Case Background
On April 4,
2023, Peoples Gas System, Inc. (PGS or Company) filed a petition seeking the
Commission’s approval of a rate increase and associated depreciation rates. PGS
is a natural gas distribution company providing sales and transportation of
natural gas, and is a public utility subject to this Commission’s regulatory
jurisdiction under Chapter 366, Florida Statutes (F.S.). PGS is a wholly owned
subsidiary of TECO Gas Operations, Inc. and provides service to approximately
470,000 customers in 39 of Florida’s 67 counties.
An
administrative hearing was held September 12-15, 2023. At the hearing, the
Commission approved Type 1 stipulations for the following issues: 16, 17, 18,
20, 25, 30, 39, 44, 46, and 56. The Commission also approved Type 2
stipulations for the following issues: 2, 3, 5, 8, 11, 12, 14, 24, 26, 37, 40,
45, 48, 58, 59, 62, 64, 65, 66, 67, and 68. At the November 9, 2023 Special Agenda
Conference, the Commission approved an incremental increase in operating
revenues of $106,682,569. The total Company target revenues,
including other operating revenues, is $458,180,488. The staff-calculated final revenue
requirement calculation that reflect the Commission-approved increase to
operating revenues is contained in Attachment A to the recommendation.
At
the hearing, the Commission approved the stipulations regarding the Company’s
cost of service study in Issue 58 and the revenue increase allocation to the
rate classes in Issue 59. This recommendation addresses the issues that were
not addressed at the November 9, 2023 Special Agenda Conference: Issue 60
(customer charges), Issue 61 (distribution charges), Issue 69 (approval of
tariffs), Issue 70 (effective date), and Issue 75 (close docket).
On
November 14, 2023, the Company filed a revised cost of service study and
associated tariffs reflecting the final Commission-approved revenue
requirement. The proposed customer and per therm
distribution charges are calculated in the revised cost of service study and
shown in the attached tariffs. The tariffs are included in Attachment B to the
recommendation. The Commission has jurisdiction over this matter pursuant to
Chapter 366, F.S., including Sections 366.06 and 366.071, F.S.
Discussion
of Issues
Issue 60:
What customer charges should be approved?
Recommendation:
The proposed customer charges as provided in the
tariffs in Attachment B to the recommendation should be approved. (P. Kelley,
Hampson, Norris)
Position of the Parties
PGS:
This is a fallout issue based on the revenue
requirement approved by the Commission and its decisions on issues that impact
the inputs to the company’s stipulated cost of service methodology.
OPC:
OPC did not address this issue in its post-hearing
brief.
FIPUG:
FIPUG did not address this issue in its post-hearing
brief.
Staff Analysis:
PARTIES’
ARGUMENTS
PGS
PGS did not provide an argument. (PGS BR 41)
OPC
OPC did not address this issue in its post-hearing brief.
FIPUG
FIPUG did not address this issue in its post-hearing
brief.
ANALYSIS
The customer charges, in combination with the per therm
distribution charges shown in Issue 61, are designed to allow the Company to
recover the total Commission-approved revenue requirement. Further, the
Commission approved the Company’s proposed cost of service methodology in Issue
58 and the allocation of the revenue increase to rate classes in Issue 59 at
the November 9, 2023 Special Agenda Conference. The proposed customer charges reflect
the approved revenue requirements and cost of service methodology; therefore,
the proposed charges provided in the tariffs in Attachment B to the
recommendation should be approved.
Issue 61:
What per therm distribution charges should be
approved?
Recommendation:
The proposed per therm distribution charges as
provided in the tariffs in Attachment B to the recommendation should be
approved. (P. Kelley, Hampson, Norris)
Position of the Parties
PGS:
This is a fallout issue based on the revenue
requirement approved by the Commission and its decisions on issues that impact
the inputs to the company’s stipulated cost of service methodology.
OPC:
OPC did not address this issue in its post-hearing
brief.
FIPUG:
FIPUG did not address this issue in its post-hearing
brief.
Staff Analysis:
PARTIES’
ARGUMENTS
PGS
PGS did not provide an argument. (PGS BR 42)
OPC
OPC did not address this issue in its post-hearing brief.
FIPUG
FIPUG did not address this issue in its post-hearing
brief.
ANALYSIS
Staff has reviewed the Company’s revised cost of service
filing and it reflects the Commission-approved total Company revenue
requirement. Further, the Commission approved the Company’s proposed cost of
service methodology in Issue 58 and the allocation of the revenue increase to
rate classes in Issue 59 at the November 9, 2023 Special Agenda Conference. The
proposed customer charges reflect the approved revenue requirements and cost of
service methodology; therefore, the proposed per therm charges provided in the
tariffs in Attachment B to the recommendation should be approved.
Issue 69:
Should the Commission approve PGS’s proposed tariffs
reflecting the Commission-approved target revenues?
Recommendation:
Yes, the Commission should approve PGS’s proposed
tariffs reflecting the Commission-approved target revenues, as provided in
Attachment B to the recommendation. (P. Kelley, Hampson, Norris)
Position of the Parties
PGS:
Yes. Once the Commission approves the company’s
customer and per therm charges, the company should submit updated tariff sheets
reflecting the new rates and charges, including those approved by stipulation,
and the Staff of the Commission should be given administrative authority to
approve the update tariff pages.
OPC:
OPC did not address this issue in its post-hearing
brief.
FIPUG:
FIPUG did not address this issue in its post-hearing
brief.
Staff Analysis:
PARTIES’
ARGUMENTS
PGS
PGS did not provide an argument. (PGS BR 42)
OPC
OPC did not address this issue in its post-hearing brief.
FIPUG
FIPUG did not address this issue in its post-hearing
brief.
ANALYSIS
Staff has reviewed the revised cost of service study and
associated tariffs, which were revised to reflect the final Commission-approved
revenue requirement.
Reviewing the documentation provided by PGS, staff believes that the revised
cost of service study and associated tariffs are in accordance with the Commission
vote from the November 9, 2023 Special Agenda Conference. The Commission should
approve the proposed tariffs as provided in Attachment B to the recommendation.
Issue 70:
What is the effective date for PGS's revised rates
and charges?
Recommendation:
The rates and charges approved by the Commission
should become effective the first billing cycle in January 2024. (P. Kelley,
Hampson, Norris)
Position of the Parties
PGS:
The revised base rates and charges approved in this
case should be effective with the first billing cycle in January 2024
OPC:
OPC did not address this issue in its post-hearing
brief.
FIPUG:
FIPUG did not address this issue in its post-hearing
brief.
Staff Analysis:
PARTIES’
ARGUMENTS
PGS
The appropriate effective date for Peoples’ revised rates
and charges should be the first billing cycle in January 2024. (PGS BR 42)
OPC
OPC did not address this issue in its post-hearing brief.
FIPUG
FIPUG did not address this issue in its post-hearing
brief.
ANALYSIS
PGS provided a notification of the proposed rate increase
to its customers during the month of June 2023, and also posted notice of the
rate increase on its website. The notification included a comparison between
current and proposed rates, and that the rates ultimately approved by the
Commission will not exceed those identified in the notice. PGS will also
provide a direct notice to customers during January 2024, which will identify
the final, Commission-approved rates and charges.
Staff has reviewed the direct notice and believes the
notice reflects the rates and charges approved by the Commission. Staff
recommends that the rates and charges approved by the Commission should become
effective the first billing cycle in January 2024.
Issue 75:
Should this docket be closed?
Recommendation:
After the final order is issued, this docket should
be closed. (Thompson, Sandy)
