NPGA seeks equitable linefill program

December 1, 2003 By    

We encounter many challenges in this industry. One of the most compelling issues we face each year is ensuring a reliable supply of propane for our customers.

By now you’ve probably heard that the National Propane Gas Association has decided to sue the Federal Energy Regulatory Commission (FERC) over its decision approving a linefill proposal by the Mid-Atlantic Pipeline Company (MAPCO). I wanted to take this opportunity to let you know why we’ve done this and what we hope to accomplish by taking such an action.

One of the chief responsibilities of NPGA – indeed, one of the major reasons for moving our headquarters to Washington, D.C. – is to advocate positive and responsible public policies for propane infrastructure.

NPGA’s policy on linefill was established two years ago. We said that linefill programs should be proposed through cost-of-service filings with FERC, not through shipper surcharges. We still believe that to be the best way of handling the issue, but we’ve come to believe that opposition to such programs may not be in the best interest of customers or the industry. Therefore, NPGA’s policy now provides for negotiated linefill programs where pipeline companies and marketers negotiate whether and how to improve such operations.

Last July, representatives of MAPCO briefed NPGA on a revised linefill program to be funded through a shipper surcharge. MAPCO officials then were invited to present their program proposal to NPGA’s executive committee in August. It was our belief that negotiations on objectionable components of the program could lead to an equitable solution for all parties involved.

However, these negotiations were sidelined by FERC on Sept. 10 when it issued a decision that reversed four previous rulings from two separate dockets concerning the legality of shipper surcharges to finance linefill for a pipeline. FERC’s action effectively derailed the negotiations, which NPGA believes would have resulted in a sounder and more balanced linefill program for the north of Conway, Kan., system.

So what is my point in reviewing all this history?

I want the industry to know that NPGA filed suit against FERC to bring all parties back to the negotiating table to resume the give-and-take process that was interrupted. We took this action as a last resort to ask the court to return the FERC order back to the agency for further review and clear the way to resume the negotiations.

We’re hoping our actions will bring MAPCO officials back to the table. In our industry, we’ve found that working together for a common goal delivers much better results for all of us. That goes for helping out fellow marketers in the wake of Hurricane Isabel, or making sure that we are prepared for the challenges of the winter heating season.

We believe that a decision agreed upon by all interested parties on a linefill program will be a better way to increase reliability in the distribution system and make the program equitable for marketers, shippers and consumers alike.

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