Spring 2017 MASTER...Spring 2017 Marketer/Supplier Teleconference Thursday, March 16, 2017 AGENDA...

National Fuel Gas Distribution Corporation Spring 2017 Marketer/Supplier Teleconference

Thursday, March 16, 2017

AGENDA

2:00 pm Welcome and Introduction Dave Wolford

2:05 pm Operational Update Dave Wolford

2:20 pm Capacity Update Bob Michalski

2:30 pm Rates & Regulatory Update Mike Novak

o Federal Regulatory Update o NY Regulatory Update o PA Regulatory Update

2:50 pm General Discussion All

3:00 pm Closing Dave Wolford

National Fuel

National Fuel Gas Distribution Corporation

Spring 2017

Marketer/Supplier Teleconference

Operational Update

Presentation by: Dave Wolford

March 16, 2017

1

National Fuel Transportation CustomersTransportation Customers

STAND-ALONE CUSTOMERS

MONTHLY (MMT) –

New York 1

Pennsylvania 0

DAILY (DMT) –

New York 0

Pennsylvania 76

TOTAL 77

AGGREGATION CUSTOMERS

TOTAL NFGDC 137,141

New York (STBA) 106,168

New York (DMT) 50

Pennsylvania (MMNGS) 3,250

Pennsylvania (SATS) 27,596

TOTAL 137,064

2NFGDC Spring 2017 Marketer

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National Fuel

80,000

100,000

120,000

140,000

Nu

mb

er o

f C

ust

om

ers

National Fuel Gas DistributionNY STBA Enrollment

ResidentialNon-ResidentialTotal

0

20,000

40,000

60,000

Sep

-06

Mar

-07

Sep

-07

Mar

-08

Sep

-08

Mar

-09

Sep

-09

Mar

-10

Sep

-10

Mar

-11

Sep

-11

Mar

-12

Sep

-12

Mar

-13

Sep

-13

Mar

-14

Sep

-14

Mar

-15

Sep

-15

Mar

-16

Sep

-16

Mar

-17

Nu

mb

er o

f C

ust

om

ers


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National Fuel

20,000

25,000

30,000

35,000

Nu

mb

er o

f C

ust

om

ers

National Fuel Gas DistributionPA SATS Enrollment

Residential

Non-Residential

Total

0

5,000

10,000

15,000

Sep

-10

Dec

-10

Mar

-11

Jun

-11

Sep

-11

Dec

-11

Mar

-12

Jun

-12

Sep

-12

Dec

-12

Mar

-13

Jun

-13

Sep

-13

Dec

-13

Mar

-14

Jun

-14

Sep

-14

Dec

-14

Mar

-15

Jun

-15

Sep

-15

Dec

-15

Mar

-16

Jun

-16

Sep

-16

Dec

-16

Mar

-17

Nu

mb

er o

f C

ust

om

ers


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National Fuel

2,500

3,000

3,500

4,000

Nu

mb

er o

f C

ust

om

ers

National Fuel Gas DistributionPA MMNGS Enrollment

TotalResidentialNon-Residential

0

500

1,000

1,500

2,000

No

v-06

Mar

-07

Jul-

07

No

v-07

Mar

-08

Jul-

08

No

v-08

Mar

-09

Jul-

09

No

v-09

Mar

-10

Jul-

10

No

v-10

Mar

-11

Jul-

11

No

v-11

Mar

-12

Jul-

12

No

v-12

Mar

-13

Jul-

13

No

v-13

Mar

-14

Jul-

14

No

v-14

Mar

-15

Jul-

15

No

v-15

Mar

-16

Jul-

16

No

v-16

Mar

-17

Nu

mb

er o

f C

ust

om

ers


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National Fuel

87.0

80.3

91.2

99.9 94.6

89.9

80.0

100.0

120.0

NEW YORK12 Month Totals

(Through December 2016) Throughput Transported

43.5 41.6 46.9

51.9 49.4 46.3

0.0

20.0

40.0

60.0

2011 2012 2013 2014 2015 2016

BC

F


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National Fuel

42.1 39.5

45.2

49.9

46.3 44.4

28.3 30.0

40.0

50.0

PENNSYLVANIA12 Month Totals


21.1 21.3

25.3

28.3 26.0 25.3

0.0

10.0

20.0

30.0

2011 2012 2013 2014 2015 2016

BC

F


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National Fuel

129.1

119.8

136.4

149.7

140.9 134.3

80.2

100.0

120.0

140.0

160.0

NFGDC YEARLY DELIVERIES12 Month Totals


64.6 62.8

72.2 80.2

75.4 71.6

0.0

20.0

40.0

60.0

80.0

2011 2012 2013 2014 2015 2016

BC

F


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National Fuel

50.0%51.8% 51.4% 52.0% 52.2% 51.5%

40%

50%

60%

NYTRANSPORTATION PERCENTAGE

OF 12 MONTH DELIVERIES

0%

10%

20%

30%

Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16


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National Fuel

50.1%53.9%

56.1% 56.7% 56.1% 56.9%

40%

50%

