13. Compensation or Relief for FAR Holders
Unable to Schedule FARs

This proceeding considers whether compensation or other relief should be provided to FAR holders who are unable to schedule their firm primary rights. SDG&E/SoCalGas initially proposed to establish reservation charge credits for FAR holders who are unable to schedule their firm primary rights in Cycle 1 due to scheduled maintenance and whose capacity remains unused, unexchanged, or unsold. RES recommends that, if scheduling cuts occur, FAR customers should have the option to turn back their contracted FARs.

These proposals are discussed below.

13.1. Reservation Charge Credits

We reject the proposal to establish reservation charge credits because such credits may encourage shippers to purchase excess incremental short-term FARs in order to enlarge their share of windowed FARs.⁷² The availability of reservation charge credits could encourage shippers to purchase excess incremental short-term FARs to increase their share of any windowed FARs, thereby exacerbating capacity constraints and increasing scheduling uncertainty.

Other modifications that we adopt in this decision, such as the revised scheduling priorities and the limitation on the sale and exchange of FARs during OFOs and scheduled maintenance periods, should reduce any need for reservation charge credits. Rejecting the reservation charge credit proposal resolves concerns that shippers might modify their nominating practices in order to receive credits, and concerns that shippers who do not receive such credits will unfairly subsidize shippers that do.

13.2. Turn Back Option

SDG&E/SoCalGas must provide customers who have a G-RPA1 FAR agreement that extends beyond October 1, 2011, the option to turn back their contract to SDG&E/SoCalGas effective September 30, 2011. Customers wishing to exercise the option to turn back their contract to SDG&E/SoCalGas must provide SDG&E/SoCalGas notice of intent to turn back capacity not less than two months prior to the start of the 2011 Open Season.⁷³

It is reasonable to provide customers who have a G-RPA1 FAR agreement extending beyond October 1, 2011 with the option to turn back the contract to SDG&E/SoCalGas effective September 30, 2011, because constraints caused by scheduled maintenance events and OFOs may have prevented customers from fully using their FARs, and turning back capacity will allow those customers to avoid continuing to pay the higher FAR reservation charges adopted in this proceeding during the remainder of the term of the multi-year contract.

It is reasonable to require customers wishing to exercise the option to turn back a contract to SDG&E/SoCalGas to provide SDG&E/SoCalGas notice of intent to turn back capacity not less than two months prior to the start of the 2011 Open Season.

⁷² This adopts Recommendation No. 4 of Exhibit No. JRO-1.

⁷³ This adopts Recommendation No. 10 of Exhibit No. JRO-1.