December 19, Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, N.E. Washington, D.C

Transcription

1 December 19, 2012 Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, N.E. Washington, D.C Re: Transwestern Pipeline Company, LLC Docket No. RP13- Dear Ms. Bose: Pursuant to Rule 207(a)(5) of the Rules of Practice and Procedure of the Federal Energy Regulatory Commission ( Commission ), 18 C.F.R (a)(5) (2012), Transwestern Pipeline Company, LLC ( Transwestern ) hereby submits for filing: A Petition for Approval of Stipulation and Agreement of Settlement ( Petition ) requesting that the Commission approve the enclosed Stipulation and Agreement of Settlement ( Settlement ) by January 25, 2013; The Settlement; A draft notice of the Petition setting a twelve (12)-day deadline for interventions and comments and a reply comment deadline of no later than five (5) days thereafter; and A draft Commission order. Transwestern respectfully requests that the Commission establish a procedural schedule requiring comments to be submitted within twelve (12) days from the date of this filing, and reply comments, if needed, to be submitted within five (5) days thereafter. Transwestern respectfully requests that the Commission issue an order approving the Settlement by January 25, All parties participating in the settlement process are aware of the timing for interventions, comments and reply comments and the date requested for an order approving the Settlement, and no party has opposed these deadlines. Granting approval of the Settlement by January 25, 2013, will provide the benefits of the Settlement to all stakeholders at the earliest possible time and will provide

2 Docket No. RP Transwestern with the time necessary to make the system programming changes required to implement the scheduling protocol provisions of the Settlement by May 1, 2013, the desired implementation date for such provisions If there are any questions concerning this filing, please contact me at (281) 714- Respectfully submitted, Attachments /s/ Shelley A. Corman Shelley A. Corman Sr. Vice President

3 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION In the Matter of ) ) Docket No. RP Transwestern Pipeline Company, LLC ) PETITION OF TRANSWESTERN PIPELINE COMPANY, LLC FOR APPROVAL OF STIPULATION AND AGREEMENT OF SETTLEMENT AND REQUEST FOR EXPEDITED ACTION Pursuant to Rule 207(a)(5) of the Federal Energy Regulatory Commission s ( FERC or Commission ) Rules of Practice and Procedure, 18 C.F.R (a)(5) (2012), Transwestern Pipeline Company, LLC ( Transwestern ) hereby petitions the Commission for approval of the Stipulation and Agreement of Settlement ( Settlement ) submitted herewith and respectfully requests that the Commission act on the Settlement as soon as possible but in no event later than January 25, In support hereof, Transwestern respectfully shows as follows: I. BACKGROUND Transwestern and its shippers have engaged in collaborative discussions over a number of months in an effort to frame system balancing and operational issues facing electric generators and other shippers on the Transwestern system and find viable solutions for these issues. These collaborative discussions have involved a number of shipper group meetings and conference calls, as well as one-on-one phone calls, meetings and s with a wide range of shippers and point operators on the system. These discussions have resulted in an agreement on several tariff changes, as well as a new

4 programming change to be implemented for a one-year trial period involving Transwestern s existing scheduling provisions. Transwestern and other parties active in these discussions (collectively, the Settling Parties ) have formulated the Settlement described herein to memorialize and present this agreement for Commission approval. While Transwestern intends to continue a collaborative dialogue with electric generators and other shippers on the Transwestern system in an effort to continue to find solutions to operational issues that arise, Transwestern is filing the Settlement at this time so that the important benefits and enhancements underlying the Settlement will be available to Transwestern s shippers at the earliest possible time. II. PETITION FOR APPROVAL OF SETTLEMENT The Settlement reflects the agreement of the Settling Parties to enhance daily scheduling and gas balancing flexibility for electric generators and other firm shippers on the system, including a programming change to be implemented for a one-year trial period involving Transwestern s existing scheduling provisions, while clarifying and strengthening Transwestern s tools to deal with critical system operations. The Commission has encouraged pipelines and their customers to resolve differences before the pipeline makes a filing with the Commission because such approach provides a resolution of issues without the expense of a hearing and lengthy litigation. 1 The Settlement provides solutions that attempt to address various issues that otherwise may have been in dispute in a Section 4 tariff proceeding. The Settlement eliminates uncertainty for the Settling Parties with respect to various scheduling and balancing matters and avoids the burden and expense of processing a Section 4 filing. The 1 Transwestern Pipeline Company, LLC, 136 FERC 61,158 (2011). 2

5 avoidance of the costs and burdens of litigating these issues and the ability to achieve a collaborative solution benefit all of the parties, the Commission and the public interest. Transwestern submits that the Settlement is fair, equitable and in the public interest and should be approved without modification or condition. Transwestern respectfully requests that the Commission issue an order approving the Settlement by January 25, Transwestern is authorized to state that all Settling Parties support or do not oppose such request. Granting approval by this date will provide the benefits of the Settlement to all stakeholders at the earliest possible time and will provide Transwestern with the time necessary to make the system programming changes required to implement the scheduling protocol provisions of the Settlement by May 1, 2013, the desired implementation date for such provisions. III. CORRESPONDENCE AND COMMUNICATIONS Transwestern requests that all correspondence and communications concerning this filing be served on each of the following: *Shelley A. Corman 2 Sr. Vice President *Blair V. Lichtenwalter Director, Rates and Regulatory Affairs Transwestern Pipeline Company, LLC 711 Louisiana Street, Suite 900 Houston, Texas (281) Shelley.Corman@energytransfer.com Blair.Lichtenwalter@energytransfer.com *Emery J. Biro, III Associate General Counsel Transwestern Pipeline Company, LLC 711 Louisiana Street, Suite 900 Houston, Texas (832) Emery.Biro@energytransfer.com *James D. Seegers James E. Olson Suzanne E. Clevenger Vinson & Elkins L.L.P. 2 Designated as the responsible Company official under Section 154.7(a)(2) of the Commission s regulations. 3

