innovative methods to extend service to new natural gas customers nasuca 2015 – philadelphia, pa...
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![Page 1: Innovative Methods to Extend Service to New Natural Gas Customers NASUCA 2015 – Philadelphia, PA David C. Weaver Vice President, Regulatory Affairs](https://reader035.vdocuments.net/reader035/viewer/2022062716/56649de65503460f94adf8e8/html5/thumbnails/1.jpg)
Innovative Methods to Extend Service to
New Natural Gas Customers
NASUCA 2015 – Philadelphia, PA
David C. WeaverVice President, Regulatory
Affairs
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EnergyAmerica’s
Natural Gas Utilities Deliver
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AGL Resources
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Innovative methods to extend natural gas service
Why is this topic important?•Sound state policy to extend service to underserved and unserved regions
• Natural gas supply is abundant • Long term prices are low and stable
•Customer Choice drives the decision to convert to natural gas
– Lower cost: Heating oil and propane conversions– Environmentally beneficial
•Direct use of gas more efficient than electricity generated from natural gas
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Innovative methods to extend natural gas service
Where are the customers?•Customers seeking conversion from propane or heating oil•New growth corridors
• Long line main extensions to developing areas
•Near main extensions• Former natural gas customers• Customers in the “donut hole”• Located just beyond normal line extension
distance
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Innovative methods to extend natural gas service
Public Policy topics•Business case for adding customers
• Every business wants to growth – utilities are no different
• Customer growth allows inflationary/people costs to be addressed without more frequent rate cases
•Each utility has a traditional line extension formula to meet new customer demand
• CIAC is not simply an economic decision, it’s a cash availability issue
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Examples of Recent Initiatives
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Innovative methods to extend natural gas service
Florida• Area Expansion Program (AEP)
• New Customers served from main extension ratably pay CIAC over 10 years
• Company can reset lower rates every 3 years to reflect customer growth
• Surcharged tied to the premise during 10 year payback period
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Innovative methods to extend natural gas service
Georgia• Universal Service Fund (1997)
• Funded by Asset Management proceeds and interruptible revenues
• STRIDE Integrated Customer Growth Program (i-CGP)(2010)• Strategic Growth Corridors• Supplemental Line Extension• Funded thru pre-approved surcharge on all
firm customers
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Innovative methods to extend natural gas service
Mississippi• Two state LDC’s have deployed supplemental growth
riders to extend mains for industrial projects• Investments capped at $5mm/year above normal run
rate capital deployment. Utility earns additional 3% above authorized ROE
• Customers repay investment via rider over 10 years that is trued up and reallocated each year
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Innovative methods to extend natural gas service
Pennsylvania• Leatherstocking Gas
• Regional community build-out fee capped @$3/Mcf for 10 years as a means to get shale gas to more cities.
• UGI “GET Gas” program• $15 mm/year to install mains and services to
extend service to unserved regions• Surcharge over 10 year payback period
• Columbia Gas, Peoples Gas, and Equitable • Programs add between $35 and $100 month to
customer bills to finance CIAC
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Innovative methods to extend natural gas service
Connecticut• Three LDCs have plan to connect 280,0oo
customers over 10 years• Rates calculated over a 25 year payback
• Near mains: 10% rate premium• Remote locations: 30% rate premium
• For regional extension, 60% of prospective customers must commit upfront
• Rate cap at 5% annual increase, or 15% increase over 10 year program
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Kyle RogersVice President, State AffairsAmerican Gas Association202) [email protected]
David C. WeaverVice President, Regulatory AffairsAGL Resources(404) [email protected]
Thank you!
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Thank you!
Follow up questions:
Kyle Rogers David C. Weaver State Affairs VP, Reg Affairs
American Gas Association AGL Resources
(202) 744-5371 (404) 584-3173