Rule III
- Definitions
A. "Affiliate" means:
1. any person covered by the definition of:
a. "affiliate interest with a public utility"
under Ark. Code Ann. §
23-1-101(1);
b. "affiliate" under Ark. Code Ann. §
23-3-302(2);
or
c. "Affiliate company" under
Ark. Code Ann. §
23-18-103(a)
(1); and,
2. any unit, division, separate business
activity or operating part,
a. which is
within a public utility, and
b.
which provides assets, goods, services, information having competitive value,
personnel, or financial resources other than, or in addition to, public utility
service provided directly to Arkansas retail
customers.
B.
"Public utility goods or services" mean goods or services which the public
utility is required, by Arkansas statute or Commission rules, to provide to
Arkansas retail customers.
C.
"Public utility" means all jurisdictional rate-regulated public
utilities.
D. "Direct cost" of a
product or service means a cost solely attributable, on a cost-causative basis,
to the production or provision of such individual product or service, where the
attribution does not require the use of allocations to separate the costs
incurred in the production of other services or products.
E. "Indirect cost" of a product or service
means a cost, other than a direct cost, properly attributable to the production
or provision of an individual product or service.
F. "Fully allocated cost," with respect to a
particular product or service, is the sum of the direct cost and indirect cost
of that product or service.
G.
"Affiliate transaction" means a purchase, sale, trade, lease, transfer, sharing
or joint use, between a public utility and any affiliate thereof, of assets
(whether tangible or intangible), goods, services, information having
competitive value, personnel, or financial resources but not including
electricity or gas, except that the term shall exclude transactions described
at Ark. Code Ann. §
23-3-102(e)(2).
H. "Non-utility asset" is an asset used for
one or more non-utility businesses; where an asset is used for both utility and
non-utility businesses, a "non-utility asset" is an appropriate allocated
portion of the shared asset, as determined by the Commission.
I. "Non-utility business" means a business
other than the provision of public utility goods or services as defined at
III.B.
J. "Utility related
business" means a business which is, or which engages in:
1. a rate-regulated utility in another state
of the United States;
2.
independent power generation;
3.
energy marketing and trading;
4.
gas gathering, production, distribution and transportation;
5. providing fuel to generating
plants;
6. a nuclear
decommissioning trust;
7. an entity
created to facilitate tax advantages for the holding company system;
8. an entity created to facilitate financing
transactions;
9. a captive
insurance and other risk management entity;
10. an entity that holds or manages emission
allowances or other environmental allowances or credits;
11. an entity created to facilitate risk
management with respect to the ownership of real property and improvements
thereon;
12. an entity that engages
in producing, generating, transmitting, delivering, distributing, storing,
selling, marketing, and/or furnishing gas, oil, electricity, thermal energy,
and/or steam energy, to wholesale and/or retail customers;
13. an entity that provides or is engaged in:
a. energy management services and demand side
management activities;
b.
development and commercialization of electrotechnologies related to energy
conservation, storage and conversion;
c. ownership, operation, sale, installation
and servicing of refueling, recharging and conversion equipment and facilities
relating to electric and compressed natural gas powered vehicles;
d. sale of electric and gas appliances or
equipment to promote new technologies, or new applications for existing
technologies, that use gas or electricity and equipment that enables the use of
gas or electricity as an alternate fuel and the installation and servicing
thereof;
e. production, conversion,
sale and distribution of thermal energy products, such as process steam, heat,
hot water, chilled water, air conditioning, compressed air and similar
products, alternative fuels, and renewable energy resources, and the servicing
of thermal resources;
f. sale of
technical, operational, management and other similar kinds of services and
expertise relating to distribution, transmission, generation engineering,
development, design and rehabilitation, construction, maintenance and
operation, fuel procurement, delivery and management and environmental
licensing, testing and remediation;
g. ownership, operation and servicing of fuel
procurement, transportation, handling and storage facilities, scrubbers, and
resource recovery and waste water treatment facilities, including activities
related to nuclear fuels;
h.
development and commercialization of technologies or processes that utilize
coal waste or by-products as an integral component of such technology or
process;
i. securitization
activities;
j. development
activities relating to other authorized electric or gas related
activities;
k. local community
development investments relating to other authorized electric or gas related
activities; or,
l. sales of assets
related to other authorized electric or gas related activities;
or,
14. other utility
related activities as determined on a case-by-case basis by the
Commission,
K. "Service
company" means a person or division that is organized principally for the
purpose of providing shared corporate support services to affiliates or
divisions of a public utility.
L.
"Shared corporate support services" means services shared between or among a
public utility, its parent holding company or an affiliate or division, such as
human resources, procurement, information technology, regulatory services,
administrative services, real estate services, legal services, accounting
services, environmental services, research and development, internal audit,
community relations, corporate communications, financial services, financial
planning and management support, and corporate services.
M. "Market price" means a price determined by
a public utility as the amount it would pay or receive for receiving or
providing a good or service in an affiliate transaction based on comparisons of
similar transactions with, or the price of similar goods and services available
from, unrelated third parties. A public utility may make such determination
based on surveys, specific price inquiries, benchmarking, competitive bids or
any other reasonable method. For goods or services for which there is no
readily available comparative market price, the price shall be the fully
allocated cost of the person supplying the goods or services.
N. "Commission" means the Arkansas Public
Service Commission.
Rule VII
- Bond Rating
Downgrades
A. This Rule VII applies to
any public utility having affiliates whose total capitalization equals at least
ten (10) percent of the public utility's capitalization.
B. If a public utility's bond ratings are
downgraded to a Standard and Poor's rating of BB+ or lower, or to a Moody's
rating of Bai or lower, such utility shall submit to the Commission, within
thirty (30) days of such downgrading, a full explanation of the reasons for
such downgrading and such explanation shall include testimony from financial
experts familiar with bond ratings.
C. The Commission may require the public
utility to retain, at the public utility's expense, a financial expert to
advise the Commission in reviewing the public utility's explanation.
D. If the Commission finds, after notice and
opportunity for hearing, that the public utility's downgrade would not have
occurred but for one or more relationships between such public utility and one
or more affiliates, the public utility must terminate such relationship(s) no
later than 6 months from the date of the Commission's finding, unless the
Commission finds that other remedies insulate the public utility and its
customers from any diminution in the public utility's ability to carry out its
obligation to serve at reasonable rates.