Subchapter G. NATURAL GAS DISTRIBUTION COMPANIES AND COMPETITION
Sec.
62.221. Purpose.
62.222. Definitions.
62.223. PTC.
62.224. POR programs.
62.225. Release, assignment or transfer of capacity.
Authority The provisions of this Subchapter G issued under sections 501, 1501 and Chapter 22 of the Public Utility Code (66 Pa.C.S. § § 501, 1501 and 2201—12), unless otherwise noted.
Source The provisions of this Subchapter G adopted April 13, 2012, effective April 14, 2012, 42 Pa.B. 2159, unless otherwise noted.
§ 62.221. Purpose.
To foster a competitive retail marketplace for natural gas service to customers eligible for SOLR Service, which is a class of customer that consists largely of residential and small business customers, it is essential that these consumers are able to compare the price of gas purchased from their incumbent NGDCs with that offered for sale by NGSs. This subchapter sets forth a number of regulatory changes which promote competition for natural gas supplies.
§ 62.222. Definitions.
The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:
Act—66 Pa.C.S. § § 2201—2212 (relating to Natural Gas Choice and Competition Act).
Base rate—The customer charge, distribution charge and other rates that are established in a Section 1308 proceeding under 66 Pa.C.S. § 1308 (relating to voluntary changes in rates).
Basic services—As defined in § 62.72 (relating to definitions).
GPC—Gas procurement charge—An element of the PTC, expressed on a per MCF or dekatherms (Dth) basis, that reflects an NGDC’s natural gas procurement costs and removed from the NGDC’s base rate and recovered through a separate charge.
MFC—Merchant function charge—An element of the PTC, expressed on a per MCF or Dth basis, that reflects the cost of uncollectibles associated with an NGDC’s natural gas costs.
NGDC—Natural gas distribution company—As defined in section 2202 of the act (relating to definitions).
NGS—Natural gas supplier—As defined in section 2202 of the act.
POR—Purchase of receivables—A program by which an NGDC purchases the accounts receivable of NGSs.
PTC—Price to compare—As defined in § 62.80 (relating to common natural gas competition terms).
SOLR—Supplier of last resort—As defined in § 62.101 (relating to definitions).
Small business customer—As defined in § 62.72.§ 62.223. PTC.
(a) The PTC rate must be expressed on a per MCF or dekatherms (Dth) basis and consist of the following elements:
(1) The natural gas supply charge determined in the NGDC’S Section 1307(f) proceeding, including the reconciliation for over and under collections.
(2) The GPC.
(3) The MFC.
(b) An NGDC shall file a tariff change under 66 Pa.C.S. § 1308(a) (relating to voluntary changes in rates) to identify the natural gas procurement costs included in its base rate and propose tariff revisions designed to remove those costs from its base rate and to recover those annual costs as part of the PTC (the GPC portion) on a revenue neutral basis.
(1) Natural gas procurement costs must include the following elements:
(i) Natural gas supply service, acquisition and management costs, including natural gas supply bidding, contracting, hedging, credit, risk management costs and working capital.
(ii) Administrative, legal, regulatory and general expenses related to those natural gas procurement activities, excluding those related to the administration of firm storage and transportation capacity.
(2) An NGDC’s natural gas procurement costs shall be updated in its next base rate case.
(c) An NGDC shall file an MFC rider. The MFC rider must remove the cost of uncollectibles applicable to natural gas costs from its distribution rates and recover those annual costs as part of the PTC on a revenue neutral basis.
(1) A write-off factor for each customer class is determined by dividing the uncollectible expense by revenues. This factor applied to the natural gas supply charge determined in the NGDC’s Section 1307(f) proceeding is the implementation MFC amount that must be removed from distribution rates on a revenue neutral basis.
(2) After implementation, unbundled distribution charges may not be adjusted for the write-off factor outside of a base rate case.
(3) The MFC for each customer class must be equal to the write-off factor times the natural gas supply charge determined in the NGDC’s Section 1307(f) proceeding and shall be updated quarterly to reflect new natural gas supply charges effective with each 1307(f) filing.
(4) The write-off factor shall be updated in an NGDC’s next base rate case.
(d) The GPC and MFC tariff riders must identify:
(1) How the surcharges are calculated.
(2) Which costs shall be recovered through the surcharge by:
(i) Customer class.
(ii) Federal Energy Regulatory Commission account number, including the specific subaccounts used to recover eligible procurement costs.
(e) The GPC and MFC are not subject to reconciliation for a prior period over or under collections.
§ 62.224. POR programs.
(a) Program design.
(1) An NGDC may purchase accounts receivable from licensed NGSs which operate on the NGDC system and who wish to sell their receivables.
(2) An NGS electing to sell its receivables to an NGDC shall include its accounts receivables related to choice residential and small business basic services in the POR program.
(3) An NGS shall only sell receivables associated with basic services and may not sell other receivables related to products and services sold in relation to basic services or in addition to basic services to the NGDC’s POR program. The NGS shall certify that charges do not include receivables for other products or services.
(4) To qualify for participation in an NGDC’s POR program, an NGS shall use consolidated billing from the NGDC unless the NGDC’s consolidated billing system cannot reasonably accommodate the NGS’s billings for basic services.
(5) An NGDC’s POR program shall use a discount rate designed to reflect the NGDC’s actual uncollectible rate for supply service customers and the incremental costs associated with the development, implementation and administration of the POR program.
(6) The POR discount rate must account for risk and cost differences among the NGDC’s customer classes.
(7) POR programs must, at a minimum, include receivables on residential and small business customer accounts.
(8) When an NGDC purchases accounts receivables from an NGS through a Commission-approved POR program and the accounts receivables are comprised only of charges for basic services, the NGDC may terminate service to customers for failure to pay NGS gas supply charges.
(9) To ensure that an NGDC’s affiliated suppliers do not receive an advantage over nonaffiliated suppliers, a POR program shall be designed and implemented in accordance with § § 62.141 and 62.142 (relating to standards of conduct).
(10) An NGDC POR program must be included in a supplier coordination tariff, as defined by Commission rules, regulations and orders, and approved by the Commission prior to implementation.
(11) To ensure that the POR discount rate accurately reflects its program costs, an NGDC shall track its POR program costs and NGS basic service collections experience. If the discount rate no longer reasonably compensates the NGDC for its POR program costs and collections experience, the NGDC shall file an update to the POR discount rate with the Commission.
(12) An NGS participating in an NGDC’s POR program may separately bill a customer for a specific service or product if that service or product does not meet the definition of basic natural gas supply service.
(13) An NGS participating in an NGDC’s POR program shall accept the customers responding to an offer included in the POR program without performing a credit check or requiring an additional security deposit from the customer.
(b) Customer care.
(1) An NGS shall follow Commission regulations relating to customer service including Chapter 56 and § § 62.71—62.80 and 62.114 (relating to standards and billing practices for residential utility service; customer information disclosure; and standards of conduct and disclosure for licensees).
(2) An NGS shall respond to customer complaints regarding rate disputes in less than 30 days consistent with § § 56.141, 56.151 and 62.79 (relating to dispute procedures; general rule; and complaint handling process).
(3) An NGDC shall follow 66 Pa.C.S. Chapter 14 (relating to responsible utility customer protection) and Chapter 56 when terminating service to a customer for failure to pay the NGS’s basic natural gas supply charges purchased under the POR program. An NGDC may terminate service to an NGS customer only for the customer’s failure to pay the portion of the accounts receivables purchased under the POR program that is comprised of charges for basic services.
(4) Reconnection of service to NGS customers following termination shall be made in accordance with 66 Pa.C.S. Chapter 14 and applicable regulations in Chapter 56.
(5) An NGDC shall agree to inform customers that service may be terminated for failure to pay NGS basic services charges by a separate bill insert that specifically describes the policy for termination of service.
(6) An enrollment letter issued by an NGDC at the time of selection of the NGS must inform customers that service may be terminated for failure to pay charges for basic services.
(c) Transition plan for existing POR programs.
(1) If the NGDC has an existing Commission-approved POR program that has a specific length of term, expressed in years or months, the Commission-approved POR program may continue until that term expires.
(2) The Commission will apply the POR program requirements in this section in its review of a new or updated POR program proposed by the NGDC.
(3) If the NGDC has an existing Commission-approved POR program without a defined term length, the NGDC shall update its POR program by April 14, 2015, to be consistent with this section.
§ 62.225. Release, assignment or transfer of capacity.
(a) An NGDC holding contracts for firm storage or transportation capacity, including gas supply contracts with Commonwealth producers, or a city natural gas distribution operation, may release, assign or transfer the capacity or Commonwealth supply, in whole or in part, associated with those contracts to licensed NGSs or large commercial or industrial customers on its system.
(1) A release, assignment or transfer must be made on a nondiscriminatory basis as to price, reliability and functionality.
(2) A release of an NGDC’s pipeline and storage capacity assets must follow the customers for which the NGDC has procured the capacity, subject only to the NGDC’s valid system reliability and Federal Energy Regulatory Commission constraints.
(3) A release, assignment or transfer must be based upon the applicable contract rate for capacity or Pennsylvania supply and be subject to applicable contractual arrangements and tariffs.
(4) The amount released, assigned or transferred must be sufficient to serve the level of the customers’ requirements for which the NGDC has procured the capacity determined in accordance with the NGDC’s tariff or procedures approved in its restructuring proceedings.
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