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H. B. No. 319 As IntroducedAs Introduced
130th General Assembly | Regular Session | 2013-2014 |
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A BILL
To amend section 4909.05 and to enact sections
4929.16, 4929.161, 4929.162, 4929.163, 4929.164,
4929.165, 4929.166, 4929.167, and 4929.168 of the
Revised Code to permit natural gas companies to
apply for an infrastructure development rider to
cover costs of certain economic development
projects.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 4909.05 be amended and sections
4929.16, 4929.161, 4929.162, 4929.163, 4929.164, 4929.165,
4929.166, 4929.167, and 4929.168 of the Revised Code be enacted
to read as follows:
Sec. 4909.05. As used in this section:
(A) A "lease purchase agreement" is an agreement pursuant to
which a public utility leasing property is required to make rental
payments for the term of the agreement and either the utility is
granted the right to purchase the property upon the completion of
the term of the agreement and upon the payment of an additional
fixed sum of money or title to the property vests in the utility
upon the making of the final rental payment.
(B) A "leaseback" is the sale or transfer of property by a
public utility to another person contemporaneously followed by the
leasing of the property to the public utility on a long-term
basis.
(C) The public utilities commission shall prescribe the form
and details of the valuation report of the property of each public
utility or railroad in the state. Such report shall include all
the kinds and classes of property, with the value of each, owned,
held, or, with respect to a natural gas, water-works, or sewage
disposal system company, projected to be owned or held as of the
date certain, by each public utility or railroad used and useful,
or, with respect to a natural gas, water-works, or sewage disposal
system company, projected to be used and useful as of the date
certain, for the service and convenience of the public. Such
report shall contain the following facts in detail:
(1) The original cost of each parcel of land owned in fee and
in use, or, with respect to a natural gas, water-works, or sewage
disposal system company, projected to be owned in fee and in use
as of the date certain, determined by the commission; and also a
statement of the conditions of acquisition, whether by direct
purchase, by donation, by exercise of the power of eminent domain,
or otherwise;
(2) The actual acquisition cost, not including periodic
rental fees, of rights-of-way, trailways, or other land rights
held, or, with respect to a natural gas, water-works, or sewage
disposal system company, projected to be held as of the date
certain, by virtue of easements, leases, or other forms of grants
of rights as to usage;
(3) The original cost of all other kinds and classes of
property used and useful, or, with respect to a natural gas,
water-works, or sewage disposal system company, projected to be
used and useful as of the date certain, in the rendition of
service to the public. Such original costs of property, other than
land owned in fee, shall be the cost, as determined to be
reasonable by the commission, to the person that first dedicated
or dedicates the property to the public use and shall be set forth
in property accounts and subaccounts as prescribed by the
commission. To the extent that the costs of property comprising a
coal research and development facility, as defined in section
1555.01 of the Revised Code, or a coal development project, as
defined in section 1551.30 of the Revised Code, have been allowed
for recovery as Ohio coal research and development costs under
section 4905.304 of the Revised Code, none of those costs shall be
included as a cost of property under this division.
(4) The cost of property constituting all or part of a
project leased to or used by the utility, or, with respect to a
natural gas, water-works, or sewage disposal system company,
projected to be leased to or used by the utility as of the date
certain, under Chapter 165., 3706., 6121., or 6123. of the Revised
Code and not included under division (C)(3) of this section
exclusive of any interest directly or indirectly paid by the
utility with respect thereto whether or not capitalized;
(5) In the discretion of the commission, the cost to a
utility, in an amount determined to be reasonable by the
commission, of property constituting all or part of a project
leased to the utility, or, with respect to a natural gas,
water-works, or sewage disposal system company, projected to be
leased to the utility as of the date certain, under a lease
purchase agreement or a leaseback and not included under division
(C)(3) of this section exclusive of any interest directly or
indirectly paid by the utility with respect thereto whether or not
capitalized;
(6) The proper and adequate reserve for depreciation, as
determined to be reasonable by the commission;
(7) Any sums of money or property that the company may have
received, or, with respect to a natural gas, water-works, or
sewage disposal system company, is projected to receive as of the
date certain, as total or partial defrayal of the cost of its
property, except that the report shall not contain either of the
following:
(a) Any sum of money that a natural gas company may have
received or is projected to receive as of the date certain from an
infrastructure development rider or rider adjustment under section
4929.161 or 4929.162 of the Revised Code;
(b) Any sum of money that a natural gas company may have
received or is projected to receive as of the date certain from
infrastructure development, as defined in section 4929.16 of the
Revised Code, that is placed into service under section 4929.165
of the Revised Code;
(8) The valuation of the property of the company, which shall
be the sum of the amounts contained in the report pursuant to
divisions (C)(1) to (5) of this section, less the sum of the
amounts contained in the report pursuant to divisions (C)(6) and
(7) of this section.
The report shall show separately the property used and useful
to such public utility or railroad in the furnishing of the
service to the public, the property held by such public utility or
railroad for other purposes, and the property projected to be used
and useful to or held by a natural gas, water-works, or sewage
disposal system company as of the date certain, and such other
items as the commission considers proper. The commission may
require an additional report showing the extent to which the
property is used and useful, or, with respect to a natural gas,
water-works, or sewage disposal system company, projected to be
used and useful as of the date certain. Such reports shall be
filed in the office of the commission for the information of the
governor and the general assembly.
