In the event of a Y2K-related problem, Transcontinental Gas PipeLine said that any imbalances that are incurred on advancenominations by shippers will be exempted from the monthly cashoutpenalty calculation.

“Transco proposes to allow shippers to designate specificcontracts as being exempt from cashout penalties on the days thatTransco is unable to receive nominations only if the followingcriteria are met: 1) the shipper provides advancenominations…..by no later than Dec. 28, 1999; 2) Transco or theshipper experiences system problems in receiving, processing orconfirming nominations for all or any portion of…..Jan. 1—Jan.7, 2000 (the shipper must provide evidence of its inability tocommunicate with Transco); and 3) the shipper notifies Transco ofits election to have these days removed from designated contractsfor purposes of the penalty calculation by fax or e-mail no laterthan Jan. 15, 2000.”

Since Transco “has the ability to identify specific contracts orspecific locations, [it will] be able to isolate imbalance volumesfor specific dates and remove those imbalances from the penaltycalculation,” it said in an Oct. 15 letter to FERC.

The Commission asked Transco to explain how it planned to handleimbalance penalties for “standing” nominations in a Sept. 30 order,which approved a limited tariff waiver allowing Transco to move upits nomination, scheduling and capacity-release deadlines for thefirst week of the New Year as a Y2K precaution. As a result,Transco shippers will be required to submit nominations for theweek of Jan. 1-7 by Dec. 28.

In response to shippers’ concerns, Transco said it “will notunreasonably withhold consent” for reallocation of capacity volumesafter any Y2K problems have arisen. FERC had asked Transco toprovide shippers with further details of its “Y2K BusinessContinuity Plan,” but the pipeline said it had already met thatrequest.

“…..[T]ransco held a series of meetings at numerous locationsduring August and September this year, which each of its customersreceived notice of and had an opportunity to attend. The specificpurpose of these meetings was to convey Transco’s Y2K BusinessContinuity Plan, and Transco provided a brochure containing adetailed summary of its plan. [It] further identified persons whocould be contacted if customers had any questions about the plan.”

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