Virginia Law

The following instructions for schedules and exhibits are to be used in conjunction with this chapter:

Schedule 1 - Historical Profitability and Market Data

Instructions: Using the format of Form Schedule 1 and the following definitions, provide the data for the test period and four prior fiscal years. The information shall be compatible with the latest SEC Form 10-K consolidated financial statements (including any restatements). Information in Sections A and B of Schedule 1 shall be compiled for the corporate entity that raises equity capital in the marketplace. Information in Section C of Schedule 1 shall be compiled for the subsidiary company that provides regulated utility service in Virginia.

Definitions for Schedule 1

Dividends Per Share = Common Dividends Paid per Share During the Year

Payout Ratio = DPS/EPS

Dividend Yield = DPS/Year End Price

Price Earnings Ratio = Average Market Price/EPS

Schedule 2 - Interest and Cash Flow Coverage Data

Instructions: This schedule shall be prepared using the following definitions and instructions and presented in the format of Form Schedule 2. The information shall be provided for the test period and the four prior fiscal years based on information for the applicant and for the consolidated company if the applicant is a subsidiary.

- Interest (Lines 3, 4, and 5) shall include amortization of expenses, hedging gains and losses, discounts, and premiums on debt without deducting an allowance for borrowed funds used during construction.

- Income taxes (Line 2) shall include federal and state income taxes.

- Allowance for Funds Used During Construction ("AFUDC") (Line 8), where applicable, is total AFUDC -- for borrowed and other funds.

- Preferred dividends (Line 13) for a subsidiary shall be stated per books.

- Construction expenditures (Line 15) are net of AFUDC.

- Common dividends (Line 16) for a subsidiary shall be stated per books.

Schedule 3 - Capital Structure and Cost of Capital Statement - Per Books and Average

Instructions: This schedule shall show the amount of each capital component per balance sheet, the amount for ratemaking purposes, the percentage weight in the capital structure, and the component cost and weighted cost, using the format in Form Schedule 3. The information shall be provided for the test period, the four prior fiscal years, and on a 13-month average or five-quarter average basis for the test period. The data shall be provided for the entity whose capital structure was approved for use in the applicant's last rate case.

In Part A, the information shall be compatible with the latest SEC Form 10-K consolidated financial statements (including any restatements). In Parts B, C, and D, the methodology shall be consistent with that approved in the applicant's last rate case. Reconcile differences between Parts A and B for both end-of-test-period and average capital structures.

The amounts for all short-term debt, revolving credit agreements, and similar short-term financing arrangements in Part B shall be based on a daily average over the test year, or alternatively, on a 13-month average over the test year. Except for the Part B amount for short-term debt and average amounts in Column (6), all other accounts are end-of-year and end-of-test period.

The component weighted cost rates equal the product of each component's capital structure weight for ratemaking purposes times its cost rate. The weighted cost of capital is equal to the sum of the component weighted cost rates. The Investment Tax Credits cost is equal to the weighted cost of permanent capital (long-term debt, preferred stock, and common equity).

Adjustments made to per books amounts shall be fully documented and explained.

For investor-owned electric utilities subject to § 56-585.1 of the Code of Virginia, Parts A, B, C, and D shall be based on the utility's actual, end-of-period capital structure.

In an application for a rate adjustment clause pursuant to § 56-585.1 A 5 or A 6 of the Code of Virginia, Schedule 3 information shall be provided to support each actual, end-of-period capital structure for each year necessary to calculate the revenue requirement. Information for prior time periods not necessary to calculate the revenue requirement need not be provided.

Schedule 4 - Schedules of Long-Term Debt, Preferred Stock, Investment Tax Credits, and Any Other Component of Ratemaking Capital

Instructions: For each applicable capital component, provide a schedule that shows, for each issue, the amount outstanding, its percentage of the total capital component, and the effective cost rate. This data shall support the amount and cost rate of the respective capital components contained in Schedule 3, consistent with the methodology approved in the applicant's last rate case. In addition, a detailed breakdown of all investment tax credits should be provided that reconciles to the per books balance of investment tax credits. These schedules should reflect disclosure of any associated hedging/derivative instruments, their respective terms and conditions (instrument type, notional amount and associated series of debt or preferred stock hedged, period in effect, etc.), and the impact of such instruments on the cost of debt or preferred stock.

Schedule 5 - Schedule of Short-Term Debt, Revolving Credit Agreements, and similar Short-Term Financing Arrangements

Instructions: Utilities that are not subject to § 56-585.1 of the Code of Virginia shall provide data and explain the methodology, which should be consistent with the methodology approved in the applicant's last rate case, used to calculate the cost and balance contained in Schedule 3 for short-term debt, revolving credit agreements, and similar arrangements.

Investor-owned electric utilities subject to § 56-585.1 of the Code of Virginia shall file data consistent with the utility's end of test period capital structure and cost of short-term debt.

This schedule should also provide detailed disclosure of any hedging/derivative instruments related to short-term debt, their respective terms and conditions (instrument type, notional amount and associated series of debt hedged, period in effect, etc.), and the impact of such instruments on the cost of short-term debt.

Schedule 6 - Public Financial Reports

Instructions: Provide copies, or a link to where such copies can be found on the Internet, of the most recent Stockholder's Annual Report, Securities and Exchange Commission Form 10-K, and Form 10-Q for the applicant and the consolidated parent company if the applicant is a subsidiary. If published, provide a copy, or a link to where such copy can be found on the Internet, of the most recent statistical or financial supplement for the consolidated parent company.

Schedule 7 - Comparative Financial Statements

Instructions: If not provided in the public financial reports for Schedule 6, provide comparative balance sheets, income statements, and cash flow statements for the test year and the 12-month period preceding the test year for the applicant and its consolidated parent company if applicant is a subsidiary. In lieu of providing a copy, the applicant may provide a link to where such information can be found on the Internet.

Schedule 8 - Proposed Cost of Capital Statement

Instructions: Provide the applicant's proposed capital structure/cost of capital schedule. In conjunction, provide schedules that support the amount and cost rate of each component of the proposed capital structure, and explain all assumptions used.

Schedule 9 - Rate of Return Statement - Earnings Test - Per Books

Instructions: Use the format of Form Schedule 9.

For cases filed pursuant to § 56-585.1 A of the Code of Virginia, Schedule 9 shall reflect average rate base. Interest expense, preferred dividends, and common equity capital shall be calculated using the actual end-of-test period capital structure included in Schedule 3 B and average rate base. In all other cases, Schedule 9 shall reflect average rate base, capital, and common equity capital. Interest expense, preferred dividends, and common equity capital shall be calculated by using the average capital structure included in Schedule 3 B and average rate base.

Utilities not subject to § 56-585.1 of the Code of Virginia shall file only Columns (1), (2), and (3) on Schedule 9.

Revenues presented in Schedule 9 shall include separate line items for each type of revenue (e.g., base rates and § 56-585.1 A 4, A 5, and A 6 rate adjustment clauses, fuel factor, late payment fees, and miscellaneous revenue).

Schedule 10 - Rate of Return Statement - Earnings Test - Generation and Distribution Per Books

Instructions: Use the format of Form Schedule 10.

Utilities not subject to § 56-585.1 of the Code of Virginia may omit Schedule 10.

Schedule 10 shall reflect combined generation and distribution operations. Additionally, utilities shall file Schedule 10A, reflecting generation only operations, and Schedule 10B, reflecting distribution only operations, using the same format as Schedule 10.

For cases filed pursuant to § 56-585.1 A of the Code of Virginia, Schedule 10 shall reflect the average rate base. Interest expense, preferred dividends, and common equity capital shall be calculated by using the actual end-of-test period capital structure included in Schedule 3 B and average rate base. In all other proceedings, Schedule 10 shall reflect average rate base, capital, and common equity capital. Interest expense, preferred dividends, and common equity capital shall be calculated by using the average capital structure included in Schedule 3 B and average rate base.

Revenues presented in Schedule 10 shall include separate line items for each type of revenue (e.g., base rates and § 56 585.1 A 4, A 5, and A 6 rate adjustment clauses, fuel factor, late payment fees, and miscellaneous revenue).

Schedule 10 Columns (2) and (3) shall reflect revenues, expenses, and rate base for commission approved rate adjustment clauses pursuant to § 56-585.1 A 5 or A 6 of the Code of Virginia, respectively. Schedule 10 Column (4) shall include revenues, expenses, and rate base intended to be recovered through prospective rate adjustment clauses.

Schedule 11 - Rate of Return Statement - Earnings Test - Adjusted to a Regulatory Accounting Basis

Instructions: Use the format of Form Schedule 11.

For utilities subject to § 56-585.1 of the Code of Virginia, Schedule 11 shall reflect combined generation and distribution operations. Such utilities shall file Schedule 11A, reflecting generation only operations, and Schedule 11B, reflecting distribution only operations, using the same format as Schedule 11. Additionally, such utilities shall file Schedule 11C reflecting the fully-adjusted results of its generation and distribution operation for each test period under review and the combined results for all test periods.

Revenues presented in Schedule 11 shall include separate line items for each type of revenue (e.g., base rates and § 56-585.1 A 4, A 5, and A 6 rate adjustment clauses, fuel factor, late payment fees, and miscellaneous revenue).

Schedule 11 adjustments in Column (2) shall reflect any financial differences between per books and regulatory accounting as prescribed by the commission. Each Column (2) adjustment shall be separately identified and reflected in Schedule 16.

A per books regulatory accounting adjustment to reflect Investment Tax Credit (ITC) Capital Expense shall be reflected in Schedule 11 Column (2), if applicable. Column (3) ITC Capital Expense shall be calculated as follows:

ITC Capital Expense = Rate Base (line 25) * weighted cost of ITC Capital in Schedule 3

The associated income tax savings shall be reflected in lines 5 and 6, Column (2) as follows:

Associated income tax savings = total average rate base (line 25) * weight of ITC capital (Sch. 3) * weighted cost of debt component of the ITC cost component (Sch. 3) * (Federal and State Income Tax rate * -1)

Schedule 11 Line 15 other income/(expense) shown in Column (3) shall be the current amount of other income/(expense) categorized as jurisdictional in the applicant's last rate case.

Schedule 12 - Rate Base Statement - Earnings Test - Per Books

Instructions: Use the format of Form Schedule 12.

Utilities not subject to § 56-585.1 of the Code of Virginia shall file only Columns (1), (2), and (3) on Schedule 12.

Applicants with jurisdictional per books operating revenues of more than $150 million shall calculate cash working capital allowance using a lead/lag study. Applicants with jurisdictional per books operating revenues between $20 and $150 million may include a zero cash working capital requirement rather than perform a lead/lag study.

Schedule 13 - Rate Base Statement - Earnings Test - Generation and Distribution Per Books

Instructions: Use the format of Form Schedule 13.

Utilities not subject to § 56-585.1 of the Code of Virginia may omit Schedule 13.

For utilities subject to § 56-585.1, Schedule 13 shall reflect combined generation and distribution operations. Additionally, such utilities shall file Schedule 13A, reflecting generation only operations, and Schedule 13B, reflecting distribution only operations, using the same format as Schedule 13.

Schedule 13 Columns (2) and (3) shall reflect rate base information for commission-approved rate adjustment clauses pursuant to § 56-585.1 A 5 or A 6 of the Code of Virginia. Column (4) shall reflect rate base information for amounts intended to be recovered through prospective rate adjustment clauses.

Cash working capital allowance shall be calculated using a lead/lag study.

Schedule 14 - Rate Base Statement - Earnings Test - Adjusted to Regulatory Accounting Basis

Instructions: Use the format of Form Schedule 14.

For utilities subject to § 56-585.1 of the Code of Virginia, Schedule 14 shall reflect combined generation and distribution operations. Additionally, such utilities shall file Schedule 14A, reflecting generation only operations, and Schedule 14B, reflecting distribution only operations, using the same format as Schedule 14.

Cash working capital allowance shall be calculated using a lead/lag study. Schedule 14 Column (2) shall reflect adjustments necessary to identify any financial differences between per books and regulatory accounting as prescribed by the commission. Each Column (2) adjustment shall be separately identified and reflected in Schedule 16.

