Amendment No. 667
Senate Amendment to Senate Bill No. 438 (BDR 58-861)
Proposed by: Committee on Commerce and Labor
Amendment Box: Replaces Amendment No. 586.
Amends: Summary: Title: Preamble: Joint Sponsorship:
ASSEMBLY ACTION
Initial and Date | SENATE ACTION Initial and DateAdopted Lost | Adopted Lost
Concurred In Not | Concurred In Not
Receded Not | Receded Not
Amend the bill as a whole by deleting sections 1 through 3 and adding new sections designated sections 1 through 29, following the enacting clause, to read as follows:
"Section 1. Chapter 703 of NRS is hereby amended by adding thereto the provisions set forth as sections 2 and 3 of this act.
Sec. 2.
1. The governor may appoint administrative law judges to preside over contested matters involving the regulation of utilities subject to the jurisdiction of the commission. An administrative law judge appointed by the governor in accordance with this section shall not act as an administrative law judge for any other governmental entity and shall hear cases as assigned by the commission. Such an administrative law judge serves at the pleasure of the governor.2. An administrative law judge may administer oaths, examine witnesses, issue subpoenas and receive evidence, pursuant to rules adopted by the commission.
Sec. 3.
After hearing a contested matter, an administrative law judge shall prepare and file with the commission an opinion setting forth his recommendations, findings and conclusions. The opinion of the administrative law judge is the proposed decision for the matter and must be made a part of the public record in the proceedings. The proposed decision must be filed with the commission and served on all parties to the action or proceedings not later than 45 days after the conclusion of the hearing. Not later than 30 days after the date on which the proposed decision is filed with the commission, the commission shall approve, modify or reject the proposed decision. The ruling of the commission must be based on the record and the contents of the proposed decision, except that the commission may allow the parties to submit briefs and may hold oral argument on the matter.Sec. 4. NRS 703.320 is hereby amended to read as follows:
703.320 1. When, in any matter pending before the commission, a hearing is required by law, or is normally required by the commission, the commission shall give notice of the pendency of the matter to all persons entitled to notice of the hearing. The commission shall by regulation specify:
(a) The manner of giving notice; and
(b) Where not specified by law, the persons entitled to notice in each type of proceeding.
2. Unless, within 10 days after the date of the notice of pendency, a person entitled to notice of the hearing files with the commission a request that the hearing be held, the commission may dispense with a hearing and act upon the matter pending.
3. If a request for a hearing is filed, the commission shall give at least 10 days’ notice of the hearing
Sec. 5.
NRS 703.330 is hereby amended to read as follows: 703.330 1. A complete record must be kept of all hearings , [before the commission,] and all testimony must be taken down by [the] a stenographer appointed by the commission, or, under the direction of any competent person appointed by the commission, reported by sound recording equipment in the manner authorized for reporting testimony in district courts. The testimony reported by [a] the stenographer must be transcribed, and the transcript filed with the record in the matter. The commission may by regulation provide for the transcription or safekeeping of sound recordings. [Cost] The costs of recording and transcribing testimony at any hearing, except those hearings ordered pursuant to NRS 703.310 , must be paid by the applicant. If a complaint is made pursuant to NRS 703.310 by a customer or by a political subdivision of the state or municipal organization, the complainant is not liable for any costs. Otherwise, if there are several applicants or parties to any hearing, the commission may apportion the costs among them in its discretion.
2. Whenever any complaint is served upon the commission as provided in NRS 703.373 for the bringing of an action against the commission, before the action is reached for trial, the commission shall file a certified copy of all proceedings and testimony taken with the clerk of the court in which the action is pending.
3. A copy of the proceedings and testimony must be furnished to any party, on payment of a reasonable amount, to be fixed by the commission, and the amount must be the same for all parties.
4. The provisions of this section do not prohibit the commission or an administrative law judge, as appropriate, from restricting access to the records and transcripts of a hearing pursuant to paragraph (a) of subsection 3 of NRS 703.196.
Sec. 6. NRS 703.340 is hereby amended to read as follows:
703.340 1. Either party is entitled to an order by the commission or an administrative law judge, as appropriate, for the appearance of witnesses or the production of books, papers and documents containing material testimony.
