{"operation":"document","citation":"4 CCR 723-4 Rule 4607","title":"Gas Performance Incentive Mechanism","source_type":"regulation","agency":"Colorado Public Utilities Commission","status":"current","official":true,"published_on":null,"effective_on":null,"summary":"In conjunction with its GPRMP, the utility shall implement a GPIM in accordance with this rule and the specific terms set forth in its GCA tariff sheets. The utility shall implement a GPIM for each GCA rate area with more than 50,000 full service customers or each purchasing region as specified in t","machine_formats":{"json":"https://regulus.evalyn.ai/document/co-ccr-4-723-4-4607.json","markdown":"https://regulus.evalyn.ai/document/co-ccr-4-723-4-4607.md"},"app_url":"https://regulus.evalyn.ai/document/co-ccr-4-723-4-4607","source_url":"https://www.sos.state.co.us/CCR/DisplayRule.do?action=ruleinfo&ruleId=2260&deptID=18&agencyID=96&deptName=Department%20of%20Regulatory%20Agencies&agencyName=Public%20Utilities%20Commission&seriesNum=4%20CCR%20723-4","body":"In conjunction with its GPRMP, the utility shall implement a GPIM in accordance with\nthis rule and the specific terms set forth in its GCA tariff sheets. The utility shall\nimplement a GPIM for each GCA rate area with more than 50,000 full service customers\nor each purchasing region as specified in the utility’s GPP.\n(a) An application to establish a GPIM for a utility with more than 50,000 but less\nthan 500,000 full service customers shall contain the following elements. The\nutility shall specifically reference and respond to the requirements of\nsubparagraphs (I) through (IV) of this rule and shall provide cross-references and\nfootnoted work-papers in executable format with all cell formulas intact, using\nspreadsheet software that is compatible with software used by Commission staff.\n(I) GPIM benchmark. Methodology to establish the GPIM benchmark for\ncommodity gas purchases based on verifiable, reported market indices,\nwith a reasonable adjustment, and for appropriate locations.\n(II) GPIM commodity gas volumes. Description and explanation of all gas\nvolumes to be included in the GPIM.\n(A) The volumes and costs associated with fixed-price, long-term\nsupply contracts may be excluded from the GPIM and risk sharing\ncalculation.\n(B) The volumes and costs associated with storage injections and\nwithdrawals, including both physical and contract storage, may be\nexcluded from the GPIM and risk sharing calculation. Utilities shall\nprovide a description of storage assets to be either included or\nexcluded from the GPIM.\n(C) The volumes and costs associated with associated with financial\nhedging shall be excluded from the GPIM and risk sharing\ncalculation.\n\n(D) All other actual gas volumes and costs shall be subject to the GPIM\nwith consideration of reasonable adjustments as determined by the\nCommission.\n(III) Upstream supply costs. Description and explanation of upstream costs\nincluded in the GPIM risk sharing mechanism, including the methodology\nfor developing an appropriate benchmark for such costs, if appropriate.\n(IV) Risk sharing amount. Methodology for calculating the risk sharing amount.\n(A) A formula will calculate a percentage of the difference between the\nactual gas costs and the benchmark formula for applicable gas\nvolumes, either positive or negative, borne or retained by the utility,\nsubject to applicable limitations.\n(B) The utility shall explain:\n(i) any proposed deadband around the GPIM benchmark\nwhereby price variation within the deadband is excluded\nfrom risk sharing formula;\n(ii) any proposed cap or floor on the results of the risk sharing;\nand\n(iii) any proposed methodology for applying force majeure or\nsimilar provisions to the risk sharing mechanism.\n(C) Backcasting analysis, based on a minimum of the most recent three\nyears of historical data, will demonstrate how the proposed GPIM\nbenchmark would have been calculated and how the proposed risk\nsharing mechanism would have performed over the historical\nperiod. This analysis shall assume the utility made no changes to\nits actions in response to the mechanism and ignore any force\nmajeure or similar events. The utility may, in its discretion, present\nadditional analysis.\n\n(b) An application to establish a GPIM for a utility with more than 500,000 full service\ncustomers shall contain the following elements. The utility shall specifically\nreference and respond to the requirements of subparagraphs (I) through (IV) of\nthis rule and shall provide cross-references and footnoted work-papers in\nexecutable format with all cell formulas intact, using spreadsheet software that is\ncompatible with software used by Commission staff.\n(I) GPIM benchmark gas rate. The GPIM benchmark gas rate for the\ncompleted calendar quarter preceding the GCA filing will be calculated as\nthe average of the GPIM total gas cost for that same quarter in the\nprevious three years divided by the GPIM total gas quantity for the same\nquarters in the previous three years.\n(II) GPIM actual gas rate. The GPIM actual gas rate for the completed\ncalendar quarter preceding the GCA filing will be calculated as the GPIM\ntotal gas cost for that quarter divided by the GPIM total gas quantity for\nthat same quarter.\n(III) GPIM sharing amount. The GPIM sharing amount will be calculated as\nfour percent of the difference between the GPIM benchmark gas rate and\nthe GPIM actual gas rate, either positive or negative, multiplied by the\nGPIM total gas quantity for the completed calendar quarter preceding the\nGCA filing, subject to the following limitations:\n(A) the GPIM sharing amount for a quarter shall be zero if the\ndifference between the GPIM benchmark gas rate and the GPIM\nactual gas rate is less than $0.50 per Mcf or Dth;\n(B) the GPIM sharing amount for a quarter shall be the difference\nbetween the GPIM benchmark gas rate and the GPIM actual gas\nrate that is above or below the $0.50 per Mcf or Dth threshold in\nsubparagraph 4607(b)(III)(A); and\n(C) the utility’s cumulative quarterly GPIM sharing amounts summed\nacross all GCA rate areas or purchasing regions, positive or\nnegative, shall be capped over a rolling twelve-month period at an\namount equal to a 30 basis point return on the utility’s rate base as\nestablished by the Commission in the utility’s most recent base rate\nproceeding, set solely on the equity share of the utility’s capital\nstructure.\n\n(IV) The utility may request, and the Commission may grant, a force majeure\nexception upon good cause shown after such an event has occurred. The\nforce majeure exception may allow the utility to exclude costs from the\nGPIM that are deemed to be either associated with the force majeure\nevent as defined by the utility’s tariffs on file with the Commission or\nassociated with force majeure events as defined in the utility’s upstream\ngas supply, storage, and transportation agreements and tariffs.\n(c) Unless subject to the limitations in subparagraph 4607(a)(IV)(B)(ii) or\nsubparagraph 4607(b)(III)(C), the GPIM sharing amount shall be accounted for in\nthe utility’s deferred gas cost calculation for the quarterly GCA filing.\n(I) To the extent a GCA calculation is subject to a maximum cap specified in\na utility’s GPRMP, any new positive GPIM sharing amount will not be\naccounted for in the deferred gas cost calculation but instead be subject to\na carryforward into subsequent GCA quarterly filings. The carried forward\nGPIM amount shall be eligible to offset incurred negative GPIM sharing\namounts.\n(II) To the extent a GCA calculation is subject to a minimum threshold\nspecified in a utility’s GPRMP, any new negative GPIM sharing amount\nwill not be accounted for in the deferred gas cost calculation but instead\nbe accounted for in the deferred gas cost calculation in subsequent\nquarterly GCA filings in which the GCA calculation is above the minimum\nthreshold.","truncated":false,"body_characters":6819}