(j) Cost recovery. Eligible costs under this
section may be recovered as follows.
(1)
Ratemaking proceedings. A TDU may request recovery of eligible costs, including
any deferred expenses, through a standalone TEEEF rider proceeding, a
proceeding under §
25.243 of this title (relating to
Distribution Cost Recovery Factor (DCRF)), or in another ratemaking proceeding
where it is appropriate to recover distribution invested capital and associated
costs. A river authority may request recovery of eligible costs, including any
deferred expenses, through a ratemaking proceeding where it is appropriate to
recover distribution invested capital and associated costs or through a
standalone TEEEF rider proceeding.
(A) A TDU
must provide notice to REPs of the approved rates not later than the 45th day
prior to the effective date of the approved.
(B) TEEEF costs must not be allocated to, or
collected from, retail transmission service customers or wholesale transmission
service at transmission voltage customers.
(C) Notwithstanding the provisions of §
25.243 of this title, an
allocation of TEEEF costs among distribution-level rate classes, based on
substation-level class non-coincident peak demand, regardless of the time at
which the class demand occurs, from the TDU's current or most recent base-rate
proceeding, is presumed to be reasonable.
(D) TEEEF rates may not be established on a
per-kilowatt-hour basis for any customer class that includes demand
charges.
(E) Upon any amendment to
a lease under this section that would reduce the rate of cost recovery
necessary for a TEEEF, a TDU must submit an application to reflect the reduced
rate of cost recovery necessary, by the earlier of three months from the lease
amendment or the TDU's next DCRF proceeding.
(F) TEEEF costs must not be included in base
rates. All TEEEF costs must be recovered through a single rider associated with
TEEEF. A TDU with a previously established TEEEF rider may recover additional
TEEEF costs by updating the existing TEEEF rider.
(G) TEEEF costs will not be reviewed for
reasonableness, necessity, or prudence in a proceeding other than a base-rate
proceeding, unless the presiding officer finds good cause to review them in
another proceeding.
(H) In any
proceeding in which TEEEF costs are reviewed for reasonableness, necessity, or
prudence, the application must include the after-action reports for significant
power outages during the period for which costs are being reviewed. The
application must also include the leases, filed confidentially, for any leased
TEEEF for which costs are being reviewed.
(I) A TDU that, prior to the effective date
of this rule, received commission approval in a contested case proceeding for
an amount of TEEEF generating capacity may request approval of reductions of
that capacity through a subsequent standalone TEEEF rider proceeding made in
accordance with this paragraph.
(2) Notice. The notice for any ratemaking
proceeding in which eligible TEEEF costs are sought must specifically identify
those eligible costs.
(3) Affiliate
contracts. For any contract between a TDU and an affiliate, the TDU bears the
burden of proof to show that the terms to the TDU were reasonable and necessary
and did not exceed the prices charged by the supplying affiliate to its other
affiliates or divisions or to unaffiliated persons within the same market area
or having the same market conditions. In addition, all affiliate payments must
comply with the requirements of PURA §36.058.
(4) Reconciliation. If TEEEF rates include
any eligible costs that have not been reviewed for reasonableness, necessity,
and prudence, any rates to recover any portion of those costs are temporary
rates that must be reconciled in the TDU's next base-rate proceeding, including
to determine whether the costs are reasonable, necessary, and prudent.
(A) In reconciling TEEEF costs, all revenues
received associated with TEEEF programs, including actual rate revenues and
mutual assistance reimbursements, must be applied to offset reasonable,
necessary, and prudent TEEEF costs as these costs and revenues were incurred
and received.
(B) A TDU must
provide comprehensive testimony and workpapers supporting the reconciliation of
all eligible costs and associated rate revenues as part of any base-rate
proceeding application. Any amounts recovered through rates approved under this
subsection that are found to have been unreasonable, unnecessary, or imprudent,
plus the corresponding return, taxes, and carrying costs, must either be
refunded or applied as an offset to any outstanding regulatory asset associated
with eligible costs. In any proceeding in which the commission determines that
a TDU has included in rates any amounts deemed unreasonable, unnecessary, or
imprudent, or that the TDU has otherwise over-recovered costs, the commission
may order a compliance proceeding to determine the amounts and manner of any
necessary refunds to ratepayers or the proper accounting of over-recovered
amounts as an offset to any outstanding regulatory assets associated with
eligible costs. Carrying costs will be determined as follows:
(i) For the time period beginning with the
date on which over-recovery is determined to have begun to the effective date
of the TDU's base rates set in the base-rate proceeding in which the costs are
reconciled, carrying costs will accrue monthly and will be calculated using an
effective monthly interest rate based on the same rate of return that was
applied to the TDU's rate base included in base rates in effect when the
over-recovery began.
(ii) For the
time period beginning with the effective date of the TDU's rates set in the
base-rate proceeding in which the costs are reconciled, carrying costs will
accrue monthly and will be calculated using an effective monthly interest rate
based on the TDU's rate of return authorized in that base-rate
proceeding.
(5)
As part of the reconciliation of TEEEF costs, the commission may consider
whether the leased TEEEF had the characteristics required to perform the
functions authorized by the commission, whether the TEEEF was properly utilized
to restore power during significant power outages, including appropriate
pre-outage preparations such as positioning and securing fuel or the units, or
any other factor relevant to the prudence or reasonableness of the TDU's
procurement or operation of TEEEF.