Pennichuck East Utility. Inc.
On October 18, 2017, Pennichuck. East Utility, Inc. (“PEU”) filed a request with the New
Hampshire Public Utilities Commission (“NHPUC”) for a rate increase of 21.24% over its
current rates for the test year 2016, for which 20.08% of this increase is related to a
permanent rate increase and 1.16% is related to a prospective step increase (associated with
capital investments and other allowable expenditures in the twelve months following the test
year). The overall rate increase is subject to the normal regulatory filing process with the
NHPUC, as followed for all prior rate case filings, and as such, the final permanent rate
increase granted will be effective retroactive back to the filing date, once approved by the
NHPUC. The step increase, once approved and granted, would be earned on a forward-
looking basis, as of the date of the order granting such increase. In addition, PEU requested
that a temporary rate increase of 13.70% be granted as a subset of the final permanent rate
increase, with the intention that this temporary rate increase would be approved in early
2018, and with permanent rates being set in the summer or fall of 2018.
The last general rate increase for PEU was in 2014, based upon 2012 as a test year. Since
then, PEU’s operating expenses have increased ratably, and for some items like local
property taxes, well above the rate of inflation. Additionally, since the beginning of 2013, the
Company has borrowed and invested over $7.5 million in new capital assets to serve its
customers through ongoing investments in infrastructure replacements and system
improvements. The rate increase being requested will allow PEU to pay the debt service
attributable to these new capital investments, pay its necessary operating costs, and continue
to meet the needs of its customers now and into the future.
A hearing was held on the Temporary Rate request on February 26, 2018, where the
Commissioners were asked to opine on a temporary rate increase of 12.24%, pursuant to a
Settlement Agreement entered into between the Company, the PUC Staff and the Office of
Consumer Advocate and other intervenors to the case. Upon receiving an order authorizing a
temporary rate increase, the new rates resulting from that will begin to be billed to customers
in 2018.
Note 13 — Subsequent Events
The Company has evaluated the events and transactions that have occurred through March 21,
2018, the date that these consolidated financial statements were available for issuance, for
which no reportable events were discovered.
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