69-8-310. Cooperative utility -- transition costs and charges. (1) For the purposes of this section, "transition costs" means those costs, liabilities, and investments that cooperative utilities would reasonably expect to recover if fully bundled ratemaking conditions continued and that may not be recoverable as a result of the transition to a competitive market for electricity supply service.
     (2) Transition costs eligible for treatment include but are not limited to:
     (a) regulatory assets and deferred charges typically recoverable in rates;
     (b) nonutility and utility power purchase contracts;
     (c) existing commitments or obligations incurred before May 2, 1997, and other cooperative utility investments rendered uneconomic as a result of the implementation of this chapter or the introduction of retail wheeling through federal legislation or regulation;
     (d) costs associated with any renegotiation or buyout of the existing nonutility and utility power purchase contracts;
     (e) revenue that appears as a portion of a facility charge necessary to meet debt service requirements, including any coverage amounts required by any mortgage, indenture, or other financing document;
     (f) costs of refinancing and retiring debt of the cooperative utility and associated federal and state tax liabilities or other utility costs for which the use of transition bonds would benefit customers; and
     (g) all costs, expenses, and reasonable fees related to transition bonds.
     (3) For a cooperative utility's transition costs to be fully recoverable, the cooperative utility shall make reasonable efforts to mitigate those transition costs.
     (4) Cooperative utilities may not collect any more costs, including costs reallocated to transition costs, at a level higher than would otherwise be anticipated had the current regulatory system remained intact, with the exception of:
     (a) increased costs related to universal system benefits charges; and
     (b) increased costs of metering, billing, and technology necessary to facilitate full customer choice.
     (5) Subject to the obligation to mitigate transition costs, a cooperative utility shall fully recover transition costs as approved by its local governing body. Unmitigable transition costs are nonbypassable and collected on a nondiscriminatory basis from consumers using the cooperative utility's distribution facilities in the receipt of electricity supply services.
     (6) A cooperative utility may not collect transition costs from a customer for which the cooperative utility does not have and never has had an obligation to incur costs to provide electricity supply service unless the unmitigated transition costs were incurred solely on behalf of the customer.
     (7) Approval of and collection of transition costs through a transition charge is a settlement of all transition claims by a cooperative utility. A cooperative utility seeking to recover transition costs through any other means may not collect transition charges.

     History: En. Sec. 19, Ch. 505, L. 1997.