HF 1015

as introduced - 88th Legislature (2013 - 2014) Posted on 02/28/2013 11:36am

A bill for an act
relating to energy; regulating the recovery of certain gas utility infrastructure
costs; amending Minnesota Statutes 2012, section 216B.1635.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2012, section 216B.1635, is amended to read:

216B.1635 RECOVERY OF GAS UTILITY INFRASTRUCTURE COSTS.

Subdivision 1.

Definitions.

(a) "Gas utility" means a public utility as defined in
section 216B.02, subdivision 4, that furnishes natural gas service to retail customers.

(b) "Gas utility infrastructure costs" or "GUIC" means new text begin costs incurred in new text end gas utility
projects that:

(1) do not serve to increase revenues by directly connecting the infrastructure
replacement to new customers;

(2) are in service deleted text begin but were not included in the gas utility's rate base in its most recent
general rate case; and deleted text end new text begin or planned to be in service during the period covered by the report
submitted in accordance with subdivision 2; and
new text end

(3) deleted text begin replace or modify existing infrastructure if the replacement or modification does
not constitute a betterment, unless the betterment is required by a political subdivision,
as evidenced by specific documentation from the government entity requiring the
replacement or modification of infrastructure deleted text end new text begin do not constitute a betterment, unless
the betterment is based on requirements by a political subdivision or federal or state
regulation, as evidenced by specific documentation or regulation from the government
entity requiring the replacement or modification of infrastructure new text end .

(c) "Gas utility projects" means deleted text begin relocation and deleted text end new text begin :
new text end

new text begin (1) new text end replacement of natural gas facilities located in the public right-of-way required
by the construction or improvement of a highway, road, street, public building, or other
public work by or on behalf of the United States, the state of Minnesota, or a political
subdivision deleted text begin . deleted text end new text begin ; and
new text end

new text begin (2) replacement or modification of existing natural gas facilities, including surveys,
assessments, reassessment, and other work necessary to determine the need for replacement
or modification of existing infrastructure that is required by federal or state regulation.
new text end

Subd. 2.

new text begin Gas infrastructure new text end filing.

deleted text begin (a) The commission may approve a gas utility's
petition for a rate schedule deleted text end new text begin A public utility submitting a petition new text end to recover deleted text begin GUIC deleted text end new text begin gas
infrastructure costs new text end under this section deleted text begin . A gas utility may deleted text end new text begin must submit to the commission, the
department, the Office of Pipeline Safety, and interested parties a gas infrastructure project
plan report and a new text end petition deleted text begin the commission to recover a rate of return, income taxes on the
rate of return, incremental property taxes, plus incremental depreciation expense associated
with GUIC deleted text end new text begin for rate recovery. new text end new text begin The report and petition must be made at least 150 days in
advance of implementation of the rate schedule, provided that the rate schedule will not be
implemented until the petition is approved by the commission pursuant to subdivision 6 new text end .

deleted text begin (b) The filing is subject to the following:
deleted text end

deleted text begin (1) A gas utility may submit a filing under this section no more than once per year.
deleted text end

deleted text begin (2) A gas utility must file sufficient information to satisfy the commission regarding
the proposed GUIC or be subject to denial by the commission. The information includes,
but is not limited to:
deleted text end

deleted text begin (i) the government entity ordering the gas utility project and the purpose for which
the project is undertaken;
deleted text end

deleted text begin (ii) the location, description, and costs associated with the project;
deleted text end

deleted text begin (iii) a description of the costs, and salvage value, if any, associated with the existing
infrastructure replaced or modified as a result of the project;
deleted text end

deleted text begin (iv) the proposed rate design and an explanation of why the proposed rate design
is in the public interest;
deleted text end

deleted text begin (v) the magnitude and timing of any known future gas utility projects that the utility
may seek to recover under this section;
deleted text end

deleted text begin (vi) the magnitude of GUIC in relation to the gas utility's base revenue as approved
by the commission in the gas utility's most recent general rate case, exclusive of gas
purchase costs and transportation charges;
deleted text end

deleted text begin (vii) the magnitude of GUIC in relation to the gas utility's capital expenditures since
its most recent general rate case;
deleted text end

deleted text begin (viii) the amount of time since the utility last filed a general rate case and the utility's
reasons for seeking recovery outside of a general rate case; and
deleted text end

deleted text begin (ix) documentation supporting the calculation of the GUIC.
deleted text end

new text begin Subd. 3. new text end

new text begin Gas infrastructure project plan report. new text end

new text begin The gas infrastructure project
plan report required to be filed under subdivision 2 shall include all pertinent information
and supporting data on each proposed project including, but not limited to, project
description and scope, estimated project costs, and project in-service date.
new text end

new text begin Subd. 4. new text end

new text begin Gas infrastructure project plan report review. new text end

new text begin The Office of Pipeline
Safety shall evaluate the gas utility's report filed under subdivision 3 and, within 60 days
of the filing, provide the commission with:
new text end

new text begin (1) verification that a gas utility project associated with federal or state regulations
complies with subdivision 1, paragraph (c), clause (2); and
new text end

new text begin (2) an assessment of the appropriateness of the gas utility's proposed plans.
new text end

new text begin Subd. 5. new text end

new text begin Cost recovery petition for utility's facilities. new text end

new text begin Notwithstanding any other
provision of this chapter, the commission may approve a rate schedule for the automatic
annual adjustment of charges for gas utility infrastructure costs under this section,
including a rate of return, income taxes on the rate of return, incremental property taxes,
incremental depreciation expense, and incremental operation and maintenance costs. A
gas utility's petition for approval of a rate schedule to recover gas utility infrastructure
costs outside of a general rate case under section 216B.16, is subject to the following:
new text end

new text begin (1) a gas utility may submit a filing under this section no more than once per year; and
new text end

new text begin (2) a gas utility must file sufficient information to satisfy the commission regarding
the proposed GUIC. The information includes, but is not limited to:
new text end

new text begin (i) the information required to be included in the gas infrastructure project plan
report under subdivision 3;
new text end

new text begin (ii) the government entity ordering the gas utility project and the purpose for which
the project is undertaken, or the federal or state regulations causing the project;
new text end

new text begin (iii) a description of the estimated costs, and salvage value, if any, associated with
the existing infrastructure replaced or modified as a result of the project;
new text end

new text begin (iv) a comparison of the utility's estimated costs included in the gas infrastructure
project plan and the actual costs incurred, including a description of the utility's efforts to
ensure the costs of the facilities are reasonable and were or will be prudently incurred;
new text end

new text begin (v) calculations to establish that the rate adjustment is consistent with the terms
of the rate schedule, including the proposed rate design and an explanation of why the
proposed rate design is in the public interest;
new text end

new text begin (vi) the magnitude and timing of any known future gas utility projects that the
utility may seek to recover under this section;
new text end

new text begin (vii) the magnitude of GUIC in relation to the gas utility's base revenue as approved
by the commission in the gas utility's most recent general rate case, exclusive of gas
purchase costs and transportation charges;
new text end

new text begin (viii) the magnitude of GUIC in relation to the gas utility's capital expenditures
since its most recent general rate case; and
new text end

new text begin (ix) the amount of time since the utility last filed a general rate case and the utility's
reasons for seeking recovery outside of a general rate case.
new text end

new text begin Subd. 6. new text end

new text begin Commission action. new text end

new text begin Upon receiving a gas utility report and petition for
cost recovery under subdivision 2 and assessment and verification under subdivision 4,
the commission shall approve the annual GUIC rate adjustments provided that, after
notice and comment, the costs included for recovery through the rate schedule were or are
expected to be prudently incurred and achieve gas facility improvements at the lowest
reasonable and prudent cost to ratepayers.
new text end

Subd. deleted text begin 3 deleted text end new text begin 7 new text end .

Commission authority; rules.

The commission may issue orders and
adopt rules necessary to implement and administer this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end