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S.B. 75 Enrolled
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
19 energy 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:
26 Other Special Clauses:
27 This bill provides an immediate effective date.
28 This bill provides revisor instructions.
29 Utah Code Sections Affected:
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
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
39 54-7-13, as last amended by Laws of Utah 1987, Chapter 161
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[
48 (b) in the public interest; and
49 (c) just and reasonable.
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;
59 (iii) fixed rate components; and
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
85 substantially complies with minimum filing requirements established by the commission, by
86 rule, for a general rate increase or decrease.
87 (ii) The commission shall within 180 days after the effective date of this section create
88 and finalize rules concerning the minimum requirements to be met for an application to be
89 considered a complete filing.
91 (i) any direct decrease [
92 a public utility's base rates; or
93 (ii) any modification of a classification, contract, practice, or rule that decreases a
100 a [
102 (2) (a) [
106 (b) (i) For purposes of this Subsection (2), a public utility's application for a general
107 rate increase or decrease shall be considered a complete filing unless within 30 days after the
108 day on which the commission receives the public utility's application, the commission issues
109 an order describing information that the public utility must provide for the application to be
110 considered a complete filing.
111 (ii) Subject to Subsection (2)(b)(iii) and within 14 days after the day on which the
112 application is received by the commission, a party or a person may file a motion to challenge
113 whether an application for a general rate increase or decrease is a complete filing.
114 (iii) A party or a person may not file a motion described in Subsection (2)(b)(ii) unless
115 the person or party has first filed a motion to intervene with the commission.
116 (c) If, in accordance with Subsection (2)(b)(i), the commission issues an order that an
117 application is not a complete filing, the commission shall:
118 (i) determine the materiality of an application deficiency; and
119 (ii) (A) if the deficiencies are not material, issue an order that the 240-day period
120 described in Subsection (3)(a) shall continue without delay or be suspended and resume when
121 the public utility files the required information; or
122 (B) if the deficiencies are material, issue an order that the 240-day period described in
123 Subsection (3)(a) shall start over when the public utility files the required information.
125 whether the proposed rate increase or decrease, or some other rate increase or decrease, is just
126 and reasonable.
127 (ii) If a rate decrease is proposed by a public utility, the commission may waive a
128 hearing unless it seeks to suspend, alter, or modify the rate decrease.
130 (4), a proposed rate increase or decrease is not effective until after completion of the hearing
131 and issuance of a final order by the commission concerning the proposed increase or decrease.
132 (3) (a) Within 240 days after a public utility submits a complete filing, the
133 commission shall issue a final order to:
134 (i) grant the proposed general rate increase or decrease;
135 (ii) grant a different general rate increase or decrease; or
136 (iii) deny the proposed general rate increase or decrease.
137 (b) If the commission does not issue a final written order within 240 days after the
138 public utility submits a complete filing in accordance with Subsection (3)(a):
139 (i) the public utility's proposed rate increase or decrease is final; and
140 (ii) the commission may not order a refund of any amount already collected or
141 returned by the public utility under Subsection (4)(a).
151 (4) (a) (i) A request for interim rates shall be made within 90 days after the day on
152 which a public utility files a complete filing for a general rate increase or a general rate
154 (ii) The commission, on its own initiative or in response to an application by a public
155 utility or other party, may, after a hearing, allow any rate increase or decrease proposed by a
156 public utility, or a reasonable part of the rate increase or decrease, to take effect on an interim
157 basis within 45 days after the day on which the request is filed, subject to the commission's
158 right to order a refund or surcharge.
159 (iii) The evidence presented in the hearing held pursuant to this Subsection (4) need
160 not encompass all issues that may be considered in a rate case hearing held pursuant to
161 Subsection (2)[
162 rate increase or decrease is justified.
163 (b) [
167 establishing the utility's revenue requirement and fixing the utility's [
168 before the commission determines the final allocation of the increase or decrease among
169 categories of customers and classes of service.
171 revenue requirement finds that the interim increase [
172 (4)(a)(ii) exceeds the increase finally ordered, the commission shall order the public utility to
173 refund the excess to customers.
