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S.B. 75 Enrolled
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UTILITY AMENDMENTS
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2009 GENERAL SESSION
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STATE OF UTAH
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Chief Sponsor: Stephen H. Urquhart
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House Sponsor:
Kevin S. Garn
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LONG TITLE
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General Description:
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This bill amends the rate-setting process for a public utility.
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Highlighted Provisions:
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This bill:
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. defines terms;
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. amends the rate-setting process for a public utility, including:
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. authorizes a public utility's complete filing with the Public Service Commission
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(PSC) to initiate a 240-day time period for rate case decisions;
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. authorizes the PSC to approve or deny an electrical corporation's or a gas
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corporation's application for cost recovery of a major plant addition;
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. allows the PSC to authorize an electrical corporation or a gas corporation
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energy balancing account;
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. authorizes the PSC to approve a bill payment assistance program for
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low-income residential customers of an electrical corporation or a gas
22
corporation; and
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. makes technical corrections.
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Monies Appropriated in this Bill:
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None
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Other Special Clauses:
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This bill provides an immediate effective date.
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This bill provides revisor instructions.
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Utah Code Sections Affected:
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AMENDS:
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54-4-4.1, as enacted by Laws of Utah 1990, Chapter 29
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54-7-12, as last amended by Laws of Utah 2002, Chapter 319
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ENACTS:
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54-7-13.4, Utah Code Annotated 1953
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54-7-13.5, Utah Code Annotated 1953
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54-7-13.6, Utah Code Annotated 1953
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54-7-14.5, Utah Code Annotated 1953
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REPEALS:
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54-7-13, as last amended by Laws of Utah 1987, Chapter 161
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
54-4-4.1
is amended to read:
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54-4-4.1. Rules to govern rates.
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(1) The commission may, by rule or order, adopt any method of rate regulation that is:
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(a) consistent with this title[, including a method whereby revenues or earnings of a
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public utility above a specified level are equitably shared between the public utility and its
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customers.];
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(b) in the public interest; and
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(c) just and reasonable.
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[(2) Not later than 60 days from the entry of an order or adoption of a rule adopting a
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method of rate regulation whereby revenues or earnings of a public utility above a specified
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level are equitably shared between the public utility and its customers, the public utility may
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elect not to proceed with the method of rate regulation by filing with the commission a notice
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that it does not intend to proceed with the method of rate regulation.]
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(2) In accordance with Subsection (1), a method of rate regulation may include:
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(a) rate designs utilizing:
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(i) volumetric rate components;
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(ii) demand rate components;
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(iii) fixed rate components; and
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(iv) variable rate components;
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(b) rate stabilization methods;
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(c) decoupling methods;
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(d) incentive-based mechanisms; and
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(e) other components, methods, or mechanisms approved by the commission.
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Section 2.
Section
54-7-12
is amended to read:
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54-7-12. Rate increase or decrease -- Procedure -- Effective dates -- Electrical or
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telephone cooperative.
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(1) As used in this section:
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(a) (i) "Base rates" means those charges included in a public utility's generally
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applicable rate tariffs, including:
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(A) a fare;
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(B) a rate;
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(C) a rental;
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(D) a toll; or
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(E) any other charge generally applicable to a public utility's rate tariffs.
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(ii) Unless included by a commission order, "base rates" does not include charges
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included in:
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(A) a deferred account;
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(B) a balancing account;
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(C) a major plant addition surcharge;
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(D) a major plant addition surcredit;
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(E) a special contract; or
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(F) a public utility program offering.
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(b) (i) "Complete filing" means an application filed by a public utility that
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substantially complies with minimum filing requirements established by the commission, by
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rule, for a general rate increase or decrease.
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(ii) The commission shall within 180 days after the effective date of this section create
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and finalize rules concerning the minimum requirements to be met for an application to be
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considered a complete filing.
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[(a) "Rate] (c) "General rate decrease" means:
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(i) any direct decrease [in a rate, fare, toll, rental, or other charge of a public utility] to
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a public utility's base rates; or
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(ii) any modification of a classification, contract, practice, or rule that decreases a
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[rate, fare, toll, rental, or other charge of a public utility] public utility's base rates.
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[(b)] (d) ["Rate] "General rate increase" means:
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[(i) means:]
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[(A)] (i) any direct increase [in a rate, fare, toll, rental, or other charge of a public
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utility] to a public utility's base rates; or
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[(B)] (ii) any modification of a classification, contract, practice, or rule that increases
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a [rate, fare, toll, rental, or other charge of a public utility; and] public utility's base rates.
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[(ii) does not include a tariff under Section
54-7-12.8
.]
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(2) (a) [Any] A public utility [or other party that proposes to increase or decrease
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rates] that files for a general rate increase or general rate decrease shall file [appropriate
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schedules] a complete filing with the commission setting forth the proposed rate increase or
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decrease.
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(b) (i) For purposes of this Subsection (2), a public utility's application for a general
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rate increase or decrease shall be considered a complete filing unless within 30 days after the
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day on which the commission receives the public utility's application, the commission issues
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an order describing information that the public utility must provide for the application to be
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considered a complete filing.
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(ii) Subject to Subsection (2)(b)(iii) and within 14 days after the day on which the
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application is received by the commission, a party or a person may file a motion to challenge
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whether an application for a general rate increase or decrease is a complete filing.
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(iii) A party or a person may not file a motion described in Subsection (2)(b)(ii) unless
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the person or party has first filed a motion to intervene with the commission.
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(c) If, in accordance with Subsection (2)(b)(i), the commission issues an order that an
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application is not a complete filing, the commission shall:
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(i) determine the materiality of an application deficiency; and
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(ii) (A) if the deficiencies are not material, issue an order that the 240-day period
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described in Subsection (3)(a) shall continue without delay or be suspended and resume when
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the public utility files the required information; or
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(B) if the deficiencies are material, issue an order that the 240-day period described in
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Subsection (3)(a) shall start over when the public utility files the required information.
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[(b)] (d) (i) The commission shall, after reasonable notice, hold a hearing to determine
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whether the proposed rate increase or decrease, or some other rate increase or decrease, is just
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and reasonable.
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(ii) If a rate decrease is proposed by a public utility, the commission may waive a
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hearing unless it seeks to suspend, alter, or modify the rate decrease.
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[(c)] (e) Except as otherwise provided in [Subsections] Subsection (2)(d), (3) [and], or
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(4), a proposed rate increase or decrease is not effective until after completion of the hearing
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and issuance of a final order by the commission concerning the proposed increase or decrease.
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(3) (a) Within 240 days after a public utility submits a complete filing, the
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commission shall issue a final order to:
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(i) grant the proposed general rate increase or decrease;
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(ii) grant a different general rate increase or decrease; or
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(iii) deny the proposed general rate increase or decrease.
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(b) If the commission does not issue a final written order within 240 days after the
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public utility submits a complete filing in accordance with Subsection (3)(a):
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(i) the public utility's proposed rate increase or decrease is final; and
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(ii) the commission may not order a refund of any amount already collected or
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returned by the public utility under Subsection (4)(a).
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[(3) The following rules apply to the implementation of any proposed rate increase or
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decrease filed by a utility or proposed by any other party and to the implementation of any
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other increase or decrease in lieu of that proposed by a utility or other party that is determined
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to be just and reasonable by the commission.]
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[(a) On its own initiative or in response to an application by a public utility or other
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party, the commission, after a hearing, may allow any proposed rate increase or decrease, or a
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reasonable part of the rate increase or decrease, to take effect, subject to the commission's right
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to order a refund or surcharge, upon the filing of the utility's schedules or at any time during
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the pendency of the commission's hearing proceedings.]
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(4) (a) (i) A request for interim rates shall be made within 90 days after the day on
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which a public utility files a complete filing for a general rate increase or a general rate
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decrease.
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(ii) The commission, on its own initiative or in response to an application by a public
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utility or other party, may, after a hearing, allow any rate increase or decrease proposed by a
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public utility, or a reasonable part of the rate increase or decrease, to take effect on an interim
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basis within 45 days after the day on which the request is filed, subject to the commission's
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right to order a refund or surcharge.
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(iii) The evidence presented in the hearing held pursuant to this Subsection (4) need
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not encompass all issues that may be considered in a rate case hearing held pursuant to
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Subsection (2)[(b)](d), but shall establish an adequate prima facie showing that the interim
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rate increase or decrease is justified.
