Calling EPGT Texas Pipeline LP.’s tariffs “discriminatory, monopolistic and anti-competitive,” Falcon Gas Storage Co. Inc. has filed a petition with FERC seeking a rehearing of the recent Commission order that approved the rates, terms and conditions under which the El Paso Corp. affiliate provides transportation and storage services.

EPGT is owned by El Paso Energy Partners, LP. EPGT’s natural gas pipeline and storage facilities are located in Texas and regulated by the Texas Railroad Commission. However, Falcon pointed out that EPGT also provides interstate transportation and storage services that are subject to FERC regulation.

“What EPGT has done is to structure its transportation and storage tariffs so only EPGT can provide imbalance management services to shippers on its pipeline system, to the exclusion of storage service providers like Falcon,” said John Hopper, president of Falcon Gas Storage. “If you’re a shipper on the EPGT system and cannot meet EPGT’s ratable hourly flow requirements, then your only choices are to pay EPGT an imbalance penalty or to subscribe for parking and loaning services from EPGT. Either way, EPGT has structured its tariffs so it is the only game in town.”

A spokesman with El Paso said the company would need to review Falcon’s claims before issuing comment.

Hopper noted that Falcon provides a variety of gas storage services to its Texas customers from two high-deliverability, multi-cycle storage facilities that Falcon owns, including load-following and hourly balancing services from its Hill-Lake Gas Storage Facility that are designed to meet the highly variable gas supply requirements of gas-fired electric generation facilities. “EPGT requires ratable hourly receipts and deliveries of gas on its system, assessing imbalance penalties against shippers who do not balance hourly, daily and monthly,” Hopper said. “Gas-fired generators do not consume gas ratably. They burn gas the same way they dispatch power, which varies significantly from day to day as well as hour to hour within the day. EPGT is fully aware of this.

“We are very concerned about what EPGT is doing here,” Hopper added. “It looks like EPGT effectively is trying to monopolize the imbalance management market on its pipeline system. EPGT’s own shippers have told us that they want Falcon to be able to provide storage-based load-following and balancing services on the EPGT system because our services are superior to those EPGT offers. We’ve tried to work with EPGT to resolve this issue for six months, but as soon as they got their order from FERC, EPGT stopped talking to us.

“It’s clear that EPGT has no interest in having Falcon or anyone else compete with them. Our only alternative is to ask the FERC to do the right thing on rehearing and require EPGT to amend its anti-competitive tariffs that unduly discriminate against Falcon and other service providers, so EPGT’s shippers can have a meaningful choice of load-following and balancing services from someone other than EPGT. It’s all about competition.”

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