(1)
Purchased gas adjustment
clause. Pursuant to Iowa Code section 476.6(11), purchased gas
adjustments shall be computed separately for each customer classification or
grouping previously approved by the
board. Purchased gas adjustments shall use
the same unit of measure as the utility's tariffed rates. Purchased gas
adjustments shall be calculated using factors filed in annual or periodic
filings according to the following formula:
PGA =(C X Rc) + (D X Rd) + (Z X Rz)+
Rb + E / S
PGA is the purchased gas adjustment per unit.
S is the anticipated yearly gas commodity sales volume for
each customer classification or grouping.
C is the volume of applicable commodity purchased for each
customer classification or grouping required to meet sales, S, plus the
expected lost and unaccounted for volumes.
Rc is the weighted average of applicable commodity prices or
rates, including appropriate hedging tools costs, to be in effect September 1
corresponding to purchases C.
D is the total volume of applicable entitlement reservation
purchases required to meet sales, S, for each customer classification or
grouping.
Rd is the weighted average of applicable entitlement
reservation charges to be in effect September 1 corresponding to purchases
D.
Z is the total quantity of applicable storage service
purchases required to meet sales, S, for each customer classification or
grouping.
Rz is the weighted average of applicable storage service
rates to be in effect September 1 corresponding to purchases Z.
Rb is the adjusted amount necessary to obtain the anticipated
balance for the remaining PGA year calculated by taking the anticipated PGA
balance divided by the forecasted volumes, including storage, for one or more
months of the remaining PGA year.
E is the per unit overcollection or undercollection
adjustment as calculated under subrule19.10(7).
The components of the formula shall be determined as follows
for each customer classification or grouping:
a. The actual sales volumes S for the prior
12-month period ending May 31, with the necessary degree-day adjustments, and
further adjustments approved by the
board.
Unless a utility receives prior board approval to use another
methodology, a utility shall use the same weather normalization methodology
used in prior approved PGA and rate case.
b. The annual expected lost and unaccounted
for factors shall be calculated by determining the actual difference between
sales and purchase volumes for the 12 months ending May 31 or from the current
annual lG-1 filing, but in no case will this factor be less than 0.
c. The purchases C, D, and Z which will be
necessary to meet requirements as determined in 19.10(1).
d. The purchased gas adjustments shall be
adjusted prospectively to reflect the final decision issued by the board in a
periodic review proceeding.
(2)
Annual purchased gas adjustment
filing. Each rate-regulated utility shall file on or before August 1
of each year, for the
board's approval, a purchased gas adjustment for the
12-month period beginning September 1 of that year.
The annual filing shall restate each factor of the formula
stated in subrule19.10(1).
The annual filing shall be based on customer classifications
and groupings previously approved by the board unless new classifications or
groupings are proposed.
The annual filing shall include all worksheets and detailed
supporting data used to determine the purchased gas adjustment volumes and
factors. The utility shall provide an explanation of the calculations of each
factor Information already on file with the board may be incorporated by
reference in the filing.
(3)
Periodic changes to purchased gas
adjustment clause. Periodic purchased gas adjustment filings shall be
based on the purchased gas adjustment customer classifications and groupings
previously approved by the
board. Changes in the customer classification and
grouping on file are not automatic and require prior approval by the
board.
Periodic filings shall include all worksheets and detailed
supporting data used to determine the amount of the adjustment.
Changes in factors S or C may not be made in periodic
purchased gas filings. A change in factor D or Z may be made in periodic
filings and will be deemed approved if it conforms to the annual purchased gas
filing or if it conforms to the principles set out in 19.10(6).
The utility shall implement automatically all purchased gas
adjustment changes which result from changes in Re, Rd, or Rz with concurrent
board notification with adequate information to calculate and support the
change. The purchased gas adjustment shall be calculated separately for each
customer classification or grouping.
Unless otherwise ordered by the board, a rate-regulated
utility's purchased gas adjustment rate factors shall be adjusted as purchased
gas costs change and shall recover from the customers only the actual costs of
purchased gas and other currently incurred charges associated with the
delivery, inventory, or reservation of natural gas. Such periodic changes shall
become effective with usage on or after the date of change.
(4)
Factor Rb. Each utility
has the option of filing an Rb calculation with its October-January PGA filings
but shall file an Rb calculation with its February filing and subsequent
monthly filings in the PGA year. If the anticipated PGA balance represents
costs in excess of revenues, factor Rb shall be assigned a positive value; if
the anticipated balance represents revenues in excess of costs, factor Rb shall
be assigned a negative value.
