Short Form Instructions
Belowyouwillfindinstructionstocompletetheformsforfiling a streamlinedgasdistributionbaseratecasewhichmaybeusedbysmallgasutilitiesinordertorequestadditionalrevenues.Theformsrequiredtocompletetheratefilingrequestareenclosedandarereferredtoas“ShortForm”schedules.Wehavealsoprovidedanexplanationofsomeoftheotheritemsnecessarytomakea completeratefiling.Examplesof operatingrevenueandexpenseadjustmentsandtheminimumcustomernoticeformhavealsobeenincluded.
A completeratefilingconsistsof:
a.CoverlettertotheCommissionSecretary.(SeeAttachmentA)
b.One original new tariff or tariffsupplementcontainingtheproposedratesandanychangedrulesandregulations.Allpagesshouldbeproperlynumbered.Allchanges,increasesanddecreasesshouldbenotedandsetforthinthelistofchanges.Allrates,rulesandregulationsshouldbechangedinconformanceto the applicablelaworCommissionpractice.
c.A copyofthecustomernoticewhich wassenttoratepayersregardingtheproposedratechange.Thisnoticemustbemailedatleast61dayspriortotheproposedeffectivedate.ThenoticemustcontaintheminimuminformationrequiredbytheCommission,asshownlater.This includes thepropersupplementandtariffnumbers,effectivedate, amountofincrease,percentofincreaseandtheaverageannualcostofserviceto a residentialcustomerunderpresentandproposedrates.(SeeAttachmentB)
d.Allinformationrequestedontheformsshouldbeprovidedunlessitisnotapplicable to the utility. In thatcase,pleaseindicateN/A.
e.Customer NoticeandVerification of Fact Affidavits.One original paper versionofeachoftheabovemustbesubmittedto theSecretaryoftheCommissionatleast60daysprior to the effective date oftheproposedrates.(SeeAttachments C andD)YoumayalsofilethesedocumentselectronicallywiththePUC.ForinstructiononhowtofileelectronicallypleasegotothePUCwebsiteat:
Tariffs:
Ifyoudonotknowordonotunderstandhow to properly submit a new tariff ortariffsupplement,theCommissionstaffwillassistyou.Commissionstaffwillbeabletoassist you with how to make changes; forexample:supplement,tariffandpagenumbers;recognitionofchanges,increases ordecreases;applicablelaworCommissionpolicyconcerningrates,rulesandregulations.
CustomerNoticeForm:
TheAttachmentsincludeanexampleoftheminimuminformationyoumustprovide to your customers. You are also requiredtocomputetheeffectoftheproposedratesforanyindividualcustomerwhorequestssuchinformation,asnotedinthesample
form.Youmustmailthenoticeatleastsixty-one(61)daysorhanddeliveritatleastsixty(60)days,priortotheproposedeffectivedateofthetarifforsupplement,unlessotherwiseauthorizedbytheCommission. (SeeAttachmentA)
AlsoincludedintheAttachmentsis a samplenotarizedaffidavitswearingastowhenthecustomernoticewassent. Suchanaffidavitisrequiredwitheveryfiling.(SeeAttachment C).
SHORTFORMSCHEDULES
The“ShortForm”containsseveralscheduleswhich request information “for the12-mo.PeriodEnding.”Thisperiod,whichisreferredtoas the“TestYear,”willbeused in support of your requested rates.The“TestYear”is a periodoftwelveconsecutivemonthswhichendnomorethanonehundredandtwenty(120)dayspriortothedateyourratefilingisreceivedbytheSecretaryoftheCommission.Forexample,ifyouweretousethetwelvemonthperiodfrom January 1 to December 31 as your testyear,youwouldhavetofileyourraterequestwiththeSecretaryof the Commission bythefollowingApril30th.Youmaychooseany“TestYear”periodyouwish,solongasitendsnomorethanonehundredandtwenty(120) days before the complete filing isreceivedbytheSecretary.
