el paso assignment of contracts may come up again later wood signals that el paso ' s fr contracts are high on agenda
ferc denied rehearing of a june order that permits arizona public service co . to assign its full - requirements ( fr ) capacity contract on el paso natural gas to affiliate pinnacle west energy to serve a new gas - fired generation facility that it is building in arizona . on the surface , it seemed a clear victory for the companies involved . however , chairman pat wood made it very clear that he has concerns about fr service on el paso , which entitles customers to unlimited capacity at frozen rates , and that he plans to take up the issue at a later date .
" i will reluctantly go along with the order denying rehearing , but [ i ] look forward very aggressively to a forum in which we can address the capacity concerns " on el paso , wood said wednesday during a marathon commission meeting , the first over which he presided [ cpol - 90 , rpo 0 - 336 ] . the proper forum for discussion of the fr service will be el paso ' s order 637 proceeding , he noted .
as a lawyer , " it ' s hard for me . . . to find an excuse to grant rehearing here . because this is not the appropriate docket to do that , i will concede that after four months of being browbeat into submission . . . that sometimes you ought to fold up , " wood said . " but i remain concerned about the [ interplay ] on the pipeline that if we don ' t engage in some long - term planning , " the situation could " lead to a bedsore for the customers out there in the southwest . "
the new chairman made clear that he was not " a fan or supporter of 10 - year rate freezes or any extended rate freezes " that are made available to certain fr customers . " i understand that there ' s a tremendous disincentive here because of that for needed expansions to occur , " wood noted .
he openly invited parties to challenge at the commission the limits of fr service . he noted that fr customers " seem to have an unbounded upper - end , which i would love the opportunity to [ address ] if we ever get a contested pleading to define exactly just how full full - requirements can be . "
the " interplay " of frozen rates and unlimited access to pipeline capacity in a " growth part of the country that needs to have generation [ makes for ] a very complicated pipeline scenario , " wood said .
in the june order , ferc gave the go - ahead for el paso to construct and operate two delivery points and about six miles of lateral pipeline to provide service to the proposed gas - fired electric generation facilities of pinnacle west and duke energy maricopa llc in maricopa county , az . pinnacle ' s 2 , 120 mw redhawk power plant will require about 410 mmcf / d of gas , while duke ' s 1 , 000 mw arlington valley plant will burn 210 mmcf / d . both plants have scheduled in - service dates of june 1 , 2002 .
major producers and other el paso shippers attacked el paso ' s plan to provide fr service of 410 mmcf / d to the redhawk plant , arguing that the service would further constrain an already capacity - tight el paso system . specifically , they objected to el paso ' s plan to assign the fr contract ( 66 , 042 mmbtu / d ) of arizona public service to affiliate pinnacle west energy , as well as give a " huge increase " in the contract amount in order to serve the redhawk plant . the protestors further argued that the plan would give pinnacle west energy a competitive rate advantage over existing contract - demand customers on the pipeline .
el paso assignment of contracts may come up again later
wood signals that el paso ' s fr contracts are high on agenda
ferc denied rehearing of a june order that permits arizona public service co . to assign its full - requirements ( fr ) capacity contract on el paso natural gas to affiliate pinnacle west energy to serve a new gas - fired generation facility that it is building in arizona . on the surface , it seemed a clear victory for the companies involved . however , chairman pat wood made it very clear that he has concerns about fr service on el paso , which entitles customers to unlimited capacity at frozen rates , and that he plans to take up the issue at a later date .
" i will reluctantly go along with the order denying rehearing , but [ i ] look forward very aggressively to a forum in which we can address the capacity concerns " on el paso , wood said wednesday during a marathon commission meeting , the first over which he presided [ cpol - 90 , rpo 0 - 336 ] . the proper forum for discussion of the fr service will be el paso ' s order 637 proceeding , he noted .
as a lawyer , " it ' s hard for me . . . to find an excuse to grant rehearing here . because this is not the appropriate docket to do that , i will concede that after four months of being browbeat into submission . . . that sometimes you ought to fold up , " wood said . " but i remain concerned about the [ interplay ] on the pipeline that if we don ' t engage in some long - term planning , " the situation could " lead to a bedsore for the customers out there in the southwest . "
the new chairman made clear that he was not " a fan or supporter of 10 - year rate freezes or any extended rate freezes " that are made available to certain fr customers . " i understand that there ' s a tremendous disincentive here because of that for needed expansions to occur , " wood noted .
he openly invited parties to challenge at the commission the limits of fr service . he noted that fr customers " seem to have an unbounded upper - end , which i would love the opportunity to [ address ] if we ever get a contested pleading to define exactly just how full full - requirements can be . "
the " interplay " of frozen rates and unlimited access to pipeline capacity in a " growth part of the country that needs to have generation [ makes for ] a very complicated pipeline scenario , " wood said .
in the june order , ferc gave the go - ahead for el paso to construct and operate two delivery points and about six miles of lateral pipeline to provide service to the proposed gas - fired electric generation facilities of pinnacle west and duke energy maricopa llc in maricopa county , az . pinnacle ' s 2 , 120 mw redhawk power plant will require about 410 mmcf / d of gas , while duke ' s 1 , 000 mw arlington valley plant will burn 210 mmcf / d . both plants have scheduled in - service dates of june 1 , 2002 .
major producers and other el paso shippers attacked el paso ' s plan to provide fr service of 410 mmcf / d to the redhawk plant , arguing that the service would further constrain an already capacity - tight el paso system . specifically , they objected to el paso ' s plan to assign the fr contract ( 66 , 042 mmbtu / d ) of arizona public service to affiliate pinnacle west energy , as well as give a " huge increase " in the contract amount in order to serve the redhawk plant . the protestors further argued that the plan would give pinnacle west energy a competitive rate advantage over existing contract - demand customers on the pipeline .