Administrative Code

Virginia Administrative Code
Title 20. Public Utilities and Telecommunications
Agency 5. State Corporation Commission
1/23/2020

Chapter 200. Utility Accounting and Finance

20VAC5-200-10. Adoption of revised uniform system of accounts for gas utilities.

At the National Association of Regulatory and Utilities Commissioners' (NARUC) convention held in Phoenix, Arizona, on November 17-20, 1958, resolutions were adopted recommending to the commissions represented by membership in the Association the adoption of revised Uniform Systems of Accounts for Gas Utilities. This system of accounts was published and adopted by a number of state commissions, including this Commission.

Although there have been numerous changes in accounting principles and practices and although the Federal Power Commission has adopted numerous amendments to the systems of accounts that it prescribes for gas utilities, there have been no amendments to the NARUC system since it was issued in 1958.

Realizing the need to bring the NARUC system up-to-date, the NARUC Accounting Committee undertook a complete review of the presently recommended system of accounts. The review of the system of accounts has been completed by the Association's Committee on Accounts and Statistics, and the Committee's recommended revisions have resulted in adoption and recommendation of a new, revised system of accounts by the NARUC.

Also, this Commission is aware that the Federal Power Commission, by order No. 490 issued on August 22, 1973, has eliminated Account No. 271 - Contributions In Aid of Construction - and prescribed disposition of the balance in such account and the treatment of future contributions in aid of construction. This change was not included in the NARUC recommended revised system of accounts.

NOW, UPON CONSIDERATION, the Commission is of the opinion and finds:

1. That the system of accounts for gas utilities prescribed by this Commission should be revised to conform with the recommended revisions of the NARUC except in regard to Account No. 271. The Commission's prescribed treatment of contributions in aid of construction should be substantially the same as that of the Federal Power Commission;

2. That, however, the gas utilities under the jurisdiction of the Commission should continue to maintain the amounts of contributions in aid of construction on a memorandum basis for tax and other related purposes where such detail is needed;

3. That implementation of the revised system of accounts for gas utilities should become effective January 1, 1974, and the gas utilities should implement a memorandum record of contributions in aid of construction at that time; accordingly

IT IS ORDERED:

1. That the uniform system of accounts for gas utilities prescribed by the Commission, effective January 1, 1961, be discontinued and cancelled as of January 1, 1974;

2. That every gas utility company operating in this Commonwealth shall institute and place into effect a system of accounts in accordance with the rules and regulations set forth in the Uniform System of Accounts for Gas Utilities, Classes A and B, C or D as applicable to it, prepared by the Committee on Accounts and Statistics of the National Association of Regulatory and Utilities Commissioners and filed with this order marked respectively as "Uniform System of Accounts For Class A and B Gas Utilities," "Uniform System of Accounts For Class C Gas Utilities," and Uniform System of Accounts For Class D Gas Utilities," such system of accounts to become effective, except for Account No. 271 - Contributions in Aid of Construction;

3. That the Acting Chief Accountant to the Commission shall cause to be prepared a written directive setting forth treatment for contributions in aid of construction in substantial compliance with the ordering provisions of Federal Power Commission Order No. 490 and upon approval of such directive by the Commission, the same shall be forwarded to each gas utility and shall replace and supersede all prescribed treatment in the NARUC recommended system of accounts in conflict therewith; and, that the Acting Chief Accountant shall cause to be prepared as an addendum to the written directive, an instruction for the approval of the Commission, prescribing the memorandum record which shall be maintained for contributions in aid of construction for tax and other administrative purposes;

4. That effective January 1, 1974, every gas utility operating in this Commonwealth shall commence to keep its books and records in accordance with the system of accounts and the written directive for contributions in aid of construction filed herein;

5. That an attested copy of this order, together with, or as soon hereafter as available, the revised system of accounts and written directive and addendum of the Acting Chief Accountant, shall be sent to each gas utility operating in this Commonwealth.

Statutory Authority

§§ 56-36, 56-249 and 56-249.2 of the Code of Virginia.

Historical Notes

Derived from Administrative order, eff. December 27, 1973.

20VAC5-200-20. [Repealed]

Historical Notes

Derived from Case No. PUE840052, eff. April 11, 1985; repealed, Virginia Register Volume 12, Issue 14, eff. March 15, 1996.

20VAC5-200-21. Streamlined rate proceedings and general rate proceedings for electric cooperatives subject to the State Corporation Commission's rate jurisdiction.

A. Nothing in this section shall be interpreted to apply to applications for temporary reductions of rates pursuant to § 56-242 of the Code of Virginia.

B. All streamlined or general rate applications for jurisdictional electric distribution cooperatives ("cooperatives" or "applicants") shall be subject to the following requirements:

1. Pursuant to § 56-235.4 of the Code of Virginia and the exceptions stated therein, the regulated operating revenues of a cooperative shall not be increased more than once within any 12-month period. However, streamlined rate relief may become effective in less than 12 months after a preceding increase provided that regulated base operating revenues are not increased more than once in any calendar year.

2. An applicant may select any test period it wishes to use to support its application.

3. Any increase in revenues under this section shall be allocated in accordance with a properly designed cost of service study.

4. A cooperative which has outstanding wholesale power cost riders which reflect permanent changes in power costs approved by a regulatory agency shall adjust its base rates to reflect such changes at the same time it increases its rates in a rate application.

5. a. Except as otherwise provided herein, all applications for rate relief shall be filed in the original and 15 copies with the Clerk of the State Corporation Commission, c/o Document Control Center, P.O. Box 2118, Richmond, Virginia 23218.

b. Where a filing contains information that the applicant claims to be confidential, the filing may be made under seal provided it is accompanied by both a motion for protective order or other confidential treatment and an additional five copies of a redacted version of the filing to be available for public disclosure. Unredacted filings containing the confidential information shall, however, be immediately available to the commission staff for internal use at the commission.

Filings containing confidential (or redacted) information shall be so stated on the cover of the filing, and the precise portions of the filing containing such confidential (or redacted) information, including supporting material, shall be clearly marked within the filing.

