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Enron Mail |
Victory:
In a rehearing order issued yesterday in the complaint proceeding on El Paso's capacity allocation methodology at Topock, FERC required SoCal Gas to share the capacity it was allocated at the SoCal/Topock interconnection on a pro rata basis with the replacement shippers to whom it has released capacity unless otherwise provided in the release. ENA currently has about 60,000 MMBtu/d of released Topock capacity that it acquired from SoCal Gas. The initial order in this proceeding required El Paso to reallocate capacity among the four interconnects (SoCal, PG&E, Mojave, and Southwest Gas) that make up the Topock delivery point. El Paso's previous policy aggregated the four interconnects for the purpose of contracting for firm deliveries. Shippers thus had contractual firm rights to deliver about 1,555 MMcf/d to SoCal/Topock, but the physical capacity of the interconnect is only 540 MMcf/d. Because the best market prices are at the SoCal/Topock point, shippers nominate their full entitlements to SoCal/Topock, resulting in continual cuts and uncertainty in the marketplace. In compliance with the initial order, each firm shipper made a one-time election of the specific Topock point that it desired as a primary delivery point. Not surprisingly, all selected SoCal/Topock, and El Paso then allocated primary rights on a pro rata basis. SoCal Gas was allocated 489,822 Mcf/d at all the Topock points, but only 202,218 Mcf/d at SoCal/Topock. SoCal Gas then advised ENA and other replacement shippers that their capacity would be designated for primary delivery at the Mojave/Topock point. ENA's capacity therefore became significantly less valuable. ENA protested El Paso's report to FERC on the allocation process in which it provided for the releasing shippers to designate the delivery point entitlements of their replacement shippers. Cook Inlet also requested rehearing of the initial order, and Duke Energy Trading and Marketing filed in support of ENA and Cook Inlet. FERC's order yesterday means that ENA will get primary delivery rights at SoCal/Topock for at least a pro rata portion of its released capacity. The revised allocations will be effective April 1, 2001. Opportunity: The order also requires El Paso to file, within 30 days, in its Order 637 proceeding a proposal addressing systemwide capacity allocation issues, presumably assigning specific mainline and delivery point capacity rights and possible pathing of the entire system. Parties to the Order 637 proceeding will then have 20 days to file comments. This gives us the opportunity to address the EES problem in Arizona involving deliveries (or lack thereof) to customers behind Southwest Gas.
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