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Regulatory Matters | 9 Months Ended
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Sep. 30, 2020
Regulatory Assets and Liabilities Disclosure [Abstract] |
Regulatory Matters | Regulatory Matters Cost Recovery and Trackers Comparability of our line item operating results is impacted by regulatory trackers that allow for the recovery in rates of certain costs such as those described below. Increases in the expenses that are the subject of trackers generally result in a corresponding increase in operating revenues and, therefore, have essentially no impact on total operating income results. Certain costs of our operating companies are significant, recurring in nature and generally outside the control of the operating companies. Some states allow the recovery of such costs through cost tracking mechanisms. Such tracking mechanisms allow for abbreviated regulatory proceedings in order for the operating companies to implement charges and recover appropriate costs. Tracking mechanisms allow for more timely recovery of such costs as compared with more traditional cost recovery mechanisms. Examples of such mechanisms include GCR adjustment mechanisms, tax riders, bad debt recovery mechanisms, electric energy efficiency programs, MISO non-fuel costs and revenues, resource capacity charges, federally mandated costs and environmental-related costs. A portion of the Gas Distribution revenue is related to the recovery of gas costs, the review and recovery of which occurs through standard regulatory proceedings. All states in our operating area require periodic review of actual gas procurement activity to determine prudence and to permit the recovery of prudently incurred costs related to the supply of gas for customers. Our distribution companies have historically been found prudent in the procurement of gas supplies to serve customers. A portion of the Electric Operations revenue is related to the recovery of fuel costs to generate power and the fuel costs related to purchased power. These costs are recovered through a FAC, a quarterly regulatory proceeding in Indiana. Infrastructure Replacement and Federally-Mandated Compliance Programs All of our operating utility companies have completed rate proceedings involving infrastructure replacement or enhancement, and have embarked upon initiatives to replace significant portions of their operating systems that are nearing the end of their useful lives. Each company's approach to cost recovery is unique, given the different laws, regulations and precedent that exist in each jurisdiction. The following table describes the most recent vintage of our regulatory programs to recover infrastructure replacement and other federally-mandated compliance investments currently in rates and those pending commission approval:
(in millions) |  |  |  |  |
Company | Program | Incremental Revenue | Incremental Capital Investment | Investment Period | Filed | Status | Rates Effective
Columbia of Ohio | IRP - 2020 | 32.9 |  | 234.4 |  | 1/19-12/19 | February 28, 2020 | Approved April 22, 2020 | May 2020
Columbia of Ohio | CEP - 2020 | 18.0 |  | 185.1 |  | 1/19-12/19 | February 28, 2020 | Approved August 12, 2020 | September 2020
NIPSCO - Gas | TDSIC 11(2) | (1.7) |  | 38.7 |  | 5/19-12/19 | February 25, 2020 | Approved June 24, 2020 | July 2020
NIPSCO - Gas | TDSIC 1 | 1.3 |  | 26.0 |  | 1/20-6/20 | August 25, 2020 | Order Expected December 2020 | January 2021
NIPSCO - Gas | FMCA 3(3) | 0.3 |  | 43.0 |  | 4/19-9/19 | November 26, 2019 | Approved March 31, 2020 | April 2020
NIPSCO - Gas | FMCA 4(3) | 1.6 |  | 43.2 |  | 10/19-3/20 | May 26, 2020 | Approved September 23, 2020 | October 2020
Columbia of Virginia | SAVE - 2020 | 3.8 |  | 50.0 |  | 1/20-12/20 | August 15, 2019 | Approved December 6, 2019 | January 2020
Columbia of Virginia | SAVE - 2021 | 5.2 |  | 46.4 |  | 1/21-12/21 | July 24, 2020 | Order Expected November 2020 | January 2021
Columbia of Kentucky | SMRP - 2020 | 4.2 |  | 40.4 |  | 1/20-12/20 | October 15, 2019 | Approved December 20, 2019 | January 2020
Columbia of Kentucky | SMRP - 2021 | 5.8 |  | 50.0 |  | 1/21-12/21 | October 15, 2020 | Order Expected Q1 2021 | Q1 2021
Columbia of Maryland | STRIDE - 2020 | 1.3 |  | 15.0 |  | 1/20-12/20 | January 29, 2020 | Approved February 19, 2020 | February 2020
Columbia of Maryland | STRIDE - 2021 | 1.3 |  | 16.9 |  | 1/21-12/21 | October 29, 2020 | Order Expected December 2020 | January 2021
NIPSCO - Electric | TDSIC - 6 | 28.1 |  | 131.1 |  | 12/18-6/19 | August 21, 2019 | Approved December 18, 2019 | January 2020
NIPSCO - Electric | TDSIC - 7(1) | 13.0 |  | 122.3 |  | 7/19-7/20 | September 29, 2020 | Order Expected January 2021 | February 2021
NIPSCO - Electric | FMCA - 12(3) | 1.6 |  | 4.7 |  | 3/19-8/19 | October 18, 2019 | Approved January 29, 2020 | February 2020
NIPSCO - Electric | FMCA - 13(3)(4) | (1.2) |  | — |  | 9/19-2/20 | April 15, 2020 | Approved July 29, 2020 | August 2020
Columbia of Pennsylvania | DSIC - Q1 2020 | 0.9 |  | 28.2 |  | 12/19-2/20 | April 27, 2020 | Approved May 4, 2020 | May 2020
Columbia of Pennsylvania | DSIC - Q2 2020 | 0.8 |  | 28.6 |  | 3/20-5/20 | June 19, 2020 | Approved June 29, 2020 | July 2020
Columbia of Pennsylvania | DSIC - Q3 2020 | 2.6 |  | 85.0 |  | 6/20-8/20 | September 18, 2020 | Approved September 30, 2020 | October 2020
(1)Incremental capital and revenue are net of amounts included in the step 2 rates. (2)Incremental revenue is net of amounts included in the step 2 rates and reflects a more typical 6-month filing period. (3)Incremental revenue is inclusive of tracker eligible operations and maintenance expense. (4)No eligible capital investments were made during the investment period. Rate Case Actions The following table describes current rate case actions as applicable in each of our jurisdictions net of tracker impacts:
(in millions) |  |  |  |
Company | Requested Incremental Revenue | Approved or Settled Incremental Revenue | Filed | Status | Rates Effective
NIPSCO - Electric(1) | $ | 21.4 |  | $ | (53.5) |  | October 31, 2018 | Approved December 4, 2019 | January 2020
Columbia of Pennsylvania | $ | 100.4 |  | in process | April 24, 2020 | Order Expected Q1 2021 | January 2021
Columbia of Maryland(2) | $ | 5.0 |  | $ | 2.0 |  | May 15, 2020 | Order Expected November 2020 | December 2020
(1)Rates were implemented in two steps, with implementation of step 1 rates effective on January 2, 2020 and step 2 rates effective on March 2, 2020. (2)On October 7, 2020, the Public Utility Law Judge issued a proposed order approving a settlement under which the parties to the case agreed upon the $2.0 million incremental revenue. The proposed order will become a final order on November 7, 2020, unless it is modified or reversed by the Maryland PSC. COVID-19 Regulatory Filings In response to COVID-19, we have engaged, or have received directives from, the regulatory commissions in the states in which we operate, as described below. Columbia of Ohio filed a Deferral Application and a Transition Plan with the PUCO on May 29, 2020. The Deferral Application requested approval to record a regulatory asset for COVID-19 incremental costs, foregone revenue from late payment fees, and bad debt expense from certain classes of customers. An order approving the Deferral Application was received on July 15, 2020. The Transition Plan requested the resumption of activities that were suspended in March 2020, including resumption of disconnects due to non-payment and billing of late payment fees beginning with the August 2020 billing cycle. The PUCO approved the Transition Plan on June 17, 2020. As of September 30, 2020, $1.9 million of incremental COVID-19 related costs were deferred to a regulatory asset. Recovery of the regulatory asset will be addressed in a future regulatory proceeding. NIPSCO received a COVID-19 order from the IURC on June 29, 2020. This order extended the disconnection moratorium and the suspension of collection of late payment fees, deposits and reconnection fees through August 14, 2020. The order requires utilities to offer payment arrangements of at least six months and requires NIPSCO to provide the IURC with information about NIPSCO’s communications with delinquent customers. On August 12, 2020, the IURC issued an order affirming the expiration of the disconnect moratorium after August 14, 2020, while requiring that six month payment plans be offered to all customers and extending the suspension for collection of late payment fees, deposits, and reconnection fees through October 12, 2020 for residential customers only. On October 7, 2020 the Office of Utility Consumer Counselor ("OUCC") filed a motion for the IURC to extend these temporary consumer protections for an additional 60 days. On October 27, the IURC issued a docket entry denying the OUCC's motion. The June 29, 2020 order also authorized NIPSCO to create a regulatory asset for COVID-19 related incremental bad debt expense as well as the costs to implement the requirements of the order. As of September 30, 2020, $4.8 million of incremental bad debt expense and costs to implement the requirements of the order were deferred to a regulatory asset. Recovery of the regulatory asset will be addressed in future base rate proceedings. Columbia of Pennsylvania received a secretarial letter issued by the Pennsylvania PUC on May 13, 2020 authorizing Pennsylvania utilities to create a regulatory asset for incremental bad debt expense incurred since March 13, 2020, above levels currently in rates. While Columbia of Pennsylvania is not authorized to defer any other incremental costs, it is required to track extraordinary non-recurring costs, and any offsetting benefits received, in connection with COVID-19. On October 13, 2020, the Pennsylvania PUC entered an order modifying its March 13, 2020 emergency order, which established a moratorium on utility service terminations. As modified, the moratorium still applies to residential customers with incomes at or below 300% of the federal poverty income guidelines (“protected customers”). For all other customers, the moratorium will be lifted on November 9, 2020, but utilities must comply with several notice requirements beyond those already in place in Pennsylvania in order to proceed with service terminations. For residential customers who are subject to termination under the revised moratorium, as of November 1, 2020, the standard winter service moratorium will be in effect until April 1, 2021, which will render service termination for delinquent accounts impractical during that period. The Pennsylvania PUC’s October 13, 2020 order also includes the following requirements: a utility shall offer a payment arrangement for a period of no less than 18 months to small business customers, as defined by a utility’s tariff, with past due amounts; utilities shall