Transwestern Pipeline finances its maintenance with the monies it receives from shippers whose shipments are curtailed due to planned maintenance activities along its 2,600-mile system, a Fort Worth, TX-based gas marketer charges.

In a complaint filed at FERC this week, Cross Timbers Energy Services Inc., a unit of XTO Energy Inc., said it was charged $68,340 in reservation fees for 668,315 Dth of gas that Transwestern failed to deliver from May 8 through May 27 last year due to rescheduled maintenance activities on the San Juan Lateral from Ignacio to Blanco and from Blanco Hub to Thoreau. The gas marketer noted it, in effect, helped to pay for the maintenance work that caused its shipments to be curtailed.

“Transwestern failed to confirm and deliver 668,315 Dth or approximately 67% of the total quantity of gas Cross Timbers was entitled to nominate for transportation on the Ignacio-Blanco Line during the period of curtailment,” Cross Timbers told the Commission. By doing so, Transwestern effectively converted what was to be firm transportation for Cross Timbers into interruptible transportation service.

Cross Timbers said it paid Transwestern the $68,340 for the curtailed transportation service last September, but it did so under protest. The marketer now is calling on FERC to either order the pipeline to “disgorge its unjust enrichment,” plus interest, or to issue billing adjustments or reservation charge credits to compensate Cross Timbers.

Furthermore, the company asked FERC to require Transwestern to revise its tariff to conform its reservation charge credit obligations to Commission policy. Under its tariff, Transwestern is required to reimburse shippers only when service is curtailed during five months — December, January, February, July or August — or when deliveries to a shipper during months other than those five fall below 75% of the quantities nominated and confirmed for a period of 75 consecutive days. There are some exceptions to this rule, such as force majeure events.

Transwestern’s limitation of payment of reservation charge credits to these circumstances “is an unreasonable restriction of the Commission’s policy requiring pipelines to provide reservation charge credits in the event of curtailment of firm service that is within the pipeline’s control,” Cross Timbers contends.

Given that the pipeline is barred from raising rates for many of its customers until 2006, the marketer said Transwestern has only a “limited opportunity to recover costs” associated with routine maintenance.

“One way Transwestern finances such maintenance activities is by undertaking such maintenance during months when the pipeline is not required by its tariff to provide shippers with reservation charge credits for quantities the pipeline curtails due to its planned maintenance activities,” Cross Timber said.

“By paying for firm capacity that was not available, Cross Timbers essentially has advanced funds to Transwestern to enable [the pipeline] to finance the maintenance of the Ignacio-Blanco Line.”

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