06-(; -I(%S­ ~ STATE OF DEPARTMENT OF PUBLIC SERVICE l>~. THREE EMPIRE STATE PLAZA, ALBANY, NY 12223-1350 oc'; Internet Address: hUp:l/www.dps.stafe.ny.us jfit.DK oGe OI\F?

PUBLIC SERVICE COMMISSION

GARRV A. BROWN PETER M.GOWAN Chairman Acting General Counsel PATRICIAL. ACAMPORA MAUREEN F. HARRIS JACLYN A. BRILLING ROBERT E. CURRY JR. Secretary CHERYL A. BULEY Commissioners

....~ c.::>= February 5, 2008 .....,C..:l C'1 ":J I U1 Hon. Jaclyn A. Brilling Secretary Public Service Commission Three Empire State Plaza Albany, New York 12223-1350

Re: Case 06-G-1185 - The Brooklyn Union Gas Company d/b/a/ KEDNY - Gas Rates

Dear Secretary Brilling:

Enclosed are an original and twenty-five copies of Department of Public Service Staff's (Staff) response to National Grid plc and KeySpan Energy Delivery New York's Petition for Rehearing dated January 22, 2008. Copies have been served on the presiding Administrative Law Judge and on all active parties listed on the attached service list.

Encl.

cc.: Administrative Law Judge Lynch All Active Parties Case 06·M-0878 National Grid and KeySpan - Merger Petition Cases 06-G-1185 and 06·G·1186 KeySpan Energy Delivery New York and Long Island· Gas Rates

Active Parties List As Of: October 15, 2007

Presiding: Gerald L. Lynch, Administrattve Law Judge NYS Dept. of Public Service Three Empire State Plaza Albany, NY 12223·1350 Telephone: 518-474-4506 Fax: 518-473-3263 Email: [email protected]

FOR: KeySpan Corporation FOR: National Grid Kenneth Maloney, Esq. Robert H. Hoaglund II, Esq. Cullen and Dykman LLP National Grid 1101 Fourteenth Street, NW, Suite 550 300 Erie Boulevard West, A-3 Washington, DC 20005-5633 Syracuse, NY 13202-4250 Tel: 202-223-8890 Tel: 315-428-5320 Fax: 202-457-1405 Fax: 315-428-5740 E-mail: [email protected] E-mail: [email protected]

FOR: KeySpan Corporation FOR: National Grid Catherine L. Nesser, Esq. Thomas G. Robinson, Esq. KeySpan Corporation National Grid One MelroTech Center 25 Research Drive Brooklyn, NY 11201 Westborough, MA 01562 Tel: 718-403-3073 Tel: 508-389-2877 Fa;(; 718·403·2698 Fax: 506·369-2463 E-mail: [email protected] E·mail: [email protected]

FOR: KeySpan Corporation FOR: DPS Staff Debra H. Rednik, Esq. Paul Agresta, Esq. KeySpan Corporation NYS Department of Public Service One MetroTech Center, ztst Floor Office of General Counsel 3 Empire State Plaza Brooklyn, NY 11201 Albany, NY 12223 Tel: 718-403-1132 Tel: 518-486-2653 Fax: 716-403·2696 Fax: 518-473-7081 E-mail: [email protected] E-mail: [email protected]

FOR: National Grid FOR: DPS Sta~ Joseph T. Ash Daniefle Rathbun, Esq. National Grid NYS Dept. of Public Service 300 Erie Boulevard West, B-1 Office of General Counsel Three Empire State Plaza Syracuse, NY 13202 Albany, NY 12223-1350 Tel: 315-428-5847 Tel: 518-473-8123 Fax: 315-426-5760 Fax: 518-473-7081 E-mail·[email protected] E-mail: [email protected]

Page. Case06-M-0878 October15, 2007

FOR: NYS Energy Research and Development Authority FOR: NYS Consumer Protection Board Peter R. Keane, Esq. Douglas W. Ellner NYS Energy Research and Development Authority NYS Consumer Protection Board 17 Columbia Circle Five Empire State Plaza, Suite 2101 Albany, NY 12203-6399 Albany, NY 12223 Tel: 518-862-1090, Ext. 3366 Tel: 518486-6532 Fax: 518-862-1091 Fax 518-473-7482 E-mail: [email protected] E-mail: [email protected]