2. Witnesses appearing upon the order of the commission or an administrative law judge, as appropriate, are entitled to the same fees and mileage as witnesses in civil actions in the courts of the state, and the fees and mileage must be paid out of the state treasury in the same manner as other claims against the state are paid. No fees or mileage may be allowed unless the chairman of the commission certifies the correctness of the claim.
Sec. 7. NRS 703.350 is hereby amended to read as follows:
703.350 The commission or an administrative law judge, as appropriate, may require, by order to be served on any person regulated by the commission in the same manner as a subpoena in a civil action, the production at a time and place designated by the commission or administrative law judge of any books, accounts, papers or records kept by the person in any office or place outside this state, or verified copies in lieu thereof [,] if the commission or administrative law judge so directs, so that an examination may be made by or under the direction of the commission or administrative law judge, or [under its direction, or] for use as testimony.
Sec. 8. NRS 703.360 is hereby amended to read as follows:
703.360 1. If any person ordered to appear before the commission or an administrative law judge as a witness fails to obey the order, the commission or any commissioner , [or] the secretary of the commission or the administrative law judge, as appropriate, may apply to the clerk of the nearest district court for a subpoena commanding the attendance of the witness before the commission [.] or administrative law judge.
2. The clerk shall issue the subpoena, and a peace officer shall serve it.
3. Disobedience to a subpoena
Sec. 9. NRS 703.370 is hereby amended to read as follows:
703.370 1. The district court for the county in which any investigation or hearing is being conducted by the commission
or an administrative law judge pursuant to the provisions of this Title may compel the attendance of witnesses, the giving of testimony , and the production of books and papers as required by any subpoena issued by the commission2. If any witness refuses to attend or testify or produce any
books or papers required by a subpoena , the commission or administrative law judge may report to the district court for the county in which the investigation or hearing is pending by petition, setting forth:(a) That due notice has been given of the time and place of attendance of the witness or the production of the books and papers;
(b) That the witness has been subpoenaed in the manner prescribed in this chapter; and
(c) That the witness has failed and refused to attend or produce the
books or papers required by subpoena before the commission or administrative law judge in the investigation or hearing named in the subpoena, or has refused to answer questions propounded to him in the course of the investigation or hearing,and asking an order of the court compelling the witness to attend and testify or produce the books or papers before the commission
3. The court, upon petition of the commission, shall enter an order directing the witness to appear before the court at a time and place to be fixed by the court in its order, not more than 10 days
Sec. 10. NRS 703.377 is hereby amended to read as follows:
703.377 1. No certificate of public convenience and necessity, permit or license issued in accordance with the terms of NRS 704.005 to 704.751, inclusive, is either a franchise or irrevocable.
2. Upon receipt of a written complaint or on its own motion, the commission may, after investigation
, and a hearing3. The proceedings thereafter are governed by the provisions of NRS 703.373 to 703.376, inclusive
Sec. 11.
Chapter 704 of NRS is hereby amended by adding thereto the provisions set forth as sections 12, 13 and 14 of this act.Sec. 12. A vertically integrated electric utility and its successor electric distribution utility shall act in accordance with existing contract terms relating to obligations for the purchase of power. A vertically integrated electric utility and its successor electric distribution utility seeking to recover costs associated with an obligation for the purchase of power which are documented in the accounting records of the utility and which are allocable to a particular potentially competitive service must:
1. Demonstrate that the utility has made reasonable efforts to reduce the cost or increase the value of the obligation, including, without limitation, by:
(a) Evaluating the costs and benefits of renegotiating the obligation;
(b) Initiating a good faith attempt to renegotiate the obligation with the provider of the purchased power;
(c) Responding in good faith to any attempt initiated by the provider of the purchased power to renegotiate the obligation; and
(d) Exercising all existing contract terms relating to the obligation to mitigate the cost of the obligation;
2. If the utility was legally required to incur the obligation by a state or federal agency or authority, provide all information, including actions and statements by the commission, if any, demonstrating that fact;
3. If the utility had discretion whether to incur or mitigate the cost, provide all information demonstrating the conduct of the utility with respect to the costs of the obligation, as compared to other utilities with similar obligations; and
4. Provide all information indicating the extent to which the rates previously established by the commission have compensated shareholders for the risk of not recovering the costs of the obligations.
Sec. 13.
