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 - 2007IN 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