DR 98-049 Northern Utilities, Inc. Recovery of Environmental Response Costs Order Approving Procedural Schedule O R D E R N O. 22,962 June 23, 1998 APPEARANCES: LeBoeuf, Lamb, Greene & MacRae by Paul B. Dexter, Esq. and Meabh Purcell, Esq. for Northern Utilities, Inc. and Michelle A. Caraway and Stephen P. Frink for the Staff of the New Hampshire Public Utilities Commission. I. PROCEDURAL HISTORY 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 actual annual 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. On May 11, 1998, the Commission issued an Order of Notice which scheduled a Prehearing Conference for June 10, 1998. The Order of Notice also set deadlines for intervention requests and objections thereto, outlined a proposed procedural schedule, and required the Parties and Staff to summarize their positions with regard to the filing for the record. There were no Motions to Intervene filed. The Office of the Consumer Advocate (OCA) is a statutorily recognized intervenor. After the Prehearing Conference, Northern and Staff agreed to modify the proposed procedural schedule as outlined in the Order of Notice. On June 16, 1998, Staff notified the Commission of the various revisions to the procedural schedule agreed to by Northern and Staff and also stated that the concurrence of the OCA had been obtained. The revised procedural schedule is as follows: Responses to Oral Data Requests June 24, 1998 Propounded at the 1st Technical Session Data Requests by Staff and July 8, 1998 Intervenors Company Data Responses July 17, 1998 Technical Session July 29, 1998 Testimony by Staff and August 12, 1998 Intervenors Data Requests by the Company August 26, 1998 Data Responses by Staff and September 9, 1998 Intervenors Settlement Conference September 23, 1998 Filing of Settlement Agreement, September 30, 1998 if any Hearings October 7, 1998 & October 8, 1998. In accordance with the Order of Notice, Northern and Staff stated their issues with regard to the filing for the record. Northern stated that the April 10, 1998 filing was quite thorough and indicated that Northern was seeking approval of a rate adjustment related to the recovery of costs associated with remediating former MGPs. The issues pertain primarily to the cleanup of the sites and the collection of the related costs. Staff stated that its issues relate to whether and to what extent remediation costs relating to the former MGPs should be borne by utility shareholders or passed along to ratepayers; whether the MGPs' operations were prudent; whether Northern acted prudently and incurred reasonable costs in responding to, investigating and remediating MGP contamination; and what the appropriate rate scheme is to recover any Commission authorized pass-through to ratepayers. The OCA was not present at the Prehearing Conference. II. COMMISSION ANALYSIS We find the proposed procedural schedule to be reasonable and will, therefore, approve it for the duration of the proceeding. Based upon the foregoing, it is hereby ORDERED, that the procedural schedule delineated above is APPROVED. By order of the Public Utilities Commission of New Hampshire this twenty-third day of June, 1998. Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger Chairman Commissioner Commissioner Attested by: Claire D. DiCicco Assistant Secretary