PENNSYLVANIA
PUBLIC UTILITY COMMISSION
Harrisburg, PA 17105-3265
Public Meeting held April 23, 2015Commissioners Present:
Robert F. Powelson, Chairman
John F. Coleman, Jr., Vice Chairman
James H. Cawley
Pamela A. Witmer
Gladys M. Brown
National Fuel Gas Distribution Corporation’s Universal Service and Energy Conservation Plan for 20142016 Submitted in Compliance with 52Pa.Code§ 62.4 / Docket No. M-2013-2366232
FINAL ORDER RE COMPLIANCE FILING
BY THE COMMISSION:
On February 12, 2015, the Public Utility Commission (Commission) issued an Order on Reconsideration (February Reconsideration Order), which addressed issues raised concerning the Final Order for National Fuel Gas’ (NFG or Company) 2014-2016 Universal Service and Energy Conservation Plan (USECP or Plan), entered May 22, 2014. The February Reconsideration Order directed NFG to file a Revised 2014-2016 USECP (compliance filing) within 30 days of the entry date of the Order and to include new information concerning two aspects of its Plan. We invited comments on the new information to be contained in the compliance filing and on whether the Revised Plan is in compliance with the May 22, 2014 Final Order. NFG timely filed a revised Plan on March 16, 2015, and filed its Second Revised 2014-2016 Plan on March, 31, 2015. We have considered the comments and reply comments filed by the parties and shall hereby approve NFG’s Second Revised 2014-2016 Plan consistent with this Order.
I. BACKGROUND[1]
The Natural Gas Choice and Competition Act (Competition Act), effective July1, 1999, opened the natural gas supply market to competition and established standards and procedures for restructuring Pennsylvania’s natural gas utility industry. It includes universal service provisions to ensure that natural gas service remains universally available to customers in the Commonwealth. 66Pa.C.S. §§2201, et seq.
The Commission promulgated Universal Service and Energy Conservation Reporting Requirements regulations (Reporting Requirements). 52 Pa. Code §§ 62.1-62.8. Further, the Commission adopted its Customer Assistance Plan Policy Statement (CAP Policy Statement), which provides guidance on affordable payments. 52 Pa. Code§§ 69.261-69.267. The Commission balances the interests of customers who benefit from the programs with the interests of the customers who pay for the programs. See Final Investigatory Order on CAPs: Funding Levels and Cost Recovery Mechanisms, Docket No. M-00051923 (Dec.18, 2006), (Final CAP Investigatory Order), at 6-7.
II. HISTORY
NFG submitted its Proposed 2014-2016 USECP on May 28, 2013. On January 9, 2014, the Commission entered a Tentative Order, tentatively approving NFG’s Proposed USECP for 2014-2016, subject to a compliance filing, but requested comments on the Proposed USECP. OCA, PULP, and NFG individually filed Comments on February 10, 2014. OCA and NFG individually filed Reply Comments on February 20, 2014.
On April 8, 2014, the Commission’s Bureau of Consumer Services (BCS) requested Additional Information regarding discrepancies found in the Low Income Usage Reduction Program (LIURP) needs assessment in NFG’s Proposed 2014-2016 USECP. On April 16, 2014, NFG filed and served Additional Comments in response to the BCS Request for Additional Information.
On May 22, 2014, the Commission entered its Final Order, directing NFG to amend its Plan and to make a compliance filing within 30 days. On June 6, 2014, PULP filed a Petition for Reconsideration and/or Clarification (Petition for Reconsideration), which requested clarification and reconsideration of issues allegedly overlooked by the Commission in the Final Order. On June 16, 2014, NFG filed an Answer to the Petition. OCA did not file a pleading relative to the Petition. Pursuant to Rule 1701 of the Pennsylvania Rules of Appellate Procedure, Pa. R.A.P. Rule 1701, Pa. R.A.P. Rule 1701(b)(3), the Commission granted the PULP Petition for Reconsideration on June 19, 2014, to preserve jurisdiction pending review of, and consideration on, the merits of the PULP Petition for Reconsideration. On June 23, 2014, NFG filed a letter requesting a stay of the requirement to file a revised 2014-2016 USECP (i.e., the compliance filing), pending the outcome of the PULP Petition. On July 24, 2014, the Commission granted NFG a stay on submitting its compliance filing until the Commission addressed the PULP Petition for Reconsideration on its merits.