1. Notwithstanding the provisions of subsection 5 of NRS 704.982 to the contrary, the commission shall, for each class of customers of electric service in this state, establish a total rate for electric services that are necessary to provide basic electric service to customers in this state. The rates may not vary from the rates for each class of customers of electric service in this state which are in effect on the effective date of this section, except that the commission may modify the rates to account for the effects of any cases filed with thecommission before October 1, 1999, which involve the use of deferred accounting. The rates established by the commission pursuant to this subsection remain in effect until March 1, 2003.
2. Notwithstanding the provisions of subsection 4 of NRS 704.982 to the contrary, during the period that the rates are in effect pursuant to subsection 1, services subject to the rates, including generation services owned by a vertically integrated electric utility which may be subject to divestiture, must be provided by a vertically integrated electric utility or its successor electric distribution utility, which is a provider of last resort.
3. If a utility repurchases generation services to meet its obligation pursuant to this section from a generation unit that the utility has divested, the commission, in determining recoverable costs pursuant to NRS 704.983, shall not impute a value to the generation unit other than the sales price of the unit.
4. To the extent that the rate established pursuant to subsection 1 for any class of customers does not reflect the costs incurred by a utility to provide the services to that class of customers, the utility may accumulate any shortfall through March 1, 2003. Such a shortfall may be recovered only from the gain, if any, from the sale by the utility of its generation assets.
5. During the period that the rates are in effect pursuant to subsection 1, the commission shall not subject an electric distribution utility or its successor electric distribution utility to any review of earnings, the rate base of the utility, or the rate of return of the utility.
Sec. 14.
1. At any time after July 1, 2001, a licensed alternative seller may submit to the commission a bid to provide a potentially competitive service that is being provided by an electric distribution utility in accordance with section 13 of this act. The bid must:(a) Request to serve at least 10 percent of the market for a specific geographical region of this state;
(b) Provide that the service will be provided by the alternative seller to more than one class of customers; and
(c) Provide that there will be a discount of 5 percent off the rate established by the commission pursuant to section 13 of this act.
2. Upon the receipt of such a bid, the commission may conduct an auction if the commission determines that it is in the public interest to conduct such an auction. If the commission determines that such an auction is in the public interest, the commission shall conduct the auction as soon as practicable. The commission shall determine the terms and conditions for continued service by the successful bidder at the auction. Any licensed alternative seller or affiliate of an electric distribution utility may submit a bid. Bidding must be done by sealed bid. Each bid by an alternative seller must be not less than 10 percent of the load, as measured in megawatts or megawatt hours, for the geographical region for which the bid is being made.
3. The commission shall review the bids. If the successful bidder is an alternative seller or an affiliate of an electric distribution utility other than the electric distribution utility that provided the service before the auction, the successful bidder becomes the provider of the service for the percentage of the load as indicated in its bid. For the percentage of the market that is not awarded to a successful bidder, the affiliate of the electric distribution utility which provided service to the customers before the auction remains the provider of the service, and that service must continue to be provided under the same terms and conditions as existed for the provision of that service by the affiliate of the electric distribution utility immediately before the auction.
Sec. 15. NRS 704.110 is hereby amended to read as follows:
1. Whenever there is filed with the commission any schedule stating a new or revised individual or joint rate or charge, or any new or revised individual or joint regulation or practice affecting any rate or charge, or any schedule resulting in a discontinuance, modification or restriction of service, the commission may, upon complaint or upon its own motion without complaint, at once, without answer or formal pleading by the interested utility, investigate or, upon reasonable notice, conduct a hearing concerning the propriety of the rate, charge, classification, regulation, discontinuance, modification, restriction or practice.
2. Pending the investigation or hearing and the decision thereon, the commission, upon delivering to the utility affected thereby a statement in writing of its reasons for the suspension, may suspend the operation of the schedule and defer the use of the rate, charge, classification, regulation, discontinuance, modification, restriction or practice, but not for more than 150 days beyond the time when the rate, charge, classification, regulation, discontinuance, modification, restriction or practice would otherwise go into effect.
