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264982 WHI7E - GTV CLERK � PINK - FINANCE GITY OF SAINT PALTL Council ��.� CANARY - DEPARTMENT BLUE� - I�AYOR File NO. ! - ` � Council Resolution t Presented By Referred To Committee: Date Out of Committee By Date RESOLVED, �hat at the public hearing before the Minnesota Public 5ervice Commission, commencing on February 12, 1975, Thomas J. Stearns, Assistant City Attorney, is authorized and directed to present and explain the proposed city changes to the rules and regulations relative to changes in rates for gas and electric regulation of the Minnesota Public Service Commission, a copy of which changes are attached hereto, and, in so making said presentation, is authorized to act on behalf of the City of Saint Paul. ■..� COUIVCILMEIV Requested by Department of: Yeas Nays Christensen Hozza In Favor Levine Syl�s�er —��- Against BY 4edese.'s` President Hunt �E8 � � ��J Form Approve. . ity Atto ney Adopted by Council: Date Certified e by Coun ' S retary , „•B� ~ Appro Mayor: Date Approved by Mayor for S�ubmission to Council By By Ruau�EO �EB � 51975 � � � � � �� ry �� , ; . � - , � - � . � - � ; � . - � _ _ � . . z � � 1 , � . - r , ' Februarq 11, 1975 �:�r. �'i�ize �c::gni.er City l�i:t:o�ney � R.00r: 647, Ci ty i.i:311 '.`�. ��."_U.�.� i�`.T.?D.r'U'Uf:Fi . _ A'i 1 E:�i'17:ON: M°f. 'L1:i� _.�.s J. ^'.. ._:its � . De�ir Sir: � , • 'Ct1e l,i�y Cotzncil toc;:�y :_:,+��f;s�.:�:d fii.:xt �ha City Att��:-�1ey prep<�re a d.f_�?_.f-L- oi a rul_e o�- ��r�;;u7,afi:icn to he proposed to �he Pub].ic Se;.vt.ce � Cc�.:�-i�;��i on pea t��.��n��_b to �-:.�'�.�rtising in cannectir�n Gi�r�1 niatters � . b: _�.,,� h�4�:d `�y th� ��'�l�.c '.',�,.�rice Cor�rnission. , - � � Very tiulq you:rs, , , Ci L-y C]erk Ali 0:�cm , , . ' , , \ � ' ' . _ -. � , • _ , - _ , . .- 1 . , , : \ - . . . _ - - i r � { j � � � � ' , `�� q � r j � � � J� y 1� �` \ � ` H ��i" � r .�r:�� i -_'s 1 c �.te � a '� � (i _ 7.�.✓�':i w.� �.Y i�. �`4�? a ' . ♦ l ' ' PROF=OSt;D ��INN�SO'i'n :ULES f1?�D RLGLlL?�TIONS Rf,I�A`:�IVE `i'U CFIf�11;:�i�; IN P.�'1'I'FS F'O1: GAS I1.I�JD 1,LE,C'L'I:TC 1'.rGt11:�I�`.PION CHAPTER 11 I'SC �10 0. -- '�0� . NIII�Nr'SO`_I'11 PUBLIC S?;RVICI?, CU.�aNaISSION DEP�ZTMENT O�' PU}3LIC SERVlCE CHANGE IN R�TES PSC 400 llEFINITIO'��S For the p�irposes oF th�se rules, the following definitions shall apply: (a) "A,verage" means a thir_teen-moizth average o.r a simple average of b�ginning a.nd end of year data when data is not av�ilable to calculate a thirteen-month aver�ge. (b) "Average Prime Intetest P.ate" means th� daily average prime ratc of interest at. the largest bank in th� Ni.nth Federal Reserve Distric-t over the n�_riod for �•rhich the rate refu.nd is '�pplicabl_e. (c} "Capital Structure" means tlie toc�tl capitalization o.f the public utility as defined in Sc�ction 49� Subdivi_sion 2 oF the P�iinnesota Public Util.ities Act and including short-term securities. (d) "E�r.ibedcled Cost" of long-�errn debt or preferred sfor.k means the average cost for a11 outstandinq iss�es of debt or. pre:�=c•x-red st-o�k �t a giv�n dat:e. ��'� ��£'_12�::i_'c�.� ��c�tr' �:t1��I1C�E'.�� 1T1F`i111:� �lI! UV'�:C%�1�_1_ C:1"1<�I1CJc �.Tl C"r.l"�L:i fo.r whicli -th� cletezr�inaL-ion of th.E� utility ' s gra:;s revenue r.equir�ments is necc�ssary in assessing th� appropriateness o� the cnange in rztes. (f) "Gross P.ev�nue Conversi_on Factor" mcans the incremental am.ount of g-ross revenue required to generatc� an additional dollar of operatinc� income. (�T) "Jurisdictional" mea.ns t�ie util.ity ' s total_ Minnesota operations. (h) "M�.scell��zneous I;ate Change" means a change in any compensation, charc�e, fare, toll_ , tariff , renta7.� or classif ication, de,nanded, observed, charq�d, or collected for ��ny serv.i.r.n and a.ny rules, regu]_ations, / ,� , \ � t �('=1 { �i y � �' �'� '1 ti �� f e� . .._ � ` i:vlY aj ! :,l k} � � � �M� �� p�:actices , or con,rac ts a:EL�c t..i.ng any sticli comp^n�at�_on, cli��-ge, far.e, toll , rent:al, tar:i_i:f , or classificat�.on f_or. ��liicli a detc�rrnination of thc utili.ty' s gr.oss r.ev�nue requi.relnents is not necessary in dc�te.rmininc� .the reason- ablcness oi a p,roposed change in rates . �t) "f-Iost Recent F'iscal Yea-r" is the utility ' s prior fiscal ye�ir unless notice of c�zange in rates is filed with tlie �?ublic Servic:e Commission �aithin the last th.ree mariths of the cu-rrenL- �isc.al year in which case the most r.ecent fiscal year