Rhode Island commercial natural gas

How a Rhode Island business buys gas from a supplier it chooses

Rhode Island does not sell commercial gas choice the way it sells commercial electricity choice. There is no licensed gas supplier register to shop from, which is why searches for Rhode Island gas choice return so little. The mechanism exists, but it lives in the utility's gas tariff and it is transportation. A commercial account that wants gas supplied by someone other than Rhode Island Energy appoints a marketer, executes a Transportation Service Application, and takes transportation service: the utility keeps delivering to the meter, and the marketer supplies the molecules. The tariff, RIPUC RIE-GAS No. 101, issued in the name of The Narragansett Electric Company, offers two firm versions and one non-firm. Firm Transportation FT-1 requires gas usage to be recorded daily at the point of delivery and is available only to Large and Extra Large commercial and industrial accounts. Firm Transportation FT-2 requires no daily recording and is available to every commercial and industrial class. Non-Firm Transportation is offered on a best-efforts basis. The marketer, not the business, contracts with the utility: a marketer must be authorised by the Public Utilities Commission under the Commission's regulations for utility interaction with gas marketers, must meet the tariff's creditworthiness standards, and must hold an executed Marketer Aggregation Pool Service Agreement.

• No retail gas supplier register: the route is transportation service with a marketer.
• FT-1 requires daily metered usage and is limited to the largest classes.
• FT-2 requires no daily recording and is open to every commercial and industrial class.
• The marketer holds the utility agreement, not the business.

The rate class turns on winter behaviour, not on size alone

Rhode Island's commercial gas classes put unusual weight on how a site uses gas, not only how much of it uses. The commercial and industrial schedules split into Small, Medium, Large and Extra Large, and the two largest are further divided into high-load-factor and low-load-factor versions. The non-firm schedules state the test explicitly, and it is worth understanding even if non-firm service is never the right answer: the distribution charge turns on the ratio of usage from May through October to annual usage measured from September through August, with a break at 31 percent. A site with a summer-heavy load and a site that is mostly winter heating can sit in the same usage band and be billed on different distribution charges because of that ratio alone. Class assignment uses the higher of the most recent twelve months of usage or the twelve months before that, and it is reviewed every year after the August billing period, with any change reflected on the September bill. That makes the class an annual utility decision rather than a one-off, and it is the fact to check before a transportation arrangement is signed, because the class is what decides how much pipeline capacity the utility assigns to your marketer.

• Classes run Small, Medium, Large and Extra Large, with the two largest split by load factor.
• The off-peak test compares May-October usage with September-August annual usage, breaking at 31 percent.
• Assignment uses the higher of the last twelve months or the twelve months before.
• Reviewed after the August billing period, with changes landing on the September bill.

What stays on the utility bill whoever supplies the gas

A marketer arrangement replaces the gas cost line. It does not replace the delivery line, and in Rhode Island the delivery line is unusually itemised. The Distribution Adjustment Charge is a sum of named factors rather than a single figure: a system pressure factor, an infrastructure, safety and reliability factor, an environmental response cost factor, a pension adjustment factor, a service quality performance factor, a revenue decoupling adjustment, an arrearage management adjustment, a low income discount recovery factor, a storm net revenue factor, a reconciliation of deferred account balances and an earnings sharing mechanism factor. The utility files the Distribution Adjustment Charge annually on 1 July and its annual reconciliation by 1 August, so the delivery side of every commercial bill moves once a year without any decision by the customer. The bill also carries the Rhode Island gross earnings tax and an energy efficiency charge that applies to all gas delivered. The earnings sharing mechanism is the component worth understanding before a conversation about utility performance: it is the formula that returns earnings above the authorised return on equity to customers. None of these lines disappears because a marketer is supplying the gas; what changes is the commodity, and the commodity is the part that moves most.

• The distribution adjustment charge is a sum of named factors, filed each 1 July.
• Gross earnings tax and the energy efficiency charge remain on the bill.
• The annual reconciliation filing follows by 1 August.
• A marketer changes the commodity line, not the delivery components.

Firm or non-firm is really a question about a cold morning

Choosing between firm and non-firm service is not a discount decision; it is a decision about what the site does when the system is stressed. Non-Firm Transportation and Non-Firm Sales are both offered on a best-efforts basis. The tariff defines a critical day as any day when supply resource constraints are expected to affect the operation of the distribution system, and it provides for operational flow orders instructing marketers and customers to divert gas to or from the system. A business whose processes can be curtailed is a candidate for non-firm service; one that cannot has its answer already, because the saving only exists on the days the gas is not needed. Non-Firm Sales is also a distinct product rather than a rate variant: the utility supplies the gas, but the commodity is priced from a market reference instead of a filed cost, with the customer taking the difference at settlement. The tariff sets a floor to that arithmetic rather than a ceiling.

• Non-firm service is best-efforts, so a critical day can interrupt it.
• Operational flow orders are the utility's instruction to move gas.
• Firm service costs more because it works on the days that matter.
• Non-firm sales price the commodity from a market reference and settle the difference.

Capacity, exemptions and the assignment your marketer accepts

The part of a Rhode Island gas arrangement that surprises people is that delivery capacity is assigned to the marketer rather than chosen by the business. A marketer serving an account that migrates from firm sales to firm transportation must accept an assignment of a portion of the utility's firm interstate pipeline capacity at maximum rates, for an initial term of up to one year. The quantity is calculated from the account's peak day use and its load-factor rate class, with separate allocation percentages for high-load and low-load classes and for pipeline, storage and peaking, and those percentages are published in the utility's annual gas cost recovery filing. Peak day use is not a meter reading: it is estimated from the site's baseload use plus its use per degree day, multiplied by the design degree day value the Commission approves. A capacity exemption changes that arithmetic at a location, and the tariff recognises three routes to one: retaining an exemption as part of the 1999 revisions to the Business Choice programme in Docket RIPUC 2902, taking service on a non-firm rate schedule, or electing the exemption as a new customer. Marketers must also post a GET or sales tax exemption certificate to avoid the taxes passing through the arrangement.

• Pipeline capacity migrates to the marketer for an initial term of up to one year.
• The quantity comes from peak day use and the load-factor class.
• Peak day use is a forecast: baseload plus use per degree day at the approved design value.
• Three routes to a capacity exemption, including a retained 1999 exemption.

The operational terms that decide whether it works

Once a business supplies its own gas, the operational side stops being administrative. The gas day runs from 10:00 am to 10:00 am, so nominations cover a window that does not match the calendar day. Deliveries are reduced in kind by a company fuel allowance that compensates the utility for gas loss and unaccounted-for use. The difference between the quantity delivered and the quantity used is an imbalance, and imbalance settles between the utility and the marketer. Meter readings convert volume into therms through a BTU content factor that is recalculated seasonally, at the end of October and the end of April, from the transporting pipeline's previous six months of recorded factors, which is why the same meter reading can produce a different therm quantity in a different season. Pricing references a published daily index for the relevant citygate, and the tariff names the two it uses. The practical consequence is a division of labour: the marketer nominates, schedules and balances, and the business has to be able to say who inside the company answers when the marketer calls about a forecast.

• The gas day starts at 10:00 am, not at midnight.
• The company fuel allowance reduces delivered gas in kind.
• Imbalances settle between the utility and the marketer.
• The BTU content factor is reset at the end of October and the end of April.

The direction of the system, and what it means for term

Rhode Island is the state in this cluster where the regulator has formally asked what the gas distribution business itself is for. On 9 June 2022 the Public Utilities Commission opened Docket No. 22-01-NG, an investigation into the future of the regulated gas distribution business in light of the Act on Climate, which sets economy-wide emissions reduction targets on a path to net zero and obliges state agencies to weigh climate impacts in the exercise of their existing authority. The Commission's own scoping document frames the alternatives as creating a scalable market for low- and no-carbon gas, or moving customers off the gas system, and it identifies the utility's gas business as the largest emitting among regulated utilities in the state. Nothing in the docket changes the tariff today, and the tariff is what governs a bill; what it changes is the question worth asking. A transportation arrangement, a capacity assignment and a class review all get easier to justify when the site's gas demand is certain, so the harder question in Rhode Island is not which marketer to use but how many years of gas use the business is prepared to underwrite. One eligibility caveat applies to every energy page on this site: competitive supply depends on the service address, the meter and the utility territory, and municipal systems, co-operatives and some jurisdictions have no choice at all. HighGround may receive compensation from providers on completed purchases, and an enquiry places no order and switches no supplier: nothing moves until an agreement is signed, and the account stays on utility supply until transportation service actually starts.

• Docket No. 22-01-NG is an investigation, not a tariff change.
• The Commission frames the choice as a low-carbon gas market or a move off the system.
• Term should match how certain the site's gas demand actually is.
• Nothing switches until an agreement is signed.

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