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COLUMBIA GAS of MASSACHUSETTS Local Distribution Adjustment Factor Effective November 1, 2020

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COLUMBIA GAS of MASSACHUSETTS Local Distribution Adjustment Factor Effective November 1, 2020 COLUMBIA GAS OF MASSACHUSETTS Local Distribution Adjustment Factor Effective November 1, 2020 Index Section Description 1 LDAF Filing Letter and Report 2 Peak Form II Summary of Rates 3 Sales Summary 4 Energy Efficiency Surcharge 5 Remediation Charge 6 Pension/PBOP Expense Factor 7 Residential Assistance Adjustment Factor 8 Attorney General Consultant Expenses 9 Gas System Enhancement Adjustment Factor 10 2017 Tax Act Credit Factor 11 Rate Comparisons 12 Reconciliation Filing TAB 1 LDAF Filing Letter and Report Kenneth W. Christman 121 Champion Way, Suite 100 Assistant General Counsel Canonsburg, Pennsylvania 15317 (724) 416-6315 (724) 416-6384 (facsimile) [email protected] July 31, 2020 VIA ELECTRONIC FILING Mark D. Marini, Secretary Department of Public Utilities One South Station Boston, MA 02110 Re: Bay State Gas Company d/b/a Columbia Gas of Massachusetts D.P.U. 20-GAF-P1, Cost of Gas Adjustment – Local Distribution Adjustment Factors for the Period November 2020 through October 2021. Dear Secretary Marini: Enclosed for filing on behalf of Bay State Gas Company, d/b/a Columbia Gas of Massachusetts (“CMA” or “Company”) are the Company’s 2020-2021 Peak Local Distribution Adjustment Factors (“LDAFs”). Specifically, the enclosed Report and Schedules were prepared by and under the supervision of Chun-Yi Lai, Manager, Regulatory, in support of the Company’s LDAFs applicable to both Firm Sales and Transportation Service rate classes for the November 2020 through April 2021 Period. These LDAFs are presented in Form IIa, Summary of Rates, for effect November 1, 2020. The Company seeks approval of the LDAFs by the Department of Public Utilities (“Department”) pursuant to the Standard Cost of Gas Adjustments Regulations, 220 C.M.R. § 6.12, and the Company’s Local Distribution Adjustment Clause (“LDAC”) tariff, M.D.P.U. No. 324, which requires the LDAF to be filed ninety (90) days prior to the November 1 effective date. In accordance with its LDAC tariff, M.D.P.U. No. 324, the Company is establishing the following annual (November 2020 – October 2021) LDAF rate components: (a) Energy Efficiency Surcharge (“EES”); (b) Pension Expense Factor (“PEF”); (c) Residential Assistance Adjustment Factor (“RAAF”); (d) Attorney General Consulting Expense Factor (“AGCEF”); (e) Remediation Adjustment Cost (“RAC”) and (f) 2017 Tax Act Credit Factor (“TACF”). The Gas System Enhancement Adjustment Factor (“GSEAF”) remains unchanged from the 2020 Off-peak Period as does the Gas System Enhancement Program (“GSEP”) reconciliation adjustment factor (“GSERAF”). Pursuant to the 2020/2021 Peak Period GAF procedural memorandum dated July 23, 2020, from the Columbia Gas of Massachusetts D. P. U. 20-GAF-P1 Report on LDAFs July 31, 2020 Page 2 Department (“Procedural Memo”), the GSERAF will be updated in an informational filing five business days after an order is issued in D.P.U. 20-GREC-05. Each of the above LDAF rate components has been established by Rate Class Sector, with the exception that the EES maintains two Rate Categories with only the allocation of the low-income program expenditures subject to D.P.U. 12-126-A directed allocations. The EES for the 2020-2021 period reflects the 2021 energy efficiency budget approved by the Department in D.P.U. 18-110 on January 29, 2019, along with the reconciliation adjustment factor associated with the previous energy efficiency budget year of 2019 – 2020. More specifically, the RAAF, AGCEF, RAC and TACF (and the low- income program energy efficiency expenditures reflected in the EES) have been established by Rate Class Sectors based on the Company’s Base Distribution Revenue Requirement established in the Company’s last base rate case, D.P.U. 15-50, Step Adjustment approved October 31, 2016. The PEF has been established by Rate Class Sector based on the Labor Allocator from the Allocated Cost of Service (“ACOS”) study performed in the Company’s 2013 base rate case, D.P.U. 13-75, while the Rate Class Sector GSEP rates have been established based on the allocation of Rate Base established in the ACOS performed in D.P.U. 13-75. The proposed LDAF rate components to be effective November 1, 2020, are projected to increase the annual bill of the typical Residential Heating (R-3) customer by 2.41 percent, or $2.71 per month, over the currently effective LDAF rate components. In addition, as required by and pursuant to the Company’s Cost of Gas Adjustment Clause (“CGAC”) tariff, M.D.P.U. No. 287, the Company will file the Gas Adjustment Factors (“GAFs”) applicable to Firm Sales Service rate classes, forty-five (45) days prior to the November 1 effective date. Per the Procedural Memo, this filing must be made this year on or before September 17, 2020. At that time, the Company will again include its proposed LDAF components along with