6. An electric cooperative intending to file a rate application shall notify the State Corporation Commission ("commission") and all parties of record appearing in the cooperative's last rate case at least 60 days in advance of the filing of the application. Also, public notice of the intent to file a rate application shall be provided 60 days in advance of the filing of said application to all of the cooperative's customers, using any of the methods of publication set out in subdivision C 12 of this section.

7. The commission retains the right to waive any or all parts of this section for good cause shown.

8. An application shall not be deemed filed under § 56-238 of the Code of Virginia unless it is in full compliance with this section.

C. An applicant may file a complete application for streamlined rate relief provided the following limitations are met:

1. The increase in total operating revenues as calculated in column (5) of Schedule 3 of Appendix A, included herein, is not more than the test period increase in the Consumer Price Index ("CPI"), or 5.0%, whichever is less. The CPI shall be defined as the Consumer Price Index for all Urban Consumers (CPI-U) for all items, as estimated by the U.S. Department of Labor, Bureau of Labor Statistics, and published in its Summary Data from the Consumer Price Index News Release, or its successor. As calculated in this publication, the percentage change in the CPI-U for a test year will be the index for the last month of the test year divided by the index for the same month one year prior, minus one, multiplied by 100; and

2. Earnings after the proposed increase must not produce financial ratios which exceed the level approved by the commission in the applicant's most recent general rate case.

Subject to the provisions set forth below, a cooperative which files an application for streamlined rate relief may petition the commission requesting that its rates be made permanent no less than 30 days from the date the application is deemed complete and filed with the commission if there are insufficient customer objections to the application or if the commission does not suspend the proposed increase and convene a hearing.

3. A cooperative filing a rate application under the streamlined rate procedure shall not:

a. Increase rates by more than the increase in the test period CPI or 5.0% (whichever is less) of adjusted Virginia jurisdictional operating revenues;

b. Request earnings, after the proposed increase, which produce financial ratios that exceed those approved by the commission in the applicant's most recent general rate case;

c. Propose revisions to its terms and conditions of service; or

d. Propose revisions to its rate structure as part of its application.

4. The commission may, on its own motion, suspend a cooperative's proposed rate increase and tariff revisions pursuant to § 56-238 of the Code of Virginia and may convene a hearing on the cooperative's streamlined application.

5. The commission may suspend a cooperative's proposed tariff revisions and increase in rates and shall schedule a hearing thereon if the lesser of 150 or 5.0% of the customers or other persons within a class and subject to a change in a rate, toll, or charge object to the proposed revision or increase in a rate or if the lesser of 150 or 5.0% of the customers or consumers or other persons subject to such rate, toll or charge of a cooperative object to the proposed rate or tariff revision.

6. The commission may, in its discretion, suspend an electric cooperative's rate increase and proposed tariff revisions in a streamlined rate proceeding on the motion of its own staff, on the motion of the Virginia Attorney General's Division of Consumer Counsel, or on the motion of any person subject to such change who requests a hearing and states a substantive reason why a hearing is necessary.

7. The requested rate increase for streamlined rate relief shall be supported by a fully adjusted financial status statement (Schedule 3 of Appendix A included herein).

8. Adjustments to test year cost of service shall be limited to the amount of increase or decrease that will be in effect during the rate year.

9. A cooperative shall not file more than three consecutive applications for streamlined rate relief; nor shall there lapse more than five years since the later of the date of the final order or the effective date of rates specified in the final order in the applicant's last general rate case when filing an application for streamlined rate relief.

10. An application filed under the streamlined rate procedure shall include:

a. The name and post office address of the applicant and the name and post office address of counsel of record, if any.

b. A brief narrative statement describing the change in rates and tariff revisions and explaining the need for a change in rates and tariff revisions. This statement shall include a description of the actions taken by the cooperative to advise its membership of the change in rates and contents of its application.

c. A copy of the resolution calling for a change in rates adopted by the Board of Directors of the cooperative.

d. A copy of the completed notice given to the public by the cooperative, including a description of the method of publication used.

e. Schedules 1 through 9 of Appendix A included herein.

11. Public notice of the increase and tariff revisions shall be completed 30 days in advance of the date the cooperative files its application for revised rates with the commission. Actual proof of public notice shall be furnished to the commission as part of the rate application.

12. The public notice of the increase and tariff revisions in an application for streamlined rate relief may be given by:

a. Direct mailing to each customer;

b. Publication in Cooperative Living magazine, or the cooperative's member publication;

c. Newspapers of general circulation in the area served;

d. Any combination of these methods; or

e. Any other method of publication authorized by the commission.

13. A copy of the notice shall be served on the Commonwealth's Attorney and Chairman of the Board of Supervisors of each county (or equivalent officials in the counties having alternative forms of government) in the state in which the cooperative offers service, and on the mayor or manager and the attorney of every city and town (or equivalent officials in towns and cities having alternative forms of government) in the state in which the cooperative offers service and upon the Division of Consumer Counsel, Office of the Attorney General. Service shall be made by either personal delivery or first class mail, postage prepaid, to the customary place of business of the person served or to his residence.

14. The public notice shall, at a minimum, include the following information:

a. The amount of the total increase in revenues, both in percentages and dollar amounts;

b. The percentage increase being applied to each of the cooperative's rate schedules;

c. The identity of all wholesale power cost riders to be rolled-in to base rates;

d. The locations where copies of the information required to be filed with the commission can be reviewed;

e. The date the application will be delivered to the commission;

f. A notice that any person subject to the change or changes proposed by the cooperative has the right to request a hearing within 30 days of the application's delivery to the commission;

g. A notification that requests for hearing should be directed to the Clerk of the Commission, c/o Document Control Center, P.O. Box 2118, Richmond, Virginia 23218;

h. A statement advising that the commission may convene a hearing, and if a hearing is held, the commission may order rate relief, redesign rates or adopt tariff revisions which differ from those appearing in the cooperative's application;

i. A statement advising the public that if the lesser of 150 or 5.0% of the customers or other persons within a class and subject to a change in a rate, toll, or charge do not request a hearing, and if the lesser of 150 or 5.0% of the customers or consumers or other persons subject to such rate, toll or charge of the cooperative do not object to a rate change or tariff revision, the cooperative may petition the commission to make rates permanent without hearing within 30 days after the application is filed with the commission; and

j. A statement advising the public of the cooperative's proposed effective date for its new rates.

