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Enron Mail |
---------------------- Forwarded by Drew Fossum/ET&S/Enron on 11/29/2000
03:25 PM --------------------------- From: Drew Fossum 11/27/2000 06:01 PM To: Steven Harris/ET&S/Enron@Enron, Dave Neubauer/ET&S/Enron@ENRON, Kent Miller/ET&S/Enron@ENRON, Mary Kay Miller/ET&S/Enron@ENRON cc: Susan Scott/ET&S/Enron@ENRON Subject: TW Fuel This morning I raised a concern regarding TW's sale of excess fuel at downstream points. Here's the problem: the tariff requires shippers to tender fuel to us at their receipt points. With rare exceptions, those receipt points are not at the Cal. border. Order 636 mandates that pipelines unbundle transportation from storage. It also requires that pipelines that make gas sales do so at the furthest upstream point on their pipeline. That latter requirement means that if a pipe buys gas at point "x", it should resell the gas at point "x" and not haul the gas to point "y" and then sell it there as a delivered (i.e., bundled) product. My concern this morning was that our receipt of fuel gas in the San Juan or Permian and shipment of that gas to the Cal. border for sale arguably violates the unbundling requirement (because the Cal. border sale is a bundled combination of the sale and the transportation of the gas to the downstream location) or the "furthest upstream point" requirement or both. Susan and my recollection was that when ECS wanted to receive the Gallup fuel deliveries at a point other than Permian pool, we made them sign a transport contract to move the gas to where they wanted it. I haven't confirmed that recollection but I am recalling that we told Courtney that we couldn't just move our fuel gas around whereever we wanted it--we needed someone to pay us to transport it. Irrespective of what we did with ECS, I think the following is the correct way to look at this situation: We receive fuel at the shippers' receipt points. Once we receive it, however, it is no longer "fuel." It becomes line pack until it is burned. Line pack moves around based on a lot of reasons, including shipper imbalances, etc. It also, obviously, has to move to the compressors where it is burned as fuel. It is our job to manage line pack, and that means we buy line pack at locations where we are short, and sell it at locations where we are long. If we end up long at the Cal. border from time to time, we should sell excess line pack to get line pack back to optimal levels. I wouldn't want to get into a pattern where we are consistently buying line pack in the San Juan and Permian and selling line pack at the Cal. border, but thats not what we are talking about here. I can't think of anything in the tariff or otherwise that is inconsistent with this interpretation of our authority as operator of the pipeline. MKM--OK with you? DF
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