**Exhibit 99(ap)**

 
| STATE OF MAINE                                |   | Docket No. 2003-85       |
|-----------------------------------------------|--------|--------------------------|
| PUBLIC UTILITIES COMMISSION                   |   |                     |
|                                          |   | October 29, 2003    |
|                                          |   |                     |
| MAINE PUBLIC SERVICE COMPANY                  |   | ORDER APPROVING          |
| Request for Approval of Alternative Rate Plan |   | SUPPLEMENTAL STIPULATION |

 

 

WELCH, Chairman; DIAMOND and REISHUS,Commissioners

 

# **I.**                                         SUMMARY

# ** **

On September 3, 2003, we issued our Part One Order in theabove-referenced docket which approved a Stipulation entered into between MainePublic Service Company (MPS or Company), the Office of the Public Advocate(OPA), McCain Foods, Inc. (McCain), and J.M. Huber, Inc. (Huber) and thusauthorized MPS to increase its rates by an amount sufficient to produce anincrease in distribution revenues of not more than $940,000.(1)  In this Order we approve a SupplementalStipulation entered into between these parties and thus, lower the authorizeddistribution revenue increase from $940,000 to $685,037.

 

# **II.**                                     BACKGROUND

# ** **

On March 6, 2003, MPS filed an Alternative Rate Plan (ARP)proposal requesting a $1.267 million increase in distribution revenues as a“starting point” for its proposed seven-year ARP.  In order to ensure that MPS’s rates were just and reasonable atthe start of any ARP which might be approved in this case, the Hearing Examiner,in a Procedural Order dated April 2, 2003, ordered the Company to submit a“Chapter 120” cost of service filing by April 10, 2003.  On April 11, 2003, the Companysubmitted its Chapter 120 filing based on a 2002 test year, adjusted for knownand measurable changes.  In its filing,the Company alleged that it was entitled to a rate increase of $1.713 millionunder traditional cost of service principles. However, the Company stated that it would not change its initial requestfor a $1.267 million increase.

 

On September 2, 2003, MPS, the OPA, McCain and Huber submitted aStipulation which proposed to resolve all revenue requirement issues in thismatter and also authorized the Company to enter into a “Hedge Program” whichwould serve to fix the Company’s long-term debt rate which is currently variable.  Under the terms of the Stipulation, MPS wasauthorized to increase its rates on file with the Commission by an amountsufficient to produce an increase in its distribution revenues of not more than$940,000, of which $306,827 was associated with the cost of the Hedge Program,for a

 

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(1)  The Commission issued itsPart Two Order, containing the Commission’s findings and reasons in support ofthe Commission’s decision, on September 25, 2003.

 

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total distribution revenue requirement of $16,068,714.  These amounts were subject to adjustmentwhen the cost of the Hedge Program was established.  The rates to implement the agreed upon increase, were to takeeffect for service rendered on or after September 15, 2003 but no laterthan October 1, 2003.

 

On September 11, 2003, MPS made a compliance filing consisting ofdraft rate sheets and associated exhibits pursuant to the requirements of theCommission’s September 3 Order.  Inthe course of the parties’ review of this filing, it was discovered that an errorhad occurred in the development of the transmission component of MPS’s retailrates (“TCRR”).  The error lead to anincorrect allocation of the total Company pro-forma test year revenue betweenthe TCRR and the distribution component of MPS’s retail rates (“DCRR”).  Specifically, the error caused the TCRRrevenue to be higher, and the DCRR revenue to be correspondingly lower, thanwould have been the case had the error not occurred.

 

The Hearing Examiner issued a Procedural Order on September 26,2003 identifying this issue and scheduling a Technical Conference forSeptember 30, 2003 to address how this problem should be resolved.  On October 2, 2003, MPS filed itsresponses to six Oral Data Requests made at the September 30 technicalconference.  Thereafter, the parties andthe Advisory Staff held several discussions regarding the issues raised in theExaminer’s September 26 Procedural Order.

 

On October 17, 2003, MPS, the OPA, McCain and Huber submitted aSupplemental Stipulation which proposes to resolve the TCRR and test yearrevenue allocation error issues.  Underthe terms of the Supplemental Stipulation, the authorized DCRR increase wouldbe reduced from $940,000 to no more than $685,037.  The parties to the Supplemental Stipulation propose that MPS mayfile rates to implement this increase for service rendered on and afterNovember 1, 2003.  In addition, theparties agreed that, following the implementation of new rates in this docket,MPS shall determine the additional revenue it received as a result of the TCRRerror and submit its calculations to the Staff and the parties for review.  The parties shall strive to agree byDecember 31, 2003 on a calculation of the additional revenues collected asa result of the TCRR error during the period October 1, 2002 through thedate the new rates become effective in this docket (the “Extra Revenues”), andthe proper flow-through of the Extra Revenues (i.e., a methodology forreturning or refunding the Extra Revenues to customers).

 

 

# **III.**                                 DECISION

# ** **

We have reviewed the Supplemental Stipulation and find that it providesa reasonable resolution to correct the error in the calculation of test yearrevenues contained in the original Stipulation.  In addition, we find that the Supplemental Stipulation satisfiesall other criteria for approving a stipulation.   See our Order Approving Stipulation (Part Two) at 5,September 25, 2003.

 

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Accordingly, it is

 

O R D E R E D

 

1.                                       Thatthe Supplemental Stipulation filed with the Commission on October 17, 2003is hereby approved and is incorporated by reference herein.  A copy of the Supplemental Stipulation isattached to this Order and marked Appendix A; and,

 

2.                                       TheDirector of the Commission’s Technical Analysis Division is delegated theauthority to approve new rates for Maine Public Service Company filed incompliance with this Order.

 

Dated at Augusta, Maine, this 29thday of October, 2003.

 

BY ORDER OF THE COMMISSION

 

 
|                      |    |   |
|---------------------------|---------|--------|
| Dennis L. Keschl          |
| Administrative Director   |
|                      |
|                      |
| COMMISSIONERS VOTING FOR: | Welch   |
|                      | Diamond |
|                      | Nugent  |
|                           |         |        |  |

 

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NOTICE OF RIGHTS TO REVIEW ORAPPEAL

 

5 M.R.S.A. § 9061 requires thePublic Utilities Commission to give each party to an adjudicatory proceedingwritten notice of the party’s rights to review or appeal of its decision madeat the conclusion of the adjudicatory proceeding.  The methods of review or appeal of PUC decisions at theconclusion of an adjudicatory proceeding are as follows:

 

1.                                       Reconsideration of the Commission’s Order may be requestedunder Section 1004 of the Commission’s Rules of Practice and Procedure(65-407 C.M.R.110) within 20 days of the date of the Order by filing apetition with the Commission stating the grounds upon which reconsideration issought.

 

2.                                       Appeal of a final decision of the Commission may be taken to the LawCourt by filing, within 30 days of the date of the Order, a Notice ofAppeal with the Administrative Director of the Commission, pursuant to35-A M.R.S.A. § 1320(1)-(4) and the Maine Rules of Civil Procedure,Rule 73, et seq.

 

3.                                       Additional court review of constitutional issues or issuesinvolving the justness or reasonableness of rates may be had by the filing ofan appeal with the Law Court, pursuant to 35-A M.R.S.A. § 1320(5).

 

Note:                   The attachment of this Notice to a documentdoes not indicate the Commission’s view that the particular document may besubject to review or appeal.  Similarly,the failure of the Commission to attach a copy of this Notice to a documentdoes not indicate the Commission’s view that the document is not subject toreview or appeal.

 

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