216B.16 RATE CHANGE; PROCEDURE; HEARING.
Subdivision 1. Notice.
Unless the commission otherwise orders, no public utility shall
change a rate which has been duly established under this chapter, except upon 60 days' notice
to the commission. The notice shall include statements of facts, expert opinions, substantiating
documents, and exhibits, supporting the change requested, and state the change proposed to be
made in the rates then in force and the time when the modified rates will go into effect. If the
filing utility does not have an approved energy conservation improvement plan on file with the
department, it shall also include in its notice an energy conservation plan pursuant to section
. A filing utility subject to rate regulation under section
shall reference in its
notice the energy conservation improvement plans of the generation and transmission cooperative
providing energy conservation improvement programs to members of the filing utility pursuant to
. The filing utility shall give written notice, as approved by the commission, of
the proposed change to the governing body of each municipality and county in the area affected.
All proposed changes shall be shown by filing new schedules or shall be plainly indicated upon
schedules on file and in force at the time.
Subd. 1a. Settlement.
(a) When a public utility 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. The Office
of Administrative Hearings or the commission may, upon the request of any party and the public
utility, extend the procedural schedule of the contested case in order to permit the parties to engage
in settlement discussions. An extension must be for a definite period of time not to exceed 60 days.
(b) 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.
Subd. 2. Suspension of proposed rate; hearing; final determination defined.
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 this subdivision or subdivision 1a.
(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 department
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.
(c) 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 administrative
law judge reports, the issues shall again be joined for consideration and final determination
by the commission.
(d) All prehearing discovery activities of state agency intervenors shall be consolidated and
conducted by the Department of Commerce.
(e) 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:
(1) an extension of the procedural schedule has been granted under subdivision 1a, in which
case the schedule of rates is deemed to have been approved by the commission on the last day of
the extended period of suspension; or
(2) a settlement has been submitted to and rejected by the commission and the commission
does not make a final determination concerning the schedule of rates, the schedule of rates is
deemed to have been approved 60 days after the initial or, if applicable, the extended period
(f) 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
a final determination of another previously filed case involving changes in general rates under
this section or section
, 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 a final
determination in the previously filed case. An extension of the suspension period under this
paragraph does not alter the setting of interim rates under subdivision 3.
(g) 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.
Subd. 3. Interim rate.
(a) 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
, 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.
(b) 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.
(c) 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 between the date of the final determination and
the date the new rate schedules are put into effect. In addition, when an extension is granted for
settlement discussions under subdivision 1a, the commission shall allow the utility to also recover
the difference in revenues for a length of time equal to the length of the extension.
(d) 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.
(e) 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:
(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
(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
Subd. 4. Burden of proof.
The burden of proof to show that the rate change is just and
reasonable shall be upon the public utility seeking the change.
Subd. 5. Determination after finding rate unacceptable.
If, after the hearing, the
commission finds the rates to be unjust or unreasonable or discriminatory, the commission shall
determine the rates to be charged or applied by the utility for the service in question and shall
fix them by order to be served upon the utility. The rates shall thereafter be observed until
changed, as provided by this chapter. In no event shall the rates exceed the level of rates requested
by the public utility, except that individual rates may be adjusted upward or downward. Rate
design changes shall be prospective from the effective date of the new rate schedules approved
by the commission.
Subd. 6. Factors considered, generally.
The commission, in the exercise of its powers under
this chapter to determine just and reasonable rates for public utilities, shall give due consideration
to the public need for adequate, efficient, and reasonable service and to the need of the public
utility for revenue sufficient to enable it to meet the cost of furnishing the service, including
adequate provision for depreciation of its utility property used and useful in rendering service
to the public, and to earn a fair and reasonable return upon the investment in such property. In
determining the rate base upon which the utility is to be allowed to earn a fair rate of return, the
commission shall give due consideration to evidence of the cost of the property when first devoted
to public use, to prudent acquisition cost to the public utility less appropriate depreciation on each,
to construction work in progress, to offsets in the nature of capital provided by sources other than
the investors, and to other expenses of a capital nature. For purposes of determining rate base,
the commission shall consider the original cost of utility property included in the base and shall
make no allowance for its estimated current replacement value.
Subd. 6a. Construction work in progress.
To the extent that construction work in progress
is included in the rate base, the commission shall determine in its discretion whether and to what
extent the income used in determining the actual return on the public utility property shall include
an allowance for funds used during construction, considering the following factors:
(1) the magnitude of the construction work in progress as a percentage of the net investment
(2) the impact on cash flow and the utility's capital costs;
(3) the effect on consumer rates;
(4) whether it confers a present benefit upon an identifiable class or classes of customers; and
(5) whether it is of a short-term nature or will be imminently useful in the provision of
Subd. 6b. Energy conservation improvement.
(a) Except as otherwise provided in this
subdivision, all investments and expenses of a public utility as defined in section
, paragraph (i), incurred in connection with energy conservation improvements shall
be recognized and included by the commission in the determination of just and reasonable rates
as if the investments and expenses were directly made or incurred by the utility in furnishing
(b) Investments and expenses for energy conservation improvements shall not be included
by the commission in the determination of (i) just and reasonable electric and gas rates for retail
electric and gas service provided to large electric customer facilities that have been exempted by
the commissioner of the department pursuant to section
216B.241, subdivision 1a
, paragraph (b);
or (ii) just and reasonable gas rates for large energy facilities.
(c) The commission may permit a public utility to file rate schedules providing for annual
recovery of the costs of energy conservation improvements. These rate schedules may be
applicable to less than all the customers in a class of retail customers if necessary to reflect the
requirements of section
. The commission shall allow a public utility, without requiring
a general rate filing under this section, to reduce the electric and gas rates applicable to large
electric customer facilities that have been exempted by the commissioner of the department
pursuant to section
216B.241, subdivision 1a
, paragraph (b), and to reduce the gas rate applicable
to a large energy facility by an amount that reflects the elimination of energy conservation
improvement investments or expenditures for those facilities. In the event that the commission
has set electric or gas rates based on the use of an accounting methodology that results in the cost
of conservation improvements being recovered from utility customers over a period of years, the
rate reduction may occur in a series of steps to coincide with the recovery of balances due to the
utility for conservation improvements made by the utility on or before December 31, 2007.
(d) Investments and expenses of a public utility shall not include electric utility infrastructure
costs as defined in section
216B.1636, subdivision 1
, paragraph (b).
Subd. 6c. Incentive plan for energy conservation improvement.
(a) The commission
may order public utilities to develop and submit for commission approval incentive plans that
describe the method of recovery and accounting for utility conservation expenditures and savings.
In developing the incentive plans the commission shall ensure the effective involvement of
(b) In approving incentive plans, the commission shall consider:
(1) whether the plan is likely to increase utility investment in cost-effective energy
(2) whether the plan is compatible with the interest of utility ratepayers and other interested
(3) whether the plan links the incentive to the utility's performance in achieving cost-effective
(4) whether the plan is in conflict with other provisions of this chapter.
(c) The commission may set rates to encourage the vigorous and effective implementation of
utility conservation programs. The commission may:
(1) increase or decrease any otherwise allowed rate of return on net investment based upon
the utility's skill, efforts, and success in conserving energy;
(2) share between ratepayers and utilities the net savings resulting from energy conservation
programs to the extent justified by the utility's skill, efforts, and success in conserving energy; and
(3) compensate the utility for earnings lost as a result of its conservation programs.
Subd. 6d. Wind energy; property tax.
An owner of a wind energy conversion facility
which is required to pay property taxes under section
272.02, subdivision 22
, or production taxes
, and any related or successor provisions, or a public utility regulated by
the Public Utilities Commission which purchases the wind-generated electricity may petition the
commission to include in any power purchase agreement between the owner of the facility and the
public utility the amount of property taxes and production taxes paid by the owner of the facility.
The Public Utilities Commission shall require the public utility to amend the power purchase
agreement to include the property taxes and production taxes paid by the owner of the facility in
the price paid by the utility for wind-generated electricity if the commission finds:
(1) the owner of the facility has paid the property taxes or production taxes required by
(2) the power purchase agreement between the public utility and the owner does not already
require the utility to pay the amount of property taxes or production taxes the owner has paid
under this subdivision or, in the case of a power purchase agreement entered into prior to 1997,
the amount of property or production taxes paid by the owner in any year of the power purchase
agreement exceeds the amount of such property or production taxes included in the price paid by
the utility to the owner, as reflected in the owner's bid documents; and
(3) the commission has approved a rate schedule containing provisions for the automatic
adjustment of charges for utility service in direct relation to the charges ordered by the
commission under section
272.02, subdivision 22
Subd. 7. Energy cost adjustment.
