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New York Utilities Agree To "Circuit Breaker" Approach To Recalculating ESCO Capacity Releases, Instead Of Adjustments Every Month

LDCs Will Allow ESCOs To Deliver Alternative Gas Supplies To City Gate Versus Allocated Storage

June 6, 2017

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

The Brooklyn Union Gas Company d/b/a National Grid NY (KEDNY) and KeySpan Gas East Corporation d/b/a National Grid (KEDLI) have proposed to make certain changes to capacity release as a result of an ESCO collaborative.

The proposed changes require PSC approval.

The KeySpan LDCs explained that ESCOs experience changes in their monthly customer pools. Currently when an ESCO’s pool increases, the LDCs adjust the allocation of long haul capacity on Transcontinental Gas Pipe Line LLC (Transco) to serve the ESCO’s increased customer demand. When an ESCO’s pool decreases, the LDCs reduce capacity released to the ESCO through a pipeline reduction hierarchy that first reduces the amount of released Transco long-haul capacity.

Beginning November 1, 2017, the LDCs agree to implement a "circuit breaker" approach under which an individual ESCO will have its monthly/semi-annual releases recalculated to the extent that its requirements for Tier One capacity change by plus or minus 1,000 Dekatherms (Dth) from the previous month. Monthly changes in Tier One capacity requirements of less than 1,000 Dth per month would continue to be made in the same manner as they are today

The KeySpan LDCs said, "The Companies submit that adoption of this 'circuit breaker' approach appropriately balances the monthly burden imposed on the Companies as a result of having to recalculate release quantities on multiple pipeline paths against the ESCOs’ desire to be able to serve increased customer loads using more diverse capacity paths. The Companies believe that the 'circuit breaker' approach will only require a recalculation of the release quantities approximately twelve times per year. In contrast, if the Companies were required to adjust all capacity releases every month to reflect all changes in ESCO pools, the Companies would need to effectuate hundreds of additional releases per month. The Companies plan to monitor the impact of the 'circuit breaker' approach and either the Companies or ESCOs may propose modifications at future Annual Marketer Meetings."

The KeySpan LDCs have also agreed, effective November 1, 2017, to make two additional upstream transportation paths available to ESCOs. These paths are:

(i) Tennessee Gas Pipeline LLC (TGP), and

(ii) TETCO Leidy

The TGP path consists of upstream capacity located on its 300 line in TGP rate zones 4 and 5. Access to this transportation path will permit ESCOs to receive supplies in the northern Pennsylvania production zone. While this change will provide ESCOs an additional upstream transportation path, deliveries from this path to the Companies must pass through TGP’s White Plains, New York delivery point, which is operated by Consolidated Edison Company of New York, Inc. (Con Edison). As a consequence, ESCOs accepting assignments of this transportation path will be responsible for monitoring and complying with any constraints or operational flow orders identified by Con Edison and/or TGP.

With respect to the TETCO Leidy Path, the KeySpan LDCs have agreed to provide ESCOs access to their proportionate share of 70,831 Dth per day of TETCO Leidy transportation capacity that is not associated with storage. Access to this transportation path will permit ESCOs to obtain a greater percentage of their supplies in Pennsylvania

Finally, the Companies have also agreed to provide ESCOs access through the release, as of May 1, 2018, of a proportionate share of two TGP Rate Schedule-FS-MA storage contracts and two associated TGP Rate Schedule FT-A contracts that will permit the transportation of storage gas from the FS-MA storage facilities to TGP’s White Plains delivery point. These releases will provide ESCOs access to storage in TGP’s market area.

The KeySpan LDCs, "believe that these capacity modifications have resolved all present upstream capacity assignment issues raised in," recent rate case proceedings which prompted the collaborative

The KeySpan LDCs also agreed to changes with respect to deliveries to their city gates

The KeySpan LDCs provide retail access storage to ESCOs. Under certain market conditions, it may be more economical for ESCOs to arrange for deliveries of supplies of gas other than the ESCOs’ retail access storage quantities to the KeySpan LDCs’ city gates for delivery to the ESCOs’ customers. ESCOs have therefore requested the ability to arrange for alternative deliveries of gas in lieu of retail access storage volumes to the KeySpan LDCs’ city gates on days when it is economically advantageous for ESCOs to make such alternative deliveries. National Grid has agreed to permit ESCOs to deliver such alternative supplies to the KeySpan LDCs’ city gates with Transco located at Long Beach and the Narrows subject to the condition that the KeySpan LDCs may restrict or prohibit alternative city gate nominations where the (i) temperature falls below 23º F or the KeySpan LDCs would otherwise be required to use peaking gas to serve firm customers, or (ii) other operating conditions require the KeySpan LDCs to curtail alternative deliveries.

In addition, to ensure that deliveries by ESCOs that displace their retail storage volumes do not impose increased costs on other customers, the KeySpan LDCs propose to impose a "must turn" penalty on ESCOs that do not take delivery of at least 65 percent of their retail access storage inventory during each year ending April 15th. The retail access storage penalty is generally based on penalty amounts that the KeySpan LDCs could incur if they do not comply with must turn provisions applicable to upstream storage services. The KeySpan LDCs propose to credit any must turn penalties assessed to ESCOs to their Gas Adjustment Clauses.

In response to ESCOs’ concerns voiced during the collaborative, the KeySpan LDCs also agree, beginning June 1, 2017, to set the ESCOs’ Iroquois Minimum Delivery Requirement to 23 percent of the ESCOs’ Core Daily Delivery Quantity (DDQ) on a year round basis. Currently, ESCOs are required to deliver 20 percent of their Core DDQs on Iroquois in the months of November through April and 30 percent of their Core DDQ on Iroquois in the months of May through October. If these percentages cannot be delivered, then the ESCOs must use all the Iroquois capacity released by the KeySpan LDCs to the ESCOs to deliver gas to the KeySpan LDCs. Under the KeySpan LDCs’ revised delivery schedule, 23 percent of the Core DDQ must be delivered for the ESCOs to avoid having to use all the Iroquois capacity released by the KeySpan LDCs to deliver gas to the KeySpan LDCs’ city gates.

Case 16-G-0058

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