(II) THE COSTS OF NUCLEAR GENERATION FACILITIES OR
PURCHASED POWER CONTRACTS THAT, AS PART OF A SETTLEMENT APPROVED BY
THE COMMISSION, REMAIN REGULATED OR ARE RECOVERED THROUGH THE
DISTRIBUTION FUNCTION

(B) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION, THIS SECTION
DOES NOT APPLY TO AN INVESTOR-OWNED ELECTRIC COMPANY UNTIL THE
ELECTRIC COMPANY:

(I) TRANSFERS GENERATION FACILITIES AND GENERATION
ASSETS TO AN AFFILIATE OF THE ELECTRIC COMPANY, AND THE AFFILIATE
OPERATES THE FACILITIES AND ASSETS; OR

(II) SELLS THE GENERATION FACILITIES AND GENERATION
ASSETS TO A NONAFFILIATE.

(2) (I) NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH (1) OF
THIS SUBSECTION, THIS SECTION APPLIES TO AN INVESTOR-OWNED ELECTRIC
COMPANY THAT DOES NOT TRANSFER ITS GENERATION FACILITIES AND
GENERATION ASSETS TO AN AFFILIATE OR SELL ITS GENERATION FACILITIES AND
GENERATION ASSETS TO A NONAFFILIATE IF, ON JANUARY 1, 1999, THE RETAIL PEAK
LOAD OF THE INVESTOR-OWNED ELECTRIC COMPANY IN THE STATE WAS LESS THAN
1,000 MEGAWATTS.

(II) AN INVESTOR-OWNED ELECTRIC COMPANY TO WHICH THIS
SECTION APPLIES THROUGH SUBPARAGRAPH (I) OF THIS PARAGRAPH SHALL, BY
JANUARY 1, 2001:

1. TRANSFER ITS GENERATION FACILITIES AND
GENERATION ASSETS TO AN AFFILIATE OF THE INVESTOR-OWNED ELECTRIC
COMPANY THAT OPERATES THE FACILITIES AND ASSETS; OR

2. SELL THE GENERATION FACILITIES AND GENERATION
ASSETS TO A NONAFFILIATE.

(C) THE EXCEPTIONS IN SUBSECTION(A)(1) OF THIS SECTION AS TO ANY
ELECTRIC COMPANY SHALL REMAIN IN EFFECT UNTIL THE LATER OF:

(1) THE DATE WHEN ALL CUSTOMERS OF THAT ELECTRIC COMPANY
ARE ELIGIBLE FOR CUSTOMER CHOICE UNDER § 7-510 OF THIS SUBTITLE;

(2) THE DATE WHEN THE AMOUNT OF TRANSITION COSTS OR BENEFITS
ARISING FROM THE GENERATION THAT IS DEREGULATED HAS BEEN FINALLY
DETERMINED BY THE COMMISSION UNDER § 7-513(A) THROUGH (C) OF THIS
SUBTITLE; OR

(3) IF, UNDER § 7-510(C)(3)(II) OF THIS SUBTITLE, THE COMMISSION
EXTENDS THE OBLIGATION TO PROVIDE STANDARD OFFER SERVICE, THE DATE ON
WHICH THE COMMISSION TERMINATES THAT OBLIGATION