Opinion ID: 489534
Heading Depth: 3
Heading Rank: 2

Heading: Protection of Full-Requirements Customers

Text: 56 Minimum bills may also be justified on the ground that they protect full-requirements customers from bearing a disproportionate share of fixed costs should partial-requirements customers reduce purchases in favor of alternative supplies. Presumably, a substantial swing off the system by one customer could result in higher rates for all customers, since more fixed costs would have to be recovered per unit of gas sold. 57 Transwestern does not argue on appeal that its minimum bills can be justified on the basis of protecting full-requirements customers. Furthermore, Transwestern did not seek to justify its bills before the Commission on this basis. The Commission chose to consider this justification out of fairness to Transwestern's full-requirements customers, even though such full-requirements customers account for less than one-half percent of Transwestern's gas sales and did not intervene before the Commission. We too address the justification to determine that the end result is not unjust. 58 The Commission rejected this possible justification based on evidence that actual rate increases were modest, that any impact on Transwestern's full-requirements customers would be short-term, and that Transwestern has taken numerous steps to reduce its gas costs so that it can compete for sales to its partial-requirements customers. Such cost reduction will benefit full-requirements customers whose rates also reflect gas costs. It is also significant that Transwestern's partial-requirements customers account for 99.5 percent of Transwestern's total gas sales. Since Transwestern will certainly want to maintain sales to these customers, it stands to reason that it will seek to make its gas even more competitive. If it does so, its full-requirements customers will benefit in the long run. In any event, Transwestern's minimum bills cannot be justified on the basis that they are needed to protect full-requirements customers.