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S.B. 75
This document includes House Floor Amendments incorporated into the bill on Wed, Mar 11, 2009 at 11:27 AM by jeyring. --> 1
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7 LONG TITLE
8 General Description:
9 This bill amends the rate-setting process for a public utility.
10 Highlighted Provisions:
11 This bill:
12 . defines terms;
13 . amends the rate-setting process for a public utility, including:
14 . authorizes a public utility's complete filing with the Public Service Commission
15 (PSC) to initiate a 240-day time period for rate case decisions;
16 . authorizes the PSC to approve or deny an electrical corporation's or a gas
17 corporation's application for cost recovery of a major plant addition;
18 . allows the PSC to authorize an electrical corporation or a gas corporation energy
19 balancing account;
20 . authorizes the PSC to approve a bill payment assistance program for
21 low-income residential customers of an electrical corporation or a gas
22 corporation; and
23 . makes technical corrections.
24 Monies Appropriated in this Bill:
25 None
26 Other Special Clauses:
27 This bill provides an immediate effective date.
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29 Utah Code Sections Affected:
30 AMENDS:
31 54-4-4.1, as enacted by Laws of Utah 1990, Chapter 29
32 54-7-12, as last amended by Laws of Utah 2002, Chapter 319
33 ENACTS:
34 54-7-13.4, Utah Code Annotated 1953
35 54-7-13.5, Utah Code Annotated 1953
36 54-7-13.6, Utah Code Annotated 1953
37 54-7-14.5, Utah Code Annotated 1953
38 REPEALS:
39 54-7-13, as last amended by Laws of Utah 1987, Chapter 161
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41 Be it enacted by the Legislature of the state of Utah:
42 Section 1. Section 54-4-4.1 is amended to read:
43 54-4-4.1. Rules to govern rates.
44 (1) The commission may, by rule or order, adopt any method of rate regulation that is:
45 (a) consistent with this title[
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48 (b) in the public interest; and
49 (c) just and reasonable.
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55 (2) In accordance with Subsection (1), a method of rate regulation may include:
56 (a) rate designs utilizing:
57 (i) volumetric rate components;
58 (ii) demand rate components;
House Floor Amendments 3-11-2009 je/vs
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(iii) fixed rate components; and59
60 (iv) variable rate components;
61 (b) rate stabilization methods;
62 (c) decoupling methods;
63 (d) incentive-based mechanisms; and
64 (e) other components, methods, or mechanisms approved by the commission.
65 Section 2. Section 54-7-12 is amended to read:
66 54-7-12. Rate increase or decrease -- Procedure -- Effective dates -- Electrical or
67 telephone cooperative.
68 (1) As used in this section:
69 (a) (i) "Base rates" means those charges included in a public utility's generally
70 applicable rate tariffs, including:
71 (A) a fare;
72 (B) a rate;
73 (C) a rental;
74 (D) a toll; or
75 (E) any other charge generally applicable to a public utility's rate tariffs.
76 (ii) Unless included by a commission order, "base rates" does not include charges
77 included in:
78 (A) a deferred account;
79 (B) a balancing account;
80 (C) a major plant addition surcharge;
81 (D) a major plant addition surcredit;
82 (E) a special contract; or
83 (F) a public utility program offering.
84 (b) (i) "Complete filing" means an application filed by a public utility that substantially
85 complies with minimum filing requirements established by the commission, by rule, for a
86 general rate increase or decrease.
87 (ii) The commission shall H. within .H 180 days after the effective date of this
87a section create and
88 finalize rules concerning the minimum requirements to be met for an application to be
89 considered a complete filing.
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91 (i) any direct decrease [
92 public utility's base rates; or
93 (ii) any modification of a classification, contract, practice, or rule that decreases a [
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103 that files for a general rate increase or general rate decrease shall file [
104 complete filing with the commission setting forth the proposed rate increase or decrease.
105 (b) (i) For purposes of this Subsection (2), a public utility's application for a general
106 rate increase or decrease shall be considered a complete filing unless within 30 days after the
107 day on which the commission receives the public utility's application, the commission issues an
108 order describing information that the public utility must provide for the application to be
109 considered a complete filing.
110 (ii) Subject to Subsection (2)(b)(iii) and within 14 days after the day on which the
111 application is received by the commission, a party or a person may file a motion to challenge
112 whether an application for a general rate increase or decrease is a complete filing.
