El Paso Natural Gas customers scored a key victory Friday when FERC rejected a tariff proposal that would have allowed the pipeline to credit shippers with only partial reservation charges in the event a scheduled maintenance prevented it from delivering natural gas.

The Commission “has held that in non-force majeure events, full reservation charge credits must be paid for all scheduled gas not delivered…Unscheduled maintenance generally results from an operational problem and is therefore a no-fault, force majeure event. It is, therefore, appropriate for all parties to share the burdens of such an interruption through a partial reservation credit.

“However, the Commission has held that scheduled maintenance is within the control of the pipeline and that full reservation charge credits must be given for service interruptions due to planned maintenance,” the order said [RP04-34].

While FERC “recognizes that maintenance is an important and necessary function,” the order noted that “the pipeline should have an incentive to perform maintenance with minimal service disruptions,” and “full reservation charge credits for scheduled maintenance provide that incentive.”

The El Paso tariff proposal did not comply with a July 9 order in the case, which restricted payment of partial reservation charges to force majeure or no-fault events, and it further “was not necessary for the conversion of full requirements contracts to contract demand contracts” on the pipeline’s system, as El Paso had argued, the order said.

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