Case Background
On October 10,
2019, Florida City Gas (City Gas or utility) filed a petition for approval to
amend tariff provisions to be consistent with the tariff filed with its 2017
rate case Stipulation and Settlement (settlement). In City Gas’s 2017 rate
case, the Commission approved a settlement among the parties to the case. On March 26, 2018, the tariffs implementing
the settlement were entered into the rate case record as Hearing Exhibit 121. On
April 12, 2018, the utility resubmitted the settlement tariffs in their
entirety to address minor edits and corrections identified by staff on certain
pages, including tariff Sheet No. 22. The tariffs as submitted on April 12,
2018, were attached to the Commission’s final order in the 2017 rate case (Order
No. PSC-2018-0190-FOF-GU).
City Gas states
in the instant petition that it recently came to the utility’s attention that
tariff Sheet No. 22, as refiled on April 12, 2018, and attached to the order
approving the settlement, does not accurately reflect the settlement terms the
parties to the settlement agreed on. Therefore, City Gas filed this petition to
revise tariff Sheet No. 22 to reflect the tariff that was originally included
in Hearing Exhibit 121. Tariff Sheet No. 22 addresses the utility’s allocation
of interstate pipeline capacity to its sales and transportation customers.
During the
review process of the current petition, staff issued one data request to the
utility, for which responses were received on November 6, 2019. The proposed
tariff sheet is shown in Attachment A to the recommendation. The utility waived
the 60-day file and suspend provision of Section 366.06(3), Florida Statutes
(F.S.), until December 10, 2019. The Commission has jurisdiction over this
matter pursuant to Sections 366.03, 366.04, 366.05, and 366.06, F.S.
Discussion
of Issues
Issue 1:
Should the Commission approve City Gas's proposed
changes to Tariff Sheet No. 22?
Recommendation:
Yes. The Commission should approve City Gas’s
proposed changes to Tariff Sheet No. 22. The proposed tariff should be
effective December 10, 2019. (Ward)
Staff Analysis:
In City Gas’s 2017 rate case, witness Becker testified
about the utility’s capacity on the interstate pipeline. Capacity is the amount
of space that City Gas has reserved on the Florida Gas Transmission (FGT)
interstate pipeline. The space on the interstate pipeline allows City Gas to
buy natural gas and transport it to their service territory. The cost of the
capacity, or the reservation fee, is paid to the interstate pipeline. City Gas
has firm capacity contracts with FGT that vary by season with the highest
capacity being held in the winter when customers require more natural gas.
Witness Becker further explained the difference between
sales and transportation customers. Sales customers are those customers who
receive their supply of natural gas from the utility. Transportation customers
are those customers who only contract for the transport of natural gas on City
Gas’s system, but do not get their supply of natural gas from the utility. City
Gas also defines a subset of Transportation customers known as Essential Use
Transportation (essential use) customers who require natural gas service for
health and safety reasons. City Gas asserted in the rate case that the utility
needs to hold capacity for the essential use customers as a backup supply,
because their needs are critical in nature. City Gas does not hold capacity for
non-essential use transportation customers as the third party gas marketer
supplying these customers with the gas commodity is responsible for making
capacity arrangements on FGT.
Tariff Sheet No. 22 addresses the utility’s allocation of
capacity to third party suppliers. City Gas stated in the instant petition that
the current tariff is not consistent with the negotiated rate case settlement
and does not provide clarity for when City Gas can release capacity to third
party marketers.
The proposed tariff language is designed to clarify the
process under which the utility will release capacity to third party marketers.
In general, capacity releases are posted on an electronic bulletin board
administered by FGT. Under the proposed tariff, City Gas may not release
capacity unless and until the utility holds sufficient capacity to serve its sales
and essential use customers. Once City Gas has enough capacity to serve 100
percent of the pipeline capacity necessary to serve its sales and essential use
customers, the utility will be required to release capacity. City Gas states
that this language is intended to ensure that essential use customers are
protected if their third party supplier is unable to deliver the gas. The
proposed language also ensures sales customers are not allocated additional
costs as a result of additional capacity being acquired to support the
utility’s transportation customers.
Conclusion
The signatories to the settlement were City Gas, the
Office of Public Counsel (OPC), and Federal Executive Agencies (FEA). The
utility stated that OPC has indicated that they do not oppose their request to
make this tariff correction and FEA has not responded. On November 19, 2019,
Commission staff also contacted FEA in regards to the tariff correction. FEA
has not yet responded to staff. Staff has reviewed City Gas’s filings and
supporting documentation and believes that the revisions to Tariff Sheet No. 22
are consistent with the settlement and with the tariffs entered into the rate
case record as Hearing Exhibit 121. Therefore, staff recommends approval of
City Gas’s amended Tariff Sheet No. 22. The proposed tariff should be effective
December 10, 2019.
Issue 2:
Should this docket be closed?
Recommendation:
Yes. If Issue 1 is approved and 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. (Lherisson)
Staff Analysis:
If Issue 1 is approved and 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.
