Settlement at National Fuel Gas Distribution Will Allocate Contingency Capacity, Costs to Choice Customers

A settlement in National Fuel Gas Distribution Corporation's 1307(f) proceeding in Pennsylvania would allocate a portion of contingency capacity, and attendant costs, to choice customers (R-2012-2281465).

The settlement was signed by the PUC's Bureau of Investigation and Enforcement, the Office of Consumer Advocate, the Office of Small Business Advocate, and National Fuel Gas Distribution Corporation.

The settlement's language provides, "Distribution's purchased gas cost rates will include an allocation of contingency capacity in sales and transportation rates, including SATC [Small Aggregation Transportation Customer] delivery rates. The amount of contingency capacity to be allocated to delivery rates shall be 22,632 Dth."

As described by the Office of Consumer Advocate in a statement of support, "The Settlement allocates a portion of the Contingency Capacity costs to PGC [Purchased Gas Cost] customers, Monthly Metered Transmission (MMT) customers and Choice (SATC delivery rates) customers."

According to OCA, National Fuel Gas Distribution's initial filing did not allocate any portion of the contingency capacity costs to choice customers.

"This Contingency Capacity is available to serve and to benefit Choice customers, as well as PGC and MMT customers. Therefore, it is appropriate for Choice customers to receive an allocation of the Contingency Capacity using the same approach used for MMT and PGC customers," OCA said.

The OCA said that PGC rates will be reduced by $329,357 due to removal of the choice customers' contingency capacity allocation from PGC rates.

The settlement would also reduce Distribution's retainage rate to 0.31% (0.29% lost and unaccounted for gas and 0.02% company use gas). The current retainage rate is 0.46%.