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Transco's Y2K Plan Under Fire

Transco's Y2K Plan Under Fire

Transcontinental Gas Pipe Line's Y2K contingency plan to have transportation nominations for the first seven days of the new year submitted in advance by Dec. 28 has caused concern among some of its shippers.

Transco filed the request for a limited waiver of tariff provisions and FERC regulations on Sept. 2, asking the Commission to allow it to require all of its shippers to provide gas nominations for the first week in January no later than 5 p.m. CDT on Dec. 28. Transco said it intends to use the nominations in the event of a communications failure.

While applauding Transco's foresight, Dynegy requested the Commission require the pipeline to waive imbalance penalties during the period and perform "after-the-fact reallocation" to match scheduled capacity with actual shipper use in order to ensure that penalties will not apply for the contingency period.

The proposal "fails to designate how imbalance penalties associated with standing gas nominations will be handled... Ordinarily, shippers would have the opportunity to manage their imbalances through intra-day nominations to ensure service is sustained and would likely utilize the intra-day nominations opportunity to the fullest extent during this very volatile week of the year," said Dynegy. "In the event Transco must move to its contingency plan, however, a shipper's hands will be tied with respect to its ability to manage imbalances."

Florida Gas Transmission said if the Commission approves Transco's plan, FGT wants no part in it because its automated nomination, confirmation and scheduling system simply can't handle advance nominations. FGT is joint owner with Transco of the Mobile Bay Onshore Pipeline, which Transco operates, and FGT transports 309,000 Mcf/d on MBP. FGT also nominates gas transportation requirements to Transco on behalf of its customers. In addition, FGT has three other interconnects with Transco and receives and additional 140,000 MMBtu/d at those points.

"The FGT system overrides earlier nominations when customers submit more current nominations each day. Thus the one-time, seven-day nomination proposed by Transco cannot be retained in the FGT system," the pipeline said. To implement a change in the FGT system would be too expensive, the company added. Besides, FGT doesn't think it's necessary for its relationship with Transco. In the event of a communications failure FGT said it could "hand deliver nominations" because it's located in the same city.

Furthermore, to require its shippers to predict seven days of gas needs is ludicrous, according to FGT, particularly during a peak winter period. It would be more reflective of customers' needs to simply rely on their most recently scheduled nominations, FGT said.

Rocco Canonica

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