Missouri Senate

Senate Committee Substitute

FUEL ADJUSTMENT CLAUSE (Section 386.266) - Currently, electrical corporations may make an application to the Public Service Commission to approve rate schedules authorizing an interim energy charge for fuel and purchased-power costs. Under this act, such rate schedules shall also provide for adjustments reflecting all transmission charges and transmission revenues. Further, electrical corporations may file to amend such existing rate schedules and begin rate recovery without filing a general rate proceeding.

This provision is similar to a provision contained in SCS/SB 1028 (2016) and SS/HCS/HB 2689 (2016).

COMPLAINT PROCEDURE (Section 386.390) - Currently, certain organizations may make a complaint against a public utility by setting forth any act committed or omitted by a public utility, including any rule, regulation or charge established by the commission in violation of any law, rule, order, or decision. Under this act, the complaint shall set forth the act committed or omitted by the public utility in violation of any provision of law subject to the Public Service Commission’s authority, or of any rule, utility tariff, order, or decision of the Commission.

RENEWABLE ENERGY STANDARD (Sections 393.1025 & 393.1030) - This act modifies the definition of "renewable energy resources" by adding processed solid biomass engineered fiber fuel, and provides that each kilowatt-hour of energy generated from such fiber fuel shall count as 1.50 kWh for purposes of compliance with the standard.

MISSOURI ENERGY EFFICIENCY INVESTMENT ACT (Section 393.1075) - This act modifies the definition of "demand-side program" to include the utilization of combined heat and power technology to generate electricity from waste heat to assist customers with reducing the amount of electricity delivered.

This act also modifies notification procedures for customers participating in demand-side programs. This act requires that a customer with one or more accounts having a demand of 5,000 kWh or more, a customer operating an interstate pipeline pumping station, or a customer with a demand of 2,500 kWh or more and a comprehensive energy efficiency program, to give written notification if they do not elect to participate in demand-side measures offered by the electrical corporation on either all or some of the customer's accounts. The first day of the billing cycle occurring after the customer provided notification, no demand-side charges shall be included on the customer's bill for such accounts. After notification has been given, such customer shall not be eligible to participate in demand-side programs unless the customer provides an additional written notice rescinding its previous notice.

Currently, customers of electrical corporations that receive either a low-income housing or historic preservation tax credit are not eligible to participate in any demand-side program offered by an electrical corporation if such program offers a monetary incentive to the customer. This act repeals this provision.

This provision is similar to a provision contained in SS/HCS/HB 2689 (2016).

SMART METERS (Section 393.1100) - This act allows residential customers of electrical and gas corporations to opt-out of having a two-way communication enabled meter. Any such customer shall be assessed an additional charge for meter reading, with the charge based on the incremental cost of reading such person's meter compared to a two-way meter.

PROPERTY TAX AND O&M EXPENSE DEFERRAL (Section 393.1275) - This act requires electrical corporations to defer any difference in state and local property tax expenses incurred and those used to set rates, and any difference in prudently incurred operations and maintenance (O&M) expense actually incurred in order to protect the reliability and security of systems and the O&M expense for such protection that was used to set rates, to a regulatory asset or liability account. Such account balances shall be included in the corporation's revenue requirement and amortized over a reasonable period of time. This act also requires the Public Service Commission to adjust the rate base used to establish the corporation's revenue requirement to reflect the unamortized regulatory asset or liability account balances.

This provision is similar to SB 702 (2014) and HB 2078 (2014).

THE MISSOURI ECONOMIC DEVELOPMENT AND INFRASTRUCTURE INVESTMENT ACT (Sections 393.1400 & 393.1640) - This act creates the Missouri Economic Development and Infrastructure Investment Act.

PLANT-IN-SERVICE ACCOUNTING (Section 393.1400) - This act requires electrical corporations to defer and recover depreciation expense and return for qualifying electric plants placed in service. The definitions of "qualifying electric plant", "relevant period", and the calculation of such expense and return are set forth in this act. The balance in the deferred regulatory asset account shall be included in determining the electrical corporation's rate base during subsequent general rate proceedings, shall include carrying costs at the electrical corporation's weighted average cost of capital, plus taxes, and shall be amortized and recovered in rates over a period of 20 years. This act also allows electrical corporations to recover this same expense for the time period from the end of a relevant period to the effective date customer rates take into account this expense. The impact on the electrical corporation's revenue requirement caused by the inclusion of the regulatory asset shall not exceed the maximum retail revenue requirement impact calculated as set forth in this act. If such increase would be exceeded by authorized incremental investments and regulatory assets, the regulatory assets to be included in rate base shall not include any deferred depreciation or return that would otherwise have been authorized under this act.

This provision is similar to SB 310 (2015), HB 925 (2015), SB 909 (2014) and HB 2024 (2014).

