Okla. Admin. Code § 165:70-5-31

Current through Vol. 42, No. 7, December 16, 2024

Section 165:70-5-31 - Section K - Jurisdictional separations and allocations/Cost of service

Section K - Jurisdictional Separations and Allocations/Cost of Service of the supplemental package shall contain data and workpapers to support a utility's separations and allocation factors.

(1) For gas and electric utilities and rural electric cooperatives:

(A) W/P K-1 - Rate of Return: A summary of each jurisdictional class data which shall include, but not necessarily be limited to, the following information by account code:

(i) Revenues from sales of electricity or natural gas.

(ii) Other revenues.

(iii) Fuel, purchased power or natural gas revenues.

(iv) Operating & maintenance expenses.

(v) Depreciation and amortization expenses.

(vi) Taxes other than income taxes.

(vii) Provision for income taxes.

(viii) Gross plant.

(ix) Reserve for depreciation.

(x) Construction work in progress (CWIP).

(xi) Plant held for future use.

(xii) Materials, supplies and fuel inventories.

(xiii) Gas in storage.

(xiv) Cash working capital.

(xv) Prepayments.

(xvi) Customer deposits.

(xvii) Accumulated deferred income taxes (if applicable).

(xviii) Customer advances.

(xix) Property insurance (if applicable).

(xx) Other items as needed.

(B) W/P K-2 - Allocation of Revenue Deductions to Jurisdictions: A schedule which provides all revenue deductions and shall include all deductions from income used to develop return. Additionally, all allocations shall be labeled in such a manner as to identify the basis for each cost allocation, and all allocators shall be thoroughly defined. The schedule shall provide the following as allocated to the jurisdictions:

(i) Operating and maintenance expense by the applicable regulatory primary account.

(ii) Depreciation expenses, consistent with the plant presentation contained in 165:70-5-23 and 165:70-5-24.

(iii) Any other revenue deductions.

(C) W/P K-3 - Allocation of Rate Base to Jurisdictions: A schedule which contains the same information as required in subparagraph (B) of this paragraph as that information pertains to rate base. The schedule shall provide the following as allocated to the jurisdictions:

(i) Gross plant or net plant by the applicable regulatory primary account.

(ii) If gross plant was provided in (i) of this subparagraph, accumulated depreciation and amortization by:

(I) Industry-specific major function; and,

(II) If available, the applicable regulatory primary account.

(iii) CWIP.

(iv) Materials, supplies and fuel inventories.

(v) Gas in storage.

(vi) Cash working capital.

(vii) Any other rate base items.

(viii) Prepayments.

(D) W/P K-4 - Classification of Expenses: If the utility classifies expenses (e.g., energy, demand, customer, etc.), it must provide a schedule or other designation by account which provides the separation of expenses by classification. Identify revenue-related and directly-assigned expenses as such. Care shall be taken to ensure that the assignment of all expenses from accounts to classification is identified. This workpaper is not applicable to cost allocations covered by paragraph (3) of this Section.

(E) W/P K-5 - Classification of Rate Base: If the utility classifies rate base (e.g., energy, demand, customer, etc.), it must provide a schedule or other designation by account which provides the separation of expenses by classification. Identify revenue-related and directly-assigned items as such. Care shall be taken to ensure that the assignment of all expenses from accounts to classification is identified. This workpaper is not applicable to cost allocations covered by paragraph (3) of this Section.

(F) W/P K-6 - Allocation Factors: Workpapers which provide the following data:

(i) Allocation factors and associated data which shall include the following information for every factor used to assign costs to each jurisdiction:

(I) The designation of the allocation factor used in Schedules K-1 through K-5 required in (A) through (E) of this paragraph.

(II) A description of the allocation factor if a code designation is used.

(III) The relative (decimal representation of percentages) amounts constituting the allocation factors.

(IV) The absolute amounts constituting the factors. That is, the Kw, kWh, Loss Of Load Probability, Mcfs, MMBtu, contract demand MMBtu, number of customers, or dollars, etc., that are used as the numerators and divisors in calculating the allocation factors in (III) of this unit.

(ii) Workpapers and explanations which support the calculation of each allocation factor listed in (i) of this subparagraph. To the extent that key operating statistics provided in Section M are employed in directly developing the allocation factors, workpapers shall be referenced directly to that data.

(iii) A description of the direct assignment(s) of costs which provide the justification for such assignment.

(G) W/P K-7 - Demand and Energy Factors: A listing which provides the demand and energy loss factors used in the cost of service study, by jurisdiction and:

(i) The information required in this workpaper shall be detailed by voltage level for electric companies.

(ii) The information required in this workpaper shall be detailed by distribution or transmission service for gas companies.

(H) W/P K-8 - Support for Production Allocation Methodology or Demand Allocation Factors: A workpaper which provides the rationale for the selection of each allocation methodology used in the jurisdictional cost of service or a cross-reference to where such information is otherwise provided. The rationale may consist of a cost justification, a special study, and/or a narrative explanation with supporting workpapers.

(I) W/P K-9 - Summary of Changes in Allocation Factors: A schedule which details the allocation factors which differ from those filed by the utility in the utility's last general rate review.

(J) W/P K-10 - Payroll Expense Distribution: A schedule of the test year adjusted payroll expense by industry-specific functional group and by applicable regulatory primary account, if such information was relied upon by the utility for allocations.

(K) W/P K-11 - Financial Data for Noninvestor-owned Utilities: A schedule which provides total operating margins, times interest earned ratios (TIER) and debt service coverage (DSC) by rate jurisdiction.

(2) For telephone companies: Telephone companies should utilize FCC jurisdictional cost separation procedures to develop and present data requested by subparagraphs A and B below:

(A) W/P K-1 - Separation of Expense and Rate Base - Workpapers which provide expense and rate base columns for total Oklahoma operations, adjustments required to calculate the amount subject to Oklahoma jurisdictional separations, intrastate factors and intrastate jurisdictional amounts. The columnar data should be presented in at least major account level of detail. The test period total of jurisdictional amounts should correspond to amounts presented in Schedules B and H of Section 165:70-5-4.

(B) W/P K-2 - Allocation of Expense and Rate Base: A schedule for each set of factors described in Section 165:70-5-4 Schedule K-2, including a brief description (name or identifier) of the factor, the factor, categories to which it is applied, total amount by category being allocated, and the amount allocated to Oklahoma. If necessary, additional columns should be added to indicate intrastate Oklahoma amounts.

(3) Holding company cost allocations to OCC jurisdictional utilities or allocations from OCC jurisdictional utilities to their nonjurisdictional affiliates: To the extent not otherwise provided, the utility shall provide all cost studies, workpapers, internal policies, procedures and details depicting the amounts allocated, allocation factors, and a description of each allocation methodology.

Okla. Admin. Code § 165:70-5-31

Added at 11 Ok Reg 3753, eff 7-11-94