AN ACT TO PERMIT FINANCING FOR CERTAIN STORM RECOVERY COSTS.
Conference report makes the following changes to the 5th edition.
Eliminates all provisions of Part II, which required the Utilities Commission (Commission) to study the advisability of authorizing certain alternative methods to fixing rates.
Instead, enacts GS 62-133A (similar to proposed GS 62-133A as it appeared in the 4th edition) to authorize the Commission to approve multiyear rate plans, banding of authorized terms, or a combination thereof, upon application by an electric public utility, filed in and along with a general rate case proceeding to fix rates pursuant to GS 62-133. Defines banding of authorized returns to mean a rate mechanism under which the Commission sets an authorized return on equity for an electric utility that acts as a midpoint and then applies a low- and high-end range of returns to that midpoint under which an electric public utility will not overearn if within the high-end range and will not underearn if within the low-end range. Defines multiyear rate plan to mean a rate mechanism under which the Commission sets base rates and revenue requirements for a multiyear plan period based on a known and measurable set of capital investments and all the expenses associated with those capital investments and authorizes periodic changes in base rates during the approved plan period without the need for a base rate proceeding during the plan period.
Details limitations and conditions required of any banding of authorized returns approved, including (1) requiring a petition for Commission approval of an electric public utility operating under a banding of authorized returns to make specified investments and issue refunds totaling the verified earnings exceeding the high-end range of the approved band and (2) allowing the electric public utility to file a general rate case proceeding if the utility is operating under a banding of authorized returns and falls below the low-end range of the approved band.
Sets forth procedures for the Commission to approve or deny, with or without modifications, an electric public utility's proposed rate-making mechanism, plan, or settlement that includes multiyear rate plans, banding of authorized terms, or a combination thereof, after notice and opportunity to be heard, to require the Commission to make its determination and issue an order within 365 days of the proposed mechanism, plan, or settlement's filing. Provides that the Commission's order ruling on the electric public utility's request to adjust base rates governs in instances in which the Commission denies a utility's proposed rate-making mechanism, plan, or settlement that includes multiyear rate plans, banding of authorized terms, or a combination thereof. Restricts approval of such alternative rate-making mechanisms only if the Commission finds that mechanisms are just and reasonable, and are in the public interest. Details five considerations the Commission must look to in reviewing an application, including whether the application will result in sudden substantial rate increases to customers. Authorizes the Commission to impose conditions for application approval necessary to ensure the rates are just and reasonable, and in the public interest. Allows a utility subject to approval with modifications to, at its option, accept the modification and implement the multiyear rate plan, banding of authorized returns, or a combination thereof, as modified, or withdraw its application and be governed by the Commission's order ruling on the utility's request to adjust base rates.
Provides for any approved rate-making mechanisms, plans, or settlements to be effective for a period of no more than three years. Requires electric public utilities to make an annual filing that sets forth the utility's earned return on equity for the prior 12-month period for purposes of measuring earnings under any mechanisms.
Provides a savings clause for existing rate-making authority of the Commission and any rates approved by the Commission prior to the effective date of the statute. Further provides that any approved rate-making mechanisms, plans, or settlements operate independently, and will be considered separately, from riders or other cost recovery mechanisms otherwise allowed by law, unless otherwise incorporated.
Applies to any rate-making mechanisms, designs, plans, or settlements filed by a public utility on or after January 1, 2021.
Directs the Commission to adopt rules to govern use of alternate rate methodologies authorized under new GS 62-133A, as enacted, and details five requirements the Commission must comply with in the course of any rule making, including: (1) establishing an online portal for interested parties to sign up to receive notice of rule-making activities and for submittal of written comment; (2) publishing proposed rules online at least 30 business days prior to adoption, with notice of any public hearings; (3) accepting written comments on the proposed rules for at least 15 business days prior to adoption; (4) holding at least two public hearings on the proposed rules, with the first having 5 days' notice; and (5) soliciting input from 12 stakeholders, to the extent feasible.
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