UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act 1934
Date of Report (Date of earliest event reported): April 25, 2013
UNITIL CORPORATION
(Exact name of registrant as specified in its charter)
| New Hampshire | 1-8858 | 02-0381573 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 6 Liberty Lane West, Hampton, New Hampshire | 03842-1720 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (603) 772-0775
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 Regulation FD Disclosure
On April 29, 2013, the New Hampshire Public Utilities Commission (“NHPUC”) issued an Order in Docket No. DE 13-065, approving the second annual step increase under the long term rate plan of Unitil Energy Systems, Inc. (“Unitil Energy” or the “Company”), Unitil Corporation’s electric distribution utility subsidiary.
The NHPUC’s Order allows Unitil Energy to increase its distribution base revenue $2.8 million on an annual basis for effect May 1, 2013. Approximately $1.7 million of the increase in base revenue is associated with the recovery of utility plant additions made during the calendar year 2012. In addition, $0.7 million of the increase in base revenue is associated with increased spending for its vegetation management and reliability enhancement programs, and $0.4 million of the increase is associated with an increase in its storm reserve fund which will result in a corresponding increase in operations and maintenance expense.
On April 25, 2013, the NHPUC also issued an Order in Docket No. DE 13-084 allowing Unitil Energy to increase its storm recovery adjustment factor to recover previously deferred storm costs of $2.3 million, which were incurred to restore power and repair damage to the Company’s electrical system resulting from Superstorm Sandy. The NHPUC’s Order approves the recovery of costs associated with Superstorm Sandy over a five-year period with carrying charges at the Company’s long-term cost of debt, net of deferred taxes, or 4.52% to be applied to the uncollected balance through the recovery period.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Number | Exhibit | |
| 99.1 | NHPUC Order dated April 29, 2013 | |
| 99.2 | NHPUC Order dated April 25, 2013 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
UNITIL CORPORATION
| By: | ||
| /s/ Mark H. Collin | ||
| Mark H. Collin | ||
| Senior Vice President, Chief Financial Officer and Treasurer | ||
| Date: | May 2, 2013 | |
EXHIBIT INDEX
| Number | Exhibit | |
| 99.1 | NHPUC Order dated April 29, 2013 | |
| 99.2 | NHPUC Order dated April 25, 2013 | |
Exhibit 99.1
STATE OF NEW HAMPSHIRE
PUBLIC UTILITIES COMMISSION
DE 13-065
UNITIL ENERGY SYSTEMS, INC.
Tariff Filing for Step Adjustment, Increase to Annual Increment to the
Storm Reserve Fund and One-Year Extension of Storm Hardening Pilot Program
Order Approving Step Adjustment and Other Increases to Unitil Energy Systems, Inc.
Distribution Rate Base
O R D E R N O. 25,502
April 29, 2013
APPEARANCES: Gary Epler, Esq. on behalf of Unitil Energy Systems, Inc.; the Office of Consumer Advocate by Susan W. Chamberlain, Esq. on behalf of residential ratepayers and Suzanne G. Amidon, Esq. on behalf of Commission Staff.
| I. | PROCEDURAL HISTORY |
On February 28, 2013, Unitil Energy Systems, Inc. (UES or Company) filed proposed tariff pages in relation to an increase in distribution rates consistent with a step adjustment provided for in a Settlement Agreement approved by the Commission in Order No. 25,214 (April 26, 2011) in Docket No. DE 10-055, UES’s most recent distribution rate case. With the proposed tariff, UES filed an explanation of the request along with 2012 Reliability Enhancement Program (REP) and Vegetation Management Program (VMP) annual reports with related attachments. UES also included with its filing separate system reliability analyses and recommendations for the Capital and Seacoast regions in UES’s service territory.
In addition to the above, UES’s filing included a request to make permanent the one-year storm hardening pilot program that was approved by the Commission in Order No. 25,355 (April 30, 2012). In the instant filing, UES assumed that the one-time amount of $535,000 approved by Order No. 25,355 would remain in base rates. UES proposed to increase the funding from the
| DE 13-065 | - 2 - |
pilot by adding $888,000 to the permanent storm hardening program bringing the total annual cost to $1,423,000. Finally, UES proposed to increase the annual revenue for its Major Storm Cost Reserve (MSCR) from $400,000 to $800,000.
