Case Background
On November 8,
2019, Florida Public Utilities Company (FPUC) and Florida Public Utilities
Company-Fort Meade (FPUC-Fort Meade) (collectively Companies) filed a petition for
approval of revised tariffs related to gas transportation nomination
methodology. The intent of the revised tariffs is to allow pool managers one
mid-month gas nomination change, no later than the 15th of each
month, to adjust the quantities of gas delivered to FPUC and FPUC-Fort Meade.
Gas is delivered
by the pool managers to the Local Distribution Company’s (LDC) gate station at
a constant level daily even though transportation customers’ daily therm usage
varies, creating negative or positive imbalances. At the end of each month, the
Companies calculate each pool manager’s imbalance level by aggregating customer
usage in their pool and comparing it to each pool manager’s natural gas
deliveries.
A negative
(short) imbalance results when the gas consumption of a transportation customer
pool exceeds what the pool manager delivered that month; therefore, the
Companies sell natural gas to the pool manager. A positive (long) imbalance
results when more natural gas was delivered than was needed for the
transportation customers; therefore, the Companies purchase the excess gas
delivered by the pool manager.
During the
review process of the petition, Commission staff issued a data request to the Companies,
for which the responses were received on December 19, 2019. The revised tariff
pages of FPUC are in Attachment 1 and revised tariff pages for FPUC-Fort Meade
are in Attachment 2 to this recommendation. On November 15, 2019, the Companies
provided a waiver of the 60-day file and suspend provision of Section 366.06(3),
Florida Statutes (F.S.), until the February 4, 2020 Agenda Conference. 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 FPUC and FPUC-Fort
Meade's revised gas transportation nomination methodology tariffs contained in
Attachments 1 and 2 to this recommendation?
Recommendation:
Yes, the Commission should approve FPUC and
FPUC-Fort Meade's revised gas transportation nomination methodology tariffs
contained in Attachments 1 and 2 to this recommendation. The proposed revisions
are designed to allow pool managers an additional opportunity during the month
to address their gas imbalances. The revised tariffs should become effective with
the Commission’s vote on February 4, 2020. (Guffey)
Staff Analysis:
Rule 25-7.0335, Florida Administrative Code
(F.A.C.), requires local distribution companies (LDCs), such as FPUC and FPUC-Fort
Meade, to make gas transportation service available to non-residential
customers. Transportation service is a voluntary program that allows customers to
use a pool manager, or third-party marketer/shipper, rather than the LDC, to supply
their natural gas requirements.
Both FPUC and FPUC-Fort Meade function as traditional LDCs
providing gas service for sales customers and provide optional transportation
service as required by Rule 25-7.0335, F.A.C.
Currently, there are 12 pool managers for FPUC and Fort Meade combined. The
transportation customers pay the pool manager’s charges for the supply of natural
gas and are not subject to the Companies’ Commission-approved Purchased Gas
Adjustment (PGA) rates. The Commission does not approve or review the natural
gas prices of third-party marketers.
In April 2019, the Commission approved tariff revisions,
which allowed FPUC and FPUC-Fort Meade to modify pool manager monthly imbalance
cash out tiers and the associated cash out rates.The imbalance tariffs apply to pool managers
who are responsible for purchasing natural gas for the Companies’
transportation customers. The intent of the April 2019 revisions was to
discourage pool managers from purchasing extra quantities of gas and then
selling the excess gas back to the Companies at the PGA rate.
In the instant docket, the Companies state that subsequent
to the above approval, pool managers expressed concern over the penalties pool
mangers may incur on their daily delivery quantities (DDQ) that are assigned to
the Companies. Currently, the tariff allows the Companies to assess a penalty for
pool managers who deliver more natural gas than what is consumed by the pool
managers’ customers, and the Companies must pay the pool mangers the full PGA
rate for the excess gas. Pursuant to the petition, the pool managers assert
that they lack the ability to avoid penalties described in FPUC Tariff sheet
No. 33.2 and FPUC-Fort Meade Tariff Sheet No. 52.1, because they do not have
the opportunity to adjust nominated quantities of gas during the month.
In order to remedy the pool managers’ concerns, FPUC and
FPUC-Fort Meade in the instant docket are proposing to allow pool managers one
mid-month nomination change, no later than the 15th of each month,
allowing them to adjust the quantities of gas delivered to the Company. The
proposed tariff revisions are to FPUC tariff sheets 33.1, 33.2, and 35.1 and
FPUC-Fort Meade tariff revisions are to sheets 52.1, 53, 53.1, and 60.
The proposed revisions also include requirements of
additional information to be provided by the pool managers twice a month to the
Companies such as customer name, pool manager account number, receipt location,
upstream and downstream delivery points, and quantity of gas for each
nomination. In responses to staff’s data request, the Companies stated that
such information is consistently required by other LDCs in Florida. The
Companies will notify all participating pool managers of the required
information which would become effective as of the first day of the month
following Commission approval. The revised tariff sheets are in Attachments 1
and 2 to this recommendation.
The Companies stated that they have communicated with the
pool managers about the requested tariff modifications and that the pool
managers have been receptive of the mid-month nomination change opportunity.
The Companies’ data responses also state that the Companies will notify all
participating pool managers about the requisite changes to be effective as of
the first day of the month following the Commission vote.
Conclusion
The requested tariff revisions are intended to provide the
pool managers an opportunity to make an intra-monthly modification (no later
than the 15th of each month) to the quantity of gas delivered to the
Companies pursuant to the daily delivery requirement methodology, thereby reducing
penalties for excessive gas purchased.
This proposed revision is consistent with Peoples Gas
System’s tariff which allows pool managers, by the 20th of each
month, to request an increase or a decrease in the quantity of gas delivered.
In light of the foregoing, staff recommends approval of
FPUC and FPUC-Fort Meade’s tariff modifications, as shown in Attachments 1 and
2 to this recommendation. The revised tariffs should become effective with the Commission’s
vote on February 4, 2020.
Issue 2:
Should this docket be closed?
Recommendation:
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.
