WEBVTT 1 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:02:15.754 --> 00:02:36.452 Okay, Madam Clerk, can I get you back a call rolled? Yes sir. Chairman David Jones. Commissioner David Crowd. Commissioner Clay good. Commissioner Kennethf Hill. 2 "4232****80" (557506560) 00:02:36.452 --> 00:02:37.897 Here. 3 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:02:37.897 --> 00:02:47.580 Commissioner Herb Helio Commissioner Robin Morris. All right, do we have anyone join Webex or NO one? 4 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:02:47.580 --> 00:03:03.150 Alright, so we'll go ahead and get started. Before we begin the agenda, I want to remind the parties that only four microphones will be active at one time. Please remember to turn the mic off and you can tell it's on but looking for a little green light like this one. 5 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:03:03.150 --> 00:03:23.150 All right. You want to go ahead and call the agenda, please? Section one commission business. Docket number 20 five-00085 Tennessee public utility Commission rule making to amend wastewater rules at Tennessee rules and rigs, number twelve twenty-04-13 at six. 6 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:03:23.150 --> 00:03:45.980 I moved to adopt the proposed rule amendments to direct staff to prepare the rules for review by the Tennessee Attorney general. Thereafter, the staff will file the final proposed regulations with the Secretary of State and appears directed for a hearing before the Tennessee General Assembly's joint government operations committee. Staff are granted editorial. 7 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:03:45.980 --> 00:03:59.212 Privileges to complete the roommaking process. Hi sir. Good time. 8 "4232****80" (557506560) 00:03:59.212 --> 00:04:03.651 He'll go tie. 9 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:04:03.651 --> 00:04:29.800 Section six Commissioners Good Jones Hilliert, high, and Morrison, docket number 20 five-00074 Peamont Natural gas company, application of Pimont Natural Gas Company Inc and Spire Tennessee Inc for approval of a transfer of authority to provide utility services pursuant to Tennessee Code annotated safe. 10 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:04:29.800 --> 00:04:57.739 65-four-113 in related authorizations deliberations. I call a paneled order for deliberations in this matter. Notice of these deliberations was published on March the 5th 2026. This matter has been conducted in accordance with uniform Administrative Procedures Act. The hearing of this matter was duely held on February the 17th 2026. At the conclusion of the. 11 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:04:57.739 --> 00:05:23.609 Hearing the public was provided an opportunity to comment if we're ready to deliberate I have a motion. Based on the evidentiary record, I find that Spire Tennessee Inc has the requisite managerial technical and financial capabilities to operate the natural gas distribution system located in Davidson County and surrounding counties in Middle Tennessee presently owned and operated by Pedmont natural gas. 12 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:05:23.609 --> 00:05:38.789 Company Inc. Also find the application of Pedmon inspire is consistent with the applicable statues and commission rules regarding the requirements for transfers of authority, acquisitions, and certificates of public convenience and necessity. 13 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:05:38.789 --> 00:05:58.789 Additionally since the owner of the Tennessee system NO longer desires to provide natural gas distribution services to customers in its service territory, I find there exists a public need for spire to serve the area and the transfer of authority to spire for the provision of natural gas distribution services for. 14 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:05:58.789 --> 00:06:20.659 Others of public interests. I further find based on the evidentiary record that the requested sale and transfer of authority to spire, as well as the transfer of pedmod certificate, the public convenience and necessity and related service territory to spire should be approved subject to the following conditions. Number one, except for the transfer and. 15 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:06:20.659 --> 00:06:47.509 Adoption of Pedmot's annual rate review mechanism or ARRM, which will be addressed separately. Pedmot's presently approved terrorists rates and terms and conditions of service shall be adopted by spiroid closing as far as initial terrorist rates and terms and conditions of service. Within a reasonable time after closing, spire shall make all necessary administrative filings to substantiate itself forth. 16 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:06:47.509 --> 00:07:17.489 Pedanmont and all such tariffs. Any substantive modifications to such initial terriffs, rates and terms and conditions of service shall be require approval of the commission. Number two, with regard to the transferability of Petmont's existing arm established under subsection D six of the alternative regul regulatory method statutes, these types of mechanisms are designed with specific equity returns and rate making methodologies. 17 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:07:17.489 --> 00:07:35.909 For a particular utility, it should generally not be transferred from one utility to another. Transferring a modified version of this arms aspire for a temporary period, however serves a public interest in this case because such transfer mitigates the potential for substantial regulatory lag. 18 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:07:35.909 --> 00:07:55.909 That could occur during the integration period, and it lessens the potential for a rate shock attributable to intermittent rate increases as opposed to annual increases, which are typically smaller. To reasonably balance the interest of the parties and protect customers from any unintended and unforeseen consequences of transferring Pete month's arm. 19 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:07:55.909 --> 00:08:28.399 A reasonable cap on the amount of the annual rate increase that maybe recovered under the temporary arm is warranted. Accordingly Petemont's arm should be transferred to spire on a temporary basis, subject to the following modifications and conditions which must be observed and reflected in all temporary armed filings. Aid, the transfer of the arm is limited to a three year period. The only authorized temporary arm filings shall be for the years 2025 2026 and 2027. 20 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:08:28.399 --> 00:08:52.709 Which shall be filed in 2026 2027 and 2028 respectively. Any proposed rate increases subsequent to the three year temporary arm period must be heard in a general rate case proceeding. If Spire files the general rate case petition prior to the expiration of the three year temporary arm period, the temporary arm shall automatically terminate upon such filing. 21 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:08:52.709 --> 00:09:09.119 B, if any of the individual temporary arm filings calculated in the earnings deficiency for the historical base period, spires will be authorized to collect any of the calculated deficiency or associated carrying charges from customers. 22 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:09:09.119 --> 00:09:25.799 Further, spire shall not be authorized to defer any amount of the earnings deficiency or related carrying charges as a regulatory asset and shall not be authorized to seek recovery or any such deficiency or carrying charges in the, in any future rate proceeding. 23 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:09:25.799 --> 00:09:40.949 Consistent with this decision, any current surcharge designed to recover an earnings deficiency related to pedmots operations shall terminate at closing with an accompanying write off of any associated regulatory asset. 24 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:09:40.949 --> 00:10:00.949 C, if any of the individual temporary arm filings calculate an earnings suffici sufficiency for the historical base period, spire shall refund the earning sufficiency within related carrying charges charges to customers in accordance with a rate design or rate decrement approved by. 25 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:10:00.949 --> 00:10:20.759 By the commission. D, the average annual rate increase shall not exceed 4 % for any of the individual temporary armed filings. This 4 % limit on the average annual base rate increase is intended to limit the increase in total revenue requirements to more to know more than 4 % annually. 26 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:10:20.759 --> 00:10:40.759 If an individual temporary arm filing calculates an average base rate increase in excess of 4 %, spire shall not be authorized to collect such amount exceeding 4 %. Further, spire shall not be authorized to defer such excess amount as a regulatory asset and shall not be authorized to seek recovery. 27 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:10:40.759 --> 00:11:01.189 A such excess amount in any future rate proceeding. E, any each temporary arm filing shall continue to be subject to a hundred and 20 day review period and any rate adjustments resulting from a temporary arm filing shall be approved by the commission after hearing and determination that such adjustments are. 28 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:11:01.189 --> 00:11:22.789 Just and reasonable. Number three, Spire is not requesting the commission to approve any acquisition premium in this proceeding. Spire, therefore, is not authorized to recover any portion of the purchase price that exceeds the net book value of the underlying assets purchased in this transaction. Moreover, spires. 29 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:11:22.789 --> 00:11:45.259 Not authorized to record a regulatory asset related to such acquisition premium for recover recovery in any future rate proceeding. Number four, spire is not requesting to recover due diligence calls related to this transaction, as soon aspire is not authorized to recover such calls from customers in this proceeding. Moreover. 30 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:11:45.259 --> 00:12:11.629 Your spire shall not defer such calls to a regulatory asset for recovery in any future rate proceedings. Number five, spire is not requesting recover any calls related to the transition services agreement between. As such, spire is not authorized to recover such calls from customers in this proceeding. Moreover, spire shall not defer such calls to a regulatory asset for recovery in any. 31 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:12:11.629 --> 00:12:34.819 Future rate proceedings. Number six, other than legal calls directly related to this proceeding spire is not requesting recover transaction calls associated with this transaction. As such, spire is not authorized to recover transaction calls, other than legal calls directly related to this proceeding from customers in this proceeding. Moreover, spire shall not defer. 32 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:12:34.819 --> 00:12:56.879 For such calls to a regulatory asset for recovery and future rate proceedings. Number seven, with regard to any legal costs directly related to this proceeding spired may request recovery of such calls in a future rate proceeding other than the temporary arm transfer to spired. Any such requests will be evaluated for reasonableness. 33 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:12:56.879 --> 00:13:13.559 Verifiability and conformity with commission policy and rules. No persumption is made regarding the likelihood of recovery of such cost in this proceeding. Consequently spire shall not defer it such costs to a regulatory asset for rate making purposes. 34 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:13:13.559 --> 00:13:34.999 Number eight regarding integration of transition costs that are unrelated to the party's transaction service agreement, which I separately addressed previously, Spire may request recovery of such costs in a future rate proceeding other than the temporary arm transfer to spire. Any such requests shall be evaluated for reasonable verifiability. 35 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:13:34.999 --> 00:13:57.919 In conformity with commission policy and rules. No perceptions being made regarding the likelihood of recovery of such costs as proceeding. Consequently, spire shall not defer such costs to a regulatory asset for rate making purposes. Number nine, in recognition of non transferability of pedmot's existing accumulated deferred income tax balance. 36 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:13:57.919 --> 00:14:30.029 Spire proposes to establish a $250000000 regulatory liability as an offset to rate based, which will be amortized over 20 years commitsing upon the closing of the proposed transaction. I find Spires proposal will be reasonable and accordingly spire shall establish and amortize such regulatory liability as proposed. Number ten, the remaining net balance of Pedmonts deferred legacy pension and regulatory assets shall be transferred to spire at closing. 37 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:14:30.029 --> 00:14:50.029 And continue to be amortized per the existing schedule. Number eleven, personal personal identifying customer information held by spire shall be protected and safeguarded and shall not be shared with any other party for any other reason unless legally required or requested by this commission for regulatory. 38 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:14:50.029 --> 00:15:16.199 Purposes. Number twelve, spire shall provide quarterly integration status reports on a timely basis to the commission and the consumer advocate. The status reports shall be detailed as reasonably possible and at a minimum include the following types of information. A, the projects or activities planned for full integration. B, the capital and operating budgets for each project or activity. 39 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:15:16.199 --> 00:15:31.829 C cumulative prox progress being compared to the original timeline by project or activity. D, the actual cumulative capital and operating costs incurred at each quarter end by project or activity. 40 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:15:31.829 --> 00:15:50.699 E, the expected capital and operating costs remaining for full integration by project or activity. F, the expected date of full integration, and G any other issues re relevant to achieving full integrations such as unforeseen obstacles or circumstances. 41 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:15:50.699 --> 00:16:08.399 Number 13. Spire shall submit annual operating metrics reports to the commission and the consumer advocate for its Tennessee operations containing substantially the same information as provided to others jurisdictions as reflected in the reports provided by Spire in discovery. 42 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:16:08.399 --> 00:16:27.179 Number 14. Pedmod shall remain available for and responsive to request for information made during the integration period. Further, Pedmod shall be obligated to cooperate with such requests until its obligations under the transaction services agreements are fulfilled. 43 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:16:27.179 --> 00:16:47.179 Based on the foregoing findings and conditions, I move approval of the sale and transfer of authority to spired, along with a transfer of the certificate of public convenience and necessity related to the service territory territory too spired contingent upon P mine inspired complying with all the A prevention conditions I saw. 44 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:16:47.179 --> 00:17:07.849 Section 14 Commissioner Good Cryl Jones Hill and Heliard, docket number 03-00647 CBTS. 45 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:17:07.849 --> 00:17:36.235 Technology Solutions LLC, application of Cincinnati Bill, any distance ink, application for authority to provide operator services and resale interchange long distance services in Tennessee company requests for cancellation. I moved for cancellation per company request. A second ago yes. Good votes yes. 46 "4232****80" (557506560) 00:17:36.235 --> 00:17:40.296 Yeah. 47 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:17:40.296 --> 00:18:04.929 Alright, if nothing further, I move, we adjourn the conference. Today is a bittersweet day for the commission. We have a couple of long service folks retiring today, so we would like to invite anyone who would like to stay after the conference to help celebrate David Foster and Joe Shirley's retirement with us. And with that, I guess it's time to. 48 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:18:04.929 --> 00:18:12.077 Celebrate retirements. Thank you very much. 49 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:18:12.679 --> 00:18:15.934 Be in the back of the room, by the way. 50 "4232****80" (557506560) 00:18:15.934 --> 00:18:22.158 Thank you mr. chairman. And for those who are retiring boy, we're gonna miss them. 51 "DGS-Nashville-2.201-AJB Hearing Room" (1659853312) 00:18:22.158 --> 00:18:32.329 Thanks, dr. Hill.