Gas – Rates
Application
Apex Utilities Inc. (“Apex”) applied for approval of its 2022-2023 unaccounted-for gas (“UFG”) Rider E and Rider H, effective November 1, 2022. Apex calculated Rider E to increase from the currently approved value of 0.97 percent to 1.02 percent, and Rider H to increase from 0.98 percent to 1.03 percent.
Decision
The AUC approved a UFG rate Rider E of 1.02 percent and Rider H of 1.03 percent, effective November 1, 2022.
Applicable Legislation
AUC Rule 028: Natural Gas Settlement System Code Rules
Pertinent Issues
For various reasons, in the process of delivering natural gas to customers through the distribution system, some gas goes unaccounted for and a variance results between the amount of natural gas that goes into the distribution system and the deliveries received by customers. The difference is referred to as UFG. In accordance with the current regulatory framework, the cost of UFG is ultimately passed on to the customers. Rider H recovers UFG in-kind from all retailers and default supply providers that use the Apex distribution system. Rider E recovers UFG associated with producer transportation service to ensure the quantity of gas Apex delivers for producer transportation customers is kept in balance with the quantity of gas Apex receives from these customers. Rider E is also used in the determination of Apex’s gas cost recovery rate (Rider D) and third-party transportation rate (Rider G).
Both riders are similarly designed and follow the same AUC-approved methodology to calculate the amounts. Specifically, Rider E is calculated annually using the most recent five-year average of Apex’s annual UFG percentages, which are derived by dividing UFG (system receipts minus deliveries) by system receipts. Rider H is calculated using the most recent five-year average of Apex’s annual UFG percentages but uses system deliveries as the divisor in the calculation, as required by AUC Rule 028.
The AUC recognized that, due to the many factors that impact UFG, the UFG amount will fluctuate over time. The AUC, therefore, accepted the percentage increase from the 2021-2022 period. The AUC is satisfied with Apex’s explanation of the most significant causes of UFG for the reporting period. The AUC directed Apex to provide relevant information in the next UFG application.
