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Enron Mail |
pls print. thanks. df
---------------------- Forwarded by Drew Fossum/ET&S/Enron on 01/26/2001=20 02:06 PM --------------------------- Nancy Bagot 01/26/2001 09:55 AM To: Shelley Corman/ET&S/Enron@ENRON, Mary Kay Miller/ET&S/Enron@ENRON, Drew= =20 Fossum/ET&S/Enron@ENRON, Robert Kilmer/FGT/Enron@ENRON, Janet=20 Butler/ET&S/Enron@ENRON, Dari Dornan/ET&S/Enron@ENRON, Glen=20 Hass/ET&S/Enron@ENRON, Bambi Heckerman/NPNG/Enron@ENRON, Frazier=20 King/FGT/Enron@ENRON, Teb Lokey/FGT/Enron@ENRON, Dorothy=20 McCoppin/FGT/Enron@ENRON, Ray Neppl/NPNG/Enron@ENRON, Maria=20 Pavlou/ET&S/Enron@ENRON, Janet Place/NPNG/Enron@ENRON, Michele=20 Winckowski/ET&S/Enron@ENRON cc: =20 Subject: Tennessee Hourly Firm Service conference Tennessee Tech. Conference on Order 637 including Hourly Firm Service January 24, 2000 Though the conference was billed as a combo of Order 637 and Hourly Firm=20 Service (FT-H rate schedule), Order 637 issues were not discussed. Tenness= ee=20 did a recap of where they are in that proceeding and explained how proposed= =20 changes to daily balancing impact FT-H. =20 Basic Description of FT-H ? The target audience of the FT-H is combined cycle base load generation, n= ot=20 necessarily peaker plants, though the service is available to all shippers.= =20 ? FT-H will be generally available capacity subject to an NPV open season. = =20 Contractual rights assigned to FT-H are firm daily quantities that can be= =20 nominated hourly as 1/18 to 1/4 of the daily quantity. =20 ? FT-H shippers must specify a 12-hour daily service period for MHQ=20 eligibility (i.e., 7:00 a.m. to 7:00 p.m.) and daily receipt quantities hav= e=20 e to match delivery quantities on a contract basis (not necessarily on a fl= ow=20 basis). =20 ? Nominations have a one hour start-up and shut-down time. =20 ? Balancing is the same as regular firm with no hourly balancing charges ? Rates are analogous to storage charges, with three components:=20 deliverability rate (hourly, 70%), capacity rate (daily, 30%), commodity=20 charge (based on flow). Summary With only lukewarm support of the proposal at the conference, Tennessee wil= l=20 gather and send some clarifying material out to parties, but will also thin= k=20 about pulling the service at this time. If they do continue with the FT-H= =20 proposal, the pipeline will file a modified proposal in two weeks with=20 comments due in mid-March. There may be a follow up conference to be=20 scheduled at a later date. A FERC order on the filing must be issued by=20 mid-May. FERC Staff stated that they prefer to keep Tennessee=01,s order 637 proceed= ing=20 (RP00-477) separate from FT-H (RP01-81). Tennessee met with customers on 6= 37=20 issues the following day (Jan. 24th) and will file a letter on their proces= s=20 going forward in RP00-477 by January 31st. Discussion After Tennessee=01,s explanation of the FT-H service, Staff asked questions= =20 about the impact of hourly service on other services, and began by asking i= f=20 Tennessee could make public any modeling or service studies done to determi= ne=20 the impact of FT-H on other points (Staff noted that this analysis or=20 transparent modeling should be filed for transparency). This opened the=20 debate about =01&historical operation,=018 which is the focal point of exis= ting=20 shipper concern. Shippers define historical operation as that they=01,ve= =20 received over time; Tennessee maintains that current tariff entitlements as= =20 contracted define current service, excluding enhanced services that may hav= e=20 been offered when available. LDCs are concerned with losing these =01&enhanced=018 historical services a= nd argue=20 that their contracts were signed so long ago that many of the services they= =20 use now were not available or defined then, and some, such as pressure,=20 wouldn=01,t be acceptable today as written in their contracts. At the hear= t of=20 the matter, LDCs have become accustomed to access to more than 1/24 of thei= r=20 MDQ in an hour and do not want their capacity to be defined as such. Also,= =20 there is concern over nomination priority using NPV to compete with FT-H. = =20 Other LDC concerns: =20 ? Preferences to secondary rights to FT-H over FT-A, ? Ability of FT-A to get MDQ on peak, ? NPV will bias against FT-A (Tennessee explained that a max rate FT-A=20 shipper wins over FT-H because of total hourly capacity). Generators, the alleged primary customer for this service, were lukewarm in= =20 their responses. Calpine and Dynegy said that they=01,d likely stick to FT= -A=20 for their plants. Though they encouraged FERC to accept the service, they= =20 were not convincing that they=01,d sign up for it today. =20 Dynegy detailed a list of concerns and issues with the service: ? Dynegy=01,s not interested in the 12-hour designated block of time, they = need=20 more flexibility, ? Ramp up time isn=01,t adequate, ? Rates are too heavily weighted toward demand side, ? Service needs to be somehow standardized for capacity release and=20 e-commerce, ? Penalty rates should not be based on power prices,=20 ? Third parties should be able to offer this in competition with Tennessee ? Offer FT-H as a seasonal service.
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