SENATE BILL REPORT

SB 6844

BYSenators Benitz and Hansen

Exempting amounts expended on construction of new electrical generation facilities from the public utility tax.

Senate Committee on Energy & Utilities

Senate Hearing Date(s):January 30, 1990

Senate Staff:Phil Moeller (786-7445)

JANUARY 30, 1990

BACKGROUND:

Contrary to the predictions of many energy forecasters, demand for electricity in the state has grown significantly in the past several years.  Essentially, no more undeveloped large scale hydropower sites remain in the state.  Recent announcements by Canadian officials have confirmed that present agreements providing for low cost imports of Canadian hydropower will not be renewed, regardless of price.  Canadian officials have also sent signals that they will not serve as an energy farm for the northwest.

Depending on the growth rate of electricity consumptions, areas of the state could be facing supply deficits within two years.  Some people contend the present system of energy planning fails to give utilities the proper incentives to provide adequate generating resources and avoid supply shortages.

SUMMARY:

For the purposes of computing its public utility tax, a utility is allowed to deduct from its gross income the costs of constructing any electrical generation facilities located within the state and begun after July 1, 1990.

This measure would expire June 30, 1993.

Appropriation:  none

Revenue:   none

Fiscal Note:    requested January 29, 1990