The Pooling Factor

The Pooling Factor

In 1995, the Public Service Commission of Wisconsin created the "pooling factor" to help reduce daily balancing costs for individual customers.

Before the pooling factor was created, each transportation customer was responsible for the cost of its daily imbalances. Now, the pooling factor allows WPS to balance gas use among many customers. Some imbalances caused by customers who use more gas than nominated can be offset by customers who use less gas than nominated.

All information is combined at the end of each month. As a result, lower fees are charged to customers. WPS has used the pooling factor since January 1995 to help transportation customers control daily balancing costs.

Pooling Factor Example

Customer Individual Customer Imbalances
Nomination (therms) Usage (therms) Customer Imbalance Absolute Value Imbalance
A 150 200 50 50
B 100 90 -10 10
C 500 650 150 150
D 450 420 -30 30
E 150 100 -50 50
TOTAL 1350 1460 110B 290
Customer Individual Customer Imbalances
0-25% Tier One Imbalance Pooling FactorA Adjusted Tier One Imbalance >25% Tier Two Imbalance Pooling FactorA Adjusted Tier Two Imbalance
A 37.5C x 0.3793 = 14.22 12.5D x 0.3793 = 4.74
B 10.0 x 0.3793 = 3.79 0 x 0.3793 = 0
C 125 x 0.3793 = 47.41 25.0 x 0.3793 = 9.48
D 30.0 x 0.3793 = 11.38 0 x 0.3793 = 0
E 37.5 x 0.3793 = 14.22 12.5 x 0.3793 = 4.74
TOTAL         91.00B         19.00B

  1. Pooling Factor = Customer Imbalance / Absolute Value Imbalance. 110 / 290 = 0.3793
  2. Adjusted Tier One Imbalance + Adjusted Tier Two Imbalance = Customer Imbalance. 91 + 19 = 110
  3. 150 x .25 = 37.5
  4. 50 - 37.5 = 12.5