7 LONG TITLE
8 General Description:
9 This bill enacts provisions relating to natural gas infrastructure.
10 Highlighted Provisions:
11 This bill:
12 ▸ modifies provisions relating to requests for approval of an energy utility's resource
14 ▸ includes a project for rural gas infrastructure development as a resource decision
15 that a gas corporation may request approval of from the Public Service
17 ▸ provides requirements related to a request for approval of rural gas infrastructure
18 development; and
19 ▸ authorizes the Public Service Commission to spread rural gas infrastructure
20 development costs to the larger customer base and to approve the inclusion of rural
21 gas infrastructure development costs within a gas corporation's base rates under
22 certain circumstances.
23 Money Appropriated in this Bill:
25 Other Special Clauses:
27 Utah Code Sections Affected:
29 54-17-401, as last amended by Laws of Utah 2008, Chapter 382
30 54-17-402, as last amended by Laws of Utah 2008, Chapter 382
31 54-17-403, as enacted by Laws of Utah 2005, Chapter 11
33 Be it enacted by the Legislature of the state of Utah:
34 Section 1. Section 54-17-401 is amended to read:
35 54-17-401. Definitions.
36 (1) As used in this part:
38 the state:
42 acquire a significant energy resource, involving:
43 (i) an energy utility's acquisition, management, or operation of energy production,
44 processing, transmission, or distribution facilities or processes including:
45 (A) a facility or process for the efficient, reliable, or safe provision of energy to retail
46 customers; [
47 (B) an energy efficiency and conservation program; or
48 (C) rural gas infrastructure development; or
49 (ii) a decision determined by the commission to be appropriate for review under this
51 (c) "Rural gas infrastructure development" means the planning, development, and
52 construction of an extension or expansion of natural gas main lines to serve previously
53 unserved rural areas of the state.
55 Utah Administrative Rulemaking Act, to specify the nature of resource decisions subject to
56 approval under Section 54-17-402.
57 Section 2. Section 54-17-402 is amended to read:
58 54-17-402. Request for review of resource decision.
59 (1) Beginning on February 25, 2005, before implementing a resource decision, an
60 energy utility may request that the commission approve all or part of a resource decision in
61 accordance with this part.
62 (2) (a) To obtain the approval permitted by Subsection (1), the energy utility shall file a
63 request for approval with the commission.
64 (b) The request for approval required by this section shall include any information
65 required by the commission by rule made in accordance with Title 63G, Chapter 3, Utah
66 Administrative Rulemaking Act.
67 (c) A request for approval of natural gas infrastructure development shall include:
68 (i) a description of the proposed rural gas infrastructure development project;
69 (ii) an explanation of projected benefits from the proposed rural gas infrastructure
70 development project;
71 (iii) the estimated costs of the rural gas infrastructure development project; and
72 (iv) any other information the commission requires.
73 (3) In ruling on a request for approval of a resource decision, the commission shall
74 determine whether the decision:
75 (a) is reached in compliance with this chapter and rules made in accordance with Title
76 63G, Chapter 3, Utah Administrative Rulemaking Act; and
77 (b) is in the public interest, taking into consideration:
78 (i) (A) whether it will most likely result in the acquisition, production, and delivery of
79 utility services at the lowest reasonable cost to the retail customers of an energy utility located
80 in this state;
86 (ii) for a request for approval of rural gas infrastructure development:
87 (A) the potential benefits to previously unserved rural areas;
88 (B) the potential number of new customers;
89 (C) natural gas consumption; and
90 (D) revenues, costs, and other factors determined by the commission to be relevant.
91 (4) In a decision relating to a request for approval of rural gas infrastructure
92 development, the commission may determine that spreading all or a portion of the costs of the
93 rural gas infrastructure development to the larger customer base is in the public interest.
95 commission shall explain in the order issued under this section why the commission does not
96 approve the resource decision in total.
97 (b) Recovery of expenses incurred in connection with parts of a resource decision that
98 are not approved is subject to the review of the commission as part of a rate hearing under
99 Section 54-7-12.
101 under this section before holding a public hearing.
103 decision is warranted and is in the public interest, within 180 days of the day on which the
104 energy utility files a request for approval, the commission shall:
105 (a) approve all or part of the resource decision;
106 (b) approve all or part of the resource decision subject to conditions imposed by the
107 commission; or
108 (c) disapprove all or part of the resource decision.
110 (a) findings as to the approved projected costs of a resource decision; and
111 (b) the basis upon which the findings described in Subsection [
113 Act, the commission shall make rules regarding the process for approval of a resource decision
114 under this section.
115 Section 3. Section 54-17-403 is amended to read:
116 54-17-403. Cost recovery.
117 (1) (a) Except as otherwise provided in this section, if the commission approves any
118 portion of an energy utility's resource decision under Section 54-17-402, the commission shall,
119 in a general rate case or other appropriate commission proceeding, include in the energy
120 utility's retail rates the state's share of costs:
121 (i) relevant to that proceeding;
122 (ii) incurred by the energy utility in implementing the approved resource decision; and
123 (iii) up to the projected costs specified in the commission's order issued under Section
125 (b) Except to the extent that the commission issues an order under Section 54-17-404,
126 any increase from the projected costs specified in the commission's order issued under Section
127 54-17-402 shall be subject to review by the commission as part of a rate hearing under Section
129 (c) If the commission approves a request for approval of rural gas infrastructure
130 development under Section 54-17-402, the commission may approve the inclusion of rural gas
131 infrastructure development costs within the gas corporation's base rates if:
132 (i) the inclusion of those costs will not increase the base distribution non-gas revenue
133 requirement by more than 2% in any Ĥ→ [
134 (ii) the distribution Ĥ→ [
135 infrastructure development costs under Subsection (1)(c)(i) does not exceed 5% in the
136 aggregate; and
137 (iii) the applicable distribution Ĥ→ [
137a annual revenue
138 requirement determined in the gas corporation's most recent rate case.
139 (2) (a) Subsequent to the commission issuing an order described in Subsection (2)(a)(i)
140 or (ii), the commission may disallow some or all costs incurred in connection with an
141 approved resource decision if the commission finds that an energy utility's actions in
142 implementing an approved resource decision are not prudent because of new information or
143 changed circumstances that occur after:
144 (i) the commission approves the resource decision under Section 54-17-402; or
145 (ii) the commission issues an order to proceed under Section 54-17-404.
146 (b) In making a determination of prudence under Subsection (2)(a), the commission
147 shall use the standards identified in Section 54-4-4.
148 (3) Notwithstanding any other provision of this chapter, the commission may disallow
149 some or all of the costs incurred by an energy utility in connection with an approved resource
150 decision upon a finding by the commission that the energy utility is responsible for a material
151 misrepresentation or concealment in connection with an approval process under this chapter.