Severalschedulesrequestcomparative data. Ideally you would provide data fortwoconsecutivetwelvemonthperiods.That is,ifyour“TestYear”endedonDecember31,2013,youwouldcompareittothetwelvemonthperiodendedDecember31,2012.However,ifyoushoulduse a “TestYear”whichendedJune30,2013andyouareunabletoprovidethecomparablefiguresfor the twelve months ended June 30, 2012,youshouldusethetwelvemonthperiodendedDecember31,2011forcomparisontoyour “Test Year.” It is notpropertocomparetwotwelve monthperiodswhichoverlap.
Onepurposeofthecomparativestatementsistodemonstratethatthe“TestYear”levelis a normallevel.Thestaffwill ask foradditionalsupportinginformationconcerningmaterialdifferencesbetweenthetwotwelvemonthperiods.Inordertoprocesstheraterequestin a timelymanner,itwouldbetoyouradvantagetoprovideadditional information concerningmaterialyeartoyeardifferencesinrevenue,expenseorratebaseamountswithyourratefiling.
Annualization,NormalizationandAmortization:
In order to adjust the “Test Year” levelofrevenuesandexpensesto a normallevelwhichwouldalsoreflectknownandmeasurablechangesoverthe“TestYear,”annualizationand/ornormalizationadjustmentsmustbemade.
Somethingswhichwouldcauseanannualizationornormalizationadjustmenttobemadetooperatingrevenues are statedbelow:
a)Ratechangesthatoccurredduringthetest yearandthusresultin a mixoftariffratesforrecordedrevenues,whichmustbeadjustedusingthelatest(present)rates. (Annualization adjustment)
b)Changes in the number of customersorintheamountofgassoldduringorsubsequenttothe“TestYear.”(Annualizationadjustment)
c)Nonrecurring items. (Normalizationadjustment)
d)Anticipationofgainingorlosing a material number of customersin the nearfuture.(Annualizationadjustment)
Inadditiontotheseexamples,testyearoperatingexpensesmayalsorequireadjustmentsinordertoreflect a normallevel.Changesinpriceorcostlevelsthatcanleadtoadjustmentsmustbemeasurableandpermanent.Changesintheoperationoftheutilitywouldalsorequirethatadjustmentsbemadetothe“TestYear.”Ifabnormalitemswhichdonotoccurannuallyorwhicharenotexpectedtorecurareincludedinthe“TestYear,”theywilldistortthenormallevelofoperatingexpenses.Suchitemsshouldbeisolatedandeitheramortized,normalizedoreliminated. Amortizationsspreadouttheexpensingimpactoftheseitemsforratepurposesover a reasonablenumberofyears.
ShortFormScheduleA:GeneralInformation
Thefirstpageofthe“ShortForm”requestsbasicinformationaboutyourgasutility,itsownershipandpointofcontact.
ShortFormScheduleB:ComparativeBalanceSheet
Thisschedulenotestheaccountswhicharegenerallyusedbysmallcorporations.Itisnotallencompassing. Youmaymakeadditionstotheinformationrequested to fit the appropriate reportingofyourfinancialposition.Mostoftheaccounttitlesonthisschedulearegenerallyusedin many types of business. However, theaccountstitled“Customers’AdvancesforConstruction”and“ContributionsinAidofConstruction”areusuallyfoundonpublic utilities’booksofaccount.“Customers’Advances”arerecordedtorecognizeallamountsfromcustomersorpotential customers for construction of utilityplantinservice.Such“Advances”mayberefunded,ortheymayberetainedpermanentlybytheutility. “Contributions in Aid of Construction”aretherecordedamountsofanydonationsorcontributionsincash,services,orproperty from states, municipalities, or other governmentalagenciesandindividualsforconstructionpurposes.“Contributions”aremadewiththefullknowledgeandintentionofbeingoutrightcontributionstotheutility.Nofuturerefundisanticipated.
This schedule also contains “Preferred Stock,” “Bonds,” and “Notes Payable”accounts.Yoursupportinginformationshouldcontaincertaindetailsabouttheseaccounts. The holder, principal amount issued, current balance, termandinterestrateofeachstock,bondornoteshouldbeprovidedasapplicable.Anyspecialrequirementsinvolvedwithanyoftheaboveitemsshouldalsobeprovidede.g.amortizationschedulesandsinkingfundrequirements.
Short Form Schedule C: Statement of RevenuesHistoric Data
Onthisschedule,incolumnsonethroughfour,youaretosupplythenumberofcustomers and revenues for the “Test Year”andthepriortwelvemonthperiodbrokendownbythecustomerclassificationsshown.
Annualization of Revenues
Revenueannualizationspresentedincolumn five,arenecessaryiftherateschangedortherewas a changeinthenumberofcustomersduringthe“TestYear”.Itmayalsobenecessarytomakeanadjustment toreflectadditionalorloweredrevenuesdueto a materialnumberofcustomerstobeaddedorlostwithinthecomingyear.
Themethodofmakingrevenueannualizationsdiffersdependingonthetypeofratescharged(usagebased/volumetricratesorflat/fixedratessuchas a customercharge)andthecustomerclasstobeadjusted.
ResidentialCustomers
1.UsageBased/VolumetricRates
a)Computetheaveragenumber of customers duringthe“TestYear”
b)Computetheaverageusagepercustomer
c)Multiplytheaverageusagepercustomerbythenumberofcustomersservedattheendofthe“TestYear,”andthenmultiplybytheusageprice:
Example:No.ofcustomersatbeginning of“Test Year” / 200No.ofcustomersatendof“TestYear” / 220
“TestYear”usage(MCF) / 10,500
“TestYear”priceper MCF / $10
“TestYear”Revenue / $105,000
a) 200 + 220 = 420;420 / 2 = 210avg.no.ofcustomers
b) 10,500Mcf / 210 = 50Mcfper customer (average)c) 50 x 220 x $10 = $110,000
$110,000 - $105,000 =$5,000adjustmenttorevenues[this amount would appear incolumn 5of ScheduleConthe Residential customer line]
2.Flat/Fixed Rates
a)Multiplythenumberofcustomersservedattheendofthe “Test Year” by the flatratetogetthegoingforwardlevelofannualrevenues;
b)Subtract the “Test Year” revenues fromtheresultinggoing forward level ofannualrevenues.
This annualization adjustment reflectsthenewlevelofannualizedrevenuesthatcanbeexpectedfromthelevelofcustomers at year-end.
Example:No.ofcustomersatbeginning of“Test Year” / 200
No.ofcustomersatendof“TestYear” / 220
“TestYear” rate / $10
“TestYear”Revenue / $25,800
$10 x 220 x 12 = $26,400
$26,400 - $25,800 = $1,400adjustment to revenues
Commercial Customers
Insituationsinwhichthecommercial customersarerelativelysmallervolumeusersandallmaintainaboutthesamelevelofpurchases,youmayusethemethodshownaboveforresidentialcustomers. In other cases, it maybenecessarytomakeanadjustmentonanindividualcustomerbasis.Thatis,ifyoulose a largecustomer,isolatethe revenues lost for that customer. If youadd a largecommercialcustomerduringthe“TestYear”orsubsequenttothe“TestYear,”youshouldreflecttheeffectonoperatingrevenuesonanannualbasis.Youcouldusethevolumeofpurchasesmadebythecustomerduringthe“TestYear”ormakeanestimateofthecustomer’suse.Youwouldthencomputetherevenueeffectoftheseestimatedsalesthrough your present tariffrates.
IndustrialCustomers/OtherGasUtilities
Changes in the number of customers or materialchangesinthevolumespurchasedbythesecustomersshouldbedoneonanindividualcustomerbasisasdescribedabove.
3.ProposedIncreases
Themethodofcomputingtheeffectsof theproposedratesvaryaccordingtothedifferencesbetweenyourpresent and your proposed rate structures.
a.AcrosstheBoardIncrease
Thecomputationoftheproposedincreaseismosteasilydonewhenyouproposeanacrosstheboardincreasebycustomerclass.Afteryouhaveproperlyannualized/normalizedthe“TestYear”levelofrevenues,yousimplyincreasethislevelbythesamepercentageincreaseoftheproposed tariffratesoverthe present tariff ratesapplicabletoeachcustomerclass.
b.RateStructureChanges
Incasesinwhichyouchangethepresentrate structure or vary the percentageincreaseamongtherates,youmustprovidethefullcomputationoftherevenuesproduced by yourproposedrates.Inordertodothis,youmustprovide a calculation(billanalysis)whichshowstheannualincreaseor decreaseintotalrevenuebycustomerclass for each rate element (customercharge,commoditycharge,etc.).
ShortFormScheduleD:Statementof Operating ExpensesandProposed
Rate Increase
ThefirsttwocolumnsonthisschedulecontaintheOperatingRevenueDeductionsforthe“TestYear”andanother comparabletwelvemonthperiod(asontheStatement of Revenueschedule).Theoperatingexpensestobeprovidedareclassifiedbymajorexpensecategories.Youshouldalsoprovide a breakdownoftheitemscontainedin“OtherMiscellaneousExpenses”and“AllOtherTaxes”onseparateschedules.
Annualizations/Normalizations/Amortizations of Expenses
Asstatedpreviously,thetestyear levelofoperatingexpensesmayrequireadjustmentstoreflectnormaloperationsandalsotoallowtheamortizationofcertainexpenditures. Some of the expense items that may require annualizationincludelabor,rent,taxes,postageandinsurancecosts.Also,certain expenses thatvaryaccordingtoweatherconditionsmayneedtobeweather-normalized. Annualizationandnormalizationadjustmentsattempttoestimatewhatthecostofanitemwouldbegiventhecurrentunitcostandthenormallevelofusage.Insome cases, you must makeannualizationadjustmentstoreflectchangesin theutility’soperations(e.g.,whenyouaddorloseemployees,addequipment,changeemployeebenefits,etc.).
Youmayannualizecostsforitemswhicharemeasurablebytakingthe“TestYear” level of purchases for that item,normalizedforchangesinoperationsandnormalweatherconditions,andusingthatnormalizedlevelofpurchasestocalculatethetotalcostatthecurrentpriceyoumustpayfortheseitems.
In order to annualize thecostoflabor,youshoulddeterminethenormalnumberofstraight-timeandovertimehoursworkedbeforeyouapplytheproperwagerate.
Duringthe“TestYear”orinsomeprioryears,youmayhaveincurredcertaintypesofoperatingexpenseswhichshouldbe amortizedtospreadsuchexpensesoveran appropriate number of years. Items thatshouldbeamortizedincludelargeone-timeexpensesorotherextraordinaryitems.Youshouldprovidesupportingdocumentationfor these types of expenditures.Anestimateshouldbemadeofthefrequencyofrecurrence of such expenditures, if possible.Theseexpenditureswouldbeamortizedover the years of their expectedfrequencyofoccurrence.
ShortFormScheduleE:PlantinServiceDetails
Theschedulerequeststhatyouprovide a basicdescriptionofthepropertyaddedandretiredbyyearandtheoriginal cost of the items.
Short Form Schedule F: Capital Structure
AtthelowersectionofthisSchedulelisteachlong-termandshort-termloan,theamountoutstandingattheendofthetestyearandthe applicable interest rate.
Additional Supporting Information to be supplied
RequiredbyCommissionRegulations:
1)Reasons for the proposedrateincrease.
2)Thetotalnumberofcustomersservedbytheutility.
3)Thenumberofcustomersbytariffsubdivisionwhosebillswillbeincreasedand/or decreased.
