SALT LAKE CITY — The Utah Public Service Commission on Oct. 15 heard sworn testimony supporting a phase 1 settlement in the general rate case filed by Enbridge Gas Utah that would set the utility’s Utah distribution non‑gas revenue requirement at $604,000,000 — a $62,000,000 increase compared with current revenues.

The settlement stipulation, described at the hearing as a “black box” agreement, specifies the total revenue requirement and several limited terms but does not itemize the company’s individual accounting adjustments or a specific allowed return on equity. “This means that while the total revenue requirement is agreed upon, the stipulation does not specify individual adjustments or cost components,” said Austin Summers, director of regulatory and pricing for Enbridge Gas Utah, as he summarized the settlement on the record.

The stipulating parties asked the commission to admit prefiled phase 1 testimony and the settlement exhibit into the record; the commission admitted the testimony and exhibits without objection. Division of Public Utilities witness Eric Orton, the Office of Consumer Services witness Allison Anderson, and intervenor witnesses including Justin Bieber (for the Utah Association of Energy Users) each testified that, based on their analyses, the stipulated $604 million revenue requirement is a just and reasonable result.

Why it matters: the settlement would resolve phase 1 issues now and leave phase 2 matters — including cost allocation, rate design and other tariff changes — for later litigation. The settlement also includes two procedural and substantive items the parties highlighted: modified depreciation rates proposed by the Office of Consumer Services’ witness David Garrett (to take effect if the commission approves the stipulation), and continued use of the commission‑authorized rate used in the prior 2022 general rate case when calculating certain tracker mechanisms and WexPro II agreements.

Key terms and positions
- Total revenue requirement: the stipulation specifies a Utah distribution non‑gas revenue requirement of $604,000,000 based on an average test period ending Dec. 31, 2026, which parties said represents roughly a $62,000,000 increase over current revenues. Enbridge’s original verified application requested a higher total (filed at about $657,000,000). Summers said the $604,000,000 figure “is lower than the company's original proposal, and it falls within the range of outcomes supported by testimony from the division, the Office of Consumer Services, UAE, and FDA.”

- Depreciation: the stipulation adopts modified depreciation rates as proposed by Office of Consumer Services witness David Garrett and included in the settlement exhibit.

- Trackers and WexPro II: for purposes of calculating revenue associated with the infrastructure rate adjustment tracker, the rural expansion tracker and WexPro II agreements, the stipulation calls for the continued use of the commission‑authorized return (historically implemented using a 9.6% return component in those mechanisms). Witnesses clarified that the trackers allow the company to request interim recovery for investment that exceeds amounts already included in the agreed‑upon revenue requirement.

- Black‑box structure and reporting: parties emphasized the settlement sets only the overall revenue requirement and certain items; it does not adopt or reject individual proposed adjustments or specify a new overall cost of capital. Summers said the company will continue to report its actual return on equity biannually under existing reporting procedures so the commission and parties can monitor results, but the stipulation does not create a specified allowed ROE for the revenue requirement itself.

Party positions and evidence
- Enbridge (counsel Jennifer Clark and witness Austin Summers) moved to admit prefiled settlement testimony and exhibits; Summers summarized the settlement process, referenced roughly 500 data requests and technical conferences, and stated the stipulation is “in the public interest and is just and reasonable in result.”

- Division of Public Utilities (witness Eric Orton) testified the division supports commission approval, saying in part, “The division concludes that the stipulation is just and reasonable in result and leads to just and reasonable rates for Utah rate payers.”

- Office of Consumer Services (witness Allison Anderson) similarly recommended approval, stating the settled revenue requirement “falls within that reasonable range and therefore is just and reasonable in result.”

- Utah Association of Energy Users (witness Justin Bieber) testified the stipulated revenue requirement is close to UAE’s recommended outcome and provided illustrative calculations showing comparable results under certain ROE and depreciation assumptions.

- Federal Executive Agencies (represented by Captain Michael A. Rivera) submitted testimony from Michael Gorman and did not oppose the stipulation; Gorman recommended a lower range for a fair ROE (9.25%–9.8%, with a midpoint of 9.5%) and opposed the company’s proposed 53% equity ratio for rate‑making purposes.

Proceedings and next steps
Commission staff and commissioners questioned witnesses about how the black‑box structure will affect accounting and future interim tracker requests, including whether amounts included in the stipulated $604 million would earn a stated return before the next general rate case (witnesses said amounts included for the test period would not carry a stated return, while incremental amounts requested later under the trackers would be calculated using the specified tracker return component).

Commissioners Clark and Harvey both indicated they intended to support an order approving the stipulation. Chairman Finn expressed reservations about black‑box settlements in open session, saying, “I don't like black box settlements,” and noting concerns about the commission not having access to all underlying details. The hearing record did not include a final commission vote on approval; the matter remains for the commission’s formal decision.

What the record does not show
The hearing admitted testimony and exhibits; the record contains no final, signed commission order approving the settlement in the excerpts heard at this session. The stipulation reserves phase 2 issues for further consideration and does not bind the commission on future rate‑making choices.

Ending note
Parties asked the commission to adopt the phase 1 settlement stipulation into the evidentiary record and the commission admitted the testimony and exhibits. The commission will need to issue a formal decision to accept, modify, or reject the stipulation; participants cautioned that the black‑box structure leaves open how specific accounting and return elements will be reflected in future filings or a subsequent general rate case.