AB452 - Revises provisions relating to public utilities. (BDR 58-572)

- 83rd Session (2025) Assembly Bill No. 452–Assemblymember Brown-May CHAPTER.......... AN ACT relating to public utilities; requiring the Public Utilities Commission of Nevada to open one or more investigatory dockets to examine certain matters relating to a potential cost-sharing adjustment mechanism; requiring a utility to refund certain overcharges; revising provisions governing certain applications filed by a public utility; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Section 1.3 of this bill requires the Public Utilities Commission of Nevada to open one or more investigatory dockets to examine certain matters relating to a potential cost-sharing adjustment mechanism for the recovery of costs for purchased fuel and purchased power and the sharing of such costs between an electric utility and its customers. Section 1.3 requires the Commission to submit periodic reports to the Joint Interim Standing Committee on Growth and Infrastructure concerning the progress of each investigatory docket and, on or before July 1, 2026, submit a final report to the Legislative Commission on the outcomes of the investigatory dockets. Under section 1.3, the Commission is authorized to adopt regulations to establish a cost-sharing adjustment mechanism, if the Commission finds it is in the public interest as a result of the investigatory docket. If the Commission determines that a utility has charged a customer more than any applicable rate or tariff allows, section 1.7 of this bill requires a utility to refund to the customer, with interest, the full amount of any overcharge. Existing law requires the Commission to issue a written order approving or disapproving an application filed by a public utility to make any change in a schedule not later than 210 days after the date on which the application is filed. (NRS 704.110) Section 2 of this bill requires the Commission, for an application filed by certain electric utilities, to issue such a written order not later than 300 days after the date on which the application is filed. EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Chapter 704 of NRS is hereby amended by adding thereto the provisions set forth as sections 1.3 and 1.7 of this act. Sec. 1.3. 1. The Commission shall open one or more investigatory dockets to: (a) Examine how costs for purchased fuel and purchased power are currently passed through to customers. (b) Examine the use of carrying charges on deferred energy accounting and balances. – 2 – - 83rd Session (2025) (c) Identify opportunities to mitigate the impact on customer rates which are associated with fluctuations in the market for purchased fuel and purchased power or other unpredictable events which affect customer rates. (d) Consider elements of a potential cost-sharing adjustment mechanism for purchased fuel and purchased power which is designed to align the financial incentives of an electric utility with the interest of the customers of the electric utility, including, without limitation: (1) A cost-sharing percentage that is high enough to incentivize the electric utility to keep the costs of purchased fuel and purchased power low, but not low enough that the electric utility is exposed to unreasonable levels of risk and volatility. (2) Whether a cost-sharing adjustment mechanism is symmetrical or asymmetrical. (3) Whether to use a straight-sharing method or a sharing- band method. (4) Whether to use a forecasted estimate of costs or historic information concerning costs. (5) Options to improve the transparency of any forecasted estimate of costs, including the use of a forward price index and providing access to forecasted estimates to interveners in proceedings of the Commission who sign nondisclosure agreements. (6) Implications of the inclusion of costs for purchased fuel and purchased power on the participation of an electric utility in real time and day-ahead markets. (e) Examine existing practices and evaluate options that reduce load and mitigate volatility in the cost of natural gas, including, without limitation, demand-side management programs which are cost effective, demand response and load shifting. 2. Before the submission of the report required by subsection 3, the Commission shall submit periodic reports on the progress of each investigatory docket opened pursuant to subsection 1 to the Director of the Legislative Counsel Bureau for transmittal to the Joint Interim Standing Committee on Growth and Infrastructure. 3. On or before July 1, 2026, the Commission shall submit a report on the outcomes of each investigatory docket opened pursuant to subsection 1, including, without limitation, the status of any regulations adopted or considered as a result of the investigatory docket, to the Director of the Legislative Counsel Bureau for transmittal to the Legislative Commission. – 3 – - 83rd Session (2025) 4. If the Commission finds it is in the public interest, as a result of the investigatory docket opened pursuant to subsection 1, the Commission may adopt regulations to establish a cost-sharing adjustment mechanism. 5. As used in this section: (a) “Cost-sharing adjustment mechanism” means a mechanism that shares the risk of purchased fuel and purchased power costs between an electric utility and its customers. (b) “Electric utility” has the meaning ascribed to it in NRS 704.187. Sec. 1.7. Notwithstanding any other provision of law, if the Commission determines that a utility has charged a customer more than any applicable rate or tariff allows, the utility shall refund to the customer, with interest, the full amount of any overcharge. Sec. 2. NRS 704.110 is hereby amended to read as follows: 704.110 Except as otherwise provided in NRS 704.075, 704.68861 to 704.68887, inclusive, and 704.7865, or as may otherwise be provided by the Commission pursuant to NRS 704.095, 704.097 or 704.7621: 1. If a public utility files with the Commission an application to make changes in any schedule, including, without limitation, changes that will result in a discontinuance, modification or restriction of service, the Commission shall investigate the propriety of the proposed changes to determine whether to approve or disapprove the proposed changes. If an electric utility files such an application and the application is a general rate application or an annual deferred energy accounting adjustment application, the Consumer’s Advocate shall be deemed a party of record. 2. Except as otherwise provided in this subsection and subsection 3, if a public utility files with the Commission an application to make changes in any schedule, the Commission shall, not later than 210 days after the date on which the application is filed, issue a written order approving or disapproving, in whole or in part, the proposed changes. If the public utility is an electric utility, the Commission shall, not later than 300 days after the date on which the application is filed, issue a written order approving or disapproving, in whole or in part, the proposed changes. 