Kansas 2023-2024 Regular Session

Kansas House Bill HB2527 Compare Versions

Version 1 (Old)

Version 2 (New)

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	1	+	Session of 2024
1	2		HOUSE BILL No. 2527
2		-	AN ACT concerning public utilities; relating to the state corporation commission;
3		-	authorizing public utilities to defer to a regulatory asset and recover depreciation
4		-	expenses relating to certain rate base additions; establishing a cap on such cost
5		-	recovery and limiting the time that such cost recovery may be implemented by a
6		-	public utility; authorizing new economic development electric rates for large
7		-	facilities; limiting the time that such economic development rates for large facilities
8		-	may be implemented by a public utility; prohibiting any revenue lost through the
9		-	implementation of economic development rates from being imputed into the electric
10		-	public utility's revenue requirement; prohibiting the commission from authorizing the
11		-	retirement of nuclear powered and fossil fuel-fired electric generating units unless
12		-	certain requirements are met; authorizing electric public utilities to retain certain
13		-	electric generating facilities in the utility's rate base; requiring the commission to
14		-	report annually on public utility requests to retire electric generating units;
15		-	authorizing a rate adjustment mechanism for the construction of new gas-fired
16		-	electric generating facilities; limiting the time that such rate adjustment mechanism
17		-	may be implemented by a public utility; extending the timeline for the commission to
18		-	make a determination of ratemaking principles and treatment prior to a public utility
19		-	constructing or acquiring a stake in an electric generation or transmission facility;
20		-	establishing procedural requirements to support the timely completion of such
21		-	proceedings; revising the net metering and easy connection act; increasing the public
22		-	utility system-wide capacity limit for facilities subject to net metering; requiring net
23		-	metering facilities to be appropriately sized based on the customer's expected load;
24		-	establishing requirements for exporting power from a net metering facility to a
25		-	utility; amending K.S.A. 66-1264, 66-1265, 66-1266 and 66-1267 and K.S.A. 2023
26		-	Supp. 66-101j and 66-1239 and repealing the existing sections.
	3	+	By Committee on Energy, Utilities and Telecommunications
	4	+	Requested by Laura Lutz, on behalf of Evergy
	5	+	1-18
	6	+	AN ACT concerning public utilities; relating to the state corporation
	7	+	commission; authorizing cost recovery mechanisms for certain rate
	8	+	base additions; requiring the commission to evaluate the capital
	9	+	structure of certain public utilities without regard for entities affiliated
	10	+	with such utility; authorizing certain public utilities to elect a specific
	11	+	return on equity in rate proceedings; increasing the peak demand
	12	+	threshold and discount term for economic development electric rates
	13	+	for large facilities; removing requirements for tracking and deferral to a
	14	+	regulatory asset of revenue reductions caused by economic
	15	+	development rates; authorizing a rate adjustment mechanism for the
	16	+	construction of new gas-fired electric generating facilities; amending
	17	+	K.S.A. 2023 Supp. 66-101j and 66-1239 and repealing the existing
	18	+	sections.
27	19		Be it enacted by the Legislature of the State of Kansas:
28	20		New Section 1. (a) As used in this section:
29	21		(1) "Commission" means the state corporation commission.
30		-	(2) "Public utility" means the same as defined in K.S.A. 66-104,
31		-	~~and~~ amendments thereto.
	22	+	(2) "Public utility" means the same as defined in K.S.A. 66-104, and
	23	+	amendments thereto.
32	24		(3) "Qualifying electric plant" means all rate base additions by an
33		-	electric public utility. "Qualifying electric plant" does not include
34		-	transmission facilities or new electric generating units.
	25	+	electric public utility.
35	26		(4) "Rate base cutoff date" means the date rate base additions are
36		-	accounted for in a general rate proceeding. In the absence of a
37		-	commission order that specifies the rate base cutoff date, "rate base
38		-	cutoff date" means the date as reflected in any jointly proposed
39		-	procedural schedule submitted by the parties in the applicable general
40		-	rate proceeding, or the date that is otherwise agreed to by such parties.
41		-	(5) "Weighted average cost of capital" means the return on rate
42		-	base used to determine the revenue requirement or that was approved to
43		-	be used for regulatory accounting purposes in the public utility's most
44		-	recently ordered return on rate base in a general rate proceeding.
	27	+	accounted for in a general rate proceeding. In the absence of a commission
	28	+	order that specifies the rate base cutoff date, "rate base cutoff date" means
	29	+	the date as reflected in any jointly proposed procedural schedule submitted
	30	+	by the parties in the applicable general rate proceeding, or the date that is
	31	+	otherwise agreed to by such parties.
	32	+	(5) "Weighted average cost of capital" means the return on rate base
	33	+	used to determine the revenue requirement in the public utility's most
	34	+	recently completed general rate proceeding except that in the absence of
	35	+	any commission determination made on or after July 1, 2021, and prior to
	36	+	July 1, 2024, to establish the return on rate base for such public utility, the
	37	+	weighted average cost of capital shall be determined using the public
	38	+	utility's actual capital structure as of December 31, 2023, excluding short-
	39	+	term debt, the public utility's actual cost of long-term debt and preferred
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	75	+	stock as of December 31, 2023, and a cost of common equity of 9.5%.
45	76		(b) Notwithstanding any other provision of law except K.S.A. 66-
46	77		1239(b)(5), and amendments thereto, commencing on July 1, 2024, a
47		-	public utility shall defer to a regulatory asset 90% of all depreciation
48		-	expense and return associated with all qualifying electric plants
49		-	recorded to plant-in-service on the utility's books if the public utility
50		-	has provided notice to the commission of the public utility's election to
51		-	make such deferrals pursuant to subsection (f)(1). Such deferral shall
52		-	begin on July 1, 2024, if the public utility has notified the commission
53		-	of the public utility's election to make such deferral by such date or
54		-	shall begin on the date that such election is made if such election is
55		-	made after July 1, 2024. Except as provided in subsection (c),
56		-	subsection (f)(2) and the provisions of section 2, and amendments
57		-	thereto, in each general rate proceeding concluded after August 28,
58		-	2018, the balance of the regulatory asset as of the rate base cutoff date
59		-	shall be included in the public utility's rate base without any offset,
60		-	reduction or adjustment based upon consideration of any other factor
61		-	with the regulatory asset balance arising from deferrals associated with
62		-	qualifying electric plants placed in service after the rate base cutoff date
63		-	to be included in rate base in the next general rate proceeding.
64		-	(c) The regulatory asset balances arising under this section shall HOUSE BILL No. 2527—page 2
65		-	be adjusted to reflect any prudence disallowances ordered by the
66		-	commission. This section shall not be construed to affect existing law
67		-	with respect to the burdens of production and persuasion in general rate
68		-	proceedings for rate base additions.
69		-	(d) Parts of regulatory asset balances created under this section
70		-	that are not included in rate base shall include carrying costs at the
71		-	public utility's weighted average cost of capital, plus applicable federal,
72		-	state and local income or excise taxes. Regulatory asset balances
73		-	arising under this section that are included in rate base shall be
74		-	recovered in rates through a 20-year amortization beginning on the date
75		-	new rates reflecting such amortization take effect.
76		-	(e) (1) Depreciation expense deferred under this section shall
77		-	account for any qualifying electric plant placed into service less
78		-	retirements of the plant replaced by such qualifying electric plant.
79		-	(2) Return deferred under this section shall be determined using
80		-	the weighted average cost of capital applied to the change in plant-
81		-	related rate base caused by the qualifying electric plant, plus applicable
82		-	federal, state and local income or excise taxes. In determining the
83		-	return deferred, the public utility shall account for changes in all plant-
84		-	related accumulated deferred income taxes and changes in accumulated
85		-	depreciation, excluding retirements.
86		-	(f) (1) This section shall only apply to any public utility that has
87		-	elected to make the deferrals for which this section provides and filed a
88		-	notice with the commission of such election.
89		-	(2) A public utility that makes such election shall be authorized to
90		-	make the deferrals authorized by this section until December 31, 2030,
91		-	except that, upon application by such public utility, the commission
92		-	may authorize the public utility to continue to make the deferrals
93		-	authorized by this section until December 31, 2036. Any such
94		-	application shall be filed with the commission on or before December
95		-	31, 2028. The commission shall issue a determination on an application
96		-	filed pursuant to this subsection within 240 days of the date that such
97		-	application is filed. If requested by the public utility, an intervenor in
98		-	the application docket or commission staff, the commission shall hold a
99		-	hearing on such application. When making a determination upon such
100		-	application, the commission may consider factors that the commission
101		-	deems just and reasonable and condition the commission's
102		-	determination on any factors that are relevant to the deferrals
103		-	authorized pursuant to this section. If the commission denies the public
104		-	utility's application, such denial shall only act to prohibit the public
105		-	utility from making such deferrals after December 31, 2030, and shall
106		-	not otherwise affect or terminate any deferral that is authorized to be
107		-	made pursuant to this section or any regulatory or ratemaking treatment
108		-	of the regulatory assets arising from such deferrals.
109		-	(g) The provisions of this section shall not be construed to restrict
110		-	or limit the authority of the commission to authorize a public utility to
111		-	use deferral accounting treatment for any rate base addition, such as a
112		-	new electric generating unit, that is not considered a qualifying electric
113		-	plant pursuant to this section.
	78	+	public utility shall defer to a regulatory asset 100% of all depreciation
	79	+	expense and return associated with all qualifying electric plants recorded
	80	+	to plant-in-service on the utility's books if the public utility has provided
	81	+	notice to the commission of the public utility's election to make such
	82	+	deferrals pursuant to subsection (f). Except as provided in subsection (c),
	83	+	in each general rate proceeding concluded after August 28, 2018, the
	84	+	balance of the regulatory asset as of the rate base cutoff date shall be
	85	+	included in the public utility's rate base without any offset, reduction or
	86	+	adjustment based upon consideration of any other factor with the
	87	+	regulatory asset balance arising from deferrals associated with qualifying
	88	+	electric plants placed in service after the rate base cutoff date to be
	89	+	included in rate base in the next general rate proceeding.
	90	+	(c) The regulatory asset balances arising under this section shall be
	91	+	adjusted to reflect any prudence disallowances ordered by the commission.
	92	+	This section shall not be construed to affect existing law with respect to
	93	+	the burdens of production and persuasion in general rate proceedings for
	94	+	rate base additions.
	95	+	(d) Parts of regulatory asset balances created under this section that
	96	+	are not included in rate base shall include carrying costs at the public
	97	+	utility's weighted average cost of capital, plus applicable federal, state and
	98	+	local income or excise taxes. Regulatory asset balances arising under this
	99	+	section that are included in rate base shall be recovered in rates through a
	100	+	20-year amortization beginning on the date new rates reflecting such
	101	+	amortization take effect.
	102	+	(e) (1) Depreciation expense deferred under this section shall account
	103	+	for all qualifying electric plants placed into service less retirements of the
	104	+	plant replaced by such qualifying electric plant.
	105	+	(2) Return deferred under this section shall be determined using the
	106	+	weighted average cost of capital applied to the change in plant-related rate
	107	+	base caused by the qualifying electric plant, plus applicable federal, state
	108	+	and local income or excise taxes. In determining the return deferred, the
	109	+	public utility shall account for changes in all plant-related accumulated
	110	+	deferred income taxes and changes in accumulated depreciation, excluding
	111	+	retirements.
	112	+	(f) This section shall only apply to any public utility that has elected
	113	+	to make the deferrals for which this section provides and filed a notice
	114	+	with the commission of such election. A public utility that makes such
	115	+	election shall be authorized to make the deferrals authorized by this
	116	+	section.
114	117		New Sec. 2. (a) As used in this section:
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115	161		(1) "Commission" means the state corporation commission.
116		-	(2) "Public utility" means the same as defined in K.S.A. 66-104,
117		-	and amendments thereto.
118		-	(3) "Qualifying regulatory asset" means any regulatory asset
119		-	balance arising pursuant to section 1, and amendments thereto, from the
120		-	rate base cutoff date in the public utility's prior general rate proceeding
121		-	to the rate base cutoff date in the current general rate proceeding in
122		-	which the revenue requirement impact cap is applied.
123		-	(4) "Rate base cutoff date" means the date rate base additions are HOUSE BILL No. 2527—page 3
124		-	accounted for in a general rate proceeding. In the absence of a
125		-	commission order that specifies the "rate base cutoff date," "rate base
126		-	cutoff date" means the date as reflected in any jointly proposed
127		-	procedural schedule submitted by the parties in the applicable general
128		-	rate proceeding or the date that is otherwise agreed to by the parties.
129		-	(5) "Revenue requirement impact cap" means the product of:
130		-	(A)
	162	+	(2) "Large public utility" means a public utility as defined in K.S.A.
	163	+	66-104, and amendments thereto, that serves not less than 20,000 retail
	164	+	customers in Kansas on July 1, 2024.
	165	+	(b) In any general rate proceeding filed pursuant to K.S.A. 66-117,
	166	+	and amendments thereto, the commission shall evaluate any large public
	167	+	utility on a stand-alone basis and, for purposes of establishing the revenue
	168	+	requirement, utilize such public utility's test year capital structure, without
	169	+	regard to the capital structure or investments of any other entities with
	170	+	which such public utility may be affiliated, unless the commission finds
	171	+	based on evidence in the record that the large public utility's parent
	172	+	company does not hold an investment-grade credit rating from at least one
	173	+	nationally recognized credit rating agency. The capital structure shall
	174	+	include the relative proportions of common equity, long-term debt and
	175	+	preferred stock consistent with the public utility's test year.
	176	+	(c) (1) In any general rate proceeding filed pursuant to K.S.A. 66-117,
	177	+	and amendments thereto, a large public utility may elect to base its return
	178	+	on equity on the fully-litigated case 12-month average from the most
	179	+	recent report issued in the regulatory research associates regulatory focus
	180	+	publication, or its successor publication, for the applicable utility type. In
	181	+	the case of large public utilities that are also electric public utilities, fully-
	182	+	litigated observations from cases for electric utilities in restructured
	183	+	jurisdictions or special rider or non-base rate cases in other jurisdictions
	184	+	shall be excluded from the average. If the large public utility elects to use
	185	+	such return on equity, such election shall be conclusive and binding on the
	186	+	commission for purposes of determining the revenue requirement and,
	187	+	except as provided in paragraph (2), no other evidence of return on equity
	188	+	shall be admitted.
	189	+	(2) The commission may establish pursuant to a commission order,
	190	+	operational metrics for large public utilities which, if achieved, may result
	191	+	in an adjustment of up to 25 basis points above or below the regulatory
	192	+	research associates regulatory focus publication, or its successor
	193	+	publication, to the fully-litigated case average return on equity determined
	194	+	pursuant to paragraph (1), where dictated by customer service, operations,
	195	+	changing economic or market conditions or other relevant factors.
	196	+	(d) The commission shall consider all admissible evidence on return
	197	+	on equity and select a reasonable return on equity for a large public utility
	198	+	that does not elect the return on equity treatment in subsection (c).
	199	+	Sec. 3. K.S.A. 2023 Supp. 66-101j is hereby amended to read as
	200	+	follows: 66-101j. (a) Notwithstanding the provisions of K.S.A. 66-101b or
	201	+	66-109, and amendments thereto, the commission shall authorize an
	202	+	electric public utility to implement economic development rate schedules
	203	+	that provide discounts from otherwise applicable standard rates for electric
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132		-	/12 of 1.5% multiplied by the number of months that have
133		-	elapsed from the effective date of new base rates in an electric public
134		-	utility's most recently completed general rate proceeding to the
135		-	effective date of new base rates in the general rate proceeding in which
136		-	the cap is applied; and
137		-	(B) the retail revenue requirement used to set base rates in the
138		-	electric public utility's most recently completed general rate proceeding
139		-	concluded prior to the general rate proceeding in which the cap is
140		-	applied.
141		-	(b) The provisions of this section apply to any public utility that
142		-	has elected to make the deferrals authorized pursuant to section 1, and
143		-	amendments thereto, until the public utility's authority to make such
144		-	deferrals expires pursuant to section 1, and amendments thereto.
145		-	(c) Any part of a public utility's retail revenue requirement used to
146		-	set the public utility's base rates in any general rate proceeding of the
147		-	public utility that is concluded on or after July 1, 2024, and that
148		-	consists of a revenue requirement arising from inclusion in rate base of
149		-	the qualifying regulatory asset balance shall not exceed the revenue
150		-	requirement impact cap. If inclusion in rate base of the full balance of
151		-	the qualifying regulatory asset balance would cause the public utility to
152		-	exceed the revenue requirement impact cap, any part of the qualifying
153		-	regulatory asset balance that exceeds the revenue requirement impact
154		-	cap shall not be included in rate base and the qualifying regulatory
155		-	asset balance shall be reduced accordingly as a penalty.
156		-	Sec. 3. K.S.A. 2023 Supp. 66-101j is hereby amended to read as
157		-	follows: 66-101j. (a) Notwithstanding the provisions of K.S.A. 66-101b
158		-	or 66-109, and amendments thereto, the commission shall authorize an
159		-	electric public utility to implement economic development rate
160		-	schedules that provide discounts from otherwise applicable standard
161		-	rates for electric service for new or expanded facilities of industrial or
162		-	commercial customers that are not in the business of selling or
163		-	providing goods or services directly to the general public. To be eligible
164		-	for such discounts, such customer shall:
165		-	(1) Have incentives from one or more local, regional, state or
166		-	federal economic development agencies to locate such new or
167		-	expanded facilities in the electric public utility's certified service
168		-	territory;
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	247	+	service for new or expanded facilities of industrial or commercial
	248	+	customers that are not in the business of selling or providing goods or
	249	+	services directly to the general public. To be eligible for such discounts,
	250	+	such customer shall:
	251	+	(1) Have incentives from one or more local, regional, state or federal
	252	+	economic development agencies to locate such new or expanded facilities
	253	+	in the electric public utility's certified service territory;
169	254		(2) qualify for service under the electric public utility's non-
170	255		residential and non-lighting rate schedules for such new or expanded
171	256		facility; and
172	257		(3) not receive the discount together with service provided by the
173	258		electric public utility pursuant to any other special contract agreements.
174		-	(b) The discount authorized by this section shall only be
175		-	~~applicable to~~ new facilities or expanded facilities that have:
	259	+	(b) The discount authorized by this section shall only be applicable to
	260	+	new facilities or expanded facilities that have:
176	261		(1) A peak demand that is reasonably projected to be at least 200
177		-	kilowatts within two years of the date the customer first receives
178		-	~~service~~ under the discounted rate and is not the result of shifting
179		-	~~existing demand~~ from other facilities of the customer in the electric
180		-	~~public utility's certified~~ service territory and:
181		-	(A) Has an annual load factor that is reasonably projected to equal
182		-	or exceed the electric public utility's annual system load factor within
183		-	~~two~~ years of the date the customer first receives service under the
184		-	~~discounted~~ rate; or ~~HOUSE BILL No. 2527—page 4~~
	262	+	kilowatts within two years of the date the customer first receives service
	263	+	under the discounted rate and is not the result of shifting existing demand
	264	+	from other facilities of the customer in the electric public utility's certified
	265	+	service territory and:
	266	+	(A) Has an annual load factor that is reasonably projected to equal or
	267	+	exceed the electric public utility's annual system load factor within two
	268	+	years of the date the customer first receives service under the discounted
	269	+	rate; or
185	270		(B) otherwise warrants a discounted rate based on any of the
186	271		following factors:
187	272		(i) The number of new permanent full-time jobs created or the
188	273		percentage increase in existing permanent full-time jobs created;
189	274		(ii) the level of capital investment;
190	275		(iii) additional off-peak usage;
191	276		(iv) curtailable or interruptible load;
192	277		(v) new industry or technology; or
193	278		(vi) competition with existing industrial customers; or
194	279		(2) a peak demand that is reasonably projected to be at least 300
195		-	kilowatts within two years of the date the customer first receives
196		-	service under the discounted rate and is not the result of shifting
197		-	existing demand from other facilities of the customer in the electric
198		-	public utility's certified service territory and:
199		-	(A) An annual load factor that is reasonably projected to be at
200		-	least 55% within two years of the date the customer first receives
201		-	service under the discounted rate; and
202		-	(B) the facility shall, once first achieved, maintain the peak
203		-	demand and load factor for the remaining duration of the discounted
204		-	rate; or
205		-	(3) a peak demand that is reasonably projected to be at least 300
206	280		kilowatts 25 megawatts within two years of the date the customer first
207		-	receives service under the discounted rate and is not the result of
208		-	shifting existing demand from other facilities of the customer in the
209		-	electric public utility's certified service territory and:
210		-	(A) An annual load factor that is reasonably projected to be at
211		-	least 55% within two years of the date the customer first receives
212		-	service under the discounted rate; and
213		-	(B) the facility shall, once first achieved, maintain the peak
214		-	demand and load factor for the remaining duration of the discounted
215		-	rate.
	281	+	receives service under the discounted rate and is not the result of shifting
	282	+	existing demand from other facilities of the customer in the electric public
	283	+	utility's certified service territory and:
	284	+	(A) An annual load factor that is reasonably projected to be at least
	285	+	55% within two years of the date the customer first receives service under
	286	+	the discounted rate; and
	287	+	(B) the facility shall, once first achieved, maintain the peak demand
	288	+	and load factor for the remaining duration of the discounted rate.
216	289		(c) The discount authorized by this section shall be determined by
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	332	+	43 HB 2527 5
217	333		reducing otherwise applicable charges associated with the rate schedule
218		-	applicable to the new or expanded existing facility by a fixed
219		-	percentage for each year of service under the discount for a period of
220		-	up to:
221		-	(1) Five years to facilities that qualify pursuant to subsection (b)
222		-	(1) or (b)(2); and
223		-	(2) 10 years to facilities that qualify pursuant to subsection (b)(3).
224		-	(d) (1) For discounts to facilities that qualify pursuant to
225		-	subsection (b)(1), the average of the annual discount percentages shall
226		-	not:
227		-	(1) exceed 20% for discounts that qualify pursuant to subsection
228		-	(b)(1), but, except that such discounts may be between 5% to 30% in
229		-	any year; and of such five-year period.
230		-	(2) For discounts to facilities that qualify pursuant to subsection
231		-	(b)(2), the average of the annual discount percentages shall not exceed
232		-	40%, except that such discounts may be between 20% and 50% in any
233		-	year of such five-year period.
234		-	(3) For discounts to facilities that qualify pursuant to subsection
235		-	(b)(3), the average of the annual discount percentages shall not
236		-	exceed:
237		-	(A) For the first five years of the discount period, 40% for
238		-	discounts that qualify pursuant to subsection (b)(2), but, except that
239		-	such discounts may be between 20% to 50% in any year of such five-
240		-	year period; and
	334	+	applicable to the new or expanded existing facility by a fixed percentage
	335	+	for each year of service under the discount for a period of up to:
	336	+	(1) Five years to facilities that qualify pursuant to subsection (b)(1);
	337	+	and
	338	+	(2) 10 years to facilities that qualify pursuant to subsection (b)(2).
	339	+	(d) (1) For discounts to facilities that qualify pursuant to subsection
	340	+	(b)(1), the average of the annual discount percentages shall not:
	341	+	(1) exceed 20% for discounts that qualify pursuant to subsection (b)
	342	+	(1), but, except that such discounts may be between 5% to 30% in any
	343	+	year; and of such five-year period.
	344	+	(2) For discounts to facilities that qualify pursuant to subsection (b)
	345	+	(2), the average of the annual discount percentages shall not exceed:
	346	+	(A) For the first five years of the discount period, 40% for discounts
	347	+	that qualify pursuant to subsection (b)(2), but, except that such discounts
	348	+	may be between 20% to 50% in any year of such five-year period; and
241	349		(B) for the final five years of the discount period, 20%, except that
242	350		such discounts may be between 10% and 30% in any year of such five-
243		-	year period. ~~HOUSE BILL No. 2527—page 5~~
	351	+	year period.
244	352		(d)(e) In each general rate proceeding concluded after the effective
245	353		date of this section, the commission shall allocate the reduced level of
246	354		revenues arising from the discounted rates provided for in this section
247		-	through the application of a uniform percentage adjustment to the
248		-	revenue requirement responsibility for all customer classes of the
249		-	electric public utility providing such discounted rate, including the
250		-	classes with customers that qualify for discounts under this section,
251		-	except for rates for service provided to customers under contract rates
252		-	either approved by the commission pursuant to K.S.A. 2023 Supp. 66-
253		-	101i, and amendments thereto, or the commission's general ratemaking
254		-	authority (1) Except as provided in paragraph (2), on and after July 1,
255		-	2024, the difference in revenues generated by applying the discounted
256		-	rates authorized pursuant to this section and the revenues that would
257		-	have been generated without such discounts shall not be imputed into
258		-	the electric public utility's revenue requirement.
259		-	(2) Any reduction in revenue resulting from any discount provided
260		-	pursuant to this section that was tracked by the public utility and
261		-	deferred to a regulatory asset prior to July 1, 2024, shall be
262		-	recoverable in any general rate proceeding initiated on or after July 1,
263		-	2024, through an equal percentage adjustment to the revenue
264		-	requirement responsibility for all customer classes of the public utility,
265		-	including the customer classes that include customers qualifying for
266		-	discounts pursuant to this section.
267		-	(e) (1) The commission shall approve a tracking mechanism to
268		-	track reductions in revenue experienced by the electric public utility
269		-	serving the facility as a result of the discount rate from the date the
270		-	discount rate becomes effective; and
271		-	(2) such reductions in revenue shall be deferred to a regulatory
272		-	asset and shall accrue interest at the weighted average cost of capital
273		-	used by the commission to set the electric public utility's rates in its
274		-	most recently concluded general rate proceeding with the balance of
275		-	such regulatory asset to be included in the rate base and revenue
276		-	requirement of the electric public utility in each of the utility's general
277		-	rate proceedings through an amortization of the balance over a
278		-	reasonable period until fully collected from the utility's non-contract
279		-	rate customers.
280		-	(f) The provisions of this section shall not apply to rates for
281		-	service provided to customers under contract rates approved by the
	355	+	through the application of a uniform percentage adjustment to the revenue
	356	+	requirement responsibility for all customer classes of the electric public
	357	+	utility providing such discounted rate, including the classes with customers
	358	+	that qualify for discounts under this section, except for rates for service
	359	+	provided to customers under contract rates either approved by the
282	360		commission pursuant to K.S.A. 2023 Supp. 66-101i, and amendments
283		-	thereto, or the commission's general ratemaking authority according to
284		-	custom and practice of the commission in place prior to the effective
285		-	date of this section.
286		-	(g) Starting in January 2023, the commission shall biennially
287		-	provide a status report to the legislature about any discounts from
288		-	tariffed rates authorized pursuant to this section. Such report shall
289		-	include the:
	361	+	thereto, or the commission's general ratemaking authority.
	362	+	(e) (1) The commission shall approve a tracking mechanism to track
	363	+	reductions in revenue experienced by the electric public utility serving the
	364	+	facility as a result of the discount rate from the date the discount rate
	365	+	becomes effective; and
	366	+	(2) such reductions in revenue shall be deferred to a regulatory asset
	367	+	and shall accrue interest at the weighted average cost of capital used by the
	368	+	commission to set the electric public utility's rates in its most recently
	369	+	concluded general rate proceeding with the balance of such regulatory
	370	+	asset to be included in the rate base and revenue requirement of the electric
	371	+	public utility in each of the utility's general rate proceedings through an
	372	+	amortization of the balance over a reasonable period until fully collected
	373	+	from the utility's non-contract rate customers.
	374	+	(f) The provisions of this section shall not apply to rates for service
	375	+	provided to customers under contract rates approved by the commission
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	418	+	43 HB 2527 6
	419	+	pursuant to K.S.A. 2023 Supp. 66-101i, and amendments thereto, or the
	420	+	commission's general ratemaking authority according to custom and
	421	+	practice of the commission in place prior to the effective date of this
	422	+	section.
	423	+	(g) Starting in January 2023, the commission shall biennially provide
	424	+	a status report to the legislature about any discounts from tariffed rates
	425	+	authorized pursuant to this section. Such report shall include the:
290	426		(1) Number of entities with such discounts;
291	427		(2) number of entities with increased load;
292	428		(3) number of entities with decreased load;
293		-	(4) aggregate load and change in aggregate load on an annual
294		-	basis;
	429	+	(4) aggregate load and change in aggregate load on an annual basis;
295	430		(5) total subsidy and the subsidy for each individual contract;
296	431		(6) annual and cumulative rate impact on non-contract rate
297	432		customers; and
298	433		(7) estimated economic development impact of entities with
299	434		discounted rates that occurred as a result of such discounts through an
300	435		evaluation of the annual: (A) Total employment for such entities; (B)
301		-	change in employment for such entities; and (C) tax revenue generated
302		-	by such entities. HOUSE BILL No. 2527—page 6
303		-	(h) An electric public utility shall be authorized to only implement
304		-	discounted rates for facilities that qualify for such discounted rates
305		-	pursuant to subsection (b)(3) until December 31, 2030, except that,
306		-	upon application by such public utility, the commission may authorize
307		-	the public utility to continue to implement such discounted rates for
308		-	facilities that qualify for such discounted rates pursuant to subsection
309		-	(b)(3) until December 31, 2036. Any such application shall be filed
310		-	with the commission on or before December 31, 2028. The commission
311		-	shall issue a determination on an application filed pursuant to this
312		-	subsection within 240 days of the date that such application is filed. If
313		-	requested by the public utility, an intervenor in the application docket
314		-	or commission staff, the commission shall hold a hearing on such
315		-	application. When considering and making a determination upon such
316		-	application, the commission may consider factors that the commission
317		-	deems just and reasonable and condition the commission's
318		-	determination on any factors that are relevant to the discounted rates
319		-	for facilities that qualify for such discounted rates pursuant to
320		-	subsection (b)(3). If the commission denies the public utility's
321		-	application, such denial shall only act to prohibit the public utility from
322		-	implementing discounted rates for facilities that qualify for such
323		-	discounted rates pursuant to subsection (b)(3) after December 31,
324		-	2030, and shall not otherwise affect or terminate any discounted rates
325		-	implemented by the public utility pursuant to this section or any
326		-	regulatory or ratemaking treatment of such discounted rates.
327		-	(i) For the purposes of this section:
328		-	(1) "Electric public utility" means the same as prescribed defined
329		-	in K.S.A. 66-101a, and amendments thereto, but does not include any
330		-	such utility that is a cooperative as defined in K.S.A. 66-104d, and
331		-	amendments thereto, or owned by one or more such cooperatives;
	436	+	change in employment for such entities; and (C) tax revenue generated by
	437	+	such entities.
	438	+	(h) For the purposes of this section:
	439	+	(1) "Electric public utility" means the same as prescribed defined in
	440	+	K.S.A. 66-101a, and amendments thereto, but does not include any such
	441	+	utility that is a cooperative as defined in K.S.A. 66-104d, and amendments
	442	+	thereto, or owned by one or more such cooperatives;
332	443		(2) "expanded facility" means a separately metered facility of the
333		-	customer, unless the utility determines that the additional costs of
334		-	~~separate~~ metering of such facility would exceed the associated benefits
335		-	~~or that it~~ would be difficult or impractical to install or read the meter,
336		-	~~that has not~~ received service in the electric utility's certified service
337		-	~~territory in the~~ previous 12 months; and
	444	+	customer, unless the utility determines that the additional costs of separate
	445	+	metering of such facility would exceed the associated benefits or that it
	446	+	would be difficult or impractical to install or read the meter, that has not
	447	+	received service in the electric utility's certified service territory in the
	448	+	previous 12 months; and
338	449		(3) "new facility" means a building of the customer that has not
339		-	received electric service in the electric utility's certified service territory
340		-	in the previous 12 months.
	450	+	received electric service in the electric utility's certified service territory in
	451	+	the previous 12 months.
341	452		Sec. 4. K.S.A. 2023 Supp. 66-1239 is hereby amended to read as
342	453		follows: 66-1239. (a) As used in this section:
343	454		(1) "Commission" means the state corporation commission;
344	455		(2) "contract" means a public utility's contract for the purchase of
345		-	electric power in the amount of at least $5,000,000 $10,000,000
346		-	annually;
	456	+	electric power in the amount of at least $5,000,000 $10,000,000 annually;
347	457		(3) "generating facility" means any electric generating plant or
348	458		improvement to existing generation facilities;
349	459		(4) "stake" means a public utility's whole or fractional ownership
350		-	share or leasehold or other proprietary interest in a generating facility
351		-	or transmission facility;
352		-	(5) "public utility" means the same as defined in K.S.A. 66-104,
353		-	and amendments thereto; and
	460	+	share or leasehold or other proprietary interest in a generating facility or
	461	+	transmission facility;
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	505	+	(5) "public utility" means the same as defined in K.S.A. 66-104, and
	506	+	amendments thereto; and
354	507		(6) "transmission facility" means: (A) Any existing line, and
355	508		supporting structures and equipment, being upgraded for the transfer of
356	509		electricity with an operating voltage of 34.5 kilovolts or more of
357		-	electricity; or (B) any new line, and supporting structures and
358		-	equipment, being constructed for the transfer of electricity with an
359		-	operating voltage of 230 kilovolts or more of electricity.
360		-	(7) "Weighted average cost of capital" means the same as defined
361		-	in section 1, and amendments thereto. HOUSE BILL No. 2527—page 7
362		-	(b) (1) Prior to undertaking the construction of, or participation in,
363		-	a transmission facility, a public utility may file with the commission a
364		-	petition for a determination of the rate-making principles and treatment,
365		-	as proposed by the public utility, that will apply to the recovery in
366		-	wholesale or retail rates of the cost to be incurred by the public utility
367		-	to acquire such public utility's stake in the transmission facility during
368		-	the expected useful life of the transmission facility.
369		-	(2) The commission shall issue an order setting forth the rate-
370		-	making principles and treatment that will be applicable to the public
371		-	utility's stake in the transmission facility in all rate-making proceedings
372		-	on and after such time as the transmission facility is placed in service or
373		-	the term of the contract commences.
374		-	(3) The commission in all proceedings in which the cost of the
375		-	public utility's stake in the transmission facility is considered shall
376		-	utilize the rate-making principles and treatment applicable to the
377		-	transmission facility.
378		-	(4) If the commission fails to issue a determination within 180
379		-	240 days of the date a petition for a determination of rate-making
380		-	principles and treatment is filed, the rate-making principles and
381		-	treatment proposed by the petitioning public utility will be deemed to
382		-	have been approved by the commission and shall be binding for rate-
383		-	making purposes during the useful life of the transmission facility.
384		-	(5) If the commission does not have jurisdiction to set wholesale
385		-	rates for use of the transmission facility the commission need not
386		-	consider rate-making principles and treatment for wholesale rates for
387		-	the transmission facility.
	510	+	electricity; or (B) any new line, and supporting structures and equipment,
	511	+	being constructed for the transfer of electricity with an operating voltage
	512	+	of 230 kilovolts or more of electricity.
	513	+	(7) "Weighted average cost of capital" means the same as defined in
	514	+	section 1, and amendments thereto.
