DR 98-210
CONCORD ELECTRIC COMPANY AND EXETER & HAMPTON ELECTRIC
COMPANY
Fuel Adjustment Clause, Purchased Power Adjustment Clause, and
Administrative Service Charge
Order Approving Charges
O R D E R N O. 23,096
December 29, 1998
APPEARANCES: LeBoeuf, Lamb, Greene & MacRae by Scott J.
Mueller, Esq. on behalf of Concord Electric Company and
Exeter &
Hampton Electric Company; and Henry J. Bergeron and Tracy M.
Guyette for the Staff of the New Hampshire Public Utilities
Commission.
I. PROCEDURAL HISTORY
On December 3, 1998, Unitil Service Corporation,
(Unitil), on behalf of Concord Electric Company (CEC) and
Exeter
& Hampton Electric Company (E&H) (collectively the
Companies),
filed with the New Hampshire Public Utilities Commission
(Commission) revised tariff pages, supporting testimony, and
exhibits for proposed revisions to the Companies' retail
fuel
adjustment clauses (FAC) and purchased power adjustment
clauses
(PPAC) and short-term purchased power rates for qualifying
facilities (QFs) for the period of January 1, 1999 through
June
30, 1999.
On the same day, Unitil also filed a tariff filing
revising its Administrative Service charge (ASC), which is
the
Company's mechanism for collecting costs associated with the
Pilot Program.
On December 8, 1998, the Commission issued an
Order of
Notice which noted that the proceeding would address issues
related to cost recovery; forecasts of sales, revenues and
the
prices of oil and gas; avoided costs for qualifying
facilities;
and the treatment of Pilot Program costs.
On December 17, the Executive Director & Secretary
issued a secretarial letter to the parties in which the
scope of
the proceeding was clarified. It pointed out that the
adjustment
to the Administrative Service charges would be addressed in
this
docket instead of in a separate hearing.
II. POSITIONS OF THE PARTIES AND STAFF
A. The Companies
Unitil presented calculations supporting CEC's
request
for a FAC credit of ($0.00998) per kWh, a PPAC charge of
$0.00319
per kWh, and an ASC of $0.00005 per kWh. The combined
effect of
these three rates is to decrease a typical 500 kWh
residential
customer's bill by $2.94 per month, or 5.72%.
Unitil also presented calculations supporting
E&H's
request for a FAC credit of ($0.01010) per kWh, a PPAC
charge of
$0.00505 per kWh, and an ASC of $0.00008 per kWh. The
combined
effect of these three rates is to decrease a typical 500 kWh
residential customer's bill by $2.14 per month, or 4.33%.
Unitil witness Scott A. Long, Senior Energy
Analyst for
Unitil Service Corp., presented the January 1999 through
December
1999 Unitil Power Corporation (UPC) production plan,
associated
costs, and estimated short-term avoided cost rate in his
direct
testimony. The UPC production plan is the basis for UPC's
fuel,
purchased power, and transmission service costs, and is used
in
developing UPC's wholesale rates which it charges CEC and
E&H
under the Unitil System Agreement for firm service.
UPC's demand charge is $24.37/kW-Month, the base
energy
charge is $0.00493/kWh, and the fuel charge is $0.01575/kWh.
The
demand charge is increasing from $22.01/kW-Month primarily
due to
a short term demand allocation correction made in this
filing.
Previously, short term demand dollars were incorrectly
allocated
to fuel accounts. Decreasing levels of overcollection from
the
prior forecast period to the January through June 1999
forecast
period also caused the demand charge to increase.
The base energy charge is decreasing from
$0.00570/kWh
to $0.00493/kWh due to lower forecast costs associated with
the
Seabrook Station because of a refueling outage scheduled to
occur
in March and April of 1999. When the unit is not producing
output, UPC is not obligated to pay.
The fuel charge is decreasing from $0.02069/kWh to
$0.01575/kWh primarily because of lower than projected oil
prices
in the previous period (causing an overcollection), lower
forecast oil prices in the January through June 1999 period,
and
the effect of the 170 MW-yr contract which provides
dispatchable
system energy with prices linked to Norwalk Harbor oil
prices.
