DG 99-034
Northern Utilities, Inc.
Petition for Approval of License and Sale of Property
Order Approving License of Property
and
Order NISI Approving Sale of Property
O R D E R N O. 23,193
April 12, 1999
The Petitioner, Northern Utilities, Inc. (Northern), on
March 18, 1999, filed a petition with the New Hampshire Public
Utilities Commission pursuant to RSA 374:30 and RSA 366:3 for
approval of its agreement to: (1) license on a temporary basis
pending approval of the sale; and, (2) sell, to Portland Natural
Gas Transmission System (PNGTS) and Maritimes & Northeast
Pipeline, L.L.C. (Maritimes) the Newington Meter Facilities
("NMF") located in the Town of Newington, New Hampshire. The NMF
consists of (1) a meter station; (2) a 302 foot length of 12 inch
service pipeline extending from the meter station to PSNH's
plant; and, (3) a 138 foot length of 12 inch service extending
from the meter station to the location of what is now the
interconnection with PNGTS.
In support of the petition Northern stated the
following:
(a) the facilities were originally constructed to
provide interruptible service to Public Service Company of New
Hampshire (PSNH) at the Newington Generation Station pursuant to
an Interruptible Gas Sales Agreement approved by the Commission
in Docket DR 91-095;
(b) the recovery of the associated costs have never
been included in Northern's rate base and as such have never been
included in rates to customers;
(c) the Interruptible Gas Sales Agreement expired by
its own terms in March 1998 and that PSNH chose not to renew the
Agreement because of its intention to bypass Northern and become
a direct customer of PNGTS and Maritimes;
(d) the license and eventual sale of the facilities
will not affect Northern's receipt of natural gas from PNGTS at
Newington;
(e) Northern evaluated the following three options in
determining how to proceed with respect to the facilities:
(1) maintaining the NMF in place, in the unlikely event that PSNH
requests service from Northern in the future; (2) abandoning the
NMF in place; or (3) dismantling the equipment and reusing or
selling the salvageable material. Northern concluded that the
proposed sale represents the best option for Northern to maximize
its value on the assets;
(f) Northern proposes to sell the facilities for a
negotiated price which is close to the unrecovered costs of the
assets, and that the proceeds will be applied to reduce the
unrecovered costs; and
(g) The proposed sale allows PNGTS to use an existing
meter station to serve the PSNH Newington Generation Station.
On April 1, 1999, Commission Staff (Staff) filed a
memorandum recommending approval of the license and sale of the
facilities. Staff indicated that the sale will have no impact on
rates and that shareholders should be provided this opportunity
to recover capital costs that otherwise might be unrecoverable.
Based on this view, Staff asserted that approving the petition
would be in the public good in accordance with RSA 374:30.
COMMISSION ANALYSIS
RSA 374:30 states in part:
Any public utility may transfer or lease its
franchise, works, or system, or any part of
such franchise, works or system, exercised or
located in this state, or contract for the
operation of its works and system located in
this state, when the Commission shall find
that it will be for the public good and shall
make an order assenting thereto, but not
otherwise.
Based on the information presented in the petition, and
review and recommendation of Staff, we find that the license and
sale of the Newington Metering Facilities is in the public good.
Based upon the foregoing, it is hereby
ORDERED, that Northern Utilities, Inc.'s Petition for
Approval of License is APPROVED effective with the date of this
Order; and it is
FURTHER ORDERED NISI, that Northern Utilities, Inc.'s
Petition for Approval OF Sale of Property is APPROVED effective
May 12, 1999, unless the Commission provides otherwise in a
supplemental order issued prior to the effective date; and it is
FURTHER ORDERED, that the Petitioner shall cause a copy
of this Order and 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 April 19, 1999 and to be
documented by affidavit filed with this office on or before April
26, 1999; 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 April 29, 1999; and it
is
FURTHER ORDERED, that any party interested in
responding to such comments or request for hearing shall do so no
later than May 3, 1999; and it is
FURTHER ORDERED, that this Order Nisi shall be
effective May 12, 1999, unless the Commission provides otherwise
in a supplemental order issued prior to the effective date.
By order of the Public Utilities Commission of New
Hampshire this twelfth day of April, 1999.
Douglas L. Patch Susan S. Geiger Nancy Brockway
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary