El Paso Natural Gas customers scored a key victory 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 kept it from delivering natural gas.

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,” said the order, which was issued in late November [RP04-34]. But pipes can give partial reservation credits in the case of unscheduled maintenance, which “generally results from an operational problem and is therefore a no-fault, force majeure event,” it noted.

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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