ELECTRONICALLY FILED - 2019 September 6 3:36 PM - SCPSC - Docket # 2019-233-A - Page 1 of 9 in to or are the No. each ORS impact Friday, Carolina situations interested Order standards, by OFFICE imposed regulate question STAFF 2019-341 evaluate administrative opportunity in South material and to No. discretion. an a limited of the parties provides of in costs reasonable furnished, have Order Commission ability that the tool CAROLINA exercise to be supervise and a the (1) OF to to to as would interested REGULATORY appreciates docket just has Commission that free establishment fix COMMENTS SOUTH OF costs any response this Commission ORS service to in the in ) ) ) the Service of and manner accounting with remains jurisdiction and Commission Order COMMISSION and and directed 2019-233-A ("ORS") Public deferral, public an State deferrals. the deferral comply CAROLINA the of NO. Deferrals convincing to the Staff 2019-341) this use "power enter to BEFORE measurement of absent expertise in by and to No. SERVICE ensuring (2) its and Commission opened SOUTH clear treatment and utility DOCKET a the Order provided exclusive while Regulatory was using allowed Treatment in of and of Commission PUBLIC are the comments be 5 nature practices, public which order the has in docket condition. in THE Office Address guidance, should creation every to Number This the comments requested of the demonstrates by policy financial ) regulations, accounting Page utilities 2019. recommends Commission an below 2018-318-E, extraordinary which 6, utility (See Procedure service that or for general comments. No. utility's the regarding ORS The This and the RE: Commission" where parties request on believes unusual IN (" Docket docket 2019-477, September provide classifications, rates ELECTRONICALLY FILED - 2019 September 6 3:36 PM - SCPSC - Docket # 2019-233-A - Page 2 of 9 a It to the 772 of 378; only hand, action policy certain at general utilities remains 763, (2015). a of discretion interested under need offered comments effect accounting promulgate other determining its its agency are an S.E.2d one general public and In the issue costs agency other forth S.E.2d a of the for on and/or 440 the the set and dissenting)). 790 force or as exercise Docket issue believes then simply norm. 329, to pass the Ann.1158-3-140 C.J., or request or 454, application this at long case, to utilities ORS process arise, free in guidelines As each 436, Code lacks examinations binding S.C. (Toal, upon the that is, a and 312 S.C. S.C. provide regulation that regulation agency individual a a cases (2004) policies, criterion. jurisdiction evaluate comments follow discretion. the 417 an guidance inquiry" audits to which its in 598 Cozn'zz, State." or scheme establishes rule's may adopt various "key leaves ORS's this Tax 470, norm. the ability can policy in promulgate promulgate the the exercise Regalatiotz, S.C. the in standard statement statutory guidelines, policy Commission's inspections, and to & v. S.E.2d within binding or utility should is the the the general a facts Commission free Inc. 593 jurisdiction. make policy out case that established, to the Commission public ("APA") under 491, policies challenged Licerzsitzg Commission Serv., fills whether remain the been given Act general individual the so every the 431, follow established on a customers. Commission power, adopt and A that has to by utilities the Labor, Healtlz not to Commissions the S.C. its the of allow which not policy to responsibility has norm the to whether 357 depends or but permit Home the Procedures expertise Dep't authority consider followed guidance. Whether its ORS's to that within extent exercising or and binding follow this S.C. expenses question Commission is a Sanford, v. In to whether determine free in the It (quoting guidance statement v. the using matters within observed, is Administrative statement regulations operating (2016) policy whether regulation. order on assist Joseph Sloan would: parties ELECTRONICALLY FILED - 2019 September 6 3:36 PM - SCPSC - Docket # 2019-233-A - Page 3 of 9 in 97 pay 648 cost costs defer assess utility unless to 92, 2005). of service Orders losses to A.2d Principles may defer the "Retroactive Commission to payers 642 S.E.2d period reliable prior use burden Comm'n utility law. rate tool and 493 test 338, the a who Accounting framework collect as Corp. Accounting a expenses. 231, future bears and and Carolina and regulated utilities; used 222, (Ariz. a and Comwlth., be customers high-quality 16 Accepted S.C. twelve-month South Pa. providing 1, public requiring can Deferrals amortize those revenues by of benefit 164 328 than provide under not ("FASB"), that which services; the to historic Generally match a P.U.R.4th may and rather to resources Board Cotnnz'&z, reaps Comm'&z, order, is Regulatory with use 239 examination principle prohibited facilities rates of to utility is Serv. Co., and utility A Co&n&n's A production utility vice Standards Pub. utility general accounting audit ratemaking its customers. accordance Commission a cases. the Se& Util. an investment the Discussion in for of of ratemaking on rate utility Pub. utility seek and pay use Carolina Public utility of to requires Accounting Pa. Commission. inspection, based may v. expensed risk South between should the the be retroactive v. Arizo&za efficient transparency the and requests; by continued re principles utilities Financial Information utility In prohibited the Popowsky the Porter increases because is the 103-823(A)(3) of See deferral Streamline Promote Enhance Ensure service; otherwise Mitigate to directed or by use." (1) rates (2) (3) (4) One (5) General However, (citing if: would 1. past (1997) (1994)). decreases current Regulation otherwise that ("GAAP"). provided for rate-making costs According ELECTRONICALLY FILED - 2019 September 6 3:36 PM - SCPSC - Docket # 2019-233-A - Page 4 of 9 to In an the the the the (Ill. will cost A.2d about affect of order, of via by cost order. and revenues 642 revenues, Accounting Approving change recognition or in exception fixed incurred rate outside 34446581 the not concerns an treatment Liability are last costs accounting Order do immediately purposes; or WL capitalized an Popowsky, an Changes moves 980-340-25-1. avoids rates not of creates the incurred previously alone 2000 utility's Asset for to costs.'ypically, the ratemaking does (citing This the 1994)). ASC of ratemaking utility's revenues Commission's equal presence 231 a changes revenues Liabilities future or order for 98-0895, the (Utah the period. least (n.d.). Regulatory and in 222, affecting Application In time at No. a recovery costs costs 759 routine similar Ill. of future Commission's the S.C. costs event of a rates. of defer Regulatory P.2d accounting Costs, the permit an Board). to amount 328 to These or an to Co. established on 885 allowable an levels future allows ore/section&trid=2156667 of between in in Approval where order case. period fash Assets Porter, and effect for cost Standards rate setting Utilities provided Compliance llasc Comm'n, expected in s revenue approval that be investments routinely historic supra, next for warranted of htt a 2000). accounting 2000 Serv. and will the See, Regulatory Citizens future Standards an 15, occur only from precedential from of as of Accounting Year is Pub. 103-823(A)(3) provide that no considered See inclusion to revenue use for be time March has expenses, costs Commission's Utah Order Retrieved to a Accepted of v. the The than from revenues amounts and future probable investments (Financial or of extraordinary. Regulation and is period ratemaking. Comm'n result The rather It or revenues, and deferral Accounting Stewart costs codification. charges deferred. test of (2) (1) Generally A Accounting FASB or and recording 2. those uzzusual Commission historic rates balance of 'See 648, retroactive Deferred Commerce the expenses, Commission is standards balance ELECTRONICALLY FILED - 2019 September 6 3:36 PM - SCPSC - Docket # 2019-233-A - Page 5 of 9 to the costs absent repair would Public absent should standard, utility's Utilities whether which business justified the instance, determine and treatment, burden in if of the to utility rates. For only whether, extraordinary have the 2019, on or Public (2) the condition expenses test not and Minnesota that base course 29, by and bears regulatory restoration determine well-established the earnings. impact a to utility unusual March as nature; Events two-part financial normal consider of nature; on a storm in utility incurred special in the Connecticut applied such extraordinary These of must level totality in issued through material The condition." or has utility's in a employs expense the Order significant current Commission. the on have extraordinary handled financial treatment. extraordinary [NCUC] 519 unusual or condition. be or unexpected Commission Commission, Commissions, consideration required: considered Sub. "the include ("NCUC") only utility's Service is impact would and the whether be the unusual capacity. past E-22, Company's state should the that in unusual stating, accounting also are financial the costs Service of the No. asset, Public as nature should are on material in but other treatment in a the Commission York expenses by Docket Power question standard costs generating requires, Public utility's impact have in regulatory question regulatory New The used treatment the a deferral, in above consideration costs Carolina Utilities accounting the general material expected of are would on in special a extraordinary, nonrecurring a the Commission test significant Montana costs and or of and is North be absent of have costs it treatment. the deferral accounting Carolina impact Utilities whether also the of standards would two-part significant unusual (1) Dominion that use is North establishment Authority, Recurring whether, the whether costs deferral Carolina should condition."- the Commission, consideration accounting construction material the (l) (2) of Similar The As the quoted jurisdictions, a considers or as North materially use expense See operations. other warrant financial whether expenses the have such Regulatory the costs Utility "- which deferral are demonstrate NCUC deferral, ELECTRONICALLY FILED - 2019 September 6 3:36 PM - SCPSC - Docket # 2019-233-A - Page 6 of 9 of the for for the and cost This from absent should Inc. deferral generally unless Uniform with accounting, expenses, categories Approval is authorized granted the representing of carrying savings for operation Utilities, material. be on utilities, 2009). earnings, costs the deferral income item or to of not 17, ("FERC") Power, Commission currently an deferral Items. costs associated a related realizes electric Rocktand Dec. level utility's the that because respect for incurred & a should of Carolina utility's utility of savings carrying N. non-fuel future (NYPSC condition extraordinary the Commission the balance. ("[w]1th Extraordinary Orange eligible be if 7, and and of percent Commission determined treatment to accrue actual of pendency 2016) expenditures Dominion 5889922 utility's 5% to this deferral financial 29, the taxes, any by WL Petition the Regulatory Treatment dlbla Instruction the the than example, NCUC capital (Mar. on utility. conditions; on 2009 Co., 101); during Examples the considered allowed accounting For more "10 adopted 1 the with property include General reduce Energy at be costs Expenses and of Pt. to Power impact not & also