Subject: Agriculture and Animals; Energy; Natural Resources Department; Public Service Commission

Bill Summary: This proposal enacts several provisions relating to energy and animals.

ESTIMATED NET EFFECT ON GENERAL REVENUE FUND
FUND AFFECTED	FY 2011	FY 2012	FY 2013
General Revenue	$1,130,672	$1,225,672	$1,225,672

Total Estimated Net Effect on General Revenue Fund	$1,130,672	$1,225,672	$1,225,672

ESTIMATED NET EFFECT ON OTHER STATE FUNDS
FUND AFFECTED	FY 2011	FY 2012	FY 2013
Office of Public Counsel Fund*	$0	$0	$0
Public Service Commission Fund*	$0	$0	$0
Animal Care Reserve Fund	$95,000	$95,000	$95,000
Total Estimated Net Effect on Other State Funds*	$95,000	$95,000	$95,000

* Offsetting Income and Cost for Public Service Commission Fund and Office of Public Counsel Fund

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 2011	FY 2012	FY 2013

Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)
FUND AFFECTED	FY 2011	FY 2012	FY 2013
General Revenue	(12) FTE	(12) FTE	(12) FTE
Office of Public Counsel	Up to 20 FTE	Up to 20 FTE	Up to 20 FTE
Public Service Commission	Up to 26 FTE	Up to 26 FTE	Up to 26 FTE
Total Estimated Net Effect on FTE	Up to 34 FTE	Up to 34 FTE	Up to 34 FTE

☒ Estimated Total Net Effect on All funds expected to exceed $100,000 savings or (cost).

☒ Estimated Net Effect on General Revenue Fund expected to exceed $100,000 (cost).

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 2011	FY 2012	FY 2013
Local Government

Officials from the Department of Corrections, Department of Mental Health, Department of Insurance, Financial Institutions and Professional Registration, Department of Revenue, Department of Health and Human Services, Department of Elementary and Secondary Education, Department of Social Services, Office of Administration - Administrative Hearing Commission, Missouri Veterans Commission, State Tax Commission, Department of Conservation, and Office of State Treasurer assumed no fiscal impact to their respective agencies resulting from this proposal.

Officials from the Office of State Courts Administrator state this proposal will have no fiscal impact on the Courts.

Officials from the Missouri Senate state this proposal will either have no fiscal impact as it relates to their agency or minimal costs which can be absorbed by present appropriations.

According to officials from the Office of Secretary of State (SOS), many bills considered by the General Assembly include provisions allowing or requiring agencies to submit rules and regulations to implement the proposal. The SOS is provided with core funding to handle a certain amount of normal activity resulting from each year’s legislative session. The fiscal impact for this fiscal note to the SOS for Administrative Rules is less than $2,500.

Oversight assumes the SOS could absorb the costs of printing and distributing regulations related to this proposal. If multiple bills pass which require the printing and distribution of regulations at substantial costs, the SOS could request funding through the appropriation process. Any decisions to raise fees to defray costs would likely be made in subsequent fiscal years.

Officials from the Office of Administration - Division of Budget and Planning (BAP) assume there should be no added cost to BAP as a result of this proposed legislation.

Officials from the Office of Administration - Division of Purchasing and Materials Management had no response regarding impact to this version of the proposal.

Officials from the Department of Agriculture (AGR) assumed this proposal would generate additional funding for the Animal Care reserve Fund by requiring the animal shelters to pay the ASSUMPTION (continued)

$100 license fee plus the per capita fee of $1 for every animal sold, traded, bartered, brokered, adopted out or given away, up to a maximum of five hundred dollars ($500).

Number of estimated additional facilities required to pay the licensing fee by this proposed legislation: 336 x $100 = $33,600.

Number of estimated animals sold, traded, bartered, brokered, adopted out or given away through the additional facilities required to pay the licensing fee by this proposed legislation: 61,400 x $1 = $61,400. Per capita figures reported to the Missouri Department of Agriculture indicate that the shelters would have to pay between $60,000 and $65,000 for dogs adopted out under the $500 cap.

Estimated additional funds to be deposited in the Animal Care Reserve Fund = $95,000.

§386.715 - Assessment-based funding mechanism for the Office of Public Counsel

In similar legislation (HB 2408 - FN 5470-01), officials from the Department of Economic Development (DED) stated there is no overall impact because of the savings to General Revenue and the impact to the new fund. The budgeted amount for the Office of Public Counsel (OPC) for FY 2010 is $880,809 ($657,634 personal service and $223,175 in expense and equipment) for 12.0 FTE. DED stated fringe benefits should also be added on to these appropriated amounts to arrive at a complete cost for OPC.

