SCEG OATT Formula Transmission Rate Filing.pdf - SCANA ...

20091231-0037 FERC PDF (Unofficia1) 12/29/2009
SCE&G's OATT Formula Transmission
Docket No. ERIO-
Rate Filing
Page 4
transmISSIOn projects. Finally, he explains the proposed amortization of the GridSouth costs
referenced in Mr. White's testimony.
Dr. Vilbert supports SCE&G's return on common equity (ROE) of 11.5% that will be
applied to SCE&G's transmission rate base. Although Dr. Vilbert's testimony supports an 11.5%
return on common equity, in order to ensure no (or nominal) suspension, SCE&G seeks only
11.3%.
Description
of the Formula Rate
As explained in the testimony of Mr. Heintz, SCE&G's Formula Rates proposal is based
on the methodology approved by the Commission in several recent proceedings. 8 The formula
proposed by SCE&G is essentially the same as the formula approved by the Commission in P P L
Electric Utilities Corp., 125 FERC ~ 61,121 (2008).
The formula, to be incorporated into Attachment H of SCE&G's OA TT, has three
components. The first component (which appears at Attachment H of the OATT) is a statement
that the rates and SCE&G's charges for NITS will be calculated based on the formula. The
second component (which appears at Appendix A to Attachment H) is the formula itself and
associated work papers. The third component (which appears at Appendix B to Attachment H)
consists of a set of protocols that describe how SCE&G will update the formula in future years,
what the review procedures are, how customer challenges will be resolved, and how any changes
to the annual rate restatements will be implemented.
The proposed formula enables SCE&G to calculate the net annual transmission revenue
requirement for each rate year. Except for the initial, partial rate year, each rate year will be the
twelve month period beginning June. 1. SCE&G will populate the formula using actual calendar
year cost data, with limited exceptions. The majority of the actual data inputs are reported
annually in SCE&G's FERC Form No. 1 filed with the Commission by April 30 th each year.
SCE&G proposes to use these data to populate the formula each May to produce the NITS and
PTP transmission service rates that will become effective each June I. SCE&G will submit to
the Commission annual informational filings containing these data.
Forecasted plant additions also will be included in the formula and then trued-up after the
year is over. The true-up between the forecasted and actual net revenue requirement will be
calculated each subsequent rate year and applied, with interest, as an addition to, or subtraction
from, the subsequent year's net revenue requirement and resultant rates.
SCE&G's proposed formula conforms to Commission requirements that certain inputs be
fixed and unchanging absent the Company's obtaining authorization through a Section 205 filing;
8
See, e.g., Baltimore Gas and Electric Co., 115 FERC ~ 61,066 (2006); Duquesne Light
Co., 118 FERC ~ 61,087 (2007); Commonwealth Edison Co., 119 FERC ~ 61,238 (2007).