15. If the commission determines that a hearing on the application for streamlined rate relief is required, then the commission shall issue a procedural order which, among other things, shall specify the date by which the cooperative shall file with the Clerk of the Commission an original and 15 copies of any direct testimony the cooperative intends to rely on in support of its application, together with the remaining schedules set forth in Appendix A. That order shall specify such additional notice of the hearing to the electric cooperative's members that the commission deems appropriate.

D. 1. A cooperative seeking (i) an increase that produces financial ratios in excess of those allowed in the applicant's most recent general rate case; (ii) an increase in jurisdictional adjusted operating revenues of more than the test period increase in the CPI (as defined in subdivision 1 of subsection C of this section); (iii) revision of its terms and conditions of service; or (iv) to redesign or restructure its rates shall file an original and 15 copies of a general rate application with the Clerk of the State Corporation Commission, c/o Document Control Center, P.O. Box 2118, Richmond, Virginia 23218.

2. An application seeking a general rate increase shall include:

a. The name and post office address of the applicant and the name and post office address of counsel of record, if any.

b. A brief narrative statement describing the change in rates and tariff revisions and explaining the need for a change in rates and tariff revisions. This statement shall include a description of the actions taken by the cooperative to advise its membership of the change in rates and contents of the rate application.

c. A copy of the resolution calling for a change in rates adopted by the cooperative's Board of Directors.

d. All direct testimony which the cooperative intends to rely on in support of its rate application.

e. Exhibits consisting of the Schedules 1 through 14, found in Appendix A included herein. Such schedules shall be identified with the appropriate schedule number and shall be prepared in accordance with the instructions contained in Appendix A included herein and the following general instructions:

(1) Attach a table of contents to the cooperative's application, including exhibits.

(2) The applicant shall be expected to verify the accuracy of all data and calculations contained in and pertaining to every exhibit submitted, as well as support any adjustments, allocations or rate design upon which it relies.

(3) Each exhibit shall be labeled with the name of the applicant and the initials of the sponsoring witness in the upper right hand corner as shown below:

Exhibit No. (Leave Blank)

Witness: (Initials)

Statement or Schedule Number

The first page of all exhibits shall contain a caption which describes the subject matter of the exhibit.

(4) The required accounting and statistical data shall include three copies of all work papers and other information necessary to ensure that the items, statements and schedules found in the application are not misleading.

f. Exhibits consisting of additional schedules may be submitted with the cooperative's direct testimony. Such schedules shall be identified as Schedule 15 (this exhibit may include numerous subschedules labeled 15A et seq.) and shall conform to the general instructions contained in subdivision 2e of subsection D of this section.

g. The commission shall prescribe the general notice to be given to the public and the date by which such notice shall be completed in its procedural order.

h. The applicant shall serve a copy of the information required in subdivisions 2a through 2c of subsection D of this section upon the Commonwealth's Attorney and Chairman of the Board of Supervisors of each county or (equivalent officials in counties having alternative forms of government) in the state affected by the proposed increase and upon the mayor or manager and the attorney of every city and town (or equivalent officials in towns and cities having alternative forms of government) in the state affected by the proposed increase. The applicant shall also serve each such official with a statement that a copy of the complete application may be obtained by such official at no cost by making a request thereof orally or in writing to a specified company official or location. In addition, the applicant shall serve a copy of its complete application upon the Division of Consumer Counsel of the Office of the Attorney General in Virginia. All such service specified by this section shall be made either by (i) personal delivery or (ii) first class mail, to the customary place of business or to the residence of the person served.

E. Rate reductions and tariff revisions filed pursuant to § 56-40 of the Code of Virginia shall be filed with the commission's Division of Energy Regulation and shall include the following:

1. A descriptive statement of and justification for the tariff revision;

2. Load data if applicable;

3. A certified excerpt from the minutes of the cooperative's Board of Directors, wherein the Board approved the tariff revision;

4. Identification of all customers that may be eligible for the tariff revision;

5. A revenue impact study; and

6. An affidavit by the cooperative's manager that the proposed tariff revision affects no increase in rates.

F. This section does not limit the commission staff or parties other than the applicant from raising new issues not addressed by the applicant for commission consideration.

G. Requests for temporary increases in rates filed pursuant to § 56-245 of the Code of Virginia shall include Schedules 1, 2 and Columns (1) through (5) of Schedule 3.

H. Failure to comply with this section may result in dismissal of the application, or may subject the cooperative to such other actions as the commission deems appropriate, including, but not limited to, prohibiting a cooperative from filing an application for streamlined rate relief for a period of time specified by the commission.

APPENDIX A. SCHEDULES REQUIRED FOR A STREAMLINED OR GENERAL RATE APPLICATION

Schedule Number

Streamlined Rate Proceeding Schedules

1

Comparative Balance Sheets

2

Comparative Income Statements

3

Financial Status Statement

4A and B

Detail of Ratemaking Adjustments

5A and B

Proposed Rates and Tariffs and Revenue Allocation

6

Sample Billing

7

Class Cost of Service Study

8

Capital Structure

9

Affiliate Services

Schedule Number

General Rate Proceeding Schedules

1

Comparative Balance Sheets

2

Comparative Income Statements

3

Financial Status Statement

4A and B

Detail of Ratemaking Adjustments

5A and B

Proposed Rates and Tariffs and Revenue Allocation

6

Sample Billing

7

Class Cost of Service Study

8

Capital Structure

9

Affiliate Services

10

Net Original Cost Rate Base

11

Working Papers for Ratemaking Adjustments

12

Revenue and Expense Variance Analysis

13

Jurisdictional Allocation

14A, B, and C

Functional Unbundling

15

Reserved for Additional Exhibits

Schedule 1 — Comparative Balance Sheets

Instructions: Provide a publicly available comparative balance sheet for the test period and the corresponding 12-month period immediately preceding the test period for the applicant.

Schedule 2 — Comparative Income Statements

Instructions: Provide a publicly available comparative income statement covering the test period and 12-month period immediately preceding the test period for the applicant.

Schedule 3 — Financial Status Statement

Instructions: Use the format of the schedule identified as Schedule 3 in this Appendix.

