60th Legislature HB0025.05

- 1 - Authorized Print Version - HB 25 HOUSE BILL NO. 25 1 INTRODUCED BY A. OLSON, LASLOVICH 2 BY REQUEST OF THE ENERGY AND TE LECOMMUNICATIONS INTERIM COMMITTEE 3 4 A BILL FOR AN ACT ENTITLED: "AN ACT GENERALLYREVISING THE ELECTRIC UTILITY INDUSTRY 5 RESTRUCTURING AND CUSTOMER CHOICE LAWS; CLAR IFYING LEGISLATIVE FINDINGS AND POLICY 6 PROVISIONS; ELIMINATING AND CLARIFYING CERTAIN DEFINITIONS; DEFINI NG CERTAIN TERMS; 7 CLARIFYING CUSTOMER OPTIONS REGARDING P URCHASING ELECTRICITY SUPPLY; CLARIFYING 8 PUBLIC UTILITY AND COOPERAT IVE UTILITY EXEMPTIONS; CLARIF YING ELECTRIC ITY SUPPLY AND 9 PROCUREMENT REQUIREMENTS; CLARIFYING THE PREAPPROVALAPPROVALPROCESS FOR NEW 10 ELECTRICITY SUPPLY R ESOURCES; REQUIRING THE COMMISSION TO ADDRESS CARBON OFFSETS 11 IN THE APPROVAL PROCESS; CLARIFYING USE OF GENERATION ASSETS; REQUIRING THE PUBLIC 12 SERVICE COMMISSION TO ESTABLISH TARIFFS; AMENDING SECTIONS 15-72-103, 15-72-104, 35-19-102, 13 69-1-114, 69-8-101, 69-8-102, 69-8-103, 69-8-201, 69-8-210, 69-8-311, 69-8-402, 69-8-403, 69-8-411, 69-8-419, 14 69-8-420, 69-8-421, 69-8-602, 69-8-603, AND 69-8-1004, MCA; AND REPEALING SECTIONS 69-8-102, 15 69-8-104, 69-8-202, 69-8-203, 69-8-204, 69-8-208, 69-8-209, 69-8-211, 69-8-301, 69-8-302, 69-8-303, 69-8-304, 16 69-8-308, 69-8-309, 69-8-310, 69-8-401, 69-8-403, 69-8-404, 69-8-408, 69-8-409, AND 69-8-410, AND 69-8-411, 17 MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE ." 18 19 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA: 20 21 Section 1. Section 15-72-103, MCA, is amended to read: 22 "15-72-103. Definitions. As used in this part, unless the cont ext requires otherwise, the following 23 definitions apply: 24 (1) "Customer" or "purchaser" means a person w ho acquires for consideration electricity for use or 25 consumption and not for resale. 26 (2) "Distribution services provider" means a pers on controlling or operating distribution facilities for 27 distribution of electricity to the public . A distribution services provider incl udes a purchaser who takes electricity 28 directly from a transmission line OR SUBSTATION and a purchaser who generates elec tricity for the purchaser's own 29 use but does not include electricity generated by the purc haser for noncommercial use or for agricultural use. 3060th Legislature HB0025.05

- 2 - Authorized Print Version - HB 25 (3) "Person" means an individual, estate, trust, rece iver, cooperative associati on, corporation, limited 1 liability company, firm, partnership, joint venture, syndicate , or other entity, including any gas or electric utility 2 owned or operated by a county, municipality, orother political subdivision of the state. 3 (4) "Transmission services provider" means a person or entitycontrolling or operating transmission 4 facilities as that term is defined in 69-8-103 used for the transmission of electricity ." 5 6 Section 2. Section 15-72-104, MCA, is amended to read: 7 "15-72-104. Wholesale energy transaction tax -- rate of tax -- exemptions -- cost recovery. (1) (a) 8 Except as provided in subsection (3), a wholesale ener gy transaction tax is impos ed upon electricity transmitted 9 within the state as provided in this section. The tax is imposed at a rate of 0.015 cent per kilowatt hour of 10 electricity transmitted by a transmissi on services provider in the state. 11 (b) For electricity produced in the state for delivery outside ofthe state, the taxpay er is the person owning 12 or operating the electrical generation fa cility producing the electricity. The transmission services provider shall 13 collect the tax from the person based upon the kilowa tt hours introduced onto transmission lines from the 14 electrical generation facility. The amount of kilowatt hour s subject to tax must be reduced by 5% to compensate 15 for transmission line losses. 16 (c) For electricity produced in the state for delivery within the state, the tax payer is the distribution 17 services provider. The transmission services provider shall collect the tax based upon the amount of kilowatt 18 hours of electricity delivered to the distribution services provider. The taxpayer may apply for a refund for 19 overpayment of taxes pursuant to 15-72-116. 20 (d) For electricity produced outside the state for delivery inside the state, the tax payer is the distribution 21 services provider. The transmission services providershall collect the tax based upon the amount of kilowatt 22 hours of electricity delivered to t he distribution services provider. 23 (e) For electricity delivered to a distribution services provider that is a rural electric cooperative for 24 delivery to purchasers that have opted for customer choice under the provisions of Title 69, chapter 8, part 3, the 25 taxpayer is the distribution services provider. The transmission services pr ovider shall collect the tax based on 26 the amount of kilowatt hours of electricity delivered to the distribution services provi der that is attributable to 27 customers that have opted for customer choice. 28 (f) For electricity delivered to a distribution servic es provider that prior to May 2, 1999, was owned by 29 a public utility as defined in 69-3-101, the tax is imposed on the successor distribution services provider. The 3060th Legislature HB0025.05

- 3 - Authorized Print Version - HB 25 transmission services provider shall collect the tax based upon the amount of kilowatt hours of electricity delivered 1 to the distribution services provider. 2 (2) (a) If more than one transmission services provider transmits electricity, t he last transmission services 3 provider transmitting or delivering t he electricity shall collect the tax. 4 (b) If the transmission services provider is an agenc y of the United States gov ernment, the distribution 5 services provider receiving the elec tricity shall self-assess the tax subjec t to the provisions of this part. 6 (c) If an electrical generation facility located within the state produces electricity for sale inside and 7 outside the state, sales within the st ate are considered to have come from electricity produced within the state 8 for purposes of the tax imposed by this section. 9 (3) (a) Electricity transmitted through the state thatis not produced or deliver ed in the state is exempt 10 from the tax imposed by this section. 11 (b) Electricity produced in the state by an agency of the United States governmentor electricity produced 12 from an electric energy generation facilit y, as defined in 90-5-101(3), construct ed after May 1, 2001, that is within 13 the exterior boundaries of a Montana Indi an reservation for delivery outside ofthe state is exempt from the tax 14 imposed by this section. 15 (c) Electricity produced by wind turbines erect ed on state land for which annual lease payments are 16 made to the permanent school trust fund is exem pt from the tax imposed by this section. 17 (d) Electricity delivered to a distribution services provider that is a municipal utility described in 18 69-8-103(5)(b) 69-8-103(3)(b) 69-8-103(4)( B ) or a rural electric cooperative or ganized under the provisions of Title 19 35, chapter 18, is exempt from the tax imposed by this section. 20 (e) Electricity delivered to a purchaser that receives its power directly from a transmission or distribution 21 facility owned by an entity of the United States governm ent on or before May 2, 1997, or electricity that is 22 transmitted exclusively on transmission or distributi on facilities owned by an ent ity of the United States 23 government on or before May 2, 1997, is exem pt from the tax imposed by this section. 24 (4) A distribution services provider is allowed to recover the tax imposed by this section and the 25 administrative costs to comply with this part in its rates." 26 27 Section 3. Section 35-19-102, MCA, is amended to read: 28 "35-19-102. Definitions. As used in this chapter, unless the context requires otherwise, the following 29 definitions apply: 3060th Legislature HB0025.05

- 4 - Authorized Print Version - HB 25 (1) "Distribution utility" means the electricity dist ribution portion of a public utility as defined in 69-8-103 1 a utility owning distribution facilities for distribution of electricity to the public

. 2 (2) "Residential customer" means a resi dential customer of a distribution utility. 3 (3) "Small commercial customer" means, for a distri bution utility, individual accounts of a commercial 4 customer with an average monthly demand in the previ ous calendar year of less than 100 kilowatts or a new 5 commercial customer with an estimated av erage monthly demand of less than 100 kilowatts. 6 (4) "Small customer" means a residential customer or small commercial customer of a distribution utility." 7 8 S ECTION 4. S ECTION 69-1-114, MCA, IS AMENDED TO READ : 9 "69-1-114. Fees. (1) Each fee charged by the commission must be reasonable. 10 (2) Except for a fee assessed pursuant to 69-3-204(2), 69-8-421(7) 69-8-421(9) 69-8-421(10) , or 11 69-12-423(2), a fee set by the commission may not exceed $500. 12 (3) All fees collected by the department under 69-8-421(7) 69-8-421(9) 69-8-421(10) must be deposited 13 in an account in the special rev enue fund. Funds in this account mu st be used as provided in 69-8-421(7) 14 69-8-421(9) 69-8-421(10) ." 15 16 Section 5. Section 69-8-101, MCA, is amended to read: 17 "69-8-101. Short title. This chapter may be cited as the "E lectric Utility Industry Restructuring and 18 Customer Choice Transition G ENERATION R EINTEGRATION Act"." 19 20 Section 5. Section 69-8-102, MCA, is amended to read: 21 "69-8-102. Legislative findings and policy. The legislature finds and declares the following declares 22 that the : 23 (1) The generation and sale of electric ity is becoming a competitive industry. 24 (2) Montana customers should have the freedom to c hoose their electricity supply and related services 25 in accordance with this chapter. Affording this opportunity serves the public interest. 26 (3)(1) The interests of small Montana consumers mu st be protected through the provision of adequate 27 and reliable default electricitysupply service at the lowest long-term total cost.; and 28 (4)(2) The financial integrity of elec trical utilities must be fostered. 29 (5) The public interest requires the continued protection of consumers through: 3060th Legislature HB0025.05

