Statistical Release, H.15 Selected Interest Rates and the yield spread as reported by Reuters Corporate spreads as of the dates of each issuance. 57. Tariff rates will go into effect on December 18, 2015. Revenue Allocation and Rate Design The Residential customer charge will remain at the current $16.75/month. 59. Small General Service customer charges will remain at the current $21.25/month (≤6440 therms) and $48.00/month (>6440 therms). 60. Revenue allocation to the classes is set forth in Appendix “A.” Rate design for all classes shall be as set forth in Appendix “B.” Revenue allocation and rate design reflect a compromise and do not endorse any particular cost of service study. 61. Columbia will agree to withdraw its Choice Administrative Charge (“CAC”) proposal in this proceeding. 62. Columbia’s Gas Procurement Charge (“GPC”) rate shall continue at the current rate of $0.00695/therm. 63. Columbia will not propose a CAC for a period of two base rate cases, or five years, whichever occurs first. Parties further agree not to propose a change to Columbia’s GPC rate for a period of two base rate cases, or five years, whichever occurs first. Provided, however, that if any non-party to this settlement, during this stay out period, proposes changes to the GPC, all parties to this agreement reserve the right to propose either a CAC or other changes to the GPC in rebuttal testimony. C. Universal Service and Conservation 64. Columbia’s proposals to: (a) increase the Emergency Repair Program (“ERP”) annual budget to $600,000; (b) raise the eligibility guidelines for ERP to 200% of the Federal Poverty Level (“FPL”); and (c) recover ERP program costs
Contested Issue Hardship Fund Background Columbia’s Hardship Fund provides financial assistance in the form of grants, which are administered by the Dollar Energy Fund (DEF) to Columbia’s residential customers who need temporary assistance in paying their gas bills and who meet certain qualification guidelines. Columbia M.B. at 7. Columbia’s Hardship Fund program has a total projected budget of $409,000. CAUSE-PA M.B. at 14. Columbia raises funds for its Hardship Fund through several means, including voluntary donations from shareholders, employees, and ratepayers. Columbia M.B. at 8. However, the current primary source of funds for Columbia’s Hardship Fund is an amount of $375,000 that is recovered from all of Columbia’s non-CAP residential customers through Columbia’s USP Rider. Id.; Columbia St. 112-RJ at 1. Prior to 2012, Columbia received $375,000, less a $13,125 administrative fee, for its Hardship Fund from Citizens Energy Corporation (Citizens Energy) pursuant to a gas supply contract between Columbia and Citizens Energy. However, in 2012, Columbia cancelled this contract. Columbia M.B. at 8-9. As part of the settlement in Columbia’s 2012 base rate proceeding at Docket No. R-2012-2321748, the parties to the settlement agreed that Columbia would be able to recover $375,000 per year for its Hardship Fund through its USP Rider to compensate for the loss of funds that resulted from the cancellation of Columbia’s contract with Citizens Energy. OCA M.B. at 5-6. On June 2, 2014, Columbia filed its proposed 2015-2018 Universal Service and Energy Conservation Plan (USECP) with the Commission at Docket No. On March 26, 2015, the Commission entered a Tentative Order (Tentative
Hardship Fund issue in the matter before us. I&E M.B. at 4. Similarly, I&E argued that CAUSE-PA’s concern regarding the negative effect that immediate cessation of recovery of funds through the USP Rider could have on low-income residential customers is irrelevant. In I&E’s view, the real concern is that Columbia’s present recovery mechanism makes contributions to the Hardship Fund compulsory, and not voluntary. I&E R.B. at 12. On the other hand, I&E contended that its own recommendation satisfies the directive the Commission expressed. Specifically, I&E took the position that the Commission, in its USECP Order, clearly directed Columbia to immediately abstain from utilizing its USP Rider to fund the Hardship Fund and to immediately begin funding the Hardship Fund solely through voluntary donations. According to I&E, this is the only way to interpret the plain language of the USECP Order. I&E M.B. at 4-7. ALJ’s Recommendation In her Recommended Decision, the ALJ accepted the position of the OCA, as endorsed by Columbia and CAUSE-PA, that the Commission did not mandate the immediate removal of the $375,000 funding of the Hardship Fund from the USP Rider, but instead instructed the Parties to “address” this issue in the instant case. R.D. at 56. The ALJ noted that in the Tentative Order, the Commission indicated that it was not presently seeking to amend Columbia‘s funding mechanism for its Hardship Fund. Id. (citing Tentative Order at 28). The ALJ ruled that when read in conjunction with the USECP Order, it is clear that the Commission was simply instructing the Parties to discuss other ways for Columbia to obtain funding for the Hardship Fund and to develop a plan for Columbia to cease recovery through its USP Rider in a timely manner. Additionally, the ALJ pointed out that although the Commission, via its USECP Order, directed Columbia to make several amendments to its USECP, it did not direct Columbia to remove the hardship funding from its USP Rider. R.D. at 56.
Exceptions and Replies Both Columbia and I&E excepted to the ALJ’s ruling. Columbia’s Exceptions seek clarification regarding the ALJ’s recommendation, while I&E’s Exceptions seek reversal of this recommendation. Additionally, I&E filed Replies to Columbia’s Exceptions, while Columbia, the OCA, and Cause-PA filed Replies to I&E’s Exceptions. The Exceptions and the associated Replies to Exceptions are addressed below. a. I&E’s Exceptions and the Replies to Exceptions of Columbia, the OCA and CAUSE-PA I&E excepts to the ALJ’s recommendation that the Commission adopt the positions of Columbia, the OCA, and CAUSE-PA. I&E submits that none of these positions accomplish the Commission’s directive that the Parties “address” the issue of the Hardship Fund in the matter before us. I&E Exc. at 4-5, 8. I&E points out that, in its USECP Order, the Commission rejected Columbia’s argument that it could not fund its Hardship Fund through voluntary resources and noted that every other natural gas distribution company and electric distribution company has done so. Id. at 5 (citing USECP Order at 39-40). As a result, I&E reasons that it is logical to conclude that Columbia’s use of its USP Rider to collect $375,000 for its Hardship Fund, which is akin to mandatory funding, is inconsistent with the USECP Order. Id. at 5. I&E posits that it is plausible that Columbia’s search for voluntary funding for the Hardship Fund could continue for an indefinite period. I&E points out that Columbia has been collecting mandatory funds through its USP Rider since the settlement of its 2012 base rate case and still has yet to find additional voluntary resources sufficient to replace this mandatory funding. I&E reasons that Columbia could simply state in its next base rate case that it has not had sufficient time to secure
offer support for its own interpretation of the USECP Order. Namely, Columbia points out that I&E fails to explain why its interpretation of the word “address” necessarily means that Columbia must immediately abstain from its current hardship funding mechanism. Columbia reiterates that if the Commission had set forth its USECP Order as I&E interprets it, it would not have instructed the Parties to address the Hardship Fund issue in the matter before us. Columbia R. Exc. at 3. Columbia next argues that although I&E depicts the $375,000 Hardship Fund contribution as a “relatively small amount,” it fails to consider the negative effects on low-income customers that would result if the present Hardship Fund contribution were removed from the USP Rider immediately with no alternative funding mechanism in place. According to Columbia, the ALJ correctly rejected I&E’s position because the record demonstrates that low-income customers could be harmed if I&E’s position were adopted. Citing its own Reply Briefs at 3-6, Columbia also points out that, contrary to I&E’s suggestion, it cannot be directed to provide $375,000 in Hardship Funding voluntarily in the interim while it seeks additional voluntary funding. Columbia submits that in accordance with existing case law, utilities are permitted to recover expenses that are prudently incurred for general policy reasons. Therefore, Columbia reasons that it must be permitted to recover any contribution to the Hardship Fund that it is required to provide. Columbia R. Exc. at 3-5. Additionally, Columbia rebuts I&E’s assertion that its search for additional voluntary funding could continue for an indefinite period, to the detriment of ratepayers. Columbia acknowledges that beyond its use of voluntary funding used to supplement the $375,000 it receives for the Hardship Fund via its USP Rider, it has not yet replaced funding for the Hardship Fund with additional voluntary sources in the three years since the settlement of its 2012 base rate case. However, Columbia points out that it was under no previous obligation to do so. Columbia R. Exc. at 5-6. Columbia submits that the above reasoning by I&E cannot be used as a basis to conclude that it will not now