| Frequently Asked Questions |
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| What is a Fuel Adjustment Charge (FAC)? |
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| Q: |
What is a Fuel Adjustment Charge (FAC)? |
| A: |
The Commission allows fuel adjustment clauses (FAC) in rate schedules for wholesale service that conform to section 35.14 of the Commission's regulations. The Commission has long recognized that the purpose of a FAC is to keep utilities whole with regard to changes in the cost of fuel. It allows utilities to pass through to their wholesale ratepayers increases or decreases in the cost of fuel without having to make separate filings which reflect each change in fuel cost, and without having to obtain prior Commission approval of each change in fuel costs. Under the Commission's policy, FACs are to be strictly construed and are permitted to recover only costs listed in the Regulations. |
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