Reference Title: electric power competition

AN ACT
AMENDING TITLE 9, CHAPTER 5, ARTICLE 2, ARIZONA REVISED STATUTES, BY ADDING SECTION 9-520; AMENDING SECTIONS 10-2051, 10-2052, 10-2057, 10-2060, 10-2062, 10-2064 AND 10-2068, ARIZONA REVISED STATUTES; REPEALING SECTIONS 10-2071 AND 10-2072, ARIZONA REVISED STATUTES; AMENDING SECTIONS 10-2081, 10-2121, 10-2122, 10-2127, 10-2128, 10-2130, 10-2131 AND 10-2134, ARIZONA REVISED STATUTES; REPEALING SECTION 10-2137, ARIZONA REVISED STATUTES; AMENDING SECTION 10-2138, ARIZONA REVISED STATUTES; AMENDING TITLE 30, ARIZONA REVISED STATUTES, BY ADDING CHAPTER 6; AMENDING TITLE 40, CHAPTER 1, ARTICLE 1, ARIZONA REVISED STATUTES, BY ADDING SECTION 40-113; AMENDING SECTIONS 40-201, 40-202 AND 40-204, ARIZONA REVISED STATUTES; AMENDING TITLE 40, CHAPTER 2, ARTICLE 1, ARIZONA REVISED STATUTES, BY ADDING SECTIONS 40-207, 40-208 AND 40-209; AMENDING SECTIONS 40-286, 40-360.02, 42-5155, 42-5161 AND 42-6103, ARIZONA REVISED STATUTES; AMENDING SECTION 42-5010, ARIZONA REVISED STATUTES, AS AMENDED BY LAWS 1998, CHAPTER 1, SECTION 161; AMENDING SECTION 42-5063, ARIZONA REVISED STATUTES, AS AMENDED BY LAWS 1998, CHAPTER 1, SECTION 166; AMENDING SECTION 42-5151, ARIZONA REVISED STATUTES, AS AMENDED BY LAWS 1998, CHAPTER 1, SECTION 172; RELATING TO ELECTRIC POWER.

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 9, chapter 5, article 2, Arizona Revised Statutes, is amended by adding section 9-520, to read:

9-520 . Provision of electric generation services; competition; definitions

A. A CITY OR TOWN THAT PROVIDES ELECTRIC DISTRIBUTION SERVICE SHALL NOT SELL ELECTRIC GENERATION SERVICE OUTSIDE OF ITS SERVICE TERRITORY AS CONSTITUTED ON JANUARY 1, 1998, OR AS LATER AMENDED BY MUTUAL AGREEMENT, UNLESS THE CITY OR TOWN HAS AGREED TO ALLOW OTHER ELECTRICITY SUPPLIERS TO MAKE SALES OF ELECTRIC GENERATION SERVICE WITHIN ITS SERVICE TERRITORY.

B. NOTWITHSTANDING SECTION 9-516, SUBSECTION A, A CITY OR TOWN THAT PROVIDES ELECTRIC DISTRIBUTION SERVICE MAY SELL ELECTRIC GENERATION SERVICE OUTSIDE OF ITS SERVICE TERRITORY IF THE CITY OR TOWN MEETS THE REQUIREMENTS OF SUBSECTION A OF THIS SECTION.

C. IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE REQUIRES:

1. "ELECTRIC DISTRIBUTION SERVICE" MEANS THE DISTRIBUTION OF ELECTRICITY TO RETAIL CUSTOMERS THROUGH THE USE OF ELECTRIC DISTRIBUTION FACILITIES.

2. "ELECTRIC GENERATION SERVICE" MEANS THE PROVISION OF ELECTRICITY FOR SALE TO RETAIL ELECTRIC CUSTOMERS BUT DOES NOT INCLUDE ELECTRIC DISTRIBUTION OR TRANSMISSION SERVICES.

3. "ELECTRIC TRANSMISSION SERVICE" MEANS THE TRANSMISSION OF ELECTRICITY TO RETAIL ELECTRIC CUSTOMERS OR TO ELECTRIC DISTRIBUTION FACILITIES AND THAT IS SO CLASSIFIED BY THE FEDERAL ENERGY REGULATORY COMMISSION OR, TO THE EXTENT PERMITTED BY LAW, SO CLASSIFIED BY THE ARIZONA CORPORATION COMMISSION.

4. "ELECTRICITY SUPPLIER" MEANS A PERSON, WHETHER ACTING IN A PRINCIPAL, AGENT OR OTHER CAPACITY, WHO OFFERS TO SELL ELECTRICITY TO A RETAIL ELECTRIC CUSTOMER IN THIS STATE.

5. "SERVICE TERRITORY" MEANS THE GEOGRAPHIC AREA IN WHICH A PUBLIC POWER ENTITY OR PUBLIC SERVICE CORPORATION OWNS, OPERATES, CONTROLS OR MAINTAINS ELECTRIC DISTRIBUTION FACILITIES AND THAT ADDITIONAL AREA IN WHICH THE PUBLIC POWER ENTITY OR PUBLIC SERVICE CORPORATION HAS AGREED TO EXTEND ELECTRIC DISTRIBUTION FACILITIES, WHETHER ESTABLISHED BY A CERTIFICATE OF CONVENIENCE AND NECESSITY, BY OFFICIAL ACTION BY A PUBLIC POWER ENTITY OR BY CONTRACT OR AGREEMENT.

Sec. 2. Section 10-2051, Arizona Revised Statutes, is amended to read:

10-2051 . Definitions

In this article, unless the context otherwise requires:

1. "Cooperative" means a corporation THAT IS organized under this article or which THAT becomes subject to this article in the manner provided therein IN THIS ARTICLE .

2. "Person" means a natural person, firm, association, corporation, business trust, partnership, federal agency, state or political subdivision or agency thereof or any body politic.

3. "Rural area" means an area of this state not included within the boundaries of a city or town having a population in excess of twenty-five hundred inhabitants, and the term includes both the farm and non-farm population thereof.

Sec. 3. Section 10-2052, Arizona Revised Statutes, is amended to read:

10-2052 . Purpose

A. Cooperative nonprofit membership corporations may be organized under this article for ANY OF the purpose of FOLLOWING PURPOSES :

1. Supplying , PURCHASING, MARKETING, SELLING, TRANSMITTING OR DISTRIBUTING electric energy to persons in rural areas and promoting and extending the use of electric energy in such areas .

2. PROVIDING BILLING, METERING, COMMUNICATIONS AND OTHER SERVICES RELATED OR INCIDENTAL TO SUPPLYING, PROVIDING OR TRANSMITTING ELECTRIC ENERGY, WHETHER OR NOT THE COOPERATIVE IS ITSELF SUPPLYING OR TRANSMITTING THAT ENERGY.

2. 3. Engaging in activities designed to promote economic development of rural areas as described in section 10-2057.

4. ENGAGING IN ACTIVITIES FOR ANY LAWFUL PURPOSE.

B. In a rural area where there is no telephone service, a cooperative which is supplying electric energy in the area may enter into a cooperative agreement with the existing holder of a certificate of convenience and necessity for telephone service in the general area to supply telephone service in the same area.

C. Generation and transmission cooperatives as defined in article 4 of this chapter are subject to article 4 OF THIS CHAPTER and not to this article.

Sec. 4. Section 10-2057, Arizona Revised Statutes, is amended to read:

10-2057 . Powers of electric cooperative

A. A cooperative organized under this article may:

1. Sue and be sued in its corporate name.

2. Provide for existence for a period of twenty-five years with the privilege of extension as provided by law.

2. HAVE PERPETUAL EXISTENCE.

3. Adopt and alter a corporate seal.

4. Generate, manufacture, purchase, acquire, accumulate and transmit electric energy, and distribute, sell, supply and dispose of electric energy to its members.

4. TO COMPETE MORE EFFECTIVELY WITH OTHER ENTITIES IN THE ELECTRIC ENERGY MARKET, ENGAGE IN THE GENERATION, MANUFACTURE, PURCHASE, ACQUISITION, ACCUMULATION, TRANSMISSION, MARKETING, SALE, DISTRIBUTION, SUPPLY AND DISPOSITION OF ELECTRIC ENERGY, EITHER INDIVIDUALLY OR JOINTLY IN COLLABORATION WITH OTHER CORPORATIONS THAT HAVE LOANS MADE OR GUARANTEED BY THE UNITED STATES THROUGH THE ADMINISTRATOR OF THE RURAL UTILITIES SERVICE OR THAT ARE NONPROFIT MEMBERS OF THE CORPORATION.

5. Assist persons to whom electric energy is or will be supplied by the cooperative in wiring their premises and in acquiring and installing electrical and plumbing appliances, equipment, fixtures and apparatus by means of financing.

6. Assist persons to whom electric energy is or will be supplied by the cooperative in constructing, equipping, maintaining and operating electric cold storage or processing plants by means of financing.

7. Construct, purchase, lease or otherwise acquire, and equip, maintain and operate, and sell, assign, convey, lease, mortgage, pledge or otherwise dispose of or encumber , electric transmission and distribution lines or systems, electric generating plants, lands, buildings, structures, dams, plants and equipment, and any other real or personal property, tangible or intangible, which THAT is deemed necessary, convenient or appropriate to accomplish the ANY purpose for which the cooperative is organized OR THAT IT ELECTS TO UNDERTAKE .

8. Purchase, lease or otherwise acquire, and use, and exercise and sell, assign, convey, mortgage, pledge or otherwise dispose of or encumber, franchises, rights, privileges, licenses and easements.

9. Borrow money and otherwise contract indebtedness, and issue notes, bonds and other evidences of indebtedness, and secure the payment thereof by mortgage, pledge or deed of trust of, or any other encumbrance upon, any or all of its presently owned or after-acquired real or personal property, assets, franchises or revenues.

10. Construct, maintain and operate electric transmission and distribution lines along, upon, under and across publicly owned lands and public thoroughfares, including, without limitation, all roads, highways, streets, alleys, bridges and causeways, and acquire for such purposes franchises, licenses, permits, easements, rights-of-way and all similar rights and privileges relating to such purposes.

11. Exercise the power of eminent domain in the manner and to the extent provided by the laws of this state for the exercise of such power by other corporations constructing or operating electric transmission and distribution lines or systems.

12. Become a member of other cooperatives or corporations or own stock therein IN THOSE COOPERATIVES OR CORPORATIONS OR OTHERWISE FINANCIALLY PARTICIPATE AND INVEST IN THOSE COOPERATIVES OR CORPORATIONS .

13. Conduct its business and exercise its powers within or without this state.

14. Adopt, amend and repeal bylaws.

15. Do and perform other acts and things and have and exercise other powers which THAT may be necessary, convenient or appropriate to accomplish the purpose for which the cooperative is organized OR TO CARRY OUT ITS BUSINESS AND AFFAIRS .

16. Subject to any limitation imposed by federal law, invest its own monies, make loans or guarantees or participate in rural community infrastructure projects, in job creation activities and in other activities to promote economic development in rural areas if the rural development activities are approved by the rural electrification administration UTILITIES SERVICE .

B. The authority granted in subsection A, paragraph 16 shall be used only for economic development in rural areas, and the electric cooperative shall not use monies intended for rural economic development to purchase or acquire electrical works or electrical facilities, whether real or personal property, or both, by the exercise of the right of eminent domain or condemnation nor shall such monies be used to purchase, construct, lease or acquire any electrical works or electrical facilities or make any extensions or additions designed to serve areas or territories already being lawfully served. In subsection A, paragraph 16 and this subsection:

1. "Economic development" includes project feasibility studies, start-up costs, incubator projects and other reasonable expenses for the purpose of fostering rural economic development.

2. "Invest" means to commit monies in order to earn a financial return on assets which are not expected to be used or useful in furnishing electric service. The total amount which the electric cooperative invests, loans or uses as a guarantee is limited to those monies authorized under federal law for rural development programs.

3. "Job creation activities" includes activities such as providing technical, financial and managerial assistance.

4. "Rural community infrastructure projects" includes projects such as water and waste systems and garbage collection services.

C. BEGINNING ON JANUARY 1, 1999 THE INDEMNIFICATION OF MEMBERS, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF A COOPERATIVE SHALL BE IN ACCORDANCE WITH CHAPTER 31, ARTICLE 5 OF THIS TITLE.

Sec. 5. Section 10-2060, Arizona Revised Statutes, is amended to read:

10-2060 . Members in cooperative

Each incorporator of a cooperative shall be a member thereof OF THE COOPERATIVE , but no other person may become a member unless he THE PERSON agrees to use electric energy or other services furnished by the cooperative when they are made available through its facilities. Any member of a cooperative, other than a member which is itself a cooperative, who agrees to use electric energy ceases to be a member if he does not use electric energy supplied by the cooperative within six months after it is made available to him, or if electric energy is not made available to him by the cooperative within two years after he becomes a member, or such lesser period as the by-laws of the cooperative may provide AS THE COOPERATIVE ESTABLISHES IN ITS BYLAWS . A husband and wife may hold a joint membership in a cooperative. Membership in a cooperative is not transferable, except as provided in the by-laws BYLAWS . The by-laws BYLAWS may prescribe additional qualifications , and limitations , in respect to CLASSIFICATIONS AND RIGHTS CONCERNING membership.

Sec. 6. Section 10-2062, Arizona Revised Statutes, is amended to read:

10-2062 . Annual and special meetings of members; notice; quorum; voting

A. An annual meeting of the members of a cooperative shall be held at such time and place as provided in the by-laws BYLAWS . Special meetings of the members may be called by the president, by the board of directors, by any three directors or by not less than ten per cent of the members.

B. Except as otherwise provided in this article, written or printed notice stating the time and place of each meeting of the members and, in the case of a special meeting, the purpose for which the meeting is called , shall be given to each member, either personally or by mail, not less than ten nor more than twenty-five days before the date of the meeting. If mailed, the notice shall be deemed to be given when deposited in the United States mail with postage prepaid addressed to the member at his THE MEMBER'S address appearing on the records of the cooperative.

C. Unless the by-laws BYLAWS prescribe the presence of a greater percentage or number of the members for a quorum, a quorum for the transaction of business at all meetings of the members of a cooperative having not more than one thousand members shall be five per cent of all members personally present IN PERSON OR BY BALLOT , and of a cooperative having more than one thousand members, shall be fifty members personally present IN PERSON OR BY BALLOT . If less than a quorum is present at any meeting, a majority of those present personally IN PERSON may adjourn the meeting from time to time without further notice.

D. UNLESS THE BYLAWS PROVIDE OTHERWISE, each member shall be entitled to one vote on each matter submitted to a vote at a meeting of the members. Voting shall be in person , but, if the by-laws BYLAWS so provide, may also be by mail OR BY PROXY .

Sec. 7. Section 10-2064, Arizona Revised Statutes, is amended to read:

10-2064 . Bylaws

The board of directors shall adopt the first by-laws BYLAWS of a cooperative to be adopted following incorporation, conversion, merger or consolidation. Thereafter EITHER THE BOARD OF DIRECTORS OR the members shall adopt, MAY amend or repeal the by-laws by the affirmative vote of a majority of those members voting thereon at a meeting of the members BYLAWS . The by-laws BYLAWS shall set forth the rights and duties of members and directors and may contain other provisions for the regulation and management of the affairs of the cooperative not inconsistent with this article or with its articles of incorporation.

Sec. 8. Section 10-2068, Arizona Revised Statutes, is amended to read:

10-2068 . Disposition of property

A. The board of directors of a cooperative may , without authorization by the members thereof, OF THE COOPERATIVE, MAY authorize the execution and delivery of mortgages or deeds of trust pledging or encumbering any or all of the property, assets, rights, privileges, licenses, franchises and permits of the cooperative, whether acquired or to be acquired, and wherever situated, as well as the revenues therefrom, all upon such terms and conditions as the board of directors determines, to secure any indebtedness of the cooperative . to the United States or any agency or instrumentality thereof, or to any person, association or corporation licensed, chartered or regulated by the United States, a state or any department or agency of either. Any such mortgages or deeds of trust shall be exempt from the mortgage recording tax.

B. A cooperative may not otherwise sell, mortgage, lease or otherwise dispose of or encumber all or a substantial portion of its property unless the sale, mortgage, lease or other disposition or encumbrance is authorized by the affirmative vote of not less than a majority of all members of the cooperative, but notwithstanding any other provision of this article, or any other provision of law, the board of directors may, upon the authorization of a majority of those members of the cooperative present at the meeting of the members . thereof, sell, lease or otherwise dispose of all or a substantial portion of its property to another cooperative doing business in this state pursuant to this article, or to the holders of any notes, bonds or other evidences of indebtedness issued to the United States or any agency or instrumentality thereof.

Sec. 9. Repeal

Sections 10-2071 and 10-2072 , Arizona Revised Statutes, are repealed.

Sec. 10. Section 10-2081, Arizona Revised Statutes, is amended to read:

10-2081 . Exemption from antitrust statutes

The provisions of title 44, chapter 10, article 1 shall DO not apply to any conduct or activity of a cooperative organized pursuant to this article, which IF THE conduct or activity is approved by a statute of this state or of the United States or by the corporation commission or an administrative agency of this state or of the United States having THAT HAS jurisdiction of the subject matter. THIS SECTION DOES NOT APPLY TO THE PROVISION OF COMPETITIVE ELECTRIC GENERATION SERVICE AND OTHER SERVICES.

Sec. 11. Section 10-2121, Arizona Revised Statutes, is amended to read:

10-2121 . Definitions

In this article, unless the context otherwise requires:

1. "Electric utility" means any corporation, governmental agency, political subdivision or other entity or combination of such entities which produces, generates, purchases, sells, transmits or distributes electricity to another electric utility or to a user of electricity.

2. "Generation and transmission cooperative" means a corporation organized under this article or which THAT becomes subject to this article as provided in this article.

3. "Person" means a natural person , FIRM, ASSOCIATION, CORPORATION, BUSINESS TRUST OR PARTNERSHIP OR ANY AGENCY OR POLITICAL SUBDIVISION OF THE UNITED STATES OR OF THIS STATE OR ANY OTHER POLITICAL BODY .

Sec. 12. Section 10-2122, Arizona Revised Statutes, is amended to read:

10-2122 . Purpose

Nonprofit electric generation and transmission cooperative corporations may be organized under this article for the purpose of :

1. Producing and generating , PURCHASING, MARKETING OR SELLING electric energy and OR transmitting such energy to other electric utilities OR PERSONS .

2. PROVIDING SERVICES RELATING TO PRODUCING AND GENERATING, PURCHASING, MARKETING OR SELLING ELECTRIC ENERGY OR TRANSMITTING THIS ENERGY TO OTHER ELECTRIC UTILITIES OR PERSONS OR SERVICES RELATING TO ANY OTHER LAWFUL PURPOSE.

Sec. 13. Section 10-2127, Arizona Revised Statutes, is amended to read:

10-2127 . Powers of a generation and transmission cooperative

A. A generation and transmission cooperative may:

1. Sue and be sued and complain and defend in its corporate name.

2. Have perpetual existence by its corporate name.

3. Adopt a corporate seal and alter the seal at its pleasure, and use the seal by causing it, or a facsimile of it, to be impressed or affixed or in any other manner reproduced, but failure to have or to affix a corporate seal does not affect the validity of any instrument or any action taken in pursuance of in reliance on the seal.

4. Own, operate, lease or control plants, property and facilities for the generation or transmission, sale or furnishing of electricity for light, heat or power or other uses, and generate, manufacture, purchase, acquire, accumulate and transmit electric energy , and sell, supply and dispose .

5. TO COMPETE MORE EFFECTIVELY WITH OTHER ENTITIES IN THE ELECTRIC ENERGY MARKET, ENGAGE IN, INDIVIDUALLY OR JOINTLY IN COLLABORATION WITH OTHER CORPORATIONS THAT HAVE LOANS MADE OR GUARANTEED BY THE UNITED STATES THROUGH THE ADMINISTRATOR OF THE RURAL UTILITIES SERVICE OR THAT ARE NONPROFIT MEMBERS OF THE CORPORATION, THE ACQUISITION, PURCHASE, MARKETING, SALE, SUPPLY AND DISPOSITION of electric energy to or for its members , AND PERSONS, ENTITIES, governmental agencies and political subdivisions and other electric utilities.

5. 6. Purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, exercise rights arising out of the ownership or possession, use, employ, sell, assign, transfer, convey, mortgage, lend, pledge, hypothecate or otherwise use and deal in and with shares, rights, memberships or other interests in, or notes, bonds, debentures, mortgages, passbooks, certificates of deposit or other obligations of other domestic or foreign corporations, associations, partnerships, limited partnerships or individuals, or direct or indirect obligations or securities of individuals, associations, cooperatives, partnerships, corporations or of the United States or of any other government, state, territory, governmental district or municipality or of any instrumentality thereof.

6. 7. Construct, purchase, take, receive, lease as lessee or otherwise acquire, and own, hold, improve, use, equip, maintain and operate, and sell, assign, transfer, convey, exchange, lease as lessor, mortgage, pledge or otherwise dispose of or encumber electric transmission lines and systems, electric generating plants, lands, buildings, structures, dams, plants and equipment, and any and all kinds and classes of real or personal property, tangible or intangible, which THAT are deemed necessary, convenient or appropriate to accomplish the purpose for which the generation and transmission cooperative is organized OR THAT IT ELECTS TO UNDERTAKE .

7. 8. Purchase or otherwise acquire, and own, hold, use and exercise and sell, assign, transfer, convey, mortgage, pledge, hypothecate or otherwise dispose of or encumber franchises, rights, privileges, licenses, rights-of-way and easements.

8. 9. Make contracts and guarantees and incur liabilities, borrow money and otherwise contract indebtedness, and issue its notes, bonds and other evidence of indebtedness, and secure the payment of any indebtedness by mortgage, pledge, deed of trust, assignment, security agreement or any other hypothecation or encumbrance on any or all of its real or personal property, assets, franchises, revenue or income.

9. 10. Construct, maintain and operate electric transmission lines along, on, under and across publicly owned lands and public thoroughfares, including all roads, highways, streets, alleys, bridges and causeways, and acquire for such purposes franchises, licenses, permits, easements, rights-of-way, and all similar rights and privileges relating to such purposes.

10. 11. Exercise the power of eminent domain in the manner and to the extent provided by the laws of this state for the exercise of such power by other corporations constructing or operating electric transmission lines or systems.

11. 12. Become a member of other cooperative organizations or corporations or own stock in such OR OTHERWISE FINANCIALLY PARTICIPATE AND INVEST IN THOSE other organizations or corporations.

12. 13. Conduct its business, carry on its operations, have offices and exercise the powers granted it by this article in any state, territory, district or possession of the United States or in any foreign country.

13. 14. Adopt, amend and repeal bylaws consistent with this article.

14. Indemnify any director or officer or former director or officer of the generation and transmission cooperative, or any person who has served at its request as a director or officer of another corporation in which it owns shares of capital stock or in which it holds a membership or of which it is a creditor, against expenses actually and reasonably incurred by him in which he is involved or made a party by reason of being or having been such director or officer, except in relation to matters as to which he is adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of duty to the generation and transmission cooperative or other corporation, and to make any other indemnification that may be authorized by the articles of incorporation or by any bylaw or any resolution adopted by the members after notice.

15. Cease its corporate activities and surrender its corporate franchise.

16. Do and perform other acts and things, and have and exercise other powers, which THAT may be necessary, convenient or appropriate to accomplish the purpose for which the generation and transmission cooperative is organized OR TO CARRY OUT ITS BUSINESS AND AFFAIRS .

B. BEGINNING ON JANUARY 1, 1999 THE INDEMNIFICATION OF MEMBERS, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF A COOPERATIVE SHALL BE IN ACCORDANCE WITH CHAPTER 31, ARTICLE 5 OF THIS TITLE.

Sec. 14. Section 10-2128, Arizona Revised Statutes, is amended to read:

10-2128 . Membership in a generation and transmission cooperative; voting; nonliability

A. Only electric utilities AND OTHER PERSONS AS THE BYLAWS PROVIDE are eligible to be members of a generation and transmission cooperative. All incorporators must SHALL be original members of a generation and transmission cooperative, and new members may be admitted by a majority vote of all voting delegates. The bylaws may prescribe additional qualifications , and limitations AND CLASSIFICATIONS AND RIGHTS concerning membership.

B. The articles of incorporation or the bylaws of a generation and transmission cooperative may provide for classifications of members in a generation and transmission cooperative. Those members who purchase all of their electrical requirements from the generation and transmission cooperative are designated as class A members. Other members who purchase electricity are designated as class B members. The bylaws may provide for other classifications of members.

C. Each class A member is entitled to designate two representatives to serve as voting delegates for that member. Class B members are entitled to designate one representative for every three class B members or fraction of members to serve as a voting delegate for those members. The bylaws may provide for grouping of class B members for such appointment. The number of delegates for which other classifications of members are entitled to designate shall be as stated in the bylaws.

C. THE BYLAWS SHALL PROVIDE THE NUMBER OF VOTING DELEGATES THAT EACH MEMBER MAY DESIGNATE. THE BYLAWS MAY PROVIDE THAT EACH CLASSIFICATION OF MEMBERS MAY DESIGNATE A DIFFERENT NUMBER OF VOTING DELEGATES.

D. Members are entitled to vote as members only through their duly designated voting delegate. A reference in this article to approval or votes by members refers to the members approving or voting through their voting delegates.

E. A member is not liable or responsible for any debts of the generation and transmission cooperative, and the property of the members is not subject to execution for such debts, unless the member otherwise agrees.

Sec. 15. Section 10-2130, Arizona Revised Statutes, is amended to read:

10-2130 . Board of directors; term; compensation; quorum

A. A board of directors shall manage the business of a generation and transmission cooperative. The directors named in the articles of incorporation, consolidation, merger or conversion hold office until the next annual meeting of the members and until their THE DIRECTORS' successors are elected and qualify. At each annual meeting or, in case of failure to hold the annual meeting as specified in the bylaws, at a special meeting called for that purpose, the members, through their voting delegates, shall elect directors to hold office until the next annual meeting of the members, except as otherwise provided in this article. The bylaws may SHALL prescribe the number AND TERMS of directors , but there shall not be less than two directors for every class A member which puts the names of at least two directoral candidates into nomination, or one director for every three class B members or fraction of members AND THE MANNER OF ELECTING THE DIRECTORS . Each director shall hold office for the term for which he THE DIRECTOR is elected and until his THE DIRECTOR'S successor is elected and qualifies.

B. Instead of electing all the directors annually, the bylaws may provide that one-half of them, or a number as near to one-half as possible, are elected to serve until the next annual meeting of the members and that the remaining directors are elected to serve until the second annual meeting. Thereafter, as terms expire, the members, through their voting delegates, shall elect successors to serve until the second succeeding annual meeting after their election.

C. Instead of electing the directors as provided in subsection A or B, the bylaws may also provide that one-third of the directors, or a number as near to one-third as possible, be elected at each annual meeting to serve for a term of three years.

D. B. The bylaws shall prescribe the number of directors as provided in subsection A, their THE DIRECTORS' qualifications other than those prescribed in this article, the manner of holding meetings of the board of directors and of electing successors to directors who resign or die or who are otherwise incapable of acting. The bylaws may also provide for the removal of directors from office and for the election of their THE DIRECTORS' successors.

E. C. UNLESS THE BYLAWS PROVIDE OTHERWISE, THE directors shall not receive salaries for their services as directors and, except in emergencies, shall not be employed by the generation and transmission cooperative in any capacity involving compensation without the approval of the members. The bylaws may , however, prescribe a fixed ALLOW A PAYMENT OF A fee and MAY provide that expenses of attendance are allowed to each director for attendance at each meeting of the board of directors.

F. D. A majority of the board of directors constitutes a quorum.

G. E. Any action which may be taken at a meeting may be taken without a meeting if a writing stating and approving the action taken is signed prior to the action being taken by the number of directors normally required to approve the action at a meeting. This prior consent has the same force and effect as a vote at a meeting.

H. F. The board of directors may exercise all the powers of a cooperative not conferred upon by ON the members by this article, or its articles of incorporation or bylaws.

G. ANY PERSON WHO SERVES AS A DIRECTOR OR WHO SERVES ON A BOARD OR COUNCIL IN AN ADVISORY CAPACITY TO THE COOPERATIVE OR BOARD OF DIRECTORS OF A COOPERATIVE IS IMMUNE FROM CIVIL LIABILITY AND IS NOT SUBJECT TO A SUIT DIRECTLY OR BY WAY OF CONTRIBUTION FOR ANY ACT OR OMISSION THAT RESULTS IN DAMAGE OR INJURY IF THAT PERSON WAS ACTING IN GOOD FAITH AND WITHIN THE SCOPE OF THAT PERSON'S OFFICIAL CAPACITY AND THE DAMAGE OR INJURY WAS NOT CAUSED BY THE WILFUL OR GROSSLY NEGLIGENT CONDUCT OF THAT PERSON. NOTHING IN THIS SUBSECTION LIMITS OR MODIFIES IN ANY MANNER THE DUTIES OR LIABILITIES OF A DIRECTOR OR PERSON WHO SERVES IN AN ADVISORY CAPACITY TO THE COOPERATIVE OR THE COOPERATIVE'S MEMBERS. FOR THE PURPOSES OF THIS SUBSECTION, "OFFICIAL CAPACITY" MEANS ANY DECISION, ACT OR EVENT UNDERTAKEN BY THE COOPERATIVE IN FURTHERANCE OF THE PURPOSES FOR WHICH THAT COOPERATIVE IS ORGANIZED OR OPERATING.

Sec. 16. Section 10-2131, Arizona Revised Statutes, is amended to read:

10-2131 . Officers of a generation and transmission cooperative

The officers of a generation and transmission cooperative consist of a president, vice-president, secretary and treasurer, who are elected annually by and from the board of directors. IF STATED IN THE BYLAWS, THE OFFICERS OF THE COOPERATIVE DO NOT NEED TO BE MEMBERS OF THE BOARD OF DIRECTORS. UNLESS THE BYLAWS PROVIDE OTHERWISE, if a person holding any office ceases to be a director, he THE PERSON ceases to hold the office. The offices of secretary and treasurer may be held by the same person. The board of directors may also elect or appoint such other officers, agents or employees it deems necessary or advisable and shall prescribe their powers and duties. An officer may be removed from office and his THE OFFICER'S successor MAY BE elected in the manner prescribed in the bylaws.

Sec. 17. Section 10-2134, Arizona Revised Statutes, is amended to read:

10-2134 . Disposition of property

A. The board of directors of a generation and transmission cooperative may, without authorization by the members, authorize the execution and delivery of mortgages or deeds of trust pledging or encumbering any or all of the property, assets, rights, privileges, licenses, franchises and permits of the generation and transmission cooperative, whether acquired or to be acquired, and wherever situated, as well as their revenues, all upon terms and conditions as the board of directors determines, to secure any indebtedness of the generation and transmission cooperative . to the United States or any agency or instrumentality of the United States, or to any person, association or corporation licensed, chartered or regulated by the United States, a state, the District of Columbia or any department or agency of the United States, a state or the District of Columbia. Any such mortgages or deeds of trust are exempt from the mortgage recording tax.

B. A generation and transmission cooperative may not otherwise sell, mortgage LEASE or otherwise dispose of or encumber all or a substantial portion of its property unless the sale, mortgage, lease or other disposition or encumbrance is authorized by the affirmative vote of not less than a majority of all members of the generation and transmission cooperative, acting through their voting delegates, but notwithstanding any other provision of this article, or any other statute, the board of directors may, on the authorization of a majority of those members of the generation and transmission cooperative, acting through their voting delegates, present at a meeting of the members . , sell, lease or otherwise dispose of all or a substantial portion of its property to another cooperative doing business in this state pursuant to this article, or to the holders of any notes, bonds or other evidences of indebtedness issued to the United States or any agency or instrumentality of the United States.

Sec. 18. Repeal

Section 10-2137 , Arizona Revised Statutes, is repealed.

Sec. 19. Section 10-2138, Arizona Revised Statutes, is amended to read:

10-2138 . Prohibition of duplication of service

A. A generation and transmission cooperative organized pursuant to this article is expressly prohibited from constructing electric distribution lines and is expressly prohibited from supplying at retail , electric energy directly to any ELECTRIC GENERATION SERVICE IN THE CERTIFICATED SERVICE TERRITORY OF OR TO ANY CORPORATION IN THE CERTIFICATED SERVICE TERRITORY OF OR TO ANY MEMBER OF A MEMBER OWNED NONPROFIT COOPERATIVE CORPORATION UNLESS THE COOPERATIVE HAS THE CONSENT OF THAT CORPORATION. structure, home, well, building, consumer or any member of a member of the generation and transmission cooperative or other retail customer of another electric utility except as otherwise required by statute or regulation. All electric energy supplied or sold by a generation and transmission cooperative shall be supplied or sold consistent with the provisions of section 10-2122.

B. Subject to the provisions and limitations of section 10-2127, this section shall not be interpreted, construed or applied as a prohibition against, or a limitation upon, the power of generation and transmission cooperatives to make acquisitions of electric facilities or to generate, purchase, sell, obtain, dispose of, transfer or otherwise enter into any transaction concerning electricity with an electric utility.

Sec. 20. Title 30, Arizona Revised Statutes, is amended by adding chapter 6, to read:

chapter 6 Electric power competition

article 1. General provisions

30-801 . Definitions

IN THIS CHAPTER, UNLESS THE CONTEXT OTHERWISE REQUIRES:

1. "ANCILLARY SERVICES" MEANS THOSE SERVICES DESIGNATED AS ANCILLARY SERVICES IN FEDERAL ENERGY REGULATORY COMMISSION ORDER 888 ADOPTED IN 1996 INCLUDING THE SERVICES NECESSARY TO SUPPORT THE TRANSMISSION OF ELECTRICITY FROM RESOURCES TO LOADS WHILE MAINTAINING RELIABLE OPERATION OF THE TRANSMISSION SYSTEM IN ACCORDANCE WITH GOOD UTILITY PRACTICE.

2. "APPLIANCE APPLICATION" MEANS CENTRAL SPACE HEATING, CLOTHES DRYING, WATER HEATING AND INDOOR COOKING.

3. "BUNDLED SERVICE" MEANS ELECTRIC SERVICE PROVIDED AS A PACKAGE TO THE CONSUMER INCLUDING ALL GENERATION, TRANSMISSION, DISTRIBUTION, ANCILLARY AND OTHER SERVICES NECESSARY TO DELIVER AND MEASURE USEFUL ELECTRICITY USED BY CONSUMERS.

4. "BUY-THROUGH" MEANS A PURCHASE OF ELECTRICITY BY A PUBLIC POWER ENTITY AT WHOLESALE FOR A PARTICULAR RETAIL CONSUMER OR AGGREGATE OF CONSUMERS OR AT THE DIRECTION OF A PARTICULAR RETAIL CONSUMER OR AGGREGATE OF CONSUMERS.

5. "COMMISSION" MEANS THE ARIZONA CORPORATION COMMISSION.

6. "ELECTRIC DISTRIBUTION FACILITIES" MEANS ALL PROPERTY USED IN CONNECTION WITH THE DISTRIBUTION OF ELECTRICITY FROM AN ELECTRIC GENERATING PLANT TO RETAIL ELECTRIC CUSTOMERS EXCEPT ELECTRIC TRANSMISSION FACILITIES.

7. "ELECTRIC DISTRIBUTION SERVICE" MEANS THE DISTRIBUTION OF ELECTRICITY TO RETAIL ELECTRIC CUSTOMERS THROUGH THE USE OF ELECTRIC DISTRIBUTION FACILITIES.

8. "ELECTRIC DISTRIBUTION UTILITY" MEANS A PUBLIC SERVICE CORPORATION OR PUBLIC POWER ENTITY THAT OPERATES, CONTROLS OR MAINTAINS ELECTRIC DISTRIBUTION FACILITIES.

9. "ELECTRIC GENERATION PLANT" MEANS ALL PROPERTY USED IN CONNECTION WITH THE GENERATION FOR SALE OF ELECTRICITY TO RETAIL ELECTRIC CUSTOMERS BUT EXCLUDING ANY SERVICES PROVIDED BY ELECTRIC TRANSMISSION FACILITIES OR ELECTRIC DISTRIBUTION FACILITIES.

10. "ELECTRIC GENERATION SERVICE" MEANS THE PROVISION OF ELECTRICITY FOR SALE TO RETAIL ELECTRIC CUSTOMERS BUT DOES NOT INCLUDE ELECTRIC DISTRIBUTION OR TRANSMISSION SERVICE OR GENERATION THAT IS NECESSARY FOR THE RELIABLE OPERATION OF THE ELECTRIC DISTRIBUTION OR TRANSMISSION SYSTEM.

11. "ELECTRIC TRANSMISSION FACILITIES" MEANS ALL PROPERTY SO CLASSIFIED BY THE FEDERAL ENERGY REGULATORY COMMISSION, OR TO THE EXTENT PERMITTED BY LAW, SO CLASSIFIED BY THE ARIZONA CORPORATION COMMISSION.

12. "ELECTRIC TRANSMISSION SERVICE" MEANS THE TRANSMISSION OF ELECTRICITY TO RETAIL ELECTRIC CUSTOMERS OR TO ELECTRIC DISTRIBUTION FACILITIES AND THAT IS SO CLASSIFIED BY THE FEDERAL ENERGY REGULATORY COMMISSION OR, TO THE EXTENT PERMITTED BY LAW, SO CLASSIFIED BY THE ARIZONA CORPORATION COMMISSION.

13. "ELECTRICITY" MEANS ELECTRIC ENERGY, ELECTRIC CAPACITY OR ELECTRIC CAPACITY AND ENERGY.

14. "ELECTRICITY SUPPLIER" MEANS A PERSON, WHETHER ACTING IN A PRINCIPAL, AGENT OR OTHER CAPACITY, THAT OFFERS TO SELL ELECTRICITY TO A RETAIL ELECTRIC CUSTOMER IN THIS STATE.

15. "OTHER SERVICES" MEANS METERING, METER READING, BILLING AND COLLECTING SERVICES.

16. "PUBLIC POWER ENTITY":

(a) MEANS ANY MUNICIPAL CORPORATION, CITY, TOWN OR OTHER POLITICAL SUBDIVISION THAT IS ORGANIZED UNDER STATE LAW, THAT GENERATES, TRANSMITS, DISTRIBUTES OR OTHERWISE PROVIDES ELECTRICITY AND THAT IS NOT A PUBLIC SERVICE CORPORATION.

(b) DOES NOT INCLUDE:

(i) A CITY OR TOWN WITH A POPULATION OF LESS THAN SEVENTY-FIVE THOUSAND PERSONS ACCORDING TO THE MOST RECENT UNITED STATES DECENNIAL CENSUS THAT DOES NOT ELECT BY OFFICIAL ACTION TO SELL ELECTRIC GENERATION SERVICE IN THE SERVICE TERRITORY OF ANOTHER ELECTRICITY SUPPLIER.

(ii) A POWER DISTRICT, ELECTRICAL DISTRICT, IRRIGATION AND WATER CONSERVATION DISTRICT OR MULTI-COUNTY WATER CONSERVATION DISTRICT ESTABLISHED PURSUANT TO TITLE 48, CHAPTER 11, 12, 19 OR 22.

(iii) THE ARIZONA POWER AUTHORITY.

(iv) A CITY OR TOWN WITH A POPULATION OF SEVENTY-FIVE THOUSAND PERSONS OR GREATER ACCORDING TO THE MOST RECENT UNITED STATES DECENNIAL CENSUS THAT ELECTS BY OFFICIAL ACTION NOT TO SELL ELECTRIC GENERATION SERVICE IN THE SERVICE TERRITORY OF ANOTHER ELECTRICITY SUPPLIER.

17. "RETAIL ELECTRIC CUSTOMER" MEANS A PERSON THAT PURCHASES ELECTRICITY FOR THAT PERSON'S OWN USE, INCLUDING USE IN THAT PERSON'S TRADE OR BUSINESS, AND NOT FOR RESALE, REDISTRIBUTION OR RETRANSMISSION.

18. "SERVICE TERRITORY" MEANS THE GEOGRAPHIC AREA IN WHICH A PUBLIC POWER ENTITY OR PUBLIC SERVICE CORPORATION OWNS, OPERATES, CONTROLS OR MAINTAINS EITHER ELECTRIC DISTRIBUTION FACILITIES OR NATURAL GAS DISTRIBUTION FACILITIES AND THAT ADDITIONAL AREA IN WHICH THE PUBLIC POWER ENTITY OR PUBLIC SERVICE CORPORATION HAS AGREED TO EXTEND ELECTRIC DISTRIBUTION FACILITIES OR NATURAL GAS DISTRIBUTION FACILITIES, WHETHER ESTABLISHED BY A CERTIFICATE OF CONVENIENCE AND NECESSITY, BY OFFICIAL ACTION BY A PUBLIC POWER ENTITY OR BY CONTRACT OR AGREEMENT.

30-802 . Electric competition; terms and conditions; determination; public notice

A. PUBLIC POWER ENTITIES SHALL DETERMINE TERMS AND CONDITIONS FOR COMPETITION IN THE RETAIL SALE OF ELECTRIC GENERATION SERVICE CONSISTENT WITH THE PROVISIONS OF THIS CHAPTER. PUBLIC POWER ENTITIES AND THE COMMISSION SHALL COORDINATE THEIR EFFORTS IN THE TRANSITION TO COMPETITION IN ELECTRIC GENERATION SERVICE TO PROMOTE CONSISTENT STATEWIDE APPLICATION OF THEIR RESPECTIVE RULES, PROCEDURES AND ORDERS.

B. WHEN DETERMINING TERMS AND CONDITIONS FOR CUSTOMER SELECTION, COMPLAINT RESOLUTION, CONSUMER PROTECTION, STRANDED COSTS, DISTRIBUTION SERVICE RATES AND CHARGES, SYSTEM BENEFIT CHARGES, AND OTHER RELATED MATTERS AS DETERMINED IN THE REASONABLE DISCRETION OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY, THE GOVERNING BODY OF THE PUBLIC POWER ENTITY SHALL AT A MINIMUM:

1. PROVIDE PUBLIC NOTICE OF PROPOSED TERMS AND CONDITIONS STATING THAT:

(a) THE PUBLIC POWER ENTITY IS ADOPTING TERMS AND CONDITIONS FOR COMPETITION IN THE RETAIL SALE OF ELECTRIC GENERATION SERVICE.

(b) THE INFORMATION IN PARAGRAPH 2 OF THIS SUBSECTION SHALL BE AVAILABLE FOR INSPECTION.

(c) THE GOVERNING BODY OF THE PUBLIC POWER ENTITY SHALL HOLD A SPECIAL MEETING AS REQUIRED BY PARAGRAPH 3 OF THIS SECTION AND SHALL INCLUDE A STATEMENT PROVIDING THE DATE, TIME AND PLACE OF THE MEETING.

2. PROVIDE THAT FOR A PERIOD BEGINNING WITH THE PUBLIC NOTICE AND UNTIL TEN DAYS AFTER THE CLOSE OF THE MEETING PRESCRIBED IN PARAGRAPH 3 OF THIS SECTION, THE PUBLIC POWER ENTITY SHALL MAKE AVAILABLE TO INTERESTED PARTIES AT ITS MAIN OFFICE PERTINENT INFORMATION, INCLUDING:

(a) MANAGEMENT'S RECOMMENDATIONS FOR PROPOSED TERMS AND CONDITIONS.

(b) RELEVANT FINANCIAL AND OTHER INFORMATION ON WHICH THE MANAGEMENT PROPOSAL IS BASED. THE PUBLIC POWER ENTITY SHALL TIMELY SUPPLEMENT THE INFORMATION THAT IS REASONABLY REQUESTED BY ANY INTERESTED PERSON AND SHALL ANSWER REASONABLE QUESTIONS POSED BY ANY INTERESTED PERSON.

(c) CURRENT TERMS AND CONDITIONS, IF ANY.

(d) REPORTS OF CONSULTANTS, IF ANY.

3. PROVIDE THAT INTERESTED PERSONS MAY FILE WRITTEN COMMENTS WITH THE PUBLIC POWER ENTITY AT ANY TIME DURING THE PERIOD PRESCRIBED IN PARAGRAPH 2 OF THIS SUBSECTION. A MEETING OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY SHALL BE HELD NO EARLIER THAN THIRTY DAYS AND NO LATER THAN NINETY DAYS AFTER THE PUBLIC NOTICE REFERRED TO IN PARAGRAPH 2 OF THIS SUBSECTION. AT THE MEETING, THE GOVERNING BODY OF THE PUBLIC POWER ENTITY SHALL:

(a) AFFORD REPRESENTATIVES OF MANAGEMENT OF THE PUBLIC POWER ENTITY AN OPPORTUNITY TO EXPLAIN THE PROPOSED TERMS AND CONDITIONS AND THE CRITERIA FOR THE TERMS AND CONDITIONS AND ANSWER QUESTIONS.

(b) AFFORD ANY CONSULTANTS RETAINED BY THE PUBLIC POWER ENTITIES AN OPPORTUNITY TO COMMENT ON THE PROPOSED TERMS AND CONDITIONS.

(c) AFFORD INTERESTED PERSONS A REASONABLE OPPORTUNITY TO SUBMIT WRITTEN COMMENTS AND QUESTIONS OR MAKE ORAL PRESENTATIONS OF VIEWS, COMMENTS AND QUESTIONS.

4. FOLLOWING REVIEW OF THE INFORMATION AND COMMENTS GATHERED IN THE COURSE OF THE PROCEDURES DESCRIBED IN PARAGRAPH 3 OF THIS SUBSECTION THE GOVERNING BODY OF THE PUBLIC POWER ENTITY SHALL MAKE ITS DECISION ON THE PROPOSED TERMS AND CONDITIONS.

C. ALL FINAL DECISIONS OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY REGARDING TERMS AND CONDITIONS FOR CUSTOMER SELECTION, COMPLAINT RESOLUTION, CONSUMER PROTECTION, STRANDED COSTS, TRANSMISSION AND DISTRIBUTION SERVICE RATES AND CHARGES, SYSTEM BENEFIT CHARGES AND OTHER RELATED MATTERS AS DETERMINED IN THE REASONABLE DISCRETION OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY SHALL:

1. BE IN WRITING.

2. STATE THE FACTUAL AND LEGAL BASIS FOR THE DECISION.

3. STATE THE EFFECTIVE DATE OF THE DECISION, IF ANY.

30-803 . Competition in retail supply of electricity; open markets

A. PUBLIC POWER ENTITIES MAY PARTICIPATE IN RETAIL ELECTRIC COMPETITION STATEWIDE AND SHALL OPEN THE SERVICE TERRITORY CURRENTLY SERVED BY THEM TO COMPETITION IN THE SALE OF ELECTRIC GENERATION SERVICE NOT LATER THAN DECEMBER 31, 1998 FOR AT LEAST TWENTY PER CENT OF THE 1995 RETAIL LOAD AT LEAST FIFTEEN PER CENT OF WHICH SHALL BE RESERVED FOR CUSTOMERS IN THE RESIDENTIAL CUSTOMER CLASS AND SHALL OPEN THEIR ENTIRE SERVICE TERRITORY TO COMPETITION NOT LATER THAN DECEMBER 31, 2000 TO ELECTRICITY SUPPLIERS CERTIFICATED BY THE COMMISSION PURSUANT TO SECTION 40-207 AND TO PROVIDERS OF OTHER SERVICES.

B. PUBLIC POWER ENTITIES SHALL MAINTAIN THEIR EXISTING SERVICE TERRITORIES FOR ELECTRIC DISTRIBUTION SERVICE. PUBLIC POWER ENTITIES SHALL NOT PROVIDE ELECTRIC DISTRIBUTION SERVICES IN THE SERVICE TERRITORIES OF OTHER ELECTRIC DISTRIBUTION UTILITIES IN THIS STATE.

