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applied to preferred stock could be used to determine the cost of debt and its flotation cost.
(ii) Where a company issued privately placed preferred stock that was not rated, the rating applied to debt could be used to determine the cost of preferred stock and its flotation costs.
(iii) In the case where all issues were privately placed, the current average yield on all newly issued debt or preferred could be used to determine the cost of debt or preferred respectively, and an average flotation cost, for debt or preferred, could be used.
(C) Evidence Requirements. Copies of this calculation with notations as to the source of the data must be submitted.
FOOTNOTES (1) Ibbotson, R.E. and R.A. Sinquefield, Stocks, Bonds, Bills, and Inflation, Charlottesville, Va.: The Financial Analysts Research Foundation, 1977, cited by Ernst & Whinney, Costs of Capital and Rates of Return for Industrial Firms and Class A&B Electric Utility Firms, June 1979, p. 3-8.
(2) As an option, Rp tcan be developed with the following equation:
(b)) contains example fuel price and inflation indices based on the latest data appearing in the Energy Information Administration's (EIA) Annual Energy Outlook (AEO).
The fuel price and inflation indices will change yearly with the publication of the AEO. Revisions shall become effective after final publication. However, the relevant set of parameters for a specific petition for exemption will be the set in effect at the time the petition is submitted or the set in effect at the time a decision is rendered, whichever is more favorable to the petitioner.
(b) Computation of Fuel Price and Inflation Indices.
(1) the Petitioner is responsible for computing the annual fuel price and inflation indices by using Equation II-1 and Equation II2, respectively. The petitioner may compute the fuel price index specified in Equation II1 or use his own price index. However, if he uses his own price index, the source or the derivation of the index must be fully documented and be contained in the evidential summary.
EQ II-2 is:
P; PX; =
360- ND 12 where: Dt=The average annual yield on three
month U.S. Treasury bills reported in the Survey of Current Business auctioned in month t—which is reported using the
bank discount method. N=Number of days to maturity. [46 FR 59920, Dec. 7, 1981)
APPENDIX II TO PART 504-FUEL PRICE
year i. P;=Price of fuel in year i.
IX=The inflation index in year i.
base year. (2) The parameters to be used in EQ II-1 are the Base Case fuel price projections found in EIA's current AEO.
(3) When computing annual inflation indices, the petitioner is to use the Base Case National Macroeconomic Indicators (NIPA GNP Price Deflator) contained in EIA's current AEO. If necessary, the petitioner must rebase the projection to the same year used for the fuel price projections. For example, in 1989 AEO projects the price deflator in 1982 dollars; this must be rebased to the year in which the petition is filed. The methodology used to rebase the inflation indices must follow standard statistical procedures and must be fully documented within the petition. This index will remain frozen at the last year of the AEO's projection for the remainder of the unit'(s) useful life.
(4) Table II-1 is provided as an example of and coal. It also contains annual inflation the application of equations II–1 and 11-2. indices. These values were computed from This table contains annual fuel price indices information contained in Table A3 and Table for distillate oil, residual oil, natural gas, All of EIA'S AEO, 1989.
TABLE 11-1: PRICE AND INFLATION INDICES FOR USE IN THE COST CALCULATIONS
(C) Fuel Price Computation.
(1) The delivered price of the proposed fuel to be burned (FPB) must reflect the real escalation rate of the proposed fuel, and must be computed with Equation EQ II-3. EQ-II-3 is: FPB;=MPB (PX;] where: FPB;=Price of the proposed fuel (distillate
oil, residual oil, or natural gas) in year i. MPB=The current delivered market price
of the proposed fuel. PX=The fuel price index value in year i,
computed with Equation II–1. or:
(2) When planning to use more than one fuel in the proposed unit(s), the petitioner must use Equation II-1 and Equation II-3 to calculate the annual fuel price of each fuel to be used. The petitioner then must estimate the proportion of each fuel to be burned annually over the useful life of the unit(s). With these proportions and the respective annual fuel prices for each fuel, the petitioner must compute an annual weighted average fuel price. The methodology used to calculate the weighted average fuel price must follow standard statistical procedures and be fully documented within the petition.
(d) Fuel Price Computation-Alternate Fuel. The delivered price of alternate fuel (PFA) must reflect the real escalation rate of alternate fuel and must be computed with Equation II-4. Equation II-4 is:
PFA;=APFxapx where: PFA=The price of the alternate fuel in
year i. APF-i=The current market price of the al
ternate fuel f.0.b. the facility). APX;=The alternate fuel price index value
for year i, computed with Equation II-1. In most cases the alternate fuel will be coal. The petitioner must use Equation II-1 (paragraph (b)) to compute the escalation rate (APX;). If an alternate fuel other than coal is proposed the source or the derivation of the index must be fully documented and be contained in the evidential summary. (54 FR 52896, Dec. 22, 1989)
PART 508 [RESERVED]
PART 516 [RESERVED]
PART 580-CURTAILMENT PRIOR
ITIES FOR ESSENTIAL AGRICUL-
SOURCE: 44 FR 15646, Mar. 15, 1979, unless otherwise noted. $580.01 Purpose.