113 (iii) A party or a person may not file a motion described in Subsection (2)(b)(ii) unless
114 the person or party has first filed a motion to intervene with the commission.
115 (c) If, in accordance with Subsection (2)(b)(i), the commission issues an order that an
116 application is not a complete filing, the commission shall:
117 (i) determine the materiality of an application deficiency; and
118 (ii) (A) if the deficiencies are not material, issue an order that the 240-day period
119 described in Subsection (3)(a) shall continue without delay or be suspended and resume when
120 the public utility files the required information; or
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122 Subsection (3)(a) shall start over when the public utility files the required information.
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124 whether the proposed rate increase or decrease, or some other rate increase or decrease, is just
125 and reasonable.
126 (ii) If a rate decrease is proposed by a public utility, the commission may waive a
127 hearing unless it seeks to suspend, alter, or modify the rate decrease.
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129 (4), a proposed rate increase or decrease is not effective until after completion of the hearing
130 and issuance of a final order by the commission concerning the proposed increase or decrease.
131 (3) (a) Within 240 days after a public utility submits a complete filing, the commission
132 shall issue a final order to:
133 (i) grant the proposed general rate increase or decrease;
134 (ii) grant a different general rate increase or decrease; or
135 (iii) deny the proposed general rate increase or decrease.
136 (b) If the commission does not issue a final written order within 240 days after the
137 public utility submits a complete filing in accordance with Subsection (3)(a):
138 (i) the public utility's proposed rate increase or decrease is final; and
139 (ii) the commission may not order a refund of any amount already collected or returned
140 by the public utility under Subsection (4)(a).
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150 (4) (a) (i) A request for interim rates shall be made within 90 days after the day on
151 which a public utility files a complete filing for a general rate increase or a general rate
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153 (ii) The commission, on its own initiative or in response to an application by a public
154 utility or other party, may, after a hearing, allow any rate increase or decrease proposed by a
155 public utility, or a reasonable part of the rate increase or decrease, to take effect on an interim
156 basis within 45 days after the day on which the request is filed, subject to the commission's
157 right to order a refund or surcharge.
158 (iii) The evidence presented in the hearing held pursuant to this Subsection (4) need
159 not encompass all issues that may be considered in a rate case hearing held pursuant to
160 Subsection (2)[
161 increase or decrease is justified.
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166 establishing the utility's revenue requirement and fixing the utility's [
167 before the commission determines the final allocation of the increase or decrease among
168 categories of customers and classes of service.
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170 revenue requirement finds that the interim increase [
171 (4)(a)(ii) exceeds the increase finally ordered, the commission shall order the public utility to
172 refund the excess to customers.
173 (ii) If the commission in the commission's final order on a public utility's revenue
174 requirement finds that the interim decrease [
175 exceeds the decrease finally ordered, the commission shall order a surcharge to customers to
176 recover the excess decrease.
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190 classification, practice, or rule filed by a public utility with the commission that does not result
191 in any rate increase shall take effect 30 days after the date of filing or within any lesser time the
192 commission may grant, subject to its authority after a hearing to suspend, alter, or modify that
193 schedule, classification, practice, or rule.
194 (b) When the commission suspends a schedule, classification, practice, or rule, the
195 commission shall hold a hearing on the schedule, classification, practice, or rule before issuing
196 its final order.
197 (c) For purposes of this Subsection [
198 rule that introduces a service or product not previously offered may not result in a rate increase.
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200 files with the commission any schedule, classification, practice, or rule that does not result in
201 an increase in any rate, fare, toll, rental, or charge, the schedule, classification, practice, or rule
202 shall take effect 30 days after the date of filing or at any earlier time the commission may grant,
203 subject to the authority of the commission, after a hearing, to suspend, alter, or modify the
204 schedule, classification, practice, or rule.
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215 cooperative that meets all of the requirements of this Subsection [
216 (a) (i) The cooperative is organized for the purpose of either distributing electricity or
217 providing telecommunication services to its members and the public at cost.
218 (ii) "At cost" includes interest costs and a reasonable rate of return as determined by
219 the cooperative's board of directors.
220 (b) The cooperative's board of directors and any appropriate agency of the federal
221 government have approved the rate increase or other rate change and all necessary tariff
222 revisions reflecting the increased rate or rate change.
223 (c) Before implementing any rate increases, the cooperative has held a public meeting
224 for all its customers and members. The cooperative shall mail a notice of the meeting to all of
225 the cooperative's customers and members not less than ten days prior to the date that the
226 meeting is held.
227 (d) The cooperative has filed its tariff revisions reflecting the rate increase or other rate
228 change with the commission, who shall make the tariffs available for public inspection.
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230 implementing a proposed rate increase by a telephone corporation having less than 30,000
231 subscriber access lines in the state are provided in this Subsection [
232 (a) (i) The proposed rate increase by a telephone corporation subject to this Subsection
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234 the proposed tariff revisions and necessary information to support a determination by the
235 commission that the proposed rate increase is just and reasonable.
236 (ii) The telephone corporation shall notify the commission and all potentially affected
237 access line subscribers of the proposed rate increase 30 days before filing the proposed rate
238 increase or change.
239 (b) (i) The commission may investigate whether the proposed rate increase is just and
240 reasonable.
241 (ii) If the commission determines, after notice and hearing, that the rate increase is
242 unjust or unreasonable in whole or in part, the commission may establish the rates, charges, or
243 classifications that the commission finds to be just and reasonable.
244 (c) The commission shall investigate and hold a hearing to determine whether any
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246 potentially affected access line subscribers file a request for agency action requesting an
247 investigation and hearing.
248 Section 3. Section 54-7-13.4 is enacted to read:
249 54-7-13.4. Alternative cost recovery for major plant addition -- Procedure.
250 (1) As used in this section:
251 (a) (i) "Complete filing" means an application filed by a gas corporation or electrical
252 corporation that substantially complies with minimum filing requirements established by the
253 commission, by rule, for cost recovery of a major plant addition.
254 (ii) The commission shall within 180 days after the effective date of this section create
255 and finalize rules concerning the minimum requirements to be met for an application to be
256 considered a complete filing.
257 (b) "In-service date" means the first day that a gas corporation or an electrical
258 corporation is no longer allowed to accrue an allowance for funds used during construction for
259 a major plant addition.
260 (c) "Major plant addition" means any single capital investment project of a gas
261 corporation or an electrical corporation that in total exceeds 1% of the gas corporation's or
262 electrical corporation's rate base, based on the gas corporation's or electrical corporation's most
263 recent general rate case determination, that is:
264 (i) used to serve Utah customers; and
265 (ii) assigned or allocated to Utah.
266 (2) A gas corporation or an electrical corporation may file with the commission a
267 complete filing for cost recovery of a major plant addition if the commission has, in accordance
268 with Section 54-7-12 , entered a final order in a general rate case proceeding of the gas
269 corporation or electrical corporation within 18 months of the projected in-service date of a
270 major plant addition.
271 (3) (a) A gas corporation or an electrical corporation may not file for cost recovery of a
272 major plant addition more than 150 days before the projected in-service date of the major plant
273 addition.
274 (b) If the commission determines that the gas corporation or electrical corporation has
275 not submitted a complete filing for cost recovery of a major plant addition, the commission
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277 (i) what information the electrical corporation or gas corporation needs to provide to
278 the commission; and
279 (ii) the materiality of an application deficiency.
280 (c) With respect to the applicable 90 or 150-day time period under Subsection (4) for
281 the commission to enter an order as described in Subsection (4)(a)(iii), the commission may:
282 (i) if the deficiencies are not material:
283 (A) continue without delay; or
284 (B) suspend the applicable 90 or 150-day time period and resume when the electrical
285 corporation or gas corporation has filed the required information; or
286 (ii) if the deficiencies are material, start the applicable 90 or 150-day time period over
287 when the electrical corporation or gas corporation has filed the required information.
288 (4) (a) The commission shall:
289 (i) review the application for cost recovery of a major plant addition;
290 (ii) after a hearing, approve, approve with conditions, or deny cost recovery of the
291 major plant addition; and
292 (iii) enter an order on cost recovery of a major plant addition within:
293 (A) 90 days after the day on which a complete filing is made with respect to a
294 significant energy resource approved by the commission under Section 54-17-302 or resource
295 decision under Section 54-17-402 ; or
296 (B) 150 days after the day on which a complete filing is made for any other major plant
297 addition.
298 (b) (i) If the commission approves cost recovery of a major plant addition, the
299 commission shall determine the state's share of projected net revenue requirement impacts of
300 the major plant addition, including prudently-incurred capital costs and other reasonably
301 projected costs, savings, and benefits.
302 (ii) The gas corporation or electrical corporation shall have the burden to prove a major
303 plant addition's impacts as described in Subsection (4)(b)(i).
304 (c) If the commission has previously issued an order and approved the major plant
305 addition as a significant energy resource under Section 54-17-302 or resource decision under
306 Section 54-17-402 , the commission shall presume the prudence of the utility's capital costs up
House Floor Amendments 3-11-2009 je/vs
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to the projected costs specified in the commission's previous significant energy resource order307
307a H. or resource decision order .H .
308 (5) If the commission approves or approves with conditions cost recovery of a major
309 plant addition, the commission shall do one or all of the following:
310 (a) subject to Subsection (6)(c), authorize the gas corporation or electrical corporation
311 to defer the state's share of the net revenue requirement impacts of the major plant addition for
312 recovery in general rate cases; or
313 (b) adjust rates or otherwise establish a collection method for the state's share of the net
314 revenue requirement impacts that will apply to the appropriate billing components.
315 (6) (a) Deferral or collection of the state's share of the net revenue requirement impacts
316 of a major plant addition under this section shall commence upon the later of:
317 (i) the day on which a commission order is issued approving the deferral or collection
318 amount; or
319 (ii) the in-service date of the major plant addition.
320 (b) The deferral described in this section shall terminate upon a final commission order
321 that provides for recovery in rates of all or any part of the net revenue requirement impacts of
322 the major plant addition.
323 (c) If the commission authorizes deferral under Subsection (5)(a), the amount deferred
324 shall accrue a carrying charge on the net revenue requirement impacts as determined by the
325 commission.
326 Section 4. Section 54-7-13.5 is enacted to read:
327 54-7-13.5. Energy balancing accounts.
328 (1) As used in this section:
329 (a) "Base rates" is as defined in Subsection 54-7-12 (1).
330 (b) "Energy balancing account" means an electrical corporation account for some or all
331 components of the electrical corporation's incurred actual power costs, including:
332 (i) (A) fuel;
333 (B) purchased power; and
334 (C) wheeling expenses; and
335 (ii) the sum of the power costs described in Subsection (1)(b)(i) less wholesale
336 revenues.
337 (c) "Gas balancing account" means a gas corporation account to recover on a
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339 (2) (a) The commission may authorize an electrical corporation to establish an energy
340 balancing account.
341 (b) An energy balancing account shall become effective upon a commission finding
342 that the energy balancing account is:
343 (i) in the public interest;
344 (ii) for prudently-incurred costs; and
345 (iii) implemented at the conclusion of a general rate case.
346 (c) An electrical corporation:
347 (i) may, with approval from the commission, recover costs under this section through:
348 (A) base rates;
349 (B) contract rates;
350 (C) surcredits; or
351 (D) surcharges; and
352 (ii) shall file a reconciliation of the energy balancing account with the commission at
353 least annually with actual costs and revenues incurred by the electrical corporation.
354 (d) An energy balancing account may not alter:
355 (i) the standard for cost recovery; or
356 (ii) the electrical corporation's burden of proof.
357 (e) The collection method described in Subsection (2)(c)(i) shall:
358 (i) apply to the appropriate billing components in base rates; and
359 (ii) be incorporated into base rates in an appropriate commission proceeding.
360 (f) The collection of costs related to an energy balancing account from customers
361 paying contract rates shall be governed by the terms of the contract.
362 (g) Revenues collected in excess of prudently incurred actual costs shall:
363 (i) be refunded as a bill surcredit to an electrical corporation's customers over a period
364 specified by the commission; and
365 (ii) include a carrying charge.
366 (h) Prudently incurred actual costs in excess of revenues collected shall:
367 (i) be recovered as a bill surcharge over a period to be specified by the commission;
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370 (i) The carrying charge applied to the balance in an energy balancing account shall be:
371 (i) determined by the commission; and
372 (ii) symmetrical for over or under collections.
373 (3) (a) The commission may:
374 (i) establish a gas balancing account for a gas corporation; and
375 (ii) set forth procedures for a gas corporation's gas balancing account in the gas
376 corporation's commission-approved tariff.
