1984 RES 4502 - Laserfiche WebLink

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the Utility adopt a "balancing account" approach to accounting for the variances in power costs and the determination of an appropriate PCABF. This approach is based on the premise that the PCA would not be changed until the cumulative balance in the balancing account is either greater or less than a predetermined account maximum or minimum. The methodology for determining the PCABF necessary to bring the balancing account back in line would be similar to the method originally used to determine the Base Power Rate (BPR). Costs and sales would be estimated for the recovery period in which the balanc- ing account is to be brought back within the parameters. The balanc- ing account balance would be added to (if negative) or subtracted from (if positive) the estimated costs. The resulting figure would then be divided by the estimated sales for that period. This revised Average Power Cost would be compared to the BPR with the difference becoming the PCABF for the next period or until the account balance is again outside a parameter. At such time the adjustment procedure would be repeated. The recommended maximum and minimum balancing account para- meters are $200,000 and $-50,000, respectively with a BPR of 8.47 cents per kwh. These maximum and minimum account parameters were es- tablished based upon an examination of historical power costs and fund balances. We recommend that the opeation of the PCA and balancing ac- count be watched closely to determine if adjustment to those para- meters is necessary. Calculations for the PCABF will be made as shown in example Table V-2 attached.