3. Whenever there is filed with the commission any schedule stating an increased individual or joint rate or charge for service or equipment, the public utility shall submit with its application a statement showing the recorded results of revenues, expenses, investments and costs of capital for its most recent 12 months for which data were available when the application was prepared. During any hearing concerning the increased rates or charges determined by the commission to be necessary, the commission shall consider evidence in support of the increased rates or charges based upon actual recorded results of operations for the same 12 months, adjusted for increased revenues, any increased investment in facilities, increased expenses for depreciation,
certain other operating expenses as approved by the commission and changes in the costs of securities which are known and are measurable with reasonable accuracy at the time of filing and which will become effective within 6 months after the last month of those 12 months, but no new rates or charges may be placed into effect until the changes have been experienced and certified by the utility to the commission. The commission shall also consider evidence supporting expenses for depreciation, calculated on an annual basis, applicable to major components of the public utility’s plant placed into service during the recorded test period or the period for certification as set forth in the application. Adjustments to revenues, operating expenses and costs of securities must be calculated on an annual basis. Within 90 days after the filing with the commission of the certification required in this subsection, or before the expiration of any period of suspension ordered pursuant to subsection 2, whichever time is longer, the commission shall make such order in reference to those rates or charges as is required by this chapter.4. After full investigation or hearing, whether completed before or after the date upon which the rate, charge, classification, regulation, discontinuance, modification, restriction or practice is to go into effect, the commission may make such order in reference to the rate, charge, classification, regulation, discontinuance, modification, restriction or practice as would be proper in a proceeding initiated after the rate, charge, classification, regulation, discontinuance, modification, restriction or practice has become effective.
5.
6.] Except as otherwise provided in subsection [7,] 6, whenever a general rate application for an increased rate or charge for, or classification, regulation, discontinuance, modification, restriction or practice involving service or equipment has been filed with the commission, a public utility shall not submit another general rate application until all pending general rate applications for increases in rates submitted by that public utility have been decided unless, after application and hearing, the commission determines that a substantial financial emergency would exist if the other application is not permitted to be submitted sooner.
[7.] 6. A public utility may not file an application to recover the increased cost of purchased fuel, purchased power, or natural gas purchased for resale more often than once every 30 days.
[8.] 7. A utility facility identified in a 3-year plan submitted pursuant to NRS 704.741 and accepted by the commission for acquisition or construction pursuant to NRS 704.751 and the regulations adopted pursuant thereto shall be deemed to be a prudent investment. The utility may recover all just and reasonable costs of planning and constructing such a facility.
Sec. 15.5. NRS 704.185 is hereby amended to read as follows:
704.185 1. A public utility which purchases [fuel, including] natural gas for resale [, or power] may record upon its books and records all cost increases or decreases in [fuels or purchased power] the natural gas purchased for resale in deferred accounts. Any public utility which utilizes deferred accounting to reflect changes in costs of [fuels and purchased power] natural gas purchased for resale shall include in its annual report to the commission a statement showing the allocated rate of return for each of its operating departments in Nevada which uses deferred accounting.
2. If the rate of return for any department using deferred accounting is greater than the rate of return allowed by the commission in the last rate proceeding, the commission shall order the utility which recovered any [deferred fuel and purchased power] costs of natural gas purchased for resale through rates during the reported period to transfer to the next energy adjustment period that portion of such recovered amounts which exceeds the authorized rate of return.
Sec. 16. NRS 704.285 is hereby amended to read as follows:
2. If, after its investigation, the commission determines that there is probable cause to believe that the utility is acting in violation of the provisions of NRS 179.410 to 179.515, inclusive, or [NRS] 200.610 to 200.690, inclusive, or allowing another to act in violation of those provisions, the commission shall forthwith issue a cease and desist order to the utility. The order is permanent unless the utility, within 20 days after receipt of the order, files a written request for a hearing with the commission.
3. When a written request for a hearing is filed pursuant to subsection 2, the [commission shall conduct the] hearing must be conducted pursuant to the provisions of NRS 703.320 to 703.370, inclusive [.] , and sections 2 and 3 of this act.
4. If, as the result of a hearing, it is determined that the utility is acting in violation of the provisions of NRS 179.410 to 179.515, inclusive, or
5. This section is applicable whether or not the utility involved is required to have a certificate of public convenience and necessity from the commission.
Sec. 17. NRS 704.965 is hereby amended to read as follows:
704.965 As used in NRS 704.965 to 704.990, inclusive,
and sections 12, 13 and 14 of this act, unless the context otherwise requires, the words and terms defined in NRS 704.966 to 704.975, inclusive, have the meanings ascribed to them in those sections.Sec. 18. NRS 704.970 is hereby amended to read as follows:
Sec. 19.
