Mo. Rev. Stat. § 393.150 — MO Code / Chapter 393 / Section 393.150
393.150 Commission may fix rates after hearing — stay increase — burden of proof — ...
Status: in_force

393.150. Commission may fix rates after hearing — stay increase — burden of proof — test year, procedure. — 1. Whenever there shall be filed with the commission by any gas corporation, electrical corporation, water corporation or sewer corporation any schedule stating a new rate or charge, or any new form of contract or agreement, or any new rule, regulation or practice relating to any rate, charge or service or to any general privilege or facility, the commission shall have, and it is hereby given, authority, either upon complaint or upon its own initiative without complaint, at once, and if it so orders without answer or other formal pleading by the interested gas corporation, electrical corporation, water corporation or sewer corporation, but upon reasonable notice, to enter upon a hearing concerning the propriety of such rate, charge, form of contract or agreement, rule, regulation or practice, and pending such hearing and the decision thereon, the commission upon filing with such schedule, and delivering to the gas corporation, electrical corporation, water corporation or sewer corporation affected thereby, a statement in writing of its reasons for such suspension, may suspend the operation of such schedule and defer the use of such rate, charge, form of contract or agreement, rule, regulation or practice, but not for a longer period than one hundred and twenty days beyond the time when such rate, charge, form of contract or agreement, rule, regulation or practice would otherwise go into effect; and after full hearing, whether completed before or after the rate, charge, form of contract or agreement, rule, regulation or practice goes into effect, the commission may make such order in reference to such rate, charge, form of contract or agreement, rule, regulation or practice as would be proper in a proceeding initiated after the rate, charge, form of contract or agreement, rule, regulation or practice had become effective. In any proceeding under this section wherein testimony is prefiled, each party shall be afforded an opportunity to respond to any rebuttal testimony and exhibits of other parties through prefiled testimony.

2. If any such hearing cannot be concluded within the period of suspension, as above stated, the commission may, in its discretion, extend the time of suspension for a further period not exceeding six months, the last day of which period shall be considered the operation of law date. At any hearing involving a rate sought to be increased, the burden of proof to show that the increased rate or proposed increased rate is just and reasonable shall be upon the gas corporation, electrical corporation, water corporation or sewer corporation, and the commission shall give to the hearing and decision of such questions preference over all other questions pending before it and decide the same as speedily as possible.

3. (1) Beginning July 1, 2026, the test year for proceedings under this section shall, if requested by a gas corporation, water corporation, or sewer corporation, be a future year consisting of the first twelve full calendar months after the operation of law date determined in subsections 1 and 2 of this section for schedules stating new base rates filed by a gas corporation, water corporation, or sewer corporation under this section, unless the commission makes a determination that using a future test year under this section is detrimental to the public interest. For ratemaking purposes, the average of the projected month-end total rate base amount during the future test year shall be used to establish new base rates. Unless otherwise ordered by the commission, new base rates shall not go into effect before the first day of the future test year.

(2) With respect to gas corporations, water corporations, or sewer corporations that elect to utilize a future test year and notwithstanding section 393.270 to the contrary, within forty-five days of the end of the future test year, such gas corporation, water corporation, or sewer corporation shall update its base rates that were approved by the commission in its report and order issued under subsections 1 and 2 of this section to reflect the total rate base, annualized depreciation expense, income tax expense, payroll expense, employee benefits (other than pensions and other post-retirement benefits), and rate case expense at the end of the future test year. The total ending rate base and expense items reflected in this update shall not be greater than the total ending rate base and expense items approved by the commission in its report and order establishing base rates. The commission and parties to the case shall have sixty days to review the updated information provided by a gas corporation, water corporation, or sewer corporation, unless any party who was a party to the rate case files a request for a hearing at which point the commission shall suspend the filed tariffs and order a procedural schedule. The commission shall order the corporation to file new tariff sheets that reflect any update approved by the commission.

4. A gas corporation, water corporation, or sewer corporation that requests a test year under subsection 3 of this section shall not recover the costs of any plant investments made during the test year period under any of the mechanisms provided for in section * 393.1000 , 393.1003 , 393.1006 , 393.1009 , 393.1012 , 393.1015 , 393.1500 , 393.1503 , 393.1506 , or 393.1509 .

5. For a gas corporation, water corporation, or sewer corporation that elected to use a future test year, a reconciliation of the rate base at the end of the future test year shall be provided to the commission within forty-five days of the end of the future test year. If the actual average month-end total rate base amount during the future test year is less than the average month-end total rate base amount used to set base rates in the prior general rate proceeding under subsections 1 and 2 of this section, and notwithstanding section 393.270 to the contrary, the portion of the annual revenue requirement comprising the average total rate base difference shall be returned to customers. The revenue requirement shall be calculated using rate base, depreciation expense, income tax expense, and the pretax rate of return from the prior general rate proceeding under subsections 1 and 2 of this section. The difference in revenue requirement shall be placed into a regulatory liability to be returned to customers in the next general rate proceeding with such regulatory liability to accrue carrying costs at the utility's weighted average cost of capital.

6. The commission may take into account any change in business risk to the corporation resulting from implementation of the adjustment mechanism in setting the corporation's allowed return in any rate proceeding, in addition to any other changes in business risk experienced by the corporation.

7. For a gas corporation, water corporation, or sewer corporation that elected to use a future test year, a reconciliation of depreciation expense, income tax expense, payroll expense, employee benefits except for pensions and other postretirement benefits, and rate case expense incurred during the future test year shall be provided to the commission within forty-five days of the end of the future test year. If the actual amounts for these expenses are less than the amounts used to calculate the revenue requirement in the prior general rate proceeding under subsections 1 and 2 of this section, and notwithstanding section 393.270 to the contrary, the differences shall be returned to customers. The difference in revenue requirement shall be placed into a regulatory liability to be returned to customers in the next general rate case with such regulatory liability to accrue carrying costs at the utility's weighted average cost of capital. Expense differences to be returned to customers resulting from this reconciliation shall not be used to offset additional capital spending in the reconciliation described in subsection 5 of this section.

8. The commission shall promulgate rules to implement the provisions of this section no later than July 1, 2027. Such rules shall include a procedure allowing any party to a rate proceeding that utilizes a future test year as provided in subsection 3 of this section to undertake a meaningful review of the update provided by the gas corporation, water corporation, or sewer corporation under subsection 3 of this section and the reconciliations provided by the gas corporation, water corporation, or sewer corporation under subsections 5 and 7 of this section, and to argue for the disallowance of any costs included in the total rate base, depreciation expense, income tax expense, payroll expense, employee benefits (other than pensions and other postretirement benefits), and rate case expense at the end of the future test year that differs from the projected values upon which the commission relied in issuing its report and order to approve new base rates under subsections 1 and 2 of this section. Any rule or portion of a rule, as that term is defined in section 536.010 , that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028 . This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2025, shall be invalid and void.

9. For purposes of this section, the following terms shall mean:

(1) "Base rates" , rates or charges for public utility service other than rates or charges under any rate adjustment mechanism including, but not limited to, those approved under the provisions of sections 386.266 , 393.1000 , 393.1009 , 393.1030 , 393.1075 , and 393.1500 ;

(2) "Revenue requirement" , the amount of retail revenues from base rates charged to retail customers for public utility service needed for a public utility to recover its cost to provide utility service including reasonable and necessary expenses, prudent investments, and the cost of capital.

(RSMo 1939 § 5647, A. 1949 H.B. 2165, A.L. 1967 p. 578, A.L. 2025 S.B. 4) Prior revisions: 1929 § 5191; 1919 § 10479 *Word "sections" appears in original rolls. (1976) Public service commission has power in proper case to grant interim rate increases, which power is implied in the "file and suspend" provision of statute. State ex rel. Laclede Gas Co. v. Public Serv. Comm'n (A.), 535 S.W.2d 561.