Iowa Admin. Code r. 199-20.14 - Flexible rates
(1)
Purpose. This subrule is intended to allow electric utility
companies to offer, at their option, incentive or discount rates to their
customers.
(2)
General
criteria.
a. Electric utility
companies may offer discounts to individual customers, to selected groups of
customers, or to an entire class of customers. However, discounted rates must
be offered to all directly competing customers in the same service territory.
Customers are direct competitors if they make the same end product (or offer
the same service) for the same general group of customers. Customers that only
produce component parts of the same end product are not directly competing
customers.
b. In deciding whether
to offer a specific discount, the utility shall evaluate the individual
customer's, group's, or class's situation and perform a cost-benefit analysis
before offering the discount.
c.
Any discount offered should be such as to significantly affect the customer's
or customers' decision to stay on the system or to increase
consumption.
d. The consequences of
offering the discount should be beneficial to all customers and to the utility.
Other customers should not be at risk of loss as a result of these discounts;
in addition, the offering of discounts shall in no way lead to subsidization of
the discounted rates by other customers in the same or different
classes.
(3)
Tariff requirements. If a company elects to offer flexible
rates, the utility shall file for review and approval tariff sheets specifying
the general conditions for offering discounted rates. The tariff sheets shall
include, at a minimum, the following criteria:
a. The cost-benefit analysis must demonstrate
that offering the discount will be more beneficial than not offering the
discount.
b. The ceiling for all
discounted rates shall be the approved rate on file for the customer's rate
class.
c. The floor for the
discount rate shall be equal to the energy costs and customer costs of serving
the specific customer.
d. No
discount shall be offered for a period longer than five years, unless the board
determines upon good cause shown that a longer period is warranted.
e. Discounts should not be offered if they
will encourage deterioration in the load characteristics of the customer
receiving the discount.
(4)
Reporting requirements.
Each rate-regulated electric utility electing to offer flexible rates shall
file annual reports with the board within 30 days of the end of each 12 months.
Reports shall include the following information:
a. Section 1 of the report concerns discounts
initiated in the last 12 months. For all discounts initiated in the last 12
months, the report shall include:
(1) The
identity of the new customers (by account number, if necessary);
(2) The value of the discount
offered;
(3) The cost-benefit
analysis results;
(4) The end-use
cost of alternate fuels or energy supplies available to the customer, if
relevant;
(5) The energy and demand
components by month of the amount of electricity sold to the customer in the
preceding 12 months.
b.
Section 2 of the report relates to overall program evaluation. Amount of
electricity refers to both energy and demand components when the customer is
billed for both elements. For all discounts currently being offered, the report
shall include:
(1) The identity of each
customer (by account number, if necessary);
(2) The amount of electricity sold in the
last 12 months to each customer at discounted rates, by month;
(3) The amount of electricity sold to each
customer in the same 12 months of the preceding year, by month;
(4) The dollar value of the discount in the
last 12 months to each customer, by month; and
(5) The dollar value of sales to each
customer for each of the previous 12 months.
c. Section 3 of the report concerns discounts
denied or discounts terminated. For all customers specifically evaluated and
denied or having a discount terminated in the last 12 months, the report shall
include:
(1) Customer identification (by
account number, if necessary);
(2)
The amount of electricity sold in the last 12 months to each customer, by
month;
(3) The amount of
electricity sold to each customer in the same 12 months of the preceding year,
by month; and
(4) The dollar value
of sales to each customer for each of the past 12 months.
d. No monthly report is required if the
utility had no customers receiving a discount during the relevant period and
had no customers which were evaluated for the discount and rejected during the
relevant period.
(5)
Rate case treatment. In a rate case, 50 percent of any
identifiable increase in net revenues will be used to reduce rates for all
customers; the remaining 50 percent of the identifiable increase in net
revenues may be kept by the utility. If there is a decrease in revenues due to
the discount, the utility's test year revenues will be adjusted to remove the
effects of the discount by assuming that all sales were made at full tariffed
rates for the customer class. Determining the actual amount will be a factual
determination to be made in the rate case.
Notes
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