N.J. Admin. Code § 14:1-5.12

Current through Register Vol. 56, No. 19, October 7, 2024

Section 14:1-5.12 - Tariff filings or petitions that propose increases in charges to customers

(a) Tariff filings or petitions for the purpose of making effective or making revisions, changes, or alterations of existing tariffs; and which propose to increase any rate, fare, toll, rental, or charge to alter any classification, practice, rule, or regulation as to result in such an increase, other than filings to effectuate the operation of an existing fuel or raw materials adjustment clause, shall conform to the provisions at N.J.A.C. 14:1-4.2A, 5.1, 5.2, 5.3, and 5.4, to the extent applicable; and shall in the body thereof, or in attached exhibits, contain all applicable information and data set forth at N.J.A.C. 14:1-5.11; and, in addition, shall contain the following information and financial statements, which shall be prepared in accordance with the applicable Uniform System of Accounts:

1. A comparative balance sheet for the most recent three-year period (calendar year or fiscal year);

2. A comparative income statement for the most recent three-year period (calendar year or fiscal year);

3. A balance sheet at the most recent date available;

4. A statement of the amount of revenue derived in the calendar year last preceding the institution of the proceedings from the intrastate sales of the product supplied, or intrastate service rendered, the rates, tolls, fares or charges for which are the subject matter of the filing;

5. A pro forma income statement reflecting operating income at present and proposed rates and an explanation of all adjustments thereon, as well as a calculation showing the indicated rate of return on the average net investment for the same period as that covered by the pro forma income statement, that is, investment in plant facilities plus supplies and working capital to the extent claimed, less the reserve for depreciation and advances and contributions for facilities;

6. If the request for rate relief is based upon 48:2-21.2, there shall be included, in lieu of the requirements of (a)5 above, a statement showing that the facts of the particular situation meet the statutory requirements;

7. In providing the information required at (a)5 and 6 above, a company may also file, in addition to the new rates proposed to become effective, alternative rate changes designed to produce the full revenue request, which alternatives are illustrative of the application of other possible rate designs to the filing;

8. An itemized schedule showing all payments or accruals to affiliated companies or organizations and to those who own in excess of five percent of the utility's capital stock regardless of the form or manner in which such charges are paid or accrued and an explanation of the service performed for such charges;

9. A copy of the form of notice to customers; and

10. If a company is part of a family of companies that files a consolidated Federal income tax return, that company shall include in its petition a consolidated tax adjustment (CTA) calculation using the rate base method, which allows the parent company to keep certain tax savings, while requiring the petitioner to reflect the savings by reducing the rate base upon which the utility's return is determined. The CTA calculation must include all supporting information and documents necessary for the Board to determine and implement an appropriate CTA calculation pursuant to this section. A CTA provides a mechanism that the Board will utilize in rate cases, so that ratepayers should share a specified portion of the tax savings achieved from the filing of a consolidated tax return. Required information and supporting documents include, but are not limited to, a schedule showing each affiliate company's taxable income/loss by year, an indication whether the affiliate is a regulated utility company or not, the statutory Federal income tax requirement for each year, if any, and the alternative minimum tax requirement for each year, if any. The review period for the CTA calculation shall be for five consecutive tax years, including the complete tax year within the utility's proposed test year. The calculated CTA shall be allocated, so that the rate base shall be reduced by 100 percent of the full CTA. The transmission portion of an electric distribution company's income shall not be included in the calculation of CTA.

(b) Each utility that makes a filing pursuant to (a) above shall, unless otherwise ordered or permitted by the Board, give notice thereof, as follows:

1. Serve a notice of the filing and a copy of the proposed tariff or a copy of the petition or a statement of the effect of the proposed filing upon the municipal clerk in each of the municipalities in which there is rendered a service, the charge for which is proposed to be increased, the clerk of the Board of County Commissioners of each affected county and, where appropriate, the executive officer of each affected county;

2. Serve a notice of the filing and two copies of the petition or tariff on the Department of Law and Public Safety, Division of Law, Public Utilities Section, R.J. Hughes Justice Complex, 25 Market St., 7th Floor West, PO Box 112, Trenton, NJ 08625 and on the Director, Division of Rate Counsel, 140 East Front Street, 4th Floor, PO Box 003, Trenton, New Jersey 08625;

3. Serve a notice of the filing and a statement of the effect on customers of various classes on all current customers who are billed on a recurring basis and who will be affected by said filing. Such notice may be by bill insert or by publication in newspapers published and circulated in the utility's service area.