NRS 704.975 is hereby amended to read as follows:(a) Held a certificate of public convenience and necessity issued pursuant to NRS 704.005 to 704.731, inclusive; and
(b) Had an annual operating revenue of $250,000,000 or more [.] in Nevada.
2. The term does not include a cooperative association or nonprofit corporation or association or other provider of electric service, which is declared to be a public utility pursuant to NRS 704.673 and provides service only to its members.
Sec. 20. NRS 704.976 is hereby amended to read as follows:
704.976 1. The date upon which customers may begin obtaining generation, aggregation
, metering, billing and any other potentially competitive services from an alternative seller must be no later than(a) Explains the reason that the commission has not granted such an authorization; and
(b) States whether the commission will grant such an authorization by December 31, 1999.]
2. The commission may:
(a) Establish different dates for the provision of different services by alternative sellers in different geographic areas; and
(b) Authorize, in gradual phases, the right
of customers to buy from alternative sellers.3. The commission shall determine that an electric service is a potentially competitive service if provision of the service by alternative sellers:
(a) Will not harm any class of customers;
(b) Will decrease the cost of providing the service to customers in this state or increase the quality or innovation of the service to customers in this state;
(c) Is a service for which effective competition in the market is likely to develop;
(d) Will advance the competitive position of this state relative to surrounding states; and
(e) Will not otherwise jeopardize the safety and reliability of the electric service in this state.
4. If the commission determines that a market for a potentially competitive service does not have effective competition, the commission shall, by regulation, establish the method for determining prices for the service and the terms and conditions for providing the service. The regulations must ensure that the pricing method, terms and conditions are just and reasonable and not unduly discriminatory. The regulations may include pricing alternatives which authorize the seller to reduce prices below maximum pricing levels specified by the commission or any other form of alternative pricing which the commission determines to be consistent with the provisions of this subsection. In determining whether a market for an electric service has effective competition, the commission shall:
(a) Identify the relevant market;
(b) Identify, where feasible, the alternative sellers that participate and are reasonably expected to participate in the relevant market; and
(c) Calculate, where feasible, the market share of each participant in the market and evaluate the significance of each share.
5. On
(a) Evaluates the effectiveness of competition in the market for each service which customers have the right to purchase from alternative sellers; and
(b) Recommends actions which the legislature should take to increase the effectiveness of competition in the markets for all potentially competitive services.
6. On] or before October 1, 2001, an electric service that has been found on or before that date to be potentially competitive shall be deemed to be competitive.
[7.] 6. The commission may reconsider any determination made pursuant to this section upon its own motion or upon a showing of good cause by a party requesting a reconsideration. Upon a finding by the commission that the market for a service previously found not to have effective competition has become effectively competitive, the commission shall repeal the regulations which established the pricing methods and the terms and conditions for providing that service. The commission shall conduct any proceedings for the reconsideration of any such determination as expeditiously as practicable considering the current work load of the commission and the need to protect the public interest.
[8.] 7. A vertically integrated electric utility shall not provide a potentially competitive service except through an affiliate:
(a) On or after [December 31, 1999;] March 1, 2000; or
(b) The date on which the commission determines that the service is potentially competitive,
whichever is later.
Sec. 21. NRS 704.977 is hereby amended to read as follows:
704.977 1. It is unlawful for an alternative seller to sell any electric service to a customer for consumption within this state without having first obtained a license from the commission to do so. A licensed alternative seller or a vertically integrated utility may negotiate with a customer for the provision of electric service before March 1, 2000, but no such contract is effective before March 1, 2000.
2.
(a) Safety and reliability of service;
(b) Financial and operational fitness; and
(c) Billing practices and customer service, including the initiation and termination of service.
3. If, after reviewing the application of an alternative seller for a license, the commission finds that the applicant is qualified to be an alternative seller, the commission shall issue a license to the applicant.
4. The commission may deny the application of an applicant for a license to operate as an alternative seller and may limit, suspend or revoke a license issued to an alternative seller if the action is necessary to protect the interests of the public or to enforce the provisions of NRS 704.965 to 704.990, inclusive,
and sections 12, 13 and 14 of this act, or a regulation of the commission.5. In determining whether an applicant is qualified for a license, whether to deny an application for a license to operate as an alternative seller or whether to limit, suspend or revoke a license issued to an alternative seller, the commission may consider whether the applicant for or holder of the license, or any affiliate thereof, has engaged in any activities which are inconsistent with effective competition.
