54-17-1002. Cost recovery for proven dispatchable generation assets.

836 words·~4 min read·/ut/title-54/chapter-17/54-17-1002

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Effective 5/1/2024

(1)Notwithstanding any other provision of law, the recovery of costs associated with the acquisition, expansion, maintenance, retrofitting, fueling, or operation of a proven dispatchable generation resource, as well as the reasonable legal fees and costs associated with efforts to preserve the continued operation of a proven dispatchable generation resource, is governed by this section.

(2)To recover costs described in Subsections

(3)and (5), an affected electrical utility is required to demonstrate, to the commission's satisfaction:

(a)the amount sought to be recovered that is attributable to the state;

(b)a detailed description of the actions taken by the affected electrical utility resulting in the costs sought to be recovered;

(c)that the actions taken by the affected electrical utility resulting in the costs sought to be recovered were:

(i)reasonable when considering available dispatchable resources; and

(ii)necessary to acquire, operate, and maintain dispatchable resources; and

(d)that the recovery of costs for the actions taken by the affected electrical utility is in the public interest.

(3)Subject to requirements of Subsection (2), the commission shall allow an affected electrical utility to recover through the affected electrical utility's rates, as established in a general rate case or other appropriate commission proceeding, the reasonable costs associated with:

(a)any commission approved significant energy resource decision relating to a proven dispatchable generation resource within the state;

(b)any commission approved voluntary resource decision relating to a proven dispatchable generation resource within the state;

(c)costs necessary to acquire, expand, retrofit, or maintain proven dispatchable generation resources located within the state to comply with federal law or ensure the efficient operation of those resources;

(d)costs to obtain needed generation due to a federal decision or mandate requiring the closure, retirement, or decommission of a proven dispatchable generation resource within the state until permanent replacement generation can be obtained or constructed;

(e)stranded costs due to any federal decision or mandate to close, retire, or decommission proven dispatchable generation resources located within the state; and

(f)reasonable legal fees and costs arising out of efforts to preserve the continued operation of proven dispatchable generation resources that are either located within the state or that provide generation to the state.

(4)An affected electrical utility may recover fuel-related costs associated with acquiring and transporting fuel necessary for operating a proven dispatchable generation resource located within the state if the affected electrical utility demonstrates to the commission's satisfaction that:

(a)any fuel purchase for the proven dispatchable generation resource is at a cost less than or equal to the lower of:

(i)the current market price for that fuel in the general geographic area from which the resource is extracted; or

(ii)the cost to purchase that fuel from an affiliate company of the affected electrical utility;

(b)any fuel transportation costs are reasonable in comparison to current fuel transportation market rates;

(c)the term of collective fuel supply contracts entered into by the affected electrical utility is reasonable to ensure necessary fuel supply for the affected electrical utility; and

(d)that the cost for the affected electrical utility to maintain a reasonable stockpile of fuel for up to one year for the proven dispatchable generation resource is reasonable according to prudent utility practice.

(a)An affected electrical utility:

(i)may recover reasonable ongoing operating costs incurred in connection with the operation of a proven dispatchable generation resource located within the state; and

(ii)has a presumption that the ongoing operating costs described in Subsection (5)(a)(i) are reasonable as determined by the commission in a general rate case or other appropriate commission proceeding.

(b)A party may submit evidence in a commission proceeding to challenge the reasonableness of the affected electrical utility's operating costs.

(c)If an affected electrical utility's operating costs are unchallenged or the commission determines after a commission proceeding that a challenging party has failed to demonstrate that the affected electrical utility's operating costs are not reasonable, the affected electrical utility is entitled to recover operating costs associated with a proven dispatchable generation resource in rates.

(d)If the commission determines, after hearing evidence from a challenging party, that the affected electrical utility's operating costs are not reasonable, the commission shall establish reasonable rates that allow the affected electrical utility to recover only reasonable operating costs associated with a proven dispatchable generation resource.

(a)Upon filing of a request for recovery under this section from an affected electrical utility that is expected to result in a rate increase, the commission shall provide a written notice of the request to the Executive Appropriations Committee and the Public Utilities, Energy, and Technology Interim Committee.

(b)Upon receiving the notice described in Subsection (6)(a), the Executive Appropriations Committee may review the affected utility's request for cost recovery and determine whether to direct committee staff, or an otherwise qualified third party to intervene and advocate on behalf of the Legislature.

Enacted by Chapter 214 , 2024 General Session