FERC last week dealt another blow to El Paso Natural Gas,finding that the pipeline had violated the Gas Industry StandardsBoard’s (GISB) standards pertaining to confirmation deadlines andconfirmation quantities.

The Commission granted a complaint brought by Northwest Pipelinein which it accused El Paso of making adjustments to confirmedamounts scheduled to flow between the two systems “after” theconfirmation deadline, creating scheduled quantity discrepanciesfor shippers on Northwest. Northwest argued El Paso’s practiceviolated GISB standards that require connecting pipelines to makechanges to confirmed volumes ( either due to capacity constraints,confirming party reductions and/or associated balancing cuts)”prior” to the confirmation deadline.

“….[T]o the extent El Paso makes further adjustments toconfirmed volumes (even if characterized as “scheduling”) based oncapacity constraints on its system or changes in the volumes thatwill be accepted by its downstream connections, its practices donot conform to the GISB procedures,” the FERC order said[RP00-168].

“El Paso’s interpretation would have the effect of legitimizingvariances between confirmed and scheduled volumes regardless of thecause, with the attendant risk of increased mismatches at theinterconnections of the pipeline grid. The Commission, therefore,concludes that Northwest has no obligation to accept from El Pasothe scheduling volumes that vary from the confirmed volumes,” itnoted.

Even though El Paso’s scheduling procedures may be “particularlycomplex” and require “more frequent” adjustments to its nominatingand scheduling process due to capacity constraints, the Commissionsaid “such complexities are matters that El Paso must resolvewithin the confines of its own system, and the burden of thosecomplexities should not be shifted to Northwest or to itsshippers.”

FERC also granted Northwest’s request for relief. It had askedFERC to order El Paso to calculate the scheduled quantities betweenthe two pipeline systems dating from June 1, 1999 to the present,based upon the confirmations El Paso sent to Northwest prior to theconfirmation deadlines. This would resolve the imbalance situationfacing Northwest shippers whose nominations were curtailed by ElPaso, Northwest said.

Susan Parker

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