Docstoc

Comments

Document Sample
Comments Powered By Docstoc
					                             PENNSYLVANIA
                      PUBLIC UTILITY COMMISSION
                     Harrisburg, Pennsylvania 17105-3265


                                              Public Meeting held April 13, 2000


Commissioners Present:

       John M. Quain, Chairman
       Robert K. Bloom, Vice Chairman
       Nora Mead Brownell
       Aaron Wilson, Jr.
       Terrance J. Fitzpatrick


Compliance Filing of PG Energy, Inc. for Approval                     Docket No.
of its Restructuring Filing Pursuant to the Natural Gas               R-00994783
Choice and Competition Act


                       OPINION AND ORDER
              ON PG ENERGY, INC.’S COMPLIANCE FILING


BY THE COMMISSION:


              On February 1, 2000, PG Energy, Inc., a division of Southern Union
Gas Company, filed its compliance tariff (Supplement No. 2 to Southern Union
Tariff Gas Pa. P.U.C. No. 3) and supplier tariff (Southern Union Tariff Gas Pa.
P.U.C. No. 5) in compliance with 66 Pa. C.S. §§2201, et. seq. Natural Gas
Competition and Pennsylvania Public Utility Commission Order at Docket No. R-
00994783 entered January 18, 2000. The initial effective date of April 1, 2000 for
the compliance tariff and supplier tariff has been voluntarily postponed until April
14, 2000.
                     I. HISTORY OF THE PROCEEDING


              On August 2, 1999, PG Energy, Inc. (PG Energy or Company) filed
its Restructuring Plan pursuant to Chapter 22 of the Public Utility Code, 66 Pa.
C.S. §2201, et. seq. (The Natural Gas Choice and Competition Act, or Act). This
filing included the information required by the Commission in an order entered
July 16, 1999 at Docket No. M-00991249, as well as testimony, exhibits and a
proposed tariff.


              By Hearing Notice dated August 2, 1999, a prehearing conference
was scheduled for August 10, 1999 and the proceeding was assigned to
Administrative Law Judge Marlane R. Chestnut for investigation and scheduling
of hearings to determine whether PG Energy’s Restructuring Plan complies with
the standards set forth in the Public Utility Code.


              The active parties in this proceeding, in addition to the Company,
were the Office of Trial Staff (OTS); Office of Consumer Advocate (OCA); Office
of Small Business Advocate (OSBA); PECO Energy Company (PECO); Proctor &
Gamble Paper Products Company (Proctor & Gamble); Pennsylvania Petroleum
Association jointly represented with the Small Customer Marketing Coalition
(PPA/SCMC); Conectiv Energy and Enerval L.L.C. (jointly Enerval); the AFL-
CIO Gas Utility Caucus (AFL-CIO Caucus); PP&L EnergyPlus Co., L.L.C.
(PP&L EnergyPlus); and the Commission on Economic Opportunity (CEO).


              The inactive parties in this proceeding included T.W. Phillips Gas &
Oil Company (T.W. Phillips); Shell Energy Services Company, L.L.C. (Shell);
Reliant Energy Retail, Inc. (Reliant); Texas Eastern Transmission Corporation
(Texas Eastern); Statoil Energy Services, Inc. (Statoil); TXU Energy Trading


                                          2
Company (TXU); UGI Utilities, Inc.-Gas Division (UGI); UGI Energy Services,
Inc. (UGI Energy); National Fuel Gas Distribution Corporation (NFG); United
Gas Management, Inc. (UGM); and the National Energy Marketers Association
(NEMA).


              The PGE Industrial Intervenors (PGEII) initially was active, but
withdrew as a party on September 15, 1999.


              The Commission by Order entered August 12, 1999 granted a
Petition for Extension of the Procedural Schedule that had been jointly filed by
OCA, OTS, OSBA, and PGEII on August 5, 1999. Petitions for Clarification of
that Order were filed by PG Energy on August 17, 1999 and jointly by OCA, OTS
and OSBA on August 25, 1999. By Order entered August 30, 1999, the
Commission confirmed that the extended litigation schedule was applicable to this
proceeding.


              The initial prehearing conference was held as scheduled on August
10, 1999. A second prehearing conference was held on August 13, 1999.


              A hearing was held on November 10, 1999, at which time the parties
discussed settlement. Any active party not attending the hearing was deemed to
approve of and acquiesce in the settlement.


              Following intense negotiations and discussions on all the issues
identified by the parties a Settlement Agreement was reached. On November 23,
1999, a Joint Petition for Settlement of Restructuring Filing (Petition) was filed.
Signatories included PG Energy, OCA, OSBA, OTS, Proctor & Gamble,
TXU/Statoil, and CEO (joint petitioners). Attached to the Petition were
statements in support of the proposed settlement from PG Energy, OCA, OSBA


                                          3
and Proctor & Gamble. Also attached were statements of non-opposition from
Enerval, the AFL-CIO Caucus and PECO. A separate statement in support was
filed by OTS. A letter of support was filed by CEO, and letters indicating non-
opposition were filed by PPA/SCMC and Texas Eastern.


              On December 2, 1999, the proposed settlement was approved by
ALJ Chestnut in her Recommended Decision. The Commission, by Order of
January 18, 2000, adopted the ALJ’s Recommended Decision and directed the
Company to file a tariff reflecting the terms of the Settlement Agreement to be
effective on April 1, 2000.


              On February 1, 2000, and in accordance with the Commission’s
January 18, 2000 Order, the Company filed its Supplier Tariff and the Compliance
Tariff. By letter dated February 1, 2000, the Company sought an extension of the
Comment period set forth in the Commission’s regulations.


              Comments to the Company’s Compliance Tariff and Supplier Tariff
were filed by Conectiv on February 11, 2000 and March 14, 2000. The OCA
filed comments on February 22, 2000. On March 20, 2000, Statoil Energy
Services, Inc. and TXU Energy Trading Company (Statoil/TXU) filed joint
comments applicable to the Company’s Supplier Tariff and Communication
Protocols. Reply comments were filed by the Company on February 22, March 3,
and March 27, 2000.




                                         4
                       II.     LATE FILED COMMENTS

              PG Energy has requested that the Commission strike comments filed
by Statoil/TXU, as they were filed late. The forty five (45) day comment period
ended on March 17, 2000 and the Statoil/TXU comments were filed on March 20,
2000.


              In light of the fact that Statoil/TXU’s comments were filed only days
after the end of the comment period, and since this is one of the initial gas
restructuring case compliance filings, we feel it is important for us to consider all
comments. Therefore, we will allow Statoil/TXU’s late filed comments to be
considered in the context of this case. We note that the inclusion of these late filed
comments should not be construed as a blanket allowance for late filed comments
in future cases.


                      III. COMPLIANCE TARIFF ISSUES


A. Definitions


              The OCA comments that the Company’s definition section of its
current tariff should be expanded to include definitions that would aid customers
or other interested parties in understanding the services and options being offered
by the Company in the new context of unbundling and customer choice in natural
gas supply service.

              The OCA points out that many terms need to be defined or redefined
in the tariffs in order to make the tariffs reflective of the restructured environment.
The OCA submits that the Company should endeavor to produce definitions with a
view to making specialized terms more understanding to the general public.




                                           5
             The following are definitions, which the OCA believes should be
added or revised to the Company’s tariff:

             Applicant- Any person, corporation or other entity that (i) desires
      from the Company natural gas or any other service provided for in this
      Tariff at a specific location, (ii) complies completely with all Company
      requirements for obtaining natural gas or any other service provided for in
      this Tariff, (iii) has filed and is awaiting Company approval of its
      application for service and (iv) is not yet actually receiving from the
      Company any service provided for in this Tariff at such location. An
      Applicant shall become a Customer for purposes of this Tariff only after it
      actually starts receiving the applicable service(s) from the Company under
      this Tariff.

            Burner Tip- The point at which natural gas is used such as a
      furnace, water heater or range.

             ccf- 100 cubic feet of gas. This is a measure of gas usage.

             Chapter 56- The PUC regulations that govern metering, billing and
      collections for residential gas and electricity service.

           City Gate- The point where interstate pipelines deliver gas into the
      Company’s facilities.

             Combined Billing- The aggregation of the billing determinants of
      two or more meters of the same Customer at the same location for billing
      purposes.

             Commission- The Pennsylvania Public Utility Commission or any
      lawful successor thereto.

             Company- PG Energy, a Division of Southern Union Company.

              Customer- Any person, partnership, association, corporation, or
      other entity (i) in whose name a service account is listed, (ii) who occupies
      or is the ratepayer for any premises, building, structure, etc. or (iii) is
      primarily responsible for payment of bills. A Customer includes anyone
      taking Supplier of Last Resort Service and/or Distribution Service under
      this Tariff.




                                         6
      Customer Charge- A monthly charge to cover such Company costs
as maintaining the gas lines, meter reading and billing.

       Distribution Charges- Charges to recover the costs the Company
incurs to provide the services necessary to deliver natural gas to a customer
from the point of receipt into the Company’s distribution system.
Distribution charges typically include, among other charges, Customer
Charge, and Gas Cost Adjustment Charge.

       Dth (Dekatherm)- A measure of the heat content value of gas. Gas
usage is determined by multiplying the Mcf used by the heat content value
of the gas.

       Gas Cost Adjustment Charges- The amount billed or credited each
month to account for differences between projected and actual gas supply
cost of the Supplier of Last Resort.

       Mcf- 1,000 cubic feet of gas. This is a measure of gas usage.

        Natural Gas Supplier (NGS)- Any person, corporation or other
entity that has received a license from the Commission determining that it
is eligible and licensed to supply natural gas supply services to Customers
in the Company’s service territory under and pursuant to the Act and that
has met the additional criteria established by the Company to permit it to
provide natural gas supply service to Customers.

        Supplier of Last Resort- The Company or another entity that
provides natural gas supply services to customers that do not elect another
supplier or choose to be served by the supplier of last resort, customers that
are refused service from another natural gas supplier, or customers whose
natural gas supplier fails to deliver the required gas supplies. Currently, the
Company is the supplier of last resort for all customers under the terms of
this tariff. Each customer may only have one supplier of last resort.

       Supplier of Last Resort Service Charge- A charge that includes
Distribution Service Charges and Gas Supply or Commodity Charges
provided by the Company as the Supplier of Last Resort.

       Gas Supply or Commodity Charge- Charges by an NGS or
Supplier of Last Resort to recover the cost of procuring natural gas and
delivering it to the Company’s facilities for redelivery to Customers.




                                   7
              The Company counsels against the inclusion of the definitions
presented by the OCA for a number of reasons. First, the Company comments that
the inclusion of these definitions was not contemplated in the settlement
agreement approved by the Commission where these matters should have been
raised.

              Second, the Company points out that several of the OCA’s suggested
definitions (burner tip, Chapter 56, combined billing, distribution charges, gas cost
adjustment charges, supplier of last resort service charge, and commodity charge)
are terms that are not employed in Tariff No. 3. Third, PG Energy believes that
there is a more effective way of supplying these definitions to customers in order
to meet the OCA’s goals than through the end-user tariff. PG Energy notes that it
is currently developing “how-to-shop” materials that will contain a glossary of
common natural gas competition terms. The Company explains that these terms,
and their definitions, will be those set forth in Appendix B to the Commission’s
October 15, 1999 Order in Re: Interim Customer Information Disclosure
Requirements for Natural Gas Distribution Companies and Natural Gas Suppliers,
Docket No. M-00991249F0005. The Company in its comments notes that twelve
of the OCA’s definitions will be presented to customers in the same language as
proposed by the OCA for almost all of the definitions. The Company comments
that excluding the definitions for terms not included in Tariff No. 3, almost all of
the terms will be presented to customers either in Tariff No. 3 or in the how-to-
shop information.

Resolution


              We agree with the OCA that the list of definitions suggested by the
OCA would aid customers or other interested parties in reviewing the tariff in the
context of the restructuring environment presented by customer choice and



                                          8
therefore direct the Company to include OCA’s list of definitions in Tariff No. 3
for those terms which are included in the tariff.


B. Rule 1.4- The Gas Service Tariff


              The OCA submits that tariffs will increasingly be reviewed by
individual consumers who have interest in tariff information because of the
introduction of a competitive market for natural gas supply services. Therefore,
the OCA believes the Company should make it clear that the tariff is readily
available to consumers with access to the Internet. The OCA comments that Rule
1.4 should be amended to include notice that the Company’s tariff is available for
review by accessing the Company’s website. In addition, the OCA contends that
the Company’s website address should be included in the tariff.


              The Company comments that even though this issue is beyond the
terms of the settlement, the Company has already put the compliance tariff and the
supplier tariff on its website. Thus the Company agrees to note in its tariff that it
is accessible on the website.


Resolution


              We direct the Company to note in its tariff that it is accessible on the
website. In addition, we direct the Company to include its website address in its
tariff.

C. Rule 3.1- Requirements for Service


              The OCA submits that the application with the Company is critical
to the introduction of new customers to the availability of choice in natural gas


                                           9
supply. Therefore, the OCA comments that it is critical that the application
process introduce customers to, and facilitate, customer choice.

              The OCA points out that the Commission’s Order in Re: Guidelines
for Maintaining Customer Service, Docket No. M-00991249F003 (Order entered
August 27, 1999) provides that:

              NGDCs shall continue to handle applications for new residential
              service, including the actual physical installation and/or connection
              of service, and shall provide a process for new applicants to select an
              alternative NGS for supply service. The procedures should
              guarantee that all suppliers receive uniform treatment by the NGDC
              relative to the applicant’s selection of a supplier. The procedures
              should conform to applicable guidelines or requirements that result
              from the work product of the Code of Conduct Working Group.
              Some applicants will know their choice of supplier at the time of
              application. Other applicants may require a list that contains an
              objective, unbiased presentation of available suppliers. The
              procedures should also include a method for providing an applicant,
              if necessary, with supply on an interim basis until they choose a
              long-term supplier.

              The OCA submits that the tariff should address the procedures
outlined in the Commission’s Order. In order to achieve the directives of the
Commission in the Order referenced above, the OCA suggests the inclusion of the
following language in Rule 3.1 on Application for Service:

              All Applicants desiring any type of service from the Company under
              this Tariff shall contact the Company and specifically request the
              type and nature of service. The Company will inform the customer
              of the identity of those Natural Gas Suppliers offering retail service
              in its service territory and provide a list of licensed suppliers. In any
              circumstance where an application to the Company for any service
              under this Tariff involves or is related to an NGS, such application
              cannot and shall not be processed by the Company unless the
              Applicant and the Applicant’s NGS provides the necessary
              information relating to service.



                                          10
              A Non-Residential Applicant for any service under this Tariff may
              be required to sign an application and/or contract for natural gas
              service. However, the Company may, in its sole discretion, accept
              an oral application from a Non-Residential Applicant.

              The Company shall accept an oral application from a Residential
              Applicant except that the Company may require a written application
              from a Residential Applicant if positive identification is necessary.

              Upon the receipt of natural gas service, the Applicant shall become a
              Customer of the Company.

              The Customer shall inform the Company in advance of any proposed
              additions to (or decreases in) the Customer’s connected natural gas
              load.

              The minimum term of contracts for any type of natural gas service
              under this Tariff shall be as stated in the applicable Rate
              Schedule(s).

              The OCA submits that the Company should also include under its
current Rule 3.1 regarding Application for Service, a reference to Rule 12 on the
Code of Conduct and Rule 13 on Changing Natural Gas Suppliers.

              PG Energy notes that Supplement No. 2 already contains the
information necessary to meet the Commission’s requirements and agrees to cross
reference the sections that contain this information in Rule 3.1. The Company
contends that this will ameliorate the OCA’s apparent concerns while at the same
time not requiring an unnecessary rewrite of Rule 3.1.


Resolution


              We will not adopt the specific language recommended by the OCA.
We believe that with the revisions for cross references agreed to by the Company,
PG Energy’s tariff will provide sufficient information.



                                         11
D. Rule 4- Deposits


              The OCA submits that the Company’s right to obtain a deposit from
a residential customer should reflect the policy that the amount of the deposit
should be based on regulated charges only. The OCA recommends the following
language be added to the tariff in order to clarify the deposits issue and provide
customers with notice regarding the protections provided to customers by the
Commission in Chapter 56 of its regulations:

              A deposit from a Residential Ratepayer shall conform to the
              requirements of Chapter 56 of the Commission’s rules. Deposits
              required by the Company for Tariff regulated charges shall not be
              based on unpaid supplier charges.


              The Company submits that it has no problems with the additional
language that the OCA has recommended.


Resolution

              Since the Company has commented that they agree to the
recommended language of the OCA, we direct the Company to revise its tariff to
include the language suggested by the OCA.


E. Rule 8- Billing Procedures


              The OCA comments that pursuant to the Act, customers have two
billing options: (1) a consolidated Company bill that includes charges from the
natural gas supplier of the customer’s choice, and (2) two bills, one each from the
Company and the NGS. The OCA submits that these options should be explained




                                         12
clearly, in the Company’s tariff. The OCA suggests that language should be
added to Rule 8 of the tariff to explain these options to customers as follows:

              Billing Options. The Company will offer two billing options: (1)
              the issuance of a bill by the Company which contains the NGS
              charges in a format that complies with the Commission’s Customer
              Information and Disclosure Guidelines; or (2) the issuance of a bill
              that contains only the Company’s charges, in which case the NGS
              will bill the customer separately for NGS charges. The conditions
              under which the Company will exchange data with the NGS to
              effectuate either of these billing options will be set forth in more
              detail in the Supplier Agreement.

