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Kentucky Public Service Commission Orders Delta Natural Gas Company to Provide Detailed Information on Rate Adjustment Case

Strategic Insights

— 2 min read

The Kentucky Public Service Commission has issued an order to Delta Natural Gas Company, directing the company to provide detailed information on its rate adjustment case. The commission's staff has requested specific data and explanations from Delta Natural Gas Company, Inc., which must be submitted by March 17, 2025. The company's response will be crucial in determining the reasonableness of its proposed rate adjustment. In a separate order, the commission staff has requested the Attorney General of Kentucky to file an electronic version of the information requested, which must be submitted by the same deadline.

Key Takeaways:

  • The Kentucky Public Service Commission has issued an order to Delta Natural Gas Company, Inc., directing the company to provide detailed information on its rate adjustment case.
  • The commission's staff has requested specific data and explanations from Delta Natural Gas Company, Inc., including information related to Return on Equity (ROE) estimates, dividend yields, and earnings growth forecasts.
  • The company is required to provide the requested information in an electronic format by March 17, 2025, and to make timely amendments to any prior responses if new information is obtained.
  • The Attorney General of Kentucky has been directed to file an electronic version of the requested information by the same deadline.
  • The commission's staff has also requested an explanation for the use of certain data and methodologies used by Delta Natural Gas Company, Inc. in its rate adjustment proposal.
  • The company is required to provide support for the use of S&P Capital IQ consensus analysts' forecasts of earnings growth in its Discounted Cash Flow (DCF) analyses.
  • The commission's staff has raised concerns about the use of a three-month average yield in the company's calculations, which may not reflect long-term investor expectations.
  • The company is required to provide an update to its Capital Asset Pricing Model (CAPM) analyses using the most recent data available.

Statistics:

  • By March 17, 2025, Delta Natural Gas Company, Inc. must submit the requested information in an electronic format.
  • The company's response will determine the reasonableness of its proposed rate adjustment.
  • The Attorney General of Kentucky has been directed to file the requested information by the same deadline.
  • The commission's staff has requested that the company provide the requested information in a specific format, including Excel spreadsheet format with all formulas, columns, and rows unprotected.
  • The company is required to explain how it arrived at certain data and methodologies used in its rate adjustment proposal.

Sources:

  • Kentucky Public Service Commission
  • Office of the Attorney General of Kentucky
  • Delta Natural Gas Company, Inc.

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