El Paso Natural Gas can waive about $6.1 million worth of penalties for shippers that took too much gas off the pipeline system during the Southwest gas and power outages in February, the US Federal Energy Regulatory Commission announced Thursday.
In July the pipeline asked FERC to allow it to waive many of the penalties shippers incurred during the cold snap last winter that led to outages in Texas, New Mexico and Arizona. The company said the commission should grant the waivers because the gas supply was too restricted to avoid a critical condition on its system.
El Paso tried to prepare for the cold snap by packing the line and withdrawing gas from storage, but it was not enough to compensate for the shortage of supply caused by the weather, the pipeline said.
Cold temperatures caused icing at power plants, which led to rolling blackouts that triggered equipment failures in gas production areas, particularly in processing, storage and treatment plants, the pipeline said. Significant freezing of wellhead gas also cut the amount of supply fed into the system, it said.
El Paso doled out more than $6.9 million worth of penalties during the period, and the pipeline asked for FERC's approval to waive about $6.1 million of that total.
FERC granted the request on Thursday.
"The penalty waiver is supported by the acute stresses on El Paso's system during the February weather event, which made it extremely difficult and often impossible for both the pipeline and its shippers to operate normally," the order said.
