Southern California Gas (SoCalGas) has called on FERC to put anend to El Paso Natural Gas’ alleged practice of over-booking firmprimary capacity at the SoCalGas/Topock delivery point inCalifornia. The distributor contends its own firm entitlements atthe delivery point have been cut between 25%-57% on a daily basisbecause of El Paso’s actions, and that it’s costing it nearly$46,000 a day.

In Section 5 complaint filed recently, SoCalGas asked theCommission to officially rule the SoCalGas/Topock delivery point isfully subscribed and “unavailable” for sales on a firm primarybasis, and that it also was fully subscribed during the Jan. 1 openseason when El Paso awarded more than 1.2 Bcf/d of capacity on itssystem to affiliate, El Paso Merchant Energy, and Williams EnergyMarketing.

Additionally, SoCalGas requested that FERC order El Paso to”cease and desist” violating existing FERC regulation and precedentby continuing to sell firm primary capacity into the delivery pointwhen none is available. And, it wants FERC to order El Paso tore-schedule the capacity it awarded during the open season lastJan. 1 or afterwards on a secondary basis into SoCalGas/Topockdelivery point.

Although the Commission has never ruled on whether theSoCalGas/Topock delivery point is fully subscribed on a firmprimary basis, the California distributor noted that FERC”expressly held” last April that El Paso could not sell firmprimary capacity into a point that is fully subscribed. But El Pasocontinues to flout that ruling, it said.

For example, SoCalGas cited one of El Paso Merchant Energy’scontracts with El Paso for firm primary Block III capacity (387,261Mcf/d) for delivery to SoCalGas/Topock, and Williams EnergyMarketing’s contract for 99,309 MMcf/d of El Paso capacity withprimary firm delivery rights into the SoCalGas/Topock deliverypoint. Also, it noted El Paso Merchant has entered into a series ofpre-arranged capacity release transactions each for 50,000 Dth/d ofBlock III capacity into the SoCalGas/Topock point for a four-monthperiod (July, 1-Oct. 31, 2000).

This capacity, as well as other capacity awarded by El Pasoduring the Jan. 1 open season and afterwards, “was acquired withthe express notice that the capacity would be subject toprospective changes in El Paso’s capacity-allocation procedures,”SoCalGas said. “Consistent with that notice,” it urged FERC todirect El Paso to re-schedule the capacity on a secondary basisinto SoCalGas/Topock.

El Paso’s scheduling practices at SoCalGas/Topock, as well asits contracts with affiliates, have been the target of othercomplaints brought by Amoco Production and the California PublicUtilities Commission. While they involved broader issues, SoCalGascontends the issue raised and remedy sought in its complaint aremore “narrow in scope,” and as a result could “aid in theresolution of [the] other pending related proceedings.”

In related action, Southern California Edison has asked FERC togrant Indicated Shippers’ request for “expedited resolution” ofthe complaint filed by Amoco Production and Burlington ResourcesOil & Gas more than a year ago. It was the first case to bringthe issue of capacity over-booking at SoCalGas/Topock to theforefront.

“It is axiomatic that justice delayed is justice denied. In thiscase, justice has been delayed – and denied – long enough,” Edisontold FERC [RP00-139]. The California utility urged the Commissionto either order El Paso to adopt “just and reasonable”capacity-allocation procedures, or “immediately” establish hearingprocedures for parties to litigate the justness and reasonablenessof El Paso’s current practices.

SoCalGas also is seeking fast-track processing of its complaint,saying that “only prompt Commission action can prevent continuingharm to SoCalGas and similarly situated shippers resulting from ElPaso’s proscribed behavior.”

SoCalGas estimated the design capacity at SoCalGas/Topock is539,464 Mcf/d, but it says El Paso by its own admission hascontracted on a primary basis for nearly three times that amount atthe delivery point – 1,466 MMcf/d. This has led to extensive cutsin the distributor’s daily firm entitlements at the delivery point,SoCalGas said, adding that it was costing it about $46,000 a day or$17 million annually.

Susan Parker

©Copyright 2000 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.