Sec. 16-244g. Divestiture of nuclear electric generation facilities. Plan. Approval of sale by department. - Connecticut Statutes

      Sec. 16-244g. Divestiture of nuclear electric generation facilities. Plan. Approval of sale by department. (a) As used in this section, "generation assets" means "generation assets", as defined in section 16-244f, and "net proceeds" means "net proceeds", as defined in section 16-244f.

      (b) Not later than January 1, 2004, each electric distribution company shall either (1) submit its nuclear generation assets to a public auction held in a commercially reasonable manner, in accordance with subsection (c) of this section in order to divest itself of remaining nuclear generation assets, or (2) transfer remaining nuclear generation assets to one or more legally separate corporate affiliates at their book value, in which case no stranded costs shall be recovered.

      (c) (1) Each electric distribution company that elects to divest itself of its nuclear generation assets shall, in a time frame that will allow divestiture to occur by January 1, 2004, submit a divestiture plan to the Department of Public Utility Control. The divestiture plan shall include (A) any documentation the department determines is reasonably necessary to approve the auction procedure, including a copy of the request for proposal and a description of the solicitation process, (B) a detailed description of the process for the sale and transfer of nuclear generation assets, and (C) information the department determines is necessary for the department to determine the value of the minimum bid for each nuclear generation asset, as provided in subdivision (3) of this subsection. The department shall hold a hearing and issue a final order approving or modifying the plan in a time frame that will allow divestiture to be accomplished by January 1, 2004. Any hearing shall be conducted as a contested case in accordance with chapter 54. The department shall, after consultation with the Office of Consumer Counsel, appoint a consultant who shall be an entity unrelated to the said company that meets qualifications set by the department, to conduct the auction process.

      (2) The department shall not approve a sale unless (A) the sale price equals or exceeds the minimum bid established by the department for the asset, (B) the department determines the bidder meets all applicable qualifications established by federal law and regulation, (C) the sale is conducted in accordance with the divestiture plan as approved by the department, (D) the bidder proves to the satisfaction of the department that the bidder will preserve labor agreements in effect at the time of the sale, and (E) the sale will result in a net benefit to ratepayers, as determined by the department. Transfer in ownership of any asset shall not occur until the department determines the purchaser is fully qualified to provide electric generation services pursuant to section 16-245 or pursuant to applicable federal law and regulation. If the department approves a sale in accordance with the provisions of this section, no further proceedings under section 16-43 shall be required.

      (3) The department shall determine the minimum bid price for each nuclear generation asset by determining the future net cash flow that a nuclear generation asset of comparable size, age and technical characteristics that is prudently and efficiently managed would be expected to produce over its expected remaining useful life, discounted to a present value.

      (4) A generation entity or affiliate of an electric distribution company may bid on any nuclear generation asset, provided such entity or affiliate is qualified to bid, as provided in this subsection.

      (5) If a final bid is less than book value for an asset, the electric distribution company shall be entitled to recover the difference between the bid price and the book value as stranded costs pursuant to subdivision (2) of subsection (h) of section 16-245e. If a final bid exceeds book value for an asset, the net proceeds realized by the electric distribution company that are above book value shall be netted against the amount of stranded costs as provided in subdivision (4) of subsection (h) of section 16-245e.

      (d) (1) If an electric distribution company elects to sell all its remaining nuclear generation assets by public auction and complies with the provisions of subsection (c) of this section but does not receive any bids for an asset by a qualified bidder that equal or exceed the minimum bid price, as determined by the department in accordance with the provisions of subsection (c) of this section, the department shall calculate the value of stranded costs for each such asset in accordance with subdivision (3) of subsection (h) of section 16-245e.

      (2) Not later than January 1, 2004, the electric distribution company shall transfer the nuclear generation assets described in subdivision (1) of this subsection to one or more legally separate corporate affiliates. If in order to comply with rules, regulations or licensing requirements of the United States Nuclear Regulatory Commission an electric distribution company is unable to legally separate its nuclear assets to one or more corporate affiliates, the generation assets may remain in separate divisions of the electric distribution company.

      (e) (1) On and after January 1, 2000, and prior to the date when a nuclear generation asset is sold at public auction or transferred to a corporate affiliate, the difference between the return of and on capital costs allowed in rates for the nuclear generation asset and the income capitalization value established for such asset for such interim period pursuant to the methodology described in subdivision (3) of subsection (c) of this section shall be collected through the competitive transition assessment in accordance with section 16-245g.

      (2) On or after the date when a nuclear generation asset is sold at public auction or transferred to a corporate affiliate, the department shall calculate the stranded costs for nuclear generation assets in accordance with subsection (h) of section 16-245e.

      (3) In no event shall any costs described in this subsection be funded at any time with the proceeds of rate reduction bonds pursuant to sections 16-245e to 16-245k, inclusive.

      (P.A. 98-28, S. 7, 117.)

      History: P.A. 98-28 effective July 1, 1998.