El Paso Proposes System-Wide Re-Allocation of Receipt Point Rights 
With the FERC-ordered capacity re-assignments at the Topock, AZ, delivery points barely off the ground, El Paso Natural Gas has proposed a plan to re-allocate shippers' receipt point rights across its entire pipeline system in an attempt to improve delivery and scheduling. 
El Paso seeks to re-allocate shippers' receipt rights in a manner similar to the approach that FERC ordered in late February for the re-distribution of firm delivery rights at the Topock delivery points. In that order, the Commission directed El Paso to re-assign the delivery rights of the pipeline's shippers to more evenly match the design capacity of each Topock delivery point on the system. 
The latest proposal calls for El Paso to replace the 141 individual receipt points on its system with 20 pooling areas. With this move, contract demand (CD) and full-requirements (FR) customers would continue to have system-wide access to the supply basins (San Juan, Permian and Anadarko) that are connected to the El Paso pipeline; it just wouldn't be through a 141 different points [RP00-336-002]. "We found it would have been virtually impossible to divide all of those [receipt points] up in a meaningful fashion," said Robert T. Tomlinson, El Paso's director of regulatory affairs. 
Rate schedule FT-2 shippers, whose loads are "so small," would be served "right off the top...they would get their gas first" under El Paso's proposal, he said. Rate Schedule FT-1 FR customers would be served next, Tomlinson noted. They would be required to assign their primary receipt rights to specific locations on El Paso's system, but they would retain system-wide access to alternate points. 
Under the proposal, shippers would be allowed to choose their receipt point right preferences based on their contract rights, El Paso told FERC. El Paso then would use the "sameiterative process" --- the one it employed in assigning capacity to the Topock points --- to award receipt point capacity at the pooling areas. El Paso's re-allocation of delivery rights at the Topock points took effect April 1. In a sampling of opinion from several traders at the Southern California border, they indicated that the new allocation rules have improved deliveries at Topock-SoCal but at the cost of degraded service elsewhere. "We're still seeing some nominations cuts at Topock-SoCal, but they're not as bad as before," said one marketer, adding that out of 12 MMcf/d he had nominated there for Thursday, he had lost only about 1 MMcf/d. However, the marketer and others agreed that as traders have shifted volumes to other border points, it is creating the same kind of allocation problems that had been plaguing Topock-SoCal. Ehrenberg is starting to experience over-nominations, they said, and Wheeler Ridge "is really a mess now," according to one source. 
The allocation changes have had no impact on border gas prices, the traders said. This week's spike in border quotes has been a reflection of high California power prices that are being enhanced by the continuing loss of 3,000 MWs due to Tuesday's downing of a line on the 500-kilovolt Pacific DC Intertie. 
With respect to the new proposal, "shippers with receipt rights in a single basin will be allocated primary receipt rights to each pooling area within that basin based on the proportion of each pooling areas's design receipt capacity to the total receipt capacity within that basin," El Paso said, "All other shippers will be asked to provide an election that specifies a receipt pool where primary rights are desired, a quantity of rights desired at that location, and the location to which those receipt rights are to be delivered." CD shippers' primary receipt rights would equal their individual CDs, while FT-1 FR shippers' share of primary rights would be based on their billing determinants (BD), the pipeline said 
It noted that shipper elections that exceed the available capacity at a specific point will be allocated pro rata. "After processing is complete, each shipper will be notified what portion of its election was successfully allocated. This election and allocation process will be repeated until each shipper's defined volumetric entitlements (full BD or CD) have been assigned to primary receipt locations." 
In order to provide "greater scheduling certainty" and to "minimize the potential for capacity constraints," El Paso seeks to expand the number of pooling points on its system to 20 from six. "Although some poolers previously have objected to enlargement of the number of pools, saying that fewer pools preserve liquidity in the gas sales market, El Paso has also been asked by its shippers to provide greater certainty within the gas transportation marketplace. This proposal recognizes the pipeline's overriding obligation to its shippers." 
To carry out the system-wide allocation process, El Paso said it will provide its shippers with a "list of the receipt points within each new pooling area, the design capacity of each point, and the maximum quantity scheduled through that point during the past year." The pipeline believes its proposal will "allow all shippers an opportunity to make their preferences known at the outset while providing a mechanism for resolving the inevitable conflicts among those preferences."