New Jersey Administrative Code › Title 14 - PUBLIC UTILITIES › Chapter 9 - WATER AND WASTEWATER › Subchapter 10 - DISTRIBUTION SYSTEM IMPROVEMENT CHARGE › Section 14:9-10.2 - Definitions

Current through Register Vol. 56, No. 14, July 15, 2024
For the purposes of this subchapter, the following words and
				  terms shall have the following meanings, unless the context clearly indicates
				  otherwise. Additional definitions that apply to this subchapter can be found at
				  N.J.A.C.
				  14:3-1.1.
"Adjusted weighted average cost of capital" does not include
				  short-term debt, so long as the water utility does not have short-term debt in
				  its approved capital structure. The equity component of the pre-tax adjusted
				  weighted average cost of capital will be the equity rate approved by the Board
				  in the water utility's most recent base rate case; however, the approved
				  embedded cost of debt will be adjusted semi-annually, to reflect the actual
				  embedded cost of debt at the end of the DSIC recovery period, never to exceed
				  the actual embedded cost of debt approved in the last base rate case.
"Base spending" means the level of investment equal to the
				  water utility's depreciation expense for utility plant accounts: 343
				  (Transmission & Distribution Mains), 345 (Services), and 348 (Hydrants), as
				  reported in the water utility's most recent annual report to the Board, at the
				  time the Foundational Filing is submitted. The investments eligible for
				  inclusion in base spending are the same as set forth in
				  N.J.A.C.
				  14:9-10.3(a)  and dead end
				  looping projects.
"Depreciation expense" on the DSIC assets means the amount of
				  the total of all eligible investments multiplied by the weighted composite
				  depreciation rate on those assets.
"Distribution System Improvement Charge" or "DSIC" means the
				  charge developed in accordance with this subchapter. Once implemented, the DSIC
				  continues in effect until new base rates become effective for the water
				  utility, consistent with the requirements of this subchapter.
"DSIC cap" or "cap" means the maximum amount of annual DSIC
				  revenues that a water utility can recover during the period the DSIC rate is in
				  effect, through the assessment or surcharge computed in accordance with the
				  requirements of this subchapter. The cap is established by calculating five
				  percent of the water utility's total revenues as established in the most recent
				  base rate decision. The outcome of that calculation establishes the maximum
				  revenue requirement recovery level for which a water utility can seek recovery
				  through the DSIC.
"DSIC-eligible projects" mean water distribution system
				  projects and projected costs that:
1. Are limited to non-revenue producing water main
				  replacement or rehabilitation projects, including structural and non-structural
				  lining projects, valve replacements, hydrant replacements, and service line
				  replacements, or water main relocations required by governmental
				  entities;
2. Are included in the appropriate foundational filing or
				  semi-annual filing made by the water utility with the Board, and approved by
				  the Board, as set forth at
				  14:9-10.4, and/or the semi-annual
				  DSIC reconciliation filing, as set forth in
				  14:9-10.5;
3. Are in excess of the water utility's base spending;
				  and
4. The costs of which are not already being recovered through
				  current base rates, as set by the water utility's most recently concluded base
				  rate case proceeding.
"DSIC filing" means the filing made by a water utility for
				  each DSIC recovery period as specified in
				  14:9-10.5. DSIC filings shall
				  contain actual data for the DSIC recovery period and are expected to be made
				  approximately semi-annually.
"DSIC period" means the period of time between the effective
				  date of the Foundational Filing and the rate effective date of the next base
				  rate case.
"DSIC rate" means the amount of the assessment added to
				  customers' bills, calculated in accordance with the requirements of this
				  subchapter, which will be assessed on the basis of meter charges. This rate is
				  reviewed by the Board and reset to zero in a water utility's base rate
				  case.
"DSIC recovery period" means each period during which
				  DSIC-eligible projects are to be completed and put into service followed by a
				  DSIC filing.
"DSIC revenue requirement recovery amount" means the total
				  eligible amount to be recovered through the DSIC charge as calculated pursuant
				  to N.J.A.C. 14:9-10.9.
"Eligible investment in DSIC projects" means the total of the
				  applicable projects placed in service under this program, less the base
				  spending requirement.
"In-service" means when a DSIC-eligible project has been
				  replaced/rehabilitated and is functioning in its intended purpose. It is in use
				  (that is, not under construction) and useful (that is, actively helping the
				  utility provide efficient service).
"Pre-tax adjusted weighted average cost of capital" means the
				  adjusted weighted average cost of capital calculated on a pre-income tax
				  basis.
"Restoration costs" means costs necessary to restore
				  construction to preconstruction condition or as dictated by State, Federal, or
				  municipal laws, rules, ordinances, orders, or regulations, including, but not
				  limited to, paving, sidewalks, curbing, landscaping, and traffic control costs
				  for DSIC-eligible projects approved in a Foundational Filing.
"Revenue factor" means a gross-up for the associated revenue
				  taxes, uncollectables, BPU assessment, and Division of Rate Counsel assessment,
				  adjusted to properly reflect the revenue required to generate the agreed upon
				  rate of return.
"Water utility" has the meaning assigned to this term in the
				  Board's water and wastewater rules at
				  14:9-1.2.