Revenue Decoupling - Residential - New Hampshire Gas - Liberty
In April, the New Hampshire Public Utilities Commission issued a ruling on our rate case filing (DG 17-048). As part of the filing, we requested revenue decoupling which will change the way we charge our customers for gas delivery service. Our request was granted, and as a result, you will see an new line item on your bill called "Normal Weather Adj."
It’s the separation of a utility’s revenue from customer usage. The Commission determines a just and reasonable revenue level, based on the costs to run and maintain a safe and reliable gas system. Under decoupling, this revenue will not be affected by customer usage that varies due to abnormal weather, conservation or energy efficiency. This is why we will be promoting our Energy Efficiency programs more than ever. Visit the “Smart Energy Use” section of our website to learn about our Energy Efficiency Programs.
This arrangement means the company can better budget and plan for expenses and revenues. It also means the company is not penalized when customers use less gas due to conservation and energy efficiency measures taken. Decoupling will also compensate for weather fluctuations that can put Liberty’s revenue above or below budget.
No. The company has an allowed level of revenue but not a guaranteed profit. The company still needs to control costs and make good business decisions in order to be profitable. Both of which are reviewed and regulated by the Commission.
Before decoupling, when we created our budget, we predicted our revenue using several factors including historic trends based on weather. We know the typical amount of gas used in each “normal” month of a year but sometimes a month can be colder or warmer than normal. If a month was colder than normal, the company received more revenue due to increased usage. If a month was warmer than normal, the company received less revenue due to decreased usage.
With decoupling we apply a credit or charge to customers’ bills in order to compensate for variations in expected weather during the customer’s billing cycle. We calculate the difference between the typical (or normal) weather and the actual weather that occurred. We then apply a credit or a charge to customers’ bills so that the revenue collected matches our forecast.
During the winter rate period (November 1 – April 30), each month you will see a new line item on your bill called the Normal Weather Adjustment. This line item will show a credit or charge on your bill to compensate for a colder- or warmer-than-normal month.
If the month is colder than normal, our customers will use more gas than expected. This means we will collect more revenue than budgeted. The Normal Weather Adjustment would apply a credit to customers’ bills to refund that over collection.
If a month is warmer than normal, customers will use less gas than expected and the company will fall short of its expected revenue. In this case the Normal Weather Adjustment will show up as a charge on customers’ bills.
There will also be an adjustment to your bill to compensate for decreased usage due to energy efficiency and conservation. This adjustment is made annually on November 1st. This adjustment is part of the Distribution Adjustment Charge - a separate line on your bill. We have many rebates and incentives for taking energy efficiency measures. For information on how you can save, visit the “Smart Energy Use” section of our website to learn about our Energy Efficiency Programs.
PLEASE NOTE: The Gas Supply Charge that appears on your bill is based on market pricing and will not be affected by decoupling. We purchase gas on the open energy market and pass those costs on to customers without a markup in price. Gas supply pricing can vary significantly. This is especially true when comparing summer to winter pricing.
Yes, you are still charged based on the number of therms of gas you use. Learn how to use less gas and save by participating in our Energy Efficiency programs. Visit the “Smart Energy Use” section of our website for more information.
No. Using less gas means you will be charged less for Distribution, less for Distribution Adjustment and less Gas Supply. Even in months where there is a Normal Weather Adjustment charge, you will still see a reduction in your bill for using less energy. Energy Efficiency means using less gas while maintaining or improving your comfort. Visit the “Smart Energy Use” section of our website to learn about the Energy Efficiency programs we have available. We offer rebates and incentives on qualifying measures.
The main purpose of decoupling is to promote energy efficiency. Customers who take advantage of energy efficiency measures will reduce their usage, lower bills and help the environment.
Separating a utility’s revenue from overall customer usage means that the utility will have more incentive to promote energy efficiency programs, rather than selling more gas, because the utility will not incur a revenue loss as a result of energy efficiency measures utilized by customers. We have Energy Efficiency Programs that will help you use less gas and save. Visit the “Smart Energy Use” section of our website to learn more.
Liberty Utilities is the first utility company in New Hampshire to make decoupling part of their rate structure. While decoupling is a new concept in New Hampshire, the concept has been around for many years and is being used in over half the states in the country.
Yes. For a residential heating customer, the customer charge went from $24.43 to $15.02, a decrease of $9.41/month or $112.92/year.
For a step-by-step explanation of how the Normal Weather Adjustment is calculated, please download the following file.
If you would like to calculate your own Normal Weather Adjustment please contact our customer care team (1-800-833-4200) and ask for the following information: Your Base Load, Your Heat Factor and the Actual Distribution charge from your bill that occurred between November 1 and April 30. (Some bills may include usage outside of those dates. For example, your November bill may have usage that occurred in October and November.)
Once you have obtained the information above, download our Normal Weather Adjustment Calculator and plug in the numbers.
We created a calculator that will indicate if your billing period was warmer or colder than normal. Simply enter the service dates from your bill and the calculator will compare your actual billing period to the 30 year average for the same period of time.
How Does It Work?
Revenue Decoupling and Normal Weather Adjustment
Still have a question? We are happy to answer it!
You can contact us at 800-833-4200 or by using the online form below.Submit a Question