To enact sections 4928.71, 4928.72, 4928.73, 4928.731, 4928.732, 4928.733, 4928.734, and 4928.735 of the Revised Code to continue an electric distribution utility's current rate stabilization plan until the Public Utilities Commission determines there is effective competition in retail generation service within the utility's distribution territory and to require the Commission to ensure adequate generating capacity in Ohio through specified means.

Section 1. That sections 4928.71, 4928.72, 4928.73, 4928.731, 4928.732, 4928.733, 4928.734, and 4928.735 of the Revised Code be enacted to read as follows:

Sec. 4928.71.  Notwithstanding any provision that authorizes or requires earlier termination or expiration, the terms and conditions of an electric distribution utility's rate stabilization plan in effect on the effective date of this section shall remain in effect regarding the utility's provision of retail electric service in its certified electric distribution territory until such date as the public utilities commission, on its own initiative or pursuant to the application of any person, specifies in a final order, after notice and an opportunity to be heard, that there is effective competition in the provision of retail generation service in that territory. For that purpose, the commission shall consider the factors specified in and applicable to services described in division (D) of section 4928.06 of the Revised Code.

Sec. 4928.72.  (A) The public utilities commission shall ensure that there is adequate electric generating capacity for the benefit of consumers in this state. To that end and after notice and an opportunity to be heard, the commission by order may do either of the following:

(1) Authorize or require one or more electric distribution utilities, the certified electric distribution territories of which have inadequate electric generating capacity as determined by the commission, to construct one or more electric generating facilities in this state. Chapter 4906. and division (E) of section 4928.17 of the Revised Code shall not apply to any such facility. In exercising its authority under section 4905.20, 4905.21, 4905.46, or 4905.48 of the Revised Code, the commission shall deny the divestiture of any such facility if the divestiture will adversely affect the adequacy of generating capacity for consumers in this state.

(2) Provide for the design and construction of one or more electric generating facilities in this state under jurisdiction of the commission hereby conferred. For that purpose, the commission may hire such expertise as it determines necessary to design, construct, and operate any such facility; and shall have such power as is necessary to ensure the facility is built using best practices, and built in a financially prudent manner with maximum, reasonable cost-effectiveness for consumers. Financing may include cash, installment payments with or without a mortgage, lease-purchase agreements, leases with an option to purchase, or the issuance of securities under sections 4928.73 to 4928.735 of the Revised Code.

(B)(1) For the purpose of financing all or part of the costs of designing and constructing a facility authorized or required under division (A)(1) or (2) of this section, the commission by order may establish a just and reasonable surcharge on electric distribution rates if, after notice and hearing, it determines that the surcharge will enable the construction of the facility in a financially prudent manner with maximum, reasonable cost-effectiveness for consumers. The surcharge may be established on the distribution rates of customers in all certified territories in this state or customers of one or more certified territories as the commission determines just and reasonable. If the surcharge is established for a facility authorized or required under division (A)(1) of this section, the commission shall ensure, through such means or methods the commission determines reasonably appropriate, that the benefits of the facility to surcharge customers and to the utility or utilities under that division are justly and reasonably shared proportionate to their respective financial contributions to the facility's design and construction costs.

(2) The surcharge shall not exceed the amount the commission determines necessary to pay only the design and construction costs of the facility or facilities over and above any other money as will be or is applied to those costs. Such costs shall include architectural and engineering fees, land acquisition or remediation costs, and such other third-party costs related to a facility's design or construction.

(3) An electric distribution utility shall remit the surcharge revenue quarterly to the commission. The revenue shall be deposited to the credit of the generating capacity fund, which fund shall be in the custody of the treasurer of state, but shall not be part of the state treasury. All interest and other earnings on the fund shall be credited to the fund. The fund shall be used first to pay any debt charges and any special fund deposits in compliance with securities documents executed under section 4928.734 of the Revised Code and then to any other cost specified in division (B)(2) of this section.

(4) The surcharge shall terminate upon such date as the commission specifies by order upon a determination, after hearing, that all such costs have been paid. Any money remaining in the fund after that determination shall be deposited to the credit of the advanced energy fund created in section 4928.61 of the Revised Code.

Sec. 4928.73.  As used in sections 4928.731 to 4928.735 of the Revised Code:

(A) "Issuing authority" means the treasurer of state or the officer or employee who performs those functions by law.

(B) "Securities" means bonds, notes, or other evidences of obligation, issued in temporary or permanent form, including book-entry securities.

Sec. 4928.731.  (A) When directed by the public utilities commission and in the amount determined by the commission, the issuing authority shall issue securities for the sole purpose of financing the design and construction of one or more electric generating facilities pursuant to division (A)(2) of section 4928.72 of the Revised Code. The securities shall be secured only by the revenue generated from a surcharge authorized under division (B) of that section. The authority also may issue securities to fund or refund, and issue securities in anticipation of the proceeds of, those securities.

(B) The maximum maturity of securities issued pursuant to division (A) of this section shall be determined by the issuing authority and shall be based on the estimated life of the associated electric generating facility or the period during which the facility is used and useful in rendering utility service.

(C) The authority shall issue securities under division (A) of this section subject to just, reasonable, and financially sound procedures, terms, and conditions.

(D) The authority may appoint or provide for the appointment of agents, consultants, independent contractors, or any other type of administrative, investment, financial, or accounting experts as are necessary, in the judgment of the authority, to carry out the authority's duties under sections 4928.73 to 4928.735 of the Revised Code.

Sec. 4928.732.  Securities issued under section 4928.731 of the Revised Code are special obligation securities and are not general obligations of this state. Such securities shall not constitute debt for which the full faith and credit of this state may be pledged. The holder or owner of the securities shall have no right to have money raised by taxation by this state or any political subdivision of this state obligated or pledged, and money so raised shall not be obligated or pledged, for the payment of principal or interest on such securities, and each security shall bear on its face a statement to that effect. Money received by the public utilities commission pursuant to division (B) of section 4928.72 of the Revised Code shall not be considered money raised by taxation.

Sec. 4928.733.  The proceeds from the issuance of securities under section 4928.731 of the Revised Code shall be deposited into the generating capacity securities fund, which is hereby created. The fund shall be in the custody of the treasurer of state, but shall not be part of the state treasury. The fund shall consist of the proceeds of the securities and shall be used to pay only design, construction, and related costs specified in division (B)(2) of section 4928.72 of the Revised Code and may be used to pay for costs and expenses related to the issuance of the securities at the discretion of the issuing authority. All interest and other earnings of the fund shall be credited to the fund.

Sec. 4928.734.  The issuing authority shall take all action necessary to pay the debt incurred by the issuance of securities pursuant to section 4928.731 of the Revised Code and shall execute all necessary documents to provide for the pledge, protection, and disposition of any pledged revenue raised from the surcharge authorized under division (B) of section 4928.72 of the Revised Code from which debt charges and any special fund deposits are to be paid. Those necessary documents include the issued securities, trust agreements, leases, and other financing documents.

Sec. 4928.735.  Except for sections 9.98 to 9.983 and sections 4928.73 to 4928.734 of the Revised Code, the securities issued pursuant to section 4928.731 of the Revised Code shall not be subject to any other provision of the Revised Code governing the issuance of securities by this state or any political subdivision of this state.