Section 7.06 - Demand or Sendout Forecasts by Gas Companies(1)Scope and Purpose. This section sets forth the requirements for forecasts of demand and sendout which every gas company must meet in each long-range forecast in which a new facility is proposed. If no new facility is proposed, a gas company shall be required to submit a forecast of sendout only but shall not be required to submit a forecast of demand. Every gas company must file a long-range forecast. Forecasts of demand and sendout shall be submitted and reviewed so that the Council may better determine whether plans for new facilities as proposed by gas companies are in conformity with the energy, environmental and economic policies of the Commonwealth.
Interstate natural gas companies subject to Federal Energy Regulatory Commission regulation and persons who have filed an application with the Federal Energy Regulatory Commission for construction of facilities subject to the Natural Gas Act, and operating or intending to operate in Massachusetts will file demand or sendout data with the Council. Such data may be extracted from the companies' annual filings with the Federal Energy Regulatory Commission and shall be for informational purposes only; no adjudicatory proceedings will be held thereon. Duplicates of the companies' FERC filing may be submitted in lieu of the above demand and sendout data.
(2)Description of Agreements.(a) A long-range forecast shall include summary descriptions of all existing agreements with other gas companies relating to joint planning or joint forecasting of gas needs, to construction of future facilities, or to the purchase or sale of gas. This description shall include:1. the names of the parties to each agreement, identifying the role of each party;2. the Federal agency or Massachusetts Department of Public Utilities Docket or File Number, if any, associated with the agreement;3. the commencement and termination dates of each agreement;4. for agreements for the purchase or sale of gas, the amount of gas that will or may be bought or sold in each year covered by the long-range forecast. (If no figure is expressed in the contract, or if it may not be possible to fulfill the contract entirely because of supply constraints, the forecasting company shall estimate the amount of gas that will be bought or sold in each year covered by the forecast.); and5. for agreements for the joint planning or forecasting of gas demand and sendout, a summary of the provisions of the agreement.(b) For the purpose of this section the term "existing agreements" shall include such contracts, letters of intent, and precedent agreements as contain legal commitments. A company may at any time petition the Council by submitting a contract, letter of intent, precedent agreement or other agreement for a determination whether it is an existing agreement as defined in 980 CMR 7.06. The Council may require further information and shall within 60 days of the petition issue a determination. A company may petition in the alternative for a determination pursuant to 980 CMR 7.06(2)(b) that an item is not an existing agreement or for a determination pursuant to 980 CMR 4.04(3) that the item is exempt from public access; in such event the Council shall protect the confidentiality of the item as provided by 980 CMR 4.04(4).(3)Demand and Sendout Forecasting Requirements. Each long-range forecast shall meet the requirements specified in 980 CMR 7.06(4) and 7.06(7).(4)Time Frame. (a) Except as provided by 980 CMR 7.06(4)(b) or (c), the period of time to be covered by the forecast shall include: 1. the five calendar years preceding the year in which the forecast is submitted, for purposes of establishing historical baseline data for each of the categories of information to be included in the forecast;2. the current calendar year, for which both projected and actual data shall be submitted; and3. at least the succeeding five calendar years.(b) For purposes of the forecast required to be filed on or before May 1, 1976, the period of time to be covered shall, if the company forecasts on a calendar basis, include:1. the years 1970 through 1974 for historical purposes;2. the year 1975 as the current year; and3. at least the years 1976 through 1980 for forecast purposes.(5)Methodology for Forecasting Demand and Sendout. The Coimcil does not prescribe a particular methodology that must be used by all gas companies in forecasting fixture demand and sendout. However, the selected methodology must be explained and justified by the forecasting company in accordance with the requirements of this section. Furthermore, the methodology must meet the applicable requirements of 980 CMR 7.09. (a) The methodology shall be fully described, and such description shall include or be accompanied by: 1. identification of significant determinants of future demand and sendout, and of the means by which they were taken into account;2. description of data used in making the forecast, and identification of the sources of such data;3. explanation of techniques employed for gathering, organizing, adjusting, and extrapolating from or interpreting the data, together with examples of the applications of such techniques;4. significant assumptions made and the reasons for making them;5. a statement of the level of confidence of the company in dependent and independent variables, and explanations of how each statement of the level of confidence was determined.(b) The forecast shall be accompanied by explanations of whether and, if so, how it takes into accovmt and how were obtained the following actual and estimated determinants of future demand and sendout:2. price of gas and price elasticity of demand for gas (including costs of feedstocks used in production of gas), both absolute and relative to those of other forms of energy that may be substituted for gas and in end uses;3. income of consumers, or value of the gross product of the service area;4. energy policies of the Commonwealth and of the federal government, both currently existing and possible for the future;5. constraints upon the availability of gas or feedstocks;6. strategies of the forecasting company for promoting consumption or conservation of gas; and7. any other factors deemed relevant, such as investment by others in and use of capital goods that require gas, including residential appliances (e.g., stoves, water heaters and space heating systems), industrial and commercial equipment.(c) The forecast documentation shall be sufficiently explicit and complete to allow the Council to fully understand the forecast from the information presented.(6)Contents of Forecast. The demand and sendout forecast shall include the following items for each of the years it covers: (a) total annual gas demand and sendout in the forecast area, with breakdown for each of the classes specified in 980 CMR 7.06(7);(b) the peak daily winter demand and sendout, with a breakdown for each of the classes specified in 980 CMR 7.06(7)(a) and (b);(c) annual load factor, defined as average daily demand and sendout divided by maximum daily demand and sendout;(d) annual load duration curve, defined as the duration in days of each level of daily sendout;(e) load profiles, defined as sendout to be graphed as a function of the time of day, for a representative weekday in both January and August and for the winter peak day;(f) load profiles, defined as annual demand and sendout graphed as a function of the day of the year. Forecasts of the items required by 980 CMR 7.06(6)(c) and (f) are required only with reference to total gas demand and sendout in the forecast areas. Forecasts of the items required by 980 CMR 7.06(6)(d) and (e) are required only with reference to total gas sendout in the forecast area; no forecast of demand is required.(7)Level of Aggregation. (a) Separate forecasts of total annual demand and sendout and of peak daily winter demand and sendout shall be made for each customer class used by the company for billing purposes, and there shall be included data for losses, gas used by the company and gas unaccounted for.(b) For each rate class the customers of which are predominantly residential, the demand and sendout data required by 980 CMR 7.06(6)(a) and (b) shall be disaggregated for customers with and for customers without gas heating.(c) For each rate class the customers of which are predominantly industrial, the demand and sendout data required by 980 CMR 7.06(6)(a) shall be disaggregated by two digit Standard hidustrial Classification Code.