§ 53.64. Filing requirements for natural gas distributors with gross intrastate annual operating revenues in excess of $40 million.
(a) A Section 1307(f) gas utility may only voluntarily file a tariff reflecting an increase or decrease in natural gas costs once a year in accordance with the schedule established by the Commission, as published in the Pennsylvania Bulletin prior to the first day of September of each preceding year. If no new tariff is filed at that time, gas utilities under 66 Pa.C.S. § 1307(f) (relating to sliding scale of rates; adjustments) shall nevertheless file for the reconciliation of amounts collected and expended during prior periods as set forth in subsection (i). The tariff may reflect either an annual levelized rate, or a seasonal levelized rate pursuant to which a levelized 6-month summer rate period and a levelized 6-month winter rate period would apply. Upon good cause shown, the tariff may reflect other summer/winter rate periods as may be justified by operational considerations.
(b) If there is a known and measurable change in gas costs during the effective period of an annual levelized rate previously approved by the Commission and the change, if reflected in a natural gas utilitys tariffs, would result in an increase or decrease in its gas cost rate tariffs of 2% or more, the natural gas utility shall file a proposed tariff incorporating the recalculated rate in accordance with the quarterly filing provisions of subsection (i)(5).
(c) Thirty days prior to the filing of a tariff reflecting an increase or decrease in natural gas costs, each Section 1307(f) gas utility seeking recovery of purchased gas costs under that section shall provide notice to the public, under § 53.68 (relating to notice requirements), and shall file the following supporting information with the Commission, with a copy to the Consumer Advocate, Small Business Advocate and to intervenors upon request:
(1) A complete list in schedule format of each spot and each long term source of gas supply, production, transportation and storage, used in the past 12 months, which 12-month period shall end 2 months prior to the date of the tariff filing, separately setting forth on a monthly basis the quantity and price of gas delivered, produced, transported or stored, maximum daily quantity levels, maximum annual quantity levels, a detailed description of warrantee or penalty provisions, including liquidated damages, take or pay provisions or minimum bill or take provisions of the purchases, balancing provisions and copies of Federal tariffs and contract provisions relating to the purchasesincluding demand and commodity components. With regard to each contemplated future source of supply, production, transportation or storage, during each of the next 20 months for each source, provide the name of the source, the maximum daily quantity, the maximum annual quantity, the minimum take levels, a detailed description of warrantee or penalty provisions, including liquidated damages, take or pay provisions or minimum bill or take provisions of the purchases, balancing provisions and contractual or tariffed terms of the purchases, copies of applicable Federal tariffs, the expiration date of each contract, the date when each contract was most recently negotiated and the details of the negotiationsuch as meeting held, offers made, and changes in contractual obligationand whether current proceedings, negotiations or renegotiations are pending before the Federal Energy Regulatory Commission, and the like, to modify the price, quantity or another condition of purchase, and if so, the details of the proceedings, negotiations or renegotiations. Gas supply sources which individually represent less than 3% of the total system supply may be shown collectively, such as other local gas purchases.
(2) Notwithstanding paragraph (1), requests for confidential treatment of a submission required to be filed under § § 53.6153.63, this section and § § 53.6553.68 shall be made at the time the supporting information is submitted to the Commission. The information need not be served on another person until the request for nondisclosure is decided by the administrative law judge assigned to the proceeding and will be served under separate cover. The Commission will restrict access to this information pending its determination. The administrative law judge will make the determination within 15 days of the date the administrative law judge is assigned to the proceeding.
(3) A complete listing of sources of gas supply transportation or storage and their costs, including shut-in and curtailed sources of supply, both inside and outside this Commonwealth considered by or offered to the utility but not chosen for use during the past 12 months, which 12-month period shall end 2 months prior to the date of the tariff filing, and the reasons why the gas supply, transportation or storage was not selected for use as a part of the utilitys supply mix. A similar listing of gas sources, transportation or storage and associated projected costs offered or considered but not chosen to meet supply for the next 20 months, along with reasons for nonselection.
(4) An annotated listing of Federal Energy Regulatory Commission or other relevant non-Commission proceedings, including legal action necessary to relieve the utility from existing contract terms which are or may be adverse to the interest of its ratepayers, which affect the cost of the utilitys gas supply, transportation or storage or which might have an impact on the utilitys efforts to provide its customers with reasonable gas service at the lowest price possible. This list shall include docket numbers and shall summarize what has transpired in the cases, and the degree of participation, if any, which the utility has had in the cases. The initial list filed under this paragraph shall include cases for the past 3 years. Subsequent lists need only update prior lists and add new cases.
