Utilities would generally return qualifying refunds to ratepayers

The Public Service Commission would generally require utilities to pass qualifying refund amounts to ratepayers. This covers utilities under commission regulation and the part of a refund tied to costs, taxes, fees, or other amounts previously recovered from ratepayers. The commission may subtract only costs it finds reasonable, documented, prudently incurred, and directly necessary to obtain the refund. Distribution should go to the customers who paid the related costs when practical; otherwise, the commission would use a fair method for the affected customer group. The provisions would take effect immediately if enacted.

A utility could use the customer-related portion of a refund for another purpose only after meeting strict requirements and receiving commission approval. The limits apply to the portion of a refund tied to amounts previously recovered from ratepayers. The utility must show, and the commission must find, that direct payment is impractical and the alternative gives customers an equal or greater benefit. An alternative use may also be approved to prevent an immediate, serious threat to safe and adequate service, but only for the amount needed for that purpose. The customer-related portion may not be kept as earnings or profit or used for shareholders' direct or indirect benefit. These limits would apply whenever the commission decides how to handle a covered refund after enactment.

The commission could let a municipality or county repay a covered refund in installments over no more than two years. This applies when immediate repayment would cause undue fiscal hardship, an unplanned expense, or serious harm to the government's finances or essential services. The commission must consider customers' interests, the government's finances, and timely repayment. The Department of Taxation and Finance would still pay the refund to the utility immediately when due, while the municipality or county reimburses that department under the approved schedule. An approved installment schedule could last up to two years and would state the amount and timing of each payment.