OAH Docket No. 69-2500-9783-2
MPUC Docket No. G-001/GR-95-406

 

STATE OF MINNESOTA
OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE MINNESOTA PUBLIC UTILITIES COMMISSION

In the Matter of the Request of Interstate Power Company for Authority to Change Its Rates for Gas Service in Minnesota

FINDINGS OF FACT, CONCLUSIONS, AND RECOMMENDATION

 

TABLE OF CONTENTS

 

FINDINGS OF FACT................................................................................................................2

PROCEDURAL HISTORY...................................................................................................... 2

CAPITAL STRUCTURE AND RATE OF RETURN................................................................. 3

Company’s Position:  DCF Method.................................................................................. 5

Company’s Position:  Other Methods.............................................................................. 7

DPS Position:  DCF Method............................................................................................. 9

OAG Position:  DCF Method.......................................................................................... 11

MUI Proposal:  Average of Recent Decisions................................................................ 13

ALJ Position:  DCF Method............................................................................................ 14

RATE BASE........................................................................................................................... 16

Rate Case Expenses..................................................................................................... 16

Net Plant In Service........................................................................................................ 18

CIP Tracker Adjustment................................................................................................. 18

Cash Working Capital.................................................................................................... 18

OPERATING REVENUES AND EXPENSES........................................................................ 18

Manufactured Gas Plant Clean-up Costs...................................................................... 18

·         Manufactured Gas v. Natural Gas/Used and Useful.................................................. 20

·         Current Customers in Rochester.............................................................................. 22

·         Company Statements in Annual reports.................................................................... 23

·         Recognition of Expenses in Financial Statements.................................................... 24

·         Shareholder Expectations/Inducement for Pursuing Third Parties........................... 25

·         Recovery of MGP Expenses and Carrying Charges................................................. 25

Post retirement benefits other than pension (PBOPs).................................................. 26

Other compensation costs............................................................................................. 27

Allocations Between Regulated and Unregulated Operations....................................... 27

Economic Development Expenses................................................................................ 28

Property Taxes............................................................................................................... 29

Test Year Sales Forecast.............................................................................................. 30

Rate Case Expenses..................................................................................................... 30

CONSERVATION COST RECOVERY................................................................................. 30

Existing CIP Tracker....................................................................................................... 30

Recovery Of CIP Tracker Balance................................................................................. 31

Test‑Year CIP Expenses................................................................................................ 31

Conservation Cost Recovery Charge............................................................................ 31

RATE-DESIGN...................................................................................................................... 32

Rate Design Criteria....................................................................................................... 32

Conservation Improvement Program Expenses............................................................ 34

Pricing Structures for Sales and Transportation Customers........................................ 35

Apportionment of Revenue Responsibility..................................................................... 35

Customer Charges......................................................................................................... 40

Additional Rate-Design And Condition Of Service......................................................... 43

INTERSTATE’S EXPANSION TO NEW TOWNS................................................................. 44

EFFECT OF RATE INCREASE ON LOW-INCOME CUSTOMERS.................................... 46

REVENUE DEFICIENCY....................................................................................................... 47

CONCLUSIONS.................................................................................................................... 47