Schedule 15 - Schedule of Regulatory Assets

Instructions: Use the format of Form Schedule 15.

For utilities subject to § 56-585.1 of the Code of Virginia, Schedule 15 shall reflect combined generation and distribution operations as well as generation only operations and distribution only operations.

All regulatory assets shall be individually listed with associated deferred income tax. Indicate whether the regulatory asset (i) is included in financial reporting or is currently recognized for ratemaking purposes only; and (ii) is subject to an earnings test.

Schedule 16 - Detail of Regulatory Accounting Adjustments

Instructions: If applicable per Schedules 9 and 12 instructions.

Use the format of Form Schedule 16.

For utilities subject to § 56-585.1 of the Code of Virginia, Schedule 16 shall reflect combined generation and distribution operations as well as generation only operations and distribution only operations.

Each regulatory accounting adjustment shall be numbered sequentially beginning with ET-1 and listed under the appropriate description category (Operating Revenues, Interest Expense, Common Equity Capital, etc.).

Each regulatory accounting adjustment shall be fully explained in the description column of this schedule. Regulatory accounting adjustments shall adjust from a financial accounting basis to a regulatory accounting basis. Adjustments to reflect going-forward operations shall not be included on this schedule.

Detailed workpapers substantiating each adjustment shall be provided in Schedule 29.

Schedule 17 - Lead/Lag Cash Working Capital Calculation - Earnings Test

Instructions: Use the format of Form Schedule 17.

For utilities subject to § 56-585.1 of the Code of Virginia, Schedule 17 shall reflect combined generation and distribution operations. Additionally, such utilities shall file Schedule 17A, reflecting generation only operations, and Schedule 17B, reflecting distribution only operations, using the same format as Schedule 17.

Total Balance Sheet Net Source/Use of Average Cash Working Capital determined in Schedule 18 shall be included in the Total Cash Working Capital amount in this schedule.

The Total Cash Working Capital amount determined in this schedule shall be included in Schedules 12, 13, and 14.

Utilities should perform a complete lead/lag analysis every five years. Major items, such as the revenue lag and balance sheet accounts, should be reviewed every year.

Schedule 18 - Balance Sheet Analysis - Earnings Test

Instructions: Use the format of Form Schedule 18.

For utilities subject to § 56-585.1 of the Code of Virginia, Schedule 18 shall reflect combined generation and distribution operations as well as generation only operations and distribution only operations.

All uses and sources of cash working capital shall be detailed in this schedule. The associated accumulated deferred income tax shall also be included as a use or source.

The Net Source/Use of Average Cash Working Capital determined in this schedule shall be included in Schedule 17.

Support for Schedule 18 shall include a list of all balance sheet subaccounts and titles. Indicate whether the account's impact is included in (i) the balance sheet analysis; (ii) the capital structure; (iii) the income statement portion of the lead/lag study; (iv) elsewhere in rate base; or (v) excluded from cost of service. Applicants shall also include a brief description of the costs in each account.

Schedule 19 - Rate of Return Statement - Per Books

Instructions: Use the format of Form Schedule 19.

For utilities subject to § 56-585.1 of the Code of Virginia, Schedule 19 shall reflect combined generation and distribution operations.

Utilities not subject to § 56-585.1 shall file only Columns (1), (2), and (3) on Schedule 19.

Revenues presented in Schedule 19 shall include separate line items for each type of revenue (e.g., base rates and § 56-585.1 A 4, A 5, and A 6 rate adjustment clauses, fuel factor, late payment fees, and miscellaneous revenue).

Column (1) interest expense, preferred dividends, and common equity capital shall be calculated by using the capital structure included in Schedule 3 or Schedule 8 and end of test year level rate base.

Schedule 20 - Rate of Return Statement - Generation and Distribution Per Books

Instructions: Use the format of Form Schedule 20.

Utilities not subject to § 56-585.1 of the Code of Virginia may omit Schedule 20.

Schedule 20 shall reflect combined generation and distribution operations. Additionally, such utilities shall file Schedule 20A, reflecting generation only operations, and Schedule 20B, reflecting distribution only operations, using the same format as Schedule 20.

Revenues presented in Schedule 20 shall include separate line items for each type of revenue (e.g., base rates and § 56-585.1 A 4, A 5, and A 6 rate adjustment clauses, fuel factor, late payment fees, and miscellaneous revenue).

Schedule 20 Columns (2) and (3) shall reflect revenues, expenses, and rate base for commissionapproved rate adjustment clauses pursuant to § 56-585.1 A 5 or A 6 of the Code of Virginia, respectively. Schedule 20 Column (4) shall reflect revenues, expenses, and rate base intended to be recovered through prospective rate adjustment clauses.

Interest expense, preferred dividends, and common equity capital shall be calculated by using the capital structure included in Schedule 3 or Schedule 8 and end of test year level rate base.

Schedule 21 - Rate of Return Statement - Reflecting Ratemaking Adjustments

Instructions: Use the format of Form Schedule 21.

Revenues presented in Schedule 21 shall include separate line items for each type of revenue (e.g., base rates and § 56-585.1 A 4, A 5, and A 6 of the Code of Virginia rate adjustment clauses, fuel factor, late payment fees, and miscellaneous revenue).

For utilities subject to § 56-585.1 of the Code of Virginia, Schedule 21 shall reflect combined generation and distribution operations. Additionally, such utilities shall file Schedule 21A, reflecting generation only operations, and Schedule 21B, reflecting distribution only operations, using the same format as Schedule 21.

Schedule 21 Column (2) adjustments shall be separately identified and reflected in Schedule 25.

Interest expense, preferred dividends, and common equity capital shall be calculated by using the capital structure included in Schedule 3 or Schedule 8 and an adjusted level of rate base.

After ratemaking adjustments, ITC capital expense shall be calculated as follows:

Total rate base (Line 29) * weighted cost of ITC capital in Schedule 3 or 8

Applicants filing pursuant to 20VAC5-204-30 may omit Columns (4) and (5).

Schedule 22 - Rate Base Statement - Per Books

Instructions: Use the format of Form Schedule 22.

