and return associated with qualifying electric plants — Review of regulatory asset balances. A. 1. On and after the effective date of this act, a public utility shall defer to a regulatory asset ninety percent (90%) of all depreciation expenses and return associated with all qualifying electric plants placed in service, provided the public utility has provided notice to the Corporation Commission of the public utility’s election to make such deferrals pursuant to this section. Deferral under this section shall begin on the effective date of this act if the public utility notifies the Commission of the election prior to the effective date, or on the date that the utility notifies the Commission of the election if such date is after the effective date of this act. 2. For the purposes of this section, “qualifying electric plant” means all incremental electric plants placed in service by a public utility following the utility’s last general rate case, excluding transmission facilities or new electric generating units. B. The Commission shall conduct a prudence review of the associated qualifying electric plant resulting in the regulatory asset balances prior to moving such balances into the public utility’s rate base. The regulatory asset balances arising under this section shall be adjusted to reflect any prudence disallowances of the associated qualifying electric plant, following notice and hearing, as ordered by the Commission. C. Unless otherwise provided by this section, in each general rate proceeding concluded on or after July 1, 2025, the balance of the regulatory asset as of the end of the test year 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 balances arising from deferrals associated with the qualifying electric plant placed in service after the end of the test year. D. Parts of regulatory asset balances created under this section that are not included in rate base shall accrue 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 twenty- year amortization beginning on the date new rates reflecting such amortization take effect. E. Depreciation expenses deferred under this section shall account for any qualifying electric plant placed into service. Return deferred under this section shall be determined using the weighted average cost of capital approved by the Commission in the public utility’s last general rate case and applied to the change in regulatory asset balances 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. 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.
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