Bill > HB2032

This bill allows the state corporation commission to adjust an electric utility's return on equity (the percentage of profit a utility is allowed to earn) based on changes in the utility's all-in average retail rate (the total cost of electricity for customers, including all charges, fees, taxes, and surcharges). Specifically, if an electric utility can demonstrate that its all-in average retail rate has not increased more than 1% in the preceding calendar year, the commission may increase the utility's return on equity by up to 0.5% above its current authorized level for a 12-month period. Conversely, if the commission finds that a utility's all-in average retail rate has increased more than 1% in the preceding calendar year, the commission may decrease the utility's return on equity by up to 0.5% below its current authorized level, also for a 12-month period. The commission is required to adjust the utility's retail rates to reflect these changes. The goal of this bill appears to be providing a mechanism to incentivize electric utilities to keep rate increases low and to provide some regulatory flexibility in managing utility pricing and profitability.