Rules & Regulations of the State of Tennessee
Title 1220 - Tennessee Public Utility Commission
Subtitle 1220-04 - Division of Public Utilities
Chapter 1220-04-14 - Utility Acquisitions
Section 1220-04-14-.03 - VALUE OF ACQUIRED ASSETS

Universal Citation: TN Comp Rules and Regs 1220-04-14-.03

Current through September 24, 2024

(1) The acquiring utility shall incorporate the acquired assets of the selling utility into the acquired rate base at the value ordered by the Commission after public notice and hearing.

(2) The applicant(s) shall present proof of the value of the acquired assets, including, but not confined to, evidence of the methodology used to value such assets and the sources of financial data, information and calculations used to derive the proposed value.

(3) The Commission recognizes the following methodologies may be appropriate to derive the value of the acquired assets:

(a) Average embedded cost of the acquiring utility;

(b) Reproduction cost new less depreciation;

(c) Any other reasonable valuation method proposed by a party to the acquisition proceeding and approved by the Commission; and

(d) Any other valuation method found by the Commission to be reasonable.

(4) Nothing herein is intended to limit the Commission from gathering and considering information it deems necessary to determine a just and reasonable value of the acquired assets.

(5) Notwithstanding the foregoing, the value of the assets added to the acquired rate base shall be just and reasonable and in no event shall exceed the negotiated sales price.

Authority: T.C.A. §§ 65-2-102 and 65-5-101, et seq.

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