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FERC Approves Williams’ Park & Loan Service
The Federal Energy Regulatory Commission has conditionallyapproved a new interruptible park and loan service (PLS) to starttoday on Williams Gas Pipelines Central. The service – allowingcustomers to park or request a loan of gas at each of Williams’pools – was designed to give those customers greater flexibility ina market that has evolved from a monthly to a daily business. FERCapproved the service subject to refund and certain conditions.
The PLS service, for a minimum term of one day or a maximum of31 days, also will be offered at one logical (non-physical) pointin Williams’ production area and one logical point in its marketarea. The pipeline will back up the service using its line packflexibility and operationally available gas. Acting on a complaintby Amoco Production and Amoco Energy Trading, the Commission toldWilliams it must explain its calculations of certain of theproposed rates, saying it would review the information beforeaddressing the complaint or determining whether refunds werenecessary.
Also, Williams will be required to file an activity report afterone year listing separately the total volumes parked or loaned bymonth and the peak daily volumes for service by month. Affiliatetransactions must be separately identified, and Williams must listthe term for each PLS contract, including when gas is parked andwhen it is returned. It also must report the aggregate revenuesfrom the service during the first year.
The Commission rejected Dynegy’s plea to remove a servicerequirement that shippers would have only three days to remove orreturn PLS gas. Dynegy had complained it would be difficult forshippers to, for instance, remove or return quantities as large as1 Bcf within the allotted time. Also, Dynegy said “requiring anon-affiliate to pay back a large quantity of gas all at once couldraise prices to the benefit of a marketing affiliate who is long ongas.” The reverse of the situation – requiring a non-affiliatedshipper to remove parked gas – could lower prices, also potentiallybenefiting an affiliate who needs gas, Dynegy said. The Commissiondisagreed, saying the service is not meant to be used for largequantities of gas. It also reminded that the PLS service has a lowpriority and shippers should not be over-reliant on it since it canbe bumped by firm service.
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