Minnesota Session Laws - 1988, Regular Session

  

                         Laws of Minnesota 1988 

                        CHAPTER 457-H.F.No. 2020 
           An act relating to utilities; encouraging settlements 
          prior to contested case hearings; authorizing the 
          public utilities commission to extend suspended rates 
          during multiple general rate filings; providing for 
          imposition of interim rates when commission extends 
          suspended rates; amending Minnesota Statutes 1986, 
          sections 216B.16, subdivisions 1a, 2, and 3; and 
          237.075, subdivisions 2 and 3. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1986, section 216B.16, 
subdivision 1a, is amended to read:  
    Subd. 1a.  [SETTLEMENT BARRED.] When a public utility 
proposes changes in general rates that would increase general 
rates paid by consumers, the commission may approve the change 
without a contested case hearing if applicant and all 
intervening parties agree to a stipulated settlement of the case 
and the settlement is supported by substantial evidence submits 
a general rate filing, the office of administrative hearings, 
before conducting a contested case hearing, shall convene a 
settlement conference including all of the parties for the 
purpose of encouraging settlement of any or all of the issues in 
the contested case.  If a stipulated settlement is not reached 
before the contested case hearing, the office of administrative 
hearings may reconvene the settlement conference during or after 
completion of the contested case hearing at its discretion or a 
party's request.  If the applicant and all intervening parties 
agree to a stipulated settlement of the case or parts of the 
case, the settlement must be submitted to the commission.  The 
commission shall accept or reject the settlement in its entirety 
and, at any time until its final order is issued in the case, 
may require the office of administrative hearings to conduct a 
contested case hearing.  The commission may accept the 
settlement on finding that to do so is in the public interest 
and is supported by substantial evidence.  If the commission 
does not accept the settlement, it may issue an order modifying 
the settlement subject to the approval of the parties.  Each 
party shall have ten days in which to reject the proposed 
modification.  If no party rejects the proposed modification, 
the commission's order becomes final.  If the commission rejects 
the settlement, or a party rejects the commission's proposed 
modification, a contested case hearing must be completed. 
    Sec. 2.  Minnesota Statutes 1986, section 216B.16, 
subdivision 2, is amended to read: 
    Subd. 2.  [SUSPENSION OF RATES; HEARING.] (a) Whenever 
there is filed with the commission a schedule modifying or 
resulting in a change in any rates then in force as provided in 
subdivision 1, the commission may suspend the operation of the 
schedule by filing with the schedule of rates and delivering to 
the affected utility a statement in writing of its reasons for 
the suspension at any time before the rates become effective.  
The suspension shall not be for a longer period than ten months 
beyond the initial filing date except as provided in paragraph 
(b).  During the suspension the commission shall determine 
whether all questions of the reasonableness of the rates 
requested raised by persons deemed interested or by the 
administrative division of the department of public service can 
be resolved to the satisfaction of the commission.  If the 
commission finds that all significant issues raised have not 
been resolved to its satisfaction, or upon petition by ten 
percent of the affected customers or 250 affected customers, 
whichever is less, it shall refer the matter to the office of 
administrative hearings with instructions for a public hearing 
as a contested case pursuant to chapter 14, except as otherwise 
provided in this section.  The commission may order that the 
issues presented by the proposed rate changes be bifurcated into 
two separate hearings as follows:  (1) determination of the 
utility's revenue requirements and (2) determination of the rate 
design.  Upon issuance of both hearing examiner administrative 
law judge reports, the issues shall again be joined for 
consideration and final determination by the commission.  All 
prehearing discovery activities of state agency intervenors 
shall be consolidated and conducted by the department of public 
service.  If the commission does not make a final determination 
concerning a schedule of rates within ten months after the 
initial filing date, the schedule shall be deemed to have been 
approved by the commission; except if a settlement has been 
submitted to and rejected by the commission, the schedule is 
deemed to have been approved 12 months after the initial filing. 
    (b) If the commission finds that it has insufficient time 
during the suspension period to make a final determination of a 
case involving changes in general rates because of the need to 
make final determinations of other previously filed cases 
involving changes in general rates under this section or section 
237.075, the commission may extend the suspension period to the 
extent necessary to allow itself 20 working days to make the 
final determination after it has made final determinations in 
the previously filed cases.  An extension of the suspension 
period under this paragraph does not alter the setting of 
interim rates under subdivision 3. 
    (c) For the purposes of this section, "final determination" 
means the initial decision of the commission and not any order 
which may be entered by the commission in response to a petition 
for rehearing or other further relief.  The commission may 
further suspend rates until it determines all those petitions. 
    Sec. 3.  Minnesota Statutes 1986, section 216B.16, 
subdivision 3, is amended to read: 
    Subd. 3.  [INTERIM RATES.] Notwithstanding any order of 
suspension of a proposed increase in rates, the commission shall 
order an interim rate schedule into effect not later than 60 
days after the initial filing date.  The commission shall order 
the interim rate schedule ex parte without a public hearing.  
Notwithstanding the provisions of sections 216.25, 216B.27 and 
216B.52, no interim rate schedule ordered by the commission 
pursuant to this subdivision shall be subject to an application 
for a rehearing or an appeal to a court until the commission has 
rendered its final determination.  Unless the commission finds 
that exigent circumstances exist, the interim rate schedule 
shall be calculated using the proposed test year cost of 
capital, rate base, and expenses, except that it shall include:  
(1) a rate of return on common equity for the utility equal to 
that authorized by the commission in the utility's most recent 
rate proceeding; (2) rate base or expense items the same in 
nature and kind as those allowed by a currently effective order 
of the commission in the utility's most recent rate proceeding; 
and (3) no change in the existing rate design.  In the case of a 
utility which has not been subject to a prior commission 
determination, the commission shall base the interim rate 
schedule on its most recent determination concerning a similar 
utility.  
    If, at the time of its final determination, the commission 
finds that the interim rates are in excess of the rates in the 
final determination, the commission shall order the utility to 
refund the excess amount collected under the interim rate 
schedule, including interest on it which shall be at the rate of 
interest determined by the commission.  The utility shall 
commence distribution of the refund to its customers within 120 
days of the final order, not subject to rehearing or appeal.  
If, at the time of its final determination, the commission finds 
that the interim rates are less than the rates in the final 
determination, the commission shall prescribe a method by which 
the utility will recover the difference in revenues from the 
date of the final determination to the date the new rate 
schedules are put into effect.  
    If the public utility fails to make refunds within the 
period of time prescribed by the commission, the commission 
shall sue therefor and may recover on behalf of all persons 
entitled to a refund.  In addition to the amount of the refund 
and interest due, the commission shall be entitled to recover 
reasonable attorney's fees, court costs and estimated cost of 
administering the distribution of the refund to persons entitled 
to it.  No suit under this subdivision shall be maintained 
unless instituted within two years after the end of the period 
of time prescribed by the commission for repayment of refunds.  
The commission shall not order an interim rate schedule in a 
general rate case into effect as provided by this subdivision 
until at least four months after it has made a final 
determination concerning any previously filed change of the rate 
schedule or the change has otherwise become effective under 
subdivision 2, unless it: 
    (1) the commission finds that a four month delay would 
unreasonably burden the utility, its customers, or its 
shareholders and that an earlier imposition of interim rates is 
therefore necessary; or 
    (2) the utility files a second general rate case at least 
12 months after it has filed a previous general rate case for 
which the commission has extended the suspension period under 
subdivision 2. 
    Sec. 4.  Minnesota Statutes 1986, section 237.075, 
subdivision 2, is amended to read: 
    Subd. 2.  [SUSPENSION OF RATES; HEARING.] (a) Whenever 
there is filed with the commission as provided in subdivision 1 
a schedule modifying or resulting in a change in any rate then 
in force, the commission may suspend the operation of the 
schedule by filing with the schedule of rates and delivering to 
the affected telephone company a statement in writing of its 
reasons for the suspension at any time before the rates become 
effective.  The suspension shall not be for a longer period than 
ten months beyond the initial filing date except as provided in 
paragraph (b).  During the suspension the commission shall 
determine whether all questions of the reasonableness of the 
rates requested raised by persons deemed interested or by the 
administrative division of the department of public service can 
be resolved to the satisfaction of the commission.  If the 
commission finds that all significant issues raised have not 
been resolved to its satisfaction, or upon petition by ten 
percent of the affected customers or 250 affected customers, 
whichever is less, it shall refer the matter to the office of 
administrative hearings with instructions for a public hearing 
as a contested case pursuant to chapter 14, except as otherwise 
provided in this section.  The commission may order that the 
issues presented by the proposed rate changes be bifurcated into 
two separate hearings as follows:  (1) determination of the 
telephone company's revenue requirements and (2) determination 
of the rate design.  Upon issuance of both administrative law 
judge reports, the issues shall again be joined for 
consideration and final determination by the commission.  All 
prehearing discovery activities of state agency intervenors 
shall be consolidated and conducted by the department of public 
service.  If the commission does not make a final determination 
concerning a schedule of rates within ten months after the 
initial filing date, the schedule shall be deemed to have been 
approved by the commission; except if a settlement has been 
submitted to and rejected by the commission, the schedule is 
deemed to have been approved 12 months after the initial filing. 
    (b) If the commission finds that it has insufficient time 
during the suspension period to make a final determination of a 
case involving changes in general rates because of the need to 
make final determinations of other previously filed cases 
involving changes in general rates under this section or section 
216B.16, the commission may extend the suspension period to the 
extent necessary to allow itself 20 working days to make the 
final determination after it has made final determinations in 
the previously filed cases.  An extension of the suspension 
period under this paragraph does not alter the setting of 
interim rates under subdivision 3. 
    (c) For the purposes of this section, "final determination" 
means the initial decision of the commission and not any order 
which may be entered by the commission in response to a petition 
for rehearing or other further relief.  The commission may 
further suspend rates until it determines all those petitions. 
    Sec. 5.  Minnesota Statutes 1986, section 237.075, 
subdivision 3, is amended to read: 
    Subd. 3.  [INTERIM RATES.] Notwithstanding any order of 
suspension of a proposed increase in rates, the commission shall 
order an interim rate schedule into effect not later than 60 
days after the initial filing date.  The commission shall order 
the interim rate schedule ex parte without a public hearing.  
Notwithstanding the provisions of sections 216.25 and 237.25, no 
interim rate schedule ordered by the commission pursuant to this 
subdivision shall be subject to an application for a rehearing 
or an appeal to a court until the commission has rendered its 
final determination.  Unless the commission finds that exigent 
circumstances exist, the interim rate schedule shall be 
calculated using the proposed test year cost of capital, rate 
base, and expenses, except that it shall include:  (1) a rate of 
return on common equity for the company equal to that authorized 
by the commission in the company's most recent rate proceeding; 
(2) rate base or expense items the same in nature and kind as 
those allowed by a currently effective order of the commission 
in the company's most recent rate proceeding; and (3) no change 
in the existing rate design, except for products and services 
offered by nonregulated competitors.  In the case of a company 
which has not been subject to a prior commission determination 
or has not had a general rate adjustment in the preceding three 
years, the commission shall base the interim rate schedule on 
its most recent determination concerning a similar company.  
     If, at the time of its final determination, the commission 
finds that the interim rates are in excess of the rates in the 
final determination, the commission shall order the company to 
refund the excess amount collected under the interim rate 
schedule, including interest on it which shall be at the rate of 
interest determined by the commission.  The company shall 
commence distribution of the refund to its customers within 120 
days of the final order, not subject to rehearing or appeal.  
If, at the time of its final determination, the commission finds 
that the interim rates are less than the rates in the final 
determination, the commission shall prescribe a method by which 
the company will recover the difference in revenues from the 
date of the final determination to the date the new rate 
schedules are put into effect.  
     If the telephone company fails to make refunds within the 
period of time prescribed by the commission, the commission 
shall sue therefor and may recover on behalf of all persons 
entitled to a refund.  In addition to the amount of the refund 
and interest due, the commission shall be entitled to recover 
reasonable attorney's fees, court costs and estimated cost of 
administering the distribution of the refund to persons entitled 
thereto.  No suit under this subdivision shall be maintained 
unless instituted within two years after the end of the period 
of time prescribed by the commission for repayment of refunds.  
The commission shall not order an interim rate schedule in a 
general rate case into effect as provided by this subdivision 
until at least four months after it has made a final 
determination concerning any previously filed change of the rate 
schedule or the change has otherwise become effective under 
subdivision 2, unless it: 
    (1) the commission finds that a four month delay would 
unreasonably burden the company, its customers, or its 
shareholders and that an earlier imposition of interim rates is 
therefore necessary; or 
    (2) the company files a second general rate case at least 
12 months after it has filed a previous general rate case for 
which the commission has extended the suspension period under 
subdivision 2. 
    Sec. 6.  [EFFECTIVE DATE.] 
    Sections 1 to 5 are effective the day following final 
enactment and apply only to general rate cases filed on or after 
that date. 
    Approved April 6, 1988