Current through Register Vol. 49, No. 6, March 15, 2024
PURPOSE: This rule prescribes the process to be
followed when the commission processes a utility rate case for certain small
utilities.
(1) Definitions.
As used in this rule, the following terms mean:
(A) A small utility means a gas utility
serving ten thousand (10,000) or fewer customers, a water or sewer utility
serving eight thousand (8,000) or fewer customers, or a steam utility serving
one hundred (100) or fewer customers; and
(B) A disposition agreement is a document
that sets forth the signatories' proposed resolution of some or all of the
issues pertaining to a small utility rate case, and has the same weight as a
stipulation and agreement as defined in
4 CSR
240-2.115.
(2) This rule describes the process for small
utility rate cases.
(A) In addition to the
commission's provisions regarding dismissal of a case in
4 CSR
240-2.116, the commission may dismiss a small utility
rate case at any time if-
1. The utility is
not current on the payment of all of its commission assessments;
2. The utility fails to submit its annual
report or annual statement of operating revenue; or 3. The utility is not in
good standing with the Missouri Secretary of State, if applicable.
(3) Commencement. A
small utility rate case may be commenced by-
(A) A letter received by the secretary of the
commission from a small utility stating the amount of the requested increase in
its overall annual operating revenues.
1. Any
such letter need not be accompanied by any proposed tariff revisions.
2. Upon receipt of the letter, the secretary
of the commission will cause a rate case to be opened and will file a copy of
the letter in that case.
3. At any
time before day one hundred fifty (150) of the timeline described in section
(5) of this rule, the utility may submit to the secretary of the commission a
letter withdrawing its previous request for an increase in its annual operating
revenues. Upon receipt of such a letter, the secretary of the commission will
close the rate case;
(B)
A complaint filed by staff or by any eligible entity or entities pursuant to
section 386.390.1, RSMo, or section 393.260.1, RSMo; and
(C) A proposed tariff stating a new rate or
charge filed by a small utility pursuant to section 393.150.1, RSMo, if
accompanied by a written statement requesting the use of the procedures
established by this rule.
(4) Staff will assist a small utility in
processing a small utility rate case insofar as the assistance is consistent
with staff's function and responsibilities to the commission. Staff may not
represent the small utility and may not assume the small utility's statutory
burden of proof to show that any increased rate is just and
reasonable.
(5) Rate Case Timeline.
Within one (1) week after a small utility rate case is opened, staff will file
a timeline under which the case will proceed, specifying due dates for the
activities required by this rule.
(A) Staff
and the utility may agree in writing that the deadlines set out in the rate
case timeline, including the date for issuance of the commission's report and
order, be extended for up to thirty (30) days. If an extension is agreed upon,
staff shall file the agreement and an updated timeline reflecting the extension
in the case file.
(6)
Local public hearing. A local public hearing shall be scheduled to occur no
later than sixty (60) days after the opening of the case unless staff files a
notice in the case stating that all parties agree a local public hearing is not
necessary.
(7) Notice.
(A) At least ten (10) days prior to a local
public hearing, or upon the filing of a notice that a local public hearing is
not necessary, the utility shall mail a written notice, as approved by staff
and the Office of the Public Counsel (OPC), to its customers stating-
1. The time, date, and location of the local
public hearing, consistent with the order setting the hearing, if
applicable;
2. A summary of the
proposed rates and charges, the effect of the proposed rate increase on an
average residential customer's bill, and any other company requests that may
affect customers, if known;
3. An
invitation to submit comments about the utility's rates and quality of service
within thirty (30) days after the date shown on the notice and instructions as
to how comments can be submitted electronically, by telephone, and in writing;
and
4. Instructions for viewing the
publicly available filings made in the case via the commission's electronic
filing system.
(B) Staff
will file a copy of the notice in the case file.
(8) Investigation and audit. After a small
utility rate case is opened, the staff shall, and the public counsel may,
conduct an investigation of the utility's request.
(A) Staff's investigation may include a
review of any and all information and materials related to the utility's cost
of providing service and its operating revenues, the design of the utility's
rates, the utility's service charges or fees, all provisions of the utility's
tariffs, and any operational or customer service issues that are discovered
during the investigation. The staff's audit and investigation will ensure
reasonable consistency in the recommended rate treatment of the utility's rate
base, revenue, and expenses with that of other similarly situated
utilities.
(B) Staff's
investigation may include a review of the records generated since the utility's
previous rate case, the case in which the utility was granted its Certificate
of Convenience and Necessity, or the utility's transfer of assets case,
whichever is most recent.
(C) If an
investigation of the utility's request includes the submission of data requests
to the utility, copies of the data requests shall be provided to all parties to
the case when they are submitted to the utility. The utility's responses to
such data requests shall also be shared.
(D) Staff's investigation shall include an
update of the utility's rate base.
(E) In determining the utility's cost of
service, the value of normal expense items and plant-in-service and other rate
base items, for which documentation is not available, may be based upon such
evidence as is available or may be estimated in order to include reasonable
levels of those costs. Unusual expense or rate base items, or expense or rate
base items for which the utility claims unusual levels of cost may require
additional support by the utility. Nothing in this section diminishes the
utility's obligation to adhere to the commission's rules regarding appropriate
record-keeping.
(F) Not later than
ninety (90) days after a small utility rate case is opened, the staff shall
provide to all parties, a report of its preliminary investigation, audit,
analysis, and work-papers including:
1. An
evaluation of the utility's record-keeping practices; and
2. A list of the cost of service items that
are still under consideration with an explanation for why those items are not
yet resolved.
(G) If the
public counsel is conducting its own investigation it shall, not later than
ninety (90) days after a small utility rate case is opened, provide to all
parties a report regarding whatever investigation it has conducted.
