UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION. Mississippi Canyon Gas Pipeline, L.L.C. ) Docket Nos.

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1 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Mississippi Canyon Gas Pipeline, L.L.C. ) Docket Nos. RP ) REQUEST OF MISSISSIPPI CANYON GAS PIPELINE, L.L.C. FOR EXTENSION OF TIME TO IMPLEMENT AN ELECTRONIC SHORT-TERM CAPACITY RELEASE POSTING AND BIDDING SYSTEM Pursuant to Rule 207 of the Federal Energy Regulatory Commission s ( Commission ) Rules of Practice and Procedure, 1 Mississippi Canyon Gas Pipeline, L.L.C. ( Mississippi Canyon ) hereby requests an extension of time to implement an electronic short-term capacity release posting and bidding system consistent with the requirements of Order No As explained below, Mississippi Canyon s third-party vendor (Quorum) has recently completed software development that will enable Mississippi Canyon to be able to handle electronically no cap, short-term capacity release posting and bidding compliant with the terms of Order No However, this software is incompatible with Mississippi Canyon s current version of Quorum (Version 2.0), and Mississippi Canyon will therefore need to upgrade to the latest version of Quorum (Version 3.1) in order to utilize this software. Accordingly, Mississippi Canyon requires additional time to purchase, install on its system and implement this new version of Quorum computer software, before Mississippi Canyon can be able to handle electronically no cap, short-term capacity release posting and bidding compliant with the terms of Order No Accordingly, Mississippi Canyon requests an extension until December 31, 2010, to put in place its electronic short-term capacity release posting and bidding system. In the meantime, 1 18 C.F.R (2008). 2 Promotion of a More Efficient Capacity Release Market, Order No. 712, 123 FERC 61,286 (2008).

2 Mississippi Canyon will continue to handle the posting and bidding for such releases on a manual basis. There have been no such releases on Mississippi Canyon to date. In support hereof, Mississippi Canyon respectfully shows as follows: I. IDENTITY OF PETITIONER Mississippi Canyon operates a 45-mile, 30 inch diameter pipeline system that extends from West Delta Block 143 and interconnects with the Venice Gas Plant and 2 interstate pipelines onshore. Mississippi Canyon is an indirect subsidiary of Enbridge Inc. The names, titles, and mailing addresses of the persons to whom correspondence and communications concerning this Request should be addressed are: *Chris Kaitson Assistant Secretary Mississippi Canyon Gas Pipeline, L.L.C Louisiana, Suite 3300 Houston, Texas Phone: (713) Fax: (713) Chris.kaitson@enbridge.com *Susan M. Schwager Senior Counsel Mississippi Canyon Gas Pipeline, L.L.C Louisiana, Suite 3300 Houston, Texas Phone: (713) Fax: (713) Susan.schwager@enbridge.com * Persons designated to receive service pursuant to Rule 2010 of the Commission s Rules of Practice and Procedure. II. PROCEDURAL BACKGROUND Order No. 712 removed the price ceiling on capacity releases of one year or less. Order No. 712 at P 25. The effective date of the rules promulgated under Order No. 712 was July 30, On July 29, 2008, in Docket No. RP , Mississippi Canyon filed the Request of Mississippi Canyon Gas Pipeline, L.L.C. for Extension of Time to Implement an Electronic 2

3 Short-Term Capacity Release Bidding System. In its Request for Extension of Time, Mississippi Canyon advised the Commission that: (1) Mississippi Canyon s website was not designed to handle electronically shortterm capacity release posting and bidding consistent with the requirements of Order No. 712, and Mississippi Canyon s outside vendor designing the new electronic short-term capacity release posting and bidding system had informed Mississippi Canyon that it should have the new short-term capacity release posting and bidding system fully operational by the end of the first quarter 2009; (2) Based on the representation of Mississippi Canyon s third-party vendor, Mississippi Canyon believed that it would be able to fully implement by July 30, 2009 the electronic short-term capacity release posting and bidding system required by Order No. 712; and (3) Beginning July 30, 2008, Mississippi Canyon would administer the short-term capacity release provisions of Order No. 712 through a manual capacity release posting and bidding process. On September 25, 2008, the Commission granted Mississippi Canyon s Request for Extension until July 30, Order Granting Extensions of Time, 124 FERC 61,288 (September 25, 2008). On June 29, 2009, in Docket No. RP , Mississippi Canyon filed its second Request of Mississippi Canyon Gas Pipeline, L.L.C. for Extension of Time to Implement an Electronic Short-Term Capacity Release Bidding System, wherein Mississippi Canyon requested an additional one-year extension from the Commission, as Mississippi Canyon s outside vendor 3