C. ELECTRIC DISTRIBUTION UTILITIES SHALL CONTINUE TO PROVIDE OTHER SERVICES FOR THE SERVICE TERRITORIES THEY SERVE AS FOLLOWS:

1. BEGINNING ON DECEMBER 31, 1998 THROUGH DECEMBER 31, 2000, BILLING AND COLLECTION 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 COLLECTION SERVICES FOR COMPETITIVE ELECTRIC GENERATION SERVICES SHALL BE PROVIDED ON A COMPETITIVE BASIS FOR ALL RETAIL ELECTRIC CUSTOMERS THAT HAVE COMPETITIVE ELECTRIC GENERATION SERVICE.

2. 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.

3. BEGINNING ON 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.

D. PUBLIC POWER ENTITIES SHALL PROVIDE FOR BUY-THROUGH SERVICE TO ANY ELECTRIC CONSUMER ON REQUEST AT NO ADDITIONAL CHARGE OTHER THAN CHARGES FOR REQUIRED TRANSMISSION, DISTRIBUTION OR ANCILLARY SERVICES FROM AND AFTER JANUARY 1, 2001.

E. PUBLIC POWER ENTITIES SHALL ALLOW THE AGGREGATION OF LOADS BY MULTIPLE CUSTOMERS.

F. THE GOVERNING BODY OF A PUBLIC POWER ENTITY SHALL ADOPT A CODE OF CONDUCT TO PREVENT ANTICOMPETITIVE ACTIVITIES THAT MAY RESULT FROM THE PUBLIC POWER ENTITY PROVIDING BOTH COMPETITIVE AND NONCOMPETITIVE SERVICES TO RETAIL ELECTRIC CUSTOMERS. THE CODE OF CONDUCT SHALL ADDRESS AT LEAST THE FOLLOWING ISSUES:

1. POLICIES FOR ALLOCATING COSTS BETWEEN NONCOMPETITIVE AND COMPETITIVE ACTIVITIES TO AVOID CROSS-SUBSIDIZATION.

2. POLICIES TO PREVENT EMPLOYEES PROVIDING NONCOMPETITIVE SERVICES FROM DIRECTING RETAIL ELECTRIC CUSTOMERS TO THE PUBLIC POWER ENTITY'S COMPETITIVE SERVICES.

3. POLICIES TO PREVENT EMPLOYEES FROM TRANSFERRING PROPRIETARY INFORMATION GAINED IN THE PERFORMANCE OF NONCOMPETITIVE SERVICES TO EMPLOYEES ENGAGED IN PERFORMING COMPETITIVE SERVICES WITHOUT THE CONSENT OF THE RETAIL ELECTRIC CUSTOMER.

4. POLICIES TO PROVIDE RETAIL ELECTRIC CUSTOMERS WITH COMPLETE AND ACCURATE DISCLOSURE OF WHICH SERVICES ARE COMPETITIVE AND WHICH SERVICES ARE NONCOMPETITIVE.

5. POLICIES TO PROHIBIT PREFERENTIAL TREATMENT WHEN PROVIDING NONCOMPETITIVE SERVICES BASED ON A RETAIL ELECTRIC CUSTOMER'S PROVIDER OF COMPETITIVE SERVICES.

G. THE GOVERNING BODY OF A PUBLIC POWER ENTITY SHALL HAVE AN ANNUAL INDEPENDENT AUDIT PERFORMED TO ENSURE COMPLIANCE WITH THE PROCESS AND PROCEDURES ESTABLISHED IN THE CODE OF CONDUCT PURSUANT TO SUBSECTION F OF THIS SECTION. THE RESULTS OF THE AUDIT SHALL BE MADE AVAILABLE TO THE PUBLIC.

H. THE GOVERNING BODY OF A PUBLIC POWER ENTITY SHALL PROVIDE A DISPUTE RESOLUTION PROCESS INCLUDING NONBINDING THIRD PARTY ARBITRATORS OR MEDIATORS FOR CUSTOMERS AND INTERESTED PARTIES FILING A COMPLAINT REGARDING ACTIVITIES THAT ARE GOVERNED BY THE POLICIES ESTABLISHED PURSUANT TO SUBSECTION F OF THIS SECTION. KNOWINGLY AND INTENTIONALLY VIOLATING THE PROVISIONS OF THIS SECTION SHALL RESULT IN THE SAME CIVIL PENALTIES THAT APPLY TO PUBLIC SERVICE CORPORATIONS FOR SIMILAR VIOLATIONS.

I. THE PROVISIONS OF SUBSECTION B OF THIS SECTION AND THE ADVISABILITY OF THE EXCLUSIONS IN SECTION 30-801, PARAGRAPH 16, SUBDIVISION (b), ITEM (iv) ARE SUBJECT TO LEGISLATIVE REVIEW IN 2008. THE REVIEW SHALL INCLUDE RECOMMENDATIONS ON WHETHER PUBLIC POWER ENTITIES SHOULD RETAIN THEIR THEN EXISTING DISTRIBUTION SERVICE TERRITORIES.

30-804 . Distribution service areas; alteration

THIS CHAPTER DOES NOT ALTER THE EXISTING SYSTEM OF DETERMINING ELECTRIC DISTRIBUTION SERVICE TERRITORIES THROUGH CERTIFICATES OF CONVENIENCE AND NECESSITY, OFFICIAL ACTIONS OF PUBLIC POWER ENTITIES OR CONTRACTS OR AGREEMENTS AMONG ELECTRIC DISTRIBUTION UTILITIES OR THE MANNER OF SETTING AND REGULATING ELECTRIC DISTRIBUTION SERVICE PRICES.

30-805 . Distribution prices; conditions

A. PUBLIC POWER ENTITIES SHALL:

1. ESTABLISH UNBUNDLED ANCILLARY ELECTRIC TRANSMISSION AND DISTRIBUTION AND OTHER SERVICE PRICES AND TERMS AND CONDITIONS THAT ARE NONDISCRIMINATORY AND THAT REFLECT THE JUST AND REASONABLE PRICE FOR PROVIDING THE SERVICE. EXCEPT AS PROVIDED IN PARAGRAPH 3, PUBLIC POWER ENTITIES SHALL NOT CONSIDER THE PROFITS OR LOSSES ASSOCIATED WITH ELECTRIC GENERATION SERVICE IN ESTABLISHING ELECTRIC DISTRIBUTION SERVICE PRICES.

2. ADOPT REASONABLE TERMS AND CONDITIONS GOVERNING THE ELECTRIC DISTRIBUTION UTILITY'S OBLIGATION TO PROVIDE ELECTRIC DISTRIBUTION AND OTHER SERVICES.

3. ESTABLISH A TEMPORARY SURCHARGE ON ELECTRIC DISTRIBUTION SERVICE PRICES TO PAY FOR ALL OR A PORTION OF THE UNMITIGATED STRANDED COSTS OF ELECTRIC GENERATION SERVICE, IF ANY, THAT WERE INCURRED AS A DIRECT RESULT OF COMPETITION AMONG ELECTRICITY SUPPLIERS, THAT WERE INCURRED BY PUBLIC POWER ENTITIES TO SERVE THEIR CUSTOMERS IN THIS STATE BEFORE DECEMBER 26, 1996 AND THAT MAY NOT BE RECOVERABLE IN A COMPETITIVE ELECTRIC GENERATION SERVICE MARKET. UNMITIGATED STRANDED COSTS MAY INCLUDE EMPLOYEE SEVERANCE COSTS NECESSITATED BY ELECTRIC COMPETITION INCLUDING UNEMPLOYMENT COMPENSATION, TRAINING AND SEVERANCE BENEFITS. A PUBLIC POWER ENTITY'S STRANDED COST RECOVERY SHALL BE DETERMINED BASED ON THE CONSIDERATION OF AT LEAST THE FOLLOWING FACTORS:

(a) THE IMPACT OF STRANDED COST RECOVERY ON THE EFFECTIVENESS OF COMPETITION.

(b) THE IMPACT OF STRANDED COST RECOVERY ON CUSTOMERS OF A PUBLIC POWER ENTITY WHO DO NOT PARTICIPATE IN THE COMPETITIVE MARKET.

(c) THE IMPACT, IF ANY, ON THE PUBLIC POWER ENTITY'S ABILITY TO MEET DEBT OBLIGATIONS.

(d) THE IMPACT OF STRANDED COST RECOVERY ON PRICES PAID BY CONSUMERS WHO PARTICIPATE IN THE COMPETITIVE MARKET.

(e) THE DEGREE TO WHICH THE PUBLIC POWER ENTITY HAS MITIGATED OR OFFSET STRANDED COSTS AND THE COSTS ASSOCIATED WITH MITIGATING STRANDED COSTS.

(f) THE DEGREE TO WHICH SOME ASSETS HAVE VALUES IN EXCESS OF THEIR BOOK VALUES.

(g) APPROPRIATE TREATMENT OF NEGATIVE STRANDED COSTS.

(h) THE TIME PERIOD DURING WHICH THESE STRANDED COST CHARGES MAY BE RECOVERED. THE GOVERNING BODY OF THE PUBLIC POWER ENTITY SHALL LIMIT THE APPLICATION OF THESE CHARGES TO A SPECIFIED TIME PERIOD.

(i) THE EASE OF DETERMINING THE AMOUNT OF STRANDED COSTS.

(j) THE APPLICABILITY OF STRANDED COSTS TO INTERRUPTIBLE CUSTOMERS.

(k) THE AMOUNT OF ELECTRICITY GENERATED BY RENEWABLE GENERATING RESOURCES OWNED BY THE PUBLIC POWER ENTITY.

(l) ALLOWANCES THAT HAVE BEEN PROVIDED FOR THE RECOVERY OF STRANDED COSTS TO OTHER ELECTRICITY SUPPLIERS IN THIS STATE INCLUDING WHETHER ONE HUNDRED PER CENT OF REGULATORY ASSETS ARE RECOVERED THROUGH THE STRANDED COST SURCHARGE.

B. THE IMPOSITION OF A TEMPORARY SURCHARGE ON ELECTRIC DISTRIBUTION SERVICE PRICES PURSUANT TO SUBSECTION A, PARAGRAPH 3 SHALL NOT CAUSE THE RATES FOR STANDARD OFFER SERVICE TO EXCEED THE RATES THAT WERE IN EFFECT ON DECEMBER 30, 1998. THE SURCHARGE SHALL NOT CONTINUE PAST DECEMBER 31, 2004.

C. UNMITIGATED STRANDED COSTS SHALL BE ALLOCATED AMONG CUSTOMER CLASSES IN A MANNER CONSISTENT WITH THE SPECIFIC PUBLIC POWER ENTITY'S CURRENT RATE TREATMENT OF THE STRANDED ASSET, IN ORDER TO EFFECT A RECOVERY OF UNMITIGATED STRANDED COSTS THAT IS IN SUBSTANTIALLY THE SAME PROPORTION AS THE RECOVERY OF SIMILAR COSTS FROM CUSTOMERS OR CUSTOMER CLASSES UNDER CURRENT RATES.

D. ANY REDUCTION IN ELECTRICITY PURCHASES FROM A PUBLIC POWER ENTITY RESULTING FROM SELF-GENERATION, DEMAND SIDE MANAGEMENT OR OTHER DEMAND REDUCTION ATTRIBUTABLE TO ANY CAUSE OTHER THAN THE RETAIL ACCESS PROVISIONS OF THIS CHAPTER SHALL NOT BE USED TO CALCULATE OR RECOVER ANY STRANDED COST FROM A CUSTOMER.

E. PUBLIC POWER ENTITIES SHALL ALLOW ANY PROVIDER OF ELECTRIC GENERATION SERVICE ACCESS TO THE ELECTRIC POWER TRANSMISSION AND DISTRIBUTION FACILITIES OF PUBLIC POWER ENTITIES UNDER RATES AND TERMS AND CONDITIONS OF SERVICE THAT ARE NONDISCRIMINATORY, COST BASED, JUST AND REASONABLE AND COMPARABLE TO THE RATES CHARGED FOR THE PUBLIC POWER ENTITY'S OWN USE OF THE SAME FACILITIES.

F. THE PUBLIC POWER ENTITY SHALL PARTICIPATE IN AND SUPPORT AN INDEPENDENT SYSTEM OPERATOR, AN INDEPENDENT SYSTEM ADMINISTRATOR OR OTHER EFFORTS TO COORDINATE SCHEDULING OF GENERATION OR TRANSMISSION WITHIN THE STATE OR REGION.

G. THE PUBLIC POWER ENTITY SHALL REDUCE THE PRICE FOR BUNDLED SERVICE FOR ELECTRIC RETAIL CUSTOMERS WHO ARE UNABLE TO CHOOSE COMPETITIVE ELECTRIC GENERATION BY AT LEAST TEN PER CENT OVER A MAXIMUM OF A TEN YEAR PERIOD. THE TEN YEAR PERIOD SHALL BEGIN ON ANY DATE BETWEEN JANUARY 1, 1991 AND THE EFFECTIVE DATE OF THIS CHAPTER. EACH PUBLIC POWER ENTITY SHALL REPORT ITS BEGINNING EFFECTIVE DATE FOR THE TEN YEAR PERIOD AND THE PROPOSED APPORTIONMENT AMONG ITS CUSTOMER CLASSES TO THE JOINT LEGISLATIVE BUDGET COMMITTEE BY DECEMBER 31, 1998.

30-806. Consumer protection; rules; confidentiality; unlawful practice

A. PUBLIC POWER ENTITIES SHALL ADOPT RULES AND PROCEDURES TO PROTECT THE PUBLIC AGAINST DECEPTIVE, UNFAIR AND ABUSIVE BUSINESS PRACTICES. PUBLIC POWER ENTITIES AND THE COMMISSION SHALL COORDINATE THEIR RESPECTIVE RULES AND PROCEDURES TO PROMOTE CONSISTENT IMPLEMENTATION STATEWIDE. THE RULES AND PROCEDURES ADOPTED BY PUBLIC POWER ENTITIES SHALL ADDRESS AT LEAST:

1. DECEPTIVE, UNFAIR AND ABUSIVE BUSINESS PRACTICES INCLUDING DEPOSIT REQUIREMENTS AND RECONNECTION FEES.

2. INTRUSIVE AND ABUSIVE MARKETING PRACTICES.

3. DECEPTIVE OR UNTRUE ADVERTISING PRACTICES.

4. PROVIDING AN OMBUDSMAN OFFICE TO INVESTIGATE COMPLAINTS REGARDING THE SUBSIDIZATION OF COMPETITIVE SERVICES BY ANY PRICE OR CHARGE FOR NONCOMPETITIVE ELECTRIC SERVICE.

5. PRACTICES PROHIBITED UNDER SECTION 30-809, SUBSECTION C.

6. IF A PUBLIC POWER ENTITY FORMS AN AFFILIATE FOR THE PURPOSES OF PROVIDING SERVICES THAT REQUIRE A LICENSED CONTRACTOR OR HAS EMPLOYEES PERFORM THESE SERVICES, INCLUDING ELECTRICAL, HEATING, VENTILATION, AIR CONDITIONING, PLUMBING OR CONSTRUCTION SERVICES, THE PUBLIC POWER ENTITY SHALL NOT ADVERTISE THESE SERVICES IN THEIR BILLING STATEMENT OR IN OTHER MAILINGS DONE BY THE ELECTRIC DISTRIBUTION UTILITY.

B. THE RULES ALSO SHALL REQUIRE A SEPARATE AUTHORIZATION PURSUANT TO SUBSECTION C OF THIS SECTION 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.

C. A SEPARATE WRITTEN AND DATED AUTHORIZATION FROM THE RETAIL ELECTRIC CUSTOMER IS REQUIRED FOR A CHANGE IN A RETAIL ELECTRICITY SUPPLIER SUBJECT TO THE FOLLOWING:

1. THE AUTHORIZATION SHALL NOT CONTAIN ANY INDUCEMENTS.

2. 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.

3. THE AUTHORIZATION SHALL NOT STATE OR SUGGEST THAT THE CUSTOMER TAKE ACTION TO RETAIN THE CUSTOMER'S CURRENT ELECTRICITY SUPPLIER.

