Connecticut Seal

General Assembly

 

Substitute Bill No. 1176

    January Session, 2011

 

*_____SB01176ET____032311____*

AN ACT CONCERNING ELECTRIC RATE RELIEF.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective July 1, 2011) (a) As used in this section:

(1) "Person" has the same meaning as provided in section 12-1 of the general statutes;

(2) "Electric generation services" has the same meaning as provided in section 16-1 of the general statutes;

(3) "Electric generation facility" means electric generation facility, as the term is used in section 12-94d of the general statutes;

(4) "Regional bulk power grid" means regional bulk power grid, as the term is used in section 16a-7b of the general statutes;

(5) "Alternative energy system" has the same meaning as provided in subdivision (21) of subsection (a) of section 12-213 of the general statutes;

(6) "Fuel cells" has the same meaning as provided in subdivision (113) of section 12-412 of the general statutes;

(7) "Commissioner" means the Commissioner of Revenue Services;

(8) "Department" means the Department of Revenue Services; and

(9) "Person subject to tax" means a person providing electric generation services and uploading electricity generated at such person's electric generation facility in this state to the regional bulk power grid.

(b) (1) For each calendar quarter commencing on or after July 1, 2011, there is hereby imposed a tax on each person subject to tax, which tax shall be one-half of one mill for oil-fueled generation, two cents on nuclear generation, and one-half of one cent on coal-fired generation, multiplied by the net kilowatt hours of electricity generated by such person at such person's electric generation facility in this state and uploaded to the regional bulk power grid, provided the tax imposed by this subsection on coal-fired generation shall only be imposed on the net kilowatt hours of electricity generated by such electric generation facility in this state and uploaded to the regional bulk power grid during the months of January, February, June, July and August.

(2) Each person subject to tax shall, on or before the last day of January, April, July and October of each year, render to the commissioner a return, on forms prescribed or furnished by the commissioner, reporting the kilowatt hours of electricity generated by such person at such person's electric generation facility in this state and uploaded to the regional bulk power grid during the calendar quarter ending on the last day of the preceding month and reporting such other information as the commissioner deems necessary for the proper administration of this section. The tax imposed under this section shall be due and payable on the due date of such return. Each person subject to tax shall be required to file such return electronically with the department and to make payment of such tax by electronic funds transfer in the manner provided by chapter 228g of the general statutes, irrespective of whether the person subject to tax would have otherwise been required to file such return electronically or to make such tax payment by electronic funds transfer under the provisions of chapter 228g of the general statutes.

(c) Whenever the tax imposed under this section is not paid when due, a penalty of ten per cent of the amount due and unpaid or fifty dollars, whichever is greater, shall be imposed and interest at the rate of one per cent per month or fraction thereof shall accrue on such tax from the due date of such tax until the date of payment.

(d) The provisions of section 12-548 of the general statutes, sections 12-550 to 12-554, inclusive, of the general statutes and section 12-555a of the general statutes shall apply to the provisions of this section in the same manner and with the same force and effect as if the language of said sections had been incorporated in full into this section and had expressly referred to the tax imposed under this section, except to the extent that any provision is inconsistent with a provision in this section.

(e) The tax imposed by this section shall not apply to any net kilowatt hours of electricity generated at an electric generation facility in this state exclusively through the use of fuel cells, natural gas or an alternative energy system.

(f) At the end of each fiscal year commencing with the fiscal year ending June 30, 2012, the Comptroller is authorized to record as revenue for such fiscal year the amount of tax imposed under the provisions of this section on electricity generated prior to the end of such fiscal year and which tax is received by the Commissioner of Revenue Services not later than five business days after the last day of July immediately following the end of such fiscal year.

(g) Revenues collected from the tax imposed pursuant to this section shall be credited to the resources of the General Fund and directed as follows: (1) Until such time as the economic recovery revenue bonds issued pursuant to sections 16-245e to 16-245k, inclusive, of the general statutes, as amended by this act, and section 16-245m of the general statutes are defeased or paid in full, such revenues shall be directed to the costs of providing, recovering, financing or refinancing the economic recovery transfer, as defined in section 16-245e of the general statutes, as amended by this act, including the costs of issuing, servicing and retiring the economic recovery revenue bonds; (2) after such bonds are defeased, used to provide ratepayer relief; and (3) used to provide funding for clean and renewable energy projects.

Sec. 2. Subdivisions (19) and (20) of subsection (a) of section 16-245e of the general statutes are repealed and the following is substituted in lieu thereof (Effective from passage):

(19) "Economic recovery transfer" means the disbursement to the General Fund of up to nine hundred fifty-six million dollars from proceeds of the issuance of the economic recovery revenue bonds; and

(20) "Economic recovery revenue bonds" means rate reduction bonds issued to fund the economic recovery transfer, the costs of issuance, credit enhancements, operating expenses and such other costs as the finance authority deems necessary or advisable, and which shall be payable first from the revenues collected pursuant to the tax imposed by section 1 of this act, and then to the extent necessary, from competitive transition assessment charges that replace the competitive transition assessment charges funding stranded costs and that are offset in part by decreases to the charges funding the Energy Conservation and Load Management Fund, as provided in subdivision (3) of subsection (a) of section 16-245m.

