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House passes major public-utilities overhaul to clarify prudence and preapproval for large projects
Summary
The Utah House passed First Substitute Senate Bill 26 to create an upfront review and preapproval process for large utility projects, add four prudence standards, and require independent evaluators and public hearings; the bill passed 71-0 and will be returned to the Senate for signature.
Representative Allen, sponsor of First Substitute Senate Bill 26, told colleagues the measure creates a ‘‘transparent, upfront review and approval of large utility projects’’ after several years of disputes over bidding and cost recovery. Allen said the bill requires public hearings, an independent evaluator hired by the Public Service Commission and four defined standards to determine whether decisions are ‘‘prudent.’'
The bill responds to past controversies in which utilities’ bidding processes and an evaluator’s impartiality were questioned and to a Utah Supreme Court decision that limited recovery of certain gas-plant costs, Allen said. ‘‘It provides for a review and upfront approval of large utility projects,’’ he said, adding the measure ‘‘provides certainty to the electric utility of standards ... to get upfront approval of a large electrical utility project and the level of cost recovery.’'
Representative Steve Clark asked whether the bill would help Utah contractors who lost work on a recent Nephi project; Allen replied the bill does not mandate local hiring but allows the Public Service Commission to adopt rules after public hearings and to use an independent evaluator to assess fairness. Clark warned of local economic loss, saying ‘‘we're sending $365,000,000 worth of construction dollars ... to Chicago and Houston and, Phoenix.’'
Representative Tilton, who participated in the bill workgroups, urged support and described the bill as technical and focused on determining ‘‘prudence’’ and whether expenses can be recovered in rate base. Allen described the measure as a compromise developed with utilities, large users and regulators and asked members for support.
The House opened voting on the measure; the clerk announced First Substitute Senate Bill 26 received 71 yes votes and 0 no votes. The bill passed and, under House procedure, will be signed by the Speaker and returned to the Senate for the President's signature.
The measure gives the Public Service Commission expanded rulemaking authority to define and apply the new prudence standards and to manage solicitation and oversight procedures; supporters said the process is intended to reassure both utilities and competing bidders that awards and cost recovery will be decided through clear, public standards and independent review.