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(b) [(i) If the] The commission [completes a hearing concerning a utility's revenue
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requirement] may, after a hearing, issue a final order before the expiration of 240 [days from
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the date the rate increase or decrease proposal is filed, the commission may issue a final order
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within that period] days after the day on which the public utility files a complete filing
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establishing the utility's revenue requirement and fixing the utility's [interim] allowable rates
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before the commission determines the final allocation of the increase or decrease among
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categories of customers and classes of service.
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[(ii)] (c) (i) If the commission in the commission's final order on a public utility's
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revenue requirement finds that the interim increase [order] ordered under Subsection [(3)(a)]
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(4)(a)(ii) exceeds the increase finally ordered, the commission shall order the public utility to
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refund the excess to customers.
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(ii) If the commission in the commission's final order on a public utility's revenue
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requirement finds that the interim decrease [order] ordered under Subsection [(3)(a)] (4)(a)(ii)
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exceeds the decrease finally ordered, the commission shall order a surcharge to customers to
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recover the excess decrease.
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[(c) If the commission fails to enter the commission's order granting or revising a
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revenue increase within 240 days after the utility's schedules are filed, the rate increase
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proposed by the utility is final and the commission may not order a refund of any amount
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already collected by the utility under its filed rate increase.]
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[(d) (i) When a public utility files a proposed rate increase based upon an increased
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cost to the utility for fuel or energy purchased or obtained from independent contractors, other
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independent suppliers, or any supplier whose prices are regulated by a governmental agency,
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the commission shall issue a tentative order with respect to the proposed increase within ten
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days after the proposal is filed, unless it issues a final order with respect to the rate increase
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within 20 days after the proposal is filed.]
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[(ii) The commission shall hold a public hearing within 30 days after it issues the
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tentative order to determine if the proposed rate increase is just and reasonable.]
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[(4)] (5) (a) Notwithstanding any other provisions of this title, any schedule,
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classification, practice, or rule filed by a public utility with the commission that does not result
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in any rate increase shall take effect 30 days after the date of filing or within any lesser time
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the commission may grant, subject to its authority after a hearing to suspend, alter, or modify
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that schedule, classification, practice, or rule.
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(b) When the commission suspends a schedule, classification, practice, or rule, the
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commission shall hold a hearing on the schedule, classification, practice, or rule before issuing
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its final order.
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(c) For purposes of this Subsection [(4)] (5), any schedule, classification, practice, or
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rule that introduces a service or product not previously offered may not result in a rate
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increase.
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[(5) (a)] (6) Notwithstanding any other provision of this title, whenever a public utility
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files with the commission any schedule, classification, practice, or rule that does not result in
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an increase in any rate, fare, toll, rental, or charge, the schedule, classification, practice, or rule
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shall take effect 30 days after the date of filing or at any earlier time the commission may
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grant, subject to the authority of the commission, after a hearing, to suspend, alter, or modify
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the schedule, classification, practice, or rule.
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[(b) (i) Notwithstanding any other provision of this title, whenever a public utility files
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with the commission a request for an increase in rates, fares, tolls, rentals, or charges based
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solely upon cost increases to the public utility of fuel supplied by an independent contractor or
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independent source of supply, the requested increase shall take effect ten days after the filing
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of the request with the commission or at any earlier time after the filing of the request as the
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commission may by order permit.]
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[(ii) The commission shall order the increase to take effect only after a showing has
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been made by the public utility to the commission that the increase is justified.]
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[(iii) The commission may, after a hearing, suspend, alter, or modify the increase.]
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[(6)] (7) This section does not apply to any rate changes of an electrical or telephone
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cooperative that meets all of the requirements of this Subsection [(6)] (7).
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(a) (i) The cooperative is organized for the purpose of either distributing electricity or
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providing telecommunication services to its members and the public at cost.
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(ii) "At cost" includes interest costs and a reasonable rate of return as determined by
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the cooperative's board of directors.
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(b) The cooperative's board of directors and any appropriate agency of the federal
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government have approved the rate increase or other rate change and all necessary tariff
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revisions reflecting the increased rate or rate change.
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(c) Before implementing any rate increases, the cooperative has held a public meeting
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for all its customers and members. The cooperative shall mail a notice of the meeting to all of
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the cooperative's customers and members not less than ten days prior to the date that the
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meeting is held.
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(d) The cooperative has filed its tariff revisions reflecting the rate increase or other rate
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change with the commission, who shall make the tariffs available for public inspection.
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[(7)] (8) Notwithstanding Subsections (2) and [(3)] (4), the procedures for
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implementing a proposed rate increase by a telephone corporation having less than 30,000
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subscriber access lines in the state are provided in this Subsection [(7)] (8).
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(a) (i) The proposed rate increase by a telephone corporation subject to this Subsection
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[(7)] (8) may become effective on the day the telephone corporation files with the commission
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the proposed tariff revisions and necessary information to support a determination by the
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commission that the proposed rate increase is just and reasonable.
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(ii) The telephone corporation shall notify the commission and all potentially affected
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access line subscribers of the proposed rate increase 30 days before filing the proposed rate
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increase or change.
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(b) (i) The commission may investigate whether the proposed rate increase is just and
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reasonable.
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(ii) If the commission determines, after notice and hearing, that the rate increase is
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unjust or unreasonable in whole or in part, the commission may establish the rates, charges, or
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classifications that the commission finds to be just and reasonable.
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(c) The commission shall investigate and hold a hearing to determine whether any
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proposed rate increase is just and reasonable if 10% or more of the telephone corporation's
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potentially affected access line subscribers file a request for agency action requesting an
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investigation and hearing.
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Section 3.
Section
54-7-13.4
is enacted to read:
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54-7-13.4. Alternative cost recovery for major plant addition -- Procedure.
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(1) As used in this section:
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(a) (i) "Complete filing" means an application filed by a gas corporation or electrical
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corporation that substantially complies with minimum filing requirements established by the
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commission, by rule, for cost recovery of a major plant addition.
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(ii) The commission shall within 180 days after the effective date of this section create
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and finalize rules concerning the minimum requirements to be met for an application to be
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considered a complete filing.
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(b) "In-service date" means the first day that a gas corporation or an electrical
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corporation is no longer allowed to accrue an allowance for funds used during construction for
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a major plant addition.
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(c) "Major plant addition" means any single capital investment project of a gas
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corporation or an electrical corporation that in total exceeds 1% of the gas corporation's or
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electrical corporation's rate base, based on the gas corporation's or electrical corporation's most
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recent general rate case determination, that is:
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(i) used to serve Utah customers; and
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(ii) assigned or allocated to Utah.
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(2) A gas corporation or an electrical corporation may file with the commission a
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complete filing for cost recovery of a major plant addition if the commission has, in
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accordance with Section
54-7-12
, entered a final order in a general rate case proceeding of the
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gas corporation or electrical corporation within 18 months of the projected in-service date of a
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major plant addition.
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(3) (a) A gas corporation or an electrical corporation may not file for cost recovery of a
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major plant addition more than 150 days before the projected in-service date of the major plant
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addition.
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(b) If the commission determines that the gas corporation or electrical corporation has
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not submitted a complete filing for cost recovery of a major plant addition, the commission
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shall determine:
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(i) what information the electrical corporation or gas corporation needs to provide to
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the commission; and
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(ii) the materiality of an application deficiency.
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(c) With respect to the applicable 90 or 150-day time period under Subsection (4) for
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the commission to enter an order as described in Subsection (4)(a)(iii), the commission may:
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(i) if the deficiencies are not material:
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(A) continue without delay; or
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(B) suspend the applicable 90 or 150-day time period and resume when the electrical
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corporation or gas corporation has filed the required information; or
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(ii) if the deficiencies are material, start the applicable 90 or 150-day time period over
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when the electrical corporation or gas corporation has filed the required information.
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(4) (a) The commission shall:
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(i) review the application for cost recovery of a major plant addition;
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(ii) after a hearing, approve, approve with conditions, or deny cost recovery of the
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major plant addition; and
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(iii) enter an order on cost recovery of a major plant addition within:
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(A) 90 days after the day on which a complete filing is made with respect to a
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significant energy resource approved by the commission under Section
54-17-302
or resource
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decision under Section
54-17-402
; or
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(B) 150 days after the day on which a complete filing is made for any other major
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plant addition.
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(b) (i) If the commission approves cost recovery of a major plant addition, the
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commission shall determine the state's share of projected net revenue requirement impacts of
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the major plant addition, including prudently-incurred capital costs and other reasonably
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projected costs, savings, and benefits.
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(ii) The gas corporation or electrical corporation shall have the burden to prove a
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major plant addition's impacts as described in Subsection (4)(b)(i).
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(c) If the commission has previously issued an order and approved the major plant
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addition as a significant energy resource under Section
54-17-302
or resource decision under
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Section
54-17-402
, the commission shall presume the prudence of the utility's capital costs up
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to the projected costs specified in the commission's previous significant energy resource order
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or resource decision order.
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(5) If the commission approves or approves with conditions cost recovery of a major
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plant addition, the commission shall do one or all of the following:
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(a) subject to Subsection (6)(c), authorize the gas corporation or electrical corporation
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to defer the state's share of the net revenue requirement impacts of the major plant addition for
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recovery in general rate cases; or
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(b) adjust rates or otherwise establish a collection method for the state's share of the
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net revenue requirement impacts that will apply to the appropriate billing components.
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(6) (a) Deferral or collection of the state's share of the net revenue requirement impacts
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of a major plant addition under this section shall commence upon the later of:
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(i) the day on which a commission order is issued approving the deferral or collection
321
amount; or
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(ii) the in-service date of the major plant addition.
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(b) The deferral described in this section shall terminate upon a final commission
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order that provides for recovery in rates of all or any part of the net revenue requirement
325
impacts of the major plant addition.
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(c) If the commission authorizes deferral under Subsection (5)(a), the amount deferred
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shall accrue a carrying charge on the net revenue requirement impacts as determined by the
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commission.
329
Section 4.
Section
54-7-13.5
is enacted to read:
330
54-7-13.5. Energy balancing accounts.
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(1) As used in this section:
332
(a) "Base rates" is as defined in Subsection
54-7-12
(1).
333
(b) "Energy balancing account" means an electrical corporation account for some or
334
all components of the electrical corporation's incurred actual power costs, including:
335
(i) (A) fuel;
336
(B) purchased power; and
337
(C) wheeling expenses; and
338
(ii) the sum of the power costs described in Subsection (1)(b)(i) less wholesale
339
revenues.
340
(c) "Gas balancing account" means a gas corporation account to recover on a
341
dollar-for-dollar basis, purchased gas costs, and gas cost-related expenses.
342
(2) (a) The commission may authorize an electrical corporation to establish an energy
343
balancing account.
344
(b) An energy balancing account shall become effective upon a commission finding
345
that the energy balancing account is:
346
(i) in the public interest;
347
(ii) for prudently-incurred costs; and
348
(iii) implemented at the conclusion of a general rate case.
349
(c) An electrical corporation:
350
(i) may, with approval from the commission, recover costs under this section through:
351
(A) base rates;
352
(B) contract rates;
353
(C) surcredits; or
354
(D) surcharges; and
355
(ii) shall file a reconciliation of the energy balancing account with the commission at
356
least annually with actual costs and revenues incurred by the electrical corporation.
357
(d) An energy balancing account may not alter:
358
(i) the standard for cost recovery; or
359
(ii) the electrical corporation's burden of proof.
360
(e) The collection method described in Subsection (2)(c)(i) shall:
361
(i) apply to the appropriate billing components in base rates; and
362
(ii) be incorporated into base rates in an appropriate commission proceeding.
363
(f) The collection of costs related to an energy balancing account from customers
364
paying contract rates shall be governed by the terms of the contract.
365
(g) Revenues collected in excess of prudently incurred actual costs shall:
366
(i) be refunded as a bill surcredit to an electrical corporation's customers over a period
367
specified by the commission; and
368
(ii) include a carrying charge.
369
(h) Prudently incurred actual costs in excess of revenues collected shall:
370
(i) be recovered as a bill surcharge over a period to be specified by the commission;
371
and
372
(ii) include a carrying charge.
373
(i) The carrying charge applied to the balance in an energy balancing account shall be:
374
(i) determined by the commission; and
375
(ii) symmetrical for over or under collections.
376
(3) (a) The commission may:
377
(i) establish a gas balancing account for a gas corporation; and
378
(ii) set forth procedures for a gas corporation's gas balancing account in the gas
379
corporation's commission-approved tariff.
380
(b) A gas balancing account may not alter:
381
(i) the standard of cost recovery; or
382
(ii) the gas corporation's burden of proof.
