Case Background
On
February 20, 2017, Peoples Gas System (Peoples or the company) filed a petition
seeking approval of modifications to its Natural Gas Vehicle Service (NGVS) tariffs.
Specifically, Peoples proposed modifications to its current NGVS-2 rate
schedule and proposed new rate schedule NGVS-3. Rates and charges for NGVS
customers are not changing. The proposed tariff changes are designed to provide
more clarity regarding optional services offered by Peoples to customers buying
natural gas for compression and delivery into compressed natural gas (CNG)
vehicles.
In
Order No. 25626, the Commission approved Peoples’ original program for the use
of CNG in motor vehicles. The program was designed to assist fleet
operators and filling station operators in obtaining compressor units to
encourage the development of a CNG infrastructure. In 2013, the Commission
approved Peoples’ currently available NGVS-2 tariff, which provides three options
for Peoples to install and maintain private or public fueling stations for CNG customers.
Section
334.044(33)(a)4., Florida Statutes (F.S.), encourages the increased use of
natural gas to reduce transportation costs for businesses and residents within
the state. Peoples waived the 60-day file and suspend provision of Section
366.06(3), F.S. The Commission has jurisdiction over this matter pursuant to Section
366.04, F.S.
Discussion
of Issues
Issue 1:
Should the Commission approve Peoples’ petition to modify
the NGVS-2 rate schedule and approve the new NGVS-3 rate schedule?
Recommendation:
Yes. The Commission should approve Peoples’ petition
to modify the NGVS-2 rate schedule and approve the new NGVS-3 rate schedule
effective May 4, 2017. (Guffey)
Staff Analysis:
The NGVS-2 rate schedule applies
to customers wishing to buy gas for the purpose of compression and delivery
into CNG vehicles. The NGVS-2 rate schedule was designed to provide customers
with three options with respect to the facilities and equipment required for
the compression and dispensing of CNG while allowing Peoples to recover its
cost to provide these options.
Peoples explained that based on
three years of experience with the NGVS-2 rate schedule, Peoples has determined
that the three options can be confusing to customers and the company. Therefore,
Peoples filed the instant petition to keep Option 1 as the only service
provided under the NGVS-2 rate schedule, eliminate Option 2, and offer Option 3
under the new rate schedule NGVS-3. Peoples currently has no customers taking
service under Options 2 and 3.
The current NGVS-2 rate schedule
is included as Attachment A to the recommendation. The proposed modified NGVS-2
and proposed new NGVS-3 rate schedules are included as Attachment B. The three existing
options contained in the NGVS-2 rate schedule and Peoples’ proposed
modifications with respect to each option are discussed below.
Under Option 1, Company-provided Facilities on Customer’s
Premises, Peoples incurs the capital cost to construct the CNG station and
the ongoing costs associated with the maintenance of the CNG station. Customers
are billed under the otherwise applicable residential or commercial rate
schedules based on annual consumption. In addition, customers are assessed a
monthly facilities charge to allow Peoples to recover the cost associated with
the facilities provided. The company currently has three customers: the City of
Orlando’s Solid Waste Division, NoPetro in Orlando serving CNG buses, and St.
Johns County serving their CNG fleet. These customers have CNG fueling
facilities on their premises, such as at a public works parking lot or fleet vehicles
yard. This option would remain available to customers and will be the only
service covered under the NGVS-2 rate schedule.
Under Option 2, Limited Access Facilities Located on Company
Premises, one or more customers can contract with the company to provide
and maintain, on company premises, an NGV compression and fueling station. Similar
to Option 1, customers pay a monthly facilities charge. Peoples explained that
this tariff option, as written, would have been difficult to administer as
facilities cost would vary based on the number of customers taking this option.
The company stated that it does not anticipate future customers taking service
under this limited service option on company premises as there are more fueling
stations that are open to the public now; therefore, Peoples is proposing to eliminate
NGVS-2 rate schedule’s Option 2.
Current Option 3, Publicly Accessible Facilities Located on
Company Premises, contained in the NGVS-2 tariff is designed for Peoples to
operate a publicly accessible facility located on its premises. Customers under
this option are not billed the otherwise applicable rate. Customers instead pay
$0.50 per therm for distribution and dispensing, in addition to the cost of
gas. The $0.50 per therm fee was developed to recover the estimated cost of
providing the CNG to a vehicle in a public station.
Peoples is proposing to move
Option 3 to a new rate schedule NGVS-3. Although, currently, there are no
customers taking service under Option 3, it is proposed as a placeholder to be
used when the opportunity arises for Peoples to build publicly accessible CNG
fueling stations.
Conclusion
Peoples’ proposed NGVS programs and tariffs are reasonable and will allow
Peoples to recover its cost of providing CNG service. Staff recommends that the
Commission approve Peoples’ petition to modify the NGVS-2 rate schedule and
approve the new NGVS-3 rate schedule effective May 4, 2017.
Issue 2:
Should this docket be closed?
Recommendation:
Yes. If Issue 1 is approved the tariffs should
become effective on May 4, 2017. If a protest is filed within 21 days of the
issuance of the order, the tariffs should remain in effect, with any revenues
held subject to refund, pending resolution of the protest. If no timely protest
is filed, this docket should be closed upon the issuance of a consummating
order. (Janjic)
Staff Analysis:
If Issue 1 is approved the tariffs should become
effective on May 4, 2017. If a protest is filed within 21 days of the issuance
of the order, the tariffs should remain in effect, with any revenues held
subject to refund, pending resolution of the protest. If no timely protest is
filed, this docket should be closed upon the issuance of a consummating order.
