Missouri Code of State Regulations › Title 20 - DEPARTMENT OF COMMERCE AND INSURANCE › Division 4240 - Public Service Commission › Chapter 20 - Electric Utilities › Section 20 CSR 4240-20.090 - Fuel and Purchased Power Rate Adjustment Mechanisms

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: This rule sets forth the definitions,
				  structure, operation, and procedures relevant to the filing and processing of
				  applications to reflect prudently incurred fuel and purchased power costs
				  through an interim energy charge or a fuel adjustment clause which allows
				  periodic rate adjustments outside general rate proceedings.
(1) The following subsections define various
				terms as used in this rule:
(A) Accumulation
				period means the time period set by the commission in the general rate
				proceeding over which historical fuel and purchased power costs and
				fuel-related revenues are accumulated for purposes of determining the actual
				net energy costs (ANEC). An accumulation period may be a time period from three
				(3) to twelve (12) months with the timing and number of accumulation periods to
				be determined in the general rate proceeding establishing, continuing, or
				modifying the FAC;
(B) Actual net
				energy costs (ANEC) means prudently incurred fuel and purchased power costs net
				of fuel-related revenues of a rate adjustment mechanism (RAM) during the
				accumulation period;
(C) Base
				energy costs means the fuel and purchased power costs net of fuel-related
				revenues determined by the commission to be included in a RAM that are also
				included in the revenue requirement used to set base rates in a general rate
				case;
(D) Base factor (BF) means
				base energy costs rate or rates that are established in a general rate
				proceeding and are included in the utility's fuel adjustment clause (FAC). The
				base factor rates may vary within a year;
(E) Base rates means the tariffed rates that
				do not change between general rate proceedings;
(F) Electric utility or utility means
				electrical corporation as defined in section
				386.020, RSMo,
				subject to commission regulation pursuant to Chapters 386 and 393,
				RSMo;
(G) EFIS means the electronic
				filing and information system of the commission;
(H) FAC charge means the positive or negative
				dollar amount on each utility customer's bill, which in the aggregate is to
				recover from or return to customers the fuel and purchased power adjustment
				(FPA) amount;
(I) Fuel adjustment
				clause (FAC) means a mechanism established in a general rate proceeding which
				is designed to recover from or return to customers the fuel and purchased power
				adjustment (FPA) amounts through periodic changes to the fuel adjustment rates
				(FAR) made outside a general rate proceeding;
(J) Fuel adjustment rate (FAR) means the rate
				used to determine the FAC charge on each utility customer's bill during a
				recovery period of a FAC. The FAR shall be designed to recover from or return
				to customers the recovery period FPA. The FA R may be positive or
				negative;
(K) Fuel and purchased
				power adjustment (FPA) amount means the dollar amount intended to be recovered
				from or returned to customers during a given recovery period of a FAC. The FPA
				may be positive or negative. It includes:
1.
				The difference between the ANEC and NBEC of the corresponding accumulation
				period taking into account any incentive ordered by the commission;
2. True-up amount(s) ordered by the
				commission prior to or on the same day as commission approval of the FA R
				adjustment;
3. Prudence adjustment
				amount(s) ordered by the commission since the last adjustment to the
				FAR;
4. Interest; and
5. Any other adjustment amount(s) ordered by
				the commission;
(L) Fuel
				and purchased power costs means prudently incurred and used fuel and purchased
				power costs, including transportation costs. Prudently incurred costs do not
				include any increased costs resulting from negligent or wrongful acts or
				omissions by the utility.
1. If off-system
				sales revenues are not reflected in the rate adjustment mechanism (RAM), fuel
				and purchased power costs shall only reflect the prudently incurred fuel and
				purchased power costs necessary to serve the electric utility's Missouri retail
				customers.
2. Unless otherwise
				approved by the commission, fuel and purchased power costs do not include
				environmental costs as defined in
				4 CSR
				240-20.091(1) or renewable energy
				standard compliance costs as defined in
				4 CSR
				240-20.100(1). If such costs are
				included in fuel and purchased power costs, they shall not be included in
				another rate adjustment mechanism.
