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HF 3570

as introduced - 89th Legislature (2015 - 2016) Posted on 03/24/2016 02:24pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to energy; permitting rate-regulated cooperative associations to file for
an alternative regulatory review of general rate increase requests; proposing
coding for new law in Minnesota Statutes, chapter 216B.

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

Section 1.

new text begin [216B.1615] ELECTRIC COOPERATIVE ALTERNATIVE RATE
CASE PROCESS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms
have the meanings given them.
new text end

new text begin (b) "Base revenue" means the revenue generated by permanent rates and charges,
excluding revenue generated through (1) rider mechanisms, and (2) miscellaneous service
charges.
new text end

new text begin (c) "CFC" means the National Rural Utilities Cooperative Finance Corporation.
new text end

new text begin (d) "Rate structure change" means any of the following: (1) introduction of a new
rate schedule; (2) elimination of an existing rate schedule; (3) a change in base revenue
generated by any one rate class greater than 1.5 times the overall base revenue percent
increase; or (4) a change greater than 25 percent in the customer charge within a rate
schedule for residential customers.
new text end

new text begin (e) "RUS" means the United States Department of Agriculture, Rural Utilities
Service.
new text end

new text begin (f) "Test year" means a cooperative association's historic 12-month actual operating
results, adjusted for known and measurable changes.
new text end

new text begin Subd. 2. new text end

new text begin Eligibility. new text end

new text begin A cooperative association may propose and the commission
may approve a general rate application under this section, provided all of the following
eligibility criteria are met:
new text end

new text begin (1) the cooperative is subject to rate regulation by the commission through a member
vote under section 216B.026;
new text end

new text begin (2) the commission has issued a final determination, as defined in section 216B.16,
subdivision 2, regarding a rate change within the 180-month period immediately preceding
the filing of the cooperative's rate application;
new text end

new text begin (3) the commission's final determination in the cooperative's most recent general rate
case or alternative rate case process resulted in the cooperative receiving a minimum of 80
percent of its original revenue increase request;
new text end

new text begin (4) the cooperative has not filed a rate application under this section within the 12
months immediately preceding the filing of the cooperative's rate application;
new text end

new text begin (5) the cooperative is required by law or contract to make a certified annual financial
and statistical report to (i) a federal agency, including the RUS or the Federal Energy
Regulatory Commission, or (ii) an established national nonprofit lender that specializes
in the utility industry, including the CFC;
new text end

new text begin (6) the test year used in the cooperative's rate application complies with the
definition of a test year in subdivision 1;
new text end

new text begin (7) the cooperative's rate application includes audited financials for a period ending
no more than nine months before the beginning of the test year;
new text end

new text begin (8) the cooperative's rate application proposes an increase in total base revenue no
greater than six percent of the test year actual total base revenue;
new text end

new text begin (9) the cooperative's rate application proposes only a change in its monthly fixed
charges or volumetric charges, and does not include: (i) a change in an existing surcharge
or refund mechanism; (ii) adoption of a new surcharge or refund mechanism, unless
incorporating a charge or charges otherwise previously approved by the commission; or
(iii) adoption of a new connection or other fixed fee;
new text end

new text begin (10) the cooperative's rate application does not propose a rate structure change;
new text end

new text begin (11) the cooperative's rate application does not request consolidation with any other
docket; and
new text end

new text begin (12) the customer notice provided by the cooperative meets the requirements of
subdivision 4.
new text end

new text begin Subd. 3. new text end

new text begin Notice. new text end

new text begin A cooperative is prohibited from changing a rate that has been duly
established under this chapter, except upon 60 days' notice to the commission. The notice
for an application to change a rate under this subdivision must include the information in
subdivision 4, clause (5). The cooperative must also give written notice of the proposed
change to the governing body of each municipality and county in the area affected, and
must publish notice of the proposed change in newspapers of general circulation in all
county seats in its service area.
new text end

new text begin Subd. 4. new text end

new text begin Filing requirements. new text end

new text begin A cooperative filing for alternative rate review and
approval under this subdivision must provide:
new text end

new text begin (1) the name, address, and telephone number of the cooperative, without abbreviation;
new text end

new text begin (2) the name, address, and telephone number of the attorney for the cooperative, if
the cooperative is using an attorney;
new text end

new text begin (3) the date of the filing and the date the proposed rate change will go into effect;
new text end

new text begin (4) the signature and title of the utility employee responsible for the filing;
new text end

new text begin (5) a brief summary of the rate request, including sufficient detail to inform
potentially interested parties of its nature and general content;
new text end

new text begin (6) the information required under Minnesota Rules, parts 7825.3900 to 7829.4400,
as applicable for a cooperative;
new text end

new text begin (7) a copy of audited financials for the cooperative, for a period ending no earlier
than nine months before the beginning of the test year; and
new text end

new text begin (8) any additional information necessary for the commission to confirm the
eligibility of the cooperative for alternative review, as established under subdivision 2.
new text end

new text begin Subd. 5. new text end

new text begin Interim rates. new text end

new text begin If the cooperative rate application follows the alternative
procedure, interim rates up to 50 percent of the requested revenue increase must be
allowed and put into effect not later than 60 days after the rate application is filed. If the
commission fails to confirm that the application qualifies for the alternative rate case
process within 20 days after receipt of the application, the cooperative may implement
interim rates consistent with section 216B.16, subdivision 3.
new text end

new text begin Subd. 6. new text end

new text begin Eligibility and sufficiency review. new text end

new text begin Any person who objects to the
cooperative's rate application under this section must file an objection within 20 days of
the date of the application. The cooperative may reply within ten days of the date of an
objection. Within 30 days after the deadline for objections, the commission must determine
whether the cooperative is eligible and has met all applicable filing requirements. If the
commission determines the application is complete and the cooperative is eligible, the
application must be reviewed under subdivision 7.
new text end

new text begin Subd. 7. new text end

new text begin Review and report. new text end

new text begin Upon acceptance of an application by the commission,
the department must conduct a substantive review of the application and file its report and
recommendations within 90 days. The department review must consider the cooperative's
use of models and methodologies approved by the commission in prior general rate
case proceedings, and may request an extension of 30 days for the filing of its report if
necessary to fully review the application. Any interested party may also file comments
concurrently with the filing of the department report. The cooperative, the department,
and any interested person or party may file a response to the report within 15 days.
new text end

new text begin Subd. 8. new text end

new text begin Final decision. new text end

new text begin The commission must make its final decision regarding a
rate increase application under this section within 180 days of submission of a complete
application, unless the commission has granted a department extension request under
subdivision 7. If the commission has granted the department's extension request, the
commission must make its final determination within 210 days. The commission must
approve the cooperative's application unless it determines that the resulting rates would be
unjust and unreasonable. If the rates are deemed unjust and unreasonable, the commission
must determine the rates the cooperative may charge for the service or services in question.
new text end