New Mexico Administrative Code
Title 17 - PUBLIC UTILITIES AND UTILITY SERVICES
Chapter 12 - WATER SERVICES
Part 1 - GENERAL PROVISIONS FOR WATER UTILITIES
Section 17.12.1.7 - DEFINITIONS
Current through Register Vol. 35, No. 18, September 24, 2024
When used in NMPSC Rules 710 through 780 [17.12.1 NMAC, 17.12.720 through 17.12.780 NMAC] unless otherwise specified the following definitions will apply.
A. "Accounting Method" means the uniform system of accounting prescribed by the Commission.
B. "Accounting Period":
C. "Adjustment" means a calculation made with reasonable accuracy to the book balance of accounts to reflect a known and measurable change or 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 a known and measurable change 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 classified into the types of services provided such as demand, commodity, base, extra capacity, and 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 with a Future Test Year Period.
G. "Book Balance Accounts" 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. "Classification of Water Utilities": For purposes of efficient administration of the Commission's regulatory authority under NMPSC Rules 710 through 780 [17.12.1 NMAC, 17.12.720 through 17.12.780 NMAC], water utilities are divided into three (3) groups:
J. "Cost of Service" means the total annual cost of rendering the utility service expressed in monetary value, including a rate of return on invested capital.
K. "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 by such Department or Division.
L. "Depreciated Original Cost" (Book Value of Property) means the cost of property on the books of the utility 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 nor any other consideration of other than book value.
M. "Filing" means notification to the Commission by means of a tendered change in tariff sheets and payment of the required fees by a public utility regarding such change pursuant to the provisions of the Commission's Code of Rules and Regulations.
N. "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, source of supply, pumping, water treatment, transmission and distribution, etc.
O. "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 of the expense.
P. "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.
Q. "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 New Mexico statutes the applicant's Rate Base may also reflect the cost of reproduction as a going concern and other elements of value.
R. "Rate Class" means a group of customers which exhibit similar use characteristics and which are grouped together for cost allocation, rate design, and billing purposes.
S. "Reproduction Cost" means the estimated cost to reproduce an item or property or other asset currently owned at current prevailing prices.
T. "Test Year Period": Nothing herein shall preclude an applicant utility from adopting either an Historical Test Year Period or a Future Test Year Period, each as defined below, as the basis of the determination by the Commission of the applicant utility's total revenue requirements.
U. "Water Unit Measurement": The standard unit measure of water consumption shall be expressed in gallons. To change cubic feet of water to gallons, the conversion factor of 7.481 shall be used. To change barrels of water to gallons, the conversion factor of 42 shall be used.
V. "Water Utility": means every corporation, individual, partnership, company, builder, developer, or other person not otherwise engaged solely in interstate commerce which owns, operates, leases, or controls any plant, property, or facility for supply, storage, or furnishing to or for the public water for manufacturing, municipal, domestic, or other uses. The definition excludes: