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HomeMy WebLinkAbout08-3501 ord146 ORDINANCE NO. 08-3501 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PLAINVIEW, TEXAS, ADOPTING THE RATE REVIEW MECHANISM TARIFF; ADOPTING A SAVINGS CLAUSE; DETERMINING THAT THIS ORDINANCE WAS PASSED IN ACCORDANCE WITH THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT; DECLARING AN EFFECTIVE DATE; AND REQUIRING DELIVERY OF THIS ORDINANCE TO THE COMPANY AND LEGAL COUNSEL. WHEREAS, the City of Plainview, Texas ("City") is a gas utility customer of Atmos Energy Corp., West Texas Division ("Atmos West Texas" or "the Company"), and a regulatory authority with an interest in the rates and charges of Atmos West Texas; and WHEREAS, the City and similarly situated municipalities working together as the Steering Committee of Cities Served by Atmos West Texas ("Steering Committee") have been in continuing disagreement, dispute, and litigation with the Company over the application of Section 104.301 of the Texas Utilities Code and the interim rate adjustments ("GRIP rate increases") established by the Railroad Commission of Texas; and WHEREAS, pursuant to the terms of the agreement settling the Company's most recent GRIP rate increase, the Steering Committee has made good faith efforts to work with the Company to create an expedited rate review process that is a substitute for the GRIP rate increases; and WHEREAS, the Steering Committee and the Company have agreed upon the Rate Review Mechanism Tariff that provides for an expedited rate review process as a substitute to the current GRIP process instituted by the Texas Legislature and allows cities to conduct a more comprehensive review of all of the information regarding changes to the Company's revenues and expenses as well as its invested capital; and WHEREAS, the expedited rate review process as provided by the Rate Review Mechanism Tariff eliminates piecemeal ratemaking, the Steering Committee's major objection to the current GRIP process. NOW, THEREFORE, the City of Plainview hereby ordains that: SECTION I The findings set forth in this Ordinance are hereby in all things approved. Ordinance No. 08-3501 Atmos Rate Review Page 1 of 3 147 SECTION II The City Council finds that the Rate Review Mechanism Tariff, which is attached hereto and incorporated herein as Exhibit "A", is just and reasonable and is hereby adopted. SECTION III To the extent any resolution or ordinance previously adopted by the City Council is inconsistent with this Ordinance is hereby repealed. ~FC:TIC~N I\/ The meetings at which this Ordinance was approved were in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. SECTION V If any one or more sections or clauses of this Ordinance is adjudged to be unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remaining provisions of this Ordinance and the remaining provisions of the Ordinance shall be interpreted as if the offending section or clause never existed. SECTION VI This Ordinance shall become effective from and after its passage. SECTION VII A copy of this Ordinance shall be sent to Atmos West Texas, care of C.W. "Bill" Guy, at Atmos Energy Corporation, 5110 80th Street, Lubbock, Texas 79424, and to Geoffrey Gay, legal counsel to the Steering Committee, at LLOYD GOSSELINK ,Attorneys at Law, 816 Congress Avenue, Suite 1900, Austin, Texas 78701. PASSED AND APPROVED on first reading this 12th day of August, 2008. PASSED AND APPROVED on second reading this 26t~lay of August, 2008. Joh C. Anderso Mayor AT ST: - ` eli da Hinojosa, City Secreta Ordinance No. 08-3501 Atmos Rate Review Page 2 of 3 148 APPROVED S TO CONTENT: ., Greg ,City Hager APPROVED AS TO FORM: Les ie Spear Pe rce, City Attorney Ordinance No. 08-3501 Atmos Rate Review Page 3 of 3 149 EXHIBIT A 1 TARIFF FOR GAS SERVICE ATMOS ENERGY CORP., WEST TEXAS RATE DIVISION RIDER: Rider RRM -Rate Review Mechanism APPLICABLE TO: West Texas Rate Division REVISION DATE: EFFECTIVE DATE: PAGE: 1 of 10 September 1, 2008 RIDER RRM -RATE REVIEW MECHANISM Purpose: This mechanism is designed to provide annual earnings transparency. All rate calculations under this tariff shall be made on a system wide basis. If, through the implementation of the provisions of this mechanism, it is determined that rates should be decreased or increased, then rates will be adjusted accordingly in the manner set forth herein. The rate adjustments implemented under this mechanism will reflect annual changes in the Company's cost of service and rate base. This adjustment will be authorized for an Initial Implementation Period. With the conclusion of the final rate