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TSP/TSP Name:  6900518-SOUTHERN NATURAL GAS CO. Critical: Y
Notice Type Desc (1):  RATES AND CHARGES Notice Type Desc (2):  FUEL AND GLU
Notice Eff Date/Time:  05/16/2019 11:23:18AM Notice End Date/Time:  12/31/2049 9:00:00AM
Post Date:  5/16/2019 11:23:18 AM Notice ID: 703364
Reqrd Rsp:  1 Notice Stat Desc:  INITIATE Prior Notice: 
Subject:  Sales of Fuel for ElectricityCostsUpdate
Notice Text:

May 15, 2019

To:          All Shippers on the Southern Natural Gas (SNG) System

Re:          Update on Sales of Fuel for Electricity Costs

Section 35.5 of the General Terms and Conditions of the SNG FERC Gas Tariff sets forth how SNG will account for gains and losses on the sale of transportation fuel retained to satisfy the cost of electric compression.  First, SNG calculates the dth available for sale each month by dividing the eligible electric costs by the prescribed index price for that month. These dth are subsequently sold. SNG then determines the difference between the sales proceeds and the cost of electricity used for electric compression during the applicable Summer or Winter Base Period.  If the net difference is positive, then within 80 days after the end of the applicable Base Period, SNG will provide shippers a monetary credit on their bills based on the calculation set forth in the tariff.  If the difference is negative, then it is recorded in the applicable Winter or Summer Deferred Electricity Losses Account and such amount is carried over to the next Winter or Summer Base Period, as applicable.

This mechanism was placed into effect under the Rate Case Settlement approved in Docket No. RP13-886.  As shown below, the difference for the most recent Winter Base Period of October 1, 2018 through March 31, 2019 is ($4,428,292).  This consists of a loss of ($2,201,802) achieved during the 2018-19 Winter Base Period, combined with the carryover loss of ($2,226,490) from the 2017-18 Winter Base Period.  This negative difference will be carried forward to the next Winter Base Period in 2019-20.

If you have any questions about this information, please contact me or your Account Manager.

Carl Haga

Vice President, Commercial

Southern Natural Gas Company, L.L.C.

carl_haga@kindermorgan.com

205-325-7544

 

Darryl Outlaw

Director, Commercial

Southern Natural Gas Company, L.L.C.

darryl_outlaw@kindermorgan.com

205-325-7421


 

Southern Natural Gas Company, L.L.C.

Net Gain/(Loss) on Sale of Fuel for Electric Compression for Winter Period 2018/2019

 

WINTER PERIOD 2018/19

 

 

Line No

 

 

 

 

Oct 2018

 

 

 

Nov 2018

 

 

 

Dec 2018

 

 

 

Jan 2019

 

 

 

Feb 2019

 

 

 

Mar 2019

 

Total

Oct 2018 –

Mar 2019

Carryover Balance

From Oct 2017 – Mar 2018 Winter Period

 

Total

Oct 2018-Mar 2019 w/Carryover

1

Electric Compression Cost

$2,054,040

$2,142,382

$2,404,984

$2,516,715

$1,881,465

$2,285,911

$13,285,496

 

 

2

Index Price per Dth

$3.14

$4.01

$3.86

$3.02

$2.74

$2.82

 

 

 

3

DTH to Sell

   (line #1 / line #2)

654,153

534,260

623,053

833,349

686,666

810,607

 

 

 

4

Sales Proceeds

$1,775,361/1/

$1,480,434 /2/

$1,732,591 /3/

$2,212,835 /4/

$1,898,381 /5/

$1,984,093 /6/

$11,083,695

 

 

5

Gain/(Loss) (line #4 minus line #1)

($278,679)

($661,948)

($672,393)

($303,880)

$16,916

($301,818)

($2,201,802)

($2,226,490)

($4,428,292)  /7/

 

 

1/  Sales price of $2.714 (694 dth at $3.208, 550,000 dth at $2.711, 100,000 dth at $2.725, and 1,382 dth at $2.771)

2/  Sales price of $2.771 (534,260 dth at $2.771)

3/  Sales price of $2.781 (2,281 dth at $2.771, 620,000 dth at $2.781 and 772 dth at $2.656)

4/  Sales price of $2.655 (499,228 dth at $2.656, 330,000 dth at $2.653, and 4,121 dth at $2.765)

5/  Sales price of $2.765 (685,879 dth at $2.765 and 787 dth at $2.4475)

6/  Sales price of $2.448 (809,213 dth at $2.4475 and 1,394 dth at $2.542)

7/ Net total loss to be carried over to next winter's calculations per Sec. 35.5 of the GT&C of SNG's Tariff.