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ESCOs Seek Change To Price Used For Cash-outs

October 30, 2018

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

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Bluerock Energy submitted comments on a Central Hudson Gas & Electric Gas Transportation Operating Procedures filing seeking a change related to cash-outs

Bluerock wrote, "Our issue centers around CH's usage of Algonquin City Gate prices for Under-Delivery Cashouts. We believe using Algonquin City Gates GDA as a Cashout value for shortfalls is not appropriate for a CH Cashout. While we understand that CHGE has a Citygate located in New York state that is connected to Algonquin, the Platts Algonquin Citygate GDD price does not apply to gas delivered to Algonquin Citygates located in New York."

Citing a Platts methodology, Bluerock said that page 8 defines Platts Algonquin City Gates as follows: "Algonquin, city-gates (daily and monthly survey) Deliveries from Algonquin Gas Transmission to all distributors and end-use facilities in Connecticut, Massachusetts and Rhode Island."

Bluerock wrote, "The Algonquin Citygate price only applies to New England Citygates. We've seen very large price variances between Algonquin CG and Iroquois Zone 2, particularly when Algonquin does maintenance on their system. (April 2018 is an example where there was substantial harm experienced by marketers that had a shortfall, due to the inconstancy between CH's City Gate Prices off Iraq Zone 2 vs. Algonquins City Gate prices.)"

Bluerock wrote, "Given that the Algonquin City gate price does not apply to CH' s CityGate, BlueRock believes that CH's proposed GTOP should be revised such that shortfalls are cashed out at Iroquois Zone 2 price only. Continuing to include the Algonquin Citygate price in CH's Cashout formula would be no different than using a similarly inapplicable price, such as the market price for gas in another state or country."

M&R Energy Resources Corporation filed comments in support of Bluerock's position, stating, "M&R agrees with BlueRock that use of the Algonquin City Gates gas daily average as a cashout value for shortfalls is not appropriate for a Central Hudson cashout, and that the proposed GTOP should be revised such that shortfalls are cashed out at the Iroquois Zone 2 price only. Revising the GTOP in this way would assure that the cashout value would be appropriately applicable to Central Hudson."

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