| (a) The commission shall follow the mandates of the
TWC, Chapters 12 and 13, to calculate the annual cost of service.
The commission shall rely on any reasonable methodologies set by contract
which identify costs of providing service and/or allocate such costs
in calculating the cost of service.
(b) When the protested rate was calculated using the
cash basis or the utility basis, and the rate which the protested
rate supersedes was not based on the same methodology, the commission
may calculate cost of service using the superseded methodology unless
the seller establishes a reasonable basis for the change in methodologies.
Where the protested rate is based in part upon a change in methodologies
the seller must show during the evidentiary hearing the calculation
of revenue requirements using both the methodology upon which the
protested rate is based, and the superseded methodology. When computing
revenue requirements using a new methodology, the commission may allow
adjustments for past payments.
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