This proposal has an emergency clause, so Oversight assumes an assessment could be rendered on July 1, 2010 and payments could be made into the new fund in FY 2011.

According to officials from the Office of Public Counsel (OPC) this proposed legislation would create significant additional responsibilities for the OPC staff requiring the addition of 8 FTEs to participate in additional rate case procedures.

This proposal will create additional regulated electric utility rate increases outside the approval of the Missouri Public Service Commission and will cause more frequent regulated utility rate

This proposal would create significant additional duties and responsibilities. These additional duties and responsibilities include, but may not be limited to; participating in increased proceedings before the PSC to establish rates of regulated utilities, and increase in necessary staffing levels to meet compressed time frame for proceedings before the PSC.

According to officials from the Public Service Commission (PSC), to process rate cases as required by §393.150, the following FTE will be required:

Two additional Regulatory Law Judges will be needed to process the rate cases. Several rate cases are always pending at the Commission. The compressed time line will require current judges to work exclusively on an assigned rate case while other judges process other cases. Law Judges must draft proposed and final Commission orders and provide Commission with sound legal analysis and well-drafted documents in a timely manner. They aid the Commissioners' review of the record, pleadings and applicable law in docketed cases before the Commission's discussion of issues presented, as well as advise the Commission on other legal questions when requested. Judges conduct hearings, rule on the admission of evidence, and other matters.

The Staff Counsel's office will need to have two attorneys dedicated full time to each rate case, one primarily for discovery and the other primarily to process and oversee the case. Several rate cases are always pending at the PSC, currently there are four.

Assuming testimony deadlines are the same or shorter, we would still need at least three additional attorneys in the case part time to process it. Note there should be issues in the future that will require resources due to their novelty as well as their existence-fuel adjustment clauses, environmental recovery mechanisms, energy efficiency, renewable energy, etc.

Staff attorneys perform legal research and prepare briefs, pleadings, and other documents, memoranda and orders as appropriate before the Commission and before all levels of courts and

federal agencies. They assist and advise agency staff in preparation of evidence, comments, and argument in all cases heard before the Commission, courts, and other regulatory bodies in which the Commission may be a party.

Utility Services will require a consultant for a 2 year period ($100,000 per year) to perform Staff

rate case functions (e.g. rate of return studies, audits, depreciation analysis) while existing staff transition into surveillance mode to monitor utility results to be more informed at the time a ASSUMPTION (continued)

Utility Operations staff considers the following requested FTE to be the minimum new FTE required to fulfill the requirements of the legislation. Existing Operation staff plays a key role in various components of completing rate cases at the current schedule of 11 months. The proposed legislation basically reduces the time line in half, so Operations staff will need to be increased significantly to complete the same work in the shorter time period. Making the task even more difficult is the possibility of multiple rate cases being filed at the same time. For instance, at this time, there are six pending rate cases for gas, electric and water companies, all of which have very close time lines. Similarly, while the Water & Sewer Department only has one company that typically files under the 11-month rate schedule, they also simultaneously process multiple small company rate cases, which proceed on a more compressed schedule.

Regulatory Economist I/II (Economic Analysis) - Responsible for economic work in the analysis of rate cases. These positions are responsible for completing class cost of service studies to estimate the impact of rate increases on customer classes. These positions would also evaluate costs included in cost recovery mechanisms such as the fuel adjustment clause and environmental cost recovery mechanisms. These positions would serve as expert witnesses in cases before the commission.

Regulatory Economist I/II (Energy Resource Analysis) - Responsible for economic work in the analysis of rate cases. This position is responsible for analyzing demand-side management programs and cost recovery associated with this analysis. This position would also evaluate costs included in fuel adjustment clause. This position would serve as an expert witness in cases

Regulatory Economist III - Responsible for economic work in the analysis of rate cases. This position is also responsible for completing class cost of service studies to estimate the impact of rate increases on customer classes, calculating weather normalization and customer class annualization of rates. This person would attend local public hearings and may serve as an expert witness in cases before the commission.

Utility Engineering Specialist III/Utility Engineer I - Responsible for auditing the engineering aspects of facilities included in rate base, completing load analysis and calculating fuel runs. These positions monitor utility vegetation management and infrastructure reliability. These positions would regularly serve as expert witnesses in cases before the commission.

Utility Regulatory Auditor I/II (Tariff/Rate Design) - Responsible for analyzing and evaluating complex rate design proposals and tariffs. Works with Regulatory Economists in developing rate design, annualizing rates and weather normalization. Completes analyses related to low income programs. Responsible for analyzing financial information related to revised rate cases. This person may attend local public hearings. This person would regularly serve as an expert witness in cases before the commission.

Utility Regulatory Auditor I/II (Water & Sewer Department) - Responsible for analyzing and evaluating complex rate design proposals and tariffs. Works with Rate and Tariff Examiners in developing rate design. Responsible for analyzing financial information related to revised rate cases. This person would attend local public hearings and would regularly serve as an expert witness in cases before the commission.

Rate and Tariff Examiner III - Responsible for analyzing and evaluating complex issues related to proposed rates and tariffs. Work involves assisting Regulatory Economists and Auditor in the development of Staff positions related to the revised rates, and preparation of material which may be used as testimony in PSC hearings. Attends local public hearings and assists consumers with questions related to rates and service quality issues. This person may also serve as an expert witness in cases before the commission.

Rate and Tariff Examiner I/II (Tariff and Rate Design) - Responsible for analyzing and evaluating issues related to proposed rates and tariffs. Assists Rate and Tariff Examiner III in gathering data to be used in the development of Staff positions related to the revised rates. This person may also serve as an expert witness in cases before the commission.

Rate and Tariff Examiner I/II (Water & Sewer) - Responsible for analyzing and evaluating issues related to proposed rates and tariffs. Assists other Water & Sewer Department FTE in gathering ASSUMPTION (continued)

data to develop staff positions related to revised rates. Reviews consumer comments related to rate issues and service quality issues. This person may also serve as an expert witness in cases before the commission.

Accountant I - Responsible for handling the increase in the number of purchasing/payables and monthly expense report work related to the large staff increase.

Office Supplies, Telephone Service, Training, Publications/Subscriptions and estimated Travel Expenses ($3,888/year x 26 FTE)

Office Space Rental based on 200 sq. ft x $10.20/per sq. ft./year x 26 FTE = $53,040/year

Oversight assumes the revenue generated from the proposal will provide the resources needed to administer the program and the net estimated effect of the extension would be $0.

Officials from the Little Blue Valley Sewer District state this proposal does not have fiscal impact on their districts.

No direct fiscal impact to small businesses would be expected as a result of this proposal.

§267.810 - Establishes the “Missouri Animal Care Advisory Committee” that shall have the authority to review and make recommendations on the welfare of poultry, livestock, and licensed dog breeding facilities on this state.

§273.327 - Removes the exemption for animal shelters from the required annual licensure fee.

§386.715 - This proposal creates an assessment-based funding mechanism for the Office of the Public Counsel within the Department of Economic Development similar to that currently utilized by the Missouri Public Service Commission. Prior to the beginning of each fiscal year, the counsel will present to the commission its estimated expenses attributable to the regulation of public utilities under §386.020, RSMo.

The amount so allocated to telephone corporations shall not exceed ten percent of the total estimated expenses directly attributable to the OPC responsibilities under §386.700 to 386.710.

The total amount of the counsel's assessment cannot exceed two hundredths of 1% of the total gross intrastate operating revenues of all regulated utilities. In order to allow these calculations, every regulated utility must file a statement of its gross intrastate operating revenues on or before March 31 with the commission.

The assessments rendered by the counsel will be made available to the utilities on or before July 1 with the payment due either on or before July 15 or in four equal installments throughout the

fiscal year. The moneys from the assessments will be deposited into the newly created Public Counsel Fund. Moneys remaining in the fund will not revert to the General Revenue Fund.

§393.150 - As the party with the burden of proof, the gas corporation, electrical corporation, water corporation or sewer corporation shall submit written direct testimony in support of its filing at the time the filing is made, those parties not bearing the burden of proof shall have the opportunity to submit written rebuttal testimony relating to the filing no later than the date that leaves at least sixty percent of the period of suspension remaining, and said corporation shall have the opportunity to submit written rebuttal testimony no later than the date that leaves at least forty percent of the period of suspension remaining.

Where the commission further suspends any schedule that seeks to state a new rate, the commission shall determine the new rate utilizing certain information updated as of sixty days prior to the end of the period of suspension. Such updated information shall include all additions to plant-in-service and all significant changes to expenses and revenues and such other changes as are necessary to maintain a proper matching of revenues, expenses and rate base.

