SENATE BILL NO. 101
AN ACT TO AMEND TITLE 26 OF THE DELAWARE CODE RELATING TO PUBLIC UTILITY FACILITY RELOCATIONS THAT ARE NON-REVENUE PRODUCING.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE :
Section 1. Statement of Policy. It is the policy of the State that road construction projects be completed efficiently and in a reasonable timeframe, so as to reduce delays in the completion of projects and to eliminate undue delays and disruption to traffic caused by the construction. Utilities subject to the regulation of the Public Service Commission are often required to relocate or modify their facilities for Department of Transportation or other governmental agency projects. Some of these relocations can involve a significant investment in resources and capital to these utilities. It is the policy of the state that these utilities are permitted to obtain expedited rate relief for the recovery of capital investments made pursuant to a directive by the Department of Transportation or other governmental agencies to relocate their facilities. The General Assembly expects that by allowing for timely rate relief for any unreimbursed costs of these projects these utilities will be better positioned to expedite the completion of their relocations and consequently help reduce delays in the completion of highway and other public projects.
Section 2. Amend Title 26 of the Delaware Code by adding a new section 315, to read as follows:
“§315. Utility Facility Relocation Charge
(a) The following definitions shall apply in this section:
(1) As used in this section, ‘UFRC Rate’ refers to utility facility relocation charge.
(2) As used in this section, ‘UFRC Costs’ means depreciation expenses and pretax return associated with eligible utility facility relocations.
(3) As used in this section, ‘UFRC Revenues’ means revenues produced through a UFRC exclusive of revenues from all other rates and charges.
(4) As used in this section, ‘eligible utility facility relocations’ means new, used and useful utility plant or facilities of an electric or natural gas utility that:
a. Do not include that portion of any plant or facilities used to increase capacity of or connect to the transmission or distribution system to serve new or additional load;
b. Are in service; and
c. Were not included in the utility’s rate base in its most recent general rate case; and which
d. Relocate, as required or necessitated by Department of Transportation or other government agency projects, without reimbursement existing facilities, including but not limited to, mains, lines and services, whether underground or aerial. For purposes of this subparagraph (4)d., “existing facilities” and “relocate” includes the physical relocation of existing facilities and also includes removal, abandonment or retirement of existing facilities and the construction of new facilities in a relocated location.
(5) As used in this section, ‘pretax return’ means the revenues necessary to:
a. Produce net operating income equal to the electric or natural gas utility’s weighted cost of capital as established in the most recent general rate proceeding for that utility multiplied by the net original cost of eligible utility facility relocations. At any time the Commission by its own motion, or by motion of the electric or natural gas utility, Commission staff or the Public Advocate, may determine to revisit and, after hearing without the necessity of a general rate filing reset the UFRC rate to reflect the affected utility’s current cost of capital. The UFRC Rate shall be adjusted back to the date of the motion to reflect any change in the cost of capital determined by the Commission through this process;
b. Provide for the tax deductibility of the debt interest component of the cost of capital; and
c. Pay state and federal income taxes applicable to such income.
(a) Notwithstanding other sections of this subchapter, electric and natural gas utilities subject to the regulation of the Public Service Commission under this Title may file with the Commission rate schedules establishing a UFRC Rate that will allow for the automatic adjustment of the electric or natural gas utility’s basic rates and charges to provide recovery of UFRC Costs on an annual basis.
(b) Any electric or natural gas utility that files under subsection 315(b) of this Subchapter will be subject to the same statutory requirements of a public water utility seeking to implement or change a DSIC Rate found under subsections 314(b)(1) et seq. of this Subchapter, except that such statutory requirements will apply to the UFRC Rate and that the level of increase permitted under subsection 314(b)(7) of this Subchapter is limited to the portion of the customer’s charge related to the delivery or distribution of natural gas or electricity.
(c) The UFRC Rate shall not be available for application to the electric rates of Delmarva Power & Light Company or its successors until July 1, 2006 and shall also not be available for application to the electric rates of Delaware Electric Cooperative or its successors until July 1, 2005.
(d) This section applies only to regulated natural gas and electric utilities that file general rate cases with the Public Service Commission. With respect to a telecommunications service provider electing to be governed under Subchapter VII-A of this Title, upon application by such service provider, utility facility relocation costs not otherwise reimbursed under 17 Del. C. §143 shall be considered by the Commission under §707(c)(6) of this Title.
(f) The Commission may adopt rules and regulations, not inconsistent with this title, that the Commission finds reasonable or necessary to administer a UFRC.”
Approved July 12, 2005