SB 848 Modifies provisions relating to rate schedules authorized for certain utilities outside of general rate proceedings
Sponsor: Emery
LR Number: 5535S.05C Fiscal Notes
Committee: Commerce, Consumer Protection, Energy and the Environment
Last Action: 5/13/2016 - Informal Calendar S Bills for Perfection--SB 848-Emery, with SCS Journal Page:
Title: SCS SB 848 Calendar Position:
Effective Date: August 28, 2016

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Current Bill Summary


SCS/SB 848 - This act modifies provisions relating to rate schedules authorized for certain utilities outside of general rate proceedings.

REVENUE STABILIZATION RATE SCHEDULES (Sections 386.266 & 386.267) - Currently, gas corporations may make an application to the Public Service Commission to approve rate schedules authorizing periodic rate adjustments outside of a general rate proceeding to reflect certain non-gas revenue effects. This act repeals this provision.

Under this act, any gas, water, or sewer corporation may file revenue stabilization rate schedules with the Public Service Commission that authorize periodic rate adjustments outside of general rate proceedings to ensure that revenues collected by the corporation do not vary from the revenues authorized by the Commission in the corporation's last general rate proceeding due to certain factors set forth in this act. The corporations may include in such rate schedules revenue variations based either upon average revenue per customer for each applicable customer class or overall revenue for each applicable customer class by tariff district. Such basis shall be used consistently while such revenue stabilization rate schedules are in effect. Certain revenue variations between general rate proceedings set forth in this act shall be excluded from any adjustments made under revenue stabilization rate schedules.

Under this act, one year after the effective date of a revenue stabilization rate schedule, the corporation's filings shall include a reconciliation component as set forth in this act. Further, 30 days after the effective date of a revenue stabilization rate schedule, and within 30 days of each annual anniversary date of the rate schedule, the corporation shall file revised rate schedules to return or collect over the next year the difference between revenues billed during the previous year and the revenues authorized by the Public Service Commission in the corporation's most recent general rate proceeding. Under this act, residential customer bills shall not increase more than $5 in any month due to a revenue stabilization rate schedule. Under this act, the $5 limitation may be adjusted upward or downward based upon the CPI-U, and upward in an amount equal to any decrease in the fixed monthly customer charge. Additionally, under this act, any costs not recovered due to the $5 limitation may be carried forward and recovered in a subsequent year.

Between annual revenue stabilization rate schedule filings, this act allows the corporations to make quarterly adjustments to reflect any differences in revenues billed to customers and revenues authorized by the Commission, with such adjustments being made effective within 10 business days. Further, whenever a gas, water, or sewer corporation has a general rate proceeding, such corporation shall also update its revenue stabilization rate schedules accordingly. Such corporation may also terminate such rate schedules as set forth in this act.

Under this act, the Public Service Commission shall process revenue stabilization rate schedules on a schedule set forth in this act, and may review such schedules for exclusive purposes. The Public Service Commission may also take into account any change in business risk to the corporation resulting from the implementation of any revenue stabilization rate schedule in setting the corporation's return on equity. By December 31, 2026, the Public Service Commission shall prepare a report for the General Assembly on revenue stabilization rate schedules.

This act shall expire on December 31, 2036. Upon expiration, the Public Service Commission shall order any rate adjustments necessary to return or collect from customers the difference between revenues billed and revenues authorized to be collected in the corporation's most recently completed general rate proceeding.

This provision is identical to provisions contained in SS#1/HCS/HB 1717 (2016), and is similar to HB 2158 (2016).

LEAD TESTING FOR WATER CORPORATION FILING ISRS PETITIONS (Sections 393.1003) - Under this act, water corporations filing infrastructure system replacement surcharge (ISRS) petitions shall implement, by January 1, 2017, a voluntary lead testing program for its residential customers that are subject to ISRS rate schedules. Priority shall be given to requests involving customer-owned lead service lines.