(5) A listing and updating, if necessary, of projections of gas supply and demand provided to the Commission for any purposesee § 59.67 (relating to formats). In addition, provide an accounting of the difference between reported gas supply available and gas supply deliverableincluding storagefrom the utility to its customers under various circumstances and time periods.
(6) Each Section 1307(f) utility shall file with the Commission a statement of its current fuel procurement practices, detailed information concerning the staffing and expertise of its fuel procurement personnel, a discussion of its methodology for obtaining a least cost and reliable source of gas supply, including a discussion of any methodologies, assumptions, models or rules of thumb employed in selecting its gas supply, transportation and storage mix, its loss prevention strategy in the event of fraud, nonperformance or interruption of performance, its participation in capacity release and reallocation programs, the impact, if any, upon least cost fuel procurement by constraints imposed by local transportation end users, interruptible service, balancing, storage and dispatching options, and its strategy for improving its fuel procurement practices in the future and timetable for implementing these changes.
(7) A list of off system sales, including transportation, storage or capacity releases by the utility at less than the weighted average price of gas, or at less than the original contract cost of transportation, storage or capacity supplied to the utility for its own customers.
(8) A list of agreements to transport gas by the utility through its system, for other utilities, pipelines or jurisdictional customers including the quantity and price of the transportation.
(9) A schedule depicting historic monthly end-user transportation throughput by customer. Each customer or account shall be identified solely by a unique alphanumeric code, the key to which may be provided subject to § 5.423 (relating to orders to limit availability of proprietary information).
(10) A schematic system map, locating and identifying by name, the pressure and capacity of all interstate or intrastate transmission pipeline connections, compressor stations, utility transmission or distribution mains 6 inches or larger in size, storage facilities, including maximum daily injection and withdrawal rates, production fields, and each individual supply or transportation customer which represents 5% or more of total system throughput in a month. Each customer or account shall be identified solely by a unique alphanumeric code, the key to which may be provided subject to § 5.423.
(11) If any rate structure or rate allocation changes are to be proposed, a detailed explanation of each proposal, reasons therefore, number of customers affected, net effect on each customer class, and how the change relates to or is justified by changes in gas costs proposed in the Section 1307(f) tariff filing. Explain how gas supply, transportation and storage capacity costs are allocated to customers which are primarily nonheating, interruptible or transportation customers.
(12) A schedule depicting the most recent 5-year consecutive 3-day peak data by customer class (or other historic peak day data used for system planning), daily volumetric throughput by customer class (including end-user transportation throughput), gas interruptions and high, low and average temperature during each day.
(13) Identification and support for any peak day methodology used to project future gas demands and studies supporting the validity of the methodology.
(14) Analysis and data demonstrating, on an historic and projected future basis, the minimum gas entitlements needed to provide reliable and uninterrupted service to priority one customers during peak periods.
(d) Upon review of the supporting data submitted by the utility, the Commissions Office of Special Assistants, or other bureau or individual as the Commission may direct, will, within 30 days of its submission, notify the utility, by Secretarial letter, of a deficiency in the submission. Unless notified, a utilitys supporting data will be deemed to be acceptable. Upon notice of a deficiency in the supporting data as filed, the utility shall rectify a deficiency within 30 days. The Commission will notify the utility of remaining problems with its revised submission of supporting data. No tariff under 66 Pa.C.S. § 1307(f) may be filed until deficiencies in supporting data are corrected. The provision of supporting data required by this section does not thereafter preclude a party from seeking further discovery of information during a proceeding under 66 Pa.C.S. § 1307(f) or discovery of information during a proceeding under 66 Pa.C.S. § 1307(f) or § 1308 (relating to voluntary changes in rates).
(e) For the purposes of § § 53.6153.63, this section and § § 53.6553.68, the filing of a tariff may refer either to the filing of a tariff supplement or the filing of an addendum to the utilitys officially filed tariff. To prevent excessive paperwork, a tariff addendum shall be filed as provided in subsection (a), and a tariff supplement shall only be filed after Commission approval, when the utility files its compliance filing.
(f) During the pendency of a proceeding to investigate the recovery of gas costs under 66 Pa.C.S. § 1307(f), updates of the information provided in the filing and in support of the filing shall be submitted concerning changes in circumstances occurring since the filing of the tariff and supporting information. Updates relating to projected increases in purchased fuel expenses which do not fully materialize shall be submitted as soon as known. Updates relating to changes in purchased fuel expenses, production, transportation or storage costs shall be received at least 30 calendar days prior to the close of the record and with opportunity provided for the parties to review and inquire concerning the information contained in the updates. No upward revision of the amount originally requested, at the commencement of the proceeding, is permitted.
(g) The scheduling of a hearing in the service area of the utility will be determined by the Commission consistent with its policy as set forth at § 3.163 (relating to policy statement concerning public input hearings in rate proceedings). At least one hearing will be held in the service area of the utility if there is an indication of consumer interest.
(h) At the conclusion of the hearing held under 66 Pa.C.S. § 1307(f), the Commission will issue an order which, to the extent possible, makes specific findings as to whether the utility is pursuing a least cost fuel procurement policy consistent with the need to provide safe and adequate services and which establishes the rate to be charged, pending reconciliation and audit proceedings. Issuance by the Commission of its order establishing the rate to be charged is necessarily based on the unaudited projections provided by the gas utility and does not foreclose subsequent reconciliation of costs recovered, including pipeline refunds, and incurred under 66 Pa.C.S. § 1307(f)(2) nor Commission action resulting from Commission audit.
(i) Utilities shall comply with the following:
(1) Thirty days prior to the filing of a tariff reflecting increases or decreases in purchased gas expenses, gas utilities under 66 Pa.C.S. § 1307(f) recovering expenses under that section shall file a statement for the 12-month period ending 2 months prior to the filing date under 66 Pa.C.S. § 1307(f) as published in accordance with subsection (b) which shall specify:
(i) The total revenues received under 66 Pa.C.S. § 1307(a), (b) or (f), including fuel revenues received, whether shown on the bill as 66 Pa.C.S. § 1307(a), (b) or (f) charges or rolled in as base rates.
(ii) The total gas expenses incurred.
(iii) The difference between the amounts in subparagraphs (i) and (ii).
(iv) Evidence explaining how actual costs incurred differ from the costs allowed under subparagraph (ii).
(v) How these costs are consistent with a least cost fuel procurement policy, as required under 66 Pa.C.S. § 1318 (relating to determination of just and reasonable gas cost rates).
(2) During the period of transition from the current gas cost rate mechanism to the procedure under 66 Pa.C.S. § 1307(f) in lieu of the statement in paragraph (1), utilities shall file a reconciliation plan subject to Commission approval for the treatment of over/under collections during the period. The plan shall be filed concurrently with the utilitys tariff under 66 Pa.C.S. § 1307(f) and shall include a minimum of 6 months actual over/under collection data.
(3) A hearing will be held on these matters, and after completion of the hearing the Commission will issue an order within 6 months following the filing of the statements directing payment to ratepayers of overcollections received, plus interest calculated in the manner specified under 66 Pa.C.S. § 1308(d), or recovery, when appropriate, of undercollections. Interest will not be permitted on net undercollections caused by the setting of rates under 66 Pa.C.S. § 1307(f).
(4) The proceedings on reconciliation shall be consolidated, for purposes of hearing, with pending hearings on the utilitys latest 66 Pa.C.S. § 1307(f) tariff filing, except for good reason shown.
(5) A Section 1307(f) utility which files tariffs reflecting increases and decreases in gas costs in accordance with 66 Pa.C.S. § 1307(f) shall make quarterly filings in accordance with the following provisions:
(i) Quarterly filings shall be made 3 months, 6 months, 9 months and 12 months after the effective date of the Section 1307(f) tariff. Each filing shall be based upon a recalculation and reconciliation of gas costs for a quarterly period commencing 4 months prior to the filing date.
(ii) The utility shall recalculate its rates to reflect actual gas costs. The recalculation shall include a reconciliation of undercollections or overcollections resulting from a change in natural gas costs from original projections for the period and any changes in sales volumes from original projections for the period, but may not include consideration of interest due to over or under collections of gas costs. Interest calculations shall be based upon over and under collections netted through the end of the current annual purchased gas cost rate period, and shall be included only in the annual Section 1307(f) tariff filing.
