Nev. Admin. Code § 704.88875

Current through November 25, 2024

Section 704.88875 - Long-term portfolio energy credits contracts, long-term renewable energy contracts and energy efficiency contracts: Mitigation for impact of imputed debt on capital structure of utility provider

1. For a long-term portfolio energy credits contract, long-term renewable energy contract or energy efficiency contract for a term of more than 3 years, a utility provider may request that the Commission approve mitigation for the impact of imputed debt on the capital structure of the utility provider.

2. If a utility provider wishes to submit a request to the Commission pursuant to subsection 1, the utility provider must include the request in its resource plan which includes the long-term portfolio energy credits contract, long-term renewable energy contract or energy efficiency contract and which is submitted to the Commission for approval pursuant to the provisions of NAC 704.9005 to 704.9525, inclusive.

3. In the request submitted pursuant to subsection 1, the utility provider:

(a) Shall include its estimate of the amount of the impact of imputed debt on the capital structure of the utility provider measured as a percentage of the net present value of the capacity payments over the life of the contract;

(b) Shall, if the capacity of the portfolio energy system or efficiency measure is not specified in the contract, propose the percentage of the value of the contract payment to be assumed as a capacity payment; and

(c) May propose an amount to be added to the cost of the contract which is equal to a compensating component in the capital structure of the utility provider. A utility requesting an amount to be added to the cost of a long-term portfolio energy credits contract, long-term renewable energy contract or energy efficiency contract shall provide information which illustrates the financial impact from any imputed debt cost and any assumptions used to develop related imputed debt calculations.

4. In evaluating a request submitted pursuant to subsection 1, the Commission will consider:

(a) The effect that the proposals in the request will have on the rates paid by the retail customers of the utility provider; and

(b) The recovery of costs equal to a compensating component in the capital structure during the utility provider's next deferred energy rate proceeding.

5. If the Commission approves a request submitted pursuant to subsection 1:

(a) The Commission will set forth in its order approving the request the impact of imputed debt on the capital structure of the utility provider measured as a percentage of the net present value of the capacity payments over the life of the contract;

(b) The costs, if any, determined by the Commission as necessary to mitigate imputed debt costs will be collected with other contract costs as a component of the base tariff energy rate; and

(c) The utility provider shall segregate imputed debt revenues from deferred energy revenues and record such revenues as general rate revenues in general rate cases.

6. As used in this section:

(a) "Capacity payment" means the payment for the acquisition of a specified quantity of generating capacity over a specified period of time.

(b) "Compensating component" means the imputed equity necessary to offset the effects of the imputed debt associated with a long-term portfolio energy credits contract, long-term renewable energy contract or energy efficiency contract.

Nev. Admin. Code § 704.88875

Added to NAC by Pub. Utilities Comm'n by R167-05, eff. 2-23-2006; A by R064-10, 10-15-2010

NRS 703.025, 704.210, 704.741, 704.7821, 704.7828