Following is a brief overview of the practical aspects of operating a firm pool on the PGW system. Detailed user manuals for the Electronic Bulletin Board (EBB) and the Transaction Management System (TMS) will be made available to suppliers when appropriate, for the technical certification process and after acceptance by PGW for service to firm customers.

Application
Please click here (PDF, 412k) to go directly to the application form. Applications must be accompanied by a $400 non-refundable fee.

Credit evaluation material to be submitted with the application is specified on the form.

Credit and Surety Requirements
The $400 application fee covers an initial credit investigation. PGW may require followup evaluations from time to time, at a cost to the supplier of $250 per incident.

There are two forms of financial surety to be considered.

PGW Surety Requirement. All suppliers to firm transportation pools will be required to establish financial surety in the form of a cash deposit, an irrevocable letter of credit, or a performance bond, the amount and type of surety to be solely determined by PGW. A minimum surety level can be found in Section 11 of the Gas Supplier Tariff (PDF, 283k). Please contact Nick LaPergola, Director, Gas Management, at (215) 684-6278 to discuss surety requirements.

PUC Surety Requirement. The PUC has ordered that suppliers to residential customers in Philadelphia shall post an additional performance bond, payable on order of or directly to the Commission, in an amount to be determined by the Commission in consultation with the OCA (Office of the Consumer Advocate). The purpose of this bond is to provide reimbursement to customers who may be owed by the supplier (deposits, prepayments, restitution) if the supplier exits the market.

Licensing
To provide supply service to firm customers in PGW’s service territory, suppliers must be licensed by the PUC and must also have or obtain a business license from the City of Philadelphia.

Information on licensing by the Pennsylvania Public Utilities Commission is available on the PUC web site at http://puc.paonline.com/gas/gas_comp.asp

If you need a license to conduct business in Philadelphia, you may wish to view the information in the business section of the City’s web site at http://www.phila.gov/business/startup/index.html

Certification Testing: PGW’s Transaction Management System (TMS)
Supplier applicants should expect to engage in a 4-6 week data communications testing period with PGW before final approval of application. In addition, applicants must demonstrate to PGW’s satisfaction that they are able to bill their customers based on transmission of consumption data from PGW’s billing cycles.

PGW has developed a customized XML messaging system for electronic data exchange with suppliers. The TMS (Transaction Management System) is modeled on EDI and is designed to retain the better features of EDI (tracking, auditibility and so forth) but to do it in a simplified and modernized fashion which will also be less expensive than EDI.

PGW will provide a simple front-end data-entry and file-building application for suppliers at no charge. Alternatively, suppliers with reasonably sophistocated data capability may choose to build XML transaction files in PGW’s specified format rather than use the free data-entry tool.

Suppliers will be assigned a secure area on PGW’s Electronic Bulletin Board for the placement of transaction files and the retrieval of response and outbound transaction files from PGW. Our system will check for new files repeatedly throughout the business day and will process them automatically. The system will use automated e-mail to acknowledge receipt of incoming files and alert a supplier when he has a file to retrieve. PGW will also have a full-time Messaging Administrator available during business hours to deal with questions or problems.

Detailed information on the TMS and the testing process will be made available to qualified applicants after licensing and credit requirements have been satisfied.

Supplier support for messaging and most other aspects of operating a firm pool in Philadelphia will be managed by the PGW Supplier Coordination Team. Please contact Nick LaPergola, Director – Gas Management, at (215) 684-6278 to begin the technical certification process.

Availability of Marketing Data
Electronic files containing PGW customer data will be made available to accepted firm-pool suppliers via the Electronic Bulletin Board following successful data communications testing, execution of a firm pooling agreement, and other requirements for acceptance, such as posting financial surety.

Through the spring of 2003, PGW collected release-of-information preferences by mail, phone, and web site. Approximately 14% of PGW customers responded with directions to either restrict or prohibit release of their information to gas marketers.

Customers may alter their “ROI” (release of information) status at any time. PGW will produce and post marketing files to qualified suppliers via the EBB on a quarterly basis. Tentative release dates are September 1, December 1, March 1 and June 1 each year.

Marketing data will be grouped into 4 categories:

• Firm commercial and industrial accounts with usage information (1 file, expected size approximately 25,000 accounts)
• Firm commercial and industrial accounts which allowed release of name/address information only, no usage history (1 file, small)
• Residential accounts which allowed release of name/address information only, no usage history (1 file, small)
• Residential accounts allowing release of name/address and historic usage information (multiple files, unsorted, approximately 25,000 records per file)

Files will be formatted for ease of use in simple tables or spreadsheets, and will be accompanied by an annotated record layout.