6 1001 Fannin, Suite 2500 Houston, Texas Phone: (713) * Designated to receive service pursuant to Rule 2010 of the Commission s Rules of Practice and Procedure. Transwestern respectfully requests that the Commission waive Rule 203(b)(3) in order to allow all designated representatives to be included on the Commission s official service list. IV. CONCLUSION Transwestern respectfully requests that the Commission grant this Petition and approve the Settlement without condition or modification. Transwestern further requests that the Commission grant any other authorizations or waivers that may be necessary to approve the Settlement. In addition, Transwestern requests that the Commission act on the Settlement as soon as possible but in no event later than January 25, Respectfully submitted, TRANSWESTERN PIPELINE COMPANY, LLC By: Shelley Corman Sr. Vice President Blair V. Lichtenwalter Director, Rates and Regulatory Affairs Transwestern Pipeline Company, LLC 711 Louisiana Street, Suite 900 Houston, Texas (281) /s/ James D. Seegers James D. Seegers James E. Olson Suzanne Clevenger Vinson & Elkins L.L.P Fannin, Suite 2500 Houston, Texas (713) Emery J. Biro, III Associate General Counsel Transwestern Pipeline Company, LLC 711 Louisiana Street, Suite 900 Houston, Texas (281) Dated: December 19,

7 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION In the Matter of ) ) Docket No. RP Transwestern Pipeline Company, LLC ) STIPULATION AND AGREEMENT OF SETTLEMENT Transwestern Pipeline Company, LLC ( Transwestern ) submits this Stipulation and Agreement of Settlement ( Settlement ) in lieu of making a Natural Gas Act ( NGA ) Section 4 tariff filing. Transwestern hereby seeks any and all necessary authorizations under the NGA and any necessary waivers of the Federal Energy Regulatory Commission s ( FERC or Commission ) regulations, prior Commission orders, and the provisions of Transwestern s FERC Gas Tariff Fourth Revised Volume No. 1 ( Tariff ) that are necessary to implement in full all of the provisions of the Settlement. Transwestern and its shippers have engaged in collaborative discussions in an effort to enhance daily scheduling and gas balancing flexibility for electric generators and other firm shippers on the Transwestern system, while clarifying and strengthening Transwestern s tools to deal with critical system conditions. As a result of these discussions, the Settlement has been reached among Transwestern and the other parties listed on Appendix A (Transwestern and such other parties are referred to herein individually as a Settling Party or Party, or collectively, as the Settling Parties or Parties ). The terms and conditions of the Settlement provide for changes to Transwestern s Tariff, and clarify and document certain scheduling protocols to be

8 implemented for a one-year trial period. The Settling Parties submit that these changes are a reasonable means to address varied interests among shippers and point operators on the system and provide more certainty to all stakeholders with respect to matching supply to electric generation and other markets along the system and to balancing system receipts and deliveries. The Settlement also provides more certainty to system stakeholders regarding Alert Day notices, responsibility for related penalties and the procedure for refunding amounts that are collected pursuant to penalty assessments. The Settlement is a carefully crafted and delicate compromise among many Parties with diverse and often competing interests. The Settlement is an integrated package that must be reviewed and approved in its entirety in order to become effective. The Parties stipulate and agree to the following: ARTICLE I SCOPE OF SETTLEMENT The Settlement reflects the agreement of the Settling Parties to enhance daily scheduling and gas balancing flexibility for electric generators and other firm shippers on the Transwestern system and to provide more certainty with respect to certain operational and administrative procedures. The agreement is reflected in the terms of this Settlement, which includes an agreement on tariff changes reflected on the pro forma tariff records contained in Appendix B hereto and an agreement on a programming change involving Transwestern s existing tariff scheduling provisions. ARTICLE II SCHEDULING Section 1 The Settling Parties agree to an outline of certain scheduling procedures and computer system protocols which follow the scheduling provisions set forth in Section 22 of the General Terms and Conditions of the Transwestern Tariff 2

9 ( GT&C ), but provide additional clarity on how firm shippers can make changes following the Timely Nomination Cycle. The provisions to which the Settling Parties agree are reflected in the protocol attached hereto as Appendix C ( Protocol ). Section 2 On or before one (1) year following the Settlement Effective Date, Transwestern shall convene a meeting or conference call with its shippers to discuss the results of implementing the procedures set forth in the Protocol, whether the Protocol has provided the benefits and flexibility contemplated by the Settling Parties and whether any modifications to the Protocol are necessary or desired by the shippers. For thirty (30) days following such meeting or conference call, the Settling Parties shall work in good faith to reach consensus among the Settling Parties and all other interested parties at the time on continuing for an additional period of time some or all provisions of the Protocol and on any modifications to the Protocol. If the Settling Parties and other interested parties at the time reach a consensus on continuing the Protocol in effect after the oneyear trial period, with or without modifications, Transwestern shall promptly file a new settlement pertaining to such continuation of the Protocol for Commission review and approval and all Settling Parties agree to support or not oppose such filing; or, if after such thirty (30) day period (or any extension thereof to which the Settling Parties agree), the continuation of the Protocol with or without modification is opposed by any Settling Party or other interested party, but Transwestern and a majority of the other Settling Parties reach a consensus on continuing the Protocol in effect after the one-year trial period, with or without modifications, Transwestern shall promptly file new tariff records with the Commission reflecting such consensus, in which case all Settling Parties retain 3

