Records and Charges. Section 2.1 Records All services rendered under this Agreement will be provided at actual cost thereof. Records will be maintained for each department and division of the Provider Company in order to accumulate all costs of doing business and to determine the cost of service. These costs will include wages and salaries of employees and related expenses such as insurance, taxes, pensions and other employee welfare expenses, and rent, light, heat, telephone, supplies, and other housekeeping costs. In addition, records will be maintained of general administrative expenses, which will include the costs of operating the Provider Company as a corporate entity. The Provider Company shall maintain adequate books and records with respect to the transactions subject to this Agreement to specifically identify costs subject to allocation, particularly with respect to their origin. In addition, the records must be adequately supported in a manner sufficient to justify recovery of the costs in the rates of the Receiving Company. The Provider Company shall be responsible for maintaining internal controls to ensure the costs associated with transactions covered by the Agreement are properly and consistently allocated and billed in accordance with the terms and provisions of this Agreement. The Receiving Company shall maintain its books and records so that the amounts billed by the Provider Company can be readily determined. Section 2.2 Charges Costs charged to the Receiving Company by the Provider Company will either be direct charges or allocated charges and be subject to the guidelines below: i. Tariffed rates or other pricing mechanisms established by rate setting authorities shall be used to provide all regulated services. ii. Services not covered by (i) shall be charged by the Provider Company to the Receiving Company at fully distributed cost. iii. Facilities and administrative services rendered to a rate-regulated affiliate shall be charged on the following basis: (1) the prevailing price for which the service is provided for sale to the general public by the Provider Company (i.e., the price charged to non- affiliates if such transactions with non-affiliates constitute a substantial portion of the Provider Company’s total revenues from such transactions) or, if no such prevailing price exists, (2) an amount not to exceed the fully distributed cost incurred by the Provider Company in providing such service to the Receiving Company. services associated with the related asset or services, and overhead amounts. Costs associated with direct charges shall not be included in the costs that are allocated. Allocated costs shall be charged to the Receiving Company in accordance with the following four-factor allocation methodology for each service: Factor Weight Net Plant 25% Customer Count 25% Non-Labor Expenses 25% Labor 25% When XXX provides services that benefit the entire company, i.e., Algonquin Power Co, and LUC’s regulated utilities, these costs are allocated using the following methodologies, which are designed to closely align the costs with the driver of the activity. Type of Cost Allocation Methodology Rationale Examples Risk Management Net Plant 33.3% Revenue 33.3% O&M 33.3% This function is driven by factors which reflect the relative size and complexity of Risk Management - Revenues, Net Plant and O&M costs. Software platform, fees and administration Information Technology Number of Employees 90% O&M 10% IT function is driven by factors which include number of employees and O&M. The larger the number of employees, the more support, software and IT infrastructure is required. Enterprise wide support, architecture, etc. Third party fees Human Resources Number of Employees 100% HR function is driven by number of employees. A greater number of employees requires additional HR support HR policies, payroll processing, benefits, employee surveys Training Number of Employees 100% Training is directly proportional to the number of employees per function Courses, lectures, in house training sessions by third party providers Facilities and Building Rent Square Footage 100% Office space occupied accurately reflects space requirements of each subsidiary Corporate office building Financial Reporting and Administration Revenue 33.3% O&M 33.3% Net Plant 33.3% This function is driven by factors which reflect the relative size and complexity of Financial Reporting and Admin. - Revenues, Net Plant and Employee labor and related administration and third party fees O&M costs. Environment, Health, Safety and Security Number of Employees 100% EHSS training, etc. is directly proportional to the number of employees per function Enterprise wide programs, employee labor and related administration Legal Costs Net Plant 33.3% Number of Employees 33.3% O&M 33.3% This function is driven by factors which include Net Plant, as typically the higher the value of plant, the more legal work it attracts; similarly, a greater number of employees are typically more indicative of larger facilities that require greater levels of attention; and O&M costs tend to be a third factor indicative of size and legal complexity. Employee labor and related administration and programs, including third party legal Treasury Capital Expenditures 25% O&M 50% Net Plant 25% Treasury activity is typically guided by the amount of necessary capex/plant for each utility, and operating costs/cashflow Third party financing, employee labor and related administration and programs Internal Audit Net Plant 25% O&M 75% This function is driven by factors which reflect the relative size and complexity of Internal audit activity. Larger Plant and operating costs drive of a given facility drive more activity from IA. Third party fees, employee labor and related administration and programs Procurement O&M 50% Capital Expenditures 50% Procurement function is based on typical proportion of expenditures Enterprise wide support and related administration Communications Number of Employees 100% Communications cost is directly proportional to the number of employees Enterprise wide support and related administration See Attachment A.
