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On November 8, 2005, California Gas Transmission changed its nomination system, INSIDEtracc, revising nomination screens and implementing bumping. The nomination screen changes are very apparent. The bumping change affected the processing rules governing nomination sequencing on PG&E's system. The implication of this change is not as apparent, and was not communicated in training sessions or materials provided by CGT. We apologize for any inconvenience this has caused our customers. This article describes the nomination sequencing issue and discusses the impact of these rule changes.

The Issue

Changes implemented November 8 altered the way supplies are allocated to downstream nominations when a supply shortfall occurs. All nominations associated with a firm transportation contract now receive the highest priority regardless of the destination ranking for that nomination. All firm nominations are sequenced first. Then, any nominations from the same TSA or pool that do not involve a firm transportation contract (as-available, Market Center, and pool to pool) are sequenced according to the destination rankings. When there are multiple nominations involving firm transportation contracts, destination rankings are used to allocate the gas across those nominations.

The Impact

The following example will help explain this change. For simplicity, Elapsed Pro rata Scheduled Quantity (EPSQ) minimums have not been factored into this example:

150 Dth are nominated from an upstream Transportation Service Agreement (TSA) at Malin, to a Malin Receipt Pool. There are three corresponding nominations out of the Malin Pool:

• 30 Dth nominated to a Market Center park account at Malin (no transportation), with a destination rank of 1 by the customer
• 20 Dth nominated using as-available transportation (AA) to the Citygate, with a destination rank of 12 by the customer
• 100 Dth nominated using Negotiated Firm transportation (NFT) to the Citygate, with a destination rank of 13 by the customer

CGT requests 150 Dth from the upstream pipeline but only 110 Dth are confirmed back.

Prior to the November 8 system changes, gas would have been allocated as follows based on the customer's destination rankings:

• Rank 1: 30 Dth to the Market Center account (no transportation)
• Rank 12: 20 Dth to the as-available contract
• Rank 13: 60 Dth to the firm NFT contract, cut from 100 Dth

As of November 8, when a supply shortfall occurs, gas is allocated based on firm transportation having the highest priority:

• Rank 13: 100 Dth to the firm NFT contract
• Rank 1: 10 Dth to the Market Center account (no transportation)
• Rank 12: 0 Dth to the as-available contract

Even though the destination ranking for Market Center is the highest of these three nominations, the firm contract (which has the lowest ranking in this example) will flow first because of the firm transportation associated with the nomination.

What Now?

CGT is re-evaluating these sequencing rules and we are committed to working with our customers to minimize any nomination impacts. Watch Pipe Ranger for update articles on this issue.

In the meantime, if you have any questions, concerns or comments, please call CGT's Gas Scheduling Group or a CGT Account Services Representative.