Adjustments in Column (2) reflect any financial differences between Generally Accepted Accounting Principles (GAAP) and ratemaking accounting as prescribed by the State Corporation Commission. An example of such an adjustment would include, but would not be limited to, the reclassification of capital leases to operating leases. Each Column (2) adjustment shall be separately identified and shown using the format prescribed for Schedule 4A and 4B.

Column (4) shall reflect total nonjurisdictional operations. Jurisdictional allocation factors used to determine nonjurisdictional business in Column (4) amounts shall be fully supported and explained in Schedule 13 for general rate filings.

Each Column (6) adjustment shall be separately identified and shown in Schedule 4A and 4B. In a streamlined rate proceeding, adjustments reflected in Column (6) of Schedule 3 which do not incorporate ratemaking treatment approved by the commission in the utility's last general rate case shall be identified as new proposed adjustments in Schedule 4A and 4B.

Riders reflected on line 4 shall be separately listed to include a line for each rider in effect during the test year or projected for the rate year. The amount of other income and other expense shown in Column (5), lines 20 and 23, shall be the current amount recognized as jurisdictional in the applicant's last general rate case. Amounts reflected on line 33 shall be actual cash receipts.

Lines (29), (30), (31), and (32) shall be based on the following definitions:

Line 29.

TIER =

Total Margins (Line 24) + Interest on Long-Term Debt (Line 21)

Interest on Long-Term Debt (Line 21)

Line 30.

DSC =

Total Margins (Line 24) + Depreciation and Amortization Expense (Line 11) + Interest on Long-Term Debt (Line 21)

Total Principal Payments + Total Long-Term Interest Payments

Line 31.

Rate of Return on Rate Base =

Operating Margins Adj. (Line 18)

Total Rate Base (Line 28)

Line 32.

Rate of Return on Margins and Equities =

Total Margins (Line 24)

Total Margins and Equity Capitalization (Schedule 8)

Schedules 4A and 4B — Detail of Ratemaking Adjustments

Instructions: Use format of the schedule identified as Schedule 4A and 4B to this Appendix.

Each adjustment shall be numbered sequentially and listed under the appropriate description category (Base Rate Revenue, Fuel-WPCA Revenue, Purchased Power, etc.). The impact on cost of service from each adjustment shall be detailed in Columns (1) through (16).

Each ratemaking adjustment shall be fully explained in a supporting subschedule 4B to this schedule.

Detailed workpapers substantiating each adjustment shall be provided in Schedule 11 for general rate filings.

Schedule 5A and 5B — Proposed Rates and Tariffs, and Revenue Allocation by Class

Schedule 5A Instructions:

Provide a copy of each tariff sheet with the revisions the cooperative proposes to implement. For general rate applications, provide a copy of all tariffs and Terms and Conditions of Service Sheets proposed for revision containing the revised language.

Schedule 5B Instructions:

Provide a class revenue allocation analysis showing, by class, the present revenue recovered from each class, the proposed increase in revenue to be recovered from each class, the total proposed revenue to be recovered from each class, and the percentage of increase in total revenue to be recovered from each class.

Schedule 6 Sample Billing

Instructions: Provide a sample billing analysis showing the effect on customers of the proposed tariff changes at various levels of consumption, for all classes of service.

Schedule 7 — Class Cost of Service Study

Instructions:

A. Each streamlined rate application shall include a copy of the cost of service study used to determine the allocation of revenues to each class. The cost of service study shall be based on per books data which is no more than five years old. Each general filing shall include a copy of the cost of service study used to allocate the increase or to adjust rate design. The data used in a cost of service study submitted in a general rate case shall use the same test period as used in the cooperative's general rate application.

B. Each cost of service study shall consist of the following schedules:

1. For multi-state cooperatives, provide total system rate base, revenue and operation and maintenance expenses by account number, or major account group showing separation between Virginia and nonjurisdictional operations.

2. Provide a jurisdictional financial status statement in the format of Schedule 3, column (5) of Appendix A for each customer class and the return provided by these classes.

3. For all service schedules, present the unit cost per kilowatt, kilowatt hour, and customer resulting from the cost study. Include the kilowatt hours, demand, and number of customers, as well as the total cost for each component by class and the allocated rate base by class, as support for the unit costs derived.

4. If directed by the commission, the cooperative shall collect and maintain separate expense, rate base, and revenue data on nonjurisdictional consumers within Virginia.

5. For all service classes, provide a schedule of consumers by service class indicating the total number of customers in the class and the number of nonjurisdictional consumers in Virginia in the class.

Nonjurisdictional consumers in Virginia include government agencies: federal, state, local, and regional government authorities. If there are nonjurisdictional consumers in any class, this schedule must be accompanied by a list of all such nonjurisdictional consumers by service class and their usage characteristics.

6. Provide a short narrative describing the cost of service study methodology employed. This narrative shall include the following information:

(a) Identification and description of the classification used to assign rate base as demand, energy, or customer related. Specifically, include the classification methodology used to differentiate between demand and customer components of distribution plant; and the customer classification used in the study, i.e., minimum system, minimum size, zero intercept, etc.

(b) Identification of the allocation methodology used for assigning rate base, revenue, and expenses to customer classes. For demand allocation method, e.g., average and excess, noncoincident peak; customer allocation method, e.g., number of customers, weighted customers, etc.

(c) Provide a table showing the kilowatts, kilowatt hours, number of customers allocated to each class, including the derivation of the demand, energy, and customer allocators for each class.

7. Provide a list of classification and allocation factors used.

8. Provide a copy of the actual study by account or primary account. The primary accounts shall identify the secondary accounts included by account number. Indicate which allocators and classifiers were used to assign each account.

Schedule 8 — Capital Structure and Cost of Debt Statement and Supporting Schedules

Instructions: Use the format of the schedule identified as Schedule 8 in this Appendix.

Column (1) shall reflect the per books capital structure at the end of the test year. Data in Column (1) shall be compatible with the applicant's publicly available financial statements. Adjustments in Column (3) reflect any financial differences between Generally Accepted Accounting Principles and ratemaking accounting as prescribed by the commission. Each Column (3) adjustment shall be separately identified in a supporting schedule, if not already identified in Schedule 4A or 4B.

