Retail Marketers Score In Connecticut Ruling
In an interim decision on retail gas competition last week,
Connecticut regulators bowed to pressure from marketers by lowering
balancing penalties, allowing imbalance trading and ordering the
state's three LDCs to provide a monthly economic comparison of
various cash-out methodologies.
The order issued Oct. 28 in dockets 95-02-07, 93-03-09 and
92-02-19 installs daily balancing requirements for transportation
services to small industrial, commercial and multifamily dwellings.
It also removes customer pooling restrictions, approves separate
tariffs for marketers and end users, and simplifies transportation
customer sign-up procedures and customer billing practices. The
Connecticut Department of Public Utility Control (DPUC) delayed
implementation of the new rules until Jan. 1 from Nov. 1 to give
all parties more time to adjust to the changes.
It was a big victory for retail marketers, particularly in the
area of penalties. Yankee Gas was proposing a $30/Dth penalty for
daily imbalances greater than 10%, while Connecticut Natural Gas
(CNG) was proposing an initial penalty of $15/Dth with an
escalation following each additional imbalance offense that reached
$238/Mcf by the fifth imbalance. The DPUC, however, chopped down
penalties to only $5/Mcf, saying it was concerned they would stifle
competition. No penalties will be charged on Southern Connecticut
Gas's (SCG) FT2 customers. The DPUC did say, however, marketers
with more than five imbalance violations in a year must sign up for
an LDC's stand-by balancing service.
The DPUC also revised the cash-out plans of the LDCs, saying
there should be a monthly comparison to judge whether an LDC's gas
costs are reasonable. Some of the LDCs proposed charging their
highest monthly gas cost to marketers with underdeliveries and
paying their lowest monthly gas costs to marketers who
overdelivered. Marketers requested published price indexes be used
The marketers still are not satisfied with the resolution of the
cash-out issue. The Connecticut agency will be monitoring the
results and expects to eventually choose just one procedure.
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