Sec. 3. Subsection (b) of section 16-245f of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2011):

(b) Prior to September 1, 2010, each electric distribution company shall submit to the department an application for a financing order with respect to funding the economic recovery transfer through the issuance of economic recovery revenue bonds. The department shall hold a hearing for each such electric distribution company to determine the amount necessary to fund the economic recovery transfer, the payment of economic recovery revenue bonds, costs of issuance, credit enhancements and operating expenses for the economic recovery revenue bonds. Such amount as determined by the department shall constitute transition property. The department shall allocate the responsibility for the funding of the economic recovery transfer and the expenses of the economic recovery revenue bonds equitably between the electric distribution companies. Such allocation may provide that the respective charges payable by the customers of each electric distribution company may commence on different dates and that such rates may vary over the period the economic recovery revenue bonds and the related operating expenses are being paid, provided (1) such charges are equitably allocated to the customers of each electric distribution company, and (2) the department determines that, over such period, and taking into account the timing of charges, the charges on a kilowatt hour basis assessed to the customers of the respective electric distribution companies have substantially the same present value after consultation with the finance authority as to the discount rate to be used in determining such present value. Any hearing with respect to a financing order in respect to the economic recovery transfer and the issuance of economic recovery revenue bonds shall not be a contested case, as defined in section 4-166. The department shall issue a financing order in respect to the economic recovery revenue bonds for each electric distribution company on or before October 1, 2010. In such financing order, the department shall determine the competitive transition assessment in respect of the economic recovery revenue bonds, which shall not be assessed prior to June 30, 2011, unless the department sets an earlier date in the financing order. A component of the competitive transition assessment in respect of the economic recovery revenue bonds shall be equal to the decreases to the charges provided in subdivision (3) of subsection (a) of section 16-245m funding the Energy Conservation and Load Management Fund. The portion of the competitive transition assessment in respect to the economic recovery revenue bonds equal to such decreases shall be assessed and collected from the date such charges are reduced pursuant to the financing order. The department may provide in such financing order that money from other sources, including revenues from the tax assessed pursuant to section 1 of this act and proceeds of charges assessed customers of municipal electric companies, transferred to the trustee under the indenture and intended to be used to pay debt service on the bonds shall be taken into account in making adjustments to the competitive transition assessment pursuant to subdivision (2) of subsection (b) of section 16-245i if such payment is not made from General Fund revenues and would not adversely affect the tax status or credit rating of economic recovery revenue bonds.

Sec. 4. Subsection (b) of section 16-245h of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2011):

(b) Any surplus competitive transition assessment described in subparagraph (A) of subdivision (2) of subsection (a) of section 16-245e in excess of the amounts necessary to pay principal, premium, if any, interest and expenses of the issuance of the rate reduction bonds issued prior to January 1, 2002, after such bonds have been defeased or paid in full, shall be remitted to the finance authority who shall apply such charges to the payment of economic recovery revenue bonds and cause such charges to be credited against the payment obligation in respect to the economic recovery revenue bonds of the customers making such excess payments. If the economic recovery revenue bonds are not issued, the finance authority shall transfer such excess charges to the General Fund. Any surplus competitive transition assessment described in subparagraph (A) of subdivision (2) of subsection (a) of section 16-245e in excess of the amounts necessary to pay principal, premium, if any, interest and expenses of the issuance of the rate reduction bonds issued on or after May 1, 2010, shall be remitted to the financing entity and [may] shall be used to benefit customers. No funds shall be remitted, applied or used in accordance with the terms of this subsection if such remittance, application or use would result in a recharacterization of the tax, accounting, and other intended characteristics of the financing, including, but not limited to, the following:

(1) Avoiding the recognition of debt on the electric company's or the electric distribution company's balance sheet for financial accounting and regulatory purposes;

(2) Treating the rate reduction bonds as debt of the electric company or electric distribution company or its affiliates for federal income tax purposes;

(3) Treating the transfer of the transition property by the electric company or electric distribution company as a true sale for bankruptcy purposes; or

(4) Avoiding any adverse impact of the financing on the credit rating of the rate reduction bonds or the electric company or electric distribution company.

This act shall take effect as follows and shall amend the following sections:

Section 1

July 1, 2011

New section

Sec. 2

from passage

16-245e(a)(19) and (20)

Sec. 3

July 1, 2011

16-245f(b)

Sec. 4

July 1, 2011

16-245h(b)

ET

Joint Favorable Subst.