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Pa. PUC Approves Settlement Under Which Utility Will Double Bypassable Charges Related To Supply Procurement, Eliminate Switching Fee

August 31, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The Pennsylvania PUC adopted, without substantive modification to retail market-related provisions, a settlement in UGI Utilities - Gas Division's 1307(f) proceeding which will more than double the bypassable gas procurement charge, eliminate the current switching fee, and make other enhancements related to retail choice

Under the approved settlement, UGI will increase the bypassable gas procurement charge (GPC), which is part of the Price to Compare, to 9.0¢ per Mcf. The current GPC is 4¢ per Mcf, but UGI had originally sought in the case to reduce the GPC to 1.46¢ per Mcf. Retail suppliers had proposed that the GPC be set at 17¢ per Mcf

Also under the settlement, UGI will set its Rate N Purchase of Receivables (POR) discount at 0.50%, and its Rate N Merchant Function Charge (MFC) to 0.36% (identical to the uncollectible component of Rate N POR). While this presents no change to the Rate N POR discount, UGI had originally sought to increase the POR discount to 0.61%.

UGI will also eliminate the current $10 switching fee under the settlement

Regarding supplier security requirements, UGI agrees to add back into its tariff the call option method of providing security found in its existing tariff. In addition, UGI agrees to modify its security requirements as follows: (i) the financial security to be provided for each residential Choice customer served by a Choice supplier shall be $60 per customer; and (ii) the financial security for each non-residential Choice customer served by a Choice supplier shall be $94.24/Dth times the Design Day Requirement of the customer; provided, however, UGI and any other interested party reserve their rights to file to change those security levels after the effective date of new rates established in the 1307(f) proceeding if the security levels prove to be unreasonable.

The settlement also reduces certain balancing charges, and also institute monthly balancing for certain rate classes to make operations simpler for suppliers

UGI will reduce the $50 per Mcf charge to $25 per Mcf for imbalances that occur on OFO dates.

For transactions larger than 750 Mcf, UGI Gas will waive the $125 fee per imbalance trade that is imposed when one pool is out of balance and NGSs arrange a trade with another NGS.

For transactions larger than 750 Mcf, UGI will waive pool-to-pool transfer fees that are imposed when an NGS is transferring between its own customer pools.

By November 1, 2016, the settlement provides that UGI shall transfer all XD, LFD and IL customers to calendar month billing and balancing whereby a Natural Gas Supplier (NGS) may have one or more pools in the calendar month bill cycle based on "like services" of its customer contracts. For these pools, there will be four possible "like services" combinations: (i) No Notice Service; (ii) No Notice Service with Monthly Balancing Service; (iii) Basic Balancing; and (iv) Basic Balancing with Monthly Balancing Service.

By no later than June 1, 2017, UGI Gas is to make a filing with the PUC that proposes a requirement for all transportation customers under Rates DS and IS to have installed operable AMR/Metretek equipment by a date certain. As part of that proposal, UGI Gas is to include: (i) an estimate of the cost of such installed equipment; (ii) a proposed means of recovering the costs of such installations; and (iii) a provision to transfer all Rate DS and IS customers to calendar month billing and balancing pools when all such customers have installed operable AMR/Metretek equipment in a manner consistent with the transfer of Rate XD, LFD, and IL customers described above. All parties reserve the right to participate in and challenge the filing contemplated by this provision.

Also under the settlement, UGI commits to: (i) informing all NGSs of the availability of any special discounted rates that are offered to its affiliated NGSs; and (ii) revising its training materials to make it clear that UGI Gas employees may not represent that an NGS affiliate or its service is superior to other NGSs.

Docket R-2015-2518438

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