Iowa Admin. Code r. 199-20.9 - Electric energy automatic adjustment
The electric energy cost adjustment of the unit charge shall be an energy adjustment clause.
(1)
Applicability. A utility's electric energy adjustment shall
recover from consumers only those costs which:
a. Are incurred in supplying
energy;
b. Are beyond direct
control of management;
c. Are
subject to sudden important change in level;
d. Are an important factor in determining the
total cost to serve; and
e. Are
readily, precisely, and continuously segregated in the accounts of the
utility.
(2)
Energy adjustment clause. Prior to any period in which a
utility proposes to change the adjustment amount for each energy unit delivered
to the customer, the utility shall determine and file for board approval the
adjustment amount to be charged for each energy unit delivered under rates set
by the board. The energy adjustment clause factors shall be printed on the
customer's bill. The filing shall include all invoices (except invoices for
fuel, freight, and transportation), worksheets, and detailed supporting data
used to determine the amount of the adjustment. Spreadsheets, workbooks, and
databases included in filings shall include all cell formulae and cell
references. Utilities that participate in a wholesale energy market and use a
forecasted energy adjustment clause shall provide information about key inputs
and assumptions and explain the differences between the forecast and actual
fuel costs. The estimated amount of fossil fuel should be detailed to reflect
the amount of fuel, transportation, emission allowances, and other costs.
a. The utility shall keep and maintain
journal entries to reflect a breakdown for each type of fuel: actual cost of
fuel, transportation costs, and other costs. Items identified as other costs
should be described and their inclusion as fuel costs shall be approved by the
board. The board may direct that journal entries be filed. The utility shall
also file detailed supporting data:
(1) To
show the actual amount of sales of energy by month for which an adjustment was
utilized, and
(2) To support the
energy cost adjustment balance utilized in the monthly energy adjustment clause
filings.
b. The energy
adjustment shall provide for change of the price per kilowatt-hour delivered
under rates set by the board based upon the formulas provided in the utility's
tariff. The energy adjustment factor shall be rounded on a consistent basis to
either the nearest 0.01¢/kWh or 0.001¢/kWh. The tariff shall define
the components of the formula(s) and shall include reference to the specific
accounts of the Uniform System of Accounts for each component.
(1) For each period as specified in the
tariff, the calculation shall include but not be limited to:
1. The estimated energy cost and
revenues;
2. The estimated electric
energy to be delivered and entered in accounts 440, 442, and 444-7, excluding
energy from distinct interchange deliveries entered into account 447, and
including intrautility energy service as included in accounts 448 and 929 of
the Uniform System of Accounts during the month in which the energy adjustment
charge will be used; and
3. The
energy cost adjustment account balance.
(2) The base formula for the energy
adjustment factor shall be:
Energy adjustment factor = (energy cost adjustment account balance + estimated energy costs and revenues) / estimated energy delivered
c. The
estimated energy cost and revenues shall be the estimated cost and revenues
associated with:
(1) Fossil and nuclear fuel
consumed in the utility's own plants and the utility's share of fossil and
nuclear fuel consumed in jointly owned or leased plants. Fossil fuel shall
include natural gas used for electric generation and the cost of fossil fuel
transferred from account 151 to account 501 or 547 of the Uniform System of
Accounts for Electric Utilities. Nuclear fuel shall be that shown in account
518 of the Uniform System of Accounts except that if account 518 contains any
expense for fossil fuel which has already been included in the cost of fossil
fuel, it shall be deducted from the account. (Paragraph C of account 518
includes the cost of other fuels used for ancillary steam
facilities.)
(2) The cost of steam
purchased, or transferred from another department of the utility or from others
under a joint facility operating agreement, for use in prime movers producing
electric energy (accounts 503 and 521).
(3) A deduction shall be made of the expenses
of producing steam chargeable to others, to other utility departments under a
joint operating agreement, or to other electric accounts outside the steam
generation group of accounts (accounts 504 and 522).
(4) The cost of water used for hydraulic
power generation. Water cost shall be limited to items of account 536 of the
Uniform System of Accounts. For pumped storage projects, the energy cost of
pumping is included. Pumping energy cost shall be determined from the
applicable costs of subparagraphs of paragraph 20.9(2)"c."
(5) The energy costs paid for
energy purchased under arrangements or contracts, as entered into account 555
of the Uniform System of Accounts, less the energy revenues to be recovered
from corresponding sales, as entered in account 447 of the Uniform System of
Accounts.
(6) Purchases from
alternative energy production facilities under rule
199-15.11 (476).
(7) The weighted average costs of inventoried
allowances used in generating electricity.
