RS. Subchapter J. COSTS, RATES AND TARIFFS. CHAPTER 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE
PROVIDERS.
Subchapter J.
COSTS, RATES AND TARIFFS.
§25.236--1
effective date 5/16/01
§25.236.
Recovery of Fuel Costs.
(a)
Eligible fuel expenses. Eligible fuel expenses include expenses properly recorded in the Federal
Energy Regulatory Commission Uniform System of Accounts, numbers 501, 503, 518, 536, 547, 555, and
565, as modified in this subsection, as of April 1, 1997, and the items specified in paragraph (7) of this
subsection. Any later amendments to the System of Accounts are not incorporated into this
subsection. Subject to the commission finding special circumstances under paragraph (6) of this
subsection, eligible fuel expenses are limited to:
(1)
For any account, the electric utility may not recover, as part of eligible fuel expense, costs
incurred after fuel is delivered to the generating plant site, for example, but not limited to,
operation and maintenance expenses at generating plants, costs of maintaining and storing
inventories of fuel at the generating plant site, unloading and fuel handling costs at the
generating plant, and expenses associated with the disposal of fuel combustion residuals.
Further, the electric utility may not recover maintenance expenses and taxes on rail cars owned
or leased by the electric utility, regardless of whether the expenses and taxes are incurred or
charged before or after the fuel is delivered to the generating plant site. The electric utility may
not recover an equity return or profit for an affiliate of the electric utility, regardless of whether
the affiliate incurs or charges the equity return or profit before or after the fuel is delivered to the
generating plant site. In addition, all affiliate payments must satisfy the Public Utility
Regulatory Act (PURA) §36.058.
(2)
For Accounts 501 and 547, the only eligible fuel expenses are the delivered cost of fuel to the
generating plant site excluding fuel brokerage fees. For Account 501, revenues associated with
the disposal of fuel combustion residuals will also be excluded.
(3)
For Accounts 518 and 536, the only eligible fuel expenses are the expenses properly recorded in
the Account excluding brokerage fees. For Account 503, the only eligible fuel expenses are the
expenses properly recorded in the Account, excluding brokerage fees, return, non-fuel operation
and maintenance expenses, depreciation costs and taxes.
(4)
For Account 555, the electric utility may not recover demand or capacity costs.
(5)
For Account 565, an electric utility may not recover transmission expenses paid to affiliated
companies for the purpose of equalizing or balancing the financial responsibility of differing
levels of investment and operating costs associated with transmission assets. A non-ERCOT
electric utility may not recover expenses for wheeling transactions. An ERCOT electric utility
may recover only the expenses properly recorded in Account 565 for ISO fees related to planned
and unplanned transmission service and for payments to parties related to unplanned
transmission service, such as losses and re-dispatch fees.
(6)
Upon demonstration that such treatment is justified by special circumstances, an electric utility
may recover as eligible fuel expenses fuel or fuel related expenses otherwise excluded in
paragraphs (1) - (5) of this subsection. In determining whether special circumstances exist, the
commission shall consider, in addition to other factors developed in the record of the
reconciliation proceeding, whether the fuel expense or transaction giving rise to the ineligible
fuel expense resulted in, or is reasonably expected to result in, increased reliability of supply or
lower fuel expenses than would otherwise be the case, and that such benefits received or
expected to be received by ratepayers exceed the costs that ratepayers otherwise would have
paid or otherwise would reasonably expect to pay.
(7)
Eligible fuel expenses shall not be offset by revenues by affiliated companies for the purpose of
equalizing or balancing the financial responsibility of differing levels of investment and
operation costs associated with transmission assets. In addition to the expenses designated in CHAPTER 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE
PROVIDERS.
Subchapter J.
COSTS, RATES AND TARIFFS.
§25.236--2
effective date 5/16/01
paragraphs (1) - (6) of this subsection, unless otherwise specified by the commission, eligible
fuel expenses shall be offset by: CHAPTER 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE
PROVIDERS.
Subchapter J.
COSTS, RATES AND TARIFFS.
§25.236--3
effective date 5/16/01
§25.236(a)(7) continued
(A) revenues from steam sales included in Accounts 504 and 456 to the extent expenses
incurred to produce that steam are included in Account 503; and
(B) revenues from wheeling transactions except for non-ERCOT electric utilities; and
(C) revenues from off-system sales in their entirety, except as permitted in paragraph (8) of
this subsection.
(D) For electric utilities in ERCOT, revenues from third parties for unplanned transmission
service, such as ISO fees, losses, and re-dispatch fees.
(8)
Shared margins from off-system sales. An electric utility may retain 10% of the margins from
an off-system energy sales transaction if the following criteria are met:
(A) the electric utility participates in a transmission region governed by an independent
system operator or a functionally equivalent independent organization;
(B) a generally-applicable tariff for firm and non-firm transmission service is offered in the
transmission region in which the electric utility operates; and
(C) the transaction is not found to be to the detriment of its retail customers.
(b) Reconciliation of fuel expenses. Electric utilities shall file petitions for reconciliation on a periodic
basis so that any petition for reconciliation shall contain a maximum of three years and a minimum of
one year of reconcilable data and will be filed no later than six months after the end of the period to be
reconciled. However, notwithstanding the previous sentence, a reconciliation shall be requested in
any general rate proceeding under the PURA, Chapter 36, Subchapters C and E and may be performed
in any general rate proceeding under the PURA, Chapter 36, Subchapter D. Upon motion and showing
of good cause, a fuel reconciliation proceeding may be severed from or consolidated with other
proceedings.
(c)
Petitions to reconcile fuel expenses. In addition to the commission prescribed reconciliation
application, a fuel reconciliation petition filed by an electric utility must be accompanied by a summary
and supporting testimony that includes the following information:
(1)
a summary of significant, atypical events that occurred during the reconciliation period that
affected the economic dispatch of the electric utility's generating units, including but not limited
to transmission line constraints, fuel use or deliverability constraints, unit operational
constraints, and system reliability constraints;
(2)
a general description of typical constraints that limit the economic dispatch of the electric
utility's generating units, including but not limited to transmission line constraints, fuel use or
deliverability constraints, unit operational constraints, and system reliability constraints;
(3)
the reasonableness and necessity of the electric utility's eligible fuel expenses and its mix of fuel
used during the reconciliation period;
(4)
a summary table that lists all the fuel cost elements which are covered in the electric utility's fuel
cost recovery request, the dollars associated with each item, and where to find the item in the
prefiled testimony;
(5)
tables and graphs which show generation (MWh), capacity factor, fuel cost (cents per kWh and
cents per MMBtu), variable cost and heat rate by plant and fuel type, on a monthly basis; and
(6)
a summary and narrative of the next-day and intra-day surveys of the electricity markets and a
comparison of those surveys to the electric utility's marginal generating costs.
(d) Fuel reconciliation proceedings. Burden of proof and scope of proceeding are as follows: CHAPTER 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE
PROVIDERS.
Subchapter J.
COSTS, RATES AND TARIFFS.
§25.236--4
effective date 5/16/01
(1)
In a proceeding to reconcile fuel factor revenues and expenses, an electric utility has the burden
of showing that: CHAPTER 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE
PROVIDERS.
Subchapter J.
COSTS, RATES AND TARIFFS.
§25.236--5
effective date 5/16/01
§25.236(d)(1) continued
(A) its eligible fuel expenses during the reconciliation period were reasonable and necessary
expenses incurred to provide reliable electric service to retail customers;
(B) if its eligible fuel expenses for the reconciliation period included an item or class of items
supplied by an affiliate of the electric utility, the prices charged by the supplying affiliate
to the electric utility were reasonable and necessary and no higher than the prices charged
by the supplying affiliate to its other affiliates or divisions or to unaffiliated persons or
corporations for the same item or class of items; and
(C) it has properly accounted for the amount of fuel-related revenues collected pursuant to
the fuel factor during the reconciliation period.
(2)
The scope of a fuel reconciliation proceeding includes any issue related to determining the
reasonableness of the electric utility's fuel expenses during the reconciliation period a