Public Service Commission of Wisconsin Approves $88,894 Cost Recovery for Northern States Power Company

Strategic Insights -

The Public Service Commission of Wisconsin has issued a regulatory update approving Northern States Power Company's request to recover $88,894 for November 2024, which exceeded the benchmark set in the Gas Cost Recovery Mechanism. The company attributed the higher costs to colder than normal weather, which led to daily spot market prices exceeding the daily price expectations built into the supply plan.

Key Takeaways:

  • The actual average commodity cost of gas in November 2024 was $0.0063 per Dth higher than the benchmark, resulting in $88,894 in costs above the benchmark.
  • The costs above the benchmark were caused by daily spot market prices exceeding the daily price expectations built into the supply plan due to colder than normal weather.
  • The company's supply plan projected Wisconsin system supply sales at 1,664,919 Dth, but actual calendar month sales were 1,440,854 Dth, equating to approximately 87% of projected sales.
  • The actual daily spot gas purchases were compared to the Emerson spot benchmark price, resulting in a difference of $0.491, which accounted for approximately $189,988 in costs above the benchmark due to volatile market pricing.
  • The company believes that this analysis demonstrates that all costs above the benchmark in November were explainable, prudent, and should be recoverable in the GCRM.
  • The Public Service Commission of Wisconsin has issued a regulatory update approving Northern States Power Company's request to recover $88,894 for November 2024.

Statistics:

  • Average unit commodity cost of gas in November 2024: $2.225 per Dth
  • Benchmark average unit commodity cost of gas in November 2024: $2.162 per Dth
  • Costs above the benchmark in November 2024: $88,894
  • Costs above the benchmark due to volatile market pricing: $189,988
  • Actual daily spot gas purchases in November 2024: 387,012 Dth
  • Average actual purchase price of daily spot gas in November 2024: $2.218 per Dth

Sources:

  • Northern States Power Company - Wisconsin (NSPW)
  • Public Service Commission of Wisconsin (PSCW)
  • Attachment A1: Comparison of November benchmark average unit commodity cost of gas and actual average commodity cost of gas
  • Attachment A2: Average daily November temperatures from 2020 to 2024
  • Attachment A3: Gas daily indexes for Emerson, Demarc, and Ventura as compared to the spot benchmark price for Emerson and Chicago City-Gate
  • Attachment A4: Benchmark calculation for November 2024