Schedules shall be provided to support the amounts and cost rates of short- and long-term debt in Columns (4) and (6), respectively, and the adjusted amounts and cost rates in Columns (8) and (10), respectively. Each issue of long-term debt shall be listed with its corresponding interest rate, date of issue, maturity, and lending institution(s) or other source(s). Short-term debt shall be listed with a high, low, ending, and average balance for each month, a weighted average interest rate for each month, and the name of the lending institution(s) or other source(s).

Schedule 9 — Affiliate Services

Instructions: For purposes of this schedule, affiliate services shall be defined to include those services between regulated and competitive 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 type of affiliated service received or provided during the test period.

Provide a summary of affiliate transactions detailing costs by function for each month of the test period. Show the final Uniform System of Account distribution of all costs billed to or by the regulated entity by month for the test period.

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 transactions 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 for ratemaking purposes, 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 10 — Net Original Cost Rate Base

Instructions: Use the format of the schedule identified as Schedule 10 in this Appendix.

Adjustments in Column (2) reflect any financial differences between GAAP and ratemaking accounting as prescribed by the State Corporation Commission. Each Column (2) adjustment shall be separately identified and reflected using the format prescribed for Schedule 4A and 4B.

Column (4) shall reflect total nonjurisdictional business. Allocation factors used to determine nonjurisdictional business in Column (4) shall be fully supported in Schedule 13.

Each Column (6) adjustment shall be separately identified and reflected in Schedule 4A and 4B. In a streamlined rate proceeding, adjustments reflected in Column (6) of Schedule 3 which do not incorporate the ratemaking treatment approved by the commission in the utility's last general rate case shall be separately identified as new proposed adjustments in Schedule 4A and 4B.

Schedule 11 — Working Papers for Ratemaking Adjustments

Instructions: Provide detailed workpapers and supporting schedules of all proposed adjustments. Each supporting document shall identify the origin of the data shown. Also, indicate whether data is actual or estimated. Working papers shall be numbered, indexed and tabbed for each adjustment. Two copies shall be filed with the Division of Utility Accounting and Finance, and one copy of the working papers shall be filed with the Division of Energy Regulation.

Schedule 12 — Revenue and Expense Variance Analysis

Instructions: The cooperative shall quantify jurisdictional operating revenues and system operating and maintenance ("O&M") expenses by primary account during the test period and the preceding 12 months. Also, provide jurisdictional sales volumes by customer class for the test period and the preceding 12 months.

The cooperative shall provide a detailed explanation of all jurisdictional revenue and system expense increases and 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 two-hundredths of 1.0% (.0002) of total O&M expenses for all cooperatives with total operating expenses exceeding $50 million, and five hundredths of 1.0% (.0005) of total operating expenses for cooperatives with total operating expenses below $50 million.

Schedule 13 — Jurisdictional Allocation

Instructions: Provide summary schedules by primary account reflecting all revenue, expense, and rate base items allocated to the Virginia jurisdiction. If directed by the commission, this schedule shall include allocations relating to nonjurisdictional Virginia consumers as well as out-of-state operations. Provide working papers to support all calculated amounts, including the development of allocation factors.

Provide a narrative explanation and justification of the allocation methodology used. Discuss any changes in the applicant's operations which materially affect any allocation factor.

Schedule 14A, 14B, and 14C - Functional Unbundling

Instructions: Use the format of the schedule identified as Schedule 14A, 14B, and 14C in this Appendix.

Provide cost of service studies that identify the costs associated with the functional areas of generation (production), transmission, distribution, and other.

Provide cost breakouts for subcomponents of functional areas such as primary and secondary distribution, metering, billing, and maintenance. Report cost functions and subcomponents on summary sheets by both system and class.

Schedule 15 - Reserved for Additional Exhibits

This schedule is reserved for additional exhibits presented by the applicant and shall be labeled 15A et seq.

Schedule 3

FINANCIAL STATUS STATEMENT PER BOOKS AND FULLY ADJUSTED
FOR THE 12-MONTHS ENDING __________, ___

(Col. 1)

(Col. 2)

(Col. 3)

(Col. 4)

(Col. 5)

(Col. 6)

(Col. 7)

(Col. 8)

(Col. 9)

Line No.

Description

Total Cooperative Per Books

Adjustments Due to Ratemaking Requirements

Total Cooperative As Adjusted

Non-Virginia Jurisdictional Business

Virginia Jurisdictional Business

Ratemaking Adjustments

Amounts After Adjustments

Revenue Requirement

Amounts After Revenue Requirement

Operating Revenues

1.

Base Rates

2.

Fuel - WPCA

3.

Roll in of Riders

4.

Riders (List Separately)

5.

Margin Stabilization

6.

Other Electric Revenues

7.

Total Operating Revenues

Operating Expenses

8.

Purchased Power Expense

9.

Margin Stabilization

10.

Other Operation and Maintenance Expense

11.

Depreciation and Amortization

12.

Tax Expense - Property

13.

Tax Expense - Other

14.

Total Operating Expenses

15.

Operating Margins

16.

Less: Interest on Customer Deposits

(Col. 1)

(Col. 2)

(Col. 3)

(Col. 4)

(Col. 5)

(Col. 6)

(Col. 7)

(Col. 8)

(Col. 9)

Line No.

Description

Total Cooperative Per Books

Adjustments Due to Ratemaking Requirements

Total Cooperative As Adjusted

Non-Virginia Jurisdictional Business

Virginia Jurisdictional Business

Ratemaking Adjustments

Amounts After Adjustments

Revenue Requirement

Amounts After Revenue Requirement

17.

Charitable and Educational Donations

18.

Operating Margins Adjusted

19.

Plus: Capital Credits Accrued

20.

Other Income

21.

Less: Interest on Long-Term Debt

22.

Other Interest Expense

23.

Other Expense

24.

Total Margins

Rate Base

25.

Net Utility Plant

26.

Allowance for Working Capital

27.

Other Rate Base Deductions

28.

Total Rate Base

29.

TIER

30.

DSC

31.

Rate of Return on Rate Base

32.

Rate of Return on Margins and Equities

33.

