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Final New York National Fuel Gas Distribution Order Addresses Whether Higher Imbalance Penalties Should Be Extended To All Transportation Customers

Also Addresses Other ESCO Issues

April 21, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The New York PSC issued a final order in National Fuel Gas Distribution's rate case, which, among other things, addresses higher imbalance penalties and whether they should apply to all transportation customers, or only power generators

While NFGD had initially proposed higher imbalance deficiency charges for power generators, as a result of PSC Staff testimony, the utility revised its proposal to include the penalties against all transportation customers such that under-deliveries during non-Operational Flow Order events would increase in penalty from $10 to $25 per Mcf. During Operational Flow Order events, the penalty would increase from $25 to $50 per Mcf.

Multiple Intervenors opposed the application of this proposal to all transportation customers.

PSC Staff argued that daily verification of actual deliveries of monthly balanced transportation customers or their ESCO is just as important as larger volume daily balanced customer verification, and that there is little difference between power generation and other large volume daily balance customers.

Multiple Intervenors pointed to NFGD’s initial testimony wherein the company explained that problems have occurred where electric generation facilities have continued to consume gas in excess of what they were providing to the utility for transportation threatening system reliability. No concerns whatsoever were identified by the company or by Staff as to non-power generators, MI said, with Staff's only objection being discrimination concerns to similarly situated customers

The PSC, agreeing with a recommended decision, found that, "there is ample evidence in the record to determine that power generators are not so similarly situated to other SC-13 large volume transportation customers that disparate treatment is unlawful discrimination."

"In fact, the problems identified in the record that the parties are seeking to address are specifically tied to those power generating customers. What is lacking in the record is evidence that other large volume transportation customers might create similar concerns or contribute to any existing problem," the PSC said, in rejecting the higher imbalance charges for transportation customers other than generators

The PSC also affirmed the recommended decision's determination that significant changes to capacity release or off-system sales/capacity release credits -- concerns raised by EnergyMark -- are not warranted

Among other things, EnergyMark suggested that NFGD should adopt volumetric capacity release.

However, NFGD had indicated that it is willing to release capacity to a party for the next day if there is adequate time for the company to post the capacity offer on the pipeline Electronic Bulletin Boards (EBB) for the prearranged bidder and allow for a bidding period for all interested parties. In the alternative, the NFGD proposed that EnergyMark post solicitations specifying their preferred capacity terms on the pipelines’ EBB. The ALJ had found such suggestions reasonable and said NFGD should move forward with them though finding that Commission action was not needed

Case 16-G-0257

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