Missouri Revised Statutes













Chapter 386

Public Service Commission

←386.260

Section 386.266.1

386.270→

August 28, 2015

Rate schedules for interim energy charges or periodic rate adjustment--application for approval, procedure--rulemaking authority--effective date--task force to be appointed.

386.266. 1. Subject to the requirements of this section, any electrical

corporation may make an application to the commission to approve rate

schedules authorizing an interim energy charge, or periodic rate adjustments

outside of general rate proceedings to reflect increases and decreases in its

prudently incurred fuel and purchased-power costs, including transportation.

The commission may, in accordance with existing law, include in such rate

schedules features designed to provide the electrical corporation with

incentives to improve the efficiency and cost-effectiveness of its fuel and

purchased-power procurement activities.



2. Subject to the requirements of this section, any electrical, gas, or

water corporation may make an application to the commission to approve rate

schedules authorizing periodic rate adjustments outside of general rate

proceedings to reflect increases and decreases in its prudently incurred

costs, whether capital or expense, to comply with any federal, state, or

local environmental law, regulation, or rule. Any rate adjustment made under

such rate schedules shall not exceed an annual amount equal to two and

one-half percent of the electrical, gas, or water corporation's Missouri gross

jurisdictional revenues, excluding gross receipts tax, sales tax and other

similar pass-through taxes not included in tariffed rates, for regulated

services as established in the utility's most recent general rate case or

complaint proceeding. In addition to the rate adjustment, the electrical,

gas, or water corporation shall be permitted to collect any applicable gross

receipts tax, sales tax, or other similar pass-through taxes, and such taxes

shall not be counted against the two and one-half percent rate adjustment cap.

Any costs not recovered as a result of the annual two and one-half percent

limitation on rate adjustments may be deferred, at a carrying cost each month

equal to the utilities net of tax cost of capital, for recovery in a

subsequent year or in the corporation's next general rate case or complaint

proceeding.



3. Subject to the requirements of this section, any gas corporation may

make an application to the commission to approve rate schedules authorizing

periodic rate adjustments outside of general rate proceedings to reflect the

nongas revenue effects of increases or decreases in residential and commercial

customer usage due to variations in either weather, conservation, or both.



4. The commission shall have the power to approve, modify, or reject

adjustment mechanisms submitted under subsections 1 to 3 of this section only

after providing the opportunity for a full hearing in a general rate

proceeding, including a general rate proceeding initiated by complaint. The

commission may approve such rate schedules after considering all relevant

factors which may affect the costs or overall rates and charges of the

corporation, provided that it finds that the adjustment mechanism set forth

in the schedules:



(1) Is reasonably designed to provide the utility with a sufficient

opportunity to earn a fair return on equity;



(2) Includes provisions for an annual true-up which shall accurately and

appropriately remedy any over- or under-collections, including interest at

the utility's short-term borrowing rate, through subsequent rate adjustments

or refunds;



(3) In the case of an adjustment mechanism submitted under subsections 1

and 2 of this section, includes provisions requiring that the utility file a

general rate case with the effective date of new rates to be no later than

four years after the effective date of the commission order implementing the

adjustment mechanism. However, with respect to each mechanism, the four-year

period shall not include any periods in which the utility is prohibited from

collecting any charges under the adjustment mechanism, or any period for which

charges collected under the adjustment mechanism must be fully refunded. In

the event a court determines that the adjustment mechanism is unlawful and

all moneys collected thereunder are fully refunded, the utility shall be

relieved of any obligation under that adjustment mechanism to file a rate case;



(4) In the case of an adjustment mechanism submitted under subsection 1

or 2 of this section, includes provisions for prudence reviews of the costs

subject to the adjustment mechanism no less frequently than at eighteen-month

intervals, and shall require refund of any imprudently incurred costs plus

interest at the utility's short-term borrowing rate.



5. Once such an adjustment mechanism is approved by the commission under

this section, it shall remain in effect until such time as the commission

authorizes the modification, extension, or discontinuance of the mechanism in

a general rate case or complaint proceeding.



6. Any amounts charged under any adjustment mechanism approved by the

commission under this section shall be separately disclosed on each customer

bill.



7. The commission may take into account any change in business risk to

the corporation resulting from implementation of the adjustment mechanism in

setting the corporation's allowed return in any rate proceeding, in addition

to any other changes in business risk experienced by the corporation.



8. In the event the commission lawfully approves an incentive- or

performance-based plan, such plan shall be binding on the commission for the

entire term of the plan. This subsection shall not be construed to authorize

or prohibit any incentive- or performance-based plan.



9. Prior to August 28, 2005, the commission shall have the authority to

promulgate rules under the provisions of chapter 536 as it deems necessary,

to govern the structure, content and operation of such rate adjustments, and

the procedure for the submission, frequency, examination, hearing and

approval of such rate adjustments. Such rules shall be promulgated no later

than one hundred fifty days after the initiation of such rulemaking

proceeding. Any electrical, gas, or water corporation may apply for any

adjustment mechanism under this section whether or not the commission has

promulgated any such rules.



10. Nothing contained in this section shall be construed as affecting

any existing adjustment mechanism, rate schedule, tariff, incentive plan, or

other ratemaking mechanism currently approved and in effect.



11. Each of the provisions of this section is severable. In the event

any provision or subsection of this section is deemed unlawful, all remaining

provisions shall remain in effect.



12. The provisions of this section shall take effect on January 1, 2006,

and the commission shall have previously promulgated rules to implement the

application process for any rate adjustment mechanism under this section

prior to the commission issuing an order for any rate adjustment.



13. The public service commission shall appoint a task force, consisting

of all interested parties, to study and make recommendations on the cost

recovery and implementation of conservation and weatherization programs for

electrical and gas corporations.



(L. 2005 S.B. 179)







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