Accounting economic cost 08-M-1299, Deferral Accounts CFR generally used amounts. Federal 1295161, Accounts, present of is 18 representing Elec. No. associated Account expenditure. infrastructure of test, the and should the WL depreciation, should current item Commission Deferral by incurred of Costs, System determining (citing return to, Virginia an 2016 income System an for utility incurred by Deferral metering two-part recorded contingency A request; not E-22, When account Service of impact Uniform be or limited the Uniform supported deferred are utility's No. Incremental the otherwise, a Eligible a to unusual not of ¹, deferral Public extraordinary.") advanced Application of FERC or should Defer expenses. return potential of are deferred further of be to the Prudency decides accrue 5% Accounts. expenses 101, is to equity. York of the but guidance or Schedule of Pt. Pursuant Expenses The A. on Matter than savings the deferred New 3. the CFR definition System the more approval consider and estimated include, return deployment maintenance balance 'n under those extraordinary Commission considered "18 Amended Authorization ELECTRONICALLY FILED - 2019 September 6 3:36 PM - SCPSC - Docket # 2019-233-A - Page 7 of 9 a to of be for the the rate with for made storm in should review deferred example, the purposes. should context revenue full accounting protect general the order reviewed Commission, A For the a Amortization expenses of associated date month in the of a would proper assumptions been established and the costs accounting additional period. the be in This deferred balance have accounting for to the proceeding. context preclude the an addition, as determined begin Account or the underlying incurred of should In to other be that record in recovers the expenses or any unspecified approval customers. utility of of costs to such an Deferral should case to occur utility should issuance the account. for treatment account determinative for rate the repair the by a limited utility approval should balance and be returned be or event the deferred Period amortization deferral general be not Further, reasonableness incurred the order accounting the amortization the in should deferred the Time begin period, of would restoration costs should expenses, the after it order the expenses. subsequent without deferred for a Further, should storm accounting that order of growth case, the in Specified addressing the incurred for an 1193. books the of period rate such amortization utility for the order Sub its from accounting of under incurred the prudency limit on proceeding. an E-2, accounting it general party granted to account period the of an No. amortization case which the of amortization next when approval accounting other incurred time order recorded by rate Determination Period an Docket the the deferral any not Approval B. In requires The costs utility beyond or is approval NCUC predetermine same approved general the the ORS, treatment, not The the of by accounting established proceeding. the occurs.s costs NCUC period the prudency, 'ee ELECTRONICALLY FILED - 2019 September 6 3:36 PM - SCPSC - Docket # 2019-233-A - Page 8 of 9 its (2) the not use and and and from adopt to reports are for and Deferral using provides clear following continued audit Regulation accounting period, but authorizing a costs. change the in nature order allowed utility 5) quarterly in situations be Commission condition. deferral the guidelines number file guidance, incurred inspection, or this amortization Commission minimum, balance, order should where the utility accounting to a demonstrates financial parties an utility's and the appropriate at policies extraordinary surrounding original the for on utilities or utility 7) situations utility's recommends docket quarterly's exception streamline in that the issues interested include, the establish an recover request ORS the unusual on to recommends amount, guidance as in other where would the are fully previous each windfall believes should and ORS ORS a with to and commission impact 4) by 2) interest ORS question situations reports evaluate amortization treatment, account, utilities sparingly type, in receiving material to necessary deferral, Recommendations a Commissions, The by jurisdiction of limited used from costs have discretion. deferred state approved provide in be amount ORS. Commission's the accounting 6) recommendation the period. utility the tool expenses balance Reporting the (1) would other Commission and a which the The exercise should over as and that the Commission's to costs with balance, monitor deferred current deferred to the the prevent of free 3) utilities. allow 1) amortization Recommendations appreciates manner treatment guidelines, and expenses keeping order Commission for and and quarterly accounting or under In Accounting ORS In ORS deferral, the deferral, 4. remaining recover 103-823(A)(3). with customers to 8) information: the deferral previous absent accounting convincing policies binding, expertise consideration treatment utilities ELECTRONICALLY FILED - 2019 September 6 3:36 PM - SCPSC - Docket # 2019-233-A - Page 9 of 9 or the and ensure before service; information services; utility STAFF and argument additional ov 29201 oral rates reliable 900 at Esquire and or require utility Suite Carolina Qors.sc. the REGULATORY 737-8440 737-0895 Bateman, Street, of writing South OF M. in (803) (803) high-quality Commission Main the either 1401 OFFICE Columbia, Phone: Andrew Fax: E-mail:abateman provide transparency such to Should enhance provide facilities to customers. utilities; utility willing investment to Carolina is public 2019 of risk 6, ORS South utility the examination mitigate comment, Commission. continued September Columbia,