Article 1.--POWERS OF STATE CORPORATION COMMISSION
66-1,176b.Termination of service rights duringperiod when a validfranchise is in effect; facilities to be acquired; compensation;formula.(a) When the service rights of a retail electric supplier are terminatedby a city during the period in which a valid franchise is in effect and theservice rights are assumed by the terminating city, the governing body ofthe city shall acquire from the terminated supplier the parts of the localelectric distribution system necessary to serve all customers within thepreviously franchised area and the terminated supplier shall sell thesystem to the governing body of such city for which it shall be fairlycompensated. Such compensation shall be an amount mutually agreed upon bythe affected parties or an amount determined by the following formula:
(1) The depreciated replacement cost for the electric utility facilitiesin the territory in which the service rights have been terminated. As usedin this paragraph, "depreciated replacement cost" means the originalinstalled cost of the facilities, adjusted to present value by utilizing anationally recognized index of utility construction costs, less accumulateddepreciation based on the book depreciation rates of the selling utility, asfiled with and approved by the state corporation commission, which are ineffect at the time of acquisition;
(2) the depreciated replacement costs of the remaining proportion of anytake or pay power contracts or participation power agreements;
(3) the depreciated replacement cost for the electric utility facilitiesoutside the affected territory used in providing service to the formerlyfranchised area. Such facilities shall include all generation facilitiesand all transmission facilities throughout the terminated utility'sintegrated system, the value of which shall be determined by thedepreciated replacement cost formula in paragraph (1) multiplied by thepercentage of the terminated utility's total retail kilowatt-hour sales tocustomers in the affected area during the 12 months next preceding theeffective date of the sale;
(4) all reasonable and prudent costs of detaching the electric systemfacilities to be sold, including the reasonable costs of studies andinventories made to determine the facility's value and all reasonable andprudent costs of reintegrating the remaining electric system facilities ofthe retail electric supplier whose service rights are terminated;
(5) an amount equal to two times the net revenues received during the12 months nextpreceding the date of termination of the service rights from the customerswithin the affected area of the retail electric supplier whose servicerights are terminated. As used in this paragraph, "net revenues" means thetotal revenues received by the terminated utility for electric servicewithin the affected area less franchise and sales taxes collected; the costof fuel or purchased power recovered in the revenues; and labor,maintenance, administration and insurance. This number shall be multipliedby the number of years remaining in any franchise contract; and
(6) an amount equal to the state and federal tax liability created bythe taxable income pursuant to the provisions of this paragraph andparagraphs (1), (2), (3), (4) and (5) by the retail electric supplier whoseservice rights are terminated, calculated without regard to any taxdeductions or benefits not related to the sale of assets covered herein.
(b) If the parties are unable to agree upon the amount of compensationto be paid pursuant to this act after 60 days following the date oftermination of service rights, either party may apply to the district courthaving jurisdiction where any portion of the facilities is located fordetermination of compensation. Such determination shall be made by thecourt sitting without a jury.
History: L. 1987, ch. 255, § 1;L. 2002, ch. 27, § 2; July 1.
Article 1.--POWERS OF STATE CORPORATION COMMISSION
66-1,176b.Termination of service rights duringperiod when a validfranchise is in effect; facilities to be acquired; compensation;formula.(a) When the service rights of a retail electric supplier are terminatedby a city during the period in which a valid franchise is in effect and theservice rights are assumed by the terminating city, the governing body ofthe city shall acquire from the terminated supplier the parts of the localelectric distribution system necessary to serve all customers within thepreviously franchised area and the terminated supplier shall sell thesystem to the governing body of such city for which it shall be fairlycompensated. Such compensation shall be an amount mutually agreed upon bythe affected parties or an amount determined by the following formula:
(1) The depreciated replacement cost for the electric utility facilitiesin the territory in which the service rights have been terminated. As usedin this paragraph, "depreciated replacement cost" means the originalinstalled cost of the facilities, adjusted to present value by utilizing anationally recognized index of utility construction costs, less accumulateddepreciation based on the book depreciation rates of the selling utility, asfiled with and approved by the state corporation commission, which are ineffect at the time of acquisition;
(2) the depreciated replacement costs of the remaining proportion of anytake or pay power contracts or participation power agreements;
(3) the depreciated replacement cost for the electric utility facilitiesoutside the affected territory used in providing service to the formerlyfranchised area. Such facilities shall include all generation facilitiesand all transmission facilities throughout the terminated utility'sintegrated system, the value of which shall be determined by thedepreciated replacement cost formula in paragraph (1) multiplied by thepercentage of the terminated utility's total retail kilowatt-hour sales tocustomers in the affected area during the 12 months next preceding theeffective date of the sale;
(4) all reasonable and prudent costs of detaching the electric systemfacilities to be sold, including the reasonable costs of studies andinventories made to determine the facility's value and all reasonable andprudent costs of reintegrating the remaining electric system facilities ofthe retail electric supplier whose service rights are terminated;
(5) an amount equal to two times the net revenues received during the12 months nextpreceding the date of termination of the service rights from the customerswithin the affected area of the retail electric supplier whose servicerights are terminated. As used in this paragraph, "net revenues" means thetotal revenues received by the terminated utility for electric servicewithin the affected area less franchise and sales taxes collected; the costof fuel or purchased power recovered in the revenues; and labor,maintenance, administration and insurance. This number shall be multipliedby the number of years remaining in any franchise contract; and
(6) an amount equal to the state and federal tax liability created bythe taxable income pursuant to the provisions of this paragraph andparagraphs (1), (2), (3), (4) and (5) by the retail electric supplier whoseservice rights are terminated, calculated without regard to any taxdeductions or benefits not related to the sale of assets covered herein.
