Several producers who blasted El Paso Natural Gas last week in aSection 5 complaint at FERC got an earful right back from thepipeline yesterday. El Paso wasted no time in filing an answer, andin an interview with NGI, A.W. “Al” Clark, El Paso’s vice presidentof marketing and operations control, said this is just another casein which producers are attempting to hide behind FERC because theyare afraid of competition.

“These parties don’t like the competition. They have lost to thecompetition in the marketplace, and now they are crying to theFERC. This is a total non-issue,” said Clark.

The complaint filed last week by Amoco Energy Trading, AmocoProducing and Burlington Resources says the producers are losingmillions of dollars in access to the Southern California marketbecause El Paso does not allocate delivery point access at Topock, AZ(see Daily GPI, Sept. 23). They haveasked FERC to order El Paso to stop its current open season on 1.4Bcf/d of firm transportation capacity, which includes the massiveDynegy contract space, and have filed the complaint requestingfast-track processing. Specifically, the producers want FERC to tellEl Paso to cease and desist selling primary firm delivery pointcapacity at the Southern California Gas Co. Topock delivery point inexcess of capacity available at that point. They claim the volumesbeing nominated are currently double capacity at that point and ElPaso is about to exacerbate the problem by selling even more spacewithout specific delivery point specifications. Amoco said it islosing $1-2 million annually and Burlington said it’s losing$3,000/day because of the curtailments at the Topock point.

But Clark said the Commission has approved the deliveryprocedures on numerous occasions. “Our tariff simply provides thatpeople can buy capacity on our system and that capacity can beavailable for delivery at the four points at Topock: the SouthwestGas delivery point, the Mojave Pipeline delivery point, thePG&E delivery point and the SoCalGas delivery point. TheCommission has ruled on this on four occasions… And the courtupheld the Commission [after a similar complaint by Southwest Gas].

“This is nothing more than a transparent attempt on the part ofthose parties to put a cloud over the open posting that we are doing,”he said. The open season on the 1.4 Bcf/d of firm capacity to theSouthern California border is scheduled to close on Wednesday afterwhich Dynegy will have a window of opportunity to match the winningbid(s) if it wishes to retain the space (see Daily GPI, Aug. 31).

“These are the same people that did not bid for capacity when weput it out two years ago,” said Clark, “the same people that havebeen protesting the award of this capacity to Dynegy. They areusing the regulatory process to [reverse] their failures in thecommercial field.

“The Commission has told us that any one who has capacity on oursystem is entitled to go in to anyone of those four gateways [atTopock]. And the keeper of the gate, i.e., Southwest Gas, PG&E,Mojave and SoCalGas, is in charge of confirming the downstreamtransportation. This system has worked for seven years since Marchof 1992 when we put in our 400 MMcf/d expansion.”

Clark added the producers are really feeling the heat this timearound because the competition for California market access hasincreased significantly. The are several key reasons for this:2%/year gas market growth in California, growing demand for gasfrom new power generation plant operators in California, the”clockwise shift” in nationwide gas transportation because ofexpanded pipeline service between western Canada and the Midwestand eastern U.S. and Canada, and increasing demand in Mexico forgas to fuel power generation and other markets.

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