3 AAC 52.505. Adjustment clauses for gas utilities

(a) A gas cost adjustment (GCA) for a gas utility must provide for an adjustment, per Mcf of sales, equal to the difference between the utility's gas costs included in its base rates and the utility's projected gas costs according to the following formula:

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where:

C g = the total projected cost of gas for the future period;

B = the balance in the cost-of-gas balancing account;

S g = the projected Mcf sales for the future period; and

and C b = the base cost of gas.

(b) In the formula set out in (a) of this section, the

(1) the balance in the cost-of-gas balancing account must be entered into the GCA calculation and derived on a monthly basis, with the following entries made:

(A) a debit entry equal to the actual monthly amounts for all cost elements approved for recovery under 3 AAC 52.502;

(B) a credit entry equal to the total number of Mcf of gas sold during the month multiplied by the cost of gas per Mcf included in base rates;

(C) a credit entry equal to the total number of Mcf of gas sold during the month multiplied by the actual GCA assessed during that month; and

(D) additional entries that the commission approves on a showing of good cause;

(2) the total projected cost of gas for the future period, and the projected Mcf sales for the future period, must be projected for the future period defined in the utility's GCA methodology approved by the commission; and

(3) in a general rate case, the gas utility must reset the base cost of gas; the reset base cost of gas includes all test year gas costs that the commission approves for recovery through the GCA; however, a gas utility may propose, or the commission may require, that the base cost of gas be set at zero, to permit the entire approved cost of gas to be recovered through the GCA.

History: Eff. 1/11/2004, Register 169

Authority: AS 42.05.141

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