The New York State Public Service Commission (PSC) will hold a series of public forums Nov. 14, 15 and 16 in Steuben County to explain recent actions regarding Corning Natural Gas Corp.'s inadequate preparations for the winter heating season. Two weeks ago the commission called on other state gas utilities to provide supply to Corning on a mutual-aid assistance basis, and ordered the small investor-owned utility to show cause why a temporary operator should not be appointed for it (see NGI, Oct. 31).
Based on this year's annual review of utility preparedness, PSC staff expressed concern about Corning's ability to provide adequate service to its customers throughout the winter season. Staff's concerns stemmed from the combination of significantly higher gas costs, the company's cash-flow situation, and its failure to procure fixed-price commodity hedges and to adequately fill storage on a timely basis. Staff said it is concerned about Corning's service reliability and estimates that its customers may experience winter bills that are 55% higher than last year, compared to statewide average bill impacts of 30-45%.
The commission said it would prefer that Corning enter into a voluntary mutual aid agreement with another utility as soon as possible to avoid the need for a commission determination. New York utilities have a procedure in place to share gas supplies during certain operational contingencies. Thursday's commission action would build on that procedure by extending the period of assistance through the entire winter and expanding the scope to cover financial emergencies.
During the public forums, PSC staff will give a presentation on the most recent actions taken to help the utility better prepare to serve its 14,500 gas customers in Upstate New York. Corning has a 400-square-mile gas distribution territory including 15 townships located in the Finger Lakes area of the Southern Tier of New York State.
The PSC said Corning apparently failed "to adhere to its own plan for securing natural gas supplies, as well as the procurement practices encouraged by the [PSC's] 1998 statement of policy on gas procurement.
"The guidelines in the commission's policy statement were developed to shield customers from price volatility and, had they been followed by Corning, the cost of natural gas reflected in customers' bills this winter would likely be lower than current projections," the commission said in a statement on Wednesday.
PSC staff is investigating the management of Corning to "identify steps that must be taken to better manage the company's fiscal operations and practices for securing natural gas supplies." The commission ordered Corning to show cause why a temporary operator should not be appointed.
Letters were mailed during the week to all Corning customers advising them of these developments and the public forums in the Corning region. The meetings are scheduled in Corning, Addison and Bath. For more information, consumers can check the commission's consumer website at www.AskPSC.com or call toll-free at (877) 772-2789.
The commission's show cause order regarding Corning in Case 05-G-1268, can be obtained from the commission's website at www.dps.state.ny.us.
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