SF 1263

as introduced - 89th Legislature (2015 - 2016) Posted on 09/09/2015 01:43pm

A bill for an act
relating to energy; allowing public utility commission approval for rate recovery
for natural gas extension projects; 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.1638] RECOVERY OF NATURAL GAS EXTENSION
PROJECT COSTS.
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 terms defined in
this subdivision have the meanings given them.
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new text begin (b) "Contribution in aid of construction" means a monetary contribution, paid by
a developer or local unit of government to a utility providing natural gas service to a
community receiving that service as the result of a natural gas extension project, that
reduces or offsets the difference between the total revenue requirement of the project and
the revenue generated from the customers served by the project.
new text end

new text begin (c) "Developer" means a developer of the project or a person that owns or will own
the property served by the project.
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new text begin (d) "Local unit of government" means a city, county, township, commission, district,
authority, or other political subdivision or instrumentality of this state.
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new text begin (e) "Natural gas extension project" or "project" means the construction of new
infrastructure or upgrades to existing natural gas facilities necessary to serve currently
unserved or inadequately served areas.
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new text begin (f) "Revenue deficiency" means the deficiency in funds that results when projected
revenues from customers receiving natural gas service as the result of a natural gas
extension project, plus any contributions in aid of construction paid by these customers,
fall short of the total revenue requirement of the natural gas extension project.
new text end

new text begin (g) "Total revenue requirement" means the total cost of extending and maintaining
service to a currently unserved or inadequately served area.
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new text begin (h) "Unserved or inadequately served area" means an area in this state lacking
adequate natural gas pipeline infrastructure to meet the demand of existing or potential
end-use customers.
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new text begin Subd. 2. new text end

new text begin Filing. new text end

new text begin (a) A public utility may petition the commission outside of a
general rate case for a rider on all of the utility's customers, including transport customers,
to recover the revenue deficiency from a natural gas extension project.
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new text begin (b) The petition shall include:
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new text begin (1) a description of the natural gas extension project, including the number and
location of new customers to be served and the distance over which natural gas will be
distributed to serve the unserved or inadequately served area;
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new text begin (2) the project's construction schedule;
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new text begin (3) the proposed project budget;
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new text begin (4) the amount of any contributions in aid of construction;
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new text begin (5) a description of efforts made by the public utility to offset the revenue deficiency
through contributions in aid to construction;
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new text begin (6) the proposed method and amount of recovery by customer class and whether
the utility is proposing that the rider be a flat fee, a volumetric charge, or another form of
recovery;
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new text begin (7) how recovery of the revenue deficiency will be allocated between industrial,
commercial, residential, and transport customers;
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new text begin (8) the proposed termination date of the rider to recover the revenue deficiency; and
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new text begin (9) a description of benefits to the public utility's existing natural gas customers that
will accrue from the natural gas extension project.
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new text begin Subd. 3. new text end

new text begin Review; approval. new text end

new text begin (a) The commission shall allow opportunity for
comment on the petition.
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new text begin (b) The commission shall approve a public utility's petition for a rider to recover the
costs of a natural gas extension project if it determines that:
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new text begin (1) the project is designed to extend natural gas service to an unserved or
inadequately served area; and
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new text begin (2) project costs are reasonable and prudently incurred.
new text end

new text begin (c) The commission must not approve a rider under this section that allows a utility
to recover more than 25 percent of the costs of a natural gas extension project.
new text end

new text begin (d) The revenue deficiency from a natural gas extension project recoverable through
a rider under this section must include the currently authorized rate of return, incremental
income taxes, incremental property taxes, incremental depreciation expenses, and any
incremental operation and maintenance costs.
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new text begin Subd. 4. new text end

new text begin Commission authority; order. new text end

new text begin The commission may issue orders
necessary to implement and administer this section.
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new text begin Subd. 5. new text end

new text begin Implementation. new text end

new text begin Nothing in this section commits a public utility to
implement a project approved by the commission. The public utility seeking to provide
natural gas service shall notify the commission whether it intends to proceed with the
project as approved by the commission. The public utility may adjust the construction
schedule set forth in its petition under subdivision 2, paragraph (b), clause (2), based on the
utility's business judgment and without obtaining any further order from the commission.
new text end

new text begin EFFECTIVE DATE. new text end

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