Relating to rate-regulated public utilities, including rate proceedings, automatic adjustments, ratemaking principles, and integrated resource plans

The bill requires any provisions for the automatic adjustment of rates and charges for public utility service provided to be approved through a general rate case proceeding. Under current law, an automatic adjustment could be approved by the commission without a general rate case proceeding. The bill only allows automatic adjustments outside the control of the utility. During the rate-regulated public utility’s general rate case, a representative amount for each automatic adjustment will be established for the applicable test year. Annually, each utility will report to the commission the amounts forecast and recovered from customers for each automatic adjustment and the commission shall order a refund of or an increase in each automatic adjustment if recoveries are above or below percent of the amount set in the most recent rate case. Under current law, the commission is not limited to traditional ratemaking principles or traditional cost-recovery mechanisms when determining applicable ratemaking principles for electric generating facilities. The bill amends this provision to limit the commission to traditional ratemaking principles and traditional cost mechanisms when determining applicable ratemaking principles for electric generating facilities constructed or acquired by the rate-regulated public utility on or after the effective date of the bill. Under current law, in determining applicable ratemaking principles for electric generating facilities, the commission must find that the rate-regulated public utility has demonstrated to the commission that the public utility has considered other sources for long-term electric supply and that the facility or lease is reasonable when compared to other feasible alternative sources of supply. The bill amends this provision to require the commission to find the rate-regulated public utility has an approved integrated resource plan (plan) or has filed one concurrently with its application and has demonstrated to the commission and included in the public utility’s plan that the proposed electric generating facility is the least-cost facility or the most reasonable facility for ensuring reliable and cost-effective service. The bill requires the electric generating facility to be subject to a competitive procurement process. The bill provides the option for a rate-regulated public utility to combine a ratemaking principles proceeding and a resource plan proceeding. The bill provides that ratemaking principles established in the order setting forth applicable ratemaking principles for an electric generating facility are subject to revision in subsequent rate proceedings, except for the first rate proceeding occurring after the effective date of the bill. The bill requires each rate-regulated public utility to file a plan within one year of the enactment of the bill. The plan shall be subject to a contested case proceeding and must be approved, modified, or denied by the commission within months of filing. The utility shall then file an update to the initial plan three years after the initial filing with any changes made since the initial filing. The bill directs the commission to establish rules for implementation of the bill, including a process under which the plan must consist of a 20-year plan and a 5-year plan, a quantitative comparative analysis of multiple resource mixes to serve anticipated customer needs using industry best practices, minimum criteria for evaluating the plan’s reasonableness, a list of minimum filing requirements and a timeline for the resolution of the case, criteria and a process under which the commission shall consider plan modifications or amendments to reflect changed circumstances that affect the utility’s planning assumptions, and other criteria the commission deems necessary or appropriate. The bill allows the commission or consumer advocate to employ additional staff or contract for professional services with persons who are not state employees for the development of rules for the filing and review of resource plans or to aid the commission in the review and approval, disapproval, or modification of a plan. The costs of the additional staff and services shall be assessed to the utilities.