4)Allannualizations,adjustments,allocationsbetweencompanies,andamortizationsshouldbefullyexplained indetail.Youshouldprovidethefullcomputationoftheadjustmentand explainwhyandhowitwasmade.
5)ConstructionWorkinProgress: Supply the cost to date, the estimated cost tocomplete,thepercentcompleted,theestimatedin-servicedate,theimpactonrevenuesandexpensesexpectedandanyotherinformationapplicabletotheproject.
Depreciation
Provide a copyoftheIRSdepreciationschedule.Providethemethodusedtocomputetheaccruedandtheannualdepreciation.
Providedetailsofwages,salariesandother benefitspaid aswellas a summaryofwork performed
a.Describethedutiesofeachemployee.
b.List any certified operatorsemployedbythecompany.
c.c. For each employee list:
(1)Annual salary or hourlyratepaidduringthetestyear,
(2)Regularandovertimehoursworkedduringthetestyearforhourlyworkers.
d.Explainanyallocationofwagesand salariesbetweendifferentcompanies
e.Whatotherbenefitsarepaidtoemployeesbythecompany.
Scope of Operations
Brieflydescribethephysicalplant,aswellasthehistoryofthecompany.
CopiesoflatestcorporateStateandFederalIncomeTaxReturns
Iftheutilityis a corporation,IRSForm1120orForm1120SandPAFormRCT101 must be submitted for themostrecentfilingyear.
ComplianceIssuestobeAddressed
PleasenotethatcomplianceissuesrelatedtounpaidfinesorassessmentsaswellasoverduefilingofannualreportsandSecurityPreparednessReportswillbeaddressedintheanalysisofthisratefiling. It would be to the advantageofthecompanyto address the correction of these issues at thetimeofthefilingofthis rate request.
That pursuant to 52 Pa. Code§1.96, thisinformal opinion is provided solelyasan aid to you.It is not binding upontheCommonwealthortheCommission.
Informalopinionsaresubjecttowithdrawalorchangeat any time to conform tonewordifferent interpretations the law.
ATTACHMENTS
AttachmentA:SamplecoverlettertoCommissionSecretaryAttachmentB:SampleCustomerNotice(twopages)
AttachmentC:SampleAffidavitaffirmingthatCustomerNoticewasmailed
/deliveredonacertaindate.(Thisformmustbenotarized).
AttachmentD:SampleAffidavitaffirmingfactualnatureofalldatasubmitted.(Thisformmustbenotarized).
AttachmentA
ABCSmallNaturalGasCompanyStreetAddress
City,State,Zip
PhoneNumber/FAXNumber
Date
Secretary’s Bureau
CommonwealthofPennsylvaniaPublicUtilityCommissionCommonwealthKeystoneBuildingSecondFloor
400NorthStreet
Harrisburg,PA17105-3265
Re:ABCSmallNaturalGasCompanyBaseRateFilingDocketNumberR-20XX-XXXXXXX
DearSecretary:
OnbehalfoftheABCSmallNaturalGasCompanypleaseacceptthefollowingdocumentsanddatainconnectionwithproposedTariff(orTariffSupplement)No.XXtoTariff–GasPa.P.U.C.No.XXrequestinganincreaseinbaseratesforallcustomerclassesservedbyABCSmallNaturalGasCompany.
Asrequiredby52Pa.Code§53.51(b)etseqtheABCSmallNaturalGasCompanysubmitsone originalcopyofthefollowingdocumentsandinformation:
1.TarifforTariffSupplementNo.XXtoTariff–GasPa.P.U.C.No.XX.
2.SupportingdataandcalculationsinsupportofTarifforTariffSupplementNo.XXtoTariff–GasPa.P.U.C.No.XX.
3.Noticetocustomersoftheproposedincreaseandanaffidavitverifyingpostingofthenoticeinthecompany’sofficeandalsothemailingofindividualnoticestoallcustomers.
