Loading...
HomeMy WebLinkAbout20140430final_order_no_33031.pdfOffice of the Secretary Service Date April 30,2014 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF AVISTA ) CORPORATION’S APPLICATION TO )CASE NO.AVU-E-14-02 UPDATE ELECTRIC LINE EXTENSION ) SCHEDULE 51 AND ALLOWANCES.)ORDER NO.33031 __________________________________________________________________________________ ) On March 14.2014,Avista Corporation filed a tariff advice to revise the Company’s Electric Line Extension Schedule 51.The Company proposes to update both its line extension costs and the developer/builder allowances that apply to new residential,commercial,and industrial customers’services.The proposed changes would take effect on May 1,2014. Although the Company initially filed a tariff advice,the Company and Commission Staff later agreed that the tariff advice—that proposes to update electric line extension allowances that were last set in 2001—should be processed as an application so interested persons could file comments under the Commission’s Modified Procedure rules. On April 1,2014,the Commission issued a Notice of Application and Notice of Modified Procedure setting an April 22,2014 comment deadline.See Order no.33003.Staff filed the only comments and the Company concurred with them.See Comments of the Commission Staff;Concurrence in Staffs Comments. Having reviewed the record,we issue this Order approving an updated Schedule 51 based on new line extension costs and allowances as follows. THE APPLICATION With its Application,the Company proposes to revise Schedule 51 by updating the costs it incurs to extend electric lines to new customers.It also proposes to update its allowance to developers and builders against those costs.By way of background,the Company annually updates the cost of line extensions (e.g.,the cost of transformers and lines)to new customers that are recovered through base rates.Developers and builders who request the line extension must pay for any costs above the Company’s line extension allowance.But,while the Company has annually updated its line extension costs,it has not updated the line extension allowance since 2001.The Company now seeks to update both the line extension costs and allowances.The Company’s proposed updates and how the Company expects them to impact residential developments are summarized below. ORDER NO.33031 1 A.Proposed Line Extension Costs The Company proposes to revise its Schedule 51 line extension costs to reflect its new Construction &Material Standards and the actual costs for materials and labor used to extend lines in 2013.The Company updated its Construction &Material Standards to meet heightened standards contained in the 2012 National Electric Safety Code (NESC).For example,the 2012 NESC sets higher strength standards for guy-supported wood poles and requires upgrades to guy wire insulation.The Company’s proposed cost updates also reflect that transformer costs have significantly increased.See Application at 1-2. B.Proposed Line Extension Allowances The Company also proposes to increase the developer/builder allowances that were last set in 2001.See Order No.28562.The allowances vary by customer class.The Company’s current and proposed allowances are: Current Proposed Service Schedule Allowance Allowance Schedule 1 Individual Customer (per unit)$1,000 $1,600 Schedule 1 Duplex (per unit)$800 $1,275 Schedule 1 Multiplex (per unit)$600 $975 Schedule 11/12 (per kWh)$0.10703 $0.13766 Schedule 21/11 (per kWh)$0.06000 $0.1 1657 Schedule 3 1/32 (per kWh)$0.6000 $0.19689 The Company explains that it calculated the proposed allowances using an embedded-cost methodology.The Company believes this methodology ensures that the Company’s investment in distribution/terminal facilities for each new customer will equal the embedded costs of the same facilities that were used to calculate base rates.Any costs exceeding the allowance will be paid by the developer/builder as a contribution in aid of construction (CIAC).The Company says that it calculated embedded costs based on the cost-of-service study from its last general rate case (AVU-E-1 2-0 1)as updated to account for the settlement agreement in that case.Id.at 2. C.Impact to Residential Developments The Company claims its proposed changes would lower developer/builder payments for line extensions in residential developments as follows: ORDERNO.33031 Residential Developments Filing —Development Summary 2013 2014 Total Cost per Lot $1,716 $1,598 Less:Service Cost $469 $485 Developer Responsibility $1,247 $1,113 Developer Non-refundable Payment $247 - Developer Refundable Payment $1,000 $1,113 Builder Payment $469 $0 Id.at 3. STAFF COMMENTS Commission Staff reviewed the Company’s Application and recommended some adjustments to the Company’s proposed costs and allowances.The Company concurs with Staff’s recommendations.The recommendations are summarized below. A.Recommended Line Extension Costs Staff recommended some adjustments to the Company’s proposed line extension costs.As an initial matter,Staff notes that the Company changed how it calculates construction costs and cost reduction credits after 2013.For example,in 2013 the Company included trenching costs in the Company’s construction costs and cost reduction credits.But the Company’s proposed costs and credits omit these costs because developers have always provided their own In addition,the Company’s proposed tariff accounts for the costs of complying with the updated 2012 NESC standards.Furthermore,the Company moved some cost components from 2013 categories to new cost categories.For example,while 2013 transformer cost category includes only transformer equipment costs,the Company’s proposed transformer cost category also includes transformer installation costs.Although these above changes made it difficult for Staff to compare the Company’s existing and proposed construction costs and credits,Staff believes the changes were reasonable. Because the Company changed how it calculates construction costs and cost reduction credits after 2013,Staff compared the Company’s proposed,individual construction cost components to similar cost components from the prior year.Staff reports that the As the cost reduction credits for developer-provided trenching are not needed,Staff removed $546 in trenching credits from the Company’s average underground primary and secondary distribution costs (although the cost to inspect the trench remains).Staff’s adjustment reduces the total weighted average cost while increasing the underground primary and secondary credits by $0.13 and $0.21 per lot. ORDERNO.33031 3 Company’s average transformer installation cost per lot changed the most and increased by 51% because:(1)each transformer’s cost increased;(2)the Company moved fixed costs from primary distribution costs to transformer costs;and (3)the Company incurred greater costs to satisfy the more rigorous NESC standards.Staff opines that these changes and increases are reasonable. Staff also reports that the Company’s distribution and service costs per lot increased or decreased with the average length of an installation.For example,the cost to install underground primary distribution facilities decreased because the average installation length decreased.On the other hand,the cost to install underground secondary distribution and service lines increased because the average installation length grew. Based on its analysis,Staff recommended some adjustments to the Company’s proposed line extension costs.Staff’s recommended adjustments combine with the Company’s proposal to decrease total line extension costs by 7%,from $1,716 per lot to $1,596 per lot.This decrease mainly occurs because primary distribution costs