HF 3493

as introduced - 86th Legislature (2009 - 2010) Posted on 03/08/2010 10:04am

A bill for an act
relating to utilities; regulating rates charged to low-income customers; providing
for inverted block rates; amending Minnesota Statutes 2008, sections 216B.03;
216B.16, subdivisions 14, 15.

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

Section 1.

Minnesota Statutes 2008, section 216B.03, is amended to read:

216B.03 REASONABLE RATE.

Every rate made, demanded, or received by any public utility, or by any two or
more public utilities jointly, shall be just and reasonable. Rates shall not be unreasonably
preferential, unreasonably prejudicial, or discriminatory, but shall be sufficient, equitable,
and consistent in application to a class of consumers. To the maximum reasonable extent,
the commission shall set rates new text begin , including inverted block rates in which lower energy
prices are made available to lower usage customers, new text end to encourage energy conservation
and renewable energy use and to further the goals of sections 216B.164, 216B.241, and
216C.05. Any doubt as to reasonableness should be resolved in favor of the consumer.
For rate making purposes a public utility may treat two or more municipalities served by
it as a single class wherever the populations are comparable in size or the conditions of
service are similar.

Sec. 2.

Minnesota Statutes 2008, section 216B.16, subdivision 14, is amended to read:

Subd. 14.

Low-income electric rate discount.

A public utility shall fund an
affordability program for low-income customers in an amount based on a 50 percent
electric rate discount on the first deleted text begin 300 deleted text end new text begin 400 new text end kilowatt-hours consumed in a billing period for
low-income residential customers of the utility. For the purposes of this subdivision,
"low-income" describes a customer who is receiving assistance from the federal
low-income home energy assistance program. The affordability program must be designed
to target participating customers with the lowest incomes and highest energy costs in order
to lower the percentage of income they devote to energy bills, increase their payments,
and lower costs associated with collection activities on their accounts. For low-income
customers who are 62 years of age or older or disabled, the program must, in addition to
any other program benefits, include a 50 percent electric rate discount on the first deleted text begin 300 deleted text end new text begin 400 new text end
kilowatt-hours consumed in a billing period. For the purposes of this subdivision, "public
utility" includes only those public utilities with more than 200,000 residential electric
service customers. The commission may issue orders necessary to implement, administer,
and recover the costs of the program on a timely basis.

Sec. 3.

Minnesota Statutes 2008, section 216B.16, subdivision 15, is amended to read:

Subd. 15.

Low-income affordability programs.

(a) The commission must
consider ability to pay as a factor in setting utility rates and may establish affordability
programs for low-income residential ratepayers in order to ensure affordable, reliable,
and continuous service to low-income utility customers. new text begin Affordability programs may
include inverted block rates in which lower energy prices are made available to lower
usage customers. new text end By September 1, 2007, a public utility serving low-income residential
ratepayers who use natural gas for heating must file an affordability program with the
commission. For purposes of this subdivision, "low-income residential ratepayers" means
ratepayers who receive energy assistance from the low-income home energy assistance
program (LIHEAP).

(b) Any affordability program the commission orders a utility to implement must:

(1) lower the percentage of income that participating low-income households devote
to energy bills;

(2) increase participating customer payments over time by increasing the frequency
of payments;

(3) decrease or eliminate participating customer arrears;

(4) lower the utility costs associated with customer account collection activities; and

(5) coordinate the program with other available low-income bill payment assistance
and conservation resources.

(c) In ordering affordability programs, the commission may require public utilities to
file program evaluations that measure the effect of the affordability program on:

(1) the percentage of income that participating households devote to energy bills;

(2) service disconnections; and

(3) frequency of customer payments, utility collection costs, arrearages, and bad
debt.

(d) The commission must issue orders necessary to implement, administer, and
evaluate affordability programs, and to allow a utility to recover program costs, including
administrative costs, on a timely basis. The commission may not allow a utility to recover
administrative costs, excluding start-up costs, in excess of five percent of total program
costs, or program evaluation costs in excess of two percent of total program costs. The
commission must permit deferred accounting, with carrying costs, for recovery of program
costs incurred during the period between general rate cases.

(e) Public utilities may use information collected or created for the purpose of
administering energy assistance to administer affordability programs.