GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2015

 

 

SESSION LAW 2015-134

HOUSE BILL 356

 

 

AN ACT to clarify the cap on the utilities regulatory fee reserve, to set the regulatory fee in statute, and to allow the commission to raise or lower the fee.

 

The General Assembly of North Carolina enacts:

 

SECTION 1.(a)  G.S. 62‑302(a) reads as rewritten:

"(a)       Fee Imposed. – It is the policy of the State of North Carolina to provide fair regulation of public utilities in the interest of the public, as provided in G.S. 62‑2. The cost of regulating public utilities is a burden incident to the privilege of operating as a public utility. Therefore, for the purpose of defraying the cost of regulating public utilities, every public utility subject to the jurisdiction of the Commission shall pay a quarterly regulatory fee, in addition to all other fees and taxes, as provided in this section. The fees collected shall be used only to pay the expenses of the Commission and the Public Staff in regulating public utilities in the interest of the public.public and to maintain a reasonable margin for a reserve fund. The amount of the reserve may not exceed one‑half of the cost of operating the Commission and the Public Staff as reflected in the certified budget for the previous fiscal year.

It is also the policy of the State to provide limited oversight of certain electric membership corporations as provided in G.S. 62‑53. Therefore, for the purpose of defraying the cost of providing the oversight authorized by G.S. 62‑53 and G.S. 117‑18.1, each fiscal year each electric membership corporation whose principal purpose is to furnish or cause to be furnished bulk electric supplies at wholesale as provided in G.S. 117‑16 shall pay an annual fee as provided in this section.

…."

SECTION 1.(b)  Subdivisions 14.19(e1)(4), (5), (6), and (10) of S.L. 2009‑451 are repealed.

SECTION 2.  G.S. 62‑302, as amended by Section 1.(a) of this act, reads as rewritten:

"(a)       Fee Imposed. – It is the policy of the State of North Carolina to provide fair regulation of public utilities in the interest of the public, as provided in G.S. 62‑2. The cost of regulating public utilities is a burden incident to the privilege of operating as a public utility. Therefore, for the purpose of defraying the cost of regulating public utilities, every public utility subject to the jurisdiction of the Commission shall pay a quarterly regulatory fee, in addition to all other fees and taxes, as provided in this section. The fees collected shall be used only to pay the expenses of the Commission and the Public Staff in regulating public utilities in the interest of the public and to maintain a reasonable margin for a reserve fund. The amount of the reserve may not exceed one‑half of the cost of operating the Commission and the Public Staff as reflected in the certified budget for the previous fiscal year.

It is also the policy of the State to provide limited oversight of certain electric membership corporations as provided in G.S. 62‑53. Therefore, for the purpose of defraying the cost of providing the oversight authorized by G.S. 62‑53 and G.S. 117‑18.1, each fiscal year each electric membership corporation whose principal purpose is to furnish or cause to be furnished bulk electric supplies at wholesale as provided in G.S. 117‑16 shall pay an annual fee as provided in this section.

(b)        Public Utility Rate. –

(1)        Repealed by Session Laws 2000‑140, s. 56, effective July 21, 2000.

(2)        Unless adjusted under subdivision (3) of this subsection, the public utility fee is a percentage of a utility's jurisdictional revenues as follows:

            Noncompetitive jurisdiction revenues                                   0.148%

            Subsection (h) competitive jurisdictional revenues    0.06%

            Subsection (m) competitive jurisdictional revenues   0.05%

For noncompetitive jurisdictional revenues as defined in sub‑subdivision (4)a. of this subsection, the public utility regulatory fee for each fiscal year is the greater of (i) a percentage rate, established by the General Assembly, of each public utility's noncompetitive jurisdictional revenues for each quarter or (ii) six dollars and twenty‑five cents ($6.25) each quarter. For subsection (h) competitive jurisdictional revenues as defined in sub‑subdivision (4)b. of this subsection, and subsection (m) competitive jurisdictional revenues as defined in sub‑subdivision (4)c. of this subsection, the public utility regulatory fee for each fiscal year is a percentage rate established by the General Assembly of each public utility's competitive jurisdictional revenues for each quarter.

When the Commission prepares its budget request for the upcoming fiscal year, the Commission shall propose a percentage rate of the public utility regulatory fee. For fiscal years beginning in an odd‑numbered year, that proposed rate shall be included in the budget message the Governor submits to the General Assembly pursuant to G.S. 143C‑3‑5. For fiscal years beginning in an even‑numbered year, that proposed rate shall be included in a special budget message the Governor shall submit to the General Assembly. The General Assembly shall set the percentage rate of the public utility regulatory fee by law.

The percentage rate may not exceed the amount necessary to generate funds sufficient to defray the estimated cost of the operations of the Commission and the Public Staff for the upcoming fiscal year, including a reasonable margin for a reserve fund. The amount of the reserve may not exceed the estimated cost of operating the Commission and the Public Staff for the upcoming fiscal year. In calculating the amount of the reserve, the General Assembly shall consider all relevant factors that may affect the cost of operating the Commission or the Public Staff or a possible unanticipated increase or decrease in North Carolina jurisdictional revenues.

(3)        In the first half of each calendar year, the Commission shall review the estimated cost of operating the Commission and the Public Staff for the next fiscal year, including a reasonable margin for the reserve fund allowed under this section. In making this determination, the Commission shall consider all relevant factors that may affect the cost of operating the Commission or the Public Staff or a possible unanticipated change in competitive and noncompetitive jurisdictional revenues. If the estimated receipts provided for under this section are less than the estimated cost of operating the Commission and the Public Staff for the next fiscal year, including the reasonable margin for the reserve fund, then If the Commission, the Public Staff, or both experience a revenue shortfall, the Commission shall may implement a temporaryincrease the public utility regulatory fee surcharge on noncompetitive jurisdictional revenues effective for the next fiscal year.to avert the deficiency that would otherwise occur. In no event may the total percentage rate of the public utility regulatory fee on noncompetitive jurisdiction revenues plus any surcharge established by the Commission exceed twenty‑five hundredths percent (0.25%).seventeen and one‑half hundredths of one percent (0.175%). If the estimated receipts provided for under this section are more than the estimated cost of operating the Commission and the Public Staff for the next fiscal year, including the reasonable margin for the reserve fund, then the Commission shall decrease the public utility regulatory fee on noncompetitive  jurisdictional revenues effective for the next fiscal year.

(4)        As used in this section:

a.         "Noncompetitive jurisdictional revenues" means all revenues derived or realized from intrastate tariffs, rates, and charges approved or allowed by the Commission or collected pursuant to Commission order or rule, but not including tap‑on fees or any other form of contributions in aid of construction.

b.         "Subsection (h) competitive jurisdictional revenues" means all revenues derived from retail services provided by local exchange companies and competing local providers that have elected to operate under G.S. 62‑133.5(h).

c.         "Subsection (m) competitive jurisdictional revenues" means all revenues derived from retail services provided by local exchange companies and competing local providers that have elected to operate under G.S. 62‑133.5(m).

(b1)      Electric Membership Corporation Rate. – The electric membership corporation regulatory fee for each fiscal year shall be a dollar amount as established by the General Assembly by law.is two hundred thousand dollars ($200,000).

When the Commission prepares its budget request for the upcoming fiscal year, the Commission shall propose the amount of the electric membership corporation regulatory fee. For fiscal years beginning in an odd‑numbered year, the proposed amount shall be included in the budget message the Governor submits to the General Assembly pursuant to G.S. 143C‑3‑5. For fiscal years beginning in an even‑numbered year, the proposed amount shall be included in a special budget message the Governor shall submit to the General Assembly.

The amount of the electric membership corporation regulatory fee proposed by the Commission may not exceed the amount necessary to defray the estimated cost of the operations of the Commission and the Public Staff for the regulation of the electric membership corporations in the upcoming fiscal year, including a reasonable margin for a reserve fund. The amount of the reserve may not exceed the estimated cost of the Commission and the Public Staff for the regulation of the electric membership corporations for the upcoming fiscal year.

(e)        Recovery of fee increase.Fee changes. – If a utility's regulatory fee obligation is increased,changed, the Commission shall either adjust the utility's rates to reflect the change allow for the recovery of the increased fee obligation, or approve the utility's request for an accounting order allowing deferral of the increase change in the fee obligation."

SECTION 3.  G.S. 62‑302(b)(2), as amended by Section 2 of this act, reads as rewritten:

"(2)      Unless adjusted under subdivision (3) of this subsection, the public utility fee is a percentage of a utility's jurisdictional revenues as follows:

            Noncompetitive jurisdiction revenues                                   0.148%

            Subsection (h) competitive jurisdictional revenues    0.06%0.04%

            Subsection (m) competitive jurisdictional revenues   0.05%0.02%


SECTION 4.  Section 2 is effective July 1, 2015, and applies to jurisdictional revenues earned in each quarter that begins on or after July 1, 2015. Section 3 is effective July 1, 2016, and applies to jurisdictional revenues earned in each quarter that begins on or after July 1, 2016. The remainder of this act is effective when it becomes law.

In the General Assembly read three times and ratified this the 29th day of June, 2015.

 

 

                                                                    s/  Philip E. Berger

                                                                         President Pro Tempore of the Senate

 

 

                                                                    s/  Tim Moore

                                                                         Speaker of the House of Representatives

 

 

                                                                    s/  Pat McCrory

                                                                         Governor

 

 

Approved 11:45 a.m. this 30th day of June, 2015