Code of Massachusetts Regulations
220 CMR - DEPARTMENT OF PUBLIC UTILITIES
Title 220 CMR 6.00 - Standard Cost of Gas Adjustment Clause
Section 6.06 - Gas Adjustment Factor Formulas
The GAFs incorporate on a seasonal basis changes in costs, refunds, etc., such that when a seasonal GAF ($/therm or $/CCF) is added to a base rate, a proper seasonal charge results. The GAFs shall be computed on a semi-annual basis using forecasts of seasonal gas costs, carrying charges, send out volumes, and sales volumes. Forecasts may be based on either historical data or company projections, but must be weather-normalized. Any projections must be documented in full with each filing.
The base and supplemental GAF formulas below form the basis for the calculation of the seasonal GAFs (peak and off-peak) to be used in billing. The base GAF as calculated at the beginning of each summer season shall serve as the off-peak GAF. The peak GAF shall be the base GAF, as calculated at the beginning of the winter season, plus the supplemental GAF.
Base GAF Formula: The base GAF shall be calculated at the beginning of each season according to the following formula:
Supplemental GAF Formula: The supplemental GAF shall be calculated for the peak season according to the following formula:
Where:
BC: Base Commodity Costs - 12-month volumes at annual weighted average commodity cost of base gas supplies (e.g., F-1, CD-6, GS-6, etc.).
D: Base Demand Charges - 12-month demand charges associated with base send out volumes.
Dao: Demand Charge Reallocation - As derived using the proportional responsibility allocator.
S: Supplemental Gas Costs - Total cost of supplemental sendout.
SM: Supplemental Margin Reallocation - Supplemental gas supply sendout volumes times the per-unit supplemental margin.
FC: Total Inventory Finance Charges - As billed in each peak season in anticipation of subsequent off-peak season charges. The total shall represent an accumulation of the projected charges as calculated using the monthly average of financed inventory at the existing (or anticipated) financing rate through a trust or other financing vehicle.
Rb: Base Reconciliation Adjustment - Account 175.1 balance, inclusive of the associated Account 175.1 interest, as outlined in 220 CMR 6.08. Over collections shall be treated as positive in the above formula.
Rs: Supplemental Reconciliation Adjustment - Account 175.2 balance, inclusive of the associated Account 175.2 interest, as outlined in 220 CMR 6.08. Over collections shall be treated as positive in the above formula.
M: Nonfirm Revenue Margin - any profits on nonfirm sales as calculated by forecasting nonfirm rates, costs, and associated nonfirm sales volumes for the 12-month period beginning on the effective date of the base GAF. Also includes any other nonfirm service revenues.
R1, R2: Per-unit Supplier Refunds - The per-unit supplier refunds associated with refund program credits derived from Account 242.1, "Undistributed Gas Suppliers' Refunds." See 220 CMR 6.07.
B: Per-unit embedded gas costs.
P:Vol: Forecasted peak season firm sales volumes.
T:Vol: Forecasted annual firm sales volumes.