adjustment, if any, for the Initial Implementation Period, each entity having original jurisdiction may revoke, amend, or approve Subsequent Implementation Period(s) for, the mechanism. Definitions a) The Annual Evaluation Date shall be the date the Company will make its annual filing under this mechanism. The Annual Evaluation Date shall be no later than April 1, of each year. This filing shall be effective in electronic form where practicable. The initial filing shall be made no later than September 1, 2008. b) Audited Financial Data shall mean the Company's books and records related to the Company's West Texas operating area and shared services operations. Audited Financial Data shall not require the schedules and information provided under this tariff to undergo a separate financial audit by an outside auditing firm similar to the Company's annual financial audit. 1 c) The Evaluation Period is defined as the twelve month period ending December 31, of each calendar year. The initial Evaluation Period shall be calendar year 2007. d) The Rate Effective Period is defined as the earlier of the twelve month period for which rates determined under this mechanism will be in effect or subsequent rates are implemented. e) Per Connection Basis is defined as the existing average number of West Texas Rate Division active meters to customers during the Evaluation Period. f) Initial Implementation Period is defined as the three (3) year period commencing with the Company's filing under this mechanism for the calendar year 2007, effective November 15, 2008, and shall conclude with the implementation of rate adjustments, if any, for the third Rate Effective Period. g) Subsequent Implementation Period is defined as any three (3) year period after the conclusion of the Initial Implementation Period. h) Final Order is defined as the most recent order establishing the Company's latest effective rates for the area in which the mechanism is implemented, and shall include municipal rate ordinances and resolutions. 150 EXHIBIT A TARIFF FOR GAS SERVICE ATMOS ENERGY CORP., WEST TEXAS RATE DIVISION RIDER: Rider RRM -Rate Review Mechanism APPLICABLE TO: West Texas Rate Division REVISION DATE: EFFECTIVE DATE: PAGE: 2 of 10 September 1, 2008 Rate Review Mechanism The Company shall file with each regulatory authority having original jurisdiction over the Company's rates the schedules specified below for the Evaluation Period, with the filing to be made by the Annual Evaluation Date following the end of the Evaluation Period. The schedules, which will be based upon the Company's Audited Financial Data, as adjusted, and will include the following: a) Company's 13 month average actual gross plant in service, accumulated depreciation, accumulated defenred income taxes, inventory, working capital, and other rate base components for the Evaluation Period. A 13 month average will be used for these items for the true up calculation; Evaluation Period ending balances for these items will be used for the calculation of rates for the Rate Effective Period. The ratemaking treatments, principles, findings and adjustments included in the Final Order will apply where they are not in conflict or specifically addressed elsewhere in this tariff or the letter agreement. The 4 part allocation methodology as approved for the Mid-Tex Operating Division in GUD 9670 will be used in place of the current 3 part methodology used by the West Texas Operating Division. Regulatory adjustments due to prior regulatory rate base adjustment disallowances will be maintained. The RRM Schedules & Information section of this tariff identifies those ADIT components to be included in the calculation of rate base for both the Evaluation Period and Rate Effective Period calculations. b) The Company's depreciation expense, operating and maintenance expense, and taxes other than income taxes booked in the period will be used for the true-up calculation purposes. Depreciation rates booked in the period will be those approved in the Final Order, or the rate most recently approved. All calculation methodologies will be those approved in the Final Order except where noted or included in this tariff, or in the most recent order addressing the methodology. In addition, the Company shall exclude from operating and maintenance expense the discretionary costs to be disallowed from Rider RRM filings listed in the RRM Schedules and Information section of this tariff. c) Return on Equity (ROE) shall be maintained at 9.6%. d) Cost of debt will reflect actual cost for the Evaluation Period. A 13 month average cost of debt and capital structure will be used for the true up calculation; Evaluation Period ending balances for cost of debt and capital structure will be used for the calculation of rates for the Rate Effective Period. Capital structure will be the actual Evaluation Period ratio of long-term debt and equity, with percentage equity not to exceed 48.1 % equity, based on the calculation methodology outcomes used above. e) All applicable accounting adjustments along with all supporting work papers. Such adjustments may include: 1) Pro-forma adjustments to update and annualize costs and revenue billing determinants for the Rate Effective Period. 151 EXHIBIT A 1 TARIFF FOR GAS SERVICE ATMOS ENERGY CORP., WEST TEXAS RATE DIVISION RIDER: Rider RRM -Rate Review Mechanism APPLICABLE TO: West Texas Rate Division REVISION DATE: EFFECTIVE DATE: PAGE: 3 of 10 September 1, 2008 2) Pro-forma or other adjustments required to properly account for atypical, unusual, or nonrecurring events recorded during the Evaluation Period. f) Shared Services allocation factors shall be recalculated each year based on the latest component factors used during the Evaluation Period, as referenced in (a) above. Calculation of Rate Adjustment a) The Company shall provide additional schedules indicating the following revenue deficiency/sufficiency calculations using the methodology accepted in the Final Order, a 13 month average will be used for the specified items for the true up calculation, Evaluation Period ending balances will be used for the calculation of rates for the Rate Effective Period. These schedules shall identify the rate adjustments necessary for both atrue-up of revenue for the Evaluation Period and the setting of prospective rates for the Rate Effective Period. The net result of these rate adjustments shall be reflected in the proposed new rates to be established for the Rate Effective Period. In calculating the required rate adjustments, such adjustments will be made pro- ratably to the customer charge and usage charge based upon actual revenue generated, as adjusted under the Company's approved Weather Normalization Adjustment (WNA) Rider. Provided, however, that neither the Residential nor the Commercial customer charges may increase more than 20% per year. b) If Company's earnings during the Evaluation Period exceed 9.6% return on common equity, the Company shall calculate a decrease to rates to reduce the revenue required to achieve a return on equity of 9.6% for the Evaluation Period. If Company's earnings during the Evaluation Period are below 9.6% return on common equity, the Company shall calculate an increase in rates to collect the additional revenue required to increase its return on equity for the Evaluation Period to 9.6%. In order to avoid double-counting of true-up revenues, any true-up revenue booked during the Evaluation Period that is related to prior periods will be removed in determining both the prospective rates for the Rate Effective Period and the true-up increase or decrease related to the current Evaluation Period. The RRM Schedule & Information section of this tariff provides an example calculation. After the prospective rates for the Rate Effective Period are calculated, the true-up element shall be added to or deducted from those rates in order to determine the rates that shall thereafter be recovered. The first true-up will be collected between November 15, 2008 and July 31, 2009 to eliminate overlapping true-up periods. c) The Company may also adjust rates for the Rate Effective Period to include recovery of any known and measurable changes to operating and maintenance costs including, but not limited to, all payroll and compensation expense, all benefit expense, all pension expense, insurance costs, materials and supplies, bad debt costs, all medical expense, transportation and building and lease costs for the Rate Effective Period. Provided, however, that adjustments may only be made for costs that are reasonable and necessary. Additionally, utility plant and rate base for the Rate Effective Period will be established by using the Evaluation Period ending balances, including associated changes in depreciation and amortization expense and taxes. In calculating the Company's known and measurable changes for prospective RRM adjustment purposes, the following limitations will apply, on a Per Connection Basis. 