Examples of Anticipated Incremental Revenue in a sentence
In accordance with section 8.16(b)(i) of the Code, for any expansion of the Capacity or extension to the Pipeline to be economically feasible, the Anticipated Incremental Revenue generated over the economic life of the New Facility must exceed the New Facilities Investment.
DBP has used the wrong baseline in calculating Anticipated Incremental Revenue, which has inflated the amount of NFI which could be rolled in under this test.
DBP has determined the present value of the Anticipated Incremental Revenue from the Stage 5 expansion of the DBNGP, and has found that it exceeds the high end of the range of forecast New Facilities Investment.
Given the definition of Anticipated Incremental Revenue and more particularly the definition of Prevailing Tariff under the Code, this section essentially creates a cap that prevents the rolling in of all of the capital costs associated with an expansion.
This tariff is, on DBP’s interpretation of section 8.16(a)(ii)(A) (discussed in paragraphs5.24 to 5.35 of this submission), the prevailing tariff to be used in calculation of the Anticipated Incremental Revenue from Stage 5.
In these circumstances, the Anticipated Incremental Revenue from the additional capacity provided by the Stage 5 expansion of the DBNGP exceeds the high end of the range of forecast New Facilities Investment.
In accordance with section 8.16(b)(i) of the Code, for any expansion of the Capacity or extension to the Network to be economically feasible, the Anticipated Incremental Revenue generated over the economic life of the New Facility must exceed the New Facilities Investment.
In applying the test of section 8.16(a)(ii)(A) for the purpose of this submission, DBP works within the Code framework by comparing the forecast New Facilities Investment for Stage 5 with the Anticipated Incremental Revenue determined at the tariff which would prevail if the Stage 5 expansion were not undertaken.
Verve Energy submits that the clear intention of the Code in this regard is that the benchmark for determining Anticipated Incremental Revenue is the predicted future tariff path for a reference tariff, which would normally be expected to follow a “sawtooth” pattern with a step down at each reset.
The Anticipated Incremental Revenue is the present value of the reasonably anticipated future revenue.