Order 15513 - Pascoag Fire District: Fuel Adjustment Clause

 

STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS

PUBLIC UTILITIES COMMISSION

ORDER

WHEREAS, On January 23, 1998, the Pascoag Fire District ("Pascoag") filed with the Public Utilities Commission ("Commission") proposed changes to its fuel adjustment clause  [1 Pascoag's present FAC factor was made effective by the Commission for the billing months of August, 1997 through January, 1998. Order No. 15356, issued August 20, 1997.]  ("FAC") and Capacity Cost Adjustment Clause [2 Pascoag's present CCA factor, approved in Order No. 15357 (issued August 20, 1997), was made effective by the Commission for the billing months of August, 1997 through January, 1998.]  ("CCA"). Pascoag proposed an increase in the FAC from $.00953 to $. 01524 per kilowatt-hour ("kWh"), and a decrease in the CCA from $0.06268 to $0.05753 per kWh for the billing months of February through July, 1998. Combined with the Demand Side Management factor mandated by the Utility Restructuring Act of 1996, the bill of a typical 500 kWh residential customer would increase from $54.24 to $54.52, or $0.28; and

WHEREAS, Pascoag is a municipal electric utility which receives most of its power through its membership in the Association of Massachusetts Municipal Wholesale Electric Companies ("MMWEC"). Pascoag also receives a significant amount of power through wholesale purchases from Montaup Electric Company ("Montaup"), a wholly-owned subsidiary of Eastern Utilities Associates, which also owns Blackstone Valley Electric Company and the Newport Electric Corporation; and

WHEREAS, Pascoag's FAC filing is required by the terms of its standard Fuel Adjustment Clause Tariff. Under the tariff, Pascoag files every six months a statement of its expected fuel costs and retail sales during the following six months. Based upon these estimates and any adjustment for any overcollection or undercollection during the previous six months, Pascoag estimates its average fuel cost per kWh. This figure represents the average fuel adjustment factor for billing during the next six-month period. In the event that Pascoag actually experiences or is able to reasonably anticipate that total fuel costs will vary by at least ten percent over or below the level of fuel revenues authorized to be collected, Pascoag may apply for an Interim Fuel Adjustment Clause modification before this Commission; and

WHEREAS, Pascoag's CCA filing is required by the terms of its Capacity Cost Adjustment Clause Tariff. Under the tariff, Pascoag files every six months a statement of its expected capacity costs and retail sales during the following six months. Based upon these estimates and an adjustment for any overcollection or undercollection during the previous period, Pascoag calculates its average capacity cost per kWh. This figure represents the CCA factor for billing during the next period. In the event that Pascoag actually experiences or is able to reasonably anticipate that total costs will vary by at least ten percent over or below the level of revenues authorized to be collected, Pascoag may apply for an Interim Capacity Cost Adjustment Clause modification before this Commission; and

WHEREAS, In light of the impending rate changes necessitated by pending restructuring, revenue requirements, and rate design cases presently before the Commission, Pascoag proposed to extend the previously approved FAC and CCA factors, although the calculated factors would increase or decrease as reflected in the filing, and meet any increase in rates through the application of its Reserve Funds; and

WHEREAS, The Division of Public Utilities and Carriers ("Division"), through its Chief Accountant, filed a letter with the Commission on January 27, 1998, finding that "the continuation of the fuel and capacity factors presently in effect [is] an acceptable approach to recovering fuel and purchase power costs for the period through August [sic] [3 The actual adjustment period is from February through July, 1998.] or until the rate changes stemming from the pending [Pascoag] Dockets are in place, which ever comes first;" and

WHEREAS, At an open meeting on January 28, 1998, the Commission reviewed Pascoag's request for extension and the Division's response, and is of the opinion that continuing the presently approved factors with any shortfall being addressed through Pascoag's Reserve Funds, is reasonable and in the best interests of ratepayers;

Accordingly, it is

(15513) ORDERED:

The approved Fuel Adjustment Clause factor of $0.00953 and Capacity Cost Adjustment Clause factor of $.06268 per kWh filed by the Pascoag Fire District shall continue in effect for the billing commencing in February, 1998.

EFFECTIVE AT PROVIDENCE, RHODE ISLAND ON JANUARY 28, 1998. WRITTEN ORDER ISSUED JANUARY 30, 1998.

PUBLIC UTILITIES COMMISSION