Source: http://md.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180814_0000854.MD.htm/qx
Timestamp: 2020-02-26 11:39:26
Document Index: 338794605

Matched Legal Cases: ['§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 3', '§ 4']

FindACase™ | Washington Gas Light Co. v. Maryland Public Service Commission
In this appeal, we are asked to interpret Public Utility Article ("PU") § 4-210 of the Maryland Code, known also as the STRIDE statute.[1] In short, the STRIDE statute allows Maryland gas companies more timely cost recovery if they submit plans that increase the pace of natural gas infrastructure improvements.
The General Assembly passed the STRIDE statute (Senate Bill 8) in response to increasing concerns about threats to public safety posed by aging and deteriorating gas infrastructure throughout the state.[2] The Fiscal and Policy Note for Senate Bill 8 highlighted the occurrence of "30 'significant [pipeline] incidents' in Maryland from 2002 through 2011, totaling $12 million in property damage and causing one fatality and 16 injuries." Dep't Leg. Servs., Fiscal and Policy Note, Senate Bill 8, at 6 (2013 Session) (hereinafter cited as "Senate Bill 8 Fiscal Note"). To underscore the importance of providing Maryland residents with a safe and reliable gas distribution infrastructure throughout the State, the legislature codified a rarely used express statement of legislative intent. See PU § 4-210(b).
The Commission is tasked with regulating Maryland public service companies, including Washington Gas, and its duties are summarized in Maryland Off. of People's Counsel v. Md. Pub. Serv. Comm'n:
Unlike most legislation, the STRIDE statute included a statement of legislative intent: "It is the intent of the General Assembly that the purpose of this section is to accelerate gas infrastructure improvements in the State by establishing a mechanism for gas companies to promptly recover reasonable and prudent costs of investments in eligible infrastructure replacement projects separate from base rate proceedings." PU § 4-210(b). If the Commission approves a proposed infrastructure project under the STRIDE statute, a public service company may recover costs through a fixed annual surcharge that is collectible while the approved work is being performed. See PU § 4-210(d)(3).
Washington Gas filed a STRIDE plan with the Commission on November 7, 2013, that was approved by the Commission. PU § 4-210(d). The proposed 2013 STRIDE plan consisted of four distribution system replacement programs, all of which were located within the company's Maryland service territory. Subsequently on March 10, 2015, Washington Gas filed an application for approval of a proposed amendment to add four new transmission system programs. While the majority of the assets included in the amended application were physically located in Maryland, three proposals contained individual projects located outside of Maryland. Specifically, Transmission Program 1 contained two projects replacing pipeline in Virginia, Transmission Program 2 contained four infrastructure replacement projects in Virginia, and Transmission Program 4 contained six replacement projects in Virginia or Washington, D.C.
The Commission was required to approve or deny the amended application within 150 days of the amendment's filing. PU § 4-210(e)(2). The Commission deferred its decision and delegated the matter to a public utility law judge on March 16, 2015. PU § 3-104(d)(1). The Commission staff and the OPC intervened in the proceeding before the public utility law judge, then-Chief Judge Terry J. Romine.
An evidentiary hearing was held on April 29, 2015, and initial and reply briefs were filed on May 14 and May 21, 2015, respectively. The parties mainly disputed whether Washington Gas could recover costs for infrastructure replacement projects located outside of Maryland through the STRIDE statute. Washington Gas contended that since Maryland customers would benefit from the improvements located outside of Maryland, PU § 4-210 permitted STRIDE cost recovery on those out-of-state assets. On May 27, 2015, Chief Judge Romine issued an order, concluding that for "an infrastructure replacement project to be an 'eligible infrastructure replacement' under the STRIDE law," and thus qualifying for accelerated cost recovery associated with the project through the STRIDE surcharge mechanism, the project "must be located on pipeline system located in the State and subject to the Commission's jurisdiction." Further, Chief Judge Romine stated that the STRIDE statute "is clear and unambiguous; the incentive for cost recovery outside a base rate proceeding is available to 'accelerate gas infrastructure improvements in the State.'" Since Transmission Programs 1, 2, and 4 included infrastructure located outside of Maryland, Chief Judge Romine ...