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