Appears in 3 contracts
Samples: Cost Allocation Agreement, Cost Allocation Agreement, Affiliate Services Agreement
Records and Charges. Section 2.1 Records All services rendered under this Agreement will be provided at actual cost thereof. Records will be maintained for each department and division of the Provider Company in order to accumulate all costs of doing business and to determine the cost of service. These costs will include wages and salaries of employees and related expenses such as insurance, taxes, pensions and other employee welfare expenses, and rent, light, heat, telephone, supplies, and other housekeeping costs. In addition, records will be maintained of general administrative expenses, which will include the costs of operating the Provider Company as a corporate entity. Hourly rates for employees shall be fully loaded, i.e., will include wages/salaries of employees and related expenses such as insurance, taxes, pensions and other employee welfare expenses. Employee costs not included within the fully loaded hourly rate, e.g., a worker’s compensation claim, shall be charged to the utility that the employee is dedicated to or if such employee is shared among all utilities shall be allocated under the HR driver set forth below in Section 2.2. The Provider Company shall maintain adequate books and records with respect to the transactions subject to this Agreement to specifically identify costs subject to allocation, particularly with respect to their origin. In addition, the records must be adequately supported in a manner sufficient to justify recovery of the costs in the rates of the Receiving Company. The Provider Company shall be responsible for maintaining internal controls to ensure the costs associated with transactions covered by the Agreement are properly and consistently allocated and billed in accordance with the terms and provisions of this Agreement. The Receiving Company shall maintain its books and records so that the amounts billed by the Provider Company can be readily determined.
Section 2.2 Charges Costs charged to the Receiving Company by the Provider Company will either be direct charges or allocated charges and be subject to the guidelines below:
i. Tariffed rates or other pricing mechanisms established by rate setting authorities shall be used to provide all regulated services.
ii. Services not covered by (i) shall be charged by the Provider Company to the Receiving Company at fully distributed cost.
iii. Facilities and administrative services rendered to a rate-regulated affiliate shall be charged on the following basis:
(1) the prevailing price for which the service is provided for sale to the general public by the Provider Company (i.e., the price charged to non- affiliates if such transactions with non-affiliates constitute a substantial portion of the Provider Company’s total revenues from such transactions) or, if no such prevailing price exists, (2) an amount not to exceed the fully distributed cost incurred by the Provider Company in providing such service to the Receiving Company. Direct charges shall include direct labor, direct materials, direct purchased services associated with the related asset or services, and overhead amounts. Costs associated with direct charges shall not be included in the costs that are allocated. Allocated costs shall be charged to the Receiving Company in accordance with the following four-factor allocation methodology factors for each service: Factor Weight Net Plant 25% Customer Count 25% Non-Labor Expenses 25% Labor 25% When XXX provides services that benefit the entire company, i.e., Algonquin Power Co, and LUC’s regulated utilities, these costs are allocated using the following methodologies, which are designed to closely align the costs with the driver of the activity. Type of Cost Service Allocation Methodology Rationale Examples Risk Management Net Plant 33.3Customer Care and Billing Customer count 100% Revenue 33.3% O&M 33.3% This function is driven by factors which reflect Customer count accurately reflects the relative size resource requirements of the Customer Care and complexity of Risk Management - Revenues, Net Plant Billing group Customer Care and O&M costs. Software platform, fees Billing employees and administration Information Technology related administrations IT/Tech Support Number of Employees 90100% O&M 10% IT function is driven by factors which include Technical support requirements are related to the number of employees Tech support staff, associated administration, and O&M. The larger the number of employeesrequired software, the more support, software and IT infrastructure is required. Enterprise wide support, architecturehardware, etc. Third party fees Human Resources Number of Employees 100% HR function is driven by number of employees. A greater number of employees requires additional HR support HR policies, payroll processing, benefits, employee surveys Training Gas Control Net Plant 100% The greater the plant, the more control required Gas Control labor, administration, and associated programs Legal Net Plant 33.3% Number of Employees 100% Training is directly proportional to the number of employees per function Courses, lectures, in house training sessions by third party providers Facilities and Building Rent Square Footage 100% Office space occupied accurately reflects space requirements of each subsidiary Corporate office building Financial Reporting and Administration Revenue 33.3% O&M 33.3% Net Plant 33.3% This function is driven by factors which reflect Allocated based on the relative size of affiliate and complexity of Financial Reporting and Adminemployee count. - Revenues, Net Plant and Employee labor and related administration and programs, including third party fees legal Regulatory Net Plant 33.3% Number of Employees 33.3% O&M costs33.3% Allocated based on the relative size of affiliate and employee count. Utility-wide studies or third party costs beneficial to all utilities Environment, Health, Safety and Security Number of Employees 100% EHSS training, etc. is directly proportional to the number of employees per function Enterprise Utility-wide programs, employee labor and related administration Legal Costs Net Plant 33.3% Number of Employees 33.3% O&M 33.3% This function is driven by factors which include Net Plant, as typically the higher the value of plant, the more legal work it attracts; similarly, a greater number of employees are typically more indicative of larger facilities that require greater levels of attention; and O&M costs tend to be a third factor indicative of size and legal complexity. Employee labor and related administration and programs, including third party legal Treasury Capital Expenditures 25% O&M 50% Net Plant 25% Treasury activity is typically guided by the amount of necessary capex/plant for each utility, and operating costs/cashflow Third party financing, employee labor and related administration and programs Internal Audit Net Plant 25% O&M 75% This function is driven by factors which reflect the relative size and complexity of Internal audit activity. Larger Plant and operating costs drive of a given facility drive more activity from IA. Third party fees, employee labor and related administration and programs Procurement O&M 50% Capital Expenditures 50% Procurement function is based Based on typical proportion of expenditures Enterprise Utility-wide support and related administration Communications Number Joint and common costs not associated with the provision of Employees 100services listed above, should be charged based on a four-factor allocation methodology: Factor Weight Net Plant 25% Communications cost is directly proportional to the number of employees Enterprise wide support and related administration Customer Count 25% Non-Labor Expenses 25% Labor 25% See Attachment A.
Appears in 2 contracts
Samples: Affiliate Services Agreement, Affiliate Services Agreement
Records and Charges. Section 2.1 Records All services rendered under this Agreement will be provided at actual cost thereof. Records will be maintained for each department and division of the Provider Company in order to accumulate all costs of doing business and to determine the cost of service. These costs will include wages and salaries of employees and related expenses such as insurance, taxes, pensions and other employee welfare expenses, and rent, light, heat, telephone, supplies, and other housekeeping costs. In addition, records will be maintained of general administrative expenses, which will include the costs of operating the Provider Company as a corporate entity. The Provider Company Hourly rates for employees shall be fully loaded, i.e., will include wages/salaries of employees and related expenses such as insurance, taxes, pensions and other employee welfare expenses. Employee costs not included within the fully loaded hourly rate, e.g., a worker’s compensation claim, shall be charged to the utility that the employee is dedicated to or if such employee is shared among all utilities shall be allocated under the HR driver set forth below in Section 2.2. Each party shall maintain adequate books and records with respect to the transactions subject to this Agreement to specifically identify costs subject to allocation, particularly with respect to their origin. In addition, the records must be adequately supported in a manner sufficient to justify recovery of the costs in the rates of the Receiving Company. The Provider Company Each party shall be responsible for maintaining internal controls to ensure the costs associated with transactions covered by the Agreement are properly and consistently allocated and billed in accordance with the terms and provisions of this Agreement. The Receiving Company shall maintain its books and records so that the amounts billed by the Provider Company can be readily determined.
Section 2.2 Charges Costs charged to the Receiving Company by the Provider Charges for services rendered and related expensesProvider Company will either be direct charges or allocated charges and be subject to the guidelines below:
i. Tariffed rates or other pricing mechanisms established by rate setting authorities shall be used to provide all regulated services.
ii. Services not covered by (i) shall be charged by the Provider Company to the Receiving Company at fully distributed cost.
iii. Facilities and administrative services rendered to a rate-regulated affiliate shall be charged on the following basis:
(1) the prevailing price for which the service is provided for sale to the general public by the Provider Company (i.e., the price charged to non- affiliates if such transactions with non-affiliates constitute a substantial portion of the Provider Company’s total revenues from such transactions) or, if no such prevailing price exists, (2) an amount not to exceed the fully distributed cost incurred by the Provider Company in providing such service to the charge Receiving Company. services associated with the related asset or services, and overhead amounts. Costs associated with direct charges shall In instances where time sheeting may not be included in the costs that are allocated. Allocated costs shall be charged to the Receiving Company in accordance with possible, the following four-factor allocation methodology for each servicefactors are to be used: Factor Weight Net Plant 25Customer Care and Billing Customer count 100% Customer Count 25% Non-Labor Expenses 25% Labor 25% When XXX provides services that benefit count accurately reflects the entire company, i.e., Algonquin Power Co, and LUC’s regulated utilities, these costs are allocated using the following methodologies, which are designed to closely align the costs with the driver resource requirements of the activity. Type of Cost Allocation Methodology Rationale Examples Risk Management Net Plant 33.3% Revenue 33.3% O&M 33.3% This function is driven by factors which reflect the relative size Customer Care and complexity of Risk Management - Revenues, Net Plant Billing group Customer Care and O&M costs. Software platform, fees Billing employees and administration Information Technology related administrations IT/Tech Support Number of Employees 90100% O&M 10% IT function is driven by factors which include Technical support requirements are related to the number of employees Tech support staff, associated administration, and O&M. The larger the number of employeesrequired software, the more support, software and IT infrastructure is required. Enterprise wide support, architecturehardware, etc. Third party fees Human Resources Number of Employees 100% HR function is driven by number of employees. A greater number of employees requires additional HR support HR policies, payroll processing, benefits, employee surveys Training Gas Control Net Plant 100% The greater the plant, the more control required Gas Control labor, administration, and associated programs Legal Net Plant 33.3% Number of Employees 100% Training is directly proportional to the number of employees per function Courses, lectures, in house training sessions by third party providers Facilities and Building Rent Square Footage 100% Office space occupied accurately reflects space requirements of each subsidiary Corporate office building Financial Reporting and Administration Revenue 33.3% O&M 33.3% Net Plant 33.3% This function is driven by factors which reflect Allocated based on the relative size of affiliate and complexity of Financial Reporting and Adminemployee count. - Revenues, Net Plant and Employee labor and related administration and programs, including third party fees legal Regulatory Net Plant 33.3% Number of Employees 33.3% O&M costs33.3% Allocated based on the relative size of affiliate and employee count. Utility-wide studies or third party costs beneficial to all utilities Environment, Health, Safety and Security Number of Employees 100% EHSS training, etc. is directly proportional to the number of employees per function Enterprise Utility-wide programs, employee labor and related administration Legal Costs Net Plant 33.3% Number of Employees 33.3% O&M 33.3% This function is driven by factors which include Net Plant, as typically the higher the value of plant, the more legal work it attracts; similarly, a greater number of employees are typically more indicative of larger facilities that require greater levels of attention; and O&M costs tend to be a third factor indicative of size and legal complexity. Employee labor and related administration and programs, including third party legal Treasury Capital Expenditures 25% O&M 50% Net Plant 25% Treasury activity is typically guided by the amount of necessary capex/plant for each utility, and operating costs/cashflow Third party financing, employee labor and related administration and programs Internal Audit Net Plant 25% O&M 75% This function is driven by factors which reflect the relative size and complexity of Internal audit activity. Larger Plant and operating costs drive of a given facility drive more activity from IA. Third party fees, employee labor and related administration and programs Procurement O&M 50% Capital Expenditures 50% Procurement function is based Based on typical proportion of expenditures Enterprise Utility-wide support and related administration Communications Number of Employees 100% Communications cost is directly proportional to Please note the allocation methodology can be adjusted based on the number of employees Enterprise wide support participating utilities. Costs charged to all recipients, regardless of whether a recipient is a partyand allocated pursuant to this Agreement, according to the procedures set forth shall include direct labor, direct materials, direct purchased services associated with the related asset or services, and related administration See Attachment A.overhead amounts.
i. Tariffed rates or other pricing mechanisms established by rate setting authorities shall be used to provide all regulated services.
ii. Services not covered by (ii) shall be charged by the providing party to the receiving party at fully distributed cost.
iii. Facilities and administrative services rendered to a rate-regulated subsidiary shall be charged on the following basis:
(1) the prevailing price for which the service is provided for sale to the general public by the providing party (i.e., the price charged to non- affiliates if such transactions with non-affiliates constitute a substantial portion of the providing party’s total revenues from such transactions) or, if no such prevailing price exists, (2) an amount not to exceed the fully distributed cost incurred by the providing party in the Cost Allocation Manual attached hereto as Schedule I. providing such service to the receiving party.
Appears in 1 contract
Samples: Affiliate Services Agreement
Records and Charges. Section 2.1 Records All services rendered under this Agreement will be provided at actual cost thereof. Records will be maintained for each department and division of the Provider Company in order to accumulate all costs of doing business and to determine the cost of service. These costs will include wages and salaries of employees and related expenses such as insurance, taxes, pensions and other employee welfare expenses, and rent, light, heat, telephone, supplies, and other housekeeping costs. In addition, records will be maintained of general administrative expenses, which will include the costs of operating the Provider Company as a corporate entity. The Hourly rates for employees shall be fully loaded, i.e., will include wages/salaries of employees and related expenses such as insurance, taxes, pensions and other employee welfare expenses. Employee costs not included within the fully loaded hourly rate, e.g., a worker’s compensation claim, shall be charged to the utility that the employee is dedicated to or if such employee is shared among all utilities shall be allocated under the HR driver set forth below in Section 2.2. Each partyThe Provider Company shall maintain adequate books and records with respect to the transactions subject to this Agreement to specifically identify costs subject to allocation, particularly with respect to their origin. In addition, the records must be adequately supported in a manner sufficient to justify recovery of the costs in the rates of the Receiving Company. The Each partyThe Provider Company shall be responsible for maintaining internal controls to ensure the costs associated with transactions covered by the Agreement are properly and consistently allocated and billed in accordance with the terms and provisions of this Agreement. The Receiving Company shall maintain its books and records so that the amounts billed by the Provider Company can be readily determined.
Section 2.2 Charges Costs charged to the Receiving Company by the Provider Company will either be direct charges or allocated charges and be subject to the guidelines below:
i. Tariffed rates or other pricing mechanisms established by rate setting authorities shall be used to provide all regulated services.
ii. Services not covered by (i) shall be charged by the Provider Company to the Receiving Company at fully distributed cost.
iii. Facilities and administrative services rendered to a rate-regulated affiliate shall be charged on the following basis:
(1) the prevailing price for which the service is provided for sale to the general public by the Provider Company (i.e., the price charged to non- affiliates if such transactions with non-affiliates constitute a substantial portion of the Provider Company’s total revenues from such transactions) or, if no such prevailing price exists, (2) an amount not to exceed the fully distributed cost incurred by the Provider Company in providing such service to the Receiving Company. services associated with the related asset or services, and overhead amounts. Costs associated with direct charges shall not be included in the costs that are allocated. Allocated costs shall be charged to the Receiving Company in accordance with the following four-factor allocation methodology for each service: Factor Weight Net Plant 25% Customer Count 25% Non-Labor Expenses 25% Labor 25% When XXX provides services that benefit the entire company, i.e., Algonquin Power Co, and LUC’s regulated utilities, these costs are allocated using the following methodologies, which are designed to closely align the costs with the driver of the activity. Type of Cost Allocation Methodology Rationale Examples Risk Management Net Plant 33.3% Revenue 33.3% O&M 33.3% This function is driven by factors which reflect the relative size and complexity of Risk Management - Revenues, Net Plant and O&M costs. Software platform, fees and administration Information Technology Number of Employees 90% O&M 10% IT function is driven by factors which include number of employees and O&M. The larger the number of employees, the more support, software and IT infrastructure is required. Enterprise wide support, architecture, etc. Third party fees Human Resources Number of Employees 100% HR function is driven by number of employees. A greater number of employees requires additional HR support HR policies, payroll processing, benefits, employee surveys Training Number of Employees 100% Training is directly proportional to the number of employees per function Courses, lectures, in house training sessions by third party providers Facilities and Building Rent Square Footage 100% Office space occupied accurately reflects space requirements of each subsidiary Corporate office building Financial Reporting and Administration Revenue 33.3% O&M 33.3% Net Plant 33.3% This function is driven by factors which reflect the relative size and complexity of Financial Reporting and Admin. - Revenues, Net Plant and Employee labor and related administration and third party fees O&M costs. Environment, Health, Safety and Security Number of Employees 100% EHSS training, etc. is directly proportional to the number of employees per function Enterprise wide programs, employee labor and related administration Legal Costs Net Plant 33.3% Number of Employees 33.3% O&M 33.3% This function is driven by factors which include Net Plant, as typically the higher the value of plant, the more legal work it attracts; similarly, a greater number of employees are typically more indicative of larger facilities that require greater levels of attention; and O&M costs tend to be a third factor indicative of size and legal complexity. Employee labor and related administration and programs, including third party legal Treasury Capital Expenditures 25% O&M 50% Net Plant 25% Treasury activity is typically guided by the amount of necessary capex/plant for each utility, and operating costs/cashflow Third party financing, employee labor and related administration and programs Internal Audit Net Plant 25% O&M 75% This function is driven by factors which reflect the relative size and complexity of Internal audit activity. Larger Plant and operating costs drive of a given facility drive more activity from IA. Third party fees, employee labor and related administration and programs Procurement O&M 50% Capital Expenditures 50% Procurement function is based on typical proportion of expenditures Enterprise wide support and related administration Communications Number of Employees 100% Communications cost is directly proportional to the number of employees Enterprise wide support and related administration See Attachment A.
Appears in 1 contract
Samples: Affiliate Services Agreement
Records and Charges. Section 2.1 Records All services rendered under this Agreement will be provided at actual cost thereof. Records will be maintained for each department and division of the Provider Company in order to accumulate all costs of doing business and to determine the cost of service. These costs will include wages and salaries of employees and related expenses such as insurance, taxes, pensions and other employee welfare expenses, and rent, light, heat, telephone, supplies, and other housekeeping costs. In addition, records will be maintained of general administrative expenses, which will include the costs of operating the Provider Company as a corporate entity. Hourly rates for employees shall be fully loaded, i.e., will include wages/salaries of employees and related expenses such as insurance, taxes, pensions and other employee welfare expenses. Employee costs not included within the fully loaded hourly rate, e.g., a worker’s compensation claim, shall be charged to the utility that the employee is dedicated to or if such employee is shared among all utilities shall be allocated under the HR driver set forth below in Section 2.2. The Provider Company shall maintain adequate books and records with respect to the transactions subject to this Agreement to specifically identify costs subject to allocation, particularly with respect to their origin. In addition, the records must be adequately supported in a manner sufficient to justify recovery of the costs in the rates of the Receiving Company. The Provider Company shall be responsible for maintaining internal controls to ensure the costs associated with transactions covered by the Agreement are properly and consistently allocated and billed in accordance with the terms and provisions of this Agreement. The Receiving Company shall maintain its books and records so that the amounts billed by the Provider Company can be readily determined.