Capital Credits Received

SCHEDULE 4A
Page ___ of ___

DETAIL OF RATEMAKING ADJUSTMENTS

(Col. 1)

(Col. 2)

(Col. 3)

(Col. 4)

(Col. 5)

(Col. 6)

(Col. 7)

(Col. 8)

(Col. 9)

Adj. No.

Description

Operating Revenues

Purchased Power Expenses

Margin Stabil.

Other O&M Expense

Depr. & Amort.

Tax Expense

Other

Operating Margins Adjusted

Accrued Capital Credit

Base Rate Revenues

Fuel - WPCA Revenue

Rider Revenue

Margin Stabilization

Other Electric Revenues

Purchased Power Exp.

Margin Stabilization

Other O&M Expense

Depr. & Amort.

Tax Expense - Property

Tax Expense - Other

Other

Operating Margins Adjusted

Capital Credits Accrued

Other Income

Interest on Long-Term Debt

Other Interest Expense

Other Expense

Total Margins

Net Utility Plant

Allowance for Working Capital

Other Rate Base Deductions

Total Rate Base

(Col. 10)

(Col. 11)

(Col. 12)

(Col. 13)

(Col.14)

(Col. 15)

(Col. 16)

(Col. 17)

Adj. No.

Description

Other Income

Interest on Long-Term Debt

Other Exp. (Incl. Int. Exp.)

Total Margins

Net Utility Plant

Allowance for Working Capital

Other Rate Base Deductions

Total Rate Base

Base Rate Revenues

Fuel - WPCA Revenue

Rider Revenue

Margin Stabilization

Other Electric Revenues

Purchased Power Exp.

Margin Stabilization

Other O&M Expense

Depr. & Amort.

Tax Expense - Property

Tax Expense - Other

Other

Operating Margins Adjusted

Capital Credits Accrued

Other Income

Interest on Long-Term Debt

Other Interest Expense

Other Expense

Total Margins

Net Utility Plant

Allowance for Working Capital

Other Rate Base Deductions

Total Rate Base

Schedule 4B
Page ___ of ___

DETAIL OF RATEMAKING ADJUSTMENTS

Adj. No.

Description

Explanation of Adjustment

Base Rate Revenues

Fuel - WPCA Revenue

Rider Revenue

Margin Stabilization

Other Electric Revenues

Purchased Power Exp.

Margin Stabilization

Other O&M Expense

Depr. & Amort.

Tax Expense - Property

Tax Expense - Other

Other

Operating Margins Adjusted

Capital Credits Accrued

Other Income

Interest on Long-Term Debt

Other Interest Expense

Other Expense

Total Margins

Net Utility Plant

Allowance for Working Capital

Other Rate Base Deductions

Total Rate Base

SCHEDULE 8

CAPITAL STRUCTURE AND COST OF DEBT STATEMENT
PER BOOKS AND FULLY ADJUSTED
For the 12-Months Ending __________, ___

(Col. 1)

(Col. 2)

(Col. 3)

(Col. 4)

(Col. 5)

(Col. 6)

(Col. 7)

(Col. 8)

(Col. 9)

(Col. 10)

Total Cooperative Per Books

Percentage of Col. 1 Total

Adjustments Due to Ratemaking Requirements

Total Cooperative As Adjusted

Percentage of Col. 4 Total

Cost of Col. 4 Debt

Ratemaking Adjustments

Amount After Adjustments

Percentage of Col. 8 Total

Cost of Col. 8 Debt

1.

Short-Term Debt

2.

Long-Term Debt

3.

Total Margins and Equities

4.

Other

5.

Total Capital

6.

Principal Repayments

7.

Accumulated Capital Credits Accrued

8.

Accumulated Capital Credits Received

Schedule 10

NET ORIGINAL COST RATE BASE
PER BOOKS AND FULLY ADJUSTED
For the Period Ending __________, ___

(Col. 1)

(Col. 2)

(Col. 3)

(Col. 4)

(Col. 5)

(Col. 6)

(Col. 7)

Line No.

Description

Total Cooperative Per Books

Adjustments Due to Ratemaking Requirements

Total Cooperative As Adjusted

Non-Virginia Jurisdictional Business

Virginia Jurisdictional Business

Ratemaking Adjustments

Amounts After Adjustments

Net Utility Plant

1.

Electric Plant in Service

2.

Completed Construction Not Classified

3.

Construction Work in Progress

4.

Plant Held for Future Use

5.

Less: Accumulated Provision for Depreciation and Amortization

6.

Total New Utility Plant

Allowance for Working Capital

7.

Cash Working Capital: Purchased Power

8.

Other O&M

9.

Materials and Supplies (13-month average)

10.

Deferred Fuel

11.

Other Working Capital (List Separately)

12.

Total Allowance for Working Capital

Other Rate Base Deductions

13.

Customer Deposits

14.

Customer Advances for Construction

15.

Other Cost Free Capital (List Separately)

16.

Total Other Rate Base Deductions

17.

Total Rate Base

COOPERATIVE NAME
JURISDICTIONAL CLASS COST OF SERVICE
(METHODOLOGY) COST ALLOCATION STUDY

SYSTEM FUNCTIONAL ANALYSIS
CASE NO. PUE------

Exhibit No.: ________
Witness: __________
Schedule 14A

Line No.

Description

System

Production

Transmission

Distribution

Other

Allocation Basis

10

Operating Revenues

20

30

Operating Expenses

40

Depreciation Expenses

50

Amortization

60

Income Taxes

70

State Income Taxes

80

Taxes Other than Income

90

100

Total Operating Expenses

110

120

Net Operating Income

130

140

Adjustments to Operating Income

150

160

Add:

AFUDC

170

Less:

Charitable Donations

180

Interest Expense - Customer Deposits

190

200

Adjusted Net Operating Income

210

220

Rate Base

230

240

ROR Earned on Rate Base

COOPERATIVE NAME
JURISDICTIONAL CLASS COST OF SERVICE
(METHODOLOGY) COST ALLOCATION STUDY

CLASS SUMMARY
CASE NO. PUE------

Exhibit No.: _______
Witness: _________
Schedule 14B

Line No.

Description

Virginia Juris

Retail Class 1

Retail Class 2

Retail Class 3

Retail Class 4

Retail Class 5

Allocation Basis

10

Operating Revenues

20

30

Operating Expenses

40

Depreciation Expenses

50

Amortization

60

Income Taxes

70

State Income Taxes

80

Taxes Other than Income

90

100

Total Operating Expenses

110

120

Net Operating Income

130

140

Adjustments to Operating Income

150

160

Add:

AFUDC

170

Less:

Charitable Donations

180

Interest Expense- Customer Deposits

190

200

Adjusted Net Operating Income

210

220

Rate Base

230

240

ROR Earned on Rate Base

COOPERATIVE NAME
JURISDICTIONAL CLASS COST OF SERVICE
(METHODOLOGY) COST ALLOCATION STUDY

CLASS FUNCTIONAL ANALYSIS
CASE NO. PUE------

Exhibit No.: ________
Witness: __________
Schedule 14C

Line No.

Description

Retail Class 1

Production

Transmission

Distribution

Other

Allocation Basis

10

Operating Revenues

20

30

Operating Expenses

40

Depreciation Expenses

50

Amortization

60

Income Taxes

70

State Income Taxes

80

Taxes Other than Income

90

100

Total Operating Expenses

110

120

Net Operating Income

130

140

Adjustments to Operating Income

150

160

Add:

AFUDC

170

Less:

Charitable Donations

180

Interest Expense - Customer Deposits

190

200

Adjusted Net Operating Income

210

220

Rate Base

230

240

ROR Earned on Rate Base

Statutory Authority

§ 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 12, Issue 14, eff. March 15, 1996; amended, Virginia Register Volume 16, Issue 25, eff. July 28, 2000; Volume 29, Issue 23, eff. July 1, 2013.

20VAC5-200-30. (Repealed.)

Historical Notes

Derived from Case No. PUE850022, eff. August 21, 1985; amended, Virginia Register Volume 16, Issue 25, eff. July 28, 2000; Errata, 19:20 VA.R. 2999 June 16, 2003; repealed, Virginia Register Volume 25, Issue 9, eff. January 1, 2009.

20VAC5-200-40. The Small Water or Sewer Public Utility Act.

This section applies to public utilities holding a certificate of public convenience and necessity issued by the State Corporation Commission to provide either water or sewer service, or both, and having gross annual operating revenues of less than $1 million. Such utilities are subject to the Small Water or Sewer Public Utility Act (§ 56-265.13:1 et seq. of the Code of Virginia) and shall be referred to herein as "company." Companies shall perform their own tariff justification analysis in-house prior to changing their rates, tolls, charges, fees, rates or regulations ("tariffs" or "rate changes"). Companies should endeavor to meet with any organized group of customers, e.g., civic associations or property owners' organizations, on a regular basis at least once a year to advise them of company problems, any impending tariff changes and why such changes are necessary. Companies are also encouraged to meet with the staff, following any company meeting with its customers to review and discuss proposed rate changes. However, each company remains responsible for bearing the burden of proof regarding any changes in its tariffs.

Requirements

1. Companies shall maintain their books and records in accordance with the Uniform System of Accounts for Class C companies on an accrual basis.

2. A 3.0% composite rate of depreciation is usual and customary and presumed to be reasonable. Any company which desires to use a higher accrual rate shall notify the commission's Divisions of Energy Regulation and Utility Accounting and Finance of its intent to change this rate in advance of booking same and shall provide to these divisions a copy of a study or other documents which the company believes supports its proposed change. The staff shall review this change and advise the company of the results of its review. If the company wishes to contest the staff's conclusions regarding depreciation, it may, by motion, apply to the commission for a hearing. If a company wishes to depreciate contributed property, it must advise the commission, through its Divisions of Energy Regulation and Utility Accounting and Finance, before booking depreciation on such property, and provide appropriate documentation to support the need for such depreciation under the requested accrual rate. The staff shall review this change and advise the company of the results of its review. If the company wishes to contest the staff's conclusions regarding depreciation of such property or the rate to be accrued thereon, the company, by motion, may apply to the commission for a hearing.

In the event that staff and company agree that depreciation of contributed property is proper and agree on the accrual rate for such depreciation, the amount so depreciated shall be placed in an escrow account and used only for capital improvements, until a commission order is entered to the contrary.

3. Working capital may be accrued at the rate of 1/9th of the total operating and maintenance expenses for the test period.

4. Each company shall file with the commission's Division of Energy Regulation three copies of the tariff changes, the notice required by subdivision 5 below, and the following information: A narrative statement that sets forth the name of the company, the name, address and telephone number of the person company wishes to have contacted about the tariff change and a brief explanation about why the change is being made. This narrative statement shall also describe whether the company's customers are served on a flat or metered basis; whether billed in advance or in arrears; and shall separately identify the number of connected customers and the number of customers being assessed availability fees, if applicable.

5. Each company shall complete its written notification to all customers 45 days prior to the effective date of any change in tariffs. In cases of hearings resulting from customer requests, only a hearing request made by the individual in whose name the account is maintained shall be deemed a request by a customer. Customer petitions are acceptable.

If a company wishes to contest the number of customers requesting a hearing or whether one submitting a request is a customer, the company may request and those requesting a hearing shall provide to the company a copy of all requests for hearing or a copy of any customer petition filed with this commission. If it is determined that requests for hearing have been received from persons other than customers and that the requisite number of customer requests have not been presented, the company may seek dismissal of the case.

The Company's notice to its customers shall follow the following format to the extent applicable:

NOTICE OF (INCREASES IN, CHANGES IN) RATES, CHARGES, RULES AND REGULATIONS OF SERVICE OF (INSERT NAME OF COMPANY)

(Insert name of Company) will change its (tariffs) on file with the State Corporation Commission, effective for service rendered on and after (effective date). (Summarize existing rates, fees, and charges and all new rates, fees, and charges).

[If applicable] (Insert name of Company) also will change the following portions of its rules and regulations of service, effective on the same date: (Summarize changes).

Any interested party may review (insert name of Company)'s proposed changes during regular business hours at the utility's office where customer bills may be paid.

Any interested person may file written comments in support of or objecting to the proposed changes with the Division of Energy Regulation, State Corporation Commission, P.O. Box 1197, Richmond, VA 23218.

