HB 974 Summary

• Requires the Department of Budget and Finance to enter into "step-in agreements" with independent power producers to guarantee payment for power purchase costs if an electric utility defaults on its obligations under power purchase agreements.

• Establishes the Power Purchase Costs Trust Fund outside the state treasury, capitalized by surcharges (reserve fees) and power purchase charges collected from utility customers, with moneys held in trust for the benefit of independent power producers.

• Limits the Department's payment obligations under step-in agreements to moneys available in the trust fund; neither the full faith and credit of the State nor any other state moneys are pledged as security.

• Appoints and authorizes the electric utility to serve as billing, collection, and payment agent for the Department, responsible for collecting power purchase charges and reserve fees and transferring them to the trust fund upon default.

• Requires the Public Utilities Commission to allow monthly rate adjustments under existing energy cost recovery and purchased power adjustment clauses to ensure sufficient funds are collected to meet power purchase obligations, terminating when the utility achieves investment grade credit status.