A small Massachusetts local distributor has asked FERC to waivea Tennessee Gas Pipeline tariff restriction that it claims could”frustrate” efforts to unbundle the natural gas market in thestate.

In a complaint filed Monday, Fitchburg Gas and Electric Lightargued it would be penalized by the pipeline — specifically, itsdaily withdrawal capability from storage could be cut by more thanhalf this winter — if it releases upstream capacity to competingmarketers so they can serve former LDC sales customers as orderedby the Massachusetts Department of Telecommunications and Energy(DTE).

Fitchburg Gas of Fitchburg, MA, located 50 miles northwest ofBoston, has asked the Commission to act on its complaint by Dec.1,the day the DTE has ordered mandatory capacity assignment to beginin the state. Although the LDC was the only complainant, itbelieves “it is likely that other shippers will join.”

Currently, the LDC is able to withdraw a maximum of 4,807 Dthfrom storage on Tennessee’s system daily. However, that numberwould be cut 47% to 2,278 Dth/d during Dec.-Feb. once Fitchburg Gasbegins releasing its upstream capacity to third-party marketers incompliance with the DTE directive, said David K. Foote, senior vicepresident with the LDC.

Tennessee’s tariff restriction on capacity releases by shippersis “unreasonable,” will thwart state unbundling efforts and iscounter to the goals of Order 637, Fitchburg Gas said in seekingthe waiver.

Moreover, Fitchburg Gas argued that Tennessee cannot justify thetariff restriction on operational grounds. The LDC said thereleasing shippers essentially would be bound to the same terms —they would be prevented from re-releasing the capacity upstream ofstorage and from changing the primary delivery point.

Fitchburg Gas contends the tariff restriction benefits one partyonly — Tennessee. “With the tariff restrictions in place,Tennessee will have the opportunity to remarket the excessdeliverability no longer available to the storage shipper forced toassign capacity by virtue of its state unbundling program.Alternatively, if the shipper elects the excess [storage]deliverability, Tennessee faces less competition in the secondarymarket because the shipper will not be able to release its Zone 0-4capacity,” it said.

In the event FERC rejects the waiver request, in effect allowingTennessee to cut the LDC’s storage withdrawal capability in half,Foote said Fitchburg Gas would be forced to buy higher priced gason the spot market to fill its firm transportation capacity (4,807Dth/d) between market-area storage and its citygate.

“Instead of being able to fill all that transport with gas thatwe have in storage, we would have to buy gas in the market area”during the winter heating season that would be “far moreexpensive,” raising annual gas costs between $27,300 and $158,730.

The higher costs would apply to all shippers behind Fitchburg’scitygate “whether they continue to purchase their gas fromFitchburg or switch to a marketer,” the distributor told FERC.

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