Bill Text: OH HB319 | 2013-2014 | 130th General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: To permit natural gas companies to apply for an infrastructure development rider to recover costs of certain economic development projects.

Spectrum: Strong Partisan Bill (Republican 25-2)

Status: (Passed) 2014-12-19 - Governor' Action [HB319 Detail]

Download: Ohio-2013-HB319-Introduced.html

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As Introduced

130th General Assembly Regular Session 2013-2014

H. B. No. 319

Representative Grossman 

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A BILL

To amend section 4909.05 and to enact sections

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4929.16, 4929.161, 4929.162, 4929.163, 4929.164,

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4929.165, 4929.166, 4929.167, and 4929.168 of the

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Revised Code to permit natural gas companies to

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apply for an infrastructure development rider to

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cover costs of certain economic development

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projects.

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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1.  That section 4909.05 be amended and sections	8
4929.16, 4929.161, 4929.162, 4929.163, 4929.164, 4929.165,	9
4929.166, 4929.167, and 4929.168 of the Revised Code be enacted	10
to read as follows:	11

Sec. 4909.05.  As used in this section:

12

(A) A "lease purchase agreement" is an agreement pursuant to	13
which a public utility leasing property is required to make rental	14
payments for the term of the agreement and either the utility is	15
granted the right to purchase the property upon the completion of	16
the term of the agreement and upon the payment of an additional	17
fixed sum of money or title to the property vests in the utility	18
upon the making of the final rental payment.	19

(B) A "leaseback" is the sale or transfer of property by a	20
public utility to another person contemporaneously followed by the	21
leasing of the property to the public utility on a long-term	22
basis.	23

(C) The public utilities commission shall prescribe the form	24
and details of the valuation report of the property of each public	25
utility or railroad in the state. Such report shall include all	26
the kinds and classes of property, with the value of each, owned,	27
held, or, with respect to a natural gas, water-works, or sewage	28
disposal system company, projected to be owned or held as of the	29
date certain, by each public utility or railroad used and useful,	30
or, with respect to a natural gas, water-works, or sewage disposal	31
system company, projected to be used and useful as of the date	32
certain, for the service and convenience of the public. Such	33
report shall contain the following facts in detail:	34

(1) The original cost of each parcel of land owned in fee and	35
in use, or, with respect to a natural gas, water-works, or sewage	36
disposal system company, projected to be owned in fee and in use	37
as of the date certain, determined by the commission; and also a	38
statement of the conditions of acquisition, whether by direct	39
purchase, by donation, by exercise of the power of eminent domain,	40
or otherwise;	41

(2) The actual acquisition cost, not including periodic	42
rental fees, of rights-of-way, trailways, or other land rights	43
held, or, with respect to a natural gas, water-works, or sewage	44
disposal system company, projected to be held as of the date	45
certain, by virtue of easements, leases, or other forms of grants	46
of rights as to usage;	47

(3) The original cost of all other kinds and classes of	48
property used and useful, or, with respect to a natural gas,	49
water-works, or sewage disposal system company, projected to be	50
used and useful as of the date certain, in the rendition of	51
service to the public. Such original costs of property, other than	52
land owned in fee, shall be the cost, as determined to be	53
reasonable by the commission, to the person that first dedicated	54
or dedicates the property to the public use and shall be set forth	55
in property accounts and subaccounts as prescribed by the	56
commission. To the extent that the costs of property comprising a	57
coal research and development facility, as defined in section	58
1555.01 of the Revised Code, or a coal development project, as	59
defined in section 1551.30 of the Revised Code, have been allowed	60
for recovery as Ohio coal research and development costs under	61
section 4905.304 of the Revised Code, none of those costs shall be	62
included as a cost of property under this division.	63

(4) The cost of property constituting all or part of a	64
project leased to or used by the utility, or, with respect to a	65
natural gas, water-works, or sewage disposal system company,	66
projected to be leased to or used by the utility as of the date	67
certain, under Chapter 165., 3706., 6121., or 6123. of the Revised	68
Code and not included under division (C)(3) of this section	69
exclusive of any interest directly or indirectly paid by the	70
utility with respect thereto whether or not capitalized;	71

