"AN ACT CONCERNING CONNECTICUT'S ENERGY POLICY. "

After the last section, add the following and renumber sections and internal references accordingly:

"Sec. 501. (Effective July 1, 2007) On or before September 1, 2007, the Department of Public Utility Control shall initiate an uncontested proceeding to evaluate whether and how customers benefit from residential retail competition with regard to services and products offered by electric, community antenna television and telecommunications companies. Such evaluation shall include, but not be limited to, an analysis of the needs of customers and how best to meet those needs, the reliability of any pertinent systems or infrastructures and rates, revenues and profits of such companies. The department shall report the findings of such evaluation to the joint standing committee of the General Assembly having cognizance of matters relating to energy and technology on or before February 1, 2008.

Sec. 502. (NEW) (Effective from passage and applicable to profits generated on or after January 1, 2007) (a) For the income years commencing January 1, 2007, January 1, 2008, and January 1, 2009, each company that owns an electric generating unit located in the state that uses uranium or coal as a fuel source, including any affiliates or subsidiaries of such company, whether those affiliates or subsidiaries are located within the state or outside the state, shall pay a quarterly tax of fifty per cent upon windfall profits, as described in subsections (b) and (c) of this section, from the generation, manufacture, sale or other disposition of the electricity output, capacity payments or other rights to payment based on electricity operations of such electric generating unit located in the state.

(b) Windfall profits of a company shall include all net electric revenue received by the electric generation unit described in subsection (a) of this section, including, but not limited to, net revenue from the generation, manufacture, sale or other disposition of the electricity output, capacity payments and other net revenue in excess of twenty per cent return on the company's equity in the unit, as classified by the Federal Energy Regulatory Commission according to the uniform systems of accounts prescribed in 18 CFR Part 101, accounted for as if the company owning such an electric generating unit located in the state and any of its affiliates or subsidiaries maintained their books and records according to such uniform system of accounts, for operations within the taxable quarter.

(c) (1) Revenue from the generation, manufacture, sale or other disposition of the electricity output and electric capacity and other revenue from the electricity operations of an electric generating unit described in subsection (a) of this section that is received by any affiliate or subsidiary of a company that owns such electric generating unit, whether or not such affiliate or subsidiary is located in the state, shall be attributed to the revenue of the company that owns the electric generating unit located in the state as if other disposition of electricity or rights to electricity by such affiliate or such revenue was received directly by such company.

(2) In calculating earnings subject to the windfall profits tax, revenue from such company and such affiliates or subsidiaries attributed to an electric generating unit described in subsection (a) of this section located in the state shall be reduced by the reasonable operating expenses of such company and affiliate or subsidiary properly allocated to the electric generating unit and is to be determined as if the affiliate or subsidiary were subject to the uniform system of accounts prescribed by the Federal Energy Regulatory Commission in 18 CFR Part 101 for regulated entities.

(d) Each company that owns an electric generating unit located in the state as described in subsection (a) of this section shall, on or before the last day of January, April, July and October of each year, render to the Commissioner of Revenue Services a return on forms prescribed or furnished by the commissioner and signed by its treasurer or the person performing the duties of treasurer, or by an authorized agent or officer, specifying (1) the name and location of such company or affiliate or subsidiary of such company, (2) the amount of all revenue derived from the generation, manufacture, sale or other disposition of the electricity output, capacity payments and other rights to payment based on electricity operations of such electric generating unit received by such company or any of its affiliates or subsidiaries and the amount of reasonable operating expenses for the quarter ending on the last day of the preceding month, (3) the return on equity from the generation, manufacture, sale or other disposition of electricity or rights to electricity, (4) the earnings in excess of a twenty per cent return on equity from the generation, manufacture or sale of electricity or the rights to electricity, (5) the tax due to the state on the windfall profits, and (6) the percentage of their electric output that is being used to meet the power requirements of customers under standard service or supplier of last resort service.

(e) Each such company shall pay a quarterly tax upon its windfall profits in each calendar quarter at the rate of fifty per cent.

(f) The tax imposed by this chapter is due and payable to the Commissioner of Revenue Services quarterly on or before the last day of the month next succeeding each calendar quarter.

Sec. 503. (NEW) (Effective from passage) (a) There is established an account to be known as the "electricity ratepayers relief account" which shall be a separate, nonlapsing account of the General Fund. The proceeds of the tax imposed pursuant to section 502 of this act shall be deposited into the account. Investment earnings credited to the assets of the account shall become part of the assets of the account. Any balance remaining in said account at the end of any fiscal year shall be carried forward in said account for the fiscal year next succeeding.

(b) The Department of Public Utility Control shall conduct a contested case proceeding in accordance with the provisions of chapter 54 of the general statutes to disburse funds from the electricity ratepayers relief account in a manner to directly reduce electricity ratepayers' electric bills.

Sec. 504. (NEW) (Effective from passage) The tax imposed pursuant to section 502 of this act and the related reporting requirements shall not apply to electric generation units that are selling at least fifty per cent of their electric output to an electric distribution company in this state to meet the power requirements of customers under standard service or supplier of last resort service. "