(a)(1) On and after January 1, 2007, each electric distribution company shall provide electric generation services through standard service to any customer who (A) does not arrange for or is not receiving electric generation services from an electric supplier, and (B) does not use a demand meter or has a maximum demand of less than five hundred kilowatts.

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(2) Not later than October 1, 2006, and periodically as required by subdivision (3) of this subsection, but not more often than every calendar quarter, the Public Utilities Regulatory Authority shall establish the standard service price for such customers pursuant to subdivision (3) of this subsection. Each electric distribution company shall recover the actual net costs of procuring and providing electric generation services pursuant to this subsection, provided such company mitigates the costs it incurs for the procurement of electric generation services for customers who are no longer receiving service pursuant to this subsection.

(3) An electric distribution company providing electric generation services pursuant to this subsection shall cooperate with the procurement manager of the Public Utilities Regulatory Authority and comply with the procurement plan for electric generation services contracts. Such plan shall require that the portfolio of service contracts be procured in such manner and duration as the authority determines to be most likely to produce just, reasonable and reasonably stable retail rates while reflecting underlying wholesale market prices over time. The portfolio of contracts shall be assembled in such manner as to invite competition; guard against favoritism, improvidence, extravagance, fraud and corruption; and secure a reliable electricity supply while avoiding unusual, anomalous or excessive pricing. An affiliate of an electric distribution company may bid for an electric generation services contract, provided such electric distribution company and affiliate are in compliance with the code of conduct established in section 16-244h.

(4) The procurement manager of the Public Utilities Regulatory Authority may retain the services of entities as it sees fit to assist with the procurement of electric generation services for standard service. Costs associated with the retention of such third-party entity shall be included in the cost of standard service.

(5) For standard service contracts procured prior to the authority’s approval of the Procurement Plan, each bidder for a standard service contract shall submit its bid to the electric distribution company and the third-party entity who shall jointly review the bids and submit an overview of all bids together with a joint recommendation to the authority as to the preferred bidders. The authority may, within ten business days of submission of the overview, reject the recommendation regarding preferred bidders. In the event that the authority rejects the preferred bids, the electric distribution company and the third-party entity shall rebid the service pursuant to this subdivision. The authority shall review each bid in an uncontested proceeding that shall include a public hearing and in which any interested person, including, but not limited to, the Consumer Counsel, the Commissioner of Energy and Environmental Protection or the Attorney General, may participate.

(b) (1) Notwithstanding the provisions of this section regarding the procurement of electric generation services under standard service, section 16-244h or 16-245o, the Department of Energy and Environmental Protection may, from time to time, direct an electric distribution company to offer, through an electric supplier or electric suppliers, one or more alternative standard service options. Such alternative options shall include, but not be limited to, an option that consists of the provision of electric generation services that exceed the renewable portfolio standards established in section 16-245a and may include an option that utilizes strategies or technologies that reduce the overall consumption of electricity of the customer.

(2) (A) The authority shall develop such alternative option or options in a contested case conducted in accordance with the provisions of chapter 54. The authority shall determine the terms and conditions of such alternative option or options, including, but not limited to, (i) the minimum contract terms, including pricing, length and termination of the contract, and (ii) the minimum percentage of electricity derived from Class I or Class II renewable energy sources, if applicable. The electric distribution company shall, under the supervision of the authority, subsequently conduct a bidding process in order to solicit electric suppliers to provide such alternative option or options.

(B) The authority may reject some or all of the bids received pursuant to the bidding process.

(3) The authority may require an electric supplier to provide forms of assurance to satisfy the authority that the contracts resulting from the bidding process will be fulfilled.

(4) An electric supplier who fails to fulfill its contractual obligations resulting from this subdivision shall be subject to civil penalties, in accordance with the provisions of section 16-41, or the suspension or revocation of such supplier’s license or a prohibition on the acceptance of new customers, following a hearing that is conducted as a contested case, in accordance with the provisions of chapter 54.

(c) (1) On and after January 1, 2007, an electric distribution company shall serve customers that are not eligible to receive standard service pursuant to subsection (a) of this section as the supplier of last resort. This subsection shall not apply to customers purchasing power under contracts entered into pursuant to section 16-19hh.