Notwithstanding any other provision of this chapter,
the commission may permit a public utility to file rate schedules containing provisions for the
automatic adjustment of charges for public utility service in direct relation to changes in:
(1) federally regulated wholesale rates for energy delivered through interstate facilities;
(2) direct costs for natural gas delivered; or
(3) costs for fuel used in generation of electricity or the manufacture of gas.
Subd. 7a. Performance-based gas purchasing adjustment.
The commission may permit
a public utility to file rate schedules providing for annual adjustments reflecting rewards or
penalties provided for in performance-based gas purchasing plans approved by the commission
Subd. 7b. Transmission cost adjustment.
(a) Notwithstanding any other provision of this
chapter, the commission may approve a tariff mechanism for the automatic annual adjustment
of charges for the Minnesota jurisdictional costs of new transmission facilities that have been
separately filed and reviewed and approved by the commission under section
certified as a priority project or deemed to be a priority transmission project under section
(b) Upon filing by a public utility or utilities providing transmission service, the commission
may approve, reject, or modify, after notice and comment, a tariff that:
(1) allows the utility to recover on a timely basis the costs net of revenues of facilities
approved under section
or certified or deemed to be certified under section
(2) allows a return on investment at the level approved in the utility's last general rate case,
unless a different return is found to be consistent with the public interest;
(3) provides a current return on construction work in progress, provided that recovery from
Minnesota retail customers for the allowance for funds used during construction is not sought
through any other mechanism;
(4) allows for recovery of other expenses if shown to promote a least-cost project option or
is otherwise in the public interest;
(5) allocates project costs appropriately between wholesale and retail customers;
(6) provides a mechanism for recovery above cost, if necessary to improve the overall
economics of the project or projects or is otherwise in the public interest; and
(7) terminates recovery once costs have been fully recovered or have otherwise been
reflected in the utility's general rates.
(c) A public utility may file annual rate adjustments to be applied to customer bills paid
under the tariff approved in paragraph (b). In its filing, the public utility shall provide:
(1) a description of and context for the facilities included for recovery;
(2) a schedule for implementation of applicable projects;
(3) the utility's costs for these projects;
(4) a description of the utility's efforts to ensure the lowest costs to ratepayers for the
(5) calculations to establish that the rate adjustment is consistent with the terms of the
tariff established in paragraph (b).
(d) Upon receiving a filing for a rate adjustment pursuant to the tariff established in
paragraph (b), the commission shall approve the annual rate adjustments provided that, after
notice and comment, the costs included for recovery through the tariff were or are expected to
be prudently incurred and achieve transmission system improvements at the lowest feasible and
prudent cost to ratepayers.
Subd. 7c. Transmission assets transfer.
(a) Public utility owners of transmission facilities
may, subject to Public Utilities Commission approval, transfer operational control or ownership
of those transmission assets to a transmission company subject to Federal Energy Regulatory
Commission jurisdiction. For transmission asset transfers by a public utility, the Public Utilities
Commission must review the request to transfer either in the context of a general rate case under
this section or by initiating other proceedings it determines provide adequate review of the
transmission asset transfer. The Public Utilities Commission may limit, in whole or in part, the
transfer of transmission assets or the timing of those transfers by a public utility if it finds the
limitation in the public interest. The commission may only approve a transfer if it finds that the
transfer is consistent with the public interest. In assessing the public interest, the commission shall
evaluate, among other things, whether the transfer:
(1) facilitates the development of transmission infrastructure necessary to ensure reliability,
encourages the development of renewable resources, and accommodates energy transfers within
and between states;
(2) protects Minnesota ratepayers against the subsidization of wholesale transactions through
(3) ensures, in the case of operational control of transmission assets, that the state retains
jurisdiction over the transferring utility for all aspects of service under this chapter;
(4) impacts Minnesota retail rates; and
(5) protects Minnesota ratepayers from paying capital costs for transmission assets that
have already been recovered.
(b) A transfer of operational control or ownership of transmission assets by a public utility
under this subdivision is subject to section
. The relationship between a public utility
transferring operational control of transmission assets to another entity under this subdivision
is subject to the provisions of section
. If a public utility transfers ownership of its
transmission assets to a transmission provider subject to the jurisdiction of the Federal Energy
Regulatory Commission, the Public Utilities Commission may permit the utility to file a rate
schedule providing for the automatic adjustment of charges to recover the cost of transmission
services purchased under tariff rates approved by the Federal Energy Regulatory Commission.
(c) A municipal utility, a municipal power agency, or a joint venture pursuant to section
may transfer operational control or ownership of transmission assets to a transmission
company, or make investments in a transmission company, if the governing body of the municipal
utility, municipal power agency, or joint venture finds that the transfer or investment is consistent
with the public interest and will facilitate the development of infrastructure necessary to ensure
Subd. 8. Advertising expense.
(a) The commission shall disapprove the portion of any rate
which makes an allowance directly or indirectly for expenses incurred by a public utility to
provide a public advertisement which:
(1) is designed to influence or has the effect of influencing public attitudes toward legislation
or proposed legislation, or toward a rule, proposed rule, authorization or proposed authorization
of the Public Utilities Commission or other agency of government responsible for regulating
a public utility;
(2) is designed to justify or otherwise support or defend a rate, proposed rate, practice or
proposed practice of a public utility;
(3) is designed primarily to promote consumption of the services of the utility;
(4) is designed primarily to promote good will for the public utility or improve the utility's
public image; or
(5) is designed to promote the use of nuclear power or to promote a nuclear waste storage
(b) The commission may approve a rate which makes an allowance for expenses incurred by
a public utility to disseminate information which:
(1) is designed to encourage conservation of energy supplies;
(2) is designed to promote safety; or
(3) is designed to inform and educate customers as to financial services made available to
them by the public utility.
(c) The commission shall not withhold approval of a rate because it makes an allowance for
expenses incurred by the utility to disseminate information about corporate affairs to its owners.
Subd. 9. Charitable contribution.
The commission shall allow as operating expenses only
those charitable contributions which the commission deems prudent and which qualify under
290.21, subdivision 3, clause (b)
. Only 50 percent of the qualified contributions shall
be allowed as operating expenses.
Subd. 10. Intervenor compensation.
(a) A nonprofit organization or an individual granted
formal intervenor status by the commission is eligible to receive compensation.
(b) The commission may order a utility to compensate all or part of an eligible intervenor's
reasonable costs of participation in a general rate case that comes before the commission when the
commission finds that the intervenor has materially assisted the commission's deliberation and
when a lack of compensation would present financial hardship to the intervenor. Compensation
may not exceed $50,000 for a single intervenor in any proceeding. For the purpose of this
subdivision, "materially assisted" means that the intervenor's participation and presentation
was useful and seriously considered, or otherwise substantially contributed to the commission's
deliberations in the proceeding.
(c) In determining whether an intervenor has materially assisted the commission's
deliberation, the commission must consider, among other factors, whether:
(1) the intervenor represented an interest that would not otherwise have been adequately
(2) the evidence or arguments presented or the positions taken by the intervenor were an
important factor in producing a fair decision;
(3) the intervenor's position promoted a public purpose or policy;
(4) the evidence presented, arguments made, issues raised, or positions taken by the
intervenor would not have been a part of the record without the intervenor's participation; and
(5) the administrative law judge or the commission adopted, in whole or in part, a position
advocated by the intervenor.
(d) In determining whether the absence of compensation would present financial hardship to
the intervenor, the commission must consider:
(1) whether the costs presented in the intervenor's claim reflect reasonable fees for attorneys
and expert witnesses and other reasonable costs; and
(2) the ratio between the costs of intervention and the intervenor's unrestricted funds.
(e) An intervenor seeking compensation must file a request and an affidavit of service with the
commission, and serve a copy of the request on each party to the proceeding. The request must be
filed 30 days after the later of (1) the expiration of the period within which a petition for rehearing,
amendment, vacation, reconsideration, or reargument must be filed or (2) the date the commission
issues an order following rehearing, amendment, vacation, reconsideration, or reargument.
(f) The compensation request must include:
(1) the name and address of the intervenor or representative of the nonprofit organization the
intervenor is representing;
(2) proof of the organization's nonprofit, tax-exempt status;
(3) the name and docket number of the proceeding for which compensation is requested;
(4) a list of actual annual revenues and expenses of the organization the intervenor is
representing for the preceding year and projected revenues, revenue sources, and expenses for
the current year;
(5) the organization's balance sheet for the preceding year and a current monthly balance
(6) an itemization of intervenor costs and the total compensation request; and
(7) a narrative explaining why additional organizational funds cannot be devoted to the
(g) Within 30 days after service of the request for compensation, a party may file a response,
together with an affidavit of service, with the commission. A copy of the response must be served
on the intervenor and all other parties to the proceeding.
(h) Within 15 days after the response is filed, the intervenor may file a reply with the
commission. A copy of the reply and an affidavit of service must be served on all other parties to
(i) If additional costs are incurred as a result of additional proceedings following the
commission's initial order, the intervenor may file an amended request within 30 days after the
commission issues an amended order. Paragraphs (e) to (h) apply to an amended request.
(j) The commission must issue a decision on intervenor compensation within 60 days of a
filing by an intervenor.
(k) A party may request reconsideration of the commission's compensation decision within
30 days of the decision.
(l) If the commission issues an order requiring payment of intervenor compensation, the
utility that was the subject of the proceeding must pay the compensation to the intervenor, and file
with the commission proof of payment, within 30 days after the later of (1) the expiration of the
period within which a petition for reconsideration of the commission's compensation decision
must be filed or (2) the date the commission issues an order following reconsideration of its
order on intervenor compensation.
Subd. 11. Pipeline safety programs.
All costs of a public utility that are necessary to
comply with state pipeline safety programs under sections
must be recognized and included by the commission in the
determination of just and reasonable rates as if the costs were directly incurred by the utility in
furnishing utility service.
Subd. 12. Exemption for small gas utility franchise.
(a) A municipality may file with the
commission a resolution of its governing body requesting exemption from the provisions of
this section for a public utility that is under a franchise with the municipality to supply natural,
manufactured, or mixed gas and that serves 650 or fewer customers in the municipality as long as
the public utility serves no more than a total of 2,000 customers.
(b) The commission shall grant an exemption from this section for that portion of a public
utility's business that is requested by each municipality it serves. Furthermore, the commission
shall also grant the public utility an exemption from this section for any service provided outside
of a municipality's border that is considered by the commission to be incidental. The public
utility shall file with the commission and the department all initial and subsequent changes in
rates, tariffs, and contracts for service outside the municipality at least 30 days in advance of
(c) However, the commission shall require the utility to adopt the commission's policies and
procedures governing disconnection during cold weather. The utility shall annually submit a copy
of its municipally approved rates to the commission.
(d) In all cases covered by this subdivision in which an exemption for service outside of a
municipality is granted, the commission may initiate an investigation under section
its own motion or upon complaint from a customer.
(e) If a municipality files with the commission a resolution of its governing body rescinding
the request for exemption, the commission shall regulate the public utility's business in that
municipality under this section.
Subd. 12a. Exemption for small electric utility franchise.
(a) An electric utility, operating
as such in a bordering state and having fewer than 200 customers in Minnesota, is exempt from
this section if the utility:
(1) charges Minnesota customers the same rates as those charged to customers in the
(2) provides 60-day notice to the commission of rate increases for its Minnesota customers;
(3) provides individual, written notice of rate increases to its Minnesota customers;
(4) provides the commission with schedules of rates and tariffs charged in the bordering state
and revenues by class under the former and proposed rates; and
(5) maintains an up-to-date tariff book with the department.
(b) The commission may initiate an investigation under section
, on its own motion
or upon customer complaint with respect to the utility's rates and practices in Minnesota.
Subd. 13. Economic and community development.
The commission may allow a
public utility to recover from ratepayers the expenses incurred for economic and community
Subd. 14. Low-income electric rate discount.
A public utility shall fund an affordability
program for low-income customers in an amount based on a 50 percent electric rate discount on
the first 300 kilowatt-hours consumed in a billing period for low-income residential customers
of the utility. For the purposes of this subdivision, "low-income" describes a customer who
is receiving assistance from the federal low-income home energy assistance program. The
affordability program must be designed to target participating customers with the lowest incomes
and highest energy costs in order to lower the percentage of income they devote to energy bills,
increase their payments, and lower costs associated with collection activities on their accounts.
For low-income customers who are 62 years of age or older or disabled, the program must, in
addition to any other program benefits, include a 50 percent electric rate discount on the first 300
kilowatt-hours consumed in a billing period. For the purposes of this subdivision, "public utility"
includes only those public utilities with more than 200,000 residential electric service customers.
The commission may issue orders necessary to implement, administer, and recover the costs
of the program on a timely basis.
Subd. 15. Low-income affordability programs.
(a) The commission must consider ability
to pay as a factor in setting utility rates and may establish affordability programs for low-income
residential ratepayers in order to ensure affordable, reliable, and continuous service to low-income
utility customers. By September 1, 2007, a public utility serving low-income residential ratepayers
who use natural gas for heating must file an affordability program with the commission. For
purposes of this subdivision, "low-income residential ratepayers" means ratepayers who receive
energy assistance from the low-income home energy assistance program (LIHEAP).
(b) Any affordability program the commission orders a utility to implement must:
(1) lower the percentage of income that participating low-income households devote to
(2) increase participating customer payments over time by increasing the frequency of
(3) decrease or eliminate participating customer arrears;
(4) lower the utility costs associated with customer account collection activities; and
(5) coordinate the program with other available low-income bill payment assistance and
(c) In ordering affordability programs, the commission may require public utilities to file
program evaluations that measure the effect of the affordability program on:
(1) the percentage of income that participating households devote to energy bills;
(2) service disconnections; and
(3) frequency of customer payments, utility collection costs, arrearages, and bad debt.
(d) The commission must issue orders necessary to implement, administer, and evaluate
affordability programs, and to allow a utility to recover program costs, including administrative
costs, on a timely basis. The commission may not allow a utility to recover administrative costs,
excluding start-up costs, in excess of five percent of total program costs, or program evaluation
costs in excess of two percent of total program costs. The commission must permit deferred
accounting, with carrying costs, for recovery of program costs incurred during the period between
general rate cases.
(e) Public utilities may use information collected or created for the purpose of administering
energy assistance to administer affordability programs.
Subd. 16. Performance regulation plan tariffs.
A public utility providing natural gas
services that has a performance regulation plan approved pursuant to section
tariff provisions incorporating the provisions of that plan. Changes in the cost recovery of natural
gas supplies must not be included within the plan.
History: 1974 c 429 s 16; 1977 c 359 s 1-6; 1977 c 364 s 5; 1978 c 694 s 1; 1980 c 579 s 16;
1980 c 614 s 123; 1980 c 615 s 60; 1981 c 357 s 70; 1Sp1981 c 4 art 4 s 15; 1982 c 414 s 1-6;
1982 c 424 s 130; 1983 c 179 s 5; 1983 c 247 s 95; 1983 c 289 s 104; 1986 c 346 s 1; 1986 c 409
s 6,7; 1987 c 353 s 6; 1988 c 457 s 1-3; 1991 c 147 s 1; 1991 c 184 s 1; 1991 c 235 art 1 s 1; art 6
s 1; 1993 c 49 s 1; 1993 c 327 s 4-7; 1994 c 483 s 1; 1994 c 641 art 4 s 2,3; 1994 c 644 s 2; 1995
c 17 s 2; 1995 c 125 s 1; 1995 c 224 s 74,75; 1997 c 25 s 1,3; 1997 c 231 art 2 s 5; 1999 c 140 s
1; 2001 c 212 art 4 s 4; 1Sp2001 c 4 art 6 s 37-40; 2004 c 138 s 4; 2004 c 216 s 2; 2005 c 97 art 1
s 2,3; art 12 s 1; 2007 c 57 art 2 s 18,19; 2007 c 136 art 2 s 1,2