(a) Where corporations and municipalities elect to file fuel adjustment statements in accordance with section 720-6.1 of this Subpart, the statements must contain:

1. (1) identification of the schedules and service classifications to which they apply;
2. (2) the base cost of fuel (separately, when more than one base is used in the schedule);
3. (3) the present average cost to the utility;
4. (4) the date at which, and the period for which, the average was determined;
5. (5) the amount per unit of consumption affected; and
6. (6) the date when the increase or decrease in rates shall become effective and the period it will remain in effect.

(b) The following definitions apply in connection with this section:

1. (1) The term cost of fuel is defined as the cost of fossil, hydro and nuclear fuel used by the company in generation for its customers, plus the cost of economy energy purchased for its customers, plus the fuel costs of other energy purchased for its customers, estimated if not known, plus any necessary adjustment correcting estimated fuel costs of purchased energy of previous months; except that fuel costs associated with nuclear generating plants whose capital costs have not been reflected in the rate base for rate determination purposes may be priced at the base cost of fuel. A period of four months shall be allowed for determining the estimated fuel costs after which the estimate shall be adjusted to the utility's average fuel cost at the time of purchase.
2. (2) The term base cost of fuel is defined as the cost of fuel per unit which is established as the basis in computing the fuel surcharge. It shall be clearly stated, together with the method of arriving at it, in connection with the filing of the fuel surcharge provision.
3. (3) The average cost of fuel is defined as the cost of fuel defined in paragraph (1) of this subdivision divided by the total generated and purchased energy minus the energy sold to other utilities except utilities covered by the fuel cost adjustment clause, minus transmitting and pumping losses associated with energy supplied for pumped storage generating units. The determination of the utility's own fuel cost shall be derived using the averaging method, i.e., the total cost of fuel on hand at the beginning of the month, plus the cost of fuel received during the month divided by the sum of the total quantity of fuel on hand at the beginning of the month and the total amount of fuel received during the month.
4. (4) The term economy energy is defined as that energy purchased in compliance with the economy energy definition of the New York Power Pool, plus that energy purchased at a total charge equal to or less than the utility's avoided fuel cost.

5. (5) The term fees is defined as amounts paid to brokers, agents, individuals or clearinghouses which are directly associated with identifiable gas supply purchases. To be considered a part of the cost of fossil fuel purchases, and includable in the fuel adjustment clause, such fees are subject to the following conditions:

   1. (i) such fees must provide a net reduction in the delivered cost to the utility on an avoided cost basis, i.e., the combination of gas costs, delivery costs and fee payments must be less than the cost of the supply that would have been taken but for this purchase;
   2. (ii) the fee payment may not be to an affiliate of the utility, nor may it be for gas ultimately purchased from an affiliate;
   3. (iii) costs attributable to utility personnel may not be included in such fee payment;
   4. (iv) the fee payment may not cause the price of the subject gas supply to exceed its maximum lawful price pursuant to the Natural Gas Policy Act of 1978;
   5. (v) the fee payment must be related to a specific gas volume and may not be of a general nature, such as an expense for performing a survey or a start-up expense for a broker, agent, individual, or clearinghouse;
   6. (vi) lump sum fees must be recovered over the estimated quantities with which such fees are associated;
   7. (vii) where applicable, the utility must fully detail and justify all such costs in annual gas cost recovery reconciliations and in rate case presentations as part of the review of gas purchasing practices; and
   8. (viii) in conjunction with the first claim for recovery of each fee through the electric adjustment clause, workpapers supporting such filings must clearly set forth the new fee and include a statement that the gas supply was not available to the utility without this payment.