              With regard to levelized billing, the OCA submits that the
Company’s tariff must clearly indicate that customers may continue to receive
budget billing for their entire bill even if they take service from an NGS. In order
to achieve this the OCA suggests adding the following language to the tariff:

              Levelized Billing. At the request of a residential customer, the
              Company shall estimate the Customer’s total charges for natural gas
              service for a twelve (12) month period including Levelized Billing
              for NGS charges. At the request of a Distribution Service
              Residential Customer, the Company shall estimate the Customer’s
              Distribution Service Charges for a twelve (12) month period. A
              Levelized Bill for approximately one-twelfth (1/12) of such estimate
              shall be rendered monthly by the Company subject to a monthly
              amount to be paid by the Customer. The Company shall reflect any
              and all billing charges adjustments for the Customer’s actual usage
              during the full twelve (12) month on the final bill for the period.
              When a Customer desires Levelized Billing over an initial period of
              less than twelve (12) months, the estimated total charge during such
              period shall be divided by the number of months in the period and
              billed accordingly. If a Customer fails to pay an outstanding bill by
              the time its next monthly bill is rendered, the Company may, in its
              sole discretion, terminate that Customer’s Levelized Billing
              arrangements.

              PG Energy submits that the language additions raised by the OCA
are contrary to the settlement and are not reflective of the Company’s budget


                                         13
billing program. Furthermore, the Company submits that it has met the terms of
the settlement and that the OCA’s requested language violates the settlement since
it desires to alter PG Energy’s budget billing program.


Resolution


              We agree with the Company that Section III of the settlement
provides that the Joint Petitioners agreed to resolve all issues, one of which was
that the tariff shall provide procedures for the continuation of budget billing in
cooperation with NGSs. The settlement, which we approved, did not require the
alteration of PG Energy’s current budget billing program. Therefore, Rule 8 need
not be revised to include the additional language recommended by the OCA.
Several of the proposals made by the OCA may be addressed in the Commission’s
proposed rulemaking at L-00990143, M-00991249F0007 regarding Recovery of
Natural Gas Costs and the Fixed Rate Option.


F. Rule 9- Payment


              The OCA submits that the Company’s tariff should contain a section
which clearly reflects the Commission’s determination regarding the allocation of
partial payments as set forth in the Commission’s Order in Re: Guidelines for
Maintaining Customer Service, Docket No. M-00991249F003 (Order entered
August 27, 1999).

              With regard to late payment charges, the OCA submits that such
charges on NGS balances should only be assessed where the customer has agreed
to pay those late charges as part of its agreement with the NGS. In order to clarify
the issue, the OCA suggests including the following language to the Company’s
tariff:


                                          14
               Late payment charges shall be applied to all charges when the
               Company is providing Supplier of Last Resort service and to the
               Service Charge and Distribution Charges when the customer has
               selected an NGS. The Company will apply late payment charges to
               NGS charges at the NGS’s request when it is performing billing
               services for the NGS and such late payment charges are part of the
               Terms of Service between the NGS and the customer.

               The OCA also believes the tariff should contain a description of the
type of payment arrangements the Company offers and information on how to take
advantage of such arrangements. The OCA also recommends that the Company
include in its tariff a description of its Customer Assistance Program (CAP) and
information on how eligible low income customers can take advantage of the CAP
program.


               The Company comments that Section III.8.A of the Joint Petition
approved by the Commission contains the Company’s commitment to comply
with final Commission Orders and regulations in the area of consumer protection
and related issues. The Company submits that Section III.8.N of the Joint Petition
states that in the event of a conflict between the Commission’s then current
guidelines or regulations on these issues and the procedures contained in the
Company’s tariff, the Commission’s guidelines (where mandatory) shall apply,
unless an exception or waiver has been granted PG Energy.


               The Company believes that it is counter productive to turn the tariff
into an encyclopedia by including detailed descriptions of every aspect of all its
customer protection activities. The Company argues that most customers do not
consult the tariff itself.




                                          15
Resolution


              We agree that the Company’s tariff should contain a section which
clearly reflects the Commission’s determination regarding the allocation of partial
payments as set forth in the Commission’s Order in Re: Guidelines for
Maintaining Customer Service, Docket No. M-00991249F003. We therefore
direct PG Energy to revise its tariff to include the recommended language
proposed by the OCA. However, we will not adopt the OCA’s recommendations
regarding the types of payment arrangements, inclusion of the Customer
Assistance Program and information on how eligible low income customers can
employ the Customer Assistance Program. We agree with the Company that the
tariff would become impossible to administer with every change in the Company’s
CAP program or possible payment arrangements.


G. Rule 10- Termination of Service

              The OCA comments that its main concern regarding termination is
that customers not be terminated for failure to pay gas supply charges to an NGS,
and that restoration of service not be conditioned on the customer’s payment of
gas supply charges. The OCA submits that termination and restoration
requirements will apply regardless of whether the Company purchases the NGS’s
receivables. Also, the OCA contends that proper notice be given to the customer
regarding possible termination due to a delinquent bill.

              PG Energy submits that in conformance with Section III.8.H of the
Joint Petition, PG Energy’s Rule 10.4.1a provides that the Company shall not
terminate or threaten termination of service to a customer for nonpayment of
natural gas supply charges where the Company has purchased the customer’s
receivables from a supplier.



                                         16
              With regard to the OCA’s contention that proper notice be given to
the customer regarding termination due to a delinquent bill, the Company notes
that it has committed to meet the requirements of applicable Commission orders.


Resolution


              With regard to Rule 10, we believe that PG Energy is in
conformance with Section III.8.H of the Joint Petition and therefore no revisions
to the Company’s tariff are necessary applicable to termination of service for
nonpayment of natural gas supply charges where the Company has purchased the
customer’s receivables from a supplier.

              With regard to the issue of proper notice given to the customer
regarding termination due to a delinquent bill, we direct PG Energy to include
language in its Rule 10 which notifies customers that it will comply with the
Commission’s Order at Docket No. M-00991249F003 (Order entered August 27,
1999) Re: Guidelines for Maintaining Customer Service.


H. Rule 13- Customer Dispute Procedures


              The OCA recommends that the Company include the following
language to further clarify the inquiry and complaint procedures:

              Inquiries and complaints from any customer will be received and
              processed in a timely manner. Residential customer inquiries and
              complaints will be handled in conformance with Chapter 56 of the
              Commission’s Rules. When a customer inquiry or complaint relates
              to services provided by an NGS, the Company will refer the
              customer to the NGS for a response. If the customer inquiry or
              complaint involves issues or services provided by both the Company
              and the customer’s NGS, the Company will maintain a system of


                                          17
                tracking and coordinating the response to the customer inquiry or
                complaint from both parties. If a customer is dissatisfied with the
                Company’s response, or indicates dissatisfaction with the NGS
                response to the customer with respect to the NGS service, the
                Company will inform the customer of the right to file an informal
                appeal with the Bureau of Consumer Services at the Commission
                and provide the customer with the toll-free telephone number and
                mailing address of the Commission.

                PG Energy submits that it has met the requirements of the settlement
at Section III.8.M and the Commission’s Order at Guidelines for Maintaining
Customer Service Quality. The Company comments that the OCA’s suggested
language is already included in the tariff (Rule 14.2) and therefore no further
modifications should be required. The Company in its comments suggests that it
has met the requirements of the settlement regarding customer dispute resolution
in Rule 14.2.


Resolution


                Rule 13 deals with Changing Natural Gas Suppliers. The OCA’s
recommended tariff language applies to all types of disputes between a customer,
the Company and/or a Natural Gas Supplier. Therefore, it would be inappropriate
to place this proposed tariff language in Rule 13. The Company contends that it
has essentially met the OCA request in its proposed Rule 14.2 Complaint
Handling Process. While the proposed language in Rule 14.2 appears reasonable,
it fails to provide much of the information suggested by the OCA. We believe that
this information should be provided. Therefore, we direct the Company to revise
Rule 14.2 to incorporate the language recommended by the OCA.




                                           18
I. Rule 14- Miscellaneous Information (Historical Data, Privacy Rights)


              The OCA suggests that Rule 14.1 be amended to provide that
historical usage data may be provided to customers at no cost once per calendar
year. The OCA submits that the Company should clearly reflect in the tariff that
the obligation to provide historical usage information to customers at no cost once
per calendar year is an obligation of the Company.


              PG Energy suggests the following language to address the OCA’s
suggestion with regard to historical data:


              14.1 Customer Information Request
                    Efficiency information materials can be obtained by customers
                    directly from the Pennsylvania Public Utility Commission or
                    by contacting the Company. Upon reasonable request by the
                    Customer, the Company will provide Customers with
                    historical billing and usage information which is readily
                    available to the Company once a year at no cost. The
                    Company will notify customers via bill messages that
                    efficiency information and Customer historical billing and
                    usage information is available upon request.

              The OCA comments that PG Energy’s tariff should clearly indicate
the provisions of Section VIII of the Commission’s Order in Customer
Information Disclosure Requirements, supra. regarding customer privacy rights.
The OCA submits that the tariff should state the Company’s obligation to inform
its customers of the release of customer specific information, the manner in which
the customer may prevent the release of this information, and who will have
access to any customer lists created.


