DR 97-221
CONNECTICUT VALLEY ELECTRIC COMPANY, INC.
Petition for Extension of Temporary Billing Surcharge
Order Nisi Providing Approval for Extension of Temporary Billing
Surcharge
O R D E R N O. 22,984
July 21, 1998
On June 5, 1998, the Petitioner, Connecticut Valley
Electric Company, Inc. (CVEC), filed with the New Hampshire
Public Utilities Commission (Commission) a request to extend a
Temporary Billing Surcharge (TBS) for the purpose of recovery of
a number of costs that the Company has (with one exception)
deferred on its books. This TBS originated in DR 96-170, the
Company's base rate case, as a mechanism to collect its rate case
expenses and the temporary rate recoupment resulting from that
proceeding. To date, the TBS has been calculated as a surcharge
of 2.2% of the total electric bill, excluding winter months. On
October 15, 1997 the Company requested an extension of the TBS as
a means of collecting its audited 1996 pilot program costs
totaling $131,068. By secretarial letter dated December 1, 1997,
the Commission granted the Company's request. Since those costs
are nearly fully recovered at this time, the TBS as previously
authorized will end in early July.
At this time the Company is seeking to recover,
through an extension of the TBS, a total of $533,427. This
includes pilot costs of $16,861; legal costs relating to the
Wheelabrator litigation of $107,705; incremental ice storm costs
of $2,652; and restructuring costs of $406,209. CVEC also
proposes that it be authorized to compute interest monthly at the
prime rate on the uncollected TBS balance, beginning August 1,
1998. The Company also proposes to accrue carrying charges at
the prime rate on all pilot and restructuring costs incurred and
deferred subsequent to April 1, 1998 which are not being
recovered at this time.
Commission Staff has reviewed this request and
recommended approval. Based on Staff's review, we will approve
the continuation of the TBS for recovery of the pilot costs and
for the Wheelabrator litigation expenses. We direct our Staff to
audit such expenses as soon as practicable. We have approved
recovery of audited pilot costs previously, and find that
continued recovery is appropriate. Although we usually disfavor
the use of a surcharge to recover litigation or other expenses
that are traditionally reflected in base rates, we will allow the
recovery of the Wheelabrator litigation expenses in the proposed
manner because the Company's earnings appear insufficient to
enable it to absorb these costs in base rates and because the
expenses relate to a FERC action which the Commission fully
supported. It should be noted that the Company's request
includes an estimate of litigation costs from May 1, 1998 through
July 31, 1998 of $50,000. We will support recovery of these
costs, subject to audit and reconciliation through the Company's
monthly report of the TBS. In addition, we will approve the
Company's proposal for the accrual of interest on the TBS balance
of deferred costs, as these costs are approved for recovery, and
the methodology is identical to that used in CVEC's FAC, PPCA and
C&LMPA adjustment clauses. However, we do not approve the
accrual of interest on costs deferred but not yet approved for
recovery. Given the fact that such costs remain subject to audit
and verification, it does not appear appropriate to provide for
carrying charges on such deferred accounts.
We also do not approve the recovery through the TBS of
the incremental ice storm costs. The Company did not defer these
costs but instead wrote them off. In addition, the amount
requested is minimal when considering that CVEC's base rates
include an amount for storm costs on an on-going basis.
Therefore, such costs should not be considered for additional
recovery.
We do not believe that recovery of the Company's
restructuring costs is appropriate at this time. We believe that
reasonable and necessary costs relating to DR 96-150 and other
restructuring matters should be considered for recovery at the
time that CVEC implements retail choice for its customers. Until
that time, these costs should remain in a deferred account.
Based upon the foregoing, it is hereby
ORDERED NISI, that Connecticut Valley Electric Company,
Inc. is authorized to continue the Temporary Billing Surcharge,
at a level of 2.2% of electric bills, in order to recover
$124,566 in pilot program costs and litigation expenses
associated with the Wheelabrator matter, as discussed herein; and
it is
FURTHER ORDERED, that the Temporary Billing Surcharge
continue until the above costs are collected in full, subject to
final determination of the amounts upon completion of an audit by
Commission Staff; and it is
FURTHER ORDERED, that the Company continue to provide a
monthly report of its TBS collections for so long as the TBS
remains in effect; and it is
FURTHER ORDERED, that pursuant to N.H. Admin. Rules,
Puc 1604.03 or Puc 1605.03, the Petitioner shall cause a copy of
this Order Nisi to be published once in a statewide newspaper of
general circulation or of circulation in those portions of the
state where operations are conducted, such publication to be no
later than July 28, 1998 and to be documented by affidavit filed
with this office on or before August 4, 1998; and it is
FURTHER ORDERED, that all persons interested in
responding to this petition be notified that they may submit
their comments or file a written request for a hearing on this
matter before the Commission no later than August 11, 1998;
and it is
FURTHER ORDERED, that any party interested in
responding to such comments or request for hearing shall do so no
later than August 18, 1998; and it is
FURTHER ORDERED, that this Order Nisi shall be
effective August 21, 1998, unless the Commission provides
otherwise in a supplemental order issued prior to the effective
date; and it is
FURTHER ORDERED, that the Petitioner shall file a
compliance tariff with the Commission on or before August 4,
1998, in accordance with N.H. Admin. Rules, Puc 1603.02(b).
By order of the Public Utilities Commission of New
Hampshire this twenty-first day of July, 1998.
Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary