RSAM Clause Samples

RSAM. The RSAM is an accounting mechanism used by the Company to respond to changes in its underlying revenues and expenses in order to maintain an FPSC Adjusted ▇▇▇ within the ▇▇▇ range authorized by the Commission. This flexibility is key to the Agreement’s four-year minimum term. An RSAM framework like the one contained in the Settlement Agreement was approved by the Commission as a core element in each of the last three FPL settlement agreements, i.e., 2010, 2012, and 2016, and has been a constructive part of FPL’s ability to continue to deliver value for customers over the last decade. Tr. 2298 (▇▇▇▇▇▇▇). In each earnings surveillance reporting period, the Company records increases to expense (debits) or decreases to expense (credits) such that the overall resulting ▇▇▇ for that rolling period equals a pre-established ▇▇▇ within the authorized range. Tr. 2299 (▇▇▇▇▇▇▇). The RSAM results only in non-cash earnings. In other words, the RSAM allows FPL to absorb changes primarily in cash revenues and expenses while maintaining a pre-established ▇▇▇ within its authorized range without an increase in customer rates. Id.; Tr. 2930-31 (▇▇▇▇▇▇▇). The RSAM contained in the Settlement Agreement has a direct and beneficial impact on customers. In total, the RSAM reduces cash rates for customers by greater than $2 billion over the four-year term of the Agreement. This is accomplished, in part, by the RSAM’s separate set of depreciation parameters, which allow for a lower accrual and have the effect of reducing FPL’s revenue requirement by almost $200 million annually over the four-year term of the agreement, representing an approximately $800 million total cash rate reduction. Tr. 2761, 2825-26 (Bores); Ex. 620. In addition, the RSAM obviates the need to collect incremental revenue requirements in cash rates of approximately $411 million in 2024 and approximately $865 million in 2025. Id. The rate benefits of the RSAM extend beyond the base rate component, however, and prior usage of the RSAM has proven to be a beneficial tool in mitigating unanticipated rate impacts during the terms of prior agreements. For example, FPL has been able to use the RSAM in the past to absorb the restoration costs associated with costly hurricanes (Hurricane ▇▇▇▇ and Hurricane Dorian), as well as to extend the term of prior multi-year rate plans to the benefit of customers. Tr. 2911-12 (Bores). In spite of FPL’s track record of success in using the RSAM to enhance customer value, the Opposi...