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Regulator Approves Deferral Of Default Service Costs
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The Massachusetts DPU has approved filings by Liberty Utilities to defer reconciliations of its gas supply cost that would otherwise be incorporated into Liberty's bypassable gas adjustment factor (GAF) at this time
In language not specific to Liberty Utilities (also addressing various other LDCs' non-supply deferrals which were also approved), the DPU in a Feb. 28 letter order said that the approvals will result in, "two months of deferral spread out over the six months of the off-peak period." [emphasis added]
However, in an updated clarification of its proposal also filed on Feb. 28, Liberty Utilities had again stated, "while the deferral will help mitigate the gas cost increase in the short-term deferring these costs may not be the best long-term solution since the deferred costs would be collected from customers during the next peak period filing..." [emphasis added]
As previously reported, the DPU had also broadly stated in directing the bill cuts that any deferrals (most of which relate to the delivery side of the bill) would be collected through the nonbypassable LDAF during the off-peak season
While not explicit, the language used by Liberty Utilities in its proposed supply cost deferral had suggested that such supply cost deferrals would be recovered in a future bypassable GAF adjustment, not the nonbypassable LDAF
The ultimate treatment of the deferred costs at Liberty Utilities (bypassable versus nonbypassable and recovery during off-peak vs peak season) is unclear from the DPU's letter order
While not specific to the question of bypassable versus nonbypassable, the DPU in its letter order did state that it was mindful of "inter-generational equity concerns" arising from deferrals, though the DPU noted that the short two-month deferral at issue ameliorates any departure from its general belief that, "[t]o the extent possible, costs should be recovered contemporaneously from ratepayers who have caused those costs and not deferred to future periods."
The DPU's letter order discusses additional actions being undertaken to address energy affordability, but does not include any specific discussion of potential supply-cost-focused solutions or changes
As to the supply rate deferral approved at Liberty Utilities, Liberty Utilities will, for its Blackstone service area, defer 60 percent of the projected end-of-period peak period commodity costs, for the Blackstone area
Under normal operation of the gas supply reconciliation process, Liberty Utilities would have raised the bypassable Blackstone Peak Gas Adjustment Factor (GAF) to $1.0863 per therm from the current charge of $0.5390 per therm
Under the adopted deferral, the Blackstone bypassable GAF will increase to only $0.7579 per therm, effective March 1, 2025
For Liberty Utilities' Fall River and North Attleboro service area, Liberty Utilities will defer 25 percent of the projected end-of-period peak period commodity costs, for the Fall River and North Attleboro service area
Under normal operation of the gas supply reconciliation process, Liberty Utilities would have raised the Fall River and North Attleboro bypassable Peak Gas Adjustment Factor (GAF) to $0.8938 per therm from the current charge of $0.6273 per therm
Under the approved deferral, the Fall River & North Attleboro GAF will increase to only $0.8272 per therm, effective March 1, 2025
Dockets
D.P.U. 24-PGAF-GRID
D.P.U. 24-PGAF-NSTAR
D.P.U. 24-PGAF-EGMA
D.P.U. 24-PGAF-BERK
D.P.U. 24-PGAF-LIB
D.P.U. 24-PGAF-FGE
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February 28, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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