SoCal Seeks OK to Hang 'Closed' Sign at Topock

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

In Section 5 complaint filed last week, SoCalGas asked the Commission to officially rule the SoCalGas/Topock delivery point is fully subscribed and "unavailable" for sales on a firm primary basis, and that it also was fully subscribed during the Jan. 1 open season in which El Paso awarded more than 1.2 Bcf/d of firm capacity on its system to affiliate, El Paso Merchant Energy, and Williams Energy Marketing.

Additionally, SoCalGas requested that FERC order El Paso to "cease and desist" violating existing FERC regulation and precedent by continuing to sell firm primary capacity into the delivery point when none is available. And, it wants FERC to order that the El Paso capacity acquired during the open season last Jan. 1 or afterwards be re-scheduled into the SoCalGas/Topock delivery point on a secondary firm basis.

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

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

This capacity, as well as other capacity awarded by El Paso during the Jan. 1 open season and afterwards, "was acquired with the express notice that the capacity would be subject to prospective changes in El Paso's capacity-allocation procedures," SoCalGas said. "Consistent with that notice," it urged FERC to direct El Paso to re-schedule the capacity on a secondary basis into the SoCalGas/Topock delivery point.

El Paso's scheduling practices at SoCalGas/Topock, as well as its contracts with affililiates, have been the target of other complaints brought by Amoco Production and the California Public Utilities Commission. While they involved broader issues, SoCalGas contends the issue raised and remedy sought in its complaint are more "narrow in scope," and as a result could "aid in the resolution of [the] other pending related proceedings."

The distributor is seeking fast-track processing of its complaint, saying that "only prompt Commission action can prevent continuing harm to SoCalGas and similarly situated shippers resulting from El Paso's proscribed behavior."

SoCalGas estimated the design capacity at SoCalGas/Topock is 539,464 Mcf/d, but El Paso by its own admission has contracted on a primary basis for nearly three times that amount at the delivery point --- 1,466 MMcf/d. This has led to extensive cuts in 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.

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