1 STATE OF OKLAHOMA
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2 1st Session of the 59th Legislature (2023)
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3 SENATE BILL 1103 By: Treat
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6 AS INTRODUCED
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7 An Act relating to electric utilities; amending 17
7 O.S. 2021, Section 291, which relates to public
8 utility resources; modifying definition; creating the
8 Ratepayer Protection Act of 2023; providing short
9 title; defining terms; providing option for certain
9 electric utilities to file certain plan notice;
10 establishing provisions of plan notice; providing for
10 approval of certain plan subject to certain
11 regulation; prohibiting certain electric utilities
11 from filing certain applications prior to certain
12 date; requiring certain rates to remain in effect
12 during certain plan term subject to certain rate
13 adjustments; requiring certain electric utilities to
13 file certain information within application;
14 providing for certain testimony to plan applications
14 be submitted by certain date; requiring certain
15 response to testimony be submitted by certain date;
15 requiring the Corporation Commission to hold certain
16 hearing by certain date; requiring Commission to
16 issue final order by certain date; providing for
17 certain rates to go into immediate effect upon
17 issuance of final order; providing for the Commission
18 to require security under certain circumstances;
18 requiring order by Commission to specify certain
19 information for certain filing; requiring certain
19 application to utilize certain data; providing for
20 utility to file certain application and notice for
20 certain term; requiring certain approved rates to
21 continue in force until certain date; requiring rates
21 to be adjusted subject to certain provisions;
22 requiring certain refund to customer under certain
22 circumstances; requiring adjustments to only occur
23 once per year; requiring certain rates to continue in
23 force subject to certain circumstances; providing for
24 withdrawal process; construing provisions; requiring
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 1 certain electric utilities to offer certain rate
1 options; requiring utility to submit certain rate
2 option proposals to Commission; requiring certain
2 notice be provided to customers; requiring certain
3 electric utility to administer certain program;
3 establishing provisions of program; requiring
4 promulgation of rules by Commission; prohibiting an
4 electric utility from disconnecting service to a
5 customer under certain conditions; requiring electric
5 utility to maintain certain list; requiring list
6 distribution; requiring certain electric utilities
6 using natural gas electric generation to maintain
7 certain supply by certain date; providing for certain
7 electric utility to enter into certain storage
8 agreements; providing for codification; and declaring
8 an emergency.
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11 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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12 SECTION 1. AMENDATORY 17 O.S. 2021, Section 291, is
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13 amended to read as follows:
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14 Section 291. As used in this act:
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15 1. “Commission” means the Corporation Commission;
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16 2. “Incumbent electric transmission owner” means any Oklahoma
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17 electric public utility, as recognized by the Commission, or its
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18 affiliates, or subsidiaries, or any electric cooperative, any
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19 municipal power agency, or any municipal utility that owns,
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20 operates, and maintains an electric transmission facility in this
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21 state, or any public utility, as recognized by the Commission, that
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22 is engaged in the development of an electric transmission facility
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23 in the state as of the effective date of this act;
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 1 3. “Local electric transmission facility” means a high-voltage
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2 transmission line or high-voltage associated transmission facilities
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3 with a rating of greater than sixty-nine (69) kilovolts and less
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4 than three hundred (300) kilovolts or greater; and
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5 4. “Southwest Power Pool” means the Southwest Power Pool or any
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6 federally recognized successor entity.
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7 SECTION 2. NEW LAW A new section of law to be codified
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8 in the Oklahoma Statutes as Section 803.1 of Title 17, unless there
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9 is created a duplication in numbering, reads as follows:
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10 Sections 2 through 12 of this act shall be known and may be
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11 cited as the “Ratepayer Protection Act of 2023”.
