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New Hourly Pipe Service for Generators Approved

New Hourly Pipe Service for Generators Approved

FERC yesterday gave its endorsement to a transmission rate schedule proposed by Reliant Energy Gas Transmission that will enable the company to meet the hourly peaking needs of power generators. With this action, Reliant becomes the first gas pipeline capable of providing such service.

The Commission generally applauded the pipeline for proposing an hourly firm transportation service (HFT), pointing out that Reliant was able to accomplish this within the context of its existing rate schedule and without resorting to special negotiated deals with individual customers. It recommended that other gas pipelines use Reliant's proposal as a "model."

Reliant's HFT rate schedule was adapted from the pipeline's existing rate schedule for firm transportation (FT). The key difference is that the minimum duration of service under HFT is one hour, compared to one day under its FT rate schedule. Other notable differences include the following: contracting for HFT service will be done via the Internet, the maximum term of a service agreement will be limited to 90 days, and service agreements cannot be entered into more than 30 days in advance of their effective dates.

The base rates for the HFT service include a reservation rate of $0.7323/Dth, not to exceed $5.8584/Dth of hourly contract demand over any day; a commodity rate of $0.0087/Dth; and an overrun rate of $0.7410/Dth.

Due to the short-term nature of the HFT service, Reliant proposed to resolve monthly imbalances "more stringently" than the way it does with other services. Specifically, it proposed that HFT shippers be permitted to net or trade monthly imbalance only with other HFT contracts. But the Commission took issue with this restriction.

"Because Reliant has not shown why the 'intra-HFT' limitation is appropriate for Rate Schedule HFT while it is not needed for any other rate schedule, Reliant must eliminate it.....," the order said [RP99-282].

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