II. Background
In D.90-09-089, the Commission adopted rules for gas procurement practices and transportation services. Among the adopted rules were monthly balancing rules. These balancing rules require noncore customers to match their use of natural gas with supplies within a 10 percent tolerance band. If positive imbalances, i.e., overnominations, fall outside the 10 percent tolerance at the end of a 30-day period, the utilities are required to purchase the noncore customers' overnominations at a rate equal to the lower of the lowest incremental cost of gas on the system for that month, or 50 percent of the core WACOG2 for the month. If there are negative imbalances which fall outside the 10 percent tolerance at the end of a 30-day period, the utilities charge these noncore customers for standby services. Standby service gas rates are equal to the higher of 150 percent of the core WACOG for the month or the highest incremental cost of gas for the month. (37 CPUC2d at pp. 623, 631-632.)
D.97-11-070 modified the gas balancing rules that were adopted in D.90-09-089. Noncore customers are required to deliver (using a combination of flowing supply and firm storage withdrawal) at least 50 percent of burn over a five-day period from November to March. If the total delivery is less than 50 percent of the total burn, a daily balancing standby charge is applied. This charge is 150 percent of the highest Southern California Border price during the five-day period as published in the Natural Gas Intelligence "Daily Gas Price Index." When total inventory declines to the "peak day minimum + 20 Bcf trigger," the minimum daily delivery requirement increases to 70 percent of burn on a daily basis.3 When total inventory declines to the "peak day minimum + 5 Bcf trigger," the minimum daily delivery requirement increases to 90 percent. That is, transportation customers are required to be balanced (flowing supply plus firm storage withdrawal) at a minimum of 90 percent of burn on a daily basis. If the customer fails to meet the minimum daily delivery requirement, the daily balancing standby charge of 150 percent of the highest Southern California Border price per the Daily Gas Price Index for the day applies. (76 CPUC2d at pp. 601, 604-606.)
Responses to SCGC's petition were filed by SoCalGas on March 9, 2001, and The Utility Reform Network (TURN) on March 15, 2001.
2 "WACOG" refers to the weighted average cost of gas. 3 The five-day period no longer applies when the 70 percent or 90 percent requirement is reached.
