(1) Upon creation of a Utah fire fund under Section 54-24-301, a large-scale electric utility shall: (a) open a separate investment account designated as the Utah fire fund to hold all assets as described in Subsection 54-24-301(3) and designate the chief executive officer, chief financial officer, and other appropriate representatives as authorized by the board of directors of the utility as the account signatories; (b) invest Utah fire fund assets collected under Subsection 54-24-301(3) only in accordance with Title 51, Chapter 7, State Money Management Act, with all investment returns remaining in the Utah fire fund and not allocated to other accounts of the large-scale electric utility; (c) record all customer funds received into the large-scale electric utility's Utah fire fund account in a separate ledger account that reflects deposits, disbursements, assets, liabilities, equity, income, and expenditures related to the fund; (d) report all Utah fire fund account activity, including investment statements and ledger account reconciliations, to the commission annually, unless otherwise directed by commission order or regulation; (e) identify the Utah fire fund investment account as restricted in the large-scale electric utility's financial statements, with an offsetting regulatory liability owed back to customers in the event the funds are not fully utilized; and (f) maintain records of the assets, liabilities, equity, income, and expenditures of the large-scale electric utility's Utah fire fund. (2) (a) For all fire claims arising out of fire events that occurred in a calendar year, a large-scale electric utility may not receive disbursement of funds from a Utah fire fund until the large- scale electric utility has first paid $10,000,000 towards eligible payments from the large-scale electric utility's own funds, not included in its regulated revenue requirement. (b) Subject to Subsection (2)(a), a large-scale electric utility may disburse funds from the large- scale electric utility's Utah fire fund to pay eligible payments. (3) A surcharge described in Section 54-24-301 that funds a large-scale electric utility's Utah fire fund shall terminate on the earliest of the following dates: (a) the date that is 10 years after the effective date of the commission approved surcharge that established the large-scale electric utility's Utah fire fund; (b) the date on which the assets in the large-scale electric utility's Utah fire fund reach an amount equal to 50% of the large-scale electric utility's Utah revenue requirement established in the large-scale electric utility's most recently approved general rate case; or (c) the date on which the commission determines, on the commission's own motion, that the surcharge should terminate, regardless of the current balance in the Utah fire fund. (4) (a) In a rate case or other appropriate proceeding, any party may challenge the amount of the disbursement from the large-scale electric utility's Utah fire fund used for the settlement of a fire claim. (b) If an expenditure is challenged under Subsection (5)(a): (i) the commission may require that the large-scale electric utility replenish the large-scale electric utility's Utah fire fund for any amount that the commission determines was imprudent; and (ii) the burden is on the challenging party to prove imprudence. (c) The use of a Utah fire fund to pay a judgment relating to a fire claim is considered prudent and is not subject to challenge. (5) If the commission orders a large-scale electric utility to reimburse a Utah fire fund due to imprudence under this Subsection (5), the large-scale electric utility's total reimbursement obligation may not exceed 10% of the large-scale electric utility's distribution equity rate base assigned to this state for the calendar year in which the calculation is performed.
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