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Dominion transition services increased 2024 affiliate costs; Enbridge told PSC it will phase them out by 2026
Summary
Commissioners and staff pressed Enbridge and company witnesses about affiliate labor, the transition services agreement (TSA) with Dominion Energy and how post-sale costs were recorded in 2024 and into the test period.
Commissioners and staff pressed Enbridge and company witnesses about affiliate labor, the transition services agreement (TSA) with Dominion Energy and how post-sale costs were recorded in 2024 and into the test period.
Enbridge told the Utah Public Service Commission that after the company’s acquisition, Enbridge Inc. did not allocate corporate costs to its new U.S. utility subsidiaries in 2024. At the same time, Dominion Energy continued to provide essential services under a TSA, and those TSA charges flowed to Questar Gas as affiliate labor and overhead in the 2024 actuals. The difference between budgeted and actual affiliate labor in 2024 was largely explained by the continuing TSA charges, the company said.
Why it matters: TSA charges and whether parent corporate allocations are included in the test period affect the utility’s expense base and thus the revenue requirement the commission will consider in setting rates.
Enbridge staff told the commission that the company expects to transition off Dominion-provided services in phases and aimed to be fully unwound from Dominion Energy services by the end of 2026. The company said many functions have already moved or are in process (customer service and operations were cited as largely moved), while accounting, human resources and some IT functions remain to be migrated. The company said treasury and forecast tools are used to model allocations once Enbridge applies its own allocation methodology.
Commissioners also asked about contractual penalty language for late TSA unwinding and whether Enbridge would be responsible for such penalties; the company noted penalties were part of the TSA arrangements and that the objective is to complete the transition on schedule.
Ending: staff said the company provided an adjustment in its model to reflect what corporate allocations would have looked like under Enbridge for 2024, and the commission flagged the TSA unwind and associated costs as an issue to watch in future filings and technical conferences.