4. AN ELECTRICITY SUPPLIER THAT SUBMITS OR EXECUTES A CHANGE IN A RETAIL ELECTRICITY CUSTOMER'S ELECTRICITY SUPPLIER IN VIOLATION OF THIS SUBSECTION 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.

5. THE AUTHORIZATION SHALL BE IN THE SAME LANGUAGE AS ANY PROMOTIONAL OR INDUCEMENT MATERIALS PROVIDED TO THE RETAIL ELECTRIC CUSTOMER.

6. 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 THEIR ELECTRICITY SUPPLIER OR TO SUBSCRIBE TO OTHER SERVICES.

D. NOTWITHSTANDING ANY OTHER LAW, CUSTOMER INFORMATION, ACCOUNT INFORMATION AND RELATED PROPRIETARY INFORMATION ARE CONFIDENTIAL UNLESS SPECIFICALLY WAIVED BY THE CUSTOMER IN WRITING. PUBLIC POWER ENTITIES AND ELECTRICITY SUPPLIERS AND PROVIDERS OF OTHER SERVICES SHALL ADOPT REASONABLE RULES AND PROCEDURES TO ENSURE CONFIDENTIALITY.

E. IF A PUBLIC POWER ENTITY EMPLOYS THE SERVICES OF A CONTRACTOR FOR INTERIOR HOUSEHOLD ENERGY SERVICE, EITHER DIRECTLY OR THROUGH ANY AFFILIATE, THE CONTRACTOR AND ANY SUBCONTRACTORS SHALL 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 SUBSECTION, "CONTRACTOR" HAS THE SAME MEANING AS IN SECTION 32-1101.

F. A PUBLIC POWER ENTITY THAT HAS A SERVICE TERRITORY IN THIS STATE THROUGH CERTIFICATES OF CONVENIENCE AND NECESSITY, RESOLUTIONS OF PUBLIC POWER ENTITIES OR CONTRACTS OR AGREEMENTS AMONG UTILITIES SHALL ACT AS THE SUPPLIER OF LAST RESORT FOR ELECTRIC GENERATION SERVICE FOR EVERY RETAIL ELECTRIC CUSTOMER WITHIN ITS 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. PUBLIC POWER ENTITIES THAT PROVIDE ELECTRIC DISTRIBUTION SERVICES ARE ENTITLED TO RECOVER JUST AND REASONABLE COSTS FOR SUPPLYING ELECTRIC GENERATION SERVICE UNDER THIS SUBSECTION THROUGH A DISTRIBUTION CHARGE ON RETAIL CUSTOMERS WHOSE ANNUAL USAGE IS ONE HUNDRED THOUSAND KILOWATT HOURS OR LESS. PUBLIC POWER ENTITIES AND THE COMMISSION SHALL COORDINATE THEIR RESPECTIVE RULES AND PROCEDURES TO PROVIDE STATEWIDE UNIFORMITY.

G. THE PROVISIONS OF SUBSECTION F OF THIS SECTION ARE SUBJECT TO LEGISLATIVE REVIEW BY THE AUDITOR GENERAL IN 2008. THE REVIEW SHALL INCLUDE RECOMMENDATIONS ON WHETHER ELECTRIC DISTRIBUTION UTILITIES SHALL REMAIN THE PROVIDER OF LAST RESORT OR IF OTHER ELECTRICITY SUPPLIERS SHOULD BID TO BE THE PROVIDER OF LAST RESORT.

H. FAILURE OF A PUBLIC POWER ENTITY TO COMPLY WITH THE RULES ADOPTED PURSUANT TO SUBSECTIONS A AND B OF THIS SECTION OR THE PROCEDURES LISTED IN SUBSECTION 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.

30-807 . Consumer outreach and education

A. PUBLIC POWER ENTITIES SHALL BE RESPONSIBLE FOR ENSURING AND OVERSEEING A COMPREHENSIVE PUBLIC EDUCATION PROGRAM REGARDING ELECTRIC GENERATION SERVICE COMPETITION. PUBLIC POWER ENTITIES AND THE COMMISSION SHALL COORDINATE THEIR RESPECTIVE RULES AND PROCEDURES FOR PUBLIC EDUCATION PROGRAMS TO PROMOTE CONSISTENT IMPLEMENTATION STATEWIDE. THE PROGRAM SHALL BE DESIGNED TO DO THE FOLLOWING:

1. EDUCATE RETAIL ELECTRIC CUSTOMERS ABOUT THE CHANGES IN THE ELECTRIC INDUSTRY.

2. PROVIDE RETAIL ELECTRIC CUSTOMERS WITH ACCURATE AND UNBIASED INFORMATION SO THAT RETAIL ELECTRIC CUSTOMERS MAY MAKE INFORMED CHOICES WHEN PARTICIPATING IN THE COMPETITIVE ELECTRIC GENERATION SERVICE MARKET.

3. ENCOURAGE PUBLIC PARTICIPATION IN THE DECISION MAKING PROCESS RELATING TO ESTABLISHING A COMPETITIVE ELECTRIC INDUSTRY.

B. PUBLIC POWER ENTITIES SHALL WORK WITH INTERESTED PARTIES INCLUDING COMMUNITY BASED CONSUMER ADVOCATE ORGANIZATIONS TO DEVELOP AND IMPLEMENT AN OUTREACH AND EDUCATION PLAN. THIS PLAN SHALL INCLUDE:

1. THE DISSEMINATION OF INFORMATION BY MEANS OF INTERACTIVE APPROACHES, AS WELL AS BROCHURES OR OTHER WRITTEN MATERIALS AND A VARIETY OF MASS MEDIA OUTLETS.

2. AN EXPLANATION IN CLEAR AND PLAIN LANGUAGE OF THE BASIC CONCEPTS OF COMPETITIVE ELECTRIC GENERATION SERVICE INCLUDING THE FOLLOWING ISSUES:

(a) THE EFFECTS OF COMPETITIVE ELECTRIC GENERATION SERVICE ON RETAIL ELECTRIC CUSTOMERS AND CONSUMER PROGRAMS.

(b) THE BASIC RESPONSIBILITIES AND RISKS RETAIL ELECTRIC CUSTOMERS ASSUME WITH COMPETITIVE ELECTRIC GENERATION SERVICE.

(c) THE BASIC CRITERIA FOR SELECTING A RETAIL ELECTRICITY SUPPLIER OR PROVIDER OF OTHER SERVICES.

(d) WHERE THE RETAIL ELECTRIC CUSTOMER CAN FIND INFORMATION ON CONSUMER PROTECTION, CUSTOMER COMPLAINTS AND DISPUTE RESOLUTION PROGRAMS.

(e) THE RESOURCES AVAILABLE FOR ADDITIONAL INFORMATION INCLUDING LISTING A TOLL FREE TELEPHONE NUMBER.

3. PUBLICIZED PUBLIC FORUMS CONDUCTED IN SEVERAL GEOGRAPHICAL AREAS OF THIS STATE TO OBTAIN PUBLIC INPUT AND PROVIDE OPPORTUNITIES FOR EXCHANGE OF QUESTIONS AND ANSWERS.

4. TARGETED EFFORTS TO REACH RURAL, LOW INCOME, ELDERLY, NONENGLISH SPEAKING, DISABLED, MINORITIES AND AT RISK POPULATIONS.

30-808 . Electric retail competition information; confidentiality

NOTWITHSTANDING ANY OTHER LAW, RECORDS AND PROCEEDINGS RELATING TO COMPETITIVE ACTIVITY, INCLUDING TRADE SECRETS OR PRIVILEGED OR CONFIDENTIAL COMMERCIAL OR FINANCIAL INFORMATION, IF DISCLOSURE OF THE INFORMATION COULD GIVE A MATERIAL ADVANTAGE TO COMPETITORS, ARE NOT OPEN TO PUBLIC INSPECTION AND SHALL NOT BE MADE PUBLIC EXCEPT BY ORDER OF THE PUBLIC POWER ENTITY'S GOVERNING BODY, THE ELECTRICITY SUPPLIER OR THE PROVIDER OF OTHER SERVICES. THE INFORMATION PROTECTED AS CONFIDENTIAL UNDER THIS SECTION IS ANY INFORMATION THAT IS SIMILAR TO THE INFORMATION THAT WOULD BE CONFIDENTIAL UNDER SECTION 40-204 IF REPORTED BY A PUBLIC SERVICE CORPORATION TO THE COMMISSION. THE PUBLIC POWER ENTITY SHALL MAKE AVAILABLE TO ANY REQUESTING PARTY ALL INFORMATION NECESSARY TO DEMONSTRATE COMPLIANCE WITH SECTION 30-806. DETERMINATIONS MADE BY PUBLIC POWER ENTITIES UNDER THIS SECTION MAY BE CHALLENGED PURSUANT TO THE PROCEDURES PRESCRIBED IN SECTION 39-121.02.

30-809 . Consumer choice

A. EXCEPT AS PROVIDED IN SUBSECTION B 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 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.

B. 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 POWER ENTITY THAT FURNISHES THE ASSOCIATED ENERGY SERVICE.

2. UNLESS MANDATED OTHERWISE BY LAW OR GOVERNMENTAL REGULATION, THE PUBLIC POWER ENTITY THAT FURNISHES THE ASSOCIATED ENERGY NOTIFIES THE CONTRACTOR OR OWNER THAT THE EXTENSION OF FACILITIES TO THE STRUCTURE IS NOT ECONOMICALLY FEASIBLE.

3. THE PUBLIC POWER ENTITY THAT FURNISHES A PARTICULAR ENERGY SERVICE AND THE OWNER OR CONTRACTOR AGREE THAT THE EXTENSION OF FACILITIES TO THE STRUCTURE WOULD NOT BE ECONOMICALLY FEASIBLE OR WOULD OTHERWISE BE INAPPROPRIATE.

C. 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.

D. 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 FOR UNDERGROUND CONVERSION SERVICE AREAS PRESCRIBED BY SECTIONS 40-341 THROUGH 40-355 AND IMPROVEMENT DISTRICTS FOR UNDERGROUND UTILITY FACILITIES PRESCRIBED BY 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.

E. BEFORE INITIATING A COMPLAINT WITH A PUBLIC POWER ENTITY OR THE COMMISSION, THE PARTIES TO A DISPUTE ARISING UNDER SUBSECTIONS A THROUGH D OF THIS SECTION SHALL MEET AND IN GOOD FAITH ATTEMPT TO RESOLVE THE DISPUTE THROUGH AN INFORMAL DISPUTE RESOLUTION PROCESS.

30-810 . Application for rehearing; effect; decision

A. AFTER ANY FINAL ORDER OR DECISION IS MADE BY THE GOVERNING BODY OF THE PUBLIC POWER ENTITY REGARDING TERMS AND CONDITIONS FOR CUSTOMER SELECTION, COMPLAINT RESOLUTION, CONSUMER PROTECTION, STRANDED COSTS, TRANSMISSION AND DISTRIBUTION SERVICE RATES AND CHARGES, SYSTEM BENEFIT CHARGES AND OTHER RELATED MATTERS AS DETERMINED IN THE REASONABLE DISCRETION OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY, OR REGARDING COMPLIANCE WITH AN INTERGOVERNMENTAL AGREEMENT MADE UNDER THE PROVISIONS OF THIS CHAPTER, ANY PARTY TO THE ACTION OR PROCEEDING OR THE ATTORNEY GENERAL ON BEHALF OF THE STATE MAY APPLY FOR A REHEARING OF ANY MATTER DETERMINED IN THE ACTION OR PROCEEDING AND SPECIFIED IN THE APPLICATION FOR REHEARING WITHIN TWENTY DAYS OF ENTRY OF THE ORDER OR DECISION. UNLESS OTHERWISE ORDERED, THE FILING OF THE APPLICATION DOES NOT STAY THE DECISION OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY. IF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY DOES NOT GRANT THE APPLICATION WITHIN TWENTY DAYS, IT IS DEEMED DENIED. IF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY GRANTS THE APPLICATION, THE GOVERNING BODY OF THE PUBLIC POWER ENTITY SHALL PROMPTLY HEAR THE MATTER AND MAKE A DETERMINATION WITHIN TWENTY DAYS AFTER FINAL SUBMISSION.

B. NO CLAIM ARISING FROM ANY ORDER OR DECISION OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY REGARDING TERMS AND CONDITIONS FOR CUSTOMER SELECTION, COMPLAINT RESOLUTION, CONSUMER PROTECTION, STRANDED COSTS, TRANSMISSION AND DISTRIBUTION SERVICE RATES AND CHARGES, SYSTEM BENEFIT CHARGES AND OTHER RELATED MATTERS AS DETERMINED IN THE REASONABLE DISCRETION OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY OR REGARDING COMPLIANCE WITH AN INTERGOVERNMENTAL AGREEMENT MADE UNDER THE PROVISION OF THIS CHAPTER SHALL ACCRUE IN ANY COURT TO ANY PARTY OR THE STATE UNLESS THE PARTY OR THE STATE MAKES, BEFORE THE EFFECTIVE DATE OF THE ORDER OR DECISION, APPLICATION TO THE GOVERNING BODY OF THE PUBLIC POWER ENTITY FOR A REHEARING.

C. THE APPLICATION SHALL SET FORTH SPECIFICALLY THE GROUNDS ON WHICH IT IS BASED AND A PERSON OR THE STATE SHALL NOT IN ANY COURT URGE OR RELY ON ANY GROUND NOT SET FORTH IN THE APPLICATION.

D. AN APPLICATION FOR REHEARING DOES NOT EXCUSE ANY PERSON FROM COMPLYING WITH AND OBEYING ANY ORDER OR DECISION OR ANY REQUIREMENTS OF ANY ORDER OR DECISION OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY, OR OPERATE IN ANY MANNER TO STAY OR POSTPONE THE ENFORCEMENT OF A DECISION, EXCEPT IN CASES AND ON TERMS AS THE GOVERNING BODY OF THE PUBLIC POWER ENTITY BY ORDER DIRECTS.

E. IF, AFTER A REHEARING AND A CONSIDERATION OF ALL THE FACTS, INCLUDING THOSE ARISING SINCE THE MAKING OF THE ORDER OR DECISION, THE GOVERNING BODY OF THE PUBLIC POWER ENTITY FINDS THAT THE ORIGINAL ORDER OR DECISION OR ANY PART OF THE ORIGINAL ORDER OR DECISION IS IN ANY RESPECT UNJUST OR UNWARRANTED OR SHOULD BE CHANGED THE GOVERNING BODY OF THE PUBLIC POWER ENTITY MAY ABROGATE, CHANGE OR MODIFY THE ORDER OR DECISION, AND THE ORDER OR DECISION HAS THE SAME FORCE AND EFFECT AS AN ORIGINAL ORDER OR DECISION, BUT DOES NOT AFFECT ANY RIGHT OR THE ENFORCEMENT OF ANY RIGHT ARISING FROM OR BY VIRTUE OF THE ORIGINAL ORDER OR DECISION, UNLESS DECIDED BY THE GOVERNING BODY OF THE PUBLIC POWER ENTITY.

