Major Teppco Pipeline Settlement Reached

NPGA and a coalition of shippers known as the Propane Group have reached a settlement with Enterprise TEPPCO resolving a major inventory policy. Pipeline policy and tariff changes may have significant operational and financial impacts to our industry and its customers. The success of this new reasonable policy working with TEPPCO is the result of NPGA and companies directly and indirectly involved as shippers standing together. The settlement agreement, which has a five-year duration, resolves a dispute extending back to April 2010. The Propane Group originally protested the inventory policy as overly restrictive, harmful to small shippers, and not sufficiently transparent.

Negotiations among the parties were held in the latter half of 2010 under the auspices of a FERC settlement judge, but the breakthrough came earlier this year during private negotiations. Once finalized, the settlement agreement was submitted for FERC approval jointly by the Propane Group and Enterprise TEPPCO on August 8, 2011. On August 10, 2011 FERC's chief administrative law judge issued an order shortening the initial comment period to August 18, 2011 and the reply comment period to August 23, 2011. Final FERC approval could come in a matter of weeks.

The settlement satisfies all of the core principles sought by NPGA: increased flexibility for shippers; greater protection for small shippers; and incorporation of the new policy within the FERC tariff. Importantly for propane shippers and customers, the settlement provides for greater operational flexibility making it easier to avoid overstorage and understorage penalties. Small shippers are protected by a provision granting them 5000 barrels if their adjusted daily deliveries fall below that level. Furthermore, any penalties incurred last summer under the old inventory policy that would not be incurred under the new policy will be credited to a shipper's account.  

NPGA wishes to extend special thanks to participating small marketers, large marketers, and propane producers for their steadfast support of the Propane Group's objectives over the past 15 months. The Propane Group members were AmeriGas; BP Products North America; CHS; ConocoPhillips; Cress Gas Company; Eastern Propane Gas; Ferrellgas;  Global Gas; Growmark; NGL Supply Wholesale; Patten's Gas; Ressler Propane; SemStream; and Texas Liquids Partners.  One other non-NPGA member company also participated.

This settlement is the latest in a string of successful results achieved by NPGA's pipeline advocacy program. The program seeks to promote and protect the interests of the propane industry and its customers by communicating, educating, and advocating propane infrastructure related matters with regulators and legislators, propane related pipelines and propane industry members. For additional information on how to get involved with this active program, please contact Phil Squair at psquair@npga.org.


 



 

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