2009 Connecticut Code
Title 16 Public Service Companies
Chapter 283 Department Of Public Utility Control: Telegraph, Telephone, Illuminating, Power And Water Companies
Sec. 16-244f. Divestiture of nonnuclear electric generation facilities. Plan. Approval of sale by department.

      Sec. 16-244f. Divestiture of nonnuclear electric generation facilities. Plan. Approval of sale by department. (a) As used in this section:

      (1) "Generation assets" means electric generation facilities and generation-related operations and functions owned by an electric company and includes associated contractual obligations for energy or capacity from such generation assets; and

      (2) "Net proceeds" means the book income from the sale or divestiture of assets, consisting of sales price less reasonable expenses of sale, related income and other taxes.

      (b) (1) No electric company shall be eligible to claim any stranded costs as provided in sections 16-245e to 16-245k, inclusive, unless the electric company (A) prior to the date when the department approves a divestiture plan, has sold its nonnuclear generation assets in accordance with section 16-43, and (B) on and after the date when the department approves such plan, has submitted all of its nonnuclear generation assets owned or held as of April 29, 1998, to a public auction held in a commercially reasonable manner in accordance with this subsection.

      (2) Each electric company that elects to divest itself of nonnuclear generation assets shall, not later than October 1, 1998, 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 nonnuclear generation assets, and (C) the book value of all assets the electric company intends to make available for sale. In structuring the divestiture plan, the electric company shall take into account the findings set forth in section 16-244. The department shall issue a final order approving or modifying the plan in a time frame that will allow divestiture to be accomplished by January 1, 2000. The department shall, after consultation with the Office of Consumer Counsel, appoint a consultant who shall be an entity unrelated to said company that meets qualifications set by the department, to conduct the auction process.

      (3) The department shall not approve a sale unless (A) the sale price of an asset or assets equals or exceeds book value for the asset or assets, except for any dual-fueled nonnuclear generation unit that began operation between 1974 and 1976 and has a capacity of not less than four hundred twenty megawatts, in which case the sale price for that specific unit equals or exceeds the minimum bid established by the department for the unit, (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.

      (4) The department shall determine the minimum bid price for a dual-fueled nonnuclear generation unit that began operation between 1974 and 1976 and has a capacity of not less than four hundred twenty megawatts, by determining the future net cash flow that a nonnuclear generation unit 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.

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

      (6) All net proceeds realized by an electric company from the sale of assets pursuant to this subsection that exceed the total book value of all the assets sold pursuant to this section shall be netted against the amount of stranded costs as provided in subdivision (4) of subsection (h) and subsection (i) of section 16-245e.

      (7) If an electric company complies with the provisions of this subsection but does not receive any bids for an asset by a qualified bidder that equal or exceed the minimum bid as provided in this subsection, the department shall calculate the value of stranded costs for each such asset in accordance with the provisions of subsection (g) of section 16-245e.

      (P.A. 98-28, S. 6, 117.)

      History: P.A. 98-28 effective April 29, 1998.

      Subsec. (a):

      Because first use of "sale" in Subdiv. (2) clearly refers to actual sale, and not to previous unsuccessful sale attempts, second use is presumed to have same meaning. 266 C. 108. Only reasonable expenses incurred in connection with transaction that resulted in the actual sale may be deducted from sales price. Id.