Submitted by
The National Electrical Contractors Association (NECA)
Section 56-580:
(a) In General -
(1) Permitted Activities - Notwithstanding any law to the contrary, any public utility company, subsidiary, affiliate, or associate company of a public-utility company, may engage in, directly or indirectly, any activity, wherever located, necessary or appropriate to the provision of non-utility energy related services as described herein, subject to the provisions of this Act and the jurisdiction of the State Corporation Commission (SCC).
(2) Non-Utility Services - No public utility company shall engage in the provision of energy services, including but not limited to, the design, sale, distribution, lease, rental, installation, construction, modernization, retrofit, maintenance or repair of energy related systems, products or equipment, including household appliances, except as permitted under this section.
(A) Exceptions. The provisions of this section shall not be applicable in instances of emergency or to protect the life, health, or safety of any customer or property; or where the utility is the sole source of such systems, products, equipment or services.
(b) Prohibition of Cross-Subsidization -
The SCC shall exercise its jurisdiction pursuant to this Act and to the extent otherwise authorized under applicable law with respect to prohibiting the cross subsidization of the activities described in subsection (a) by a public-utility company in its rates for electric or gas services, and to make appropriate rate adjustments, disallow any cost recovery, or make any determination regarding the allocation of charges, to eliminate the effects of any cross-subsidization or to prohibit any unjust, unreasonable, preferential or discriminatory rate. A public utility company shall not directly or indirectly include in regulated rates or charges any costs or expenses of an affiliate, subsidiary, or associate company engaged in any business other than a utility business unless the affiliate, subsidiary or associate company provides goods or services to the utility. Any included costs shall be reasonably necessary and appropriate for a utility business, and directly related to such goods or services provided. A public utility company shall only provide non-utility services in a manner that prevents the possibility of cross-subsidization, cross-shifting, or unfair competitive advantage.
(c) Establishment of Competitive Markets -
The SCC is authorized and directed to initiate any investigation, respond to any complaint, promulgate such rules, issue such orders and to take such actions as may be necessary to assure compliance with this Act and to establish, preserve and enhance fair, open and competitive markets for the provision of energy and energy related services.
(d) Structural and Transactional Requirements. -
Any activity authorized under subsection (a) shall only be conducted under a subsidiary, affiliate, or associate company which is separate from any public utility company engaged in the generation, transmission, or distribution of electric power or gas.
(1) Such separate company, affiliate, or associate company ---
(A) shall maintain books, records, and accounts in the manner prescribed by the state public utility commission which shall be separate from the books, records, and accounts maintained by the public utility company of which it is an associate or affiliate company and any other subsidiary or affiliate of such public utility company; shall maintain proper internal cost-allocation procedures as prescribed by the SCC,
(B) shall have separate officers, directors, and employees from the public utility company;
(C) may not obtain credit under any arrangement that would permit a creditor, upon default, to have recourse to the assets of a public utility company; and
(D) shall conduct all transactions with the public utility company of which it is an associate or affiliate on an arm's length basis with any such transactions reduced to writing and available for public inspection.
(e) Independent Audit Authority for State Commissions; Books and Records -
The SCC may request that any public utility company or its associate, subsidiary or affiliate company engaging in activities covered by the provisions of this Act have performed, no more frequently than on an biannual basis, an independent audit of transactions between such public-utility company, its affiliates, subsidiaries, or associates companies.. If such an audit is ordered, the State Commission shall select and supervise an independent management or other accounting firm to perform the audit. The company shall bear the costs of performing such an audit. The audit report shall be provided to the State commission within 6 months of the audit request.
(1) Every public utility company and affiliate, subsidiary or associate company shall provide the SCC with access to books, records, accounts, documents and other data and information which the SCC finds necessary to effectively implement and effectuate the provisions of this Act.
(2) The SCC may inquire as to and prescribe, for rate making purposes, the allocation of capitalization, earnings, debts, and expenses related to ownership, operation or management of affiliates, subsidiaries or associate companies.