377 (b) A gas balancing account may not alter:
378 (i) the standard of cost recovery; or
379 (ii) the gas corporation's burden of proof.
380 (4) (a) All allowed costs and revenues associated with an energy balancing account or
381 gas balancing account shall remain in the respective balancing account until charged or
382 refunded to customers.
383 (b) The balance of an energy balancing account or gas balancing account may not be:
384 (i) transferred by the electrical corporation or gas corporation; or
385 (ii) used by the commission to impute earnings or losses to the electrical corporation or
386 gas corporation.
387 (c) An energy balancing account or gas balancing account that is formed and
388 maintained in accordance with this section does not constitute impermissible retroactive
389 ratemaking or single-issue ratemaking.
390 (5) This section does not create a presumption for or against approval of an energy
391 balancing account.
392 Section 5. Section 54-7-13.6 is enacted to read:
393 54-7-13.6. Low-income assistance program.
394 (1) As used in this section, "eligible customer" means an electrical corporation or a gas
395 corporation customer:
396 (a) that earns no more than:
397 (i) 125% of the federal poverty level; or
398 (ii) another percentage of the federal poverty level as determined by the commission by
399 order; and
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401 (2) A customer's income eligibility for the program described in this section shall be
402 renewed annually.
403 (3) An eligible customer may not receive assistance at more than one residential
404 location at any one time.
405 (4) Notwithstanding Section 54-3-8 , the commission may approve a low-income
406 assistance program to provide bill payment assistance to low-income residential customers of:
407 (a) an electrical corporation with more than 50,000 customers; or
408 (b) a gas corporation with more than 50,000 customers.
409 (5) (a) (i) Subject to Subsection (5)(a)(ii), low-income assistance program funding
410 from each rate class may be in an amount determined by the commission.
411 (ii) Low-income assistance program funding described in Subsection (5)(a)(i) may not
412 exceed 0.5% of the rate class's retail revenues.
413 (b) (i) Low-income assistance program funding for bill payment assistance shall be
414 provided through a surcharge on the monthly bill of each Utah retail customer of the electrical
415 corporation or gas corporation providing the program.
416 (ii) The surcharge described in Subsection (5)(b)(i) may not be collected from
417 customers currently participating in the low-income assistance program.
418 (c) (i) Subject to Subsection (c)(ii), the monthly surcharge described in Subsection
419 (5)(b)(i) shall be calculated as an equal percentage of revenues from all rate schedules.
420 (ii) The monthly surcharge described in Subsection (5)(b)(i) may not exceed $50 per
421 month for any customer, adjusted periodically as the commission determines appropriate for
422 inflation.
423 (6) (a) An eligible customer shall receive a billing credit on the monthly electric or gas
424 bill for the customer's residence.
425 (b) The amount of the billing credit described in Subsection (6)(a) shall be determined
426 by the commission based on:
427 (i) the projected funding of the low-income assistance program;
428 (ii) the projected customer participation in the low-income assistance program; and
429 (iii) other factors that the commission determines relevant.
430 (c) The monthly billing credit and the monthly surcharge shall be adjusted concurrently
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432 electrical corporation or gas corporation providing the program or as determined by the
433 commission.
434 Section 6. Section 54-7-14.5 is enacted to read:
435 54-7-14.5. Rescission or amendment of orders or decisions.
436 (1) The commission may, at any time after providing an affected utility notice and an
437 opportunity to be heard, rescind, alter, or amend any order or decision made by the
438 commission.
439 (2) An order rescinding, altering, or amending an original commission order or
440 decision shall have the same effect on the public utility as the original order or decision.
441 Section 7. Repealer.
442 This bill repeals:
443 Section 54-7-13, Rescission or amendment of orders or decisions.
444 Section 8. Effective date.
445 If approved by two-thirds of all the members elected to each house, this bill takes effect
446 upon approval by the governor, or the day following the constitutional time limit of Utah
447 Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
448 the date of veto override.
449 Section 9. Revisor instructions.
450 It is the intent of the Legislature that, in preparing the Utah Code database for
451 publication, the Office of Legislative Research and General Counsel shall replace the reference
452 in Subsections 54-7-12 (1)(b)(ii) and 54-7-13.4 (1)(a)(ii) from "the effective date of this section"
453 with the bill's actual effective date.
Legislative Review Note
as of 2-13-09 11:15 AM