FOR: NYS Energy Research and Development Authority FOR: NYS Consumer Protection Board Valerie S. Milonovich David Prestemon, Esq. NYS Energy Research and Development Authority NYS Consumer Protection Board 17 Columbia Circle Five Empire State Plaza, Suite 2101 Albany, NY 12203-6399 Albany, NY 12223 Tel: 518-862-1090 Ext. 3326 Tel: 518-474-5016 Fax: 518-862-1091 Fax: 518-473-7482 E-mail: [email protected] E-mail: [email protected]

FOR: Office of the State Attorney General FOR: Nassau and Suffolk Counties Charlie Donaldson, AAG Eli D. Eilbott, Esq. Environmental Protection Bureau Duncan, Weiner, Genzer, and Pembroke, P.C. 120 Broadway, 26th Floor 1615 M Street, N.W., Suite 800 New York, NY 10271 Washington, DC 20036 Tel 212 416-8334 Tel: 202-467-6360 Fax: 212416-6007 Fax: 202-467-6379 E-mail: [email protected] E-mail: [email protected]

FOR: 1st District FOR: Nassau County Honorable Marc S. Alessi, Member of Assembly Martha Krisel, Chief Deputy County Attorney for Special Projects NYS Assembly Office of The Nassau County Attorney 6144 Route 25A, Building A, Suite 5 One West Street Wading River, NY 11792 Mineola, NY 11501 Tel: 631-929-5540 Tel 516-571-0646 Fax: 631-9211-5512 Fax: 516·571·4080 E-mail: [email protected] E-mail: [email protected]

FOR: Long Island Power Authority FOR: Suffolk County Lynda Nicolino, Esq., Acting General Counsel Frank Radigan Long Island Power AulhOrity Hudson River Energy Group 333 Earle Ovmqton Blvd. 120 Washington Avenue Uniondale, NY 11553 Albany, NY 12210 Tel: 516-719-9847 Tel: 518436-1628 Fax: 516-7111-9812 Fax: 518-436-1630 E-mail: [email protected] E-mail: [email protected] (Electronic Service Only)

FOR: New York Power Authority FOR: Suffolk County Edgar K. Byham, Principal Attorney Dennis M. Brown, Esq. New York Power Authority Suffolk County Dept. of Law 123 Main Street 100 Veterans Memorial Highway PO Box 6100 While Plains, NY 10601-3170 Hauppauge, NY 11788 Tel: 914-390-8006 Tel: 631-853-5675 Fax: 914-390-8040 Fax: 631-853·5169 E·mail: [email protected] E-mail: [email protected] (Electronic Service Only)

Page: 2 Case 06·M-{}878 October15,2007

FOR: Suffolk County FOR: Central Hudson Gas & Electric Corporation Joseph Schroeder Larry G. Arvidson William H. Rodgers Building Central Hudson Gas & Electric Corporation 725 Veterans Memorial Highway 284 SouLh Avenue Smithtown, NY 11787 Poughkeepsie, NY 12601 Tel: 631-853-4905 Tel: 845-486-5520 Fax: 631-853-5496 Fax: 845-486-5894 E-mail: [email protected] E-mail: [email protected]

FOR: The City of New York FOR: Central Hudson Gas & Electric Corporation Robert M. Loughney, Esq. Stanley L. Kardas Couch White L.L.P. Central Hudson Gas & Electric Corporation 540 Broadway, P.O. Box 22222 284 South Avenue Albany, NY 12201-2222 Poughkeepsie, NY 12601 Tel: 518-320-3404 Tel: 845-486-5760 Fax: 518-320-3495 Fax: 845-486-5894 E-mail: [email protected] E·mail: [email protected]

FOR: The City of New York FOR: Central Hudson Gas & Electric Corporation Michael J. Delaney, Vice President-Energy Robert J. Glasser, Esq. NYC Economic Development Corp. Thompson Hine LLP 110 William Street, Fourth Floor 335 Madison Avenue, 12th Floor New York, NY 10038 New York, NY 10017-4611 Tel 212-312-3787 Tel: 212-908-3909 Fax: 212-312-3915 Fax: 212-344-6101 E-mail: [email protected] E-mail: [email protected]

