In Popowsky v. Pennsylvania Public Utility Commission, 868 A.2d 606 (Pa. Cmwlth. 2004) the Court set forth a three-pronged approach for determining whether a utility should be permitted to recover its expenses retroactively. First, we consider whether the costs arose out of an inaccurate projection of costs in an earlier rate proceeding, whether the costs were anticipated and whether they were imposed on the utility from the outside. Second, we evaluate the extraordinary nature of the costs, including whether they are non-recurring expenses arising from a one-time event and whether they are legitimate operating expenses that will never be recovered if retroactive recovery is denied. Finally, we analyze whether the utility claimed the expenses at the first reasonable opportunity and whether the utility can absorb the expenses with the current revenue from its existing tariff. Id. In Popowsky v. Pennsylvania Public Utility Commission, 589 Pa. 605, 910 A.2d 38 (2006), the Supreme Court held that the Commission was free to change a regulation interpreting statutory requirements for public utilities to provide adequate service so as to require water customers to contribute to the extension of water service where the cost of the project would exceed expected revenue. The court stated that the Commission was not obliged to adopt regulations consistent with intermediate appellate judicial interpretations that existed in the absence of explicit regulations, and that if the line extension regulations were valid a case decided before their adoption provided no basis upon which to upset the regulations. In Popowsky the Supreme Court noted that it had long recognized the distinction between regulations adopted pursuant to a grant of legislative authority versus adoption pursuant to interpretive rule-making powers. It explained that legislative rule-making is an " 'exercise of legislative power by an administrative agency, pursuant to a grant of legislative power by the legislative body, and is as valid and is as binding upon a court as a statute if it is: (a) within the granted power; (b) issued pursuant to proper procedure; (c) reasonable.' " Id. In Popowsky, the regulation was challenged on the basis that it was inconsistent with a pre-regulation case. The Supreme Court held that the Public Utility Commission (PUC) was free to modify a regulation that interpreted statutory requirements that public utilities provide adequate services. The PUC was not obliged to adopt regulations consistent with intermediate appellate judicial interpretations that existed in the absence of explicit regulations. Popowsky demonstrated that the Department, as an administrative agency, may promulgate a regulation to reflect its interpretation of a statute that it administers, even if that interpretation was different than a judicial interpretation that occurred prior to the regulation. Consequently, a past interpretation of the term "reasonable assurance" in Section 402.1(1) by the Court, that simply required a reasonable expectation of reemployment, did not deter the Department from promulgating a regulation that explains and expands the term "reasonable assurance" to include economic equivalency.