As Amended by House Committee
Session of 2023
HOUSE BILL No. 2225
By Committee on Energy, Utilities and Telecommunications
1-30
AN ACT concerning utilities; relating to electric utilities; including cost
recovery of transmission-related costs for transmission facilities
constructed as a result of a directive from the regional transmission
organization; excluding authorizing cost recovery for transmission
facilities constructed as a result of internal or local planning under
certain circumstances; requiring the commission to adjust the
authorized return on equity for such internal or local transmission
projects recovered through a transmission delivery charge;
requiring public utilities to evaluate the regional rate
competitiveness and impact to economic development in rate
proceedings; amending K.S.A. 66-117 and 66-1237 and repealing the
existing section sections.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 66-117 is hereby amended to read as follows: 66-
117. (a) Unless the state corporation commission otherwise orders, no
common carrier or public utility over which the commission has
control shall make effective any changed rate, joint rate, toll, charge
or classification or schedule of charges, or any rule or regulation or
practice pertaining to the service or rates of such public utility or
common carrier except by filing the same with the commission at least
30 days prior to the proposed effective date. The commission, for good
cause, may allow such changed rate, joint rate, toll, charge or
classification or schedule of charges, or rule or regulation or practice
pertaining to the service or rates of any such public utility or common
carrier to become effective on less than 30 days' notice. If the
commission allows a change to become effective on less than 30 days'
notice, the effective date of the allowed change shall be the date
established in the commission order approving such change, or the
date of the order if no effective date is otherwise established. Any such
proposed change shall be shown by filing with the state corporation
commission a schedule showing the changes, and such changes shall be
plainly indicated by proper reference marks in amendments or
supplements to existing tariffs, schedules or classifications, or in new
issues thereof.
(b) Whenever any common carrier or public utility governed by
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the provisions of this act files with the state corporation commission a
schedule showing the changes desired to be made and put in force by
such public utility or common carrier, the commission either upon
complaint or upon its own motion, may give notice and hold a hearing
upon such proposed changes. Pending such hearing, the commission
may suspend the operation of such schedule and defer the effective
date of such change in rate, joint rate, toll, charge or classification or
schedule of charges, or any rule or regulation or practice pertaining to
the service or rates of any such public utility or common carrier by
delivering to such public utility or common carrier a statement in
writing of its reasons for such suspension.
(c) The commission shall not delay the effective date of the
proposed change in rate, joint rate, toll, charge or classification or
schedule of charges, or in any rule or regulation or practice pertaining
to the service or rates of any such public utility or common carrier,
more than 240 days beyond the date the public utility or common
carrier filed its application requesting the proposed change. If the
commission does not suspend the proposed schedule within 30 days of
the date the same is filed by the public utility or common carrier, such
proposed schedule shall be deemed approved by the commission and
shall take effect on the proposed effective date. If the commission has
not issued a final order on the proposed change in any rate, joint rate,
toll, charge or classification or schedule of charges, or any rule or
regulation or practice pertaining to the service or rates of any such
public utility or common carrier, within 240 days after the carrier or
utility files its application requesting the proposed change, then the
schedule shall be deemed approved by the commission and the
proposed change shall be effective immediately, except that:
(1) For purposes of the foregoing provisions regarding the period
of time within which the commission shall act on an application, any
amendment to an application for a proposed change in any rate, which
increases the amount sought by the public utility or common carrier
or substantially alters the facts used as a basis for such requested
change of rate, shall, at the option of the commission, be deemed a
new application and the 240-day period shall begin again from the
date of the filing of the amendment,;
(2) if hearings are in process before the commission on a
proposed change requested by the public utility or common carrier on
the last day of such 240-day period, such period shall be extended to
the end of such hearings plus 20 days to allow the commission to
prepare and issue its final order,; and,
(3) nothing in this subsection shall preclude the public utility or
common carrier and the commission from agreeing to a waiver or an
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extension of the 240-day period.
(d) Except as provided in subsection (c), no change shall be made
in any rate, toll, charge, classification or schedule of charges or joint
rates, or in any rule or regulation or practice pertaining to the service
or rates of any such public utility or common carrier, without the
consent of the commission. Within 30 days after such changes have
been authorized by the state corporation commission or become
effective as provided in subsection (c), copies of all tariffs, schedules
and classifications, and all rules and regulations, except those
determined to be confidential under rules and regulations adopted by
the commission, shall be filed in every station, office or depot of every
such public utility and every common carrier in this state, for public
inspection.
