New York Utilities Agree To Not Implement Proposed Green Gas Supply Option Through March 2023
Updated Consolidated Billing Fee For ESCOs
May 17, 2021 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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The Brooklyn Union Gas Company d/b/a National Grid NY ('KEDNY'), KeySpan
Gas East Corporation d/b/a National Grid ('KEDLI') (KEDNY and KEDLI, or the "Companies") and New York State Department of Public Service
Staff has entered into a rate case joint proposal which includes an agreement for the KeySpan LDCs not to implement a proposed green natural gas supply tariff for utility supply customers through March 31, 2023.
The JP, which remains subject to PSC approval, would cover three rate years, with the final rate year ending on March 31, 2023.
The JP provides that, "The Companies shall not implement their proposed Green Gas Tariffs during the
term of the rate plans." The terms of the rate plans for KEDNY and KEDLI are the three years beginning
April 1, 2020, and continuing through March 31, 2023
While the KeySpan LDCs had earlier withdrawn the proposed green gas tariff from the current rate case, in doing so they indicated a future rate case filing was (under their intent at the time) likely in the near future, and thus the issue could have been raised again. The agreement not to adopt the green gas proposal through the term of the rate plans addressed under the JP thus represents an additional commitment.
The JP also addresses other issues related to ESCOs
Under the JP, KEDNY’s consolidated billing fee will be updated from the current rate of $1.42
to $1.31 per bill, except for Rate Year Two. For Rate Year Two, KEDNY’s consolidated
billing fee will be $1.26 per bill, which reflects (i) the reduction in the billing fee and (ii) a
compressed period over which the total Rate Year Two consolidated billing fee revenue
will be collected (the eight-month period from August 2021 through March 2022).
KEDLI’s consolidated billing fee will remain at $1.32 per bill. In addition,
KEDLI’s SC 9 shall be eligible for the consolidated billing charge.
Under the JP, The Companies’ Merchant Function Charges ('MFC') shall be changed to
eliminate provisions that allow for mid-year adjustments to annual imbalance charges. In
addition, the Companies will continue with the following modifications:
a. The MFC will be updated to reflect the Gas Supply Procurement target of
$2.401 million for KEDNY and $0.349 million for KEDLI, and the
Commodity-Related Credit and Collection target of $4.786 million for KEDNY
and $1.269 million for KEDLI as shown in Appendix 3, Schedule 6.1 for KEDNY and Appendix 4, Schedule 6.1 for KEDLI. In addition, the conversion
of the annual expense targets for gas supply procurement and commodity-related
credit and collections charges from a fiscal year basis to a Monthly Cost
of Gas ('MCG') year basis is shown in Appendix 3, Schedule 6.2 for KEDNY
and Appendix 4, Schedule 6.2 for KEDLI.
b. The methodology for calculating commodity-related working capital expense
will continue to be aligned with the methodology adopted by the Commission
for NMPC in Case 08-G-0609, such that the working capital component of the
MFC will be calculated each month by multiplying the updated lead/lag rate
and the Companies’ pre-tax weighted average cost of capital, as shown in
Appendix 3, Schedule 6.3, page 8 for KEDNY and Appendix 4, Schedule 6.3,
page 8 for KEDLI.
c. The Companies will initially reset their (i) Gas Supply Procurement target, (ii)
Commodity-related Credit and Collection Expenses targets and (iii) Return
Requirement on Gas Storage Inventory effective August 1, 2021. Then, going
forward, the Companies will reset these targets annually based on the latest
sales forecast every September 1, and reconcile the revenue to target, effective
the following January of each year. The initial one-month target for August
2021 will be added to the over/under recoveries for the period September 1,
2021, through August 31, 2022. An illustrative example of the stub period
reconciliation is shown in Appendix 3, Schedule 6.4 for KEDNY and Appendix
4, Schedule 6.4 for KEDLI.
d. Appendix 3, Schedule 6.1 and Appendix 4, Schedule 6.1, for KEDNY and
KEDLI, respectively, summarizes all the MFC components for Rate Year Two,
as well as for the MCG year. These appendices align with the Companies’ Cost
of Gas reconciliation.
e. Illustrative examples of the per dekatherm rates for all the MFC components
are shown on Appendix 3, Schedule 6.3 to reflect the most recent targets for
KEDNY and Appendix 4, Schedule 6.3 for KEDLI.
f. For the four months of the non-reconciled component of the MFC prior to the
effective dates, the Uncollectible Expenses Associated with Gas Costs and
Return Requirement on Gas Purchase-Related Working Capital will be added
to the Make Whole provision as shown in the Appendix 3, Schedule 14.2 for
KEDNY and Appendix 4, Schedule 14.2 for KEDLI.
As noted, the KeySpan LDCs will eliminate the mid-year adjustment to the MFC annual imbalance factor
The Companies will also eliminate the mid-year adjustment to the annual cost of gas imbalance