Kcc considering accelerated gas pipeline replacement program

Fourteen hours of testimony and questioning this week added to hundreds of pages of filed documentation, designed to give the Kansas Corporation Commission information to make a decision that may impact natural gas rates for customers across the state.

It is unclear yet whether the KCC will agree to the gas companies’ request to add a new line-item charge to gas bills to cover capital costs associated with replacing obsolete pipe in Kansas. 76 gas card payment To be specific — 5,300 miles or 23 percent of gas pipe in the Sunflower State is considered aging or has been determined to present a safety risk.

The state hasn’t experienced the deadly explosions caused by obsolete pipes that other states have seen. Grade 6 electricity quiz But David Springe, executive director of the National Association of State Utility Consumer Advocates, said every state is facing the same situation. C gastritis im antrum Springe was formerly the attorney for the Citizens Utility Ratepayer Board in Kansas, which advocates before the KCC for utility residential and small business customers.

“Suddenly, across all utility spectrums — water, natural gas, electric — suddenly everybody seems to have woke up about 10 years ago and said, ‘Oh my goodness, look at our systems,’ ” Springe said. Grade 9 static electricity quiz “Honestly, I think there’s something of absolute reality that our infrastructure has probably been underinvested in.

That question lies at the heart of what utility consumer advocates bring to the table in the national discussions that are happening to determine whether pipe replacement needs to be accelerated, and who needs to bear the cost of that acceleration.

“Up to about 10 years ago, you had growing sales. O gastronomo And so, growing sales and growing revenues tend to cover up a lot of things,” Springe said. Gas in texas “Then with big recession, a lot of utility sales have really stopped growing, and some have started decreasing. Electricity vampires So suddenly, you’ve got investments that you have to make in the system, but you don’t have growing revenues to cover it. Electricity and magnetism ppt If you’re not growing revenue through sales in a regulated utility model, you grow through building capital projects and putting them in rate base. Electricity production in china That’s the only other way you get bigger.”

Kevin L. Electricity dance moms full episode Beicke, director at New York’s Fitch Ratings Inc., put out a news release in January pointing out that local natural gas distribution companies are the biggest growth vehicle in the utilities sector.

“Many state regulatory commissions have helped LDCs with their safety and reliability goals by implementing infrastructure replacement riders that allow utilities to add certain pipeline replacement costs to rate base without the need to go through a general rate case,” Beicke said in a release. Gas appliance manufacturers association “These riders enable LDCs to minimize regulatory lag and start earning a return on approved capital investments in a timelier manner. Gas prices going up 2016 These LDCs are thus better able to maintain their generally strong financial profiles.”

Andrea Crane, a CURB consultant, testified Thursday that Kansas gas company shareholders definitely benefit from increased capital expenditures. Electricity generation by source In her filed testimony, she said Atmos promoted its stock in a November 2015 presentation to security analysts, pointing out that it receives earnings “on over 90 percent of annual Capex within 6 months.”

“The company’s presentation made it clear that its earnings growth through 2020, which is projected to increase from $3.05 per share in 2015 to $4.10-$4.40 range, was being driven directly by increases in its rate base,” Crane testified. Gas in oil pressure washer “In addition, Atmos presented Kansas as a jurisdiction with a 7-12 month lag except for plant recovered through the GSRS, which it identified as having only a 1-6 month lag.

“Atmos’ presentation shows that since implementing a ‘Growth Though Infrastructure Investment Strategy,’ its total shareholder return has been 79.6 percent, above the peer group’s growth of 70.0 percent,” she added in the written testimony.

“Plant” refers to infrastructure investment, and the issue of regulatory lag is a critical one KCC will address in its decision-making with regard to the alternative rate-making mechanism requests.

Regulatory lag is “a time between when the utilities spend money and when they get a return on that money through a rate case or some type of rate mechanism that is approved,” said David Nickel, CURB consumer counsel.

The three utilities argued for decreasing regulatory lag, talking about how long they currently have to carry costs associated with expenditures, a burden that affects the company’s revenues.

“Ms. Origin electricity login Crane’s absolutely right that these regulatory programs that we’re talking about will be beneficial to the shareholders of these companies,” said Justin Grady, KCC’s chief of accounting and financial analysis. British gas jokes “My recommendation would be that we help ensure it’s not too beneficial. Power vocabulary words Right now, I’m not worried that these companies are proposing these investments simply to pump rate base and grow investments, but if these utilities were completely insulated from the earnings effects of the additional capital expenditures, then you could have that concern.”

Robert Amdor, regulatory services manager for Black Hills, defended the promotion of revenue that will be earned through capital expenditures.

“I think we need to understand the context of how those charts are included in the 10K reports,” he said. Y gasset “In Kansas, Atmos and Black Hills are rural with aged infrastructure. 5 gases that come from car emissions Why would any investor want to put money into a company when the infrastructure is going to have to be replaced without any earnings? In this context, it might sound negative, but the reality is, that’s how capital is raised.”

Of the three companies, Atmos faces the most significant pipe replacement program, with about 40 percent of its mains and service lines considered obsolete.

Each gas company currently has capital expenditure programs in place, with testimony indicating Kansas Gas Service has the most aggressive program. Gas in back shoulder Being a larger company, KGS also gets more money from the GSRS, or the Gas System Reliability Surcharge, rider, which was passed by the Kansas Legislature in 2006 to allow gas companies to decrease regulatory lag and recover capital expenditures. Power definition physics electricity In testimony, KGS was the only company that indicated an accelerated gas replacement program may not be in order, given that there are natural limitations based on employee and contractor levels. Electricity test physics The company would, however, like to see an alternative rate-making mechanism.

In testimony asking for an accelerated recovery mechanism, gas companies testified that the GSRS has limits — for example, it is statutorily limited to 40 cents per month per customer and includes limits on what types of investment it covers.

The companies have asked KCC for a SIP, or System Integrity Program, which would probably appear as a separate line item on a customer’s bill, depending upon what the commissioners would decide, according to Samir Arif, KCC spokesman.

One positive of the SIP plan being promoted by utilities is that it has been presented as a five-year pilot program, which Grady said offered leeway to the commission to oversee what the utilities are doing, whether they are completing projects as promised and to adapt to conditions over time.

The intricacies of the rate-making mechanism that may be put in place are tied into philosophical questions about who bears the burden of such massive infrastructure replacement.

Springe, looking nationally at the landscape and with his in-depth knowledge of the Kansas process, said, the GSRS was passed to give the companies an option to reduce regulatory lag associated with capital expenditures. Electricity in india voltage In the hearings this week, commissioner Jay Emler and Pat Apple were both in the Kansas Legislature when that was debated.

“We were told the very same things — if you pass the GSRS, we won’t have all those expensive rate cases,” he said of what the Legislature was told and added that it didn’t happen.

Apple said he is concerned that a surcharge with an automatic increase on ratepayers, which could occur up to four times a year based on the Atmos proposed plan, appeared “to me to be a major departure from traditional ratemaking.”

“It seems to be very favorable to the utility company to have that type of benefit and regulated environment,” he said. Gas near me now But if the commission adapts the proposed plans, they can end up looking a lot like the GSRS.

“I don’t see much difference,” Apple said. Gas pump emoji “As a commissioner, I’m concerned that we take a cap that was placed by the Legislature at 40 cents per month per year and if we expand that, it may be legal, but I don’t think it would be the right thing to do. Gas in oil tank So if we’re going to have something that has a different purpose and a different look to it, I think would be very helpful.”

In looking at mechanisms, Springe wondered why regulatory boards nationwide aren’t looking at something different than alternative rate-making mechanisms.

“Here’s the philosophical question, if we’ve got to take the moon shot per se, and we have the cheapest debt in history, why don’t we use debt?” he said. Npower electricity meter reading “Take the whole questions of earnings out of it; do it with 100 percent debt.”

Springe wondered if the utiltiies were told they could do the accelerated replacement plans but only funded with 100 percent debt, whether some might decide not to do the upgrades.

CURB witness Ed McGee, a chemical engineer and consultant, testified that given a declining or flatlined rate of gas incidents — which include deaths, injuries that require hospitalization and a certain level of property damage — an accelerated program isn’t necessary.

“We recognize that there is a benefit to proactive replacement of pipes versus reactive, as they were defined in the hearing,” he said. Electricity per kwh calculator “With proactive, we do recognize that there can be economies of scale with regard to proactive replacement of pipes.”

“Regardless of where the blame is given, it should never be given to the ratepayer,” he said. K electric share price forecast “The ratepayer simply should not be penalized by virtue of the fact that the utilities or staff or whoever failed to maintain these pipelines over time.”