(9) Settlement proposals.
(A) Staff's confidential settlement proposal.
Not later than one hundred twenty (120) days after a small utility rate case is
opened staff shall, and the public counsel if proposing its own settlement, may
provide to all parties to the case, a confidential settlement proposal.
1. Staff's settlement proposal will address
the following subjects:
A. The utility's
annual operating revenues;
B. The
utility's customer rates;
C. The
utility's service charges and fees;
D. The utility's plant depreciation
rates;
E. The utility's tariff
provisions;
F. The operation of the
utility's systems; and
G. The
management of the utility's operations.
2. Staff's settlement proposal will include
the following documents:
A. Draft revised
tariff sheets reflecting the settlement proposal;
B. A draft disposition agreement reflecting
the settlement proposal;
C. Staff's
updated workpapers; and
D. Any
other documents supporting the staff's settlement proposal.
3. If OPC makes a settlement proposal, it
shall include the following documents:
A.
OPC's updated workpapers; and
B.
Any other documents supporting OPC's settlement proposal.
(B) Any settlement proposal, including any
draft disposition agreement, and all supporting documents attached thereto are
strictly intended for settlement negotiations only. If staff and the utility
are unable to reach a full or partial settlement via disposition agreement,
neither party is bound to any position stated or implied by the settlement
proposal, draft disposition agreement, or supporting documents
provided.
(C) Not later than ten
(10) days after staff provides its settlement proposal, the public counsel, the
utility, and any other parties to the case shall notify staff whether they
agree with the proposal or, if not, provide any suggested changes and the
reasoning for those changes to the parties. Any party suggesting changes shall
provide to all other parties any audit workpapers, rate design workpapers, or
other documents in its possession that support its suggestions.
(10) At any
time prior to the filing of a disposition agreement, any party may request the
assigned regulatory law judge meet with the participants and mediate
discussions to assist them in reaching at least a partial agreement.
(11) Disposition agreement.
(A) Not later than one hundred fifty (150)
days after a small utility rate case is opened, staff shall file one (1) of the
following:
1. A disposition agreement
involving, at a minimum, staff and the utility, and providing for a full
resolution of the small utility rate case;
2. A disposition agreement involving, at a
minimum, staff and the utility, and providing for a partial resolution of the
small utility rate case and a motion requesting that the case proceed to an
evidentiary hearing; or
3. A motion
stating that agreements cannot be reached on any of the issues related to the
small utility rate case and asking that the case proceed to an evidentiary
hearing.
(B) If the
disposition agreement provides for a full resolution of the small utility rate
case and is executed by all parties, the utility will submit to the commission,
within five (5) business days of staff's filing, new and/or revised tariff
sheets bearing an effective date of not fewer than thirty (30) days later, to
implement the agreement.
(C) If the
disposition agreement filed by staff provides for a full resolution of the
small utility rate case but is not executed by all parties, the utility will
submit to the commission concurrent with staff's filing new and/or revised
tariff sheets, bearing an effective date that is not fewer than forty-five (45)
days after they are filed, to implement the agreement.
(D) No later than five (5) business days
after the filing of a full or partial disposition agreement that is not
executed by all parties, each non-signatory party shall file a pleading stating
its position regarding the disposition agreement and the related tariff
revisions and providing the reasons for its position. If the non-signatory
party intends to ask that the case be resolved by evidentiary hearing, it must
do so in this pleading. If a disposition agreement is not executed by all
parties, and a hearing is requested, then no party is bound to any position
stated or implied by the disposition agreement or supporting documents if the
company determines it no longer wants to pursue positions in the disposition
agreement.
(E) If any party
requests an evidentiary hearing where the disposition agreement filed by staff
provides for a full resolution of the small utility rate case and is executed
by at least the utility and staff, either the utility or staff may present
evidence in support of the disposition agreement.
1. If the utility requests to be excused from
participating as a party in such an evidentiary hearing through a utility
representative's affidavit submitted by staff or a motion submitted by the
utility, the regulatory law judge may grant that request and issue a notice in
the case file that the request has been made and granted. However,
representatives of the utility may still be called as witnesses by other
parties.
(12)
Evidentiary hearing procedures.
(A) Any party
may file a request for an evidentiary hearing. A request for an evidentiary
hearing shall include a specified list of issues that the requesting party
believes should be the subject of the hearing.
(B) Once such a request is filed, the
regulatory law judge will issue a procedural schedule designed to resolve the
case in the time remaining in the small utility rate case process, consistent
with the requirements of due process and fairness to the parties and the
utility's customers and will suspend the utility's pending tariff revisions, if
any, pending completion of the hearing.
(13) The small utility rate case shall be
wholly submitted to the commission for decision not later than two hundred
forty (240) days after the small utility rate case is opened in order for the
commission's report and order regarding the case to be effective not later than
two hundred seventy (270) days after the small utility rate case is
opened.
(14) The commission must
set just and reasonable rates, which may result in a revenue increase more or
less than the increase originally sought by the utility, or which may result in
a revenue decrease.
(15) Waiver of
Provisions of this Rule. Any provision of this rule, including the requirement
that the commission's report and order to resolve the case be effective no
later than two hundred seventy (270) days after the small utility rate case is
opened, may be waived by the commission upon a finding of good cause.
*Original authority: 386.040, RSMo 1939; 386.250, RSMo
1939, amended 1963, 1967, 1977, 1980, 1987, 1988, 1991, 1993, 1995, 1996;
393.140, RSMo 1939, amended 1949, 1967; 393.290, RSMo 1939, amended 1967; and
393.291, RSMo 2003.
