On June 14, 2012 the Commission accepted the tariff filing of Iroquois Gas Transmission System, L.P. (“Iroquois”) specifying the priority rules that should apply to Iroquois’ transportation and other services for initial scheduling purposes and in the event of a constraint at either a receipt or a delivery point or along the transportation path.  Previously, Iroquois’ priority scheme only governed the allocation of mainline transportation path capacity.  Subject to a compliance filing from Iroquois, the proposed tariff records will become effective on July 6, 2012.

Iroquois initially filed its proposed tariff records on January 6, 2012.  On February 3, 2012, the Commission accepted and suspended Iroquois’ proposed tariff revisions and, in light of other recent orders  that addressed the issue but were pending rehearing, invited parties to submit briefs addressing whether the Commission should allow allocation of secondary firm capacity based on price .  In its brief, Iroquois defended its historical and previously approved methodology to base secondary transaction allocation on the highest percentage of the applicable maximum rate, and also confirmed that, when a capacity release is involved, Iroquois will allocate the released capacity based on the applicable rate of the releasing shipper and not the rate paid by the replacement shipper. 

In the order accepting Iroquois’ filing, the Commission reaffirmed its policy to allow pipelines “to allocate out of path secondary firm capacity based upon either (1) percentage of maximum rate or (2) absolute price subject to the condition that all maximum rate shippers are scheduled before any secondary service is scheduled for non-maximum rate shippers.”  As such, the Commission found Iroquois’ allocation of secondary firm capacity by price to be just and reasonable and did not require any modification of that allocation under Natural Gas Act, section 5.  The Commission also accepted certain clarifications proposed by Iroquois to address issues raised by commenters.
To view a copy of the order, click here.