Current through Register Vol. 49, No. 6, March 15, 2024
PURPOSE: This rule implements the provisions of
Senate Bill 179, codified at section
386.266,
RSMo Supp. 2008, which permits the commission to authorize the inclusion of an
environmental cost recovery mechanism in utility rates.
(1) As used in this rule, the following terms
mean:
(A) EFIS means the electronic filing
and information system of the commission;
(B) Electric utility means electrical
corporation as defined in section
386.020, RSMo,
subject to commission regulation pursuant to Chapters 386 and 393,
RSMo;
(C) Environmental compliance
plan means a twenty (20)-year forecast of environmental compliance investments
and a detailed four (4)-year plan for complying with federal, state, and local
environmental laws, regulations, and rules. The four (4)-year plan will include
plans to use emission allowances for compliance, plans for emission allowance
transactions, and, on a generation unit basis, plans for investments in
emission control equipment. The environmental compliance plan shall be
consistent with the implementation plan of the most recent resource plan filing
except as otherwise explained by the electric utility. Approval of an
Environmental Cost Recovery Mechanism (ECRM) does not imply approval or
predetermination of prudence of the environmental compliance plan;
(D) Environmental Cost Recovery Mechanism
(ECRM) means a mechanism established in a general rate proceeding that allows
periodic rate adjustments, outside a general rate proceeding, to reflect the
net increases or decreases in an electric utility's environmental revenue
requirement, plus additional environmental costs incurred since the prior
general rate proceeding;
(E)
Environmental costs means prudently incurred costs, both capital and expense,
directly related to compliance with any federal, state, or local environmental
law, regulation, or rule.
1. Environmental
costs do not include fuel and purchased power costs as defined in
4 CSR
240-3.161(1)(A).
2. Prudently incurred costs do not include
any increased costs resulting from negligent or wrongful acts or omissions by
the utility;
(F) The
environmental revenue requirement shall be comprised of the following:
1. All expensed environmental costs (other
than taxes and depreciation associated with capital projects) that are included
in the electric utility's revenue requirement in the general rate proceeding in
which the ECRM is established; and
2.
The costs (i.e., the return, taxes, and depreciation) of any major
capital projects whose primary purpose is to permit the electric utility to
comply with any federal, state, or local environmental law, regulation, or
rule. Representative examples of such capital projects to be included (as of
the date of adoption of this rule) are electrostatic precip-itators, fabric
filters, nitrous oxide emissions control equipment, and flue gas
desulfuriza-tion equipment. The costs of such capital projects shall be those
identified on the electric utility's books and records as of the last day of
the test year, as updated, utilized in the general rate proceeding in which the
ECRM is established;
(G)
General rate proceeding means a general rate increase proceeding or complaint
proceeding before the commission in which all relevant factors that may affect
the costs, or rates and charges, of the electric utility are considered by the
commission; and
(H) Rate class is a
customer class defined in an electric utility's tariff. Generally, rate classes
include Residential, Small General Service, Large General Service, and Large
Power Service, but may include additional rate classes. Each rate class
includes all customers served under all variations of the rate schedules
available to that class.
(2) When an electric utility files to
establish an ECRM as described in
4 CSR
240-20.091(2), the electric utility
shall file the following supporting information as part of, or in addition to,
its direct testimony:
(A) An example of the
notice to be provided to customers as required by
4 CSR
240-20.091(2)(E);
(B) An example customer bill showing how the
proposed ECRM shall be separately identified on affected customers' bills in
accordance with 4 CSR
240-20.091(8);
(C) Proposed ECRM rate schedules;
(D) A general description of the design and
intended operation of the proposed ECRM;
(E) A complete explanation of how the
proposed ECRM is reasonably designed to provide the electric utility a
sufficient opportunity to earn a fair return on equity;
(F) A complete explanation of how the
proposed ECRM shall be trued-up to reflect over- or under-collections on at
least an annual basis;
(G) A
complete description of how the proposed ECRM is compatible with the
requirement for prudence reviews;
(H) A complete explanation of all the costs
that shall be considered for recovery under the proposed ECRM and the specific
account used for each cost item on the electric utility's books and
records;
(I) A complete explanation
of all of the costs, both capital and expense, incurred to comply with any
current federal, state, or local environmental law, regulation, or rule that
the electric utility is proposing be included in base rates and the specific
account used for each cost item on the electric utility's books and
records;
(J) A complete explanation
of all the revenues that shall be considered in the determination of the amount
eligible for recovery under the proposed ECRM and the specific account where
each such revenue item is recorded on the electric utility's books and
records;
(K) A complete explanation
of any feature designed into the proposed ECRM or any existing electric utility
policy, procedure, or practice that can be relied upon to ensure that only
prudent costs shall be eligible for recovery under the proposed ECRM;
(L) For each of the major categories of costs
that the electric utility seeks to recover through its proposed ECRM, a
complete explanation of the specific rate class cost allocations and rate
design used to calculate the proposed environmental revenue requirement and any
subsequent ECRM rate adjustments during the term of the proposed
ECRM;
(M) A complete explanation of
any change in business risk to the electric utility resulting from
implementation of the proposed ECRM in setting the electric utility's allowed
return in any rate proceeding, in addition to any other changes in business
risk experienced by the electric utility;
(N) The electric utility's environmental
compliance plan including a complete description of-
1. The electric utility's long-term
environmental compliance planning process;
2. The analysis performed to develop the
electric utility's environmental compliance plan; and
3. If the environmental compliance plan is
inconsistent with the electric utility's most recent resource plan filing, a
detailed explanation of why such inconsistencies exist; and
(O) Authorization for the
commission staff to release the previous five (5) years of historical
surveillance reports submitted to the commission staff by the electric utility
to all parties to the case.
(3) When an electric utility files a general
rate proceeding following the general rate proceeding that established its ECRM
as described by 4 CSR
240-20.091(2) in which it requests
that its ECRM be continued or modified, the electric utility shall file with
the commission and serve parties, as provided in sections (9) through (11) in
this rule, the following supporting information as part of, or in addition to,
its direct testimony:
(A) An example of the
notice to be provided to customers as required by
4 CSR
240-20.091(2)(E);
(B) If the electric utility proposes to
change the identification of the ECRM on the customer's bill, an example
customer bill showing how the proposed ECRM shall be separately identified on
affected customers' bills, including the proposed language, in accordance with
4 CSR
240-20.091(8);
(C) Proposed ECRM rate schedules;
(D) A general description of the design and
intended operation of the proposed ECRM;
(E) A complete explanation of how the
proposed ECRM is reasonably designed to provide the electric utility a
sufficient opportunity to earn a fair return on equity;
(F) A complete explanation of how the
proposed ECRM shall be trued-up to reflect over- or under-collections on at
least an annual basis;
(G) A
complete description of how the proposed ECRM is compatible with the
requirement for prudence reviews;
(H) A complete explanation of all the costs
that shall be considered for recovery under the proposed ECRM and the specific
account used for each cost item on the electric utility's books and
records;
(I) A complete explanation
of all of the costs, both capital and expense, incurred to comply with any
current federal, state, or local environmental law, regulation, or rule that
the electric utility is proposing be included in base rates and the specific
account used for each cost item on the electric utility's books and
records;
(J) A complete explanation
of all the revenues that shall be considered in the determination of the amount
eligible for recovery under the proposed ECRM and the specific account where
each such revenue item is recorded on the electric utility's books and
records;
(K) A complete explanation
of any feature designed into the proposed ECRM or any existing electric utility
policy, procedure, or practice that can be relied upon to ensure that only
prudent costs shall be eligible for recovery under the proposed ECRM;
(L) For each of the major categories of costs
that the electric utility seeks to recover through its proposed ECRM, a
complete explanation of the specific rate class cost allocations and rate
design used to calculate the proposed environmental revenue requirement and any
subsequent ECRM rate adjustments during the term of the proposed
ECRM;
(M) A complete explanation of
any change in business risk to the electric utility resulting from
implementation of the proposed ECRM in setting the electric utility's allowed
return in any rate proceeding, in addition to any other changes in business
risk experienced by the electric utility;
(N) A description of how responses to
subsections (3)(B) through (M) differ from responses to subsections (3)(B)
through (M) for the currently approved ECRM;
(O) The electric utility's environmental
compliance plan including a complete description of-
1. The electric utility's long-term
environmental compliance planning process;
2. The analysis performed to develop the
electric utility's environmental compliance plan; and
3. If the environmental compliance plan is
inconsistent with the electric utility's most recent resource plan filing, a
detailed explanation of why such inconsistencies exist; and
(P) Any additional information that may have
been ordered by the commission in the prior general rate proceeding to be
provided.
(4) When an
electric utility files a general rate proceeding following the general rate
proceeding that established its ECRM as described in
4 CSR
240-20.091(3) in which it requests
that its ECRM be discontinued, the electric utility shall file with the
commission and serve parties, as provided in sections (9) through (11) in this
rule, the following supporting information as part of, or in addition to, its
direct testimony:
(A) An example of the
notice to be provided to customers as required by
4 CSR
240-20.091(3)(B);
(B) A complete explanation of how the
over-collection or under-collection of the ECRM that the electric utility is
proposing to discontinue shall be handled;
(C) A complete explanation of why the ECRM is
no longer necessary to provide the electric utility a sufficient opportunity to
earn a fair return on equity;
(D) A
complete explanation of any change in business risk to the electric utility
resulting from discontinuation of the ECRM in setting the electric utility's
allowed return, in addition to any other changes in business risk experienced
by the electric utility; and
(E)
Any additional information that may have been ordered by the commission in the
prior general rate proceeding to be provided.
(5) Each electric utility with an ECRM shall
submit, with an affidavit attesting to the veracity of the information, the
following information on a monthly basis to the manager of the auditing
department of the commission, the Office of the Public Counsel (OPC), and
others, as provided in sections (9) through (11) in this rule. The information
may be submitted to the manager of the auditing department through EFIS. The
following information shall be aggregated by month and supplied no later than
sixty (60) days after the end of each month when the ECRM is in effect. The
first submission shall be made within sixty (60) days after the end of the
first complete month after the ECRM goes into effect. It shall contain, at a
minimum, the following:
(A) The revenues
billed pursuant to the ECRM by rate class and voltage level, as
applicable;
(B) The revenues billed
through the electric utility's base rate allowance by rate class and voltage
level;
(C) All significant factors
that have affected the level of ECRM revenues along with workpapers documenting
these significant factors;
(D) The
difference, by rate class and voltage level, as applicable, between the total
billed ECRM revenues and the projected ECRM revenues;
(E) Any additional information ordered by the
commission to be provided; and
(F)
To the extent any of the requested information outlined above is provided in
response to another section, the information only needs to be provided
once.
(6) Each electric
utility with an ECRM shall submit, with an affidavit attesting to the veracity
of the information, a Surveillance Monitoring Report, which shall be treated as
highly confidential, as required in
4 CSR
240-20.091(9), to the manager of the
auditing department of the commission, OPC, and others, as provided in sections
(9) through (11) in this rule. The information may be submitted to the manager
of the auditing department through EFIS.
(A)
There are five (5) parts to the electric utility Surveillance Monitoring
Report. Each part, except Part One, Rate Base Quantifications, shall contain
information for the last twelve (12)-month period and the last quarter data for
total company electric operations and Missouri jurisdictional operations. Part
One, Rate Base Quantifications, shall contain only information for the ending
date of the period being reported. The form of the Surveillance Monitoring
Report form is included herein.
1. Rate Base
Quantifications Report. The quantification of rate base items on page one shall
be consistent with the methods or procedures used in the most recent rate
proceeding unless otherwise specified. The report shall consist of specific
rate base quantifications of-
A. Plant in
service;
B. Reserve for
depreciation;
C. Materials and
supplies;
D. Cash working
capital;
E. Fuel
inventory;
F.