waive all connection, reconnection, late payment fees and deposit fees otherwise required for service for protected customers. Additionally, the October 13, 2020 order authorizes utilities to create a regulatory asset for any incremental expenses incurred above those embedded in rates resulting from the directives contained in the Order. As of September 30, 2020, $1.3 million of incremental bad debt expense was deferred to a regulatory asset. Recovery of any regulatory asset will be addressed in future base rate proceedings. On March 16, 2020, the VSCC ordered a moratorium on service disconnections for unpaid bills due to the effects of COVID-19, which was subsequently extended through October 5, 2020 to allow the Virginia General Assembly to address the issue. The order also suspended late payment fees, required utilities to offer payment plans of up to 12 months, and required utilities to provide certain information about customer accounts receivables to the VSCC. The VSCC moratorium expired on October 6, 2020; however, the directives requiring utilities to offer payment plans of up to 12 months and suspending service disconnections or charging of late payment fees to customers that are current on such payment plans remain in effect. On October 16, 2020, the Virginia General Assembly passed legislation that would extend the moratorium on service disconnections and late payment fees; action from the Governor on the legislation is pending. Columbia of Virginia continues its suspension of service disconnections and late payment fees until the result of the pending legislation is known. Columbia of Virginia received an order from the VSCC on April 29, 2020 authorizing Columbia of Virginia to create a regulatory asset for incremental bad debt expense, suspended late payment fees, reconnection costs, carrying costs and other incremental prudently incurred costs related to COVID-19. We are evaluating the impact of the order. Recovery of any regulatory asset, when recorded, will be addressed in future base rate proceedings. On August 31, 2020, with the Maryland governor's executive order prohibiting residential utility service terminations set to expire on September 1, 2020, the Maryland PSC issued an emergency order that prohibited residential service terminations until October 1, 2020. The Maryland PSC's August 31, 2020 emergency order also includes the following requirements: effective October 1, 2020, Maryland utilities may proceed with residential service terminations; utilities must give notice at least 45 days before terminating service on a residential account; structured payment plans offered to applicable residential customers must allow a minimum of 12 months to repay, or 24 months for certified low income customers; utilities are prohibited from collecting or requiring down payments or deposits as a condition of beginning a payment plan by any residential customer; and utilities are prohibited from refusing to negotiate or denying a payment plan to a residential customer due to such customer's failure to meet the terms and conditions of an alternate payment plan during the past 18 months. Columbia of Maryland received an order issued by the Maryland PSC on April 9, 2020, authorizing Maryland utilities to create a regulatory asset for incremental COVID-19 related costs, including incremental bad debt expense, incurred to ensure that customers have essential utility service during the state of emergency in Maryland. Such incremental costs must be offset by any benefit received in connection with COVID-19. As of September 30, 2020, Columbia of Maryland has deferred $0.5 million of incremental bad debt expense and COVID-19 related costs to a regulatory asset. Recovery of the regulatory asset will be addressed in future base rate proceedings. Columbia of Kentucky received an order from the Kentucky PSC on September 21, 2020 lifting the disconnection moratorium for all customers, effective October 20, 2020. The September 21, 2020 order also lifted the suspension of late payment and reconnection fees for non-residential customers as of October 20, 2020. For residential customers, the moratorium on late payment and reconnection fees is extended to December 31, 2020 and tracking of lost revenue is required. Residential customers with accumulated arrearages for service provided on or after March 16, 2020 through October 1, 2020 will be notified and placed on a default payment plan of equal installments for nine months beginning with the November 2020 billing cycle. Residential customers on a payment plan that default shall be offered another payment plan. Carrying charges may be applied to all arrearages arising during the default payment plan period at a rate no greater than the utility’s long-term debt rate. The Kentucky PSC order allows Columbia of Kentucky to create a regulatory asset for carrying charges on all arrearages arising during the default payment plan period. Recovery of the regulatory asset, when recorded, will be addressed in future base rate proceedings. Columbia of Kentucky is engaged with peer utilities and is working closely with the Kentucky PSC on the implementation of the September 21, 2020 order, including exploring flexible payment plans for customers who need financial assistance in order to mitigate the amount of uncollectible customer receivables and tracking of COVID-19 related costs.

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