LDC Recovers Coal Tar Cleanup Costs

Fortnightly Magazine - August 1997
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Recharge the Economy with Renewable Energy Tax Credits

The Maine Public Utilities Commission has authorized Northern Utilities Inc. to recover coal-tar cleanup costs via a special surcharge.

Under a settlement agreement, ratepayers will pay the full amount of cleanup costs incurred by the LDC on a rolling five-year amortization schedule. The costs will be capped at 4 percent of the company's annual adjusted total firm revenues from sales and transportation customers. Shareholders will bear the carrying costs on all deferred balances during the amortization schedule.

According to the commission the rate recovery plan results in a ratepayer to shareholder sharing ratio of 75-25. It also noted that the utility had agreed to write off 10 percent of cleanup cost incurred up to Dec. 31, 1996, and to return any profit on the sale of the contaminated manufacturing sites to ratepayers. The new surcharge mechanism, known as the Environmental Response Cost Adjustment, will be implemented and adjusted with the company's winter and summers cost-of-gas adjustments until all approved costs are recovered. Re Northern Utilities, Inc., Docket No. 96-678, April 28, 1997 (Me.P.U.C.). t

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