6. A city, county or other local governmental entity or a public utility, or any affiliate thereof, which is authorized to provide electric service within the State of Nevada and which has an annual operating revenue of less than $250,000,000,
(a) Applies to obtain a license as an alternative seller; or
(b) Directly or indirectly attempts to provide, or act on behalf of an alternative seller in the provision of, electric service in the territory served by another city, county or other local governmental entity or public utility, or an affiliate thereof, unless the city, county or other local governmental entity or public utility, or an affiliate thereof, is otherwise required or permitted by specific statute to provide such service.
7. Notwithstanding the provisions of subsection 6, a city, county or other local governmental entity or a public utility, or any affiliate thereof, does not become subject to the provisions of NRS 704.965 to 704.990, inclusive,
and sections 12, 13 and 14 of this act, or any regulations adopted pursuant thereto, solely because the city, county or other local governmental entity or a public utility, or any affiliate thereof, provides transmission or distribution services to an alternative seller pursuant to a contract, tariff or requirement of any state or federal law, except that the city, county or other local governmental entity or public utility, or an affiliate thereof, shall provide such transmission and distribution services on an open and nondiscriminatory basis to alternative sellers in accordance with such standards as the commission may establish by regulation for the provision of transmission and distribution services in accordance with this subsection.8. Regulations adopted pursuant to subsection 2:
(a) Must not be unduly burdensome;
(b) Must not unnecessarily delay or inhibit the initiation and development of competition for any service in any market; and
(c) May establish different requirements for licensing alternative sellers of:
(1) Different services; or
(2) Similar services to different classes of customers,
whenever such different requirements are appropriate to carry out the provisions of NRS 704.965 to 704.990, inclusive
Sec. 22.
NRS 704.978 is hereby amended to read as follows:704.978 1. The commission shall prohibit a provider of a noncompetitive service from providing a potentially competitive service, except through an affiliate of the provider.
2. The commission shall require each provider of a noncompetitive service that is necessary to the provision of a potentially competitive service to make its facilities or services available to all alternative sellers on equal and nondiscriminatory terms and conditions.
3. In providing a potentially competitive service, an affiliate of a provider of a noncompetitive service may use the name or logo, or both, of the provider of noncompetitive service.
Sec. 23.
NRS 704.982 is hereby amended to read as follows:2. Upon a finding by the commission that the public interest will be promoted, the commission may prescribe alternate methods for providing electric service to those customers described in subsection 1. The alternate methods may include, but are not limited to, the direct assignment of customers to alternative sellers or electric distribution utilities or a process of competitive bidding for the right to provide electric service to the designated customers. Any alternative methods prescribed by the commission pursuant to this subsection may not go into effect before July 1, 2001.
3. The commission shall establish minimum terms and conditions under which electric service must be provided pursuant to this section, including a minimum period during which a customer must be obligated to pay for the electric service from the assigned provider. The price charged for electric service for a particular group of customers must reflect the incremental cost of serving the group.
4. If the designated provider of the electric service is a vertically integrated electric utility, the utility shall provide the electric service through an affiliate whose sole business activity is the provision of electric service.
5. Except as otherwise provided in this subsection and subsection 6, the rate charged for residential service provided pursuant to subsection 1 must not exceed the rate charged for that service on July 1, 1997. The limitation set forth in this subsection is effective until 2 years after the date upon which, in accordance with NRS 704.976, the commission repeals the regulations which established the pricing method for that service and the terms and conditions for providing that service.
6. The commission may, in accordance with NRS 704.110, 704.120 and 704.130, approve an increase in the rate charged for residential service provided pursuant to subsection 1 in an amount that does not exceed the increase necessitated, if any, to ensure the recovery by the vertically integrated electric utility
, or its successor electric distribution utility, of its just and reasonable costs. The provisions of this section do not limit or prohibit in any manner the operation of any order issued by the commission before July 1, 1997.Sec. 24. NRS 704.983 is hereby amended to read as follows:
and its successor electric distribution utility and that are properly allocable to a particular potentially competitive service as of the date on which alternative sellers of similar potentially competitive services begin providing such service to customers in this state. Shareholders of the vertically integrated electric utility must be compensated fully for all such costs determined by the commission. In determining the recoverable costs, the commission shall take into account:(a) The extent to which the utility was legally required to incur the costs of the assets and obligations;
(b) The extent to which the market value of the assets and obligations of the utility, relating to the provision of potentially competitive services, exceeds the costs of the assets and obligations;
(c) The effectiveness of the efforts of the utility to increase the market value and realize the market value of any assets, and to decrease the costs of any obligations, associated with the provision of potentially competitive services;
(d) The extent to which the rates previously established by the commission have compensated shareholders for the risk of not recovering the costs of the assets and obligations;
(e) The effects of the difference between the market value and the cost, including, without limitation, tax considerations, for the assets and obligations; and
(f) If the utility had the discretion to determine whether to incur or mitigate the costs, the conduct of the utility with respect to the costs of the assets and obligations when compared to other utilities with similar obligations to serve the public.
