Con Edison Gas Interruption Policies and Procedures October 30, 2013 A Webinar conducted by Luthin Associates, Inc. Luthin Associates, Inc.
Who is Affected by Con Edison Gas Interruptions? All Dual Fuel Interruptible (IT) Con Ed gas accounts are required to interrupt their use of gas and move to an alternate fuel (#2, #4, or #6 heating oil or customer facility generated Steam) when an interruption is issued. Transportation Gas Customer: If you purchase your gas for your IT account from a third party supplier or ESCO (Energy Supply Company), you are considered to be a Dual Fuel Interruptible Transportation Gas Customer. You must interrupt your gas supply upon notification of an interruption affecting Transportation Gas Customers. Sales Gas Customers: If you are purchasing your gas supply from Con Edison (not utilizing an ESCO) then you will need to interrupt your gas supply upon notification of an interruption affecting Sales Gas Customers. Sometimes Con Ed will interrupt Sales and Transportation customers at different times or they may overlap. Appendix A: Sample interruption notice 2
Annual Timeline July: Con Ed issued a letter requesting an update of customer notification contact information Fax, mobile numbers and email addresses Luthin Associates followed up with clients to ensure that all notification contact information is complete and up-to-date (completed) October: Con Ed tested the interruptible alert system with a communications test (via fax, email, phone and text) to ensure that all customers are receiving notifications correctly. This was completed yesterday. November: Con Ed will test the system with a 4 hour TEST INTERRUPTION This TEST INTERRUPTION must be complied with or a fine is issued and a strike is placed on the account. 3
How is the interruption issued? Con Ed is required to issue an interruption notice at least six (6) hours prior to the start of the interruption period. An interruption can be called at any time, including weekends and holidays Using the contact information that has been given to them, Con Ed will fax, email, text and send a recorded message by phone to each contact listed. Appendix A: Sample email interruption notice. Luthin Associates will attempt to follow up with an additional email and phone call to all the facilities as a reminder to ensure that compliance is adhered to. 4
Responsibility of the Facility In the event an Interruptible gas account renders their alternate fuel capabilities inoperable (for example, by removing oil tanks), and will therefore convert to Firm gas service, it is important to notify Con Edison several months in advance. Con Edison will ascertain the availability of firm gas capacity in your area and advise if there are any charges assessed to convert to firm service. If a facility does not inform Con Edison and stays on the interruptible rate, even without alternate fuel capabilities, they will still be required to interrupt gas or be subject to all applicable penalties. Keep sufficient fuel on hand. Beginning in November, please make sure that your tanks are topped off. 5
Responsibility of the Facility Make sure you have the ability to move to an alternate fuel with sufficient time prior to the beginning of the interruption period. If you burn more than 2 Therms/Hour of Natural Gas during the entire interruption period, you are considered to be non compliant. So, begin moving to your alternate fuel several hours prior to the start of the interruption to ensure that you are not burning any Gas when the interruption begins. Do not return to burning Gas until the completion of the interruption period. A move back to Gas for even 15 minutes prior to completion can be considered as non-compliance and you will be penalized. Notify Con Ed and Luthin Associates of any notification contact changes immediately to ensure that Interruption Notices are sent to the appropriate personnel. (Fax, Mobile and 24/7 phone numbers are vital.) 6
What if the Equipment Fails? If, due to mechanical failure, you are not able to comply with the interruption, Con Ed needs to be notified within ONE HOUR of the failure with your name, address, telephone #, and a description of the failure. One occasion, due to inoperable dual fuel equipment failure, may not be counted as a violation provided: You notify Con Ed: First, try their hotline phone number (212) 460-3459 if the hotline is busy send a fax to (718) 246-3241 or send an email to EM-GasInterruptions@coned.com Luthin recommends the email notification in addition to the phone call as an added measure of documentation. Please copy Luthin Associates personnel on this notification so that we can assist in managing this issue with Con Ed. Con Ed requires that all repairs be made within 48 hours An affidavit or sufficient documentations of these repairs (repair bill) must be submitted as soon as possible. If the repair is completed while the interruption is still in effect, you must switch back to your alternate fuel for the remainder of the interruption Despite equipment failure, Con Ed will still penalize the facility; however, adhering to the procedure may help avoid a strike against the facility. 7
Why is proper compliance vital? The Con Ed Tariff states that if a facility does not properly comply when requested the following penalties will apply: 1. Penalty - The facility is required to pay an Unauthorized Gas Usage Fine for each missed interruption which could be as much as 9 times the Interruptible Rate. EXAMPLE: One IT account was penalized $115/Dth (~$11,000) for the gas used during a non compliant interruptible period. 2. Two Strike Policy - For each Winter period, if an Interruptible account fails to fully interrupt its use of gas for TWO interruption periods (including the initial test period) you will be notified by Con Ed that you are being moved to a much higher Firm Gas Service Classification. The facility will not be allowed to return to the Interruptible rate for the remainder of the Winter period plus the next 12 succeeding months. EXAMPLE: an IT customer (annual usage ~ 100,000 Dth's per year) pays around $2.00 per Dth in transportation charges versus a firm transportation rate of around $5.00 per Dth. This translates to a $3.00 per Dth or an annual increase of $300,000 in transportation costs if bumped from the IT rate to a firm gas rate. Also, if you are removed in February 2014, you are not eligible to return to the IT rate until April 2015. 8
REMINDER ONE STRIKE: you re FINED.. TWO STRIKES: you re FINED AND OUT! Both result in BIG BUCKS $$$ 9
Questions??? Thank you. If you have further questions, please call us at: (732) 774-0005 10