- 5 - Authorized Print Version - HB 25 (a) licensure of electricity suppliers; 1 (b) provision of information to cons umers regarding electricity supply service; 2 (c) provision of a process for in vestigating and resolving complaints; 3 (d) continued funding for public purpose programs for: 4 (i) cost-effective local energy conservation; 5 (ii) low-income customer weatherization; 6 (iii) renewable resource projects and applications; 7 (iv) research and development programs rela ted to energy conservation and renewables; 8 (v) market transformation; and 9 (vi) low-income energy assistance; 10 (e) assurance of service reliability and quality; and 11 (f) prevention of anticompet itive and abusive activities. 12 (6) A utility in the state of Montana may not be adv antaged or disadvantaged in the competitive electricity 13 supply market, including the consideration of the ex istence of universal syst em benefits programs and the 14 comparable level of funding for those progr ams throughout the regions neighboring Montana." 15 16 Section 6. Section 69-8-103, MCA, is amended to read: 17 "69-8-103. Definitions. As used in this chapter, unless the context requires otherwise, the following 18 definitions apply: 19 (1) "Aggregator" or "market aggregator" means an entity, licensed by the commission, that aggregates 20 retail customers, purchases electrical energy, and takes ti tle to electrical energy as an intermediary for sale to 21 retail customers. 22 (2) (1) "Assignee" means any entity, including a corpor ation, partnership, board, trust, or financing 23 vehicle, to which a utility assigns, sells , or transfers, other than as security, all or a portion of the utility's interest 24 in or right to transition property. The term also includes an entity, corporation, public authority, partnership, trust, 25 or financing vehicle to which an assignee assigns, sells, or transfers, other than as security, the assignee's 26 interest in or right to transition property. 27 (3) (2) "Board" means the board of investments created by 2-15-1808. 28 (4) "Broker" or "marketer" means an entity, licensed by the commission, that acts as an agent or 29 intermediary in the sale and purchase ofelectrical energy but that does not take title to electrical energy. 3060th Legislature HB0025.05

- 6 - Authorized Print Version - HB 25 (3) "C ARBON OFFSET PROVIDER " MEANS A QUALIFIED THIRD - PARTY ENTITY THAT ARRANGES FOR PROJECTS OR 1
ACTIONS THAT EITHER REDUCE CARBON DIOXIDE EMISSIONS OR THAT INCREASE THE ABSORPTION OF CARBON DIOXIDE

. 2 (5)(3) (4) "Cooperative utility" means: 3 (a) a utility qualifying as an electric cooper ative pursuant to Title 35, chapter 18; or 4 (b) an existing municipal electric utility as of May 2, 1997. 5 (6) "Customer" or "consumer" means a retail electr ic customer or consumer. The university of Montana, 6 pursuant to 20-25-201(1), and Montana state university, pursuant to 20-25-201(2), are each considered a single 7 retail electric customer or cons umer with a single individual load. 8 (5) "C OST - EFFECTIVE CARBON OFFSETS " MEANS ANY COMBINATION OF CERT IFIED ACTIONS THAT ARE TAKEN TO 9
REDUCE CARBON DIOXIDE EMISSIONS OR THAT INCREASE THE ABSORPTION OF CARBON DIOXIDE , WHICH COLLECTIVELY 10
DO NOT INCREASE THE COST OF ELEC TRICITY PRODUCED ANNUALLY ON A PER - MEGAWATT - HOUR BASIS BY MORE THAN 11 2.5%, INCLUDING : 12 ( A ) ACTIONS UNDERTAKEN BY THE APPLICANT THAT RE DUCE CARBON DIOXIDE EMISSIONS OR THAT INCREASE THE 13
ABSORPTION OF CARBON DIOXIDE FROM A FACILITY OR EQUIPMENT USED TO GENERATE ELECTRICITY ; OR 14 ( B ) ACTIONS BY A CARBON OFFSET PR OVIDER ON BEHALF OF THE APPLICANT

. 15 (7)(4) (6) "Customer-generator" means a us er of a net metering system. 16 (8) "Default supplier" means a distribution servic es provider of a utility that has restructured in 17 accordance with this chapter. 18 (9) "Default supply service" means the provis ion of electricity supply by a default supplier. 19 (10) "Distribution facilities" means those facilities by and through whic h electricity is received from a 20 transmission services provider and distributed to the custom er and that are controlled or operated by a distribution 21 services provider. 22 (11) "Distribution services provider" means a utility owning distribution facilities for distribution of electricity 23 to the public. 24 (12) "Electricity supplier" m eans any person, including aggregators , market aggregators, brokers, and 25 marketers, offering to sell electricity to retail customers in the state of Montana. 26 (5) (7) "D ISTRIBUTION FACILITIES " MEANS THOSE FACILITIES BY AND THROUGH WHICH ELECTRICITY IS RECEIVED 27
FROM TRANSMISSION FACILITIES AND DISTRIBUTED TO A RETAIL CUSTOMER AND THAT ARE CONTROLLED OR OPERATED 28
BY A UTILITY

. 29 (13)(5)(6) (8) "Electricity supply costs" means the actual costs of INCURRED IN providing defaultelectricity 3060th Legislature HB0025.05

- 7 - Authorized Print Version - HB 25 supply service THROUGH POWER PURCHASE AGREEMENTS , DEMAND - SIDE MANAGEMENT , AND ENERGY EFFICIENCY 1
PROGRAMS , including but not limited to: 2 (a) capacity costs; 3 (b) energy costs; 4 (c) fuel costs; 5 (d) ancillary service costs; 6 (e) demand-side management and energy efficiency costs; 7 (f) ( E ) transmission costs, including congestion and losses; 8 (g) billing costs; 9 (h) ( F ) planning and administrative costs; AND 10 (i) the revenue requirement for a plant or equipmentowned or leased by a public utility and used for the 11 production of electricity, including capital costs, oper ating costs, and other cost s for a plant or equipment; and 12 (i)(j) ( G ) any other costs directly relat ed to the purchase of electricity, and the management of default 13 electricity supply costs, and provision of defaultelectricitysupply and related services service

. POWER PURCHASE 14
AGREEMENTS

. 15 (7) (9) "E LECTRICITY SUPPLY RESOURCE " MEANS : 16 ( A ) CONTRACTS FOR ELECTRIC CAPACITY AND GENERATION ; 17 ( B ) PLANTS OWNED OR LEASED BY A UTILITY OR EQUIPMENT USED TO GENERATE ELECTRICITY ; 18 ( C ) CUSTOMER LOAD MANAGEMENT AND ENERGY CONSERVATION PROGRAMS ; OR 19 ( D ) OTHER MEANS OF PROVIDING ADEQUATE , RELIABLE SERVICE TO CUSTOMERS , AS DETERMINED BY THE 20
COMMISSION

. 21 (6)(8) (10) "Electricity supply service" means the pr ovision of electricity supply and related services 22
THROUGH POWER PURCHASE AGREEMENTS , THE ACQUISITION AND OPERATION OF ELECTRICAL GENERATION FACILITIES , 23
DEMAND - SIDE MANAGEMENT , AND ENERGY EFFICIENCY PROGRAMS

. 24 (14)(7)(9) (11) "Financing order" means an order of the commission adopted in accordance with 69-8-503 25 that authorizes the imposition and collection of fix ed transition amounts and the issuance of transition bonds. 26 (15)(8)(10) (12) (a) "Fixed transition amounts" means thos e nonbypassable rates or charges, including 27 but not limited to: 28 (i) distribution; 29 (ii) connection; 3060th Legislature HB0025.05

- 8 - Authorized Print Version - HB 25 (iii) disconnection; and 1 (iv) termination rates and charges that are authoriz ed by the commission in a financing order to permit 2 recovery of transition costs and the co sts of recovering, reimbursing, financi ng, or refinancing the transition costs 3 and of acquiring transition property through a plan approv ed by the commission in the financing order, including 4 the costs of issuing, servic ing, and retiring transition bonds. 5 (b) If requested by the utility in the utility's applicat ion for a financing order, fixed transition amounts must 6 include nonbypassable rates or charges to recover federal and state taxes in which the transition cost recovery 7 period is modified by the transacti ons approved in the financing order. 8 (16) "Functionally separate" means a utility's separati on of the utility's electricity supply, transmission, 9 distribution, and unregulated retail energyservices assets and operations. 10 (11) (13) "G ENERATION ASSETS COST OF SERVICE " MEANS A RETURN ON INVESTED CAPITAL AND ALL COSTS 11
ASSOCIATED WITH THE ACQUISITION , CONSTRUCTION , ADMINISTRATION , OPERATION , AND MAINTENANCE OF A PLANT OR 12
EQUIPMENT OWNED OR LEASED BY A PUBLIC UTILITY AND USED FOR THE PRODUCTION OF ELECTRICITY