are 73%less than they were in 2013 (although the costs of secondary distribution,transformers,and service drops have increased). The table below summarizes the Company’s approved costs,the Company’s proposed costs,and Staffs recommended adjustments: Change in Developer and Builder Cost 2013 to 2014 Revised 2014 2014 Per Lot Cost(S)2013 Company Filing Revised (No Trenching)$Difference %Difference Primary Distribution Cost 1227 511 333 (894)-73% Secondary Distribution Cost 255 424 308 53 21% Transformer 311 470 470 159 51% Total Weighted Ag Cost (Trenching by Developer)1793 1405 1111 (682)-38% Trenching Credit (546)(292)0 546 -100% Total Deeloper Cost 1247 1113 1111 (136)-11% Ser’ce Drop Cost 469 485 485 16 3% Total Builder/De’eloper Cost 1716 1,598 1,596 (120)-7% Staffs adjustments to the Company’s proposed construction costs and cost reduction credits are further detailed in Attachment A to this Order.Staff opines that the adjusted costs and credits are reasonable and should be approved by the Commission. B.Recommended Line Extension Allowances Staff also analyzed the Company’s proposed line extension allowance.Staff explains that the Company uses the allowance to credit developers and builders for the upfront distribution and terminal facility line extension costs that the Company recovers through base ORDERNO.33031 4 rates.The Commission set the current allowance in 2001.See Case No,AVU-E-00-0l.Staff notes that in the present case,the Company updates its allowances using the same method that Staff used to calculate the allowances in Case No.AVU-E-00-01.Applying this calculation method here,the Company proposes increasing all allowances—except Schedule 31/32—from 29%(Schedule 11/12)to 94%(Schedule 2 1/22)above 2001 levels.Staff finds the updated allowances to be about equal to the fully embedded cost of the same facilities used to calculate base rates for each customer class.Because of this,and because 12 years of growth and inflation have affected the total embedded cost,Staff believes the Company’s proposed increases are reasonable. However,while Staff agrees with the Company’s calculation method,Staff believes the Company incorrectly applied that method in one respect.Specifically,Staff says the Company’s proposed allowance includes certain service meter costs even though Schedule 51 excludes all meter costs.Staff thus recommended removing all meter costs from the proposed line extension allowance to ensure the allowance is consistent with Schedule 51.The currently approved allowance,Company’s proposed allowance,and Staffs proposed adjusted allowance are shown below: Company’s Company’s Staff’s Service Schedule Current Proposed Proposed Allowance Allowance Allowance Schedule 1 Individual Customer (per unit)$1,000 $1,600 $1,550 Schedule 1 Duplex (per unit)$800 $1,275 $1,240 Schedule 1 Multiplex (per unit)$600 $975 $930 Schedule 11/12 (per kWh)$0.10703 $013766 $012868 Schedule 21/22 (per kWh)$0.06000 $0.1 1657 $0.1 1874 Schedule 3 1/32 (perkWh)$0.6000 $0.19689 $0.l9279 Staffs proposed,adjusted line extension allowances are further described in Attachments B through E to this Order. Staff says the adjusted $1,550 per lot allowance would apply to residential developments as follows.The first $1,111 of the allowance would eliminate the total developer cost and reduce current rates by that amount.The remaining $439 of the allowance would be credited to builders against the $485 cost of a service drop for each lot,which decreases the ORDER NO.33031 5 builder’s remaining cost to $46 per lot for a 90%decrease from current rates.The following table summarizes these impacts: Developer and Builder Cost Impact 2013 to 2014 Revised 2014 2014 Per Lot Cost(S)2013 Company Filing Revised (No Trenching)$Difference %Difference Total Developer Cost 1247 1 113 1 111 (136)-11% Allowance (not to exceed cost)1,000 1,113 1,111 111 