Provides relative to utilities. (8/1/26)

Senate Bill 364 amends Louisiana Revised Statutes 45:302(A) and 1163(A)(1) and (C) to modify the statutory language governing how the Louisiana Public Service Commission regulates public utility rates. The bill replaces the existing standard of "just and reasonable rates" with "fair and equitable rates" in two key provisions: one governing the commission's authority to regulate natural gas transportation and sale through pipelines, and another governing the commission's broader authority to regulate rates charged by local public utilities including street railways, gas, electric light, heat, power, and waterworks systems. Additionally, the bill adds a new requirement in Section 1163(C) that the commission audit fuel adjustment clause filings from electric utilities no less frequently than every other year and exercise its rate-fixing authority to modify fuel adjustment charges to ensure costs passed to consumers are fair and equitable.

The practical effect of this legislation extends to all public utilities regulated by the Louisiana Public Service Commission, particularly electric utilities, natural gas distributors, and other local public utility providers. The substitution of "fair and equitable" for "just and reasonable" establishes a modified standard by which the commission must evaluate utility rates, potentially affecting how rate cases are analyzed and what factors the commission considers when approving or modifying proposed rate changes. For consumers, the mandatory biennial audit requirement for electric utility fuel adjustment clauses creates an additional layer of regulatory oversight that may result in more frequent adjustments to their bills. Utility companies will face increased compliance obligations, particularly with respect to submitting and justifying fuel adjustment clause filings, knowing that the commission will regularly review these charges under the new fair and equitable standard.

This legislation operates within the existing statutory framework of Louisiana's utility regulation scheme established in Title 45 of the Louisiana Revised Statutes, which grants the Public Service Commission comprehensive jurisdiction over public utilities and their rates. The terminology change from "just and reasonable" to "fair and equitable" represents a subtle but potentially significant shift in the legal standard applied to rate regulation, though both standards have long been recognized concepts in utility law and constitutional jurisprudence governing due process and takings claims. The biennial audit requirement in Section 1163(C) reinforces and expands the commission's existing rate-fixing authority by establishing a mandatory schedule for reviewing specific categories of utility charges, thereby institutionalizing what may have been discretionary review practices under prior law.