	515	+	(b) (1) Prior to undertaking the construction of, or participation in, a
	516	+	transmission facility, a public utility may file with the commission a
	517	+	petition for a determination of the rate-making principles and treatment, as
	518	+	proposed by the public utility, that will apply to the recovery in wholesale
	519	+	or retail rates of the cost to be incurred by the public utility to acquire such
	520	+	public utility's stake in the transmission facility during the expected useful
	521	+	life of the transmission facility.
	522	+	(2) The commission shall issue an order setting forth the rate-making
	523	+	principles and treatment that will be applicable to the public utility's stake
	524	+	in the transmission facility in all rate-making proceedings on and after
	525	+	such time as the transmission facility is placed in service or the term of the
	526	+	contract commences.
	527	+	(3) The commission in all proceedings in which the cost of the public
	528	+	utility's stake in the transmission facility is considered shall utilize the rate-
	529	+	making principles and treatment applicable to the transmission facility.
	530	+	(4) If the commission fails to issue a determination within 180 days
	531	+	of the date a petition for a determination of rate-making principles and
	532	+	treatment is filed, the rate-making principles and treatment proposed by
	533	+	the petitioning public utility will be deemed to have been approved by the
	534	+	commission and shall be binding for rate-making purposes during the
	535	+	useful life of the transmission facility.
	536	+	(5) If the commission does not have jurisdiction to set wholesale rates
	537	+	for use of the transmission facility the commission need not consider rate-
	538	+	making principles and treatment for wholesale rates for the transmission
	539	+	facility.
388	540		(c) (1) Prior to undertaking the construction of, or participation in,
389	541		acquiring a stake in a generating facility, prior to entering into a new
390		-	contract or prior to retiring or abandoning a generating facility, or
391		-	within a reasonable time after retirement or abandonment if filing
392		-	before retirement or abandonment is not possible under the
393		-	circumstances, a public utility may file with the commission an
394		-	application for a determination of the rate-making principles and
395		-	treatment, as proposed by the public utility, that will apply to:
396		-	(A) Recovery in wholesale or retail rates of the cost to be incurred
397		-	by the public utility to acquire such public utility's stake in the
398		-	generating facility during the expected useful life of the generating
399		-	facility or the recovery in rates of the contract during the term thereof;
400		-	or
401		-	(B) reflection in wholesale or retail rates of the costs to be
402		-	incurred and the cost savings to be achieved by the public utility in
403		-	retiring or abandoning such public utility's stake in the generating
404		-	facility, including, but not limited to, the reasonableness of such
405		-	retirement or abandonment.
406		-	(2) Any utility seeking a determination of rate-making principles
407		-	and treatment under subsection (c)(1) shall as a part of its filing submit
408		-	the following information: (A) A description of the public utility's
	542	+	contract or prior to retiring or abandoning a generating facility, or within a
	543	+	reasonable time after retirement or abandonment if filing before retirement
	544	+	or abandonment is not possible under the circumstances, a public utility
	545	+	may file with the commission an application for a determination of the
	546	+	rate-making principles and treatment, as proposed by the public utility, that
	547	+	will apply to:
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	590	+	43 HB 2527 8
	591	+	(A) Recovery in wholesale or retail rates of the cost to be incurred by
	592	+	the public utility to acquire such public utility's stake in the generating
	593	+	facility during the expected useful life of the generating facility or the
	594	+	recovery in rates of the contract during the term thereof; or
	595	+	(B) reflection in wholesale or retail rates of the costs to be incurred
	596	+	and the cost savings to be achieved by the public utility in retiring or
	597	+	abandoning such public utility's stake in the generating facility, including,
	598	+	but not limited to, the reasonableness of such retirement or abandonment.
	599	+	(2) Any utility seeking a determination of rate-making principles and
	600	+	treatment under subsection (c)(1) shall as a part of its filing submit the
	601	+	following information: (A) A description of the public utility's
409	602		conservation measures; (B) a description of the public utility's demand
410	603		side management efforts; (C) the public utility's ten-year generation and
411	604		load forecasts; and (D) a description of all power supply alternatives
412		-	considered to meet the public utility's load requirements describe how
413		-	~~the~~ public utility's stake in the generating facility is consistent with the
414		-	~~public~~ utility's most recent preferred plan and resource acquisition
415		-	~~strategy~~ submitted to the commission.
	605	+	considered to meet the public utility's load requirements describe how the
	606	+	public utility's stake in the generating facility is consistent with the public
	607	+	utility's most recent preferred plan and resource acquisition strategy
	608	+	submitted to the commission.
416	609		(3) In considering the public utility's supply preferred plan and
417		-	resource acquisition strategy, the commission may consider if the
418		-	public utility issued a request for proposal from a wide audience of
419		-	participants willing and able to meet the needs identified under the
420		-	public utility's generating supply preferred plan, and if the plan selected HOUSE BILL No. 2527—page 8
421		-	by the public utility is reasonable, reliable and efficient.
422		-	(4) For requests by a public utility for a determination of
423		-	ratemaking principles and treatment relating to the abandonment or
424		-	retirement of a nuclear powered or fossil fuel-fired electric generating
425		-	unit, the commission shall not approve the abandonment or retirement
426		-	of such electric generating unit, authorize a surcharge or issuance of
427		-	bonds for the decommissioning of such electric generating unit or take
428		-	any other action that authorizes or allows for the recovery of costs for
429		-	the retirement of such electric generating unit, including stranded asset
430		-	recovery, unless:
431		-	(A) The utility demonstrates that the public utility will be able to
432		-	meet current and reasonably-anticipated future resource adequacy
433		-	requirements of the regional transmission organization or independent
434		-	system operator; and
435		-	(B) the abandonment or retirement is not expected to harm the
436		-	utility's customers or decrease the utility's regional rate
437		-	competitiveness by causing the utility to experience higher costs than
438		-	would be expected by continuing to operate such electric generating
439		-	unit in compliance with applicable law, unless, consistent with the
440		-	integrated resource planning framework utilized by the commission,
441		-	the commission determines that such higher costs are justified by other
442		-	factors that are specified by the commission. The utility shall provide
443		-	the commission with evidence of all known direct and indirect costs of
444		-	abandonment or retirement of the electric generating unit and
445		-	demonstrate that cost savings or avoided or mitigated cost increases to
446		-	customers will occur as a result of the abandonment or retirement of
447		-	the electric generating unit.
448		-	(5) The commission shall issue an order setting forth the rate-
449		-	making principles and treatment that will be applicable to the public
450		-	utility's stake in the generating facility or to the contract in all rate-
451		-	making proceedings and all securitization proceedings on and after
452		-	such time as the generating facility is:
	610	+	resource acquisition strategy, the commission may consider if the public
	611	+	utility issued a request for proposal from a wide audience of participants
	612	+	willing and able to meet the needs identified under the public utility's
	613	+	generating supply preferred plan, and if the plan selected by the public
	614	+	utility is reasonable, reliable and efficient.
	615	+	(4) The commission shall issue an order setting forth the rate-making
	616	+	principles and treatment that will be applicable to the public utility's stake
	617	+	in the generating facility or to the contract in all rate-making proceedings
	618	+	and all securitization proceedings on and after such time as the generating
	619	+	facility is:
453	620		(A) Placed in service or the term of the contract commences; or
454	621		(B) retired or abandoned.
455		-	(5)(6) (A) With respect to a new gas-fired generating facility,
456		-	unless the commission timely elects not to set forth ratemaking
457		-	principles applicable in the future on the grounds that acquiring a
458		-	stake in such a generating facility is not reasonable, then
459		-	notwithstanding any other provision of law, the public utility shall be
460		-	permitted to implement a new rate adjustment mechanism designed to
461		-	recover the return on 100% of amounts recorded to construction work
462		-	in progress on the public utility's books for the public utility's stake in
463		-	such a generating facility, which shall not exceed the definitive cost
464		-	estimate found reasonable by the commission in a proceeding
465		-	conducted pursuant to this section for the public utility's acquisition of
466		-	the public utility's stake in such generating facility, unless otherwise
467		-	ordered by the commission in a subsequent proceeding, at the weighted
468		-	average cost of capital without offset, adjustment or reduction for any
469		-	other issue or consideration, except that such return shall be in lieu of
470		-	any otherwise applicable allowance for funds used during construction
471		-	that would have accrued from and after the effective date of inclusion
472		-	of construction work in progress in such rate adjustment mechanism. A
473		-	rate adjustment mechanism authorized pursuant to this section shall
474		-	become effective not sooner than 365 days after construction of the
475		-	generation facility begins and within 60 days of the filing for the
476		-	establishment of such mechanism by the public utility. As construction
477		-	of the public utility's stake in such a generating facility continues and
478		-	the balance of construction work in progress grows, the rate
479		-	adjustment mechanism in effect shall be subject to periodic increases, HOUSE BILL No. 2527—page 9
480		-	without adjustment, offset or reduction for any other issue or
481		-	consideration, except that such periodic increases shall not occur more
482		-	frequently than once every six months. Except as provided in this
483		-	section, the public utility's customers shall be charged pursuant to such
484		-	rate adjustment mechanism until such time as new base rates reflecting
485		-	the public utility's investment in such generating facility take effect,
486		-	with such base rates to include a deferral for depreciation expense
487		-	incurred and carrying costs on any unrecovered portion of such
488		-	investment at the public utility's weighted average cost of capital as
489		-	determined in the rate-making proceeding setting such base rates that
490		-	occurred between the date such generation facility was placed in
491		-	service on the public utility's books and the effective date of base rates
492		-	in such proceeding. A rate adjustment mechanism authorized pursuant
493		-	to this section shall be permitted to remain in effect for a period not to
494		-	exceed six years.