. 13 (17)(9)(12) (14) "Interested person" means a retail electricity customer, the consumer counsel established 14 in 5-15-201, the commission, or a utility. 15 (18)(10)(13) (15) "Large customer" means, for universal sy stem benefits programs purposes, a customer 16 with an individual load greater than a monthly average of 1,000 kilowatt demand in the previous calendar year 17 for that individual load. 18 (19)(11)(14) (16) "Local governing body" means a local board of trustees of a rural electric cooperative. 19 (20)(12)(15) (17) "Low-income customer" means those ener gy consumer households and families with 20 incomes at or below industry-recognized levels thatqualify those consumers for low-income energy-related 21 assistance. 22 (21)(13)(16) (18) "Net metering" means measuring the differ ence between the electricity distributed to and 23 the electricity generated by a customer- generator that is fed back to the di stribution system during the applicable 24 billing period. 25 (22)(14)(17) (19) "Net metering system" means a facility fo r the production of electrical energy that: 26 (a) uses as its fuel solar, wind, or hydropower; 27 (b) has a generating capacity of not more than 50 kilowatts; 28 (c) is located on the customer-generator's premises; 29 (d) operates in parallel with t he distribution services provider's UTILITY ' S distribution facilities; and 3060th Legislature HB0025.05

- 9 - Authorized Print Version - HB 25 (e) is intended primarily to offsetpart or all of the customer-generat or's requirements for electricity. 1 (15) "New electricity supply re source" means an electricity suppl y power purchase agreement or an 2 equity interest in a new or existi ng electric energy generation facility. 3 (23)(16)(18) (20) "Nonbypassable rates or charges" means ra tes or charges that are approved by the 4 commission and imposed on a customer to pay the customer 's share of transition costs or universal system 5 benefits programs costs even if the customer has physically bypas sed either the utility's transmission or 6 distribution facilities. 7 (24) "Pilot program" means an experimental program usi ng a select set of small customers to assess the 8 potential for developing and offering customer choice of el ectricity supply to small customers in the future. 9 (25)(17)(19) (21) "Public utility" means any electric utilityhas the meaning of a public utilityregulated by 10 the commission pursuant to Title 69, chapter 3, on Ma y 2, 1997, including the public utility's successors or 11 assignees , ON M AY 2, 1997, INCLUDING THE PUBLIC UTILITY ' S SUCCESSORS OR ASSIGNEES

. 12 (26)(18)(20) (22) "Qualifying load" means, fo r payments and credits associated with universal system 13 benefits programs, all nonresidential demand-metered accounts of a large customer within the utility's service 14 territory in which the customer qualifies as a large customer. 15 (27) "Small customer" means a residential custom er or a commercial customer who has an individual 16 account with an average monthly demand in the previous calendar year of less than 50 kilowatts or a new 17 residential or commercial customer with an estimat ed average monthly demand of less than 50 kilowatts of a 18 public utility that has restructured pursuant to Title 35, chapter 19, or this chapter. 19 (19)(21) (23) "Retail customer" means a customer that purchases electricity for residential, commercial, 20 or industrial end-use purposes and does not resell electricity to others. 21 (28)(20)(22) (24) "Transition bondholder" means a holder of tr ansition bonds, including trustees, collateral 22 agents, and other entities acting fo r the benefit of that bondholder. 23 (29)(21)(23) (25) "Transition bonds" means any bond, debenture, note, interim certificate, collateral, trust 24 certificate, or other evidence of indebtedness or ownership issued by the board or other transition bonds issuer 25 that is secured by or payable from fixed transition amounts or transiti on property. Proceeds from transition bonds 26 must be used to recover, reimburse, finance, or refi nance transition costs and to acquire transition property. 27 (30)(22)(24) (26) "Transition charge" means a nonbypassable ra te or charge to be imposed on a customer 28 to pay the customer's share of transition costs. 29 (31)(23)(25) (27) "Transition cost recovery period" m eans the period beginning on July 1, 1998, and 3060th Legislature HB0025.05

- 10 - Authorized Print Version - HB 25 ending when a utility customer does not have any liability for payment of transition costs. 1 (32)(24)(26) (28) "Transition costs" means: 2 (a) a public utility's net verifiable generation-related and electricity supply costs, including costs of capital, 3 that become unrecoverable as a result of the implementation of this chapter or offederal law requiring retail open 4 access or customer choice or of this chapter ; 5 (b) those costs that include but are not limited to: 6 (i) regulatory assets and deferred charges that ex ist because of current regulatory practices and can be 7 accounted for up to the effective date of the commission's final order regardi ng a public utility's transition plan and 8 conservation investments made prior to unive rsal system benefits charge implementation; 9 (ii) nonutility and utility power purchase contracts executed before May 2, 1997, including qualifying 10 facility contracts; 11 (iii) existing generation investments and supply commi tments or other obligations incurred before May 12 2, 1997, and costs arising from these investments and commitments; 13 (iv) the costs associated with renegotiation or buy out of the existing nonutility and utility power purchase 14 contracts, including qualifying facilitie s and all costs, expenses, and reasonable f ees related to issuing transition 15 bonds; and 16 (v) the costs of refinancing and reti ring of debt or equity capital of the public utility and associated federal 17 and state tax liabilities or other utility costs for whic h the use of transition bonds would benefit customers. 18 (33) "Transition period" means the period ending July 1, 2027. 19 (34)(25)(27) (29) "Transition property" means the property right created by a financing order, including 20 without limitation the right, title, and in terest of a utility, assignee, or other issuer of transition bonds to all revenue, 21 collections, claims, payments, money, orproceeds of or arising from or c onstituting fixed transition amounts that 22 are the subject of a financing order, including those nonbypassable rates and other charges and fixed transition 23 amounts that are authorized by the co mmission in the financing order to recover transition costs and the costs 24 of recovering, reimbursing, financing, or refinanci ng the transition costs and acquiring transition property, 25 including the costs of issuing, servicing, and retiring transition bonds. Any right that a utility has in the transition 26 property before the utility's sale or tr ansfer or any other right created under th is section or created in the financing 27 order and assignable under this chapter or assignable purs uant to a financing order is only a contract right. 28 (35) "Transmission facilities" means those facilities that are used to provide transmission services as 29 determined by the federal energy r egulatory commission and the commission. 3060th Legislature HB0025.05

- 11 - Authorized Print Version - HB 25 (36) "Transmission services provider" means an ent ity controlling or operating transmission facilities. 1 (28) (30) "T RANSMISSION FACILITIES " MEANS THOSE FACILITIES THAT ARE USED TO PROVIDE TRANSMISSION 2
SERVICES AS DETERMINED BY THE FEDERAL ENERGY REGU LATORY COMMISSION AND THE COMMISSION AND THAT ARE 3
CONTROLLED OR OPERATED BY A UTILITY

. 4 (37)(26)(29) (31) "Universal system benefits charge" m eans a nonbypassable rate or charge to be 5 imposed on a customer to pay the customer's s hare of universal system benefits programs costs. 6 (38)(27)(30) (32) "Universal system benefits program s" means public purpose programs for: 7 (a) cost-effective local energy conservation; 8 (b) low-income customer weatherization; 9 (c) renewable resource projects and applications, including those that capture unique social and energy 10 system benefits or that provide trans mission and distributi on system benefits; 11 (d) research and development programs rela ted to energy conservation and renewables; 12 (e) market transformation designed to encourage co mpetitive markets for public purpose programs; and 13 (f) low-income energy assistance. 14 (39)(28)(31) (33) "Utility" means any public utility or cooperative utility." 15 16 Section 7. Section 69-8-201, MCA, is amended to read: 17 "69-8-201. Public utility -- transition to customer choice --customer ELECTRICITY SUPPLY SERVICE 18 options and requirements -- waiverexemption -- TARIFFS . (1) Before July 1, 2027, all public utility customers 19 of a public utility that has restructur ed in accordance with this chapter must have the opportunity to choose an 20 electricity supplier other than the default supplier. 21 (2) (a) A small customer of a public utility that has restructured in accordance with this chapter: 22 (i) must receive default supply services from t he default supplier as provided in this chapter; and 23 (ii) may purchase electricity s upply services through a commission-approved small customer electricity 24 supply program as provided in this section. 25 (b) A small customer receiving electricity from a licensed supplier prior to July 1, 2003, may continue to 26 receive electricity supply from a s upplier other than the default supplier. 27 (c) Customers that represent separately meter ed services with an estimated average monthly demand 28 of less than 50 kilowatts related to the same individual customer referred to in subsection (3) or (4) may be 29 combined with the respective eligible customer load or loads. 3060th Legislature HB0025.05

- 12 - Authorized Print Version - HB 25 (3) (a) Subject to subsection (3)(b), a customer of a public utility that has restructured in accordance with 1 this chapter and that has an individual load with an average monthly demand of less than 5,000 kilowatts but 2 greater than or equal to 50 kilowatts may choose an electricity supplier. 3 (b) The total average monthly billing demand for a ll customers that choose an electricity supplier 4 pursuant to subsection (3)(a) in each cal endar year may not exceed 20,000 kilowatts. 5 (c) A customer referred to in subsection (3)(a) rece iving electricity from a lic ensed supplier prior to July 6 1, 2003, may continue to receive electricity suppl y from a supplier other than the default supplier. 7 (4) (1) (a) Except as provided in subsections (4)(b) (1)(b) through (4)(e) and (1)(c) , a retail customer of 8 a utility that has restructured in accordance with this chapter and that has an individual load with an average 9 monthly demand of greater than or equal to 5,000 kilowatts shall purchase its entire el ectricity supply from the 10 competitive marketplace and that is not purchas ing electricity supply SERVICE from a public utility on [the effective 11 date of this act] may not pur chase electricity supply se rvice from a public utility

. 12 (b) A customer referred to in subsection (4)(a) that is receiving its electricity supply from the competitive 13 marketplace may make a one-time election to enter in to a permanent power supply contract with the default 14 supplier for service on or after July 1, 2004. These c ontracts must include the applic able provisions established 15 by the commission pursuant to subsection (5). This elec tion must be submitted to the commission in writing no 16 later than December 31, 2003. 17 (c) (b) A newretail customer with an estimated average mont hly demand of greater than or equal to 5,000 18 kilowatts may enter into a power supply contract with the default supplier in order to receive default supply service 19 referred to in subsection (1)(a) may r equest electricity supply service from the public utility, and the public utility 20 may agree to MUSTprovide electricity supply service if the reta il customer demonstrates that the provision of 21 electricity supply service to the retail cust omer will not adversely impact the rates ofthe public utility's other 22 customers over the long term as determined by the commission . The new customer's election of an electricity 23 supplier must be submitted in writing to the commission at least 90 days before delivery of electricity. These 24 contracts must include the applicable provisions est ablished by the commission pursuant to subsection (5). 25 (d) A customer referred to in subsection (4)(a) thatwas receiving electricity from the default supplier on 26 July 1, 2003, may continue to receive electricity from the default supplier. 27 (c) If a public utility provides electricity supply serv ice to a retail customer as provided in subsection 28 (1)(b), that service is regulated by the commission and the customer may not, ata later date, purchase electricity 29 supply service from another providerof electricity supply service. 3060th Legislature HB0025.05

- 13 - Authorized Print Version - HB 25 (e) A customer referred to in subsection (4)(a) t hat is a public agency, as defined in 18-1-101, may enter 1 into a power supply contract with the default supplier for default supply service for all or part of the public agency's 2 load. These contracts must include the applicable pr ovisions established by the commission pursuant to 3 subsection (5). 4 (5) The commission shall adopt rules and establish rates and fees to enable customers to have 5 reasonable opportunities to choose an elec tricity supplier or to receive defaul t supply service in accordance with 6 subsections (2) through (4), while providing protection fo r small customers from higher or more unstable default 7 supply service rates than would otherwise re sult if these choices were not offered. 8 (6) An electricity supplier licensed by the commission to offer electricity supply service to small customers 9 may petition the commission for the opportunity to provi de electricity to small customers. The total average 10 monthly demand for all customers referred to in subsection (2)(a) in each calendar year that receive service from 11 an electricity supplier that is notthe default supplier may not exceed 10,000 kilowatts. The commission shall 12 ensure that electricity supply service provided pursuant to this subsection is consistent with the requirements in 13 subsection (5) and the provision of default supply service pursuant to this chapter. 14 (7) Based on an analysis of the sources of costs of providing default supply service, the commission 15 may: 16 (a) establish different categories of default supply se rvice customers to assistwith the implementation 17 of this section; 18 (b) allocate default supply costs; and 19 (c) develop default supply rates. 20 (8) (a) Except as provided in subsection (8)(b), a customer receiving default supply service may not 21 resell the electricity. 22 (b) A default supplier may implement demand reducti on programs that reward customers for reducing 23 demand under terms established by the commission. 24 (2) ( A ) ARETAIL CUSTOMER THAT HAS AN INDIVIDUAL LOAD WITH AN AVERAGE MONTHLY DEMAND OF LESS THAN 25 5,000 KILOWATTS AND THAT IS NOT PURCHASING ELECTRIC ITY FROM A PUBLIC UTILITY ON [ THE EFFECTIVE DATE OF THIS 26
ACT ] OR A SMALL CUSTOMER OF A BUYING COOPERATIVE PURSUANT TO T ITLE 35, CHAPTER 19, THAT IS NOT PURCHASING 27
ELECTRICITY FROM A PUBLIC UTILITY ON [ THE EFFECTIVE DATE OF THIS ACT ] MAY CONTINUE TO PURCHASE ELECTRICITY 28
FROM AN ELECTRICITY SUPPLIER OR A BUYI NG COOPERATIVE ESTABLISHED PURSUANT TO T ITLE 35, CHAPTER 19

. T HE 29
RETAIL CUSTOMER OR SMALL CUSTOMER OF A BUYING COOPERATIVE PURSUANT TO T ITLE 35, CHAPTER 19, MAY 3060th Legislature HB0025.05

- 14 - Authorized Print Version - HB 25 SUBSEQUENTLY PURCHASE ELECTRICITY FROM A PUBLIC UTILITY SUBJEC T TO COMMISSION RULE OR ORDER , BUT THE 1
CUSTOMER MAY NOT , AT A LATER DATE , CHOOSE TO PURCHASE ELECTR ICITY FROM ANOTHER SOURCE

. 2 ( B ) A E XCEPT AS PROVIDED IN SUBSECTION (3), A ARETAIL CUSTOMER THAT HAS AN INDIVIDUAL LOAD WITH AN 3
AVERAGE MONTHLY DEMAND OF LESS THAN 5,000 KILOWATTS AND THAT IS CURRENTLY PURCHASING ELECTRICITY FROM 4
A PUBLIC UTILITY MAY NOT CHOOSE TO PURCH ASE ELECTRICITY FROM ANOTHER SOURCE AFTER [ THE EFFECTIVE DATE OF 5
THIS ACT ]. 6 (3) S UBJECT TO THE TARIFFS ESTABLISHED PURSUANT TO SUBSECTION (6) AND NOTWITHSTANDING ANY OTHER 7
PROVISIONS OF THIS SECTION , A SMALL CUSTOMER , AS DEFINED IN 35-19-102, MAY : 8 ( A ) CHOOSE TO PURCHASE ELECTRICITY FROM A BUYING COOPERATIVE PURSUANT TO T ITLE 35, CHAPTER 19; 9
AND 10 ( B ) SUBSEQUENTLY PURCHASE ELECTRIC ITY FROM A PUBLIC UTILITY

. 11 (3)(4) (3) N OTHING IN THIS SECTION AFFECTS A RETAIL CUSTOMER ' S THE A RETAIL CUSTOMER ' S RIGHTS AND 12
OBLIGATIONS OF A CUSTOMER PURSUANT TO SUBSECTION (3) OR THE RIGHTS AND OBLIGATIONS OF A RETAIL CUSTOMER 13
WITH RESPECT TO NET METERING , COGENERATION , SELF - GENERATION , OR ANCILLARY SALES OF ELECTRICITY RELATED 14
TO DEVIATIONS FROM SCHEDULED ENERGYDELIVERIES FROM NONUTILITY SUPPLIERS , AS MAY BE PROVIDED FOR IN LAW , 15
COMMISSION RULE OR ORDER , OR A TARIFF APPROVED BY THE PUBLIC SER VICE COMMISSION OR THE FEDERAL ENERGY 16
REGULATORY COMMISSION

. 17 (9)(2)(4)(5) (4) (a) Except as provided in 69-5- 101, 69-5-102, 69-5-104 through 69-5-112, and 69-8-402, 18 and subsection (2)(b) (4)( B ) (5)( B ) (4)( B ) of this section, a public utility currently doing business in Montana as part 19 of a single integrated multistate operat ion, no portion of which lies within the basin of the Columbia River, may 20 defer compliance with this chapter until a time that the public utility can reasonably implement customer choice 21 in the state of the public ut ility's primary service territoryis exempt from the requirements of this chapter

. 22 (b) To the extent that a public utility described in subsection (9)(a) (2)(a) (4)( A ) (5)( A ) (4)( A ) becomes the 23 successor in interest of another public utility that has restructured in accordance with this chapter before [the 24 effective date of this act] , it shall assume responsibility onl y for the applicable transition plan ofit is subject to the 25 requirements of this chapter with respect to the service area ofthe acquired public utility. 26 (6) U PON THE REQUEST OF AN ELECTRICITY SUPPLIER OR A BUYING COOPERATIVE FORMED PURSUANT TO T ITLE 27 35, CHAPTER 19, THE COMMISSION SHALL PREPARE THE FOLLOWING TARIFFS FOR PUBLIC UTILITIES : 28 ( A ) A NONDISCRIMINATORY , COST - BASED TARIFF INDICATING THE COSTS THAT A PUBLIC UTILITY WILL INCUR IF 29
TRANSMISSION AND DISTRIBUTION SERVICES ARE PROVIDED TO ANOTHER ELECTRICITY SUPPLIER ; 3060th Legislature HB0025.05

- 15 - Authorized Print Version - HB 25 ( B ) A NONDISCRIMINATORY , COST - BASED REENTRY TARIFF FOR THE RELEVAN T CUSTOMER CLASS TO DEFRAY THE 1
COSTS OF A CUSTOMER RETURNING TO A PUBLIC UTILITY , WITH THE COMMISSION TAKING INTO ACCOUNT , AMONG OTHER 2
THINGS , THE BENEFIT TO THE PUBLIC UTILITY CUSTOMERS OF HAVING INCREASED LOAD FROM THE ADDITIONAL CUSTOMER 3
TO DEFRAY COSTS ON ALL OF ITS SYSTEMS ; AND 4 ( C ) A NONDISCRIMINATORY , COST - BASED TARIFF FOR A CUSTOMER CLASS TO DEFRAY THE UNRECOVERED , 5
EMBEDDED COSTS OF CUSTOMERS THAT LEAVE THE UTILITY

. T HE COMMISSION SHALL , IN MAKING A DECISION ON A TARIFF , 6
TAKE INTO ACCOUNT THE FOLLOWING : 7 ( I ) ADDITIONAL DEMANDS ON THE ENERGY SUPPLY SYSTEM THAT CAN DEFRAY THE LOSS OF CUSTOMERS ; 8 ( II ) THE EXTENT TO WHICH THE CUSTOMER LEAVING THE ENERGY SUPPLY SYSTEM WILL ENABLE THE UTILITY TO 9
PURCHASE LESS POWER , DECREASING SPOT - MARKET OR SHORT - TERM CONTRACT PURCHASES ; 10 ( III ) THE BENEFIT TO THE UTILITY OF NOT NEEDING TO CONSTRUCT ADDITIONAL GENERATION FACILITIES ; AND 11 ( IV ) ANY OTHER FACTORS THAT THE COMMISSION CONSIDERS NECESSARY

. 12 (10) Upon a request from a public utility with fewer than 50 customers, the commission shall waive 13 compliance with the requirements of 69-8-104, 69- 8-202 through 69-8-204, 69-8- 208 through 69-8-211, 69-8-402, 14 and this section. " 15 16 Section 8. Section 69-8-210, MCA, is amended to read: 17 "69-8-210. Public utilities -- electricity supply -- environmentally preferred resources

. (1) A public 18 utility's distribution services providershall provide default supply service. 19 (2) (1) The commission shall establish an electricity co st recovery mechanism that allows a default 20 supplierpublic utilityto fully recover prudently incurred electricity supply costs, subject to the provisions of 21 69-8-419 and , 69-8-420, AND COMMISSION RULES

. T HE COMMISSION MAY INCLUDE OTHER UTILITY COSTS AND EXPENSES 22
IN THE COST RECOVERY MECHANISM IF IT DETERMINES THATINCLUDING ADDITIONAL COSTS AND EXPENSES IS REASONABLE 23
AND IN THE PUBLIC INTEREST . The cost recovery mechanism must provi de for prospective rate adjustments for cost 24 differences resulting from cost changes, load changes , and the time value of money on the differences. 25 (3) The commission may direct a default supplier to offer its customers multiple default supply service 26 options if the commission determines thatthose options are in the public interest and are consistent with the 27 provisions of 69-8-104 and 69-8-201. 28 (4) (2) Notwithstanding any service opt ions that the commission may require pursuant to subsection (3), 29 a default supplier , a public utilityshall offer its customers the option of purchasing a product composed of or 3060th Legislature HB0025.05

- 16 - Authorized Print Version - HB 25 supporting power from certified environment ally preferred resources that incl ude but are not limited to wind, solar, 1 geothermal, and biomass, subject to review and approval by the commission. The commission shall ensure that 2 these resources have been certified as meeting industry-accepted standards. 3 (5) (a) Subject to subsection (5)(b), the commission s hall, in reviewing the procurement of electricity 4 supply by the default supplier, take into account the statewide economic benefits thatare associated with the 5 electricity supply procurement for the default supply stakeholders. The default supply stakeholders include the 6 default supplier, customers of t he default supplier, and the public. 7 (b) The consideration of economic benefits is sec ondary to the considerati on of the costs and benefits 8 to the consumer and other cr iteria established by law. 9 (6) If a public utility intends to be an electricit y supplier through an unregulated division, then the public 10 utility must be licensed as an electr icity supplier pursuant to 69-8-404. " 11 12 Section 9. Section 69-8-311, MCA, is amended to read: 13 "69-8-311. Cooperative utility -- electricity supply service --exemption. (1) A local governing body 14 shall establish the price for electricity supply service o ffered by a cooperative utility. 15 (1) Within 1 year after May 2, 1997, a cooperative ut ility may file a notice with the commission that the 16 cooperative utility does not intend to open the cooperative utility's distribution fa cilities to electricity suppliers and 17 does not intend to adopt a transition plan. 18 (2) Except as otherwise provided in the universal system benefits program pursuant to 69-8-402, a 19 cooperative utility filing notice under this section is exempt from the provisions and requirements of this chapter. 20 (2) A cooperative utility filing a notice under this section: 21 (a) may elect later to adopt a transition plan in accordance with this chapter; and 22 (b) may not use a public utility's distributi on facilities unless preexisting contracts exist. " 23 24 S ECTION 10. S ECTION 69-8-402, MCA, IS AMENDED TO READ : 25 "69-8-402. Universal system benefits programs. (1) Universal system benefits programs are 26 established for the state of Montana to ensure continued funding of and newexpenditures for energy 27 conservation, renewable resource projects and applications, and low-income energy assistance. 28 (2) Beginning J anuary 1, 1999, 2. 4% of each utility's annual retail sales revenue in Montana for the 29 calendar year ending December 31, 1995, is established as the initial funding level for universal system benefits 3060th Legislature HB0025.05

- 17 - Authorized Print Version - HB 25 programs. To collect this amount of funds on an annualiz ed basis in 1999, the commission shall establish rates 1 for utilities subject to its jurisdiction and the governing boards of cooperatives shall establish rates for the 2 cooperatives. These universal system benefits charge rates must remain in effect through December 31, 2009. 3 (a) The recovery of all universal system benefit s programs costs imposed pursuant to this section is 4 authorized through the imposition of a universal system benefits charge assessed at the meter for each local 5 utility system customer as provided in this section. 6 (b) A utility must receive credit toward annual fundi ng requirements for the utility's internal programs or 7 activities that qualify as universal system benefits programs, including t hose amortized or nonamortized portions 8 of expenditures for the purchase of power that ar e for the acquisition or support of renewable energy, 9 conservation-related activities, or lo w-income energy assistance, and for lar ge customers' programs or activities 10 as provided in subsection (7). The department of revenue shall review clai med credits of the utilities and large 11 customers pursuant to 69-8-414. 12 (c) A utility's distribut ion services providerutilityat which the sale of power for final end use occurs is the 13 utility that receives credit for the unive rsal system benefits programs expenditure. 14 (d) A customer's distri bution services providerutilityshall collect universal system benefits funds less 15 any allowable credits. 16 (e) For a utility to receive credit for low-income-rela ted expenditures, the activi ty must have taken place 17 in Montana. 18 (f) If a utility's or a large customer's credit for internal activities does not satisfy the annual funding 19 provisions of subsection (2), then the utility shall make a payment to the uni versal system benefits fund 20 established in 69-8-412 for any difference. 21 (3) Cooperative utilities may collectively pool thei r statewide credits to satisfy their annual funding 22 requirements for universal system benefits programs and low-income energy assistance. 23 (4) A utility's transition plan must describe how t he utility proposes to provide for universal system 24 benefits programs, including the methodologies, such as cost-effectiveness and need determination, used to 25 measure the utility's level of contribution to each program. 26 (5) A utility's minimum annual funding requirement fo r low-income energy and weatherization assistance 27 is established at 17% of the utility' s annual universal system benefits funding level and is inclusive within the 28 overall universal system benefits funding level. 29 (a) A utility must receive credit toward the utility's low-income energy assistance annual funding 3060th Legislature HB0025.05

- 18 - Authorized Print Version - HB 25 requirement for the utility's internal low-inco me energy assistance programs or activities. 1 (b) If a utility's credit for internal activities does not satisfy its annual funding requirement, then the utility 2 shall make a payment for any difference to the unive rsal low-income energy assistance fund established in 3 69-8-412. 4 (6) An individual customer may not bear a di sproportionate share of the local utility's funding 5 requirements, and a sliding scale must be implemented to provide a more equitable dist ribution of program costs. 6 (7) (a) A large customer: 7 (i) shall pay a universal system benefits programs charge with respect to the large customer's qualifying 8 load equal to the lesser of: 9 (A) $500,000, less the large customer credits provided for in this subsection (7); or 10 (B) the product of 0.9 mills per kilowatt hour mult iplied by the large customer's total kilowatt hour 11 purchases, less large customer credits with respect to that qualifying load provided for in this subsection (7); 12 (ii) must receive credit toward that large cust omer's universal system benefits charge for internal 13 expenditures and activities that qualify as a universal system benefits programs ex penditure, and these internal 14 expenditures must include but not be limited to: 15 (A) expenditures that result in a r eduction in the consumption of electr ical energy in the large customer's 16 facility; and 17 (B) those amortized or nonamortized portions of expenditures for the purchase of power at retail or 18 wholesale that are for the acquisition or support of renewable energy or conserva tion-related activities. 19 (b) Large customers making these expenditures mustreceive a credit against the large customer's 20 universal system benefits char ge, except that any of those amounts expended in a cal endar year that exceed that 21 large customer's universal system benefits charge for the calendar year mu st be used as a credit against those 22 charges in future years until the total amount of those expenditures has been credited against that large 23 customer's universal system benefits charges. 24 (8) A public utility shall prepare and submit an annual summary report of the public utility's activities 25 relating to all universal system benefits programs to the commission, the departmentof revenue, and the energy 26 and telecommunications interim committee provided for in 5-5-230. A cooperative utility shall prepare and submit 27 annual summary reports of activities to the cooperative utility's respective local governing body, the statewide 28 cooperative utility office, and the energy and telecommunica tions interim committee. The statewide cooperative 29 utility office shall prepare and submit an annual summary report of the activities of individual cooperative utilities, 3060th Legislature HB0025.05

