Based solely on reading this article on a recent ERC decision, I’m initially disappointed in balancing risks between NPC and retail consumers.
A year ago I wrote about intertemporal choices – and that’s what we’re facing here. There’s little at issue as to whether consumers will pay for NPC’s take-or-pay gas costs. But this, in my opinion, is a cash flow issue.
If I understand the decision correctly, consumers today will pay for gas contracted but not used. Consumers in the future who end up using that gas will get it for free.
NPC is in a much better position to take the cash flow hit than retail consumers are – they have better access to financing and at much better rates than consumers. Why is this not a deferred obligation of ratepayers, with those consumers in the future who benefit from the gas usage paying for it? The issue of who pays the carrying charges must be worked out, but it seems to me that obligation could be shared between today’s and tomorrow’s consumers.
Just my opinion. And, of course, I could be mis-reading this, not having read the decision itself.