§ 39-1-27.4 Transition charges authorized.– (a) An electric distribution company that purchases power at wholesale from awholesale power supplier under an all requirements contract shall be authorizedto execute an agreement terminating, in whole or in part, such all requirementscontracts on terms that require payment of a contract termination fee complyingwith the requirements in subsection (b) and notwithstanding any otherprovisions of this title, shall be allowed to recover such payment through anonbypassable transition charge paid by all customers of the electricdistribution company. Any nonregulated power producer may pay all or a part ofits customers' transition charges.
(b) The contract termination fee paid by the electricdistribution company to its wholesale power supplier shall include the electricdistribution company's share of its wholesale supplier's costs associated withthe following:
(1) Regulatory assets related to the generation businesswhich include costs for which recovery has been deferred to the future inaccordance with prior rate cases or settlements approved by regulators, orconsistent with regulatory precedent; regulatory assets of affiliated fuelsuppliers; and transition obligations for post-retirement health care costs ofthe wholesale supplier; and
(2) Nuclear obligations including decommissioning costs andnuclear costs independent of operation. Transition costs attributable tonuclear decommissioning must be deposited in unit specific decommissioningtrust funds or returned to customers if not needed. Nuclear costs independentof operation shall mean estimated nuclear operation and maintenance expensesthat would be incurred assuming the nuclear units were to permanently ceaseoperating on December 31, 1997; and
(3) Above market payments to power suppliers for purchasedpower contracts of the wholesale power supplier in place as of December 31,1995 together with reasonable payments of the wholesale power supplier to buyout of these contracts or to reduce payments pursuant to them; and
(4) The net unrecovered commitments and capital costs of allgenerating plants owned directly or indirectly by the electric distributioncompany and its wholesale power supplier as of December 31, 1995, whether ornot such generating plants are operating, including natural gas conversioncosts and above market pipeline demand charges. Except as provided above, nooperation or maintenance expenses associated with existing fossil fired orhydroelectric generating facilities may be included in contract terminationfees to be recovered by electric distribution companies from customers throughtransition charges.
(c) Because of the uncertainty associated with the timing andamounts to be paid pursuant to subsections (b)(2) (with the exception ofnuclear costs independent of operation) and (b)(3) above, the termination feeto the wholesale supplier and the related transition charge to the electricdistribution company's customers shall continue until these liabilities havebeen satisfied with an annual reconciliation of estimated to actual expenses.Because the items specified in subsections (b)(1) and (b)(4) can be determinedwith certainty or reasonably estimated and the nuclear costs independent ofoperation can be reasonably estimated, no annual reconciliation is necessaryfor these items. However, to moderate the rate impact of these items, recoverythrough the transition charge will be spread over the period from July 1, 1997through December 31, 2009, with a return on the unamortized balance asspecified in subsection (d) of this section; effective January 1, 2010, thereshall be no allowance for these items in the transition charges billed byelectric distribution companies.
(d) In recognition of the potential for a positive residualvalue of existing generating facilities at the conclusion of the amortizationperiod in the year 2010, the return on equity allowed on the unamortizedbalance of subsections (b)(1) and (b)(4) of this section paid to the wholesalesupplier and recoverable from customers of the electric distribution companyshall be limited to one percentage point plus the average rate of return on BBBrated long term utility bonds issued during the six (6) month period Julythrough December, 1996.
(e) Notwithstanding any other provisions of this section,other than subsection (g), for the period July 1, 1997 to December 31, 2000 thenonbypassable transition charge implemented by such electric distributioncompany shall recover an amount equal to two and eight-tenths of a cent(2.8¢) per kilowatt-hour transmitted or distributed. After the year 2000,the transition charge recoverable from customers shall be established by thecommission in an amount sufficient to recover the costs authorized in thissection with an adjustment for any over or under recoveries of the contracttermination fees occurring during the period July 1, 1997 to December 31, 2000.The adjustment under this subsection shall be made in a manner the commissiondetermines appropriate.
