ConEd Files To Institute Tier 2(B) Physical Storage Program For ESCOs On Permanent Basis

July 3, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Consolidated Edison Company of New York, Inc. (the "Company") has filed tariff revisions with the New York PSC to institute the Tier 2(B) Physical Storage program for natural gas ESCOs on a permanent basis

ConEd explained that Gas Marketers serving firm transportation customers on the Con Edison gas system must take Daily Delivery Service (DDS), a program under which the Marketers receive allocation of the Company’s baseload supply, pipeline capacity, storage and peaking supply assets.

DDS currently consists of the following tiers:

• Baseload Service

• Tier 1 – Mandatory Capacity Release

• Tier 2 – Managed Supply (Storage)

• Tier 3 – Peaking

In a December 1, 2017 DDS filing, the Company had proposed the Tier 2(B) Physical Storage pilot program. Under the Commission-approved pilot program, the Company released to Gas Marketers certain allocations of the Company’s physical storage assets along with associated firm transportation capacity. The pilot was in effect for the twelve-month period April 1, 2018 through March 31, 2019. After the Tier 2(B) Physical Storage pilot expired on March 31, 2019, the Company evaluated the program and met with the Gas Marketers and Department of Public Service Staff (Staff) through an established collaborative process to discuss modifications and continuation of the program on a permanent basis.

Based upon input received from the Gas Marketers and Staff and consistent with the overall nature of the DDS program, the Company is now proposing to institute the Tier 2(B) Physical Storage program on a permanent basis as described below.

Under ConEd's proposed tariff changes:

• The Company is proposing to institute the Tier 2(B) Physical Storage program beginning April 1, 2020 under its DDS program.

• The Tier 2(B) Physical Storage program will be a voluntary program for Gas Marketers and/or their Agents and in effect from April 1 through March 31 of each year.

• Gas Marketers and/or their Agents who are interested in participating in the Tier 2(B) Physical Storage program must notify the Company by February 1 of each year.

• Gas Marketers and/or their Agents who elect to participate in the program for one year but decide not to participate in it the following year must return their allotted storage capacity empty by March 31 of each participating year.

• A participating Gas Marketer and/or its Agent who elects to continue its participation in the Tier 2(B) Physical Storage program must either:

       (i) empty all of its gas in storage by March 31 or

       (ii) retain 100% of its remaining gas as of March 31 provided that its remaining gas does not exceed its subsequent year’s (April 1) allocated capacity release minus two (2) dekatherms per storage field (to account for potential system rounding concerns).

       If the Marketer and/or its Agent fails to do (i) or (ii) above and has gas remaining in storage as of March 31, then the Company will purchase the remaining gas at the lower of the Company’s weighted average cost of inventory as of March 1 (excluding the cost of LNG, CNG and propane) minus $0.50/Dt or the FERC first of month market price of gas for March at the storage field listed in the GTOP.

• The Tier 2(B) Physical Storage allocation will be increased to 15 percent from 12 percent of the Tier 2 Managed Supply (Storage) assets.

• The Company re-worded item (xiii) under the Annual Surcharge or Refund Adjustment provision of the Gas Cost Factor since it should reference "incurred costs of capacity" rather than "charges."

Case 19-G-0490

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