1. Natural Gas Infrastructure Improvements
Pipeline and Hazardous Materials Safety Administration and Infrastructure Trackers
Presented By
Chuck Harder
Deputy Attorney General

2. About Our Office
MISSION | Protect consumers and the legitimate business community from deceptive trade practices, unfair business practices, and excessive utility rates or charges; mediate disputes between consumers and businesses; and educate the public regarding consumer issues.
Consumer Protection Division fights deceptive trade practices, mediates disputes between consumers and businesses, and educates the public regarding consumer issues.
Consumer Utilities Rate Advocacy Division is the voice of Arkansas utility ratepayers as it relates to the provision of regulated electric and natural gas service.

3. Investor Perspective Access to capital is not a problem for utilities.
Investors want –
Growth in operating income,
Predictable cash dividend, and
Low risk profile.
From a regulatory perspective, investors want to reduce regulatory lag on infrastructure investment.

4. Current Trends
A number of high profile incidents and the desire for economic growth are the primary catalysts for modernizing the nation’s gas utility infrastructure.
Growth will be lagging, and the utilities’ current customers will be called upon to pay for substantial infrastructure investment.
Regulators are receptive to rate mechanisms that reduce regulatory lag.
Energy prices are lower and less volatile.

5. Consumer Concerns
Single issue ratemaking might cause interested parties to lose sight of the big picture.
Keeping an eye on affordability.
Utility takes advantage of current environment to “gold plate.”

6. “Gold Plating”
Where utilities lack organic growth, the use of rate mechanisms to grow operating income is tempting.

7. Utility Strategy Build trust with economic and safety regulators.
Construct rate mechanisms that best suit financial outlook.
Infrastructure cost recovery tracker or surcharge with SFV rate design or decoupling mechanism
Formula rate plan
Deferral accounts
Tie programs closely to utility interpretation of PHMSA requirements.

8. Consumer Strategy - Discussion
Build trust with economic and safety regulators.
Tie cost recovery to performance.
Adjust return on equity to reflect reduction in risk.
Develop expertise in pipeline operations.

9. Contact
Chuck Harder Deputy Attorney General Office of Arkansas Attorney General Leslie Rutledge 323 Center Street, Suite 200 Little Rock, Arkansas Direct: | Cell: │ Fax:

10. Attorney General Leslie Rutledge
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Attorney General Leslie Rutledge