DR 98-192
Connecticut Valley Electric Company Inc.
1999 Conservation and Load Management Percentage Adjustment
Order Addressing Interventions and Procedural Schedule
O R D E R N O. 23,103
January 11, 1999
APPEARANCES: Kenneth C. Picton, Esq., for Connecticut
Valley Electric Company Inc.; Heidi L. Kroll for the Governor's
Office of Energy and Community Services; Kenneth E. Traum for the
Office of the Consumer Advocate for residential ratepayers; and
Michelle A. Caraway, Paul S. Keller, and James J. Cunningham, Jr.
for the Staff of the New Hampshire Public Utilities Commission.
I. PROCEDURAL HISTORY
On November 4, 1998, Connecticut Valley Electric
Company Inc. (CVEC) filed with the New Hampshire Public Utilities
Commission (Commission) its Proposal for 1999 Conservation and
Load Management (C&LM) Percentage Adjustment (C&LMPA). CVEC is
proposing a 1999 C&LMPA which is substantially composed of the
collection of the net present value of the net revenue loss for
the 1999-2024 period. CVEC ramped down the C&LM programs in
CVEC's service territory during 1997, as ordered by the
Commission in Order No. 22,536 (March 31, 1997). The proposed
1999 C&LMPA recovers no direct program spending, only the net
present value of future net revenue loss, as well as 1999
administrative costs and prior period over/undercollections. The
1999 C&LMPA is also proposed to be applicable only to off-season
billings in the March through November 1999 period. No C&LMPA
billing is proposed for the peak season months of January,
February, and December 1999. The proposed C&LMPAs are 2.32% for
the residential rate class and 4.37% for the commercial and
industrial rate class.
By an Order of Notice issued November 30, 1998, the
Commission scheduled a prehearing conference for January 4, 1999,
set deadlines for intervention requests and objections thereto,
outlined a procedural schedule, and required the parties and
Commission Staff (Staff) to summarize their positions with regard
to the filing for the record. On December 30, 1998, the
Governor's Office of Energy and Community Services (ECS) filed a
late Motion for Full Intervention. There were no objections to
ECS' motion to intervene. The Office of the Consumer Advocate
(OCA) is a statutorily recognized intervenor.
At the prehearing conference, CVEC, ECS, OCA, and Staff
modified certain dates of the procedural schedule as outlined in
the Order of Notice. The revised procedural schedule agreed to
is as follows:
Data Requests by Staff and January 8, 1999
Intervenors
Company Data Responses January 15, 1999
Technical Session January 20, 1999
Testimony by Staff and January 25, 1999
Intervenors
Data Requests by the Company January 28, 1999
Data Responses by Staff and February 1, 1999
Intervenors
Settlement Conference February 5, 1999
Filing of Settlement Agreement, February 16, 1999
if any
Hearing February 18, 1999
At the prehearing conference, in accordance with the
Order of Notice, CVEC, ECS, OCA and Staff stated their positions
with regard to the filing for the record. CVEC stated that it
proposes no C&LM programs for 1999. CVEC proposed an
acceleration of the recovery of net revenue loss on a net present
value basis, all such recovery to be completed by November 1999.
ECS stated that it has conducted a preliminary review
of CVEC's recent filing. ECS is concerned about CVEC's proposal
to accelerate the recovery of the net revenue loss for the period
1999 through 2024. ECS stated that it was not clear what amount
of lost fixed cost recovery, if any, might be appropriate in a
restructured industry. ECS stated that the Commission has asked
the Energy Efficiency Working Group (Working Group) to consider
this issue, among many others. ECS stated that the accelerated
recovery could provide CVEC with the opportunity to double
recover certain costs, i.e., costs that it might also recover in
future rate cases or through potential future stranded cost
recovery charges. ECS is concerned that the proposed net revenue
loss might include lost generation revenues that a transmission
and distribution company might not be in a position to collect.
Furthermore, if CVEC's proposal were adopted, ECS is concerned
that CVEC would have a greater assurance of cost recovery than it
would have under traditional ratemaking. ECS is troubled that
CVEC has phased out its entire portfolio of C&LM programs and
that it is not proposing to offer any programs in 1999. ECS
feels strongly that if funds are going to be collected from
ratepayers, then there should be C&LM programs available to
ratepayers to help them lower their bills.
OCA stated that its concerns include: (1) whether there
are programs that could be offered cost-effectively; (2) whether
there are programs that could be offered to low-income customers;
and (3) whether educational programs should be offered. OCA
stated that it was unaware of what information CVEC possessed,
including any analyses CVEC has completed, concerning the
benefits of such potential programs. OCA also expressed concern
about the acceleration of net revenue loss as a concept.
Further, OCA was unsure whether it supports billing for C&LM in
the off-season, if the benefits, theoretically, will be aimed
primarily at the peak season.
Staff is also unsure whether it is appropriate for the
Commission to approve the accelerated recovery of the lost net
revenue stream as CVEC has proposed until such time as the
Working Group has completed its deliberations. Staff has
concerns regarding the assumptions that were used to net present
value the revenue stream, including the inflation and discount
rates. Staff stated that the Commission allowed CVEC to use 1997
to phase out its programs and believes that it is not the best
use of ratepayers' money at this time to require CVEC to
reintroduce programs that may or may not be appropriate in the
future. Staff recommended that no C&LM programs be offered until
the Working Group, which was established in Docket DR 96-150, has
completed its deliberations and has provided its recommendations
to the Commission. At the time the Commission rules upon those
recommendations, Staff believes that it would be entirely
appropriate for CVEC to consider the effects of the Commission's
order regarding energy efficiency programs on CVEC and to request
approval for C&LM programs consistent with the Commission's
order.
II. COMMISSION ANALYSIS
We find the proposed procedural schedule, as modified
by the parties and Staff, to be reasonable and will, therefore,
approve it for the duration of the case. Additionally, we will
grant the late Motion for Full Intervention filed by ECS.
Based upon the foregoing, it is hereby
ORDERED, that the procedural schedule delineated above
is APPROVED; and it is
FURTHER ORDERED, that the Motion for Full Intervention
filed by the Governor's Office of Energy and Community Services
is GRANTED.
By order of the Public Utilities Commission of New
Hampshire this eleventh day of January, 1999.
Douglas L. Patch Susan S. Geiger Nancy Brockway
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary