Staff Assisted Rate Case Procedure

PURPOSE: This rule prescribes the process to be followed when the commission processes a utility rate case for certain small utilities. (1) Definitions. As used in this rule, the following terms mean: (A) A small utility means a gas utility serving ten thousand (10,000) or fewer customers, a water or sewer utility serving eight thousand (8,000) or fewer customers, or a steam utility serving one hundred (100) or fewer customers; and AND INSURANCE (B) A disposition agreement is a document that sets forth the signatories’ proposed resolution of some or all of the issues pertaining to a small utility rate case, and has the same weight as a stipulation and agreement as defined in 4 CSR 240-2.115. (2) This rule describes the process for small utility rate cases. (A) In addition to the commission’s provisions regarding dis missal of a case in 4 CSR 240-2.116, the commission may dismiss a small utility rate case at any time if— 1. The utility is not current on the payment of all of its commission assessments; 2. The utility fails to submit its annual report or annual statement of operating revenue; or 3. The utility is not in good standing with the Missouri Secretary of State, if applicable. (3) Commencement. A small utility rate case may be com menced by— (A) A letter received by the secretary of the commission from a small utility stating the amount of the requested increase in its overall annual operating revenues. 1. Any such letter need not be accompanied by any pro posed tariff revisions. 2. Upon receipt of the letter, the secretary of the commis sion will cause a rate case to be opened and will file a copy of the letter in that case. 3. At any time before day one hundred fifty (150) of the timeline described in section (5) of this rule, the utility may submit to the secretary of the commission a letter withdraw ing its previous request for an increase in its annual operating revenues. Upon receipt of such a letter, the secretary of the commission will close the rate case; (B) A complaint filed by staff or by any eligible entity or en tities pursuant to section 386.390.1, RSMo, or section 393.260.1, RSMo; and (C) A proposed tariff stating a new rate or charge filed by a small utility pursuant to section 393.150.1, RSMo, if accompa nied by a written statement requesting the use of the proce dures established by this rule. (4) Staff will assist a small utility in processing a small utility rate case insofar as the assistance is consistent with staff’s function and responsibilities to the commission. Staff may not represent the small utility and may not assume the small util ity’s statutory burden of proof to show that any increased rate is just and reasonable. (5) Rate Case Timeline. Within one (1) week after a small util ity rate case is opened, staff will file a timeline under which the case will proceed, specifying due dates for the activities required by this rule. (A) Staff and the utility may agree in writing that the dead lines set out in the rate case timeline, including the date for issuance of the commission’s report and order, be extended for up to thirty (30) days. If an extension is agreed upon, staff shall file the agreement and an updated timeline reflecting the extension in the case file. (6) Local public hearing. A local public hearing shall be sched uled to occur no later than sixty (60) days after the opening of the case unless staff files a notice in the case stating that all parties agree a local public hearing is not necessary. (7) Notice. (A) At least ten (10) days prior to a local public hearing, or upon the filing of a notice that a local public hearing is not necessary, the utility shall mail a written notice, as approved by staff and the Office of the Public Counsel (OPC), to its customers stating— 1. The time, date, and location of the local public hearing, consistent with the order setting the hearing, if applicable; 2. A summary of the proposed rates and charges, the effect of the proposed rate increase on an average residential cus tomer’s bill, and any other company requests that may affect customers, if known; 3. An invitation to submit comments about the utility’s rates and quality of service within thirty (30) days after the date shown on the notice and instructions as to how comments can be submitted electronically, by telephone, and in writing; and 4. Instructions for viewing the publicly available filings made in the case via the commission’s electronic filing system. (B) Staff will file a copy of the notice in the case file. (8) Investigation and audit. After a small utility rate case is opened, the staff shall, and the public counsel may, conduct an investigation of the utility’s request. (A) Staff’s investigation may include a review of any and all information and materials related to the utility’s cost of pro viding service and its operating revenues, the design of the utility’s rates, the utility’s service charges or fees, all provisions of the utility’s tariffs, and any operational or customer service issues that are discovered during the investigation. The staff’s audit and investigation will ensure reasonable consistency in the recommended rate treatment of the utility’s rate base, reve nue, and expenses with that of other similarly situated utilities. (B) Staff’s investigation may include a review of the records generated since the utility’s previous rate case, the case in which the utility was granted its Certificate of Convenience and Necessity, or the utility’s transfer of assets case, whichever is most recent. (C) If an investigation of the utility’s request includes the submission of data requests to the utility, copies of the data requests shall be provided to all parties to the case when they are submitted to the utility. The utility’s responses to such data requests shall also be shared. (D) Staff’s investigation shall include an update of the utili ty’s rate base. (E) In determining the utility’s cost of service, the value of normal expense items and plant-in-service and other rate base items, for which documentation is not available, may be based upon such evidence as is available or may be estimated in order to include reasonable levels of those costs. Unusual expense or rate base items, or expense or rate base items for which the utility claims unusual levels of cost may require additional support by the utility. Nothing in this section di minishes the utility’s obligation to adhere to the commission’s rules regarding appropriate record-keeping. (F) Not later than ninety (90) days after a small utility rate case is opened, the staff shall provide to all parties, a report of its preliminary investigation, audit, analysis, and workpapers including: 1. An evaluation of the utility’s record-keeping practices; and 2. A list of the cost of service items that are still under consideration with an explanation for why those items are not yet resolved. (G) If the public counsel is conducting its own investigation it shall, not later than ninety (90) days after a small utility rate case is opened, provide to all parties a report regarding what ever investigation it has conducted. (9) Settlement proposals. (A) Staff’s confidential settlement proposal. Not later than one hundred twenty (120) days after a small utility rate case is opened staff shall, and the public counsel if proposing its own settlement, may provide to all parties to the case, a confidential settlement proposal. 1. Staff’s settlement proposal will address the following subjects: A. The utility’s annual operating revenues; B. The utility’s customer rates; C. The utility’s service charges and fees; D. The utility’s plant depreciation rates; E. The utility’s tariff provisions; F. The operation of the utility’s systems; and G. The management of the utility’s operations. 2. Staff’s settlement proposal will include the following documents: A. Draft revised tariff sheets reflecting the settlement proposal; B. A draft disposition agreement reflecting the settle ment proposal; C. Staff’s updated workpapers; and D. Any other documents supporting the staff’s settle ment proposal. 3. If OPC makes a settlement proposal, it shall include the following documents: A. OPC’s updated workpapers; and B. Any other documents supporting OPC’s settlement proposal. (B) Any settlement proposal, including any draft disposition agreement, and all supporting documents attached thereto are strictly intended for settlement negotiations only. If staff and the utility are unable to reach a full or partial settlement via disposition agreement, neither party is bound to any position stated or implied by the settlement proposal, draft disposition agreement, or supporting documents provided. (C) Not later than ten (10) days after staff provides its settle ment proposal, the public counsel, the utility, and any other parties to the case shall notify staff whether they agree with the proposal or, if not, provide any suggested changes and the reasoning for those changes to the parties. Any party sug gesting changes shall provide to all other parties any audit workpapers, rate design workpapers, or other documents in its possession that support its suggestions. (10) At any time prior to the filing of a disposition agreement, any party may request the assigned regulatory law judge meet with the participants and mediate discussions to assist them in reaching at least a partial agreement. (11) Disposition agreement. (A) Not later than one hundred fifty (150) days after a small utility rate case is opened, staff shall file one (1) of the follow ing: 1. A disposition agreement involving, at a minimum, staff and the utility, and providing for a full resolution of the small utility rate case; 2. A disposition agreement involving, at a minimum, staff and the utility, and providing for a partial resolution of the small utility rate case and a motion requesting that the case proceed to an evidentiary hearing; or 3. A motion stating that agreements cannot be reached on any of the issues related to the small utility rate case and asking that the case proceed to an evidentiary hearing. (B) If the disposition agreement provides for a full resolution of the small utility rate case and is executed by all parties, the utility will submit to the commission, within five (5) business days of staff’s filing, new and/or revised tariff sheets bearing an effective date of not fewer than thirty (30) days later, to imple ment the agreement. (C) If the disposition agreement filed by staff provides for a full resolution of the small utility rate case but is not executed by all parties, the utility will submit to the commission concur rent with staff’s filing new and/or revised tariff sheets, bearing an effective date that is not fewer than forty-five (45) days after they are filed, to implement the agreement. (D) No later than five (5) business days after the filing of a full or partial disposition agreement that is not executed by all par ties, each non-signatory party shall file a pleading stating its position regarding the disposition agreement and the related tariff revisions and providing the reasons for its position. If the non-signatory party intends to ask that the case be resolved by evidentiary hearing, it must do so in this pleading. If a disposi tion agreement is not executed by all parties, and a hearing is requested, then no party is bound to any position stated or im plied by the disposition agreement or supporting documents if the company determines it no longer wants to pursue positions in the disposition agreement. (E) If any party requests an evidentiary hearing where the disposition agreement filed by staff provides for a full resolu tion of the small utility rate case and is executed by at least the utility and staff, either the utility or staff may present evidence in support of the disposition agreement. 1. If the utility requests to be excused from participating as a party in such an evidentiary hearing through a utility repre sentative’s affidavit submitted by staff or a motion submitted by the utility, the regulatory law judge may grant that request and issue a notice in the case file that the request has been made and granted. However, representatives of the utility may still be called as witnesses by other parties. (12) Evidentiary hearing procedures. (A) Any party may file a request for an evidentiary hearing. A request for an evidentiary hearing shall include a specified list of issues that the requesting party believes should be the subject of the hearing. (B) Once such a request is filed, the regulatory law judge will issue a procedural schedule designed to resolve the case in the time remaining in the small utility rate case process, consistent with the requirements of due process and fairness to the parties and the utility’s customers and will suspend the utility’s pending tariff revisions, if any, pending completion of the hearing. (13) The small utility rate case shall be wholly submitted to the commission for decision not later than two hundred forty (240) days after the small utility rate case is opened in order for the commission’s report and order regarding the case to be effec tive not later than two hundred seventy (270) days after the small utility rate case is opened. (14) The commission must set just and reasonable rates, which may result in a revenue increase more or less than the increase originally sought by the utility, or which may result in a reve nue decrease. (15) Waiver of Provisions of this Rule. Any provision of this rule, including the requirement that the commission’s report and order to resolve the case be effective no later than two AND INSURANCE hundred seventy (270) days after the small utility rate case is opened, may be waived by the commission upon a finding of good cause. AUTHORITY: sections 386.040, 386.250, 393.140, 393.290, and 393.291, RSMo 2016.* This rule originally filed as 4 CSR 240-10.075. Original rule filed Oct. 5, 2017, effective May 30, 2018. Moved to 20 CSR 4240-10.075, effective Aug. 28, 2019. *Original authority: 386.040, RSMo 1939; 386.250, RSMo 1939, amended 1963, 1967, 1977, 1980, 1987, 1988, 1991, 1993, 1995, 1996; 393.140, RSMo 1939, amended 1949, 1967; 393.290, RSMo 1939, amended 1967; and 393.291, RSMo 2003.