W. Va. Code R. § 150-16-5

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 150-16-5 - Transportation Rates, Practices and Services

5.1. Interim Transportation Tariffs -

No later than fifteen (15) days after the effective date of these rules each gas utility shall file proposed transportation tariffs, to be effective within fifteen (15) days following the filing date, which unbundle the transportation services to be rendered by the utility, set forth the conditions of service, and establish just and reasonable rates for service. The proposed tariffs may be suspended and will become effective, revised or rejected upon the further order of the Commission.

5.1.1. Unless otherwise acted upon by the Commission, the tariffs filed pursuant to this section shall be considered interim provisions with respect to transportation which will be reviewed by the Commission in the entity's next general rate filing or upon complaint or the Commission's own motion.

5.1.2. All workpapers, data, and calculations which support and demonstrate the proposed rates and any other calculated numbers in the filed tariffs shall be filed with the proposed tariffs.

5.1.3. Small utilities whose total annual throughput is less than five hundred thousand (500,000) Mcf, excluding residential sales, and intrastate pipelines are exempt from the tariff filing requirements of this section. However, although exempt, such entities must offer services and charge rates with respect thereto in accordance with the provisions of this rule. This 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.

5.2. Services provided -

5.2.1. Mandatory services.

All natural gas utilities and intrastate pipelines shall offer firm and interruptible transportation service. Pooling shall be made available to interruptible transportation service customers, subject to the human needs limitation set forth in these Gas Transportation Rules.

5.2.2. Optional services.

All local distribution companies shall develop some method which ensures that all interruptible transportation customers, whether they are members of a pool or not, pay for all the costs they impose on the system including any balancing penalties. Utilities and intrastate pipelines may further propose to unbundle services associated with both firm and interruptible transportation which may be appropriate to their individual operating capabilities and characteristics.

5.2.3. Discrimination prohibited.

All transportation rates and policies with respect thereto shall be applied without unjust discrimination or preference, either as to affiliates or nonaffiliates.

5.2.4. Recourse to the Commission.

In the event the person requesting transportation service and the transporter cannot negotiate a mutually agreeable rate and/or terms of service, the dispute shall be resolved by the Commission upon a petition by either party.

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.

W. Va. Code R. § 150-16-5