Enrolled Copy H.B. 425
1 ENERGY SECURITY AMENDMENTS
2 2023 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Ken Ivory
5 Senate Sponsor: Derrin R. Owens
6Cosponsors:
7Cheryl K. Acton
8Carl R. Albrecht
9Melissa G. Ballard
10Stewart E. Barlow
11Kera Birkeland
12Bridger Bolinder
13Brady Brammer
14Walt Brooks
15Jefferson S. Burton
16Scott H. Chew
17Kay J. Christofferson
18Tyler Clancy
19Joseph Elison
20Stephanie Gricius
Matthew H. Gwynn
Katy Hall
Jon Hawkins
Colin W. Jack
Tim Jimenez
Dan N. Johnson
Marsha Judkins
Michael L. Kohler
Quinn Kotter
Trevor Lee
Karianne Lisonbee
Anthony E. Loubet
Steven J. Lund
Phil Lyman
A. Cory Maloy
Jefferson Moss
Michael J. Petersen
Thomas W. Peterson
Candice B. Pierucci
Judy Weeks Rohner
Mike Schultz
Rex P. Shipp
Keven J. Stratton
Mark A. Strong
Jordan D. Teuscher
R. Neil Walter
Stephen L. Whyte
Brad R. Wilson
21
22LONG TITLE
23General Description:
24 This bill modifies provisions related to the regulation of energy.
25Highlighted Provisions:
26 This bill:
27 <defines terms; H.B. 425
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28 <requires a project entity to provide notice to the Legislative Management Committee
29180 days prior to:
30 Cthe disposal or sale of any project entity asset; and
31 Cthe decommissioning of a coal-powered electrical generation facility;
32 <requires the Office of Energy Development to:
33 Cconduct a study of a project entity; and
34 Creport the results of the study to the Public Utilities, Energy, and Technology
35Interim Committee;
36 <modifies the state energy policy to promote the state's energy independence by:
37 Cpromoting the use of energy resources generated within the state; and
38 Cpromoting the use of clean energy sources by considering the emissions of an
39energy resource throughout the entire life cycle of the energy resource;
40 <provides legislative findings;
41 <requires a qualified utility to inform the Office of the Attorney General when a
42proposed federal regulation would result in the early retirement of an electrical
43generation facility;
44 <authorizes the Office of the Attorney General to take any action to defend the state's
45interests with respect to electricity generation by a qualified utility facing a
46proposed federal regulation that would result in the early retirement of an electrical
47generation facility; and
48 <makes technical changes.
49Money Appropriated in this Bill:
50 None
51Other Special Clauses:
52 None
53Utah Code Sections Affected:
54AMENDS: Enrolled Copy H.B. 425
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55 79-6-301, as last amended by Laws of Utah 2021, Chapter 383 and renumbered and
56amended by Laws of Utah 2021, Chapter 280
57ENACTS:
58 11-13-318, Utah Code Annotated 1953
59 11-13-319, Utah Code Annotated 1953
60 79-6-303, Utah Code Annotated 1953
61
62Be it enacted by the Legislature of the state of Utah:
63 Section 1. Section 11-13-318 is enacted to read:
64 11-13-318. Notice of decommissioning or disposal of project entity assets.
65 (1) As used in this section:
66 (a) "Disposal" means the sale, transfer, or other disposition of a project entity's assets.
67 (b) (i) "Project entity asset" means a project entity's:
68 (A) land;
69 (B) buildings; or
70 (C) essential equipment, including turbines, generators, transformers, and transmission
71lines.
72 (ii) "Project entity asset" does not include an asset that is not essential for the
73generation of electricity in the project entity's coal-powered electrical generation facility.
74 (2) A project entity shall provide a notice of decommissioning or disposal to the
75Legislative Management Committee at least 180 days before:
76 (a) the disposal of any project entity assets; or
77 (b) the decommissioning of the project entity's coal-powered electrical generation
78facility.
79 (3) The notice of decommissioning or disposal described in Subsection (2) shall
80include:
81 (a) the date of the intended decommissioning or disposal; H.B. 425
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82 (b) a description of the project entity's coal-powered electrical generation facility
83intended for decommissioning or any project entity asset intended for disposal; and
84 (c) the reasons for the decommissioning or disposal.
85 (4) A project entity may not intentionally prevent the functionality of the project
86entity's existing coal-powered electrical generation facility.
87 (5) Notwithstanding the requirements in Subsections (2) through (4), a project entity
88may take any action necessary to transition to a new electrical generation facility powered by
89natural gas, hydrogen, or a combination of natural gas and hydrogen, including any action that
90has been approved by a permitting authority.
91 Section 2. Section 11-13-319 is enacted to read:
92 11-13-319. Project entity continued operation study.
93 (1) The Office of Energy Development shall conduct a study to:
94 (a) evaluate all environmental regulations and permits to be filed to continue operation
95of a project entity's existing coal-powered electrical generation facility;
96 (b) identify best available technology to implement additional environmental controls
97for continued operation of a project entity's existing coal-powered electrical generation facility;
98 (c) identify the transmission capacity of the project entity;
99 (d) coordinate with state and local economic development agencies to evaluate
100economic opportunities for continued use of a project entity's existing coal-powered electrical
101generation facility;
102 (e) analyze the financial assets and liabilities of a project entity;
103 (f) identify the best interests of the local economies, local tax base, and the state in
104relation to a project entity;
105 (g) evaluate the viability of the continued operation of a project entity's existing
106coal-powered electrical generation facility:
107 (i) under ownership of the state; or
108 (ii) in a public private partnership; and Enrolled Copy H.B. 425
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109 (h) identify the steps necessary for the state to obtain first right of refusal for ownership
110of a project entity's existing coal-powered electrical generation facility.
111 (2) A project entity shall cooperate and provide timely assistance and information to
112the Office of Energy Development in the preparation of the study described in Subsection (1).
113 (3) The Office of Energy Development shall report to the Public Utilities, Energy, and
114Technology Interim Committee and the Legislative Management Committee on or before the
115Public Utilities, Energy, and Technology Interim Committee's September 2023 interim
116committee meeting.
117 (4) The report described in Subsection (3) shall include:
118 (a) the results of the study described in Subsection (1);
119 (b) recommendations for continued operation of a project entity's existing
120coal-powered electrical generation facility;
121 (c) environmental controls that need to be implemented for the continued operation of
122a project entity's existing coal-powered electrical generation facility;
123 (d) recommendations to increase local and state tax revenue through the continued
124operation of a project entity's existing coal-powered electrical generation facility; and
125 (e) recommendations for legislation to be introduced in the 2024 General Session to
126enable the continued operation of a project entity's existing coal-powered electrical generation
127facility.
128 Section 3. Section 79-6-301 is amended to read:
129 79-6-301. State energy policy.
130 (1) It is the policy of the state that:
131 (a) Utah shall have adequate, reliable, affordable, sustainable, and clean energy
132resources;
133 (b) Utah [will] shall promote the development of:
134 (i) nonrenewable energy resources, including natural gas, coal, oil, oil shale, and oil
135sands; H.B. 425
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136 (ii) renewable energy resources, including geothermal, solar, wind, biomass, biofuel,
137and hydroelectric;
138 (iii) nuclear power generation technologies certified for use by the United States
139Nuclear Regulatory Commission including molten salt reactors producing medical isotopes;
140 (iv) alternative transportation fuels and technologies;
141 (v) infrastructure to facilitate energy development, diversified modes of transportation,
142greater access to domestic and international markets for Utah's resources, and advanced
143transmission systems;
144 (vi) energy storage, pumped storage, and other advanced energy systems, including
145hydrogen from all sources;
146 (vii) electricity systems that can be controlled at the request of grid operators to meet
147system load demands, to ensure an adequate supply of dispatchable energy generation
148resources; and
149 (viii) increased refinery capacity;
150 (c) Utah [will] shall promote the development of resources and infrastructure sufficient
151to meet the state's growing demand, while contributing to the regional and national energy
152supply, thus reducing dependence on international energy sources;
153 (d) Utah [will] shall promote the development of resources, tools, and infrastructure to
154enhance the state's ability to:
155 (i) respond effectively to significant disruptions to the state's energy generation, energy
156delivery systems, or fuel supplies; [and]
157 (ii) maintain adequate supply, including reserves of proven and cost-effective
158dispatchable electricity reserves to meet grid demand; and
159 (iii) ensure the state's energy independence by promoting the use of energy resources
160generated within the state;
161 (e) Utah [will] shall allow market forces to drive prudent use of energy resources,
162although incentives and other methods may be used to ensure the state's optimal development Enrolled Copy H.B. 425
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163and use of energy resources in the short- and long-term;
164 (f) Utah [will] shall pursue energy conservation, energy efficiency, and environmental
165quality;
166 (g) Utah shall promote the development of a secure supply chain from resource
167extraction to energy production and consumption;
168 [(g)] (h) (i) state regulatory processes should be streamlined to balance economic costs
169with the level of review necessary to ensure protection of the state's various interests; and
170 (ii) where federal action is required, Utah will encourage expedited federal action and
171will collaborate with federal agencies to expedite review;
172 [(h)] (i) Utah [will] shall maintain an environment that provides for stable consumer
173prices that are as low as possible while providing producers and suppliers a fair return on
174investment, recognizing that:
175 (i) economic prosperity is linked to the availability, reliability, and affordability of
176consumer energy supplies; and
177 (ii) investment will occur only when adequate financial returns can be realized; [and]
178 [(i)] (j) Utah [will] shall promote training and education programs focused on
179developing a comprehensive understanding of energy, including:
180 (i) programs addressing:
181 (A) energy conservation;
182 (B) energy efficiency;
183 (C) supply and demand; and
184 (D) energy related workforce development; and
185 (ii) energy education programs in grades [K-12.] kindergarten through grade 12; and
186 (k) Utah shall promote the use of clean energy sources by considering the emissions of
187an energy resource throughout the entire life cycle of the energy resource.
188 (2) State agencies are encouraged to conduct agency activities consistent with
189Subsection (1). H.B. 425
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190 (3) A person may not file suit to challenge a state agency's action that is inconsistent
191with Subsection (1).
192 Section 4. Section 79-6-303 is enacted to read:
193 79-6-303. Legislative findings -- Forced retirement of electrical generation
194facilities.
195 (1) As used in this section:
196 (a) "Dispatchable" means available for use on demand and generally available to be
197delivered at a time and quantity of the operator's choosing.
198 (b) "Electrical generation facility" means a facility that generates electricity for
199provision to customers.
200 (c) "Forced retirement" means the closure of an electrical generation facility as a result
201of a federal regulation that either directly mandates the closure of an electrical generation
202facility or where the costs of compliance are so high as to effectively force the closure of an
203electrical generation facility.
204 (d) "Qualified utility" means the same as that term is defined in Section 54-17-801.
205 (e) "Reliable" means supporting a system generally able to provide a continuous supply
206of electricity at the proper voltage and frequency and the resiliency to withstand sudden or
207unexpected disturbances.
208 (f) "Secure" means protected against disruption, tampering, and external interference.
209 (2) The Legislature finds that:
210 (a) affordable, reliable, dispatchable, and secure energy resources are important to the
211health, safety, and welfare of the state's citizens;
212 (b) the state has invested substantial resources in the development of affordable,
213reliable, dispatchable, and secure energy resources within the state;
214 (c) the early retirement of an electrical generation facility that provides affordable,
215reliable, dispatchable, and secure energy is a threat to the health, safety, and welfare of the
216state's citizens; Enrolled Copy H.B. 425
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217 (d) the state's police powers, reserved to the state by the United States Constitution,
218provide the state with sovereign authority to make and enforce laws for the protection of the
219health, safety, and welfare of the state's citizens;
220 (e) the state has a duty to defend the production and supply of affordable, reliable,
221dispatchable, and secure energy from external regulatory interference; and
222 (f) the state's sovereign authority with respect to the retirement of an electrical
223generation facility for the protection of the health, safety, and welfare of the state's citizens is
224primary and takes precedence over any attempt from an external regulatory body to mandate,
225restrict, or influence the early retirement of an electrical generation facility in the state.
226 (3) A qualified utility that receives notice of any federal regulation that may result in
227the forced retirement of the qualified utility's electrical generation facility shall inform the
228Office of the Attorney General of the regulation within 30 days after the receipt of notice.
229 (4) After being informed as described in Subsection (3), the Office of the Attorney
230General may take any action necessary to defend the interest of the state with respect to
231electricity generation by the qualified utility, including filing an action in court or participating
232in administrative proceedings.