DG 99-024
EnergyNorth Natural Gas, Inc.
1999 Summer Cost of Gas Adjustment
Order Approving the Cost of Gas Adjustment
and Revised Tariffs
O R D E R N O. 23,180
March 30, 1999
APPEARANCES: McLane, Graf, Raulerson, and Middleton by
Steven V. Camerino, Esq., on behalf of EnergyNorth Natural Gas,
Inc.; and Robert Egan and Stephen P. Frink for the Staff of the
New Hampshire Public Utilities Commission.
I. PROCEDURAL HISTORY
On February 16, 1999, EnergyNorth Natural Gas, Inc.
(ENGI or the Company) filed with the New Hampshire Public
Utilities Commission (Commission) its cost of Gas Adjustment
(CGA) for the 1999 summer period. Accompanying its CGA filing
was a Motion for Protective Order and Confidential Treatment,
which was granted by Commission Order No. 23,160 (March 9, 1999).
ENGI's filing included the direct testimony and supporting
attachments of Mark G. Savoie, Rate Analyst, and Donald E.
Carroll, Vice President of Gas Supply.
An Order of Notice was issued on February 22, 1999.
ENGI informed customers of the impending change by publishing a
copy of the Order of Notice in the Union Leader on February 26,
1999.
Apart from the Office of Consumer Advocate which is a
statutorily recognized intervenor, there were no intervenors in
this docket. A duly noticed hearing on the merits was held at
the Commission on March 24, 1999.
II. POSITIONS OF THE PARTIES AND STAFF
EnergyNorth Natural Gas, Inc.
ENGI witnesses Mark G. Savoie, Rate Analyst, and Donald
E. Carroll, Vice President of Gas Supply, addressed the following
issues: a) calculation of the Firm Sales CGA and the impact on
customer bills; b) factors contributing to the decreased rate;
and c) changes to the tariff pages.
A. Calculation and Impact of the Firm Sales CGA
The proposed 1999 summer CGA credit of $0.0944 per
therm (allowing for monthly, cumulative adjustments not to exceed
a maximum credit of $0.1243 per therm and a minimum credit of
$0.0645 per therm) was calculated by decreasing the anticipated
cost of gas of $11,343,439 by net adjustments of $558,160 and
dividing the adjusted gas costs of $10,785,279 by projected therm
sales of 36,085,306 to arrive at a cost of gas of $0.2989 per
therm, and then deducting the base summer cost of gas of $0.3933
per therm.
ENGI's proposed 1999 summer CGA is a credit of $0.0944
per therm for Firm Sales, representing a decrease of $0.0806 per
therm from last summer's average overall Firm Sales credit of
$0.0138 per therm.
If the proposed CGA rate is in effect for the entire
summer period, an average domestic customer's monthly bill would
be $4.06, or 11.9%, less than last summer.
B. Factors Contributing to the Decreased CGA
Projected gas costs are significantly lower than those
experienced for the 1998 summer period, due primarily to lower
demand charges resulting from the elimination of the Gas Supply
Realignment (GSR) surcharge on the Tennessee Gas Pipeline (TGP).
As a result of the Federal Energy Regulatory Commission's Order
636, TGP began collecting GSR costs in September 1993. The
elimination of the GSR demand charge reduced the summer period
demand charges by approximately $310,000 as compared to last
summer. That, and other decreases in demand charges, account for
approximately half of the decrease in the CGA rate.
The only other significant item contributing to the
decrease in the proposed rate is the change in the prior period
over/under collection. The 1999 summer CGA calculation includes
a prior period over collection and related adjustments of
$480,724, compared to a prior period under collection and related
adjustments of $103,367 in the 1998 summer CGA, which account for
approximately one quarter of the decrease in the CGA rate.
The remainder of the decrease in the proposed CGA rate
can be attributed to a slight reduction in projected commodity
prices from those paid last summer.
C. Changes to the Tariff Pages
The Company described changes to its tariff that would
remove the gas costs, as currently defined, from the base rates
and reflect two distinct charges. The two charges would be a
delivery or transportation charge and an energy or fuel charge.
The base rate as reported in ENGI's Firm Rate Schedules
is comprised of both gas and non-gas costs, as determined in the
early 1990's. The base rate is adjusted to reflect current gas
prices and prior period over or under recoveries by applying a
charge or credit as approved in the cost of gas adjustment
proceedings. As filed in this docket, the ENGI Firm Rate
Schedule for a domestic general customer reflects Base Rate of
$0.5453 per therm and a CGA credit of $0.0944 per therm for a Net
Rate of $0.4509 per therm. The proposed change to the Rate
Schedule would reflect a Delivery Cost of $0.1520 per therm and a
Gas Cost of $0.2989 per therm for a Net Rate of $0.4509 per
therm.
ENGI asserted that the proposed changes in the tariff
pages would clearly delineate the gas and non-gas costs, helping
to eliminate confusion regarding those components of a customer's
bill and further assisting in the education of its customers.
The Company stated that it would be willing to include a line on
the bill stating the change in the rate from the prior month so
long as the billing system could handle this notice without
requiring a large number of two-page bills.
Staff
Staff stated its support for the proposed 1999 summer
CGA credit of $0.0944 per therm and recommended approval of the
tariff changes detailed by the Company.
III. COMMISSION ANALYSIS
After having reviewed the record, we conclude that
ENGI's proposed 1999 summer CGA is consistent with its previous
performance relative to minimizing gas costs. Accordingly, we
accept and approve ENGI's proposed 1999 summer CGA rate of
($0.0944) per therm. We also find that ENGI's proposed changes
to its tariffs are reasonable and in the public good.
We agree with the Company and Staff that the tariffs
should clearly reflect per unit cost gas. Tariff pages and
customer bills that delineate between gas and non-gas costs will
help educate customers as to what their gas costs are and better
prepare them to assess pricing and supply alternatives that may
become available to them as the industry moves further to
competition.
In addition, we direct the Company to include the
billing information on gas cost changes from month to month
described above. We trust that the Company will be able to
accomplish this through inexpensive changes to its billing
system. If that is not the case, the Company shall notify us
within 30 days of this order.
Based upon the foregoing, it is hereby
ORDERED, that ENGI's Fourteenth Revised Page 32
Superseding Thirteenth Revised Page 32, N.H.P.U.C. tariff of
EnergyNorth Natural Gas, Inc. providing for a Summer 1999 Cost of
Gas Adjustment credit of $0.0944 per therm for the period April
1, 1999 through October 31, 1999 is hereby approved; and it is
FURTHER ORDERED, that the over or under collection
shall accrue interest at the Prime Rate as reported in the Wall
Street Journal. The rate is to be adjusted each quarter using
the rate reported on the first date of the month preceding the
first month of the quarter; and it is
FURTHER ORDERED, that ENGI may adjust the approved CGA
rate of ($0.0944) upward or downward monthly based on ENGI's
calculation of the projected over or under collection for the
period, but the cumulative adjustments shall not exceed ten
percent (10%) of the approved unit cost of gas of $0.2989 per
therm (or $0.0299 per therm); and it is
FURTHER ORDERED, that ENGI shall provide the Commission
with its monthly calculation of the projected over or under
calculation, along with the resulting revised CGA rate for the
subsequent month, not less than five (5) business days prior to
the first day of the subsequent month. ENGI shall include a
revised tariff page 32 - Calculation of Cost of Gas Adjustment
for firm sales and revised firm rate schedules if the Company
elects to adjust the CGA rate; and it is
FURTHER ORDERED, that ENGI tariff pages shall be
revised to eliminate the base unit cost of gas included in base
rates and reflect the unit cost to be added to base rates to
determine the net gas cost; and it is
FURTHER ORDERED, that ENGI shall file its
reconciliation of the prior period under/over collection no later
than June 30 for the winter period and January 31 for the summer
period; and it is
FURTHER ORDERED, that ENGI shall make the billing
information changes described in the body of the order.
By order of the Public Utilities Commission of New
Hampshire this thirtieth day of March, 1999.
Douglas L. Patch Susan S. Geiger Nancy Brockway
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary