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receipts allocable to the FEECA programs on its books and
records. People's was prohibited by the PSC from separately
stating this portion on its customers' bills.
People's collected FEECA funds subject to a statutory
obligation not to expend them for any purpose other than FEECA
programs. It kept separate bookkeeping accounts to record FEECA
receipts and FEECA expenditures, and, at fixed intervals of 6
months to a year, the PSC conducted in-depth audits of these
accounts. If People's charged an expense that the PSC deemed
improper, the charge was disallowed. These disallowances were
not charged back to People's customers. They were borne by
People's and its shareholders in the form of reduced net income.
People's did not segregate the FEECA funds in separate bank
accounts.
For each period, the FEECA rate factor was calculated as
closely as possible to generate just enough receipts to cover the
period's anticipated FEECA expenditures. If People's FEECA
receipts exceeded a period's FEECA expenditures, the excess, plus
interest on the excess, was subtracted from the amount the
following period's rate factor was designed to yield.
If and when the FEECA programs terminate, or if and when
People's goes out of business, any residual funds in the FEECA
accounts must be refunded to the ratepayers. If People's is
acquired by another company, the FEECA account balances pass to
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Last modified: May 25, 2011