Natural gas producers and industrial customers insist theyaren’t the least bit interested in the Columbia pipelineaffiliates’ proposals to negotiate terms and conditions of service,saying pipelines have the potential now to offer them and othercustomers innovative services on a tariffed basis. Utilities, onthe other hand, were mixed in their reaction.

The pro forma proposals of Columbia Gas Transmission andColumbia Gulf Transmission are “premature” and should be rejectedoutright by FERC, Indicated Shippers and the Process Gas ConsumersGroup (PGC) urged the Commission separately. If it chooses not toreject them, they asked FERC to put a hold on the Columbia casepending the outcome of its generic review of the issue ofnegotiated terms and conditions.

Absent a generic finding, “it would be unfair now for theCommission to allow a myriad of separate proceedings to go forwardon these topics,” the PGC noted. In the event that FERC shouldreject both courses of action, it should “clearly indicate” thatthe Columbia docket will serve as the precedent-setting case, andput all other filings with similar proposals on hold, saidIndicated Shippers, which includes major producers and marketers.

The Columbia proposal – the first specific, comprehensive planof this nature presented by a pipeline – has turned up the heat onnegotiated terms and conditions of service at the Commission. FERCalready is said to be considering the topic on a generic basis aspart of its review of second-generation Order 636 issues; it hasset for hearing a Northern Natural Gas proposal that seeks tonegotiate certain terms and conditions as part of a rate filing;and it has pending a proposal by the American Gas Association(AGA), and endorsed by the Interstate Natural Gas Association ofAmerica (INGAA), outlining a plan to customize services forpipeline customers.

The Columbia proposals are “far more detailed” than any otherpipeline so far, including the “sketchy request” of NorthernNatural Gas, said PGC. “Ironically, however, even with a moredetailed proposal like Columbia’s the fundamental issues of unduediscrimination, damage to equality of service, and damage to thehighly competitive gas supply and service markets…remain veryreal and cannot be resolved under the procedures offered byColumbia.” Both PGC and Indicated Shippers insist the issue shouldbe taken up in a hearing rather than at a technical conference, asColumbia has suggested.

The pipelines, contend Indicated Shippers, are the only onesinterested in customizing their services. “…[N]o arguments havebeen presented by any end-use customers that even suggests the needfor or desirability of negotiated terms and conditions of service,”it told the Commission [RP98-249, RP98-250]. The Columbiapipelines, in justifying the need for negotiated terms andconditions, contend that the current regulatory structure hamperspipeline “creativity,” the group noted. But, it cautioned,”pipeline ‘creativity’ can be used as a smoke screen for pipelinemischief.”

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