Section R14-2-103. Defining Filing Requirements in Support of a Request by a Public Service Corporation Doing Business in Ari- zona for a Determination of the Value of Property of the Corpo- ration and of the Rate of Return Thereon, or in Support of Proposed Increased Rates or Charges

A.      Purpose and definitions

1.        Purpose: The purpose of this General Order is to define the specific financial and statistical information required to be filed with a request by a public service corporation doing business in Arizona for  a  determination of the value of the property of the corporation and of the rate of return to be earned thereon, with regard to proposed increased rates or charges. This General Order does not apply to the implementation of previously approved adjustment or escalation clauses.

2.        Applicability of rules: These rules shall apply to all elec- tric, gas, telephone, telegraph, water and private fire pro- tection public service corporations under the jurisdiction of the Commission. These rules are applicable both to all filings made after the effective date of this General Order and to any rate proceeding pending on the effective date of this General Order in which the Commission has issued no final decision. These rules are not intended to prohibit utilities from filing additional schedules, exhibits and other documents in which the Commission has issued no final decision. These rules are not intended to prohibit utilities from filing additional schedules,  exhibits and other documents which may be material to the rate pro- ceeding, nor are they intended to prohibit the Commis- sion from considering such schedules, exhibits or other documents in making its determination. In pending pro- ceedings, to the extent that the information required by this General Order is not included in the public service

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corporation’s exhibits or is not otherwise in the record, such information shall be supplied as soon as possible unless a waiver is requested and granted pursuant to sub- section (B)(5).

3.        Definitions: Terminology used in this General Order is defined as follows:

a.         “Accounting method” -- the accounting method pre- scribed or recognized by the Commission.

b.        “Commission” -- The Arizona Corporation Com- mission.

c.         “Cost of service” -- The total cost of providing ser- vice to a defined segment of customers, as deter- mined by the application of logical and generally accepted cost analysis and allocation techniques.

d.        “Department” -- A  responsibility center within  a combination utility where revenues and costs are accumulated by commodity or service rendered.

e.         “Depreciated original cost” -- The cost of property to the person first devoting it to public service, less the depreciation reserve, which shall include accrued depreciation and amortization calculated in accordance with General Order R14-2-102. Depreci- ated original cost shall not include any goodwill or going concern value, nor shall it include certificate value in excess of payment made or costs incurred in the initial acquisition thereof.

f.         “Exhibit” -- One or more schedules which support a rate filing or testimony in a rate proceeding.

g.        “Filing” -- An application and required schedules, exhibits or other documents filed by a public service corporation to initiate any rate proceeding under this Section. For all Class A and B utilities and for Class C electric and gas utilities, the filing shall include direct testimony in support of the application. For Class C water, sewer, and telephone utilities and for all Class D and E utilities, the filing shall include a written description of the components of the applica- tion. Nothing in this Section shall be construed to prohibit a public service corporation, prior to mak- ing a filing, from giving the Commission informal pre-filing notice of its intent to make a filing. Such pre-filing notice would permit the Commission, on a tentative basis, to assign a hearing date and would permit agreement on an appropriate test year.

h.        “Original cost rate base” -- An amount consisting of the depreciated original cost, prudently invested, of the property (exclusive of contributions and/or advances in aid of construction) at the end of the test

year, used or useful, plus a proper allowance for working capital and including all applicable pro forma adjustments.

i.         “Pro forma adjustments” -- Adjustments to actual test year results and balances to obtain a normal or more realistic relationship between revenues, expenses and rate base.

j.         “Projected year” -- The year immediately following the test year.

k.        “Projections” -- Estimate of future results of opera- tions based upon known facts or logical assumptions concerning future events.

l.         “Prudently invested” -- Investments which under ordinary circumstances would be deemed reasonable and not dishonest or obviously wasteful. All invest- ments shall be presumed to have been prudently made, and such presumptions may be set aside only by clear and convincing evidence that such invest- ments were imprudent, when viewed in the light of all relevant conditions known or which in the exer- cise of reasonable judgment should have been known, at the time such investments were made.

m.       “Rate schedule” -- A schedule of rates and condi- tions for a specific classification of customer or for other specific services.

n.        “Reconstructed Cost New (RCND) Rate Base” -- An amount consisting of the depreciated reconstruction cost new of the property (exclusive of contributions and/or advances in aid of construction) at the end of the test year, used and useful, plus a proper allow- ance for working capital and including all applicable pro forma adjustments. Contributions and advances in aid of construction, if recorded in the accounts of the public service corporation, shall be increased to a reconstruction new basis.

o.        “Staff” -- The staff of the Commission or its desig- nated representatives.

p.        “Test year” -- The one-year historical period used in determining rate base, operating income and rate of return. The end of the test year shall be the most recent practical date available prior to the filing.

q.        “Utilities” -- For purposes of the Section, utilities are electric, gas, telephone, water, sewer or any other that may be supplying service and/or commod- ities which in the future may be adjudged a public service corporation and under the jurisdiction of this Commission, are classified as follows:

Electric & Gas Water & Sewer Telephone	Class A	Annual Operating Revenue    B                                      C		D	E
	Exceeding	3,000,000 to	1,000,000 to	250,000 to	Less than
	10,000,000	10,000,000	2,999,999	999,999	250,000
	Exceeding	3,000,000 to	1,000,000 to	250,000 to	Less than
	10,000,000	10,000,000	2,999,999	999,999	250,000
	Exceeding	3,000,000 to	1,000,000 to	250,000 to	Less than
	10,000,000	10,000,000	2,999,999	999,999	250,000

Annual operating revenues are those gross utility operating revenues derived from jurisdictional oper- ations, including the requested rate relief. A combi-

nation utility is a utility which provides more than one of the commodities or services enumerated in this subsection. For combination utilities, the annual

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operating revenue, including the requested rate relief, for the specific subsidiary, department, or operating division requesting the rate change shall be used for classification purposes.

r.         “Working capital” -- A proper allowance for cash, materials and supplies and prepayments.

B.       Filing requirements:

schedules should conform to these formats. All other Appendix schedule formats and descriptions are illustra- tive and the applicant’s specific formats may vary from that suggested in the Appendix. The substantive informa- tion requested, both on the Appendix schedule and in the body of this General Order, however, must be contained on the applicant’s schedules together with the titles and schedule numbers provided in the Appendix. Specific information items requested on the Appendix schedules may be omitted without formal waiver, from the filing where it is evident that said items are not applicable to the applicant’s business. The instructions and notes contained on the Appendix schedules shall be followed where appli- cable. Reconstruction Cost New Depreciated information not filed by the applicant shall be deemed waived.

A.       Summary Information:

Information

Filing Required by