NAC704.9524. Accounting for and recovery of amounts based on measurable and verifiable effects on revenue caused or created by implementation of programs for energy efficiency and conservation.

     1. An electric utility may recover an amount based on the measurable and verifiable effects on the revenue of the electric utility which are caused or created by the implementation of programs for energy efficiency and conservation described in the demand side plan of the electric utility and approved by the Commission pursuant to NAC 704.9494 as part of the action plan of the electric utility.

     2. To recover an amount pursuant to subsection 1, an electric utility must:

     (a) Establish and maintain a separate subsidiary record of the subaccounts of FERC Account No. 182.3 (Other Regulatory Assets) for the tracking, calculation and recovery of the lost revenue associated with the programs for energy efficiency and conservation that are described in the demand side plan of the electric utility and approved by the Commission pursuant to NAC 704.9494 as part of the action plan of the electric utility.

     (b) At the time the utility files an annual deferred energy accounting adjustment application pursuant to subsection 3 of NRS 704.187:

          (1) Apply to the Commission to establish the following period-specific rates:

               (I) A prospective base lost revenue rate which is determined by allocating lost revenue to each customer class in the manner approved by the Commission in the most recent general rate case of the electric utility. The prospective base lost revenue rate for a customer class is an amount equal to the lost revenue allocated to the customer class pursuant to this sub-subparagraph divided by the projected kilowatt hour sales for that class for the relevant period.

               (II) A deferred lost revenue rate to clear the period-specific balance over 12 months. The deferred lost revenue rate is an amount equal to the period-specific balance in the subaccount of FERC Account No. 182.3 for lost revenue associated with programs for energy efficiency and conservation for each class of customers divided by the applicable test period kilowatt hour sales.

          (2) File a statement that reports the Nevada jurisdictional earned rate of return for each month of the test period for the electric utility. The Nevada jurisdictional earned rate of return must be calculated for each month of the test period on a 12-month average rate base. The statement must be accompanied by all subsidiary schedules, and any adjustments made thereto, necessary to support the calculations.

     3. If the Nevada jurisdictional earned rate of return for the last month of the test period reported for an electric utility pursuant to subparagraph (2) of paragraph (b) of subsection 2 exceeds the rate of return last authorized by the Commission to set rates for the utility, the utility must, at the time the utility files the annual deferred energy accounting adjustment application pursuant to subsection 3 of NRS 704.187:

     (a) File a statement that reports calculations of:

          (1) The amount of revenue which caused the utility to exceed the rate of return last authorized by the Commission;

          (2) A lost revenue adjustment, which must be recorded in a subaccount of FERC Account No. 254; and

          (3) The carrying charges at a monthly rate of 1/12 of the authorized overall rate of return on the lost revenue adjustment calculated in subparagraph (2).

     (b) Establish a rate of credits for lost revenue adjustments attributable to each class of service and which are identified pursuant to the information required to be maintained by subparagraph (4) of paragraph (a) of subsection 5. Any balance which remains in the subaccount of FERC Account No. 254 at the end of the amortization period must be transferred to the lost revenue subaccount of FERC Account No. 182.3 for the current period.

     4. The sum of the lost revenue adjustment calculated in subparagraph (2) of paragraph (a) of subsection 3 and any adjustments for carrying charges made to the lost revenue subaccount of FERC Account No. 254 must not exceed the amount calculated pursuant to subparagraph (1) of paragraph (a) of subsection 3.

     5. An electric utility shall account for period-specific lost revenue associated with a program for energy efficiency and conservation and revenue received from the period-specific base lost revenue rate in the following manner:

     (a) On a monthly basis, the electric utility shall:

          (1) Calculate the deferred lost revenue;

          (2) Calculate the recorded revenue attributable to the base lost revenue rate;

          (3) Record in the subaccount of FERC Account No. 182.3 the difference between estimated lost revenues and recorded revenue attributable to the base lost revenue rate; and

          (4) Maintain sufficiently detailed information to identify the estimated lost revenues attributable to each class of service.

     (b) The electric utility shall apply a carrying charge at the rate of 1/12 of the authorized overall rate of return to the unamortized balance in the lost revenue subaccount of FERC Account No. 182.3. If, in any month, the balance in the lost revenue subaccount of FERC Account No. 182.3 is a debit, an adjustment amount must be calculated in an amount equal to the amount which exceeds the utility’s last authorized rate of return that was used to set rates for the utility or any remainder after the rate of return has been applied to the carrying charge calculation for deferred energy pursuant to NAC 704.150.

     6. An electric utility shall:

     (a) Perform by program by month by class the monitoring and verification of actual kilowatt hour and demand savings required by NAC 704.9522;

     (b) Include with the demand side plan submitted by the utility pursuant to NAC 704.934 the information described in paragraph (a) for review and approval by the Commission; and

     (c) Make any adjustments to the balancing account for lost revenue, including, without limitation, carrying charges, as are necessary to reflect the results of the review by the Commission of the information submitted pursuant to paragraph (b).

     7. For the purposes of this section, “lost revenue adjustment” means the lesser of:

     (a) The amount of revenue calculated as required by subparagraph (1) of paragraph (a) of subsection 3; or

     (b) The estimated lost revenue recorded for the test period.

     (Added to NAC by Pub. Utilities Comm’n by R042-10, eff. 7-22-2010; A by R058-13, 12-23-2013)