Sec. 20.07.04.11. Application for a Qualified Rate Order and Authority to Issue Rate Stabilization Bonds

A. Application. An application filed with the Commission by an electric company for a qualified rate order and authority under Public Utilities Article, §§7-526, 7-533, or 7-534, Annotated Code of Maryland, to issue rate stabilization bonds shall include:

(1) The amount and terms of the proposed qualified rate stabilization bond issue;

(2) The components of the rate stabilization costs;

(3) A proposed qualified rate stabilization charge tariff and expiration date;

(4) A description of any debt or equity securities to be refinanced or retired, including previously issued rate stabilization bonds;

(5) The financial condition of the applicant;

(6) If a contract, agreement, or arrangement has been made for the sale of the rate stabilization bonds proposed to be issued, the contract, agreement, or arrangement described in full and attached to the application;

(7) A calculation showing that the total amount of revenue to be collected under the proposed qualified rate order is less than the rate stabilization costs revenue that would be recovered over the same period using the electric company's weighted cost of capital;

(8) If the application proposes to refinance existing rate stabilization bonds, a calculation showing that the proposed qualified rate stabilization charge required to service the proposed rate stabilization bonds, including anticipated transaction costs, will be less than the future qualified rate stabilization charges required to service the rate stabilization bonds being refunded;

(9) Any specific sections, terms, or conditions to be included in the qualified rate order that the electric company believes appropriate and the reason for each; and

(10) An affidavit made by at least three of the directors of the applicant, showing that it is the intention of the applicant in good faith to use the proceeds of the stabilization bonds for the purposes identified in the application.

B. Notice of Filing of Application.

(1) Within 2 weeks of the filing of an application, and for the next succeeding week, the electric company shall give notice of the filing of an application under §A of this regulation with the Commission by publishing an advertisement in a newspaper of general circulation in each county in the distribution territory served by the company.

(2) The notice shall state:

(a) That the company has filed with the Commission an application for a qualified rate order and authority for a finance subsidiary to issue rate stabilization bonds;

(b) The total amount of rate stabilization bonds the company requested in the application;

(c) The proposed rate stabilization charge and the number of years it will be collected;

(d) That interested persons may send comments to the Commission; and

(e) The Commission's mailing and website addresses.

C. Review and Adjustment of Qualified Rate Stabilization Charges.

(1) Each year that a qualified rate stabilization charge is collected, an electric company shall file with the Commission, 60 days prior to the anniversary of the date of the issuance of any rate stabilization bonds and 30 days following the retirement of any refunded rate stabilization bonds:

(a) A proposed tariff recalculating the qualified rate stabilization charge with supporting data to correct any over-collection or under-collection during the preceding 12 months;

(b) A description of how the proposed tariff will ensure the recovery of amounts sufficient to timely provide all payments of debt service and other required amounts and charges in connection with the rate stabilization bonds; and

(c) All calculations and supporting data for the proposed qualified rate stabilization charge.

(2) An electric company shall perform a true-up of all qualified rate stabilization charges collected to ensure that the authorized amount of qualified rate stabilization costs have been recovered at the end of the period established in the qualified rate order issued by the Commission.