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Choice Utility Seeks To Introduce Aggregation Program For Daily Metered Transportation Program
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As part of a newly filed rate case in Pennsylvania, National Fuel Gas Distribution Corporation (NFGDC) is proposing to implement an aggregation program for its Daily Metered Transportation (DMT) program, to replace the current customer banking aspect of the program
Among other things, under the current banking process, DMT customers with accumulated banked volumes can currently use their banked volumes to meet their daily usage quantity and not deliver gas to the system on that day.
A witness for NFGDC said, "Since actual deliveries often differ from actual customer usage on any given
day, the Company must actively manage these daily imbalances to maintain reliability of
the entire system."
Under the proposed aggregation program, NFGDC, "is looking to enhance operational integrity of the system by requiring
customers to match daily deliveries to the system to actual daily usage."
Under the proposed DMT aggregation program, customers would be required
to arrange deliveries of gas to the LDC's system by selecting a DMT aggregator, or the customer can act as their own aggregator on the system.
Customers would be aggregated into daily market pools maintained by an aggregator or
natural gas supplier (NGS).
A witness for NFGDC said, "The aggregator or NGS will benefit from an aggregated pool program where
multiple customers are grouped within a market pool. This will allow the aggregator or
NGS to manage individual customer imbalances by offsetting aggregated imbalances
within each market pool on a daily basis. By aggregating customers into market pools,
aggregators would make daily deliveries based on the expected daily usage for all the
customers enrolled in the pool. Aggregators would not nominate to individual customers
using a Gas Out nomination and customer bank volumes will no longer be available for
customer imbalances."
Under the DMT aggregation program, each day NFGDC would determine whether the total daily usage and delivery quantity
variances of each aggregation pool are within the specified tolerance range, rather than
evaluating an individual DMT customer’s variance.
During normal operations, the
aggregation pool daily deliveries would be required match daily usages within a tolerance range of
plus or minus 10%. During an OFO period, the tolerance range could be reduced to as
little as plus or minus 2%.
Under the DMT aggregation program, NFGDC would each day cash out pool imbalances by calculating the daily imbalance
percentage of each aggregator’s market pool. The market pool imbalance percentage would
be computed by summing the volume of gas delivered for all customers in the pool,
adjusted for line losses, divided by the sum of the burner tip usages for all customers in
the pool. A systemwide imbalance percentage would be similarly calculated for all DMT
customers in all aggregators’ market pools. NFGDC would compare the systemwide
DMT imbalance to each market pool and evaluate pool imbalances using a "No-Harm, No-
Foul" rule.
"For example, if the systemwide DMT
imbalance percentage is less than or equal to the applicable daily tolerance percentage,
then the individual market pools are not subject to daily cash out. If the system’s DMT imbalance percentage is greater than the applicable daily tolerance percentage, then
individual market pools are subject to daily cash out at the daily cash out index rate if
their imbalance percentage exceeds the applicable daily tolerance. Individual market
pool imbalances in excess of the applicable daily tolerance percentage, except during an
OFO, are only subject to cash out if the overall system is out of tolerance for that day in
the same direction. DMT market pools are not subject to cash out if they are opposite to
the direction of overall system imbalance. During an OFO, any pool out of tolerance in
the direction of the OFO is cashed out even if the system is within tolerance," NFGDC said
Under the DMT aggregation program, all daily surplus imbalance volumes would purchased by NFGDC. The price paid by
NFGDC to the aggregator would be based on the published daily index price and daily
imbalance’s tolerance level. Surplus volumes above 10% and less than or equal to 15%
would be cashed out at 90% of the index price. Surplus volumes above 15% and less
than or equal to 20% would be cashed out at 85% of the index price. Surplus volumes in
excess of 20% would be cashed out at 60% of the index price.
To resolve daily deficiency volumes under the DMT aggregation program, NFGDC would sell the equivalent deficiency
volumes to DMT Aggregators. The price charged by NFGDC would be based on the
published daily index price and daily imbalance’s tolerance level. Daily deficiency
imbalance volumes above the 10% daily tolerance level would be cashed out using a
tiered calculation and daily cash out index price. Deficiency volumes above 10% and
less than or equal to 15% would be cashed out at 110% of the index price. Deficiency
volumes above 15% and less than or equal to 20% would be cashed out at 115% of the
index price. Deficiency volumes in excess of 20% would be cashed out at 140% of the
index price.
Under the DMT aggregation program, daily imbalance surplus and deficiency volumes that fall within the daily
tolerance range would not be subject to the daily cash out. Such de minimis imbalance
volumes would be accumulated into a net monthly imbalance volume for the aggregator. "If the
net imbalance volume results in a deficiency, a month end deficiency imbalance is created. If the net imbalance volume results in a surplus, a month end surplus imbalance
is created and added to the imbalance holder’s total aggregated monthly imbalance
quantity. Imbalance holders may exchange a month end imbalance during the imbalance
trading period or the imbalance will be cashed out pursuant to Rule 30 in the Company’s
tariff," NFGDC said
NFGDC anticipates that it will take approximately 12 months to make system modifications and
implement the changes to the DMT program after the proposal is approved.
In another matter, NFGDC is proposing to change the publication used to determine the Monthly Market
Index, which is used in calculating the Market Price of Natural Gas for cashout
calculations. Currently the LDC's tariff references the SNL Natural Gas Index
publication (Page No. 35E). NFGDC proposes to change to the Platts Gas Daily
publication. The Market Index Point will remain Tennessee, Zone 4-200 Leg.
In the rate case, NFGDC proposes updates to the merchant function charge percentages (and accompanying rates)
The residential MFC percentage would be set at 1.8177%, versus the current 1.8032%. The residential MFC would be $0.0952 per Mcf, versus the current $0.0944 per Mcf
The non-residential MFC percentage would be set at 0.4137%, versus the current 0.3398%. The non-residential MFC would be $0.0217 per Mcf, versus the current $0.0178 per Mcf
NFGDC would also update the purchase of receivables discount rates
The residential POR discount would increase to 1.8806% from the current 1.8661%
The non-residential POR discount would increase to 0.4766% from the current 0.4027%
R-2025-3059428
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Utility Files Updates To POR Discount Rates
February 2, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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