- 19 - Authorized Print Version - HB 25 including a summary of the pooling of statewide credits , as provided in subsection (3), to the department of 1 revenue and the energy and telecommunications interim commi ttee. The annual report of a public utility or of the 2 statewide cooperative utility office must include but is not limited to: 3 (a) the types of internal utility and customer programs being used to satisfy the provisions of this chapter; 4 (b) the level of funding for those programs rela tive to the annual funding requirements prescribed in 5 subsection (2); and 6 (c) any payments made to the statew ide funds in the event that inter nal funding was below the prescribed 7 annual funding requirements. 8 (9) A utility or large customer filing for a credi t shall develop and maintain appropriate documentation 9 to support the utility's or the large customer's claim for the credit. 10 (10) (a) A large customer claiming credits for a calendar year shall submit an annual summary report of 11 its universal system benefits program s activities and expenditures to the department of revenue and to the large 12 customer's utility. The annual report of a large customermust identify each qualifying project or expenditure for 13 which it has claimed a credit and the amount of the credi t. Prior approval by the department of revenue or the 14 utility is not required, except as provided in subsection (10)(b). 15 (b) If a large customer claims a credit that the department of revenue disallows in whole or in part, the 16 large customer is financially responsible for the disallo wance. A large customer and the large customer's utility 17 may mutually agree that credits clai med by the large customer be first approved by the utility. If the utility 18 approves the large customer credit, the utility may be fi nancially responsible for any subsequent disallowance." 19 20 S ECTION 11. S ECTION 69-8-403, MCA, IS AMENDED TO READ : 21 "69-8-403. Commission authority --rulemaking authority. (1) Beginning on the effective date of a 22 commission order regarding a public utility's transition plan, the commission shall regulate the public utility's retail 23 transmission, distribution, and default suppl y services within the state of M ontana, as provided in this chapter. 24 (2) The commission shall license electricity supp liers and enforce licensing provisions pursuant to 25 69-8-404. 26 (3) The commission shall promulgate rules that identify the licensees and ensure that the offered 27 electricity supply is provided as offered and is adequate in terms of quality, safety, and reliability. 28 (4) The commission shall establish just and reasonable rates through established ratemaking principles 29 for public utility default supply, dist ribution, and transmission services and shall regulate these services. The 3060th Legislature HB0025.05

- 20 - Authorized Print Version - HB 25 commission may approve rates and charges for those serv ices based on alternative forms of ratemaking such 1 as performance-based ratemaking, on a demonstration by t he public utility that the alternative method complies 2 with this chapter, and on the public utility's transition plan. 3 (5) The commission shall certify that a cooperative utility has adopted a transition plan that complies with 4 this chapter. A cooperative utility's trans ition plan is considered certified 60 days after the cooperative utility files 5 for certification. 6 (6) The commission shall promulgate rules that protec t consumers, distribution services providers, and 7 electricity suppliers from ant icompetitive and abusive practices. 8 (7) (a) After July 1, 2010, the commission shall cont inuously monitor whether ornot workable competition 9 has developed for small customers. 10 (b) If the commission determines that workable com petition has developed for small customers after July 11 1, 2010, the commission shall provide a report to the legi slature that includes reco mmendations for legislative 12 implementation of customer choice for small customers. 13 (8) In addition to promulgating rules expressly provided for in this chapter, the commission may 14 promulgate any other rules necessary to ca rry out the provision of this chapter. 15 (9) This chapter does not give the commission the authority to: 16 (a) regulate cooperative utilities in any manner other than reviewing ce rtification filings for compliance 17 with this chapter; or 18 (b) compel any change to a cooperative utility's ce rtification filing made pursuant to this chapter. " 19 20 S ECTION 12. S ECTION 69-8-411, MCA, IS AMENDED TO READ : 21 "69-8-411. Nondiscriminatory access -- reciprocity

. Except as provided in 69-8-311, all electricity 22 suppliers must be afforded open, fair, and nondiscriminat ory access to customers and a comparable opportunity 23 to compete. A distribution services pr ovider or the distributi on services provider's affiliates may not use another 24 distribution services provider's facilit ies in the state of Montana to sell el ectricity to customers in the state of 25 Montana unless the first distribution services provider orthe distribution services provider's affiliates offer 26 comparable and nondiscriminatory access to the distribution services provider's distribution facilities within the 27 state of Montana. (1) Nonutility generators and, BUYING COOPERATIVES FORMED PURSUANT TO T ITLE 35, CHAPTER 28 19, AND electricity suppliers must have open, fair, and nondi scriminatory access to a public utility's transmission 29 and distribution facilities according to federal energyregulatory commission rules and regulations for purposes 3060th Legislature HB0025.05

- 21 - Authorized Print Version - HB 25 of serving those custom ers identified in 35-19-102 AND 69-8-201(1) and (2). 1 (2) Public utilities shall grant the retail customers identified in 69-8-201(1) and (2) AND SMALL CUSTOMERS 2
PURSUANT TO 35-19-102 and their electricity suppliers access to tr ansmission and distribution facilities at rates 3 and under terms and conditions comparable to the public utilit y's own access to those facilities or access by the 4 public utility's affiliates. 5 (3) Public utilities shall file tariffs for transmission and distribution services r egulated by the federal energy 6 regulatory commission and the commission im plementing subsections (1) and (2). " 7 8 Section 13. Section 69-8-419, MCA, is amended to read: 9 "69-8-419. DefaultElectricity supply resource planning and procurement -- duties of default 10 supplierpublic utility-- objectives -- commission rules. (1) The default supplierpublic utilityshall: 11 (a) plan for future defaultelectricitysupply resource needs; 12 (b) manage a portfolio of defaultelectricitysupply resources; and 13 (c) procure new defaultelectricitysupply resources when needed. 14 (2) The default supplierpublic utilityshall pursue the following objectives in fulfilling its duties pursuant 15 to subsection (1): 16 (a) provide adequate and reliable default supply services electricity supply service at the lowest long-term 17 total cost; 18 (b) conduct an efficient defaultelectricitysupply resource planning and procurement process that 19 evaluates the full range of cost-effective el ectricity supply and demand-side management options; 20 (c) identify and cost-effectively manage and mitigate risks related to it s obligation to provide default 21 electricity supply service; 22 (d) use open, fair, and competitive proc urement processes whenever possible; and 23 (e) provide default supply services electricity supply service AND RELATED SERVICESat just and reasonable 24 rates. 25 (3) By December 31, 2003, the The B Y D ECEMBER 31, 2007 M ARCH 31, 2008, THE commission shall adopt 26 rules that guide the defaultelectricitysupply resource planning and procurem ent processes used by the default 27 supplierpublic utilityand facilitate the achievementof the objectives in subsection (2) by the default supplier 28 public utility . The rules must establish: 29 (a) goals, objectives, and guidelines that are cons istent with the objectives in subsection (2) for: 3060th Legislature HB0025.05

- 22 - Authorized Print Version - HB 25 (i) planning for future defaultelectricitysupply resource needs; 1 (ii) managing the portfolio of defaultelectricitysupply resources; and 2 (iii) procuring new defaultelectricitysupply resources; 3 (b) standards for the evaluation by the commission of the reasonabl eness of a power supply purchase 4 agreement proposed by the default supplierpublic utility ; and 5 (c) minimum filing requirements for an application by the default supplierpublic utilityfor advanced 6 approval of a proposed pow er supply purchase agreementpreapproval of a new APPROVAL OF AN electricity supply 7

resource ." 8 9 Section 14. Section 69-8-420, MCA, is amended to read: 10 "69-8-420. DefaultElectricity supply resource procurement plans -- comment on plans. (1) The 11 default supplierpublic utilityshall develop defaultelectricitysupply resource procurement plans. The plans must 12 be submitted to the commission at intervals determined in rules adopted by the commission pursuant to 69-8-419

. 13 (2) A defaultAn electricitysupply resource procurement plan must demonstrate the default supplier's 14 public utility's achievement of the objectives provided in 69-8-419 and compliance with the rules adopted pursuant 15 to 69-8-419 COMMISSION RULES

. 16 (3) The commission shall: 17 (a) review the defaultelectricitysupply resource procurement plan; 18 (b) provide an opportunity to the public to comment on the plan; and 19 (c) issue written comments that identify: 20 (i) any concerns of the commi ssion regarding the default supplier's public utility's compliance with the 21 rules adopted pursuant to 69-8-419; and COMMISSION RULES ; AND 22 (ii) ways to rem edy any concerns." 23 24 Section 15. Section 69-8-421, MCA, is amended to read: 25 "69-8-421. Default supply filings -- commission processing and approval Preapproval of new 26 A PPROVAL OFelectricity supply resources

. (1) A default supplierpublic utility that removed its generation assets 27 from its rate base pursuant to this chapterprior to [the effective date of this act] may apply to the commission for 28 preapproval of a new APPROVAL OF AN electricity supply resource that is not yet procured. advanced approval of 29 a power supply purchase agreement that is: 3060th Legislature HB0025.05

- 23 - Authorized Print Version - HB 25 (a) not executed; or 1 (b) executed with a provision that allows termi nation of the agreement if the commission does not find 2 the agreement reasonable. 3 (2) (a) The commission shall issue an order on the default supplier's public utility's application for 4 advanced approval of a power supply purchase agreement preapproval of a new electricity supply resource in 5 a timely manner as provi ded in this subsection (2). 6 (b) In establishing an administrative procedure for reviewing an application for advanced approval 7 preapproval , the commission shall consider any financing and market constraints and the due process rights of 8 affected persons. 9 (c) (2) Within 45 days of the default supplier's public utility's submission of an application for advanced 10 approval preapproval APPROVAL , the commission shall determine whetheror not the application is adequate and 11 in compliance with the commission's minimum filing requirements. If the commi ssion determines that the 12 application is inadequate, it shall explai n how the filing fails to comply with the objectives in 69-8-419 and the rules 13 adopted pursuant to 69-8-419. THE DEFICIENCIES

