STIPULATION AND SETTLEMENT AGREEMENT
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- Beryl Williams
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1 IN THE MATTER OF THE APPLICATION OF CHOPTANK ELECTRIC COOPERATIVE, INC. FOR AUTHORITY TO REVISE ITS RATES AND CHARGES FOR ELECTRIC SERVICE. BEFORE THE PUBLIC SERVICE COMMISSION OF MARYLAND CASE NO STIPULATION AND SETTLEMENT AGREEMENT This Stipulation and Settlement Agreement ( Settlement or Settlement Agreement ) is entered into by and between Choptank Electric Cooperative, Inc. ( Choptank ), the Staff of the Public Service Commission of Maryland ( Staff ) and the Maryland Office of the People's Counsel ( OPC ) (collectively, the Settling Parties ). WHEREAS, Choptank filed an Application for Authority to Revise its Rates and Charges for Electric Service on October 20, 2006 (the Application ); WHEREAS, through its Application, Choptank sought authority to increase its electric distribution rates by $3,016,476 or 8.96% and to decrease the generation and power supply portion of its rates by $22,255 or (0.04%) for an overall net increase of $2,994,221 or 2.94%; WHEREAS, the filed Application contained the Direct Testimony Michael I. Wheatley, Lisa H. Wothers and Christopher M. Miranda in support of the Application; WHEREAS, through its Application, Choptank requested that the Commission approve the proposed rate increase and authorize the rates to be effective on January 1, 2007 or as soon as practicable thereafter; WHEREAS, on November 22, 2006 the Commission suspended the proposed rates
2 for a period of not more than 150 days from the later of January 1, 2007 or the date that Choptank filed its audited Cost Allocation Manual (CAM) as required under Public Utilities Article, 4-208, Annotated Code of Maryland; WHEREAS, Choptank filed its CAM on November 10, 2006 and Choptank filed its Independent Accountants Report by the certified public accountant firm of Adams, Akin, Jenkins & Cheatham, pc on December 13, 2006; WHEREAS, in accordance with the Commission s directive, the proposed rates were suspended as of January 1, 2007 and a procedural schedule was established by the Hearing Examiner scheduling dates for the filing of direct testimony by the Staff of the Public Service Commission, OPC and other interested parties as well as dates for filing the rebuttal testimony of all parties and dates for an evidentiary hearing and a public hearing; WHEREAS, extensive discovery has been conducted and Choptank s Application has been thoroughly analyzed by representatives of Staff and OPC, and, as a result of and on the basis of that analysis, Choptank, Staff and OPC (collectively, the Settling Parties ) desire to settle this matter on the terms and conditions set forth herein: NOW, THEREFORE, the Settling Parties agree to the following settlement and compromise to be effective as of the date the instant Settlement and Stipulation is fully executed and filed with the Commission: FIRST, the Settling Parties agree that this Settlement Agreement is expressly conditioned upon the Commission s acceptance of all of its terms, without change to any term or condition. SECOND, the Parties agree that this Settlement Agreement constitutes a full settlement and compromise of the Company s Application. 2
3 THIRD, the parties agree that this Settlement Agreement represents a compromise of divergent positions in order to end litigation and that, except as expressly stated herein, no party to the Settlement Agreement shall be deemed to have approved, accepted, or consented to any principle underlying or supposed to underlie any of the matters provided for in this Settlement, nor shall approval of this Settlement constitute in any respect a determination by the Commission as to the merits of any of the contentions or allegations which might be made by any of the parties to the Settlement Agreement in the absence of the settlement. FOURTH, except as otherwise provided in this Settlement, all Settling Parties reserve all rights to take any position concerning any issue addressed in this Settlement in any future proceedings. The Settling Parties stipulate not to seek judicial review of a Commission order approving the Settlement as filed without modification, and stipulate not to take any action before the Commission or a Court in derogation of this Settlement. FIFTH, the various provisions of this Settlement are not severable. None of the provisions shall become operative unless and until the Commission issues an order approving the Settlement without modification or condition. If any portion of this Settlement is modified, conditioned, or rejected by the Commission, or on appeal from approval by the Commission, the Settlement shall be considered null and void. If the Settlement is rendered null and void by operation of this Paragraph, the Settling Parties agree to immediately enter into good faith negotiations to reach a new settlement. If any future law or regulation is enacted that any Settling Party believes, in good faith, has a material impact on the rights and obligations arising under this Settlement, the Settling Parties shall meet to discuss what action, if any, should be taken. 3
4 SIXTH, the discussions that produced this Settlement have been conducted on the understanding that all offers of settlement and discussions relating thereto are and shall be privileged and confidential, shall be without prejudice to the position of any party or participant presenting any such offer or participating in any such discussions, and are not to be used in any manner in connection with this proceeding or otherwise. If the Commission does not approve this Settlement without modification or condition, the Settlement shall be deemed withdrawn and shall not constitute any part of the record in this proceeding or be used for any other purpose whatsoever. SEVENTH, the Parties agree that an increase of $2,994,222 in net annual base rate revenue, which includes a base rate increase of $3,016,476 and a downward adjustment to the generation and power supply revenue of $22,255, shall become effective no sooner than with bills rendered on or after April 1, EIGHTH, the parties agree that the increase in base rate revenues specified in the preceding paragraph shall be accomplished in accordance with the revenue distribution set forth on Exhibit A to this Settlement Agreement. The monthly residential customer charge shall be no greater than $7.00. NINTH, the Administrative Charge of $.001 per kwh which was approved by the Commission in Re Choptank Electric Cooperative, Inc., 96 Md. PSC 115 (2005), Case 8987, Order No , shall remain in the tariff, however, the Administrative Charge component of $.001 per kwh will be removed from the filed distribution rate tariff and added to the filed standard offer service (SOS) rate. The Administrative Charge will be tracked on a monthly basis. The Administrative Charge will not appear as a separate line item on the customer s bill, and it will be removed from the calculation of the purchased power cost 4
5 adjustment. TENTH, Choptank agrees that it shall not file any request with the Commission for any further increase in its base rates for a period of one year beginning on the effective date of the tariff revisions agreed to in this Stipulation and Agreement. WHEREFORE, the Settling Parties have, by their respective counsel, entered into this Stipulation and Settlement Agreement and do hereby respectfully request that the Public Service Commission of Maryland enter an order approving this Stipulation and Settlement Agreement and authorizing Choptank to file tariff sheets which reflect an increase in rates effective with bills rendered on or after April 1, as set forth in Exhibit B attached hereto. Respectfully submitted, Brian M. Quinn DLA PIPER RUDNICK GRAY CARY US LLP 6225 Smith Avenue Baltimore, Maryland (410) Attorneys for Choptank Electric Cooperative, Inc. 5
6 MARYLAND PUBLIC SERVICE COMMISSION By: Janice M. Flynn Assistant Staff Counsel Maryland Public Service Commission William Donald Schaefer Tower 6 St. Paul Street Baltimore, Maryland (410) OFFICE OF MARYLAND PEOPLE S COUNSEL By: Peter Saar Assistant People s Counsel By: Pauline C. Onyemaechi Assistant People s Counsel Office of Maryland People s Counsel William Donald Schaefer Tower 6 St. Paul Street, Suite Baltimore, Maryland (410)
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