65-407-850 Me. Code R. § 3

Current through 2024-46, November 13, 2024

Section 407-850-3 - Ratemaking Treatment

A.Policy

No public utility shall recover from its ratepayers any Regulatory Proceeding Expense unless such expense has been found by the Commission to have been reasonable and prudently incurred. The Commission will set regulatory proceeding expenses on a normalized test year basis.

BCriteria for Determining Reasonableness

In determining whether a Regulatory Proceeding Expense is reasonable, the Commission may use the following criteria:

1) the customary fee for similar services, including the fees rendered in the relevant market to companies of similar size in matters of similar importance to the client;

2) the amount of money at issue;

3) the extent to which the attorney's or expert's services contributed to the presentation of the case;

4) whether the utility used a negotiations or bidding process, or otherwise considered information concerning the availability, experience, quality and cost of outside attorney and expert services when hiring outside attorneys and experts; and

5) the experience and ability of the attorney or expert. Other factors may be considered if relevant to a particular proceeding.

C.Methodology for Ratemaking Treatment

Utilities may recover reasonable Regulatory Proceeding Expenses in accordance with the following formula, which shall include an adjustment for inflation.

RR-RPE = (ARPE - RCE) ÷· 5 + NRCE

Where

RR-RPE = Revenue Requirement Regulatory Proceeding Expenses

ARPE = Annual Regulatory Proceeding Expenses for the previous 5 years

RCE = Rate Case Expenses for the previous 5 years

NRCE = Normalized Rate Case Expenses

For the purposes of this section, the normalization period for Rate Case Expenses shall be ten years.

65-407 C.M.R. ch. 850, § 3