3. If a public utility files with the Commission a general rate application, the public utility shall submit with its application a statement showing the recorded results of revenues, expenses, investments and costs of capital for its most recent 12 months for which data were available when the application was prepared. – 4 – - 83rd Session (2025) Except as otherwise provided in subsection 4, in determining whether to approve or disapprove any increased rates, the Commission shall consider evidence in support of the increased rates based upon actual recorded results of operations for the same 12 months, adjusted for increased revenues, any increased investment in facilities, increased expenses for depreciation, certain other operating expenses as approved by the Commission and changes in the costs of securities which are known and are measurable with reasonable accuracy at the time of filing and which will become effective within 6 months after the last month of those 12 months, but the public utility shall not place into effect any increased rates until the changes have been experienced and certified by the public utility to the Commission and the Commission has approved the increased rates. The Commission shall also consider evidence supporting expenses for depreciation, calculated on an annual basis, applicable to major components of the public utility’s plant placed into service during the recorded test period or the period for certification as set forth in the application. Adjustments to revenues, operating expenses and costs of securities must be calculated on an annual basis. Within 90 days after the date on which the certification required by this subsection is filed with the Commission, or within the period set forth in subsection 2, whichever time is longer, the Commission shall make such order in reference to the increased rates as is required by this chapter. The following public utilities shall each file a general rate application pursuant to this subsection based on the following schedule: (a) An electric utility that primarily serves less densely populated counties shall file a general rate application: (1) Not later than 5 p.m. on or before the first Monday in June 2019; and (2) At least once every 36 months thereafter or on a date specified in an alternative rate-making plan approved by the Commission pursuant to NRS 704.7621. (b) An electric utility that primarily serves densely populated counties shall file a general rate application: (1) Not later than 5 p.m. on or before the first Monday in June 2020; and (2) At least once every 36 months thereafter or on a date specified in an alternative rate-making plan approved by the Commission pursuant to NRS 704.7621. (c) A public utility that furnishes water for municipal, industrial or domestic purposes or services for the disposal of sewage, or both, which had an annual gross operating revenue of $2,000,000 or more – 5 – - 83rd Session (2025) for at least 1 year during the immediately preceding 3 years and which had not filed a general rate application with the Commission on or after July 1, 2005, shall file a general rate application on or before June 30, 2008, and at least once every 36 months thereafter unless waived by the Commission pursuant to standards adopted by regulation of the Commission. If a public utility furnishes both water and services for the disposal of sewage, its annual gross operating revenue for each service must be considered separately for determining whether the public utility meets the requirements of this paragraph for either service. (d) A public utility that furnishes water for municipal, industrial or domestic purposes or services for the disposal of sewage, or both, which had an annual gross operating revenue of $2,000,000 or more for at least 1 year during the immediately preceding 3 years and which had filed a general rate application with the Commission on or after July 1, 2005, shall file a general rate application on or before June 30, 2009, and at least once every 36 months thereafter unless waived by the Commission pursuant to standards adopted by regulation of the Commission. If a public utility furnishes both water and services for the disposal of sewage, its annual gross operating revenue for each service must be considered separately for determining whether the public utility meets the requirements of this paragraph for either service.  The Commission shall adopt regulations setting forth standards for waivers pursuant to paragraphs (c) and (d) and for including the costs incurred by the public utility in preparing and presenting the general rate application before the effective date of any change in rates. 4. In addition to submitting the statement required pursuant to subsection 3, a public utility may submit with its general rate application a statement showing the effects, on an annualized basis, of all expected changes in circumstances. If such a statement is filed, it must include all increases and decreases in revenue and expenses which may occur within 210 days after the date on which its general rate application is filed with the Commission if such expected changes in circumstances are reasonably known and are measurable with reasonable accuracy. If a public utility submits such a statement, the public utility has the burden of proving that the expected changes in circumstances set forth in the statement are reasonably known and are measurable with reasonable accuracy. The Commission shall consider expected changes in circumstances to be reasonably known and measurable with reasonable accuracy if the expected changes in circumstances consist of specific and – 6 – - 83rd Session (2025) identifiable events or programs rather than general trends, patterns or developments, have an objectively high probability of occurring to the degree, in the amount and at the time expected, are primarily measurable by recorded or verifiable revenues and expenses and are easily and objectively calculated, with the calculation of the expected changes relying only secondarily on estimates, forecasts, projections or budgets. If the Commission determines that the public utility has met its burden of proof: (a) The Commission shall consider the statement submitted pursuant to this subsection and evidence relevant to the statement, including all reasonable projected or forecasted offsets in revenue and expenses that are directly attributable to or associated with the expected changes in circumstances under consideration, in addition to the statement required pursuant to subsection 3 as evidence in establishing just and reasonable rates for the public utility; and (b) The public utility is not required to file with the Commission the certification that would otherwise be required pursuant to subsection 3. 5. If a public utility files with the Commission an application to make changes in any schedule and the Commission does not issue a final written order regarding the proposed changes within the time required by this section, the proposed changes shall be deemed to be approved by the Commission. 6. If a public utility files with the Commission a general rate application, the public utility, or a public utility affiliated with the public utility through common ownership, shall not file with the Co [Text truncated for display. Full text available on LegiScan.]