60%

PATRANSPORTATION PERCENTAGE


0%

10%

20%

30%



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National Fuel

50.1% 52.5% 52.9% 53.6% 53.5% 53.3%

40%

50%

60%

NFGDC TRANSPORTATION PERCENTAGE


0%

10%

20%

30%



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National Fuel

Marketer/Supplier Operations SupportMarketer/Supplier Operations Support• NFGDC provides a full range of business tools and support services:

– NFGDC Website:

http://www.nationalfuelgas.com/marketers/default.aspx

– Operating Procedures Manuals:

• GTOP, TSS, TSS Reports, Aggregator, Market Pool, Production Pool

– Transportation Scheduling System – TSS

– Training– Training

– Help Desks

• Scheduling: (716)-857-7232

• Hours: 7:30 am – 5:00 pm on business days

• email: [email protected]

• Billing: (716)-857-7432

• Hours: 8:00 am – 4:30 pm on business days

• email: [email protected]

– After Hours Scheduling Support: (716)-857-7232


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National Fuel

New York & Pennsylvania OperationsNew York & Pennsylvania Operations

• Daily Delivery Quantities (DDQs)

– DDQs are customer usage estimates based on usage history, weather

forecasts, actual measurement

• Customer usage estimates need to be as accurate as possible

• Meet daily delivery requirements (DDQs) to serve marketMeet daily delivery requirements (DDQs) to serve market

• Production Daily Quantities (PDQs)

– PDQs are estimates of local production based on production volume

history

• Local production estimates need to be as accurate as possible

• Deliver upstream supplies at primary firm or acceptable alternate

delivery points


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• Market Pool and Production Pool operators are responsible for monitoring

actual flowing volumes and adjusting DDQs and PDQs via TSS

• Monitor storage inventories

– Required end of month storage inventory percentages are minimums,

not targets

End of Month Minimum % FullApril 0%April 0%

May 12%

June 29%

July 46%

August 63%

September 80%

October 95%

November 90%

December 75%

January 50%

February 28%

March 0%


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National Fuel


• REMINDER: National Fuel provides PA DMT pool operators, and requesting

customers, with official notification of instances of missing or incomplete

customer telemetered readings via the daily Customer Transportation

Statements (CTS).

– The following statement appears at the bottom of each CTS:----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|NOTE:WHEN 'USAGE EST.' IS SHOWN UNDER THE STMT BASIS COLUMN ON THIS REPORT, IT IS THE MARKET POOL OPERATOR'S RESPONSIBILITY TO OBTAIN A |

| 10:00 A.M. READ DIRECTLY FROM THE CUSTOMER. THIS READ SHOULD BE E-MAILED TO [email protected]. THIS IS A PA GTOP REQUIREMENT.|

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


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National Fuel

SYSTEM MAINTENANCE ORDERSSYSTEM MAINTENANCE ORDERS

* TO MAINTAIN SYSTEM OPERATIONAL INTEGRITY *

• SYSTEM ALERT

• OFO

• UNAUTHORIZED OVERRUN

• CURTAILMENT


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National Fuel Operational Update

Winter 2016 – 2017(Gas days inclusive)

• System Alerts – 1 Cold Weather

• December 15

– 3 Warm Weather

• February 24-25

• February 28• February 28

• March 6

– 3 DDQ Averaging

• December 17-19

• December 30 - January 3

• March 4-6

• OFOs– None


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National Fuel

DailyDaily Delivery Quantity (“DDQ”) Averaging Delivery Quantity (“DDQ”) Averaging

• DDQs are typically averaged for weekends and

holidays, subject to operational requirements.

• If DDQs will not be averaged, a System Alert will be • If DDQs will not be averaged, a System Alert will be

posted on the business day prior to the day that

weekend/holiday DDQs are to be provided.


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National Fuel

Split Weekend DDQ AveragingSplit Weekend DDQ Averaging

Apr 2017 May 2017

26 27 28 29 30 1

Wed Thu Fri Sat Sun Mon

• Wed: Notice given if DDQs will not be averaged

• Thu: DDQs posted for Fri – Sun (Apr) & Mon (May)

Gas trades on ICE for Fri - Sun

• Fri: Gas trades on ICE for Mon

Wed Thu Fri Sat Sun Mon

DDQs Averaged


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National Fuel


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Winter 2016Winter 2016--2017 Operations Summary2017 Operations Summary

• November – February, No Issues.

• March – No issues at this point.March – No issues at this point.


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National Fuel

Questions?Questions?


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National Fuel


Spring 2017 Marketer/Supplier

Teleconference

Capacity UpdateCapacity Update

Presentation by: Bob Michalski

March 16, 2017

26

National Fuel

Discussion Topics

• NY STBA - Mandatory Upstream Transmission

Capacity (MUTC) and Intermediate ESS

• PA SATS - Released Transmission Capacity

(RTC) and Intermediate ESS(RTC) and Intermediate ESS


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National Fuel

NY STBA Capacity

• Serves Requirements for up to 62 HDD:

�67% MUTC, released at weighted average cost of

capacity (WACOC)capacity (WACOC)�15% NFGSC ESS, released at maximum rate

�85% TGP, released at rate that blended with the ESS

component achieves the WACOC rate:

• TGP Zone 4 Rose Lake – up to 34,000 Dth/day available

• TGP Zone 5 Nashville – additional capacity, as required

�33% Intermediate - ESS, maximum rate release


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National Fuel

NY STBA Capacity


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National Fuel

NY MUTC TGP Released Capacity

Date Z0-4 Z1-4 Z4-4 Total Z4 Z1-5

Apr 2012 100% 100%

Apr 2013 33% 38% 29% 100%

Apr 2014 17% 20% 63% 100%

Apr 2015 17% 19% 59% 95% 5%

Apr 2016 18% 21% 61% 100% 0%

Apr 2017 18% 21% 61% 100% 0%


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National Fuel

NY MUTC WACOC & Release Rates

Date WACOCESS Max

Rate/Dth

TGP Release

Rate/Dth

WACOC Change

Since Apr 2012

Apr 2012 $10.8359 $4.1649 $11.9219 -Apr 2012 $10.8359 $4.1649 $11.9219 -

Apr 2013 $10.5102 $4.4947 $11.4895 (3%)

Apr 2014 $9.8099 $4.4817 $10.6773 (10%)

Apr 2015 $9.4025 $4.4817 $10.2709 (13%)

Apr 2016 $10.045 $4.3924 $11.0425 (7%)

Apr 2017 $9.4851 $4.3032 $10.3996 (12%)


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National Fuel

PA SATS Capacity

• Serves Requirements for up to 62 HDD

• Capacity mix filed for August 2017:

�47% RTC, TGP capacity released at WACOC�47% RTC, TGP capacity released at WACOC

�53% Intermediate ESS released at max. rate


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National Fuel

PA SATS Capacity


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National Fuel

PA SATS TGP Release Rate

Date Z1 – Z4 Z0 – Z4 TGP Release Rate/Dth* Change

Aug 2012 100% $14.9823 -

Aug 2013 100% $13.8762 (7%)

Aug 2014 100% $11.7962 (21%)

Aug 2015 100% $10.1388 (32%)

Aug 2016 100% $9.6257 (36%)

Aug 2017** 100% $9.5277** (36%)

*PA TGP Release Rate = PA WACOC Rate.

** 1307(f) Filed Rate/Dth


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National Fuel



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National Fuel


Spring 2017 Marketer/Supplier Teleconference

Rates & Regulatory Update

Presentation by: Michael Novak

March 16, 2017

36

National FuelRates & Regulatory Update

Federal Update

Pipeline Rate Events

• RP16-300 - FERC initiated a Natural Gas Act section 5

investigation of the rates charged by Empire Pipeline,

Inc. (“Empire”) on 1/21/2016.Inc. (“Empire”) on 1/21/2016.

– FERC Orders accepting an unopposed Stipulation and

Agreement (“Settlement”) were issued on 10/20/2016 and

12/13/2016.

– The Settlement provides for a final Empire Connector

Reservation Rate reduction to go into effect 10/1/2017.


Teleconference


Federal Update

Pipeline Rate Events• Several pipelines have filed various tracker filings with

changes to become effective 4/1/2017; most of these deal with fuel retention.

NFGSC Fuel Tracker originally to become effective 4/1/2017; – NFGSC Fuel Tracker originally to become effective 4/1/2017; now 5/1/2017.

• RP17-519 – Texas Eastern PCB Tracker

– Stipulation and Agreement on tracker true-up costs.

– Tracker surcharge removed from rates effective 4/1/2017.


Teleconference


New York Update

Case 12-M-0476 - Proceeding on Motion of the Commission to Assess Certain Aspects of the Residential and Small Non-Residential Retail

Energy Markets in New York State (“NY Retail Energy Markets Case”)

12/15/2016 - PSC issues Order Adopting a Prohibition on Service to Low-Income Customers by Energy Service Companies (“LI Prohibition”)

• Utilities will communicate to ESCOs serving Assistance Program Participant • Utilities will communicate to ESCOs serving Assistance Program Participant (APP) customers which accounts they are no longer eligible to serve;

• Utilities letters will be sent to ESCO APP customers informing them that they will be returned to utility service;

• ESCOs will be required to de-enroll any APP customer accounts identified by the utilities when existing contracts with such customers expire;

• ESCOs may petition the PSC for a waiver to serve APP customers under guaranteed savings program offers.

LI Prohibition Implementation scheduled for 5/26/2017.


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New York Update

Case 12-M-0476 – Prohibition Order Implementation

• Implementation Bulletins are posted on Distribution’s web page at:

http://nationalfuelgas.com/marketers/Case12-M-0476/default.aspx

– Questions?


Teleconference


New York Update

Case 15-M-0127 - In the Matter of Eligibility Criteria for Energy Services Companies.

2/23/2016 - PSC issues Order Resetting Retail Energy Markets and Establishing Further Process (“Reset Order”);

• For gas customers with consumption less than 750 Mcf/year, the order extended the general provisions set forth in 12-M-0476 for APP Customers to extended the general provisions set forth in 12-M-0476 for APP Customers to all mass-market (residential and small non-residential) customers.

12/2/2016 – PSC issues Notice of Evidentiary and Collaborative Tracks and Deadline for Initial Testimony and Exhibits.

2/15/2017 – ALJ issues Ruling on Schedule and Procedure.

• Discovery Process is underway…

– May 8, 2017 Pre-filed Direct Testimony and Exhibits

– June 5, 2017 Rebuttal Testimony and Exhibits

– June 26, 2017 Evidentiary Hearing


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New York Update

Case No. 14-M-0224 – Community Choice Aggregation (CCA) Programs

4/21/2016 - PSC issues Order Authorizing Framework for Community Choice Aggregation Opt-Out Program

• The Order sets forth a process for local governments to follow if they form CCAs to procure energy supply services on behalf of customers within their boundaries;

• Customers not already receiving ESCO service would be enrolled with the CCAs by • Customers not already receiving ESCO service would be enrolled with the CCAs by default unless they chose to opt out of the CCA to retain their current energy provider;

• Utilities will provide aggregated customer data/information to CCAs during the organizational phase;

• Utilities will provide more detailed customer data to CCAs when the enrollment phase commences.

On 8/5/2016, Distribution submitted a tariff filing proposing a one-time $15 fee for each customer enrolled in CCA service. The effective date for the fee has been postponed to 7/1/2017.


Teleconference


New York Update

Case 16-G-0257 – Proceeding on Motion of the Commission as to

the Rates, Charges, Rules and Regulations of National Fuel Gas

Distribution Corporation for Gas Service (“NY Rate Case”)

• On 4/28/2016, Distribution filed a request with the New York State Public

Service Commission (“Commission”) to increase utility base rates for the first

time in more than 9 years. time in more than 9 years.

• On 1/23/2017, the ALJ’s Recommended Decision was issued.– Briefing has been completed.

• An Order is anticipated on 4/20/2017 with new rates becoming effective on

4/28/2017.


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New York Update

Case 16-G-0257 – NY Rate Case

• Transportation/Customer Choice Related Changes

– Tariff Reorganization• SC-13D and SC-13M will become SC-13 and SC-18, respectively.

• SC-15 (Large Industrial Incentive Rate Transportation Rate) and SC-17 • SC-15 (Large Industrial Incentive Rate Transportation Rate) and SC-17

(Transportation Service for Customers Operating Cogeneration

Facilities) will be eliminated.

• SC-1, SC-3, SC-11, SC-19 will retain current identity.

