38        61-1422.  BONDING PROVISIONS.
 39        (1)  (a) The authority shall have the power and is  hereby  authorized  to
 40        issue  from  time to time its notes and bonds in such principal amounts as
 41        the authority shall determine to be necessary to provide sufficient  funds
 42        for achieving any of its corporate purposes including, but not limited to:
 43        payment  of interest on notes and bonds of the authority; establishment of
 44        reserves to secure such notes and bonds; and all other expenditures of the
 45        authority incident to and necessary or convenient to carry out its  corpo-
 46        rate purposes and powers.
 47        (b)  The  authority  shall have the power, from time to time: (i) to issue
 48        notes; (ii) to renew notes;  (iii) to issue  bonds;  (iv)  to  pay  notes,
 49        including  the interest thereon; and (v) whenever it deems refunding expe-
                                                                        
                                           9
                                                                        
  1        dient, to refund any bonds by the issuance   of  new  bonds,  whether  the
  2        bonds  to  be refunded have or have not matured, and to issue bonds partly
  3        to refund bonds then outstanding and matured and partly  for  any  of  its
  4        corporate  purposes.  The refunding bonds may be exchanged for bonds to be
  5        refunded or sold and the proceeds applied to the purchase,  redemption  or
  6        payment of such bonds.
  7        (c)  Except as may otherwise be expressly provided by the authority, every
  8        issue of its notes and bonds shall be general obligations of the authority
  9        payable  out  of  any revenues or moneys of the authority, subject only to
 10        any agreements with the holders of particular notes or bonds pledging  any
 11        particular revenues.
 12        (2)  The  notes and bonds shall be authorized by resolution or resolutions
 13    of the authority, shall bear such date or dates and shall mature at such  time
 14    or  times  as  such resolution or resolutions may provide, except that no bond
 15    shall mature more than fifty (50) years from the date of its issue. The  bonds
 16    may  be issued as serial bonds payable in annual installments or as term bonds
 17    or as a combination thereof. The notes and bonds shall bear interest  at  such
 18    rate  or  rates,  be  in such denominations, be in such form, either coupon or
 19    registered, carry such registration privileges, be executed in such manner, be
 20    payable in such medium of payment, at such place or places, and be subject  to
 21    such  terms  of  redemption as such resolution or resolutions may provide. The
 22    notes and bonds of the authority may be sold by the authority,  at  public  or
 23    private sale, at such price or prices as the authority shall determine.
 24        (3)  Any  resolution  or resolutions authorizing any notes or bonds or any
 25    issue thereof may contain provisions, which shall be a part of the contract or
 26    contracts with the holders thereof, as to:
 27        (a)  Pledging all or any part of the revenues to secure the payment of the
 28        notes or bonds or of any issue thereof, subject to  such  agreements  with
 29        noteholders or bondholders as may then exist;
 30        (b)  Pledging all or any part of the assets of the authority to secure the
 31        payment  of  the notes or bonds or of any issue of notes or bonds, subject
 32        to such agreements with noteholders or bondholders as may then exist;
 33        (c)  The setting aside of reserves or sinking funds and the regulation and
 34        disposition thereof;
 35        (d)  Limitations on the purpose to which the proceeds of sale of notes  or
 36        bonds  may  be applied and pledging such proceeds to secure the payment of
 37        the notes or bonds or any issue thereof;
 38        (e)  Limitations on the issuance of additional notes or bonds,  the  terms
 39        upon  which  additional  notes or bonds may be issued and secured, and the
 40        refunding of outstanding other notes and bonds;
 41        (f)  The procedure, if any, by  which  the  terms  of  any  contract  with
 42        noteholders  or  bondholders  may  be  amended or abrogated, the amount of
 43        notes or bonds the holders of which must consent thereto, and  the  manner
 44        in which such consent may be given;
 45        (g)  Limitations  on  the amount of moneys to be expended by the authority
 46        for operating expenses of the authority;
 47        (h)  Vesting in a trustee or trustees, such property, rights,  powers  and
 48        duties  in  trust as the authority may determine which may include any  or
 49        all of the rights, powers and duties of the trustee appointed by the bond-
 50        holders pursuant to this chapter and limiting or abrogating the  right  of
 51        the  bondholders  to  appoint a trustee under this chapter or limiting the
 52        rights, powers and duties of such trustee;
 53        (i)  Defining the acts or  omissions  to  act  which  shall  constitute  a
 54        default  in  the obligations and duties of the Idaho electricity authority
 55        to the holders of the notes or bonds in the event of such default, includ-
                                                                        