Utilities not subject to § 56-585.1 of the Code of Virginia shall file only Columns (1), (2), and (3) on Schedule 22.

Applicants with jurisdictional per books operating revenues more than $150 million shall calculate cash working capital allowance using a lead/lag study. Applicants with jurisdictional per books operating revenues between $20 million and $150 million may include a zero cash working capital requirement rather than perform a lead/lag study.

Schedule 23 - Rate Base Statement - Generation and Distribution Per Books

Instructions: Use the format of Form Schedule 23.

For utilities subject to § 56-585.1 of the Code of Virginia, Schedule 23 shall reflect combined generation and distribution operations. Additionally, such utilities shall file Schedule 23A, reflecting generation only operations, and Schedule 23B, reflecting distribution only operations, using the same format as Schedule 23.

Utilities not subject to § 56-585.1 may omit Schedule 23.

Schedule 23 Columns (2) and (3) shall reflect rate base information for commission-approved rate adjustment clauses pursuant to § 56-585.1 A 5 or A 6 of the Code of Virginia, respectively. Schedule 23 Column (4) shall reflect rate base information for amounts intended to be recovered through prospective rate adjustment clauses.

Cash working capital allowance shall be calculated using a lead/lag study.

Schedule 24 - Rate Base Statement - Adjusted - Reflecting Ratemaking Adjustments

Instructions: Use the format of Form Schedule 24.

For utilities subject to § 56-585.1 of the Code of Virginia, Schedule 24 shall reflect combined generation and distribution operations. Additionally, such utilities shall file Schedule 24A, reflecting generation only operations, and Schedule 24B, reflecting distribution only operations, using the same format as Schedule 24.

Cash working capital allowance shall be calculated using a lead/lag study.

Schedule 25 - Detail of Ratemaking Adjustments

Instructions: Use the format of Form Schedule 25.

For utilities subject to § 56-585.1 of the Code of Virginia, Schedule 25 shall reflect combined generation and distribution operations as well as generation only operations and distribution only operations.

Each adjustment shall be numbered sequentially and listed under the appropriate description category (Operating Revenues, Interest Expense, Common Equity Capital, etc.).

Ratemaking adjustments shall reflect an annual level of revenues and expenses in accordance with applicable rules and laws governing utility rate changes. Rate base adjustments may reflect no more than a rate year average. Detailed workpapers substantiating each adjustment shall be provided in Schedule 29.

Schedule 26 - Revenue Requirement Reconciliation

Instructions: Use the format of Form Schedule 26 for lead schedule. An example of a supporting schedule is provided.

For utilities subject to § 56-585.1 of the Code of Virginia, Schedule 26 shall reflect combined generation and distribution operations. Additionally, such utilities shall file Schedule 26A, reflecting generation only operations, and Schedule 26B, reflecting distribution only operations, using the same format as Schedule 26.

Provide a revenue reconciliation of each topic or subject that affects the revenue requirement. All components of each topic or subject shall be detailed (i.e., payroll and related = payroll, benefits, payroll taxes, and related tax effect) on a supporting schedule. Cash working capital shall be considered a separate topic or subject rather than as a component of each topic or subject.

Schedule 27 - Lead/Lag Cash Working Capital Calculation - Adjusted

Instructions: Use the format of Form Schedule 27.

For utilities subject to § 56-585.1 of the Code of Virginia, Schedule 27 shall reflect combined generation and distribution operations. Additionally, such utilities shall file Schedule 27A, reflecting generation only operations, and Schedule 27B, reflecting distribution only operations, using the same format as Schedule 27.

Total Balance Sheet Net Source/Use of Average Cash Working Capital determined in Schedule 28 shall be included in the Total Cash Working Capital amount in this schedule.

The Total Cash Working Capital amount determined in this schedule shall be included in Schedules 22, 23, and 24.

Utilities required to use a lead/lag study should perform a complete lead/lag analysis every five years. Major items such as the revenue lag and balance sheet accounts should be reviewed every year.

Schedule 28 - Balance Sheet Analysis - Adjusted

Instructions: Use the format of Form Schedule 28.

For utilities subject to § 56-585.1 of the Code of Virginia, Schedule 28 shall reflect combined generation and distribution operations as well as generation only operations and distribution only operations.

All uses and sources of cash working capital shall be detailed in this schedule. The associated accumulated deferred income tax shall also be included as a use or source.

The Net Source/Use of Average Cash Working Capital determined in this schedule shall be included in Schedule 27.

Support for the Schedule 28 should include a list of all balance sheet subaccounts and titles. Additionally, support for Schedule 28 should include a brief description of the cost in each balance sheet subaccount, whether the cost is presented on an end-of-period or 13-month average basis, and the reasons why such cost is presented on an end-of-period or 13-month average basis. Indicate whether the account's impact is included in (i) the balance sheet analysis; (ii) the capital structure; (iii) the income statement portion of the lead/lag study; (iv) elsewhere in rate base; or (v) excluded from cost of service. Include a brief description of the costs included in each account. Whether the cost is presented on an end-of-period or 13-month average basis, applicants shall provide the monthly balances making up the 13-month average.

Schedule 29 - Workpapers for Earnings Test and Ratemaking Adjustments

Instructions: Include a table of contents listing the work papers included in this schedule.

a. Provide a narrative explaining the purpose and methodology used for each adjustment identified in subsections b and d of these instructions that have not been addressed in the applicant's direct testimony. Such explanation shall reference any relevant Financial Accounting Standards Board ("FASB") statement or commission precedent if known or available.

b. Provide a summary calculation of each earnings test adjustment included in Schedule 16. Each summary calculation shall identify the source documents used to prepare such calculation.

c. Provide all relevant documents references and information necessary to support the summary calculation required in subsection b of these instructions for each proposed earnings test adjustment. Amounts identified as per books costs shall include any documentation or references necessary to verify such amount to Schedule 40a. Working papers shall be indexed and tabbed for each adjustment and include the name of the primary employee or employees responsible for the adjustment. All documents and information as referenced above should include general ledgers, payroll distributions, billing determinants, invoices, and actuarial reports. Supporting documentation that is voluminous may be made available at the applicant's office.

d. Provide a summary calculation of each rate year adjustment included in Schedule 25. Each summary calculation shall identify the source documents used to prepare such calculation.

e. Provide all relevant documents and information necessary to support the summary calculation required in subsection d of these instructions for each proposed rate year adjustment. Amounts identified as per books costs shall include any documentation necessary to verify such amount to Schedule 40b. Working papers shall be indexed and tabbed for each adjustment and include the name of the primary employees responsible for the adjustment. All documents and information as referenced in subsections a through f of these instructions should include general ledgers, payroll distributions, billing determinants, invoices, and actuarial reports.

f. Investor-owned electric utilities subject to § 56-585.1 of the Code of Virginia shall separately identify functional information for each earnings test and proposed rate year adjustment required in subsections b and d of these instructions.