(5)
Take-or-pay adjustment. RescindedlAB 11/12/03, effective
12/17/03.
(6)
Allocations
of changes in contract pipeline transportation capacity obligations.
Any change in contractual pipeline transportation capacity obligations to
transportation or storage service providers serving Iowa must be reported to
the board within 30 days of receipt. The change must be applied on a pro-rata
basis to all customer classifications or groupings, unless another method has
been approved by the board. Where a change has been granted as a result of the
utility's request based on the needs of specified customers, that change may be
allocated to the specified customers. Where the board has approved anticipated
sales levels for one or more customer classifications or groupings, those
levels may limit the pro-rata reduction for those classifications or
groupings.
(7)
Reconciliation of underbillings and overbillings. The utility
shall file with the
board on or before October I of each year a purchased gas
adjustment reconciliation for the 12-month period which began on September 1 of
the previous year This reconciliation shall be the actual net invoiced costs of
purchased gas and appropriate financial hedging tools costs less the actual
revenue billed through its purchased gas adjustment clause net of the prior
year's reconciliation dollars for each customer classification or grouping.
Actual net costs for purchased gas shall be the applicable invoice costs from
all appropriate sources associated with the time period of usage.
Negative differences in the reconciliation shall be
considered overbilling by the utility, and positive differences shall be
considered underbilling. This reconciliation shall be filed with all worksheets
and detailed supporting data for each particular purchased gas adjustment
clause. Penalty purchases shall only be includable where the utility clearly
demonstrates a net savings.
a. The
annual reconciliation filing shall include the following information concerning
the hedging tools used by the utility:
(1) The
volume of physical gas being hedged by the utility and the strategies used by
the utility for hedging.
(2) The
reason each hedging strategy was undertaken (e.g., to hedge storage gas, a
floating price contract).
(3) A
statement as to how each hedging strategy was consistent with the local
distribution company's natural gas procurement plan.
(4) An explanation as to why the local
distribution company believes each hedging strategy was in the best interest of
general system customers.
(5) A
detailed explanation of the instruments used to implement each hedging strategy
(e.g., fixed-price purchases, future contracts, basis swaps, fixed-price swaps,
call options, put options, option collars).
(6) The amount of all commissions paid and to
whom those payments were made.
(7)
The amount of money or other collateral held in margin accounts or provided to
counterparties as credit support for hedging transactions.
(8) The amount of all other third-party
administrative or contracting costs paid and to whom those costs were
paid.
(9) The name of each hedging
counterparty and the amount of money paid to or received from each counterparty
with respect to hedging (e.g., option premiums, financial settlement of gains
or losses).
(10) Detailed reports
or schedules of each hedging strategy, including the following information for
each hedging instrument entered into by the utility:
1. The type of hedging instrument.
2. The date on which the hedging instrument
was entered into by the utility.
3.
The name of the counterparty with whom the hedging instrument was entered
into.
4. The notional quantity of
natural gas associated with the hedging instrument.
5. The notional delivery period associated
with the hedging instrument.
6. The
total amount of gains or losses realized by the utility on the hedging
instrument.
7. For each futures
contract or fixed-price purchase or sale, the fixed price paid or received by
the utility and the final settlement price for the futures contract.
8. For each swap contract, the fixed price or
index price paid by the utility, the index price or fixed price received by the
utility, and the final settlement price of each applicable index referenced in
the swap contract.
9. For each
option contract, the underlying futures contract or index price referenced in
the option contract, the strike price for the option, the premium paid or
received by the utility for the option, and the final settlement price for the
futures contract or index price referenced in the option.
10. For any other hedging instruments,
relevant economic terms, conditions, reference prices, and other factors to
support calculations of gains or losses associated with such
instruments.
11. For the total
natural gas volumes hedged during the PGA year, the fully hedged price of gas
and the price if the gas had not been hedged.
b. Any underbilling determined from the
reconciliation shall be collected through ten-month adjustments to the
appropriate purchased gas adjustment. The underbilling generated from each
purchased gas adjustment clause shall be divided by the anticipated sales
volumes for the prospective ten-month period beginning November 1 (based upon
the sales determination in subrule19.10(1)).
