BANGOR HYDRO ELECTRIC RATE INCREASES - PART II OF SERIES RE: CASE NO. 2010-377

Today's posting is Part II of the Series begun here on July 18, 2011. You can scroll down to review that post if you haven't read it.

The following are direct quotes from the final Order issued by the Maine Public Utilities Commission (MPUC) commissioners on June 10, 2011. This order will be in effect until the next request for residential ratepayer increases, expected to be initiated December 2013.

Following today's referenced section, issues are presented which should raise questions in the reader's mind re: transparency of both BHE and the MPUC. Those issues are related to italicized information for the purpose of focusing the reader's attention.

"PROCEDURAL BACKGROUND
"
On December 8, 2010, Bangor Hydro Electric Company (BHE, Bangor, Bangor Hydro, or the Company) submitted its Petition for a Commission investigation into its stranded cost revenue requirements and rates for the three year period commencing March 1, 2011 and associated materials (December 8 Petition). As part of its initial petition, Bangor included the pre-filed Direct Testimony and Exhibits or Peter Dawes and Lisa Henaghen (Dawes/Henaghen Direct Testimony), the pre-filed direct testimony of Gradon Haehnel and Timothy Olesniewisz (Haehnel/Olesniewisz Direct Testimony) (collectively, pre-filed Direct Testimony). In its pre-filed Direct Testimony, the Company requested that the Commission authorize an increase to its stranded cost rates and approve a three-year levelized revenue requirement of $19.751 million per year for the period of March 1, 2011 through February 28, 2024. In its initial filing, the Company asserted that its proposal represented an increase of approximately $5.025 million or a 34.12% increase to its current stranded cost revenue requirements. This increase to the stranded cost component of rates represented an increase in BHE's delivery rate (transmission, distribution, and stranded costs) of 4.6%.

"The Company's December 8 Petition proposed an overall pre-tax weighted average cost of capital (WACC) of 10.37% that was based on a 8.5% return on equity (ROE) for all non-Maine Yankee related stranded cost rate base. The Company asserted that his WACC was reasonable because it was the same ROE that had been approved by the Commission in Docket No. 2066-661 and was similar, albeit somewhat more modest, than the ROE and WACC approved for Maine Public Service (MPS).

"On December 13, 2010, the Maine Office of Public Advocate submitted a petition to intervene. On December 20, 2010, Central Maine Power Company (CMP) submitted a petition for discretionary intervention. At the initial case conference on December 21, 2010, the Hearing Examiner granted these petitions, to which no objections were made. Following the case conference, the Hearing Examiner extended the deadline for interventions until December 27, 2010 (from December 13, 2010). On January 11, 2011, the Hearing Examiner granted the late filled petitions to intervene by Mr. Helen Patterson and Ms. Rusty Gagnon."

WHAT DOES THE PRECEDING INFORMATION MEAN? HOW DOES IT RELATE TO BHE RESIDENTIAL CUSTOMERS?

Readers will need to refer back to those italicized sections to track the following issues.

1. According to Maine law (Title 35-A and Chapters 110 and 120 of the MPUC's rules) BHE has/had the responsibility to send notices of proposed rate increases to all ratepayers. The notification which BHE mailed stated that BHE had filed its Petition with the MPUC on December 7, 2010. (not December 8, 2010)

2. The Maine Office of Public Advocate (OPA) filed their petition on December 13, 2010. This shows that the OPA received a copy/notice of BHE's December 2010 petition filing prior to December 13, 2010.

3. The Central Maine Power Company (CMP) also filed a petition to participate in this case. Their petition was filed with the MPUC on December 20, 2010. This shows that CMP had received notification of BHE's December 2010 filing prior to December 20, 2010.

4. The first case conference was conducted December 21, 2010. This shows that the Hearing Examiner was willing to begin the Commission's (requested) investigation into the issue of the requested rate increase at that time.

HOWEVER, it is obvious that either (1) there was no concern by the MPUC of when/if the ratepayer class had, in fact, received the required notification and, therefore, should be included in the proceedings from the very beginning - or - (2) there was an assumption that no one from the ratepayer class would petition to be included (in essence Object to any aspect or issue regarding the requested rate increase) - or - (3) any ratepayer who might petition could be ignored by the MPUC Hearing Examiner.

This position by the MPUC - and any such assumptions - proved to be wrong when Ms. Patterson and I filed our individual petitions in accordance with the minimal information provided in the BHE notification...which we did not receive until AFTER the initial case conference was held.

This writer did not even receive the BHE notification until December 30, 2010 - 9 days after the initial case conference, 10 days after CMP filed their petition, and 17 days after the OPA filed their petition. (Additionally, this writer knows of individuals residing in Bangor who did not receive their BHE notification until the middle of January, 2011!)

Question: Are policies, laws and/or rules pertaining to the public/ratepayer rights and protections intended to be "real" or are they just figment regulations for corporations - not worth the paper they're printed on?

Tomorrow: The issue raised by this writer/ratepayer and petitioned to the MPUC.