Section 69.181. [Reserved]  

Cost Assignment

A utility may not recover the carrying costs associated with the amortization of an operating expense. Not only would this allow a utility to capitalize an item in its rate base and at the same time recover an item as expense from taxpayers, but it would also undermine the Public Utility Commission’s policy, as codified by this regulation, to balance the interest of shareholders and ratepayers, and to fairly spread the cost of TOP expenses which arose out of gas distribution company’s failure to purchase gas at its full contract requirements level. National Fuel Gas Distribution Corp. v. Pennsylvania Public Utility Commission, 677 A.2d 861 (Pa. Cmwlth. 1996).

General Comments

This regulation is a statement of policy and does not have the force of law. It is only an indication of how the Public Utility Commission intends to proceed. UGI Utilities, Inc. v. Pennsylvania Public Utility Commission, 677 A.2d 882 (Pa. Cmwlth. 1996).

Refund Granted

Administrative law judge’s decision to order the utility company to refund its customers 90% of its take-or-pay refund, including interest, was upheld. UGI Utilities, Inc. v. Pennsylvania Public Utility Commission, 677 A.2d 882 (Pa. Cmwlth. 1996).

Refunds

Natural gas company was required to refund 90% of its take-or-pay refund, including interest, despite company’s contention that the decision was contrary to the take-or-pay refund policy statement and to the Public Utility Commission’s prior application of that statement to the company. Peoples Natural Gas Co. v. Pennsylvania Public Utility Commission, 677 A.2d 890 (Pa. Cmwlth. 1996); appeal denied 688 A.2d 174 (Pa. 1997).

The witness testified that there was no analysis or quantification by the gas company of the time value of the money lost to ratepayers, that is the lag between the times that ratepayers made payments to the gas company for TOP costs, and the time the ratepayers received a refund. Therefore, the gas company failed to carry its burden to prove its equitable argument that it, and not the ratepayers, was entitled to a refund. National Fuel Gas Distribution Corp. v. Pennsylvania Public Utility Commission, 677 A.2d 861 (Pa. Cmwlth. 1996).