El Paso Natural Gas Co. (EPNG) has filed a settlement at the Federal Energy Regulatory Commission (FERC) that resolves its general rate case with natural gas pipeline customers such as Southern California Gas Co. (SCG) as well as the question of who pays for unsubscribed capacity.
Months of confidential negotiations resulted in agreements with 95 percent of EPNG's customers, and with the California, Nevada, and Arizona commissions. Most of the 30 gas distribution companies and municipal utilities are members of the Southwest Customer Coalition, a group formed by SCG in 1994 to address the issue of capacity turnback on the EPNG and Transwestern pipelines.
Customers will pay EPNG $254.8 million for capacity turned back under "step-down" options or contract expirations. In exchange, they will receive credits amounting to 35 percent of the net revenue EPNG receives for marketing turned-back capacity over next eight years (em but only after the pipeline recovers amounts allocated to interruptible and nontraditional firm services.
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