AB 600

Current law allows the Public Service Commission (PSC) to grant a rate

increase to an electric public utility for increases in fuel costs that are of an

extraordinary or emergency nature. The PSC may grant the increase after a hearing

limited in scope to the question of the increase in fuel costs. For purposes of the

foregoing, current law excludes the following from the definition of "electric public

utility": 1) a public utility wholly owned and operated by a municipality or

cooperative association; 2) a public utility that purchases, under federal or state

approved wholesale rates, more than 50 percent of its electric power requirements

from entities that are not affiliated interests of the public utility; and 3) a public

utility with annual total gross operating revenues of $2.5 million or more whose

electric generation equipment has a total capacity of less than 30 megawatts.

This bill eliminates the PSC's authority described above and allows the PSC,

after a hearing, to approve a fuel cost plan for an electric public utility, or, if an electric

public utility's actual fuel costs are outside of the utility's fuel cost annual tolerance,

as established by the PSC, to commence a proceeding to adjust rates that is outside

of a general rate case proceeding for the electric public utility. "Electric utility" is

defined to have the same exclusions as under current law. Also, if the PSC approves

a fuel cost plan for an electric public utility, the bill requires the PSC to defer for

subsequent rate recovery or refund any under-collection or over-collection of fuel

costs that are outside of the utility's symmetrical fuel cost tolerance, as established

by the PSC. Finally, the bill requires the PSC to promulgate a rule to implement the

bill's requirements.