|
State of Florida
|
Public Service Commission Capital Circle Office Center ● 2540 Shumard
Oak Boulevard -M-E-M-O-R-A-N-D-U-M- |
||
|
DATE: |
|||
|
TO: |
Office of Commission Clerk (Teitzman) |
||
|
FROM: |
Division of Economics (Ward, Hampson) Office of the General Counsel (Sandy) |
||
|
RE: |
|||
|
AGENDA: |
10/01/24 – Regular Agenda – Tariff Suspension – Participation is at the Commission’s Discretion |
||
|
COMMISSIONERS ASSIGNED: |
|||
|
PREHEARING OFFICER: |
Administrative |
||
|
10/29/24 (60-Day Suspension Date) |
|||
|
SPECIAL INSTRUCTIONS: |
|||
On August 30, 2024, Peoples Gas System, Inc. (Peoples or utility) filed a petition for approval of the 2023 true-up, projected 2024 true-up, and 2025 revenue requirements and surcharges associated with its cast iron/bare steel (CI/BS) pipe replacement rider. The rider was originally approved by Order No. PSC-12-0476-TRF-GU (2012 Order) to recover the cost of accelerating the replacement of cast iron and bare steel pipes through a surcharge on customers’ bills.[1] As established by the 2012 Order, Peoples would roll replaced infrastructure into rate base during a rate case, and the CI/BS surcharge would be “reset to zero”.[2] The surcharge is set to terminate when all applicable CI/BS pipes have been replaced and included in rate base. During the 2023 Peoples rate case, CI/BS investments as of December 31, 2023, were moved into rate base pursuant to Order No. PSC-2023-0388-FOF-GU.[3]
In the 2023 rate case order, the Commission approved the Long Term Debt Cost Rate True-Up Mechanism (LTDR true-up mechanism), which allowed Peoples to make a one-time adjustment to its forecasted long-term debt cost rate after its inaugural debt issuance. The LTDR true-up mechanism and the associated incremental base rate revenue increase was approved in Order No. PSC-2024-0170-TRF-GU.[4] As part of the Order, the utility was required to include the actual incremental amount for recovery in the subject docket (2024 CI/BS Rider).
Currently, Peoples has an active petition pending before the Commission for an expansion of the CI/BS rider in Docket No. 20240107-GU. In that docket, Peoples has proposed to rename the CI/BS rider to the Safety of Facilities and Infrastructure Replacement Rider (SAFIR) and expand the categories of eligible replacements under the rider. If the SAFIR program is approved, projected capital expenditures would increase for 2025.
The utility in the instant petition stated that if the Commission approves Peoples’ SAFIR petition before November 30, 2024, the utility will seek approval of the revenue requirement and surcharge for CI/BS replacement, PPP replacement, and SAFIR modifications. If the petition remains pending on November 30, 2024, Peoples will seek approval of the revenue requirement and surcharge for CI/BS and PPP replacement only. Peoples’ current surcharges were approved in Order No. PSC-2023-0363-TRF-GU.[5]
This is staff’s recommendation to suspend the proposed tariffs. The Commission has jurisdiction over this matter pursuant to Sections 366.04, 366.05, and 366.06, Florida Statutes (F.S.).