FERC last week conditionally approved a tariff proposal callingfor Panhandle Eastern Pipe Line to provide a new hourly firmtransportation (HFT) service for gas-fired power generationfacilities, as well as for its other eligible customers.

The Commission suspended the tariff proposal to become effectivethe earlier of a date established in an order on rehearing or onJuly 10, 2000, subject to refund and the conditions spelled out inlast week’s order [RP00-162].

As with Reliant Energy Gas Transmission’s hourly service,Panhandle’s customers were concerned the proposed HFT service woulddegrade their use of the pipeline’s existing storage service, butthe Commission said just the opposite would happen. The HFT servicewould “complement its other firm [storage] services rather thandisplacing them,” the order noted, adding the shippers’ fears of”potential degradation of service are speculative.”

But it did agree the proposed HFT service posed the likelihoodof double penalties for Panhandle shippers — an hourly overrunpenalty and a daily overrun penalty. “Accordingly, Panhandle mustprovide an explanation addressing all of the concerns raised by theprotesters with regard to hourly overrun penalties…,” theCommission said.

FERC also objected to a proposed tariff provision that wouldlimit releases of hourly services under HFT to a minimum of oneday, while other firm hourly shippers under Panhandle’s EFT rateschedule are permitted to release capacity for any time period,including one-hour increments.”In the interest of promoting arobust secondary market for capacity,” the order directed Panhandleto revise its proposed tariff to reduce the minimum period forcapacity releases to one hour from one day.

Panhandle proposed limiting the proposed HFT service to primarydelivery points that are directly connected to its system andequipped with electronic gas management (EGM) and flow-controlequipment. FERC “will permit Panhandle to apply this requirement toall shippers who seek hourly service, including LDCs,” the ordersaid, adding that this would “prevent any confusion that couldoccur with metering the gas.”

But FERC was less taken with the second part of the proposal.”It is less clear that Panhandle needs to restrict hourly firmservices to only one shipper at each delivery point…..,” theorder noted. The Commission said it questioned whether such arequirement could be applied in a non-discriminatory fashion, anddirected Panhandle to file a “detailed explanation” addressing thisconcern and others.

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