According to the filing, for a residential default service customer using 600 kilowatt hours (kWh) per month, the total rate impact associated with the step adjustment, the storm hardening program and the MSCR would be a bill increase of $2.07 per month or an increase of 2.4%. The portion of the total monthly bill impact associated with the additional funding for the storm hardening program and the MSCR would be an increase of $0.94 or 1.1%
On March 26, 2013, the Commission issued order No. 25,477 suspending the tariffs and scheduling a hearing for April 15, 2013. The Office of Consumer Advocate (OCA) filed a letter on April 3, 2013 indicating that it would participate in the docket pursuant to RSA 363:28. On April 17, 2013, UES filed a letter modifying its request with respect to the storm hardening program.
| II. | POSITIONS OF THE PARTIES AND STAFF |
A. Unitil Energy Systems, Inc.
As stated in UES’s filing, the tariff pages are intended to implement a provision in the Settlement Agreement that provides for a step adjustment to its distribution rates effective May 1, 2013. Section 7 of the Settlement Agreement also required UES to file an annual report showing actual REP and VMP activities and costs for the previously calendar year and its planned activities and costs for the current calendar year. Actual and planned REP and VMP costs are to be reconciled with the revenue requirements associated with the actual planned capital additions and expenses.
| DE 13-065 | - 3 - |
Consistent with the Settlement Agreement, UES’s proposed May 1, 2013 step adjustment consists of a number of components. The step adjustment reflects (1) 75% of actual changes to non-REP net plant in service between December 31, 2011 and December 31, 2012; (2) adjustments for the REP and VMP programs; and (3) an adjustment for the VMP reconciliation. According to the terms of the Settlement Agreement, the recoupment of temporary rates and rate case expense recovery, components of the step adjustment in prior years, ended as of April 30, 2012.
At the time of the Settlement Agreement, the Company forecasted the change in non-REP net plant in service to be $9,016,336 for 2012, but the actual amount spent was $7,834,633. Pursuant to the Settlement Agreement, the revenue requirement associated with those plant additions to be reflected in the 2013 step adjustment is based on 75% of the actual change in non-REP net plant in service during 2012, or $5,875,974. UES calculated the resulting revenue requirement associated with $5,875,974 to be $1,334,460 and the Company included that amount in its step adjustment computations. UES said that the difference between forecasted and actual change in non-REP net plant in service primarily resulted from the difference in the long-term capital spending forecast model that was used in the development of the Settlement Agreement and the final approved capital budget for 2012 which is prepared with more detail and specificity using current information and data at the start of each budget year.
Also pursuant to the Settlement Agreement, the 2013 step adjustment includes a revenue requirement of $384,854 associated with $1,985,913 of REP net plant in service additions that occurred in 2012, a VMP reconciliation over-collection of $163,962, the additional $888,000 proposed for the storm hardening program, and the additional $400,000 annual increment to the MSCR. The total revenue requirement for all components of the proposed May 1, 2013 step adjustment was $2,843,351.
| DE 13-065 | - 4 - |
The Company reported that its actual REP capital expenditures in 2012 were $1,994,219, or $244,219 greater than the approved of $1,750,000 in REP spending. UES indicated that the spending over the approved amount was primarily related to $215,511 spent for projects that were originally budgeted in 2011, but were completed in 2012 due to delays in materials deliveries. In addition, UES spent $39,875 on a project not originally budgeted for 2012 that was implemented to install cut-outs and fuses.
In its 2012 REP/VMP annual report, UES included a summary of the results of the storm hardening pilot program. UES reported that the project was successful and that the pilot work helped prevent tree-related failures and subsequent electric incidents. UES testified that with the instant filing, it was requesting to make the project permanent for a total annual cost of $1,423,000 consisting of the $535,000 already in rate base plus an increment of $888,000. UES submitted additional support for the continuation of the program at hearing (Hearing Exhibit 3) which consisted of the Company’s responses to data requests promulgated by Staff. (See Technical Session Data Request Staff 1-3).
UES stated that the proposed increase in the MSCR was based on the average annual spending of the Company for storm costs which the Company calculated to be $655,763. According to UES, the MSCR balance is a deficit of $719,840 at December 31, 2012. Since then, the Company said that it had paid additional costs for storm events, such as costs related to the February 2013 blizzard. To address the projected deficit balance in the MSCR, the Company proposed to double the annual funding from $400,000 to $800,000 effective May 1, 2013. UES estimated that the increased amount would bring the MSCR to a positive balance and make funds
| DE 13-065 | - 5 - |
available for use in paying costs associated with the damage caused by major storms. UES concluded by requesting that the Commission grant its request for a step adjustment including the non-REP revenue requirements, the annual increment of $400,000 to the MSCR, and the additional $888,000 for a permanent storm-hardening program.