The purpose of this part is to implement the authority granted to the Secretary of Energy in section 401 of the Natural Gas Policy Act of 1978, Public Law 95-621, 92 Stat. 3394-3395 (1978).
$ 580.02 Definitions.
(a) Terms defined in section 2 of the Natural Gas Policy Act of 1978 shall have the same meaning, as applicable, for purposes of this part, unless further defined in paragraph (b) of this section.
(b) The following definitions are applicable to this part:
(1) Commercial establishment means any establishment, (including institutions and local, state and federal government agencies) engaged primarily in the sale of goods or services, where natural gas is used for purposes other than those involving manufacturing or electric power generation.
(2) Essential agricultural use means any use of natural gas:
(i) For agricultural production, natural fiber production, natural fiber processing, food processing, food quality maintenance, irrigation pumping, crop drying; or
(ii) As a process fuel or feedstock in the production of fertilizer, agricultural chemicals, animal feed, or food which the Secretary of Agriculture determines is necessary for full food and fiber production.
(3) Essential agricultural user means any person who uses natural gas for an essential agricultural use as defined in paragraph (b)(2) of this section.
(4) Hospital means a facility whose primary function is delivering medical care to patients who remain at the facility, including nursing and convalescent homes. Outpatient clinics or doctors' offices are not included in this definition.
(5) High-priority use means any use of natural gas by a high-priority user as defined in paragraph (a)(6) of this section.
(6) High-priority user means, in no specific order, any person who uses natural gas:
(i) In a residence, or
(ii) In a commercial establishment in amounts of less than 50 Mcf on a peak day, or
(iii) In any school or hospital; or
(iv) For minimum plant protection when operations are shut down, for police protection, for fire protection, in a sanitation facility, in a correctional facility, or for emergency situations pursuant to 18 CFR 2.78(a)(4).
(7) Interstate pipeline means any person engaged in natural gas transportation subject to the jurisdiction of the Federal Energy Regulatory Commission under the Natural Gas Act.
(8) Residence means a dwelling using natural gas predominately for residential purposes such as space heating, air conditioning, hot water heating, cooking, clothes drying, and other residential uses, and includes apartment buildings and other multi-unit residential buildings.
(9) School means a facility, the primary function of which is to deliver instruction to regularly enrolled students in attendance at such facility. Facilities used for both educational and non-educational activities are not included under this definition unless the latter are merely incidental to the delivery of instruction.
$580.03 Curtailment priorities.
(a) Notwithstanding any provision of law other than section 401(b) of the Natural Gas Policy Act of 1978, or any other rule, regulation, or order of the Department of Energy, the Federal Energy Regulatory Commission or their predecessor agencies, and to the maximum extent practicable, no curtailment plan of an interstate pipeline may provide for curtailment of deliveries of natural gas for any essential agricultural use, unless:
(1) Such curtailment does not reduce the quantity of natural gas delivered for such use below the use requirement certified by the Secretary of Agriculture under section 401(c) of the Natural Gas Policy Act of 1978 in order to meet the requirements of full food and fiber production; or
(2) Such curtailment is necessary in order to meet the requirements of high-priority users; or
(3) The Federal Energy Regulatory Commission, in consultation with the Secretary of Agriculture, determines, by rule or order issued pursuant to section 401(b) of the Natural Gas Policy Act of 1978, that use of a fuel (other than natural gas) is economically practicable and that the fuel is reasonably available as an alternative for such essential agricultural use.
(b) Any essential agricultural user who also qualifies as a high-priority user shall be a high-priority user for purposes of paragraph (a) of this section.
(c) The specific relative order of priority for all uses and users of natural gas, including high-priority and essential agricultural uses and users, shall remain as reflected in effective curtailment plans of interstate pipelines filed with the Federal Energy Regulatory Commission to the extent that the relative order of priorities does not conflict with paragraph (a) of this section.
(d) Nothing in this rule shall prohibit the injection of natural gas into storage by interstate pipelines or deliveries to its customers for their injection into storage unless it is demonstrated to the Federal Energy Regulatory Commission that these injections or deliveries are not reasonably necessary to meet the requirements of high-priority users or essential agricultural uses.
$ 580.04 Administrative
PART 590—ADMINISTRATIVE PRO
CEDURES WITH RESPECT TO THE
Subpart A-General Provisions Sec. 590.100 OMB Control Numbers. 590.101 Purpose and scope. 590.102 Definitions. 590.103 General requirements for filing doc
uments with FE. 590.104 Address for filing documents. 590.105 Computation of time. 590.106 Dockets. 590.107 Service. 590.108 Off-the-record communications. 590.109 FE investigations. Subpart B-Applications for Authorization
to Import or Export Natural Gas 590.201 General. 590.202 Contents of applications. 590.203 Deficient applications. 590.204 Amendment or withdrawal of appli
cations. 590.205 Notice of applications. 590.206 Notice of procedures. 590.207 Filing fees. 590.208 Small volume exports. 590.209 Exchanges by displacement.
