ROGM

ROGM was utilized on behalf of the Kansas Corporation Commission to quantify the stranded costs likely to be incurred by Kansas Gas Service Company as that entity opens its system to competition. This project involved a review of stranded-cost treatment by commissions and legislatures throughout the U. S. Then, stranded-cost amounts for pipeline storage and transportation contracts and long-term gas supply contracts were quantified. The analysis also identified stranded costs associated with regulatory assets, and incremental expenses likely to be incurred in the transition to retail competition. Expert testimony in support of the study was presented in KCC Docket No. 99-KGSG-705-GIG.

ROGM was used to assist Washington Gas in all phases of its unbundling effort, as it has aggressively pursued retail competition in Maryland, Virginia and the District of Columbia. Among other uses, it is currently employed to determine the Company's no notice requirements and ensure that Washington Gas is maintaining the appropriate levels of no notice capacity to maximize system flexibility and minimize penalties. The model determines the optimal resource mix to meet the Company's planning sendout curve, incorporating both over-deliveries and under-deliveries by third party suppliers. The planning sendout curve is that schedule of daily sendout that incorporates the maximum variations in weather, customer growth, and usage per customer that the Company will face over the planning horizon. Because Company sales and third party deliveries are both dependent upon weather, a key element of the analysis is the quantification of short-term weather forecast error. Determining forecast error involves reviewing historical 3-day look-ahead forecasts and using Monte Carlo runs to estimate the resulting probabilistic variances in the forecasted Sendout curves. The ability to determine an optimal portfolio necessarily implies an ability to determine those resources that are not needed (strandable). As a result, the study also determines those resources that are not needed and determines how the responsibility for those resources should be shared among customer classes, so that a measure of stranded costs can be attained.