It's that time of year again...time when an Allocation on the Redwood Path might become necessary.  In order to be prepared, we are republishing information that was released a year ago.  Please take a few minutes to read up and feel free to ask any questions of your CGT Sales Representative.

During the summer of 2013, on two occasions (gas days July 1, 2013 and August 21, 2013), PG&E's California Gas Transmission needed to allocate as-available capacity on the Redwood and Mission Paths, pursuant to gas Rule 14. Although we cannot predict when an Allocation will be necessary, the probability of an Allocation increases in the summer.

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 transportation from Wild Goose Storage, Lodi Gas Storage, and Central Valley Gas Storage (the northern Independent Storage Providers) all compete for the same as-available pipeline space on the Line 400/401 system.

When total confirmed volumes from these sources exceed the capacity of the Line 400/401 system, CGT will need to prorate the as-available confirmed volumes down to the available capacity to assure the safe operation of the system. This process is done in accordance with gas Rule 14.

During a Redwood Allocation, CGT schedules the Line 400/401 system as follows:

• Firm Redwood and firm Mission nominations are sequenced first. (The firm Mission nominations are only those coming from the three northern ISPs, if any.)
• As-available Mission off-system nominations are sequenced second. (Again, the as-available Mission off-system nominations are those coming from the three northern ISPs, if any.)
• As-available Mission on-system and as-available Redwood (both on- and off-system) are sequenced third, with pro-rata allocations of service. (This step is pro-rating the as-available Redwood nominations with the remaining net withdrawals, i.e., as-available Mission-on, from the three northern ISPs.)

When can CGT implement a Redwood Path Allocation?

CGT can implement a Redwood Path Allocation during the confirm process for all nomination cycles. When CGT finds it necessary to implement an Allocation, customers will be notified as quickly as possible via a Pipe Ranger article and an INSIDEtracc notice.

What are transportation options if Redwood Path Allocation is anticipated?

In the past, CGT attempted to put out an "Alert" to the market when we believed an Allocation might be likely. We are discontinuing that practice, as it is difficult to foresee with any accuracy the system conditions that might predicate an Allocation. We also believe that calling an "Alert" that turns out to be unwarranted is overly disruptive to the market.

We will, however, commit to calling an Allocation as early as possible and notifying the market as early as possible.

The conditions that might lead to an Allocation:

• Volumes flowing on the Redwood Path are near stated capacity.
• There are high withdrawals coming out of the independent storage facilities that flow into the Line 400/401 system (Wild Goose Storage, Lodi Gas Storage, and Central Valley Gas Storage).
• High gas prices in the Southwest are making the Baja Path a less favorable transportation option.

If these conditions exist and you are concerned that a Redwood Path Allocation might be imminent, you have the following options available to you:

• Keep an especially close balance between your demand and your supply (always a good idea!).
• Switch your supply needs to the Baja Path.
• If you have firm Redwood-on or Baja-on Transportation capacity, 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.