This replaces all the sheets in the initial September 26, 2018 filing.

Transcription

1 83 W. GRANDRIDGE BLVD., KENNEWICK, WASHINGTON TELEPHONE FACSIMILE October, 208 Records Center Washington Utilities & Transportation Commission 300 S. Evergreen Park Drive SW Olympia, WA Regarding: UG-8088, Supplemental Filing Advice No. CNG/W On September 26, 208, Cascade Natural Gas Corporation ( Cascade or the Company ) submitted Advice No. W The Company now supplements this filing with the following replacement sheets, which are stated to become effective with service on and after December, 208: Seventy-Eighth Revision Sheet No. 500 Fifty-Seventh Revision Sheet No. 500-A Fifth Revision Sheet No. 500-B Second Revision Sheet No. 500-C This replaces all the sheets in the initial September 26, 208 filing. The tariff revision identifies the actual rates charged to customers in the following cities: Anacortes Port Orchard Blaine Prosser Bremerton Sedro Woolley East Wenatchee Toppenish Kelso Woodland Kennewick Yakima Tier I Moses Lake Yakima Tier II The tariff revision will allow Cascade to pass through tax assessments by municipalities to ratepayers on a going forward basis.

2 October, 208 Advice No. CNGC/W The tariff also provides a footnote explaining the difference between the customer s billed rate and the city ordinance rate. If there are any questions regarding this information, please contact me at (509) /s/ Michael Parvinen Michael Parvinen Director, Regulatory Affairs Cascade Natural Gas Corporation 83 W. Grandridge Blvd. Kennewick, WA michael.parvinen@cngc.com Attachments UG-8088, CNGC Advice No. W Leg Tariffs, pdf UG-8088, CNGC Advice No. W Tariffs, pdf UG-8088, CNGC Ordinances WP, pdf UG-8088, CNGC Gross Revenue Definition WP, xlsx

3 CASCADE NATURAL GAS CORPORATION Seventy-SeventhEighth Revision of Sheet No. 500 Canceling WN U-3 Seventy-Sixtheventh Revision of Sheet No. 500 SCHEDULE 500 MUNICIPAL TAXES APPLICABILITY: This schedule applies a municipal s tax rate to all bills issued within the specific municipality. The tax rate is applied to all bills for gas service and equipment rental, as well as bills for contracted services where the contract specifically refer to this schedule. MUNICIPAL TAX RATE: The table below lists the tax each municipality charges, the ordinance that adopted the tax, and the limitations on the tax, if any. Municipality Ordinance No. on gas service Tax rate on Rental Equipment Aberdeen % 6% None Anacortes () % - None Arlington 357 6% - None Bellingham () %.0% Limitations 6.383% Higher rate applied to first $250,000 per month, customer. Lower rate applied to billing portion >$250,000, per month Blaine () % 6.383% None Bremerton () % 6.383% None Burlington 459 & 243 3% 3% None Castle Rock % 6% Not applied to billing portion >$500 where gas is used for manufacturing College Place 888 6% 6% None East Wenatchee () % 6.383% None Elma 685, 856, 6% - None 34 Everson 355 6% 6% None Ferndale 277 6% 6% None Grandview 650 6% 6% None Granger 58 6% 6% None Hoquiam % 6% None () The rate established by Ordinance is 6% up to $250,000 plus % over $250,000; however, the City of Bellingham s ddefinition of gross revenue includes tax, and, therefore, the billable rate must be adjusted to include the effect of applying the tax rate to the other taxes. (T) (T) (continued) CNG/W Effective for Service on and after Issued February 8September 26, 208 February 29December, 208 Issued by CASCADE NATURAL GAS CORPORATION By: Mikechael Parvinen Director, Regulatory Affairs

