20160222_4901.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:KEVIN KEYT
DATE:FEBRUARY 10,2016
SUBJECT:AVISTA’S REVISIONS TO SCHEDULE 146 -TRANSPORTATION
SERVICE FOR CUSTOMER-OWNED GAS,AND SCHEDULE 182 -
CONTINGENCY PLAN FOR FIRM SERVICE GAS CURTAILMENT;
TARIFF ADVICE NO.16-O1-G
On January 15,2016,Avista (“Company”)filed a Tariff Advice with the Commission
seeking authority to revise Schedule 146 Transportation Service for Customer-Owned Gas,and
Schedule 182 Contingency Plan for Firm Service Gas Curtailment.On February 5,2016 the
Company filed a second substitute tariff sheet 146B.Avista proposes to revise these rate
schedules in order to change imbalance penalties and thresholds affecting natural gas
transportation customers.According to the Company,the proposed tariff modifications are
consistent with the Northwest Pipeline (“NW Pipeline”)imbalance penalties and thresholds
approved by the Federal Energy Regulatory Commission (“FERC”)in Docket No.
RP14-1283-000.The Company requests the tariff revisions become effective on March 1,2016.
BACKGROUND
The Company uses customers’daily nominations to schedule the required amount of
natural gas on the pipeline system.Excess daily use by customers could result in a capacity
shortage on the system,while under use could result in excess system capacity.When a
customer uses natural gas above their daily nomination an overrun condition is created.
Conversely,when a customer uses natural gas below their daily nomination an underrun
condition is created.
DECISION MEMORANDUM 1 FEBRUARY 10,2016
On October 23,2014,in Docket No.RPI4-1283-000,NW Pipeline’s daily overrun
penalty changed from $0.50/therm for the first 2 percent of unauthorized usage and $1/therm for
unauthorized usage over 2 percent,to an overrun penalty the greater of$1/therm or 150 percent
of the highest midpoint price at certain supply pricing points on the day in question.’The
previous NW Pipeline underrun penalty was $0.50/therm for the first 5 to 10 percent of
unauthorized quantities and $1/therm for unauthorized quantities above 10 percent.The
underrun penalty was changed to a rate of $1/therm for all unauthorized underrun quantities
below a predetermined threshold.Avista proposes to modify Schedule 146 to replicate and pass
through NW Pipeline’s tariff penalties resulting from transportation customers using natural gas
above or below their confirmed daily nominations.
On October 23,2014,the FERC also approved NW Pipeline’s monthly imbalance
threshold.The monthly imbalance threshold ensures the customer uses the natural gas they have
nominated.Currently,Avista’s imbalance charges may be incurred by the customer if the
monthly imbalance account exceeds 105 percent,or falls below 95 percent.NW Pipeline’s
monthly imbalance threshold is now 3percent above or below total monthly confirmed
nominations during August through February,and 5 percent above or below total monthly
confirmed nominations during March through July.The Company proposes to modify Schedule
182 consistent with the FERC approved monthly imbalance thresholds on NW Pipeline.
STAFF ANALYSIS
Staff examined the Company’s Application and supporting tariffs,NW Pipeline’s current
tariffs,and FERC Docket No.RP14-1283-000.NW Pipeline clearly defines daily overrun and
underrun tolerances within their tariffs,but Staff determined the Avista’s proposed tariffs lack a
clear definition of daily tolerances.Staff discussed this with the Company and it agreed to add
clarifying language to tariff sheet 146B.On February 5,2016,the Company filed a second
substitute tariff which added the following language to sheet 1463:“as defined in Northwest
Pipeline LLC’s FERC Gas Tariff (Fifth Revised Volume No.1,Effective Date 10/27/2014)
Section 15.5 Daily Entitlement Overrun and Underrun.”Staff believes this adequately
references the overrun and underrun tolerances set forth by NW Pipeline.
The pricing points to be considered in calculating these penalties are the NW Wyoming Pool,NW South of Green
River,Stanfield,Oregon,NW Canadian Border (Sumas),Kern River Opal,and the El Paso Bondad supply pricing
points as reflected in the Daily Price Survey published in “Gas Daily.”
DECISION MEMORANDUM 2 FEBRUARY 10,2016
Additionally,Staff inquired about the frequency for which penalties are assessed by the
Company and NW Pipeline.According to the Company,it has not evoked or had penalties
invoked by NW Pipeline in over eight years.
Staff determined that gas volumes in the FERC and NW Pipeline documents are depicted
in Dths (Dekatherms)whereas Avist&s proposed tariffs are in therms .side from this
negligible difference,Staff believes the tariff changes proposed by the Company are consistent
with the penalties and imbalance thresholds established by NW Pipeline and approved by the
FERC.Staff believes it is reasonable for the Company to update its penalties and imbalance
thresholds consistent with NW Pipeline,consequently.Staff recommends the Commission
approve the tariff schedules as modified by substitute tariff sheet 146B.
COMMISSION DECISION
Does the Commission wish to approve Avista’s proposed changes to its Tariff Schedules
146 and 182 effective March 1,2016?
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DECISION MEMORANDUM 3 FEBRUARY 10,2016