ML19309F882
| ML19309F882 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 04/30/1980 |
| From: | Wright R NEW BEDFORD GAS & EDISON LIGHT CO. |
| To: | |
| Shared Package | |
| ML19309F878 | List: |
| References | |
| NUDOCS 8005010538 | |
| Download: ML19309F882 (66) | |
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, 8 005 o 2 o 9 NEW BEDFORD GAS AND EDISON LIGHT COMPANY DIRECT TESTIMONY OF RUSSELL D. WRIGHT 1 Q. Please state your name and business address.
2 A. My name is Russell D. Wright. My business address is New Bedford 3 Gas and Edison Light Company, 693 Purchase Street, New Bedford, 4 Massachusetts.
5 6 Q. What is your position with New Bedford Gas and Edison Light Company?
7 A. I am Controller.
8 9 Q. Would you please describe your educational background, bustaess 10 experience, and principal duties with the Company.
11 A. I am a graduate of Bentley College, Waltham, Massachusetts, where I 12 received a Bachelor of Science Degree in Accounting in 1968. After 13 my graduation I served for two years in the United States Army, 14 whereupon, after being honorably discharged in 1970, I joined NEGEA 15 Service Corporation, a subsidiary of the New England Gas and Electric 16 System. During my period of employment with that Company I worked 17 in a variety of positions, including Supervisor of the Comptroller's 18 . Staff and Supervisor of Utility Accounting. In October 1978 I 19 assumed my present position as Controller. I am responsi' ole for
! 20 all of the budgeting, accounting, and financial control procedures.
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21 of the' Electric Operations Division.
, DIRECT TESTIMONY OF Russell D. Wright 1 Q. Have you ever testified before this Department before?
2 A. No, I have not. I have, however, participated in the preparation 3 of a number of filings before this Commission, including the Company's 4 most recent prior request for general rate relief, DPU 18193. In 5 addition, I have recently submitted written testimony on behalf of 6 Cambridge Electric Light Company in DPU 20140 now pending before 7 the Dep rtment.
8 9 Q. What was the date of the filing in DPU 181937 10 A. The Company filed that case on November 11, 1974, using a test year 11 ended September 30, 1974, for cost of service and rate base. The 12 Department's Order granting rate relief in that proceeding was 13 dated September 30, 1975.
14 15 Q. What is the purpose of your testimony in this proceeding?
16 A. My testimony sets out the financial considerations used in determining 17 the Company's overall requirement for rate relief. In total, this 18 deficiency amounts to $14,652,000. The Company's intent in this 19 proceeding is to increase its rates from the retail sales of electricity 20 by $11,218,000, an increase of 9.6%, and from the retail sales of 21 gas by $3,434,000, an increase of 15.6%. The accompanying schedules 22 and exhibits substantiate this request through the use of a test 23 year ended December 31, 1978 with adjustments appropriate for 24 rate-making purposes. Each Schedule identifies the Electric, Gas 25 and conbined requirements.
1 I
i DIRECT TESTIMONY OF l Russell D. Wright t
1 Q. Mr. Wright, were the financial exhibits and schedules attached to 2 your written testimony prepared by you or under your direct supervision 4
3 and control?
4 A. Yes, they were.
5 6 Q. Will you describe, generally, the manner in which you have prepared l 7 such financial exhibits and any standards used by you in the submission
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8 of this filing.
9 A. I have complied with the Department's regulations covering the
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10 filing requirements of gas and electric companies for rate relief, l 11 as set out in DPU 19019.
l 12 l 13 Q. Would you please describe Schedule One of your testimony?
1 14 A. This Schedule consists of the cost of service of the Company for 1
15 the twelve months ended December 31, 1978, as adjusted. The information l 16 contained on Schedule One is cross-referenced in the supporting 17 schedules and other documents filed as part of this case. This 18 schedule is self-explanatory and demonstrates that the Company's 19 'djusted revenue deficiency is in the amount of $14,652,000; 20 $11,218,000 for electric and $3,434,000 for gas.
21 22 Q. Please describe Schedule Two.
4 23 A. Schedule Two shows the average rate base of the Company, the detail 24 and supporting documentation for which will be discussed in Schedules 25 Five through Twelve. All rate base items with the exception of 26 fuel inventories have been averaged, using December 31, 1977 and
'27 December 31, 1978-balances. With respect to fuel inventory, I have
D$RECTTESTIMONYOF ,
Russell D. Wright i used a thirteen-month average for the period ei.ded December 31, 2 1978.
3 4 Q. Please explain Schedule Three.
5 A. Schedule Three indicates the Cost of Capital computation assumed by 6 the Company in this proceeding. It lists the Company's Long-Term 7 Debt and Common Equity at December 31, 1978, adjusted to reflect 8 the issuance of a $500,000 term note dated June 28, 1979. It 9 further shows the percentage of Long-Term Debt and Common Equity in 10 the Company's capitalization, the cost rate, and the return requirement
- 11 for each. This results in an overall return requirement on rate 12 base of 11.04%. The cost of capital and rate of return which the 13 Company proposes will be covered in detail in the testimony of i
14 Mr. Earl G. Cheney.
! 15 16 Q. Please explain Schedule Four.
17 A. Schedule Four shows the calculation of the effective cost of Long-18 Term Debt to the Company. It details each Series of Long-Term Debt 19 outstanding at December 31, 1978, (including the above-mentioned 20 term note) and is used on Schedule Three in the computation of the 21 overall Cost of Capital.
22 23 Q. Mr. Wright in your discussion of Schedule Two, you stated that
- 24 Schedules Five through Twelve were supporting documentation to 25 Schedule Two, Average Rate Base. Would you now please describe j '
I 26 those Schedules.
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, DIRECT TESTIMONY OF j Russell D. Wright
! 1 A. Yes, the Schedules are as follows:
l 2 Schedule Five shows the functional classification of those items 3 which make up plant in service and the calculation of average plant i 4 in service. It also includes two adjustments to plant in service i
5 to reflect the annualization of extraordinary changes in total 6 plant. The first of these pertains to the Company's investment in l
7 the Wyman No. 4 Generating Unit. This Unit was placed in commercial 8 operation in December, 1978, and is expected to have an estimated 9 useful life of approximately 28 years. The investment in thi0 unit 10 is recorded in our books at December 31, 1978, but is not incluoed 11 in the December 31, 1977 figures. In accepting the use of an 12 average rate base the Company recognizes that there are certain
] 13 normal changes which occur annually in the Company's plant. The i 14 Wyman #4 investment falls outside of the classification, since the 15 Company does not add generating capacity on an annual or routine j 16 basis. We believe that departure from the averaging convention is 1
17 essential in this case to the ability of the Company to earn whatever l 18 level of return should be found appropriate. The plant investment l 19 is unusual and represents a large capital investment in generating 20 capacity for the Company. Thus, we have made this adjustment in 21 order to eliminate. the averaging effect, and the resulting exclusion 1
22 of half the investment, which would frustrate any hope of achieving 23 a permitted rate of return. Conversly the second adjustment seeks 24 to exclude from rate base the averaging impact of the retirement of 25 certain L. P. Equipment. In this case the Company is decreasing 26 its Gas Plant Capacity and applying, in effect, the same logic used 27 in the Wyman No. 4 adjustment.
DIRECT TESTIMONY OF Russell D. Wright 1 The Reserve for Depreciation and Amortization, and the calculation 2 of the Average Reserve are shown by functional classification in 3 Schedule Six.
4 5 Schedule Seven shows the items of prepayments, per our books, a 6 reconciliation of the amounts included in rate base, and the 7 methodology used to determine the split between Gas and Electric. l 8
9 Schedule Eight shows the calculation of the Fuel Inventories, using 10 a thirteen month average.
I 11 12 Materials and Supplies Inventories, excluding fuels, are shown in 13 Schedule Nine. Several appliance items have been excluded to be
- 14 consistent with sound rate-making practice, but have been shown 15 here to reconcile total materials and supplies to our books.
16 17 Schedule T2n is our calculation of working capital and shows Total j 18 Operations and Maintenance Expense per our books. We have eliminated 19 those items recovered through Energy Adjustment Clauses and have 20 used 12.5% in determining the lag on the remaining balance. This 21 method of determining working capital differs from that used in 22 previous rate filings, and is in our opinion a more proper reflection 23 of the Company's actual requirements. Whereas it has been our past 24 practice to use individual rates to determine requirements for 25 Purchased Power / Gas, Payroll and all other Operations and Maintenance 26 Expense, the Company is now adopting a method in which all Operation 27 and Maintenance Expenses, other than those recovered through the 4
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DIRECT TESTIMONY OF Russell D. Wright 1 Energy Adjustment Clauses are at one rate. The Company recognizes 2 that the Power Cost Charge (Electric) has virtually eliminated any 3 lag in the recovery of those expenses, and has, therefore, deducted 4 them accordingly. The Purchased Gas Adjustment Clause, because of
! 5 its built in lag, continues to require a working capital allowance.
6 In this case we have used 15/360. While the company acknowledges 7 that some items for both Electric and Gas may have lags of more or 8 less than 12.5%, it is our opinion that this rate is reflective of 9 the average lag of all other Operations and Maintenance Expense i
10 items.
11 12 Schedule Eleven shows the split of customer deposits between Gas 13 and Electric.
14 15 Schedule Twelve shows the determination of the remaining items of 16 rate base and requires no explanation.
17 18 Q. Will you now describe Schedule Thirteen.
19 A. Schedule Thirteen shows the Compani's cost of service per books for
- 20 the test year ended December 31, 1978, and the pro forma adjustments 21 necessary to normalize the results of a typical test year period.
l 22 These adjustments are shown in detail on Schedules Fifteen through j 23 Twenty-Two and are contained in summary form on Schedule Fourteen.
l l 24 l
25 Q. Will you now please explain Schedules Fifteen through Twenty-Two.
26 A. Yes, the Schedules contain the pro forma adjustments used on Schedules 27 Thirteen and Fourteen and are as follows:
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. DIRECT TESTIMONY OF Russell D. Wright 1 Schedule Fifteen shows payroll expenses in accordance with increases 2 provided for in the settlement with the Brotherhood of Utility 3 Workers of New England, Inc., Locals #333, #338 and #339, which was 4 effective November 1, 1978, and for non-union personnel in accordance 5 with the Company's Wage and Salary Plan.
6 7 Schedule Sixteen shows estimated rate case expense for this proceeding 8 of $29,000 and an annual amortization of this amount over a three-year 9 period of $10,000 per year, $9,000 for Electric and $1,000 for Gas.
10 11 Schedule Seventeen shows the projected increased costs of certain 12 employee benefits. Blue Cross, Blue Shield, and Dental expenses 13 have been annualized based on current contractual estimates. The 14 Pension expense is based upon actual experience for the first 15 quarter ended March 31, 1979.
16 17 Schedule Eighteen reflects the annualization of the Wyman No. 4 18 Generating Unit, Operations and Maintenance expenses.
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20 Schedule Nineteen details savings resulting from reductions in the 21 Company's labor force, referred to in Mr. Donovan's testimony.
22 23 Schedule Twenty details the adjustment made to total book depreciation 24 expense as a result of changes in >:he functional Plant Accrual 25 Rates. These rates are based upon the remaining life of the Company's 26 electric and, gas plant, and will be supported in this proceeding by 27 the direct testimony of Mr. G. Robert Faust of Gilbert Associates.
DIRECT TESTIMONY OF Russell D. Wright i
Schedule Twenty-One details the adjustmeats necessary to recover 2 the Company's investment in certain L. P. Equipment retired in 3 1978.
4 5 Schedule Twenty-Two details projected changes in total payroll 6 taxes. This is primarily attributable to increased FICA Tax Expense, 7 the liuit and rate of which became effective January 1,1979.
8 9 Q. Please describe Schedule Twenty-Three.
f 10 A. Schedule Twenty-Three details the computation of the Attrition 11 Allowance included as an item of Cost of Service. The determination 12 of this allowance will be covered in the direct testimony of Mr. Earl G.
l 13 Cheney.
14 15 Q. Will you now describe Schedules Twenty-Four through Twenty-Seven.
16 A. Yes. Schedules Twenty-Four through Twenty-Seven detail the computations 17 used to arrive at total Federal Income and State Franchise Taxes 13 for the test year. These amounts are included ar. part of the 19 Company's total cost of service determination. I would like to 20 point out that a Federal Tax Rate of 46% was used for all Federal 21 Income Tax Calculacions. This rate became effective January 1, l
22 1979. Further details of these Schedules are as follows:
23 4.
24 Schedule Twenty-Four details the calculation of Federal Income and 25- State Franchise Taxes for all items other than the Dividend Income, 26 and the Storm Damage Reserve reversal.
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. DIRECT TESTIMONY OF Russell D. Wright 1 Schedule Twenty-Five details the separate computation needed to 2 account for Dividend Income. This is necessacy because of the 85%
3 Dividend Exclusion permitted for Federal tax purposes.
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! 5 Schedule Twenty-Six reflects the reversal of the Company's remaining 6 Storm Damage Reserve. This item is shown separately in order to 7 correctly reflect the lower tax rates used when the reserve was 8 established.
9 10 Schedule Twenty-Seven summarizes the Total Federal Income and State
! 11 Franchise Taxes calculated on Schedules Twenty-Four through Twenty-
.I 12 Seven.
j 13 14 Q. Do these income tax calculations differ in any way from the Company's I
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15 present practice of determining this requirement?
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1 16 A. Yes, they do.
17 18 Q. Will you please explain how?
19 A. There are two items affecting the calculation of income taxes which 20 have been treated differently: Allowance for Funds Used During 21 Construction (AFUDC), and Capitalized Expenses. AFUDC has been i
22 excluded because the Company has made no attempt to address the 23 return being allowed on Construction Work in Progress. It is the 24 Company's intent, with this Department's approval, to cease using 25 flow-thre accounting and begin normalizing this item.
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. DIRECT TESTIMONY OF Russell D. Wright 1 What is the purpose of this change in accounting?
Q. l 2 A. The Company currently records tax offsets above the line for interest 3 relating to Funds Borrowed for Construction. Since our current 4 practice is to record AFUDC entirely below the line, there is a 5 mismatching of related items. By normalizing, we will eliminate 6 this mismatch and record our taxes in a more correct manner. The 7 Company currently uses normalization for all other items, so that 8 this change would make our accounting treatment consistent throughout.
9 It is our intention to treat capitalized expenses in this same 10 manner and eliminate the flow-thru impact. With respect to this 11 item, the Company will be able to now reflect the tax impact of i 12 this deduction as a reduction to expenses when the assets to which 1
13 they relate are complete, rather than when they are still under 14 construction.
15 16 Q. Will you now please describe Schedule Twenty-Eight?
17 A. This Schedule shows the Company's weather normalization adjustment 18 applicable to its annual volume of Gas Sales. The determination of i
19 this adjustment will be covered in the direct testimony of Mr. J. J.
20 Tasillo, Jr.
21 22 Q. Mr. Wright, does this complete your testimony concerning Cost of 1
23 Service and Rate Base?
24 A. Yes, it does.
25 26 Q. Mr. Wright, on December 18, 1978, the Department notified all 27 utilities in this State that it is the Department's policy to i
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DIRECf TESTIMONY OF Russell D. Wright I require any utility seeking a rate increase to document how that 2 requested increase conforms to the voluntary anti-inflationary 3 guidelines promulgated by the Federal Council on Wage and Price 4 Stability (CWPS). Are you familiar with such guidelines?
5 A. Yes I am. We have examined the guidelines carefully in an effort 6 to determine how and to what extent they apply to our situation and 7 whether the increase in revenue requirements to which we believe we 8 are entitled under traditional rate-making and constitutional 9 principles, complies with applicable standards, or qualifies for an 10 exemption from them. We are aware that the issue of compliance or 11 exemption is one which is delegated for decision by the guidelines 12 to state utility commissions in the case of state jurisdictional 13 retail rates, and we believe a brief presentation of our unusual 14 factual situation may be helpful to the Department.
15 16 Q. Would you describe briefly your understanding of how these guidelines 17 are intended to apply to public utilities such as New Bedford Gas 18 and Edison Light Company?
19 A. There are two measurement methods under the guidelines and there 20 are also provisions for exemptions and special situations. The 21 first measurement method is the Price Deceleration Standard. This 22 is the general standard applied to other industries, but the guidelines s
23 expressly recognize that it is inappropriate for utilities, primarily 24 as the result of rapidly escalating fuel costs beyond the reasonable 25 control of the utilities. The second method is the Gross Margin 26 Standard. Under this method, generally speaking, a utility is 27 allowed to increase its rates, exclusive of fuel and purchased DIRECT TESTIMONY OF Russell D. Wright 1 power costs, by approximately 6.5% without any exemption or special 2 treatment and using prescribed time periods for comparison. The 3 gross margin standard is set forth in Sections 705 C-8 and 705 A-6 4 of the Guidelines of the CWPS.
5 6 Q. Have you made any conclusions about the base rate increase which 1 7 the Company is seeking in this proceeding and the application of 8 the Guidelines?
9 A. Yes. Although tie increase being sought, if allowed in full, would 10 be greater than 6 5% on an annual basis, the Guidelines do not lend l
11 themselves to precise application and, in any case, the Company 12 qualifies in our view for exemption because of the gross inequities 13 which would result were it unable to obtain its requested increase.
14 15 The Guidelines make clear that state regulatory agencies are not 16 being called upon to disregard traditional rate-making standards in 17 seeking anti-inflationary solutions. It would be most anomalous to 18 invoke an inflexible percentage increase standard based upon 1978-1979 19 price comparisons to the detriment of a company which has not 20 sought base rate increases for over four years.
21 22 TheGuidelinesdonotpurporttoabo5ishconstitutionalstandards 23 which apply to utility rate increases and which entitle the Company 24 to recover its cost of service including a fair return on investments 25 in plant, property and equipment used to provide service.
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DIRbCf TESTIMONY OF Russell D. Wright 1 Q. Do you have any specific comments on the Gross Margin Standard 2 Guidelines in the context of the proceeding?
3 A. Yes. The comparative periods which would be used (calendar quarters 4 ending September 30, 1978 and 1979) would be wholly inappropriate 5 because no definitive action will probably be taken with respect to 6 the Company's rate increase request until the beginning of 1980.
7 Further, the comparative standard assumes an adequate rate level in 8 1978 and penalizes a company which does not seek annual rate increases.
9 In addition to the lag involved which is unavoidable under currently 10 effective procedures, the new rates will be expected to operate for 11 a considerable period of time without change, thus compounding the 12 inequity of applying an inflexible standard. We hope that the 13 Department will be guided by its knowledge that the Company's rate 14 history substantiates its anti-inflationary performance. The 15 Department will not be in a position to know.until the completion 16 of these proceedings the precise level of rate relief to which it
, 17 believes the Company entitled. The Company believes that it has 18 made every effort to observe the federal anti-inflation standards 19 over a period of years and that its past performance and its financial 20 needs to be demonstrated in this proceeding surely call for an 21 exemption from the application of a fixed percentage limitation 22 which would result in gross inequity in this case. Inadequate rate 23 relief in this proceeding by traditional and constitutional standards, 24 must result in a new request for ra
- r6 Lief whereas adequate 25 relief provides an opportunftt & r -e Company to avoid in the 26 future as it has in the past., frequent, expensive rate filings.
DIRdCTTESTIMONYOF Russell D. Wright L
Q. Does this conclude your comments on the Voluntary Wage and Price 2 StaiJards?
3 A. Yes, it does.
4 5 Q. Does this conclude your prepared testimony?
6 A. Yes.
NEW BEDFORD GAS AND EDISON LIGHT COMPANY 1979 Rate Case Index of Schedules to Direct Testimony of Russell D. Wright Schedule Number 1 Cost of Service and Revenue Deficiency 2 Average Rate Base 3 Cost of Capital 4 Effective Cost of Long-term Debt 5 Plant in Service 6 Reserve for Depreciation and Amortization 7 Prepayments 8 Fuel Inventory 9 Other Materials and Supplies 10 Cash Working Capital
, 11 Customer Deposits 12 Other Rate Base Items 13 Cost of Service 14 Summary of Adjustments
- 15 Payroll Adjustments 16 Amortization of Rate Case Expenses 17 Employee Benefits Adjustment 18 Annulization of Wyman Unit No. 4 Expenses 19 Labor Force Reduction Savings Adjustment 20 Depreciation Adjustments 21 Annulization of Property Loss Amortization 22 Payroll Tax Adjustments 23 Attrition Allowance 24 Calculation of Income Taxes 25 Calculation of Other Tax Adjustments-Dividends Received 26 Calculation of Other Tax Adjustments-Storm Damage Reserve Reversal 27 Summary of Income Taxes i
28 Weather Normalization Adjustment i
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NEW BEDFORD GAS AND EDISON LIGHT COMPANY Cost of Service and Revenue Deficiency Test Year Ended December 31, 1978 4
(Dollars in Thousands)
Line Schedule No. Combined Electric Gas Reference Cost of Service 1 Operation and Maintenance Expense $113 739 $ 93 813 $19 926 2 Depreciation and Amortization Expense 7 265 6 477 788 3 Taxes Other Than Income Taxes 10 069 8 346 1 723 .4 Massachusetts Franchise Tax 1 313 1 152 161 5 Federal Income Tax 8 690 7 624 1 066 '6 Amortization of Investment Tax Credits (250) (225) (25) 7 Return on Rate Base 14 801 13 009 1 792 8 Attrition Allowance 670 589 81 9 Total Cost of Service $156 297 $130 785 $25 512 Revenues 10 Sales of Electricity / Gas 139 459 117 428 22 031 11 Adj ustments - (39) -
(39) 12 Other Operating Revenues 2 225 2 139 86 13 Total Operating Revenues 141 645 119 567 22 078
- 14. Revenue Defiency $ 14 652 $ 11 218 $ 3 434 5
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NEW BEDFORD GAS AND EDISON LIGHT COMPANY Average Rate Lase Test Year Ended December 31, 1978 (Dollars in Thousands)
Line Schedule No. Combined Electric Gas Reference 1 Utility Plant In Service $195 685 $173 590 $22 095 2 Reserve for Depreciation and Amortization 51 220 45 956 5 264 3 Net Utility Plant 144 465 127 634 16 831 4 Add - Prepayments 83 73 10 5 - Fuel Stecks 1 208 383 825 6 - Other Materials and Supplies 2 865 2 666 199 7 - Cash Working Capital 4 392 3 090 1 302 8 - Investment in Generating Companies 384 384 -
9 Deduct - Customer Advances for Construction 1 088 1 088 -
10 - Customer Deposits 1 755 1 560 195 11 - Reserve for Deferred Taxes 15 724 13 091 2 633 12 - Pre 1971 Unamortized Investment Tax Credit 764 660 104 13 Rate. Base $134 066 $117 831 $16 235 El E
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NEW BEDFORD GAS AND EDISON LIGHT COMPANY SCHEDULE 3 Cost of Capital Test Year Ended December 31, 1978 (Dollars in Thousands)
Line Schedule No. Principal Percentage Cost Return Reference 1 Long-Term Debt 2 Series A, Notes $ 2 765 2.19% 4.94% .11%
3 Series B, Notes 5 232 4.15 6.14 .25 4 Series C, Notes 4 162 3.30 4.53 .15 5 Series D, Notes 8 793 6.98 5.58 .39 6 Series E, Notes 7 489 5.94 8.15 .49 7 Series F, Notes 17 468 13.86 8.37 1.16 8 Series G, Notes 14 100 11.19 10.66 1.19 9 Term Note 500 .40 4.83 .02 10 Total Long-Term Debt 60 509 48.01 3.76 11 Common Equity 65 513 51.99 14.00 7.28 12 Total $126 022 100.00% 11.04%
NEW BEDFORD GAS AND EDISON LIGHT COMPANY Effective Cost of Long-Term Debt Test Year Ended December 31, 1978 (Dollars in Thousands)
Amount Total Net Cost Net Annual laterest Line Long-Te rm Notes Coupon Original Discount Total Proceeds to Proceeds Cost to Maturity No. Series Dated Due Term Rate lasue and Expense Premium to Company Maturity outstanding Amcunt Percent 1 A 4-01-57 4-01-87 30 Years 4.9% $ 3 500 $31 $- $ 3 469 4.94% $ 2 765 $ 137 2 8 6-01-67 6-01-97 30 Years 6 1/8 6 000 29 17 5 988 6.14 5 232 321 3 C 4-01-61 4-01-86 25 Years 4 1/2 5 000 35 -
4 965 4.53 4 162 189 4 D 4-01-67 4-01-92 25 Years 5 5/8 10 000 39 122 10 083 5.58 8 793 491 5 E 12-01-70 12-01-95 25 Years 8 1/8 9 000 37 10 8 973 8.15 7 489 610 6 F 10-01-73 10-01-98 25 Years 8 3/8 20 000 66 72 20 006 8.37 17 468 1 462 7 C 12-01-75 12-01-00 25 Years 10 5/8 15 000 89 33 14 944 10.66 14 100 1 503 8 60 009 4 713 7.85%
9 Pro Forma 10 Term Note 6-28-79 6-28-84 5 Years 3.0 250 1 249 3.01 250 8 11 65/8 250 1 249 6.65 250 17 12 Sec 509 $4 738 7.83%
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NEW BEDFORD CAS AND EDISON LIGHT COMPAh7 Plant in Service Test Year Ended December 31, 1978 (Dollars in Thousands)
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Combined Electric Gas
{ Line December 31, December 31 December 31, December 31, December 31, December 31,
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- 1.ctonal Classification 1977 1978 Average 1977 1978 Average 1977 1978 tverate i . Steam Production $ 15 168 $ 17 934 $ 15 168 $ 17 934 $ -
2 Manufactured Gas Prod action 899 447 - - 899 447 3 Other Production 1 557 1 590 1 557 1 590 - -
t 4 Total Production Plant 17 624 19 971 16 725 19 524 899 447 5 Transmission Plant - Electric 38 075 38 686 38 075 38 686 - -
6 Distribution Plant - Electric 107 559 113 509 107 559 113 509 - -
t 7 Transmission and Distribution 8 Plant - Gas 20 024 21 023 - -
20 024 21 023 j_ 9 General Plant 5 898 6 814 4 792 5 676 1 106 1 138 T
0 . Total Plant in Service 189 180 200 003 $194 592 167 151 177 395 $172 273 22 029 22 608 .$22 319 1 Adjustments to Average Plant 2 -in Service resulting from
'l major changes occuring in 1978:
4' Addition of 1.4325% Ownership i Interest in Wyman #4 6 Generating Facilities 2 633 2 633
.7 Retirement of Liquefied
- 8 Petroleum Gas Equipment ___ (448) (448) i J Total Adjusted Plant in a Se rvice $191 365 $200 003 $195 685 $169 784 $177 395 $173 590 $21 581 $22 608 $22 095-i
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NEW BEDFORD CAS AND EDISON LIGHT COMPANY Reserve for Depreciation and Amortization Test Year Ended December 31, 1978 (Dollars in Thousands)
Combined Electric Gas December 31 December 31, December 31, December 3?., December 31, December 31 Li'.e No _ Functional Classification 1977 1978 Average 1977 1978 Average 1977 1978 Average a Steam Production $ 8 458 $ 8 963 $ 8 458 $ 8 963 $ - S -
2 Manufactured Gan ?-oduction 306 60 - -
306 60 3 Other Production 207 269 207 269 - -
Total Production Plant 8 971 9 292 8 665 9 232 306 60 Transmission Plant - Electric 8 947 10 186 8 947 10 186 - -
Distribution Plant - Electric 24 882 27 434 24 bei 27 434 - -
/ Transmission and Distribution n Plant - Gas 4 384 4 813 - -
4 384 4 813 9 General Plant 1 672 1 858 1 199 1 367 473 491 10 Total Plant in Service $48 856 $53 583 $51 220 $43 693 $48 219 $45 956 $5 163 $5 364 $5 264 m
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9 NEW BEDFORD GAS AND EDISON LIGHT COMPANY Prepayments Test Year Ended December 31, 1978 (Dollars in Thousands)
Combined Electric Gas Line December 31, December 31, December 31, December 31, . December 31 December 31 , Items 1977 1978 Average 1977 1978 Average' 1977 1978 Ayerage
! . Insurance * $ 70 $ 77 $62 $68 $8 $9 2 Postage *- 11 7 9 6 2 1 i Property Taxes 4 660 4 144 - - - -
4 Total Prepayments 4 741 4 228 71 74 10 10 5 Less P"operty Taxes 4 660 4 144 - - - -
6 Total $ 81 $ 84 $83 $71 $74 $73 $10 $10 $10 7
- Basis of Allocations between Electric and Gas:
8 Insurance: Based on the ratio of Net Electric Plant and Net Gas Plant in Service to 9 Total Net Electric and Gas Plant in Service Combined.
