HB2541 Summary

• Caps cost of equity at 8% and common equity ratio at 50% in utility ratemaking proceedings unless clear and convincing evidence demonstrates a higher rate is strictly necessary to prevent imminent credit threats to ratepayers.

• Establishes Multi-Year Rate Plans (4-year terms) for electric utilities serving over 500,000 customers, allowing utilities to file either multi-year plans or traditional general rate cases beginning January 20, 2023.

• Creates performance-based ratemaking framework with up to 8 metrics tied to reliability, demand response, supplier diversity, affordability, customer service, and grid modernization, with incentives/penalties of 20-60 basis points applied to cost of equity.

• Requires annual performance evaluation proceedings, independent evaluations of utility metrics, and quarterly reporting on utility investments to promote transparency and stakeholder participation.

• Modifies Section 1-102 to emphasize that utilities receive "only a sufficient return on investment...and no more," reinforcing cost-of-service regulation principles.