On April 17, 2013, following the hearing, UES modified its request regarding the storm hardening in light of the discussion at hearing and the comments of Staff and the OCA. Instead of requesting a permanent program, the Company asked that the Commission approve an additional one-year period at a cost of $1,423,000. The Company also committed to actively consult with the Staff and the OCA to review the scope of the program and to consider methods to evaluate its success and benefits.
B. Office of Consumer Advocate
The OCA stated that it did not object to the step adjustment allowed by the Settlement Agreement in UES’s most recent distribution rate case but did strongly object to UES’s other requests for increases to the Company’s distribution rate base. The OCA asserted that there was no basis in the record for the proposed additional increases and that UES should wait until the next rate case, scheduled for 2016, for consideration of the proposed increases related to the MSCR and the pilot program extension.
C. Staff
Staff said that it had reviewed the filing and determined that the step adjustment allowed by the Settlement Agreement was appropriately calculated. Staff said that it would conduct a more thorough review the Company’s 2012 reliability reports for the Seacoast and Capital regions and that the review could be part of the system reliability review contemplated by the Settlement Agreement. Staff also stated that the Company had based the requested increase to
| DE 13-065 | - 6 - |
the MSCR on the average annual cost of storms for the period 2007 through the present and said that there appeared to be a reasonable basis for the proposed $400,000 annual revenue increase to the MSCR.
With respect Company’s request to make permanent the storm hardening program, Staff said that the Commission’s Order approving the pilot program had directed UES “to provide a full report of the pilot program, including costs to implement, activities performed and cost/benefit analyses, to allow a full evaluation of the program.” Order No. 25,355 (April 30, 2012) at 5. The Staff said that UES had not notified Staff prior to the filing, of its intention to request that the pilot program be made permanent, that the filing presented insufficient information to allow a full evaluation of the program, and that UES provided data request responses which included UES’s “Storm Resiliency Pilot Program 2012 Cost Benefit Analysis” on the afternoon of Friday, April 12, 2013, thus making it impossible for either Staff or the OCA to review the report.
Staff stated that regardless of the incomplete evaluation of the program, Staff recognized the benefits to the storm hardening program and that the program represented a reasonable and thoughtful measure to improve response to storms by taking preventive measures. Staff recommended that the Company be allowed to continue to the program for another year at the requested funding level of $1,423,000 provided that UES analyzes and documents the results of the program and provides its review to Staff and the OCA with sufficient time for a full investigation prior to the Company requesting any further extension of the pilot.
| III. | COMMISSION ANALYSIS |
We have reviewed the filing and have considered the testimony and positions offered at hearing. We note that Staff agreed with UES’s calculation of the revenue requirement to be
| DE 13-065 | - 7 - |
recovered through distribution rates, and that the Company attested that the allocation to customer classes were calculated in a manner consistent with the Settlement Agreement we approved in Docket DE 10-055. Based on our review, we find that the proposed step increase is consistent with the Settlement Agreement in Docket DE 10-055 and results in just and reasonable rates pursuant to RSA 378:7. Therefore, we approve the step-adjustment to distribution rates effective with service rendered on and after May 1, 2013.
We also approve the Company’s request to increase the annual revenue to the MSCR from $400,000 to $800,000. While this doubles the funding of the MSCR, we appreciate the fact that major storms have occurred on a more frequent basis in recent years and without an increase to the MSCR, UES could be running a significant deficit in the MSCR for a number of years and customers would have to pay the carrying costs associated with the deficit. We find it just and reasonable to adequately fund the MSCR.
