Commenting period open on bills that would change how investor-owned electric utilities recover infrastructure costs
The Missouri Public Service Commission has opened a hearing docket to receive written comments on the impact of pending legislative proposals to change the way investor-owned electric utilities can recover infrastructure costs. The Commission's action complies with a legislative request to hold the hearings, allow testimony a...
The Lake News Online
Posted Mar. 22, 2013 @ 12:00 pm
Posted Mar. 22, 2013 @ 12:00 pm
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The Missouri Public Service Commission has opened a hearing docket to receive written comments on the impact of pending legislative proposals to change the way investor-owned electric utilities can recover infrastructure costs. The Commission's action complies with a legislative request to hold the hearings, allow testimony and advise lawmakers on possible impacts of Senate Bill 207 and House Bill 398, which are now before the Missouri General Assembly.
PSC Chairman Robert Kenney said the hearings will allow the Commission to meet its statutory obligation to comply with such requests from the legislature while providing an opportunity for interested stakeholders to provide comprehensive input for Commission review.
"The Commission has received requests asking for comment on discrete aspects of the bills. This docket will allow the Commission to consider input from everyone in an open and transparent manner," Kenney said. "The Commission will then conduct a hearing and report the findings to the General Assembly, as has been requested."
The legislative request specifically asked the PSC to review the safety, adequacy and reliability of Missouri's existing electric infrastructure and to identify problems, needs and costs associated with electric infrastructure. It also asked for analysis of rate impacts that could result if SB 207 and HB 398 were implemented, and for a review of due process procedures related to implementing the changes contained in the measures.
The Commission has asked all intended stakeholders to provide written information and testimony by April 1 because of time constraints involving all pending legislation.
A comment hearing will be held at 9 a.m., April 8, in Room 305 of the Governor Office Building. The PSC is expected to issue a report of its findings to the Legislature by April 17.
The Governor Office Building meets accessibility standards required by the ADA. Anyone needing additional accommodations to participate in this hearing may call 1-800-392-4211 (voice) or Relay Missouri at 711 before the hearing.
According to the legislative summaries of SB 207 and HB 398, the act would allow electrical corporations to file a petition with the PSC for rate adjustments to recover costs incurred for infrastructure replacement projects, in a process similar to that followed by gas corporations.
The types of costs that could be recovered include certain work on electric plants, certain capital projects undertaken to comply with environmental or safety regulations, and costs of facilities relocation due to public works projects.
The bills detail the process that an electric corporation and the PSC would follow in reviewing applications for infrastructure system replacement surcharges.
If surcharges are approved by the commission, the act would require electric corporations to submit to the PSC a reconciliation noting the differences between infrastructure system replacement revenues and appropriate pretax revenues. The act would also modify the amount of revenues that may be produced from an infrastructure system replacement from no less than $1 million or half of 1% of the corporation's base revenue and no more than 10% of the corporation's base revenue. While the electric corporation is collecting an infrastructure system replacement surcharge, they may only adjust the rate two times every 12 months. If an electric corporation files a petition or change to an infrastructure system replacement surcharge, it would not be considered an increase in the electric corporation's base rate.
Beginning Aug. 28, 2013, the commission would have to implement a mechanism to track the difference between specified non-capitalization costs used to calculate and set the electrical corporation's revenue requirement for rate cases and the sum of the cost actually incurred by the electrical corporation as reflected on its books and records.
The electrical corporation would have to defer the amount tracked as an asset or liability to be included in determining the revenue requirement amortized over a period of three years without offset, reduction, or adjustment at the corporation's next general rate proceeding.
Certain costs are excluded from the labor and regulatory costs allowed to be included in the non-capitalization costs.