11% Remaining Deeloper Cost 247 0 0 (247)-100% Total Builder Cost 469 485 485 16 3% Lefi-oer allowance 0 485 439 439 n/a Remaining Builder Cost 469 0 46 (423)-90% Total Allowance 1,000 1,600 1,550 550 55% Total Allowance Used 1,000 1,598 1,550 550 55% Unused Allowance 0 2 0 0 n/a Besides adjusting the proposed allowance in this case,Staff also recommended the Company regularly seek to update those allowances to ensure any changes are gradual and better represent the costs embedded in base rates.Because the Company would calculate the allowance based on input from the Company’s last general rate case,Staff recommended that the Company seek to update the allowances whenever a new general rate case concludes.The Company could apply to update the allowances when it files its annual Schedule 51 Line Extension Cost updates. C.Summary of StaffRecommendations In summary,Staff recommended the Commission approve the revised 2014 Schedule 51 Tariff Construction Costs and Cost Reduction Credits contained in the Attachment to this Order,and the following allowances,effective May 1,2014: Service Schedule Schedule 1 Individual Customer (per unit) Schedule 1 Duplex (per unit) Schedule 1 Multiplex (per unit) Schedule 11/12 (per kWh) Schedule 2 1/22 (per kWh) Schedule 31/32 (per kWh) Allowance $1,550 $1,240 $930 $0.12868 $0.11874 $0.19279 Staff also recommended the Commission direct the Company to seek allowance updates (using the method applied in this case)when the Company files its annual update of Schedule 51 line extension costs after each general rate case. ORDERNO.33031 6 COMMISSION FINDINGS We have reviewed the record,including the Application,Staff’s comments,and Avista’s concurrence in Staff’s comments.We find that Avista is an electrical and gas corporation,and that we have jurisdiction and authority over Avista and the issues in this case under Title 61 of the Idaho Code and the Commission’s Rules of Procedure,IDAPA 31.01.01.000,ci seq. We also find the Company’s proposed changes to Schedule 51,as adjusted by Staff, are fair,just,and reasonable and we approve those changes with a May 1,2014 effective date.In making this finding,we specifically approve of the method that the parties used to calculate the updated allowances in this case.That method ensures the allowances will roughly equal the fully embedded facilities cost used to calculate base rates for each customer class.This,in turn, ensures that new customer-related distribution costs will not drive revenue requirement and base rate increases,and that new customers will pay the cost of new distribution facilities that benefit them.We further find that removing service meter costs from the Company’s proposed line extension allowances is reasonable and consistent with Schedule 51’s exclusion of meter costs. Lastly,we find it is reasonable,and we direct the Company,to seek allowance updates (using the methodology used for this case)with the annual update of Schedule 51 line extension costs after each general rate case.Updating the line extension allowances in this manner will ensure that any changes are gradual and are informed by input obtained during the general rate case. ORDER IT IS HEREBY ORDERED that the Company shall update Schedule 51 to reflect updated line extension costs and allowances as described in this Order.These changes and the new Schedule 51 shall take effect May 1,2014.The Company shall promptly file conforming tariffs,and shall take such other action as directed above. THIS IS A FINAL ORDER.Any person interested in this Order may petition for reconsideration within twenty-one (21)days of the service date of this Order.Within seven (7) days after any person has petitioned for reconsideration,any other person may cross-petition for reconsideration.See Idaho Code §61-626. ORDERNO.33031 7 DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this day of April 2014. ATTEST: MACK A.REDF ,COM SIONER ‘L6 vi&J MARSHA H.SMITH,COMMISSIONER Jjin D.Jewe4J Commission Secretary O:AVU-E-I 4O2kk2 ORDERNO.33031 8 Se r v i c e Co s t Pe r Lo t Fa c i l i t y Un d e r g r o u n d Se r c e Un d e r g r o u n d Se r , c e Un d e r g r o u n d Se r c e To t a l Co s t pe r Lo t Co s t De s c r i p t i o n Di t c h (l n d i d u a l Cu s t o m e r ) Co n d u i t (l n d l M d u a l Cu s t o m e r ) Ca b l e , Et c . (I n d i A d u a l Cu s t o m e r ) 20 1 3 20 1 9 8 50 1 9 21 6 3 8 46 6 . 5 5 20 1 4 Re v i s e d 24 4 38 97 6 7 14 3 05 48 5 . 1 20 1 3 vs . 20 1 4 Re v I s e d $ Di f f e r e n c e % Di f f e r e n c e 42 . 4 0 21 0% 47 4 8 94 6 % (7 3 33 ) -3 3 9% 16 5 5 35 % At t a c h m e n t A Or d e r No . 33 0 3 1 Ca s e No . AV I J - E - 1 4 - 0 2 Ta r i f f Co n s t r u c t i o n Co s t Fa c i l i t y Co s t Ty p e 0e r h e a d Pr i m a r y Fi x e d Oe r t i e a d Pn n i a r y Va r i a b l e Ov e r h e a d 3- p h a s e Pr i m a r y Fi x e d Oe r h e a d 3- p h a s e Pr i m a r y Va r i a b l e Oe r h e a d Se r c e Va r i a b l e O. e r h e a d Tr a n s f o r m e r Fi x e d Un d e r g r o u n d Pr i m a r y Fi x e d Un d e r g r o u n d Un d e r g r o u n d Un d e r g r o u n d Un d e r g r o u n d Un d e r g r o u n d Un d e r g r o u n d Un d e r g r o u n d Un d e r g r o u n d 20 1 3 vs . 20 1 4 Re v i s e d Pn m a r y 3- p h a s e Pn m a r y 3- p h a s e Pr i m a r y Se c o n d a r y Se c o n d a r y Se r c e Se r i c e Tr a n s f o r m e r Un i t pe r fo o t pe r fo o t pe r fo o t pe r fo o t pe r fo o t pe r un i t pe r fo o l pe r fo o t pe r fo o t pe r fo o t pe r fo o t pe r fo o t pe r fo o t pe r fo o t pe r un i t Va r i a b l e Fi x e d Va r i a b l e Fi x e d Va r i a b l e Fi x e d Va r i a b l e Fi x e d 20 1 3 4, 8 1 4 40 56 1 7, 6 4 8 77 78 8 45 6 1, 5 4 3 9 6 1, 8 4 0 . 9 2 90 2 2, 8 8 4 30 17 6 6 23 9 98 7 05 23 9 98 7 05 1. 7 0 3 5 5 20 1 4 Co m p a n y Fi l i n g 4. 2 1 5 8 6 79 2 5, 4 6 8 4 1 10 9 1 2. 9 4 2, 4 8 7 43 1, 6 5 6 . 7 6 9. 5 8 3, 5 0 9 . 2 4 18 . 7 6 29 0 6 7 87 1 6 93 2, 9 8 4 94 $ Di f f e r e n c e (5 9 8 54 ) 2 31 (2 , 1 8 0 36 ) 3. 0 3 (1 6 2 ) 94 3 . 4 7 (1 8 4 16 ) 0. 5 6 62 4 . 9 4 11 0 50 6 9 16 6 (2 3 9 98 ) (0 12 ) 12 8 1 39 % Di f f e r e n c e -1 2 4% 41 2% 28 5% 38 5 % -3 5 5% 61 1 % -1 0 , 0 % 62 % 21 7% 62 % 21 1 % 23 5 % -1 0 0 0 % -1 7% 75 2 % 20 1 4 Re v i s e d 4, 2 1 5 8 6 7 92 5, 4 6 8 . 4 1 10 . 9 1 2 94 2, 4 8 7 43 1, 6 5 6 . 7 6 9 58 3, 5 0 9 24 18 . 7 6 29 0 67 87 1 6 93 29 8 4 94 20 1 4 Re v i s e d 90 7 5 54 4 6 3 02 39 1 1 23 Un d e r g r o u n d Un d e r g r o u n d Un d e r g r o u n d Un d e r g r o u n d Co s t Re d u c t i o n Cr e d i t s fo r De v e l o m e n t s an d In d i v i d u a l Cu s t o m e r s Fa c i l i t y Co s t De s c r i p t i o n Un i t Un d e r g r o u n d Se c o n d a r y Co n d u i t fo r De % e l o p m e n t pe r lo t Co n d u i t fo r De . e l o p m e n t Dd c h (l n d i d u a l Cu s t o m e r > Di t c h (l n d i i d u a l Cu s t o m e r ) Co n d u i t (l n d i d u a l Cu s t o m e r ) pe r fo o t Pr i m a r y Se r M c e Pr i m a r y Pn m a r y l S e r c e pe r lo t pe r fo o t pe r fo o t 20 1 3 20 1 4 Co m p a n y Fi l i n g 71 4 1 90 5 4 54 3 3 90 . 6 0 3. 9 0 4 62 1 29 20 1 3 vs . 20 1 4 Re v i s e d $ Di f f e r e n c e % Di f f e r e n c e 19 . 3 4 27 1 ° J (3 6 . 1 4 ) -3 9 9 % (0 8 8 ) -2 2 6 % (0 7 1 ) 15 4 % (0 0 6 ) -4 7 % Un i t pe r lo t pe r lo t pe r lo t 3 02 3. 9 1 1. 2 3 20 1 4 Co m p a n y Fi l i n g 24 4 3 8 97 . 6 7 14 3 . 0 5 48 5 . 