Session of 1998
HOUSE BILL No. 2619
By Committee on Utilities
1-14
9
AN ACT concerning the electric utility
industry; relating to competition
10 in retail sales of
electric generation service; enacting the electric utility
11 restructuring act;
amending K.S.A. 66-128e, 66-128f, 66-128g, 75-4319
12 and 79-1439 and K.S.A.
1997 Supp. 45-221 and 66-128 and repealing
13 the existing sections;
also repealing K.S.A. 66-1,159 through 66-1,165,
14 66-1,168, 66-1,169a
and 66-1,169c and K.S.A. 1997 Supp. 66-1,158
15 and 66-1,169b.
16
17 Be it enacted by the Legislature of the
State of Kansas:
18 New Section 1. (a) Sections 1
through 27 may be cited as the electric
19 utility restructuring act.
20 (b) This act establishes a
framework for the transition to competition
21 in retail sales of generation service.
22 New Sec. 2. As used in the
electric utility restructuring act:
23 (a) ``Affiliated with''
refers to:
24 (1) Ownership of a
controlling interest in another entity by a munic-
25 ipal electric utility or electric
cooperative; or
26 (2) with respect to any other
utility, ownership of an interest by or in
27 another entity described in K.S.A. 66-1401
and amendments thereto as
28 an affiliated interest.
29 (b) ``Aggregate'' means
combine the loads of retail customers for the
30 purpose of purchasing generation
service.
31 (c) ``Aggregator'' means any
entity that, as an intermediary, purchases
32 and may or may not take title to generation
service for sale to retail
33 customers whose loads are aggregated.
34 (d) ``Assignee'' means any
corporation, public authority, trust or other
35 entity to which:
36 (1) A utility or a utility's
successor assigns, sells or transfers other than
37 as security all or a portion of the
utility's or successor's interest in or right
38 to intangible transition property; or
39 (2) a direct assignee of a
utility or a utility's successor may assign, sell
40 or transfer other than as security the
utility's or successor's interest in or
41 right to intangible transition
property.
42 (e) ``Broker'' or
``marketer'' means any entity that acts as an agent or
43 intermediary in the sale and purchase of
generation service to retail cus-
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2
1 tomers and may or may not take title
to the generation service.
2 (f) ``Certified
territory'' means the service territory certified to a util-
3 ity pursuant to K.S.A. 66-1,170 et
seq. and amendments thereto.
4 (g) ``Commission''
means the state corporation commission.
5 (h) (1) ``Competitive
electricity provider'' means a marketer, broker,
6 aggregator or other entity selling
generation service to consumers at retail.
7 (2) ``Competitive
electricity provider'' does not include any exempt
8 utility.
9 (i) ``Competitive
transition charge'' means a charge established under
10 section 9.
11 (j) (1) ``Competitive
transition costs'' means:
12 (A) The amount by which the
costs of all generation assets deemed
13 prudent by the commission or by another
governmental entity operating
14 or regulating a utility and included in the
utility's rate base on July 1,
15 1998, exceed the amount recoverable for all
such assets in a competitive
16 marketplace;
17 (B) the amount by which the
value of all generation contracts and
18 other generation-related legal obligations
deemed prudent by the com-
19 mission or by another governmental entity
operating or regulating a utility
20 and included in a utility's rates on July
1, 1998, exceeds the amount re-
21 coverable for all such contracts and
obligations in a competitive market-
22 place;
23 (C) nuclear decommissioning
costs;
24 (D) low level radioactive
waste disposal costs;
25 (E) high level radioactive
waste disposal costs; and
26 (F) generation-related
regulatory assets.
27 (2) ``Competitive transition
costs'' does not include contingency debt.
28 (k) ``Contingency debt''
means long term debt without scheduled am-
29 ortization.
30 (l) ``Cost of service'' means
the costs reasonably incurred by a distri-
31 bution utility in order to provide
distribution services, including a rea-
32 sonable rate of return.
33 (m) ``Distribution services''
means services provided from the point
34 where electricity enters the distribution
system to the point at which the
35 electricity is delivered to consumers.
36 (n) ``Distribution utility''
means any utility engaged in the furnishing
37 of distribution services to consumers under
a service certificate issued by
38 the commission or any municipal electric
distribution system.
39 (o) ``Electric cooperative''
means any cooperative, as defined by
40 K.S.A. 17-4603 and amendments thereto, or
any nonstock member-
41 owned cooperative corporation incorporated
in this state.
42 (p) ``Exempt utility'' means
any municipal electric utility owned or
43 operated by a municipality that has not
elected under subsection (b)(1)
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3
1 of section 5 to participate fully in
competition in retail sales of generation
2 service or any electric cooperative
that has elected under section 6 not to
3 participate in competition in retail
sales of generation service.
4 (q) ``Financing party''
means a holder of transition bonds, including
5 trustees, collateral agents and other
entities acting for the benefit of such
6 holder.
7 (r) ``Generation
assets'' means all real property, fixtures and personal
8 property owned, controlled, operated
or managed in connection with, or
9 to facilitate, generation of
electricity.
10 (s) ``Generation service''
means electricity or capacity to generate
11 electricity but does not include
transmission or distribution services.
12 (t) ``High level radioactive
waste disposal costs'' means costs of dis-
13 posal of high level radioactive waste, as
defined by K.S.A. 48-1603 and
14 amendments thereto, from a nuclear
generating facility, which costs are
15 incurred before July 1, 2001, and are
approved by the commission or
16 another governmental entity operating or
regulating a utility.
17 (u) ``Intangible transition
property'' means the property right in any
18 order of the commission, and in all
revenues from competitive transition
19 charges, declared by section 12 to be
irrevocable. Intangible transition
20 property shall exist only to the extent
provided in an order authorizing
21 issuance of transition bonds under section
11.
22 (v) ``Low level radioactive
waste disposal costs'' means costs of dis-
23 posal of low level radioactive waste, as
defined by K.S.A. 48-1603, and
24 amendments thereto, from a nuclear
generating facility, which costs are
25 incurred before July 1, 2001, and are
approved by the commission or by
26 another governmental entity operating or
regulating a utility.
27 (w) ``Nuclear decommissioning
costs'' means costs that the federal
28 nuclear regulatory commission considers to
be nuclear decommissioning
29 costs and that are approved by the
commission.
30 (x) ``Public utility'' means
a public utility, as defined by K.S.A. 66-104
31 and amendments thereto, the rates of which
are regulated by the com-
32 mission.
33 (y) ``Recoverable competitive
transition costs'' means competitive
34 transition costs that a utility is allowed
to recover under section 7.
35 (z) ``Regulatory asset''
means an asset that is created when a utility
36 must capitalize all or part of a cost,
incurred before July 1, 2001, that
37 would normally be charged to expense in an
enterprise that is not rate
38 regulated and that is presumed to have a
stream of future revenue at least
39 equal in value to the capitalized cost of
the asset. ``Regulatory asset''
40 includes but is not limited to renegotiated
fuel supply contracts, deferred
41 income taxes, post-retirement benefits,
expenses related to refinancing
42 debt, commission-approved recovery of
impaired generation assets, com-
43 mission-approved phase-in plans for
generation assets and nonnuclear
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4
1 decommissioning costs.
2 (aa) ``Regulatory
liability'' means a liability created pursuant to an
3 order of the commission or pursuant
to the application of generally ac-
4 cepted accounting principles.
5 (bb) ``Statewide
average cost of service'' means the average cost of
6 service of all distribution utilities
in the state.
7 (cc) ``Transmission
services'' means services provided from the point
8 where electricity is generated to the
point at which the electricity enters
9 the distribution system.
10 (dd) ``Transmission utility''
means any utility engaged in the furnish-
11 ing of transmission services.
12 (ee) ``Universal service
charge'' means the charge established under
13 section 10.
14 (ff) ``Universal service
costs'' means:
15 (1) Costs of assuring
continued provision of generation service to cus-
16 tomers during implementation of the cold
weather rule (issued by the
17 commission in its order in docket number
158,796-U) in areas served by
18 competitive electricity providers; and
19 (2) costs that are associated
with provision of distribution services in
20 low population density, high cost areas
served by competitive electricity
21 providers and that negatively impact the
affordability of or accessibility
22 to distribution services in those
areas.
23 (gg) ``Utility'' means any
electric public utility, municipal electric util-
24 ity or electric cooperative.
25 New Sec. 3. Except as
otherwise provided by this act, on and after
26 July 1, 2001:
27 (a) All consumers of
electricity in areas of the state served by com-
28 petitive electricity providers shall have
the right to purchase generation
29 service directly from the competitive
electricity provider of the con-
30 sumer's choice. That choice shall be
exercised by the consumer's positive
31 verifiable declaration. If a consumer makes
no such declaration, the con-
32 sumer shall continue to be served by the
consumer's existing utility or its
33 successor.
34 (b) Sale of generation
service by competitive electricity providers
35 shall not be subject to rate regulation by
the commission.
36 New Sec. 4. On and after July
1, 2001:
37 (a) Certified territories of
distribution utilities shall be retained and
38 distribution utilities that are subject to
the jurisdiction of the commission
39 shall continue to be regulated by the
commission as provided by law.
40 (b) Generation service
purchased at retail shall be delivered to the
41 consumer only through a distribution
utility having the certified territory
42 where the service is delivered and through
transmission utilities holding
43 certificates of convenience issued by the
commission and serving the ter-
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5
1 ritory where the service is
delivered. There shall be no bypass of distri-
2 bution or transmission facilities by
distribution or transmission utilities.
3 (c) Transmission and
distribution utilities shall be required to provide
4 open access to their transmission or
distribution services on a nondiscrim-
5 inatory basis, as provided by section
15.
6 New Sec. 5. (a) (1)
Competition in retail sales of generation service
7 shall continue in any territory
annexed by a municipality that has not
8 elected under subsection (b)(1) or
(2) to participate in such competition
9 if such competition exists in the
annexed territory at the time of annex-
10 ation. In such case the municipal electric
utility shall not be subject to
11 the provisions of this act other than the
provisions of section 17 and
12 section 10 as it pertains to annexed
customers and shall not sell generation
13 service at retail to consumers outside the
utility's certified territory.
14 (2) In the case of annexation
described in subsection (a)(1), the mu-
15 nicipal electric utility shall be required
to provide all competitive elec-
16 tricity providers open access to the
utility's transmission and distribution
17 services in the annexed territory on a
nondiscriminatory basis at fair and
18 reasonable rates. Any competitive
electricity provider denied such access
19 shall have a cause of action in the
district court of the county where the
20 municipality is located or, if the
municipality is located in more than one
21 county, the county where the greatest
portion of the population of the
22 municipality resides. If the court finds
that the municipal electric utility
23 denied the competitive electricity provider
access to the utility's distri-
24 bution services in the annexed territory on
a nondiscriminatory basis at
25 fair and reasonable rates, the court may
enjoin the utility from further
26 denial of such access and may order the
utility to pay the competitive
27 electricity provider any damages arising
from the denial.
28 (3) The commission shall
adopt informal procedures for hearing and
29 resolution of any party's complaint, other
than complaints concerning
30 rates, arising from retail sales of
generation service within annexed ter-
31 ritory described in subsection (a)(1).
32 (b) Except as provided by
subsection (a), a municipal electric utility
33 shall not participate in competition in
retail sales of generation service
34 and the provisions of this act shall not
apply to such utility unless:
35 (1) The governing body of the
municipality owning or operating the
36 utility or the voters residing in the
certified territory of the utility elect
37 as provided in subsection (c) for the
utility to participate fully in com-
38 petition in retail sales of generation
service. If the governing body or
39 voters elect full participation, the
municipal electric utility shall be subject
40 to all provisions of this act in the same
manner as any other nonexempt
41 utility and may sell generation service at
retail to any consumer, regardless
42 of the consumer's location.
