NAC704.79985. Application for authorization of proposed transaction: Inclusion of information on effect on costs and rates.

An application for the authorization of a proposed transaction must include information relating to the anticipated effect of the proposed transaction on the costs and rates, including, without limitation:

     1. A detailed description and explanation of all of the costs related to the proposed transaction, including, without limitation:

     (a) The cost of the transaction, the cost for transition and any premium for the acquisition; and

     (b) The manner in which the parties to the proposed transaction propose to treat such costs for the purposes of accounting and determining rates.

     2. A detailed explanation of the manner in which the proposed transaction will result in gains in efficiency and reductions in costs, and the magnitude of those gains and reductions. The explanation must describe:

     (a) The methods which the parties to the proposed transaction will use to measure the gains in efficiency that will result from the proposed transaction, including, without limitation, references to other transactions in which the methods have been used, and a description and an evaluation of the use of the methods in those transactions; and

     (b) The manner in which the parties to the proposed transaction will assign the gains in efficiency to the ratepayers of each party, including, without limitation, an explanation of the policy reasons for the assignment and examples, using realistic scenarios, of the quantitative effect of the assignment.

     3. An analysis of the effect of the proposed transaction on the rates of the customers of the parties to the proposed transaction and a description of the appropriate measures, if any, that will be taken to protect the current rates from increases associated with the proposed transaction, including, without limitation:

     (a) If the parties to the proposed transaction intend to protect the current rates of its customers, a general provision pursuant to which the parties will hold the customers of the resulting energy utility harmless, such as a commitment from the parties that they will protect the customers from any adverse effects on rates for a significant period as determined by the parties and the methodology that will be used to ensure that the hold-harmless provision is enforceable and administratively manageable;

     (b) A cap on rates pursuant to which the parties to the proposed transaction agree to refrain from increasing rates for their customers under certain tariffs for a significant period as determined by the parties;

     (c) A reduction in rates pursuant to which the parties to the proposed transaction agree to file an application to reduce rates for their customers for a significant period as determined by the parties; and

     (d) Any other measure that the parties to the proposed transaction will use to mitigate any adverse effects of the proposed transaction on their customers.

     4. A description of the jurisdictional allocation of the costs and benefits related to the proposed transaction that will inure to the customers of the parties to the proposed transaction whose rates are subject to the jurisdiction of a regulatory agency of another state and the Federal Energy Regulatory Commission.

     5. A copy of the current tariffs of the parties to the proposed transaction filed with the Commission and any proposed changes to the tariffs that will be needed upon the completion of the proposed transaction.

     6. A description of the likely effects of the proposed transaction on shareholders and bondholders of each company.

     (Added to NAC by Pub. Utilities Comm’n by R128-98, eff. 12-3-99)