              PG Energy agrees with the OCA and suggests the following new
Rule 14.4:


                                         19
             14.4 Third Party Information Release
                   The Company may release, but is not obligated to release,
                   certain private Customer information to a third party and only
                   after informing Customers of its intent to release such
                   information. Each Customer may notify the Company of their
                   desire to permit or restrict the release of that private
                   information. Customers may request to restrict the release of
                   information at any time and the Company shall then honor that
                   request until and unless the Customer requests otherwise.
                   Customers may restrict information according to one of the
                   following two restrictions: (1) restrict the release of only the
                   Customer’s historical billing data in $/ccf, or (2) restrict the
                   release of all private Customer information including name,
                   billing address, service address, rate class, rate schedule,
                   account number and historical billing data in $/ccf. Under no
                   circumstance will the Company release Customer telephone
                   numbers.

             The OCA points out that the Company’s tariff contains many pages
where the name of the Company appears as Pennsylvania Gas and Water
Company. The OCA suggests the Company make the appropriate corrections
throughout the tariff wherever the Company name is incorrect.


             PG Energy agrees with the OCA that corrections to the Company
name should be made wherever necessary throughout the tariff.


Resolution


             We will adopt the OCA’s recommendation. We direct PG Energy to
include in its tariff the Company’s suggested language regarding historical
information. Furthermore, we direct PG Energy to include in its tariff the
Company’s suggested language regarding third party information release. Finally,
we direct the Company to make the appropriate corrections throughout the tariff to
the Company name.


                                        20
J. Rate FTS (Firm Transportation Service)


              Conectiv Energy (Conectiv) comments that PG Energy’s compliance
tariff makes several modifications to its rate FTS, a service already the subject of
over 10 years of competition. Conectiv submits that through this change the
Company has severely restricted preexisting competition. Conectiv points out that
the Company is proposing to increase the volumetric limit under which customers
can choose FTS service, thus limiting the number of customers who are able to
take advantage of this service option.


               Conectiv contends the Company did not comply with the
Commission’s tariff change notification requirements using the (c) notation which
signifies a change.


              Conectiv states that a review of the “Availability” provisions of Firm
Transportation Service indicates that the Company has altered the eligibility
requirements of this rate schedule. Conectiv notes that the Commission’s
eligibility requirements for Rate FTS Service are: (i) a 5,000 Mcf minimum, and
(ii) the ability of other non-rate FTS customers to be part of a Transportation
Group. Conectiv submits that the Company’s existing tariff provisions do not
comport with these Commission regulations.


              Conectiv comments that PG Energy has proposed to alter its FTS
Service to change the volumetric minimums and also deleted the provision of the
tariff which would allow a GS customer to join with other FTS customers to form
a “Group”. In addition, Conectiv notes that the language of the last sentence of
the availability portion of rate FTS appears to preclude future customers from
receiving service pursuant to this rate schedule.


                                          21
              PG Energy submits that in its original restructuring filing it proposed
that existing Rate Schedule FTS be available at one location to any municipal,
commercial or industrial customer who used in excess of 10,000 Mcf in the future.
The Company points out that this represented a change from the current FTS
availability, which contained a minimum consumption of 5,000 Mcf or greater,
either individually or as a member of a tariff-defined buyer group.


              Additionally the Company submits that the Availability section for
FTS service in PG Energy’s restructuring filing, contained language
grandfathering FTSs customers served prior to April 1, 2000, the proposed
implementation date for PG Energy’s customer choice. The Company contends
therefore, those FTS customers with annual usage between 5,000 Mcf and 10,000
Mcf were unaffected by the proposed change.


              PG Energy comments that the restructuring filing contained a new
Rate Schedule GTS (General Transportation Service) to provide customer choice
to municipal, commercial or industrial customers. The Company points out that
this new schedule was proposed to be available to customers whose total
requirements at one location did not exceed a maximum individual annual usage
of 10,000 Mcf during the previous contract period, or a Company estimated usage
in the future not exceeding 10,000 Mcf. The Company claims that the filing
expanded choice for those customers by establishing a tariff with essentially no
minimum volume requirement. PG Energy submits that Rate Schedule FTS was
retained for those customers with usage in excess of 10,000 Mcf.


              The Company comments that no party to the case filed testimony or
challenged the availability requirements of either Rate Schedule FTS or the new
Rate Schedule GTS. The Company submits that Conectiv’s challenge to a portion
of the tariff raised for the first time in Comments to the compliance filing violates


                                          22
the Commission’s regulations and should be dismissed. Furthermore, the
Company avers that its tariffs are in full compliance with the Commission’s
transportation regulations and the Act and therefore, no basis exists for the relief
sought by Conectiv.


              PG Energy submits that Conectiv’s attack on Supplement No. 3
violates the Commission’s regulations and therefore should be dismissed. The
Company contends that the Commission has already approved the change to the
minimum volume associated with Rate Schedule FTS service.


Resolution


              We agree with PG Energy that Conectiv did not raise this issue in
the case and it has for the first time challenged the Availability section of Rate
Schedule FTS. We also agree that PG Energy’s structuring of Rate Schedule FTS,
along with the addition of Rate Schedules RTS and GTS, fully advances the Act
by providing customer choice to residential and small commercial customers,
while at the same time meeting the Commission’s transportation regulations.


              We further note that it appears that Rate Schedule RTS does provide
choice for residential customers as a member of a pool. The schedule contains no
volumetric or limits in the number of the pool. As pointed out by the Company,
Rate Schedule GTS provides choice to municipal, commercial or industrial
customers with usage of less than 10,000 Mcf, who are members of a pool and
pools may contain RTS and GTS customers under the proposed supplier tariff.
Additionally, customers served under Rate Schedule FTS prior to April 1, 2000,
who do not meet the minimum usage requirements, will continue to qualify for
service under Rate Schedule FTS.



                                          23
                               IV. SUPPLIER TARIFF ISSUES


A. Introductory Provisions


              The OCA comments that the Company’s Supplier Tariff lacks
essential introductory material. The OCA points out that in the Electric
Generation Supplier Coordination Tariff of PECO Energy Company, PECO sets
forth information regarding the correct use of the Tariff, application of the Tariff,
allowable revisions of the Tariff, and the scope and purpose of the Tariff. The
OCA submits that such information should be included in PG Energy’s Supplier
Tariff.


              PG Energy comments that the information that the OCA suggests be
included in the Supplier Tariff is unnecessary.


Resolution


              While we may agree with the OCA position that these additions to
the tariff may be helpful and informative, we do not believe that the Company’s
proposed tariff is unreasonable in that it fails to address these introductory matters.


B. Definitions


              The OCA submits that the Company should include definitions of
the terms “natural gas supplier” and “supplier of last resort” in its proposed
Supplier Tariff since these terms are used throughout the Supplier Tariff.


              PG Energy agrees that definitions of the terms “natural gas supplier”
and “supplier of last resort” should be included in the Supplier Tariff.


                                          24
Resolution


              We direct PG Energy to include definitions of the terms “natural gas
supplier” and “supplier of last resort” in the Company’s Supplier Tariff.


C. Rule 1.1 Qualifications of Pool Operators


              Conectiv comments that PG Energy attempts to control who is to
provide competitive service to the customers within its monopoly distribution
system service territory. Conectiv submits that the Company mistakenly believes
that §2208(c)(1)(i), which permits a natural gas distribution company to propose
the “criteria” each natural gas distribution company would use to determine “the
amount and form of the bond” also permits it to determine whether a potential
supplier meets those benchmark criteria.


              PG Energy submits that it is not determining the financial fitness of
natural gas suppliers in order to “control” who is to provide competitive service to
customers. The Company comments that it has enumerated creditworthiness
procedures in order to satisfy the system reliability requirements of the Act.


              The Company points out that section 2203(12) of the Act, 66 Pa.
C.S. §2203(12), provides that the Commission shall adopt such Orders or
regulations as necessary and appropriate to ensure that NGSs meet their supply
and reliability obligations, including but not limited to establishing penalties for
failure to deliver natural gas and revoking licenses.


              PG Energy submits that section 2208(c)(1) of the Act, 66 Pa.C.S.
§2208(c)(1), states as follows, in pertinent part, relative to NGS requirements:



                                           25
              In order to ensure the safety and reliability of the natural gas supply
              service in this Commonwealth, no natural gas supplier license shall
              be issued or remain in force unless the applicant or holder, as the
              case may be, complies with all of the following:

              (1) Furnishes a bond or other security in a form and amount to
              ensure the financial responsibility of the natural gas supplier. The
              criteria each natural gas distribution company shall use to determine
              the amount and form of such bond or other security shall be set forth
              in the natural gas distribution company’s restructuring filing. In
              approving the criteria, commission consideration shall include, but
              not be limited to, the financial impact on the natural gas distribution
              company or an alternative supplier of last resort of a default or
              subsequent bankruptcy of a natural gas supplier. (Emphasis
              supplied.)

              PG Energy submits that the focus of the Act, and the General
Assembly’s intent, is to provide for customer choice while maintaining the
reliability of the system. The Company believes its supplier tariff clearly acts to
advance the goal as enumerated by the Act.


              The Company comments that Conectiv’s legal view of the Act is
fallacious and that Rule 1.1 is appropriate. The Company believes that Conectiv’s
position is based upon language that is no longer in the tariff.