is deemed to be the current fiscal year. • (j ) "Projected Fiscal Year" is the fiscal year immediately follo�aing the rnost recent fiscal year. (}�) "Proposed" meatis r.ompany propos�d. (1) "Rate" is as defined in SecL-ion l, Subdivision 5, _ Minnesota Public Ut.ili.ties �ct. � (m) "Short-ter.m debt" means short-terrn security as defined in PSC 370. (n) "Test Year" is the t��elve-month per:i.od cho�en by the utilit.y for the purpose of eypressing its need for a change in rates. " (o) "Uti.lity" i.s def_ined as in Section l, Subdivision 4 of. the Mi.nnesota Public Utilities P,ct. (r,) "UL�lity Classification" shall.. be determined by the Minnesota Uniform System of �ccounts, PSC 351; hocvever , � t.he basi.s of classification shall be -tot�il company gross I�(:VE,I7UE'_`; 1%'..t-fl�:i t1z:P. T'ISI1�7�'-:�C�f:�.i J111":(.SCi"LCf=7_(7I�:11. Y'C:`VE""!U';'1�. (�) "tiVeigi�L-F�d Cost oi Capi.�al" is the �to-�.al r.ast of capital determinea by ��iglzting the r.osL of each componen� o� the capital structure by the ra�tio of the capital repr�sen:_ed by th�t cor.?ponent ta total capital. \ � \ i?�:��`� n i.,�p � � ' ' !� a;� � +; � � i� y�� ;3 �,�.:�� ; -� ; .. .� . �� =a�� ji �.�� I'SC 4 O1. Rr�'I'f, CFI1�!tiTGE PROCi;DURES (a) NoL-.ice oL ch�znge in raLes. n u!�i1��ty fi.ling Lor a ch�nge in r_ates sh�l.l_ s�-r.ve . no��_ce -�o the Comrnis sion . at lea5� thirty days pri.or to the proposed c�ff.ective dat:� of the moc�ified ra�es. Such notic� stiall iticltidc� thc� ite�ns pr_escrib�d below for: (l) General raze changes: (aa) Proposal for change in r.ates as prescribed in PSC �0?_. (bb) Modified rates as prescribed in PSC 403. (cc) Expert opinions and supporting exliibits as presczibed in PSC 404. . (dd) Supplemental inforriation �equirements as prescribed i.n YSC 405. • (ee) Statement i.ndic�ting the methocl �f .znsuring the payrn�nt of ref.unds as prescribed in 401 �b) • (2) P-Zi_scel_laii�ous r_ate changes: (aa) Petition for change in rates as prescrib�d by PSC 402. (bb) Substantiating documents and e�hibits supporfi.ing the chanqe requested. (cr.) P-lodif_i.ed r��ces as p��escribed �n PSC 403. (�r�ia� � �.7' . , � ) tatE_rn�z�t ii , i ca�.inq t_h€ nz��f:hod oz. iii.�uring -the p_11�:nent= o� r.e:Eunds as presr_:c°iU�d in 4 Ul (b) . (b) Merhods �.nd procedures for refunding. (1) In the event tha-t a hearing is ordered by the Commission as a result of a change in x��p, a�d proposed rates are susper�ded, the Commission shall allaw the utility to place suspend�d rates into effect subject to reftznd providing that the payment of refunds for any por�ion o� rates determined to be unreasonabl� is insured uncler either of -the following methods. � , .., , 1 � �� , � r IJ� n� � �,^ g - _ �_ r �� ;� ' =a� � ,j's Js1 � ' � � ' 11 � LJ 4 , - t?:�� ';,�'L� � � �;�i:j � , . . `✓ ' (aa) Fi.:Le ��i th t:he C'omrni.s sion an unqtz.,l if ied agr��,-�?�:�nt, siyned ay an a«thor:iied oFiicia_l_ of tYie Compariy, to rc>funcl any portion of suspencied rate:� de�errnin.ed to U�� unr_�asonable. (bu) Fi1e wiY_�i the Coru�n:i.ssi.on �i bonci, si.gnecl by an at.tthor�_zed. offir.ial o:� the cc�mpa?7y, in an . an;oui7t �and wi_�th su:reties approvEd by the C Oi?1II1 L J a_l C)T]• (?_) T�ny proposc�d rat�s c.etermirled by the Com�n�ssio�i �.o b� unreasonaUle shall be refunr'aed �o cus��.omers or c.redi_-ted to cLis torners accounts �-�ith:in 45 days from tlie eLfer_t_�ve da-te of -L-he Comrnissi�i� order and de�termined in a manner_ prescribed by the Co:nmission, inc]_uding interes�t, compttted from the effective date of the proposrd rates through the date of re�und o.r_ credit �.t� t.he averacJe prime interest r_ate. (r) proccdu.res suk�sequent to no��ice: (1) �fter a r.evie�a of th<� not.�.ce, the Cornmiss�on s'r,all make a detern:ina�c_io.n tlla-� the not.ic� fo-r a chanc,re in rates is complete in all mater.i.al. r_ esp:�cts arid is in accor.c�ance ��;ith PSC 400-QOS. (21 1� notice of_ a general chan�e in r_aL-es u�hich is no�c comple�ce in al.l rnate-ria:t _respec��.s as preacrined by PSC 400-405 sha11 not constitute a val.id notice and shall be re�turne.� �to tl-ie uti7_ity with a stat�inent as to the deficicncie:� ga_vir±g the u-�ility an oppor- t:uni-cy to serv�� an <�n��nd:d noti.ce. (�) :l_;� a not-i_ce i s co�_r.}�,:�_��i,e ir� a_ll. ��.��r�r�_��_� rc��:��.�s . a�. ��rc�sc.r,ib<�d b}� PSC �'�00-�r�05, �:y,� C.a:,:T�l:i.:,s:�or� s�i«1.1 fol]_o�a the pr.oc:�du?.�r_s c;u�:.lin��d iii th� :E:ul�s oi Practicc� PSC 500-5:L7. . (4 ) U�'�on acce;?t�ance_ o� the ilotice ar.d f-rie determiri:�F�ior� that a hearin.g s�ia11 l�e conducted, buL- b°foxe the proposed c�ff�ctive date of the iz.odified r�.te sched- ules, t-.h� C�mrtliss_ion m,��y, by �vri.tten directive, � erpl_airing the reasons therefor , si.gzled by the author_�ty of: the Comm:i.ssion, ancl served upon the ut.ility, suspend the op��ration of �.71e uti.1_ity' s modified r_ate schedu.les but not for� a long�r p,�riod ` � ` z:,a,°m , . - 5 - � K� � �� . � ,. � � �f.,: � v�. . . , � t� . �� than ninety days beyond the tim� when the modified rates would other_wise go into ef�ect unless the Commission shall find that a longer time will be requirec�, in which case the Commission may further extend the period for not to exceed a total of nine months. (5) In the event tha�t evidence is offered in a heari_ng, which has been oraered by the Commission for the purpose of determining the reasonableness of proposed rates, such evid.ence which in the opinion of the Commission diifers froi-n informatior� included in the notice �.s defined in P5C 401 (a) wi11 be received ' only upon good cause shown. . PSC 4 C2 PROPOSI�L FOR CHANGE IN RATES Tne utility' s proposal for a ch�nge �in. rates shall. suminarize the notice of change in rates and shall include the following information: ' (a) Name, address, ar�d telephorie number of_ the utility without abb_r�viation and �he name anc� address and telephone number of the attorney for the utility, i£ there be one. (b) Date of filing and date madified rates are effec�.�;ve. (c) Description and purpose o-L- the change in rates requested. (d) Effect of the change in rates expressed in gross revenue dollars and as a percentage of test year gross revenue if appropriate. {e) S ic;,�a-t:�ir�e and t_�_ �.lc� o t" cc�rn�;:{r�y of_�-:i_r_�r. autlz<�:��_zin, thc� - proposal� � P5C 403 P-iODIF'IED R�TES (a) Atl proposed changes in rates sha7.l be sho��n by £iling new payes to the rate book previously fi]_ed with the Comrnission and by identifying those pac�es whirh were not changed. (b) Lach new page of the rate book shal_1 contain the infor- mation required for each page o� the ra-te hook and shall be in a for_mat consister.t with the ctlrrently filed rat� book. ln addition, each new page shall contain the � revision number and the pagf, number of the revisc�d page. • \ ( _ 6 - ( � �..�.,. �, a � . �� flA � �" '��.� . � ��,�� b� �� PSC 4 04_7'EST1I�10NY AND SUPPORTING EXHIBITS (a) Expert opini.ons and supporting e:�hibi-L-s shall include written statements, in question and answer format, together with supporting exhibits of Company personne]. and other expert witnesses as deerned appropriate by the company in s�xpport of the proposal. (b) �.t a minimum, expert opinions shall include a statement ' by the chief executive ofticer or o��he.r designa-ted company off icial in support of the proposal. (c) Suppor-t:i.ng exhibits may be the same as those prescri.bed by PSC 405 or, in lieu thereof , shall make reference to . the suppl.c�mental information requirements prescribed in PSC 405. PSC 405 SUPPLENlENTAL INFO��iATION REQUIREP�ENTS � The following info.rmation shall be suppl.ied as a part of the u�t il_ity's notice of a change in rates. Info��rnat 'ion requireme;�ts (a) , (b) {1) , (c) (1) , (d) (1) , and (e) (1) as defined herei_n shall b� supplied by al1 gas and electric u'cilities and all other sup- ��I_�nental information requi.r_ements shall be supplied tiahere applicable to thc utility. I11u�trative forms for f iling this information sha�J.l be available from the Mirinesota .Department of Publzc Service. (a) A financial summary scheduling shall be �iled showing: (1) The company' s proposed rate basE, operating income, and overall r_ate of return for the test year. � (?_) The r.a].ctila-t.ion of incorne .r_ecxui.rements, income C3C'_('? C'1.Gi�C�,'r �?T.;C.�i Y'��il'�1i_UP ZE`Cyi7.:tCLi1:E'_ii�S f0:� �r12 tE'.SG �'�'c;". (3) TIi�, acL-ua� uizadjustecl averagc rat.e base con:>i_sti_r�g of the same components as the pr�posed rate base, unadjusted operati.nq income, and an overall rate of return for. the m�st recent fiscal year. (4) The pzojectc�d unaajusred averate rate base co.ri-- sist_ing of trie same components as tYie proposed raL-�: base, unadjusted operating .i_ncome under prc�seni� ra�es , ancl ove.r.al1 rate oL return for the projec�ed fiscal year. � \ � �'' � F � �� } `�.;� � �� — 7 — ��.� a�. � a.� n� . f;t' � s � , � �J a� � �d�3� (b) Ratn base schedules: . (1) A rate base summar_y schedule showing the company proposed rate base, the unadjusted average rate base for the most recent fisc��l year and the pro- jected fiscal year by major rate base component such as plant in serviC�, construc-ti.on work. in ' pr_agress, and plan� hetd :Ear future use: � The � totals for this schedule shall �agree with the rate � base amounts in�luded in the tinancial summary. (2) A comparison of total company �.nd T�Zinnesota jur_is- dictional rate base amounts by detailed rate base componen�t shawing: (aa) Total company and the proposed jurisdictional rate base amounts for the test year� including the adjustments recognized iri determi.ning the proposed rate base fr.am unadjusted juris- dictional amoulits. � (bb) The u.nadjus-ted average total company and jurisdic�tional rate bas� amounts for the most recent fiscal year. and the projected f iscal year_ . - (3) .t�djustm�nt schedules showing the titte, purpose and description, and -the summary calCUlations of each adjustment to the proposed unadjusted juris- dictional. rate base. (4) A sum.mary by rate base component of the assumptians made and the approaches u�ed in project-inq the average rate base for the projec�tc�d fiscal year. (J) A ::L11�T;%:.r_�� i`y Zrl.2iE� I?�i.;E� GC)'!?�OT)r��?"IE�" Of. Lt7�' �U�;"15�?.'_�:��_��12c?.2 al.toc�xtior� i�xc�o.rs use�� ii� al .locat.i_ric� tota:L co�r:pany rate bas� ainvunts to rii_nnesota jur.-i.sdiction. �Chis summary shall be supportc�d by a scheciule showing for each allocation f_ac-tor the total company and jurisdic-tional statistics used in determininq tlze proposed rate base for tiie tes� year ana the P�iinnesota jurisictional rate base for the most recent fiscal year and the projected f iscal year. � i ( -.:, -- 8 - �� ;' j ' €:�''�� i -n � � e� � �� pl . • � ��j ;.1 !,l ;� � �� !i , . , J . ti� .. � � ..o• .._. . � {c) Op:�r�tl�ing inc:om^ sclicdul:�s sha11. b� pr_c�v_i.ded: (i) 1� s�irnm��r.y schc�alzle o� jurisdir.tion�l aperating � inca.ie s�a l:e:nen�-s u;;i=i_�h t�ef 1er.f: company propos�d t_cst yeaa• op�:r�.:.ing in��ora�, and un-zcljusted juris- d�_r. cional op��Y:ati..�g incorae for �.he rno:�t rerent f_iscal � ye�;.r_ and t:he projectecl fiscal yGar calc:�alai�cc�. usincJ �r�sent rates: (2) 1� sr_h�du1: sho`aing the compa��ision oi tatal co;npan�� anu unzdjusted j��r. isd�cti.anal one.r_at.incJ inco�ne s�ate-- raent ior -�he test year, _ f�r the mvst rer.en-t: fiscal year an;�. th� projcc�t,�d fiscal yeur. Tn ac�iclition, the sched�]_e shal"1 provici� the pronosed adjusLments to jur:isdictional opc�ratirig in�ome for the test. year t�ge�tYier with the proposed operatirig income statemen�t. (3) I� schedule sho,aing the cornputation of federal and sta-te �nco:ne taxes i.ncludi.ng a recon.c:iliation of _ the incom�� -tax liability with the �incomc -tax e�p�nse repor.tc�cl o��. the ap;��ra�:tng ir�corae statcmen�s for the test; year anc� -the n;ost recent :Eisc�il year and th� p.rojecf�ed fiscal year. (4 ) A schedulE� summ_:r.i_zing taxes other -�h��.n inco�me ta�:�� report.ed on i.lie op�ra�ing izzcome sta�cments for the test y��ar �.nc� t,he most r_eceizt Fi�cal yeax �znd -the projectc,a �Eiscal yea:r . (5) 11 sumrnary sch;dul� o:E adjustment:s to juriscsictional test year opei-atinc� incorae and detailed schedvles for each adjustment provi.di,ng an �djustment ti_t1 �, . pu:rpos�� and c�ies�ription of the ad just.mezlt: an� su��mary r_alcula�.ion:�e �� .T> ;C�1�;:�{li._�..^ SlL�lliT_�lI"1-.i�:l_T1C_J 'C�1!-' �li�i.i:i��'C;�1 11:�t�C� c121:: "��1C' c"1SSlliil��:1C�T'iS lll�.1C�< :i_Tl �JI.O��i; i:1T](� LctCit G1_E'iT1Erit OT op�ratizig incorne for the projecced Eiscai. yc��.r. (7) 1� .schedule prov:�ding, by operat:itiq i_ncome c�1.en:ent , the iacto.r. or Ca�tors used in allocai:ing total. company op�rati�g incorne to P�inneso-ta juris- d_�ction. Thi.s scl-icclul.e shall b� suppor��d k�y a scliedule �ohich set.� for.th the stai.istics us�d by allocation f_ac to.r_ :i n t.he det.ermination oL- the � jurisdictional operati_ng i.ncom� statements far the test yea:r anct :Eo.r the raos� t�C:E'llt £.iscal year and the pro.j er ted �i sr,a 1 year. \ � %� i `i ,_�, ��,,-� -�s� . - 9 - � a?� �', ' '{ ' ? ;^y �j � .� , , i''. �' u :, <t � i .: � . �.�4;,� d � � �; � ? :� _ . _ • (d) Ratc� aL- return/co:�t o� c<<pit.al schc�dulc�s: (1) F� r�-t.e of r.eturn/cost of- capit_al summar.y scliedule slio�-airzq i.hc� cal.culati.on of tht� �3eighted cost oi c��pitul. t�.;inc� t.hE: con:p-in�� prorc�sed r.apiial str_t�cture �.nd tr�e avt,r.�zge caZ�ita1 s�ruct.ure:s ior thE� most recc�zit fiscal year azld t.hc� �>rojected fiscal. year. (?_) Suppo.r_ �inc� schedulc:� sho�aing t;le calcul�.�tion of_ �:he embcddid cvst c� 1or��-t�rm dc�b� ��.zzd pr..eferrc?d stor.k at ttie E�n.d of th�u moCt: r.eceni= .fis�.al year arid -tlle pro j er.�ed f_iscal �rear . (e) Rate strucLure and desiqn info.rmat:ion: • (1_) A slznunary r.o::;parison of test year`� aperaUing rF�venue under present and proposed rates by customer class of service showing the di.ffer. ence in revenue and the p;.rcen�cac�e r.hang�. (z) .i� det�.iled comParison of test y�aL opera�ing .revenue under. preset,t and praposeci rates b�� -cyp° of cYi:�.rc�e such as r�linin�u�n, dernand, en^rgy by k>lock, gross � receipts, auf�o-n�tic ad justmen-t.s, e-cc. �ai�thin each rate scPiedul,e and wit.hiii each customer class of se-rvic,e. •� (f) Ot�her supplem�lzt:al informa-t�i.on: . (1) Sctiedule sha��ing �he de�,%elopment oL the el.ross � revenue conv�r_ sion fac tor . (?.) 1lnnual repor t to stoc}clzolders or mn��.lb��r s inc 1 uc�ing ' f_i_nai.c i.�z 1 .,�at.f_�!neizts ai?c1 sf:a�.:i_s t_�c.:::l ;u1�plc�z��e�1'c�; �.., :- �:.• . . - - � . ,. . , . 1 0�. s:. I:��,`;�. 1'��.i_'T1 I_ Lc C;a.1.._ �'t'cil_',. l i i._ 1' � 1._I.�:I7 .LS I1<)l: �il1C�:L?�c.�.� }�Y" "c1I1 1-I�.C,�.c:�i�r•71�!f'1�'� }�ll.��--LC ��:C`Oi?.?1i::�?1t`_ r 17.17�'�11U:Li�CCl �:Llici?")C::L�l � �.�'t_�1"i-�'i?li'ilt�:i t`7:1_.�.�. :�"cl'C7_�if:�' t�1].:i f.iling rF�qu_i.i-t�m�r�t. (3) P.EA Form 7 - Finaricia_I. and Stati.stica:L Report For_ tl�ie last month of -L-;�e most recent fisca.l year. . 'i'his filing requi.rment is ��p�l_ica��le to coopera�ives only. (4) R�.A �'orm 7n - Annual Supplement to F.inanci.al. and S��iti.stical �',epar�. Tliis filirig req>>.irement is applicaLl_e to cooperatives only. � (5) RE71 Fo.rm 3?_5 - Financial Forec:ast. This fili.ng requi_r_ ,�merl� is appli.cable to R�11 coo��r�Lives or�J_y. — 10 — � . � n s ,:� . � ��'.�a' � a '; � %'� "�i _ � �.�� .� a� � ��:: d 2 • � P�C �Q6 11DDI`.PTOI�;?1L II��FOrc�i�1`I':COL1 R}'��uF;STS Upon rc.vi.ew o� � utilit.y ' s noti_c:E of a cY��:i�c;e .'�n ra-�es or subsE�quent theret.o, th` Comi�ti_ssion may r.ec{ttest ��. t�'c:�1 ity �C.o prov�id�� a� triin tni.r_ ty days or r_equest a_dd:ic.i.or�a]_ inl=orn�ati_on to supplernent tY�� :i_nform��tion p.�escr_ ibed by I>SC 405. � ' _ PROPOS ED M TNNESOTA RULES AND REGULATIUI�lS ; � a� � U o� ' � RELATIVE �i'O CTiANGE IN R�1TES � � FOR GAS AND �LECTRIC REGULPTION CHAPTER 11 PSC 400 - 40h MINNESOTA PUBLIC SERVICE COMMISSION DEPARTMENT OF PUBLIC SERVICE CHANGE IN RATES PSC 400-406 (General) In reviewing the above Public Ser.�vice Commission rules and regulations, the City of Sair�t Paul has undertaken to have the documents submitted by the public utilities in a rate filing clarified t� include more than one test year. This suggestion is based upon the experience the City of Saint Paul has had w.ith the Northern States Power Company' s various rate hearings before a hearing examiner a�pointed by the St . Paul Ci.ty Council during the year.s from 19F�9 to 1974. In those years a historical origixial cost test year has been offered as part of the evidenc_e and accepted by both the hearing examiner and tl-�� St� Paul City �ouncil as t.he proper year from whicn an increase can be yranted with specificity. Having a hisi.orical. �est year outlined in the earlier stages �t th�� hearing saves the delayed effort by the public util�,ties to incarporate it into what it calls its rebuttal case. Assuming that the City' s recommendation is met with approval by the Pt�blic Service Cominission, the : City of Saint Paul would then. recommend in the s�ecific areas where it has submitted proposals a� well as those where it has not that ariy reference to a test year be made "test years" . It hasn' t undertaken to rewrate all the rules and regulations so as to provide plural forms fcr -those years whenever they appear in the proposed rules and regulations . ' -1- . � ., . The City of Saint Paul suggests that the rules and regulations be changed to read as follows ; PSC 400. Definitions. " (n) ' Test Year' is the twelve-month period during which the costs, investments and revenues of the utility are adjusted for the purpose of providing a base in determining the needs of the utility £or i additional revenue. One or more such years may be selected in expressing the utility' s needs, but no � matter which period or periods are submitted, zhere � shall be a recitation of the elements involved in � the needs as regards a historical test year. " ' REASON: Multiple test years are no�t unusual. � Note: Re Orange and Rockland Utilities, 1973, D]Y PSC , 98 PUR 3d 335, 337, where an electric company filed data for three test years, a 1971 historical calendar year, a 1972 partially forecasted test year, and a 1973 fully fore- casted test year. It is submitted by the City of Saint Paul that no matter which test year the utility may prefer, at least a historical test year should be presented to the Public Service Commission so the full � effect of a final determination on the rates in existence is shown to the consumers who will be affected by the decision. Unfortunately, in using the future test year, the utility may very �,aell acquire a much higher gross revenue than the consumers ever are made aware of. For � _2_ ,, . . , example, it should be noted in the filing of the NSP - Company recently with the Minnesota Public Service Commission that it used a base of 1975 projected revenues. These amount�d to 10% over the actual revenues received during 1974. Thus, when the re- quested increase of Northern States Power Company is calculated with respect to the revenue actually re- ceived in 1974, the requested increase comes to 27 .72% rather than the 16/ which is publicized. -3- The City of Saint Paul suggests that the rules and regulations be changed to read as follows: PSC 401. Rate Change Procedures. " (c) Procedures subsequent to notice: (1) After a review of the notice, the Commission shall solicit comments from municipalities in the service area on the sufficiency of the notice and the substantiating documents. Such comments sh�l.l recite in particular any material which is lacking fxom the filing which is required by the statute pertaining to utility regulation. Upon an examination of the notice and the comments, the Commission shal�. make a determination that the notice for a change in rates is complete in all rnaterial respects, if such be the case, and is in accordance with PSC 400-405. " REASON: The City of Saint Paul submits that the Commission � should take advantage of any observations on the sufficiency of the utility' s notice or substantiating documents which are made by parties in the service area. Such information can be very helpful and may well be based upon �xperience with the utility that is not yet available to the Commission. . -4- The City of Saint Paul suggests that the rules and regulations be changed to read as follows : PSC 402 . Proposal for Chan e in Rates . " (d) Effect of the change in rates expressed in gross revenue dollars and as a percentage of the test years ' gross revenue, including that of the historical test years. " REASON: In view of electrical energy conver�ation, inflation, and specified utility service areas in the state law, the City of Saint Paul submits that electrical growtli is a very speculative matter for individual ccmpanies . Since what the utili.ty normally requests of the Public Service Commission is a change in revenue, it seems reasonable that it sh�uld be required to shew the percentage increase that its rectuest is over a historical test year. This was brought out in the earlier proposals of the City of Saint Paul, and merely constitutes a reiteration of i.he City' s emphasis on complete disclosure by the public utility. -5- The City of Saint Paul suggests that the rules and regulations be changed to read as follows : PSC 405 . Supplemental Information Requirements . " (a) A financial summary scheduling shall be filed showing : (1) The Company ' s proposed rate base, including an original cost historical test year rate base, operating incomes for the years in- volved, and overall rate of return for original cost historical test year, as well as any other type of rate base during any other test year proposed by the Com- pany. " REASON: The City of Saint Paul submits that all the in- formation necessary to consider a rate base and � rate of return should be supplied by the utility at the time of filing its request for a change in rates . Since there is a tendency for utilities to file a trended rate base, although the state law r�quires a consideration of the ariginal cost rate base, the rate of return which is normally adjusted to different types of rate bases should be included in the filing . -6- The City