Arizona Administrative Code › Title 14 - PUBLIC SERVICE CORPORATIONS; CORPORATIONS AND ASSOCIATIONS; SECURITIES REGULATION › Chapter 2 - CORPORATION COMMISSION - FIXED UTILITIES › Article 1 - GENERAL PROVISION › Section R14-2-103 - Defining Filing Requirements in Support of a Request by a Public Service Corporation Doing Business in Arizona for a Determination of the Value of Property of the Corporation and of the Rate of Return Thereon, or in Support of Proposed Increased Rates or Charges

Current through Register Vol. 30, No. 28, July 12, 2024
A. Purpose and definitions
1. Purpose: The purpose of this General Order
				is to define the specific financial and statistical information required to be
				filed with a request by a public service corporation doing business in Arizona
				for a determination of the value of the property of the corporation and of the
				rate of return to be earned thereon, with regard to proposed increased rates or
				charges. This General Order does not apply to the implementation of previously
				approved adjustment or escalation clauses.
2. Applicability of rules: These rules shall
				apply to all electric, gas, telephone, telegraph, water and private fire
				protection public service corporations under the jurisdiction of the
				Commission. These rules are applicable both to all filings made after the
				effective date of this General Order and to any rate proceeding pending on the
				effective date of this General Order in which the Commission has issued no
				final decision. These rules are not intended to prohibit utilities from filing
				additional schedules, exhibits and other documents in which the Commission has
				issued no final decision. These rules are not intended to prohibit utilities
				from filing additional schedules, exhibits and other documents which may be
				material to the rate proceeding, nor are they intended to prohibit the
				Commission from considering such schedules, exhibits or other documents in
				making its determination. In pending proceedings, to the extent that the
				information required by this General Order is not included in the public
				service corporation's exhibits or is not otherwise in the record, such
				information shall be supplied as soon as possible unless a waiver is requested
				and granted pursuant to subsection (B)(5).
3. Definitions: Terminology used in this
				General Order is defined as follows:
a.
				"Accounting method" -- the accounting method prescribed or recognized by the
				Commission.
b. "Commission" -- The
				Arizona Corporation Commission.
c.
				"Cost of service" -- The total cost of providing service to a defined segment
				of customers, as determined by the application of logical and generally
				accepted cost analysis and allocation techniques.
d. "Department" -- A responsibility center
				within a combination utility where revenues and costs are accumulated by
				commodity or service rendered.
e.
				"Depreciated original cost" -- The cost of property to the person first
				devoting it to public service, less the depreciation reserve, which shall
				include accrued depreciation and amortization calculated in accordance with
				General Order R14-2-102. Depreciated original cost shall not include any
				goodwill or going concern value, nor shall it include certificate value in
				excess of payment made or costs incurred in the initial acquisition
				thereof.
f. "Exhibit" -- One or
				more schedules which support a rate filing or testimony in a rate
				proceeding.
g. "Filing" -- An
				application and required schedules, exhibits or other documents filed by a
				public service corporation to initiate any rate proceeding under this Section.
				For all Class A and B utilities and for Class C electric and gas utilities, the
				filing shall include direct testimony in support of the application. For Class
				C water, sewer, and telephone utilities and for all Class D and E utilities,
				the filing shall include a written description of the components of the
				application. Nothing in this Section shall be construed to prohibit a public
				service corporation, prior to making a filing, from giving the Commission
				informal pre-filing notice of its intent to make a filing. Such pre-filing
				notice would permit the Commission, on a tentative basis, to assign a hearing
				date and would permit agreement on an appropriate test year.
h. "Original cost rate base" -- An amount
				consisting of the depreciated original cost, prudently invested, of the
				property (exclusive of contributions and/or advances in aid of construction) at
				the end of the test year, used or useful, plus a proper allowance for working
				capital and including all applicable pro forma adjustments.
i. "Pro forma adjustments" -- Adjustments to
				actual test year results and balances to obtain a normal or more realistic
				relationship between revenues, expenses and rate base.
j. "Projected year" -- The year immediately
				following the test year.
k.
				"Projections" -- Estimate of future results of operations based upon known
				facts or logical assumptions concerning future events.
l. "Prudently invested" -- Investments which
				under ordinary circumstances would be deemed reasonable and not dishonest or
				obviously wasteful. All investments shall be presumed to have been prudently
				made, and such presumptions may be set aside only by clear and convincing
				evidence that such investments were imprudent, when viewed in the light of all
				relevant conditions known or which in the exercise of reasonable judgment
				should have been known, at the time such investments were made.
m. "Rate schedule" -- A schedule of rates and
				conditions for a specific classification of customer or for other specific
				services.
n. "Reconstructed Cost
				New (RCND) Rate Base" -- An amount consisting of the depreciated reconstruction
				cost new of the property (exclusive of contributions and/or advances in aid of
				construction) at the end of the test year, used and useful, plus a proper
				allowance for working capital and including all applicable pro forma
				adjustments. Contributions and advances in aid of construction, if recorded in
				the accounts of the public service corporation, shall be increased to a
				reconstruction new basis.
o.
				"Staff" -- The staff of the Commission or its designated
				representatives.
p. "Test year" --
				The one-year historical period used in determining rate base, operating income
				and rate of return. The end of the test year shall be the most recent practical
				date available prior to the filing.
q. "Utilities" -- For purposes of the
				Section, utilities are electric, gas, telephone, water, sewer or any other that
				maybe supplying service and/or commodities which in the future may be adjudged
				a public service corporation and under the jurisdiction of this Commission, are
				classified as follows:
Annual Operating Revenue
Class A
B
C
D
E
Electric & Gas
Exceeding
$
$
$
Less than
$
$
$
$
$
10,000,000
3,000,000 to
1,000,000 to
250,000 to
250,000
10,000,000
2,999,999
999,999
Water & Sewer
Exceeding
$
$
$
Less than
$
$
$
$
$
10,000,000
3,000,000 to
1,000,000 to
250,000 to
250,000
10,000,000
2,999,999
999,999
Telephone
Exceeding
$
$
$
Less than
$
$
$
$
$
10,000,000
3,000,000 to
1,000,000 to
250,000 to
250,000
10,000,000
2,999,999
999,999
Annual operating revenues are those gross utility operating
				  revenues derived from jurisdictional operations, including the requested rate
				  relief. A combination utility is a utility which provides more than one of the
				  com-modities or services enumerated in this subsection. For combination
				  utilities, the annual operating revenue, including the requested rate relief,
				  for the specific subsidiary, department, or operating division requesting the
				  rate change shall be used for classification purposes.
r. "Working capital" -- A proper allowance
				for cash, materials and supplies and prepayments.