MPUC Holds Public Hearings On Unitil Proposed Rate Increase In Portland On November 2, 2011
October 24, 2011
Augusta, Maine—— On Wednesday , November 2nd, at 5:30 pm, the Maine Public Utilities Commission will hold a public witness hearing regarding a proposed rate increase of $9.3 million by Northern Utilities, Inc., d/b/a Unitil. The hearing will be held in rooms 109/110 of the Abromson Center at the University of Southern Maine in Portland. The proposed base rate increase amounts to approximately 49% of its distribution operating revenues, 15% of total annual operating revenues, and 15% of average bills. The Company has also proposed rate design changes that would have the effect of increasing the rates of residential and small commercial customers proportionately more than larger commercial and industrial customers, in accordance with the results of its rate design study. Unitil also proposes a methodology for recovery of costs associated with its cast iron replacement project (CIRP) in Portland and Westbrook during 2012 – 2024 as well as a Step Adjustment to recover its CIRP expenditures made in 2011. The Step Adjustment would add 4.5% to the base rate increase, both of which would take effect on or about February 5, 2012.
The Office of the Public Advocate filed testimony in the case recommending an increase of $7.4 million, accepting Unitil’s proposed rate design changes. The Commission Staff issued a Bench Analysis on September 14, 2011, that outlines its preliminary assessment of legal and technical issues in the case. Two groups of large commercial and industrial gas consumers, called the Maine Gas Users Group and the Joint Consolidated Interveners, have also intervened.
In a public witness hearing, any citizen may participate by providing sworn or unsworn testimony though only sworn testimony becomes evidence in the case.
“This public hearing gives the Commission an opportunity to hear the views of concerned citizens about the proposed rate increase,” noted Commission Chairman Thomas Welch, “It is our job to decide whether the proposed rate increase is necessary for the continued financial health and efficient operation of the utility and we appreciate the public sharing their views.”
In this case, the Commission must set rates that are just and reasonable for ratepayers and shareholders. The Staff will issue its final recommendations for Commission decision in the case in mid-December.
Background: This is the first base rate case for Northern in approximately 28 years. Its most recent prior rate design case was completed in 1999. Upon its take-over of Northern in December 2008, Unitil inherited approximately 65 miles of cast iron and 10 miles of bare steel natural gas pipes in Portland and Westbrook. In 2011, Northern began a 14-year cast iron replacement program and system upgrade of its Portland/Westbrook systems that is estimated to cost approximately $63 million. In 2004-2008, Northern conducted a similar replacement program in Lewiston and Auburn that removed 49 miles of cast iron pipe and cost approximately $18 million. These costs are reflected in this rate increase along with other recent system safety upgrades and improvements Northern has made, such as installation of automated meter reading (AMR).
To view the testimony and documents filed by the Company, OPA and the Staff and other non-confidential documents in the case, go to the Commission website (www.maine.gov/mpuc) and access the Virtual Case File. Enter docket number 201192 in the Case ID field to retrieve available documents. To write to the Commission, send a letter (referencing Docket Number 2011-92) to the Commission’s Administrative Director, Karen Geraghty, at 18 State House Station, Augusta, ME 04333-0018.
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The Maine Public Utilities Commission regulates electric, telephone, water and gas utilities to ensure that Maine citizens have access to safe and reliable utility service at rates that are just and reasonable for all ratepayers. Commission programs include Maine Enhanced 911 Service, and Dig Safe.
Contact: Karen Geraghty
karen.geraghty@maine.gov
