A. No purchased power adjustment clause of any kind shall apply nor be used in computing bills for retail electric service which has not been first approved by the Commission.

B. If the Commission finds that the changed price of purchased wholesale power required for distribution by any electric distribution cooperative threatens the ability of the cooperative to earn a reasonable rate of return, the Commission may, after investigation and public hearing, approve a suitable purchased power adjustment clause to be superimposed upon the existing retail electric rate schedules of the cooperative and designed only to recapture such increased costs of wholesale power.

C. The Commission shall design the purchased power adjustment clause to allow the electric distribution cooperative to increase or decrease its charges for retail electric service as provided in its approved electric rates only for the changes in the cost of purchased power when the price of such purchased power differs from the price which is reflected in its basic approved retail rates. It shall include in a purchased power adjustment clause an allowance for line losses if a preponderance of evidence points to the probable conclusion that failure to do so will result in less than a reasonable rate of return for the cooperative.