495		-	(B) If a public utility implements a rate adjustment mechanism
496		-	pursuant to this paragraph and subsequently terminates the initiative
497		-	to acquire a stake in the generating facility, the commission shall have
498		-	the authority, after a hearing is held on the matter, to order the public
499		-	utility to refund customers any amounts collected through such rate
500		-	adjustment mechanism.
501		-	(C) A public utility shall be authorized to implement a rate
502		-	adjustment mechanism pursuant to this paragraph until December 31,
503		-	2030, except that, upon application by such public utility, the
504		-	commission may authorize the public utility to continue to implement a
505		-	rate adjustment mechanism pursuant to this paragraph until December
506		-	31, 2036. Any such application shall be filed with the commission on or
507		-	before December 31, 2028. The commission shall issue a determination
508		-	on an application filed pursuant to this subsection within 240 days of
509		-	the date that such application is filed. If requested by the public utility,
510		-	an intervenor in the application docket or commission staff, the
511		-	commission shall hold a hearing on such application. When
512		-	considering and making a determination upon such application, the
513		-	commission may consider factors that the commission deems just and
514		-	reasonable and condition the commission's determination on any
515		-	factors that are relevant to the rate adjustment mechanism authorized
516		-	pursuant to this paragraph. If the commission denies the public utility's
517		-	application, such denial shall only act to prohibit the public utility from
518		-	implementing a rate adjustment mechanism after December 31, 2030,
519		-	and shall not otherwise affect or terminate any rate adjustment
520		-	mechanism implemented by the public utility pursuant to this section or
521		-	any regulatory or ratemaking treatment of such rate adjustment
522		-	mechanism.
523		-	(7) The commission in all proceedings in which the cost of the
524		-	public utility's stake in the generating facility or the cost of the
525		-	purchased power under the contract is considered shall utilize the rate-
526		-	making principles and treatment applicable to the generating facility,
527		-	contract or retired or abandoned generating facility.
528		-	(6)(8) If the commission fails to issue a determination within 180
529		-	240 days of the date a petition for a determination of rate-making
530		-	principles and treatment is filed, the rate-making principles and
531		-	treatment proposed by the petitioning public utility will be deemed to
532		-	have been approved by the commission and shall be binding for rate-
533		-	making purposes during the useful life of the generating facility, during
534		-	the term of the contract or during the period when the cost of the retired
535		-	or abandoned generating facility is reflected in customer rates.
536		-	(d) (1) It is the intent of the legislature that when a public utility
537		-	files a petition for a determination of ratemaking principles and
538		-	treatment pursuant to subsection (b) or (c), consistent with the state HOUSE BILL No. 2527—page 10
539		-	corporation commission's customary practices, the commission shall:
540		-	(A) Issue a determination on such petition in an expeditious
541		-	manner; and
542		-	(B) when circumstances allow, attempt to issue such
543		-	determination in a period of time that is less than the 240-day deadline
544		-	to issue such determination established pursuant to subsection (b) or
545		-	(c).
546		-	(2) In furtherance of such legislative intent, a public utility that
547		-	intends to file a petition for a determination of ratemaking principles
548		-	and treatment pursuant to this section shall provide notice to the
549		-	commission of such public utility's intent to file such petition not less
550		-	than 30 days before filing a petition pursuant to this section. Upon
551		-	receipt of such notice, the commission shall provide notice of the public
552		-	utility's intent to file a petition pursuant to this section to each person
553		-	or entity that was a party to or an intervenor in the public utility's most
554		-	recently concluded base rate case.
555		-	(3) In any proceeding conducted pursuant to this section, any
556		-	application for intervention in such proceeding shall be submitted not
557		-	later than 10 days after the public utility's filing of a petition for a
558		-	determination of ratemaking principles and treatment. The commission
559		-	shall adopt a procedural schedule for the proceeding not later than 30
560		-	days after a public utility files a petition for a determination of
561		-	ratemaking principles and treatment pursuant to this section.
562		-	(e) The public utility shall have one year from the effective date of
563		-	the determination of the commission to notify the commission whether
564		-	it will construct or participate in the construction of acquire a stake in
565		-	the generating or transmission facility, whether it will perform under
566		-	terms of the contract or whether it will retire or abandon the generating
567		-	facility.
568		-	(e)(f) If the public utility notifies the commission within the one-
569		-	year period that the public utility will not construct or participate in the
570		-	construction of acquire a stake in the generating or transmission
571		-	facility, that it will not perform under the terms of the contract or that it
572		-	will not retire or abandon the generating facility, then the determination
573		-	of rate-making principles pursuant to subsection (b) or (c) shall be of
574		-	no further force or effect, shall have no precedential value in any
575		-	subsequent proceeding, and there shall be no adverse presumption
576		-	applied in any future proceeding as a result of such notification.
577		-	(f)(g) If the public utility notifies the commission under subsection
578		-	(d) (e) that it will construct or participate acquire a stake in a
579		-	generating facility or participate in a purchase power contract and
580		-	subsequently does not, or that it will retire or abandon a generating
581		-	facility and subsequently does not, it will be required to notify the
582		-	commission immediately in the proceeding it initiated pursuant to this
583		-	section and file an alternative supply plan with the commission
584		-	pursuant to subsection (c) within 90 days provide notification of a
585		-	change in the utility's preferred resource plan as required by
586		-	commission order.
587		-	(h) For nuclear powered and coal-fired electric generating
588		-	facilities, if determined by the commission to be just, reasonable and
589		-	necessary for the provision of sufficient and efficient service, an
590		-	electric public utility shall be permitted to:
591		-	(1) Retain such facilities in such utility's rate base;
592		-	(2) recover expenses associated with the operation of such
593		-	facilities that remain in service to provide greater certainty that
594		-	generating capacity will be available to provide essential service to
595		-	customers, including during extreme weather events; and
596		-	(3) recover any portion of such utility's rate base and prudently
597		-	incurred expenses necessary for such facilities: HOUSE BILL No. 2527—page 11
598		-	(A) To operate at a low-capacity factor; or
599		-	(B) that are offline during normal operating conditions and
600		-	providing capacity only.
601		-	(i) The commission shall prepare and submit to the legislature by
602		-	December 1 of each year an annual report based on the preceding
603		-	calendar year that provides:
604		-	(1) The number of requests by utilities to retire electric generating
605		-	units in the state, the nameplate capacity of each of those units and
606		-	whether the request was approved or denied by the commission;
607		-	(2) the impact of any commission-approved retirement of an
608		-	electric generating unit on the:
609		-	(A) Utility's and state's generation capacity by fuel type;
610		-	(B) required capacity reserve margins for the utility and the
611		-	overall capacity reserve margin within the state;
612		-	(C) utility's need for capacity additions or expansions at new or
613		-	existing facilities as a result of the retirement; and
614		-	(D) utility's need for additional power or capacity reserve
615		-	arrangements; and
616		-	(3) whether the retirement resulted in stranded costs for
617		-	ratepayers that will be recovered by the utility through securitization or
618		-	some other charge on customer bills.
619		-	(j) The provisions of subsection (c)(4) shall expire on July 1,
620		-	2034.
621		-	Sec. 5. K.S.A. 66-1264 is hereby amended to read as follows: 66-
622		-	1264. As used in the net metering and easy connection act:
623		-	(a) "Commission" means the state corporation commission.
624		-	(b) "Customer-generator" means the owner or operator of a net
625		-	metered facility which that:
626		-	(1) Is powered by a renewable energy resource;
627		-	(2) is located on a premises owned, operated, leased or otherwise
628		-	controlled by the customer-generator;
629		-	(3) is interconnected and operates in parallel phase and
630		-	synchronization with an affected utility and is in compliance with the
631		-	standards established by the affected utility;
632		-	(4) is intended primarily to offset part or all of the customer-
633		-	generator's own electrical energy requirements such that the customer-
634		-	generator will fully consume the energy output or will deliver the
635		-	remaining energy output and all other services to the utility; and
636		-	(5) contains a an underwriter laboratories listed mechanism,
637		-	approved by the utility, that automatically disables the unit and
638		-	interrupts the flow of electricity back onto the supplier's utility's
639		-	electricity lines in the event that service to the customer-generator is
640		-	interrupted.
641		-	(c) "Export" means power that flows from a customer-generator's
642		-	electrical system through a customer's billing meter and onto the
643		-	utility's electricity lines.
644		-	(d) "Generating capacity" means the maximum amount of
645		-	alternating current power that a customer generator's net metered
646		-	system can produce.
