FERC yesterday dealt another blow to El Paso Natural Gas,finding that the pipeline had violated the Gas Industry StandardsBoard’s (GISB) standards pertaining to confirmation deadlines andconfirmation quantities.

The Commission decided in favor of Northwest Pipeline, whichfiled a complaint in January accusing El Paso of making adjustmentsto confirmed amounts scheduled to flow between the two systems”after” the confirmation deadline, creating scheduled quantitydiscrepancies for shippers on Northwest. Northwest insisted ElPaso’s practice violated GISB standards requiring connectingpipelines to make changes to confirmed amounts ( either due tocapacity constraints, confirming party reductions and/or associatedbalancing cuts) “prior” to the confirmation deadline.

“….[T]o the extent El Paso makes further adjustments toconfirmed volumes (even if characterized as ‘scheduling’) based oncapacity constraints on its system or changes in the volumes thatwill be accepted by its downstream connections, its practices donot conform to the GISB procedures,” the FERC order said[RP00-168].

“El Paso’s interpretation would have the effect of legitimizingvariances between confirmed and scheduled volumes regardless of thecause, with the attendant risk of increased mismatches at theinterconnections of the pipeline grid. The Commission, therefore,concludes that Northwest has no obligation to accept from El Pasothe scheduling volumes that vary from the confirmed volumes,” itnoted.

FERC said it appreciated that confirmation and scheduled volumes”may not always be the same” due to engineering reasons related tooperations. However, confirmations “are what a connecting pipelineshould be able to rely on so that it can schedule its own system,”it noted.

Moreover, the Commission said it understood that El Paso’sscheduling procedures are “particularly complex” and that “morefrequent” adjustments are required to its nominating and schedulingprocess due to capacity constraints, but “such complexities arematters that El Paso must resolve within the confines of its ownsystem, and the burden of those complexities should not be shiftedto Northwest or to its shippers.”

FERC also granted Northwest’s request for relief. It had askedFERC to order El Paso to calculate the scheduled quantities betweenthe two pipeline systems dating from June 1, 1999 to the present,based upon the confirmations El Paso sent to Northwest prior to theconfirmation deadlines. This would resolve the imbalance situationfacing Northwest shippers whose nominations were curtailed by ElPaso, Northwest said.

It “will shift the impact of any imbalances to the El Pasosystem and require the pipeline that has created the problem toresolve it. This is reasonable and the requested relief isgranted,” the order noted.

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