Swing Service Charge Information
Historically, the capacity cost associated with intrastate pipelines (pipelines wholly within the state of Florida) and capacity purchased from other local gas distribution companies within the state, was allocated to non-transporting customers only. That means the class of customers bearing these costs was primarily residential and small commercial type customers. Over time, the use of these intrastate pipelines and local distribution companies has increased and it has become necessary to identify a more equitable way to distribute the related costs. That has led to the development of the Swing Service Charge. This charge reallocates intrastate and local distribution company capacity costs across all eligible customers on the company’s system. In other words, it allocates a portion of these costs to the company’s transportation customers. The swing service charge is a cents-per-therm charge that will be included in the monthly gas bill and phased in over a five-year period beginning in April 2017.
For more information, call 800-427-7712.
A: Swing Service Charge is a ‘per unit’ cost used to cover the capacity charges associated with intrastate pipeline transportation. This charge is applied to all customers, however only customers who purchase their gas from a third party natural gas marketer will see the charge as a line item on their bill.
Q: How is this charge calculated?
A: It is calculated by multiplying the applicable charge based on your rate class by your monthly gas usage. For example, if you are a Central Florida Gas customer in the FTS-4 rate, your swing service charge per unit cost applied is $0.0091. If you used 1000 therms this month, the charge would be $9.10 ($0.0091 x 1000 therms). If you are a Florida Public Utilities customer in the GSTS-2 rate, your swing service rider per unit cost applied is $0.0083. If you used 1000 therms this month, the charge would be $8.30 ($0.0083 x 1000 therms).
Q. For how long will I see this on my bill?
A: The charge will be applied to your bill starting this month and will continue indefinitely. The per unit charge you are paying will increase over the next five year period in small increments to lessen the impact on our customers.
Q: Why do I have to pay this now?
A: Until now, only non-transporting customers (customers who buy their gas directly from FPU) were paying for costs associated with intrastate pipelines and capacity purchased from other local distribution companies. Now these costs will be shared amongst all customers regardless of who they buy their gas from.
Q: Will the charge always be the same (increase or decrease over time).
A: The amount will be phased in in small increments over the next five years to avoid impact on our customers.
Q: Has this been approved by the PSC?
A: Yes – The swing service charge was approved starting on April 1, 2017.
Q: Are all customer impacted by this?
A: Yes – all customers are paying their fair share for both interstate and intrastate pipelines capacity costs. However, only those customers who buy their gas through a marketer will see the line item on their bill.
Q: I don’t see a swing service charge on my bill, why?
A: For customers buying their gas directly from FPU, the charge is included in the price of gas (PGA). The swing service charge will only show up on customers’ bills who purchase their gas through a third party.
- Interstate pipelines – pipeline systems engaged in the transportation of natural gas across one or more state boundaries.
- Intrastate pipelines – pipeline systems that only operate within a state’s borders, linking natural gas producers and the interstate pipeline network to local markets.
- Local Distribution Company (LDC) – A regulated utility involved in the delivery of natural gas to consumers within a specific geographic area.
- Natural Gas Marketer – A third party supplier of natural gas, also referred to as a Pool Manager or Shipper.
- Transportation customer – A utility customer who purchases their natural gas supply from a Natural Gas Marketer.
- Non-transportation customer – A utility customer who purchases their natural gas supply directly from the Local Distribution Company.
- Capacity – The volume of natural gas which can be moved through a pipeline over a period of time.