Chesapeake announces FERC approval of ESNG Settlement Agreement
United
States
Securities
and Exchange Commission
Washington,
D.C. 20549
_______________________________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): August 1, 2006
Chesapeake
Utilities Corporation
(Exact
name of registrant as specified in its charter)
|
Delaware
|
001-11590
|
51-0064146
|
(State
or other jurisdiction of
|
(Commission
|
|
incorporation
or organization)
|
File
Number)
|
|
909
Silver Lake Boulevard, Dover, Delaware 19904
(Address
of principal executive offices, including Zip Code)
(302)
734-6799
(Registrant's
Telephone Number, including Area Code)
_______________________________________________________________
(Former
name, former address and former fiscal year, if changed since last
report.)
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Item
8.01. Other Events.
On
August
1, 2006, the Federal Energy Regulatory Commission (“FERC”) approved Eastern
Shore Natural Gas Company’s (“ESNG”) Petition for Approval of Settlement
Agreement, enabling ESNG to collect certain pre-certification costs from named
parties if the proposed construction project to connect ESNG with Dominion
Resources’ (“Dominion”) facilities near Cove Point, Maryland is
unsuccessful.
At
the
end of May 2006, ESNG announced that it had entered into Precedent Agreements
with Delmarva Power & Light (“DPL”) and Chesapeake Utilities Corporation
(“Chesapeake”), (each a “Customer” and together, “Customers”). Pursuant to the
Precedent Agreements, the Customers subscribed to a total of 60,000 dekatherms
per day of firm capacity upon ESNG’s construction of pipeline facilities that
would connect with Dominion’s facilities near Cove Point, Maryland, cross under
the Chesapeake Bay and interconnect with ESNG’s existing pipeline facilities in
Dorchester and Caroline Counties in Maryland and extending into Sussex County,
Delaware.
In
executing the Precedent Agreements, each of the Customers agreed to pay certain
pre-certification costs incurred by ESNG, subject to FERC approval. FERC’s
approval of the Settlement Agreement on August 1, 2006, allows ESNG to recover
costs, including engineering, communication, government relations, economic
studies, environmental, regulatory and legal costs, through a surcharge to
the
Customers.
Under
the
Settlement Agreement, each Customer would be allocated a proportionate share
of
the pre-certification costs, not to exceed $3 million, based on each Customer’s
Maximum Daily Transportation Quantity to the aggregate Maximum Daily
Transportation Quantity. For pre-certification costs in excess of $3 million,
each Customer plus ESNG will be allocated an equal portion of the costs.
Exclusive of interest, each Customer’s pre-certification costs would be capped
at $2 million.
For
additional information on the FERC approved Settlement Agreement, reference
is
made to FERC Docket No. RP06-404-000, filed herewith as Exhibit
99.1.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibit 99.1 — FERC Docket No. RP06-404-000.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this Report to be signed on its behalf by the undersigned hereunto
duly authorized.
Chesapeake
Utilities Corporation
/s/
Michael
P. McMasters
—————————————
Michael
P. McMasters
Senior
Vice President and Chief Financial Officer
Date:
August 7, 2006