2006 Legislation
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HOUSE BILL NO. 694 – Utility rates, construction work

HOUSE BILL NO. 694

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Bill Status



H0694......................................................by STATE AFFAIRS
UTILITY RATES - CONSTRUCTION WORK - Amends existing law relating to utility
rates to provide that, except upon its finding that the public interest
will be served thereby, the Public Utilities Commission is prohibited in
any order from setting rates for a utility that grants a return on
construction work in progress or on property held for future use and which
is not currently used and useful in providing utility service; to delete
reference to short-term construction work in progress; and to provide that
if the commission sets rates for any utility including a return on property
held for future use and subsequently determines that such property is not
needed to provide utility service, then the commission shall determine
whether any gain or loss occurring from the sale or other disposition of
the property may be included in the utility's rates.
                                                                        
02/16    House intro - 1st rdg - to printing
02/17    Rpt prt - to St Aff
02/23    Rpt out - rec d/p - to 2nd rdg
02/24    2nd rdg - to 3rd rdg
03/02    3rd rdg - PASSED - 66-0-4
      AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
      Bedke, Bell, Bilbao, Black, Boe, Bolz, Brackett, Bradford, Cannon,
      Chadderdon, Clark, Collins, Deal, Denney, Edmunson, Ellsworth,
      Eskridge, Field(23), Garrett, Hart, Harwood, Henbest, Henderson,
      Jaquet, Kemp, Lake, LeFavour, Loertscher, Martinez, Mathews,
      McGeachin, McKague, Miller, Mitchell, Moyle, Nielsen, Nonini,
      Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche,
      Rydalch, Sali, Sayler, Schaefer, Shepherd(2), Shepherd(8), Shirley,
      Skippen, Smith(30), Smylie, Snodgrass, Stevenson, Trail, Wills, Wood,
      Mr. Speaker
      NAYS -- None
      Absent and excused -- Block, Crow, Field(18), Smith(24)
    Floor Sponsor - Black
    Title apvd - to Senate
03/03    Senate intro - 1st rdg - to St Aff
03/13    Rpt out - rec d/p - to 2nd rdg
03/14    2nd rdg - to 3rd rdg
03/16    3rd rdg - PASSED - 35-0-0
      AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
      Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis,
      Fulcher, Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough,
      Langhorst, Little, Lodge, Malepeai, Marley, McGee, McKenzie, Pearce,
      Richardson, Schroeder, Stegner, Stennett, Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- None
    Floor Sponsor - McKenzie
    Title apvd - to House
03/17    To enrol
03/20    Rpt enrol - Sp signed
03/21    Pres signed - To Governor
03/22    Governor signed
         Session Law Chapter 107
         Effective: 07/01/06

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 694
                                                                        
                                 BY STATE AFFAIRS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO PUBLIC UTILITY PROPERTY NOT PROVIDING  UTILITY  SERVICE;  AMENDING
  3        SECTION 61-502A, IDAHO CODE, TO PROVIDE THAT, EXCEPT UPON ITS FINDING THAT
  4        THE  PUBLIC  INTEREST WILL BE SERVED THEREBY, THE PUBLIC UTILITIES COMMIS-
  5        SION IS PROHIBITED IN ANY ORDER FROM SETTING RATES FOR  ANY  UTILITY  THAT
  6        GRANTS  A  RETURN ON CONSTRUCTION WORK IN PROGRESS OR ON PROPERTY HELD FOR
  7        FUTURE USE AND WHICH IS NOT CURRENTLY USED AND USEFUL IN PROVIDING UTILITY
  8        SERVICE, TO DELETE REFERENCE TO SHORT-TERM CONSTRUCTION WORK  IN  PROGRESS
  9        AND  TO  PROVIDE  IF THE COMMISSION SETS RATES FOR ANY UTILITY INCLUDING A
 10        RETURN ON PROPERTY HELD FOR FUTURE USE AND  SUBSEQUENTLY  DETERMINES  THAT
 11        SUCH  PROPERTY  IS NOT NEEDED TO PROVIDE UTILITY SERVICE, THEN THE COMMIS-
 12        SION SHALL DETERMINE WHETHER ANY GAIN OR LOSS OCCURRING FROM THE  SALE  OR
 13        OTHER DISPOSITION OF THE PROPERTY MAY BE INCLUDED IN THE UTILITY'S RATES.
                                                                        
 14    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 15        SECTION  1.  That  Section 61-502A, Idaho Code, be, and the same is hereby
 16    amended to read as follows:
                                                                        
 17        61-502A.  RESTRICTION ON RATES AUTHORIZING RETURN ON PROPERTY NOT  PROVID-
 18    ING  UTILITY SERVICE. Except upon its explicit finding of an extreme emergency
 19    that the public interest will be served thereby, the commission is hereby pro-
 20    hibited in any order issued after the effective date of this act, from setting
 21    rates for any utility that grants a return on construction  work  in  progress
 22    (except short-term construction work in progress) or  property held for future
 23    use  and  which is not currently used and useful in providing utility service.
 24    As used in this section, short-term construction work in progress  means  con-
 25    struction  work  that  has begun and will be completed in not more than twelve
 26    (12) months. Except as authorized by this section, any rates granting a return
 27    on construction work in progress (except short-term construction work in prog-
 28    ress) or property held for future use are hereby declared to be unjust, unrea-
 29    sonable, unfair, unlawful and illegal. When construction work in  progress  is
 30    excluded  from  the rate base, the commission must allow a just, fair and rea-
 31    sonable allowance for funds used during construction or similar account to  be
 32    accumulated, computed in accordance with generally accepted accounting princi-
 33    ples. If the commission sets rates for any utility including a return on prop-
 34    erty held for future use and subsequently determines that such property is not
 35    needed to provide utility service, then the commission shall determine whether
 36    any  gain or loss occurring from the sale or other disposition of the property
 37    may be included in the utility's rates.

Statement of Purpose / Fiscal Impact


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                       STATEMENT OF PURPOSE

                            RS 16040C1

The purpose of this legislation is to provide the Public
Utilities Commission with the authority to approve and set just,
reasonable and fair rates for energy and other utility facilities
under construction and for property that is acquired by a utility
and held for future use, such as a substation location.  The
Public Utilities Commission, upon its explicit finding that the
public interest will be served, may grant a utility a return on
construction work in progress or property held for future use
which is not currently used in providing utility service.  This
legislation will help ensure the development of energy and other
utility facilities meet the growing needs of Idaho citizens at a
reasonable cost.  Additionally, property needed for future
utility infrastructure can be acquired early in the planning
process, which will reduce costs for utility customers.

                                 
                          FISCAL NOTE

There is no impact on the general fund.  The Idaho Public
Utilities Commission is a self-sufficient regulatory agency which
derives its funding from the annual fees assessed against the 
public utilities it regulates.



Contact
Name: Representative Max Black
Phone: (208) 332-1000
Name: Rich Hahn, Idaho Power Company 
Phone: (208) 388-2513


STATEMENT OF PURPOSE/FISCAL NOTE                         H 694