(f) Any wholesale power supplier receiving contracttermination fees with respect to power purchase contracts pursuant tosubsection (b)(3) shall offer to sell, buy down, or assign to others, througheither public bid or private negotiation, at least the portion of suchcontracts attributable to its affiliated electric distribution company. To theextent that bids received or terms negotiated would, on an expected valuebasis, lower the transition charges paid by ultimate customers in Rhode Island,the wholesaler power supplier shall use all reasonable means to consummate suchsale, buydown, or assignment and upon completion shall promptly fileappropriate adjustments to the contract termination fees in place at that time.To provide an incentive for wholesale power suppliers to obtain the bestpossible terms for any such sale, buydown, or assignment, they shall be allowedto retain ten percent (10%) of the savings expected to be realized by customersas a result of such sale, buydown, or assignment. The amount of any incentivepayment shall be fixed at the time of the sale, buydown, or assignment based onestimated data and recovered in equal payments over the remaining term of therelated power purchase contract with appropriate adjustments for the time valueof money.
(g) Every wholesale power supplier receiving contracttermination fees pursuant to this section shall, subject to receipt of allnecessary regulatory approvals, subject its electric generating facilities,other than nuclear units or entitlements, as of January 1, 1996, to a form ofmarket valuation through lease, sale, spin-off or other method. The wholesalepower supplier shall select the valuation methodology utilized which may be forall the generating facilities as a group, groups of generating facilities, orindividual generating facilities. The wholesale power supplier shall meet itsobligations under this section by leasing, selling, spinning off or otherwisedisposing of at least a fifteen percent (15%) interest in its electricalgenerating facilities, other than nuclear units or entitlements; provided,however, if, pursuant to a requirement in connection with electric industryrestructuring in another state prior to completion of the valuation pursuant tothis subsection, a wholesale power supplier subject to this subsection isrequired to sell, spin-off, or otherwise dispose of more than a fifteen percent(15%) ownership interest in its electric generating facilities, other thannuclear units or entitlements, then the same requirement, including relatedtiming requirements, shall apply in the state and the market valuationresulting from fulfilling that requirement shall be used in determining theadjustment to the contract termination fee required by this subsection. Oncethe wholesale power supplier determines the percentage interest in itselectrical generating facilities that it will lease, sell, spin-off orotherwise submit to market valuation to meet its obligation under thissubsection, the company shall develop an implementation methodology toaccomplish the lease, sale, spin-off or other disposition of interest that isreasonably likely to approximate the market value of the generation assets. Theimplementation methodology shall be filed with the commission on or before July1, 1997 for the commission to review and approve or reject no later than ninety(90) days after submittal. The commission shall approve such implementationmethodology unless the commission finds, after public hearing, the methodologyis not reasonably likely to approximate the market value of the company'sgenerating assets taking into consideration the restrictions included inmortgage indentures and the need to satisfy the requirements of regulatoryauthorities outside the state. Promptly after commission approval of theimplementation methodology companies subject to this section must submit forregulatory review, applications for the approvals necessary to commence suchvaluation. In addition, companies subject to this section shall also providethe commission with quarterly status reports on the progress of proceedingsbefore other regulatory agencies associated with the implementation of thissection. The valuation required by this section shall be completed within six(6) months after: (1) retail access is available to forty percent (40%) or moreof the kilowatt-hour sales in New England or (2) the receipt of all necessaryregulatory approval for such valuation, whichever occurs later, provided,however, the commission may extend the deadline for completing such valuationby no more than six (6) months if it determines that such an extension is inthe public interest. Upon completion of such valuation, the wholesale powersupplier, together with its affiliated electric distribution company shall fileto adjust the contract termination fees in place at the time such valuation iscomplete as necessary to reflect the electric distribution company's share ofsuch market valuation in the transition charge paid by ultimate customers inRhode Island. Any such adjustment shall be net of the estimated revenue lost bythe wholesale power supplier as a result of retail access during the periodprior to completion of such valuation, the electric distribution company'sshare of prudently incurred capital investments made after December 31, 1995,which were reasonably necessary to (i) enable the electrical generatingfacilities to operate safely and in compliance with applicable laws andregulations, (ii) improve environmental performance or to increase fueldiversity or flexibility, with regulatory authorization, reasonable transactioncosts, (including the cost of refinancing), and revenue lost as a result of thereduced return on equity specified in subsection (d). For purposes of thissection, the unreduced return on equity that will be used prospectively and tovalue the revenue lost prior to the adjustment shall be the return on equityallowed to the wholesale power supplier's affiliated electric distributioncompany as of December 31, 1995, and shall be included in the wholesale powersupplier's overall capital structure following the valuation. Any adjustment tothe contract termination fee pursuant to this subsection shall be reflected inthe termination fee otherwise calculated in accordance with subsection (b) ofthis section as a uniform adjustment spread equally over the period beginningwith the date the adjustment is made and ending December 31, 2009.
