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Collateral Requirements

  • Duke Energy Ohio calculates both its winter and summer financial exposures to the operations of each gas supplier participating in its Gas Firm Transportation Program.
  • The winter financial exposure period begins October 1 each year and ends March 31 of the next year.
  • The summer financial exposure period begins April 1 each year and ends six months later on September 30.
  • Duke Energy Ohio evaluates financial statements provided by each gas supplier to determine whether the supplier is entitled to any unsecured credit.
  • If the financial exposure to Duke Energy Ohio exceeds the unsecured credit, if any, Duke Energy Ohio grants to the supplier, the difference must be secured with a Parental Guarantee of Payment, an irrevocable Letter of Credit, a cash deposit, or other mutually agreeable security or arrangement.
  • Duke Energy Ohio provides each supplier a 10-business day notice prior to the beginning of both the winter and summer financial exposure periods, informing them of any financial security actions that must be taken prior to the beginning of the new season.
  • In addition to seasonal collateral changes, financial exposure may be recalculated during a given season due to changes in gas volumes and/or number of customers within a supplier’s pool. When such situations occur, a gas supplier is required to take the necessary financial security action within five business days of being notified by Duke Energy Ohio.

Overview of Duke Energy Ohio’s Financial Exposure Calculation
  • Duke Energy Ohio calculates its financial exposure to each gas supplier for both the winter and summer collateral seasons.
  • For each season, Duke Energy Ohio looks at peak month usage for a 30-day period and applies anticipated market prices to the peak month gas volumes.
  • The exposure calculation for the winter season takes three days of the gas supplier’s maximum daily quantity usage multiplied by a rate that considers both the pipeline penalty rate for overruns and Duke Energy Ohio’s propane production rate.
  • The remaining 27 days of peak month winter usage is multiplied by the greater of Duke Energy Ohio’s highest delivered city gate cost of gas in the last 3 years, the current forward NYMEX price, or Duke Energy Ohio’s equivalent replacement cost of vaporized propane.
  • In addition, the calculation includes a debit for pipeline reservation charges and credits for “banked” gas.

For more information regarding Duke Energy Ohio’s gas supplier collateral requirements, please view Duke Energy Ohio’s current Gas Supplier Collateral Notice Filing with the Public Utilities Commission of Ohio.

Sample winter collateral calculations

Below are links to two spreadsheets showing the winter collateral calculations for a gas supplier having a pool with a load of 10,000 MDQ. The first spreadsheet applies when Duke Energy Ohio bills on the gas supplier’s behalf (consolidated billing), and Duke Energy Ohio has first secured interest in the receivables being billed. The second spreadsheet applies to dual billing, where both the gas supplier and Duke Energy Ohio issue separate invoices to a customer for their charges. The second spreadsheet also applies when Duke Energy Ohio bills on the gas supplier’s behalf but does not have a first secured interest in the receivables being billed.

Please contact Duke Energy Ohio's Certified Supplier Business Center at csbcreps@duke-energy.com with any questions regarding participation in Duke Energy Ohio’s Gas Firm Transportation Program.