LDC Minimus, LDC Insipidus,
LDC Robustus? Which Would You Rather Be?
Post-Order 636 evolution depends on aggressive regulatory and legislative reform.
"Get out of...
The New Jersey Board of Public Utilities (BPU) has approved a two-year capacity-release program for Public Service Electric and Gas Co. (PSE&G), a natural gas local distribution company (LDC), as part of an ongoing effort to unbundle gas services. Other LDCs in the state have already incorporated capacity-release programs, but PSE&G argued that it was without surplus year-round pipeline capacity. The LDC said gas marketers should obtain their own capacity at lower rates through either long-term contracts with the pipelines or through capacity release from other parties. The marketers countered that interstate capacity was being paid for by existing firm-sales customers and should remain available to those customers if they chose to purchase from a third-party supplier. The approved plan requires the LDC to release up to 100,000 dekatherms of interstate capacity daily from November 1, 1995, through October 31, 1997. Because PSE&G currently has no surplus capacity, it must contract for winter-term interstate capacity in quantities equal to commitments for capacity release from marketers. Marketers will pay for the released capacity at a rate equal to the LDC's weighted average cost of interstate transportation, at 100 percent load factor. Re Public Service Electric & Gas Co., Docket No. GT94040095, Oct. 20, 1995 (N.J.B.P.U.).
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