et seq....2008/07/29 · page 2 u-15453 reasonable and should be approved. the parties also agree...
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S T A T E O F M I C H I G A N
BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION
* * * * *
In the matter of the application of ) SEMCO ENERGY GAS COMPANY for authority ) to implement a gas cost recovery plan and factors ) Case No. U-15453 for the 12-month period of April 2008 through ) March 2009 for its Battle Creek Division. ) ) At the July 29, 2008 meeting of the Michigan Public Service Commission in Lansing,
Michigan.
PRESENT: Hon. Orjiakor N. Isiogu, Chairman
Hon. Monica Martinez, Commissioner Hon. Steven A. Transeth, Commissioner
ORDER APPROVING SETTLEMENT AGREEMENT
On December 21, 2007, pursuant to 1982 PA 304, MCL 460.6h et seq., SEMCO Energy Gas
Company (SEMCO) filed an application with supporting testimony and exhibits requesting
approval of its gas cost recovery (GCR) plan and factors for the 12-month period ending
March 31, 2009 for its Battle Creek Division. On May 2, 2008, SEMCO filed amended testimony
and exhibits.
A prehearing conference was held on February 13, 2008, before Administrative Law Judge
Sharon L. Feldman; SEMCO and the Commission Staff participated in the proceedings. On
June 23, 2008, the parties submitted a settlement agreement resolving all issues in the case.
According to the terms of the settlement agreement, attached as Exhibit A, the parties agree
that SEMCO’s 2008-2009 GCR plan as reflected in its initial and amended case filings, is
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reasonable and should be approved. The parties also agree that for purposes of the five-year
forecast for the 2009-2010 and 2011-2012 GCR plan years, SEMCO will adhere to gas purchasing
practices as set forth in Attachment 2 to the settlement agreement. The parties further agree that
the Commission should approve a base GCR factor of $10.5214 per dekatherm (Dth) for
SEMCO’s Battle Creek Division, as set forth in Attachment 1 to the settlement agreement. The
parties agree that this base GCR factor shall be effective the first billing month immediately
following the issuance of a Commission order approving the settlement agreement. The parties
agree that the base GCR factor is comprised of a demand capacity charge of $0.4810 per Dth, a
balancing recovery charge of $0.2500 per Dth, and a gas commodity charge of $9.7904 per Dth.
The parties further agree that if this settlement agreement is approved effective after the second
quarter matrix is typically calculated and during the July, August, or September billing months, the
maximum authorized factor in effect for those months will reflect the contingency matrix
adjustment calculated pursuant to Attachment 1 to the settlement agreement for the second quarter
of SEMCO’s 2008-2009 GCR period. Thereafter, SEMCO agrees to recalculate the 2008-2009
maximum authorized GCR factor with symmetry for the third and fourth quarters of the plan
period in accordance with the contingency matrix set forth in Attachment 1. The New York
Mercantile Exchange increase used to calculate the quarterly adjustment is capped at $3.00 per
million British thermal units (MMBtu). Any new GCR factor ceiling calculated under the matrix
will not decrease below the base GCR factor of $10.5214 per Dth; however, the Commission
observes that if the price of natural gas declines SEMCO may elect to bill a lower factor under
MCL 460.6h(9) and nothing in the settlement agreement precludes the company from doing so.
Thus, if gas prices decline, voluntary GCR factor reductions may be appropriate.
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The Commission finds that the settlement agreement is reasonable and in the public interest,
and should be approved.
THEREFORE, IT IS ORDERED that:
A. The settlement agreement, attached as Exhibit A, is approved.
B. The 2008-2009 gas cost recovery plan as filed, amended, and as modified by the settlement
agreement, is approved.
C. SEMCO Energy Gas Company is authorized for the 2008-2009 plan year to incorporate
into its rates a base gas cost recovery factor of $10.5214 per dekatherm, effective with the first
billing month following the issuance of this order.
D. SEMCO Energy Gas Company is authorized to implement maximum gas cost recovery
factors for the 2008-2009 plan year as set forth in the settlement agreement and pursuant to the
contingency mechanism set forth in Attachment 1 of the settlement agreement.
E. SEMCO Energy Gas Company shall file, within 30 days, tariff sheets updated to reflect the
approvals granted herein and substantially similar to Attachment 1 to the settlement agreement and
Exhibit B to this order.
The Commission reserves jurisdiction and may issue further orders as necessary.
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Any party desiring to appeal this order must do so in the appropriate court within 30 days after
issuance and notice of this order, under MCL 462.26.
MICHIGAN PUBLIC SERVICE COMMISSION
________________________________________ Orjiakor N. Isiogu, Chairman
________________________________________ Monica Martinez, Commissioner
________________________________________ Steven A. Transeth, Commissioner By its action of July 29, 2008. ________________________________ Mary Jo Kunkle, Executive Secretary
EXHIBIT A
ATTACHMENT 1
ATTACHMENT 2
M.P.S.C. - No. 3 – Gas Sixth Revised Sheet No. D-3.00 SEMCO ENERGY GAS COMPANY – B.C. DIVISION Cancels Fifth Revised Sheet No. D-3.00 (Adjust GCR Factor)
Issued June 13, 2008 by Effective for bills rendered on and after Eugene N. Dubay The first billing cycle of the April 2008 Senior Vice President and C.O.O. Billing Month. Issued under authority of 1982 Port Huron, MI 48060 PA 304, Section 6h and the Michigan Public Service Commission for Self-implementation in Case No. U-15453.
The Gas Cost Recovery Factors
Pursuant to MCL 460.6h (9), the Company is authorized to implement Gas Cost Recovery Factors for The April 2008 through March 2009 GCR plan period of up to:
Billing Months Maximum Authorized Actual Factor Billed Factor $/Dth $/Dth
April 2008 $10.0598/ Dth $8.0500/ Dth May 2008 $10.0598/ Dth $10.0598/ Dth June 2008 $10.0598/ Dth $10.0598/ Dth July, 2008 $10.7029/ Dth $10.7029/ Dth August, 2008 $10.7029/ Dth September, 2008 $10.7029/ Dth October, 2008 $10.7029/ Dth November, 2008 $10.7029/ Dth December, 2008 $10.7029/ Dth January, 2009 $10.7029/ Dth February, 2009 $10.7029/ Dth March, 2009 $10.7029/ Dth
The current month’s Gas Cost Recovery factor is composed of the following cost components: Balancing Charge ......................................$0.2500 per Dth Capacity Demand Charge ....................................$0.4747 per Dth Gas Commodity Charge ......................................$9.9782 per Dth
EXHIBIT B