SB 740
Modifies provisions relating to utilities
Sponsor:
LR Number:
4317S.04C
Last Action:
4/24/2024 - Informal Calendar S Bills for Perfection
Journal Page:
Title:
SCS SB 740
Effective Date:
August 28, 2024

Current Bill Summary

SS/SCS/SB 740 - This act modifies and creates new provisions relating to utilities.

VIDEO SERVICES (Section 67.2677)

This act modifies the definition of "video service" to include the provision of video programming by a video service provider provided through wireline facilities located in a public right-of-way without regard to the delivery technology. "Video service" does not include any video programming accessed via a service that enables users to access content over the internet, including streaming content.

This provision is identical to SB 803 (2024), SB 947 (2024), the perfected SS#2/SB 872 (2024), SB 999 (2024), SB 1316 (2024), SB 152 (2023), and substantially similar to HB 2057 (2024), a provision in the perfected HCS/HB 2058 (2024), a provision in HCS/HB 2206 (2024), HB 2281 (2024), a provision in HCS/SS/SB 222 (2023), HCS/SB 275 (2023), SB 299 (2023), HCS/HB 536 (2023), HCS/HBs 651, 479 & 647 (2023), and SCS/SB 1232 (2022).

UNIFORM SMALL WIRELESS FACILITY DEPLOYMENT ACT (Section 67.5122)

The act repeals a sunset provision relating to the Uniform Small Wireless Facility Deployment Act.

This provision is identical to a provision in HCS/HB 1813 (2024), the perfected HB 1995 (2024), HB 2501 (2024), HB 2549 (2024).

REIMBURSEMENT OF COSTS FOR UTILITY FACILITY RELOCATION (Sections 71.340, 226.220, and 226.224)

Under the act, a municipality shall not perform any road maintenance or construction unless it reimburses a nonrate regulated utility provider, as defined in the act, for any facility relocation costs incurred due to such project. The municipality shall be authorized to pay such facility relocation costs as part of the cost of the road project.

The Department of Transportation shall reimburse nonrate regulated utility providers for any costs associated with facility relocation under the act.

The State Road Fund shall be used for reimbursing nonrate regulated utility providers for any costs associated with facility relocation due to road maintenance or construction.

This provision is substantially similar to HCS/HB 2056 (2024), and similar to SCS/SB 1018 (2024).

COMPENSATION OF TRUSTEES OF COMMON SEWER DISTRICTS (Sections 204.300 and 204.610)

Trustees appointed by the governing body of certain counties may be paid reasonable compensation by the common sewer district for their services outside their duties as trustees. Monetary compensation of such trustees is described in the act. This act repeals certain provisions that any such compensation must be approved by resolution of the board of trustees, or by a resolution, order, or ordinance of the governing body of the county. The act further repeals the provision that all expenses incurred by the trustees in the performance of their duties must be reimbursed by the district. This act also repeals certain provisions regarding counties with a ten-member board of trustees. The trustees of a district with an eleven-member board and located in two counties shall receive no compensation for their services but may be reimbursed for expenses. Reimbursement of trustees of a ten-member board are described in the act.

Each trustee appointed or elected in the circuit court decree or amended decree of incorporation for a reorganized common sewer district may receive certain monetary compensation for their services as trustees as described in the act. The act repeals the provisions stating that such trustees shall receive no compensation for their services but may be compensated for reasonable expenses normally incurred in the performance of their duties.

These provisions are identical to provisions in SB 896 (2024), HB 2476 (2024), HCS/SB 155 (2023), and similar to HCS/HB 1746 (2024).

FEDERALLY MANDATED NATURAL GAS SAFETY STANDARDS (Section 386.572)

The act repeals certain provisions relating to maximum penalties for violations of federally mandated natural gas safety standards and provides that the maximum penalties shall not exceed an amount as determined by the Secretary of Transportation of the United States.

This provision is identical to SB 1470 (2024), SB 450 (2023), SB 953 (2022), and substantially similar to HB 2660 (2024).

RENEWABLE NATURAL GAS PROGRAM (Section 386.895)

Under the act, no later than July 1, 2025, the Public Service Commission shall adopt rules permitting gas corporations to voluntarily institute a renewable natural gas program.

A qualified investment shall be deemed prudent for any gas corporation when the aggregate of such qualified investment does not exceed certain parameters described in the act. The qualified investment shall apply to a gas corporation's combined gas utility operations and gas service areas located in the state. All costs incurred for qualified investments shall also be reasonable to be deemed prudent by the Commission.

A filing by a gas corporation pursuant to the renewable natural gas program under the act shall include a timeline for the investment and completion of the proposed renewable natural gas infrastructure. For any filing made by a gas corporation for a project with an aggregate cost of less than $5,000,000, the Commission shall issue a decision within 90 days of submission. For any such filing, the Commission may extend the review period for 30 additional days for good cause. The Commission shall not extend the review period more than twice for a total of 60 additional days.

On or before January 1, 2026, instead of January 1, 2023, the Division of Energy of the Department of Natural Resources shall provide a report on the renewable natural gas program under the act.

The act and any rule enacted under the renewable natural gas provisions shall expire nine years from the date the Commission promulgates rules to implement the renewable natural gas program.

This provision is similar to SCS/SB 829 (2024), the perfected HCS/HB 1746 (2024), HB 2193 (2024).

TEST YEAR FOR RATE PROCEEDINGS FOR CERTAIN UTILITIES (Section 393.150)

Under the act, the test year for new rate proceedings shall, if requested by certain utilities under the act, be a future year consisting of the first 12 full calendar months after the operation of law date for schedules stating new base rates filed by certain utilities under the act. The new base rates shall not go into effect before the 1st date of the future test year.

Certain public utilities that elect to utilize a future test year within 30 days of the end of the future test year shall update their base rates as described in the act. The Public Service Commission shall have 60 days to review the accuracy of the updated information provided by the utilities, unless a party to the rate case initiates a further rate proceeding.

Certain utilities that request a test year under the act shall not recover the costs of any plant investments made during the test year period under certain mechanisms.

For utilities that elected to use a future test year, a reconciliation of the rate base at the end of the future test year shall be provided to the Commission within 30 days of the end of the future test year. If the actual amounts for these expenses are less than the amounts used to calculate the revenue requirements in the prior general rate proceeding, the difference shall be returned to customers. The revenue requirement calculations are described in the act. The difference in revenue requirement shall be placed into a regulatory liability to be returned to customers in the next general rate proceeding with such regulatory liability to accrue carrying costs at the utility's weighted average cost of capital.

The Commission may take into account any change in business risk to the utility resulting from implementation of the adjustment mechanism in setting the utility's allowed return in any rate proceeding, in addition to any other changes in business risk experience by the utility.

For a utility that elected to use a future test year, a reconciliation of payroll expense, certain employee benefits and rate case expense at the end of the future test year shall be provided to the Commission within 30 days of the end of the future test year. If the actual amounts are less than the amounts used to calculate the revenue requirement in the prior general rate proceeding under the act, the portion of the annual revenue requirement comprising of such expense difference shall be returned to customers. The difference in revenue requirement shall be placed into a regulatory liability to be returned to customers in the next general rate case with such regulatory liability to accrue carrying costs at the utility's weighted average cost of capital.

The provision is similar to SCS/SB 1280 (2024), to a provision in HB 2167 (2024).

A LARGE WATER PUBLIC UTILITY ACQUIRING A SMALL WATER UTILITY (Sections 393.320 and 393.1506)

This act provides that for any acquisition of a small water utility by a large public water utility with an appraised value of $5,000,000 or less, the Public Service Commission shall issue a decision of such acquisition within six months from the submission of the application for such acquisition by the large public water utility. Prior to the expiration of the six-months period, the Commission staff or the office of the Public Counsel may request, upon a showing of good cause, from the Commission an extension for approval of the application for an additional 30 days.

This act further modifies the definition of "large water public utility".

This provision is identical to provisions in SB 896 (2024), SCS/SB 741 (2024), substantially similar to HCS/SB 1746 (2024), and similar to SCS/SB 567 (2023), and to provisions in HB 1152 (2023) and in HCS/SB 275 (2023).

The Public Service Commission may use procedures related to the acquisition of a small water utility by a large water public utility, provided that the Commission independently concludes that a certificate of convenience and necessity should be granted, unless the Commission finds that application of the current law results in rates that are unjust and unreasonable.

A large water public utility's choice to comply with the provisions of the current law does not automatically ensure that the transaction is in the public interest. The Commission shall independently determine whether the acquisition is in the public interest, regardless of whether the matter has been put to a vote of the small water utility's ratepayers.

These provisions are identical to SB 1321 (2024).

CLOSURE OF ELECTRIC POWER PLANTS (Section 393.401)

Under the act, prior to the closure of an existing electric generating power plant if the closure occurs on or after January 1, 2025, an electrical corporation, registered and doing business in Missouri, shall first certify to the Public Service Commission that it has secured and placed on the electric grid an equal or greater amount of replacement reliable electric generation as accredited power resources based on the regional transmission operator's resource accreditation for the reliable electric generation technology. To determine if an equal or greater amount of reliable electric generation is being placed on the electric grid, the electrical corporation shall compare the relevant regional transmission operator's average of the summer and winter accredited capacity for the generation technology of the closing electric plant to the relevant regional transmission operator's average of the summer and winter accredited capacity of the replacement reliable electric generation. Such average of the summer and winter accredited capacity shall equal or exceed average accredited capacity for the existing electric generating plant. Dispatchable power resources shall comprise at least 80% of the average of the summer and winter capacity of the replacement reliable electric generation.

Adequate electric transmission lines shall be in place and the replacement reliable electric generation shall be fully operational concurrently with the closure of the existing electric generating plant, except where some or all of the replacement reliable electric generation utilized interconnection facilities used by the existing electric generating power plant as described in the act. If replacement reliable electric generation utilized interconnection facilities utilized by the existing electric power plant, the replacement facilities shall be fully operational without 180 days of the closure of the existing electric plant. If an existing electric power plant is closed as a result of an unexpected or unplanned cause or event, an electrical corporation shall follow certain procedures described in the act.

The average of the summer and winter accredited capacity of the replacement reliable electric generation under the act shall be equal to or greater than the average summer and winter accredited capacity of the dispatchable existing electric generating power plant under the act using the regional transmission operator's resource accreditation as of the time construction begins on the replacement reliable electric generation. The Public Service Commission shall certify that the requirements under the act shall be met by the replacement reliable electric generation.

Reliable electric generation may be constructed in a neighboring state if the generation is connected to the electric grid of the regional transmission operator of which the electrical corporation is a member.

On or before the date that the new reliable electric generation is placed in service, the electrical corporation shall provide certification to the public service commission, the general assembly, and the governor that it has met the requirements of the act.

These provisions are identical to SCS/SB 757 (2024), and similar to HB 1753 (2024), SB 709 (2023) and SB 717 (2023).

RENEWABLE ENERGY STANDARD (Section 393.1030)

Energy meeting the criteria of the renewable energy portfolio requirements under the act that is generated from renewable energy resources and contracted for by an accelerated renewable buyer, as defined in the act, shall be subject to certain requirements described in the act. The accelerated renewable buyer shall be exempt from any renewable energy standard compliance costs as may be established by the utility and approved by the Public Service Commission as described in the act.

Each electric utility shall certify and verify to the Commission that the accelerated renewable buyer has satisfied the exemption requirements under the act for each year, or an accelerated renewable buyer may choose to certify satisfaction of this exemption by reporting to the Commission individually. Nothing in this provision shall be construed as imposing or authorizing the imposition of any reporting, regulatory or financial burden on an accelerated renewable buyer.

These provisions apply to electric utilities with more than 250,000 but less than 1 million retail customers in the state as of the end of the calendar year 2023.

These provisions are identical to HCS/HB 1746 (2024), provisions in SB 838 (2024), similar to SCS/SB 374 (2023), provisions in SB 896 (2024).

DEFERRALS BY ELECTRICAL CORPORATIONS (Section 393.1400)

The act modifies certain provisions relating to deferrals by electrical corporations.

The act removes "new natural gas units" from the definition of "qualifying electric plant".

Electrical corporations shall defer to a regulatory asset 85% of all depreciation expense and return associated with all qualifying electric plant recorded to plant-in-service on the utility's books through August 27, 2024. The act repeals certain deadlines relating to such deferrals.

Beginning August 28, 2024, an electrical corporation shall defer to a regulatory asset 85% of all depreciation expense and return as described in the act, except for a qualifying electric plant that consists of investment in new generating units for which the deferral shall be 90%.

The act excludes the cost of investments in new generating units and energy storage systems from the requirement that at least 25% of the cost of investments reflected in each year's capital investment plan shall be comprised of grid modernization projects.

The act extends the sunset date of certain provisions relating to deferrals by electrical corporations from December 31, 2028, to December 31, 2035. The deadline to file an application seeking permission from the Public Service Commission relating to deferrals shall be extended from December 31, 2026, to December 31, 2033.

Provisions relating to electrical corporations seeking deferrals shall expire on December 31, 2040, instead of on December 31, 2033.

These provisions are identical to SCS/SB 1422 (2024) and a provision in the perfected HCS/HB 1746 (2024).

DISCOUNTED GAS RATES FOR GAS CORPORATION CUSTOMERS (Section 393.1645)

This act creates provisions for gas corporation customers to be considered for a discounted gas rate.

Under the act, a new or an existing gas corporation account meeting the criteria under the act shall qualify for the following discounts:

(1) When the customer is a new customer and the new load is reasonably projected to be at least 270,000 CCF annually, the discount shall equal 25% and shall apply for four years; or

(2) When the customer is an existing customer and the new load is reasonably projected to be at least 135,000 CCF annually, the discount shall equal 25% and shall apply for four years.

