Kansas 2023-2024 Regular Session

Kansas House Bill HB2225 Compare Versions

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	1	+	Session of 2023
1	2		HOUSE BILL No. 2225
2		-	AN ACT concerning utilities; relating to electric utilities; including cost recovery of
3		-	transmission-related costs for transmission facilities constructed as a result of a
4		-	directive from the regional transmission organization; authorizing cost recovery for
5		-	transmission facilities constructed as a result of internal or local planning under
6		-	certain circumstances; requiring the commission to adjust the authorized return on
7		-	equity for such internal or local transmission projects recovered through a
8		-	transmission delivery charge; requiring public utilities to evaluate the regional rate
9		-	competitiveness and impact to economic development in rate proceedings; amending
10		-	K.S.A. 66-117 and 66-1237 and repealing the existing sections.
	3	+	By Committee on Energy, Utilities and Telecommunications
	4	+	1-30
	5	+	AN ACT concerning utilities; relating to electric utilities; including cost
	6	+	recovery of transmission-related costs for transmission facilities
	7	+	constructed as a result of a directive from the regional transmission
	8	+	organization; excluding cost recovery for transmission facilities
	9	+	constructed as a result of internal or local planning; amending K.S.A.
	10	+	66-1237 and repealing the existing section.
11	11		Be it enacted by the Legislature of the State of Kansas:
12		-	Section 1. K.S.A. 66-117 is hereby amended to read as follows:
13		-	66-117. (a) Unless the state corporation commission otherwise orders,
14		-	no common carrier or public utility over which the commission has
15		-	control shall make effective any changed rate, joint rate, toll, charge or
16		-	classification or schedule of charges, or any rule or regulation or
17		-	practice pertaining to the service or rates of such public utility or
18		-	common carrier except by filing the same with the commission at least
19		-	30 days prior to the proposed effective date. The commission, for good
20		-	cause, may allow such changed rate, joint rate, toll, charge or
21		-	classification or schedule of charges, or rule or regulation or practice
22		-	pertaining to the service or rates of any such public utility or common
23		-	carrier to become effective on less than 30 days' notice. If the
24		-	commission allows a change to become effective on less than 30 days'
25		-	notice, the effective date of the allowed change shall be the date
26		-	established in the commission order approving such change, or the date
27		-	of the order if no effective date is otherwise established. Any such
28		-	proposed change shall be shown by filing with the state corporation
29		-	commission a schedule showing the changes, and such changes shall be
30		-	plainly indicated by proper reference marks in amendments or
31		-	supplements to existing tariffs, schedules or classifications, or in new
32		-	issues thereof.
33		-	(b) Whenever any common carrier or public utility governed by
34		-	the provisions of this act files with the state corporation commission a
35		-	schedule showing the changes desired to be made and put in force by
36		-	such public utility or common carrier, the commission either upon
37		-	complaint or upon its own motion, may give notice and hold a hearing
38		-	upon such proposed changes. Pending such hearing, the commission
39		-	may suspend the operation of such schedule and defer the effective date
40		-	of such change in rate, joint rate, toll, charge or classification or
41		-	schedule of charges, or any rule or regulation or practice pertaining to
42		-	the service or rates of any such public utility or common carrier by
43		-	delivering to such public utility or common carrier a statement in
44		-	writing of its reasons for such suspension.
45		-	(c) The commission shall not delay the effective date of the
46		-	proposed change in rate, joint rate, toll, charge or classification or
47		-	schedule of charges, or in any rule or regulation or practice pertaining
48		-	to the service or rates of any such public utility or common carrier,
49		-	more than 240 days beyond the date the public utility or common
50		-	carrier filed its application requesting the proposed change. If the
51		-	commission does not suspend the proposed schedule within 30 days of
52		-	the date the same is filed by the public utility or common carrier, such
53		-	proposed schedule shall be deemed approved by the commission and
54		-	shall take effect on the proposed effective date. If the commission has
55		-	not issued a final order on the proposed change in any rate, joint rate,
56		-	toll, charge or classification or schedule of charges, or any rule or
57		-	regulation or practice pertaining to the service or rates of any such
58		-	public utility or common carrier, within 240 days after the carrier or
59		-	utility files its application requesting the proposed change, then the
60		-	schedule shall be deemed approved by the commission and the
61		-	proposed change shall be effective immediately, except that:
62		-	(1) For purposes of the foregoing provisions regarding the period
63		-	of time within which the commission shall act on an application, any
64		-	amendment to an application for a proposed change in any rate, which
65		-	increases the amount sought by the public utility or common carrier or
66		-	substantially alters the facts used as a basis for such requested change HOUSE BILL No. 2225—page 2
67		-	of rate, shall, at the option of the commission, be deemed a new
68		-	application and the 240-day period shall begin again from the date of
69		-	the filing of the amendment,;
70		-	(2) if hearings are in process before the commission on a proposed
71		-	change requested by the public utility or common carrier on the last day
72		-	of such 240-day period, such period shall be extended to the end of
73		-	such hearings plus 20 days to allow the commission to prepare and
74		-	issue its final order,; and,
75		-	(3) nothing in this subsection shall preclude the public utility or
76		-	common carrier and the commission from agreeing to a waiver or an
77		-	extension of the 240-day period.
78		-	(d) Except as provided in subsection (c), no change shall be made
79		-	in any rate, toll, charge, classification or schedule of charges or joint
80		-	rates, or in any rule or regulation or practice pertaining to the service or
81		-	rates of any such public utility or common carrier, without the consent
82		-	of the commission. Within 30 days after such changes have been
83		-	authorized by the state corporation commission or become effective as
84		-	provided in subsection (c), copies of all tariffs, schedules and
85		-	classifications, and all rules and regulations, except those determined to
86		-	be confidential under rules and regulations adopted by the commission,
87		-	shall be filed in every station, office or depot of every such public
88		-	utility and every common carrier in this state, for public inspection.
89		-	(e) Upon a showing by a public utility before the state corporation
90		-	commission at a public hearing and a finding by the commission that
91		-	such utility has invested in projects or systems that can be reasonably
92		-	expected (1) to produce energy from a renewable resource other than
93		-	nuclear for the use of its customers, (2) to cause the conservation of
94		-	energy used by its customers, or (3) to bring about the more efficient
95		-	use of energy by its customers, the commission may allow a return on
96		-	such investment equal to an increment of from 1/2% 0.5% to 2% plus
97		-	an amount equal to the rate of return fixed for the utility's other
98		-	investment in property found by the commission to be used or required
99		-	to be used in its services to the public. The commission may also allow
100		-	such higher rate of return on investments by a public utility in
101		-	experimental projects, such as load management devices, which it
102		-	determines after public hearing to be reasonably designed to cause
103		-	more efficient utilization of energy and in energy conservation
104		-	programs or measures which it determines after public hearing provides
105		-	a reduction in energy usage by its customers in a cost-effective manner.
106		-	(f) Whenever, after the effective date of this act, an electric public
107		-	utility, a natural gas public utility or a combination thereof, files tariffs
108		-	reflecting a surcharge on the utility's bills for utility service designed to
109		-	collect the annual increase in expense charged on its books and records
110		-	for ad valorem taxes, such utility shall report annually to the state
111		-	corporation commission the changes in expense charged for ad valorem
112		-	taxes. For purposes of this section, such amounts charged to expense on
113		-	the books and records of the utility may be estimated once the total
114		-	property tax payment is known. If found necessary by the commission
115		-	or the utility, the utility shall file tariffs which reflect the change as a
116		-	revision to the surcharge. Upon a showing that the surcharge is applied
117		-	to bills in a reasonable manner and is calculated to substantially collect
118		-	the increase in ad valorem tax expense charged on the books and
119		-	records of the utility, or reduce any existing surcharge based upon a
120		-	decrease in ad valorem tax expense incurred on the books and records
121		-	of the utility, the commission shall approve such tariffs within 30 days
122		-	of the filing. Any over or under collection of the actual ad valorem tax
123		-	increase charged to expense on the books of the utility shall be either
124		-	credited or collected through the surcharge in subsequent periods. The
125		-	establishment of a surcharge under this section shall not be deemed to
126		-	be a rate increase for purposes of this act. The net effect of any
127		-	surcharges established under this section shall be included by the
128		-	commission in the establishment of base rates in any subsequent rate
129		-	case filed by the utility.
130		-	(g) Except as to the time limits prescribed in subsection (c), HOUSE BILL No. 2225—page 3
131		-	proceedings under this section shall be conducted in accordance with
132		-	the provisions of the Kansas administrative procedure act.
133		-	(h) In any general rate proceeding of an electric public utility
134		-	serving more than 20,000 customers conducted pursuant to this
135		-	section, the electric public utility shall evaluate and include in its
136		-	application for a rate change an assessment of the following: (1) The
137		-	regional rate competitiveness of the electric public utility's current and
138		-	proposed rates; and (2) the impact of the electric public utility's
139		-	current and proposed rates upon economic development within the
140		-	state.
141		-	Sec. 2. K.S.A. 66-1237 is hereby amended to read as follows: 66-
	12	+	Section 1. K.S.A. 66-1237 is hereby amended to read as follows: 66-
142	13		1237. (a) Any electric utility subject to the regulation of the state
143	14		corporation commission pursuant to K.S.A. 66-101, and amendments
144		-	thereto, may seek to recover costs associated with transmission of
145		-	electric power, in a manner consistent with the determination of
146		-	transmission-related costs from an order of a regulatory authority
147		-	having legal jurisdiction, through a separate transmission delivery
148		-	charge included in customers' bills. The electric utility's initial
149		-	transmission delivery charge resulting from this section may be
150		-	determined by the commission either from transmission-related costs
151		-	approved in the electric utility's most recent retail rate filing or in an
152		-	order establishing rates in response to a general retail rate application
153		-	by an electric utility.
154		-	(b) (1) If an electric utility elects to recover its transmission-
155		-	related costs through a transmission delivery charge, such electric
156		-	utility shall have the right to implement a transmission delivery charge
157		-	through an application to the commission.
158		-	(1)(2) If an electric utility proposes to establish its initial
159		-	transmission delivery charge other than in connection with an
160		-	application to the commission that proposes a general retail rate change
161		-	the commission shall, effective the same date as the effective date of
162		-	the initial transmission delivery charge, unbundle the electric utility's
163		-	retail rates in such a manner that the sum of the revenue to be recovered
164		-	from the initial transmission delivery charge and the non-transmission-
165		-	related retail rates will be consistent with the revenue that would be
166		-	recovered from the retail rates in effect immediately prior to the
167		-	effective date of the initial transmission delivery charge.
168		-	(2)(3) If an electric utility proposes to establish its initial
169		-	transmission delivery charge in connection with an application to the
170		-	commission for a general retail rate change, the commission shall, in its
171		-	order in such rate proceeding, determine the electric utility's
172		-	transmission-related costs related to its service to Kansas retail
173		-	customers and determine an initial transmission delivery charge
174		-	sufficient to permit the electric utility to recover from its Kansas retail
175		-	customers such utility's transmission-related costs incurred to provide
176		-	service to such customers.
177		-	(c) Except as provided in subsection (d), all transmission-related
178		-	costs incurred by an electric utility and resulting from any order of a
179		-	regulatory authority having legal jurisdiction over transmission matters,
180		-	including orders setting rates on a subject-to-refund basis, shall be
181		-	conclusively presumed prudent for purposes of the transmission
182		-	delivery charge and an electric utility may change its transmission
183		-	delivery charge whenever there is a change in transmission-related
184		-	costs resulting from such an order. The commission may also order
185		-	such a change if the utility fails to do so. An electric utility shall submit
186		-	a report to the commission at least 30 business days before changing
187		-	the utility's transmission delivery charge. If the commission
188		-	subsequently determines that all or part of such charge did not result
189		-	from an order described by this subsection, the commission may
	15	+	thereto, may seek to recover costs associated with transmission of electric
	16	+	power, in a manner consistent with the determination of transmission-
	17	+	related costs from an order of a regulatory authority having legal
	18	+	jurisdiction, through a separate transmission delivery charge included in
	19	+	customers' bills. The electric utility's initial transmission delivery charge
	20	+	resulting from this section may be determined by the commission either
	21	+	from transmission-related costs approved in the electric utility's most
	22	+	recent retail rate filing or in an order establishing rates in response to a
	23	+	general retail rate application by an electric utility.
	24	+	(b) (1) If an electric utility elects to recover its transmission-related
	25	+	costs through a transmission delivery charge, such electric utility shall
	26	+	have the right to implement a transmission delivery charge through an
	27	+	application to the commission.
	28	+	(1)(2) If an electric utility proposes to establish its initial transmission
	29	+	delivery charge other than in connection with an application to the
	30	+	commission that proposes a general retail rate change the commission
	31	+	shall, effective the same date as the effective date of the initial
	32	+	transmission delivery charge, unbundle the electric utility's retail rates in
	33	+	such a manner that the sum of the revenue to be recovered from the initial
	34	+	transmission delivery charge and the non-transmission-related retail rates
	35	+	will be consistent with the revenue that would be recovered from the retail
	36	+	rates in effect immediately prior to the effective date of the initial
	37	+	transmission delivery charge.
	38	+	(2)(3) If an electric utility proposes to establish its initial transmission
	39	+	delivery charge in connection with an application to the commission for a
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	76	+	general retail rate change, the commission shall, in its order in such rate
	77	+	proceeding, determine the electric utility's transmission-related costs
	78	+	related to its service to Kansas retail customers and determine an initial
	79	+	transmission delivery charge sufficient to permit the electric utility to
	80	+	recover from its Kansas retail customers such utility's transmission-related
	81	+	costs incurred to provide service to such customers.
	82	+	(c) Except as provided in subsection (d), all transmission-related costs
	83	+	incurred by an electric utility and resulting from any order of a regulatory
	84	+	authority having legal jurisdiction over transmission matters, including
	85	+	orders setting rates on a subject-to-refund basis, shall be conclusively
	86	+	presumed prudent for purposes of the transmission delivery charge and an
	87	+	electric utility may change its transmission delivery charge whenever there
	88	+	is a change in transmission-related costs resulting from such an order. The
	89	+	commission may also order such a change if the utility fails to do so. An
	90	+	electric utility shall submit a report to the commission at least 30 business
	91	+	days before changing the utility's transmission delivery charge. If the
	92	+	commission subsequently determines that all or part of such charge did not
	93	+	result from an order described by this subsection, the commission may
190	94		require changes in the transmission delivery charge and impose
191	95		appropriate remedies, including refunds.
192		-	(d) (1) A for-profit, investor-owned electric utility serving more
193		-	than 20,000 customers in Kansas that elects to recover such utility's
194		-	transmission-related costs through a transmission delivery charge HOUSE BILL No. 2225—page 4
195		-	pursuant to this section may include, as a component of such charge,
196		-	the following:
197		-	(A) All transmission-related costs associated with transmission
198		-	facilities constructed as a result of a notification to construct or similar
199		-	directive from a regional transmission organization or independent
200		-	system operator that is regulated by the federal energy regulatory
201		-	commission, or any successor agency; and
202		-	(B) all fees and costs imposed on the electric utility in connection
203		-	with the operation of wholesale power markets by a regional
204		-	transmission organization, independent system operator or other entity
205		-	that is regulated by the federal energy regulatory commission, other
206		-	federal agency or any successor federal agency.
207		-	(2) A for-profit, investor-owned electric utility serving more than
208		-	20,000 customers in Kansas may recover, as a component of a
209		-	transmission delivery charge, transmission-related costs associated
210		-	with transmission facilities constructed as a result of such utility's
211		-	internal or local planning processes absent a notification to construct
	96	+	(d) (1) A for-profit, investor-owned electric utility serving more than
	97	+	20,000 customers in Kansas that elects to recover such utility's
	98	+	transmission-related costs through a transmission delivery charge
	99	+	pursuant to this section may include, as a component of such charge, all
	100	+	transmission-related costs associated with transmission facilities
	101	+	constructed as a result of a notice to construct or similar directive from a
	102	+	regional transmission organization or independent system operator that is
	103	+	regulated by the federal energy regulatory commission, or any successor
	104	+	agency.
	105	+	(2) Such for-profit, investor-owned electric utility shall not include,
	106	+	as a component of a transmission delivery charge, transmission-related
	107	+	costs associated with transmission facilities constructed as a result of such
	108	+	utility's internal or local planning processes absent a notice to construct
212	109		or similar directive from a regional transmission organization or
213	110		independent system operator that is regulated by the federal energy
214		-	regulatory commission, or any successor agency, subject to such
215		-	utility's compliance with subsections (e) and (f).
216		-	(e) To recover the costs described in subsection (d)(2) as a
217		-	component of a transmission delivery charge and to facilitate
218		-	commissioner and commission-authorized intervenor review, a utility
219		-	shall make a compliance filing with the commission prior to the time
220		-	period provided pursuant to subsection (f) for the commission to adjust
221		-	the return on equity relating to such costs. A compliance filing shall
222		-	include all the compliance filing details required by this subsection.
