Opinion ID: 1737477
Heading Depth: 1
Heading Rank: 6

Heading: Rate CNP

Text: Rate CNP is an acronym for Certificated New Plant. It is designed to adjust monthly billings beginning with the second month after a certificated generating plant goes into commercial operation. The rate adjusts the Company's charges to prevent nosedives in the Company's earnings which would otherwise occur when such a plant is placed into commercial operation. By so doing, it allows the Company to earn a current return on the new electric generating plant. This rate was formulated by the PSC in response to this court's holding in Alabama Power Co. v. Alabama Public Service Commission, 422 So.2d 767 (Ala.1982), that the Commission must allow the Company a return on plant which it has specifically authorized the Company to build in order to serve retail electric customers. We held it was error for the Commission to ignore the impact on the Company's business of a certificated new plant.