26 Del. Admin. Code § 1002-A-4.0

Current through Register Vol. 27, No. 12, June 1, 2024

Section 1002-A-4.0 - Rate Base

4.1 Rate Base Defined

26 Del.C. § 102(3) defines Rate Base as follows:

(3)" "Rate base" means:

a. The original cost of all used and useful utility plant and intangible assets either to the first person who committed said plant or assets to public use or, at the option of the Commission, the first recorded book cost of said plant or assets; less;

b. Related accumulated depreciation and amortization; less;

c. The actual amount received and unrefunded as customer advances or contributions in aid of construction of utility plant, and less;

d. Any accumulated deferred and unamortized income taxes and investment credits related to plant included in paragraph a. above, plus;

e. Accumulated depreciation of customer advances and contributions in and of construction related to plant included in paragraph a above and plus;

f. Materials and supplies necessary to the conduct of the business and investor supplied cash working capital, and plus;

g . Any other element of property which, in the judgment of the Commission, is necessary to the effective operation of utility."

4.2 Jurisdictional Rate Base Summary

4.2.1 Submit a jurisdictional rate base summary on Schedule 2.

4.2.2 Indicate on schedule 2 in the column titled "26 Del.C. § 102(3) Letter Ref." the appropriate letter reference designating the Section of the Code upon which the applicant relies for the inclusion of each item in Rate Base as set forth in subsection 4.1.

4.3 Used and Useful Utility Plant

4.3.1 Complete Schedule 2A showing total utility plant in service by major plant categories, as allocated to this jurisdiction with adjustments, if any are proposed.

4.3.2 Where rate base is computed using a 12-month or 13-month average, provide the data for the end of each month included in the calculation. Please provide the calculation for either the 12-month or 13-month average used.

4.3.3 Where rate base is allocated among jurisdictions, identify the allocation factors used and the basis for using those allocation factors.

4.3.4 Adjustments to the test year data must be fully identified and explained.

4.3.5 Utilities permitted by law to collect a Distribution System Improvement Charge ("DSIC") shall not include post-test period projected DSIC-eligible plant in their proposed used and useful utility plant. All DSIC-eligible plant shall be collected through the DSIC as provided in 26 Del.C. §§ 314 and 315 and 26 DE Admin.Code 1009.

4.4 Intangible Assets

4.4.1 If intangible assets are claimed in rate base, complete Schedule No. 2B.

4.4.2 Provide a statement of the specific reasons for inclusion in rate base.

4.5 Accumulated Depreciation and Amortization

4.5.1 Complete Schedule 2C showing accumulated reserve for depreciation by major plant categories if records permit.

4.5.2 When rate base is computed using a 12-month average, provide the data for the end of each month included in the calculation.

4.5.3 When rate base is allocated among jurisdictions, identify the allocation factors used and the basis for using those allocation factors.

4.5.4 Adjustments to test year data must be fully identified and explained.

4.6 Unrefunded Customer Advances and Contributions in Aid of Construction

4.6.1 Provide a schedule showing the actual amounts at the beginning and end of the test year and test period.

4.6.2 If estimated amounts are included, explain the basis of such estimate.

4.7 Accumulated Deferred Income Taxes and Unamortized Investment Credit

4.7.1 Complete Schedule 2D providing complete analysis of all deferred income taxes. Provide 1 schedule each for Federal Income Taxes and State Income Taxes.

4.7.2 The specific deferred income taxes shown on Schedule 2D lists some but not necessarily all deferred income taxes that may be applicable to a particular utility, hence the accounts shown should be modified as appropriate.

4.7.3 Provide a statement which fully explains the utility's deferred tax accounting practices, i.e., the basis upon which annual tax deferrals are determined and the basis upon which deferred tax reserves are charged or credited to current period.

4.7.4 Identify and provide an itemization of each tax credit balance and amortization included in the utility's rate application.

4.7.5 Provide the amount of tax or other credits available but not utilized as of the end of the test year.

4.8 Accumulated Depreciation of Customer Advances and Contributions in Aid of Construction

4.8.1 Provide a statement which describes the accounting procedures used to segregate depreciation reserves between investor provided and contributed property.

4.8.2 Provide a schedule showing the actual amounts at the beginning and end of the test year and test period.

4.8.3 If estimated amounts are included, explain the basis of such estimates.

4.9 Material and Supplies

4.9.1 If a claim is made for Material and Supplies, provide a schedule showing the balance in each of the major groupings of material and supplies for each of the 12 months preceding the test year, for the test year and for the test period.

4.9.2 If estimated balances are included, explain the basis for such estimates.

4.9.3 Explain any variances greater than $500,000 for utilities with Total Gross Revenue equal or greater than $100,000,000 and 5% for utilities with Total Gross Revenue less than $100,000,000 for the period of time for which average Materials and Supplies total balances are included.

4.9.4 When materials and supplies are computed using an average, provide the balances for the end of the month included in the calculation.

4.10 Investor Supplied Cash Working Capital

4.10.1 Complete Schedule 2E showing the components of investor supplied cash working capital included in the rate base claim.

4.10.2 Other items. If any other items are included in the working capital claim, provide a full and complete explanation in support thereof including the calculation which demonstrates the amounts so included as investor-provided funds with reference to 26 Del.C. § 102(3).

4.11 Other Element of Property

4.11.1 Complete Schedule 2F to provide the amount, description, and justification for inclusion in rate base.

4.11.2 Provide a statement of the specific reasons for inclusion in rate base with reference to 26 Del.C. § 102(3).

4.11.3 If a rate base claim is made for non-DSIC property under construction but not used and useful in whole or in part during the test period, provide a schedule showing each major project and indicate whether or not the project will add capacity or replace existing capacity or both. If major units of capacity are being added, show in calculation the additional revenue expected to be realized. If major units of capacity are being retired, indicate the type of property, its original cost, accumulated reserves for depreciation and the expected date of retirement from service.

26 Del. Admin. Code § 1002-A-4.0

27 DE Reg. 117 (8/1/2023)
27 DE Reg. 890 (5/1/2024) (Final)