(e) Upon a showing by a public utility before the state
corporation commission at a public hearing and a finding by the
commission that such utility has invested in projects or systems that
can be reasonably expected (1) to produce energy from a renewable
resource other than nuclear for the use of its customers, (2) to cause
the conservation of energy used by its customers, or (3) to bring about
the more efficient use of energy by its customers, the commission may
allow a return on such investment equal to an increment of from 1/2%
0.5% to 2% plus an amount equal to the rate of return fixed for the
utility's other investment in property found by the commission to be
used or required to be used in its services to the public. The
commission may also allow such higher rate of return on investments
by a public utility in experimental projects, such as load management
devices, which it determines after public hearing to be reasonably
designed to cause more efficient utilization of energy and in energy
conservation programs or measures which it determines after public
hearing provides a reduction in energy usage by its customers in a
cost-effective manner.
(f) Whenever, after the effective date of this act, an electric public
utility, a natural gas public utility or a combination thereof, files
tariffs reflecting a surcharge on the utility's bills for utility service
designed to collect the annual increase in expense charged on its books
and records for ad valorem taxes, such utility shall report annually to
the state corporation commission the changes in expense charged for
ad valorem taxes. For purposes of this section, such amounts charged
to expense on the books and records of the utility may be estimated
once the total property tax payment is known. If found necessary by
the commission or the utility, the utility shall file tariffs which reflect
the change as a revision to the surcharge. Upon a showing that the
surcharge is applied to bills in a reasonable manner and is calculated
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to substantially collect the increase in ad valorem tax expense charged
on the books and records of the utility, or reduce any existing
surcharge based upon a decrease in ad valorem tax expense incurred
on the books and records of the utility, the commission shall approve
such tariffs within 30 days of the filing. Any over or under collection of
the actual ad valorem tax increase charged to expense on the books of
the utility shall be either credited or collected through the surcharge
in subsequent periods. The establishment of a surcharge under this
section shall not be deemed to be a rate increase for purposes of this
act. The net effect of any surcharges established under this section
shall be included by the commission in the establishment of base rates
in any subsequent rate case filed by the utility.
(g) Except as to the time limits prescribed in subsection (c),
proceedings under this section shall be conducted in accordance with
the provisions of the Kansas administrative procedure act.
(h) In any general rate proceeding of an electric public utility serving
more than 20,000 customers conducted pursuant to this section, the
electric public utility shall evaluate and include in its application for a
rate change an assessment of the following: (1) The regional rate
competitiveness of the electric public utility's current and proposed rates;
and (2) the impact of the electric public utility's current and proposed
rates upon economic development within the state.
Section 1. Sec. 2. K.S.A. 66-1237 is hereby amended to read as
follows: 66-1237. (a) Any electric utility subject to the regulation of the
state corporation commission pursuant to K.S.A. 66-101, and amendments
thereto, may seek to recover costs associated with transmission of electric
power, in a manner consistent with the determination of transmission-
related costs from an order of a regulatory authority having legal
jurisdiction, through a separate transmission delivery charge included in
customers' bills. The electric utility's initial transmission delivery charge
resulting from this section may be determined by the commission either
from transmission-related costs approved in the electric utility's most
recent retail rate filing or in an order establishing rates in response to a
general retail rate application by an electric utility.
(b) (1) If an electric utility elects to recover its transmission-related
costs through a transmission delivery charge, such electric utility shall
have the right to implement a transmission delivery charge through an
application to the commission.
(1)(2) If an electric utility proposes to establish its initial transmission
delivery charge other than in connection with an application to the
commission that proposes a general retail rate change the commission
shall, effective the same date as the effective date of the initial
transmission delivery charge, unbundle the electric utility's retail rates in
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such a manner that the sum of the revenue to be recovered from the initial
transmission delivery charge and the non-transmission-related retail rates
will be consistent with the revenue that would be recovered from the retail
rates in effect immediately prior to the effective date of the initial
transmission delivery charge.
(2)(3) If an electric utility proposes to establish its initial transmission
delivery charge in connection with an application to the commission for a
general retail rate change, the commission shall, in its order in such rate
proceeding, determine the electric utility's transmission-related costs
related to its service to Kansas retail customers and determine an initial
transmission delivery charge sufficient to permit the electric utility to
recover from its Kansas retail customers such utility's transmission-related
costs incurred to provide service to such customers.
(c) Except as provided in subsection (d), all transmission-related costs
incurred by an electric utility and resulting from any order of a regulatory
authority having legal jurisdiction over transmission matters, including
orders setting rates on a subject-to-refund basis, shall be conclusively
presumed prudent for purposes of the transmission delivery charge and an
electric utility may change its transmission delivery charge whenever there
is a change in transmission-related costs resulting from such an order. The
commission may also order such a change if the utility fails to do so. An
electric utility shall submit a report to the commission at least 30 business
days before changing the utility's transmission delivery charge. If the
commission subsequently determines that all or part of such charge did not
result from an order described by this subsection, the commission may
require changes in the transmission delivery charge and impose
appropriate remedies, including refunds.
(d) (1) A for-profit, investor-owned electric utility serving more than
20,000 customers in Kansas that elects to recover such utility's
transmission-related costs through a transmission delivery charge
pursuant to this section may include, as a component of such charge, the
following:
(A) All transmission-related costs associated with transmission
facilities constructed as a result of a notice notification to construct or
similar directive from a regional transmission organization or independent
system operator that is regulated by the federal energy regulatory
commission, or any successor agency; and
(B) all fees and costs imposed on the electric utility in connection
with the operation of wholesale power markets by a regional
transmission organization, independent system operator or other
entity that is regulated by the federal energy regulatory commission,
other federal agency or any successor federal agency.
(2) SuchA for-profit, investor-owned electric utility shall not include
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serving more than 20,000 customers in Kansas may recover, as a
component of a transmission delivery charge, transmission-related costs
associated with transmission facilities constructed as a result of such
utility's internal or local planning processes absent a notice notification
to construct or similar directive from a regional transmission organization
or independent system operator that is regulated by the federal energy
regulatory commission, or any successor agency, subject to such utility's
compliance with subsections (e) and (f).
(3) On July 1, 2023, if a for-profit, investor-owned electric utility
serving more than 20,000 customers in Kansas, is recovering
transmission-related costs as described in subsection (d)(2) through a
transmission delivery charge:
(A) Within 90 days from such date, such utility shall file with the state
corporation commission a revision to such utility's transmission delivery
charge to remove recovery of costs as described in subsection (d)(2); and
(B) within 240 days of receipt of such utility's request for revision, the
commission shall remove costs described in subsection (d)(2) and include
such costs as a component of such utility's rate base(e) To recover the
costs described in subsection (d)(2) as a component of a transmission
delivery charge and to facilitate commissioner and commission-
authorized intervenor review, a utility shall make a compliance filing
with the commission prior to the time period provided pursuant to
subsection (f) for the commission to adjust the return on equity
relating to such costs. A compliance filing shall include all the
compliance filing details required by this subsection. Such utility shall
continue to make annual compliance filings to the commission. Each
compliance filing shall provide the following:
(1) For each non-blanket work order transmission project over
$15,000,000, or a different amount deemed necessary by the
commission staff in consultation with the filing utility, an itemization
of projected transmission spending for the succeeding calendar year
and the second succeeding calendar year. The commission may expect
a utility to provide more extensive details for transmission projects in
the succeeding calendar year than for the second succeeding calendar
year, but the utility shall provide as many details as reasonably
possible for transmission projects in the second succeeding calendar
year;
(2) for each transmission project:
(A) A project identifier or name;
(B) the anticipated in-service date;
(C) the projected cost;
(D) the specific location within the utility's system;
(E) whether the project is classified as a new build, rebuild,
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upgrade or any other appropriate classification;
(F) a description providing the purpose for the project and the
anticipated reliability benefits;
(G) a description of the original vintage of the replaced facilities
if the project is classified as a rebuild or upgrade; and
(H) the load additions or economic development benefits
accommodated by the project, if any; and
(3) a proposed date and time for:
(A) Representatives of the public utility to conduct a technical
conference for the purpose of discussing the details of the compliance
filing with commission staff, the citizens utility ratepayer board and
other commission-authorized intervenors. Such technical conference
shall be held not later than 90 days after the utility filed the
compliance filing; and
(B) the commission to hold a public workshop in which
representatives of the public utility shall present the details associated
with the transmission projects that are anticipated in the succeeding
calendar year. The public workshop shall allow for questions and
comments from the commission, commission staff and other
commission-authorized intervenors. The public workshop shall be
held not later than 120 days after the utility filed the compliance filing.
(f) Beginning January 1, 2024, and prior to April 1, 2024, for any
utility electing to recover the costs described in subsection (d)(2), the
commission shall adjust the return on equity used to determine the
revenue requirement of such costs from the federal energy regulatory
commission's jurisdictional return on equity to the state corporation
commission's authorized return on equity last used to set the utility's
base rates in effect at the time of filing the transmission delivery
charge update. If a return on equity was not explicitly established
during the utility's last general rate case, the commission shall
determine an appropriate return on equity from the record of the last
general rate case to establish the revenue requirement for such costs.
The use of the state corporation commission's authorized return on
equity shall not impact any project that was constructed as a result of
a notification to construct or similar directive from a regional
transmission organization or independent system operator that is
regulated by the federal energy regulatory commission, or any
successor agency. In any transmission delivery charge update filing, a
utility electing to recover the costs described in subsection (d)(2) shall
utilize the state corporation commission's authorized return on equity
that was used to set the utility's base rates in effect at the time of the
update filing or that was stipulated and approved by the commission
for use in the transmission delivery charge if a return on equity was
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not explicitly set during the last general rate case, to determine the
utility's transmission delivery charge update.
Sec. 2. 3. K.S.A. 66-117 and 66-1237 is are hereby repealed.
Sec. 3. 4. This act shall take effect and be in force from and after its
publication in the statute book.
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