30-811 . Action to set aside or modify certain orders or decisions of public power entities; filing; limitation; superior court

A. ANY PARTY IN INTEREST, OR THE ATTORNEY GENERAL ON BEHALF OF THE STATE, WHO IS DISSATISFIED WITH AN ORDER OR DECISION OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY REGARDING TERMS AND CONDITIONS FOR CUSTOMER SELECTION, COMPLAINT RESOLUTION, CONSUMER PROTECTION, STRANDED COSTS, TRANSMISSION SERVICE RATES AND CHARGES, DISTRIBUTION SERVICE RATES AND CHARGES, SYSTEM BENEFIT CHARGES AND OTHER RELATED MATTERS AS DETERMINED IN THE REASONABLE DISCRETION OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY OR REGARDING COMPLIANCE WITH AN INTERGOVERNMENTAL AGREEMENT MADE UNDER THE PROVISIONS OF THIS CHAPTER, MAY, WITHIN THIRTY DAYS AFTER A REHEARING IS DENIED OR GRANTED, COMMENCE AN ACTION IN SUPERIOR COURT IN THE COUNTY IN WHICH THE GOVERNING BODY OF THE PUBLIC POWER ENTITY HAS ITS OFFICE, AGAINST THE GOVERNING BODY OF THE PUBLIC POWER ENTITY AS DEFENDANT, TO VACATE, SET ASIDE, AFFIRM IN PART, REVERSE IN PART OR REMAND WITH INSTRUCTIONS TO THE GOVERNING BODY OF THE PUBLIC POWER ENTITY THE ORDER OR DECISION ON THE GROUND THAT THE VALUATION, RATE, JOINT RATE, TOLL, FARE, CHARGE OR FINDING, RULE, CLASSIFICATION OR SCHEDULE, PRACTICE, DEMAND, REQUIREMENT, ACT OR SERVICE PROVIDED IN THE ORDER OR DECISION IS UNLAWFUL OR THAT ANY RULE, PRACTICE, ACT OR SERVICE PROVIDED IN THE ORDER OR DECISION IS UNLAWFUL, OR THAT ANY RULE, PRACTICE, ACT OR SERVICE PROVIDED IN THE ORDER OR DECISION IS UNREASONABLE. THE ANSWER OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY SHALL BE SERVED AND FILED WITHIN TWENTY DAYS AFTER SERVICE OF THE COMPLAINT, THE ACTION SHALL BE AT ISSUE AND READY FOR TRIAL ON TEN DAYS' NOTICE TO EITHER PARTY. THE ACTION SHALL BE TRIED AND DETERMINED AS OTHER CIVIL ACTIONS EXCEPT AS PROVIDED IN THIS SECTION.

B. IF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY RESCINDS THE ORDER OR DECISION COMPLAINED OF, THE ACTION SHALL BE DISMISSED AND IF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY ALTERS, MODIFIES OR AMENDS THE ORDER OR DECISION, THE ALTERED, MODIFIED OR AMENDED ORDER REPLACES THE ORIGINAL ORDER COMPLAINED OF AND JUDGMENT SHALL BE GIVEN ON THE ORDER AS THOUGH MADE BY THE GOVERNING BODY OF THE PUBLIC POWER ENTITY IN THE FIRST INSTANCE.

C. EXCEPT AS OTHERWISE PRESCRIBED BY THIS SECTION, THE TRIAL SHALL CONFORM AS NEARLY AS POSSIBLE TO OTHER TRIALS IN CIVIL ACTIONS. JUDGMENT SHALL BE GIVEN AFFIRMING, MODIFYING OR SETTING ASIDE THE ORIGINAL OR AMENDED ORDER.

D. EITHER PARTY TO THE ACTION, OR THE ATTORNEY GENERAL ON BEHALF OF THE STATE, WITHIN THIRTY DAYS AFTER THE JUDGMENT OF THE SUPERIOR COURT IS GIVEN MAY APPEAL TO THE COURT OF APPEALS.

E. IN ALL TRIALS, ACTIONS AND PROCEEDINGS THE BURDEN OF PROOF IS ON THE PARTY ADVERSE TO THE GOVERNING BODY OF THE PUBLIC POWER ENTITY OR SEEKING TO VACATE OR SET ASIDE ANY DECISION OR ORDER OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY TO SHOW THAT IT IS UNLAWFUL, THAT IT IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE OR THAT THE GOVERNING BODY OF THE PUBLIC POWER ENTITY ABUSED ITS DISCRETION.

F. EXCEPT AS PROVIDED BY THIS SECTION NO COURT OF THIS STATE SHALL HAVE JURISDICTION TO ENJOIN, RESTRAIN, SUSPEND, DELAY OR REVIEW ANY ORDER OR DECISION OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY OR TO ENJOIN, RESTRAIN OR INTERFERE WITH THE GOVERNING BODY OF THE PUBLIC POWER ENTITY IN THE PERFORMANCE OF ITS OFFICIAL DUTIES AND THE RULES, ORDERS OR DECREES FIXED BY THE GOVERNING BODY OF THE PUBLIC POWER ENTITY REMAIN IN FORCE PENDING THE DECISION OF THE COURTS. A WRIT OF MANDAMUS MAY BE ISSUED FROM THE SUPREME COURT TO THE GOVERNING BODY OF THE PUBLIC POWER ENTITY IN CASES AUTHORIZED BY LAW.

30-812 . Action to set aside or modify certain governing body of public power entity orders or decisions; limitation; court of appeals

A. THE ATTORNEY GENERAL ON BEHALF OF THE STATE OR ANY PARTY TO A PROCEEDING BEFORE THE GOVERNING BODY OF THE PUBLIC POWER ENTITY THAT IS DISSATISFIED WITH ANY ORDER OR DECISION OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY INVOLVING PUBLIC POWER ENTITIES AND RELATING TO RATE MAKING OR RATE DESIGN PURSUANT TO SECTION 30-802 MAY FILE, WITHIN THIRTY DAYS AFTER A REHEARING IS DENIED OR GRANTED, A NOTICE OF APPEAL IN THE COURT OF APPEALS TO VACATE, SET ASIDE, AFFIRM IN PART, REVERSE IN PART OR REMAND WITH INSTRUCTIONS TO THE GOVERNING BODY OF THE PUBLIC POWER ENTITY THE ORDER OR DECISION IF THE COURT OF APPEALS DETERMINES THAT IT IS UNLAWFUL, THAT IT IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE OR THAT THE GOVERNING BODY ABUSED ITS DISCRETION.

B. IF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY RESCINDS THE ORDER COMPLAINED OF, THE ACTION SHALL BE DISMISSED, AND IF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY ALTERS, MODIFIES OR AMENDS THE ORDER, THE ALTERED, MODIFIED OR AMENDED ORDER SHALL REPLACE THE ORIGINAL ORDER COMPLAINED OF, AND JUDGMENT SHALL BE GIVEN ON THE ORDER AS MADE BY THE GOVERNING BODY OF THE PUBLIC POWER ENTITY IN THE FIRST INSTANCE.

C. THE APPELLATE PROCEDURE SHALL BE PURSUANT TO RULES ADOPTED BY THE SUPREME COURT. THE RULES SHALL CONFORM, AS NEARLY AS POSSIBLE, TO THE MANNER IN WHICH OTHER APPEALS ARE UNDERTAKEN INCLUDING INDICATING THE CONTENT OF THE RECORD ON REVIEW, THE BRIEFS TO BE FILED AND THE TIME AND MANNER FOR FILING THE BRIEFS, RECORD AND OTHER DOCUMENTS.

D. ANY PARTY TO THE ACTION, OR THE ATTORNEY GENERAL ON BEHALF OF THE STATE, MAY APPEAL TO THE SUPREME COURT AS PROVIDED BY LAW.

E. IN ALL APPEALS TAKEN PURSUANT TO THIS SECTION, THE PARTY ADVERSE TO THE GOVERNING BODY OF THE PUBLIC POWER ENTITY OR THE PARTY SEEKING TO VACATE OR SET ASIDE AN ORDER OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY MUST SHOW THAT THE ORDER OR DECISION IS UNLAWFUL, THAT IT IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE OR THAT THE GOVERNING BODY ABUSED ITS DISCRETION.

F. EXCEPT AS PROVIDED BY THIS SECTION, A COURT OF THIS STATE DOES NOT HAVE JURISDICTION TO ENJOIN, RESTRAIN, SUSPEND, DELAY OR REVIEW ANY ORDER OR DECISION OF THE GOVERNING BODY OF THE PUBLIC POWER ENTITY INVOLVING ANY PUBLIC POWER ENTITY AND RELATING TO RATE MAKING OR RATE DESIGN OR TO ENJOIN, RESTRAIN OR INTERFERE WITH THE GOVERNING BODY OF THE PUBLIC POWER ENTITY IN THE PERFORMANCE OF ITS OFFICIAL DUTIES AND THE RULES, ORDERS OR DECREES FIXED BY THE GOVERNING BODY OF THE PUBLIC POWER ENTITY REMAIN IN FORCE PENDING THE DECISION OF THE COURTS, BUT A WRIT OF MANDAMUS SHALL LIE FROM THE SUPREME COURT TO THE GOVERNING BODY OF THE PUBLIC POWER ENTITY IN CASES AUTHORIZED BY LAW.

30-813 . Application of antitrust statutes

NOTWITHSTANDING ANY OTHER LAW, THE PROVISIONS OF TITLE 44, CHAPTER 10, ARTICLE 1, APPLY TO THE PROVISIONS OF COMPETITIVE ELECTRIC GENERATION SERVICE OR OTHER SERVICES BY PUBLIC POWER ENTITIES.

Sec. 21. Title 40, chapter 1, article 1, Arizona Revised Statutes, is amended by adding section 40-113, to read:

40-113 . Consumer outreach and education

A. IN ORDER TO TRANSITION TO COMPETITION FOR ELECTRIC GENERATION SERVICE, THE COMMISSION'S AUTHORITY IS CONFIRMED TO DEVELOP AND OVERSEE A COMPREHENSIVE PUBLIC EDUCATION PROGRAM REGARDING ELECTRIC GENERATION SERVICE COMPETITION. THE PROGRAM MAY DO THE FOLLOWING:

1. EDUCATE RETAIL ELECTRIC CUSTOMERS ABOUT THE CHANGES IN THE ELECTRIC INDUSTRY.

2. PROVIDE RETAIL ELECTRIC CUSTOMERS WITH ACCURATE AND UNBIASED INFORMATION SO THAT RETAIL ELECTRIC CUSTOMERS MAY MAKE INFORMED CHOICES WHEN PARTICIPATING IN THE COMPETITIVE ELECTRIC GENERATION SERVICE MARKET.

3. ENCOURAGE PUBLIC PARTICIPATION IN THE DECISION MAKING PROCESS RELATING TO ESTABLISHING A COMPETITIVE ELECTRIC INDUSTRY.

B. THE COMMISSION MAY WORK WITH INTERESTED PARTIES, INCLUDING COMMUNITY BASED CONSUMER ADVOCATE ORGANIZATIONS, TO DEVELOP AND IMPLEMENT AN OUTREACH AND EDUCATION PLAN. THIS PLAN MAY INCLUDE:

1. THE DISSEMINATION OF INFORMATION BY INTERACTIVE APPROACHES, BROCHURES OR OTHER WRITTEN MATERIALS AND MASS MEDIA OUTLETS.

2. AN EXPLANATION IN CLEAR AND PLAIN LANGUAGE OF THE BASIC CONCEPTS OF COMPETITIVE ELECTRIC GENERATION SERVICE INCLUDING THE FOLLOWING ISSUES:

(a) THE EFFECTS OF COMPETITIVE ELECTRIC GENERATION SERVICE ON RETAIL ELECTRIC CUSTOMERS AND CONSUMER PROGRAMS.

(b) THE BASIC RESPONSIBILITIES AND RISKS RETAIL ELECTRIC CUSTOMERS ASSUME WITH COMPETITIVE ELECTRIC GENERATION SERVICE.

(c) THE BASIC CRITERIA FOR SELECTING A RETAIL ELECTRICITY SUPPLIER OR PROVIDER OF OTHER SERVICES.

(d) WHERE THE RETAIL ELECTRIC CUSTOMER CAN FIND INFORMATION ON CONSUMER PROTECTION, CUSTOMER COMPLAINTS AND DISPUTE RESOLUTION PROGRAMS.

(e) THE RESOURCES AVAILABLE FOR ADDITIONAL INFORMATION INCLUDING A TOLL FREE TELEPHONE NUMBER.

3. PUBLICIZED PUBLIC FORUMS CONDUCTED IN SEVERAL GEOGRAPHICAL AREAS OF THIS STATE TO OBTAIN PUBLIC INPUT AND PROVIDE OPPORTUNITIES FOR EXCHANGE OF QUESTIONS AND ANSWERS.

4. TARGETED EFFORTS TO REACH RURAL, LOW INCOME, ELDERLY, NONENGLISH SPEAKING, DISABLED, MINORITIES AND AT-RISK POPULATIONS.

Sec. 22. Section 40-201, Arizona Revised Statutes, is amended to read:

40-201 . Definitions

In this chapter, unless the context otherwise requires:

1. "ANCILLARY SERVICES" MEANS THOSE SERVICES DESIGNATED AS ANCILLARY SERVICES IN FEDERAL ENERGY REGULATORY COMMISSION ORDER 888 ADOPTED IN 1996 INCLUDING THE SERVICES NECESSARY TO SUPPORT THE TRANSMISSION OF ELECTRICITY FROM RESOURCES TO LOADS WHILE MAINTAINING RELIABLE OPERATION OF THE TRANSMISSION SYSTEM IN ACCORDANCE WITH GOOD UTILITY PRACTICE.

2. "APPLIANCE APPLICATION" MEANS CENTRAL SPACE HEATING, CLOTHES DRYING, WATER HEATING AND INDOOR COOKING.

3. "BUNDLED SERVICE" MEANS ELECTRIC SERVICE PROVIDED AS A PACKAGE TO THE CONSUMER INCLUDING ALL GENERATION, TRANSMISSION, DISTRIBUTION, ANCILLARY AND OTHER SERVICES NECESSARY TO DELIVER AND MEASURE USEFUL ELECTRICITY USED BY CONSUMERS.

1. 4. "Commission" means the Arizona corporation commission.

2. 5. "Common carrier" means A railroad or street railroad.

3. "Electric plant" includes all property used in connection with the production, transmission or delivery of electricity for light, heat or power for sale.

6. "ELECTRIC DISTRIBUTION FACILITIES" MEANS ALL PROPERTY USED IN CONNECTION WITH THE DISTRIBUTION OF ELECTRICITY FROM AN ELECTRIC GENERATING PLANT TO RETAIL ELECTRIC CUSTOMERS EXCEPT ELECTRIC TRANSMISSION FACILITIES.

7. "ELECTRIC DISTRIBUTION SERVICE" MEANS THE DISTRIBUTION OF ELECTRICITY TO RETAIL ELECTRIC CUSTOMERS THROUGH THE USE OF ELECTRIC DISTRIBUTION FACILITIES.

8. "ELECTRIC DISTRIBUTION UTILITY" MEANS A PUBLIC SERVICE CORPORATION OR PUBLIC POWER ENTITY THAT OPERATES, CONTROLS OR MAINTAINS ELECTRIC DISTRIBUTION FACILITIES.

9. "ELECTRIC GENERATION PLANT" MEANS ALL PROPERTY USED IN CONNECTION WITH THE GENERATION FOR SALE OF ELECTRICITY TO RETAIL ELECTRIC CUSTOMERS BUT EXCLUDING ANY SERVICES PROVIDED BY ELECTRIC TRANSMISSION FACILITIES OR ELECTRIC DISTRIBUTION FACILITIES.

10. "ELECTRIC GENERATION SERVICE" MEANS THE PROVISION OF ELECTRICITY FOR SALE TO RETAIL ELECTRIC CUSTOMERS BUT DOES NOT INCLUDE ELECTRIC DISTRIBUTION OR TRANSMISSION SERVICES AND GENERATION THAT IS NECESSARY FOR THE RELIABLE OPERATION OF THE ELECTRIC DISTRIBUTION OR TRANSMISSION SYSTEM.

11. "ELECTRIC TRANSMISSION FACILITIES" MEANS ALL PROPERTY SO CLASSIFIED BY THE FEDERAL ENERGY REGULATORY COMMISSION OR, TO THE EXTENT PERMITTED BY LAW, SO CLASSIFIED BY THE ARIZONA CORPORATION COMMISSION.

12. "ELECTRIC TRANSMISSION SERVICE" MEANS THE TRANSMISSION OF ELECTRICITY TO RETAIL ELECTRIC CUSTOMERS OR TO ELECTRIC DISTRIBUTION FACILITIES AND THAT IS SO CLASSIFIED BY THE FEDERAL ENERGY REGULATORY COMMISSION OR, TO THE EXTENT PERMITTED BY LAW, SO CLASSIFIED BY THE ARIZONA CORPORATION COMMISSION.

13. "ELECTRICITY" MEANS ELECTRIC ENERGY, ELECTRIC CAPACITY OR ELECTRIC CAPACITY AND ENERGY.

14. "ELECTRICITY SUPPLIER" MEANS A PERSON, WHETHER ACTING IN A PRINCIPAL, AGENT OR OTHER CAPACITY, THAT IS A PUBLIC SERVICE CORPORATION THAT OFFERS TO SELL ELECTRICITY TO A RETAIL ELECTRIC CUSTOMER IN THIS STATE.