The quotient, determined on the same basis as the utility's
tariff rates, shall be added to the purchased gas adjustment for the
prospective ten-month period beginning November 1.
c. Any overbilling determined from the
reconciliation shall be refunded to the customer classification or grouping
from which it was generated. The overbilling shall be divided by the annual
cost of purchased gas subject to recovery for the 12-month period which began
the prior September 1 for each purchased gas adjustment clause and applied as
follows:
(1) If the net overbilling from the
purchased gas adjustment reconciliation exceeds the applicable percentage of
the annual cost of purchased gas subject to recovery for a specific customer
classification or grouping, the utility shall refund the overbilling by bill
credit or check starting on the first day of billing in the November billing
cycle of the current year The minimum amount to be refunded by check shall be
$10. Interest shall be calculated on amounts exceeding the applicable
percentage from the PGA year midpoint to the date of refunding. The interest
rate shall be the dealer commercial paper rate (90-day, high-grade unsecured
notes) quoted in the "Money Rates" section of the Wall Street Journal on the
last working day of August of the current year.
(2) If the net overbilling from the purchased
gas adjustment reconciliation does not exceed the applicable percentage of the
annual cost of purchased gas subject to recovery for a specific customer
classification or grouping, the utility may refund the overbilling by bill
credit or check starting on the first day of billing in the November billing
cycle of the current year, or the utility may refund the overbilling through
ten-month adjustments to the particular purchased gas adjustment from which
they were generated. The minimum amount to be refunded by check shall be $10.
This adjustment shall be determined by dividing the overcollection by the
anticipated sales volume for the prospective ten-month period beginning
November 1 as determined in subrule19.10(1)for the applicable purchased gas
adjustment clause. The quotient, determined on the same basis as the utility's
tariff rates, shall be a reduction to that particular purchased gas adjustment
for the prospective ten-month period beginning November 1.
(3) The overbilling percentage applicable to
utilities serving fewer than 10,000 customers is 5 percent. For utilities
serving 10,000 or more customers, the applicable percentage is 3
percent.
d. When a
customer has reduced or terminated system supply service and is receiving
transportation service, any liability for overcollections and undercollections
shall be determined in accordance with the utility's gas transportation
tariff
(8)
Refunds related to gas costs charged through the PGA. The
utility shall file a refund plan with the
board within 30 days of the receipt
of any refund related to gas costs charged through the PGA.
a. The utility shall refund to customers by
bill credit or check an amount equal to any refund, plus accrued interest, if
the refund exceeds $10 per average residential customer under the applicable
customer classification or grouping. The utility may refund lesser amounts
through the applicable customer classification or grouping or retain
undistributed refund amounts in special refund retention accounts for each
customer classification or grouping under the applicable PGA clause until such
time as additional refund obligations or interest cause the average residential
customer refund to exceed $10. Any obligations remaining in the retention
accounts on September 1 shall become a part of the annual PGA reconciliation.
b. The utility shall file with the
refund plan the following information:
(1) A
statement of reason for the refund.
(2) The amount of the refund with support for
the amount.
(3) The balance of the
appropriate refund retention accounts.
(4) The amount due under each customer
classification or grouping.
(5) The
intended period of the refund distribution.
(6) The estimated interest accrued for each
refund through the proposed refund period, with complete interest calculations
and supporting data as determined in paragraph19.10(8) "d. "
(7) The total amount to be refunded, the
amount to be refunded per customer classification or grouping, and the refund
per ccf or therm.
(8) The estimated
interest accrued for each refund received and for each amount in the refund
retention accounts through the date of the filing with the complete interest
calculation and support as determined in paragraph 19.10(8) "J. "
(9) The total amount to be retained, the
amount to be retained per customer classification or grouping, and the level
per ccf or therm.
(10) The
calculations demonstrating that the retained balance is less than $10 per
average residential customer with supporting schedules for all factors
used.
c. The refund to
each customer shall be determined by dividing the amount in the appropriate
refund retention account, including interest, by the total ccf or therm of
system gas consumed by affected customers during the period for which the
refundable amounts are applicable and multiplying the quotient by the ccf or
therms of system supply gas actually consumed by the customer during the
appropriate period. The utility may use the last available 12-month period if
the use of the actual period generating the refund is impractical. The utility
shall file complete support documentation for all figures used.
d. The interest rate on refunds distributed
under this subrule, compounded annually, shall be the dealer commercial paper
rate (90-day, high-grade unsecured notes) quoted in the "Money Rates" section
of the Wall Street Journal on the day the refund obligation vests. Interest
shall accrue from the date the rate-regulated utility receives the refund or
billing from the supplier or the midpoint of the first month of overcollection
to the date the refund is distributed to customers.
e. The rate-regulated utility shall make a
reasonable effort to forward refunds, by check, to eligible recipients who are
no longer customers.
f. The minimum
amount to be refunded by check shall be $5. This rule is intended to implement
Iowa Code section
476.6(11).
