Section 170IAC4-6-14. Ratemaking treatment; computation of revenue requirement

   A utility seeking ratemaking treatment under this rule for the value of its qualified pollution control property under construction shall use the following parameters in computing its related revenue requirement:

(1) If the utility is an investor-owned utility, it shall compute its weighted cost of capital used in the revenue requirement determination by including the following:

(A) The amount, ratio, and cost rate for the utility's long term debt and preferred equity capital as of the date of valuation of the utility's qualified pollution control property under construction for which the utility is seeking ratemaking treatment.

(B) The amount, ratio, and cost rate for the utility's common equity capital, where this amount corresponds to the date of valuation of the utility's qualified pollution control property under construction, and where the cost rate has been established by the commission in a previous proceeding involving the utility's base rates and charges. If the commission has established a range of cost rates for the utility's common equity capital, the utility shall use the midpoint of such range for the computation of its overall weighted cost of capital. The commission shall not make a new finding on the cost rate for the common equity capital of a utility in a proceeding under this rule unless the proceeding also involves the establishment or investigation of the utility's base rates and charges.

(C) The appropriate amount, ratio, and cost rate as of the date of valuation of the utility's qualified pollution control property under construction for such capital structure components as deferred taxes, customer deposits, and investment tax credits.

(2) If the utility is a municipal utility, it shall compute the revenue requirement associated with its qualified pollution control property under construction for which the utility is seeking ratemaking treatment under this rule on the basis of the following:

(A) The interest payments on indebtedness the utility has accrued in connection with its construction of qualified pollution control property, where the amount of indebtedness is reduced by amounts previously recognized in the utility's rates for debt service for the project or amounts previously recognized in rates for extensions and replacements used for the construction of the property.

(B) The return on plant authorized by the commission in the utility's last general rate case. The commission shall not make a new finding on the utility's return on plant in a proceeding under this rule unless the proceeding also involves the establishment or investigation of the utility's base rates and charges.

(Indiana Utility Regulatory Commission; 170 IAC 4-6-14; filed Oct 5, 1993, 5:00 p.m.: 17 IR 179; readopted filed Jul 11, 2001, 4:30 p.m.: 24 IR 4233; readopted filed Apr 24, 2007, 8:21 a.m.: 20070509-IR-170070147RFA; readopted filed Aug 2, 2013, 2:16 p.m.: 20130828-IR-170130227RFA)