FERC has dismissed a complaint filed by Cross Timbers Energy Services, Inc. against Transwestern Pipeline after the two parties reached an agreement involving credits for firm shippers whose transportation is interrupted by maintenance.

Cross Timbers had claimed Transwestern should return payments Cross Timbers made for its firm transportation service on the Ignacio-Blanco Line that was interrupted for 19 days in May due to rescheduled maintenance work (see Daily GPI, March 15).

Cross Timbers had paid $68,340 in reservation fees, but filed a complaint demanding the money back, saying Transwestern’s limitation of payment of reservation charge credits to certain months was an unreasonable restriction of the Commission’s policy requiring pipelines to provide reservation charge credits in the event of curtailment of firm service that is within the pipeline’s control. Cross Timbers said Transwestern should be required to change its tariff to reflect Commission policy.

Transwestern responded that the charges were legitimate under its tariff, which requires compensating credits only for maintenance interruptions during the months of December, January, February, July and August. Since it is barred from raising rates for many of its customers until 2006, Transwestern has only a “limited opportunity to recover costs” associated with routine maintenance.

After the complaint was filed the two parties held private negotiating sessions and negotiating sessions with the Federal Energy Regulatory Commission’s Alternative Dispute Resolution staff, resulting in a settlement agreement.

On June 25, 2004, Cross Timbers and Transwestern filed a joint Satisfaction of Complaint and Motion to Dismiss, saying they had reached an agreement calling for Transwestern to file tariff sheets with its next general rate filing that will make its tariff provisions consistent with then-existing Commission policy with respect to reservation charge credits for firm shippers during periods of planned maintenance, unplanned maintenance, and force majeure events. The tariff sheets will be effective contemporaneous with the effective date of Transwestern rates and shall not be filed on a pro forma or other conditional basis. In return Cross Timbers agreed to dismiss its complaint with prejudice.

The settlement permits Transwestern to maintain its current tariff structure through the full term of its rate change moratorium in 2006, while also addressing the rate and policy issues raised by Cross Timbers, FERC said in agreeing with the settlement and dismissing the complaint.

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