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SUMMARY OF TESTIMONY <br /> <br />Witness: Alan D. Anderson <br /> <br />Background: Mr. Anderson has a B.A. from Rice University and a Ph.D. in <br /> Economic History from Johns Hopkins University; he has testified <br /> as and has been qualified an expert in many areas of the natural <br /> gas industry and is currently the President of the consulting firm <br /> Energy Planning, Inc. <br /> <br />Purpose of Testimony: <br /> <br /> (1) Explain the current gas cost recovery mechanism; (2) offer a <br /> proposal for a new gas cost recovery factor; and (3) offer a <br /> proposal for a new reconciliation and review procedure to <br /> accompany the new gas cost recovery mechanism <br /> <br />Key Points/issues: <br /> <br /> 1. The present gas cost recovery mechanism does not take <br /> into account all gas costs. <br /> 2. Lost and unaccounted for gas will be included in the gas <br /> cost recovery mechanism, not base rates. <br /> 3. Changes in the carrying cost of working gas in storage will <br /> be included in gas costs going forward. <br /> 4. Gas costs will be the same for all classes of sales <br /> customers. <br /> 5. New reconciliation and review procedures will replace the <br /> twelve-month reconciliation and three-year prudence <br /> review. <br /> <br /> Summary/Recommendations: <br /> <br /> Adopt the new gas cost recovery factor in all respects and adopt <br /> new reconciliation and review procedures to supplant the lengthy <br /> and expensive procedures presently in place. <br /> <br /> Anderson - Summary of Testimony Page 1 of 1 <br /> <br /> <br />