HCS SB 897 -- UTILITIES

SPONSOR:  Lager (Emery)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Utilities
by a vote of 10 to 2.

This substitute changes the laws regarding utilities.  In its
main provisions, the substitute:

(1)  Allows a majority of the remaining members in office of the
board of trustees of a common sewer district to fill a vacancy on
the board if the county governing body fails to fill the vacancy
within 60 days of receiving written notice of the vacancy.
Trustees for a common sewer district may also appoint members to
a sewer subdistrict's advisory board if the positions are not
filled by a county or political subdivision within 60 days of
receiving a written request;

(2)  Increases, from eight to 10, the number of members on the
sewer district boards of trustees in the counties of Cass and
Jackson.  Each board will consist of the county executive, mayors
of the five largest-user cities, mayors of three other cities who
are members of the sewer district advisory board, and one member
of the county legislature.  In the event the district extends its
boundaries into a bordering county, the presiding commissioner or
chief executive officer of the bordering county will become the
eleventh member of the board;

(3)  Specifies the procedures for providing sewer service in
third classification counties when a city and a sewer district
cannot reach an agreement related to providing these services.
Currently, the City of Poplar Bluff and sewer districts in Butler
County are allowed to develop agreements to provide sewer
services;

(4)  Allows a board member to serve in multiple positions on a
common sewer subdistrict advisory board if the board consists of
less than three members;

(5)  Requires private and public water supply districts to
provide water service data to sewer districts.  Currently, water
districts are required to provide this data to cities, towns, and
villages in order to calculate rates for service;

(6)  Allows the Missouri Public Service Commission to appear in
any proceeding at the Federal Energy Regulatory Commission,
Nuclear Regulatory Commission, Federal Communications Commission,
or any other federal agency with jurisdiction over a
Missouri-regulated utility.  The Missouri Public Service
Commission may also file or participate in appeals from the
federal administrative agencies in all proceedings pending at the
time of, or commenced after, the substitute's effective date;

(7)  Creates an assessment-based funding mechanism is created for
the Office of the Public Counsel.  Prior to the beginning of each
fiscal year, the counsel must make available to the commission an
estimate of the expenses to be incurred during the year which are
reasonably attributable to the regulation of public utilities
under Sections 386.700 and 386.710, RSMo, a separate estimate of
expenses directly attributable to the various public utility
groups, and the amount of expenses not directly attributable to
these groups.  The calculation of the assessments is specified in
the substitute with the amount allocated to telephone
corporations limited to no more than 10% of the total estimated
expenses and the total amount of the counsel's assessment limited
at two hundredths of 1% of the total gross intrastate operating
revenues of all utilities regulated by the commission.  In order
for the counsel to make the allocations and assessments, every
commission-regulated public utility must file with the commission
a statement under oath of its gross intrastate operating revenues
on or before March 31 of each year for the preceding calendar
year.  If a utility fails to timely file a statement, the
commission will estimate the revenues.  A statement of the
assessments must be rendered by the commission on behalf of the
counsel to each public utility on or before July 1 with the
amount assessed paid by July 15 or, if the utility elects, in
four equal installments throughout the fiscal year.  The moneys
from the assessments will be deposited into the newly created
Public Counsel Fund solely for the payment of expenditures
actually incurred by the counsel.  Moneys remaining in the fund
will not revert to the General Revenue Fund;

(8)  Reduces from 120 days to 90 days the time period that the
commission can suspend a rate change filed with the commission by
a gas, electrical, water, or sewer corporation in order to hold a
hearing.  The commission may extend the suspension for no more
than two months if a hearing cannot be conducted within the
period of the suspension.  Currently, the suspension can be
extended for a period not to exceed six months.  The commission
is required to issue its decision at least 20 days prior to the
end of the suspension period, and the order will be effective 10
days after its issuance.  The corporation must file new rate
schedules at least five business days prior to the end of the
suspension period, and the new schedules must take effect no
later than the first day following the end of the suspension
period unless rejected by the commission or a rehearing is
pending.  If the schedules are rejected by the commission, the
corporation is permitted to file replacement schedules in order
to comply with the commission's order and must also take effect
automatically on the proposed effective date.  If the commission
further suspends a rate schedule, it must determine the new rate
using certain information updated as of 60 days prior to the end
of the suspension period;

(9)  Requires a small utility whenever it decides to sell or
otherwise dispose of its water or sewer system to a large public
utility to authorize an appraisal of the system and set a date
that the appraisal is due by ordinance, resolution, or board
action;

(10)  Requires the appraisal to be performed by three
disinterested individuals who are certified general appraisers
under Chapter 339, RSMo.  One will be appointed by the small
utility, one by the large public utility, and one by the two
appraisers appointed by the utilities;

(11)  Requires the appraisers to jointly prepare an appraisal of
the fair market value of the system and return the appraisal, in
writing, to the small and large public utilities by the required
due date.  If all three appraisers cannot agree on the appraised
value, an appraisal signed by two of them will constitute a valid
appraisal;

(12)  Allows either utility, after receiving the appraisal, to
decline to proceed with the sale or disposition.  If the small
utility is a municipality required to submit the proposed sale to
a public vote, the vote must be conducted as required by law;

(13)  Specifies that the purchase price or the appraised value of
the system, whichever is less, and the transaction, closing, and
transition costs incurred by the large public utility will be the
ratemaking rate base for the small utility as incorporated into
the ratemaking rate base of the district designated by the large
public utility.  If the small utility is governed by the
commission, the commission may establish a rate base in its order
authorizing the acquisition of the small utility.  The criteria
for selecting a rate base are specified in the substitute;

(14)  Revises the definition for "eligible infrastructure system
replacements" to include energy efficiency projects that are in
service, used, and useful; do not increase revenues by connecting
the infrastructure replacements to new customers; and were not
included in the water corporation's rate base in its most recent
general rate case and defines "energy efficiency" as measures
that reduce the amount of energy required to achieve a given end
result.  The definition of "water corporation" is also revised to
include a corporation serving a population of any size.
Currently, it is a business or person serving more than 10,000
customers.  Rate schedule modifications related to infrastructure
replacement surcharges will be allowed for water corporations
with $10,000 or more in annual surcharge revenue.  Currently, the
required amount is $1 million;

(15)  Adds service lines and meters that have worn out, are in a
deteriorated condition, or replaced as part of an order issued by
the commission, as well as energy efficiency projects, to the
list of projects that are allowable water utility plant projects;

(16)  Allows, beginning August 28, 2011, all water corporations
to file a petition and proposed rate schedules with the
commission to establish or change its infrastructure system
replacement surcharge rate schedules that will allow for the
adjustment of the corporation's rates and charges to provide for
the recovery of costs for eligible infrastructure system
replacements.  Currently, only water corporations in St. Louis
County are allowed to file a petition and proposed rate
schedules;

(17)  Extends the public notice requirements of the Clean Water
Commission when listing any impaired waters of the state under
Section 303(d) of the federal Clean Water Act from August 28,
2010, to August 28, 2012.  The commission's authority to charge
fees for construction permits, operating permits, and operator's
certifications related to water pollution control is extended
from December 31, 2010, to December 31, 2012;

(18)  Repeals the provisions regarding a joint committee to
review proposals for the restructuring of fees, storm water
programs, and the state's implementation of the federal Clean
Water Program; and

(19)  Specifies that any attempt to pay, or an actual payment of,
a utility bill will not adversely affect the assistance that an
otherwise eligible household would receive through the Utilicare
Program and removes the requirement that a household must have
its service disconnected for failure to pay its bill before being
eligible for assistance.  Electric or gas companies must allow
customers who incur an arrearage during the cold weather rule
period to retain service by paying one-third of the arrearage,
plus the current bill, in each of the three months following the
cold weather rule period.

The substitute contains an emergency clause for the provisions
regarding the commission's participation at hearings before
certain specified federal agencies.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of Up to
$10,654,995 in FY 2011, Up to $13,031,128 in FY 2012, and Up to
$13,031,128 in FY 2013.  Estimated Effect on Other State Funds of
an income of $0 to a cost of Unknown in FY 2011, FY 2012, and FY
2013.

PROPONENTS:  Supporters say that the bill clarifies the existing
practice of the Missouri Public Service Commission participating
in federal administrative and court cases.  Missouri requires
representation before the Federal Energy Regulatory Commission
and in federal courts.

Testifying for the bill were Senator Lager; Missouri Public
Service Commission; Missouri Association of Municipal Utilities;
and Missouri Energy Development Association.

OPPONENTS:  Those who oppose the bill say that the Federal Energy
Regulatory Commission serves the same role as the Missouri Public
Service Commission and that it should not intervene as an
advocate against Missouri corporations in federal cases that are
based on federal law.  Only a few states allow their commissions
to litigate in federal court.  The Office of Public Counsel of
the Attorney General can represent Missouri's interests at the
federal level.

Testifying against the bill was MoGas Pipeline LLC.

Missouri House of Representatives
95th General Assembly, 2nd Regular Session
Last Updated September 14, 2010 at 3:15 pm