Enbridge Gas outlines Phase 2 rate-case drivers and conservation-tariff accounting at Utah PSC technical conference

Enbridge Gas told Utah Public Service Commission staff and stakeholders at a technical conference that the company’s Phase 2 general rate case request is driven primarily by a $51,000,000 increase in rate base, a proposed rise in allowed return on equity from 9.6% to 10.6% (about $22,000,000), a $20,000,000 increase tied to depreciation, and a change in capital structure from about 51% to 53% equity (about $6,000,000).

The company’s presenter described the revenue requirement as “the whole pie,” meaning the total dollar amount the utility says it needs to recover, and said cost‑of‑service studies then allocate that total to customer classes. “When we’re looking at revenue requirement, it is every cost to run the utility,” the Enbridge presenter said, listing mains, service lines, meters, vehicles, buildings and salaries as examples.

Why it matters: the allocation and rate design choices determine which customer classes absorb those increases and how much of the recovery is fixed (basic service fees) versus volumetric (per‑dekatherm charges). Stakeholders at the conference focused heavily on two linked issues: (1) how the company allocates specific mains and large assets across classes and (2) how the Conservation Enabling Tariff (CET) and weather normalization affect collections and future rates.

Cost allocation and NGV discussion Enbridge explained that mains are split into small‑diameter mains, large‑diameter mains (8 inches and above, not high pressure) and feeder lines (8 inches and above, steel, high pressure). The company said allocators vary by asset: small mains use a customer/plant allocator, large mains lean on throughput, and feeder lines are allocated by a 60/40 blend of design‑day and throughput. The presenter pointed listeners to exhibit 5.14u and exhibit 5.02 in the filed model for line‑by‑line allocations.

The conference included a focused exchange about the company’s NGV (compressed natural gas vehicle) class. Staff and intervenors were told Enbridge has proposed a subsidy for part of that class because usage at CNG stations has declined. The presenter said selling stations was considered but has proved infeasible in many cases because stations are owned by other entities that can choose to close rather than accept a new owner; the company said it currently has no finalized timetable for any alternative. “We are trying to figure out different solutions … the subsidy is kind of our best thought or best shot at this class right now,” the Enbridge presenter said. No sale of stations was promised and no final PSC action was taken during the technical conference.

Rate design and customer charges Enbridge described rate design elements it uses: four basic service fee tiers based on meter capacity (the company proposed no change to the settled basic service fees in this filing), administrative fees for transportation customers, demand charges for reservation of pipeline capacity in transportation classes, and volumetric rates (the final step after fixed charges are set). The presenter emphasized volumetric rates are calculated last to recover the remaining revenue requirement.

Conservation Enabling Tariff (CET) and weather normalization A substantial portion of the session covered the CET (full revenue decoupling) and the company’s proposal to change the weather normalization baseline used in monthly billing. Enbridge traced the CET’s origin to a 2006 settlement approved by the commission and noted that the program was removed from pilot status in a 2009 rate case. The presenter said the intent of decoupling was to remove a disincentive to pursue energy efficiency when most revenue is volumetric.

The company reported that Thermwise programs and other incentives have produced measurable annual and lifetime dekatherm savings; the presenter said roughly half of customers have participated and that the company paid about $1,400,000 in rebates (as filed). Enbridge also reported a net aggregate over‑collection in the CET account of about $42,000,000 through the period discussed; the presenter said that reflected actual usage coming in higher than the test‑year forecasts used to set allowed revenue.

On weather normalization, Enbridge proposed moving the baseline from a 20‑year normal (the average heating degree days used previously) to a 10‑year normal (the 10 years ending 2024). The company said recent winters have been unusually warm compared with long‑run history and that a shorter, more recent normal would better reflect the conditions experienced during the period used to set test‑year revenue. “We are in the stretch of very warm winters,” the presenter said while describing why the shorter baseline was proposed. The company and division analysts both noted that shortening the baseline increases sensitivity to short‑term swings but argued it would reduce a persistent upward bias in monthly weather normalization adjustments that had produced frequent CET upward adjustments in recent years.

Forecasting and modeling questions Division staff and intervenors pressed the company’s forecasting approaches. The division’s analyst who reviewed the usage forecast described using multiple time‑series and econometric approaches (state‑space models, autoregressive integrated moving averages and other dynamic methods) and explained the difference between top‑down statistical forecasting and the billing‑system’s bottom‑up, customer‑by‑customer weather normalization. The division analyst cautioned that billing‑system weather normalization uses simple averages of degree‑day responses for each customer’s billing period and can produce month‑to‑month volatility that is difficult to match with a long‑run statistical forecast. One participant summarized the issue as a trade‑off between model functional form and short‑run variability; the division analyst said they use a blend of methods to gain confidence.

What was not decided No formal PSC order or vote was taken at the technical conference. The meeting functioned as an evidentiary and informational session: Enbridge summarized exhibits and modeling choices, staff and intervenors asked clarifying questions, and the division and Office of Consumer Services described measurement and normalization approaches. The company characterized many items as proposals for the commission’s review in the rate‑case record; commission staff and the division requested further model detail and the company pointed to exhibits and testimony in the docket for granular inspection.

Next steps and context Participants repeatedly requested or were offered more detailed model runs, including a commission‑ordered compliance model that would apply the prior commission order (docket 22‑05703) to the current model; the company said no public compliance model was available but that it had internally reproduced the prior order for comparison. The technical conference closed with agreement that intervenors and staff would review the filed exhibits and follow up with data requests or testimony for the evidentiary record. The company and division signaled they could provide additional charts (for example non‑weather‑normalized series and median usage series) after the session.

No formal decision was reached at the conference; disputed modeling choices and the CET weather‑normalization baseline remain matters for the commission to resolve in the docket.