N.M. Admin. Code § 17.9.540.16 - DEBT COST ADJUSTMENT CLAUSE
A. A coop's schedule of rates proposed
pursuant to NMPSC Rule 540 [17.9.540 NMAC] may provide for the flow-through to
customers of increases and decreases in the cost of debt capital incurred
pursuant to securities, the issuance of which has been approved by the
Commission, above or below debt cost utilized to establish the rates.
B. Unless the coop obtains the approval of
the Commission or presiding officer for a different methodology, the clause in
a rate containing such an adjustment shall provide at a minimum for the
following:
(1) the Base Cost shall be the cost
of Commission authorized debt capital as of the end of the test period upon
which the rates were established, as annualized;
(2) the applicable debt cost expense shall be
determined every calendar quarter by adding the actual changes in the Base Cost
to or, as the case may be, subtracting these changes from the actual cost of
new debt under securities approved by the Commission and incurred after the end
of the period used to determine the Base Cost;
(3) a demand allocation factor shall be
determined for each class of customers (the demand allocation factor shall be
that upon which the cooperative's current rates were established but may be
adjusted by the cooperative with prior approval of the Commission Executive
Director on the basis of a more recent cost of service study or known and
measurable changes); and
(4) the
Debt Cost Adjustment amount to be allocated to each class of customers for the
next succeeding calendar quarter shall be the result of multiplying items (2)
and (3) above. The distribution of the Debt Cost Adjustment amount among the
customers within each class may be on the basis of projected kilowatt demand or
projected kilowatt-hour sales, as the coop elects to designate in its schedule
of rates.
C. The coop
shall file with the Commission the data and calculations called for by
Paragraphs (1), (2), (3) and (4) of Subsection B of this Section above a
minimum of ten (10) days before an adjustment factor is to be applied to
billings.
D. The coop shall
establish a Balancing Account to compensate for under-collections and
over-collections of revenue by increasing or decreasing the adjustment factor
for the next following calendar quarter and shall file with the Commission one
(1) year from the date of the first Debt Cost Adjustment filing and annually
thereafter a reconciliation of Debt Cost Adjustment revenues and expenses and
the operation of the Balancing Account. The Commission will examine this filing
to insure that only the appropriate revenues are being recovered.
E. The adjustment factor expressed in either
cents per kilowatt-hour or cents per kilowatt and the resultant billing period
charge shall be shown on each bill as Debt Cost Adjustment.
F. Notwithstanding NMPSC Rule 540.11
[17.9.540.16 NMAC], an effective
schedule of rates, or the filing of information with the Commission, the
Commission reserves the authority to entertain complaints and undertake
investigations of Debt Cost Adjustments as provided in the Public Utility Act
and NMPSC Rule 110 [17.1.2 NMAC].
Notes
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