# Capital infrastructure investment automatic adjustment mechanism.

**Citation:** 199 IAC 19.17  
**Type / status:** regulation / current  
**Agency:** Iowa Utilities Commission  
**Effective:** 2025-07-16  
**Published:** 2026-08-19

19.17(1) Eligible capital infrastructure investment. A rate-regulated natural gas utility may file for commission approval of a capital infrastructure investment automatic adjustment mechanism to allow recovery of certain costs from customers. To be eligible for recovery through the capital infrastr

## Document text

19.17(1) Eligible capital infrastructure investment. A rate-regulated natural gas utility may file for commission approval of a capital infrastructure investment automatic adjustment mechanism to allow recovery of certain costs from customers. To be eligible for recovery through the capital infrastructure investment automatic adjustment mechanism, the costs shall either:

a. Meet the following criteria:

(1) The costs are beyond the direct control of management;

(2) The costs are subject to sudden, important change in level;

(3) The costs are an important factor in determining the total cost of capital infrastructure investment to serve customers; and

(4) The costs are readily, precisely, and continuously segregated in the accounts of the utility; or

b. Be for a capital infrastructure investment that:

(1) Does not serve to increase revenues by directly connecting the infrastructure replacement to new customers;

(2) Is in service but was not included in the gas utility's rate base in its most recent general rate case; and

(3) Replaces or modifies existing infrastructure required by state or local government action, to meet state or federal natural gas pipeline safety regulations, or to otherwise enhance safety as approved in advance by the commission. The utility shall make an annual filing with the commission to seek advance determination of projects that meet this criterion.

19.17(2) Determination of recovery factor. The utility may recover a rate of return and depreciation expense associated with eligible capital infrastructure investments described in subrule 19.17(1). The allowed rate of return will be the approved average cost of debt from the utility's most recent general gas or electric rate review proceeding before the commission. Depreciation expense shall be based upon the depreciation rates allowed by the commission in the utility's most recent general gas rate review proceeding before the commission.

19.17(3) Recovery procedures.

a. To recover capital infrastructure investment costs that meet the criteria in paragraph 19.17(1)"a" through an automatic adjustment mechanism, the utility will first obtain prior commission approval of the automatic adjustment mechanism. The utility will file the following information in support of the proposed automatic adjustment mechanism:

(1) A description of the capital infrastructure investment and the costs that are proposed to be recovered through the automatic adjustment mechanism;

(2) An explanation of why the costs of the capital infrastructure investment are beyond the control of the utility's management;

(3) An exhibit that shows the changes in level of the costs of the capital infrastructure investment that are proposed to be recovered, both historical and projected;

(4) An explanation of why these particular capital infrastructure investment costs are an important factor in determining the total cost of capital infrastructure investment to serve customers;

(5) A description of proposed recovery procedures, if different from the procedures described in paragraph 19.17(3)"c"; and

(6) The length of time that the automatic adjustment mechanism will be in place.

b. Recovery of capital infrastructure investment costs pursuant to paragraph 19.17(1)"b" may be made by the utility by filing a proposed tariff no later than April 1 of each year. Only one tariff filing to recover capital infrastructure investment costs shall be made in a 12-month period. The filing will include the following information in support of the proposed automatic adjustment rates:

(1) Proof that the capital infrastructure investment is a project that was approved in advance by the commission as specified in subparagraph 19.17(1)"b"(3).

(2) The location, description, and costs associated with the project.

(3) The cost of debt from the utility's most recent general gas or electric rate review proceeding before the commission and the applicable depreciation rates from the utility's most recent general gas rate review proceeding before the commission.

(4) The calculations showing the total costs that are eligible for recovery and the rates that are proposed to be implemented.

(5) Supporting documentation, including but not limited to work orders and journal entries, to the commission staff or the office of consumer advocate upon request.

c. The utility shall calculate the rates for the recovery of the capital infrastructure investment through the automatic adjustment mechanism over the 12-month period beginning from the effective date of the tariff unless otherwise ordered by the commission. The calculated rate shall include a reconciliation that reconciles the actual revenue recovered through the automatic adjustment mechanism with the costs of the eligible capital infrastructure investments proposed to be recovered over the previous collection period. Unless otherwise specified in an approved tariff, the capital infrastructure investment factor shall be recovered by a fixed monthly surcharge to customers, to be determined by totaling eligible investment costs for the prior calendar year, adjusted for the reconciliation amount, then dividing the total recovery amount among customer classes based upon the utility's most recent approved cost of service study, dividing the class recovery amounts by the number of months in the recovery period, and then dividing the assigned costs by the number of customers in each respective class. The recovery amount will be limited to annual depreciation plus a return on the undepreciated balance based on the cost of debt.

d. Recovery of a return on and return of capital infrastructure investment that is eligible for recovery pursuant to an automatic adjustment mechanism will continue until the effective date of temporary rates in a subsequent general rate proceeding or, if temporary rates are not implemented, until final rates approved by the commission in the utility's next general rate proceeding. To continue recovery, a utility shall file a proposed tariff each year. Once temporary or final rates are effective, the automatic adjustment mechanism will reset to zero. No more than five years of capital investment recovery will be allowed between general rate proceedings unless otherwise approved by the commission. A utility may continue recoveries allowed under this rule until the investments are fully depreciated or until the utility's next general rate proceeding.

## Provenance

- Official: Yes
- Source: <https://www.legis.iowa.gov/DOCS/ACO/IAC/LINC/Chapter.199.19.pdf>
- Source ID: `ia-legislature-pipeline-safety`
- SHA-256: `e6120c1054f8f6e0e33ffb3ae7966bbb48e554ec994cb581c150762f6ca25d2a`
- Retrieved: 2026-08-20T08:17:15.771Z
- Exported: 2026-08-23T15:36:17.671Z
- Document slug: `ia-iac-199-19-17`

### Source metadata

```json
{
  "jurisdiction": "US-IA",
  "chapter": "199 IAC chapter 19",
  "exactScope": "This bounded corpus contains every current rule in 199 IAC chapters 10 and 19, the two chapters identified by the Iowa Utilities Commission pipeline-safety page, plus 15 selected Iowa Code sections that directly establish gas-utility applicability, inspection and rulemaking authority, enforcement, penalties, and acceptance of federal pipeline-safety aid. It does not claim all Iowa pipeline law or all of Iowa Code chapters 476 and 479.",
  "excludedScope": "Excluded are hazardous-liquid safety (which the IUC says remains exclusively with PHMSA), hazardous-liquid permitting in 199 IAC chapter 13 and Iowa Code chapter 479B, damage prevention and one-call law, agricultural restoration chapter 9, railroad-crossing chapter 42, general procedure and filing chapters, permits/orders/forms, privately owned propane service, and federal or private incorporated text. Former 199 IAC chapter 12 is inventoried as repealed and is not searchable.",
  "applicabilityCaveat": "Applicability depends on IUC jurisdiction, public-utility or pipeline-company status, intrastate versus interstate status, the gas and facility involved, customer count, rate regulation, exemptions, federal preemption, waivers, permits, tariffs, and Commission orders. Iowa inspects interstate gas operators only as PHMSA's agent; federal authorities retain enforcement. Chapter 19 is limited to rate-regulated gas utilities except where another law or order extends a duty.",
  "incorporationCaveat": "The rules incorporate or reference 49 CFR Parts 191, 192, 193, and 199; ASME B31.8-2022; NFPA 59-2024, NFPA 54-2024, and NFPA 501A-2021; other Iowa rules and statutes; federal forms and interpretations; and utility tariffs. The connector records citations but does not reproduce incorporated federal or private material, decide which edition controls beyond the state text, or grant rights in private standards.",
  "publicationCaveat": "The current IAC chapter listings dated August 5, 2026 are used to prove chapter and rule inventory; their official PDF and DOCX-formatted 'RTF' artifacts are archived independently. The official 2026 Iowa Code was published December 22, 2025. The live 2026 Code & Acts Sections Amended report is provisional; signed HF 2799 sections 23 and 24, effective July 1, 2026, are preserved as overlays to selected sections 476.1B and 476.2. Any unexpected selected-section amendment causes refresh failure.",
  "rights": "Iowa legal text and other government edicts are preserved with official attribution and cryptographic provenance. Public access does not grant rights in agency seals, website presentation, forms, utility filings, incorporated federal compilations, or privately authored standards; redistribution of those materials requires a separate rights review.",
  "references": [],
  "sourceHistory": "[ARC 9351C, IAB 6/11/25, effective 7/16/25]",
  "region": "IA"
}
```