CHAPTER 148 HOUSE Substitute for SENATE BILL No. 263* (Amends Chapter 113) An Act relating to public utilities; concerning prior determination of rate-making principles
and treatment by the corporation commission; repealing section 1 of 2003 Substitute
for Senate Bill No. 104.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. (a) As used in this section:

      (1) ``Commission'' means the state corporation commission;

      (2) ``contract'' means a public utility's contract for the purchase of
electric power in the amount of at least $5,000,000 annually;

      (3) ``generating facility'' means any electric generating plant or im-
provement to existing generation facilities;

      (4) ``stake'' means a public utility's whole or fractional ownership
share or leasehold or other proprietary interest in a generating facility or
transmission facility;

      (5) ``public utility'' has the meaning provided by K.S.A. 66-104, and
amendments thereto; and

      (6) ``transmission facility'' means: (A) Any existing line, and support-
ing structures and equipment, being upgraded for the transfer of elec-
tricity with an operating voltage of 69 kilovolts or more of electricity; or
(B) any new line, and supporting structures and equipment, being con-
structed for the transfer of electricity with an operating voltage of 230
kilovolts or more of electricity.

      (b)  (1) Prior to undertaking the construction of, or participation in,
a transmission facility, a public utility may file with the commission a
petition for a determination of the rate-making principles and treatment,
as proposed by the public utility, that will apply to the recovery in whole-
sale or retail rates of the cost to be incurred by the public utility to acquire
such public utility's stake in the transmission facility during the expected
useful life of the transmission facility.

      (2) The commission shall issue an order setting forth the rate-making
principles and treatment that will be applicable to the public utility's stake
in the transmission facility in all rate-making proceedings on and after
such time as the transmission facility is placed in service or the term of
the contract commences.

      (3) The commission in all proceedings in which the cost of the public
utility's stake in the transmission facility is considered shall utilize the
rate-making principles and treatment applicable to the transmission fa-
cility.

      (4) If the commission fails to issue a determination within 180 days
of the date a petition for a determination of rate-making principles and
treatment is filed, the rate-making principles and treatment proposed by
the petitioning public utility will be deemed to have been approved by
the commission and shall be binding for rate-making purposes during the
useful life of the transmission facility.

      (5) If the commission does not have jurisdiction to set wholesale rates
for use of the transmission facility the commission need not consider rate-
making principles and treatment for wholesale rates for the transmission
facility.

      (c)  (1) Prior to undertaking the construction of, or participation in,
a generating facility or prior to entering into a new contract, a public
utility may file with the commission a petition for a determination of the
rate-making principles and treatment, as proposed by the public utility,
that will apply to recovery in wholesale or retail rates of the cost to be
incurred by the public utility to acquire such public utility's stake in the
generating facility during the expected useful life of the generating facility
or the recovery in rates of the contract during the term thereof.

      (2) Any utility seeking a determination of rate-making principles and
treatment under subsection (c)(1) shall as a part of its filing submit the
following information: (A) A description of the public utility's conserva-
tion measures; (B) a description of the public utility's demand side man-
agement efforts; (C) the public utility's ten-year generation and load fore-
casts; and (D) a description of all power supply alternatives considered
to meet the public utility's load requirements.

      (3) In considering the public utility's supply plan, the commission
may consider if the public utility issued a request for proposal from a
wide audience of participants willing and able to meet the needs identi-
fied under the public utility's generating supply plan, and if the plan
selected by the public utility is reasonable, reliable and efficient.

      (4) The commission shall issue an order setting forth the rate-making
principles and treatment that will be applicable to the public utility's stake
in the generating facility or to the contract in all rate-making proceedings
on and after such time as the generating facility is placed in service or
the term of the contract commences.

      (5) The commission in all proceedings in which the cost of the public
utility's stake in the generating facility or the cost of the purchased power
under the contract is considered shall utilize the rate-making principles
and treatment applicable to the generating facility or contract.

      (6) If the commission fails to issue a determination within 180 days
of the date a petition for a determination of rate-making principles and
treatment is filed, the rate-making principles and treatment proposed by
the petitioning public utility will be deemed to have been approved by
the commission and shall be binding for rate-making purposes during the
useful life of the generating facility or during the term of the contract.

      (d) The public utility shall have one year from the effective date of
the determination of the commission to notify the commission whether
it will construct or participate in the construction of the generating or
transmission facility or whether it will perform under terms of the con-
tract.

      (e) If the public utility notifies the commission within the one-year
period that the public utility will not construct or participate in the con-
struction of the generating or transmission facility or that it will not per-
form under the terms of the contract, then the determination of rate-
making principles pursuant to subsection (b) or (c) shall be of no further
force or effect, shall have no precedential value in any subsequent pro-
ceeding, and there shall be no adverse presumption applied in any future
proceeding as a result of such notification.

      (f) If the public utility notifies the commission under subsection (d)
that it will construct or participate in a generating facility or purchase
power contract and subsequently does not, it will be required to notify
the commission immediately and file an alternative supply plan with the
commission per subsection (c) within 90 days.

      Sec.  2. Section 1 of 2003 Substitute for Senate Bill No. 104 is hereby
repealed.

      Sec.  3. This act shall take effect and be in force from and after its
publication in the statute book.

Approved May 19, 2003.
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