In re Investigation into Petiton of Vermont Gas Systems, Inc. (AARP, Appellant)

April 21, 2018 by Justia

From 2006 to 2016, Vermont Gas Systems, Inc. (VGS) operated under an “alternative regulation” plan (ARP). Pursuant to the ARP, VGS’s rates were automatically adjusted every quarter based on changes in gas costs. In 2011, VGS proposed amending its ARP by establishing the System Expansion and Reliability Fund (SERF) as a means of facilitating the expansion of its service into Addison County, Vermont, and perhaps beyond, while maintaining a smooth rate trajectory. At the time of the proposal, VGS would have been required under the ARP’s automatic rate adjustments to reduce customer rates for the spring 2011 quarter by approximately $4.4 million, which would have been the ninth rate reduction in the previous ten quarters. Instead of reducing rates for existing customers pursuant to the provisions of the ARP, VGS proposed depositing that amount annually into SERF to smooth out rate increases resulting from future expansion of services. Under the proposal, VGS’s rates would remain the same rather than be reduced by an automatic adjustment. In this ratemaking proceeding, AARP appealed an order of the Vermont Public Utility Commission that incorporated a memorandum of understanding (MOU) reached by the Department of Public Service and VGS. Among other things, the incorporated MOU set VGS’s firm non-gas rates for the tax year beginning October 1, 2016; allowed VGS to use a specified amount from a fund previously authorized by the Commission to mitigate the rate effects of any system expansion; and established both the penalty for VGS’s imprudent costs associated with the Addison Natural Gas Project (ANGP) and its return on equity. The Vermont Supreme Court reversed and remanded the matter for the Commission to make further findings regarding VGS’s ANGP-related imprudent costs and, if necessary, to reconsider the penalty imposed for those costs under the incorporated MOU. View "In re Investigation into Petiton of Vermont Gas Systems, Inc. (AARP, Appellant)" on Justia Law