20.40.02.08

.08 Record and Reporting Requirements.

A. Each Cost Allocation Manual filed as directed in Regulation .07 of this chapter shall contain the following items:

(1) The amount the utility allocated or assigned the previous calendar year for each type of cost identified in its CAM;

(2) An affidavit stating that its cost allocation and the transfer pricing of an asset complies with this subtitle; and

(3) A certification that a training program is in place to train personnel as necessary to comply with this subtitle.

B. On or before May 15 of each calendar year a utility shall file with the Commission a report for the previous calendar year ending December 31 titled "Ring Fencing Report" containing the following items:

(1) A summary of all measures intended to protect the utility's financial strength and credit ratings from the activities of core service and non-core service affiliates;

(2) A corporate organization chart identifying the utility and its core service and non-core service affiliates;

(3) A description of each core service and non-core service affiliate's business;

(4) If available, a copy of each core service and non-core service affiliate's most recently published credit rating report made by a nationally recognized credit rating agency;

(5) If a utility shares personnel with a core service or non-core service affiliate, a personnel-sharing report listing the shared personnel's position title and function;

(6) A list of asset transactions between a utility and its core service and non-core service affiliate consistent with the following guidelines:

(a) For an asset transferred to or from a utility where the book value is above $75,000, the report shall:

(i) Describe the transferred asset;

(ii) Indicate the affiliate providing or receiving the asset;

(iii) Provide the value received or given for the transferred asset; and

(iv) Provide an external appraisal or the market value of the transferred asset; and

(b) For an individual asset transferred to or from a utility where the book value is below $75,000, the report shall identify the type of asset transferred and the affiliate providing or receiving the asset;

(7) A list of all assets, if individually accounted for, or asset categories owned by the utility which were loaned or shared with a core service or non-core service affiliate;

(8) A list of all assets jointly owned with a core service or non-core service affiliate; and

(9) A list of all core service or non-core service affiliate debt guaranteed by the utility or secured by any utility asset.

C. A utility shall maintain a detailed monthly record of any cost allocation and assignment and make this record available for Commission review and audit.

D. A utility shall permit the Commission to have access to any report and associated work papers prepared for a utility by an independent auditor hired to perform an audit under Public Utilities Article, §4-208, Annotated Code of Maryland.

E. A utility shall notify the Commission within 7 days after the utility or its affiliate:

(1) Files for bankruptcy; or

(2) Is in material breach of any debt obligation which is guaranteed by the utility or secured by its assets.