(iii) If the recalculated rate does not differ by more than 2% from the currently effective rate, the utility shall file a letter with the Commission to that effect, with copies to the Office of Consumer Advocate, the Bureau of Investigation and Enforcement, and the Office of Small Business Advocate. If the recalculated rate differs from the currently effective rate by more than 2%, the utility shall file a tariff incorporating the recalculated rate in accordance with this section. If the recalculated rate results in an increase that is reasonably expected to have an immaterial effect on the utilitys annual gas costs, the utility shall file a letter and supporting data to that effect in lieu of a tariff rate change. Notwithstanding the letter and supporting data, the Commission may nevertheless direct the utility to file a tariff rate change. For the final 3-month period (being the 3-month period ending 1 month before the effective date of the utilitys next annual Section 1307(f) tariff filing), the utility shall recalculate the rate as described in this paragraph and adjust the rate as part of its tariff filing in compliance with the Commissions final order resolving the utilitys next annual Section 1307(f) proceeding.
(iv) Quarterly filings shall be accompanied by supporting information reflecting actual gas costs for the applicable period. The supporting information shall follow the same format used by the utility in support of projected natural gas costs in its annual Section 1307(f) proceeding. Quarterly filings shall become effective on 1 days notice and, unless otherwise ordered by the Commission, shall be subject to review by the Commission and challenge by interested parties only on the utilitys next annual Section 1307(f) proceeding.
(v) A utility making quarterly filings shall give notice of the filing in accordance with § 53.68.
(j) Utilities under 66 Pa.C.S. § 1307(f) shall also file quarterly reports with the Commission, with a copy to the Office of Consumer Advocate, the Bureau of Investigation and Enforcement and the Office of Small Business Advocate concerning monthly gas costs incurred by the utility. The quarterly reports shall include by month change in supply source, supplier refunds received, change in supplier rates and comparison between actual costs and projected gas costs.
The provisions of this § 53.64 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 504, 1301, 1304, 1307, 1317, 1318 and 1501.
The provisions of this § 53.64 adopted February 22, 1985, effective February 23, 1985, 15 Pa.B. 672; amended April 14, 1995, effective June 14, 1995, 25 Pa.B. 1411; amended January 22, 2016, effective January 23, 2016, 46 Pa.B. 449. Immediately preceding text appears at serial pages (213678) to (213682) and (337337) to (337338).
Notes of Decisions
Reasonableness of Costs
For the time period prior to enactment of Act 74, PUC had authority to determine retroactively the reasonableness of costs incurred in subsequent proceeding, thus no impermissible retroactive effect occurred. Equitable Gas Co. v. Pennsylvania Public Utility Commission, 526 A.2d 823 (Pa. Cmwlth. 1987); appeal denied 533 A.2d 714 (Pa. 1987).
Reasonableness of Rates
Where PUC had not made final determination of utilitys rate previous to rejection of reconciliation plan, authority existed to retroactively determine reasonableness of rates by use of gas cost rates procedure, and where utility failed to exercise prudence, intervention into managerial imprudence is not impermissible intrusion. Equitable Gas Co. v. Pennsylvania Public Utility Commission, 526 A.2d 823 (Pa. Cmwlth. 1987); appeal denied 533 A.2d 714 (Pa. 1987).
Rejection of Plan
The PUCs rejection of gas utilitys reconciliation plan was supported by substantial evidence, where evidence was presented by witness who conducted deliverability study of capability of company production, which indicated that gas utility could have obtained less expensive gas from local companies rather than purchasing from utilitys more expensive affiliate. Equitable Gas Co. v. Pennsylvania Public Utility Commission, 526 A.2d 823 (Pa. Cmwlth. 1987); appeal denied 533 A.2d 714 (Pa. 1987).
Retroactive Application of Statute/Regulations
Public Utility Commissions retroactive application of its new interpretation of statute and accompanying regulations regarding use of historic data in calculating rate of interest on over/under collection of annual purchase gas costs, resulting in natural gas distribution utility being required to return over collection to ratepayers, was not arbitrary, capricious or an abuse of discretion. UGI Utilities v. Public Utility Commission, 863 A.2d 144, 149-150 (Pa. Cmwlth. 2004)
This section cited in 52 Pa. Code § 53.61 (relating to purpose); 52 Pa. Code § 53.62 (relating to additional information to be filed by gas utilities with gross annual intrastate operating revenues in excess of $40 million seeking a change in base rates); 52 Pa. Code § 53.63 (relating to categories of gas utilities); 52 Pa. Code § 53.65 (relating to special provisions relating to natural gas distributors with gross intrastate annual operating revenues in excess of $40 million with affiliated interests); 52 Pa. Code § 53.68 (relating to notice requirements); and 52 Pa. Code § 53.69 (relating to fixed rate option).
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