4 CASCADE NATURAL GAS CORPORATION Fifty-Sixtheventh Revision of Sheet No. 500-A Canceling WN U-3 Fifty-Fifth Sixth Revision of Sheet No. 500-A MUNICIPAL TAX RATE (continued): Municipality Ordinance No. on gas service SCHEDULE 500 MUNICIPAL TAXES on Rental Equipment Limitations Kalama 779 6% - Not applied to billing portion >$,000 where gas is used for manufacturing Kelso % 6.383% None Kennewick () 2806,3303, % % None 362 La Conner 72 6% 6% None Longview % 6% Not applied to billing portion >$,000 where gas is used for manufacturing Lynden 77 6% % 0.5% 6% 6% applied to first $5,000 billed per month, per customer % applied to portion billed per month, per customer between $5,000 and $50, % applied to portion >$5,000 billed per month, per customer Marysville 975 5% - None McCleary 563 6% 6% None Montesano 942 6% None Moses Lake () % 6.383% Does not apply to portion billed per customer, per year >$00,00 Mount Vernon % 4% CNG/W Effective for Service on and after Issued May 25September 26, 208 JulyDecember, 208 Issued by CASCADE NATURAL GAS CORPORATION By: Mikechael Parvinen Director, Regulatory Affairs 6% 4% Higher rate applied to portion billed per customer, per month, up to $5,000 Lower rate applied to portion billed, per customer, per month >$5,000 Moxee 438 6% 6% Applied to first $3,000 billed, per customer, per month Nooksack () 29, 365 6% 6% None Othello 099 6% 6% None Oak Harbor 792, 967 6% 6% None Pasco % - None (continued) Definition of gross revenue includes tax and, therefore, the billable rate must be adjusted to also include the effect of applying the tax rate to the other taxes. (D)

5 CASCADE NATURAL GAS CORPORATION Fourth Fifth Revision of Sheet No. 500-B Canceling WN U-3 Third Fourth Revision of Sheet No. 500-B SCHEDULE 500 MUNICIPAL TAXES MUNICIPAL TAX RATE (continued) Municipality Ordinance No. on gas service on Rental Equipment Poulsbo % - None Port Orchard % - None Prosser () % 6.383% None Quincy 552, % 4% None Richland % % 8.5% % Limitations Higher rate applied to portion billed per customer, per month up to $35,000 Lower rate applied to portion billed per customer, per month > $35,000 Sedro Woolley () % - None Selah 939 6% - Applied to portion billed per customer, per month, up to $2,000 Shelton % 6% None Stanwood 704 6% - None Sumas 682, 772 & 773 % - Applied to portion billed per customer, per month, up to $000 Sunnyside 368 6% 6% None Swinomish 3% 3% None 85 Indian Tribe Toppenish () 85-36, % % None Union Gap 207 6% 6% None Walla Walla A % 6% None Wapato 903, 948 6% 6% None Wenatchee % 6% None West Richland % 6% None Woodland () % - None ( (T) (T)(I) (D) (continued) Definition of gross revenue includes tax and, therefore, the billable rate must be adjusted to include the effect of applying the tax rate to the other taxes. CNG/W Effective for Service on and after Issued MaySeptember 256, 208 JulyDecember, 208 Issued by CASCADE NATURAL GAS CORPORATION By: Mikechael Parvinen Director, Regulatory Affairs

6 CASCADE NATURAL GAS CORPORATION First Second Revision of Sheet No. 500-C Canceling WN U-43 Original First Revision of Sheet No. 500-C MUNICIPAL TAX RATE (continued) SCHEDULE 500 MUNICIPAL TAXES Municipality Ordinance No. on gas service on Rental Equipment Limitations Yakima % 2.04% 6.383% 2.04% Higher rate applied to first $8,000, per customer, per month Lower rate applied to amount >$8,000, billed per customer, per month Yakima Indian T % 3% None Nation Zillah 488 6% - Does not apply to gas purchased from industrial sales rate and used for manufacturing FEDERALLY RECOGNIZED INDIAN NATION TAX CREDIT In accordance with WAC (7)(b), the rates and charges specified in this tariff shall be reduced for all Federally Recognized Indian Nation tribal and member accounts, located and service provided within the boundaries of a Federally Recognized Indian Nation. Each applicable customer must apply on an individual account basis to Cascade to receive this tax credit. The Federally Recognized Indian Nation Tax Credit is designed to offset the Washington State Public Utility Tax, which is a part of the rates charged for core market natural gas service. State Public Utility Tax Credit (3.852%) STATE UTILITY TAX EXEMPTION CREDIT To the extent the Washington Department of Revenues authorizes exemptions of public utility tax collection from certain customer groups, the rates and charges specified in this tariff shall be reduced by a State Utility Tax credit. Each applicable customer must apply on an individual account basis to Cascade to receive this tax credit. The State Utility Tax Credit is designed to offset the Washington State Public Utility Tax, which is a part of the rates charged for core market natural gas service. State Public Utility Tax Credit (3.852%) Definition of gross revenue includes tax and, therefore, the billable rate must be adjusted to include the effect of applying the tax rate to the other taxes. CNG/W Effective for Service on and after Issued May September 256, 208 JulyDecember, 208 Issued by CASCADE NATURAL GAS CORPORATION By: Mikechael Parvinen Director, Regulatory Affairs

7 CASCADE NATURAL GAS CORPORATION Seventy-Eighth Revision Sheet No. 500 Canceling WN U-3 Seventy-Seventh Revision of Sheet No. 500 SCHEDULE 500 MUNICIPAL TAXES APPLICABILITY: This schedule applies a municipal s tax rate to all bills issued within the specific municipality. The tax rate is applied to all bills for gas service and equipment rental, as well as bills for contracted services where the contract specifically refer to this schedule. MUNICIPAL TAX RATE: The table below lists the tax each municipality charges, the ordinance that adopted the tax, and the limitations on the tax, if any. Municipality Ordinance No. on gas service Tax rate on Rental Equipment Aberdeen % 6% None Anacortes () % - None Arlington 357 6% - None Bellingham () %.0% Limitations 6.383% Higher rate applied to first $250,000 per month, customer. Lower rate applied to billing portion >$250,000, per month Blaine () % 6.383% None Bremerton () % 6.383% None Burlington 459 & 243 3% 3% None Castle Rock % 6% Not applied to billing portion >$500 where gas is used for manufacturing College Place 888 6% 6% None East Wenatchee () % 6.383% None Elma 685, 856, 6% - None 34 Everson 355 6% 6% None Ferndale 277 6% 6% None Grandview 650 6% 6% None Granger 58 6% 6% None Hoquiam % 6% None () Definition of gross revenue includes tax, and, therefore, the billable rate must be adjusted to include the effect of applying the tax rate to the other taxes. (T) (continued) CNG/W Effective for Service on and after Issued September 26, 208 December, 208 Issued by CASCADE NATURAL GAS CORPORATION By: Michael Parvinen Director, Regulatory Affairs

8 CASCADE NATURAL GAS CORPORATION Fifty-Seventh Revision Sheet No. 500-A Canceling WN U-3 Fifty-Sixth Revision of Sheet No. 500-A MUNICIPAL TAX RATE (continued): Municipality Ordinance No. on gas service SCHEDULE 500 MUNICIPAL TAXES on Rental Equipment Limitations Kalama 779 6% - Not applied to billing portion >$,000 where gas is used for manufacturing Kelso () % 6.383% None Kennewick () 2806,3303, 9.289% 9.289% None 362 La Conner 72 6% 6% None Longview % 6% Not applied to billing portion >$,000 where gas is used for manufacturing Lynden 77 6% % 0.5% 6% 6% applied to first $5,000 billed per month, per customer % applied to portion billed per month, per customer between $5,000 and $50, % applied to portion >$5,000 billed per month, per customer Marysville 975 5% - None McCleary 563 6% 6% None Montesano 942 6% None Moses Lake () % 6.383% Does not apply to portion billed per customer, per year >$00,00 Mount Vernon % 4% 6% 4% Higher rate applied to portion billed per customer, per month, up to $5,000 Lower rate applied to portion billed, per customer, per month >$5,000 Moxee 438 6% 6% Applied to first $3,000 billed, per customer, per month Nooksack () 29, 365 6% 6% None Othello 099 6% 6% None Oak Harbor 792, 967 6% 6% None Pasco % - None () Definition of gross revenue includes tax, and, therefore, the billable rate must be adjusted to include the effect of applying the tax rate to the other taxes. (continue) CNG/W Effective for Service on and after Issued September 26, 208 December, 208 Issued by CASCADE NATURAL GAS CORPORATION By: Michael Parvinen Director, Regulatory Affairs

