LIBERTY UTILITIES (ENERGYNORTH NATURAL GAS) CORP. d/b/a LIBERTY UTILITIES
ORDER No. 25, 958
DG 16-814
New Hampshire Public Utilities Commission
October 26, 2016
2016/2017
Winter/Summer Cost of Gas Filing
Order
Approving Cost of Gas Rates and Other Charges
Michael J. Sheehan, Esq., for Liberty Utilities (EnergyNorth
Natural Gas) Corp. d/b/a Liberty Utilities.
John
S. Clifford, Esq., for the Staff of the Public Utilities
Commission.
MARTIN
P. HONIGBERG CHAIRMAN
In this
order, the Commission approves Liberty's proposed
2016-2017 winter and summer cost of gas rates. For
residential customers the initial rate for the winter period
(November 1, 2016 - April 30, 2017) will be $0.7162 per therm
and the fixed-price option will be $0.7362 per therm. The
local delivery adjustment charge (LDAC) will be $0.0553 per
therm from November 1 through December 31, and $0.0640 per
therm beginning January 1, 2017. For non-fixed-price
residential customers, the cost of gas rate is $.2021 per
therm higher than the weighted average residential cost of
gas of $0.5141 per therm in effect during the 2015-2016
winter period. The fixed-price cost of gas rate for this
winter is $0.0354 per therm lower than last year.
The
proposed COG rate for residential customers during the summer
period (May 1, 2017 - October 31, 2017) is $0.4368 per therm.
The proposed rate is $0.0139 per therm higher than the actual
weighted average cost of gas for the 2016 summer period. An
average residential heating customer will see an average
monthly bill of about $135 per month in winter 2016-2017
compared to $119 for winter 2015-2016 and an average monthly
bill of $44 in summer 2017 which was about the same in 2016.
In this order, the Commission also approves Liberty's
proposal to reduce the number of COG rate filings from two
per year (for winter and summer rates) to a single annual COG
filing implementing seasonal (winter and summer) COG rates.
I.
PROCEDURAL HISTORY
Liberty
Utilities (EnergyNorth Natural Gas) Corp. d/b/a Liberty
Utilities (Liberty) is a public utility distributing natural
gas to approximately 90, 000 customers in southern and
central New Hampshire and in the city of Berlin. On September
1, 2016, Liberty filed a proposed rate adjustment pursuant to
its cost of gas (COG) clause and other rate adjustments, in
its tariff for the 2016-2017 winter and summer periods. The
filing included direct testimony and supporting schedules.
Commission Staff held discovery and conducted a technical
session with Liberty on October 4, 2016. The Company filed a
modified request on October 10 before the final hearing held
on October 11. There were no petitions for intervention filed
in the docket and no person appeared at the final hearing to
provide public comment either in support of or in opposition
to the proposed COG rates. Liberty's filing and
subsequent docket entries, other than information for which
confidential treatment is requested of or granted by the
Commission, are posted on the Commission's website at
http://www.puc.nh.gov/Regulatory/Docketbk/2016/16-814.html.
II.
COST OF GAS ADJUSTMENT MECHANISM
The
cost of gas adjustment mechanism was implemented in 1974
during a time of rapidly changing prices as a way to
immediately pass on to consumers price increases and
decreases in energy supply costs without having to go through
extended proceedings to change delivery rates. Supply costs
make up approximately 50 percent of a residential heating
customer's annual bill and include commodity prices (the
cost of gas), the cost to transport the gas over the
pipelines, and storage costs. Liberty has no control over the
price of natural gas which is an unregulated commodity.
Similarly, it has no price control over pipeline
transportation rates, which are set by the Federal Energy
Regulatory Commission. The COG mechanism allows the Company
to directly and efficiently pass along those costs to its
customers without mark-up or profit. COG rates are initially
set using projected costs and sales for the upcoming winter
and summer periods. The majority of natural gas storage and
pipeline costs are incurred to meet winter demand and,
although the Company is billed evenly throughout the 12-month
period, those costs are allocated to the winter period and
recovered through winter COG rates. The Company may adjust...