HF 2798

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 11:32pm

A bill for an act
relating to public utilities; revising process and standard for approval of interim
rates; requiring disclosure of public utility's travel, entertainment, and related
expenses included in rate change request; amending Minnesota Statutes 2008,
section 216B.16, subdivision 3, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2008, section 216B.16, subdivision 3, is amended to read:

Subd. 3.

Interim rate.

(a) Notwithstanding any order of suspension of a proposed
increase in rates, the commission deleted text begin shall deleted text end new text begin may new text end order an interim rate schedule into effect not
later than 60 days after the initial filing date. deleted text begin The commission shall order the interim
rate schedule ex parte without a public hearing. deleted text end new text begin An interim rate schedule may only be
authorized upon a finding that an immediate and compelling necessity exists for an interim
rate increase. new text end Notwithstanding the provisions of sections 216.25, 216B.27, and 216B.52,
no interim rate schedule ordered by the commission pursuant to this subdivision shall be
subject to an application for a rehearing or an appeal to a court until the commission has
rendered its final determination.

(b) deleted text begin Unless the commission finds that exigent circumstances exist, the interim rate
schedule shall be calculated using the proposed test year cost of capital, rate base, and
expenses, except that it shall deleted text end new text begin If the commission finds that interim rate relief is necessary,
the commission may authorize an interim rate schedule under which the utility's revenues
will be increased by an amount deemed necessary to prevent injury to the public or utility,
not exceeding the amount requested by the utility. Any authorized interim rate schedule
may new text end include:

(1) a rate of return on common equity for the utility deleted text begin equal to deleted text end new text begin no more than new text end that
authorized by the commission in the utility's most recent rate proceeding;

(2) rate base or expense items the same in nature and kind as those allowed by a
currently effective order of the commission in the utility's most recent rate proceeding; and

(3) no change in the existing rate design.

In the case of a utility which has not been subject to a prior commission determination,
the commission shall base deleted text begin the deleted text end new text begin any new text end interim rate schedule on its most recent determination
concerning a similar utility.

(c) If, at the time of its final determination, the commission finds that deleted text begin the deleted text end new text begin any
authorized new text end interim rates are in excess of the rates in the final determination, the
commission shall order the utility to refund the excess amount collected under the interim
rate schedule, including interest on it which shall be at the rate of interest determined by
the commission. The utility shall commence distribution of the refund to its customers
within 120 days of the final order, not subject to rehearing or appeal. If, at the time of its
final determination, the commission finds that the interim rates are less than the rates in
the final determination, the commission shall prescribe a method by which the utility will
recover the difference in revenues between the date of the final determination and the date
the new rate schedules are put into effect. In addition, when an extension is granted for
settlement discussions under subdivision 1a, the commission shall allow the utility to also
recover the difference in revenues for a length of time equal to the length of the extension.

(d) If the public utility fails to make refunds within the period of time prescribed
by the commission, the commission shall sue therefor and may recover on behalf of all
persons entitled to a refund. In addition to the amount of the refund and interest due,
the commission shall be entitled to recover reasonable attorney's fees, court costs and
estimated cost of administering the distribution of the refund to persons entitled to it. No
suit under this subdivision shall be maintained unless instituted within two years after the
end of the period of time prescribed by the commission for repayment of refunds.

(e) The commission shall not order an interim rate schedule in a general rate case
into effect as provided by this subdivision until at least four months after it has made a
final determination concerning any previously filed change of the rate schedule or the
change has otherwise become effective under subdivision 2, unless:

(1) the commission finds that a four-month delay would unreasonably burden the
utility, its customers, or its shareholders and that an earlier imposition of interim rates
is therefore necessary; or

(2) the utility files a second general rate case at least 12 months after it has filed a
previous general rate case for which the commission has extended the suspension period
under subdivision 2.

Sec. 2.

Minnesota Statutes 2008, section 216B.16, is amended by adding a subdivision
to read:

new text begin Subd. 17. new text end

new text begin Travel, entertainment, and related employee expenses. new text end

new text begin (a) The
commission may not allow as operating expenses a public utility's travel, entertainment,
and related employee expenses that the commission deems unreasonable and unnecessary
for the provision of utility service. In order to assist the commission in evaluating the
travel, entertainment, and related employee expenses that may be allowed for ratemaking
purposes, a public utility filing a general rate case petition shall include a schedule
separately itemizing all travel, entertainment, and related employee expenses as specified
by the commission, including but not limited to the following categories:
new text end

new text begin (1) travel and lodging expenses;
new text end

new text begin (2) food and beverage expenses;
new text end

new text begin (3) recreational and entertainment expenses;
new text end

new text begin (4) board of director-related expenses, including and separately itemizing all
compensation and expense reimbursements;
new text end

new text begin (5) expenses for the ten highest paid officers and employees, including and
separately itemizing all compensation and expense reimbursements;
new text end

new text begin (6) dues and expenses for memberships in organizations or clubs;
new text end

new text begin (7) gift expenses;
new text end

new text begin (8) expenses related to owned, leased, or chartered aircraft; and
new text end

new text begin (9) lobbying expenses.
new text end

new text begin (b) To comply with the requirements of paragraph (a), each applicable expense
incurred in the two most recent fiscal years must be itemized separately, and each
itemization must include the date of the expense, the amount of the expense, the vendor
name, and the business purpose of the expense. The petitioning utility shall also provide
a one-page summary of the total amounts for each expense category included in the
petitioning utility's proposed test year.
new text end

new text begin (c) All travel, entertainment, and related employee expenses provided by a public
utility for ratemaking purposes as set forth in paragraphs (a) and (b) are to be construed as
public data that does not meet the definition of nonpublic data or trade secret information
under section 13.37, nor is it privileged data under rules of privilege recognized by law.
new text end