1. Except as otherwise provided in subsection 8 of NRS 704.110 , a public utility which purchases natural gas for resale may record upon its books and records in deferred accounts all cost increases or decreases in the natural gas purchased for resale. Any public utility which uses deferred accounting to reflect changes in costs of natural gas purchased for resale shall include in its annual report to the Commission a statement showing the allocated rate of return for each of its operating departments in Nevada which uses deferred accounting. 2. A public utility which purchases natural gas for resale may request approval from the Commission to record upon its books and records in deferred accounts any other cost or revenue which the Commission deems appropriate for deferred accounting and which is not otherwise subject to the provisions of subsection 1. If the Commission approves such a request, the Commission shall determine the appropriate requirements for reporting and recovery that the public utility must follow with regard to each such deferred account. 3. When a public utility which purchases natural gas for resale files an annual rate adjustment application or an annual deferred energy accounting adjustment application, the proceeding regarding the application must include a review of the transactions and recorded costs of natural gas included in the application. There is no presumption of reasonableness or prudence for any transactions or recorded costs of natural gas included in the application, and the public utility has the burden of proving reasonableness and prudence in the proceeding. 4. A public utility which purchases natural gas for resale and which has received approval from the Commission to make quarterly adjustments to a deferred energy accounting adjustment pursuant to subsection 8 of NRS 704.110 is not eligible to request an adjustment to its deferred energy accounting adjustment in its annual rate adjustment application.
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