Bill Text: OR SB967 | 2011 | Regular Session | Enrolled
Bill Title: Relating to rates of public utilities; and declaring an emergency.
Sponsorship: Committee Bill
Status: (Passed) 2011-05-24 - Effective date, May 24, 2011. [SB967 Detail]
Download: Oregon-2011-SB967-Enrolled.html
76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session
Enrolled
Senate Bill 967
Sponsored by COMMITTEE ON BUSINESS, TRANSPORTATION AND ECONOMIC
DEVELOPMENT
CHAPTER ................
AN ACT
Relating to rates of public utilities; creating new provisions;
amending ORS 757.210 and 757.511; repealing ORS 757.267 and
757.268; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + (1) When establishing schedules and rates under
ORS 757.210 for an electricity or natural gas utility, the Public
Utility Commission shall act to balance the interests of the
customers of the utility and the utility's investors by setting
fair, just and reasonable rates that include amounts for income
taxes. Subject to subsections (2) and (3) of this section,
amounts for income taxes included in rates are fair, just and
reasonable if the rates include current and deferred income taxes
and other related tax items that are based on estimated revenues
derived from the regulated operations of the utility.
(2) During ratemaking proceedings conducted pursuant to ORS
757.210, the Public Utility Commission must ensure that the
income taxes included in the electricity or natural gas utility's
rates:
(a) Include all expected current and deferred tax balances and
tax credits made in providing regulated utility service to the
utility's customers in this state;
(b) Include only the current provision for deferred income
taxes, accumulated deferred income taxes and other tax related
items that are based on revenues, expenses and the rate base
included in rates and on the same basis as included in rates;
(c) Reflect all known changes to tax and accounting laws or
policy that would affect the calculated taxes;
(d) Are reduced by tax benefits generated by expenditures made
in providing regulated utility service to the utility's customers
in this state, regardless of whether the taxes are paid by the
utility or an affiliated group;
(e) Contain all adjustments necessary in order to ensure
compliance with the normalization requirements of federal tax
law; and
(f) Reflect other considerations the commission deems relevant
to protect the public interest.
(3) During a ratemaking proceeding conducted under ORS 757.210
for an electricity or natural gas utility that pays taxes as part
of an affiliated group, the Public Utility Commission may adjust
the utility's estimated income tax expense based upon:
Enrolled Senate Bill 967 (SB 967-INTRO) Page 1
(a) Whether the utility's affiliated group has a history of
paying federal or state income taxes that are less than the
federal or state income taxes the utility would pay to units of
government if it were an Oregon-only regulated utility operation;
(b) Whether the corporate structure under which the utility is
held affects the taxes paid by the affiliated group; or
(c) Any other considerations the commission deems relevant to
protect the public interest.
(4)(a) Because tax information of unregulated nonutility
business in an electricity or natural gas utility's affiliated
group is commercially sensitive, and public disclosure of such
information could provide a commercial advantage to other
businesses, the Public Utility Commission may not use the tax
information obtained under this section for any purpose other
than those described in this section, in ORS 757.511 and as
necessary for the implementation and administration of this
section and ORS 757.511.
(b) The commission shall adopt rules to implement paragraph (a)
of this subsection that:
(A) Identify all documents and tax information that an
electricity or natural gas utility must file in its initial
filing in a proceeding to change rates that include amounts for
income taxes, recognizing that any party may object to providing
such documents on the grounds that they are not relevant; and
(B) Determine the procedures under which intervenors in such
proceedings may obtain and use documents and tax information to
fully participate in the proceeding.
(5) As used in this section, 'affiliated group' means a group
of corporations of which the public utility is a member and that
files a consolidated federal income tax return. + }
SECTION 2. { + The Public Utility Commission shall initiate a
rulemaking proceeding to adopt rules to implement section 1 (4)
of this 2011 Act no later than 30 days after the effective date
of this 2011 Act. + }
SECTION 3. ORS 757.210 is amended to read:
757.210. (1)(a) Whenever any public utility files with the
Public Utility Commission any rate or schedule of rates stating
or establishing a new rate or schedule of rates or increasing an
existing rate or schedule of rates, the commission may, either
upon written complaint or upon the commission's own initiative,
after reasonable notice, conduct a hearing to determine whether
the rate or schedule is fair, just and reasonable. The commission
shall conduct the hearing upon written complaint filed by the
utility, its customer or customers, or any other proper party
within 60 days of the utility's filing; provided that no hearing
need be held if the particular rate change is the result of an
automatic adjustment clause. At the hearing the utility shall
bear the burden of showing that the rate or schedule of rates
proposed to be established or increased or changed is fair, just
and reasonable. The commission may not authorize a rate or
schedule of rates that is not fair, just and reasonable.
(b) As used in this subsection, 'automatic adjustment clause'
means a provision of a rate schedule that provides for rate
increases or decreases or both, without prior hearing, reflecting
increases or decreases or both in costs incurred, taxes paid to
units of government or revenues earned by a utility and that is
subject to review by the commission at least once every two
years.
Enrolled Senate Bill 967 (SB 967-INTRO) Page 2
(2)(a) Subsection (1) of this section does not apply to rate
changes under an approved alternative form of regulation plan,
including a resource rate plan under ORS 757.212.
(b) Any alternative form of regulation plan shall include
provisions to ensure that the plan operates in the interests of
utility customers and the public generally and results in rates
that are just and reasonable and may include provisions
establishing a reasonable range for rate of return on investment.
In approving a plan, the commission shall, at a minimum, consider
whether the plan:
(A) Promotes increased efficiencies and cost control;
(B) Is consistent with least-cost resources acquisition
policies;
(C) Yields rates that are consistent with those that would be
obtained following application of { - ORS 757.268 - } { +
section 1 of this 2011 Act + };
(D) Is consistent with maintenance of safe, adequate and
reliable service; and
(E) Is beneficial to utility customers generally, for example,
by minimizing utility rates.
(c) As used in this subsection, 'alternative form of regulation
plan' means a plan adopted by the commission upon petition by a
public utility, after notice and an opportunity for a hearing,
that sets rates and revenues and a method for changes in rates
and revenues using alternatives to cost-of-service rate
regulation.
(d) Prior to implementing a rate change under an alternative
form of regulation plan, the utility shall present a report that
demonstrates the calculation of any proposed rate change at a
public meeting of the commission.
(3) Except as provided in ORS 757.212, the commission, at any
time, may order a utility to appear and establish that any, or
all, of its rates in a plan authorized under subsection (2) of
this section are in conformity with the plan and are just and
reasonable. Except as provided in ORS 757.212, such rates, and
the alternative form of regulation plan under which the rates are
set, also shall be subject to complaint under ORS 756.500.
(4) Periodically, but not less often than every two years after
the implementation of a plan referred to in subsection (2) of
this section, the commission shall submit a report to the
Legislative Assembly that shows the impact of the plan on rates
paid by utility customers.
(5) The commission and staff may consult at any time with, and
provide technical assistance to, utilities, their customers, and
other interested parties on matters relevant to utility rates and
charges. If a hearing is held with respect to a rate change, the
commission's decisions shall be based on the record made at the
hearing.
SECTION 4. ORS 757.511 is amended to read:
757.511. (1) No person, directly or indirectly, shall acquire
the power to exercise any substantial influence over the policies
and actions of a public utility which provides heat, light or
power without first securing from the Public Utility Commission,
upon application, an order authorizing such acquisition if such
person is, or by such acquisition would become, an affiliated
interest with such public utility as defined in ORS 757.015 (1),
(2) or (3).
(2) Notice must be given to the commission of an application
under this section at least 60 days before the application is
filed with the commission. The notice must indicate whether the
Enrolled Senate Bill 967 (SB 967-INTRO) Page 3
transaction is a transaction described in ORS 757.814 (1). If the
transaction is a transaction as described in ORS 757.814 (1), the
commission shall give notice to cities and counties as required
by ORS 757.814 (1).
(3) The application required by subsection (1) of this section
shall set forth detailed information regarding:
(a) The applicant's identity and financial ability;
(b) The background of the key personnel associated with the
applicant;
(c) The source and amounts of funds or other consideration to
be used in the acquisition;
(d) The applicant's compliance with federal law in carrying out
the acquisition;
(e) Whether the applicant or the key personnel associated with
the applicant have violated any state or federal statutes
regulating the activities of public utilities;
(f) All documents relating to the transaction giving rise to
the application;
(g) The applicant's experience in operating public utilities
providing heat, light or power;
(h) The applicant's plan for operating the public utility;
(i) How the acquisition will serve the public utility's
customers in the public interest; and
(j) Such other information as the commission may require by
rule.
(4) { + (a) + } The commission promptly shall examine and
investigate each application received pursuant to this section.
Except as provided in subsection (5) of this section, the
commission shall issue an order disposing of the application
within 19 business days of its receipt. If the commission
determines that approval of the application will serve the public
utility's customers { + and is + } in the public interest, the
commission shall issue an order granting the application. The
commission may condition an order authorizing the acquisition
upon the applicant's satisfactory performance or adherence to
specific requirements. The commission otherwise shall issue an
order denying the application. The applicant shall bear the
burden of showing that granting the application is in the public
interest.
{ + (b) In reviewing an application received pursuant to this
section for an electricity or natural gas utility, the Public
Utility Commission must consider the effect of the acquisition or
merger on the amount of income taxes paid by the utility or its
affiliated group and make any necessary adjustments to the rates
of the utility, including the establishment of a balancing
account to track income tax expense, to ensure that the
acquisition or merger serves the utility's customers and is in
the public interest. + }
(5) The commission may postpone issuance of an order disposing
of an application under this section if notice has been given to
cities and counties under ORS 757.814 (1). In no event may the
commission postpone issuance of an order disposing of the
application for more than 90 days under the provisions of this
subsection.
(6) Nothing in this section shall prohibit dissemination by any
party of information concerning the acquisition so long as such
dissemination is not otherwise in conflict with state or federal
law.
SECTION 5. { + ORS 757.267 and 757.268 are repealed. + }
Enrolled Senate Bill 967 (SB 967-INTRO) Page 4
SECTION 6. { + The Public Utility Commission shall complete
pending review of tax reports for calendar year 2009 under the
provisions of ORS 757.267 and 757.268 as they existed immediately
prior to the effective date of this 2011 Act, with resulting rate
adjustments becoming effective June 1, 2011, and expiring May 31,
2012. + }
SECTION 7. { + This 2011 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2011 Act takes effect on its
passage. + }
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Passed by Senate April 20, 2011
.............................................................
Robert Taylor, Secretary of Senate
.............................................................
Peter Courtney, President of Senate
Passed by House May 12, 2011
.............................................................
Bruce Hanna, Speaker of House
.............................................................
Arnie Roblan, Speaker of House
Enrolled Senate Bill 967 (SB 967-INTRO) Page 5
Received by Governor:
......M.,............., 2011
Approved:
......M.,............., 2011
.............................................................
John Kitzhaber, Governor
Filed in Office of Secretary of State:
......M.,............., 2011
.............................................................
Kate Brown, Secretary of State
Enrolled Senate Bill 967 (SB 967-INTRO) Page 6
