Section 57.124. Special cost recovery

(a) When a qualified project is completed, a utility may institute a rider under 66 Pa.C.S. § 1307 (relating to sliding scale of rates; adjustments) to surcharge base rates for more timely recovery of associate costs until a time when the costs are reflected in base rates. To be eligible for this cost recovery mechanism, the utility shall comply with the following requirements:

(1) The rider surcharge shall be calculated to recover the annual level of revenue required to support the project based upon depreciation and rate of return findings in the utility’s most recently litigated rate proceeding. The revenue requirement calculation shall include the net effect of anticipated operation and maintenance expense changes, exclusive of fuel expense, resulting from the project.

(2) The rider shall take the form of a percentage multiplier applied to base rates which shall be recomputed at least once every 12 months.

(3) In the course of each general rate proceeding, projected revenues from the rider shall be rolled into base rates.

(4) The rider may be initiated or adjusted upon 30-days notice to the Commission for either recognition of additional qualified projects or annual recomputation of the surcharge.

(b) Qualified projects involving existing coal-fired units which utilize Commonwealth-mined coal for more than half of the total fuel requirements may be included in the rate base of the utility up to 50% of the undepreciated original cost of the unit involved where the project has not been completed but is expected to be completed within 2 years from the end of the test year claimed in a general rate proceeding under 66 Pa.C.S. § 1308 (relating to voluntary changes in rates).

Notation

Cross References

This section cited in 52 Pa. Code § 57.123a (relating to project commencement and qualification); and 52 Pa. Code § 57.125 (relating to refunds).