(November 2007) Fortnightly's annual rate-case analysis reveals a new trend at state PUCs involving return-on-equity rate allowances. Regulators increasingly are giving utilities...
Annual ROE Survey: Capitalizing On Grid Concerns
Regulators use rate cases to craft incentives for capital spending.
increase to become effective Nov. 1, 2007.
10. In addition to revenue increase shown, utility is authorized to make permanent a two-year $58.1 million increase approved by order dated Oct. 14, 2004.
11. Partial settlement agreement includes ROE + Revenue figures.
12. Figures shown is total system-wide increase for L&P operating division is $45.1 million. Increase for MPS operating division is $13.6 million.
13. ROE figure shown reflects downward adjustment of 32.5 basis points for reduced risk associated with approved a straight fixed-variable rate design.
14. An additional $358,853 increase effective Nov. 1, 2006; additional $107,475 effective May 1, 2007.
15. First year of three-year revenue settlement agreement.
16. Earnings sharing component of rate plan triggered if utility achieves 11 percent ROE, reduced to 10.8 percent if company fails to earn “retail customer choice education incentive.”
17. Earnings sharing component of rate plan triggered if utility achieves 10.6 percent ROE.
18. Rate orders address two filings. The first, a general rate increase application resulted in rate decrease shown. The second, a request to recover costs of a new generating plant, produced an increase of $42.1 million, effective when plant comes on line.
19. Order set a range of 11.25 to 11.75 percent with rates set using 11.70 percent figure.
20. Settlement Agreement includes ROE as shown.
21. On 9/16/05 the Consumer Advocate Division petitioned the Tennessee Regulatory Authority (TRA) to open an investigation to determine whether Atmos Energy Corp. was overearning.
22. Final order pending.
23. After an investigation by TRA staff and then a contested case proceeding, the TRA determined on 10/26/06 that Atmos had a revenue surplus of $6.1 million for the 12 months ending 9/30/07.
24. ncrease shown is subject to a $30 million rate credit. Net of credit, rates increase by $85 million effective 12/11/06 and by an additional $30 million on 6/1/07.
25. Revenue settlement reflects ROE as shown.
26. Application to adjust capped rates to recover prudently incurred incremental environmental and reliability costs.
27. Base period for calculating incremental investment.
28. Figure shown reflects current financial conditions. Applicable only as “carry charge” on incremental costs determined in current case.
29. Commission adopts stipulated performance-based rate plan. Rates frozen of current levels for 5 years beginning Jan. 1, 2006.
30. Stipulated performance-based rate plan provides that utility will share earnings over figure shown 75 percent to ratepayers 25 percent to shareholders.
31. Final revenue figure subject to adjustment for calculation of power costs.
32. Joint application. Both companies constitute a single utility system with the same rates and power supply source.
33. Figure shown is total of electric, gas & water operations:
$.797 million approved electric increase.
$.347 million approved gas incraese.
$.548 million approved water increase.
34. ROE award applied to 55 percent common equity finance ratio.
35. Revenue award includes cost of fuel.