Liberty Utilities (EnergyNorth Natural Gas) Corp., 102616 NHPUC, 25, 958

Case DateOctober 26, 2016
CourtNew Hampshire
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...

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