| (-e-) For electric utilities the balance of cash and
working funds included in the working cash allowance calculation must
consist of the average daily bank balance of all non-interest bearing
demand deposits and working cash funds.
(-f-) The lead on federal income tax expense must be
calculated by measurement of the interval between the mid-point of
the annual service period and the actual payment date of the electric
utility.
(-g-) If the cash working capital calculation results
in a negative amount, the negative amount must be included in rate
base.
(V) If cash working capital is required to be determined
by the use of a lead-lag study under the previous subclause and either
the electric utility does not file a lead lag study or the electric
utility's lead-lag study is determined to be so flawed as to be unreliable,
in the absence of persuasive evidence that suggests a different amount
of cash working capital, an amount of cash working capital equal to
negative one-eighth of operations and maintenance expense including
fuel and purchased power will be presumed to be the reasonable level
of cash working capital.
(C) Deduction of certain items which include, but are
not limited to, the following:
(i) accumulated reserve for deferred federal income
taxes;
(ii) unamortized investment tax credit to the extent
allowed by the Internal Revenue Code;
(iii) contingency and/or property insurance reserves;
(iv) contributions in aid of construction;
(v) customer deposits and other sources of cost-free
capital;
(D) Construction work in progress (CWIP). The inclusion
of construction work in progress is an exceptional form of rate relief.
Under ordinary circumstances the rate base must consist only of those
items which are used and useful in providing service to the public.
Under exceptional circumstances, the commission will include construction
work in progress in rate base to the extent that:
(i) the electric utility has proven that:
(I) the inclusion is necessary to the financial integrity
of the electric utility; and
(II) major projects under construction have been efficiently
and prudently planned and managed. However, construction work in progress
must not be allowed for any portion of a major project which the electric
utility has failed to prove was efficiently and prudently planned
and managed; or
(ii) for a project ordered by the commission under §25.199
of this title (relating to Transmission Planning, Licensing and Cost-recovery
for Utilities within the Electric Reliability Council of Texas), if
the commission determines that conditions warrant the inclusion of
CWIP in rate base, the project is being efficiently and prudently
planned and managed, and there will be a significant delay between
initial investment and the initial cost recovery for a transmission
project.
(E) Self-insurance reserve accounts. If a self insurance
plan is approved by the commission, any shortages to the reserve account
will be an increase to the rate base and any surpluses will be a decrease
to the rate base. The electric utility must maintain appropriate books
and records to permit the commission to properly review all charges
to the reserve account and determine whether the charges being booked
to the reserve account are reasonable and correct.
(F) Requirements for post test year adjustments.
(i) Post test year adjustments for known and measurable
rate base additions (increases) to historical test year data will
be considered only as set out in subclauses (I)-(IV) of this clause.
(I) Where the addition represents plant which would
appropriately be recorded:
(-a-) for investor-owned electric utilities in FERC
account 101 or 102;
(-b-) for electric cooperatives, the equivalent of
FERC accounts 101 or 102.
(II) Where each addition comprises at least 10% of
the electric utility's requested rate base, exclusive of post test
year adjustments and CWIP.
(III) Where the plant addition is deemed by this commission
to be in-service before the rate year begins.
(IV) Where the attendant impacts on all aspects of
a utility's operations (including but not limited to, revenue, expenses
and invested capital) can with reasonable certainty be identified,
quantified and matched. Attendant impacts are those that reasonably
follow as a consequence of the post test year adjustment being proposed.
(ii) Each post test year plant adjustment will be included
in rate base at:
(I) the reasonable test year-end CWIP balance, if the
addition is constructed by the electric utility; or,
(II) the reasonable price, if the addition represents
a purchase, subject to original cost requirements, as specified in
Public Utility Regulatory Act §36.053.
(iii) Post test year adjustments for known and measurable
rate base decreases to historical test year data will be allowed only
when clause (i)(IV) of this subparagraph and the criteria described
in subclauses (I) and (II) of this clause are satisfied.
(I) The decrease represents:
(-a-) plant which was appropriately recorded in the
accounts set forth in clause (i)(I) of this subparagraph;
(-b-) plant held for future use;
(-c-) CWIP (mirror CWIP is not considered CWIP); or
(-d-) an attendant impact of another post test year
adjustment.
(II) Plant that has been removed from service, mothballed,
sold, or removed from the electric utility's books prior to the rate
year.
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| Source Note: The provisions of this §25.231 adopted to be effective March 1, 1999, 24 TexReg 1377; amended to be effective April 13, 2005, 30 TexReg 2055; amended to be effective July 19, 2023, 48 TexReg 3900 |
