| (E) federal income taxes.
(5) The factors used to calculate the return on investment,
depreciation expense, and incremental federal income tax used to compute
the revenues to be collected through the interim rate adjustment must
be the same as those established or used in the final order setting
rates in the gas utility's most recent rate case for the area in which
the interim rate adjustment is to be implemented.
(6) The gas utility shall allocate the revenue to be
collected through the interim rate adjustment among the gas utility's
customer classes in the same manner as the cost of service was allocated
among customer classes in the utility's most recent rate case for
the area in which the interim rate adjustment is to be implemented.
(7) The gas utility shall design the interim rate adjustment
as either a flat rate to be applied to the monthly customer charge
or a volumetric rate to be applied to the initial block usage rate.
The interim rate adjustment, whether it is applied to the monthly
customer charge or the initial block rate, shall be shown on the customers'
monthly billing statements as a surcharge.
(g) Procedure for review. The director shall ensure
that applications for interim rate adjustments are reviewed for compliance
with the requirements of Texas Utilities Code, §104.301; and
this section.
(1) The director may:
(A) suspend the implementation date of an interim rate
adjustment in accordance with subsection (a) of this section;
(B) request assistance in reviewing applications for
interim rate adjustments from other Commission divisions; and
(C) request additional staff to achieve timely review
of interim rate adjustment applications.
(2) Upon completion of the review; the director shall
prepare a written recommendation, which shall be provided to the applicant
gas utility. The director may recommend:
(A) approval of the application for interim rate adjustment;
(B) approval of some elements of the application to
allow only those elements of the interim rate adjustment to take effect
without further Commission action; or
(C) rejection of the application for interim rate adjustment.
(3) The director's recommendation shall be submitted
to the Commission for decision at a scheduled open meeting.
(4) If the Commission approves an application for interim
rate adjustment, the gas utility shall either file the tariff or rate
schedule implementing the approved interim rate adjustment or shall,
within 30 days of the Commission's action, notify Gas Services that
the tariff or rate schedule initially filed with the application correctly
implements the approved interim rate adjustment.
(h) Annual interim rate adjustments. A gas utility
shall recalculate its approved interim rate adjustment annually in
accordance with the requirements of this section and shall file an
application for an annual adjustment no later than 60 days prior to
the one-year anniversary of the proposed implementation date of the
previous interim rate adjustment application.
(i) Refunds. All amounts collected from customers under
an interim rate adjustment tariff or rate schedule are subject to
refund. The issues of refund amounts, if any, whether interest should
be applied to refunded amounts and, if so, the rate of interest, shall
be addressed in the rate case a gas utility files or the Commission
initiates after the implementation of an interim rate adjustment and
shall be the subject of specific findings of fact in the Commission's
final order setting rates.
(j) Review for reasonableness and prudence. In the
rate case a gas utility files or the Commission initiates after the
implementation of an interim rate adjustment under this section, any
change in investment and related expenses and revenues that have been
included in any interim rate adjustment shall be fully subject to
review for reasonableness and prudence. Upon issuance of a final order
setting rates in this rate case, any change in investment and related
expenses and revenues that have been included in any interim rate
adjustment shall no longer be subject to review for reasonableness
or prudence.
(k) Suspension of interim rate adjustment. A gas utility
may file a request to suspend the operation of an interim rate adjustment
tariff or rate schedule for any year subject to the following requirements
and conditions:
(1) A gas utility's request to suspend operation of
an interim rate adjustment tariff or rate schedule shall be filed
no later than the date on which the gas utility's annual adjustment
of the interim rate adjustment would have been filed.
(2) A gas utility's request shall be in writing and
shall state the reasons the suspension is justified.
(3) The director may grant the suspension, provided
that the gas utility has made a showing of reasonable justification.
If granted, the suspension shall be effective until the next annual
anniversary of the implementation date of the interim rate adjustment.
(4) The utility's next annual filing for interim rate
adjustment shall be made in accordance with this section.
(l) Rate case filing. A gas utility that implements
an interim rate adjustment under this section and does not file a
rate case before the fifth anniversary of the date its initial interim
rate adjustment became effective shall file a rate case not later
than the 180th day after that anniversary.
(m) Reimbursement. A gas utility that implements an
interim rate adjustment under this section shall reimburse the Commission
for the utility's proportionate share of the Commission's annual costs
related to the administration of the interim rate adjustment mechanism.
The Commission shall determine the amount of the reimbursement as
follows:
(1) After the Commission has finally acted on a gas
utility's application for an interim rate adjustment, the director
shall estimate such utility's proportionate share of the Commission's
annual costs related to the processing of such applications.
(2) In making the estimate required by paragraph (1)
of this subsection, the director shall take into account the number
of utilities the Commission reasonably expects to file for interim
rate adjustments during the fiscal year, and the costs expected to
be incurred in processing such applications.
(3) The utility shall reimburse the Commission for
the amount so determined within thirty days after receipt of notice
of the amount of the reimbursement.
(4) In the event that the utility wishes to contest
the amount of the reimbursement determined by the director, it may
file a request to have the Commission determine the appropriate amount.
In such event, the utility agrees to pay the amount determined by
the Commission within thirty days of the determination.
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| Source Note: The provisions of this §7.7101 adopted to be effective December 27, 2004, 29 TexReg 11948; amended to be effective April 25, 2017, 42 TexReg 2165; amended to be effective May 14, 2018, 43 TexReg 2997 |
