|
On
January 30, 2009, the Company filed a Motion with the Vermont Public
Service Board (PSB), seeking authorization from the PSB to amend and
clarify its Alternative Regulation Plan (Plan) approved in Docket No.
7336:
to
permit the treatment of the costs that the Company incurred to restore
service in response to the extraordinary storm that struck portions of its
service area starting on or about December 11, 2008 (the "extraordinary
storm costs") as an "exogenous factor" under the Plan; or
in
the alternative, for an Accounting Order to enable the Company to record
to Miscellaneous Deferred Debits 186.0 (as defined in the FERC Uniform
System of Accounts) said extraordinary storm costs for recovery through a
subsequent base-rate filing under its Plan.
In
December of 2008, parts of the Company's franchised service area
experienced an extraordinary ice storm. Storm damage to the Company's
distribution facilities in these areas necessitated a massive Company
storm response, and the incurrence of significant cost and expense to
restore and maintain the reliable and safe delivery of power to meet
customer loads. These costs and expenses were the highest
incurred by the Company is its history for storm
restoration. The Company's storm restoration effort resulted in
the incurrence of incremental expenditures (defined as contractor costs,
overtime payroll, meals, and related expenses), on an estimated basis, of
$4.639 million, bringing the Company's total 2008 incremental overhead
service restoration cost to $8.260 million. The Company's 2008
overhead service restoration incremental costs exceeded its five year
average (as reflected in its cost-of-service in the amount of $2.953
million) by more than $5.307 million.
Under
the amendments and clarifications proposed in the Motion, the December
2008 extraordinary storm costs would be addressed in accordance with the
"exogenous factor" terms established under the Plan and recovered over a
12-month period via an Earnings Sharing Adjustment Mechanism ("ESAM") rate
adjustment to begin in July of 2009.
While
the Company prefers establishing a process to address its December 2008
extraordinary storm costs under its Plan, as an alternative, the Company
also proposed that the costs be made the subject of an accounting
order. An accounting order would authorize the company to book
and defer with carrying costs its extraordinary storm costs until such
time as the costs are included in the Company's revenue requirement in a
subsequent base-rate filing under the Plan. Like the proposed
ESAM alternative above, costs addressed via an accounting order would
thereafter be excluded from the non-power cost cap established under the
Plan.
By
letter dated February 3, 2009, the Vermont Department of Public Service
(DPS) filed a letter in support of the Company's request to amend its ARP,
and that the "treatment proposed by [the Company] for the costs of the
extraordinary 2008 storm is fair to the Company and to its
ratepayers.
While
the Company cannot predict the outcome of this matter, we have requested
that the PSB decide the issues raised in the Company's Motion by February
28, 2009.
|