As Amended by House Committee
As Amended by Senate Committee
Session of 2024
SENATE BILL No. 455
By Committee on Utilities
2-6
AN ACT concerning electric public utilities; relating to the state
corporation commission; extending the timeline for the commission to
make a predetermination of ratemaking principles and treatment
prior to the construction of or acquiring a stake in an electric
generation or transmission facility; establishing procedural
requirements to support the timely and expeditious completion of
such proceedings; prohibiting the commission from authorizing the
retirement of nuclear powered and fossil fuel-fired electric
generating facilities unless certain requirements are met; authorizing
electric public utilities to retain certain electric generating facilities in
the utility's rate base; requiring the commission to report annually on
public utility requests to retire fossil fuel-fired electric generating
facilities; amending K.S.A. 2023 Supp. 66-1239 and repealing the
existing section.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 2023 Supp. 66-1239 is hereby amended to read as
follows: 66-1239. (a) As used in this section:
(1) "Commission" means the state corporation commission;
(2) "contract" means a public utility's contract for the purchase of
electric power in the amount of at least $5,000,000 annually;
(3) "generating facility" means any electric generating plant or
improvement to existing generation facilities;
(4) "stake" means a public utility's whole or fractional ownership
share or leasehold or other proprietary interest in a generating facility or
transmission facility;
(5) "public utility" means the same as defined in K.S.A. 66-104, and
amendments thereto; and
(6) "transmission facility" means: (A) Any existing line, and
supporting structures and equipment, being upgraded for the transfer of
electricity with an operating voltage of 34.5 kilovolts or more of
electricity; or (B) any new line, and supporting structures and equipment,
being constructed for the transfer of electricity with an operating voltage
of 230 kilovolts or more of electricity.
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(b) (1) Prior to undertaking the construction of, or participation in, a
transmission facility, a public utility may file with the commission a
petition for a determination of the rate-making principles and treatment, as
proposed by the public utility, that will apply to the recovery in wholesale
or retail rates of the cost to be incurred by the public utility to acquire such
public utility's stake in the transmission facility during the expected useful
life of the transmission facility.
(2) The commission shall issue an order setting forth the rate-making
principles and treatment that will be applicable to the public utility's stake
in the transmission facility in all rate-making proceedings on and after
such time as the transmission facility is placed in service or the term of the
contract commences.
(3) The commission in all proceedings in which the cost of the public
utility's stake in the transmission facility is considered shall utilize the rate-
making principles and treatment applicable to the transmission facility.
(4) If the commission fails to issue a determination within 180 240
days of the date a petition for a determination of rate-making principles
and treatment is filed, the rate-making principles and treatment proposed
by the petitioning public utility will be deemed to have been approved by
the commission and shall be binding for rate-making purposes during the
useful life of the transmission facility.
(5) If the commission does not have jurisdiction to set wholesale rates
for use of the transmission facility the commission need not consider rate-
making principles and treatment for wholesale rates for the transmission
facility.
(c) (1) Prior to undertaking the construction of, or participation in, a
generating facility, prior to entering into a new contract or prior to retiring
or abandoning a generating facility, or within a reasonable time after
retirement or abandonment if filing before retirement or abandonment is
not possible under the circumstances, a public utility may file with the
commission an application for a determination of the rate-making
principles and treatment, as proposed by the public utility, that will apply
to:
(A) Recovery in wholesale or retail rates of the cost to be incurred by
the public utility to acquire such public utility's stake in the generating
facility during the expected useful life of the generating facility or the
recovery in rates of the contract during the term thereof; or
(B) reflection in wholesale or retail rates of the costs to be incurred
and the cost savings to be achieved by the public utility in retiring or
abandoning such public utility's stake in the generating facility, including,
but not limited to, the reasonableness of such retirement or abandonment.
(2) Any utility seeking a determination of rate-making principles and
treatment under subsection (c)(1) shall as a part of its filing submit the
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following information: (A) A description of the public utility's
conservation measures; (B) a description of the public utility's demand
side management efforts; (C) the public utility's ten-year generation and
load forecasts; and (D) a description of all power supply alternatives
considered to meet the public utility's load requirements.
(3) In considering the public utility's supply plan, the commission
may consider if the public utility issued a request for proposal from a wide
audience of participants willing and able to meet the needs identified under
the public utility's generating supply plan, and if the plan selected by the
public utility is reasonable, reliable and efficient.
(4) In any proceeding conducted pursuant to this subsectionFor
requests by a public utility for a determination of ratemaking
principles and treatment relating to the abandonment or retirement of a
nuclear powered or fossil fuel-fired electric generating unit, the
commission shall not approve the abandonment or retirement of such
electric generating unit, authorize a surcharge or issuance of bonds for
the decommissioning of such electric generating unit or take any other
action that authorizes or allows for the recovery of costs for the
retirement of such electric generating unit, including recovery of
stranded assets asset recovery, unless the commission determines that
relevant evidence sufficiently supports the commission to find that:
(A) The utility will replace the abandoned or retired electric
generating unit with new electric generating capacity that:
(i) Is equal to or greater than the amount of electric generating
capacity necessary to meet the minimum reserve capacity requirements
established pursuant to accreditation rules of the regional transmission
organization or independent system operator responsible for accrediting
capacity within the utility's service area based on an estimate of the
average replacement capacity at the time construction of such
replacement capacity begins;
(ii) is dispatchable by either the utility or the regional transmission
organization or independent system operator responsible for balancing
load within the utility's service area; and
(iii) maintains or improves the reliability and resilience of the
electric transmission grid; demonstrates that the public utility will be
able to meet current and reasonably-anticipated future resource
adequacy requirements of the regional transmission organization or
independent system operator; and
(B) the abandonment or retirement is not expected to harm the
utility's customers or decrease the utility's regional rate competitiveness
by causing the utility to experience higher costs than would be expected
by continuing to operate such electric generating unit in compliance
with applicable law, unless, consistent with the integrated resource
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planning framework utilized by the commission, the commission
determines that such higher costs are justified by other factors that are
specified by the commission. The utility shall provide the commission
with evidence of all known direct and indirect costs of abandonment or
retirement of the electric generating unit and demonstrate that cost
savings or avoided or mitigated cost increases to customers will occur as
a result of the abandonment or retirement of the electric generating
unit; and
(C) unless the abandonment or retirement of the electric generating
unit is required to comply with federal or state laws, such abandonment
or retirement is for economic purposes and for the benefit of customers
and not principally based on achieving environmental, social and
governance goals that are not mandated by federal or state laws.
(5) The commission shall issue an order setting forth the rate-making
principles and treatment that will be applicable to the public utility's stake
in the generating facility or to the contract in all rate-making proceedings
on and after such time as the generating facility is:
(A) Placed in service or the term of the contract commences; or
(B) retired or abandoned.
(5)(6) The commission in all proceedings in which the cost of the
public utility's stake in the generating facility or the cost of the purchased
power under the contract is considered shall utilize the rate-making
principles and treatment applicable to the generating facility, contract or
retired or abandoned generating facility.
(6)(7) If the commission fails to issue a determination within 180 240
days of the date a petition for a determination of rate-making principles
and treatment is filed, the rate-making principles and treatment proposed
by the petitioning public utility will be deemed to have been approved by
the commission and shall be binding for rate-making purposes during the
useful life of the generating facility, during the term of the contract or
during the period when the cost of the retired or abandoned generating
facility is reflected in customer rates.
(d) (1) It is the intent of the legislature that when a public utility
files a petition for a determination of ratemaking principles and
treatment pursuant to subsection (b) or (c), consistent with the state
corporation commission's customary practices, the commission shall:
(A) Issue a determination on such petition in an expeditious
manner; and
(B) when circumstances allow, attempt to issue such determination
in a period of time that is less than the 240-day deadline to issue such
determination established pursuant to subsection (b) or (c).
(2) In furtherance of such legislative intent, a public utility that
intends to file a petition for a determination of ratemaking principles
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and treatment pursuant to this section shall provide notice to the
commission of such public utility's intent to file such petition not less
than 30 days before filing a petition pursuant to this section. Upon
receipt of such notice, the commission shall provide notice of the public
utility's intent to file a petition pursuant to this section to each person or
entity that was a party to or an intervenor in the public utility's most
recently concluded base rate case.
(3) In any proceeding conducted pursuant to this section, any
application for intervention in such proceeding shall be submitted not
later than 10 days after the public utility's filing of a petition for a
determination of ratemaking principles and treatment. The commission
shall adopt a procedural schedule for the proceeding not later than 30
days after a public utility files a petition for a determination of
ratemaking principles and treatment pursuant to this section.
(e) The public utility shall have one year from the effective date of
the determination of the commission to notify the commission whether it
will construct or participate in the construction of the generating or
transmission facility, whether it will perform under terms of the contract or
whether it will retire or abandon the generating facility.
(e)(f) If the public utility notifies the commission within the one-year
period that the public utility will not construct or participate in the
construction of the generating or transmission facility, that it will not
perform under the terms of the contract or that it will not retire or abandon
the generating facility, then the determination of rate-making principles
pursuant to subsection (b) or (c) shall be of no further force or effect, shall
have no precedential value in any subsequent proceeding, and there shall
be no adverse presumption applied in any future proceeding as a result of
such notification.
(f)(g) If the public utility notifies the commission under subsection
(d) (e) that it will construct or participate in a generating facility or
purchase power contract and subsequently does not, or that it will retire or
abandon a generating facility and subsequently does not, it will be required
to notify the commission immediately and file an alternative supply plan
with the commission pursuant to subsection (c) within 90 days.
(g)(h) For nuclear powered and coal-fired electric generating
facilities, if determined by the commission to be just, reasonable and
necessary for the provision of sufficient and efficient service, an electric
public utility shall be permitted to:
(1) Retain such facilities in such utility's rate base;
(2) recover expenses associated with the operation of such facilities
that remain in service to provide greater certainty that generating capacity
will be available to provide essential service to customers, including
during extreme weather events; and
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(3) recover any portion of such utility's rate base and prudently
incurred expenses necessary for such facilities:
(A) To operate at a low-capacity factor; or
(B) that are offline during normal operating conditions and providing
capacity only.
(i) The commission shall prepare and submit an annual report to
the legislature by December 1 of each year providing an annual report
based on the preceding calendar year that provides:
(1) The number of requests by utilities to retire electric generating
units in the state, the nameplate capacity of each of those units and
whether the request was approved or denied by the commission;
(2) the impact of any commission-approved retirement of an
electric generating unit on the:
(A) Utility's and state's generation capacity by fuel mix type;
(B) required capacity reserve margins for the utility and the overall
capacity reserve margin within the state;
(C) utility's need for capacity additions or expansions at new or
existing facilities as a result of the retirement; and
(D) utility's need for additional power or capacity reserve
arrangements; and
(3) whether the retirement resulted in stranded costs for ratepayers
that will be recovered by the utility through securitization or some other
charge on customer bills.
(j) The provisions of subsection (c)(4) shall expire on July 1, 2034.
Sec. 2. K.S.A. 2023 Supp. 66-1239 is hereby repealed.
Sec. 3. This act shall take effect and be in force from and after its
publication in the statute book.
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