(3) AS PART OF A SETTLEMENT, THE COMMISSION MAY APPROVE A
FREEZE OR CAP FOR A LONGER DIFFERENT TIME PERIOD OR AN ALTERNATIVE PRICE
PROTECTION PLAN THAT THE COMMISSION DETERMINES IS EQUALLY PROTECTIVE
OF RATEPAYERS. 

(4) (I) 1. SUBJECT TO THE PROVISIONS OF PARAGRAPH (5) OF THIS
SUBSECTION, THE COMMISSION SHALL REDUCE RESIDENTIAL RATES FOR EACH
INVESTOR OWNED ELECTRIC COMPANY BY A MINIMUM OF 3% OF THE GENERATION
PORTION OF BASE RATES, AS MEASURED ON JUNE 30, 1999.

2. THE REDUCTION REQUIRED UNDER SUB-SUBPARAGRAPH
1 OF THIS SUBPARAGRAPH SHALL BEGIN ON THE INITIAL IMPLEMENTATION DATE
AND REMAIN IN EFFECT FOR 4 YEARS. 

3. THE COMMISSION SHALL DETERMINE THE ALLOCATION
OF THE RATE REDUCTION AMONG THE GENERATION, TRANSMISSION, AND
DISTRIBUTION RESIDENTIAL RATE COMPONENTS.

(II) IN ACHIEVING THE RATE REDUCTION REQUIRED UNDER
SUBPARAGRAPH (I) OF THIS PARAGRAPH, THE COMMISSION SHALL CONSIDER:

1. THE EXPIRATION OF ANY SURCHARGE;

2. CHANGES IN THE ELECTRIC COMPANY'S TAX LIABILITY;

3. COST OF SERVICE DETERMINATIONS ORDERED BY THE

COMMISSION;

4. NET TRANSITION COSTS OR BENEFITS; AND

5. THE EFFECT ON THE COMPETITIVE ELECTRICITY SUPPLY

MARKET.

(III) THE COMMISSION MAY INCREASE OR DECREASE THE ACTUAL
RATE REDUCTION REQUIRED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH OR ALLOW
THE RECOVERY OF ANY EXTRAORDINARY COSTS BASED ON THE CIRCUMSTANCES OF
AN INDIVIDUAL ELECTRIC COMPANY IF THE COMMISSION DETERMINES THAT THE
ACTION IS NECESSARY AND IN THE PUBLIC INTEREST.

(IV) IN DETERMINING THE RATE REDUCTION REQUIRED UNDER
SUBPARAGRAPH (I) OF THIS PARAGRAPH, THE COMMISSION MAY NOT INCREASE
RATES FOR NONRESIDENTIAL CUSTOMERS.

(5) THE REQUIREMENTS OF PARAGRAPH (1) OF THIS SUBSECTION DO
NOT APPLY TO AN ELECTRIC COMPANY IF THE COMMISSION APPROVES OR HAS IN
EFFECT A SETTLEMENT THAT THE COMMISSION DETERMINES IS EQUALLY
PROTECTIVE OF RATEPAYERS.

7-506.

(A) THE ELECTRIC COMPANY IN A DISTRIBUTION TERRITORY SHALL PROVIDE
AND BE RESPONSIBLE FOR DISTRIBUTION SERVICES IN THE TERRITORY