1 Ca l c u l a t i o n of Al l o w a n c e - Sc h e d u l e 51 Sc h e d u l e 00 1 Su m m a r y To t a l Co s t pe r Cu s t o m e r (C IS ) Re t u r n on Co m m o n Eq u i t y (C 4 C 2 7 ) De b t Co s t s (C 4 E 2 2 ) Su b t o t a l De p r e c i a t i o n Ex p e n s e To t a l Re v e n u c Re q u i r e m e n t Re v e n u e Re q u i r e m e n t Fa c t o r Al l O w a b l e ln v e t m e n t Le s s Me t e r Co s t TO T A L AL L O W A N C E Co s t pe r Cu s t o m e r Nu m b e r or Cu s t o m e r s To t a l Ne t Pl a n t Oa s t r i b u ( i n n To t a l Ne t Pl a n t Te r m i n a l Fa c i i i t l e To t a l pe r Cu s t o m e r Ra t e of Re t u r n / c a p i t a l St r u c t u r 6 Lo n g Te r m De b t Co m m o n Eq u i t y Lo n g Te r m De b t Co s t Co m m o n Eq u i t y Re t u r n We i g h t e d De b t Co s t We i g h t e d Eq u i t y Ra t e of Re t u r n be f o r e Gr o s s Up Gr o s s Up Fa c t o r Re t u r n on Eq u i t y af t e r Gr o s s Up Ra t e or Re t u r n af t e r Gr o s s Up $ 1. 3 2 7 16 $ 10 6 6 9 41 . 6 8 S 14 2 . 3 7 62 . 0 5 S 21 0 . 4 2 13 . 5 5 % S 1, 5 5 3 . 2 2 S In p u t I $ 1. 5 5 3 . 2 . 2 I 10 0 , 8 5 3 in p u t 5 98 . 7 0 7 , 4 5 8 In p u t $ 41 , 1 9 1 . 8 6 0 In p u t S 1, 3 8 7 . 1 6 Ca p i t a l St r u c t u r e 50 % In p u t 50 % In p u t 6. 0 1 % In p u t 9. 8 0 In p u t 3. 0 0 5 % 4. 9 0 0 0 % 7. 9 ” ’ 1_ 5 7 In p u t 7. 6 9 % 10 . 6 9 6 % 8 Cu s t o m e r s 10 0 . 8 5 3 Ra l o of Re t u r n 10 . 9 9 6 % Di s I n b u i t o n Te r m i n a l AV U - E - 1 2 . 0 8 Ca s t 01 So n i c e St u d y Pl a r i l Fa c , h l i c s To t a l Ne t Pl a n t 98 , 7 0 7 , 4 0 8 41 . 1 9 1 , 8 6 0 13 9 , 8 9 9 . 3 1 8 Re t u r n on Ne t Pl a n t 10 , 5 0 7 . 7 3 0 4. 4 0 5 , 8 7 3 54 , 9 6 3 . 6 0 2 De p r e c i a t i o n Ex p e n s e 4, 5 3 6 . 2 7 0 1. 7 2 1 . 6 4 9 6. 2 5 7 . 9 1 9 To t a l 15 0 9 4 0 0 0 6. 1 2 7 . 5 2 2 21 , 2 2 1 , 5 2 1 Di S l n b u l i o n Te r m i n a l Pe r Cu s t o m e r Ex p e n s e s Pl a n I Fe c i l i I i o s To t a l Ne t Pl a n t 11 7 8 7 3 40 8 4 3 13 8 7 16 Ro i u m on Na t Pl a n t 10 4 68 43 6 0 14 8 . 3 7 De p r e c i a i i o Ex p e n s e 44 98 17 0/ 62 05 To t a l 14 9 6 6 60 7 6 21 0 . 4 2 Al l o w b l o In v o m c n t $1 , 1 0 4 . 7 4 $4 4 8 . 4 4 $1 , 6 6 3 . 2 2 Le s s Me t e r Co a l 50 04 ) 50 0 0 $0 . 0 0 P. l l o w a t s l e In v e s t m e n t 51 . 1 1 ) 4 . 7 4 $4 4 4 . 4 8 $1 , 5 5 3 . 2 2 De p r e c i a t i o n Ra t e fo r Di s t r i b u t i o n Ra t e fo r Te r m i n a l Fa c i l l I l e S Di s t r i b u t i o n De p r e c i a t i o n Ex p e n s e Te r m I n a l Fa c . De p r e c i a t i o n Ex p e n s e To t a l An n u a l De p r e c i a t i o n We i g h t e d Av e r a g e De p r e c i a t i o n Ro l e 3. 0 5 % 2. 4 8 % $ 44 . 9 8 $ 17 . 0 7 62 . 0 5 2. 8 5 1 4 % In p u t Ap a r t m e n t s Cu r r e n t Sc h e d u l e 1. Al l o w a n c e Cu r r e n t Du p l e x Al l o w a n c e Cu r r e n t Mu l t i p l e x Al l o w a n c e Ra t i o or Du p l e x to Re s i d e n c e Ne w Du p l e x Al l o w a n c e Ra t I o or Mu l t i p l e x to Re s i d e n c e Ne w Mu l t i p l e x Al l o w a n c e 10 0 0 Sc h e d u l e 51 80 0 Sc h e d u l e 51 60 0 Sc h e d u l e 51 0. 8 S 1, 2 4 2 . 5 8 0. 6 $ 93 1 . 9 3 At t a c h m e n t B Or d e r No . 33 0 3 1 Ca s e No . AV U - E - 1 4 - 0 2 Re s i d e n t i a l (S c h e d u l e 1) Ca l c u l a t i o n of Al l o w a n c e - Sc h e d u l e 51 Sc h e d u l e 01 1 / 0 1 2 Ce n t s Pe r kW h Su m m a r y To t a l Co s t pe r Cu s t o m e r (C 1 8 ) Re t u r n on Co m m o n Eq u i t y (C 4 C 2 7 ) De b t Co s t s (C 4 E 2 2 ) Su b t o t a l De p r e c i a t i o n Ex p e n s e To t a l Re v e n u e Re q u i r e m e n t Re v e n u e Re q u i r e m e n t Fa c t o r Al l o w a b l e In v e s t m e n t Le s s Me t e r Co s t TO T A L AL l O W A N C E Co s t pe r Cu s t o m e r An n u a l MW h s To t a l Ne t Pl a n t Di s t r i b u t i o n To t a l Ne t Pl a n t Te r m i n a l Fa c i l i t i e s To t a l pe r Cu s t o m e r Ra t e of Re t u r n / C a p i t a l St r u c t u r e Lo n g T e r m De b t Co m m o n Eq u i t y Lo n g Te r m De b t Co . t Co m m o n Eq u t t y Re t u r n We i g h t e d De b t Co s t We i g h t e d Eq u i t y Ra t e of Re t u r n be f o r e Gr o s s Up Gr o s s Up Fa c t o r Re t u r n on Eq u i t y af t e r Gr o s s Up Ra t e of Re t u r n af t e r Gr o s s Up $ 0. 