Draft Order Would Deny Equitable Purchase of Receivables Proposal -- Due to Lack of Interest!

A recommended decision from a Pennsylvania ALJ would deny a proposal from Equitable Gas to implement a purchase of receivables program because, "there is no documented level of interest in participating in a POR program by any NGS's [natural gas suppliers] in Equitable's service territory."

As first reported by Matters, Equitable proposed a POR program which included a discount rate for residential customers of 1.7946%. The commercial and industrial POR discount rate would be 0.4776%.

Additionally, for consolidated billing service, the Pool Administrator would pay $0.30 per bill for each bill rendered by Equitable.

POR service was proposed to be limited to non-Customer Assistance Program accounts for residential and small commercial and industrial customers served under Rate Schedule FDS, and Rate Schedule FPS with annual consumption of 300 Mcf or less, whose receivables are only for commodity charges for basic natural gas supply services.

Notably, in order for a Pool Administrator to take POR service for a customer class (residential or small commercial) under the proposal, all eligible customers in that class served by the Pool Administrator and any affiliate of a Pool Administrator must participate in the POR program.

See prior story for more on design of the POR program

An ALJ noted that, except for the Office of Consumer Advocate (OCA), the parties did not specifically oppose Equitable's proposed POR program, but offered modifications. OCA contended that there were defects in the POR program and disagreed that Equitable's proposed POR program was consistent with the Commission's Revised Final Rulemaking Order.

"However I find the most compelling reason for not approving Equitable's proposed POR program at this time is the lack of interest by any pool administrator," the ALJ said.

Equitable has only one pool administrator that operates a Choice program on the system. This pool administrator (Dominion Retail) has informed Equitable that it does not plan to participate in a POR program if implemented.

"I agree with OCA that it is inefficient to expend resources of the Commission and the other parties to debate the structure of a POR program at this time when there is no documented level of interest in participating in a POR program by any NGS's in Equitable's service territory. Accordingly I recommend that the Commission not approve Equitable's proposed POR program," the ALJ proposed.

The recommended decision also addressed three alternative proposals by Equitable to address volatility and an upward trend in its system average Btu content, which correlates to the increased flow of Marcellus Shale gas on its system. These three revenue neutral options were (1) monthly tariff filings adjusting Equitable's tariff rate as a result of changes in natural gas heating values (Equitable's preferred option); (2) applying a Heat Value Correction Factor to metered sales volumes; or (3) a conversion to dekatherm billing (from the current volumetric billing)

The ALJ would deny all three Btu Adjustment alternatives as the ALJ was, "not convinced that Equitable has carried its burden of proving the justness and reasonableness of its proposed," alternatives.

"I would agree with the statutory parties that Equitable's proposed [Btu Adjustment] supplements constitute prohibitive single issue rate making. Therefore I recommend that the Commission deny approval of any of the proposed supplements," the ALJ found.

Docket: R-2012-2304727