The Pennsylvania Commonwealth Court has upheld a ruling by the state Public Utility Commission (PUC) permitting Equitable Gas Co., a natural gas local distribution company (LDC), to recover costs associated with a switch from pay-as-you-go to accrual accounting for post-retirement benefits other than pensions (PBOPs) under Statement of Financial Accounting Standards 106.
The state's Office of Consumer Advocate had appealed the decision, claiming that in approving a nounanimous settlement the PUC had failed to determine whether the utility needed the cost recovery to achieve a fair rate of return.
The court accepted the PUC's review of the new rule's compliance costs, offsetting savings, and net
effect on earnings, though it fell short of the detail
required in a full rate case. At the same time, however the court observed that the PUC could have avoided "unnecessary appeals" if it would have made its findings "explicit and more specific and comprehensive." Popowsky v. Pa. PUC, No. 2276 C.D.1995, Oct. 17, 1996 (Pa.Commw.Ct.).
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