SB517,1,11 1An Act to amend 196.374 (1); and to create 15.07 (1) (a) 7., 15.07 (1) (d), 15.792,
220.155 (1m), 25.17 (1) (kx), 25.96, 196.374 (4), 196.378 and 196.96 of the
3statutes; relating to: establishing programs for low-income energy
4assistance, improving energy conservation and efficiency markets and
5encouraging the development and use of renewable resources, creating a public
6benefits and energy assistance board, establishing a public benefits and energy
7assistance fund, requiring electric utilities and retail cooperatives to charge
8access fees to customers and members, imposing requirements on the use of
9renewable resources by electric and gas utilities and cooperatives, requiring the
10exercise of rule-making authority, making appropriations and providing a
11penalty.

This bill creates a public benefits and energy assistance board (board), which
is required to establish and administer programs for providing energy assistance to
low-income households and conservation and efficiency services to eligible
recipients and for encouraging the development and use of renewable energy

resources. The bill also imposes certain requirements on the generation of electricity
from renewable energy resources by public utilities and retail cooperative
associations.

The board, which is attached to the public service commission (PSC), is required
to establish programs for each of the following: 1) assisting low-income households
with weatherization and energy conservation services and payment of energy bills
(low-income assistance programs); 2) providing energy conservation and efficiency
services to eligible recipients (conservation programs); and 3) encouraging the
development and use of renewable energy resources (renewables programs). The
board must hold a hearing before establishing the programs. Interested persons,
including members of the public, may intervene in a hearing and, under certain
circumstances, receive compensation from the PSC for the reasonable costs of
intervention.

The bill requires the division of housing in DOA to contract with certain
nonprofit or governmental entities for the administration of the low-income
assistance programs. The board may contract with the same types of entities for the
administration of the conservation and renewables programs. Under the
low-income assistance programs, in each fiscal year, no less than the difference
between $50,000,000 and the amount of funding received by the state under certain
federal low-income assistance and weatherization programs (federal programs)
must be used for purposes other than paying energy bills. The bill also specifies the
minimum amounts that must be used for certain purposes under the conservation
and renewables programs.

The programs established by the board are funded by an access fee that the
board collects from nonmunicipal electric public utilities, which must charge the
access fees to their customers. Municipal electric public utilities and retail electric
cooperatives (municipal utilities and cooperatives) are also required to charge an
access fee to their customers or members. Every 3 years, a municipal utility or
cooperative may elect to contribute all or a specified portion of the access fees to the
board for the programs established by the board. A municipal utility or cooperative
that does not elect to contribute all of the access fees to the board must spend
specified portions of the access fees on its own "commitment to community
programs", which are defined as low-income assistance programs, energy
conservation programs and programs for promoting the welfare of communities that
include the municipal utility's or cooperative's customers or members.

The bill directs the board to determine the amount of an access fee that must
be charged by nonmunicipal public utilities, municipal utilities and cooperatives.
Each municipal utility and cooperative must charge an access fee that is sufficient
for the utility or cooperative to collect an annual average of $13.16 per meter for each
customer or member. However, for the period ending on June 30, 2008, the amount
of the access fee paid by an individual customer or member may not exceed 3% of the
total of every other charge that is billed to the customer or member during that
period.

For nonmunicipal utilities, the board must determine the amount of the access
fee as follows. In fiscal year 1998-99, a portion of the access fee must be in an amount
that is sufficient for the board to collect from the nonmunicipal electric utilities the
amount that results from subtracting the sum of the following from $105,000,000:
1) the amount received by the state under the federal programs; and 2) 50% of the
access fees charged by municipal utilities and cooperatives. For fiscal years after
1998-99, the amount is determined by subtracting the same amounts from an
amount of low-income need that is determined by the board. The remaining portion
of the access fee must be sufficient for the board to collect from nonmunicipal utilities
the amount that results from subtracting the sum of the following from
$112,000,000: 1) the amount of funding received under the federal programs; and 2)
20% of the access fees charged by municipal utilities and cooperatives. After fiscal
year 2000-01, the board may reduce the amount that must be collected from the
remaining portion of the access fee if the board discontinues or reduces any of the
conservation or renewables programs. The total access fee paid by a customer of a
nonmunicipal utility is subject to the same 3% limit that applies to an access fee paid
by a customer or member of a municipal utility or cooperative.

The bill also requires certain electric utilities to spend a portion of the access
fees on energy conservation programs, rather than paying the entire amount to the
board. Under current law, certain electric utilities are required to spend at least 0.5%
of their annual operating revenues on energy conservation programs. The bill
requires instead that, through fiscal year 2001-02, such electric utilities must spend
a specified portion of the access fees on energy conservation programs. After fiscal
year 2001-02, the electric utilities are not required to spend a portion of the access
fees on energy conservation programs, but must pay the entire amount to the board.

The bill imposes other requirements on the board's programs and the
commitment to community programs, including the following:

1. The bill requires public utilities to allow electric customers to make
contributions to the board's programs or the commitment to community programs.

2. For purposes of determining whether a municipal utility or cooperative has
spent a required amount on a commitment to community program, the bill allows a
municipal utility or cooperative to receive credit for any spending by its wholesale
electric supplier on the supplier's own commitment to community programs.