Regulatory Matters

6 Months Ended

Mar. 31, 2019

Regulatory Assets and Liabilities, Other Disclosures [Abstract]

Regulatory Matters

Regulatory Matters

New York Jurisdiction

Distribution Corporation's current delivery rates in its New York jurisdiction were approved by the NYPSC in an order issued on April 20, 2017 with rates becoming effective May 1, 2017. The order provided for a return on equity of 8.7%.

Pennsylvania Jurisdiction

Distribution Corporation’s Pennsylvania jurisdiction delivery rates are being charged to customers in accordance with a rate settlement approved by the PaPUC. The rate settlement does not specify any requirement to file a future rate case.

FERC Jurisdiction

Supply Corporation currently has no active rate case on file. Supply Corporation's current rate settlement requires a rate case filing no later than December 31, 2019. In response to the FERC’s July 2018 Final Rule in RM18-11-000, et. al (Order No. 849), on December 6, 2018, Supply Corporation filed its Form 501-G, which addresses the impact of the 2017 Tax Reform Act, and advised the Commission that it would make a Section 4 rate filing no later than July 31, 2019, thereby obviating the need for FERC to take any further action. Refer to Note 5 - Income Taxes for further discussion of the 2017 Tax Reform Act.

Empire filed a Section 4 rate case on June 29, 2018, proposing rate increases to be effective August 1, 2018. Empire and its customers reached a settlement in principle in December 2018, and Empire’s subsequent motion to put in place those interim settlement rates, effective January 1, 2019, was approved by FERC’s Chief Administrative Law Judge on December 31, 2018. The settlement remains subject to FERC approval. The “black box” settlement provides for new, system-wide rates, and which, based on current contracts, is estimated to increase Empire’s revenues on a yearly basis by approximately $4.6 million. The settlement also provides new depreciation rates and a tiered transportation revenue sharing mechanism, beginning with Empire sharing 35% of transportation only revenues (net of certain excluded items) over $64.4 million up to Empire sharing 55% of those revenues over $68.4 million. Empire has also committed to undertake certain improvements to its electronic bulletin board and will convene regular customer meetings to address these and other improvements. Under the settlement, Empire and the other parties may not file to change rates until March 31, 2021, except that Empire may make a filing (to be effective November 1, 2020) under limited circumstances for contract changes with a large customer. Empire must file a Section 4 rate case no later than May 1, 2025.