Bill Summary for H 219 (2021-2022)

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Summary date: 

Mar 3 2021

Bill Information:

View NCGA Bill Details2021
House Bill 219 (Public) Filed Wednesday, March 3, 2021
Intro. by Arp, Paré, Szoka, Watford.

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Bill summary

Enacts GS 62-133.1B, authorizing the Utilities Commission (Commission) to approve a water or sewer facility's Water and Sewer Investment Plan (Plan) upon application by the facility in a general rate proceeding if the Commission finds the plan results in rates that are just and reasonable and are in the public interest. Defines Plan to mean a plan under which the Commission sets water or sewer base rates, revenue requirements through banding authorized returns, and authorizes annual rate changes for a three-year period based on reasonable known or measurable capital investments and anticipated reasonable and prudent expenses approved under the plan without need for a base rate proceeding during the plan period. Requires a facility's filed Plan to include performance-based metrics that benefit customers and ensure the provision of safe, reliable, and cost-effective service. Details required considerations of the Commission in reviewing a Plan application, and authorizes the Commission to impose any conditions in the implementation of the Plan as specified. 

Prohibits any rate adjustment allowed under an approved Plan from exceeding 5% of the utility's North Carolina retail jurisdictional gross revenues for the preceding plan year for years two and three of the plan. Provides for petitioning the Commission to consider the addition of unplanned emergency capital investments during a plan term.

Requires rate adjustment mechanisms authorized under GS 62-133.12 (concerning investments) and GS 62-133.12A (concerning usage tracking) to be discontinued during the term of any Plan, though allows for filing for an adjustment under GS 62-133.12 to become effective after the Plan term.

Provides for the Commission's ruling on a Plan after proper notice and hearing and effectiveness of the Plan. Authorizes the Commission to modify or terminate an approved Plan after an opportunity for hearing at any time for good cause shown.

Requires the Commission to establish banding of authorized returns, as defined, on equity for approved Plans, with a utility required to refund or credit earnings, or permitted to file a general rate case, based on the range established.

Requires the Commission to annually review a utility's earnings as provided.

Directs the Commission to adopt implementing rules, including rules to establish filing procedures, annual reporting and review, and development of bandings of authorized returns. Requires adoption no later than 120 days after the date the act becomes law.

Makes the above provisions applicable to any rate-making mechanisms, designs, plans, or settlements filed by a water or sewer utility on or after the date that the Commission's implementing rules become effective.

Makes conforming changes to GS 62-133.1.

Amends GS 62-133.12, which governs the approval of rate adjustment mechanisms based on a utility's investment in eligible water and sewer system improvements. Modifies the definition given for the term eligible water system improvements to include hydro tanks and pumping equipment installed as replacements; equipment and infrastructure installed at the Commission's direction to comply with federal, State, or local health or environmental standards; and unreimbursed costs of relocating facilities due to roadway, rather than highway, costs. Modifies the definition given for the term eligible sewer system improvements to include unreimbursed costs of relocating facilities due to roadway, rather than highway construction or relocation, costs; and replacement or improvement of force mains, gravity mains, service lines, pumps, motors, blowers, and other electrical or mechanical equipment (was pumps, motors, blowers, and other mechanical equipment installed as replacements for customers); no longer includes improvements necessary to reduce inflow and infiltration to the collection system to comply with applicable State and federal law and regulations. Increases the cap for cumulative system improvement charges for a utility under a rate adjustment mechanism approved under the statute from 5% to 7.5%. Adds that unreimbursed costs of relocating facilities due to roadway projects are exempt from the cap. Now requires accumulated depreciation for eligible water or sewer system improvements to be updated in each filing submitted by a utility within the same docket.