FERC said last week it has found Chicken Littles in the Y2Kplanning departments of several gas pipeline companies. TheCommission berated pipeline Y2K planners for crying “the sky isfalling” without any solid evidence that it is. To those pipelinesseeking a complete shut-down of multiple nomination periods justprior to and after Jan. 1, FERC explained that so far they have notprovided convincing arguments why such drastic methods would berequired.
Southern Natural, Natural Gas Pipeline Company of America,TransColorado and Columbia all filed plans to suspend nominationsand disrupt the normal course of business during a peak winterdemand period around Jan. 1 in an effort to prepare for the worst.A few pipes requested authorization to require shippers to filenominations several days in advance (see NGI, Nov. 1). But theCommission said they have provided “no assurances of anyforthcoming event that would necessitate a drastic change… TheCommission therefore rejects the automatic waiver of the nominationcycles and the postponement of the capacity release deadlinesproposed by these pipelines.”
Consistent with its approval of Transcontinental Gas Pipe Line’sY2K contingency plan, however, FERC did grant the others (Southern,TransColorado, Columbia, Koch and Iroquois) a limited-term waiver -from the time the Y2K emergency begins to Jan. 7 – of Section284.10(b) of the Commission’s regulations and the nominationprocedures in petitioners’ respective tariffs to be in effect onlyif a Y2K-related emergency prevents them from following the normalnomination process.”
FERC also ordered the pipes to give shippers a “wide degree oflatitude during the Y2K contingency period and accept nominationsby alternative methods.” In response to a request by Dynegy, italso directed the pipelines to waive imbalance penalties incurredas a result of implementing a Y2K contingency plan and performafter-the-fact reallocation to match scheduled volumes with whatactually flowed. The pipelines also must file their plans forhandling penalties in the event that advance nominations actuallyare used.
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