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Capacity Assignment
Q. How is capacity assigned? A. Capacity will only be assigned for customers that converted from sales service to transportation service after February 1, 1999. An initial block of 500 MMBtu of capacity is assigned when a marketer’s total contract quantity (“TCQ”) reaches or exceeds a threshold of 400 MMBtu in any of Bay State’s three service territories (Brockton, Springfield and Lawrence). Capacity will only be assigned in those service territories that exceed the threshold. Additional capacity increments of 200 MMBtu are added when a marketer’s TCQ increases by 150 MMBtu over the previous assignment. Most pipeline and storage resources are released to the marketers via the pipeline’s electronic bulletin board (“EBB”). Storage inventory gas is released via the EBB or electronic mail. Q. How can I determine how much capacity I will be assigned? A. The amount of capacity assigned depends on the customer’s peak day demand and rate class. Bay State’s and Northern’s web sites list the “Capacity Allocation %” page which shows how much pipeline, storage and peaking is allocated by rate class by service territory. These percentages are adjusted each November. In addition, the web page “Capacity Assignment” shows the components of all capacity paths. These paths change as old contracts expire and new contracts are signed. Additional information regarding capacity assignment information is listed in Section 13 of Bay State’s Terms & Conditions, which is also available on Bay State’s web site. Q. What is the cost of capacity that is assigned to me? A. The rates for capacity are listed on the web site. However, these rates are only updated annually each November. You can get the latest rates directly from the pipelines web sites or you can contact each pipeline in order to get on a mailing list for any changes in rates. In addition, the Federal Energy Regulatory Commission has a web that lists all pipeline rates at http: http://www.ferc.gov/industries/gas/gen-info/fastr/index.asp. Q. Are the capacity costs effective every-month of the year? A. Most pipeline and storage costs are effective twelve months a year. However, there are two exceptions. Paths 15 and 24 are available only from November through and March. From April through October there is no charge on path 15 and the total cost on path 24 is approximately $10 per MMBtu. Additional information on path 24 is available on the Company’s web site under “Storage Contracts”. Peaking costs are effective from November through April only. Q. What if capacity released to me is not picked up? A. A capacity release that is not picked up will be directly billed to the marketer by Bay State. Q. Do I have any options regarding released pipeline and storage capacity? A. All marketers have the option of electing the capacity mitigation service which attempts to reduce assigned releasable costs by having the LDC release this capacity to a third party. Under this service the marketer remains responsible for the cost of resources that are not released or released at less than max rate. In addition, the LDC will retain 15% of the revenue of all capacity release transactions. For more information on this service, please contact Don Tulchinsky at (508)836-7259. Storage Q. How is storage assigned? A. Each marketer will be assigned a pro rata share of withdrawal capacity, injection capacity and inventory capacity. In addition, each marketer will be allocated a pro rata share gas in inventory. It is up to the marketer to manage this gas and to stay within the injection and withdrawal limits stated by each storage owner (i.e. pipeline company). At the end the withdrawal season, marketers are responsible for refilling their storage facility. Q. How are storage inventory costs assigned? A. Storage inventory costs are based on each local distribution company’s (LDC) weighted average cost of gas (‘WACOG’) and are billed directly to the marketer based on their pro rata share of gas in inventory. Adjustments will then be made each month as new customers are added. These monthly adjustments will be based on Bay State’s inventory level. For example, if a marker is assigned an additional 500 dekatherms of storage capacity, and Bay State’s inventory level is at 50%, then the marketer/ supplier would be charged for 250 dekatherms of gas. Company Managed Resources Q. How do company managed supplies work? A. Company managed supplies are Canadian supply contracts that can not be released. These contracts are bundled from the Canadian border to the citygate. Each LDC will nominate these supplies on behalf on the marketers. The downstream transportation from the Canadian border to the citygate will not be released. Instead, Bay State will bill the marketer for assigned transportation capacity as well as the supply. Company managed supplies are must take gas and must be nominated every day. Q. How does company managed storage work? A. Company managed storage reflects a storage inventory contract that can not be released. Company managed storage is similar to a company managed supply in that it is bundled to the citygate. However, it is not a must-take resource and the actual gas in inventory is not assigned to the marketer. Instead, the cost for the gas withdrawn is billed each month. In addition, the LDC will be responsible for refilling company managed storage. Peaking Q. How are peaking costs determined? A. Demand charges for peaking resources are established prior to the winter period and are in effect from November through April. Commodity costs are estimated based on the LDC’s forecasted dispatch and are posted on web site. At the end of the month, estimated and actual commodity costs are then trued-up. Q. How does the peaking rule curve work? A. The peaking rule curve (“PRC”) pertains to the annual contract quantity (“ACQ”) and sets limits on the amount of gas that can be taken from peaking resources each month. For instance, the December rule curve indicates that at least 90% of the ACQ must remain by the end of the month. A nomination that exceeds the rule curve will not be accepted. Q. Can peaking resources be banked from month to month? A. No. Only the amount of gas allowed in the PRC can be taken during a given month. Gas that is not taken in a given month can not be reserved for a future month. Q. The PRC does not list the month of April. How much peaking gas is available during this month? A. Technically, there is no available peaking gas available in April. However, Massachusetts does get an occasional burst of very cold weather during the month of April. Because of this, Bay State will make a best efforts attempt to provide one to two days of peaking service during the month. If you would like to take peaking gas during April, and have not exceeded your total peaking quantity, please contact Chris Kahl at (508)836-7269 or ckahl@nisource.com before submitting your nomination. 
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