4 designing the new electronic short-term capacity release posting and bidding system (Quorum) had informed Mississippi Canyon that the vendor would not have the new electronic short-term capacity release system fully operational by July 30, 2009, but that the vendor should have the new electronic short-term capacity release posting and bidding system fully operational by April Mississippi Canyon requested that the Commission grant it permission to continue to manage posting and bidding for short-term capacity releases on its system manually until its electronic short-term capacity release posting and bidding system would become fully operational, which per its vendor s representations Mississippi Canyon estimated to be July 30, The Commission did not issue a ruling on this motion. In late December 2009, Quorum advised Mississippi Canyon that Quorum had succeeded in designing a new electronic short-term capacity release posting and bidding system, but for the first time advised that this system is not compatible with the version of the Quorum software that Mississippi Canyon utilizes. Accordingly, Mississippi Canyon was advised by Quorum that Mississippi Canyon is required to upgrade to the latest version of Quorum software in order to install and implement this new electronic short-term capacity release posting and bidding system. Mississippi Canyon has been advised by Quorum and by Enbridge internal personnel that to purchase, install, and implement this new version of Quorum will require at least eight months. This delay is further exacerbated by the fact that several other pipeline companies are also in need of this latest version of Quorum software, and therefore are in line to receive this software. Accordingly, with this Request for Extension, Mississippi Canyon requests from the Commission an additional extension, to December 31, , during which period Mississippi 3 This requested extension reflects an additional five months beyond the extension to July 30, 2009, which Mississippi Canyon previously requested. 4

5 Canyon will purchase, install and implement the new version of Quorum and therefore the electronic short-term capacity release posting and bidding system. Mississippi Canyon requests that the Commission grant it permission to continue to manage posting and bidding for shortterm capacity releases on its system manually until its electronic short-term capacity release posting and bidding system is fully operational by December 31, III. REQUEST FOR EXTENSION OF TIME AND PERMISSION TO CONTINUE TO IMPLEMENT AN INTERIM MANUAL BIDDING PROCESS Mississippi Canyon requests an extension of time to implement an electronic short-term capacity release posting and bidding system that is capable of meeting all of the requirements of Order No. 712 and, in the interim, requests permission to continue to manage such posting and bidding, if any, manually. Mississippi Canyon notes that there has not been a capacity release request on its system to date. Mississippi Canyon s Quorum system is not currently capable of managing no-cap, short-term capacity release posting and bidding electronically. Over the past two years, Mississippi Canyon has met frequently with Mississippi Canyon s third-party provider (Quorum) to discuss Quorum s ability to comply with the new requirements, Quorum s progress toward that compliance, and suggestions from industry users as to how the new screens/fields will be designed. Quorum has advised Mississippi Canyon that development of this new process has been hindered by Quorum s addition of a necessary complete system upgrade to comply with all the NAESB 1.8 standards. As of the end of December 2009, Quorum advised Mississippi Canyon, Quorum has finished designing the software necessary to provide the Version 3.1 of Quorum with the capability of managing nocap, short-term capacity release posting and bidding electronically. However, Quorum has for 5

6 the first time advised Mississippi Canyon that Mississippi Canyon s current version of Quorum (Version 2.0) will not be compatible with this capability, and that Mississippi Canyon must upgrade to Quorum Version 3.1 in order to obtain this capability. Mississippi Canyon has requested that Quorum upgrade Mississippi Canyon to Version 3.1, so that Mississippi Canyon can put in place this capability of managing no-cap, short-term capacity release posting and bidding electronically. Mississippi Canyon has been advised by Quorum and by Enbridge internal personnel that the purchase, installation, and implementation of this upgrade will require a minimum of eight months. In order to offer its shippers the full benefits of the provisions promulgated under Order No. 712, since July 30, 2008 Mississippi Canyon has offered its shippers a manual short-term capacity release posting and bidding process, and will continue to do so up until Mississippi Canyon s electronic short-term capacity release posting and bidding process is fully operational, which Mississippi Canyon and its vendor currently estimate to be December 31, Accordingly, Mississippi Canyon requests a further extension of the date to put in place an electronic short-term capacity release posting and bidding system, that is, until December 31, If the electronic system can be operational before December 31, 2010, Mississippi Canyon will put it into operation earlier than as allowed under the requested extension. Mississippi Canyon's current manual short-term capacity release posting and bidding process works as follows. A Transportation Services employee ( Employee ) receives an offer ( Offer ) from a releasing shipper via fax, telephone, or . The Employee ensures that all the required information is included in the Offer, including the duration of the release. The Employee then enters the data from the Offer into the Quorum software, and notes the short-term nature of the capacity release in a free form text field entitled Special Terms. For pre-arranged 6

7 deals, the Employee also notes whether or not the replacement shipper is an affiliate of either Mississippi Canyon or the releasing shipper. After entering the data into Quorum, the Employee posts a notice of the Offer on Mississippi Canyon s website, including all of the pertinent information. The Offer also is included in the capacity release report, along with any other capacity releases on Mississippi Canyon s system, that is posted on Mississippi Canyon s website. While Mississippi Canyon has awaited Quorum s compliance upgrades, Mississippi Canyon has continued to streamline its manual capacity release process. Improvements that Mississippi Canyon has implemented over the past two years include creating new forms, training staff to better understand capacity release, and improving the posting procedures for offers, bids, etc. Good cause exists for granting Mississippi Canyon an extension of time and permission to continue to handle in the interim short-term capacity release posting and bidding manually. It is not possible for Mississippi Canyon to have a compliant electronic short-term capacity release posting and bidding system in place by July 30, 2010, as previously contemplated, due to the above-referenced limitations of Mississippi Canyon s third-party vendor and the necessity for Mississippi Canyon to upgrade to a newer version of Quorum software. Mississippi Canyon will, however, continue to offer an interim, manual short-term capacity release posting and bidding process that will enable its shippers to bid for short-term capacity releases under terms consistent with the provisions of Order No This interim short-term capacity release posting and bidding process both removes the price cap and provides Mississippi Canyon s shippers with all the same bidding transparency that Mississippi Canyon s shippers will have once the electronic system is fully operational. Mississippi Canyon submits that, in light of the fact that there has not been a capacity release request on its system to date, this reflects a reasonable 7

8 accommodation under the circumstances. Good cause therefore exists for granting Mississippi Canyon an extension of time until December 31, 2010, to provide an electronic short-term capacity release posting and bidding system on its website, and for permitting Mississippi Canyon to continue to manage such short-term capacity release posting and bidding in the interim manually, as set forth herein. IV. CONCLUSION WHEREFORE, for the foregoing reasons, Mississippi Canyon respectfully requests that the Commission (1) grant Mississippi Canyon an extension of time until December 31, 2010 to provide an electronic short-term capacity release posting and bidding system on its website, and (2) in the interim, permit Mississippi Canyon to continue to manage such short-term capacity release posting and bidding manually, as set forth above. Respectfully submitted, Respectfully submitted, /s/ Susan M. Schwager February 4, 2010 Susan M. Schwager Senior Counsel Mississippi Canyon Gas Pipeline, L.L.C Louisiana, Suite 3300 Houston, Texas (713)

9 CERTIFICATE OF SERVICE I hereby certify that I have this day served the foregoing document upon all customers of Mississippi Canyon Gas Pipeline, L.L.C. ( Mississippi Canyon ), as well as all interested State commissions. In addition, a copy of this filing will be posted today on Mississippi Canyon s internet website. Dated at Houston, Texas, this 4th day of February, /s/ Kathy A. Thornton Kathy A. Thornton Regulatory Analyst II Mississippi Canyon Gas Pipeline, L.L.C. Louisiana, Suite 3300 Houston, Texas (832)