Affordable and Reliable Electricity Act

Energy

Affordable and Reliable Electricity Act

AN ACT directing the [electric utility regulatory agency] to develop rules and procedures promoting an affordable and reliable electric grid that meets estimated peak demand, including during extreme weather events.

SECTION 1. Definitions

(A) “Firming power” means power sources that can provide at least 48 hours of back-up power to intermittent generation at the expected maximum level of power provided by the intermittent generation, predicted using an industry-standard methodology.

(B) “Guaranteed power capacity” means the sum of the on-demand power and firming power available, calculated without double-counting any power source.

(C) “Intermittent generation” means electric generation that requires intermittent sources of energy such as sunlight or wind.

(D) “On-demand power” means electric power from sources that do not depend on intermittent sources of energy such as sunlight or wind and whose output can be provided within 8 hours and controlled to meet changes in demand. “On demand power” does not include electric power from batteries or other storage mechanisms that are charged in whole or in part by intermittent generation.

(E)  “Peak net load” means the estimated peak demand minus the estimated minimum level of power provided by intermittent generation at the time of peak demand, predicted using an industry-standard methodology.

SECTION 2. Ensuring Grid Affordability and Reliability

(A) The [electric utility regulatory agency] shall develop rules and procedures applicable to utilities and others to ensure that any electric grid serving ratepayers within the state is affordable and reliable as set forth in this Act.

(B) An electric grid will not be considered affordable and reliable unless:

  1. Any new power-generation resource is chosen and approved based solely on achieving the lowest total monetary cost among available options, which is calculated by adding the total monetary cost of construction and operation of such resource that will be charged to ratepayers, the fiscal costs to any level of government of direct and indirect monetary subsidies applicable to such resource, the monetary cost of providing firming power if required by this Act or otherwise, and other system costs necessary to integrate the resource;
  2. Existing power-generation resources are not retired prior to the end of their potential useful lives, including where such useful lives can be extended through repairs or other modifications, unless retirement results in a lower total monetary cost among available options and the requirements of subsection (D) of this section are met;
  3. The grid maintains a guaranteed power capacity of at least 115% of peak net load;
  4. Power-generation resources serving the grid meet continuous operating requirements for summer and winter peaks, including extreme weather events that necessitate on-site fuel storage, dual fuel capability, or fuel-supply arrangements to ensure performance for seven days in the event of extreme weather; and
  5. System-wide loss of load events, such as power shortages or brownouts, are not expected to occur, to an industry-standard level of certainty, more than once in 10 years, and for a duration of five hours or less.

(C) The [electric utility regulatory agency] shall not take any action approving a new intermittent generation source unless the source has the support of firming power up to the expected maximum output level of the source for 48 hours during periods of peak load on the grid, and the cost of constructing or contracting for that firming power shall be included in calculating the total monetary cost of the intermittent generation source.

(D) Guaranteed power capacity shall be a primary consideration of the [electric utility regulatory agency] when considering matters related to the retiring or adding of electric generation. The [electric utility regulatory agency] shall not approve retiring any electric generation source that provides on-demand power, including by approving a certificate of convenience or a permit to build or acquire intermittent generation, unless the utility establishes by a preponderance of the evidence that the applicable electric grid will have at the time of retirement a guaranteed power capacity equal to or greater than described in paragraph (B)(3) of this section.

(E) The [electric utility regulatory agency] shall coordinate with regional transmission organizations to ensure and develop policies reflected above which provide power for the region in a cost-effective manner that is not weather dependent, can be controlled to meet changes in demand, and meets the requirement in paragraph (B)(5) of this section.

SECTION 3. Enforcement

(A) This Act, or any representations made by a company to the [electric utility regulatory agency] pursuant to this Act, may be enforced by the attorney general. The attorney general may investigate possible violations of this Act or misrepresentations made by a company to the [electric utility regulatory agency] pursuant to this Act, according to the investigative authority provided in [state statute describing investigative authority under state UDAP law].

(B) In addition to any other remedies available at law or equity, a company that makes misrepresentations to the [electric utility regulatory agency] pursuant to this Act shall be obligated to pay civil penalties to the state, according to the civil penalty authority provided in [state statute describing investigative authority under state UDAP law].

SECTION 4. Severability

It is the intent of the legislature that if any provision or application of this Act is held invalid, all valid provisions and applications nonetheless be given effect to the greatest extent practicable.

SECTION 5. Effective Date

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