Florida Administrative Code › 25 - PUBLIC SERVICE COMMISSION › 25 - Departmental › Chapter 25-6 - ELECTRIC SERVICE BY ELECTRIC PUBLIC UTILITIES › Part X › Subpart A - Accounting Reports › Section 25-6.1351 - Cost Allocation and Affiliate Transactions

Current through Reg. 50, No. 138; July 16, 2024
(1) Purpose. The purpose of this rule is to
					 establish cost allocation requirements to ensure proper accounting for
					 affiliate transactions and utility nonregulated activities so that these
					 transactions and activities are not subsidized by utility ratepayers. This rule
					 is not applicable to affiliate transactions for purchase of fuel and related
					 transportation services that are subject to Commission review and approval in
					 cost recovery proceedings.
(2)
					 Definitions.
(a) Affiliate - Any entity that
					 directly or indirectly through one or more intermediaries, controls, is
					 controlled by, or is under common control with a utility. As used herein,
					 "control" means the possession, directly or indirectly, of the power to direct
					 or cause the direction of the management and policies of a company, whether
					 such power is exercised through one or more intermediary companies, or alone,
					 or in conjunction with, or pursuant to an agreement, and whether such power is
					 established through a majority or minority ownership or voting of securities,
					 common directors, officers or stockholders, voting trusts, holding trusts,
					 associated companies, contracts or any other direct or indirect
					 means.
(b) Affiliate Transaction -
					 Any transaction in which both a utility and an affiliate are each participants,
					 except transactions related solely to the filing of consolidated tax
					 returns.
(c) Cost Allocation Manual
					 (CAM) - The manual that sets out a utility's cost allocation policies and
					 related procedures.
(d) Direct
					 Costs - Costs that can be specifically identified with a particular service or
					 product.
(e) Fully Allocated Costs
					 - The sum of direct costs plus a fair and reasonable share of indirect
					 costs.
(f) Indirect Costs - Costs,
					 including all overheads, that cannot be identified with a particular service or
					 product.
(g) Nonregulated - Refers
					 to services or products that are not subject to price regulation by the
					 Commission or not included for ratemaking purposes and not reported in
					 surveillance.
(h) Prevailing Price
					 Valuation - Refers to the price an affiliate charges a regulated utility for
					 products and services, which equates to that charged by the affiliate to third
					 parties. To qualify for this treatment, sales of a particular asset or service
					 to third parties must encompass more than 50 percent of the total quantity of
					 the product or service sold by the entity. The 50 percent threshold is applied
					 on an asset-by-asset and service-by-service basis, rather than on a product
					 line or service line basis.
(i)
					 Regulated - Refers to services or products that are subject to price regulation
					 by the Commission or included for ratemaking purposes and reported in
					 surveillance.