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Regulatory Matters (Disclosure)
3 Months Ended
Jul. 31, 2012
Regulatory Matters Disclosure [Abstract]  
Public Utilities Disclosure Text Block

2.       Regulatory Matters

 

On February 26, 2010, we filed a petition with the Tennessee Regulatory Authority (TRA) to adjust the applicable rate for the collection of the Nashville franchise fee from certain customers. The proposed rate adjustment was calculated to recover the net $2.9 million of under-collected Nashville franchise fee payments as of May 31, 2009. In April 2010, the TRA passed a motion approving a new Nashville franchise fee rate designed to recover only the net under-collections that have accrued since June 1, 2005, which would deny us recovery of $1.5 million. In October 2011, the TRA issued an order denying us the recovery of $1.5 million of franchise fees consistent with its April 2010 motion, and we recorded $1.5 million in operations and maintenance expenses. In November 2011, we filed for reconsideration, which was granted on November 21, 2011. On February 13, 2012, a hearing on this matter was held before the TRA. On May 7, 2012, the TRA approved the recovery of an additional $.5 million in under-collected Nashville franchise fees covering years 2002 through May 2005, which we recorded as a reduction in operations and maintenance expenses.

 

On June 15, 2012, we filed with the Public Service Commission of South Carolina (PSCSC) a quarterly monitoring report for the twelve months ended March 31, 2012 and a cost and revenue study as permitted by the Natural Gas Rate Stabilization Act of 2005 requesting a change in rates from those approved by the PSCSC in the October 2011 order. On August 31, 2012, a settlement agreement with the Office of Regulatory Staff was filed with the PSCSC addressing our proposed rate changes. The settlement, if approved, will result in a $1.1 million annual decrease in margin based on a return on equity of 11.3%, effective November 1, 2012. We are waiting on a ruling by the PSCSC at this time.

 

On July 12, 2012, the PSCSC held a hearing on the annual review of our purchased gas costs and gas purchasing policies for the twelve months ended March 31, 2012. Prior to this hearing, on July 2, 2012, we and the Office of Regulatory Staff filed a joint settlement agreement that stated that our gas purchasing policies and practices during the review period were reasonable and prudent, that we had properly followed the gas cost recovery tariff provisions and relevant PSCSC orders and that we had managed our hedging program in a reasonable and prudent manner. On August 15, 2012, the PSCSC approved our purchased gas adjustments and found our gas purchasing policies to be prudent for the period under review.

 

On August 1, 2012, we filed testimony with the North Carolina Utilities Commission (NCUC) in support of our gas cost purchasing and accounting practices for the twelve months ended May 31, 2012. A hearing on this matter has been scheduled for October 2, 2012. We are waiting on a ruling by the NCUC at this time.