§ 39-1-27.4 Transition charges authorized.– (a) An electric distribution company that purchases power at wholesale from awholesale power supplier under an all requirements contract shall be authorizedto execute an agreement terminating, in whole or in part, such all requirementscontracts on terms that require payment of a contract termination fee complyingwith the requirements in subsection (b) and notwithstanding any otherprovisions of this title, shall be allowed to recover such payment through anonbypassable transition charge paid by all customers of the electricdistribution company. Any nonregulated power producer may pay all or a part ofits customers' transition charges.
(b) The contract termination fee paid by the electricdistribution company to its wholesale power supplier shall include the electricdistribution company's share of its wholesale supplier's costs associated withthe following:
(1) Regulatory assets related to the generation businesswhich include costs for which recovery has been deferred to the future inaccordance with prior rate cases or settlements approved by regulators, orconsistent with regulatory precedent; regulatory assets of affiliated fuelsuppliers; and transition obligations for post-retirement health care costs ofthe wholesale supplier; and
(2) Nuclear obligations including decommissioning costs andnuclear costs independent of operation. Transition costs attributable tonuclear decommissioning must be deposited in unit specific decommissioningtrust funds or returned to customers if not needed. Nuclear costs independentof operation shall mean estimated nuclear operation and maintenance expensesthat would be incurred assuming the nuclear units were to permanently ceaseoperating on December 31, 1997; and
(3) Above market payments to power suppliers for purchasedpower contracts of the wholesale power supplier in place as of December 31,1995 together with reasonable payments of the wholesale power supplier to buyout of these contracts or to reduce payments pursuant to them; and
(4) The net unrecovered commitments and capital costs of allgenerating plants owned directly or indirectly by the electric distributioncompany and its wholesale power supplier as of December 31, 1995, whether ornot such generating plants are operating, including natural gas conversioncosts and above market pipeline demand charges. Except as provided above, nooperation or maintenance expenses associated with existing fossil fired orhydroelectric generating facilities may be included in contract terminationfees to be recovered by electric distribution companies from customers throughtransition charges.
(c) Because of the uncertainty associated with the timing andamounts to be paid pursuant to subsections (b)(2) (with the exception ofnuclear costs independent of operation) and (b)(3) above, the termination feeto the wholesale supplier and the related transition charge to the electricdistribution company's customers shall continue until these liabilities havebeen satisfied with an annual reconciliation of estimated to actual expenses.Because the items specified in subsections (b)(1) and (b)(4) can be determinedwith certainty or reasonably estimated and the nuclear costs independent ofoperation can be reasonably estimated, no annual reconciliation is necessaryfor these items. However, to moderate the rate impact of these items, recoverythrough the transition charge will be spread over the period from July 1, 1997through December 31, 2009, with a return on the unamortized balance asspecified in subsection (d) of this section; effective January 1, 2010, thereshall be no allowance for these items in the transition charges billed byelectric distribution companies.
(d) In recognition of the potential for a positive residualvalue of existing generating facilities at the conclusion of the amortizationperiod in the year 2010, the return on equity allowed on the unamortizedbalance of subsections (b)(1) and (b)(4) of this section paid to the wholesalesupplier and recoverable from customers of the electric distribution companyshall be limited to one percentage point plus the average rate of return on BBBrated long term utility bonds issued during the six (6) month period Julythrough December, 1996.
(e) Notwithstanding any other provisions of this section,other than subsection (g), for the period July 1, 1997 to December 31, 2000 thenonbypassable transition charge implemented by such electric distributioncompany shall recover an amount equal to two and eight-tenths of a cent(2.8¢) per kilowatt-hour transmitted or distributed. After the year 2000,the transition charge recoverable from customers shall be established by thecommission in an amount sufficient to recover the costs authorized in thissection with an adjustment for any over or under recoveries of the contracttermination fees occurring during the period July 1, 1997 to December 31, 2000.The adjustment under this subsection shall be made in a manner the commissiondetermines appropriate.
(f) Any wholesale power supplier receiving contracttermination fees with respect to power purchase contracts pursuant tosubsection (b)(3) shall offer to sell, buy down, or assign to others, througheither public bid or private negotiation, at least the portion of suchcontracts attributable to its affiliated electric distribution company. To theextent that bids received or terms negotiated would, on an expected valuebasis, lower the transition charges paid by ultimate customers in Rhode Island,the wholesaler power supplier shall use all reasonable means to consummate suchsale, buydown, or assignment and upon completion shall promptly fileappropriate adjustments to the contract termination fees in place at that time.To provide an incentive for wholesale power suppliers to obtain the bestpossible terms for any such sale, buydown, or assignment, they shall be allowedto retain ten percent (10%) of the savings expected to be realized by customersas a result of such sale, buydown, or assignment. The amount of any incentivepayment shall be fixed at the time of the sale, buydown, or assignment based onestimated data and recovered in equal payments over the remaining term of therelated power purchase contract with appropriate adjustments for the time valueof money.
(g) Every wholesale power supplier receiving contracttermination fees pursuant to this section shall, subject to receipt of allnecessary regulatory approvals, subject its electric generating facilities,other than nuclear units or entitlements, as of January 1, 1996, to a form ofmarket valuation through lease, sale, spin-off or other method. The wholesalepower supplier shall select the valuation methodology utilized which may be forall the generating facilities as a group, groups of generating facilities, orindividual generating facilities. The wholesale power supplier shall meet itsobligations under this section by leasing, selling, spinning off or otherwisedisposing of at least a fifteen percent (15%) interest in its electricalgenerating facilities, other than nuclear units or entitlements; provided,however, if, pursuant to a requirement in connection with electric industryrestructuring in another state prior to completion of the valuation pursuant tothis subsection, a wholesale power supplier subject to this subsection isrequired to sell, spin-off, or otherwise dispose of more than a fifteen percent(15%) ownership interest in its electric generating facilities, other thannuclear units or entitlements, then the same requirement, including relatedtiming requirements, shall apply in the state and the market valuationresulting from fulfilling that requirement shall be used in determining theadjustment to the contract termination fee required by this subsection. Oncethe wholesale power supplier determines the percentage interest in itselectrical generating facilities that it will lease, sell, spin-off orotherwise submit to market valuation to meet its obligation under thissubsection, the company shall develop an implementation methodology toaccomplish the lease, sale, spin-off or other disposition of interest that isreasonably likely to approximate the market value of the generation assets. Theimplementation methodology shall be filed with the commission on or before July1, 1997 for the commission to review and approve or reject no later than ninety(90) days after submittal. The commission shall approve such implementationmethodology unless the commission finds, after public hearing, the methodologyis not reasonably likely to approximate the market value of the company'sgenerating assets taking into consideration the restrictions included inmortgage indentures and the need to satisfy the requirements of regulatoryauthorities outside the state. Promptly after commission approval of theimplementation methodology companies subject to this section must submit forregulatory review, applications for the approvals necessary to commence suchvaluation. In addition, companies subject to this section shall also providethe commission with quarterly status reports on the progress of proceedingsbefore other regulatory agencies associated with the implementation of thissection. The valuation required by this section shall be completed within six(6) months after: (1) retail access is available to forty percent (40%) or moreof the kilowatt-hour sales in New England or (2) the receipt of all necessaryregulatory approval for such valuation, whichever occurs later, provided,however, the commission may extend the deadline for completing such valuationby no more than six (6) months if it determines that such an extension is inthe public interest. Upon completion of such valuation, the wholesale powersupplier, together with its affiliated electric distribution company shall fileto adjust the contract termination fees in place at the time such valuation iscomplete as necessary to reflect the electric distribution company's share ofsuch market valuation in the transition charge paid by ultimate customers inRhode Island. Any such adjustment shall be net of the estimated revenue lost bythe wholesale power supplier as a result of retail access during the periodprior to completion of such valuation, the electric distribution company'sshare of prudently incurred capital investments made after December 31, 1995,which were reasonably necessary to (i) enable the electrical generatingfacilities to operate safely and in compliance with applicable laws andregulations, (ii) improve environmental performance or to increase fueldiversity or flexibility, with regulatory authorization, reasonable transactioncosts, (including the cost of refinancing), and revenue lost as a result of thereduced return on equity specified in subsection (d). For purposes of thissection, the unreduced return on equity that will be used prospectively and tovalue the revenue lost prior to the adjustment shall be the return on equityallowed to the wholesale power supplier's affiliated electric distributioncompany as of December 31, 1995, and shall be included in the wholesale powersupplier's overall capital structure following the valuation. Any adjustment tothe contract termination fee pursuant to this subsection shall be reflected inthe termination fee otherwise calculated in accordance with subsection (b) ofthis section as a uniform adjustment spread equally over the period beginningwith the date the adjustment is made and ending December 31, 2009.
