HB 1493 Modifies sections relating to water and electric utilities
Current Bill Summary
- Prepared by Senate Research -

SCS/HB 1493 - This legislation pertains to water and electric utilities.

The change made to this substitute involved incorporating language from an amendment providing the board of directors of any water district the power to sell part or all of the district to any city owning and operating a water system.

Other changes to this substitute include changing the title of the act and incorporating language from the latest predetermination language detailing a pilot project for electric utilities that are looking to invest in the construction of a new generation power plant or contract for the purchase of power associated with such a plant.

This act maintains the twenty-five signature requirement for a rate complaint, however added language clarifies that those signatures shall come from twenty-five residential consumers or five large industrial customers as the term is defined within this section.

This act directs the commission to decide any overearnings complaints heard within eleven months.

This act establishes a refund policy upon a finding that the corporation has overearned. In cases where the commission has determined that a company has overearned, refunds with interest from the date of the filing of an earnings complaint are due.

This act provides for a pilot program, allowing any electrical corporations proposing to invest more than ten percent of its net utility plant in any new generation plant may file with the PSC an application requesting a predetermination of prudence on the decision to construct, lease or invest in a new generation power plant, or to enter into contracts for the purchase of power associated with a new generation power plant. The decision whether or not to consider those applications remains with the commission. The company may also request, as part of the same application, that the PSC determine ratemaking principles that will be applied to the cost of such infrastructure or contract in future proceedings before the commission. The application may include, at the option of the corporation, a request for a certificate of convenience and necessity under Section 393.170 RSMo.

At the time the application is filed, the corporation shall file all evidence supporting its proposed course of action as well as proposed confidentiality agreements and identify all material for a which a need for confidentiality is asserted. If any proposed generation facility is not to be located within the state, the corporation shall also submit evidence that the location of the facility or the contract is in the best interest of Missouri ratepayers.

Under this act, the PSC shall establish guidelines for the submission of the application. The commission shall conduct a hearing and issue an order within one hundred and eighty days after the filing of an application. Under this act, the commission may approve the application as proposed by the corporation, on the basis of conditions required to be accepted by the corporation, or may reject the application. If, after a hearing and consequent order, the PSC determines that the proposed investment is reasonable and prudent, the commission may impose monitoring and reporting conditions on the company responsible. Costs shall be included in the company's rates only in accordance with existing law, except as provided in subsection 6 of the act. Nothing in this act alters the PSC's authority to set the rates or to review the prudence of construction management for the company in question.

The order by the PSC approving, modifying, or rejecting the determination of prudence and addressing ratemaking principles will be applied in any future rate case to the investment and costs of the facility or contract and shall be binding for ratemaking purposes in all future proceedings. Ratemaking principles may include but shall not be limited to, estimated service life, depreciation rate for cost of service purposes, and authorized return on equity.

If the commission fails to issue an order within one hundred and eighty days, any certificate for convenience and necessity and any ratemaking principles requested by the corporation in the application shall be deemed approved by the commission and shall be binding for ratemaking purposes in all future proceedings.

Under this act, the corporation shall have two hundred seventy days after the effective date of a prudency order to notify the commission whether it will proceed with the proposed project identified in the application. If the corporation notifies the commission that it will not proceed with the proposed project, any ratemaking principles included in the order will be of no further force and effect and there shall be no adverse presumption applied to the corporation in any future proceeding before the commission.

The corporation shall report to the PSC at the times specified in the order or upon the occurrence of any unusual event which may individually, collectively, materially and adversely affect the project for which a certificate has been issued. At the time of such a report, the corporation or the commission may consider a modification or termination of the project.

In the event that the commission, after hearing, determines the continuation of the project is no longer prudent or should be modified, the corporation shall be allowed to recover in rates, the amounts already expensed, incurred, or obligated on such project. These costs will be amortized to expenses over a period of years and in a manner to be determined by the commission at the time the application is initially approved or when the order to modify or terminate the project is issued.

No company shall file more than one application covering more than one project in a twelve month period, excluding circumstances when an application has been denied, dismissed, or approved but not entered into, a company can file a new application for the same or an alternative project at any time. Such limitations can be waived by the PSC if the waiver is found to be in the public interest.

Nothing in this act shall excuse a corporation from complying with its public service obligation to provide safe and adequate service at just and reasonable rates.

Current law requires that territorial agreements specify the boundaries of the water service area of each water supplier and the electric service area of each electric service supplier. In cases where the parties cannot agree, they may petition the Missouri Public Service Commission to designate the boundaries of the service areas to be served by each party. This substitute clarifies that the commission can only be petitioned when the parties cannot agree upon the boundaries of the service areas that are not specified in the agreement.

Current law states that the commission must hold an evidentiary hearing when receiving any petition, when determining whether or not a territorial agreement should become effective, and when complaints involving any commission-approved territorial agreement are presented. The substitute states that these hearings can be waived if the matter is resolved by a stipulation and an agreement that is submitted to the commission. All parties must agree to waive the hearing.

Provisions in this act are similar to provisions in SB 1132.
MEGAN CRAIN

SA 1 - THE AMENDMENT CHANGES THE NAME OF THE PSC HEARING OFFICERS TO "ADMINISTRATIVE LAW JUDGES".

SA 2 - THE AMENDMENT LAYS OUT THE "MANUFACTURED HOME INSTALLATION ACT".

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