152 EXHIBIT A TARIFF FOR GAS SERVICE ATMOS ENERGY CORP., WEST TEXAS RATE DIVISION RIDER: Rider RRM -Rate Review Mechanism APPLICABLE TO: West Texas Rate Division REVISION DATE: EFFECTIVE DATE: PAGE: 4 of 10 September 1, 2008 Operating and Maintenance expenses per connection for the Rate Effective Period cannot increase more than S% per year without specific identification and justification. Any proposed adjustment above S% per year, is subject to the provisions of the Evaluation Procedures of this tariff. Such procedures provide that the regulatory authority will review the proposed adjustment and that the Company and regulatory authority will work collaboratively to seek agreement on the proposed adjustments to the Company's schedules and proposed rates. Justification for such expenditures over the cap shall include an event or combination of events beyond the control of the Company. The beginning adjusted Operation and Maintenance expense per connection for the 2008 RRM Rate Effective Period will be limited to not exceed the final O&M as established for the 12 month period ended December 31, 2007. divided by the connections for the period. The increase in adjusted Operation and Maintenance expenses per connection for the 2009 Rate Effective Period and subsequent Rate Effective periods cannot exceed S% per year, without specific identification and justification. The RRM Schedule & Information section of this tariff provides an example calculation of the S% limit. Net plant investment per connection for the Rate Effective Period cannot increase more than S% per year without specific identification and justification. Any proposed adjustment above S% per year, is subject to the provisions of the Evaluation Procedures of this tariff. Such procedures provide that the regulatory authority will review the proposed adjustment and that the Company and regulatory authority will work collaboratively seek agreement on the proposed adjustments to the Company's schedules and proposed rates. However, in performing a cap test to verify compliance, Company shall exclude any changes in net plant investment associated with federal, state, or local mandates related to safety, compliance, or road moves. The 2007 true-up calculation shall be made using the 13-month average net plant investment established for the period ended December 31, 2007. The initial 2008 prospective rate will be set using net plant established for the 12 months ended December 31, 2007. The rate increase limitations set forth in this tariff shall not preclude the Company from recovering any excluded net plant costs during a subsequent Evaluation Period in which the 5% limitation for net plant investment is not reached or in a subsequent Statement of Intent case. To the extent that the Company seeks to recover any excluded net plant costs during a subsequent Evaluation Period in which the S% limitation for net plant investment is not reached or in a subsequent Statement of Intent case, the Company shall identify these costs as a specific line item in the schedule accompanying the RRM rate adjustment filing. The regulatory authority may disallow any net plant investment that is not shown to be prudently incurred. Approval by the regulatory authority of net plant investment pursuant to the provisions of this tariff shall constitute a finding that such net plant investment was prudently incurred. Such finding of prudence shall not be subject to further review in a subsequent Evaluation Period or Statement of Intent filing. d) The Company also shall provide a schedule demonstrating the "proof of revenues" relied upon to calculate the proposed rate for the Rate Effective Period. The proposed rates shall conform as closely as is practicable to the revenue allocation principles approved in the Final Order. 153 EXHIBIT A TARIFF FOR GAS SERVICE ATMOS ENERGY CORP., WEST TEXAS RATE DIVISION RIDER: Rider RRM -Rate Review Mechanism APPLICABLE TO: West Texas Rate Division REVISION DATE: EFFECTIVE DATE: PAGE: 5 of 10 September 1, 2008 Attestation A sworn statement shall be filed by the Company's Chief Officer in Charge of Mid-Tex Operations affirming that the filed schedules are in compliance with the provisions of this mechanism and are true and correct to the best of his/her knowledge, information and belief. No testimony shall be filed. Evaluation Procedures The regulatory authority having original jurisdiction over the Company's rates shall have no less than ninety (90) days to review the Company's filed schedules and work papers. The Company will be prepared to provide all supplemental information as may be requested to ensure adequate review by the relevant regulatory authority. The Company shall not unilaterally impose any limits upon the provision of supplemental information and such information shall be provided within ten (10) working days of the original