Electric Consumer Affordability and Reliability Act

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Model Bill Info
Bill Title Electric Consumer Affordability and Reliability Act
Date Introduced July 28, 2023
Type Model Policy
Status Draft
Task Forces Energy, Environment and Agriculture
Keywords Energy

Electric Consumer Affordability and Reliability Act

The legislature of [name of state] finds that:

1.American families and American industries depend on reliable and affordable electricity for everything they do, from lifesaving medical equipment to lifesaving climate control in their homes and workplaces;
2. electricity demand must be met with electricity supply instantly, or interruptions of service result;
3. 230 coal plants, which produced 20% of American electricity in 2022, are being targeted for closure by activist groups, state and federal regulators, and utilities, with dozens across the nation slated for closure in the next three years;
4. 80,000 wind towers produced 9% of American electricity in 2022, about 6,000 are added per year, but at least 750,000 more are needed to replace coal and natural gas generation, and sufficient battery storage is needed to cover the 70% of the time during which wind turbines produce little to no electricity;
5. solar produced less than 3% of American electricity in 2022, and only produces electricity during daylight hours when the sun shines.
6. the North American Electric Reliability Corp. (NERC), the Regional Transmission Organizations (RTOs) MISO, and PMJ have warned that large swathes of the United States face elevated risks of electricity shortfalls now and in the future;
7. restricting the supply of electricity without immediate substitutes jeopardizes reliability and affordability and will cause interruptions of service, often when needed most, during the hottest or coldest months;
8. electric usage in the United States has remained flat for the last 20 years, yet investments in new generation has accelerated;
9. rising electricity prices and decreased reliability will contribute to overall inflation;
10. America’s coal and natural gas plants should not be recklessly decommissioned or regulated out of existence, they should be kept online (readily available) to provide flexibility for national security in times of war, economic security, supply security, price stability, and reliability.;
11. winter storms have (frequently) caused millions to lose electricity for extended periods, costing lives and billions in damages because of electricity shortages and outages; and
12. affordable and reliable electricity is of major importance to the poor, because they spend the largest percentage of their income on energy and are harmed the most by high energy prices.

SECTION 1. Definitions

As used in this section: (a) “Dispatchable” or on demand power means a source of electricity that is readily available for use on demand and can be dispatched upon request of a power grid operator, or one that can have its power output adjusted according to market needs, except for routine maintenance or repairs;

(b) “Reliable” means a source of electricity that is not subject to intermittent availability, has a performance standard of 8(7)0% or greater and only falls below that level during routine maintenance or repairs;

(c) “Electric generation facility” means a facility that uses water (dams), coal, natural gas, or nuclear to generate reliable or dispatchable electricity for provision to customers;

(d) “Firm power” includes dispatchable, reliable power generation, as well as battery storage in excess of 24 hours. Firm power does not include power that is not dispatchable.

(e) “Electricity Rates” are the final cost, including fees that electricity users of every class must pay the utility for electricity.

SECTION 2. Protecting Electricity Users From Excessive Rate Increases

The annual increase in electricity rates that the utilities commission allow is limited to the prior year’s rate, plus inflation, as defined by the Consumer Price Index and 1.5%. Unusual changes in fuel costs shall be managed separately through a fuel surcharge or fuel discount.

SECTION 3. Protecting Electricity Users Reliability and Availability

(a) The commission shall not authorize or approve the retirement of a firm electric generation facility as proposed in a rate case, integrated resource plan or other submission to the commission, until there is the equal or greater contracted new firm power presently available on the grid, not from prospects in the future, to replace the loss of firm power brought about by the proposed closure.

In assessing the amount of firm replacement power needed, the commission shall consider imminent and planned firm power closures in other states of the member RTO as well as in our own state. If other states are not replacing their retired or firm power, or their firm power scheduled for retirement, with an equal or greater amounts of firm power, the commission shall add these shortages to their firm power replacement calculations before approving the closure.

(b) If the Federal Government, through regulation, forces costly upgrades or other requirements leading to the closure of existing firm power plants, the State and commission shall seek waivers until there is replacement firm power available to the electric grid to replace the retirement.

If waivers are not granted, the state and commission shall seek a court injunction and bring litigation against the implementation of the regulations until firm power replacement is brought online, in order to protect electric reliability.

If the measures above are unsuccessful, the state shall pay 2/3rds of any fines from the federal government for non-compliance and the utility shall pay 1/3rd of the fine from their rate of return to protect affordability and reliability for electricity users.

These fines for non-compliance shall be exempt from the utility revenue calculations used for their guaranteed rate of return. Payments will continue until there is enough replacement firm power brought online to the electric grid to allow the closure of the firm power generation facility.

SECTION 4. Severability

Each section, paragraph, and portion of each paragraph of this Act is severable. If one or more sections, paragraphs, or portions of one or more paragraphs of this Act are held invalid on their face or as applied to particular facts, then the remaining portions and applications of the Act shall be given full effect to the greatest extent practicable.

SECTION 5. Applicability and Effective Date

This Act applies after [DATE].