174 (ii) If the commission in the commission's final order on a public utility's revenue
175 requirement finds that the interim decrease [
176 exceeds the decrease finally ordered, the commission shall order a surcharge to customers to
177 recover the excess decrease.
191 classification, practice, or rule filed by a public utility with the commission that does not result
192 in any rate increase shall take effect 30 days after the date of filing or within any lesser time
193 the commission may grant, subject to its authority after a hearing to suspend, alter, or modify
194 that schedule, classification, practice, or rule.
195 (b) When the commission suspends a schedule, classification, practice, or rule, the
196 commission shall hold a hearing on the schedule, classification, practice, or rule before issuing
197 its final order.
198 (c) For purposes of this Subsection [
199 rule that introduces a service or product not previously offered may not result in a rate
202 files with the commission any schedule, classification, practice, or rule that does not result in
203 an increase in any rate, fare, toll, rental, or charge, the schedule, classification, practice, or rule
204 shall take effect 30 days after the date of filing or at any earlier time the commission may
205 grant, subject to the authority of the commission, after a hearing, to suspend, alter, or modify
206 the schedule, classification, practice, or rule.
217 cooperative that meets all of the requirements of this Subsection [
218 (a) (i) The cooperative is organized for the purpose of either distributing electricity or
219 providing telecommunication services to its members and the public at cost.
220 (ii) "At cost" includes interest costs and a reasonable rate of return as determined by
221 the cooperative's board of directors.
222 (b) The cooperative's board of directors and any appropriate agency of the federal
223 government have approved the rate increase or other rate change and all necessary tariff
224 revisions reflecting the increased rate or rate change.
225 (c) Before implementing any rate increases, the cooperative has held a public meeting
226 for all its customers and members. The cooperative shall mail a notice of the meeting to all of
227 the cooperative's customers and members not less than ten days prior to the date that the
228 meeting is held.
229 (d) The cooperative has filed its tariff revisions reflecting the rate increase or other rate
230 change with the commission, who shall make the tariffs available for public inspection.
232 implementing a proposed rate increase by a telephone corporation having less than 30,000
233 subscriber access lines in the state are provided in this Subsection [
234 (a) (i) The proposed rate increase by a telephone corporation subject to this Subsection
236 the proposed tariff revisions and necessary information to support a determination by the
237 commission that the proposed rate increase is just and reasonable.
238 (ii) The telephone corporation shall notify the commission and all potentially affected
239 access line subscribers of the proposed rate increase 30 days before filing the proposed rate
240 increase or change.
241 (b) (i) The commission may investigate whether the proposed rate increase is just and
243 (ii) If the commission determines, after notice and hearing, that the rate increase is
244 unjust or unreasonable in whole or in part, the commission may establish the rates, charges, or
245 classifications that the commission finds to be just and reasonable.
246 (c) The commission shall investigate and hold a hearing to determine whether any
247 proposed rate increase is just and reasonable if 10% or more of the telephone corporation's
248 potentially affected access line subscribers file a request for agency action requesting an
249 investigation and hearing.
250 Section 3. Section 54-7-13.4 is enacted to read:
251 54-7-13.4. Alternative cost recovery for major plant addition -- Procedure.
252 (1) As used in this section:
253 (a) (i) "Complete filing" means an application filed by a gas corporation or electrical
254 corporation that substantially complies with minimum filing requirements established by the
255 commission, by rule, for cost recovery of a major plant addition.
256 (ii) The commission shall within 180 days after the effective date of this section create
257 and finalize rules concerning the minimum requirements to be met for an application to be
258 considered a complete filing.
259 (b) "In-service date" means the first day that a gas corporation or an electrical
260 corporation is no longer allowed to accrue an allowance for funds used during construction for
261 a major plant addition.
262 (c) "Major plant addition" means any single capital investment project of a gas
263 corporation or an electrical corporation that in total exceeds 1% of the gas corporation's or
264 electrical corporation's rate base, based on the gas corporation's or electrical corporation's most
265 recent general rate case determination, that is:
266 (i) used to serve Utah customers; and
267 (ii) assigned or allocated to Utah.
