STEP ADJUSTMENTS. 10.1 The Company shall be allowed three step adjustments as follows: (a) Step 1 shall reflect an increase to account for calendar year 2019 plant-in-service and shall be implemented concurrent with the increase in base rates in this proceeding. This first step shall be subject to the following conditions: i. The revenue requirement shall be capped at $11 million. ii. The step shall include only allowed projects and annual projects and programs closed to plant in 2019, excluding new business/growth-related projects. iii. The rate for the first step shall be designed to recover the value of the step adjustment from January 1, 2021 through July 31, 2021. Beginning August 1, 2021 (the rate effective date of the second step adjustment), the rate shall be adjusted going forward to reflect a 12-month calendar recovery of the first step. iv. The projects and programs that may be included in the step are identified in the listing attached as Appendix 5. (b) Step 2 shall reflect an increase for calendar year 2020 plant-in-service and shall be effective August 1, 2021, subject to the following conditions: i. The revenue requirement associated with this step shall be capped at $18 million. ii. This step shall include only allowed projects/programs closed to plant in 2020, excluding new business/growth-related projects. iii. The projects and programs that may be included in this step are identified in the listing attached as Appendix 5. The Settling Parties agree that the Company may substitute projects prior to the commencement of the review period if projects identified in this appendix are not deployed. (c) Step 3 shall reflect an increase for calendar year 2021 plant-in-service to be effective August 1, 2022 and shall be subject to the following conditions: i. The revenue requirement associated with this step shall be capped at $9.3 million. ii. This step shall include only allowed projects and programs closed to plant in 2021, excluding new business/growth-related projects. 10.2 For the first step, the following process shall apply. In recognition of the limited time to make changes to the Company’s documentation as well as the historical nature of the projects in issue, for the first step increase related to capital investments made in 2019, the Company shall make a filing at or around the time of the filing of this Settlement Agreement with testimony and supporting information describing the capital projects placed in service in calendar year 2019, as well as testimony and supporting information describing the proposed rate impact, using the documentation available at the time of the filing. In addition, the Company’s initial filing shall provide a summary list of capital projects, excluding new business projects, showing, at least: the project name and description; initial budget by project; variances from the initial budget; and final actual costs. After the Company’s initial filing, and upon the request of Staff, the Company shall provide further information related to a sampling of the Company’s projects, including but not 20 limited to Project Authorization Forms, Supplemental Request Forms, and work order cost detail summarized at the project level by cost category over the life of the project. 10.3 For the second and third steps the following process shall apply. The Company shall make a filing by May 1, 2021, for the second step increase, with rates effective August 1, 2021 and the Company shall make a filing by May 1, 2022, for the third step increase, with rates effective August 1, 2022. Each filing shall include, at least, the following documentation and process steps: (a) The Company shall provide the amount of the investments to be included in the step increases (by project) and detailed project descriptions including the initial budget, the final cost, and the date on which each project was booked to plant in- service. (b) For each project, all project documents will be provided including, but not limited to, Project Authorization Forms, Supplemental Request Forms, and work order cost detail summarized at the project level by cost category over the life of the project. (c) After the Company’s initial filing, and upon request of Staff, the Company shall provide additional information to aid in review of the initial filings. (d) For the second and third step increases, the Company shall conform the documentation to the template to be agreed to in accordance with Section 3 above, to the extent possible and subject to limitations that may exist in relation to retroactive application of a new format. (e) For all steps, including the first step, the Company agrees that if the actual costs are less than budgeted amounts, the actual amounts shall be used to calculate the step adjustments. If the actual cost of the capital additions exceeds the budgeted amounts, the Company may seek recovery of the excess through the step adjustment process, up to the specified step adjustment caps. If not addressed through the step adjustment, the Company may seek recovery in its next rate case. (f) The revenue requirement for the step adjustments shall be calculated in a manner similar to that used in the Company’s initial filing at ▇▇▇▇▇ 313-320 (Attachment EHC/TMD-3 (Perm)), except that it will exclude recovery of Enterprise IT Project costs, and Union Contractual Adjustments. (g) With respect to timing of filing documentation and the step process, the Company shall file the required documentation and supporting information on or by May 1 of each year for rates effective as of August 1 of each year. The Company acknowledges that: (1) Staff and the OCA require at least 90 days to review the each step; and (2) Staff and the OCA agreement to step adjustments does not foreclose full prudence review during analysis of each step adjustment, including the Company’s decision to make an investment and the management of each project. (h) Incremental equipment/project costs directly resulting from the Company’s recently revised SYSPLAN 008 and SYSPLAN 010 shall be ineligible for recovery within these steps. Project costs relating to asset condition may be recoverable. 10.4 All step increases shall be subject to Staff audit and reconciliation based on the results of the audit, as approved by the Commission. 10.5 Nothing in this Settlement Agreement shall preclude the Settling Parties from disputing the prudence of individual investments requested for recovery within the step increases. 10.6 The Company shall not request recovery of any capital costs associated with plant placed in service outside of the above-described step adjustments until the Company’s next distribution rate case filing, which shall be based on a test year ending no sooner than December 31, 2022, and which shall be filed no earlier than the first quarter of 2023.
Appears in 2 contracts
Sources: Settlement Agreement, Settlement Agreement
STEP ADJUSTMENTS. 10.1 The Company shall be allowed three step adjustments as follows:
(a) Step 1 shall reflect an increase to account for calendar year 2019 plant-in-service and shall be implemented concurrent with the increase in base rates in this proceeding. This first step shall be subject to the following conditions:
i. The revenue requirement shall be capped at $11 million.
ii. The step shall include only allowed projects and annual projects and programs closed to plant in 2019, excluding new business/growth-related projects.
iii. The rate for the first step shall be designed to recover the value of the step adjustment from January 1, 2021 through July 31, 2021. Beginning August 1, 2021 (the rate effective date of the second step adjustment), the rate shall be adjusted going forward to reflect a 12-month calendar recovery of the first step.
iv. The projects and programs that may be included in the step are identified in the listing attached as Appendix 5.
(b) Step 2 shall reflect an increase for calendar year 2020 plant-in-service and shall be effective August 1, 2021, subject to the following conditions:
i. The revenue requirement associated with this step shall be capped at $18 million.
ii. This step shall include only allowed projects/programs closed to plant in 2020, excluding new business/growth-related projects.
iii. The projects and programs that may be included in this step are identified in the listing attached as Appendix 5. The Settling Parties agree that the Company may substitute projects prior to the commencement of the review period if projects identified in this appendix are not deployed.
(c) Step 3 shall reflect an increase for calendar year 2021 plant-in-service to be effective August 1, 2022 and shall be subject to the following conditions:
i. The revenue requirement associated with this step shall be capped at $9.3 million.
ii. This step shall include only allowed projects and programs closed to plant in 2021, excluding new business/growth-related projects.
10.2 For the first step, the following process shall apply. In recognition of the limited time to make changes to the Company’s documentation as well as the historical nature of the projects in issue, for the first step increase related to capital investments made in 2019, the Company shall make a filing at or around the time of the filing of this Settlement Agreement with testimony and supporting information describing the capital projects placed in service in calendar year 2019, as well as testimony and supporting information describing the proposed rate impact, using the documentation available at the time of the filing. In addition, the Company’s initial filing shall provide a summary list of capital projects, excluding new business projects, showing, at least: the project name and description; initial budget by project; variances from the initial budget; and final actual costs. After the Company’s initial filing, and upon the request of Staff, the Company shall provide further information related to a sampling of the Company’s projects, including but not 20 limited to Project Authorization Forms, Supplemental Request Forms, and work order cost detail summarized at the project level by cost category over the life of the project.
10.3 For the second and third steps the following process shall apply. The Company shall make a filing by May 1, 2021, for the second step increase, with rates effective August 1, 2021 and the Company shall make a filing by May 1, 2022, for the third step increase, with rates effective August 1, 2022. Each filing shall include, at least, the following documentation and process steps:
(a) The Company shall provide the amount of the investments to be included in the step increases (by project) and detailed project descriptions including the initial budget, the final cost, and the date on which each project was booked to plant in- service.
(b) For each project, all project documents will be provided including, but not limited to, Project Authorization Forms, Supplemental Request Forms, and work order cost detail summarized at the project level by cost category over the life of the project.
(c) After the Company’s initial filing, and upon request of Staff, the Company shall provide additional information to aid in review of the initial filings.
(d) For the second and third step increases, the Company shall conform the documentation to the template to be agreed to in accordance with Section 3 above, to the extent possible and subject to limitations that may exist in relation to retroactive application of a new format.
(e) For all steps, including the first step, the Company agrees that if the actual costs are less than budgeted amounts, the actual amounts shall be used to calculate the step adjustments. If the actual cost of the capital additions exceeds the budgeted amounts, the Company may seek recovery of the excess through the step adjustment process, up to the specified step adjustment caps. If not addressed through the step adjustment, the Company may seek recovery in its next rate case.
(f) The revenue requirement for the step adjustments shall be calculated in a manner similar to that used in the Company’s initial filing at ▇▇▇▇▇ 313-320 (Attachment EHC/TMD-3 (Perm)), except that it will exclude recovery of Enterprise IT Project costs, and Union Contractual Adjustments.
(g) With respect to timing of filing documentation and the step process, the Company shall file the required documentation and supporting information on or by May 1 of each year for rates effective as of August 1 of each year. The Company acknowledges that: (1) Staff and the OCA require at least 90 days to review the each step; and (2) Staff and the OCA agreement to step adjustments does not foreclose full prudence review during analysis of each step adjustment, including the Company’s decision to make an investment and the management of each project.
(h) Incremental equipment/project costs directly resulting from the Company’s recently revised SYSPLAN 008 and SYSPLAN 010 shall be ineligible for recovery within these steps. Project costs relating to asset condition may be recoverable.
10.4 All step increases shall be subject to Staff audit and reconciliation based on the results of the audit, as approved by the Commission.
10.5 Nothing in this Settlement Agreement shall preclude the Settling Parties from disputing the prudence of individual investments requested for recovery within the step increases.
10.6 The Company shall not request recovery of any capital costs associated with plant placed in service outside of the above-described step adjustments until the Company’s next distribution rate case filing, which shall be based on a test year ending no sooner than December 31, 2022, and which shall be filed no earlier than the first quarter of 2023.
Appears in 1 contract
Sources: Settlement Agreement
STEP ADJUSTMENTS. 10.1 5.1 The Company shall be allowed three two step adjustments as follows:
(a) Step 1 shall reflect an increase to account for certain capital projects placed in service during calendar year 2019 plant-in-service 2020 and shall be implemented concurrent with the increase in base rates in this proceedingon August 1, 2021. This first step adjustment reflects adjustments that have been made to the revenue requirement in order to reach settlement. The first step shall be subject to the following conditions:
i. The revenue requirement for this step shall be capped at a $11 million4.0 million increase to annual Distribution Revenue.
ii. The step shall include only allowed be based on the projects and annual projects and programs closed to plant in 20192020, excluding and shall exclude new business/growth-related projects.
iii. The rate for the first step shall be designed to recover the value of the step adjustment from January 1, 2021 through July 31, 2021. Beginning August 1, 2021 (the rate effective date of the second step adjustment), the rate shall be adjusted going forward to reflect a 12-month calendar recovery of the first step.
iv. The projects and programs that may be included in the step are identified in the listing attached as Appendix 51.
iv. Local property taxes shall not be included in the calculation and will be recovered through the Property Tax Adjustment Mechanism in Section 6 of the Settlement Agreement. State utility property taxes for all projects liste d in Appendix 1, calculated using the statutory tax rate in RSA 83-F:2, shall be included in the step adjustment calculation, shall count toward the cap, and shall be given first priority of recovery.
(b) Step 2 shall reflect an increase to account for certain capital projects placed in service during calendar year 2020 plant-in-service 2021 and shall be effective August 1, 2021, 2022. This second step adjustment reflects adjustments that have been made to the revenue requirement in order to reach settlement. The second step shall be subject to the following conditions:
i. The revenue requirement associated with for this step shall be capped at a $18 million3.2 million annual increase to Distribution Revenue from the projects referenced in iii. below.
ii. This The step shall include only allowed projects/programs be based on the projects closed to plant in 20202021, excluding and shall exclude new business/growth-related projects.
iii. The projects and programs that may be included in this step are identified identifie d in the listing attached as Appendix 52, including ▇▇▇▇▇ CNG Phase 1 costs as further described in Section 7.2. The Settling Parties agree that the Company may substitute other similar non-growth projects prior to the commencement of the review period if projects identified in this appendix Appendix 2 are not deployed.
