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Minutes for SB396 - Committee on Utilities
Short Title
Prohibiting electric utilities from including amounts in excess of applicable tax rates in electric rates.
Minutes Content for Wed, Feb 14, 2018
Chairman Olson opened the hearing on SB396 - Prohibiting electric utilities from including amounts in excess of applicable tax rates in electric rates. He called for an Office of Revisor of Statutes overview of the bill. Matt Sterling provided the overview. (Attachment 1)
Proponent Martin Rodriguez declared that the Americans for Prosperity (AFP) has an obligation to address implications of events such as the Tax Cuts and Jobs Act of 2017 on behalf of utility customers. (Attachment 2)
Proponent Jim Zakoura stated that this bill would require 100% of over-collections of income tax expense be returned within 150 days of a tax change as opposed to offsetting future utility investments or retroactively supplementing shareholder returns. (Attachment 3)
Opponent Chuck Caisley claimed that this legislation is unnecessarily creating a law for a situation that happens infrequently and for a process that already compensates utility customers fairly.
Written Only Opposition Testimony:
Mick Urban, Kansas Gas Service (Attachment 5)
Steven Cowen, Black Hills Energy (Attachment 6)
Neutral Justin Grady offered an amendment to clarify the intent of the bill to ensure that it applies to all utility rates and charges that are covered under K.S.A. 66-117. (Attachment 7)
Committee questions and comments explored the following issues:
Due to the concerns regarding the multi-year process of returning the benefits of the 1986 tax reform, the committee was given assurance by Mr. Grady that it currently possessed the tools to execute the tax relief on a time-frame of several months versus several years in respect to the Tax Cuts and Jobs Act.
See attached KCC response to questions from Chairman Olson on behalf of the committee. (Attachment 8)
Seeing no more testimony Chairman Olson closed the hearing on the bill.
