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Settlement In Pennsylvania Utility's Rate Case Includes Retail Market Provisions
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A settlement in the base rate case proceeding of UGI Utilities, Inc. – Gas Division in Pennsylvania includes several provisions related to the retail market.
Among other provisions, the settlement includes the following terms:
• Transparency of UGI Gas’s Delivery System. In the first supplier collaborative
meeting held within 90 days after a final order is entered in this proceeding, UGI Gas will review
delivery requirements and flexibility related to its delivery regions, including the ability to move
gas between delivery regions whether physically through pipeline transmission system delivery
points or in kind by displacement. Supplier feedback will be encouraged for mutual discussion
and follow-up action items.
• Nomination Notifications. UGI Gas will undertake an investigation of other utility
practices with regard to the management of weekend scheduling mismatches and compile a
summary for presentation and discussion as part of UGI Gas’s 2023 supplier collaborative
• Weighted Average Cost of Delivered Gas (WACOD).
a) In its 2023 Purchased Gas Cost proceeding, UGI Gas will propose a plan to
transition recovery of capacity costs from the current WACOD cost
recovery method to recovering those costs directly from Rate LFD
customers on their UGI Gas bills
b) For all future interstate pipeline company Natural Gas Act (NGA) general
Section 4 base rate filings, UGI Gas will provide information on its Energy
Management Website showing how the individual Section 4 rate case is
expected to impact the WACOD calculation over a forward-looking 12-
month period. This information will be provided twice: (1) when the
Federal Energy Regulatory Commission (FERC) accepts the NGA
Section 4 base rate change filing; and (2) when the NGA Section 4 base rate
case is settled or otherwise adjudicated. The impact will be reflected in a
one-time posting on the Company’s Energy Management Website, with the
calculation based on a point in time analysis where the future forecast of the
WACOD rate is subject to change as a result of other operating circumstances and FERC filing impacts. As these are estimates based on
forecasts, UGI Gas is not, and will not be, responsible for their accuracy.
Settling parties include UGI Utilities, Inc. - Gas Division, the Bureau of
Investigation and Enforcement of the Pennsylvania Public Utility Commission, the Office of Consumer Advocate, the Office of Small Business
Advocate, the Coalition for Affordable Utility Services and Energy Efficiency in
Pennsylvania, the Commission on Economic Opportunity, and NRG
Energy, Inc.
In a statement filed in support of the settlement, NRG Energy said, "NRG continues to have concerns about the presence of UGI Energy Services, LLC ('UGI-ES'), an affiliate of UGI Gas, in the retail competitive market, competing against nonaffiliated
NGSs. The Commission’s Standards of Conduct contain numerous provisions designed to ensure
that natural gas distribution companies ('NGDCs') do not afford their affiliated NGSs an unfair
advantage over nonaffiliated NGSs. 52 Pa. Code § 62.142. Strict compliance with the Standards
of Conduct by NGDCs is critical to the robust functioning of the competitive market. (NRG
Statement No. 1 at 4-9). Although the Settlement does not contain any provisions regarding the
Standards of Conduct, NRG is satisfied that the Joint Petition reflects a carefully balanced
compromise in that it adequately addresses the other issues raised by NRG in this proceeding."
NRG said that the settlement term concerning Transparency of UGI Gas’s Delivery System adequately addresses NRG’s concerns regarding
the need for an
understanding of the full capabilities of UGI Gas’ delivery system when it receives gas from the
interstate pipelines. "Having this information will ensure that NGSs operating in the UGI Gas
service territory are on equal footing with UGI-ES in terms of understanding the capabilities of
UGI Gas to move gas between regional pools on its delivery system," NRG said in a statement in support of the settlement
Docket Nos. R-2021-3030218, et al.
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June 27, 2022
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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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