                                           10
                                                                        
  1        ing, as a matter of right, the appointment of a  receiver;  provided  how-
  2        ever,  that  such  rights  and remedies shall not be inconsistent with the
  3        general laws of the state and the other provisions of this chapter; and
  4        (j)  Any other matters, of like or different character, which in  any  way
  5        affect the security or protection of the holders of the notes or bonds.
  6        (4)  Any  pledge made by the authority shall be valid and binding from the
  7    time  the pledge is made; the revenues, moneys  or  property  so  pledged  and
  8    thereafter  received by the authority shall immediately be subject to the lien
  9    of such pledge without any physical delivery thereof or further act,  and  the
 10    lien of any such pledge shall be valid and binding as against all parties hav-
 11    ing  claims  of any kind in tort, contract or otherwise against the authority,
 12    irrespective of whether such parties have notice thereof. Neither the  resolu-
 13    tion nor any other instrument by which a pledge is created need be recorded.
 14        (5)  Neither  the director of the authority nor any other person executing
 15    such notes or bonds shall be subject to any personal liability or accountabil-
 16    ity by reason of issuance thereof.
 17        (6)  The authority, subject to such agreements with noteholders  or  bond-
 18    holders as may then exist, shall have power out of any funds available to pur-
 19    chase notes or bonds of the authority, which shall thereupon be canceled, at a
 20    price not exceeding:
 21        (a)  If  the notes or bonds are then redeemable, the redemption price then
 22        applicable plus accrued interest to the next interest payment thereon; or
 23        (b)  If the notes or bonds are not then redeemable, the  redemption  price
 24        applicable  on  the first date after such purchase upon which the notes or
 25        bonds become subject to redemption plus accrued interest to such date.
 26        (7)  In the discretion of the authority, the bonds may  be  secured  by  a
 27    trust indenture by and between the authority and a corporate trustee which may
 28    be any trust company or bank having the power of a trust company in the state.
 29    Such  trust indenture may contain such provisions for protecting and enforcing
 30    the rights and remedies of the bondholders as may be reasonable and proper and
 31    not in violation of law, including covenants setting forth the duties  of  the
 32    authority in relation to the exercise of its corporate powers and the custody,
 33    safeguarding  and application of all moneys. The authority may provide by such
 34    trust indenture for the payment of the proceeds of the bonds and the  revenues
 35    to  the  trustee  under  such trust indenture or other depository, and for the
 36    method of disbursement thereof, with such safeguards and  restrictions  as  it
 37    may  determine. All expenses incurred in carrying out such trust indenture may
 38    be treated as a part of the operating expense of the authority. If  the  bonds
 39    shall be secured by a trust indenture, the bondholders shall have no authority
 40    to appoint a separate trustee to represent them.
 41        (8)  Whether  or not the notes and bonds are of such form and character as
 42    to be negotiable instruments under the terms of the uniform  commercial  code,
 43    the  notes  and  bonds of the authority are hereby made negotiable instruments
 44    within the meaning of and for all the purposes of the uniform commercial code,
 45    subject only to the provisions of the notes and bonds for registration.
 46        (9)  If any officers of the authority whose signatures appear on any notes
 47    or bonds or coupons shall cease to be such officers  before  the  delivery  of
 48    such  notes  or bonds, such signatures shall nevertheless continue to be valid
 49    and sufficient for all purposes and to the same extent as if such officers had
 50    remained in office until such delivery.
                                                                        
 51        61-1423.  SEVERABILITY. If any  provision  of  this  chapter  is  declared
 52    unconstitutional or ineffective, in whole or in part, to the extent that other
 53    provisions  of this chapter are not unconstitutional or ineffective, the other
 54    provisions shall be valid and effective, and no other provision on account  of
                                                                        
                                           11
                                                                        
  1    the  finding  of  unconstitutionality  or  ineffectiveness shall be considered
  2    invalid or ineffective.

Statement of Purpose / Fiscal Impact


                     STATEMENT OF PURPOSE
                          RS 12066C1

To set up the mechanism for creation of an Idaho electricity 
authority if application is filed with the Public Utilities 
Commission for purchase, takeover or merger of an investor owned 
public utility that provides for sale of electric energy. The 
legislature finds and declares that the power system on the 
Columbia River and its tributaries is a resource of low-cost 
hydroelectric power of which Idaho citizens should enjoy the 
benefits and it is incumbent upon the legislature of the state 
of Idaho to protect the interests of the people of the state of 
Idaho by protecting the benefits of the Columbia River power system 
and all rivers tributary thereto.

The legislature further finds and declares that it is the purpose 
of this chapter to: a) Provide, through the Idaho electricity 
authority established by this chapter, low power rates to customers 
in Idaho who might be deleteriously impacted by electric utility 
deregulation at the federal and regional levels or by rising power 
costs generally; b) Make possible rates for power consumers in 
Idaho at the lowest generating costs consistent with good business 
principles and protection of the environment; c) Make protection 
for the citizens of Idaho from the sale or takeover of power 
interests by outside hostile or friendly interests; d) Distribute 
power obtained by the Idaho electricity authority from the Columbia 
River system and other sources at cost to Idaho consumers.

                        Fiscal Impact

No fiscal impact


Contact
Name:	Senator John Sandy
Phone:	332-1306



STATEMENT OF PURPOSE/FISCAL NOTE		S 1505