BGE Seeks FERC Waiver for Customer Choice
Following the leads of Atlanta Gas Light and National Fuel,
Baltimore Gas & Electric (BGE) last week requested a 17-month
waiver of FERC's "shipper-must-have-title" policy in order to
maintain gas supply reliability when its customer choice program is
expanded to all of its 540,000 residential customers in November.
The FERC policy requires the holder of transportation and
storage capacity also hold title to the gas commodity. But the
policy would be violated by BGE's plan to maintain control over the
transportation and storage it allocates to marketers participating
in retail competition behind its Maryland citygate.
BGE has changed its delivery requirement for marketers to a
Daily Requirement Service, in which marketers must match daily gas
supply deliveries to the citygate with weather sensitive daily load
measurements. Transportation and storage capacity allocation to
marketers assures that the marketers will have the delivery
capability to meet peak winter needs. However, BGE argues it must
maintain control over the allocated capacity to ensure reliability
because "LDCs and pipelines have not yet developed administrative
and business systems necessary to support the full no-notice
feature of released or assigned storage service." The no-notice
service is essential in maintaining a balance of deliveries and
actual customer usage.
BGE said it is working with Columbia Gas and CNG on new pipeline
and storage services that address the "no-notice" problem, but a
solution is not likely before the start of system-wide customer
choice in November.
"In CNG's case, it's a simple fact that they don't allow that
aspect of the service to be part of capacity release," said Andrew
Mosier, BGE's attorney. "Columbia's tariff seems to imply that they
do [allow release of no-notice service] but apparently if one then
tries to take them up on that you find out that the administrative
systems aren't in place to implement it."
Besides the administrative concerns, however, Mosier said BGE
really doesn't like the idea of giving marketers access to released
capacity with no-notice service because the marketers could abuse
that privilege. "Our concern is that the marketers not get released
capacity with no-notice capability that they then would be able to
take to another citygate. We're still responsible for gas flowing
in Baltimore. [The marketers would be responsible] only by
contract, and if they make an economic decision that 'I can get
twice in New York what I can get in Baltimore' they may well take
that gas to New York." Even though that may have repercussions on
their ability to continue participating in the retail market in
BGE's territory, it still would leave BGE in the cold. "In the
meantime what do we do. We have a gas shortage and our principle
means of making that up, no-notice service, has gone away
somewhere. We can't allow that to happen. If the distribution
system goes down it's our problem. It's our liability."
Mosier said CNG is close to proposing a service that would
correct this. It could involve minor tariff changes that would
allow no-notice service to be released to marketers but be recalled
by the releasing LDC if there was a delivery problem. "Columbia is
not as close to CNG, but we're optimistic that they will come up
"We're not trying to get FERC to beat these guys up. We really
believe they are trying to work with us. But there's a little
pressure there now." In the meantime, BGE needs a waiver of FERC
policy to handle the situation when customer choice goes
system-wide this fall.
The Commission already has granted one-year waivers of the
policy to Atlanta Gas Light and National Fuel for their customer
"We hope they grant this," Mosier said. "Otherwise we'll be in a
bit of a pickle on how to open our system."
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