Connecticut Seal

General Assembly

 

Raised Bill No. 5815

February Session, 2008

 

LCO No. 2718

 

*02718_______ET_*

Referred to Committee on Energy and Technology

 

Introduced by:

 

(ET)

 

AN ACT CONCERNING THE MISSION OF THE DEPARTMENT OF PUBLIC UTILITY CONTROL.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 16-2 of the 2008 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) There shall continue to be a Public Utilities Control Authority, which shall consist of five electors of this state, appointed by the Governor with the advice and consent of both houses of the General Assembly. The mission of said authority shall be to ensure that public service companies are regulated consistent with the public interest and provide safe, efficient, high-quality utility services, with responsive customer service, at the lowest reasonable cost to ratepayers. Not more than three members of said authority in office at any one time shall be members of any one political party. On or before July 1, 1983, and quadrennially thereafter, the Governor shall appoint three members to the authority and on or before July 1, 1985, and quadrennially thereafter, the Governor shall appoint two members. All such members shall serve for a term of four years. The procedure prescribed by section 4-7 of the 2008 supplement to the general statutes shall apply to such appointments, except that the Governor shall submit each nomination on or before May first, and both houses shall confirm or reject it before adjournment sine die. The commissioners shall be sworn to the faithful performance of their duties.

(b) The authority shall elect a chairperson and vice-chairperson each June for one-year terms starting on July first of the same year. The vice-chairperson shall perform the duties of the chairperson in his absence.

(c) Any matter coming before the authority may be assigned by the chairperson to a panel of three commissioners, not more than two of whom shall be members of the same political party. Except as otherwise provided by statute or regulation, the panel shall determine whether a public hearing shall be held on the matter, and [may designate one or two of its members to conduct such hearing or] shall appoint an examiner to ascertain the facts and report thereon to the panel. The decision of the panel, if unanimous, shall be the decision of the authority. If the decision of the panel is not unanimous, the matter shall be referred to the entire authority for decision.

(d) The commissioners of the authority shall serve full time and shall make full public disclosure of their assets, liabilities and income at the time of their appointment, and thereafter each member of the authority shall make such disclosure on or before July thirtieth of each year of such member's term, and shall file such disclosure with the office of the Secretary of the State. Each commissioner shall receive annually a salary equal to that established for management pay plan salary group seventy-five by the Commissioner of Administrative Services, except that the chairperson shall receive annually a salary equal to that established for management pay plan salary group seventy-seven.

(e) To insure the highest standard of public utility regulation, on and after October 1, 2007, any newly appointed commissioner of the authority shall have education or training and three or more years of experience in one or more of the following fields: Economics, engineering, law, accounting, finance, utility regulation, public or government administration, consumer advocacy, business management, and environmental management. On and after July 1, 1997, at least three of these fields shall be represented on the authority by individual commissioners at all times. Any time a commissioner is newly appointed, at least one of the commissioners shall have experience in utility customer advocacy.

(f) The chairperson of the authority, with the consent of two or more other members of the authority, shall appoint an executive director, who shall be the chief administrative officer of the Department of Public Utility Control. The executive director shall be supervised by the chairperson of the authority, serve for a term of four years and annually receive a salary equal to that established for management pay plan salary group seventy-two by the Commissioner of Administrative Services. The executive director (1) shall conduct comprehensive planning with respect to the functions of the department; (2) shall coordinate the activities of the department; (3) shall cause the administrative organization of the department to be examined with a view to promoting economy and efficiency; (4) shall, in concurrence with the chairperson of the authority, organize the department into such divisions, bureaus or other units as he deems necessary for the efficient conduct of the business of the department and may from time to time abolish, transfer or consolidate within the department, any division, bureau or other units as may be necessary for the efficient conduct of the business of the department, provided such organization shall include any division, bureau or other unit which is specifically required by the general statutes; (5) shall, for any proceeding on a proposed rate amendment in which staff of the department are to be made a party pursuant to section 16-19j, determine which staff shall appear and participate in the proceedings and which shall serve the members of the authority; (6) may enter into such contractual agreements, in accordance with established procedures, as may be necessary for the discharge of his duties; and (7) may, subject to the provisions of section 4-32, and unless otherwise provided by law, receive any money, revenue or services from the federal government, corporations, associations or individuals, including payments from the sale of printed matter or any other material or services. The executive director shall require the staff of the department to have expertise in public utility engineering and accounting, finance, economics, computers and rate design. Subject to the provisions of chapter 67 and within available funds in any fiscal year, the executive director may appoint a secretary, and may employ such accountants, clerical assistants, engineers, inspectors, experts, consultants and agents as the department may require.

(g) No member of the authority or employee of the department shall, while serving as such, have any interest, financial or otherwise, direct or indirect, or engage in any business, employment, transaction or professional activity, or incur any obligation of any nature, which is in substantial conflict with the proper discharge of his duties or employment in the public interest and of his responsibilities as prescribed in the laws of this state, as defined in section 1-85; provided, no such substantial conflict shall be deemed to exist solely by virtue of the fact that a member of the authority or employee of the department, or any business in which such a person has an interest, receives utility service from one or more Connecticut utilities under the normal rates and conditions of service.