4.Thenewsreleaseandanaffidavitofitsdistributiontothelocalnewsmediaon
Month/Day/Yearforpublication.
5.Anaffidavitofthefactualnatureofallinformationpresentedinthisfiling.
Respectfullysubmitted,
Cc: Office ofConsumer Advocate (w/enclosures)Office of SmallBusiness Advocate (w/enclosures)Bureau of Investigation & Enforcement (w/encl.)
Officername/Title
ABCSmallNaturalGasCompany
AttachmentB
To Our Customer:
NOTICEOFPROPOSEDRATECHANGES
(Company)isfiling a requestwiththePennsylvaniaPublicUtilityCommission(PUC) to increase your (type of service) ratesasof(date).Thisnoticedescribesthecompany’s rate request, the PUC’s role,andwhatactionsyoucantake.
(Company)hasrequestedanoverallrateincreaseof$peryear.Ifthecompany’sentirerequestisapproved,thetotalbillfor a residentialcustomerusing(statetypicalusagelevel)wouldincreasefrom$ to$ permonthorby
%.
Thetotalbillfor a commercialcustomer using(statetypicalusagelevel)wouldincreasefrom$ to$ per month or by %.
Ratesforanindustrialcustomerusing(state typical usage level)wouldincreasefrom$ to$ permonthorby %.
Tofindoutyourcustomerclassorhowtherequestedincreasemayaffectyour(typeofservice)bill,contact(Company)at(toll-freephonenumber).Therates requestedbythecompanymaybefoundin(tariffnumber).YoumayexaminethematerialfiledwiththePUCwhichexplains therequestedincreaseandthereasonsforit.A copyofthismaterialiskeptat(Company)’soffice.
ThestateagencywhichapprovesratesforpublicutilitiesisthePUC.ThePUCwillexaminetherequestedrateincreaseandcanpreventexistingratesfromchanginguntil it investigates and/or holds hearings ontherequest.Thecompanymustprovethattherequestedratesarereasonable.Afterexaminingtheevidence,thePUCmaygrantall,some,ornoneoftherequestormayreduceexistingrates.
ThePUCmaychangetheamountoftherateincreaseordecreaserequestedbytheutilityforeachcustomerclass.As a result,theratechargedto youmaybedifferentthantheraterequestedbythecompanyandshownabove.
Therearethreewaystochallenge a company’srequesttochangeitsrates:
1)Youcanfile a formalcomplaint.If youwant a hearingbefore a judge,youmustfile a formalcomplaint.Byfiling a formalcomplaint,youassureyourselftheopportunitytotakepartinanyhearingsconvenedconcerningtherateincreaserequest.AllcomplaintsshouldbefiledwiththePUCbefore(proposedeffective date of the rateincrease).Ifnoformalcomplaintsarefiled,theCommissionmaygrantall,someornoneof the request without holding a hearingbefore a judge.
2)YoucansendthePUC a letterstatingyourobjectionstotherequestedrateincrease.Sometimesthereisinformationintheselettersthatmakesusawareofproblemswiththecompany’sserviceormanagement.Thisinformationcanbehelpfulwhenweinvestigatetheraterequest.
Sendyourletterorrequestfor a formalcomplaintformtothePennsylvaniaPublic Utility Commission, Post OfficeBox3265,HarrisburgPA17105-3265.
AttachmentB
3)Youcanbe a witnessat a publicinput hearing.PublicinputhearingsareheldiftheCommissionopensaninvestigationofthecompany’sraterequestandifthereis alargenumberofcustomersinterestedin thecase.AtthesehearingsyouhavetheopportunitytopresentyourviewsinpersontothePUCjudgehearingthecaseandthecompanyrepresentatives.Alltestimonygivenunderoathbecomespartoftheofficialratecaserecord.Thesehearingsareheld intheserviceareaofthecompany.
