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Hourly Service for Panhandle Conditionally OK'd

February 21, 2000
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Hourly Service for Panhandle Conditionally OK'd

FERC has conditionally approved a tariff proposal calling for Panhandle Eastern Pipe Line to provide a new hourly firm transportation (HFT) service for gas-fired power generation facilities, as well as for its other eligible customers.

The Commission suspended the tariff proposal to become effective the earlier of a date established in an order on rehearing or on July 10, 2000, subject to refund and the conditions spelled out in the early February order [RP00-162].

As with Reliant Energy Gas Transmission's hourly service, Panhandle's customers were concerned the proposed HFT service would degrade their use of the pipeline's existing storage service, but the Commission said the opposite would occur. The HFT service would "complement its other firm [storage] services rather than displacing them," the order noted, adding the shippers' fears of "potential degradation of service are speculative."

But it did agree the proposed HFT service presented the likelihood of double penalties for Panhandle shippers - an hourly overrun penalty and a daily overrun penalty. "Accordingly, Panhandle must provide an explanation addressing all of the concerns raised by the protestors with regard to hourly overrun penalties.....," the Commission said.

FERC also objected to a provision that would limit releases of hourly services under HFT to a minimum of one day, while other firm hourly shippers under Panhandle's EFT rate schedule were permitted to release capacity for any time period, including one-hour increments. "In the interest of promoting a robust secondary market for capacity," the order directed Panhandle to revise its proposed tariff to allow for unrestricted releases under the HFT rate schedule.

Panhandle proposed limiting HFT service to primary delivery points that are directly connected to its system and equipped with electronic gas management (EGM) and flow-control equipment. FERC "will permit Panhandle to apply this requirement to all shippers who seek hourly service, including LDCs," the order said, adding that this would "prevent any confusion that could occur with metering the gas."

But FERC was less taken with the second part of the proposal. "It is less clear that Panhandle needs to restrict hourly firm services to only one shipper at each delivery point.....," the order noted. The Commission questioned whether such a requirement could be applied in a non-discriminatory fashion, and directed Panhandle to file a "detailed explanation" addressing this concern and others.

Susan Parker

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