SB 5 - The act modifies and creates new provisions relating to utilities.TAX ASSESSMENT OF STATIONARY PROPERTY (Section 137.122)
Beginning January 1, 2026, provisions relating to depreciable tangible personal property shall apply to all real property that is stationary and used for transportation or storage of liquid and gaseous products, including water, sewage, and certain natural gas.
To estimate the value of the real property under the act, each assessor shall value such property by applying a 20-year recovery period to the original cost of the property according to the 20-year depreciation schedule. The presumption as to the proper method of determining the assessed value of such property shall apply regardless of when such property was placed in service.
Each taxpayer owning property under the act shall provide to an assessor, on or before May 1st of the applicable tax year, the original cost and year placed in service of such property, as described in the act.
These provisions are identical to a provision in SB 896 (2024) and HB 2110 (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. The act repeals certain provisions relating to the compensation schedule and expenses incurred by the 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 provisions in SCS/HCS/HB 1746 (2024).
TEST YEAR FOR RATE PROCEEDINGS FOR CERTAIN UTILITIES (Section 393.150)
Under the act, beginning July 1, 2026, the test year for rate proceedings, if requested by certain utilities, shall 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 the utilities, unless the Public Service Commission makes a determination that using a future test year is detrimental to the public interest. The projected total rate base at the end of the future test year shall be used to establish new base rates. New base rates shall not go into effect before the 1st day of the future test year.
Certain public utilities that elect to utilize a future test year within 45 days of the end of the future test year shall update their base rates as described in the act. The total ending rate base and expense items in the update shall not be greater than the total ending rate base and expense items approved by the Commission in its report and order establishing base rates. The Commission and parties to the case shall have 60 days to review the accuracy of the updated information provided by the utility. The Commission shall order the utility to file new tariff sheets reflecting the update, as described in the act.
Certain utilities that request a test year shall not recover the costs of any plant investments made during the test year period under certain mechanisms described in current law.
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 45 days of the end of the future test year. If the actual rate base is less than the rate base used to set base rates in the prior general rate proceeding, the portion of the annual revenue requirement reflecting the rate base 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 consider 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 experienced 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 45 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, the 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 act creates definitions for "base rates" and "revenue requirement".
These provisions are similar to SCS/SB 1280 (2024), a provision in SCS/HCS/HB 1746 (2024), and 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".
These provisions are identical to SCS/SB 741 (2024), provisions in SCS/SB 740 (2024), SB 896 (2024), similar to provisions in SCS/HCS/HB 1746 (2024), SCS/SB 567 (2023), and similar to provisions in HB 1152 (2023) and HCS/SB 275 (2023).
JULIA SHEVELEVA