In an interim decision on retail gas competition last week,Connecticut regulators bowed to pressure from marketers by loweringbalancing penalties, allowing imbalance trading and ordering thestate’s three LDCs to provide a monthly economic comparison ofvarious cash-out methodologies.

The order issued Oct. 28 in dockets 95-02-07, 93-03-09 and92-02-19 installs daily balancing requirements for transportationservices to small industrial, commercial and multifamily dwellings.It also removes customer pooling restrictions, approves separatetariffs for marketers and end users, and simplifies transportationcustomer sign-up procedures and customer billing practices. TheConnecticut Department of Public Utility Control (DPUC) delayedimplementation of the new rules until Jan. 1 from Nov. 1 to giveall parties more time to adjust to the changes.

It was a big victory for retail marketers, particularly in thearea of penalties. Yankee Gas was proposing a $30/Dth penalty fordaily imbalances greater than 10%, while Connecticut Natural Gas(CNG) was proposing an initial penalty of $15/Dth with anescalation following each additional imbalance offense that reached$238/Mcf by the fifth imbalance. The DPUC, however, chopped downpenalties to only $5/Mcf, saying it was concerned they would stiflecompetition. No penalties will be charged on Southern ConnecticutGas’s (SCG) FT2 customers. The DPUC did say, however, marketerswith more than five imbalance violations in a year must sign up foran LDC’s stand-by balancing service.

The DPUC also revised the cash-out plans of the LDCs, sayingthere should be a monthly comparison to judge whether an LDC’s gascosts are reasonable. Some of the LDCs proposed charging theirhighest monthly gas cost to marketers with underdeliveries andpaying their lowest monthly gas costs to marketers whooverdelivered. Marketers requested published price indexes be usedinstead.

The marketers still are not satisfied with the resolution of thecash-out issue. The Connecticut agency will be monitoring theresults and expects to eventually choose just one procedure. Rocco Canonica

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