This provision is identical to a provision contained in SS#1/HCS/HB 1717 (2016).

COMPETITIVE BIDDING FOR ISRS-ELIGIBLE WATER UTILITY PLANT PROJECTS (Sections 393.1000-393.1007) - This act requires water corporations utilizing ISRS to establish a pre-qualification process for contractors seeking to participate in competitive bidding to install ISRS-eligible water utility plant projects over $100,000. The water corporation may specify the criteria that the contractor shall meet in order to qualify to participate in the competitive bidding process, but such criteria shall not be based on whether or not the contractor contracts with a union. Under this act, the water corporation shall file a verified statement with the Public Service Commission stating that it has in place a pre-qualification process by January 1, 2017. Any ISRS petition thereafter shall be accompanied with a verified statement that the water corporation is using a competitive bidding process for installing ISRS-eligible water utility plant projects over $100,000. Under this act, the lowest and best bid in the competitive bidding process shall receive the contract to perform the project. Nothing in this act shall be construed as requiring any water corporation to use third parties instead of its own employees to perform such work.

Under this act, the Public Service Commission shall prepare a report for the General Assembly annually, with the first report being submitted by December 31, 2018, on the competitive bidding process established under this act.

This provision expires on December 31, 2022.

These provisions are similar to provisions contained in SS#1/HCS/HB 1717 (2016).

GAS CORPORATIONS FILING ISRS PETITIONS (Section 393.1012) - Currently, the Public Service Commission may not approve a gas infrastructure system replacement surcharge (ISRS) to the extent that it would produce total annualized ISRS revenues exceeding 10% of the gas corporation's base revenue level. Under this act, the Public Service Commission may not approve a gas ISRS to the extent it would produce such revenues in any consecutive 3-year period during which an ISRS is in effect, provided that ISRS charges for residential customers shall not be increased by more than $1.50 per month annually, adjusted for any net increase or decrease in gas pipeline construction costs. This act also requires that certain gas pipeline system components shall be in worn out or deteriorated condition.

Currently, the Public Service Commission shall not approve a gas ISRS without having issued a general rate proceeding decision within the last 3 years, and a gas corporation cannot collect an ISRS for more than 3 years unless they have filed or are the subject of a new general rate proceeding. Under this act, these provisions are changed from 3 years to 5 years.

Nothing in this act shall be construed to limit the rights of certain groups to file a complaint alleging that the rates or charges of a gas corporation are unreasonable or unlawful.

This provision is identical to SCS/HCS/HB 1804 (2016), and is similar to SB 849 (2016), HB 1471 (2016), SCS/SB 403 (2015), HCS/HB 956 (2015), SCS/SB 240 (2013), and HCS/HB 473 (2013).

COMPETITIVE BIDDING FOR ISRS-ELIGIBLE GAS UTILITY PLANT PROJECTS (Section 393.1012) - This act requires gas corporations utilizing ISRS to develop and file with the Public Service Commission a pre-qualification process for contractors seeking to participate in competitive bidding to install ISRS-eligible gas utility plant projects. The gas corporation may specify the criteria that the contractor shall meet in order to qualify to participate in the competitive bidding process, but such criteria shall not be based on whether or not the contractor contracts with a union. Under this act, the gas corporation shall file a verified statement with the Public Service Commission stating that it has in place a pre-qualification process by January 1, 2017. Any ISRS petition thereafter shall be accompanied with a verified statement that the water corporation is using a competitive bidding process for installing no less than 10% of ISRS-eligible water utility plant projects. Under this act, the lowest and best bid in the competitive bidding process shall receive the contract to perform the project.

Under this act, the Public Service Commission shall prepare a report for the General Assembly annually, with the first report being submitted by December 31, 2018, on the competitive bidding process established under this act.

This provision is identical to SCS/HCS/HB 1804 (2016).

This act expires all provisions relating to gas ISRS on December 31, 2036.

KAYLA HAHN