FOR: AES Eastern Energy FOR: Consolidated Edison Company of New York Inc. Christopher Wentlent Lisa B. Mann, Esq. AES Eastern Energy Consolidated Edison Company of New York Inc. 130 East Seneca Street, Suite 505 4 Irving Place, Room 1810-S Ithaca, NY 14850 New York, NY 10003 Tel: 703-682-1116 Tel: 212-460-2020 E-mail: [email protected] Fax: 212-677-5850 E-mail: [email protected]

FOR: Astoria Generating Company, L.P. FOR: Consolidated Edison Company of New York Inc. Liam Baker, Esq., Manager, Regulatory Affairs Paul A. Savage, Esq. Astoria Generating Company, L.P. Consolidated Edison Company of New York Inc. 505 Fifth Avenue, 21st Floor 4 lrvlnq Place, Room 1875-8 New York, NY 10017 New York, NY 10003 Tel: 212-792-0816 Tel: 212-46ll-2764 Fax: 212-682-2613 Fax: 212-529-9265 E-mail: [email protected] E-mail: [email protected]

FOR: Astoria Generating Company, L.P. and FOR: Independent Power Producers of New York, Inc. AES Eastem Energy Glenn D. Haake, Esq., General Counsel Doreen U. Saia. Esq. Independent Power Producers of New York, Inc. Greenberg Traurig, LLP 19 Dove Street, Suite 302 54 State si., 6th Floor Albany, NY 12110 Albany, NY 12207 Tel: 518-436-3749 Tel: 518-689-1430 Fax: 518-436-0369 Fax: 518-689-1499 E-mail: [email protected] E-mail: [email protected]

3 Case 06-M-Q878 October15. 2007

FOR: Independent Power Producers of New York, Inc. FOR: NRG David B. Johnson, Esq. Christopher C. O'Hara Read & Laniado. LLP NRG Energy, Inc. 25 Eagle Street 211 Carnegie Center Albany, NY 12207 Princeton. NJ 08540 Tel: 518-465-9313 Tel: 609-524-4601 Fax: 518-465-9315 Fax: 609-524-4589 Ecrnall: [email protected] E-mail: [email protected]

FOR: National Fuel Gas Distribution Corporation FOR: NYSEG and RG&E Bruce V. Miller, Esq. Noelle M. Kinsch, Esq. clo Saul Ewing,lLP Brian T. FitzGerald, Esq. One Riverfront Plaza LeBoeuf, Lamb, Greene & MacRae, LLP Newark, NJ 07102·5490 99 Washinglon Ave., Suite 2020 Tel: 973-286-6714 Albany, NY 12210-2820 Fax: 973-286-6814 Tel: 518-626-9000 E-mail: [email protected] Fax: 518-626-9010 E·mail: [email protected] and [email protected]

FOR: National Fuel Gas Dislribution Corporation FOR: Rochester Gas & Electric Corporation EricH. Meinl Gary R. DeWilde National Fuel Gas Distribution Corporation Rochester Gas & Electric Corporation 6363 Main Street 89 East Avenue Williamsville, NY 14221 Rochester, NY 14649 Tel: 716-857-7805 Tel: 585-724-8836 Fax: 716-857-7254 Fax: 585-724-8818 E-mail: [email protected] E-mail: [email protected] (Electronic Service Only)

FOR: National Fuel Gas Distribution Corporation FOR: Suez Energy North America Michael W. Reville, Esq. John Rohde National Fuel Gas Distribution Corporation SUEZ Energy North America, Inc. 6363 Main Street 1990 Post Oak Blvd., Suite 1900 Williamsville, NY 14221 Houston, TX 77056 Tel: 716-857-7313 Tel: 713-636-1215 Fax: 716-857-7254 Fax: 713-636-1859 E-mail: [email protected] E-mail: [email protected]

FOR: New York Association of Public Power FOR: Eastern Transmission and Jeffrey C. Genzer, Esq. and Thomas L. Rudebusch, Esq. Algonquin Gas Transmission Duncan, Weinberg, Genzer & Pembroke, PC James P. Melia, Esq. 1615 M Street, NW, Suite BOO Kirkpatrick & Lockhart Preston Gates Ellis LLP Washington, DC 20036 17 North Second Street, 18th Floor Tel: 202-467-6370 Harrisburg, PA 17101-1507 Fax: 202-467-6379 Tel: 717-231-4500 E-mail: [email protected];[email protected] Fax: 717-231-4501 E-mail: [email protected]

FOR: New York State Electric & Gas Corporation FOR: Texas Eastern Transmission and EricJ. Wilen Algonquin Gas Transmission New York State Electric & Gas Corporation Richard J. Kruse Esq. and Steven E. Hellman, Esq. 18 Link Drive P.O. Box 5224 Duke Energy Gas Transmission LLC Binghamton, NY 13904 5400 Westheimer Court PO Box 1642 Tel: 607-762-7430 Houston, TX 77251-1642 Fax: 607 -762~B645 E-mail: [email protected]; E-mail: [email protected] [email protected] (Electronic Service Only)

Page: 4 Case 06-M-0878 October 15, 2007

FOR: The Constellation Companies FOR: Association for Energy Affordabil\ty, Inc. Dan Allegretti, VP Regulatory & Legislative Affairs Rhona Saffer, Senior Associate Constellation Energy Commodities Group, Inc. Association for Energy Affordability, Inc. 111 Market Place 505 81h Avenue, Suite 1801 , MD 21202 New York, NY 10018 Tel; 603-224-9653 Tel; 212-27!l-3908 E-mail: [email protected] Fax; 212·27!l-5306 (Electronic Service Only) E-mail: [email protected]

FOR: The Constellation Companies FOR: Long Island Progressive Coalition Glen McCartney, VP Regulatory & Legislative Affairs Lisa Tyson, Director Constellation Energy Commodities Group, Inc. Long Island Progressive Coalition 111 Market Place gOPennsylvania Avenue Baltimore, MD 21202 Massapequa, NY 11758 Tel; 410-468-3815 Tel; 516-541-1006 x 11 E-mail: [email protected] Fax; 516-541-2113 (Electronic Service Only) E-mail: [email protected]

FOR: The Constellation Companies FOR: Natural Resources Defense Council Divesh Gupta, Esq., Counsel Luis Martinez, Esq. Constellation Energy Group, Inc. Ashok Gupta 111 Market Place Natural Resources Defense Council Baltimore, MD 21202 40 W. 20th Street Tel; 410-468-3468 New York, NY 10011 E-mail: [email protected] Tel; 212-727-4550 (Electronic Service Only) Fax; 212-727-1773 E-mail: [email protected]; [email protected]

FOR: The Constellation Companies FOR: New York Oil Heating Assocation, Inc. and Timothy Daniels, Director of Regulatory & Government Affairs Oil Heat Institute of Long Island, Inc. Constellation NewEnergy, Inc. Emilio A. F. Petroccione, Esq. 810 Seventh Avenue, Suite 400 Colwell, Ferrentino & Petroccione, LLP New York. NY 10019 20 Corporate Woods Blvd., 3rd Floor Tel; 212-885·6454 Albany, NY 12211 Fax; 212-883-5888 Tel; 518-462-4242 E-mail: [email protected] Fax; 518-462-4031 E-mail: [email protected]

FOR: The Constellation Companies FOR: Pace Energy Project David I. Fein, Esq., Senior Regulatory Counsel Daniel W. Rosenblum, Senior Attorney Constellation NewEnergy, Inc. Pace Energy Project 550 W. Washington Street, Suite 300 78 North Broadway, E-House Chicago, IL 60661 White Plains, NY 10603 Tel; 312-704-8499 Tel; 914-422-4221 Fax; 312-795-9270 Fax; 914-422-4180 E-mail: [email protected] E-mail: [email protected] (Electronic Service Only)

FOR: Association for Energy Affordability, Inc. FOR: Pace Energy Project David Heplnstall, Executive Director Chris Young, Policy Specialist Association for Energy Affordability, Inc. Pace Energy Project 505 8th Avenue, Suite 1801 78 North Broadway, E-House New York, NY 10018 White Plains, NY 10603 Tel; 212-279-3903 Tel; 914-422-4387 Fax; 212-279-5306 Fax; 914-422-4180 E·mail: [email protected] E-mail: [email protected]

Page' 5 Case06-M...Q878 October15, 2007

FOR: Public Utility Law Project FOR Direct Energy Services, LLC Gerald A. Norlander, Esq. Nancy L. Teslani Public Utility Law Project Hiscock & Barclay, LLP 194 Washington Ave., Suite 420 50 Beaver Street Albany, NY 12210 Albany, NY 12207-2830 Tel: 518-44!l-3375 Ext. 113 Tel: 518-429-4210 Fax: 518-44!l-1769 Fax: 518-429-4215 E-mail: [email protected] E-mail: [email protected] (Electronic Service Only)

FOR: Advantage Energy, Inc. FOR Eastern Niaqara Power Project Association and the Garrett E. Bissell, Esq. City of Lockport Advantage Energy,lnc. Sarah L. Miller 5 Computer Drive West, Suite 204 Regulatory Watch Inc. Albany, NY 12205 P.O. Box 815 Tel: 518-482-4385 Albany, NY 12201 Fax: 518-482-2518 Tel: 518-426-5126 E-mail: [email protected] Fax: 518-427-8227 E-mail: [email protected]. and [email protected]

FOR: Consumer Power Advocates FOR Energy Enterprises, Inc. John Dowling William R. Green, President and CEO Luthin Associates, Inc. Energy Enterprises, Inc. 4812 Foxwood Drive S. 3401 Rochester Road, PO Box 687 Clifton Park, NY 12065 Lakeville, NY 14480 Tel: 518-33!l-4255 Tel: 585-346-2200 E-mail: [email protected] Fax: 585-346-5214 (Electronic Service Only) E-mail: [email protected]

FOR Consumer Power Advocates FOR Harvlc International ltd. Catherine Luthin Edward S. Sawchuk, P.C. Luthin Associates, Inc. 361 Park Avenue South - Suite 720 15 Walling Place New York, NY 10016 Avon By The Sea, NJ 07717 Tel: 917-783-1609 Tel: 732-774-0005 Fax:212-86~313 Fax: 732-774-0049 E-mail: [email protected] E-mail: [email protected]

FOR: Direct Energy Services, LLC FOR: Hess Corporation Chris Kallaher, Director, Govemment & Regulatory Affairs Marissa J.. Bach, Regulatory Affairs Specialist Direct Energy Services, LLC Hess Corporation 236 Huntington Ave., Suite 306 One Hess Plaza Boston, MA 02115 Woodbridge, NJ 07095 Tel: 617-867-4677 Tel: 732-750-6814 E-mail: [email protected] Fax: 732-750-6699 E-mail: [email protected]

FOR: Direct Energy Services, LLC FOR: Hess Corporation Seth R. Lamont, Manager, Government and Regulatory Affairs Jeremy Edwards, Manager Natural Gas Operations Direct Energy Services, LLC Hess Corporation 197 Lancaster Street One Hess Plaza Albany, NY 12210 Woodbridge, NJ 07095 Tel: 518-618-0834 Tel: 732-750-7119 Fax: 518-618-0515 Fax: 732-750-6116 E-mail: [email protected] E-mail: [email protected] (Electronic Service Only)

Page: 6 Case 06-M-Q878 October 15, 2007

FOR: Hess Corporation FOR: lOT Energy, Inc. Jay L. Kooper, Director of Regulatory Affairs Andrew D. Fisher, Esq. Hess Corporation lOT Energy, Inc. One Hess Plaza 520 Broad St., 4th Floor Woodbridge, NJ 07095 Newark, NJ 07102 Tel: 732-750-7048 Tel: 973-438-3683 Fax: 732-750-<>899 Fax: 973-438-1455 E-mail: [email protected] E-mail: [email protected] (Electronic Service Only)

FOR: Hess Corporation FOR: lOT Energy, Inc. Alyssa Weinberger, Manager Natural C&I Operations Wayne Stoughton, Vice President Residential Sales & Service Hess Corporation lOT Energy, Inc. One Hess Plaza 20 West Third Street, Suite 10 PO Box 400 Woodbridge, NJ 07095 Jamestown, NY 14702-0400 Tel: 732-751}-6024 Tel: 973-438-7271 Fax: 732-750-6670 Fax: 716-664-2476 E-mail: [email protected] E-mail: [email protected] (Electronic Service Only)

FOR: ISEW Local 1049 FOR: lOT Energy, Inc. Ellen Redmond, Director Darryl Streed, Vice President of Gas Operations ISEW Local 1049 lOT Energy, Inc. 745 Old Willets Path 20 West Third Street, Suite 10 PO Box 400 Hauppauge, NY 11788-4197 Jamestown, NY 14702-0400 Tel: 631-234-1800 Tel: 973-438-7259 Fax 631-234-1034 Fax: 716-664-2476 E-mail: [email protected] E-mail: [email protected] (Electronic Service Only)

FOR: IBEW Local 1049 and Local 1381 FOR: Intelligent Energy Brian Lederer, Esq. Lukasz J. Cyran, Regulatory Affairs Administrator 3003 VanNess Street, NW Suite #W228 Intelligent Energy Washington, DC 20008 2050 Center Ave., Suite 500 Tel: 202-244-1715 Fort Lee, NJ 07024-4996 Fax: 202-244-7833 Tel: 201-592-3217 E-mail: [email protected] Fax: 352-313-3318 E-mail: [email protected]

FOR: ISEW Local 1381 FOR: Intelligent Energy Donald J. Daley, Jr., Business Manager/Financial Secretary Micllael D'Angelo, Regulatory Alfairs Director ISEW Local 1381 Intelligent Energy 2 Somerset Avenue 2050 Center Ave., Suite 500 Hicksville, NY 11801-5127 Fort Lee, NJ 07024-4996 Tel: 516-<>81-3865 Tel: 201-592-3213 Fax: 516-681-3877 Fax: 352-240-4131 E-mail: [email protected] E-mail: [email protected]

FOR IBEW Local 97 FOR: Local 101, TWU Richard J. Koda Karen S. Burstein, Esq. Koda Consulting, Inc. 258 Broadway, Suite 2C 409 Main Street New York, NY 10007 Ridgefield, CT 06877-4511 Tel: 212-<>93-2630 Tel: 203-438-9045 Fax: 212-566-2360 Fax: 203-438-7854 E-mail: [email protected] E-mail: [email protected]

7 Case06-M-Q878 OCtober 15.2007

FOR Local 101, lWU FOR: New York State Energy Marketers Coalition Marsha Spinowitz, Presidenl and Suez Energy North America, Inc. Local 101, lWU Maureen O. Helmer, Esq. 5724 2nd Avenue Green & Seitter, Attomeys, PLLC Brooklyn, NY 11220 194 Washington Avenue, Suite 315 Tel: 718-745-7597 Albany, NY 12210 Fax: 718-238-4489 Tel: 518-689-3570 E-mail: [email protected] Fax: 518-689-3571 E-mail: [email protected]

FOR: Mid-Allanlic Solar Energy Industries Association and PV NOW FOR: Pro se R. William Potter, Esq. Joseph F. Cleary, Esq. Potter and Dickson 6311 Sturbridge Court 194 Nassau Street, Suite 32 Sarasota, FL 34238 Princeton, NJ 08542-7003 Tel: 941-925-2530 Tel: 609-921-9555 E-mail: [email protected] Fax: 609-921-2181 E-mail: [email protected]@cs.com

FOR: Multiple Intervenors FOR: Robert Nicholson and SlmllartySituated Customers Michael B. Mager, Esq. Robert V. Nicholson Couch White L.L.P. 2449H Union Boulevard 540 Broadway, P.O. Box 22222 Islip, NY 11751·3148 Albany, NY 12201-2222 Tel: 631-983-4900 Tel: 518-320-3409 Fax: 631-650-5615 Fax: 518-320-3496 E-mail: [email protected] E-mail: [email protected]

FOR: MXenergy, Inc. FOR: Saint Regis Mohawk Tribe Robert Blake, VP Electricity Operations & Regulatory Affairs Daniel P. Duthie, Esq. MXenergy, Inc PO Box 8 10010 Junction Drive, Suite 104-S Bellvale, NY 10912 Annapolis Junction, MD 20701 Tet. 845-987-6453 Tel: 240-456-0505, ext. 5513 Fax: 845-294-0643 Fax: 240-456-0510 E-mail: [email protected] E-mail: [email protected]

FOR: MXenergy, Inc. FOR: Saint Regis Mohawk Tribe Thomas W. Hartmann, ESQ. Dale T. White, Esq. MXenergy, Inc. Saint Regis Mohawk Tribe 595 Summer Street, SUite 300 412 State Route 37 Stamford, CT 06901-1407 Akwesasne, NY 13655 Tel: 203-356-1318 Ext. 7735 Tel: 518-358-2272 Fax: 203-316-0417 Fax: 518-358-4801 E-mail: [email protected] E-mail: [email protected]

FOR: New York Energy Marketers Coalition FOR: Small Customer Marketer Coalition and Michael F. Meath Retail Energy Supply Association Strategic Communications LLC Usher Fogel, Esq. 3532 James Sireet, Suite 106 557 Central Avenue, Suite 4A Syracuse, NY 13206 Cedarhurst, NY 11516 Tel: 315-463-2325 Tel 516-374-8400 Ext. 108 Fax: 315-463-2325 Fax: 516-374-2600 E-mail: [email protected] E-mail: [email protected]

Page· B Case 06-M..(J878 October15,2007

FOR: U.S. Energy Savings Corp. Francis E. Pullara, Esq. Energy Savings Group. 6345 Dixie Road, Suite 200 Mississauga, ON LST 2E6 Canada, Tel: 646-734-8768 E-mail: [email protected]

FOR: Utility Workers Union of America Rebecca Baldwin, Esq. Spiegel & McDiarmid 1333 Avenue, NW Washington, DC 20036 Tel: 202-879-4000 Fax: 202-393-2866 E-mail: [email protected] (Electronic Service Only)

FOR: Utility Workers Union of America Scott H. Strauss, Esq. Spiegel & McDiarmid 1333 New Hampshire Avenue, NW Washington, DC 20036 Tel: 202-879-4000 Fax: 202-393-2866 E-mail: [email protected]

FOR: Utility Workers Union of America D. Michael Langford, National President Utility Workers Union of America 81516th Street. NW Washington, DC 20006 Tel: 248-354-5608 Fax: 248-354-5384 E-mail: [email protected]

FOR: Utility Workers Union of America, Local 369 Gary Sullivan, President Brotherhood of Utility Workers 120 Bay Stale Drive Braintree, MA 02184 Tel: 781-848-3740 Fax: 781-848-4108 E-mail: [email protected] (Electronic Service Only)

FOR: Public Utility Law Project Louis. Manuta, Esq. Public Utility Law Project 194 Washington Ave., Suite 420 Albany. NY 12210 Tel: 518-449-3375 Ext. 118 Fax: 518-449-1769 E-mail: [email protected]

Page. 9 STATE OF NEW YORK PUBLIC SERVICE COMMISSION

CASE 06-G-1185 - Proceeding On Motion Of The Commission As To The Rates, Charges, Rules And Regulations Of The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York For Gas Service.

CASE 06-G-1186 - Proceeding On Motion Of The Commission As To The Rates, Charges, Rules And Regulations Of KeySpan Gas East Corp. d/b/a KeySpan Energy Delivery Long Island For Gas Service.

STAFF'S REPLYSTATEMENT TO PETITION FOR REHEARING

PAUL AGRESTA Assistant Counsel DANIELLE C. RATHBUN Assistant Counsel Department of Public Service Three Empire State Plaza Albany, New York 12223-1350 (518) 473-8123

Dated: Albany, New York February 5,2008 STATE OF NEW YORK PUBLIC SERVICE COMMISSION CASE 06-G-1185 - Proceeding On Motion Of The Commission As To The Rates, Charges, Rules And Regulations Of The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York For Gas Service

CASE 06-G-1186 - Proceeding On Motion Of The Commission As To The Rates, Charges, Rules And Regulations Of KeySpan Gas East Corp. d/b/a KeySpan Energy Delivery Long Island For Gas Service

STAFF'S REPLY STATEMENT TO PETITION FOR REHEARING

INTRODUCTION

This statement is submitted by the Staff of the

Department of Public Service (Staff) in reply to the Request for

Rehearing of National Grid, pIc and KeySpan Energy Delivery New

York (Rehearing Petition) dated January 22, 2008. This reply statement concerns certain Site Investigation & Remediation (SIR) cost sharing provisions of the Brooklyn Union Holding Company

Agreement applicable only to The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York (KEDNY).