(8) The gains and losses, as described in
subrule 20.17(9), from allowance transactions occurring during the month.
Allowance transactions shall include vintage trades and emission for emission
trades.
(9) Eligible costs or
credits associated with the utility's annual reconciliation of its alternate
energy purchase program under 199-paragraph 15.17(4)"b."
(10) Federal production tax
credits unless the board approves different ratemaking treatment.
(11) Other costs and revenues as specified in
the utility's tariff and approved by the board. For all other costs and
revenues, the utility shall provide the type of cost, the dollar amount, and
reference to the board order approving the cost to be included in the energy
adjustment clause (EAC).
d. The energy cost adjustment account balance
shall be the cumulative balance of any excess or deficiency which arises out of
the difference between board recognized energy cost recovery and the amount
recovered through application of energy charges to consumption under rates set
by the board. The calculation for the energy cost adjustment account balances
shall include but is not limited to:
(1) The
actual energy expense for the prior period and recorded in accounts 440, 442
and 444-6 of the Uniform System of Accounts;
(2) The actual electric energy delivered for
the prior period and recorded in accounts 440, 442, and 444-7, excluding energy
from distinct interchange deliveries entered into account 447, and including
intrautility energy service as included in accounts 448 and 929 of the Uniform
System of Accounts; and
(3) The
beginning energy cost adjustment account balance (overrecovered or
underrecovered amount) for the current period.
e. Reserve account for nuclear generation. A
rate-regulated utility owning nuclear generation or purchasing energy under a
participation power agreement on nuclear generation may establish a reserve
account. The reserve account will spread the higher cost of energy used to
replace the energy normally received from nuclear sources. A surcharge would be
added to each kilowatt-hour from the nuclear source. The surcharges collected
are credited to the reserve account. During an outage or reduced level of
operation, replacement energy cost would be offset through debit to the reserve
account. The debit would be based upon the cost differential between
replacement energy cost and the average cost (including the surcharge) of
energy from the nuclear capacity. A reserve account shall have credit and debit
limitations equal in dollar amounts to the total cost differential for
replacement energy during a normal refueling outage.
f. A rate-regulated utility desiring to
collect expensed allowance costs and the gains and losses from allowance
transactions through the energy adjustment must file with the board monthly
reports including:
(1) The number and weighted
average unit cost of allowances used during the month to offset emissions from
the utility's affected units;
(2)
The number and unit price of allowances purchased during the month;
(3) The number and unit price of allowances
sold during the month;
(4) The
weighted average unit cost of allowances remaining in inventory;
(5) The dollar amount of any gain from an
allowance sale occurring during the month;
(6) The dollar amount of any loss from an
allowance sale occurring during the month; and
(7) Documentation of any gain or loss from an
allowance sale occurring during the month.
g. The energy adjustment clause factor may
include other automatic adjustment mechanisms as approved by the
board.
(3)
Utilities not making monthly changes to the adjustment amount.
Utilities that do not file monthly adjustments shall:
a. File the information pursuant to subrule
20.9(2) on a quarterly basis.
b.
File an annual reconciliation of the EAC factor and an update to the EAC
factor. The date of the annual reconciliation and update shall be specified in
the utility's tariff. The reconciliation shall follow the requirements of
subrule 20.9(2).
c. Include a
semiannual adjustment if the absolute value of the cumulative over recovery or
under recovery amount is greater than 20 percent of the forecasted net
recoverable energy costs for the EAC year. The semiannual adjustment filing
shall be filed six months after the annual reconciliation and update filing and
shall follow the requirements of subrule 20.9(2), but will be limited to the
remaining months of the year. The semiannual factor updates may utilize updated
forecasts for the costs and sales for the remainder of the year.
(4)
Review of energy
adjustment clause. At least biennially, but no more than annually, the
board shall require each utility that owns generation and utilizes an energy
adjustment clause to provide fuel, freight, and transportation invoices from
two months of the previous calendar year. The utility shall include an
explanation of and demonstrate how these invoices correspond to the energy
adjustment clause calculations. The explanation shall include inventory
accounting information and average cost of fuel and transportation included in
the energy adjustment clause calculations. The board will notify each utility
by May 1 as to which two months' invoices will be required. These invoices
shall be filed with the board no later than the subsequent November
1.
(5)
Annual
reports. With the first filing of the utility's EAC year, each utility
participating in a wholesale market shall file a report explaining how
participation results in reduced customer rates or reduces increases in
customer rates, identifying current and evolving market issues that are
expected to impact rates, and describing the utility's efforts to influence
market issues for the benefit of customers.
Notes
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