. 14 (d) (3) The commission shall issue an order within 180 days of receipt of an adequate application FOR 15
APPROVAL OF A POWER PURCH ASE AGREEMENT FROM AN EXI STING GENERATING RESOURCE unless it determines that 16 extraordinary circumstances require additional time. 17 (4) ( A ) T HE E XCEPT AS PROVIDED IN SUBSECTIONS (4)( B ) THROUGH (4)( D ), THE COMMISSION SHALL ISSUE AN 18
ORDER WITHIN 270 DAYS OF RECEIPT OF AN ADEQUATE APPLICATION FOR APPROVAL OF A LEASE , AN ACQUISITION OF AN 19
EQUITY INTEREST IN A NEW OR EXISTING PLANT OR EQUIPMENT USED TO GENERATE ELECTRICITY , OR A POWER PURCHASE 20
AGREEMENT FOR WHICH APPROVAL WOUL D RESULT IN CONSTRUCTION OF A NEW ELECTRIC GENERATING RESOURCE

. T HE 21
COMMISSION MAY EXTEND THE TIME LIMIT UP TO AN ADDITIONAL 90 DAYS IF IT DETERMINES THAT EXTRAORDINARY 22
CIRCUMSTANCES REQUIRE IT

. 23 ( B ) I F AN AIR QUALITY PERMIT PURSUANT TO T ITLE 75, CHAPTER 2, IS REQUIRED FOR A NEW ELECTRICAL 24
GENERATION RESOURCE OR A MODIFICATION TO AN EXISTING RESOURCE , THE COMMISSION SHALL HOLD THE PUBLIC 25
HEARING ON THE APPLICATION FOR APPROVAL AT LEAST 30 DAYS AFTER THE ISSUANCE OF THE FINAL AIR QUALITY PERMIT

. 26 ( C ) I F A FINAL AIR QUALITY PERMIT IS NOT ISSUED WI THIN THE TIME LIMIT PURSUANT TO SUBSECTION (4)( A ), THE 27
COMMISSION SHALL EXTEND THE TIME LIMIT IN ORDER TO COMPLY WITH SUBSECTION (4)( B ). 28 ( D ) T HE COMMISSION MAY EXTEND THE TIME LIMIT FO R ISSUING AN ORDER FOR AN ADDITIONAL 60 DAYS 29
FOLLOWING THE HEARING PURSUANT TO SUBSECTION (4)( B ). 3060th Legislature HB0025.05

- 24 - Authorized Print Version - HB 25 (e) (5) To facilitate timely consideration of an app lication, the commission may initiate proceedings to 1 evaluate planning and procurement activities related to a potential resource procurement prior to the default 2 supplier's public utility's submission of an application for approval preapproval APPROVAL

. 3 (3) (6) (a) The commission may approve or deny, in w hole or in part, an application for advanced approval 4 of a power supply purchase agreement preapproval of a new APPROVAL OF AN electricity supply resource

. 5 (b) The commission may consider all relevant inform ation known up to the time that the administrative 6 record in the proceeding is closed in the evaluation of an application for advanced approval of a power supply 7 purchase agreementpreapproval of a new el ectricity supply resource APPROVAL

. 8 (c) A commission order granting advanced appr oval of a power supply purchase agreementpreapproval 9 of a new electricity supply resource APPROVAL OF AN APPLICATION must include the following findings: 10 (i) advanced approval preapproval of all or part of the agreementnew electricity supply resource 11
APPROVAL , IN WHOLE OR IN PART , is in the public interest; AND 12 (ii) the agreement new el ectricity supply resource resulted from a reasonable effort by the default supplier 13 public utilityto comply with the objectives in 69-8- 419 and the rules adopted pursuant to 69-8-419; and 14 (iii) the price, quantity, duration, and other contract terms directly related to the price, quantity, and 15 duration of the power supply purchase agr eement new electricity supply resource are reasonable. 16 ( II ) PROCUREMENT OF THE ELECTRICITY SUPPLY RESOURCE IS CONSISTENT WITH THE REQUIREMENTS IN 17 69-3-201, THE OBJECTIVES IN 69-8-419, AND COMMISSION RULES

. 18 ( D ) T HE COMMISSION ORDER MAY INCLUDE A PROVISION FOR ALLOWABLE GENERATION ASSETS COST OF SERVICE 19
WHEN THE UTILITY HAS FILED AN APPLICATION FOR THE LEASE OR ACQUISITION OF AN EQUITY INTEREST IN A PLANT OR 20
EQUIPMENT USED TO GENERATE ELECTRICITY

. 21 ( E ) W HEN ISSUING AN ORDER FOR THE ACQUISITION OF AN EQUITY INTEREST OR LEASE IN A FACILITY OR 22
EQUIPMENT THAT IS CONSTRUCTED AFTER J ANUARY 1, 2007, AND THAT IS USED TO GENERATE ELECTRICITY THAT IS 23
PRIMARILY FUELED BY NATURAL OR SYNTHETIC GAS , THE COMMISSION SHALL REQUIR E THE APPLICANT TO IMPLEMENT 24
COST - EFFECTIVE CARBON OFFSETS

. E XPENDITURES REQUIRED FOR COST - EFFECTIVE CARBON OFFSETS PURSUANT TO 25
THIS SUBSECTION (6)( E ) ARE FULLY RECOVERABLE IN RATES

. B Y M ARCH 31, 2008, THE COMMISSION SHALL ADOPT RULES 26
FOR THE IMPLEMENTATION OF THIS SUBSECTION (6)( E ). 27 (d)( E ) ( F ) The commission order may include other fi ndings that the commission determines are 28 necessary. 29 (e)( F ) ( G ) A commission order that denies advanced approval preapproval APPROVALmust describe why 3060th Legislature HB0025.05

- 25 - Authorized Print Version - HB 25 the findings required in subsection (3)(c) (6)( C ) could not be reached. 1 (4) (7) Notwithstanding any provision of this chapter to the contra ry, if the commission has issued an 2 order containing the findings required under subsection (3)(c) (6)( C ) , the commission may not subsequently 3 disallow the recovery of costs incurred under the agreement RELATED TO THE APPROVED ELECTRICITY SUPPLY 4
RESOURCE based on contrary findings. 5 (5) If a default supplier public utilitydoes not apply for advanced approval of a power supply purchase 6 agreement preapproval of a new electricity supply resource , the commission shall consider the prudence of the 7 default supplier's public utility's resource procurement actions in the c ontext of a default supplier's public utility's 8 cost recovery filing pursuant to 69-8-210 or in a s eparate proceeding. The commission's decisions in these 9 proceedings must be based on facts that were know n or should reasonably have been known by the default 10 supplier public utilityat the time of its procurement decisions. 11 (8) U NTIL THE STATE OR FEDERAL GOVERNMENT HAS ADOPTED UNIFORMLY APPLICABLE STATEWIDE STANDARDS 12
FOR THE CAPTURE AND SEQUESTRATION OF CARBON DIOXIDE , THE COMMISSION MAY NOT APPROVE AN APPLICATION FOR 13
THE ACQUISITION OF AN EQUITY INTERESTOR LEASE IN A FACILITY OR EQUIPMEN T USED TO GENERATE ELECTRICITY THAT 14
IS PRIMARILY FUELED BY COAL AND THAT IS CONSTRUCTED AFTER J ANUARY 1, 2007, UNLESS THE FACILITY OR EQUIPMENT 15
CAPTURES AND SEQUESTERS A MINIMUM OF 50% OF THE CARBON DIOXIDE PRODUCED BY THE FACILITY

. C ARBON DIOXIDE 16
CAPTURED BY A FACILITY OR EQUIPMENT MAY BE SEQUEST ERED OFFSITE FROM THE FACILITY OR EQUIPMENT

. 17 (6)(8) (9) Nothing limits the commission's ability to subsequently, in any future cost recovery RATE 18 proceeding, inquire into the manner in which the default supplierpublic utilityhas managed, dispatched, operated, 19 and OR maintained any new electricity supplyresource OR MANAGED ANY POWER SUPPLY PURCHASE AGREEMENT 20 a power supply purchase agreementas part of its overall resource portfolio. The commission may subsequently 21 disallow defaultelectricitysupply RATE RECOVERY FOR THE costs that result from the failure of a default supplier 22 public utilityto reasonably administer pow er supply purchase agreements manage, dispatch, operate, maintain, 23 or administer newelectricity supply resources in the context of its overall default electricitysupply portfolio 24 management and service obligations. A MANNER CONSISTENT WITH 69-3-201, 69-8-419, AND COMMISSION RULES

. 25 (7)(9) (10) The commission may engage independent ENGINEERING , FINANCIAL , AND MANAGEMENT 26 consultants or advisory se rvices to evaluate a publicutility's defaultelectricitysupply resource procurement plans 27 and proposed power supply purchase agreements newelectricity supply resources . The consultants must have 28 demonstrated knowledge and experience with electricity supply procurement and resource portfolio management, 29 modeling, and risk management, AND ENGINEERING practices. The commission shall charge a fee to the default 3060th Legislature HB0025.05

- 26 - Authorized Print Version - HB 25 supplierpublic utilityto pay for the costs of consultants or adv isory services. These costs are recoverable in 1 defaultelectricitysupply service rates. 2 (8) The commission may adopt rules prescribi ng minimum filing requirements for preapproval 3 applications. 4 (10) (11) B Y D ECEMBER 31, 2007 M ARCH 31, 2008, THE COMMISSION SHALL ADOPT RULES PRESCRIBING 5
MINIMUM FILING REQUIREMENTS FOR APPLICATIONS FILED PURSUANT TO THIS PART

