5. Amortization of Deferred Storm Damage Expense (Joint Petition ¶ 11.A.4 Pursuant to the Settlement, the parties agree to amortize the claim for Company’s deferred storm damage expense over a five-year period beginning when the Settlement rates become effective, instead of the original proposal to use a three-year amortization Company’s period for the storm costs authorized for deferral by the Commission. The agreed upon five year amortization period contained in the Settlement is in the public interest because it is a moderated position that addresses the concern about the extended amortization period resulting Company’s in an inequitable length of time to recover storm costs and concern that the shorter BIE’s amortization period will allow the Company to continue to receive revenue from ratepayers for an expense long after the cost has been fully recovered by the Company. 6. Storm Reserve Account (Joint Petition ¶ 11.A.5) BIE notes the Company initially proposed to recover $5,276,000 of storm damage expense through base rates and that all storm costs in excess of this base rate amount be recovered through its proposed Storm Damage Charge Rider (Rider B). Rider B is a newly proposed 1307(e) rider designed to recover storm costs on an annual and fully reconcilable basis. In proposing Rider B, the Company relied on the recent approval of Storm Commission’s PPL’s Damage Expense Rider (SDER). BIE opposed the Storm Damage Rider. The Settlement provides that Company’s the Company will not establish Rider B as proposed, but instead will establish a Storm Reserve Account. The parties agree the $59,900,000 revenue requirement includes $9,000,000 to be recovered for the purposes of funding the Storm Reserve Account. This $9,000,000 represents a five-year average of storm damage expense, excluding expenses associated with extraordinary storms. The Company will continue to be able to account for extraordinary storm expense through the current practice of petitioning the Commission for approval to defer such expense. The Storm Reserve Account proposed in the Settlement is in the public interest as it helps self-insure the Company for distribution system storm damage expenses. It protects
5. Amortization of Deferred Storm Damage Expense (Joint Petition ¶ 11.A.4 Pursuant to the Settlement, the parties agree to amortize the Company’s claim for deferred storm damage expense over a five-year period beginning when the Settlement rates become effective, instead of the Company’s original proposal to use a three-year amortization period for the storm costs authorized for deferral by the Commission. The agreed upon five year amortization period contained in the Settlement is in the public interest because it is a moderated position that addresses the Company’s concern about the extended amortization period resulting in an inequitable length of time to recover storm costs and BIE’s concern that the shorter amortization period will allow the Company to continue to receive revenue from ratepayers for an expense long after the cost has been fully recovered by the Company. 6. Storm Reserve Account (Joint Petition ¶ 11.A.5) BIE notes the Company initially proposed to recover $5,276,000 of storm damage expense through base rates and that all storm costs in excess of this base rate amount be recovered through its proposed Storm Damage Charge Rider (Rider B). Rider B is a newly proposed 1307(e) rider designed to recover storm costs on an annual and fully reconcilable basis. In proposing Rider B, the Company relied on the Commission’s recent approval of PPL’s Storm Damage Expense Rider (SDER). BIE opposed the Company’s Storm Damage Rider. The Settlement provides that the Company will not establish Rider B as proposed, but instead will establish a Storm Reserve Account. The parties agree the $59,900,000 revenue requirement includes $9,000,000 to be recovered for the purposes of funding the Storm Reserve Account. This $9,000,000 represents a five-year average of storm damage expense, excluding expenses associated with extraordinary storms. The Company will continue to be able to account for extraordinary storm expense through the current practice of petitioning the Commission for approval to defer such expense. The Storm Reserve Account proposed in the Settlement is in the public interest as it helps self-insure the Company for distribution system storm damage expenses. It protects
1348135.docx