Subpart C-Procedures 590.301 General 590.302 Motions and answers. 590.303 Interventions and answers. 590.304 Protests and answers. 590.305 Informal discovery. 590.306 Subpoenas. 590.307 Depositions. 590.308 Admissions of facts. 590.309 Settlements. 590.310 Opportunity for additional proce
dures. 590.311 Conferences. 590.312 Oral presentations. 590.313 Trial-type hearings. 590.314 Presiding officials. 590.315 Witnesses. 590.316 Shortened proceedings. 590.317 Complaints.
Subpart D-Opinions and Orders 590.401 Orders to show cause. 590.402 Conditional orders. 590.403 Emergency interim orders. 590.404 Final opinions and orders. 590.405 Transferability. 590.406 Compliance with orders.
590.407 Reports of changes.
it opposes an application or other re
quested action. Subpart E-Applications for Rehearing
(c) Decisional employee means the As590.501 Filing.
sistant Secretary, presiding officials at 590.502 Application is not a stay.
conferences, oral presentations 590.503 Opinion and order on rehearing. trial-type hearings, and any other em590.504 Denial by operation of law.
ployee of the DOE, including consult590.505 Answers to applications for rehear ants and contractors, who are, or may ing
reasonably be expected to be, involved AUTHORITY: Secs. 301(b), 402(1), and 644, in the decision-making process, includPub. L. 95-91, 91 Stat. 578, 585, and 599 (42 ing advising the Assistant Secretary on U.S.C. 7151(b), 7172(f), and 7254), Sec. 3, Act of
the resolution of issues involved in a June 21, 1938, c. 556, 52 Stat. 822 (15 U.S.C.
proceeding. The term includes those 717b); E.O. 12009 (42 FR 46267, September 15,
employees of the DOE assisting in the 1977); DOE Delegation Order Nos. 0204-111 and 0204-127 (49 FR 6684, February 22, 1984; 54 FR
conduct of trial-type hearings by per11437, March 20, 1989).
forming functions on behalf of the As
sistant Secretary or presiding official. SOURCE: 54 FR 53531, Dec. 29, 1989, unless
(d) DOE means the Department of otherwise noted.
Energy, of which FE is a part.
(e) DOE Act means the Department of Subpart A-General Provisions
Energy Organization Act, Public Law 8590.100 OMB Control Numbers.
95-91, 91 Stat. 565 (42 U.S.C. 7101 et seq.).
(f) FE means the Office of The AssistThe information collection require
ant Secretary for Fossil Energy. ments contained in this part have been
(g) FERC means the Federal Energy approved by the Office of Management Regulatory Commission. and Budget under Control No. 1903-0081. (h) Interested person means a person, 8590.101 Purpose and scope.
other than a decisional employee,
whose interest in a proceeding goes beThe purpose of this part is to estab yond the general interest of the public lish the rules and procedures required as a whole and includes applicants, into be followed by persons to obtain au tervenors, competitors of applicants, thorizations from DOE to import or ex and other individuals and organizaport natural gas under the Natural Gas tions, including non-profit and public Act and by all other persons interested interest organizations, and state, local, in participating in a natural gas im and other public officials, with a proport or export proceeding before the prietary, financial or other special inagency. This part establishes the pro terest in the outcome of a proceeding. cedural rules necessary to implement The term does not include other federal the authorities vested in the Secretary agencies or foreign governments and of Energy by sections 301(b) and 402(1) their representatives, unless the agenof the DOE Act, which have been dele
cy, foreign government, or representagated to the Assistant Secretary.
tive of a foreign government is a party $590.102 Definitions.
to the proceeding.
(i) Natural gas means natural gas and As used in this part:
mixtures of natural gas and synthetic (a) Assistant Secretary means the As natural gas, regardless of physical form sistant Secretary for Fossil Energy or or phase, including liquefied natural any employee of the DOE who has been gas and gels primarily composed of delegated final decisional authority. natural gas.
(b) Contested proceeding means a pro (j) NGA means the Natural Gas Act of ceeding:
June 21, 1938, c. 556, 52 Stat. 821 (15 (1) Where a protest or a motion to in U.S.C. 717 et seq.). tervene, or a notice of intervention, in (k) Off-the-record communication opposition to an application or other means a written or oral communicarequested action has been filed, or tion not on the record which is rel
(2) Where a party otherwise notifies evant to the merits of a proceeding, the Assistant Secretary and the other and about which the parties have not parties to a proceeding in writing that been given reasonable prior notice of