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KeySpan LDCs Report Surcharges To Default Service Gas Cost Rate Due To Reconciliation Of Under-collections

October 17, 2018

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Reporting by Paul Ring • ring@energychoicematters.com

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The Brooklyn Union Gas Company (KeySpan New York, or KEDNY) said that, concerning its gas cost reconciliation, it under-collected approximately $18 million of gas purchase costs for the twelve months ended August 31, 2018. This under collection results from the netting of: 1) $21.2 million gas expense under recoveries; 2) the $2.1M residual over-recovery of the 2016 annual reconciliation; and 3) a $1.1 million credit adjustment under the Company’s lost and unaccounted for (LAUF) gas incentive mechanism. The LAUF adjustment results from the fact that the company’s actual LAUF rate for the period was 2.267%, which is greater than the allowed LAUF rate of 2.026%. KEDNY noted that the LAUF target for the Gas Adjustment Clause (GAC) year ended August 31, 2018 is a blended rate of the previous LAUF target of 2.273% and the new LAUF target of 1.902% that went into effect January 1, 2018.

Accordingly, KEDNY will surcharge the $18.5 million (including interest) under collection to default service firm sales customers provided service under Service Classification (SC) 1A, 1AR, 1B, 1BI, 1BR, 1BDG, 2, 3, 4A, 4A-CNG, 4B, 7 and 21 (Firm Sales Customers). Application of the gas cost reconciliation provisions in the company tariff, PSC No. 12 (Leaf 79.7), would result in an annual cost of gas imbalance surcharge of $0.0205 per therm for the period January 1, 2019 through December 31, 2019.

KeySpan Gas East Corporation (KeySpan Long Island, or KEDLI) said that, concerning its gas cost reconciliation, it under-collected approximately $8.7 million for the twelve months ended August 31, 2018. This under collection results from the netting of: 1) $13.1M gas expense under recovery; 2) the $0.559M residual under-recovery of the 2016 annual reconciliation; and 3) a $4.96 million credit adjustment under the Company’s lost and unaccounted for (LAUF) gas incentive mechanism. The LAUF adjustment results from the fact that the actual LAUF rate for the period totaled 2.801%, which is greater than the allowed LAUF rate of 1.348%. KEDLI noted that the LAUF target for the Gas Adjustment Clause (GAC) year ended August 31, 2018 is a blended rate of the previous LAUF target of 1.476% and the new LAUF target of 1.284% that went into effect January, 1, 2018.

Accordingly, KEDLI will surcharge the $8.9 million under collection, plus interest, to default service firm sales customers provided service under Service Classification (SC) 1, 2, 3, 9, 15, 16, and 17 (Firm Sales Customers) through a $0.01141 per therm annual cost of gas imbalance surcharge, which includes interest and is set forth on the Statement of Gas and Pipeline Costs and Adjustments (GAC Statement) for the period from January 1, 2019 through December 31, 2019.

Niagara Mohawk said that, concerning its gas cost reconciliation, it over-collected approximately $9.4 million for the twelve months ended August 31, 2018. This over-collection results from the netting of: 1) $5.6 million of GAC revenue exceeding gas expenses; 2) a $53K residual under-recovery from the prior reconciliation; and 3) a $3.9 million credit under the company’s lost and unaccounted for (LAUF) gas incentive mechanism.

Accordingly, NiMo will credit the $9.7 million over-collection ($9.4 million plus interest) to default service firm sales customers provided service under Service Classification (SC) 1, 2, 3, 12, and 13 (Firm Sale Customers) through a $0.01708 per therm unit refund set forth on the Monthly Cost of Gas (MCG) Statement for the period from January 1, 2019 through December 31, 2019.

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