15. "FOREIGN NONPROFIT, MEMBER OWNED COOPERATIVE CORPORATION" MEANS A COOPERATIVE INCORPORATED IN ANOTHER STATE IF THAT STATE HAS NOT ORDERED ELECTRIC COMPETITION FOR COOPERATIVE CORPORATIONS.

4. 16. "Gas plant" includes all property used in connection with the production, transmission or delivery of gas for light, heat or power for sale.

17. "OTHER SERVICES" MEANS METERING, METER READING, BILLING AND COLLECTING SERVICES.

5. 18. "Pipeline" includes all property used in transmission for compensation of air, steam or fluid substances, except water, through pipelines.

6. 19. "Railroad" includes every railway, other than a street railroad, operated for public transportation of persons or property.

20. "RETAIL ELECTRIC CUSTOMER" MEANS A PERSON WHO PURCHASES ELECTRICITY FOR THAT PERSON'S OWN USE, INCLUDING USE IN THAT PERSON'S TRADE OR BUSINESS, AND NOT FOR RESALE, REDISTRIBUTION OR RETRANSMISSION.

21. "SERVICE TERRITORY" MEANS THE GEOGRAPHIC AREA IN WHICH A PUBLIC POWER ENTITY OR PUBLIC SERVICE CORPORATION OWNS, OPERATES, CONTROLS OR MAINTAINS ELECTRIC DISTRIBUTION FACILITIES OR NATURAL GAS DISTRIBUTION FACILITIES AND THAT ADDITIONAL AREA IN WHICH THE PUBLIC POWER ENTITY OR PUBLIC SERVICE CORPORATION HAS AGREED TO EXTEND ELECTRIC DISTRIBUTION FACILITIES OR NATURAL GAS DISTRIBUTION FACILITIES, WHETHER ESTABLISHED BY A CERTIFICATE OF CONVENIENCE AND NECESSITY, BY OFFICIAL ACTION BY A PUBLIC POWER ENTITY OR BY CONTRACT OR AGREEMENT.

7. 22. "Sewer corporation" includes every person owning, controlling, operating or managing any sewage system for profit.

8. 23. "Sewerage system" includes all property used in connection with the collection, treatment, purification and disposal transmission, storage or treatment of sewage.

9. 24. "Street railroad" includes every railway operated along any street or public way for public transportation of persons or property, but does not include a commercial or interurban railway.

10. 25. "Telecommunications corporation" means a public service corporation other than municipal engaged in transmitting messages or furnishing public telegraph or telephone service or operating as a telecommunications common carrier.

11. 26. "Telegraph line" includes all property used in connection with communication by telegraph for compensation with or without the use of transmission wires.

12. 27. "Telephone line" includes all property used in connection with communication by telephone, for compensation, with or without the use of transmission wires.

13. 28. "Transportation of persons" includes every service in connection with the carriage and delivery of a person and his THE PERSON'S baggage.

14. 29. "Transportation of property" includes every service in connection with the transportation and handling of property.

15. 30. "Water system" includes all property used in connection with the diversion, development, storage, distribution and sale of water for beneficial uses for compensation.

Sec. 23. Section 40-202, Arizona Revised Statutes, is amended to read:

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 such 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.

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 G 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 3 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 THEIR ELECTRICITY SUPPLIER OR TO SUBSCRIBE TO OTHER SERVICES.

5. PROVIDE THAT, NOTWITHSTANDING ANY OTHER LAW, THAT 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 AS 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 F 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 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.

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 STRUCTURE WOULD NOT BE ECONOMICALLY FEASIBLE OR WOULD OTHERWISE BE INAPPROPRIATE.

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.

J. BEFORE INITIATING A COMPLAINT WITH A PUBLIC SERVICE CORPORATION OR THE COMMISSION, THE PARTIES TO A DISPUTE ARISING UNDER SUBSECTIONS E THROUGH H OF THIS SECTION SHALL MEET AND IN GOOD FAITH ATTEMPT TO RESOLVE THE DISPUTE THROUGH AN INFORMAL DISPUTE RESOLUTION PROCESS.

B. K. 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.

L. 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.

M. THE PROVISIONS OF SUBSECTION B, PARAGRAPHS 3 AND 5 OF THIS SECTION ARE SUBJECT TO LEGISLATIVE REVIEW BY THE AUDITOR GENERAL IN 2008.

N. THE PROVISIONS OF SUBSECTION B, PARAGRAPH 4 OF THIS SECTION ARE SUBJECT TO SUNSET REVIEW BY THE AUDITOR GENERAL IN 2003.

O. FAILURE TO COMPLY WITH THE RULES OR PROCEDURES ADOPTED PURSUANT TO SUBSECTIONS C AND D 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.

Sec. 24. Section 40-204, Arizona Revised Statutes, is amended to read:

40-204 . Reports by public service corporations to commission; duty of corporation to deliver documents to commission; confidential nature of information furnished; exception; classification

A. Every public service corporation shall furnish to the commission, in the form and detail the commission prescribes, tabulations, computations, annual reports, monthly or periodical reports of earnings and expenses, and all other information required by it to carry into effect the provisions of this title and shall make specific answers to all questions submitted by the commission. If a corporation is unable to answer any question, it shall give a good and sufficient reason therefor.

B. When required by the commission, a public service corporation shall deliver to the commission copies of any maps, profiles, contracts, franchises, books, papers and records in its possession, or in any way relating to its property or affecting its business, and also a complete inventory of all its property in the form the commission directs.

C. No information furnished to the commission by a public service corporation, except matters specifically required to be open to public inspection, shall be open to public inspection or made public except on order of the commission entered after notice to the affected public service corporation, or by the commission or a commissioner in the course of a hearing or proceeding.

D. Any officer or employee of the commission who knowingly divulges any such information is guilty of a class 2 misdemeanor.

Sec. 25. Title 40, chapter 2, article 1, Arizona Revised Statutes, is amended by adding sections 40-207, 40-208 and 40-209, to read:

40-207 . Electricity suppliers; rules

A. AN ELECTRICITY SUPPLIER SHALL OBTAIN A CERTIFICATE FROM THE COMMISSION BEFORE OFFERING ELECTRICITY FOR SALE TO RETAIL ELECTRIC CUSTOMERS IN THIS STATE.

B. THE COMMISSION MAY ADOPT, AMEND AND REPEAL RULES REASONABLY NECESSARY TO CARRY OUT THIS SECTION. ON OR BEFORE DECEMBER 31, 1998, THE COMMISSION SHALL ADOPT RULES PROVIDING MINIMUM STANDARDS OF DISCLOSURE AND COMPLAINT PROCEDURES APPLICABLE TO CERTIFICATED ELECTRICITY SUPPLIERS. THE COMMISSION MAY IMPOSE CONDITIONS ON THE CERTIFICATION OF ELECTRICITY SUPPLIERS TO ASSURE THEIR FINANCIAL STABILITY, INCLUDING PERIODIC REPORTS, BONDS AND DEPOSITS.

C. AS A CONDITION OF OBTAINING A CERTIFICATE REQUIRED UNDER SUBSECTION A, AN ELECTRICITY SUPPLIER SHALL AGREE TO BE SUBJECT TO THE TRANSACTION PRIVILEGE TAXES AND AFFILIATED EXCISE TAXES PURSUANT TO TITLE 42, CHAPTER 5 AND THE PROVISIONS OF THE MODEL CITY TAX CODE.

40-208 . Service territories; open competition

AFTER DECEMBER 31, 2000 SERVICE TERRITORIES ESTABLISHED BY A CERTIFICATE OF CONVENIENCE AND NECESSITY SHALL BE OPEN TO ELECTRIC GENERATION SERVICE COMPETITION FOR ALL RETAIL ELECTRIC CUSTOMERS FOR ANY ELECTRICITY SUPPLIER THAT OBTAINS A CERTIFICATE FROM THE COMMISSION PURSUANT TO SECTION 40-207 OR ANY PUBLIC POWER ENTITY.

40-209 . Franchises; electric generation suppliers; limitations

REGULATION OF ELECTRICITY SUPPLIERS PROVIDING ELECTRIC GENERATION SERVICE IS A MATTER OF STATEWIDE CONCERN. CITIES, INCLUDING CHARTER CITIES, TOWNS AND COUNTIES SHALL NOT REQUIRE FRANCHISES FOR ELECTRICITY SUPPLIERS TO PROVIDE ELECTRIC GENERATION SERVICE WITHIN ITS JURISDICTION AND SHALL NOT IMPOSE RENTS, CHARGES OR TAXES ON THE USE OF PUBLIC STREETS, ROADS AND ALLEYS ON ELECTRICITY SUPPLIERS FOR THE PROVISION OF ELECTRIC GENERATION SERVICE WITHIN ITS JURISDICTION, EXCEPT THAT A FEE EQUAL TO THE FRANCHISE FEE OF THE ELECTRIC DISTRIBUTION UTILITY MAY BE CHARGED TO THE ELECTRICITY SUPPLIER ON ANY PORTION OF A RETAIL ELECTRICITY SALE NOT OTHERWISE SUBJECT TO A FRANCHISE FEE MADE USING ELECTRIC DISTRIBUTION FACILITIES IN SERVICE TERRITORIES THAT ARE FRANCHISED AS OF THE EFFECTIVE DATE OF THIS SECTION. NOTHING IN THIS SUBSECTION AFFECTS THE AUTHORITY OF CITIES, INCLUDING CHARTER CITIES, TOWNS AND COUNTIES TO REQUIRE FRANCHISES FOR ELECTRICITY SUPPLIERS PROVIDING ELECTRIC DISTRIBUTION SERVICE WITHIN THEIR JURISDICTION.

Sec. 26. Section 40-286, Arizona Revised Statutes, is amended to read:

40-286 . Exemption from antitrust statutes

The provisions of title 44, chapter 10, article 1, shall not apply to any conduct or activity of a public service corporation holding a certificate of public convenience and necessity granted pursuant to this article, which conduct or activity is approved by a statute of this state or of the United States or by the corporation commission or an administrative agency of this state or of the United States having jurisdiction of the subject matter. THIS SECTION DOES NOT APPLY TO THE PROVISION OF COMPETITIVE ELECTRIC GENERATION SERVICE OR OTHER SERVICES.

Sec. 27. Section 40-360.02, Arizona Revised Statutes, is amended to read:

40-360.02 . Ten year plans; filing; failure to comply

A. Every person contemplating construction of any facilities transmission line within the state during any ten year period shall file a ten year plan with the commission on or before the thirty-first day of January 31 of each year.

B. Each plan filed pursuant to subsection A shall set forth the following information with respect to the proposed facilities to the extent such information is available:

1. The proposed general area of each plant.

2. The approximate generating capacity of each plant and the number of plants proposed for each site.

3. The type of fuel proposed for each plant.

4. The proposed source of fuel and water for each plant.

5. 1. The size and approximate proposed route of the ANY transmission lines associated with each proposed plant and of the transmission lines PROPOSED to be constructed to serve any other purposes .

6. 2. The purpose to be served by each proposed transmission line.

7. 3. The estimated date by which each plant or transmission line will be in operation.

C. Failure of any person to comply with the requirements of subsection A or B may, in the commission's discretion in the absence of a showing of good cause, constitute a ground for refusing to consider an application of such person.

D. Such THE plans shall be recognized and utilized as tentative information only and are subject to change at any time at the discretion of the person filing the same PLANS .

E. THE PLANS SHALL BE REVIEWED BIENNIALLY BY THE COMMISSION AND THE COMMISSION SHALL ISSUE A WRITTEN DECISION REGARDING THE ADEQUACY OF THE EXISTING AND PLANNED TRANSMISSION FACILITIES IN THIS STATE TO MEET THE PRESENT AND FUTURE ENERGY NEEDS OF THIS STATE IN A RELIABLE MANNER.

Sec. 28. Section 42-5010, Arizona Revised Statutes, as amended by Laws 1998, chapter 1, section 161, is amended to read:

42-5010 . Rates; distribution base

A. The tax imposed by this article is levied and shall be collected at the rate of:

1. Five per cent of the tax base as computed for the business of every person engaging or continuing in this state in the following business classifications described in article 2 of this chapter:

(a) Transporting classification.

(b) Utility classification.

(c) Telecommunications classification.

(d) Pipeline classification.

(e) Private car line classification.

(f) Publication classification.

(g) Job printing classification.

(h) Prime contracting classification.

(i) Owner builder sales classification.

(j) Amusement classification.

(k) Restaurant classification.

(l) Personal property rental classification.

(m) Retail classification.

(n) Membership camping classification.

2. Five and one-half per cent of the tax base as computed for the business of every person engaging or continuing in this state in the transient lodging classification described in section 42-5070.

3. Three and one-eighth per cent of the tax base as computed for the business of every person engaging or continuing in this state in the mining classification described in section 42-5072.

4. Zero per cent of the tax base as computed for the business of every person engaging or continuing in this state in the commercial lease classification described in section 42-5069.

B. Twenty per cent of the tax revenues collected from persons on account of engaging in business under the business classifications listed in subsection A, paragraph 1, subdivisions (a) through (i) of this section AND TWENTY PER CENT OF THE TAX REVENUES ON PURCHASES OF ELECTRICITY FROM AN ELECTRICITY SUPPLIER UNDER SECTION 42-5155 is designated as distribution base for purposes of section 42-5029.

C. Forty per cent of the tax revenues collected from persons on account of engaging in business under the business classifications listed in subsection A, paragraph 1, subdivisions (j) through (n) of this section is designated as distribution base for purposes of section 42-5029.

D. Thirty-two per cent of the tax revenues collected from persons on account of engaging in business under the business classification listed in subsection A, paragraph 3 of this section is designated as distribution base for purposes of section 42-5029.

E. Fifty-three and one-third per cent of the tax revenues collected from persons on account of engaging in business under the business classifications listed in subsection A, paragraph 4 of this section is designated as distribution base for purposes of section 42-5029.

F. Fifty per cent of the tax revenues collected from persons on account of engaging in business under the business classification listed in subsection A, paragraph 2 of this section is designated as distribution base for purposes of section 42-5029.

Sec. 29. Section 42-5063, Arizona Revised Statutes, as amended by Laws 1998, chapter 1, section 166, is amended to read:

42-5063 . Utilities classification; definitions

A. The utilities classification is comprised of the business of:

1. Producing and furnishing or furnishing to consumers electricity, natural or artificial gas and water.

2. PROVIDING TO RETAIL ELECTRIC CUSTOMERS ANCILLARY SERVICES, ELECTRIC DISTRIBUTION SERVICES, ELECTRIC GENERATION SERVICES, ELECTRIC TRANSMISSION SERVICES AND OTHER SERVICES RELATED TO PROVIDING ELECTRICITY.

B. The utility classification does not include:

1. Sales of ancillary services, electric distribution services, electric generation services, electric transmission services and other services related to providing electricity, gas or water to a person for resale.

2. Sales of natural gas or liquefied petroleum gas used to propel a motor vehicle.

3. Sales of alternative fuel, as defined in section 1-215, to a used oil fuel burner who has received a permit to burn used oil or used oil fuel under section 49-426 or 49-480.

B. C. The tax base for the utilities classification is the gross proceeds of sales or gross income derived from the business, but the following shall be deducted from the tax base:

1. Revenues received by a municipally owned utility in the form of fees charged to persons constructing residential, commercial or industrial developments or connecting residential, commercial or industrial developments to a municipal utility system or systems if the fees are segregated and used only for capital expansion, system enlargement or debt service of the utility system or systems.

2. Revenues received by any person or persons owning a utility system in the form of reimbursement or contribution compensation for property and equipment installed to provide utility access to, on or across the land of an actual utility consumer if the property and equipment become the property of the utility. This exclusion shall not exceed the value of such property and equipment.

3. Gross proceeds of sales or gross income derived from sales to:

(a) Qualifying hospitals as defined in section 42-5001.

(b) A qualifying health care organization as defined in section 42-5001 if the tangible personal property is used by the organization solely to provide health and medical related educational and charitable services.