Another factor in the decrease is the short term demand
allocation correction described above which now properly
allocates these charges to the demand charge instead of to
the
fuel accounts.
UPC's proposed rates represent a 10.72% increase
in
demand charges (from $22.01/KW-Month to $24.37/KW-Month), a
decrease of 13.51% in base energy charges (from $0.00570/kWh
to
$0.00493/kWh), and a decrease of 23.88% in fuel charges
(from
$0.02069/kWh to $0.01575/kWh).
In her prefiled testimony, Linda S. Hafey, Project
Leader of Regulatory Operations for Unitil Service Corp.,
provided an explanation of the Companies' Mitigation
Proceeds
Credit (MPC), the Sales Margin Retention Credit (SMRC), and
the
Participation Incentive Credit (PIC) as well as the Non-
Participant Protection Adjustment (NPA) for the Retail
Competition Pilot Program. This included an explanation of
how
the NPA protects non-participating customers from
unrecovered
power supply costs due to customer participation in CEC's
and
E&H's Retail Competition Pilot Program.
The Companies also filed revised tariffs for
short-term
power purchase rates for Qualifying Facilities as follows:
Energy Rates on Peak 2.51 cents per kWh
Off Peak 2.13 cents per kWh
All hours 2.29 cents per kWh
Capacity Rates $0.00 per kW-year
B. Commission Staff
Staff did not provide testimony or oppose the
Companies' filing but did conduct cross examination on a
number
of issues: 1) the proposed decrease in rates when prior
Company
testimony in another docket indicated that rates would
increase,
2) the mitigation savings that Unitil Power has achieved by
terminating contracts, 3) the recent buyout of the purchased
power contract associated with the Baystate Agawam
Turboexpander
facilities, 4) the relationship between the Connecticut
nuclear
plant outages, the 170 MW-yr NU contract, and Norwalk Harbor
oil
prices, and 5) the projected growth figures for the year
1999
over 1998 and the accuracy of past forecasts.
III. COMMISSION ANALYSIS
We have reviewed all the testimony and exhibits in
this
case, including the responses provided by the Companies.
Based
on our review of the record, we find that the proposed FAC
for
the January 1, 1999 through June 30, 1999 period of a credit
of
($0.00998) per kWh for CEC and a credit of ($0.01010) per
kWh for
E&H is just and reasonable. We also find that the proposed
PPAC
of $0.00319 per kWh for CEC and $0.00505 per kWh for E&H is
just
and reasonable. In addition, the proposed ASC of $0.00005
for
CEC and $0.00008 for E&H is just and reasonable. For a
typical
CEC residential customer using 500 kWh per month, the net
result
of these charges will be a $2.94 decrease to the monthly
bill.
For a typical E&H residential customer using 500 kWh per
month,
the net result of these charges will be a $2.14 decrease to
the
monthly bill.
In addition, we find that the proposed short-term
avoided capacity and energy rates proposed by the Companies
are
just and reasonable.
Based upon the foregoing, it is hereby
ORDERED, that Concord Electric Company's Fuel
Adjustment charge for the period of January 1, 1999 through
June
30, 1999 shall be a credit of ($0.00998) per kWh, its
Purchased
Power Adjustment charge shall be $0.00319 per kWh, and its
Administrative Service charge shall be $0.00005 per kWh; and
it
is
FURTHER ORDERED, that Exeter & Hampton Electric
Company's Fuel Adjustment charge for the period of January
1,
1999 through June 30, 1999 shall be a credit of ($0.01010)
per
kWh, its Purchased Power Adjustment charge shall be $0.00505
per
kWh, and its Administrative Service charge shall be $0.00008
per
kWh; and it is
FURTHER ORDERED, that Concord Electric Company and
Exeter & Hampton Electric Company file revised tariff pages
in
compliance with this order on or before January 15, 1999.
By order of the Public Utilities Commission of New
Hampshire this twenty-ninth day of December, 1998.
Douglas L. Patch Susan S. Geiger Nancy
Brockway
Chairman Commissioner
Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary