Supplemental Information of Eastern Shore Natural Gas Company under CP11-168.

Texas Gas Service Company a Division of ONOEK, Inc. v. El Paso Natural Gas Company Docket No. RP10-951 Prepared Answering Testimony of Suzanne Norquist Exhibit No. EPG-6 Docket No. RP10-951-000 SUMMARY OF PREPARED ANSWERING TESTIMONY OF SUZANNE NORQUIST Dr. Suzanne Norquist, a Principal Rates Analyst in the Rates Department for the El Paso Corporations pipelines, including El Paso Natural Gas Company (EPNG), submits answering testimony (Exhibit No. EPG-6) on behalf of EPNG responding to the testimony of Mr. Feingold for Texas Gas Service Company and Mr. Ekzarkhov for Commission Staff. Dr. Norquist demonstrates that the physical or so-called actual miles of haul proposed by Mr. Feingold and Mr. Ekzarkhov are fatally deficient as applied to EPNGs fuel costs, and thus are not reasonable alternatives to EPNGs existing postage-stamp fuel rate design. Dr. Norquist explains that Messrs. Feingold and Ekzarkhovs initial reliance on contract paths as a starting point for estimating actual flow mileage is inappropriate given that contract data is generally not a good proxy for variable daily operating conditions that are important in considering how to design rates for a significant variable cost like fuel. Dr. Norquist further details how Messrs. Feingold and Ekzarkhov then employ complex sets of highly subjective and erroneous assumptions to revise individual contract receipt/delivery/path mileage numbers to determine what they characterize as the actual miles of haul for gas flow on the EPNG system. Messrs. Feingold and Ekzarkhov claim certain contract paths on the EPNG system are unsupportable or impossible. For these unsupportable or impossible contract paths, Messrs. Feingold and Ekzarkhov develop adjusted mileage amounts that purportedly represent physical flow of gas on the EPNG system, by either assuming a new path and/or receipt point or by deriving various proxies or subjective adjustment factors for purported mileage. Dr. Norquist describes how Messrs. Feingold and Ekzarkhovs adjusted paths are not representative of actual, physical gas flows and are, therefore, not accurate measures of distance of haul on the EPNG system. In addition, Dr. Norquist explains that when Messrs. Feingold and Ekzarkhov 1 Docket No. RP10-951-000 identify unsupportable and impossible paths and reassign them (generally to a shorter path) in allocating fuel costs, they are disproportionately assigning the benefits of displacement to particular shippers or zones, including the Texas zone, instead of to all shippers who make the displacement possible. Dr. Norquist also notes that while Messrs. Feingold and ...