Peoples Natural Gas to Transfer Costs from Delivery to Supply Rate

Peoples Natural Gas Company LLC would begin recovering additional costs of gas supply outside of base delivery rates under a settlement filed with the Pennsylvania PUC (R-2012-2292082 et al.).

The stipulation provides that, effective October 1, 2012, Peoples will begin to recover through the 1307(f) mechanism certain costs incurred solely for the purpose of procuring gas supplies and performing gas hedging activities on behalf of 1307(f) customers.

These additional costs shall only include: (a) market reports that are used to support daily and monthly physical deal pricing and swap settlements and information on FERC matters; and, (b) internet-based or other related services that provide real-time pricing information in support of daily economic gas purchase decision making and forward pricing information in support of the Peoples' hedging program.

Effective October 1, 2012, Peoples will begin to recover these other gas costs from 1307(f) customers and will not seek to recover these same costs through its non-gas base rates.

The stipulation also provides that Peoples shall make available to NP-1 pools, for the storage injection season beginning April 2013, 1.70 Bcf of on-system storage capacity used by Peoples to provide Banking, Balancing and Advancing Service. This adjustment from 1.55 Bcf to 1.70 Bcf of on-system storage capacity made available to NP-1 pools is in conformance with Paragraph 53 of the PUC-approved settlement agreement in Peoples' 2010 base rate proceeding at Docket No. R-2010-2201702.

The stipulation would further establish that, effective October 1, 2012, the tariffed retainage rate under Rate GS-T will be decreased from 8.6% to 8.0% and the tariffed retainage rate under Rate T will be decreased from 7.2% to 6.9%.

The unopposed settlement was signed by Peoples Natural Gas Company LLC, the PUC's Bureau of Investigation & Enforcement, the Office of Consumer Advocate, the Office of Small Business Advocate, and the Pennsylvania Independent Oil & Gas Association. The only other active parties to the proceeding, Dominion Retail, Inc. and Interstate Gas Supply, Inc., have indicated that they neither support nor oppose the settlement.