PSC Order Says: Keep Alternative fuel Handy

ALBANY-Certain commercial and industrial natural-gas customers may have to make plans to use alternative fuels this winter, following measures taken by the state Public Service Commission (PSC) recently.

The measures are an outgrowth of a June 14 letter from PSC's Chairman Maureen O. Helmer

directing the local gas-distribution utilities throughout the state to take several actions related to the utilities' "interruptible customers."

Interruptible customers are those large commercial and industrial natural-gas users that, during times of constrained gas supply, are required to stop using natural gas and instead use alternate fuels to ensure the utilities can continue to serve their smaller-use customers, including residents. In return, interruptible customers are offered a lower rate for gas service.

"After a series of warm winters, many interruptible gas customers in New York assumed that fuels would be available at reasonable prices on demand," Helmer noted. "Two weeks of cold weather last winter forced unprepared interruptible customers to either remain on utility systems or to attempt to purchase alternate fuel supplies on the spot market in competition with other consumers, affecting natural-gas supplies and prices. A repetition of last winter's situation is unacceptable."

Matthew Maguire, director of communications for the Business Council of New York State, reinforces Helmer's statement: "It's good to remind [those with interruptible service] to have backup energy supplies available." Maguire says that the Business Council attended a hearing on this matter and "we chose not to oppose the ruling at this time. Basically, the PSC is reinforcing the nature of interruptible gas service, reacting to concerns about the supply of energy and the long-term supply of energy in New York State."

PSC's action requires that alternate fuels be on site at the start of the winter season, and it approved a three-pronged approach to be implemented this fall by local gas utilities. Each utility will:

* ensure that its interruptible customers have the equivalent--either through storage or some other arrangements--of a minimum seven- to 10-day supply of alternate fuel, depending on each utility's interruptible criteria, by October I

* implement a plan to check compliance with interruptible customer requirements - establish a higher rate for natural-gas service to be charged those interruptible customers found to be not in compliance with requirements

The Commission stressed that its sevento 10-day supply requirement does not mean that interruptible customers lacking

such storage capability necessarily have to construct facilities. Rather, the customers need to provide evidence of meeting the requirement in some equivalent manner. Further, interruptible customers will be on notice that they must be prepared to meet interruptions of greater than the minimum standard set by the Commission if conditions warrant.

Each utility is required to implement a special customer information plan to ensure that all interruptible customers are aware of the approved measures. The utilities affected are Central Hudson Gas & Electric Corporation; Consolidated Edison Company of New York, Inc.; KeySpan Energy Delivery, National Fuel Gas Company; New York State Electric and Gas Corporation; Orange and Rockland Utilities, Inc.; and Niagara Mohawk Power Corporation.

"In addition to the measures adopted today for interruptible customers, I have asked staff to closely monitor the utilities to ensure that interruption in service is used strictly as a reliability measure and not for any economic gain," Helmer said. "Further, I have asked staff to work with the New York State Energy Research and Development Authority in communicating our concern to the U.S. Department of Energy regarding relatively low oil reserves in the Northeast this year."

In a related matter, PSC approved a requirement that marketers serving naturalgas customers in New York have fixed transmission pipeline capacity for the months of November through March to ensure that they can deliver gas to their customers without any interruption in service during the critical winter months, and PSC adopted a set of procedures designed to ensure compliance by energy marketers in the state.

Copyright Central New York Business Journal Sep 01, 2000
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