65- 407 C.M.R. ch. 69, § 5
Until the date of completion of its next general rate proceeding, a utility may bill to the municipality, or other public authority, the charge for public fire protection for new hydrants installed on mains to which the first customer was connected on or before February 1, 1987, pursuant to the following formula:
The formula for determining the annual charge (AC) for a non-investor owned utility is:
AC = CH x [C + P + .02]
The formula for determining the annual charge (AC) for an investor-owned utility is:
AC = CH x [CD + CE/1 - (FIT - (FIT x SIT) + SIT + .02]
Where:
AC = Annual charge for a new hydrant on a main to which the first customer was connected on or before February 1, 1987.
C = Overall cost of capital for non-investor owner utilities, expressed as a decimal. Unless otherwise approved or set by the Director of Finance or the Commission, the cost of capital shall be the average interest rate for the first 15 years of the most recent issues of the Maine Bond Bank for a serial bond, assuming equal annual principal payments.
CH = cost of the hydrant.
CD = Cost of debt for an investor-owned utility, weighted by the debt ratio, expressed as a decimal. Unless otherwise approved or set by the Director of Finance or the Commission, the cost of debt and the debt ratio shall be those approved in the utility's most recent rate case.
CE = Cost of equity, weighted by the equity ratio, expressed as a decimal. Unless otherwise approved or set by the Director of Finance of the commission, the cost of equity and the equity ratio shall be those approved in the utility's most recent rate case.
FIT = The utility's marginal federal income tax rate allowed in its most recent rate case, expressed as decimal, unless a different tax rate is approved or set by the Director of Finance or the Commission.
P = Principal payment percentage annually, expressed as a decimal. Unless a different amount is approved or set by the Director of Finance or the Commission, the amount shall be .067 (15 years).
SIT = The utility's marginal state income tax rate allowed in its most recent rate case, expressed as a decimal, unless a different tax rate is approved or set by the Director of Finance or the Commission.
Until such time as the way on which a hydrant is located is accepted by a municipality or the municipality accepts responsibility for the hydrant as a public hydrant, the hydrant shall be considered private fire protection and shall be billed accordingly.
Any tariff provision that conflicts with this rule shall be null and void.
65- 407 C.M.R. ch. 69, § 5