(5) In the discretion of the commission, the cost to a	72
utility, in an amount determined to be reasonable by the	73
commission, of property constituting all or part of a project	74
leased to the utility, or, with respect to a natural gas,	75
water-works, or sewage disposal system company, projected to be	76
leased to the utility as of the date certain, under a lease	77
purchase agreement or a leaseback and not included under division	78
(C)(3) of this section exclusive of any interest directly or	79
indirectly paid by the utility with respect thereto whether or not	80
capitalized;	81

(6) The proper and adequate reserve for depreciation, as	82
determined to be reasonable by the commission;	83

(7) Any sums of money or property that the company may have	84
received, or, with respect to a natural gas, water-works, or	85
sewage disposal system company, is projected to receive as of the	86
date certain, as total or partial defrayal of the cost of its	87
property, except that the report shall not contain either of the	88
following:	89

(a) Any sum of money that a natural gas company may have	90
received or is projected to receive as of the date certain from an	91
infrastructure development rider or rider adjustment under section	92
4929.161 or 4929.162 of the Revised Code;	93

(b) Any sum of money that a natural gas company may have	94
received or is projected to receive as of the date certain from	95
infrastructure development, as defined in section 4929.16 of the	96
Revised Code, that is placed into service under section 4929.165	97
of the Revised Code;	98

(8) The valuation of the property of the company, which shall	99
be the sum of the amounts contained in the report pursuant to	100
divisions (C)(1) to (5) of this section, less the sum of the	101
amounts contained in the report pursuant to divisions (C)(6) and	102
(7) of this section.	103

The report shall show separately the property used and useful	104
to such public utility or railroad in the furnishing of the	105
service to the public, the property held by such public utility or	106
railroad for other purposes, and the property projected to be used	107
and useful to or held by a natural gas, water-works, or sewage	108
disposal system company as of the date certain, and such other	109
items as the commission considers proper. The commission may	110
require an additional report showing the extent to which the	111
property is used and useful, or, with respect to a natural gas,	112
water-works, or sewage disposal system company, projected to be	113
used and useful as of the date certain. Such reports shall be	114
filed in the office of the commission for the information of the	115
governor and the general assembly.	116

Sec. 4929.16.  As used in sections 4929.16 to 4929.168 of the	117
Revised Code:	118

(A) "Economically justified" is a determination based on a	119
formula that is unique for each natural gas company.	120

(B) "Infrastructure development" means constructing	121
extensions of storage, transmission, or distribution facilities	122
that a natural gas company owns and operates.	123

(C) "Infrastructure development costs" means the investment	124
in infrastructure development to which all of the following apply:	125

(1) The investment is for an economic development project	126
described in division (A)(1) or (2) of section 4929.165 of the	127
Revised Code.	128

(2) The investment is not considered economically justified	129
by the natural gas company.	130

(3) The investment is for any deposit required by the natural	131
gas company, as defined in the line-extension provision of the	132
company's tariff, less any contribution in aid of construction	133
received from the owner or developer of the project.	134

"Infrastructure development costs" includes planning,	135
development, and construction costs and, if applicable, any	136
allowance for funds used during construction.	137

Sec. 4929.161.  (A) A natural gas company may file an	138
application with the public utilities commission for approval of	139
an infrastructure development rider to cover prudently incurred	140
infrastructure development costs of economic development projects	141
under section 4929.165 of the Revised Code.	142

(B) The rider shall take effect sixty days after the date of	143
the application's filing unless the commission, for good cause	144
shown, sets the matter for hearing. After the hearing, the	145
commission shall approve, modify, or deny the application.	146

(C) The commission shall not authorize the rider if the	147
proceeds to be generated by the rider are projected, in any one	148
calendar year, to exceed one per cent of the valuation of the	149
natural gas company's property, as determined under division	150
(A)(1) of section 4909.15 of the Revised Code for the company's	151
most recent rate case proceeding under section 4909.18 of the	152
Revised Code, unless the commission determines, for good cause	153
shown, that the cumulative amount should be reduced or eliminated.	154

(D) A rider approved under this section shall be a fixed,	155
monthly charge as determined by the commission for all customers	156
of the natural gas company.	157

Sec. 4929.162.  (A) A natural gas company may file an	158
application with the public utilities commission to adjust a	159
previously approved infrastructure development rider.	160

(B) The rider adjustment shall take effect sixty days after	161
the date of the application's filing unless the commission, for	162
good cause shown, sets the matter for hearing. After the hearing,	163
the commission shall approve, modify, or deny the application.	164

Sec. 4929.163.  Any proceeding under sections 4929.161 and	165
4929.162 of the Revised Code shall be governed by Chapter 4903. of	166
the Revised Code.	167

Sec. 4929.164.  A natural gas company that has an approved	168
infrastructure development rider shall accumulate the proceeds	169
generated from that rider to fund economic development projects	170
under section 4929.165 of the Revised Code.	171

Sec. 4929.165.  (A) A natural gas company may apply to the	172
public utilities commission for approval to use proceeds generated	173
from an infrastructure development rider to fund prudently	174
incurred infrastructure development costs of one of the following	175
economic development projects:	176

(1) An eligible project, as defined in section 122.9511 of	177
the Revised Code, certified by the director of development	178
services under the SiteOhio certification program;	179

(2) An economic development project to which all of the	180
following apply:	181

(a) The project is located in an area where adequate natural	182
gas infrastructure is not available.	183

(b) Infrastructure development will provide opportunities for	184
increased natural gas usage.	185

(c) Economic-development benefits may result from	186
infrastructure development.	187

(B) The application for approval shall contain all of the	188
following:	189

(1) A description of the economic development project to be	190
funded;	191

(2) An estimate of the infrastructure development costs to	192
serve the economic development project;	193

(3) If the economic development project is the type described	194
in division (A)(2) of this section, a description of how the	195
project meets the criteria of divisions (A)(2)(a) to (c) of this	196
section.	197

(C) Before filing an application under division (A) of this	198
section, the company shall, at least thirty days before filing the	199
application, file a preapplication notification letter with the	200
commission of the company's intent to file.	201

(D) The commission shall adopt rules to provide for an	202
accelerated review of an application filed under division (A) of	203
this section. The rules shall provide for the automatic approval	204
of the application not later than thirty days after the date of	205
the application filing unless the commission suspends the	206
application for good cause shown. If the application is suspended,	207
the commission shall approve, deny, or modify the application not	208
later than fifteen days after the date of the suspension.	209

(E) A natural gas company may submit multiple applications	210
under this section if the company desires to fund multiple	211
economic development projects. The company may use its discretion	212
in determining which economic development projects to seek	213
approval to fund, subject to the requirements of this section.	214

Sec. 4929.166.  In considering an application for approval to	215
fund an economic development project under section 4929.165 of the	216
Revised Code, the public utilities commission shall not consider	217
whether any property of the natural gas company that is currently	218
owned or projected to be owned is used and useful in rendering	219
utility service.	220

Sec. 4929.167.  (A) A natural gas company that has an	221
approved infrastructure development rider shall file an annual	222
reconciliation report with the public utilities commission on the	223
first day of July, beginning in the calendar year immediately	224
following the calendar year in which the rider is approved. The	225
report shall include both of the following for the immediately	226
preceding calendar year:	227

(1) The amount of proceeds generated by the rider, including	228
any associated carrying costs calculated using the company's	229
short-term cost of debt;	230

(2) The amount of infrastructure development costs funded by	231
the rider.	232

(B) If the report shows that the proceeds under division	233
(A)(1) of this section exceed the amount under division (A)(2) of	234
this section, the company shall propose in the report a method for	235
the disposition of the difference, including any associated	236
carrying costs, to customers through the infrastructure	237
development rider on an annual basis. The commission shall either	238
approve the proposed method or direct that a different method be	239
used.	240

Sec. 4929.168.  The public utilities commission may, at its	241
discretion, conduct a financial audit of a natural gas company	242
that is approved to fund an economic development project under	243
section 4929.165 of the Revised Code to determine if the company	244
spent proceeds from the infrastructure development rider in	245
conformance with the commission's orders.	246

Section 2. That existing section 4909.05 of the Revised Code	247
is hereby repealed.	248