Bill Text: MN SF883 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Public utility transmission costs recovery regulation; transmission projects advance determination of prudence requirement
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced - Dead) 2013-02-28 - Referred to Environment and Energy [SF883 Detail]
Download: Minnesota-2013-SF883-Introduced.html
1.2relating to energy; regulating utility recovery of transmission costs; amending
1.3Minnesota Statutes 2012, section 216B.16, subdivision 7b; proposing coding for
1.4new law in Minnesota Statutes, chapter 216B.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2012, section 216B.16, subdivision 7b, is amended to
1.7read:
1.8 Subd. 7b. Transmission cost adjustment. (a) Notwithstanding any other
1.9provision of this chapter, the commission may approve a tariff mechanism for the
1.10automatic annual adjustment of charges for the Minnesota jurisdictional costs of (i) new
1.11transmission facilities that have been separately filed and reviewed and approved by
1.12the commission under section216B.243 or are certified as a priority project or deemed
1.13to be a priority transmission project under section216B.2425 ; and (ii) new transmission
1.14facilities proposed to be constructed by a utility, or an affiliate operating an integrated
1.15system with the utility, approved by the regulatory commission of the state in which
1.16the new transmission facilities are to be constructed to the extent approval is required
1.17by the laws of that state, and determined by the Midwest Independent Transmission
1.18System Operator to benefit the utility or integrated utility transmission system; (iii) new
1.19transmission facilities to be constructed by a utility, or an affiliate operating an integrated
1.20utility transmission system with the utility, where the commission has made an advance
1.21determination under section 216B.1696; and (iv) charges incurred by a utility that accrue
1.22from other transmission owners' regionally planned transmission projects that have been
1.23determined by the Midwest Independent Transmission System Operator to benefit the
1.24utility or integrated system, as provided for under a federally approved tariff.
2.1 (b) Upon filing by a public utility or utilities providing transmission service, the
2.2commission may approve, reject, or modify, after notice and comment, a tariff that:
2.3 (1) allows the utility to recover on a timely basis the costs net of revenues of
2.4facilities approved under section216B.243 or certified or deemed to be certified under
2.5section216B.2425 or exempt from the requirements of section
216B.243 ;
2.6 (2) allows the charges incurred by a utility that accrue from other transmission
2.7owners' regionally planned transmission projects that have been determined by the
2.8Midwest Independent Transmission System Operator to benefit the utility or integrated
2.9system, as provided for under a federally approved tariff. These charges must be reduced
2.10or offset by revenues received by the utility and by amounts the utility charges to other
2.11regional transmission owners, to the extent those revenues and charges have not been
2.12otherwise offset;
2.13 (3) allows the utility to recover on a timely basis the net costs of revenues of facilities
2.14approved by the regulatory commission of the state in which the new transmission
2.15facilities are to be constructed and determined by the Midwest Independent Transmission
2.16System Operator to benefit the utility or integrated transmission system;
2.17 (4) allows the utility to recover on a timely basis the net costs of revenues of facilities
2.18where the commission has made an advance determination under section 216B.1696;
2.19 (5) allows a return on investment at the level approved in the utility's last general
2.20rate case, unless a different return is found to be consistent with the public interest;
2.21(4) (6) provides a current return on construction work in progress, provided that
2.22recovery from Minnesota retail customers for the allowance for funds used during
2.23construction is not sought through any other mechanism;
2.24(5) (7) allows for recovery of other expenses if shown to promote a least-cost project
2.25option or is otherwise in the public interest;
2.26(6) (8) allocates project costs appropriately between wholesale and retail customers;
2.27(7) (9) provides a mechanism for recovery above cost, if necessary to improve the
2.28overall economics of the project or projects or is otherwise in the public interest; and
2.29 (8) (10) terminates recovery once costs have been fully recovered or have otherwise
2.30been reflected in the utility's general rates.
2.31 (c) A public utility may file annual rate adjustments to be applied to customer bills
2.32paid under the tariff approved in paragraph (b). In its filing, the public utility shall provide:
2.33 (1) a description of and context for the facilities included for recovery;
2.34 (2) a schedule for implementation of applicable projects;
2.35 (3) the utility's costs for these projects;
3.1 (4) a description of the utility's efforts to ensure the lowest costs to ratepayers for
3.2the project; and
3.3 (5) calculations to establish that the rate adjustment is consistent with the terms
3.4of the tariff established in paragraph (b).
3.5 (d) Upon receiving a filing for a rate adjustment pursuant to the tariff established in
3.6paragraph (b), the commission shall approve the annual rate adjustments provided that,
3.7after notice and comment, the costs included for recovery through the tariff were or are
3.8expected to be prudently incurred and achieve transmission system improvements at the
3.9lowest feasible and prudent cost to ratepayers.
3.10 Sec. 2. [216B.1696] TRANSMISSION PROJECTS; ADVANCE
3.11DETERMINATION OF PRUDENCE.
3.12 Subdivision 1. Qualifying project. A public utility may petition the commission for
3.13an advance determination of prudence for one or more transmission projects undertaken
3.14by a utility, or an affiliate operating an integrated transmission system with the utility, that
3.15will be constructed within Minnesota or in another state, if the projects have an expected
3.16jurisdictional cost to Minnesota ratepayers of at least $1,000,000.