Schedule 30 - Revenue and Expense Variance Analysis

Instructions: Applicant shall quantify jurisdictional operating revenues and system operating and maintenance expenses by primary account as specified by the Federal Energy Regulatory Commission Uniform System of Accounts (hereinafter referred to as "USOA account") during the test period and the preceding 12 months. Also, provide jurisdictional sales volumes by customer class for the test period.

Applicants shall file a schedule detailing all revenue and expense accounts by month for the test period. Applicants shall provide a detailed explanation of all jurisdictional revenue and system expense increases or decreases of more than 10% during the test period compared to the previous 12-month period. The expense variance analysis applies to test period expense items greater than one-tenth of one percent (.001) of Operating & Maintenance expenses excluding fuel factor costs. Additionally, the applicant shall provide an electronic spreadsheet version of the accounts payable ledger or schedule of all accounts payable electronically to the Division of Utility Accounting and Finance within five business days of the application filing date.

Schedule 31 - Advertising Expense

Instructions: A schedule detailing advertising expense by USOA account and grouped according to the categories identified in § 56-235.2 of the Code of Virginia shall be provided. Advertising costs that are not identifiable to any of those categories shall be included in a separate category titled "other." If applicant seeks rate relief, demonstrate that the applicant's advertising meets the criteria established in § 56-235.2 of the Code of Virginia.

Schedule 32 - Storm Damage

Instructions: Provide a schedule identifying major storm damage expense by month, Federal Energy Regulatory Commission account, and internal or third-party cost for the test year. Include a detailed description of the damage sustained, the length of outages associated with the storm damage, and work necessary to restore service. Applicants filing a base rate increase application pursuant to Chapter 10 (§ 56-232 et sec.) of Title 56 of the Code of Virginia shall provide such schedule for the test year and previous three years. Applicants filing a base rate review application pursuant to § 56-585.1 of the Code of Virginia shall indicate whether each major storm is considered a severe weather event pursuant to § 56-585.1 A 8 of the Code of Virginia.

Schedule 33 - Generating Unit Performance

Instructions: This schedule applies to applicants subject to § 56-585.1 of the Code of Virginia. Provide a detailed schedule of each generating unit outage or derate identifying whether the outage or derate was planned, due to maintenance, or forced; start and end dates; cause; and cost. Additionally, provide the heat rate, equivalent availability factor, equivalent forced outage rate, and net capacity factor for each unit.

Schedule 34 - Miscellaneous Expenses

Instructions: Provide a description of amounts paid and USOA accounts charged for each charitable and educational donation, each payment to associated industry organizations, and all other miscellaneous general expenses. Individual items aggregating to less than 5.0% of the total miscellaneous expense may be reflected in an "Other" line item. Advertising expenses included in Schedule 31 should be excluded from this schedule.

Schedule 35 - Affiliate Services

Instructions: For purposes of this schedule affiliate services shall be defined to include those services between regulated and nonregulated divisions of an incumbent utility. If any portion of the required information has been filed with the commission as part of an applicant's Annual Report of Affiliate Transactions, the applicant may reference such report clearly identifying what portions of the required information are included in the Annual Report of Affiliate Transactions.

Provide a narrative description of each affiliated service received or provided during the test period.

Provide a summary of affiliate transactions detailing costs by type of service provided (e.g., accounting, auditing, legal and regulatory, human resources, etc.) for each month of the test period. Show the final USOA account distribution of all costs billed to or by the regulated entity by month for the test period, as it is recorded on the regulated entity's books.

Identify all amounts billed to an affiliate and then billed back to the regulated entity.

Cost records and market analyses supporting all affiliated charges billed to or by the regulated entity/division shall be maintained and made readily available for commission staff review. This shall include supporting detail of costs (including the return component) incurred by the affiliated interest rendering the service and the allocation methodology. In situations when the pricing is required to be the higher (lower) of cost or market and market is unavailable, note each such transaction and have data supporting such a finding available for commission staff review.

If affiliate charges are booked per a pricing mechanism other than that approved by the commission, the regulated entity shall provide a reconciliation of books to commission-approved pricing, including an explanation of why the commission-approved pricing is not used for booking purposes.

Schedule 36 - Income Taxes

Instructions: Provide a schedule detailing the computation of test period current state and federal income taxes on a total company and Virginia jurisdictional basis. Such schedule should provide a complete reconciliation between book and taxable income showing all individual differences. Additionally, provide a schedule detailing the computation of fully adjusted, current state and federal income taxes applicable to the Virginia jurisdiction.

Provide a schedule detailing the individual items of deferred state and federal income tax expense for the test period on a total company and Virginia jurisdictional basis. Separately quantify excess deferred income taxes amortization on both a total company and Virginia jurisdictional basis. Also, differentiate between protected (subject to Internal Revenue Service normalization rules) and unprotected amortization and state the amortization method and period applicable to each. Additionally, provide a schedule detailing the computation of fully adjusted, deferred state and federal income tax applicable to the Virginia jurisdiction.

Provide a detailed reconciliation between the statutory and effective income tax rates for the test period on both a total company and Virginia jurisdictional basis. Schedule should quantify individual reconciling items by dollar amount and percentage. Individual items should include permanent differences (itemize), flow-through depreciation, excess deferred FIT amortization, and deferred Investment Tax Credit amortization.

