The Florida Public Service Commission has approved a set of conservation programs proposed by Peoples Gas System Inc., the only natural gas local distribution company in the state required by law to offer such programs.
The LDC had recently updated its existing program evaluation data in conformance with new review criteria adopted by the commission in 1995. Checking each program for cost effectiveness, the commission permitted the LDC to use gas supply costs that were lower than those reflected in the company's purchased-gas adjustment rate. The commission agreed with the company that certain charges included in the PGA formula (i.e., unused demand charges, swing supply costs, penalty charges and no-notice transportation service costs) did not vary with the consumption attributable to any of the conservation programs, and therefore should be excluded from the cost-effectiveness calculation.
According to the commission, if the gas-supply costs used were equal to the PGA, then "several of Peoples' conservation programs are not cost effective." Re Peoples Gas System Inc., Docket No. 960557-GU, Order No. PSC-97-0042-FOF-GU, Jan. 9, 1997 (Fla.P.S.C.).