Redwood Path Allocation Process

Thursday, August 22, 2013

PG&E's California Gas Transmission has recently, on two occasions, needed to allocate as-available capacity on the Redwood Path, pursuant to gas Rule 14. This link will open in a new window CGT would like to provide some clarification around questions that customers may have as a result of an allocation event.

What is an “allocation” and why would one be implemented?

As-available Redwood Path supplies flowing from Malin (Gas Transmission Northwest) and Onyx Hill (Ruby Pipeline), and net withdrawals flowing on Mission Path as-available from Wild Goose Storage, Lodi Gas Storage, and Central Valley Gas Storage all compete for the same as-available pipeline space.

When total confirmed volumes from these sources exceed the capacity capability of the Line 400/401 system (i.e., Redwood Path), CGT will need to allocate the as-available confirmed volumes down to the level of safe operation of the system. This process is done in accordance with gas Rule 14 and involves running the confirmed process more than once to reach the appropriate level of confirmed as-available volumes.

The initial allocation of Redwood as-available capacity will be prorated based on each of the impacted independent storage provider's net withdrawal confirmed volumes. After the allowable withdrawal capacity for each storage provider is determined, CGT will rerun the confirm process and the withdrawal nominations from each storage provider will be confirmed as follows: Mission-off as-available service first, according to contract price with the lowest contract price interrupted first, and then Mission-on as available service nominations on a pro-rata basis, as all Mission-on as-available is at a price of zero.

Next, the as-available nominations trying to utilize the remaining Redwood Path as-available capacity will be reduced according to contract price, with the lowest contract price interrupted first.

When can CGT implement a Redwood Path allocation?

CGT can implement a Redwood Path allocation during the confirm process for any of the nomination cycles, i.e., Timely Confirm, Evening Confirm, Intraday 1 Confirm, or Intraday 2 Confirm. When CGT finds it necessary to implement an allocation, customers will be notified as quickly as possible via an INSIDEtracc notice and a Pipe Ranger article.

How do I manage my nominations in this event?

When possible, CGT will provide an "Alert" that a Redwood Path allocation may be imminent. If customers increase their as-available Redwood Path nominations greatly on the next nomination cycle, the impact could push the Redwood Path into an allocation situation. Please monitor your nominations carefully if an Alert has been called.

Please be aware, however, that large, unanticipated changes in nominations seen after the confirmation process has been run for a particular cycle may not provide CGT the flexibility of providing an Alert. Rather, an announcement of implementation of an allocation may be necessary instead.

What are my transportation options?

In addition to switching your supply needs to the Baja Path or a non-impacted ISP, if you have firm Redwood-on or Baja-on Transportation capacity, the option may be available for you to convert all or a portion of the contract MDQ under the STORAGE WITHDRAWAL OPTION provision under rate schedule G-AFT or G-NFT:

To transport storage withdrawals On-System, Customers may convert all or part of a Firm On-System Redwood or Firm On-System Baja Exhibit to a Firm On-System Mission Exhibit at any time prior to 60 minutes before the close of the Timely Nomination Cycle, as set forth in gas Rule 21. However, the full monthly demand charge is still applicable. 

Conversions of Firm On-System Baja Exhibits are limited to the amount of unsold Firm Redwood capacity available at the time of the requested conversion. Baja Exhibit conversions may be requested on a monthly basis, no more than five (5) days prior to the end of the month, for a maximum term of one month. Redwood Exhibit conversions have no maximum term limit.

Please contact a CGT Sales Representative to discuss this option or contact any of your CGT Representatives if you have questions about allocations.

Related Links