1 1 4 9 $ 0. 0 0 8 8 $ 0. 0 0 3 5 $ 0. 0 1 2 3 0. 0 0 5 1 $ 0. 0 1 7 4 13 . 5 5 % $ 0. 1 2 8 7 $ - In p u t Is O. 1 2 8 6 8 j 33 1 , 3 7 6 In p u t $ 28 , 3 6 2 , 2 5 5 In p u t $ 9, 6 9 9 , 8 6 4 In p u t $ 11 4 . 8 6 Ca p s a l St r u c t u r e 50 % In p u t 50 % In p u t 6. 0 1 % In p u t 9. 8 0 % In p u t 3. 0 0 5 % 4. 9 0 0 0 % 7. 9 1 % 1. 5 7 In p u t 7. 6 9 % 10 . 6 9 6 % Ge n e r a l (S c h e d u l e 11 ) 1 2 ) An n u a l MW P s 33 1 , 3 7 6 Ra t e of Re t u r n 10 68 8 % Di s t n b u l i o n Te r m i n a l AV U - E - 1 2 - 0 8 Co s t of Se r i A c e St u d y Pl a n t Fa c i l i t i e s To t a l Ne t Pl a n t 28 , 3 6 2 , 2 5 5 9, 6 9 9 , 8 6 4 38 . 0 6 2 , 1 1 9 Re t u r n on Ne t Pl a n t 3, 0 3 3 , 6 2 1 1, 0 3 7 , 4 9 5 4. 0 7 1 , 1 1 6 De p r e c i a t i o n Ex p e n s e 1, 3 0 3 , 4 3 5 40 2 , 2 6 3 1, 7 0 5 , 6 8 8 To t a l 4, 3 3 7 . 0 5 6 1, 4 3 9 . 7 4 8 5, 7 7 6 , 8 0 4 Di s t r i b u t i o n Te r m i n a l Pe r Cu s t o m e r Ex p e n s e s Pl a n t Fa c i l i t i e s To t a l Ne t Pl a n t 0 08 5 6 0 02 9 3 0 11 4 9 Re t u r n on Ne t Pl a n t 0 00 9 2 0 00 3 1 0 01 2 3 De p r e c i a t i o n Ex p e n s e 0 00 3 9 0 00 1 2 0 00 5 1 To t a l 00 1 3 1 00 0 4 3 00 1 7 4 Al l o w a b l e In v e s t m e n t $0 0 9 6 6 $0 0 3 2 1 $0 1 2 8 7 Le s s Me t e r Co s t 0 00 0 0 0 0 00 0 0 0 00 0 0 0 0 Al l o w a b l e In v e s t m e n t 50 . 0 9 6 6 1 50 . 0 3 2 0 7 $0 , 1 2 8 6 8 Pe p r e c l a t i g . ! ! Ra t e fo r Di s t r i b u t i o n Ra t e fo r Te r m i n a l Fa c i l i t i e s Di s t r i b u t i o n De p r e c i a t i o n Ex p e n s e Te r m i n a l Fa c . De p r e c i a t i o n Ez p e n s e To t a l An n u a l De p r e c i a t i o n We i g h t e d Av e r a g e De p r e c i a t i o n Ra t e 3. 0 5 % 2. 4 2 % 3. 9 3 1. 2 1 5. 1 5 2. 8 5 % In p u t $$ At t a c h m e n t C Or d e r No . 33 0 3 1 Ca s e No . AV U - E - 1 4 - 0 2 Ca l c u l a t i o n of Al l o w a n c e - Sc h e d u l e 51 Sc h e d u l e 02 1 / 0 2 2 Ce n t s Pe r kW h Su m ma r y To t a l Co s t pe r Cu s t o m e r (C 1 8 ) Re t u r n on Co m m o n Eq u i t y (C 4 C 2 7 ) De b t Co s t s (C 4 E 2 2 ) Su b t o t a l De p r e c i a t i o n Ex p e n s e To t a l Re v e n u e Re q u i r e m e n t Re v e n u e Re q u i r e m e n t Fa c t o r Al l o w a b l e In v e s t m e n t Le s s Me t e r Co s t TO T A L AL L O W A N C E Ca s t pe r Cu s t o m e r An n u a l MW h s To t a l Ne t Pl a n t Di s t r i b u t i o n To t a l Ne t Pl a n t Te r m i n a l Fa c i l i t i e s To t a l pe r Cu s t o m e r Ra t e of Re t u r n / C a p i t a l St r u c t u r e Lo n g Te r m De b t Co m m o n Eq u i t y Lo n g Te r m De b t Co s t Co m m o n Eq u i t y Re t u r n We i g h t e d De b t Co s t We i g h t e d Eq u i t y Ra t e ci Re t u r n be f o r e Gr o s s Up Gr o s s Up Fa c t o r Re t u r n on Eq u i t y af t e r Gr o s s Up Ra t e of Re t u r n al t e r Gr o s s Up $ 0. 1 0 5 9 $ 0. 0 0 8 1 $ 0. 0 0 3 2 $ 0. 0 1 1 3 0. 0 0 4 8 $ 0. 0 1 6 1 13 . 5 5 % $ 0. 1 1 8 7 S - In p u t [s 0. 1 1 8 7 4 1 67 6 . 3 9 8 In p u t $ 61 , 5 8 8 , 0 4 3 In p u t $ 10 , 0 1 7 , 9 1 1 In p u t $ 10 5 . 8 6 Ca p i t a l St r u c t u r e 50 % In p u t 50 % In p u t 60 1 % In p u t 9. 8 0 % In p u t 3. 0 0 5 % 4. 9 0 0 0 % 7. 9 1 % 1. 5 7 In p u t 7.6 9 % 10 . 6 9 6 % La r g e Ge n e r a l (S c h e d u l e 21 1 2 2 ) An n u a l MW h s 57 6 , 3 9 8 Ra t e of Re t u r n 10 69 6 % Di s t n b u t . o n Te r m i n a l AV I J . E . 1 2 - 0 8 Co s t of Se , Pl a n t Fa c i l i t i e s To t a l Ne t Pl a n t 61 , 5 8 8 04 3 10 0 1 7 . 9 1 1 71 60 5 , 9 5 4 Re t u r n on Ne t Pl a n t 6 58 7 4 4 5 1. 0 7 1 51 4 7. 6 5 6 . 