Section 3 AAC 52.820 - Calculation and collection of surcharge rate(a) Subject to the limitations in 3 AAC 52.840, eligible utilities may implement and update a plant improvement surcharge as described in the utility's approved plant improvement surcharge tariff to recover eligible capital costs.(b) The plant improvement surcharge must be a percentage, expressed to two decimal places, that is applied to all classes of service as a percentage of each customer's billed revenue. The percentage is calculated by dividing total annual eligible capital costs by projected annual revenue. For utilities with periodic updates more frequent than annual, the surcharge rate must be calculated as follows: (1) a utility updating its surcharge rate on a quarterly basis shall divide depreciation rates, approved return, and percentage allowance for taxes by four, and then apply the adjusted rates to eligible plants; the total eligible capital costs resulting from that calculation shall be divided by the projected quarterly revenue; (2) a utility updating its surcharge rate on a semi-annual basis shall divide depreciation rates, approved return, and percentage allowance for taxes by two, and then apply the adjusted rates to eligible plants; the total eligible capital costs resulting from that calculation shall be divided by the projected semi-annual revenue; (3) a utility updating its surcharge rate on a frequency other than quarterly or semi-annually shall divide depreciation rates, approved return, and percentage allowance for taxes by the length of the period between updates, expressed in days, divided by 365, and then apply the adjusted rates to eligible plant; the total eligible capital costs resulting from that calculation shall be divided by the projected revenue for the period the rates will be in effect. (c) The depreciation rates, return, and allowance for taxes used for calculation of the plant improvement surcharge must be, in order of preference, (1) the depreciation rates, return, and allowance for taxes approved in the utility's most recent fully litigated general rate case, if the general rate case was filed within five years of the initial rate or update, as applicable; depreciation rates from a more recent fully litigated depreciation proceeding under AS 42.05.471(a) may be used, unless otherwise provided by the commission order approving the depreciation rates; (2) the depreciation rates, return, and allowance for taxes most recently stipulated by all parties and accepted by the commission in a general rate case, if the general rate case was filed within five years of the initial rate or update, as applicable, and the stipulation does not prohibit use of those elements in future plant improvement surcharge calculations; depreciation rates from a more recent stipulated depreciation proceeding under AS 42.05.471(a) may be used, unless otherwise provided by the commission order accepting the stipulated depreciation rates; for stipulations dated before June 29, 2014, the stipulated cost elements may be used only if all parties to the stipulation consent and the public interest does not require use of litigated cost elements; (3) the depreciation rates, return, and allowance for taxes approved or accepted in the utility's most recent fully litigated or stipulated general rate case that was filed more than five years before the initial rate or update, as applicable, if, after notice and an opportunity to be heard, all parties to the most recent general rate case, and all current interested parties, consent and the commission finds that a general rate case is not in the public interest; the commission will specify the date for filing the utility's next general rate case, and the test year to be used, in the order approving the use of cost elements from a general rate case filed more than five years before the initial rate or update, as applicable; or (4) depreciation rates, return, and allowance for taxes proposed by the utility and approved by the commission only for the purpose of calculating a specific periodic plant improvement surcharge rate update; the commission will specify the date for filing the utility's next general rate case and the test year to be used, in the order approving the use of cost elements proposed solely for the purpose of a specific periodic plant improvement surcharge rate update. (d) The utility shall file revised tariff sheets, supporting data, and a copy of the customer notice required under 3 AAC 52.810(b) for each periodic update with the commission at least 10 days before the effective date of the update.Eff. 6/29/2014, Register 210, July 2014Authority:AS 42.05.141
AS 42.05.151