Pennsylvania Utility Seeking To Require Retail Suppliers To Carry $5 Million Cybersecurity Insurance, Sign Data Security Agreement For Web Portal Access

July 2, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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In Pennsylvania, National Fuel Gas Distribution Corporation (NFGD or "Company") has filed tariff changes with the PUC to require retail suppliers and other entities to sign a data security agreement and carry $5 million in cybersecurity insurance as a condition of accessing the utility's systems, including web portals

The proposed tariff reads that, "As a condition of access to customer information via publicly available Company business systems, including but not limited to web portals, the Company will require parties requesting such access to sign a Data Security Agreement and require that parties carry and maintain Cybersecurity insurance in an amount no less than $5,000,000 per incident."

The Data Security Agreement, which includes a Self-Attestation form, "is patterned after the DSA the Company is currently using in its New York service territory but is modified to reflect Pennsylvania rules and regulations, NFGD said

"Because they are active in the Company’s New York territory, the majority of NGSs and Customer Agents have already executed the New York DSA. The Company will require these parties to execute a Pennsylvania DSA but does not expect that it would require additional Cybersecurity insurance provided that the data interconnect between the Company and these parties is identical," NFGD said

The data security requirements would apply to retail natural gas suppliers (NGSs) that operate under Company’s MMNGS and SATS rate schedules and MMT, DMT & DMLMT transportation customers that procure their own gas supply ('standalone customers'), their EDI providers and other business parties who access utility business systems on behalf of the NGSs and standalone customers ('Customer Agents')

Other Changes

The Company is proposing to align the rate charged to MMT, DMT & DMLMT customers for nonperformance during Operational Flow Orders (OFOs) with the rate charged to NGSs serving customers under MMNGS and SATS service. "The Company believes the resulting rate is consistent with Advance Notice of Proposed Rulemaking Order in Docket No. L-2017-2619223 (Adopted and Entered August 31, 2017), where the Commission expresses a preference for market based pricing," NFGD said

Under the change, SB Transportation MMT customers shall be subject to a penalty of Charges for Daily City Gate Underdeliveries applicable to MMNGS Suppliers plus the higher of $25 per Dth or the DMI for that day plus all transportation costs to the Company’s City Gate when Company has announced that overrun service is not available.

Under the change, SB Transportation DMT customers shall be charged the higher of: (1) the rate determined in item 3 [of an unchanged part of the tariff] or (2) the Charges for Daily City Gate Underdeliveries applicable to MMNGS Suppliers plus the higher of $25 per Dth or the DMI for that day plus all transportation costs to the Company’s City Gate when Company has issued an OFO that includes a Restriction on Access to Daily Metered Imbalances or announced that overrun service is not available.

The current non-performance rate is based upon, "the highest incremental per Mcf cost of gas purchased in Company’s gas supply portfolio during the month applicable to gas purchased from Company," and the proposed rate is based upon a daily market index price at Tennessee Gas Pipeline’s Zone 4 200 Line Trading Hub, referred in the SNL Natural Gas Index as "TGP Z 4 200L" on the day of non-performance. "The Company considers this to be a rate change rather than an increase or decrease since the difference between the proposed rate and the current depends upon gas prices on the day(s) an OFO was declared and purchases in the Company’s gas supply portfolio during the month in which that OFO was declared," NFGD said

Additionally, language is provided to clarify that the non-performance rate will apply when the Company issues, "an OFO that includes a Restriction on Access to Daily Metered Imbalances."

NFGD also proposed storage changes.

Based upon an internal study, the Company determined that the month end storage requirements applicable to NGSs during the heating season might be stricter than they needed to be in order to provide reliable service. To test this proposition, following discussion with NGSs during the Company’s Marketer meetings and with Office of Competitive Market Oversight (OCMO) Staff, the Company posted relaxed month end storage requirements, i.e. lower requirements than those provided in the tariff. "The Company considers the test to have been successful and therefore proposes to modify the month end storage inventory requirements on Page No. 130 to reflect relaxed requirements. Correspondingly, the Company proposes to reduce the amount of storage inventory transferred at the beginning of each month on Page No. 128 when SATS Suppliers are assigned additional storage capacity," NFGD said

The revised storage gas transfer amounts by month can be seen in page 107 of NFGD's filing here

The Company also proposes authority to further relax month end storage inventory requirements based upon operating conditions that evolve during a heating season. For example, in an extremely cold December, if the NGS inventory levels appeared to be falling just short of the proposed 68% requirement and the weather forecast for January was warmer than normal (sufficiently warmer such that storage levels could recover), the Company proposes the authority to relax the December month end requirement to another level, perhaps 67%, via a web posting.

Docket R-2019-3010744

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