OAR 860-030-0035: Accounting Rules

(1) “Indirect costs” shall mean: (a) Reasonable expenses which the energy utility incurs in providing to its residential customers information about weatherization programs and other means of saving energy; (b) Reasonable expenses which the energy utility incurs in providing to its residential customers technical advice concerning advantages and disadvantages of various methods of saving energy in the customer’s dwelling unit; (c) Reasonable expenses which the energy utility incurs in providing pre-installation inspection services, cost estimates, and post-installation inspections for its residential customers; (d) Cash payments made to dwelling owners pursuant to ORS 469.633; (e) The interest or other carrying charges resulting from the difference between the interest charges authorized by the Commission, pursuant to ORS 469.633, and the cost of the energy utility’s own funds used to finance weatherization services, or, if the energy utility arranges financing with a commercial lending institution, the difference between the interest charges allowed by the Commission, pursuant to ORS 469.633, and the interest charged by the commercial lending institution; (f) Reasonable carrying charges on the unamortized balance included in the deferred debit account until the unamortized balance is included in the rate base; (g) Any reasonable level of bad debts, including a reasonable level of casualty losses attributable to the services performed under ORS 469.633; (h) Fees charged an energy utility pursuant to ORS 469.185 to 469.225; (i) Tax credits authorized under ORS 469.185 to 469.225; and (j) Reasonable administrative costs of residential energy conservation programs. (2) All other terms shall have the meanings provided in ORS 469.631. (3) The energy utility shall pass on to all its customers the indirect cost incurred pursuant to ORS 469.631 through 469.645, by accounting for the costs as an allowable revenue deduction and by including when applicable the unamortized balance of the accumulated deferred debits associated with indirect costs in the rate base for rate-making purposes. (4) The energy utility shall keep books and accounts to permit the Commission to readily identify all direct and indirect costs incurred in connection with the weatherization program and any other insulation or energy-saving programs. (5) Except for a reasonable level of bad debts, including casualty losses and cash payments to dwelling owners pursuant to ORS 469.333, no direct costs of weatherization services provided to individual space-heating residential customers shall be allowable expenses for rate-making purposes. Direct costs shall be a personal obligation of the owner of the dwelling unit requesting weatherization services. Direct costs include the cost of all materials and labor directly associated with the services. (6) All indirect costs incurred by an energy utility, pursuant to ORS 469.631 through 469.645, shall be placed in a deferred debit account until the Commission issues an order including an appropriate amount of indirect costs in rates. (7) Tax credits authorized under ORS 469.185 to 469.225 and OAR 860-030-0018 shall be accounted for under section (6) of this rule as deferred debits, until each year’s credit is recovered. (8) After an appropriate amount of indirect costs is included in rates, deferred debit accounting shall not be used to recover additional indirect costs unless the energy utility demonstrates that the present level of recovery of indirect costs is inadequate. (9) The amounts of indirect costs accumulated in the deferred debit account may be disposed of by being included in rates by a tracking procedure or by being included in rates upon the issuance of a Commission order. (10) Carrying charges associated with the energy utility’s own funds as defined as subsection (1)(e) of this rule shall be recorded in Account 421, Miscellaneous Nonoperating Income, concurrently with the recording of those costs in the deferred debit account. Carrying charges associated with the balance in the deferred debit account not amortized to operating expenses as defined in subsection (1)(f) of this rule shall be recorded in Account 421, concurrently with their being recorded in the deferred debit account. (11) Income tax normalization procedures shall be used when appropriate for amounts included in the deferred debit account.