69-3-112. Evaluation of coal or other boiler fuel costs. (1) The purchases of coal or other boiler fuel for the generation of electricity by a public utility from a fuel supplier that is an affiliate of the public utility are subject to review by the commission to enable the commission to determine whether the costs incurred by the public utility are reasonable.
(2) In determining whether the costs incurred are reasonable, the commission shall compare the costs incurred by the public utility to the costs that the public utility would have incurred if the coal or other boiler fuel had been purchased from a different supplier under similar contract terms.
(3) The commission may disallow recovery in the rates charged by the public utility of any amount by which the costs incurred exceed the amount that the commission determines to be reasonable based on the comparison required under subsection (2).
(4) For the purposes of this section, the following definitions apply:
(a) "Affiliate" means a corporation or other entity wholly owned or controlled, directly or indirectly, by the public utility or by a corporation or other entity that wholly owns or controls, directly or indirectly, the public utility.
(b) "Different supplier" means a fuel supplier that is not an affiliate of the public utility that is subject to commission review under this section.
History: En. Secs. 1, 2, Ch. 166, L. 1995.
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