“Justice has been delayed far too long,” producer/shippers saidin petitioning FERC yesterday for expedited resolution of theircomplaint against “El Paso’s unjust and unreasonable pro ratacapacity allocation and scheduling procedures.”
Producers noted it has been 365 days since the originalcomplaint (RP99-507) was filed and “the situation today is worsefrom a scheduling perspective than it was on the day the complaintwas filed.” The latest resolution cited the Commission’s duty toissue timely decisions, and noted “reviewing courts have a duty to’compel agency action unlawfully withheld or unreasonably delayed'”The group faulted FERC’s endless procedures and failure to resolvethe case. It urged the Commission to order El Paso Natural Gas to”path” its system, matching receipts and deliveries as theproducers originally requested.
Affidavits filed by employees of BP Energy (formerly AmocoEnergy Trading), Texaco, Conoco and Burlington Resources testifiedto the companies’ loss of so-called firm capacity and the mountingfinancial damages.
“The scheduling cuts on El Paso’s system are currently out ofcontrol,” said Donald C. Lindquist, manager of Texaco Natural Gas’Fuels Management Group. “We have no idea from day-to-day how muchfirm transportation will be cut and ultimately stranded.” Texacohas 179,000 MMBtu/d of FT on El Paso for delivery at Topock. Thetotal volumes of stranded transportation for Texaco in July andAugust were 12,500 MMBtu/d and 18,800 MMBtu/d, respectively. Texacosaid because of the lack of transportation it has been forced topurchase Permian gas at a premium, “resulting in millions ofdollars of additional costs.” It also is losing suppliers becauseit has been deemed an “unreliable” buyer.
BP Amoco’s financial hit from continuing and increasing cuts inits firm capacity at the Topock delivery point and from the SanJuan Basin has gone from its originally estimated $1-$2 million tomore than $6 million in the last year. “In addition to thisfinancial harm, which consists of lost revenues from being forcedto find other less attractive markets for our production, as wellas stranded reservation charges …, Amoco is also realizing a muchlower price in the basin due to the recent increase in theCalifornia Border and San Juan basin differentials.” The affidavitby Penny Barry, manager of supply and transportation, west region,pointed out that consumers also are bearing a burden since theuncertainty of scheduling firm gas is contributing to widening thedifferential from the basin to the California border and hikingdelivered prices.
For the most recent month, August, BP Amoco’s cuts averaged 48%.Barry noted that the explosion on El Paso had not significantlyaffected the levels, since cuts before the rupture were 47% andcuts after the blast were 51%.
Burlington Resources, with three firm contracts, said cuts inits firm contracted capacity at Topock peaked at 66% in June, 58%in July and 58% in August. Cuts in its FT at Ehrenberg peaked at45% in June, 47% in July and 47% in August. Even its contract intoWaha and points East registered peak cuts of 45% in June 41% inJuly and 51% in August. All of the peaks were before the mid-Augustexplosion.
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