EXHIBIT 10.24
STATE OF CONNECTICUT
DEPARTMENT OF PUBLIC UTILITY CONTROL
TEN FRANKLIN SQUARE
NEW BRITAIN, CT 06051
DOCKET NO. 92-02-19 APPLICATION OF THE YANKEE GAS SERVICES
COMPANY FOR AN INCREASE IN RATES - REOPEN 11
October 1, 1997
By the following Commissioners:
John W. Betkoski, III
Jack R. Goldberg
Glenn Arthur
DECISION
1. INTRODUCTION
By letter dated September 2, 1997, Yankee Gas Services
Company (Company) and the Office of Consumer Counsel (OCC)
jointly filed a proposal in response to the Department of Public
Utility Control's (Department) Order No. 1 in the Decision dated
July 9, 1997, in Docket No. 96-08-05, DPUC Financial and
Operational Review of Yankee Gas Services Company. Order No. 1
stated that ". . . the Company shall, if it chooses, submit for
the Department's consideration a proposal indicating to which
items the total over-earning dollars [$3,191,000] should be
allocated." The Company and the OCC met to discuss the Company's
response to Order No. 1. As a result of those meetings, the
Company and OCC requested that the Department reopen Docket No.
92-02-19, Application of Yankee Gas Services Company for an
Increase in Rates Reopen II, and approve an amendment to the
settlement accepted by the Department in the Decision in that
docket dated January 3, 1996 (Settlement).
By letter dated September 15, 1997, the Department
advised the Company and OCC that it has certain concerns
regarding the proposal. On September 17, 1997, the Company
requested a Technical meeting to resolve the Department's
concerns and filed supplemental information on September 22,
1997. Pursuant to a Notice of Technical Meeting dated September
19, 1997, the Department held a technical meeting to discuss the
Settlement filed in response to Order No. 1.
II. DECISION TO REOPEN
The Department hereby reopens the January 3, 1996
Decision in Docket No. 92-02-19 for the limited purpose of
considering the Company's and OCC's proposal to amend the
Settlement accepted by the Department in that Decision.
111. DEPARTMENT ANALYSIS OF THE COMPANY AND OCC PROPOSAL
The Company and OCC are currently bound by the
Settlement, which is due to expire on September 11, 1998. In
response to Order No. 1 in the Decision dated July 9, 1997, in
Docket No. 96-08-05, the Company and OCC submitted a three point
proposal to amend the Settlement. Except as provided below, all
terms and conditions of the Settlement would remain unchanged.
In summary, the Company and OCC propose to:
1. Extend the Settlement term. The Settlement would be
extended two years and expire on September 30, 2000.
2. Defer allowable 1997 Deferred Gas Costs. Past
under-recovery of gas costs allowable for recovery during the
current year (1997 Deferred Gas Costs) would be added to existing
deferred assets defined in the Stipulation and Agreement. 1997
Deferred Gas Costs of approximately $6 million would be funded by
capacity release credits and excess interruptible margin rather
than billing firm sales customers directly through the Purchased
Gas Adjustment (PGA).
3. Refund $3,190,000 to customers through the PGA. The
$3,190,000 of fiscal year 1998 over-earnings identified by the
Department in the Decision in Docket No. 96-08-05 would be
credited to firm sales customers through the PGA over the period
November 1997 through March 1998.
Further, the Company proposes that for purposes of
General Statutes of Connecticut Section 16-19(g), which states
that if a public service company has for six consecutive months
earned a return on equity which exceeds the return authorized by
the Department by at least one percentage point, the Department
shall hold a special public hearing on the need for an interim
rate decrease, the Company's return on equity (ROE) would be set
at 11.15% for the term of the Settlement, unless the Department
authorizes a different ROE.
The Department has reviewed the Settlement proposal and
finds it to be in the public interest. The Department hereby
approves the amended Settlement. While we applaud the Company
and OCC's efforts to reduce rates, the Department is concerned
that there is no mention of funding cast iron replacement, which
was discussed in the July 9, 1997, Decision in Docket No.
96-08-05. Rates and quality of service are equally important
issues. The Department expects the Company to monitor its
infrastructure closely and, if needed, augment funding
unilaterally. The Department suggests that the conservation
collaborative group consider allocating unspent funding to
address distribution plant quality.
DPUC ELECTRONIC LIBRARY LOCATION K:\FINL-DECTILED UNDER UTILITY
TYPE, DOCKET NO., DATE
DOCKET NO. 92-02-19 APPLICATION OF THE YANKEE GAS SERVICES
COMPANY FOR AN INCREASE IN RATES - REOPEN 11
This Decision is adopted by the following Commissioners:
John W. Betkoski, III
Jack R. Goldberg
Glenn Arthur
CERTIFICATE OF SERVICE
The foregoing is a true and correct copy of the Decision
issued by the Department of Public Utility Control, State of
Connecticut, and was forwarded by Certified Mail to all parties
of record in this proceeding on the date indicated.
OCT 17 1997
Robert J. Murphy
Executive Secretary
Department of Public Utility Control