223		-	Such utility shall continue to make annual compliance filings to the
224		-	commission. Each compliance filing shall provide the following:
225		-	(1) For each non-blanket work order transmission project over
226		-	$15,000,000, or a different amount deemed necessary by the
227		-	commission staff in consultation with the filing utility, an itemization of
228		-	projected transmission spending for the succeeding calendar year and
229		-	the second succeeding calendar year. The commission may expect a
230		-	utility to provide more extensive details for transmission projects in the
231		-	succeeding calendar year than for the second succeeding calendar
232		-	year, but the utility shall provide as many details as reasonably
233		-	possible for transmission projects in the second succeeding calendar
234		-	year;
235		-	(2) for each transmission project:
236		-	(A) A project identifier or name;
237		-	(B) the anticipated in-service date;
238		-	(C) the projected cost;
239		-	(D) the specific location within the utility's system;
240		-	(E) whether the project is classified as a new build, rebuild,
241		-	upgrade or any other appropriate classification;
242		-	(F) a description providing the purpose for the project and the
243		-	anticipated reliability benefits;
244		-	(G) a description of the original vintage of the replaced facilities
245		-	if the project is classified as a rebuild or upgrade; and
246		-	(H) the load additions or economic development benefits
247		-	accommodated by the project, if any; and
248		-	(3) a proposed date and time for:
249		-	(A) Representatives of the public utility to conduct a technical
250		-	conference for the purpose of discussing the details of the compliance
251		-	filing with commission staff, the citizens utility ratepayer board and
252		-	other commission-authorized intervenors. Such technical conference
253		-	shall be held not later than 90 days after the utility filed the compliance
254		-	filing; and
255		-	(B) the commission to hold a public workshop in which
256		-	representatives of the public utility shall present the details associated
257		-	with the transmission projects that are anticipated in the succeeding
258		-	calendar year. The public workshop shall allow for questions and HOUSE BILL No. 2225—page 5
259		-	comments from the commission, commission staff and other
260		-	commission-authorized intervenors. The public workshop shall be held
261		-	not later than 120 days after the utility filed the compliance filing.
262		-	(f) Beginning January 1, 2024, and prior to April 1, 2024, for any
263		-	utility electing to recover the costs described in subsection (d)(2), the
264		-	commission shall adjust the return on equity used to determine the
265		-	revenue requirement of such costs from the federal energy regulatory
266		-	commission's jurisdictional return on equity to the state corporation
267		-	commission's authorized return on equity last used to set the utility's
268		-	base rates in effect at the time of filing the transmission delivery charge
269		-	update. If a return on equity was not explicitly established during the
270		-	utility's last general rate case, the commission shall determine an
271		-	appropriate return on equity from the record of the last general rate
272		-	case to establish the revenue requirement for such costs. The use of the
273		-	state corporation commission's authorized return on equity shall not
274		-	impact any project that was constructed as a result of a notification to
275		-	construct or similar directive from a regional transmission
276		-	organization or independent system operator that is regulated by the
277		-	federal energy regulatory commission, or any successor agency. In any
278		-	transmission delivery charge update filing, a utility electing to recover
279		-	the costs described in subsection (d)(2) shall utilize the state
280		-	corporation commission's authorized return on equity that was used to
281		-	set the utility's base rates in effect at the time of the update filing or
282		-	that was stipulated and approved by the commission for use in the
283		-	transmission delivery charge if a return on equity was not explicitly set
284		-	during the last general rate case, to determine the utility's transmission
285		-	delivery charge update.
286		-	Sec. 3. K.S.A. 66-117 and 66-1237 are hereby repealed.
287		-	Sec. 4. This act shall take effect and be in force from and after its
	111	+	regulatory commission, or any successor agency.
	112	+	(3) On July 1, 2023, if a for-profit, investor-owned electric utility
	113	+	serving more than 20,000 customers in Kansas, is recovering
	114	+	transmission-related costs as described in subsection (d)(2) through a
	115	+	transmission delivery charge:
	116	+	(A) Within 90 days from such date, such utility shall file with the state
	117	+	corporation commission a revision to such utility's transmission delivery
	118	+	charge to remove recovery of costs as described in subsection (d)(2); and
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	162	+	(B) within 240 days of receipt of such utility's request for revision, the
	163	+	commission shall remove costs described in subsection (d)(2) and include
	164	+	such costs as a component of such utility's rate base.
	165	+	Sec. 2. K.S.A. 66-1237 is hereby repealed.
	166	+	Sec. 3. This act shall take effect and be in force from and after its
288	167		publication in the statute book.
289		-	I hereby certify that the above BILL originated in the
290		-	HOUSE, and passed that body
291		-	Speaker of the House.
292		-	Chief Clerk of the House.
293		-
294		-	Passed the SENATE ______________________________________________________________________________
295		-	President of the Senate.
296		-	Secretary of the Senate.
297		-	APPROVED __________________________________________________________________________________________________
298		-	Governor.
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