Minnesota Session Laws - 2004, Regular Session

                            CHAPTER 138-S.F.No. 2182 
                  An act relating to utilities; repealing sunset of 
                  performance-based gas utility regulation; regulating 
                  performance-based regulation plans; amending Minnesota 
                  Statutes 2002, section 216B.1675, subdivisions 1, 3, 
                  13; Laws 1997, chapter 25, section 3. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2002, section 216B.1675, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PURPOSE.] Performance-based regulation 
        plans for public utilities offering natural gas services are 
        authorized in order to provide quality service at rates that can 
        reasonably and reliably be expected to be materially lower than 
        rates would be under current regulation and to reduce the cost 
        of regulation.  Performance-based regulation plans are intended 
        to provide the utility with increased earnings for efficient 
        performance and decreased earnings for inefficient performance. 
           Sec. 2.  Minnesota Statutes 2002, section 216B.1675, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PLAN CONTENTS.] The commission may approve a 
        performance regulation plan for natural gas distribution 
        services upon finding that the plan: 
           (1) contains a benchmark or measure of gas distribution 
        costs that is a reasonable and reliable predictor of the 
        utility's rates for gas distribution service under 
        cost-of-service regulation; 
           (2) ensures that rates for gas distribution services to 
        customers under the plan will be materially lower than the rates 
        would be under cost-of-service regulation as predicted by the 
        benchmark in clause (1); 
           (3) links the utility's earnings to its performance by 
        permitting higher utility earnings than under cost-of-service 
        regulation only when the utility's performance is more efficient 
        than the benchmark; 
           (4) can be reasonably and reliably expected to offer lower 
        administrative costs than would otherwise be experienced under 
        cost-of-service regulation; 
           (5) contains a reasonable limit on utility earnings; 
           (6) is compatible with the development of increased 
        competition in the natural gas industry; 
           (7) has adequate provisions to prevent the degradation of 
        service quality; and 
           (8) (7) provides for gathering of relevant data and 
        evaluation of the plan's effect on rates, service quality, 
        utility earnings, competition in providing natural gas, and 
        regulatory costs. 
           Sec. 3.  Minnesota Statutes 2002, section 216B.1675, 
        subdivision 13, is amended to read: 
           Subd. 13.  [GENERAL EVALUATION.] The commission shall 
        evaluate the effectiveness of all plans approved under this 
        section and submit its findings to the legislature by January 1, 
        2005 2012. 
           Sec. 4.  Laws 1997, chapter 25, section 3, is amended to 
        read: 
           Sec. 3.  [EFFECTIVE DATE; EXPIRATION.] 
           Sections 1 and 2 are effective on August 1, 1997, and 
        expire January 1, 2006. 
           Presented to the governor March 18, 2004 
           Signed by the governor March 19, 2004, 6:52 p.m.