Common use of INTRODUCTION AND PROCEDURAL BACKGROUND Clause in Contracts

INTRODUCTION AND PROCEDURAL BACKGROUND. This Settlement Agreement (“Agreement”) is entered into this 3 day of June 2021, among Aquarion Water Company of New Hampshire, Inc. (“Aquarion” or the “Company”), the Office of the Consumer Advocate (“OCA”), Staff of the Commission participating in this proceeding (“Staff”), and the Towns of Hampton and North Hampton (together, the “Towns”) (collectively, the “Settling Parties”), in order to set temporary rates for the Company pursuant to RSA 378:27. On November 18, 2020, Aquarion filed with the Commission its Notice of Intent to File Rate Schedules pursuant to N.H. Code Admin. Rule Puc 1604.05, along with a petition for Permanent and Temporary Rates, proposed revised tariff pages, supporting testimony, and schedules requesting changes to the Company’s permanent rates that are intended to yield an annual increase of $1,373,351 in permanent revenues to be effective February 1, 2021. In its filing, the Company also proposed that temporary rates established at the same level as currently effective rates also to be effective February 1, 2021, in recognition of the financial hardships caused by the COVID pandemic and out of a desire to address the issue of temporary rates efficiently. See December 18, 2020 Testimony of ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ page 609, in Docket No. DW 20-184. As part of its proposal for temporary rates, the Company proposed that the current Water Infrastructure and Conservation Adjustment (“WICA”) surcharge be incorporated into base rates and that the WICA be reset to zero percent. On April 29, 2021, the Settling Parties held a technical session which evolved into settlement discussions, where consensus was reached as to the Company’s temporary rates. This settlement includes the Settling Parties recommendation as to temporary rates in this proceeding. In its filing, the Company referenced a test year revenue shortfall of $260,748. Staff agrees that the Company appears to be under-earning based on its review of the Company's 2019 Annual Report, as filed with the Commission. Staff and the parties agree that temporary rates set at current levels are advisable under the circumstances. Intervenors the Towns of Hampton and North Hampton agree that Aquarion’s Annual Report for the year ending December 31, 2019 shows that the Company earned less than its last- approved rate of return and do not object to the Settlement Agreement. However, the Settling Parties reserve all rights as to whether the Company in fact under-earned during the test year when taking into account all appropriate factors with respect to just and reasonable permanent rates, subject to reconciliation as provided by RSA 378:27 - 29.