4. The portion of gross proceeds of sales or gross income derived from sales to an environmental technology manufacturer, producer or processor as defined in section 41-1514.02, that are used directly in environmental technology manufacturing, producing or processing. This paragraph shall apply for fifteen full consecutive calendar or fiscal years from the date the first paper manufacturing machine is placed in service. In the case of an environmental technology manufacturer, producer or processor who does not manufacture paper, the time period shall begin with the date the first manufacturing, processing or production equipment is placed in service.

D. FOR PURPOSES OF THIS SECTION:

1. "ANCILLARY SERVICES" MEANS THOSE SERVICES SO DESIGNATED IN FEDERAL ENERGY REGULATORY COMMISSION ORDER 888 ADOPTED IN 1996 THAT INCLUDE THE SERVICES NECESSARY TO SUPPORT THE TRANSMISSION OF ELECTRICITY FROM RESOURCES TO LOADS WHILE MAINTAINING RELIABLE OPERATION OF THE TRANSMISSION SYSTEM ACCORDING TO GOOD UTILITY PRACTICE.

2. "ELECTRIC DISTRIBUTION SERVICE" MEANS DISTRIBUTING ELECTRICITY TO RETAIL ELECTRIC CUSTOMERS THROUGH THE USE OF ELECTRIC DISTRIBUTION FACILITIES.

3. "ELECTRIC GENERATION SERVICE" MEANS PROVIDING ELECTRICITY FOR SALE TO RETAIL ELECTRIC CUSTOMERS BUT EXCLUDING ELECTRIC DISTRIBUTION OR TRANSMISSION SERVICES.

4. "ELECTRIC TRANSMISSION SERVICE" MEANS TRANSMITTING ELECTRICITY TO RETAIL ELECTRIC CUSTOMERS OR TO ELECTRIC DISTRIBUTION FACILITIES AND SO CLASSIFIED BY THE FEDERAL ENERGY REGULATORY COMMISSION OR, TO THE EXTENT PERMITTED BY LAW, SO CLASSIFIED BY THE ARIZONA CORPORATION COMMISSION.

5. "OTHER SERVICES" INCLUDES METERING, METER READING SERVICES, BILLING AND COLLECTING SERVICES.

6. "RETAIL ELECTRIC CUSTOMER" MEANS A PERSON WHO PURCHASES ELECTRICITY FOR THAT PERSON'S OWN USE, INCLUDING USE IN THAT PERSON'S TRADE OR BUSINESS AND NOT FOR RESALE, REDISTRIBUTION OR RETRANSMISSION.

7. "UTILITY BUSINESS" MEANS A PERSON ENGAGED IN THE BUSINESS OF PRODUCING AND FURNISHING OR FURNISHING TO CONSUMERS NATURAL OR ARTIFICIAL GAS, WATER OR ELECTRICITY INCLUDING AN ELECTRICITY SUPPLIER.

Sec. 30. Section 42-5151, Arizona Revised Statutes, as amended by Laws 1998, chapter 1, section 172, is amended to read:

42-5151 . Definitions

In this article, unless the context otherwise requires:

1. "ELECTRIC DISTRIBUTION UTILITY" MEANS A PUBLIC SERVICE CORPORATION OR PUBLIC POWER ENTITY THAT OPERATES, CONTROLS OR MAINTAINS ELECTRIC DISTRIBUTION FACILITIES.

2. "ELECTRICITY" MEANS ELECTRIC ENERGY, ELECTRIC CAPACITY OR ELECTRIC CAPACITY AND ENERGY.

3. "ELECTRICITY SUPPLIER" MEANS A PERSON, WHETHER ACTING IN A PRINCIPAL, AGENT OR OTHER CAPACITY, THAT OFFERS TO SELL ELECTRICITY TO A RETAIL ELECTRIC CUSTOMER IN THIS STATE.

1. 4. "Notice" means written notice served personally or by certified mail and addressed to the last known address of the person to whom such notice is given.

2. 5. "Person" means an individual, firm, partnership, joint venture, association, corporation, estate, trust, receiver or syndicate, this state or a county, city, municipality, district or other political subdivision or agency thereof.

3. 6. "Purchase" means any transfer, exchange or barter, conditional or otherwise, in any manner or by any means, of tangible personal property for a consideration, including transactions by which the possession of property is transferred but the seller retains the title as security for payment.

4. 7. "Purchase price" or "sales price" means the total amount for which tangible personal property is sold, including any services that are a part of the sale, valued in money, whether paid in money or otherwise, and any amount for which credit is given to the purchaser by the seller without any deduction on account of the cost of the property sold, materials used, labor or services performed, interest charged, losses or other expenses, but does not include:

(a) Discounts allowed and taken.

(b) Charges for labor or services in installing, remodeling or repairing.

(c) Freight costs billed to and collected from a purchaser by a retailer for tangible personal property which, on the order of the retailer, is shipped directly from a manufacturer or wholesaler to the purchaser.

(d) Amounts attributable to federal excise taxes imposed by 26 United States Code section 4001, 4051 or 4091 on sales of heavy trucks and trailers and automobiles or on sales of use fuel, as defined in section 28-5701.

8. "RETAIL ELECTRIC CUSTOMER" MEANS A PERSON WHO PURCHASES ELECTRICITY FOR THAT PERSON'S OWN USE, INCLUDING USE IN THAT PERSON'S TRADE OR BUSINESS, AND NOT FOR RESALE, REDISTRIBUTION OR RETRANSMISSION.

5. 9. "Retailer" includes:

(a) Every person engaged in the business of making sales of tangible personal property for storage, use or other consumption or in the business of making sales at auction of tangible personal property owned by that person or others for storage, use or other consumption. If in the opinion of the department it is necessary for the efficient administration of this article to regard any salesmen, representatives, peddlers or canvassers as the agents of the dealers, distributors, supervisors or employers under whom they operate or from whom they obtain the tangible personal property sold by them, regardless of whether they are making sales on their own behalf or on behalf of such dealers, distributors, supervisors or employers, the department may so regard them and may regard the dealers, distributors, supervisors or employers as retailers for purposes of this article.

(b) A person who solicits orders for tangible personal property by mail if the solicitations are substantial and recurring or if the retailer benefits from any banking, financing, debt collection, telecommunication, television shopping system, cable, optic, microwave or other communication system or marketing activities occurring in this state or benefits from the location in this state of authorized installation, servicing or repair facilities.

6. 10. "Storage" means keeping or retaining tangible personal property purchased from a retailer for any purpose except sale in the regular course of business or subsequent use solely outside this state.

7. 11. "Taxpayer" means any retailer or person storing, using or consuming tangible personal property the storage, use or consumption of which is subject to the tax imposed by this article when such tax was not paid to a retailer.

8. 12. "Use or consumption" means the exercise of any right or power over tangible personal property incidental to owning the property except holding for sale or selling the property in the regular course of business.

Sec. 31. Section 42-5155, Arizona Revised Statutes, is amended to read:

42-5155 . Levy of tax; tax rate; purchaser's liability

A. There is levied and imposed an excise tax on the storage, use or consumption in this state of tangible personal property purchased from a retailer OR UTILITY BUSINESS , as a percentage of the sales price.

B. The tax imposed by this section applies to any purchaser which purchased tangible personal property for resale but subsequently uses or consumes the property BUT DOES NOT APPLY TO THE GROSS PROCEEDS OF SALES OR GROSS INCOME DERIVED FROM THE SALE OF TANGIBLE PERSONAL PROPERTY EXCLUDED OR EXEMPT UNDER SECTION 42-5063 .

C. The tax rate shall equal the rate of tax applied to retailers AND UTILITY BUSINESSES according to the respective classification under articles 1 and 2 of this chapter for the same type of transaction or business activity.

D. Every person storing, using or consuming in this state tangible personal property purchased from a retailer OR UTILITY BUSINESS is liable for the tax. The person's liability is not extinguished until the tax has been paid to this state.

E. A receipt from a retailer who AND UTILITY BUSINESS THAT maintains a place of business in this state or from a retailer who AND UTILITY BUSINESS THAT is authorized by the department to collect the tax, under such rules as it may prescribe, and who THAT is for the purposes of this article regarded as a retailer AND UTILITY BUSINESS maintaining a place of business in this state, given to the purchaser as provided in section 42-5161 is sufficient to relieve the purchaser from further liability for the tax to which the receipt refers.

Sec. 32. Section 42-5161, Arizona Revised Statutes, is amended to read:

42-5161 . Collection from purchaser; receipt; tax as debt to state

Every retailer AND UTILITY BUSINESS shall collect from the purchaser the tax imposed by this article and give to such purchaser a receipt therefor in the manner and form prescribed by the department. The tax required to be collected shall be shown separately on the invoice or other proof of sale. The tax required to be collected shall constitute a debt owed by the retailer AND UTILITY BUSINESS to this state.

Sec. 33. Section 42-6103, Arizona Revised Statutes, is amended to read:

42-6103 . County general excise tax; authority to levy; rate; distribution; use of proceeds

A. A county having a population of less than one million five hundred thousand persons, according to the most recent United States decennial census, on a unanimous vote of the board of supervisors, may levy and, if levied, the department shall collect a county general excise tax on each person engaging or continuing in the county in a business taxed under chapter 5, article 1 of this title and section 42-5352, subsection A.

B. The excise tax levied pursuant to subsection A of this section shall be at a rate applied as a percentage of the rates on each class of business subject to the tax imposed by chapter 5, article 1 of this title and section 42-5352, subsection A, not to exceed ten per cent.

C. A COUNTY HAVING A POPULATION OF LESS THAN ONE MILLION FIVE HUNDRED THOUSAND PERSONS, ACCORDING TO THE MOST RECENT UNITED STATES DECENNIAL CENSUS, ON A UNANIMOUS VOTE OF THE BOARD OF SUPERVISORS, MAY LEVY, AND IF LEVIED, THE DEPARTMENT SHALL COLLECT, A COUNTY GENERAL USE TAX ON EACH RETAIL ELECTRICITY CUSTOMER USING OR CONSUMING ELECTRICITY IN THE COUNTY PURCHASED FROM AN ELECTRICITY SUPPLIER.

D. THE USE TAX LEVIED PURSUANT TO SUBSECTION C OF THIS SECTION SHALL BE AT A RATE APPLIED AS A PERCENTAGE OF THE USE TAX IMPOSED BY CHAPTER 5, ARTICLE 4 OF THIS TITLE, NOT TO EXCEED TEN PER CENT. NOTWITHSTANDING SECTION 42-6102, THE USE TAX LEVIED PURSUANT TO SUBSECTION C OF THIS SECTION SHALL BE ADMINISTERED SUBJECT TO CHAPTER 5, ARTICLE 4 OF THIS TITLE.

C. E. At the end of each month the state treasurer shall transmit the net revenues collected pursuant to this section to the treasurer of the county levying the tax. The county shall use these revenues to support and enhance countywide services.

Sec. 34. Joint legislative study committee on electric deregulation issues; members; duties; report

A. A joint legislative study committee on electric deregulation issues is established consisting of the following members:

1. Three members of the senate appointed by the president of the senate, no more than two of whom are members of the same political party. One of these members shall be the chairman of the commerce and economic development committee who serves as cochairman.

2. Three members of the house of representatives appointed by the speaker of the house of representatives, no more than two of whom are members of the same political party, one serving as cochairman.

B. The committee shall meet to study issues involving electric deregulation including the following:

1. Deregulation of billing and metering services and taxation of these services.

2. Taxation issues associated with electric competition.

3. Regulation of public power entities outside their service territory.

4. Constitutional issues relating to facilitating electric competition.

5. Independent system operators.

6. Buy-through.

7. Load profiling.

8. Provider of last resort after competition is phased in.

9. Stranded cost recovery.

10. Low income services.

11. Consumer education and protection.

12. System priority of electric service providers.

13. Transmission system capacity and capability.

14. Public power entities compliance with the code of conduct and affiliate issues between competitive and noncompetitive service electricity providers.

15. System reliability.

16. Antitrust issues.

C. The committee shall submit a report regarding the committee's activities and recommendations for legislative action on or before December 15, 1998 to the governor, the president of the senate, the speaker of the house of representatives, the secretary of state and the director of the department of library, archives and public records.

Sec. 35. Legislative intent

A. The legislature intends by this act to promote and protect the interests of retail electric power customers and the state as a whole by moving from the regulatory framework for delivery of electric generation to a framework under which competition is allowed in the sale of electricity to retail customers. Furthermore, it is in the public interest for the legislature to establish policies for the state to ensure an orderly transition to a competitive market in the retail sale of electricity that should allow citizens of this state and businesses operating in this state to achieve the economic benefits from industry restructuring. Specific policies that the legislature has outlined in this act include:

1. Retail electricity prices set by a competitive market meet the constitutional test of being just and reasonable.

2. That the legislature supports and encourages the Arizona corporation commission and public power entities to coordinate their efforts in transition to electric competition.

3. Competition in the retail sale of electricity is intended to encourage innovation, efficiency and better service to all customers.

4. Reliable electric service is of utmost importance to the safety, health and welfare of this state's citizens and economy.

5. Recovery of existing utilities' stranded costs as determined by the corporation commission and the governing body of the public power entity.

6. The delivery of electricity over distribution systems should continue to be provided through distribution territories, where territories exist, to ensure system safety, reliability, environmental protection and fair access for all market participants.

7. It is important that sufficient supplies of electricity and an adequate transmission and distribution system will be available to serve the citizens and businesses of this state and that electric distribution utilities with service territories continue to have an obligation to provide electric distribution service and act as a supplier of last resort for electric generation service if other electricity suppliers are not willing to supply electric generation service.

8. Public interest programs including bill assistance, rate discount and weatherization programs provide essential aid to both rural and urban at-risk electric retail customers and are supported and encouraged to continue in a competitive retail electric generation service market.

9. The collection of multiple consumers or facilities, or both, for the purpose of negotiating lower electric generation service prices is recognized as a likely outcome of a competitive retail electric generation service market.

B. The legislature also intends to determine the long-range effect of this act by assembling in the year 2008 a commission of legislators, government officials, industry representatives and private citizens, as determined by the president of the senate, the speaker of the house of representatives and the governor, to analyze the benefits and burdens of electric power competition in this state.

Sec. 36. Severability

If any provisions or applications of this act is held invalid, the invalidity does not affect other provisions or applications that can be given effect without the invalid provision or application, and to this end the provisions of this act are severable.

Sec. 37. Applicability

A. This act applies to all electric cooperative nonprofit membership corporations or nonprofit electric generation and transmission cooperative corporations that were subject to title 10, chapter 19, article 2 or 4, Arizona Revised Statutes, on December 31, 1998.

B. Notwithstanding subsection A, any previously valid provisions in the articles of incorporation or bylaws of any electric cooperative nonprofit membership corporation or nonprofit electric generation and transmission cooperative corporation that is subject to title 10, chapter 19, article 2 or 4, Arizona Revised Statutes, on December 31, 1998 that are in conflict with any provision of this act continue to be valid. Any existing electric cooperative nonprofit membership corporation or nonprofit electric generation and transmission cooperative corporation may amend or restate its articles of incorporation and may retain any previously valid provisions of its articles of incorporation that are in conflict with any provision of this act.

Sec. 38. Corporation commission information; suspension

A. The corporation commission shall inform the legislature and provide testimony before the joint legislative study committee on electric deregulation issues if the commission delays the December 31, 1998 or December 31, 2000 date for competition.

B. If after December 31, 1998 the implementation dates for competition for public service corporations are delayed, the governing body of a public power entity may suspend by official resolution further application of section 30-803, subsection A, Arizona Revised Statutes, as added by this act, for up to six months. Any retail electric customers who have selected another electricity supplier before the adoption of the resolution shall not be affected by the official resolution.

Sec. 39. Delayed repeal

Sections 34 and 38 of this act are repealed from and after December 31, 2000.

Sec. 40. Effective date

Sections 42-5010, 42-5063, 42-5151, 42-5155 and 42-5161, Arizona Revised Statutes, as amended by this act, are effective from and after December 31, 1998.

APPROVED BY THE GOVERNOR MAY 29, 1998.

FILED IN THE OFFICE OF THE SECRETARY OF STATE JUNE 1, 1998.