House File 2510 - Introduced HOUSE FILE 2510 BY COMMITTEE ON COMMERCE (SUCCESSOR TO HSB 591) A BILL FOR An Act relating to rate regulatory proceedings before the 1 utilities board within the utilities division of the 2 department of commerce. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5533HV (2) 88 ja/rn

H.F. 2510 Section 1. Section 476.6, subsection 7, Code 2020, is 1 amended to read as follows: 2 7. Limitation on filings. 3 a. A public utility that utilizes a historic test year in a 4 rate regulatory proceeding pursuant to section 476.33 shall not 5 make a subsequent filing of an application for a new or changed 6 rate, charge, schedule, or regulation which relates to services 7 for which a rate filing is pending within twelve months 8 following the date the prior application was filed or until 9 the board has issued a final order on the prior application, 10 whichever date is earlier, unless the public utility applies 11 to the board for authority and receives authority to make a 12 subsequent filing at an earlier date. 13 b. A public utility that utilizes a future test year in a 14 rate regulatory proceeding pursuant to section 476.33 shall 15 not file an application for a new or changed rate, charge, 16 schedule, or regulation until after the date the board has 17 issued a final order related to the subsequent proceeding 18 unless the public utility applies to the board for authority 19 and receives authority to make a subsequent filing. 20 Sec. 2. Section 476.33, subsection 4, paragraph b, Code 21 2020, is amended to read as follows: 22 b. For a rate regulatory proceeding utilizing a future test 23 year, the rules shall require the board to consider the use 24 of any twelve-month period beginning no later than the date 25 on which a proposed rate change is expected to take effect 26 in determining just and reasonable rates. The rules shall 27 also require the board to conduct a proceeding subsequent to 28 the effective date of a rate resulting from a rate regulatory 29 proceeding utilizing a future test year to determine whether 30 the actual costs and revenues are reasonably consistent with 31 those approved by the board. If the actual costs and revenues 32 are not reasonably consistent with those approved by the 33 board, the board shall adjust the rates accordingly. For a 34 rate regulatory proceeding utilizing a future test year, the 35 -1- LSB 5533HV (2) 88 ja/rn 1/ 4

H.F. 2510 board may adopt rules regarding evidence required, information 1 to support forecasts, and any reporting obligations. The 2 board may also adopt rules regarding the conditions under 3 which a public utility that utilizes a future test year may 4 subsequently utilize a historic test year. A public utility 5 shall not be precluded from filing a rate regulatory proceeding 6 utilizing a future test year prior to the adoption of any rules 7 pursuant to this subsection . A public utility that utilizes 8 a future test year in a rate regulatory proceeding shall not 9 propose the use of multiple future test years in the same rate 10 regulatory proceeding. 11 Sec. 3. Section 476.33, subsection 4, Code 2020, is amended 12 by adding the following new paragraph: 13 NEW PARAGRAPH . 0c. For the proceeding subsequent to the 14 effective date of a rate resulting from a rate regulatory 15 proceeding utilizing a future test year, the rules shall 16 establish parameters for determining refunds, reduced rates, 17 and increased rates. A refund shall be based upon overpayments 18 made by each customer class, rate zone, or customer group, with 19 interest as determined by the board pursuant to section 476.6, 20 subsection 9, paragraph “c” . The subsequent proceeding shall be 21 based upon twelve months of actual data beginning from the date 22 that the rates based upon a future test year became effective, 23 and the board shall conduct a hearing within ninety days after 24 the public utility files the twelve-month data with the board. 25 The board shall adopt rules that establish filing requirements 26 for the subsequent proceeding, procedural rules, and standards 27 of reasonableness for the determination of whether the actual 28 costs and revenues are reasonably consistent with those 29 approved by the board. 30 EXPLANATION 31 The inclusion of this explanation does not constitute agreement with 32 the explanation’s substance by the members of the general assembly. 33 This bill relates to rate regulatory proceedings before the 34 utilities board within the utilities division of the department 35 -2- LSB 5533HV (2) 88 ja/rn 2/ 4

H.F. 2510 of commerce. 1 Current law provides that a public utility shall not, 2 without the approval of the board, make a subsequent filing of 3 an application for a new or changed rate, charge, schedule, or 4 regulation that relates to services for which a rate filing 5 is pending within 12 months following the date the prior 6 application was filed or the board has issued a final order 7 on the prior application, whichever date is earlier. The 8 bill applies this prohibition only to a public utility that 9 utilizes a historic test year in a rate regulatory proceeding 10 pursuant to Code section 476.33. Additionally, the bill 11 prohibits a public utility that utilizes a future test year in 12 a rate regulatory proceeding pursuant to Code section 476.33 13 from filing an application for a new or changed rate, charge, 14 schedule, or regulation until after the date the board has 15 issued a final order related to the subsequent proceeding 16 unless the public utility applies to the board for authority 17 and receives authority to make a subsequent filing. 18 The bill provides that a public utility that utilizes a 19 future test year in a rate regulatory proceeding pursuant to 20 Code section 476.33 shall not propose the use of multiple 21 future test years in the same rate regulatory proceeding. 22 The bill requires the board to adopt rules governing 23 proceedings subsequent to the effective date of a rate 24 resulting from a rate regulatory proceeding utilizing a future 25 test year. The bill provides such rules shall establish 26 parameters for determining refunds, reduced rates, and 27 increased rates. The bill provides the subsequent proceeding 28 shall be based upon 12 months of data beginning from the date 29 that the rates based upon a future test year became effective, 30 and the bill requires the board to conduct a hearing within 90 31 days after the public utility files the data with the board. 32 The bill also requires the board to adopt rules establishing 33 filing requirements for the subsequent proceeding, procedural 34 rules, and standards of reasonableness for the determination of 35 -3- LSB 5533HV (2) 88 ja/rn 3/ 4

H.F. 2510 whether the actual costs and revenues are reasonably consistent 1 with those approved by the board. 2 -4- LSB 5533HV (2) 88 ja/rn 4/ 4