10 Net Electric Plant .$123 458 88.0% $129 176 88.2%
11 Net Cas Plant 16 866 12.0% 17 244- 11.8%
12 - Total Utility Plant '$140 323 100.0% $146 420 100.0%
13 Postage: Based on the Ratio of Total Annual Average Number of Electric Customers and Gas 14 Customers to the Total Annual Average Number of Electric and Gas Customers Combined, 15 Excluding Customers Counted Twice.
16 Total Avg. Annual Number 17 Electric Customers 200 898 81.3% 206 400 81.6% y 18 Total Avg. Annual Number g 19 Cas Customers 46 247 18.7% 46 472 18.4% p 20 Total Avg. Annual Number m 21 Customers 247 145 100.0% 252 872 100.0% -4 3
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NEW BEDFORD GAS AND EDISON LIGHT COMPANY Fuel Inventory T-?st Year Ended December 31, 1978 (Dollars in Thousands)
Combined Electric Gas Line Month End Month End Month End No. Year Month Balance Avera ge Balance Average Balance Average, 1 1977 December $ 1 043 $ 362 $ 681 2 1978 -January 966 319 647 3 February 906 312 594 4 March 1 265 362 903 5 April 1 155 376 779 6 May 1 244 354 890 7 June 1 263- 382 881 8 July 1 238 369 869 9 August 1 190 340 850 10 September 1 163 336 827 11 October 1 212 257 955 12 November 1 217 285 932 y 13 December 1 840 921 919 14 Total $15 702 $1 208 $4 975 $383 $10 727 $825 m
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NEW BEDFORD GAS AND EDISON LIGHT C'* *ANY Other Materials and Supplies Test Year Ended D4cember 31, 1978 (Dollars in Thousands)
Combined Electric Cas Line December 31, December 31, December 31, December 31, December 31, December 31, ES:_ Ite" 1977 1978 Average 1977 1978 Averase 1977 1978 Average 1 Power Station - St.pplies $ 15 $ 15 $ 15 $ 15 $- $-
,2 Power Station - Repair ? arts 86 91 86 91 - -
3 . Substation Repair Parts 10 9 10 9 - -
4 Wire, Cable and Pole Line 5 Material 2 143 1 774 2 143 1 774 - -
6 Underground Conduit 260 265 260 265 - -
7 Street Lighting 186 157 186 157 - -
8 Reels and Containers 62 47 62 47 - -
9 r.ouse Wiring 1 2 1 2 - -
10 Pipe Valves, and Fittings 204 175 - -
.204 175
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. Miscellaneous 109 119 _ 99 110 10 9 12 Total M&S Applicable to 13 Rate Base 3 076 2 654 $2 865 12,862 $2 470 $2 666 $214 $184 $199
.14 Water Heaters -
11 15 Conversion Burners -
27 16 Appliances 59 53 17 Appliance Repair Parts 18 12 y m
. 18 Fuels 1 043 1 840 N
19 Total M&S per Balance Sheet $4 196 $4 597 e e
NEW BEDFORD GAS AND EDISON LIGHT COMPANv SCHEDULE 10 cash Working Capital Test Year Ended December 31, 1978 (Dollars in Thousands)
Line No. Item Combined Electric Gas 1 Gas / Power Production Expenses $ 79 449 $65 975 $13 474 2 Local Storage Expenses 176 -
176 3 Transmission Expenses - Electric 3 232 3 232 -
4 Distribution Expenses - Electric 7 013 7 013 -
5 Transmission and Distribution Expenses - Gas 2 673 -
2 673 6 Customer Accounts Expenses 5 348 4 441 907 7 Sales Expenses (Marketing and Consumer 8 Relations) 745 473 272 9 Administrative and General Expenses 11 123 9 304 1 819 10 Total Operations and Maintenance Expenses 109 759 90 438 19 321 11 Less - Expenses Recovered through Energy 12 Adjustment Clauses 79 077 65 722 13 355 13 Net Operations and Maintenance Expenses 30 682 24 716 5 966 14 Cash Working Capital Allowance @ 12.5%
15 for Operations and Maintenance 3 836 3 090 746 16 Purchased Gas Allowance ($13,355 x 15/360) 556 -
556 17 Total Cash Working Capital Allowance $ 4 392 $ 3 090 $ 1 302 1
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. EEW BEDFORD CAS AND EDISON LIGHT COMPANY a
Customer Deposits Test Year Ended December 31, 1978 (Dollars in Thousands)
Combined Electric Gas Line- December 31, December 31, December 31, December 31 December 31, December 31,
' NO- 1977 1978 Average 1977 1978 Averase 1977 1978 Averagg ;
I; Cape & Vineyard District $ 734 $ 888 $ 734 $ 888 $- $-
2- New Bedford and Plymouth
. 3 Districts (A) 812 1 076 643 854 169 222 4- Total $1 546 $1 964 $1 755 $1 377 $1 742 $1 560 $169 $222 $195 5 (A) Basis for Allocation between Electric and Gas Customer Deposits of New Bedford and Plymouth Districts.
6 Allocated on the Ratio of Total Annual Revenues for Electric Commercial and Industrial Customers and 7 . Total Annual Revenues for Gas Commercial and Industrial Customers to Total Electric and Gas Commercial-8 and Industrial Customers of the New Bedford and Plymouth Districts.
- 9 New Bedford and Plymouth Districts
10 Commercial and Industrial Revenues -
11 12 Months Ended 12 Months Ended December 31, 1977 % December 31, 1978 %
. 12 Electric:
13 Commercial Customers $15 632 $16 180 14 Industrial Customers 13 589 14 545 15 Total Electric 29 221 79.2% 30 725 79.4%
16 ' Gas: ,
- 17. Commercial Customers 3 932 3 893 Q 18 Industrial Customers 3 758 4 093 g 19 Total Gas 7 690 20.8% 7 986 20.6% p en 20 Total Electric and Gas $36 911 100.0% $38 711 100.0% ;
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VEW BEDFORD Cl.S AND EDISON LIGHT COMPANY Other Rate Base Items Test Year Ended December 31, 1978 i.
