NAC704.220. Computation of carrying charge.

A utility which plans to seek recovery of variable interest expense or dividends shall compute a carrying charge on the average monthly debit or credit balance in the subaccount of FERC Account No. 182.3 or in FERC Account No. 254, whichever is applicable, at the end of each month as follows:

     1. The carrying charge must be debited or credited to the subaccount of FERC Account No. 182.3 or to FERC Account No. 254, whichever is applicable, at the rate of one-twelfth of the overall rate of the return which was last authorized by the Commission for the particular department or division of the utility, adjusted for federal income tax applicable to the equity component of the overall rate of return computed at the applicable statutory rate. The rate of carrying charge must be applied to the entire balance in the subaccount or account, net of applicable accumulated deferred income taxes, as follows:

Carrying charge = (carrying charge rate) X (average deferred variable interest expense balance for the month) X (1 - statutory income tax rate)

     2. The contra entries for the carrying charge must be made to an appropriate subaccount of FERC Account No. 419 (Interest and Dividend Income) or FERC Account No. 431 (Other Interest Expense).

     3. All carrying charges must be recorded in a separate subaccount entitled Carrying Charge for Recovery of Variable Interest Expense or Dividends.

     (Added to NAC by Pub. Service Comm’n, eff. 3-3-92; A by Pub. Utilities Comm’n by R051-09, 1-28-2010)