Draft Order Would Establish Bypassable Procurement Charge at Pennsylvania Utility

A recommended decision from a Pennsylvania ALJ would establish the new bypassable Gas Procurement Charge, reflecting an unbundling of certain supply-related costs currently in base rates, at Peoples TWP LLC.

Specifically, the ALJ would adopt without modification a settlement among the utility, the Office of Consumer Advocate and the Office of Small Business Advocate.

The settlement would establish the bypassable GPC at $0.0486 per Mcf. The GPC costs include costs associated with gas procurement labor and benefit costs, and 1307(f)-related external legal costs, from base rates.

The stipulated GPC does not include costs related to working capital storage inventory costs embedded in base rates. These costs were not included in the GPC costs because it was the company's position that such costs are used by both retail and transportation customers for system balancing and thus are a shared asset. Moreover, Peoples TWP's proposed GPC does not include any capital or depreciation costs associated with its information technology systems as the company's information technology systems to support gas procurement are fully depreciated.

The settlement also provides that in its next base rate filing, Peoples TWP shall include proposed changes to its retail shopping mechanism, including, as necessary but not necessarily limited to, changes to tariff charges, balancing charges, imbalance penalties, supplier delivery and balancing requirements, and the company’s purchase of receivables program. To the extent no changes are proposed, Peoples TWP will present the basis for continuation of its existing retail shopping mechanism.

The next base rate filing shall include an evaluation of whether and how working capital costs claimed by Peoples TWP in such base rate proceeding should be included in the GPC and purchase of receivables program as a consequence of the retail shopping mechanism proposed in such base rate proceeding.

If Peoples TWP does not file a base rate proceeding prior to October 1, 2013, it agrees to submit a petition to the Commission addressing these retail market issues.

Docket: R-2012-2327529