(b) If the parties are unable to agree upon the amount of compensationto be paid pursuant to this act after 60 days following the date oftermination of service rights, either party may apply to the district courthaving jurisdiction where any portion of the facilities is located fordetermination of compensation. Such determination shall be made by thecourt sitting without a jury.
History: L. 1987, ch. 255, § 1;L. 2002, ch. 27, § 2; July 1.
Article 1.--POWERS OF STATE CORPORATION COMMISSION
66-1,176b.Termination of service rights duringperiod when a validfranchise is in effect; facilities to be acquired; compensation;formula.(a) When the service rights of a retail electric supplier are terminatedby a city during the period in which a valid franchise is in effect and theservice rights are assumed by the terminating city, the governing body ofthe city shall acquire from the terminated supplier the parts of the localelectric distribution system necessary to serve all customers within thepreviously franchised area and the terminated supplier shall sell thesystem to the governing body of such city for which it shall be fairlycompensated. Such compensation shall be an amount mutually agreed upon bythe affected parties or an amount determined by the following formula:
(1) The depreciated replacement cost for the electric utility facilitiesin the territory in which the service rights have been terminated. As usedin this paragraph, "depreciated replacement cost" means the originalinstalled cost of the facilities, adjusted to present value by utilizing anationally recognized index of utility construction costs, less accumulateddepreciation based on the book depreciation rates of the selling utility, asfiled with and approved by the state corporation commission, which are ineffect at the time of acquisition;
(2) the depreciated replacement costs of the remaining proportion of anytake or pay power contracts or participation power agreements;
(3) the depreciated replacement cost for the electric utility facilitiesoutside the affected territory used in providing service to the formerlyfranchised area. Such facilities shall include all generation facilitiesand all transmission facilities throughout the terminated utility'sintegrated system, the value of which shall be determined by thedepreciated replacement cost formula in paragraph (1) multiplied by thepercentage of the terminated utility's total retail kilowatt-hour sales tocustomers in the affected area during the 12 months next preceding theeffective date of the sale;
(4) all reasonable and prudent costs of detaching the electric systemfacilities to be sold, including the reasonable costs of studies andinventories made to determine the facility's value and all reasonable andprudent costs of reintegrating the remaining electric system facilities ofthe retail electric supplier whose service rights are terminated;
(5) an amount equal to two times the net revenues received during the12 months nextpreceding the date of termination of the service rights from the customerswithin the affected area of the retail electric supplier whose servicerights are terminated. As used in this paragraph, "net revenues" means thetotal revenues received by the terminated utility for electric servicewithin the affected area less franchise and sales taxes collected; the costof fuel or purchased power recovered in the revenues; and labor,maintenance, administration and insurance. This number shall be multipliedby the number of years remaining in any franchise contract; and
(6) an amount equal to the state and federal tax liability created bythe taxable income pursuant to the provisions of this paragraph andparagraphs (1), (2), (3), (4) and (5) by the retail electric supplier whoseservice rights are terminated, calculated without regard to any taxdeductions or benefits not related to the sale of assets covered herein.
(b) If the parties are unable to agree upon the amount of compensationto be paid pursuant to this act after 60 days following the date oftermination of service rights, either party may apply to the district courthaving jurisdiction where any portion of the facilities is located fordetermination of compensation. Such determination shall be made by thecourt sitting without a jury.
History: L. 1987, ch. 255, § 1;L. 2002, ch. 27, § 2; July 1.
