NGI's Daily Gas Price Index 
published : October 17, 2001
FERC Issues NOPR on Intra-day Recalls of Released Capacity 
Given the inability of the natural gas standards-setting organization to resolve the issue of intra-day recalls of released transportation capacity, FERC has issued a notice of proposed rulemaking (NOPR) that would give releasing shippers the flexibility to re-nominate their recalled capacity at the next scheduling opportunity provided by an interstate pipeline. 
Existing Gas Industry Standards Board (GISB) standards require a shipper that wants to re-nominate recalled capacity to notify its transportation provider by no later than 8 a.m. Central Clock Time (CCT) on a nomination day at the latest, and bars partial-day recalls of capacity. FERC proposes to allow shippers to recall capacity and re-nominate the recalled capacity at each of the three intra-day nomination opportunities. 
"By enabling releasing shippers to recall and renominate capacity quickly, they will have greater incentive to release capacity, providing capacity purchasers with an alternative to purchasing pipeline interruptible service. At the same time, this proposal will provide replacement shippers whose capacity is recalled with the same advance notice and protection from bumping as is provided to interruptible shippers under the Commission's regulations," the NOPR said [RM96-1-019]. 
Existing GISB standards applying to capacity-release recalls were adopted in 1996, when there was only one nomination per day at 11:30 a.m CCT and a single non-standardized intra-day nomination, it noted. "But the circumstances under which the recall standards were developed have markedly changed as the number of nomination opportunities have now expanded to four nomination opportunities." 
Given the lack of "consensus supporting" GISB's existing recall standards and the standards-setting group's failure to settle the issue, the Commission is forced to "resolve the policy question regarding partial-day recalls," the NOPR said. Permitting partial-day recalls of released capacity, the Commission concluded, was in keeping with the overall regulatory changes that it enacted in Order 637. 
The Natural Gas Supply Association (NGSA), which represents major producers, and Houston-based Dynegy let FERC know that they weren't big fans of partial-day recalls. These could undermine system reliability, they contend, by shutting in production and increasing scheduling problems, overruns, penalties or operational flow orders. 
But the Commission discounted these arguments. "...[T]he use of partial-day recalls should create no additional scheduling problems since recalls will be scheduled according to the existing scheduling requirements. In effect, releasing shippers using partial-day recalls are creating another form of interruptible transportation to compete with pipeline interruptible capacity, and shippers purchasing recallable capacity should be subject to the same scheduling rules that apply to interruptible transportation. Partial-day recalls will be no more likely to result in shut-in production than interruptible transactions that are subject to being bumped under the current standards," the NOPR noted.