Proposal would require utility audits and clearer customer rate tables

The Commission must arrange management audits of regulated electric distribution companies. The audits examine how well the company is managed and how efficiently it operates. Summaries must be public, and complete copies must go to Commission staff and the Public Advocate. The Commission may find a specific audit unnecessary. If the Commission hires an outside firm, the utility must pay its reasonable costs, but cannot recover audit costs through customer rates. Audits must happen at least once every five years unless the Commission finds a specific audit unnecessary.

Utilities must prepare rate tables, file them with the Commission, and share them with customers; utilities, Commission staff, and the Public Advocate should use plain language in public communications and Commission submissions. Each table covers a customer class and shows the total rate, its parts, and when predictable rate changes are expected. Utilities must post tables online, include them in customer bills, and file them with the Commission. The Commission may reject a table or require changes if it is incomplete, inaccurate, or inconsistent with approved rates. Technical terms should be avoided where possible and, when needed, kept to a minimum and explained simply. Utilities must update tables at least 30 days before a rate component changes. Starting September 1, 2027, regulated electric utilities must bill standard offer customers’ transmission charges using the same monthly measures as distribution rates.

The bill sets rules for rate-change requests, accounting reviews, interim rates, and Commission decisions on settlements. For base-rate requests, the notice must state the test period and test year. Accounting reviews may examine the utility’s books, including transactions with affiliated companies. Commission orders accepting or denying settlements must explain the main parts of the settlement and the facts supporting the decision. A utility may be subject to an accounting review as part of a base-rate request, but not for a test year already covered by a previous review. A utility may collect interim rates only under the stated bond or other Commission-approved protection, with refunds if the final rates are excessive. The increase under bond cannot exceed 15% of the utility’s gross intrastate operating revenues. The 90-day option is limited to increases of no more than 15% of annual gross intrastate operating revenues or $2.5 million a year, whichever is less; it does not apply to limited-issue rate proceedings. The Commission may allow a temporary portion of a proposed rate change to take effect within 90 days while it considers the request. If no decision is reached within seven months, 50% of the proposed increase may take effect under bond, rising to 75% after 12 months.

A regulated electric distribution company may not recover annual non-mandatory capital spending above 5% of its approved rate base through customer rates. The cap applies to annual non-mandatory capital spending by Commission-regulated electric distribution companies. Utilities with more than 25,000 customers also may not recover certain rate-case legal and outside expert costs above the combined amount spent by Commission staff and the Public Advocate. The cap excludes spending on vegetation management, inspections and maintenance, new business and customers, facility relocations, legal or regulatory requirements, and emergency failures.

The Commission must use the average-year rate-base method for electric and natural gas distribution companies. This method applies to electric and natural gas distribution companies.