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Update, Retail Supplier Executing "Orderly Exit" From Market
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Energo Power and Gas LLC is undergoing what it described as an, "orderly exit from the retail natural gas marketing business in New
York, New Jersey, Pennsylvania, and Maryland as a result of a sale of its retail natural gas accounts
and related assets to Sprague [Sprague Operating
Resources LLC]," Energo recently confirmed in a FERC filing
EnergyChoiceMatters.com was first to report on April 1 that a retail energy supplier under the Sprague Energy family of businesses was acquiring a natural gas customer book from Energo Power & Gas LLC (f/k/a Marathon Energy)
Energo and Sprague said in a FERC filing that, "In addition to the assignment of retail customers and gas supply agreements, the
[Energo-Sprague] Transaction includes the permanent release by Energo, as the releasing shipper, to Sprague as the
pre-arranged replacement shipper, of capacity under firm transportation agreements between
Energo and National Fuel Gas Supply Corporation ('NFGS') and Energo and Eastern Gas
Transmission and Storage, Inc. ('EGTS')."
Energo holds firm capacity on NFGS and EGTS
pursuant to capacity releases from local distribution companies (National Grid, Rochester Gas &
Electric, New York State Electric & Gas, and National Fuel Gas Distribution) as a natural gas
supplier in state-regulated customer choice/retail access programs.
Pursuant to the Transaction, Sprague will receive an assignment of gas supply agreements and retail customer contracts and
will pay Energo a lump-sum payment in consideration for the purchase of its retail natural gas
business in New York, New Jersey, Pennsylvania, and Maryland, including the subject firm
capacity.
The capacity release will become effective on or before May 1, 2025, depending on the
time required to assign the customers in each state retail access/customer choice program
consistent with state public utility commission laws regulations, or policies.
"Following the
permanent release, Energo will exit the retail natural gas business in the referenced states," Energo said
The companies requested from FERC a temporary waiver of
the Commission’s capacity release regulations in 18 C.F.R § 284.8, including, but not limited to
subparagraphs (b)(2) (maximum capacity release rates), (d) and (e) (posting and bidding), and related
transportation policies, including, but not limited to the shipper-must-have-title policy, the prohibition of buy/sell arrangements, and the prohibition of tying arrangements.
The companies said, "Although Sprague and Energo will make every effort to comply with the Commission’s
natural gas transportation regulations and policies, including the capacity release rules where
applicable, Petitioners nevertheless seek this waiver in the event that the transition of Energo’s
natural gas marketing portfolio as described above leads to an inadvertent or unavoidable violation
of the capacity release regulations or policies. Further, because Sprague and Energo will utilize
capacity releases in order to transfer Energo’s firm transportation capacity to Sprague, the
contemporaneous transfer of the gas supply agreements and customer agreements in connection with
such a release may be viewed as an improper tying of the capacity release to extraneous conditions
or cause the release to be considered a below maximum rate release subject to pre-release posting
and bidding or a prohibited above-maximum rate release.
Petitioners submit that a temporary
waiver will be sufficient to facilitate the timely transfer of all necessary agreements."
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April 22, 2024
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Copyright 2010-24 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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