Section 330.10  Definitions

 

            "Permanent rates" are established by the Commission at the conclusion of a rate case conducted under Section 9-201 of The Public Utilities Act ("Act") (Ill. Rev. Stat. 1985, ch. 111⅔, par. 9-201).

 

            "Temporary rates" are established by the Commission after hearing for an interim time period to be in effect until permanent rates are approved and in effect, pursuant to Section 9-202(b) of the Act (Ill. Rev. Stat. 1985, ch. 111⅔, par. 9-202(b)).

 

Section 330.20  Applicability

 

This Part applies to every public utility, as defined in Section 3-105 of the Act (Ill. Rev. Stat. 1985, ch. 111⅔, par. 3-105), under the jurisdiction of the Commission, and every telecommunications carrier subject to Article IX of the Act (Ill. Rev. Stat. 1985, ch. 111⅔, pars. 9-101 through 9-252).

 

Section 330.30  Necessary Conditions for a Temporary Rate Increase

 

a)         Any utility requesting a temporary rate increase must file a motion, testimony and exhibits supporting the request for a temporary rate increase, including the information required by Section 330.40, within 90 days after the utility files its rates, testimony, exhibits, and information required by 83 Ill. Adm. Code 285 supporting the request for a permanent rate increase.

 

b)         The utility will bear the burden of proof regarding the need for a temporary rate increase.  The utility must demonstrate that at least one of the following has occurred or will occur prior to the time that permanent rates are expected to be approved or in effect:

 

1)         a loss of revenues or an increase in expenses caused by factors outside the control of the utility which has resulted in or will result in an inability to render service in compliance with the standards of service prescribed for the particular utility (Telephone – 83 Ill. Adm. Code 730, Electric – 83 Ill. Adm. Code 410, Gas – 83 Ill. Adm. Code 500, Water – 83 Ill. Adm. Code 600); or

 

2)         an inability to raise needed capital at a reasonable cost;

 

c)         The Commission shall not grant a temporary rate increase unless the Commission has reason to believe that the evidence supporting the temporary rate increase would support a permanent rate increase, and that the utility would be entitled to a permanent rate increase at the time permanent rates will be established.  The Commission must issue an interim order addressing any requested temporary rate increase, either denying, granting in full, or granting in part the requested temporary rates increase.

 

Section 330.40  Filing Requirements

 

a)         Any utility requesting a temporary rate increase pursuant to Section 9-202(b) of the Act must satisfy the filing requirements specified in this Section in addition to the testimony, exhibits, and information required by 83 Ill. Adm. Code 285, supporting the request for a permanent increase. Within 14 days after the date the utility files the information set forth in Section 330.40(c) and (d), the Manager of the Hearing Examiners Division or his appointed representative (Hearing Examiner) shall provide the utility a list in writing of any deficiencies in the filing and provide the utility 14 days from receipt of the notice to file the additional information.  Failure to satisfy the filing requirements shall serve as cause for the Commission to reject the request for the temporary rate increase.

 

b)         Utilities classified as "Large utilities" or "Medium utilities" under 83 Ill. Adm. Code 285.120(a) must provide the information specified in subsections (c), (d), (e), (f), (g), (h), and (i).  All other utilities must provide the information specified in subsections (f), (g), (h), and (i).

 

c)         A utility requesting a temporary rate increase must provide the following financial information, where applicable, on a historic basis for the two years preceding the current calendar year and on a projected basis, assuming both the granting and denial of the requested temporary rate increase, for the current calendar year and the calendar year immediately following the current calendar year:

 

1)         Gross cash flow (expressed both as a dollar figure and as a percentage of permanent capital);

 

2)         Expenditures on rate base items (expressed both as a dollar figure and as a percentage of net plant);

 

3)         External financing requirements (expressed as a dollar figure by types of financing);

 

4)         Earnings available for common equity (expressed both as a dollar figure and as a percentage of average common equity);

 

5)         Capital structure ratios (expressed both as a dollar figure and as a percentage of total capitalization);

 

6)         Common Dividends;

 

