REFERENCE TITLE: rural electric cooperatives; valuation

 

 

 

State of Arizona

House of Representatives

Fifty-first Legislature

First Regular Session

2013

 

 

HB 2346

 

Introduced by

Representatives Lesko, Barton, Stevens, Senators Jackson Jr., Pancrazi: Representatives Olson, Shope, Senators Crandell, Griffin

 

 

AN ACT

 

amending title 42, chapter 14, Arizona Revised Statutes, by adding article 11; relating to electric cooperative nonprofit membership corporations.

 

 

(TEXT OF BILL BEGINS ON NEXT PAGE)

 



Be it enacted by the Legislature of the State of Arizona:

Section 1.  Title 42, chapter 14, Arizona Revised Statutes, is amended by adding article 11, to read:

ARTICLE 11.  ELECTRIC COOPERATIVE NONPROFIT MEMBERSHIP CORPORATIONS

START_STATUTE42-14551.  Definitions

A.  In this article, unless the context otherwise requires:

1.  "Construction work in progress" means the total of the balances of work orders for a distribution cooperative plant in the process of construction on December 31 of the preceding calendar year, exclusive of land rights and licensed vehicles.

2.  "Distribution cooperative" means an electric cooperative nonprofit membership corporation that is organized under or becomes subject to title 10, chapter 19, article 2.

3.  "Electric distribution and transmission property" means construction work in progress, environmental protection facilities, materials and supplies and original plant in service cost.

4.  "Investor-owned electric utility" means a business organization that provides electric power production and distribution, is regarded as a utility and is managed as a private enterprise rather than a function of government or as a utility cooperative.

5.  "Materials and supplies" means the cost, including sales, use and other excise taxes, and transportation costs to a point of delivery in this state, less purchases and trade discounts, of all unapplied material and supplies on hand in this state as of December 31 of the preceding calendar year.

6.  "Original plant in service cost" means the total actual cost of acquiring or constructing property including additions, retirements, adjustments and transfers, but without deducting related accumulated provision for depreciation, amortization or other purposes, on December 31 of the preceding calendar year.

7.  "Plant" means all property that is situated in this state and that is used or useful for the distribution and transmission of electric power, but does not include land rights, materials and supplies and licensed vehicles. END_STATUTE

START_STATUTE42-14552.  Annual determination of value

The department shall annually determine the valuation of the electric distribution and transmission property of distribution cooperatives that operate in this state in the manner prescribed by this article.END_STATUTE

START_STATUTE42-14553.  Annual report for determining valuation; extension; failure to file; penalty; forfeiture of appeal rights

A.  On or before April 1 of each year, each distribution cooperative operating in this state shall file a report under oath with the department to allow the department to determine the valuation of electric distribution and transmission property as required by this article.

B.  On written request and for good cause shown, the director may extend the time for filing the report required by this section.

C.  If a distribution cooperative fails to file the report on or before April 1 of the valuation year or the extended due date, if an extension is granted, the department shall do both of the following:

1.  Estimate the value of the electric distribution and transmission property based on one hundred five per cent of the preceding year's full cash value or on any information that is available to the department.

2.  Assess a penalty in the amount of the lesser of:

(a)  One-half of one per cent of the value that is estimated by the department.

(b)  One hundred dollars per day for each day the distribution cooperative fails to file the report beyond the due date.

D.  If the report is not filed on or before May 20 of the valuation year, the distribution cooperative forfeits its right to appeal the valuation and classification pursuant to section 42-14005.  END_STATUTE

START_STATUTE42-14554.  Determining valuation of distribution cooperatives; standard market value factor

A.  The department shall determine the valuation of electric distribution and transmission property of distribution cooperatives operating in this state as follows:

1.  Determine the original plant in service cost and the construction work in progress.

2.  Reduce The sum of the original plant in service cost and construction work in progress by the product of the related accumulated provision for depreciation, determined from data available in the most recent public record reports produced annually by the rural utilities service, multiplied by the standard market value factor.

B.  The department shall determine the standard market value factor as follows:

1.  Using information obtained from data available in the most recent public record reports produced annually by the federal energy regulatory commission for each investor-owned electric utility operating in this state, calculate the following standard factors for each investor-owned electric utility:

(a)  Mega-watt hours sold to ultimate customers per ultimate customer.

(b)  Mega-watt hours sold to ultimate customers per net dollar invested in distribution plant.

(c)  Mega-watt hours sold to ultimate customers per dollar of operating and maintenance expense.

(d)  Mega-watt hours sold to ultimate customers per dollar of distribution operating and maintenance expense.

(e)  Number of ultimate customers per net dollar invested in distribution plant.

(f)  Number of ultimate customers per mile of distribution line.

2.  Determine the average of each of the six standard factors prescribed in paragraph 1 of this subsection for the investor-owned electric utilities operating in this state by adding the values for each of the standard factors for each of the investor-owned electric utilities and dividing each of the six sums by the number of the investor-owned electric utilities operating in this state.

3.  Using information obtained from the report filed with the department pursuant to section 42-14553, calculate the standard factors prescribed in paragraph 1 of this subsection for the distribution cooperative.

4.  Divide each of the six standard factors for the distribution cooperative by the corresponding average standard factors for the investor‑owned electric utilities.

5.  Divide the sum of the six ratios determined pursuant to paragraph 4 of this subsection by six.  This quotient is the standard market value factor.

C.  The department shall not value contributions in aid of construction.

D.  The value of materials and supplies is the total cost of materials and supplies as of December 31 of the preceding calendar year.

E.  The terms used in this section shall be interpreted and applied according to the federal energy regulatory commission uniform system of accounts for electric utilities in effect on January 1, 1989. END_STATUTE