Electricity Rate Amendments

3
54-7-13.5
0
Electricity Rate Amendments
2026 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Carl R. Albrecht
Senate Sponsor: Evan J. Vickers
LONG TITLE
General Description:
This bill modifies provisions related to energy balancing account cost recovery for
electrical corporations.
Highlighted Provisions:
This bill:
establishes an energy cost baseline to be set by the Public Service Commission in general
rate cases;
creates a symmetrical sharing band requiring electrical corporations to share with
customers 80% of variances between actual costs and the energy cost baseline for costs
incurred on or after January 1, 2026; and
maintains 100% cost recovery for energy balancing account costs incurred before January
1, 2026.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
54-7-13.5
, as last amended by Laws of Utah 2021, Chapter 249
Be it enacted by the Legislature of the state of Utah:
Section 1. Section
54-7-13.5
is amended to read:
54-7-13.5
. Energy balancing accounts.
(1)
As used in this section:
(a)
"Base rates" means the same as that term is defined in Subsection
54-7-12(1)
.
(b)
"Energy balancing account" means an electrical corporation account for some or all
components of the electrical corporation's incurred actual power costs, including:
(i)
(A)
fuel;
(B)
purchased power; and
(C)
wheeling expenses; and
(ii)
the sum of the power costs described in Subsection
(1)(b)(i)
less wholesale
revenue.
(c)
"Energy cost baseline" means the forecast of energy balancing account costs
established by the commission in a general rate case based on an electrical
corporation's proposal.
(c)
(d)
"Gas balancing account" means a gas corporation account to recover on a
dollar-for-dollar basis, purchased gas costs, and gas cost-related expenses.
(e)
"Variance" means the difference between the electrical corporation's actual prudently
incurred energy balancing account costs and the energy cost baseline.
(2)
(a)
The commission may authorize an electrical corporation to establish an energy
balancing account.
(b)
An energy balancing account shall become effective upon a commission finding that
the energy balancing account is:
(i)
in the public interest;
(ii)
for prudently-incurred costs; and
(iii)
implemented at the conclusion of a general rate case.
(c)
An electrical corporation:
(i)
may, with approval from the commission, recover costs under this section through:
(A)
base rates;
(B)
contract rates;
(C)
surcredits; or
(D)
surcharges;
and
(ii)
shall file a reconciliation of the energy balancing account with the commission at
least annually with actual costs and revenue incurred by the electrical corporation
.
; and
(iii)
shall submit a proposed energy cost baseline to the commission in each general
rate case.
(d)
The commission shall review and establish the energy cost baseline based on the
electrical corporation's proposal described in Subsection
(2)(c)(iii)
.
(d)
For an electrical corporation with an energy balancing account established before
January 1, 2016, the commission shall allow an electrical corporation to recover
100% of the electrical corporation's prudently incurred costs as determined and
approved by the commission under this section.
(e)
(i)
If the variance for costs incurred before January 1, 2026, results in actual costs
exceeding the energy cost baseline, the commission shall allow an electrical
corporation to recover 100% of the electrical corporation's prudently incurred
costs as determined and approved by the commission under this section.
(ii)
If the variance for costs incurred on or after January 1, 2026, results in actual
costs exceeding the energy cost baseline, the commission shall allow an electrical
corporation to recover from customers 80% of the variance of the electrical
corporation's prudently incurred costs as determined and approved by the
commission under this section.
(iii)
If the variance for costs incurred on or after January 1, 2026, results in actual
costs below the energy cost baseline, an electrical corporation shall return to
customers 80% of the variance.
(e)
(f)
Except in the case of an interim rate request made in accordance with Subsection
(2)(k)
(2)(l)
, an energy balancing account may not alter:
(i)
the standard for cost recovery; or
(ii)
the electrical corporation's burden of proof.
(f)
(g)
The collection method described in Subsection
(2)(c)(i)
shall:
(i)
apply to the appropriate billing components in base rates; and
(ii)
be incorporated into base rates in an appropriate commission proceeding.
(g)
(h)
The collection of costs related to an energy balancing account from customers
paying contract rates shall be governed by the terms of the contract.
(h)
(i)
Revenue collected in excess of prudently incurred actual costs shall:
(i)
be allocated according to the sharing percentages described in Subsection
(2)(e)
;
(ii)
be refunded as a bill surcredit to an electrical corporation's customers over a
period specified by the commission; and
(ii)
(iii)
include a carrying charge.
(i)
(j)
Prudently incurred actual costs in excess of revenue collected shall:
(i)
be allocated according to the sharing percentages described in Subsection
(2)(e)
;
(ii)
be recovered as a bill surcharge over a period to be specified by the commission;
and
(ii)
(iii)
include a carrying charge.
(j)
(k)
The carrying charge applied to the balance in an energy balancing account shall
be:
(i)
determined by the commission; and
(ii)
symmetrical for over or under collections.
(k)
(l)
(i)
The commission may consider an interim rate request made as a part of an
electrical corporation's filing an energy balancing account.
(ii)
The commission, on the commission's own initiative or in response to an interim
rate request by an electrical corporation or another party:
(A)
shall hold a hearing on an interim rate; and
(B)
if the electrical corporation or the other party makes the showing required by
Subsection
(2)(k)(iii)
(2)(l)(iii)
, may allow any rate increase or decrease, or a
reasonable part of the rate increase or decrease, to take effect on an interim
basis, subject to the commission's right to order a refund or surcharge.
(iii)
The electrical corporation or the other party shall make an adequate prima facie
showing that:
(A)
the proposed interim rate appears consistent with prior years' filings; and
(B)
the interim rate requested is more likely to reflect actual power costs than the
current base rates.
(l)
(m)
The commission may issue a final order establishing and fixing the electrical
corporation's energy balancing account:
(i)
after a hearing; and
(ii)
before the expiration of 300 days after the day on which the electrical corporation
files a complete filing.
(m)
(n)
(i)
If the commission in the commission's final decision on an electrical
corporation's energy balancing account finds that the interim rate ordered under
Subsection
(2)(k)(ii)

(2)(l)(ii)
exceeds the rate finally determined in the energy
balancing account, the commission shall order the electrical corporation to refund
the excess revenue generated by the interim rate to customers.
(ii)
If the commission in the commission's final decision on an electrical corporation's
energy balancing account finds that the interim rate ordered under Subsection
(2)(k)(ii)
(2)(l)(ii)
is lower than the rate finally determined in the energy balancing
account, the commission shall order the electrical corporation to charge a
surcharge to customers to recover the revenue not recovered during that period.
(3)
(a)
The commission may:
(i)
establish a gas balancing account for a gas corporation; and
(ii)
set forth procedures for a gas corporation's gas balancing account in the gas
corporation's commission-approved tariff.
(b)
A gas balancing account may not alter:
(i)
the standard of cost recovery; or
(ii)
the gas corporation's burden of proof.
(4)
(a)
All allowed costs and revenue associated with an energy balancing account or gas
balancing account shall remain in the respective balancing account until charged or
refunded to customers.
(b)
The balance of an energy balancing account or gas balancing account may not be:
(i)
transferred by the electrical corporation or gas corporation; or
(ii)
used by the commission to impute earnings or losses to the electrical corporation
or gas corporation.
(c)
An energy balancing account or gas balancing account that is formed and maintained
in accordance with this section does not constitute impermissible retroactive
ratemaking or single-issue ratemaking.
(5)
This section does not create a presumption for or against approval of an energy
balancing account.
(6)
(a)
An electrical corporation that has established an energy balancing account under
this section shall report to the Public Utilities, Energy, and Technology Interim
Committee before December 1 of each even numbered year.
(b)
The report required in Subsection
(6)(a)
shall provide information regarding:
(i)
the continued 100% recovery of the electrical corporation's prudently incurred
costs related to the energy balancing account; and
the application of the sharing
percentages described in Subsection
(2)(e)
to the electrical corporation's energy
balancing account costs; and
(ii)
any determination by the commission of costs not prudently incurred.
Section 2.
Effective Date.
This bill takes effect on
May 6, 2026
.
1-12-26 11:28 AM