On June 30, 2014, the Pennsylvania Department of Public Welfare, nka the Department of Human Services (DHS), filed a letter (DHS Letter) at this docket but did not serve any of the parties. DHS did not petition to intervene. On July 16, 2014, NFG filed a Motion to Strike the DHS Letter and/or Allow Time for Response.
On August 5, 2014, by Secretarial Letter, the Commission provided an opportunity for the parties to provide comments and reply comments relative to the DHS Letter. On August 18, 2014, NFG, OCA, and PULP individually filed comments relative to the substance of the DHS Letter. On August 25, 2014, NFG and PULP individually filed reply comments.
On February 12, 2015, the February Reconsideration Order was entered, granting the PULP Petition for Reconsideration to clarify that parties would be permitted to file comments on (1) the new information to be included in NFG’s compliance filing and (2)whether the compliance filing met the requirements of the May 22, 2014 Final Order. We directed NFG to submit its compliance filing within 30 days of the entry date of the February Order. February Reconsideration Order at 22.
On March 16, 2015, NFG submitted a compliance filing. On March 26, 2015, PULP filed comments. On March 31, 2015, NFG filed reply comments and a Second Revised 2014-2016 Plan.
III. DISCUSSION
We shall first review NFG’s compliance with the February Reconsideration Order and then discuss the two issues raised in PULP’s comments.
1. NFG’s Compliance Filing
In the February Reconsideration Order, we directed NFG to provide new information as part of its compliance filing relative to the following:
· (a) How NFG adjusts a LIRA[2] payment, as compared to the calculation of an affordable bill for a household with a LIHEAP[3] grant assigned to NFG, when a household assigns a LIHEAP cash grant to another utility, and (b) How it adjusts a LIRA payment when a household fails to apply for or fails to receive a LIHEAP grant.
· The needs assessment for NFG’s Neighbor for Neighbor (NFN) Heat Fund (i.e., its Hardship Fund) program for the 2014-2016 USECP.[4]
February Reconsideration Order at 22.
In its March 16 compliance filing, NFG addressed both issues.
First, NFG introduced language in its Plan to explain that the LIRA billed amount is not changed if the customer either fails to apply for a LIHEAP grant or assigns the grant to another utility or energy/fuel provider.
LIRA participants are expected, based on LIRA eligibility, to also be eligible for a LIHEAP grant and are required to apply for such grants every year. Currently, if a LIRA participant fails to apply for or receive a LIHEAP grant, the Company allows the LIRA participant to continue to receive the benefits of the LIRA program, provided they meet all other LIRA eligibility criteria. The participant’s discount calculation, however, will continue to include the LIHEAP grant in its design. The LIRA participant is responsible for appropriately applying for any LIHEAP grant.
If a LIRA household is primarily heated by natural gas, the Company expects to be listed as the primary fuel source for the LIHEAP grant. LIRA participants are responsible for best utilizing LIHEAP grants in accordance with their home energy requirements and Customer Assistance Programs. If a participant does not direct a LIHEAP grant to the Company though, the Company will allow the participant to continue to receive the same LIRA benefits and pay the same rates as those participants who have directed their payments to the Company.
NFG Revised 2014-2016 Plan at 16. This issue was not further addressed in the Second Revised Plan.
Second, NFG’s compliance filing included a needs assessment for its NFN program that identifies, separately, the estimated customer population over the age of 62[5] and households with individuals who may be receiving unemployment benefits.[6] Based on these estimates, NFG reports that at least 40,211 households may be eligible for NFN based on age and 12,458 households may be eligible due to receipt of unemployment benefits. NFG Revised 2014-2016 Plan at 34-35.
NFG’s proposed Plan included a clear statement of the NFN budget and where the NFN funds come from, who is potentially eligible for NFN assistance, how applicants are identified, and how they are screened by third-party service organizations. NFG explains in the revised Plan that it works with community-based organizations to determine NFN eligibility on a case-by-case basis and that eligible households do not need to be customers of NFG to qualify for a NFN grant. NFG Revised 2014-2016 Plan at 33-34. This issue was not further addressed in the Second Revised Plan.
Resolution: On the first point, NFG has explained that LIRA customers who do not apply for a LIHEAP grant or who direct that grant to another energy entity will still be billed by NFG in the same manner as a customer who has directed a LIHEAP grant to NFG. This information clarification addresses the concerns we raised on this point in the Final Order.
On the second point, we find that by identifying the portion of the estimated elderly customer population – as well as those households with individuals who may be receiving unemployment benefits – NFG has identified a base population that may be in need of NFN grants within its service territory. NFG has also explained its method of calculating its Needs Assessment. This information addresses the concerns we raised on this point in the Final Order.
Accordingly, we find that NFG has complied with the February Reconsideration Order by providing all requested information in its March 16 compliance filing.
2. PULP’s Issues
Arrearage Forgiveness – In the Final Order, NFG was directed to provide 1/24th arrearage forgiveness for each full and timely LIRA payment, regardless of existing arrears, by or before filing its next triennial Plan. Final Order at 20-21 and 46. In its March 16 compliance filing, NFG confirms that it currently applies arrearage forgiveness for full and on-time payments, regardless of existing LIRA arrears, but LIRA customers who move to a new address must pay all arrears before arrearage forgiveness can continue at the new residence. In particular, NFG states that:
When a LIRA customer moves to a new address and has paid all previous LIRA monthly bills, the remaining months for arrearage forgiveness can be utilized at the new address.
Revised 2014-2016 Plan at 15, emphasis added.
In its Comments to the March 16 compliance filing, PULP asserts that NFG’s description regarding how arrearage forgiveness is applied to customers who move to a new address is not consistent with the Commission’s May 22, 2014 Final Order. PULP Compliance Filing Comments at 2. PULP contends that the sentence quoted above allows LIRA customers who move to a new address to be treated differently than other LIRA customers by requiring them to pay all prior arrears before they can receive further arrearage forgiveness. PULP also avers that this requirement is not consistent with the directive in the May 22, 2014 Final Order. PULP requests that the Commission direct NFG to apply arrearage forgiveness equally to all LIRA customers and remove the highlighted language from its Plan. PULP Compliance Filing Comments at 3.
In its Reply Comments, NFG has agreed to remove the highlighted language from this sentence, and its Second Revised 2014-2016 Plan filed on March 31, 2015, reflects this revision:
When a LIRA customer moves to a new address, the remaining months for arrearage forgiveness can be utilized at the new address.
Second Revised 2014-2016 Plan at 15.
Resolution: We agree that NFG has articulated no reason to treat customers who move differently from customers who remain in a given residence. NFG now proposes to treat both sets of customers in a like manner. The Commission accepts NFG’s revision and finds this revised sentence and NFG’s current arrearage forgiveness policy to be in compliance with the May 22, 2014 Final Order.
LIURP Needs Assessment – The May 22, 2014 Final Order directed NFG to revise the number of estimated households in need of future weatherization to clarify a numerical discrepancy. That Order did not direct NFG to change the way NFG designated those households. Final Order at 37; February Reconsideration Order at 3-4 & 13.
In its Comments to the March 16 compliance filing, PULP notes that, consistent with the May 22, 2014 Final Order, NFG has revised the number of households who are in need of future weatherization from 11,300 to 13,695. PULP contends, however, that NFG’s revised LIURP needs assessment still excludes potentially eligible households because of “outdated, incomplete, and inappropriate criteria.” PULP Compliance Filing Comments at 3.
Specifically, PULP notes that the LIURP needs assessment appears to exclude any household which previously received weatherization services or was determined ineligible for those services at any time. PULP submits that NFG should have more reasonable and specific criteria to determine ineligible customers, such as customers who have received weatherization services within the past seven years. Further, PULP argues that households that have received only low-cost or no-cost treatment should not be excluded from future eligibility. Finally, PULP contends that households which have been rejected from LIURP at some point in the past should not be permanently excluded from the program. PULP recommends that a reasonable percentage (33-50%) of rejected households be counted as eligible and in need of LIURP services. PULP Compliance Filing Comments at 3-4.