Review of Natural Gas Storage Practices

ERG staff were retained by a regulatory body to review the costs and benefits associated with proposed modifications to a gas distribution utility’s natural gas storage program and associated confidential supply arrangements. The storage program as proposed, acted as both a physical hedge on commodity costs and a means by which the utility could reduce the size of its demand contracts and consequently the fixed costs to the ratepayers. ERG staff found the proposal beneficial with respect to anticipated costs and consistent with the intent of previous regulatory body actions.

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