SECONDREGULARSESSION
HOUSECOMMITTEESUBSTITUTEFOR
HOUSEBILLNO.2541
102NDGENERALASSEMBLY
5356H.02C DANARADEMANMILLER,ChiefClerk
ANACT
Torepealsection393.1400,RSMo,andtoenactinlieuthereofonenewsectionrelatingto
deferralsbyelectricalcorporations.
BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows:
SectionA.Section393.1400,RSMo,isrepealedandonenewsectionenactedinlieu
2thereof,tobeknownassection393.1400,toreadasfollows:
393.1400.1.Forpurposesofthissection,thefollowingtermsshallmean:
2 (1)"Commission",thepublicservicecommission;
3 (2)"Electricalcorporation",thesameasdefinedinsection386.020,butshallnot
4includeanelectricalcorporationasdescribedinsubsection2ofsection393.110;
5 (3)"Qualifyingelectricplant",allrate-baseadditions,exceptrate-baseadditionsfor
6newcoal-firedgeneratingunits,newnucleargeneratingunits,[newnaturalgasunits,] orrate-
7baseadditionsthatincreaserevenuesbyallowingservicetonewcustomerpremises;
8 (4)"Rate-basecutoffdate",thedaterate-baseadditionsareaccountedforinageneral
9rateproceeding.Intheabsenceofacommissionorderthatspecifiestherate-basecutoffdate,
10suchdateasreflectedinanyjointlyproposedproceduralschedulesubmittedbythepartiesin
11theapplicablegeneralrateproceeding,orasotherwiseagreedtobysuchparties,shallbe
12used;
13 (5)"Weightedaveragecostofcapital",thereturnonratebaseusedtodeterminethe
14revenuerequirementintheelectricalcorporation'smostrecentlycompletedgeneralrate
15proceeding;provided,thatintheabsenceofacommissiondeterminationofthereturnonrate
16basewithinthethree-yearperiodpriortoAugust28,2022,theweightedaveragecostof
17capitalshallbedeterminedusingtheelectricalcorporation'sactualcapitalstructureasof
18December31,2021,excludingshort-termdebt,theelectricalcorporation'sactualcostoflong-
EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis
intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 19termdebtandpreferredstockasofDecember31,2021,andacostofcommonequityofnine
20andone-halfpercent.
21 2.(1)Notwithstandinganyotherprovisionofthischaptertothecontrary,electrical
22corporationsshalldefertoaregulatoryasset[eighty-five] onehundredpercentofall
23depreciationexpenseandreturnassociatedwithallqualifyingelectricplantrecordedtoplant-
24in-serviceontheutility'sbookscommencingonorafterAugust28,2018,iftheelectrical
25corporationhasmadetheelectionprovidedforbysubsection5ofthissectionbythatdate,or
26onthedatesuchelectionismadeiftheelectionismadeafterAugust28,2018.Ineach
27generalrateproceedingconcludedafterAugust28,2018,thebalanceoftheregulatoryasset
28asoftherate-basecutoffdateshall,subjectonlytothecapprovidedforinsection393.1655
29orsection393.1656,asapplicable,beincludedintheelectricalcorporation'sratebasewithout
30anyoffset,reduction,oradjustmentbaseduponconsiderationofanyotherfactor,otherthan
31asprovidedforinsubdivision(2)ofthissubsection,withtheregulatoryassetbalancearising
32fromdeferralsassociatedwithqualifyingelectricplantplacedinserviceaftertherate-base
33cutoffdatetobeincludedinratebaseinthenextgeneralrateproceeding.Theexpirationof
34thissectionshallnotaffectthecontinuedinclusioninratebaseandamortizationofregulatory
35assetbalancesthataroseunderthissectionpriortosuchexpiration.
36 (2)Theregulatoryassetbalancesarisingunderthissectionshallbeadjustedtoreflect
37anyprudencedisallowancesorderedbythecommission.Theprovisionsofthissectionshall
38notbeconstruedtoaffectexistinglawrespectingtheburdensofproductionandpersuasionin
39generalrateproceedingsforrate-baseadditions.
40 (3)Partsofregulatoryassetbalancescreatedunderthissectionthatarenotyetbeing
41recoveredthroughratesshallincludecarryingcostsattheelectricalcorporation'sweighted
42averagecostofcapital,plusapplicablefederal,state,andlocalincomeorexcisetaxes.
43Regulatoryassetbalancesarisingunderthissectionandincludedinratebaseshallbe
44recoveredinratesthroughatwenty-yearamortizationbeginningonthedatenewrates
45reflectingsuchamortizationtakeeffect.
46 3.(1)Depreciationexpensedeferredunderthissectionshallaccountforall
47qualifyingelectricplantplacedintoservicelessretirementsofplantreplacedbysuch
48qualifyingelectricplant.
49 (2)Returndeferredunderthissectionshallbedeterminedusingtheweightedaverage
50costofcapitalappliedtothechangeinplant-relatedratebasecausedbythequalifyingelectric
51plant,plusapplicablefederal,state,andlocalincomeorexcisetaxes.Indeterminingthe
52returndeferred,theelectricalcorporationshallaccountforchangesinallplant-related
53accumulateddeferredincometaxesandchangesinaccumulateddepreciation,excluding
54retirements.
HCSHB2541 2 55 4.BeginningFebruary28,2019,andbyeachFebruarytwenty-eighththereafterwhile
56theelectricalcorporationisallowedtomakethedeferralsprovidedforbysubsection2ofthis
57section,electricalcorporationsthatdeferdepreciationexpenseandreturnauthorizedunder
58thissectionshallsubmittothecommissionafive-yearcapitalinvestmentplansettingforth
59thegeneralcategoriesofcapitalexpenditurestheelectricalcorporationwillpursuein
60furtheranceofreplacing,modernizing,andsecuringitsinfrastructure.Theplanshallalso
61includeaspecificcapitalinvestmentplanforthefirstyearofthefive-yearplanconsistent
62withthelevelofspecificityusedforannualcapitalbudgetingpurposes.Foreachprojectin
63thespecificcapitalinvestmentplanonwhichconstructioncommencesonorafterJanuary
64firstoftheyearinwhichtheplanissubmitted,andwherethecostoftheprojectisestimated
65toexceedtwentymilliondollars,theelectricalcorporationshallidentifyallcostsandbenefits
66thatcanbequantitativelyevaluatedandshallfurtheridentifyhowthosecostsandbenefitsare
67quantified.Foranycostorbenefitwithrespecttosuchaprojectthattheelectrical
68corporationbelievescannotbequantitativelyevaluated,theelectricalcorporationshallstate
69thereasonsthecostorbenefitcannotbequantitativelyevaluated,andhowtheelectrical
70corporationaddressessuchcostsandbenefitswhenreviewinganddecidingtopursuesucha
71project.Nosuchprojectshallbebasedsolelyoncostsandbenefitsthattheelectrical
72corporationbelievescannotbequantitativelyevaluated.Anyquantificationforsuchaproject
73thatdoesnotproducequantifiedbenefitsexceedingthecostsshallbeaccompaniedby
74additionaljustificationinsupportoftheproject.Foreachofthefirstfiveyearsthatan
75electricalcorporationisallowedtomakethedeferralsprovidedforbysubsection2ofthis
76section,thepurchaseandinstallationofsmartmetersshallconstitutenomorethansixpercent
77oftheelectricalcorporation'stotalcapitalexpendituresduringanygivenyearunderthe
78corporation'sspecificcapitalinvestmentplan.Atleasttwenty-fivepercentofthecostofthe
79investmentsreflectedineachyear'scapitalinvestmentplan,whichforthepurposesofthis
80subsectionshallexcludethecostsofinvestmentsinnewgas-firedgeneration,shallbe
81comprisedofgridmodernizationprojects,includingbutnotlimitedto:
82 (1)Increaseduseofdigitalinformationandcontrolstechnologytoimprove
83reliability,security,andefficiencyoftheelectricgrid;
84 (2)Dynamicoptimizationofgridoperationsandresources,withfullcybersecurity;
85 (3)Deploymentandintegrationofdistributedresourcesandgeneration,including
86renewableresources;
87 (4)Developmentandincorporationofdemandresponse,demand-sideresources,and
88energy-efficiencyresources;
89 (5)Deploymentofsmarttechnologies(real-time,automated,interactivetechnologies
90thatoptimizethephysicaloperationofappliancesandconsumerdevices)formetering,
91communications,concerninggridoperationsandstatus,anddistributionautomation;
HCSHB2541 3 92 (6)Integrationofsmartappliancesanddevices;
93 (7)Deploymentandintegrationofadvancedelectricitystorageandpeak-shaving
94technologies,includingplug-inelectricandhybridelectricvehicles,andthermalstorageair
95conditioning;
96 (8)Provisionoftimelyinformationandcontroloptionstoconsumer;
97 (9)Developmentofstandardsforcommunicationandinteroperabilityofappliances
98andequipmentconnectedtotheelectricgrid,includingtheinfrastructureservingthegrid;and
99 (10)Identificationandloweringofunreasonableorunnecessarybarrierstoadoption
100ofsmartgridtechnologies,practices,andservices.
