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Corning Natural Gas Joint Proposal Would "Accommodate" Purchase of Receivables

January 27, 2012

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Copyright 2010-12 Energy Choice Matters

A joint proposal in Corning Natural Gas Corporation's rate case would open the door for the possible introduction of Purchase of Receivables (11-G-0280).

The joint proposal was signed by Corning Natural Gas, New York PSC Staff, Multiple Intervenors, and other parties.

The joint proposal provides that a new customer accounting system required under the settlement shall, "be capable of accommodating a Purchase of Receivables ('POR') program."

The joint proposal would not, itself, introduce a POR program at Corning at this time.

"The Signatory Parties further agree that the bills will be in readable and understandable format to reflect, among other billing concerns, the MFC [Merchant Function Charge] and POR consistent with the Commission's regulations."

The joint proposal also contains several provisions relating to transportation balancing.

The signatory parties agree that Corning will adopt and maintain in its tariff a "no harm no foul" rule for the daily and also for the end of month imbalances for daily balanced transportation customers.

On a daily basis, pursuant to the "no harm no foul" rule, if the pool of daily balanced customers is within the daily balancing tolerance, then there are no cash outs. In the case where the pool is outside of the daily tolerance, only those accounts whose imbalances are in the same direction as the total pool imbalance will be cashed out to the tolerance band using an agreed upon penalty structure, while all other imbalances are rolled forward to the end of the month. The daily cash-out activity will be netted for the month and be billed to the customer along with the supporting detail including, but not limited to, the daily and monthly pool balances.

Additionally, at the end of the month a "no harm no foul" rule will also be applied to the end of month imbalances, after imbalance trading, in a similar fashion as it is done on a daily basis, except that all imbalances will be cashed out to the zero level in this event.

Furthermore, in order to keep imbalances at a minimum and in recognition that only net imbalances on a system-wide basis impose costs to Corning, daily balanced transportation customers will be allowed to trade imbalances with each other and monthly balanced customers. When imbalance trading occurs, both trading parties must improve their balancing position and those positions need to move them closer to a zero imbalance position. Imbalance trades that do not improve the positions of both trading parties will be rejected.

For daily balanced customers, for the period May 1, 2012 through October 31, 2012 the daily balancing dead band will be +/- 10% with a daily balancing charge of $0.02204 per mcf. The balancing dead band for May 1, 2012 through October 31, 2012 1 monthly cash-outs will be 10%. For the period November 1, 2012 through April 30, 2013, the daily balancing dead band will be +/- 5% with a daily balancing charge of $0.00672 per mcf. The balancing dead band for November 1, 2012 through April 30, 2013 monthly cash-outs will be 5%.

If a monthly transportation customer's daily delivery does not match its Average Daily Quantity (ADQ) within a dead band of +/- 2%, imbalance penalties will be imposed for the amount above or below the 2% threshold.

The dead band for Corning's monthly balanced customers and penalties for such customers' month-end imbalances shall be eliminated. Starting May 1, 2012 the monthly swing charge will be $0.06193 per mcf for SC 6 high load factor customers, and $0.08763 per mcf for SC 14 low load factor customers.

Corning will establish a collaborative concerning improving communication of gas delivery information to transportation customers. Additionally, Corning will attempt to make available hourly gas delivery data to daily balanced transportation customers via a secure website, and will be required to take daily balanced customer meter readings no less than three times per day, at 10:00 AM EST, 1:00 PM EST, and 4:00 PM EST, and shall post these readings within one hour of these times.

Corning's tariff will reflect that where a daily balanced transportation customer and/or its designated representative is unable to obtain timely and accurate gas delivery data from Corning, no penalties or charges will be imposed on such customer for any imbalance incurred as a result. "For example, if there is a Company failure of telemetering equipment, the Company will waive the penalty imbalance charge for the period," the joint proposal states.

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