1. (a)

   1. (1) Cost recovery of conservation and energy efficiency programs shall be in accordance with the provisions of the Energy Conservation Endorsement Act of 1977, Arkansas Code § 23-3-401 et seq.

   2. (2) Cost recovery:

      1. (A) Shall be limited to the incremental costs of providing the program that are not already included in the then-current rates of the utility; and
      2. (B) May include:

2. (i) Direct program costs;

   1. (ii) Lost contributions to fixed costs; and

      1. (iii) Utility energy efficiency incentives.

3. (b)

   1. (1) A utility may request cost recovery through a surcharge or rider.

   2. (2) If a utility requests cost recovery through a surcharge or rider, the cost recovery through that mechanism:

      1. (A) Shall be limited to the incremental costs of providing the program that are not included in the then-current rates of the utility; and

      2. (B) May include:

         1. (i) Direct program costs;
         2. (ii) Lost contributions to fixed costs; and
         3. (iii) Utility energy efficiency incentives.
         4. (c)
   3. (1) A utility may request that direct program costs and lost contribution to fixed costs from approved program budgets be included in the rider.

   4. (2) A utility may request contemporaneous recovery of these costs via such rider.

      1. (d)
   5. (1) Demand response programs that involve rates, e.g., interruptible service, curtailment, off-peak service, time-of-use rates, shall not be included in any surcharge or rider.
   6. (2) The rates for those mechanisms will be established through utility-specific rate or tariff proceedings.

4. (e)

   1. (1) If a utility is recovering conservation and energy efficiency program costs through a surcharge or rider, the utility shall file, contemporaneous with the annual report under 23 CAR § 461-109, a redetermined Energy Efficiency Cost Rate (EECR).

   2. (2) In support of this redetermined rate, the utility shall file a schedule of:

      1. (A) Actual program costs for the reporting period;
      2. (B) Actual amounts collected under the rider for the reporting period; and
      3. (C) Approved program budgets for the next calendar year.
   3. (3) In addition, if the utility seeks Arkansas Public Service Commission approval to recover lost contributions to fixed costs and/or utility energy efficiency incentives and the utility seeks to recover these costs through a surcharge or rider, the utility shall incorporate these costs into the supporting schedule.
   4. (4) Any incentive calculations shall be based on the reporting year.

   5. (5) The EECR shall be adjusted to reflect a reconciliation of:

      1. (A) Any over-recovery or under-recovery for the prior year; and
      2. (B) The approved budget for the next calendar year.

Codification Notes: This section was promulgated as Section 7 of the Rules for Conservation and Energy Efficiency Programs prior to codification into the Code of Arkansas Rules.