647		-	(e) "Peak demand" shall have the meaning ascribed thereto means
648		-	the same as defined in K.S.A. 66-1257, and amendments thereto.
649		-	(f) "Permission to operate" means the operational date of the
650		-	customer-generator's net metered facility.
651		-	(d)(g) "Renewable energy resources" shall have the meaning
652		-	ascribed thereto means the same as defined in K.S.A. 66-1257, and
653		-	amendments thereto.
654		-	(h) "Supplied" means power that flows from the utility's electricity
655		-	lines through a customer's billing meter and into a customer-
656		-	generator's electrical system. HOUSE BILL No. 2527—page 12
657		-	(e)(i) "Utility" means investor-owned electric utility.
658		-	(j) "Witness test" means a representative of the utility is on-site to
659		-	measure or verify a specific setting or operational condition.
660		-	Sec. 6. K.S.A. 66-1265 is hereby amended to read as follows: 66-
661		-	1265. Each utility shall:
662		-	(a) (1) Except as provided in paragraph (2), make net metering
663		-	available to customer-generators who are in good standing with the
664		-	utility on a first-come, first-served basis, until the total rated generating
665		-	capacity as approved by the utility of all net metered systems equals or
666		-	exceeds one:
667		-	(A) Commencing July 1, 2024, percent 2% of the utility's peak
668		-	demand during the previous year;
669		-	(B) commencing July 1, 2025, 3% of the utility's peak demand
670		-	during the previous year;
671		-	(C) commencing July 1, 2026, 4% of the utility's peak demand
672		-	during the previous year; and
673		-	(D) commencing July 1, 2027, and each year thereafter, 5% of the
674		-	utility's historic highest annual peak demand since 2014.
675		-	(2) The commission may increase the total rated generating
676		-	capacity of all net metered systems to an amount above one percent 5%
677		-	after conducting a hearing pursuant to K.S.A. 66-101d, and
678		-	amendments thereto;
679		-	(b) provide an appropriate class bidirectional meter to the
680		-	customer-generator at no charge, but may charge the customer-
681		-	generator for the cost of any additional metering or distribution
682		-	equipment necessary to accommodate the customer-generator's facility;
683		-	(c) disclose annually the availability of the net metering program
684		-	to each of its customers with the method and manner of disclosure
685		-	being at the discretion of the utility;
686		-	(d) for any customer-generator which that began operating its
687		-	renewable energy resource under an interconnect agreement with the
688		-	utility prior to July 1, 2014, offer to the customer-generator a tariff or
689		-	contract that is identical in electrical energy rates, rate structure and
690		-	monthly charges to the contract or tariff that the customer would be
691		-	assigned if the customer were not an eligible customer-generator and
692		-	shall not charge the customer-generator any additional standby,
693		-	capacity, interconnection or other fee or charge that would not
694		-	otherwise be charged if the customer were not an eligible customer-
695		-	generator; and
696		-	(e) for any customer-generator which that began operating its
697		-	renewable energy resource under an interconnect agreement with the
698		-	utility on or after July 1, 2014, have the option to propose, within an
699		-	appropriate rate proceeding, the application of time-of-use rates,
700		-	minimum bills, incentive programs or other rate structures that would
701		-	apply to all such customer-generators prospectively.
702		-	Sec. 7. K.S.A. 66-1266 is hereby amended to read as follows: 66-
703		-	1266. (a) Prior to January 1, 2030, for any customer-generator that
704		-	began operating a renewable energy resource under an interconnect
705		-	agreement with the utility prior to July 1, 2014:
706		-	(1) If the electricity supplied by the utility exceeds the electricity
707		-	generated exported by the customer-generator during a billing period,
708		-	the customer-generator shall be billed for the net electricity supplied by
709		-	the utility in accordance with normal practices for customers in the
710		-	same rate class.
711		-	(2) If such customer-generator generates exports electricity in
712		-	excess of the customer-generator's monthly consumption electricity
713		-	supplied by the utility, all such net excess energy (NEG) generation,
714		-	expressed in kilowatt-hours, shall be carried forward from month-to-
715		-	month and credited at a ratio of one-to-one against the customer- HOUSE BILL No. 2527—page 13
716		-	generator's energy consumption electricity supplied by the utility,
717		-	expressed in kilowatt-hours, in subsequent months.
718		-	(3) Any interconnect agreement between such customer-generator
719		-	and a utility and all such NEG generated net excess generation
720		-	exported under such agreement shall be transferrable transferable and
721		-	continue in place until January 1, 2030, regardless of whether there is a
722		-	change in ownership of the property on which where the renewable
723		-	energy resource is located.
724		-	(4) Any NEG resulting net excess generation exported from
725		-	renewable energy resources that are installed on and after July 1, 2014,
726		-	but are part of an installation of a renewable energy resource that was
727		-	operating prior to July 1, 2014, shall be carried forward and credited to
728		-	the customer as if such resources had begun operation prior to July 1,
729		-	2014.
730		-	(5) Any net excess generation credit remaining in a net-metering
731		-	customer's account on March 31 of each year shall expire.
732		-	(b) For any customer-generator that began operating a renewable
733		-	energy resource under an interconnect agreement with the utility on and
734		-	after July 1, 2014:
735		-	(1) If the electricity supplied by the utility exceeds the electricity
736		-	generated exported by the customer-generator during a billing period,
737		-	the customer-generator shall be billed for the net electricity supplied by
738		-	the utility.
739		-	(2) If such customer-generator generates exports electricity in
740		-	excess of the customer-generator's monthly consumption electricity
741		-	supplied by the utility, all such NEG net excess generation remaining in
742		-	such customer-generator's account at the end of each billing period
743		-	shall be credited to the customer at a rate of at least 100% of the
744		-	utility's monthly system average cost of energy per kilowatt hour.
745		-	(c) Except as otherwise provided in subsection (d), on and after
746		-	January 1, 2030, for all customer-generators, regardless of when such
747		-	customer-generators entered into an interconnect agreement with the
748		-	utility:
749		-	(1) If the electricity supplied by the utility exceeds the electricity
750		-	generated exported by the customer-generator during a billing period,
751		-	the customer-generator shall be billed for the net electricity supplied by
752		-	the utility; and
753		-	(2) if such customer-generator generates exports electricity in
754		-	excess of the customer-generator's monthly consumption electricity
755		-	supplied by the utility, all such NEG net excess generation remaining in
756		-	a customer-generator's account at the end of each billing period shall be
757		-	credited to the customer at a rate of at least 100% of the utility's
758		-	monthly system average cost of energy per kilowatt hour.
759		-	(d) For any customer-generator that began operating a renewable
760		-	energy resource under an interconnect agreement with the utility on
761		-	and after July 1, 2024, and receives service on an optional time-
762		-	varying rate:
763		-	(1) The utility shall measure the net electrical energy exported or
764		-	supplied during the billing period for each of the time of use periods
765		-	established by the applicable time-varying rate schedule that applies to
766		-	the customer-generator's rate class in accordance with normal
767		-	metering practices for customers that take service on time-varying
768		-	rates in that same rate class;
769		-	(2) electricity supplied by the utility shall be netted against the
770		-	electricity exported by the customer-generator during each applicable
771		-	time of use period;
772		-	(3) if the electricity supplied by the utility exceeds the electricity
773		-	exported by the customer-generator during any time of use period, the
774		-	customer-generator shall be billed for the net electricity supplied by HOUSE BILL No. 2527—page 14
775		-	the utility in each such time of use period as well as all other charges
776		-	as such charges are applied to non-customer-generators in the same
777		-	rate class; and
778		-	(4) if the electricity exported by the customer-generator exceeds
779		-	the electricity supplied by the utility during any time of use period, the
780		-	customer-generator shall be credited at a rate of at least 100% of the
781		-	utility's monthly system average cost of energy per kilowatt hour, with
782		-	any net credit, and net of all other charges as such charges are applied
783		-	to non-customer-generators in the same rate class, applied to the next
784		-	billing period.
785		-	Sec. 8. K.S.A. 66-1267 is hereby amended to read as follows: 66-
786		-	1267. (a) For customer-generators that began operating a renewable
787		-	energy resource under an interconnect agreement with the utility prior
788		-	to July 1, 2014:
789		-	(1) Such utility shall allow:
790		-	(A) Residential customer-generators to generate export electricity
791		-	subject to net metering up to 25 kilowatts; and
792		-	(B) commercial, industrial, school, local government, state
793		-	government, federal government, agricultural and institutional
794		-	customer-generators to generate export electricity subject to net
795		-	metering up to 200 kilowatts.
796		-	(2) Nothing in this act shall be construed to prevent such
797		-	customer-generators from installing additional renewable energy
798		-	resources after July 1, 2014, that will generate electricity pursuant to
799		-	the restrictions contained in paragraph (1).
800		-	(b) For customer-generators that begin operating a renewable
801		-	energy resource under an interconnect agreement with the utility after
802		-	July 1, 2014, such utility shall allow:
803		-	(1) All residential customer-generators to generate electricity
804		-	subject to net metering up to 15 kilowatts;
805		-	(2) commercial, industrial, religious institution, local government,
806		-	state government, federal government, agricultural and industrial
807		-	customer-generators to generate electricity subject to net metering up to
808		-	100 kilowatts, unless otherwise agreed to by the utility and the
809		-	customer-generator; and
810		-	(3) school customer-generators to generate electricity subject to
811		-	net metering up to 150 kilowatts. For the purpose of this section,
812		-	"school" means any postsecondary educational institution as defined in
813		-	K.S.A. 74-3201b, and amendments thereto, or any public or private
814		-	school which provides instruction for students enrolled in grade
815		-	kindergarten or grades one through 12 customer-generators to export
816		-	electricity subject to net metering up to 150 kilowatts alternating
817		-	current.
818		-	(c) Customer-generators shall appropriately size their generation
819		-	export capacity to their expected load as follows:
820		-	(1) (A) (i) Divide the customer-generator's historic consumption
821		-	in kilowatt-hours for the previous 12-month period by 8,760; and
822		-	(ii) divide the quotient calculated pursuant to paragraph (1)(A)(i)
823		-	by a capacity factor of 0.144; or
824		-	(B) if the customer-generator does not have historic consumption
825		-	data that adequately reflects the customer's consumption at such
826		-	premises, the customer-generator's historic consumption for the
827		-	previous 12-month period shall be 7.15 kilowatt-hours per square foot
828		-	of conditioned space; and
829		-	(2) round up the quotient calculated pursuant to paragraph (1)(A)
830		-	(i) or the amount determined pursuant to paragraph (1)(B) to the
831		-	nearest standard size as follows:
832		-	(A) Between two kilowatts alternating current power and 20
833		-	kilowatts alternating current power, round up to the nearest two HOUSE BILL No. 2527—page 15
834		-	kilowatts alternating current power increment; and
835		-	(B) between 20 kilowatts alternating current power and 150
836		-	kilowatts alternating current power, round up to the nearest five
837		-	kilowatts alternating current power increment.
838		-	(d) For customer-generators that operate a renewable energy
839		-	resource under an interconnect agreement with the affected utility on
840		-	or after January 1, 2026:
841		-	(1) The generating capacity of a customer-generator's renewable
842		-	energy resource as approved by the affected utility shall not exceed
843		-	export capacity by more than 50%; and
844		-	(2) energy storage capacity, including electric vehicles or other
845		-	portable energy storage devices, shall not be included in any sizing
846		-	formulas unless the energy storage device has the ability to add export
847		-	capacity and is not part of an export limited system.
848		-	(e) For customer-generators that operate a generation resource
849		-	designed to export an amount of power that differs from the system's
850		-	generating capacity:
851		-	(1) The customer-generator shall own and maintain any necessary
852		-	export limiting device;
853		-	(2) protections shall be in place to restrict the export limiting
854		-	device settings to qualified persons;
855		-	(3) the utility shall have the option to require a witness test of the
856		-	export limiting device's function or set points prior to granting
857		-	permission to operate;
858		-	(4) the export capacity of the system shall not be increased
859		-	without prior approval from the utility;
860		-	(5) the customer-generator shall allow the utility to perform
861		-	periodic witness testing of the export limiting device's function or
862		-	settings upon request;
863		-	(6) if the export limiting device's settings are incorrect or if the
864		-	device fails to limit the export of power below the designed export
865		-	capacity for more than 15 minutes in any single event, the customer-
866		-	generator shall cease operation of the system until repair or
867		-	reprogramming of the limiting device is completed; and
868		-	(7) the utility shall not restrict the brand or model of the limiting
869		-	device if the device is approved by the generator's manufacturer or is
870		-	underwriter laboratories listed to perform such operations in
871		-	conjunction with the customer-generator's system. HOUSE BILL No. 2527—page 16
872		-	Sec. 9. K.S.A. 66-1264, 66-1265, 66-1266 and 66-1267 and
873		-	K.S.A. 2023 Supp. 66-101j and 66-1239 are hereby repealed.
874		-	Sec. 10. This act shall take effect and be in force from and after its
	622	+	(5) With respect to a new gas-fired generating facility, unless the
	623	+	commission timely elects not to set forth ratemaking principles applicable
	624	+	in the future on the grounds that acquiring a stake in such a generating
	625	+	facility is not reasonable, then notwithstanding any other provision of law,
	626	+	the public utility shall be permitted to implement a new rate adjustment
	627	+	mechanism designed to recover the return on 100% of amounts recorded
	628	+	to construction work in progress on the public utility's books for the public
	629	+	utility's stake in such a generating facility at the weighted average cost of
	630	+	capital without offset, adjustment or reduction for any other issue or
	631	+	consideration, except that such return shall be in lieu of any otherwise
	632	+	applicable allowance for funds used during construction that would have
	633	+	accrued from and after the effective date of such rate adjustment
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	676	+	43 HB 2527 9
	677	+	mechanism. A rate adjustment mechanism authorized pursuant to this
	678	+	section shall become effective not sooner than 365 days after construction
	679	+	of the generation facility begins and within 30 days of the filing for the
	680	+	establishment of such mechanism by the public utility. As construction of
	681	+	the public utility's stake in such a generating facility continues and the
	682	+	balance of construction work in progress grows, the rate adjustment
	683	+	mechanism in effect shall be subject to periodic increases, without
	684	+	adjustment, offset or reduction for any other issue or consideration, except
	685	+	that such periodic increases shall not occur more frequently than once
	686	+	every six months. Except as provided in this section, the public utility's
	687	+	customers shall be charged pursuant to such rate adjustment mechanism
	688	+	until such time as new base rates reflecting the public utility's investment
	689	+	in such generating facility take effect, with such base rates to include
	690	+	carrying costs on any unrecovered portion of such investment at the public
	691	+	utility's weighted average cost of capital as determined in the rate-making
	692	+	proceeding setting such base rates that occurred between the date such
	693	+	generation facility was placed in service on the public utility's books and
	694	+	the effective date of base rates in such proceeding. A rate adjustment
	695	+	mechanism authorized pursuant to this section shall be permitted to
	696	+	remain in effect for a period not to exceed six years.
	697	+	(6) The commission in all proceedings in which the cost of the public
	698	+	utility's stake in the generating facility or the cost of the purchased power
	699	+	under the contract is considered shall utilize the rate-making principles and
	700	+	treatment applicable to the generating facility, contract or retired or
	701	+	abandoned generating facility.
	702	+	(6)(7) If the commission fails to issue a determination within 180
	703	+	days of the date a petition for a determination of rate-making principles
	704	+	and treatment is filed, the rate-making principles and treatment proposed
	705	+	by the petitioning public utility will be deemed to have been approved by
	706	+	the commission and shall be binding for rate-making purposes during the
	707	+	useful life of the generating facility, during the term of the contract or
	708	+	during the period when the cost of the retired or abandoned generating
	709	+	facility is reflected in customer rates.
	710	+	(d) The public utility shall have one year from the effective date of
	711	+	the determination of the commission to notify the commission whether it
	712	+	will construct or participate in the construction of acquire a stake in the
	713	+	generating or transmission facility, whether it will perform under terms of
	714	+	the contract or whether it will retire or abandon the generating facility.
	715	+	(e) If the public utility notifies the commission within the one-year
	716	+	period that the public utility will not construct or participate in the
	717	+	construction of acquire a stake in the generating or transmission facility,
	718	+	that it will not perform under the terms of the contract or that it will not
	719	+	retire or abandon the generating facility, then the determination of rate-
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	763	+	making principles pursuant to subsection (b) or (c) shall be of no further
	764	+	force or effect, shall have no precedential value in any subsequent
	765	+	proceeding, and there shall be no adverse presumption applied in any
	766	+	future proceeding as a result of such notification.
	767	+	(f) If the public utility notifies the commission under subsection (d)
	768	+	that it will construct or participate acquire a stake in a generating facility
	769	+	or participate in a purchase power contract and subsequently does not, or
	770	+	that it will retire or abandon a generating facility and subsequently does
	771	+	not, it will be required to notify the commission immediately in the
	772	+	proceeding it initiated pursuant to this section and file an alternative
	773	+	supply plan with the commission pursuant to subsection (c) within 90 days
	774	+	provide notification of a change in the utility's preferred resource plan as
	775	+	required by commission order.
	776	+	Sec. 5. K.S.A. 2023 Supp. 66-101j and 66-1239 are hereby repealed.
	777	+	Sec. 6. This act shall take effect and be in force from and after its
875	778		publication in the statute book.
876		-	I hereby certify that the above BILL originated in the HOUSE, and was
877		-	adopted by that body
878		-
879		-	HOUSE adopted
880		-	Conference Committee Report
881		-
882		-	Speaker of the House.
883		-
884		-	Chief Clerk of the House.
885		-	Passed the SENATE
886		-	as amended
887		-	SENATE adopted
888		-	Conference Committee Report
889		-
890		-	President of the Senate.
891		-
892		-	Secretary of the Senate.
893		-	APPROVED
894		-
895		-
896		-	Governor.
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