acc comments to ferc on ca infrastruture fyi - - below is the gas daily article about the acc comments filed at ferc in the ca . infrastructure proceeding . gh
arizona warns of southwest capacity shortfall
california is not the only state worried about the adequacy of its gas pipeline infrastructure .
in recent correspondence with ferc , the arizona corporation commission urged federal
regulators to put california ' s capacity shortage in a broader regional context ; failure to do
so , the acc warned , might cause california ' s gas supply problems to spread to other states .
" given the regional , multi - state nature of the interstate pipelines in the southwest , any
actions taken by the ferc to address california ' s interstate pipeline system will have wide - spread
ramifications for arizona and a number of other states , " said the acc .
as part of its effort to tackle california ' s energy woes , ferc staff has been studying the
state ' s pipeline infrastructure to see if there are ways to improve the delivery of gas . in may ,
the commission hosted a conference devoted entirely to gas transportation issues in california
( gd 5 / 25 ) ; representatives from neighboring states also got involved .
in comments sent to ferc on june 22 , the acc expressed concern that measures to
remedy california ' s gas shortage might shift much - needed capacity away from its state . if
federal regulators do not press for the improvement of pipeline services throughout the south - west ,
it might " lead to a worsening of regional problems and / or a shifting or spreading of
problems from california to arizona and other states , " the acc argued .
in particular , the acc said that it was alarmed about the continued reliance of arizona shippers
on the el paso natural gas system . at present , two interstate pipelines - el paso and transwestern
pipeline - serve the state , but the bulk of arizona shippers only have access to the el paso system .
" the acc is becoming increasingly concerned with the pipeline capacity situation in
arizona and whether current natural gas shippers in arizona , with existing contract rights on
the el paso system , will receive reliable pipeline service in the future , " wrote the commission .
" it is widely recognized that the el paso system running through arizona to california has
been operating at very high utilization rates recently . additionally , it appears that little or no
additional pipeline capacity will be added by el paso in the near future to serve existing cus - tomers
and their existing contract rights , beyond the line 2000 expansion which will largely
replace capacity that has been lost for other reasons . "
el paso recently won approval for line 2000 , which will boost deliverability into califor - nia
by as much as 230 million cfd . but despite efforts to add capacity , the pipeline has been
dogged by complaints about access to its system .
according to shippers in texas , arizona and new mexico , el paso has proposed a new
allocation scheme that would force captive shippers to pay more for access to its system . echoing
the comments of the acc , the shippers said they faced degradation of firm service rights because
of el paso ' s diminished ability to deliver gas consistent with contractual obligations ( gd 5 / 30 ) .
ferc , in fact , is planning a technical conference next month to discuss the issues raised
by el paso ' s latest allocation plan . the meeting is scheduled for july 18 , but ferc allowed
that the meeting may continue through july 19 .
the concerns of the acc may help shore up the assertions of east - of - california shippers .
contrasting the access that california shippers have to pipelines and storage facilities , the acc said ,
" ferc should ensure that captive shippers are not disadvantaged due to their lack of options . "
most importantly , said the acc , ferc should encourage capacity additions that serve the
needs of both existing shippers and expansion shippers . " the complexity of the issues and the
potential for inadvertently exacerbating the region ' s pipeline capacity problems argues for a
careful and thorough approach to the issues , ensuring that customers in arizona , california and
elsewhere in the region are well served by any change in the treatment of pipeline capacity in
the southwest , " the acc concluded . ( plol - 4 , rpo 0 - 336 ) nh
glen hass
state government affairs
( 402 ) 398 - 7419
glen . hass @ enron . com