DR 98-195
ENERGYNORTH NATURAL GAS, INC.
Petition for Authority to Operate in the City of Berlin
Order Approving Interventions
and
Deferral of Procedural Schedule
O R D E R N O. 23,142
February 9, 1999
APPEARANCES: McLane, Graf, Raulerson & Middleton by
Steven V. Camerino, Esq. on behalf of EnergyNorth Natural Gas,
Inc.; Upton, Sanders and Smith by Robert Upton, Esq. on behalf of
the City of Berlin, NH; the Office of the Consumer Advocate by
Kenneth E. Traum on behalf of residential utility consumers; and
Larry S. Eckhaus, Esq. for the Staff of the New Hampshire Public
Utilities Commission.
I. PROCEDURAL HISTORY
On November 3, 1998, EnergyNorth Natural Gas, Inc.
(ENGI or the Company) filed with the New Hampshire Public
Utilities Commission (Commission), pursuant to RSA 374:22 and 26,
a Petition for Authority to Operate in the City of Berlin
(Petition) accompanied by the prefiled testimony of Rate Analyst
Mark Savoie. According to the Petition, natural gas supplies
will be provided by interconnection with the Portland Natural Gas
Transmission System (PNGTS), presently under construction. The
Company is negotiating with PNGTS for an interconnection and
supply. The impetus for the Petition is the construction of the
North Country Medium Security Prison (Prison) in Berlin.
Staff promulgated a series of thirty-two (32)
interrogatories intended to elicit additional information
regarding the proposal on November 6, 1993. On November 13,
1998, the Commission issued an Order of Notice for a Prehearing
Conference on December 11, 1998 and for a public hearing in
Berlin on January 6, 1999.
II. PREHEARING CONFERENCE - DECEMBER 11, 1998
1. Positions Of The Parties And Staff
a. EnergyNorth
ENGI reports that the State of New Hampshire Department
of Corrections (DOC) is currently constructing in Berlin a new
prison complex, which the Department intends to equip with
facilities that utilize natural gas. The Prison will be located
approximately one-half mile from the PNGTS pipeline, which is
currently under construction, and the DOC is presently in
negotiation with ENGI to provide natural gas service to the
Prison.
ENGI also states that it anticipates additional
development around the prison complex as well as interest from
governmental and private organizations in the City of Berlin
which over time may result in extension of the gas distribution
system. Consequently, ENGI asks that it be granted the service
territory for the entire City of Berlin. Moreover, as there
appears to be no opposition to ENGI's serving the Prison, it
seeks expeditious treatment regarding the prison even if it
requires bifurcation to address, first, service to the Prison
and, later, the remainder of the City.
b. City of Berlin
On November 10, 1998, the Berlin City Manager wrote the
Commission supporting and endorsing the Petition on behalf of the
Mayor and City Council of Berlin. Subsequently, on December 7,
1998, the City filed a Motion to Intervene partially in favor of
the Petition, but subject to certain conditions and concerns
which were restated at the Prehearing Conference, including:
limiting the extent of the franchise to an area encompassing the
Prison which will be constructed in 1999; reserving to the City
of Berlin certain areas of the City for the delivery of wholesale
natural gas; establishing the appropriate rates for the service
area which may, or may not, be ENGI's existing rates; determining
whether the federal and state tariffs for service from the take
station will provide the maximum benefit possible for the City
into the future; ensuring that the take station constructed by
PNGTS will be appropriately sized and will not be for the
exclusive use of ENGI; and, requiring that approval of this
Petition would not ultimately impose any interference with
propane or petroleum distillate storage or distribution in the
City. The City did agree that it seemed appropriate to proceed
expeditiously with service to the Prison and did not disagree
with the Company's dual track suggestion.
c. Office of Consumer Advocate
The OCA is very supportive of bringing natural gas to
the north country and supports the Petition, but raises questions
similar to those posed by the City as well as whether there will
be any improper or unreasonable subsidization of ENGI's
activities by ratepayers.
d. Staff
Staff noted the basic issues related to whether ENGI
has the managerial, technical and financial capability to operate
the proposed service territory and whether granting the proposed
service territory would be for the public good. In addition,
Staff raised questions concerning: the present and future plans
to serve the City; whether the contract with the Prison will be a
special contract pursuant to Puc 1606.01 and the Company's
tariff; the costs of the main extension to the Prison; whether
there are any bypass issues; and, whether cogeneration will be
installed at the Prison.
e. Other Comments
Prior to the prehearing conference on December 11,
1998, letters in support of ENGI's petition were received from
District 1 Executive Councilor Raymond S. Burton, District One
Senator Frederick W. King, Hank Risley, Commissioner of the
Department of Corrections, George M. Bald, Commissioner of the
Department of Resources and Economic Development, and the
Northern White Mountain Chamber of Commerce.
2. Procedural Schedule
Following the Prehearing Conference, the parties and
Staff met in a Technical Session to discuss the above issues and
develop a procedural schedule to govern the remainder of this
proceeding.
III. PUBLIC HEARING, BERLIN - JANUARY 6, 1999
At the Public Hearing in Berlin, the Company reiterated
its proposal to initially serve the Prison and later the rest of
the City of Berlin as the opportunity presents itself, noting
that expansion to the whole City may not be economical and ENGI
looks forward to a partnership arrangement with the City and
others to help make the investment to bring natural gas to other
parts of the City. The Company stated that it had met with
business leaders, the Chamber of Commerce and the City Council,
in addition to the support from others referred to above. Mr.
Richard Demers, ENGI Vice President of Marketing, stated that the
City Council had voted unanimously in support of the Company's
franchise request. Interim City Manager Robert Theberge
confirmed the City Council's full support of the proposed
franchise.
Mr. Hank Risley, DOC Commissioner, indicated that the
Prison was sited and designed to use natural gas because of the
proximity of the PNGTS pipeline. The current schedule was to
have gas available by October, 1999 in time for completion of the
Prison by December, 1999. Mr. Demers stated that the Company is
planning to install the main from the PNGTS pipeline to the
Prison in the spring of 1999 to meet DOC's timetable.
Mr. Albin Johnson, Berlin Water Works Superintendent
submitted comments relating to the location of the take station
and protection of the municipal well and aquifer recharge area,
and the possibility of the Water Works becoming a customer.
IV. COMMISSION ANALYSIS
1. Interventions
At the prehearing conference, the Commission approved
the intervention of the City of Berlin, there being no
objections. The Office of the Consumer Advocate (OCA) appeared on
behalf of residential utility consumers pursuant to RSA 363:28
II.
2. Procedural Schedule
Inasmuch as the contracts between ENGI and the DOC, and
ENGI and PNGTS, have not been finalized, the Parties and Staff
agreed to defer establishing a procedural schedule until the
contract(s) were executed and filed with the Commission. At that
time, the Parties and Staff will develop a procedural timetable
recognizing ENGI's and the DOC's construction and service
requirements.
Based upon the foregoing, it is hereby
ORDERED, the Commission will await the recommendation
of the Parties and Staff regarding the procedural schedule for
the remainder of this proceeding.
By order of the Public Utilities Commission of New
Hampshire this ninth day of February, 1999.
Douglas L. Patch Susan S. Geiger Nancy Brockway
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary