Missouri Code of State Regulations › Title 20 - DEPARTMENT OF COMMERCE AND INSURANCE › Division 4240 - Public Service Commission › Chapter 40 - Gas Utilities and Gas Safety Standards › Section 20 CSR 4240-40.016 - Marketing Affiliate Transactions

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: This rule sets forth standards of conduct,
				  financial standards, evidentiary standards and record keeping requirements
				  applicable to all Missouri Public Service Commission (commission) regulated gas
				  corporations engaging in marketing affiliate transactions (except with regard
				  to HVAC services as defined in section
				  386.754, RSMo Supp.
				  1998, by the General Assembly of Missouri).
(1) Definitions.
(A) Affiliated entity means any person,
				including an individual, corporation, service company, corporate subsidiary,
				firm, partnership, incorporated or unincorporated association, political
				subdivision including a public utility district, city, town, county, or a
				combination of political subdivisions, which directly or indirectly, through
				one (1) or more intermediaries, controls, is controlled by, or is under common
				control with the regulated gas corporation. This term shall also include
				"marketing affiliate" (as hereinafter defined) and all unregulated business
				operations of a regulated gas corporation.
(B) Affiliate transaction means any
				transaction for the provision, purchase or sale of any information, asset,
				product or service, or portion of any product or service, between a regulated
				gas corporation and an affiliated entity, and shall include all transactions
				carried out between any unregulated business operation of a regulated gas
				corporation and the regulated business operations of a gas corporation. An
				affiliate transaction for the purposes of this rule excludes heating,
				ventilating and air conditioning (HVAC) services as defined in section
				386.754, RSMo by the
				General Assembly of Missouri.
(C)
				Control (including the terms "controlling," "controlled by," and "common
				control") means the possession, directly or indirectly, of the power to direct,
				or to cause the direction of the management or policies of an entity, whether
				such power is exercised through one (1) or more intermediary entities, or
				alone, or in conjunction with, or pursuant to an agreement with, one (1) or
				more other entities, whether such power is exercised through a majority or
				minority ownership or voting of securities, common directors, officers or
				stockholders, voting trusts, holding trusts, affiliated entities, contract or
				any other direct or indirect means. The commission shall presume that the
				beneficial ownership of ten percent (10%) or more of voting securities or
				partnership interest of an entity constitutes control for purposes of this
				rule. This provision, however, shall not be construed to prohibit a regulated
				gas corporation from rebutting the presumption that its ownership interest in
				an entity confers control.
(D)
				Corporate support means joint corporate oversight, governance, support systems
				and personnel, involving payroll, shareholder services, financial reporting,
				human resources, employee records, pension management, legal services, and
				research and development activities.
(E) Derivatives means a financial instrument,
				traded on or off an exchange, the price of which is directly dependent upon
				(i.e., "derived from") the value of one (1) or more underlying securities,
				equity indices, debt instruments, commodities, other derivative instruments, or
				any agreed-upon pricing index or arrangement (e.g., the movement over time of
				the Consumer Price Index or freight rates). Derivatives involve the trading of
				rights or obligations based on the underlying product, but do not directly
				transfer property. They are used to hedge risk or to exchange a floating rate
				of return for a fixed rate of return.
(F) Fully distributed cost (FDC) means a
				methodology that examines all costs of an enterprise in relation to all the
				goods and services that are produced. FDC requires recognition of all costs
				incurred directly or indirectly used to produce a good or service. Costs are
				assigned either through a direct or allocated approach. Costs that cannot be
				directly assigned or indirectly allocated (e.g., general and administrative)
				must also be included in the FDC calculation through a general
				allocation.
(G) Information means
				any data obtained by a regulated gas corporation that is not obtainable by
				nonaffiliated entities or can only be obtained at a competitively prohibitive
				cost in either time or resources.
(H) Long-term means a transaction in excess
				of thirty-one (31) days.
(I)
				Marketing affiliate means an affiliated entity which engages in or arranges a
				commission-related sale of any natural gas service or portion of gas service,
				to a shipper.
(J) Opportunity sales
				means sales of unused contract entitlements necessarily held by a gas
				corporation to meet the daily and seasonal swings of its system customers and
				are intended to maximize utilization of assets that remain under
				regulation.
(K) Preferential
				service means information, treatment or actions by the regulated gas
				corporation which places the affiliated entity at an unfair advantage over its
				competitors.
(L) Regulated gas
				corporation means every gas corporation as defined in section
				386.020, RSMo,
				subject to commission regulation pursuant to Chapter 393, RSMo.
(M) Shippers means all current and potential
				transportation customers on a regulated gas corporation's natural gas
				distribution system.
(N) Short-term
				means a transaction of thirty-one (31) days or less.
(O) Transportation means the receipt of gas
				at one point on a regulated gas corporation's system and the redelivery of an
				equivalent volume of gas to the retail customer of the gas at another point on
				the regulated gas corporation's system including, without limitation,
				scheduling, balancing, peaking, storage, and exchange to the extent such
				services are provided pursuant to the regulated gas corporation's tariff, and
				includes opportunity sales.
(P)
				Unfair advantage means an advantage that cannot be obtained by nonaffiliated
				entities or can only be obtained at a competitively prohibitive cost in either
				time or resources.
(Q) Variance
				means an exemption granted by the commission from any applicable standard
				required pursuant to this rule.