Reserved Capacity
PG&E is reserving 325 Mdth/d8 of annual capacity and 50Mdth/d of summer season capacity from this open season to be sold in a subsequent open season. PG&E contends that is protects the smaller end-use customer who is not prepared to participate in the current open season, or to bid for long-term contracts.
PanCanadian presents a different perspective on this reserved capacity and is concerned that reducing the amount of capacity that is available in this open season will increase the demand -- and therefore the rate tolerance and term tolerance of bidders -- for the capacity that is made available. PanCanadian believes that by reserving capacity, PG&E is manipulating the market and that the Commission should demand a full and acceptable justification for the reservation before approving the application.
The Indicated Producers agree that some amount should be withheld from the open season, but argue that this issue could also be analyzed and reviewed as part of the Gas Accord II procedure.
Calpine questions the reasonableness of the proposed 20% set aside and is concerned that this reserved capacity might be rolled into rates. Calpine wants the rate treatment of this capacity clarified.
8 The Commission is concerned that the core reservation amount may not be sufficient to cover a 2% expected growth rate per year, for the 15 years of the long-term contracts. Based on the current core holdings of the Gas Accord, 360 additional Mdth/d will need to be available by the end of the 15 years to meet the projected growth in core demand. The 325 Mdth/d that PG&E is reserving from this open season could be needed for core demand and would not be available for a second open season.
