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Columbia Gas of Pa. Seeks to Apply BTU Content Adjustment to Monthly Billing MCFs

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October 4, 2010

Columbia Gas of Pennsylvania has filed a modification to Tariff Rule No. 15 - Measurement, to provide for a BTU content adjustment to the monthly determination of a customer's billing MCFs in addition to existing adjustments for pressure and temperature (Docket R-2010-2201974).

"This change is necessary to mitigate the impact on customers and the Company of increasing volumes of high BTU content gas that occur disproportionately across the service territory," Columbia said.

The increase in BTU content corresponds to the increased flow of Marcellus Shale gas into the supply being delivered to certain Pipeline Scheduling Points (PSPs).

"Unadjusted, disparate BTU content in the gas consumed by customers in one geographic region compared to the gas consumed in another region create an inequity in the total costs billed to different customer groups for the same service.  Additionally, the rate of Increase in the system-wide average BTU content causes material revenue erosion over which the Company has no control or influence," Columbia added.

The specific tariff language Columbia is seeking to add provides that:

"The Company shall derive the BTU content of the natural gas from equipment at delivery points located within each Pipeline Scheduling Point ('PSP') in the Company's service territory.  Each month, the Company shall calculate the six month rolling average BTU content for each PSP based on the six most recent readings for each PSP.  The Company shall calculate a BTU Adjustment Factor for each PSP by dividing the six month rolling average BTU content for that PSP by the historical average BTU content as established in the Company's most recent base rate proceeding, presently at 1.0535.  The Company shall adjust metered and estimated volumes by the BTU Adjustment Factor."

Furthermore, Columbia is seeking to modify the delivery requirement of Choice suppliers consistent with the above modification.  Currently, under Rules Applicable to Distribution Service Section 4.9.3, Choice suppliers are directed to deliver gas for their Choice aggregation group based upon Columbia's annual system average BTU content.  Choice aggregation groups are PSP specific.

Therefore, as proposed, the Choice supplier will deliver gas calculated on the basis of the most recent six-month rolling average BTU Content for each PSP-specific BTU content of each aggregation group.  "This will appropriately match supplier deliveries to the BTU content of gas delivered to their customers," Columbia said.

Columbia said that the changes would produce a net increase in revenues of approximately $3.7 million over the revenues received for the twelve months ended June 30, 2010.

   
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