NAC704.600. Financing for additions or improvements to plant or providing cash reserve for certain repairs, maintenance or replacements: Surcharge.

     1. When requested by a utility, the Commission will consider a rate surcharge to:

     (a) Finance large additions or improvements to a plant; or

     (b) Provide a cash reserve for the purposes of:

          (1) Funding significant, unanticipated repairs to, or maintenance of, a water supply or wastewater treatment system; or

          (2) Funding significant but nonspecific capital improvements or replacements of capital assets.

     2. In determining whether a surcharge should be authorized, the Commission will consider:

     (a) The need for the additions, improvements, cash reserves, repairs, maintenance or replacements;

     (b) The size, in terms of capital requirements, of the additions, improvements, cash reserves, repairs, maintenance or replacements; and

     (c) The availability of other methods of financing.

     3. The Commission may make such amendments, restrictions or modifications in approving the surcharge as the public interest may require. For the purposes of rate making, all additions, improvements, cash reserves, repairs, maintenance or replacements that are funded by a surcharge will be considered to be a contribution in aid of construction. A rate surcharge will not be authorized unless the utility acknowledges in a written statement to the Commission that the value of the additions, improvements, cash reserves, repairs, maintenance or replacements will not be considered in determining the fair market value of the utility’s entire facility.

     4. Any money collected by a utility pursuant to a rate surcharge authorized by the Commission must be deposited in an account separate from the utility’s other money. The money must be deposited in an interest-bearing account that is federally insured or in any other type of account approved by the Commission. A copy of all statements identifying all deposits and withdrawals must be provided to the Regulatory Operations Staff upon receipt of the statements by the utility.

     5. All withdrawals from the account must be authorized by the Commission.

     6. Not later than March 31 of each year, the Regulatory Operations Staff of the Commission shall present at a meeting of the Commission a report that provides, for each utility authorized by the Commission to collect a rate surcharge pursuant to this section, an accounting for the immediately preceding calendar year of the deposits and withdrawals from the separate account in which the rate surcharge is deposited.

     [Pub. Service Comm’n, Gen. Order 26 § 8, eff. 8-6-80]—(NAC A 10-26-84; A by Pub. Utilities Comm’n by R079-99, 11-16-99; R047-02, 10-24-2002; R178-12, 2-26-2014)