2. For the purposes of this section, the commission may impose a procedure for the direct and unavoidable recovery from ratepayers of the portion of the past costs which are determined by the commission to be owed by the ratepayers. The procedure must include a determination of the period over which the recovery may occur and include the authority for the commission to assess charges on those customers on whose behalf the vertically integrated electric utility incurred costs who are no longer receiving transmission or distribution service, or both, from the vertically integrated electric utility. Such determinations and procedures must not discriminate against a participant in the market.
3. Failure by a utility to minimize, in a reasonable and prudent manner, federal taxes resulting from the offsetting of gains and losses of assets and obligations properly allocable to a potentially competitive service must be considered by the commission in determining the recoverable costs for the utility.
Sec. 25.
NRS 704.997 is hereby amended to read as follows:2. The commission shall adopt regulations necessary to establish an alternative plan of regulation of a public utility that supplies natural gas and that is otherwise subject to regulation pursuant to the provisions of this chapter. The alternative plan may include, but is not limited to, provisions that:
(a) Allow adjustment of the rates charged by the public utility during the period in which the utility elects the alternative plan of regulation.
(b) Specify the provisions of this chapter that do not apply to a public utility which elects to be regulated under the alternative plan.
(c) Provide for flexibility of pricing for services that are discretionary, competitive or potentially competitive.
3. A public utility that elects to be regulated under the alternative plan established pursuant to this section is not subject to the remaining provisions of this chapter to the extent specified pursuant to this section.
4. In providing a potentially competitive service, an affiliate of a provider of a noncompetitive service may use the name or logo, or both, of the provider of noncompetitive service.
5. It is unlawful for an alternative seller to sell any service relating to the supply of natural gas to a customer for his consumption within this state without first having obtained a license from the commission to do so.
Sec. 26. If, in accordance with NRS 704.976, the public utilities commission of Nevada determines that a date other than March 1, 2000, on which customers may begin obtaining generation, aggregation, metering, billing and other potentially competitive services from alternative sellers, is necessary to protect the public interest, the commission shall, not later than December 1, 1999, provide a report to the director of the legislative counsel bureau for transmittal to the legislature, or the legislative commission if the legislature is not in session. The report must contain the reasons for the commission’s determination that the different date is necessary and a new proposed date on which the commission believes that it would be appropriate for customers to begin obtaining generation, aggregation, metering, billing and other potentially competitive services.
Sec. 27. 1. This section and sections 1 to 14, inclusive, 16 to 26, inclusive, 28 and 29 of this act become effective upon passage and approval.
2. Sections 15 and 15.5 of this act become effective on October 1, 1999.
Sec. 28. If the pending merger between Sierra Pacific Resources and Nevada Power Company, referred to in the records of the Public Utilities Commission of Nevada as Docket No. 98-7023, is terminated for any reason before the completion of the merger, this act expires by limitation on the date on which the pending merger is terminated.
Sec. 29. Except as otherwise provided in section 28 of this act, sections 13 and 14 of this act expire by limitation on March 1, 2003.".
Amend the title of the bill to read as follows:
"AN ACT relating to utilities; providing for the appointment of administrative law judges to hear contested cases before the public utilities commission of Nevada and defining their duties; revising the provisions governing recoverable costs; providing for the provision of basic electric services during the period of transition to a competitive market; providing for an auction of the right to provide such electric services; making various changes related to the provision of electricity in a competitive market; extending the statutory deadline by which customers may begin obtaining potentially competitive services; repealing provisions relating to deferred accounting; authorizing the use of the name or logo of a provider of a noncompetitive service by an affiliate of a provider of electric services or a provider of natural gas; and providing other matters properly relating thereto.".