Company
12
AttachmentC
AFFIDAVIT
COMMONWEALTHOF PENNSYLVANIA
……………………………………………….. County
}ss:
…(Officer Name)…………………, beingdulysworn (affirmed) accordingtolaw,deposesandsaysthathe/sheis……(Officer Title)…………………….. of
……(Company Name)…………………………..; that he/she is authorized to and does makethis affidavitfor it; and that the customer notice was mailed this day of
……(Date)…………..in the month of …(Month)…… in the year of …….20XX……
……………………………………..
(Officer Name and Title)
……………………………………..
Signature of Affiant(s)
Sworn and subscribed before me this
………………….. day of …………….. 20XX……My Commission Expires ………………………
………………………………………… Signature of Official Administering Oath
Customer Notice Affidavit
AttachmentD
AFFIDAVIT
COMMONWEALTHOF PENNSYLVANIA
}ss:
………………………………………… County
……(OfficerName)……… ……., being duly sworn (affirmed) according to law, deposes
andsaysthathe/sheis…(Officer Title)……………………. of …(CompanyName…………..;thathe/sheisauthorizedtoanddoes make thisaffidavitforit;andthatthefactssetfortharetrueandcorrect;oraretrueand correct to the bestof his/her knowledge, information and belief andhe/sheexpectsthesaid………………………………………..tobeabletoprovethe same atthehearinghereof.
……………………………………
(Officer Name and Title)
…………………………………… Signature of Affiant(s)
Sworn and subscribed before me this
………. day of …………. 20XX…………My Commission Expires ………………
………………………………………….. Signature of Official Administering Oath
Affidavitaffirmingfactualnatureofalldatasubmitted
ShortFormTables‐Definitions
Schedule A
Thisscheduleisacoversheetthatprovidescontact information andbriefbackgroundinformationfor the utility filingfor arate increase.
Schedule B
This schedule is a comparativebalance sheet thatpresents the company’s financial position as ofaspecified date. A company usingacalendaryear would have a beginning date of January 1,xxxx and an ending date of December31, xxxx.The accounting equationfor the balance sheetis:
Total Assets = Total Liabilities + Stockholders’Equity.
Thebalancesheetisuseful because itindicates what thecompanyhasinresources and whatitowes. The small gas utility’s Annual Report tothePUCmaybehelpful in completingSchedule B.
Definitionsofitems on the Balance Sheet
Assets: resourcescontrolledbythe company thatprovide economic benefittothe company.Assets are usually listed onthebalancesheetbytheirliquidity.
Current Assets: assets that havea life of less than one year.
Cash: “Ready money.” This includes all currency orcoinonhandandanybankdeposits.
Accounts Receivable:Amounts due on account fromcustomers for gas billed or from affiliatedcompanies. Accounts receivablearetypicallyshownnetofanallowanceforuncollectibleaccounts(liability).
Material and Supplies: Amounts representingthecostof items held in inventory prior to beingcapitalized or expensed.These inventories are current assets that are included in rate base. Anexample would be office supplies such as paper tobe used forpreparingcustomer bills.
Other Current Assets: Amountsforcurrentassetsthatdonotfitunderany classification shown.
Prepayments:Amounts paid in advance for a future business expense. An example would beinsurance.
Deferred Charges: An amount for a cost (expense) already incurredbutdeferred until theexpense matches thefuturerevenue.Typically, for a small gas company, this would be amountsoverorundercollectedthroughtheGCR(ifthe company usesaGCR).
ShortFormTables‐Definitions
Plant in Service: thecostoffixedassetsusedinthe business.For a small gas company, thiswouldincludethelines, meters, buildings,etc.PlantinServiceisdepreciatedor amortized. Plantin service must be “used and useful” totheutility’soperationotherwiseitshouldbeclassifiedasnon-utility. For example if the small gas companyownsabuildingbutitalsousesthebuildingforoperatinganothercompany,thenonlythe portion used for the utility is “used and useful”.
Construction Work in Progress: amountsforfixedassetsnotyet classified asplantinservicebutareintheinstallation process. An example would be lines installedforanewhousingdevelopment.
