1. (a) The purpose of this part is to implement the Arkansas Public Service Commission’s policy principles as referenced in 23 CAR § 456-101.
2. (b) Each gas utility is expected to take all reasonable and prudent steps necessary to develop a diversified gas supply portfolio.

3. (c) The portfolio should consist of an appropriate combination of different types of gas purchase contracts and or financial hedging instruments designed to yield an appropriate balance of:

   1. (1) Reliability;
   2. (2) Reduced volatility; and
   3. (3) Reasonable price.

4. (d) In so doing, each utility should take into consideration various factors, including but not limited to:

   1. (1) Its particular circumstances;
   2. (2) The demographics of its customers;
   3. (3) The then-current market projections of both volatility and price;
   4. (4) Supply/demand estimates; and
   5. (5) Other relevant information that is available in the industry.
5. (e) This part is intended to be consistent with Arkansas Code § 23-15-103.

Codification Notes: This section was promulgated as Section 2 of the Natural Gas Procurement Plan Rules prior to codification in the Code of Arkansas Rules.