(1)
Coverage. Standards for ratemaking shall apply to all
rate-regulated utilities in the state of Iowa. The board may, by rule or by
order in specific cases, exempt a utility or class of utilities from any or all
ratemaking standards. The standards are recommended to all service-regulated
utilities in this jurisdiction.
(2)
Cost of service. Rates charged by an electric utility for
providing electric service to each class of electric consumers shall be
designed, to the maximum extent practicable, to reasonably reflect the costs of
providing electric service to the class. The methods used to determine class
costs of service shall to the maximum extent practical permit identification of
differences in cost-incurrence, for each class of electric consumers,
attributable to daily and seasonal time of use of service, and permit
identification of differences in cost-incurrence attributable to differences in
demand, energy, and customer components of cost.
The design of rates should reasonably approximate a pricing
methodology for any individual utility that would reflect the price system that
would exist in a competitive market environment. For purposes of determining
revenue requirements among customer classes, embedded costs shall be preferred.
For purposes of determining rate designs within customer classes, long-run
marginal cost approaches are preferred although embedded cost approaches may be
considered reasonable.
Nothing in this rule shall authorize or require the recovery
by an electric utility of revenues in excess of, or less than, the amount of
revenues otherwise determined to be lawful by the board.
Guidelines for use in evaluating the acceptability of methods
of class cost of service estimation include, but are not limited to, the
following:
a. All usage of customer,
demand, and energy components of service shall be considered new
usage.
b. Customer classes shall be
established on the primary basis of reasonably similar usage patterns within
classes, even if this requires disaggregation or recombination of traditional
customer classes.
c. Generating
capacity estimates or allocations among and within classes shall recognize that
utility systems are designed to serve both peak and off-peak demand, and shall
attribute costs based upon both peak period demand and the contribution of
off-peak period demand in determining generation mix. Generating capacity
estimates and allocations among and within classes shall be based on load data
for each class as described in 199-subrule 35.9(2).
d. Transmission and distribution capacity
estimates or allocations among and within classes shall be demand-related based
upon system usage patterns, and the load imposed by a class on the transmission
or distribution capacity in question.
e. Customer cost component estimates or
allocations shall include only costs of the distribution system from and
including transformers, meters and associated customer service
expenses.
f. Methods of cost
estimates or allocations among customer classes shall recognize the differences
in voltage levels and other service characteristics, and line losses among
customer classes.
g. Methods of
class cost of service determination which are consistent with zero customer,
demand, or energy component costs or major categories of these, such as
generation, transmission or distribution, shall be considered unacceptable
methods.
h. Long-run marginal cost
methods of class cost of service determination shall clearly reflect changes in
total costs to the utility with respect to changes in the outputs of customer,
demand, or energy components of electric services.
i. The use of an inverse elasticity approach
to adjust long-run marginal cost-based rates to the revenue requirement shall
be unacceptable. Other approaches will be considered on a case-by-case basis.
(3)
Declining
block rates. The energy-related cost component of a rate, or the
amount attributable to the energy-related cost component of a rate, charged by
an electric utility for providing electric service during any period to any
class of electric consumers, shall not decrease as kilowatt-hour consumption by
such class increases during the period except to the extent that the utility
demonstrates that the energy costs of providing electric service to such class
decrease as consumption increases during the period.
(4)
Time-of-day rates. The
rates charged by any electric utility for providing electric service to each
class of electric consumers shall be on a time-of-day basis which reflects the
cost of providing electric service to that class of electric consumers at
different times of the day unless such rates are not cost-effective with
respect to the class. These rates are cost-effective with respect to a class if
the long-run benefits of the rate to the electric utility and its electric
consumers in the class concerned are likely to exceed the metering costs and
other costs associated with the use of the rates. Cost-based time-of-day rates
shall be offered on an optional basis to electric consumers who do not
otherwise qualify for the rates if consumers agree to pay the additional
metering costs and other costs associated with the use of the rates.
(5)
Seasonal rates. The
rates charged by an electric utility for providing electric service to each
class of electric consumers may be on a seasonal basis which reflects the costs
of providing service to the class of consumers at different seasons of the year
to the extent that costs vary seasonally for the utility, if the board
determines that seasonal rates are appropriate in an individual case.
(6)
Interruptible rates.
Each electric utility shall offer each industrial and commercial electric
consumer an interruptible rate which reflects the cost of providing
interruptible service to the class of which the consumer is a member
(7)
Load management
techniques. Rescinded lAB 11/12/03, effective 12/17/03.
(8)
Other energy conservation
strategies. Rescinded lAB 11/12/03, effective 12/17/03.
(9)
Pilot projects.
Rescinded lAB 11/12/03, effective 12/17/03.