(Dollars in Thousands)
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Combined Electric Cas
~ Line December 31, December 31 December 31, D G ber 31, December 31 December 31, NO- It's 1977 1978 Average 1977 1978 1977 1978 Averase Averase 1 Additions:
.2 Investment in Generating Company $ 384 $ 384 $ 384 $ 384 $ 384 $ 384' $ - $'- $ - '
- 3. Deductions:
4- Customer Advances for 5 Construction 853 1 323 1 088 853 1 323 1 088 - - -
'6_ Reserve for Deferred Taxes. 14 402 17 046 15 724 11 921 14 261 13 091 2 481 2 785 2 633 7 Pre 1971 Unamortized Investment 8 Tax Credits 784 743 764 677 642 660 107 101 104
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NEW BEDFORD CAS AND EDISON LIGHT C0!1PANY Cost of Service Test Year Ended December 31, 1978 (Dollars in Thousands)
Line Combined Electric Gas Schedule No. Per Books Adjustments Pro Forma Per Books Adjustments Pro Forma Per Books Adjustments Pro Forma Reference 1 Operations aad Maintenance $109 760 $3 979 $113 739 $ 90 438 $3 375 $ 93 813 $19 322 $604 $19 926 2 Depreciation Expense 7 052 113 7 165 6 429 16 6 445 623 97 720 3 Amortization of Utility 4 Plant. 33 -
33 32 -
32 1 -
1 5 Amortization of Property 6 Losses 6 61 67 - - -
6 61 67 7 Taxes Other Than Income 8 Taxes 9 975 94 10 069 8 269 77 8 346 1 706 17 1 723 9 Subtotal $126 826 $4 247 131 073 $105 168 {3_f ';8 108 636 [21 6!8 $779 22 437 10 Massachusetts Franchise Tax 1 313 1 152 161 11: Federal Income Tax ~ 8 690 7 624 1 066 12 Amortization of Investment 13 Credit (250) (225) (25) 14 Subtotal 140 826 117 187 23 639 15 Return on Rate Base ($134 066 x 11.04%) 14 801 ($117 831 x 11.04%) 13 00a ($16 235 x 11.041) 1 92 h 9
16 Attrition Allowance 670 589 81 g 17 Total Cost of Service $156 297 $130 785 .$25 512 0
NEW BEDFORD GAS AND EDISON LIGHT COMPANY SCHEDULE 14 Summary of Adjustments Test Year Ended December 31, 1978 4
(Dollars in Thousands)
Line Schedule No. Combined Electric Gas Reference 1 Operations and Maintenance 2 Annualization of Wage Increases $3 174 $2 603 $ 571 3 Payment to Massachusetts 4 Taxpayers' Foundation (2) (2) -
5 Amortization of Rate Case Expense 10 9 1 6 Employee Benefits Costs 971 795 17o ,
7 Annualization of Wyman No. 4 8 Expenses 73 73 -
9 Labor Force Reduction Savings (351) (196) (155) 10 Interest on Customer Deposits 104 93 11 1
Total Operations and Maintenance
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11 12 Adjustments $3 979 $3 375 $ 604 13 Depreciation $ 113 $ 16 $ 97 14 Amortization of Property Losses $ 61 $ - $ 61 15 Taxes Other Than Income Taxes 16 Payroll Tax Expense $ 94 $ 77 $ 17 NEW BEDf0RD GAS AND EDISON LIGHT COMPANY Payroll Adjustments Test Year Ended December 31, 1978 (Dollars in Thousands)
Line Combined Electric Gas No. Amount Amount Amount 1 Labor Adjustment for 1978 2 Payroll Charged to Operations and Maintenance, 3 Twelve Months Ended October 31, 1978 $13 814 $11 327 $2 487 4 . Wage Increase @ 7.5% 1 036 850 186 5 Portion of Increase Not Included in Test 6 Year January 1 - October 31, 1978 $ 863 $ 708 $155 7 Labor Adjustment for 1979 8 Payroll Charged to Operations and Maintenance,
-9 Twelve Months Ended October 31, 1979 14 850 12 177 2 673 10 Wage Increase @ 7.5% 1 114 913 201 11 Labor Adjustment for 1980 12 Payroll Charged to Operations and Maintenance, 13 Twelve Months Ended October 31, 1980 15 964 13 090 2 874 E
14 Wage Increase @ 7.5% 1 197 982 215y 15 Total Payroll Adjustment $3 174 $2 603 $571 m 16 Payroll Adjustments were allocated between Electric and Gas based on the actual salaries and wages charged 17 to Electric and Gas for twelve months ended December 31, 1978 as follows:
18 Total Salaries and Wages Electric @ 12/31/78 $16 562 82%
19 Total Salaries and Wages Gas @ 12/31/78 3 619 18 20 Total Salaries and Wages $20 181 100%
NEW BEDFORD GAS AND EDISON LIGHT COMPANY SCIEDULE 16 Amortization of Rate Case Expenses Test Year Ended December 31, 1978 (Dollars in Thousands)
Line No. Total Electric Gac 1 Estimated Cost of Study to 2 determine Depreciable lives 3 of Utility Plant in Service 4 at December 31, 1978. Study 5 was performed by Commonwealth 6 Gilbert Associates $29 $26 $3 7 Costs to be Amortized over 8 3 years beginning in 1979. 10 9 1 9 Allocation between Electric and Gas based on net 10 utility plant in service at December 31, 1978 as follows:
Amount Allocation Rate 11 Net Electric Utility Plant in Service $129 176 88%
12 Net Gas Utility Plant in Service 17 244 12 13 Total Utility Plant in Service $146 420 100%
NEW BEDFORD GAS AND EDISON LIGHT COMPANY SCHEDULE 17 Employee Benefits Adjustment Test Year Ended December 31, 1978 (Dollars in Thousands)
Line Combined Electric Gas No. Amount Amount Amount 1 Pension Adjustment 2 Actual Pensions Charged to Operations Expense -
3 12 months ended December 31, 1978 $1 668 $1 372 $296 4 Estimated Pension Expense for Year Beginning 5 January 1,1979 Ba'ad on 1st Quarter Experience 6 Ending March 31, 1> 2 150 1 768 382 7 Projected Increase $482 $396 $ 86 8 Blue Cross / Blue Shield 9 Actual Blue Cross / Blue Shield and Dental Expenses 10 Charged to Operations Expense 12 Months Ended 11 December 31, 1978 1 061 865 196 12 Estimated Contractual Blue Cross / Blue Shield and 13 Dental Expenses for the Year Beginning 14 January 1, 1979 1 317 1 073 244 15 Projected Increase 256 208 48 16 Employee Savings Plan 17 Actual Employee Savings Plan Expenses Charged to 18 Operations Expense 12 Months Ended December 31, 1978 510 419 91 19 Estimated Employee Savings Plan Expenses for the Year 20 Beginning January 1,1979 586 481 105 21 Projected Increase 76 62 14 22 Other Benefits 23 Actual Life Insurance, Medicare B, and Supplemental 24 Payments in lieu of Insurance Charged Operations 23 Expense - 12 Months Ended December 31, 1978 320 263 57 26 Estimated Expenses, for Other Benefits, to be 27 Expensed for Year Beginning January 1,1979 477 392 85 28 Projected Increase 157 129 28 29 Total Employee Benefits Adjustment $971 $795 $176
NEW BEDFORD GAS AND EDISON LIGHT COMPANY SCHEDULE 18 Annualization of Wyman No. 4 Expenses Test Year Ended December 31, 1978 (Dollars in Thousands)
Line No. Amount 1 To include expense of operating and maintaining 2 New Bedford Gas and Edison Light Company's 3 1.4325% ownership interest in Central 4 Maine Power Company's Wyman No. 4 Generating 5 Unit which went into commercial operation 6 Operation on December 1, 1978.
