Subject: El Paso Complaint
From: [email-masked]
To: [email-masked], [email-masked], [email-masked], [email-masked], [email-masked], [email-masked]
Cc: [email-masked]
Date: Fri, 14 Jul 2000 08:31:00 -0700 (PDT)

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.