Usage history, provided on a best-efforts basis, will consist of the most recent 12 months of billed customer consumption in ccf. All usage reported will be for that customer at that service point. Hence, a new customer may show less than a year’s usage.

At the minimum, marketing files will contain a customer’s name, address, service point ID (for enrollment purposes), account number, rate, and if not restricted, gas consumption history.

Customer Gas Usage History
Firm-customer usage history is available only to accepted suppliers and only via quarterly marketing files. We do not accept requests for individual customer usage information. PGW will forecast anticipated gas usage for firm pools and will determine the quantity of gas a supplier must deliver. Please see the sections on Capacity and Forecasting below.

Confidentiality of Information
Please see section 7.1 of the Gas Supplier Tariff (PDF, 283k) for details. Customer information including usage history must be kept confidential, as must any company or systems information given to a supplier in connection with serving customers on PGW’s distribution system. A confidentiality agreement clause will be included in the firm pooling agreement.

Enrollment of Customers
Firm customers will be enrolled by a supplier’s transmission to PGW of electronic transactions. Please see the sections covering Certification Testing and Data Communications.

PGW enrolls a customer by Service Point ID. This 10-digit number is available on the records in PGW’s marketing files, and on the customer’s PGW bill. PGW must have the customer’s service point ID to process an enrollment for a monthly-metered customer. Enrollment by service point rather than name or account number is both technically practical and allows customers maximum flexibility under Choice. A customer may have a number of meters (1 meter = 1 service point) aggregated under one master account number. Meter numbers may change, but the Service Point ID is unique and constant. A customer may have multiple accounts. Further, a customer may have both interruptible and firm service points on the same account. Using the unique Service Point ID allows a customer to enroll one, some, or all of his meters for transportation service, and, in the case of a customer with multiple gas services, would even allow the customer to enroll with more than one supplier if he wished to compare results.

Customers must have a working AMR metering device to be eligible for enrollment and will switch to supplier service on the appropriate meter-reading date, as below.

An “enrollment period” includes from the 16th of one month through the 15th of the next.

Customers enrolled by the 15th of one month will switch on their meter-reading date in the next month, if PGW has an actual (rather than estimated) meter read.

• If PGW receives a customer enrollment on September 14th, the customer will switch to supplier service on his meter-reading date in October.
• If PGW receives a customer enrollment on September 16th, the customer will switch on his meter-reading date in November.

Suppliers will be advised of anticipated switch dates for individual customers by electronic response to the supplier’s enrollment transaction.

Weekday Service. Please be prepared to transmit enrollment files Monday through Friday only. We cannot at this time offer weekend service. Most enrollments should be processed within 24 hours. However, depending on time received, files received on a Friday may not be processed until the following Monday. We appreciate all efforts to submit transactions early in the enrollment period.

Customer Billing
Dual billing is the only option available until at least September 1, 2004. A supplier must be able to receive electronic notification of his customers’ usage by billing cycle and to bill his customers directly for commodity-related charges. PGW will bill only for its own, non-commodity, charges.

PGW will print supplier contact information, such as name, address, phone and web site or e-mail address, in a prominent location on Page 1 of the enrolled customer’s bill.

Capacity Assignment
PGW will release pipeline capacity to each firm-pool supplier based on the pool’s volume profile. The amount of capacity assigned on each pipeline will generally reflect PGW’s own shipping arrangements. This practice will result in an equitable distribution of demand charges.

Capacity assignments will be reviewed quarterly and adjusted as necessary. PGW has the capability to review capacity assignments monthly and will do so on request – we expect that more frequent adjustments to capacity may be needed in the months after a supplier first enters the market and is building customer participation.

Capacity for a firm pool will be calculated and released according to this formula:

Capacity = Average Day Load + ((Design Day Load – Average Day Load) X 23.17%) + Payback Quantity

Example:
A Pool uses 5000 Dth of natural gas per year.
The Pool’s Average Day Load (5000/365) = 13.7 Dth/Day
This pool has more heating than non-heating customers.
Design Day Load = 30 Dth.
Capacity for this pool = 13.7 + ((30 – 13.7) x .2317) + payback quantity (if any)
Capacity = 17.47 Dth per day (will be rounded to 18)

Note: See Balancing & Settlement below for information on payback quantity.

Profiling, Forecasting and DDQ
PGW’s new transportation management software features sophistocated profiling and forecasting capabilities. A profile of gas usage tied to historic weather and the predicted daily weather for several future days will be combined to forecast a firm pool’s probable gas usage on the next gas day and for approximately 3 subsequent days. Forecasts will be prepared and published every weekday, except holidays.

PGW will profile the approximately 30,000 commercial and industrial monthly-metered service points individually, based on usage history. Customers without adequate usage history will default to a rate/class profile. Residential customers will not be profiled individually; all residential customers will default to class-average profiles.

In simple terms, a profile is the result of combining a mathematical factor for the customer’s historic gas usage per heating degree day with the customer’s average daily baseload (gas used for non-heating purposes). By applying profiles to predicted weather and aggregating results at the pool level, the system can forecast pool daily usage with considerable accuracy. There is no charge to the supplier for forecasting services.

A pool’s forecast will determine its DDQ – Daily Delivery Quantity. PGW will prepare this figure and publish it to the EBB several days in advance of the beginning of a calendar month. The DDQ will be adjusted throughout the month based on the latest forecast of the pool’s needs. DDQ’s will be published to the EBB as early as possible every work-day morning, to facilitate timely nomination of the quantity of gas to be delivered on the following gas day(s).

The EBB: Nomination and Confirmation
PGW’s EBB is easy to learn and user-friendly in appearance and function. It takes little time to become proficient at navigation, nominating, and use of the EBB for the upload and download of enrollment and other transaction files. The only system requirements for use of the EBB are reliable internet access and Internet Explorer version 5.5 or above Please see the EBB Manual for Firm Suppliers.

When accepted to serve firm customers in PGW’s territory, a supplier will be given access to the EBB and to the on-line manuals stored there. If needed, training time on-site at PGW can be arranged. PGW’s Supplier Coordination Team will assist suppliers and their designated employee-users with setup, user rights, training, questions and support.

Since PGW will handle the forecasting, the supplier’s primary responsibility is to see that the quantity of gas dictated by the published DDQ is delivered every day. Suppliers to firm pools only incur balancing penalties if they fail to deliver the required supply.

A supplier must nominate a delivery quantity equal to his DDQ on PGW’s EBB by noon of the day before the gas day on which supply is expected. For deliveries on gas days beginning at 10:00 A.M. on a Saturday, Sunday or Monday, nominations need to be in by noon on Friday. The load forecast pertaining to the delivery day (and a few subsequent days) will be available by about 9:00 A.M. on the nominating day. Example: for gas to be delivered 10:00 A.M. Tuesday to 10:00 A.M. Wednesday, PGW will publish the pool’s load forecast to the EBB by 9:00 on Monday, and will expect the supplier’s nomination by noon on Monday. PGW will confirm nominations on Monday afternoon.

Nominations can be entered daily or in periodic “blocks” when appropriate, i.e., during non-heating seasons if pool membership is stable and DDQ is unlikely to change for a while.

Of course, suppliers must also nominate to and receive confirmation from the appropriate pipeline EBB’s.

Balancing, Reconciliation and Settlement; Gas Repayment Scheduling
Please consult the Gas Supplier Tariff (PDF, 283k) for detailed information on how and when penalties may be incurred. In short, a supplier will not incur daily or monthly balancing penalties unless he fails to deliver his DDQ. Exceptions and penalty levels are outlined in the tariff.

Unlike interruptible pools, which cash out each month, firm pools will carry an over/under balance forward and a supplier will repay in gas, for any PGW stored gas used by his customers over the winter months (November – March). Assuming that a pool does use some of PGW’s stored gas over the winter, repayment of that gas, or under-shipping if the pool used less gas than was delivered, will take place over the shoulder and summer months as scheduled by PGW.

A pool’s usage will be estimated by the system at the end of each calendar month, then finally reconciled 45-60 days later, after usage records for pool customers have been collected from all 22 billing cycles, any missing or estimated meter reads have been rectified, etc. The meter-reading and billing cycles for most monthly-metered customers will cross over calendar months, beginning in one month and ending in the next. Based on actual weather, the system will assign how much of the consumption was used in the calendar month to be reconciled, and how much will be carried forward to the next calendar period, and aggregate this information at the pool level.

Gas payback quantities will be determined based on any difference between quantity delivered and quantity calculated to be used by the pool. Then, the payback quantity will be spread evenly over the April – October repayment period and added to both capacity and DDQ. This figure will be recalculated and adjusted every month based on new data on deliveries vs. usage.

Although the method of calculating capacity release provides a generous margin, and will certainly allow a supplier to bring in all the gas his customers use over the course of a year, it is likely that a pool composed largely of heating customers will used some quantity of gas from PGW’s storage and LNG production during a cold winter. On a Design Day (0 degrees Farenheit), PGW brings in only 40% of the necessary gas supply via Firm Transportation capacity on the pipelines, and provides 60% of the supply from storage and LNG.

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