101
102Projectspecificinformationneednotbeincludedforthefive-yearperiodcoveredbytheplan.
103Withinthirtydaysofthefilingofanycapitalinvestmentplanorannualupdatetoanexisting
104plan,theelectricalcorporationshallhostapublicstakeholdermeetingtoanswerquestions
105andreceivefeedbackabouttheplan.Afterfeedbackisreceived,theelectricalcorporation
106shallfileanoticewiththecommissionofanymodificationstothecapitalinvestmentplanit
107hasaccepted.Changestotheplan,itsimplementation,orthelevelofinvestmentsmadeshall
108notconstituteevidenceofimprudenceoftheinvestmentsmadeundersuchplan.The
109submissionofacapitalinvestmentplanunderthissectionshallnotaffectinanywaythe
110commission'sauthoritywithrespecttothegrantordenialofacertificateofconvenienceand
111necessityundersection393.170.ByFebruarytwenty-eighthfollowingeachyearinwhich
112theelectricalcorporationsubmitsacapitalinvestmentplan,theelectricalcorporationshall
113submitareporttothecommissiondetailingactualcapitalinvestmentsmadetheprevious
114year,thequantitativelyevaluatedbenefitsandcostsgeneratedbyeachofthoseinvestments
115thatexceededtwentymilliondollars,andanyefficienciesachievedasaresultofthose
116investments.
117 5.Thissectionshallonlyapplytoanyelectricalcorporationthathasfiledanotice
118withthecommissionoftheelectricalcorporation'selectiontomakethedeferralsforwhich
119thissectionprovides.Anelectricalcorporationmayprovidenoticetothecommissionone
120timeunderthissubsectionifsuchcorporationhasappliedtothecommissionundersubsection
1212ofsection386.266,providedthecorporationshallnotconcurrentlyutilizedeferralsunder
122thissubsectionandtheelectricrateadjustmentssetforthinsubsection3ofsection386.266.
123Anelectricalcorporation'selectionshallallowittomakethedeferralsprovidedforby
124subsection2ofthissectionuntilDecember31,[2028] 2035. Notwithstandingthe
125immediatelyprecedingsentence,anelectricalcorporationmayseekpermissiontocontinueto
126makethedeferralsprovidedforbysubsection2ofthissectionforanadditionalfiveyears
127beyondDecember31,[2028] 2035, byfilinganapplicationwiththecommissionseeking
128suchpermissionbyDecember31,[2026] 2033, whichapplicationshallberuleduponbythe
HCSHB2541 4 129commissionwithinonehundredeightydaysafteritsfiling.Indecidingwhethertograntsuch
130permissiontocontinuethecommissionshallhavetheauthority,consistentwithitsstatutory
131authorityoutsidethissection,toconsidersuchfactorsasinitsjudgmentitdeemsnecessary
132andmayconditionthepermissiononfactorsthatarerelevanttothedeferralsauthorizedby
133subsection2ofthissection.Thecommissionshallmakethedeterminationofwhetherto
134grantsuchpermissiontocontinueafterahearing.Anelectricalcorporationmakingdeferrals
135providedforbysubsection2ofthissectiononandafterJanuary1,2024,shallbesubjectto
136therevenuerequirementimpactcapsetforthundersection393.1656.Failuretoobtainsuch
137commissionpermissiontocontinueshallnotaffectdeferralsmadethroughthedateforwhich
138permissionhasbeengranted,ortheregulatoryandratemakingtreatmentoftheregulatory
139assetsarisingfromsuchdeferralsasprovidedforbythissection.
140 6.Thecommissionmaytakeintoaccountanychangeinbusinessrisktothe
141corporationresultingfromimplementationofthedeferralsinsettingthecorporation'sallowed
142returninanyrateproceeding,inadditiontoanyotherchangesinbusinessriskexperiencedby
143thecorporation.
144 7.ThissectionshallexpireonDecember31,[2033] 2040, exceptthatthe
145amortizationoftheregulatoryassetbalancesarisingunderthissectionshallcontinuetobe
146reflectedintheelectricalcorporation'sratesandremainingregulatoryassetbalancesshallbe
147includedintheelectricalcorporation'sratebaseconsistentwiththeratemakingtreatmentand
148amortizationpreviouslyapprovedbythecommissionpursuanttothissection.
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HCSHB2541 5