Rate and Regulatory Matters (Notes)

12 Months Ended

Dec. 31, 2019

Public Utilities, Rate Matters [Abstract]

Public Utilities, Disclosure of Rate Matters [Text Block]

RATE AND REGULATORY MATTERS

FERC Developments

On March 21, 2019, the FERC issued a Notice of Inquiry (NOI) in Docket No. PL19-4-000, seeking comments regarding whether and, if so, how FERC should revise its policies for determining the base return on equity (ROE) used in setting rates charged by jurisdictional public utilities. FERC also seeks comment on, among other things, whether FERC should change its ROE policies for interstate natural gas and oil pipelines to align with its policy for electric public utilities. FERC’s action follows a decision from the United States Court of Appeals for the District of Columbia Circuit, which vacated and remanded a series of earlier FERC orders establishing a new base ROE for certain electric transmission owners.  Following that decision, FERC proposed in the remanded proceedings that it rely on four financial models to establish ROEs for the affected utilities rather than rely primarily on its long-used, two-step Discounted Cash Flow model. In the NOI, FERC poses a series of questions and invited comments on this proposed new approach, including whether it should apply the new approach to future proceedings involving interstate natural gas and oil pipeline ROEs. We note that FERC issued an order in November 2019 in a proceeding involving rates for an electric transmission owner that previously had been established based on the orders remanded by the court. In that recent order, FERC decided to rely on two financial models to establish ROEs for the affected utilities: the two-step Discounted Cash Flow model and the Capital Asset Pricing Model, rather than the four financial models discussed in the remanded proceedings. We currently are monitoring this proceeding.

Our next general rate case must be filed for new rates to become effective no later than January 1, 2023.