– Service Classifications Rates relocated to a new

“Statement of Rates and Surcharges” section.


Teleconference


New York Update

New York GTOP– GTOP Version 2.70 was filed on 2/8/2017

• Demand Response Customer Communications.

• Producer lock up pressure procedures.

• Updates to existing tables/examples and changes addressing minor corrections/errata. addressing minor corrections/errata.

– GTOP Version 2.71 will be filed during late April 2017• Changes reflecting anticipated Rate Case order.

Otherwise, no Distribution-initiated tariff changes affecting STBA service are anticipated, however….


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Pennsylvania Update

2017 Annual 1307(f) filing

• Status Update– Exhibits were filed January 2017.– Tariff and Testimony were filed February 2017.– No major non-gas cost tariff initiatives are being bundled with 1307F filing.

• Filing Highlights – proposed rate* changes:– MMT from $0.2700 to $0.2600– MMT from $0.2700 to $0.2600– SATC from $0. 2782 to $0.2568– PSB from $1.1052 to $1.1083– SB from $0. 5256 to $0.5283– RTC from $9. 6761 to $9. 5277 (weighted avg. demand cost of upstream capacity)

– DTR [Oct. $0.01 to $0.00, Nov. $0.43 to $0.38, Dec $0.66 to $0.63, Jan $0.41 to $0.48 & Feb $0.12 to $0.21]

• Implementation to be effective August 1, 2017.

* Relative to currently effective rates.


Teleconference


Pennsylvania Update

Act of Jun. 23, 2016, P.L. 355, No. 47 Cl. 66 –

PUBLIC UTILITY CODE - 66 PA.C.S. (“Act 47”)

• Elimination of the Migration Rider (e-factor)

– On 1/31/2017, Distribution filed to remove e-factor from rates charged to

transportation customers. Sales customer rates will reflect e-factor

immediately upon return to sales service.immediately upon return to sales service.

• Natural gas distribution companies shall have the right to recover

on a full and current basis all prudent and reasonable costs incurred

to implement customer choice from retail natural gas customers or

other entities as determined by the Commission. Recovery from

retail natural gas customers shall be made pursuant to a

reconcilable automatic adjustment clause under section 1307.


Teleconference


Pennsylvania Update

Pennsylvania GTOP

– GTOP Version 2.63 was filed on 9/2/2016

• Revisions reflecting implementation of 2016 1307(f ).

• Update to Instant Connect enrollment procedure.

– The next GTOP filing is planned for late July 2017.

• Revisions reflecting implementation of 2017 1307(f ).

No Distribution-initiated tariff changes affecting SATS or MMNGS services are anticipated, however…


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Pennsylvania Update

RMI

Capacity Assignment/

Use of Storage

System Balancing,

Tolerances and Penalties

Access to Local

Production

Seamless Moves &

Instant Connects

Accelerated Switching Creditworthiness

Requirements

Standard Offer Program Account Number Lookup Low Income Shopping

– Working Group meetings were completed in 2015.

– Account Number Access Mechanism available as of Jan. 2017.

– Accelerated Switching is the last item remaining.

Standard Offer Program Account Number Lookup

Mechanisms

Low Income Shopping

Customer Education Migration Riders Purchase of Receivables

Programs

Disclosure Statements Electronic Data Protocols Joint NGDC – NGS Bill


Teleconference


Pennsylvania Update

• L-2016-2577413 – Advance Notice of Proposed Rulemaking (ANOPR) - Rulemaking to Amend the Provisions of 52 Pa. Code, Chapter 59 Regulations Regarding Standards For Changing a Customer’s Natural Gas Supplier.

– The ANOPR, issued on 12/23/2016, proposes an alignment of gas switching rules with “Accelerated Switching” rules applicable to the retail electric market, i.e. 3 business-day switching.

• Applies both to switches to NGS service and Supplier of Last Resort service.

– Combined with “Last-In” enrollment process, a customer could switch – Combined with “Last-In” enrollment process, a customer could switch suppliers 21 times per month.

– Accelerated Switching works in the retail electric market where utilities have Advanced Metering Infrastructure (“AMI”).

– The Company estimates that implementation of Accelerated Switching would be very expensive. Based upon comparable costs at other gas utilities, the cost could be approximately $40 million, primarily for AMI implementation.

– On 2/21/2017, the Company filed comments in opposition to the ANOPR.• The PUC is considering the comments filed by the industry and is likely to issue a

Notice of Proposed Rulemaking later this year.


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