(iii) formula rates;
(iv) multiyear rate plans; or
(v) rates based on a combination of more than one of
the mechanisms in subparagraphs (i), (ii), (iii) and (iv)
or other ratemaking mechanisms as provided under this
chapter.
(2) An alternative rate mechanism established under this
section may include rates under section 1307 (relating to
sliding scale of rates; adjustments) or 1308 (relating to
voluntary changes in rates) and may provide for recovery of
returns on and return of capital investments or, in the case
of city natural gas distribution operations, recovery under
the cash flow ratemaking method.
(3) Capital costs and expenses recovered through
alternative rates and rate mechanisms shall be reasonable and
prudently incurred and used and useful in providing service .
Nothing in this paragraph shall be construed to prohibit or
limit the recovery of revenue, as appropriate, under a
commission-approved performance-based rate plan.
(c ) Customer notice.--
(1) A utility shall notify a customer of all of the
following:
(i) The filing of an application under subsection
(b)(1).
(ii) The commission's decision on the application.
(iii) A summary and, if applicable, a schedule of
the rate adjustments that will occur as a result of the
commission's approval of a utility application under
subsection (b) and the effective date of the adjustments.
(iv) Any other information required by the
commission by regulation or order.
(2) Notice shall be provided through customer bill
inserts and posted on the utility's publicly accessible
Internet website.
(d) Commission.--No later than six months after the
effective date of this subsection, the commission, by regulation
or order, shall prescribe the specific procedures for the
approval of an application to establish alternative rates.
(e) Construction.--Nothing in this section shall be
construed as limiting the existing ratemaking authority of the
commission or be construed to invalidate or void any rate
mechanisms approved by the commission prior to the effective
date of this section.
(f) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"Decoupling mechanism." As follows:
(1) A rate mechanism that reconciles authorized
distribution rates or revenues for differences between the
projected sales used to set rates and actual sales, which may
include, but not be limited to, adjustments resulting from
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