Request for Proposal No. U07-FA-2
REQUEST FOR PROPOSAL NO. U07-FA-2
FINANCIAL AUDIT OF THE EAST OHIO GAS COMPANY D/B/A DOMINION EAST OHIO
On August 30, 2007, The East Ohio Gas Company d/b/a Dominion East Ohio (Dominion, Applicant, or Company) filed an application for an increase in its gas distribution rates in Case Nos. 07-0829-GA-AIR, 07-830-GA-ALT and 07?831?GA-AAM. Dominion is a natural gas company as defined in Section 4903.03(A)(6), Revised Code, and a public utility as defined in Section 4905.02, Revised Code. As such, Dominion is subject to the jurisdiction of the Public Utilities Commission (PUCO or Commission). According to Section 4909.19, Revised Code, after a company has requested an increase in rates, the Commission shall cause an investigation to be made of the facts and exhibits set forth in the Company’s application. In order to complete this investigation in a timely manner, the Commission finds that portions of the investigation should be conducted by a qualified independent auditing firm.
The Company has requested a test year from January 1, 2007 though December 31, 2007 for examination. The Commission is seeking proposals from independent firms to verify and attest to the Company’s financial information and to file a report with the Commission. The statutory framework that the auditor selected must follow in verifying the Company’s filing is set forth in Sections 4909.15 and 4909.18 Revised Code, and the Standard Filing Requirements contained in Appendix A of Rule 4901-7-01, Ohio Administrative Code (O.A.C.). The auditor selected will be required to conduct such audit and will be responsible for submitting a report which is based upon those statutory requirements.
In accordance with provisions of Section 4909.19, Revised Code, the Commission is seeking proposals to audit and attest to the accuracy of the financial information provided by the Company in the Application. The investigation shall verify the financial information provided in the Standard Filing Requirements Section B (Rate Base), Section C (Operating Income), Section D (Rate of Return), and Section E (Rates and Tariffs).
The auditor selected shall verify and attest to the accuracy of financial data contained in the rate filing of the Applicant. The audit should include, but not be limited to, verifying actual data by tracing financial information to the general ledger of the Applicant; documenting budgeted data by tracing financial information to the corporate approved budget; verifying plant additions, retirements, and transfers; verifying the Applicant’s revenues (both projected and actual); and reviewing all adjustments reflected in the filing. In addition, the auditor must verify the existence of the used and useful nature of the plant samples through physical inspections. The auditor is not required to make a recommended revenue requirement to the Commission. The Staff will utilize the auditor’s report in developing and recommending a revenue requirement in its Staff Report.
Audit proposals are due by October 3, 2007. By Commission Order, the audit will be awarded on October 10, 2007.
Finding & Order (September 12, 2007) (pdf version)