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PSC authorizes consolidated gas service rate and revised RNA targets for Chesapeake Utilities
Summary
The Public Service Commission approved Chesapeake Utilities of Maryland's consolidated gas service rate methodology, closure of two dockets upon final ACA orders, revised revenue-normalization targets for Sandpiper, and tariff pages enabling a consolidated GSR effective Sept. 10, 2025.
The Public Service Commission voted unanimously Sept. 10 to authorize Chesapeake Utilities of Maryland to consolidate its gas service rate (GSR) calculation across three legacy companies, adopt staff-recommended fixed-capacity allocation factors, accept revised revenue-normalization adjustment (RNA) targets for Sandpiper service areas, and file consolidated tariff pages with an effective date of Sept. 10, 2025.
Staff recommended consolidation after the commission’s Phase 2 final order in Chesapeake’s prior rate case directed assignment and transfer of franchises and approved tariff consolidation. Staff said the revised GSR must not produce materially different revised factors for the three companies compared with before consolidation; to achieve that, staff recommended allocating the 2024 Eastern Shore Natural Gas fixed-capacity invoices ($11,170,000 total) as follows: Elkton Gas Company $1,470,000 (13.2%), Chesapeake Utilities Maryland division $7,510,000 (67.2%) and Sandpiper Energy $2,190,000 (19.6%). Staff told the commission that using the same projected fixed charge across legacy service areas would produce materially different rates because the Maryland division’s projected fixed cost and forecasted sales volumes differ from Sandpiper’s.
Staff also recommended and the company agreed to refine the RNA targets for Sandpiper’s residential classes by using class-specific monthly usage profiles for RES-1 and RES-2 rather than a consolidated systemwide residential profile, reflecting Sandpiper’s distinct seasonal usage pattern driven by summer tourism in Ocean City. Mark Riley, representing commission staff, presented the staff recommendations. Brian Quinn, representing Chesapeake Utilities, said the company agreed with staff’s recommendations and was available to answer questions.
The commission approved four motions recorded in the meeting: (1) authorize consolidation of the GSR calculation applying fixed-capacity allocations as recommended by staff; (2) authorize closure of case dockets 9513 (Chesapeake Utilities, Maryland Division) and 9514 (Sandpiper Energy) upon issuance of a final actual cost adjustment (ACA) order for those utilities; (3) authorize use of RNA targets for the GS-1 customer class as described in mail log 03/1420 and accept staff’s revised RES-1 and RES-2 targets based on each class’s annual usage profile; and (4) accept Chesapeake’s tariff pages to enable the company to assess a consolidated GSR effective Sept. 10, 2025. Commissioners voting “aye” were Commissioner McLean, Commissioner Litton, Commissioner Suchman and Commissioner Barbay.
The staff presentation and the company’s agreement make the consolidated GSR a compliance filing consistent with the prior rate-case order; the commission’s approvals are contingent on any final ACA orders and the mechanical implementation of the consolidated tariff pages.
