K.S.A. § 66-1293 — KS Code / Chapter 66 / Article 12 / Section 66-1293
66-1293 - Electric public utility deferral of depreciation to a regulatory asset; qualifying rate base additions; authorized rate of return; recovery of regulatory asset balance; expiration of authority.
Status: in_force

66-1293. Electric public utility deferral of depreciation to a regulatory asset; qualifying rate base additions; authorized rate of return; recovery of regulatory asset balance; expiration of authority. (a) As used in this section:

(1) "Commission" means the state corporation commission.

(2) "Public utility" means the same as defined in K.S.A. 66-104, and amendments thereto.

(3) "Qualifying electric plant" means all rate base additions by an electric public utility. "Qualifying electric plant" does not include transmission facilities or new electric generating units.

(4) "Rate base cutoff date" means the date rate base additions are accounted for in a general rate proceeding. In the absence of a commission order that specifies the rate base cutoff date, "rate base cutoff date" means the date as reflected in any jointly proposed procedural schedule submitted by the parties in the applicable general rate proceeding, or the date that is otherwise agreed to by such parties.

(5) "Weighted average cost of capital" means the return on rate base used to determine the revenue requirement or that was approved to be used for regulatory accounting purposes in the public utility's most recently ordered return on rate base in a general rate proceeding.

(b) Notwithstanding any other provision of law except K.S.A. 66-1239(b)(5), and amendments thereto, commencing on July 1, 2024, a public utility shall defer to a regulatory asset 90% of all depreciation expense and return associated with all qualifying electric plants recorded to plant-in-service on the utility's books if the public utility has provided notice to the commission of the public utility's election to make such deferrals pursuant to subsection (f)(1). Such deferral shall begin on July 1, 2024, if the public utility has notified the commission of the public utility's election to make such deferral by such date or shall begin on the date that such election is made if such election is made after July 1, 2024. Except as provided in subsection (c), subsection (f)(2) and the provisions of K.S.A. 2025 Supp. 66-1294, and amendments thereto, in each general rate proceeding concluded after August 28, 2018, the balance of the regulatory asset as of the rate base cutoff date shall be included in the public utility's rate base without any offset, reduction or adjustment based upon consideration of any other factor with the regulatory asset balance arising from deferrals associated with qualifying electric plants placed in service after the rate base cutoff date to be included in rate base in the next general rate proceeding.

(c) The regulatory asset balances arising under this section shall be adjusted to reflect any prudence disallowances ordered by the commission. This section shall not be construed to affect existing law with respect to the burdens of production and persuasion in general rate proceedings for rate base additions.

(d) Parts of regulatory asset balances created under this section that are not included in rate base shall include carrying costs at the public utility's weighted average cost of capital, plus applicable federal, state and local income or excise taxes. Regulatory asset balances arising under this section that are included in rate base shall be recovered in rates through a 20-year amortization beginning on the date new rates reflecting such amortization take effect.

(e) (1) Depreciation expense deferred under this section shall account for any qualifying electric plant placed into service less retirements of the plant replaced by such qualifying electric plant.

(2) Return deferred under this section shall be determined using the weighted average cost of capital applied to the change in plant-related rate base caused by the qualifying electric plant, plus applicable federal, state and local income or excise taxes. In determining the return deferred, the public utility shall account for changes in all plant-related accumulated deferred income taxes and changes in accumulated depreciation, excluding retirements.

(f) (1) This section shall only apply to any public utility that has elected to make the deferrals for which this section provides and filed a notice with the commission of such election.

(2) A public utility that makes such election shall be authorized to make the deferrals authorized by this section until December 31, 2030, except that, upon application by such public utility, the commission may authorize the public utility to continue to make the deferrals authorized by this section until December 31, 2036. Any such application shall be filed with the commission on or before December 31, 2028. The commission shall issue a determination on an application filed pursuant to this subsection within 240 days of the date that such application is filed. If requested by the public utility, an intervenor in the application docket or commission staff, the commission shall hold a hearing on such application. When making a determination upon such application, the commission may consider factors that the commission deems just and reasonable and condition the commission's determination on any factors that are relevant to the deferrals authorized pursuant to this section. If the commission denies the public utility's application, such denial shall only act to prohibit the public utility from making such deferrals after December 31, 2030, and shall not otherwise affect or terminate any deferral that is authorized to be made pursuant to this section or any regulatory or ratemaking treatment of the regulatory assets arising from such deferrals.

(g) The provisions of this section shall not be construed to restrict or limit the authority of the commission to authorize a public utility to use deferral accounting treatment for any rate base addition, such as a new electric generating unit, that is not considered a qualifying electric plant pursuant to this section.