43 (2) (A) The governing body of
the municipality owning or operating
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1 the utility or the voters residing in
the certified territory of the utility elect
2 as provided in subsection (c) for the
utility to participate in competition
3 in retail sales of generation service
only within the utility's certified ter-
4 ritory. If the governing body or
voters elect such participation, the mu-
5 nicipal electric utility shall not be
subject to the provisions of this act
6 other than the provisions of sections
7, 9, 10 and 17.
7 (B) A municipal
electric utility owned or operated by a municipality
8 that elects to participate in
competition in retail sales of generation under
9 subsection (b)(2)(A) shall be
required to provide all competitive electricity
10 providers open access to the utility's
transmission and distribution services
11 on a nondiscriminatory basis at fair and
reasonable rates. Any competitive
12 electricity provider denied such access
shall have a cause of action in the
13 district court of the county where the
municipality is located or, if the
14 municipality is located in more than one
county, the county where the
15 greatest portion of the population of the
municipality resides. If the court
16 finds that the municipal electric utility
denied the competitive electricity
17 provider open access to the utility's
distribution services on a nondiscrim-
18 inatory basis at fair and reasonable rates,
the court may enjoin the utility
19 from further denial of such access and may
order the utility to pay the
20 competitive electricity provider any
damages arising from the denial.
21 (C) The commission shall
adopt informal procedures for hearing and
22 resolution of any party's complaint, other
than complaints concerning
23 rates, arising from retail sales of
generation service within the certified
24 territory of a municipal electric utility
owned or operated by a munici-
25 pality that has elected to participate in
competition in retail sales of gen-
26 eration service as provided by this
subsection (b)(2).
27 (c) (1) The governing body of
a municipality owning or operating a
28 municipal electric utility may submit, by
ordinance, to the qualified voters
29 residing in the utility's certified
territory a proposition for the utility to
30 participate in competition in retail sales
of generation service. If a majority
31 of the voters voting on the proposition
vote in favor of the proposition,
32 the municipal electric utility shall
commence participation in competition
33 in retail sales of generation service not
later than one year after the final
34 canvass of the election results.
35 (2) Upon a petition filed in
accordance with subsection (d), the gov-
36 erning body of a municipality owning or
operating a municipal electric
37 utility shall submit to the qualified
voters residing in the utility's certified
38 territory a proposition for the utility to
participate in competition in retail
39 sales of generation service. If a majority
of the voters voting on the prop-
40 osition vote in favor of the proposition,
the municipal electric utility shall
41 commence participation in competition in
retail sales of generation serv-
42 ice not later than one year after the final
canvass of the election results.
43 (3) The governing body of a
municipality owning or operating a mu-
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7
1 nicipal electric utility may elect,
by ordinance, to participate in compe-
2 tition in retail sales of generation
service, subject to a protest petition
3 filed in accordance with subsection
(d) within 30 days after the adoption
4 of the ordinance. If such petition is
so filed, there shall be submitted to
5 the qualified voters residing in the
utility's certified territory a proposition
6 for the utility to participate in
competition in retail sales of generation
7 service. If a valid protest petition
is not submitted or if, upon submission
8 of a valid protest petition and an
election, a majority of the voters voting
9 on the proposition vote in favor of
the proposition, the municipal electric
10 utility shall commence participation in
competition in retail sales of gen-
11 eration service not later than one year
after the adoption of the ordinance
12 or the final canvass of the election
results.
13 (d) (1) A petition provided
for by this section shall be filed with the
14 county election officer and shall be signed
by qualified voters residing in
15 the service utility's certified territory
equal in number to not less than
16 10% of such voters who voted for the office
of secretary of state at the
17 last preceding general election of that
office.
18 (2) If the petition requests
an election to participate fully in compe-
19 tition in retail sales of generation
service as provided by subsection (b)(1),
20 the following shall appear on the petition:
``We request an election to
21 determine whether the municipal electric
utility of the city of ____________
22 shall be allowed to sell generation service
to customers outside the utility's
23 current territory and shall allow its
current customers to choose their
24 provider of generation services.''
25 (3) If the petition requests
an election to participate in competition
26 in retail sales of generation service only
within the utility's certified ter-
27 ritory as provided by subsection (b)(2),
the following shall appear on the
28 petition: ``We request an election to
determine whether the municipal
29 electric utility of the city of
____________ shall allow its customers to
30 choose their provider of generation
services.''
31 (e) (1) When a proposition is
submitted pursuant to this section to
32 participate fully in competition in retail
sales of generation service as
33 provided by subsection (b)(1), the county
election officer shall cause the
34 following proposition to be placed on the
ballot in the utility's certified
35 territory at an election called and held in
the manner provided by K.S.A.
36 10-120 and amendments thereto: ``Shall the
municipal electric utility of
37 the city of ____________ be allowed to sell
generation service to cus-
38 tomers outside the utility's current
territory and allow its current custom-
39 ers to choose their provider of generation
services?''
40 (2) When a proposition is
submitted pursuant to this section to par-
41 ticipate in competition in retail sales of
generation service only within the
42 utility's certified territory as provided
by subsection (b)(2), the county
43 election officer shall cause the following
proposition to be placed on the
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8
1 ballot in the utility's certified
territory at an election called and held in
2 the manner provided by K.S.A. 10-120
and amendments thereto: ``Shall
3 the municipal electric utility of the
city of ____________ allow its cus-
4 tomers to choose their provider of
generation services?''
5 (f) An election
provided for by this section shall be conducted, and
6 the votes counted and canvassed, in
the manner provided by law for
7 question submitted elections of the
county.
8 (g) The governing body
of a municipality is authorized to spend pub-
9 lic moneys of the municipality to
inform voters in an unbiased manner
10 about probable impacts of participation in
retail competition.
11 (h) (1) If a municipality
owning or operating a municipal electric util-
12 ity has elected to participate in
competition in retail sales of generation
13 service as provided by subsection (b)(1) or
(b)(2), the municipality shall
14 not subsequently elect to discontinue
participation in competition in retail
15 sales of generation service.
16 (2) If a municipality owning
or operating a municipal electric utility
17 has elected to participate in competition
in retail sales of generation serv-
18 ice only within the utility's certified
territory as provided by subsection
19 (b)(2), the municipality may subsequently
elect to participate fully in com-
20 petition in retail sales of generation
service as provided by subsection
21 (b)(1).
22 (i) If a municipality owning
or operating a municipal electric utility
23 does not elect to participate fully in
competition in retail sales of gener-
24 ation service as provided by subsection
(b)(1):
25 (1) The utility shall not
sell generation service at retail to consumers
26 outside the utility's certified territory;
and
27 (2) except as provided by
subsections (a) and (b)(2), no competitive
28 electricity provider shall sell generation
service at retail to consumers
29 within the utility's certified
territory.
30 New Sec. 6. (a) Before July
1, 2001, an electric cooperative may elect
31 not to participate in competition in retail
sales of generation service. To
32 elect not to participate, the cooperative
shall call a special election. The
33 election may be called by the board of
trustees or shall be called within
34 180 days after receipt of a valid petition
signed by not less than 10% of
35 the members of the cooperative. The
proposition appearing on the ballot
36 at the election shall be: ``Shall (name
of the cooperative) allow members
37 to choose their provider of generation
services?'' Written notice of the
38 election shall be delivered to the members
not less than 21 nor more than
39 45 days before the date of the election.
Voting on the proposition shall
40 be by mail ballot. If a majority of the
members voting on the proposition
41 vote against the proposition, the electric
cooperative shall not participate
42 in competition in retail sales of
generation service and no competitive
43 electricity provider shall sell generation
service at retail to consumers
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9
1 within the cooperative's certified
territory.
2 (b) If an electric
cooperative has elected not to participate in com-
3 petition in retail sales of
generation service, the cooperative may subse-
4 quently elect to participate. To
elect to participate, the cooperative shall
5 call a special election in the same
manner as provided by subsection (a).
6 If a majority of the members voting
on the proposition at such election
7 vote in favor of the proposition, the
electric cooperative shall participate
8 in competition in retail sales of
generation service.
9 (c) Any person wishing
to disseminate to members of an electric co-
10 operative any information relating to a
proposition to be submitted at an
11 election under this section may submit the
information to the electric
12 cooperative. The electric cooperative shall
mail the information to the
13 members of the cooperative as soon as
practicable. All expenses incidental
14 to mailing the information shall be paid by
the person submitting the
15 information to the electric
cooperative.
16 (d) Once an electric
cooperative participates in competition in retail
17 sales of generation service, the
cooperative shall not subsequently elect
18 to discontinue participation.
19 (e) If an electric
cooperative has elected not to participate in com-
20 petition in retail sales of generation
service, the cooperative shall not sell
21 generation service at retail to consumers
outside the cooperative's certi-
22 fied territory unless the cooperative
subsequently elects to participate in
23 competition in retail sales of generation
service.
24 New Sec. 7. (a) A utility or
utility's successor may apply to the com-
25 mission for a determination of the
utility's recoverable competitive tran-
26 sition costs. The commission, after notice
and evidentiary hearings in
27 accordance with the provisions of the
Kansas administrative procedure
28 act, shall determine the amount of the
utility's recoverable competitive
29 transition costs. Such costs shall be
computed on a net basis and shall be
30 verifiable and nonmitigable. If two or more
utilities or their successors
31 are affiliated, the commission shall treat
all such utilities and successors
32 as a single utility in determining
recoverable competitive transition costs.
33 (b) The commission shall
allow a utility or utility's successor to re-
34 cover all amounts of the following
determined by the commission: Nu-
35 clear decommissioning costs, low level
radioactive waste disposal costs,
36 high level radioactive waste disposal costs
and generation-related regu-
37 latory assets as offset by regulatory
liabilities that can be credited back to
38 consumers. For all amounts of other
competitive transition costs deter-
39 mined by the commission, the commission
shall determine the amount
40 that a utility or utility's successor shall
be allowed to recover, based on
41 traditionally used considerations deemed
relevant by the commission, in-
42 cluding but not limited to:
43 (1) The extent to which the
utility was legally required to incur the
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10
1 costs;
2 (2) the effectiveness
of the efforts of the utility and any successor to
3 increase and realize the market value
of the assets and to decrease the
4 costs of the contracts and other
legal obligations;
5 (3) the extent to which
rates previously established by the commission
6 have compensated shareholders for the
risk of not recovering the costs;
7 (4) the effects of the
difference between the market value and the
8 cost, including but not limited to
tax considerations, for the assets, con-
9 tracts and other legal
obligations;
10 (5) if the utility had the
discretion to determine whether to incur the
11 costs and if the utility or any successor
had the discretion to determine
12 whether to mitigate the costs;
13 (6) the extent to which: (A)
The costs have been deemed by a regu-
14 latory authority of proper jurisdiction to
have been just and reasonable,
15 either specifically by order or by
inclusion in rates; and (B) the costs will
16 not be recoverable in a competitive
marketplace;
17 (7) the efforts of the
federal government in restructuring or settling
18 the debt of electric cooperatives in Kansas
as the federal government has
19 done in other states; and
20 (8) the extent to which the
utility's restructuring efforts promote and
21 provide for competition in sales of
generation service.
22 (c) The commission, upon its
own motion when evidence of need is
23 apparent, or upon application by a utility
or a utility's successor, may
24 review and determine the remaining, if any,
recoverable competitive tran-
25 sition costs. Such review shall reconcile
differences between actual and
26 expected competitive prices and actual and
expected sales levels for elec-
27 tricity. Any overrecovery or underrecovery
shall be incorporated into a
28 revised competitive transition charge to be
applied prospectively. The
29 revised competitive transition charge also
shall assure continued timely
30 payment of interest and principal on
transition bonds issued in accordance
31 with section 11.
32 (d) The time limit for
recovery of nuclear decommissioning costs, low
33 level radioactive waste disposal costs and
high level radioactive waste dis-
34 posal costs shall end when decommissioning
of the nuclear generating
35 facility is complete. The commission shall
establish reasonable time limits
36 for recovery of each other type of
competitive transition cost, but no such
37 limit shall extend more than 12 years after
July 1, 2001, except that the
38 time limit for recovery of any bonded
indebtedness incurred for financing
39 generation assets and included in
recoverable competitive transition costs
40 of a municipal electric utility shall be
the remaining life of such indebt-
41 edness.
