SB 44
Establishes provisions related to water and sewer infrastructure
Sponsor:
LR Number:
0809H.07C
Last Action:
5/10/2021 - H Calendar Senate Bills for Third Reading w/HCS
Journal Page:
Title:
HCS SS SB 44
Calendar Position:
Effective Date:
August 28, 2021
House Handler:

Current Bill Summary

HCS/SS/SB 44 - This act modifies provisions relating to utilities.

ENERGY CONNECTIONS (Section 67.309):

Under this act, no political subdivision shall adopt an ordinance, resolution, regulation, code or policy that prohibits, or has the effect of prohibiting, the connection or reconnection of a utility service based upon the type or source of energy to be delivered to an individual customer. Utility services shall include natural gas, propane gas, electricity, and any other form of energy provided to an end user customer.

This provision is similar to a provision contained in the perfected SS/SB 141 (2021), SB 230 (2021), and to a provision contained in SCS/HCS/HB 734 (2021).

SERVICE TERRITORIES OF RETAIL ELECTRIC SERVICE PROVIDERS (Sections 91.025, 386.800, 393.106, 394.020, & 394.315):

This act modifies provisions relating to service territories of retail electric service providers.

This act provides that in the event that a retail electric supplier is providing service to a structure located within a municipality that has ceased to be a rural area, and such structure is demolished and replaced by a new structure, such retail electric service supplier may provide permanent service to the new structure upon the request of the owner of the new structure.

Additionally, in the absence of an approved territorial agreement, the municipally owned utility shall apply to the Public Service Commission for an order assigning nonexclusive service territories and concurrently shall provide written notice of the application to other electric service suppliers with electric facilities located within one mile outside of the boundaries of the proposed expanded service territory. In granting the applicant's request, the Commission shall give due regard to territories previously served by the other electric service suppliers and the wasteful duplication of electric service facilities.

Any municipally owned electric utility may extend its electric service territory to include areas where another electric supplier currently is not providing permanent service to a structure. If a rural electric cooperative has existing electric service facilities in the area proposed to be annexed, the majority of the existing developers, landowners, or prospective electric customers may submit a written request to the governing body of the annexing municipality to invoke mandatory good faith negotiations as provided in the act. These provisions shall also apply in the event an electrical corporation rather than a municipally owned electric utility is providing electric service in the municipality.

This act also changes the term "fair and reasonable compensation" to be two hundred percent, rather than four hundred percent, of gross revenues less gross receipts taxes received by the affected electric service supplier from the 12 month period preceding the approval of the municipality's governing body. Additionally, this act changes the definition of the population of a "rural area" to be increased by 6% every ten years after each census beginning in 2030.

Nothing in this act shall be construed as otherwise conferring upon the Public Service Commission jurisdiction over the service, rates, financing, or management of any rural electric cooperative or any municipally owned electric utility.

These provisions are substantially similar to provisions contained in SS#2/SCS/HCS/HB 271 (2021).

Throughout the act, the term "electric supplier" is changed to "electric service supplier".

Under this act, at the time that a municipally owned utility applies to the Public Service Commission for an order assigning nonexclusive service territories, such utility shall concurrently provide written notice of the application to other electric service suppliers with electric facilities located within one mile outside of the boundaries of the proposed expanded service territory. In granting the applicant's request, the Commission shall consider territories previously granted to or served by other electric service suppliers and the duplication of electric service facilities.

Any municipally owned electric utility may extend pursuant to lawful annexation its electric service territory to include areas where another electric service supplier is not currently serving a structure but has existing electric service facilities located in or within one mile outside the boundaries of the area proposed to be annexed, provided it first notifies in writing the affected electric service supplier within 60 days prior to the effective date of the proposed annexation. If the affected electric service supplier objects, it shall follow procedures set forth in the act.

Responsibility for payment of fees set by the Commission to carry out its duties related to determining service territories under the act shall be on the parties to the proceeding as ordered by the Commission in each case.

Nothing in the act shall give the Commission jurisdiction over the service, rates, financing, accounting, or management of any rural electric cooperative or municipally owned electric utility.

If an electrical corporation is providing electric service within a municipality and the corporation has previously received a certificate of convenience and necessity from the Commission to provide electric service in the annexed area or the area proposed to be annexed, certain provisions of the act shall apply equally to the electrical corporation as if it were a municipally owned utility.

Nothing in the act shall be construed to preclude a municipality having a population of at least 1,500 inhabitants as of August 28, 2021, from requiring a rural electric cooperative to obtain a franchise to provide electric service, or to impose a sales tax, within the boundaries of the municipality.

Finally, the act modifies the definition of "rural area" as the term is used in provisions of law relating to rural electric cooperatives.

ASSESSMENT OF CERTAIN PUBLIC UTILITY PROPERTY (Sections 153.030 & 153.034):

Beginning January 1, 2022, this act provides that any real and personal property owned by a public utility company that was constructed using chapter 100 financing shall, upon the transfer of such property to the public utility company, be assessed upon the local tax rolls. Any property consisting of land and buildings shall be assessed pursuant to current law relating to the assessment of such property in general, and all other business or personal property shall be assessed pursuant to the depreciation schedule provided under current law.

This provision is identical to SCS/SB 92 (2021) and substantially similar to HB 2680 (2020).

COMMON SEWER DISTRICTS (Section 204.569):

Under current law, when an unincorporated sewer subdistrict of a common sewer district has been formed, the board of trustees of the common sewer district shall have the power to issue bonds, and the issuance of such bonds shall require the assent of 4/7 of the voters of the subdistrict on the question. This act states that as an alternative to such vote, if the subdistrict is a part of a common sewer district located in whole or in part in certain counties, bonds may be issued for such subdistrict if the question receives the written assent of 3/4 of the customers, as such term is defined in the act, of the subdistrict.

This provision is identical to SB 558 (2021) and to a provision contained in the perfected SS/SB 44 (2021).

ASSESSMENTS AGAINST PUBLIC UTILITIES (Section 386.370):

Currently, the Public Service Commission can assess no more than 0.25% of the total gross intrastate operating revenues against all utilities subject to the jurisdiction of the Commission for the cost of regulating such utilities. This act changes the assessment rate to no more than 0.38% of the total gross intrastate operating revenues of such utilities.

This provision is identical to a provision contained in the perfected SS#2/SCS/SB 202 (2021) and similar to SCS/SB 280 (2021).

COMPETITIVE BIDDING (Section 393.358):

Currently, water corporations with more than 1,000 customers are required to use a competitive bidding process for no less than 10% of the corporation's external expenditures for planned infrastructure projects on the water corporation's distribution system. Under this act, such competitive bidding process shall be used for 20% of the corporation's external expenditures for such projects.

WATER AND SEWER INFRASTRUCTURE (Sections 393.1500-393.1509):

The act establishes the Missouri Water and Infrastructure Act, which specifies that a water or sewer corporation that provides water or sewer service to more than 8,000 customer connections may file a petition and proposed rate schedules with the Public Service Commission to create or change a water and sewer infrastructure rate adjustment (WSIRA) that provides for the recovery of pretax revenues associated with eligible infrastructure system projects.

The WSIRA shall not produce revenues in excess of 15% of the water or corporation's base revenue requirement approved by the Commission in the corporation's most recent general rate proceeding, with certain exceptions.

The WSIRA and any future changes shall meet specific requirements set forth in the act.

The Commission shall not approve a WSIRA for a water or sewer corporation that has not had a general rate proceeding decided or dismissed in the 3 years before the filing of a WSIRA petition unless the water or sewer corporation has filed for or is the subject of a new general rate proceeding.

In the event a water or sewer corporation is collecting infrastructure system repalcement surcharge revenues that were approved before August 28, 2021, when a WSIRA is filed, the approved infrastructure system replacement surcharge revenues shall be included in the new WSIRA filing. In no event shall a customer be charged both an infrastructure system repalcement surcharge and a WSIRA.

At the time the water or sewer corporation files a petition for a WSIRA, it shall submit proposed WSIRA rate schedules and supporting documentation, and the corporation shall also serve the Office of Public Counsel with a copy of the petition, rate schedules, and documentation. Upon the filing of a petition, the Commission shall conduct an examination of the proposed WSIRA, as specified in the act.

The Commission may hold a hearing on the petition and any associated WSIRA rate schedules. If the Commission finds that a petition complies with the requirements set forth in the act, the Commission shall enter an order authorizing the water or sewer corporation to implement the WSIRA. A corporation may petition the Commission for a change in its WSIRA no more than two times in every 12-month period.

The act lists what information the Commission may consider in determining the appropriate pretax revenues and how the WSIRA is calculated. If this information is unavailable and the Commission is not provided such information on an agreed-upon basis, the Commission shall utilize the overall pretax weighted average cost of capital last authorized for the water or sewer corporation in a general rate proceeding regarding a WSIRA or an infrastructure system replacement surcharge. At the end of each 12-month calendar year that a WSIRA is in effect, the corporation shall reconcile the differences between the revenues from a WSIRA and the appropriate pretax revenues found by the Commission for that period and submit the reconciliation and proposed WSIRA to the Commission for approval to recover or credit the difference.

A water or sewer corporation that has a WSIRA shall file revised WSIRA schedules when new base rates and charges become effective following a general rate proceeding that includes the WSIRA eligible costs in the base rates. Once the eligible costs are included in the water or sewer corporation's base rates, the corporation shall reconcile any previously unreconciled WSIRA revenues to ensure that revenues resulting from the WSIRA match as closely as possible the appropriate pretax revenues.

A water or sewer corporation's filing of a petition to establish or change a WSIRA is not considered a request for a general increase in the corporation's base rates and charges.

Commission approval of a petition to establish or change a WSIRA shall in no way be binding upon the Commission in determining the ratemaking treatment to be applied to eligible infrastructure system projects during a subsequent general rate proceeding when the Commission may undertake to review the prudence of such costs. If, during a subsequent general rate proceeding, the Commission disallows recovery of costs associated with eligible infrastructure system projects previously included in a WSIRA, the water or sewer corporation shall offset its WSIRA in the future as necessary to recognize and account for any such overcollections.

Nothing in the act impairs the authority of the Commission to review the reasonableness of the rates or charges of a water or sewer corporation, including review of the prudence of eligible infrastructure system replacements made by a water or sewer corporation.

The Commission may take into account any change in business risk to the water or sewer corporation from implementation of the WSIRA in setting the corporation's allowed return in a general rate proceeding in addition to any other changes in business risk experienced by the corporation.

These provisions shall expire on December 31, 2031.

These provisions are similar to HB 397 (2021), SB 592 (2020), HCS/HB 2094 (2020), SB 377 (2019), and HCS/HB 633 (2019).

RURAL ELECTRIC COOPERATIVES (Section 394.120):

Under the act, the board of directors of a rural electric cooperative shall have the power to set the time and place of the annual meeting and also to provide for voting by proxy, electronic means, by mail, or any combination thereof, and to prescribe the conditions under which such voting shall be exercised. The meeting requirement may be satisfied through virtual means.

This provision expires on August 28, 2022.

This provision is identical to a provision contained in the perfected SS/SB 333 (2021) and in the perfected SS#2/SCS/SB 202 (2021).

JAMIE ANDREWS