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): October 31, 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.)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[
]
Written communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR
240.14a-12)
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
[
]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
On
October 31, 2006, Eastern Shore Natural Gas Company (“ESNG”), the natural gas
transmission subsidiary of Chesapeake Utilities Corporation, filed for
an
increase in transportation rates with the Federal Energy Regulatory Commission
(“FERC”).
ESNG’s
rate filing proposes an annual revenue increase beginning November 1,
2006 of
approximately $5.6 million over its current tariff rates, which have
been in
effect since December 1, 2002. This filing was made to comply with the
settlement agreement in ESNG’s last rate case, which was approved by the FERC on
October 10, 2002.
The
underlying assumptions supporting this proposed revenue increase include
a
projected rate base of $81.8 million as of March 31, 2007 and an overall
rate of
return of 11.72 percent. Inherent in this overall rate of return is an
estimated
cost of debt of 6.73 percent and a return on equity (“ROE”) of 14.875 percent.
For each 1 percent decline in the approved ROE versus the requested ROE
of
14.875 percent, the rate increase request would be reduced accordingly
by
approximately $850,000. ESNG’s proposed rates are based on an overall annual
cost of service of approximately $26 million and reflect the continuation
of the
straight fixed variable methodology for cost classification and rate
design.
On
November 2, 2006, the FERC posted its Notice of Tariff Filing and denoted
ESNG’s
filing as Docket No. RP-07-38-000. As part of this notice, the FERC also
established an intervention and protest period within which interested
parties
may intervene and/or protest ESNG’s filing in accordance with the FERC’s Rules
of Practice and Procedure. The FERC may exercise its authority to suspend
the
effective date of the proposed increase for up to five months. At the
end of the
suspension period, ESNG would place the suspended rates into effect subject
to
refund.
At
this
time we cannot predict the final outcome of the proceeding, including
the amount
of the rate adjustment likely to be approved.
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: November
6, 2006