Gas local distribution companies (LDCs) in Wisconsin must provide unbundled balancing services for transportation customers at cost-based rates under new rules adopted by state regulators. The new rules came out of a Wisconsin Public Service Commission (PSC) investigation of LDC tariff changes required as a result of pipeline restructuring at the federal level.
The PSC ruled that balancing is required where an LDC is served by a pipeline with balancing provisions that contain penalties that default to the LDC, and hence to system sales customers. It added that while balancing is a value-added service offering and highly desirable in a competitive market, LDCs should not be forced to provide the service to interruptible customers. Such an offering would upgrade the pipeline's service to those customers at the expense of the LDC's offerings under the Federal Energy Regulatory Commission's capacity-release program. The PSC also found competition in the balancing market "not robust enough" to allow market-based pricing at this time. Instead, it ordered the LDCs to develop tariffs with cost-based price caps and price floors, subject to review after two years. The LDCs were also directed to collect balancing costs from all sales customers, including interruptible users. Re Changes in Tariff Terms and Conditions Necessitated by Recent Changes in Structure of Pipeline Services, No. 05-GI-105, Sept. 27, 1994 (Wi.P.S.C.).
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