Provide a detailed listing of individual accumulated deferred income tax and accumulated deferred Investment Tax Credit amounts as of the end of test period. Separately identify those items affecting the computation of rate base on both a total company and Virginia jurisdictional basis. Additionally, provide a detailed listing of individual accumulated deferred income tax and accumulated deferred Investment Tax Credit amounts for the earnings test rate base (if applicable), the end of test period rate base, and the fully-adjusted rate base on a Virginia jurisdictional basis.

Provide a detailed reconciliation between the federal and state current tax expense on a stand-alone basis and the actual per book federal and state current tax expense for the test period on a total company and Virginia jurisdictional basis.

Provide a schedule depicting by month all federal and state income tax payments made during the test year. For each payment identify the recipient.

Provide a detailed reconciliation between deferred federal and state income expense computed on a stand-alone basis and the actual per book deferred federal and state income tax expense on a total company and Virginia jurisdictional basis.

Provide a detailed reconciliation between individual accumulated deferred federal and state income tax assets and liabilities computed on a stand-alone basis and the actual per book accumulated deferred income tax amounts as of the end of the test period on a total company and Virginia jurisdictional basis. Additionally, provide a detailed listing of individual accumulated deferred income tax assets and liabilities computed on a stand-alone basis for the earnings test rate base (if applicable), the end of test period rate base, and the fully-adjusted rate base on a Virginia jurisdictional basis.

Provide a detailed reconciliation between individual accumulated deferred federal and state income tax assets and liabilities computed on a stand-alone basis and the actual per book accumulated deferred income tax amounts as of the end of the test period on a total company and Virginia jurisdictional basis. Additionally, provide a detailed listing of individual accumulated deferred income tax assets and liabilities computed on a stand-alone basis for the earnings test rate base (if applicable), the end of test period rate base, and the fully-adjusted rate base on a Virginia jurisdictional basis.

Schedule 37 - Organization

Instructions: Provide an organizational chart of the applicant and its parent company detailing subsidiaries and divisions. Provide details of any material corporate reorganizations since the applicant's last rate case. Explain the reasons for and any ratemaking impact of each such reorganization.

Schedule 38 - Changes in Accounting Procedures

Instructions: Detail any material changes in accounting procedures adopted by either the parent/service company or the utility since the applicant's last rate case. Explain any ratemaking impact of such changes.

Identify any write-offs or write-downs associated with assets (i.e., plant, tax accounts, etc.) that have been retained, transferred, or sold.

Schedule 39 - Out-of-Period Book Entries

Instructions: Provide a summary schedule prepared from an analysis of journal entries showing "out-of-period" items booked during the test period. Show the amount, USOA account, and explanation of each charge.

Schedule 40 - Jurisdictional and Class Cost of Service Study

Instructions: Use the format of Form Schedule 40.

Investor-owned electric utilities subject to § 56-585.1 of the Code of Virginia shall provide functionally separate schedules for generation, transmission, and distribution information for subsections a, b, and c of these instructions as well as bundled information. Each functional schedule shall provide separate columns, as applicable, for each rate adjustment clause approved by the commission under § 56-585.1 A 4, A 5, or A 6 of the Code of Virginia.

a. Provide detailed calculations for all jurisdictional allocations for each revenue, expense and rate base USOA account used to create Schedules 9 and 10. Allocations should be based on test period average data. Show the allocation basis for each primary USOA account and for any amount included therein with a unique allocation basis. Explain the methodology used and why such method is proposed. Discuss all changes in the applicant's operations that have materially changed any allocation factor as well as any significant changes in allocation methodology since the last rate case. For any change in allocation methodology used in the current rate case that has a material effect on the current test period cost of service study, provide Schedule 40a using both the new methodology used in the current rate case and the old methodology used in the last rate case.

b. Provide detailed calculations for all jurisdictional allocations for each revenue, expense and rate base USOA account used to create Schedules 19 and 22. Show the allocation basis for each primary USOA account and for any amount included therein with a unique allocation basis. Explain the methodology used and why such method is proposed. Discuss all changes in the applicant's operations that have materially changed any allocation factor as well as any significant changes in allocation methodology since the last rate case. Provide the calculations supporting the applicant's line loss percentages. Additionally, clearly show the derivation of the transmission cost components allocated to Virginia. For any change in allocation methodology used in the current rate case that has a material effect on the current test period cost of service study, provide Schedule 40b using both the new methodology used in the current rate case and the old methodology used in the last rate case.

c. Provide a class cost of service study showing the allocation basis for each primary USOA account and for any amount included therein with a unique allocation basis. Explain the methodology used and why such method is proposed. Class transmission allocations shall reflect the Virginia retail information that has been converted from the Federal Energy Regulatory Commission approved wholesale information. Provide a detailed calculation and explanation showing how the Federal Energy Regulatory Commission wholesale transmission information is converted to Virginia retail information. Discuss all changes in the applicant's operations that have materially changed any allocation factor as well as any significant changes in allocation methodology since the last rate case. For any change in allocation methodology used in the current rate case that has a material effect on the current test period cost of service study, provide Schedule 40c using both the new methodology used in the current rate case and the old methodology used in the last rate case.

Schedule 41 - Proposed Rates and Tariffs

Instructions: Provide a summary of the rates designed to effect the proposed revenue increase. Provide a redline copy of all tariff pages that the applicant proposes to revise in this proceeding.

Schedule 42 - Present and Proposed Revenues

Instructions:

a. Provide the detailed calculations supporting total per books revenues in Column (3) of Schedule 21. The present revenues from each of the applicant's services shall be determined by multiplying the current rates times the test period billing units (by rate block, if applicable).

b. Provide a detailed calculation supporting total adjusted revenues in Column (5) of Schedule 21. The proposed revenues from each of applicant's services shall be determined by multiplying the proposed rates by the adjusted billing units (by rate block, if applicable). Detail by rate schedule all miscellaneous charges and other revenues, if applicable. Reconcile per books billing units to adjusted billing units itemizing changes such as customer growth, weather, and miscellaneous revenues. The revenue changes for applicant's services should be subtotaled into the applicant's traditional categories.

Schedule 43 - Sample Billing

Instructions: Investor-owned electric utilities shall provide a sample billing analysis detailing the effect on each rate schedule at representative levels of consumption.

