View Bill Status
View Bill Text
View Statement of Purpose / Fiscal Impact
H0030.................................by ENVIRONMENT, ENERGY AND TECHNOLOGY
CITIES - ELECTRIC GENERATION - Adds to existing law to authorize cities to
participate as joint owners or power purchasers in joint electric
generation and transmission projects; and to provide required terms and
provisions for participation agreements and related matters.
01/19 House intro - 1st rdg - to printing
01/22 Rpt prt - to Env
01/25 Rpt out - rec d/p - to 2nd rdg
01/26 2nd rdg - to 3rd rdg
01/31 3rd rdg - PASSED - 67-0-3
AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
Bock, Boe, Bolz, Brackett, Bradford, Chadderdon, Chavez, Chew, Clark,
Collins, Crane, Durst, Edmunson, Eskridge, Hagedorn, Hart, Harwood,
Henbest, Henderson, Jaquet, Killen, King, Kren, Labrador, Lake,
LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin, Mortimer,
Moyle, Nonini, Pasley-Stuart, Patrick, Pence, Raybould, Ring, Ringo,
Ruchti, Rusche, Sayler, Schaefer, Shepherd(2), Shepherd(8), Shirley,
Shively, Smith(30), Smith(24), Snodgrass, Stevenson, Thayn, Trail,
Vander Woude, Wills, Wood(27), Wood(35), Mr. Speaker
NAYS -- None
Absent and excused -- Block, Nielsen, Roberts
Floor Sponsor - Eskridge
Title apvd - to Senate
02/01 Senate intro - 1st rdg - to St Aff
02/09 Rpt out - rec d/p - to 2nd rdg
02/12 2nd rdg - to 3rd rdg
02/16 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Gannon, Geddes,
Goedde, Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst,
Little, Lodge, Malepeai, McGee, McKague, McKenzie, Pearce,
Richardson, Schroeder, Siddoway, Stegner, Stennett, Werk
NAYS -- None
Absent and excused -- None
Floor Sponsor - McKenzie
Title apvd - to House
02/19 To enrol
02/20 Rpt enrol - Sp signed
02/21 Pres signed
02/22 To Governor
02/23 Governor signed
Session Law Chapter 28
Effective: 02/23/07
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature First Regular Session - 2007
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 30
BY ENVIRONMENT, ENERGY AND TECHNOLOGY COMMITTEE
1 AN ACT
2 RELATING TO CITIES; AMENDING CHAPTER 3, TITLE 50, IDAHO CODE, BY THE ADDITION
3 OF A NEW SECTION 50-342A, IDAHO CODE, TO PROVIDE FINDINGS, TO DEFINE
4 TERMS, TO AUTHORIZE CITIES TO PARTICIPATE AS JOINT OWNERS OR POWER PUR-
5 CHASERS IN JOINT ELECTRIC GENERATION AND TRANSMISSION PROJECTS, TO PROVIDE
6 REQUIRED TERMS AND PROVISIONS FOR PARTICIPATION AGREEMENTS AND RELATED
7 MATTERS; PROVIDING SEVERABILITY; AND DECLARING AN EMERGENCY.
8 Be It Enacted by the Legislature of the State of Idaho:
9 SECTION 1. That Chapter 3, Title 50, Idaho Code, be, and the same is
10 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
11 ignated as Section 50-342A, Idaho Code, and to read as follows:
12 50-342A. PARTICIPATION IN GENERATION AND TRANSMISSION PROJECTS. (1) It is
13 hereby determined and declared that securing long-term electric generation and
14 transmission resources at cost-based rates is essential to the ability of
15 municipal utilities to provide reliable and economic electric services at sta-
16 ble prices to the consumers and communities they serve and is essential to the
17 economy and the economic development of their communities and to the public
18 health, safety and welfare. It is further determined and declared that in
19 order to facilitate the development of such cost-based resources, it is neces-
20 sary and desirable that municipal electrical utilities have sufficient flexi-
21 bility and statutory authority to pay the ordinary and necessary expenses
22 associated with the operation and maintenance of such cost-based resources.
23 (2) When used in this section the following terms shall have the follow-
24 ing meanings:
25 (a) "Joint electric facilities" means all works, facilities and property
26 necessary or useful in the generation or transmission of electric power
27 and energy.
28 (b) "Participants" means a city and the other parties to a participation
29 agreement, including municipalities or public agencies of other states who
30 have authority to own, construct, develop and operate joint electric
31 facilities under the laws of such state.
32 (c) "Participation agreement" means:
33 (i) An agreement providing for the joint ownership and operation of
34 joint electric facilities; or
35 (ii) A long-term power purchase agreement providing for the right to
36 receive a share of the capacity or output of joint electric facili-
37 ties at cost-based rates.
38 (3) In order to obtain long-term electric generation and transmission
39 resources at cost-based rates, a city that owns and operates a municipal elec-
40 tric utility system may acquire an undivided ownership interest in, or a con-
41 tractual right to the capacity, output or services of, joint electric facili-
42 ties under a participation agreement with one (1) or more investor-owned,
43 cooperative or municipal utilities or with other entities engaged in the gen-
2
1 eration or transmission of electricity. Prior to entering into any participa-
2 tion agreement, the governing body of the city shall consider:
3 (a) The city's long-term power supply and transmission requirements;
4 (b) The efficiencies and economies of scale expected to be achieved by
5 participating with others in the acquisition or construction of joint
6 electric facilities;
7 (c) The estimated cost, commercial operation date and useful life of the
8 joint electric facilities;
9 (d) The financial, regulatory and technical feasibility of constructing
10 and operating such joint electric facilities; and
11 (e) The availability, reliability and cost of existing or alternate power
12 supply and transmission resources.