§ 39-1-27.4 Transition charges authorized.– (a) An electric distribution company that purchases power at wholesale from awholesale power supplier under an all requirements contract shall be authorizedto execute an agreement terminating, in whole or in part, such all requirementscontracts on terms that require payment of a contract termination fee complyingwith the requirements in subsection (b) and notwithstanding any otherprovisions of this title, shall be allowed to recover such payment through anonbypassable transition charge paid by all customers of the electricdistribution company. Any nonregulated power producer may pay all or a part ofits customers' transition charges.
(b) The contract termination fee paid by the electricdistribution company to its wholesale power supplier shall include the electricdistribution company's share of its wholesale supplier's costs associated withthe following:
(1) Regulatory assets related to the generation businesswhich include costs for which recovery has been deferred to the future inaccordance with prior rate cases or settlements approved by regulators, orconsistent with regulatory precedent; regulatory assets of affiliated fuelsuppliers; and transition obligations for post-retirement health care costs ofthe wholesale supplier; and
(2) Nuclear obligations including decommissioning costs andnuclear costs independent of operation. Transition costs attributable tonuclear decommissioning must be deposited in unit specific decommissioningtrust funds or returned to customers if not needed. Nuclear costs independentof operation shall mean estimated nuclear operation and maintenance expensesthat would be incurred assuming the nuclear units were to permanently ceaseoperating on December 31, 1997; and
(3) Above market payments to power suppliers for purchasedpower contracts of the wholesale power supplier in place as of December 31,1995 together with reasonable payments of the wholesale power supplier to buyout of these contracts or to reduce payments pursuant to them; and
(4) The net unrecovered commitments and capital costs of allgenerating plants owned directly or indirectly by the electric distributioncompany and its wholesale power supplier as of December 31, 1995, whether ornot such generating plants are operating, including natural gas conversioncosts and above market pipeline demand charges. Except as provided above, nooperation or maintenance expenses associated with existing fossil fired orhydroelectric generating facilities may be included in contract terminationfees to be recovered by electric distribution companies from customers throughtransition charges.
(c) Because of the uncertainty associated with the timing andamounts to be paid pursuant to subsections (b)(2) (with the exception ofnuclear costs independent of operation) and (b)(3) above, the termination feeto the wholesale supplier and the related transition charge to the electricdistribution company's customers shall continue until these liabilities havebeen satisfied with an annual reconciliation of estimated to actual expenses.Because the items specified in subsections (b)(1) and (b)(4) can be determinedwith certainty or reasonably estimated and the nuclear costs independent ofoperation can be reasonably estimated, no annual reconciliation is necessaryfor these items. However, to moderate the rate impact of these items, recoverythrough the transition charge will be spread over the period from July 1, 1997through December 31, 2009, with a return on the unamortized balance asspecified in subsection (d) of this section; effective January 1, 2010, thereshall be no allowance for these items in the transition charges billed byelectric distribution companies.
(d) In recognition of the potential for a positive residualvalue of existing generating facilities at the conclusion of the amortizationperiod in the year 2010, the return on equity allowed on the unamortizedbalance of subsections (b)(1) and (b)(4) of this section paid to the wholesalesupplier and recoverable from customers of the electric distribution companyshall be limited to one percentage point plus the average rate of return on BBBrated long term utility bonds issued during the six (6) month period Julythrough December, 1996.
(e) Notwithstanding any other provisions of this section,other than subsection (g), for the period July 1, 1997 to December 31, 2000 thenonbypassable transition charge implemented by such electric distributioncompany shall recover an amount equal to two and eight-tenths of a cent(2.8¢) per kilowatt-hour transmitted or distributed. After the year 2000,the transition charge recoverable from customers shall be established by thecommission in an amount sufficient to recover the costs authorized in thissection with an adjustment for any over or under recoveries of the contracttermination fees occurring during the period July 1, 1997 to December 31, 2000.The adjustment under this subsection shall be made in a manner the commissiondetermines appropriate.