Prepayments;
G. Other regulatory
assets;
H. Customer advances;
I. Customer deposits;
J. Accumulated deferred income
taxes;
K. Any other item included
in the utility's rate base in the most recent rate proceeding;
L. Net Operating Income from page three; and
M. Calculation of the overall return on rate base.
2. Capitalization Quantifications Report.
Page two shall consist of specific capitalization quantifications of-
A. Common stock equity (net);
B. Preferred stock (par or stated value
outstanding);
C. Long-term debt
(including current maturities);
D.
Short-term debt; and E. Weighted cost of capital including component
costs.
3. Income
Statement. Page three shall consist of an income statement containing specific
quantification of-
A. Operating revenues to
include sales to industrial, commercial, and residential customers, sales for
resale, and other components of total operating revenues;
B. Operating and maintenance expenses for
fuel expense, production expenses, purchased power energy, and
capacity;
C. Transmission
expenses;
D. Distribution
expenses;
E. Customer accounts
expenses;
F. Customer service and
information expenses;
G. Sales
expenses;
H. Administrative and
general expenses;
I. Depreciation,
amortization, and decommissioning expense;
J. Taxes other than income taxes;
K. Income taxes; and
L. Quantification of heating degree and
cooling degree days, actual and normal.
4. Jurisdictional Allocation Factor Report.
Page four shall consist of a listing of jurisdictional allocation factors for
the rate base, capitalization quantification reports, and income
statement.
5. Financial Data Notes.
Page five shall consist of notes to financial data including, but not limited
to:
A. Out-of-period adjustments;
B. Specific quantification of material
variances between actual and budget financial performance;
C. Material variances between current twelve
(12)-month period and prior twelve (12)-month period revenue;
D. Expense level of items ordered by the
commission to be tracked pursuant to the order establishing the ECRM;
E. Budgeted capital projects;
F. Events that materially affect debt or
equity surveillance components; and
G.
All settlements in regards to environmental compliance causing
the electric utility to incur expenses or make investments in excess of one
hundred thousand dollars ($100,000) or fines against the electric utility in
regards to environmental compliance greater than one hundred thousand dollars
($100,000).
(B) The Surveillance Monitoring Report shall
contain any additional information ordered by the commission to be
provided.
(C) The electric utility
shall annually submit its approved budget, in electronic form, based upon its
budget year in a format similar to the Surveillance Monitoring Report. The
budget submission shall provide a quarterly and annual quantification of the
electric utility's income statement. The budget shall be submitted within
thirty (30) days of its approval by the electric utility's management or within
sixty (60) days of the beginning of the electric utility's fiscal year,
whichever is earliest. The budget submission shall be treated as highly
confidential pursuant to
4 CSR
240-2.135.
(D) If the electric utility has a rate
adjustment mechanism as defined in
4 CSR
240-20.090(1)(G), the surveillance
report submitted by the electric utility as required by
4 CSR
240-3.161(6) along with information
submitted in response to subparagraph (6)(A)5.G. shall meet the surveillance
reporting required by this section.
(7) When an electric utility files tariff
schedules to adjust an ECRM rate as described in
4 CSR
240-20.091(4) with the commission,
and serves upon parties as provided in sections (9) through (11) in this rule,
the tariff schedules must be accompanied by supporting testimony, and at least
the following supporting information:
(A) The
following information shall be included with the filing:
1. For the period from which historical costs
are used to adjust the ECRM rate:
A. Emission
allowance costs differentiated by purchases, swaps, and loans;
B. Net revenues from emission allowance
sales, swaps, and loans;
C.
Extraordinary costs not to be passed through, if any, due to such costs being
an insured loss, or subject to reduction due to litigation, or for any other
reason;
D. Base rate component of
environmental compliance costs and revenues;
E. Identification of capital projects placed
in service that were not anticipated in the previous general rate proceeding;
and
F. Any additional requirements
ordered by the commission in the prior general rate proceeding;
2. The levels of environmental
capital costs and expenses in the base rate revenue requirement from the prior
general rate proceeding;
3. The
levels of environmental capital costs in the base rate revenue requirement from
the prior general rate proceeding as adjusted for the proposed date of the
periodic adjustment;
4. The capital
structure as determined in the prior general rate proceeding;
5. The cost rates for the electric utility's
debt and preferred stock as determined in the prior general rate
proceeding;
6. The electric
utility's cost of common equity as determined in the prior general rate
proceeding;
7. Calculation of the
proposed ECRM collection rates; and
8. Calculations underlying any seasonal
variation in the ECRM collection rates; and
(B) Workpapers supporting all items in
subsection (7)(A) shall be submitted to the manager of the auditing department
and served upon parties as provided in sections (9) through (11) in this rule.
