Concluding an investigation of supply-cost recovery for the Associated Natural Gas Co., a natural gas distribution company (LDC), the Missouri Public Service Commission (PSC) has found imprudent the LDC's long-term supply contract with an affiliated supplier, SEECO, Inc. The PSC excluded from adjustment clause recovery one-half the premium paid above spot-market prices under the contract for firm fixed-price swing-gas supply. The PSC said the LDC failed to properly evaluate other gas suppliers prior to entering into the contract or to document its gas purchasing practices. The PSC refused, however, to require the LDC to institute a bidding procedure for future supplies, finding that such a directive would abrogate the contract under "regulatory out" and "last look" provisions.The PSC also rejected the LDC's request to recover prior period pipeline take-or-pay (TOP) charges from its interruptible transportation customers. According to the PSC, the LDC had overallocated its TOP liability and failed to seek tariff revisions necessary to bill the customers under its actual cost-adjustment mechanism. The LDC was, however, authorized to begin collecting TOP costs from the interruptible transportation customers on a prospective basis after the effective date of appropriate tariff revisions. Re Associated Natural Gas Co., Case No. GR-90-38, et al., July 14, 1995 (Mo.P.S.C.). t
Phillip S. Cross is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.
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