Message-ID: <18790847.1075857506461.JavaMail.evans@thyme> Date: Fri, 14 Jul 2000 08:31:00 -0700 (PDT) From: jane.tholt@enron.com To: phillip.allen@enron.com, randall.gay@enron.com, tori.kuykendall@enron.com, patti.sullivan@enron.com, chris.foster@enron.com, mike.grigsby@enron.com Subject: El Paso Complaint Cc: jane.tholt@enron.com Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Bcc: jane.tholt@enron.com X-From: Jane M Tholt X-To: Phillip K Allen, Randall L Gay, Tori Kuykendall, Patti Sullivan, Chris H Foster, Mike Grigsby X-cc: Jane M Tholt X-bcc: X-Folder: \Jane_Tholt_Jun2001\Notes Folders\'sent mail X-Origin: Tholt-J X-FileName: jtholt.nsf Below is a summary of the discussions last week regarding the complaint against El Paso for oversubscribing the Socal Topock Point. The meeting started out by summarizing the dollar impact of the Border cuts to Amoco and Burlington of $3 million dollars and the additional fuel costs of $15 million that they have incurred when the mainline fuel was reduced and the gathering fuel was increased. Accordingly, producers are seeking a minimum of $17 million in compensation in some form or another. The biggest concern is that a total of 1.2 bcf/day is being nominated at the Socal Topock which can only deliver 540000 mmbtu/day. Socal Gas stated that this problem should go away when there system becomes unbundled (referred to as Gatekeeper).. The proceeding is currently pending CPUC approval and could be implemented as early as October 1, 2001. When the Gatekeeper is implemented , only 540000 mmbtu/day will be accepted at the Socal Topock border and must match up with the intra-state transport. SoCal Gas suggested taking the 1.2 bcf/day of nominations at the Topock delivery point and divide it up based on the original intent of the capapcity- 400 to Mohave; 540 to Socal Topock; and 180 to PGE Topock. They also stated they would accept less than 540 at Topock but needed a minimum of 300 to meet core needs. However, they wanted some type of compensation if their volume was reduced. They also agreed to live with the status quo until the Gatekeeper was implemented. This would result in firm rights being established at Socal Topock based on downstream rights. Williams owns Block 3 capacity and is willing to look at a CD reduction or a reduced take requirement or use of alternate points with a rate adjustment. After much discussion, El Paso came back with the following counter proposal: Recommended interim solution until Socal Gatekeeper implemented. Does not relate to receipt point rights. 1) Block 1 Capacity will always be alternate to Socal Topock (198000); 2)Block II Capacity can not be sold at PGE Topock (614000) 3) Amoco and OneOk each have a contract 45000/d which can go to Topock or Ehrenberg. It is recommended that they give up their Ehrenberg right and keep Topock right and Socal will give up like amount at Topock as well as shift an additional 70000 mmbtu/day from Topock to Ehrenberg resulting in approx. 115000 being shifted to Ehrenberg. 4) Rights fro expansion shippers would be carved up as follows: Socal Topock PGE/Mohave Topock Texaco 40 135 Burlington 26 74 Aero 5 15 Borax 7 12 LADWP 0 36 SWGas 0 20 5) Socal Topock would now be divided as follows: Expansion Shippers 78000 Socal Gas 425000 BLK 3 348000 (25-Amoco;20-Oneok;99-Williams;189 El Paso Merchant;15-Wlliams) Total 851000 540 divided by 841 would result in 37 percent cuts or 63 percent thruput. The producers were not happy with having to live with 37 percent cuts and felt that any transport sold after their Sept 28 complaint should be cut off the top which would be El Paso merchant services Blk 3. Separate meetings were then held amongst the Topock shippers to duscuss El Paso's counter -proposal. Producer group came back and told El Paso that they want the 63 percent thruput increased. Will accept CD reduction, rate design change or other forms of compensation. For the recommended volumes moved to Mohave/Pge Topock, they would consider a 30 percent reduction in CD demand as well as converting that path to a 100 volumetric rate. In other words, if the producers used the delivery point, they would pay max rate. If they did not, they would not pay anything. Block 3 shippers would agree to reduce deliveries to Socal Topock if their deals were converted to an agreed upon load factor-maybe 70 percent. For volumes shifted to non-Socal Points , they also want a 100 percent volumetric rate. Bottom-line is how much dollars is El Paso willing to pay to resolve this case. Each party is requested to submit a proposal to El Paso and they will study its entirety. No follow-up meeting was scheduled. Another topic that was also being discussed at the meeting was the perceived gaming on the system by the full-requirements customers-ie nominating more gas than they need in anticipation of cuts. It is thought that if this could be controlled there may be more certainty in the san juan regarding flows. El Paso recommended the following : Limit noms on Cycle 1 from San Juan based on previous day's total nom from all basins. No limits on Cycle 2-4. This caused some concerns because of week-end load swings andfluctuatingpower-plant loads. However, eoc's were willing to establish a technical committee to work on a formula if theSocal Topock point gets resolved. Regarding pooling, El Paso is proposing to add 8 additional pools in the keystone and 3 additonal pools in the san juan and 1 additional pool in the bondad. This process is in its early stages of conflict. Most people (Duke, Southern, Williams, Coral) are not on board with this. I will keep you advised of development. Please advise if you have any questions.