N.M. Admin. Code § 17.9.540.16

Current through Register Vol. 35, No. 17, September 10, 2024

Section 17.9.540.16 - DEBT COST ADJUSTMENT CLAUSE

A. A coop's schedule of rates proposed pursuant to NMPSC Rule 540 [17.9.540 NMAC] may provide for the flow-through to customers of increases and decreases in the cost of debt capital incurred pursuant to securities, the issuance of which has been approved by the Commission, above or below debt cost utilized to establish the rates.

B. Unless the coop obtains the approval of the Commission or presiding officer for a different methodology, the clause in a rate containing such an adjustment shall provide at a minimum for the following:

(1) the Base Cost shall be the cost of Commission authorized debt capital as of the end of the test period upon which the rates were established, as annualized;

(2) the applicable debt cost expense shall be determined every calendar quarter by adding the actual changes in the Base Cost to or, as the case may be, subtracting these changes from the actual cost of new debt under securities approved by the Commission and incurred after the end of the period used to determine the Base Cost;

(3) a demand allocation factor shall be determined for each class of customers (the demand allocation factor shall be that upon which the cooperative's current rates were established but may be adjusted by the cooperative with prior approval of the Commission Executive Director on the basis of a more recent cost of service study or known and measurable changes); and

(4) the Debt Cost Adjustment amount to be allocated to each class of customers for the next succeeding calendar quarter shall be the result of multiplying items (2) and (3) above. The distribution of the Debt Cost Adjustment amount among the customers within each class may be on the basis of projected kilowatt demand or projected kilowatt-hour sales, as the coop elects to designate in its schedule of rates.

C. The coop shall file with the Commission the data and calculations called for by Paragraphs (1), (2), (3) and (4) of Subsection B of this Section above a minimum of ten (10) days before an adjustment factor is to be applied to billings.

D. The coop shall establish a Balancing Account to compensate for under-collections and over-collections of revenue by increasing or decreasing the adjustment factor for the next following calendar quarter and shall file with the Commission one (1) year from the date of the first Debt Cost Adjustment filing and annually thereafter a reconciliation of Debt Cost Adjustment revenues and expenses and the operation of the Balancing Account. The Commission will examine this filing to insure that only the appropriate revenues are being recovered.

E. The adjustment factor expressed in either cents per kilowatt-hour or cents per kilowatt and the resultant billing period charge shall be shown on each bill as Debt Cost Adjustment.

F. Notwithstanding NMPSC Rule 540.11 [17.9.540.16 NMAC], an effective schedule of rates, or the filing of information with the Commission, the Commission reserves the authority to entertain complaints and undertake investigations of Debt Cost Adjustments as provided in the Public Utility Act and NMPSC Rule 110 [17.1.2 NMAC].

N.M. Admin. Code § 17.9.540.16

Recompiled 12/30/01