The workpapers may be submitted to the manager of the auditing department
through EFIS.
(8) When
an electric utility that has an ECRM files its application containing its
annual true-up with the commission, as described in
4 CSR
240-20.091(5), any rate schedule
filing must be accompanied by supporting testimony, and the electric utility
shall-
(A) File the following information with
the commission and serve upon parties as provided in sections (9) through (11)
in this rule:
1. Amount of costs that it has
over-collected or under-collected through the ECRM by rate class and voltage
level, as applicable;
2. Proposed
adjustments or refunds by rate class and voltage level as applicable;
3. Electric utility's short-term borrowing
rate; and
4. Any additional
information ordered by the commission;
(B) Submit the following information to the
manager of the auditing department and serve upon the parties as provided in
sections (9) through (11) in this rule. The information may be submitted to the
manager of the auditing department through EFIS.
1. Workpapers detailing how the determination
of the over-collection or under-col-lection of costs through the ECRM was made
including any model inputs and outputs and the derivation of any model
inputs.
2. Workpapers detailing the
proposed adjustments or refunds.
3.
Basis for the electric utility's short-term borrowing rate.
4. Any additional information ordered by the
commission to be provided.
(9) Providing to other parties items required
to be filed or submitted in preceding sections (3) through (8). Information
required to be filed with the commission or submitted to the manager of the
auditing department of the commission and to OPC in sections (3) through (8)
shall also be, in the same format, served on or submitted to any party to the
related general rate proceeding in which the ECRM was approved by the
commission, periodic adjustment proceeding, annual true-up, prudence review, or
general rate case to modify, extend, or discontinue the same ECRM, pursuant to
the procedures in 4 CSR 240-2.135 for handling
confidential information, including any commission order issued
thereunder.
(10) Party status and
providing to other parties affidavits, testimony, information, reports, and
workpapers in related proceedings subsequent to general rate proceeding
establishing ECRM.
(A) A person or entity
granted intervention in a general rate proceeding in which an ECRM is approved
by the commission shall be a party to any subsequent related periodic
adjustment proceeding, annual true-up, or prudence review, without the
necessity of applying to the commission for intervention. In any subsequent
general rate proceeding, such person or entity must seek and be granted status
as an intervenor to be a party to that case. Affidavits, testimony,
information, reports, and workpapers to be filed or submitted in connection
with a subsequent related periodic adjustment proceeding, annual true-up,
prudence review, or general rate case to modify, extend, or discontinue the
same ECRM shall be served on or submitted to all parties from the prior related
general rate proceeding and on all parties from any subsequent related periodic
adjustment proceeding, annual true-up, prudence review, or general rate case to
modify, extend, or discontinue the same ECRM, concurrently with filing the same
with the commission or submitting the same to the manager of the auditing
department of the commission and OPC, pursuant to the procedures in
4 CSR
240-2.135 for handling confidential information,
including any commission order issued thereunder.
(B) A person or entity not a party to the
general rate proceeding in which an ECRM is approved by the commission may
timely apply to the commission for intervention, pursuant to
4 CSR
240-2.075(2) through (4) of the
commission's rule on intervention, respecting any related subsequent periodic
adjustment proceeding, annual true-up, or prudence review, or, pursuant to
4 CSR
240-2.075(1) through (5), respecting
any subsequent general rate case to modify, extend, or discontinue the same
ECRM. If no party to a subsequent periodic adjustment proceeding, annual
true-up, or prudence review objects within ten (10) days of the filing of an
application for intervention, the applicant shall be deemed as having been
granted intervention without a specific commission order granting intervention,
unless within the above-referenced ten (10)-day period the commission denies
the application for intervention on its own motion. If an objection to the
application for intervention is filed on or before the end of the
above-referenced ten (10)-day period, the commission shall rule on the
application and the objection within ten (10) days of the filing of the
objection.
