PUCT Staff Asks Commission to Address Questions Related to DCRF

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November 4, 2010

PUCT Staff has asked the Commission to address several questions regarding Project No. 38298, Rulemaking Related to Cost Recovery by Electric Utilities of Distribution Costs, during the November 10 open meeting.

As only reported in Matters, the proposed rule would allow distribution companies to enact a Distribution Cost Recovery Factor (DCRF) to recover new distribution costs from REPs outside of full rate cases (Only in Matters, 6/7/10).  The proposed rule would permit distribution service providers to update the DCRF once annually, effective either March 1 or September 1.

Staff asked the Commission to address the following:

• Does the Commission have the authority to adopt the rule proposed in Project No. 38298?  If so, would adoption of the rule constitute good public policy?
• Should a DCRF rule be limited to recovery of costs related only to traditional distribution investment (e.g., poles and wires) or should it additionally provide for recovery of capitalized costs related to items such as system hardening, "Smart Grid" technology, and other information technology such as hardware, software, and communication facilities used in support of electricity distribution?
• Should a DCRF rule take into account a utility's load growth and the related impact on base-rate revenues?

   
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