Minnesota Session Laws - 1987, Regular Session

  

                         Laws of Minnesota 1987 

                        CHAPTER 371-H.F.No. 1127 
           An act relating to utilities; providing for the 
          establishment of flexible gas utility rates for 
          certain customers subject to effective competition; 
          requiring the department of public service to conduct 
          a study; appropriating money; proposing coding for new 
          law in Minnesota Statutes, chapter 216B. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  [216B.163] [FLEXIBLE TARIFFS.] 
    Subdivision 1.  [DEFINITIONS.] (a) For the purposes of this 
section, the terms defined in this subdivision have the meanings 
given them.  
    (b) "Effective competition" means that a customer of a gas 
utility who either receives interruptible service or whose daily 
requirement exceeds 50,000 cubic feet maintains or plans on 
acquiring the capability to switch to the same, equivalent or 
substitutable energy supplies or service, except indigenous 
biomass energy supplies composed of wood products, grain, 
biowaste, and cellulosic materials, at comparable prices from a 
supplier not regulated by the commission. 
    (c) "Flexible tariff" means a rate schedule under which a 
gas utility may set or change the price for its service to an 
individual customer or group of customers without prior approval 
of the commission within a range of prices determined by the 
commission to be just and reasonable. 
    Subd. 2.  [FLEXIBLE TARIFFS PERMITTED.] Notwithstanding any 
other provision of this chapter, the commission is authorized to 
approve a flexible tariff for any class of customers of a gas 
utility when provision of service, including the sale or 
transportation of gas, to any customers within the class is 
subject to effective competition.  Upon application of a gas 
utility, the commission shall find that effective competition 
exists for a class of customers taking interruptible service at 
a level exceeding 199,000 cubic feet per day.  A gas utility may 
only apply a flexible tariff to a customer that is subject to 
effective competition and a gas utility may not apply a flexible 
tariff or otherwise reduce its rates to compete with indigenous 
biomass energy supplies, or with customers of district heating 
facilities as of June 1, 1987.  A customer subject to effective 
competition may elect to take service either under the flexible 
tariff or under the appropriate nonflexible tariff for that 
class of service set in accordance with section 216B.03, 
provided that a customer that uses an alternative energy supply 
or service other than indigenous biomass energy supplies from a 
supplier not regulated by the commission for reasons of price 
shall be deemed to have elected to take service under the 
flexible tariff. 
    Subd. 3.  [ESTABLISHING OR CHANGING A FLEXIBLE TARIFF.] The 
commission may establish a flexible tariff through a 
miscellaneous rate filing only if the filing does not seek to 
recover any revenues which the utility expects to lose by 
implementing flexible tariffs from any customers who do not take 
service under the flexible tariff, nor to change any other 
rates.  If a gas utility requests authority to establish a 
flexible tariff and as part of that request seeks to recover any 
revenues which the utility expects to lose by implementing 
flexible tariffs from any customers who do not take service 
under the flexible tariff or to change any other rates the 
commission may only establish that flexible tariff within a 
general rate case for that gas utility.  The commission may only 
change the rates in a flexible tariff within a gas utility's 
general rate case. 
    Subd. 4.  [RATES AND TERMS OF SERVICE.] Whenever the 
commission authorizes a flexible tariff, it shall set the terms, 
and conditions of service for that tariff, which shall include:  
    (1) that the minimum rate for the tariff recover at least 
the incremental cost of providing the service; 
    (2) that there is no upward maximum for the rate; 
    (3) that a customer who elects to take service under the 
flexible tariff remain on that tariff for a reasonable period of 
time, which shall not be less than one year; and 
    (4) that any customer changing from a flexible tariff to 
the appropriate nonflexible tariff for that class pay all costs 
incurred by the utility due to that change.  
    Subd. 5.  [RECOVERY OF REVENUES.] In a general rate case 
which establishes a flexible tariff for a gas utility, and in 
each general rate case of a gas utility for which a flexible 
tariff has been authorized, the commission shall determine a 
projected level of revenues and expenses from services under 
that tariff based on a single target rate for all sales under 
that tariff, which projection shall be used to determine the 
utility's overall rates.  That target rate used to establish a 
level of projected revenues shall not limit the gas utility's 
ability or right to set rates for any customer taking service 
under the flexible tariff. 
    Subd. 6.  [INTERIM FLEXIBLE TARIFF.] Notwithstanding 
section 216B.16, subdivision 3, if a gas utility files with the 
commission to establish or change a flexible tariff the 
commission shall permit the proposed flexible tariff to take 
effect on an interim basis no later than 30 days after filing.  
If any customers receive an increase in rates during the period 
that an interim flexible tariff is in effect, the increase is 
subject to refund as provided in section 216B.16, subdivision 
3.  The gas utility shall provide ten days written notice, or 
other notice as may be established by contract not to exceed 30 
days, to a customer before implementing an interim rate increase 
for that customer under this section.  
    Subd. 7.  [FINAL DETERMINATION.] The commission shall make 
a final determination in a proceeding begun under this section 
for approval of a flexible tariff, other than a filing made 
within a general rate case, within 180 days of the filing by the 
gas utility. 
    Sec. 2.  [STUDY.] 
    The department of public service shall review the operation 
and effects of all gas utility flexible tariffs approved under 
section 1, and shall report to the legislature by February 1, 
1990.  Gas utilities that utilize a flexible tariff under 
section 1 shall be assessed for the actual cost of conducting 
the study not to exceed $10,000.  Each utility utilizing a 
flexible tariff shall be assessed for an equal share of the 
costs.  
     Sec. 3.  [APPROPRIATION.] 
    There is appropriated from the general fund the sum of 
$10,000 to the department of public service for the purpose of 
conducting the study required in section 2. 
    Sec. 4.  [EFFECTIVE DATE.] 
    Sections 1 to 3 are effective the day following final 
enactment, and are repealed effective July 1, 1990. 
    Approved June 2, 1987