Sec. 4929.16. As used in sections 4929.16 to 4929.168 of the
Revised Code:
(A) "Economically justified" is a determination based on a
formula that is unique for each natural gas company.
(B) "Infrastructure development" means constructing
extensions of storage, transmission, or distribution facilities
that a natural gas company owns and operates.
(C) "Infrastructure development costs" means the investment
in infrastructure development to which all of the following apply:
(1) The investment is for an economic development project
described in division (A)(1) or (2) of section 4929.165 of the
Revised Code.
(2) The investment is not considered economically justified
by the natural gas company.
(3) The investment is for any deposit required by the natural
gas company, as defined in the line-extension provision of the
company's tariff, less any contribution in aid of construction
received from the owner or developer of the project.
"Infrastructure development costs" includes planning,
development, and construction costs and, if applicable, any
allowance for funds used during construction.
Sec. 4929.161. (A) A natural gas company may file an
application with the public utilities commission for approval of
an infrastructure development rider to cover prudently incurred
infrastructure development costs of economic development projects
under section 4929.165 of the Revised Code.
(B) The rider shall take effect sixty days after the date of
the application's filing unless the commission, for good cause
shown, sets the matter for hearing. After the hearing, the
commission shall approve, modify, or deny the application.
(C) The commission shall not authorize the rider if the
proceeds to be generated by the rider are projected, in any one
calendar year, to exceed one per cent of the valuation of the
natural gas company's property, as determined under division
(A)(1) of section 4909.15 of the Revised Code for the company's
most recent rate case proceeding under section 4909.18 of the
Revised Code, unless the commission determines, for good cause
shown, that the cumulative amount should be reduced or eliminated.
(D) A rider approved under this section shall be a fixed,
monthly charge as determined by the commission for all customers
of the natural gas company.
Sec. 4929.162. (A) A natural gas company may file an
application with the public utilities commission to adjust a
previously approved infrastructure development rider.
(B) The rider adjustment shall take effect sixty days after
the date of the application's filing unless the commission, for
good cause shown, sets the matter for hearing. After the hearing,
the commission shall approve, modify, or deny the application.
Sec. 4929.163. Any proceeding under sections 4929.161 and
4929.162 of the Revised Code shall be governed by Chapter 4903. of
the Revised Code.
Sec. 4929.164. A natural gas company that has an approved
infrastructure development rider shall accumulate the proceeds
generated from that rider to fund economic development projects
under section 4929.165 of the Revised Code.
Sec. 4929.165. (A) A natural gas company may apply to the
public utilities commission for approval to use proceeds generated
from an infrastructure development rider to fund prudently
incurred infrastructure development costs of one of the following
economic development projects:
(1) An eligible project, as defined in section 122.9511 of
the Revised Code, certified by the director of development
services under the SiteOhio certification program;
(2) An economic development project to which all of the
following apply:
(a) The project is located in an area where adequate natural
gas infrastructure is not available.
(b) Infrastructure development will provide opportunities for
increased natural gas usage.
(c) Economic-development benefits may result from
infrastructure development.
(B) The application for approval shall contain all of the
following:
(1) A description of the economic development project to be
funded;
(2) An estimate of the infrastructure development costs to
serve the economic development project;
(3) If the economic development project is the type described
in division (A)(2) of this section, a description of how the
project meets the criteria of divisions (A)(2)(a) to (c) of this
section.
(C) Before filing an application under division (A) of this
section, the company shall, at least thirty days before filing the
application, file a preapplication notification letter with the
commission of the company's intent to file.
(D) The commission shall adopt rules to provide for an
accelerated review of an application filed under division (A) of
this section. The rules shall provide for the automatic approval
of the application not later than thirty days after the date of
the application filing unless the commission suspends the
application for good cause shown. If the application is suspended,
the commission shall approve, deny, or modify the application not
later than fifteen days after the date of the suspension.
(E) A natural gas company may submit multiple applications
under this section if the company desires to fund multiple
economic development projects. The company may use its discretion
in determining which economic development projects to seek
approval to fund, subject to the requirements of this section.
Sec. 4929.166. In considering an application for approval to
fund an economic development project under section 4929.165 of the
Revised Code, the public utilities commission shall not consider
whether any property of the natural gas company that is currently
owned or projected to be owned is used and useful in rendering
utility service.
Sec. 4929.167. (A) A natural gas company that has an
approved infrastructure development rider shall file an annual
reconciliation report with the public utilities commission on the
first day of July, beginning in the calendar year immediately
following the calendar year in which the rider is approved. The
report shall include both of the following for the immediately
preceding calendar year:
(1) The amount of proceeds generated by the rider, including
any associated carrying costs calculated using the company's
short-term cost of debt;
(2) The amount of infrastructure development costs funded by
the rider.
(B) If the report shows that the proceeds under division
(A)(1) of this section exceed the amount under division (A)(2) of
this section, the company shall propose in the report a method for
the disposition of the difference, including any associated
carrying costs, to customers through the infrastructure
development rider on an annual basis. The commission shall either
approve the proposed method or direct that a different method be
used.
Sec. 4929.168. The public utilities commission may, at its
discretion, conduct a financial audit of a natural gas company
that is approved to fund an economic development project under
section 4929.165 of the Revised Code to determine if the company
spent proceeds from the infrastructure development rider in
conformance with the commission's orders.
Section 2. That existing section 4909.05 of the Revised Code
is hereby repealed.
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