(f) Any wholesale power supplier receiving contracttermination fees with respect to power purchase contracts pursuant tosubsection (b)(3) shall offer to sell, buy down, or assign to others, througheither public bid or private negotiation, at least the portion of suchcontracts attributable to its affiliated electric distribution company. To theextent that bids received or terms negotiated would, on an expected valuebasis, lower the transition charges paid by ultimate customers in Rhode Island,the wholesaler power supplier shall use all reasonable means to consummate suchsale, buydown, or assignment and upon completion shall promptly fileappropriate adjustments to the contract termination fees in place at that time.To provide an incentive for wholesale power suppliers to obtain the bestpossible terms for any such sale, buydown, or assignment, they shall be allowedto retain ten percent (10%) of the savings expected to be realized by customersas a result of such sale, buydown, or assignment. The amount of any incentivepayment shall be fixed at the time of the sale, buydown, or assignment based onestimated data and recovered in equal payments over the remaining term of therelated power purchase contract with appropriate adjustments for the time valueof money.
(g) Every wholesale power supplier receiving contracttermination fees pursuant to this section shall, subject to receipt of allnecessary regulatory approvals, subject its electric generating facilities,other than nuclear units or entitlements, as of January 1, 1996, to a form ofmarket valuation through lease, sale, spin-off or other method. The wholesalepower supplier shall select the valuation methodology utilized which may be forall the generating facilities as a group, groups of generating facilities, orindividual generating facilities. The wholesale power supplier shall meet itsobligations under this section by leasing, selling, spinning off or otherwisedisposing of at least a fifteen percent (15%) interest in its electricalgenerating facilities, other than nuclear units or entitlements; provided,however, if, pursuant to a requirement in connection with electric industryrestructuring in another state prior to completion of the valuation pursuant tothis subsection, a wholesale power supplier subject to this subsection isrequired to sell, spin-off, or otherwise dispose of more than a fifteen percent(15%) ownership interest in its electric generating facilities, other thannuclear units or entitlements, then the same requirement, including relatedtiming requirements, shall apply in the state and the market valuationresulting from fulfilling that requirement shall be used in determining theadjustment to the contract termination fee required by this subsection. Oncethe wholesale power supplier determines the percentage interest in itselectrical generating facilities that it will lease, sell, spin-off orotherwise submit to market valuation to meet its obligation under thissubsection, the company shall develop an implementation methodology toaccomplish the lease, sale, spin-off or other disposition of interest that isreasonably likely to approximate the market value of the generation assets. Theimplementation methodology shall be filed with the commission on or before July1, 1997 for the commission to review and approve or reject no later than ninety(90) days after submittal. The commission shall approve such implementationmethodology unless the commission finds, after public hearing, the methodologyis not reasonably likely to approximate the market value of the company'sgenerating assets taking into consideration the restrictions included inmortgage indentures and the need to satisfy the requirements of regulatoryauthorities outside the state. Promptly after commission approval of theimplementation methodology companies subject to this section must submit forregulatory review, applications for the approvals necessary to commence suchvaluation. In addition, companies subject to this section shall also providethe commission with quarterly status reports on the progress of proceedingsbefore other regulatory agencies associated with the implementation of thissection. The valuation required by this section shall be completed within six(6) months after: (1) retail access is available to forty percent (40%) or moreof the kilowatt-hour sales in New England or (2) the receipt of all necessaryregulatory approval for such valuation, whichever occurs later, provided,however, the commission may extend the deadline for completing such valuationby no more than six (6) months if it determines that such an extension is inthe public interest. Upon completion of such valuation, the wholesale powersupplier, together with its affiliated electric distribution company shall fileto adjust the contract termination fees in place at the time such valuation iscomplete as necessary to reflect the electric distribution company's share ofsuch market valuation in the transition charge paid by ultimate customers inRhode Island. Any such adjustment shall be net of the estimated revenue lost bythe wholesale power supplier as a result of retail access during the periodprior to completion of such valuation, the electric distribution company'sshare of prudently incurred capital investments made after December 31, 1995,which were reasonably necessary to (i) enable the electrical generatingfacilities to operate safely and in compliance with applicable laws andregulations, (ii) improve environmental performance or to increase fueldiversity or flexibility, with regulatory authorization, reasonable transactioncosts, (including the cost of refinancing), and revenue lost as a result of thereduced return on equity specified in subsection (d). For purposes of thissection, the unreduced return on equity that will be used prospectively and tovalue the revenue lost prior to the adjustment shall be the return on equityallowed to the wholesale power supplier's affiliated electric distributioncompany as of December 31, 1995, and shall be included in the wholesale powersupplier's overall capital structure following the valuation. Any adjustment tothe contract termination fee pursuant to this subsection shall be reflected inthe termination fee otherwise calculated in accordance with subsection (b) ofthis section as a uniform adjustment spread equally over the period beginningwith the date the adjustment is made and ending December 31, 2009.
