AN ACT to clarify the cap on the utilities regulatory fee reserve, to set the regulatory fee in statute, and to allow the commission to raise or lower the fee.

The General Assembly of North Carolina enacts:

SECTION 1.(a)  G.S. 62‑302(a) reads as rewritten:
"(a)	Fee Imposed. – It is the policy of the State of North Carolina to provide fair regulation of public utilities in the interest of the public, as provided in G.S. 62‑2. The cost of regulating public utilities is a burden incident to the privilege of operating as a public utility. Therefore, for the purpose of defraying the cost of regulating public utilities, every public utility subject to the jurisdiction of the Commission shall pay a quarterly regulatory fee, in addition to all other fees and taxes, as provided in this section. The fees collected shall be used only to pay the expenses of the Commission and the Public Staff in regulating public utilities in the interest of the public and to maintain a reasonable margin for a reserve fund. The amount of the reserve may not exceed one‑half of the cost of operating the Commission and the Public Staff as reflected in the certified budget for the previous fiscal year.
It is also the policy of the State to provide limited oversight of certain electric membership corporations as provided in G.S. 62‑53. Therefore, for the purpose of defraying the cost of providing the oversight authorized by G.S. 62‑53 and G.S. 117‑18.1, each fiscal year each electric membership corporation whose principal purpose is to furnish or cause to be furnished bulk electric supplies at wholesale as provided in G.S. 117‑16 shall pay an annual fee as provided in this section.
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SECTION 1.(b)  Subdivisions 14.19(e1)(4), (5), (6), and (10) of S.L. 2009‑451 are repealed.
SECTION 2.  G.S. 62‑302, as amended by Section 1.(a) of this act, reads as rewritten:
"(a)	Fee Imposed. – It is the policy of the State of North Carolina to provide fair regulation of public utilities in the interest of the public, as provided in G.S. 62‑2. The cost of regulating public utilities is a burden incident to the privilege of operating as a public utility. Therefore, for the purpose of defraying the cost of regulating public utilities, every public utility subject to the jurisdiction of the Commission shall pay a quarterly regulatory fee, in addition to all other fees and taxes, as provided in this section. The fees collected shall be used only to pay the expenses of the Commission and the Public Staff in regulating public utilities in the interest of the public and to maintain a reasonable margin for a reserve fund. The amount of the reserve may not exceed one‑half of the cost of operating the Commission and the Public Staff as reflected in the certified budget for the previous fiscal year.
It is also the policy of the State to provide limited oversight of certain electric membership corporations as provided in G.S. 62‑53. Therefore, for the purpose of defraying the cost of providing the oversight authorized by G.S. 62‑53 and G.S. 117‑18.1, each fiscal year each electric membership corporation whose principal purpose is to furnish or cause to be furnished bulk electric supplies at wholesale as provided in G.S. 117‑16 shall pay an annual fee as provided in this section.
(b)	Public Utility Rate. –
(1)	Repealed by Session Laws 2000‑140, s. 56, effective July 21, 2000.
(2)	Unless adjusted under subdivision (3) of this subsection, the public utility fee is a percentage of a utility's jurisdictional revenues as follows:
	Noncompetitive jurisdiction revenues 			0.148%
	Subsection (h) competitive jurisdictional revenues	0.06%
	Subsection (m) competitive jurisdictional revenues	0.05%

(3)	In the first half of each calendar year, the Commission shall review the estimated cost of operating the Commission and the Public Staff for the next fiscal year, including a reasonable margin for the reserve fund allowed under this section. In making this determination, the Commission shall consider all relevant factors that may affect the cost of operating the Commission or the Public Staff or a possible unanticipated change in competitive and noncompetitive jurisdictional revenues. If the estimated receipts provided for under this section are less than the estimated cost of operating the Commission and the Public Staff for the next fiscal year, including the reasonable margin for the reserve fund, then  the Commission may increase the public utility regulatory fee on noncompetitive jurisdictional revenues effective for the next fiscal year. In no event may the percentage rate of the public utility regulatory fee on noncompetitive jurisdiction revenues exceed seventeen and one‑half hundredths of one percent (0.175%). If the estimated receipts provided for under this section are more than the estimated cost of operating the Commission and the Public Staff for the next fiscal year, including the reasonable margin for the reserve fund, then the Commission shall decrease the public utility regulatory fee on noncompetitive  jurisdictional revenues effective for the next fiscal year.
(4)	As used in this section:
a.	"Noncompetitive jurisdictional revenues" means all revenues derived or realized from intrastate tariffs, rates, and charges approved or allowed by the Commission or collected pursuant to Commission order or rule, but not including tap‑on fees or any other form of contributions in aid of construction.
b.	"Subsection (h) competitive jurisdictional revenues" means all revenues derived from retail services provided by local exchange companies and competing local providers that have elected to operate under G.S. 62‑133.5(h).
c.	"Subsection (m) competitive jurisdictional revenues" means all revenues derived from retail services provided by local exchange companies and competing local providers that have elected to operate under G.S. 62‑133.5(m).
(b1)	Electric Membership Corporation Rate. – The electric membership corporation regulatory fee for each fiscal year is two hundred thousand dollars ($200,000).

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(e)	Fee changes. – If a utility's regulatory fee obligation is changed, the Commission shall either adjust the utility's rates to reflect the change or approve the utility's request for an accounting order allowing deferral of the change in the fee obligation."
SECTION 3.  G.S. 62‑302(b)(2), as amended by Section 2 of this act, reads as rewritten:
"(2)	Unless adjusted under subdivision (3) of this subsection, the public utility fee is a percentage of a utility's jurisdictional revenues as follows:
	Noncompetitive jurisdiction revenues 			0.148%
	Subsection (h) competitive jurisdictional revenues	0.04%
	Subsection (m) competitive jurisdictional revenues	0.02%"	

SECTION 4.  Section 2 is effective July 1, 2015, and applies to jurisdictional revenues earned in each quarter that begins on or after July 1, 2015. Section 3 is effective July 1, 2016, and applies to jurisdictional revenues earned in each quarter that begins on or after July 1, 2016. The remainder of this act is effective when it becomes law.
In the General Assembly read three times and ratified this the 29th day of June, 2015.

	s/	 Philip E. Berger
	 President Pro Tempore of the Senate

	s/	 Tim Moore
	 Speaker of the House of Representatives

	s/	 Pat McCrory
	 Governor

Approved 11:45 a.m. this 30th day of June, 2015