Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Section 16-19a of the general statutes is repealed and the following is substituted in lieu thereof:
(a) The Department of Public Utility Control shall, at intervals of not more than four years from the last previous general rate hearing of each gas and electric company having more than seventy-five thousand customers, conduct a complete review and investigation of the financial and operating records of each such company and hold a public hearing to determine whether the rates of each such company are unreasonably discriminatory or more or less than just, reasonable and adequate, or that the service furnished by such company is inadequate to or in excess of public necessity and convenience or that the rates do not conform to the principles and guidelines set forth in section 16-19e AS AMENDED. In making such determination, the department shall consider the gross and net earnings of such company since its last previous general rate hearing, its retained earnings, its actual and proposed capital expenditures, its advertising expenses, the dividends paid to its stockholders, the rate of return paid on its preferred stock, bonds, debentures and other obligations, its credit rating, and such other financial and operating information as the department may deem pertinent.
(b) IN THE PROCEEDING REQUIRED UNDER SUBSECTION (a) OF THIS SECTION, THE DEPARTMENT MAY APPROVE PERFORMANCE-BASED INCENTIVES TO ENCOURAGE A GAS OR ELECTRIC COMPANY TO OPERATE EFFICIENTLY AND PROVIDE HIGH QUALITY SERVICE AT FAIR AND REASONABLE PRICES. NOTWITHSTANDING SUBSECTION (a) OF THIS SECTION, IF THE DEPARTMENT APPROVES SUCH PERFORMANCE-BASED INCENTIVES FOR A PARTICULAR COMPANY, THE DEPARTMENT SHALL INCLUDE IN SUCH APPROVAL A FRAMEWORK FOR PERIODIC MONITORING AND REVIEW OF THE COMPANY'S PERFORMANCE IN REGARD TO CRITERIA SPECIFIED BY THE DEPARTMENT, WHICH SHALL INCLUDE, BUT NOT BE LIMITED TO, THE COMPANY'S RETURN ON EQUITY, RELIABILITY AND QUALITY OF SERVICE. THE DEPARTMENT'S PERIODIC MONITORING AND REVIEW SHALL BE USED IN LIEU OF THE PERIODIC REVIEW AND INVESTIGATION PROCEEDINGS REQUIRED UNDER SUBSECTION (a) OF THIS SECTION. IF THE DEPARTMENT DETERMINES IN THE PERIODIC MONITORING AND REVIEW THAT A MORE EXTENSIVE REVIEW OF COMPANY PERFORMANCE IS NECESSARY, THE DEPARTMENT MAY INSTITUTE A FURTHER PROCEEDING IN ACCORDANCE WITH THE PURPOSES OF THIS CHAPTER, INCLUDING A COMPLETE REVIEW AND INVESTIGATION DESCRIBED IN SUBSECTION (a) OF THIS SECTION.
Sec. 2. This act shall take effect from its passage.
Approved May 2, 1996. Effective May 2, 1996.[footer.htm]