Regarding the proposal to extend the storm hardening program, we note that UES in its April 17, 2013 filing agreed with Staff’s recommendation that the program continue for one additional year at the funding level of $1,423,000, and that the Company further agreed to work closely with Staff and the OCA in reviewing and assessing the costs and benefits of the pilot. We concur with Staff that some measure of benefits has resulted from the storm hardening pilot and, therefore, we approve the continuation of the storm hardening pilot program for a period of one year at the funding level of $1,423,000. We direct the Company to closely consult with Staff and the OCA, including meeting with the Staff and OCA as needed, during the course of UES’s analysis and review of the pilot program.
| DE 13-065 | - 8 - |
UES estimated that, as a result of all the adjustments it requested in this filing, a residential customer taking default service using 600 kWh per month will experience a monthly bill increase of $2.07 per month or 2.4%. According to UES, the additional funding for the storm hardening pilot and the increase to the annual revenue for the MSCR accounts for $0.94, or 1.1%, of the monthly increase for a residential customer using 600 kWh per month. Based on the foregoing analysis, we find that the amount of the increase to the MSCR and the storm hardening program is reasonable pursuant to RSA 378:7 and approve the adjustment to distribution rates related to these increases to be effective with service rendered on and after May 1, 2013.
Based upon the foregoing, it is hereby
ORDERED, that Unitil Energy Systems, Inc.’s request to increase its distribution rates to recover a total additional revenue requirement of $2,843,351 pursuant to the Settlement Agreement approved in Docket DE 10-055 and related to the Company’s request to increase funding to the MSCR and to continue the storm-hardening pilot program with increased funding for one year, is hereby GRANTED; and it is
FURTHER ORDERED, that UES shall consult with Staff and the OCA during the course of UES’s review and analysis of the storm hardening pilot program and shall prepare a full report of the pilot, including costs to implement, activities performed and cost/benefit analysis, to be filed no later than January 17, 2014 with the OCA and Staff; and it is
FURTHER ORDERED, that UES shall file a compliance tariff with the Commission in accordance with N.H. Code Admin. Rules Puc 1603 no later than 30 days from the date of this Order.
| DE 13-065 | - 9 - |
By order of the Public Utilities Commission of New Hampshire this twenty-ninth day of April, 2013.
| /s/ Amy L. Ignatius |
/s/ Michael D. Harrington |
/s/ Robert R. Scott | ||||||
| Amy L. Ignatius | Michael D. Harrington | Robert R. Scott | ||||||
| Chairman | Commissioner | Commissioner | ||||||
| Attested by: | ||||||||
| /s/ Debra A. Howland |
||||||||
| Debra A. Howland | ||||||||
| Executive Director | ||||||||
Exhibit 99.2
STATE OF NEW HAMPSHIRE
PUBLIC UTILITIES COMMISSION
DE 13-084
UNITIL ENERGY SYSTEMS, INC.
Petition to Increase Storm Recovery Adjustment Factor
Order Approving Increase to Storm Recovery Adjustment Factor
O R D E R N O. 25,498
April 25, 2013
APPEARANCES: Gray Epler, Esq. on behalf of Unitil Energy Systems, Inc.; the Office of Consumer Advocate by Susan W. Chamberlin, Esq. on behalf of residential ratepayers; and Suzanne G. Amidon, Esq. on behalf of Commission Staff.
| I. | PROCEDURAL HISTORY |
On March 15, 2013, Unitil Energy Systems, Inc. (UES or Company) filed a petition to increase its storm recovery adjustment factor (SRAF) effective May 1, 2013. UES said that the increase was necessary to recover the costs of restoring power and repairing damage to its electrical system resulting from the October 2012 storm known as Tropical Storm Sandy. In support of its petition, UES filed testimony with related exhibits and an illustrative tariff. In its petition, UES requested that the SRAF be increased from its current level of $0.00178 per kilowatt hour (kWh) by $0.00053 per kWh, resulting in a total SRAF of $0.002321 per kWh. According to UES, a residential default service customer using 600 kWh per month would experience a monthly bill increase of $0.32, or 0.4 percent. In its filing, UES proposed to recover the costs associated with Tropical Storm Sandy over a period of four years.
| DE 13-084 | - 2 - |
The petition stated that the Commission approved a settlement agreement in UES’s most recent distribution rate case which created two cost recovery mechanisms for major storm damage to UES’s electrical system.1 First, the settlement agreement established a Storm Reserve to allow for the recovery of costs associated with qualifying major storms through UES’s base rates. Second, the settlement agreement established the SRAF charge to allow UES to recover the costs of infrequent storms of extraordinary magnitude. The settlement agreement set the initial SRAF at $0.00096 per kWh to allow recovery of the costs associated with the December 2008 ice storm and the March 2010 wind storm. The settlement agreement also specifically allowed UES to petition the Commission to change the SRAF should any significant under- or over-recoveries occur. In support of its request, UES testified that adding the costs of Tropical Storm Sandy to the Storm Reserve would place the Storm Reserve in significant deficit for an extended period of time, and that Tropical Storm Sandy qualified for recovery through the SRAF.