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12 SECTION 3. NEW LAW A new section of law to be codified
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13 in the Oklahoma Statutes as Section 803.2 of Title 17, unless there
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14 is created a duplication in numbering, reads as follows:
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15 As used in this act:
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16 1. “Asset manager” means any third party that is authorized to
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17 sell, market, or utilize excess natural gas capacity that electric
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18 utilities do not need or are not critical for operation during non-
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19 winter months;
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20 2. “Commission” means the Corporation Commission;
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21 3. “Customer utility bill relief program” means a program to be
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22 administered by an electric utility subject to retail rate
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23 regulation by the Commission, to be offered to residential customers
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 1 of the utility for the purposes of providing bill relief options to
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2 customers;
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3 4. “Earned return on equity” means the actual earned return on
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4 equity during the historical year, subject to the adjustments
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5 defined in this act and the utility’s performance-based rate plan
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6 rate schedule approved by the Commission;
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7 5. “General rate case application” means a request for review
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8 of an electric utility’s rates and charges as prescribed by the laws
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9 of this state and administrative rule of the Commission;
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10 6. “Historical year” means the test period selected by the
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11 electric utility in its performance-based rate plan notice;
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12 7. “Natural gas electric generation” means a machine or
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13 machines that use natural gas to produce capacity, energy, or other
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14 electricity products;
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15 8. “Performance-based rate plan” means the formula by which the
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16 jurisdictional non-fuel revenue requirements of a rate-regulated
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17 electric utility shall be calculated and allocated to the utility’s
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18 various rate schedules, subject to the jurisdiction of the
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19 Commission and this act;
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20 9. “Performance-based rate plan application” means one of the
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21 five annual rate evaluations and adjustments filed by the electric
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22 utility before the Commission during the performance-based rate plan
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23 term;
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 1 10. “Performance-based rate plan application filing date” means
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2 the last day of the year in which an electric utility shall file its
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3 annual performance-based rate plan application before the
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4 Commission, unless a modification to such date is requested by a
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5 utility and approved by the Commission;
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6 11. “Performance-based rate plan notice” means the request
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7 filed before the Commission electing to utilize a performance-based
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8 rate plan, which shall be included with a general rate case
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9 application filed before the Commission;
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10 12. “Performance-based rate plan term” means a period following
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11 a final order issued in a general rate case application, inclusive
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12 of five annual performance-based rate plan applications within five
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13 (5) individual historical years;
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14 13. “Target return on equity” means the return on shareholder
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15 equity established for the electric utility in the final order
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16 addressing its most recent general rate case application; and
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17 14. “Winter months” means the time period between December 21
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18 of a given year through March 20 of the following year.
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19 SECTION 4. NEW LAW A new section of law to be codified
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20 in the Oklahoma Statutes as Section 803.3 of Title 17, unless there
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21 is created a duplication in numbering, reads as follows:
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22 A. 1. An electric utility filing an application for a general
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23 change to its rates and charges under this section and pursuant to
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24 the rules of the Corporation Commission may, as part of a general
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 1 rate change application, file a performance-based rate plan notice
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2 before the Commission indicating the utility is electing to have its
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3 rates regulated under a performance-based rate plan as authorized
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4 and defined by this act.
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5 2. The performance-based rate plan notice shall define the
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6 historical year to be selected by the utility and utilized in each
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7 performance-based rate plan application during the performance-based
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8 rate plan term.
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9 B. 1. The Commission shall grant the utility’s performance-
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10 based rate plan notice to elect rate regulation under a performance-
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11 based rate plan, as authorized and defined by this act.
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12 2. The Commission shall regulate the rates of the utility in
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13 accordance with the terms of this act during the performance-based
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14 rate plan term and any tariff approved by the Commission that does
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15 not otherwise conflict with the terms of this act.
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16 C. An electric utility shall not file its first performance-
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17 based rate plan application of any performance-based rate plan term
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18 until at least one hundred eighty (180) days after rates have become
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19 effective pursuant to the final order on the application for a
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20 general change in rates.
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21 D. The rates that are approved in the final order of the
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22 utility’s most recent general rate case application shall remain in
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23 effect during the performance-based rate plan term, subject to the
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24 rate adjustments under this section.
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 1 E. 1. An approved performance-based rate plan shall require
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2 the utility to file the information required by the Commission
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3 pursuant to this section on the performance-based rate plan
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4 application filing date.
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5 2. An approved performance-based rate plan shall require any
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6 party, according to the Commission’s rules and procedures, to file
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7 with the Commission testimony in response to the utility’s
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8 performance-based rate plan application no later than seventy-five
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9 (75) calendar days after the utility’s performance-based rate plan
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10 application filing date.