(c) Step 3 iv. Local property taxes shall reflect an increase not be included in the calculation and will be recovered through the Property Tax Adjustment Mechanism in Section 6 of the Settlement Agreement. State property taxes for calendar year 2021 plantall projects listed in Appendix 2 as it may be adjusted pursuant to iii. above, calculated using the statutory tax rate in RSA 83-in-service to F:2, shall be effective August 1, 2022 included in the step adjustme nt calculation and shall be subject to the following conditions:
i. The revenue requirement associated with this step shall be capped at $9.3 milliongiven first priority of recovery.
ii. This v. The step adjustment shall include only allowed projects and programs closed to plant adjustments resulting from the updated depreciation study as provided in 2021, excluding new business/growth-related projectsSection 3.2 of the Settlement Agreement.
10.2 5.2 For the first second step, the following process shall apply. In recognition of the limited time to make changes to the Company’s documentation as well as the historical nature of the projects in issue, for the first step increase related to capital investments made in 2019, the Company shall make a filing at on or around the time of the filing of this Settlement Agreement with testimony and supporting information describing the capital projects placed in service in calendar year 2019, as well as testimony and supporting information describing the proposed rate impact, using the documentation available at the time of the filing. In addition, the Company’s initial filing shall provide a summary list of capital projects, excluding new business projects, showing, at least: the project name and description; initial budget by project; variances from the initial budget; and final actual costs. After the Company’s initial filing, and upon the request of Staff, the Company shall provide further information related to a sampling of the Company’s projects, including but not 20 limited to Project Authorization Forms, Supplemental Request Forms, and work order cost detail summarized at the project level by cost category over the life of the project.
10.3 For the second and third steps the following process shall apply. The Company shall make a filing by May 1, 2021, for the second step increase, with rates effective August 1, 2021 and the Company shall make a filing by May 1before April 8, 2022, for the third step increase, with rates effective August 1, 2022. Each The filing shall include, at least, the following documentation and process steps:
(a) The Company shall provide the amount of the investments to be included in the step increases increase (by project) and detailed project descriptions including the initial initia l budget, the final cost, the treatment of any related retirements, and the date on which each project was booked to plant in- in-service.
(b) For each project, project Liberty shall provide all Company project documents will be provided includingincluding , but not limited to, Business Cases, Capital Project Authorization Expenditure Applications, Change Order Forms, Supplemental Request FormsProject Close Out Reports, and work order cost detail summarized at the project level by cost category over the life of the projectorders.
(c) After Staff and/or the Company’s initial filing, and upon OCA may request of Staff, the Company shall provide additional information to aid in review of after reviewing the initial initia l filings.
(d) For The Company shall propose a rate increase effective August 1, 2022, to recover the revenue requirement associated with the second and third step increases, the Company shall conform the documentation to the template to be agreed to in accordance with Section 3 above, to the extent possible and subject to limitations that may exist in relation to retroactive application of a new format.
(e) For all steps, including the first step, the Company agrees that if the actual costs are less than budgeted amounts, the actual amounts shall be used to calculate the step adjustments. If the actual cost of the capital additions exceeds the budgeted amounts, the Company may seek recovery of the excess through the step adjustment process, up to the specified step adjustment caps. If not addressed through the step adjustment, the Company may seek recovery in its next rate case$3.2 million cap.
(f) The revenue requirement for the step adjustments shall be calculated in a manner similar to that used in the Company’s initial filing at ▇▇▇▇▇ 313-320 (Attachment EHC/TMD-3 (Perm)), except that it will exclude recovery of Enterprise IT Project costs, and Union Contractual Adjustments.
(g) With respect to timing of filing documentation and the step process, the Company shall file the required documentation and supporting information on or by May 1 of each year for rates effective as of August 1 of each year. The Company acknowledges that: (1) Staff and the OCA require at least 90 days to review the each step; and (2) Staff and the OCA agreement to step adjustments does not foreclose full prudence review during analysis of each step adjustment, including the Company’s decision to make an investment and the management of each project.
(h) Incremental equipment/project costs directly resulting from the Company’s recently revised SYSPLAN 008 and SYSPLAN 010 shall be ineligible for recovery within these steps. Project costs relating to asset condition may be recoverable.
10.4 All step increases shall be subject to Staff audit and reconciliation based on the results of the audit, as approved by the Commission.
10.5 Nothing in this Settlement Agreement shall preclude the Settling Parties from disputing the prudence of individual investments requested for recovery within the step increases.
10.6 The Company shall not request recovery of any capital costs associated with plant placed in service outside of the above-described step adjustments until the Company’s next distribution rate case filing, which shall be based on a test year ending no sooner than December 31, 2022, and which shall be filed no earlier than the first quarter of 2023.
Appears in 1 contract
Sources: Settlement Agreement