40-202

40-202. Supervising and regulating public
service corporations; telecommunications promotion; competitive
electricity market; rules; duty to comply; exemptions for electric
generation; unlawful practice

A. The commission may supervise and regulate every public service corporation in
the state and do all things, whether specifically designated in this title or in addition
thereto, necessary and convenient in the exercise of that power and jurisdiction. In
supervising and regulating long-distance telecommunications corporations, the commission
shall encourage competition and growth in the telecommunications industry and promote
economic development and investment in new telecommunications technologies,
infrastructure and services. In furtherance of this policy, the commission shall
establish procedures and standards for identifying and regulating competitive
long-distance telecommunications markets. When the commission determines that a
long-distance telecommunications market is competitive, it shall establish appropriate
supervisory and regulatory treatment for competitive long-distance telecommunications
markets as distinguished from noncompetitive telecommunications markets. In imposing any
assessments or other charges on mobile telecommunications service providers, the
commission shall comply with the requirements of the mobile telecommunications sourcing
act (P.L. 106-252; 114 Stat. 626; 4 United States Code sections 116 through 126).

B. It is the public policy of this state that a competitive market shall exist in
the sale of electric generation service. In order to transition to competition for
electric generation service, the commission's authority is confirmed to:

1. Open the service territories of public service corporations, except foreign
nonprofit, member owned cooperative corporations, to competitive access by other
electricity suppliers or providers of other services not later than December 31, 1998 for
at least twenty per cent of their 1995 retail load, at least fifteen per cent of which
shall be reserved for customers in the residential customer class, and open their entire
service territory to competition not later than December 31, 2000.

2. Establish reasonable requirements for certificating and regulating electricity
suppliers that are public service corporations.

3. Maintain the current service territories of public service corporations and
prohibit a public service corporation from providing electric distribution service in the
service territories of other electric distribution utilities in this state.

4. Require an electric distribution utility that is a public service corporation
and that has been granted a service territory through a certificate of convenience and
necessity or a contract and agreement among utilities to provide other services for the
service territory that the electric distribution utility serves as follows:

(a) Beginning on December 31, 1998 through December 31, 2000, billing and
collections services shall be provided on a competitive basis for those retail electric
customers with loads of one megawatt and above that have competitive electric generation
service. After December 31, 2000 billing and collections services shall be provided on a
competitive basis for all retail electric customers that have competitive electric
generation service.

(b) Beginning on December 31, 1998 through December 31, 2000, metering shall be
provided on a competitive basis for those retail electric customers with loads of one
megawatt and above that have competitive electric generation service. After December 31,
2000 metering shall be provided on a competitive basis for all retail electric customers
that have competitive electric generation service. All meters shall meet or exceed
existing standards for safety, reliability and accuracy.

(c) By December 31, 1998 through December 31, 2000, meter reading shall be provided
on a competitive basis for those retail electric customers with loads of one megawatt and
above that have competitive electric generation service. After December 31, 2000 meter
reading shall be provided on a competitive basis for all retail electric customers that
have competitive electric generation service.

5. Require the electric distribution utility that is a public service corporation
to act as the supplier of last resort for electric generation service for every retail
electric customer within its electric distribution service territory whose annual usage
is one hundred thousand kilowatt hours or less if other electricity suppliers are
unwilling or are unable to supply electric generation service and whose electric
generation service has been discontinued through no fault of the retail electric
customer.

6. Provide for the recovery of just and reasonable costs incurred by the electric
distribution utilities that are public service corporations for supplying electric
generation service under paragraph 5 of this subsection through a distribution charge on
retail customers whose annual usage is one hundred thousand kilowatt hours or less.

7. Investigate complaints regarding the subsidization of competitive services by
any regulated rate or charge for any noncompetitive electric service and impose
appropriate sanctions for any such subsidization.

8. Except as provided for the recovery of stranded costs, including costs
associated with employee severance incurred as a direct result of competition among
electric suppliers, as ordered by the commission, not consider the profits or losses
associated with electric generation service when regulating electric distribution
service.

C. In supervising and regulating public service corporations, the commission's
authority is confirmed to adopt rules to:

1. Protect the public against deceptive, unfair and abusive business practices,
practices related to deposit requirements and reconnection fees, intrusive and abusive
marketing, deceptive or untrue advertising practices and practices prohibited under
subsection H of this section.

2. Prohibit a public service corporation that forms an affiliate for the purposes
of providing services that require a licensed contractor or has employees perform these
services, including but not limited to electrical, heating, ventilation, air conditioning
or plumbing or construction services, from advertising these services in their billing
statement or in other mailings done by the electric distribution utility.

3. Provide that a separate authorization pursuant to paragraph 4 of this subsection
to change electricity supplier and plain language in advertising and billing using
uniform words and phrases that have the same meanings so that customers can make accurate
comparisons.

4. Provide that a separate written and dated authorization is required for a change
in a retail electricity supplier subject to the following:

(a) The authorization shall not contain any inducements.

(b) The authorization shall be in legible print with clear and plain language
confirming the rates, terms, conditions and nature of the service to be provided.

(c) The authorization shall not state or suggest that the customer take action to
retain the customer's current electricity supplier.

