NRRI 77-X THE EMERGENCY PURCHASE, TRANSFER, AND SELF-HELP PROGRAMS


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By
M. Audeen Walters
Kevin A. Kelly
James Bydolek

Policy Development Project Department of Mechanical and Nuclear Engineering The Ohio State University

July 8, 1977

Ohio was one of the states most severely affected by the natural gas shortage during the winter of 1976-77. Large industries, commercial establishments and schools were heavily curtailed in order to insure adequate gas supplies for homes. Having foreseen the possibility of such curtailments, the Public Utilities Commission of Ohio (PUCO) held a hearing to develop ways of providing addi tional gas to curtailed customers. In the Order and Opinion resulting from the hearing (Case No. 75-9Ql GA-COI) the PUCO initiated or modified three programs to provide gas for curtailed customers. The programs are the emergency gas purchase, transfer, and self-help programs.
This study evaluates the programs to determine whether they are sufficiently useful to curtailed customers to be offered in the future. The evaluation was made by surveying the 2400 curtailed customers in the Columbia Gas of Ohio service area. Columbia's service area was chosen because Columbia serves 58 of Ohio's 88 counties, and it was the only company offering the transfer program.
Two questionnaires, one at the beginning and one at the end of the heating season, were mailed to each curtailed customer. About one fourth of the questionnaires were returned. Each completed questionnaire was assigned to one of three categories, "industrial", "commercial", and "school."
Respondents to the first questionnaire indicated how they intended to deal with gas shortages. Their first choice was to conserve as much gas as possible. Second, many had converted at least part of their plants to an alternate fuel. Eighty-two percent of industrial customers have acquired some alternate fuel capability,. while 59% of commercial customers and 36% of schools have done so. Those who have converted prefer use of alternate fuels to the special programs whenever possible.
Most curtailed gas users require additional gas even after adopting conservation and using alternate fuels. They prefer using the special programs to cutting production or buying costly propane. The surveys showed that the number of curtailed customers planning to use the special programs next winter is much larger than the number that planned to use them at the beginning of the past winter. A majority of those surveyed recommended that the three programs be continued next year.
Each of the three programs is most strongly recommended by a particular customer category. Large industries plan to use the self-help program. Smaller industries and commercials prefer the emergency purchase program. Schools like the transfer program. It appears that each of the programs can help supply the gas needs of a particular group of curtailed customers and that each of the programs is therefore worth continuing in the future. Furthermore, this package of programs would appear to be effective in any other state facing heavy gas curtailments.
While the three programs are basically sound as they stand now, two minor changes may improve the programs' effectiveness. First, we suggest that the emergency purchase contracts be designed to give the customer the option of contracting for either a fixed maximum volume of emergency purchase gas or a maximum volume which increases automatically as curtailment levels are increased. Second, we suggest that the PUCO give assurance that customers will be able to use their self-help gas even if utilities have adequate supplies in future years.
In view of the substantial support for these three programs among curtailed customers and the relatively low administrative costs, it is recommended that:
1) pending the resolution of its legality, the transfer program be offered next year by all Ohio gas distribution companies that curtailed customers;
2) all three special programs be continued in Ohio in the future; and
3) the programs be promoted in other states facing severe gas curtailments.

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