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New York ESCOs, ConEd Reach Settlement to Mitigate Underforecasting, Extreme Marketer Cashouts
Consolidated Edison and several ESCOs have filed a stipulation at the New York PSC addressing ESCO complaints concerning alleged underforecasting by ConEd, which led to significantly higher imbalances and cashouts by ESCOs this winter.
Click here for background on proceeding
The stipulations explains that the behavior perceived by ESCOs as underforecasting by ConEd resulted from its longstanding practice, which is not documented in the GTOP, to identify to an ESCO accounts for which there is an absence of historical data by using a zero volume for such accounts in the Daily Quantity provided to ESCOs.
The stipulation noted that the combination of colder-than-normal weather in January, February and March, coupled with an increasing percentage of firm transportation customers with no historical billing data (e.g., higher numbers of new accounts), resulted in differentials between marketer deliveries and actual usage by firm transportation customers that fell significantly outside the range of historical differentials.
Specifically, the aggregate cashout obligations of marketers with net deficiency imbalances for January, February and March were approximately $38 million. ConEd's incremental cost of procuring gas for such imbalances was approximately $23 million.
The signatory parties, "concluded that the differential between the cashout obligations and the Company's Monthly Cost to Supply for January, February and March constituted an unintended material benefit to full service customers and unintended material harm to firm transportation customers and Marketers that should be addressed by the Commission. The Signatory Parties also seek to avoid having the cashout mechanism inadvertently incenting customers to elect full service from the Company in lieu of service from a Marketer."
In light of the circumstances, the stipulating parties propose to reduce in the aggregate the cashout obligations of marketers with net deficiency imbalances for January, February and/or March that would be credited to full service customers by $13.8 million, with the reduction spread unevenly over the three months (to reflect that January was the most severe month for imbalances).
The cashout obligations for each individual marketer will be reduced based on the marketer's pro rata share of the aggregate deficiency imbalances for that month
The stipulating parties also agree to explore with marketers and Staff whether changes should be made to the ConEd's current balancing service and associated processes applicable to deliveries for firm transportation customers, for prospective application. In the interim, the signatory parties agreed ConEd will undertake efforts to provide additional information and training to gas marketers with respect to the processes currently in place and to consider modifications to the GTOP as a vehicle for communicating more details with respect to these processes.
Case 14-G-0138
ADVERTISEMENT Copyright 2010-
July 7, 2014
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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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