Brief Opposing Exceptions of El Paso Natural Gas Company in RP10-1398.

UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION El Paso Natural Gas Company ) Docket No. RP10-1398-000 BRIEF OPPOSING EXCEPTIONS OF EL PASO NATURAL GAS COMPANY David Cain Kenneth M. Minesinger Assistant General Counsel Howard L. Nelson El Paso Natural Gas Company Richard C. Green 2 North Nevada Avenue James Howard Colorado Springs, CO 80903 Francesca E. Ciliberti (719) 520-4370 Greenberg Traurig, LLP 2101 L Street, N.W. Suite 1000 Washington, DC 20037 (202) 331-3100 Counsel for El Paso Natural Gas Company September 19, 2012 A. Overview......................................................................................................................... 44 B. The ALJ Correctly Rejected The Proposals By TGS And Staff To Use Purported Actual Flows For Cost Allocation And Rate Design .................................................. 48 C. Edison and SoCal/SDG&E ............................................................................................. 59 1. Edison Is No Longer Pursuing A Zone Matrix Alternative ...................................... 59 2. Edisons Objections To The Existing Zone of Delivery Method, and Edisons Proposed Postage-Stamp Cost Allocation and Rate Design ...................... 60 D. The ALJ Correctly Rejected Proposals By Arizona Shippers To Exclude Certain Contracts From the Dth-Mile Study ............................................................................... 62 E. The ALJ Correctly Approved EPNGs Cost Allocation and Rate Design For Within Basin Rates ......................................................................................................... 64 F. The ALJ Correctly Accepted Most Aspects of EPNGs Proposed Rate Design for Hourly Service Rates................................................................................................. 71 1. EPNG Properly Relied on Equitable, Gulfstream and Portland in its Design of the Hourly Service Rates ...................................................................................... 72 2. The ALJ Correctly Approved EPNGs Use of Hourly Service Delivery Rights Instead of Capacity Reservation Nominations or Factors to Compute the Premium Factors ................................................................................................. 76 3. The ALJ Correctly Rejected Proposals to Limit the Application of the Premium Factors To Reflect Only 300 Miles of Pipeline Costs......................... 78 4. The ALJ Correctly Accepted the Use of Weighted Premium Factors to Allocate Usage-Related Costs............................................................................... 82 5. EPNGs Proposed Rate Design for Hourly Services Produces Hourly Service Rates That Are Lower than Other Rate Designs Approved For Hourly Services .... 83 G. The ALJ Correctly Approved EPNGs Proposed Rate Design for Rate Schedule IHSW............................................................................................................... 84 H. The ALJ Pr