National Fuel Gas Distribution Corporation (NFG)

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Request for Investigation Regarding Potential Acquisition
In this filing dated January 9, 2008, the New York State Department of State Division of Consumer Protection formally requests that the New York State Public Service Commission (PSC) investigate whether an entity known as New Mountain Vantage GP (NMV), is acquiring control of National Fuel Gas Distribution Corporation, a utility operating in New York. Evidence was presented by the utility that NMV directly controls 9.7% of the shares of the utility's corporate parent, and that NMV intends to control the management of the Company. Because of NMV's stated interest in focusing corporate attention on the utility's unregulated activities, the rates and service of the utility's regulated gas operations may be impacted negatively. The Division recommends that the PSC investigate whether NMV has violated the Public Service Law by acquiring more than 10% of a utility without PSC approval.

Brief Opposing Exceptions
In this November 2, 2007 filing, the New York State Department of State Division of Consumer Protection responds to certain arguments made by other parties regarding the Administrative Law Judge's September 28, 2007 Recommended Decision. We oppose National Fuel Gas Distribution's position regarding the fair profit rate as well as other parties' concerns with the Judge's recommended changes to a measure to promote retail competition through subsidization by customers.

Brief on Exceptions
The Administrative Law Judge issued a recommended decision regarding National Fuel Gas Distribution Corporation's request to increase delivery rates, which adopted the majority of the New York State Department of State Division of Consumer Protection's recommendations in this case. In this brief dated October 18, 2007, the Division identifies our concerns with the Judge's recommendations regarding a fair profit rate for the company, whether all customers should fund the utility's energy efficiency program, the benefits that ratepayers should obtain from off-system gas sales, and whether consumers should fund certain retail competition promotion policies.

Reply Brief Regarding Rate Case
In a reply brief dated August 27, 2007, the New York State Department of State Division of Consumer Protection responded to several issues raised by other parties concerning NFG's rate increase request. We explain that NFG should commence an energy efficiency program rather than wait as some other parties had proposed, and that consumers should obtain the benefit of additional revenues from off-system sales than is being proposed by other parties. We also respond to other parties' concerns about our proposal to eliminate a measure that promotes retail competition through subsidization by customers, as well as our proposal to limit the increase in the minimum charge for residential customers.  

Initial Brief Regarding Rate Case
In this brief dated August 15, 2007, the New York State Department of State Division of Consumer Protection explains the reasons why the New York State Public Service Commission (PSC) should substantially modify NFG's request for a rate increase of approximately $52 million. We explain that the PSC should reject the Company's proposed new depreciation rates, thereby saving customers $9 million annually. It should also use approximately $15 million of insurance proceeds for site investigation and remediation of former manufactured gas plant sites for the benefit of the utility's customers instead of the benefit of the Company's unregulated affiliates, use an overall inflation rate for health care costs, and apply additional revenue from off-system sales to the benefit of ratepayers. We recommend that the PSC reject several Company proposals to recover more costs from customers in winter and increase the minimum charge paid by residential customers. Additionally, the Division proposes a new conservation program and a measure to eliminate the Company's disincentive to promote conservation.  

Testimony Regarding Proposed Rate Increase
NFG proposed to increase delivery rates by approximately 20% effective January 1, 2008. The New York State Department of State Division of Consumer Protection submitted testimony on June 7, 2007, opposing that rate increase and recommending several regulatory policy changes. We demonstrate that the Company's proposed new depreciation rates, which would increase annual costs to customers by approximately $9 million, should be rejected. We also propose a new gas efficiency program and elimination of the Company's financial disincentive to promote conservation. In addition, the Division explains why the utility's proposals to substantially increase the minimum charge applicable to residential customers and recover more costs from customers in winter, should be rejected.

 

Last Modified: May 02, 2011