ORDER NO. 98-197

ENTERED MAY 19 1998

This is an electronic copy.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UM 903

DISPOSITION: INVESTIGATION OPENED

Staff of the Oregon Public Utility Commission and local gas distribution companies (LDCs) operating in Oregon—NW Natural, Cascade Natural Gas, and WP Natural Gas—have recently discussed the current Purchased Gas Adjustment (PGA) process. The issues involved include the appropriate structure of the risk-reward sharing incentive mechanism for gas cost differences and the role and structure of earnings reviews. These issues, and the determination of whether changes should be made to the current system, represent significant policy matters relating to the LDCs’ recovery of purchased gas costs.

At a public meeting of May 1, 1998, the Commission indicated that a review of the PGA mechanism and process in a docketed investigation would be timely. Therefore, Staff prepared a memorandum requesting that the Commission open such an investigation.

Staff notes that much of the work identifying issues and explaining the reasoning has already been done. The purposes of the investigation would be to enable other parties to participate in future discussions and to allow for a formal Commission determination of any policy changes. Staff anticipates that the investigation will result in either a policy order or a proposed rule.

At its public meeting of May 19, 1998, the Commission considered Staff’s memorandum and concluded that an investigation should be opened. The attached notice sets out the date, time, and place for the conference and describes the matters which will be discussed. In accord with Staff’s recommendation, a settlement conference will be held directly following the prehearing conference.

ORDER

IT IS ORDERED that an investigation into policy issues and procedures associated with recovery of purchased gas costs by Oregon’s regulated gas distribution utilities be opened.

Made, entered, and effective ____________________________.

A party may request rehearing or reconsideration of this order pursuant to ORS 756.561. A request for rehearing or reconsideration must be filed with the Commission within 60 days of the date of service of this order. The request must comply with the requirements of OAR 860-014-0095. A copy of any such request must also be served on each party to the proceeding as provided by OAR 860-013-0070. A party may appeal this order to a court pursuant to ORS 756.580.

ISSUED May 20, 1998

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UM 903

NOTICE IS GIVEN that the Public Utility Commission of Oregon has scheduled a hearing in this proceeding as follows:

DATE: June 2, 1998

TIME: 1:30 p.m.

PLACE: Public Utility Commission
Small Hearing Room, 2nd floor
550 Capitol Street NE
Salem, Oregon

ADMINISTRATIVE

LAW JUDGE: Allen Scott

The purpose of the prehearing conference will be to:

1. Identify parties and interested persons;
2. Establish a service list with addresses and phone numbers;
3. Identify the issues; and
4. Establish a procedural schedule.

A settlement conference will be held directly following the prehearing conference.

POSTPONEMENT will be made only upon a showing of good cause. Please call the Administrative Hearings Division (503) 378-2849 if you have questions.

Dated this 20th day of May, 1998.