Today, the Florida Public Service Commission (PSC) approved a Settlement Agreement offered by Peoples Gas System (Peoples Gas or Company) and the Office of Public Counsel (OPC), who represents Peoples Gas customers, that keeps base rates in place through 2020.
“The Settlement Agreement protects customers from any base rate increase through 2020,” said PSC Chairman Julie Brown. “It also provides an opportunity for Peoples Gas to manage some critical projects, such as the environmental cleanup of its manufactured gas plants and replacement of plastic pipes.”
The Settlement Agreement stemmed from Peoples Gas’ original petition for approval of its 2016 Depreciation Study. OPC filed its response, proposing further adjustments to Peoples Gas depreciation rates. On December 15, 2016, Peoples Gas and OPC filed a Settlement Agreement outlining how their proposed adjustment of depreciation rates and modification to the Company’s return on equity would occur. With the PSC’s approval, the agreement allows for the following terms:
• Peoples Gas will not file a request for a general base rate proceeding before December 31, 2020, unless its earnings fall below 9.25 percent.
• Establishes new depreciation rates and certain depreciation reserve transfers that are expected to result in a reduction in 2016 depreciation expense of $16.1 million.
• Accelerates recovery of environmental cleanup and monitoring costs associated with former manufactured gas plants--old industrial facilities at which gas was produced from coal, oil, and other feedstocks.
• Expands Peoples Gas’ current accelerated cast iron and bare steel pipe replacement program to include “problematic plastic pipe” replacements, which includes certain types of plastic pipe that was manufactured before 1983 and which have been found to become brittle under certain conditions.
Peoples Gas, Florida’s largest natural gas distribution utility, serves about 370,000 customers in Florida.
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