42 (e) Except as provided by
subsection (b)(2) of section 5, the provi-
43 sions of this section shall not apply to
any exempt utility.
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11
1 New Sec. 8. (a) Each
utility, other than an exempt utility, and any
2 successor, shall have the duty to
mitigate competitive transition costs.
3 (b) The commission
shall allow for mitigation of competitive transi-
4 tion costs in electric public utility
rate cases or in special, single-issue
5 filings.
6 New Sec. 9. (a)
Recoverable competitive transition costs shall be re-
7 covered through a unit charge per
kilowatt hour of electricity delivered
8 to consumers or, in the case of
consumers that begin to generate elec-
9 tricity for their own use on or after
January 1, 1998, per kilowatt hour of
10 electricity used, based on the consumer's
history of usage as determined
11 by the commission. The unit charge shall be
assessed equally to all cus-
12 tomers, including consumers that begin to
generate electricity for their
13 own use on or after January 1, 1998. The
amount of the competitive
14 transition charge shall be determined by
the commission for each utility
15 or utility's successor, based on the amount
necessary to recover the re-
16 coverable competitive transition costs in
the period established for re-
17 covery. Except for costs that have resulted
from provision of wholesale
18 electricity to another utility:
19 (1) The charge for
competitive transition costs of a utility other than
20 an electric cooperative shall apply only to
retail customers within the
21 certified territory of the utility or the
utility's predecessor, as the territory
22 existed before July 1, 2001; and
23 (2) the charge for
competitive transition costs of an electric cooper-
24 ative shall apply only to retail customers
within the certified territories or
25 portions thereof, as they existed before
July 1, 2001, that are covered by
26 a generation and transmission electric
cooperative's all power require-
27 ments contract.
28 (b) The competitive
transition charge shall include amounts sufficient
29 to provide for the payment of principal of,
interest on, acquisition or
30 redemption premium of and any other
expenses related to issuing, serv-
31 icing and retiring transition bonds issued
pursuant to authorization by the
32 commission under section 11.
33 (c) The commission shall
establish procedures and mechanisms for
34 collection and distribution of the
competitive transition charge.
35 (d) If two or more utilities
or their successors are affiliated, the com-
36 mission shall treat all such utilities and
successors as a single utility in
37 determining the competitive transition
charge to be imposed under this
38 section and the customers to which the
charge will apply, except that any
39 recoverable competitive transition costs
attributable to an affiliate's share
40 of ownership of generation assets shall be
recovered by a separate com-
41 petitive transition charge applying to only
customers within the certified
42 territory of such affiliate, as such
territory existed before July 1, 2001.
43 New Sec. 10. (a) The
commission, after notice and evidentiary hear-
HB 2619
12
1 ings in accordance with the
provisions of the Kansas administrative pro-
2 cedure act, shall determine the
amount necessary to recover universal
3 service costs in areas served by
competitive electricity providers, subject
4 to the provisions of subsection
(c).
5 (b) On and after July
1, 2001, universal service costs shall be recov-
6 ered through fees for licensure and
renewal of licensure to engage in
7 business as a competitive electricity
provider pursuant to section 19 and
8 through a unit charge per kilowatt
hour of electricity delivered to con-
9 sumers in this state in areas served
by competitive electricity providers.
10 The amount of the universal service charge
shall be determined by the
11 commission. The commission shall establish
procedures and mechanisms
12 for collection and distribution of the
charge, subject to the provisions of
13 subsection (c).
14 (c) (1) In determining costs
that are associated with provision of dis-
15 tribution services in low population
density, high cost areas served by
16 competitive electricity providers and that
negatively impact the afforda-
17 bility of or accessibility to distribution
services in those areas, the com-
18 mission shall base its determination
on:
19 (A) The statewide average
cost of service for classes of customers
20 established by the commission based on one
or more of the following
21 criteria, which shall not include the
physical location of a customer in the
22 state: Annual kilowatt-hour usage, peak
kilowatt usage, character of serv-
23 ice, load factor, revenue, plant
investment, customer type or seasonal
24 demand;
25 (B) the cost of service for
such classes of customers for each distri-
26 bution utility other than an exempt
utility; and
27 (C) standards, established by
commission rules and regulations, that
28 the commission deems necessary to provide a
basic level of distribution
29 services to low population density, high
cost areas, including but not lim-
30 ited to line extensions, customer service
obligations and utility service
31 obligations.
32 (2) The commission shall
establish the initial statewide average cost
33 of service for classes of customers on or
before January 1, 2000.
34 (3) (A) Subject to the
provisions of subsection (c)(2)(B), a distribu-
35 tion utility shall be eligible to receive
moneys from the universal service
36 fund to pay costs that are associated with
provision of the basic level of
37 distribution services in low population
density, high cost areas served by
38 competitive electricity providers and that
negatively impact the afforda-
39 bility of or accessibility to distribution
services in those areas to the extent
40 that the cost of service for a class of
customer of the utility exceeds by
41 25% or more the statewide average cost of
service for that class of cus-
42 tomer.
43 (B) No exempt utility, other
than a municipal utility owned or oper-
HB 2619
13
1 ated by a municipality that has
elected to participate in retail sales of
2 generation service under subsection
(b)(2) of section 5, shall be eligible
3 to receive moneys pursuant to
subsection (c)(2)(A).
4 (d) At least every two
years the commission shall audit and reconcile
5 the costs of and need for the
universal service charge.
6 (e) (1) On or before
July 1, 2001, the commission shall establish the
7 universal electric service fund. The
commission shall utilize a competitive
8 bidding process to select a neutral,
competent and bonded third party to
9 administer the fund. The
administrator shall be responsible for:
10 (A) Collecting and auditing
all relevant information from all persons
11 or other entities receiving moneys from or
providing moneys to the fund;
12 (B) verifying the amount of
the universal service charge necessary to
13 generate the moneys required by the
fund;
14 (C) collecting all moneys due
to the fund; and
15 (D) distributing amounts on a
monthly basis due to persons or other
16 entities receiving moneys from the
fund.
17 (2) Any information made
available or received by the administrator
18 from persons or other entities receiving
moneys from or providing mon-
19 eys to the fund shall not be subject to any
provisions of the Kansas open
20 records act and shall be considered
confidential and proprietary.
21 (3) The administrator shall
be authorized to maintain an action to
22 collect any moneys owed to the fund by any
person or other entity in the
23 district court in the county of the
registered office of such person or entity
24 or, if such person or entity does not have
a registered office in the state,
25 such an action may be maintained in the
county where such person's or
26 entity's principal office is located. If
such person or entity has no principal
27 office in the state, such an action may be
maintained in the district court
28 of any county in which such person or
entity provides service.
29 (4) The administrator shall
be responsible for ensuring that moneys
30 credited to the fund do not fall below the
level necessary to pay all
31 amounts payable from the fund. The
administrator shall have the au-
32 thority to retain and invest in a prudent
and reasonable manner any excess
33 moneys collected in any period to help
ensure that adequate moneys are
34 available to pay all amounts payable in
other periods.
35 New Sec. 11. (a) A utility or
utility's successor may apply to the com-
36 mission for authorization to issue
transition bonds to recover a portion of
37 the utility's recoverable competitive
transition costs. The commission, af-
38 ter notice and opportunity for hearing in
accordance with the provisions
39 of the Kansas administrative procedure act,
shall determine whether to
40 issue an order authorizing issuance of such
bonds. The commission may
41 authorize the issuance of such bonds in an
amount not exceeding 50% of
42 the utility's recoverable competitive
transition costs, as determined at the
43 time of the commission's authorization of
issuance of the bonds. The
HB 2619
14
1 order shall include the amount of
recoverable competitive transition costs
2 authorized to be recovered through
the bond issuance. If the commission
3 authorizes the issuance of transition
bonds, the utility or utility's successor
4 shall retain sole discretion whether
to assign, sell or otherwise transfer
5 intangible transition property or to
cause transition bonds to be issued,
6 including the right to defer or
postpone issuance.
7 (b) The principal of
and interest on transition bonds shall be paid
8 from amounts received from
competitive transition charges established
9 for recovery of recoverable
competitive transition costs pursuant to sec-
10 tion 9. Any order authorizing the issuance
of transition bonds shall require
11 that the proceeds from the issuance of
transition bonds, and any proceeds
12 from the assignment, sale or transfer or
other financing of intangible
13 transition property, shall be used to
reduce the utility's recoverable com-
14 petitive transition costs and to reduce the
related capitalization, in accor-
15 dance with the terms of the order.
16 (c) The effect of any
subsequent refinancing of transition bonds upon
17 the rates authorized in a qualified rate
order shall be as provided in the
18 commission's order authorizing issuance of
the bonds.
19 (d) In an order authorizing
the issuance of transition bonds, the com-
20 mission shall afford flexibility in
establishing the terms and conditions of
21 the bonds, including repayment schedules,
interest rates and other fi-
22 nancing costs. The utility or utility's
successor shall file the final terms of
23 issuance with the commission.
24 (e) Notwithstanding any other
provision of law to the contrary and
25 on such conditions as the commission may
approve, all or portions of the
26 interest of a utility or utility's
successor in intangible transition property
27 may be assigned, sold or transferred to an
assignee and may be pledged
28 or assigned as security by a utility,
utility's successor or assignee to or for
29 the benefit of a financing party. To the
extent that an interest is assigned,
30 sold or transferred or is pledged or
assigned as security, the commission
31 shall authorize the utility or utility's
successor to contract with the as-
32 signee or financing party that the utility
or successor will continue to
33 operate the utility's or successor's system
to provide service to the utility's
34 or successor's customers and will account
for and remit the applicable
35 competitive transition charge to or for the
account of the assignee or
36 financing party.
37 (f) Any right that a utility
or utility's successor has in intangible tran-
38 sition property prior to the property's
sale or transfer or any other right
39 created under this section or by commission
order and assignable under
40 this section or assignable pursuant to
order of the commission shall be
41 only a contract right.
42 (g) (1) Neither intangible
transition property nor any right, title or
43 interest of a utility, utility's successor
or assignee in intangible transition
HB 2619
15
1 property shall be deemed proceeds of
any right or interest other than in
2 the order and the intangible
transition property arising from the order.
3 (2) The granting,
perfection and enforcement of security interests in
4 intangible transition property to
secure transition bonds authorized pur-
5 suant to this section is governed by
this section rather than by the uniform
6 commercial code.
7 (3) A valid and
enforceable security interest in intangible transition
8 property shall attach and be
perfected only by means of a separate filing
9 with the commission, under rules and
regulations adopted by the com-
10 mission. For this purpose:
11 (A) The lien of the
transition bonds authorized pursuant to this sec-
12 tion shall attach automatically to the
intangible transition property from
13 the time of issuance of the bonds.
14 (B) The lien under (A) shall
be deemed a valid and enforceable se-
15 curity interest in the intangible
transition property securing the bonds
16 and shall be continuously perfected if,
before the date of issuance spec-
17 ified in (A) or within 10 days after that
date, a filing has been made by
18 or on behalf of the financing party to
protect that security interest in
19 accordance with the procedures prescribed
by the commission under this
20 subsection. Any filing in respect to such
bonds shall take precedence over
21 any other filing.
22 (C) The lien under (A) is
enforceable against the assignee and all third
23 parties, including judicial lien creditors,
subject only to the rights of any
24 third parties holding security interests in
the intangible transition prop-
25 erty previously perfected in the manner
described in this subsection if
26 value has been given by the purchasers of
the transition bonds. A per-
27 fected lien in intangible transition
property is a continuously perfected
28 security interest in all revenues and
proceeds arising with respect to the
29 associated intangible transition property,
whether or not revenues have
30 accrued. Intangible transition property
constitutes property for the pur-
31 poses of contracts securing transition
bonds, whether or not the related
32 revenues have accrued. The lien created
under this subsection is per-
33 fected and ranks prior to any other lien,
including any judicial lien, which
34 subsequently attaches to the intangible
transition property; to the com-
35 petitive transition charges; and to the
commission's order and any rights
36 created by the order or any proceeds of the
order. The relative priority
37 of a lien created under this subsection is
not defeated or adversely af-
38 fected by changes to the commission's order
or to the competitive tran-
39 sition charges payable by any customer.