(h) No member of the authority or employee of the department shall accept other employment which will either impair his independence of judgment as to his official duties or employment or require him, or induce him, to disclose confidential information acquired by him in the course of and by reason of his official duties.

(i) No member of the authority or employee of the department shall wilfully and knowingly disclose, for pecuniary gain, to any other person, confidential information acquired by him in the course of and by reason of his official duties or employment or use any such information for the purpose of pecuniary gain.

(j) No member of the authority or employee of the department shall agree to accept, or be in partnership or association with any person, or a member of a professional corporation or in membership with any union or professional association which partnership, association, professional corporation, union or professional association agrees to accept any employment, fee or other thing of value, or portion thereof, in consideration of his appearing, agreeing to appear, or taking any other action on behalf of another person before the authority, the Connecticut Siting Council, the Office of Policy and Management or the Commissioner of Environmental Protection.

(k) No commissioner of the authority shall, for a period of one year following the termination of his or her service as a commissioner, accept employment: (1) By a public service company or by any person, firm or corporation engaged in lobbying activities with regard to governmental regulation of public service companies; (2) by a certified telecommunications provider or by any person, firm or corporation engaged in lobbying activities with regard to governmental regulation of persons, firms or corporations so certified; or (3) by an electric supplier or by any person, firm or corporation engaged in lobbying activities with regard to governmental regulation of electric suppliers. No such commissioner who is also an attorney shall in any capacity, appear or participate in any matter, or accept any compensation regarding a matter, before the authority, for a period of one year following the termination of his or her service as a commissioner.

Sec. 2. (NEW) (Effective from passage) In any proceeding before the Department of Public Utility Control involving more than two hundred thousand dollars, the department shall as part of the proceeding, conduct an analysis to determine whether its decision would have an overall negative cost impact on ratepayers. For any decision determined to have a negative cost impact on ratepayers, the department shall report this fact to the president pro tempore of the Senate, the speaker of the House of Representatives and the joint standing committee of the General Assembly having cognizance of matters relating to energy at least sixty days before taking any action or requiring any action that implements the ruling, provided the sixty-day period may be shortened or eliminated if the department determines that there is a reliability emergency.

Sec. 3. Section 16-19e of the 2008 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) In the exercise of its powers under the provisions of this title, including, but not limited to, the [Department of Public Utility Control shall examine and regulate] examination and regulation of the transfer of existing assets and franchises, the supervision of the expansion of the plant and equipment of existing public service companies, the supervision of the operations and internal workings of public service companies, and the establishment of the level and structure of rates, the Department of Public Utility Control shall act in accordance with the following principles: (1) That there is a clear public need for the service being proposed or provided; (2) that the public service company shall be fully competent to provide efficient and adequate service to the public in that such company is technically, financially and managerially expert and efficient; (3) that the department and all public service companies shall perform all of their respective public responsibilities with economy, efficiency and care for public safety and energy security, and so as to promote economic development within the state with consideration for energy and water conservation, energy efficiency and the development and utilization of renewable sources of energy and for the prudent management of the natural environment; (4) that the level and structure of rates be just and reasonable and sufficient, but no more than sufficient, to allow public service companies to cover their operating costs including, but not limited to, appropriate staffing levels, and capital costs, to attract needed capital and to maintain their financial integrity, and yet provide appropriate protection to the relevant public interests, both existing and foreseeable which shall include, but not be limited to, reasonable costs of security of assets, facilities and equipment that are incurred solely for the purpose of responding to security needs associated with the terrorist attacks of September 11, 2001, and the continuing war on terrorism; (5) that the level and structure of rates charged customers shall reflect prudent and efficient management of the franchise operation; and (6) that the rates, charges, conditions of service and categories of service of the companies not discriminate against customers which utilize renewable energy sources or cogeneration technology to meet a portion of their energy requirements.

(b) On or before January 1, 2009, and each year thereafter, the Department of Public Utility Control shall prepare a report regarding which public service companies' rates are higher than the national average rates for similar service, on a per unit basis. The department shall submit said report to the Governor, the president pro tempore of the Senate, the speaker of the House of Representatives, and the joint standing committee of the General Assembly having cognizance of matters relating to energy.