The Office of Consumer Advocate (OCA) filed a letter indicating its participation in the docket pursuant to RSA 363:28 on April 4, 2013. On April 8, 2013, the Commission issued Order No. 25,489 suspending the proposed tariff and scheduling a hearing for April 15, 2013. At hearing, UES filed updated schedules supporting the recovery of the costs associated with Tropical Storm Sandy through the SRAF over a five-year period (Hearing Exhibit 2). On April 16, 2013, UES filed a response to a hearing record request (Hearing Exhibit 3).
| II. | POSITIONS OF THE PARTIES AND STAFF |
A. Unitil Energy Systems, Inc.
UES testified that the existing Storm Reserve established in Docket No. DE 10-055 is funded at $400,000 annually and that the amount was set to deal with more frequent storms typically experienced in a single year. The settlement agreement in Docket DE 10-055 also created the SRAF to allow the recovery of costs associated with infrequent storms of extraordinary magnitude. In its petition, UES estimated that the costs associated with Tropical Storm Sandy to be recovered through the SRAF to be $2,310,089.
| 1 | See Order No. 25,214 (April 26, 2011) in Docket No. DE 10-055. |
| DE 13-084 | - 3 - |
UES stated that in the wake of Tropical Storm Sandy, more than 8.5 million homes and businesses across 24 states lost power. According to the Company, the tropical storm event in New Hampshire included heavy rain and wind gusts up to 55 miles per hour, especially along the seacoast, resulting in limb, tree and wire damage. UES testified that, during the storm, peak interruptions reached 31,000 in UES’s New Hampshire service area (42% of UES’s electric customers) with cumulative customers affected reaching over 61,000 through the storm event.
UES also provided with its filing a copy of the “Super Storm Sandy After Action Report” which provides information about the storm, the resulting damage and customer impacts, and the Company’s planning, restoration and communication strategy. In connection with its request to recover the costs associated with Tropical Storm Sandy through the SRAF, UES requested that the Commission find that the tropical storm was an infrequent storm of extraordinary magnitude and that the costs to repair the resulting damage to UES’s electric system qualify for recovery through the SRAF. UES explained that the Storm Reserve is intended to fund severe weather events causing 16 concurrent troubles and 15% of customers interrupted, or 22 concurrent troubles in either the Capital or Seacoast regions of UES. Tropical Storm Sandy resulted in approximately 82 concurrent troubles interrupting 48% of customers in the Capital region and 130 concurrent troubles interrupting 44% of customers in the Seacoast region. UES pointed out that these numbers are significantly greater than the thresholds established under the Commission’s definition of major storm to be funded through the Storm Reserve and support a finding that the Tropical Storm Sandy was an infrequent storm of such magnitude to qualify associated costs to be recovered through the SRAF.
| DE 13-084 | - 4 - |
UES testified that the total costs incurred for emergency storm restoration expenditures attributable to Tropical Storm Sandy are $2,659,587, with $349,498 capitalized to utility plant assets, and $2,310,089 recorded as deferred storm costs. The Company described the specific cost categories of emergency storm restoration expenditures as (1) contractor and related services, (2) incremental payroll and expenses, (3) materials and supplies and (4) transportation. UES said that the amounts for contractor and related services totaled $2,340,450, and that those costs principally represent amounts expended by UES to acquire and compensate local and non-local utility line crews, tree crews and damage assessment, and wires down personnel to complete the restoration. UES stated that when regional storm events like Tropical Storm Sandy occur, the competition among electric distribution utilities for tree and line crews requires the utilities to procure commitments from available line crews prior to the storm event or risk an extended outage. The result, according to UES, is that electric utilities are required to pay for the initial commitment (pre-staging) costs as well as the costs for work to repair electric facilities, and although some efforts have been made to coordinate crew availability, there is no ready solution to the crew availability problem.
