In response to a protest filed by NPGA and a coalition of other shippers on the Dixie Pipeline, the Federal Energy Regulatory Commission (FERC) issued a decision yesterday suspending Dixie's proposal to revise its proration policy until April 1, 2011, subject to the outcome of a technical conference they have ordered. FERC agreed with NPGA and the other protestors that Dixie's tariff raises serious issues, including the potential for favoring Dixie affiliates to the detriment of other shippers and the lack of specificity with respect to operational effects of the revision. FERC stated that the burden will be on Dixie to justify its proposal, and at the technical conference it will be required to explain, among other things, the basis for its decision to file this change, how it will operate in practice, and its impact on shippers.

The Dixie tariff proposal was filed with FERC on July 30, with a proposed effective date of September 1, 2010. The proposal added language to the tariff that “during periods of injection allocation, a Shipper’s historical volume to a specific destination will not be able to be used for movements east of that destination.” The Propane Group’s protest argued that the language was not specific enough to indicate how capacity allocation will operate in practice, nor was it clear how the revised procedure would affect nominating processes. Finally, the protest stated that absent an explanation of how allocation is supposed to operate, it will be within the pipeline’s discretion and likely not a matter of public knowledge. This was of particular concern with respect to Dixie, because its parent company has propane marketing subsidiaries that ship on the Dixie system and compete with unaffiliated shippers.

The FERC decision orders that the tariff is “accepted and suspended to be effective April 1, 2011, subject to the outcome of the technical conference”, which is to be convened within 180 days to explore the issues raised in the protests.

 Updates

Fall 2010 Board of Directors Meeting: Baltimore, Maryland: Confirm Your Hotel Reservations

Please contact Renaissance Reservations at 800-468-3571 and request the National Propane Gas Association group rate of $199 single/double occupancy, plus tax. Please reserve accommodations by Monday, September 6, 2010 to receive the discounted group rate.

For more information about the meeting, visit the board meeting webpage.

Events

Fall TS&S Committee Meeting: September 12-15, 2010

Fall Board of Directors Meeting: October 3-5, 2010