Amoco Energy Trading, Amoco Producing and Burlington Resourcestold FERC this week in a Section 5 complaint that they are losingmillions of dollars because of El Paso Natural Gas’ poor firmdelivery point allocation procedures at Topock, AZ.

They have asked FERC to order El Paso to stop its current openseason on 1.4 Bcf/d of firm transportation capacity, which includesthe massive Dynegy contract space, and have filed the complaintrequesting fast-track processing against El Paso, calling for achange in the way the pipeline allocates its firm delivery pointcapacity. Specifically, the producers want FERC to tell thepipeline to cease and desist selling primary firm delivery pointcapacity at the Southern California Gas Co. Topock delivery pointin excess of capacity available at that point. They claim thevolumes being nominated are currently double capacity at that pointand El Paso is about to exacerbate the problem by selling even morespace with no specific delivery point specifications.

Amoco said it is losing $1-2 million annually and Burlington islosing $3,000/day because of the curtailments at the Topock point.Amoco provided the Commission with confidential market data showinghow El Paso’s allocation method “has the practical effect ofoversubscribing” the point. “For example, Amoco has experienced aprorationing of firm sales that has been documented on a systemwidebasis for the last 16 months with a ‘good faith’ financial impactof between $1 [million] and $2 million annually. Similarly,Burlington estimates that within the last month alone (after Dynegyswitched its PG&E Topock point to the [SoCalGas delivery]point) Burlington has lost revenues of approximately $3,000/daybecause it has been forced to find other less active marketsrequiring sales at an average discount of 10 cents/Dth. Thissituation will be exacerbated if El Paso is permitted to continuesuch practices…”

The producers said the pro-rata cuts at the SoCal point haverisen to as high as 57% of nominations recently. Current capacityat the point is 530 MMcf/d, but SoCalGas is one of four deliverypoints at Topock and total deliveries to Topock exceed 2 Bcf/d. Theproblem is that many El Paso contracts do not specify a specificdelivery point but instead give shippers the flexibility to deliverto several points at Topock.

The producers want a fast track procedure because the problem isabout to be exacerbated as bids on 1.4 Bcf/d of firm capacity, mostof which has no specific delivery point requirements at Topock, aredue Sept. 29. Most of the 1.4 Bcf/d is under contract with Dynegyuntil the end of the year, but a portion is held by Burlington,Williams and MGI Supply.

The producers said they are not seeking to reopen the El PasoSettlement case (RP95-363) but they do want FERC to find that ElPaso’s current allocation methods at Topock are “unjust andunreasonable and should be replaced by a system that requires ElPaso to designate specific primary delivery points under itscontracts along with a specific contract demand quantity at eachsuch point.”

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