| (a) Eligible fuel expenses. Eligible fuel expenses
include expenses properly recorded in the Federal Energy Regulatory
Commission Uniform System of Accounts, numbers 501, 502, 503, 509,
518, 536, 547, and 555, as modified in this subsection, as of April
1, 2013, and the items specified in paragraph (8) of this subsection.
Any later amendments to the System of Accounts are not incorporated
into this subsection. Subject to the commission finding special circumstances
under paragraph (7) of this subsection, eligible fuel expenses are
limited to:
(1) For any account, the electric utility may not recover,
as part of eligible fuel expense, costs incurred after fuel is delivered
to the generating plant site, for example, but not limited to, operation
and maintenance expenses at generating plants, costs of maintaining
and storing inventories of fuel at the generating plant site, unloading
and fuel handling costs at the generating plant, and expenses associated
with the disposal of fuel combustion residuals. Further, the electric
utility may not recover maintenance expenses and taxes on rail cars
owned or leased by the electric utility, regardless of whether the
expenses and taxes are incurred or charged before or after the fuel
is delivered to the generating plant site. The electric utility may
not recover an equity return or profit for an affiliate of the electric
utility, regardless of whether the affiliate incurs or charges the
equity return or profit before or after the fuel is delivered to the
generating plant site. In addition, all affiliate payments must satisfy
the Public Utility Regulatory Act (PURA) §36.058.
(2) For Accounts 501 and 547, the only eligible fuel
expenses are the delivered cost of fuel to the generating plant site
excluding fuel brokerage fees. For Account 501, revenues associated
with the disposal of fuel combustion residuals will also be excluded.
(3) For Account 502, the only eligible fuel expenses
are environmental consumables that are: properly recorded in the Account
as chemicals; required to comply with applicable state or federal
emission reduction statutes, orders, and regulations; and whose use
is directly proportional to the fuel consumed to generate electricity.
(4) For Account 509, the only eligible fuel expenses
are allowances expensed concurrent with the monthly emissions of sulfur
dioxide and nitrogen oxides.
(5) For Accounts 518 and 536, the only eligible fuel
expenses are the expenses properly recorded in the Account excluding
brokerage fees. For Account 503, the only eligible fuel expenses are
the expenses properly recorded in the Account, excluding brokerage
fees, return, non-fuel operation and maintenance expenses, depreciation
costs and taxes.
(6) For Account 555, the electric utility may not recover
demand or capacity costs.
(7) Upon demonstration that such treatment is justified
by special circumstances, an electric utility may recover as eligible
fuel expenses fuel or fuel related expenses otherwise excluded in
paragraphs (1) - (6) of this subsection. In determining whether special
circumstances exist, the commission shall consider, in addition to
other factors developed in the record of the reconciliation proceeding,
whether the fuel expense or transaction giving rise to the ineligible
fuel expense resulted in, or is reasonably expected to result in,
increased reliability of supply or lower fuel expenses than would
otherwise be the case, and that such benefits received or expected
to be received by ratepayers exceed the costs that ratepayers otherwise
would have paid or otherwise would reasonably expect to pay.
(8) Eligible fuel expenses shall not be offset by revenues
by affiliated companies for the purpose of equalizing or balancing
the financial responsibility of differing levels of investment and
operation costs associated with transmission assets. In addition to
the expenses designated in paragraphs (1) - (7) of this subsection,
unless otherwise specified by the commission, eligible fuel expenses
shall be offset by:
(A) revenues from steam sales included in Accounts
504 and 456 to the extent expenses incurred to produce that steam
are included in Account 503;
(B) revenues from off-system sales in their entirety,
except as permitted in paragraph (9) of this subsection; and
(C) revenues from disposition of allowances properly
recorded in Account 411.8.
(9) Shared margins from off-system sales. An electric
utility may retain 10% of the margins from an off-system energy sales
transaction if the following criteria are met:
(A) the electric utility participates in a transmission
region governed by an independent system operator or a functionally
equivalent independent organization;
(B) a generally-applicable tariff for firm and non-firm
transmission service is offered in the transmission region in which
the electric utility operates; and
(C) the transaction is not found to be to the detriment
of its retail customers.
(b) Reconciliation of fuel expenses. Electric utilities
shall file petitions for reconciliation on a periodic basis so that
any petition for reconciliation shall contain a maximum of three years
and a minimum of one year of reconcilable data and will be filed no
later than six months after the end of the period to be reconciled.
(c) Petitions to reconcile fuel expenses. In addition
to the commission prescribed reconciliation application, a fuel reconciliation
petition filed by an electric utility must be accompanied by a summary
and supporting testimony that includes the following information:
(1) a summary of significant, atypical events that
occurred during the reconciliation period that affected the economic
dispatch of the electric utility's generating units, including but
not limited to transmission line constraints, fuel use or deliverability
constraints, unit operational constraints, and system reliability
constraints;
(2) a general description of typical constraints that
limit the economic dispatch of the electric utility's generating units,
including but not limited to transmission line constraints, fuel use
or deliverability constraints, unit operational constraints, and system
reliability constraints;
(3) the reasonableness and necessity of the electric
utility's eligible fuel expenses and its mix of fuel used during the
reconciliation period;
(4) a summary table that lists all the fuel cost elements
which are covered in the electric utility's fuel cost recovery request,
the dollars associated with each item, and where to find the item
in the prefiled testimony;
(5) tables and graphs which show generation (MWh),
capacity factor, fuel cost (cents per kWh and cents per MMBtu), variable
cost and heat rate by plant and fuel type, on a monthly basis; and
(6) a summary and narrative of the next-day and intra-day
surveys of the electricity markets and a comparison of those surveys
to the electric utility's marginal generating costs.
(d) Fuel reconciliation proceedings. Burden of proof
and scope of proceeding are as follows:
(1) In a proceeding to reconcile fuel factor revenues
and expenses, an electric utility has the burden of showing that:
(A) its eligible fuel expenses during the reconciliation
period were reasonable and necessary expenses incurred to provide
reliable electric service to retail customers;
(B) if its eligible fuel expenses for the reconciliation
period included an item or class of items supplied by an affiliate
of the electric utility, the prices charged by the supplying affiliate
to the electric utility were reasonable and necessary and no higher
than the prices charged by the supplying affiliate to its other affiliates
or divisions or to unaffiliated persons or corporations for the same
item or class of items; and
(C) it has properly accounted for the amount of fuel-related
revenues collected pursuant to the fuel factor during the reconciliation
period.
(2) The scope of a fuel reconciliation proceeding includes
any issue related to determining the reasonableness of the electric
utility's fuel expenses during the reconciliation period and whether
the electric utility has over- or under-recovered its reasonable fuel
expenses.
(e) Refunds. All fuel refunds and surcharges shall
be made using the following methods.
(1) Interest shall be calculated on the cumulative
monthly ending under- or over-recovery balance at the rate established
annually by the commission for overbilling and underbilling in §25.28(c)
and (d) of this title (relating to Bill Payment and Adjustments).
Interest shall be calculated based on principles set out in subparagraphs
(A) - (E) of this paragraph.
(A) Interest shall be compounded annually by using
an effective monthly interest factor.
(B) The effective monthly interest factor shall be
determined by using the algebraic calculation x = (1 + i) (1/12) -
1; where i = commission-approved annual interest rate, and x = effective
monthly interest factor.
Cont'd... |
