As the Executive Committee of the Gas Industry Standards Board (GISB) recently ironed out most of the differences over one of the more contentious issues facing the industry – intra-day nomination standards – the year-long battle to implement procedures in El Paso Natural Gas’ tariff continued without an end in sight. El Paso had been expected to implement changes Nov. 1, 1997, at last giving its shippers several opportunities a day to nominate gas, correct nominations and schedule multiple (10) pool-to-pool transfers of gas. But the pipeline continues to push back its deadlines while changing its planned pooling provisions, which has angered shippers.

FERC issued an order Dec. 19 rejecting El Paso’s latest delayed implementation date of April 1, 1998 and required the pipeline to implement changes by Feb. 1. The Commission also rejected El Paso’s proposal to provide greater priority and weight to shorter pool-to-pool chains and required the pipeline to explain how that change would work and how it would be consistent with FERC policy.

El Paso agreed to comply, but in a Dec. 29 compliance filing said it couldn’t implement the changes until March 1 at the earliest. It said it needs 60 days to complete and test the programming to implement the changes. It also conditioned its implementation on FERC’s acceptance of certain revisions to the pooling and intra-day procedures.

The pipeline told the Commission the scheduling of pool-to-pool chains as currently envisioned discriminates against shippers trying to move gas directly from a first layer pool onto a transportation service agreement. More weight (scheduling priority) is given to chains with more pool-to-pool transfers. El Paso proposes to reverse the priorities, such that the pool chains with the fewest transfers will be scheduled first.

Indicated Shippers, which include Amoco subsidiaries, Conoco, Marathon, Natural Gas Clearinghouse, Texaco and Vastar, have urged FERC to crack the whip on El Paso, halt its “dilatory tactics” and require it to comply with the intra-day scheduling and pooling procedures in its Nov. 5 and Dec. 19 orders. “There should be no further slippage in the Feb. 1, 1998 effective date,” they said in a joint protest. “El Paso’s proposed preference for shorter chains here is merely an attempt to provide incentives to its shippers not to pool. This is counter to the intent of GISB and to the intent of Order No. 636, which was designed to encourage the development of market centers.. It is also counter to El Paso’s rationale in persuading its customers to agree to a limitation of 10 pool-to-pool transfers.. [T]o claim that it can only comply with the limitation of 10 transfers by giving greater scheduling weight (and associated priorities) to shorter transactions is retrading the deal. El Paso should not be permitted to implement this scheduling bias, nor to manipulate the regulatory process in this abusive manner,” they said.

El Paso, however, at least seems to have straightened out its intra-day nomination scheduling, something GISB’s executive committee apparently has yet to accomplish. A GISB task force met 20 times last year on these issues, but the proposed set of standards the committee approved still excludes an agreed upon flow time for gas nominated in the evening that involved bumping. Some members argued for a 5 p.m. flow time while others are seeking a flow time of 9 a.m. the following day. The committee plans to either resolve the issue at its Feb. 12 meeting or postpone a decision until after FERC issues its final order on a rulemaking proposed last November that would require pipelines to allow two intraday nominations that involve bumping in each flow day. The FERC action was directed at achieving uniformity across the grid and came as a result of GISB inaction.

The standards that were approved by the executive committee are as follows:

  • A timely nomination to be sent to the transportation service provider by 11:30 a.m. for gas flow by 9 a.m. the following day.
  • An evening nomination to be sent by 6 p.m. for gas to flow at 9 a.m. the following day, except for gas associated with bumping – displacing a scheduled shipper who has a lower priority for pipeline capacity.
  • On the day of gas flow, an intra-day nomination to be sent by 10 a.m. with gas to flow at 5 p.m. that day.
  • Also on the day of gas flow, an additional intra-day nomination to be sent by 5 p.m. with gas to flow at 9 p.m. that day.

The proposed standards also set procedures for dealing with discrepancies between nominations and confirmations.

Rocco Canonica

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