[Code of Federal Regulations]
[Title 18, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 18CFR2.15]

[Page 22]
 
           TITLE 18--CONSERVATION OF POWER AND WATER RESOURCES
 
  CHAPTER I--FEDERAL ENERGY REGULATORY COMMISSION, DEPARTMENT OF ENERGY
 
PART 2_GENERAL POLICY AND INTERPRETATIONS--Table of Contents
 
Sec. 2.15  Specified reasonable rate of return.

    (a) Pursuant to section 10(d) of the Federal Power Act, the 
Commission has determined that the specified reasonable rate of return 
used in computing amortization reserves for hydroelectric project 
licenses shall be calculated annually based on current capital ratios 
developed from an average of 13 monthly balances of amounts properly 
includible in the licensee's long-term debt and proprietary capital 
accounts, as listed in the Commission's Uniform System of Accounts. The 
cost rate for such ratios shall be the weighted average cost of long-
term debt and preferred stock for the year, and the cost of common 
equity shall be the interest rate on 10-year government bonds (reported 
as the Treasury Department's 10-year constant maturity series) computed 
on the monthly average for the year in question, plus four percentage 
points (400 basis points).
    (b) The Statement of Policy adopted herein shall be effective upon 
issuance of this order.
    (c) The Secretary shall cause prompt publication of this order to be 
made in the Federal Register.
    (d) All requests and suggestions not specifically dealt with herein 
are hereby denied.
    (e) The Secretary is hereby authorized to change the appropriate 
license article upon application by the licensees to reflect the 
specified reasonable rate of return as adopted herein.

[Order 550, 41 FR 27032, July 1, 1976]