HB 228 Summary

• Requires public utilities to prove that proposed rates are just and reasonable and allow recovery of only prudently incurred costs in rate proceedings.

• Establishes that the Commission shall evaluate cost prudence based on objective reasonableness of expenses based on what the utility knew or should have known at the time costs were incurred.

• Allows the Commission to determine costs are only partially prudent and adjust rate base, operating expenses, or fuel costs accordingly.

• Permits water utilities to fully recover prudently incurred costs for constructing facilities to serve existing customers or reasonably anticipated customers within 3 years, unless the water utility is under review for service adequacy or rate appropriateness.

• Replaces the previous "good faith business judgment" standard with a "prudently incurred" standard for water utility cost recovery.