Shippers Dispute Kern's Wheeler Ridge Sales

Chevron, Amoco Production, CanWest Gas Supply, Aera Energy and RME Petroleum have called on FERC to stop Kern River Gas Transmission from overselling delivery point rights at Wheeler Ridge into the Southern California Gas Co. distribution system.

The Firm Shippers said in comments filed last week that, in a situation strangely similar to the recent El Paso capacity reallocation case, Kern River has oversold capacity at Wheeler Ridge, and its proposed expansion projects will significantly exacerbate the situation (Docket CP01-31). The comments were made prior to Kern's announcement last week that it plans to file an application with FERC to more than double its gas shipments to Wheeler Ridge (see related story this issue).

On Nov. 15, 2000, Kern filed an application to expand its system and provide 74,500 Dth/d of additional delivery point capacity at Wheeler Ridge into SoCal Gas. But Firm Shippers claim recent data provided by Kern and SoCal Gas indicates Kern River already has sold more than the 450 MMcf/d of firm delivery point capacity it has available into Wheeler Ridge. Firm Shippers told FERC. Kern River has sold 468.4 MMcf/d of capacity at Wheeler Ridge.

Not true, says Lynn Dahlberg, Kern's manager of marketing. "We have to date subscribed at 450,000 dth/d. And unless we subscribe at more than 830,000 dth/d, we have not sold more capacity than SoCal has takeaway." The combined Kern-Mojave lines can deliver on a firm basis 600,000 dth/d, with Kern having 450,00 and Mojave 150,000. "We can move more than that capacity, and we have," she added.

SoCal Gas has noted that it curtails nominations from Kern on a regular basis, Shippers said. With the proposed expansion project, Kern will be "creating the same type of firm delivery point over-sale situation that the Commission found to be unjust and unreasonable on El Paso Natural Gas at El Paso's SoCal Gas/Topock delivery point," they added. While they support the expansion, they do not want to see their firm delivery rights in Southern California degraded. They also complained that Kern's marketing affiliate is one of the primary beneficiaries of the proposed additional access to Wheeler Ridge.

Dahlberg conceded that other interstate lines also deliver to the Wheeler Ridge point, but "adding more players to Wheeler gives markets on Socal more supply options. Shippers have to compete."

The shippers are concerned, however that "substantial benefits under the currently structured proposal accrue primarily to Kern River and its affiliate and would restrict the firm rights of existing shippers...." The Commission should prohibit Kern from selling additional firm rights at Wheeler Ridge, or provide only rights to secondary and tertiary capacity that is of a lower priority than the rights of existing firm customers, they said. Rocco Canonica


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