SECTION 165:70-5-32. Section L - Rate design cost of service

  Section L - Rate Design Cost of Service of the supplemental package shall contain cost of service studies, workpapers and data necessary to support the studies used to support proposed rates or rate structures.

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

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

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

(ii)   Other revenues.

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

(iv)   Operating & maintenance expenses.

(v)   Depreciation and amortization expenses.

(vi)   Taxes other than income taxes.

(vii)   Provision for income taxes.

(viii)   Gross plant.

(ix)   Reserve for depreciation.

(x)   Construction work in progress (CWIP).

(xi)   Plant held for future use.

(xii)   Materials, supplies and fuel inventories.

(xiii)   Gas in storage.

(xiv)   Cash working capital.

(xv)   Prepayments.

(xvi)   Customer deposits.

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

(xviii)   Customer advances.

(xix)   Property insurance (if applicable).

(xx)   Other items as needed.

(xxi)   W/P L-1-1 - Existing Rate Schedules/Existing Rate Classes: Summaries of the rate of return and relative rate of return under existing rate schedules using existing rate classes.

(xxii)   W/P L-1-2 - Proposed Rate Schedules/Existing Rate Classes: Summaries of the rate of return and relative rate of return utilizing the proposed rate schedules and existing rate classes.

(B)   W/P L-2 - Allocation of Revenue Deductions to Rate Classes: A schedule which shall provide all revenue deductions and includes all deductions from income used to develop rate of return. Additionally, all allocations shall be labeled in such a manner as to identify the basis for each cost allocation, and all allocators shall be thoroughly defined. The schedule shall provide the following, by allocation to the rate classes:

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

(ii)   Depreciation expenses, consistent with the plant presentation at Sections C and D.

(iii)   Any other revenue deductions.

(C)   W/P L-3 - Allocation of Rate Base to Rate Classes: A schedule which shall provide all rate base allocations. The schedule shall provide the following, by allocation to the rate classes:

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

(ii)   If gross plant was provided in (i) of this subparagraph, accumulated depreciation and amortization shall be provided by industry-specific major function, if applicable, and, if available, by the applicable regulatory primary account.

(iii)   CWIP by the industry-specific major function, if applicable.

(iv)   Materials, supplies and fuel inventories identified utilizing the industry-specific major function type of material and supplies, if applicable.

(v)   Gas in storage.

(vi)   Cash working capital identified by the industry-specific major function, if applicable.

(vii)   Any other rate base items.

(viii)   Prepayments identified by the industry-specific major function, if applicable.

(D)   W/P L-4 - Classification of Expenses: If the utility utilizes a specific rate design (e.g., demand, energy, customer, etc.) requiring classification of costs into that particular category, the utility shall provide a schedule which illustrates separation of expenses into such categories. Care shall be taken to ensure that the assignment of all expenses from accounts to classification is identified.

(E)   W/P L-5 - Classification of Rate Base: If the utility utilizes a specific rate design (e.g., demand, energy, customer, etc.) requiring classification of costs into that particular category, the utility shall provide a schedule which illustrates separation of rate base into such categories. Care shall be taken to ensure that the assignment of all rate base from accounts to classification is identified.

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

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

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

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

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

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

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

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

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

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

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

(H)   W/P L-8 - Unit Cost Analysis: Schedules which provide the following unit component costs under present rate classes. Component costs refer to classified revenue requirement by rate class. For example, dollars of demand, energy, and customer revenue requirement associated with each rate class. Unit component costs refer to average component costs which are expressed as follows:

(i)   Electric companies shall provide costs in dollars per billing kilowatt, costs per kilowatt-hour, and costs per customer.

(ii)   Gas companies shall provide costs per Mcf or MMBtu and costs per customer.

(I)   W/P L-9 - Support for Production Allocation Methodology or Demand Allocation Factors: A workpaper which provides the rationale for the selection of each allocation methodology used in the class cost of service or a cross-reference to where such information is otherwise provided. The rationale may consist of a cost justification, a special study, and/or an explanation with supporting workpapers.

(J)   W/P L-10 - Summary of Changes in Allocation Factors: A schedule which details the allocation factors which differ from those filed in by the utility in the utility's last general rate review.

(K)   W/P L-11 - Payroll Expense Distribution: A schedule of the test year adjusted payroll expense by industry-specific functional group and by applicable regulatory primary account, if such information was relied upon by the utility for allocations.

(L)   Load Research Data (for electric utilities, RECs and, to the extent available, for gas companies):

(i)   W/P L-13 - Demand Data by Strata: Schedules which indicate, for any rate class for which hourly demand data (or demand data for intervals other than one hour) is available for each customer in the class, and for each month of the test year, the sum of customer noncoincident maximum demand and rate class peak demand. Distribution utilities which cannot obtain system coincident demand data shall provide estimated contribution to system billing demand.

(ii)   W/P L-14 - Demand Estimates Methodology: A description, for the rate classes for which information has not been provided in W/P L-13, of the methodology used to develop demand estimates. Sources of any data used to develop these estimates shall be included.

(iii)   The demand data requested in W/P L-13 and W/P L-14 are defined as follows:

(I)   Rate Class Noncoincident Peak Demand (NCP) - For each rate class, this shall be the sum of the customers' maximum demand, regardless of the time of occurrence.

(II)   Rate Class Peak Demand or Maximum Diversified Demand (MDD) - This shall be the sum of the customers' diversified demands coincident with the time of the rate class peak.

(III)   Contribution to System Peak Demand or Coincident Peak (CP) - For each rate class, this shall be the sum of the customers' diversified demands coincident with the time of the system peak.

(M)   W/P L-15 - Financial Data for Noninvestor-owned Utilities: A schedule which provides total operating margins, times interest earned ratios (TIER) and debt service coverage (DSC) by rate class.

(2)   For telephone companies: W/P L-1 - All workpapers for cost studies which support rates and charges for existing and proposed services in accordance with the provisions of 165:70-5-4(d)(13).

[Source: Added at 11 Ok Reg 3753, eff 7-11-94]