Northern Natural Gas Company Submits Report on Daily Delivery Variance Charges and Penalty Revenue Crediting

Strategic Insights -

The Northern Natural Gas Company has submitted a report to the Federal Energy Regulatory Commission detailing the daily delivery variance charges (DDVC) and penalty revenue crediting for the winter season of November 1, 2024, through March 31, 2025. According to the report, shippers received credits on their invoices posted to Northern's website on July 14, 2025. The credited amounts include interest, calculated in accordance with the Commission's regulations. The report provides detailed schedules for the DDVC and receipt point penalty categories, outlining the revenues collected, interest, and credit amounts for each shipper.

Key Takeaways:

  • The Northern Natural Gas Company collected DDVC penalty revenues in the amount of $4,279,804.21 plus interest of $139,541.26 for a total winter DDVC penalty credit of $4,419,345.47.
  • The company prorated the DDVC penalty credit to each shipper based on a weighted value equal to the shipper's total annual scheduled quantity at the delivery points on Northern's system.
  • No penalty revenue was collected for unauthorized gas, and no PDD rollover charge was collected due to its categorization as a "maintenance only" category.
  • The total winter receipt point penalty credit was $20,889.79, and the company prorated this credit to shippers who operate contiguous, onshore receipt points without an Operator Balancing Agreement.
  • Schedules 1, 2, and 3 provide the detailed calculations for the DDVC penalty credits by shipper, while Schedules 4 and 5 provide the detailed calculation for the receipt point penalty credits.

Statistics:

  • $4,279,804.21: the amount of DDVC penalty revenues collected by Northern.
  • $139,541.26: the interest collected on the DDVC penalty revenues for a total of 11 months.
  • $4,419,345.47: the total winter DDVC penalty credit.
  • $20,315.57: the amount of receipt point penalties collected by Northern.
  • $574.22: the interest collected on the receipt point penalties for a total of 11 months.
  • $20,889.79: the total winter receipt point penalty credit.

Sources:

  • [Letter from Northern Natural Gas Company to the Federal Energy Regulatory Commission, Dated July 14, 2025].