10 their rights to comment on and protest such filing. The Protocol shall remain in effect until the Commission accepts or rejects such new settlement or Tariff filing. Section 3 The Settling Parties agree that the desired implementation date for the Protocol is May 1, ARTICLE III ADDITIONAL SCHEDULING CYCLE Section 1 The Settling Parties agree to revise Section 22.5 of the GT&C, as shown on the marked pro forma tariff records contained in Appendix B. These revisions will provide additional scheduling flexibility and implement the Final A.M. Nomination Cycle. Section 2 Transwestern will file revised tariff records to implement the revisions to Section 22.5 of the GT&C within fifteen (15) days following the Settlement Effective Date, with such revised tariff records being in substance identical to the pro forma tariff records included in Appendix B, updated for any Commission-approved intervening changes. Transwestern shall request in such tariff filing that the tariff records become effective on the first day of the first month following the date of the tariff filing. ARTICLE IV ALERT DAY Section 1 The Settling Parties agree to revise Section 22.4 of the GT&C, as shown on the marked pro forma tariff records contained in Appendix B. These revisions will provide for Same Day Alert Day notifications and responsibility for Alert Day penalties. Section 2 Transwestern will file revised tariff records to implement the revisions to Section 22.4 of the GT&C within fifteen (15) days following the Settlement Effective Date, with such revised tariff records being in substance identical to the pro 4

11 forma tariff records included in Appendix B, updated for any Commission-approved intervening changes. Transwestern shall request in such tariff filing that the tariff records become effective on the first day of the first month following the date of the tariff filing. Section 3 Any and all amounts imposed for Alert Day penalties pursuant to Section 22.4 of the GT&C for Alert Days declared through and including November 30, 2012, are deemed to be no longer due and payable, and Transwestern shall refund amounts paid with respect to such Alert Day penalties to the Operators that have paid such amounts. Transwestern shall have no other refund responsibility under Section 22.4 of the GT&C for penalties associated with any Alert Day declared on or before November 30, Section 4 On or before one (1) year following the Settlement Effective Date, Transwestern shall convene a meeting or conference call with its shippers, in conjunction with the meeting or conference call described in Section 2 of Article II of this Settlement, to discuss the results of implementing the revisions to Section 22.4 of the GT&C shown on the marked pro forma tariff records contained in Appendix B, including the Same Day Alert Day notifications, responsibility for Alert Day penalties and the procedure for refunding amounts collected pursuant to penalty assessments. For thirty (30) days following such meeting or conference call, the Settling Parties shall work in good faith to reach consensus among the Settling Parties and all other interested parties at the time on maintaining the provisions of Section 22.4 of the GT&C, as shown in Appendix B, or on any modifications thereto. If, during the thirty (30) day period (or any extension thereof to which the Settling Parties agree), (i) the Settling Parties and other interested parties reach a consensus on modifications to Section 22.4 of the GT&C, Transwestern shall 5

12 promptly file a new settlement with the Commission that reflects the consensus of such parties on such modifications, or (ii) Transwestern and a majority of the other Settling Parties reach a consensus on modifications to Section 22.4, Transwestern shall promptly file new tariff records with the Commission proposing to implement such modifications (all Settling Parties opposing such modifications will retain their rights to comment on and protest such filing). Section 22.4 of the GT&C, as shown in Appendix B, shall remain in effect until the Commission accepts or rejects such new settlement or Tariff filing. ARTICLE V SETTLEMENT EFFECTIVE DATE The Settlement shall become effective upon the first day of the first month following the date on which a Commission order approving the Settlement, without modifications or conditions that are materially adverse and unacceptable to any Settling Party, becomes final ( Settlement Effective Date ). For purposes of the Settlement, a Commission order shall be deemed final when it is no longer subject to rehearing or appeal. An order shall be considered final and no longer subject to rehearing or appeal if, after 30 days elapse from the issuance of the order, no request(s) for rehearing of the order has been filed, and in the event a request for rehearing has been filed, then the order shall be considered final and no longer subject to rehearing or appeal if, after 60 days elapse from the issuance of the order on rehearing, no petition(s) for review in an appropriate circuit court of appeals of the relevant order(s) has been filed. The foregoing assumes that the 30 th day or the 60 th day, as applicable, is a business day; if it is not, then the order shall be final and no longer subject to rehearing or appeal at the end of the first 6

13 business day after the 30 th day or the 60 th day, as applicable, if no request(s) for rehearing or petition(s) for review, as applicable, has been filed. For purposes of the Settlement, any modification made, or condition attached, to the Settlement by the Commission shall be deemed acceptable to a Settling Party, unless such party notifies the other Parties, within twenty (20) days after the date of the Commission order, that such modification or condition is materially adverse to it and is not acceptable. If a modification or condition is materially adverse and not acceptable to a Party (and is not removed by the Commission on rehearing), then the Settlement shall be deemed null and void, and of no force or effect. ARTICLE VI EFFECTIVENESS OF THE SETTLEMENT Section 1 A final Commission order approving the Settlement shall constitute final approval of all necessary authorizations to effectuate the provisions of the Settlement. Section 2 A final Commission order approving the Settlement shall constitute a waiver of compliance with all Commission policies, rules, and regulations, prior Commission orders, and Transwestern s Tariff if, and to the extent necessary, to effectuate all of the provisions of the Settlement. ARTICLE VII PRIVILEGED DOCUMENT Until the Settlement is approved and becomes effective, it shall be privileged and of no effect, and it shall not be admissible in evidence in any proceeding, to the same effect as provided under Rule 602 of the Commission s Rules of Practice and Procedure, 18 C.F.R (2012). 7

14 ARTICLE VIII RESERVATIONS Section 1 The provisions of the Settlement are not severable and may become effective only in accordance with the terms of the Settlement. Section 2 It is specifically understood and agreed by and among the Parties that the Settlement represents a negotiated settlement only with respect to the issues set forth herein. Except to the extent explicitly set forth in the Settlement, neither the Commission, its Staff, Transwestern nor any other Party shall be deemed to have approved, accepted, agreed to, or consented to any policy, methodology, or other principle underlying or supposed to underlie any of the matters provided for in the Settlement. Section 3 It is understood and agreed that: (a) the provisions of the Settlement relate only to the matters specifically referred to in the Settlement and (b) no person waives any claim or right that it may otherwise have with respect to any matter not expressly provided for in the Settlement. Section 4 Commission approval of the Settlement shall constitute the requisite approval necessary to permit the implementation of the provisions of the Settlement and shall also constitute a determination that all Settlement terms and provisions, are fair, equitable, and in the public interest. ARTICLE IX MISCELLANEOUS PROVISIONS Section 1 Appendices A, B and C are incorporated herein by reference and made a part of the Settlement for all purposes, as if fully set forth in the Settlement. Section 2 Capitalized terms not defined in the Settlement shall have the meaning ascribed to them in Transwestern s Tariff. 8

15 Section 3 The Settlement shall inure to the benefit of the successors, assigns, or purchasers for value of the stock or assets, of all Settling Parties. Section 4 The standard of review of proposed changes to the provisions of the Settlement is the just and reasonable standard. Section 5 The various provisions of this Settlement are non-severable components of an overall negotiated resolution of all the issues discussed herein. Section 6 This Settlement represents a negotiated resolution of only the specific matters addressed herein, and except as specifically provided in this Settlement, no Party shall be deemed to have waived any claim or right in a future proceeding. There are no other agreements or understandings among the Parties related to this Settlement except as stated herein, and this Settlement represents the entire agreement of the Parties with respect to the matters resolved in this proceeding. This Settlement is not intended to resolve or affect any other proceeding pending before the Commission, courts or any other governmental authority, nor does Commission approval of this Settlement constitute approval of, or precedent regarding, any principle or issue in these proceedings. Section 7 The terms of this Settlement are contractual, not a mere recital, and this Settlement is the result of negotiations among the Parties, each of which has participated in the drafting of this Settlement. No Party shall be deemed the drafter of this Settlement, and this Settlement shall not be construed against any Party as the drafter. Section 8 Each Party agrees that such Party shall not take any action that would interfere with the performance of this Settlement by any other Party or that would adversely affect any of the rights provided for in this Settlement. No Party shall do 9

16 indirectly what it is prohibited from doing directly by the immediately preceding sentence. Section 9 No modification of the terms and provisions of this Settlement shall be made except by the execution of a written agreement by Transwestern and the other Settling Parties, as approved by the Commission, provided, further, that if the Commission, in approving this Settlement modifies the Settlement in a manner that materially affects Transwestern or the other Settling Parties, Transwestern and any of the other Settling Parties will be entitled to challenge such modification. ARTICLE X CONCLUSION WHEREFORE, Transwestern respectfully requests approval of this Settlement. Respectfully submitted, TRANSWESTERN PIPELINE COMPANY, LLC By: /s/ Shelley A. Corman Shelley Corman Sr. Vice President Transwestern Pipeline Company, LLC 711 Louisiana Street, Suite 900 Houston, Texas (281) Dated: December 19,

17 UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION DRAFT NOTICE Transwestern Pipeline Company, LLC Docket No. RP NOTICE OF PETITION FOR APPROVAL OF SETTLEMENT (, 2012) Take notice that on December 19, 2012, Transwestern Pipeline Company, LLC ( Transwestern ) filed a Petition for Approval of Stipulation and Agreement of Settlement, including a proposed Stipulation and Agreement of Settlement ( Settlement ). Transwestern states that it has engaged in collaborative discussions with its shippers over a number of months in an effort to frame system balancing and operational issues facing electric generators and other shippers on the Transwestern system and find viable solutions for these issues. These discussions have resulted in an agreement on several tariff changes and a new programming change involving Transwestern s existing scheduling provisions. Transwestern respectfully requested that the Commission act on the Settlement as soon as possible but in no event later than January 25, Comments on the filing must be submitted within twelve (12) days from the date of the filing, and reply comments, if needed, must be submitted within five (5) days thereafter. The Commission encourages electronic submission of protests and interventions in lieu of paper using the efiling link at Persons unable to file electronically should submit their comments to the Federal Energy Regulatory Commission, 888 First Street, N.E., Washington, D.C This filing is accessible on-line at using the elibrary link and is available for review in the Commission s Public Reference Room in Washington, D.C. There is an esubscription link on the web site that enables subscribers to receive notification when a document is added to a subscribed docket. For assistance with any FERC Online service, please ferconlinesupport@ferc.gov, or call (866) (toll free). For TTY, call (202) Comment Date: 5:00 p.m. Eastern time on [12 days from the date of the filing]. Kimberly D. Bose, Secretary