(M) Fuel-related revenues means those
				revenues related to the generation, sale, or purchase of energy or capacity.
				Fuel-related revenues may include, but are not limited to, off-system sales,
				emission allowance sales, and renewable energy credits or certificates whenever
				such renewable energy credits or certificates are not included in a Renewable
				Energy Standard Rate Adjustment Mechanism (RESRAM) in compliance with
				4 CSR
				240-20.100;
(N) General rate proceeding means a general
				rate increase proceeding or complaint proceeding before the commission in which
				all relevant factors that may affect the costs, or rates and charges of the
				electric utility are considered by the commission;
(O) Interest means monthly interest at the
				utility's short-term borrowing rate to accurately and appropriately remedy any
				over- or under-billing of the FPA amount during an accumulation period and
				recovery period, and any commission ordered refund of imprudently incurred
				costs;
(P) Interim energy charge
				(IEC) means a mechanism that includes a refundable fixed amount billed through
				an interim energy rate (IER) established in a general rate proceeding that
				permits an electric utility to recover some or all of its fuel and purchased
				power costs separate from the fuel and purchased power costs included in its
				base rates. Base energy cost in the base rates is the floor of the IEC. The
				base energy cost plus the fuel and purchased power costs billed through the IER
				is the ceiling of the IEC. An IEC may or may not include fuel-related revenues
				and costs related to those revenues;
(Q) Megawatt (MW) is one million (1,000,000)
				watts;
(R) Megawatt hour (MWh) is
				one million (1,000,000) watt hours or one thousand (1,000) kilowatt hours
				(kWh);
(S) MCF is one thousand
				(1,000) cubic feet of natural gas;
(T) MMBtu is one million (1,000,000) British
				thermal units (Btus);
(U) Net base
				energy costs (NBEC) means the fuel and purchased power costs net of
				fuel-related revenues billed during the accumulated period in base
				rates;
(V) Other parties means any
				party to the applicant's most recent general rate proceeding in which the RAM
				at issue was established, continued, or modified;
(W) Rate adjustment mechanism (RAM) refers to
				either a commission-approved fuel adjustment clause (FAC) or a
				commission-approved interim energy charge (IEC);
(X) Rebase base energy costs means the base
				energy cost as reset in each general rate proceeding in which the FAC is
				continued or modified;
(Y) Recovery
				period means the period over which the FA R is applied to retail customers'
				bills to recover the FPA. A recovery period is determined in a general rate
				case and shall not be longer than twelve (12) billing months;
(Z) Staff means the staff of the Public
				Service Commission; and
(AA)
				True-up amount means-
1. For a FAC, the
				true-up amount shall be the difference between the F PA and the utility's
				aggregate FAC charges billed for a recovery period.
A. If the aggregate FAC charges billed for
				recovery period are more than the FPA, the true-up amount will be
				negative.
B. If the aggregate FAC
				charges billed for a recovery period are less than the FPA, the true-up amount
				will be positive.
C. The electric
				utility may request in its general rate case to use the final Regional
				Transmission Organization (RTO) determinants to update the FPA for its true-up
				if the electric utility belongs to an RTO where the RTO may, after the
				beginning of the recovery period, finalize the determinants used to calculate
				the F PA for the recovery period.
2. For an IEC, the true-up amount shall be
				determined as follows for each consecutive twelve- (12-) month period-
A. If the actual fuel and purchased power
				cost is greater than the IEC ceiling, the true-up amount shall be
				zero;
B. If the actual fuel and
				purchased power cost is less than the IEC ceiling and greater than the IEC
				floor, the true-up amount shall be the difference between the actual fuel and
				purchased power cost and the combined IEC billed plus the base energy cost. The
				customers will be credited/refunded this amount; or
C. If the actual fuel and purchased power
				cost is less than the IEC floor, the true-up amount shall be the aggregate IEC
				billed. The customers will be credited/refunded this
				amount.