9 CASCADE NATURAL GAS CORPORATION Fifth Revision Sheet No. 500-B Canceling WN U-3 Fourth Revision of Sheet No. 500-B SCHEDULE 500 MUNICIPAL TAXES MUNICIPAL TAX RATE (continued) Municipality Ordinance No. on gas service on Rental Equipment Poulsbo % - None Port Orchard () % - None Prosser () % 6.383% None Quincy 552, % 4% None Richland % % 8.5% % Limitations Higher rate applied to portion billed per customer, per month up to $35,000 Lower rate applied to portion billed per customer, per month > $35,000 Sedro Woolley () % - None Selah 939 6% - Applied to portion billed per customer, per month, up to $2,000 Shelton % 6% None Stanwood 704 6% - None Sumas 682, 772 & 773 % - Applied to portion billed per customer, per month, up to $000 Sunnyside 368 6% 6% None Swinomish 3% 3% None 85 Indian Tribe Toppenish () 85-36, % 9.289% None Union Gap 207 6% 6% None Walla Walla A % 6% None Wapato 903, 948 6% 6% None Wenatchee % 6% None West Richland % 6% None Woodland () % - None () Definition of gross revenue includes tax, and, therefore, the billable rate must be adjusted to include the effect of applying the tax rate to the other taxes. (continued) CNG/W Effective for Service on and after Issued September 26, 208 December, 208 Issued by CASCADE NATURAL GAS CORPORATION By: Michael Parvinen Director, Regulatory Affairs

10 CASCADE NATURAL GAS CORPORATION Second Revision Sheet No. 500-C Canceling WN U-3 First Revision of Sheet No. 500-C MUNICIPAL TAX RATE (continued) SCHEDULE 500 MUNICIPAL TAXES Municipality Ordinance No. on gas service on Rental Equipment Limitations Yakima () % 2.04% 6.383% 2.04% Higher rate applied to first $8,000, per customer, per month Lower rate applied to amount >$8,000, billed per customer, per month Yakima Indian T % 3% None Nation Zillah 488 6% - Does not apply to gas purchased from industrial sales rate and used for manufacturing () Definition of gross revenue includes tax, and, therefore, the billable rate must be adjusted to include the effect of applying the tax rate to the other taxes. FEDERALLY RECOGNIZED INDIAN NATION TAX CREDIT In accordance with WAC (7)(b), the rates and charges specified in this tariff shall be reduced for all Federally Recognized Indian Nation tribal and member accounts, located and service provided within the boundaries of a Federally Recognized Indian Nation. Each applicable customer must apply on an individual account basis to Cascade to receive this tax credit. The Federally Recognized Indian Nation Tax Credit is designed to offset the Washington State Public Utility Tax, which is a part of the rates charged for core market natural gas service. State Public Utility Tax Credit (3.852%) STATE UTILITY TAX EXEMPTION CREDIT To the extent the Washington Department of Revenues authorizes exemptions of public utility tax collection from certain customer groups, the rates and charges specified in this tariff shall be reduced by a State Utility Tax credit. Each applicable customer must apply on an individual account basis to Cascade to receive this tax credit. The State Utility Tax Credit is designed to offset the Washington State Public Utility Tax, which is a part of the rates charged for core market natural gas service. State Public Utility Tax Credit (3.852%) CNG/W Effective for Service on and after Issued September 26, 208 December, 208 Issued by CASCADE NATURAL GAS CORPORATION By: Michael Parvinen Director, Regulatory Affairs

11 CASE: UG 347 WITNESS: PAUL ROSSOW PUBLIC UTILITY COMMISSION OF OREGON STAFF EXHIBIT 800 Opening Testimony September 27, 208

12 Docket No: UG 347 Staff/800 Rossow/ Q. Please state your name, occupation, and business address. A. My name is Paul Rossow. I am a Utility Analyst employed in the Energy Resources and Planning Division of the Public Utility Commission of Oregon (OPUC). My business address is 20 High Street SE, Suite 00, Salem, Oregon Q. Please describe your educational background and work experience. A. My witness qualification statement is found in Exhibit Staff/80. Q. What is the purpose of your testimony? A. The purpose of my testimony is to present Staff's proposed adjustment to certain Cascade Natural Gas Corporation s (CNGC or Company) administrative and general (A&G) expenses. The proposed adjustment I recommend is derived from review of multiple data requests, analysis of CNGC s 207 Operation and Maintenance non-labor transactions, and Commission meals and entertainment policy. Q. Did you prepare an exhibit for this docket? A. No. Q. How is your testimony organized? A. My testimony is organized as follows: Issue. Miscellaneous A&G... 2 Issue 2. Charitable Donation... 5

13 Docket No: UG 347 Staff/800 Rossow/ ISSUE. MISCELLANEOUS A&G Q. Please describe the miscellaneous A&G expenses at issue. A. The Federal Energy Regulatory Commission (FERC) has classified the FERC accounts shown in Table below as A&G. Within these accounts are certain types of expenses like meals and entertainment, awards, gifts, and non- business travel that are considered miscellaneous A&G by Staff. Table. Expenses within FERC Accounts. FERC No. FERC Account Expenses within FERC Accounts 902 Meter Reading Meals, Food, Pizza Party, Ice Cream, Candy, and Cake 903 Customer Records and Collection Gift Cards, Birthday Cards, Christmas Party, Coffee Mugs, Treats, Flowers, and Bowling 908 Customer Assistance Baseball Tickets, and Meals 92 Office Supplies Food, Meals, Party Supplies, and Employee Recognition 926 Employee Pensions and Benefits Awards, Gift Cards, Party Gifts, and Entertainment Q. Please provide a summary of the Company s filed proposal for administrative and general expenses. A. CNGC proposes including $6.2 million in the 208 test year for total A&G expenses. CNGC obtained its test year estimate by escalating 207 actual amounts by.7 percent after one adjustment. The one adjustment is the removal of $5,635 of miscellaneous A&G expenses Cascade concluded are not appropriate for recovery through customer rates. Cascade identified the expenses subsequently removed from the 207 base year amount by CNGC/304, Peters/.

14 Docket No: UG 347 Staff/800 Rossow/ performing a search for non-labor costs recorded in all FERC accounts for the 207 base year reported in its response to Standard Data Request (SDR) No Q. Please explain the Commission s historical treatment. A. Miscellaneous A&G expenses include awards, gift cards, food, meals, and entertainment. In Docket No. UE 97, the Commission adopted Staff s principle that costs for meals and entertainment, office refreshments and catering, gifts and awards are discretionary and should be shared equally by ratepayers and shareholders. 3 Accordingly, a 50 percent sharing of such expenses between customers and shareholders is routinely recommended by Staff. In addition, for any miscellaneous A&G expenses that are imprudent or excessive, Staff will recommend disallowance. Q. Please describe Staff s analysis of the Company s proposal for miscellaneous A&G expenses. A. To identify any miscellaneous A&G expenses that appear to be discretionary and not related to the provision of safe and reliable energy to customers, Staff reviewed the Company s 207 A&G non-labor expenses provided in electronic spreadsheet format by CNGC in its revised response to SDR Nos. 57 and 58 4 and created tables to aid in Staff s analysis of miscellaneous A&G expenses. 2 CNGC/300, Peters/7 at 5-9. (SDR Nos. 57 and 58 require the utility to produce transaction summaries for all non-labor costs recorded in FERC Accounts during the base year.) 3 See Order No , pp SDR Nos. 57 and 58 require the Company to provide information for all non-labor costs recorded in all FERC accounts for the base year.

15 Docket No: UG 347 Staff/800 Rossow/ Q. Does Staff propose an adjustment to the proposed 208 test year expense? A. Yes. Table summarizes the miscellaneous A&G adjusted expense amount identified by Staff that appear discretionary. Table. Selected Miscellaneous Base Year Expenses Staff Adjustment Total discretionary Expenses $79,09 Less Company Adjustment ($5,635) $73,384 Disallowance 50% Expenses after Disallowance $36,692 Escalation Factor.7% Total Adjustment with Escalation $37,36 Q. What is Staff s recommendation regarding miscellaneous A&G expenses for the 208 test year? A. Staff recommends decreasing the Company s miscellaneous A&G expenses in FERC accounts 902 through 930.2, resulting in a decrease to expense of ($37,36). Table 2 below indicates the proposed adjusted amount to be disallowed from each FERC Account. Table 2. Disallowed Miscellaneous Expenses by FERC Account. Proposed Disallowance FERC No. FERC Account Description ($) 902 Meter Reading Expenses $, Customer Records & Collect. Exp. $ Customer Assistance Expenses $ Office Supplies and Expenses $, Employee Pensions and Benefits $23, Misc. General Expenses $376 Total $37,36

16 Docket No: UG 347 Staff/800 Rossow/ Q. Is Staff recommending disallowances for costs incurred to read meters or for office supplies, etc.? A. No. The expenses that Staff proposes to disallow are for discretionary items such as office refreshments, catering, etc., that are recorded in the FERC Accounts listed above.

17 Docket No: UG 347 Staff/800 Rossow/ ISSUE 2. CHARITABLE DONATIONS Q. Please summarize your adjustment A. I recommend the following escalated adjustment (Oregon-allocated): Charitable Donations ($,269) Q. What expense does CNGC include in test year expense for charitable donations? A. CNGC s test year expense for cash contributions recorded to Charitable Donations is based on actual 207 base year amounts escalated by.7 percent. 5 Q. Please explain the Commission s historical treatment. A. The Commission s historical treatment is to disallow recovery of the costs of utilities charitable donations in rates charged for regulated services. These expenses are discretionary and are not required to provide safe and adequate service to customers. Further, Commission policy does not require customers to support causes in which they may not believe. 6 Q. Please describe Staff s analysis of the Company s proposal for Charitable Donations. A. To identify any charitable donation expenses that appear to not be related to the provision of safe and reliable energy to customers, Staff first created a pivot table of the Company s 207 A&G non-labor expenses provided in electronic 5 CNGC revised response to SDR No Order No at 2; OPUC Order No states at pp. 40-4, Since community affairs expenditures are discretionary, the funds could be retained by the business s owners. Owners of unregulated businesses, rather than their customers, make community affairs contributions." Also see Order No at 6.

18 Docket No: UG 347 Staff/800 Rossow/ spreadsheet format by CNGC in its revised response to SDR No. 57. Staff identified one charitable donation transaction for the Association of Washington Business. Q. What is Staff s recommendation regarding charitable donations for the 208 test year? A. Staff recommends removing costs of charitable donations from the test year expense. Staff proposes an adjustment based on Cascade s 207 base year expense for charitable donations, $,248, escalated by.7 percent to arrive at the amount Cascade included in its 208 test year for charitable donations. This results in a decrease to expense (in FERC Account 92) of ($,269). Q. Does this conclude your testimony? A. Yes.

19 CASE: UG 347 WITNESS: PAUL ROSSOW PUBLIC UTILITY COMMISSION OF OREGON STAFF EXHIBIT 80 Witness Qualifications Statement September 27, 208

20 Docket No. UG 347 Staff/80 Rossow/ WITNESS QUALIFICATION STATEMENT NAME: EMPLOYER: TITLE: Paul Rossow Public Utility Commission of Oregon Utility Analyst Energy Resources & Planning Division ADDRESS: 20 High Street SE Suite 00 Salem OR 9730 EDUCATION: Professional Accounting and Computer Application Diplomas, Trend College of Business 987 EXPERIENCE: I have been employed with the Public Utility Commission of Oregon as a Utility Analyst since October of Current responsibilities include research issues relating to energy utilities. I have actively participated in regulatory proceedings in Oregon, including UE 47, UE 67, UE 70, UE 79, UE 80, UE 97, UE 20, UE 23, UE 25, UE 27, UE 233, UE 246, UE 262, UE 263, UE 283, UE 355, UG 52, UG 53, UG 8, UG 86, UG 20, UG 22, UG 246, UG 284, and UG 344. I have attended the Utility Rate School sponsored by the Committee on Water of the National Association of Regulatory Utility Commissioners in May of 2005 and the Institute of Public Utilities sponsored by the National Association of Regulatory Utility Commissioners at Michigan State University in August of 2005.