Resolution


              We will not adopt Conectiv’s proposed interpretation of the Act
concerning a natural gas distribution company’s ability to develop financial
responsibility criteria. The Act clearly calls upon the natural gas distribution
companies to establish such criteria during the restructuring process. In addition,
the Act allows for negotiations between the suppliers and the natural gas
distribution companies. The Act also allows the Commission to adopt criteria.
We also note that in the event that a supplier believes that the Company has


                                          26
applied its criteria in a discriminatory fashion or otherwise acted improperly with
respect to its criteria, the supplier may petition the Commission for relief under
Section 2208 ( c ) of the Public Utility Code, 66 Pa. C. S. § 2208 ( c ).


D. Rule 1.1.3- Pool Operator Obligations


              Conectiv objects to the Company's proposal to require "re-
certification" for each supplier on an annual basis. Conectiv argues that the
Company has established its own annual reporting requirements at great cost and
expense to the suppliers.


              Statoil/TXU states that Pool Operators should not have the
obligation to annually update financial information especially because the
Company requires the reporting of any "significant deterioration in its financial
fitness or creditworthiness". Statoil/TXU argues the annual updating requirement
is a market barrier.


              PG Energy submits that the Natural Gas Choice and Competition
Act and the Commission’s Orders allow PG Energy to require additional security
from natural gas suppliers on its system.


Resolution


              We will not adopt the position recommended by Conectiv and
Statoil/TXU. We believe that it is reasonable to require Pool Operators to re-
examine the issue of financial fitness on a regular basis. We have required
licensed Electric Generation Suppliers to re-examine and renew their bonds or
other financial guarantees on an annual basis.



                                            27
E. Rule 1.1.4- Evaluation Process to Determine Creditworthiness


              The OCA comments that this provision states that PG Energy will
base its evaluation of a Pool Operator’s creditworthiness on the financial
information provided by the Pool Operator or contained in the Operator’s license
application. The OCA further points out that the Company shall perform such
evaluation on a non-discriminatory basis and shall have sole discretion to
determine creditworthiness of a Pool Operator. In addition, the OCA submits that
the Company will determine the amount and form of security, if any, that is
required of the Pool Operator, but will not deny creditworthiness without
reasonable cause. The OCA submits that this provision should be modified.


              First, the OCA comments that the Company states that it will base its
evaluation on “financial information” provided by Pool Operators. The OCA
contends that this provision must be revised, replacing the listing of financial
information with relevant substantive criteria, i.e., what exactly satisfies PG
Energy’s creditworthiness standards.


              Second, the OCA points out that this provision states that the
Company will have “sole discretion” as to whether a security is required and in
what amount. The OCA comments that this language further emphasizes the
open-ended nature of this Rule. The OCA submits that Rule 1.1.4 should be
modified to provide an accurate description of the Company’ s creditworthiness
standards. The OCA also states that once these standards have been identified, the
question of the extent of PG Energy’s discretion in these analysis should be
considered.


              Conectiv also contends that PG Energy attempts to usurp the
Commission’s authority as evidenced in the Company’s Rule 1.1.4.


                                          28
              Conectiv submits that the Commission retain the ability to fine a
NGS and/or cancel its license in much the same manner as it may fine PG Energy
or cancel its Certificate of Public Convenience.


              PG Energy submits that latitude must exist in determining
creditworthiness standards as long as that latitude is properly administered. The
Company points out that the OCA offered no criteria to be employed in Rule 1.1.4
in its comments as well as during the collaborative process. In addition, the
Company submits that no natural gas supplier in the case has suggested any
criteria.


              In lieu of the April 1, 2000, deadline to implement its customer
choice program, PG Energy comments that there is not sufficient time to identify
specific criteria and then consider the question of PG Energy’s discretion in these
analysis after that determination.


              PG Energy submits that the Act does not require such financial
guarantees from NGDCs. In addition, the Company comments that NGSs have
the ability to bill their customers directly, thereby negating any need for NGDCs
to provide financial guarantees.


Resolution


              We believe that the financial criteria for Pool Operators as shown in
Rule 1.1.5 is sufficient. The Natural Gas Supplier must demonstrate the financial
ability to meet these criteria. In certain circumstances the Pool Operator may be
required to provide a bond, security deposit or letter of credit to meet these
financial requirements. While we would also prefer to have specific criteria cited,


                                          29
we recognize that the Act offers significant latitude for the Company and the
Commission in these matters. We believe that this latitude may be necessary to
allow additional competitors into the marketplace. Furthermore, we recognize that
it is the Company who faces the primary financial risks from a Natural Gas
Supplier’s default.


F. Rule 1.1.5- Additional Proof of Creditworthiness


              The OCA requests that Rule 1.1.5 be modified to expand the form of
security required to include amounts necessary to protect customers of Pool
Operators. The OCA states that PG Energy should require a performance bond or
equivalent security from all suppliers to protect customers who may be owed
supplier funds (deposits or restitution payments as ordered by the Commission) or
to pay fines and penalties for violation of consumer protection rules, also as a
result of a Commission order.


              The OCA submits that since the interim natural gas licensing rules
do not result in any security held by the Commission directly, it is vital that the
NGDC require every supplier to provide a performance bond or equivalent
security interest that is payable upon order of the Commission or payable directly
to the Commission. The OCA suggests that the performance bond should be
reviewed and redetermined annually. Furthermore, the OCA comments that since
all electric suppliers have posted a bond or equivalent security payable to the
Commission in the range of $250,000, the OCA indicates that it seems reasonable
to assume that this proposal can be implemented for a relatively small additional
cost to the natural gas suppliers.


              Statoil/TXU submit that incremental forms of security (Section
IIA5) afford PG Energy an ability to require more of marketers than does the


                                          30
Commission in its licensing process and thereby creating a further barrier to
supplier participation.


              PG Energy contends that the Act, unlike the Electricity Generation
Customer Choice and Competition Act, does not require that any security be held
by the Commission in the name of the Commonwealth.


              The Company indicates that it is unclear from the OCA’s Comments
whether the performance bond for customers is a separate bonding requirement or
whether it is inclusive with the bonding requirement to protect PG Energy. PG
Energy’s concern with this proposal is that PG Energy should not be exposed to
risk in essentially being a conduit for a performance bond or equivalent security
interest in the name of the Commonwealth.


              PG Energy comments that it could only be comfortable with such a
situation if it was ordered to do so by the Commission, if the arrangement did not
impose any additional risk on PG Energy, and if it was clear that its discretion
concerning creditworthiness and bonding requirements for non-Commonwealth
purposes was not impaired.


Resolution


              We will not adopt the OCA's proposal. We believe that it would be
difficult to estimate the amount of bonding or financial security necessary to
compensate customers for refunded deposits or to pay Commission imposed fines.
Invariably there would be discrepancies between the estimated and actual
amounts. Furthermore, the estimations could appear to be arbitrary and may lead
to further litigation. In addition, we are concerned that we might impose
additional start-up costs that would discourage potential competitive Natural Gas


                                         31
Suppliers from providing services within the Commonwealth. Also, we believe
that it may not be unreasonable for the Company to require FTS marketers to
provide incremental forms of security as proposed by the Company.


G. Rule 1.2- Communications Protocol


                The OCA suggests that certain provisions of the Communications
Protocol dealing with partial payments, availability of customer lists and customer
confirmation should be included in the supplier tariff. The OCA also requests that
PG Energy should be required to propose rules dealing with vital customer
information, and that the Commission should approve, reject or modify said rules.


                Conectiv submits that the Commission should adopt a policy that
encourages PG Energy to work with parties to attempt to develop statewide
standards relative to Communications Protocol. Conectiv comments that PG
Energy’s tariff language does not result in any degree of confidence or certainty to
the communication process being contemplated by PG Energy.


                Statoil/TXU believes that the Communications Protocol should
apply to all NGSs and not just to NGSs providing service to RTS and GTS
customers.


                PG Energy comments that it has arrived at an extensive
Communications Protocol which is not a formal part of the tariff. The Company
states that inclusion of the Communications Protocol in the tariff would hamstring
the ability of the Company and other parties to make necessary changes on a
timely basis.




                                          32
              PG Energy submits that it has reflected the Commission’s
requirements in the areas mentioned by OCA, and has developed an extensive
Communications Protocol that has received no adverse comments from NGSs.


              PG Energy submits that it is on record as supporting efforts to
standardize certain matters attendant to communications protocols, and that it is
unnecessary to order PG Energy to commit to a statewide uniform
communications protocol.


              PG Energy contends that there are separate and different
requirements under the Supplier Tariff for suppliers serving FTS customers which
are not germane to the majority of the provisions of the communication protocols.


              The Company disagrees with Statoil/TXU’s contention that
“standards” are not included in the Communications Protocol. PG Energy
contends that the Communications Protocol contains standard data formats to be
used for all electronic communications between the Company and suppliers in the
section titled “Customer Billing Information.”


Resolution


              We will adopt the recommendation of the OCA regarding the
customer/billing information and the confidentiality of customer information. We
believe that this information has been reasonably included in the PECO Supplier
Tariff. We direct the Company to amend their tariff to include comparable
customer/billing information and the confidentiality of customer information. We
will not adopt Conectiv’s proposals to require, in effect, that the communications
protocols become part of the tariff. As the competitive marketplace develops, we
anticipate that these communication protocols will evolve. Their inclusion in the


                                         33
tariff may add to the delay in implementing new solutions to communication
problems and may add to administrative costs which cause resistance to needed
changes.


              We agree with Statoil/TXU's position that the Communications
Protocol should apply to all Natural Gas Suppliers. We direct the Company to
amend the tariff language accordingly.


H. Rule 1.3- Right of First Refusal


              Conectiv comments that PG Energy’s Rule 1.3 currently provides
that PG Energy may, upon cessation of service by a NGS, take capacity secured by
a NGS from a third party to serve any customers returning to PG Energy’s
Supplier of Last Resort service. Conectiv submits that during the course of the
discussions relative to this issue between PG Energy and Suppliers, Conectiv
believes a consensus opinion was reached. However, Conectiv avers that the
broad language contained in the tariff does not reflect that agreement.


              Conectiv states that the wording of the proposed tariff is such that
the Company would have the right of first refusal of all capacity, whether that
capacity was being used to serve the Company's customers or not. Conectiv
recommends that the Company should only possess a right of first refusal on any
capacity dedicated to serving customers on the Company's distribution system.


              PG Energy states that it will add the phrase “to serve a pool” to
clarify the meaning of the Rule.




                                         34
              However, PG Energy submits that it does not believe that it is
appropriate to place a thirty (30) day “notice period” on obtaining additional
capacity to replace the pool operator’s capacity.


Resolution


              We agree that the proposed tariff language could be read to allow the
Company rights to capacity that was not needed in order to provide service to the
Company's customers. We believe that PG Energy’s proposal to add the phrase
“to serve a pool” reasonably clarifies this Rule. We direct the Company to revise
its tariff language accordingly. We will not adopt Conectiv’s suggestion to limit
the Company’s ability to utilize the capacity for a 30 day period.


I. Rule 1.5- Miscellaneous


              Conectiv comments that PG Energy, in its Rule 1.5.1, is proposing
to eliminate the option that an FTS customer, and up to nine other GS or RS
customers could qualify for a “Pool”. Conectiv submits that nowhere in the
Commission’s regulations is reference made that a “Pool” must be made up of
different classes of customers.


              The OCA submits that Rule 1.5.3 provides excessive unilateral
authority to PG Energy. The OCA states that the authority to suspend a Pool
Operator’s ability to serve it customers, while also requiring the Pool Operator to
inform its customer to choose another provider, should remain with the
Commission. The OCA submits that the Company should not have sole authority
to unilaterally determine whether or not a Pool Operator is allowed to continue
transportation service on the Company’s system. In addition, the OCA suggests



                                         35
that when a Pool Operator is suspended, it should be PG Energy’s responsibility to
inform customers of what has happened and their options at that point in time.


               Statoil/TXU argues that the third subparagraph gives the Company
the right to discontinue an NGSs’ right to transport on PG Energy’s system for not
maintaining the requirements for transportation service. Statoil/TXU comment
that this blanket authority should include definitive standards and due process
rights.


               PG Energy comments that Rule 1.5.1 provides that each pool
operator shall assign its customers to a pool, and a customer may not belong to
more than one pool, even though a pool operator may administer more than one
pool. Furthermore, the Company points out that a pool shall be restricted to
customers receiving service under the same rate schedule, with the exception that
a pool may include customers receiving service under Rate Schedules RTS and
GTS. The Company submits that Rule 1.5.1 provides that a pool may contain
Rate Schedule RTS and GTS customers, or a pool may contain Rate Schedule FTS
customers, but a pool may not contain RTS and FTS customers, or GTS and FTS
customers.


               The Company disagrees with Conectiv’s argument that there can be
no distinction among transportation customer classes that restrict which operator
pool those customers may be members of under the existing transportation
regulations.


               PG Energy submits that Conectiv’s misplaced attack on Rule 1.5.1 is
based on the current Rate Schedule FTS provision in PG Energy’s tariff. The
Company argues that since the current Rate Schedule FTS, in Conectiv’s view,
meets the Commission’s transportation regulations, the apparent legal conclusion


                                         36
drawn by Conectiv is that Rule 1.5.1 cannot meet the regulations since it differs
from current Rate Schedule FTS.


              The Company submits that Rate Schedule FTS does not allow for
buyer pools consisting of Rate Schedule FTS and Rate Schedule GS customers.
The Company points out that one is a transportation service and one is a retail
sales service. Furthermore, the Company submits that there are no current
transportation buyer groups that contain Rate Schedule RS customers since they
are not eligible for inclusion in Rate Schedule FTS buyer groups. The Company
comments that what may exist today are buyer groups of Rate Schedule FTS
customers and Rate Schedule FTS customers only, thus Conectiv’s supposition
that Rule 1.5.1 eliminates existing options for transportation customers to be in
various pools is incorrect.


              PG Energy argues that neither the Act nor the Commission’s
regulations require that the Company provide pools that are inclusive of all
transportation rate classes. The Company comments that no current Rate Schedule
FTS customer is harmed since those with usage of 5,000 Mcf or greater are
grandfathered within the class.


              Finally, the Company points out that it agreed to discuss with parties
in the future Stakeholder Collaborative Group earmarked by the Joint Settlement
the issue of the inclusion of Rate Schedule FTS customers within Rate Schedule
RTS and GTS pools.


              PG Energy agrees with the OCA that there should be access
provided to the Commission in the situation where the Pool Operator fails to
maintain the requirements for transportation service and fails to correct such
failure. The Company believes that any onus in such situations properly rests with


                                         37
the Pool Operator and not with PG Energy, as the OCA suggests. PG Energy
recommends the following revised language for Rule 1.5.3:


             Transportation service will be made available to the Pool and its
             Pool Operator within thirty (30) days from the acceptance of a Pool
             Operator’s Pool list. If at any time a Pool Operator fails to maintain
             the requirements for transportation service, the Pool Operator will be
             notified by the Company. Except in the event of an emergency that
             threatens the integrity of the Company’s system, a Pool Operator
             will have five calendar days to remedy any such failure. If the Pool
             Operator has not taken corrective action within the time period
             prescribed, the Company may notify the Pool Operator that the Pool
             Operator is suspended from providing transportation service; said
             suspension to become effective in ten (10) days. Any Pool Operator
             so notified may petition the Commission for an Emergency Order
             requesting a stay of said suspension, pursuant to the regulations of
             the Commission. Absent a stay, a suspension will become
             permanent after 45 days unless the Pool Operator remedies the
             failure which occasioned the suspension, and provides reasonable
             assurances to the Company that such failure will not occur in the
             future. A Pool Operator that has been suspended from providing
             transportation service must immediately stop the transportation of
             natural gas and notify Pool members that they must select another
             Pool Operator or return to the supplier of last resort.


Resolution


             We agree with Conectiv that the Company's proposed language
appears to violate the Commission's regulations at 52 Pa. Code §60.3 by restricting


                                         38
different classes of customers from participating in a "Pool". Therefore we direct
the Company to resubmit its proposed tariff language to comply with the
Commission's regulations on this matter.


              We will agree to allow the Company to adopt its alternative
language for Rule 1.5.3. We believe that the process described in the alternative
Rule 1.5.3 should allow sufficient time for a Pool Operator to take corrective
action or, if necessary, bring the matter at issue before the Commission.


J. Rule 2.1- Company Obligations (Applicable Rules and Regulations)


              Statoil/TXU recommend that there be specific reference in the
Supplier Tariff to the Commission’s regulations with regard to interactions with
non-regulated affiliates. Also, Statoil/TXU argue that the Company should be
required to list the Commission’s affiliate Standards of Conduct in this Supplier
Tariff. Statoil/TXU submit that there should be an explicitly stated obligation to
conduct the quarterly Stakeholders’ Collaborative as was agreed to in the
Settlement Principles filed in November and approved by the Commission.
Statoil/TXU argue that the Company should be required to treat all marketers
fairly and to transmit data to marketers on a timely and accurate basis.


              With regard to the Statoil/TXU suggestion that PG Energy include
the Standards of Conduct that regulate interaction with the non-regulated affiliates
in its Supplier Tariff, PG Energy believes that this is not necessary. The Company
points out that these rules are in Rule 12.




                                          39
Resolution


              We will not adopt the recommendations of Statoil/TXU. These
standards are already included in the Company’s tariff. Duplication of the
standards is not necessary.


K. Rule 2.4- Complaint Handling and Resolution


              The OCA points out that this rule reads:


              The Company shall comply with all applicable Pennsylvania Public
              Utility Commission rules and regulations relating to Customer
              complaints, including informing Customers of their rights to contact
              the Commission.


              The OCA comments that specific procedures are necessary to deal
with customer complaints. The OCA believes that PECO Energy Company’s
Electric Generation Supplier Coordination Tariff can be used as a starting point to
determine the roles to be played by the Company and an NGS in the event of a
consumer complaint. The OCA points out that the Company should submit
similar language to PECO’s Supplier Tariff, which is specific in nature.

              PG Energy notes that NGSs, through the Act, are subject to Chapter
56 of the Commission’s regulations. The Company contends that the NGSs
familiarity with these regulations needs no enhancement. Finally, the Company
submits that it is not necessarily a satisfactory result for the Company to be
aggressively inserted between the customer and the NGS.




                                          40
Resolution
              We will adopt the recommendation of the OCA in this matter. We
believe that inclusion of this language will ensure that the Company, suppliers and
customers understand the sequence of events which will take place in the event of
a dispute. We direct the Company to amend its tariff language to incorporate the
specific information recommended by the OCA and as found in the PECO Energy
Company, Tariff Electric Pa. P.U.C. No. 1S.


L. Rule 4- Force Majeure


              Conectiv submits that nowhere in the Supplier Tariff is PG Energy
required to notify a NGS of a force majeure event that occurs on its distribution
system, as opposed to the interstate pipeline system, that would prevent the
supplier’s customers from obtaining their supply from their supplier. Further,
Conectiv notes that nowhere within the Supplier Tariff is PG Energy required to
even make a reasonable effort to avoid the adverse impact of a force majeure event
and to resolve the event or occurrence; or to reimburse a NGS for all costs and or
penalties incurred as a result of PG Energy's inability to deliver gas furnished for a
supplier’s customers at the PG Energy city gate.


              Conectiv suggests the following language:


              The Company shall make reasonable efforts to avoid the adverse
              impact of a force majeure event on its distributions system and to
              resolve the event of occurrence, if possible, once it has occurred, in
              order to effectuate deliveries. The Company shall immediately
              notify all Pool Operators should a force majeure event occur on the
              Company’s distribution system. The Company shall indemnify and
              hold the Pool Operator harmless for all costs and penalties incurred


                                          41
              by the Pool Operator as a result of the Company’s failure to remedy
              the force majeure event as soon as practical.


              PG Energy disagrees with Conectiv and submits that the supplier
tariff already protects NGSs and that reciprocal language in Rule 4 is unnecessary.


Resolution


              We will not adopt language proposed by Conectiv concerning Force
Majeure events which may occur on the Company's distribution system. Without
further analysis and argument, we do not believe that Conectiv has adequately
demonstrated the need for this "reciprocal" proposal. Should the Company fail to
meet its duty to provide safe and adequate service consistent with its duty under
the Public Utility Code, suppliers may seek appropriate relief.


M. Rule 5- Operational Flow Orders


              The OCA submits that the following language should be inserted
after the first sentence of the second paragraph in Rule 5:


              Customers or Pool Operators serving Customers under Schedules
              RTS or GTS may also be required to increase their daily deliveries
              pursuant to Rule 8.3 (.1). Customers or Pool Operators serving
              Customers under Schedule FTS may alternatively be required to
              adjust their deliveries or usage so that daily usage does not exceed
              daily deliveries.


              Statoil/TXU comment that there should be included in this Supplier
Tariff a System Alert in which PG Energy will request specific action(s) of
marketers and/or customers to alleviate or ameliorate conditions which could



                                         42
cause a system emergency requiring the declaration of an OFO. Statoil/TXU
submit that the Company’s OFO language is lacking since it does not require
NGSs or customers to immediately balance on a daily basis delivered gas volumes
with gas volumes consumed.

              PG Energy comments that it has reviewed OCA’s recommended
language and agrees that it would be an appropriate addition.


              With regard to Statoil/TXU’s comments, PG Energy submits that the
language currently contained in the Supplier Tariff is more than adequate for PG
Energy to manage the system to prevent OFOs in the first place, and to adequately
manage OFOs should they be required.


Resolution


              We note that the Company has agreed with the OCA's proposed
additional language for Rule 5. We believe that this language should be adopted.
We direct the Company to include the OCA's recommended language in Rule 5.


              We also will adopt the recommendation to create a System Alert as
proposed by Statoil/TXU. We believe that the Company should provide suppliers
with an opportunity to alter their operations in order to avoid the declaration of an
Operational Flow Order. We direct the Company to modify the language of Rule
5 to incorporate a System Alert process.


N. Rule 6- Retainage


              Conectiv comments that pursuant to Rule 6, PG Energy will retain a
percentage of the gas delivered for lost or unaccounted for gas and a percentage of


                                           43
gas delivered for fuel shrinkage. Due to penalties that may be imposed, Conectiv
requests that it be notified when the percentage changes. Accordingly, Conectiv
suggests the following language be added to Rule 6:


              The Company shall inform all Pool Operators providing service on
              its system of any changes in the lost and unaccounted for percentage
              or fuel shrinkage percentage. No penalty shall be assessed against
              any Pool Operator if underdelivery or overdelivery of supply occurs
              due to the failure of the Company to inform a Pool Operator of such
              change.

              PG Energy submits that its lost or unaccounted for gas percentage
changes every six years, and the Company posts that change, therefore, there is
little urgency surrounding this percentage. The Company argues that no rationale
exists for further notification requirements.


              With regard to pipeline contracts, the Company, under its customer
choice program, submits that it will allocate pipeline storage capacity to NGSs.
The Company points out that the NGS for shrinkage purposes becomes a party to
the pipeline contract and should be aware of the workings of those contracts. PG
Energy argues that there is no reason why it should be required to notify an NGS
of pipeline contract shrinkage changes for contracts allocated to the NGS.


Resolution


              We will adopt the recommendation made by Conectiv pertaining to
changes in the percentage of gas loss for unaccounted for gas and the percentage
of shrinkage. We believe that this is important information that must be conveyed
to each supplier. We direct the Company to amend Rule 6 to include the specific
language recommended by Conectiv concerning these matters.



                                          44
O. Rule 7.1- Rate Schedule FTS Availability


               Conectiv has filed comments to the general tariff regarding FTS
service and wishes to incorporate those comments into the Supplier Tariff relative
to FTS service.


               Conectiv urges the Commission to enforce its regulations and
require PG Energy to reinstate the FTS provisions deleted or altered by PG Energy
as a result of this restructuring filing.


               Conectiv also argues that the proposed tariff for rate GTS customers
provides for no transportation rate differential for Pennsylvania produced gas, as is
required by the Commission's regulations. Conectiv also objects to the zero
tolerance balancing mechanism that would be imposed upon the rate RTS and
GTS customers.


               Statoil/TXU question the need for a separate Transportation
Agreement. They argue that forcing certain customers to sign additional contracts,
which other transportation customers are not required to sign, creates additional
administrative burdens on all the parties involved.


               PG Energy comments that no existing Rate Schedule FTS customer
is affected by the filed tariffs. The Company points out that customers served
under existing Rate Schedule FTS prior to April 1, 2000 who do not meet the
10,000 Mcf minimum usage requirement were grandfathered and will continue to
qualify for service under Rate Schedule FTS.




                                            45
                PG Energy submits that its filing meets the goals of the
transportation regulations of maximizing the number of customers that can receive
transportation service while permitting PG Energy to effectively and efficiently
manage its natural gas distribution system.


                PG Energy submits that Conectiv has not sufficiently reviewed the
existing tariff, which demonstrates the reasonableness of the language of Rule 7.1.
The Company argues that no impermissible intra-class discrimination exists.


                The Company points out that the operation of Rule 7.1 does not
differ from the current tariff since no gas exists in storage relative to the
customer’s capacity in storage. PG Energy argues that Conectiv’s proposal is
unreasonable since the granting of an option to the new customer would only act
to advantage the natural gas supplier, and therefore Conectiv’s suggestion should
be dismissed.


                PG Energy submits that the rate distinction between Pennsylvania
and non-Pennsylvania gas supply no longer exists and has not for years. The
Company points out that it was removed from the tariff based upon the settlement
of PG Energy’s base rate case at Docket No. R-00963612, which the Commission
approved.


Resolution


                We agree with Statoil/TXU that the terms and conditions governing
a Transportation Agreement concerning FTS service should be included in the
Company's tariff. We believe that this would provide assurance that the terms and
conditions were applied in a non-discriminatory manner. We direct the Company



                                           46
to amend Rule 7 to include the specific terms and conditions applicable to the
Transportation Agreement for FTS service.


              We will not adopt the commenting parties' remaining
recommendations. The Settlement included the application of rates FTS, RTS,
and GTS. All parties had sufficient opportunity to address these matters at that
time. Furthermore, several of the issues raised by these parties had been addressed
in the Company’s prior rate case decisions.


P. Rule 7.3- Rate Schedule FTS (Provisions of Additional Gas Supplies by the
Company)


              Conectiv submits that the Company proposes in its Rule 7.3 that if a
customer or Pool Operator cannot schedule sufficient quantities of natural gas for
delivery, then the Customer or Pool Operator may purchase such gas from the
Company with an administrative charge. Conectiv contends that nowhere within
the testimony of the Company has any such “administrative charge” been fully
justified. Conectiv submits that this charge is contrary to Commission Orders and
the Act and therefore PG Energy should be ordered to eliminate this charge.


              PG Energy submits that the administrative charge that Conectiv is
complaining about is already contained within PG Energy’s tariff and has been
approved by the Commission. The Company comments that this charge is not an
additional fee proposed through the restructuring process. PG Energy argues that
Conectiv’s argument represents an attempt to change existing rates through the
restructuring process.




