Common use of REVENUE DECOUPLING MECHANISM Clause in Contracts

REVENUE DECOUPLING MECHANISM. 4.1 The Settling Parties agree that Unitil shall implement a Revenue Decoupling Mechanism (“RDM”) substantially as proposed in the initial prefiled testimony of Unitil witness Xxxxxxx Xxxxx, subject to the adjustments specified in this Settlement Agreement. Specifically, the Settling Parties agree and recommend that the Commission approve a RDM using a Revenue Per Customer (“RPC”) model that shall reconcile monthly actual and authorized RPC by rate class. Settlement Attachment 3 provides the Company’s monthly target RPCs effective August 1, 2022 and also provides preliminary monthly target RPCs effective September 1, 2022 to reflect the 2022 Step Adjustment. 4.2 The Company shall implement the RDM as follows: 4.2.1 First, the Company shall record monthly variances between actual and authorized RPC for each rate class. Rather than record and reconcile the variances on an annual basis, the variances shall be recorded and reconciled separately, for the Peak (November through April) and Off-Peak (May through October) periods (the “Measurement Periods”). The monthly variances in the applicable Measurement Period shall then be totaled by class. The total variances by customer class group and carrying costs shall form the basis for the revenue decoupling adjustment (“RDA”) by group and the calculation of revenue decoupling adjustment factors (“RDAF”) (surcharges or credits). A Customer Class Group comprises the rate schedules combined for purposes of calculating the RDA amounts. The four Customer Class Groups shall be: (1) Residential Heating (R-5 and R-10); (2) Residential Non-Heating (R-6); (3) C&I High Load Factor (G-50, G-51, G-52); and (4) C&I Low Load Factor (G-40, G-41, G-42). 4.2.2 Second, the Company shall annually file with the Commission the applicable RDAF 45 days in advance of November 1. The filing will provide the proposed RDAF for the Peak period, for effect November 1, and subsequent Off-Peak period, for effect May 1. The RDA for the Peak period shall reflect actual data for the entire six month period while the RDA for the Off-Peak period shall reflect actual data for the first three months of the period and estimated data for the remaining three months. The filing shall include the RDA by group, including prior period reconciliation and calculation of the RDAF. Pursuant to this Settlement Agreement, rather than reconcile the RDA on an allocated basis as initially proposed by Unitil, the Company shall reconcile the RDA using the four customer class groups defined in subpart 4.2.1 above. The RDAF shall be calculated as a dollar per therm charge or credit based on the RDA for each group divided by the projected therm sales for each group over the prospective six-month period November through April and May through October (“the RDM Adjustment Period”). The RDAF shall be charged or credited to customer bills during the RDM Adjustment Period. 4.2.3 Unitil shall implement an RDA cap of 4.25 percent of approved distribution revenues as established by this Settlement for each group over the relevant Measurement Period(s) for over- and under-recoveries. To the extent that the RDA for a group, including prior period reconciliation exceeds 4.25 percent of distribution revenue, the amount over or under 4.25 percent shall be deferred, with carrying costs accrued monthly at the Prime Rate with said Prime Rate to be fixed on a quarterly basis and to be established as reported in The Wall Street Journal on the first business day of the month preceding the calendar quarter. If more than one interest rate is reported, the average of the reported rates shall be used. In the Company’s next distribution rate case, parties to that proceeding may propose specific treatment of any carried balances remaining at that time. 4.2.4 The Settling Parties agree that the RDM shall be implemented at the proposed effective date of new permanent rates on August 1, 2022. At that time, Unitil shall cease accruing Lost Base Revenue (“LBR”) due to energy efficiency and shall transition to decoupling as described in the August 2, 2021 Testimony of Xxxxxxxxxxx Xxxxxxxx and Xxxxxx Xxxxxxxxxx at Xxxxx pages 000111-113. 4.2.5 With respect to the treatment of special contract revenue, the Company shall not implement its proposal to reconcile test year special contract revenue with actual revenue. The Settling Parties agree that if any special contract customers become tariff customers, they will be excluded from the RDM.

REVENUE DECOUPLING MECHANISM. 4.1 The Settling Parties agree that Unitil shall implement a Revenue Decoupling Mechanism (“RDM”) substantially as proposed in the initial prefiled testimony of Unitil witness Xxxxxxx Xxxxx, subject to the adjustments specified in this Settlement Agreement. Specifically, the Settling Parties agree and recommend that the Commission approve a RDM using a Revenue Per Customer (“RPC”) model that shall reconcile monthly actual and authorized RPC by rate class. As proposed, the Company’s new electric vehicle time-of-use (“EV TOU”) classes, and Outdoor Lighting and Light Emitting Diode (“LED”) outdoor lighting service classes shall be excluded from the RDM reconciliation. Settlement Attachment 3 5 provides the Company’s monthly target RPCs effective August April 1, 2022 and also provides preliminary monthly target RPCs effective September June 1, 2022 to reflect the 2022 Step Adjustmentand June 1, 2023. 4.2 The Company shall implement the RDM as follows: 4.2.1 First, the Company shall record monthly variances between actual and authorized RPC for each rate class. Rather than record and reconcile the variances on an annual basis, the Those monthly variances shall then be recorded and reconciled separately, for then totaled by class over the Peak (November twelve-month period April through April) and Off-Peak (May through October) periods March (the “Measurement PeriodsPeriod”). The monthly variances in the applicable Measurement Period shall then be totaled by class. The total variances by customer class group and carrying costs shall form the basis for the revenue decoupling adjustment (“RDA”) by group and the calculation of revenue decoupling RDM adjustment factors (“RDAF”) (surcharges or credits). A Customer Class Group comprises the rate schedules combined for purposes of calculating the RDA amounts. The four Customer Class Groups shall be: (1) Residential Heating (R-5 and R-10); (2) Residential Non-Heating (R-6); (3) C&I High Load Factor (G-50, G-51, G-52); and (4) C&I Low Load Factor (G-40, G-41, G-42). 4.2.2 Second, the Company shall annually file with the Commission on or before June 1 of each year the applicable RDAF 45 days in advance of November 1. The filing will provide the proposed RDAF for the Peak period, for effect November 1, and subsequent Off-Peak period, for effect May 1. The RDA for the Peak period shall reflect actual data for the entire six month period while the RDA for the Off-Peak period shall reflect actual data for the first three months of the period and estimated data for the remaining three monthsRDAF. The filing shall include the RDA by group, including prior period reconciliation and calculation of the RDAF. Pursuant to this Settlement Agreement, rather than reconcile the RDA on an allocated basis as initially proposed by Unitil, the Company shall reconcile the RDA using the four customer class groups defined in subpart 4.2.1 above. for three groups: (1) Schedule D, Domestic, 1 (2) Schedule G, Regular General Service G2, G2 kWh Meter, Uncontrolled Quick Recovery Water Heating, and Space Heating, and (3) Schedule G, Large General Service G1 The RDAF shall be calculated as a dollar per therm kWh charge or credit based on the RDA for each group divided by the projected therm kWh sales for each group over the prospective sixtwelve-month period November August through April and May through October July (“the RDM Adjustment Period”). The RDAF shall be charged or credited to customer bills during the RDM Adjustment Period. 4.2.3 4.3 Unitil shall implement an RDA cap of 4.25 three (3.0) percent of approved distribution revenues as established by this Settlement for each group over the relevant Measurement Period(s) for over- and under-under- recoveries. To Furthermore, to the extent that the RDA for a group, including prior period reconciliation exceeds 4.25 three (3.0) percent of distribution revenue, the amount over or under 4.25 three (3.0) percent shall be deferred, with carrying costs accrued monthly at the Prime Rate with said Prime Rate to be fixed on a quarterly basis and to be established as reported in The Wall Street Journal on the first business day of the month preceding the calendar quarter. If more than one interest rate is reported, the average of the reported rates shall be used. In the Company’s next distribution rate case, parties to that proceeding may propose specific treatment of any carried balances remaining at that time. 4.2.4 4.4 The Settling Parties agree that the RDM shall be implemented at the proposed effective date of new permanent rates on August April 1, 2022. At that time, Unitil shall cease accruing Lost Base Revenue (“LBR”) due to energy efficiency and displaced distribution revenue for net metering and shall transition to decoupling as described in the August 1 The Company’s RDAC tariff shall be revised to include the Domestic Delivery Service (Schedule D- TOU) upon approval. April 2, 2021 Testimony of Xxxxxxxxxxx Xxxxxxxx and Xxxxxx Xxxxxxxxxx at Xxxxx pages 000111128-113130 and explained in the response to Staff 1-9 provided as Settlement Attachment 6. 4.2.5 With respect to the treatment of special contract revenue, the Company shall not implement its proposal to reconcile test year special contract revenue with actual revenue. The Settling Parties agree that if any special contract customers become tariff customers, they will be excluded from the RDM.

REVENUE DECOUPLING MECHANISM. 4.1 The Settling Parties agree that Unitil shall implement a Revenue Decoupling Mechanism (“RDM”) substantially as proposed in the initial prefiled testimony of Unitil witness Xxxxxxx Xxxxx, subject to the adjustments specified in this Settlement Agreement. Specifically, the Settling Parties agree and recommend that the Commission approve a RDM using a Revenue Per Customer (“RPC”) model that shall reconcile monthly actual and authorized RPC by rate class. As proposed, the Company’s new electric vehicle time-of-use (“EV TOU”) classes, and Outdoor Lighting and Light Emitting Diode (“LED”) outdoor lighting service classes shall be excluded from the RDM reconciliation. Settlement Attachment 3 5 provides the Company’s monthly target RPCs effective August April 1, 2022 and also provides preliminary monthly target RPCs effective September June 1, 2022 to reflect the 2022 Step Adjustmentand June 1, 2023. 4.2 The Company shall implement the RDM as follows: 4.2.1 First, the Company shall record monthly variances between actual and authorized RPC for each rate class. Rather than record and reconcile the variances on an annual basis, the Those monthly variances shall then be recorded and reconciled separately, for then totaled by class over the Peak (November twelve-month period April through April) and Off-Peak (May through October) periods March (the “Measurement PeriodsPeriod”). The monthly variances in the applicable Measurement Period shall then be totaled by class. The total variances by customer class group and carrying costs shall form the basis for the revenue decoupling adjustment (“RDA”) by group and the calculation of revenue decoupling RDM adjustment factors (“RDAF”) (surcharges or credits). A Customer Class Group comprises the rate schedules combined for purposes of calculating the RDA amounts. The four Customer Class Groups shall be: (1) Residential Heating (R-5 and R-10); (2) Residential Non-Heating (R-6); (3) C&I High Load Factor (G-50, G-51, G-52); and (4) C&I Low Load Factor (G-40, G-41, G-42). 4.2.2 2.2 Second, the Company shall annually file with the Commission on or before June 1 of each year the applicable RDAF 45 days in advance of November 1. The filing will provide the proposed RDAF for the Peak period, for effect November 1, and subsequent Off-Peak period, for effect May 1. The RDA for the Peak period shall reflect actual data for the entire six month period while the RDA for the Off-Peak period shall reflect actual data for the first three months of the period and estimated data for the remaining three monthsRDAF. The filing shall include the RDA by group, including prior period reconciliation and calculation of the RDAF. Pursuant to this Settlement Agreement, rather than reconcile the RDA on an allocated basis as initially proposed by Unitil, the Company shall reconcile the RDA using the four customer class groups defined in subpart 4.2.1 above. for three groups: (1) Schedule D, Domestic, 1 (2) Schedule G, Regular General Service G2, G2 kWh Meter, Uncontrolled Quick Recovery Water Heating, and Space Heating, and (3) Schedule G, Large General Service G1 The RDAF shall be calculated as a dollar per therm kWh charge or credit based on the RDA for each group divided by the projected therm kWh sales for each group over the prospective sixtwelve-month period November August through April and May through October July (“the RDM Adjustment Period”). The RDAF shall be charged or credited to customer bills during the RDM Adjustment Period. 4.2.3 4.3 Unitil shall implement an RDA cap of 4.25 three (3.0) percent of approved distribution revenues as established by this Settlement for each group over the relevant Measurement Period(s) for over- and under-under- recoveries. To Furthermore, to the extent that the RDA for a group, including prior period reconciliation exceeds 4.25 three (3.0) percent of distribution revenue, the amount over or under 4.25 three (3.0) percent shall be deferred, with carrying costs accrued monthly at the Prime Rate with said Prime Rate to be fixed on a quarterly basis and to be established as reported in The Wall Street Journal on the first business day of the month preceding the calendar quarter. If more than one interest rate is reported, the average of the reported rates shall be used. In the Company’s next distribution rate case, parties to that proceeding may propose specific treatment of any carried balances remaining at that time. 4.2.4 4.4 The Settling Parties agree that the RDM shall be implemented at the proposed effective date of new permanent rates on August April 1, 2022. At that time, Unitil shall cease accruing Lost Base Revenue (“LBR”) due to energy efficiency and displaced distribution revenue for net metering and shall transition to decoupling as described in the August 1 The Company’s RDAC tariff shall be revised to include the Domestic Delivery Service (Schedule D- TOU) upon approval. April 2, 2021 Testimony of Xxxxxxxxxxx Xxxxxxxx and Xxxxxx Xxxxxxxxxx at Xxxxx pages 000111128-113130 and explained in the response to Staff 1-9 provided as Settlement Attachment 6. 4.2.5 With respect to the treatment of special contract revenue, the Company shall not implement its proposal to reconcile test year special contract revenue with actual revenue. The Settling Parties agree that if any special contract customers become tariff customers, they will be excluded from the RDM.

REVENUE DECOUPLING MECHANISM. 4.1 The Settling Parties agree that Unitil shall implement a Revenue Decoupling Mechanism (“RDM”) substantially as proposed in the initial prefiled testimony of Unitil witness Xxxxxxx Xxxxx, subject to the adjustments specified in this Settlement Agreement. Specifically, the Settling Parties agree and recommend that the Commission approve a RDM using a Revenue Per Customer (“RPC”) model that shall reconcile monthly actual and authorized RPC by rate class. As proposed, the Company’s new electric vehicle time-of-use (“EV TOU”) classes, and Outdoor Lighting and Light Emitting Diode (“LED”) outdoor lighting service classes shall be excluded from the RDM reconciliation. Settlement Attachment 3 5 provides the Company’s monthly target RPCs effective August April 1, 2022 and also provides preliminary monthly target RPCs effective September June 1, 2022 to reflect the 2022 Step Adjustmentand June 1, 2023. 4.2 The Company shall implement the RDM as follows: 4.2.1 First, the Company shall record monthly variances between actual and authorized RPC for each rate class. Rather than record and reconcile the variances on an annual basis, the Those monthly variances shall then be recorded and reconciled separately, for then totaled by class over the Peak (November twelve-month period April through April) and Off-Peak (May through October) periods March (the “Measurement PeriodsPeriod”). The monthly variances in the applicable Measurement Period shall then be totaled by class. The total variances by customer class group and carrying costs shall form the basis for the revenue decoupling adjustment (“RDA”) by group and the calculation of revenue decoupling RDM adjustment factors (“RDAF”) (surcharges or credits). A Customer Class Group comprises the rate schedules combined for purposes of calculating the RDA amounts. The four Customer Class Groups shall be: (1) Residential Heating (R-5 and R-10); (2) Residential Non-Heating (R-6); (3) C&I High Load Factor (G-50, G-51, G-52); and (4) C&I Low Load Factor (G-40, G-41, G-42). 4.2.2 Second, the Company shall annually file with the Commission on or before June 1 of each year the applicable RDAF 45 days in advance of November 1. The filing will provide the proposed RDAF for the Peak period, for effect November 1, and subsequent Off-Peak period, for effect May 1. The RDA for the Peak period shall reflect actual data for the entire six month period while the RDA for the Off-Peak period shall reflect actual data for the first three months of the period and estimated data for the remaining three monthsRDAF. The filing shall include the RDA by group, including prior period reconciliation and calculation of the RDAF. Pursuant to this Settlement Agreement, rather than reconcile the RDA on an allocated basis as initially proposed by Unitil, the Company shall reconcile the RDA using the four customer class groups defined in subpart 4.2.1 above. for three groups: (1) Schedule D, Domestic, 1 (2) Schedule G, Regular General Service G2, G2 kWh Meter, Uncontrolled Quick Recovery Water Heating, and Space Heating, and (3) Schedule G, Large General Service G1 The RDAF shall be calculated as a dollar per therm kWh charge or credit based on the RDA for each group divided by the projected therm kWh sales for each group over the prospective sixtwelve-month period November August through April and May through October July (“the RDM Adjustment Period”). The RDAF shall be charged or credited to customer bills during the RDM Adjustment Period. 4.2.3 4.3 Unitil shall implement an RDA cap of 4.25 three (3.0) percent of approved distribution revenues as established by this Settlement for each group over the relevant Measurement Period(s) for over- and under-recoveries. To Furthermore, to the extent that the RDA for a group, including prior period reconciliation exceeds 4.25 three (3.0) percent of distribution revenue, the amount over or under 4.25 three (3.0) percent shall be deferred, with carrying costs accrued monthly at the Prime Rate with said Prime Rate to be fixed on a quarterly basis and to be established as reported in The Wall Street Journal on the first business day of the month preceding the calendar quarter. If more than one interest rate is reported, the average of the reported rates shall be used. In the Company’s next distribution rate case, parties to that proceeding may propose specific treatment of any carried balances remaining at that time. 4.2.4 4.4 The Settling Parties agree that the RDM shall be implemented at the proposed effective date of new permanent rates on August April 1, 2022. At that time, Unitil shall cease accruing Lost Base Revenue (“LBR”) due to energy efficiency and displaced distribution revenue for net metering and shall transition to decoupling as described in the August April 2, 2021 Testimony of Xxxxxxxxxxx Xxxxxxxx and Xxxxxx Xxxxxxxxxx at Xxxxx pages 000111128-113130 and explained in the response to Staff 1-9 provided as Settlement Attachment 6. 1 The Company’s RDAC tariff shall be revised to include the Domestic Delivery Service (Schedule D-TOU) upon approval. 4.2.5 With respect to 4.5 RiverWoods: As described in the treatment of special contract revenueCompany’s initial testimony, the Company shall not implement RiverWoods continuing care retirement community is, consistent with a waiver granted by the Commission in Docket No. DE 19-114, implementing master metering at its proposal facility and the conversion is expected to reconcile test year special contract revenue replace approximately 200 residential meters with actual revenue3 or 4 Rate G2 meters. The Settling Parties acknowledge that the conversion is likely to affect the Company’s decoupling proposal. Accordingly, the Settling Parties agree that if any special contract the Company shall adjust its actual customers become tariff customers, they will be excluded from counts to account for the RDMchange in RiverWoods’ metering as part of its decoupling calculation as follows: The Company shall add back the number of residential customers lost and remove the number of G2 customers added as the conversions occur.