Purpose

State commissions have a basic responsibility to oversee a utility’s gas supply planning and procurement, thereby assuring prudent retail gas prices and adequate supply reliability. An active state commission can conform a utility’s planning and procurement activities to the commission’s pre-determined principles and expectations.

The catch: Gas supply planning and procurement is a complex, multi-task activity demanding regulatory oversight at various stages. It requires a high level of commission staff expertise, in addition to the commission’s serious commitment to its oversight function. Given these demands, what’s a commission to do?

This teleseminar presents a regulatory approach to the challenges of gas supply planning and procurement called “comprehensive regulatory oversight.” The paradigm places a premium on early communication, timely response, and open dialogue among the commission, the utility, and other stakeholders during the entire planning-procurement process. Comprehensive regulatory oversight also calls for a commission to: (1) retrospectively evaluate utility performance by separating out planning and execution decisions; (2) work proactively by setting principles and expectations, evaluating utility performance, and assessing its own policies/practices; and (3) see its plans as works in progress, open to revision in light of new information.

Ultimately, comprehensive regulatory oversight aims to assure that the utility: (1) recovers only prudent costs from customers, and (2) recovers all of its prudent costs. The two outcomes, taken together, should achieve the regulatory objectives of just and reasonable rates and reliable gas service.

In this 90-minute teleseminar, Ken Costello, NRRI’s Director of Natural Gas Research and Policy, will discuss the major steps in comprehensive regulatory oversight. Commenting on Mr. Costello’s presentation, as well as on the topic of gas supply planning and procurement, will be a panel of three persons representing different perspectives in the field. The seminar will close with participant questions and final comments.
 

Seminar Speakers

Kenneth Costello, Director of Natural Gas Research and Policy, NRRI
Dr. Ken Zimmerman, Senior Utility Analyst, Oregon Public Utility Commission
Ken Jacobs, Senior Specialist, Resource Planning, Southwest Gas Corporation
Michael Chrysler, Regulatory Analyst, Office of Attorney General, State of Tennessee and Chair, Gas Committee, NASUCA
 

Seminar Outline

I. 45-minute presentation by Ken Costello

A. The rationale for comprehensive regulatory oversight (“CRO”)

B. Overview of gas supply planning

C. Challenges in planning and performance

1. Sources and consequences of problems

2. Potential problems warranting commission attention

D. A six-step approach for regulatory oversight and evaluation of gas supply plans and utility performance

1. Generic functions of regulatory oversight

2. The six steps

E. Other topics

1. Required commission staff expertise

2. Present regulatory approaches

II. Panel of 3 discussants (10 minutes each)

III. Questions from participants and final comments (15 minutes)