Schedule 44 - Rate Adjustment Clauses Pursuant to § 56-585.1 A 4, A 5, or A 6 of the Code of Virginia

Instructions: Use the format of Form Schedule 44.

Utilities not subject to § 56-585.1 of the Code of Virginia may omit Schedule 44.

Provide a schedule that identifies each commission-approved rate adjustment clause and each individual prospective rate adjustment clause for which amounts have been removed from generation and distribution base rate cost of service in Columns (2), (3), and (4) of Schedules 10, 13, 20, and 23 in separate columns. Schedule 44 shall reflect combined generation and distribution operations. Additionally, such utilities shall file Schedule 44A, reflecting rate adjustment clauses and prospective rate adjustment clauses for generation only operations, and Schedule 44B reflecting rate adjustment clauses and prospective rate adjustment clauses for distribution only operations, using the same format as Schedule 44.

Provide a narrative description for each individual prospective rate adjustment clause for which amounts have been removed from base rate cost of service in Column (4) of Schedules 10, 13, 20, and 23.

Provide support by general ledger account for each amount shown in Schedule 44 electronically to the Division of Utility Accounting and Finance within five business days of the application filing date in an electronic spreadsheet with all underlying formulas and assumptions.

Schedule 45 - Return on Equity Peer Group Benchmark

Investor-owned electric utilities subject to § 56-585.1 of the Code of Virginia shall provide all documentation supporting the reported and authorized return on equity benchmark proposed pursuant to § 56-585.1 A 2 a and A 2 b of the Code of Virginia. Such documentation shall include a complete list of all potential peer group utilities with corresponding authorized returns set by applicable regulatory commissions, applicable regulatory commission documents, reported returns calculated for each of the three years within the requisite three-year period, Securities and Exchange Commission documents in which such peer group returns are reported for the three-year period, a detailed explanation of why utilities were excluded from the peer group, and a spreadsheet showing how such returns were calculated.

Schedule 46 - Rate Adjustment Clauses and Prudency Determinations Pursuant to Chapter 23 (§ 56-576 et seq.) of the Code of Virginia

a. Instructions for transmission rate adjustment clause applications. For any rate adjustment clause pursuant to § 56-585.1 A 4 of the Code of Virginia, the applicant shall provide the following information:

1. A schedule of all projected and actual costs, by type of cost and year.

2. Within five business days of the application filing date, the applicant shall provide transaction-level details to facilitate the sampling and audit of such actual costs electronically to the Division of Utility Accounting and Finance in an electronic spreadsheet with all underlying formulas and assumptions. Provide the information for the period covered by the most recently completed true-up of the Federal Energy Regulatory Commission wholesale transmission formula rate as of the application filing date.

3. The annual revenue requirement over the duration of the proposed rate adjustment clause by year and by class on a total company and Virginia jurisdictional basis, including all supporting calculations and assumptions.

4. Detailed information relative to the applicant's methodology for allocating the revenue requirement among rate classes and the design of class rates.

5. The docket or case number and Federal Energy Regulatory Commission ruling approving the wholesale transmission formula, rate, or cost for which the applicant is seeking recovery approval. In lieu of providing copies of such rulings, the applicant may provide a link to where such information can be found on the Internet.

b. Instructions for initial rate adjustment clause applications:

1. The applicant shall provide the following information for any initial proposed rate adjustment clause application pursuant to § 56-585.1 A 5 or A 6 of the Code of Virginia:

i. A schedule of all projected and actual costs by type of cost and year, and by month to the extent available. The applicant shall provide such information by project if applicable for the specific rate adjustment clause.

ii. Within five business days of the application filing date, the applicant shall provide transaction-level details to facilitate the sampling and audit of actual costs electronically to the Division to Utility Accounting and Finance in an electronic spreadsheet with all underlying formulas and assumptions. The applicant shall provide the information based on most current actual costs available to-date.

iii. A detailed explanation of the justification for the proposed costs.

iv. Key documents supporting the projected and actual costs that the applicant seeks to recover through the rate adjustment clause, such as economic analyses, contracts, studies, investigations, results from requests for proposals, cost benefit analyses, or other items supporting the costs.

v. Key materials used by senior management in approving or recommending the proposed costs as determined by the applicant.

vi. The annual revenue requirement over the duration of the proposed rate adjustment clause by year and by class on a total company and Virginia jurisdictional basis, including all supporting calculations and assumptions. The applicant shall provide such information by project if applicable for the specific rate adjustment clause.

vii. Detailed information relative to the applicant's methodology for allocating the revenue requirement among rate classes and the design of class rates.

2. The applicant shall provide the following additional information for any initial proposed rate adjustment for new generating facilities pursuant to § 56-585.1 A 6 of the Code of Virginia:

i. Information relative to the need or justification for the proposed generating unit.

ii. Feasibility and engineering studies that support the specific plant type and site selected.

iii. To the extent the generating unit requires fuel, fuel supply studies that demonstrate the availability and adequacy of the selected fuels.

iv. Support for planning assumptions regarding plant performance and operating costs, including historical information for similar units.

v. Economic studies that compare the selected alternative with other options considered, including sensitivity analyses and production costing simulations of the applicant's overall generating resources that demonstrate that the selected option is the best alternative.

vi. Detailed cost estimates for the facility, including projected costs of construction, transmission interconnections, fuel supply related infrastructure improvements and project financing.

c. Instructions for rate adjustment clause updates:

1. The applicant shall provide the following information for any update to a rate adjustment clause approved by the commission pursuant to § 56-585.1 A 5 or A 6 of the Code of Virginia:

i. An updated schedule of all projected and actual costs by type of cost and year and by month to the extent available. The applicant shall provide such information by project if applicable for the specific rate adjustment clause.

ii. Within five business days of the application filing date, the applicant shall provide transaction-level details to facilitate the sampling and audit of such actual costs electronically to the Division to Utility Accounting and Finance in an electronic spreadsheet with all underlying formulas and assumptions. If the rate adjustment clause update includes a true-up, provide such information for costs incurred during the true-up period. If the rate adjustment clause does not include a true-up, provide the information based on most current actual costs available to-date.

iii. Key documents supporting the projected and actual costs recovered through the rate adjustment clause, such as: economic analyses, support used by senior management for major cost decisions as determined by the applicant, contracts, studies, investigations, results from requests for proposals, cost-benefit analyses, and other items supporting the costs that have not been provided in previous applications.

iv. The annual revenue requirement over the duration of the proposed rate adjustment clause by year and by class on a total company and Virginia jurisdictional basis, including all supporting calculations and assumptions. The applicant shall provide such information by project if applicable for the specific rate adjustment clause.

v. Detailed information relative to the applicant's methodology for allocating the revenue requirement among rate classes and the design of class rates.

