The Tennessee Valley Authority (TVA) has called on FERC to eliminate its rule for bumping/no-bump of interruptible transportation (IT), which gives IT gas that is already flowing priority over firm transportation (FT) service.

In response to comments by the Natural Gas Supply Association (NGSA), the TVA said the no-bump rule has outlived its usefulness and should be eliminated to make way for the higher priority FT services in harmonizing the natural gas and power markets. “When the interruptible transportation no-bump rule was established, our cell phones were the size of bricks, the internet was in its infancy, and natural gas deliveries were focused on citygate deliveries, not high-volume, direct-serve gas-fired power generators.”

The Federal Energy Regulatory Commission’s no-bump rule for interruptible service states that a shipper that is currently flowing gas cannot be bumped (lose its capacity) because another shipper with a higher priority (FT services) has decided to increase its receipt of gas.

At a FERC technical conference last August (see Daily GPI, Aug. 24, 2012), a TVA official said, “We want to buy firm transportation, but then it winds up sitting idle. It’s a hard message to continue to sell to senior management that we need firm transportation for gas-fired generation if it’s really taking a backseat to interruptible that happens to be in the queue before us. That’s an issue that I’m facing every day.”

“How can the natural gas industry encourage the electric industry to contract for FT in order to support infrastructure and reliability needs while at the same time keep IT arbitrarily elevated to the point that it is so valuable it can’t be interrupted only eight hours into the flow of the current gas day. This has been a cost shift borne by FT shippers for too long,” said the TVA, which serves power to more than 8.8 million customers in Alabama, Georgia, Kentucky, Mississippi, North Carolina, Tennessee and Virginia.

“Firm shippers paying demand charges under long -term firm contracts should always have priority as FT capacity is charged and paid for the entire gas day,” the authority said.

“TVA acknowledges that the need for reliability comes with a cost and has contracted accordingly. Therein lies the quandary of wanting to have your cake and eat it too. It is unreasonable for members of the gas industry to, on one hand, lobby for IT to be given a higher value over FT at any point; while on the other hand, stating generators need to step up and bear the cost of infrastructure.”

The TVA said “it is time for the natural gas industry to rightfully acknowledge FT rights exist for the entire gas day. The existing bumping/no-bump restriction developed two decades ago must be eliminated to allow those willing to pay the cost of FT to utilize their assets.”

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