3.17 Subd. 2. Petition. A petition filed under this section must include a description of the
3.18project; evidence supporting the project's reasonableness, which may include the Midwest
3.19Independent Transmission System Operator regional transmission plan that includes
3.20the transmission project; a discussion of project alternatives; a project implementation
3.21schedule; a cost estimate and support for the reasonableness of the estimated cost; and a
3.22description of the public utility's or affiliate's efforts to ensure the lowest reasonable costs.
3.23The commission shall allow opportunity for oral and written comment on the petition. The
3.24commission shall make a final determination on the petition within ten months of its filing
3.25date. The commission must make findings in support of its determination.
1.3Minnesota Statutes 2012, section 216B.16, subdivision 7b; proposing coding for
1.4new law in Minnesota Statutes, chapter 216B.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2012, section 216B.16, subdivision 7b, is amended to
1.7read:
1.8 Subd. 7b. Transmission cost adjustment. (a) Notwithstanding any other
1.9provision of this chapter, the commission may approve a tariff mechanism for the
1.10automatic annual adjustment of charges for the Minnesota jurisdictional costs of (i) new
1.11transmission facilities that have been separately filed and reviewed and approved by
1.12the commission under section
1.13to be a priority transmission project under section
1.14facilities proposed to be constructed by a utility, or an affiliate operating an integrated
1.15system with the utility, approved by the regulatory commission of the state in which
1.16the new transmission facilities are to be constructed to the extent approval is required
1.17by the laws of that state, and determined by the Midwest Independent Transmission
1.18System Operator to benefit the utility or integrated utility transmission system; (iii) new
1.19transmission facilities to be constructed by a utility, or an affiliate operating an integrated
1.20utility transmission system with the utility, where the commission has made an advance
1.21determination under section 216B.1696; and (iv) charges incurred by a utility that accrue
1.22from other transmission owners' regionally planned transmission projects that have been
1.23determined by the Midwest Independent Transmission System Operator to benefit the
1.24utility or integrated system, as provided for under a federally approved tariff.
2.1 (b) Upon filing by a public utility or utilities providing transmission service, the
2.2commission may approve, reject, or modify, after notice and comment, a tariff that:
2.3 (1) allows the utility to recover on a timely basis the costs net of revenues of
2.4facilities approved under section
2.5section
2.6 (2) allows the charges incurred by a utility that accrue from other transmission
2.7owners' regionally planned transmission projects that have been determined by the
2.8Midwest Independent Transmission System Operator to benefit the utility or integrated
2.9system, as provided for under a federally approved tariff. These charges must be reduced
2.10or offset by revenues received by the utility and by amounts the utility charges to other
2.11regional transmission owners, to the extent those revenues and charges have not been
2.12otherwise offset;
2.13 (3) allows the utility to recover on a timely basis the net costs of revenues of facilities
2.14approved by the regulatory commission of the state in which the new transmission
2.15facilities are to be constructed and determined by the Midwest Independent Transmission
2.16System Operator to benefit the utility or integrated transmission system;
2.17 (4) allows the utility to recover on a timely basis the net costs of revenues of facilities
2.18where the commission has made an advance determination under section 216B.1696;
2.19 (5) allows a return on investment at the level approved in the utility's last general
2.20rate case, unless a different return is found to be consistent with the public interest;
2.21
2.22recovery from Minnesota retail customers for the allowance for funds used during
2.23construction is not sought through any other mechanism;
2.24
2.25option or is otherwise in the public interest;
2.26
2.27
2.28overall economics of the project or projects or is otherwise in the public interest; and
2.29 (
2.30been reflected in the utility's general rates.
2.31 (c) A public utility may file annual rate adjustments to be applied to customer bills
2.32paid under the tariff approved in paragraph (b). In its filing, the public utility shall provide:
2.33 (1) a description of and context for the facilities included for recovery;
2.34 (2) a schedule for implementation of applicable projects;
2.35 (3) the utility's costs for these projects;
3.1 (4) a description of the utility's efforts to ensure the lowest costs to ratepayers for
3.2the project; and
3.3 (5) calculations to establish that the rate adjustment is consistent with the terms
3.4of the tariff established in paragraph (b).
3.5 (d) Upon receiving a filing for a rate adjustment pursuant to the tariff established in
3.6paragraph (b), the commission shall approve the annual rate adjustments provided that,
3.7after notice and comment, the costs included for recovery through the tariff were or are
3.8expected to be prudently incurred and achieve transmission system improvements at the
3.9lowest feasible and prudent cost to ratepayers.
3.10 Sec. 2. [216B.1696] TRANSMISSION PROJECTS; ADVANCE
3.11DETERMINATION OF PRUDENCE.
3.12 Subdivision 1. Qualifying project. A public utility may petition the commission for
3.13an advance determination of prudence for one or more transmission projects undertaken
3.14by a utility, or an affiliate operating an integrated transmission system with the utility, that
3.15will be constructed within Minnesota or in another state, if the projects have an expected
3.16jurisdictional cost to Minnesota ratepayers of at least $1,000,000.
3.17 Subd. 2. Petition. A petition filed under this section must include a description of the
3.18project; evidence supporting the project's reasonableness, which may include the Midwest
3.19Independent Transmission System Operator regional transmission plan that includes
3.20the transmission project; a discussion of project alternatives; a project implementation
3.21schedule; a cost estimate and support for the reasonableness of the estimated cost; and a
3.22description of the public utility's or affiliate's efforts to ensure the lowest reasonable costs.
3.23The commission shall allow opportunity for oral and written comment on the petition. The
3.24commission shall make a final determination on the petition within ten months of its filing
3.25date. The commission must make findings in support of its determination.