request. The regulatory authority may propose any adjustments it determines to be required to bring the schedules into compliance with the above provisions. During and following the ninety (90) day review period and a thirty (30) day response period, the Company and the regulatory authority will work collaboratively and seek agreement on, the proposed adjustments to the Company's schedule and proposed rates. If agreement has been reached by the Company and the regulatory authority, the regulatory authority shall authorize an increase or decrease to the Company's rates so as to achieve the revenue levels indicated for the Rate Effective Period. If, at the end of the thirty (30) day response period, the Company and the regulatory authority have not reached agreement on the proposed adjustments, the Company shall have the right to appeal the regulatory authority's action or inaction to the Railroad Commission of Texas. Upon the filing of any appeal, the Company shall have the right to implement the proposed RRM rate adjustment, subject to refund. If approved by the entity exercising original jurisdiction, the rates established pursuant to the Rate Review Mechanism for the first Rate Effective Period shall be effective for bills rendered on or after November 15, 2008. Thereafter, rates established pursuant to the Rate Review Mechanism for subsequent Rate Effective Periods, if approved as provided herein, shall be effective on August 1 of each year. Reconsideration and Anneal Orders issued pursuant to this mechanism are ratemaking orders and shall be subject to appeal under Sections 102.001(b) and 103.021, et seq., of the Texas Utilities Code (Vernon 2007). Notice Notice of the annual Rate Review Mechanism filing shall be provided pursuant to Section 104.103, TEx. UTIL. CODE A1vty. no later than forty-five (45) days after the Company makes its annual filing pursuant to this tariff. The notice to customers shall include the following information: a) a description of the proposed revision of rates and schedules; 154 EXHIBIT A TARIFF FOR GAS SERVICE ATMOS ENERGY CORP., WEST TEXAS RATE DIVISION RIDER: Rider RRM -Rate Review Mechanism APPLICABLE TO: West Texas Rate Division REVISION DATE: EFFECTNE DATE: PAGE: 6 of 10 September 1, 2008 b) the effect the proposed revision of rates is expected to have on the rates applicable to each customer class and on an average bill for each affected customer; c) the service area or areas in which the proposed rate adjustment would apply; d) the date the proposed rate adjustment was filed with the regulatory authority; and e) the Company's address, telephone number and website where information concerning the proposed rate adjustment may be obtained. RRM Schedules and Information Accumulated Deferred Income Tax ("ADIT") Items To Be Recognized in Rate Base The following list identifies those ADIT components to be included in the calculation of rate base for both the Evaluation Period and Rate Effective Period calculations: WTX Rate Division:Gas Plant in Service Insurance Accruals Benefit Accruals Deferred Expense Projects Allowance for Doubtful Accounts Customer Advances Regulatory Asset -West Texas Regulatory Liability -West Texas Other Plant 155 EXHIBIT A 1 TARIFF FOR GAS SERVICE ATMOS ENERGY CORP., WEST TEXAS RATE DIVISION RIDER: Rider RRM -Rate Review Mechanism APPLICABLE TO: West Texas Rate Division REVISION DATE: EFFECTIVE DATE: PAGE: 7 of 10 September 1, 2008 Accumulated Deferred Income Tax ("ADIT) Items To Be Recognized in Rate Base (continuedl: SSU -Customer Support: Gas Plant in Service SSU -General Office: Gas Plant in Service Insurance Accruals Benefits Accruals Deferred Expense Projects Prepaid Expenses Regulatory Liability - Atmos 109 FAS 115 Adjustment Treasury Lock Adjustment State Bonus Depreciation R & D Credit Valuation Allowance Other Plant Discretionary Costs to Be Disallowed from Rider RRM filings The following types of employee reimbursed expenses and directly incurred costs are to be removed from all expense and rate base amounts included within Rider RRM filings for the Evaluation Period and for the Rate Effective Period: Amounts incurred for travel, meals or entertainment of employee spouses. Amounts for air travel that exceed published commercial coach air fares. Amounts incurred for hotel rooms exceeding $250 per night inclusive of taxes and fees assessed on such rooms. Amounts for alcoholic beverages. Amounts paid for admission to entertainment, sports, art or cultural events, and all event sponsorship costs. Amounts for social club dues or fees. 156 TARIFF FOR GAS SERVICE EXHIBIT A **FOR