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Shippers Protest Tetco's New Hourly Service

Shippers Protest Tetco's New Hourly Service

Texas Eastern Transmission (TETCO) has come up with a novel way of solving its capacity turnback problem with a service providing firm hourly flexibility, but customers, particularly New England LDCs, aren't buying it.

The tariff modification Texas Eastern proposes would allow shippers under Rate Schedules CDS, FT-1, SCT and SS-1 to take up to 110% of 1/24th of their scheduled quantities for six hours on any day. Providing this ability to vary takes on an hourly basis during the day will mitigate the issuance of OFOs requiring uniform hourly takes this winter, Texas Eastern says. (RP00-543) The service has been proposed on an experimental, interim basis, to be evaluated in May.

To provide this flexibility TETCO would buy back from itself 130,000 Dth/d of spare capacity on its system to, in effect, provide an on-system storage service. In order to pay for the capacity the pipeline would eliminate the storage cost credit due other customers under Rate Schedules SS-1, FSS-1, SS and X-28.

"Texas Eastern is trying to recover $6.1 million in costs associated with unsubscribed capacity from its customers through elimination of the storage cost credit - even though the shippers receiving the credit are not the same shippers that will receive the hourly flexibility," New England LDCs said in a protest filed at FERC Sept. 27. The New England shippers said they would lose $1.5 million per year in storage cost credits and receive no benefits from the new service.

Although Texas Eastern said the proposal had been made at the request of its customers, the LDCs said they had objected to the plan when it was originally proposed last Spring, and the Process Gas Consumers said they had never seen it. PGC said the service constitutes a tariff change, which should be considered in the pipeline's Order 637 compliance filing. The industrial users point out that since TETCO's current hourly flow provisions to not explicitly state a shipper's hourly flow rights, the new service would effectively restrict those rights and therefore constitutes a degradation of service.

PGC also said it does not appear the service will eliminate the potential for a repeat of the numerous OFOs that TETCO issued last January, "rather it would provide additional flexibility for a certain class of shippers in the event TETCO calls an OFO."

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