(d) An electricity supplier that submits or executes a change in a retail
electricity customer's electricity supplier in violation of this paragraph shall refund
to the retail electricity customer the entire amount of the customer's electricity
charges attributable to electric generation service from the electricity supplier for
three months, or the period of the unauthorized service, whichever is less.

(e) The authorization shall be in the same language as any promotional or
inducement materials provided to the retail electric customer.

(f) No box or container may be used to collect entries for sweepstakes or a contest
that, at the same time, is used to collect authorization by a retail electric customer to
change the customer's electricity supplier or to subscribe to other services.

5. Provide that, notwithstanding any other law, customer information, account
information and related proprietary information are confidential unless specifically
waived by the customer in writing.

6. Ensure that public service corporations that employ the services of a contractor
for interior household energy service, either directly or through any affiliate, require
the contractors and subcontractors to be licensed by the registrar of contractors and
shall comply with all municipal permit and inspection standards and applicable life
safety codes. For the purposes of this paragraph, "contractor" has the same meaning
prescribed in section 32-1101.

7. Permit the aggregation of loads by multiple customers.

D. In supervising and regulating public service corporations, it is the public
policy of this state that the most effective manner of establishing just and reasonable
rates for electricity is to permit electric generation service prices to be established
in a competitive market.

E. The commission shall order on a nondiscriminatory basis that public service
corporations open their distribution territories to competition by public power entities
to the same extent and under the same terms and conditions as authorized electricity
suppliers are granted access through commission rules or orders.

F. Except as provided in subsection G of this section, during the initial
construction of a residential structure, electric and natural gas facilities at a minimum
shall be installed in and to the structure in a manner that provides the retail energy
consumer ultimately residing in the structure with the capability to choose between
electricity and natural gas as an energy source for each appliance application.

G. A residential structure may be constructed without the installation of any
particular facilities if:

1. The structure is not located within the service territory of a public service
corporation certificated to furnish the associated energy service.

2. Unless mandated otherwise by law or governmental regulation, the public service
corporation certificated to furnish the associated energy notifies the contractor or
owner that the extension of the facilities to the structure is not economically feasible.

3. The public service corporation certificated to furnish a particular energy
service and the owner or contractor agree that the extension of the facilities to the
subdivision, to the structure or to any appliance application would not be economically
feasible or would otherwise be inappropriate. In this case, the parties may agree to
install no facilities in the subdivision, to install service to any or all residential
structures without providing service to any appliance application or to install
facilities to some but not all appliance applications.

H. Unless mandated by law or a generally accepted industry code, a person or
entity, including municipal corporations and political subdivisions, shall not engage in
any practice that interferes with the opportunity to have electric and natural gas
facilities at a minimum installed in and to an existing residential structure in a manner
that provides the retail energy consumer ultimately residing in the structure and all
subsequent retail energy consumers residing in the structure with the capability to
choose between electricity and natural gas as an energy source for each appliance
application. This subsection does not apply to reasonable sales and marketing activities.

I. If a trench is provided by a contractor or a property owner for the purpose of
having utility facilities installed to a residential structure, electric and natural gas
facilities at a minimum shall be permitted to occupy the trench if the installation of
the facilities is completed in compliance with generally accepted industry safety codes
applicable to the installation. Except in the case of underground conversion service
areas provided for in sections 40-341 through 40-355 and improvement districts for
underground utility facilities provided for in section 48-620, if the contractor or
property owner conditions occupancy in a trench on a reimbursement of costs associated
with providing the trench, the contractor or property owner may require an occupant to
pay a pro rata share of the costs associated with providing the trench. A public service
corporation may use as a credit against the payment money paid through the public service
corporation's conduit or other reimbursement programs.

J. Before initiating a complaint with a public service corporation or the
commission, the parties to a dispute arising under subsections F through I of this
section shall meet and in good faith attempt to resolve the dispute through an informal
dispute resolution process. Compliance with subsections F through I of this section does
not require inspection or enforcement by a city, town or county.

K. After facilities have been installed initially in accordance with subsection F
of this section, the public service corporation, the homeowner, the home builder or the
contractor is not responsible or liable for any subsequent modification to the number of
initially installed facilities.

L. A public service corporation shall comply with every order, decision, rule or
regulation made by the commission in any matter relating to or affecting its business as
a public service corporation and shall do everything necessary to secure compliance with
and observance of every such order, decision, rule or regulation.

M. The commission by rule or order may exempt or partially exempt any competitive
service of any public service corporation from the application of section 40-203, section
40-204, subsections A and B and sections 40-248, 40-250, 40-251, 40-285, 40-301, 40-302,
40-303, 40-321, 40-322, 40-331, 40-332, 40-334, 40-365, 40-366, 40-367, 40-374 and
40-401.

N. The provisions of subsection B, paragraphs 3 and 5 of this section are subject
to legislative review by the auditor general in 2008.

O. The provisions of subsection B, paragraph 4 of this section are subject to
sunset review by the auditor general in 2003.

P. Failure to comply with the rules or procedures adopted pursuant to subsections B
and C of this section is an unlawful practice pursuant to section 44-1522. The attorney
general may investigate and take appropriate action as prescribed by title 44, chapter
10, article 7.