130th Ohio General Assembly
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H. B. No. 319  As Introduced
As Introduced

130th General Assembly
Regular Session
2013-2014
H. B. No. 319


Representative Grossman 



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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