Income on Depreciation Fund Investments

PURPOSE: This rule prescribes the use of income on investments from depreciation funds and the means for accounting for that income. (1) In the process of determining the reasonableness of rates for service, income shall be determined on the depreciation funds of the gas, electric, water, telephone, and heating utilities per taining to their properties used and useful in the public service in Missouri and shall be applied in reduction of the annual charges to operating income of those utilities. (2) The income from the investment of monies in depreciation funds shall be computed at the rate of three percent (3%) per annum of the principal amount of the depreciation funds. (3) The principal amount of depreciation funds of any such utility, for the purposes of this rule, shall be deemed to be equivalent to the balance in the depreciation reserve account of any such utility regardless of whether or not any such de preciation reserve account may be represented by a segregated AND INSURANCE fund ear-marked for that purpose; provided, however, that the principal amount of the depreciation funds may be adjusted by the portion(s) of funds which may have been provided under circumstances other than by charges to operating income or otherwise, these adjustments to be subject to the approval of the commission. The terms depreciation funds and depreci ation reserve accounts shall be deemed to include the terms retirement funds and retirement reserve accounts. (4) The rate of three percent (3%) per annum referred to in sec tion (3) shall be applied in the case of each gas, electric, water, telephone, and heating utility of Missouri; provided, however, that modification of the rate may be made upon the commis sion’s own motion or upon proper showing by a utility that the rate is not reasonably and equitably applicable to it. (5) Affected utilities shall prepare and include in their annual reports to the commission, and, in the reports that may be required by the commission from time-to-time, schedules showing for the year or period covered by these reports the income from the investment of monies in depreciation funds. The schedules referred to shall be in the form prescribed by this commission and shall include, among other things that may be prescribed, the principal amount of depreciation funds as represented by balances in depreciation reserve accounts, any adjustments of the depreciation funds and accounts with com plete details and explanations of them, and the amount of the income from the investment of monies in depreciation funds computed at the rate of three percent (3%) per annum or such other rate as may be prescribed by order of this commission. (6) The commission shall retain jurisdiction in this matter for the purpose of making any change(s) in the interest rate pre scribed in section (2) that may be warranted. AUTHORITY: sections 392.280 and 393.260, RSMo 2016.* This rule originally filed as 4 CSR 240-10.020. Original rule filed Dec. 19, 1975, effective Dec. 29, 1975. Amended: Filed Nov. 7, 2018, effective July 30, 2019. Moved to 20 CSR 4240-10.020, effective Aug. 28, 2019. *Original authority: 392.280, RSMo 1939, amended 1987, 1993 and 393.260, RSMo 1939, amended 1967.