Accumulated depreciation/amortization:thesystematicwrite-off ofa fixed asset’s cost. Thisaccountrepresentstheamountofa fixed asset's cost that has been allocated to depreciationexpensesincethe time thattheassetwas acquired. Thereareseveral methods ofdepreciationoramortization, but for rate purposes, straight-line is preferred. Straight-line depreciationiscalculated by takingthe original cost of an asset less its net salvage valueanddividingbythenumber ofyearsofexpecteduse.
Investments: amounts ondepositandnot expected to be converted tocashwithinoneyear.
Liabilities:amounts payable sometime inthefuture.Currentliabilities are amounts payableinless thanone year.
Accounts Payable: amounts owedforpurchasesusedinutilityoperations.
Contributions in Aid of Construction:amounts collected from customers typically forconstructionofa line that will bereturned themifadditional customerscome on.
Customer deposits: amounts paidby customers, usually for a security deposit.
Other Currentliabilities:amounts forcurrent liabilities not classifiedelsewheresuchasallowance for doubtfulaccounts.
Equity: amounts contributedbytheownersofthe company. Equity equals the assets of thecompany less the liabilities of the company and representsthenetworthofthe company.
Common stock: the par or stated value of common stock issued by the company.
Paid-in Capital:amount paid in excess or discount oftheparorstatedvalueofthecommonstock.
Retained Earnings:the accumulated net income, afterdeducting dividends andotherdistributions paid to stockholders, including amounts transferred to paid-in capital accounts.
Schedule C
Schedule C is a statement of revenues and proposedbaserateincreases.Dataforthisscheduleshould be taken fromthe company’scustomerrecords orledger.Thesmallgasutility’sAnnualReporttothePUCmaybehelpful in completing ScheduleC.
ShortFormTables‐Definitions
Annualization: to extend or eliminate an itemto anannualbasis.Acustomerwhouses10Mcfper month wouldhaveanannualizedusageof 120Mcf(10x12).Also,ifanewcustomerreceives service for three monthsof the year and used 40 Mcf, that customer’s annualized usagewould be 160 Mcf.
Normalization: toadjustanunusuallevelof annual revenue or expense toa more ‘normal’ orhistorical annual level. Some expenses, such as rate case expenses, may be written off, oramortized, over several years.
Pro-Forma: a financial statement with amounts that arefullyorpartiallybasedonvariousfutureassumptions. Financial statements are preparedbasedonthe company’s records.A pro-formastatement is prepared based on a “what if” scenario.What would annual revenuesbeif customerswho received service for less than 12monthshad been receiving service forthe entire year?
Proposed Increase in Base Rates: the incrementalamount of revenue needed to recover theutility’stotal cost incurred to provide utility service toits customers.
Schedule D
Schedule D is a statement of test year and adjusted testyear1)operatingexpenses,2)annualized revenues from Schedule C, and, 3) theproposed base rate increase. Most expenses willbe supported by invoices or check payment. (It is importantforsmall gas company ownersto recognizetheirsalaryfor services renderedonthisschedule.Inaddition,thesalariesandbenefitsforgeneralofficeworkandother workers shouldbeprovidedindetail.)The small gasutility’sAnnualReporttothePUC may behelpful in completing Schedule D.
Schedule E
Schedule E is used to detail the company’splant in service.Thetotalplantmust agreewith Plantin service balance at year end on Schedule B.
Schedule F
Schedule F is the development ofcapital structure and embedded cost of debt. The lower sectionofthisScheduleis completed first with the currentbalances and interest rateforeachshorttermand long term loan.
Schedule G
Schedule G is the development of cost of capitaland rate of return. The only entry needed onthis Schedule is the Cost Rate for Common Equity.All of the other numbers on this Scheduleareself-computing.The total weighted cost of capital is applied to total plant in service andbecomes part of the requested increase inbase rates.