A request by Great Lakes Gas Transmission to exclude “sole-source” shippers from curtailment during the ongoing force majeure situation on its pipeline system has drawn criticism from the shippers whose service would continue to be curtailed.

Critics contend that Great Lakes is seeking special treatment from FERC for certain firm shippers, such as local distribution companies (LDCs), that deliver gas to “sole-source” customers, who depend entirely on Great Lakes for their supply. Meanwhile, they claim shippers to “non-sole-source” customers will be forced to bear the brunt of the curtailment, which is expected to last throughout March. The entire issue could be moot if the Commission doesn’t act soon.

The pipeline’s request for a waiver of its tariff curtailment provisions “unfairly and inefficiently shifts the entire burden of the curtailment onto a select group of firm shippers, all without any regard for the significant costs, hardships and market disruptions that will follow,” said Duke Energy Trading and Marketing LLC and Duke Energy Fuels LP [RP03-298].

Great Lakes was forced to curtail up to 10% (240-250 MMcf/d) of its daily throughput after it experienced a major outage at a unit at its Shevlin, MN, Compressor Station No. 3 on Feb. 24. The outage affected all receipts at Emerson at the Minnesota-Manitoba border for delivery to any point on the Great Lakes system downstream of Compressor Station No. 3, the pipeline told FERC.

Great Lakes earlier this month asked the Commission to allow it to exempt from the curtailment those firm shippers, such as LDCs, that deliver gas to communities and industrial customers, which have no other pipeline access. At the most, Great Lakes estimated that only about 13.5 MDth/d would have to be exempted from the current curtailment, if the agency were to grant its request.

Rather than seeking an exemption, the Duke companies said the “sole-source” shippers “should be addressing any curtailment shortfalls by relying on their own on-system peak-shaving, LNG and emergency supply assets, as well as their emergency supply arrangements with third parties, and by seeking out the numerous supply alternatives available in the marketplace.”

For example, “sole-source” shippers “should be actively seeking supplies from other Great Lakes shippers who may have sufficient load flexibility to alter their delivery patterns in order to deliver gas to the ‘sole-source’ delivery points.” or trying to secure short-term released capacity or using backhaul transportation to the affected points, the Duke companies noted.

If the Commission grants Great Lakes an indefinite waiver of its curtailment restrictions, they urged the agency to condition the waiver on the requirement that Great Lakes implement four minimum protections. Specifically, a party seeking the exemption must first certify in writing and under oath that it has exhausted all other reasonable avenues for obtaining gas; a party receiving the exemption must pay a reasonable premium for the transportation guarantees it receives at the expense of those shippers whose loads are targeted for selective curtailment; the premium payments should be distributed as compensation to those shippers whose loads were involuntarily curtailed on a disproportionate basis; and the pipeline first must curtail all lower-priority service, including interruptible transportation.

Likewise, Nexen Marketing U.S.A. Inc. and Mirant Americas Energy Marketing LP contend that Great Lakes “has failed to make a case” for an emergency waiver of its tariff curtailment provisions for “sole-source” shippers. “Since there are readily-available market-oriented alternatives to the ‘potential’ problems of the sole-source shippers, these options should be explored before a waiver is granted,” they said.

“While 13.5 MDth/d may be viewed by Great Lakes as de minimis, Nexen USA and Mirant are not prepared to concede that the non-sole-source shippers should have to bear the entire cost of the compressor outage.”

Absent proof that Great Lakes’ tariff procedures — both for capacity curtailment and for alternative transportation service such as backhauls and capacity release — are unable to meet the needs of “sole-source” shippers, they urged FERC to reject the requested exemption.

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