Energy task force explains draft bill

The Legislature's Energy Policy Task Force on Thursday set the stage for what could be contentious meetings in November.

At issue is the Utah Public Service Commission's regulatory process and duties concerning utilities' bidding for new energy plants.

Draft legislation isn't ready yet, so the task force put out a flow chart to explain some concepts that will be incorporated in the draft. The draft bill itself will be ready for parties to discuss in November at what could be volatile meetings.

Rep. David Ure, R-Kamas, predicted "very heavy debate" and suggested that the task force meet twice in November to work on the draft bill "so that we do not have a full-fledged battle or a bloodbath during the (general) session."

The task force has heard testimony for a few months on the matter, which stems from controversy over PacifiCorp selecting itself as the builder of a power plant near Mona, Juab County. The utility received more than 100 bids from outside sources, including one from a company that maintains it could have built the plant for less than PacifiCorp's bid.

In both Public Service Commission hearings at the time and in task force meetings since, several parties have questioned bidding process fairness, bid-comparison criteria, the regulatory process and their effects on ratepayers.

The existing process requires a utility to get a commission certificate for a new facility and later face a prudence review when trying to recover costs through consumer rates. The flow chart calls for large energy projects with long-term operational lives to have two commission hearings: one about the bidding process itself and another about whether the utility acted prudently, including whether it complied with the approved process.

Task force co-chairman Sen. Leonard Blackham, R-Moroni, said the first hearing, before bids are accepted, would be "so everybody would know what the rules and what the methodology and things would be used." As for the subsequent hearing, "it's a public hearing process, where all parties that have been involved will get their chance to argue or to present their opinion of the (commission) decision and the process as it has been implemented at that point."

Ure said parties need to know details about the bidding process up-front.

"It's my desire that both sides know exactly what the playing field is when they enter into it," Ure said. "I don't care what the negotiations are, so they both know, going into negotiations, exactly where they are, so there's not a surprise on one side or the other. That's what I'm trying to eliminate."