26 Del. Admin. Code § 1002-A-6.0

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

Section 1002-A-6.0 - Rate of Return

6.1 Summary of Claimed Rate of Return

6.1.1 Complete Schedule 4 providing a summary report of the proposed rate of return, including a weighted cost of capital analysis.

6.1.2 Complete Schedule 4A providing the utility's actual and estimated capital structure for the end of the test year and test period. A capital structure based on a time period beyond the test year shall be accompanied by a statement of projected new issues and retirements.

6.2 Embedded Cost of Debt

6.2.1 Describe how short-term debt is allocated between rate base and non-rate base Construction Work in Progress. Describe compensating balance requirements of credit line banks and supply documentation in support of such requirements. If the compensating balance requirements exceed the cash and float included in working capital claim, give a statement explaining the excess.

6.2.2 Complete Schedules 4B and 4C to show the composition of the embedded cost of long-term debt. Use the debt costs most appropriate to the capital structure adopted, e.g., if a test year end capital structure is used, use a test year end embedded cost analysis.

6.2.3 Describe long-term debt reacquisitions by utility and parent company, if applicable, as follows: reacqusitions by issue by year; total gain by acquisitions by year; accounting of gain for income tax and book purposes.

6.2.4 In the event that the utility believes the true or economic cost of debt exceeds the nominal costs shown in Schedule 4C because of convertible features, sale with warrants or for any other reason, a full statement of the basis for this claim should be provided.

6.3 Embedded Cost of Preferred Stock

6.3.1 Complete Schedules 4D and E to show the cost of preferred stock. Use the preferred stock cost rates most appropriate to the capital structure adopted for cost of capital computations, i.e., if a test year end capital structure is used, use a test year end embedded cost analysis.

6.3.2 Describe preferred stock reacquisitions by c the utility over the past 5 years.

6.3.3 In the event that the utility claims a true or economic cost higher than the nominal rate shown in Schedule 4E due to convertibility or for any other reason, provide a full statement of the basis for this claim.

6.4 Common Equity Cost Rates

6.4.1 Complete Schedule 4F providing data on all common equity public stock offerings (including registered secondary offerings) for the current year and for the previous five calendar years.

6.4.2 Provide a summary statement of all stock dividends, splits or par value changes in last five years.

6.4.3 Provide comparative financial data on Schedules 4G and 4H for the test period without rate increase for the test year, for the most recent calendar year and for the next most recent calendar year.

6.4.4 Provide complete analysis and support for the utility's claimed common equity return rate.

6.4.5 State what coverage requirements or capital structure ratios are required in the most restrictive of applicable indentures and how these measures are computed.

6.5 Parent-Subsidiary Relationship

6.5.1 Where the utilityis a subsidiary of a parent corporation, the data in Schedules 4A, B, C and D shall also be provided for the parent company or on a consolidated basis.

6.5.2 If the utility proposes to utilize the parent company's capital structure or capital costs, or to provide such data on a consolidated basis, the reasons for this claim must be fully stated and supported.

26 Del. Admin. Code § 1002-A-6.0

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