268 (2) A gas corporation or an electrical corporation may file with the commission a
269 complete filing for cost recovery of a major plant addition if the commission has, in
270 accordance with Section 54-7-12 , entered a final order in a general rate case proceeding of the
271 gas corporation or electrical corporation within 18 months of the projected in-service date of a
272 major plant addition.
273 (3) (a) A gas corporation or an electrical corporation may not file for cost recovery of a
274 major plant addition more than 150 days before the projected in-service date of the major plant
276 (b) If the commission determines that the gas corporation or electrical corporation has
277 not submitted a complete filing for cost recovery of a major plant addition, the commission
278 shall determine:
279 (i) what information the electrical corporation or gas corporation needs to provide to
280 the commission; and
281 (ii) the materiality of an application deficiency.
282 (c) With respect to the applicable 90 or 150-day time period under Subsection (4) for
283 the commission to enter an order as described in Subsection (4)(a)(iii), the commission may:
284 (i) if the deficiencies are not material:
285 (A) continue without delay; or
286 (B) suspend the applicable 90 or 150-day time period and resume when the electrical
287 corporation or gas corporation has filed the required information; or
288 (ii) if the deficiencies are material, start the applicable 90 or 150-day time period over
289 when the electrical corporation or gas corporation has filed the required information.
290 (4) (a) The commission shall:
291 (i) review the application for cost recovery of a major plant addition;
292 (ii) after a hearing, approve, approve with conditions, or deny cost recovery of the
293 major plant addition; and
294 (iii) enter an order on cost recovery of a major plant addition within:
295 (A) 90 days after the day on which a complete filing is made with respect to a
296 significant energy resource approved by the commission under Section 54-17-302 or resource
297 decision under Section 54-17-402 ; or
298 (B) 150 days after the day on which a complete filing is made for any other major
299 plant addition.
300 (b) (i) If the commission approves cost recovery of a major plant addition, the
301 commission shall determine the state's share of projected net revenue requirement impacts of
302 the major plant addition, including prudently-incurred capital costs and other reasonably
303 projected costs, savings, and benefits.
304 (ii) The gas corporation or electrical corporation shall have the burden to prove a
305 major plant addition's impacts as described in Subsection (4)(b)(i).
306 (c) If the commission has previously issued an order and approved the major plant
307 addition as a significant energy resource under Section 54-17-302 or resource decision under
308 Section 54-17-402 , the commission shall presume the prudence of the utility's capital costs up
309 to the projected costs specified in the commission's previous significant energy resource order
310 or resource decision order.
311 (5) If the commission approves or approves with conditions cost recovery of a major
312 plant addition, the commission shall do one or all of the following:
313 (a) subject to Subsection (6)(c), authorize the gas corporation or electrical corporation
314 to defer the state's share of the net revenue requirement impacts of the major plant addition for
315 recovery in general rate cases; or
316 (b) adjust rates or otherwise establish a collection method for the state's share of the
317 net revenue requirement impacts that will apply to the appropriate billing components.
318 (6) (a) Deferral or collection of the state's share of the net revenue requirement impacts
319 of a major plant addition under this section shall commence upon the later of:
320 (i) the day on which a commission order is issued approving the deferral or collection
321 amount; or
322 (ii) the in-service date of the major plant addition.
323 (b) The deferral described in this section shall terminate upon a final commission
324 order that provides for recovery in rates of all or any part of the net revenue requirement
325 impacts of the major plant addition.
326 (c) If the commission authorizes deferral under Subsection (5)(a), the amount deferred
327 shall accrue a carrying charge on the net revenue requirement impacts as determined by the
329 Section 4. Section 54-7-13.5 is enacted to read:
330 54-7-13.5. Energy balancing accounts.
331 (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
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;
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
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
434 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
436 determined by the commission.
437 Section 6. Section 54-7-14.5 is enacted to read:
438 54-7-14.5. Rescission or amendment of orders or decisions.
439 (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
442 (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.
444 Section 7. Repealer.
445 This bill repeals:
446 Section 54-7-13, Rescission or amendment of orders or decisions.
447 Section 8. Effective date.
448 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.
452 Section 9. Revisor instructions.
453 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
455 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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