9 5 8 De p r e c i a t i o n Ex p e n s e 28 2 2 , 4 1 4 39 9 58 9 3, 2 2 2 00 3 To t a l 9, 4 0 9 , 8 5 9 1, 4 7 1 , 1 0 3 10 , 8 8 0 , 9 6 1 Di t n b u t i o r i Te r m i n a l Pe r Cu s t o m e r Ex p e n s e s Pl a n t Fa c i l i t i e s To t a l Ne t Pl a n t 00 9 1 1 0. 0 1 4 8 01 0 5 9 Re t u r n on Ne t Pl a n t 00 0 9 7 0 00 1 6 0 01 1 3 De p t e c i a t i o n Ex p e n s e 0 00 4 2 0 00 0 6 0 00 4 8 To t a l 00 1 3 9 00 0 2 2 00 1 6 1 Al l o w a b l e In v e s ü n e n t $0 1 0 2 7 $O . 0 1 6 1 $0 . 1 1 8 7 Le s s Me t e r C o s t 0. 0 0 0 0 0 00 6 0 0 0 0. 0 0 0 0 0 Al l o w a b l e In v e s t m e n t $0 . 1 0 2 6 9 50 . 0 1 6 0 5 50 . 1 1 8 7 4 De p r e c i a t i o n Ra t e fo r Di s t r i b u t i o n Ra t e fo r Te r m i n a l Fa c i l i t i e s Di s t r i b u t i o n De p r e c i a t i o n Ex p e n s e Te r m i n a l Fa c . De p r e c i a t i o n Ex p e n s e To t a l An n u a l De p r e c i a t i o n We i g h t e d Av e r a g e De p r e c i a t i o n Ra t e 3. 0 4 % 2. 1 7 % 4. 1 7 0. 5 9 4. 7 6 2. 8 5 % In p u t $$ At t a c h m e n t D Or d e r No . 33 0 3 1 Ca s e No . AV U - E - i 4 - 0 2 Ca l c u l a t i o n of Al l o w a n c e - Sc h e d u l e 51 Sc h e d u l e 03 1 / 0 3 2 Ce n t s Pe r kW h Su m m a r y To t a l Co s t pe r Cu s t o m e r ( C 1 8 1 Re t u r n on Co m m o n Eq u i t y (C 4 C 2 7 ) De b t Co s t s (C 4 E 2 2 ) Su b t o t a l De p r e c i a t i o n Ex p e n s e To t a l Re v e n u e Re q u i r e m e n t Re v e n u e Re q u i r e m e n t Fa c t o r Al l o w a b l e In v e s t m e n t Le s s Me t e r Co s t TO T A L AL L O W A N C E Co s t pe r Cu s t o m e r An n u a l MW h s To t a l Ne t Pl a n t Di s t r i b u t i o n To t a l Ne t Pl a n t Te r m i n a l Fa c i l i t i e s To t a l pe r Cu s t o m e r Ra t e of Re t u r n / C a p i t a l St r u c t u r e Lo n g Te r m De b t Co m m o n Eq u i t y Lo n g Te r m De b t Co s t Co m m o n Eq u i t y Re t u r n We i g h t e d De b t Co s t We i g h t e d Eq u i t y Ra t e of Re t u r n be f o r e Gr o s s Up Gr o s s Up Fa c t o r Re t u r n on Eq u i t y af t e r Gr o s s Up Ra t e of Re t u r n af t e r Gr o s s Up $ 0. 1 7 1 9 $ 0.0 1 3 2 $ 0. 0 0 5 2 $ 0. 0 1 8 4 $ 0. 0 0 7 7 $ 0. 0 2 6 1 13 . 5 5 % $ 0.1 9 2 2 S - In p u t Ls 0. 1 9 2 7 9 56 , 4 4 5 In p u t $ 7.9 7 1 , 2 2 1 in p u t $ 1. 7 3 2 , 2 2 4 In p u t $ 17 1 . 9 1 Ca p i t a l St r u c t u r e 50 % In p u t 50 % In p u t 6. 0 1 % In p u t 9. 8 0 % In p u t 3. 0 0 5 % 4. 9 0 0 0 % 7. 9 1 % 1. 5 7 In p u t 7. 6 9 % 10 . 6 9 6 % Pu m p i n g (S c h e d u l e 31 1 3 2 ) An n u a l MW h s S6 , 4 4 5 Ra t e of Re t u r n 10 68 6 % Di s t r i b u t i o n Te n ’ n i n a l AV I J . E 1 2 - 0 8 Co s t of Se r w e St u d y Pl a n t Fa c i l i t i e s To t a l Ne t Pl a n t 7, 9 7 1 . 2 2 1 1, 7 3 2 2 2 4 9. 7 0 3 44 5 Re t u r n on Ne t Pl a n t 65 2 , 6 0 0 18 5 . 2 7 8 1, 0 3 7 , 8 7 8 De p r e c i a t i o n Ex p e n s e 36 6 , 3 3 0 70 04 0 43 6 . 3 7 0 To t a l 1. 2 1 8 , 9 3 0 25 5 3 1 8 1, 4 7 4 . 2 4 8 Di s t r i b u t i o n Te r m i n a l Pe r Cu s t o m e r Ex p e n s e s Pl a n t Fa c i l i t i e s To t a l Ne t Pl a n t 0. 1 4 1 2 0, 0 3 0 7 0. 1 7 1 9 Re t u r n on Ne t Pl a n t 0 01 5 1 0, 0 0 3 3 0, 0 1 8 4 De p r e c i a t i o n Ex p e n s e — 0. 0 0 6 5 00 0 1 2 0. 0 0 7 7 To t a l 0,0 2 1 6 0. 0 0 4 5 0. 0 2 6 1 Al l o w a b l e tr w e m e n t 50 . 1 5 9 4 S0 . 0 3 1 4 50 . 1 9 2 8 La s s ’ Me t e r Co s t 0. 0 0 0 0 0 0. 0 0 0 0 0 0. 0 0 0 0 6 Al l o w a b l e In v e s t m e n t $0 . 1 5 9 4 0 $D . 0 3 3 3 9 $0 . 1 9 Z 1 9 De p r e c i a t i o n Ra t e fo r Di s t r i b u t i o n Ra t e fo r Te r m i n a l Fa c i l i t i e s Di s t r i b u t i o n De p r e c i a t i o n Ex p e n s e Te r m i n a l Fa c . De p r e c i a t i o n Ex p e n s e To t a l An n u a l De p r e c i a t i o n We i g h t e d Av e r a g e De p r e c i a t i o n Ra t e 3. 0 5 % 2. 2 5 % $ 6. 4 9 $ 1. 2 4 7. 7 3 2. 2 5 % In p u t At t a c h m e n t E Or d e r No . 33 0 3 1 Ca s e No . AV U - E - 1 4 - 0 2