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Case No. 17-0363-G-PC

PUBLIC SERVICE
COMMISSION
OF WEST VIRGINIA
CHARLESTON
CASE NO. 17-0363-G-PC
BLUEFIELD GAS COMPANY, LUMBERPORT-SHINNSTON
GAS COMPANY and BLACKSVILLE OIL & GAS COMPANY
Joint Petition for the consent and approval of the transfer
of assets of Lumberport-Shinnston Gas Company and
Blacksville Oil & Gas Company to Bluefield Gas
Company.
NOTICE OF FILING
On March 24, 2017, Bluefield Gas Company (Bluefield), Lumberport-Shinnston Gas Company (Lumberport-Shinnston) and Blacksville Oil & Gas Company (Blacksville) requested prior consent and approval from the Public Service Commission for Bluefield to acquire and operate the Lumberport-Shinnston and Blacksville natural gas utility systems. Joint Petition (Mar. 24, 2017).
Bluefield provides service to 3,500 customers in Mercer County. Lumberport-Shinnston serves approximately 3,365 customers in Harrison, Marion and Preston Counties. Blacksville serves approximately 295 customers in Monongalia County.
The Joint Petitioners stated that Utility Pipeline, Ltd., Bluefield’s parent company, will acquire the Lumberport-Shinnston and Blacksville systems and convey those systems to Bluefield, which will then own and operate them. Simultaneous with the closing of the proposed transaction, Bluefield Gas will change its name to Cardinal Natural Gas Company (Cardinal). Cardinal will be responsible for the utility operations of Bluefield as its Southern Division and of Lumberport-Shinnston and Blacksville as its Northern Division.
The rates of a natural gas utility are composed of at least two parts: base rates and purchased gas cost rates. Some utilities also have a third rate component for expedited recovery of costs related to utility infrastructure projects.
The Joint Petitioners stated that the current base rates for Lumberport-Shinnston and Blacksville customers would remain in effect for five years after Commission approval of the proposed transaction, except in a case of extreme financial hardship for Lumberport-Shinnston and Blacksville. If the transaction is not approved, the Joint Petitioners state that Lumberport-Shinnston and Blacksville will need to seek rate relief.
The five-year base rate freeze would not affect purchased gas cost rates for Lumberport-Shinnston and Blacksville. Purchased gas cost rates are, and will continue to be, subject to annual review and adjustment by the Commission.
Neither Lumberport-Shinnston nor Blacksville have the new rate component for infrastructure projects. If the Commission approves the proposed acquisition, Cardinal may request the institution of an infrastructure rate for Lumberport-Shinnston and Blacksville during the five-year period when base rates will be frozen. If an infrastructure rate is approved during this time, monthly bills will increase even though base rates are frozen.
The Joint Petitioners asserted that the proposed transaction would have no impact on the rates or charges of current Bluefield customers, including the infrastructure replacement rate and program.
Cardinal proposes to keep separate books and records for each division. As of December 31, 2016, the recorded aggregate net book value of utility assets was $1,790,000: $1,539,000 for Lumberport-Shinnston and $251,000 for Blacksville. The Joint Petitioners proposed to increase the combined net book value attributable to Lumberport-Shinnston and Blacksville by $5.17 million to $6.96 million to address previous contributions by customers for utility construction costs or gas costs.
The Commission will establish a procedural schedule in this case, including an evidentiary hearing to be conducted during the week of August 21, 2017.
Anyone desiring to intervene should file a written petition to intervene within 20 days following the date of this publication unless otherwise modified by Commission order. All requests to intervene should briefly state the reason for the request to intervene and comply with the rules on intervention set forth in the Commission’s Rules of Practice and Procedure. The Commission will receive public comments until the beginning of the hearing. All written comments and requests to intervene should state the case name and number and be addressed to Ingrid Ferrell, Executive Secretary, P.O. Box 812, Charleston, West Virginia 25323. Public comments may also be filed online at http://www.psc.state.wv.us/scripts/onlinecomments/default.cfm by clicking the “Formal Case” link.
BLUEFIELD GAS
COMPANY
LUMBERPORT-
SHINNSTON GAS
COMPANY
BLACKSVILLE OIL & GAS COMPANY
Times: June 1, 2017