SB 972 - This act modifies provisions relating to energy.
MISSOURI ENERGY FREEDOM ACT (Sections 386.1000-386.1030) - This act establishes the "Missouri Energy Freedom Act".
This act allows a contract customer to enter into a renewable energy contract with an owner or developer of a renewable energy facility for the sale of electricity to meet the customer's energy needs. Such customer shall have a minimum annual peak demand of 1 MW, and such contract shall provide for the pricing and duration of the contract. Nothing shall prevent an electrical corporation from entering into a renewable energy contract directly with a contract customer, in which case the Public Service Commission shall allow the corporation to recover its prudently incurred cost of renewable generation procured under the contract that is not otherwise recoverable. The right to any renewable energy credit or other environmental attribute associated with the sale of electricity under a renewable energy contract shall transfer to the contract customer, except if the contract provides otherwise.
This act requires electrical corporations to take certain actions. Within 30 days after receiving notice of a renewable energy contract and request from a contract customer, the electrical corporation shall contract with the renewable energy facility and purchase the required electricity for resale, and sell such electricity to the customer. Within 60 days of the Public Service Commission promulgating rules under this act, an electrical corporation shall submit a tariff for approval to facilitate the delivery of electricity under renewable energy contracts. Such tariff shall include rates for the recovery of certain items set forth in this act.
Under this act, the customer shall be responsible for any federal jurisdictional costs required by the regional transmission organization to which the electrical corporation is a member. Further, when the amount of renewable energy sold under renewable energy contracts equals 5% of an electrical corporation's total retail sales in a calendar year, the corporation shall no longer be required to allow use of its transmission and distribution system. This 5% calculation shall not apply to new customers.
This act also allows an owner or developer of a renewable energy facility to enter into a contract for the sale of electricity to a customer of an electrical corporation if the electricity is supplied by a renewable energy facility located entirely on the customer's premises and the output of which is intended entirely for use at the customer's premises. An electrical corporation shall not be entitled to recover any costs under such contract, and shall not be required to compensate such customer for any excess energy supplied to the grid.
Within 180 days of the Commission promulgating rules, an electrical corporation shall submit a tariff for approval establishing a portfolio of voluntary renewable purchase programs. Such programs shall be offered until the corporation's retail sales from renewable energy contracts exceeds 5% of total retail sales. Such programs shall be based on actual costs, shall recover any incremental costs only from participating customers, and shall transfer any renewable energy credit or other environmental attribute to the customer.
ALTERNATIVE REGULATION FOR ELECTRICAL CORPORATIONS ACT (Sections 393.1300-393.1340) - This act also establishes the "Alternative Regulation for Electrical Corporations Act".
This act allows an electrical corporations to file an application with the Public Service Commission to participate in the Alternative Regulation for Electrical Corporations Act, and seek discontinuance of certain rate adjustment mechanisms along with the application. If such corporation files such notice, the corporation shall not assert any claims that compound annual growth rate limitations set forth in this act constitute a constitutionally prohibited taking.
Along with the application, the electrical corporation shall submit to the Public Service Commission a 5-year capital investment plan, as well as a specific capital investment plan for the first year. The Commission shall, through a report and order, establish minimum capital investment levels, which shall be at least 20% higher than investments made from 2015-2017. The Commission shall approve the electrical corporation's application if it meets certain criteria set forth in this act.
In any rate proceeding occurring due to an electrical corporation's application to participate in the Alternative Regulation for Electrical Corporations Act, the Commission shall examine each regulatory tracking mechanism. The Commission shall order the discontinuation of each rate adjustment mechanism unless it is in the public interest, and if the electrical corporation has sufficient incentives to manage the tracked expense. Further, as part of the Commission’s report and order, the Commission shall specify the cost and revenue components that form the basis of rates charged to customers so that subsequent rate increases can be conducted in a streamlined and expedited fashion.
Any participating electrical corporation can discontinue participating in the Alternative Regulation for Electrical Corporations Act, but may not elect to participate at any point after such discontinuance.
Under this act, rate proceedings shall be considered file and suspend general rate proceedings, provided that the Public Service Commission may suspend operation of certain schedules for no longer than 150 days. Each participating electrical corporation shall file an annual general rate proceeding, and the Commission shall establish minimum filing requirements for such proceeding. The Commission shall establish rates for the corporation using a test year, and the corporation's return on equity shall be 9.2%, adjusted to reflect bond yields. Further, the Commission shall exclude certain items from recovery in rates as set forth in this act. Nothing in this act shall limit the ability of any entity to file a complaint.
Under this act, if the participating electrical corporation's average base rate reflects a compound annual growth rate of 2% or higher, the Public Service Commission shall only increase rates 2%, unless the Commission determines that a force majeure event has occurred. Further, if any rate adjustment mechanism authorized by the Renewable Energy Standard or the Missouri Energy Efficiency Investment Act would cause such 2% limitation to be exceeded, the corporation shall reduce rates charged to ensure that such 2% is not exceeded.
Under this act, an electrical corporation shall submit a report to the Public Service Commission within 1 year and 3 months of certain dates detailing actual capital investments made. If the corporation has failed to complete the specific capital investment plan for the previous year, the corporation shall establish a regulatory liability equal to 2 times the difference between the capital investments plan and the actual investments made. The regulatory liability shall be amortized over a reasonable period of time, and the corporation shall not seek to recover the funds from customers.
This act requires electrical corporations to file quarterly surveillance monitoring reports consisting of rate base quantifications, capitalization quantifications, an income statement, a jurisdictional allocation factor, and financial data notes, as set forth in this act. Further, this act requires the Public Service Commission to prepare and file a report with the General Assembly on the impact of the Alternative Regulation for Electrical Corporations Act on electrical corporations and their customers.
The Alternative Regulation for Electrical Corporations Act expires on December 31, 2028.