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11 3. An approved performance-based rate plan shall require the
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12 utility to file with the Commission any rebuttal to a party’s
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13 testimony under paragraph 1 of this subsection within ninety (90)
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14 calendar days after the performance-based rate plan filing date.
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15 F. 1. The Commission shall conduct a hearing on a utility’s
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16 performance-based rate plan application no later than one hundred
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17 twenty (120) calendar days after a utility’s performance-based rate
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18 plan application filing date.
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19 2. The Commission shall issue a final order no later than one
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20 hundred eighty (180) days after a utility’s performance-based rate
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21 plan application filing date. If a final order has not been issued
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22 by the one-hundred-eightieth day following a performance-based rate
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23 plan application filing date, the rates proposed by the utility in
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24 its performance-based rate plan application shall go into immediate
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 1 effect, at the utility’s discretion, subject to refund following the
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2 issuance of a final order.
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3 G. The Commission may require reasonable security to assure the
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4 prompt payment of any refunds, including interest, that may be
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5 ordered.
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6 SECTION 5. NEW LAW A new section of law to be codified
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7 in the Oklahoma Statutes as Section 803.4 of Title 17, unless there
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8 is created a duplication in numbering, reads as follows:
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9 A. An order by the Corporation Commission approving a
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10 performance-based rate application shall specify the minimum
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11 information required with each annual rate review filing.
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12 B. Annual performance-based rate applications filed by an
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13 electric utility during a performance-based rate term shall be
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14 developed using the historical year selected by the utility.
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15 C. Annual performance-based rate applications shall be prepared
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16 consistent with the Commission’s final order on the utility’s most
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17 recent general rate case application.
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18 D. Following the conclusion of a performance-based rate term,
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19 the utility may file a general rate case application and may elect
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20 to include a new performance-based rate notice with such application
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21 for a new performance-based rate term. Rates approved pursuant to a
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22 utility’s most recent performance-based rate application shall
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23 continue until a final order in the utility’s next general rate case
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24 application is issued and the compliance tariffs are approved.
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 1 SECTION 6. NEW LAW A new section of law to be codified
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2 in the Oklahoma Statutes as Section 803.5 of Title 17, unless there
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3 is created a duplication in numbering, reads as follows:
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4 A. 1. Rates shall be adjusted in a performance-based rate
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5 application based on a comparison of the earned return on equity to
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6 the target return on equity.
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7 2. The target return on equity shall be established in the
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8 final order addressing the performance-based rate notice in the
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9 electric utility’s most recent general rate case application.
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10 3. In a performance-based rate application, the target return
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11 on equity and earned return on equity shall be calculated utilizing
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12 the same capitalization structure approved by the Commission in the
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13 utility’s most recent general rate case application.
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14 B. For the purposes of adjusting rates in a performance-based
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15 rate application, a dead-band of earned returns shall be established
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16 around the target return on equity set in the final order. For rate
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17 adjustments pursuant to this section, the following provisions shall
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18 be applied:
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19 1. The dead-band shall be the target return on equity plus
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20 fifty (50) basis points and the target return on equity minus fifty
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21 (50) basis points, for a total dead-band of one hundred (100) basis
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22 points;
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 1 2. In a performance-based rate application, if the earned
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2 return on equity is within the established dead-band, no rate change
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3 or refund shall occur; and
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4 3. In a performance-based rate application, if the earned
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5 return on equity is less than the dead-band, rates shall be adjusted
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6 to the target return on equity prospectively.
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7 C. 1. In a performance-based rate application, if the earned
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8 return on equity is greater than the dead-band, a refund shall be
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9 issued to customers over a twelve-month period. The refund shall be
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10 seventy-five percent (75%) of such revenues associated with the
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11 earned return on equity greater than the dead-band and shall be
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12 credited or returned to utility customers. The remaining twenty-
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13 five percent (25%) of such revenues associated with the earned
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14 return on equity greater than the dead-band shall be retained by the
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15 utility and reinvested in the utility’s power delivery
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16 infrastructure to improve reliability and resilience.
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