(c) Notwithstanding subsection (a) of this section, for any company listed in the report prepared pursuant to subsection (b) of this section that has per unit rates higher than the national average, the Department of Public Utility Control shall examine and regulate the transfer of existing assets and franchises of such company, the operations and internal workings of such company, and the establishment of the level and structure of rates of such company in accordance with the following: (1) That there is a clear public need for the service being proposed or provided; (2) that the company shall be fully competent to provide efficient and adequate service to the public in that such company is technically, financially and managerially expert and efficient; (3) that the department and the public service company shall perform their respective public responsibilities with economy, efficiency and care for the public safety, with consideration for energy and water conservation, energy efficiency and the development and use of renewable sources of energy without a significant net increase in rates, and for the prudent management of the natural environment; (4) that the level and structure of rates be sufficient, but no more than sufficient, to allow public service company to cover its operating and capital costs, to attract needed capital and to maintain their financial integrity, and yet provide appropriate protection to the relevant public interests, both existing and foreseeable, which shall include, but not be limited to, reasonable costs of security of assets, facilities and equipment incurred solely for responding to security needs associated with the terrorist attacks of September 11, 2001, and the continuing war on terrorism; (5) that the level and structure of rates charged customers shall reflect prudent and efficient management of the franchise operation; and (6) that the rates, charges, conditions of service and categories of service of the companies not discriminate against customers that use renewable energy sources or cogeneration technology to meet a portion of their energy requirements.

[(b)] (d) The Department of Public Utility Control shall promptly undertake a separate, general investigation of, and shall hold at least one public hearing on new pricing principles and rate structures for electric companies and for gas companies to consider, without limitation, long run incremental cost of marginal cost pricing, peak load or time of day pricing and proposals for optimizing the utilization of energy and restraining its wasteful use and encouraging energy conservation, and any other matter with respect to pricing principles and rate structures as the department shall deem appropriate. The department shall determine whether existing or future rate structures place an undue burden upon those persons of poverty status and shall make such adjustment in the rate structure as is necessary or desirable to take account of their indigency. The department shall require the utilization of such new principles and structures to the extent that the department determines that their implementation is in the public interest and necessary or desirable to accomplish the purposes of this provision without being unfair or discriminatory or unduly burdensome or disruptive to any group or class of customers, and determines that such principles and structures are capable of yielding required revenues. In reviewing the rates and rate structures of electric and gas companies, the department shall take into consideration appropriate energy policies, including those of the state as expressed in subsection (c) of this section. The authority shall issue its initial findings on such investigation by December 1, 1976, and its final findings and order by June 1, 1977; provided that after such final findings and order are issued, the department shall at least once every two years undertake such further investigations as it deems appropriate with respect to new developments or desirable modifications in pricing principles and rate structures and, after holding at least one public hearing thereon, shall issue its findings and order thereon.

[(c)] (e) The Department of Public Utility Control shall consult at least once each year with the Commissioner of Environmental Protection, the Connecticut Siting Council and the Office of Policy and Management, so as to coordinate and integrate its actions, decisions and policies pertaining to gas and electric companies, so far as possible, with the actions, decisions and policies of said other agencies and instrumentalities in order to further the development and optimum use of the state's energy resources and conform to the greatest practicable extent with the state energy policy as stated in section 16a-35k, taking into account prudent management of the natural environment and continued promotion of economic development within the state. In the performance of its duties, the department shall take into consideration the energy policies of the state as expressed in this subsection and in any annual reports prepared or filed by such other agencies and instrumentalities, and shall defer, as appropriate, to any actions taken by such other agencies and instrumentalities on matters within their respective jurisdictions.

[(d)] (f) The Commissioner of Environmental Protection, the Commissioner of Economic and Community Development, the Connecticut Siting Council and the Office of Policy and Management shall be made parties to each proceeding on a rate amendment proposed by a gas, electric or electric distribution company based upon an alleged need for increased revenues to finance an expansion of capital equipment and facilities, and shall participate in such proceedings to the extent necessary.

[(e)] (g) The Department of Public Utility Control, in a proceeding on a rate amendment proposed by an electric distribution company based upon an alleged need for increased revenues to finance an expansion of the capacity of its electric distribution system, shall determine whether demand-side management would be more cost-effective in meeting any demand for electricity for which the increase in capacity is proposed.

[(f)] (h) The provisions of this section shall not apply to the regulation of a telecommunications service which is a competitive service, as defined in section 16-247a, or to a telecommunications service to which an approved plan for an alternative form of regulation applies, pursuant to section 16-247k.

[(g)] (i) The department may, upon application of any gas or electric public service company, which has, as part of its existing rate plan, an earnings sharing mechanism, modify such rate plan to allow the gas or electric public service company, after a hearing that is conducted as a contested case, in accordance with chapter 54, to include in its rates the reasonable costs of security of assets, facilities, and equipment, both existing and foreseeable, that are incurred solely for the purpose of responding to security needs associated with the terrorist attacks of September 11, 2001, and the continuing war on terrorism.

Sec. 4. (NEW) (Effective from passage) When the Department of Public Utility Control receives ten complaints of a similar nature regarding a public service company, they shall open up a docket to consider the complaints and determine a resolution to the complaints within forty-five days.

This act shall take effect as follows and shall amend the following sections:

Section 1

from passage

16-2

Sec. 2

from passage

New section

Sec. 3

from passage

16-19e

Sec. 4

from passage

New section

Statement of Purpose:

To put the public interest first in all Department of Public Utility Control decisions.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]