This section also reduces the period of time, from 120 to 90 days, in which the PSC may suspend proposed new rates by a gas, electric, water, or sewer company while it holds a hearing to determine the appropriateness of the rates. The proposal also reduces the period of time, from 6 to 2 months, in which the PSC may extend the rate suspension time in order to complete the hearing.

The proposed legislation prescribes dates by which rebuttal and surrebuttal testimony must be submitted to the PSC for a rate case. The PSC must issue its order no later than 20 days before the end of the suspension period or extended suspension period, and the order must go into effect within 10 days.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

FISCAL IMPACT - State Government	FY 2011 (10 Mo.)	FY 2012	FY 2013
GENERAL REVENUE

Savings - Office of Public Counsel
Personal Service (12 FTE)	$657,634	$657,634	$657,634
Fringe Benefits	$344,863	$344,863	$344,863
Expense and Equipment	$223,175	$223,175	$223,175
Total Savings - OPC (§386.715)	$1,225,672	$1,225,672	$1,225,672

Transfer Out - AGR - Animal Care Fees (§273.327)	($95,000)	$0	$0

ESTIMATED NET EFFECT ON GENERAL REVENUE	$1,130,672	$1,225,672	$1,225,672

ESTIMATED NET CHANGE IN FTE - GENERAL REVENUE	(12) FTE	(12) FTE	(12) FTE

FISCAL IMPACT - State Government	FY 2011 (10 Mo.)	FY 2012	FY 2013

ANIMAL CARE RESERVE FUND

Income - AGR - Animal Care Fees (§273.327)	$95,000	$95,000	$95,000

ESTIMATED NET EFFECT ON ANIMAL CARE RESERVE FUND	$95,000	$95,000	$95,000
























FISCAL IMPACT - State Government	FY 2011 (10 Mo.)	FY 2012	FY 2013

THE OFFICE OF PUBLIC COUNSEL FUND

Income - Increased assessments on regulated utilities (§386.715)	$1,225,672	$1,225,672	$1,225,672

Income - Increased assessments on regulated utilities (§386.715)	Up to $501,843	Up to $565,598	Up to $582,772

Costs - Office of Public Counsel
Personal Service (12 FTE)	($657,634)	($657,634)	($657,634)
Fringe Benefits	($344,863)	($344,863)	($344,863)
Expense and Equipment	($223,175)	($223,175)	($223,175)
Total Costs - OPC (§386.715)	($1,225,672)	($1,225,672)	($1,225,672)

Costs - Office of Public Counsel
Personal Service (8 FTE)	(Up to $282,066)	(Up to $348,633)	(Up to $359,092)
Fringe Benefits	(Up to $147,915)	(Up to $182,823)	(Up to $188,308)
Expense and Equipment	(Up to $71,862)	Up to $34,342	(Up to $35,372)
Total Costs - OPC (§393.150)	(Up to $501,843)	(Up to $565,798)	(Up to $582,772)

ESTIMATED NET EFFECT ON THE OFFICE OF PUBLIC COUNSEL FUND	$0	$0	$0

ESTIMATED NET EFFECT ON FTE FOR OFFICE OF PUBLIC COUNSEL	Up to 20 FTE	Up to 20 FTE	Up to 20 FTE



FISCAL IMPACT - State Government	FY 2011 (10 Mo.)	FY 2012	FY 2013
PUBLIC SERVICE COMMISSION FUND

Income - Public Service Commission (PSC) - Assessments to recover regulation costs (§393.150)	Up to $1,868,623	Up to $2,156,837	Up to $2,118,541

Costs - PSC
Personal Service (Up to 26 FTE)	(Up to $1,009,349)	(Up to $1,247,555)	(Up to $1,284,981)
Fringe Benefits	(Up to $529,303)	(Up to $654,218)	(Up to $673,844)
Expense and Equipment	(Up to 329,971)	(Up to $255,064)	(Up to $159,716)
Total Costs - PSC (§393.150)	(Up to $1,868,623)	(Up to $2,156,837)	(Up to $2,118,541)

ESTIMATED NET EFFECT ON PUBLIC SERVICE FUND	$0	$0	$0

ESTIMATED NET EFFECT ON FTE FOR PUBLIC SERVICE COMMISSION FUND	Up to 26 FTE	Up to 26 FTE	Up to 26 FTE