The Connecticut Department of Public Utility Control (DPUC) has adopted new cost-of-service guidelines allowing natural gas local distribution companies (LDCs) to develop unbundled rate structures, including cost-based firm transportation rates. The DPUC also issued suggestions for refining existing supply and demand forecasting methods. According to the DPUC, current cost-of-service studies did not adequately address interclass subsidies at existing rate levels. The DPUC acknowledged, however, the difficulty in classifying fixed costs, concluding that capacity-related costs are incurred by LDCs to serve both peak period and annual volumes. Re Review of Connecticut Local Distribution Companies' Cost of Service Study Methodologies, Docket No. 94-11-12, Aug. 2, 1995 (Conn.D.P.U.C.).
In another case, the DPUC said "the market ... will call the gas companies to a rigorous standard of performance to sustain economic viability." Nevertheless, it said current planning practices left doubt as to whether LDCs completely understood and were prepared to face the potential risks and rewards inherent in a changing marketplace. The DPUC went on to list 35 separate deficiencies in technical forecasting tools and in broader issues (em such as the proper role of demand-side management in planning scenarios, and the relationship between resource planning and broader corporate and strategic objectives. Re DPUC Annual Review into Connecticut Gas Utilities' Forecasts of Demand and Supply, Docket Nos. 93-10-01 and 94-09-28, July 17, 1995 (Conn.D.P.U.C.).
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