Transcontinental Gas Pipe Line’s Y2K contingency plan to havetransportation nominations for the first seven days of the new yearsubmitted in advance by Dec. 28 has caused concern among some ofits shippers.

Transco filed the request for a limited waiver of tariffprovisions and FERC regulations on Sept. 2, asking the Commissionto allow it to require all of its shippers to provide gasnominations for the first week in January no later than 5 p.m. CDTon Dec. 28. Transco said it intends to use the nominations in theevent of a communications failure.

While applauding Transco’s foresight, Dynegy requested theCommission require the pipeline to waive imbalance penalties duringthe period and perform “after-the-fact reallocation” to matchscheduled capacity with actual shipper use in order to ensure thatpenalties will not apply for the contingency period.

The proposal “fails to designate how imbalance penaltiesassociated with standing gas nominations will be handled…Ordinarily, shippers would have the opportunity to manage theirimbalances through intra-day nominations to ensure service issustained and would likely utilize the intra-day nominationsopportunity to the fullest extent during this very volatile week ofthe year,” said Dynegy. “In the event Transco must move to itscontingency plan, however, a shipper’s hands will be tied withrespect to its ability to manage imbalances.”

Florida Gas Transmission said if the Commission approvesTransco’s plan, FGT wants no part in it because its automatednomination, confirmation and scheduling system simply can’t handleadvance nominations. FGT is joint owner with Transco of the MobileBay Onshore Pipeline, which Transco operates, and FGT transports309,000 Mcf/d on MBP. FGT also nominates gas transportationrequirements to Transco on behalf of its customers. In addition,FGT has three other interconnects with Transco and receives andadditional 140,000 MMBtu/d at those points.

“The FGT system overrides earlier nominations when customerssubmit more current nominations each day. Thus the one-time,seven-day nomination proposed by Transco cannot be retained in theFGT system,” the pipeline said. To implement a change in the FGTsystem would be too expensive, the company added. Besides, FGTdoesn’t think it’s necessary for its relationship with Transco. Inthe event of a communications failure FGT said it could “handdeliver nominations” because it’s located in the same city.

Furthermore, to require its shippers to predict seven days ofgas needs is ludicrous, according to FGT, particularly during apeak winter period. It would be more reflective of customers’ needsto simply rely on their most recently scheduled nominations, FGTsaid.

Rocco Canonica

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