Questar Pipeline Co. (QPC) has received final approval from the Federal Energy Regulatory Commission of its plans to comply with FERC Order 636.
QPC is a unit of Questar Corp., Salt Lake City.
Order 636, issued in April 1992, implements the final phase of deregulation of interstate gas transmission in the U.S. and has spawned a massive restructuring of the U.S. gas pipeline industry (see related story, p. 15).
FERC's Aug. 2 decision resolves two key issues raised in a Mar. 2 order that QPC had asked the commission to rehear: allocation of gas storage rights and assignment of gas purchase contracts to QPC affiliate and local distribution company (LDC) Mountain Fuel Supply Co. (MFSC).
Now, MFSC can assume all available working gas storage capacity in the pipeline's three peaking reservoirs and 7 bcf of working gas capacity in the Clay Basin storage facility. The Clay Basin capacity reserved for MFSC is subject to Questar's issuance of a report to FERC following 1 year of restructured operation.
FERC also approved MFSC receiving all of QPC's gas purchase contracts. That allows MFSC to obtain full control of gas supplies Questar traditionally used to serve the LDC's needs.
Lowell Gill, QPC vice-president of regulatory affairs, said the pipeline will be able to meet a Sept. 1 deadline for restructured operations.
"We still have some minor tariff issues to work out, and we will participate in a technical conference with FERC staff and our customers sometime within the next 30 days or so to reach solutions that can accommodate QPC's and our customers' needs," he said.
QPC also was able to persuade FERC to approve its proposed daily balancing standards for its system, thus allowing customers to keep actual deliveries to within 5% of daily transportation nominations vs. the 10% level FERC first suggested.
FERC also ruled QPC will be able, upon filing a new general rate case, to recover all prudently incurred transition costs related to the 636 restructuring. QPC earlier asked FERC to approve recovery of about $9 million in transition costs now, but FERC ruled the request premature.
Copyright 1993 Oil & Gas Journal. All Rights Reserved.