In its petition, UES requested an incremental increase in the SRAF of $0.00053 per kWh to recover the costs associated with Tropical Storm Sandy over a period of four years. UES said that it proposed a four-year recovery period to coincide with the ending date for recovery of Tropical Storm Irene and the October 2011 snowstorm. Recovery of these two storms through the SRAF began on May 1, 2012 and are being recovered over a five-year period through April 2017 as approved by the Commission in Order No. 25,351 (April 24, 2012) in Docket DE 11-277.2 UES estimated that the rate impact associated with a four-year recovery period would be
| 2 | Order No. 25,351 increased the SRAF from $0.00096 per kWh to $0.00178 per kWh to include the recovery of costs associated with Tropical Storm Irene and the October 2011 snowstorm. |
| DE 13-084 | - 5 - |
an increase to the SRAF of $0.00053 per kWh, or an increase of 0.4% in monthly bills to residential customers. At hearing, UES introduced an exhibit (Hearing Exhibit 2) which presented the calculation of the increase to the SRAF if the costs associated with Tropical Storm Sandy were recovered over a five-year period. The resulting increase to the SRAF, assuming a five-year recovery period, would be an increase of $0.00043 per kWh to the SRAF, or an increase of 0.3% in monthly bills to residential customers. UES modified its request by asking that the Commission approve its petition but allow recovery of costs over a five-year period instead of the four-year recovery period proposed in the initial petition.
B. Office of Consumer Advocate
The OCA said it did not object to UES’s petition to recover costs associated with Tropical Storm Sandy provided that the expenses were subject to audit. The OCA also expressed concern about the about the availability of crews to assist in restoring power and said that the issue needs to be studied.
C. Staff
Staff stated that it had reviewed the petition and recognized that UES had incurred approximately $2.3 million in restoring power and repairing damage to its electrical system caused by Tropical Storm Sandy. Staff supported UES’s request to begin recovery of the costs, subject to any adjustments that may arise as a result of Staff’s audit of UES’s expenses related to the storm. Staff also recommended that the Company recover those costs over five years, which is the same recovery period approved by the Commission for recovery of costs associated with Tropical Storm Irene and the October 2011 snow storm.
| DE 13-084 | - 6 - |
| III. | COMMISSION ANALYSIS |
We have reviewed UES’s filing and the evidence submitted at hearing regarding UES’s request to increase the SRAF to recover costs associated with Tropical Storm Sandy. We have also considered the overall rate impacts which result in an average increase of 0.3% for residential customers. Taking into account UES’s testimony describing the damage caused by Tropical Storm Sandy, we find that the storm qualified as a low frequency storm of extraordinary magnitude and that the SRAF is the appropriate mechanism for the Company to use to recover the costs associated with the storm. Based on the foregoing, we will allow UES to begin recovery of the costs associated with preparation and restoration activities related to Tropical Storm Sandy effective May 1, 2013.
The Company used estimated costs incurred as result of Tropical Storm Sandy to calculate an increase of $0.00043 per kWh to the current SRAF of $0.00178 per kWh for a total SRAF rate of $0.00221 to take effect May 1, 2013. While we recognize that approval of the filing results in rate increases, we find that the proposed SRAF rate is just and reasonable and in the public interest. We find that recovery for costs associated with Tropical Storm Sandy, if made over a five-year period, is just and reasonable and that the amounts subject to recovery should be reconciled based on the results of Staff’s audit. We also approve the Company’s request to use its long-term cost of debt, net of deferred taxes, or 4.52% as the carrying charge to be applied to the uncollected balance through the recovery period. Finally, UES is required to continue to file annual reports on the Storm Reserve and storm recovery updates for those storms where costs are recovered through the SRAF.
| DE 13-084 | - 7 - |
Based upon the foregoing, it is hereby
ORDERED, that the petition of Unitil Energy Systems, Inc., as modified, to increase the Storm Adjustment Recovery Factor by $0.00043 per kWh for a total SRAF rate of $0.00221 per kWh effective May 1, 2013 is hereby APPROVED; and it is
FURTHER ORDERED, that UES shall file tariffs conforming to this Order within 30 days of the date hereof pursuant to Puc 1603.05.
By order of the Public Utilities Commission of New Hampshire this twenty-fifth day of April, 2013.
| /s/ Michael D. Harrington |
/s/ Robert R. Scott | |||
| Michael D. Harrington | Robert R. Scott | |||
| Commissioner | Commissioner | |||
| Attested by: | ||||
| /s/ Debra A. Howland |
||||
| Debra A. Howland | ||||
| Executive Director | ||||