FERC issues decision in pivotal restructuring case

After some delay, the Federal Energy Regulatory Commission (FERC) has issued its decision on the restructuring under Order 636 of Texas Eastern Transmission Corp. The action effectively authorizes Texas Eastern's restructuring pending approval of its revised compliance filing. It is being watched closely as a gauge of how the Commission will treat emerging issues in other pipeline restructuring proceedings. In its filing, Texas Eastern Proposed to offer no-notice firm delivery service combining gas storage with transportation from market area storage fields to the citygate. However, to satisfy Order 636's requirement that a pipeline make storage available on a stand-alone basis, the Commission ruled that Texas Eastern must file a rate schedule providing for unbundled open access firm contract storage. To determine the extent of customer demand for unbundled service, Texas Eastern was directed to make available for one year both unbundled storage service and no-notice storage service - with priority given to customers choosing no-notice service in the event demand for both exceeds capacity. After the one-year period, Texas Eastern is to report the amount of storage used to perform no-notice service, and evidence that it has retained storage capacity for Rate Schedule SS-1 service only to the extent neededmore » to provide no-notice service. Texas Eastern is then to make storage capacity not needed for SS-1 available for unbundled open access firm storage. SS-1 customers may elect to reduce their service by converting to unbundled storage service.« less