18 DRAFT UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION Transwestern Pipeline Company, LLC Attn: Shelley A. Corman Sr. Vice President Transwestern Pipeline Company, LLC 711 Louisiana Street, Suite 900 Houston, Texas In Reply Refer To: Docket No. RP Dear Ms. Corman: 1. On December 19, 2012, Transwestern Pipeline Company, LLC ( Transwestern ) pursuant to Rule 207(a)(5) of the Commission s Rules of Practice and Procedure, 18 C.F.R (a)(5) (2012), filed a petition for approval of a Stipulation and Agreement of Settlement ( Settlement ). The Commission grants the petition and approves the Settlement as it appears fair and reasonable and in the public interest. 2. The Commission issued a public notice of the petition with interventions and protests due by [Notice Date]. Pursuant to 18 C.F.R (2012), all timely filed motions to intervene are granted. 3. Article I states that the Settlement reflects the agreement of the Settling Parties to enhance daily scheduling and gas balancing flexibility for electric generators and other firm shippers on the Transwestern system and provides more certainty with respect to certain operational and administrative procedures. 4. Article II provides details of the Protocol, as provided in Appendix C, that outline a oneyear trial period of certain scheduling procedures and computer system protocols which follow the scheduling provisions set forth in Section 22 of Transwestern s General Terms and Conditions and provide clarity on how all firm shippers can make changes following the Timely Nomination Cycle. Article II also provides that the desired implementation date for the Protocol is May 1, Articles III and IV provide for revisions to Transwestern s Tariff as shown on the tariff records attached to the Settlement. Within 15 days of the Settlement Effective Date, Transwestern shall file the tariff records contained in Appendix B of the Settlement.

19 Docket No. RP Article V defines the Settlement Effective Date as the first day of the first month following the date on which a Commission order approving the Settlement, without modifications or conditions that are materially adverse and unacceptable to any Settling Party becomes final. 7. Article VI defines the effectiveness of the Settlement. 8. Article VII provides that the Settlement is privileged and of no effect until it is approved and becomes effective. 9. Article VIII states that the Settlement is not severable, represents a negotiated settlement only with respect to the issues resolved therein, and except to the extent explicitly set forth in the Settlement, neither Transwestern, the Commission, its Staff, nor any Party shall be deemed to have approved, accepted, agreed to, or consented to any policy, methodology, or other principle underlying or supposed to underlie any of the matters provided for in the Settlement. 10. Article IX contains various miscellaneous provisions, including the provision that the standard for review of proposed changes to the Settlement is the just and reasonable standard. 11. The Commission s approval of this Settlement does not constitute approval of, or precedent regarding, any principle or issue in this proceeding.

20 UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION DRAFT NOTICE Transwestern Pipeline Company, LLC Docket No. RP NOTICE OF PETITION FOR APPROVAL OF SETTLEMENT (, 2012) Take notice that on December 19, 2012, Transwestern Pipeline Company, LLC ( Transwestern ) filed a Petition for Approval of Stipulation and Agreement of Settlement, including a proposed Stipulation and Agreement of Settlement ( Settlement ). Transwestern states that it has engaged in collaborative discussions with its shippers over a number of months in an effort to frame system balancing and operational issues facing electric generators and other shippers on the Transwestern system and find viable solutions for these issues. These discussions have resulted in an agreement on several tariff changes and a new programming change involving Transwestern s existing scheduling provisions. Transwestern respectfully requested that the Commission act on the Settlement as soon as possible but in no event later than January 25, Comments on the filing must be submitted within twelve (12) days from the date of the filing, and reply comments, if needed, must be submitted within five (5) days thereafter. The Commission encourages electronic submission of protests and interventions in lieu of paper using the efiling link at Persons unable to file electronically should submit their comments to the Federal Energy Regulatory Commission, 888 First Street, N.E., Washington, D.C This filing is accessible on-line at using the elibrary link and is available for review in the Commission s Public Reference Room in Washington, D.C. There is an esubscription link on the web site that enables subscribers to receive notification when a document is added to a subscribed docket. For assistance with any FERC Online service, please ferconlinesupport@ferc.gov, or call (866) (toll free). For TTY, call (202) Comment Date: 5:00 p.m. Eastern time on [12 days from the date of the filing]. Kimberly D. Bose, Secretary

21 DRAFT UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION Transwestern Pipeline Company, LLC Attn: Shelley A. Corman Sr. Vice President Transwestern Pipeline Company, LLC 711 Louisiana Street, Suite 900 Houston, Texas In Reply Refer To: Docket No. RP Dear Ms. Corman: 1. On December 19, 2012, Transwestern Pipeline Company, LLC ( Transwestern ) pursuant to Rule 207(a)(5) of the Commission s Rules of Practice and Procedure, 18 C.F.R (a)(5) (2012), filed a petition for approval of a Stipulation and Agreement of Settlement ( Settlement ). The Commission grants the petition and approves the Settlement as it appears fair and reasonable and in the public interest. 2. The Commission issued a public notice of the petition with interventions and protests due by [Notice Date]. Pursuant to 18 C.F.R (2012), all timely filed motions to intervene are granted. 3. Article I states that the Settlement reflects the agreement of the Settling Parties to enhance daily scheduling and gas balancing flexibility for electric generators and other firm shippers on the Transwestern system and provides more certainty with respect to certain operational and administrative procedures. 4. Article II provides details of the Protocol, as provided in Appendix C, that outline a oneyear trial period of certain scheduling procedures and computer system protocols which follow the scheduling provisions set forth in Section 22 of Transwestern s General Terms and Conditions and provide clarity on how all firm shippers can make changes following the Timely Nomination Cycle. Article II also provides that the desired implementation date for the Protocol is May 1, Articles III and IV provide for revisions to Transwestern s Tariff as shown on the tariff records attached to the Settlement. Within 15 days of the Settlement Effective Date, Transwestern shall file the tariff records contained in Appendix B of the Settlement.

