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23-4-1207. Formula — Adjustment of customer rates.
Arkansas Code — all titles (historical 2020) · legal_authorities
23-4-1207. Formula — Adjustment of customer rates.
(a) Customer rates shall be adjusted in a formula rate review mechanism based on a comparison of the earned return rate to the target return rate.
(b) Adjustments of customer rates shall be calculated using the following formula:
(1) If the earned return rate is less than the target return rate minus five-tenths percent (0.5%), the formula rate review mechanism revenue level for the formula rate review test period shall be increased by an amount necessary to increase the earned return rate to the target return rate;
(2) If the earned return rate is greater than the target return rate plus five-tenths percent (0.5%), the formula rate review mechanism revenue level for the formula rate review test period shall be decreased by an amount necessary to decrease the earned return rate to the target return rate; or
(3) If the earned return rate is less than or equal to the target return rate plus five-tenths percent (0.5%) and greater than or equal to the target return rate minus five-tenths percent (0.5%), the formula rate review mechanism revenue level for the formula rate review test period shall not change or be adjusted.
(c) If a formula rate review test period utilizes projected data under § 23-4-406 or a projected year, rates shall be adjusted by the netting of historical year differences under § 23-4-1206.
(d)(1) The total change in the formula rate review mechanism revenue level shall be allocated to each applicable rate schedule based on an equal percentage of the base rate revenue used in the development of rates in the Arkansas Public Service Commission's order addressing the public utility's last application for a general change in rates and charges.
(2) The total amount of a revenue increase or dec
Source: Arkansas Code — historical release 78 (November 6, 2020) · 23-4-1207
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. A text match is a research starting point; applicability is not established.
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Stable record: arkansas_code:legal_authorities:23-4-1207
Source file: gov.ar.code.title.23.odt
Pages: Not recorded – Not recorded
Passage SHA-256: 19134bc0c83d8a0284614142ac9451c155a919b07f773e97fcc7248bcdf4ce0c
Source location: content.xml paragraph 4993
Stored source content
23-4-1207. Formula — Adjustment of customer rates.
(a) Customer rates shall be adjusted in a formula rate review mechanism based on a comparison of the earned return rate to the target return rate.
(b) Adjustments of customer rates shall be calculated using the following formula:
(1) If the earned return rate is less than the target return rate minus five-tenths percent (0.5%), the formula rate review mechanism revenue level for the formula rate review test period shall be increased by an amount necessary to increase the earned return rate to the target return rate;
(2) If the earned return rate is greater than the target return rate plus five-tenths percent (0.5%), the formula rate review mechanism revenue level for the formula rate review test period shall be decreased by an amount necessary to decrease the earned return rate to the target return rate; or
(3) If the earned return rate is less than or equal to the target return rate plus five-tenths percent (0.5%) and greater than or equal to the target return rate minus five-tenths percent (0.5%), the formula rate review mechanism revenue level for the formula rate review test period shall not change or be adjusted.
(c) If a formula rate review test period utilizes projected data under § 23-4-406 or a projected year, rates shall be adjusted by the netting of historical year differences under § 23-4-1206.
(d)(1) The total change in the formula rate review mechanism revenue level shall be allocated to each applicable rate schedule based on an equal percentage of the base rate revenue used in the development of rates in the Arkansas Public Service Commission's order addressing the public utility's last application for a general change in rates and charges.
(2) The total amount of a revenue increase or decrease for each rate class shall not exceed four percent (4%) of each rate class's revenue for the twelve (12) calendar months preceding the formula rate review test period.
(e) Only one (1) rate review adjustment shall occur during any period of three hundred sixty-five (365) days.
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Arkansas Code — all titles (historical 2020) · legal_authorities
23-4-1206. Formula rate review — Required information.
(a) A formula rate review mechanism approved by the Arkansas Public Service Commission shall specify the minimum information required with each annual rate review filing.
(b) Annual formula rate review filings under an approved formula rate review mechanism shall be developed using the formula rate review test period designated by the public utility under § 23-4-1205(a)(2).
(c) Annual formula rate review filings shall be prepared consistent with the commission's order on the public utility's application for a general change in rates and charges.
(d) Any costs disallowed by the commission in its order on the public utility's application for a general change in rates and charges shall not be eligible for recovery under a formula rate review mechanism.
(e)(1) If a formula rate review test period utilizes projected data under § 23-4-406 or a projected year, rate changes under § 23-4-1207 shall include an adjustment to net any differences between the prior formula rate review test period change in revenue and the actual historical year change in revenue for that same year.
(2) A public utility shall report any differences between the prior formula rate review test period change in revenue and the historical year change in revenue for the same year.
(3) Netting shall not begin until a public utility has accumulated a full twelve (12) months of a historical year to prepare a report.
(f) The public utility shall submit documentation fully supporting all calculations and adjustments as required by the rules of the commission.
(g) A public utility or any other party to the proceeding subject to the commission's rules and procedures may propose additional adjustments that are based on factors unique to the pu
Source: Arkansas Code — historical release 78 (November 6, 2020) · 23-4-1206
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 23-4-1206. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
23-4-406. Test periods to justify new rates.
For the purpose of justifying the reasonableness of a proposed new rate schedule, a utility may utilize either a historical test period of twelve (12) consecutive calendar months or a forward-looking test period of twelve (12) consecutive calendar months consisting of six (6) months of actual historical data derived from the books and records of the utility and six (6) months of projected data which together shall be the period or test year upon which fair and reasonable rates shall be determined by the Arkansas Public Service Commission. However, the commission shall also permit adjustments to any test year so utilized to reflect the effects on an annualized basis of any and all changes in circumstances which may occur within twelve (12) months after the end of the test year where such changes are both reasonably known and measurable.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 23-4-406
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 23-4-406. This identifies an authority to review, not proof of applicability.