(f) Fair Competition -
In its dealings with its subsidiary or affiliate as described in subsection (a):
(1) a public utility company -
(A) may not unfairly discriminate in favor of its subsidiaries or affiliates, or any other entity in the provision or procurement of, or access to, or charges for, goods, services, facilities or systems, information or data, or in the establishment of any standards or criteria, or in the referral of customers;
(B) may not provide information, including marketing leads, to such company, its subsidiaries or affiliates, unless such information is made available to other persons on reasonable and non-discriminatory terms and conditions; nor shall any utility provide, transfer, or permit the use of, or access to, tangible or intangible assets of the utility which were acquired with ratepayer funds unless such transfer, provision, or other use of such assets is fully compensated by the subsidiary, associate, or affiliated company and shall not result in the conference of any unfair or uncompetitive advantage or result;
(C) shall account for all transactions with a subsidiary, affiliate or associate company in accordance with generally accepted accounting principles and shall fully value any assets, tangible or intangible, that are transferred directly or indirectly from the public utility company to its affiliates, subsidiaries or associate companies, and shall record such transactions, in accordance with such regulations as may be prescribed by the SCC to prevent improper cross subsidies.
(D) the name, logo, service mark, trademark, or trade name of the separate subsidiary or affiliate of a public utility company shall not resemble the name, logo, service mark, trademark or trade name of the public utility company and neither the public utility company nor the separate subsidiary or affiliate may trade upon, promote, or advertise their affiliate or related status.
(2) An affiliate, associate company or subsidiary of a public utility company may not use the vehicles, service tools and instruments, or employees the costs, salaries, or benefits of which are recoverable in the regulated rates of any public utility company. This section shall not be construed to prohibit a public utility company from using its vehicles, tools and instruments or employees to provide utility services or to eliminate a customer emergency or threat to public health or safety.
(g) Proprietary Information. -
(1) In complying with the requirements of this section, each public utility company and any subsidiary, affiliate, or associate company of such public utility company shall have a duty to protect the confidentiality of propriety information of competitors and customers. A public utility may not share customer proprietary information in aggregate form with its subsidiaries, affiliates or associate companies unless such aggregate information is available to other competitors or persons under the same terms and conditions. Individually identifiable customer proprietary information and other proprietary information may be -
(A) shared only with the knowledgeable, written consent of the person to which such information relates or from which it was obtained; or
(B) disclosed to appropriate authorities pursuant to court order.
(2) Exceptions. - Paragraph (1) does not limit the disclosure of individually identifiable customer proprietary information by each public utility as necessary -
(A) to initiate, render, bill, and collect for the service or products requested by a customer; or
(B) to protect the rights or property of the public utility, or to protect users of any of those services from fraudulent, abusive, or unlawful use of any such service.
(h) Implementation --
The SCC, for each public utility company under its jurisdiction, either singularly or through a generic proceeding affecting all such public utilities, shall:
(1) Hold a hearing and make a determination based on evidence presented in the record as to what rules, procedures, or other actions are necessary to implement the safeguards set forth in subsections (a) - (g) of this Section;
(2) promulgate any regulations, standards or codes necessary to implement the provisions of this Act (which shall be equally applicable to the provisions of any competitively available service or product) within one year from the date of enactment of this Act, and
(3) shall report to the State Assembly as to the actions taken and the results thereof pursuant to the provisions of this Act within two years from the date of enactment.
(i) Enforcement
(A) Any person may file a written complaint with the SCC requesting the SCC to determine compliance by a rate-regulated public utility company with the provisions of this Act or any validly promulgated rules, orders so issued, or other actions approved by the SCC to implement the provisions of this Act. If the SCC determines there is reasonable grounds to investigate the complaint, the SCC shall promptly initiate formal complaint proceedings. Such proceedings may be initiated by the SCC at any time upon its own motion. If the SCC determines that there is no reasonable basis for initiating an investigation or initiating a formal complaint proceeding, it shall so advise, in writing, the person filing such written complaint within 90 days.
(B) The SCC may establish such civil penalties as may be necessary to assure compliance, including the imposition of fines not to exceed $50,000 for each violation of the provisions of this Act.
(C) Any person filing a complaint and any person subject to any fine, penalty or other enforcement action of the SCC shall have the right of judicial review in the appropriate court of this State. For the purpose of such review, the denial of the SCC to investigate or to commence a formal complaint procedure within 90 days shall be considered final agency action.
Section 56-587 Voluntary Aggregation Permitted:
1. Any and all customers may voluntary aggregate their electrical energy and demands for the purpose of negotiating the purchase of electric generation services from any supplier.
2. Customers with multiple accounts may, at their discretion and direction, aggregate and/or assign their electrical energy requirements within and across customer classes.
3. There shall be no restrictions on the decision of customers or group of customers to aggregate loads across utility service territories and across jurisdictional boundaries.