COST OF CAPITAL. 8.1 The Company shall be allowed a return on equity of 9.3 percent.
8.2 The Settling Parties have agreed that a capital structure of 54.4 percent equity and 45.6 debt shall be used for purposes of determining the Company’s revenue requirement in this proceeding.
8.3 The Company shall be allowed a pre-tax weighted cost of capital of 6.87 percent.
8.4 The capital structure and overall cost of debt has been adjusted to reflect the issuance of $150 million in long-term debt in August 2020 at favorable rates, which reduced both PSNH’s cost of debt and its overall cost of capital.
COST OF CAPITAL. The capital structure is based on end-of-year ratios of debt, preferred stock, and common equity. The cost of each capital component is computed using the end-of-year embedded cost of debt and preferred stock and the return on common equity as set forth in the Exhibit No. 1 to this Appendix as the same may be changed subject to appropriate filing with the FERC.
COST OF CAPITAL. 3.1 Aquarion shall be allowed a pre-tax, weighted average cost of capital (“WACC”) of 7.54 percent and the components thereof are calculated as follows: Long-Term Debt 45.57% 5.68% 2.59% Preferred Equity 0.01% 6.00% 0.00% Common Equity 54.42% 9.10% 4.95% WACC 7.54%
3.2 The WACC assumes an average cost of long-term debt at 5.68 percent, which the parties agree shall represent a cap on the cost of long-term debt until the next rate case, notwithstanding the results of the planned long-term debt issuance anticipated by the Company. The Settling Parties further agree that elimination of short-term debt in the capital structure is appropriate from a ratemaking perspective.
COST OF CAPITAL. Holdco commits that future cost of service and rates of KCP&L and Westar shall not be adversely impacted on an overall basis as a result of the Merger and that future cost of service and rates will be set commensurate with financial and business risks attendant to their individual regulated utility operations. Neither KCP&L nor Westar shall seek an increase to their cost of capital as a result of (i.e., arising from or related to) the Merger or KCP&L’s and Westar’s ongoing affiliation with Holdco and its affiliates after the Merger. The return on equity capital (“XXX”) as reflected in Westar’s and KCP&L’s rates will not be adversely affected as a result of the Merger. Holdco agrees the XXX shall be determined in future rate cases, consistent with applicable law, regulations and practices of the Commission. The burden of proof that any increase to the cost of capital is not a result of the Merger shall be borne by KCP&L or Westar. Any net increase in the cost of capital that KCP&L or Westar seeks shall be supported by documentation that: (a) the increases are a result of factors not associated with the Merger or the post-Merger operations of Holdco or its non-KCP&L and non-Westar affiliates; (b) the increases are not a result of changes in business, market, economic or other conditions caused by the Merger or the post-Merger operations of Holdco or its non-KCP&L and non-Westar affiliates; and (c) the increases are not a result of changes in the risk profile of KCP&L or Westar caused by the Merger or the post-Merger operations of Holdco or its non-KCP&L and non-Westar affiliates. The provisions of this section are intended to recognize the Commission’s authority to consider, in appropriate proceedings, whether this Merger or the post-Merger operations of Holdco or its non-KCP&L and non-Westar affiliates have resulted in capital cost increases for KCP&L or Westar. Nothing in this condition shall restrict the Commission from disallowing such capital cost increases from recovery in KCP&L or Westar’s rates.
COST OF CAPITAL. The Parties agree that:
a. Columbia’s authorized return on equity (“XXX”) will be 9.75% for natural gas base rates, which reduces the originally proposed revenue requirement by $3.900 million;
b. Columbia’s long-term debt rate included in the cost of capital will be 4.80%, which reduces the originally proposed revenue requirement by $0.209 million;
c. Columbia’s short-term debt rate included in the cost of capital will be 5.25%;
d. Columbia’s capital structure is 52.64% equity, 45.53% long-term debt and
COST OF CAPITAL. The State will evaluate the risk-adjusted cost of capital inherent in any financing or capital funding strategy. This evaluation will consider the risks associated with the strategy and interest rate sensitivity analysis (to the extent applicable) to estimate the probable and potential cost of the strategy. The evaluation will also require the development of a rationale for the funding strategy that considers not only the economics and risks of the strategy, but also its probable and potential budgetary impact. More particularly: • The State should use tax-exempt debt whenever the interest subsidy inherent therein produces an economic benefit; • The State should compare the cost of capital of any federally authorized bonds that have subsidies or tax credits with traditional tax-exempt bonds; • If the expected use characteristics of a financed facility preclude the use of tax-exempt debt under federal tax law, the State may issue taxable debt and the use of taxable debt will be specifically reviewed by the office of the Attorney General and, if necessary, Bond Counsel prior to issuance; • The State will continue to finance multiple CIP projects within a given bond issuance to reduce issuance costs by consolidating various enabling act authorizations into semi-annual bond sales and using the cash flow method described in Section 4.1 • The State will consider all costs, including any costs specific to variable rate debt such as liquidity and remarketing fees, when evaluating the benefits of variable and fixed rate debt.
COST OF CAPITAL. 3.1 The actual test year capital structure comprised of 49.97% long-term debt and 50.03% common equity shall be adopted.
3.2 A return on common equity of 9.75% and an embedded cost of long-term debt of 4.32%, resulting in a weighted average cost of capital of 7.04%.
3.3 A fair value rate of return of 5.34%, which includes a rate of return on the fair value increment of rate base of 1.00%, shall be adopted.
3.4 The provisions set forth herein regarding the quantification of cost of capital, fair value rate base, fair value rate of return, and the non-fuel revenue requirement are made for purposes of settlement only and should not be construed as admissions against interest or waivers of litigation positions related to other or future cases.
COST OF CAPITAL. 5.1 An original cost of capital structure comprised of 44.2% debt and 55.8% common equity shall be adopted for ratemaking purposes for this Docket.
5.2 A return on common equity of 10.0% and an embedded cost of debt of 5.13% shall be adopted for ratemaking purposes for this Docket.
5.3 The Signing Parties agree to a fair value rate of return of 5.59% for this Docket, which includes a 0.8% return on the fair value increment.
5.4 The provisions set forth herein regarding the quantification of fair value rate base, fair value rate of return, and the revenue requirement are made for purposes of settlement only and should not be construed as admissions against interest or waivers of litigation positions related to other or future cases.
COST OF CAPITAL. Subject to the provisions of Section 6.3(c) and Section 7.2.2 of this Work Letter, a cost of capital charge ("Cost of Capital Charge") equal to (x) four and one-half percent (4.5%) per annum (the "Applicable Rate") calculated on a daily basis (and prorated in the case of partial periods, on the basis of a 360 day year) of (y) all Improvement Costs (other than Cost of Capital Charges) paid by Landlord, from the date each such Improvement Cost is so paid by Landlord until the Commencement Date; provided, however, that Cost of Capital Charges shall also include an amount equal to interest at the Applicable Rate on the total Improvement Costs paid or incurred as of the Commencement Date for the first month of the Early Occupancy Period (defined in Paragraph 4.3 of the Lease).
COST OF CAPITAL. The annual Cost of Capital shall be the greater of (i) the Minimum Capital Charge multiplied by the number of months in such Year that are within the projected period of Market Exclusivity used to compute such Minimum Capital Charge or (ii) the Total Capital Charge. For purposes of calculating the Total Capital charge, the pre-tax cost of capital rate 22% will be applied to the Total Average Assets Employed for KBI-Commercial Production for the Year. Cost of Capital will be charged as a portion of the unitized estimates of the Transfer Price based on the annual KB Budget. Astra corporate headquarters functions are not part of Cost of Capital. The Total Average Assets Employed for KBI-Related Commercial Production for the Year will be determined by the following formula, applied to each manufacturing Site: Total Average Assets Employed for Average Inventory (defined below) plus KBI-Related Commercial Average Gross Fixed Assets (defined below) Production for the Year = plus Cash (defined below) plus accounts receivable (1/12 of sum of 12 month net accounts receivable balances due KB from KBI or any Producer for KBI-Related Commercial Production) Average Inventory = 1/12 of (the sum of 12 months ending inventory of Product Cost of chemical entities and finished and packaged pharmaceutical forms produced by KB for KBI-Related Commercial Production + the sum of 12 months ending inventory of related raw materials and work in process for KBI-Related Commercial Production) Cash = 1/12 of (Product Cost charged to KBI for KBI-Related Commercial Production + Ending KB inventory of KBI chemical entities and finished and packaged pharmaceutical forms for KBI-Related Commercial Production - Beginning KB inventory of KBI chemical entities and finished and packaged pharmaceutical forms for KBI- Related Commercial Production)