To obtain one of the discounts under the act, the customer's load shall be incremental, net of any offsetting load reductions due to the termination of other accounts of the customer or an affiliate of the customer within twelve months prior to the commencement of service to the new load. The customer shall receive an economic development incentive from a governmental entity, as described in the act, in conjunction with the incremental load. The customer shall meet the criteria set forth in the gas corporation's economic development rider tariff sheet, as approved by the Public Service Commission, that are not inconsistent with the act.

Unless otherwise provided by the gas corporation's tariff, the applicable discount shall be a percentage applied to all variable base-rate components of the bill. The discount shall be applied to such incremental load from the date when the meter has been permanently set until the date that such incremental load no longer meets the criteria required to qualify for the discount as determined under the act, or a maximum of four years. The gas corporation may include in its tariff additional or alternative terms and conditions to a customer's utilization of the discount, subject to approval of such terms and conditions by the Commission.

The customer, on forms supplied by the gas corporation, shall apply for the applicable discount at least 90 days prior to the date the customer requests that the incremental usage receive one of the discounts provided for by this subsection and shall enter into a written agreement with the gas corporation reflecting the discount percentages and other pertinent details prior to which no discount will be available. If the incremental usage is not separately metered, the gas corporation's determination of the incremental usage shall control. The gas corporation shall verify the customer's consumption annually to determine continued qualification for the applicable discount. The cents-per-CCF realization resulting from application of any discounted rates as calculated shall be higher than the gas corporation's variable cost to serve such incremental usage and the applicable discounted rate shall also make a positive contribution to fixed costs associated with service to such incremental usage. If in a subsequent general rate proceeding the Commission determines that application of a discounted rate is not adequate to cover the gas corporation's variable cost to serve the accounts in question and provide a positive contribution to fixed costs, then the Commission shall reduce the discount for those accounts prospectively to the extent necessary to do so.

In each general rate proceeding concluded after August 28, 2024, the difference in revenues with the discounts under the act and the revenues without such discounts shall not be imputed into the gas corporation's revenue requirement. Instead, such revenue requirement shall be set as described in the act. To qualify for discounted rates, customers shall meet the applicable criteria within 24 months of initially receiving discounts based on metering data for calendar months 13-24 and annually thereafter. If such data indicates that the customer did not meet the applicable criteria for any subsequent 12-month period, the customer shall no longer qualify for a discounted rate. Customer usage existing at the time the customer makes application for a discounted rate under the act shall not constitute incremental usage. The discounted rates under the act apply only for variable base-rate components, with charges or credits arising from any rate adjustment mechanism authorized by law to be applied to customers qualifying for discounted rates under the act in the same manner as such rate adjustments would apply in absence of these provisions.

These provisions are substantially similar to SB 896 (2024), HCS/HB 1746 (2024), HB 2045 (2024), similar to SB 638 (2023) and HB 1143 (2023).

REVIEW OF FINANCING ORDERS FOR ENERGY TRANSITION COSTS (Section 393.1700)

Under the act, the Public Service Commission may directly contract counsel, financial advisors or other consultants as necessary for the purpose of reviewing financing orders for energy transition costs. This provision shall not be subject to state purchasing provisions. However, the Commission shall establish a policy for the bid process. Such policy shall be publicly available and any information related to contracts under the established policy shall be included in publicly available rate case documents.

These provisions are identical to HB 1728 (2024), a provision in HCS/HB 1746 (2024), a provision in SB 899 (2024), HCS/HB 1071 (2023) and similar to SB 520 (2023).

CONDEMNATION OF LAND BY CERTAIN UTILITIES (Section 523.010)

Under the act, the authority of any electrical corporation to condemn property shall not extend to the construction or erection of any structure or facility that uses wind and solar energy to generate or manufacture electricity. Notwithstanding this provision, the authority of any electrical corporation to condemn property shall extend to acquisition of rights needed to construct, operate, and maintain certain electrical infrastructure, described in the act, needed to collect and deliver energy generated or manufactured by solar and wind facilities to the distribution or transmission grid.

This provision is identical to SB 1262 (2024), SB 805 (2024), a provision in HB 1449 (2024), HB 1750 (2024), and similar SB 833 (2024), SB 577 (2023), and HB 1052 (2023).

HYDRANT INSPECTION PROGRAM (Section 640.144)

Currently, all community water systems are required to create a hydrant inspection program which includes annual testing of every hydrant of such community water systems. This act repeals the annual testing requirement of such hydrants and provides for a scheduled testing of such hydrants.

This provision is identical to SB 982 (2024), HB 1734 (2024), HCS/HB 1746 (2024), a provision in SB 896 (2024), SB 629 (2023) and HB 891 (2023).

JULIA SHEVELEVA