N.J. Admin. Code § 14:3-13.3

Current through Register Vol. 56, No. 24, December 18, 2024

Section 14:3-13.3 - Interest calculation on over or under recoveries

(a) Each utility shall determine whether it owes interest to customers on excess funds recovered through adjustment clauses, and shall calculate any interest owed, in accordance with this subchapter. In no event shall interest be due to the utility as a result of a BGSS pricing clause, a purchased water adjustment clause, or a purchased wastewater treatment adjustment clause.

(b) The calculation of the amount of interest owed to customers, if any, shall cover the "applicable period," which shall be the 12-month period under review in the clause proceeding, unless otherwise specified by the Board.

(c) A gas utility, or a Class A water utility, or a wastewater utility that meets the revenue threshold for a Class A water utility, shall calculate the interest due to customers as follows:

1. Determine the interest rate to be used in the calculation as follows:

i. Divide the utility's Board-approved overall rate of return, in effect at the time of the calculation, by 12; and

ii. Round the amount derived under (c)1i above to four decimal places; and

2. Apply the interest rate in (c)1 above to calculate the interest due to customers in accordance with the applicable requirements at (d) or (e) below.

(d) A gas utility shall:

1. Determine the interest rate for each month of the applicable period in accordance with (c)1 above;

2. Multiply the rate determined under (d)1 above by the average over/under-recovered gas cost balance for the month; and

3. At the end of the applicable period, add together the monthly amounts calculated under (d)2 above.

(e) A Class A water utility, or wastewater treatment utility that meets the revenue threshold for a Class A water utility, shall:

1. If the utility bills customers monthly, the utility shall calculate the interest in the same manner as gas utilities under (d) above, utilizing the over-recovery amount determined under N.J.A.C. 14:9-7.4, rather than the over-recovered gas cost balance; or

2. If the utility bills customers quarterly, the utility shall, at the end of the applicable period, do the following:

i. Multiply the over-recovery amount determined under N.J.A.C. 14:9-7.4 by the interest rate determined in (c)1 above; and

ii. Multiply the amount determined under (e)2i above by the number of months in the applicable period.

(f) A Class B, C, or D water utility, or a wastewater utility that does not meet the revenue threshold for a Class A water utility, shall:

1. Multiply the over-recovery amount determined under N.J.A.C. 14:9-7.4 by the interest rate determined in (c)1 above;

2. Multiply the amount determined under (f)1 above by the number of months in the applicable period; and

3. Round this amount to four decimal places.

(g) If the amount resulting from the calculations at (d), (e), or (f) above is zero or a negative number, the utility shall not owe interest to customers for the applicable period. If the amount is a positive number, this is the amount of interest that is due to customers.

(h) Any interest due to customers from a water or wastewater utility shall be credited or refunded to customers in accordance with N.J.A.C. 14:9-7.4.

(i) Any interest due to customers from a gas utility shall be added to the utility's over/under-recovered cost balance. The sum of the interest and the over/under-recovered cost balance shall be incorporated into the calculations of the BGSS rate for the next applicable period.

N.J. Admin. Code § 14:3-13.3

Amended by R.2002 d.280, effective 9/16/2002.
See: 34 N.J.R. 992(a), 34 N.J.R. 3216(b).
Rewrote the section.
Repeal and New Rule, R.2008 d.119, effective 5/19/2008.
See: 39 N.J.R. 4077(b), 40 N.J.R. 2481(a).
Section was "Interest rate".