7)         Pre-tax interest coverage ratio including allowance for funds used during construction ("AFUDC") or interest during construction ("IDC");

 

8)         Pre-tax interest coverage ratio excluding AFUDC or IDC;

 

9)         Post-tax interest coverage ratio including AFUDC or IDC;

 

10)         Post-tax interest coverage ratio excluding AFUDC or IDC;

 

11)         AFUDC or IDC;

 

12)         Net cash flow (expressed both as a dollar figure and as a percentage of permanent capital);

 

13)         Number of common shares outstanding;

 

14)         The embedded cost of long term debt, i.e., debt having an initial maturity period greater than one year (expressed as a percentage of total long term debt outstanding);

 

15)         The embedded cost of preferred stock (expressed as a percentage of total preferred stock outstanding);

 

16)         The cost of short-term debt, i.e., debt having an initial maturity of one year or less (expressed as a percentage of total short-term debt outstanding; and

 

17)         Revenues obtained from Illinois jurisdictional operations.

 

d)         The utility shall provide the following financial information on a projected basis, assuming both the granting and denial of the requested temporary rate increase, for the current calendar year and the year immediately following the current calendar year:

 

1)         sources and uses of funds statements or statements of cash flow;

 

2)         balance sheets; and

 

3)         income statements.

 

e)         The utility shall provide supporting workpapers for all information specified in subsections (c) and (d) above.

 

f)         The utility must explain why the requested temporary rate increase is necessary because of:

 

1)         a loss of revenues or an increase in expenses caused by factors outside the control of the utility which has resulted or will result in an inability to render service in compliance with the standards of service prescribed for the particular utility; or

 

2)         an inability to raise needed capital at a reasonable cost.

 

g)         If the utility claims an inability to raise needed capital at a reasonable cost, it must demonstrate such an inability.  In determining what cost is reasonable the Commission will consider general interest rate levels in the economy, interest rates available to public utilities in general, and the impact of raising necessary capital on the utility's embedded cost of long-term debt, cost of short-term debt, embedded cost of preferred stock, cost of common equity, capital structure ratios, and interest coverage ratios.

 

h)         If the utility claims a loss of revenues or an increase in expenses caused by factors outside the control of the utility which results in an inability to render service in compliance with the standards of service prescribed for the particular utility, the utility must specify the factors that caused the loss of revenues or the increase in expenses and demonstrate that such factors are outside its control.  The utility must also demonstrate how the loss of revenues or increase in expenses has or will lead to an inability to render service complying with the applicable standards.  In addition, the utility must state the nature of the inability and the cost of remedial action, and provide documentation which would include the evaluation of alternative solutions.

 

i)          The utility must specify any indenture requirements that may be violated if the temporary rate increase is not granted, as well as any possibilities of impairment of the ability to pay preferred and/or common dividends.

 

Section 330.45  Standard for Decision in Granting a Temporary Rate Increase

 

The Commission shall grant a temporary rate increase if the Commission determines that the utility has met the requirements of Section 330.30 and if the Commission deems it to be in the public interest.

 

Section 330.50  Refunds

 

a)         All temporary rate increases granted will be subject to refund, pending the order issued in the permanent rate case.  If the temporary rate increase granted exceeds the permanent rate increase granted, the difference will be refunded.  The Commission shall also review the propriety of its prior award of interim relief based upon the criteria used by the Commission in granting the interim rate relief.  (Section 9-202(b) of the Act).  Each utility receiving a temporary rate increase shall maintain books and records in a manner such that the revenue recovered through temporary rate increased can be identified. identified.  The amount of the refund shall be computed and revenues shall be recorded by telecommunications carriers in Account 165, by gas and electric utilities in Account 242, and by water and sewer utilities in Account 241.  Said books and records, including billing records during the temporary rate increase period, shall be maintained by the utility until all appeals to the Commission order addressing permanent relief are completed or the appeal deadline passes with no appeals being filed.

 

b)         Any refund shall include interest at the rate set forth pursuant to 83 Ill. Adm. Code 280.70(e)(1) for the applicable time period.