2. The applicant shall provide the following additional information for an update to a rate adjustment clause approved by the Commission for energy efficiency programs pursuant to § 56-585.1 A 5 of the Code of Virginia:

i. Evidence of the actual energy and demand savings achieved as a result of each specific program for which cost recovery is sought, along with revised cost-benefit tests that incorporate actual utility-specific energy and demand savings and cost data.

ii. A description of the significant accounting procedures and internal controls in place for each energy efficiency program that is administered by either a third-party or by the applicant, including: (i) a description of the internal controls and procedures for rebate, incentive, and vendor payments for each newly approved energy efficiency program; (ii) a discussion of any changes in internal controls and procedures since the previous filing for existing energy efficiency programs; and (iii) support for how the applicant is ensuring that internal controls and procedures for all energy efficiency programs are functioning correctly.

d. Instructions for prudency determination filings:

1. The applicant shall provide the following information for any prudency determination filing pursuant to § 56-585.1 of the Code of Virginia:

i. A detailed explanation of the justification for the proposed costs.

ii. Key documents supporting the projected and actual costs of the project for which the applicant seeks a prudency determination, such as economic analyses, support used by senior management for major cost decisions as determined by the applicant, contracts, studies, investigations, results from requests for proposals, cost-benefit analyses, and other items supporting the costs.

2. The applicant shall provide the following additional information for any prudency determination filing for a plan for electric distribution grid transformation projects pursuant to § 56-585.1 A 6 of the Code of Virginia:

i. A schedule of all projected and actual costs by type of cost and year, and by month to the extent available. The applicant shall provide such information by project if applicable for the specific prudency determination filing.

ii. The estimated annual revenue requirement over the duration of the proposed project by year on a total company basis, including all supporting calculations and assumptions. The applicant shall provide such information by project if applicable for the specific prudency determination filing.

3. The applicant shall provide the following additional information for any prudency determination filing for the construction of new generating facilities pursuant to § 56-585.1:4 of the Code of Virginia:

i. A schedule of all projected and actual costs by type of cost and year, and by month to the extent available. The applicant shall provide such information by project if applicable for the specific prudency determination filing.

ii. The estimated annual revenue requirement over the duration of the proposed project by year on a total company basis, including all supporting calculations and assumptions. The applicant shall provide such information by project if applicable for the specific prudency determination filing.

iii. The information required by subdivision b 2 of these instructions.

4. The applicant shall provide the following additional information for any prudency determination filing for the purchase of the energy, capacity, and environmental attributes of new generating facilities pursuant to § 56-585.1:4 of the Code of Virginia:

i. A copy of the power purchase agreement.

ii. Information relative to the need for the energy, capacity, and environmental attributes of such new generating facilities.

iii. Economic studies that compare the selected alternative with other options considered, including sensitivity analyses and production costing simulations of the applicant's overall generating resources that demonstrate that the selected option is the best alternative.

Schedule 47 - Total Aggregated Revenues and Consumer Price Index

Investor-owned electric utilities subject to § 56-585.1 of the Code of Virginia shall file the following:

a. A detailed schedule showing the calculation of total aggregate regulated rates as defined in § 56-585.1 A 9 of the Code of Virginia for each year beginning with calendar year 2010.

b. A schedule of annual increases in the United States Average Consumer Price Index as described in § 56-585.1 A 9 of the Code of Virginia beginning with calendar year 2010. Additionally, include the annual compounded amount.

Schedule 48 - § 56-585.1 A 8 of the Code of Virginia costs and credits

a. Instructions for per books costs pursuant to § 56-585.1 A 8 of the Code of Virginia: Applicant shall provide a supporting schedule quantifying each cost that is reflected in Schedule 11, Column (1) as it was recorded per books by the utility for financial reporting purposes pursuant to § 56-585.1 A 8 of the Code of Virginia.

Applicant shall provide cost details by month for each individual cost item supporting amounts in Schedule 48a, as well as a narrative description of, and any internal accounting memoranda and guidance from external auditors to support, the accounting for each cost item reflected in Schedule 11, Column (1) as it was recorded per books by the utility for financial reporting purposes pursuant to § 56-585.1 A 8 of the Code of Virginia electronically to the Division of Utility Accounting and Finance within five business days of the application filing date.

b. Instructions for costs eligible for customer credit reinvestment offset: Applicant shall provide a schedule quantifying all capital investments eligible for use as a customer credit reinvestment offset, by project, as of the end of the final 12-month test period on a Virginia jurisdictional basis. Such schedule should include the plant-in-service and accumulated depreciation balances associated with each project.

Applicant shall identify where each capital project eligible for customer credit reinvestment offset is reflected in cost of service as of the end of the final 12-month test period.

Applicant shall provide cost details, by month, for each project included in Schedule 48b for all test periods electronically to the Division of Utility Accounting and Finance within five business days of the application filing date. Additionally, applicant shall provide support for the Virginia jurisdictional allocation of each project electronically to the Division of Utility Accounting and Finance within five business days of the application filing date.

c. Instructions for customer credits and customer credit reinvestment offsets: Applicant shall provide a schedule calculating any credits due to customers using the calculation prescribed by § 56-585.1 A 8 of the Code of Virginia.

If the applicant proposes to use the customer credit reinvestment offset to offset any portion of credits due to customers, applicant shall provide a schedule quantifying the capital investments it proposes to use as a customer credit reinvestment offset.

Schedule 49 - Additional Schedules

Reserved for additional exhibits presented by the applicant to be labeled Schedule 49 et seq.