(c) Each utility that makes a filing under (a) above shall, after being advised by the Board of the time and place fixed for hearing, if any and unless otherwise ordered or permitted by the Board, serve notice at least 20 days prior to such time on those persons specified in (b)1 and 2 above; and shall give such notice to those persons designated in (b)3 above as current customers billed on a recurring basis, by bill insert or by publication 20 days prior to the date set for hearing, in newspapers published and circulated in the utility's service area.

(d) The notices provided for in (b) and (c) above may be given simultaneously.

(e) A proposed increase in base rates may be implemented on a provisional basis, subject to refund with interest, after the expiration of the suspension periods pursuant to N.J.S.A. 48:2-21(d). In implementing a provisional rate increase pursuant to this subchapter, provided all the conditions of this subchapter are met, a utility:

1. May implement a provisional rate increase equal to the full amount of the rate increase requested by the utility within the subject base rate case, or a lesser amount, following the expiration of the suspension periods, subject to refund with interest; and

2. Shall apply an equal percentage increase to all rate classes using the existing rate design for the utility approved by the Board.

(f) Unless otherwise ordered by the Board, a utility that seeks to implement a provisional rate increase shall:

1. Serve written notice of the intended provisional rate increase at least 30 days in advance of the provisional rate increase, but not earlier than 75 days in advance of the provisional rate increase, upon:

i. The Board;

ii. The Director, Division of Rate Counsel, 140 East Front Street, 4th Floor, PO Box 003, Trenton, New Jersey 08625;

iii. The Department of Law and Public Safety, Public Utilities Section, 25 Market Street, PO Box 112, Trenton, NJ 08625;

iv. The municipal clerk of each municipality where the utility renders service;

v. The clerk of the Board of County Commissioners of each county where the utility renders service;

vi. If applicable, the executive officer of each county where the utility renders service;

vii. All intervenors or participants in the pending rate case;

viii. The Administrative Law Judge presiding over the rate case, if applicable; and

ix. All customers who are billed on a recurring basis and who will be affected by the rate increase, where such notice may be made by bill insert or as part of an electronic billing statement.

2. File with the Board and serve on the Director of the Division of Rate Counsel, a copy of the utility's proposed tariff, at least 30 days in advance of the provisional rate increase, but not earlier than 75 days in advance of the provisional rate increase;

3. File with the Board and serve on the Director of the Division of Rate Counsel, a plan detailing the utility's method for providing any refunds and interest owed to ratepayers, to account for the potential that the Board's final order in the subject rate case includes a determination of over recovery by the utility, at least 30 days in advance of the provisional rate increase; and

4. File with the Board and serve on the Director of the Division of Rate Counsel, a certification that the utility has complied with the requirements set forth in (f)1, 2, and 3 above at least 20 days in advance of the provisional rate increase.

(g) After filing the certification required under (f)4 above, a utility may implement the provisional rate increase permitted by this section on the date noticed by the utility, unless Board staff transmits written objections to the utility. Any such objections shall address only the utility's compliance with (f) above, and shall be transmitted to the utility no later than five days in advance of the provisional rate increase.

(h) Upon conclusion of a rate case, a utility shall determine whether it owes interest to customers due to excess funds recovered through provisional rates pursuant to this subchapter. The utility shall return any over-recovery, plus interest, to customers no later than the customer billing cycle 30 days after the effective date of the Board Order concluding the rate case. In determining interest owed under this subchapter:

1. Interest shall not be due to the utility as a result of a final order in the rate case;

2. A utility, except an electric utility, shall calculate the amount of interest owed in accordance with N.J.A.C. 14:3-13.3(c) through (g), as applicable, except that in lieu of the "over-recovered gas cost balance" or "the over-recovery amount determined under N.J.A.C. 14:9-7.4," the utility shall utilize the amount recovered through provisional rates in excess of the amount approved by the Board in its final order in the utility's base rate case;

3. An electric utility shall calculate the amount of interest owed in the manner prescribed for a gas utility; and

4. The calculation of the amount of interest owed to customers shall cover the applicable period, which shall be the period between when the utility implemented provisional rates and the rate effective date of the Board's final order in the proceeding.

(i) Nothing contained in this section shall require a utility to implement provisional rates upon the expiration of the applicable suspension periods.

(j) Nothing contained in this section shall be construed as establishing or endorsing a provisional rate as final, nor shall this section be construed in any way to limit or restrict the Board's authority to approve final rates at the conclusion of a utility's base rate case.

(k) Where notice is prescribed under this rule, it shall be at the cost and expense of the party obligated to give or serve the notice.

N.J. Admin. Code § 14:1-5.12

Administrative change, 46 N.J.R. 2114(a).

Amended by 50 N.J.R. 625(b), effective 1/16/2018

Amended by 51 N.J.R. 414(d), effective 3/18/2019

Amended by 55 N.J.R. 393(a), effective 3/6/2023