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New York PSC Approves Capacity Release Changes at NiMo

October 23, 2018

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

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The New York PSC has approved tariff revisions at Niagara Mohawk (National Grid, or Company), effective on November 1, 2018, to amend its capacity release program for energy services companies (ESCOs) to address capacity constraints on the East side of National Grid’s system.

The tariff revisions were contemplated by a prior settlement in a NiMo rate case, and such capacity release changes were exclusively reported by EnergyChoiceMatters in January of this year

In Case 17-G-0239, National Grid explained that it was experiencing peak hour pipeline constraints on the East side of its gas distribution system. To maintain system reliability, the Company and a few large volume customers utilize Tennessee Gas Pipeline (TGP) to support the demand on the East side in addition to Dominion Transmission, Inc. (DTI). However, ESCOs are only required to deliver natural gas on DTI to meet the needs of their customers on the East side of National Grid’s system.

The PSC's order in the rate case (Rate Order), which adopted the terms of a Joint Proposal, required that the Company implement a 'slice of the system' approach to address system reliability. The slice of the system approach would require that all ESCOs participating in the Company’s retail choice program, and serving firm customers within National Grid’s service territory, receive an allocated percentage of the Company’s pipeline capacity assets. Under the slice of the system approach, the cost of maintaining system reliability would be equitably spread among the Company’s full service customers, large volume transportation customers and all ESCOs serving firm customers.

Specifically, the Rate Order required the Company to allocate its gas supply assets to ESCOs to reflect the supply needs of the East and West sides of National Grid’s system. Under its proposal, the Company would release or assign to each ESCO a pro-rata share of each of the Company’s pipeline and storage assets, i.e., a slice of the system, regardless of where the ESCO’s customers are physically located. The Company would also allocate a portion of its city gate peaking supplies to ESCOs to be managed by the Company, and provided to ESCOs, as needed.

The Rate Order required National Grid to hold collaborative meetings with ESCOs and interested parties to provide details on the Company’s proposal to implement the revised capacity release program. The PSC said in its order that ESCOs and other interested parties had the opportunity to provide comments and feedback on the Company’s proposal, and the Company considered that feedback in developing the changes to its capacity release program. In addition, the PSC said that, during these collaborative meetings, the parties identified conflicting language in the Joint Proposal adopted by the Rate Order. The PSC said that the Company, ESCOs and interested parties developed a solution that resolved the language discrepancy, which National Grid included as part of its filed tariff amendments.

Specifically, National Grid’s proposed tariff amendments establish a capacity release program that releases a pro-rata share of all of the Company’s gas supply assets to ESCOs beginning November 1, 2018. The Company proposes to allocate a portion of its city gate peaking supplies to ESCOs to be managed by the Company, and provided to ESCOs, as needed. The proposed tariff amendments include revisions to General Information Section 29 – Cashout Imbalances, SC No. 11 – Load Aggregation, as well as revisions to certain provisions of SC No. 14 – Gas Transportation Service for Dual Fuel Electric Generators. Consistent with Section IV.15.2.2 of the Joint Proposal adopted by the Rate Order, minimum daily delivery requirements that apply to all released capacity, as well as the details of the capacity release program will be described in the Company’s Gas Transportation Operating Procedure manual.

During the collaborative meetings, the parties identified conflicting language between Section IV.15.3.1 and Section IV.4.9.1. Section IV.15.3.1 required modifications to the Company’s cashout provisions at prices that mirrored the slice of the system. Section IV.4.9.1 addressed Electric Generators served under SC No. 14 and required the Company to cashout the aggregated daily imbalances at a monthly index price equal to the simple average of the Dominion Northpoint midpoint, Dominion South Point, and the Iroquois receipts midpoint prices. In order to resolve the conflicting language, the PSC said that the Company proposes to have the same cashout provisions for SC No. 11 and SC No. 14, to ensure that it treats customers consistently and equitably. On September 21, 2018, National Grid filed a further tariff revision to add clarifying language to the daily cashout rate in tariff Section 29.3.1.2.

In approving the tariff changes, the PSC said that, "The proposed tariff revisions reflect the input of affected stakeholders and appropriately effectuate the requirements of the Rate Order. The proposal to address the conflicting language in the Joint Proposal adopted by the Rate Order properly synchronizes the conflicting provisions by treating all ESCOs and power generation customers consistently. Further, the resolution achieves the goal of implementing the slice of the system approach to enhance the reliability of National Grid’s gas system. The Commission, therefore, approves National Grid’s proposed tariff amendments listed in the Appendix."

Such approved tariff amendments are:

Amendments to Schedule P.S.C. No. 219 – Gas

• Original Leaves Nos. 119.1, 183.1

• Second Revised Leaf No. 121

• Third Revised Leaf No. 119

• Fourth Revised Leaves Nos. 120, 173

• Sixth Revised Leaf No. 185

• Seventh Revised Leaves Nos. 117, 122, 180, 181, 183, 217

• Tenth Revised Leaf No. 218

• Eleventh Revised Leaf No. 179

Issued: July 12, 2018 Effective: November 1, 2018

• First Revised Leaf No. 119.1

Issued: September 21, 2018 Effective: November 1, 2018

Case 18-G-0436

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