Following the leads of Atlanta Gas Light and National Fuel,Baltimore Gas & Electric (BGE) last week requested a 17-monthwaiver of FERC’s “shipper-must-have-title” policy in order tomaintain gas supply reliability when its customer choice program isexpanded to all of its 540,000 residential customers in November.

The FERC policy requires the holder of transportation andstorage capacity also hold title to the gas commodity. But thepolicy would be violated by BGE’s plan to maintain control over thetransportation and storage it allocates to marketers participatingin retail competition behind its Maryland citygate.

BGE has changed its delivery requirement for marketers to aDaily Requirement Service, in which marketers must match daily gassupply deliveries to the citygate with weather sensitive daily loadmeasurements. Transportation and storage capacity allocation tomarketers assures that the marketers will have the deliverycapability to meet peak winter needs. However, BGE argues it mustmaintain control over the allocated capacity to ensure reliabilitybecause “LDCs and pipelines have not yet developed administrativeand business systems necessary to support the full no-noticefeature of released or assigned storage service.” The no-noticeservice is essential in maintaining a balance of deliveries andactual customer usage.

BGE said it is working with Columbia Gas and CNG on new pipelineand storage services that address the “no-notice” problem, but asolution is not likely before the start of system-wide customerchoice in November.

“In CNG’s case, it’s a simple fact that they don’t allow thataspect of the service to be part of capacity release,” said AndrewMosier, BGE’s attorney. “Columbia’s tariff seems to imply that theydo [allow release of no-notice service] but apparently if one thentries to take them up on that you find out that the administrativesystems aren’t in place to implement it.”

Besides the administrative concerns, however, Mosier said BGEreally doesn’t like the idea of giving marketers access to releasedcapacity with no-notice service because the marketers could abusethat privilege. “Our concern is that the marketers not get releasedcapacity with no-notice capability that they then would be able totake to another citygate. We’re still responsible for gas flowingin Baltimore. [The marketers would be responsible] only bycontract, and if they make an economic decision that ‘I can gettwice in New York what I can get in Baltimore’ they may well takethat gas to New York.” Even though that may have repercussions ontheir ability to continue participating in the retail market inBGE’s territory, it still would leave BGE in the cold. “In themeantime what do we do. We have a gas shortage and our principlemeans of making that up, no-notice service, has gone awaysomewhere. We can’t allow that to happen. If the distributionsystem goes down it’s our problem. It’s our liability.”

Mosier said CNG is close to proposing a service that wouldcorrect this. It could involve minor tariff changes that wouldallow no-notice service to be released to marketers but be recalledby the releasing LDC if there was a delivery problem. “Columbia isnot as close to CNG, but we’re optimistic that they will come upwith something.

“We’re not trying to get FERC to beat these guys up. We reallybelieve they are trying to work with us. But there’s a littlepressure there now.” In the meantime, BGE needs a waiver of FERCpolicy to handle the situation when customer choice goessystem-wide this fall.

The Commission already has granted one-year waivers of thepolicy to Atlanta Gas Light and National Fuel for their customerchoice programs.

“We hope they grant this,” Mosier said. “Otherwise we’ll be in abit of a pickle on how to open our system.”

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