13 In order to facilitate such consideration, the city may retain engineering,
14 financial or other consultants to provide advice and recommendations concern-
15 ing such long-term power supply or transmission facilities and in such event,
16 all written reports prepared by such consultants shall be made a matter of
17 record and be available to the public in accordance with the provisions of the
18 Idaho public records act.
19 (4) Each participation agreement shall include provisions regarding:
20 (a) The specific joint or undivided ownership interests of the partici-
21 pants in the joint electric facilities or the specific contractual rights
22 of the participants to the capacity, output or services of the joint elec-
23 tric facilities, any restrictions on the right of the participants to
24 withdraw from participation in the operation of the joint electric facili-
25 ties or restrictions upon transfer or partition of such interests or
26 rights and the method for allocating the capacity or output of the joint
27 electric facilities among the participants;
28 (b) The creation of a management committee comprised of representatives
29 of the participants which shall be responsible for the governance of the
30 acquisition, construction and operation of the joint electric facilities,
31 and provisions granting each participant voting rights proportional to its
32 percentage entitlement to the output or capacity of such joint electric
33 facilities;
34 (c) The acquisition, construction and operation of the joint electric
35 facilities and the appointment of construction and operation managers and
36 agents and the employment of personnel in connection with the joint elec-
37 tric facilities, which may include provisions for the indemnification of
38 such managers, agents and personnel;
39 (d) The methods for financing the costs of acquisition, construction and
40 operation of the joint electric facilities, which may include provisions
41 obligating or enabling each participant to finance its proportional share
42 of such costs, based on its ownership interest in or contractual rights to
43 the joint electric facilities;
44 (e) The allocation of the costs of acquisition, construction and opera-
45 tion of the joint electric facilities among the participants proportional
46 to the percentage entitlement to the output or capacity of such joint
47 electric facilities and the specific obligations of the participants to
48 pay such costs, which may include a provision obligating each participant
49 to pay its respective share of all costs of the joint electric facilities
50 regardless of whether such facilities are acquired, completed, operable or
51 operating and notwithstanding the suspension or reduction of the capacity,
52 output or services of the joint electric facilities for any reason;
53 (f) The remedies upon a default by any participant in the performance of
54 its obligations under the participation agreement, which may include a
55 provision obligating or enabling the other participants to succeed to all
3
1 or a portion of the ownership interest or contractual rights and obliga-
2 tions of the defaulting participant;
3 (g) The liabilities of the participants, which shall be several and not
4 joint and no participant shall be obligated for the acts, omissions or
5 obligations of any other participant; and
6 (h) The amendment and termination of the agreement, and for the
7 decommissioning of the joint electric facilities and the funding of the
8 costs thereof.
9 (5) A city may finance its proportionate share of the acquisition, con-
10 struction and operation costs of joint electric facilities through the issu-
11 ance of its bonds as provided by law or through financing arrangements with
12 the Idaho energy resources authority under chapter 89, title 67, Idaho Code.
13 SECTION 2. SEVERABILITY. The provisions of this act are hereby declared
14 to be severable and if any provision of this act or the application of such
15 provision to any person or circumstance is declared invalid for any reason,
16 such declaration shall not affect the validity of the remaining portions of
17 this act.
18 SECTION 3. An emergency existing therefor, which emergency is hereby
19 declared to exist, this act shall be in full force and effect on and after its
20 passage and approval.
STATEMENT OF PURPOSE
RS 16670
Authorizing Cities to Participate as Owners
In Joint Electric Generation and Transmission Projects
There are nine cities in Idaho that provide electric service
to meet the needs of citizens and businesses within the municipal
boundaries. This Act authorizes those cities to sign long-term
power supply contracts to secure reliable and affordable
electricity for their citizens, rather than relying upon more
volatile market-based power supply contracts.
Idaho Consumer-Owned Utilities need to secure stable, long
term electric power supplies that will allow these utilities to
meet load growth in their respective service territories. Some
utilities will choose to meet future load growth with a new kind of
contract from the Bonneville Power Administration which provides a
form of beneficial ownership in the resource. Others may
participate with other utilities in development and construction of
jointly owned power projects in order to meet their future load
growth. In either event, in order to finance and enter into such
contracts, consumer-owned utilities must have clear statutory
authority to enter into these BPA contracts and power supply
contracts for jointly owned facilities.
Current Idaho law is unclear whether municipalities have
authority to purchase an interest in a jointly owned project or
whether their authority is merely limited to ownership of wholly
owned facilities. Unfortunately wholly owned projects are no longer
economically feasible or otherwise available, therefore forcing
municipalities to purchase power on the volatile open market. This
bill eliminates that statutory ambiguity and provides municipal
governments with an alternative to volatile market-based power
supply contracts.
FISCAL IMPACT
This legislation will have no fiscal impact on the state.
CONTACTS & SPONSORS
Senator Bart Davis
Senator Curt McKenzie
Representative George Eskridge
Representative Eric Anderson
Ron Williams Attorney at Law 344-6633
Ken Harward Association of Idaho Cities 344-8594
H 30