. " 6 7 S ECTION 16. S ECTION 69-8-602, MCA, IS AMENDED TO READ : 8 "69-8-602. Distribution services providerUtility net metering requirements. A distribution services 9 providerutilityshall: 10 (1) allow net metering systems to be interconnected using a standard kilowatt-hour meter capable of 11 registering the flow of electricity in two directions , unless the commission determines, after appropriate notice and 12 opportunity for comment: 13 (a) that the use of additional metering equipment to m onitor the flow of electricity in each direction is 14 necessary and appropriate for the interconnection of net me tering systems, after taki ng into account the benefits 15 and costs of purchasing and installing additional metering equipment; and 16 (b) how the costs of net metering are to be allocated between the customer-generator and the 17 distribution services providerutility ; and 18 (2) charge the customer-generator a minimum monthly fee that is the same as other customers of the 19 electric utility in the same rate class. The commi ssion shall determine, after appropriate notice and opportunity 20 for comment if: 21 (a) the distributi on services providerutilitywill incur direct costs associated with interconnecting or 22 administering net metering systems that exceed any offsetting benefits a ssociated with these net metering 23 systems; and 24 (b) public policy is best served by imposing these co sts on the customer-generator, rather than allocating 25 these costs among the distri bution services provider's utility's entire customer base." 26 27 S ECTION 17. S ECTION 69-8-603, MCA, IS AMENDED TO READ : 28 "69-8-603. Net energy measurement calculation. Consistent with the other provisions of this part, the 29 net energy measurement must be ca lculated in the following manner: 3060th Legislature HB0025.05

- 27 - Authorized Print Version - HB 25 (1) The distribution services providerutilityshall measure the net elec tricity produced or consumed 1 during the billing period, in accordance with normal metering practices. 2 (2) If the electricity supplied by the electricit y supplier exceeds the electricity generated by the 3 customer-generator and fed back to the electricity supplie r during the billing period, the customer-generator must 4 be billed for the net electricity supplied by the electricity supplier, in accordance with normal metering practices. 5 (3) If electricity generated by the customer-generator exceeds the electricity s upplied by the electricity 6 supplier, the customer-generator must be: 7 (a) billed for the appropriate customer charges for that billing period, in accordance with 69-8-602; and 8 (b) credited for the excess kilowatt hours generated duri ng the billing period, with this kilowatt-hour credit 9 appearing on the bill for the following billing period. 10 (4) On January 1, April 1, July 1, or October 1 of each year, as designat ed by the customer-generator 11 as the beginning date of a 12-month b illing period, any remaining unused kilowatt-hour credit accumulated during 12 the previous 12 months must be granted to the electricity supplier, without any compensation to the 13 customer-generator." 14 15 Section 18. Section 69-8-1004, MCA, is amended to read: 16 "69-8-1004. Renewable resource standard -- administrative penalty -- waiver. (1) Except as provided 17 in 69-8-1007 and subsection (11) of this section, a graduated renewable energy standard is established for public 18 utilities as provided in subsections (2) through (4) of this section. 19 (2) In each compliance year beginning January 1, 2008, through December 31, 2009, each public utility 20 shall procure a minimum of 5% of its retail sales ofelectrical energy in Montana from eligible renewable 21

resources. 22 (3) (a) In each compliance year beginning January 1, 2010, through December 31, 2014, each public 23 utility shall procure a minimum of 10% of its retail sales of electrical energy in Montana from eligible renewable 24

resources. 25 (b) As part of their compliance with subsection (3 )(a), public utilities shall purchase both the renewable 26 energy credits and the electr icity output from community renewable energy projects that total at least 50 27 megawatts in nameplate capacity. 28 (c) Public utilities shall proportionately allocate the purchase required under subsection (3)(b) based on 29 each public utility's retail sales of electrical energy in Montana in the calendar year 2009. 3060th Legislature HB0025.05

- 28 - Authorized Print Version - HB 25 (4) (a) In the compliance year beginning January 1, 2015, and in each succeeding compliance year, each 1 public utility shall procure a minimum of 15% of its reta il sales of electrical energy in Montana from eligible 2 renewable resources. 3 (b) (i) As part of their compliance with subsection (4)(a), public utilities shall purchase both the renewable 4 energy credits and the electricity output from communityrenewable energy projects that total at least 75 5 megawatts in nameplate capacity. 6 (ii) In meeting the standard in subsection (4)(b )(i), a public utility may include purchases made under 7 subsection (3)(b). 8 (c) Public utilities shall proportionately allocate the purchase required under subsection (4)(b) based on 9 each public utility's retail sales of electrical energy in Montana in the calendar year 2014. 10 (5) (a) In complying with the standards required undersubsections (2) through (4), a public utility shall, 11 for any given compliance year, calcul ate its procurement requirement based on the public utility's previous year's 12 sales of electrical energy to retail customers in Montana. 13 (b) The standard in subsections (2) through (4) mu st be calculated on a delivered-energy basis after 14 accounting for any line losses. 15 (6) A public utility has until 3 months following t he end of each compliance year to purchase renewable 16 energy credits for that compliance year. 17 (7) (a) In order to meet the standard established in subsections (2) through (4), a public utility may only 18

use: 19 (i) electricity from an eligible renewable resource in which the associated renewable energy credits have 20 not been sold separately; 21 (ii) renewable energy credits created by an eligible renewable resource purchased separately from the 22 associated electricity; or 23 (iii) any combination of subsections (7)(a)(i) and (7)(a)(ii). 24 (b) A public utility may not resell renewable energy cr edits and count those sold credits against the public 25 utility's obligation to meet the standards established in subsections (2) through (4). 26 (c) Renewable energy credits sold through a vol untary service such as the one provided for in 27 69-8-210(4) 69-8-210(2) may not be applied against a public utility's ob ligation to meet the standards established 28 in subsections (2) through (4). 29 (8) Nothing in this part limits a public utility from exceeding the standards established in subsections (2) 3060th Legislature HB0025.05

- 29 - Authorized Print Version - HB 25 through (4). 1 (9) If a public utility exceeds a standard established in subsections (2) through (4) in any compliance 2 year, the public utility may carry forward the amount bywhich the standard was exceeded to comply with the 3 standard in either or both of the 2 subsequent compli ance years. The carryforward may not be double-counted. 4 (10) Except as provided in subsec tion (11), if a public utility is unabl e to meet the standards established 5 in subsections (2) through (4) in any compliance year , that public utility shall pay an administrative penalty, 6 assessed by the commission, of $10 for each megawatt hourof renewable energy credits that the public utility 7 failed to procure. A public utility may not recover this penalty in electric ity rates. Money generated from these 8 penalties must be deposited in the universal low-income energy assistance fund established in 69-8-412(1)(a). 9 (11) A public utility may petition the commission for a short-term waiver from full compliance with the 10 standards in subsections (2) through (4) and the penal ties levied under subsection (10). The petition must 11 demonstrate that the: 12 (a) public utility has undertaken all reasonable st eps to procure renewable energy credits under 13 long-term contract, but full compliance cannot be achi eved either because renewable energy credits cannot be 14 procured or for other legitimate reasons that are outside the c ontrol of the public utility; or 15 (b) integration of additional eligible renewable re sources into the electrical grid will clearly and 16 demonstrably jeopardize the reliability of the electrical system and that the public utility has undertaken all 17 reasonable steps to mitigate the reliability concerns." 18 19 NEW SECTION. S ECTION 19. U SE OF GENERATION ASSETS . G ENERATION ASSETS ACQU IRED BY A PUBLIC 20
UTILITY PURSUANT TO THIS CHAPTER : 21 (1) MUST BE USED BY THE PUBLIC UTILITY TO SERVE AND BENEFIT CUSTOMERS WITHIN THE PUBLIC UTILITY ' S 22 M ONTANA SERVICE TERRITORY ; AND 23 (2) MAY NOT BE REMOVED FROM THE RATE BASE UNLESS THE COMMISSION FINDS THAT CUSTOMERS OF THE 24
PUBLIC UTILITY WILL NOT BE ADVERSELY AFFECTED

. 25 26 NEW SECTION. S ECTION 20. C ODIFICATION INSTRUCTION . [S ECTION 18 19] IS INTENDED TO BE CODIFIED AS 27
AN INTEGRAL PART OF T ITLE 69, CHAPTER 8, PART 4, AND THE PROVISIONS OF T ITLE 69, CHAPTER 8, PART 4, APPLY TO 28 [ SECTION 18 19]. 29 3060th Legislature HB0025.05

- 30 - Authorized Print Version - HB 25 NEW SECTION. Section 21. Repealer. Sections 69-8-102, 69-8-104, 69-8-202, 69-8-203, 69-8-204, 1 69-8-208, 69-8-209, 69-8-211, 69-8-301, 69-8-302, 69-8-303, 69-8-304, 69-8-308, 69-8-309, 69-8-310, 69-8-401, 2 69-8-403, 69-8-404, 69-8-408, 69-8-409, AND 69-8-410, and 69-8-411, MCA, are repealed. 3 4 NEW SECTION. Section 22. Saving clause. [This act] does not affect rights and duties that matured, 5 penalties that were incurred, or proceedings that were begun before [the effective date of this act]. 6 7 NEW SECTION. Section 23. Severability. If a part of [this act] is inva lid, all valid parts that are 8 severable from the invalid part remain in effect. If a part of [this act] is invalid in one or more of its applications, 9 the part remains in effect in all valid applications that are severable from the invalid applications. 10 11 NEW SECTION. S ECTION 24. E FFECTIVE DATE . [T HIS ACT ] IS EFFECTIVE ON PASSAGE AND APPROVAL

. 12 - END - 13