WGL Files Revised Tariff to Place Daily Required Volume Obligation on D.C. Competitive Gas Suppliers Email This Story February 22, 2011
Washington Gas Light has filed revised District of Columbia tariff changes to Rate Schedule No. 3 (Interruptible Sales Service), Rate Schedule No. 3A (Interruptible Delivery Service) and Rate Schedule No. 6 (Small Commercial Aggregation Pilot), which WGL said are designed to ensure that competitive service providers (CSPs) pay their "fair share" of interruptible balancing charges.
WGL had previously sought to modify the D.C. interruptible tariffs in a similar manner, but the D.C. PSC rejected the changes as unsupported (see 4/29). The revised tariffs answer the PSC's concerns, WGL said.
Among other things, WGL proposed to shift the responsibility for balancing Interruptible Delivery Service Customer deliveries and consumption to the competitive supplier designated to manage the deliveries. Currently, WGL balances the deliveries and consumption of such Interruptible Delivery Customers using a cumulative bank with cash out triggers and balancing service curtailments.
WGL said that the changes are needed to mitigate gas cost subsidization that can occur when competitive suppliers under-deliver on high-cost days, and over-deliver on low-cost days.
To start, WGL would raise the charge for balancing services provided to interruptible customers from $0.002 per therm to $0.0089 per therm, the latter of which WGL said reflects the current cost of the service.
"Given that the current balancing program does not specifically require Customers, nor their CSPs, to attempt to match their deliveries with their expected consumption, they occasionally deliver much more, or much less, gas than they expect to consume.
"This may result in higher costs for ratepayers than necessary and unneeded challenges for the Company to meet its reliability responsibility," WGL said.
WGL proposed implementing a Daily Required Volume (DRV) for interruptible customers, which would be calculated by 1) multiplying the competitive supplier's weather gas factor, as estimated by WGL, times the forecasted Heating Degrees Days; 2) adding the base gas, and 3) adjusting the results to produce, in the aggregate of competitive suppliers and WGL, WGL's total estimated sendout for that day. The competitive supplier's base and weather use factor will be based on these factors for each of their customers, as estimated by WGL. The result of this calculation will be adjusted for lost and unaccounted for gas, WGL company use gas, and dry to wet conversion.
WGL would only allow a 15% threshold for any over and under-deliveries of gas from the DRV. Competitive suppliers using Aggregate Balancing Service would be able to aggregate the DRVs of all of their customers and their deliveries, and the imbalance, if any, would be calculated using the cumulative imbalances between total deliveries and total DRVs for all of the supplier's customers.
WGL will post five days of DRV calculations for each meter on the WGL Management System website. The DRVs for the coming gas day will be "locked" and will not change, while DRVs for the subsequent four days will be updated on a daily basis.
WGL's revised proposal would still eliminate, as originally proposed, Interruptible Sales Service, as WGL said, "[f]or these customers, it would be advantageous to switch to Rate Schedule 3A because of potentially lower prices that are offered by CSPs." There are currently only 15 customers on Interruptible Sales Service.
A competitive supplier could also select Self-Balancing service and self-determine the DRV, and WGL would then compare confirmed deliveries to actual usage of the customer.
Suppliers not meeting the daily tolerance levels would be subject to a penalty of $10 per dekatherm under normal operating conditions and $25 per dekatherm during operational flow orders. Additional charges for incremental gas or pipeline penalties could also apply.
The revised tariff would also still permit WGL to interrupt Interruptible Delivery Service customers during non-emergencies, with WGL further explaining the non-emergency operating conditions which may require such interruption. In answering a PSC concern, WGL said that, if the competitive supplier delivers gas to the city-gate, but the customer is interrupted at WGL's discretion due to non-emergency conditions, the customer would not be subject to a penalty for non-compliance with the balancing requirement.