Program (“SHARP II”)€¦ · 44 South Clinton Avenue, 3rd Floor P. O. Box 350 Trenton, NJ...
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520 Green Lane Union, NJ 07083 T: (908) 662-8448 F: (908) 662-8496 Deborah M. Franco, Esq. Regulatory Affairs Counsel July 15, 2019 Aida Camacho-Welch, Secretary Board of Public Utilities 44 South Clinton Avenue, 3rd Floor P. O. Box 350 Trenton, NJ 08625-0350 Re: In the Matter of the Petition of South Jersey Gas Company for Approval of Base Rate Adjustments Pursuant to the Storm Harding and Reliability Program (“SHARP II”) BPU Docket No GR19040529 Dear Secretary Camacho-Welch: With regard to the above-referenced matter, enclosed herewith are an original and two (2) copies of South Jersey Gas Company’s 12&0 Update Schedules. Please do not hesitate to contact me with any questions you may have. Thank you for your attention to this matter. Respectfully, Deborah M. Franco DMF:caj Enclosures cc: Service List (with enclosures)
Transcript of Program (“SHARP II”)€¦ · 44 South Clinton Avenue, 3rd Floor P. O. Box 350 Trenton, NJ...
520 Green Lane Union, NJ 07083
T: (908) 662-8448 F: (908) 662-8496
Deborah M. Franco, Esq. Regulatory Affairs Counsel
July 15, 2019
Aida Camacho-Welch, Secretary Board of Public Utilities 44 South Clinton Avenue, 3rd Floor P. O. Box 350 Trenton, NJ 08625-0350
Re: In the Matter of the Petition of South Jersey Gas Company for Approval of Base Rate Adjustments Pursuant to the Storm Harding and Reliability Program (“SHARP II”) BPU Docket No GR19040529
Dear Secretary Camacho-Welch: With regard to the above-referenced matter, enclosed herewith are an original and
two (2) copies of South Jersey Gas Company’s 12&0 Update Schedules.
Please do not hesitate to contact me with any questions you may have. Thank you for your attention to this matter.
Respectfully,
Deborah M. Franco DMF:caj Enclosures cc: Service List (with enclosures)
IN THE MATTER OF THE PETITION OF SOUTH JERSEY GAS COMPANY FOR APPROVAL OF BASE RATE ADJUSTMENTS PURSUANT TO THE
STORM HARDENING AND RELIABILITY PROGRAM (“SHARP II”) DOCKET NO. GR19040529
SERVICE LIST
NJ BOARD OF PUBLIC UTILITIES Aida Camacho-Welch, Secretary NJ Board of Public Utilities 44 South Clinton Avenue, 3rd Floor P. O. Box 350 Trenton, NJ 08625-0350 [email protected] Stacy Peterson Division of Energy NJ Board of Public Utilities 44 South Clinton Avenue, 3rd Floor P. O. Box 350 Trenton, NJ 08625-0350 [email protected] Kevin Moss NJ Board of Public Utilities 44 South Clinton Avenue, 3rd Floor P.O. Box 350 Trenton, NJ 08625-0350 [email protected] Ryan Moran NJ Board of Public Utilities 44 South Clinton Avenue, 3rd Floor P. O. Box 350 Trenton, NJ 08625-0350 [email protected] Heather Weisband NJ Board of Public Utilities 44 South Clinton Avenue, 3rd Floor P. O. Box 350 Trenton, NJ 08625-0350 [email protected]
DIVISION OF RATE COUNSEL Stefanie A. Brand, Esq., Director Division of Rate Counsel 140 East Front Street, 4th Floor P.O. Box 003 Trenton, NJ 08625 [email protected] Felicia Thomas-Friel, Esq. Division of Rate Counsel 140 East Front Street, 4th Floor P.O. Box 003 Trenton, NJ 08625 [email protected] Brian O. Lipman, Litigation Manager Division of Rate Counsel 140 East Front Street, 4th Floor P.O. Box 003 Trenton, NJ 08625 [email protected] Maura Caroselli, Esq. Division of Rate Counsel 140 East Front Street, 4th Floor P.O. Box 003 Trenton, NJ 08625 [email protected] Shelly Massey Division of Rate Counsel 140 East Front Street, 4th Floor P.O. Box 003 Trenton, NJ 08625 [email protected]
- 2 - RATE COUNSEL CONSULTANTS Robert J. Henkes Henkes Consulting 7 Sunset Road Old Greenwich, CT 06870 [email protected] DIVISION OF LAW Alex Moreau, Esq. Deputy Attorney General Dept. of Public Law & Public Safety Division of Law P. O. Box 45029 Newark, NJ 07101 [email protected] Renee Greenberg Deputy Attorney General Dept. of Public Law & Public Safety Division of Law P. O. Box 45029 Newark, NJ 07101 [email protected] Peter Van Brunt Deputy Attorney General Dept. of Public Law & Public Safety Division of Law P. O. Box 45029 Newark, NJ 07101 [email protected] SOUTH JERSEY GAS COMPANY Stacy A. Mitchell, Esq., Vice President Rates & Regulatory Affairs SJI Utilities, Inc. One South Jersey Place Atlantic City, NJ 08401 [email protected] Deborah M. Franco, Esq, Regulatory Affairs Counsel 520 Green Lane Union, NJ 07083 [email protected]
Stefany M. Graham Manager, Rates & Regulatory Initiatives SJI Utilities, Inc. One South Jersey Place Atlantic City, NJ 08401 [email protected] Carolyn A. Jacobs Regulatory Compliance Specialist SJI Utilities, Inc. One South Jersey Place Atlantic City, NJ 08401 [email protected] Brent Schomber, Vice President Construction & Shared Services SJI Utilities, Inc. One South Jersey Place Atlantic City, NJ 08401 [email protected] Ray Wenzel Director Engineering Services South Jersey Gas Company One South Jersey Place Atlantic City, NJ 08401 [email protected]
STATE OF NEW JERSEY BOARD OF PUBLIC UTILITIES
IN THE MATTER OF THE PETITION OF : SOUTH JERSEY GAS COMPANY : FOR APPROVAL OF BASE RATE : BPU DOCKET NO. GR19040529 ADJUSTMENTS PURSUANT TO THE : STORM HARDENING AND RELIABILITY : PROGRAM (“SHARP II”) :
12&0 UPDATE SCHEDULES
July 15, 2019
STATE OF NEW JERSEY BOARD OF PUBLIC UTILITIES
IN THE MATTER OF THE PETITION OF SOUTH JERSEY GAS COMPANY FOR APPROVAL OF BASE RATE ADJUSTMENTS PURSUANT TO THE STORM HARDENING AND RELIABILITY PROGRAM (“SHARP II”)
: : : : : :
BPU DOCKET NO. GR19040529
12&0 UPDATE SUMMARY
South Jersey Gas Company ("South Jersey," “Petitioner,” or "Company") filed its
Petition in this matter on April 30, 2019 (the “Petition”), seeking approval of base rate
adjustments associated with the Company’s Storm Hardening and Reliability Program (“SHARP
II”), which was approved by the Board on May 22, 2018 in Docket No. GO17111130. With the
SHARP II, South Jersey is authorized to invest $100.25 million over three (3) years to enhance
the safety and reliability of its gas distribution system in coastal areas and mitigate the potential
impacts of major storm events.
Cost recovery for SHARP II projects is effectuated by an annual adjustment to base
distribution rates, effective on October 1. The Petition, as filed, contained actual SHARP II
investment data for the period July 1, 2018 through March 31, 2019. With this 12&0 update
filing, the Company is providing actual SHARP II investment data through June 30, 2019 and is
seeking a base rate adjustment that will take effect on October 1, 2019, to reflect the revenue
requirements associated with SHARP II projects placed in service during the period July 1, 2018
through June 30, 2019.
If approved by the Board, the impact of the proposed base rate adjustment on a residential
heating customer using 100 therms in a winter month would be an increase of $0.87, or 0.6%.
SHARP II
12 & 0 UPDATE
Schedules
of
BRENT SCHOMBER
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SHARP II
12 & 0 UPDATE
Schedules
of
STEFANY M. GRAHAM
Schedule SMG-1
LineNo.12 Plant in Service as of June 30, 2019 $27,403,9853 AFUDC 60,677 4 Gross Plant in Service as of June 30, 2019 27,464,662 56 Accumulated Depreciation (438,670) 78 Rate Base 27,025,992 910 Accumulated Deferred Tax (204,831) 1112 Net Rate Base 26,821,161 1314 Rate of Return - Net 6.22%1516 Return Requirement (Net of Tax) 1,667,740 1718 Depreciation Expense, Net of Tax 396,572 1920 Revenue Recovery 2,064,312 2122 Revenue Factor 1.516682324 Total Revenue Requirement, including SUT $3,130,8932526 Total Revenue Requirement, excluding SUT $2,936,360
STORM HARDENING AND RELIABILITY PROGRAM ("SHARP II")SOUTH JERSEY GAS COMPANY
REVENUE REQUIREMENT AND RATE CALCULATIONYear 1 - Roll-In 10/1/2019
Schedule SMG-2Page 1 of 3
Approved AFUDC @ AFUDC @ AFUDC @CWIP ST Debt WACC STD WACC TOTAL
Balance Balance(Semi-Annual Compounding) (monthly) (monthly) (monthly)
Regular 46,960,573 26,115,573
AIRP II 40,623,533 22,591,438
SHARP II 3,332,013 1,852,989 6.79% 4,208 8,369 12,577 0.3775%
Totals 90,916,119 50,560,000
ST Debt Balance….. 50,560,000 ST Debt Rate………… 2.7251%
SOUTH JERSEY GAS COMPANYSHARP II AFUDC RATE
FOR THE MONTH APRIL 2019
Effective Rate for Month
Schedule SMG-2Page 2 of 3
Approved AFUDC @ AFUDC @ AFUDC @CWIP ST Debt WACC STD WACC TOTAL
Balance Balance(Semi-Annual Compounding) (monthly) (monthly) (monthly)
Regular 47,152,596 29,236,537
AIRP II 18,146,948 11,251,850
SHARP II 8,197,172 5,082,581 6.79% 11,422 17,624 29,046 0.3543%
Totals 73,496,715 45,570,968
ST Debt Balance….. 45,570,968 ST Debt Rate………… 2.6967%
SOUTH JERSEY GAS COMPANYSHARP II AFUDC RATE
FOR THE MONTH MAY 2019
Effective Rate for Month
Schedule SMG -2Page 3 of 3
SJG AFUDC @CWIP STD
Balance (monthly)
Regular 50,096,004
AIRP II 3,302,882
SHARP II 8,025,248 17,515 0.2182%
Totals 61,424,134
ST Debt Balance….. 85,710,000 ST Debt Rate………… 2.6190%
SOUTH JERSEY GAS COMPANYSHARP II AFUDC RATE
FOR THE MONTH JUNE 2019
Effective Rate for Month
Schedule SMG-3
Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual TotalJun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19
Absecon Island Loop ProjectDepreciable Base $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Depreciation Rate- Annual 1.29% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11%Depreciation Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Ocean City Loop ProjectDepreciable Base $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Depreciation Rate- Annual 1.29% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11%Depreciation Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Brigantine Bridge ProjectDepreciable Base $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Depreciation Rate- Annual 1.37% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11% 0.11%Depreciation Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
EFV ProjectDepreciable Base $0 $76,587 $837,092 $1,599,757 $2,342,640 $3,684,876 $4,822,711 $6,399,002 $7,884,157 $9,618,595 $12,427,982 $20,066,568 $27,464,662Depreciation Rate- Annual 2.01% 0.17% 0.17% 0.17% 0.17% 0.17% 0.17% 0.17% 0.17% 0.17% 0.17% 0.17% 0.17% 0.17%Depreciation Expense $0 $128 $1,402 $2,680 $3,924 $6,172 $8,078 $10,718 $13,206 $16,111 $20,817 $33,612 $46,003
Total Depreciation Expense - 128 1,402 2,680 3,924 6,172 8,078 10,718 13,206 16,111 20,817 33,612 46,003 162,851
DEPRECIATION EXPENSEPROGRAM YEAR 1
SOUTH JERSEY GAS COMPANYSTORM HARDENING AND RELIABILITY PROGRAM ("SHARP II")
Schedule SMG-4
LineNo.1 State Tax Federal Tax2 Plant in Service as of June 30, 2019 27,403,985$ 27,403,985$ 3 AFUDC 60,677$ 60,677$ 4 Less AFUDC-Equity (20,042)$ (20,042)$ 5 Total Investment as of June 30, 2019 27,444,621$ 27,444,621$ 67 Bonus Depreciation -$ -$ 8 Tax Depreciation 1,377,221$ 1,377,221$ 9 Total Tax/Bonus Depreciation 1,377,221$ 1,377,221$
1011 Book Depreciation (648,545)$ (648,545)$ 1213 Net 728,677$ 728,677$ 1415 Deferred Tax 65,581$ 153,022$ 1617 Benefit of State Deferred on Federal (13,772)$ 1819 Total Deferred Tax Liability 204,831$ 20
SOUTH JERSEY GAS COMPANYSTORM HARDENING AND RELIABILITY PROGRAM ("SHARP II")
ACCUMULATED DEFERRED TAXES ("ADIT")
Schedule SMG-5
After-TaxType of Capital Ratios Cost Rate Weighted Cost Rate Weighted Cost Rate
Long-Term Debt 47.50% 3.45% 1.64% 1.18%
Common Equity 52.50% 9.60% 5.04% 5.04%
100.00% 6.68% 6.22%
SOUTH JERSEY GAS COMPANYSTORM HARDENING AND RELIABILITY PROGRAM ("SHARP II")
WEIGHTED AVERAGE COST OF CAPITAL
Schedule SMG-6
Line
NoAbsecon Island
LoopOcean City
LoopBrigantine
Bridge EFVs Total1 Plant in service as of June 30, 2019 -$ -$ -$ 27,403,985$ 27,403,985$ 2 AFUDC -$ -$ -$ 60,677$ 60,677$ 3 Less: AFUDC Equity -$ -$ -$ (20,042)$ (20,042)$ 4 Total Depreciable Base -$ -$ -$ 27,444,621$ 27,444,621$ 56 Annual Depreciation Rate 1.29% 1.29% 1.37% 2.01%7 Annual Depreciation Expense -$ -$ -$ 551,637$ 551,637$ 89 Income Taxes (28.11%) (155,065)$
1011 Annual Depreciation Expense, Net of Tax 396,572$ 12
SOUTH JERSEY GAS COMPANYSTORM HARDENING AND RELIABILITY PROGRAM ("SHARP II")
ANNUAL DEPRECIATION EXPENSE
Schedule SMG-7
LineNo.1 Components:23 Sales and Use Tax (SUT) 6.625%45 Public Utility Assessment Tax (PUA) 0.2505%67 Bad Debt Provision (Bad Debt) 2.0037%89 Federal Income Tax (FIT) 21.0000%1011 CBT 9.0000%1213 Operating Revenue 1.0000141516 Revenue Factor Calculation: 1.51668171819 1 *1.020037*1.002505*1.06625= 1.5166820 1-[(.79*.09)+.21]2122
SOUTH JERSEY GAS COMPANYSTORM HARDENING AND RELIABILITY PROGRAM ("SHARP II")
DERIVATION OF REVENUE FACTOR
Schedule SMG-8Page 10 of 11
Present Rates (Effective Oct 1, 2018) Proposed Rates (Effective Oct 1, 2019)Component Amount Units Rate Revenue Rate Revenue Increase
RSG RSGResidential Service
Customer Charge 4,280,934 Bills 9.50$ 40,668,873$ 9.50$ 40,668,873$
Distribution Charge 253,181,413 Therms 0.651332 164,905,156 0.659503 166,973,901 Total Base Revenues 205,574,029$ 207,642,774$ 1.0%
GSG GSGGeneral Service (0-100,000 Annual Therms)
Customer Charge 299,071 Bills 29.97$ 8,963,158$ 29.97$ 8,963,158$
Distribution Charge 89,582,097 Therms 0.545083 48,829,678 0.551575 49,411,245
Total Base Revenues 57,792,836$ 58,374,403$ 1.0%
GSG-LV GSG-LVGeneral Service Large Volume (100,000 + Annual Therms)
Customer Charge 2,170 Bills 150.00$ 325,500$ 150.00$ 325,500$
Demand Charge 212,776 Mcf 9.6086 2,044,479 9.6086 2,044,479
Distribution Charge 32,241,055 Therms 0.272157 8,774,629 0.275635 8,886,763 Total Base Revenues 11,144,608$ 11,256,743$ 1.0%
CTS CTSComprehensive Firm Transportation Service
Customer Charge 555 Bills 600.00$ 333,000$ 600.00$ 333,000$
Demand Charge 133,720 Mcf 28.6555 3,831,813 28.6555 3,831,813
Distribution Charge 27,898,657 Therms 0.061826 1,724,862 0.063950 1,784,119 Total Base Revenues 5,889,676$ 5,948,933$ 1.0%
LVS LVSLarge Volume Service
Customer Charge 313 Bills 900.00$ 281,700$ 900.00$ 281,700$
Demand Charge 349,950 Mcf 15.9588 5,584,782 15.9588 5,584,782
Distribution Charge 79,591,210 Therms 0.047077 3,746,915 0.048292 3,843,619
Total Base Revenues 9,613,397$ 9,710,101$ 1.0%
EGS EGSElectric Generation Service
Customer Charge 108 Bills 63.38$ 6,845$ 63.38$ 6,845$
Demand Charge 8,392 Mcf 7.843 65,820 7.843 65,820
Distribution Charge (Nov - Mar.) 559,943 Therms 0.129701 72,625 0.131371 73,560
Distribution Charge (Apr - Oct.) 789,736 Therms 0.099701 78,737 0.101371 80,056 Total Base Revenues 224,028$ 226,282$ 1.0%
SOUTH JERSEY GAS COMPANYSTORM HARDENING & RELIABILITY PROGRAM ("SHARP II")
BASE AND TOTAL REVENUES AT PRESENT AND PROPOSED RATES
Schedule SMG-8Page 11 of 11
Present Rates (Effective Oct 1, 2018) Proposed Rates (Effective Oct 1, 2019)Component Amount Units Rate Revenue Rate Revenue Increase
SOUTH JERSEY GAS COMPANYSTORM HARDENING & RELIABILITY PROGRAM ("SHARP II")
BASE AND TOTAL REVENUES AT PRESENT AND PROPOSED RATES
EGS-LV EGS-LVElectric Generation Service - Large Volume
Customer Charge 84 Bills 428.32$ 35,979 428.32$ 35,979
Demand Charge 45,200 Mcf 22.468169 1,015,561 22.702277 1,026,143 Total Base Revenues 1,051,540$ 1,062,122$ 1.0%
NGV NGV
Natural Gas Vehicle Service
Cust. Charge 0-999 CFH 12 Bills 37.50$ 450$ 37.50$ 450$
Cust. Charge 1,000-4,999 CFH - Bills 75.00 - 75.00 -
Cust. Charge 5,000-24,999 CFH 12 Bills 200.00 2,400 200.00 2,400
Cust. Charge 25,000+ CFH 96 Bills 703.47 67,533 703.47 67,533 Distribution Charge 2,255,851 Therms 0.189221 426,854 0.191439 431,858
Subtotal Distribution 497,237$ 502,241$ 1.0%
Compression Charge 983,046 Therms 0.548712 539,409 0.5487120 539,409
Total Base Revenues 1,036,647$ 1,041,650$
GLS GLSGas Lights Service
Yard Lights 48 Mantles 8.537580$ 4,918$ 8.623494$ 4,967$ Street Lights 36 Mantles 9.203637$ 3,976 9.296254$ 4,016 Total Base Revenues 8,894$ 8,983$ 1.0%
TOTAL SYSTEM BASE DISTRIBUTION REVENUES 292,335,655$ 295,271,990$ 1.0%
TOTAL SYSTEM INCLUDING OTHER REVENUES 292,335,655$ 295,271,990$ 1.0%
INCREASE 2,936,335TARGET INCREASE 2,936,360
Difference ($24)
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RSG FSS RSG-FTS Difference
RSG FSS RSG-FTS Difference
GSG FSS GSG-FTS Difference
GSG FSS GSG-FTS Difference
Prior to 7/15/97
GSG-LV FSS GSG-LV-FTS Difference
Schedule SMG-9 Page 28 of 28