(NAME OF COMPANY)

6. The company is free to choose any test period it wishes to support its rate changes. However, a company having flat rate structures must annualize the level of revenues derived from their current rates based upon the number of customers served as of the end of its selected test period. A company with a metered rate structure must compute revenues in effect at the end of its selected test period based upon the number of customers and usage by customer block per billing period. In the event that a hearing is held, the company shall provide the foregoing information to the commission on or before a date specified in the order scheduling hearing.

7. A hearing shall be held after at least 30 days notice to the company and its customers if a request or petition therefor is received by the commission from at least 25 percent of all customers affected by any filed tariff change, or from 250 affected customers, whichever is the lesser, or from the company itself, or upon the commission's own motion. When a hearing is to be held, the commission shall, by order, establish a hearing date and a date by which the company shall file financial data containing the information set forth in subdivision 8 below. A copy of the order shall be sent by first class mail to the company and any customer requesting a hearing from whom the commission has a complete mailing address. This order shall also specify a filing schedule for the company, customers and staff.

8. Financial data regarding a rate increase filed pursuant to subdivision 7 hereof shall include:

Any company electing to use a calendar year as its test period may file a copy of its annual report and a statement prepared in the format of the form rate of return statement following this subdivision. The statement shall incorporate the per books data of revenues, expenses and plant stated in the annual report and appropriate adjustments. The commission accepts adjustments which reflect (i) annualized changes occurring during the test year, (ii) known and certain wage agreements, (iii) elimination of test year expenses pertaining to a prior year or elimination or amortization of expenses of a nonrecurring nature, and (iv) known and certain changes occurring within 12 months after the test year. The utility is not, however, precluded from making other adjustments which it can support and justify. The utility shall also file an explanation of all of its adjustments appearing in the attached rate of return statement.

Any company electing to use a noncalendar test year may, in lieu of an annual report, file a current balance sheet, income statement and tax return statement prepared in the format of the form rate of return statement following this subdivision. The statement shall incorporate per books data of revenues, expenses and plant and appropriate adjustments. The commission accepts adjustments which reflect (i) annualized changes occurring during the test year (ii) known and certain wage agreements, (iii) elimination of test year expenses pertaining to a prior year or elimination or amortization of expenses of nonrecurring nature, and (iv) known and certain changes occurring within 12 months after the test year. A utility is not, however, precluded from making other adjustments which it can support and justify. A utility using a noncalendar test shall also file an explanation of all adjustments and workpapers showing the calculation of the adjustments.

Exhibit - RATE OF RETURN STATEMENT

Per Books

Adjustments

After Adjustments

Proposed Increase

After Proposed Increase

Operating Revenues

Water Service Fees

Availability Fees

Sewer Service Fees

Miscellaneous Service Revenues

Total Operating Revenues

Operating Expenses

Operation and Maintenance

Depreciation and Amortization

Taxes Other

Federal Income Taxes

Total Operating Expenses

Net Operating Income

Utility Plant

Utility Plant in Service

Less: Accumulated Depreciation and Amortization

Less: Acquisition Adjustment - Net

Less: Contributions in Aid of Construction

Net Utility Plant

Allowance for Working Capital

Cash

Materials and Supplies

Total Allowance for Working Capital

Net Utility Plant and Allowance

Statutory Authority

§ 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Case No. PUE870037, eff. November 10, 1987; amended, Virginia Register Volume 29, Issue 23, eff. July 1, 2013.

20VAC5-200-50. Rules governing ratemaking treatment of employee post-retirement benefits other than pensions.

For public utilities providing electric, natural gas, telephone and water service, employee post retirement benefits other than pensions (OPEB), as defined in Financial Accounting Board Statement 106, shall be subject to the following accounting and ratemaking treatment:

1. OPEB costs shall be accrued during the active employment of the employee. A portion of OPEB costs so accrued shall be capitalized as appropriate.

2. OPEB transition obligations, as defined if SFAS 106 shall be amortized over 40 years, except that capitalized amounts may be amortized over 20 years. Telephone companies participating in the experimental plan may use a shorter amortization period for the OPEB transition obligation if the increased accruals do not place the company in a position which cause it to seek rate relief.

3. Recovery of OPEB cost accruals in rates shall not be permitted unless such accruals are fully funded. Any unfunded OPEB liability shall be deducted from rate base unless deferred for regulatory purposes.

4. Deferred income taxes shall reflect differences in OPEB cost recognition for ratemaking and tax purposes.

5. A regulatory asset may be recorded to recognize booking and ratemaking differences in the implementation of accrual accounting of OPEB expenses for reporting and ratemaking purposes.

6. Differences in implementation of accrual accounting for expenses for reporting and ratemaking purposes may be deferred only if (i) the company is earning below its authorized range of return on equity and will file for a change in rates within two years of implementing SFAS 106 or two years from the date of this order, whichever is later and (ii) the deferral is recognized in the transition obligation, amortized beginning with the effective date of the change in rates.

7. In the event of any conflict between this section and any other rule or regulation of the Commission, this section shall control.

Statutory Authority

§§ 12.1-13, 56-36, 56-235.2, 56-249 and 56-249.2 of the Code of Virginia.

Historical Notes

Derived from Case No. PUE920003, eff. December 30, 1992.

Forms (20VAC5-200)

Electric Utilities.

Annual Report, FERC Form 1 (eff. 12/93).

Schedules A-R.

Electric Cooperatives.

Annual Report.

Gas Utilities.

Annual Report, FERC Form 2 (eff. 12/92).

Schedules A-F.

Telephone Utilities.

Annual Report, FCC Form M (eff. 1989).

Composite Statistics (eff. 2/76).

Water/Sewer Utilities.

Annual Report - Class A.

Annual Report - Class C.



Website addresses provided in the Virginia Administrative Code to documents incorporated by reference are for the reader's convenience only, may not necessarily be active or current, and should not be relied upon. To ensure the information incorporated by reference is accurate, the reader is encouraged to use the source document described in the regulation.

As a service to the public, the Virginia Administrative Code is provided online by the Virginia General Assembly. We are unable to answer legal questions or respond to requests for legal advice, including application of law to specific fact. To understand and protect your legal rights, you should consult an attorney.