Current through March 20, 2024
Authority: IC
8-1-2-6.6
Affected: IC 8-1-2; IC
8-1.5-3-8
Sec. 14.
A utility seeking ratemaking treatment under this rule for
the value of its qualified pollution control property under construction shall
use the following parameters in computing its related revenue
requirement:
(1) If the utility is an
investor-owned utility, it shall compute its weighted cost of capital used in
the revenue requirement determination by including the following:
(A) The amount, ratio, and cost rate for the
utility's long term debt and preferred equity capital as of the date of
valuation of the utility's qualified pollution control property under
construction for which the utility is seeking ratemaking treatment.
(B) The amount, ratio, and cost rate for the
utility's common equity capital, where this amount corresponds to the date of
valuation of the utility's qualified pollution control property under
construction, and where the cost rate has been established by the commission in
a previous proceeding involving the utility's base rates and charges. If the
commission has established a range of cost rates for the utility's common
equity capital, the utility shall use the midpoint of such range for the
computation of its overall weighted cost of capital. The commission shall not
make a new finding on the cost rate for the common equity capital of a utility
in a proceeding under this rule unless the proceeding also involves the
establishment or investigation of the utility's base rates and
charges.
(C) The appropriate
amount, ratio, and cost rate as of the date of valuation of the utility's
qualified pollution control property under construction for such capital
structure components as deferred taxes, customer deposits, and investment tax
credits.
(2) If the
utility is a municipal utility, it shall compute the revenue requirement
associated with its qualified pollution control property under construction for
which the utility is seeking ratemaking treatment under this rule on the basis
of the following:
(A) The interest payments on
indebtedness the utility has accrued in connection with its construction of
qualified pollution control property, where the amount of indebtedness is
reduced by amounts previously recognized in the utility's rates for debt
service for the project or amounts previously recognized in rates for
extensions and replacements used for the construction of the
property.
(B) The return on plant
authorized by the commission in the utility's last general rate case. The
commission shall not make a new finding on the utility's return on plant in a
proceeding under this rule unless the proceeding also involves the
establishment or investigation of the utility's base rates and
charges.
