Section 170 IAC 1-5-13 - Working papers and data; rate of return and capital structureAuthority: IC 8-1-1-3
Affected: IC 8-1-2-42
Sec. 13.
(a) An electing utility shall submit the following information: (1) Capitalization and capitalization ratios at the end of the test year and at the end of the year beginning twelve (12) months prior to the test year, respectively, including the following information:(A) Year-end interest coverage ratios for the test year and the year ended twelve (12) months prior to the end of the test year and a pro forma interest coverage under the rates proposed by the utility.(B) Year-end preferred stock dividend coverage ratios for the test year and the year ended twelve (12) months prior to the end of the test year.(C) The supporting calculations for the information described in clauses (A) and (B).(2) The following financial data relating to the utility as of the end of the most recent five (5) fiscal years: (A) Annual price earnings ratio.(B) Earnings-book value ratio on a per share basis, using average book value.(C) Annual dividend yield.(D) Annual earnings per share in dollars.(E) Annual dividends per share in dollars.(F) A book value per share yearly.(G) Average annual market price per share calculated using monthly high and low share market prices.(H) Pretax interest coverage ratio.(I) Posttax interest coverage ratio.(J) Market price-book value ratio average.(K) The supporting calculations for the information described in this subdivision.(3) The utility's capital structure and weighted average cost of capital as of the test year end, including the following information: (B) Long-term debt, including that maturing within one (1) year.(C) Other debt, with specificity.(D) Preferred or preference stock.(F) Sources of cost free capital, including the following: (i) Pre-1971 investment tax credit.(ii) Deferred taxes for ratemaking.(iii) FAS 106 nonexternally funded liabilities.(G) Post-1970 investment tax credit and other components as appropriate.(4) If an electing utility is asking for special treatment because of the provisions of any of the following documents of the utility or its parent company, or both, then copies of the document or documents with the affecting provision or provisions must also be submitted: (A) Articles of incorporation or a similar document.(C) Other loan documents.(D) Other documents that describe the following: (i) Coverage requirements.(ii) Limits on proportions of types of capital outstanding.(iii) Restrictions on dividend payouts.(5) A schedule of preferred stock outstanding by series, including current maturities, for the end of the test year and the latest date reasonably available.(6) A schedule of long-term debt outstanding by series, including current maturities, for the end of the test year and the latest date reasonably available.(7) A schedule of the following information for the utility as of the end of the test year and as of the latest date reasonably available prior to the postfiling date, respectively: (A) A computation of the embedded cost rate of long-term debt, including the amount maturing within twelve (12) months.(B) Computation of the embedded cost rates of other debt.(C) Computation of the embedded cost rates of preferred or preference stock, including amounts maturing within twelve (12) months.(8) Schedules required by this subsection should contain all relevant information, including, but not limited to, the following: (D) The coupon or dividend rate.(E) The net proceeds, including discounts and premiums.(F) The annual interest or dividend paid and balance of principal.(G) The calculations in this section.(9) The following information regarding the utility's plans regarding debt, common stock, and preferred stock during the year following the test year end:(A) Issues that are to be retired or refinanced.(B) If a refinancing is planned, the following:(i) The manner in which the refinancing will proceed, that is, sinking fund or refinancing.(ii) The source of the capital to be used to implement the refinancing.(iii) The estimated cost rate of new capital, the estimated overall cost of each refinancing operation, and any costbenefit analyses performed relating to each refinancing.(10) All relevant reports in the utility's possession by rating agencies on the utility and its parent company for the test year, and thereafter up to the date of the final hearing. The reports should be based on the debt:(A) used in calculations in the electing utility's filing; or(B) of a parent company or proxy company whose debt is rated.(11) Average monthly balance of short-term debt for the test year and the most recently available twelve (12) month period and the utility's current cost for short-term debt.(b) With respect to the electing utility's proposed cost of equity and proposed fair rate of return, an electing utility shall provide the following:(1) If an electing utility used a risk premium model to establish its cost of equity, all documents the electing utility used to estimate the risk premium.(2) If an electing utility used any other cost of equity models, all documents used by the utility to derive its estimate.(3) If an electing utility used a comparable earnings model and the proxy group contains more than twenty (20) companies, an electronic copy of the analysis used by the utility in whatever format or program was used to derive the electing utility's estimated cost of equity or fair rate of return.(c) To the extent the electing utility is prohibited from producing copies of the documentation listed in subsection (b)(1) through (b)(3) due to the documentation being licensed or proprietary material by agreement or by copyright law, the electing utility shall provide the following:(1) A list of which documents may not be copied and the reasons therefor.(2) Access to the documents listed in subdivision (1) to all parties to the proceeding under this rule at a mutually convenient time and place.Indiana Utility Regulatory Commission; 170 IAC 1-5-13; filed Oct 28, 1998, 3:38 p.m.: 22 IR 726; errata filed Nov 22, 1999, 3:32 p.m.: 23 IR 812; readopted filed Nov 23, 2004, 2:30 p.m.: 28 IR 1315; filed Jul 31, 2009, 8:28 a.m.: 20090826-IR-170080670FRAReadopted filed 6/9/2015, 3:18 p.m.: 20150708-IR-170150103RFAReadopted filed 10/7/2021, 1:05 p.m.: 20211103-IR-170210349RFA