7 Budgeted Operations and Maintenance 8 Expense for the twelve months ended December 31, 9 1979.
10 Operations $59 11 Maintenance 20 12 Total Budgeted Wyman #4 Expenses for 1979 79 13 Less: Amount included in December, 1978 __6 14 Total Annualization Adjustment Wyman #4 Expenses $73 d
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, O 1s NEW BEDFORD CAS AND EDISON LIGHT COMPANY Labor Force Reduction Savings Adjustment ,
Test Year Ended December 31, 1978 (Dollars in Thousands)
Original Allocation New Allocation Savings
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- Total Electric Gas Electric Cas Combined Electric Cas NO- Payroll } Amount } Amount } Amount } Amount Amount Amount Am3nt 1 New Employee Allocations:
2 1 Employee $ 57 -
$- 62% $ 35 13% $ 7 3 4 Employees 139 - - - -
75 105 - -
4 2 Employees 79 - - - -
61 31 12' 6 5 1 Employee 46 - - - -
73 33 - -
6 1 Employee 66 - - - -
70 46 - -
7 1 Employee 41 - - - -
60 24 - -
8 1 Employee 14 - - - -
50 7 - -
9 2 Employees 76 - - - -
8 6 - -
to 1 Employee. 65 - - - -
5 3 - -
11 Total New Employees $290 $ 13 $(303) $(290) $(13) 12 Revised Employee Allocations:
13 1 Employee 17 83 14 17 3 77 $ 13 16 $ 3 14 1 Employee 33 83 27 17 6 72 24 15 5 15 2 Employees 81 100 81 - -
85 69 - -
16 1 Employee 43 - -
100 43 80 35 - -
17 1 Employee 52 100 52 - - 80 42 - -
18 1 Employee 47 15 7 85 40 12 6 68 32 19 1 Employee- 18 83 15 17 3 66 12 14 2 20 2 Employees 96 83 .80 17 16 62 59 13 12 21 1 Employee 45 - -
100 45 75 34 - -
22 7 Employees 237 83 197 17 40 61 144 12 29 23 2 Employees 51 37 19 63 32 27 14 46 23 24 1 Employee 26 100 26 - -
73 19 - -
25 1 Employee 18 90 16 10 2 63 11 7 1 26 1 Employee. . 43 80 35 20 8 52 23 13 6 27 2 Employees 51 58 30 42 21 35 _
18 25 13 24 -2 Employees 72 83 60 17 12 50 36 to 7 29 1 Employee. 37 63 23 27 14 38 14 22 8 30 1 Employee 46 78 36 22 10 43 20 12 5 31 1 Employee 51 83 42 17 9 8 4 - -
Total Revised Employee Allocations $760 $304 $597 $146 321 163 158 32 Emp'loyees Terminated:
33 '10 Employees 290 100 $290 -
$- g 34 1 Employee 21 60 13 40 8 - - - - e 31 1 Employee 22 90 20 10 2 - - - -
E 36 Total Employees Terminated $323 $ 10 $- $- 333 323 10
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e 37 Total Reorganization Savings $ 351 $ 196 $155 y-
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NEW BEDFORD CAS AND EDISON LICHT COMPAhT Depreciation Adjustments Test Year Ended December 31, 1978 (Dollars in Thousands)
Combined Electric Cas Line Per Books As Adjusted Adjustment Per Books As Adjusted Adjustment Per Books As Adjusted Adjustment No. Amount Amount Amount Rate Amount Rate Amount Amount Rate Amount Rate Amount Amount 1 Steam Production Plant $ 540 $ 549 3.57% $ 540 3.12% $ 549 -% $- -1 $-
2 Manufactured Gas Production 3 Plant 22 13 - - - -
4.75 22 6.07 13 4 Other Production Plant 67 85 4.29 67 5.36 85 - - - -
.-Total Production Plant 5 629 647 -
607 -
634 - 22 -
13 6 Transmission Plant -
7 Electric 1 283 1 110 3.72 1 283 3.19 1 110 - - - -
8 Distribution Plant -
9 Electric' 4 380 4 544 4.03 4 380 4.07 4 544 - - - -
10 -Transmission and Distribution 11 Plant - Gas 564 666 - - - -
2.80 564 3.22 666 12 Leased Water Heaters -16 22 - - - -
5.06 16 7.56 22 h G
13 Ceneral Plant 195 191 3.60 159 3.19 157 3.43 36 3.24 34 g
.14 Total. $7 067 $7 180 $113 3.92% _$6 429 3.78% $6 445 .[16 2.91% $638 3.30% $735 197 Ei I
NEW BEDFORD GAS AND EDISON LIGHT COMPANY SCHEDULE 21 Annualization of Property Loss Amortization Test Year Ended December 31, 1978 (Dollars in Thousands)
Line Gas No. Amount 1 In December, 1978 the Company requested verbal 2 permission to use account 182, Extraordinary 3 Property Losses, for unrecovered depreciation 4 in connection with the abandonment of liquefied 5 'atroleum Plant Equipment. The amortization 6 period to be three years beginning in 7 December, 1978. Formal written application 8 was made to the Department of Public Utilities 9 on January 4,1979.
10 Total Amount to be Amortized $201 11 One year's amortization 67 12 Amortized in December, 1978 6 13 Total Adjustment $61 l-I
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NEW HEDFORD GAS AND EDISON LIGHT COMPANY SCHEDULE 22 Payroll Tax Adjustments Test Year Ended December 31, 1978 (Dollars in Thousands)
Combined Electric Gas Line Amount Amount Amount No.
1 FICA Expense 2 Total 1978 Payroll $20 181 3 7.5% Inccease 1 514 4 $21 695 5 Percent of 1978 Payroll Allocation:
6 Income $15 587 77%
7 Other 4 594 23%
8 20 181 100%
9 Employee Salary Breakdown 10 (229) over $22 900 6 204 11 (859) under $22 900 15 505 12 -20 749 13 FICA Base 14 (229) x $22 900 5 244 l 15 (859) 15 505 j 16 20 749 17 @ 6.13% $ 1 272 18 Applicable to Operations @ 77% $ 979 $803 $176 19 Applicable to Operations in 1978 870 714 156 20 Increase in FICA Expense $109 .$89 $20 21 State Unemployment Tax Expense 22 1 088 Employees x $6 000 ~ 6 528 23 @ 2.7%
- 24 176 25 Applicable to operations @ 77% 136 112 24 26 Applicable to Operations in 1978 146 120 ~ 26 .
27 Decrease in State Unemployment Tax Expense (10) (8) (2) i 28 Federal Unemployment Tax Expense 29 1 088 Employees x $6 000 6 528 !
10 @ .7%
11 46 32 Applicable to Operations @ 77% 35 29 6 32 Applicable to Operations in 1978 40 33 7 34 Decrease in Federal Unemployment Tax Expense (5) _14) _{1) 35 Total Payroll Tax Adjustments $ 94 E jl7 1
36 Payroll Tax Adjustments were allocated between 37 Elcetric and Gas based on the actual 1978 Payroll 38 Taxes incurred by Electric and Gas.
NEW BEDFORD GAS AND EDISON LIGHT COMPANY SCHEDULE 23 Attrition Allowance
- Test Year Ended December 31, 1978 (Dollars in Thousands)
Line No. Combined Electric Gas-1 Computation of Attrition Allowance 2 Rate Base $134 066 $117 831 $16 235 3 Attrition Factor .50% .50% .50%
4 Attrition Allowance- $ 670 $ 589 $ 81 4
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NEW BEDFORD GAS AND EDISON LIGliT COMPANY Calculation of Income Taxes Test Year Ended December 31, 1978 (Dollars in Thousands)
Line Schedule No. Combined Electric Gas Reference 1 Rate Base $134 066 $117 831 $16 235 2 Return Requirement (11.04% of Rate 3 Base) $14 801 $13 009 $1 792 4 Attrition Allowance 670 589 81 5 Add:
6 Non-Deductible Depreciation Expense 120 107 13
'7 Deduct:
8 Interest Charges (3.76% of Rate Base) (5 040) (4 430) (610) 9 Amortization of Investment Tax Credit (250) (225) (25) 10 Return on Investment Generating 11 Companies (55) (55) -
12 Reversal of Reserve for Storm Damage (116) (116) -
13 Net 10 130 8 879 1 251 14 Taxable Income (Line 13 x 1.9806) $20 063 $17 585 $2 478 iq 5
15 Federal Income Tax (Line 14 x 43.01%) $ 8 629 $ 7 563 $1 066 16 Massachusetts Franchise Tax (Line 14 x n 17 6.5%) $ 1 304 $ 1 143 $ 161
NEW BEDFORD GAS AND EDISON LIGHT COMPANY SCIIEDULE 25 Calculation of Other Tax Adjustments - Dividends Received Test Year Ended December 31, 1978 (Dollars in Thousands)
Line No. Electric 1 Dividends Received Deduction 2 Dividends Received from 3 Generating Companies $61 4 Massachusetts Franchise Tax (Line 3 x 6.5%) 4 5 85% Dividend Exclusion 52 6 Income Subject to Federal Income Tax 5 7 Federal Income Tax (Line 6 x 46%) 2 8 Return (Line 3 - Line 4 and Line 7) $55
NEW BEDFORD GAS AND EDISON LIGHT COMPANY SCHEDULE 26 Calculation of Other Tax Adjustments - Storm Damage Reserve Reversal Test Year Ended December 31, 1978 (Dollars in Thousands)
Lfne No. Electric 1 Storm Damage Reserved $180 2 State Franchise Taxes @ 2.77% (effective) 5 3 Income Subject to Federal Tax 175 4 Federal Income Taxes @ 33.7% (effective) 59 5 Net Reserve for Storm Damage 6 (Line 1 - Line 2 and Line 4) $116 7 During the years 1963 to 1968 the Company accrued for anticipated storm 8 damage costs, net of applicable ta:*s. In 1973, the Company ceased using 9 this method of accounting and began o reverse the unused portion of the 10 reserve as required. This adjustment represents that final portion of 11 the reserve which was recorded during 1978, at the tax rates applicable 12 when accrued.
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e NEW BEDFORD GAS AND EDISON LIGHT COMPANY SCHEDULE 27 Summary of Income Taxes Test Year Ended December 31, 1978 i
(Dollars in Thousands) '
Line _ Schedule No. Combined Electric Gas Reference 1 Massachusetts Franchise Tax -
2 Regular $1 304 $1 143 $ 161 3 Dividends Received 4 4 -
4 Storm Damage Reserve Reversal 5 5 -
5 Total $1 313 $1 152 $ 161 6 Federal Income Tax -
7 Regular $8 629 $7 563 $1 066 8 Dividends Received 2 2 -
9 Storm Damage Reserve Reversal 59 59 -
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10 Total $8 690 $7 624 $1 066 i
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SCHEDULE 28 NEW BEDFORD GAS AND EDISON LIGHT COMPANY Weather Normalization Adjustment Test Year Ended December 31, 1978 (Dollars in Thousands)
Line No. Gas 1 To normalize the effect of increased gas sales,
, representing approximately 235,586 MCF's, due to the colder than normal weather experienced
, during the test year ended December 31, 1978 ($39) u I
l NEW BEDFORD CAS AND EDISON !.ICHT COMPANY Response to " Request for Additional Financial Information" Item 2h (Dollars in Thousands) 1980 1981 1982 1983 1984 1985 Generating Facilities (Note)
Seabrook (1) 5.037 35,477 18,124 8,478 5,069 377 40Mw in 1983, 40Mw in 1985 Pilgrim 1,968 1,396 2,811 2,965 3,084 3,855 18 Mw in 1985 Montague 110 110 110 110 111 137 40Mw in each unit, in Service Dates unspecified at this t ime.
Diesels 900 1,300 2.8 Mw in 1980, 2.8 Mw in 1985.
Transmission Facilities Barnstable Sw. Sen. Addition 307 In-Service in 1980 Valley Sub Addition 345 1984 Duxbury Sub 100 1,000 1983 Falmouth Sw. Stn. 550 1984 West Pond Sub Asdition 65 645 1984 Industrial Park Sub Addition 885 1984 Harwich Tap-Orleans 115/23 Kv line 1,800 1980 Hzrwich-Orleaas 115/23 Kv line 2,600 1984 Chatham Substation 1,200 1985 Distribution Facilities Sw. Capacitors 361 1980 Brewster Rte. 39 23Kv Rebuild 189 1983 Provincetown Tap Upgrade 128 128 96 1983 Chatham Voltage Support 200 1980 Harwich Tap to Rte.137 -
23 Ky 60 60 60 1984 Pine St. Sub to Hathaway St. 303 1984 ceneral Plant Central Administration Building 3,500 1,875 1981 Note: Crsh expenditures on Nuclear Units have been shown for information purposes only. The actual expenditure of cash is projected to be made by Canal Electric Company for the years 1981 through 1985.
(1) The additional acquisition of 50Mw from Public Service Conpany of New Hampshire has been phased in as incremental purchases from the period J.auary 1, 981 through May 30, 1982.
4/24/80
ATTACHMENT FOR ITEM NO. 2.i FINANCIAL STATISTICS 12 Months Ended December 31, 1979 1978 (Dollars in Millions)
Earnings available to common equity $7 $6 Average common equity $66 $66 Rate of return on average common equity 10.00% 9.12%
Times total interest earned before FIT:
Gross income (incl. AFDC) + current and deferred FIT + total interest charges +
amortization of debt discount and expense 2.32 2.82 Times long-term interest earned before FIT:
Gross income (incl. AFDC) + current and deferred FIT + long-term ' interest charges +
amortization of debt discount and expense 3.36 3.24 Bond ratinRs (end of period)
Standard and Poor's A A Moody's Aa Aa Times interest and preferred dividends earned af ter FIT:
Gross income (incl. AFDC) + total interest charges + amortization of debt discount and expense + preferred dividends 1.96 2.12 AFUDC $2 $1 Net income af ter preferred dividends $7 $6 Market price of common (Parent) $14.25 $16.00 Book value of common (Parent) $19.48 $18.63 Market-book ratio (end of period)* .73 .86 Earnings avail for common less AFDC depreciation and amortization, deferred taxes, and invest. tax credit adjust. -
deferred $15.8 $15.7 Common dividends $ 6.0 $ 6.3
! Ratio 2.6 2.4 Short-term debt .
Bank loans $15 -
Parent $7 $5 Capitalization (Amount & Percent) Amount } Amount }
Long-term debt $59 47 $59 48 Preferred stock - -
Common equity 66' 53 66 52
- If subsidiary company, use parent's data.
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