N.M. Admin. Code § 17.10.630.7 - DEFINITIONS

When used in Appendix A unless otherwise specified the following definitions will apply:

A. "Accounting Method" means the uniform system of accounting prescribed by the Commission for natural gas utilities.

(1) "Functional Accounting" means the grouping of plant and expense accounts according to the specified function or purpose which the plant or expense performs in rendering the utility service; for example, intangible, gas production and gathering, products extraction, storage, transmission, distribution, and general.

(2) "Primary Account" means the grouping of plant and expenditures by balance sheet account number; for example, accounts 101, 102, 103, etc.

(3) "Detailed Account" means the breakdown of plant and expenditures into subaccounts, that is, gas plant accounts; for example: accounts 301, 302, 303, etc.

B. Accounting Period:

(1) "Calendar Year" means a consecutive twelve-month accounting period beginning with January 1 and ending with December 31; and

(2) "Fiscal Year" means a consecutive twelve-month accounting period.

C. "Adjustment" means a calculation made with reasonable accuracy to the book balance of accounts to reflect an annualization, a known and measurable change, or an estimate based on projection for the full twelve-month period of the Test Year. "Pro Forma Adjustment" means a computation made to develop the effect of an annualization, a known and measurable change, or an estimate based on projection on the financial statements presented for Test Year purposes in a rate case.

D. "Allocation" means the process by which the total cost of service is separated into the major functions of plant, such as intangible, gas production and gathering, products extraction, storage, transmission, distribution, general; classified into the types of services provided, such as demand, commodity, customer; and assigned to the various classes of customers served within a regulatory jurisdiction or among regulatory jurisdictions.

E. "Annualization" means a computation made to reflect a full twelve-month effect of an item of income or expense which is recorded in the utility's financial statements for only a portion of a year.

F. "Base Period" means the applicant utility's twelve (12) consecutive months of actual experience as reflected on the book balance of accounts, the last day of which shall not be more than one hundred fifty (150) days prior to the date of tender for filing.

G. "Book Balance Amounts" means the amounts actually recorded by the applicant utility on its books of account. Whenever property and/or services are acquired for other than cash the basis for valuation for book purposes shall be explained.

H. "Classification" means the separation of plant and expenses into the principal categories of the services rendered such as demand related, commodity related, customer related, etc.

I. "Cost of Service" means the total annual cost of rendering the utility service expressed in monetary value including a return on invested capital and operational and administrative costs and expenses.

J. "Department" or "Division" means a responsibility center within the corporate structure of a public utility enterprise where revenues and expenses are accumulated as a result of a commodity or service rendered.

K. "Depreciated Original Cost" means the cost of property to the person first devoting it to the public service less the accrued depreciation reserve. Depreciated original cost shall not include the cost of reproduction as a going concern and other elements of value.

L. "Filing" means notification to the Commission by means of a tendered change in rate schedules by a public utility enterprise of its intent to initiate proceedings regarding such change pursuant to the provisions of the Commission's Administrative Code.

(1) The "Filing Date" shall occur on the date on which the tendered change in rate schedules is completed by receipt at the offices of the Commission.

(2) The "Effective Date" shall occur on the date that such tendered change in rate schedules is to become effective by the Commission pursuant to the provisions of the Commission's Administrative Code, thirty (30) days after the filing date, or on such other date as may be ordered by the Commission.

M. "Functionalization" means the separation of costs according to major function or purpose which the plant or expense performs in rendering the utility service; for example, intangible, gas production and gathering, products extraction, storage, transmission, distribution, general, etc.

N. "Lead-Lag Study" is a method sometimes employed in developing the amount of cash working capital to be included in a Rate Base determination for a utility company. The study seeks to measure and quantify the lag (delay) in receipt of revenues from customers from the time service is rendered offset by the lead, that is, the period the utility company has from the time it incurs an expense until cash is actually disbursed in payment for the expense.

O. "Litigation" means all contested matters before regulatory commissions, administrative bodies, and state or federal courts. Litigation also includes arbitration proceedings and other similar dispute resolution proceedings. Uncontested regulatory filings, contract drafting, negotiation and management, routine legal advice and other similar legal matters which are not in dispute are not considered litigation for the purposes of this rule.

P. "Rate Base" means the net investment value upon which the applicant utility shall be permitted to earn a specified return. Generally, the Rate Base represents the value of utility property used and useful in rendering the public utility service and may contain elements of value reflecting the cost of the utility property to the person first devoting it to the public service and other items such as cash working capital, materials, supplies, and prepayments. In accordance with existing New Mexico Statutes [NMSA 1978] the applicant's Rate Base may also reflect the cost of reproduction as a going concern and other elements of value. "Reproduction Cost" means the estimated cost to reproduce an item or property or other asset currently owned at current prevailing prices.

Q. "Rate Class" means a group of the applicant utility's customers which exhibit similar use characteristics and which are grouped together for cost allocation and rate design purposes.

R. "Test Year Period."

(1) Nothing herein shall preclude an applicant utility from adopting either an Historical Test Year Period or a Future Test Year Period, as defined below, as the basis for the determination by the Commission of the applicant utility's total revenue requirements.

(a) "Historical Test Year Period" means the Base Period after all proper adjustments such as for annualizations and known and measurable changes for which period the applicant utility's total revenue requirements shall be determined.

(b) "Future Test Year Period" means the twelve (12) consecutive months immediately following the last day of the applicant utility's twelve (12) months of actual experience [otherwise the Base Period] adjusted for known and measurable changes and/or estimates based on projections for which period the applicant utility's total revenue requirements shall be determined.

(2) The Test Year Period prescribed in the individual data request schedules shall incorporate the necessary adjustments in conformance with the definition given above for the type of Test Year Period selected by the applicant utility.

Notes

N.M. Admin. Code § 17.10.630.7

Recompiled 12/30/01