Three major New York utilities are supporting the application of Texas Gas Transmission to establish a web-based auction for short-term firm and interruptible capacity on its system (RP02-378).

However, Niagara Mohawk, New York State Electric & Gas and Rochester Gas & Electric, all customers of Texas Gas, said the pipeline should post the general rules of the auction process as part of its tariff for approval by FERC, rather than just include them on the web site. Detailed terms and conditions applying to specific transactions could be disseminated on the web site.

Texas Gas said that the auction “experiment” would be limited to daily and monthly bidding for short-term firm and interruptible transportation and for buying and selling gas for system management.

Texas Gas routinely has some capacity available every month, “not a lot, but we routinely have capacity available,” said Douglas Field, senior counsel for the pipeline. “We’ve sold it through telephone calls and faxes, but they are not necessarily the most efficient means.”

Texas Gas regards the auction process as an experiment. “As we gain experience using auctions, and with the software, and find it is a helpful and efficient technique, we might want to expand the process. We’re going to see what works and what doesn’t. The aim is to get better information into the marketplace so we can more effectively and efficiently sell capacity.”

Depending on how well the system works, Texas Gas could expand the auction process into other types of transactions.

Field said several factors had come together to promote the program. The pipeline has had some capacity available over the last year, and it had come across a relatively inexpensive software program to set up the auction web site from @TheMoment software company.

©Copyright 2002 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.