(2) An electric distribution company shall procure electricity at least every calendar quarter to provide electric generation services to customers pursuant to this subsection. The Public Utilities Regulatory Authority shall determine a price for such customers that reflects the full cost of providing the electricity on a monthly basis. Each electric distribution company shall recover the actual net costs of procuring and providing electric generation services pursuant to this subsection, provided such company mitigates the costs it incurs for the procurement of electric generation services for customers that are no longer receiving service pursuant to this subsection.

(d) On and after January 1, 2000, and until such time the regional independent system operator implements procedures for the provision of back-up power to the satisfaction of the Public Utilities Regulatory Authority, each electric distribution company shall provide electric generation services to any customer who has entered into a service contract with an electric supplier that fails to provide electric generation services for reasons other than the customer’s failure to pay for such services. Between January 1, 2000, and December 31, 2006, an electric distribution company may procure electric generation services through a competitive bidding process or through any of its generation entities or affiliates. On and after January 1, 2007, such company shall procure electric generation services through a competitive bidding process pursuant to a plan submitted by the electric distribution company and approved by the authority. Such company may procure electric generation services through any of its generation entities or affiliates, provided such entity or affiliate is the lowest qualified bidder and provided further any such entity or affiliate is licensed pursuant to section 16-245.

(e) An electric distribution company is not required to be licensed pursuant to section 16-245 to provide standard service pursuant to subsection (a) of this section, supplier of last resort service pursuant to subsection (c) of this section or back-up electric generation service pursuant to subsection (d) of this section.

(f) The electric distribution company shall be entitled to recover reasonable costs incurred as a result of providing standard service pursuant to subsection (a) of this section or back-up electric generation service pursuant to subsection (d) of this section.

(g) The Public Utilities Regulatory Authority shall establish, by regulations adopted pursuant to chapter 54, procedures for when and how a customer is notified that his electric supplier has defaulted and of the need for the customer to choose a new electric supplier within a reasonable period of time or to return to standard service.

(h) (1) Notwithstanding the provisions of subsection (b) of this section regarding an alternative standard service option, an electric distribution company providing standard service, supplier of last resort service or back-up electric generation service in accordance with this section shall contract with its wholesale suppliers to comply with the renewable portfolio standards. The Public Utilities Regulatory Authority shall annually conduct an uncontested proceeding in order to determine whether the electric distribution company’s wholesale suppliers met the renewable portfolio standards during the preceding year. On or before December 31, 2013, the authority shall issue a decision on any such proceeding for calendar years up to and including 2012, for which a decision has not already been issued. Not later than December 31, 2014, and annually thereafter, the authority shall, following such proceeding, issue a decision as to whether the electric distribution company’s wholesale suppliers met the renewable portfolio standards during the preceding year. An electric distribution company shall include a provision in its contract with each wholesale supplier that requires the wholesale supplier to pay the electric distribution company an amount of: (A) For calendar years up to and including calendar year 2017, five and one-half cents per kilowatt hour if the wholesale supplier fails to comply with the renewable portfolio standards during the subject annual period, (B) for calendar years commencing on January 1, 2018, up to and including the calendar year commencing on January 1, 2020, five and one-half cents per kilowatt hour if the wholesale supplier fails to comply with the renewable portfolio standards during the subject annual period for Class I renewable energy sources, and two and one-half cents per kilowatt hour if the wholesale supplier fails to comply with the renewable portfolio standards during the subject annual period for Class II renewable energy sources, (C) for calendar years commencing on and after January 1, 2021, four cents per kilowatt hour if the wholesale supplier fails to comply with the renewable portfolio standards during the subject annual period for Class I renewable energy sources, and two and one-half cents per kilowatt hour if the wholesale supplier fails to comply with the renewable portfolio standards during the subject annual period for Class II renewable energy sources, and (D) for calendar years commencing on and after January 1, 2024, three cents per kilowatt hour if the wholesale supplier fails to comply with the renewable portfolio standards during the subject annual period for Class II renewable energy sources. The electric distribution company shall promptly transfer any payment received from the wholesale supplier for the failure to meet the renewable portfolio standards to the Clean Energy Fund for the development of Class I renewable energy sources, provided, on and after June 5, 2013, any such payment shall be refunded to ratepayers by using such payment to offset the costs to all customers of electric distribution companies of the costs of contracts and tariffs entered into pursuant to sections 16-244r, 16-244t and 16-244z, except that, on or after January 1, 2023, any such payment that is attributable to a failure to comply with the Class II renewable portfolio standards shall be deposited in the sustainable materials management account established pursuant to section 16-244bb. Any excess amount remaining from such payment shall be applied to reduce the costs of contracts entered into pursuant to subdivision (2) of this subsection, and if any excess amount remains, such amount shall be applied to reduce costs collected through nonbypassable, federally mandated congestion charges, as defined in section 16-1.

