DR 98-049
Northern Utilities, Inc.
Recovery of Environmental Response Costs
Order Suspending Proposed Tariff Pages
O R D E R N O. 22,931
May 13, 1998
On April 13, 1998, Northern Utilities, Inc.
(Northern) filed with the New Hampshire Public Utilities
Commission (Commission) a Petition for Approval of an ERC
Rate Adjustment Tariff establishing a mechanism for recovery
of Northern's Environmental Response Costs (ERCs) and other
related tariff changes. ERCs are incurred in the
assessment, remediation and monitoring of Northern's former
manufactured gas plants (MGP) in New Hampshire.
Pursuant to federal and state environmental laws,
Northern is required to investigate and remediate the sites
of former MGPs in Rochester and Exeter, New Hampshire, owned
and/or operated by Northern's predecessors, on which
hazardous materials from the MGP operations have been found.
The proposed recovery mechanism is designed to recover
historical annual actual ERC expenditures including carrying
costs over a five year period, plus one-half of related
insurance and third-party expenses and less one-half of
related insurance and third-party recoveries.
Northern requests the historical period under the
proposed mechanism to be twelve months ending June 30, while
the recovery period, during which one-fifth of the prior
year's ERC expenditures will be collected, is the subsequent
twelve month period from November 1 through October 31. The
annual rate will become effective on November 1 by adding it
to Northern's winter period Cost of Gas Adjustment (CGA).
It will be modified after six months and included with the
summer CGA effective May 1 to more accurately recover
through October 31 the prior year's actual ERCs.
The estimated November 1, 1998 ERC rate adjustment
of $0.0035 per therm is designed to recover, over the twelve
month period ending October 31, 1999, the costs incurred
over the initial period December 1992 through June 1998.
Northern proposes to file a new tariff, Original Page 70, in
September 1998 which will contain the actual rate adjustment
calculation. The filing contained the following N.H.P.U.C.
No. 8-Gas tariff pages which refer to the application of the
ERC rate adjustment on Northern's firm sales and
transportation rate schedules:
Seventh Revised Page 2A;
Twelfth Revised Page 23;
Twelfth Revised Page 24;
Thirteenth Revised Page 25;
Thirteenth Revised Page 26;
Thirteenth Revised Page 27;
Thirteenth Revised Page 28;
Twelfth Revised Page 29;
Thirteenth Revised Page 30;
Thirteenth Revised Page 31;
Seventh Revised Page 53;
Tenth Revised Page 60;
Tenth Revised Page 61;
Tenth Revised Page 62;
Eleventh Revised Page 63;
Original Page 67;
Original Page 68; and
Original Page 69.
Commission Staff (Staff) has notified the
Commission that it requires time to investigate the filing
and supporting materials and, therefore, has requested that
the proposed tariff pages be suspended. Staff stated that
the proposed ERC rate adjustment of $0.0035 per therm was
not included on any of the referenced tariff pages; however,
the tariff pages all refer to the ERC rate adjustment
calculation that Northern proposes to file in September
1998. Staff has proposed that a full procedural schedule be
established for the proceeding.
We have reviewed Staff's request and will suspend
the proposed tariff pages to allow a thorough review of the
filing and supporting materials. Additionally, we direct
Northern to file its ERC rate adjustment calculation on or
before September 1, 1998 to allow sufficient time for Staff
review prior to the hearings scheduled in October 1998.
Based upon the foregoing, it is hereby
ORDERED, that the tariff pages delineated above of
Northern are SUSPENDED; and it is
FURTHER ORDERED, that Northern shall file its ERC
rate adjustment calculation on or before September 1, 1998.
By order of the Public Utilities Commission of New
Hampshire this thirteenth day of May, 1998.
Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary