Chattanooga Gas Co. (CGC), which serves 60,000 customers in southeast Tennessee, has asked the Tennessee Regulatory Authority (TRA) to adjust its rates beginning in March to cover rising costs of providing natural gas to its customers. CGC last increased its rates nine years ago. If the rate hike is approved, a typical residential customer would pay about $3.20 more per month. The total rate increase requested is approximately $4.5 million. However, a reduction in gas costs of over $1 million dollars will be put into effect in the spring of 2004; this change will reduce the amounts charged for gas on customers’ bills. CGC’s new proposed rate plan will provide relief to low-income elderly customers and align customer rates to more accurately reflect CGC’s costs of maintaining its natural gas pipeline system. It will also enable the company to replace 100 miles of aging pipe, consistent with CGC’s goal of continually modernizing the gas infrastructure that has served customers for almost a century. Lindsey cited other pressures that have lead to CGC’s decision to request a rate adjustment, including growing employee benefits costs and bad debt, or uncollectible customer bills. CGC also asked the TRA to approve a cost tracking mechanism for additional expenditures to permit the replacement of a 100-mile segment of its over 1400-mile pipeline system. Some of the pipeline is almost 100 years old and needs to be replaced. Construction is expected to begin during 2004.
March
Articles from March
Industry Briefs
The Minerals Management Service (MMS) released a notice in the Federal Register on Lease Sale 190, scheduled for March 17, 2004. The sale will cover 22.6 million acres and 4,281 available blocks in the Central Gulf of Mexico Outer Continental Shelf planning area offshore Louisiana, Mississippi, and Alabama. Estimates of undiscovered hydrocarbons expected to be discovered and produced as a result of this sale proposal range from 276 to 654 million bbl of oil and 1.59 to 3.30 Tcf of natural gas. Blocks are located from three to about 210 miles offshore in water depths ranging from four to more than 3,400 meters. The lease sale includes a continuation of shallow-water deep gas and deepwater oil and gas royalty relief measures that were adopted in other recent Gulf of Mexico OCS lease sales for the purpose of increasing domestic natural gas and oil production. In addition, lessees can apply for added discretionary royalty relief on these leases, if needed. The next lease sale will be Eastern Gulf of Mexico Sale 189 on Dec. 10. It will include 256 blocks in the Eastern GOM Planning Area and covers 1.47 million acres. Estimates of undiscovered economically recoverable hydrocarbons range from 65 to 85 million barrels of oil and 0.265 to 0.34 Tcf of gas. The MMS estimates the net economic value for sale 189 to be between $100 million and $500 million. For more details visit http://www.mms.gov/.
Claudette Continues March North as Gulf Producers Watch and Wait
The course and the strength of Tropical Storm Claudette once it reaches landfall on the Yucatan Peninsula is still up for debate. While some hurricane watchers question whether the storm will be at hurricane strength when it reaches the Gulf of Mexico, meteorologists at Weather 2000 expect Claudette to become a hurricane before crossing the Yucatan. They said that all interests along the Texas Gulf Coast remain fair game for a potential hurricane strike.
CERI: Canadian Production Will Rebound But So Will Supply Costs
Despite recent sharp declines in Canadian production and exports to the United States (down 6% in March to 301 Bcf), a new analysis by the Canadian Energy Research Institute (CERI) concludes that as long as gas supply from unconventional sources, such as coalbed methane and new basins, can be brought on stream in a timely manner, gas production in Canada can be sustained at levels higher than currently exist through at least 2025.
Transportation Notes
More than a month after ending its last Overage Alert Day notice (see Daily GPI, March 25), Florida Gas Transmission cautioned market-area customers Wednesday that one might be issued for the May 1 gas day. “Currently FGT’s total linepack is now below targeted operational levels,” the pipeline said, and “FGT has experienced market area overburns during the past two days.”
CIG Awaits OPS Approval to Restart Service on Damaged Line
An explosion rocked a portion of Colorado Interstate Gas Co.’s (CIG) mainline in Colorado on March 23, but it did not interrupt natural gas deliveries to the region or cause any injuries, according to the pipeline. On Friday, a spokesman for El Paso Corp., which owns CIG, said repairs on the damaged section of the pipeline had been completed, and the company was awaiting clearance from the federal Office of Pipeline Safety (OPS) to begin flowing gas through the affected line.
Transportation Notes
There was no change in status Tuesday for a CIG rupture that occurred Sunday night in Weld County, CO (see Daily GPI, March 25), according to a pipeline spokesman. The company still anticipates there will be no interruptions in service and will post a bulletin board notice when repairs are completed, he said.
Open Season Set for Greyhawk’s NY Storage Project
Greyhawk Gas Storage Co. LLC, a joint venture between Falcon Gas Storage Co. Inc. and Emera Inc., will hold an open season beginning Monday (March 17) for capacity at its Wyckoff Gas Storage Project in Steuben County, NY. Up to 6 Bcf of working gas storage capacity will be available on a firm basis for terms ranging from two-to-10 years beginning October 2004.
SoCalGas Holds Storage Capacity Auction
Southern California Gas Co. will hold an auction March 20 for 12 Bcf of underground natural gas storage services, including 80 MMcf/d of firm injection and 400 MMcf/d of annual firm withdrawal service. The storage terms will be for a one-year duration, beginning April 1.
Open Season Set for Greyhawk’s NY Storage Project
Greyhawk Gas Storage Co. LLC, a joint venture between Falcon Gas Storage Co. Inc. and Emera Inc., will hold an open season beginning Monday (March 17) for capacity at its Wyckoff Gas Storage Project in Steuben County, NY. Up to 6 Bcf of working gas storage capacity will be available on a firm basis for terms ranging from two-to-10 years beginning October 2004.
