Tennessee Gas Pipeline contends its tariff limitation onupstream capacity releases “neither frustrates nor hinders” thedrive towards competition in the retail natural gas market inMassachusetts, as a small LDC has claimed.
In a complaint filed last month, Fitchburg Gas and ElectricLight argued it would be penalized by the pipeline —specifically, its daily withdrawal capability from storage could becut by more than half this winter — if it assigned its firmupstream pipeline and/or storage capacity rights to competingmarketers so they could serve former LDC sales customers as orderedby the Massachusetts Department of Telecommunications and Energy(DTE).
In its reply on Monday, Tennessee countered that its tariff,which it noted has been approved by FERC, “does not prohibit therelease of capacity required by the 1999 DTE order.” In fact, areview of the DTE order and Tennessee tariff “confirms that thereis no conflict whatsoever” between the two, it told the Commission[RP01-87]. Further, Tennessee argued that other New England LDCshave addressed the challenges of retail unbundling withoutrequiring Tennessee to modify its tariff.
Fitchburg Gas of Fitchburg, MA, had asked FERC to act on itscomplaint by Dec. 1, the day the DTE had ordered mandatory capacityassignment to begin in the state. But Tennessee has argued thatsuch fast-track processing was “inappropriate.”
At the center of the dispute is Tennessee’s rate schedule for firmstorage services, which Fitchburg Gas says presents storage customerswith a Hobson’s choice — either forfeit their rights to releasecapacity upstream of storage or become subject to so-called “RatchetII” limitations on storage withdrawal during the winter months (seeDaily GPI, Nov. 15).
Under the tariff in question, Tennessee shippers who forfeittheir upstream capacity-release rights during the winter months areentitled to exceed the 110% “Ratchet II” maximum withdrawal levelon the pipeline. But those who refuse to give up their upstreamcapacity-release rights during the winter are limited in theirwithdrawal capability from storage.
Fitchburg said it had asked Tennessee for a “limited waiver” ofits tariff to comply with the DTE order, but it claimed thepipeline refused. Tennessee recalled events differently, however.It noted it offered the LDC “several alternatives” to “reasonablypreserve the flexibility which Fitchburg seeks without degradingservice to other [firm storage] customers.” But Fitchburg rejectedthe offer and filed its complaint instead, according to thepipeline.
Tennessee said the sole reason for the tariff restriction isoperational — to maintain the integrity of its system. “Byforfeiting their ability to release capacity upstream of storage,[firm storage] customers provide Tennessee with operational reservecapacity that it may use to replenish gas in storage and therebymaintain adequate storage levels to provide full excessdeliverability rights for all customers.”
If all Tennessee shippers were allowed to exceed the 110%limitation irrespective of whether they forfeited their upstreamcapacity-release rights during winter, “Tennessee would be unableto refill the storage because the upstream capacity would beunavailable,” the pipeline said.
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