                                         47
Resolution


              We will not adopt Conectiv's recommendation concerning the
administrative charge in Rule 7.3. This charge is contained in the Company’s
current tariff. At this stage in this proceeding it is not appropriate to raise this
issue.


Q. Rule 7.7.1- Load Management for FTS Customers and Pools


              Statoil/TXU comment that they are opposed to the administrative fee
of $0.25/Mcf for imbalance trading. Statoil/TXU argue that the incremental costs
to PG Energy of imbalance trading should be priced on a transactions basis, not a
volumetric one.


              The Company submits that Statoil/TXU waived any opposition to
the administrative fee for imbalance trading by agreeing to the Settlement in this
case. PG Energy comments that this fee is justified and is necessary. The
Company points out that currently it has transportation agreements with all FTS
customers and none have objected to them.


Resolution


              We will not adopt the position taken by Statoil/TXU. Statoil/TXU
believe some incremental costs may be incurred and may be recoverable on a
transaction basis, as opposed to a volumetric charge. Furthermore, this charge is
contained in the Company’s current tariff. It is inappropriate to raise this issue at
this stage of this proceeding.




                                           48
R. Rule 7.8- Standby Service for FTS Customers


              Conectiv comments that through a wording change made by the
Company to Rule 7.8, PG Energy may, upon thirty (30) days notice, unilaterally
cancel standby service to a customer, thereby potentially making FTS service
unavailable to that customer.


              PG Energy submits that the purpose of this change was to provide
the customer or the pool operator with the ability to reduce or cancel the standby
service daily demand without the need for mutual agreement, and it is a reflection
of the current tariff which allows customers to cancel or reduce service upon at
least thirty days’ notice prior to April 1 of each year, which is the beginning of the
annual contract period.


              The Company argues that Rule 7.8 is appropriate and should be
approved. The Company comments that if it is necessary to assuage Conectiv’s
concerns, Rule 7.8 could be amended to provide that thirty (30) days notice is
required prior to April 1st.


Resolution


              We will not adopt Conectiv's proposal to return to the language of
the existing tariff that allows for cancellation of standby service by mutual
agreement. We believe that the proposed thirty day prior written notice will allow
sufficient time for a Pool Operator to bring a dispute before the Commission.




                                          49
S. Rule 7.10- Storage Service for FTS Customers


              Conectiv submits that a new FTS customer should be provided the
option of contract for any available storage without the underlying gas, if the
customer chooses. Conectiv argues that the Company has introduced no evidence
concerning the general availability of storage on its system.


              PG Energy submits that Conectiv has not sufficiently reviewed the
existing tariff. The Company notes that the Company shall provide for the storage
of gas during the summer period (April-October) for use by the customer during
the winter. The Company notes that because the injection season begins on April
1, the current tariff requires FTS customers to submit a written request prior to
April 1. The Company argues that this proposed rule expands the ability of the
customer to contract for FTS storage service at any time by deleting the
requirement that a request be submitted before April 1, or before the storage
injection season. The Company states that the proposed rule takes into
consideration the situation in which a customer may become a FTS customer and
request storage service after the Company has purchased storage gas for that
customer as a retail sales customer. The Company believes that it is reasonable to
require the customer to purchase from the Company the quantity of gas related to
the customer’s storage capacity in storage on the date that the customer
commences transportation service.


Resolution


              We will not adopt the position recommended by Conectiv. We
believe that the Company’s proposal is reasonable. It allows for additional
flexibility in the initiation of FTS transportation service during any time of the
year as opposed to restricting the initiation of service prior to April 1 each year.


                                          50
T. Rule 8.4- Pipeline Capacity Release for RTS and GTS Customers


              The OCA submits that the last sentence of Rule 8.4 should read as
follows:


              The amount of pipeline capacity to be released to the Pool Operator
              shall equal 32% of the total capacity assigned, based on the relative
              proportions of pipeline and storage capacity held to serve the RS/GS
              customer group. This percentage shall be subject to redetermination
              annually in the Company’s section 1307(f) proceeding.

              PG Energy comments that it has reviewed OCA’s recommended
language and agrees that it is an appropriate modification.


Resolution


              We direct PG Energy to revise Rule 8.4 to include the OCA’s
recommended language.


U. Rule 8.5- Storage Service Allocation for RTS and GTS


              The OCA submits that the following language should be added to
the third sentence in Rule 8.5, so that the sentence reads:


              The amount of Storage Demand to be allocated to the Pool Operator
              shall equal 68% of the total capacity assigned to the Pool Operator
              as determined in the preceding Rule, including annual re-
              determinations of the percentage.

              PG Energy agrees with the OCA’s recommended language.




                                          51
Resolution

              We direct PG Energy to revise Rule 8.5 to include the OCA’s
recommended language.


                  V.      COMMUNICATION PROTOCOLS


              Statoil/TXU point out that Communication Protocols are meant to
define and describe the channels, and to a certain degree the content, of
communications. Statoil/TXU note that Communication Protocols are critical
tools and must be developed completely. Statoil/TXU submit that portions of the
proposed Communications Protocols are lacking in detail. One area lacking,
pointed out by Statoil/TXU, is that some components of the Communications
Protocols that apply to small customers should equally apply to large industrial
customers.


              Statoil/TXU submit that PG Energy’s Communication Protocol is
lacking in detail regarding Operational Flow Orders (OFOs) and the OFO should
include details such as effective date and time, estimated duration of the OFO,
reason for the OFO, and actions required by the supplier and/or customers.


              Statoil/TXU also advocate that the Communications Protocol
commit not only to a discussion and evaluation of the Operational Flow Order
simulation exercise but also commit to a "post mortem" exercise after the actual
Operational Flow Order.


              Statoil/TXU also recommend that the Company commit to keeping
marketers informed of regulatory and legislative activities.




                                         52
              Statoil/TXU submit that the following statement be added to the
Company’s Communications Protocols in order to allow PG Energy and Suppliers
to continue to forge the new paths that competitive markets generate:


              Subsequent to calling an OFO, PG Energy and Marketers agree to
              informally discuss the circumstances leading to the OFO and an
              evaluation of marketer responses to the OFO.


              Statoil/TXU recommend some wording changes for clarification
purposes. One clarification requested by Statoil/TXU involves the phrase “proper
licensing by the Pennsylvania Public Utility Commission”. Statoil/TXU would
like clarification as to what constitutes “proper” licensing by the Commission.
Statoil/TXU submit that the word proper should be eliminated from the phrase.
Another clarification noted by Statoil/TXU is that the word “Protocol” in the first
sentence of the document should be deleted in order to clarify that
communications happen from several platforms, while the protocol does not
utilize platforms, it is a description of those platforms.


              Finally, Statoil/TXU submit that in the paragraph dealing with
Contact Information, contacts at each end are required, so parties can interact with
each other.


              PG Energy submits that Statoil/TXU comments should not be
considered by the Commission, as they were filed late. The Company points out
that Statoil/TXU has offered no excuse for the tardiness of their comments.


              The Company submits that in the collaboration process, Statoil/TXU
representatives promised to provide language to be included in the finalized
documents, but never did.


                                           53
              PG Energy contends that inclusion of additional detail concerning
Operational Flow Orders in the Communications Protocol would only lead to
potential duplication or confusion. The Company argues that its protocols already
call for a post-mortem of the Operational Flow Order simulation. The Company
also points out that its protocols require the Company to identify a responsible
contact who will be available 24 hours per day, seven days per week.


Resolution


              We will adopt the recommendations of Statoil/TXU concerning the
Communication Protocols. We believe that it is reasonable for the protocols to
apply to all suppliers. We agree that additional information should be provided
concerning Operational Flow Orders. In a prior resolution we agreed with these
commenters concerning the need to institute a System Alert process. We also
believe that it would be beneficial for the parties to engage in a "post mortem"
review of the actual Operational Flow Order event. We agree that it would be
reasonable to require the Company to maintain information concerning regulatory
and legislative activities affecting the suppliers on the Company's website.


                              VI.    CONCLUSION


              Upon consideration of the proposed compliance tariff, supplier tariff
and communications protocols, as well as comments and reply comments, we
direct PG Energy to make the necessary changes to its compliance tariff, supplier
tariff and communication protocols to comply with the resolutions contained in
this Opinion and Order: THEREFORE,




                                         54
      IT IS ORDERED:


      1. That PG Energy, Inc. is directed to amend Supplement No. 2 to Tariff
          Gas Pa. P.U.C. No. 3 (Compliance Filing) and Original Tariff Gas Pa.
          P.U.C. No. 5 (Supplier Tariff) as is required by this Opinion and Order.


      2. That PG Energy, Inc. is directed to file with the Commission a revised
Compliance Tariff and Supplier Tariff on or before April 28, 2000, to become
effective upon one days notice, which must actually be received at the
Commission’s Office of the Secretary by the close of business on that date.


      3. That a copy of this Opinion and Order shall be served upon all parties to
the proceeding at Docket No. R-00994783.




                                                       BY THE COMMISSION,




                                                       James J. McNulty
                                                       Secretary




(SEAL)
ORDER ADOPTED: April 13, 2000
ORDER ENTERED: April 13, 2000




                                        55
56

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:2
posted:3/18/2012
language:
pages:56