(11)
Discovery. The results of discovery from a general rate proceeding where the
commission may approve, modify, reject, extend, or discontinue an ECRM, or from
any subsequent periodic adjustment proceeding, annual true-up, or prudence
review relating to the same ECRM, may be used without a party resubmitting the
same discovery requests (data requests, interrogatories, requests for
production, requests for admission, or depositions) in the subsequent
proceeding to parties that produced the discovery in the prior proceeding,
subject to a ruling by the commission concerning any evidentiary objection made
in the subsequent proceeding.
(12)
Supplementing and updating data requests in subsequent related proceedings. If
a party, which submitted data requests relating to a proposed ECRM in the
general rate proceeding where the ECRM was established or in the general rate
proceeding where the same ECRM was modified or extended, or in any subsequent
related periodic adjustment proceeding, annual true-up, or prudence review,
wants the responding party to whom the prior data requests were submitted to
supplement or update that responding party's prior responses for possible use
in a subsequent related periodic adjustment proceeding, annual true-up,
prudence review, or general rate case to modify, extend, or discontinue the
same ECRM, the party which previously submitted the data requests shall submit
an additional data request to the responding party to whom the data requests
were previously submitted which clearly identifies the particular data requests
to be supplemented or updated and the particular period to be covered by the
updated response. A responding party to a request to supplement or update shall
supplement or update a data request response from: a related general rate
proceeding where a ECRM was established; a general rate case where the same
ECRM was modified or extended; or a related periodic adjustment proceeding,
annual true-up, or prudence review, which the responding party has learned or
subsequently learns is in some material respect incomplete or
incorrect.
(13) Separate cases for
each general rate proceeding involving an ECRM and for each mutually exclusive
twelve (12)-month annual true-up period of an ECRM. Each general rate
proceeding where the commission may approve, modify, or reject an ECRM; each
general rate case where the commission may authorize the modification,
extension, or discontinuance of an ECRM; and each mutually exclusive twelve
(12)-month period of an ECRM that encompasses an annual true-up, prudence
review, and possible periodic adjustments shall comprise a separate case. The
same procedures for handling confidential information shall apply, pursuant to
4 CSR
240-2.135, as in the immediately preceding ECRM case
for the particular electric utility, unless otherwise directed by the
commission on its own motion or as requested by a party and directed by the
commission.
(14) New ECRM. For the
purposes of this rule, an ECRM, if continued, modified, or extended in a
general rate case, even in substantially the form approved in the prior general
rate proceeding, shall be considered to be a new distinct ECRM after each
general rate proceeding required by section 386.266.4(3), RSMo.
(15) Right to Discovery Unaffected. In
addressing certain discovery matters and the provision of certain information
by electric utilities, this rule is not intended to restrict the discovery
rights of any party.
(16) Waivers.
Provisions of this rule may be waived by the commission for good cause
shown.
(17) Rule Review. The
commission shall review the effectiveness of this rule by no later than
December 31, 2011, and may, if it deems necessary, initiate rulemaking
proceedings to revise this rule.
Click
to view image
Click
to view image
Click
to view image
Click
to view image
Click
to view image
*Original authority: 386.250, RSMo 1939, amended 1963,
1967, 1977, 1980, 1987, 1988, 1991, 1993, 1995, 1996; 386.266, RSMo 2005; and
393.140, RSMo 1939, amended 1949, 1967.
Rule Action Notice: On December 4, 2008, the circuit court
granted the moving parties' (Office of Public Counsel and Missouri Industrial
Energy Consumers) motion for reversal and entered a judgment reversing the
Public Service Commission's Final Order of Rulemaking. The circuit court's
judgment reversing the commission's Final Order of Rulemaking became final on
January 4, 2009. After January 4, 2009,
4 CSR
240-3.162 shall be terminated and of no further force
and effect.
