Bill Text: MN SF817 | 2011-2012 | 87th Legislature | Engrossed
Bill Title: Public utility rates cost of service provisions modification; natural gas inverted rates program repeal
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2011-04-28 - Second reading [SF817 Detail]
Download: Minnesota-2011-SF817-Engrossed.html
1.2relating to utilities; requiring utility rates be based primarily on cost of service
1.3between and among consumer classes; making clarifying and technical changes;
1.4amending Minnesota Statutes 2010, sections 216B.03; 216B.07; 216B.16,
1.5subdivision 15, by adding a subdivision; 216B.2401; repealing Minnesota
1.6Statutes 2010, section 216B.242.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2010, section 216B.03, is amended to read:
1.9216B.03 REASONABLE RATE.
1.10Every rate made, demanded, or received by any public utility, or by any two or
1.11more public utilities jointly, shall be just and reasonable. Rates shall not be unreasonably
1.12preferential, unreasonably prejudicial, or discriminatory, but shall be sufficient, equitable,
1.13and consistent in application to a class of consumers and among classes of consumers.
1.14To the maximum reasonable extent, the commission shall set rates to encourage energy
1.15conservation and renewable energy use and to further the goals of sections216B.164 ,
1.16216B.241
, and
216C.05 . Any doubt as to reasonableness should be resolved in favor of the
1.17consumer. For rate-making purposes a public utility may treat two or more municipalities
1.18served by it as a single class wherever the populations are comparable in size or the
1.19conditions of service are similar.
1.20 Sec. 2. Minnesota Statutes 2010, section 216B.07, is amended to read:
1.21216B.07 RATE PREFERENCE PROHIBITED.
1.22No public utility shall, as to rates or service, make or grant any unreasonable
1.23preference or advantage to any person or class of consumers or subject any person or class
1.24of consumers to any unreasonable prejudice or disadvantage.
2.1 Sec. 3. Minnesota Statutes 2010, section 216B.16, is amended by adding a subdivision
2.2to read:
2.3 Subd. 6e. Revenue allocation among consumer classes. Cost of service shall
2.4be the primary consideration in the commission's determination of revenue allocation
2.5among consumer classes. Factors other than cost of service, including impact on business
2.6development and job growth, may also be considered and evaluated by the commission in
2.7determining revenue allocations. Factors used in determining revenue allocation must
2.8be supported by record evidence.
2.9EFFECTIVE DATE.This section is effective the day following final enactment
2.10and applies to filings for rate changes filed on and after that date.
2.11 Sec. 4. Minnesota Statutes 2010, section 216B.16, subdivision 15, is amended to read:
2.12 Subd. 15. Low-income affordability programs. (a) The commission must
2.13consider ability to pay as a factor in setting utility rates and may establish affordability
2.14programs for low-income residential ratepayers in order to ensure affordable, reliable,
2.15and continuous service to low-income utility customers.Affordability programs may
2.16include inverted block rates in which lower energy prices are made available to lower
2.17usage customers. By September 1, 2007, A public utility serving low-income residential
2.18ratepayers who use natural gas for heating must file an affordability program with the
2.19commission. For purposes of this subdivision, "low-income residential ratepayers" means
2.20ratepayers who receive energy assistance from the low-income home energy assistance
2.21program (LIHEAP).
2.22 (b) Any affordability program the commission orders a utility to implement must:
2.23 (1) lower the percentage of income that participating low-income households devote
2.24to energy bills;
2.25 (2) increase participating customer payments over time by increasing the frequency
2.26of payments;
2.27 (3) decrease or eliminate participating customer arrears;
2.28 (4) lower the utility costs associated with customer account collection activities; and
2.29 (5) coordinate the program with other available low-income bill payment assistance
2.30and conservation resources.
2.31 (c) In ordering affordability programs, the commission may require public utilities to
2.32file program evaluations that measure the effect of the affordability program on:
2.33 (1) the percentage of income that participating households devote to energy bills;
2.34 (2) service disconnections; and
3.1 (3) frequency of customer payments, utility collection costs, arrearages, and bad
3.2debt.
3.3 (d) The commission must issue orders necessary to implement, administer, and
3.4evaluate affordability programs, and to allow a utility to recover program costs, including
3.5administrative costs, on a timely basis. The commission may not allow a utility to recover
3.6administrative costs, excluding start-up costs, in excess of five percent of total program
3.7costs, or program evaluation costs in excess of two percent of total program costs. The
3.8commission must permit deferred accounting, with carrying costs, for recovery of program
3.9costs incurred during the period between general rate cases.
3.10 (e) Public utilities may use information collected or created for the purpose of
3.11administering energy assistance to administer affordability programs.
3.12 Sec. 5. Minnesota Statutes 2010, section 216B.2401, is amended to read:
3.13216B.2401 ENERGY CONSERVATION POLICY GOAL.
3.14 It is the energy policy of the state of Minnesota to achieve annual energy savings
3.15equal to 1.5 percent of annual retail energy sales of electricity and natural gas directly
3.16through energy conservation improvement programs and rate design,such as inverted
3.17block rates in which lower energy prices are made available to lower-usage residential
3.18customers, and indirectly through energy codes and appliance standards, programs
3.19designed to transform the market or change consumer behavior, energy savings resulting
3.20from efficiency improvements to the utility infrastructure and system, and other efforts to
3.21promote energy efficiency and energy conservation.