22 Docket No. RP Article V defines the Settlement Effective Date as the first day of the first month following the date on which a Commission order approving the Settlement, without modifications or conditions that are materially adverse and unacceptable to any Settling Party becomes final. 7. Article VI defines the effectiveness of the Settlement. 8. Article VII provides that the Settlement is privileged and of no effect until it is approved and becomes effective. 9. Article VIII states that the Settlement is not severable, represents a negotiated settlement only with respect to the issues resolved therein, and except to the extent explicitly set forth in the Settlement, neither Transwestern, the Commission, its Staff, nor any Party shall be deemed to have approved, accepted, agreed to, or consented to any policy, methodology, or other principle underlying or supposed to underlie any of the matters provided for in the Settlement. 10. Article IX contains various miscellaneous provisions, including the provision that the standard for review of proposed changes to the Settlement is the just and reasonable standard. 11. The Commission s approval of this Settlement does not constitute approval of, or precedent regarding, any principle or issue in this proceeding.

23 APPENDIX A The following Parties either support or do not oppose the Settlement: Agave Energy Company Arizona Public Service Company BP Energy Company Chevron U.S.A. Inc. ConocoPhillips Company Enbridge Marketing (U.S.) L.P. New Mexico Gas Company, Inc. Pacific Summit Energy LLC Pacific Gas & Electric Company Red Willow Production Company Sacramento Municipal Utility District Salt River Project Agricultural Improvement and Power District Sequent Energy Management, L.P. Southern California Gas Company Southwest Gas Corporation Tenaska Marketing Ventures Transwestern Pipeline Company, LLC UNS Gas, Inc.

24 APPENDIX B Marked Pro Forma Tariff Record

25 Transwestern Pipeline Company, LLC Part VI - General Terms and Conditions FERC Gas Tariff 22. Nomination and Scheduling of Capacity Fourth Revised Volume No. 1 Version NOMINATION AND SCHEDULING OF CAPACITY 22.1 Nominations of Receipts and Deliveries A. Unless otherwise mutually agreed, or as provided in Section 22.5 of this Section 22, Shipper shall nominate to Transporter's Commercial Group according to the following Minimum NAESB standard nomination cycles: 1) The Timely Nomination Cycle: 11:30 a.m. for nominations leaving control of the nominating party; 11:45 a.m. for receipt of nominations by the Transporter; (including from Title Transfer Tracking Service Providers ("TTTSPs")); noon to send quick response; 3:30 p.m. for receipt of completed confirmations by Transporter from upstream and downstream connected parties; 4:30 p.m. for receipt of scheduled quantities by Shipper and point operator (central clock time on the day prior to flow). 2) The Evening Nomination Cycle: 6:00 p.m. for nominations leaving control of the nominating party; 6:15 p.m. for receipt of nominations by Transporter (including from TTTSPs); 6:30 p.m. to send quick response; 9:00 p.m. for receipt of completed confirmations by Transporter from upstream and downstream connected parties; 10:00 p.m. for Transportation Service Provider to provide scheduled quantities to affected Shippers and point operators, and to provide scheduled quantities to bumped parties (notice to bumped parties), (central clock time on the day prior to flow). Transporter shall provide affected parties with notification of bumping through the Shipper's choice of electronic notice delivery mechanism. Unless the affected party and Transporter have agreed to exclusive notification via EDI/EDM, the affected party should provide Transporter with at least one Internet address to be used for electronic notice delivery of notification of bumping. Transporter will support the sending of electronic notification of bumping to addresses provided by each affected party. Affected parties will manage internal distribution of notices received by electronic notice delivery. Scheduled quantities resulting from an Evening Nomination that does not cause another service requester on the subject Transportation Service Provider to receive notice that it is being bumped should be effective at 9:00 a.m. on gas day; and when an Evening Nomination causes another service requester on the subject Transportation Service Provider to receive notice that it is being bumped, the scheduled quantities should be effective at 9:00 a.m. on gas day. 3) The Intraday 1 Nomination Cycle: 10:00 a.m. for nominations leaving control of the nominating party; 10:15 a.m. for receipt of nominations by the Transporter (including from "TTTSPs"); 10:30 a.m. to send quick response; 1:00 p.m. for receipt of completed confirmations by Transporter from upstream and downstream connected parties; 2:00 p.m. for Transportation Service Provider to provide scheduled quantities to affected Shippers and point operators, and to provide scheduled quantities to bumped parties (notice to bumped parties), (central clock time on the day prior to flow). Transporter shall provide affected parties with notification of bumping through the Shipper's choice of electronic notice delivery mechanism. Unless the affected party and Transporter have agreed to exclusive notification via EDI/EDM, the affected party should provide Transporter with at least one Internet address to be used for electronic notice delivery of notification of bumping. Transporter will support the sending of electronic notification of bumping to addresses provided by each affected party. Affected parties will manage internal distribution of notices received by electronic notice delivery. Scheduled quantities resulting from Intraday 1 Nominations should be effective at 5:00 p.m. on gas day. 4) The Intraday 2 Nomination Cycle: 5:00 p.m. for nominations leaving control of the nominating party; 5:15 p.m. for receipt of nominations by the Transporter (including TTTSPs); 5:30 p.m. to send quick response; 8:00 p.m. for receipt of completed confirmations by Transporter from upstream and downstream connected parties; 9:00 p.m. for Transportation Service Provider to provide scheduled quantities to affected Shippers and point operators (central clock time on the gas day). Scheduled quantities resulting from Intraday 2 Nominations should be effective at 9:00 p.m. on gas day. Bumping is not allowed during the Intraday 2 Nomination Cycle. B. Such nominations shall contain the following information: 1) The contract number under which service is being nominated; and 2) The quantity of gas, in dekatherms, to be tendered; and 3) The receipt point, the upstream contract number and/or identifier code and the Filed On: December 19, 2012 associated ranking; and Effective On:

26 Transwestern Pipeline Company, LLC Part VI - General Terms and Conditions FERC Gas Tariff 22. Nomination and Scheduling of Capacity Fourth Revised Volume No. 1 Version ) The delivery point, the downstream contract number and/or identifier code and the associated ranking; and 5) The term of the nomination (beginning and ending date), provided the nomination begin and end dates are within the term of Shipper's Service Agreement; and 6) If applicable, the affected contract number(s) and quantities if the gas nominated in Paragraph 22.1(A) above will be transported directly to another contract under Rate Schedule(s) FTS-1, LFT, FTS-2, FTS-4, FTS-5, ITS-1 or ITS-2. 7) Shipper rankings. 8) Overrun quantities shall be nominated as a separate transaction. C. For purposes of The Evening Nomination Cycle, the Intraday 1 Nomination Cycle and The Intraday 2 Nomination Cycle, "provide" shall mean for transmittals pursuant to standards 1.4.1, receipt at the designated site, and for purposes of other forms of transmittal, it shall mean send or post. D. With respect to the timely nomination/confirmation process at a receipt or delivery point, in the absence of agreement to the contrary, the lesser of the confirmation quantities should be the confirmed quantity. If there is no response to a request for confirmation or an unsolicited Confirmation Response, the lesser of the confirmation quantity or the previously scheduled quantity should be the new confirmed quantity. Previously scheduled quantity is intended to be the scheduled quantity previously scheduled for the prior gas day during that gas day's timely nomination period. E. With respect to the processing of requests for increases during the intraday nomination/confirmation process, in the absence of agreement to the contrary, the lesser of the confirmation quantities should be the new confirmed quantity. If there is no response to a Request For Confirmation or an unsolicited confirmation response, the previously scheduled quantity should be the new confirmed quantity. F. With respect to the processing of requests for decreases during the intraday nomination/confirmation process, in the absence of agreement to the contrary, the lesser of the confirmation quantities should be the new confirmed quantity, but in any event no less than the elapsed-proratedscheduled quantity. If there is no response to a request for confirmation or an unsolicited confirmation response, the greater of the confirmation quantity or the elapsed-prorated-scheduled quantity should be the new confirmed quantity. G. The explicit confirmation process requires that the confirming party respond to a Request for Confirmation or initiate an unsolicited confirmation response. Absent mutual agreement to the contrary, explicit confirmation is the default methodology. H. Nominations received after the nomination deadline shall be processed after the nominations received before the nomination deadline. I. The receiver of a nomination initiates the confirmation process. The party that would receive a request for confirmation or an unsolicited confirmation response may waive the obligation of the sender to send. J. At the end of each gas day, Transporter should provide the final scheduled quantities for the just completed gas day. With respect to the implementation of this process via the and scheduled quantity related standards, Transporter should send an end of gas day scheduled quantity document. Receivers of the end of gas day scheduled quantity document can waive the sender's sending of the end of gas day scheduled quantity document. K. Transporter shall use Shipper-provided rankings when making reductions during the scheduling process to the extent this methodology does not conflict with Transporter's FERC Gas Tariff. L. The sending party shall adhere to nomination, confirmation, and scheduling deadlines. The receiving party has the right to waive the deadline. Filed On: December 19, 2012 Effective On:

27 Transwestern Pipeline Company, LLC Part VI - General Terms and Conditions FERC Gas Tariff 22. Nomination and Scheduling of Capacity Fourth Revised Volume No. 1 Version M. Shipper shall provide to Transporter the following information: (1) the name, position and phone number of a person authorized by Shipper to submit nominations; and (2) the name and phone number of a person authorized by Shipper to perform day-to-day dispatching. N. If Shipper fails to comply with all the provisions of this Section 22.1, then Transporter shall not schedule the initiation of or changes to service nominated by Shipper. O. Transporter reserves the right to take any necessary action to verify gas is flowing as scheduled by Transporter. Upon request of Transporter, Shipper shall contact its source of supply and verify to Transporter that the source is flowing as scheduled hereunder. P. For in-kind fuel reimbursement methods, Transportation Service Provider should not reject a nomination for reasons of rounding differences due to fuel calculation of less than 5 Dth. Q. A package ID is a way to differentiate between discrete business transactions. When used, Package ID should be supported for nominating and scheduling; mutually agreed between the applicable parties for allocation and imbalance reporting; supported for invoicing (Sales and Purchase), and mutually agreed for transport invoicing. Use of the Package ID is at the discretion of the service requester, and if sent, should be accepted and processed by the service provider Scheduling of Capacity A. Transporter shall schedule all firm transportation quantities prior to the scheduling of interruptible transportation quantities. The transportation priority for fuel should be the same as the level of service as the transaction to which it applies. B. With respect to receipt point allocations, transportation service within the contract quantities shall be scheduled in the following order: 1. Quantities scheduled from Primary Physical Receipt Points on a pro rata basis. 2. Quantities scheduled from Primary pool Receipt Points on a pro rata basis. 3. Quantities scheduled from Alternate Receipt Points on a pro rata basis. 4. Interruptible transportation quantities at the receipt point within contract quantities and overrun transportation quantities nominated in excess of contract quantities under Rate Schedule(s) FTS-1, LFT, FTS-2, FTS-4, FTS-5, ITS-1 and ITS-2 shall be scheduled based upon the highest price. If two or more Shippers are paying the same highest price, then a pro rata allocation will be made. For purposes of allocating capacity, Shippers willing to pay more than the maximum tariff rate will be considered to be paying the maximum tariff rate. C. With respect to delivery point allocations, transportation service within the contract quantities shall be scheduled in the following order: 1. Quantities scheduled to Primary Delivery Points on a pro rata basis. 2. Quantities scheduled to Alternate Delivery Points on a pro rata basis. 3. Interruptible transportation quantities at the delivery point within contract quantities and overrun transportation quantities nominated in excess of contract quantities under Rate Schedule(s) FTS-1, LFT, FTS-2, FTS-4, FTS-5, ITS-1 and ITS-2 shall be scheduled based upon the highest price. If two or more Shippers are paying the same highest price, then a pro rata allocation will be made. For purposes of allocating capacity, Shippers willing to pay more than the maximum tariff rate will be considered to be paying the maximum tariff rate. D. With respect to mainline/lateral capacity allocations, transportation service within the contract quantities shall be scheduled in the following order: 1. Quantities scheduled on firm transportation agreements (whether primary or alternate) when the allocation is at a location within the primary path of the contract on a pro rata basis. 2. Quantities scheduled on alternate paths when the allocation is at a location outside the primary path of the contract on a pro rata basis. Filed On: December 19, 2012 Effective On:

28 Transwestern Pipeline Company, LLC Part VI - General Terms and Conditions FERC Gas Tariff 22. Nomination and Scheduling of Capacity Fourth Revised Volume No. 1 Version Interruptible transportation quantities on the path within contract quantities and overrun transportation quantities nominated in excess of contract quantities under Rate Schedule(s) FTS-1, LFT, FTS-2, FTS-4, FTS-5, ITS-1 and ITS-2 shall be scheduled based upon the highest price. If two or more Shippers are paying the same highest price, then a pro rata allocation will be made. For purposes of allocating capacity, Shippers willing to pay more than the maximum tariff rate will be considered to be paying the maximum tariff rate. A path is defined by a Shipper's Primary Receipt and Delivery Points and direction of flow. E. After volumes have been scheduled, Transporter has the right to reduce receipts and/or deliveries of natural gas below the scheduled volume if the available capacity for such quantity is reduced as a result of force majeure or any operational consideration reasonably determined by Transporter. Transporter shall reduce all scheduled overrun transportation volumes or Rate Schedules ITS-1 and ITS-2 volumes on the basis of the lowest price first Operational Procedure Provisions 22.4 Alert Day A. If Transporter determines, in the exercise of its reasonable judgment, that sufficient supplies are not being received by Transporter at the receipt point(s) for transportation to a Shipper, then Transporter may, at Transporter's option, unilaterally re-schedule, upon two (2) hours notice by Transporter to Shipper, on a prospective basis only, the quantities nominated by a Shipper so as to conform to the quantities being received at such point(s), or temporarily suspend deliveries to the Shipper. If scheduled quantities are not being taken at the delivery point(s), then Transporter may, at Transporter's option, unilaterally re-schedule, upon two (2) hours notice by Transporter to Shipper, on a prospective basis only, the quantities nominated by a Shipper so as to conform to the quantities being taken at such delivery point(s), or temporarily suspend receipts of gas from the Shipper. Such two (2) hours notice shall not be applicable,and such re-scheduled volumes may be effective immdiately, notwithstanding any other provision of this Section 22, in the event of operational distress, which shall be defined as including any situation which prevents Transporter from operating in a safe and efficient manner, consistent with applicable laws, rules, regulations, standard industry operating practices, and Transporter's Tariff, or from maintaining the integrity of pipeline operations; provided, however, Transporter shall not unilaterally reschedule volumes without two (2) hours notice unless such rescheduling is reasonably anticipated to reduce or eliminate said operational distress. B. An Operational Flow Order is an order issued to alleviate conditions, inter alia, which threaten or could threaten the safe operations or system integrity, of the transportation service providers system or to maintain operations required to provide efficient and reliable firm service. Whenever a Transportation Service Provider experiences these conditions, any pertinent order should be referred to as an Operational Flow Order. C. Upon request by Transporter, Operator shall provide estimated hourly flows to Transporter's gas control personnel. A. Transporter shall have the right to declare an Alert Day in the event of operational distress caused by actual or anticipated flow variances at receipt or delivery points which threaten the integrity or safe operation of the pipeline. Transporter shall use reasonable efforts to resolve the situation causing the operational distress prior to declaring an Alert Day. A High Line Pack Alert Day shall be applied to flow variances that exacerbate the high line pack conditions (i.e.g. overdelivery into Transporter at a receipt point(s) or undertakes from Transporter at a delivery point(s)). A Low Line Pack Alert Day shall be applied to flow variances that exacerbate the low line pack conditions (i.e.g. underdelivery into Transporter at a receipt point(s) or overtakes from Transporter at a delivery point(s)). Transporter will localize its imposition of an Alert Day to the smallest affected area necessary to resolve the problem and to those Operator(s) causing the problem where such Operator(s) may be identified. Filed On: December Transporter 19, 2012 will determine whether it will issue an Alert Day based on the operating Effective status On: of