ILLUSTRATION PURPOSES ONLY. AMOUNTS ARE HYPOTHETICAL, AND DO NOT CORRESPOND WITH OTHER EXAMPLE SCHEDULES** $150,000 $156,000 $157,700 $158,200 $158,700 RIDER: Rider RRM -Rate Review Mechanism APPLICABLE TO: West Texas Rate Division REVISION DATE: EFFECTIVE DATE: PAGE: 8 of 10 September 1, 2008 Example Calculation A -Revenue for RRM True-Up Portion of Rate Per Books Revenue, excluding True-Up Revenue from prior Evaluation Periods Per-Books True-Up Revenue based on 2007 Evaluation Period [ 1 ] Per-Books True-Up Revenue based on 2008 Evaluation Period [ 1 ] Per-Books True-Up Revenue based on 2009 Evaluation Period [ 1 ] Total Per-Books Revenue Add / (Subtract): Revenue from Riders GCR, FF, & TAX Surcharges for Rate Case Cost Recovery True-Up Revenue for 2007 Evaluation Period [ 1 ] True-Up Revenue for 2008 Evaluation Period [1] Remove out-of-period and unusual items Realized Revenue for True-Up Calculation Revenue Requirement at 9.6% ROE [2] ATMOS ENERGY CORP., WEST TEXAS RATE DIVISION 800 1,200 (364) (546) 234 351 $150,000 $156,800 $158,536 $157,888 $159,051 (llo,ooo) (lll,ooo> (112,000) (200) (200) (200) (800) (1,200) 364 39,800 44,800 45,500 41,800 43,890 46,085 True-Up Increase (Decrease), subject to Revenue- Related Tax Gross-up $ 2,000 $ (910) $ 585 [ 1 ] For illustration purposes, example assumes 40% of the total calculated true-up is collected in the following calendar year. Each true-up is subject to a proof of collection or refund after the collection/refund period, and any residual amount will be refunded or collected in the subsequent period. [2] Since realized revenue for the true-up calculation excludes Riders GCR, FF, and TAX, as well as surcharges for rate case cost recovery, the revenue requirement for purposes of the true-up calculation also excludes all corresponding expenses for the Evaluation Period. Calendar Calendar Calendar Calendar Calendar 2007 2008 2009 2010 2011 157 EXHIBIT A 1 TARIFF FOR GAS SERVICE ATMOS ENERGY CORP., WEST TEXAS RATE DIVISION RIDER: Rider RRM -Rate Review Mechanism APPLICABLE TO: West Texas Rate Division REVISION DATE: EFFECTIVE DATE: PAGE: 9 of 10 September 1, 2008 Example Calculation B -Revenue for RRM Prospective Portion of Rate **FOR ILLUSTRATION PURPOSES ONLY. AMOUNTS ARE HYPOTHETICAL, AND DO NOT CORRESPOND WITH OTHER EXAMPLE SCHEDULES** C 1 Rate Effective Period Revenue Price-Out at Current Rates [1] Remove True-Up Portion of Revenue [2] Revenue at Current Rates for Rate Effective Period Deficiency Calculation Revenue Requirement for Rate Effective Period Oct 2008 -Sept July 15, 2009 - July 15, 2010 - 2009 July 14, 2010 July 14, 2011 60,000 $ 65,000 $ 68,000 (2,500) 1,100 60,000 62,500 69,100 65,000 68,250 71,663 Rate Effective Period Revenue Increase / (Decrease) before True-Up, subject to Revenue Tax Gross-Up [3] $ 5,000 $ 5,750 $ 2,563 [ 1 ] To be calculated using pro-forma annualized billing determinants, as provided for in this tariff, priced out at the current rates at the time of the deficiency calculation. [2] To be calculated using pro-forma annualized billing determinants, as provided for in this tariff, priced out at the portion of current rates at the time of the deficiency calculation intended to true up prior Evaluation Period(s). [3] This represents the prospective deficiency portion of the RRM adjustment. The true-up adjustment, demonstrated in Example Calculation A, will be combined with this adjustment to determine the total adjustment for the Rate Effective Period. 158 TARIFF FOR GAS SERVICE EXHIBIT A ATMOS ENERGY CORP., WEST TEXAS RATE DIVISION RIDER: Rider RRM -Rate Review Mechanism APPLICABLE TO: West Texas Rate Division REVISION DATE: EFFECTIVE DATE: PAGE: 10 of 10 September 1, 2008 Example Calculation C -Operation & Maintenance Expense Cap Test **All Amounts are Hypothetical, and do not correspond with other example calculations** Evalulation Period (Calendar Year) 2007 2008 2009 Benchmark O&M Per Connection (increased 5% annually) $ 97.23 $ 102.09 $ 107.19 Gas Service Connections [1] 1,553,000 1,560,000 1,567,000 Maximum 08~M Allowed $ 151,000,000 $ 159,260,400 $ 167,966,730 [ 1 J For illustration purposes only, Gas Service Connections are estimated for 2007 and are assumed to increase 7,000 connections per year. Therefore, `Maximum O&M Allowed' is estimated for 2008 and 2009. Actual Gas Service Connections for 2007 will be used to calculate the 2007 O&M per Connection. For each subsequent Evaluation Period, the prior period O&M per Connection will be increased by 5%, and then multiplied by the actual Gas Service Connections for the same period to derive the `Maximum O&M Allowed'.