(i) (1) As used in this section:

(A) “Participating electric supplier” means an electric supplier that is licensed by the department to provide electric service, pursuant to this subsection, to residential or small commercial customers.

(B) “Residential customer” means a customer who is eligible for standard service and who takes electric distribution-related service from an electric distribution company pursuant to a residential tariff.

(C) “Small commercial customer” means a customer who is eligible for standard service and who takes electric distribution-related service from an electric distribution company pursuant to a small commercial tariff.

(D) “Qualifying electric offer” means an offer to provide full requirements commodity electric service and all other generation-related service to a residential or small commercial customer at a fixed price per kilowatt hour for a term of no less than one year.

(2) In the manner determined by the authority, residential or small commercial service customers (A) initiating new utility service, (B) reinitiating service following a change of residence or business location, (C) making an inquiry regarding their utility rates, or (D) seeking information regarding energy efficiency shall be offered the option to learn about their ability to enroll with a participating electric supplier. Customers expressing an interest to learn about their electric supply options shall be informed of the qualifying electric offers then available from participating electric suppliers. The electric distribution companies shall describe then available qualifying electric offers through a method reviewed and approved by the authority. The information conveyed to customers expressing an interest to learn about their electric supply options shall include, at a minimum, the price and term of the available electric supply option. Customers expressing an interest in a particular qualifying electric offer shall be immediately transferred to a call center operated by that participating electric supplier.

(3) Not later than September 1, 2007, the authority shall establish terms and conditions under which a participating electric supplier can be included in the referral program described in subdivision (2) of this subsection. Such terms shall include, but not be limited to, requiring participating electrical suppliers to offer time-of-use and real-time use rates to residential customers.

(4) Each calendar quarter, participating electric suppliers shall be allowed to list qualifying offers to provide electric generation service to residential and small commercial customers with each customer’s utility bill. The authority shall determine the manner such information is presented in customers’ utility bills.

(5) Any customer that receives electric generation service from a participating electric supplier may return to standard service or may choose another participating electric supplier at any time, including during the qualifying electric offer, without the imposition of any additional charges. Any customer that is receiving electric generation service from an electric distribution company pursuant to standard service can switch to another participating electric supplier at any time without the imposition of additional charges.

(6) An electric distribution company shall transfer a residential customer to the standard service rate not later than seventy-two hours after receipt of a request from a residential customer eligible for standard service, provided such customer shall remain on the standard service rate for at least the remainder of that billing cycle. An electric distribution company shall transfer a residential customer to the electric generation service rate of an electric supplier not later than forty-five days after the electric distribution company receives from the electric supplier a successful enrollment of such residential customer.

(7) Notwithstanding any other provision of the general statutes, nothing shall prohibit a residential customer who moves from one dwelling to another dwelling within the state from immediately receiving electric generation service from an electric supplier, provided such customer was receiving such service from an electric supplier immediately prior to such move.

(j) Each electric distribution company shall offer to bill customers on behalf of participating electric suppliers and to pay such suppliers in a timely manner the amounts due such suppliers from customers for generation services, less a percentage of such amounts that reflects uncollectible bills and overdue payments as approved by the Public Utilities Regulatory Authority.

(k) On or before July 1, 2007, the Public Utilities Regulatory Authority shall initiate a proceeding to examine whether electric supplier bills rendered pursuant to section 16-245d and any regulations adopted thereunder sufficiently enable customers to compare pricing policies and charges among electric suppliers.

(l) The authority shall conduct a proceeding to determine the cost of billing, collection and other services provided by the electric distribution companies or the department solely for the benefit of participating electric suppliers and aggregators. The department shall order an equitable allocation of such costs among electric suppliers and aggregators. As part of this same proceeding, the department shall also determine the costs that the electric distribution companies incur solely for the benefit of standard service and last resort service customers. After such determination, the department shall allocate and provide for the equitable recovery of such costs from standard service or last resort service customers.

(m) Nothing in the provisions of this section shall preclude an electric distribution company from entering into standard service supply contracts or standard service supply components with electric generating facilities.