40 (D) The relative priority of
a lien created under this subsection is not
41 defeated or adversely affected by the
commingling of revenues arising
42 with respect to intangible transition
property with funds of the utility or
43 utility's successor or other funds of the
assignee.
HB 2619
16
1 (E) If an event of
default occurs under authorized transition bonds,
2 the holders of the bonds or the
holders' authorized representatives, as
3 secured parties, may foreclose or
otherwise enforce the lien in the intan-
4 gible transition property securing
the bonds, subject to the rights of any
5 third parties holding prior security
interests in the intangible transition
6 property perfected in the manner
provided in this subsection. Upon ap-
7 plication by the holders or their
representatives, without limiting their
8 other remedies, the commission shall
order the sequestration and pay-
9 ment to the holders or their
representatives of revenues arising with re-
10 spect to the intangible transition property
pledged to the holders. An
11 order under this subsection shall remain in
full force and effect notwith-
12 standing any bankruptcy, reorganization, or
other insolvency proceedings
13 with respect to the utility, utility's
successor or assignee.
14 (4) The commission shall
establish and maintain a separate system of
15 records to reflect the date and time of
receipt of all filings under this
16 subsection and may provide that transfers
of intangible transition property
17 to an assignee be filed in accordance with
the same system.
18 (h) A transfer of intangible
transition property by a utility or utility's
19 successor to an assignee which the parties
have in the governing docu-
20 mentation expressly stated to be a sale or
other absolute transfer, in a
21 transaction approved in a qualified rate
order, shall be treated as an ab-
22 solute transfer of all of the transferor's
right, title and interest, as in a true
23 sale, and not as a pledge or other
financing, of the intangible transition
24 property, other than for federal and state
income and franchise tax pur-
25 poses. Granting to holders of transition
bonds a preferred right to the
26 intangible transition property or the
provision by the utility or utility's
27 successor of any credit enhancement with
respect to transition bonds shall
28 not impair or negate the characterization
of any transfer as a true sale,
29 other than for federal and state income and
franchise tax purposes. A
30 transfer of intangible transition property
shall be deemed perfected as
31 against third persons, including any
judicial lien creditors, when all of the
32 following have taken place:
33 (1) The commission has issued
the qualified rate order creating in-
34 tangible transition property.
35 (2) A sale or transfer of the
intangible transition property in writing
36 has been executed and delivered to the
assignee.
37 (i) (1) Nothing in this act
shall authorize an action against a retail
38 customer for nonpayment of any competitive
transition charge except by
39 the utility, the utility's successor or any
other entity that sells generation
40 service at retail to customers within the
utility's certified territory as the
41 territory existed before July 1, 2001.
42 (2) The commission has
exclusive jurisdiction over any dispute arising
43 out of the obligations to impose and
collect competitive transition charges.
HB 2619
17
1 (j) The Kansas
development finance authority may issue transition
2 bonds. The activities of the
commission in administering and performing
3 the powers, duties and functions
prescribed by the provisions of this act
4 from the proceeds of such bonds are
hereby approved for the purposes
5 of subsection (b) of K.S.A. 74-8905
and amendments thereto and the
6 authorization of the issuance of such
bonds by the Kansas development
7 finance authority in accordance with
that statute. The provisions of sub-
8 section (a)(1) of K.S.A. 74-8905 and
amendments thereto shall not pro-
9 hibit the issuance of such bonds when
so authorized and any such issuance
10 of bonds is exempt from the provisions of
subsection (a)(1) of K.S.A.
11 74-8905 and amendments thereto.
12 (k) Transition bonds
authorized pursuant to this act shall be special
13 obligations in accordance with their terms
and shall not constitute an
14 indebtedness of the state of Kansas or the
commission, nor shall they
15 constitute indebtedness within the meaning
of any constitutional or stat-
16 utory provision limiting the incurring of
indebtedness.
17 New Sec. 12. (a)
Notwithstanding any other provision of law to the
18 contrary, the final order of the commission
authorizing the issuance of
19 transition bonds and any competitive
transition charge established for
20 recovery of the competitive transition
costs to be recovered from issuance
21 of the bonds shall be irrevocable.
22 (b) If transition bonds have
been issued pursuant to this act, neither
23 the commission, nor any successor
commission or agency exercising func-
24 tions similar to the commission, shall:
25 (1) Revalue or revise the
competitive transition costs to be recovered
26 from issuance of the bonds;
27 (2) reduce, postpone, impair,
terminate or determine unjust or un-
28 reasonable any competitive transition
charge established for recovery of
29 the competitive transition costs to be
recovered from issuance of the
30 bonds; or
31 (3) directly or indirectly
take into account, when setting other rates
32 for the utility, any competitive transition
charge established for recovery
33 of the competitive transition costs to be
recovered from issuance of the
34 bonds.
35 (c) The state pledges and
agrees with the bondholders that the state
36 may not limit or alter any competitive
transition charge established for
37 the competitive transition costs to be
recovered from the issuance of
38 transition bonds authorized under this act,
any order authorizing issuance
39 of such bonds or any right under the bonds
until the bonds, together with
40 the interest on the bonds, are fully met
and discharged.
41 (d) Notwithstanding any other
provision of law to the contrary and
42 on such conditions as the commission may
approve, all or portions of the
43 interest of a utility or utility's
successor in intangible transition property
HB 2619
18
1 may be assigned, sold or transferred
to an assignee and may be pledged
2 or assigned as security by a utility,
utility's successor or assignee to or for
3 the benefit of a financing party. To
the extent that an interest is assigned,
4 sold or transferred or is pledged or
assigned as security, the commission
5 shall authorize the utility or
utility's successor to contract with the as-
6 signee or financing party that the
utility or successor will continue to
7 operate the utility's or successor's
system to provide service to the utility's
8 or successor's customers and will
account for and remit the applicable
9 competitive transition charge to or
for the account of the assignee or
10 financing party.
11 New Sec. 13. (a) Before
January 1, 1999, the commission shall adopt
12 rules and regulations requiring that, on
and after January 1, 2000, utilities'
13 retail electric bills to consumers shall
disclose such components as the
14 commission determines adequately informs
consumers. Separate com-
15 ponents shall include but not be limited
to:
16 (1) Generation service
charges;
17 (2) distribution service
charges;
18 (3) transmission service
charges;
19 (4) competitive transition
charges;
20 (5) universal service
charges; and
21 (6) transactional taxes
relating to the sale or furnishing of electricity.
22 (b) On and after January 1,
2000, municipal electric utilities' bills to
23 retail customers shall disclose all
budgeted transfers to the city general
24 fund. Nothing in this subsection shall be
construed to grant the commis-
25 sion jurisdiction over exempt
utilities.
26 (c) Before January 1, 2000,
the commission shall adopt rules and reg-
27 ulations establishing procedures:
28 (1) To ensure that generation
service of a customer of a competitive
29 electricity provider is not switched to
another competitive electricity pro-
30 vider without reliable confirmation of the
customer's intent to make the
31 change; and
32 (2) for handling of
complaints of unauthorized switching of a cus-
33 tomer's generation service from one
competitive electricity provider to
34 another.
35 (d) Before January 1, 2000,
the commission shall adopt rules and
36 regulations establishing procedures and
standards for a competitive elec-
37 tricity provider to discontinue a
customer's generation service for the
38 customer's nonpayment and to reconnect the
customer's service.
39 (e) The commission shall have
the duty to ensure that the quality of
40 generation and distribution service and
quality of service to customers of
41 such services does not decrease on or after
July 1, 2001.
42 (f) Before July 1, 2001, the
commission shall adopt rules and regu-
43 lations specifying a minimum percentage of
electricity sold by a compet-
HB 2619
19
1 itive electricity provider that must
be generated from renewable re-
2 sources (including but not limited to
wind, solar, hydropower, biomass
3 and landfill gas sources) in order
for the provider to represent that elec-
4 tricity sold by the provider is
produced in a manner that is less detrimental
5 to the environment than electricity
sold by other competitive electricity
6 providers.
7 (g) Before July 1,
2001, the commission shall adopt rules and regu-
8 lations establishing minimum,
enforceable, uniform standards for the
9 form and content of disclosure and
labeling that the commission deter-
10 mines will enable retail electric customers
easily to compare the price,
11 price variability, contract terms and
conditions, resource mix and envi-
12 ronmental characteristics of retail
electricity purchases. At a minimum
13 such standards shall require that all
competitive electricity providers pro-
14 vide the following to prospective retail
customers:
15 (1) The duration of the
agreement with the provider;
16 (2) the prices for all
components of generation service and any other
17 fees that the provider may charge or levy
separately at any time during
18 the term of the agreement;
19 (3) clear specification of
the degree of variability of each charge over
20 time, including whether the price for each
component is fixed, any min-
21 imum or maximum level for any price that is
not fixed and any index,
22 formula or objective measure by which
prices that are not fixed will be
23 ascertained; and
24 (4) the effective price in
cents per kilowatt hour for all generation
25 service sold under the agreement for
various levels of consumption.
26 New Sec. 14. (a) On and after
July 1, 2001, each distribution utility
27 other than an exempt utility, upon request
by a customer, shall enter into
28 a contract with such customer, whereby the
customer may attach or con-
29 nect to the utility's delivery and metering
system an apparatus or device
30 for the purpose of feeding excess
electricity which is generated by such
31 customer's energy producing system into the
utility's system. No such
32 apparatus or device shall cause damage to
the distribution utility's system
33 or equipment or present an undue hazard to
utility personnel. Such con-
34 tract shall include, but need not be
limited to, provisions relating to fair
35 and equitable compensation on such
customer's monthly bill for energy
36 supplied to the utility by such customer,
and each of the following terms
37 and conditions:
38 (1) The utility, on the
customer's monthly bill, will compensate the
39 customer for electricity supplied by the
customer. Compensation shall be
40 at the market price for electricity being
purchased by the utility at that
41 time.
42 (2) The utility will supply,
own and maintain all necessary meters and
43 associated equipment utilized for billing.
In addition, for the purposes of
HB 2619
20
1 monitoring customer generation and
load, the utility, at its expense, may
2 install load research metering. The
customer, at no expense to the utility,
3 shall supply a suitable location for
meters and associated equipment used
4 for billing and load research.
5 (3) For the purpose of
insuring the safety and quality of electricity
6 distributed by the utility's
facilities, the utility shall have the right to re-
7 quire the customer, at certain times
and as electrical operating conditions
8 warrant, to limit the production of
electrical energy from the generating
9 facility to an amount no greater than
the load at the customer's facility of
10 which the generating facility is a
part.
11 (4) The customer shall
furnish, install, operate and maintain in good
12 order and repair and without cost to the
utility, any relays, locks and seals,
13 breakers, automatic synchronizers and other
control and protective ap-
14 paratus designated by the utility as
required as suitable for the operation
15 of the generator in parallel with
electricity distributed by the utility's
16 facilities.
17 (5) The utility may install,
own and maintain a disconnecting device
18 located near the electric meter or
meters.
19 (6) Interconnection
facilities between the customer's and the utility's
20 equipment shall be accessible at all
reasonable times to utility personnel.
21 (7) The customer may be
required to reimburse the utility for any
22 equipment or facilities required as a
result of the installation by the cus-
23 tomer of generation in parallel with
electricity distributed by the utility's
24 facilities.
25 (8) The customer shall notify
the utility prior to the initial energizing
26 and start-up testing of the customer-owned
generator and the utility shall
27 have the right to have a representative
present at such test.
28 (9) The utility may require a
special agreement for conditions related
29 to technical and safety aspects of
generation in parallel with electricity
30 distributed by the utility's
facilities.
31 (b) If a customer and a
distribution utility cannot agree to terms and
32 conditions of a contract provided for by
this section, the commission shall
33 establish the terms and conditions for such
contract.
34 (c) Service under any
contract provided for by this section shall be
35 subject to the utility's rules and
regulations on file with the commission.
36 (d) The provisions of this
section shall require a distribution utility to
37 accept and purchase only electricity
generated by a system that was in
38 operation before January 1, 1998, and shall
require such utility to accept
39 and purchase such electricity only while a
competitive transition charge
40 is being collected to recover recoverable
competitive transition costs of
41 the utility or its predecessor.
42 New Sec. 15. (a) The
commission shall adopt rules and regulations
43 requiring that, on and after July 1, 2001,
a transmission or distribution
HB 2619
21
1 utility, other than an exempt
utility, shall provide the utility's transmission
2 or distribution services to all
generation service customers in the utility's
3 certified territory, to all municipal
electric utilities and electric coopera-
4 tives that are not exempt utilities
and to all competitive electricity pro-
5 viders, whether affiliated with the
utility or not, at rates and on terms of
6 access and conditions comparable to
the transmission or distribution util-
7 ity's own use of its system.
8 (b) (1) The commission
shall adopt rules and regulations, effective
9 on and after July 1, 2001,
establishing standards of conduct for transmis-
10 sion and distribution utilities that are
competitive electricity providers or
11 that are affiliated with a competitive
electricity provider, for the purpose
12 of ensuring that:
13 (A) The competitive
electricity provider, with respect to the provision
14 of the generation service, maintains an
arm's length relationship with the
15 utility.
16 (B) The business or
organizational relationship, or both, between the
17 utility and the competitive electricity
provider shall not interfere with the
18 development of effective competition in
retail sales of generation service.
19 (2) Such standards shall
include, but not be limited to, a requirement
20 that:
21 (A) The utility shall not
give, through a tariff provision or otherwise,
22 the utility's affiliated competitive
electricity provider or customers of the
23 utility's affiliated competitive
electricity provider preference over non-
24 affiliated competitive electricity
providers or customers of nonaffiliated
25 competitive electricity providers in
matters relating to distribution or
26 transmission services.
27 (B) All regulated
distribution and transmission services offered by the
28 utility, including any discount, rebate or
fee waiver, must be available to
29 all similarly situated customers and
competitive electricity providers si-
30 multaneously and on the same basis, to the
extent technically possible,
31 and without undue or unreasonable
discrimination.
32 (C) The utility shall not
sell or otherwise provide distribution or trans-
33 mission services to the utility's
affiliated competitive electricity provider
34 without either posting the offering
electronically on a well-known source
35 or otherwise making a sufficient offering
to the market for those services.
36 (D) The utility shall process
all similar requests for a distribution or
37 transmission service in the same manner and
within the same period of
38 time.
39 (E) The utility shall not
condition or tie the provision of any distri-
40 bution or transmission service or rate
agreement by the utility to the
41 provision of any service in which an
affiliated competitive electricity pro-
42 vider is involved.
43 (F) The utility shall process
all similar requests for information in the
HB 2619
22
1 same manner and within the same
period of time. The utility shall not
2 provide information to an affiliated
competitive electricity provider with-
3 out a request when information is
made available to nonaffiliated com-
4 petitive electricity providers only
upon request. The utility shall not allow
5 an affiliated competitive electricity
provider preferential access to any
6 nonpublic information regarding the
distribution or transmission system
7 or customers taking service from the
utility that is not made available to
8 nonaffiliated competitive electricity
providers upon request, and the util-
9 ity shall instruct all of its
employees not to provide affiliated competitive
10 electricity providers or nonaffiliated
competitive electricity providers any
11 preferential access to nonpublic
information.
12 (G) Except with the
customer's consent, employees of the utility shall
13 not share with any affiliated competitive
electricity provider or any non-
14 affiliated competitive electricity
provider: (i) Any market information ac-
15 quired from the affiliated competitive
electricity provider or from any
16 nonaffiliated competitive electricity
provider; or (ii) any market infor-
17 mation developed by the utility in the
course of responding to requests
18 for distribution or transmission
service.
19 (H) The utility and
competitive electricity provider affiliated with the
20 utility shall keep separate books of
accounts and records, which are sub-
21 ject to review by the commission.
22 New Sec. 16. (a) On or before
February 1, 2000, each utility shall
23 file with the commission a plan for
restructuring such utility to implement
24 the provisions of this act. Hearings on
utilities' restructuring plans shall
25 be set on agreement of the parties but
shall be set without agreement not
26 later than June 1, 2000. Not later than
December 31, 2000, and after
27 notice and hearing in accordance with the
Kansas administrative proce-
28 dure act, the commission shall issue orders
determining recoverable tran-
29 sition costs and such other matters as
appropriate to implement compe-
30 tition in retail sales of generation
service.
31 (b) The commission shall have
jurisdiction over a utility's affiliates
32 and access to all accounts and records of
such affiliates to investigate or
33 receive complaints regarding
anticompetitive practices, marketing abuses,
34 cost allocation rules, cross-subsidies,
discriminatory practices, undue pref-
35 erences, rates, tariffs, charges and the
rendition of efficient and sufficient
36 services.
37 New Sec. 17. (a) A
distribution utility shall act as an emergency sup-
38 plier of generation service to any
noninterruptable customer in the util-
39 ity's certified territory if the customer's
competitive electricity provider
40 fails to supply generation service for
reasons other than the customer's
41 nonpayment.
42 (b) A competitive electricity
provider that fails to provide generation
43 service to the provider's customer for
reasons other than the customer's
HB 2619
23
1 nonpayment shall reimburse the
distribution utility acting as an emer-
2 gency supplier at a multiple of the
actual cost for that generation service.
3 The commission shall determine and
authorize the multiple used.
4 (c) If a competitive
electricity provider fails to reimburse a distribu-
5 tion utility as required by
subsection (b), the customer shall be respon-
6 sible for reimbursing the utility for
the cost of the generation service
7 provided by the utility plus a
reasonable rate of return.
8 (d) Except as provided
by subsections (a) and (b)(2) of section 5, the
9 provisions of this section shall not
apply to any exempt utility.
10 New Sec. 18. (a) In areas of
the state served by competitive electric-
11 ity providers, customers of all classes
shall be entitled to aggregate their
12 electrical loads on a voluntary basis if
each customer agrees to do so by
13 a positive written declaration. Aggregation
may be accomplished by pri-
14 vate entities, by political or taxing
subdivisions or on any other basis made
15 available by market opportunities.
16 (b) If a political or taxing
subdivision seeks to serve as an aggregator
17 on behalf of retail customers, the
political or taxing subdivision shall offer
18 the opportunity to purchase generation
service to all retail customers
19 within the subdivision's jurisdiction.
However, if a political or taxing sub-
20 division serves as an aggregator, the
subdivision shall not require consum-
21 ers within the subdivision's jurisdiction
to purchase generation service
22 from the subdivision.
23 New Sec. 19. (a) On and after
July 1, 2001, no competitive electricity
24 provider shall engage in business as such
within this state without having
25 first obtained a license from the
commission.
26 (b) The commission shall
adopt rules and regulations establishing
27 procedures and conditions that a
competitive electricity provider shall be
28 required to comply with to obtain a license
to engage in business as a
29 competitive electricity provider. Such
procedures and conditions shall
30 include requirements relating to:
31 (1) Reliability of service,
including but not limited to a requirement
32 that the applicant file with the commission
evidence satisfactory to the
33 commission that the applicant has the
ability to enter into binding inter-
34 connection arrangements for transmission
and distribution services;
35 (2) financial and operational
fitness, including but not limited to: (A)
36 A requirement that the applicant file with
the commission evidence sat-
37 isfactory to the commission that the
applicant has financial capacity suf-
38 ficient to refund deposits to retail
customers in the case of bankruptcy,
39 nonperformance or any other reason; and (B)
a requirement that, when
40 the commission determines necessary, the
applicant shall file a bond with
41 the commission as evidence of financial
ability to withstand market dis-
42 turbances or other events that may increase
the cost of providing service
43 or to provide for uninterrupted service to
the applicant's customers;
HB 2619
24
1 (3) billing practices
and customer service, including but not limited
2 to a requirement of disclosure of
customer complaints filed against the
3 applicant with a regulatory agency
other than the commission during the
4 12 months before the filing of the
application;
5 (4) disclosure of
pending legal actions against the applicant; and
6 (5) disclosure of the
names and business addresses of all affiliates of
7 the applicant.
8 (c) In addition to
complying with any requirements adopted pursuant
9 to subsection (b), a competitive
electricity provider, in order to qualify
10 for a license, shall:
11 (1) Establish an office in
this state;
12 (2) receive all payments from
customers and distribution utilities in
13 this state at such office;
14 (3) submit evidence
satisfactory to the commission that the provider
15 complies with the provisions of subsection
(d); and
16 (4) make an appointment, in
writing, of the secretary of state, or the
17 secretary's successor in office, to be the
competitive electricity provider's
18 agent for service of process in any action
or proceeding arising out of the
19 competitive electricity provider's engaging
in business as such in this state.
20 Such appointment, in writing, shall be
evidence of the competitive elec-
21 tricity provider's agreement that any such
process that is served on the
22 secretary of state shall be of the same
legal force and validity as if served
23 upon the competitive electricity provider
personally within the state.
24 (d) (1) If a competitive
electricity provider or an affiliate of a pro-
25 vider had a certified territory in this
state before July 1, 2001, the provider
26 shall not be eligible for a license unless
there is competition in generation
27 service in such territory.
28 (2) If a competitive
electricity provider or an affiliate of the provider
29 did not have a certified territory in this
state before July 1, 2001, the
30 provider shall not be eligible for a
license unless all electricity delivered
31 to the provider's retail customers in this
state is generated in states that
32 have provided for competition in retail
sales of generation service.
33 (e) If, after reviewing the
license application of a competitive elec-
34 tricity provider, the commission finds that
the applicant is qualified to be
35 a competitive electricity provider, the
commission shall issue a license to
36 the applicant.
37 (f) After notice and an
opportunity for hearing in accordance with
38 the Kansas administrative procedure act,
the commission may deny an
39 application for a license to engage in
business as a competitive electricity
40 provider or may limit, suspend or revoke a
license if the action is necessary
41 to protect the interests of the public or
to enforce the provisions of this
42 act or a rule and regulation of the
commission.
43 (g) In determining whether an
applicant is qualified for a license to
HB 2619
25
1 engage in business as a competitive
electricity provider or whether to
2 deny an application for a license or
to limit, suspend or revoke a license,
3 the commission may consider whether
the applicant for or holder of the
4 license, or any affiliate thereof,
has engaged in any activities that are
5 inconsistent with provision of
reliable service to customers or with effec-
6 tive competition in retail sales of
generation service.
7 (h) A license to engage
in business as a competitive electricity pro-
8 vider shall be valid for a term of
five years and shall be renewable under
9 the same terms and conditions as an
original license.
10 (i) The commission shall
adopt rules and regulations establishing fees
11 and procedures for application, renewal and
issuance of licenses. Appli-
12 cation fees shall be in an amount
determined by the commission to be
13 necessary to pay the costs of processing
applications and issuing licenses.
14 License and renewal fees shall be in
amounts determined by the com-
15 mission to be necessary to administer and
enforce the provisions of this
16 act, pay for administration of the
universal service fund and contribute to
17 payment of universal service costs.
18 (j) Rules and regulations
adopted pursuant to this section:
19 (1) Shall not be unduly
burdensome;
20 (2) shall not unnecessarily
delay or inhibit the initiation and devel-
21 opment of competition in retail sales of
generation service; and
22 (3) may establish, when
appropriate to carry out the provisions of this
23 act, different requirements for licensing
competitive electricity providers
24 of: (A) Different services; or (B) similar
services to different classes of
25 customers.
26 (k) The provisions of this
section shall not apply to:
27 (1) An electric cooperative
engaging in business as a competitive elec-
28 tricity provider solely within the
cooperative's certified territory;
29 (2) a municipal utility
engaging in business as a competitive electricity
30 provider solely within the utility's
certified territory; or
31 (3) any other political or
taxing subdivision engaging in business as a
32 competitive electricity provider solely
within the boundaries of the sub-
33 division.
34 New Sec. 20. (a) The
commission may adopt such rules and regu-
35 lations as the commission deems necessary
to administer and enforce the
36 provisions of the electric utility
restructuring act.
37 (b) For the purpose of
administering and enforcing the provisions of
38 the electric utility restructuring act, the
commission shall have the same
39 powers and duties with respect to
distribution utilities, whether or not
40 rate regulated, as the commission has to
administer and enforce the pro-
41 visions of chapter 66 of the Kansas
Statutes Annotated with respect to
42 distribution utilities that are rate
regulated by the commission.
43 (c) After notice and an
opportunity for hearing, the commission may
HB 2619
26
1 impose an administrative fine in an
amount not exceeding $5,000 per day
2 for each occurrence of a violation of
section 13, 15 or 19 or any rule and
3 regulation of the commission adopted
thereunder. Such fine shall be in
4 addition to any other penalty
provided by law.
5 New Sec. 21. The state,
the commission and Kansas utilities shall
6 work with the federal government,
other states in the region and inter-
7 state power pools to establish
independent system operators or their func-
8 tional equivalents to operate the
transmission system and interstate power
9 pools.
10 New Sec. 22. On and after
July 1, 1998, nothing shall preclude the
11 commission from approving, proposing or
endorsing performance-based
12 or incentive rate mechanisms and rate caps
as part of the commission's
13 rate making process for electric public
utilities for the purpose of bene-
14 fiting both customers and utilities,
allowing more expeditious setting of
15 rates with consideration of factors other
than cost of service and allowing
16 the greatest possible mitigation of
competitive transition costs.
17 New Sec. 23. The department
of health and environment shall be
18 the lead agency to coordinate state and
local governments' review of en-
19 vironmental impact statements filed for
siting of electric generation fa-
20 cilities.
21 New Sec. 24. (a) There is
hereby created the electric utility dereg-
22 ulation oversight committee. The committee
shall consist of the following
23 members:
24 (1) The chairpersons,
vice-chairpersons and ranking minority mem-
25 bers of the house and senate standing
committees on utilities, or a mem-
26 ber of the respective committee designed by
such chairperson, vice-chair-
27 person or ranking minority member; and
28 (2) the chairpersons and
ranking minority members of the house
29 standing committee on appropriations and
the senate standing committee
30 on ways and means, or a member of the
respective committee designed
31 by such chairperson or ranking minority
member.
32 (b) The legislative
coordinating council shall designate one member
33 of the oversight committee to serve as
chairperson of the committee and
34 one member of the committee from the
opposite house to serve as
35 vice-chairperson. The chairperson and
vice-chairperson shall serve for
36 terms of two years.
37 (c) The oversight committee
shall meet on call of the chairperson.
38 Members of the oversight committee shall
receive compensation and
39 travel expenses and subsistence expenses or
allowances as provided in
40 K.S.A. 75-3212 and amendments thereto, when
attending meetings of
41 the committee.
42 (d) The provisions of the
acts contained in article 12 of chapter 46 of
43 the Kansas Statutes Annotated, and
amendments thereto, applicable to
HB 2619
27
1 special committees shall apply to the
oversight committee to the extent
2 that such provisions do not conflict
with the specific provisions of this
3 section.
4 (e) The oversight
committee shall:
5 (1) Monitor and review
implementation of the provisions of this act;
6 (2) recommend to the
house and senate standing committees on util-
7 ities, the house standing committee
on appropriations and the senate
8 standing committee on ways and means
any legislation that the oversight
9 committee determines advisable to
further the purposes of this act;
10 (3) recommend to the
commission any rules and regulations or other
11 measures that the oversight committee
determines advisable to further
12 the purposes of this act;
13 (4) review and make
recommendation regarding commission staff
14 and funding as the committee determines
necessary to administer the
15 provisions of this act;
16 (5) monitor federal
legislation and administrative actions that have an
17 impact on the implementation of this
act;
18 (6) monitor and report to the
house and senate standing committees
19 on utilities, the house standing committee
on appropriations and the sen-
20 ate standing committee on ways and means
regarding whether the com-
21 mission treats fairly all affected parties
while implementing the legislative
22 intent of this act that all retail
customers will benefit from restructuring
23 of the electric utility industry without
unduly onerous regulatory require-
24 ments; and
25 (7) perform such other
responsibilities as the committee determines
26 will promote fair competition in the
provision of generation service.
27 (f) On or before the first
day of each legislative session, the oversight
28 committee shall submit to the house and
senate standing committees on
29 utilities, the house standing committee on
appropriations and the senate
30 standing committee on ways and means a
report of the committee's find-
31 ings and recommendations.
32 (g) The electric deregulation
oversight committee is hereby abolished
33 on July 1, 2006.
34 New Sec. 25. The commission,
in conjunction with the citizens' util-
35 ity ratepayer board, shall organize a
consumer education advisory board
36 to investigate and recommend methods of
educating the public about the
37 implementation of competition in retail
sales of generation service and
38 its impact on consumers. The advisory board
shall address and make rec-
39 ommendations on the level of funding
necessary for adequate educational
40 efforts, the aspects of retail access on
which consumers need education,
41 the most effective means of educating
consumers, the appropriate entities
42 to undertake the educational effort and any
other relevant matters. The
43 commission shall consider the board's
recommendations and submit them
HB 2619
28
1 to the legislature on or before the
first day of the 1999 regular legislative
2 session.
3 New Sec. 26. (a) There
is hereby established the joint committee on
4 taxation of electric public
utilities. The joint committee shall consist of
5 13 members, as follows: The
chairpersons, vice-chairpersons and ranking
6 minority members of the house and
senate standing committees on tax-
7 ation and assessment and taxation,
the house and senate standing com-
8 mittees on utilities and the
chairperson of the retail wheeling task force.
9 (b) Within 30 days
after the effective date of this act, the joint com-
10 mittee shall organize and elect a
chairperson and vice chairperson. The
11 joint committee may meet at any time and at
any place within the state
12 on call of the chairperson. Members of the
joint committee shall receive
13 compensation, travel expenses and
subsistence expenses or allowances as
14 provided in K.S.A. 75-3212, and amendments
thereto, when attending
15 meetings of such committee. Amounts paid
under authority of this section
16 shall be paid from appropriations for
legislative expense and vouchers
17 therefor shall be prepared by the director
of legislative administrative
18 services and approved by the chairperson or
vice-chairperson of the leg-
19 islative coordinating council.
20 (c) The staff of the office
of the revisor of statutes, the legislative
21 research department and the division of
legislative administrative services
22 shall provide such assistance as may be
requested by the joint committee
23 and authorized by the legislative
coordinating council. The legislative di-
24 vision of post audit shall provide such
assistance as may be requested by
25 the committee and authorized by the
legislative post audit committee.
26 The department of revenue, the commission
and all other state agencies
27 shall provide assistance to the joint
committee as may be requested by
28 the committee.
29 (d) The joint committee shall
study, investigate and analyze the ram-
30 ifications to the taxing systems of the
state and its political subdivisions
31 arising from the deregulation of electric
generation public utilities and
32 the relative tax impacts upon and among
electric generation public util-
33 ities. The joint committee shall submit to
the legislature on or before
34 January 11, 1999, a final report of the
committee's findings and recom-
35 mendations. The committee may introduce
such legislation as it deems
36 necessary in the performance of its
function.
37 (e) The joint committee is
hereby abolished on and after January 11,
38 1999.
39 New Sec. 27. If any provision
of this act or its application to any
40 person or circumstances is held invalid,
the invalidity shall not affect other
41 provisions or applications of this act that
can be given effect without the
42 invalid provision or application. To this
end the provisions of this act are
43 severable.
HB 2619
29
1 Sec. 28. K.S.A. 1997
Supp. 45-221 is hereby amended to read as
2 follows: 45-221. (a) Except to the
extent disclosure is otherwise required
3 by law, a public agency shall not be
required to disclose:
4 (1) Records the
disclosure of which is specifically prohibited or re-
5 stricted by federal law, state
statute or rule of the Kansas supreme court
6 or the disclosure of which is
prohibited or restricted pursuant to specific
7 authorization of federal law, state
statute or rule of the Kansas supreme
8 court to restrict or prohibit
disclosure.
9 (2) Records which are
privileged under the rules of evidence, unless
10 the holder of the privilege consents to the
disclosure.
11 (3) Medical, psychiatric,
psychological or alcoholism or drug depend-
12 ency treatment records which pertain to
identifiable patients.
13 (4) Personnel records,
performance ratings or individually identifia-
14 ble records pertaining to employees or
applicants for employment, except
15 that this exemption shall not apply to the
names, positions, salaries and
16 lengths of service of officers and
employees of public agencies once they
17 are employed as such.
18 (5) Information which would
reveal the identity of any undercover
19 agent or any informant reporting a specific
violation of law.
20 (6) Letters of reference or
recommendation pertaining to the char-
21 acter or qualifications of an identifiable
individual.
22 (7) Library, archive and
museum materials contributed by private
23 persons, to the extent of any limitations
imposed as conditions of the
24 contribution.
25 (8) Information which would
reveal the identity of an individual who
26 lawfully makes a donation to a public
agency, if anonymity of the donor
27 is a condition of the donation.
28 (9) Testing and examination
materials, before the test or examination
29 is given or if it is to be given again, or
records of individual test or ex-
30 amination scores, other than records which
show only passage or failure
31 and not specific scores.
32 (10) Criminal investigation
records, except that the district court, in
33 an action brought pursuant to K.S.A.
45-222, and amendments thereto,
34 may order disclosure of such records,
subject to such conditions as the
35 court may impose, if the court finds that
disclosure:
36 (A) Is in the public
interest;
37 (B) would not interfere with
any prospective law enforcement action;
38 (C) would not reveal the
identity of any confidential source or un-
39 dercover agent;
40 (D) would not reveal
confidential investigative techniques or proce-
41 dures not known to the general public;
42 (E) would not endanger the
life or physical safety of any person; and
43 (F) would not reveal the
name, address, phone number or any other
HB 2619
30
1 information which specifically and
individually identifies the victim of any
2 sexual offense in article 35 of
chapter 21 of the Kansas Statutes Anno-
3 tated, and amendments thereto.
4 (11) Records of
agencies involved in administrative adjudication or
5 civil litigation, compiled in the
process of detecting or investigating vio-
6 lations of civil law or
administrative rules and regulations, if disclosure
7 would interfere with a prospective
administrative adjudication or civil
8 litigation or reveal the identity of
a confidential source or undercover
9 agent.
10 (12) Records of emergency or
security information or procedures of
11 a public agency, or plans, drawings,
specifications or related information
12 for any building or facility which is used
for purposes requiring security
13 measures in or around the building or
facility or which is used for the
14 generation or transmission of power, water,
fuels or communications, if
15 disclosure would jeopardize security of the
public agency, building or
16 facility.
17 (13) The contents of
appraisals or engineering or feasibility estimates
18 or evaluations made by or for a public
agency relative to the acquisition
19 of property, prior to the award of formal
contracts therefor.
20 (14) Correspondence between a
public agency and a private individ-
21 ual, other than correspondence which is
intended to give notice of an
22 action, policy or determination relating to
any regulatory, supervisory or
23 enforcement responsibility of the public
agency or which is widely dis-
24 tributed to the public by a public agency
and is not specifically in response
25 to communications from such a private
individual.
26 (15) Records pertaining to
employer-employee negotiations, if dis-
27 closure would reveal information discussed
in a lawful executive session
28 under K.S.A. 75-4319, and amendments
thereto.
29 (16) Software programs for
electronic data processing and documen-
30 tation thereof, but each public agency
shall maintain a register, open to
31 the public, that describes:
32 (A) The information which the
agency maintains on computer facil-
33 ities; and
34 (B) the form in which the
information can be made available using
35 existing computer programs.
36 (17) Applications, financial
statements and other information sub-
37 mitted in connection with applications for
student financial assistance
38 where financial need is a consideration for
the award.
39 (18) Plans, designs, drawings
or specifications which are prepared by
40 a person other than an employee of a public
agency or records which are
41 the property of a private person.
42 (19) Well samples, logs or
surveys which the state corporation com-
43 mission requires to be filed by persons who
have drilled or caused to be
HB 2619
31
1 drilled, or are drilling or causing
to be drilled, holes for the purpose of
2 discovery or production of oil or
gas, to the extent that disclosure is limited
3 by rules and regulations of the state
corporation commission.
4 (20) Notes, preliminary
drafts, research data in the process of anal-
5 ysis, unfunded grant proposals,
memoranda, recommendations or other
6 records in which opinions are
expressed or policies or actions are pro-
7 posed, except that this exemption
shall not apply when such records are
8 publicly cited or identified in an
open meeting or in an agenda of an open
9 meeting.
10 (21) Records of a public
agency having legislative powers, which rec-
11 ords pertain to proposed legislation or
amendments to proposed legisla-
12 tion, except that this exemption shall not
apply when such records are:
13 (A) Publicly cited or
identified in an open meeting or in an agenda
14 of an open meeting; or
15 (B) distributed to a majority
of a quorum of any body which has au-
16 thority to take action or make
recommendations to the public agency with
17 regard to the matters to which such records
pertain.
18 (22) Records of a public
agency having legislative powers, which rec-
19 ords pertain to research prepared for one
or more members of such
20 agency, except that this exemption shall
not apply when such records are:
21 (A) Publicly cited or
identified in an open meeting or in an agenda
22 of an open meeting; or
23 (B) distributed to a majority
of a quorum of any body which has au-
24 thority to take action or make
recommendations to the public agency with
25 regard to the matters to which such records
pertain.
26 (23) Library patron and
circulation records which pertain to identi-
27 fiable individuals.
28 (24) Records which are
compiled for census or research purposes and
29 which pertain to identifiable
individuals.
30 (25) Records which represent
and constitute the work product of an
31 attorney.
32 (26) Records of a utility or
other public service pertaining to individ-
33 ually identifiable residential customers of
the utility or service, including
34 names and addresses of customers of a
municipal electric utility owned
35 or operated by a municipality that has
elected to participate in competi-
36 tion in retail sales of generation
service as provided by section (b)(1) or
37 (2) of section 5, except that
information concerning billings for specific
38 individual customers named by the requester
shall be subject to disclo-
39 sure as provided by this act.
40 (27) Specifications for
competitive bidding, until the specifications
41 are officially approved by the public
agency.
42 (28) Sealed bids and related
documents, until a bid is accepted or all
43 bids rejected.
HB 2619
32
1 (29) Correctional
records pertaining to an identifiable inmate or re-
2 lease, except that:
3 (A) The name;
photograph and other identifying information; sen-
4 tence data; parole eligibility date;
custody or supervision level; disciplinary
5 record; supervision violations;
conditions of supervision, excluding
6 requirements pertaining to mental
health or substance abuse counseling;
7 location of facility where
incarcerated or location of parole office main-
8 taining supervision and address of a
releasee whose crime was committed
9 after the effective date of this act
shall be subject to disclosure to any
10 person other than another inmate or
releasee, except that the disclosure
11 of the location of an inmate transferred to
another state pursuant to the
12 interstate corrections compact shall be at
the discretion of the secretary
13 of corrections;
14 (B) the ombudsman of
corrections, the attorney general, law enforce-
15 ment agencies, counsel for the inmate to
whom the record pertains and
16 any county or district attorney shall have
access to correctional records to
17 the extent otherwise permitted by law;
18 (C) the information provided
to the law enforcement agency pursu-
19 ant to the sex offender registration act,
K.S.A. 22-4901, et seq., and
20 amendments thereto, shall be subject to
disclosure to any person, except
21 that the name, address, telephone number or
any other information which
22 specifically and individually identifies
the victim of any offender required
23 to register as provided by the Kansas
offender registration act, K.S.A. 22-
24 4901 et seq. and amendments thereto,
shall not be disclosed; and
25 (D) records of the department
of corrections regarding the financial
26 assets of an offender in the custody of the
secretary of corrections shall
27 be subject to disclosure to the victim, or
such victim's family, of the crime
28 for which the inmate is in custody as set
forth in an order of restitution
29 by the sentencing court.
30 (30) Public records
containing information of a personal nature
31 where the public disclosure thereof would
constitute a clearly unwar-
32 ranted invasion of personal privacy.
33 (31) Public records
pertaining to prospective location of a business
34 or industry where no previous public
disclosure has been made of the
35 business' or industry's interest in
locating in, relocating within or expand-
36 ing within the state. This exception shall
not include those records per-
37 taining to application of agencies for
permits or licenses necessary to do
38 business or to expand business operations
within this state, except as
39 otherwise provided by law.
40 (32) The bidder's list of
contractors who have requested bid proposals
41 for construction projects from any public
agency, until a bid is accepted
42 or all bids rejected.
43 (33) Engineering and
architectural estimates made by or for any pub-
HB 2619
33
1 lic agency relative to public
improvements.
2 (34) Financial
information submitted by contractors in qualification
3 statements to any public agency.
4 (35) Records involved
in the obtaining and processing of intellectual
5 property rights that are expected to
be, wholly or partially vested in or
6 owned by a state educational
institution, as defined in K.S.A. 76-711, and
7 amendments thereto, or an assignee of
the institution organized and ex-
8 isting for the benefit of the
institution.
9 (36) Any report or
record which is made pursuant to K.S.A. 65-4922,
10 65-4923 or 65-4924, and amendments thereto,
and which is privileged
11 pursuant to K.S.A. 65-4915 or 65-4925, and
amendments thereto.
12 (37) Information which would
reveal the precise location of an ar-
13 cheological site.
14 (38) Any financial data or
traffic information from a railroad company,
15 to a public agency, concerning the sale,
lease or rehabilitation of the
16 railroad's property in Kansas.
17 (39) Risk-based capital
reports, risk-based capital plans and corrective
18 orders including the working papers and the
results of any analysis filed
19 with the commissioner of insurance in
accordance with K.S.A. 1997 Supp.
20 40-2c20, and amendments thereto.
21 (40) Memoranda and related
materials required to be used to support
22 the annual actuarial opinions submitted
pursuant to subsection (b) of
23 K.S.A. 40-409, and amendments thereto.
24 (41) Disclosure reports filed
with the commissioner of insurance un-
25 der subsection (a) of K.S.A. 1997 Supp.
40-2,156, and amendments
26 thereto.
27 (42) All financial analysis
ratios and examination synopses concerning
28 insurance companies that are submitted to
the commissioner by the na-
29 tional association of insurance
commissioners' insurance regulatory infor-
30 mation system.
31 (43) Any records the
disclosure of which is restricted or prohibited
32 by a tribal-state gaming compact.
33 (44) Market research, market
plans, business plans and the terms and
34 conditions of managed care or other third
party contracts, developed or
35 entered into by the university of Kansas
medical center in the operation
36 and management of the university hospital
which the chancellor of the
37 university of Kansas or the chancellor's
designee determines would give
38 an unfair advantage to competitors of the
university of Kansas medical
39 center.
40 (45) Records relating to
sales of generation service by a municipal
41 electric utility owned or operated by a
municipality that has elected to
42 participate in competition in retail
sales of generation service as provided
43 by subsection (b)(1) or (2) of section
5.
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1 (b) Except to the
extent disclosure is otherwise required by law or as
2 appropriate during the course of an
administrative proceeding or on ap-
3 peal from agency action, a public
agency or officer shall not disclose fi-
4 nancial information of a taxpayer
which may be required or requested by
5 a county appraiser or the director of
property valuation to assist in the
6 determination of the value of the
taxpayer's property for ad valorem tax-
7 ation purposes; or any financial
information of a personal nature required
8 or requested by a public agency or
officer, including a name, job descrip-
9 tion or title revealing the salary or
other compensation of officers, em-
10 ployees or applicants for employment with a
firm, corporation or agency,
11 except a public agency. Nothing contained
herein shall be construed to
12 prohibit the publication of statistics, so
classified as to prevent identifi-
13 cation of particular reports or returns and
the items thereof.
14 (c) As used in this section,
the term ``cited or identified'' shall not
15 include a request to an employee of a
public agency that a document be
16 prepared.
17 (d) If a public record
contains material which is not subject to dis-
18 closure pursuant to this act, the public
agency shall separate or delete
19 such material and make available to the
requester that material in the
20 public record which is subject to
disclosure pursuant to this act. If a public
21 record is not subject to disclosure because
it pertains to an identifiable
22 individual, the public agency shall delete
the identifying portions of the
23 record and make available to the requester
any remaining portions which
24 are subject to disclosure pursuant to this
act, unless the request is for a
25 record pertaining to a specific individual
or to such a limited group of
26 individuals that the individuals'
identities are reasonably ascertainable, the
27 public agency shall not be required to
disclose those portions of the record
28 which pertain to such individual or
individuals.
29 (e) The provisions of this
section shall not be construed to exempt
30 from public disclosure statistical
information not descriptive of any iden-
31 tifiable person.
32 (f) Notwithstanding the
provisions of subsection (a), any public rec-
33 ord which has been in existence more than
70 years shall be open for
34 inspection by any person unless disclosure
of the record is specifically
35 prohibited or restricted by federal law,
state statute or rule of the Kansas
36 supreme court or by a policy adopted
pursuant to K.S.A. 72-6214, and
37 amendments thereto.
38 Sec. 29. K.S.A. 1997 Supp.
66-128 is hereby amended to read as
39 follows: 66-128. (a) The state corporation
commission shall determine the
40 reasonable value of all or whatever
fraction or percentage of the property
41 of any common carrier or public utility
governed by the provisions of this
42 act which property is used and required to
be used in its services to the
43 public within the state of Kansas, whenever
the commission deems the
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35
1 ascertainment of such value necessary
in order to enable the commission
2 to fix fair and reasonable rates,
joint rates, tolls and charges. In making
3 such valuations the commission may
avail itself of any reports, records or
4 other things available to the
commission in the office of any national, state
5 or municipal officer or board.
6 (b) For the purposes of
this act, property of any public utility which
7 has not been completed and dedicated
to commercial service shall not
8 be deemed to be used and required to
be used in the public utility's
9 service to the public, except that,
any property of a public utility may be
10 deemed to be completed and dedicated to
commercial service if: (1) Con-
11 struction of the property will be commenced
and completed in one year
12 or less; (2) the property is an electric
generation facility that has a capacity
13 of 100 megawatts or less and converts wind,
solar, biomass, landfill gas
14 or any other renewable source of energy; or
(3) construction of the prop-
15 erty has been authorized by a siting permit
issued under former K.S.A.
16 66-1,158 et seq. or 66-1,177 et
seq., and amendments thereto.
17 Sec. 30. K.S.A. 66-128e is
hereby amended to read as follows: 66-
18 128e. In the event the commission finds
that a portion of the costs were
19 attributable either to investment in excess
capacity which were incurred
20 due to lack of prudence in facility
planning or were incurred due to lack
21 of prudence in plant acquisition,
construction or operation, the commis-
22 sion shall exclude that portion of the
carrying or finance charges incurred
23 after the date of its finding, and no part
of the carrying or finance costs
24 excluded shall ever be or become part of
the reasonable value of public
25 utility property so used and required to be
used. For the purposes of this
26 section only, a finding of lack of prudence
in capacity planning for a facility
27 which in whole or in part represents excess
capacity shall not be made by
28 the commission when a siting permit
authorizing the construction of the
29 facility has been
was issued under former K.S.A. 66-1,162 and
amend-
30 ments thereto prior to the passage
of this act before April 19, 1984. The
31 commission also shall not authorize the
recovery as operating expense or
32 in any other manner of the carrying or
finance costs so excluded.
33 Nothing in this act shall
limit the commission's authority to adjust rev-
34 enue requirements of any public utility if
the commission determines the
35 revenue requirement requested results in
whole or in part from ineffi-
36 ciency or a lack of prudence.
37 If the commission determines
that a public utility, which generates and
38 sells electricity as its main activity, has
borrowed funds in order to pay
39 dividends and such borrowing as the result
of lack of prudence, increases
40 the revenue requirement of the utility, the
commission may adjust the
41 revenue requirement accordingly.
42 Sec. 31. K.S.A. 66-128f is
hereby amended to read as follows: 66-
43 128f. Any public utility subject to the
provisions of K.S.A. 66-128b to 66-
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36
1 128g, inclusive, which constructs an
electric generating facility and was
2 not required to obtain an
advance permit under K.S.A. 66-1,159 et
seq.
3 shall make and send monthly financial
reports to the state corporation
4 commission. Such reports shall
include the following information, as of
5 the date of the report, the: (a)
Actual costs incurred; (b) total estimated
6 cost of the facility; (c) percentage
of the facility which is actually com-
7 pleted; (d) estimated date of first
commercial operation; (e) copies of
8 informational filings provided
federal agencies having regulatory authority
9 over such construction; and (f) any
other information required by the
10 commission. Such reports shall be prepared
and certified in the manner
11 and form required by the commission.
Nothing in this section shall limit
12 the commission's authority to require
filing of data in any format by any
13 regulated utility the commission deems
necessary to accomplish its reg-
14 ulatory duties.
15 Sec. 32. K.S.A. 66-128g is
hereby amended to read as follows: 66-
16 128g. (a) The factors which shall be
considered by the commission in
17 making the determination of ``prudence'' or
lack thereof in determining
18 the reasonable value of electric generating
property, as contemplated by
19 this act shall include without limitation
the following:
20 (1) A comparison of the
existing rates of the utility with rates that
21 would result if the entire cost of the
facility were included in the rate
22 base for that facility;
23 (2) a comparison of the rates
of any other utility in the state which
24 has no ownership interest in the facility
under consideration with the rates
25 that would result if the entire cost of the
facility were included in the rate
26 base;
27 (3) a comparison of the final
cost of the facility under consideration
28 to the final cost of other facilities
constructed within a reasonable time
29 before or after construction of the
facility under consideration;
30 (4) a comparison of the
original cost estimates made by the owners
31 of the facility under consideration with
the final cost of such facility;
32 (5) the ability of the owners
of the facility under consideration to sell
33 on the competitive wholesale or other
market electrical power generated
34 by such facility if the rates for such
power were determined by inclusion
35 of the entire cost of the facility in the
rate base;
36 (6) a comparison of any
overruns in the construction cost of the fa-
37 cility under consideration with any cost
overruns of any other electric
38 generating facility constructed within a
reasonable time before or after
39 construction of the facility under
consideration;
40 (7) whether the utility
having an ownership interest in the facility
41 being considered has provided a method to
ensure that the cost of any
42 decommissioning, any waste disposal or any
cost of clean up of any inci-
43 dent in construction or operation of such
facility is to be paid by the utility;
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37
1 (8) inappropriate or
poor management decisions in construction or
2 operation of the facility being
considered;
3 (9) whether inclusion
of all or any part of the cost of construction of
4 the facility under consideration, and
the resulting rates of the utility there-
5 from, would have an adverse economic
impact upon the people of Kansas;
6 (10) whether the
utility acted in the general public interest in man-
7 agement decisions in the acquisition,
construction or operation of the
8 facility;
9 (11) whether the
utility accepted risks in the construction of the fa-
10 cility which were inappropriate to the
general public interest to Kansas;
11 (12) any other fact, factor
or relationship which may indicate pru-
12 dence or lack thereof as that term is
commonly used.
13 (b) The portion of the cost
of a plant or facility which exceeds 200%
14 of the ``original cost estimate'' thereof
shall be presumed to have been
15 incurred due to a lack of prudence. The
commission may include any or
16 all of the portion of cost in excess of
200% of the ``original cost estimate''
17 if the commission finds by a preponderance
of the evidence that such
18 costs were prudently incurred. As used in
this act ``original cost estimate''
19 means:
20 (1) For property of an
electric utility which has been constructed
21 without obtaining an advance permit under
former K.S.A. 66-1,159 et
22 seq., and amendments
thereto, the ``definitive estimate''; and
23 (2) for property of an
electric utility which has been constructed after
24 obtaining an advance permit under
former K.S.A. 66-1,159 et seq.,
and
25 amendments thereto, the
cost estimate made by the utility in the process
26 of obtaining the advance permit.
27 Sec. 33. K.S.A. 75-4319 is
hereby amended to read as follows: 75-
28 4319. (a) Upon formal motion made, seconded
and carried, all bodies and
29 agencies subject to this act may recess,
but not adjourn, open meetings
30 for closed or executive meetings. Any
motion to recess for a closed or
31 executive meeting shall include a statement
of (1) the justification for
32 closing the meeting, (2) the subjects to be
discussed during the closed or
33 executive meeting and (3) the time and
place at which the open meeting
34 shall resume. Such motion, including the
required statement, shall be
35 recorded in the minutes of the meeting and
shall be maintained as a part
36 of the permanent records of the body or
agency. Discussion during the
37 closed or executive meeting shall be
limited to those subjects stated in
38 the motion.
39 (b) No subjects shall be
discussed at any closed or executive meeting,
40 except the following:
41 (1) Personnel matters of
nonelected personnel;
42 (2) consultation with an
attorney for the body or agency which would
43 be deemed privileged in the attorney-client
relationship;
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38
1 (3) matters relating to
employer-employee negotiations whether or
2 not in consultation with the
representative or representatives of the body
3 or agency;
4 (4) confidential data
relating to financial affairs or trade secrets of
5 corporations, partnerships, trusts,
and individual proprietorships;
6 (5) matters relating to
actions adversely or favorably affecting a per-
7 son as a student, patient or resident
of a public institution, except that
8 any such person shall have the right
to a public hearing if requested by
9 the person;
10 (6) preliminary discussions
relating to the acquisition of real property;
11 (7) matters permitted to be
discussed in a closed or executive meeting
12 pursuant to K.S.A. 74-8804 and amendments
thereto;
13 (8) matters permitted to be
discussed in a closed or executive meeting
14 pursuant to subsection (a)(2)(J) of K.S.A.
38-1507 and amendments
15 thereto or subsection (f) of K.S.A. 38-1508
and amendments thereto;
16 (9) matters permitted to be
discussed in a closed or executive meeting
17 pursuant to subsection (j) of K.S.A.
22a-243 and amendments thereto;
18 (10) matters permitted to be
discussed in a closed or executive meet-
19 ing pursuant to subsection (e) of K.S.A.
44-596 and amendments thereto;
20 (11) matters permitted to be
discussed in a closed or executive meet-
21 ing pursuant to subsection (g) of K.S.A.
1997 Supp. 39-7,119 and amend-
22 ments thereto; and
23 (12) matters required to be
discussed in a closed or executive meeting
24 pursuant to a tribal-state gaming
compact; and
25 (13) matters relating to
sales of generation service by a municipal
26 electric utility owned or operated by a
municipality that has elected to
27 participate in competition in retail
sales of generation service as provided
28 by subsection (b)(1) or (2) of section
5.
29 (c) No binding action shall
be taken during closed or executive re-
30 cesses except with regard to matters
described in subsection (b)(13), and
31 such recesses shall not be used as a
subterfuge to defeat the purposes of
32 this act.
33 Sec. 34. K.S.A. 79-1439 is
hereby amended to read as follows: 79-
34 1439. (a) All real and tangible personal
property which is subject to gen-
35 eral ad valorem taxation shall be appraised
uniformly and equally as to
36 class and, unless otherwise specified
herein, shall be appraised at its fair
37 market value, as defined in K.S.A. 79-503a,
and amendments thereto.
38 (b) Property shall be
classified into the following classes and assessed
39 at the percentage of value prescribed
therefor:
40 (1) Real property shall be
assessed as to subclass at the following
41 percentages of value:
42 (A) Real property used for
residential purposes including multi-fam-
43 ily residential real property, real
property necessary to accommodate a
HB 2619
39
1 residential community of mobile or
manufactured homes including the
2 real property upon which such homes
are located and residential real
3 property used partially for day care
home purposes if such home has been
4 registered or licensed pursuant to
K.S.A. 65-501 et seq., and amendments
5 thereto at 11.5%;
6 (B) land devoted to
agricultural use valued pursuant to K.S.A. 79-
7 1476, and amendments thereto, at
30%;
8 (C) vacant lots at
12%;
9 (D) real property which
is owned and operated by a not-for-profit
10 organization not subject to federal income
taxation pursuant to section
11 501 of the federal internal revenue code
and included herein pursuant to
12 K.S.A. 79-1439a, and amendments thereto, at
12%;
13 (E) public utility real
property, except railroad property which shall
14 be assessed at the average rate all other
commercial and industrial prop-
15 erty is assessed, at 33%. As used
in this paragraph, ``public utility'' shall
16 have the meaning ascribed thereto
by K.S.A. 79-5a01, and amendments
17 thereto;
18 (F) real property used for
commercial and industrial purposes, com-
19 petitive electricity provider real
property and buildings and other im-
20 provements located upon land devoted to
agricultural use at 25%; and
21 (G) all other urban and rural
real property not otherwise specifically
22 subclassed at 30%.
23 (2) Personal property shall
be classified into the following classes and
24 assessed at the percentage of value
prescribed therefor:
25 (A) Mobile homes used for
residential purposes at 11.5%;
26 (B) mineral leasehold
interests, except oil leasehold interests the av-
27 erage daily production from which is five
barrels or less, and natural gas
28 leasehold interests, the average daily
production from which is 100 mcf
29 or less, which shall be assessed at 25%, at
30%;
30 (C) public utility tangible
personal property including inventories
31 thereof, except railroad personal property
including inventories thereof,
32 which shall be assessed at the average rate
all other commercial and in-
33 dustrial property is assessed, at
33%. As used in this paragraph, ``public
34 utility'' shall have the meaning
ascribed thereto by K.S.A. 79-5a01, and
35 amendments thereto;
36 (D) all categories of motor
vehicles listed and taxed pursuant to
37 K.S.A. 79-306d, and amendments thereto, and
over-the-road motor ve-
38 hicles defined pursuant to K.S.A. 79-6a01,
and amendments thereto, at
39 30%;
40 (E) commercial and industrial
machinery and equipment, including
41 rolling equipment defined pursuant to
K.S.A. 79-6a01, and amendments
42 thereto, and competitive electricity
provider machinery and equipment,
43 which, if its economic life is seven years
or more, shall be valued at its
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40
1 retail cost when new less seven-year
straight-line depreciation, or which,
2 if its economic life is less than
seven years, shall be valued at its retail cost
3 when new less straight-line
depreciation over its economic life, except
4 that, the value so obtained for such
property as long as it is being used
5 shall not be less than 20% of the
retail cost when new of such property
6 at 25%; and
7 (F) all other tangible
personal property not otherwise specifically
8 classified at 30%.
9 (c) As used in this
section, ``public utility'' means any public utility,
10 as defined in K.S.A. 79-5a01 and
amendments thereto, except a compet-
11 itive electricity provider as defined in
section 2.
12 (d) The provisions of the
amendments to this section by this act shall
13 be applicable to all taxable years
commencing on or after July 1, 2001.
14 Sec. 35. K.S.A. 66-128e,
66-128f, 66-128g, 66-1,159 through 66-
15 1,165, 66-1,168, 66-1,169a, 66-1,169c,
75-4319 and 79-1439 and K.S.A.
16 1997 Supp. 45-221, 66-128, 66-1,158 and
66-1,169b are hereby repealed.
17 Sec. 36. This act shall take
effect and be in force from and after its
18 publication in the statute book.
19