5-YEAR CAPITAL INVESTMENT PLAN (Section 393.1400) - This act requires electrical corporations that defer depreciation expense and return to file with the Public Service Commission a 5-year capital investment plan, and a specific capital investment plan for the following year, on February 28 of each year setting forth capital expenditures the corporation will pursue in furtherance of modernizing and securing its infrastructure. Annually thereafter, the plan shall also include a report of capital investments for the prior calendar year. Upon submitting such investment plan to the Public Service Commission, the electrical corporation shall hold a public stakeholder meeting to answer questions and receive feedback on the plan. After feedback is received, the electrical corporation may file a notice with the Commission to make modifications to the investment plan. The electrical corporation's investment plan shall be made publicly available under this act. Further, the submission of the plan shall not affect the Public Service Commission's authority to grant or deny any certificate of convenience and necessity.

This provision is similar to provisions contained in SCS/SB 1028 (2016) and SS/HCS/HB 2689 (2016).

ECONOMIC DEVELOPMENT RIDERS (Section 393.1640) - This act requires electrical corporations to make available certain economic development riders. Customers that are served under an electrical corporation's large power service rate schedule that add 500 kW either before or after November 1, 2016, and that either add 15 MW and an annual load factor of at least 55% at a single premises or 30 MW at up to 5 premises, shall qualify for a special rate as set forth in this act. A large power service customer that is new to an electrical corporation after November 1, 2016, that has a demand greater than 15 MW and an annual load factor of 55%, shall qualify for a 20% discount on their electric bill. Customers that are served under an electrical corporation's large power service rate schedule that have a demand on a single account greater than 40 MW and an annual load factor of at least 80%, or an aggregate demand of 34.5 kV or higher of greater than 40 MW through 7 or more accounts, shall qualify for a 15% discount on their electric bill.

Any reduced revenues arising from the discounts through economic development riders shall be borne by all other customers equally, excluding large power service class customers.

This provision is similar to a provision contained in SS/HCS/HB 2689 (2016).

These sections expire on December 31, 2027.

RATE ADJUSTMENT MECHANISMS (Section 393.1410) - This act allows the Missouri Public Service Commission to utilize rate adjustment mechanisms otherwise not specifically authorized by statute to promote modernization and replacement of an electrical corporation's infrastructure. This act also allows the Commission to use partially forecasted test-years, true-ups of revenue requirement components, tracking mechanisms, grid modernization incentive mechanisms, interim rates, performance-based rates, decoupling, or decisional pre-approval with post construction review for construction projects.

TEST BURNING PROCESSED SOLID BIOMASS ENGINEERED FIBER FUEL (Section 393.1600) - This act allows any electrical corporation to modify their own fossil-fired generating plant located in Missouri to accommodate the test burn of a processed solid biomass engineered fiber fuel, and to reflect in rates prudently incurred plant modification and fuel costs. Feasibility costs shall not exceed $2 million, and plant modification costs shall not exceed $10 million.

This section expires on December 31, 2027.

This section is similar to a provision contained in SS/HCS/HB 2689 (2016).

DEPLOYING FACILITIES (Section 393.1610) - This act requires the Public Service Commission to permit electrical corporations to recover costs for deploying certain facilities without demonstrating that such technology is the least cost alternative, provided that such project meets certain requirements set forth in this act. Further, this act provides that electrical corporations constructing a renewable energy generation unit with a capacity of 1 MW or less need not obtain a certificate of convenience and necessity from the Public Service Commission prior to construction.

This section is similar to provisions contained in SCS/SB 1028 (2016) and SS/HCS/HB 2689 (2016).

CONTRACTOR PRE-QUALIFICATION PROCESS (Section 393.1650) - This act requires electrical corporations with more than 1 million customers to develop a qualification process for contractors seeking to provide construction services for distribution system projects. Contractors shall have the opportunity to register on the electrical corporation's vendor registration site and evaluated for bid opportunities. The electrical corporation may specify the eligibility requirements that the contractor shall meet in order to qualify to participate in the competitive bidding process, and the electrical corporation shall not weight any contractor favorably or unfavorably due to an affiliation with a union, except when work is being performed under a project labor agreement. Contractors that meet the eligibility requirements shall be able to participate in the competitive bidding process, and the contractor making the lowest and best bid shall be awarded such contract.

Within 30 days of the effective date of this act, the electrical corporation shall file a verified statement with the Public Service Commission stating that it has in place a pre-qualification process. Any general rate proceeding filing thereafter shall be accompanied with a verified statement that the electrical corporation is using a competitive bidding process for installing no less than 10% of combined external installation expenditures in Missouri for construction services on distribution system projects. Nothing in this act shall require an electrical corporation to use a qualified contractor or competitive bidding process in the case of an emergency, or to terminate any existing contract prior to its expiration.

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, 2019, on the process established under this act.

This section expires on December 31, 2027.

This section is substantially similar to a provision contained in SS/HCS/HB 2689 (2016).

This act is similar to HB 628 (2017).

KAYLA HAHN