U.S. GAS PIPELINES MOVE TO COMPLY WITH ORDER 636

More U.S. interstate pipelines have unveiled plans to comply with the Federal Energy Regulatory Commission's Order 636 megarestructuring rule.

In the latest developments:

Texas Eastern Transmission Corp. (Tetco) filed the first Order 636 compliance proposal with FERC outlining new transportation rates, operational issues, and services the company plans to offer.
Tenneco Gas will eliminate a layer of managers and split marketing and transportation functions into four divisions to deal with Order 636.
ANR Pipeline Co. made organizational changes expected to help it participate faster and more effectively under Order 636. The company in mid-May made gas sales a stand alone activity, reorganized system sales by region, and consolidated transportation and storage functions.

FERC's long awaited megarestructuring rule, issued early in April, aims to assure that open access, interstate pipelines provide equal services for all gas suppliers (OGJ, Apr. 13, p. 32).

Companies are to submit transition plans to FERC by Nov. 2.

TETCO FILING

George L. Mazanec, Tetco president, said proposals in the company's filing included as many suggestions as possible from other entities.

"Through this filing, I believe we have enhanced the flexibility of services for our customers," Mazanec said.

Tetco proposes to:

Unbundle the company's transportation, sales, and storage services at upstream system receipt points near producing areas.
Provide open access, no-notice, firm transportation and firm and interruptible storage services equally to all shippers.
Set rates for services on a straight fixed variable design with an alternative that would allow small customers to reduce the effect of adapting to such rates.
Offer a transportation aggregation balancing service to promote pooling and development of market centers and control an aggregator's gas balance on Tetco's transmission system.

TENNECO GAS

Bob Thomas, Tenneco Gas chairman and chief executive officer, said reorganizing operations into four divisions--transportation services, marketing, business development, and marketing affiliate Tenngasco--will allow the company to compete more effectively in the business environment created by Order 636.

"While we will continue to fine tune the organization as we implement the changes required by Order 636, this basic structure will position us to successfully meet those challenges," Thomas said.

Under the new company structure:

Transportation services will manage gas transportation and related regulated services on the Tenneco pipeline system.
Marketing will develop Tenneco's portfolio of merchant services under Order 636, introduce them to the marketplace, and implement them according to guidelines specified by the new rule.
Business development will manage the company's growth opportunities, including U.S. and international joint ventures and power generation, market development, supply development, and investment projects.
Tenngasco will remain a separate entity responsible for nonregulated interstate and Texas intrastate marketing.

"Flattening our organization positions us to be more flexible, streamlines decision making, fosters teamwork, and enhances our responsiveness to customers," said Steve Chesebro, Tenneco Gas president and chief operating officer.