SF 1628

as introduced - 88th Legislature (2013 - 2014) Posted on 04/24/2013 08:33am

A bill for an act
relating to energy; requiring a public utility to file a mechanism to decouple its
revenues from its energy sales; requiring reports; amending Minnesota Statutes
2012, section 216B.16, by adding a subdivision; repealing Minnesota Statutes
2012, section 216B.2412.

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

Section 1. new text begin TITLE.
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new text begin This act may be cited as the "Aligning Utility Incentives to Save Energy Act."
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
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Sec. 2.

Minnesota Statutes 2012, section 216B.16, is amended by adding a subdivision
to read:

new text begin Subd. 6e. new text end

new text begin Revenue decoupling. new text end

new text begin (a) The purpose of this subdivision is to:
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new text begin (1) require public utilities to propose mechanisms governing the decoupling of utility
sales and revenue that adjusts rates upward and downward in the period between general
rate cases so that a utility collects the amount of revenue authorized by the commission;
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new text begin (2) align a utility's financial incentives with the interest of its customers in using
energy more efficiently;
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new text begin (3) encourage utility investment in infrastructure;
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new text begin (4) promote utility investment in least-cost resources that will reduce long-term
energy demand; and
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new text begin (5) increase system reliability.
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new text begin (b) Each public utility must include in its general rate filings a mechanism to
decouple utility revenues from utility sales volumes. At a minimum, the mechanism must:
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new text begin (1) ensure that a utility recovers all reasonable and prudent utility costs of service;
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new text begin (2) periodically fully reconcile utility revenues that are both below and above the
most recent revenue requirement approved by the commission;
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new text begin (3) minimize the proportion of utility revenue that is recovered in fixed charges that
do not vary with the volume of energy sales; and
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new text begin (4) sustain and enhance utility customer incentives to use energy more efficiently.
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new text begin (c) In considering a decoupling mechanism, the commission must consider, among
other factors:
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new text begin (1) how and when rate adjustments are to be calculated;
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new text begin (2) how rate adjustments will be displayed on a customer's bill;
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new text begin (3) how a decoupling mechanism will work in concert with automatic cost recovery
mechanisms;
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new text begin (4) the impact of decoupling on rates, particularly on the rates of low-income utility
customers;
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new text begin (5) the need for any mechanism to mitigate the risk of rate shock as a result of
implementing decoupling; and
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new text begin (6) whether the sales and revenues attributable to large customer facilities should be
excluded from the decoupling mechanism.
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new text begin (d) The commission may approve, modify, or reject a proposed decoupling
mechanism.
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new text begin (e) Each utility shall, two years after implementation of a decoupling mechanism
and every two years thereafter, file a report with the commission that documents the
impact of decoupling on the utility's operations and its ratepayers, including impacts on:
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new text begin (1) utility revenues;
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new text begin (2) revenue stability;
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new text begin (3) customer rates;
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new text begin (4) the utility's cost of capital;
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new text begin (5) the utility's level of conservation spending under section 216B.241; and
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new text begin (6) the utility's level of investment in utility infrastructure.
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new text begin (f) By January 1, 2016, and every other January 1 thereafter, the commission shall
submit a report to the chairs and ranking minority members of the legislative committees
with jurisdiction over energy policy summarizing the information contained in the reports
on decoupling of the individual utilities filed with the commission under paragraph (e).
The report may contain recommendations for legislative or other changes to improve
the operation of a decoupling mechanism.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
for a general rate filing occurring on and after that date.
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Sec. 3. new text begin PILOT PROGRAMS.
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new text begin Any pilot program approved by the commission under Minnesota Statutes, section
216B.2412, that is operating on the effective date of this act may continue to operate
until its original termination date.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
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Sec. 4. new text begin REPEALER.
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new text begin Minnesota Statutes 2012, section 216B.2412, new text end new text begin is repealed.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
Decoupling plans in effect on the effective date may continue in effect until the end of
the term of the plan.
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