393.135. Charges based on nonoperational property of electrical corporation prohibited — exceptions, expiration.

513 words·~2 min read·/mo/chapter-393/393-135

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393.135. Charges based on nonoperational property of electrical corporation prohibited — exceptions, expiration. — 1. Except as provided in subsection 2 of this section, any charge made or demanded by an electrical corporation for service, or in connection therewith, which is based on the costs of construction in progress upon any existing or new facility of the electrical corporation, or any other cost associated with owning, operating, maintaining, or financing any property before it is fully operational and used for service, is unjust and unreasonable, and is prohibited.

(1)An electrical corporation may be permitted, subject to the limitations in this subsection, to include construction work in progress for any new natural gas-generating unit in rate base. The inclusion of construction work in progress allowed under this subsection shall be in lieu of any otherwise applicable allowance for funds used during construction that would have accrued from and after the effective date of new base rates that reflect inclusion of the construction work in progress in rate base. The commission shall determine, in a proceeding under section 393.170 , the amount of construction work in progress that may be included in rate base. The amount shall be limited by:

(a)The estimated cost of such project; and

(b)Project expenditures made within the estimated construction period for such project.

Base rate recoveries arising from inclusion of construction work in progress in rate base are subject to refund, with interest on the refunded amount at the same rate as the rate of interest for delinquent taxes determined by the director of revenue in accordance with section 32.065 , if, and to the extent the commission determines, in a subsequent complaint or general rate proceeding, that construction costs giving rise to the construction work in progress included in rate base were imprudently incurred or if the project for which construction costs have been included in the rate base is not placed in service within a reasonable amount of time, as determined by the commission.

Rate base used to determine return deferred under subdivision

(2)of subsection 3 of section 393.1400 shall include an offset for rate base that has been used to determine return included in base rates as a result of construction work in progress inclusion in rate base under this subsection. The offset shall apply from and after the in-service date of the asset that has been used to determine return included in base rates as a result of construction work in progress inclusion in rate base under this subsection.

(2)This subsection shall expire on December 31, 2035, unless the commission determines, after a hearing conducted in 2035, upon a submission from an electrical corporation of an application requesting and demonstrating that good cause exists to extend the effectiveness of this subsection through December 31, 2045. The secretary of the commission shall notify the revisor of statutes when the conditions set forth for the extension of this subsection have been met.

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(Adopted by Initiative, Proposition No. 1, November 2, 1976, A.L. 2025 S.B. 4)

*Contingent expiration date.