its GAFs for a complete set of adjustment factors to become effective November 1, 2020. Columbia Gas of Massachusetts D. P. U. 20-GAF-P1 Report on LDAFs July 31, 2020 Page 3 If you have any questions or need additional information, please do not hesitate to call me at (724) 416-6315 or Chun-Yi Lai, Manager, Regulatory, at (614) 460-5998. Very truly yours, Kenneth W. Christman Enclosures cc: Katherine Lee Goyette, Hearing Officer, Department (via e-mail only) George Yiankos, Director, Gas Division, Department Cara Mottola, Assistant Director, Gas Division, Department (via e-mail only) Rebecca Tepper, Esq., Office of the Attorney General (via e-mail only) Nathan Forster, Esq., Office of the Attorney General (via e-mail only) Ashley Gagnon, Esq., Office of the Attorney General (via e-mail only) Joseph Dorfler, Esq., Office of the Attorney General (via e-mail only) Rachel Evans, Esq., Department of Energy Resources (via email only) Chun-Yi Lai, Manager, Regulatory (via email only) Shaela McNulty Collins, Director, Regulatory Policy (via email only) Susan Kullberg, Manager, Rates and Regulatory (via email only) Elizabeth Foley, Vice President, External & Customer Affairs (via email only) COMMONWEALTH OF MASSACHUSETTS DEPARTMENT OF PUBLIC UTILITIES _______________________________________________ ) Bay State Gas Company d/b/a ) D.P.U. 20-GAF-P1 Columbia Gas of Massachusetts ) _______________________________________________ ) AFFIDAVIT OF CHUN-YI LAI Chun-Yi Lai does hereby depose and say as follows: I, Chun-Yi Lai, on behalf of Columbia Gas of Massachusetts, certify that the attached report and supporting schedules were prepared by me or under my supervision and are true and accurate to the best of my knowledge and belief. Signed under the pains and penalties of perjury as of this 31st day of July, 2020. ___________________ Chun-Yi Lai Report on LDAFs July 31, 2020 Page 1 of 4 Local Distribution Adjustment Factors (LDAFs) Applicable to Firm Sales and Transportation Service Rate Classes for the Period November 2020 through October 2021 July 31, 2020 Prepared By: Chun-Yi Lai Manager, Regulatory Columbia Gas of Massachusetts Bay State Gas Company d/b/a Columbia Gas of Massachusetts (“CMA” or “Company”) presents for filing its class-specific Local Distribution Adjustment Factors (“LDAFs”) for each rate class, applicable to both Firm Sales and Transportation Service rate classes for effect November 1, 2020. Section 2 – Summary of Rates: presents the LDAFs for each rate class, applicable to both Firm Sales and Transportation Service rate classes, are presented in standardized Form IIa. Section 3 – Sales Summary: shows the Company’s forecasted sales and transportation volumes for the period November 2020 through April 2021 of 42,658,570 MMBtu or 0.94 percent more than normalized actual sales and transportation volumes for the previous period of November 2019 through April 2020. Section 4 – Energy Efficiency Surcharge: contains the Energy Efficiency Surcharge (“EES”) rates. The proposed EES rate to become effective November 1, 2020 is calculated based upon the 2021 budget approved by the Department in D.P.U. 18-110 on January 29, 2019 as part of the Company’s 2019-2021 Three-Year Plan. In conformance with the EES rate recovery mechanism, the Energy Efficiency costs and recoveries are reconciled on an annual basis. Thus, the EES rates to become effective November 1, 2020 include a reconciliation factor that reflects actual costs and recoveries through May 2020 and forecast costs and recoveries for the remaining five months of the 2019 - 2020 EE budget period of June 2020 through October 2020. The reconciliation adjustment also includes the pass-back of the over-collection on performance incentives based on the amounts included in the 2016-2018 Energy Efficiency Term Report filed on August 1, 2019 in D.P.U. 19-90. As approved in the Department’s order in D.P.U. 18-110 through D.P.U. 18-119 at 89-90, the Companies are permitted to reflect the earned performance incentives in the energy efficiency reconciliation balances included in their Three Year Energy Efficiency Term Report (“Term Report”). If the Department approves the incentive amounts that differ from the amounts filed in the Term Report, the Companies Report on LDAFs July 31, 2020 Page 2 of 4 will make corresponding adjustments to their energy efficiency reconciliation balances in the LDAF reconciliation filing subsequent to the Department’s ruling. Section 5 – Remediation Adjustment Charges: presents the Remediation Adjustment Factor (“RAF”) calculated for the recovery of environmental response costs (“ERC”). Section 5 presents the allocation of the ERC expenses based on the Base Distribution Revenue Allocation (“BDRA”) in accordance with the Allocated Cost of Service (“ACOS”) in the Company’s most recently approved base rate case, D.P.U. 15-50 Step Adjustment. Section 6 – Pension/PBOP Expense Factor: provides for the recovery of the Company’s Pension and Postretirement Benefits Other Than Pension (“PBOP”) costs through the LDAC.
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