of Saint Paul suggests that the rules and regulations be changed to read as foJ_lows ; PSC 405. Supplemental Information Requests . " (b) Rate base schedules . (1) A rate base summary schedule showing the Company proposed rate base, the adjusted and unadjusted average rate base for the most re- cent fiscal year, and the projected fiscal year by major rate base components, such as plant in service, construction work in progress, and plant held for future use. Insofar as the unadjusted totals for this schedule are con- cerned, they shall agree vazth the rate base amounts includecl in the financia.l summary. " REASON: Once more, the C.ity of Saint Paul recommends that the utility reveal hoth its adjusted test year summaries as weJ_ 1 as the unadjusted average rate base for fiscal years . The changes suggested are merely to keep the matter clarif_ied with respect to the Public Service Commission' s eventual determination and the consumers who are affected very closely by the results. -7- �' � PIZOPOS L:D M II�T�rL;SOT11 R�(?LES 1Nll REGUL�7�T:LniTS ��. ' RFL[�3.TIVI� TO CE=Lz�i1GL IN RATPS � �� I'OR GAS A��D FI�ECTRIC F�GULAT70N y9� CFiAPTI,R _ll PSC 400 - 406 r9INNESO`1'A PUF3LIC SLRV�CE C0�1�;ISSIOI:3 DEPl�R li�'I I;L`1T Ol? PtJP,L 1C S ERV ICE CFT[�rdGF IN 12�1TES PSC 40U-�'�06 (Ge?�eral) In reviewing th� a�ove Pub1a_c Service Co�runissiozz r_ules ancl regulations, the City of Saint Pa.ul has undertaken to l�ave the documents subraitted by -tne public utilities in a ra-te fi1�_nc�; cl_arified to include more than one test year. This sugg�sti_on is based upon the experience �he City of Saint Paul has had with the iJori=hern States Power Company' s various rate hea�ings be:Eare a hearing e�aminer appointed by the St. Paul City Council. dur_ing the years fr�m 196g to 1974. In those ��ear_s a historical origin�zl cost te:�t year has been of_f�red as part of t.lze evid.ence and. accepted by l�oth the hcaring examiner anc� the St. Paul Ci�.y Councit as the proper year. from which an increase caz�i be gianted wi��h specif_icity. Having a his-torica7_ tes t. year Ola"�,11T1Ud i.n tile earlier stac�es of the hearing save� the dnlayed effort by the ptiblic util.itiea t.o incorporate it J_.TltO wliat it calls its rebuttal cz:�e. Assuming that the City' s recommendation is met with ap.��roval by the Pub7_ic S°:cvice Co;nmission, the City of Saint Paul would the�� reco�nmend in the sr�erific areas where it has submitted ��roposals as we7__l as those �,7?�cre �_t h.as not l-hz-� any refc�r.c;nce to a te.>t year. lhe . , _ . , , ��. . , �. � _ , T?�C1CJl�.'. l::-�� °cti.�.`-.5�� . _rt_ 1._�...:'>ll l. �i1i�.(=.�_'.Y��t. etrE_'i_1 �_.:.—? X �_�:�7_'1di.v c! _1 � " " '. - . • , -- c:�_, rt, � ��s _��-� r:�n-��._t_:a ��o��s :_� ��; ��c ��rov-�- , - �� .r��. fc�rW.�<; - . �, . ._ _ . . .. ic�r ct,U.,`: y�:<,.ls t7�.l�:i.;,VE�.� �11e�y �ati�ti, _=1i: ir�. t_;"):' ��1"C�.�USP_."a ru7_es anc� regul.� t:ic;.is o -1- : . ' � ' � Th� Cityo uf Saint Paul suyyests tha-r the rules and regulations be changed to read as follov��:; : PSC 400. Definitions. " (n) ' Test Ycar' is the twelve-month period during which t:he costs, investments and revenues o:E thc u-tility are adjusted for the purpose of providing a base in deterrnining the needs oi the utility foL additional revenue. One or more such years may be selected in expressing the uti_lity' s needs, but no matter which period or periods are submitted, there shall be a recitation af i�he ele�nents invo].ved in the needs as regards a historical test year. " RTASON: Multiple test years are not unusual. Note: Re Orange and Rockland Utili�l:ies, 1973, NY PSC , 98 PUR 3d 335, 337, where an eler_tric comnany filed daLa for three test ye�rs, a 1971 historical ca.ler.d�zr year, a 1972 partially forecasted test year, and a 1_973 fully rore- casted test year, It is subrnitted by the City of Saint Paul ttiat no matLer V�hich test year the utility may prefer, at leas�t a historical_ test y�ar should be presented to the Public Service Commission so the fu]_1 eff_ect of a .fin�zl dct:c�:cm;.nal-.:ion ori tY?.e rat�s in e�:i.sten.c� . , , . . , _ 'Li, SI1J�:li1 'CO t.)�C �'-O(15'ial'CA�1"'.� ;.•;;i"t0 �" i-'- L b� �_�f_.'