5.3. Tariff Requirements -
Tariffs filed or rates charged pursuant to these rules must,
at a minimum, contain the following provisions:
5.3.1. Transportation tariffs.
5.3.1.a. Rates must be flexible, both
downward and upward, from a benchmark fully distributed cost based rate. The
Commission will review flexible pricing practices in rate cases, complaint
cases, or in cases initiated upon its own motion.
5.3.1.b. Generally, the benchmark fully
distributed cost based rate should be the rate imposed upon a transportation
service; however, flexibility, at the discretion of the transporter, is
provided in order to reflect market conditions on a case by case basis.
5.3.1.c. For natural gas produced
within West Virginia, the transportation rate may not flex upward from the
benchmark fully distributed cost based rate.
5.3.1.d. The benchmark fully distributed cost
based rate shall include an allowance for return on allocated rate base equal
to the last rate of return authorized by the Commission for the particular
utility. For entities which do not have an authorized rate of return, the
benchmark fully distributed cost based rate shall include a reasonable return,
which shall be documented and supported by sufficient information and data at
the time of the filing, until modified by the Commission.
5.3.1.e. The flexibility of transportation
rates for each entity subject to this rule must be determined according to the
following standards:
5.3.1.e.1. Negotiated
rates for services provided under this rule may flex downward from the
benchmark fully distributed cost based rate but not below the benchmark
incremental rate, as defined in Rule 2.6.
5.3.1.e.2. The provisions of this Rule
5.3.1.e. shall apply to utilities which provide, in addition to transportation
services, full commodity service to non-transportation customers.
5.3.1.e.2.A. Negotiated rates for services
provided under this rule by a utility may flex upward from the benchmark fully
distributed cost based rate but not above the utility's otherwise applicable
sales tariff rate excluding the utility's avoidable purchased gas commodity
costs. For the purpose of calculating this maximum rate, the "utility's
otherwise applicable sales tariff rate" shall be the average per unit rate
computed on the basis of the utility's tariff that would apply to the volumes
of throughput contemplated in the transportation agreement.
5.3.1.e.2.B. To the extent standby sales
service is contracted for, the maximum provided in this subsection shall be
calculated by deducting all of the utility's purchased gas costs from the
utility's otherwise applicable sales tariff rate.
EXAMPLE
The following calculations provide an example of a maximum
rate determination, which has flexed upward from the benchmark fully
distributed cost based rate. The example assumes a customer requesting
transportation for 500 Mcf per month. To calculate the maximum transportation
rate you first determine the average rate under the serving utility's
applicable rate schedule. A typical rate schedule may appear as follows:
|
Customer Charge ........ |
$34.00 |
|
First Mcf .......................... |
6.00 per Mcf |
|
Next 49 Mcf.................... |
5.00 per Mcf |
|
Over 50 Mcf................... |
4.70 per Mcf |
The above rates include a PGA of $4.30 per Mcf.
Under this rate schedule the total bill for 500 Mcf would be
$2,400 and the average per unit rate is $4.80.
Avoidable purchased gas commodity costs are deducted from
the average tariff rate to arrive at the maximum transportation rate for
non-standby customers. For standby customers all purchased gas costs are
deducted from the average tariff rate. Typical purchased gas costs may be made
up of the following components:
|
Avoidable Commodity Costs......... |
$3.45 per Mcf |
|
All Other Purchased Gas
Costs........... |
85 per Mcf |
|
Total PGA.................. |
$4.30 per Mcf |
Given the above assumed tariff rates and purchased gas costs
the maximum transportation rate is determined as follows:
|
Non-Standby Customers: |
|
|
Average Tariff Rate.................
|
$4.80
|
|
Less Avoidable Purchased Gas Costs......
|
(3.45) |
|
Maximum Transportation Rate.......... |
$1.35 |
|
Standby Customers: |
|
|
Average Tariff Rate .............. |
$4.80 |
|
Less Total Purchased Gas
Costs................................ |
(4.30) |
|
Maximum Transportation Rate
.......... |
$0.50 |
5.3.1.e.2.C. In the event the maximum flex
rate calculated under this subsection is less than the total benchmark fully
distributed cost based rate for the transportation services to be provided, the
total benchmark fully distributed cost based rate shall be the maximum rate
that may be charged.
5.3.1.e.3. Nothing within these rules
regarding rate flexibility should be construed as allowing, or Commission
authorization for, an elimination of a reasonable differential between rates
for firm and interruptible service.
5.3.1.f. Utilities shall provide for optional
standby sales service. Standby sales service shall entitle a transportation
service end-user to purchase natural gas at the applicable full service
commodity tariff rate, i.e., the utility's retail sales rate applicable to the
particular end user. Each transportation service end-user shall be entitled to
standby sales service subject to the following conditions:
5.3.1.f.1. The transportation service
end-user must be in compliance with the terms and conditions of the tariff
relating to standby sales service, including the payment of fees.
5.3.1.f.2. The transportation service
end-user and the utility shall agree upon the maximum sales volumes. Volumes
taken in excess of this amount may require the payment of a penalty.
5.3.1.f.3. The standby sales service shall
include all fixed costs, including the fixed costs associated with gas supply,
associated with providing standby sales service to the transportation service
end-user.
5.3.1.f.4. The rate for
standby sales service shall not be flexible.
5.3.1.f.5. For a transportation service
end-user which is not paying a standby sales service fee, the utility is
relieved from its service obligation to provide full commodity service to such
end-user.
5.3.1.g. If
transportation service to an end-user requires the capacity of other pipelines,
the transportation rate to such end-user shall recover the costs incurred by
the utility or intrastate pipeline in reserving such
capacity.
5.3.2. Tariffs
provisions for pooling service.
5.3.2.a.
Every entity with natural gas transportation tariffs on file with the
Commission shall have on file tariffs setting forth terms, conditions and rates
for providing service to pools. Any entity subsequently filing transportation
tariffs with the Commission shall include provisions for pooling service at
that time.
5.3.2.b. Work papers,
data and calculations which support and demonstrate the proposed rates and any
other calculated numbers in the filed tariffs shall be filed with proposed
tariffs.
5.3.2.c. Small utilities
whose total annual throughput is less than five hundred thousand (500,000) Mcf,
excluding residential sales, and intrastate pipelines who have no
transportation tariff on file with this Commission, are exempt from the initial
tariff filing requirements of these rules. However, although exempt, such
entities must offer services and charge rates with respect thereto in
accordance with the provisions of these rules. The exemption is subject to
future modification by the Commission. Additionally, the Commission's complaint
procedure is available for the purpose of reviewing any service, practice, or
policy of an entity claiming exemption under this section. Specific exemptions
may be revoked by the Commission on a case by case basis for good cause shown.
5.3.2.d. Tariff and/or rates
developed, after consultation with interested parties, and subsequently filed
pursuant to these rules must, at a minimum, address the following items:
5.3.2.d.1. Rates including any billing and
payment requirements, and/or late payment penalty clauses.
5.3.2.d.2. Eligibility for pooling service.
Human needs customers who have selected interruptible transportation service,
including residences, schools, hospitals, nursing homes and other types of
health care facilities, are not eligible for pooling unless they purchase
stand-by service or have demonstrated that they have the existing ability to
switch to alternative fuels which would meet the human needs customers' energy
requirements that were provided by the interrupted gas supply.
5.3.2.d.3. Responsibility for any unpaid
purchased gas cost arising from prior utility or intrastate pipeline service.
5.3.2.d.4. Provisions for
balancing the pool and the transfer of gas supplies from one pool to
another.
5.3.2.d.5. Pool membership
requirements, include at a minimum, proof that all end users are interruptible
transportation customers, are not subject to this rule's human needs
limitation, and have knowingly selected the option of pooling and the potential
ramifications of selecting pooling. Such proof must be clear and unambiguous
and to the satisfaction of the utility or intrastate pipeline. The primary
responsibility for payment for the transportation service is that of the pool
operator. Equitable distribution of end user payments to the pool operator
shall be a matter of contractual rights between the end user and the pool
operator. When a transporter has not received adequate, timely payment from a
pool operator, the transporter may initiate collection activities, including
termination action, against the entity contracting transportation service, even
if such entity is a pool operator and is not an end user, provided that the
transporter provide notification to each member of the pool regarding such
non-payment and termination actions. Individual members of a pool that is
delinquent in its payments to a transporter shall not be precluded from
obtaining service in their own right solely because of the delinquency of their
former pool. If the transporter is an LDC, it must comply with the Commission's
rules on terminations. Further, if applicable to any individual member of such
pool, an LDC shall comply with Gas Utility Rule 4.8.2.b.13.
5.3.2.e. Utilities and intrastate
pipelines may provide for the following operational considerations within their
individual pooling tariffs, for example, but not limited to:
5.3.2.e.1. Limitations, if any, due to
upstream and/or downstream contractual agreements with interstate and
intrastate pipelines.
5.3.2.e.2.
Limitations, if any, on the number of pools from which an individual end-user
can be served at any one time.
5.3.2.e.3. Limitations, if any, on the timing
of commencement of service. Any requirements for notification to the utility or
intrastate pipeline required for making additions to the pool participant
listing(s).
5.3.2.e.4. Any
provisions related to withdrawals from pool participation. Such provision
should provide for time frames for proper notice and appropriate forms for such
notice.
5.3.2.e.5. Any volumetric
restrictions limiting the eligibility of end-users for the pooling service and
the time frame, if applicable, of the phase-in or implementation of pooling
service for interruptible transportation end-users.
