26 Del. Admin. Code § 1002-B-4.0

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

Section 1002-B-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 aid 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 A Rate Base Summary must be provided on Schedule 2. The rate base elements set forth on Schedule 2 correspond with the definition of Rate Base set forth on IV above. Utilities are not required to use all of these elements or may wish to include others not shown under the category of "Other Elements of Property" (line 10).

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 Item 4.2.1 above.

4.2.3 The column on Schedule 2 "Actual at Test Year End" means "per books" with the exception of Investor Supplied Cash Working Capital, line 8. For "Actual Test Year End" Investor Supplied Cash Working Capital, use the same procedures used for developing "claimed rate base" but applied to test year actual results of operations.

4.2.4 Proposed adjustments to or computations of rate base elements (i.e., Investor Supplied Cash Working Capital) must be fully explained on Schedule 2A.

4.2.5 Detailed description of Utility Plant in Service and related depreciation reserves must be provided on Schedule 2B. The totals must agree with the column titled "Actual Test Year End" on Schedule 2.

4.3 Please provide a narrative statement covering the following points for monopoly services not subject to competition:

4.3.1 Please explain any physical deficiencies in the present property and an estimate of the cost to correct such deficiencies. If plans are underway, disclose the nature of such plans.

4.3.2 Provide an estimate of customer or usage growth for two years following the end of the test year and how the utility plans to meet such growth and provide the estimated cost of providing additional facilities to meet expected growth.

4.3.3 Gas and water utilities must provide a narrative description of their respective sources of supply.

26 Del. Admin. Code § 1002-B-4.0