-?C�F�C't }��' t-.Y1'. decision4 Unf_ortunat�e]_��, i�1 1lsing the future test year, the utility may very we11 ac..quire a m�ac�l higher gross revenue than the consumers ever are made aware of. For -2- \ . , • . - exaruple, it should be noLed in the fiJ_ing of the NSP Company recentl_y wi_th the Minnesota Public Service Co�nmissi.on that it used a base of 1975 projected revenues. These amounted to 10% over the actual revenues received during 1974. Thus, when the re- quested increase of Nerthern States Power Company is calculated with respect to the revenue actually r.e- ceived in 1974, the requested i_ncrease comes to 27.72/ rather than the 16% which is �ublicized. -3- The City of Saint Paul suggests that the rules and regulations be changed to read as follows: PSC 401. Rate Change Procedures. " (c) Procedures subsequent to notice: (1) After a review of the notice, the Commission shall solicit comments from municipalities in the service area on the sufficiency of the notice and the substantiating documents. Such comments shall recite in particular any material which is lacking from the filing which is required by the statute pertaining to utility regulation. Upon an examination of the notice and the comments, � the Commission shall make a determination that the notice for a change in rates is complete in all material respects, if such be the case, and is in accordance with PSC 400-405. " REASON: The City of Saint Paul submits that the Commission should take advantage of any observations on the sufficiency of the utility' s notice or substantiating documents which are made by parties in the service area. Such information can be very helpful and may well be based upon experience with the utility that is not yet available to the Commission. -4- � � •r The City of Sai_nt Paul suggests that the rules and regulations be changed to read as follows : PSC 402 . Pro�osal for Change in Rates. " (d) Effect of the change in rates expressed in gross revenue dollars an� as a percentage of the test years ' gross revenue, including that of the historical test years. " REASON: In view of electrical energy conversation, inflation, and specified utility service areas in the state law, the City of Saint Paul submits that electrical growth is a very speculative matter for individual companies . Since what the utility normally requests of the Public Service Commission is a change in revenue, it seems reasonable that it shoul� be required to show the percentage increase that its request is over a historical test year. This was brought out in the earlier proposals of the City of Saint Paul, and merely constitutes a reiteration of the City' s emphasis on complete disclosure by the public utility. -5- � T��e Cit;y of Saint Paul suc�c�est:s that the rules and regulations be changed to read as follows : PSC 405 . Supp];emental InfoY'mation Requirements . " (a) A Financial sturLmary scheduling shall be Filed showing : (1) The Co��lpany' s proposed rate 'pase, including an oriyinal cost historical test year rat� base, operating incomcs for -the years in- volved, and overall rate of return for original cost historic�l test y�ar, as well as any other �type of rate base during any other test year. proposed by the Com- PanY• �� R�SOiJ: The City of Saint Paul stxbmits that. all the in- formation necessary to consider a rate base and rate of return should be supplied by t��e utility at the time of filing its request fo-r a change in rates. Since there is a �.endency for utilities ' to :Eile a trendea rate base, although the sta-�e law requires a consider_ation of th.e original cost rate base, the rate of .rei.urn which is norTr�ally adjusted to diffc.r<,n� typcs oF ra�e� bas�;.� shoal.d be included in thc filing . -6- � � The City of Saint Paul suggests that the rules and regulations be changed to read as .follows: PSC 405. Su�Plemental Information Requests. " (b) Rate base schedules. (1) A rate base summary schedule showing the Company proposed rate base, the adjusted and unadjusted average rate base for the most re- cent fiscal year, and the projected fiscal year by major rate base components, such as plant in service, construction work in progress, and plant held for future use. Insofar as the unadjusted totals for this schedule are con- cerned, they shall agree w�th the rate base amounts included in the financial summary. " R£�SON: Once more, the City of Saint Paul recommends that the utility reveal both its adjusted test yea.r summaries as we11 as the unadjusted average rate base for fiscal years. The cYianges suggested are merely to keep the matter clarzfied witli respect to the Publzc Service Conunission' s eventual determination and the consumers who are affected very closely by the results. . -7-