SB 572
Modifies provisions relating to public utilities
Sponsor:
LR Number:
5128S.01I
Last Action:
1/8/2018 - Second Read and Referred S Commerce, Consumer Protection, Energy and the Environment Committee
Journal Page:
Title:
Calendar Position:
Effective Date:
August 28, 2018

Current Bill Summary

SB 572 - This act modifies provisions relating to public utilities.

RATE ADJUSTMENTS OUTSIDE OF GENERAL RATE PROCEEDINGS (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 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 SB 214 (2017), 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.

This provision is substantially similar to a provision contained in SCS/HB 1800 (2018).

PROPERTY TAX AND CERTAIN O&M EXPENSE DEFERRAL (Section 393.1275) - This act allows electrical corporations that notify the Public Service Commission to defer any difference in state and local property tax expense incurred and those used to determined the corporation’s revenue requirement in its most recently completed general rate proceeding, 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 determine the corporation's revenue requirement in its most recently completed general rate proceeding, 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).

PLANT-IN-SERVICE ACCOUNTING (Section 393.1400) - This act requires electrical corporations that notify the Public Service Commission to defer and recover depreciation expense and return for qualifying electric plant recorded to plant-in-service on the utility's books. The balance in the associated deferred regulatory asset account, except any prudence disallowances, shall be included in determining the electrical corporation's rate base during subsequent general rate proceedings. Further, such regulatory asset balances shall include carrying costs at the electrical corporation's weighted average cost of capital as set forth in this act, plus taxes, and shall be amortized and recovered in rates over a period of 20 years.

This provision expires on December 31, 2028.

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

5-YEAR CAPITAL INVESTMENT PLAN (Section 393.1400) - Beginning in 2019, 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 replacing, modernizing, and securing its infrastructure. Within 30 days of 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 that it has accepted. Further, changes to the plan shall not constitute evidence of imprudence, and 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 expires on December 31, 2028.

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

DISCOUNTED ELECTRIC RATES (Section 393.1640) - This act requires electrical corporations to make available discounted rates for qualifying customers upon application and upon a public announcement of a growth project. Any customer that receives local, regional, or state economic development incentives and that adds incremental load with average monthly demand of at least 500kW and a load factor of at least 55% within 2 years shall qualify for a 40% discount average for up to 5 years on all base rate components, and an additional 10% discount for 1 year after the expiration of the initial discount if the customer takes service from an under-utilized circuit. Any reduced revenues arising from the discounted rate shall be borne by all of the electrical corporation's customer classes.

This provision expires on December 31, 2028.

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

CONTRACTOR PRE-QUALIFICATION PROCESS (Section 393.1650) - This act requires electrical corporations with more than 1 million Missouri 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 be 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, 2020, on the process established under this act.

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

RATE BASE INCREASE REGULATORY LIABILITY AND LIMITATIONS (Section 393.1655) - This act maintains an electrical corporation's base rates for 3 years for electrical corporations with more than 200,000 customers that elect to defer certain property taxes and operations and maintenance expense, or elect to defer certain depreciation and return for electric plant placed-in-service, except such rate may not be maintained if the Commission determines that a force majeure event has occurred. If, after 5 years from the corporation making such deferrals, the corporation's base rate for all customers reflects a growth rate of more than 3%, the corporation is then required to establish a regulatory liability equal to $25 million for electrical corporations with more than 1 million Missouri customers, and $6 million for corporations with more than 200,000 Missouri customers, to be amortized over a reasonable period of time determined by the Public Service Commission. If, after such 5 years, the corporation's base rate increases by more than 3.75%,the corporation is also required to cease further deferrals. Additionally, if base rates increase for the corporation's large power service rate class by more than 2%, such base rate shall be limited to increasing 2% with such reduced revenues arising from limiting the large power service customer class to all other customers.

This act is identical to SB 564 (2018), is substantially similar to HB 1575 (2018), and is similar to HB 2265 (2018), SB 190 (2017), and HB 628 (2017).

KAYLA HAHN

Amendments