State of South Dakota  
EIGHTY-SEVENTH SESSION
LEGISLATIVE ASSEMBLY, 2012  

850T0635   HOUSE BILL   NO.  1121  

Introduced by:    Representatives Solum, Brunner, Fargen, Gosch, Hawley, Kirkeby, Lust, Rausch, Street, Verchio, White, and Willadsen and Senators Rave, Adelstein, Frerichs, Hansen (Tom), Johnston, Krebs, Lederman, Nelson (Tom), Olson (Russell), and Tieszen
 

        FOR AN ACT ENTITLED, An Act to amend rate stability provisions to include plant additions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
    Section 1. For purposes of §§ 49-34A-73 to 49-34A-78, inclusive, plant additions are investments in fixed generation, transmission, and distribution assets, whether purchased or constructed, including operations and maintenance expenses directly related to those fixed assets, real property, and new power purchases.
    Section 2. That § 49-34A-73 be amended to read as follows:
    49-34A-73. Notwithstanding anything in this chapter to the contrary, an electric utility that is subject to rate regulation by the commission and plans major capital plant additions or new power purchases that are expected to have a material impact on rates may make application to the commission for a phase in rate stability plan to provide for the phase-in phase in of rate increases prior to the commercial operations of the major capital plant additions or new power purchases. The plan may provide for any of the following:
            (1)    Rate increases to be incrementally phased in prior to the commencement of

commercial operation of the plant additions or new power purchases;

            (2)    To the extent rate increases for plant additions are allowed prior to commercial operation, restrictions on the capitalization of allowance for funds used during construction for the plant additions;
            (3)    Restrictions on other rate increases during the construction period of the plant additions or term of the new power purchases; and
            (4)    Any other conditions which benefit the public interest and may be imposed by the commission consistent with the findings in § 49-34A-74.
    Section 3. That § 49-34A-74 be amended to read as follows:
    49-34A-74. The commission may approve a rate stability phase in rate plan as provided in § 49-34A-73 if:
            (1)    The electric utility makes application for a phase in rate stability plan prior to the commencement of construction or acquisition of the plant additions or new power purchases;
            (2)    The electric utility files with the application a full cost of service analysis as required for general rate increases and including a projection of costs and revenues revenue requirements to the date of the anticipated commercial operation of the plant additions or through the term of the new power purchases;
            (3)    The commission holds affords an opportunity for a hearing with notice to be given as required for any rate increase; and
            (4)    The commission finds that the phase in rate stability plan is likely to enhance adequate utility service, rate stability, the financial stability of the electric utility, reasonable capital costs, just and reasonable rates, a fair rate of return, and other considerations that benefit the public interest.
    Section 4. That § 49-34A-75 be amended to read as follows:
    49-34A-75. At any time prior to one year after the conclusion of a phase in rate plan, the commission, upon its own motion or upon petition of the electric utility, may examine the reasonableness of the utility's rates under the plan, and adjust rates as necessary. Any rate stability phase in rate plan is subject to annual review. The electric utility shall file annually an abbreviated cost of service analysis showing that year's revenues, costs and revenue requirements, and a report of the progress of the construction or acquisition of the capital plant additions showing accumulative construction or acquisition costs for the year and updated cost projections to complete the capital plant additions.
    Section 5. That § 49-34A-76 be amended to read as follows:
    49-34A-76. Within twelve months prior to after the commercial operation of the capital additions end of the phase in rate plan, the electric utility shall file a general rate case with a full cost of service analysis including the major capital plant additions, unless, upon motion, the commission determines that a general rate case would not be likely to result in material changes to the rates in place under the phase in rate plan, in which event the rates under the phase in rate plan will remain in effect until changed by further order of the commission. After notice and hearing the commission shall adjust the rates under the criteria set forth in § 49-34A-8 to be charged by the electric utility commencing with the commercial operation of the major capital addition.
    Section 6. That § 49-34A-77 be amended to read as follows:
    49-34A-77. Upon filing an application for a phase in rate stability plan, the electric utility shall pay a filing fee to be determined by the commission in an amount not to exceed one two hundred fifty thousand dollars. The filing fee may also be used for any annual reviews pursuant to § 49-34A-75.
    Section 7. That § 49-34A-78 be amended to read as follows:
    49-34A-78. If the commission does not approve a an application for a phase in rate stability plan as defined in § 49-34A-73, the electric utility may not be prohibited from making, acquiring, or constructing plant additions and purchasing power and requesting and obtaining rate adjustments as authorized by this chapter.