393.1006. Documentation to be submitted--notice to be published--examination of proposal--authorization of commission, when--pretax revenues, factors to be considered--revised rate schedule, filed whe
Documentation to be submitted--notice to be published--examinationof proposal--authorization of commission, when--pretax revenues,factors to be considered--revised rate schedule, filedwhen--rulemaking authority.
393.1006. 1. (1) At the time that a water corporation files apetition with the commission seeking to establish or change an ISRS, itshall submit proposed ISRS rate schedules and its supporting documentationregarding the calculation of the proposed ISRS with the petition, and shallserve the office of the public counsel with a copy of its petition, itsproposed rate schedules and its supporting documentation.
(2) Upon the filing of a petition, and any associated rate schedules,seeking to establish or change an ISRS, the commission shall publish noticeof the filing.
2. (1) When a petition, along with any associated proposed rateschedules, is filed pursuant to the provisions of sections 393.1000 to393.1006, the commission shall conduct an examination of the proposed ISRS.
(2) The staff of the commission may examine information of the watercorporation to confirm that the underlying costs are in accordance with theprovisions of sections 393.1000 to 393.1006, and to confirm propercalculation of the proposed charge, and may submit a report regarding itsexamination to the commission not later than sixty days after the petitionis filed. No other revenue requirement or ratemaking issues shall beexamined in consideration of the petition or associated proposed rateschedules filed pursuant to the provisions of sections 393.1000 to393.1006.
(3) The commission may hold a hearing on the petition and anyassociated rate schedules and shall issue an order to become effective notlater than one hundred twenty days after the petition is filed.
(4) If the commission finds that a petition complies with therequirements of sections 393.1000 to 393.1006, the commission shall enteran order authorizing the water corporation to impose an ISRS that issufficient to recover appropriate pretax revenues, as determined by thecommission pursuant to the provisions of sections 393.1000 to 393.1006.
3. A water corporation may effectuate a change in its rate pursuantto this section no more often than two times every twelve months.
4. In determining the appropriate pretax revenues, the commissionshall consider only the following factors:
(1) The current state, federal, and local income or excise tax rates;
(2) The water corporation's actual regulatory capital structure asdetermined during the most recent general rate proceeding of the watercorporation;
(3) The actual cost rates for the water corporation's debt andpreferred stock as determined during the most recent general rateproceeding of the water corporation;
(4) The water corporation's cost of common equity as determinedduring the most recent general rate proceeding of the water corporation;
(5) The current property tax rate or rates applicable to the eligibleinfrastructure system replacements;
(6) The current depreciation rates applicable to the eligibleinfrastructure system replacements;
(7) In the event information called for in subdivisions (2), (3), and(4) is unavailable and the commission is not provided with such informationon an agreed-upon basis, the commission shall refer to the testimonysubmitted during the most recent general rate proceeding of the watercorporation and use, in lieu of any such unavailable information, therecommended capital structure, recommended cost rates for debt andpreferred stock, and recommended cost of common equity that would producethe average weighted cost of capital based upon the various recommendationscontained in such testimony.
5. (1) An ISRS shall be calculated based upon the amount of ISRScosts that are eligible for recovery during the period in which thesurcharge will be in effect and upon the applicable customer class billingdeterminants utilized in designing the water corporation's customer ratesin its most recent general rate proceeding. The commission shall, however,only allow such surcharges to apply to classes of customers receiving abenefit from the subject water utility plant projects or shall prorate thesurcharge according to the benefit received by each class of customers;provided that the ISRS shall be applied in a manner consistent with thecustomer class cost-of-service study recognized by the commission in thewater corporation's most recent general rate proceeding, if applicable, andwith the rate design methodology utilized to develop the watercorporation's rates resulting from its most recent general rate proceeding.
(2) At the end of each twelve-month calendar period that an ISRS isin effect, the water corporation shall reconcile the differences betweenthe revenues resulting from an ISRS and the appropriate pretax revenues asfound by the commission for that period and shall submit the reconciliationand a proposed ISRS adjustment to the commission for approval to recover orrefund the difference, as appropriate, through adjustment of an ISRS.
6. (1) A water corporation that has implemented an ISRS pursuant tothe provisions of sections 393.1000 to 393.1006 shall file revised rateschedules to reset the ISRS to zero when new base rates and charges becomeeffective for the water corporation following a commission orderestablishing customer rates in a general rate proceeding that incorporatesin the utility's base rates subject to subsections 8 and 9 of this sectioneligible costs previously reflected in an ISRS.
(2) Upon the inclusion in a water corporation's base rates subject tosubsections 8 and 9 of this section of eligible costs previously reflectedin an ISRS, the water corporation shall immediately thereafter reconcileany previously unreconciled ISRS revenues as necessary to ensure thatrevenues resulting from the ISRS match as closely as possible theappropriate pretax revenues as found by the commission for that period.
7. A water corporation's filing of a petition to establish or changean ISRS pursuant to the provisions of sections 393.1000 to 393.1006 shallnot be considered a request for a general increase in the watercorporation's base rates and charges.
8. Commission approval of a petition, and any associated rateschedules, to establish or change an ISRS pursuant to the provisions ofsections 393.1000 to 393.1006 shall in no way be binding upon thecommission in determining the ratemaking treatment to be applied toeligible infrastructure system replacements during a subsequent generalrate proceeding when the commission may undertake to review the prudence ofsuch costs. In the event the commission disallows, during a subsequentgeneral rate proceeding, recovery of costs associated with eligibleinfrastructure system replacements previously included in an ISRS, thewater corporation shall offset its ISRS in the future as necessary torecognize and account for any such overcollections.
9. Nothing contained in sections 393.1000 to 393.1006 shall beconstrued to impair in any way the authority of the commission to reviewthe reasonableness of the rates or charges of a water corporation,including review of the prudence of eligible infrastructure systemreplacements made by a water corporation, pursuant to the provisions ofsection 386.390, RSMo.
10. The commission shall have authority to promulgate rules for theimplementation of sections 393.1000 to 393.1006, but only to the extentsuch rules are consistent with, and do not delay the implementation of, theprovisions of sections 393.1000 to 393.1006. Any rule or portion of arule, as that term is defined in section 536.010, RSMo, that is createdunder the authority delegated in this section shall become effective onlyif it complies with and is subject to all of the provisions of chapter 536,RSMo, and, if applicable, section 536.028, RSMo. This section and chapter536, RSMo, are nonseverable and if any of the powers vested with thegeneral assembly pursuant to chapter 536, RSMo, to review, to delay theeffective date, or to disapprove and annul a rule are subsequently heldunconstitutional, then the grant of rulemaking authority and any ruleproposed or adopted after August 28, 2003, shall be invalid and void.
(L. 2003 H.B. 208)