Section 2.2 Charges Costs charged to the Receiving Company by the Provider Company will either be direct charges or allocated charges and be subject to the guidelines below:
i. Tariffed rates or other pricing mechanisms established by rate setting authorities shall be used to provide all regulated services.
ii. Services not covered by (i) shall be charged by the Provider Company to the Receiving Company at fully distributed cost.
iii. Facilities and administrative services rendered to a rate-regulated affiliate shall be charged on the following basis:
(1) the prevailing price for which the service is provided for sale to the general public by the Provider Company (i.e., the price charged to non- affiliates if such transactions with non-affiliates constitute a substantial portion of the Provider Company’s total revenues from such transactions) or, if no such prevailing price exists, (2) an amount not to exceed the fully distributed cost incurred by the Provider Company in providing such service to the Receiving Company. Direct charges shall include direct labor, direct materials, direct purchased services associated with the related asset or services, and overhead amounts. Costs associated with direct charges shall not be included in the costs that are allocated. Allocated costs shall be charged to the Receiving Company in accordance with with, the following four-factor allocation methodology factors for each service: Factor Weight Net Plant 25% Customer Count 25% Non-Labor Expenses 25% Labor 25% When XXX provides services that benefit the entire company, i.e., Algonquin Power Co, and LUC’s regulated utilities, these costs are allocated using the following methodologies, which are designed to closely align the costs with the driver of the activity. Type of Cost Service Allocation Methodology Rationale Examples Risk Management Net Plant 33.3Customer Care and Billing Customer count 100% Revenue 33.3% O&M 33.3% This function is driven by factors which reflect Customer count accurately reflects the relative size resource requirements of the Customer Care and complexity of Risk Management - Revenues, Net Plant Billing group Customer Care and O&M costs. Software platform, fees Billing employees and administration Information Technology related administrations IT/Tech Support Number of Employees 90100% O&M 10% IT function is driven by factors which include Technical support requirements are related to the number of employees Tech support staff, associated administration, and O&M. The larger the number of employeesrequired software, the more support, software and IT infrastructure is required. Enterprise wide support, architecturehardware, etc. Third party fees Human Resources Number of Employees 100% HR function is driven by number of employees. A greater number of employees requires additional HR support HR policies, payroll processing, benefits, employee surveys Training Gas Control Net Plant 100% The greater the plant, the more control required Gas Control labor, administration, and associated programs Legal Net Plant 33.3% Number of Employees 100% Training is directly proportional to the number of employees per function Courses, lectures, in house training sessions by third party providers Facilities and Building Rent Square Footage 100% Office space occupied accurately reflects space requirements of each subsidiary Corporate office building Financial Reporting and Administration Revenue 33.3% O&M 33.3% Net Plant 33.3% This function is driven by factors which reflect Allocated based on the relative size of affiliate and complexity of Financial Reporting and Adminemployee count. - Revenues, Net Plant and Employee labor and related administration and programs, including third party fees legal Regulatory Net Plant 33.3% Number of Employees 33.3% O&M costs33.3% Allocated based on the relative size of affiliate and employee count. Utility-wide studies or third party costs beneficial to all utilities Environment, Health, Safety and Security Number of Employees 100% EHSS training, etc. is directly proportional to the number of employees per function Enterprise Utility-wide programs, employee labor and related administration Legal Costs Net Plant 33.3% Number of Employees 33.3% O&M 33.3% This function is driven by factors which include Net Plant, as typically the higher the value of plant, the more legal work it attracts; similarly, a greater number of employees are typically more indicative of larger facilities that require greater levels of attention; and O&M costs tend to be a third factor indicative of size and legal complexity. Employee labor and related administration and programs, including third party legal Treasury Capital Expenditures 25% O&M 50% Net Plant 25% Treasury activity is typically guided by the amount of necessary capex/plant for each utility, and operating costs/cashflow Third party financing, employee labor and related administration and programs Internal Audit Net Plant 25% O&M 75% This function is driven by factors which reflect the relative size and complexity of Internal audit activity. Larger Plant and operating costs drive of a given facility drive more activity from IA. Third party fees, employee labor and related administration and programs Procurement O&M 50% Capital Expenditures 50% Procurement function is based Based on typical proportion of expenditures Enterprise Utility-wide support and related administration Communications Number Joint and common costs not associated with the provision of Employees 100services listed above, should be charged based on a four-factor allocation methodology: Factor Weight Net Plant 25% Communications cost is directly proportional to the number of employees Enterprise wide support and related administration Customer Count 25% Non-Labor Expenses 25% Labor 25% See Attachment A.
Appears in 1 contract
Samples: Affiliate Services Agreement