383
(4) (a) All allowed costs and revenues associated with an energy balancing account or
384
gas balancing account shall remain in the respective balancing account until charged or
385
refunded to customers.
386
(b) The balance of an energy balancing account or gas balancing account may not be:
387
(i) transferred by the electrical corporation or gas corporation; or
388
(ii) used by the commission to impute earnings or losses to the electrical corporation
389
or gas corporation.
390
(c) An energy balancing account or gas balancing account that is formed and
391
maintained in accordance with this section does not constitute impermissible retroactive
392
ratemaking or single-issue ratemaking.
393
(5) This section does not create a presumption for or against approval of an energy
394
balancing account.
395
Section 5.
Section
54-7-13.6
is enacted to read:
396
54-7-13.6. Low-income assistance program.
397
(1) As used in this section, "eligible customer" means an electrical corporation or a gas
398
corporation customer:
399
(a) that earns no more than:
400
(i) 125% of the federal poverty level; or
401
(ii) another percentage of the federal poverty level as determined by the commission
402
by order; and
403
(b) whose eligibility is certified by the Utah Department of Community and Culture.
404
(2) A customer's income eligibility for the program described in this section shall be
405
renewed annually.
406
(3) An eligible customer may not receive assistance at more than one residential
407
location at any one time.
408
(4) Notwithstanding Section
54-3-8
, the commission may approve a low-income
409
assistance program to provide bill payment assistance to low-income residential customers of:
410
(a) an electrical corporation with more than 50,000 customers; or
411
(b) a gas corporation with more than 50,000 customers.
412
(5) (a) (i) Subject to Subsection (5)(a)(ii), low-income assistance program funding
413
from each rate class may be in an amount determined by the commission.
414
(ii) Low-income assistance program funding described in Subsection (5)(a)(i) may not
415
exceed 0.5% of the rate class's retail revenues.
416
(b) (i) Low-income assistance program funding for bill payment assistance shall be
417
provided through a surcharge on the monthly bill of each Utah retail customer of the electrical
418
corporation or gas corporation providing the program.
419
(ii) The surcharge described in Subsection (5)(b)(i) may not be collected from
420
customers currently participating in the low-income assistance program.
421
(c) (i) Subject to Subsection (c)(ii), the monthly surcharge described in Subsection
422
(5)(b)(i) shall be calculated as an equal percentage of revenues from all rate schedules.
423
(ii) The monthly surcharge described in Subsection (5)(b)(i) may not exceed $50 per
424
month for any customer, adjusted periodically as the commission determines appropriate for
425
inflation.
426
(6) (a) An eligible customer shall receive a billing credit on the monthly electric or gas
427
bill for the customer's residence.
428
(b) The amount of the billing credit described in Subsection (6)(a) shall be determined
429
by the commission based on:
430
(i) the projected funding of the low-income assistance program;
431
(ii) the projected customer participation in the low-income assistance program; and
432
(iii) other factors that the commission determines relevant.
433
(c) The monthly billing credit and the monthly surcharge shall be adjusted
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concurrently with the final order in a general rate increase or decrease case under Section
435
54-7-12
for the electrical corporation or gas corporation providing the program or as
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determined by the commission.
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Section 6.
Section
54-7-14.5
is enacted to read:
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54-7-14.5. Rescission or amendment of orders or decisions.
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(1) The commission may, at any time after providing an affected utility notice and an
440
opportunity to be heard, rescind, alter, or amend any order or decision made by the
441
commission.
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(2) An order rescinding, altering, or amending an original commission order or
443
decision shall have the same effect on the public utility as the original order or decision.
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Section 7. Repealer.
445
This bill repeals:
446
Section 54-7-13, Rescission or amendment of orders or decisions.
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Section 8. Effective date.
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If approved by two-thirds of all the members elected to each house, this bill takes effect
449
upon approval by the governor, or the day following the constitutional time limit of Utah
450
Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
451
the date of veto override.
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Section 9. Revisor instructions.
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It is the intent of the Legislature that, in preparing the Utah Code database for
454
publication, the Office of Legislative Research and General Counsel shall replace the reference
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in Subsections
54-7-12
(1)(b)(ii) and
54-7-13.4
(1)(a)(ii) from "the effective date of this
456
section" with the bill's actual effective date.
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