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

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

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

But it did agree the proposed HFT service presented thelikelihood of double penalties for Panhandle shippers – an hourlyoverrun penalty and a daily overrun penalty. “Accordingly,Panhandle must provide an explanation addressing all of theconcerns raised by the protestors with regard to hourly overrunpenalties…..,” the Commission said.

FERC also objected to a provision that would limit releases ofhourly services under HFT to a minimum of one day, while other firmhourly shippers under Panhandle’s EFT rate schedule were permittedto release capacity for any time period, including one-hourincrements. “In the interest of promoting a robust secondarymarket for capacity,” the order directed Panhandle to revise itsproposed tariff to allow for unrestricted releases under the HFTrate schedule.

Panhandle proposed limiting HFT service to primary deliverypoints that are directly connected to its system and equipped withelectronic gas management (EGM) and flow-control equipment. FERC”will permit Panhandle to apply this requirement to all shipperswho seek hourly service, including LDCs,” the order said, addingthat this would “prevent any confusion that could occur withmetering the gas.”

But FERC was less taken with the second part of the proposal.”It is less clear that Panhandle needs to restrict hourly firmservices to only one shipper at each delivery point…..,” theorder noted. The Commission questioned whether such a requirementcould be applied in a non-discriminatory fashion, and directedPanhandle to file a “detailed explanation” addressing this concernand others.

Susan Parker

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