3.22 Sec. 6. REPEALER.
3.23Minnesota Statutes 2010, section 216B.242, is repealed.
1.3between and among consumer classes; making clarifying and technical changes;
1.4amending Minnesota Statutes 2010, sections 216B.03; 216B.07; 216B.16,
1.5subdivision 15, by adding a subdivision; 216B.2401; repealing Minnesota
1.6Statutes 2010, section 216B.242.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2010, section 216B.03, is amended to read:
1.9216B.03 REASONABLE RATE.
1.10Every rate made, demanded, or received by any public utility, or by any two or
1.11more public utilities jointly, shall be just and reasonable. Rates shall not be unreasonably
1.12preferential, unreasonably prejudicial, or discriminatory, but shall be sufficient, equitable,
1.13and consistent in application to a class of consumers and among classes of consumers.
1.14To the maximum reasonable extent, the commission shall set rates to encourage energy
1.15conservation and renewable energy use and to further the goals of sections
1.17consumer. For rate-making purposes a public utility may treat two or more municipalities
1.18served by it as a single class wherever the populations are comparable in size or the
1.19conditions of service are similar.
1.20 Sec. 2. Minnesota Statutes 2010, section 216B.07, is amended to read:
1.21216B.07 RATE PREFERENCE PROHIBITED.
1.22No public utility shall, as to rates or service, make or grant any unreasonable
1.23preference or advantage to any person or class of consumers or subject any person or class
1.24of consumers to any unreasonable prejudice or disadvantage.
2.1 Sec. 3. Minnesota Statutes 2010, section 216B.16, is amended by adding a subdivision
2.2to read:
2.3 Subd. 6e. Revenue allocation among consumer classes. Cost of service shall
2.4be the primary consideration in the commission's determination of revenue allocation
2.5among consumer classes. Factors other than cost of service, including impact on business
2.6development and job growth, may also be considered and evaluated by the commission in
2.7determining revenue allocations. Factors used in determining revenue allocation must
2.8be supported by record evidence.
2.9EFFECTIVE DATE.This section is effective the day following final enactment
2.10and applies to filings for rate changes filed on and after that date.
2.11 Sec. 4. Minnesota Statutes 2010, section 216B.16, subdivision 15, is amended to read:
2.12 Subd. 15. Low-income affordability programs. (a) The commission must
2.13consider ability to pay as a factor in setting utility rates and may establish affordability
2.14programs for low-income residential ratepayers in order to ensure affordable, reliable,
2.15and continuous service to low-income utility customers.
2.16
2.17
2.18ratepayers who use natural gas for heating must file an affordability program with the
2.19commission. For purposes of this subdivision, "low-income residential ratepayers" means
2.20ratepayers who receive energy assistance from the low-income home energy assistance
2.21program (LIHEAP).
2.22 (b) Any affordability program the commission orders a utility to implement must:
2.23 (1) lower the percentage of income that participating low-income households devote
2.24to energy bills;
2.25 (2) increase participating customer payments over time by increasing the frequency
2.26of payments;
2.27 (3) decrease or eliminate participating customer arrears;
2.28 (4) lower the utility costs associated with customer account collection activities; and
2.29 (5) coordinate the program with other available low-income bill payment assistance
2.30and conservation resources.
2.31 (c) In ordering affordability programs, the commission may require public utilities to
2.32file program evaluations that measure the effect of the affordability program on:
2.33 (1) the percentage of income that participating households devote to energy bills;
2.34 (2) service disconnections; and
3.1 (3) frequency of customer payments, utility collection costs, arrearages, and bad
3.2debt.
3.3 (d) The commission must issue orders necessary to implement, administer, and
3.4evaluate affordability programs, and to allow a utility to recover program costs, including
3.5administrative costs, on a timely basis. The commission may not allow a utility to recover
3.6administrative costs, excluding start-up costs, in excess of five percent of total program
3.7costs, or program evaluation costs in excess of two percent of total program costs. The
3.8commission must permit deferred accounting, with carrying costs, for recovery of program
3.9costs incurred during the period between general rate cases.
3.10 (e) Public utilities may use information collected or created for the purpose of
3.11administering energy assistance to administer affordability programs.
3.12 Sec. 5. Minnesota Statutes 2010, section 216B.2401, is amended to read:
3.13216B.2401 ENERGY CONSERVATION POLICY GOAL.
3.14 It is the energy policy of the state of Minnesota to achieve annual energy savings
3.15equal to 1.5 percent of annual retail energy sales of electricity and natural gas directly
3.16through energy conservation improvement programs and rate design,
3.17
3.18
3.19designed to transform the market or change consumer behavior, energy savings resulting
3.20from efficiency improvements to the utility infrastructure and system, and other efforts to
3.21promote energy efficiency and energy conservation.
3.22 Sec. 6. REPEALER.
3.23Minnesota Statutes 2010, section 216B.242, is repealed.