ARGUMENT

In its Order' adopting a gas rate plan for KEDNY, the

Commission rectified an error created by language it included in an earlier order. The Commission stated that its correction was

, Cases 06-G-1185 and 06-G-1186, The Brooklyn Union Gas Company and Key?pan Gas East Corporation - Gas Rates, Order Adopting Gas Rate Plans for KeySpan Energy Delivery New York and KeySpan Energy Delivery Long Island (issued December 21, 2007) pp. 17-18. CASES 06-G-1185 and 06-G-1186 in line with its original intent that the cost sharing provisions of the Brooklyn Union Holding Company Agreement applicable to the Coney Island and Citizens sites not be changed for these two sites.

In the Rehearing Petition, Petitioners seek a rehearing of the Commission's decision to rectify its prior error. The theories advanced by Petitioners to support their request include

(a) Petitioners' reading of the Staff reply statement in support of JP-2 does not support the Commission's finding; (b) requiring

National Grid pIc to unconditionally accept the terms of the

Commission's previous order and then subsequently changing the terms is inconsistent with due process; (c) forcing KEDNY to absorb a 10% share of certain SIR costs when gas utilities in general are allowed 100% cost recovery is arbitrary and capricious; and (d) not allowing KEDNY to reset the sharing targets to reflect a more realistic estimate is arbitrary and capricious.

(a) Staff's reply statement in support of JP-2 supports the Commission's finding

The Commission noted that "[i]n its statements at the time we considered JP 2, DPS Staff also stated expressly that such mechanism would not be disturbed and there was no reply comment to the contrary." Staff's Reply Statement in Support dated July 17, 2007, at pp. 7-8, includes the following statement: "Nassau & Suffolk raise a concern that the Joint

Proposal ignores provisions from Case 95-G-0761 capping costs at certain sites and providing a financial incentive not to exceed

-2­ CASES 06-G-1185 and 06-G-1186 projected costs. Nothing in the Joint Proposal alters any such requirements." The plain language of Staff's reply statement cannot be read to mean anything other than that JP 2 did not alter the 10% cost sharing requirement applicable to the Coney

Island and Citizens sites. The Commission correctly interpreted

Staff's reply statement and Petitioners' contrary arguments are merely post hoc rationalizations that have no foundation.

(b) The subsequent correction of the terms is immaterial

Using the figures set forth in the Rehearing Petition, the Petitioners may be at risk for a $5.98 million share of SIR costs at the Coney Island and Citizens sites [($93.8 million ­

$33.966 million) * 10% = $5.98 million]. Such an amount is immaterial in the context of the overall multi-billion merger deal, and does not undermine the essential revenue requirement information the Commission provided prior to the decision to close the merger transaction.

(c) Forcing KEDNY to absorb a 10% share of certain SIR costs is not arbitrary and capricious

Elimination of the 10% sharing mechanism for the Coney

Island and Citizens site occurred as an oversight, not purposefully. It is not arbitrary or capricious to correct an error. In addition, correction of the error eliminates a potential windfall for the utility. Eliminating a utility windfall is not arbitrary or capricious. What is allowed for other gas utilities is not relevant to these particular facts and circumstances given the historical treatment of SIR costs for

KEDNY.

-3­ CASES 06-G-1185 and 06-G-1186

Cd) Allowing KEDNY to reset the sharing targets would result in a windfall to the utility

The original sharing provision was intended to provide

KEDNY with an incentive to keep costs at or below its original estimate. Allowing KEDNY now to re-set the sharing targets would relieve KEDNY of part of the original incentive, resulting in a windfall for the utility.

CONCLUSION

For the foregoing reasons, the Staff of the Department of Public Service opposes the request for rehearing.

DANIELLE C. RATHBUN Assistant Counsel

Dated: Albany, New York February 5, 2008

-4­